UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________________
FORM 8-K
_______________________________________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 27, 2023
_______________________________________________________________________________________

Tri Pointe Homes, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________________

Delaware	 	1-35796	 	61-1763235	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
 
940 Southwood Blvd, Suite 200
Incline Village, Nevada 89451
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (775) 413-1030
Not Applicable
(Former name or former address, if changed since last report.)
_______________________________________________________________________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered	
Common Stock, par value $0.01 per share		TPH		New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02     Results of Operations and Financial Condition
On April 27, 2023, Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended March 31, 2023. A copy of the Company’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including the exhibits attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing. In addition, the press release furnished as an exhibit to this report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Item 9.01     Financial Statements and Exhibits

(d)Exhibits
99.1          Press Release dated April 27, 2023
104           Cover Page Interactive Data File, formatted in Inline XBRL

2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

									
 	Tri Pointe Homes, Inc.	
 	 	 	
Date: April 27, 2023	By:	/s/ Glenn J. Keeler	
 	 	Glenn J. Keeler,
Chief Financial Officer	

3

Exhibit 99.1

TRI POINTE HOMES, INC. REPORTS 2023 FIRST QUARTER RESULTS

-Diluted Earnings Per Share of $0.73-
-Home Sales Revenue of $768 Million-
-Homebuilding Gross Margin Percentage of 23.5%-
-Net New Home Orders of 1,619 on a Monthly Absorption Rate of 4.0-
-Debt-to-Capital Ratio of 32.5% and Total Liquidity of $1.7 Billion-

INCLINE VILLAGE, Nev., April 27, 2023 / Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the first quarter ended March 31, 2023.
“Tri Pointe Homes met or exceeded all guided metrics for the first quarter, leading to home sales revenue of $768 million, and net income available to common stockholders of $75 million, or diluted earnings per share of $0.73,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “While we are pleased with our ability to deliver strong top and bottom line results for the quarter, we are even more encouraged with our ability to generate new home orders while significantly reducing cancellation rates. Our primary goal for the quarter was to boost net new home order pace and volume in response to the macro conditions that dampened both affordability and buyer sentiment through the back half of 2022. Through the implementation of product repositioning, targeted pricing, and incentive strategies, along with solid execution from our teams, we were able to elevate our first quarter absorption rate to 4.0, which is firmly above our pre-pandemic historical seasonal levels.”
Mr. Bauer concluded, “As the housing market continues to rebound from the interest rate reset that took place in 2022, we continue to believe the supply and demand dynamics are a strong tailwind for the homebuilding industry, particularly during a time where the resale market has softened, and inventory is at historically low levels. Tri Pointe Homes is well positioned to capitalize on current market conditions and continue our growth trajectory. As of March 31, 2023, our balance sheet reflects a record low debt-to-capital ratio for the company, as well as record high liquidity of $1.7 billion, including cash and cash equivalents of $966 million. We feel these factors provide Tri Pointe Homes with continued flexibility and have positioned us for success in 2023 and beyond.”
Results and Operational Data for First Quarter 2023 and Comparisons to First Quarter 2022
•Net income available to common stockholders was $74.7 million, or $0.73 per diluted share, compared to $87.5 million, or $0.81 per diluted share
•Home sales revenue of $768.4 million compared to $725.3 million, an increase of 6%
◦New home deliveries of 1,065 homes compared to 1,099 homes, a decrease of 3%
◦Average sales price of homes delivered of $722,000 compared to $660,000, an increase of 9%
•Homebuilding gross margin percentage of 23.5% compared to 26.8%, a decrease of 330 basis points
◦Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 26.2%*
•SG&A expense as a percentage of homes sales revenue of 11.5% compared to 11.1%, an increase of 40 basis points
•Net new home orders of 1,619 compared to 1,896, a decrease of 15%
•Active selling communities averaged 136.0 compared to 111.5, an increase of 22%
◦Net new home orders per average selling community were 11.9 orders (4.0 monthly) compared to 17.0 orders (5.7 monthly)
◦Cancellation rate of 10% compared to 8%
•Backlog units at quarter end of 2,026 homes compared to 3,955, a decrease of 49%
Page 1

◦Dollar value of backlog at quarter end of $1.5 billion compared to $2.9 billion, a decrease of 49%
◦Average sales price of homes in backlog at quarter end of $742,000 compared to $741,000, remaining relatively flat
•Ratios of debt-to-capital and net debt-to-net capital of 32.5% and 12.6%*, respectively, as of March 31, 2023
•Repurchased 1,574,575 shares of common stock at a weighted average price per share of $23.87 for an aggregate dollar amount of $37.6 million in the three months ended March 31, 2023
•Ended the first quarter of 2023 with total liquidity of $1.7 billion, including cash and cash equivalents of $966.3 million and $691.4 million of availability under our revolving credit facility

