Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CalAtlantic Group, Inc. | form8-k.htm |
Exhibit 99.1
News Release
Standard Pacific Corp. Reports 2011 Fourth Quarter and Full Year Results
Q4 2011 Net Income of $15.3 million, or $0.04 per diluted share
Q4 2011 Net New Orders up 44% vs. Q4 2010
IRVINE, CALIFORNIA, February 6, 2012. Standard Pacific Corp. (NYSE: SPF) announced results for the fourth quarter and year ended December 31, 2011.
2011 Fourth Quarter Highlights and Comparisons to the 2010 Fourth Quarter
|
·
|
Net income of $15.3 million, or $0.04 per diluted share, vs. net loss of $21.9 million, or $0.08 per diluted share
|
|
·
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Net new orders of 615, up 44%
|
|
·
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Backlog of 681 homes, up 64%
|
|
o
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Highest year-end backlog since 2007
|
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·
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160 average active selling communities (16 new/8 closed out), up 19%
|
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·
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Homebuilding revenues up 38%
|
|
o
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Average selling price of $374 thousand, up 10%
|
|
o
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782 new home deliveries, up 26%
|
|
·
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Gross margin from home sales of 20.4%, compared to 22.2%
|
|
·
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SG&A rate from home sales of 15.2%, a 290 basis point improvement
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|
·
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Operating cash outflows of $12.0 million, a $40.5 million improvement from $52.5 million
|
|
o
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Excluding land purchases, development costs and debt restructuring payments, cash inflows of $74.3 million* vs. $38.5 million*
|
|
·
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Adjusted Homebuilding EBITDA of $42.8 million*, or 14.6%* of homebuilding revenues
|
2011 Fiscal Year Highlights and Comparisons to Fiscal Year 2010
|
·
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Net loss of $16.4 million, or $0.05 per diluted share, vs. net loss of $11.7 million, or $0.05 per diluted share
|
|
·
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Net new orders of 2,795, up 14%
|
|
·
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Homebuilding revenues of $883.0 million, down 3.2% from $912.4 million
|
|
o
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Average selling price of $349 thousand, up 2%
|
|
o
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2,528 new home deliveries, down 4% from 2,646 homes
|
|
·
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Gross margin from home sales of 18.4%, compared to 22.2%
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·
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SG&A rate from home sales of 17.5%, compared to 16.6%
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|
·
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Operating cash outflows of $322.6 million vs. $81.0 million
|
|
o
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Excluding land purchases, development costs and debt restructuring payments, cash inflows of $114.5 million* vs. $285.9 million*
|
|
·
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Adjusted Homebuilding EBITDA of $105.9 million*, or 12.0%* of homebuilding revenues
|
Scott Stowell, the Company’s Chief Executive Officer and President commented, “I am pleased with the results for the quarter. Our strategic focus on growing community count in the move-up segment, our continued dedication to quality home design, and our commitment to creating a superior customer experience have all contributed to our solid 4th quarter results.” Mr. Stowell added, “While we believe the homebuilding industry will face ongoing headwinds throughout 2012, I am confident that with our focus on execution at every level of our organization we will continue to drive improved profitability despite these challenging market conditions.”
For the fourth quarter of 2011, the Company reported net income of $15.3 million, or $0.04 per diluted share, compared to a net loss of $21.9 million, or $0.08 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 $2.4 million of asset impairment charges and deposit write-offs.
For fiscal year 2011, the Company reported a net loss of $16.4 million, or $0.05 per diluted share, compared to a net loss of $11.7 million, or $0.05 per diluted share, for the full year 2010. The Company’s adjusted net income for fiscal year 2011 was $3.2 million*, or $0.01* per diluted share, excluding $15.3 million of inventory impairment charges and deposit write-offs and $4.2 million of restructuring, severance and other charges related to management changes. Fiscal year 2010 included $30.0 million of debt refinance charges and $2.4 million of asset impairment charges and deposit write-offs.
Homebuilding revenues increased 38% from $212.4 million for the 2010 fourth quarter to $293.2 million for the 2011 fourth quarter driven primarily by a 26% increase in new home deliveries to 782 homes. The Company’s consolidated average home price for the 2011 fourth quarter was $374 thousand, which was up 10% over the prior year. The increase in the Company’s average selling price was largely due to an increase in deliveries of luxury homes in Southern California during the 2011 fourth quarter, which includes the delivery of two homes with an average selling price of approximately $6 million from one of the Company’s Southern California coastal communities.
Gross margin from home sales for the 2011 fourth quarter was 20.4% versus 22.2% for the prior year. The 2011 fourth quarter gross margin from home sales included a $2.9 million benefit related to a reduction in the Company’s warranty accrual, compared to a $2.0 million benefit recorded in the prior year quarter. Excluding warranty accrual adjustments and $1.8 million of inventory impairment charges recorded during the prior year quarter, the adjusted gross margin from home sales for the 2011 fourth quarter was 19.4%*, versus 22.2%* for the prior year. The 280 basis point decline in the Company’s adjusted gross margin from home sales was driven primarily by lower margins in a majority of the Company’s markets due to a mix shift to more deliveries from lower margin projects and a reduction in the percentage of California deliveries as compared to the prior year. Excluding warranty accrual adjustments, inventory impairments and previously capitalized interest costs, gross margin from home sales was 27.5%* for the 2011 fourth quarter versus 29.2%* for the 2010 fourth quarter.
The Company’s 2011 fourth quarter SG&A expenses (including Corporate G&A) were $44.5 million and included noncash stock-based compensation expenses of $3.1 million and restructuring charges of $0.9 million, primarily related to employee severance costs. The Company’s 2011 fourth quarter SG&A rate from home sales was 15.2% (14.9%* excluding restructuring charges) versus 18.1% for the 2010 fourth quarter. The improvement in the Company’s SG&A rate was primarily due to the operating leverage inherent in our business resulting from a 39% increase in revenues from home sales. The Company’s G&A expenses (excluding incentive compensation and restructuring charges) were $23.2 million for the 2011 fourth quarter, compared to $22.8 million for the 2010 fourth quarter and 2011 third quarter. The increase in the Company’s 2011 fourth quarter G&A expenses was due to an increase in insurance expense, which is primarily a variable expense based on revenues.
Net new orders (excluding joint ventures) for the 2011 fourth quarter increased 44% from the 2010 fourth quarter to 615 homes on a 19% increase in the number of average active selling communities from 134 to 160. The Company’s monthly sales absorption rate for the 2011 fourth quarter was 1.3 per community, compared to 1.1 per community for the 2010 fourth quarter and 1.6 per community for the 2011 third quarter. The Company’s cancellation rate for the 2011 fourth quarter was 19%, compared to 23% for the 2010 fourth quarter and 16% for the 2011 third quarter. The total number of sales cancellations for the 2011 fourth quarter was 141, of which 88 cancellations related to homes in the Company’s 2011 fourth quarter beginning backlog and 53 related to orders generated during the quarter.
The dollar value of homes in backlog (excluding joint ventures) increased 69% to $232.6 million, or 681 homes, compared to $137.4 million, or 414 homes, for the 2010 fourth quarter, and decreased 24% compared
2
to $304.8 million, or 848 homes, for the 2011 third quarter. The increase in year over year backlog value was driven primarily by a 44% increase in net new orders as compared to the prior period.
The Company used $12.0 million of cash in operating activities for the 2011 fourth quarter versus $52.5 million in the 2010 fourth quarter. Cash flows used in operating activities for the 2011 fourth quarter included $49.8 million of cash land purchases and $36.6 million of land development costs, compared to $33.6 million and $26.3 million, respectively, for the 2010 fourth quarter. The 2010 fourth quarter also included $31.1 million of cash used in operations related to debt restructuring activities. Excluding land purchases, development costs and debt restructuring payments incurred in the 2010 fourth quarter, cash inflows from operating activities for the 2011 fourth quarter were $74.3 million* versus $38.5 million* in the 2010 fourth quarter. The year over year increase in cash inflows from operating activities (excluding land purchases, development costs and debt restructuring payments) was primarily due to a 26% increase in deliveries compared to the prior year period.
The Company purchased $49.8 million of land (684 lots) during the 2011 fourth quarter. Approximately 41% of land purchases (based on land value) were located in California and 29% in Texas, with the balance spread throughout the Company’s other operations. For the year ended December 31, 2011, the Company purchased $303.8 million of land (4,895 lots), of which approximately 57% (based on land value) is located in California and 18% in Texas, with the balance spread throughout the Company’s other operations. As of December 31, 2011, the Company owned or controlled 26,444 lots, of which 13,584 owned lots are actively selling or under development. The lots owned that are actively selling or under development represent a 5.4 year supply based on the Company’s deliveries for the year ended December 31, 2011.
Earnings Conference Call
A conference call to discuss the Company’s 2011 fourth quarter results will be held at 11:00 a.m. Eastern time February 7, 2012. The call will be broadcast live over the Internet and can be accessed through the Company’s website at http://ir.standardpacifichomes.com. The call will also be accessible via telephone by dialing (888) 708-5705 (domestic) or (913) 312-1448 (international); Passcode: 6675438. 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: 6675438.
About Standard Pacific
Standard Pacific, one of the nation’s largest homebuilders, has built more than 115,000 homes during its 46-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, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; strategy; community count growth; product mix; the quality of our homes and customer experience; our focus on, and ability to execute, our strategy; 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, 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
3
with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 and subsequent Quarterly Reports on Form 10-Q. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements. The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
Contact:
Jeff McCall, EVP & CFO (949) 789-1655, jmccall@stanpac.com
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*Please see “Reconciliation of Non-GAAP Financial Measures” beginning on page 12.
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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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||||||||||||||
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December 31,
|
December 31,
|
Percentage
|
September 30,
|
Percentage
|
||||||||||
|
2011
|
2010
|
or % Change
|
2011
|
or % Change
|
||||||||||
|
Operating Data
|
(Dollars in thousands)
|
|||||||||||||
|
Deliveries
|
782
|
619
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26%
|
697
|
12%
|
|||||||||
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Average selling price
|
$
|
374
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$
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340
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10%
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$
|
346
|
8%
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||||||
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Home sale revenues
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$
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292,725
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$
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210,424
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39%
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$
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241,434
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21%
|
||||||
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Gross margin %
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20.4%
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22.1%
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(1.7%)
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15.8%
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4.6%
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|||||||||
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Gross margin % from home sales (excluding impairments and
|
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|||||||||||||
| warranty accrual adjustments)* | 19.4% | 22.2% | (2.8%) | 18.8% | 0.6% | |||||||||
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Gross margin % from home sales (excluding impairments, warranty
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||||||||||||||
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accrual adjustments and interest amortized to cost of home sales)*
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27.5%
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29.2%
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(1.7%)
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26.6%
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0.9%
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|||||||||
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Inventory impairments and deposit write-offs
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$
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416
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$
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2,389
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(83%)
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$
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8,959
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(95%)
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||||||
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Severance and other charges
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$
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875
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$
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―
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―
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$
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631
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39%
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||||||
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Incentive compensation expense
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$
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4,854
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$
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4,603
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5%
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$
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2,685
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81%
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||||||
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Selling expenses
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$
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15,609
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$
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10,578
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48%
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$
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12,985
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20%
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||||||
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G&A expenses (excluding severance and other charges)
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$
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23,209
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$
|
22,857
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2%
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$
|
22,823
|
2%
|
||||||
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SG&A expenses
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$
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44,547
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$
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38,038
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17%
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$
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39,124
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14%
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||||||
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SG&A % from home sales
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15.2%
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18.1%
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(2.9%)
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16.2%
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(1.0%)
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|||||||||
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SG&A % from home sales (excluding severance and other charges)*
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14.9%
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18.1%
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(3.2%)
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15.9%
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(1.0%)
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|||||||||
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Net new orders
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615
|
428
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44%
|
764
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(20%)
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|||||||||
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Average active selling communities
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160
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134
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19%
|
159
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1%
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|||||||||
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Monthly sales absorption rate per community
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1.3
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1.1
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18%
|
1.6
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(19%)
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|||||||||
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Cancellation rate
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19%
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23%
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(4%)
|
16%
|
3%
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|||||||||
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Gross cancellations
|
141
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130
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8%
|
144
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(2%)
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|||||||||
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Cancellations from current quarter sales
|
53
|
59
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(10%)
|
63
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(16%)
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|||||||||
|
Backlog (homes)
|
681
|
414
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64%
|
848
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(20%)
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|||||||||
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Backlog (dollar value)
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$
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232,583
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$
|
137,423
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69%
|
$
|
304,846
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(24%)
|
||||||
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Cash flows (uses) from operating activities
|
$
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(12,036)
|
$
|
(52,463)
|
77%
|
$
|
(78,464)
|
85%
|
||||||
|
Cash flows (uses) from investing activities
|
$
|
(3,043)
|
$
|
4,999
|
(161%)
|
$
|
4,254
|
(172%)
|
||||||
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Cash flows (uses) from financing activities
|
$
|
(5,748)
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$
|
239,507
|
(102%)
|
$
|
21,884
|
(126%)
|
||||||
|
Land purchases (incl. seller financing and excl. JV investments)
|
$
|
49,759
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$
|
33,552
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48%
|
$
|
74,736
|
(33%)
|
||||||
|
Adjusted Homebuilding EBITDA*
|
$
|
42,809
|
$
|
28,892
|
48%
|
$
|
28,350
|
51%
|
||||||
|
Adjusted Homebuilding EBITDA Margin %*
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14.6%
|
13.6%
|
1.0%
|
11.7%
|
2.9%
|
|||||||||
|
Homebuilding interest incurred
|
$
|
35,425
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$
|
28,328
|
25%
|
$
|
35,273
|
0%
|
||||||
|
Homebuilding interest capitalized to inventories owned
|
$
|
30,777
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$
|
19,425
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58%
|
$
|
29,329
|
5%
|
||||||
|
Homebuilding interest capitalized to investments in JVs
|
$
|
1,689
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$
|
1,450
|
16%
|
$
|
1,694
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(0%)
|
||||||
|
Interest amortized to cost of sales (incl. cost of land sales)
|
$
|
23,657
|
$
|
14,898
|
59%
|
$
|
18,853
|
25%
|
||||||
5
|
For the Year Ended
|
|||||||||
|
December 31,
|
December 31,
|
Percentage
|
|||||||
|
2011
|
2010
|
or % Change
|
|||||||
|
Operating Data
|
(Dollars in thousands)
|
||||||||
|
Deliveries
|
2,528
|
2,646
|
(4%)
|
||||||
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Average selling price
|
$
|
349
|
$
|
343
|
2%
|
||||
|
Home sale revenues
|
$
|
882,094
|
$
|
908,562
|
(3%)
|
||||
|
Gross margin %
|
18.4%
|
22.1%
|
(3.7%)
|
||||||
|
Gross margin % from home sales (excluding impairments and warranty accrual adjustments)*
|
19.6%
|
22.2%
|
(2.6%)
|
||||||
|
Gross margin % from home sales (excluding impairments, warranty accrual adjustments and
|
|||||||||
|
interest amortized to cost of home sales)*
|
27.4%
|
28.7%
|
(1.3%)
|
||||||
|
Inventory impairments and deposit write-offs
|
$
|
15,334
|
$
|
2,389
|
542%
|
||||
|
Severance and other charges
|
$
|
4,245
|
$
|
―
|
―
|
||||
|
Incentive compensation expense
|
$ |
10,944
|
$ |
14,953
|
(27%)
|
||||
|
Selling expenses
|
$ |
48,291
|
$ |
45,150
|
7%
|
||||
|
G&A expenses (excluding severance and other charges)
|
$ |
90,895
|
$ |
90,439
|
1%
|
||||
|
SG&A expenses
|
$ |
154,375
|
$ |
150,542
|
3%
|
||||
|
SG&A % from home sales
|
17.5%
|
16.6%
|
0.9%
|
||||||
|
SG&A % from home sales (excluding restructuring charges)*
|
17.0%
|
16.6%
|
0.4%
|
||||||
|
Net new orders
|
2,795
|
2,461
|
14%
|
||||||
|
Average active selling communities
|
152
|
130
|
17%
|
||||||
|
Monthly sales absorption rate per community
|
1.5
|
1.6
|
(6%)
|
||||||
|
Cancellation rate
|
16%
|
18%
|
(2%)
|
||||||
|
Gross cancellations
|
520
|
525
|
(1%)
|
||||||
|
Cancellations from current year sales
|
227
|
236
|
(4%)
|
||||||
|
Cash flows (uses) from operating activities
|
$
|
(322,613)
|
$
|
(80,958)
|
(298%)
|
||||
|
Cash flows (uses) from investing activities
|
$
|
(8,313)
|
$
|
(33,455)
|
75%
|
||||
|
Cash flows (uses) from financing activities
|
$
|
10,077
|
$
|
250,225
|
(96%)
|
||||
|
Land purchases (incl. seller financing and excl. JV investments)
|
$
|
303,775
|
$
|
282,361
|
8%
|
||||
|
Adjusted Homebuilding EBITDA*
|
$
|
105,855
|
$
|
131,576
|
(20%)
|
||||
|
Adjusted Homebuilding EBITDA Margin %*
|
12.0%
|
14.4%
|
(2.4%)
|
||||||
|
Homebuilding interest incurred
|
$
|
140,905
|
$
|
110,358
|
28%
|
||||
|
Homebuilding interest capitalized to inventories owned
|
$
|
109,002
|
$
|
66,665
|
64%
|
||||
|
Homebuilding interest capitalized to investments in JVs
|
$
|
6,735
|
$
|
3,519
|
91%
|
||||
|
Interest amortized to cost of sales (incl. cost of land sales)
|
$
|
69,636
|
$
|
60,565
|
15%
|
||||
| As of | |||||||||
| December 31, | December 31, | Percentage | |||||||
| 2011 | 2010 | or % Change | |||||||
| Balance Sheet Data | (Dollars in thousands, except per share amounts) | ||||||||
| Homebuilding cash (including restricted cash) | $ | 438,157 | $ | 748,754 | (41%) | ||||
| Inventories owned | $ | 1,477,239 | $ | 1,181,697 | 25% | ||||
| Lots owned and controlled | 26,444 | 23,549 | 12% | ||||||
| Homes under construction | 940 | 568 | 65% | ||||||
| Completed specs | 383 | 512 | (25%) | ||||||
| Deferred tax asset valuation allowance | $ | 510,621 | $ | 516,366 | (1%) | ||||
| Homebuilding debt | $ | 1,324,948 | $ | 1,320,254 | 0% | ||||
| Joint venture recourse debt | $ | ― | $ | 3,865 | (100%) | ||||
| Stockholders' equity | $ | 623,754 | $ | 621,862 | 0% | ||||
| Stockholders' equity per share (including if-converted | |||||||||
| preferred stock)* | $ | 1.82 | $ | 1.83 | (1%) | ||||
| Total debt to book capitalization* | 68.7% | 68.5% | 0.2% | ||||||
| Adjusted net homebuilding debt to total adjusted | |||||||||
| book capitalization* | 58.7% | 47.9% | 10.8% | ||||||
1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.
*Please see “Reconciliation of Non-GAAP Financial Measures” beginning on page 12.
6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||
|
(Unaudited)
|
||||||||||||||
|
Homebuilding:
|
||||||||||||||
|
Home sale revenues
|
$
|
292,725
|
$
|
210,424
|
$
|
882,094
|
$
|
908,562
|
||||||
|
Land sale revenues
|
431
|
2,000
|
899
|
3,856
|
||||||||||
|
Total revenues
|
293,156
|
212,424
|
882,993
|
912,418
|
||||||||||
|
Cost of home sales
|
(232,960)
|
(163,606)
|
(719,893)
|
(707,006)
|
||||||||||
|
Cost of land sales
|
(430)
|
(1,940)
|
(903)
|
(3,568)
|
||||||||||
|
Total cost of sales
|
(233,390)
|
(165,546)
|
(720,796)
|
(710,574)
|
||||||||||
|
Gross margin
|
59,766
|
46,878
|
162,197
|
201,844
|
||||||||||
|
Gross margin %
|
20.4%
|
22.1%
|
18.4%
|
22.1%
|
||||||||||
|
Selling, general and administrative expenses
|
(44,547)
|
(38,038)
|
(154,375)
|
(150,542)
|
||||||||||
|
Income from unconsolidated joint ventures
|
1,298
|
25
|
207
|
1,166
|
||||||||||
|
Interest expense
|
(2,959)
|
(7,453)
|
(25,168)
|
(40,174)
|
||||||||||
|
Loss on early extinguishment of debt
|
―
|
(23,839)
|
―
|
(30,028)
|
||||||||||
|
Other income (expense)
|
(338)
|
(544)
|
(1,017)
|
3,733
|
||||||||||
|
Homebuilding pretax income (loss)
|
13,220
|
(22,971)
|
(18,156)
|
(14,001)
|
||||||||||
|
Financial Services:
|
||||||||||||||
|
Revenues
|
3,783
|
2,745
|
10,907
|
12,456
|
||||||||||
|
Expenses
|
(2,230)
|
(2,852)
|
(9,401)
|
(10,878)
|
||||||||||
|
Other income
|
79
|
31
|
177
|
142
|
||||||||||
|
Financial services pretax income (loss)
|
1,632
|
(76)
|
1,683
|
1,720
|
||||||||||
|
Income (loss) before income taxes
|
14,852
|
(23,047)
|
(16,473)
|
(12,281)
|
||||||||||
|
Benefit for income taxes
|
481
|
1,190
|
56
|
557
|
||||||||||
|
Net income (loss)
|
15,333
|
(21,857)
|
(16,417)
|
(11,724)
|
||||||||||
|
Less: Net (income) loss allocated to preferred shareholder
|
(6,619)
|
12,388
|
7,101
|
6,849
|
||||||||||
|
Net income (loss) available to common stockholders
|
$
|
8,714
|
$
|
(9,469)
|
$
|
(9,316)
|
$
|
(4,875)
|
||||||
|
Income (Loss) Per Common Share:
|
||||||||||||||
|
Basic
|
$
|
0.04
|
$
|
(0.08)
|
$
|
(0.05)
|
$
|
(0.05)
|
||||||
|
Diluted
|
$
|
0.04
|
$
|
(0.08)
|
$
|
(0.05)
|
$
|
(0.05)
|
||||||
|
Weighted Average Common Shares Outstanding:
|
||||||||||||||
|
Basic
|
194,571,736
|
112,978,508
|
193,909,714
|
105,202,857
|
||||||||||
|
Diluted
|
196,596,197
|
112,978,508
|
193,909,714
|
105,202,857
|
||||||||||
|
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
|
||||||||||
7
CONDENSED CONSOLIDATED BALANCE SHEETS
|
December 31,
|
||||||||||
|
2011
|
2010
|
|||||||||
|
(Dollars in thousands)
|
||||||||||
|
ASSETS
|
(Unaudited)
|
|||||||||
|
Homebuilding:
|
||||||||||
|
Cash and equivalents
|
$
|
406,785
|
$
|
720,516
|
||||||
|
Restricted cash
|
31,372
|
28,238
|
||||||||
|
Trade and other receivables
|
11,525
|
6,167
|
||||||||
|
Inventories:
|
||||||||||
|
Owned
|
1,477,239
|
1,181,697
|
||||||||
|
Not owned
|
59,840
|
18,999
|
||||||||
|
Investments in unconsolidated joint ventures
|
81,807
|
73,861
|
||||||||
|
Deferred income taxes, net
|
5,326
|
9,269
|
||||||||
|
Other assets
|
35,693
|
38,175
|
||||||||
|
Total Homebuilding Assets
|
2,109,587
|
2,076,922
|
||||||||
|
Financial Services:
|
||||||||||
|
Cash and equivalents
|
3,737
|
10,855
|
||||||||
|
Restricted cash
|
1,295
|
2,870
|
||||||||
|
Mortgage loans held for sale, net
|
74,195
|
30,279
|
||||||||
|
Mortgage loans held for investment, net
|
10,115
|
9,904
|
||||||||
|
Other assets
|
1,454
|
2,293
|
||||||||
|
Total Financial Services Assets
|
90,796
|
56,201
|
||||||||
|
Total Assets
|
$
|
2,200,383
|
$
|
2,133,123
|
||||||
|
LIABILITIES AND EQUITY
|
||||||||||
|
Homebuilding:
|
||||||||||
|
Accounts payable
|
$
|
17,829
|
$
|
16,716
|
||||||
|
Accrued liabilities
|
185,890
|
143,127
|
||||||||
|
Secured project debt and other notes payable
|
3,531
|
4,738
|
||||||||
|
Senior notes payable
|
1,275,093
|
1,272,977
|
||||||||
|
Senior subordinated notes payable
|
46,324
|
42,539
|
||||||||
|
Total Homebuilding Liabilities
|
1,528,667
|
1,480,097
|
||||||||
|
Financial Services:
|
||||||||||
|
Accounts payable and other liabilities
|
1,154
|
820
|
||||||||
|
Mortgage credit facilities
|
46,808
|
30,344
|
||||||||
|
Total Financial Services Liabilities
|
47,962
|
31,164
|
||||||||
|
Total Liabilities
|
1,576,629
|
1,511,261
|
||||||||
|
Equity:
|
||||||||||
|
Stockholders' Equity:
|
||||||||||
|
Preferred stock, $0.01 par value; 10,000,000 shares
|
||||||||||
|
authorized; 450,829 shares issued and outstanding
|
||||||||||
|
at December 31, 2011 and 2010
|
5
|
5
|
||||||||
|
Common stock, $0.01 par value; 600,000,000 shares
|
||||||||||
|
authorized; 198,563,273 and 196,641,551 shares
|
||||||||||
|
issued and outstanding at December 31, 2011
|
||||||||||
|
and 2010, respectively
|
1,985
|
1,966
|
||||||||
|
Additional paid-in capital
|
1,239,180
|
1,227,292
|
||||||||
|
Accumulated deficit
|
(608,769)
|
(592,352)
|
||||||||
|
Accumulated other comprehensive loss, net of tax
|
(8,647)
|
(15,049)
|
||||||||
|
Total Equity
|
623,754
|
621,862
|
||||||||
|
Total Liabilities and Equity
|
$
|
2,200,383
|
$
|
2,133,123
|
||||||
INVENTORIES
|
December 31,
|
|||||
|
2011
|
2010
|
||||
|
(Dollars in thousands)
|
|||||
|
Inventories Owned:
|
(Unaudited)
|
||||
|
Land and land under development
|
$ | 1,036,830 | $ | 801,681 | |
|
Homes completed and under construction
|
339,849 | 281,780 | |||
|
Model homes
|
100,560 | 98,236 | |||
|
Total inventories owned
|
$ | 1,477,239 | $ | 1,181,697 | |
|
Inventories Owned by Segment:
|
|||||
|
California
|
$ | 890,300 | $ | 727,317 | |
|
Southwest
|
302,686 | 222,791 | |||
|
Southeast
|
284,253 | 231,589 | |||
|
Total inventories owned
|
$ | 1,477,239 | $ | 1,181,697 | |
8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Three Months Ended December 31,
|
Year Ended December 31,
|
||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
Cash Flows From Operating Activities:
|
|||||||||||||||
|
Net income (loss)
|
$
|
15,333
|
$
|
(21,857)
|
$
|
(16,417)
|
$
|
(11,724)
|
|||||||
|
Adjustments to reconcile net income (loss) to net cash
|
|||||||||||||||
|
provided by (used in) operating activities:
|
|||||||||||||||
|
Loss on early extinguishment of debt
|
―
|
23,839
|
―
|
30,028
|
|||||||||||
|
Amortization of stock-based compensation
|
3,145
|
3,250
|
11,239
|
11,848
|
|||||||||||
|
Inventory impairment charges and deposit write-offs
|
416
|
1,918
|
15,334
|
1,918
|
|||||||||||
|
Other operating activities
|
(654)
|
816
|
3,247
|
1,772
|
|||||||||||
|
Changes in cash and equivalents due to:
|
|||||||||||||||
|
Trade and other receivables
|
6,951
|
7,524
|
(5,358)
|
6,541
|
|||||||||||
|
Mortgage loans held for sale
|
(23,924)
|
6,319
|
(43,661)
|
12,165
|
|||||||||||
|
Inventories - owned
|
(20,670)
|
(28,286)
|
(282,447)
|
(148,706)
|
|||||||||||
|
Inventories - not owned
|
(2,068)
|
(3,791)
|
(19,727)
|
(27,861)
|
|||||||||||
|
Other assets
|
6,525
|
2,650
|
6,212
|
111,496
|
|||||||||||
|
Accounts payable and accrued liabilities
|
2,910
|
(44,845)
|
8,965
|
(68,435)
|
|||||||||||
|
Net cash provided by (used in) operating activities
|
(12,036)
|
(52,463)
|
(322,613)
|
(80,958)
|
|||||||||||
|
Cash Flows From Investing Activities:
|
|||||||||||||||
|
Investments in unconsolidated homebuilding joint ventures
|
(3,385)
|
(2,079)
|
(14,689)
|
(39,513)
|
|||||||||||
|
Other investing activities
|
342
|
7,078
|
6,376
|
6,058
|
|||||||||||
|
Net cash provided by (used in) investing activities
|
(3,043)
|
4,999
|
(8,313)
|
(33,455)
|
|||||||||||
|
Cash Flows From Financing Activities:
|
|||||||||||||||
|
Change in restricted cash
|
260
|
(11,255)
|
(1,559)
|
(12,843)
|
|||||||||||
|
Principal payments on secured project debt and other notes payable
|
(368)
|
(155)
|
(1,207)
|
(83,562)
|
|||||||||||
|
Principal payments on senior and senior subordinated notes payable
|
―
|
(596,520)
|
―
|
(792,389)
|
|||||||||||
|
Proceeds from the issuance of senior notes payable
|
―
|
677,804
|
―
|
977,804
|
|||||||||||
|
Payment of debt issuance costs
|
―
|
(11,709)
|
(4,575)
|
(17,215)
|
|||||||||||
|
Net proceeds from (payments on) mortgage credit facilities
|
(5,720)
|
(5,258)
|
16,464
|
(10,651)
|
|||||||||||
|
Net proceeds from the issuance of common stock
|
―
|
186,443
|
―
|
186,443
|
|||||||||||
|
Other financing activities
|
80
|
157
|
954
|
2,638
|
|||||||||||
|
Net cash provided by (used in) financing activities
|
(5,748)
|
239,507
|
10,077
|
250,225
|
|||||||||||
|
Net increase (decrease) in cash and equivalents
|
(20,827)
|
192,043
|
(320,849)
|
135,812
|
|||||||||||
|
Cash and equivalents at beginning of period
|
431,349
|
539,328
|
731,371
|
595,559
|
|||||||||||
|
Cash and equivalents at end of period
|
$
|
410,522
|
$
|
731,371
|
$
|
410,522
|
$
|
731,371
|
|||||||
|
Cash and equivalents at end of period
|
$
|
410,522
|
$
|
731,371
|
$
|
410,522
|
$
|
731,371
|
|||||||
|
Homebuilding restricted cash at end of period
|
31,372
|
28,238
|
31,372
|
28,238
|
|||||||||||
|
Financial services restricted cash at end of period
|
1,295
|
2,870
|
1,295
|
2,870
|
|||||||||||
|
Cash and equivalents and restricted cash at end of period
|
$
|
443,189
|
$
|
762,479
|
$
|
443,189
|
$
|
762,479
|
|||||||
9
REGIONAL OPERATING DATA
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
|||||||||||
|
New homes delivered:
|
||||||||||||||||
|
California
|
279
|
276
|
1%
|
975
|
1,102
|
(12%)
|
||||||||||
|
Arizona
|
54
|
42
|
29%
|
169
|
196
|
(14%)
|
||||||||||
|
Texas
|
135
|
82
|
65%
|
420
|
368
|
14%
|
||||||||||
|
Colorado
|
28
|
22
|
27%
|
97
|
115
|
(16%)
|
||||||||||
|
Nevada
|
3
|
7
|
(57%)
|
15
|
22
|
(32%)
|
||||||||||
|
Florida
|
153
|
99
|
55%
|
446
|
446
|
―
|
||||||||||
|
Carolinas
|
130
|
91
|
43%
|
406
|
397
|
2%
|
||||||||||
|
Consolidated total
|
782
|
619
|
26%
|
2,528
|
2,646
|
(4%)
|
||||||||||
|
Unconsolidated joint ventures
|
8
|
14
|
(43%)
|
35
|
54
|
(35%)
|
||||||||||
|
Total (including joint ventures)
|
790
|
633
|
25%
|
2,563
|
2,700
|
(5%)
|
||||||||||
|
Three Months Ended December 31,
|
Year Ended December 31,
|
||||||||||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
|
Average selling prices of homes delivered:
|
|||||||||||||||||||
|
California
|
$
|
598
|
$
|
472
|
27%
|
$
|
519
|
$
|
495
|
5%
|
|||||||||
|
Arizona
|
197
|
195
|
1%
|
202
|
202
|
―
|
|||||||||||||
|
Texas
|
297
|
294
|
1%
|
292
|
294
|
(1%)
|
|||||||||||||
|
Colorado
|
309
|
293
|
5%
|
308
|
295
|
4%
|
|||||||||||||
|
Nevada
|
173
|
203
|
(15%)
|
190
|
201
|
(5%)
|
|||||||||||||
|
Florida
|
223
|
197
|
13%
|
208
|
193
|
8%
|
|||||||||||||
|
Carolinas
|
245
|
225
|
9%
|
231
|
230
|
0%
|
|||||||||||||
|
Consolidated
|
374
|
340
|
10%
|
349
|
343
|
2%
|
|||||||||||||
|
Unconsolidated joint ventures
|
350
|
458
|
(24%)
|
396
|
465
|
(15%)
|
|||||||||||||
|
Total (including joint ventures)
|
$
|
374
|
$
|
343
|
9%
|
$
|
350
|
$
|
346
|
1%
|
|||||||||
|
Three Months Ended December 31,
|
Year Ended December 31,
|
||||||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
||||||||||
|
Net new orders:
|
|||||||||||||||
|
California
|
199
|
150
|
33%
|
1,030
|
974
|
6%
|
|||||||||
|
Arizona
|
54
|
40
|
35%
|
190
|
185
|
3%
|
|||||||||
|
Texas
|
94
|
81
|
16%
|
470
|
358
|
31%
|
|||||||||
|
Colorado
|
25
|
14
|
79%
|
100
|
91
|
10%
|
|||||||||
|
Nevada
|
3
|
4
|
(25%)
|
10
|
30
|
(67%)
|
|||||||||
|
Florida
|
130
|
79
|
65%
|
541
|
435
|
24%
|
|||||||||
|
Carolinas
|
110
|
60
|
83%
|
454
|
388
|
17%
|
|||||||||
|
Consolidated total
|
615
|
428
|
44%
|
2,795
|
2,461
|
14%
|
|||||||||
|
Unconsolidated joint ventures
|
10
|
12
|
(17%)
|
33
|
50
|
(34%)
|
|||||||||
|
Total (including joint ventures)
|
625
|
440
|
42%
|
2,828
|
2,511
|
13%
|
|||||||||
|
Three Months Ended December 31,
|
Year Ended December 31,
|
||||||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
||||||||||
|
Average number of selling communities
|
|||||||||||||||
|
during the period:
|
|||||||||||||||
|
California
|
49
|
46
|
7%
|
49
|
46
|
7%
|
|||||||||
|
Arizona
|
10
|
9
|
11%
|
9
|
9
|
―
|
|||||||||
|
Texas
|
21
|
19
|
11%
|
21
|
17
|
24%
|
|||||||||
|
Colorado
|
6
|
4
|
50%
|
5
|
5
|
―
|
|||||||||
|
Nevada
|
1
|
1
|
―
|
1
|
1
|
―
|
|||||||||
|
Florida
|
40
|
29
|
38%
|
37
|
26
|
42%
|
|||||||||
|
Carolinas
|
33
|
26
|
27%
|
30
|
26
|
15%
|
|||||||||
|
Consolidated total
|
160
|
134
|
19%
|
152
|
130
|
17%
|
|||||||||
|
Unconsolidated joint ventures
|
3
|
3
|
―
|
3
|
3
|
―
|
|||||||||
|
Total (including joint ventures)
|
163
|
137
|
19%
|
155
|
133
|
17%
|
|||||||||
10
REGIONAL OPERATING DATA (Continued)
|
At December 31,
|
|||||||||||||||||||||
|
|
2011
|
2010
|
% Change
|
||||||||||||||||||
|
Homes
|
Dollar Value
|
Homes
|
Dollar Value
|
Homes
|
Dollar Value
|
||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||
|
Backlog:
|
|||||||||||||||||||||
|
California
|
174
|
$
|
91,051
|
119
|
$
|
60,440
|
46%
|
51%
|
|||||||||||||
|
Arizona
|
57
|
11,598
|
36
|
7,988
|
58%
|
45%
|
|||||||||||||||
|
Texas
|
149
|
46,307
|
99
|
30,456
|
51%
|
52%
|
|||||||||||||||
|
Colorado
|
33
|
12,904
|
30
|
9,313
|
10%
|
39%
|
|||||||||||||||
|
Nevada
|
3
|
638
|
8
|
1,628
|
(63%)
|
(61%)
|
|||||||||||||||
|
Florida
|
162
|
42,360
|
67
|
14,225
|
142%
|
198%
|
|||||||||||||||
|
Carolinas
|
103
|
27,725
|
55
|
13,373
|
87%
|
107%
|
|||||||||||||||
|
Consolidated total
|
681
|
232,583
|
414
|
137,423
|
64%
|
69%
|
|||||||||||||||
|
Unconsolidated joint ventures
|
3
|
1,240
|
5
|
2,109
|
(40%)
|
(41%)
|
|||||||||||||||
|
Total (including joint ventures)
|
684
|
$
|
233,823
|
419
|
$
|
139,532
|
63%
|
68%
|
|||||||||||||
|
At December 31,
|
|||||||||
|
2011
|
2010
|
% Change
|
|||||||
|
Lots owned and controlled:
|
|||||||||
|
California
|
9,230
|
9,505
|
(3%)
|
||||||
|
Arizona
|
1,872
|
1,940
|
(4%)
|
||||||
|
Texas
|
4,232
|
2,419
|
75%
|
||||||
|
Colorado
|
690
|
370
|
86%
|
||||||
|
Nevada
|
1,133
|
1,196
|
(5%)
|
||||||
|
Florida
|
6,323
|
5,632
|
12%
|
||||||
|
Carolinas
|
2,964
|
2,487
|
19%
|
||||||
|
Total (including joint ventures)
|
26,444
|
23,549
|
12%
|
||||||
|
Lots owned
|
20,035
|
17,650
|
14%
|
||||||
|
Lots optioned or subject to contract
|
5,183
|
4,451
|
16%
|
||||||
|
Joint venture lots
|
1,226
|
1,448
|
(15%)
|
||||||
|
Total (including joint ventures)
|
26,444
|
23,549
|
12%
|
||||||
|
Lots owned:
|
|||||||||
|
Raw lots
|
3,824
|
3,453
|
11%
|
||||||
|
Lots under development
|
4,760
|
3,089
|
54%
|
||||||
|
Finished lots
|
5,831
|
5,950
|
(2%)
|
||||||
|
Under construction or completed homes
|
1,760
|
1,486
|
18%
|
||||||
|
Held for sale
|
3,860
|
3,672
|
5%
|
||||||
|
Total
|
20,035
|
17,650
|
14%
|
||||||
11
|
