• Tri Pointe Homes, Inc. Reports 2023 Fourth Quarter and Full Year Results

    Source: Nasdaq GlobeNewswire / 20 Feb 2024 06:00:53   America/New_York

    Fourth Quarter Highlights 
    -Net New Home Orders Increased 143% to 1,078- 
    -Backlog Units Increased 58% to 2,320, and Backlog Dollar Value Increased 38% to $1.6 Billion- 
    -Active Selling Communities Increased 14% to 155- 
    -New Home Deliveries of 1,813 for Home Sales Revenue of $1.2 Billion- 
    -Homebuilding Gross Margin Percentage of 22.9%- 
    -Diluted Earnings Per Share of $1.36-

    INCLINE VILLAGE, Nev., Feb. 20, 2024 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE: TPH) today announced results for the fourth quarter ended December 31, 2023 and full year 2023.

    “2023 proved to be another strong year for Tri Pointe Homes, capped off by a successful fourth quarter, during which we reported home sales revenue of $1.2 billion, homebuilding gross margin percentage of 22.9%, and diluted earnings per share of $1.36,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “The strong finish to the year was accompanied by a 143% increase in net new home orders for the quarter, which led to a 40% increase for the full year. We ended the year with 155 active selling communities, which was a 14% increase over the prior year. Based on our strong land pipeline with approximately 32,000 owned or controlled lots, we expect to grow our community count by another 10% by the end of 2025.”

    Mr. Bauer continued, “In the fourth quarter of 2023, our industry saw a notable change in mortgage interest rates, peaking above 8% in October, then rapidly decreasing with shifting market sentiment. Order activity subsequently increased as we moved through the quarter and that momentum has continued into 2024, with both January and February off to a strong start.”

    “We remain encouraged by the fundamentals of the housing market, including household formations, strong demand from Millennial and Gen-Z buyers, a more normalized supply chain, and shorter cycle times,” stated Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “These dynamics, along with the lack of resale supply, should continue to support the homebuilding industry, whose market share of total home sales sits at historical highs.”

    Mr. Bauer concluded, “As a growth-oriented company, we are focused on growing scale in our existing markets and targeting new markets through organic startups or M&A. Last year, we announced our organic entry into Utah, and we are actively looking for growth in the Southeast by expanding our footprint into the Coastal Carolinas and Florida markets. We believe our strong balance sheet positions us well to return capital to stockholders through share repurchases, while maintaining sufficient liquidity to expand our market scale and tap into new opportunities that fit within our growth strategy.”

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

    • Net income available to common stockholders was $132.8 million, or $1.36 per diluted share, compared to $203.0 million, or $1.98 per diluted share
    • Home sales revenue for the quarter was $1.2 billion, a decrease of 17%
      • New home deliveries of 1,813 homes compared to 2,016 homes, a decrease of 10%
      • Average sales price of homes delivered of $685,000 compared to $746,000
    • Homebuilding gross margin percentage of 22.9% compared to 25.0%, a decrease of 210 basis points
      • Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 26.5%*
    • Selling, general and administrative (“SG&A”) expense as a percentage of homes sales revenue of 9.3% compared to 7.6%, an increase of 170 basis points
    • Net new home orders of 1,078 compared to 444, an increase of 143%
    • Active selling communities averaged 159.3 compared to 136.8, an increase of 16%
      • Net new home orders per average selling community increased by 109% to 6.8 orders (2.3 monthly) compared to 3.2 orders (1.1 monthly)
      • Cancellation rate of 12% compared to 42%
    • Backlog units at quarter end of 2,320 homes compared to 1,472, an increase of 58%
      • Dollar value of backlog at quarter end of $1.6 billion compared to $1.2 billion, an increase of 38%
      • Average sales price in backlog at quarter end of $695,000 compared to $791,000, a decrease of 12%
    • Ratios of debt-to-capital and net debt-to-net capital of 31.5% and 14.6%*, respectively, as of December 31, 2023
    • Repurchased 1,836,177 shares of common stock at an average price of $27.23 for an aggregate dollar amount of $50.0 million during the quarter ended December 31, 2023
    • Ended fourth quarter of 2023 with total liquidity of $1.6 billion, including cash of $869.0 million and $697.7 million of availability under the Company’s unsecured revolving credit facility

