TPH TRI Pointe Homes Inc

Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the third quarter ended September 30, 2023.

“Tri Pointe delivered a strong operational performance in the third quarter, surpassing our delivery guidance and generating home sales revenue of $825 million,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “We were able to execute well through our backlog conversion, as well as our ability to sell and close move-in ready spec homes during the quarter, ultimately leading to $75.4 million in net income available to common stockholders, or $0.76 per diluted share. Despite the persistence of elevated mortgage rates, much of the third quarter demonstrated stronger seasonal demand than normal, due largely to the underlying fundamentals of our industry, as well as the severe lack of resale supply available on the market.”

Mr. Bauer continued, “Our strategic focus remains on growing scale within our current markets, while also growing our market diversification through organic expansion or M&A opportunities. During the third quarter, we announced our organic entrance into the Salt Lake City, Utah market, which we view as having a diverse, strong, and growing economy coupled with a desirable quality of life, and we are very excited to commence operations this year.”

“Consistent with our strategic initiatives for the year, our ability to remain disciplined with cost while normalizing our cycle times helped us deliver both strong top and bottom-line results for the third quarter,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “As we move into the fourth quarter, our focus on operational efficiency remains unwavering. Further, with mortgage rates remaining elevated, we are acutely focused on the impact this has on affordability and buyer sentiment, and we are well-positioned to tactically implement the pricing and incentive strategies necessary to achieve our targeted sales goals.”

Mr. Bauer concluded, “Our robust balance sheet and strong liquidity position not only enable us to navigate the current market dynamics with resilience, but also enable us to swiftly capitalize on emerging opportunities. As macroeconomic circumstances continue to unfold, we believe the backdrop for new housing remains positive, and Tri Pointe is well positioned to seize the opportunities which have been further exacerbated by the growing scarcity of resale supply.”

Results and Operational Data for Third Quarter 2023 and Comparisons to Third Quarter 2022

• Net income available to common stockholders was $75.4 million, or $0.76 per diluted share, compared to $149.2 million, or $1.45 per diluted share
• Home sales revenue of $825.3 million compared to $1.1 billion, a decrease of 22%
  • New home deliveries of 1,223 homes compared to 1,463 homes, a decrease of 16%
  • Average sales price of homes delivered of $675,000 compared to $723,000, a decrease of 7%
• Homebuilding gross margin percentage of 22.3% compared to 27.1%, a decrease of 480 basis points
  • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 25.6%*
• SG&A expense as a percentage of homes sales revenue of 12.3% compared to 9.1%, an increase of 320 basis points
• Net new home orders of 1,513 compared to 681, an increase of 122%
• Active selling communities averaged 154.8 compared to 128.3, an increase of 21%
  • Net new home orders per average selling community were 9.8 orders (3.3 monthly) compared to 5.3 orders (1.8 monthly)
  • Cancellation rate of 10% compared to 27%
• Backlog units at quarter end of 3,055 homes compared to 3,044
  • Dollar value of backlog at quarter end of $2.1 billion compared to $2.4 billion, a decrease of 13%
  • Average sales price of homes in backlog at quarter end of $693,000 compared to $797,000, a decrease of 13%
• Ratios of debt-to-capital and net debt-to-net capital of 32.1% and 15.4%*, respectively, as of September 30, 2023
• Repurchased 1,753,045 shares of common stock at a weighted average price per share of $31.10 for an aggregate dollar amount of $54.5 million in the three months ended September 30, 2023
• Ended the third quarter of 2023 with total liquidity of $1.5 billion, including cash and cash equivalents of $849.0 million and $699.9 million of availability under our revolving credit facility

*	See “Reconciliation of Non-GAAP Financial Measures”

Outlook

For the fourth quarter, the Company anticipates delivering between 1,600 and 1,800 homes at an average sales price between $670,000 and $680,000. The Company expects homebuilding gross margin percentage to be in the range of 22.0% to 23.0% for the fourth quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 10.0% to 11.0%. Finally, the Company expects its effective tax rate for the fourth quarter to be in the range of 25.5% to 26.0%.

Earnings Conference Call

The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Thursday, October 26, 2023. The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, Glenn Keeler, Chief Financial Officer, and Linda Mamet, Chief Marketing Officer. Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Third Quarter 2023 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for two weeks following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13741533. An archive of the webcast will also be available on the Company’s website for a limited time.

About Tri Pointe Homes, Inc.

One of the largest homebuilders in the U.S., Tri Pointe Homes, Inc. (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms, and proven leadership of a national organization with the regional insights, longstanding community connections, and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, was named one of the 2023 Fortune 100 Best Companies to Work For®, and was designated as one of the 2023 PEOPLE Companies That Care®. The company was also named as a Great Place To Work-Certified™ company for three years in a row (2021 through 2023), and was named on several Great Place To Work® Best Workplaces lists in 2022 and 2023. For more information, please visit TriPointeHomes.com.

