Exhibit 99.1
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TRI POINTE HOMES, INC. REPORTS 2021 SECOND QUARTER RESULTS AND ANNOUNCES $250 MILLION INCREASE TO ITS STOCK REPURCHASE PROGRAM

-Net New Home Orders up 22% Year-Over-Year-
-Backlog Units up 53% Year-Over-Year-
-Backlog Dollar Value up 50% Year-Over-Year-
-Homebuilding Gross Margin Percentage of 24.6%-
-Diluted Earnings Per Share of $1.00-
INCLINE VILLAGE, Nev., July 22, 2021 / Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2021. The Company also announced that its Board of Directors has authorized the repurchase of up to an additional $250 million of common stock under its existing stock repurchase program (“Repurchase Program”) and extended the term of the Repurchase Program through December 31, 2022, increasing the aggregate authorization under the Repurchase Program from $250 million to $500 million.
“Tri Pointe Homes delivered another strong quarter of profitability in the second quarter of 2021, generating fully diluted earnings per share of $1.00, representing a 133% increase as compared to the second quarter of 2020,” said Tri Pointe Homes Chief Executive Officer Doug Bauer. “Our average sales price and homebuilding gross margin percentage came in above the high end of our stated guidance, as our teams did an excellent job executing on our business plan while navigating the supply chain issues that persist in our industry. In addition, we posted company records in a number of key metrics for a second quarter, including home sales revenue, pre-tax profit, and quarter-ending backlog value.”
Mr. Bauer continued, “Order activity during the second quarter was robust as we averaged 4.7 sales per community per month, a 53% improvement over the second quarter of 2020. Demand trends remained elevated in all of our markets and at all of our price points, a sign that buyers remain motivated in a number of demographic segments in conjunction with the ongoing and widespread shortage of available housing supply. Similar to the first quarter, we intentionally constrained our sales releases to implement price increases and manage our backlog, a decision that proved to be a profitable one for our company, as homebuilding gross margin expanded 300 basis points year-over-year to 24.6% for the quarter.”
Mr. Bauer concluded, “With a favorable industry outlook, a sizable backlog and a rapidly improving return profile, Tri Pointe Homes is poised to continue the strong operating momentum into the back half of 2021. Longer term, we believe we have an excellent opportunity to build on our recent success, thanks to the increasing scale we are realizing in many of our markets and the land investments we have made, which will lead to significant community count growth in 2022. Given these positives, we are extremely optimistic about the future of our company.”
Results and Operational Data for Second Quarter 2021 and Comparisons to Second Quarter 2020
Net income was $117.9 million, or $1.00 per diluted share, compared to $56.5 million, or $0.43 per diluted share.
Home sales revenue of $1.0 billion compared to $766.9 million, an increase of 32%
New home deliveries of 1,545 homes compared to 1,229 homes, an increase of 26%
Average sales price of homes delivered of $653,000 compared to $624,000, an increase of 5%
Homebuilding gross margin percentage of 24.6% compared to 21.6%, an increase of 300 basis points
Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 27.7%*
SG&A expense as a percentage of homes sales revenue of 9.6% compared to 10.8%, a decrease of 120 basis points
Net new home orders of 1,622 compared to 1,332, an increase of 22%
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Active selling communities averaged 114.5 compared to 144.3, a decrease of 21%
Net new home orders per average selling community were 14.2 orders (4.7 monthly) compared to 9.2 orders (3.1 monthly)
Cancellation rate of 7% compared to 21%
Backlog units at quarter end of 3,902 homes compared to 2,558, an increase of 53%
Dollar value of backlog at quarter end of $2.5 billion compared to $1.7 billion, an increase of 50%
Average sales price of homes in backlog at quarter end of $647,000 compared to $656,000, a decrease of 1%
Ratios of debt-to-capital and net debt-to-net capital of 37.1% and 25.7%*, respectively, as of June 30, 2021
Repurchased 3,666,676 shares of common stock at a weighted average price per share of $22.60 for an aggregate dollar amount of $82.9 million in the three months ended June 30, 2021
Extended maximum amount of revolving credit facility from $600 million to $650 million and extended the maturity date of both the revolving credit facility and term loan facility to June 2026†
Ended the second quarter of 2021 with total liquidity of $1.2 billion, including cash and cash equivalents of $556.5 million and $593.1 million of availability under the Company’s unsecured revolving credit facility
 
*See “Reconciliation of Non-GAAP Financial Measures”
The maturity date for $30 million of loans under the Companys term facility and $45 million of commitments under its revolving facility, respectively, were not extended and remain scheduled to mature on March 29, 2023.

