Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 20, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-9804 | |
Entity Registrant Name | PULTEGROUP, INC. | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 38-2766606 | |
Entity Address, Address Line One | 3350 Peachtree Road NE, Suite 150 | |
Entity Address, City or Town | Atlanta, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30326 | |
City Area Code | 404 | |
Local Phone Number | 978-6400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 262,966,121 | |
Entity Central Index Key | 0000822416 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of each class | Common Shares, par value $0.01 | |
Trading Symbol | PHM | |
Security Exchange Name | NYSE | |
Series A Junior Participating Preferred Share Purchase Rights | ||
Entity Information [Line Items] | ||
Title of each class | Series A Junior Participating Preferred Share Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets [Abstract] | ||
Cash and equivalents | $ 1,579,586 | $ 2,582,205 |
Restricted cash | 64,468 | 50,030 |
Total cash, cash equivalents, and restricted cash | 1,644,054 | 2,632,235 |
House and land inventory | 7,975,211 | 7,721,798 |
Land held for sale | 31,796 | 27,962 |
Residential mortgage loans available-for-sale | 495,049 | 564,979 |
Investments in unconsolidated entities | 39,558 | 35,562 |
Other assets | 969,437 | 923,270 |
Intangible assets | 158,432 | 163,425 |
Deferred tax assets, net | 132,204 | 136,267 |
Total assets | 11,445,741 | 12,205,498 |
Liabilities [Abstract] | ||
Accounts payable | 404,564 | 511,321 |
Customer deposits | 589,634 | 449,474 |
Deferred tax liabilities | 110,884 | 103,548 |
Accrued and other liabilities | 1,352,629 | 1,407,043 |
Financial Services debt | 270,819 | 411,821 |
Notes payable | 2,031,937 | 2,752,302 |
Liabilities, Total | 4,760,467 | 5,635,509 |
Shareholders' equity | 6,685,274 | 6,569,989 |
Total liabilities and shareholders' equity | $ 11,445,741 | $ 12,205,498 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Homebuilding Cost of Revenues: | ||
Selling, general, and administrative expenses | $ (271,686) | $ (263,669) |
Loss on debt retirement | (61,469) | 0 |
Goodwill impairment | 0 | (20,190) |
Other expense, net | (2,639) | (2,524) |
Income before income taxes | 394,052 | 263,769 |
Income tax expense | (89,945) | (60,058) |
Net income | $ 304,107 | $ 203,711 |
Per share: | ||
Basic earnings (usd per share) | $ 1.14 | $ 0.75 |
Diluted earnings (usd per share) | 1.13 | 0.74 |
Cash dividends declared (usd per share) | $ 0.14 | $ 0.12 |
Number of shares used in calculation: | ||
Basic shares outstanding (shares) | 265,407 | 270,000 |
Effect of dilutive securities (shares) | 605 | 1,218 |
Diluted shares outstanding (shares) | 266,012 | 271,218 |
Home sale | ||
Revenues: | ||
Revenues | $ 2,596,510 | $ 2,221,503 |
Homebuilding Cost of Revenues: | ||
Cost of revenues | (1,935,635) | (1,694,865) |
Land sale and other | ||
Revenues: | ||
Revenues | 27,159 | 18,927 |
Homebuilding Cost of Revenues: | ||
Cost of revenues | (24,636) | (15,014) |
Total Homebuilding | ||
Homebuilding Cost of Revenues: | ||
Financial services expenses | (1,960,271) | (1,709,879) |
Financial Services | ||
Homebuilding Cost of Revenues: | ||
Financial services expenses | $ (39,674) | $ (34,949) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net income | $ 304,107 | $ 203,711 |
Other comprehensive income, net of tax: | ||
Change in value of derivatives | 25 | 25 |
Other comprehensive income | 25 | 25 |
Comprehensive income | $ 304,132 | $ 203,736 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings |
Shareholders' equity (shares) at Dec. 31, 2019 | 270,235 | ||||||
Shareholders' equity at Dec. 31, 2019 | $ 5,458,180 | $ 2,702 | $ 3,235,149 | $ (245) | $ 2,220,574 | $ (735) | $ (735) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (shares) | 1 | ||||||
Stock option exercises | 51 | 51 | |||||
Stock issuances (shares) | 738 | ||||||
Share issuances | 4,095 | $ 7 | 4,088 | ||||
Dividends declared | (32,609) | (32,609) | |||||
Share repurchases (shares) | (2,825) | ||||||
Share repurchases | (95,676) | $ (28) | (95,648) | ||||
Cash paid for shares withheld for taxes | (14,838) | (14,838) | |||||
Share-based compensation | 8,187 | 8,187 | |||||
Net income | 203,711 | 203,711 | |||||
Other comprehensive income | 25 | 25 | |||||
Shareholders' equity (shares) at Mar. 31, 2020 | 268,149 | ||||||
Shareholders' equity at Mar. 31, 2020 | 5,530,391 | $ 2,681 | 3,247,475 | (220) | 2,280,455 | ||
Shareholders' equity (shares) at Dec. 31, 2020 | 266,464 | ||||||
Shareholders' equity at Dec. 31, 2020 | 6,569,989 | $ 2,665 | 3,261,412 | (145) | 3,306,057 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock option exercises (shares) | 1 | ||||||
Stock option exercises | 11 | 11 | |||||
Stock issuances (shares) | 505 | ||||||
Share issuances | 4,181 | $ 5 | 4,176 | ||||
Dividends declared | (37,325) | (37,325) | |||||
Share repurchases (shares) | (3,333) | ||||||
Share repurchases | (153,703) | $ (34) | (153,669) | ||||
Cash paid for shares withheld for taxes | (10,566) | (10,566) | |||||
Share-based compensation | 8,555 | 8,555 | |||||
Net income | 304,107 | 304,107 | |||||
Other comprehensive income | 25 | 25 | |||||
Shareholders' equity (shares) at Mar. 31, 2021 | 263,637 | ||||||
Shareholders' equity at Mar. 31, 2021 | $ 6,685,274 | $ 2,636 | $ 3,274,154 | $ (120) | $ 3,408,604 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 304,107 | $ 203,711 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Deferred income tax expense | 11,391 | 19,955 |
Land-related charges | 1,368 | 9,729 |
Loss on debt retirement | 61,469 | 0 |
Goodwill impairment | 0 | 20,190 |
Depreciation and amortization | 17,142 | 15,149 |
Share-based compensation expense | 11,630 | 11,479 |
Other, net | (687) | (903) |
Increase (decrease) in cash due to: | ||
Inventories | (243,947) | (189,364) |
Residential mortgage loans available-for-sale | 69,930 | 145,113 |
Other assets | (54,303) | (3,534) |
Accounts payable, accrued and other liabilities | (1,352) | (26,910) |
Net cash provided by (used in) operating activities | 176,748 | 204,615 |
Cash flows from investing activities: | ||
Capital expenditures | (14,752) | (20,139) |
Investments in unconsolidated entities | (8,169) | (663) |
Distributions of capital from unconsolidated entities | 5,000 | 6,500 |
Business acquisition | (10,400) | (83,200) |
Other investing activities, net | 698 | 1,706 |
Net cash provided by (used in) investing activities | (27,623) | (95,796) |
Cash flows from financing activities: | ||
Repayments of notes payable | (794,435) | (9,245) |
Borrowings under revolving credit facility | 0 | 700,000 |
Financial Services borrowings (repayments), net | (141,002) | (56,573) |
Stock option exercises | 11 | 50 |
Share repurchases | (153,703) | (95,676) |
Cash paid for shares withheld for taxes | (10,566) | (14,838) |
Dividends paid | (37,611) | (32,740) |
Net cash provided by (used in) financing activities | (1,137,306) | 490,978 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (988,181) | 599,797 |
Cash, cash equivalents, and restricted cash at beginning of period | 2,632,235 | 1,251,456 |
Cash, cash equivalents, and restricted cash at end of period | 1,644,054 | 1,851,253 |
Supplemental Cash Flow Information: | ||
Interest paid (capitalized), net | 17,368 | 14,019 |
Income taxes paid (refunded), net | $ 15,574 | $ 5,540 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentationPulteGroup, Inc. is one of the largest homebuilders in the United States ("U.S."), and our common shares trade on the New York Stock Exchange under the ticker symbol “PHM”. Unless the context otherwise requires, the terms "PulteGroup", the "Company", "we", "us", and "our" used herein refer to PulteGroup, Inc. and its subsidiaries. While our subsidiaries engage primarily in the homebuilding business, we also engage in mortgage banking operations, conducted through Pulte Mortgage LLC (“Pulte Mortgage”), and title and insurance brokerage operations. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Major components of inventory were as follows ($000’s omitted): March 31, December 31, Homes under construction $ 3,594,406 $ 3,086,740 Land under development 3,913,349 4,137,318 Raw land 467,456 497,740 $ 7,975,211 $ 7,721,798 We capitalize interest cost into inventory during the active development and construction of our communities. In all periods presented, we capitalized substantially all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels. Information related to interest capitalized into inventory is as follows ($000’s omitted): Three Months Ended March 31, 2021 2020 Interest in inventory, beginning of period $ 193,409 $ 210,383 Interest capitalized 34,627 39,913 Interest expensed (34,684) (36,871) Interest in inventory, end of period $ 193,352 $ 213,425 Land option agreements We enter into land option agreements in order to procure land for the construction of homes in the future. Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable us to defer acquiring portions of properties owned by third parties or unconsolidated entities until we have determined whether and when to exercise our option, which reduces our financial risks associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option, the costs would be capitalized if we owned the land, and acquisition of the property is probable. Such costs are reflected in other assets and are reclassified to inventory upon taking title to the land. We write off deposits and pre-acquisition costs when it becomes probable that we will not go forward with the project or recover the capitalized costs. Such decisions take into consideration changes in local market conditions, the timing of required land purchases, the availability and best use of necessary incremental capital, and other factors. We record any such write-offs of deposits and pre-acquisition costs within other expense, net. If an entity holding the land under option is a variable interest entity ("VIE"), our deposit represents a variable interest in that entity. No VIEs required consolidation at either March 31, 2021 or December 31, 2020 because we determined that we were not the VIEs' primary beneficiary. Our maximum exposure to loss related to these VIEs is generally limited to our deposits and pre-acquisition costs under the land option agreements. The following provides a summary of our interests in land option agreements as of March 31, 2021 and December 31, 2020 ($000’s omitted): March 31, 2021 December 31, 2020 Deposits and Remaining Purchase Deposits and Remaining Purchase Land options with VIEs $ 142,771 $ 1,844,131 $ 126,900 $ 1,586,551 Other land options 177,049 2,460,589 164,964 2,187,017 $ 319,820 $ 4,304,720 $ 291,864 $ 3,773,568 Land-related charges We recorded the following land-related charges ($000's omitted): Three Months Ended March 31, Statement of Operations Classification 2021 2020 Land impairments Home sale cost of revenues $ — $ 5,386 Net realizable value ("NRV") adjustments - land held for sale Land sale and other cost of revenues — 11 Write-offs of deposits and pre-acquisition costs Other expense, net 1,368 4,332 $ 1,368 $ 9,729 Our evaluations for land impairments, NRV adjustments, and write-offs of deposits and pre-acquisition costs are based on our best estimates of the future cash flows of our communities. Due to uncertainties in the estimation process, the significant volatility in demand for new housing, the long life cycles of certain of our communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from such estimates. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment information | Segment information Our Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the U.S. and the construction of housing on such land. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments: Northeast: Connecticut, Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia Southeast: Georgia, North Carolina, South Carolina, Tennessee Florida: Florida Midwest: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio Texas: Texas West: Arizona, California, Nevada, New Mexico, Washington We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance brokerage operations that operate generally in the same markets as the Homebuilding segments. Operating Data by Segment Three Months Ended March 31, 2021 2020 Revenues: Northeast $ 176,467 $ 162,434 Southeast 436,779 382,394 Florida 625,241 506,689 Midwest 366,814 292,169 Texas 374,121 344,738 West 644,247 552,006 2,623,669 2,240,430 Financial Services 106,122 54,550 Consolidated revenues $ 2,729,791 $ 2,294,980 Income (loss) before income taxes: Northeast $ 25,894 $ 18,609 Southeast 71,322 54,744 Florida (a) 101,208 55,333 Midwest 52,864 31,462 Texas 65,648 53,595 West 98,832 67,255 Other homebuilding (b) (88,064) (36,780) 327,704 244,218 Financial Services 66,348 19,551 Consolidated income before income taxes $ 394,052 $ 263,769 (a) Includes goodwill impairment charge totaling $20.2 million (see Note 1 ) in the three months ended March 31, 2020. (b) Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the operating segments. Other homebuilding also includes a loss on debt retirement of $61.5 million in the three months ended March 31, 2021 (see Note 4 ). Operating Data by Segment Three Months Ended March 31, 2021 2020 Land-related charges (a) : Northeast $ 116 $ 4,753 Southeast 456 748 Florida 131 522 Midwest 54 777 Texas 527 656 West 84 1,529 Other homebuilding — 744 $ 1,368 $ 9,729 (a) Land-related charges include land impairments, NRV adjustments on land held for sale, and write-offs of deposits and pre-acquisition costs for land option contracts we elected not to pursue. Operating Data by Segment ($000's omitted) March 31, 2021 Homes Under Land Under Raw Land Total Total Northeast $ 384,606 $ 236,846 $ 41,641 $ 663,093 $ 766,691 Southeast 532,643 623,668 74,107 1,230,418 1,346,886 Florida 733,612 890,080 83,806 1,707,498 2,036,755 Midwest 421,833 389,098 16,556 827,487 949,539 Texas 413,218 417,342 114,603 945,163 1,040,459 West 1,053,317 1,123,844 122,283 2,299,444 2,582,835 Other homebuilding (a) 55,177 232,471 14,460 302,108 2,073,987 3,594,406 3,913,349 467,456 7,975,211 10,797,152 Financial Services — — — — 648,589 $ 3,594,406 $ 3,913,349 $ 467,456 $ 7,975,211 $ 11,445,741 Operating Data by Segment ($000's omitted) December 31, 2020 Homes Under Land Under Raw Land Total Total Northeast $ 342,737 $ 203,561 $ 68,865 $ 615,163 $ 712,205 Southeast 465,950 645,408 69,937 1,181,295 1,296,382 Florida 638,394 921,962 116,709 1,677,065 1,967,788 Midwest 364,839 424,169 18,173 807,181 911,984 Texas 354,256 458,893 66,024 879,173 955,436 West 874,673 1,212,730 142,380 2,229,783 2,519,724 Other homebuilding (a) 45,891 270,595 15,652 332,138 3,149,871 3,086,740 4,137,318 497,740 7,721,798 11,513,390 Financial Services — — — — 692,108 $ 3,086,740 $ 4,137,318 $ 497,740 $ 7,721,798 $ 12,205,498 (a) Other homebuilding primarily includes cash and equivalents, capitalized interest, intangibles, deferred tax assets, and other corporate items that are not allocated to the operating segments. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Notes payable Our notes payable are summarized as follows ($000’s omitted): March 31, December 31, 4.250% unsecured senior notes due March 2021 (a) $ — $ 425,954 5.500% unsecured senior notes due March 2026 (a) 500,000 700,000 5.000% unsecured senior notes due January 2027 (a) 500,000 600,000 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 Net premiums, discounts, and issuance costs (b) (12,222) (13,750) Total senior notes 1,987,778 2,712,204 Other notes payable 44,159 40,098 Notes payable $ 2,031,937 $ 2,752,302 Estimated fair value $ 2,507,209 $ 3,415,662 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. (b) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes. In the three months ended March 31, 2021, we accelerated the retirement of $200.0 million and $100.0 million of our unsecured notes scheduled to mature in 2026 and 2027, respectively, through a cash tender offer. The retirement resulted in a loss of $61.5 million, which includes the write-off of debt issuance costs, unamortized discounts and premiums, and transaction fees. Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $44.2 million and $40.1 million at March 31, 2021 and December 31, 2020, respectively. These notes have maturities ranging up to three years, are secured by the applicable land positions to which they relate, and generally have no recourse to any other assets. The stated interest rates on these notes range up to 5.17%. Revolving credit facility We maintain a revolving credit facility (the "Revolving Credit Facility") maturing in June 2023 that has a maximum borrowing capacity of $1.0 billion and contains an uncommitted accordion feature that could increase the capacity to $1.5 billion, subject to certain conditions and availability of additional bank commitments. The Revolving Credit Facility also provides for the issuance of letters of credit that reduce the available borrowing capacity under the Revolving Credit Facility, with a sublimit of $500.0 million at March 31, 2021. The interest rate on borrowings under the Revolving Credit Facility may be based on either the London Interbank Offered Rate ("LIBOR") or a base rate plus an applicable margin, as defined therein. As a precautionary measure during the initial phase of the COVID-19 pandemic, we made the decision in March 2020 to draw $700.0 million under the Revolving Credit Facility. In June 2020, we repaid the full outstanding balance of $700.0 million. As a result, we had no borrowings outstanding at both March 31, 2021 and December 31, 2020, and $235.7 million and $249.7 million of letters of credit issued under the Revolving Credit Facility at March 31, 2021 and December 31, 2020, respectively. The Revolving Credit Facility contains financial covenants that require us to maintain a minimum Tangible Net Worth, a minimum Interest Coverage Ratio, and a maximum Debt-to-Capitalization Ratio (as each term is defined in the Revolving Credit Facility). As of March 31, 2021, we were in compliance with all covenants. Our available and unused borrowings under the Revolving Credit Facility, net of outstanding letters of credit, amounted to $764.3 million and $750.3 million at March 31, 2021 and December 31, 2020, respectively. Financial Services debt Pulte Mortgage maintains a master repurchase agreement with third party lenders (the "Repurchase Agreement") that matures on July 29, 2021. The maximum aggregate commitment was $280.0 million at March 31, 2021 and increases to $375.0 million on May 25, 2021, which continues through maturity. The purpose of the changes in capacity during the term of the agreement is to lower associated fees during seasonally lower volume periods of mortgage origination activity. Borrowings under the Repurchase Agreement are secured by residential mortgage loans available-for-sale. The Repurchase Agreement contains various affirmative and negative covenants applicable to Pulte Mortgage, including quantitative thresholds related to net worth, net income, and liquidity. Pulte Mortgage had $270.8 million and $411.8 million outstanding under the Repurchase Agreement at March 31, 2021 and December 31, 2020, respectively, and was in compliance with all of its covenants and requirements as of such dates. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders’ equity | Shareholders’ equity In the three months ended March 31, 2021, we declared cash dividends totaling $37.3 million and repurchased 3.3 million shares under our repurchase authorization for $153.7 million. For the three months ended March 31, 2020, we declared cash dividends totaling $32.6 million and repurchased 2.8 million shares under our repurchase authorization for $95.7 million. At March 31, 2021, we had remaining authorization to repurchase $201.2 million of common shares. On April 26, 2021, the Board of Directors approved an additional share repurchase authorization of $1.0 billion. Under our share-based compensation plans, we accept shares as payment under certain conditions related to stock option exercises and vesting of shares, generally related to the payment of minimum tax obligations. In the three months ended March 31, 2021 and 2020, participants surrendered shares valued at $10.6 million and $14.8 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxesOur effective tax rate in the three months ended March 31, 2021 and March 31, 2020 was 22.8% in each period. Our effective tax rate differs from the federal statutory rate primarily due to state tax expense partially offset by benefits associated with federal energy efficient home credits and equity compensation. At March 31, 2021 and December 31, 2020, we had deferred tax assets, net of deferred tax liabilities and valuation allowance, of $21.3 million and $32.7 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time. Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. We had $33.5 million and $30.9 million of gross unrecognized tax benefits at March 31, 2021 and December 31, 2020, respectively. Additionally, we had accrued interest and penalties of $3.2 million and $2.8 million at March 31, 2021 and December 31, 2020, respectively. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Fair value disclosures ASC 820, “Fair Value Measurements and Disclosures,” provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows: Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities. Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active. Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques. Our assets and liabilities measured or disclosed at fair value are summarized below ($000’s omitted): Financial Instrument Fair Value Fair Value March 31, December 31, Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 495,049 $ 564,979 Interest rate lock commitments Level 2 17,248 16,161 Forward contracts Level 2 13,716 (5,436) Whole loan commitments Level 2 1,367 (498) Measured at fair value on a non-recurring basis: House and land inventory Level 3 $ — $ 582 Disclosed at fair value: Cash, cash equivalents, and restricted cash Level 1 $ 1,644,054 $ 2,632,235 Financial Services debt Level 2 270,819 411,821 Senior notes payable Level 2 2,463,050 3,375,564 Other notes payable Level 2 44,159 40,098 Fair values for agency residential mortgage loans available-for-sale are determined based on quoted market prices for comparable instruments. Fair values for non-agency residential mortgage loans available-for-sale are determined based on purchase commitments from whole loan investors and other relevant market information available to management. Fair values for interest rate lock commitments, including the value of servicing rights, and forward contracts on mortgage-backed securities are valued based on market prices for similar instruments. Fair values for whole loan commitments are based on market prices for similar instruments from the specific whole loan investor. Certain assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. The non-recurring fair values included in the above table represent only those assets whose carrying values were adjusted to fair value as of the respective balance sheet dates. The carrying amounts of cash and equivalents, Financial Services debt and other notes payable approximate their fair values due to their short-term nature and/or floating interest rate terms. The fair values of senior notes are based on quoted market prices, when available. If quoted market prices are not available, fair values are based on quoted market prices of similar issues. The carrying value of senior notes was $2.0 billion and $2.7 billion at March 31, 2021 and December 31, 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Letters of credit and surety bonds In the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $235.7 million and $1.6 billion, respectively, at March 31, 2021, and $249.7 million and $1.5 billion, respectively, at December 31, 2020. In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn. Litigation and regulatory matters We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment practices, and protection of the environment. As a result, we are subject to periodic examination or inquiry by various governmental agencies that administer these laws and regulations. We establish liabilities for litigation, legal claims, and regulatory matters when such matters are both probable of occurring and any potential loss is reasonably estimable. We accrue for such matters based on the facts and circumstances specific to each matter and revise these estimates as the matters evolve. In such cases, there may exist an exposure to loss in excess of any amounts currently accrued. In view of the inherent difficulty of predicting the outcome of these legal and regulatory matters, we generally cannot predict the ultimate resolution of the pending matters, the related timing, or the eventual loss. While the outcome of such contingencies cannot be predicted with certainty, we do not believe that the resolution of such matters will have a material adverse impact on our results of operations, financial position, or cash flows. However, to the extent the liability arising from the ultimate resolution of any matter exceeds the estimates reflected in the recorded reserves relating to such matter, we could incur additional charges that could be significant. Product warranty Home purchasers are provided with a limited warranty against certain building defects, including a one-year comprehensive limited warranty and coverage for certain other aspects of the home’s construction and operating systems for periods of up to and, in limited instances, exceeding 10 years. We estimate the costs to be incurred under these warranties and record liabilities in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost per claim. We periodically assess the adequacy of the warranty liabilities for each geographic market in which we operate and adjust the amounts as necessary. Actual warranty costs in the future could differ from the current estimates. Changes to warranty liabilities were as follows ($000’s omitted): Three Months Ended March 31, 2021 2020 Warranty liabilities, beginning of period $ 82,744 $ 91,389 Reserves provided 17,344 15,039 Payments (15,493) (18,276) Other adjustments (788) 243 Warranty liabilities, end of period $ 83,807 $ 88,395 Self-insured risks We maintain, and require our subcontractors to maintain, general liability insurance coverage. We also maintain builders' risk, property, errors and omissions, workers' compensation, and other business insurance coverage. These insurance policies protect us against a portion of the risk of loss from claims. However, we retain a significant portion of the overall risk for such claims either through policies issued by our captive insurance subsidiaries or through our own self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. Our general liability insurance includes coverage for certain construction defects. While construction defect claims can relate to a variety of circumstances, the majority of our claims relate to alleged problems with siding, plumbing, foundations and other concrete work, windows, roofing, and heating, ventilation and air conditioning systems. The availability of general liability insurance for the homebuilding industry and its subcontractors has become increasingly limited, and the insurance policies available require us to maintain significant per occurrence and aggregate retention levels. In certain instances, we may offer our subcontractors the opportunity to purchase insurance through one of our captive insurance subsidiaries or participate in a project-specific insurance program provided by us. Policies issued by our captive insurance subsidiaries represent self-insurance of these risks by us. A portion of this self-insured exposure is limited by reinsurance policies that we purchase. General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year. Our insurance coverage requires a per occurrence deductible up to an overall aggregate retention level. Beginning with the first dollar, amounts paid to satisfy insured claims generally apply to our per occurrence and aggregate retention obligations. Any amounts incurred in excess of the occurrence or aggregate retention levels are covered by insurance up to our purchased coverage levels. Our insurance policies, including the captive insurance subsidiaries' reinsurance policies, are maintained with highly-rated underwriters for whom we believe counterparty default risk is not significant. At any point in time, we are managing over 1,000 individual claims related to general liability, property, errors and omissions, workers' compensation, and other business insurance coverage. We reserve for costs associated with such claims (including expected claims management expenses) on an undiscounted basis at the time revenue is recognized for each home closing and periodically evaluate the recorded liabilities based on actuarial analyses of our historical claims. The actuarial analyses calculate estimates of the ultimate net cost of all unpaid losses, including estimates for incurred but not reported losses ("IBNR"). IBNR represents losses related to claims incurred but not yet reported plus development on reported claims. Our recorded reserves for all such claims totaled $653.1 million and $641.8 million at March 31, 2021 and December 31, 2020, respectively. The recorded reserves include loss estimates related to both (i) existing claims and related claim expenses and (ii) IBNR and related claim expenses. Liabilities related to IBNR and related claim expenses represented approximately 67% and 68% of the total general liability reserves at March 31, 2021 and December 31, 2020, respectively. The actuarial analyses that determine the IBNR portion of reserves consider a variety of factors, including the frequency and severity of losses, which are based on our historical claims experience supplemented by industry data. The actuarial analyses of the reserves also consider historical third party recovery rates and claims management expenses. Housing market conditions can be volatile, and we believe such conditions can affect the frequency and cost of construction defect claims. Additionally, IBNR estimates comprise the majority of our liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in claims reporting and resolution patterns, third party recoveries, insurance industry practices, the regulatory environment, and legal precedent. State regulations vary, but construction defect claims are typically reported and resolved over an extended period, often exceeding ten years. Changes in the frequency and timing of reported claims and estimates of specific claim values can impact the underlying inputs and trends utilized in the actuarial analyses, which could have a material impact on the recorded reserves. Additionally, the amount of insurance coverage available for each policy period also impacts our recorded reserves. Because of the inherent uncertainty in estimating future losses and the timing of such losses related to these claims, actual costs could differ significantly from estimated costs. Adjustments to reserves are recorded in the period in which the change in estimate occurs. Costs associated with our insurance programs are classified within selling, general, and administrative expenses. Changes in these liabilities were as follows ($000's omitted): Three Months Ended March 31, 2021 2020 Balance, beginning of period $ 641,779 $ 709,798 Reserves provided 19,542 18,449 Adjustments to previously recorded reserves (6,082) 1,300 Payments, net (a) (2,171) (10,375) Balance, end of period $ 653,068 $ 719,172 (a) Includes net changes in amounts expected to be recovered from our insurance carriers, which are recorded in other assets (see below). Estimates of anticipated recoveries of our costs under various insurance policies or from subcontractors or other third parties are recorded when recovery is considered probable. Such receivables are recorded in other assets and totaled $73.8 million and $69.5 million at March 31, 2021 and December 31, 2020, respectively. Those receivables relate to costs incurred to perform corrective repairs, settle claims with customers, and other costs related to the continued progression of construction defect claims that we believe are insured. Given the complexity inherent with resolving construction defect claims in the homebuilding industry described above, there generally exists a significant lag between our payment of claims and our reimbursements from applicable insurance carriers or third parties. In addition, disputes between homebuilders and insurance carriers or third parties over coverage positions relating to construction defect claims are common. Resolution of claims involves the exchange of significant amounts of information and frequently involves legal action. Leases We lease certain office space and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use ("ROU") assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or more options to renew. The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets and leasehold improvements are limited to the expected lease term. Certain of our lease agreements include rental payments based on a pro-rata share of the lessor’s operating costs which are variable in nature. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. ROU assets are classified within other assets on the balance sheet, while lease liabilities are classified within accrued and other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets and lease liabilities were $69.0 million and $88.3 million at March 31, 2021, respectively, and $71.3 million and $91.4 million at December 31, 2020, respectively. In the three months ended March 31, 2021 and 2020, we recorded an additional $1.1 million and $9.6 million of lease liabilities under operating leases, respectively. Payments on lease liabilities in the three months ended March 31, 2021 and 2020, totaled $5.3 million and $5.9 million, respectively. Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of less than one year. In the three months ended March 31, 2021 and 2020, our total lease expense was $10.2 million and $9.9 million, respectively, inclusive of variable lease costs of $1.9 million during both periods, as well as short-term lease costs of $2.9 million and $2.2 million, respectively. Sublease income was de minimis. The future minimum lease payments required under our leases as of March 31, 2021 were as follows ($000's omitted): Years Ending December 31, 2021 (a) $ 15,969 2022 22,646 2023 20,567 2024 14,374 2025 9,521 Thereafter 19,578 Total lease payments (b) 102,655 Less: Interest (c) 14,324 Present value of lease liabilities (d) $ 88,331 (a) Remaining payments are for the nine months ending December 31, 2021. (b) Lease payments include options to extend lease terms that are reasonably certain of being exercised. There were $1.7 million of legally binding minimum lease payments for leases signed but not yet commenced at March 31, 2021. (c) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 5.4 years and 5.6%, respectively, at March 31, 2021. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Consolidation policy | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Subsequent events | Subsequent events We evaluated subsequent events up until the time the financial statements were filed with the Securities and Exchange Commission (the "SEC"). |
Revenue recognition | Revenue recognition Home sale revenues - Home sale revenues and related profit are generally recognized when title to and possession of the home are transferred to the buyer, and our performance obligation to deliver the agreed-upon home is generally satisfied at the home closing date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit and classified as cash. Contract liabilities include customer deposits related to sold but undelivered homes, which totaled $589.6 million and $449.5 million at March 31, 2021 and December 31, 2020, respectively. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit. See Note 8 for information on warranties and related obligations. Land sale and other revenues - We periodically elect to sell parcels of land to third parties in the event such assets no longer fit into our strategic operating plans or are zoned for commercial or other development. Land sales are generally outright sales of specified land parcels with cash consideration due on the closing date, which is generally when performance obligations are satisfied. Revenues related to our construction services operations are generally recognized as materials are delivered and installation services are provided. Financial Services revenues - Loan origination fees, commitment fees, and certain direct loan origination costs are recognized as incurred. Expected gains and losses from the sale of residential mortgage loans and their related servicing rights are included in the measurement of written loan commitments that are accounted for at fair value through Financial Services revenues at the time of commitment. Subsequent changes in the fair value of these loans are reflected in Financial Services revenues as they occur. Interest income is accrued from the date a mortgage loan is originated until the loan is sold. Mortgage servicing fees represent fees earned for servicing loans. Servicing fees are based on a contractual percentage of the outstanding principal balance and are credited to income when related mortgage payments are received. |
Earnings per share | Earnings per share Basic earnings per share is computed by dividing income available to common shareholders (the “Numerator”) by the weighted-average number of common shares outstanding, adjusted for unvested shares (the “Denominator”) for the period. Computing diluted earnings per share is similar to computing basic earnings per share, except that the Denominator is increased to include the dilutive effects of stock options, unvested restricted share units, and other potentially dilutive instruments. Any stock options that have an exercise price greater than the average market price are considered to be anti-dilutive and are excluded from the diluted earnings per share calculation. |
Residential mortgage loans available-for-sale | Residential mortgage loans available-for-sale Substantially all of the loans originated by us are sold in the secondary mortgage market within a short period of time after origination, generally within 30 days. At March 31, 2021 and December 31, 2020, residential mortgage loans available-for-sale had an aggregate fair value of $495.0 million and $565.0 million, respectively, and an aggregate outstanding principal balance of $481.5 million and $539.1 million, respectively. Net gains from the sale of mortgages were $77.4 million and $30.9 million in the three months ended March 31, 2021 and 2020, respectively, and have been included in Financial Services revenues. |