Forward-Looking Statements

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

Investor Relations Contact:InvestorRelations@TriPointeHomes.com, 949-478-8696

Media Contact:

Carol Ruiz, cruiz@newgroundco.com, 310-437-0045  

KEY OPERATIONS AND FINANCIAL DATA(dollars in thousands)(unaudited)
	Three Months Ended September 30,															Nine Months Ended September 30,
		2023				2022			Change				% Change				2023				2022			Change				% Change
Operating Data:	(unaudited)
Home sales revenue	$	825,295			$	1,057,491			$	(232,196	)		(22)%			$	2,412,777			$	2,787,386			$	(374,609	)		(13)%
Homebuilding gross margin	$	184,221			$	286,343			$	(102,122	)		(36)%			$	531,586			$	754,226			$	(222,640	)		(30)%
Homebuilding gross margin %		22.3	%			27.1	%		(4.8)%								22.0	%			27.1	%		(5.1)%
Adjusted homebuilding gross margin %*		25.6	%			29.9	%		(4.3)%								25.6	%			29.7	%		(4.1)%
SG&A expense	$	101,233			$	96,736			$	4,497			5	%		$	286,926			$	272,783			$	14,143			5	%
SG&A expense as a % of home sales revenue		12.3	%			9.1	%			3.2	%						11.9	%			9.8	%			2.1	%
Net income available to common stockholders	$	75,402			$	149,226			$	(73,824	)		(49)%			$	210,868			$	373,087			$	(162,219	)		(43)%
Adjusted EBITDA*	$	139,678			$	237,369			$	(97,691	)		(41)%			$	403,581			$	604,365			$	(200,784	)		(33)%
Interest incurred	$	36,919			$	31,893			$	5,026			16	%		$	111,792			$	89,235			$	22,557			25	%
Interest in cost of home sales	$	27,035			$	26,531			$	504			2	%		$	72,627			$	68,559			$	4,068			6	%
Other Data:
Net new home orders		1,513				681				832			122	%			5,044				3,933				1,111			28	%
New homes delivered		1,223				1,463				(240	)		(16)%				3,461				4,047				(586	)		(14)%
Average sales price of homes delivered	$	675			$	723			$	(48	)		(7)%			$	697			$	689			$	8			1	%
Cancellation rate		10	%			27	%		(17)%								9	%			15	%		(6)%
Average selling communities		154.8				128.3				26.5			21	%			144.3				120.7				23.6			20	%
Selling communities at end of period		163				133				30			23	%
Backlog (estimated dollar value)	$	2,117,319			$	2,427,301			$	(309,982	)		(13)%
Backlog (homes)		3,055				3,044				11			0	%
Average sales price in backlog	$	693			$	797			$	(104	)		(13)%
	September 30,				December 31,
		2023				2022			Change				% Change
Balance Sheet Data:	(unaudited)
Cash and cash equivalents	$	849,039			$	889,664			$	(40,625	)		(5)%
Real estate inventories	$	3,412,797			$	3,173,849			$	238,948			8	%
Lots owned or controlled		32,964				33,794				(830	)		(2)%
Homes under construction(1)		3,558				2,373				1,185			50	%
Homes completed, unsold		185				288				(103	)		(36)%
Debt	$	1,381,658			$	1,378,051			$	3,607			0	%
Stockholders’ equity	$	2,923,397			$	2,832,389			$	91,008			3	%
Book capitalization	$	4,305,055			$	4,210,440			$	94,615			2	%
Ratio of debt-to-capital		32.1	%			32.7	%		(0.6)%
Ratio of net debt-to-net capital*		15.4	%			14.7	%			0.7	%

__________(1) Homes under construction included 68 and 78 models as of September 30, 2023 and December 31, 2022, respectively.* See “Reconciliation of Non-GAAP Financial Measures”

CONSOLIDATED BALANCE SHEETS(in thousands, except share and per share amounts)
	September 30,			December 31,
		2023			2022
Assets	(unaudited)
Cash and cash equivalents	$	849,039		$	889,664
Receivables		119,406			169,449
Real estate inventories		3,412,797			3,173,849
Investments in unconsolidated entities		139,384			129,837
Goodwill and other intangible assets, net		156,603			156,603
Deferred tax assets, net		34,850			34,851
Other assets		158,152			165,687
Total assets	$	4,870,231		$	4,719,940
Liabilities
Accounts payable	$	55,231		$	62,324
Accrued expenses and other liabilities		509,189			443,034
Loans payable		288,337			287,427
Senior notes		1,093,321			1,090,624
Total liabilities		1,946,078			1,883,409
Commitments and contingencies
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		—			—
Common stock, $0.01 par value, 500,000,000 shares authorized; 97,341,774 and 101,017,708 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		973			1,010
Additional paid-in capital		—			3,685
Retained earnings		2,922,424			2,827,694
Total stockholders’ equity		2,923,397			2,832,389
Noncontrolling interests		756			4,142
Total equity		2,924,153			2,836,531
Total liabilities and equity	$	4,870,231		$	4,719,940

CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except share and per share amounts) (unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Homebuilding:
Home sales revenue	$	825,295			$	1,057,491			$	2,412,777			$	2,787,386
Land and lot sales revenue		1,714				2,626				10,506				4,337
Other operations revenue		749				674				2,219				2,021
Total revenues		827,758				1,060,791				2,425,502				2,793,744
Cost of home sales		641,074				771,148				1,881,191				2,033,160
Cost of land and lot sales		1,474				1,256				10,287				2,075
Other operations expense		724				670				2,171				2,020
Sales and marketing		42,874				41,950				127,977				112,712
General and administrative		58,359				54,786				158,949				160,071
Homebuilding income from operations		83,253				190,981				244,927				483,706
Equity in income (loss) of unconsolidated entities		3				(122	)			272				(34	)
Other income, net		11,664				463				30,361				852
Homebuilding income before income taxes		94,920				191,322				275,560				484,524
Financial Services:
Revenues		10,758				11,005				30,004				31,985
Expenses		6,127				5,827				19,363				17,457
Equity in income of unconsolidated entities		—				—				—				46
Financial services income before income taxes		4,631				5,178				10,641				14,574
Income before income taxes		99,551				196,500				286,201				499,098
Provision for income taxes		(22,942	)			(45,923	)			(71,764	)			(122,084	)
Net income		76,609				150,577				214,437				377,014
Net income attributable to noncontrolling interests		(1,207	)			(1,351	)			(3,569	)			(3,927	)
Net income available to common stockholders	$	75,402			$	149,226			$	210,868			$	373,087
Earnings per share
Basic	$	0.77			$	1.47			$	2.12			$	3.60
Diluted	$	0.76			$	1.45			$	2.10			$	3.57
Weighted average shares outstanding
Basic		98,018,498				101,242,708				99,534,570				103,555,717
Diluted		99,030,210				102,661,222				100,458,357				104,526,594

MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY(dollars in thousands)(unaudited)
	Three Months Ended September 30,										Nine Months Ended September 30,
	2023					2022					2023					2022
	NewHomesDelivered		AverageSalesPrice			NewHomesDelivered		AverageSalesPrice			NewHomesDelivered		AverageSalesPrice			NewHomesDelivered		AverageSalesPrice
Arizona	167		$	809		166		$	732		497		$	785		363		$	733
California	425			683		636			698		1,116			764		1,729			690
Nevada	103			749		122			724		289			751		363			711
Washington	48			847		46			1,092		106			823		172			1,023
West total	743			731		970			773		2,008			770		2,627			742
Colorado	17			733		82			682		110			754		201			662
Texas	287			527		250			511		775			565		788			507
Central total	304			538		332			616		885			589		989			562
Carolinas(1)	122			445		80			462		439			454		152			458
Washington D.C. Area(2)	54			1,185		81			770		129			1,125		279			744
East total	176			672		161			638		568			607		431			657
Total	1,223		$	675		1,463		$	723		3,461		$	697		4,047		$	689
	Three Months Ended September 30,										Nine Months Ended September 30,
	2023					2022					2023					2022
	Net NewHomeOrders		AverageSellingCommunities			Net NewHomeOrders		AverageSellingCommunities			Net NewHomeOrders		AverageSellingCommunities			Net NewHomeOrders		AverageSellingCommunities
Arizona	129			14.0		74			13.5		435			13.6		484			13.5
California	508			48.8		275			53.7		1,996			50.6		1,577			47.5
Nevada	146			10.5		56			6.8		335			8.6		317			7.6
Washington	44			5.5		34			3.0		166			5.4		103			2.8
West total	827			78.8		439			77.0		2,932			78.2		2,481			71.4
Colorado	39			9.5		15			7.3		118			7.6		180			7.7
Texas	454			49.0		123			23.5		1,262			40.8		691			22.8
Central total	493			58.5		138			30.8		1,380			48.4		871			30.5
Carolinas(1)	139			14.5		76			13.7		578			14.4		372			11.3
Washington D.C. Area(2)	54			3.0		28			6.8		154			3.3		209			7.5
East total	193			17.5		104			20.5		732			17.7		581			18.8
Total	1,513			154.8		681			128.3		5,044			144.3		3,933			120.7

(1) Carolinas comprises North Carolina and South Carolina.(2) Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.

MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY, continued(dollars in thousands)(unaudited)
	As of September 30, 2023								As of September 30, 2022
	BacklogUnits		BacklogDollarValue			AverageSalesPrice			BacklogUnits		BacklogDollarValue			AverageSalesPrice
Arizona	316		$	233,631		$	739		641		$	531,135		$	829
California	1,178			892,158			757		884			836,320			946
Nevada	171			112,684			659		280			232,850			832
Washington	95			90,768			955		60			48,387			806
West total	1,760			1,329,241			755		1,865			1,648,692			884
Colorado	58			39,254			677		163			128,733			790
Texas	769			448,721			584		539			346,530			643
Central total	827			487,975			590		702			475,263			677
Carolinas(1)	359			171,820			479		341			161,675			474
Washington D.C. Area(2)	109			128,283			1,177		136			141,671			1,042
East total	468			300,103			641		477			303,346			636
Total	3,055		$	2,117,319		$	693		3,044		$	2,427,301		$	797
	September 30,		December 31,
	2023			2022
Lots Owned or Controlled:
Arizona	2,352			2,901
California	11,206			11,399
Nevada	1,901			1,634
Washington	779			827
West total	16,238			16,761
Colorado	1,942			1,600
Texas	10,047			10,361
Central total	11,989			11,961
Carolinas(1)	3,760			3,857
Washington D.C. Area(2)	977			1,215
East total	4,737			5,072
Total	32,964			33,794
	September 30,		December 31,
	2023			2022
Lots by Ownership Type:
Lots owned	18,921			18,762
Lots controlled (3)	14,043			15,032
Total	32,964			33,794

(1) Carolinas comprises North Carolina and South Carolina.(2) Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.(3) As of September 30, 2023 and December 31, 2022, lots controlled included lots that were under land option contracts or purchase contracts. As of September 30, 2023 and December 31, 2022, lots controlled for Central include 3,042 and 3,325 lots, respectively, and lots controlled for East include 86 and 141 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

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

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

	Three Months Ended September 30,
		2023			%				2022			%
	(dollars in thousands)
Home sales revenue	$	825,295			100.0	%		$	1,057,491			100.0	%
Cost of home sales		641,074			77.7	%			771,148			72.9	%
Homebuilding gross margin		184,221			22.3	%			286,343			27.1	%
Add:  interest in cost of home sales		27,035			3.3	%			26,531			2.5	%
Add:  impairments and lot option abandonments		197			0.0	%			3,034			0.3	%
Adjusted homebuilding gross margin	$	211,453			25.6	%		$	315,908			29.9	%
Homebuilding gross margin percentage		22.3	%						27.1	%
Adjusted homebuilding gross margin percentage		25.6	%						29.9	%

	Nine Months Ended September 30,
		2023			%				2022			%
	(dollars in thousands)
Home sales revenue	$	2,412,777			100.0	%		$	2,787,386			100.0	%
Cost of home sales		1,881,191			78.0	%			2,033,160			72.9	%
Homebuilding gross margin		531,586			22.0	%			754,226			27.1	%
Add:  interest in cost of home sales		72,627			3.0	%			68,559			2.5	%
Add:  impairments and lot option abandonments		12,675			0.5	%			4,495			0.2	%
Adjusted homebuilding gross margin	$	616,888			25.6	%		$	827,280			29.7	%
Homebuilding gross margin percentage		22.0	%						27.1	%
Adjusted homebuilding gross margin percentage		25.6	%						29.7	%

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

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

	September 30, 2023				December 31, 2022
Loans payable	$	288,337			$	287,427
Senior notes		1,093,321				1,090,624
Total debt		1,381,658				1,378,051
Stockholders’ equity		2,923,397				2,832,389
Total capital	$	4,305,055			$	4,210,440
Ratio of debt-to-capital(1)		32.1	%			32.7	%
Total debt	$	1,381,658			$	1,378,051
Less: Cash and cash equivalents		(849,039	)			(889,664	)
Net debt		532,619				488,387
Stockholders’ equity		2,923,397				2,832,389
Net capital	$	3,456,016			$	3,320,776
Ratio of net debt-to-net capital(2)		15.4	%			14.7	%

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

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

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

	Three Months Ended September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
	(in thousands)
Net income available to common stockholders	$	75,402			$	149,226			$	210,868			$	373,087
Interest expense:
Interest incurred		36,919				31,893				111,792				89,235
Interest capitalized		(36,919	)			(31,893	)			(111,792	)			(89,235	)
Amortization of interest in cost of sales		27,264				26,611				73,196				68,639
Provision for income taxes		22,942				45,923				71,764				122,084
Depreciation and amortization		6,884				6,615				20,066				18,641
EBITDA		132,492				228,375				375,894				582,451
Amortization of stock-based compensation		6,989				5,717				15,012				16,740
Impairments and lot option abandonments		197				3,277				12,675				5,174
Adjusted EBITDA	$	139,678			$	237,369			$	403,581			$	604,365