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Item 5. Market for Registrant’s Common Equity

2022-02-15 compared with 2021-02-25 · 3 added, 82 removed, 25 unchanged (77% of the section changed)

2 unchanged sentences

as nominee of The Depository Trust Company.

Shelf Registration Statement

On August 24, 2018, we and certain of our subsidiaries filed an automatic shelf registration statement on Form S-3 (Registration No.

333-227012), registering the offering and sale of an indeterminate amount of debt securities, guarantees of debt securities, preferred stock, common stock, warrants, depositary shares, purchase contracts and units that include any of these securities.

We have not previously declared or paid any cash dividends on our common stock.

Any future determination to pay cash dividends on our common stock will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any of our financing arrangements and such other factors as our board of directors may deem relevant.

Stock Repurchase Program

7 unchanged sentences

378,525 $ 148.20 378,525

(1) In November 2018, our Board of Directors (the “Board”) authorized a stock repurchase program, pursuant to which we may purchase up to $50.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws.

(1) In November 2018, the Board authorized a stock repurchase program, pursuant to which we may purchase up to $50.0 million of shares of our common stock through open market transactions, privately negotiated transactions or otherwise in accordance with applicable laws.

On October 30, 2020, the Board approved an increase in our stock repurchase program by an additional $300.0 million of shares of our common stock.

1 unchanged sentence

Our stock repurchase program may be modified, discontinued or suspended at any time.

We have not previously declared or paid any cash dividends on our common stock.

Any future determination to pay cash dividends on our common stock will be at the discretion of the Board and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any of our financing arrangements and such other factors as the Board may deem relevant.

Stock Performance Graph

8 unchanged sentences

S&P Homebuilders Index $100.00 $130.65 $95.95 $134.45 $169.62 $252.40

SELECTED FINANCIAL DATA

The selected historical balance sheet and statement of operations information presented as of December 31, 2020, 2019, 2018, 2017 and 2016 and for the years then ended have been derived from our audited historical consolidated financial statements.

The following table should be read together with, and is qualified in its entirety by reference to, our historical consolidated financial statements and the accompanying notes included elsewhere in this Annual Report.

The table should also be read together with “ Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

The following table presents our selected historical financial and operating data as of the dates and for the periods indicated.

Year Ended December 31,

2020 2019 2018 2017 2016

(dollars in thousands, except per share data and average home sales price)

Statement of Operations Data:

Home sales revenues $ 2,367,929 $ 1,838,154 $ 1,504,400 $ 1,257,960 $ 838,320

Cost of sales 1,764,832 1,401,675 1,124,484 937,540 616,707

Selling expenses 148,366 131,561 109,460 94,957 66,984

General and administrative 90,021 77,380 70,345 55,662 43,158

Operating income 364,710 227,538 200,111 169,801 111,471

Loss on extinguishment of debt — 169 3,599 — —

Other income, net (3,139) (4,463) (2,586) (1,601) (2,201)

Net income before income taxes 367,849 231,832 199,098 171,402 113,672

Income tax provision 43,954 53,224 43,812 58,096 38,641

Net income $ 323,895 $ 178,608 $ 155,286 $ 113,306 $ 75,031

Basic earnings per share (1)

$ 12.89 $ 7.70 $ 6.89 $ 5.24 $ 3.61

Diluted earnings per share (1)

$ 12.76 $ 7.02 $ 6.24 $ 4.73 $ 3.41

Other Financial and Operating Data:

Average community count 111.9 95.8 80.6 73.1 57.9

Community count at end of period 116 106 88 78 63

Home closings 9,339 7,690 6,512 5,845 4,163

Average sales price per home closed $ 253,553 $ 239,032 $ 231,020 $ 215,220 $ 201,374

Gross margin (2)

$ 603,097 $ 436,479 $ 379,916 $ 320,420 $ 221,613

Gross margin % (3)

25.5 % 23.7 % 25.3 % 25.5 % 26.4 %

Adjusted gross margin (4)

$ 648,350 $ 475,033 $ 405,635 $ 338,066 $ 232,778

Adjusted gross margin % (3)(4)

27.4 % 25.8 % 27.0 % 26.9 % 27.8 %

$ 408,940 $ 267,705 $ 224,120 $ 189,593 $ 125,441

EBITDA margin % (3)(5)

17.3 % 14.6 % 14.9 % 15.1 % 15.0 %

Adjusted EBITDA (5)

$ 410,673 $ 266,735 $ 226,541 $ 188,238 $ 123,725

Adjusted EBITDA margin % (3)(5)

17.3 % 14.5 % 15.1 % 15.0 % 14.8 %

2020 2019 2018 2017 2016

Balance Sheet Data:

(in thousands)

Cash and cash equivalents $ 35,942 $ 38,345 $ 46,624 $ 67,571 $ 49,518

Real estate inventory $ 1,569,489 $ 1,499,624 $ 1,228,256 $ 918,933 $ 717,681

Goodwill $ 12,018 $ 12,018 $ 12,018 $ 12,018 $ 12,018

Total assets $ 1,826,087 $ 1,666,115 $ 1,395,473 $ 1,079,892 $ 814,514

Notes payable $ 538,398 $ 690,559 $ 653,734 $ 475,195 $ 400,483

Total liabilities $ 687,082 $ 820,922 $ 739,530 $ 590,046 $ 459,313

Total equity $ 1,139,005 $ 845,193 $ 655,943 $ 489,846 $ 355,201

(1) Earnings per share is presented for the years ended December 31, 2020, 2019, 2018, 2017 and 2016.

See Note 9 “ Equity ” to our consolidated financial statements included in Part II, Item 8 of this Annual Report of this Form 10-K for calculation of earnings per share for the years ended December 31, 2020, 2019 and 2018 .

(2) Gross margin is home sales revenues less cost of sales.

(3) Calculated as a percentage of home sales revenues.

(4) Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance.

We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales.

Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin.

However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustments, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited.

In addition, other companies may not calculate adjusted gross margin information in the same manner that we do.

Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance.

Please see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures ” for a reconciliation of adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable.

(5) EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance.

We define EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization and (iv) capitalized interest charged to the cost of sales.

We define adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) capitalized interest charged to the cost of sales, (v) loss on extinguishment of debt, (vi) other income, net and (vii) adjustments resulting from the application of purchase accounting.

Our management believes that the presentation of EBITDA and adjusted EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business.

EBITDA and adjusted EBITDA provide indicators of general economic performance that are not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be unusual or non-recurring.

Accordingly, our management believes that these measures are useful for comparing general operating performance from period to period.

Other companies may define these measures differently and, as a result, our measures of EBITDA and adjusted EBITDA may not be directly comparable to the measures of other companies.

Although we use EBITDA and adjusted EBITDA as financial measures to assess the performance of our business, the use of these measures is limited because they do not include certain material costs, such as interest and taxes, necessary to operate our business.

EBITDA and Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance.

Our presentation of EBITDA and adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items.

Our use of EBITDA and adjusted EBITDA is limited as an analytical tool, and you should not consider these measures in isolation or as substitutes for analysis of our results as reported under GAAP.

Please see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures ” for reconciliations of EBITDA and adjusted EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable.

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-K

Item 5. Market for Registrant’s Common Equity