Note 3 - Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

3.            Segment Reporting

Our operating segments are defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the chief operating decision-maker, or decision-making group, to evaluate performance and make operating decisions. We have identified our chief operating decision-maker as two key executives— our Chief Executive Officer and Chief Operating Officer.

We have identified each homebuilding division as an operating segment. Our operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments are as follows:

● West (Arizona, California, Nevada and Washington)

● Mountain (Colorado and Utah)

● East (Virginia, Florida and Maryland, which includes Pennsylvania, Delaware and New Jersey)

Our financial services business consists of the operations of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income we consider HomeAmerican to be a reportable segment (“Mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“Other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (A) the combined reported profit of all operating segments that did not report a loss or (B) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets.

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance and treasury, information technology, insurance and risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding segment.

The table set forth below summarizes home sale revenues for our homebuilding operations and revenues for our financial services operations.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
	(Dollars in thousands)
Homebuilding
West	$	184,627	$	188,456	$	510,710	$	487,949
Mountain		144,442		134,992		392,052		402,137
East		78,635		110,270		254,737		277,514
Total home and land sale revenues	$	407,704	$	433,718	$	1,157,499	$	1,167,600
Financial Services
Mortgage operations	$	6,416	$	9,694	$	18,887	$	29,232
Other		4,283		4,588		12,526		11,440
Total financial services revenues	$	10,699	$	14,282	$	31,413	$	40,672

The following table summarizes pretax income for our homebuilding and financial services operations. 

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
	(Dollars in thousands)
Homebuilding
West	$	12,402		$	19,539		$	41,747		$	46,929
Mountain		11,031			12,203			30,572			39,341
East		1,138			6,657			9,095			12,708
Corporate		(6,609	)		(11,736	)		(22,450	)		(27,679	)
Total homebuilding pretax income	$	17,962		$	26,663		$	58,964		$	71,299
Financial Services
Mortgage operations	$	3,327		$	5,936		$	10,387		$	18,790
Other		2,635			2,310			7,239			5,418
Total financial services pretax income	$	5,962		$	8,246		$	17,626		$	24,208
Total pretax income	$	23,924		$	34,909		$	76,590		$	95,507

The table set forth below summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment consist primarily of cash and cash equivalents, marketable securities and our deferred tax asset. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.

	September 30,		December 31,
	2014		2013
	(Dollars in thousands)
Homebuilding assets
West	$	911,952	$	760,450
Mountain		519,332		418,796
East		342,766		297,627
Corporate		708,027		951,809
Total homebuilding assets	$	2,482,077	$	2,428,682
Financial services assets
Mortgage operations	$	64,062	$	99,065
Other		42,076		67,702
Total financial services assets	$	106,138	$	166,767
Total assets	$	2,588,215	$	2,595,449