News Release

 

CalAtlantic Group, Inc. Reports 2015 Full Year and Fourth Quarter Results

On October 1, 2015, Standard Pacific Corp. and The Ryland Group, Inc. completed their merger of equals, with Ryland merging into Standard Pacific and Standard Pacific continuing as the surviving corporation.  At the same time: (i) Standard Pacific changed its name to "CalAtlantic Group, Inc." and effected a reverse stock split such that each five shares of common stock of Standard Pacific issued and outstanding immediately prior to the closing of the merger were combined and converted into one issued and outstanding share of CalAtlantic common stock, (ii) MP CA Homes, LLC, the sole owner of Standard Pacific's outstanding Series B Preferred Stock, converted all of its preferred stock to CalAtlantic common stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of CalAtlantic common stock.

Because the closing of the merger occurred on October 1, 2015, the highlights and comparisons below and the other financial information included in this earnings release includes nine months of stand-alone data (through September 30, 2015) for predecessor Standard Pacific Corp. and three months of combined Standard Pacific Corp. and Ryland Group, Inc. data (from October 1, 2015 through December 31, 2015) as required by Generally Accepted Accounting Principles (GAAP).  To aid analysts and other investors with year-over-year comparability for the entire merged business, we also are providing limited pro forma information.  This pro forma information is a combination of full year 2014 and 2015 Standard Pacific and Ryland financial and operating data.  Limited historical Ryland operating data is also presented in the tables beginning on page 19 for informational purposes.

Additionally, as a result of the reverse stock split in connection with the merger, applicable accounting rules provide that the Company is required to restate per share information for all periods presented as if the reverse stock split had been implemented for such periods.  Those same accounting rules, however, do not allow the Company to include the MP CA Homes, LLC conversion of its Series B Preferred Stock, which occurred at the same time as the reverse stock split, into the restated share information. Please take this into account when evaluating the per share information presented below.

IRVINE, CALIFORNIA, February 18, 2016.  CalAtlantic Group, Inc. (NYSE: CAA) today announced results for the year and fourth quarter ended December 31, 2015.

 

"I am extremely proud of the progress we have made in bringing two great organizations together," said Larry Nicholson, CalAtlantic Group, Inc. President and Chief Executive Officer.  "Our team is doing a great job of carefully balancing the need to move our important integration work ahead while also remaining appropriately focused on running our day-to-day business.  There is still more work to be done, but as I look out over the headlights, I'm even more excited about the prospects for CalAtlantic."

 

2015 full year results include three quarters of stand-alone Standard Pacific and one quarter of the combined company, include merger and other one-time costs and the impact of purchase accounting. 2014 represents the stand-alone results of Standard Pacific, as required by GAAP.

·	Net new orders of 7,163, up 44%; Dollar value of net new orders up 51%

·	Backlog of 5,611 homes, up 228%; Dollar value of backlog up 181%

·	299 average active selling communities, up 64%

·	7,237 new home deliveries, up 46%

·	Average selling price of $477 thousand, flat

·	Home sale revenues of $3.4 billion, up 46%

·	Net income of $213.5 million, or $2.26 per diluted share, vs. net income of $215.9 million, or $2.68 per diluted share (includes the impact of $61.7 million of merger and other one-time costs and $64.2 million of purchase accounting adjustments)

o	Adjusted net income of $292.0 million*, or $3.09 per diluted share*

·	$1.0 billion of land purchases and development costs, compared to $943.1 million

2015 CalAtlantic Fourth Quarter Highlights and Comparisons to 2014 Fourth Quarter 

·	Net new orders of 2,699, up 176%; Dollar value of net new orders up 142%

·	579 average active selling communities, up 215%

·	3,795 new home deliveries, up 157%

·	Average selling price of $437 thousand, down 11%

·	Home sale revenues of $1.7 billion, up 129%

·	Gross margin from home sales of 19.8%, compared to 25.2%

o	Adjusted gross margin from home sales of 23.7%* compared to 25.2% (Q4 2015 excludes $64.2 million of purchase accounting impact related to the merger)

