0001580670-19-000087 | 10-Q | XBRL Viewer

Convertible Notes (Details)	1 Months Ended	9 Months Ended
Convertible Notes (Details)	Nov. 30, 2014 USD ($)	Sep. 30, 2019 USD ($) $ / shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ 169,000	$ 3,588,000
Convertible Debt
Debt Instrument [Line Items]
Debt conversion, original debt amount		$ 85,000,000.0
Stated interest rate on convertible note		4.25%
Line of credit facility, expiration date		Nov. 15, 2019
Convertible notes, fair value	$ 76,500,000	$ 69,908,000		$ 67,787,000
Adjustments to APIC, equity component of convertible debt	5,500,000
Adjustments to APIC, deferred tax liability	$ 3,000,000.0
Convertible notes, conversion ratio		46.4792
Convertible notes, amount in multiples that may be converted		$ 1,000
Convertible notes, conversion price \| $ / shares		$ 21.52
Convertible debt		$ 70,000,000.0

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 37,030	$ 46,624
Accounts receivable	45,431	42,836
Real estate inventory	1,480,629	1,228,256
Pre-acquisition costs and deposits	40,137	45,752
Property and equipment, net	1,631	1,432
Other assets	16,528	15,765
Deferred tax assets, net	2,789	2,790
Goodwill and intangible assets, net	12,018	12,018
Total assets	1,636,193	1,395,473
LIABILITIES AND EQUITY
Accounts payable	29,004	9,241
Accrued expenses and other liabilities	78,778	76,555
Notes payable	751,364	653,734
Total liabilities	859,146	739,530
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, par value $0.01, 250,000,000 shares authorized, 23,988,956 shares issued and 22,949,956 shares outstanding as of September 30, 2019 and 23,746,385 shares issued and 22,707,385 shares outstanding as of December 31, 2018	240	237
Additional paid-in capital	249,351	241,988
Retained earnings	545,512	431,774
Treasury stock, at cost, 1,039,000 shares	(18,056)	(18,056)
Total equity	777,047	655,943
Total liabilities and equity	$ 1,636,193	$ 1,395,473

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock
Beginning Balance (in shares) at Dec. 31, 2017		22,845,580
Beginning Balance at Dec. 31, 2017	$ 489,846	$ 228	$ 229,680	$ 276,488	$ (16,550)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	27,302			27,302
Issuance of shares in settlement of Convertible Notes (in shares)		486,679
Issuance of shares in settlement of Convertible Notes	(470)	$ 5	(475)
Issuance of restricted stock units in settlement of accrued bonuses	181		181
Compensation expense for equity awards	1,351		1,351
Stock issued under employee incentive plans (in shares)		282,887
Stock issued under employee incentive plans	700	$ 3	697
Ending Balance (in shares) at Mar. 31, 2018		23,615,146
Ending Balance at Mar. 31, 2018	518,910	$ 236	231,434	303,790	(16,550)
Beginning Balance (in shares) at Dec. 31, 2017		22,845,580
Beginning Balance at Dec. 31, 2017	489,846	$ 228	229,680	276,488	(16,550)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	112,633
Ending Balance (in shares) at Sep. 30, 2018		23,717,153
Ending Balance at Sep. 30, 2018	612,419	$ 237	239,611	389,121	(16,550)
Beginning Balance (in shares) at Mar. 31, 2018		23,615,146
Beginning Balance at Mar. 31, 2018	518,910	$ 236	231,434	303,790	(16,550)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	47,608			47,608
Compensation expense for equity awards	1,419		1,419
Stock issued under employee incentive plans (in shares)		17,845
Stock issued under employee incentive plans	745	$ 0	745
Ending Balance (in shares) at Jun. 30, 2018		23,632,991
Ending Balance at Jun. 30, 2018	568,682	$ 236	233,598	351,398	(16,550)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 37,723			37,723
Issuance of shares (in shares)	70,746
Issuance of shares	$ 1
Issuance of restricted stock units in settlement of accrued bonuses	4,000		3,999
Compensation expense for equity awards	1,402		1,402
Stock issued under employee incentive plans (in shares)		13,416
Stock issued under employee incentive plans	612	$ 0	612
Ending Balance (in shares) at Sep. 30, 2018		23,717,153
Ending Balance at Sep. 30, 2018	612,419	$ 237	239,611	389,121	(16,550)
Beginning Balance (in shares) at Dec. 31, 2018		23,746,385
Beginning Balance at Dec. 31, 2018	655,943	$ 237	241,988	431,774	(18,056)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	18,334			18,334
Issuance of restricted stock units in settlement of accrued bonuses	217		217
Compensation expense for equity awards	1,783		1,783
Stock issued under employee incentive plans (in shares)		218,345
Stock issued under employee incentive plans	649	$ 2	647
Ending Balance (in shares) at Mar. 31, 2019		23,964,730
Ending Balance at Mar. 31, 2019	676,926	$ 239	244,635	450,108	(18,056)
Beginning Balance (in shares) at Dec. 31, 2018		23,746,385
Beginning Balance at Dec. 31, 2018	655,943	$ 237	241,988	431,774	(18,056)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	113,738
Ending Balance (in shares) at Sep. 30, 2019		23,988,956
Ending Balance at Sep. 30, 2019	777,047	$ 240	249,351	545,512	(18,056)
Beginning Balance (in shares) at Mar. 31, 2019		23,964,730
Beginning Balance at Mar. 31, 2019	676,926	$ 239	244,635	450,108	(18,056)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	46,055			46,055
Compensation expense for equity awards	1,639		1,639
Stock issued under employee incentive plans (in shares)		14,153
Stock issued under employee incentive plans	615	$ 1	614
Ending Balance (in shares) at Jun. 30, 2019		23,978,883
Ending Balance at Jun. 30, 2019	725,235	$ 240	246,888	496,163	(18,056)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	49,349			49,349
Compensation expense for equity awards	1,759		1,759
Stock issued under employee incentive plans (in shares)		10,073
Stock issued under employee incentive plans	704	$ 0	704
Ending Balance (in shares) at Sep. 30, 2019		23,988,956
Ending Balance at Sep. 30, 2019	$ 777,047	$ 240	$ 249,351	$ 545,512	$ (18,056)

Revenues

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues Disclosure

REVENUES

Revenue Recognition

Revenues from home sales are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues from home sales are recorded at the time each home sale is closed, title and possession are transferred to the customer and we have no significant continuing involvement with the home. Home sales discounts and incentives granted to customers, which are related to the customers’ closing costs that we pay on the customers’ behalf, are recorded as a reduction of revenue in our consolidated financial statements of operations.

The following table presents our home sales revenues disaggregated by revenue stream (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Retail home sales revenues	$	457,124	$	353,594	$	1,182,039	$	1,017,952
Other	25,957		26,775		50,466		61,288
Total home sales revenues	$	483,081	$	380,369	$	1,232,505	$	1,079,240

The following table presents our home sales revenues disaggregated by geography, based on our determined reportable segments in Note 13 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Central	$	193,860	$	151,673	$	507,951	$	441,138
Northwest	92,242		72,485		207,492		214,891
Southeast	91,452		73,507		221,686		178,984
Florida	44,084		38,750		121,183		136,211
West	61,443		43,954		174,193		108,016
Total home sales revenues	$	483,081	$	380,369	$	1,232,505	$	1,079,240

Home Sales Revenues

We generate revenues primarily by delivering move-in ready entry-level and move-up spec homes sold under our LGI Homes brand and our luxury series spec homes sold under our Terrata Homes brand.

Retail homes sold under both our LGI Homes brand and Terrata Homes brand focus on providing move-in ready homes with standardized features within favorable markets that meet certain demographic and economic conditions. Our LGI Homes brand primarily markets to entry-level or first-time homebuyers, while our Terrata Homes brand primarily markets to move-up homebuyers.

Our other revenues are composed of our wholesale home sales under our LGI Homes brand and Terrata Homes brand in existing markets. Wholesale homes are primarily sold under a bulk sales agreement and focus on providing move-in ready homes with standardized features to real estate investors that will ultimately use the single-family homes as rental properties.

