Company Quick10K Filing
MI Homes
Price28.30 EPS3
Shares29 P/E9
MCap809 P/FCF828
Net Debt-33 EBIT131
TEV776 TEV/EBIT6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-01
10-K 2019-12-31 Filed 2020-02-21
10-Q 2019-09-30 Filed 2019-10-25
10-Q 2019-06-30 Filed 2019-07-26
10-Q 2019-03-31 Filed 2019-04-26
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-10-26
10-Q 2018-06-30 Filed 2018-07-27
10-Q 2018-03-31 Filed 2018-04-27
10-K 2017-12-31 Filed 2018-02-16
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-07-28
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-02-17
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-05-02
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-10-23
10-Q 2015-06-30 Filed 2015-07-24
10-Q 2015-03-31 Filed 2015-04-24
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-24
10-Q 2014-06-30 Filed 2014-07-25
10-Q 2014-03-31 Filed 2014-04-25
10-K 2013-12-31 Filed 2014-02-28
10-Q 2013-09-30 Filed 2013-10-25
10-Q 2013-06-30 Filed 2013-07-26
10-Q 2013-03-31 Filed 2013-04-30
10-K 2012-12-31 Filed 2013-02-25
10-Q 2012-09-30 Filed 2012-10-29
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-04-27
10-K 2011-12-31 Filed 2012-02-27
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-02
10-Q 2011-03-31 Filed 2011-05-02
10-K 2010-12-31 Filed 2011-03-01
10-Q 2010-09-30 Filed 2010-10-26
10-Q 2010-06-30 Filed 2010-07-30
10-Q 2010-03-31 Filed 2010-04-30
10-K 2009-12-31 Filed 2010-02-24
8-K 2020-07-29 Earnings, Exhibits
8-K 2020-06-29 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2020-05-29
8-K 2020-05-11
8-K 2020-04-29
8-K 2020-02-05
8-K 2020-01-22
8-K 2020-01-07
8-K 2020-01-07
8-K 2020-01-07
8-K 2019-10-23
8-K 2019-07-24
8-K 2019-06-21
8-K 2019-06-06
8-K 2019-05-07
8-K 2019-04-24
8-K 2019-02-06
8-K 2019-02-05
8-K 2018-10-24
8-K 2018-08-14
8-K 2018-07-25
8-K 2018-06-22
8-K 2018-05-08
8-K 2018-04-25
8-K 2018-02-28
8-K 2018-02-26
8-K 2018-02-21
8-K 2018-02-15
8-K 2018-02-01

MHO 10Q Quarterly Report

Note 1. Basis of Presentation
Note 2. Inventory and Capitalized Interest
Note 3. Investment in Joint Venture Arrangements
Note 4. Fair Value Measurements
Note 5. Guarantees and Indemnifications
Note 6. Commitments and Contingencies
Note 7. Goodwill
Note 8. Debt
Note 9. Earnings per Share
Note 10. Income Taxes
Note 11. Business Segments
Note 12. Supplemental Guarantor Information
Note 13. Share Repurchase Program
Note 14. Revenue Recognition
Item 2: Management's Discussion and Analysis of Financial Condition And
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Item 4: Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities - None.
Item 4. Mine Safety Disclosures - None.
Item 5. Other Information - None.
Item 6. Exhibits
EX-31.1 exhibit311ceocertifica.htm
EX-31.2 exhibit312cfocertifica.htm
EX-32.1 exhibit321ceocertifica.htm
EX-32.2 exhibit322cfocertifica.htm

MI Homes Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
2.21.81.30.90.40.02012201420172020
Assets, Equity
0.80.60.50.30.20.02012201420172020
Rev, G Profit, Net Income
0.20.10.10.0-0.0-0.12012201420172020
Ops, Inv, Fin

mho-20200630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _____________________
Commission File Number 1-12434

M/I HOMES, INC.
(Exact name of registrant as specified in it charter)
Ohio
31-1210837
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

4131 Worth Avenue, Suite 500, Columbus, Ohio 43219
(Address of principal executive offices) (Zip Code)

(614) 418-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $.01MHONew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. q



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common shares, par value $.01 per share: 28,543,629 shares outstanding as of July 29, 2020.



M/I HOMES, INC.
FORM 10-Q
TABLE OF CONTENTS
PART 1.FINANCIAL INFORMATION
Item 1.M/I Homes, Inc. and Subsidiaries Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Balance Sheets at June 30, 2020 and December 31, 2019
Unaudited Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2020 and 2019
Unaudited Condensed Consolidated Statement of Shareholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II.OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
Signatures


2




M/I HOMES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par values)June 30,
2020
December 31,
2019
(unaudited)
ASSETS:
Cash, cash equivalents and restricted cash$94,023  $6,083  
Mortgage loans held for sale163,536  155,244  
Inventory1,830,810  1,769,507  
Property and equipment - net21,004  22,118  
Investment in joint venture arrangements45,144  37,885  
Operating lease right-of-use assets
51,193  18,415  
Deferred income tax asset
9,378  9,631  
Goodwill16,400  16,400  
Other assets96,220  70,311  
TOTAL ASSETS$2,327,708  $2,105,594  
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable$169,088  $125,026  
Customer deposits49,529  34,462  
Operating lease liabilities51,193  18,415  
Other liabilities158,146  147,937  
Community development district obligations11,560  13,531  
Obligation for consolidated inventory not owned11,035  7,934  
Notes payable bank - homebuilding operations  66,000  
Notes payable bank - financial services operations134,184  136,904  
Notes payable - other7,041  5,828  
Senior notes due 2021 - net  298,988  
Senior notes due 2025 - net247,353  247,092  
Senior notes due 2028 - net394,174    
TOTAL LIABILITIES$1,233,303  $1,102,117  
Commitments and contingencies (Note 6)
    
SHAREHOLDERS’ EQUITY:
Common shares - $0.01 par value; authorized 58,000,000 shares at both June 30, 2020 and December 31, 2019;
   issued 30,137,141 shares at both June 30, 2020 and December 31, 2019
301  301  
Additional paid-in capital334,261  332,861  
Retained earnings794,833  708,579  
Treasury shares - at cost - 1,593,512 and 1,750,685 shares at June 30, 2020 and December 31, 2019, respectively
(34,990) (38,264) 
TOTAL SHAREHOLDERS’ EQUITY$1,094,405  $1,003,477  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$2,327,708  $2,105,594  

See Notes to Unaudited Condensed Consolidated Financial Statements.
3


M/I HOMES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30,Six Months Ended June 30,
(In thousands, except per share amounts)2020201920202019
Revenue$714,194  $623,686  $1,291,797  $1,104,795  
Costs and expenses:
Land and housing557,791  503,857  1,018,715  892,324  
General and administrative41,037  36,164  74,884  66,863  
Selling41,127  37,452  77,955  69,003  
Equity in income from joint venture arrangements(3) (187) (55) (66) 
Interest2,515  5,197  7,215  11,989  
Total costs and expenses642,467  582,483  1,178,714  1,040,113  
Income before income taxes71,727  41,203  113,083  64,682  
Provision for income taxes17,219  10,957  26,829  16,713  
Net income54,508  30,246  86,254  47,969  
Earnings per common share:
Basic$1.91  $1.10  $3.03  $1.74  
Diluted$1.89  $1.08  $2.98  $1.71  
Weighted average shares outstanding:
Basic28,531  27,599  28,504  27,549  
Diluted28,836  28,090  28,920  28,027  

See Notes to Unaudited Condensed Consolidated Financial Statements.
4


M/I HOMES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Three Months Ended June 30, 2020
Common Shares
Shares OutstandingAdditional Paid-in CapitalRetained EarningsTreasury SharesTotal Shareholders’ Equity
(Dollars in thousands)Amount
Balance at March 31, 2020
28,523,329  $301  $332,490  $740,325  $(35,435) $1,037,681  
Net income—  —  —  54,508  —  54,508  
Stock options exercised20,300  —  18  —  445  463  
Stock-based compensation expense—  —  1,753  —  —  1,753  
Balance at June 30, 2020
28,543,629  $301  $334,261  $794,833  $(34,990) $1,094,405  


Six Months Ended June 30, 2020
Common Shares
Shares OutstandingAdditional Paid-in CapitalRetained EarningsTreasury SharesTotal Shareholders’ Equity
(Dollars in thousands)Amount
Balance at December 31, 2019
28,386,456  $301  $332,861  $708,579  $(38,264) $1,003,477  
Net income—  —  —  86,254  —  86,254  
Stock options exercised152,600  —  308  —  3,337  3,645  
Stock-based compensation expense—  —  2,726  —  —  2,726  
Repurchase of common shares(80,000) —  —  —  (1,912) (1,912) 
Deferral of executive and director compensation—  —  215  —  —  215  
Executive and director deferred compensation distributions84,573  —  (1,849) —  1,849    
Balance at June 30, 2020
28,543,629  $301  $334,261  $794,833  $(34,990) $1,094,405  


Three Months Ended June 30, 2019
Common Shares
Shares OutstandingAdditional Paid-in CapitalRetained EarningsTreasury SharesTotal Shareholders’ Equity
(Dollars in thousands)Amount
Balance at March 31, 2019
27,568,826  $301  $328,580  $598,715  $(56,134) $871,462  
Net income—  —  —  30,246  —  30,246  
Stock options exercised48,540  —  (211) —  1,060  849  
Stock-based compensation expense—  —  1,682  —  —  1,682  
Deferral of executive and director compensation—  —  1  —  —  1  
Balance at June 30, 2019
27,617,366  $301  $330,052  $628,961  $(55,074) $904,240  

Six Months Ended June 30, 2019
Common Shares
Shares OutstandingAdditional Paid-in CapitalRetained EarningsTreasury SharesTotal Shareholders’ Equity
(Dollars in thousands)Amount
Balance at December 31, 2018
27,516,218  $301  $330,517  $580,992  $(56,507) $855,303  
Net income—  —  —  47,969  —  47,969  
Stock options exercised185,280  —  (761) —  4,038  3,277  
Stock-based compensation expense—  —  2,594  —  —  2,594  
Repurchase of common shares(201,088) —  —  —  (5,150) (5,150) 
Deferral of executive and director compensation—  —  247  —  —  247  
Executive and director deferred compensation distributions116,956  —  (2,545) —  2,545    
Balance at June 30, 2019
27,617,366  $301  $330,052  $628,961  $(55,074) $904,240  

See Notes to Unaudited Condensed Consolidated Financial Statements.
5


M/I HOMES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
(Dollars in thousands)20202019
OPERATING ACTIVITIES:
Net income$86,254  $47,969  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Equity in income from joint venture arrangements(55) (66) 
Mortgage loan originations(773,970) (570,989) 
Proceeds from the sale of mortgage loans766,105  615,714  
Fair value adjustment of mortgage loans held for sale(427) 1,017  
Fair value adjustment of mortgage servicing rights422    
Capitalization of originated mortgage servicing rights(2,233) (1,588) 
Amortization of mortgage servicing rights1,159  657  
Depreciation6,037  5,698  
Amortization of debt issue costs1,228  1,352  
Loss on early extinguishment of debt950    
Stock-based compensation expense2,726  2,594  
Deferred income tax expense253  888  
Change in assets and liabilities:
Inventory(51,603) (89,853) 
Other assets(20,753) 240  
Accounts payable44,062  22,560  
Customer deposits15,067  5,993  
Accrued compensation(16,699) (18,486) 
Other liabilities24,303  (13,083) 
Net cash provided by operating activities82,826  10,617  
INVESTING ACTIVITIES:
Purchase of property and equipment(1,976) (1,599) 
Return of capital from joint venture arrangements363  150  
Investment in joint venture arrangements(19,089) (15,281) 
Net cash used in investing activities(20,702) (16,730) 
FINANCING ACTIVITIES:
Repayment of senior notes due 2021(300,000)   
Net proceeds from issuance of senior notes due 2028400,000    
Proceeds from bank borrowings - homebuilding operations306,800  374,500  
Repayment of bank borrowings - homebuilding operations(372,800) (317,600) 
Net repayments of bank borrowings - financial services operations(2,720) (49,165) 
Proceeds from (principal repayments of) notes payable - other and community development district bond obligations1,213  (845) 
Repurchase of common shares(1,912) (5,150) 
Debt issue costs(8,410) (40) 
Proceeds from exercise of stock options3,645  3,277  
Net cash provided by financing activities25,816  4,977  
Net increase (decrease) in cash, cash equivalents and restricted cash87,940  (1,136) 
Cash, cash equivalents and restricted cash balance at beginning of period6,083  21,529  
Cash, cash equivalents and restricted cash balance at end of period$94,023  $20,393  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest — net of amount capitalized$6,114  $10,585  
Income taxes$1,862  $13,557  
NON-CASH TRANSACTIONS DURING THE PERIOD:
Community development district infrastructure$(1,971) $(1,526) 
Consolidated inventory not owned$3,101  $(6,199) 
Distribution of single-family lots from joint venture arrangements$11,522  $9,723  

See Notes to Unaudited Condensed Consolidated Financial Statements.
6


M/I HOMES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements (the “financial statements”) of M/I Homes, Inc. and its subsidiaries (the “Company”) and notes thereto have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The financial statements include the accounts of the Company. All intercompany transactions have been eliminated. Results for the interim period are not necessarily indicative of results for a full year, including as a result of the novel coronavirus (COVID-19) pandemic which has disrupted, and is expected to continue to disrupt, our business. In the opinion of management, the accompanying financial statements reflect all adjustments (all of which are normal and recurring in nature) necessary for a fair presentation of financial results for the interim periods presented. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”).

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that period. Actual results could differ from these estimates and have a significant impact on the financial condition and results of operations and cash flows. With regard to the Company, estimates and assumptions are inherent in calculations relating to valuation of inventory and investment in unconsolidated joint ventures, property and equipment depreciation, valuation of derivative financial instruments, accounts payable on inventory, accruals for costs to complete inventory, accruals for warranty claims, accruals for self-insured general liability claims, litigation, accruals for health care and workers’ compensation, accruals for guaranteed or indemnified loans, stock-based compensation expense, income taxes, and contingencies. Items that could have a significant impact on these estimates and assumptions include the risks and uncertainties listed in “Item 1A. Risk Factors” in Part I of our 2019 Form 10-K and in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q, as the same may be updated from time to time in our subsequent filings with the SEC.

Recently Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. ASU 2016-13 is effective for our fiscal year beginning January 1, 2020. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU 2018-19”) in November 2018, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”), in April 2019, and ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326) Targeted Transition Relief (“ASU 2019-05”) in May 2019. These ASUs do not change the core principle of the guidance in ASU 2016-13. Instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. These ASUs will have the same effective date and transition requirements as ASU 2016-13. The adoption of ASU 2016-13 on January 1, 2020 did not have a material impact on our consolidated financial statements and disclosures.

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”). ASU 2018-13 modifies the disclosure requirements for fair value measurements and removes the requirement to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels, and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For all entities, ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Our adoption of ASU 2018-13 on January 1, 2020 did not have a material impact on our consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the US
7


GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.
Impact of New Accounting Standards
In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016 (described above). ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. We are currently evaluating the effect of adopting this new accounting guidance, but we do not expect that adoption will have a material impact on our consolidated financial statements and disclosures.

In May 2020, the SEC adopted Release No.33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” (the “Final Rule”). The Final Rule is effective on January 1, 2021. However, voluntary early adoption is permitted. We are currently evaluating the effect of adopting this new accounting guidance, but we do not expect that adoption will have a material impact on our consolidated financial statements and disclosures.

Significant Accounting Policies

We believe that there have been no significant changes to our significant accounting policies during the quarter ended June 30, 2020 as compared to those disclosed in our 2019 Form 10-K.
NOTE 2. Inventory and Capitalized Interest
Inventory
Inventory is recorded at cost, unless events and circumstances indicate that the carrying value of the inventory is impaired, at which point the inventory is written down to fair value (see Note 4 to our financial statements for additional details relating to our procedures for evaluating our inventories for impairment). Inventory includes the costs of land acquisition, land development and home construction, capitalized interest, real estate taxes, direct overhead costs incurred during development and home construction, and common costs that benefit the entire community, less impairments, if any.
A summary of the Company’s inventory as of June 30, 2020 and December 31, 2019 is as follows:
(In thousands)June 30, 2020December 31, 2019
Single-family lots, land and land development costs$843,649  $858,065  
Land held for sale2,385  5,670  
Homes under construction834,661  756,998  
Model homes and furnishings - at cost (less accumulated depreciation: June 30, 2020 - $14,196;
   December 31, 2019 - $12,723)
94,532  98,777  
Community development district infrastructure11,560  13,531  
Land purchase deposits32,988  28,532  
Consolidated inventory not owned11,035  7,934  
Total inventory$1,830,810  $1,769,507  

Single-family lots, land and land development costs include raw land that the Company has purchased to develop into lots, costs incurred to develop the raw land into lots, and lots for which development has been completed, but which have not yet been used to start construction of a home.
Homes under construction include homes that are in various stages of construction. As of June 30, 2020 and December 31, 2019, we had 1,181 homes (with a carrying value of $210.2 million) and 1,459 homes (with a carrying value of $304.0 million), respectively, included in homes under construction that were not subject to a sales contract.
Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models. The amount also includes the net book value of furnishings included in our model homes. Depreciation on model home furnishings is recorded using an accelerated method over the estimated useful life of the assets, which is typically three years.
8


We own lots in certain communities in Florida that have Community Development Districts (“CDDs”). The Company records a liability for the estimated developer obligations that are probable and estimable and user fees that are required to be paid or transferred at the time the parcel or unit is sold to an end user.  The Company reduces this liability at the time of closing and the transfer of the property.  The Company recorded an $11.6 million liability and a $13.5 million liability related to these CDD bond obligations as of June 30, 2020 and December 31, 2019, respectively, along with the related inventory infrastructure.

Land purchase deposits include both refundable and non-refundable amounts paid to third party sellers relating to the purchase of land. On an ongoing basis, the Company evaluates the land option agreements relating to the land purchase deposits. The Company expenses any deposits and accumulated pre-acquisition costs relating to such agreements in the period when the Company makes the decision not to proceed with the purchase of land under an agreement.
Capitalized Interest
The Company capitalizes interest during land development and home construction.  Capitalized interest is charged to land and housing costs and expensed as the related inventory is delivered to a third party.  The summary of capitalized interest for the three and six months ended June 30, 2020 and 2019 is as follows:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2020201920202019
Capitalized interest, beginning of period$22,199