What changed in this filing

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Item 1. Financial Statements

2020-10-29 compared with 2020-07-29 · 95 added, 92 removed, 324 unchanged (37% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of June 30, 2020 and December 31, 2019

As of September 30, 2020 and December 31, 2019

(in thousands, except share amounts)

September 30,

Cash and cash equivalents

14 unchanged sentences

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none outstanding

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 33,350,633 and 33,067,375 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 33,350,633 and 33,067,375 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

5 unchanged sentences

Unaudited Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2020 and 2019

For the Three and Nine Months Ended September 30, 2020 and 2019

(in thousands, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Homebuilding revenues

2 unchanged sentences

Total homebuilding revenues

Financial services revenue

Financial services revenues

Total revenues

2 unchanged sentences

( 1,718,545 )

( 1,407,519 )

Cost of land sales and other revenues

1 unchanged sentence

( 1,737,142 )

( 1,413,634 )

Financial services costs

2 unchanged sentences

Inventory impairment and other

Other expense

Other income (expense)

Income before income tax expense

5 unchanged sentences

Unaudited Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

For the Nine Months Ended September 30, 2020 and 2019

( in thousands )

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

22 unchanged sentences

Payments on revolving credit facilities

( 1,108,500 )

Proceeds from issuance of senior notes due 2027

3 unchanged sentences

Debt issuance costs

Net proceeds from mortgage repurchase facilities

Net payments on mortgage repurchase facilities

Net proceeds from issuances of common stock

1 unchanged sentence

Repurchases of common stock under stock repurchase program

Net cash provided by (used in) financing activities

Net increase (decrease)

Net cash (used in) provided by financing activities

Cash and cash equivalents and Restricted cash

10 unchanged sentences

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2020 and 2019

For the Three and Nine Months Ended September 30, 2020 and 2019

( in thousands )

Three Months Ended June 30, 2020 and 2019

Three Months Ended September 30, 2020 and 2019

Additional Paid-In Capital

1 unchanged sentence

Total Stockholders'

Balance at March 31, 2020

Issuance of common stock

Vesting of restricted stock units

Withholding of common stock upon vesting of restricted stock units

Balance at June 30, 2020

Stock-based compensation expense

Balance at September 30, 2020

Balance at June 30, 2019

Balance at March 31, 2019

Issuance of common stock

2 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2019

Six Months Ended June 30, 2020 and 2019

Balance at September 30, 2019

Nine Months Ended September 30, 2020 and 2019

Additional Paid-In Capital

2 unchanged sentences

Balance at December 31, 2019

Issuance of common stock

Vesting of restricted stock units

1 unchanged sentence

Stock-based compensation expense

Balance at June 30, 2020

Balance at September 30, 2020

Balance at December 31, 2018

4 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2019

Balance at September 30, 2019

See Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2020

September 30, 2020

Basis of Presentation

16 unchanged sentences

The COVID-19 pandemic has led to adverse impacts on the U.S.

and global economies and created uncertainty regarding potential impacts to our operations and customer demand.

and global economies and initially created uncertainty regarding potential impacts to our operations and customer demand.

Commencing in March 2020, numerous state and local municipalities issued public health orders with varying expiration dates requiring the closure of nonessential businesses, as well as ordering individuals to stay at home and/or shelter in place whenever possible.

1 unchanged sentence

During the latter half of the second quarter of 2020, state and local municipalities in the majority of our markets began to lift the most stringent of the public health restrictions and numerous nonessential businesses were allowed to reopen.

However, recent increases in COVID-19 positive cases throughout the United States during the later weeks of June and into July of 2020 have resulted in the slowing or altering of “re-opening” plans in numerous states, including many in which we conduct business.

As of the date of this filing, we are able to build and sell homes in all of our markets .

As of the date of this filing and throughout the third quarter of 2020, we are and were able to build and sell homes in all of our markets .

Principles of Consolidation

8 unchanged sentences

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) .

The standard changes the accounting for credit losses for most financial assets and certain

other instruments.

Credit losses that have historically been accounted for on an incurred loss basis are now accounted for using an estimate of lifetime expected credit losses.

