Standard Pacific Corp. Reports 2014 First Quarter Results - MSNewsNow.com - Jackson, MS

Standard Pacific Corp. Reports 2014 First Quarter Results

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SOURCE Standard Pacific Corp.

Q1 2014 pretax income of $61.6 million, up 74% from Q1 2013

Q1 2014 backlog value of $1.0 billion, up 39% from Q1 2013

IRVINE, Calif., May 1, 2014 /PRNewswire/ --  Standard Pacific Corp. (NYSE: SPF) today announced results for the first quarter ended March 31, 2014.

2014 First Quarter Highlights and Comparisons to the 2013 First Quarter

  • Net income of $38.2 million, or $0.09 per diluted share, vs. $21.8 million, or $0.05 per diluted share
  • Pretax income of $61.6 million, up 74%
  • Net new orders of 1,311, down 6%; Dollar value of net new orders up 16%
  • Backlog of 2,016 homes, up 9%; Dollar value of backlog up 39%
  • 174 average active selling communities, up 10%
  • Home sale revenues of $446.9 million, up 26%
  • Average selling price of $449 thousand, up 20%
  • 995 new home deliveries, up 5%
  • Gross margin from home sales of 26.6%, compared to 21.0%
  • Operating margin from home sales of $60.1 million, or 13.4%, compared to $28.2 million, or 7.9%
  • $224.1 million of land purchases and development costs, compared to $124.4 million

Scott Stowell, the Company's Chief Executive Officer commented, "The strong operating performance we achieved during the last two years has continued into the first quarter, with pretax income, backlog value, home sale revenues and new order value up 74%, 39%, 26% and 16%, respectively."  Mr. Stowell added, "In addition to these solid results, I am particularly pleased with our operating margin from home sales, which was 13.4% for the 2014 first quarter, a 550 basis point improvement from the prior year."     

Revenues from home sales for the 2014 first quarter increased 26%, to $446.9 million, as compared to the prior year period, resulting primarily from a 20% increase in the Company's consolidated average home price to $449 thousand and a 5% increase in new home deliveries.  The increase in average home price was primarily attributable to general price increases within a majority of the Company's markets, a shift to more move-up product and a decrease in the use of sales incentives.  The increase in new home deliveries was driven by a 10% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter. 

Gross margin from home sales for the 2014 first quarter increased to 26.6% compared to 21.0% in the prior year period.  The 560 basis point year-over-year increase was primarily attributable to price increases and a decrease in the use of sales incentives.  Excluding previously capitalized interest costs, gross margin from home sales was 32.0%* for the 2014 first quarter versus 28.8%* for the 2013 first quarter.    

While net new orders for the 2014 first quarter decreased 6% from the 2013 first quarter to 1,311 homes, the dollar value of these orders was up 16%.  The Company's monthly sales absorption rate was 2.5 per community for the 2014 first quarter, compared to 1.7 per community for the 2013 fourth quarter. The increase in sales absorption rate from the 2013 fourth quarter to the 2014 first quarter was above the seasonality we typically experience in our business. The Company's cancellation rate for the 2014 first quarter was 14%, compared to 21% for the 2013 fourth quarter.  Our 2014 first quarter cancellation rate was below our average historical cancellation rate of approximately 21% over the last 10 years.    

The dollar value of homes in backlog increased 39% to $1.0 billion, or 2,016 homes, compared to $719.7 million, or 1,851 homes, for the 2013 first quarter, and increased 25% compared to $800.5 million, or 1,700 homes, as of the end of 2013.  The increase in year-over-year backlog value was driven primarily by a 28% increase in the average selling price of the homes in backlog, reflecting the continued execution of our strategy to focus on the move-up buyer and pricing opportunities in select markets.

The Company purchased $144.7 million of land (2,190 homesites) during the 2014 first quarter, of which 34% (based on homesites) was located in Florida, 20% in Arizona, 19% in the Carolinas, 14% in California and 12% in Texas.  As of March 31, 2014, the Company owned or controlled 35,715 homesites, of which 23,783 are owned and actively selling or under development, 6,972 are controlled or under option, and the remaining 4,960 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.1 year supply based on the Company's deliveries for the trailing twelve months ended March 31, 2014.