“At Tri Pointe, we understand that the housing market is constantly changing, and that in order to be successful, we must change along with it,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “That is why we invest heavily in market research to keep our new home offerings fresh and maintain our premium lifestyle brand advantage. The same is true with how we leverage technology to improve our processes and reduce costs. Our results in the second quarter of 2021 are a testament to our ability to adapt and change in a market that has become increasingly difficult to navigate as a result of supply chain issues and labor and material shortages. We believe this is a competitive strength for our company, and one that will allow us to be successful as the housing market continues to evolve.”
Outlook

For the third quarter of 2021, the Company anticipates delivering between 1,450 and 1,550 homes at an average sales price between $620,000 and $630,000. The Company expects its homebuilding gross margin percentage will be in the range of 23.5% to 24.5% for the third quarter of 2021 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.5% to 10.0%. Lastly, the Company expects its effective tax rate for the third quarter of 2021 will be approximately 25.0%.

For the full year, the Company expects to open approximately 70 new communities and end the year with between 120 and 130 active selling communities. In addition, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between $625,000 and $635,000. The Company expects homebuilding gross margin percentage to be in the range of 23.5% to 24.5% for the full year and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.8% to 10.3%. Finally, the Company expects its effective tax rate for the full year to be approximately 25%.

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Stock Repurchase Program

On July 21, 2021, the Company’s Board of Directors approved the repurchase of up to an additional $250 million of Company common stock pursuant to its Repurchase Program and extended the term of the Repurchase Program through December 31, 2022. As of July 21, 2021, the Company had purchased an aggregate of 12,175,129 shares of common stock for approximately $243 million pursuant to the Repurchase Program. Under the Repurchase Program as amended, the Company may repurchase shares of its outstanding common stock with an aggregate value of up to $500 million through December 31, 2022. Purchases of common stock pursuant to the Repurchase Program may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The Company is not obligated under the Repurchase Program to repurchase any specific number or amount of shares of common stock, and it may modify, suspend or discontinue the program at any time. Company management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of the Company’s common stock, corporate requirements, general market economic conditions and legal requirements.
Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Thursday, July 22, 2021.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial Officer. Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at presentation slides on the internet through the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Second Quarter 2021 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 13721036. An archive of the webcast will also be available on the Company’s website for a limited time.
About Tri Pointe Homes, Inc.
One of the largest homebuilders in the U.S., Tri Pointe Homes® (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, most recently in 2019, and made Fortune magazine’s 2017 100 Fastest-Growing Companies list. Named one of the Best Places to Work by the Orange County Business Journal for four consecutive years, Tri Pointe Homes also became a Great Place to Work-CertifiedTM company in 2021. For more information, please visit TriPointeHomes.com.
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Forward-Looking Statements
Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the emergence and spread of new strains or variants of COVID-19, the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and acceptance of effective vaccines, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the effects of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations, particularly within California; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; raw material and labor prices and availability; 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 outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.