	
*	See “Reconciliation of Non-GAAP Financial Measures”	
“Going into this year, our strategic focus was to drive orders, cost reductions, and returns. I am pleased to report that we are experiencing well-diversified demand across all buyer segments and geographic markets,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “Our operating teams have made solid strides in obtaining lower costs throughout our supply chain with costs down 8% to 10% on average in the first quarter. We acknowledge there are still sticky labor constraints, but we remain committed to pursuing further reductions where possible. Regarding cycle times, our teams have been focused on expanding trade resources, improving the material procurement process, and introducing line or phase building in additional markets. These efforts have resulted in a reduction in our cycle times by more than two weeks on average in the first quarter and we believe further improvements are within reach this year.”
Outlook
For the second quarter, the Company anticipates delivering between 900 and 1,000 homes at an average sales price between $720,000 and $730,000. The Company expects homebuilding gross margin percentage to be in the range of 22.0% to 23.0% for the second quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 12.0% to 13.0%. Finally, the Company expects its effective tax rate for the second quarter to be in the range of 26.0% to 27.0%.
For the full year, the Company anticipates delivering between 4,500 and 5,000 homes at an average sales price between $690,000 and $700,000.
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, April 27, 2023.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, Glenn Keeler, Chief Financial Officer, and Linda Mamet, Chief Marketing Officer. Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (844) 825-9789, or (412) 317-5180 for international participants. Participants should ask for the Tri Pointe Homes First Quarter 2023 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for two weeks following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 10177240. An archive of the webcast will also be available on the Company’s website for a limited time.
Page 2

About Tri Pointe Homes, Inc.
One of the largest homebuilders in the U.S., Tri Pointe Homes, Inc. (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, was named one of the 2023 Fortune 100 Best Companies to Work For®, and made Fortune magazine’s 2017 100 Fastest-Growing Companies list. The company was also named as a Great Place to Work-Certified™ company in both 2021 and 2022 and was named on several Great Place to Work® Best Workplaces lists 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 general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; the prices and availability of supply chain inputs, including raw materials, labor and home components; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the occurrence of drought conditions in parts of the western United States; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious disease, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.
Page 3

Investor Relations Contact:
InvestorRelations@TriPointeHomes.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045

Page 4

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

	Three Months Ended March 31,	
	2023		2022		Change		% Change	
Operating Data:	(unaudited)	
Home sales revenue	$	768,405 			$	725,251 			$	43,154 			6 	%	
Homebuilding gross margin	$	180,287 			$	194,591 			$	(14,304)			(7)	%	
Homebuilding gross margin %	23.5 	%		26.8 	%		(3.3)	%			
Adjusted homebuilding gross margin %*	26.2 	%		29.3 	%		(3.1)	%			

	
SG&A expense	$	88,228 			$	80,695 			$	7,533 			9 	%	
SG&A expense as a % of home sales
   revenue	11.5 	%		11.1 	%		0.4 	%			
Net income available to common stockholders	$	74,742 			$	87,478 			$	(12,736)			(15)	%	
	
Adjusted EBITDA*	$	133,975 			$	146,091 			$	(12,116)			(8)	%	
Interest incurred	$	37,479 			$	28,553 			$	8,926 			31 	%	
Interest in cost of home sales	$	20,226 			$	17,065 			$	3,161 			19 	%	
								
Other Data:								
Net new home orders	1,619 			1,896 			(277)			(15)	%	
New homes delivered	1,065 			1,099 			(34)			(3)	%	
Average sales price of homes delivered	$	722 			$	660 			$	62 			9 	%	
Cancellation rate	10 	%		8 	%		2 	%			
Average selling communities	136.0 			111.5 			24.5 			22 	%	
Selling communities at end of period	136 			116 			20 			17 	%	
Backlog (estimated dollar value)	$	1,503,382 			$	2,929,187 			$	(1,425,805)			(49)	%	
Backlog (homes)	2,026 			3,955 			(1,929)			(49)	%	
Average sales price in backlog	$	742 			$	741 			$	1 			0 	%	
								
