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Segment Disclosures
 9 Months Ended
Sep. 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 September 30,Nine Months Ended September 30,
 2020201920202019
Revenues:
Homebuilding Mid Atlantic$949,472 $1,012,056 $2,563,375 $2,875,411 
Homebuilding North East157,973 120,478 362,328 364,909 
Homebuilding Mid East404,992 406,145 1,025,642 1,104,603 
Homebuilding South East408,314 334,652 1,113,871 929,062 
Mortgage Banking69,261 37,933 127,692 124,484 
Total consolidated revenues$1,990,012 $1,911,264 $5,192,908 $5,398,469 
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Income before taxes:
Homebuilding Mid Atlantic$104,700 $124,900 $284,440 $348,067 
Homebuilding North East14,272 13,164 31,081 36,187 
Homebuilding Mid East45,109 50,210 103,575 125,976 
Homebuilding South East52,554 39,721 142,463 105,582 
Mortgage Banking52,890 22,835 80,461 78,566 
Total segment profit before taxes269,525 250,830 642,020 694,378 
Reconciling items:
Contract land deposit reserve adjustment (1)4,867 248 (31,208)1,572 
Equity-based compensation expense (2)(13,639)(20,770)(35,565)(58,680)
Corporate capital allocation (3)60,662 57,887 177,184 168,621 
Unallocated corporate overhead(26,915)(27,914)(87,912)(89,003)
Consolidation adjustments and other (4)38,244 12,859 54,769 31,569 
Corporate interest expense(11,287)(5,966)(26,625)(17,964)
Reconciling items sub-total51,932 16,344 50,643 36,115 
Consolidated income before taxes$321,457 $267,174 $692,663 $730,493 
(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 nine month periods ended September 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 both the three and nine month periods ended September 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 September 30,Nine Months Ended September 30,
 2020201920202019
Corporate capital allocation charge:
Homebuilding Mid Atlantic$31,383 $31,504 $92,720 $93,297 
Homebuilding North East5,793 5,028 17,142 14,381 
Homebuilding Mid East10,386 9,791 29,436 28,303 
Homebuilding South East13,100 11,564 37,886 32,640 
Total$60,662 $57,887 $177,184 $168,621 

(4) The increase in our consolidation adjustments and other reconciling item for both the three and nine month periods ended September 30, 2020 relates primarily to the significant increase in lumber prices during the third quarter of 2020. Our reportable segments' results include intercompany profits of our production facilities, which were negatively impacted by the increase in lumber costs. The increase in lumber costs related to homes not yet settled is eliminated through the consolidation adjustment. As these homes currently in inventory are settled in subsequent quarters, our consolidated homebuilding margins will be negatively impacted by the higher lumber costs.
 September 30, 2020December 31, 2019
Assets:
Homebuilding Mid Atlantic$1,198,050 $1,024,996 
Homebuilding North East199,162 166,860 
Homebuilding Mid East395,668 293,773 
Homebuilding South East474,484 400,979 
Mortgage Banking403,878 560,407 
Total segment assets2,671,242 2,447,015 
Reconciling items:
Cash and cash equivalents2,539,460 1,110,892 
Deferred taxes125,743 115,731 
Intangible assets and goodwill49,717 49,834 
Homebuilding operating lease right-of-use assets54,964 63,825 
Finance lease right-of-use assets15,674 7,052 
Contract land deposit reserve(58,781)(27,572)
Consolidation adjustments and other101,901 43,038 
Reconciling items sub-total2,828,678 1,362,800 
Consolidated assets$5,499,920 $3,809,815