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

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KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
20212020Change% Change20212020Change% Change
Operating Data:(unaudited)
Home sales revenue$1,009,307 $766,942 $242,365 32 %$1,725,982 $1,361,780 $364,202 27 %
Homebuilding gross margin$248,092 $165,508 $82,584 50 %$419,411 $287,464 $131,947 46 %
Homebuilding gross margin %24.6 %21.6 %3.0 %24.3 %21.1 %3.2 %
Adjusted homebuilding gross margin %*27.7 %24.6 %3.1 %27.3 %24.1 %3.2 %
SG&A expense$96,752 $82,748 $14,004 17 %$178,561 $165,222 $13,339 %
SG&A expense as a % of home sales
   revenue
9.6 %10.8 %(1.2)%10.3 %12.1 %(1.8)%
Net income$117,869 $56,528 $61,341 109 %$188,671 $88,411 $100,260 113 %
Adjusted EBITDA*$201,986 $120,771 $81,215 67 %$328,066 $188,727 $139,339 74 %
Interest incurred$22,558 $21,828 $730 %$43,737 $42,607 $1,130 %
Interest in cost of home sales$30,851 $21,801 $9,050 42 %$51,529 $38,623 $12,906 33 %
Other Data:
Net new home orders1,622 1,332 290 22 %3,609 2,993 616 21 %
New homes delivered1,545 1,229 316 26 %2,671 2,187 484 22 %
Average sales price of homes delivered$653 $624 $29 %$646 $623 $23 %
Cancellation rate%21 %(14)%%17 %(10)%
Average selling communities114.5 144.3 (29.8)(21)%113.4 142.4 (29.0)(20)%
Selling communities at end of period109 145 (36)(25)%
Backlog (estimated dollar value)$2,524,442 $1,679,068 $845,374 50 %
Backlog (homes)3,902 2,558 1,344 53 %
Average sales price in backlog$647 $656 $(9)(1)%
June 30,December 31,
20212020Change% Change
Balance Sheet Data:(unaudited)
Cash and cash equivalents$556,483 $621,295 $(64,812)(10)%
Real estate inventories$3,085,582 $2,910,142 $175,440 %
Lots owned or controlled37,112 35,641 1,471 %
Homes under construction (1)
4,336 3,044 1,292 42 %
Homes completed, unsold19 68 (49)(72)%
Debt$1,344,574 $1,343,001 $1,573 %
Stockholders’ equity$2,279,290 $2,232,537 $46,753 2.1 %
Book capitalization$3,623,864 $3,575,538 $48,326 %
Ratio of debt-to-capital37.1 %37.6 %(0.5)%
Ratio of net debt-to-net capital*25.7 %24.4 %1.3 %
__________
(1)     Homes under construction included 91 and 86 models at June 30, 2021 and December 31, 2020, respectively.
*    See “Reconciliation of Non-GAAP Financial Measures”
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CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
June 30,December 31,
20212020
Assets(unaudited)
Cash and cash equivalents$556,483 $621,295 
Receivables91,348 63,551 
Real estate inventories3,085,582 2,910,142 
Investments in unconsolidated entities74,051 75,056 
Goodwill and other intangible assets, net156,604 158,529 
Deferred tax assets, net44,388 47,525 
Other assets151,701 145,882 
Total assets$4,160,157 $4,021,980 
Liabilities
Accounts payable$141,143 $79,690 
Accrued expenses and other liabilities395,138 366,740 
Loans payable258,979 258,979 
Senior notes1,085,595 1,084,022 
Total liabilities1,880,855 1,789,431 
Commitments and contingencies
Equity
Stockholdersequity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively— — 
Common stock, $0.01 par value, 500,000,000 shares authorized; 115,211,206 and 121,882,778 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively1,150 1,219 
Additional paid-in capital203,288 345,137 
Retained earnings2,074,852 1,886,181 
Total stockholders equity
2,279,290 2,232,537 
Noncontrolling interests12 12 
Total equity2,279,302 2,232,549 
Total liabilities and equity$4,160,157 $4,021,980 