Performance Obligations

Our contracts with customers include a single performance obligation to transfer a completed home to the customer. We generally determine selling price per home on the expected cost plus margin. Our contracts contain no significant financing terms as customers who finance do so through a third party. Performance obligations are satisfied at a moment in time when the home is complete and control of the asset is transferred to the customer at closing. Home sales proceeds are generally received from the title company within a few business days after closing.

Sales and broker commissions are incremental costs incurred to obtain a contract with a customer that would not have been incurred if the contract had not been obtained. Sales and broker commissions are expensed upon fulfillment of a home closing. Advertising costs are costs to obtain a contract that would have been incurred regardless of whether the contract was obtained and are recognized as an expense when incurred. Sales and broker commissions and advertising costs are recorded within sales and marketing expense presented in our consolidated statements of operations as selling expenses.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation Disclosures

STOCK-BASED COMPENSATION

Non-performance Based Restricted Stock Units

The following table summarizes the activity of our time-vested restricted stock units (“RSUs”):



	Nine Months Ended September 30,
	2019				2018
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Beginning balance	171,055		$	39.04	175,100		$	27.66
Granted	49,836		$	57.49	40,844		$	63.30
Vested	(42,823	)	$	22.27	(36,486	)	$	15.70
Forfeited	(12,733	)	$	47.21	(5,941	)	$	34.31
Ending balance	165,335		$	48.35	173,517		$	38.34

We recognized $0.5 million of stock-based compensation expense related to outstanding RSUs for each of the three months ended September 30, 2019 and 2018. We recognized $1.6 million and $1.5 million of stock-based compensation expense related to outstanding RSUs for the nine months ended September 30, 2019 and 2018, respectively. Generally, the RSUs cliff vest on the third anniversary of the grant date and can only be settled in shares of our common stock. At September 30, 2019, we had unrecognized compensation cost of $4.1 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.0 years.

Performance-Based Restricted Stock Units

The Compensation Committee of our Board of Directors has granted awards of Performance-Based RSUs (“PSUs”) under the Amended and Restated LGI Homes, Inc. 2013 Equity Incentive Plan to certain members of senior management based on the three-year performance cycles. The PSUs provide for shares of our common stock to be issued based on the attainment of certain performance metrics over the applicable three-year periods. The number of shares of our common stock that may be issued to the recipients for the PSUs range from 0% to 200% of the target amount depending on actual results as compared to the target performance metrics. The terms of the PSUs provide that the payouts will be capped at 100% of the target number of PSUs granted if absolute total stockholder return is negative during the performance period, regardless of EPS performance; this market condition applies for amounts recorded above target. The compensation expense associated with the PSU grants is determined using the derived grant date fair value, based on a third-party valuation analysis, and expensed over the applicable period. The PSUs vest upon the determination date for the actual results at the end of the three-year period and require that the recipients continue to be employed by us through the determination date. The PSUs can only be settled in shares of our common stock.

The following table summarizes the activity of our PSUs for the nine months ended September 30, 2019:



Period Granted	Performance Period	Target PSUs Outstanding at December 31, 2018	Target PSUs Granted	Target PSUs Vested		Target PSUs Forfeited		Target PSUs Outstanding at September 30, 2019	Weighted Average Grant Date Fair Value
2016	2016 - 2018	83,656	—	(83,656	)	—		—	$	21.79
2017	2017 - 2019	108,247	—	—		(3,477	)	104,770	$	31.64
2018	2018 - 2020	61,898	—	—		(1,858	)	60,040	$	64.60
2019	2019 - 2021	—	83,367	—		(2,125	)	81,242	$	56.49
Total		253,801	83,367	(83,656	)	(7,460	)	246,052

At September 30, 2019, management estimates that the recipients will receive approximately 100%, 116% and 185% of the 2019, 2018 and 2017 target number of PSUs, respectively, at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics. We recognized $1.1 million and $0.9 million of total stock-based compensation expense related to outstanding PSUs for the three months ended September 30, 2019 and 2018, respectively. We recognized $3.2 million and $2.7 million of total stock-based compensation expense related to outstanding PSUs for the nine months ended September 30, 2019 and 2018, respectively. PSUs granted in 2016 vested on March 15, 2019 at 200% of the target amount, and 167,312 shares of our common stock were issued upon such vesting. At September 30, 2019, we had unrecognized

compensation cost of $6.6 million, based on the probable amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 1.9 years.

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator (in thousands):
Net Income (Numerator for basic and dilutive earnings per share)	$	49,349	$	37,723	$	113,738	$	112,633
Denominator:
Basic weighted average shares outstanding	22,939,907		22,658,457		22,870,948		22,236,018
Effect of dilutive securities:
Convertible Notes - treasury stock method	2,336,017		1,978,770		2,223,443		2,128,854
Stock-based compensation units	246,022		259,342		235,070		278,010
Diluted weighted average shares outstanding	25,521,946		24,896,569		25,329,461		24,642,882

Basic earnings per share	$	2.15	$	1.66	$	4.97	$	5.07
Diluted earnings per share	$	1.93	$	1.52	$	4.49	$	4.57
Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share	926		2,245		3,013		9,744

Related Party Transactions (Details) $ in Millions	9 Months Ended
Related Party Transactions (Details) $ in Millions	Sep. 30, 2019 USD ($) lot	Dec. 31, 2018
Related Party Transaction [Line Items]
Total lots under option contract to purchase	17,044	22,820
FLORIDA \| Affiliated Entity
Related Party Transaction [Line Items]
Total lots under option contract to purchase \| lot	198
Total purchase price for lots under option contract	$ 6.9
Non-refundable deposit related to option contract	$ 0.5
lgih_PurchasedLotsPreviouslyUnderPurchaseOptions \| lot	58
lgih_LandunderPurchaseOptionsPurchasePrice	$ 2.1
Minimum \| FLORIDA \| Affiliated Entity
Related Party Transaction [Line Items]
Annual price escalation rate	3.00%
Maximum \| FLORIDA \| Affiliated Entity
Related Party Transaction [Line Items]
Annual price escalation rate	6.00%

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consist of the following (in thousands):



	September 30, 2019		December 31, 2018
Notes payable under the Credit Agreement ($550.0 million revolving credit facility at September 30, 2019) maturing on May 31, 2022; interest paid monthly at LIBOR plus 2.50%; net of debt issuance costs of approximately $4.6 million and $3.7 million at September 30, 2019 and December 31, 2018, respectively	$	385,735	$	290,131
4.25% Convertible Notes due November 15, 2019; interest paid semi-annually at 4.25%; net of debt issuance costs of approximately $0.1 million and $0.4 million at September 30, 2019 and December 31, 2018, respectively; and approximately $0.2 million and $1.3 million in unamortized discount at September 30, 2019 and December 31, 2018, respectively	69,768		68,251
6.875% Senior Notes due July 15, 2026; interest paid semi-annually at 6.875%; net of debt issuance costs of approximately $2.3 million and $2.5 at September 30, 2019 and December 31, 2018, respectively; and approximately $1.8 million and $2.1 million in unamortized discount at September 30, 2019 and December 31, 2018, respectively	295,861		295,352
Total notes payable	$	751,364	$	653,734

Schedule of Interest Activity for Notes Payable

Interest activity, including other financing costs, for notes payable for the periods presented is as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Interest incurred	$	10,600		$	10,823		$	34,125		$	26,803
Less: Amounts capitalized	(10,600		)	(10,823		)	(34,125		)	(26,803		)
Interest expense	$	—		$	—		$	—		$	—

Cash paid for interest	$	14,673		$	4,517		$	35,705		$	17,786

Commitments and Contingencies Future Minimum Operating Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 251
Lessee, Operating Lease, Liability, Payments, Due Year Two	1,004
Lessee, Operating Lease, Liability, Payments, Due Year Three	1,003
Lessee, Operating Lease, Liability, Payments, Due Year Four	851
Lessee, Operating Lease, Liability, Payments, Due Year Five	722
Lessee, Operating Lease, Liability, Payments, Due after Year Five	2,838
Lessee, Operating Lease, Liability, Payments, Due	6,669
Lease amount representing interest	1,309
Operating Lease, Liability	$ 5,360	$ 0

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosures

COMMITMENTS AND CONTINGENCIES

Contingencies

In the ordinary course of doing business, we are subject to claims or proceedings from time to time relating to the purchase, development and sale of real estate and homes and other aspects of our homebuilding operations. Management believes that these claims include usual obligations incurred by real estate developers and residential home builders in the normal course of business. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.