Derivative instruments and hedging activities | Derivative instruments and hedging activities We are party to interest rate lock commitments ("IRLCs") with customers resulting from our mortgage origination operations. At March 31, 2021 and December 31, 2020, we had aggregate IRLCs of $598.0 million and $367.2 million, respectively, which were originated at interest rates prevailing at the date of commitment. Since we can terminate a loan commitment if the borrower does not comply with the terms of the contract, and some loan commitments may expire without being drawn upon, these commitments do not necessarily represent future cash requirements. We evaluate the creditworthiness of these transactions through our normal credit policies. We hedge our exposure to interest rate market risk relating to residential mortgage loans available-for-sale and IRLCs using forward contracts on mortgage-backed securities, which are commitments to either purchase or sell a specified financial instrument at a specified future date for a specified price, and whole loan investor commitments, which are obligations of an |
New accounting pronouncements | New accounting pronouncements On January 1, 2021, we adopted ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Our adoption of ASU 2019-12 did not have a material impact on our financial statements. On January 1, 2020, we adopted ASC 326, which changed the impairment model for most financial assets and certain other instruments from an "incurred loss" approach to a new "expected credit loss" methodology. We adopted ASC 326 using the modified retrospective transition method. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. Our adoption of ASC 326 resulted in a $0.7 million decrease to retained earnings as of January 1, 2020. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which removed the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard, goodwill impairment is determined by evaluating the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We adopted the standard for annual and interim periods beginning January 1, 2020, and the standard was followed in the previously mentioned assessment of the ICG goodwill. |
Inventory interest capitalization | We capitalize interest cost into inventory during the active development and construction of our communities. In all periods presented, we capitalized substantially all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels. |
Fair value of financial instruments | Fair values for agency residential mortgage loans available-for-sale are determined based on quoted market prices for comparable instruments. Fair values for non-agency residential mortgage loans available-for-sale are determined based on purchase commitments from whole loan investors and other relevant market information available to management. Fair values for interest rate lock commitments, including the value of servicing rights, and forward contracts on mortgage-backed securities are valued based on market prices for similar instruments. Fair values for whole loan commitments are based on market prices for similar instruments from the specific whole loan investor. Certain assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. The non-recurring fair values included in the above table represent only those assets whose carrying values were adjusted to fair value as of the respective balance sheet dates. The carrying amounts of cash and equivalents, Financial Services debt and other notes payable approximate their fair values due to their short-term nature and/or floating interest rate terms. The fair values of senior notes are based on quoted market prices, when available. If quoted market prices are not available, fair values are based on quoted market prices of similar issues. The carrying value of senior notes was $2.0 billion and $2.7 billion at March 31, 2021 and December 31, 2020, respectively. |
Letters of credit and surety bonds | Letters of credit and surety bondsIn the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $235.7 million and $1.6 billion, respectively, at March 31, 2021, and $249.7 million and $1.5 billion, respectively, at December 31, 2020. In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. |
Litigation and regulatory matters | Litigation and regulatory matters We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment practices, and protection of the environment. As a result, we are subject to periodic examination or inquiry by various governmental agencies that administer these laws and regulations. |
Allowance for warranties | Home purchasers are provided with a limited warranty against certain building defects, including a one-year comprehensive limited warranty and coverage for certain other aspects of the home’s construction and operating systems for periods of up to and, in limited instances, exceeding 10 years. We estimate the costs to be incurred under these warranties and record liabilities in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost per claim. We periodically assess the adequacy of the warranty liabilities for each geographic market in which we operate and adjust the amounts as necessary. Actual warranty costs in the future could differ from the current estimates. |
Self insured risks | Self-insured risks We maintain, and require our subcontractors to maintain, general liability insurance coverage. We also maintain builders' risk, property, errors and omissions, workers' compensation, and other business insurance coverage. These insurance policies protect us against a portion of the risk of loss from claims. However, we retain a significant portion of the overall risk for such claims either through policies issued by our captive insurance subsidiaries or through our own self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. Our general liability insurance includes coverage for certain construction defects. While construction defect claims can relate to a variety of circumstances, the majority of our claims relate to alleged problems with siding, plumbing, foundations and other concrete work, windows, roofing, and heating, ventilation and air conditioning systems. The availability of general liability insurance for the homebuilding industry and its subcontractors has become increasingly limited, and the insurance policies available require us to maintain significant per occurrence and aggregate retention levels. In certain instances, we may offer our subcontractors the opportunity to purchase insurance through one of our captive insurance subsidiaries or participate in a project-specific insurance program provided by us. Policies issued by our captive insurance subsidiaries represent self-insurance of these risks by us. A portion of this self-insured exposure is limited by reinsurance policies that we purchase. General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year. Our insurance coverage requires a per occurrence deductible up to an overall aggregate retention level. Beginning with the first dollar, amounts paid to satisfy insured claims generally apply to our per occurrence and aggregate retention obligations. Any amounts incurred in excess of the occurrence or aggregate retention levels are covered by insurance up to our purchased coverage levels. Our insurance policies, including the captive insurance subsidiaries' reinsurance policies, are maintained with highly-rated underwriters for whom we believe counterparty default risk is not significant. At any point in time, we are managing over 1,000 individual claims related to general liability, property, errors and omissions, workers' compensation, and other business insurance coverage. We reserve for costs associated with such claims (including expected claims management expenses) on an undiscounted basis at the time revenue is recognized for each home closing and periodically evaluate the recorded liabilities based on actuarial analyses of our historical claims. The actuarial analyses calculate estimates of the ultimate net cost of all unpaid losses, including estimates for incurred but not reported losses ("IBNR"). IBNR represents losses related to claims incurred but not yet reported plus development on reported claims. Our recorded reserves for all such claims totaled $653.1 million and $641.8 million at March 31, 2021 and December 31, 2020, respectively. The recorded reserves include loss estimates related to both (i) existing claims and related claim expenses and (ii) IBNR and related claim expenses. Liabilities related to IBNR and related claim expenses represented approximately 67% and 68% of the total general liability reserves at March 31, 2021 and December 31, 2020, respectively. The actuarial analyses that determine the IBNR portion of reserves consider a variety of factors, including the frequency and severity of losses, which are based on our historical claims experience supplemented by industry data. The actuarial analyses of the reserves also consider historical third party recovery rates and claims management expenses. Housing market conditions can be volatile, and we believe such conditions can affect the frequency and cost of construction defect claims. Additionally, IBNR estimates comprise the majority of our liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in claims reporting and resolution patterns, third party recoveries, insurance industry practices, the regulatory environment, and legal precedent. State regulations vary, but construction defect claims are typically reported and resolved over an extended period, often exceeding ten years. Changes in the frequency and timing of reported claims and estimates of specific claim values can impact the underlying inputs and trends utilized in the actuarial analyses, which could have a material impact on the recorded reserves. Additionally, the amount of insurance coverage available for each policy period also impacts our recorded reserves. Because of the inherent uncertainty in estimating future losses and the timing of such losses related to these claims, actual costs could differ significantly from estimated costs. Adjustments to reserves are recorded in the period in which the change in estimate occurs. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Other Expense (Income), Net | Other expense, net consists of the following ($000’s omitted): Three Months Ended March 31, 2021 2020 Write-offs of deposits and pre-acquisition costs $ (1,368) $ (4,332) Amortization of intangible assets (4,992) (4,557) Interest income 631 3,807 Interest expense (135) (797) Equity in earnings of unconsolidated entities 827 567 Miscellaneous, net 2,398 2,788 Total other expense, net $ (2,639) $ (2,524) |