	March 31,		December 31,					
	2023		2022		Change		% Change	
Balance Sheet Data:	(unaudited)							
Cash and cash equivalents	$	966,298 			$	889,664 			$	76,634 			9 	%	
Real estate inventories	$	3,142,412 			$	3,173,849 			$	(31,437)			(1)	%	
Lots owned or controlled	32,055 			33,794 			(1,739)			(5)	%	
Homes under construction (1)	2,264 			2,373 			(109)			(5)	%	
Homes completed, unsold	250 			288 			(38)			(13)	%	
Debt	$	1,378,936 			$	1,378,051 			$	885 			0 	%	
Stockholders’ equity	$	2,863,623 			$	2,832,389 			$	31,234 			1 	%	
Book capitalization	$	4,242,559 			$	4,210,440 			$	32,119 			1 	%	
Ratio of debt-to-capital	32.5 	%		32.7 	%		(0.2)	%			
Ratio of net debt-to-net capital*	12.6 	%		14.7 	%		(2.1)	%			
__________
(1)     Homes under construction included 78 models at both March 31, 2023 and December 31, 2022, respectively.
*    See “Reconciliation of Non-GAAP Financial Measures”
Page 5

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

												
	March 31,		December 31,	
	2023		2022	
Assets	(unaudited)			
Cash and cash equivalents	$	966,298 			$	889,664 		
Receivables	141,076 			169,449 		
Real estate inventories	3,142,412 			3,173,849 		
Investments in unconsolidated entities	134,071 			129,837 		
Goodwill and other intangible assets, net	156,603 			156,603 		
Deferred tax assets, net	34,851 			34,851 		
Other assets	163,929 			165,687 		
Total assets	$	4,739,240 			$	4,719,940 		
				
Liabilities				
Accounts payable	$	57,544 			$	62,324 		
Accrued expenses and other liabilities	436,275 			443,034 		
Loans payable	287,427 			287,427 		
Senior notes	1,091,509 			1,090,624 		
Total liabilities	1,872,755 			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 March 31, 2023 and December 31, 2022, respectively	— 			— 		
Common stock, $0.01 par value, 500,000,000 shares authorized; 100,172,227 and 101,017,708 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1,002 			1,010 		
Additional paid-in capital	— 			3,685 		
Retained earnings	2,862,621 			2,827,694 		
Total stockholders’ equity	2,863,623 			2,832,389 		
Noncontrolling interests	2,862 			4,142 		
Total equity	2,866,485 			2,836,531 		
Total liabilities and equity	$	4,739,240 			$	4,719,940 		

 
Page 6

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

												
 	Three Months Ended March 31,	
 	2023		2022	
Homebuilding:	 		 	
Home sales revenue	$	768,405 			$	725,251 		
Land and lot sales revenue	1,706 			1,597 		
Other operations revenue	674 			644 		
Total revenues	770,785 			727,492 		
Cost of home sales	588,118 			530,660 		
Cost of land and lot sales	1,443 			475 		
Other operations expense	665 			646 		
Sales and marketing	41,862 			32,239 		
General and administrative	46,366 			48,456 		
	
Homebuilding income from operations	92,331 			115,016 		
Equity in income (loss) of unconsolidated entities	227 			(55)		
Other income, net	7,604 			273 		
Homebuilding income before income taxes	100,162 			115,234 		
Financial Services:				
Revenues	8,876 			8,752 		
Expenses	5,831 			5,308 		
Equity in income of unconsolidated entities	— 			46 		
Financial services income before income taxes	3,045 			3,490 		
Income before income taxes	103,207 			118,724 		
Provision for income taxes	(27,350)			(30,225)		
Net income	75,857 			88,499 		
Net income attributable to noncontrolling interests	(1,115)			(1,021)		
Net income available to common stockholders	$	74,742 			$	87,478 		
Earnings per share			 	
Basic	$	0.74 			$	0.82 		
Diluted	$	0.73 			$	0.81 		
Weighted average shares outstanding			 	
Basic	101,019,253 			107,326,911 		
Diluted	101,706,438 			108,197,485 		

Page 7

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

																								
	Three Months Ended March 31,	
	2023		2022	
	New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price	
Arizona	135 			$	785 			70 			$	733 		
California	339 			829 			514 			680 		
Nevada	98 			761 			84 			686 		
Washington	18 			956 			72 			972 		
West total	590 			811 			740 			714 		
Colorado	44 			788 			43 			626 		
Texas	210 			625 			220 			501 		
Central total	254 			653 			263 			521 		
Carolinas(1)	175 			438 			28 			451 		
Washington D.C. Area(2)	46 			1,023 			68 			695 		
East total	221 			560 			96 			624 		
Total	1,065 			$	722 			1,099 			$	660 		
								
	Three Months Ended March 31,	
	2023		2022	
	Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities	
Arizona	117 			13.0 			215 			13.3 		
California	701 			53.2 			701 			39.0 		
Nevada	84 			7.0 			145 			9.0 		
Washington	52 			5.0 			48 			3.0 		
West total	954 			78.2 			1,109 			64.3 		
Colorado	41 			6.0 			131 			8.0 		
Texas	314 			33.8 			415 			22.5 		
Central total	355 			39.8 			546 			30.5 		
Carolinas(1)	251 			14.5 			126 			8.5 		
Washington D.C. Area(2)	59 			3.5 			115 			8.2 		
East total	310 			18.0 			241 			16.7 		
Total	1,619 			136.0 			1,896 			111.5 		

