Attached files
| file | filename |
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| 8-K - FORM 8-K - CalAtlantic Group, Inc. | form8-k.htm |
Exhibit 99.1
News Release
Standard Pacific Corp. Reports 2010 Fourth Quarter and Full Year Results
IRVINE, CALIFORNIA, February 2, 2011. Standard Pacific Corp. (NYSE:SPF) today announced operating results for its fourth quarter and year ended December 31, 2010.
2010 Fourth Quarter Highlights and Comparisons to the 2009 Fourth Quarter
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·
|
Net loss of $21.9 million, or $0.08 per share, vs. net income of $82.7 million, or $0.31 per share
|
|
o
|
2010 net income of $4.3 million*, or $0.02* per share, excluding charges of $23.8 million related to the refinance of $575.7 million of pre-2016 debt and $2.3 million of impairments
|
|
o
|
2009 net income included a $94.1 million income tax benefit related to a change in tax law
|
|
·
|
Homebuilding revenues of $212.4 million, down 37% from $339.8 million
|
|
·
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619 new home deliveries, down 34% from 943 homes
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|
·
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Average home price of $340,000, up 7% from $318,000
|
|
·
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Gross margin from home sales of 22.2% vs. 18.1% (23.1%* vs. 20.3%* excluding impairment charges)
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|
·
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SG&A rate from home sales of 18.1% vs. 16.5%
|
|
o
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SG&A expenses down $11.4 million
|
|
·
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Net new orders down 22% to 428 homes
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|
·
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Backlog value down 34% to $137.4 million from $207.9 million
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|
o
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414 homes in backlog, down 31% from 599 homes
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|
·
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Cash outflows from operating activities of $52.5 million vs. cash inflows of $109.7 million
|
|
o
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Cash flows from operating activities before land purchases, land sales and debt restructuring payments was $10.4 million* vs. $110.3 million*
|
|
·
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$187.5 million in proceeds from exercise in full of warrant for common stock
|
|
·
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Homebuilding cash balance of $748.8 million vs. $602.2 million
|
|
·
|
Adjusted net homebuilding debt to total adjusted capitalization ratio of 47.9%* vs. 56.0%*
|
|
o
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Total debt to book capitalization of 68.5% vs. 73.4%
|
2010 Fiscal Year Highlights and Comparisons to Fiscal Year 2009
|
·
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Net loss of $11.7 million, or $0.05 per share, vs. a net loss of $13.8 million, or $0.06 per share
|
|
o
|
2010 net income of $20.6 million*, or $0.08* per share, excluding $30.0 million of debt refinance charges and $2.3 million of impairments
|
|
·
|
Homebuilding revenues of $912.4 million, down 22% from $1,166.4 million
|
|
·
|
2,646 new home deliveries, down 24% from 3,465 homes
|
|
·
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Gross margin from home sales of 22.2% vs. 14.5% (22.4%* vs. 18.8%* excluding impairment charges)
|
|
·
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SG&A rate from home sales of 16.6% vs. 16.3%* (2009 excludes $19.1 million of restructuring charges)
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|
·
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Net new orders down 26% to 2,461 homes
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|
·
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Cash outflows from operating activities of $81.0 million vs. cash inflows of $419.8 million
|
|
o
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Cash flows from operating activities before land purchases, land sales and debt restructuring payments was $201.6 million* vs. $389.2 million*
|
Ken Campbell, the Company’s President and CEO commented, “I am pleased to announce that before debt refinancing charges, the fourth quarter represented our third consecutive quarter of generating an operating profit. Before land spends and debt refinancing costs, we generated $10 million of cash flows from operations for the quarter and over $200 million for 2010 despite weaker homebuyer demand.” Mr. Campbell continued, “During the quarter we also successfully completed the refinancing of $576 million of our pre-September 2016 debt, which was reduced from $665 million to less than $90 million. This refinance, coupled with the proceeds from our recent equity issuance, provides us with a substantial amount of capital and liquidity to continue our land acquisition strategy over the next few years. As a result of our land buying efforts, we expect to open over 55 new communities in 2011, 35 of which are slated for the first half of the year.”
For the 2010 fourth quarter, the Company generated a net loss of $21.9 million, or $0.08 per diluted share, compared to net income of $82.7 million, or $0.31 per diluted share, for the year earlier period. The 2010 fourth quarter included a $23.8 million charge related to the early extinguishment of debt and $2.3 million of asset impairments. Excluding charges related to the early extinguishment of debt and impairments, the Company generated net income of $4.3 million* for the 2010 fourth quarter and $20.6 million* for the full year 2010. The 2009 fourth quarter included an income tax benefit of $94.1 million related to tax legislation enacted during the prior year, $10.9 million of asset impairment charges, a $3.5 million charge related to the early extinguishment of debt and $1.6 million of restructuring charges.
Homebuilding revenues for the 2010 fourth quarter were $212.4 million, down 37% from $339.8 million for the 2009 fourth quarter. The decrease in homebuilding revenues was driven primarily by a 34% decline in new home deliveries to 619 homes, which was offset in part by a 7% increase in consolidated average home price to $340,000 as compared to $318,000 for the 2009 fourth quarter. The increase in average home price was largely due to the delivery of more higher priced homes in California and a reduction in deliveries in Florida and Arizona as compared to the 2009 fourth quarter. Homebuilding revenues for 2010 were $912.4 million compared to $1,166.4 million for the prior year.
Gross margin from home sales for the 2010 fourth quarter was 22.2% versus 18.1% for the year earlier period. The Company’s 2010 fourth quarter gross margin from home sales included $1.8 million of inventory impairment charges and was offset by a $2.0 million benefit related to a reduction in its warranty accrual, while the Company’s 2009 fourth quarter margin included $6.6 million of inventory impairment charges. Excluding impairment charges, gross margin from home sales was 23.1%* for the 2010 fourth quarter compared to 20.3%* for the prior year quarter. The 280 basis point improvement in the 2010 fourth quarter adjusted gross margin from home sales was driven primarily by lower direct construction costs, an increased mix of California deliveries and higher margins in Southern California as compared to the 2009 fourth quarter, and the $2.0 million warranty accrual adjustment in 2010. Excluding impairments and previously capitalized interest costs, gross margin from home sales for the 2010 fourth quarter was 30.2%* versus 26.9%* for the 2009 fourth quarter.
The Company’s 2010 fourth quarter SG&A expenses (including Corporate G&A) were $38.0 million compared to $49.4 million for the 2009 fourth quarter and included noncash stock-based compensation expenses of $3.3 million and $5.6 million, respectively. The Company’s 2010 fourth quarter SG&A rate from home sales was 18.1% versus 16.5% for the 2009 fourth quarter. The increase in the Company’s SG&A rate was primarily the result of a 30% decrease in revenues from home sales.
During the 2010 fourth quarter, the Company issued $275 million of 8⅜% senior notes due 2018 and $400 million of 8⅜% senior notes due 2021. The net proceeds from the issuance of these notes (approximately $666.8 million) were used to repurchase or repay $575.7 million principal amount of indebtedness due between 2012 and 2015 and to extinguish a $24.5 million liability associated with the termination of the Company’s Term Loan B interest rate swap arrangement. As a result of these transactions, the Company recognized a $23.8 million charge from the early extinguishment of debt, $21.7 million of which was a cash charge related to tender premiums and other related costs and $2.1 million related to the write-off of deferred debt issuance costs. The $24.5 million cost associated with the early unwind of the Company’s interest rate swap related to
2
the Term Loan B will be amortized over a period of approximately 2.3 years. As a result of these refinancing transactions, the Company reduced the principal amount of its debt maturing prior to September 2016 from approximately $665 million to $89 million and eliminated substantially all of the restrictive covenants contained in the supplemental indentures governing the 2012, 2014 and 2015 notes.
The Company generated a $9.1 million income tax benefit during the 2010 fourth quarter related to the current quarter loss which was fully offset by a noncash deferred tax asset valuation allowance for the same amount. In addition, the Company recorded a $1.2 million tax benefit related to a net reduction of its liability for uncertain tax positions during the 2010 fourth quarter due primarily to the expiration of statutes of limitations related to state income taxes. During the three months and year ended December 31, 2010, the Company recorded a noncash reduction of its deferred tax asset of $8.8 million and $22.9 million, respectively, and a corresponding noncash reduction of its deferred tax asset valuation allowance primarily related to built-in losses realized during these periods that were in excess of the Section 382 annual limitation. As of December 31, 2010, the Company had a $516.4 million deferred tax asset valuation allowance.
The Company used $52.5 million of cash flows from operating activities for the 2010 fourth quarter versus generating $109.7 million of cash flows from operating activities in the 2009 fourth quarter. The decline in cash flows from operations as compared to the 2009 fourth quarter was driven primarily by a $127.4 million decrease in homebuilding revenues (including a $37.6 million decrease in land sale revenues), a $24.5 payment made to unwind the Term Loan B interest rate swap and $6.5 million of accelerated interest payments made in connection with the 2010 fourth quarter tender and debt restructure. Cash outflows from operations for the three months ended December 31, 2010 and 2009 also included $33.6 million and $35.3 million, respectively, of cash land purchases. Excluding cash land purchases, land sales, and $31.0 million of accelerated payments related to the debt restructure, cash inflows from operating activities for the 2010 fourth quarter were $10.4 million* versus $110.3 million* in the 2009 fourth quarter. In addition, during the 2010 fourth quarter, the Company generated $239.5 million of cash flows from financing activities, which included approximately $187.5 million of proceeds related to the issuance of the Company’s common stock in connection with the early exercise of a warrant.
Net new orders (excluding joint ventures) for the 2010 fourth quarter decreased 22% from the 2009 fourth quarter to 428 homes on an 8% increase in the number of average active selling communities from 124 to 134. The Company’s monthly sales absorption rate for the 2010 fourth quarter was 1.1 per community compared to 1.5 per community for the 2009 fourth quarter. The Company’s cancellation rate for the 2010 fourth quarter was 23% versus 21% for the 2009 fourth quarter and 19% for the 2010 third quarter. The total number of sales cancellations for the 2010 fourth quarter was 130, of which 71 cancellations related to homes in the Company’s 2010 fourth quarter beginning backlog and 59 related to orders generated during the quarter.
The dollar value of homes in backlog (excluding joint ventures) decreased 34% to $137.4 million, or 414 homes, compared to $207.9 million, or 599 homes, for the 2009 fourth quarter. The decrease in backlog value was driven primarily by a 22% decrease in net new orders and a 4% decline in average home price in backlog from $347,000 to $332,000.
During the 2010 fourth quarter, the Company approved (but had not yet consummated) the purchase of $45.0 million of land, comprised of approximately 1,400 lots, 13% of which are finished and 87% are raw. During the same period, the Company purchased approximately 750 lots valued at $33.6 million. Approximately 36% of the land purchases related to land located in California and 38% in Texas, with the balance spread throughout the Company’s other operations. For the year ended December 31, 2010, the Company purchased approximately 5,400 lots valued at $315.4 million ($282.4 million of which were land purchases and $33.0 million were acquired through an investment in a joint venture).
3
Earnings Conference Call
A conference call to discuss the Company’s 2010 fourth quarter and full year results will be held at 12:00 p.m. Eastern time February 3, 2011. The call will be broadcast live over the Internet and can be accessed through the Company’s website at http://standardpacifichomes.com/ir. The call will also be accessible via telephone by dialing (888) 747-4655 (domestic) or (913) 312-0696 (international); Passcode: 5430040. The audio transmission with the slide presentation will be available on our website for replay within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 5430040.
About Standard Pacific
Standard Pacific, one of the nation’s largest homebuilders, has built more than 112,000 homes during its 45-year history. The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. For more information about the Company and its new home developments, please visit our website at: www.standardpacifichomes.com.
This news release contains forward-looking statements. These statements include but are not limited to statements regarding new home orders, deliveries, backlog, average home price, revenue, strategy, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; the opening of new communities; the dollar value and timing of anticipated land purchases; the availability of land opportunities and our ability to consummate these opportunities; and the future condition of the housing market. Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company’s control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied. Such factors include but are not limited to: local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions of terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company’s business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company’s mortgage banking operations; future business decisions and the Company’s ability to successfully implement the Company’s operational and other strategies; litigation and warranty claims; and other risks discussed in the Company’s filings with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2009 and subsequent Quarterly Reports on Form 10-Q. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements. The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
Contact:
John Stephens, SVP & CFO (949) 789-1641, jstephens@stanpac.com
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*Please see “Reconciliation of Non-GAAP Financial Measures” on page 11.
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###
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(Note: Tables Follow)
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4
KEY STATISTICS AND FINANCIAL DATA1
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As of or For the Three Months Ended
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||||||||||||||
|
December 31,
|
December 31,
|
Percentage
|
September 30,
|
Percentage
|
||||||||||
|
2010
|
2009
|
or % Change
|
2010
|
or % Change
|
||||||||||
|
Operating Data
|
(Dollars in thousands, except average selling price)
|
|||||||||||||
|
Deliveries
|
619
|
943
|
(34%)
|
599
|
3%
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|||||||||
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Average selling price
|
$
|
340,000
|
$
|
318,000
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7%
|
$
|
345,000
|
(1%)
|
||||||
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Homebuilding revenues
|
$
|
212,424
|
$
|
339,779
|
(37%)
|
$
|
207,466
|
2%
|
||||||
|
Gross margin %
|
22.1%
|
15.3%
|
6.8%
|
23.5%
|
(1.4%)
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|||||||||
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Gross margin % from home sales (excluding impairments)*
|
23.1%
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20.3%
|
2.8%
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23.6%
|
(0.5%)
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|||||||||
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Gross margin % from home sales (excluding impairments and
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||||||||||||||
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interest amortized to cost of home sales)*
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30.2%
|
26.9%
|
3.3%
|
29.7%
|
0.5%
|
|||||||||
|
Asset impairments
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$
|
2,289
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$
|
10,907
|
(79%)
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$
|
-
|
-
|
||||||
|
Restructuring charges (excluding debt refinance)
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$
|
-
|
$
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1,637
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(100%)
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$
|
-
|
-
|
||||||
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SG&A % from home sales
|
18.1%
|
16.5%
|
1.6%
|
17.6%
|
0.5%
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|||||||||
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SG&A % from home sales (excluding restructuring charges)*
|
18.1%
|
16.1%
|
2.0%
|
17.6%
|
0.5%
|
|||||||||
|
Net new orders
|
428
|
547
|
(22%)
|
555
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(23%)
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|||||||||
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Average active selling communities
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134
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124
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8%
|
131
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2%
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|||||||||
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Monthly sales absorption rate per community
|
1.1
|
1.5
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(27%)
|
1.4
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(21%)
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|||||||||
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Cancellation rate
|
23%
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21%
|
2%
|
19%
|
4%
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|||||||||
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Cancellations from beginning backlog
|
71
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90
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(21%)
|
82
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(13%)
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|||||||||
|
Cancellations from current quarter sales
|
59
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56
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5%
|
50
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18%
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|||||||||
|
Backlog (homes)
|
414
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599
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(31%)
|
605
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(32%)
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|||||||||
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Backlog (dollar value)
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$
|
137,423
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$
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207,887
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(34%)
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$
|
214,237
|
(36%)
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||||||
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Cash flows (uses) from operating activities
|
$
|
(52,463)
|
$
|
109,665
|
(148%)
|
$
|
(67,414)
|
(22%)
|
||||||
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Cash flows (uses) from investing activities
|
$
|
4,999
|
$
|
(6,432)
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(178%)
|
$
|
(35,995)
|
(114%)
|
||||||
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Cash flows (uses) from financing activities
|
$
|
239,507
|
$
|
(37,679)
|
(736%)
|
$
|
(61,447)
|
(490%)
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||||||
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Land purchases (incl. seller financing and excl. JV investments)
|
$
|
33,552
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$
|
35,310
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(5%)
|
$
|
94,672
|
(65%)
|
||||||
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Land sale proceeds
|
$
|
1,757
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$
|
39,273
|
(96%)
|
$
|
940
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87%
|
||||||
|
Adjusted Homebuilding EBITDA*
|
$
|
28,892
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$
|
49,471
|
(42%)
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$
|
29,701
|
(3%)
|
||||||
|
Adjusted Homebuilding EBITDA Margin %*
|
13.6%
|
14.6%
|
(1.0%)
|
14.3%
|
(0.7%)
|
|||||||||
|
Homebuilding interest incurred
|
$
|
28,328
|
$
|
26,566
|
7%
|
$
|
28,070
|
1%
|
||||||
|
Homebuilding interest capitalized to inventories owned
|
$
|
19,425
|
$
|
13,901
|
40%
|
$
|
17,126
|
13%
|
||||||
|
Homebuilding interest capitalized to investments in JVs
|
$
|
1,450
|
$
|
616
|
135%
|
$
|
687
|
111%
|
||||||
|
Interest amortized to cost of sales (incl. cost of land sales)
|
$
|
14,898
|
$
|
27,255
|
(45%)
|
$
|
12,546
|
19%
|
||||||
5
KEY STATISTICS AND FINANCIAL DATA (Continued)1
|
For the Year Ended
|
|||||||||
|
December 31,
|
December 31,
|
Percentage
|
|||||||
|
2010
|
2009
|
or % Change
|
|||||||
|
Operating Data
|
(Dollars in thousands, except average selling price)
|
||||||||
|
Deliveries
|
2,646
|
3,465
|
(24%)
|
||||||
|
Average selling price
|
$
|
343,000
|
$
|
306,000
|
12%
|
||||
|
Homebuilding revenues
|
$
|
912,418
|
$
|
1,166,397
|
(22%)
|
||||
|
Gross margin %
|
22.1%
|
12.2%
|
9.9%
|
||||||
|
Gross margin % from home sales (excluding impairments)*
|
22.4%
|
18.8%
|
3.6%
|
||||||
|
Gross margin % from home sales (excluding impairments and
|
|||||||||
|
interest amortized to cost of home sales)*
|
29.0%
|
25.2%
|
3.8%
|
||||||
|
Asset impairments
|
$
|
2,289
|
$
|
68,591
|
(97%)
|
||||
|
Restructuring charges (excluding debt refinance)
|
$
|
-
|
$
|
22,575
|
(100%)
|
||||
|
SG&A % from home sales
|
16.6%
|
18.1%
|
(1.5%)
|
||||||
|
SG&A % from home sales (excluding restructuring charges)*
|
16.6%
|
16.3%
|
0.3%
|
||||||
|
Net new orders
|
2,461
|
3,343
|
(26%)
|
||||||
|
Average active selling communities
|
130
|
140
|
(7%)
|
||||||
|
Monthly sales absorption rate per community
|
1.6
|
2.0
|
(20%)
|
||||||
|
Cancellation rate
|
18%
|
18%
|
0%
|
||||||
|
Cash flows (uses) from operating activities
|
$
|
(80,958)
|
$
|
419,830
|
(119%)
|
||||
|
Cash flows (uses) from investing activities
|
$
|
(33,455)
|
$
|
(27,301)
|
23%
|
||||
|
Cash flows (uses) from financing activities
|
$
|
250,225
|
$
|
(422,815)
|
(159%)
|
||||
|
Land purchases (incl. seller financing and excl. JV investments)
|
$
|
282,361
|
$
|
64,913
|
335%
|
||||
|
Land sale proceeds
|
$
|
3,596
|
$
|
103,770
|
(97%)
|
||||
|
Adjusted Homebuilding EBITDA*
|
$
|
131,576
|
$
|
116,252
|
13%
|
||||
|
Adjusted Homebuilding EBITDA Margin %*
|
14.4%
|
10.0%
|
4.4%
|
||||||
|
Homebuilding interest incurred
|
$
|
110,358
|
$
|
107,976
|
2%
|
||||
|
Homebuilding interest capitalized to inventories owned
|
$
|
66,665
|
$
|
57,338
|
16%
|
||||
|
Homebuilding interest capitalized to investments in JVs
|
$
|
3,519
|
$
|
3,180
|
11%
|
||||
|
Interest amortized to cost of sales (incl. cost of land sales)
|
$
|
60,565
|
$
|
86,835
|
(30%)
|
||||
|
As of December 31,
|
|||||||||
|
Percentage
|
|||||||||
|
2010
|
2009
|
or % Change
|
|||||||
|
Balance Sheet Data
|
(Dollars in thousands, except per share amounts)
|
||||||||
|
Homebuilding cash (including restricted cash)
|
$
|
748,754
|
$
|
602,222
|
24%
|
||||
|
Inventories owned
|
$
|
1,181,697
|
$
|
986,322
|
20%
|
||||
|
Building sites owned or controlled
|
23,549
|
19,191
|
23%
|
||||||
|
Homes under construction
|
568
|
934
|
(39%)
|
||||||
|
Completed specs
|
512
|
282
|
82%
|
||||||
|
Deferred tax asset valuation allowance
|
$
|
516,366
|
$
|
534,596
|
(3%)
|
||||
|
Homebuilding debt
|
$
|
1,320,254
|
$
|
1,156,726
|
14%
|
||||
|
Joint venture recourse debt
|
$
|
3,865
|
$
|
38,835
|
(90%)
|
||||
|
Stockholders' equity
|
$
|
621,862
|
$
|
435,798
|
43%
|
||||
|
Stockholders' equity per share (including if-converted preferred stock)*
|
$ | 1.83 | $ | 1.75 | 5% | ||||
|
Total debt to book capitalization*
|
68.5%
|
73.4%
|
(4.9%)
|
||||||
|
Adjusted net homebuilding debt to total adjusted book capitalization*
|
47.9% | 56.0% | (8.1%) | ||||||
1All statistical numbers exclude unconsolidated joint ventures and discontinued operations unless noted otherwise.