We have provided unsecured environmental indemnities to certain lenders and other counterparties. In each case, we have performed due diligence on the potential environmental risks including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate us to reimburse the guaranteed parties for damages related to environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, we may have recourse against other previous owners. In the ordinary course of doing business, we are subject to regulatory proceedings from time to time related to environmental and other matters. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows.

Land Deposits

We have land purchase contracts, generally through cash deposits, for the right to purchase land or lots at a future point in time with predetermined terms. We do not have title to the property, and obligations with respect to the land purchase contracts are generally limited to the forfeiture of the related nonrefundable cash deposits. The following is a summary of our land purchase deposits included in pre-acquisition costs and deposits (in thousands, except for lot count):



	September 30, 2019		December 31, 2018
Land deposits and option payments	$	37,677	$	40,015
Commitments under the land purchase contracts if the purchases are consummated	$	550,412	$	776,224
Lots under land purchase contracts	17,044		22,820

As of September 30, 2019 and December 31, 2018, approximately $28.5 million and $25.2 million, respectively, of the land deposits are related to purchase contracts to deliver finished lots that are refundable under certain circumstances, such as feasibility or specific performance, and secured by mortgages, or letters of credit or guaranteed by the seller or its affiliates.

Lease Obligations

As described in the “Recently Adopted Accounting Standards” section within Note 1, as of January 1, 2019, we adopted the provisions of ASU 2016-02 and recognized lease obligations and associated ROU assets for our existing non-cancelable leases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have non-cancelable operating leases primarily associated with our corporate and regional office facilities. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as common area costs and property taxes are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets, as included in other assets on the consolidated balance sheets, were $5.1 million as of September 30, 2019. Lease obligations, as included in accrued expenses and other liabilities on the consolidated balance sheets, were $5.4 million as of September 30, 2019.

Operating lease cost, as included in general and administrative expense in our consolidated statements of operations, for the three and nine months ended September 30, 2019 was $0.3 million and $0.9 million, respectively. Cash paid for amounts included in the measurement of lease liabilities for operating leases during the three and nine months ended September 30, 2019 was $0.3 million and $0.9 million, respectively. As of September 30, 2019, the weighted-average discount rate was 5.84% and our weighted-average remaining life was 7.6 years. The Company does not have any significant lease contracts that have not yet commenced at September 30, 2019.

The table below shows the future minimum payments under non-cancelable operating leases at September 30, 2019 (in thousands):



Year Ending December 31,	Operating leases
2019	$	251
2020	1,004
2021	1,003
2022	851
2023	722
Thereafter	2,838
Total	6,669
Lease amount representing interest	(1,309		)
Present value of lease liabilities	$	5,360

Bonding and Letters of Credit

We have outstanding letters of credit and performance and surety bonds totaling $100.8 million (including $13.2 million of letters of credit issued under the Credit Agreement) and $77.5 million at September 30, 2019 and December 31, 2018, respectively, related to our obligations for site improvements at various projects. Management does not believe that draws upon the letters of credit, surety bonds or financial guarantees if any, will have a material effect on our consolidated financial position, results of operations or cash flows.

Investment in Unconsolidated Entity

During the three months ended September 30, 2019, we became a limited partner in a real estate investment fund with a maximum $30.0 million commitment, commencing July 24, 2019. The term of the commitment is eight years and includes renewals of up to two additional years. As of September 30, 2019, we have contributed a total of $1.1 million into the unconsolidated entity for the use of investing in certain real estate transactions.

Segment Information (Details)	3 Months Ended		9 Months Ended
Segment Information (Details)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) business	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Assets	$ 1,636,193,000		$ 1,636,193,000		$ 1,395,473,000
Home sales revenues	483,081,000	$ 380,369,000	$ 1,232,505,000	$ 1,079,240,000
Number of reporting segments \| business			5
Number of operating segments \| business			7
Net income before income taxes	64,732,000	48,991,000	$ 146,961,000	142,889,000
Pre-acquisition costs and deposits	40,137,000		40,137,000		45,752,000
Central Division
Segment Reporting Information [Line Items]
Assets	588,216,000		588,216,000		569,409,000
Home sales revenues	193,860,000	151,673,000	507,951,000	441,138,000
Net income before income taxes	33,134,000	24,971,000	80,374,000	73,814,000
Northwest Division
Segment Reporting Information [Line Items]
Assets	234,968,000		234,968,000		200,443,000
Home sales revenues	92,242,000	72,485,000	207,492,000	214,891,000
Net income before income taxes	15,064,000	11,161,000	30,293,000	30,291,000
Southeast Division
Segment Reporting Information [Line Items]
Assets	407,231,000		407,231,000		300,758,000
Home sales revenues	91,452,000	73,507,000	221,686,000	178,984,000
Net income before income taxes	8,710,000	7,511,000	14,870,000	19,437,000
Florida Division
Segment Reporting Information [Line Items]
Assets	147,474,000		147,474,000		106,398,000
Home sales revenues	44,084,000	38,750,000	121,183,000	136,211,000
Net income before income taxes	3,161,000	4,522,000	8,928,000	16,079,000
West Division
Segment Reporting Information [Line Items]
Assets	210,355,000		210,355,000		161,514,000
Home sales revenues	61,443,000	43,954,000	174,193,000	108,016,000
Net income before income taxes	6,542,000	4,715,000	16,879,000	9,610,000
Corporate
Segment Reporting Information [Line Items]
Assets	47,949,000		47,949,000		$ 56,951,000
Net income before income taxes	$ (1,879,000)	$ (3,889,000)	$ (4,383,000)	$ (6,342,000)
Operating Segments \| Central Division
Segment Reporting Information [Line Items]
Percentage of operations			41.00%
Intersegment Eliminations
Segment Reporting Information [Line Items]
Home sales revenues			$ 0

Equity	9 Months Ended
Equity	Sep. 30, 2019
Equity [Abstract]
Equity Disclosures	EQUITY Shelf Registration Statement We have an effective shelf registration statement on Form S-3 (Registration No. 333-227012), registering the offering and sale of an indeterminate amount of debt securities, guarantees of debt securities, preferred stock, common stock, warrants, depositary shares, purchase contracts and units that include any of these securities, that was filed on August 24, 2018 with the Securities and Exchange Commission.

Real Estate Inventory (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Real Estate Inventory

Our real estate inventory consists of the following (in thousands):



	September 30,		December 31,
	2019		2018
Land, land under development and finished lots	$	831,448	$	736,402
Information centers	26,857		21,179
Homes in progress	371,838		149,506
Completed homes	250,486		321,169
Total real estate inventory	$	1,480,629	$	1,228,256

Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share Disclosures

EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator (in thousands):
Net Income (Numerator for basic and dilutive earnings per share)	$	49,349	$	37,723	$	113,738	$	112,633
Denominator:
Basic weighted average shares outstanding	22,939,907		22,658,457		22,870,948		22,236,018
Effect of dilutive securities:
Convertible Notes - treasury stock method	2,336,017		1,978,770		2,223,443		2,128,854
Stock-based compensation units	246,022		259,342		235,070		278,010
Diluted weighted average shares outstanding	25,521,946		24,896,569		25,329,461		24,642,882

Basic earnings per share	$	2.15	$	1.66	$	4.97	$	5.07
Diluted earnings per share	$	1.93	$	1.52	$	4.49	$	4.57
Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share	926		2,245		3,013		9,744

In accordance with ASC 260-10, Earnings Per Share, we calculated the dilutive effect of the Convertible Notes using the treasury stock method, since we have elected to settle the principal amount of the outstanding Convertible Notes in cash. Under the treasury stock method, the Convertible Notes have a dilutive impact on diluted earnings per share to the extent that the average market price of our common stock for a reporting period exceeds the conversion price of $21.52 per share. During the three and nine months ended September 30, 2019 and 2018, the average market price of our common stock exceeded the conversion price of $21.52 per share.