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 income (loss) to net income excluding inventory impairment charges and deposit write-offs (net of a 39% income tax benefit), restructuring, severance and other charges related to management changes (net of a 39% 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 inventory impairment charges and deposit write-offs (net of income tax benefit), restructuring, severance and other charges (net of income tax benefit), and the deferred tax asset valuation allowance related to these charges for the three and twelve months ended December 31, 2011 is calculated as follows:
|
Three Months Ended
|
Year Ended
|
||||
|
December 31, 2011
|
December 31, 2011
|
||||
|
(Dollars in thousands)
|
|||||
|
Net income (loss)
|
$
|
15,333
|
$
|
(16,417)
|
|
|
Add: Inventory impairment charges and deposit write-offs, net of income tax benefit
|
254 | 9,354 | |||
|
Add: Restructuring, severance and other charges, net of income tax benefit
|
534
|
2,589
|
|||
|
Add: Net deferred tax asset valuation allowance
|
503
|
7,636
|
|||
|
Net income, as adjusted
|
|
16,624
|
|
3,162
|
|
|
Less: Adjusted net income allocated to preferred shareholder
|
(7,177)
|
(1,368)
|
|||
|
Adjusted net income available to common stockholders
|
$
|
9,447
|
$
|
1,794
|
|
|
Diluted earnings per common share
|
$
|
0.05
|
$
|
0.01
|
|
|
Weighted average diluted common shares outstanding
|
196,596,197
|
197,151,277
|
|||
The table set forth below reconciles the Company's gross margin percentage from home sales to the gross margin percentage from home sales, excluding housing inventory impairment charges, warranty accrual adjustments 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 provide comparability with the Company’s peer group
|
Three Months Ended
|
||||||||||||||
|
December 31,
2011
|
Gross
Margin %
|
December 31,
2010
|
Gross
Margin %
|
September 30,
2011
|
Gross
Margin %
|
|||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Home sale revenues
|
$
|
292,725
|
$
|
210,424
|
$
|
241,434
|
||||||||
|
Less: Cost of home sales
|
(232,960)
|
(163,606)
|
(203,188)
|
|||||||||||
|
Gross margin from home sales
|
59,765
|
20.4%
|
46,818
|
22.2%
|
38,246
|
15.8%
|
||||||||
|
Add: Housing inventory impairment charges
|
―
|
1,818
|
7,230
|
|||||||||||
|
Less: Benefit from warranty accrual adjustments
|
(2,900)
|
(2,000)
|
―
|
|||||||||||
|
Gross margin from home sales, excluding impairment
|
||||||||||||||
|
charges and warranty accrual adjustments
|
56,865
|
19.4%
|
46,636
|
22.2%
|
45,476
|
18.8%
|
||||||||
|
Add: Capitalized interest included in cost
|
||||||||||||||
|
of home sales
|
23,557
|
8.1%
|
14,898
|
7.0%
|
18,776
|
7.8%
|
||||||||
|
Gross margin from home sales, excluding impairment
|
||||||||||||||
|
charges, warranty accrual adjustments and interest
|
||||||||||||||
|
amortized to cost of home sales
|
$
|
80,422
|
27.5%
|
$
|
61,534
|
29.2%
|
$
|
64,252
|
26.6%
|
|||||
|
Year Ended December 31,
|
|||||||||
|
2011
|
Gross
Margin %
|
2010
|
Gross
Margin %
|
||||||
|
(Dollars in thousands)
|
|||||||||
|
Home sale revenues
|
$
|
882,094
|
$
|
908,562
|
|||||
|
Less: Cost of home sales
|
(719,893)
|
(707,006)
|
|||||||
|
Gross margin from home sales
|
162,201
|
18.4%
|
201,556
|
22.2%
|
|||||
|
Add: Housing inventory impairment charges
|
13,189
|
1,818
|
|||||||
|
Less: Benefit from warranty accrual adjustments
|
(2,900)
|
(2,027)
|
|||||||
|
Gross margin from home sales, excluding impairment
|
|||||||||
|
charges and warranty accrual adjustments
|
172,490
|
19.6%
|
201,347
|
22.2%
|
|||||
|
Add: Capitalized interest included in cost
|
|||||||||
|
of home sales
|
69,421
|
7.8%
|
59,750
|
6.5%
|
|||||
|
Gross margin from home sales, excluding impairment
|
|||||||||
|
charges, warranty accrual adjustments and interest
|
|||||||||
|
amortized to cost of home sales
|
$
|
241,911
|
27.4%
|
$
|
261,097
|
28.7%
|
|||
12
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, severance and other charges related to management changes. 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,
2011
|
December 31,
2010
|
September 30,
2011
|
2011
|
2010
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Selling, general and administrative expenses
|
$
|
44,547
|
$
|
38,038
|
$
|
39,124
|
$
|
154,375
|
$
|
150,542
|
||||
|
Less: Restructuring, severance and other charges
|
(875)
|
―
|
(631)
|
(4,245)
|
―
|
|||||||||
|
Selling, general and administrative expenses, excluding
|
||||||||||||||
|
restructuring, severance and other charges
|
$
|
43,672
|
$
|
38,038
|
$
|
38,493
|
$
|
150,130
|
$
|
150,542
|
||||
|
SG&A % from home sales, excluding restructuring,
|
||||||||||||||
|
severance and other charges
|
14.9%
|
18.1%
|
15.9%
|
17.0%
|
16.6%
|
|||||||||
The table set forth below reconciles the Company’s cash flows used in operations to cash inflows from operations excluding land purchases, development costs, 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, development costs and debt restructuring activities.
|
Three Months Ended
|
Year Ended December 31,
|
|||||||||||||
|
December 31,
2011
|
December 31,
2010
|
September 30,
2011
|
2011
|
2010
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||
|
Cash flows used in operations
|
$
|
(12,036)
|
$
|
(52,463)
|
$
|
(78,464)
|
$
|
(322,613)
|
$
|
(80,958)
|
||||
|
Add: Cash land purchases
|
49,759
|
33,552
|
74,736
|
303,721
|
255,046
|
|||||||||
|
Add: Land development costs
|
36,587
|
26,350
|
31,673
|
133,358
|
80,766
|
|||||||||
|
Add: Swap unwind payments related to debt restructure
|
―
|
24,545
|
―
|
―
|
24,545
|
|||||||||
|
Add: Accelerated interest payments related to debt restructure
|
―
|
6,541
|
―
|
―
|
6,541
|
|||||||||
|
Cash inflows from operations (excluding land purchases,
|
||||||||||||||
|
development costs and debt restructuring payments)
|
$
|
74,310
|
$
|
38,525
|
$
|
27,945
|
$
|
114,466
|
$
|
285,940
|
||||
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,
2011
|
December 31,
2010
|
September 30,
2011
|
2011
|
2010
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||
|
Net income (loss)
|
$
|
15,333
|
$
|
(21,857)
|
$
|
(6,434)
|
$
|
(16,417)
|
$
|
(11,724)
|
||||||
|
Provision (benefit) for income taxes
|
(481)
|
(1,190)
|
150
|
(56)
|
(557)
|
|||||||||||
|
Homebuilding interest amortized to cost of sales and interest expense
|
26,616
|
22,351
|
23,103
|
94,804
|
100,739
|
|||||||||||
|
Homebuilding depreciation and amortization
|
631
|
499
|
687
|
2,644
|
2,068
|
|||||||||||
|
Amortization of stock-based compensation
|
3,145
|
3,250
|
2,635
|
11,239
|
11,848
|
|||||||||||
|
EBITDA
|
45,244
|
3,053
|
20,141
|
92,214
|
102,374
|
|||||||||||
|
Add:
|
||||||||||||||||
|
Cash distributions of income from unconsolidated joint ventures
|
―
|
―
|
―
|
20
|
―
|
|||||||||||
|
Impairment charges and deposit write-offs
|
416
|
1,918
|
8,959
|
15,334
|
1,918
|
|||||||||||
|
Loss on early extinguishment of debt
|
―
|
23,839
|
―
|
―
|
30,028
|
|||||||||||
|
Less:
|
||||||||||||||||
|
Income (loss) from unconsolidated joint ventures
|
1,298
|
25
|
(455)
|
207
|
1,166
|
|||||||||||
|
Income (loss) from financial services subsidiary
|
1,553
|
(107)
|
1,205
|
1,506
|
1,578
|
|||||||||||
|
Adjusted Homebuilding EBITDA
|
$
|
42,809
|
$
|
28,892
|
$
|
28,350
|
$
|
105,855
|
$
|
131,576
|
||||||
|
Homebuilding revenues
|
$
|
293,156
|
$
|
212,424
|
$
|
241,793
|
$
|
882,993
|
$
|
912,418
|
||||||
|
Adjusted Homebuilding EBITDA Margin %
|
14.6%
|
13.6%
|
11.7%
|
12.0%
|
14.4%
|
|||||||||||
13
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:
|
Three Months Ended
|
Year Ended December 31,
|
||||||||||||||||
|
December 31,
2011
|
December 31,
2010
|
September 30,
2011
|
2011
|
2010
|
|||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$
|
(12,036)
|
$
|
(52,463)
|
$
|
(78,464)
|
$
|
(322,613)
|
$
|
(80,958)
|
|||||||
|
Add:
|
|||||||||||||||||
|
Provision (benefit) for income taxes
|
(481)
|
(1,190)
|
150
|
(56)
|
(557)
|
||||||||||||
|
Homebuilding interest amortized to cost of sales and interest expense
|
26,616
|
22,351
|
23,103
|
94,804
|
100,739
|
||||||||||||
|
Excess tax benefits from share-based payment arrangements
|
―
|
―
|
―
|
―
|
27
|
||||||||||||
|
Less:
|
|||||||||||||||||
|
Income (loss) from financial services subsidiary
|
1,553
|
(107)
|
1,205
|
1,506
|
1,578
|
||||||||||||
|
Depreciation and amortization from financial services subsidiary
|
18
|
344
|
17
|
611
|
934
|
||||||||||||
|
(Gain) loss on disposal of property and equipment
|
(5)
|
(2)
|
184
|
179
|
(37)
|
||||||||||||
|
Net changes in operating assets and liabilities:
|
|||||||||||||||||
|
Trade and other receivables
|
(6,951)
|
(7,524)
|
816
|
5,358
|
(6,541)
|
||||||||||||
|
Mortgage loans held for sale
|
23,924
|
(6,319)
|
14,967
|
43,661
|
(12,165)
|
||||||||||||
|
Inventories-owned
|
20,670
|
28,286
|
67,719
|
282,447
|
148,706
|
||||||||||||
|
Inventories-not owned
|
2,068
|
3,791
|
4,859
|
19,727
|
27,861
|
||||||||||||
|
Other assets
|
(6,525)
|
(2,650)
|
2,341
|
(6,212)
|
(111,496)
|
||||||||||||
|
Accounts payable and accrued liabilities
|
(2,910)
|
44,845
|
(5,735)
|
(8,965)
|
68,435
|
||||||||||||
|
Adjusted Homebuilding EBITDA
|
$
|
42,809
|
$
|
28,892
|
$
|
28,350
|
$
|
105,855
|
$
|
131,576
|
|||||||
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,
|
|||||||
|
2011
|
2010
|
||||||
|
(Dollars in thousands)
|
|||||||
|
Total consolidated debt
|
$
|
1,371,756
|
$
|
1,350,598
|
|||
|
Less:
|
|||||||
|
Financial services indebtedness
|
(46,808)
|
(30,344)
|
|||||
|
Homebuilding cash
|
(438,157)
|
(748,754)
|
|||||
|
Adjusted net homebuilding debt
|
886,791
|
571,500
|
|||||
|
Stockholders' equity
|
623,754
|
621,862
|
|||||
|
Total adjusted book capitalization
|
$
|
1,510,545
|
$
|
1,193,362
|
|||
|
Total debt to book capitalization
|
68.7%
|
68.5%
|
|||||
|
Adjusted net homebuilding debt to total adjusted book capitalization ratio
|
58.7%
|
47.9%
|
|||||
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.
|
December 31,
|
December 31,
|
||||
|
2011
|
2010
|
||||
|
Actual common shares outstanding
|
198,563,273
|
196,641,551
|
|||
|
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
|
342,456,155
|
340,534,433
|
|||
|
Stockholders' equity (Dollars in thousands)
|
$
|
623,754
|
$
|
621,862
|
|
|
Divided by pro forma common shares outstanding
|
÷
|
342,456,155
|
÷
|
340,534,433
|
|
|
Pro forma stockholders' equity per common share
|
$
|
1.82
|
$
|
1.83
|
|
14