·	SG&A rate from home sales of 10.3%, compared to 10.9%

·	Operating margin from home sales of $158.0 million, or 9.5%, compared to $103.5 million, or 14.3%

o	Adjusted operating margin from home sales of $222.1 million*, or 13.4%*

·	Net income of $77.5 million, or $0.56 per diluted share, vs. net income of $64.6 million, or $0.80 per diluted share (includes the impact of $44.8 million of 2015 fourth quarter merger and other one-time costs and $64.2 million of purchase accounting adjustments)

o	Adjusted net income of $144.5 million*, or $1.04 per diluted share*

·	$398.0 million of land purchases and development costs, compared to $255.9 million

To aid analysts and other investors with year-over-year comparability for the entire merged business, we provide the below pro forma information.  This pro forma information is a combination of full year 2014 and 2015 Standard Pacific and Ryland financial and operating data, as if the merger closed on January 1, 2014.  Such pro forma data was not prepared to comply with Regulation S-X of the SEC Rules and Regulations.

·	Net new orders of 13,851, up 10%; Dollar value of net new orders up 18%

·	Backlog of 5,611 homes, up 30%; Dollar value of backlog up 40%

·	558 average active selling communities, up 13%

·	12,560 new home deliveries, down 1%

·	Average selling price of $420 thousand, up 8%

·	Home sale revenues of $5.3 billion, up 7%

·	Pretax income of $515.9 million vs. $634.4 million (includes the impact of $61.7 million of 2015 merger and other one-time costs and $64.2 million of purchase accounting adjustments)

o	Adjusted pretax income of $641.8 million*, flat

·	$1.6 billion of land purchases and development costs, compared to $1.7 billion

·	Pretax income of $126.2 million vs. $219.5 million (includes the impact of $44.8 million of 2015 fourth quarter merger and other one-time costs and $64.2 million of purchase accounting adjustments)

o	Adjusted pretax income of $235.2 million*, up 7%

·	$398.0 million of land purchases and development costs, compared to $524.6 million

Orders.  Net new orders for the 2015 fourth quarter were up 7% from the pro forma 2014 fourth quarter, to 2,699 homes, with the dollar value of these orders up 16%, and the Company's monthly sales absorption rate was 1.6 per community for the 2015 fourth quarter, relatively flat from the pro forma 2014 fourth quarter and down 18% from the pro forma 2015 third quarter, consistent with normal seasonal patterns.  The Company's cancellation rate for the 2015 fourth quarter was 22%, slightly above the pro forma 2014 fourth quarter and up from 20% for the pro forma 2015 third quarter.  Our 2015 fourth quarter cancellation rate was consistent with our average historical cancellation rate of approximately 22% over the last 10 years.

Backlog.  The dollar value of homes in backlog increased 40% to $2.6 billion, or 5,611 homes, compared to $1.8 billion, or 4,328 homes, for the pro forma 2014 fourth quarter, and decreased 15% compared to $3.0 billion, or 6,707 homes, for the pro forma 2015 third quarter.  The increase in pro forma year-over-year backlog value was driven primarily by our continued growth in community count and the corresponding increase in orders and an 8% increase in the average selling price of the homes in backlog on a pro forma basis, reflecting the product mix shift to more move-up and luxury homes and continued pricing power in many of our markets.

Revenue.  Revenues from home sales for the 2015 fourth quarter increased 6%, to $1.7 billion, as compared to the pro forma 2014 fourth quarter, resulting from an 11% increase on a pro forma basis in the Company's average home price to $437 thousand, partially offset by a 4% decrease in pro forma new home deliveries.  The increase in average home price was primarily attributable to a shift to more move-up product and general price increases within a majority of the Company's markets.

Gross Margin.  Gross margin percentage from home sales for the 2015 fourth quarter was 19.8%, as compared to 25.2% for the 2014 fourth quarter. The Company's 2015 fourth quarter gross margins were adversely impacted by the required fair value adjustment to homes in backlog and specs under construction acquired from Ryland in the merger, of which $64.2 million was recognized as an increase to cost of sales during the quarter.  Excluding the impact of purchasing accounting, the Company achieved adjusted gross margins from home sales of 23.7%* for the 2015 fourth quarter.

SG&A Expenses. Selling, general and administrative expenses for the 2015 fourth quarter were $171.5 million, or 10.3%, as compared to $79.3 million, or 10.9%, for the 2014 fourth quarter.  This 60 basis point improvement was primarily the result of a 129% increase in home sale revenues and the operating leverage gained in connection with the merger. 