The standard changes the accounting for credit losses for most financial assets and certain other instruments.

Credit losses that have historically been accounted for on an incurred loss basis are now accounted for using an

estimate of lifetime expected credit losses.

This generally results in earlier recognition of allowances for credit losses.

25 unchanged sentences

 West (California and Washington)

 Mountain (Colorado, Nevada and Utah)

 Mountain (Arizona, Colorado, Nevada, and Utah)

 Southeast (Georgia, North Carolina, South Carolina and Tennessee)

3 unchanged sentences

The following table summarizes total revenue and income before income tax expense by segment (in thousands ):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Century Complete

6 unchanged sentences

The following table summarizes total assets by operating segment (in thousands):

September 30,

Century Complete

2 unchanged sentences

Inventories included the following (in thousands):

September 30,

Homes under construction

6 unchanged sentences

Inspire is a full-service mortgage lender and primarily originates mortgage loans for our homebuyers.

Inspire sells substantially all of the loans it originates and their related servicing rights in the secondary mortgage market within a short period of time after origination, generally within 30 days.

Inspire sells substantially all of the loans it originates either as whole loans, or with servicing retained, in the secondary mortgage market within a short period of time after origination, generally within 30 days.

Inspire primarily finances these loans using its mortgage repurchase facilities.

Mortgage loans in process for which interest rates were committed to borrowers totaled approximately $ 124.3 million and $ 37.6 million at June 30, 2020 and December 31, 2019, respectively, and carried a weighted average interest rate of approximately 3.8 % and 3.9 %, respectively.

As of June 30, 2020 and December 31, 2019, Inspire had mortgage loans held for sale with an aggregate fair value of

$ 219.6 million and $ 185.2 million, respectively, and an aggregate outstanding principal balance of $ 210.3 million and $ 179.3 million, respectively.

Mortgage loans held-for-sale, including the rights to service the mortgage loans, as well as the derivative instrument used to economically hedge our interest rate risk, which are typically forward commitments on mortgage backed securities, are carried at fair value and changes in fair value are reflected in financial services revenue on the condensed consolidated statement of operations.

Mortgage loans in process for which interest rates were committed to borrowers totaled approximately $ 193.1 million and $ 37.6 million at September 30, 2020 and December 31, 2019, respectively, and carried a weighted average interest rate of approximately

2.9 % and 3.9 %, respectively.

As of September 30, 2020 and December 31, 2019, Inspire had mortgage loans held for sale with an aggregate fair value of $ 187.5 million and $ 185.2 million, respectively, and an aggregate outstanding principal balance of $ 179.9 million and $ 179.3 million, respectively.

Management believes carrying loans held-for-sale and the derivative instruments used to economically hedge them at fair value improves financial reporting by more accurately reflecting the underlying transaction.

2 unchanged sentences

Prepaid expenses and other assets included the following (in thousands):

September 30,

Prepaid insurance

Lot option and escrow deposits

Performance deposits

Deferred financing costs on revolving line of credit, net

3 unchanged sentences

Other assets and prepaid expenses

Mortgage loans held for investment and derivative assets

Amortizable intangible assets, net

Derivative assets

Total prepaid expenses and other assets

2 unchanged sentences

Accrued expenses and other liabilities included the following (in thousands):

September 30,

Earnest money deposits

5 unchanged sentences

Income taxes payable

Liability for product financing arrangements and other

Other accrued liabilities

Total accrued expenses and other liabilities

2 unchanged sentences

We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal model that incorporates historical payment trends and adjust the amounts recorded, if necessary.

Based on warranty payment trends relative to our estimates at the time of home closing, we reduced our warranty reserve by $ 0.2 million and increased our reserve by $ 0.2 million during the three months ended June 30, 2020 and 2019, respectively.

We reduced our warranty reserve by $ 1.3 million during the six months ended June 30, 2020, compared to a $ 0.2 million increase during the same period in 2019.

adjustments are included in cost of home sales revenues on our consolidated statements of operations.

