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Note 10 - Operating and Reporting Segments
 12 Months Ended
Oct. 31, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10.
Operating and Reporting Segments
 
Our operating segments are components of our business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance and make operating decisions. Based on this criteria, each of our communities qualifies as an operating segment, and therefore, it is impractical to provide segment disclosures for this many segments. As such, we have aggregated the homebuilding operating segments into
six
reportable segments.
  
Our homebuilding operating segments are aggregated into reportable segments based primarily upon geographic proximity, similar regulatory environments, land acquisition characteristics and similar methods used to construct and sell homes. Our reportable segments consist of the following
six
homebuilding segments and a financial services segment noted below. During fiscal
2016,
we decided to exit the Minneapolis, MN and Raleigh, NC markets and in the
third
quarter of fiscal
2016,
we completed the sale of our portfolios in those markets.
 
Homebuilding:
 
(1)
Northeast (New Jersey and Pennsylvania)
 
(2)
Mid Atlantic (Delaware, Maryland, Virginia, Washington D.C. and West Virginia)
 
(3)
Midwest (Illinois and Ohio)
 
(4)
Southeast (Florida, Georgia and South Carolina)
 
(5)
Southwest (Arizona and Texas)
 
(6)
West (California)
  
Financial Services
 
Operations of the Company’s Homebuilding segments primarily include the sale and construction of single family attached and detached homes, attached townhomes and condominiums, urban infill and active lifestyle homes in planned residential developments. In addition, from time to time, operations of the homebuilding segments include sales of land. Operations of the Company’s Financial Services segment include mortgage banking and title services provided to the homebuilding operations’ customers. We do not typically retain or service mortgages that we originate but rather sell the mortgages and related servicing rights to investors.
 
Corporate and unallocated primarily represents operations at our headquarters in Red Bank, New Jersey. This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, and administration of insurance, quality and safety. It also includes interest income and interest expense resulting from interest incurred that cannot be capitalized in inventory in the Homebuilding segments, as well as the gains or losses on extinguishment of debt from any debt repurchases or exchanges.
 
 
Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision for income taxes (“Income (loss) before income taxes”). Income (loss) before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, income (loss) from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and interest expense. Income before income taxes for the Financial Services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and selling, general and administrative expenses incurred by the Financial Services segment.
 
Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent stand alone entity during the periods presented.
 
 
Financial information relating to the Company’s segment operations was as follows: 
 
 
 
 
Year Ended October 31,
 
(In thousands)
 
2016
 
 
2015
 
 
2014
 
Revenues:
                  
Northeast
  
$278,028
    
$189,497
    
$275,830
  
Mid-Atlantic
  
458,579
    
399,500
    
332,719
  
Midwest
  
311,322
    
311,449
    
226,174
  
Southeast
  
260,584
    
207,662
    
204,671
  
Southwest
  
1,028,529
    
823,853
    
751,426
  
West
  
342,447
    
159,969
    
230,308
  
Total homebuilding
  
2,679,489
    
2,091,930
    
2,021,128
  
Financial services
  
72,617
    
56,665
    
42,414
  
Corporate and unallocated
  
141
    
(115
)
  
(162
)
Total revenues
  
$2,752,247
    
$2,148,480
    
$2,063,380
  
Income (loss) before income taxes:
                  
Northeast
  
$(3,869
 )  
$(7,742
)
  
$(7,517
)
Mid-Atlantic
  
17,476
    
21,431
    
23,897
  
Midwest
  
(11,416
 )  
14,012
    
17,879
  
Southeast
  
(17,791
 )  
(6,330
)
  
9,247
  
Southwest
  
84,424
    
67,437
    
74,527
  
West
  
3,445
    
(17,145
)
  
21,303
  
Total homebuilding
  
72,269
    
71,663
    
139,336
  
Financial services
  
35,473
    
24,693
    
13,798
  
Corporate and unallocated
  
(105,306
 )  
(118,121
)
  
(132,954
)
Income (loss) before income taxes
  
$2,436
    
$(21,765
)
  
$20,180
  
  
 
 
October 31,
 
(In thousands)
 
2016
 
 
2015
 
Assets:
            
Northeast
  
$220,239
    
$321,983
  
Mid-Atlantic
  
294,225
    
342,159
  
Midwest
  
112,115
    
197,899
  
Southeast
  
226,686
    
223,206
  
Southwest
  
342,270
    
465,740
  
West
  
269,646
    
259,943
  
Total homebuilding
  
1,465,181
    
1,810,930
  
Financial services
  
197,230
    
159,981
  
Corporate and unallocated (1)
  
717,029
    
631,387
  
Total assets
  
$2,379,440
    
$2,602,298
  
 
 
(1)
Includes $
283.6
million and $
290.3
million of income taxes receivable including deferred tax assets in fiscal 2016 and 2015, respectively.
 