Equity (Details) - USD ($) $ in Thousands	3 Months Ended
Equity (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018
Equity [Line Items]
Treasury stock, shares		1,039,000	1,039,000
Issuance of shares in settlement of Convertible Notes	$ (470)

Schedule of Notes Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Notes payable	$ 751,364	$ 653,734
Revolving Credit Facility
Debt Instrument [Line Items]
Notes payable	385,735	290,131
Debt issuance costs	4,583	3,669
Convertible Debt
Debt Instrument [Line Items]
Notes payable	69,768	68,251
Debt issuance costs	39	364
Unamortized discount	155	1,347
Senior Notes
Debt Instrument [Line Items]
Notes payable	295,861	295,352
Debt issuance costs	2,297	2,547
Unamortized discount	$ 1,841	$ 2,100

Summary of Non-Perfomance Based Restricted Stock Units (Details) - Restricted stock units (RSUs) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Award [Abstract]
Balance at Beginning of Period (in shares)		171,055	175,100
Granted (in shares)		49,836	40,844
Vested (in shares)		(42,823)	(36,486)
Forfeited (in shares)		(12,733)	(5,941)
Balance at End of Period (in shares)	165,335	165,335	173,517
Share-based Compensation Arrangement by Award, Fair Value [Abstract]
Shares outstanding at the beginning of the period, weighted average grant date fair value (in dollars per share)		$ 39.04	$ 27.66
Granted, weighted average grant date fair value (in dollars per share)		57.49	63.30
Vested, weighted average grant date fair value (in dollars per share)		22.27	15.70
Forfeited, weighted average grant date fair value (in dollars per share)		47.21	34.31
Shares outstanding at the end of the period, weighted average grant date fair value (in dollars per share)	$ 48.35	$ 48.35	$ 38.34
Share-based compensation expense	$ 0.5	$ 1.6	$ 1.5
Share-based compensation not yet recognized	$ 4.1	$ 4.1
Share-based compensation not yet recognized, period for recognition		2 years

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 01, 2019
Entity Information [Line Items]
Entity Central Index Key	0001580670
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2019
Entity File Number	001-36126
Entity Registrant Name	LGI HOMES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-3088013
Entity Address, Address Line One	1450 Lake Robbins Drive,
Entity Address, Address Line Two	Suite 430,
Entity Address, City or Town	The Woodlands,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77380
City Area Code	(281)
Local Phone Number	362-8998
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
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	LGIH
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		22,949,956

Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Retentions and development payable	$ 23,334	$ 18,899
Accrued Income Taxes	7,803	10,773
Accrued compensation, bonuses and benefits	14,933	14,263
Accrued interest	7,039	12,339
Inventory related obligations	6,377	7,041
Operating Lease, Liability	5,360	0
Warranty reserve	3,200	2,950
Other	10,732	10,290
Total accrued expenses and other liabilities	$ 78,778	$ 76,555
Inventory related obligation term	30 years

Revenues (Tables)

9 Months Ended

Sep. 30, 2019

Disaggregation of Revenue [Line Items]

Revenue from External Customers by Products

The following table presents our home sales revenues disaggregated by revenue stream (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Retail home sales revenues	$	457,124	$	353,594	$	1,182,039	$	1,017,952
Other	25,957		26,775		50,466		61,288
Total home sales revenues	$	483,081	$	380,369	$	1,232,505	$	1,079,240

Revenue from External Customers by Geographic Areas

The following table presents our home sales revenues disaggregated by geography, based on our determined reportable segments in Note 13 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Central	$	193,860	$	151,673	$	507,951	$	441,138
Northwest	92,242		72,485		207,492		214,891
Southeast	91,452		73,507		221,686		178,984
Florida	44,084		38,750		121,183		136,211
West	61,443		43,954		174,193		108,016
Total home sales revenues	$	483,081	$	380,369	$	1,232,505	$	1,079,240

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	23,988,956	23,746,385
Common stock, shares outstanding	22,949,956	22,707,385
Treasury stock, shares	1,039,000	1,039,000

Organization and Basis of Presentation - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Jan. 01, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation Disclosures	ORGANIZATION AND BASIS OF PRESENTATION Organization and Description of the Business LGI Homes, Inc., a Delaware corporation (the “Company”, “us,” “we,” or “our”), is engaged in the development of communities and the design, construction and sale of new homes in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada and West Virginia. Basis of Presentation The unaudited 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 GAAP for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. The accompanying unaudited consolidated financial statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year. The accompanying unaudited financial statements as of September 30, 2019, and for the three and nine months ended September 30, 2019 and 2018, include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and these differences could have a significant impact on the financial statements. Recently Adopted Accounting Standards On January 1, 2019, we adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which amends the existing standards for lease accounting, requiring lessees to recognize most leases on their balance sheets and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than one year. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. We adopted the new standard with a modified retrospective transition approach, so financial information is not updated for periods prior to January 1, 2019. Pursuant to the adoption of the new standard, we elected the practical expedients upon transition that do not require us to reassess existing contracts to determine if they contain leases under the new definition of a lease, or to reassess historical lease classification or initial direct costs. We also elected the practical expedient to not separate lease and non-lease components for new leases after adoption of the new standard. The adoption of Topic 842 is accounted for as a change in accounting principle in conformity with FASB Accounting Standards Codification (“ASC”) 250, “Accounting Changes and Error Corrections.” As a result of the adoption, the most significant changes are related to the recognition of new ROU assets and lease liabilities of $5.4 million as of January 1, 2019 on the balance sheet for office operating leases. The Company's existing material leases are all considered operating leases under the new leasing standard and as a result, no adjustment to retained earnings was required. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”), which requires entities that are customers in cloud computing arrangements to defer implementation costs if they would be capitalized by the entity in software licensing arrangements under the internal-use software guidance. The guidance may be applied retrospectively or prospectively to implementation costs incurred after the date of adoption. ASU 2018-15 is effective for us beginning January 1, 2020. We are currently evaluating the impact that this standard will have on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which modifies the disclosure requirements of fair value measurements. ASU 2018-13 is effective for us beginning January 1, 2020. Certain disclosures are required to be applied on a retrospective basis and others on a prospective basis. We do not expect ASU 2018-13 to have a material impact on our financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment” (“ASU 2017-04”), which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for us beginning January 1, 2020, with early adoption permitted, and applied prospectively. We do not expect ASU 2017-04 to have a material impact on our financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments from an “incurred loss” approach to a new “expected credit loss” methodology. ASU 2016-13 is effective for us beginning January 1, 2020, with early adoption permitted. We are currently evaluating the impact that this standard will have on our financial statements.
OperatingLeaseLiabilityandRightofUseAsset		$ 5.4

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation, percent			22.60%
Income taxes paid	$ 14.7	$ 12.8	$ 36.3	$ 76.5

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Restricted Stock Unit Activity

The following table summarizes the activity of our time-vested restricted stock units (“RSUs”):



	Nine Months Ended September 30,
	2019				2018
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Beginning balance	171,055		$	39.04	175,100		$	27.66
Granted	49,836		$	57.49	40,844		$	63.30
Vested	(42,823	)	$	22.27	(36,486	)	$	15.70
Forfeited	(12,733	)	$	47.21	(5,941	)	$	34.31
Ending balance	165,335		$	48.35	173,517		$	38.34

Schedule of Performance Based Stock Activity

The following table summarizes the activity of our PSUs for the nine months ended September 30, 2019:



Period Granted	Performance Period	Target PSUs Outstanding at December 31, 2018	Target PSUs Granted	Target PSUs Vested		Target PSUs Forfeited		Target PSUs Outstanding at September 30, 2019	Weighted Average Grant Date Fair Value
2016	2016 - 2018	83,656	—	(83,656	)	—		—	$	21.79
2017	2017 - 2019	108,247	—	—		(3,477	)	104,770	$	31.64
2018	2018 - 2020	61,898	—	—		(1,858	)	60,040	$	64.60
2019	2019 - 2021	—	83,367	—		(2,125	)	81,242	$	56.49
Total		253,801	83,367	(83,656	)	(7,460	)	246,052

Revolving Credit Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Line of Credit Facility [Line Items]
Assets	$ 1,636,193		$ 1,636,193		$ 1,395,473
Loss on extinguishment of debt	0	$ (3,058)	(169)	$ (3,599)
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, Maximum Borrowing Capacity before Accordion	550,000		550,000
Line of credit facility, current borrowing capacity	920,000		920,000
Line of credit facility, additional borrowing capacity	100,000		$ 100,000
Line of credit facility, expiration date			May 31, 2022
Line of credit facility, extension			1 year
Line of credit, amount outstanding	760,300		$ 760,300
Letters of credit outstanding	13,200		13,200
Line of credit facility, remaining borrowing capacity	$ 145,100		$ 145,100
Base spread on variable rate			2.50%
Revolving Credit Facility \| LIBOR
Line of Credit Facility [Line Items]
Variable interest rate	2.04%		2.04%
Revolving Credit Facility \| Minimum
Line of Credit Facility [Line Items]
Base spread on variable rate			2.35%
Revolving Credit Facility \| Minimum \| Guarantor Subsidiaries
Line of Credit Facility [Line Items]
Assets	$ 500		$ 500
Revolving Credit Facility \| Maximum
Line of Credit Facility [Line Items]
Base spread on variable rate			2.75%

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2019
Related Party Transactions [Abstract]
Related Party Transactions Disclosures	RELATED PARTY TRANSACTIONS Land Purchases from Affiliates As of September 30, 2019, we have two land purchase contracts to purchase a total of 198 finished lots in Pasco County and Manatee County, Florida from affiliates of one of our directors for a total base purchase price of approximately $6.9 million. The lots will be purchased in takedowns, subject to annual price escalation ranging from 3% to 6% per annum, and may provide for additional payments to the seller at the time of sale to the homebuyer. We have a $0.5 million non-refundable deposit at September 30, 2019 related to these land purchase contracts. We purchased our first takedown of 58 lots on the Pasco County contract during the three months ended September 30, 2019 for a base purchase price of approximately $2.1 million. We anticipate the first closing on the Manatee County contract to occur in 2020.

Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

The following table below shows the level and measurement of liabilities at September 30, 2019 and December 31, 2018 (in thousands):



		September 30, 2019				December 31, 2018
	Fair Value Hierarchy	Carrying Value		Estimated Fair Value ⁽¹⁾		Carrying Value		Estimated Fair Value ⁽¹⁾
Convertible Notes	Level 2	$	69,768	$	69,908	$	68,251	$	67,787
Senior Notes	Level 2	$	295,861	$	333,960	$	295,352	$	296,905

(1)

Excludes the fair value of the equity component of the Convertible Notes. See the “Convertible Notes” section within Note 5 for further details.

Fair Value Disclosures

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Disclosures

FAIR VALUE DISCLOSURES

ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” within an entity’s principal market, if any. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity, regardless of whether it is the market in which the entity will ultimately transact for a particular asset or liability or if a different market is potentially more advantageous. Accordingly, this exit price concept may result in a fair value that differs from the transaction price or market price of the asset or liability.

ASC 820 provides a framework for measuring fair value under GAAP, expands disclosures about fair value measurements 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 three levels of the fair value hierarchy are summarized as follows:

Level 1 - Fair value is based on quoted prices in active markets for identical assets or liabilities.

Level 2 - Fair value is 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 is determined using one or more significant inputs that are unobservable in active markets at the

measurement date, such as a pricing model, discounted cash flow or similar technique.

We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets. The fair value of financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying amounts due to the short-term nature of these instruments. As of September 30, 2019, our revolving credit facility’s carrying value approximates market value since it has a floating interest rate, which increases or decreases with market interest rates and our leverage ratio.

In order to determine the fair value of the Convertible Notes and the Senior Notes listed below, the future contractual cash flows are discounted at our estimate of current market rates of interest, which were determined based upon the average interest rates of similar convertible notes and senior notes within the homebuilding industry (Level 2 measurement).

The following table below shows the level and measurement of liabilities at September 30, 2019 and December 31, 2018 (in thousands):



		September 30, 2019				December 31, 2018
	Fair Value Hierarchy	Carrying Value		Estimated Fair Value ⁽¹⁾		Carrying Value		Estimated Fair Value ⁽¹⁾
Convertible Notes	Level 2	$	69,768	$	69,908	$	68,251	$	67,787
Senior Notes	Level 2	$	295,861	$	333,960	$	295,352	$	296,905

(1)

Excludes the fair value of the equity component of the Convertible Notes. See the “Convertible Notes” section within Note 5 for further details.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued and Other Current Liabilities

Accrued and other liabilities consist of the following (in thousands):



	September 30,		December 31,
	2019		2018
Retentions and development payable	$	23,334	$	18,899
Accrued compensation, bonuses and benefits	14,933		14,263
Accrued interest	7,039		12,339
Taxes payable	7,803		10,773
Inventory related obligations	6,377		7,041
Lease Liability	5,360		—
Warranty reserve	3,200		2,950
Other	10,732		10,290
Total accrued expenses and other liabilities	$	78,778	$	76,555

Changes in Company's Warranty Accrual

Changes to our warranty accrual are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Warranty reserves, beginning of period	$	3,050		$	2,800		$	2,950		$	2,450
Warranty provision	1,602			1,240			3,576			2,923
Warranty expenditures	(1,452		)	(1,190		)	(3,326		)	(2,523		)
Warranty reserves, end of period	$	3,200		$	2,850		$	3,200		$	2,850

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Home sales revenues	$ 483,081	$ 380,369	$ 1,232,505	$ 1,079,240
Cost of sales	366,431	283,035	938,240	802,882
Selling expenses	33,485	27,890	94,166	80,140
General and administrative	19,140	17,794	56,558	51,536
Operating income	64,025	51,650	143,541	144,682
Loss on extinguishment of debt	0	3,058	169	3,599
Other income, net	(707)	(399)	(3,589)	(1,806)
Net income before income taxes	64,732	48,991	146,961	142,889
Income tax provision	15,383	11,268	33,223	30,256
Net income	$ 49,349	$ 37,723	$ 113,738	$ 112,633
Earnings per share:
Basic (in dollars per share)	$ 2.15	$ 1.66	$ 4.97	$ 5.07
Diluted (in dollars per share)	$ 1.93	$ 1.52	$ 4.49	$ 4.57
Weighted average shares outstanding:
Basic (in shares)	22,939,907	22,658,457	22,870,948	22,236,018
Diluted (in shares)	25,521,946	24,896,569	25,329,461	24,642,882

Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information Disclosures

SEGMENT INFORMATION

Beginning in the fourth quarter of 2018, we changed our reportable segments to Central, Northwest, Southeast, Florida, and West. These segments reflect the way the Company evaluates its business performance and manages its operations. Prior period information has been restated for corresponding items of our segment information.

We operate one principal homebuilding business that is organized and reports by division. We have seven operating segments (our Central, Midwest, Northwest, Southeast, Mid-Atlantic, Florida, and West divisions) that we aggregate into five reportable segments at September 30, 2019: our Central, Northwest, Southeast, Florida, and West divisions. The Central division is our largest division and comprised approximately 41% of total home sales revenues for each of the nine months ended September 30, 2019 and 2018.

In accordance with ASC Topic 280, Segment Reporting, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-makers (“CODMs”) in deciding how to allocate resources and in assessing performance. The CODMs primarily evaluate performance based on the number of homes closed, gross margin and average sales price.

