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Segment Disclosures (Tables) | 9 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
Revenues | The f ollowing tables present segment revenues, profit and assets with reconciliations to the amounts reported for the consolidated enterprise, where applicable:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Revenues: |  |  |  |  |  |  |  |
Homebuilding Mid Atlantic |  | $ | 949,472 |  |  | $ | 1,012,056 |  |  | $ | 2,563,375 |  |  | $ | 2,875,411 |
Homebuilding North East |  | 157,973 |  |  | 120,478 |  |  | 362,328 |  |  | 364,909 |
Homebuilding Mid East |  | 404,992 |  |  | 406,145 |  |  | 1,025,642 |  |  | 1,104,603 |
Homebuilding South East |  | 408,314 |  |  | 334,652 |  |  | 1,113,871 |  |  | 929,062 |
Mortgage Banking |  | 69,261 |  |  | 37,933 |  |  | 127,692 |  |  | 124,484 |
Total consolidated revenues |  | $ | 1,990,012 |  |  | $ | 1,911,264 |  |  | $ | 5,192,908 |  |  | $ | 5,398,469 |
Profit before Taxes |
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Income before taxes: |  |  |  |  |  |  |  |
Homebuilding Mid Atlantic |  | $ | 104,700 |  |  | $ | 124,900 |  |  | $ | 284,440 |  |  | $ | 348,067 |
Homebuilding North East |  | 14,272 |  |  | 13,164 |  |  | 31,081 |  |  | 36,187 |
Homebuilding Mid East |  | 45,109 |  |  | 50,210 |  |  | 103,575 |  |  | 125,976 |
Homebuilding South East |  | 52,554 |  |  | 39,721 |  |  | 142,463 |  |  | 105,582 |
Mortgage Banking |  | 52,890 |  |  | 22,835 |  |  | 80,461 |  |  | 78,566 |
Total segment profit before taxes |  | 269,525 |  |  | 250,830 |  |  | 642,020 |  |  | 694,378 |
Reconciling items: |  |  |  |  |  |  |  |
Contract land deposit reserve adjustment (1) |  | 4,867 |  |  | 248 |  |  | (31,208) |  |  | 1,572 |
Equity-based compensation expense (2) |  | (13,639) |  |  | (20,770) |  |  | (35,565) |  |  | (58,680) |
Corporate capital allocation (3) |  | 60,662 |  |  | 57,887 |  |  | 177,184 |  |  | 168,621 |
Unallocated corporate overhead |  | (26,915) |  |  | (27,914) |  |  | (87,912) |  |  | (89,003) |
Consolidation adjustments and other (4) |  | 38,244 |  |  | 12,859 |  |  | 54,769 |  |  | 31,569 |
Corporate interest expense |  | (11,287) |  |  | (5,966) |  |  | (26,625) |  |  | (17,964) |
Reconciling items sub-total |  | 51,932 |  |  | 16,344 |  |  | 50,643 |  |  | 36,115 |
Consolidated income before taxes |  | $ | 321,457 |  |  | $ | 267,174 |  |  | $ | 692,663 |  |  | $ | 730,493 |
(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2. (2)The decrease in equity-based compensation expense for the three and nine month periods ended September 30, 2020 was primarily attributable to stock options issued in 2014 under the 2014 Equity Incentive Plan becoming fully vested in 2019. In addition, stock compensation expense for both the three and nine month periods ended September 30, 2020 was favorably impacted by higher stock option forfeitures during 2020. (3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Corporate capital allocation charge: |  |  |  |  |  |  |  |
Homebuilding Mid Atlantic |  | $ | 31,383 |  |  | $ | 31,504 |  |  | $ | 92,720 |  |  | $ | 93,297 |
Homebuilding North East |  | 5,793 |  |  | 5,028 |  |  | 17,142 |  |  | 14,381 |
Homebuilding Mid East |  | 10,386 |  |  | 9,791 |  |  | 29,436 |  |  | 28,303 |
Homebuilding South East |  | 13,100 |  |  | 11,564 |  |  | 37,886 |  |  | 32,640 |
Total |  | $ | 60,662 |  |  | $ | 57,887 |  |  | $ | 177,184 |  |  | $ | 168,621 |
(4) The increase in our consolidation adjustments and other reconciling item for both the three and nine month periods ended September 30, 2020 relates primarily to the significant increase in lumber prices during the third quarter of 2020. Our reportable segments' results include intercompany profits of our production facilities, which were negatively impacted by the increase in lumber costs. The increase in lumber costs related to homes not yet settled is eliminated through the consolidation adjustment. As these homes currently in inventory are settled in subsequent quarters, our consolidated homebuilding margins will be negatively impacted by the higher lumber costs.
Assets |
|  | September 30, 2020 |  | December 31, 2019
Assets: |  |  |  |
Homebuilding Mid Atlantic |  | $ | 1,198,050 |  |  | $ | 1,024,996 |
Homebuilding North East |  | 199,162 |  |  | 166,860 |
Homebuilding Mid East |  | 395,668 |  |  | 293,773 |
Homebuilding South East |  | 474,484 |  |  | 400,979 |
Mortgage Banking |  | 403,878 |  |  | 560,407 |
Total segment assets |  | 2,671,242 |  |  | 2,447,015 |
Reconciling items: |  |  |  |
Cash and cash equivalents |  | 2,539,460 |  |  | 1,110,892 |
Deferred taxes |  | 125,743 |  |  | 115,731 |
Intangible assets and goodwill |  | 49,717 |  |  | 49,834 |
Homebuilding operating lease right-of-use assets |  | 54,964 |  |  | 63,825 |
Finance lease right-of-use assets |  | 15,674 |  |  | 7,052 |
Contract land deposit reserve |  | (58,781) |  |  | (27,572) |
Consolidation adjustments and other |  | 101,901 |  |  | 43,038 |
Reconciling items sub-total |  | 2,828,678 |  |  | 1,362,800 |
Consolidated assets |  | $ | 5,499,920 |  |  | $ | 3,809,815 |

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