Land.  During the 2015 fourth quarter, the Company spent $398.0 million on land purchases and development costs, compared to $524.6 million for the pro forma 2014 fourth quarter. The Company purchased $212.2 million of land, consisting of 2,546 homesites, of which 30% (based on homesites) is located in the North region, 27% in the Southeast region, 22% in the Southwest region, and 21% in the West region.  As of December 31, 2015, the Company owned or controlled 70,494 homesites, of which 47,061 were owned and

 

Earnings Conference Call

A conference call to discuss the Company's 2015 fourth quarter results will be held at 12:00 p.m. Eastern time February 19, 2016.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://investors.calatlantichomes.com.  The call will also be accessible via telephone by dialing (888) 286-2317 (domestic) or (719) 457-2617 (international); Passcode: 6978264. 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: 6978264.

About CalAtlantic Group, Inc.

This news release and the referenced earnings conference call contain forward-looking statements.  These statements include but are not limited to statements regarding the integration of the operations of Standard Pacific and Ryland, the future success of those combined operations; new home orders; deliveries; backlog; absorption rates; cancellation rates; average home price; revenue; profitability; cash flow; liquidity; gross margin; operating margin; product mix; land supply; and our liquidity.  In addition, the pro forma results presented above are not necessarily indicative of how the Company would have performed if Ryland and Standard Pacific were combined for all of 2014 and 2015 and are not necessarily indicative of the combined Company's future performance.  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 with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2014 and subsequent Quarterly Reports on Form 10-Q, including our Report on Form 10-Q for the quarter ended September 30, 2015.  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, jeff.mccall@calatl.com

*Please see "Reconciliation of Non-GAAP Financial Measures" beginning on page 15.

###

(Note: Tables Follow)

KEY STATISTICS AND FINANCIAL DATA¹

 

			As of or For the Three Months Ended
			December 31,			December 31,			Percentage		September 30,			Percentage
			2015			2014			or % Change		2015			or % Change
Select Operating Data			(Dollars in thousands)
Deliveries				3,795			1,475		157%			1,165		226%
Average selling price			$	437		$	491		(11%)		$	537		(19%)
Home sale revenues			$	1,659,982		$	724,342		129%		$	626,008		165%
Gross margin % (including land sales)				19.7%			24.2%		(4.5%)			24.5%		(4.8%)
Gross margin % from home sales				19.8%			25.2%		(5.4%)			25.3%		(5.5%)
Adjusted gross margin % from home sales (excluding purchase
	accounting adjustments included in cost of home sales)*			23.7%			25.2%		(1.5%)			25.3%		(1.6%)
Adjusted gross margin % from home sales (excluding purchase
	accounting adjustments and interest included in cost of home sales)*			26.4%			30.2%		(3.8%)			30.2%		(3.8%)
Incentive and stock-based compensation expense			$	21,239		$	7,364		188%		$	5,932		258%
Selling expenses			$	79,586		$	35,746		123%		$	32,687		143%
G&A expenses (excluding incentive and stock-based
	compensation expenses)		$	70,645		$	36,162		95%		$	34,641		104%
SG&A expenses			$	171,470		$	79,272		116%		$	73,260		134%
SG&A % from home sales				10.3%			10.9%		(0.6%)			11.7%		(1.4%)
Operating margin from home sales			$	157,954		$	103,455		53%		$	85,390		85%
Operating margin % from home sales				9.5%			14.3%		(4.8%)			13.6%		(4.1%)
Adjusted operating margin from home sales*			$	222,124		$	103,455		115%		$	85,390		160%
Adjusted operating margin % from home sales*				13.4%			14.3%		(0.9%)			13.6%		(0.2%)
Net new orders				2,699			978		176%			1,326		104%
Net new orders (dollar value)			$	1,194,094		$	494,064		142%		$	768,557		55%
Average active selling communities				579			184		215%			215		169%
Monthly sales absorption rate per community				1.6			1.8		(12%)			2.1		(24%)
Cancellation rate				22%			21%		1%			19%		3%
Gross cancellations				763			258		196%			302		153%
Backlog (homes)				5,611			1,711		228%			2,733		105%
Backlog (dollar value)			$	2,572,092		$	916,376		181%		$	1,655,496		55%
Land purchases (incl. seller financing)			$	212,210		$	172,320		23%		$	125,982		68%
Adjusted Homebuilding EBITDA*			$	297,581		$	150,726		97%		$	119,553		149%
Adjusted Homebuilding EBITDA Margin %*				17.8%			20.0%		(2.2%)			18.3%		(0.5%)
Homebuilding interest incurred			$	45,545		$	39,960		14%		$	42,304		8%
Homebuilding interest capitalized to inventories owned			$	44,713		$	39,594		13%		$	41,611		7%
Homebuilding interest capitalized to investments in JVs			$	832		$	366		127%		$	693		20%
Interest amortized to cost of sales (incl. cost of land sales)			$	46,857		$	39,354		19%		$	33,323		41%

 

 

			For the Year Ended
			December 31,			December 31,			Percentage
			2015			2014			or % Change
Select Operating Data			(Dollars in thousands)
Deliveries				7,237			4,956		46%
Average selling price			$	477		$	478		(0%)
Home sale revenues			$	3,449,047		$	2,366,754		46%
Gross margin % (including land sales)				22.2%			25.6%		(3.4%)
Gross margin % from home sales				22.4%			26.1%		(3.7%)
Adjusted gross margin % from home sales (excluding purchase
	accounting adjustments included in cost of home sales)*			24.3%			26.1%		(1.8%)
Adjusted gross margin % from home sales (excluding purchase
	accounting adjustments and interest amortized to cost of home sales)*			28.1%			31.1%		(3.0%)
Incentive and stock-based compensation expense			$	38,113		$	26,643		43%
Selling expenses			$	174,269		$	116,651		49%
G&A expenses (excluding incentive and stock-based
	compensation expenses)		$	178,328		$	132,567		35%
SG&A expenses			$	390,710		$	275,861		42%
SG&A % from home sales				11.3%			11.7%		(0.4%)
Operating margin from home sales			$	381,671		$	341,939		12%
Operating margin % from home sales				11.1%			14.4%		(3.3%)
Adjusted operating margin from home sales*			$	445,841		$	341,939		30%
Adjusted operating margin % from home sales*				13.0%			14.4%		(1.4%)
Net new orders				7,163			4,967		44%
Net new orders (dollar value)			$	3,650,329		$	2,410,206		51%
Average active selling communities				299			182		64%
Monthly sales absorption rate per community				2.0			2.3		(12%)
Cancellation rate				18%			17%		1%
Gross cancellations				1,533			1,004		53%
Backlog (homes)				5,611			1,711		228%
Backlog (dollar value)			$	2,572,092		$	916,376		181%
Land purchases (incl. seller financing)			$	515,315		$	585,735		(12%)
Adjusted Homebuilding EBITDA*			$	648,313		$	502,423		29%
Adjusted Homebuilding EBITDA Margin %*				18.5%			20.8%		(2.3%)
Homebuilding interest incurred			$	171,509		$	153,695		12%
Homebuilding interest capitalized to inventories owned			$	169,233		$	151,962		11%
Homebuilding interest capitalized to investments in JVs			$	2,276		$	1,733		31%
Interest amortized to cost of sales (incl. cost of land sales)			$	139,381		$	123,112		13%

 

			As of
			December 31,			December 31,			Percentage
			2015			2014			or % Change
Select Balance Sheet Data			(Dollars in thousands, except per share amounts)
Homebuilding cash (including restricted cash)			$	187,066		$	218,650		(14%)
Inventories owned			$	6,069,959		$	3,255,204		86%
Goodwill			$	933,360		$	―		―
Homesites owned and controlled				70,494			35,430		99%
Homes under construction				6,081			2,032		199%
Completed specs				1,325			515		157%
Homebuilding debt			$	3,487,699		$	2,113,301		65%
Stockholders' equity			$	3,861,436		$	1,676,688		130%
Adjusted stockholders' equity per share (reverse split adjusted,
	including if-converted preferred stock)*		$	31.84		$	23.10		38%
Total consolidated debt to book capitalization				49.5%			56.8%		(7.3%)
Adjusted net homebuilding debt to total adjusted
	book capitalization*			46.1%			53.1%		(7.0%)

 

PRO FORMA KEY STATISTICS AND FINANCIAL DATA¹

 

			As of or For the Three Months Ended
			December 31,			Pro Forma December 31,			Percentage		Pro Forma September 30,			Percentage
			2015			2014			or % Change		2015			or % Change
Select Operating Data			(Dollars in thousands)
Deliveries				3,795			3,964		(4%)			3,211		18%
Average selling price			$	437		$	395		11%		$	411		6%
Home sale revenues*			$	1,659,982		$	1,566,383		6%		$	1,318,885		26%
Pretax income*			$	126,177		$	219,531		(43%)		$	143,852		(12%)
Pretax income (excluding purchase accounting adjustments
	included in cost of home sales and merger and other one-time costs)*			235,196			219,531		7%			155,068		52%
Net new orders				2,699			2,525		7%			3,238		(17%)
Net new orders (dollar value)			$	1,194,094		$	1,030,718		16%		$	1,413,512		(16%)
Average active selling communities				579			520		11%			567		2%
Monthly sales absorption rate per community				1.6			1.6		(4%)			1.9		(18%)
Cancellation rate				22%			21%		1%			20%		2%
Gross cancellations				763			689		11%			797		(4%)
Backlog (homes)				5,611			4,328		30%			6,707		(16%)
Backlog (dollar value)			$	2,572,092		$	1,835,402		40%		$	3,014,957		(15%)
Land purchases (incl. seller financing)			$	212,210		$	357,766		(41%)		$	211,588		0%

 

			For the Year Ended
			Pro Forma December 31,			Pro Forma December 31,			Percentage
			2015			2014			or % Change
Select Operating Data			(Dollars in thousands)
Deliveries				12,560			12,633		(1%)
Average selling price			$	420		$	390		8%
Home sale revenues*			$	5,280,297		$	4,922,721		7%
Pretax income*			$	515,932		$	634,428		(19%)
Pretax income (excluding purchase accounting adjustments
	included in cost of home sales and merger and other one-time costs)*		$	641,839		$	634,428		1%
Net new orders				13,851			12,635		10%
Net new orders (dollar value)			$	5,921,611		$	5,030,389		18%
Average active selling communities				558			494		13%
Monthly sales absorption rate per community				2.1			2.1		(3%)
Cancellation rate				17%			18%		(1%)
Gross cancellations				2,890			2,786		4%
Backlog (homes)				5,611			4,328		30%
Backlog (dollar value)			$	2,572,092		$	1,835,402		40%
Land purchases (incl. seller financing)			$	875,118		$	1,123,966		(22%)

 

			As of
			December 31,			Pro Forma December 31,			Percentage
			2015			2014			or % Change
Select Balance Sheet Data			(Dollars in thousands)
Homebuilding cash (including restricted cash)*			$	187,066		$	744,997		(75%)
Inventories owned*			$	6,069,959		$	5,270,216		15%
Goodwill*			$	933,360		$	36,891		2,430%
Homesites owned and controlled				70,494			74,308		(5%)
Homes under construction				6,081			4,507		35%
Completed specs				1,325			1,246		6%
Homebuilding debt*			$	3,487,699		$	3,516,380		(1%)

 

¹All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.