Changes in our warranty accrual for the three and six months ended June 30, 2020 and 2019 are detailed in the table below (in thousands) :

Three Months Ended June 30,

Six Months Ended June 30,

Based on warranty payment trends relative to our estimates at the time of home closing, we did no t reduce our warranty reserve during the three months ended September 30, 2020, and reduced our warranty reserve by $ 0.6 million during the three months ended September 30, 2019.

We reduced our warranty reserve by $ 1.3 million and $ 0.4 million during the nine months ended September 30, 2020 and 2019, respectively.

These adjustments are included in cost of home sales revenues on our consolidated statements of operations.

Changes in our warranty accrual for the three and nine months ended September 30, 2020 and 2019 are detailed in the table below (in thousands) :

Three Months Ended September 30,

Nine Months Ended September 30,

Beginning balance

2 unchanged sentences

Ending balance

Our outstanding debt obligations included the following as of June 30, 2020 and December 31, 2019 (in thousands):

Our outstanding debt obligations included the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30,

6.750 % senior notes, due May 2027 (1)

4 unchanged sentences

Mortgage repurchase facilities

(1) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes.

(1) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest expense over the respective terms of the senior notes.

Revolving Line of Credit

We are party to an Amended and Restated Credit Agreement with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, the lenders party thereto and certain of our subsidiaries, which, as amended most recently on December 13, 2019, provides us with a revolving line of credit of up to $ 640.0 million, and unless terminated earlier, will mature on April 30, 2023 .

Under the terms of the Amended and Restated Credit Agreement, we may request a twelve-month extension of the maturity date.

We are party to an Amended and Restated Credit Agreement with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, the lenders party thereto and certain of our subsidiaries (which we refer to as the “Amended and Restated Credit Agreement”), which, as amended most recently on December 13, 2019, provides us with a revolving line of credit of up to $ 640.0 million, and unless terminated earlier, will mature on April 30, 2023 .

Our obligations under the Amended and Restated Credit Agreement are guaranteed by certain of our subsidiaries.

2 unchanged sentences

Borrowings under the Amended and Restated Credit Agreement bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.60 % and 3.10 % per annum, or, at the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.60 % and 2.10 % per annum.

As of June 30, 2020, we had no amounts outstanding under the credit facility and were in compliance with all covenants.

As of September 30, 2020 and December 31, 2019, we had no amounts and $ 68.7 million outstanding under the credit facility, respectively, and were in compliance with all covenants.

Mortgage Repurchase Facilities – Financial Services

3 unchanged sentences

Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type.

As of June 30, 2020, we had $ 197.5 million outstanding under these repurchase facilities and were in compliance with all covenants thereunder.

During the three months ended June 30, 2020 and 2019, we incurred interest expense on the repurchase facilities of $ 0.5 million and $ 0.9 million, respectively, which are included in financial services costs on our condensed consolidated statements of operations.

During the six months ended June 30, 2020 and 2019, we incurred interest expense on the repurchase facilities of $ 1.3 million and $ 1.5 million, respectively.

As of September 30, 2020 and December 31, 2019, we had $ 173.4 million and $ 174.1 million outstanding under these repurchase facilities, respectively, and were in compliance with all covenants thereunder.

During the three months ended September 30, 2020 and 2019, we incurred interest expense on the repurchase facilities of $ 0.8 million and $ 0.6 million, respectively, which are included in financial services costs on our condensed consolidated statements of operations.

During the nine months ended September 30, 2020 and 2019, we incurred interest expense on the repurchase facilities of $ 2.0 million and $ 2.1 million, respectively.

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed.

As our qualifying assets exceeded our outstanding debt during the six months ended June 30, 2020 and 2019, we capitalized all interest costs incurred during these periods, except for interest incurred on our mortgage repurchase facilities.

As our qualifying assets exceeded our outstanding debt during the three and nine months ended September 30, 2020 and 2019, we capitalized all interest costs incurred during these periods, except for interest incurred on our mortgage repurchase facilities.

Our interest costs are as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Interest capitalized beginning of period

4 unchanged sentences

Our 2020 estimated annual effective tax rate of 23.4 % is driven by our blended federal and state statutory rate of 25.1 %, and certain other permanent differences between GAAP and tax which decreased our rate by 1.7 %.

