Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

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 certain plant equipment and one of our production facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $13,875 and $15,030, respectively, as of September 30, 2022, and $14,578 and $15,413, respectively, as of December 31, 2021. Our leases have remaining lease terms of up to 18 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate 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,				Nine Months Ended September 30,
	2022		2021		2022		2021
Lease expense
Operating lease expense	$	9,422	$	7,906	$	26,051	$	23,395
Finance lease expense:
Amortization of ROU assets	489		454		1,426		1,342
Interest on lease liabilities	106		107		313		324
Short-term lease expense	7,395		6,001		20,219		17,752
Total lease expense	$	17,412	$	14,468	$	48,009	$	42,813

Other information related to leases was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,197	$	7,143	$	21,301		$	20,831
Operating cash flows from finance leases	106		107		313			324
Financing cash flows from finance leases	384		347		1,107			1,008
ROU assets obtained in exchange for lease obligations:
Operating leases	$	11,169	$	3,711	$	35,055		$	23,282
Finance leases	$	—	$	187	$	723		$	276
					September 30, 2022			December 31, 2021
Weighted-average remaining lease term (in years):
Operating leases					6.1			6.3
Finance leases					11.0			11.7
Weighted-average discount rate:
Operating leases					3.4		%	3.0		%
Finance leases					2.9		%	2.8		%

Leases

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 certain plant equipment and one of our production facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $13,875 and $15,030, respectively, as of September 30, 2022, and $14,578 and $15,413, respectively, as of December 31, 2021. Our leases have remaining lease terms of up to 18 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate 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,				Nine Months Ended September 30,
	2022		2021		2022		2021
Lease expense
Operating lease expense	$	9,422	$	7,906	$	26,051	$	23,395
Finance lease expense:
Amortization of ROU assets	489		454		1,426		1,342
Interest on lease liabilities	106		107		313		324
Short-term lease expense	7,395		6,001		20,219		17,752
Total lease expense	$	17,412	$	14,468	$	48,009	$	42,813

Other information related to leases was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022			2021
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,197	$	7,143	$	21,301		$	20,831
Operating cash flows from finance leases	106		107		313			324
Financing cash flows from finance leases	384		347		1,107			1,008
ROU assets obtained in exchange for lease obligations:
Operating leases	$	11,169	$	3,711	$	35,055		$	23,282
Finance leases	$	—	$	187	$	723		$	276
					September 30, 2022			December 31, 2021
Weighted-average remaining lease term (in years):
Operating leases					6.1			6.3
Finance leases					11.0			11.7
Weighted-average discount rate:
Operating leases					3.4		%	3.0		%
Finance leases					2.9		%	2.8		%