*Please see “Reconciliation of Non-GAAP Financial Measures” beginning on page 11.
6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
(Dollars in thousands, except per share amounts)
|
|||||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
Homebuilding:
|
|||||||||||||||
|
Home sale revenues
|
$
|
210,424
|
$
|
300,190
|
$
|
908,562
|
$
|
1,060,502
|
|||||||
|
Land sale revenues
|
2,000
|
39,589
|
3,856
|
105,895
|
|||||||||||
|
Total revenues
|
212,424
|
339,779
|
912,418
|
1,166,397
|
|||||||||||
|
Cost of home sales
|
(163,606)
|
(245,847)
|
(707,006)
|
(907,058)
|
|||||||||||
|
Cost of land sales
|
(1,940)
|
(41,939)
|
(3,568)
|
(117,517)
|
|||||||||||
|
Total cost of sales
|
(165,546)
|
(287,786)
|
(710,574)
|
(1,024,575)
|
|||||||||||
|
Gross margin
|
46,878
|
|
51,993
|
201,844
|
|
141,822
|
|||||||||
|
Gross margin %
|
22.1%
|
15.3%
|
22.1%
|
12.2%
|
|||||||||||
|
Selling, general and administrative expenses
|
(38,038)
|
(49,388)
|
(150,542)
|
(191,488)
|
|||||||||||
|
Income (loss) from unconsolidated joint ventures
|
25
|
(268)
|
1,166
|
(4,717)
|
|||||||||||
|
Interest expense
|
(7,453)
|
(12,049)
|
(40,174)
|
(47,458)
|
|||||||||||
|
Loss on early extinguishment of debt
|
(23,839)
|
(3,474)
|
(30,028)
|
(6,931)
|
|||||||||||
|
Other income (expense)
|
(544)
|
(987)
|
3,733
|
(2,296)
|
|||||||||||
|
Homebuilding pretax income (loss)
|
(22,971)
|
(14,173)
|
(14,001)
|
(111,068)
|
|||||||||||
|
Financial Services:
|
|||||||||||||||
|
Revenues
|
2,745
|
3,050
|
12,456
|
13,145
|
|||||||||||
|
Expenses
|
(2,852)
|
(2,808)
|
(10,878)
|
(11,817)
|
|||||||||||
|
Income from unconsolidated joint ventures
|
-
|
-
|
-
|
119
|
|||||||||||
|
Other income
|
31
|
31
|
142
|
139
|
|||||||||||
|
Financial services pretax income (loss)
|
(76)
|
273
|
1,720
|
1,586
|
|||||||||||
|
Loss from continuing operations before income taxes
|
(23,047)
|
(13,900)
|
(12,281)
|
(109,482)
|
|||||||||||
|
Benefit for income taxes
|
1,190
|
96,563
|
557
|
96,265
|
|||||||||||
|
Income (loss) from continuing operations
|
(21,857)
|
82,663
|
(11,724)
|
(13,217)
|
|||||||||||
|
Loss from discontinued operations, net of income taxes
|
-
|
-
|
-
|
(569)
|
|||||||||||
|
Net income (loss)
|
(21,857)
|
82,663
|
(11,724)
|
(13,786)
|
|||||||||||
|
Less: Net (income) loss allocated to preferred shareholder
|
12,388
|
(49,060)
|
6,849
|
8,371
|
|||||||||||
|
Net income (loss) available to common stockholders
|
$
|
(9,469)
|
$
|
33,603
|
$
|
(4,875)
|
$
|
(5,415)
|
|||||||
|
Basic income (loss) per common share:
|
|||||||||||||||
|
Continuing operations
|
$
|
(0.08)
|
$
|
0.33
|
$
|
(0.05)
|
$
|
(0.06)
|
|||||||
|
Discontinued operations
|
-
|
-
|
-
|
-
|
|||||||||||
|
Basic income (loss) per common share
|
$
|
(0.08)
|
$
|
0.33
|
$
|
(0.05)
|
$
|
(0.06)
|
|||||||
|
Diluted income (loss) per common share:
|
|||||||||||||||
|
Continuing operations
|
$
|
(0.08)
|
$
|
0.31
|
$
|
(0.05)
|
$
|
(0.06)
|
|||||||
|
Discontinued operations
|
-
|
-
|
-
|
-
|
|||||||||||
|
Diluted income (loss) per common share
|
$
|
(0.08)
|
$
|
0.31
|
$
|
(0.05)
|
$
|
(0.06)
|
|||||||
|
Weighted average common shares outstanding:
|
|||||||||||||||
|
Basic
|
112,978,508
|
101,239,928
|
105,202,857
|
95,623,851
|
|||||||||||
|
Diluted
|
112,978,508
|
109,348,514
|
105,202,857
|
95,623,851
|
|||||||||||
|
Weighted average additional common shares outstanding
|
|||||||||||||||
|
if preferred shares converted to common shares
|
147,812,786
|
147,812,786
|
147,812,786
|
147,812,786
|
|||||||||||
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Weighted average common shares outstanding:
|
|||||||||||||||
|
Weighted average basic common shares outstanding
|
112,978,508
|
101,239,928
|
105,202,857
|
95,623,851
|
|||||||||||
|
Effect of dilutive securities:
|
|||||||||||||||
|
Stock options
|
-
|
2,656,409
|
-
|
-
|
|||||||||||
|
Convertible debt
|
-
|
5,452,177
|
-
|
-
|
|||||||||||
|
Weighted average diluted common shares outstanding
|
112,978,508
|
109,348,514
|
105,202,857
|
95,623,851
|
|||||||||||
7
REGIONAL OPERATING DATA
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||
|
Homes
|
Avg. Selling
Price
|
Homes
|
Avg. Selling
Price
|
Homes
|
Avg. Selling
Price
|
Homes
|
Avg. Selling
Price
|
|||||||||||||||
|
New homes delivered:
|
||||||||||||||||||||||
|
California
|
276
|
$
|
472,000
|
396
|
$
|
447,000
|
1,102
|
$
|
495,000
|
1,344
|
$
|
434,000
|
||||||||||
|
Arizona
|
42
|
195,000
|
94
|
211,000
|
196
|
202,000
|
303
|
211,000
|
||||||||||||||
|
Texas
|
82
|
294,000
|
91
|
293,000
|
368
|
294,000
|
419
|
282,000
|
||||||||||||||
|
Colorado
|
22
|
293,000
|
34
|
305,000
|
115
|
295,000
|
147
|
305,000
|
||||||||||||||
|
Nevada
|
7
|
203,000
|
2
|
222,000
|
22
|
201,000
|
15
|
225,000
|
||||||||||||||
|
Florida
|
99
|
197,000
|
194
|
192,000
|
446
|
193,000
|
797
|
190,000
|
||||||||||||||
|
Carolinas
|
91
|
225,000
|
132
|
218,000
|
397
|
230,000
|
440
|
218,000
|
||||||||||||||
| Consolidated total |
619
|
340,000
|
943
|
318,000
|
2,646
|
343,000
|
3,465
|
306,000
|
||||||||||||||
|
Unconsolidated joint ventures
|
14
|
458,000
|
20
|
486,000
|
54
|
465,000
|
112
|
517,000
|
||||||||||||||
|
Discontinued operations
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
201,000
|
||||||||||||||
|
Total (including joint ventures)
|
633
|
$
|
343,000
|
963
|
$
|
322,000
|
2,700
|
$
|
346,000
|
3,581
|
$
|
313,000
|
||||||||||
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||
|
Homes
|
Avg. Selling Communities
|
Homes
|
Avg. Selling Communities
|
Homes
|
Avg. Selling Communities
|
Homes
|
Avg. Selling Communities
|
|||||||||||
|
Net new orders:
|
||||||||||||||||||
|
California
|
150
|
46
|
219
|
45
|
974
|
46
|
1,358
|
50
|
||||||||||
|
Arizona
|
40
|
9
|
39
|
6
|
185
|
9
|
274
|
8
|
||||||||||
|
Texas
|
81
|
19
|
63
|
19
|
358
|
17
|
398
|
19
|
||||||||||
|
Colorado
|
14
|
4
|
28
|
6
|
91
|
5
|
123
|
6
|
||||||||||
|
Nevada
|
4
|
1
|
1
|
1
|
30
|
1
|
11
|
2
|
||||||||||
|
Florida
|
79
|
29
|
111
|
24
|
435
|
26
|
728
|
31
|
||||||||||
|
Carolinas
|
60
|
26
|
86
|
23
|
388
|
26
|
451
|
24
|
||||||||||
| Consolidated total |
428
|
134
|
547
|
124
|
2,461
|
130
|
3,343
|
140
|
||||||||||
|
Unconsolidated joint ventures
|
12
|
3
|
7
|
4
|
50
|
3
|
174
|
7
|
||||||||||
|
Discontinued operations
|
-
|
-
|
-
|
-
|
-
|
-
|
3
|
-
|
||||||||||
|
Total (including joint ventures)
|
440
|
137
|
554
|
128
|
2,511
|
133
|
3,520
|
147
|
||||||||||
|
At December 31,
|
||||||||||||||
|
2010
|
2009
|
|||||||||||||
|
Backlog ($ in thousands):
|
Homes
|
Value
|
Homes
|
Value
|
||||||||||
|
California
|
119
|
$
|
60,440
|
247
|
$
|
117,536
|
||||||||
|
Arizona
|
36
|
7,988
|
47
|
9,686
|
||||||||||
|
Texas
|
99
|
30,456
|
109
|
33,708
|
||||||||||
|
Colorado
|
30
|
9,313
|
54
|
15,587
|
||||||||||
|
Nevada
|
8
|
1,628
|
-
|
-
|
||||||||||
|
Florida
|
67
|
14,225
|
78
|
15,033
|
||||||||||
|
Carolinas
|
55
|
13,373
|
64
|
16,337
|
||||||||||
|
Consolidated total
|
414
|
137,423
|
599
|
207,887
|
||||||||||
|
Unconsolidated joint ventures
|
5
|
2,109
|
9
|
4,601
|
||||||||||
|
Total (including joint ventures)
|
419
|
$
|
139,532
|
608
|
$
|
212,488
|
||||||||
|
At December 31,
|
|||||||
|
2010
|
2009
|
||||||
|
Building sites owned or controlled:
|
|||||||
|
California
|
9,505
|
7,685
|
|||||
|
Arizona
|
1,940
|
1,831
|
|||||
|
Texas
|
2,419
|
1,715
|
|||||
|
Colorado
|
370
|
255
|
|||||
|
Nevada
|
1,196
|
1,218
|
|||||
|
Florida
|
5,632
|
4,678
|
|||||
|
Carolinas
|
2,487
|
1,809
|
|||||
|
Total (including joint ventures)
|
23,549
|
19,191
|
|||||
|
Building sites owned
|
17,650
|
15,827
|
|||||
|
Building sites optioned or subject to contract
|
4,451
|
2,361
|
|||||
|
Joint venture lots
|
1,448
|
1,003
|
|||||
|
Total (including joint ventures)
|
23,549
|
19,191
|
|||||
|
Building sites owned:
|
|||||||
|
Raw lots
|
5,266
|
4,875
|
|||||
|
Lots under development
|
3,680
|
2,298
|
|||||
|
Finished lots
|
7,218
|
7,030
|
|||||
|
Under construction or completed homes
|
1,486
|
1,624
|
|||||
|
Total
|
17,650
|
15,827
|
|||||
8
CONDENSED CONSOLIDATED BALANCE SHEETS
|
December 31,
|
||||||||||
|
2010
|
2009
|
|||||||||
|
(Dollars in thousands)
|
||||||||||
|
ASSETS
|
(Unaudited)
|
|||||||||
|
Homebuilding:
|
||||||||||
|
Cash and equivalents
|
$
|
720,516
|
$
|
587,152
|
||||||
|
Restricted cash
|
28,238
|
15,070
|
||||||||
|
Trade and other receivables
|
6,167
|
12,676
|
||||||||
|
Inventories:
|
||||||||||
|
Owned
|
1,181,697
|
986,322
|
||||||||
|
Not owned
|
18,999
|
11,770
|
||||||||
|
Investments in unconsolidated joint ventures
|
73,861
|
40,415
|
||||||||
|
Deferred income taxes, net
|
9,269
|
9,431
|
||||||||
|
Other assets
|
38,175
|
131,086
|
||||||||
|
2,076,922
|
1,793,922
|
|||||||||
|
Financial Services:
|
||||||||||
|
Cash and equivalents
|
10,855
|
8,407
|
||||||||
|
Restricted cash
|
2,870
|
3,195
|
||||||||
|
Mortgage loans held for sale, net
|
30,279
|
41,048
|
||||||||
|
Mortgage loans held for investment, net
|
9,904
|
10,818
|
||||||||
|
Other assets
|
2,293
|
3,621
|
||||||||
|
56,201
|
67,089
|
|||||||||
|
Total Assets
|
$
|
2,133,123
|
$
|
1,861,011
|
||||||
|
LIABILITIES AND EQUITY
|
||||||||||
|
Homebuilding:
|
||||||||||
|
Accounts payable
|
$
|
16,716
|
$
|
22,702
|
||||||
|
Accrued liabilities
|
143,127
|
199,848
|
||||||||
|
Secured project debt and other notes payable
|
4,738
|
59,531
|
||||||||
|
Senior notes payable
|
1,272,977
|
993,018
|
||||||||
|
Senior subordinated notes payable
|
42,539
|
104,177
|
||||||||
|
1,480,097
|
1,379,276
|
|||||||||
|
Financial Services:
|
||||||||||
|
Accounts payable and other liabilities
|
820
|
1,436
|
||||||||
|
Mortgage credit facilities
|
30,344
|
40,995
|
||||||||
|
31,164
|
42,431
|
|||||||||
|
Total Liabilities
|
1,511,261
|
1,421,707
|
||||||||
|
Equity:
|
||||||||||
|
Stockholders' Equity:
|
||||||||||
|
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares
|
||||||||||
|
issued and outstanding at December 31, 2010 and 2009, respectively
|
5
|
5
|
||||||||
|
Common stock, $0.01 par value; 600,000,000 shares authorized; 196,641,551
|
||||||||||
|
and 105,293,180 shares issued and outstanding at December 31, 2010
|
||||||||||
|
and 2009, respectively
|
1,966
|
1,053
|
||||||||
|
Additional paid-in capital
|
1,227,292
|
1,030,664
|
||||||||
|
Accumulated deficit
|
(592,352)
|
(580,628)
|
||||||||
|
Accumulated other comprehensive loss, net of tax
|
(15,049)
|
(15,296)
|
||||||||
|
Total Stockholders' Equity
|
621,862
|
435,798
|
||||||||
|
Noncontrolling Interests
|
-
|
3,506
|
||||||||
|
Total Equity
|
621,862
|
439,304
|
||||||||
|
Total Liabilities and Equity
|
$
|
2,133,123
|
$
|
1,861,011
|
||||||
| December 31, | ||||||
|
2010
|
2009
|
|||||
|
(Dollars in thousands)
|
||||||
|
Inventories Owned:
|
(Unaudited)
|
|||||
|
Land and land under development
|
$ | 801,681 | $ | 564,516 | ||
|
Homes completed and under construction
|
281,780 | 316,323 | ||||
|
Model homes
|
98,236 | 105,483 | ||||
|
Total inventories owned
|
$ | 1,181,697 | $ | 986,322 | ||
|
Inventories Owned by Segment:
|
||||||
|
California
|
$ | 727,316 | $ | 618,336 | ||
|
Southwest
|
222,792 | 196,279 | ||||
|
Southeast
|
231,589 | 171,707 | ||||
|
Total inventories owned
|
$ | 1,181,697 | $ | 986,322 | ||
9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Cash Flows From Operating Activities:
|
||||||||||||||||
|
Income (loss) from continuing operations
|
$
|
(21,857)
|
$
|
82,663
|
$
|
(11,724)
|
$
|
(13,217)
|
||||||||
|
Income (loss) from discontinued operations, net of income taxes
|
-
|
-
|
-
|
(569)
|
||||||||||||
|
Adjustments to reconcile net income (loss) to net cash
|
||||||||||||||||
|
provided by (used in) operating activities:
|
||||||||||||||||
|
(Gain) loss on early extinguishment of debt
|
23,839
|
3,474
|
30,028
|
6,931
|
||||||||||||
|
Amortization of stock-based compensation
|
3,250
|
5,605
|
11,848
|
12,864
|
||||||||||||
|
Deferred income taxes
|
(9,824)
|
(7,775)
|
9,272
|
(45,133)
|
||||||||||||
|
Deferred tax asset valuation allowance
|
8,634
|
(88,787)
|
(9,829)
|
(51,429)
|
||||||||||||
|
Inventory impairment charges and deposit write-offs
|
1,918
|
11,192
|
1,918
|
62,940
|
||||||||||||
|
Other operating activities
|
816
|
5,176
|
1,772
|
13,893
|
||||||||||||
|
Changes in cash and equivalents due to:
|
||||||||||||||||
|
Trade and other receivables
|
7,524
|
4,976
|
6,541
|
8,440
|
||||||||||||
|
Mortgage loans held for sale
|
6,319
|
1,702
|
12,165
|
24,718
|
||||||||||||
|
Inventories - owned
|
(28,286)
|
84,537
|
(148,706)
|
326,062
|
||||||||||||
|
Inventories - not owned
|
(3,791)
|
(1,343)
|
(27,861)
|
(2,805)
|
||||||||||||
|
Other assets
|
2,650
|
1,587
|
111,496
|
118,265
|
||||||||||||
|
Accounts payable
|
(16)
|
(965)
|
(6,592)
|
(18,554)
|
||||||||||||
|
Accrued liabilities
|
(43,639)
|
7,623
|
(61,286)
|
(22,576)
|
||||||||||||
|
Net cash provided by (used in) operating activities
|
(52,463)
|
109,665
|
(80,958)
|
419,830
|
||||||||||||
|
Cash Flows From Investing Activities:
|
||||||||||||||||
|
Net cash provided by (used in) investing activities
|
4,999
|
(6,432)
|
(33,455)
|
(27,301)
|
||||||||||||
|
Cash Flows From Financing Activities:
|
||||||||||||||||
|
Change in restricted cash
|
(11,255)
|
267,322
|
(12,843)
|
(9,748)
|
||||||||||||
|
Net proceeds from (payments on) revolving credit facility
|
-
|
-
|
-
|
(47,500)
|
||||||||||||
|
Principal payments on secured project debt and other notes payable
|
(155)
|
(37,892)
|
(83,562)
|
(125,984)
|
||||||||||||
|
Principal payments on senior and senior subordinated notes payable
|
(596,520)
|
(261,092)
|
(792,389)
|
(466,689)
|
||||||||||||
|
Proceeds from the issuance of senior notes payable
|
677,804
|
-
|
977,804
|
257,592
|
||||||||||||
|
Payment of debt issuance costs
|
(11,709)
|
(8,764)
|
(17,215)
|
(8,764)
|
||||||||||||
|
Net proceeds from common stock issuance
|
186,443
|
-
|
186,443
|
-
|
||||||||||||
|
Other financing activities
|
(5,101)
|
2,747
|
(8,013)
|
(21,722)
|
||||||||||||
|
Net cash provided by (used in) financing activities
|
239,507
|
(37,679)
|
250,225
|
(422,815)
|
||||||||||||
|
Net increase (decrease) in cash and equivalents
|
192,043
|
65,554
|
135,812
|
(30,286)
|
||||||||||||
|
Cash and equivalents at beginning of period
|
539,328
|
530,005
|
595,559
|
625,845
|
||||||||||||
|
Cash and equivalents at end of period
|
$
|
731,371
|
$
|
595,559
|
$
|
731,371
|
$
|
595,559
|
||||||||
|
Cash and equivalents at end of period
|
$
|
731,371
|
$
|
595,559
|
$
|
731,371
|
$
|
595,559
|
||||||||
|
Homebuilding restricted cash at end of period
|
28,238
|
15,070
|
28,238
|
15,070
|
||||||||||||
|
Financial services restricted cash at end of period
|
2,870
|
3,195
|
2,870
|
3,195
|
||||||||||||
|
Cash and equivalents and restricted cash at end of period
|
$
|
762,479
|
$
|
613,824
|
$
|
762,479
|
$
|
613,824
|
||||||||
10
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently. Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.