Schedule of Earnings Per Share | The following table presents the earnings per common share (000's omitted, except per share data): Three Months Ended March 31, 2021 2020 Numerator: Net income $ 304,107 $ 203,711 Less: earnings distributed to participating securities (298) (273) Less: undistributed earnings allocated to participating securities (2,154) (1,537) Numerator for basic earnings per share $ 301,655 $ 201,901 Add back: undistributed earnings allocated to participating securities 2,154 1,537 Less: undistributed earnings reallocated to participating securities (2,149) (1,530) Numerator for diluted earnings per share $ 301,660 $ 201,908 Denominator: Basic shares outstanding 265,407 270,000 Effect of dilutive securities 605 1,218 Diluted shares outstanding 266,012 271,218 Earnings per share: Basic $ 1.14 $ 0.75 Diluted $ 1.13 $ 0.74 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted): March 31, 2021 December 31, 2020 Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities Interest rate lock commitments $ 17,374 $ 126 $ 16,179 $ 18 Forward contracts 14,011 295 501 5,937 Whole loan commitments 1,499 132 168 666 $ 32,884 $ 553 $ 16,848 $ 6,621 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Major components of inventory were as follows ($000’s omitted): March 31, December 31, Homes under construction $ 3,594,406 $ 3,086,740 Land under development 3,913,349 4,137,318 Raw land 467,456 497,740 $ 7,975,211 $ 7,721,798 |
Capitalized Interest Rollforward | Information related to interest capitalized into inventory is as follows ($000’s omitted): Three Months Ended March 31, 2021 2020 Interest in inventory, beginning of period $ 193,409 $ 210,383 Interest capitalized 34,627 39,913 Interest expensed (34,684) (36,871) Interest in inventory, end of period $ 193,352 $ 213,425 |
Schedule Of Company Interests In Land Option Agreements | The following provides a summary of our interests in land option agreements as of March 31, 2021 and December 31, 2020 ($000’s omitted): March 31, 2021 December 31, 2020 Deposits and Remaining Purchase Deposits and Remaining Purchase Land options with VIEs $ 142,771 $ 1,844,131 $ 126,900 $ 1,586,551 Other land options 177,049 2,460,589 164,964 2,187,017 $ 319,820 $ 4,304,720 $ 291,864 $ 3,773,568 |
Schedule Of Impairment Losses | We recorded the following land-related charges ($000's omitted): Three Months Ended March 31, Statement of Operations Classification 2021 2020 Land impairments Home sale cost of revenues $ — $ 5,386 Net realizable value ("NRV") adjustments - land held for sale Land sale and other cost of revenues — 11 Write-offs of deposits and pre-acquisition costs Other expense, net 1,368 4,332 $ 1,368 $ 9,729 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Components of Reportable Segments | For reporting purposes, our Homebuilding operations are aggregated into six reportable segments: Northeast: Connecticut, Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia Southeast: Georgia, North Carolina, South Carolina, Tennessee Florida: Florida Midwest: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio Texas: Texas West: Arizona, California, Nevada, New Mexico, Washington |
Operating Data By Reporting Segment | Operating Data by Segment Three Months Ended March 31, 2021 2020 Revenues: Northeast $ 176,467 $ 162,434 Southeast 436,779 382,394 Florida 625,241 506,689 Midwest 366,814 292,169 Texas 374,121 344,738 West 644,247 552,006 2,623,669 2,240,430 Financial Services 106,122 54,550 Consolidated revenues $ 2,729,791 $ 2,294,980 Income (loss) before income taxes: Northeast $ 25,894 $ 18,609 Southeast 71,322 54,744 Florida (a) 101,208 55,333 Midwest 52,864 31,462 Texas 65,648 53,595 West 98,832 67,255 Other homebuilding (b) (88,064) (36,780) 327,704 244,218 Financial Services 66,348 19,551 Consolidated income before income taxes $ 394,052 $ 263,769 (a) Includes goodwill impairment charge totaling $20.2 million (see Note 1 ) in the three months ended March 31, 2020. (b) Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the operating segments. Other homebuilding also includes a loss on debt retirement of $61.5 million in the three months ended March 31, 2021 (see Note 4 ). Operating Data by Segment Three Months Ended March 31, 2021 2020 Land-related charges (a) : Northeast $ 116 $ 4,753 Southeast 456 748 Florida 131 522 Midwest 54 777 Texas 527 656 West 84 1,529 Other homebuilding — 744 $ 1,368 $ 9,729 |
Total Assets And Inventory By Reporting Segment | Operating Data by Segment ($000's omitted) March 31, 2021 Homes Under Land Under Raw Land Total Total Northeast $ 384,606 $ 236,846 $ 41,641 $ 663,093 $ 766,691 Southeast 532,643 623,668 74,107 1,230,418 1,346,886 Florida 733,612 890,080 83,806 1,707,498 2,036,755 Midwest 421,833 389,098 16,556 827,487 949,539 Texas 413,218 417,342 114,603 945,163 1,040,459 West 1,053,317 1,123,844 122,283 2,299,444 2,582,835 Other homebuilding (a) 55,177 232,471 14,460 302,108 2,073,987 3,594,406 3,913,349 467,456 7,975,211 10,797,152 Financial Services — — — — 648,589 $ 3,594,406 $ 3,913,349 $ 467,456 $ 7,975,211 $ 11,445,741 Operating Data by Segment ($000's omitted) December 31, 2020 Homes Under Land Under Raw Land Total Total Northeast $ 342,737 $ 203,561 $ 68,865 $ 615,163 $ 712,205 Southeast 465,950 645,408 69,937 1,181,295 1,296,382 Florida 638,394 921,962 116,709 1,677,065 1,967,788 Midwest 364,839 424,169 18,173 807,181 911,984 Texas 354,256 458,893 66,024 879,173 955,436 West 874,673 1,212,730 142,380 2,229,783 2,519,724 Other homebuilding (a) 45,891 270,595 15,652 332,138 3,149,871 3,086,740 4,137,318 497,740 7,721,798 11,513,390 Financial Services — — — — 692,108 $ 3,086,740 $ 4,137,318 $ 497,740 $ 7,721,798 $ 12,205,498 (a) Other homebuilding primarily includes cash and equivalents, capitalized interest, intangibles, deferred tax assets, and other corporate items that are not allocated to the operating segments. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Notes | Our notes payable are summarized as follows ($000’s omitted): March 31, December 31, 4.250% unsecured senior notes due March 2021 (a) $ — $ 425,954 5.500% unsecured senior notes due March 2026 (a) 500,000 700,000 5.000% unsecured senior notes due January 2027 (a) 500,000 600,000 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 Net premiums, discounts, and issuance costs (b) (12,222) (13,750) Total senior notes 1,987,778 2,712,204 Other notes payable 44,159 40,098 Notes payable $ 2,031,937 $ 2,752,302 Estimated fair value $ 2,507,209 $ 3,415,662 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. |
Fair Value Disclosures Fair Val
Fair Value Disclosures Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | Our assets and liabilities measured or disclosed at fair value are summarized below ($000’s omitted): Financial Instrument Fair Value Fair Value March 31, December 31, Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 495,049 $ 564,979 Interest rate lock commitments Level 2 17,248 16,161 Forward contracts Level 2 13,716 (5,436) Whole loan commitments Level 2 1,367 (498) Measured at fair value on a non-recurring basis: House and land inventory Level 3 $ — $ 582 Disclosed at fair value: Cash, cash equivalents, and restricted cash Level 1 $ 1,644,054 $ 2,632,235 Financial Services debt Level 2 270,819 411,821 Senior notes payable Level 2 2,463,050 3,375,564 Other notes payable Level 2 44,159 40,098 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Changes in Warranty Liability | Changes to warranty liabilities were as follows ($000’s omitted): Three Months Ended March 31, 2021 2020 Warranty liabilities, beginning of period $ 82,744 $ 91,389 Reserves provided 17,344 15,039 Payments (15,493) (18,276) Other adjustments (788) 243 Warranty liabilities, end of period $ 83,807 $ 88,395 |
Summary of Changes in Self-Insurance Liability | Changes in these liabilities were as follows ($000's omitted): Three Months Ended March 31, 2021 2020 Balance, beginning of period $ 641,779 $ 709,798 Reserves provided 19,542 18,449 Adjustments to previously recorded reserves (6,082) 1,300 Payments, net (a) (2,171) (10,375) Balance, end of period $ 653,068 $ 719,172 (a) Includes net changes in amounts expected to be recovered from our insurance carriers, which are recorded in other assets (see below). |
Schedule of Future Minimum Lease Payments Required Under Leases | The future minimum lease payments required under our leases as of March 31, 2021 were as follows ($000's omitted): Years Ending December 31, 2021 (a) $ 15,969 2022 22,646 2023 20,567 2024 14,374 2025 9,521 Thereafter 19,578 Total lease payments (b) 102,655 Less: Interest (c) 14,324 Present value of lease liabilities (d) $ 88,331 (a) Remaining payments are for the nine months ending December 31, 2021. (b) Lease payments include options to extend lease terms that are reasonably certain of being exercised. There were $1.7 million of legally binding minimum lease payments for leases signed but not yet commenced at March 31, 2021. (c) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 5.4 years and 5.6%, respectively, at March 31, 2021. |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Jan. 31, 2021 | Jan. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 1,644,054 | $ 1,851,253 | $ 2,632,235 | $ 1,251,456 | ||||
Payments for business acquisitions | 10,400 | 83,200 | ||||||
Goodwill impairment | 0 | (20,190) | ||||||
Customer deposits | 589,634 | 449,474 | ||||||
