XML 70 R22.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2013
Income Taxes [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and attributable to operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted. In accordance with ASC 740-10, Income Taxes, we evaluate our deferred tax assets, including the benefit from net operating losses (“NOLs”) and tax credit carryforwards, to determine if a valuation allowance is required. Companies must assess, using significant judgments, whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with significant weight being given to evidence that can be objectively verified. This assessment gives appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, our experience with operating losses and our experience of utilizing tax credit carryforwards and tax planning alternatives. Based upon a review of all available evidence, we recorded a full valuation allowance against our deferred tax assets during 2008 due to economic conditions and the weight of negative evidence at the time. During 2013, the Company concluded that it was more likely than not that the majority of its deferred tax assets would be utilized. This conclusion was based on a detailed evaluation of all relevant evidence, both positive and negative. The Company is required to use judgment in considering the relative impact of negative and positive evidence when determining the need for a valuation allowance for its deferred tax asset. The weight given to the potential effect of negative and positive evidence shall be commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is needed. The positive evidence considered by the Company in its evaluation for each of our taxing jurisdictions was the objective evidence related to our past and current financial results, including a period of sustained profitability comprising six consecutive quarters of pre-tax net income, and the projected utilization of a majority of our current NOL carryforwards and temporary differences as they reverse in the carryforward periods, generally 20 years. Other positive evidence considered, among other things, was our expectation of continued earnings and continued indications of a sustained recovery in the housing markets in which the Company operates. This is evidenced by the significant increases experienced by the Company in several key financial indicators compared to the prior year, including new contracts, revenues, backlog sales value, new home deliveries and declining overhead leverage as a percent of revenue. We believe that economic data, such as recent and forecasted increases in housing starts, homebuilding volume and average sales prices, also affirm the recovery in the housing industry. We believe historically low mortgage rates, affordable home prices, reduced foreclosures, and a favorable home ownership to rental comparison continue to drive the recovery in the housing industry. The most significant direct negative evidence that existed at the time our reversal evaluation was that the Company was in a four-year cumulative loss position, a period which represents our estimated business cycle. However, the Company's cumulative four-year loss had declined significantly as a result of six consecutive quarters of profitability and, based on the Company's current earnings level, the Company projected realization of a majority of its deferred tax assets. Other negative evidence considered was a recent rise in mortgage interest rates and the potential impact of such rise on our business. While we believe the rise in rates caused a temporary slow down in the pace of the housing recovery and related trends, we believe the demand for housing will continue to increase new contracts, as evidenced by our year-over-year increases in new contracts during each quarter of 2013 when compared to 2012, as well as other factors. During 2013, the Company concluded based on its analysis of positive and negative evidence, that the objective positive evidence outweighed the negative evidence and that the Company will more likely than not realize a majority of its deferred tax assets. As a result of such determination, the Company reversed a majority of its deferred tax asset in 2013 from $135.7 million at December 31, 2012 to $9.3 million at December 31, 2013. The remaining valuation allowance is for certain state jurisdictions, which have a shorter NOL carryforward utilization period or a large NOL carryforward relative to their current earnings. In future periods, the remaining valuation allowance for these state jurisdictions will be evaluated to determine if sufficient positive evidence and/or various tax planning strategies indicates that it is more likely than not that an additional portion of the underlying state NOL carryforwards will be realized. At December 31, 2013, the Company's total deferred tax assets were $121.3 million, which, inclusive of our valuation allowance, results in a deferred tax asset of $112.0 million. The $112.0 million total deferred tax asset after valuation allowance is offset by $1.1 million of total deferred tax liabilities for a $110.9 million net deferred tax asset. The $110.9 million net deferred tax asset is reported on the Company's consolidated balance sheets, net of a $9.3 million valuation allowance. The tax effects of the significant temporary differences that comprise the deferred tax assets and liabilities are as follows:
| December 31,
(In thousands) | 2013 | 2012
Deferred tax assets: |  |
Warranty, insurance and other accruals | $ | 12,003 |  | $ | 11,378 |
Inventory | 16,657 |  | 22,612 |
State taxes | 106 |  | (64 | )
Net operating loss carryforward | 91,659 |  | 102,475 |
Deferred charges | 897 |  | 336 |
Total deferred tax assets | $ | 121,322 |  | $ | 136,737 |
Less valuation allowance | $ | (9,291 | ) | $ | (135,749 | )
Total deferred tax assets, net of valuation allowance | $ | 112,031 |  | $ | 988 |
Deferred tax liabilities: |  |  |
Depreciation | $ | 774 |  | $ | 804 |
Prepaid expenses | 346 |  | 184 |
Total deferred tax liabilities | $ | 1,120 |  | $ | 988 |
Net deferred tax asset, net of valuation allowance | $ | 110,911 |  | $ | — |
The provision (benefit) from income taxes consists of the following:
| Year Ended December 31,
(In thousands) | 2013 | 2012 | 2011
Current: |  |  |
Federal | $ | 2 |  | $ | 208 |  | $ | 3 |
State | 821 |  | (796 | ) | (28 | )
| $ | 823 |  | $ | (588 | ) | $ | (25 | )
| Year Ended December 31,
(In thousands) | 2013 | 2012 | 2011
Deferred: |  |  |
Federal | $ | (102,830 | ) | $ | — |  | $ | — |
State | (8,081 | ) | — |  | — |
| $ | (110,911 | ) | $ | — |  | $ | — |
Total | $ | (110,088 | ) | $ | (588 | ) | $ | (25 | )
For 2013, 2012 and 2011, the Company’s effective tax rate was (266.33)%, (4.61)%, and 0.07%, respectively. Reconciliation of the differences between income taxes computed at the federal statutory tax rate and consolidated benefit from income taxes are as follows:
| Year Ended December 31,
(In thousands) | 2013 | 2012 | 2011
Federal taxes at statutory rate | $ | 14,467 |  | $ | 4,466 |  | $ | (11,866 | )
State and local taxes – net of federal tax benefit | 534 |  | 829 |  | (19 | )
Change in unrecognized tax benefit | — |  | (1,346 | ) | (254 | )
Change in valuation allowance | (126,458 | ) | (5,076 | ) | 12,950 |
Change in state NOL deferred asset – net of federal tax benefit | 853 |  | (312 | ) | (1,280 | )
Other | 516 |  | 851 |  | 444 |
Total | $ | (110,088 | ) | $ | (588 | ) | $ | (25 | )
The Company files income tax returns in the U.S. federal jurisdiction, and various states. The Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years before 2008. The Company is audited from time to time, and if any adjustments are made, they would be either immaterial or reserved. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| Year Ended December 31,
(In thousands) | 2013 | 2012 | 2011
Balance at January 1, | $ | — |  | $ | 1,346 |  | $ | 1,601 |
Additions for tax positions of prior years | — |  | — |  | 39 |
Reductions for tax positions of prior years | — |  | (1,346 | ) | (294 | )
Balance at December 31, | $ | — |  | $ | — |  | $ | 1,346 |
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. At both December 31, 2013 and 2012, we had no unrecognized tax benefits due to the lapse of the statue of limitations and completion of audits in prior years. We believe that our current income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change. In 2011, we recognized $0.1 million in interest and penalties, and recorded an accrual of $0.7 million for the payment of interest and penalties. At December 31, 2013, the Company had federal NOL carryforwards of approximately $72.1 million and federal credit carryforwards of $4.4 million. Federal NOL carryforwards may be carried forward up to 20 years to offset future taxable income. Our federal carryforward benefits begin to expire in 2028. The Company had $15.1 million of state NOL carryforwards at December 31, 2013. State NOLs may be carried forward from 5 to 20 years, depending on the tax jurisdiction, with $8.4 million expiring between 2013 and 2027 and $6.7 million expiring between 2028 and 2032, absent sufficient state taxable income. As of December 31, 2013, we have recorded a $9.3 million valuation allowance against these state NOLs. On February 1, 2014, M/I Financial Corp. was converted from an Ohio corporation to an Ohio limited liability company and its name was changed to M/I Financial, LLC. As a result, we estimate that we will utilize more of our state tax NOLs than previously estimated, and will recognize a tax benefit of approximately $3.0 million in the first quarter of 2014. Further details relating to this change are included in Note 20 to our Consolidated Financial Statements. On September 13, 2013, the Internal Revenue Service issued final regulations regarding capitalization of tangible personal property. Under ASC 740, this is considered to be a change in tax law. Although the final regulations are generally effective beginning on or after January 1, 2014, ASC 740 requires that the effect of a change in tax law be recognized as of the enactment date. Based on our review and analysis, there will not be a material impact on our deferred tax balance as of December 31, 2013.

X
- Details
Name: | mho_IncomeTaxesAbstract
Namespace Prefix: | mho_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration