Exhibit 99.1

 

LOGO

WILLIAM LYON HOMES REPORTS SECOND QUARTER 2018 RESULTS

30% INCREASE IN NEW HOME DELIVERIES; 25% INCREASE IN NET NEW HOME ORDERS;

140 BASIS POINT INCREASE IN GAAP GROSS MARGINS; 22% INCREASE IN ADJUSTED NET INCOME

NEWPORT BEACH, CA— July 31, 2018 — William Lyon Homes (NYSE: WLH), a leading homebuilder in the Western U.S., announced results for its second quarter ended June 30, 2018.

2018 Second Quarter Highlights (Comparison to 2017 Second Quarter)

 

   

Net income available to common stockholders of $22.5 million, or $0.57 per diluted share

 

   

Adjusted net income available to common stockholders of $23.1 million, or $0.58 per diluted share, compared to $19.0 million, or $0.49 per diluted share in the prior period, up 22% and 18%, respectively

 

   

Pre-tax income of $35.0 million, up 19%

 

   

Adjusted pre-tax income of $35.8 million, up 21%, which excludes transaction expenses of $0.8 million, before tax

 

   

New home deliveries of 1,082 homes, up 30%

 

   

Net new home orders of 1,270, up 25%

 

   

Dollar value of orders of $623.1 million, up 12%

 

   

Units in backlog of 1,648, up 28%

 

   

Dollar value of homes in backlog of $867.7 million, up 15%

 

   

Average sales locations of 107, up 22%

 

   

Average sales price (ASP) of new homes delivered of $479,100, down 6%

 

   

Home sales revenue of $518.4 million, up 23%

 

   

Homebuilding gross margin percentage of 17.9%

 

   

Adjusted homebuilding gross margin percentage of 23.3%

 

   

SG&A percentage of 11.1%, compared to 9.7%

 

   

Adjusted EBITDA of $62.4 million, up 25%


“We are pleased with our financial results for the second quarter, with several key metrics up over the prior year, including homebuilding revenues of $518.4 million, up 23%, new home deliveries of 1,082, up 30%, adjusted pre-tax income of $35.8 million, up 21%, adjusted net income of $23.1 million, up 22%, and adjusted earnings per share on a diluted basis of $0.58, up 18%,” said Matthew R. Zaist, President and Chief Executive Officer. “During the quarter, our GAAP homebuilding gross margins were 17.9%, including purchase accounting adjustments from the RSI acquisition, up 140 basis points compared to the second quarter of 2017, and up 40 basis points sequentially from the first quarter of this year.”

Mr. Zaist continued, “We also delivered another quarter of year-over-year improvement in net new home orders, which increased 25% to 1,270, and represents a monthly absorption rate of 4.0 net new home orders per community compared to 3.9 in the year ago period. The increase in monthly absorption rate year-over-year was driven by an improvement in both May and June absorption rates.”

Mr. Zaist added, “The strong performance in the first half of 2018 positions us well to achieve our goals for the year, and our updated expectations for the full year include new home deliveries of approximately 4,400 to 4,700 units, home sales revenue of approximately $2.25 billion to $2.35 billion, and pre-tax income before non-controlling interest of approximately $175 million to $185 million.”

Operating Results

Home sales revenue for the second quarter of 2018 was $518.4 million, as compared to $422.6 million in the year-ago period, an increase of 23%. The increase was driven by a 30% increase in deliveries to 1,082 homes, compared to 831 in the second quarter of 2017.

The dollar value of orders for the second quarter of 2018 was $623.1 million, an increase of 12%, from $554.0 million in the year-ago period. Net new home orders for the quarter were 1,270, up 25% from 1,017 in the second quarter of 2017, which represents monthly absorption of 4.5 per community in April, 3.3 in May compared to 3.2 in the prior year, and 4.0 in June compared to 3.5 in the prior year.

