5.	Segment information

The Company's Homebuilding operating segments are engaged in the acquisition and development of land primarily for residential purposes within the continental United States and the construction of housing on such land targeted for first-time, first and second move-up, and active adult home buyers. The Company has determined that its Homebuilding operating segments are its Areas, each of which represents a reportable segment. As part of its ongoing efforts to structure the Company for profitability in the face of challenging market conditions, the Company realigned its organizational structure during the second quarter of 2011, which reduced the number of Areas from four to three. The operating data by segment provided in this note have been reclassified to conform to the current presentation. Accordingly, the Company's reportable Homebuilding segments are as follows:


East:		Connecticut, Delaware, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia

Gulf Coast:		Florida, Texas

West:		Arizona, California, Colorado, Hawaii, Illinois, Indiana, Michigan, Minnesota, Missouri, Nevada, New Mexico, Ohio, Oregon, Washington

The Company also has one reportable segment for its financial services operations, which consist principally of mortgage banking and title operations. The Company's Financial Services segment operates generally in the same markets as the Company's Homebuilding segments.

Evaluation of segment performance is based on operating earnings from continuing operations before provision for income taxes which, for the Homebuilding segments, is defined as home sale revenues and land sale revenues less home sale cost of revenues, land cost of revenues, and certain selling, general, and administrative and other expenses, plus equity income from unconsolidated entities, which are incurred by or allocated to the Homebuilding segments. Operating earnings for the Financial Services segment is defined as revenues less costs associated with the Company's mortgage and title operations and certain selling, general, and administrative expenses incurred by or allocated to the Financial Services segment. Each reportable segment generally follows the same accounting policies described in Note 1 – "Summary of Significant Accounting Policies" to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.


	Operating Data by Segment ($000's omitted)
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Revenues:
East	$	303,390		$	425,184		$	572,256		$	786,403
Gulf Coast		287,658			349,400			535,588			604,207
West		313,783			495,151			580,754			868,917

		904,831			1,269,735			1,688,598			2,259,527
Financial Services		22,381			36,163			43,816			66,729

Consolidated revenues	$	927,212		$	1,305,898		$	1,732,414		$	2,326,256


Income (loss) before income taxes:
East	$	10,795		$	26,695		$	14,451		$	41,284
Gulf Coast		13,265			17,137			17,242			13,739
West		(11,721	)		16,110			(21,944	)		26,222
Other homebuilding (a)		(40,185	)		(48,143	)		(78,389	)		(81,282	)

		(27,846	)		11,799			(68,640	)		(37	)
Financial Services (b)		(16,643	)		(8,585	)		(15,670	)		(3,113	)
Other non-operating (c)		(8,844	)		(8,940	)		(14,415	)		(17,084	)

Consolidated income (loss) before income taxes	$	(53,333	)	$	(5,726	)	$	(98,725	)	$	(20,234	)

(a)

Other homebuilding primarily includes the amortization of intangible assets, goodwill impairment, and amortization of capitalized interest.

(b)

Financial Services income before income taxes includes interest expense of $0.6 million and $1.1 million for the three and six months ended June 30, 2010, respectively. Interest income included in Financial Services income before income taxes totaled $1.1 million and $2.1 million for the three and six months ended June 30, 2011, respectively, and $1.5 million and $2.9 million for the three and six months ended June 30, 2010, respectively.

(c)

Other non-operating includes the costs of certain shared services that benefit all operating segments, a portion of which are not allocated to the operating segments reported above.


	Valuation Adjustments and Write-Offs by Segment ($000's omitted)
	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Land and community valuation adjustments:
East	$	228		$	477		$	269		$	477
Gulf Coast		—			5,276			—			8,027
West		1,818			14,601			1,818			15,368
Other homebuilding (a)		1,254			5,192			1,316			6,211

	$	3,300		$	25,546		$	3,403		$	30,083


Net realizable value adjustments - land held for sale:
East	$	—		$	—		$	—		$	—
Gulf Coast		—			(184	)		—			321
West		(249	)		—			(249	)		59

	$	(249	)	$	(184	)	$	(249	)	$	380


Write-off of deposits and pre-acquisition costs:
East	$	1,723		$	178		$	2,191		$	215
Gulf Coast		166			21			179			495
West		1,820			2,110			1,962			2,142

	$	3,709		$	2,309		$	4,332		$	2,852


Impairments of investments in unconsolidated joint ventures:
East	$	—		$	—		$	—		$	—
Gulf Coast		—			—			—			—
West		—			—			—			1,908

	$	—		$	—		$	—		$	1,908


Total valuation adjustments and write-offs	$	6,760		$	27,671		$	7,486		$	35,223

(a)

Primarily write-offs of capitalized interest related to land and community valuation adjustments.

Total assets and inventory by reportable segment were as follows ($000's omitted):


	June 30, 2011
	Homes Under Construction		Land Under Development		Land Held for Future Development		Total Inventory		Total Assets
East	$	497,924	$	807,842	$	266,111	$	1,571,877	$	1,742,215
Gulf Coast		323,230		585,398		223,309		1,131,937		1,273,869
West		555,257		981,736		303,867		1,840,860		2,029,609
Other homebuilding (a)		55,339		226,029		79,081		360,449		771,230

		1,431,750		2,601,005		872,368		4,905,123		5,816,923
Financial Services		—		—		—		—		182,655
Other non-operating (b)		—		—		—		—		1,426,027

	$	1,431,750	$	2,601,005	$	872,368	$	4,905,123	$	7,425,605


	December 31, 2010
	Homes Under Construction		Land Under Development		Land Held for Future Development		Total Inventory		Total Assets
East	$	455,637	$	792,586	$	262,653	$	1,510,876	$	1,712,250
Gulf Coast		313,734		564,396		239,950		1,118,080		1,303,749
West		518,427		979,710		329,108		1,827,245		1,983,436
Other homebuilding (a)		43,820		205,137		76,655		325,612		743,016

		1,331,618		2,541,829		908,366		4,781,813		5,742,451
Financial Services		—		—		—		—		222,989
Other non-operating (b)		—		—		—		—		1,733,936

	$	1,331,618	$	2,541,829	$	908,366	$	4,781,813	$	7,699,376

(a)

Other homebuilding primarily includes operations in Puerto Rico, certain wind down operations, capitalized interest, goodwill, and intangibles.

(b)

Other non-operating primarily includes cash and equivalents, income taxes receivable, and other corporate items that are not allocated to the operating segments.