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Business Segments
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
NOTE 15. Business Segments
The application of segment reporting requires significant judgment in determining our operating segments. Operating segments are defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Company’s chief operating decision makers to evaluate performance, make operating decisions and determine how to allocate resources. The Company’s chief operating decision makers consist of the Chief Executive Officer and Chief Financial Officer. The Company’s chief operating decision makers evaluate the Company’s operating income performance in various ways, including: (1) the results of our individual homebuilding operating segments and the results of our financial services operations; (2) the results of our homebuilding reportable segments; and (3) our consolidated financial results.
The chief operating decision makers use operating income for each segment predominately in the annual budget and forecasting process. The chief operating decision makers consider budget-to-actual variances for profit measures on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The chief operating decisions maker also use segment operating income to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.
In accordance with ASC 280, Segment Reporting (“ASC 280”), we have identified each homebuilding division as an operating segment because each homebuilding division engages in business activities from which it earns revenue, primarily from the sale and construction of single-family attached and detached homes, acquisition and development of land, and the occasional sale of lots to third parties. Our financial services operations generate revenue primarily from the origination, sale and servicing of mortgage loans and title services primarily for purchasers of the Company’s homes and are included in our financial services reportable segment. Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating segments by centralizing key administrative functions such as accounting, finance, treasury, information technology, insurance and risk management, legal, marketing and human resources.
In accordance with the aggregation criteria defined in ASC 280, we have determined our reportable segments as follows: Northern homebuilding, Southern homebuilding, and financial services operations. The homebuilding operating segments included in each reportable segment have been aggregated because they share similar aggregation characteristics as prescribed in ASC 280 in the following regards: (1) long-term economic characteristics; (2) historical and expected future long-term gross margin percentages; (3) housing products, production processes and methods of distribution; and (4) geographical proximity. We may, however, be required to reclassify our reportable segments if markets that currently are being aggregated do not continue to share these aggregation characteristics.
The homebuilding operating segments that comprise each of our reportable segments are as follows:
NorthernSouthern
Chicago, IllinoisOrlando, Florida
Cincinnati, OhioSarasota, Florida
Columbus, OhioTampa, Florida
Indianapolis, IndianaFort Myers/Naples, Florida
Minneapolis/St. Paul, MinnesotaAustin, Texas
Detroit, MichiganDallas/Fort Worth, Texas
Houston, Texas
San Antonio, Texas
Charlotte, North Carolina
Raleigh, North Carolina
Nashville, Tennessee
The following table shows, by segment, revenue, operating income and interest (income) expense for 2024, 2023 and 2022, as well as the Company’s income before income taxes for such periods:
Year Ended December 31,
(In thousands)202420232022
Revenue:
Northern homebuilding$1,900,013 $1,523,943 $1,714,236 
Southern homebuilding2,488,451 2,415,730 2,330,962 
Financial services (a)
116,206 93,829 86,195 
Total revenue$4,504,670 $4,033,502 $4,131,393 
Cost of Sales:
Northern homebuilding$1,480,326 $1,228,949 $1,379,936 
Southern homebuilding1,825,455 1,785,6241,707,615
Financial services (a)
— — — 
Total cost of sales$3,305,781 $3,014,573 $3,087,551 
General and administrative expense:
Northern homebuilding$42,908 $36,827 $36,659 
Southern homebuilding
76,200 65,078 61,775 
Financial services (a)
52,826 45,115 41,813 
Segment general and administrative expense
$171,934 $147,020 $140,247 
Corporate and unallocated general and administrative expense
86,488 75,745 74,564 
Total general and administrative expense$258,422 $222,765 $214,811 
Selling expense:
Northern homebuilding$95,680 $81,847 $80,142 
Southern homebuilding
136,198 124,860 109,698 
Financial services (a)
— — — 
Segment selling expense
$231,878 $206,707 $189,840 
Corporate and unallocated selling expense
2,495 2,235 1,740 
Total selling expense:$234,373 $208,942 $191,580 
Operating income (loss):
Northern homebuilding $281,099 $176,320 $217,499 
Southern homebuilding
450,598 440,168 451,874 
Financial services (a)
63,380 48,714 44,382 
Segment operating income
$795,077 $665,202 $713,755 
Corporate selling, general and administrative expense
(88,983)(77,980)(76,304)
Total operating income (a)
$706,094 $587,222 $637,451 
Interest (income) expense - net:
Northern homebuilding$(228)$(186)$(469)
Southern homebuilding(2,554)(1,703)(1,447)
Financial services (a)
13,698 10,360 5,122 
Segment Interest (income) expense - net
$10,916 $8,471 $3,206 
Corporate Interest (income) expense - net
(38,430)(28,493)(956)
Total interest (income) expense - net
$(27,514)$(20,022)$2,250 
Other income (b)
$— $(33)$(6)
Income before income taxes$733,608 $607,277 $635,207 
(a)Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuying customers, with the exception of an immaterial amount of mortgage refinancing.
(b)Other income is comprised of the equity in (income) loss from joint venture arrangements.
The following table shows, by segment, depreciation and amortization expense for the years ended December 31, 2024, 2023 and 2022:
Year Ended December 31,
(In thousands)
202420232022
Depreciation and amortization:
Northern homebuilding$3,787 $3,673 $3,308 
Southern homebuilding3,636 2,965 2,790 
Financial services1,130 810 2,178 
Segment depreciation and amortization
$8,553 $7,448 $8,276 
Corporate8,833 8,343 8,898 
Total depreciation and amortization$17,386 $15,791 $17,174 


The following tables show total assets by segment at December 31, 2024 and 2023:
December 31, 2024
(In thousands)NorthernSouthern
Financial Services
Segment TotalCorporate and unallocatedTotal
Deposits on real estate under option or contract$12,209 $57,274 $— $69,483 $— $69,483 
Inventory (a)
1,041,713 1,980,666 — 3,022,379 — 3,022,379 
Investments in joint venture arrangements— 65,334 — 65,334 — 65,334 
Other assets37,721 132,316 
(b)
370,558 540,595 

852,005 1,392,600 
Total assets$1,091,643 $2,235,590 $370,558 $3,697,791 $852,005 $4,549,796 

December 31, 2023
(In thousands)NorthernSouthern
Financial Services
Segment TotalCorporate and unallocatedTotal
Deposits on real estate under option or contract$8,990 $42,618 $— $51,608 $— $51,608 
Inventory (a)
1,016,982 1,728,561 — 2,745,543 — 2,745,543 
Investments in joint venture arrangements— 44,011 — 44,011 — 44,011 
Other assets37,171 104,306 
(b)
243,176 384,653 796,625 1,181,278 
Total assets$1,063,143 $1,919,496 $243,176 $3,225,815 $796,625 $4,022,440 
(a)Inventory includes single-family lots, land and land development costs; land held for sale; homes under construction; model homes and furnishings; community development district infrastructure; and consolidated inventory not owned.
(b)Includes development reimbursements from local municipalities.