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Segment Disclosures
 9 Months Ended
Sep. 30, 2021
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 an LPA with the developer, or the restructuring of an LPA 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.  Our 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.  External corporate interest expense primarily consists of interest charges on our 3.95% Senior Notes due 2022 and 3.00% Senior Notes due 2030 (collectively, the “Senior Notes”), which are 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,
 2021202020212020
Revenues:
Homebuilding Mid Atlantic$1,082,710 $949,472 $3,067,267 $2,563,375 
Homebuilding North East213,087 157,973 568,524 362,328 
Homebuilding Mid East503,232 404,992 1,406,364 1,025,642 
Homebuilding South East537,586 408,314 1,482,731 1,113,871 
Mortgage Banking59,025 69,261 195,798 127,692 
Total consolidated revenues$2,395,640 $1,990,012 $6,720,684 $5,192,908 

Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Income before taxes:
Homebuilding Mid Atlantic$222,504 $104,700 $526,052 $284,440 
Homebuilding North East33,885 14,272 70,622 31,081 
Homebuilding Mid East81,021 45,109 189,849 103,575 
Homebuilding South East100,688 52,554 236,272 142,463 
Mortgage Banking40,249 52,890 140,183 80,461 
Total segment profit before taxes478,347 269,525 1,162,978 642,020 
Reconciling items:
Contract land deposit recoveries (impairments) (1)4,126 4,867 17,500 (31,208)
Equity-based compensation expense (15,009)(13,639)(42,859)(35,565)
Corporate capital allocation (2)64,055 60,662 188,638 177,184 
Unallocated corporate overhead(27,801)(26,915)(101,605)(87,912)
Consolidation adjustments and other (3)(56,786)38,244 (22,456)54,769 
Corporate interest expense(12,805)(11,287)(38,598)(26,625)
Reconciling items sub-total(44,220)51,932 620 50,643 
Consolidated income before taxes$434,127 $321,457 $1,163,598 $692,663 
(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)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,
 2021202020212020
Corporate capital allocation charge:
Homebuilding Mid Atlantic$31,057 $31,383 $92,788 $92,720 
Homebuilding North East6,719 5,793 19,214 17,142 
Homebuilding Mid East11,114 10,386 32,804 29,436 
Homebuilding South East15,165 13,100 43,832 37,886 
Total$64,055 $60,662 $188,638 $177,184 
(3)    The decrease in consolidation adjustments and other for the three and nine month periods of 2021 compared to the respective 2020 periods is driven by changes in lumber prices in 2021. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. For homes not yet settled, these intercompany profits are reversed through the consolidation adjustments. Due to the significantly higher lumber prices in the first half of 2021, the previously reversed intercompany profits were recognized in the third quarter through the consolidation adjustment as homes were settled, and our consolidated homebuilding margins were negatively impacted by the higher lumber costs.


 September 30, 2021December 31, 2020
Assets:
Homebuilding Mid Atlantic$1,183,206 $1,140,910 
Homebuilding North East230,813 202,591 
Homebuilding Mid East432,723 377,448 
Homebuilding South East581,646 494,295 
Mortgage Banking350,317 555,278 
Total segment assets2,778,705 2,770,522 
Reconciling items:
Cash and cash equivalents2,681,110 2,714,720 
Deferred taxes136,446 132,980 
Intangible assets and goodwill49,562 49,678 
Operating lease right-of-use assets60,605 53,110 
Finance lease right-of-use assets14,706 15,772 
Contract land deposit reserve(34,704)(52,205)
Consolidation adjustments and other102,464 92,564 
Reconciling items sub-total3,010,189 3,006,619 
Consolidated assets$5,788,894 $5,777,141