The seven operating segments qualify as our five reportable segments. In determining the most appropriate reportable segments, we consider operating segments’ economic and other characteristics, including home floor plans, average selling prices, gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type and underlying demand and supply. Each operating segment follows the same accounting policies and is managed by our management team. We have no inter-segment sales, as all sales are to external customers. Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.

Financial information relating to our reportable segments was as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Central	$	193,860		$	151,673		$	507,951		$	441,138
Northwest	92,242			72,485			207,492			214,891
Southeast	91,452			73,507			221,686			178,984
Florida	44,084			38,750			121,183			136,211
West	61,443			43,954			174,193			108,016
Total home sales revenues	$	483,081		$	380,369		$	1,232,505		$	1,079,240

Net income (loss) before income taxes:
Central	$	33,134		$	24,971		$	80,374		$	73,814
Northwest	15,064			11,161			30,293			30,291
Southeast	8,710			7,511			14,870			19,437
Florida	3,161			4,522			8,928			16,079
West	6,542			4,715			16,879			9,610
Corporate ⁽¹⁾	(1,879		)	(3,889		)	(4,383		)	(6,342		)
Total net income (loss) before income taxes	$	64,732		$	48,991		$	146,961		$	142,889


(1)	The Corporate amount consists primarily of general and administration unallocated costs for various shared service functions, as well as our warranty reserve and loss on extinguishment of debt. Actual warranty expenses are reflected within the reportable segments.



	September 30, 2019		December 31, 2018
Assets:
Central	$	588,216	$	569,409
Northwest	234,968		200,443
Southeast	407,231		300,758
Florida	147,474		106,398
West	210,355		161,514
Corporate ⁽¹⁾	47,949		56,951
Total assets	$	1,636,193	$	1,395,473

(1)

As of September 30, 2019, the Corporate balance consists primarily of cash, prepaid insurance, ROU assets and prepaid expenses. As of December 31, 2018, the Corporate balance consists primarily of cash, prepaid insurance and prepaid expenses.

Segment (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information, by Segment

Financial information relating to our reportable segments was as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Central	$	193,860		$	151,673		$	507,951		$	441,138
Northwest	92,242			72,485			207,492			214,891
Southeast	91,452			73,507			221,686			178,984
Florida	44,084			38,750			121,183			136,211
West	61,443			43,954			174,193			108,016
Total home sales revenues	$	483,081		$	380,369		$	1,232,505		$	1,079,240

Net income (loss) before income taxes:
Central	$	33,134		$	24,971		$	80,374		$	73,814
Northwest	15,064			11,161			30,293			30,291
Southeast	8,710			7,511			14,870			19,437
Florida	3,161			4,522			8,928			16,079
West	6,542			4,715			16,879			9,610
Corporate ⁽¹⁾	(1,879		)	(3,889		)	(4,383		)	(6,342		)
Total net income (loss) before income taxes	$	64,732		$	48,991		$	146,961		$	142,889


(1)	The Corporate amount consists primarily of general and administration unallocated costs for various shared service functions, as well as our warranty reserve and loss on extinguishment of debt. Actual warranty expenses are reflected within the reportable segments.



	September 30, 2019		December 31, 2018
Assets:
Central	$	588,216	$	569,409
Northwest	234,968		200,443
Southeast	407,231		300,758
Florida	147,474		106,398
West	210,355		161,514
Corporate ⁽¹⁾	47,949		56,951
Total assets	$	1,636,193	$	1,395,473

(1)

Real Estate Inventory

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Real Estate Inventory Disclosures

REAL ESTATE INVENTORY

Our real estate inventory consists of the following (in thousands):



	September 30,		December 31,
	2019		2018
Land, land under development and finished lots	$	831,448	$	736,402
Information centers	26,857		21,179
Homes in progress	371,838		149,506
Completed homes	250,486		321,169
Total real estate inventory	$	1,480,629	$	1,228,256

Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value.

Land, development and other project costs, including interest and property taxes incurred during development and home construction and net of expected reimbursements of development costs, are capitalized to real estate inventory. Land development and other common costs that benefit the entire community, including field construction supervision and related direct overhead, are allocated to individual lots or homes, as appropriate. The costs of lots are transferred to homes in progress when home construction begins. Home construction costs and related carrying charges are allocated to the cost of individual homes using the specific identification method. Costs that are not specifically identifiable to a home are allocated on a pro rata basis, which we believe approximates the costs that would be determined using an allocation method based on relative sales values since the individual lots or homes within a community are similar in value. Inventory costs for completed homes are expensed to cost of sales as homes are closed. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining unsold lots and homes in the community on a pro rata basis.

The life cycle of a community generally ranges from two to five years, commencing with the acquisition of land, continuing through the land development phase and concluding with the construction and sale of homes. A constructed home is used as the community information center during the life of the community and then sold. Actual individual community lives will vary based on the size of the community, the sales absorption rate and whether the property was purchased as raw land or finished lots.

Interest and financing costs incurred under our debt obligations, as more fully discussed in Note 5, are capitalized to qualifying real estate projects under development and homes under construction.

Notes Payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Notes Payable Disclosures

NOTES PAYABLE

Revolving Credit Agreement

On May 6, 2019, we entered into that certain Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent. The Credit Agreement has substantially similar terms and provisions to our third amended and restated credit agreement entered into in May 2018 with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent (the “2018 Credit Agreement”) but, among other things, provides for, a revolving credit facility of $550.0 million, which can be increased at our request by up to $100.0 million if the lenders make additional commitments, subject to the terms and conditions of the Credit Agreement.

The Credit Agreement matures on May 31, 2022. Before each anniversary of the Credit Agreement, we may request a one-year extension of the maturity date. The Credit Agreement is guaranteed by each of our subsidiaries that have gross assets of $0.5 million or more. As of September 30, 2019, the borrowing base under the Credit Agreement was $920.0 million, of which borrowings, including the Convertible Notes (as defined below) and the Senior Notes (as defined below), of $760.3 million were outstanding, $13.2 million of letters of credit were outstanding and $145.1 million was available to borrow under the Credit Agreement, net of deferred purchase price obligations.

Interest is paid monthly on borrowings under the Credit Agreement at LIBOR plus 2.50%. The Credit Agreement applicable margin for LIBOR loans ranges from 2.35% to 2.75% based on our leverage ratio. At September 30, 2019, LIBOR was 2.04%.

The Credit Agreement contains various financial covenants, including a minimum tangible net worth, a leverage ratio, a minimum liquidity amount and an EBITDA to interest expense ratio. The Credit Agreement contains various covenants that, among other restrictions, limit the amount of our additional debt and our ability to make certain investments. At September 30, 2019, we were in compliance with all of the covenants contained in the Credit Agreement.

Convertible Notes

We issued $85.0 million aggregate principal amount of our 4.25% Convertible Notes due 2019 (the “Convertible Notes”) in November 2014 pursuant to an exemption from the registration requirements afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Convertible Notes mature on November 15, 2019. Interest on the Convertible Notes is payable semi-annually in arrears on May 15 and November 15 of each year at a rate of 4.25%. When the Convertible Notes were issued, the fair value of $76.5 million was recorded to notes payable. $5.5 million of the remaining proceeds was recorded to additional paid in capital to reflect the equity component and the remaining $3.0 million was recorded as a deferred tax liability. The carrying amount of the Convertible Notes is being accreted to face value over the term to maturity. As of September 30, 2019, we have $70.0 million aggregate principal amount of Convertible Notes outstanding.

Prior to May 15, 2019, the Convertible Notes were convertible only upon satisfaction of any of the specified conversion events. On or after May 15, 2019 and until the close of business on November 14, 2019 (the business day immediately preceding the stated maturity date of the Convertible Notes), the holders of the Convertible Notes can convert their Convertible Notes at any time at their option. With respect to the conversion of the Convertible Notes (i) between the date of this Quarterly Report on Form 10-Q and the maturity date of the Convertible Notes and (ii) on such maturity date, we have elected to settle the conversion of the Convertible Notes using a combination of cash (to pay the principal amount) and shares of our common stock. The initial conversion rate of the Convertible Notes is 46.4792 shares of our common stock for each $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $21.52 per share of our common stock. The conversion rate is subject to adjustments upon the occurrence of certain specified events.

