• Tri Pointe Homes, Inc. Reports 2022 Third Quarter Results

    Source: Nasdaq GlobeNewswire / 27 Oct 2022 05:00:01   America/Chicago

    -Diluted Earnings Per Share of $1.45-
    -Home Sales Revenue of $1.1 Billion-
    -Homebuilding Gross Margin Percentage of 27.1%-
    -Backlog Dollar Value of $2.4 Billion-

    INCLINE VILLAGE, Nev., Oct. 27, 2022 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the third quarter ended September 30, 2022.

    “Tri Pointe Homes delivered strong profitability in the third quarter of 2022 with net income available to common stockholders of $149 million, or $1.45 in diluted earnings per share, representing a 24% increase in diluted earnings per share over the third quarter of 2021,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “We achieved these outstanding results through year-over-year improvements to home sales revenue, homebuilding gross margin and SG&A leverage. We also ended the quarter in a great position for a strong fourth quarter performance, thanks to a healthy backlog valued at over $2.4 billion.”

    Mr. Bauer continued, “As the housing market continued to weaken due to the rapid rise in interest rates, our order demand slowed during the quarter. To navigate today’s reality, we have implemented several tactics designed to help our customers purchase and close their homes. Our main goals for the remainder of the year will be to close homes in backlog and generate cash from operations, while staying price competitive at our communities by utilizing incentives and targeted pricing. We will also continue to streamline our cost structure and adjust our land pipeline to reflect the current demand environment. With this comprehensive plan in place, coupled with our strong balance sheet and experienced leadership team, we are confident that Tri Pointe is well positioned for success over the long term.”

    Results and Operational Data for Third Quarter 2022 and Comparisons to Third Quarter 2021

    • Net income available to common stockholders was $149.2 million, or $1.45 per diluted share, compared to $133.2 million, or $1.17 per diluted share
    • Home sales revenue of $1.1 billion compared to $1.0 billion, an increase of 3%
      • New home deliveries of 1,463 homes compared to 1,632 homes, a decrease of 10%
      • Average sales price of homes delivered of $723,000 compared to $630,000, an increase of 15%
    • Homebuilding gross margin percentage of 27.1% compared to 26.3%, an increase of 80 basis points
      • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 29.9%*
    • SG&A expense as a percentage of homes sales revenue of 9.1% compared to 9.6%, a decrease of 50 basis points
    • Net new home orders of 681 compared to 1,349, a decrease of 50%
    • Active selling communities averaged 128.3 compared to 109.0, an increase of 18%
      • Net new home orders per average selling community were 5.3 orders (1.8 monthly) compared to 12.4 orders (4.1 monthly)
      • Cancellation rate of 27% compared to 9%
    • Backlog units at quarter end of 3,044 homes compared to 3,619, a decrease of 16%
      • Dollar value of backlog at quarter end flat at $2.4 billion
      • Average sales price of homes in backlog at quarter end of $797,000 compared to $671,000, an increase of 19%
    • Ratios of debt-to-capital and net debt-to-net capital of 33.8% and 29.7%*, respectively, as of September 30, 2022
    • Repurchased 948,911 shares of common stock at a weighted average price per share of $17.66 for an aggregate dollar amount of $16.8 million in the three months ended September 30, 2022
    • Ended the third quarter of 2022 with total liquidity of $914.3 million, including cash and cash equivalents of $228.1 million and $686.2 million of availability under our revolving credit facility
    *See “Reconciliation of Non-GAAP Financial Measures”

    “Our team members once again demonstrated their ability to execute in a difficult operating environment in the third quarter, as we met or exceeded our stated guidance for new home deliveries, home sales gross margin and SG&A leverage,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “While we expect the demand environment to remain choppy in the near term, we remain confident that the long-term macro environment for the housing industry continues to be very bright due to the lack of supply and the housing deficit that has resulted from new home construction failing to meet the pace of household formations since 2009, coupled with the high cost of rental alternatives. We are positioning our company to take advantage of these long-term opportunities and feel that we have the right people, resources and strategies in place to be successful.”

    Outlook

    For the fourth quarter, the Company anticipates delivering between 1,700 and 1,900 homes at an average sales price between $700,000 and $715,000. The Company expects homebuilding gross margin percentage to be in the range of 25.0% to 26.0% for the fourth quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 8.0% to 9.0%. Finally, the Company expects its effective tax rate for the fourth quarter to be in the range of 24.0% to 25.0%.