The dollar value of homes in backlog was $867.7 million as of June 30, 2018, an increase of 15%, compared to $755.3 million as of June 30, 2017. The increase was driven by a 28% increase in units in backlog to 1,648 from 1,285 in the year-ago period. The average sales price of homes in backlog decreased to $526,500 from $587,800 in the prior year, due to a higher number of homes in backlog from entry level buyers, which represent 48% of homes in backlog. In addition, our ASP in backlog as of June 30, 2018 was 10% higher than the ASP of homes closed in the second quarter.


Homebuilding gross margin percentage for homes closed during the second quarter of 2018 was 17.9%, up 140 basis points from 16.5% in the second quarter of 2017, and up 40 basis points from 17.5% in the first quarter of 2018.

Sales and marketing expense during the second quarter of 2018 was 5.6% of homebuilding revenue, compared to 5.0% in the year-ago quarter, which is primarily driven by the impact of the adoption of ASC 606, which was adopted on January 1, 2018, requiring the Company to record certain selling costs that were previously recorded as cost of sales to sales and marketing expense. General and administrative expenses increased to 5.5% of homebuilding revenue, compared to 4.6% in the year-ago quarter due to an increased headcount as a result of the RSI acquisition.

Balance Sheet Update

At quarter end, cash and cash equivalents totaled $49.2 million, owned real estate inventories totaled $2.3 billion, total assets were $2.9 billion and total equity was $981.0 million. Total debt to book capitalization was 59.5%, and net debt to net book capitalization was 58.6% at June 30, 2018, compared to 57.9% and 57.2% at June 30, 2017, and 54.5% and 49.6% at December 31, 2017, respectively.

During the second quarter the Company closed on a new credit agreement providing for an unsecured revolving credit facility of up to $325 million, which replaces the Company’s previous $170 million revolving credit facility.

Conference Call

The Company will host a conference call to discuss these results today, Tuesday, July 31, 2018 at 9:00 a.m. Pacific Time. The call will be available via both the telephone at (855) 851-4524 or (720) 634-2900, conference ID # 5673637, or through the Company’s website at www.lyonhomes.com in the Investor Relations section of the site.


A replay of the call will be available through August 7, 2018 by dialing (855) 859-2056 or (404) 537-3406, conference ID #5673637. A webcast replay of the call will also be available on the Company’s website approximately two hours after the broadcast.

About William Lyon Homes

William Lyon Homes is one of the largest Western U.S. regional homebuilders. Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Its core markets include Orange County, Los Angeles, the Inland Empire, the San Francisco Bay Area, Phoenix, Las Vegas, Denver, Portland, Seattle, Austin and San Antonio. The Company has a distinguished legacy of more than 60 years of homebuilding operations, over which time it has sold in excess of 104,000 homes. The Company markets and sells its homes under the William Lyon Homes brand in all of its markets except for Washington and Oregon, where the Company operates under the Polygon Northwest brand.

Forward-Looking Statements

Certain statements contained in this release and the accompanying comments during our conference call that are not historical information may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including, but not limited to, forward-looking statements related to: anticipated pre-tax income, gross margin performance, backlog conversion rates, operating and financial results for the third quarter of 2018 and full year 2018 and beyond, community count growth and project performance, market and industry trends, the continued housing market recovery, average sale price of homes to be closed in various periods, SG&A percentage, future cash needs and liquidity, minority interest from our homebuilding joint ventures, leverage ratios and reduction strategies, land acquisition spending, financial services and ancillary business performance and strategies; the anticipated benefits to be realized from the RSI acquisition; the anticipated financial or operational performance resulting from the RSI Communities transaction, and estimated new home deliveries, home sales revenue and community count on a combined Company basis. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others: the Company’s ability to successfully integrate RSI Communities’ homebuilding operations with its existing operations; any adverse effect on the Company’s, or RSI Communities’, business operations following the acquisition; adverse weather conditions; the availability of labor and homebuilding materials and increased construction cycle times; the availability and timing of mortgage financing; our financial leverage and level of indebtedness and any inability to comply with financial and


other covenants under our debt instruments; continued volatility and worsening in general economic conditions either internationally, nationally or in regions in which we operate; increased housing supply in our markets; affordability pressures; increased outside broker costs; increased costs of homebuilding materials; changes in governmental laws and regulations and compliance, increased costs, fees and delays associated therewith; government actions, policies, programs and regulations directed at or affecting the housing market (including the Tax Cuts and Jobs Act (“TCJA”), the Dodd-Frank Act, tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted corporate income tax rates, including pursuant to the TCJA; worsening in markets for residential housing; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; defects in manufactured products or other homebuilding materials; decline in real estate values resulting in impairment of our real estate assets; volatility in the banking industry, credit and capital markets; restraints on foreign investment; terrorism or other hostilities involving the United States and other geopolitical risk as well as restrictive policies such as tariffs or capital investment restrictions; building moratorium or “slow-growth” or “no-growth” initiatives that could be implemented in states in which we operate; changes in mortgage and other interest rates; conditions in the capital, credit and financial markets, including mortgage lending standards and the availability of mortgage financing; changes in generally accepted accounting principles or interpretations of those principles; competition for home sales from other sellers of new and resale homes; cancellations and our ability to realize our backlog; the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements; limitations on our ability to utilize our tax attributes; whether an ownership change occurred that could, under certain circumstances, have resulted in the limitation of our ability to offset prior years’ taxable income with net operating losses; the timing of receipt of regulatory approvals and the opening of projects; the availability and cost of land for future development; 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/Media Contacts:

Larry Clark

Financial Profiles, Inc.

(310) 622-8223

WLH@finprofiles.com


WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

 

     Three     Three  
     Months     Months  
     Ended     Ended  
     June 30,     June 30,  
     2018     2017  

Operating revenue

    

Home sales

   $ 518,432     $ 422,633  

Construction services

     1,020       59  
  

 

 

   

 

 

 
     519,452       422,692  
  

 

 

   

 

 

 

Operating costs

    

Cost of sales — homes

     (425,572     (353,057

Construction services

     (959     (6

Sales and marketing

     (28,848     (21,284

General and administrative

     (28,507     (19,550

Transaction expenses

     (777     —    

Other

     (621     (560
  

 

 

   

 

 

 
     (485,284     (394,457
  

 

 

   

 

 

 

Operating income

     34,168       28,235  

Equity in income of unconsolidated joint ventures

     533       1,213  

Other income, net

     311       8  
  

 

 

   

 

 

 

Income before provision for income taxes

     35,012       29,456  

Provision for income taxes

     (7,776     (9,205
  

 

 

   

 

 

 

Net income

     27,236       20,251  

Less: Net income attributable to noncontrolling interests

     (4,781     (1,297
  

 

 

   

 

 

 

Net income available to common stockholders

   $ 22,455     $ 18,954  
  

 

 

   

 

 

 

Income per common share:

    

Basic

   $ 0.59     $ 0.51  

Diluted

   $ 0.57     $ 0.49  

Weighted average common shares outstanding:

    

Basic

     38,017,211       37,051,967  

Diluted

     39,688,271       38,298,624  


WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

 

     Six     Six  
     Months     Months  
     Ended     Ended  
     June 30,     June 30,  
     2018     2017  

Operating revenue

    

Home sales

   $ 890,817     $ 681,487  

Construction services

     2,003       59  
  

 

 

   

 

 

 
     892,820       681,546  
  

 

 

   

 

 

 

Operating costs

    

Cost of sales — homes

     (732,880     (571,512

Construction services

     (1,942     (6

Sales and marketing

     (51,541     (35,989

General and administrative

     (53,028     (38,496

Transaction expenses

     (3,907     —    

Other

     (919     (1,000
  

 

 

   

 

 

 
     (844,217     (647,003
  

 

 

   

 

 

 

Operating income

     48,603       34,543  

Equity in income of unconsolidated joint ventures

     1,465       1,462  

Other income, net

     346       353  
  

 

 

   

 

 

 

Income before extinguishment of debt

     50,414       36,358  

Loss on extinguishment of debt

     —         (21,828
  

 

 

   

 

 

 

Income before provision for income taxes

     50,414       14,530  

Provision for income taxes

     (10,590     (3,575
  

 

 

   

 

 

 

Net income

     39,824       10,955  

Less: Net income attributable to noncontrolling interests

     (9,041     (2,001
  

 

 

   

 

 

 

Net income available to common stockholders

   $ 30,783     $ 8,954  
  

 

 

   

 

 

 

Income per common share:

    

Basic

   $ 0.81     $ 0.24  

Diluted

   $ 0.77     $ 0.23  

Weighted average common shares outstanding:

    

Basic

     37,974,471       36,980,540  

Diluted

     39,772,437       38,231,201  


WILLIAM LYON HOMES

CONSOLIDATED BALANCE SHEETS

(in thousands, except number of shares and par value per share)

 

     June 30,      December 31,  
     2018      2017  
     (unaudited)         
ASSETS      

Cash and cash equivalents

   $ 49,171      $ 182,710  

Receivables

     14,237        10,223  

Escrow proceeds receivable

     3,797        3,319  

Real estate inventories

     

Owned

     2,331,568        1,699,850  

Not owned

     247,049        —    

Investment in unconsolidated joint ventures

     5,695        7,867  

Goodwill

     118,877        66,902  

Intangibles, net of accumulated amortization of $4,640 as of June 30, 2018 and December 31, 2017

     6,700        6,700  

Deferred income taxes

     46,445        47,915  

Lease right-of-use assets

     16,818        14,454  

Other assets, net

     37,890        21,164  
  

 

 

    

 

 

 

Total assets

   $ 2,878,247      $ 2,061,104  
  

 

 

    

 

 

 
LIABILITIES AND EQUITY      

Accounts payable

   $ 89,049      $ 58,799  

Accrued expenses

     122,410        111,491  

Liabilities from inventories not owned

     247,049        —    

Revolving credit facility

     145,000        —    

Land notes payable

     —          589  

Construction notes payable

     1,510        —    

Joint venture notes payable

     161,562        93,926  

53/4% Senior Notes due April 15, 2019

     —          149,362  

7% Senior Notes due August 15, 2022

     347,107        346,740  

6% Senior Notes due September 1, 2023

     343,354        —    

57/8% Senior Notes due January 31, 2025

     440,251        439,567  
  

 

 

    

 

 

 
     1,897,292        1,200,474  
  

 

 

    

 

 

 

Commitments and contingencies

     

Equity:

     

William Lyon Homes stockholders’ equity

     

Preferred stock, par value $0.01 per share; 10,000,000 shares authorized and no shares issued and outstanding at June 30, 2018 and December 31, 2017

     —          —    

Common stock, Class A, par value $0.01 per share; 150,000,000 shares authorized; 34,407,540 and 34,267,510 shares issued, 33,159,509 and 33,135,650 shares outstanding at June 30, 2018 and December 31, 2017, respectively

     344        344  

Common stock, Class B, par value $0.01 per share; 30,000,000 shares authorized; 4,817,394 shares issued and outstanding at June 30, 2018 and December 31, 2017

     48        48  

Additional paid-in capital

     448,656        454,286  

Retained earnings

     356,577        325,794  
  

 

 

    

 

 

 

Total William Lyon Homes stockholders’ equity

     805,625        780,472  

Noncontrolling interests

     175,330        80,158  
  

 

 

    

 

 

 

Total equity

     980,955        860,630  
  

 

 

    

 

 

 

Total liabilities and equity

   $ 2,878,247      $ 2,061,104  
  

 

 

    

 

 

 


WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

 