On July 6, 2018, concurrently with the offering of the Senior Notes, we entered into that certain First Supplemental Indenture, dated as of July 6, 2018, among us, our subsidiaries that guarantee our obligations under the 2018 Credit Agreement (the “Subsidiary Guarantors”) and Wilmington Trust, National Association, as trustee, which supplements the indenture governing the Convertible Notes, pursuant to which (i) the subordination provisions in the indenture governing the Convertible Notes were eliminated, (ii) each Subsidiary Guarantor agreed (A) to, concurrently with the issuance of the Senior Notes, fully and unconditionally guarantee the Convertible Notes to the same extent that such Subsidiary Guarantor is guaranteeing the Senior Notes and (B) that such Subsidiary Guarantor’s guarantee of the Convertible Notes ranks equally with such Subsidiary Guarantor’s guarantee of the Senior Notes and (iii) the Company agreed to not, directly or indirectly, incur any indebtedness in the form of, or otherwise become liable in respect of, any notes or other debt securities issued pursuant to an indenture or note purchase agreement (including the Senior Notes) unless such indebtedness is equal with or contractually subordinated to the Convertible Notes in right of payment.

Senior Notes Offering

On July 6, 2018, we issued $300.0 million aggregate principal amount of the Senior Notes in an offering to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act. Interest on the Senior Notes accrues at a rate of 6.875% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2019, and the Senior Notes mature on July 15, 2026. Terms of the Senior Notes are governed by an indenture and supplemental indenture, each dated as of July 6, 2018, among us, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee.

We received net proceeds from the offering of the Senior Notes of approximately $296.2 million, after deducting the initial purchasers’ discounts of $2.3 million and commissions and offering expenses of $1.5 million. The net proceeds from the offering were used to repay a portion of the borrowings under the 2018 Credit Agreement.

Notes payable consist of the following (in thousands):



	September 30, 2019		December 31, 2018
Notes payable under the Credit Agreement ($550.0 million revolving credit facility at September 30, 2019) maturing on May 31, 2022; interest paid monthly at LIBOR plus 2.50%; net of debt issuance costs of approximately $4.6 million and $3.7 million at September 30, 2019 and December 31, 2018, respectively	$	385,735	$	290,131
4.25% Convertible Notes due November 15, 2019; interest paid semi-annually at 4.25%; net of debt issuance costs of approximately $0.1 million and $0.4 million at September 30, 2019 and December 31, 2018, respectively; and approximately $0.2 million and $1.3 million in unamortized discount at September 30, 2019 and December 31, 2018, respectively	69,768		68,251
6.875% Senior Notes due July 15, 2026; interest paid semi-annually at 6.875%; net of debt issuance costs of approximately $2.3 million and $2.5 at September 30, 2019 and December 31, 2018, respectively; and approximately $1.8 million and $2.1 million in unamortized discount at September 30, 2019 and December 31, 2018, respectively	295,861		295,352
Total notes payable	$	751,364	$	653,734

Capitalized Interest

Interest activity, including other financing costs, for notes payable for the periods presented is as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Interest incurred	$	10,600		$	10,823		$	34,125		$	26,803
Less: Amounts capitalized	(10,600		)	(10,823		)	(34,125		)	(26,803		)
Interest expense	$	—		$	—		$	—		$	—

Cash paid for interest	$	14,673		$	4,517		$	35,705		$	17,786

Included in interest incurred was amortization of deferred financing costs for notes payable and amortization of Convertible Notes and Senior Notes discounts of $1.1 million and $1.3 million for the three months ended September 30, 2019 and 2018, respectively, and $3.2 million and $3.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Commitments and Contingencies (Details) $ in Thousands	3 Months Ended	9 Months Ended
Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2019 USD ($) Rate	Sep. 30, 2019 USD ($) Rate	Dec. 31, 2018 USD ($)
Other Commitments [Line Items]
Land deposits and option payments	$ 37,677	$ 37,677	$ 40,015
Commitments under the land purchase contracts if the purchases are consummated	$ 550,412	$ 550,412	$ 776,224
Lots under land purchase contracts	17,044	17,044	22,820
Refundable land deposits of purchase contracts of finished lots	$ 28,500	$ 28,500	$ 25,200
Operating Lease, Right-of-Use Asset	5,100	5,100
Present value of operating lease liabilities	5,360	5,360	0
Operating Lease, Cost	300	900
Operating Lease, Payments	$ 300	$ 900
Operating lease, weighted average discount rate \| Rate	5.84%	5.84%
Operating lease, weighted average remaining lease term	7 years 7 months 6 days	7 years 7 months 6 days
Letters of credit, surety bonds, and other financials guarantees	$ 100,800	$ 100,800	$ 77,500
Contributions to limited partnership	1,100
Revolving Credit Facility
Other Commitments [Line Items]
Letters of credit outstanding under revolving credit facility	13,200	13,200
Not Primary Beneficiary
Other Commitments [Line Items]
Limited partnership, maximum commitment	$ 30,000	$ 30,000
Limited partnership, term	8 years
Limited partnership, renewal term	2 years

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Home sales revenues	$ 483,081	$ 380,369	$ 1,232,505	$ 1,079,240
Retail
Disaggregation of Revenue [Line Items]
Home sales revenues	457,124	353,594	1,182,039	1,017,952
Wholesale
Disaggregation of Revenue [Line Items]
Home sales revenues	25,957	26,775	50,466	61,288
Central Division
Disaggregation of Revenue [Line Items]
Home sales revenues	193,860	151,673	507,951	441,138
Northwest Division
Disaggregation of Revenue [Line Items]
Home sales revenues	92,242	72,485	207,492	214,891
Southeast Division
Disaggregation of Revenue [Line Items]
Home sales revenues	91,452	73,507	221,686	178,984
Florida Division
Disaggregation of Revenue [Line Items]
Home sales revenues	44,084	38,750	121,183	136,211
West Division
Disaggregation of Revenue [Line Items]
Home sales revenues	$ 61,443	$ 43,954	$ 174,193	$ 108,016

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Lessee, Operating Lease, Liability, Maturity

The table below shows the future minimum payments under non-cancelable operating leases at September 30, 2019 (in thousands):



Year Ending December 31,	Operating leases
2019	$	251
2020	1,004
2021	1,003
2022	851
2023	722
Thereafter	2,838
Total	6,669
Lease amount representing interest	(1,309		)
Present value of lease liabilities	$	5,360

Summary of Lots Under Option or Contract

The following is a summary of our land purchase deposits included in pre-acquisition costs and deposits (in thousands, except for lot count):



	September 30, 2019		December 31, 2018
Land deposits and option payments	$	37,677	$	40,015
Commitments under the land purchase contracts if the purchases are consummated	$	550,412	$	776,224
Lots under land purchase contracts	17,044		22,820

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 113,738	$ 112,633
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	487	543
Loss on extinguishment of debt	169	3,588
Loss on disposal of assets	0	6
Compensation expense for equity awards	5,181	4,172
Deferred income taxes	2	(1,784)
Changes in assets and liabilities:
Accounts receivable	(2,594)	13,327
Real estate inventory	(249,921)	(194,387)
Pre-acquisition costs and deposits	5,615	(19,938)
Other assets	5,655	3,347
Accounts payable	19,763	5,871
Accrued expenses and other liabilities	(2,254)	(29,394)
Net cash used in operating activities	(104,159)	(102,016)
Cash flows from investing activities:
Purchases of property and equipment	(541)	(395)
Investment in unconsolidated entity	(1,059)	0
Payment for business acquisition	0	(73,829)
Net cash used in investing activities	(1,600)	(74,224)
Cash flows from financing activities:
Proceeds from notes payable	180,067	537,717
Payments on notes payable	(83,800)	(386,238)
Loan issuance costs	(2,067)	(6,690)
Proceeds from sale of stock, net of offering expenses	1,965	2,057
Payment for offering costs	0	(76)
Payment for earnout obligation	0	(132)
Net cash provided by financing activities	96,165	146,638
Net decrease in cash and cash equivalents	(9,594)	(29,602)
Cash and cash equivalents, beginning of period	46,624	67,571
Cash and cash equivalents, end of period	$ 37,030	$ 37,969

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Net income	$ 49,349	$ 46,055	$ 18,334	$ 37,723	$ 47,608	$ 27,302	$ 113,738	$ 112,633
Basic weighted average shares outstanding	22,939,907			22,658,457			22,870,948	22,236,018
Convertible Notes - treasury stock method	2,336,017			1,978,770			2,223,443	2,128,854
Stock-based compensation units	246,022			259,342			235,070	278,010
Diluted weighted average shares outstanding	25,521,946			24,896,569			25,329,461	24,642,882
Basic earnings per share (in dollars per share)	$ 2.15			$ 1.66			$ 4.97	$ 5.07
Diluted earnings per share (in dollars per share)	$ 1.93			$ 1.52			$ 4.49	$ 4.57
Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share	926			2,245			3,013	9,744
Convertible Debt
Convertible notes, conversion price	$ 21.52						$ 21.52

Changes in Warranty Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Product Warranty, Increase (Decrease) [Roll Forward]
Warranty reserves, beginning of period	$ 3,050	$ 2,800	$ 2,950	$ 2,450
Warranty provision	1,602	1,240	3,576	2,923
Warranty expenditures	(1,452)	(1,190)	(3,326)	(2,523)
Warranty reserves, end of period	$ 3,200	$ 2,850	$ 3,200	$ 2,850
Other Construction Components
Product Warranty Liability [Line Items]
Limited warranty period			1 year
Structural Elements
Product Warranty Liability [Line Items]
Limited warranty period			10 years

Summary of Performance Based Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		100.00%
Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Performance vesting period		3 years
Balance at Beginning of Period (in shares)		253,801
Granted (in shares)		83,367
Vested (in shares)		(83,656)
Forfeited (in shares)		(7,460)
Balance at End of Period (in shares)	246,052	246,052
Share-based compensation expense	$ 1.1	$ 3.2	$ 2.7
Share-based compensation not yet recognized	$ 6.6	$ 6.6
Share-based compensation not yet recognized, period for recognition		1 year 10 months 24 days
2016 Grant \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		200.00%
Balance at Beginning of Period (in shares)		83,656
Vested (in shares)		(83,656)
Balance at End of Period (in shares)	0	0
Weighted average grant date fair value (in dollars per share)	$ 21.79	$ 21.79
2017 Grant \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		185.00%
Balance at Beginning of Period (in shares)		108,247
Forfeited (in shares)		(3,477)
Balance at End of Period (in shares)	104,770	104,770
Weighted average grant date fair value (in dollars per share)	$ 31.64	$ 31.64
2018 Grant \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		116.00%
Balance at Beginning of Period (in shares)		61,898
Forfeited (in shares)		(1,858)
Balance at End of Period (in shares)	60,040	60,040
Weighted average grant date fair value (in dollars per share)	$ 64.60	$ 64.60
2019 Grant \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		100.00%
Balance at Beginning of Period (in shares)		0
Granted (in shares)		83,367
Forfeited (in shares)		(2,125)
Balance at End of Period (in shares)	81,242	81,242
Weighted average grant date fair value (in dollars per share)	$ 56.49	$ 56.49
Minimum \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		0.00%
Maximum \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Percentage of total units vested		200.00%
Maximum \| 2016 Grant \| Performance Based Shares
Share-based Compensation Arrangement by Award [Line Items]
Vested (in shares)		(167,312)

Senior Notes (Details) - Senior Notes $ in Millions	9 Months Ended
Senior Notes (Details) - Senior Notes $ in Millions	Sep. 30, 2019 USD ($)
Debt Instrument [Line Items]
Senior Notes, Gross	$ 300.0
Stated interest rate on convertible note	6.875%
Senior Notes maturity date	Jul. 15, 2026
Initial debt discount	$ 2.3
Proceeds from issuance of debt	296.2
Debt offering commissions and offering costs	$ 1.5

Accrued Expenses and Other Liabilities

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities Disclosures

ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued and other liabilities consist of the following (in thousands):



	September 30,		December 31,
	2019		2018
Retentions and development payable	$	23,334	$	18,899
Accrued compensation, bonuses and benefits	14,933		14,263
Accrued interest	7,039		12,339
Taxes payable	7,803		10,773
Inventory related obligations	6,377		7,041
Lease Liability	5,360		—
Warranty reserve	3,200		2,950
Other	10,732		10,290
Total accrued expenses and other liabilities	$	78,778	$	76,555

Inventory Related Obligations

We own lots in certain communities in Arizona, Florida and Texas that have Community Development Districts or similar utility and infrastructure development special assessment programs that allocate a fixed amount of debt service associated with development activities to each lot. This obligation for infrastructure development is attached to the land, which is typically payable over a 30-year period and is ultimately assumed by the homebuyer when home sales are closed. Such obligations represent a non-cash cost of the lots.

Estimated Warranty Reserve

We typically provide homebuyers with a one-year warranty on the house and a ten-year limited warranty for major defects in structural elements such as framing components and foundation systems.

Changes to our warranty accrual are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Warranty reserves, beginning of period	$	3,050		$	2,800		$	2,950		$	2,450
Warranty provision	1,602			1,240			3,576			2,923
Warranty expenditures	(1,452		)	(1,190		)	(3,326		)	(2,523		)
Warranty reserves, end of period	$	3,200		$	2,850		$	3,200		$	2,850

Capitalized Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Capitalized Interest (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Disclosure [Abstract]
Interest incurred	$ 10,600	$ 10,823	$ 34,125	$ 26,803
Less: Amounts capitalized	(10,600)	(10,823)	(34,125)	(26,803)
Interest expense	0	0	0	0
Cash paid for interest	14,673	4,517	35,705	17,786
Amortization of Debt Issuance Costs and Discounts	$ 1,100	$ 1,300	$ 3,200	$ 3,500

Schedule of Real Estate Inventory (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Inventory [Line Items]
Land, land under development and finished lots	$ 831,448	$ 736,402
Information centers	26,857	21,179
Homes in progress	371,838	149,506
Completed homes	250,486	321,169
Total real estate inventory	$ 1,480,629	$ 1,228,256
Minimum
Inventory [Line Items]
Community life cycle	P2Y
Maximum
Inventory [Line Items]
Community life cycle	P5Y

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income Tax Disclosures	INCOME TAXES We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. The statute of limitations with regards to our federal income tax filings is three years. The statute of limitations for our state tax jurisdictions is three to four years depending on the jurisdiction. In the normal course of business, we are subject to tax audits in various jurisdictions, and such jurisdictions may assess additional income taxes. We do not expect the outcome of any audit to have a material effect on our consolidated financial statements; however, audit outcomes and the timing of audit adjustments are subject to significant uncertainty. For the nine months ended September 30, 2019, our effective tax rate of 22.6% is higher than the Federal statutory rate primarily as a result of the deductions related to non-deductible salaries related to Section 162(m) of the Internal Revenue Code of 1986, as amended, and an increase in rate for state income taxes, net of the federal benefit payments, offset by the deductions in excess of compensation cost (“windfalls”) for share-based payments. Income taxes paid were $14.7 million and $12.8 million for the three months ended September 30, 2019 and 2018, respectively. Income taxes paid were $36.3 million and $76.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Fair Value Disclosures (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Nov. 30, 2014
Fair Value Disclosures [Line Items]
Notes payable, carrying value	$ 751,364	$ 653,734
Convertible Debt
Fair Value Disclosures [Line Items]
Notes payable, carrying value	69,768	68,251
Convertible notes, fair value	69,908	67,787	$ 76,500
Senior Notes
Fair Value Disclosures [Line Items]
Notes payable, carrying value	295,861	295,352
Senior notes, fair value	$ 333,960	$ 296,905