8 unchanged sentences
Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors.
−Removed: The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ
−Removed: significantly from those expressed in any forward-looking statement.
+Added: The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement.
Statements regarding the following subjects, among others, may be forward-looking and subject to risks and uncertainties including among others:
4 unchanged sentences
volatility and uncertainty in the credit markets and broader financial markets and the impact on such markets and our ability to access them in the event of a threatened or actual U.S.
−Removed: sovereign default;
+Added: government shutdown or sovereign default;
our future business operations, operating results and financial condition, and changes in our business and investment strategy;
9 unchanged sentences
the degree and nature of our competition;
+Added: unstable economic and political conditions as well as geopolitical conflicts, could adversely affect our supply chain by causing shortages or increases in costs for materials necessary to construct homes and/or increases to the price of gasoline and other fuels and cause higher interest rates, inflation or general economic uncertainty;
our leverage, debt service obligations and exposure to changes in interest rates and our ability to refinance our debt when needed or on favorable terms;
12 unchanged sentences
New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us.
−Removed: Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
+Added: Except as required by law, we are not obligated to, and do not intend to, update or
+Added: revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Therefore, you should not rely on these forward-looking statements as of any date subsequent to the date of this Form 10-Q.
14 unchanged sentences
Additionally, our wholly owned subsidiary, Century Living, LLC, is engaged in the development, construction and management of multi-family rental properties, currently all located in Colorado.
−Removed: During the three and six months ended June 30, 2023, our Century Living operations were engaged in construction on three multi-family projects in Colorado, which commenced construction in 2022.
+Added: During the three and nine months ended September 30, 2023, our Century Living operations were engaged in construction on three multi-family projects in Colorado, which commenced construction in 2022.
Century Living, LLC is included in our Corporate segment.
While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments.
−Removed: Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing us to more appropriately price the homes and deploy our capital.
−Removed: Of the 4,147 homes delivered during the first half of 2023, approximately 91% of our deliveries were made to entry-level homebuyers that were below the Federal Housing Administration-insured mortgage limits and approximately 98% of homes delivered were built as move-in ready homes.
+Added: Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital.
+Added: Of the 6,411 homes delivered during the first nine months of 2023, approximately 91% of our deliveries were made to entry-level homebuyers that were below the Federal Housing Administration-insured mortgage limits and approximately 98% of homes delivered were built as move-in ready homes.
Financial Overview
−Removed: We generated solid financial results during the first six months of 2023 and we are encouraged by improving housing market conditions as compared to the second half of 2022, when increased mortgage interest rates, inflation, and macro-economic uncertainty considerably impacted the U.S.
+Added: We generated solid financial results during the first nine months of 2023 and we are encouraged by the housing market conditions as compared to the second half of 2022, when increased mortgage interest rates, inflation, and macro-economic uncertainty considerably impacted the U.S.
housing market.
−Removed: While inflation continues to impact the broader economy, homebuyers are adjusting to a more normalized higher interest rate environment, and we are encouraged by recent trends in demand.
−Removed: Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2023 increased 3.8% as compared to the prior year period, and increased sequentially 14.6% as compared to the first quarter of 2023.
−Removed: Further, during the three and six months ended June 30, 2023 , our cancellation rates were 14% and 16%, respectively , representing significant improvements from the cancellation rates we experienced in the latter half of 2022.
−Removed: We continue to focus our strategy on more near-term completions, as economic uncertainty has led a majority of our recent homebuyers to seek homes with near-term completion schedules, allowing them to lock in interest rates closer to a home closing.
−Removed: Further, with the increasing market demand for our homes experienced during the second quarter of 2023, we began to reduce incentive offerings across our communities as compared to previous quarters, which along with improving construction costs and cycle times, contributed to an improvement to our homebuilding gross margin as compared to the first quarter of 2023.
−Removed: During the second quarter of 2023, our direct construction costs on our starts decreased by approximately 11% as compared to the high point of our direct construction costs during the second quarter of 2022.
−Removed: Further, during the second quarter of 2023, the severity of the labor and raw material shortages and municipal and utility delays continued to moderate for completed homes that were started in the second half of 2022.
+Added: While inflation continued to impact the broader economy during the first nine months of 2023, homebuyers are adjusting to a more normalized higher interest rate environment, and we experienced more typical seasonality surrounding demand.
+Added: Net new home contracts (new home contracts net of cancellations) for the three months ended September 30, 2023 increased 63.1% as compared to the prior year period.
+Added: Further, during the three and nine months ended September 30, 2023 , our cancellation rates were 16.2% and 15.8%, respectively , representing significant improvements from the cancellation rates we experienced in the latter half of 2022.
+Added: During the third quarter of 2023, we continued to experience improved cycle times and benefitted from reduced direct construction costs on our starts as compared to the high point of our direct construction costs during the second quarter of 2022.
+Added: Further, during the second and third quarters of 2023, we reduced incentive offerings across our communities as compared to previous quarters, which along with improved construction costs and cycle times, contributed to an improvement to our homebuilding gross margin during the third quarter of 2023 as compared to the first and second quarters of 2023.
We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy.
−Removed: While we experienced increased market demand during the second quarter of 2023 compared to recent prior periods, we believe future demand for our homes is uncertain as future economic and market conditions are uncertain, in particular with respect to inflation;
−Removed: the impact of recent and anticipated future increases to the federal funds interest rate by the Federal Reserve;
+Added: While we experienced strengthened market demand during the third quarter of 2023 compared to the latter half of 2022, we believe future demand for our homes is uncertain as future economic and market conditions are uncertain, in particular with respect to inflation;
+Added: the impact of recent and potential for future increases to the federal funds interest rate by the Federal
interest rates;
11 unchanged sentences
Specifically, a rise in interest rates increases the costs of owning a home and adversely affects the purchasing power of our customers and could decrease homebuyer confidence hindering not only demand for our homes, but also our ability to realize our backlog.
−Removed: A decrease in demand for our homes or an increase in cancellations due to increased interest rates or otherwise would adversely affect our operating results in future periods, including our net sales, home deliveries, gross margin,
−Removed: origination volume of and revenues from our Financial Services segment, and net income.
+Added: A decrease in demand for our homes or an increase in cancellations due to increased interest rates or otherwise would adversely affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of and revenues from our Financial Services segment, and net income.
As a result, our past performance may not be indicative of our future results.
Despite future macro-economic uncertainty, especially in relation to the interest rate environment, we believe we are well-positioned to benefit from the ongoing shortage of both new and resale homes available for purchase in our key markets and the favorable demographics that support the need for new affordable housing.
−Removed: We believe our operations are well-positioned to withstand volatility in future market conditions as a result of our product offerings which both span the home buying segment and focus on affordable price points, and our current and future inventories of attractive land positions.
+Added: We believe our operations are prepared to withstand volatility in future market conditions as a result of our product offerings which both span the home buying segment and focus on affordable price points, and our current and future inventories of attractive land positions.
We have continued to focus on maintaining an appropriate balance of home and land inventories in relation to anticipated future demand, as well as prudent leverage, and, as a result, we believe we are well positioned to continue to execute on our strategy in order to optimize stockholder returns.
Results of Operations
−Removed: During the three and six months ended June 30, 2023, we generated $68.7 million and $112.8 million, respectively, in income before income tax expense, as compared to $213.6 million and $402.4 million, respectively, in the respective prior year periods.
−Removed: During the three and six months ended June 30, 2023, we generated net income of $51.4 million, or $1.60 per diluted share, and $84.8 million, or $2.63 per diluted share, respectively, as compared to $158.7 million, or $4.78 per diluted share, and $301.2 million, or $8.97 per diluted share, respectively, in the respective prior year periods.
−Removed: During the three and six months ended June 30, 2023, we generated total revenues of $844.2 million and $1.6 billion, respectively, driven primarily by home sales revenue, as compared to $1.2 billion and $2.2 billion, respectively, in the respective prior year period .
−Removed: During the three and six months ended June 30, 2023, we delivered 2,235 and 4,147 homes, respectively, with an average sales price of $366.2 thousand and $374.7 thousand, respectively.
+Added: During the three and nine months ended September 30, 2023, we generated $112.0 million and $224.8 million, respectively, in income before income tax expense, as compared to $172.1 million and $574.5 million, respectively, in the respective prior year periods.
+Added: During the three and nine months ended September 30, 2023, we generated net income of $83.2 million, or $2.58 per diluted share, and $167.9 million, or $5.21 per diluted share, respectively, as compared to $144.5 million, or $4.44 per diluted share, and $445.6 million, or $13.41 per diluted share, respectively, in the respective prior year periods.
+Added: During the three and nine months ended September 30, 2023, we generated total revenues of $889.4 million and $2.5 billion, respectively, driven primarily by home sales revenue, as compared to $1.1 billion and $3.3 billion, respectively, in the respective prior year periods .
+Added: During the three and nine months ended September 30, 2023, we delivered 2,264 and 6,411 homes, respectively, with an average sales price of $382.1 thousand and $377.3 thousand, respectively.
The number of homes delivered decreased by 13.9% and 16.6%, respectively, as compared to the respective prior year periods, which were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
−Removed: A verage sales price decreased 12.4% and 10.7% as compared to the respective prior year periods.
−Removed: We ended the second quarter of 2023 with no amounts outstanding under our revolving line of credit, $350.5 million of cash and cash equivalents, $23.2 million of cash held in escrow, a homebuilding debt to capital ratio of 31.2%, and a net homebuilding debt to net capital ratio of 22.3%.
−Removed: During the three and six months ended June 30, 2023, we paid quarterly cash dividends to our stockholders of $0.23 per share, a 15% increase from the quarterly dividends paid during the three and six months ended June 30, 2022 of $0.20 per share.
−Removed: During the three months ended June 30, 2023, we generated financial services revenue of $24.3 million, representing an increase of 6.5% as compared to the prior year period, primarily driven by favorable fair value of our loan pipeline compared to the prior year, partially offset by a reduced number of mortgages originated as compared to the prior year period, and reduced margins on loans sold to third parties period over period.
−Removed: During the six months ended June 30, 2023, we generated financial services revenue of $40.1 million, a decrease of 18.3% as compared to the prior year period, for the six-month comparison, driven by a decrease in the number of mortgages originated during the six months ended June 30, 2023, and reduced margins on loans sold to third parties period over period, partially offset by a favorable fair value mark on our loan pipeline compared to the prior year period.
−Removed: Our Century Living operations are engaged in construction on three multi-family projects in Colorado, which commenced in 2022, comprising over 900 units, which we anticipate will be available for leasing beginning in the second half of 2023 and into the first half of 2024.
−Removed: The following table summarizes our results of operations for the three and six months ended June 30, 2023 and 2022.
+Added: A verage sales price decreased 10.2% and 10.5% during the three and nine months ended September 30, 2023 as compared to the respective prior year periods.
+Added: We ended the third quarter of 2023 with no amounts outstanding under our revolving line of credit, $193.1 million of cash and cash equivalents, $52.5 million of cash held in escrow, a homebuilding debt to capital ratio of 30.8%, and a net homebuilding debt to net capital ratio of 25.3%.
+Added: During the three and nine months ended September 30, 2023, we paid quarterly cash dividends to our stockholders of $0.23 per share, a 15% increase from the quarterly dividends paid during the three and nine months ended September 30, 2022 of $0.20 per share.
+Added: During the three months ended September 30, 2023, we generated financial services revenue of $23.6 million, representing an increase of 1.6% as compared to the prior year period.
+Added: During the nine months ended September 30, 2023, we generated financial services revenue of $63.8 million, a decrease of 11.9% as compared to the prior year period, primarily driven by reduced margins on loans sold to third parties period over period and a decrease in the number of mortgages originated during the current year period, partially offset by a smaller fair value markdown on our loan pipeline as compared to the prior year period, and increased revenue related to discount points compared to the prior year period .
+Added: Our Century Living operations are engaged in construction on three multi-family projects in Colorado, which commenced in 2022 and comprise over 900 total units.
+Added: The first multi-family property consisting of over 200 units became available for leasing during the third quarter of 2023, and we anticipate the remaining projects will be available for leasing during 2024.
+Added: The following table summarizes our results of operations for the three and nine months ended September 30, 2023 and 2022.
(in thousands, except per share amounts)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Consolidated Statements of Operations:
33 unchanged sentences
(2) Homebuilding gross margin percentage is inclusive of impairment charges, if applicable.
−Removed: No impairment charges were recorded for the three and six months ended June 30, 2023 and 2022.
+Added: No impairment charges were recorded for the three and nine months ended September 30, 2023 and 2022.
Results of Operations by Segment
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment.
−Removed: Accordingly, we have presented segment information under this new basis for the three and six months ended June 30, 2023, and we have restated the corresponding segment information for those segments for the three and six months ended June 30, 2022.
+Added: Accordingly, we have presented segment information under this new basis for the three and nine months ended September 30, 2023, and we have restated the corresponding segment information for those segments for the three and nine months ended September 30, 2022.
(dollars in thousands)
New Homes Delivered
−Removed: Average Sales Price of Homes Delivered
+Added: Average Sales Price
+Added: of Homes Delivered
Home Sales Revenues
−Removed: Income before Income Tax Expense
−Removed: Three Months Ended June 30,
−Removed: Three Months Ended June 30,
−Removed: Three Months Ended June 30,
−Removed: Three Months Ended June 30,
+Added: Income before
+Added: Income Tax Expense
+Added: Three Months Ended
+Added: September 30,
+Added: Three Months Ended
+Added: September 30,
+Added: Three Months Ended
+Added: September 30,
+Added: Three Months Ended September 30,
Century Complete
1 unchanged sentence
New Homes Delivered
−Removed: Average Sales Price of Homes Delivered
+Added: Average Sales Price
+Added: of Homes Delivered
Home Sales Revenues
−Removed: Income before Income Tax Expense
−Removed: Six Months Ended June 30,
−Removed: Six Months Ended June 30,
−Removed: Six Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Income before
+Added: Income Tax Expense
+Added: Nine Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
Century Complete
Financial Services
−Removed: During the three and six months ended June 30, 2023, our West segment generated income before income tax expense of $15.0 million and $22.9 million, respectively, an 80.8% and 84.6% decrease, respectively, as compared to the respective prior year period.
−Removed: These decreases were primarily driven by decreases in home sales revenue of $154.4 million and $288.3 million, respectively, and decreases of 15.8% and 18.3%, respectively, in the percentage of income before income tax expense to home sales revenues.
−Removed: The revenue decreases during the three and six months ended June 30, 2023 were primarily driven by a 40.4% and 44.4% decrease, respectively, in the number of homes delivered, and a 20.5% and 13.3% decrease, respectively, in the average sales price per home.
−Removed: For both the three- and six-month comparisons, the decreases in the number of homes delivered were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and a 10.5% and 16.0% decrease, respectively, in monthly absorption rate.
−Removed: For both the three- and six-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities and the decreases in the percentage of income before income tax expense to home sales revenue were primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
−Removed: During the three and six months ended June 30, 2023, our Mountain segment generated income before income tax expense of $24.7 million and $52.5 million, respectively, a 52.1% and 51.6% decrease, respectively, as compared to the respective prior year period.
−Removed: These decreases were primarily driven by decreases in home sales revenue of $46.0 million and $81.1 million, respectively, and decreases of 7.9% and 8.5%, respectively, in the percentage of income before income tax expense to home sales revenues.
−Removed: The revenue decrease during the three months ended June 30, 2023 was primarily driven by a 16.2% decrease in the average sales price per home, and the revenue decrease during the six months ended June 30, 2023 was primarily driven by a 6.4% decrease in the number of homes
−Removed: delivered and an 8.8% decrease in the average sales price per home.
−Removed: For the six- month comparison, the decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and a 40.7% decrease in monthly absorption rate.
−Removed: For both the three- and six-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities and the decreases in the percentage of income before income tax expense to home sales revenue were primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
−Removed: During the three and six months ended June 30, 2023, our Texas segment generated income before income tax expense of $11.5 million and $15.1 million, respectively, a 62.7% and 71.7% decrease, respectively, as compared to the respective prior year period.
−Removed: These decreases were primarily driven by decreases in home sales revenue of $26.5 million and $75.3 million, respectively, and decreases of 11.0% and 11.4%, respectively, in the percentage of income before income tax expense to home sales revenues.
−Removed: The revenue decreases during the three and six months ended June 30, 2023 were primarily driven by an 8.0% and 14.8% decrease, respectively, in the number of homes delivered, and a 10.2% and 13.0% decrease, respectively, in the average sales price per home.
−Removed: For both the three- and six-month comparisons, the decreases in the number of homes delivered were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and a 7.9% and 20.8% decrease, respectively, in monthly absorption rate.
−Removed: For both the three- and six-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities and the decreases in the percentage of income before income tax expense to home sales revenue were primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
−Removed: During the three and six months ended June 30, 2023, our Southeast segment generated income before income tax expense of $18.0 million and $30.0, respectively, a 53.6% and 57.0% decrease, respectively, as compared to the respective prior year period.
−Removed: These decreases were primarily driven by decreases in home sales revenue of $63.1 million and $125.6 million, respectively, and decreases of 6.2% and 6.4%, respectively, in the percentage of income before income tax expense to home sales revenues.
−Removed: The revenue decrease during the three months ended June 30, 2023 was primarily driven by a 31.9% decrease in the number of homes delivered and a 4.5% decrease in the average sales price per home, and the revenue decrease during the six months ended June 30, 2023 was primarily driven by a 38.6% decrease in the number of homes delivered.
−Removed: For both the three- and six-month comparisons, the decreases in the number of homes delivered were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022 and a 33.3% and 43.3% decrease, respectively, in monthly absorption rate.
−Removed: For the three-month comparison, the average sales price decrease was driven by the mix of deliveries and pricing to market within individual communities, and for both the three- and six-month comparisons, the decreases in the percentage of income before income tax expense to home sales revenue were primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
+Added: During the three and nine months ended September 30, 2023, our West segment generated income before income tax expense of $31.4 million and $54.4 million, respectively, a 38.4% and 72.8% decrease, respectively, as compared to the respective prior year periods.
+Added: These decreases were primarily driven by decreases in home sales revenue of $87.2 million and $375.5 million, respectively.
+Added: The revenue decreases during the three and nine months ended September 30, 2023 were primarily driven by a 25.7% and 38.5% decrease, respectively, in the number of homes delivered, and a 11.5% and 12.7% decrease, respectively, in the average sales price per home.
+Added: For both the three- and nine-month comparisons, the decreases in the number of homes delivered were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
+Added: For both the three- and nine-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities.
+Added: For the three-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of decreased revenue on a partially fixed cost base, and for the nine-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
+Added: During the three and nine months ended September 30, 2023, our Mountain segment generated income before income tax expense of $25.4 million and $77.9 million, respectively, a 50.2% and 51.1% decrease, respectively, as compared to the respective prior year periods.
+Added: These decreases were primarily driven by decreases in home sales revenue of $80.9 million and $162.0 million, respectively.
+Added: The revenue decreases during the three and nine months ended September 30, 2023 were primarily driven by a 16.0% and 9.6% decrease, respectively, in the number of homes delivered, and a 14.4% and 10.6% decrease, respectively, in the average sales price per home.
+Added: For both the three- and nine-month comparisons, the decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities.
+Added: For the three-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of decreased revenue on a partially fixed cost base, and for the nine-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
+Added: During the three and nine months ended September 30, 2023, our Texas segment generated income before income tax expense of $16.4 million and $31.5 million, respectively, an 18.5% and 57.2% decrease, respectively, as compared to the respective prior year periods.
+Added: For both the three- and nine-month comparisons, the decreases were primarily driven by a decrease in home sales revenue of $21.1 million and $96.4 million, respectively.
+Added: The revenue decrease during the three months ended September 30, 2023 was primarily driven a 16.6% decrease in the average sales price per home, and the revenue decrease during the nine months ended September 20, 2023 was primarily driven by a 10.2% decrease in the number of homes delivered and a 13.9% decrease in the average sales price per home.
+Added: For both the three- and nine-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities, and for the nine-month comparison, the decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
+Added: For the nine-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
+Added: During the three and nine months ended September 30, 2023, our Southeast segment generated income before income tax expense of $33.7 million and $63.7 million, respectively, a 12.2% and 41.1% decrease, respectively, as compared to the respective prior year periods.
+Added: For the three- and nine-month comparisons, the decreases were primarily driven by a decrease in home sales revenue of $31.5 million and $157.1 million, respectively.
+Added: The revenue decreases during the three- and nine months ended September 30, 2023 were primarily driven by a 10.6% and 28.7% decrease, respectively, in the number of homes delivered, and a 6.1% and 1.7% decrease, respectively, in the average sales price per home.
+Added: For the three- and nine-month comparisons, the decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
+Added: For both the three- and nine-month comparisons, the average sales price decreases were driven by the mix of deliveries and pricing to market within individual communities.
+Added: For the nine-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
Century Complete
−Removed: During the three and six months ended June 30, 2023, our Century Complete segment generated income before income tax expense of $16.3 million and $30.3 million, respectively, a 53.0% and 47.0% decrease, respectively, as compared to the respective prior year period.
−Removed: For the three months ended June 30, 2023, the decrease was primarily driven by a decrease in home sales revenue of $26.1 million and a decrease of 7.1% in the percentage of income before income tax expense to home sales revenues, and for the six months ended June 30, 2023, the decrease was primarily driven by a decrease of 6.9% in the percentage of income before income tax expense to home sales revenues.
−Removed: The decrease in revenue during the three months ended June 30, 2023 was primarily driven by a 14.4% decrease in the number of homes delivered and was partially offset by a 3.7% increase in the average sales price per home driven by the mix of deliveries.
−Removed: Revenue remained flat during the six months ended June 30, 2023, primarily driven by a 3.5% decrease in the number of homes delivered and partially offset by a 3.9% increase in the average sales price per home driven by the mix of deliveries.
−Removed: For both the three- and six-month comparisons, the decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and for the six-month comparison a 10.7% decrease in monthly absorption rate.
−Removed: For the three-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
−Removed: For the six-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of decreased gross margins on home sales.
+Added: During the three and nine months ended September 30, 2023, our Century Complete segment generated income before income tax expense of $30.9 million and $61.2 million, respectively, a 9.0% and 32.9% decrease, respectively, as compared to the respective prior year periods.
+Added: For the three- and nine-month comparisons, the decreases were primarily driven by a decrease in home sales revenue of $32.8 million and $31.5 million, respectively.
+Added: The revenue decreases during the three- and nine months ended September 30, 2023 were primarily driven by a 15.5% and 8.0% decrease, respectively, in the number of homes delivered, and partially offset by a 2.6% and 3.3% increase, respectively, in the average sales price per home.
+Added: For the three- and nine-month comparisons, the decreases in the number of homes delivered were primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
+Added: For both the three- and nine-month comparisons, the average sales price increases were driven by the mix of deliveries and pricing to market within individual communities.
+Added: For the nine-month comparison, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
Financial Services
Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, performance typically correlates to the number of homes delivered.
−Removed: Our Financial Services segment generated income before income tax of $12.5 million for the three months ended June 30, 2023, a 45.2% increase over the prior year period.
−Removed: This increase was primarily the result of a $1.5 million increase in financial services revenue during the three months ended June 30, 2023 compared to the prior year period, as well as a decrease in financial services costs due to decreased headcount.
−Removed: The revenue increase was primarily driven by favorable fair value of our loan
−Removed: pipeline compared to the prior year, partially offset by a reduced number of mortgages originated as compared to the prior year period, and reduced margins on loans sold to third parties period over period.
−Removed: Our Financial Services segment generated income before income tax of $17.6 million for the six months ended June 30, 2023, an 11.0% decrease over the prior year period.
−Removed: This decrease was primarily the result of a $9.0 million decrease in financial services revenue during the six months ended June 30, 2023 compared to the prior year period, primarily driven by (1) a 21.8% decrease in the number of mortgages originated during the six months ended June 30, 2023, and (2) reduced margins on loans sold to third parties period over period, partially offset by a favorable fair value mark on our loan pipeline compared to the prior year period.
+Added: Our Financial Services segment generated income before income tax of $12.2 million for the three months ended September 30, 2023, a 30.5% increase over the prior year period.
+Added: This increase was primarily the result of a $2.5 million decrease in financial services costs due to decreased headcount period over period .
+Added: Our Financial Services segment generated income before income tax of $29.8 million for the nine months ended September 30, 2023, a nominal increase over the prior year period, primarily the result of a $9.3 million decrease in financial services costs due to decreased headcount as compared to the prior year period, partially offset by an $8.6 million decrease in financial services revenue as compared to the prior year period.
+Added: The decrease in financial services revenue was primarily driven by reduced margins on loans sold to third parties period over period and a 17.1% decrease in the number
+Added: of mortgages originated during the nine months ended September 30, 2023, and partially offset by a smaller fair value markdown on our loan pipeline as compared to the prior year period, and increased revenue related to discount points compared to the prior year period.
The following table presents selected operational data for our Financial Services segment in relation to our loan origination activities (dollars in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Total originations:
8 unchanged sentences
Number of loans sold
−Removed: During the three and six months ended June 30, 2023, our Corporate segment generated losses of $29.2 million and $55.6 million, respectively, remaining relatively consistent to losses of $28.7 million and $55.4 million, respectively, during the same period respective period in 2022.
+Added: During the three and nine months ended September 30, 2023, our Corporate segment generated losses of $38.0 million and $93.7 million, respectively, as compared to losses of $31.8 million and $87.2 million, respectively, during the same respective period in 2022.
+Added: These increases in losses were primarily driven by adjustments to increase stock-based compensation expense during the three and nine months ended September 30, 2023 of $7.4 million and $10.8 million, respectively, to reflect an increased estimate in the number of shares which will ultimately vest and be issued under certain performance share awards.
Homebuilding Gross Margin
1 unchanged sentence
Homebuilding gross margin represents home sales revenues less cost of home sales revenues and inventory impairment, if applicable.
−Removed: Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased for the three and six months ended June 30, 2023 to 19.7% and 19.0%, respectively, as compared to 28.2% for the three and six months ended June 30, 2022.
−Removed: This decrease was driven by deliveries in the first six months of 2023 that carried both higher incentives and elevated construction costs due to homes commencing construction during high costs periods in 2022.
+Added: Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased for the three and nine months ended September 30, 2023 to 24.6% and 21.0%, respectively, as compared to 24.8% and 27.0% during the same respective periods in 2022.
+Added: The decreases for the three and nine-month comparisons were primarily driven by deliveries during the period that carried both higher incentives and elevated construction costs due to homes commencing construction during high costs periods in 2022.
In the following table, we calculate our homebuilding gross margin, as adjusted to exclude inventory impairment, if applicable, and interest in cost of home sales revenues.
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
Home sales revenues
5 unchanged sentences
Adjusted homebuilding gross margin excluding interest and inventory impairment (1)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Home sales revenues
7 unchanged sentences
See the reconciliations to the most comparable GAAP measure and other information under “Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
−Removed: For the three and six months ended June 30, 2023, our adjusted homebuilding gross margin percentage excluding inventory impairment and interest in cost of home sales revenues, was 21.0% and 20.3%, respectively, as compared to 29.4% for the same periods in 2022.
+Added: For the three and nine months ended September 30, 2023, our adjusted homebuilding gross margin percentage excluding inventory impairment and interest in cost of home sales revenues, was 25.8% and 22.3%, respectively, as compared to 26.0% and 28.2% for the same respective periods in 2022.
We believe the above information is meaningful as it isolates the impact that indebtedness, inventory impairment (if applicable), and acquisitions (if applicable) have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to previous periods and our competitors .
1 unchanged sentence
(dollars in thousands)
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
Selling, general and administrative
As a percentage of home sales revenue
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Selling, general and administrative
As a percentage of home sales revenue
−Removed: Our selling, general and administrative expense decreased $4.0 million and $7.4 million, respectively, for the three and six months ended June 30, 2023 as compared to the same periods in 2022.
−Removed: The decreases for both the three- and six-month comparisons were primarily attributable to decreases of $8.9 million and $10.6 million, respectively, in salaries and wages due to decreased headcount, and partially offset by increases to stock-based compensation expense and by increases in various expenses to support our homebuilding operations.
−Removed: As a percentage of home sales revenue, our selling, general and administrative expense increased 320 basis points during each of the
−Removed: three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022, driven primarily by decreased revenue on a partially fixed cost base.
+Added: Our selling, general and administrative expense remained relatively consistent for the three months ended September 30, 2023, and decreased $6.1 million for nine months ended September 30, 2023 as compared to the same respective periods in 2022.
+Added: The increase for the three month comparison was primarily attributable to an adjustment of $7.4 million in stock-based compensation expense to reflect an increased estimate in the number of shares which will ultimately vest and be issued under certain performance share awards, partially offset by various decreases in other expenses, including advertising.
+Added: The decrease for the nine month comparison was primarily
+Added: attributable to a decrease of $9.2 million in salaries and wages due to decreased headcount and a decrease of $4.7 million in internal and external commission expense, partially offset by $10.8 million in stock-based compensation expense to reflect an increased estimate in the number of shares which will ultimately vest and be issued under certain performance share awards..
+Added: As a percentage of home sales revenue, our selling, general and administrative expense increased 300 basis points and 310 basis points, respectively, during each of the three and nine months ended September 30, 2023 as compared to the three and nine months ended September 30, 2022, respectively, driven primarily by decreased revenue on a partially fixed cost base.
Income Tax Expense
At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period.
−Removed: Our 2023 estimated annual effective tax rate, before discrete items, of 25.5% is driven by our blended federal and state statutory rate of 24.7%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation and estimated federal energy home credits for the current year home deliveries, which combined resulted in a net increase of 0.8%.
−Removed: For the six months ended June 30, 2023, our estimated annual rate of 25.5% was benefitted by discrete items which had a net impact of decreasing our rate by 0.7%, including excess tax benefits for vested stock-based compensation.
−Removed: Our estimated annual rate for the six months ended June 30, 2023 of 25.5% increased by 310 basis points as compared to our effective tax rate for the year ended December 31, 2022 of 22.4%.
−Removed: The increase in our estimated rate is primarily a result of the enactment of the Inflation Reduction Act of 2022 during the third quarter of 2022, which modified the energy efficient home credit beginning with homes closed on or after January 1, 2023 and provided for more stringent energy standards than previous periods, resulting in fewer closings qualifying for energy efficient home credits.
−Removed: For the three months ended June 30, 2023 and 2022, we recorded income tax expense of $17.3 million and $55.0 million, respectively.
−Removed: For the six months ended June 30, 2023 and 2022, we recorded income tax expense of $28.0 million and $101.3 million, respectively.
+Added: Our 2023 estimated annual effective tax rate, before discrete items of 26.4%, is driven by our blended federal and state statutory rate of 24.8%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation offset by estimated federal energy home credits for current year home deliveries, which combined resulted in a net increase of 1.6%.
+Added: For the nine months ended September 30, 2023, our estimated annual rate of 26.4% was benefitted by discrete items which had a net impact of decreasing our rate by 1.1%, including federal energy home tax credits claimed for prior year home deliveries in excess of previous estimates and the impact of excess tax benefits for vested stock-based compensation.
+Added: Our effective tax rate for the nine months ended September 30, 2023 of 25.3% increased by 290 basis points as compared to our effective tax rate for the year ended December 31, 2022 of 22.4%.
+Added: The increase in our effective tax rate is primarily a result of the enactment of the Inflation Reduction Act of 2022 during the third quarter of 2022, which modified the energy efficient home credit beginning with homes closed on or after January 1, 2023 and provided for more stringent energy standards than previous periods, resulting in fewer closed homes qualifying for energy efficient home credits, as well as the impact of disallowed deductions for executive compensation during 2023.
+Added: For the three months ended September 30, 2023 and 2022, we recorded income tax expense of $28.8 million and $27.6 million, respectively.
+Added: For the nine months ended September 30, 2023 and 2022, we recorded income tax expense of $56.9 million and $128.9 million, respectively.
Segment Assets
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment.
−Removed: Accordingly, we have presented segment information under this new basis as of June 30, 2023, and we have restated the corresponding segment information for those segments as of December 31, 2022.
+Added: Accordingly, we have presented segment information under this new basis as of September 30, 2023, and we have restated the corresponding segment information for those segments as of December 31, 2022.
(dollars in thousands)
+Added: September 30,
Increase (Decrease)
1 unchanged sentence
Financial Services
−Removed: Total assets increased to $3.9 billion as of June 30, 2023 as compared to $3.8 billion as of December 31, 2022, primarily as a result of changes in our inventory balances within our homebuilding segments related to timing of home and land development construction activities and an increase in the number of homes under construction, and an increase in our Corporate assets, primarily driven by increases in cash and cash equivalents and increases related to Century Living .
+Added: Total assets increased to $3.9 billion as of September 30, 2023 as compared to $3.8 billion as of December 31, 2022, primarily as a result of changes in our inventory balances within our homebuilding segments related to timing of home and land development construction activities and an increase in the number of homes under construction .
Lots owned and controlled
−Removed: June 30, 2023
+Added: September 30, 2023
December 31, 2022
Century Complete
−Removed: Of our total lots owned and controlled as of June 30, 2023, 53.6% were owned and 46.4% were controlled, as compared to 60.5% owned and 39.5% controlled as of December 31, 2022.
+Added: Of our total lots owned and controlled as of September 30, 2023, 44.1% were owned and 55.9% were controlled, as compared to 60.5% owned and 39.5% controlled as of December 31, 2022.
Other Homebuilding Operating Data
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment.
−Removed: Accordingly, we have presented segment information under this new basis as of and for the three and six months ended June 30, 2023, and we have restated the corresponding segment information for those segments as of and for the three and six months ended June 30, 2022.
+Added: Accordingly, we have presented segment information under this new basis as of and for the three and nine months ended September 30, 2023, and we have restated the corresponding segment information for those segments as of and for the three and nine months ended September 30, 2022.
Net new home contracts
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
Increase (Decrease)
+Added: September 30,
Increase (Decrease)
Century Complete
−Removed: Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2023 increased by 84 homes, or 3.8%, to 2,317 as compared to 2,223 for the same period in 2022.
−Removed: While inflation continues to impact the broader economy, homebuyers are adjusting to a more normalized higher interest rate environment.
−Removed: Net new home contracts for the six months ended June 30, 2023 decreased by 838 homes, or 16.2%, to 4,339 as compared to 5,177 for the same period in 2022, primarily driven by the reduced number of homes available for sale.
+Added: Net new home contracts (new home contracts net of cancellations) for the three months ended September 30, 2023 increased by 831 homes, or 63.1%, to 2,149 as compared to 1,318 for the same period in 2022, when increased mortgage interest rates, inflation, and macro-economic uncertainty considerably impacted the U.S.
+Added: housing market .
+Added: Net new home contracts for the nine months ended September 30, 2023 remained relative flat at 6,488 as compared to 6,495 for the same period in 2022.
Monthly absorption rate
−Removed: Our overall monthly “absorption rate” (the rate at which home orders are contracted, net of cancellations) for the three and six months ended June 30, 2023 and 2022 by segment are included in the tables below:
−Removed: Three Months Ended June 30,
+Added: Our overall monthly “absorption rate” (the rate at which home orders are contracted, net of cancellations) for the three and nine months ended September 30, 2023 and 2022 by segment are included in the tables below:
+Added: Three Months Ended September 30,
Increase (Decrease)
Century Complete
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Increase (Decrease)
Century Complete
−Removed: During the three and six months ended June 30, 2023, our absorption rates decreased by 5.7% and 24.4%, respectively, to 3.3 per month and 3.1 per month, respectively, as compared to the same periods in 2022.
−Removed: While home sales pace across our markets has been impacted by increased mortgage interest rates, inflation, and macro-economic uncertainty as compared to the historical record demand in prior year periods, we are encouraged by recent trends in demand.
−Removed: During the three and six months ended June 30, 2023, we experienced cancellation rates of 14% and 16% respectively , which represents a significant reduction from cancellation rates we experienced in the latter half of 2022 as we believe homebuyers are adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cycle has benefitted our cancellation rate.
+Added: During the three months ended September 30, 2023, our absorption rate increased by 40.0% to 2.8 per month as compared to the same period in 2022.
+Added: During the nine months ended September 30, 2023, our absorption rate decreased by 12.1% to 2.9 per month as compared to the same period in 2022.
+Added: During the three and nine months ended September 30, 2023, we experienced cancellation rates of 16.2% and 15.8% respectively , which represent a significant reduction from cancellation rates we experienced in the latter half of 2022 as we believe homebuyers are adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cycle has benefitted our cancellation rate.
Selling communities at period end
−Removed: As of June 30,
+Added: As of September 30,
Increase/(Decrease)
Century Complete
−Removed: Our selling communities increased by 20 communities to 233 communities at June 30, 2023 as compared to 213 at June 30, 2022.
+Added: Our selling communities increased by 35 communities to 252 communities at September 30, 2023 as compared to 217 at September 30, 2022.
This increase was a result of net new community openings since the end of the prior year period.
(dollars in thousands)
−Removed: As of June 30,
+Added: As of September 30,
Average Sales Price
4 unchanged sentences
Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home.
−Removed: At June 30, 2023, we had 2,002 homes in backlog with a total value of $750.1 million, which represents decreases of 58.0% and 62.1%, respectively, as compared to 4,767 homes in backlog with a total value of $2.0 billion at June 30, 2022.
−Removed: The decrease in backlog dollar value is primarily attributable to the decrease in backlog units, and in part due to a 9.7% decrease in the average sales price of homes in backlog.
+Added: At September 30, 2023, we had 1,887 homes in backlog with a total value of $707.2 million, which represents decreases of 45.4% and 48.7%, respectively, as compared to 3,455 homes in backlog with a total value of $1.4 billion at September 30, 2022.
+Added: The decrease in backlog dollar value is primarily attributable to the decrease in backlog units, partially due to our strategy of selling homes later in the construction cycle and in part due to a 6.1% decrease in the average sales price of homes in backlog.
Supplemental Guarantor Information
3 unchanged sentences
The guarantees are effectively subordinated to any secured debt of the Guarantors.
−Removed: As of June 30, 2023, Century Communities, Inc.
+Added: As of September 30, 2023, Century Communities, Inc.
had outstanding $1.0 billion in total principal amount of Senior Notes.
3 unchanged sentences
provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the respective indentures);
−Removed: (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be
−Removed: required to provide a guarantee pursuant to the applicable indenture;
+Added: (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the applicable indenture;
provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the applicable Indenture;
4 unchanged sentences
This may occur when, among other factors, it is found that the guarantor originally received less than fair consideration for the guarantee and the guarantor would be rendered insolvent by enforcement of the guarantee.
−Removed: On the basis of historical financial information, operating history and other factors, we believe that each of the guarantors, after giving effect to the issuance of its guarantee of the Senior Notes when the guarantee was issued, was not insolvent and did not and has not incurred debts beyond its ability to pay such debts as they mature.
+Added: On the basis of historical financial information, operating history and other factors, we believe that each of the guarantors, after giving effect to the issuance of its guarantee
+Added: of the Senior Notes when the guarantee was issued, was not insolvent and did not and has not incurred debts beyond its ability to pay such debts as they mature.
The Company cannot predict, however, what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.
11 unchanged sentences
Summarized Balance Sheet Data (in thousands)
−Removed: June 30, 2023
+Added: September 30, 2023
December 31, 2022
14 unchanged sentences
Summarized Statements of Operations Data (in thousands)
−Removed: Six Months Ended
−Removed: June 30, 2023
+Added: Nine Months Ended
+Added: September 30, 2023
December 31, 2022
12 unchanged sentences
Liquidity and Capital Resources
−Removed: Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and revolving line of credit availability, was $1.2 billion as of June 30, 2023 and $1.2 billion as of December 31, 2022.
−Removed: Our principal uses of capital for the three and six months ended June 30, 2023 were our land purchases, land development, home construction, and the payment of routine liabilities.
+Added: Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and revolving line of credit availability, was $1.0 billion as of September 30, 2023 and $1.2 billion as of December 31, 2022.
+Added: Our principal uses of capital for the three and nine months ended September 30, 2023 were our land purchases, land development, home construction, and the payment of routine liabilities.
Cash flows for each of our communities depend on the stage in the development cycle and can differ substantially from reported earnings.
18 unchanged sentences
These obligations impact our short-term and long-term liquidity and capital resource needs.
−Removed: For the three and six months ended June 30, 2023, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on February 2, 2023.
+Added: For the three and nine months ended September 30, 2023, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on February 2, 2023.
In the ordinary course of business, we enter into land purchase contracts in order to procure lots for the construction of our homes.
5 unchanged sentences
Our obligations with respect to purchase contracts and option contracts are generally limited to the forfeiture of the related non-refundable cash deposits.
−Removed: As of June 30, 2023, we had outstanding purchase contracts and option contracts for 26,804 lots totaling approximately $1.2 billion and we had $41.2 million of deposits for land contracts, of which $19.4 million were non-refundable cash deposits pertaining to land contracts.
+Added: As of September 30, 2023, we had outstanding purchase contracts and option contracts for 38,333 lots totaling approximately $1.8 billion and we had $46.8 million of deposits for land contracts, of which $19.5 million were non-refundable cash deposits pertaining to land contracts.
For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months.
5 unchanged sentences
Our outstanding indebtedness is described in detail in Note 9 – Debt in the Notes to the Condensed Consolidated Financial Statements .
−Removed: We are required to meet certain covenants, and as of June 30, 2023, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit, mortgage repurchase facilities, and construction loan agreements.
+Added: We are required to meet certain covenants, and as of September 30, 2023, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit, mortgage repurchase facilities, and construction loan agreements.
See Note 9 – Debt in the Notes to the Condensed Consolidated Financial Statements for further detail.
−Removed: Our outstanding debt obligations included the following as of June 30, 2023 and December 31, 2022 (in thousands):
+Added: Our outstanding debt obligations included the following as of September 30, 2023 and December 31, 2022 (in thousands):
+Added: September 30,
3.875% senior notes, due August 2029 (1)
5 unchanged sentences
(1) The carrying value of the 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.
−Removed: (2) As of June 30, 2023, other financing obligations included $17.6 million related to insurance premium notes and certain secured borrowings, as well as $21.1 million outstanding under construction loan agreements, as described below.
+Added: (2) As of September 30, 2023, other financing obligations included $30.0 million related to insurance premium notes and certain secured borrowings, as well as $28.8 million outstanding under construction loan agreements, as described below.
As of December 31, 2022, other financing obligations included $20.7 million related to insurance premium notes and certain secured borrowings, as well as $7.4 million outstanding under construction loan agreements.
We may from time to time seek to refinance or increase our outstanding debt or retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.
−Removed: Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
+Added: repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
The amounts involved may or may not be material during any particular reporting period.
1 unchanged sentence
In the normal course of business, we post letters of credit and performance and other bonds primarily related to our land development performance obligations with local municipalities.
−Removed: As of June 30, 2023 and December 31, 2022, we had $546.1 million and $574.8 million, respectively, in letters of credit and performance and other bonds issued and outstanding.
−Removed: Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and performance and other bonds are not generally released until all development and construction activities are completed.
+Added: As of September 30, 2023 and December 31, 2022, we had $513.9 million and $574.8 million, respectively, in letters of credit and performance and other bonds issued and outstanding.
+Added: Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and performance and other bonds are not generally fully released until all development and construction activities are completed.
Construction Loan Agreements
−Removed: On March 17, 2023, a wholly owned subsidiary of Century Living, LLC entered into a construction loan agreement with UMB Bank, N.A., and certain wholly owned subsidiaries of Century Living, LLC, are party to construction loan agreements entered into during 2022 with PNC Bank, National Association and U.S.
−Removed: Bank National Association, a national banking association, d/b/a Housing Capital Company (which along with UMB Bank, N.A., we collectively refer to as “the lenders”), respectively.
+Added: Certain wholly owned subsidiaries of Century Living, LLC, are parties to construction loan agreements entered into during 2022 and the first quarter of 2023 with various banks, (which we collectively refer to as “the lenders”).
The three construction loan agreements collectively provide that we may borrow up to an aggregate of $187.6 million from the lenders for purposes of construction of multi-family projects in Colorado, with advances made by the lenders upon the satisfaction of certain conditions.
2 unchanged sentences
The construction loan agreements contain customary affirmative and negative covenants (including covenants related to construction completion, and limitations on the use of loan proceeds, transfers of land, equipment, and improvements), as well as customary events of default.
−Removed: Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the condensed consolidated balance sheets while the related multi-family rental properties are being actively developed and until the projects are completed.
−Removed: As of June 30, 2023, $21.1 million was outstanding under the construction loan agreements, with borrowings that bore a weighted average interest rate of 7.1% during the six months ended June 30, 2023, and we were in compliance with all covenants thereunder.
+Added: Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the condensed consolidated balance sheets while the related multi-family rental properties are being actively developed.
+Added: As of September 30, 2023, $28.8 million was outstanding under the construction loan agreements, with borrowings that bore a weighted average interest rate of 7.2% during the nine months ended September 30, 2023, and we were in compliance with all covenants thereunder.
Revolving Line of Credit
6 unchanged sentences
On December 21, 2022, we entered into a First Modification Agreement with Texas Capital Bank, as Administrative Agent, amending the Second A&R Credit Agreement pursuant to which, effective January 3, 2023, all existing borrowings using an interest rate based on a LIBOR reference rate had the interest rate replaced with one based on an adjusted term SOFR reference rate, which equals the greater of (i) 0.50% or (ii) the one-month quotation of the secured overnight financing rate administered by the Federal Reserve Bank of New York, plus 0.10%.
−Removed: As of June 30, 2023, no amounts were outstanding under our revolving line of credit and were in compliance with all covenants under the Second A&R Credit Agreement.
+Added: As of September 30, 2023, no amounts were outstanding under our revolving line of credit and were in compliance with all covenants under the Second A&R Credit Agreement.
Mortgage Repurchase Facilities – Financial Services
−Removed: Inspire is party to mortgage warehouse facilities with Comerica Bank and J.P.
−Removed: Morgan, (which facilities we refer to as the “repurchase facilities”), which provide Inspire with uncommitted repurchase facilities of up to an aggregate of $275.0 million as of June 30, 2023, secured by the mortgage loans financed thereunder.
−Removed: The repurchase facilities have varying short term maturity dates through June 21, 2024 and bore a weighted average interest rate of 6.67% during the six months ended June 30, 2023.
+Added: Inspire is a party to a mortgage warehouse facility with J.P.
+Added: Morgan, which provides Inspire with uncommitted repurchase facilities of up to an aggregate of $200.0 million as of September 30, 2023, secured by the mortgage loans financed thereunder, and a maturity date through January 19, 2024.
+Added: During the three months ended September 30, 2023, we terminated our mortgage warehouse facility agreement with Comerica, which provided uncommitted repurchase facilities of up to an aggregate of $75.0 million , with outstanding principal and interest due on December 29, 2023.
+Added: The repurchase facilities bore a weighted average interest rate of 6.80% during the nine months ended September 30, 2023.
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.
−Removed: As of June 30, 2023 and December 31, 2022, we had $191.0 million and $197.6 million outstanding under the repurchase facilities, respectively, and were in compliance with all covenants thereunder.
+Added: As of September 30, 2023 and December 31, 2022, we had $162.1 million and $197.6 million outstanding under the repurchase facilities, respectively, and were in compliance with all covenants thereunder.
At-the-Market Offerings
3 unchanged sentences
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.
−Removed: We did not sell or issue any shares of our common stock during the three and six months ended June 30, 2023 and 2022, respectively, and as of June 30, 2023, all $100.0 million remained available for sale.
+Added: We did not sell or issue any shares of our common stock during the three and nine months ended September 30, 2023 and 2022, respectively, and as of September 30, 2023, all $100.0 million remained available for sale.
Stock Repurchase Program
1 unchanged sentence
The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws.
−Removed: The actual manner, timing, amount and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of our common stock, trading volume, other capital management objectives and opportunities, applicable legal requirements, applicable tax effects including the 1% excise tax recently instituted under the Inflation Reduction Act of 2022, and general market and economic conditions.
+Added: The actual manner, timing, amount and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of our common stock, trading volume, other capital management objectives and opportunities, applicable legal requirements, applicable tax effects including the 1% excise tax instituted under the Inflation Reduction Act of 2022, and general market and economic conditions.
We intend to finance any stock repurchases through available cash and our revolving line of credit.
2 unchanged sentences
All shares of common stock repurchased under the program will be cancelled and returned to the status of authorized but unissued shares of common stock.
−Removed: During the three and six months ended June 30, 2023, an aggregate of 30.4 thousand shares of our common stock were repurchased for a total purchase price of approximately $2.0 million at a weighted average price of $64.84 per share.
−Removed: During the three and six months ended June 30, 2022, an aggregate of 0.8 million and 1.8 million shares, respectively, of our common stock were repurchased for a total purchase price of approximately $35.9 million and $98.3 million, respectively, at a weighted average price of $45.42 and $54.46 per share.
−Removed: The maximum number of shares available to be repurchased under the stock repurchase program as of June 30, 2023 was 1,477,817 shares.
−Removed: The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three and six months ended June 30, 2023 and 2022, respectively (in thousands, except per share information):
−Removed: Six Months ended June 30, 2023
+Added: During the three and nine months ended September 30, 2023, an aggregate of 247.8 thousand and 278.2 thousand shares, respectively, were repurchased for a total purchase price of approximately $17.3 million and $19.2 million, respectively, and a weighted average price of $69.61 and $69.09 per share, respectively.