    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, October 27, 2022.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial 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 Third Quarter 2022 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 13733444. 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, most recently in 2019. The company made Fortune magazine’s 2017 100 Fastest-Growing Companies list, was named as a Great Place to Work-Certified™ company in both 2021 and 2022 and was selected by Great Place to Work® as one of the Best Workplaces for Millennials™ in 2022, Best Workplaces in Construction™ in 2022 and Best Workplaces for Women™ in 2022. 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 the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the emergence and spread of new strains or variants of COVID-19, the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and acceptance of effective vaccines, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the effects of general economic conditions, including employment rates, housing starts, interest rate levels, 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, particularly within California; 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 and labor; 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 outbreaks of contagious diseases, 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:

    Drew Mackintosh, Mackintosh Investor Relations
    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 September 30,
    		 Nine Months Ended September 30,
      2022   2021   Change  % Change   2022   2021   Change  % Change 
    Operating Data:(unaudited)
    Home sales revenue$1,057,491  $1,028,950  $28,541  3% $2,787,386  $2,754,932  $32,454  1%
    Homebuilding gross margin$286,343  $270,926  $15,417  6%  $754,226  $690,337  $63,889  9%
    Homebuilding gross margin % 27.1%  26.3%  0.8%     27.1%  25.1%  2.0%   
    Adjusted homebuilding gross margin %* 29.9%   28.8%   1.1%      29.7%   27.9%   1.8%    
    SG&A expense$96,736  $98,365  $(1,629)  (2)%  $272,783  $276,926  $(4,143)  (1)%
    SG&A expense as a % of home sales
    revenue    		 9.1%   9.6%   (0.5)%      9.8%   10.1%   (0.3)%    
    Net income available to common stockholders$149,226  $133,156  $16,070  12%  $373,087  $321,827  $51,260  16%
    Adjusted EBITDA*$237,369  $215,880  $21,489  10%  $604,365  $543,945  $60,420  11%
    Interest incurred$31,893  $24,280  $7,613  31%  $89,235  $68,017  $21,218  31%
    Interest in cost of home sales$26,531  $25,656  $875  3%  $68,559  $77,185  $(8,626)  (11)%
                                  
    Other Data:                             
    Net new home orders 681   1,349   (668)  (50)%   3,933   4,958   (1,025)  (21)%
    New homes delivered 1,463   1,632   (169)  (10)%   4,047   4,303   (256)  (6)%
    Average sales price of homes delivered$723  $630  $93  15%  $689  $640  $49  8%
    Cancellation rate 27%   9%   18%      15%   7%   8%    
    Average selling communities 128.3   109.0   19.3  18%   120.7   112.1   8.6  8%
    Selling communities at end of period 133   109   24  22%                
    Backlog (estimated dollar value)$2,427,301  $2,428,412  $(1,111)  0%                
    Backlog (homes) 3,044   3,619   (575)  (16)%                
    Average sales price in backlog$797  $671  $126  19%                
                                  
      September 30,   December 31,                       
      2022   2021   Change  % Change                
    Balance Sheet Data:(unaudited)               
    Cash and cash equivalents$228,137  $681,528  $(453,391)  (67)%                
    Real estate inventories$3,608,305  $3,054,743  $553,562  18%                
    Lots owned or controlled 37,269   41,675   (4,406)  (11)%                
    Homes under construction (1) 4,120   3,632   488  13%                
    Homes completed, unsold 102   27   75  278%                
    Debt$1,339,752  $1,337,723  $2,029  0%                
    Stockholders’ equity$2,625,730  $2,447,621  $178,109  7%                
    Book capitalization$3,965,482  $3,785,344  $180,138  5%                
    Ratio of debt-to-capital 33.8%   35.3%   (1.5)%                   
    Ratio of net debt-to-net capital* 29.7%   21.1%   8.6%                   

    __________
    (1)    Homes under construction included 85 models at both September 30, 2022 and December 31, 2021, respectively.
    *      See “Reconciliation of Non-GAAP Financial Measures”

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

     September 30, December 31,
      2022  2021
    Assets(unaudited)  
    Cash and cash equivalents$228,137 $681,528
    Receivables 169,496  116,996
    Real estate inventories 3,608,305  3,054,743
    Investments in unconsolidated entities 132,998  118,095
    Goodwill and other intangible assets, net 156,603  156,603
    Deferred tax assets, net 57,095  57,096
    Other assets 173,404  151,162
    Total assets$4,526,038 $4,336,223
        
    Liabilities   
    Accounts payable$64,109 $84,854
    Accrued expenses and other liabilities 494,727  466,013
    Loans payable 250,000  250,504
    Senior notes 1,089,752  1,087,219
    Total liabilities 1,898,588  1,888,590
        
    Commitments and contingencies   
        
    Equity   
    Stockholders’ equity:   
    Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively —  —
    Common stock, $0.01 par value, 500,000,000 shares authorized; 100,913,958 and 109,644,474 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively 1,009  1,096
    Additional paid-in capital —  91,077
    Retained earnings 2,624,721  2,355,448
    Total stockholders’ equity 2,625,730  2,447,621
    Noncontrolling interests 1,720  12
    Total equity 2,627,450  2,447,633
    Total liabilities and equity$4,526,038 $4,336,223

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

     Three Months Ended September 30, Nine Months Ended September 30,
      2022   2021   2022   2021 
    Homebuilding:       
    Home sales revenue$1,057,491  $1,028,950  $2,787,386  $2,754,932 
    Land and lot sales revenue 2,626   581   4,337   7,520 
    Other operations revenue 674   646   2,021   1,969 
    Total revenues 1,060,791   1,030,177   2,793,744   2,764,421 
    Cost of home sales 771,148   758,024   2,033,160   2,064,595 
    Cost of land and lot sales 1,256   891   2,075   5,918 
    Other operations expense 670   801   2,020   2,111 
    Sales and marketing 41,950   44,875   112,712   130,824 
    General and administrative 54,786   53,490   160,071   146,102 
    Homebuilding income from operations 190,981   172,096   483,706   414,871 
    Equity in loss of unconsolidated entities (122)  (43)  (34)  (72)
    Other income, net 463   171   852   428 
    Homebuilding income before income taxes 191,322   172,224   484,524   415,227 
    Financial Services:       
    Revenues 11,005   3,016   31,985   7,802 
    Expenses 5,827   1,618   17,457   4,510 
    Equity in income of unconsolidated entities —   3,946   46   10,586 
    Financial services income before income taxes 5,178   5,344   14,574   13,878 
    Income before income taxes 196,500   177,568   499,098   429,105 
    Provision for income taxes (45,923)  (44,412)  (122,084)  (107,278)
    Net income 150,577   133,156   377,014   321,827 
    Net income attributable to noncontrolling interests (1,351)  —   (3,927)  — 
    Net income available to common stockholders$149,226  $133,156  $373,087  $321,827 
    Earnings per share       
    Basic$1.47  $1.18  $3.60  $2.77 
    Diluted$1.45  $1.17  $3.57  $2.75 
    Weighted average shares outstanding       
    Basic 101,242,708   112,781,663   103,555,717   116,296,265 
    Diluted 102,661,222   113,782,251   104,526,594   117,188,893 

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

     Three Months Ended September 30, Nine Months Ended September 30,
     2022 2021 2022 2021
     New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price
    Arizona166 $773 187 $685 363 $751 570 $667
    California636  768 708  646 1,729  718 1,863  674
    Nevada122  771 180  611 363  731 381  607
    Washington46  853 76  983 172  978 223  984
    West total970  773 1,151  669 2,627  742 3,037  687
    Colorado82  753 55  589 201  699 154  584
    Texas250  571 274  492 788  527 721  483
    Central total332  616 329  508 989  562 875  501
    Carolinas(1)80  469 25  386 152  464 64  383
    Washington D.C. Area(2)81  805 127  643 279  762 327  628
    East total161  638 152  601 431  657 391  588
    Total1,463 $723 1,632 $630 4,047 $689 4,303 $640
                    
     Three Months Ended September 30, Nine Months Ended September 30,
     2022 2021 2022 2021
     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
    Arizona74  13.5 182  13.2 484  13.5 676  14.4
    California275  53.7 545  38.3 1,577  47.5 1,865  38.9
    Nevada56  6.8 133  10.2 317  7.6 568  11.1
    Washington34  3.0 68  6.5 103  2.8 229  5.7
    West total439  77.0 928  68.2 2,481  71.4 3,338  70.1
    Colorado15  7.3 55  6.5 180  7.7 218  5.7
    Texas123  23.5 238  21.5 691  22.8 945  22.6
    Central total138  30.8 293  28.0 871  30.5 1,163  28.3
    Carolinas(1)76  13.7 41  3.0 372  11.3 129  3.1
    Washington D.C. Area(2)28  6.8 87  9.8 209  7.5 328  10.6
    East total104  20.5 128  12.8 581  18.8 457  13.7
    Total681  128.3 1,349  109.0 3,933  120.7 4,958  112.1