The table set forth below reconciles the Company's net loss to net income excluding asset impairment charges (net of a 38% income tax benefit), loss on early extinguishment of debt (net of a 38% income tax benefit), and the deferred tax asset valuation allowance related to these charges. We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group. Net income excluding asset impairment charges (net of income tax benefit), loss on early extinguishment of debt (net of income tax benefit), and the deferred tax asset valuation allowance related to these charges for the three months and year ended December 31, 2010 is calculated as follows:
|
Three Months Ended
|
Year Ended
|
||||
|
December 31, 2010
|
December 31, 2010
|
||||
|
(Dollars in thousands, except per share amounts)
|
|||||
|
Net loss
|
$
|
(21,857)
|
$
|
(11,724)
|
|
|
Add: Asset impairment charges, net of income tax benefit
|
1,419
|
1,419
|
|||
|
Add: Loss on early extinguishment of debt, net of income tax benefit
|
14,780
|
18,617
|
|||
|
Add: Net deferred tax asset valuation allowance
|
9,929
|
12,281
|
|||
|
Net income, as adjusted
|
|
4,271
|
|
20,593
|
|
|
Less: Adjusted net income allocated to preferred shareholder
|
(2,421)
|
(12,031)
|
|||
|
Adjusted net income available to common stockholders
|
$
|
1,850
|
$
|
8,562
|
|
|
Diluted earnings per common share
|
$
|
0.02
|
$
|
0.08
|
|
|
Weighted average diluted common shares outstanding
|
116,454,046
|
108,988,769
|
|||
The table set forth below reconciles the Company's homebuilding gross margin percentage to the gross margin percentage from home sales, excluding housing inventory impairment charges and interest amortized to cost of home sales. We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group.
|
Three Months Ended
|
||||||||||||||
|
December 31,
2010
|
Gross
Margin %
|
December 31,
2009
|
Gross
Margin %
|
September 30,
2010
|
Gross
Margin %
|
|||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Homebuilding gross margin
|
$
|
46,878
|
22.1%
|
$
|
51,993
|
15.3%
|
$
|
48,835
|
23.5%
|
|||||
|
Less: Land sale revenues
|
(2,000)
|
(39,589)
|
(950)
|
|||||||||||
|
Add: Cost of land sales
|
1,940
|
41,939
|
954
|
|||||||||||
|
Gross margin from home sales
|
46,818
|
22.2%
|
54,343
|
18.1%
|
48,839
|
23.6%
|
||||||||
|
Add: Housing inventory impairment charges
|
1,818
|
6,601
|
-
|
|||||||||||
|
Gross margin from home sales, excluding
|
||||||||||||||
|
impairment charges
|
48,636
|
23.1%
|
60,944
|
20.3%
|
48,839
|
23.6%
|
||||||||
|
Add: Capitalized interest included in cost
|
||||||||||||||
|
of home sales
|
14,898
|
7.1%
|
19,769
|
6.6%
|
12,546
|
6.1%
|
||||||||
|
Gross margin from home sales, excluding
|
||||||||||||||
|
impairment charges and interest amortized
|
||||||||||||||
|
to cost of home sales
|
$
|
63,534
|
30.2%
|
$
|
80,713
|
26.9%
|
$
|
61,385
|
29.7%
|
|||||
|
Year Ended December 31,
|
|||||||||
|
2010
|
Gross
Margin %
|
2009
|
Gross
Margin %
|
||||||
|
(Dollars in thousands)
|
|||||||||
|
Homebuilding gross margin
|
$
|
201,844
|
22.1%
|
$
|
141,822
|
12.2%
|
|||
|
Less: Land sale revenues
|
(3,856)
|
(105,895)
|
|||||||
|
Add: Cost of land sales
|
3,568
|
117,517
|
|||||||
|
Gross margin from home sales
|
201,556
|
22.2%
|
153,444
|
14.5%
|
|||||
|
Add: Housing inventory impairment charges
|
1,818
|
46,063
|
|||||||
|
Gross margin from home sales, excluding impairment charges
|
203,374 | 22.4% | 199,507 | 18.8% | |||||
|
Add: Capitalized interest included in cost of home sales
|
59,750 | 6.6% | 67,522 | 6.4% | |||||
|
Gross margin from home sales, excluding impairment charges
|
|||||||||
|
and interest amortized to cost of home sales
|
$
|
263,124
|
29.0%
|
$
|
267,029
|
25.2%
|
|||
11
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
The table set forth below reconciles the Company’s SG&A expenses to SG&A expenses excluding restructuring charges. We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding these charges.
|
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||
|
December 31,
2010
|
December 31,
2009
|
September 30,
2010
|
2010
|
2009
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Selling, general and administrative expenses
|
$
|
38,038
|
$
|
49,388
|
$
|
36,339
|
$
|
150,542
|
$
|
191,488
|
||||
|
Less: Restructuring charges
|
-
|
(980)
|
-
|
-
|
(19,125)
|
|||||||||
|
Selling, general and administrative expenses, excluding restructuring charges
|
$
|
38,038
|
$
|
48,408
|
$
|
36,339
|
$
|
150,542
|
$
|
172,363
|
||||
|
SG&A % from home sales, excluding restructuring charges
|
18.1%
|
16.1%
|
17.6%
|
16.6%
|
16.3%
|
|||||||||
The table set forth below reconciles the Company’s cash flows from operations to cash flows from operations excluding land purchases, proceeds from land sales, payments made to extinguish swap arrangements related to early extinguishment of debt and accelerated interest payments related to debt restructure. We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases, land sales and debt restructuring activities.
|
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||
|
December 31,
2010
|
December 31,
2009
|
September 30,
2010
|
2010
|
2009
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Cash flows from (used in) operations
|
$
|
(52,463)
|
$
|
109,665
|
$
|
(67,414)
|
$
|
(80,958)
|
$
|
419,830
|
||||
|
Add: Cash land purchases
|
33,552
|
35,256
|
91,272
|
255,046
|
64,804
|
|||||||||
|
Less: Land sale proceeds
|
(1,757)
|
(39,273)
|
(940)
|
(3,596)
|
(103,770)
|
|||||||||
|
Add: Swap unwind payments related to debt restructure
|
24,545
|
-
|
-
|
24,545
|
3,733
|
|||||||||
|
Add: Accelerated interest payments related to debt restructure
|
6,541
|
4,625
|
-
|
6,541
|
4,625
|
|||||||||
|
Cash flows from operations (excluding land purchases,
|
||||||||||||||
|
land sales and debt restructuring payments)
|
$
|
10,418
|
$
|
110,273
|
$
|
22,918
|
$
|
201,578
|
$
|
389,222
|
||||
The table set forth below reconciles the Company’s total consolidated debt to adjusted net homebuilding debt and provides the Company’s total debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios. We believe that the adjusted net homebuilding debt to total adjusted book capitalization ratio is useful to management and investors as a measure of the Company’s ability to obtain financing. For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders’ equity. Adjusted net homebuilding debt excludes indebtedness included in liabilities from inventories not owned, indebtedness of the Company’s financial services subsidiary and additionally reflects the offset of cash and equivalents.
|
As of December 31,
|
|||||||
|
2010
|
2009
|
||||||
|
(Dollars in thousands)
|
|||||||
|
Total consolidated debt
|
$
|
1,350,598
|
$
|
1,199,621
|
|||
|
Less:
|
|||||||
|
Indebtedness included in liabilities from inventories not owned
|
-
|
(1,900)
|
|||||
|
Financial services indebtedness
|
(30,344)
|
(40,995)
|
|||||
|
Homebuilding cash
|
(748,754)
|
(602,222)
|
|||||
|
Adjusted net homebuilding debt
|
571,500
|
554,504
|
|||||
|
Stockholders' equity
|
621,862
|
435,798
|
|||||
|
Total adjusted book capitalization
|
$
|
1,193,362
|
$
|
990,302
|
|||
|
Total debt to book capitalization
|
68.5%
|
73.4%
|
|||||
|
Adjusted net homebuilding debt to total adjusted book capitalization ratio
|
47.9%
|
56.0%
|
|||||
The table set forth below calculates pro forma stockholders’ equity per common share. The pro forma common shares outstanding include the if-converted Series B Preferred Stock, and excludes 3.9 million shares issued under a share lending agreement related to the Company’s 6% Convertible Senior Subordinated Notes. The Company believes that the pro forma stockholders’ equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect of the issuance of preferred shares assuming full conversion to common stock and excluding shares outstanding under the share lending agreement.
|
As of December 31,
|
|||||
|
2010
|
2009
|
||||
|
Actual common shares outstanding
|
196,641,551
|
105,293,180
|
|||
|
Add: Conversion of preferred shares to common shares
|
147,812,786
|
147,812,786
|
|||
|
Less: Common shares outstanding under share lending facility
|
(3,919,904)
|
(3,919,904)
|
|||
|
Pro forma common shares outstanding
|
340,534,433
|
249,186,062
|
|||
|
Stockholders' equity (actual amounts rounded to nearest thousand)
|
$
|
621,862,000
|
$
|
435,798,000
|
|
|
Divided by pro forma common shares outstanding
|
÷
|
340,534,433
|
÷
|
249,186,062
|
|
|
Pro forma stockholders' equity per common share
|
$
|
1.83
|
$
|
1.75
|
|
12
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA. Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary. Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently. We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company’s ability to service debt and obtain financing. Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.
|
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||||
|
December 31,
2010
|
December 31,
2009
|
September 30,
2010
|
2010
|
2009
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
|
Net income (loss)
|
$
|
(21,857)
|
$
|
82,663
|
$
|
4,543
|
$
|
(11,724)
|
$
|
(13,786)
|
||||||
|
Provision (benefit) for income taxes
|
(1,190)
|
(96,563)
|
272
|
(557)
|
(96,563)
|
|||||||||||
|
Homebuilding interest amortized to cost of sales and interest expense
|
22,351
|
39,304
|
22,803
|
100,739
|
134,293
|
|||||||||||
|
Homebuilding depreciation and amortization
|
499
|
632
|
479
|
2,068
|
2,839
|
|||||||||||
|
Amortization of stock-based compensation
|
3,250
|
5,605
|
3,115
|
11,848
|
12,864
|
|||||||||||
|
EBITDA
|
3,053
|
31,641
|
31,212
|
102,374
|
39,647
|
|||||||||||
|
Add:
|
||||||||||||||||
|
Cash distributions of income from unconsolidated joint ventures
|
-
|
3,139
|
-
|
-
|
3,465
|
|||||||||||
|
Impairment charges and deposit write-offs
|
1,918
|
11,192
|
-
|
1,918
|
62,940
|
|||||||||||
|
(Gain) loss on early extinguishment of debt
|
23,839
|
3,474
|
999
|
30,028
|
6,931
|
|||||||||||
|
Less:
|
||||||||||||||||
|
Income (loss) from unconsolidated joint ventures
|
25
|
(267)
|
1,801
|
1,166
|
(4,597)
|
|||||||||||
|
Income (loss) from financial services subsidiary
|
(107)
|
242
|
709
|
1,578
|
1,328
|
|||||||||||
|
Adjusted Homebuilding EBITDA
|
$
|
28,892
|
$
|
49,471
|
$
|
29,701
|
$
|
131,576
|
$
|
116,252
|
||||||
|
Homebuilding revenues
|
$
|
212,424
|
$
|
339,779
|
$
|
207,466
|
$
|
912,418
|
$
|
1,166,397
|
||||||
|
Adjusted Homebuilding EBITDA Margin %
|
13.6%
|
14.6%
|
14.3%
|
14.4%
|
10.0%
|
|||||||||||
The table set forth below reconciles net cash provided by (used in) operating activities, from continuing and discontinued operations, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:
|
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||||
|
December 31,
2010
|
December 31,
2009
|
September 30,
2010
|
2010
|
2009
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$
|
(52,463)
|
$
|
109,665
|
$
|
(67,414)
|
$
|
(80,958)
|
$
|
419,830
|
||||||
|
Add:
|
||||||||||||||||
|
Provision (benefit) for income taxes
|
(1,190)
|
(96,563)
|
272
|
(557)
|
(96,563)
|
|||||||||||
|
Deferred tax asset valuation allowance
|
(8,634)
|
88,787
|
6,908
|
9,829
|
51,429
|
|||||||||||
|
Homebuilding interest amortized to cost of sales and interest expense
|
22,351
|
39,304
|
22,803
|
100,739
|
134,293
|
|||||||||||
|
Excess tax benefits from share-based payment arrangements
|
-
|
297
|
-
|
27
|
297
|
|||||||||||
|
Less:
|
||||||||||||||||
|
Income (loss) from financial services subsidiary
|
(107)
|
242
|
709
|
1,578
|
1,328
|
|||||||||||
|
Depreciation and amortization from financial services subsidiary
|
344
|
163
|
280
|
934
|
678
|
|||||||||||
|
(Gain) loss on disposal of property and equipment
|
(2)
|
1,272
|
1
|
(37)
|
2,611
|
|||||||||||
|
Net changes in operating assets and liabilities:
|
||||||||||||||||
|
Trade and other receivables
|
(7,524)
|
(4,976)
|
(579)
|
(6,541)
|
(8,440)
|
|||||||||||
|
Mortgage loans held for sale
|
(6,319)
|
(1,702)
|
(31,621)
|
(12,165)
|
(24,718)
|
|||||||||||
|
Inventories-owned
|
28,286
|
(84,537)
|
83,309
|
148,706
|
(326,062)
|
|||||||||||
|
Inventories-not owned
|
3,791
|
1,343
|
6,520
|
27,861
|
2,805
|
|||||||||||
|
Deferred income taxes
|
9,824
|
7,775
|
(7,180)
|
(9,272)
|
45,133
|
|||||||||||
|
Other assets
|
(2,650)
|
(1,587)
|
596
|
(111,496)
|
(118,265)
|
|||||||||||
|
Accounts payable
|
16
|
965
|
9,154
|
6,592
|
18,554
|
|||||||||||
|
Accrued liabilities
|
43,639
|
(7,623)
|
7,923
|
61,286
|
22,576
|
|||||||||||
|
Adjusted Homebuilding EBITDA
|
$
|
28,892
|
$
|
49,471
|
$
|
29,701
|
$
|
131,576
|
$
|
116,252
|
||||||
13