The Company ended the quarter with $635 million of available liquidity, including $195 million of unrestricted homebuilding cash and a $440 million untapped revolving credit facility. Cash used in operating activities was $117.6 million for the 2014 first quarter versus $58.5 million in the 2013 first quarter.  During the 2014 first quarter, the Company spent $224.1 million on land purchases and development costs, compared to $124.4 million for the 2013 first quarter.  The Company's homebuilding debt to book capitalization as of March 31, 2014 and 2013 was 54.9% and 54.4%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 51.7%* and 48.8%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending March 31, 2014 and 2013 was 4.5x* and 6.8x*, respectively.

Earnings Conference Call

A conference call to discuss the Company's 2014 first quarter results will be held at 12:00 p.m. Eastern time May 2, 2014.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://ir.standardpacifichomes.com.  The call will also be accessible via telephone by dialing (877) 545-1414 (domestic) or (719) 325-4831 (international); Passcode: 8923683.  The audio transmission with the slide presentation will be available on our website for replay within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 8923683.

About Standard Pacific

Standard Pacific Homes (NYSE: SPF) has been building beautiful, high-quality homes and neighborhoods since its founding in Southern California in 1965.  With a trusted reputation for quality craftsmanship, an outstanding customer experience and exceptional architectural design, the Company utilizes its decades of land acquisition, development and homebuilding expertise to successfully navigate today's complex landscape to acquire and build desirable communities in locations that meet the high expectations of the Company's targeted move-up homebuyers.  Currently offering new homes in major metropolitan areas in Arizona, California, Colorado, Florida, North Carolina, South Carolina, and Texas, we invite you to learn more about us by visiting standardpacifichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, absorption rates, average home price, pricing power, revenue, profitability, cash flow, liquidity, gross margin, overhead expenses and other costs; community count; product mix; the benefit of, and execution on, our strategy; supply; demand; our future performance and the future condition of the economy and the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2013 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release.  No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

Contact:
Jeff McCall, EVP & CFO (949) 789-1655, jmccall@stanpac.com

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

(Note: Tables Follow)

 

 


 

KEY STATISTICS AND FINANCIAL DATA1

 




As of or For the Three Months Ended




March 31,


March 31,


Percentage


December 31,


Percentage




2014


2013


or % Change


2013


or % Change

Operating Data

(Dollars in thousands)
















Deliveries


995



947


5%



1,343


(26%)

Average selling price

$

449


$

375


20%


$

446


1%

Home sale revenues

$

446,918


$

355,126


26%


$

598,496


(25%)

Gross margin % (including land sales)


25.8%



20.8%


5.0%



26.8%


(1.0%)

Gross margin % from home sales


26.6%



21.0%


5.6%



26.8%


(0.2%)

Gross margin % from home sales (excluding interest amortized to cost of home sales)*














32.0%



28.8%


3.2%



32.2%


(0.2%)

Incentive and stock-based compensation expense

$

5,028


$

4,848


4%


$

9,442


(47%)

Selling expenses

$

22,699


$

18,444


23%


$

28,114


(19%)

G&A expenses (excluding incentive and stock-based compensation expenses)













$

30,863


$

23,002


34%


$

30,304


2%

SG&A expenses

$

58,590


$

46,294


27%


$

67,860


(14%)

SG&A % from home sales


13.1%



13.0%


0.1%



11.3%


1.8%

Operating margin from home sales

$

60,083


$

28,220


113%


$

92,648


(35%)

Operating margin % from home sales


13.4%



7.9%


5.5%



15.5%


(2.1%)

Net new orders (homes)


1,311



1,394


(6%)



878


49%

Net new orders (dollar value)

$

633,818


$

548,561


16%


$

418,828


51%

Average active selling communities


174



158


10%



173


1%

Monthly sales absorption rate per community


2.5



2.9


(15%)



1.7


48%

Cancellation rate


14%



10%


4%



21%


(7%)

Gross cancellations


221



162


36%



234


(6%)

Cancellations from current quarter sales


90



86


5%



64


41%

Backlog (homes)


2,016



1,851


9%



1,700


19%

Backlog (dollar value)

$

1,001,385


$

719,651


39%


$

800,494


25%
















Cash flows (uses) from operating activities

$

(117,563)


$

(58,461)


(101%)


$

(27,820)


(323%)

Cash flows (uses) from investing activities

$

10,286


$

(1,601)




$

(14,707)



Cash flows (uses) from financing activities

$

(50,902)


$

(180)


(28179%)


$

42,690



Land purchases (incl. seller financing and JV purchases)

$

144,744


$

71,541


102%


$

116,856


24%

Adjusted Homebuilding EBITDA*

$

89,008


$

63,823


39%


$

135,469


(34%)

Adjusted Homebuilding EBITDA Margin %*


19.3%



17.8%


1.5%



22.3%


(3.0%)

Homebuilding interest incurred

$

38,786


$

35,027


11%


$

37,546


3%

Homebuilding interest capitalized to inventories owned

$

38,213


$

34,201


12%


$

36,889


4%

Homebuilding interest capitalized to investments in JVs

$

573


$

826


(31%)


$

657


(13%)

Interest amortized to cost of sales (incl. cost of land sales)

$

24,983


$

27,885


(10%)


$

32,909


(24%)




















As of 




March 31,


December 31,


Percentage




2014


2013


or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)











Homebuilding cash (including restricted cash)

$

221,400


$

376,949


(41%)

Inventories owned

$

2,741,269


$

2,536,102


8%

Homesites owned and controlled


35,715



35,175


2%

Homes under construction


2,245



2,001


12%

Completed specs


368



327


13%

Deferred tax asset valuation allowance

$

4,591


$

4,591


?

Homebuilding debt

$

1,839,994


$

1,839,595


0%

Stockholders' equity

$

1,513,087


$

1,468,960


3%

Stockholders' equity per share (including if-converted preferred stock)*








$

4.13


$

4.02


3%

Total consolidated debt to book capitalization


55.6%



56.9%


(1.3%)

Adjusted net homebuilding debt to total adjusted book capitalization*









51.7%



49.9%


1.8%


1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 





Three Months Ended March 31,





2014


2013





(Dollars in thousands, except per share amounts)





(Unaudited)

Homebuilding:







Home sale revenues

$

446,918


$

355,126


Land sale revenues


13,281



2,595



Total revenues


460,199



357,721


Cost of home sales


(328,245)



(280,612)


Cost of land sales


(13,004)



(2,583)



Total cost of sales


(341,249)



(283,195)




Gross margin


118,950



74,526




Gross margin %


25.8%



20.8%


Selling, general and administrative expenses


(58,590)



(46,294)


Income (loss) from unconsolidated joint ventures


(437)



1,134


Other income (expense)


(13)



3,570




Homebuilding pretax income 


59,910



32,936

Financial Services:







Revenues


4,984



5,677


Expenses


(3,440)



(3,322)


Other income


161



102




Financial services pretax income


1,705



2,457

Income before taxes


61,615



35,393

Provision for income taxes


(23,456)



(13,569)

Net income 


38,159



21,824

  Less: Net income allocated to preferred shareholder


(9,147)



(8,903)

  Less: Net income allocated to unvested restricted stock


(59)



(22)

Net income available to common stockholders

$

28,953


$

12,899










Income Per Common Share:







Basic


$

0.10


$

0.06


Diluted

$

0.09


$

0.05










Weighted Average Common Shares Outstanding:







Basic



277,948,342



214,166,912


Diluted


315,894,969



252,947,416










Weighted average additional common shares outstanding if preferred shares converted to common shares







87,812,786



147,812,786










Total weighted average diluted common shares outstanding if preferred shares converted to common shares







403,707,755



400,760,202










 


 

CONDENSED CONSOLIDATED BALANCE SHEETS

 







March 31,


December 31,







2014


2013







(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

194,702


$

355,489


Restricted cash



26,698



21,460


Trade and other receivables


31,896



14,431


Inventories:










Owned




2,741,269



2,536,102



Not owned



83,601



98,341


Investments in unconsolidated joint ventures


49,720



66,054


Deferred income taxes, net


354,478



375,400


Other assets




45,442



45,977




Total Homebuilding Assets


3,527,806



3,513,254

Financial Services:







Cash and equivalents


10,410



7,802


Restricted cash



1,295



1,295


Mortgage loans held for sale, net


70,093



122,031


Mortgage loans held for investment, net


13,165



12,220


Other assets




6,483



5,503




Total Financial Services Assets


101,446



148,851





Total Assets

$

3,629,252


$

3,662,105












LIABILITIES AND EQUITY






Homebuilding:







Accounts payable


$

37,147


$

35,771


Accrued liabilities



184,386



214,266


Secured project debt and other notes payable


6,015



6,351


Senior notes payable


1,833,979



1,833,244




Total Homebuilding Liabilities


2,061,527



2,089,632

Financial Services:







Accounts payable and other liabilities


2,141



2,646


Mortgage credit facilities


52,497



100,867




Total Financial Services Liabilities


54,638



103,513





Total Liabilities


2,116,165



2,193,145

Equity:







Stockholders' Equity:








Preferred stock, $0.01 par value; 10,000,000 shares 








    authorized; 267,829 shares issued and outstanding








    at March 31, 2014 and December 31, 2013


3



3



Common stock, $0.01 par value; 600,000,000 shares 








    authorized; 278,776,082 and 277,618,177 shares 








    issued and outstanding at March 31, 2014 and








    December 31, 2013, respectively


2,787



2,776



Additional paid-in capital


1,360,771



1,354,814



Accumulated earnings


149,526



111,367




Total Equity


1,513,087



1,468,960





Total Liabilities and Equity

$

3,629,252


$

3,662,105












 

INVENTORIES





March 31,


December 31,





2014


2013





(Dollars in thousands)

Inventories Owned:




(Unaudited)










     Land and land under development




$     1,841,551


$     1,771,661

     Homes completed and under construction




769,786


628,371

     Model homes




129,932


136,070

        Total inventories owned




$     2,741,269


$     2,536,102








Inventories Owned by Segment:














     California




$     1,237,357


$     1,182,520

     Southwest




678,499


603,303

     Southeast




825,413


750,279

        Total inventories owned




$     2,741,269


$     2,536,102









 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS












Three Months Ended March 31,






2014


2013






(Dollars in thousands)






(Unaudited)

Cash Flows From Operating Activities:







Net income

$

38,159


$

21,824


Adjustments to reconcile net income to net cash 








provided by (used in) operating activities:









Amortization of stock-based compensation


2,372



1,531




Deferred income tax provision


23,622



13,374




Other operating activities


1,616



1,412




Changes in cash and equivalents due to:










Trade and other receivables


(17,549)



(8,916)





Mortgage loans held for sale


51,938



140





Inventories - owned


(188,759)



(73,030)





Inventories - not owned


(8,165)



(4,940)





Other assets


(833)



1,829





Accounts payable


1,376



(1,578)





Accrued liabilities


(21,340)



(10,107)



Net cash provided by (used in) operating activities


(117,563)



(58,461)











Cash Flows From Investing Activities:







Investments in unconsolidated homebuilding joint ventures


(2,787)



(2,552)


Distributions of capital from unconsolidated joint ventures


14,808



1,320


Other investing activities


(1,735)



(369)



Net cash provided by (used in) investing activities


10,286



(1,601)











Cash Flows From Financing Activities:







Change in restricted cash


(5,238)



(662)


Principal payments on secured project debt and other notes payable


(890)



(7,093)


Net proceeds from (payments on) mortgage credit facilities


(48,370)



1,117


Proceeds from the exercise of stock options


3,596



6,458



Net cash provided by (used in) financing activities


(50,902)



(180)











Net increase (decrease) in cash and equivalents


(158,179)



(60,242)

Cash and equivalents at beginning of period


363,291



346,555

Cash and equivalents at end of period

$

205,112


$

286,313











Cash and equivalents at end of period

$

205,112


$

286,313

Homebuilding restricted cash at end of period


26,698



27,562

Financial services restricted cash at end of period


1,295



2,420

Cash and equivalents and restricted cash at end of period

$

233,105


$

316,295











 

REGIONAL OPERATING DATA














Three Months Ended March 31, 







2014


2013


% Change

New homes delivered:








California


339


400


(15%)



Arizona


63


63


      ?  



Texas



149


133


12%



Colorado


53


43


23%


Southwest


265


239


11%



Florida


235


183


28%



Carolinas


156


125


25%


Southeast


391


308


27%




Consolidated total


995


947


5%


Unconsolidated joint ventures


       ?   


14


(100%)




Total (including joint ventures)


995


961


4%

 

 






Three Months Ended March 31, 






2014


2013


% Change






(Dollars in thousands)

Average selling prices of homes delivered:










California


$

624


$

492


27%



Arizona



305



249


22%



Texas



415



348


19%



Colorado



484



400


21%


Southwest



403



331


22%



Florida



350



259


35%



Carolinas



298



254


17%


Southeast



329



257


28%




Consolidated



449



375


20%


Unconsolidated joint ventures



      ?  



510


?




Total (including joint ventures)


$

449


$

377


19%













 

 






Three Months Ended March 31,






2014


2013


% Change

Net new orders:








California


473


482


(2%)



Arizona


67


75


(11%)



Texas


235


242


(3%)



Colorado


53


62


(15%)


Southwest


355


379


(6%)



Florida


283


293


(3%)



Carolinas


200


240


(17%)


Southeast


483


533


(9%)




Consolidated total


1,311


1,394


(6%)


Unconsolidated joint ventures


        ?  


9


(100%)




Total (including joint ventures)


1,311


1,403


(7%)











 






Three Months Ended March 31,






2014


2013


% Change

Average number of selling communities 







  during the period:








California


46


44


5%



Arizona


11


8


38%



Texas


35


29


21%



Colorado


10


7


43%


Southwest


56


44


27%



Florida


41


37


11%



Carolinas


31


33


(6%)


Southeast


72


70


3%




Consolidated total


174


158


10%











 






At March 31,






2014


2013


% Change






Homes


Dollar Value


Homes


Dollar Value


Homes


Dollar Value






(Dollars in thousands)

Backlog:




















California



530


$

360,371



522


$

284,033



2%



27%



Arizona



109



38,032



89



24,886



22%



53%



Texas



376



184,452



313



126,276



20%



46%



Colorado



108



55,930



94



42,374



15%



32%


Southwest



593



278,414



496



193,536



20%



44%



Florida



552



248,543



476



134,880



16%



84%



Carolinas



341



114,057



357



107,202



(4%)



6%


Southeast



893



362,600



833



242,082



7%



50%




Consolidated total



2,016



1,001,385



1,851



719,651



9%



39%


Unconsolidated joint ventures



           ?    



           ?    



7



3,241



(100%)



(100%)




Total (including joint ventures)



2,016


$

1,001,385



1,858


$

722,892



9%



39%























 

 






At March 31,






2014


2013


% Change

Homesites owned and controlled:








California


9,545


10,407


(8%)



Arizona


2,302


1,902


21%



Texas


4,555


5,165


(12%)



Colorado


1,254


1,174


7%



Nevada


1,124


1,124


          ?   


Southwest


9,235


9,365


(1%)



Florida


12,257


8,445


45%



Carolinas


4,678


3,906


20%


Southeast


16,935


12,351


37%



Total (including joint ventures)


35,715


32,123


11%












Homesites owned


28,743


25,689


12%


Homesites optioned or subject to contract 


6,707


5,837


15%


Joint venture homesites


265


597


(56%)



Total (including joint ventures)


35,715


32,123


11%





















Homesites owned:








Raw lots


6,892


5,722


20%


Homesites under development


9,811


8,371


17%


Finished homesites


6,341


5,616


13%


Under construction or completed homes


3,198


2,583


24%


Held for sale


2,501


3,397


(26%)



Total


28,743


25,689


12%












RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently.  Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's gross margin percentage from home sales to the gross margin percentage from home sales, excluding interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.

 


Three Months Ended


March 31,
2014


Gross
Margin %


March 31,
2013


Gross
Margin %


December 31,
2013


Gross
Margin %


(Dollars in thousands)
















Home sale revenues

$

446,918




$

355,126




$

598,496



Less: Cost of home sales


(328,245)





(280,612)





(437,988)



Gross margin from home sales


118,673


26.6%



74,514


21.0%



160,508


26.8%

Add: Capitalized interest included in cost of home sales
















24,368


5.4%



27,696


7.8%



32,378


5.4%

Gross margin from home sales, excluding interest amortized to cost of home sales















$

143,041


32.0%


$

102,210


28.8%


$

192,886


32.2%
















The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios.  In addition, the table set forth below calculates homebuilding debt to adjusted homebuilding EBITDA.  We believe these ratios are useful to management and investors as a measure of the Company's ability to obtain financing.  For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity.  Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents. 




March 31,
2014


December 31,
2013


March 31,
2013




(Dollars in thousands)












Total consolidated debt

$

1,892,491


$

1,940,462


$

1,628,846

Less:











Financial services indebtedness


(52,497)



(100,867)



(93,276)


Homebuilding cash


(221,400)



(376,949)



(308,029)

Adjusted net homebuilding debt


1,618,594



1,462,646



1,227,541

Stockholders' equity


1,513,087



1,468,960



1,287,207

Total adjusted book capitalization

$

3,131,681


$

2,931,606


$

2,514,748












Total consolidated debt to book capitalization


55.6%



56.9%



55.9%












Adjusted net homebuilding debt to total adjusted book capitalization


51.7%



49.9%



48.8%























Homebuilding debt

$

1,839,994





$

1,535,570

LTM adjusted homebuilding EBITDA


408,806






225,958












Homebuilding debt to adjusted homebuilding EBITDA


 4.5x 






 6.8x 












The table set forth below calculates pro forma stockholders' equity per common share.  The Company believes that the pro forma stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.


March 31,


December 31,


2014


2013







Actual common shares outstanding


278,776,082



277,618,177

Add: Conversion of preferred shares to common shares


87,812,786



87,812,786

Pro forma common shares outstanding


366,588,868



365,430,963







Stockholders' equity (Dollars in thousands)

$

1,513,087


$

1,468,960

Divided by pro forma common shares outstanding

÷

366,588,868


÷

365,430,963

Pro forma stockholders' equity per common share

$

4.13


$

4.02


The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing.  Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.

 




Three Months Ended


LTM Ended March 31,




March 31,
2014


March 31,
2013


December 31,
2013


2014


2013




(Dollars in thousands)


















Net income 

$

38,159


$

21,824


$

64,820


$

205,050


$

544,722


Provision (benefit) for income taxes


23,456



13,569



36,205



78,870



(439,852)


Homebuilding interest amortized to cost of sales and interest expense


24,983



27,885



32,909



118,876



117,078


Homebuilding depreciation and amortization


1,145



628



1,094



3,972



2,410


Amortization of stock-based compensation


2,372



1,531



2,359



9,856



7,608

EBITDA


90,115



65,437



137,387



416,624



231,966

Add:
















Cash distributions of income from unconsolidated joint ventures


       ?  



1,875



       ?  



1,500



5,785

Less:

















Income (loss) from unconsolidated joint ventures


(437)



1,134



(300)



(622)



566


Income from financial services subsidiary


1,544



2,355



2,218



9,940



11,227

Adjusted Homebuilding EBITDA

$

89,008


$

63,823


$

135,469


$

408,806


$

225,958


















Homebuilding revenues

$

460,199


$

357,721


$

606,451


$

2,017,087


$

1,370,977


















Adjusted Homebuilding EBITDA Margin %


19.3%



17.8%



22.3%



20.3%



16.5%


















The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:

 





Three Months Ended


LTM Ended March 31,





March 31,
2014


March 31,
2013


December 31,
2013


2014


2013





(Dollars in thousands)



















Net cash provided by (used in) operating activities


$

(117,563)


$

(58,461)


$

(27,820)


$

(213,318)


$

(299,459)

Add:
















Provision (benefit) for income taxes


23,456



13,569



36,205



78,870



(439,852)


Deferred income tax benefit (provision)



(23,622)



(13,374)



(35,725)



(94,462)



440,626


Homebuilding interest amortized to cost of sales and interest expense



24,983



27,885



32,909



118,876



117,078

Less:

















Income from financial services subsidiary


1,544



2,355



2,218



9,940



11,227


Depreciation and amortization from financial services subsidiary



33



28



32



126



120


Loss on disposal of property and equipment


1



15



1



3



52

Net changes in operating assets and liabilities:

















Trade and other receivables


17,549



8,916



(5,218)



11,877



1,124



Mortgage loans held for sale



(51,938)



(140)



46,722



(49,255)



54,732



Inventories-owned


188,759



73,030



100,937



531,041



344,468



Inventories-not owned



8,165



4,940



11,619



46,544



33,864



Other assets


833



(1,829)



(564)



1,697



(3,419)



Accounts payable 



(1,376)



1,578



(6,470)



(16,279)



(1,124)



Accrued liabilities


21,340



10,107



(14,875)



3,284



(10,681)

Adjusted Homebuilding EBITDA


$

89,008


$

63,823


$

135,469


$

408,806


$

225,958

 

 

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