Contract asset insurance renewals | 39,400 | 38,500 | ||||||
Residential mortgage loans available-for-sale fair value | 495,049 | 564,979 | ||||||
Residential mortgage loans available-for-sale aggregate outstanding principal balance | 481,500 | 539,100 | ||||||
Net gains from the sale of mortgages | $ 77,400 | 30,900 | ||||||
Variability in future cash flows of derivative instruments in days | 60 days | |||||||
Assets In-Scope Under Accounting Standards Codification 326 | $ 186,400 | 176,200 | ||||||
Interest rate lock commitments | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Derivative, notional amount | 598,000 | 367,200 | ||||||
Forward contracts | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Derivative, notional amount | 887,000 | 686,400 | ||||||
Whole loan commitments | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Derivative, notional amount | $ 160,500 | $ 169,600 | ||||||
Innovative Construction Group [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Consideration for business acquisition | $ 104,000 | |||||||
Payments for business acquisitions | $ (10,400) | 83,200 | ||||||
Goodwill | 48,700 | |||||||
Goodwill impairment | $ (20,190) | |||||||
Innovative Construction Group [Member] | Customer Relationships [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible asset acquired | 27,800 | |||||||
Intangible asset, amortization period | 7 years | |||||||
Innovative Construction Group [Member] | Trade Name | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Intangible asset acquired | $ 1,800 | |||||||
Intangible asset, amortization period | 5 years | |||||||
Forecast | Innovative Construction Group [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Payments for business acquisitions | $ 10,400 | |||||||
Revision of Prior Period, Accounting Standards Update, Adjustment [Member] | Retained Earnings | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption (Deprecated 2020-01-31) | $ (700) |
Basis of Presentation (Other Ex
Basis of Presentation (Other Expense (Income), Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Write-offs of deposits and pre-acquisition costs | $ (1,368) | $ (4,332) |
Amortization of intangible assets | (4,992) | (4,557) |
Loss on debt retirement | (61,469) | 0 |
Interest income | 631 | 3,807 |
Interest expense | (135) | (797) |
Equity in earnings of unconsolidated entities | 827 | 567 |
Miscellaneous, net | 2,398 | 2,788 |
Total other expense, net | $ (2,639) | $ (2,524) |
Basis of Presentation (Earnings
Basis of Presentation (Earnings per share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income | $ 304,107 | $ 203,711 |
Less: earnings distributed to participating securities | (298) | (273) |
Less: undistributed earnings allocated to participating securities | (2,154) | (1,537) |
Numerator for basic earnings per share | 301,655 | 201,901 |
Add back: undistributed earnings allocated to participating securities | 2,154 | 1,537 |
Less: undistributed earnings reallocated to participating securities | (2,149) | (1,530) |
Numerator for diluted earnings per share | $ 301,660 | $ 201,908 |
Denominator: | ||
Basic shares outstanding (shares) | 265,407 | 270,000 |
Effect of dilutive securities (shares) | 605 | 1,218 |
Diluted shares outstanding (shares) | 266,012 | 271,218 |
Earnings per share: | ||
Basic earnings (usd per share) | $ 1.14 | $ 0.75 |
Diluted earnings (usd per share) | $ 1.13 | $ 0.74 |
Basis of Presentation (Fair Val
Basis of Presentation (Fair Value Of the Company's Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | $ 32,884 | $ 16,848 |
Accrued and Other Liabilities | 553 | 6,621 |
Interest rate lock commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 17,374 | 16,179 |
Accrued and Other Liabilities | 126 | 18 |
Forward contracts | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 14,011 | 501 |
Accrued and Other Liabilities | 295 | 5,937 |
Whole loan commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 1,499 | 168 |
Accrued and Other Liabilities | $ 132 | $ 666 |
Basis of Presentation Payments
Basis of Presentation Payments to Acquire Businesses, Net of Cash Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Business Acquisitions [Abstract] | ||
Payments for business acquisitions | $ (10,400) | $ (83,200) |
Inventory (Major Components Of
Inventory (Major Components Of Inventory) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Homes under construction | $ 3,594,406 | $ 3,086,740 |
Land under development | 3,913,349 | 4,137,318 |
Raw land | 467,456 | 497,740 |
Total Inventory | $ 7,975,211 | $ 7,721,798 |
Inventory (Information Related
Inventory (Information Related To Interest Capitalized Into Homebuilding Inventory) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Interest in inventory, beginning of period | $ 193,409 | $ 210,383 |
Interest capitalized | 34,627 | 39,913 |
Interest expensed | (34,684) | (36,871) |
Interest in inventory, end of period | $ 193,352 | $ 213,425 |
Inventory (Summary of Interests
Inventory (Summary of Interests in Land Option Agreements) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | $ 319,820 | $ 291,864 |
Remaining Purchase Price | 4,304,720 | 3,773,568 |
Land options with VIEs | ||
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | 142,771 | 126,900 |
Remaining Purchase Price | 1,844,131 | 1,586,551 |
Other land options | ||
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | 177,049 | 164,964 |
Remaining Purchase Price | $ 2,460,589 | $ 2,187,017 |
Inventory Inventory (Summary of
Inventory Inventory (Summary of Land-related Charges) (Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Land impairments | $ 0 | $ 5,386 |
Net realizable value adjustments (NRV) - land held for sale | 0 | 11 |
Write-offs of deposits and pre-acquisition costs | 1,368 | 4,332 |
Total land-related charges | $ 1,368 | $ 9,729 |
Inventory - Fair Value Unobserv
Inventory - Fair Value Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Impairment Charges | $ 0 | $ 5,386 |
Segment Information Narrative (
Segment Information Narrative (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 6 |
Segment Information (Operating
Segment Information (Operating Data By Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income before Income Taxes: | ||
Income before income taxes | $ 394,052 | $ 263,769 |
Goodwill impairment | 0 | 20,190 |
Loss on debt retirement | 61,469 | 0 |
Operating Segments | ||
Revenues: | ||
Total revenues | 2,729,791 | 2,294,980 |
Operating Segments | Northeast | ||
Revenues: | ||
Revenues | 176,467 | 162,434 |
Income before Income Taxes: | ||
Income before income taxes | 25,894 | 18,609 |
Operating Segments | Southeast | ||
Revenues: | ||
Revenues | 436,779 | 382,394 |
Income before Income Taxes: | ||
Income before income taxes | 71,322 | 54,744 |
Operating Segments | Florida | ||
Revenues: | ||
Revenues | 625,241 | 506,689 |
Income before Income Taxes: | ||
Income before income taxes | 101,208 | 55,333 |
Operating Segments | Midwest | ||
Revenues: | ||
Revenues | 366,814 | 292,169 |
Income before Income Taxes: | ||
Income before income taxes | 52,864 | 31,462 |
Operating Segments | Texas | ||
Revenues: | ||
Revenues | 374,121 | 344,738 |
Income before Income Taxes: | ||
Income before income taxes | 65,648 | 53,595 |
Operating Segments | West | ||
Revenues: | ||
Revenues | 644,247 | 552,006 |
Income before Income Taxes: | ||
Income before income taxes | 98,832 | 67,255 |
Operating Segments | Other homebuilding | ||
Income before Income Taxes: | ||
Income before income taxes | (88,064) | (36,780) |
Operating Segments | Home sales | ||
Income before Income Taxes: | ||
Income before income taxes | 327,704 | 244,218 |
Operating Segments | Financial Services | ||
Income before Income Taxes: | ||
Income before income taxes | 66,348 | 19,551 |
Total Homebuilding | Operating Segments | ||
Revenues: | ||
Revenues | 2,623,669 | 2,240,430 |
Financial Services | Operating Segments | Home sales | ||
Revenues: | ||
Revenues | $ 106,122 | 54,550 |
Innovative Construction Group [Member] | ||
Income before Income Taxes: | ||
Goodwill impairment | $ 20,190 |
Segment Information (Land-Relat
Segment Information (Land-Related Charges by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | $ 1,368 | $ 9,729 |
Operating Segments | Northeast | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 116 | 4,753 |
Operating Segments | Southeast | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 456 | 748 |
Operating Segments | Florida | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 131 | 522 |
Operating Segments | Midwest | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 54 | 777 |
Operating Segments | Texas | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 527 | 656 |
Operating Segments | West | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | 84 | 1,529 |
Operating Segments | Other homebuilding | ||
Restructuring Cost and Reserve [Line Items] | ||
Land-related charges | $ 0 | $ 744 |
Segment Information (Total Asse
Segment Information (Total Assets And Inventory By Reportable Segment) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information | ||
Homes under construction | $ 3,594,406 | $ 3,086,740 |
Land under development | 3,913,349 | 4,137,318 |
Raw land | 467,456 | 497,740 |
Total Inventory | 7,975,211 | 7,721,798 |
Total Assets | 11,445,741 | 12,205,498 |
Operating Segments | Northeast | ||
Segment Reporting Information | ||
Homes under construction | 384,606 | 342,737 |
Land under development | 236,846 | 203,561 |
Raw land | 41,641 | 68,865 |
Total Inventory | 663,093 | 615,163 |
Total Assets | 766,691 | 712,205 |
Operating Segments | Southeast | ||
Segment Reporting Information | ||
Homes under construction | 532,643 | 465,950 |
Land under development | 623,668 | 645,408 |
Raw land | 74,107 | 69,937 |
Total Inventory | 1,230,418 | 1,181,295 |
