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Segment Disclosures
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Segment Disclosures Segment Disclosures
Our homebuilding operations are aggregated geographically into four homebuilding reportable segments and our mortgage banking operations are 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 (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 June 30,Six Months Ended June 30,
 2022202120222021
Revenues:
Homebuilding Mid Atlantic$1,208,312 $1,048,416 $2,350,020 $1,984,556 
Homebuilding North East237,394 193,245 412,945 355,438 
Homebuilding Mid East521,038 478,179 982,442 903,132 
Homebuilding South East643,318 504,720 1,173,882 945,145 
Mortgage Banking48,881 59,038 118,063 136,773 
Total consolidated revenues$2,658,943 $2,283,598 $5,037,352 $4,325,044 

Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Income before taxes:
Homebuilding Mid Atlantic$251,739 $174,481 $501,520 $303,548 
Homebuilding North East41,297 21,510 67,225 36,737 
Homebuilding Mid East82,512 59,887 153,695 108,828 
Homebuilding South East150,822 78,919 264,276 135,584 
Mortgage Banking28,800 40,372 78,906 99,934 
Total segment profit before taxes555,170 375,169 1,065,622 684,631 
Reconciling items:
Contract land deposit recoveries (1)419 7,178 6,345 13,374 
Equity-based compensation expense (2)(20,087)(13,379)(31,755)(27,850)
Corporate capital allocation (3)77,512 63,032 147,256 124,583 
Unallocated corporate overhead(32,282)(33,668)(77,543)(73,804)
Consolidation adjustments and other (4)5,096 31,944 54,603 34,330 
Corporate interest expense(11,816)(12,811)(24,571)(25,793)
Reconciling items sub-total18,842 42,296 74,335 44,840 
Consolidated income before taxes$574,012 $417,465 $1,139,957 $729,471 
(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 increase in equity-based compensation expense for the three and six months ended June 30, 2022 was primarily attributable to a four year block grant of Options and RSUs in May 2022. See additional discussion of equity-based compensation in Note 7.
(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,
 2022202120222021
Corporate capital allocation charge:
Homebuilding Mid Atlantic$37,121 $31,135 $71,208 $61,731 
Homebuilding North East8,158 6,457 15,245 12,495 
Homebuilding Mid East12,875 11,066 24,292 21,690 
Homebuilding South East19,358 14,374 36,511 28,667 
Total$77,512 $63,032 $147,256 $124,583 

(4)The change in consolidation adjustments and other for the three and six month periods of 2022 compared to the respective 2021 periods was primarily driven by changes in lumber prices in the respective periods. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. The decrease in the three month period ended June 30, 2022 compared to the same period in 2021 was primarily due to lower lumber prices quarter over quarter. The increase for the six month period ended June 30, 2022 compared to the same period in 2021 was primarily attributable to the overall higher lumber costs year over year driven by higher lumber costs in the first quarter of 2022 compared to the first quarter of 2021.

 June 30, 2022December 31, 2021
Assets:
Homebuilding Mid Atlantic$1,408,484 $1,322,818 
Homebuilding North East286,776 235,048 
Homebuilding Mid East538,877 438,700 
Homebuilding South East780,118 629,198 
Mortgage Banking402,775 371,685 
Total segment assets3,417,030 2,997,449 
Reconciling items:
Cash and cash equivalents1,483,445 2,545,069 
Deferred taxes139,263 132,894 
Intangible assets and goodwill49,368 49,368 
Operating lease right-of-use assets68,323 59,010 
Finance lease right-of-use assets14,364 14,578 
Contract land deposit reserve(23,516)(30,041)
Consolidation adjustments and other139,422 66,148 
Reconciling items sub-total1,870,669 2,837,026 
Consolidated assets$5,287,699 $5,834,475