+Added: During the three and nine months ended September 30, 2022, an aggregate of 0.5 million and 2.3 million shares, respectively, were repurchased for a total purchase price of approximately $22.3 million and $120.6 million, respectively, and a weighted average price of $44.58 and $52.32 per share, respectively.
+Added: The maximum number of shares available to be repurchased under the stock repurchase program as of September 30, 2023 was 1,230,010 shares.
+Added: The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the three and nine months ended September 30, 2023 and 2022, respectively (in thousands, except per share information):
+Added: Nine Months Ended September 30, 2023
Cash Dividends Declared and Paid
4 unchanged sentences
June 14, 2023
−Removed: Six Months ended June 30, 2022
+Added: August 16, 2023
+Added: August 30, 2023
+Added: September 13, 2023
+Added: Nine Months Ended September 30, 2022
Cash Dividends Declared and Paid
4 unchanged sentences
June 15, 2022
+Added: August 17, 2022
+Added: August 31, 2022
+Added: September 14, 2022
The declaration and payment of future cash dividends on our common stock, whether at current levels or at all, are at the discretion of our Board of Directors and depend upon, among other things, our expected future earnings, cash flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial investment strategy and general financial condition, as well as general business conditions.
−Removed: Cash Flows— Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
−Removed: For the six months ended June 30, 2023 and 2022, the comparison of cash flows is as follows:
+Added: Cash Flows— Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022
+Added: For the nine months ended September 30, 2023 and 2022, the comparison of cash flows is as follows:
Our primary sources of cash flows from operations are from the sale of single-family attached and detached homes and mortgages.
Our primary uses of cash flows from operations are the acquisition of land and expenditures associated with the construction of our single-family attached and detached homes and the origination of mortgages held for sale.
−Removed: Net cash provided by operating activities was $132.8 million during the six months ended June 30, 2023 as compared to net cash used in operating activities of $102.9 million during the six months ended June 30, 2022.
−Removed: The increase in cash provided by operations is primarily a result of reduced expenditures related to land acquisition and expenditures associated with the construction of homes during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.
−Removed: This reduction was offset by (1) a decrease in net income of $216.4 million and (2) a reduction in our mortgage loans held for sale of $6.4 million during the six months ended June 30, 2023, as compared to a reduction in mortgage loans held for sale of $128.1 million during the six months ended June 30, 2022.
−Removed: Net cash used in investing activities increased to $48.6 million during the six months ended June 30, 2023, compared to $25.3 million during the six months ended June 30, 2022.
−Removed: The increase was primarily related to $39.5 million in expenditures related to the development, construction, and management of multi-family rental properties by our wholly owned subsidiary, Century Living .
−Removed: Net cash used in financing activities decreased to $23.4 million during the six months ended June 30, 2023, compared to $96.3 million during the six months ended June 30, 2022.
−Removed: The decrease in cash used in financing activities was primarily attributable to (1) a $116.3 million decrease in net payments on the repurchase facilities in the first six months of 2023 as compared to the prior year period and (2) $98.3 million of repurchases of common stock during the first six months of 2022, as compared to $2.0 million of repurchases of common stock during the first six months of 2023, partially offset by $141.0 million outstanding on the line of credit during the first six months of 2022, as compared to no amounts outstanding during the first six months of 2023.
−Removed: As of June 30, 2023, our cash and cash equivalents and restricted cash balance was $369.3 million, as compared to $308.5 million as of December 31, 2022.
+Added: Net cash provided by operating activities was $33.0 million during the nine months ended September 30, 2023 as compared to net cash used in operating activities of $67.1 million during the nine months ended September 30, 2022.
+Added: The increase in net cash provided by operations is primarily a result of reduced expenditures related to land acquisition and expenditures associated with the construction of homes during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.
+Added: This reduction was offset by (1) a decrease in net income of $277.7 million and (2) a reduction in our mortgage loans held for sale of $36.3 million during the nine months ended September 30, 2023, as compared to a reduction in mortgage loans held for sale of $142.3 million during the nine months ended September 30, 2022.
+Added: Net cash used in investing activities increased $37.3 million during the nine months ended September 30, 2023 as compared to the prior year period.
+Added: The increase in net cash used in investing activities was primarily attributable to a $41.7 million increase in expenditures related to the development, construction, and management of multi-family rental properties by our wholly owned subsidiary, Century Living, LLC, during the nine months ended September 30, 2023 as compared to the prior year period.
+Added: Net cash used in financing activities decreased $51.7 million during the nine months ended September 30, 2023 as compared to the prior year period.
+Added: The decrease in net cash used in financing activities was primarily attributable to (1) a $101.3 million decrease in net payments on the repurchase facilities in the first nine months of 2023 as compared to the prior year period and (2) $120.6 million of repurchases of common stock during the first nine months of 2022, as compared to $19.2 million of repurchases of common stock during the first nine months of 2023, partially offset by $165.0 million in net borrowings on the line of credit during the nine months ended September 30, 2022, as compared to no net borrowings during the nine months ended September 30, 2023.
+Added: As of September 30, 2023, our cash and cash equivalents and restricted cash balance was $210.1 million, as compared to $308.5 million as of December 31, 2022.
Non-GAAP Financial Measures
9 unchanged sentences
EBITDA and Adjusted EBITDA
−Removed: The following table presents EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022.
+Added: The following table presents EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022.
EBITDA and adjusted EBITDA are non-GAAP financial measures we use as a supplemental measure in evaluating operating performance.
7 unchanged sentences
(dollars in thousands)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Income tax expense
12 unchanged sentences
(dollars in thousands)
+Added: September 30,
Notes payable
17 unchanged sentences
(in thousands, except share and per share information)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Weighted average common shares outstanding - basic
11 unchanged sentences
Adjusted diluted earnings per share
−Removed: (1) The tax rates used in calculating adjusted net income for the three and six months ended June 30, 2023 were 25.2% and 24.8%, respectively, and the tax rates used in calculating adjusted net income for the three and six months ended June 30, 2022 were 25.7% and 25.2%, respectively, which are reflective of our GAAP tax rates for the applicable periods.
+Added: (1) The tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2023 were 25.8% and 25.3%, respectively, and the tax rates used in calculating adjusted net income for the three and nine months ended September 30, 2022 were 16.0% and 22.4%, respectively, which are reflective of our GAAP tax rates for the applicable periods.
QUANTIT ATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
12 unchanged sentences
In addition, inflation has led and could continue to lead to higher mortgage rates, which has and could continue to significantly affect the affordability of mortgage financing to homebuyers and lead to weakened demand for our homes, as well as increased cancellations compared to prior year periods.
−Removed: Inflation remained elevated during the three and six months ended June 30, 2023 compared to the prior year periods, and the Federal Reserve continued to raise the federal funds interest rate during the first half of 2023, which continued to impact interest rates on 30-year fixed mortgages.
−Removed: Due to higher mortgage rates, we were no longer able to offset cost increases with higher home selling prices in the first half of 2023.
+Added: Inflation remained elevated during the three and nine months ended September 30, 2023 compared to the prior year periods, and the Federal Reserve continued to raise the federal funds interest rate during the first nine months of 2023, which continued to impact interest rates on 30-year fixed mortgages.
+Added: Due to higher mortgage rates, we were no longer able to offset cost increases with higher home selling prices in the first nine months of 2023.
Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements.
4 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.