    *  See “Reconciliation of Non-GAAP Financial Measures”

    Results and Operational Data for Full Year 2023 and Comparisons to Full Year 2022

    • Net income available to common stockholders was $343.7 million, or $3.45 per diluted share, compared to $576.1 million, or $5.54 per diluted share
    • Home sales revenue of $3.7 billion compared to $4.3 billion, a decrease of 15%
      • New home deliveries of 5,274 homes compared to 6,063 homes, a decrease of 13%
      • Average sales price of homes delivered of $693,000 compared to $708,000, a decrease of 2%
    • Homebuilding gross margin percentage of 22.3% compared to 26.4%, a decrease of 410 basis points
      • Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 25.9%*
    • SG&A expense as a percentage of homes sales revenue of 11.0% compared to 9.0%, an increase of 200 basis points
    • Net new home orders of 6,122 compared to 4,377, an increase of 40%
    • Active selling communities averaged 147.5 compared to 124.7, an increase of 18%
      • Net new home orders per average selling community decreased by 21% to 41.5 orders (3.5 monthly) compared to 35.1 orders (2.9 monthly)
      • Cancellation rate of 10% compared to 19%
    • Repurchased 6,301,275 shares of common stock at an average price of $27.68 for an aggregate dollar amount of $174.4 million during the full year ended December 31, 2023

    *  See “Reconciliation of Non-GAAP Financial Measures”

    Outlook

    For the first quarter of 2024, the Company anticipates delivering between 1,200 and 1,400 homes at an average sales price between $645,000 and $655,000. The Company expects its homebuilding gross margin percentage to be in the range of 22.0% to 23.0% for the first quarter of 2024 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 12.0% to 13.0%. Lastly, the Company expects its effective tax rate for the first quarter of 2024 to be approximately 26.5%.

    For the full year of 2024, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between $645,000 and $655,000. The Company expects its homebuilding gross margin percentage to be in the range of 21.5% to 22.5% for the full year of 2024 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 10.5% to 11.5%. Lastly, the Company expects its effective tax rate for the year to be approximately 26.5%.

    Earnings Conference Call

    The Company will host a conference call via live webcast for investors and other interested parties beginning at 7:00 a.m. Pacific Time (10:00 a.m. Eastern Time) on Tuesday, February 20, 2024. 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 presentation slides on the internet through 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 Fourth 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 one week following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13743992. An archive of the webcast will also be available on the Company’s website for a limited time.

    About Tri Pointe Homes®

    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 to the 2024 Fortune World’s Most Admired Companies™ list, is one of the 2023 Fortune 100 Best Companies to Work For®, and was designated as one of the 2023 PEOPLE Companies That Care®. The company was also named as a Great Place To Work-Certified™ company for three years in a row (2021 through 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, 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 California; 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 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:Media Contact:
      
    InvestorRelations@TriPointeHomes.com, 949-478-8696Carol Ruiz, cruiz@newgroundco.com, 310-437-0045


    KEY OPERATIONS AND FINANCIAL DATA
    (dollars in thousands)
    (unaudited)
     
     Three Months Ended December 31, Year Ended December 31,
     2023
    		 2022
    		 Change %
    Change    		 2023
    		 2022
    		 Change %
    Change
    Operating Data:               
    Home sales revenue$1,241,258  $1,504,177  $(262,919) (17)% $3,654,035  $4,291,563  $(637,528) (15)%
    Homebuilding gross margin$283,936  $376,756  $(92,820) (25)% $815,522  $1,130,982  $(315,460) (28)%
    Homebuilding gross margin % 22.9%  25.0%  (2.1)%    22.3%  26.4%  (4.1)%  
    Adjusted homebuilding gross margin %* 26.5%  27.9%  (1.4)%    25.9%  29.0%  (3.1)%  
    SG&A expense$115,456  $114,726  $730  1% $402,382  $387,509  $14,873  4%
    SG&A expense as a % of home sales revenue 9.3%  7.6%  1.7%    11.0%  9.0%  2.0%  
    Net income available to common stockholders$132,834  $202,973  $(70,139) (35)% $343,702  $576,060  $(232,358) (40)%
    Adjusted EBITDA*$236,146  $324,716  $(88,570) (27)% $639,727  $929,081  $(289,354) (31)%
    Interest incurred$35,377  $35,294  $83  0% $147,169  $124,529  $22,640  18%
    Interest in cost of home sales$43,516  $38,036  $5,480  14% $116,143  $106,595  $9,548  9%
                    
