Segment Information

The Company operates one principal homebuilding business. In accordance with FASB ASC Topic 280, Segment Reporting ("ASC 280"), the Company has determined that each of its operating divisions is an operating segment. The Company’s President and Chief Executive Officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker directs the allocation of resources to operating segments based on the profitability and cash flows of each respective segment.

The Company’s homebuilding operations design, construct and sell a wide range of homes designed to meet the specific needs in each of its markets. As such, in accordance with the aggregation criteria defined by FASB ASC Topic 280, Segment Reporting (“ASC 280”), the Company’s homebuilding operating segments have been grouped into six reportable segments:

California, consisting of operating divisions in i) Southern California, consisting of operations in Orange, Los Angeles, Riverside and San Bernardino counties; and ii) Northern California, consisting of operations in Alameda, Contra Costa, San Joaquin, and Santa Clara counties.

Arizona, consisting of operations in the Phoenix, Arizona metropolitan area.

Nevada, consisting of operations in the Las Vegas, Nevada metropolitan area.

Colorado, consisting of operations in the Denver, Colorado metropolitan area.

Washington, consisting of operations in the Seattle, Washington metropolitan area.

Oregon, consisting of operations in the Portland, Oregon metropolitan area.

Corporate develops and implements strategic initiatives and supports the Company’s operating segments by centralizing key administrative functions such as finance and treasury, information technology, risk management and litigation and human resources.

Segment financial information relating to the Company’s operations was as follows (in thousands):



	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016			Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
Operating revenue:
California (1)	$	230,960		$	111,520		$	462,277		$	309,199
Arizona	39,607			28,758			118,695			85,399
Nevada	42,966			49,600			103,448			128,996
Colorado	24,811			35,316			77,149			85,885
Washington	71,788			42,247			185,523			112,512
Oregon	80,207			75,273			224,793			210,801
Total operating revenue	$	490,339		$	342,714		$	1,171,885		$	932,792

(1) Operating revenue in the California segment includes construction services revenue.

	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016			Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
Income before provision for income taxes:
California	$	31,150		$	10,364		$	53,907		$	28,252
Arizona	3,388			2,542			11,102			7,537
Nevada	4,372			5,291			7,811			12,587
Colorado	969			2,342			2,519			3,643
Washington	6,164			2,899			10,249			6,767
Oregon	10,708			9,466			25,847			27,452
Corporate	(12,786		)	(8,095		)	(31,112		)	(23,838		)
Income before extinguishment of debt	$	43,965		$	24,809		$	80,323		$	62,400
Corporate - Loss on extinguishment of debt	$	—		$	—		$	(21,828	)	$	—
Income before provision for income taxes	$	43,965		$	24,809		$	58,495		$	62,400



	September 30, 2017		December 31, 2016
Homebuilding assets:			(as adjusted, refer to Note 1)
California	$	704,313	$	716,955
Arizona	182,588		191,581
Nevada	218,060		189,248
Colorado	154,422		124,580
Washington	324,358		343,973
Oregon	302,332		238,766
Corporate (1)	214,786		206,177
Total homebuilding assets	$	2,100,859	$	2,011,280


(1)	Comprised primarily of cash and cash equivalents, deferred income taxes, receivables, lease right-of-use assets, and other assets.