    (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 September 30, 2022 As of September 30, 2021
     Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price    		 Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price
    Arizona641 $531,135 $829 585 $438,093 $749
    California884  836,320  946 1,260  843,994  670
    Nevada280  232,850  832 323  226,035  700
    Washington60  48,387  806 145  155,172  1,070
    West total1,865  1,648,692  884 2,313  1,663,294  719
    Colorado163  128,733  790 190  135,851  715
    Texas539  346,530  643 722  364,537  505
    Central total702  475,263  677 912  500,388  549
    Carolinas(1)341  161,675  474 80  34,358  429
    Washington D.C. Area(2)136  141,671  1,042 314  230,372  734
    East total477  303,346  636 394  264,730  672
    Total3,044 $2,427,301 $797 3,619 $2,428,412 $671
                
     September 30, December 31,        
     2022  2021        
    Lots Owned or Controlled:           
    Arizona3,355  4,607        
    California12,863  15,091        
    Nevada1,815  2,161        
    Washington891  1,010        
    West total18,924  22,869        
    Colorado1,973  1,683        
    Texas10,994  12,297        
    Central total12,967  13,980        
    Carolinas(1)3,929  3,458        
    Washington D.C. Area(2)1,449  1,368        
    East total5,378  4,826        
    Total37,269  41,675        
                
     September 30, December 31,        
     2022  2021        
    Lots by Ownership Type:           
    Lots owned20,698  22,136        
    Lots controlled (3)16,571  19,539        
    Total37,269  41,675        

    (1)         Carolinas comprises North Carolina and South Carolina.
    (2)         Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.
    (3)         As of September 30, 2022 and December 31, 2021, lots controlled included lots that were under land option contracts or purchase contracts. As of September 30, 2022 and December 31, 2021, lots controlled for Central include 3,388 and 2,950 lots, respectively, and lots controlled for East include 154 and 179 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 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 September 30,
      2022  %  2021  %
     (dollars in thousands)
    Home sales revenue$1,057,491  100.0% $1,028,950  100.0%
    Cost of home sales 771,148  72.9%  758,024  73.7%
    Homebuilding gross margin 286,343  27.1%  270,926  26.3%
    Add:  interest in cost of home sales 26,531  2.5%  25,656  2.5%
    Add:  impairments and lot option abandonments 3,034  0.3%  268  0.0%
    Adjusted homebuilding gross margin$315,908  29.9% $296,850  28.8%
    Homebuilding gross margin percentage 27.1%    26.3%  
    Adjusted homebuilding gross margin percentage 29.9%    28.8%  


     Nine Months Ended September 30,
      2022  %  2021  %
    Home sales revenue$2,787,386  100.0% $2,754,932  100.0%
    Cost of home sales 2,033,160  72.9%  2,064,595  74.9%
    Homebuilding gross margin 754,226  27.1%  690,337  25.1%
    Add:  interest in cost of home sales 68,559  2.5%  77,185  2.8%
    Add:  impairments and lot option abandonments 4,495  0.2%  713  0.0%
    Adjusted homebuilding gross margin$827,280  29.7% $768,235  27.9%
    Homebuilding gross margin percentage 27.1%    25.1%  
    Adjusted homebuilding gross margin percentage 29.7%    27.9%  

    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.

     September 30, 2022 December 31, 2021
    Loans payable$250,000  $250,504 
    Senior notes 1,089,752   1,087,219 
    Total debt 1,339,752   1,337,723 
    Stockholders’ equity 2,625,730   2,447,621 
    Total capital$3,965,482  $3,785,344 
    Ratio of debt-to-capital(1) 33.8%  35.3%
        
    Total debt$1,339,752  $1,337,723 
    Less: Cash and cash equivalents (228,137)  (681,528)
    Net debt 1,111,615   656,195 
    Stockholders’ equity 2,625,730   2,447,621 
    Net capital$3,737,345  $3,103,816 
    Ratio of net debt-to-net capital(2) 29.7%  21.1%

    __________
    (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 September 30, Nine Months Ended September 30,
      2022   2021   2022   2021 
     (in thousands)
    Net income available to common stockholders$149,226  $133,156  $373,087  $321,827 
    Interest expense:       
    Interest incurred 31,893   24,280   89,235   68,017 
    Interest capitalized (31,893)  (24,280)  (89,235)  (68,017)
    Amortization of interest in cost of sales 26,611   25,655   68,639   77,457 
    Provision for income taxes 45,923   44,412   122,084   107,278 
    Depreciation and amortization 6,615   7,979   18,641   24,098 
    EBITDA 228,375   211,202   582,451   530,660 
    Amortization of stock-based compensation 5,717   4,410   16,740   12,572 
    Impairments and lot option abandonments 3,277   268   5,174   713 
    Adjusted EBITDA$237,369  $215,880  $604,365  $543,945 


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