 
 
October 31,
 
(In thousands)
 
2016
 
 
2015
 
Investments in and advances to unconsolidated joint ventures:
            
Northeast
  
$28,115
    
$12,340
  
Mid-Atlantic
  
22,407
    
22,417
  
Midwest
  
5,516
    
(20
)
Southeast
  
22,876
    
10,224
  
Southwest
  
3,625
    
-
  
West
  
17,547
    
16,122
  
Total homebuilding
  
100,086
    
61,083
  
Corporate and unallocated
  
416
    
126
  
Total investments in and advances to unconsolidated joint ventures
  
$100,502
    
$61,209
  
  
 
 
 
Year Ended October 31,
 
(In thousands)
 
2016
 
 
2015
 
 
2014
 
Homebuilding interest expense:
                  
Northeast
  
$19,417
    
$14,150
    
$20,940
  
Mid-Atlantic
  
23,662
    
16,268
    
9,542
  
Midwest
  
12,275
    
10,405
    
5,354
  
Southeast
  
16,770
    
9,552
    
7,827
  
Southwest
  
37,552
    
26,147
    
20,543
  
West
  
23,295
    
10,381
    
12,619
  
Total homebuilding
  
132,971
    
86,903
    
76,825
  
Corporate and unallocated
  
50,387
    
64,545
    
64,519
  
Financial services interest expense (1)
  
(763
 )  
(1,066
)
  
(119
)
Total interest expense, net
  
$182,595
    
$150,382
    
$141,225
  
 
  
(1)
Financial services interest expenses are included in the Financial services lines on the Consolidated Statements of Operations in the respective revenues and expenses sections.
  
 
 
Year Ended October 31,
 
(In thousands)
 
2016
 
 
2015
 
 
2014
 
Depreciation:
                  
Northeast
  
$62
    
$136
    
$250
  
Mid-Atlantic
  
56
    
28
    
45
  
Midwest
  
497
    
361
    
355
  
Southeast
  
82
    
40
    
31
  
Southwest
  
104
    
89
    
131
  
West
  
92
    
79
    
33
  
Total homebuilding
  
893
    
733
    
845
  
Financial services
  
41
    
47
    
68
  
Corporate and unallocated
  
2,631
    
2,608
    
2,504
  
Total depreciation
  
$3,565
    
$3,388
    
$3,417
  
 
 
 
Year Ended October 31,
 
(In thousands)
 
2016
 
 
2015
 
 
2014
 
Net additions to operating properties and equipment:
                  
Northeast
  
$78
    
$-
    
$44
  
Mid-Atlantic
  
208
    
58
    
23
  
Midwest
  
3,180
    
637
    
927
  
Southeast
  
233
    
227
    
59
  
Southwest
  
199
    
173
    
39
  
West
  
91
    
88
    
170
  
Total homebuilding
  
3,989
    
1,183
    
1,262
  
Financial services
  
30
    
-
    
28
  
Corporate and unallocated
  
3,988
    
871
    
2,133
  
Total net additions to operating properties and equipment
  
$8,007
    
$2,054
    
$3,423
  
 
 
 
Year Ended October 31,
 
(In thousands)
 
2016
 
 
2015
 
 
2014
 
Equity in (losses) earnings from unconsolidated joint ventures:
                  
Northeast
  
$(2,639
 )  
$856
    
$(1,302
)
Mid-Atlantic
  
(27
 )  
4,502
    
6,459
  
Midwest
  
(1,304
 )  
(105
)
  
17
  
Southeast
  
(1,774
 )  
1,213
    
2,119
  
Southwest
  
(64
 )  
-
    
-
  
West
  
1,462
    
(2,297
)
  
604
  
Total equity in (losses) earnings from unconsolidated joint ventures
  
$(4,346
 )  
$4,169
    
$7,897