    Other Data:               
    Net new home orders 1,078   444   634  143%  6,122   4,377   1,745  40%
    New homes delivered 1,813   2,016   (203) (10)%  5,274   6,063   (789) (13)%
    Average sales price of homes delivered$685  $746  $(61) (8)% $693  $708  $(15) (2)%
    Cancellation rate 12%  42%  (30)%    10%  19%  (9)%  
    Average selling communities 159.3   136.8   22.5  16%  147.5   124.7   22.8  18%
    Selling communities at end of period 155   136   19  14%        
    Backlog (estimated dollar value)$1,612,114  $1,164,678  $447,436  38%        
    Backlog (homes) 2,320   1,472   848  58%        
    Average sales price in backlog$695  $791  $(96) (12)%        
                    
     December 31, 
    2023    		 December 31, 
    2022    		 Change          
    Balance Sheet Data:               
    Cash and cash equivalents$868,953  $889,664  $(20,711)          
    Real estate inventories$3,337,483  $3,173,849  $163,634           
    Lots owned or controlled 31,960   33,794   (1,834)          
    Homes under construction(1) 3,088   2,373   715           
    Homes completed, unsold 263   288   (25)          
    Total debt, net$1,382,586  $1,378,051  $4,535           
    Stockholders' equity$3,010,958  $2,832,389  $178,569           
    Book capitalization$4,393,544  $4,210,440  $183,104           
    Ratio of debt-to-capital 31.5%  32.7%  (1.2)%          
    Ratio of net debt-to-net-capital* 14.6%  14.7%  (0.1)%          
                        

    _____________________________________
    (1) Homes under construction included 69 and 78 models at December 31, 2023 and December 31, 2022, respectively.
    * See “Reconciliation of Non-GAAP Financial Measures”

    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share amounts)
     
     December 31,
    2023    		 December 31,
    2022
    Assets(unaudited)  
    Cash and cash equivalents$868,953 $889,664
    Receivables 224,636  169,449
    Real estate inventories 3,337,483  3,173,849
    Investments in unconsolidated entities 131,824  129,837
    Goodwill and other intangible assets, net 156,603  156,603
    Deferred tax assets, net 37,996  34,851
    Other assets 157,093  165,687
    Total assets$4,914,588 $4,719,940
        
    Liabilities   
    Accounts payable$64,833 $62,324
    Accrued expenses and other liabilities 453,531  443,034
    Loans payable 288,337  287,427
    Senior notes 1,094,249  1,090,624
    Total liabilities 1,900,950  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 December 31, 2023 and December 31, 2022, respectively —  —
    Common stock, $0.01 par value, 500,000,000 shares authorized; 95,530,512 and 101,017,708 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 955  1,010
    Additional paid-in capital 0  3,685
    Retained earnings 3,010,003  2,827,694
    Total stockholders' equity 3,010,958  2,832,389
    Noncontrolling interests 2,680  4,142
    Total equity 3,013,638  2,836,531
    Total liabilities and equity$4,914,588 $4,719,940
     


    CONSOLIDATED STATEMENT OF OPERATIONS
    (in thousands, except share and per share amounts)
    (unaudited)
     
     Three Months Ended December 31, Year Ended December 31,
     2023
    		 2022
    		 2023
    		 2022
    Homebuilding:       
    Home sales revenue$1,241,258  $1,504,177  $3,654,035  $4,291,563 
    Land and lot sales revenue 1,691   771   12,197   5,108 
    Other operations revenue 752   674   2,971   2,695 
    Total revenues 1,243,701   1,505,622   3,669,203   4,299,366 
    Cost of home sales 957,322   1,127,421   2,838,513   3,160,581 
    Cost of land and lot sales 1,796   —   12,083   2,075 
    Other operations expense 723   665   2,894   2,685 
    Sales and marketing 56,411   62,293   184,388   175,005 
    General and administrative 59,045   52,433   217,994   212,504 
    Homebuilding income from operations 168,404   262,810   413,331   746,516 
    Equity in (loss) income of unconsolidated entities (369)  346   (97)  312 
    Other income, net 9,085   1,455   39,446   2,307 
    Homebuilding income before income taxes 177,120   264,611   452,680   749,135 
    Financial Services:       
    Revenues 15,997   17,182   46,001   49,167 
    Expenses 11,959   7,679   31,322   25,136 
    Equity in income of unconsolidated entities —   —   —   46 
    Financial services income before income taxes 4,038   9,503   14,679   24,077 
    Income before income taxes 181,158   274,114   467,359   773,212 
    Provision for income taxes (46,400)  (68,719)  (118,164)  (190,803)
    Net income 134,758   205,395   349,195   582,409 
    Net income attributable to noncontrolling interests (1,924)  (2,422)  (5,493)  (6,349)
    Net income available to common stockholders$132,834  $202,973  $343,702  $576,060 
    Earnings per share       
    Basic$1.38  $2.01  $3.48  $5.60 
    Diluted$1.36  $1.98  $3.45  $5.54 
    Weighted average shares outstanding       
    Basic 96,142,092   100,947,993   98,679,477   102,898,423 
    Diluted 97,438,742   102,456,279   99,695,662   104,003,652 
                    


    MARKET DATA BY REPORTING SEGMENT & STATE
    (dollars in thousands)
    (unaudited)
     
     Three Months Ended December 31, Year Ended December 31,
     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
    Arizona133 $764 266 $774 630 $781 629 $761
    California870  722 812  820 1,986  745 2,541  751
    Nevada108  670 159  796 397  729 522  751
    Washington67  889 36  888 173  848 208  962
    West total1,178  731 1,273  809 3,186  756 3,900  764
    Colorado34  684 121  745 144  738 322  716
    Texas366  553 338  614 1,141  561 1,126  553
    Central total400  564 459  649 1,285  581 1,448  590
    Carolinas(1)177  466 194  468 616  458 346  466
    Washington D.C. Area(2)58  1,233 90  951 187  1,159 369  808
    East total235  655 284  621 803  621 715  642
    Total1,813 $685 2,016 $746 5,274 $693 6,063 $708
                    
     Three Months Ended December 31, Year Ended December 31,
     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
    Arizona76  13.5 3  13.0 511  13.5 487  13.4
    California390  46.6 226  55.5 2,386  49.6 1,803  49.3
    Nevada68  11.3 4  6.8 403  9.2 321  7.5
    Washington62  5.3 11  5.0 228  5.4 114  3.3
    West total596  76.7 244  80.3 3,528  77.7 2,725  73.5
    Colorado24  11.0 8  6.5 142  8.4 188  7.4
    Texas303  54.3 81  30.0 1,565  43.8 772  24.8
    Central total327  65.3 89  36.5 1,707  52.2 960  32.2
    Carolinas(1)100  13.0 73  15.2 678  14.0 445  12.2
    Washington D.C. Area(2)55  4.3 38  4.8 209  3.6 247  6.8
    East total155  17.3 111  20.0 887  17.6 692  19.0
    Total1,078  159.3 444  136.8 6,122  147.5 4,377  124.7
     


    MARKET DATA BY REPORTING SEGMENT & STATE, continued
    (dollars in thousands)
    (unaudited)
     
     As of December 31, 2023 As of December 31, 2022
     Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price    		 Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price
    Arizona259 $190,798 $737 378 $316,233 $837
    California698  559,729  802 298  289,659  972
    Nevada131  91,012  695 125  102,985  824
    Washington90  79,672  885 35  27,075  774
    West total1,178  921,211  782 836  735,952  880
    Colorado48  32,963  687 50  39,988  800
    Texas706  409,769  580 282  186,001  660
    Central total754  442,732  587 332  225,989  681
    Carolinas(1)282  140,523  498 220  102,775  467
    Washington D.C. Area(2)106  107,648  1,016 84  99,962  1,190
    East total388  248,171  640 304  202,737  667
    Total2,320 $1,612,114 $695 1,472 $1,164,678 $791
                
     December 31, 
    2023    		 December 31, 
    2022    		        
    Lots Owned or Controlled:           
    Arizona2,394  2,901        
    California10,148  11,399        
    Nevada1,785  1,634        
    Washington712  827        
    West total15,039  16,761        
    Colorado1,908  1,600        
    Texas10,056  10,361        
    Central total11,964  11,961        
    Carolinas(1)4,038  3,857        
    Washington D.C. Area(2)919  1,215        
    East total4,957  5,072        
    Total31,960  33,794        
                
     December 31, 
    2023    		 December 31, 
    2022    		        
    Lots by Ownership Type:           
    Lots owned18,739  18,762        
    Lots controlled(1)13,221  15,032        
    Total31,960  33,794        
                 

    __________
    (1) As of December 31, 2023 and 2022, lots controlled included lots that were under land option contracts or purchase contracts. As of December 31, 2023 and 2022, lots controlled for Central include 3,561 and 3,325 lots, respectively, and lots controlled for East include 71 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 homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP financial measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage and non-cash impairments and lot option abandonments, as applicable, have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who may adjust gross margins in a similar fashion.

     Three Months Ended December 31,
     2023
    		 % 2022
    		 %
     (dollars in thousands)
    Home sales revenue$1,241,258  100.0% $1,504,177  100.0%
    Cost of home sales 957,322  77.1%  1,127,421  75.0%
    Homebuilding gross margin 283,936  22.9%  376,756  25.0%
    Add:  interest in cost of home sales 43,516  3.5%  38,036  2.5%
    Add:  impairments and lot option abandonments 1,482  0.1%  4,252  0.3%
    Adjusted homebuilding gross margin$328,934  26.5% $419,044  27.8%
    Homebuilding gross margin percentage 22.9%    25.0%  
    Adjusted homebuilding gross margin percentage 26.5%    27.9%  
     


     Year Ended December 31,
     2023
    		 % 2022
    		 %
     (dollars in thousands)
    Home sales revenue$3,654,035  100.0% $4,291,563  100.0%
    Cost of home sales 2,838,513  77.7%  3,160,581  73.6%
    Homebuilding gross margin 815,522  22.3%  1,130,982  26.4%
    Add:  interest in cost of home sales 116,143  3.2%  106,595  2.5%
    Add:  impairments and lot option abandonments 14,157  0.4%  8,747  0.2%
    Adjusted homebuilding gross margin$945,822  25.9% $1,246,324  29.0%
    Homebuilding gross margin percentage 22.3%    26.4%  
    Adjusted homebuilding gross margin percentage 25.9%    29.0%  
     

    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.

     December 31, 2023 December 31, 2022
    Loans payable$288,337  $287,427 
    Senior notes 1,094,249   1,090,624 
    Total debt 1,382,586   1,378,051 
    Stockholders’ equity 3,010,958   2,832,389 
    Total capital$4,393,544  $4,210,440 
    Ratio of debt-to-capital(1) 31.5%  32.7%
        
    Total debt$1,382,586  $1,378,051 
    Less: Cash and cash equivalents (868,953)  (889,664)
    Net debt 513,633   488,387 
    Stockholders’ equity 3,010,958   2,832,389 
    Net capital$3,524,591  $3,320,776 
    Ratio of net debt-to-net capital(2) 14.6%  14.7%

    __________
    (1) The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.
    (2) The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus 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) real estate inventory 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 December 31, Year Ended December 31,
     2023
    		 2022
    		 2023
    		 2022
     (in thousands)
    Net income available to common stockholders$132,834  $202,973  $343,702  $576,060 
    Interest expense:       
    Interest incurred 35,377   35,294   147,169   124,529 
    Interest capitalized (35,377)  (35,294)  (147,169)  (124,529)
    Amortization of interest in cost of sales 43,737   38,042   116,933   106,681 
    Provision for income taxes 46,400   68,719   118,164   190,803 
    Depreciation and amortization 6,786   9,369   26,852   28,010 
    EBITDA 229,757   319,103   605,651   901,554 
    Amortization of stock-based compensation 4,907   2,040   19,919   18,780 
    Real estate inventory impairments and lot option abandonments 1,482   3,573   14,157   8,747 
    Adjusted EBITDA$236,146  $324,716  $639,727  $929,081 

     


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