• Tri Pointe Homes, Inc. Reports 2023 Second Quarter Results

    Source: Nasdaq GlobeNewswire / 27 Jul 2023 06:00:30   America/New_York

    -Net New Home Orders of 1,912 on a Monthly Absorption Rate of 4.5-
    -New Home Deliveries of 1,173-
    -Home Sales Revenue of $819 Million-
    -Diluted Earnings Per Share of $0.60-
    -Debt-to-Capital Ratio of 32.3% and Total Liquidity of $1.7 Billion-

    INCLINE VILLAGE, Nev., July 27, 2023 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2023.

    “Tri Pointe delivered strong results for the second quarter, surpassing our delivery guidance and leading to home sales revenue of $819 million while generating $61 million in net income available to common stockholders, or $0.60 per diluted share,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “The healthy buyer demand we saw in the first part of the year continued a strong seasonal trend through the second quarter, resulting in a 41% increase in net new home orders compared to the same prior-year period, and an 18% increase sequentially from the first quarter of 2023. We attribute these outstanding results to several underlying factors fueling today’s housing market, the foremost of which is the persistent limited supply of overall housing that falls short of current demand. This demand is largely being powered by a combination of new household formations, the entry of Gen Z into the home-buying market, and Millennials reaching their prime home-buying age. Additionally, with stabilized mortgage rates, consumers have adjusted to mid-six to low-seven percent interest rates, setting a new normal in the market.”

    Mr. Bauer continued, “An important component to the supply/demand equation is the scarcity of resale home supply, with reports indicating that new listings are down nationwide by 27% due to the significant number of existing homebuyers who are not selling as a result of their locked-in rates which are well below current levels. This scarcity of resale homes has significantly boosted the homebuilding industry’s market share, with newly constructed homes making up 33% of inventory compared to the typical 13% average, as reported by the National Association of Home Builders.”

    “Demand for the quarter was broad-based across our geographic footprint with an absorption rate of 4.5 homes per community per month. In addition, we raised net pricing at 73% of our selling communities during the quarter, while expanding our ending community count by 18%,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “As the homebuilding industry gains momentum, driven by favorable market dynamics and demographic factors, we remain committed to enhancing operational efficiencies, fostering our company culture, and continuously innovating our product offerings to cater to the evolving lifestyles of today’s discerning consumers.”

    Mr. Bauer concluded, “As we enter the second half of 2023, we believe that our industry’s share of the housing market will continue to increase and that the current supply/demand imbalance will continue into the foreseeable future. Through the rest of the year, we will continue to prioritize operational efficiency and cost management as supply chains continue to normalize. Furthermore, our balance sheet and liquidity reached record levels, allowing us flexibility in our efforts to balance growth and shareholder returns.”

    Results and Operational Data for Second Quarter 2023 and Comparisons to Second Quarter 2022

    • Net income available to common stockholders was $60.7 million, or $0.60 per diluted share, compared to $136.4 million, or $1.33 per diluted share
    • Home sales revenue of $819.1 million compared to $1.0 billion, a decrease of 18%
      • New home deliveries of 1,173 homes compared to 1,485 homes, a decrease of 21%
      • Average sales price of homes delivered of $698,000 compared to $677,000, an increase of 3%
    • Homebuilding gross margin percentage of 20.4% compared to 27.2%, a decrease of 680 basis points. The current year period includes an $11.5 million impairment related to a single community in the Bay Area of California.
      • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 24.9%*
    • SG&A expense as a percentage of homes sales revenue of 11.9% compared to 9.5%, an increase of 240 basis points
    • Net new home orders of 1,912 compared to 1,356, an increase of 41%
    • Active selling communities averaged 140.3 compared to 121.8, an increase of 15%
      • Net new home orders per average selling community were 13.6 orders (4.5 monthly) compared to 11.1 orders (3.7 monthly)
      • Cancellation rate of 8% compared to 16%
    • Backlog units at quarter end of 2,765 homes compared to 3,826, a decrease of 28%
      • Dollar value of backlog at quarter end of $1.9 billion compared to $3.0 billion, a decrease of 36%
      • Average sales price of homes in backlog at quarter end of $695,000 compared to $779,000, a decrease of 11%
    • Ratios of debt-to-capital and net debt-to-net capital of 32.3% and 12.1%*, respectively, as of June 30, 2023
    • Repurchased 1,137,478 shares of common stock at a weighted average price per share of $28.43 for an aggregate dollar amount of $32.3 million in the three months ended June 30, 2023
    • Ended the second quarter of 2023 with total liquidity of $1.7 billion, including cash and cash equivalents of $981.6 million and $695.0 million of availability under our revolving credit facility
    *See “Reconciliation of Non-GAAP Financial Measures”

    Outlook

    For the third quarter, the Company anticipates delivering between 1,000 and 1,100 homes at an average sales price between $690,000 and $700,000. The Company expects homebuilding gross margin percentage to be in the range of 21.0% to 22.0% for the third quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 12.0% to 13.0%. Finally, the Company expects its effective tax rate for the third quarter to be in the range of 26.0% to 27.0%.

    For the full year, the Company anticipates delivering between 5,000 and 5,300 homes at an average sales price between $690,000 and $700,000. The Company expects homebuilding gross margin percentage to be in the range of 21.5% to 22.5% for the full year and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 10.5% to 11.5%. Finally, the Company expects its effective tax rate for the full year to be in the range of 26.0% to 27.0%.

    Earnings Conference Call

    The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Thursday, July 27, 2023. The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, Glenn Keeler, Chief Financial Officer, and Linda Mamet, Chief Marketing Officer. Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Second Quarter 2023 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for two weeks following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13739744. An archive of the webcast will also be available on the Company’s website for a limited time.

    About Tri Pointe Homes, Inc.

    One of the largest homebuilders in the U.S., Tri Pointe Homes, Inc. (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, was named one of the 2023 Fortune 100 Best Companies to Work For®, and made Fortune magazine’s 2017 100 Fastest-Growing Companies list. The company was also named as a Great Place to Work-Certified™ company for three years in a row 2021–2023, and was named on several Great Place to Work® Best Workplaces lists in 2022 and 2023. For more information, please visit TriPointeHomes.com.

    Forward-Looking Statements

    Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; the prices and availability of supply chain inputs, including raw materials, labor and home components; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the occurrence of drought conditions in parts of the western United States; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious disease, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.

    Investor Relations Contact:
    InvestorRelations@TriPointeHomes.com, 949-478-8696

    Media Contact:
    Carol Ruiz, cruiz@newgroundco.com, 310-437-0045


    KEY OPERATIONS AND FINANCIAL DATA
    (dollars in thousands)
    (unaudited)

     Three Months Ended June 30, Six Months Ended June 30,
      2023   2022  Change % Change  2023   2022  Change % Change
    Operating Data:(unaudited)
    Home sales revenue$819,077  $1,004,644  $(185,567) (18)% $1,587,482  $1,729,895  $(142,413) (8)%
    Homebuilding gross margin$167,078  $273,292  $(106,214) (39)% $347,365  $467,883  $(120,518) (26)%
    Homebuilding gross margin % 20.4%  27.2%  (6.8)%    21.9%  27.0% (5.1)%  
    Adjusted homebuilding gross margin %* 24.9%  29.8%  (4.9)%    25.5%  29.6% (4.1)%  
    SG&A expense$97,465  $95,352  $2,113  2% $185,693  $176,047  $9,646  5%
    SG&A expense as a % of home sales revenue 11.9%  9.5%  2.4%    11.7%  10.2%  1.5%  
    Net income available to common stockholders$60,724  $136,383  $(75,659) (55)% $135,466  $223,861  $(88,395) (39)%
    Adjusted EBITDA*$129,928  $220,905  $(90,977) (41)% $263,903  $366,996  $(103,093) (28)%
    Interest incurred$37,394  $28,789  $8,605  30% $74,873  $57,342  $17,531  31%
    Interest in cost of home sales$25,366  $24,963  $403  2% $45,592  $42,028  $3,564  8%
                    
    Other Data:               
    Net new home orders 1,912   1,356   556  41%  3,531   3,252   279  9%
    New homes delivered 1,173   1,485   (312) (21)%  2,238   2,584   (346) (13)%
    Average sales price of homes delivered$698  $677  $21  3% $709  $669  $40  6%
    Cancellation rate 8%  16% (8)%    9%  11% (2)%  
    Average selling communities 140.3   121.8   18.5  15%  138.4   116.7   21.7  19%
    Selling communities at end of period 145   123   22  18%        
    Backlog (estimated dollar value)$1,922,895  $2,981,255  $(1,058,360) (36)%        
    Backlog (homes) 2,765   3,826   (1,061) (28)%        
    Average sales price in backlog$695  $779  $(84) (11)%        
                    
     June 30, December 31,            
      2023   2022  Change % Change        
    Balance Sheet Data:(unaudited)              
    Cash and cash equivalents$981,567  $889,664  $91,903  10%        
    Real estate inventories$3,193,328  $3,173,849  $19,479  1%        
    Lots owned or controlled 32,834   33,794   (960) (3)%        
    Homes under construction (1) 3,131   2,373   758  32%        
    Homes completed, unsold 168   288   (120) (42)%        
    Debt$1,379,835  $1,378,051  $1,784  0%        
    Stockholders’ equity$2,896,111  $2,832,389  $63,722  2%        
    Book capitalization$4,275,946  $4,210,440  $65,506  2%        
    Ratio of debt-to-capital 32.3%  32.7% (0.4)%          
    Ratio of net debt-to-net capital* 12.1%  14.7% (2.6)%          

    __________
    (1)         Homes under construction included 66 and 78 models as of June 30, 2023 and December 31, 2022, respectively.
    *          See “Reconciliation of Non-GAAP Financial Measures”


    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share and per share amounts)

     June 30, December 31,
      2023  2022
    Assets(unaudited)  
    Cash and cash equivalents$981,567 $889,664
    Receivables 117,134  169,449
    Real estate inventories 3,193,328  3,173,849
    Investments in unconsolidated entities 139,959  129,837
    Goodwill and other intangible assets, net 156,603  156,603
    Deferred tax assets, net 34,850  34,851
    Other assets 157,118  165,687
    Total assets$4,780,559 $4,719,940
        
    Liabilities   
    Accounts payable$78,386 $62,324
    Accrued expenses and other liabilities 425,518  443,034
    Loans payable 287,427  287,427
    Senior notes 1,092,408  1,090,624
    Total liabilities 1,883,739  1,883,409
        
    Commitments and contingencies   
        
    Equity   
    Stockholders’ equity:   
    Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively —  —
    Common stock, $0.01 par value, 500,000,000 shares authorized; 99,094,458 and 101,017,708 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 991  1,010
    Additional paid-in capital —  3,685
    Retained earnings 2,895,120  2,827,694
    Total stockholders’ equity 2,896,111  2,832,389
    Noncontrolling interests 709  4,142
    Total equity 2,896,820  2,836,531
    Total liabilities and equity$4,780,559 $4,719,940


    CONSOLIDATED STATEMENT OF OPERATIONS
    (in thousands, except share and per share amounts)
    (unaudited)

     Three Months Ended June 30, Six Months Ended June 30,
      2023   2022   2023   2022 
    Homebuilding:       
    Home sales revenue$819,077  $1,004,644  $1,587,482  $1,729,895 
    Land and lot sales revenue 7,086   114   8,792   1,711 
    Other operations revenue 796   703   1,470   1,347 
    Total revenues 826,959   1,005,461   1,597,744   1,732,953 
    Cost of home sales 651,999   731,352   1,240,117   1,262,012 
    Cost of land and lot sales 7,370   344   8,813   819 
    Other operations expense 782   704   1,447   1,350 
    Sales and marketing 43,241   38,523   85,103   70,762 
    General and administrative 54,224   56,829   100,590   105,285 
    Homebuilding income from operations 69,343   177,709   161,674   292,725 
    Equity in income of unconsolidated entities 42   143   269   88 
    Other income, net 11,093   116   18,697   389 
    Homebuilding income before income taxes 80,478   177,968   180,640   293,202 
    Financial Services:       
    Revenues 10,370   12,228   19,246   20,980 
    Expenses 7,405   6,322   13,236   11,630 
    Equity in income of unconsolidated entities —   —   —   46 
    Financial services income before income taxes 2,965   5,906   6,010   9,396 
    Income before income taxes 83,443   183,874   186,650   302,598 
    Provision for income taxes (21,472)  (45,936)  (48,822)  (76,161)
    Net income 61,971   137,938   137,828   226,437 
    Net income attributable to noncontrolling interests (1,247)  (1,555)  (2,362)  (2,576)
    Net income available to common stockholders$60,724  $136,383  $135,466  $223,861 
    Earnings per share       
    Basic$0.61  $1.33  $1.35  $2.14 
    Diluted$0.60  $1.33  $1.34  $2.12 
    Weighted average shares outstanding       
    Basic 99,598,933   102,164,377   100,305,168   104,731,388 
    Diluted 100,634,964   102,787,919   101,184,993   105,478,446 


    MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY
    (dollars in thousands)
    (unaudited)

     Three Months Ended June 30, Six Months Ended June 30,
     2023 2022 2023 2022
     New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price
    Arizona195 $765 127 $732 330 $773 197 $733
    California352  798 579  698 691  813 1,093  690
    Nevada88  743 157  724 186  753 241  711
    Washington40  733 54  1,092 58  802 126  1,023
    West total675  778 917  731 1,265  793 1,657  723
    Colorado49  732 76  682 93  758 119  662
    Texas278  560 318  511 488  588 538  507
    Central total327  586 394  544 581  615 657  535
    Carolinas(1)142  483 44  462 317  458 72  458
    Washington D.C. Area(2)29  1,176 130  770 75  1,082 198  744
    East total171  600 174  692 392  577 270  668
    Total1,173 $698 1,485 $677 2,238 $709 2,584 $669
                    
     Three Months Ended June 30, Six Months Ended June 30,
     2023 2022 2023 2022
     Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities
    Arizona189  13.7 195  14.2 306  13.4 410  13.6
    California787  49.2 601  49.2 1,488  51.6 1,302  44.7
    Nevada105  8.0 116  7.3 189  7.6 261  8.0
    Washington70  5.8 21  1.8 122  5.4 69  2.4
    West total1,151  76.7 933  72.5 2,105  78.0 2,042  68.7
    Colorado38  6.8 34  8.0 79  6.4 165  8.0
    Texas494  39.0 153  22.0 808  36.1 568  22.1
    Central total532  45.8 187  30.0 887  42.5 733  30.1
    Carolinas(1)188  14.3 170  11.5 439  14.5 296  10.0
    Washington D.C. Area(2)41  3.5 66  7.8 100  3.4 181  7.9
    East total229  17.8 236  19.3 539  17.9 477  17.9
    Total1,912  140.3 1,356  121.8 3,531  138.4 3,252  116.7

    (1)         Carolinas comprises North Carolina and South Carolina.
    (2)         Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.


    MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY, continued
    (dollars in thousands)
    (unaudited)

     As of June 30, 2023 As of June 30, 2022
     Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price    		 Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price
    Arizona354 $276,167 $780 733 $586,871 $801
    California1,095  797,480  728 1,245  1,128,517  906
    Nevada128  94,278  737 346  279,679  808
    Washington99  91,266  922 72  60,188  836
    West total1,676  1,259,191  751 2,396  2,055,255  858
    Colorado36  24,889  691 230  178,845  778
    Texas602  340,938  566 666  408,415  613
    Central total638  365,827  573 896  587,260  655
    Carolinas(1)342  156,759  458 345  162,317  470
    Washington D.C. Area(2)109  141,118  1,295 189  176,423  933
    East total451  297,877  660 534  338,740  634
    Total2,765 $1,922,895 $695 3,826 $2,981,255 $779
                
     June 30, December 31,        
     2023  2022        
    Lots Owned or Controlled:           
    Arizona2,520  2,901        
    California11,123  11,399        
    Nevada1,914  1,634        
    Washington827  827        
    West total16,384  16,761        
    Colorado1,749  1,600        
    Texas9,951  10,361        
    Central total11,700  11,961        
    Carolinas(1)3,525  3,857        
    Washington D.C. Area(2)1,225  1,215        
    East total4,750  5,072        
    Total32,834  33,794        
                
     June 30, December 31,        
     2023  2022        
    Lots by Ownership Type:           
    Lots owned18,378  18,762        
    Lots controlled (3)14,456  15,032        
    Total32,834  33,794        

    (1)         Carolinas comprises North Carolina and South Carolina.
    (2)         Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.
    (3)         As of June 30, 2023 and December 31, 2022, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2023 and December 31, 2022, lots controlled for Central include 3,685 and 3,325 lots, respectively, and lots controlled for East include 93 and 141 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    (unaudited)

    In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

    The following tables reconcile the homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.

     Three Months Ended June 30,
      2023  %  2022  %
     (dollars in thousands)
    Home sales revenue$819,077  100.0% $1,004,644  100.0%
    Cost of home sales 651,999  79.6%  731,352  72.8%
    Homebuilding gross margin 167,078  20.4%  273,292  27.2%
    Add:  interest in cost of home sales 25,366  3.1%  24,963  2.5%
    Add:  impairments and lot option abandonments 11,761  1.4%  972  0.1%
    Adjusted homebuilding gross margin$204,205  24.9% $299,227  29.8%
    Homebuilding gross margin percentage 20.4%    27.2%  
    Adjusted homebuilding gross margin percentage 24.9%    29.8%  


     Six Months Ended June 30,
      2023  %  2022  %
     (dollars in thousands)
    Home sales revenue$1,587,482  100.0% $1,729,895  100.0%
    Cost of home sales 1,240,117  78.1%  1,262,012  73.0%
    Homebuilding gross margin 347,365  21.9%  467,883  27.0%
    Add:  interest in cost of home sales 45,592  2.9%  42,028  2.4%
    Add:  impairments and lot option abandonments 12,478  0.8%  1,461  0.1%
    Adjusted homebuilding gross margin$405,435  25.5% $511,372  29.6%
    Homebuilding gross margin percentage 21.9%    27.0%  
    Adjusted homebuilding gross margin percentage 25.5%    29.6%  


    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
    (unaudited)

    The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.

     June 30, 2023 December 31, 2022
    Loans payable$287,427  $287,427 
    Senior notes 1,092,408   1,090,624 
    Total debt 1,379,835   1,378,051 
    Stockholders’ equity 2,896,111   2,832,389 
    Total capital$4,275,946  $4,210,440 
    Ratio of debt-to-capital(1) 32.3%  32.7%
        
    Total debt$1,379,835  $1,378,051 
    Less: Cash and cash equivalents (981,567)  (889,664)
    Net debt 398,268   488,387 
    Stockholders’ equity 2,896,111   2,832,389 
    Net capital$3,294,379  $3,320,776 
    Ratio of net debt-to-net capital(2) 12.1%  14.7%

    __________
    (1)      The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
    (2)      The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity.

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
    (unaudited)

    The following table calculates the non-GAAP financial measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income available to common stockholders, as reported and prepared in accordance with GAAP. EBITDA means net income available to common stockholders before (a) interest expense, (b) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation and (f) impairments and lot option abandonments. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company’s ability to service debt and obtain financing.

     Three Months Ended June 30, Six Months Ended June 30,
      2023   2022   2023   2022 
     (in thousands)
    Net income available to common stockholders$60,724  $136,383  $135,466  $223,861 
    Interest expense:       
    Interest incurred 37,394   28,789   74,873   57,342 
    Interest capitalized (37,394)  (28,789)  (74,873)  (57,342)
    Amortization of interest in cost of sales 25,681   24,963   45,932   42,028 
    Provision for income taxes 21,472   45,936   48,822   76,161 
    Depreciation and amortization 6,128   6,741   13,182   12,026 
    EBITDA 114,005   214,023   243,402   354,076 
    Amortization of stock-based compensation 4,162   5,751   8,023   11,023 
    Impairments and lot option abandonments 11,761   1,131   12,478   1,897 
    Adjusted EBITDA$129,928  $220,905  $263,903  $366,996 

     


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