	

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

Page 8

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

																																				
	As of March 31, 2023		As of March 31, 2022	
	Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price		Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price	
Arizona	360 			$	308,514 			$	857 			665 			$	515,500 			$	775 		
California	660 			506,979 			768 			1,223 			1,016,024 			831 		
Nevada	111 			86,919 			783 			387 			302,271 			781 		
Washington	69 			61,148 			886 			105 			102,756 			979 		
West total	1,200 			963,560 			803 			2,380 			1,936,551 			814 		
Colorado	47 			35,511 			756 			272 			198,666 			730 		
Texas	386 			236,386 			612 			831 			473,755 			570 		
Central total	433 			271,897 			628 			1,103 			672,421 			610 		

Carolinas(1)	296 			139,815 			472 			219 			102,969 			470 		
Washington D.C. Area(2)	97 			128,110 			1,321 			253 			217,246 			859 		
East total	393 			267,925 			682 			472 			320,215 			678 		
Total	2,026 			$	1,503,382 			$	742 			3,955 			$	2,929,187 			$	741 		
												
	March 31,		December 31,									
	2023		2022									
Lots Owned or Controlled:												
Arizona	2,766 			2,901 										
California	11,062 			11,399 										
Nevada	1,528 			1,634 										
Washington	811 			827 										
West total	16,167 			16,761 										
Colorado	1,236 			1,600 										
Texas	10,020 			10,361 										
Central total	11,256 			11,961 										

	
Carolinas(1)	3,464 			3,857 										
Washington D.C. Area(2)	1,168 			1,215 										
East total	4,632 			5,072 										
Total	32,055 			33,794 										
												
	March 31,		December 31,									
	2023		2022									
Lots by Ownership Type:												
Lots owned	18,259 			18,762 										
Lots controlled (3)	13,796 			15,032 										
Total	32,055 			33,794 										

(1)     Carolinas comprises North Carolina and South Carolina.
(2)     Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.
(3)     As of March 31, 2023 and December 31, 2022, lots controlled included lots that were under land option contracts or purchase contracts. As of March 31, 2023 and December 31, 2022, lots controlled for Central include 3,210 and 3,325 lots, respectively, and lots controlled for East include 124 and 141 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
Page 9

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 table reconciles 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 March 31,	
	2023		%		2022		%	
	(dollars in thousands)	
Home sales revenue	$	768,405 			100.0 	%		$	725,251 			100.0 	%	
Cost of home sales	588,118 			76.5 	%		530,660 			73.2 	%	
Homebuilding gross margin	180,287 			23.5 	%		194,591 			26.8 	%	
Add:  interest in cost of home sales	20,226 			2.6 	%		17,065 			2.4 	%	
Add:  impairments and lot option abandonments	717 			0.1 	%		489 			0.1 	%	
Adjusted homebuilding gross margin	$	201,230 			26.2 	%		$	212,145 			29.3 	%	
Homebuilding gross margin percentage	23.5 	%		 		26.8 	%		 	
Adjusted homebuilding gross margin percentage	26.2 	%		 		29.3 	%		 	

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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.

												
	March 31, 2023		December 31, 2022	
Loans payable	$	287,427 			$	287,427 		
Senior notes	1,091,509 			1,090,624 		
Total debt	1,378,936 			1,378,051 		
Stockholders’ equity	2,863,623 			2,832,389 		
Total capital	$	4,242,559 			$	4,210,440 		
Ratio of debt-to-capital(1)	32.5 	%		32.7 	%	
				
Total debt	$	1,378,936 			$	1,378,051 		
Less: Cash and cash equivalents	(966,298)			(889,664)		
Net debt	412,638 			488,387 		
Stockholders’ equity	2,863,623 			2,832,389 		
Net capital	$	3,276,261 			$	3,320,776 		
Ratio of net debt-to-net capital(2)	12.6 	%		14.7 	%	
__________
(1)    The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
(2)    The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity.

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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 March 31,	
	2023		2022	
	(in thousands)	
Net income available to common stockholders	$	74,742 			$	87,478 		
Interest expense:				
Interest incurred	37,479 			28,553 		
Interest capitalized	(37,479)			(28,553)		
Amortization of interest in cost of sales	20,251 			17,065 		
Provision for income taxes	27,350 			30,225 		
Depreciation and amortization	7,054 			5,285 		
EBITDA	129,397 			140,053 		
Amortization of stock-based compensation	3,861 			5,272 		
Impairments and lot option abandonments	717 			766 		

Adjusted EBITDA	$	133,975 			$	146,091 		
 
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