SEGMENT INFORMATION

Prior to the third quarter of 2018, the Company’s operations were organized into two reportable segments: builder operations and land development. Builder operations consisted of three operating segments: Texas, Georgia and Florida. The operations of the Company’s controlled builders were aggregated into these three operating segments based on similar economic characteristics, including geography; housing products; class of homebuyer; regulatory environments; and methods used to construct and sell homes.

During the third quarter of 2018, the Company re-evaluated its reportable segments under ASC 280. The Company has further aggregated the Georgia and Florida operating segments into one reportable segment - Builder operations Southeast. The Texas operating segment was redefined as a second reportable segment - Builder operations Central. Land development is a separate reportable segment.

The Company believes such aggregation is consistent with the objective and basic principles of ASC 280 and provides the most meaningful information about the types of business activities in which the Company engages and the economic environments in which it operates.

Corporate operations are reported as a non-operating segment and include activities which support the Company’s builder operations, land development, title and mortgage operations through centralization of certain administrative functions, such as finance, treasury, information technology and human resources, as well as development of strategic initiatives. Unallocated corporate expenses are reported in the corporate and other segment as these activities do not share a majority of aggregation criteria with either the builder operations or land development segments.

While the operations of Challenger Homes meet the criteria for an operating segment, they do not meet the quantitative thresholds of ASC 280 to be separately reported and disclosed. As such, Challenger Homes’ results are included within the corporate and other segment.

Green Brick Title, LLC (“Green Brick Title”), Providence Title and Green Brick Mortgage operations are not economically similar to either builder operations or land development and do not meet the quantitative thresholds of ASC 280 to be separately reported and disclosed. As such, these entities’ results are included within the corporate and other segment.

Segment information for the three and nine months ended September 30, 2017 has been restated to conform with the revised segment presentation for the three and nine months ended September 30, 2018.

Financial information relating to the Company’s reportable segments is as follows. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Revenues: ⁽¹⁾
Builder operations
Central	$	59,652		$	52,597		$	198,093		$	149,977
Southeast	77,977			55,840			208,120			152,202
Total builder operations	137,629			108,437			406,213			302,179
Land development	12,363			5,269			27,054			15,815
Total revenues	$	149,992		$	113,706		$	433,267		$	317,994

Gross profit:
Builder operations
Central	$	12,847		$	12,473		$	45,296		$	36,846
Southeast	19,058			13,399			49,727			34,521
Total builder operations	31,905			25,872			95,023			71,367
Land development	2,142			1,749			6,591			4,864
Corporate and other ⁽²⁾	(3,389		)	(2,211		)	(9,208		)	(6,609		)
Total gross profit	$	30,658		$	25,410		$	92,406		$	69,622

Income (loss) before taxes:
Builder operations
Central	$	6,984		$	8,171		$	28,026		$	24,424
Southeast	12,649			9,861			33,978			24,176
Total builder operations	19,633			18,032			62,004			48,600
Land development	1,292			1,516			4,975			3,894
Corporate and other ⁽³⁾	(818		)	(2,255		)	(6,031		)	(9,274		)
Total income before taxes	$	20,107		$	17,293		$	60,948		$	43,220

	September 30, 2018			December 31, 2017
Inventory:
Builder operations
Central	$	155,154		$	111,271
Southeast	158,489			99,613
Total builder operations	313,643			210,884
Land development	317,669			272,542
Corporate and other ⁽⁴⁾	16,929			12,628
Total inventory	$	648,241		$	496,054

Goodwill:
Builder operations
Southeast ⁽⁵⁾	$	680		$	—

(1)

The sum of Builder operations Central and Southeast segments’ revenues does not equal revenue from the sale of residential units included in the consolidated statements of income in periods when our controlled builders have sales of land or lots, which for the three and nine months ended September 30, 2018 were $0.2 million and $4.6 million, respectively, compared to $0.0 million for the three and nine months ended September 30, 2017. Revenue from such sales is included in builder operations revenue as it relates to builders’ operations, and included in revenue from sale of land and lots in the condensed consolidated statements of income.


(2)	Corporate and other gross profit is comprised of capitalized overhead and capitalized interest adjustments that are not allocated to builder operations and land development segments.


(3)	Corporate and other income (loss) before taxes includes results from Green Brick Title, Challenger Homes, Green Brick Mortgage, and Providence Title.


(4)	Corporate and other inventory consists of capitalized overhead and interest related to work in process and land under development.


(5)	In connection with the GRBK GHO Homes business combination, the Company recorded goodwill of $0.7 million.