 
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CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Homebuilding:  
Home sales revenue$1,009,307 $766,942 $1,725,982 $1,361,780 
Land and lot sales revenue5,416 220 6,939 220 
Other operations revenue660 648 1,323 1,266 
Total revenues1,015,383 767,810 1,734,244 1,363,266 
Cost of home sales761,215 601,434 1,306,571 1,074,316 
Cost of land and lot sales4,874 374 5,027 576 
Other operations expense686 624 1,310 1,248 
Sales and marketing45,489 45,194 85,949 87,831 
General and administrative51,263 37,554 92,612 77,391 
Restructuring charges— 5,549 — 5,549 
Homebuilding income from operations151,856 77,081 242,775 116,355 
Equity in loss of unconsolidated entities(16)(25)(29)(39)
Other income (loss), net149 (6,328)257 (5,955)
Homebuilding income before income taxes151,989 70,728 243,003 110,361 
Financial Services:
Revenues2,681 2,296 4,786 3,890 
Expenses1,485 1,285 2,892 2,364 
Equity in income of unconsolidated entities3,949 2,932 6,640 4,488 
Financial services income before income taxes5,145 3,943 8,534 6,014 
Income before income taxes157,134 74,671 251,537 116,375 
Provision for income taxes(39,265)(18,143)(62,866)(27,964)
Net income$117,869 $56,528 $188,671 $88,411 
Earnings per share  
Basic$1.01 $0.43 $1.60 $0.67 
Diluted$1.00 $0.43 $1.59 $0.67 
Weighted average shares outstanding 
Basic116,824,108 130,292,563 118,082,691 132,326,856 
Diluted117,770,084 130,506,567 118,921,340 132,763,775 
 
 
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MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)
 
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
New
Homes
Delivered
Average
Sales
Price
New
Homes
Delivered
Average
Sales
Price
New
Homes
Delivered
Average
Sales
Price
New
Homes
Delivered
Average
Sales
Price
Arizona223 $652 165 $525 383 $658 305 $519 
California698 705 490 737 1,155 692 829 747 
Nevada127 589 109 505 201 602 189 515 
Washington69 968 40 916 147 985 92 871 
West total1,117 697 804 671 1,886 698 1,415 675 
Colorado59 568 55 595 99 582 119 580 
Texas233 498 254 477 447 477 463 469 
Central total292 512 309 498 546 496 582 492 
Maryland72 570 75 556 130 559 130 558 
North Carolina21 407 — — 35 392 — — 
South Carolina— — — — 285 — — 
Virginia43 725 41 777 70 727 60 791 
East total136 594 116 635 239 579 190 632 
Total1,545 $653 1,229 $624 2,671 $646 2,187 $623 
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
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
Arizona233 15.2 162 19.0 494 15.1 402 16.9 
California630 39.0 598 54.0 1,320 38.6 1,262 54.9 
Nevada180 11.3 102 16.5 435 11.6 268 15.4 
Washington90 6.2 105 9.5 161 5.6 231 8.3 
West total1,133 71.7 967 99.0 2,410 70.9 2,163 95.5 
Colorado58 5.8 50 3.8 163 5.3 109 4.1 
Texas278 22.0 205 29.7 707 23.0 439 30.1 
Central total336 27.8 255 33.5 870 28.3 548 34.2 
Maryland46 5.7 80 8.5 109 5.8 203 9.1 
North Carolina24 1.8 — — 66 1.6 — — 
South Carolina16 2.0 — — 22 1.5 — — 
Virginia67 5.5 30 3.3 132 5.3 79 3.6 
East total153 15.0 110 11.8 329 14.2 282 12.7 
Total1,622 114.5 1,332 144.3 3,609 113.4 2,993 142.4 

 


 
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MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)
 
As of June 30, 2021As of June 30, 2020
Backlog
Units
Backlog
Dollar
Value
Average
Sales
Price
Backlog
Units
Backlog
Dollar
Value
Average
Sales
Price
Arizona590 $424,048 $719 427 $255,916 $599 
California1,423 921,602 648 985 689,789 700 
Nevada370 245,895 665 216 134,652 623 
Washington153 165,314 1,080 228 213,093 935 
West total2,536 1,756,859 693 1,856 1,293,450 697 
Colorado190 126,913 668 90 54,170 602 
Texas758 372,381 491 321 146,650 457 
Central total948 499,294 527 411 200,820 489 
Maryland180 107,524 597 190 108,856 573 
North Carolina43 18,509 430 — — — 
South Carolina21 7,662 365 — — — 
Virginia174 134,594 774 101 75,942 752 
East total418 268,289 642 291 184,798 635 
Total3,902 $2,524,442 $647 2,558 $1,679,068 $656 
June 30,December 31,
20212020
Lots Owned or Controlled:
Arizona3,865 4,128 
California14,749 15,040 
Nevada2,191 2,639 
Washington933 964 
West total21,738 22,771 
Colorado1,506 1,080 
Texas8,900 6,985 
Central total10,406 8,065 
Maryland766 892 
North Carolina3,169 2,808 
South Carolina102 106 
Virginia931 999 
East total4,968 4,805 
Total37,112 35,641 
June 30,December 31,
20212020
Lots by Ownership Type:
Lots owned22,706 22,620 
Lots controlled (1)14,406 13,021 
Total37,112 35,641 

