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Note 17 - Operating and Reporting Segments
 6 Months Ended
Apr. 30, 2025
Operating and Reporting Segments  
Operating and Reporting Segments
17. Operating and Reporting Segments


HEI’s operating segments are components of the Company’s 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 resource allocations.


We currently have homebuilding operations in 13 states that are aggregated into reportable segments based primarily upon geographic proximity.


HEI’s reportable segments consist of the following three homebuilding segments and a financial services segment.


Homebuilding:


(1)

Northeast (Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia)
(2) Southeast (Florida, Georgia and South Carolina)
(3) West (Arizona, California and Texas)


Operations of the 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 financial services segment include mortgage banking and title services provided to the homebuilding operations’ customers. Our financial services subsidiaries do not typically retain or service mortgages that we originate but sell the mortgages and related servicing rights to investors.


Corporate and unallocated primarily represents operations at our headquarters in New Jersey. This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, 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 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 (loss) 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 corporate general and administrative expenses.


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 our reportable segments was as follows:



 Three Months Ended

Six Months Ended

April 30,

April 30,

(In thousands)


2025

2024

2025

2024

Revenues:















Northeast
$ 257,281

$ 199,087

$ 541,029

$ 390,527

Southeast

74,676


128,787


126,278


234,797

West



332,385


361,234


652,339


639,691

Total homebuilding

664,342


689,108


1,319,646


1,265,015

Financial services

21,318


17,167


38,260


32,435

Corporate and unallocated

811


2,105


2,188


5,126

Total revenues
$ 686,471

$ 708,380

$ 1,360,094

$ 1,302,576

Income before income taxes:

















Northeast
$ 31,420

$ 31,730

$ 71,211

$ 67,639

Southeast

392


27,067


10,113


41,942

West

18,938


35,597


21,559


56,189

Total homebuilding

50,750


94,394


102,883


165,770

Financial services

8,427


5,144


11,932


8,941

Corporate and unallocated (1)



(32,647 )

(30,146 )

(48,422 )

(72,756 )

Income before income taxes
$ 26,530

$ 69,392

$ 66,393

$ 101,955


(1)

Corporate and unallocated for the three months ended April 30, 2025, included corporate general and administrative expenses of $29.5 million, $3.5 million of other net expenses, and $0.4 million of gain on extinguishment of debt. Corporate and unallocated for the six months ended April 30, 2025, included corporate general and administrative expenses of $62.2 million, $13.4 million of other income, and $0.4 million of gain on extinguishment of debt. Corporate and unallocated for the three months ended April 30, 2024, included corporate general and administrative expenses of $32.5 million, interest expense of $1.7 million (a component of Other interest in our Condensed Consolidated Statements of Operations) and $4.1 million of other income. Corporate and unallocated for the six months ended April 30, 2024, included corporate general and administrative expenses of $69.7 million, interest expense of $5.4 million, $0.9 million of other income and $1.4 million of gain on extinguishment of debt. 


April 30,

October 31,

(In thousands)

2025

2024

Assets:

Northeast

 $ 697,025 $ 664,064

Southeast

 372,741 296,058

West

 915,400 889,704

Total homebuilding

 1,985,166 1,849,826

Financial services

 161,619 203,589

Corporate and unallocated

 406,314 552,159

Total assets

 $ 2,553,099 $ 2,605,574