For the six months ended June 30, 2020, our estimated annual rate of 23.4 % was impacted by discrete items which had a net impact of decreasing our rate by 0.1 %, including excess tax benefits for vested stock-based compensation .

For the three months ended June 30, 2020 and 2019, we recorded income tax expense of $ 11.7 million and $ 5.3 million, respectively.

For the six months ended June 30, 2020 and 2019, we recorded income tax expense of $ 19.6 million and $ 11.2 million, respectively .

For the nine months ended September 30, 2020, our estimated annual rate of 23.4 % was impacted by discrete items which had a net impact of decreasing our rate by 0.1 %, including excess tax benefits for vested stock-based compensation .

For the three months ended September 30, 2020 and 2019, we recorded income tax expense of $ 15.1 million and $ 7.8 million, respectively.

For the nine months ended September 30, 2020 and 2019, we recorded income tax expense of $ 34.7 million and $ 19.0 million, respectively .

Fair Value Disclosures

6 unchanged sentences

The following table presents carrying values and estimated fair values of financial instruments (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

11 unchanged sentences

(2) The mortgage loans held for sale are carried at fair value, which is based on quoted market prices for committed mortgage loans.

(3) Derivative instruments are carried at fair value and based on market prices for similar instruments.

Changes in fair value are reflected in financial services revenue on the condensed consolidated statement of operations.

(3) Derivative instruments are carried at fair value and based on market prices for similar instruments and are related to our financial services segment.

Changes in fair value are reflected in financial services revenue on the condensed consolidated statements of operations.

Derivative assets are presented within prepaid expenses and other assets on the condensed consolidated balance sheets.

2 unchanged sentences

(5) Carrying amounts include any associated unamortized deferred financing costs, premiums and discounts.

As of June 30, 2020, these amounts totaled $ 5.4 million and $ 3.5 million for the 6.750 % senior notes and 5.875 % senior notes, respectively.

As of September 30, 2020, these amounts totaled $ 5.3 million and $ 3.4 million for the 6.750 % senior notes and 5.875 % senior notes, respectively.

As of December 31, 2019, these amounts totaled $ 5.7 million and $ 3.9 million for the 6.750 % senior notes and 5.875 % senior notes, respectively.

(6) Carrying amount approximates fair value due to short-term nature and interest rate terms.

(7) Insurance premium notes including in other financing obligations bore interest rates ranging from 3.278 % to 3.240 % during the periods ending June 30, 2020 and December 31, 2019, which approximated prevailing market rates for similar obligations at each period.

During the three months ended June 30, 2020, we determined that inventory with a carrying value before impairment of $ 6.6 million within one community in our Texas segment was not recoverable.

Accordingly, we recognized an impairment charge of $ 0.9 million to reflect the estimated fair value of the community of $ 5.7 million.

During the six months ended June 30, 2020, total impairment charges of $ 1.7 million were recorded, which includes $ 0.8 million of impairment charges related to one community in our Century Complete segment which was recorded during the three months ended March 31, 2020.

(7) Insurance premium notes included in in other financing obligations bore interest rates ranging from 3.278 % to 3.240 % during the periods ending September 30, 2020 and December 31, 2019, respectively, which approximated prevailing market rates for similar obligations at each period.

During the nine months ended September 30, 2020, total impairment charges of $ 1.7 million were recorded, which includes $ 0.8 million of impairment charges related to one community in our Century Complete segment which was recorded during the three months ended March 31, 2020, and $ 0.9 million of impairment charges related to one community in our Texas segment which was recorded during the three months ended June 30, 2020.

No impairment charges were recorded in the three months ended September 30, 2020.

The estimated fair value of communities are determined through a discounted cash flow approach utilizing Level 3 inputs.

Because the full magnitude and duration of the COVID-19 pandemic is uncertain and difficult to predict, changes in our cash flow projections may change our conclusions on the recoverability of inventory in the future.

Changes in our cash flow projections in future periods related to these communities may change our conclusions on the recoverability of inventory in the future.

The carrying amount of cash and cash equivalents approximates fair value.

1 unchanged sentence

Stock-Based Compensation

During the three and six months ended June 30, 2020, we granted restricted stock units (which we refer to as “RSUs”) covering 0.1 million and 0.4 million shares of common stock, respectively, with a grant date fair value of $ 27.64 and $ 30.44 per share, respectively, that vest over a three year period.

During the three and six months ended June 30, 2020, we also granted performance share units (which we refer to as “PSUs”) covering up to 0.3 million shares of common stock, assuming maximum level of performance, with a grant date fair value of $ 26.38 per share that are subject to both service and performance vesting conditions.

The quantity of shares that will vest under the PSUs ranges from 0 % to 250 % of a targeted number of shares for each participant and will be determined based on an achievement of a three year pre-tax income performance goal.

During the three months ended September 30, 2020 and 2019, we did no t grant any restricted stock units (which we refer to as “RSUs”) or performance share units (which we refer to as “PSUs”).

During the nine months ended September 30, 2020 and 2019, we granted RSUs covering 0.4 million and 0.6 million shares of common stock, respectively, with a grant date fair value of $ 30.43 per share and $ 23.85 per share, respectively, that vest over a three year period.

During the nine months ended September 30, 2020 and 2019, we also granted PSUs covering up to 0.3 million and 0.3 million shares of common stock, respectively, assuming maximum level of performance, with a grant date fair value of $ 26.38 per share and $ 22.01 per share, respectively.

Granted PSUs are subject to both service and performance vesting conditions.

The quantity of shares that will ultimately vest for the PSUs ranges from 0 % to 250 % of a targeted number of shares for each participant and will be determined based on an achievement of a three year pre-tax income performance goal.

A summary of our outstanding RSUs and PSUs, assuming current estimated level of performance achievement, are as follows (in thousands, except years):

As of June 30, 2020

As of September 30, 2020

Unvested units

1 unchanged sentence

Remaining period to recognize compensation cost

During the three months ended June 30, 2020 and 2019, we recognized stock-based compensation expense of $ 6.9 million and $ 3.9 million, respectively.

During the six months ended June 30, 2020 and 2019, we recognized stock-based compensation expense of $ 8.6 million and $ 7.5 million, respectively.

During the three months ended September 30, 2020 and 2019, we recognized stock-based compensation expense of $ 5.8 million and $ 3.9 million, respectively.

During the nine months ended September 30, 2020 and 2019, we recognized stock-based compensation expense of $ 14.4 million and $ 11.4 million, respectively.

Stock-based compensation expense is included in selling, general, and administrative expense on our condensed consolidated statements of operations.

During the three months ended June 30, 2020, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards.

Accordingly, our estimate of the number of shares which will ultimately vest under our PSU awards increased by 0.2 million, and we recorded a cumulative catch-up adjustment to increase stock-based compensation expense of $ 2.9 million ($ 2.2 million net of tax), or $ 0.07 per share (basic and diluted) for the three months ended June 30, 2020.

During the three months ended September 30, 2020, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards.

Accordingly, our estimate of the number of shares which will ultimately vest under our PSU awards increased by 30 thousand, and we recorded a cumulative catch-up adjustment to increase stock-based compensation expense of $ 0.6 million ($ 0.4 million net of tax), or $ 0.02 per basic share and $ 0.01 per diluted share for the three and nine months ended September 30, 2020, respectively.

Stockholders’ Equity

Our authorized capital stock consists of 100.0 million shares of common stock, par value $ 0.01 per share, and 50.0 million shares of preferred stock, par value $ 0.01 per share.

As of June 30, 2020, and December 31, 2019, there were 33.4 million and 33.1 million shares of common stock issued and outstanding, respectively.

As of September 30, 2020, and December 31, 2019, there were 33.4 million and 33.1 million shares of common stock issued and outstanding, respectively.

On May 10, 2017, our stockholders approved the adoption of the Century Communities, Inc.

3 unchanged sentences

Amended and Restated 2017 Omnibus Incentive Plan (which we refer to as our “Amended 2017 Incentive Plan”), which increased the number of shares of our common stock authorized for issuance under the 2017 Incentive Plan by an additional 1.631 million shares.

We issued 0.5 million and 0.4 million shares of common stock related to the vesting of RSUs during the six months ended June 30, 2020 and 2019, respectively.

As of June 30, 2020, approximately 1.1 million shares of common stock remained available for issuance under the Amended 2017 Incentive Plan.

We issued 0.5 million and 0.3 million shares of common stock related to the vesting of RSUs during the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, approximately 1.0 million shares of common stock remained available for issuance under the Amended 2017 Incentive Plan.

On November 27, 2019, we entered into a Distribution Agreement with J.P.

1 unchanged sentence

(which we refer to as the “Distribution Agreement”), as sales agents pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $ 100.0 million from time to time through any of the sales agents party thereto in “at-the-market” offerings, in accordance with the terms and conditions set forth in the Distribution Agreement.

This Distribution Agreement, which superseded and replaced a prior similar Distribution Agreement, had all $ 100.0 million available for sale as of June 30, 2020.

We did no t sell or issue any shares of our common stock during the three and six months ended June 30, 2020.

During the three and six months ended June 30, 2019, we sold and issued an aggregate of 0.1 million shares of our common stock under the previous Distribution Agreement, which provided proceeds of $ 2.7 million, and in connection with such sales, paid total commissions and fees to the sales agents of $ 0.1 million .

This Distribution Agreement, which superseded and replaced a prior similar distribution agreement, had all $ 100.0 million available for sale as of September 30, 2020.

We did no t sell or issue any shares of our common stock during the three and nine months ended September 30, 2020.

During the three and nine months ended September 30, 2019, we sold and issued an aggregate of 0.8 million and 0.9 million shares, respectively, of our common stock under the previous distribution agreement, which provided gross proceeds of $ 23.7 million and $ 26.5 million, respectively, and in connection with such sales, paid total commissions and fees to the sales agents of $ 0.6 million and $ 0.7 million, respectively .

The Distribution Agreement will remain in full force and effect until terminated by either party pursuant to the terms of the agreement or such date that the maximum offering amount has been sold in accordance with the terms of the agreement .

On November 6, 2018, we authorized a stock repurchase program, under which we may repurchase up to 4,500,000 shares of our outstanding common stock.

During the three and six months ended June 30, 2020, we did no t repurchase any shares of common stock;

while, during the three and six months ended June 30, 2019, we repurchased 83,000 shares of common stock under this program for approximately $ 1.4 million.

During the three and nine months ended September 30, 2020, we did no t repurchase any shares of common stock.

During the three and nine months ended September 30, 2019, we repurchased 83,000 shares of common stock under this program for approximately $ 1.4 million.

Earnings Per Share

We use the treasury stock method to calculate earnings per share as our currently issued non-vested RSUs and PSUs do not have participating rights.

The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019 (in thousands, except share and per share information):

The following table sets forth the computation of basic and diluted EPS for the three and nine months ended September 30, 2020 and 2019 (in thousands, except share and per share information):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Weighted average common shares outstanding - basic

3 unchanged sentences

Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are antidilutive.

We excluded 0.8 million and 0.6 million common unit equivalents from diluted earnings per share during the three and six months ended June 30, 2020 and 2019, respectively, related to the PSUs for which performance conditions remain unsatisfied.

We excluded 0.8 million and 0.6 million common unit equivalents from diluted earnings per share during the three and nine months ended September 30, 2020 and 2019, respectively, related to the PSUs for which performance conditions remain unsatisfied.

Commitments and Contingencies

1 unchanged sentence

In the normal course of business, we post letters of credit and performance bonds related to our land development performance obligations with local municipalities.

As of June 30, 2020, and December 31, 2019, we had $ 335.9 million and $ 344.1 million, respectively, in letters of credit and performance bonds issued and outstanding.

As of September 30, 2020, and December 31, 2019, we had $ 360.1 million and $ 344.1 million, respectively, in letters of credit and performance bonds issued and outstanding.

We are subject to claims and lawsuits that arise primarily in the ordinary course of business, which consist primarily of construction defect claims.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements