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Segment Disclosures
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Disclosures Segment Disclosures
We disclose four homebuilding reportable segments that aggregate geographically our homebuilding operating segments, and our mortgage banking operations presented as one reportable segment.  The homebuilding reportable segments are comprised of operating divisions in the following geographic areas:
Mid Atlantic: Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
North East: New Jersey and Eastern Pennsylvania
Mid East: New York, Ohio, Western Pennsylvania, Indiana and Illinois
South East: North Carolina, South Carolina, Florida and Tennessee
Homebuilding profit before tax includes all revenues and income generated from the sale of homes, less the cost of homes sold, selling, general and administrative expenses and a corporate capital allocation charge.  The corporate capital allocation charge is eliminated in consolidation and is based on the segment’s average net assets employed.  The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker (“CODM”) to determine whether the operating segment’s results are providing the desired rate of return after covering our cost of capital.  
Assets not allocated to the operating segments are not included in either the operating segment’s corporate capital allocation charge or the CODM’s evaluation of the operating segment’s performance.  We record charges on contract land deposits when it is determined that it is probable that recovery of the deposit is impaired.  For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of a Lot Purchase Agreement with the developer, or the restructuring of a Lot Purchase Agreement resulting in the forfeiture of the deposit.  Mortgage banking profit before tax consists of revenues generated from mortgage financing, title insurance and closing services, less the costs of such services and general and administrative costs.  Mortgage banking operations are not charged a corporate capital allocation charge.
In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between segment profit and consolidated profit before tax include unallocated corporate overhead (including all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense.  Overhead functions such as accounting, treasury and human resources are centrally performed and these costs are not allocated to our operating segments.  Consolidation adjustments consist of such items necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments.  Our external corporate interest expense primarily consists of interest charges on our 3.95% Senior Notes due 2022 and 3.00% Senior Notes due 2030 and is not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.
The following tables present segment revenues, profit and assets with reconciliations to the amounts reported for the consolidated enterprise, where applicable:
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenues:
Homebuilding Mid Atlantic$839,845  $982,032  $1,613,903  $1,863,356  
Homebuilding North East98,219  121,804  204,355  244,431  
Homebuilding Mid East299,955  359,908  620,650  698,457  
Homebuilding South East350,739  293,704  705,557  594,410  
Mortgage Banking31,610  42,746  58,431  86,551  
Total consolidated revenues$1,620,368  $1,800,194  $3,202,896  $3,487,205  
Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Income before taxes:
Homebuilding Mid Atlantic$98,067  $123,802  $179,740  $223,166  
Homebuilding North East6,658  11,563  16,809  23,023  
Homebuilding Mid East27,302  40,291  58,466  75,766  
Homebuilding South East42,765  30,825  89,909  65,861  
Mortgage Banking15,692  26,173  27,571  55,731  
Total segment profit before taxes190,484  232,654  372,495  443,547  
Reconciling items:
Contract land deposit reserve adjustment (1)(460) 374  (36,075) 1,324  
Equity-based compensation expense (2)(14,434) (18,577) (21,926) (37,910) 
Corporate capital allocation (3)59,870  56,177  116,521  110,735  
Unallocated corporate overhead(23,288) (29,354) (60,927) (61,089) 
Consolidation adjustments and other6,803  9,462  16,456  18,710  
Corporate interest expense(9,144) (6,024) (15,338) (11,998) 
Reconciling items sub-total19,347  12,058  (1,289) 19,772  
Consolidated income before taxes$209,831  $244,712  $371,206  $463,319  
(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2.
(2)The decrease in equity-based compensation expense for the three and six-month periods ended June 30, 2020 was primarily attributable to stock options issued in 2014 under the 2014 Equity Incentive Plan becoming fully vested in 2019. In addition, stock compensation expense for the six-month period ended June 30, 2020 was favorably impacted by higher stock option forfeitures during 2020.
(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments.  The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Corporate capital allocation charge:
Homebuilding Mid Atlantic$31,581  $31,378  $61,336  $61,794  
Homebuilding North East5,790  4,626  11,349  9,353  
Homebuilding Mid East9,687  9,497  19,050  18,512  
Homebuilding South East12,812  10,676  24,786  21,076  
Total$59,870  $56,177  $116,521  $110,735  
 June 30, 2020December 31, 2019
Assets:
Homebuilding Mid Atlantic$1,148,688  $1,024,996  
Homebuilding North East189,076  166,860  
Homebuilding Mid East346,232  293,773  
Homebuilding South East444,593  400,979  
Mortgage Banking384,576  560,407  
Total segment assets2,513,165  2,447,015  
Reconciling items:
Cash and cash equivalents1,982,890  1,110,892  
Deferred taxes121,526  115,731  
Intangible assets and goodwill49,756  49,834  
Operating lease right-of-use assets57,701  63,825  
Contract land deposit reserve(63,647) (27,572) 
Consolidation adjustments and other68,629  50,090  
Reconciling items sub-total2,216,855  1,362,800  
Consolidated assets$4,730,020  $3,809,815