     Three Months Ended June 30,  
     2018     2017        
     Consolidated     Consolidated     Percentage %  
     Total     Total     Change  

Selected Financial Information (1)

      

(dollars in thousands)

      

Homes closed

     1,082       831       30
  

 

 

   

 

 

   

 

 

 

Home sales revenue

   $ 518,432     $ 422,633       23

Cost of sales (excluding interest and purchase accounting adjustments)

     (397,858     (332,368     20
  

 

 

   

 

 

   

 

 

 

Adjusted homebuilding gross margin (2)

   $ 120,574     $ 90,265       34
  

 

 

   

 

 

   

 

 

 

Adjusted homebuilding gross margin percentage (2)

     23.3     21.4     9
  

 

 

   

 

 

   

 

 

 

Interest in cost of sales

     (22,329     (20,689     8

Purchase accounting adjustments

     (5,385     —         N/M  
  

 

 

   

 

 

   

 

 

 

Gross margin

   $ 92,860     $ 69,576       33
  

 

 

   

 

 

   

 

 

 

Gross margin percentage

     17.9     16.5     8
  

 

 

   

 

 

   

 

 

 

Number of homes closed

      

California

     268       216       24

Arizona

     123       181       (32 %) 

Nevada

     91       53       72

Colorado

     145       58       150

Washington

     138       106       30

Oregon

     140       217       (35 %) 

Texas

     177       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     1,082       831       30
  

 

 

   

 

 

   

 

 

 

Average sales price of homes closed

      

California

   $ 650,900     $ 691,200       (6 %) 

Arizona

     315,200       289,300       9

Nevada

     507,800       564,800       (10 %) 

Colorado

     430,600       534,600       (19 %) 

Washington

     612,100       662,800       (8 %) 

Oregon

     473,000       413,700       14

Texas

     259,200       —         N/M  
  

 

 

   

 

 

   

 

 

 

Company Average

   $ 479,100     $ 508,600       (6 %) 

Number of net new home orders

      

California

     337       280       20

Arizona

     118       149       (21 %) 

Nevada

     115       93       24

Colorado

     160       86       86

Washington

     136       164       (17 %) 

Oregon

     199       245       (19 %) 

Texas

     205       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     1,270       1,017       25
  

 

 

   

 

 

   

 

 

 

Average number of sales locations during period

      

California

     28       23       22

Arizona

     6       8       (25 %) 

Nevada

     14       14       0

Colorado

     15       15       0

Washington

     10       10       0

Oregon

     14       18       (22 %) 

Texas

     20       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     107       88       22
  

 

 

   

 

 

   

 

 

 

 

(1)

For the 2018 period presented, the Company is reporting in seven segments: California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Texas is a new reporting segment resulting from the RSI Acquisition completed in 2018. For the 2017 period presented, the Company reported in six segments: California, Arizona, Nevada, Colorado, Washington, and Oregon.

(2)

Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe this information is meaningful as it isolates the impact that interest and purchase accounting adjustments have on homebuilding gross margin and allows investors to make better comparisons with our competitors.


WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

 

     Six Months Ended June 30,  
     2018     2017        
     Consolidated     Consolidated     Percentage %  
     Total     Total     Change  

Selected Financial Information (1)

      

(dollars in thousands)

      

Homes closed

     1,822       1,330       37
  

 

 

   

 

 

   

 

 

 

Home sales revenue

   $ 890,817     $ 681,487       31

Cost of sales (excluding interest and purchase accounting adjustments)

     (685,627     (539,215     27
  

 

 

   

 

 

   

 

 

 

Adjusted homebuilding gross margin (2)

   $ 205,190     $ 142,272       44
  

 

 

   

 

 

   

 

 

 

Adjusted homebuilding gross margin percentage (2)

     23.0     20.9     10
  

 

 

   

 

 

   

 

 

 

Interest in cost of sales

     (41,133     (32,297     27

Purchase accounting adjustments

     (6,120     —         N/M  
  

 

 

   

 

 

   

 

 

 

Gross margin

   $ 157,937     $ 109,975       44
  

 

 

   

 

 

   

 

 

 

Gross margin percentage

     17.7     16.1     10
  

 

 

   

 

 

   

 

 

 

Number of homes closed

      

California

     478       337       42

Arizona

     228       275       (17 %) 

Nevada

     165       101       63

Colorado

     238       96       148

Washington

     232       176       32

Oregon

     244       345       (29 %) 

Texas

     237       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     1,822       1,330       37
  

 

 

   

 

 

   

 

 

 

Average sales price of homes closed

      

California

   $ 647,000     $ 686,200       (6 %) 

Arizona

     310,500       287,600       8

Nevada

     578,100       598,800       (3 %) 

Colorado

     430,700       545,200       (21 %) 

Washington

     599,700       646,200       (7 %) 

Oregon

     463,400       419,100       11

Texas

     255,900       —         N/M  
  

 

 

   

 

 

   

 

 

 

Company Average

   $ 488,900     $ 512,400       (5 %) 

Number of net new home orders

      

California

     620       545       14

Arizona

     226       277       (18 %) 

Nevada

     224       170       32

Colorado

     304       147       107

Washington

     315       316       0

Oregon

     408       427       (4 %) 

Texas

     279       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     2,376       1,882       26
  

 

 

   

 

 

   

 

 

 

Average number of sales locations during period

      

California

     24       24       0

Arizona

     6       8       (25 %) 

Nevada

     13       12       8

Colorado

     15       13       15

Washington

     9       9       0

Oregon

     14       19       (26 %) 

Texas

     13       —         N/M  
  

 

 

   

 

 

   

 

 

 

Total

     94       85       11
  

 

 

   

 

 

   

 

 

 

 

(1)

For the 2018 period presented, the Company is reporting in seven segments: California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Texas is a new reporting segment resulting from the RSI Acquisition completed in 2018. For the 2017 period presented, the Company reported in six segments: California, Arizona, Nevada, Colorado, Washington, and Oregon.

(2)

Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe this information is meaningful as it isolates the impact that interest and purchase accounting adjustments have on homebuilding gross margin and allows investors to make better comparisons with our competitors.


WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

 

     As of June 30,  
     2018      2017         
     Consolidated      Consolidated      Percentage %  
     Total      Total      Change  

Backlog of homes sold but not closed at end of period

        

California

     457        432        6

Arizona

     159        206        (23 %) 

Nevada

     145        128        13

Colorado

     238        126        89

Washington

     174        192        (9 %) 

Oregon

     236        201        17

Texas

     239        —          N/M  
  

 

 

    

 

 

    

 

 

 

Total

     1,648        1,285        28
  

 

 

    

 

 

    

 

 

 

Dollar amount of homes sold but not closed at end of period (in thousands)

        

California

   $ 346,687      $ 345,604        0

Arizona

     50,048        63,435        (21 %) 

Nevada

     95,759        84,348        14

Colorado

     99,531        59,266        68

Washington

     118,863        115,018        3

Oregon

     92,270        87,652        5

Texas

     64,503        —          N/M  
  

 

 

    

 

 

    

 

 

 

Total

   $ 867,661      $ 755,323        15
  

 

 

    

 

 

    

 

 

 

Lots owned and controlled at end of period

        

Lots owned (1)

        

California

     3,921        1,653        137

Arizona

     3,993        4,660        (14 %) 

Nevada

     2,822        2,941        (4 %) 

Colorado

     1,130        1,415        (20 %) 

Washington

     1,327        1,303        2

Oregon

     2,623        1,449        81

Texas

     3,398        —          N/M  
  

 

 

    

 

 

    

 

 

 

Total

     19,214        13,421        43
  

 

 

    

 

 

    

 

 

 

Lots controlled

        

California

     2,022        1,141        77

Arizona

     651        —          N/M  

Nevada

     3        420        (99 %) 

Colorado

     1,197        192        523

Washington

     1,334        973        37

Oregon

     1,456        2,386        (39 %) 

Texas

     3,629        —          N/M  
  

 

 

    

 

 

    

 

 

 

Total

     10,292        5,112        101
  

 

 

    

 

 

    

 

 

 

Total lots owned and controlled

        

California

     5,943        2,794        113

Arizona

     4,644        4,660        0

Nevada

     2,825        3,361        (16 %) 

Colorado

     2,327        1,607        45

Washington

     2,661        2,276        17

Oregon

     4,079        3,835        6

Texas

     7,027        —          N/M  
  

 

 

    

 

 

    

 

 

 

Total

     29,506        18,533        59
  

 

 

    

 

 

    

 

 

 

 

(1)

Certain lots in California and Texas are consolidated on the Company’s accompanying balance sheet in accordance with FASB ASC Topic 470, Debt (“ASC 470”). Included in lots owned are 1,079 lots in California and 1,785 lots in Texas that are associated with a land banking transaction that is consolidated on the Company’s accompanying balance sheet in accordance with ASC 470.


WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

 

     Three
Months
Ended
June 30,
2018
    Three
Months
Ended
June 30,
2017
    Six
Months
Ended
June 30,
2018
    Six
Months
Ended
June 30,
2017
 

Net income available to common stockholders

   $ 22,455     $ 18,954     $ 30,783     $ 8,954  

Net income, adjusted for transaction expenses and loss on extinguishment of debt, net of tax benefit (1)

   $ 23,060     $ 18,954     $ 33,870     $ 23,030  

Net cash used in operating activities

   $ (227,978   $ (25,431   $ (129,950   $ (66,812

Interest incurred

   $ 22,808     $ 18,822     $ 42,066     $ 38,246  

Adjusted EBITDA (2)

   $ 62,415     $ 49,959     $ 104,127     $ 70,000  

Adjusted EBITDA Margin (3)

     12.0     11.8     11.7     10.3

Ratio of adjusted EBITDA to interest incurred

     2.7       2.7       2.5       1.8  

Balance Sheet Data

 

     June 30,
2018
    December 31,
2017
 

Cash and cash equivalents

   $ 49,171     $ 182,710  

Total William Lyon Homes stockholders’ equity

     805,625       780,472  

Noncontrolling interests

     175,330       80,158  

Total debt

     1,438,784       1,030,184  
  

 

 

   

 

 

 

Total capital

   $ 2,419,739     $ 1,890,814  
  

 

 

   

 

 

 

Ratio of debt to total capital

     59.5     54.5

Ratio of net debt to total capital (net of cash)

     58.6     49.6


WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

 

(1)

Adjusted net income means net income available to common stockholders plus transaction expenses and loss for the extinguishment of the 8.5% Senior Notes. Adjusted net income is not a financial measure prepared in accordance with U.S. GAAP. Adjusted net income is presented herein because management believes the presentation of adjusted net income provides useful information to the Company’s investors regarding the Company’s results of operations because adjusted net income isolates the impact of the one-time, non-recurring transaction expenses and infrequent extinguishment fees. Adjusted net income should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of net income available to common stockholders to adjusted net income is provided in the following table:

 

     Three
Months
Ended
June 30,

2018
     Three
Months
Ended
June 30,

2017
     Six
Months
Ended
June 30,

2018
     Six
Months
Ended
June 30,

2017
 

Net income available to common stockholders

   $ 22,455      $ 18,954      $ 30,783      $ 8,954  

Add: Transaction expenses

     777        —          3,907        —    

Less: Income tax benefit applicable to transaction expenses

     (172      —          (820      —    

Add: Loss on extinguishment of debt

     —          —          —          21,828  

Less: Income tax benefit applicable to loss on extinguishment of debt

     —          —          —          (7,752
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income, adjusted for transaction expenses and loss on extinguishment of debt, net of tax benefits

   $ 23,060      $ 18,954      $ 33,870      $ 23,030  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average common shares outstanding

     39,688,271        38,298,624        39,772,437        38,231,201  

Adjusted net income excluding noncontrolling interest per diluted share

   $ 0.58      $ 0.49      $ 0.85      $ 0.60  


WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

 

(2) Adjusted EBITDA means net income available to common stockholders plus (i) provision for income taxes, (ii) interest expense, (iii) amortization of capitalized interest included in cost of sales, (iv) stock based compensation, (v) depreciation and amortization, (vi) non-cash purchase accounting adjustments, (vii) cash distributions of income from unconsolidated joint ventures, (viii) equity in income of unconsolidated joint ventures, (ix) transaction expenses, and (x) loss on extinguishment of debt. Other companies may calculate adjusted EBITDA differently. Adjusted EBITDA is not a financial measure prepared in accordance with U.S. GAAP. Adjusted EBITDA is presented herein because management believes the presentation of adjusted EBITDA provides useful information to the Company’s investors regarding the Company’s financial condition and results of operations because adjusted EBITDA is a widely utilized indicator of a company’s operating performance. Adjusted EBITDA should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of net income available to common stockholders to adjusted EBITDA is provided in the following table:

 

     Three
Months
Ended
June 30,
2018
     Three
Months
Ended
June 30,
2017
     Six
Months
Ended
June 30,
2018
     Six
Months
Ended
June 30,
2017
 

Net income available to common stockholders

   $ 22,455      $ 18,954      $ 30,783      $ 8,954  

Provision for income taxes

     7,776        9,205        10,590        3,575  

Interest expense

           

Interest incurred

     22,808        18,822        42,066        38,246  

Interest capitalized

     (22,808      (18,822      (42,066      (38,246

Amortization of capitalized interest included in cost of sales

     22,393        20,689        41,218        32,297  

Stock based compensation

     2,006        1,539        5,187        3,215  

Depreciation and amortization

     1,916        442        3,972        891  

Non-cash purchase accounting adjustments

     5,385        —          6,120        —    

Cash distributions of income from unconsolidated joint ventures

     240        343        3,815        702  

Equity in income of unconsolidated joint ventures

     (533      (1,213      (1,465      (1,462

Transaction expenses

     777        —          3,907        —    

Loss on extinguishment of debt

     —          —          —          21,828  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 62,415      $ 49,959      $ 104,127      $ 70,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

 


WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

 

(3)

Calculated as Adjusted EBITDA as a percentage of operating revenue.

Adjusted pre-tax income means income before provision for income taxes plus transaction expenses and loss for the extinguishment of the 8.5% Senior Notes. Adjusted pre-tax income is not a financial measure prepared in accordance with U.S. GAAP. Adjusted pre-tax income is presented herein because management believes the presentation of adjusted pre-tax income provides useful information to the Company’s investors regarding the Company’s results of operations because adjusted pre-tax income isolates the impact of the one-time, non-recurring transaction expenses and infrequent extinguishment fees. Adjusted pre-tax income should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of income before provision for income taxes to adjusted pre-tax income is provided in the following table:

 

     Three
Months
Ended
June 30,
2018
     Three
Months
Ended
June 30,
2017
     Six
Months
Ended
June 30,
2018
     Six
Months
Ended
June 30,
2017
 

Income before provision for income taxes

   $ 35,012      $ 29,456      $ 50,414      $ 14,530  

Add: Transaction expenses

     777        —          3,907        —    

Loss on extinguishment of debt

     —          —          —          21,828  
  

 

 

    

 

 

    

 

 

    

 

 

 

Pre-tax income, adjusted for transaction expenses and loss on extinguishment of debt

   $ 35,789      $ 29,456      $ 54,321      $ 36,358  
  

 

 

    

 

 

    

 

 

    

 

 

 

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