• Tri Pointe Homes, Inc. Reports 2022 Fourth Quarter and Record Full Year Results and Announces New Stock Repurchase Program

    ソース: Nasdaq GlobeNewswire / 21 2 2023 06:00:32   America/New_York

    Fourth Quarter Highlights

    -Diluted Earnings Per Share of $1.98, Up 49% Year-Over-Year-
    -New Home Deliveries of 2,016 for Home Sales Revenue of $1.5 Billion-
    -Homebuilding Gross Margin Percentage of 25.0%-
    -Pre-tax Margin of 18.0%-
    -Return on Average Equity of 22.5%*-

    INCLINE VILLAGE, Nev., Feb. 21, 2023 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE: TPH) today announced results for the fourth quarter ended December 31, 2022 and full year 2022. The Company also announced that its Board of Directors has approved a new stock repurchase program authorizing the repurchase of up to $250 million of common stock through December 31, 2023 (the “Repurchase Program”).

    “Tri Pointe Homes delivered another quarter of strong profitability for the fourth quarter of 2022, reporting all-time highs for quarterly home sales revenue of $1.5 billion, pre-tax income of $274 million, and diluted earnings per share of $1.98,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “The strong finish to the year resulted in a record-breaking full year performance on both the top and bottom lines for the second consecutive year. For the full year, home sales revenue increased 9% to $4.3 billion, pre-tax income increased 24% to $773 million and diluted earnings per share increased 35% to $5.54.”

    Mr. Bauer continued, “In addition to logistical challenges, our industry was also confronted with a challenging market in the back half of 2022, which found consumers facing a difficult home buying environment. In light of these circumstances, our team prioritized delivering our high margin homes in backlog and planning for success in 2023. This included analyzing price positioning and product offerings at both existing and future communities, as well as driving cost savings to produce more affordable price points. These strategies have already shown positive results in the early part of 2023. For the month of January, net new home orders were 421 with an absorption rate of 3.1 per community. To date in February, we have seen similarly strong results with absorption rates of approximately 4.0 net new home orders per community.”

    Mr. Bauer concluded, “We ended 2022 in a strong cash position and intend to use that capital to fund community count growth in 2023, which we anticipate will lead to more scale in each of our markets and drive better leverage and returns. We are encouraged by the early sales success we are seeing this year, while recognizing that this positive momentum could be impacted by further interest rate increases and the possibility of a recession. Long term, we remain extremely positive on the outlook for housing due to the lack of supply and favorable buyer demographics, and we feel Tri Pointe is in a strong position to capitalize on these factors.”

    Results and Operational Data for Fourth Quarter 2022 and Comparisons to Fourth Quarter 2021

    • Net income available to common stockholders was $203.0 million, or $1.98 per diluted share, compared to $147.4 million, or $1.33 per diluted share
    • Home sales revenue for the quarter was $1.5 billion, an increase of 25%
      • New home deliveries of 2,016 homes compared to 1,885 homes, an increase of 7%
      • Average sales price of homes delivered of $746,000 compared to $637,000
    • Homebuilding gross margin percentage of 25.0% compared to 24.4%, an increase of 60 basis points
      • Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 27.9%**
    • Selling, general and administrative (“SG&A”) expense as a percentage of homes sales revenue of 7.6% compared to 8.5%, a decrease of 90 basis points
    • Net new home orders of 444 compared to 1,424, a decrease of 69%
    • Active selling communities averaged 136.8 compared to 110.5, an increase of 24%
      • Net new home orders per average selling community decreased by 74% to 3.2 orders (1.1 monthly) compared to 12.9 orders (4.3 monthly)
      • Cancellation rate of 42% compared to 9%
    • Backlog units at quarter end of 1,472 homes compared to 3,158, a decrease of 53%
      • Dollar value of backlog at quarter end of $1.2 billion compared to $2.2 billion, a decrease of 48%
      • Average sales price in backlog at quarter end of $791,000 compared to $710,000, an increase of 11%
    • Ratios of debt-to-capital and net debt-to-net capital of 32.7% and 14.7%**, respectively, as of December 31, 2022
    • Ended fourth quarter of 2022 with total liquidity of $1.6 billion, including cash of $889.7 million and $691.1 million of availability under the Company’s unsecured revolving credit facility

    *        Return on average equity is calculated as net income available to common stockholders for the trailing twelve months divided by average stockholders’ equity for the trailing five quarters

    **       See “Reconciliation of Non-GAAP Financial Measures”

    Results and Operational Data for Full Year 2022 and Comparisons to Full Year 2021

    • Net income available to common stockholders was $576.1 million, or $5.54 per diluted share, compared to $469.3 million, or $4.12 per diluted share
    • Home sales revenue of $4.3 billion compared to $4.0 billion, an increase of 9%
      • New home deliveries of 6,063 homes compared to 6,188 homes, a decrease of 2%
      • Average sales price of homes delivered of $708,000 compared to $639,000, an increase of 11%
    • Homebuilding gross margin percentage of 26.4% compared to 24.9%, an increase of 150 basis points
      • Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 29.0%**
    • SG&A expense as a percentage of homes sales revenue of 9.0% compared to 9.6%, a decrease of 60 basis points
    • Net new home orders of 4,377 compared to 6,382, a decrease of 31%
    • Active selling communities averaged 124.7 compared to 111.8, an increase of 12%
      • Net new home orders per average selling community decreased by 40% to 35.1 orders (2.9 monthly) compared to 57.1 orders (4.8 monthly)
      • Cancellation rate of 19% compared to 8%
    • Repurchased 9,396,381 shares of common stock at an average price of $21.57 for an aggregate dollar amount of $202.6 million in the full year ended December 31, 2022

    **       See “Reconciliation of Non-GAAP Financial Measures”

    “Our aim is to optimize our business to current market conditions while taking advantage of our strong land pipeline to grow volume over time. We have implemented initiatives designed to improve absorptions, realign our cost structure, and maximize profitability and return on equity,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “Our operating teams have been hard at work obtaining lower costs at all of our projects with a goal of 10% to 20% in cost reductions by the end of 2023. Additionally, we are focused on improving cycle times to accelerate inventory turns and increase our delivery volume. While average cycle times have increased compared to pre-pandemic levels, our goal is to reduce cycle times by an average of four to six weeks by year end.”

    Outlook

    For the first quarter of 2023, the Company anticipates delivering between 750 and 850 homes at an average sales price between $720,000 and $730,000. The Company expects its homebuilding gross margin percentage to be in the range of 23.0% to 24.0% for the first quarter of 2023 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 14.0% to 14.5%. Lastly, the Company expects its effective tax rate for the first quarter of 2023 to be in the range of 26.0% to 27.0%.

    Stock Repurchase Program

    On February 15, 2023, our Board of Directors approved the Repurchase Program, which authorizes the repurchase of up to $250 million of Company common stock through December 31, 2023. Purchases of common stock pursuant to the Repurchase Program may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The Company is not obligated under the Repurchase Program to repurchase any specific number or dollar amount of shares of common stock, and it may modify, suspend or discontinue the Repurchase Program at any time. Company management will determine the timing and amount of any repurchases in its discretion based on a variety of factors, such as the market price of the Company’s common stock, corporate requirements, general market economic conditions, legal requirements and applicable tax effects.

    Earnings Conference Call

    The Company will host a conference call via live webcast for investors and other interested parties beginning at 7:00 a.m. Pacific Time (10:00 a.m. Eastern Time) on Tuesday, February 21, 2023. The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, Glenn Keeler, Chief Financial Officer, and Linda Mamet, Chief Marketing Officer.

    Interested parties can listen to the call live and view the related presentation slides on the internet through the Events & Presentations heading in the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Fourth Quarter 2022 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for one week following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13735368. An archive of the webcast will also be available on the Company’s website for a limited time.

    About Tri Pointe Homes®

    One of the largest homebuilders in the U.S., Tri Pointe Homes, Inc. (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms, and proven leadership of a national organization with the regional insights, longstanding community connections, and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, most recently in 2019. The company made Fortune magazine’s 2017 100 Fastest-Growing Companies list, was named as a Great Place to Work-Certified™ company in both 2021 and 2022, and was named on several Great Place to Work® Best Workplaces lists in 2022. For more information, please visit TriPointeHomes.com.

    Forward-Looking Statements

    Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations, particularly within California; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; the prices and availability of supply chain inputs, including raw materials and labor; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the occurrence of drought conditions in California; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.

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


    KEY OPERATIONS AND FINANCIAL DATA
    (dollars in thousands)
    (unaudited)

     Three Months Ended December 31, Year Ended December 31,
      2022   2021  Change %
    Change    		  2022   2021  Change %
    Change
    Operating Data:               
    Home sales revenue$1,504,177  $1,200,222  $303,955  25% $4,291,563  $3,955,154  $336,409  9%
    Homebuilding gross margin$376,756  $292,580  $84,176  29% $1,130,982  $982,917  $148,065  15%
    Homebuilding gross margin % 25.0%  24.4%  0.6%    26.4%  24.9%  1.5%  
    Adjusted homebuilding gross margin %* 27.9%  28.1% (0.2)%    29.0%  27.9%  1.1%  
    SG&A expense$114,726  $102,451  $12,275  12% $387,509  $379,377  $8,132  2%
    SG&A expense as a % of home sales revenue 7.6%  8.5% (0.9)%    9.0%  9.6% (0.6)%  
    Net income available to common stockholders$202,973  $147,440  $55,533  38% $576,060  $469,267  $106,793  23%
    Adjusted EBITDA*$324,716  $257,365  $67,351  26% $929,081  $801,340  $127,741  16%
    Interest incurred$35,294  $24,766  $10,528  43% $124,529  $92,783  $31,746  34%
    Interest in cost of home sales$38,036  $23,991  $14,045  59% $106,595  $101,176  $5,419  5%
                    
    Other Data:               
    Net new home orders 444   1,424   (980) (69)%  4,377   6,382   (2,005) (31)%
    New homes delivered 2,016   1,885   131  7%  6,063   6,188   (125) (2)%
    Average sales price of homes delivered$746  $637  $109  17% $708  $639  $69  11%
    Cancellation rate 42%  9%  33%    19%  8%  11%  
    Average selling communities 136.8   110.5   26.3  24%  124.7   111.8   12.9  12%
    Selling communities at end of period 136   112   24  21%        
    Backlog (estimated dollar value)$1,164,678  $2,242,159  $(1,077,481) (48)%        
    Backlog (homes) 1,472   3,158   (1,686) (53)%        
    Average sales price in backlog$791  $710  $81  11%        
                    
     December 31,
    2022    		 December 31,
    2021    		 Change          
    Balance Sheet Data:               
    Cash and cash equivalents$889,664  $681,528  $208,136           
    Real estate inventories$3,173,849  $3,054,743  $119,106           
    Lots owned or controlled 33,794   41,675   (7,881)          
    Homes under construction (1) 2,373   3,632   (1,259)          
    Homes completed, unsold 288   27   261           
    Total debt, net$1,378,051  $1,337,723  $40,328           
    Stockholders' equity$2,832,389  $2,447,621  $384,768           
    Book capitalization$4,210,440  $3,785,344  $425,096           
    Ratio of debt-to-capital 32.7%  35.3% (2.6)%          
    Ratio of net debt-to-net-capital* 14.7%  21.1% (6.4)%          

    _____________________________________
    (1)  Homes under construction included 78 and 85 models at December 31, 2022 and December 31, 2021, respectively.
    *    See “Reconciliation of Non-GAAP Financial Measures”


    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share amounts)

     December 31,
    2022    		 December 31,
    2021
    Assets(unaudited)  
    Cash and cash equivalents$889,664 $681,528
    Receivables 169,449  116,996
    Real estate inventories 3,173,849  3,054,743
    Investments in unconsolidated entities 129,837  118,095
    Goodwill and other intangible assets, net 156,603  156,603
    Deferred tax assets, net 34,851  57,096
    Other assets 165,687  151,162
    Total assets$4,719,940 $4,336,223
        
    Liabilities   
    Accounts payable$62,324 $84,854
    Accrued expenses and other liabilities 443,034  466,013
    Loans payable 287,427  250,504
    Senior notes 1,090,624  1,087,219
    Total liabilities 1,883,409  1,888,590
        
    Commitments and contingencies   
        
    Equity   
    Stockholders' Equity:   
    Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
       shares issued and outstanding as of December 31, 2022 and
       December 31, 2021, respectively    		 —  —
    Common stock, $0.01 par value, 500,000,000 shares authorized;
       101,017,708 and 109,644,474 shares issued and outstanding at
       December 31, 2022 and December 31, 2021, respectively    		 1,010  1,096
    Additional paid-in capital 3,685  91,077
    Retained earnings 2,827,694  2,355,448
    Total stockholders' equity 2,832,389  2,447,621
    Noncontrolling interests 4,142  12
    Total equity 2,836,531  2,447,633
    Total liabilities and equity$4,719,940 $4,336,223


    CONSOLIDATED STATEMENT OF OPERATIONS
    (in thousands, except share and per share amounts)
    (unaudited)

     Three Months Ended December 31, Year Ended December 31,
      2022   2021   2022   2021 
    Homebuilding:       
    Home sales revenue$1,504,177  $1,200,222  $4,291,563  $3,955,154 
    Land and lot sales revenue 771   5,496   5,108   13,016 
    Other operations revenue 674   650   2,695   2,619 
    Total revenues 1,505,622   1,206,368   4,299,366   3,970,789 
    Cost of home sales 1,127,421   907,642   3,160,581   2,972,237 
    Cost of land and lot sales —   5,667   2,075   11,585 
    Other operations expense 665   439   2,685   2,550 
    Sales and marketing 62,293   48,390   175,005   179,214 
    General and administrative 52,433   54,061   212,504   200,163 
    Homebuilding income from operations 262,810   190,169   746,516   605,040 
    Equity in income (loss) of unconsolidated entities 346   (24)  312   (96)
    Other income, net 1,455   97   2,307   525 
    Homebuilding income before income taxes 264,611   190,242   749,135   605,469 
    Financial Services:       
    Revenues 17,182   3,644   49,167   11,446 
    Expenses 7,679   1,782   25,136   6,292 
    Equity in income of unconsolidated entities —   4,453   46   15,039 
    Financial services income before income taxes 9,503   6,315   24,077   20,193 
    Income before income taxes 274,114   196,557   773,212   625,662 
    Provision for income taxes (68,719)  (49,117)  (190,803)  (156,395)
    Net income 205,395   147,440   582,409   469,267 
    Net income attributable to noncontrolling interests (2,422)  —   (6,349)  — 
    Net income available to common stockholders$202,973  $147,440  $576,060  $469,267 
    Earnings per share       
    Basic$2.01  $1.34  $5.60  $4.16 
    Diluted$1.98  $1.33  $5.54  $4.12 
    Weighted average shares outstanding       
    Basic 100,947,993   109,911,768   102,898,423   112,836,051 
    Diluted 102,456,279   111,126,846   104,003,652   113,809,292 


    MARKET DATA BY REPORTING SEGMENT & STATE
    (dollars in thousands)
    (unaudited)

     Three Months Ended December 31, Year Ended December 31,
     2022 2021 2022 2021
     New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price    		 New
    Homes
    Delivered    		 Average
    Sales
    Price
    Arizona266 $774 218 $703 629 $761 788 $677
    California812  820 745  639 2,541  751 2,608  664
    Nevada159  796 146  718 522  751 527  637
    Washington36  888 73  989 208  962 296  986
    West total1,273  809 1,182  682 3,900  764 4,219  686
    Colorado121  745 77  650 322  716 231  606
    Texas338  614 360  509 1,126  553 1,081  491
    Central total459  649 437  534 1,448  590 1,312  512
    Carolinas(1)194  468 50  429 346  466 114  403
    Washington D.C. Area(2)90  951 216  643 369  808 543  634
    East total284  621 266  603 715  642 657  594
    Total2,016 $746 1,885 $637 6,063 $708 6,188 $639
                    
     Three Months Ended December 31, Year Ended December 31,
     2022 2021 2022 2021
     Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities    		 Net New
    Home
    Orders    		 Average
    Selling
    Communities
    Arizona3  13.0 153  11.7 487  13.4 829  13.8
    California226  55.5 521  40.0 1,803  49.3 2,386  39.2
    Nevada4  6.8 149  10.0 321  7.5 717  10.9
    Washington11  5.0 57  5.8 114  3.3 286  5.7
    West total244  80.3 880  67.5 2,725  73.5 4,218  69.6
    Colorado8  6.5 71  7.8 188  7.4 289  6.2
    Texas81  30.0 274  21.7 772  24.8 1,219  22.3
    Central total89  36.5 345  29.5 960  32.2 1,508  28.5
    Carolinas(1)73  15.2 91  4.7 445  12.2 220  3.5
    Washington D.C. Area(2)38  4.8 108  8.8 247  6.8 436  10.2
    East total111  20.0 199  13.5 692  19.0 656  13.7
    Total444  136.8 1,424  110.5 4,377  124.7 6,382  111.8


    MARKET DATA BY REPORTING SEGMENT & STATE, continued
    (dollars in thousands)
    (unaudited)

     As of December 31, 2022 As of December 31, 2021
     Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price    		 Backlog
    Units    		 Backlog
    Dollar
    Value    		 Average
    Sales
    Price
    Arizona378 $316,233 $837 520 $401,257 $772
    California298  289,659  972 1,036  774,901  748
    Nevada125  102,985  824 326  237,712  729
    Washington35  27,075  774 129  133,317  1,033
    West total836  735,952  880 2,011  1,547,187  769
    Colorado50  39,988  800 184  134,831  733
    Texas282  186,001  660 636  337,232  530
    Central total332  225,989  681 820  472,063  576
    Carolinas(1)220  102,775  467 121  55,205  456
    Washington D.C. Area(2)84  99,962  1,190 206  167,704  814
    East total304  202,737  667 327  222,909  682
    Total1,472 $1,164,678 $791 3,158 $2,242,159 $710
                
     December 31,
    2022    		 December 31,
    2021    		        
    Lots Owned or Controlled:           
    Arizona2,901  4,607        
    California11,399  15,091        
    Nevada1,634  2,161        
    Washington827  1,010        
    West total16,761  22,869        
    Colorado1,600  1,683        
    Texas10,361  12,297        
    Central total11,961  13,980        
    Carolinas(1)3,857  3,458        
    Washington D.C. Area(2)1,215  1,368        
    East total5,072  4,826        
    Total33,794  41,675        
                
     December 31,
    2022    		 December 31,
    2021    		        
    Lots by Ownership Type:           
    Lots owned18,762  22,136        
    Lots controlled (1)15,032  19,539        
    Total33,794  41,675        

    __________
    (1) As of December 31, 2022 and 2021, lots controlled included lots that were under land option contracts or purchase contracts. As of December 31, 2022 and 2021, lots controlled for Central include 3,325 and 2,950 lots, respectively, and lots controlled for East include 141 and 179 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    (unaudited)

    In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

    The following tables reconcile homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP financial measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage and non-cash impairments and lot option abandonments, as applicable, have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who may adjust gross margins in a similar fashion.

     Three Months Ended December 31,
      2022  %  2021  %
     (dollars in thousands)
    Home sales revenue$1,504,177  100.0% $1,200,222  100.0%
    Cost of home sales 1,127,421  75.0%  907,642  75.6%
    Homebuilding gross margin 376,756  25.0%  292,580  24.4%
    Add:  interest in cost of home sales 38,036  2.5%  23,991  2.0%
    Add:  impairments and lot option abandonments 4,252  0.3%  20,125  1.7%
    Adjusted homebuilding gross margin$419,044  27.9% $336,696  28.1%
    Homebuilding gross margin percentage 25.0%    24.4%  
    Adjusted homebuilding gross margin percentage 27.9%    28.1%  


     Year Ended December 31,
      2022  %  2021  %
     (dollars in thousands)
    Home sales revenue$4,291,563  100.0% $3,955,154  100.0%
    Cost of home sales 3,160,581  73.6%  2,972,237  75.1%
    Homebuilding gross margin 1,130,982  26.4%  982,917  24.9%
    Add:  interest in cost of home sales 106,595  2.5%  101,176  2.6%
    Add:  impairments and lot option abandonments 8,747  0.2%  20,838  0.5%
    Adjusted homebuilding gross margin$1,246,324  29.0% $1,104,931  27.9%
    Homebuilding gross margin percentage 26.4%    24.9%  
    Adjusted homebuilding gross margin percentage 29.0%    27.9%  


    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
    (unaudited)

    The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.

     December 31, 2022 December 31, 2021
    Loans payable$287,427  $250,504 
    Senior notes 1,090,624   1,087,219 
    Total debt 1,378,051   1,337,723 
    Stockholders’ equity 2,832,389   2,447,621 
    Total capital$4,210,440  $3,785,344 
    Ratio of debt-to-capital(1) 32.7%  35.3%
        
    Total debt$1,378,051  $1,337,723 
    Less: Cash and cash equivalents (889,664)  (681,528)
    Net debt 488,387   656,195 
    Stockholders’ equity 2,832,389   2,447,621 
    Net capital$3,320,776  $3,103,816 
    Ratio of net debt-to-net capital(2) 14.7%  21.1%

    __________
    (1)  The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.
    (2)  The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity.


    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)

    (unaudited)

    The following table calculates the non-GAAP financial measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income available to common stockholders, as reported and prepared in accordance with GAAP. EBITDA means net income available to common stockholders before (a) interest expense, (b) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation and (f) real estate inventory impairments and lot option abandonments. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company’s ability to service debt and obtain financing.

     Three Months Ended December 31, Year Ended December 31,
      2022   2021   2022   2021 
     (in thousands)
    Net income available to common stockholders$202,973  $147,440  $576,060  $469,297 
    Interest expense:       
    Interest incurred 35,294   24,766   124,529   92,783 
    Interest capitalized (35,294)  (24,766)  (124,529)  (92,783)
    Amortization of interest in cost of sales 38,042   23,991   106,681   101,448 
    Provision for income taxes 68,719   49,117   190,803   156,395 
    Depreciation and amortization 9,369   8,323   28,010   32,421 
    EBITDA 319,103   228,871   901,554   759,561 
    Amortization of stock-based compensation 2,040   8,369   18,780   20,941 
    Real estate inventory impairments and lot option abandonments 3,573   20,125   8,747   20,838 
    Adjusted EBITDA$324,716  $257,365  $929,081  $801,340 

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