(1)    As of June 30, 2021 and December 31, 2020, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2021, lots controlled for Central and East include 2,060 lots and 184 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
The following tables reconcile homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.
 
Three Months Ended June 30,
2021%2020%
(dollars in thousands)
Home sales revenue$1,009,307 100.0 %$766,942 100.0 %
Cost of home sales761,215 75.4 %601,434 78.4 %
Homebuilding gross margin248,092 24.6 %165,508 21.6 %
Add:  interest in cost of home sales30,851 3.1 %21,801 2.8 %
Add:  impairments and lot option abandonments232 0.0 %1,380 0.2 %
Adjusted homebuilding gross margin$279,175 27.7 %$188,689 24.6 %
Homebuilding gross margin percentage24.6 % 21.6 % 
Adjusted homebuilding gross margin percentage27.7 % 24.6 % 


Six Months Ended June 30,
2021%2020%
(dollars in thousands)
Home sales revenue$1,725,982 100.0 %$1,361,780 100.0 %
Cost of home sales1,306,571 75.7 %1,074,316 78.9 %
Homebuilding gross margin419,411 24.3 %287,464 21.1 %
Add:  interest in cost of home sales51,529 3.0 %38,623 2.8 %
Add:  impairments and lot option abandonments445 0.0 %1,729 0.1 %
Adjusted homebuilding gross margin$471,385 27.3 %$327,816 24.1 %
Homebuilding gross margin percentage24.3 %21.1 %
Adjusted homebuilding gross margin percentage27.3 %24.1 %






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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.
 
June 30, 2021December 31, 2020
Loans payable$258,979 $258,979 
Senior notes1,085,595 1,084,022 
Total debt1,344,574 1,343,001 
Stockholders’ equity2,279,290 2,232,537 
Total capital$3,623,864 $3,575,538 
Ratio of debt-to-capital(1)
37.1 %37.6 %
Total debt$1,344,574 $1,343,001 
Less: Cash and cash equivalents(556,483)(621,295)
Net debt788,091 721,706 
Stockholders’ equity2,279,290 2,232,537 
Net capital$3,067,381 $2,954,243 
Ratio of net debt-to-net capital(2)
25.7 %24.4 %
__________
(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.


Page 11

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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, as reported and prepared in accordance with GAAP. EBITDA means net income 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, (f) impairments and lot option abandonments, (g) early loan termination costs and (h) restructuring charges. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company’s ability to service debt and obtain financing.
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
(in thousands)
Net income$117,869 $56,528 $188,671 $88,411 
Interest expense:
Interest incurred22,558 21,828 43,737 42,607 
Interest capitalized(22,558)(21,828)(43,737)(42,607)
Amortization of interest in cost of sales31,124 21,806 51,802 38,628 
Provision for income taxes39,265 18,143 62,866 27,964 
Depreciation and amortization8,990 6,720 16,120 12,176 
EBITDA197,248 103,197 319,459 167,179 
Amortization of stock-based compensation4,506 3,786 8,162 7,411 
Impairments and lot option abandonments232 1,380 445 1,729 
Early loan termination costs— 6,859 — 6,859 
Restructuring charges— 5,549 — 5,549 
Adjusted EBITDA$201,986 $120,771 $328,066 $188,727 
 
Page 12

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