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Note 17 - Operating and Reporting Segments
 9 Months Ended
Jul. 31, 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

Nine Months Ended

July 31,

July 31,

(In thousands)


2025

2024

2025

2024

Revenues:















Northeast
$ 289,180

$ 255,332

$ 830,209

$ 645,859

Southeast

104,747


115,964


231,025


350,761

West



377,185


330,980


1,029,524


970,671

Total homebuilding

771,112


702,276


2,090,758


1,967,291

Financial services

28,566


18,888


66,826


51,323

Corporate and unallocated

905


1,540


3,093


6,666

Total revenues
$ 800,583

$ 722,704

$ 2,160,677

$ 2,025,280

Income (loss) before income taxes:

















Northeast
$ 41,447

$ 40,006

$ 112,658

$ 107,645

Southeast

11,639


20,449


21,752


62,391

West

(6,284 )

21,009


15,275


77,198

Total homebuilding

46,802


81,464


149,685


247,234

Financial services

13,851


6,526


25,783


15,467

Corporate and unallocated (1)



(36,851 )

9,279

(85,273 )

(63,477 )

Income before income taxes
$ 23,802

$ 97,269

$ 90,195

$ 199,224


(1)

Corporate and unallocated for the three months ended July 31, 2025, included corporate general and administrative expenses of $35.0 million and $1.9 million of other net expenses. Corporate and unallocated for the nine months ended July 31, 2025, included corporate general and administrative expenses of $97.2 million, $11.5 million of other income, and $0.4 million of gain on extinguishment of debt. Corporate and unallocated for the three months ended July 31, 2024, included corporate general and administrative expenses of $38.4 million, a reduction in interest expense of $5.4 million (a component of Other interest in our Condensed Consolidated Statements of Operations) and $42.3 million of other income. Corporate and unallocated for the nine months ended July 31, 2024, included corporate general and administrative expenses of $108.1 million, $43.2 million of other income and $1.4 million of gain on extinguishment of debt. 


July 31,

October 31,

(In thousands)

2025

2024

Assets:

Northeast

 $ 699,572 $ 664,064

Southeast

 361,570 296,058

West

 915,324 889,704

Total homebuilding

 1,976,466 1,849,826

Financial services

 173,775 203,589

Corporate and unallocated

 479,111 552,159

Total assets

 $ 2,629,352 $ 2,605,574