Note 10 - Operating and Reporting Segments

12 Months Ended

Oct. 31, 2025

Operating and Reporting Segments

Operating and Reporting Segments

10. Operating and Reporting Segments

HEI’s operating segments are components of the Company’s business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance, make resource allocations and guide strategic decisions. The Chief Executive Officer uses income (loss) before income taxes as the key operating metric used to measure segment profit or loss. Actual income (loss) before income taxes is reviewed monthly against budgeted amounts from the semi-annual financial plans.

We currently have homebuilding operations in 13 states that are aggregated into reportable segments based primarily upon geographic proximity.

HEI’s reportable segments consist of the following three homebuilding segments and a financial services segment.

Homebuilding:

(1)	Northeast (Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia)
(2)	Southeast (Florida, Georgia and South Carolina)
(3)	West (Arizona, California and Texas)

Operations of the homebuilding segments primarily include the sale and construction of single-family attached and detached homes, attached townhomes and condominiums, urban infill and active lifestyle homes in planned residential developments. In addition, from time to time, operations of the homebuilding segments include sales of land. Operations of the financial services segment include mortgage banking and title services provided to the homebuilding operations’ customers. Our financial services subsidiaries do not typically retain or service mortgages that we originate but sell the mortgages and related servicing rights to investors.

Financial information relating to our reportable segments are as follows:

	Year Ended October 31, 2025
(In thousands)		Northeast			Southeast			West		Financial Services		Total
Homebuilding revenues	$	1,146,746		$	349,448		$	1,356,714	$	-	$	2,852,908
Financial services revenues		-			-			-		94,975		94,975
All other revenues (1)		4,895			532			20,359		-		25,786
Total		1,151,641			349,980			1,377,073		94,975		2,973,669
Cost of sales (2)		945,566			308,978			1,243,226		-		2,497,770
Selling, general and administrative		63,117			33,970			97,685		-		194,772
Financial services expenses		-			-			-		56,001		56,001
Other segment items (3)		(22,572	)		(8,427	)		21,047		-		(9,952	)
Total segment profit	$	165,530		$	15,459		$	15,115	$	38,974	$	235,078
Corporate and unallocated (4)												148,991
Income before income taxes											$	86,087

	Year Ended October 31, 2024
(In thousands)		Northeast			Southeast			West		Financial Services		Total
Homebuilding revenues	$	1,007,595		$	447,804		$	1,420,088	$	-	$	2,875,487
Financial services revenues		-			-			-		74,064		74,064
All other revenues (1)		28,453			1,098			17,806		-		47,357
Total		1,036,048			448,902			1,437,894		74,064		2,996,908
Cost of sales (2)		799,549			351,152			1,214,675		-		2,365,376
Selling, general and administrative		62,665			34,607			85,317		-		182,589
Financial services expenses		-			-			-		49,940		49,940
Other segment items (3)		(17,219	)		(14,532	)		11,189		-		(20,562	)
Total segment profit	$	191,053		$	77,675		$	126,713	$	24,124	$	419,565
Corporate and unallocated (4)												102,476
Income before income taxes											$	317,089

	Year Ended October 31, 2023
(In thousands)		Northeast			Southeast			West		Financial Services		Total
Homebuilding revenues	$	933,156		$	419,656		$	1,277,645	$	-	$	2,630,457
Financial services revenues		-			-			-		60,088		60,088
All other revenues (1)		35,697			639			18,347		-		54,683
Total		968,853			420,295			1,295,992		60,088		2,745,228
Cost of sales (2)		740,829			323,228			1,071,256		-		2,135,313
Selling, general and administrative		63,793			29,562			84,367		-		177,722
Financial services expenses		-			-			-		40,724		40,724
Other segment items (3)		(16,033	)		(10,893	)		21,087		-		(5,839	)
Total Segment Profit	$	180,264		$	78,398		$	119,282	$	19,364	$	397,308
Corporate and unallocated (4)												141,357
Income before income taxes											$	255,951

(1)	Consists primarily of land sales revenue, interest income, and income from forfeited customer deposits due to contract cancellations.
(2)	Consists primarily of homebuilding and land sale costs, amortization of capitalized interest, inventory impairments and land option write-offs.
(3)	Consists primarily of other interest expensed, and income (loss)  from unconsolidated joint ventures.
(4)	Consists primarily of corporate costs and shared services functions that are not allocated to the homebuilding or financial services reportable segments.

	October 31,
(In thousands)	2025		2024
Assets:
Northeast	$	672,021	$	664,064
Southeast		358,383		296,058
West		829,683		889,704
Financial services		151,211		203,589
Total	$	2,011,298	$	2,053,415

	October 31,
(In thousands)	2025		2024
Investments in and advances to unconsolidated joint ventures:
Northeast	$	97,024	$	79,659
Southeast		29,765		55,344
West		34,065		6,348
Total	$	160,854	$	141,351