Total Assets | 1,346,886 | 1,296,382 |
Operating Segments | Florida | ||
Segment Reporting Information | ||
Homes under construction | 733,612 | 638,394 |
Land under development | 890,080 | 921,962 |
Raw land | 83,806 | 116,709 |
Total Inventory | 1,707,498 | 1,677,065 |
Total Assets | 2,036,755 | 1,967,788 |
Operating Segments | Midwest | ||
Segment Reporting Information | ||
Homes under construction | 421,833 | 364,839 |
Land under development | 389,098 | 424,169 |
Raw land | 16,556 | 18,173 |
Total Inventory | 827,487 | 807,181 |
Total Assets | 949,539 | 911,984 |
Operating Segments | Texas | ||
Segment Reporting Information | ||
Homes under construction | 413,218 | 354,256 |
Land under development | 417,342 | 458,893 |
Raw land | 114,603 | 66,024 |
Total Inventory | 945,163 | 879,173 |
Total Assets | 1,040,459 | 955,436 |
Operating Segments | West | ||
Segment Reporting Information | ||
Homes under construction | 1,053,317 | 874,673 |
Land under development | 1,123,844 | 1,212,730 |
Raw land | 122,283 | 142,380 |
Total Inventory | 2,299,444 | 2,229,783 |
Total Assets | 2,582,835 | 2,519,724 |
Operating Segments | Other homebuilding | ||
Segment Reporting Information | ||
Homes under construction | 55,177 | 45,891 |
Land under development | 232,471 | 270,595 |
Raw land | 14,460 | 15,652 |
Total Inventory | 302,108 | 332,138 |
Total Assets | 2,073,987 | 3,149,871 |
Operating Segments | Home sales | ||
Segment Reporting Information | ||
Homes under construction | 3,594,406 | 3,086,740 |
Land under development | 3,913,349 | 4,137,318 |
Raw land | 467,456 | 497,740 |
Total Inventory | 7,975,211 | 7,721,798 |
Total Assets | 10,797,152 | 11,513,390 |
Operating Segments | Financial Services | ||
Segment Reporting Information | ||
Homes under construction | 0 | 0 |
Land under development | 0 | 0 |
Raw land | 0 | 0 |
Total Inventory | 0 | 0 |
Total Assets | $ 648,589 | $ 692,108 |
Debt (Summary of Senior Notes)
Debt (Summary of Senior Notes) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Net premiums, discounts, and issuance costs (b) | $ (12,222) | $ (13,750) |
Total senior notes | 1,987,778 | 2,712,204 |
Other notes payable | 44,159 | 40,098 |
Notes payable | 2,031,937 | 2,752,302 |
Estimated fair value | $ 2,507,209 | 3,415,662 |
Senior Notes | 4.250% unsecured senior notes due March 2021 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.25% | |
Face amount | $ 0 | 425,954 |
Senior Notes | 5.500% unsecured senior notes due March 2026 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.50% | |
Face amount | $ 500,000 | 700,000 |
Senior Notes | 5.000% unsecured senior notes due January 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.00% | |
Face amount | $ 500,000 | 600,000 |
Senior Notes | 7.875% unsecured senior notes due June 2032 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.875% | |
Face amount | $ 300,000 | 300,000 |
Senior Notes | 6.375% unsecured senior notes due May 2033 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.375% | |
Face amount | $ 400,000 | 400,000 |
Senior Notes | 6.000% unsecured senior notes due February 2035 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.00% | |
Face amount | $ 300,000 | $ 300,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | May 25, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Other notes payable | $ 44,159,000 | $ 40,098,000 | |||
Debt instrument term | 3 years | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,000,000,000 | ||||
Maximum borrowing capacity | 1,500,000,000 | ||||
Borrowings under revolving credit facility | 0 | $ 700,000,000 | |||
Repayments under revolving credit facility | 700,000,000 | ||||
Letters of credit outstanding | 235,700,000 | 249,700,000 | |||
Line of credit facility, remaining borrowing capacity | 764,300,000 | 750,300,000 | |||
Long-term line of credit | 270,819,000 | 411,821,000 | |||
2026 Notes | |||||
Debt Instrument [Line Items] | |||||
Repayments of Debt | 200,000,000 | ||||
2027 Notes | |||||
Debt Instrument [Line Items] | |||||
Repayments of Debt | 100,000,000 | ||||
Revolving Credit Facility Accordion Feature | |||||
Debt Instrument [Line Items] | |||||
Maximum additional issuance | 500,000,000 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowings under revolving credit facility | $ 700,000,000 | ||||
Line of credit, current | 0 | ||||
Line of Credit | Financial Services | |||||
Debt Instrument [Line Items] | |||||
Long-term line of credit | 270,800,000 | $ 411,800,000 | |||
Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 280,000,000 | ||||
Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | Forecast | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 375,000,000 | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.17% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 26, 2021 | |
Class of Stock [Line Items] | |||
Dividends | $ 37,325 | $ 32,609 | |
Payments for repurchase of common stock | $ 153,703 | $ 95,676 | |
Subsequent Event | |||
Class of Stock [Line Items] | |||
Increase in share repurchase authorization | $ 1,000,000 | ||
Share repurchase plan | |||
Class of Stock [Line Items] | |||
Share repurchases (shares) | 3.3 | 2.8 | |
Payments for repurchase of common stock | $ 153,700 | $ 95,700 | |
Remaining value of stock repurchase programs authorization | 201,200 | ||
Shares withheld to pay taxes | |||
Class of Stock [Line Items] | |||
Payments for repurchase of common stock | $ 10,600 | $ 14,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax | 22.80% | 22.80% | |
Deferred tax assets, net | $ 21.3 | $ 32.7 | |
Gross unrecognized tax benefits | 33.5 | 30.9 | |
Accrued interest and penalties on unrecognized tax benefits | $ 3.2 | $ 2.8 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Disclosed at fair value: | ||
Other notes payable | $ 44,159 | $ 40,098 |
Level 2 | ||
Disclosed at fair value: | ||
Financial Services debt | 270,819 | 411,821 |
Senior notes payable | 2,463,050 | 3,375,564 |
Level 1 | ||
Disclosed at fair value: | ||
Cash, cash equivalents, and restricted cash | 1,644,054 | 2,632,235 |
Fair Value, Measurements, Recurring | Residential mortgage loans available-for-sale | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Assets, fair value | 495,049 | 564,979 |
Measured at fair value on a non-recurring basis: | ||
Assets, fair value | 495,049 | 564,979 |
Fair Value, Measurements, Recurring | Interest rate lock commitments | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Assets, fair value | 17,248 | 16,161 |
Measured at fair value on a non-recurring basis: | ||
Assets, fair value | 17,248 | 16,161 |
Fair Value, Measurements, Recurring | Forward contracts | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Liabilities, fair value | 13,716 | (5,436) |
Fair Value, Measurements, Recurring | Whole loan commitments | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Liabilities, fair value | 1,367 | (498) |
Fair Value, Measurements, Nonrecurring | House and land inventory | Level 3 | ||
Measured at fair value on a recurring basis: | ||
Assets, fair value | 0 | 582 |
Measured at fair value on a non-recurring basis: | ||
Assets, fair value | $ 0 | $ 582 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($)claim | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding | $ 235,700 | $ 249,700 | ||
Surety bonds outstanding | $ 1,600,000 | 1,500,000 | ||
Maximum product warranty in years | 10 years | |||
Number of individual claims managed | claim | 1,000 | |||
Self-insurance liabilities | $ 653,068 | $ 719,172 | 641,779 | $ 709,798 |
Adjustments to previously recorded reserves | (6,082) | 1,300 | ||
ROU assets | 69,000 | 71,300 | ||
Operating lease liabilities | 88,331 | 91,400 | ||
Additional ROU assets under operating leases | 1,100 | 9,600 | ||
Payments on lease liabilities | 5,300 | 5,900 | ||
Total lease expense | 10,200 | 9,900 | ||
Variable lease costs | 1,900 | 1,900 | ||
Short-term lease costs | 2,900 | $ 2,200 | ||
Other Assets | ||||
Loss Contingencies [Line Items] | ||||
Recorded insurance receivables | $ 73,800 | $ 69,500 |
Commitments and Contingencies_3
Commitments and Contingencies (Changes To Warranty Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liabilities, beginning of period | $ 82,744 | $ 91,389 |
Reserves provided | 17,344 | 15,039 |
Payments | (15,493) | (18,276) |
Other adjustments | (788) | 243 |
Warranty liabilities, end of period | $ 83,807 | $ 88,395 |
Commitments and Contingencies_4
Commitments and Contingencies (Changes in Self-insurance Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Changes in Self-insurance Liability [Roll Forward] | |||
Balance, beginning of period | $ 641,779 | $ 709,798 | |
Reserves provided | 19,542 | 18,449 | |
Adjustments to previously recorded reserves | (6,082) | 1,300 | |
Payments, net | (2,171) | (10,375) | |
Balance, end of period | $ 653,068 | $ 719,172 | |
Incurred but not reported percentage of liability reserves | 67.00% | 68.00% |
Commitments and Contingencies_5
Commitments and Contingencies (Future Minimum Lease Payments Required Under Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
2020 | $ 15,969 | ||
2021 | 22,646 | ||
2022 | 20,567 | ||
2023 | 14,374 | ||
2024 | 9,521 | ||
Thereafter | 19,578 | ||
Total lease payments | 102,655 | ||
Less: Interest | 14,324 | ||
Present value of lease liabilities | 88,331 | $ 91,400 | |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 1,700 | ||
Weighted average remaining lease term | 5 years 4 months 24 days | ||
Weighted average discount rate | 5.60% | ||
Variable lease costs | $ 1,900 | $ 1,900 |
Commitments and Contingencies_6
Commitments and Contingencies (Increase (Decrease) in Liability for Claims and Claims Adjustment Expense Reserve) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) in Liability for Claims and Claims Adjustment Expense Reserve [Abstract] | ||
Adjustments to previously recorded reserves | $ (6,082) | $ 1,300 |