*Please see "Reconciliation of Non-GAAP Financial Measures" beginning on page 15.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Three Months Ended December 31,								Year Ended December 31,
		2015				2014				2015				2014
		(Dollars in thousands, except per share amounts)
		(Unaudited)
Homebuilding:
Home sale revenues		$	1,659,982			$	724,342			$	3,449,047			$	2,366,754
Land sale revenues			14,329				29,302				47,364				44,424
Total revenues			1,674,311				753,644				3,496,411				2,411,178
Cost of home sales			(1,330,558	)			(541,615	)			(2,676,666	)			(1,748,954	)
Cost of land sales			(13,084	)			(29,596	)			(43,274	)			(43,841	)
Total cost of sales			(1,343,642	)			(571,211	)			(2,719,940	)			(1,792,795	)
Gross margin			330,669				182,433				776,471				618,383
Gross margin %			19.7	%			24.2	%			22.2	%			25.6	%
Selling, general and administrative expenses			(171,470	)			(79,272	)			(390,710	)			(275,861	)
Income (loss) from unconsolidated joint ventures			2,347				(326	)			1,966				(668	)
Other income (expense)			(45,435	)			(1,288	)			(62,177	)			(1,733	)
Homebuilding pretax income			116,111				101,547				325,550				340,121
Financial Services:
Revenues			23,887				7,300				43,702				25,320
Expenses			(13,821	)			(4,465	)			(26,763	)			(15,477	)
Financial services pretax income			10,066				2,835				16,939				9,843
Income before taxes			126,177				104,382				342,489				349,964
Provision for income taxes			(48,648	)			(39,738	)			(128,980	)			(134,099	)
Net income			77,529				64,644				213,509				215,865
Less: Net income allocated to preferred shareholder			―				(15,490	)			(32,997	)			(51,650	)
Less: Net income allocated to unvested restricted stock			(95	)			(87	)			(369	)			(297	)
Net income available to common stockholders		$	77,434			$	49,067			$	180,143			$	163,918
Income Per Common Share:
Basic		$	0.64			$	0.88			$	2.51			$	2.94
Diluted		$	0.56			$	0.80			$	2.26			$	2.68
Weighted Average Common Shares Outstanding:
Basic			121,132,872				55,633,527				71,713,747				55,737,548
Diluted			138,971,598				63,088,045				81,512,953				63,257,082
Weighted average additional common shares outstanding
if preferred shares converted to common shares			―				17,562,557				13,135,814				17,562,557
Total weighted average diluted common shares outstanding
if preferred shares converted to common shares			138,971,598				80,650,602				94,648,767				80,819,639

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		December 31,				December 31,
		2015				2014
		(Dollars in thousands)
ASSETS		(Unaudited)
Homebuilding:
Cash and equivalents		$	151,076			$	180,428
Restricted cash			35,990				38,222
Inventories:
Owned			6,069,959				3,255,204
Not owned			83,246				85,153
Investments in unconsolidated joint ventures			132,763				50,111
Deferred income taxes, net			396,194				276,402
Goodwill			933,360				―
Other assets			118,768				38,816
Total Homebuilding Assets			7,921,356				3,924,336
Financial Services:
Cash and equivalents			35,518				31,965
Restricted cash			22,914				1,295
Mortgage loans held for sale, net			325,770				174,420
Mortgage loans held for investment, net			22,704				14,380
Other assets			17,243				5,243
Total Financial Services Assets			424,149				227,303
Total Assets		$	8,345,505			$	4,151,639
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable		$	191,681			$	45,085
Accrued liabilities			478,793				223,783
Secured project debt and other notes payable			25,683				4,689
Senior notes payable			3,462,016				2,108,612
Total Homebuilding Liabilities			4,158,173				2,382,169
Financial Services:
Accounts payable and other liabilities			22,474				3,369
Mortgage credit facilities			303,422				89,413
Total Financial Services Liabilities			325,896				92,782
Total Liabilities			4,484,069				2,474,951
Equity:
Stockholders' Equity:
Preferred stock			―				1
Common stock			1,213				550
Additional paid-in capital			3,324,328				1,348,905
Accumulated earnings			535,890				327,232
Accumulated other comprehensive income, net of tax			5				―
Total Equity			3,861,436				1,676,688
Total Liabilities and Equity		$	8,345,505			$	4,151,639

 

INVENTORIES

 

		December 31,				December 31,
		2015				2014
		(Dollars in thousands)
		(Unaudited)
Inventories Owned:
Land and land under development		$	3,546,289			$	2,248,289
Homes completed and under construction			2,039,597				827,612
Model homes			484,073				179,303
Total inventories owned		$	6,069,959			$	3,255,204
Inventories Owned by Segment:
North		$	703,651			$	―
Southeast			1,753,301				1,033,401
Southwest			1,400,524				598,856
West			2,212,483				1,622,947
Total inventories owned		$	6,069,959			$	3,255,204

 

REGIONAL OPERATING DATA

 

During the 2015 third quarter, in connection with the transition planning related to the Merger, the Company began evaluating the business and allocating resources based on the post-merger homebuilding operating segments of CalAtlantic. The Company's homebuilding operating segments are grouped into four reportable segments: North (Baltimore, Chicago, Delaware, Indianapolis, Metro Washington, D.C., Minneapolis/St. Paul, New Jersey, Northern Virginia, Philadelphia and Atlanta); Southeast (Florida and the Carolinas); Southwest (Texas, Colorado and Nevada) and West (California and Arizona).  All prior periods have been restated to conform to CalAtlantic's new presentation.

					Three Months Ended December 31,
					2015						2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
New homes delivered:
	North					787		$	334			n/a		$	n/a			n/a			n/a
	Southeast					1,143			377			508			382			125%			(1%)
	Southwest					1,033			403			348			469			197%			(14%)
	West					832			662			619			593			34%			12%
			Consolidated total			3,795		$	437			1,475		$	491			157%			(11%)

 

					Year Ended December 31,
					2015						2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
New homes delivered:
	North					787		$	334			n/a		$	n/a			n/a			n/a
	Southeast					2,471			395			1,871			354			32%			12%
	Southwest					1,891			462			1,059			465			79%			(1%)
	West					2,088			640			2,026			598			3%			7%
			Consolidated total			7,237		$	477			4,956		$	478			46%			(0%)

 

 

					Three Months Ended December 31,
					2015						2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
Net new orders:
	North					556		$	348			n/a		$	n/a			n/a			n/a
	Southeast					831			384			395			385			110%			(0%)
	Southwest					715			416			240			509			198%			(18%)
	West					597			643			343			641			74%			0%
			Consolidated total			2,699		$	442			978		$	505			176%			(12%)

 

 

					Year Ended December 31,
					2015						2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
Net new orders:
	North					556		$	348			n/a		$	n/a			n/a			n/a
	Southeast					2,342			422			1,841			374			27%			13%
	Southwest					1,838			481			1,207			473			52%			2%
	West					2,427			653			1,919			600			26%			9%
			Consolidated total			7,163		$	510			4,967		$	485			44%			5%

REGIONAL OPERATING DATA (Continued)

 

					Three Months Ended December 31,						Year Ended December 31,
					2015		2014		% Change		2015		2014		% Change
Average number of selling communities
during the period:
	North				119		n/a		n/a		30		n/a		n/a
	Southeast				181		73		148%		111		74		50%
	Southwest				183		54		239%		87		50		74%
	West				96		57		68%		71		58		22%
			Consolidated total		579		184		215%		299		182		64%

 

					At December 31,
					2015						2014						% Change
					Homes			Dollar Value			Homes			Dollar Value			Homes			Dollar Value
					(Dollars in thousands)
Backlog:
	North					1,003		$	348,285			n/a		$	n/a			n/a			n/a
	Southeast					1,621			702,388			771			365,355			110%			92%
	Southwest					1,902			845,499			546			289,627			248%			192%
	West					1,085			675,920			394			261,394			175%			159%
			Consolidated total			5,611		$	2,572,092			1,711		$	916,376			228%			181%

 

 

					At December 31,
					2015		2014		% Change
Homesites owned and controlled:
	North				15,222		n/a		n/a
	Southeast				24,393		16,458		48%
	Southwest				16,151		6,944		133%
	West				14,728		12,028		22%
		Total (including joint ventures)			70,494		35,430		99%
	Homesites owned				52,583		28,972		81%
	Homesites optioned or subject to contract				15,972		6,260		155%
	Joint venture homesites				1,939		198		879%
		Total (including joint ventures)			70,494		35,430		99%
Homesites owned:
	Raw lots				8,814		8,162		8%
	Homesites under development				23,395		8,119		188%
	Finished homesites				9,488		7,210		32%
	Under construction or completed homes				9,092		3,104		193%
	Held for sale				1,794		2,377		(25%)
		Total			52,583		28,972		81%

PRO FORMA REGIONAL OPERATING DATA

					Three Months Ended December 31,
					2015						Pro Forma 2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
New homes delivered:
	North					787		$	334			890		$	335			(12%)			(0%)
	Southeast					1,143			377			1,083			331			6%			14%
	Southwest					1,033			403			1,165			369			(11%)			9%
	West					832			662			826			580			1%			14%
			Consolidated total			3,795		$	437			3,964		$	395			(4%)			11%

 

					Year Ended December 31,
					Pro Forma 2015						Pro Forma 2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
New homes delivered:
	North					2,727		$	339			2,711		$	332			1%			2%
	Southeast					3,732			360			3,664			315			2%			14%
	Southwest					3,552			406			3,636			364			(2%)			12%
	West					2,549			616			2,622			589			(3%)			5%
			Consolidated total			12,560		$	420			12,633		$	390			(1%)			8%

 

					Three Months Ended December 31,
					2015						Pro Forma 2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
Net new orders:
	North					556		$	348			493		$	338			13%			3%
	Southeast					831			384			797			336			4%			14%
	Southwest					715			416			773			396			(8%)			5%
	West					597			643			462			629			29%			2%
			Consolidated total			2,699		$	442			2,525		$	408			7%			8%

 

					Year Ended December 31,
					Pro Forma 2015						Pro Forma 2014						% Change
					Homes			ASP			Homes			ASP			Homes			ASP
					(Dollars in thousands)
Net new orders:
	North					2,757		$	339			2,664		$	338			3%			0%
	Southeast					3,976			369			3,627			331			10%			11%
	Southwest					4,029			413			3,784			377			6%			10%
	West					3,089			602			2,560			587			21%			3%
			Consolidated total			13,851		$	428			12,635		$	398			10%			8%

 

					Three Months Ended December 31,						Year Ended December 31,
					2015		Pro Forma 2014		% Change		Pro Forma 2015		Pro Forma 2014		% Change
Average number of selling
communities during the period:
	North				119		117		2%		117		109		7%
	Southeast				181		160		13%		173		155		12%
	Southwest				183		168		9%		183		155		18%
	West				96		75		28%		85		75		13%
			Consolidated total		579		520		11%		558		494		13%

PRO FORMA REGIONAL OPERATING DATA (Continued)

 

					At December 31,
					2015						Pro Forma 2014						% Change
					Homes			Dollar Value			Homes			Dollar Value			Homes			Dollar Value
					(Dollars in thousands)
Backlog:
	North					1,003		$	348,285			973		$	337,784			3%			3%
	Southeast					1,621			702,388			1,378			549,584			18%			28%
	Southwest					1,902			845,499			1,426			599,654			33%			41%
	West					1,085			675,920			551			348,380			97%			94%
			Consolidated total			5,611		$	2,572,092			4,328		$	1,835,402			30%			40%

 

					At December 31,
					2015		Pro Forma 2014		% Change
Homesites owned and controlled:
	North				15,222		15,933		(4%)
	Southeast				24,393		26,597		(8%)
	Southwest				16,151		18,326		(12%)
	West				14,728		13,452		9%
		Total (including joint ventures)			70,494		74,308		(5%)
	Homesites owned				52,583		53,742		(2%)
	Homesites optioned or subject to contract				15,972		19,745		(19%)
	Joint venture homesites				1,939		821		136%
		Total (including joint ventures)			70,494		74,308		(5%)
Homesites owned:
	Raw lots				8,814		11,924		(26%)
	Homesites under development				23,395		23,547		(1%)
	Finished homesites				9,488		8,522		11%
	Under construction or completed homes				9,092		7,194		26%
	Held for sale				1,794		2,555		(30%)
		Total			52,583		53,742		(2%)

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

	Three Months Ended
	December 31, 2015			Gross Margin %		December 31, 2014			Gross Margin %		September 30, 2015			Gross Margin %
	(Dollars in thousands)
Home sale revenues	$	1,659,982				$	724,342				$	626,008
Less: Cost of home sales		(1,330,558)					(541,615)					(467,358)
Gross margin from home sales		329,424		19.8%			182,727		25.2%			158,650		25.3%
Add: Purchase accounting adjustments included
in cost of home sales		64,170		3.9%			―					―
Adjusted gross margin from home sales, excluding purchase
accounting adjustments included in cost of home sales		393,594		23.7%			182,727		25.2%			158,650		25.3%
Add: Capitalized interest included in cost
of home sales		43,890		2.7%			36,370		5.0%			30,275		4.9%
Adjusted gross margin from home sales, excluding
purchase accounting adjustments and interest
amortized to cost of home sales	$	437,484		26.4%		$	219,097		30.2%		$	188,925		30.2%
Adjusted gross margin from home sales, excluding purchase
accounting adjustments included in cost of home sales	$	393,594		23.7%		$	182,727		25.2%		$	158,650		25.3%
Less: Selling, general and administrative expenses		(171,470)		(10.3%)			(79,272)		(10.9%)			(73,260)		(11.7%)
Adjusted operating margin from home sales, excluding
purchase accounting adjustments	$	222,124		13.4%		$	103,455		14.3%		$	85,390		13.6%