Delaware
|
33-0475989
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
15360 Barranca Parkway, Irvine, CA
(Address of principal executive offices)
|
92618-2215
(Zip Code)
|
N/A
|
||
(Former name, former address and former fiscal year, if changed since last report) |
Large accelerated filer x
|
Accelerated filer ¨
|
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
|
Smaller reporting company ¨
|
Page No.
|
|||||
PART I. | Financial Information | ||||
ITEM 1.
|
|||||
2 | |||||
Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2016 and 2015 | 3 | ||||
4
|
|||||
5
|
|||||
6
|
|||||
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 29 | |||
ITEM 3. |
43
|
||||
ITEM 4. |
44
|
||||
PART II. | Other Information |
|
|||
ITEM 1. |
46
|
||||
ITEM 1A.
|
46
|
||||
ITEM 2. |
46
|
||||
ITEM 3. |
46
|
||||
ITEM 4. |
46
|
||||
ITEM 5. | Other Information | 46 | |||
ITEM 6. | Exhibits | 47 | |||
SIGNATURES |
48
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Homebuilding:
|
||||||||||||||||
Home sale revenues
|
$
|
1,665,030
|
$
|
626,008
|
$
|
4,402,896
|
$
|
1,789,065
|
||||||||
Land sale revenues
|
5,928
|
26,182
|
32,107
|
33,035
|
||||||||||||
Total revenues
|
1,670,958
|
652,190
|
4,435,003
|
1,822,100
|
||||||||||||
Cost of home sales
|
(1,290,628
|
)
|
(467,358
|
)
|
(3,440,549
|
)
|
(1,346,108
|
)
|
||||||||
Cost of land sales
|
(5,638
|
)
|
(25,076
|
)
|
(31,217
|
)
|
(30,190
|
)
|
||||||||
Total cost of sales
|
(1,296,266
|
)
|
(492,434
|
)
|
(3,471,766
|
)
|
(1,376,298
|
)
|
||||||||
Gross margin
|
374,692
|
159,756
|
963,237
|
445,802
|
||||||||||||
Selling, general and administrative expenses
|
(170,815
|
)
|
(73,260
|
)
|
(473,210
|
)
|
(219,240
|
)
|
||||||||
Income (loss) from unconsolidated joint ventures
|
1,231
|
121
|
2,643
|
(381
|
)
|
|||||||||||
Other income (expense)
|
(4,169
|
)
|
(11,170
|
)
|
(11,992
|
)
|
(16,742
|
)
|
||||||||
Homebuilding pretax income
|
200,939
|
75,447
|
480,678
|
209,439
|
||||||||||||
Financial Services:
|
||||||||||||||||
Revenues
|
21,433
|
7,011
|
59,524
|
19,815
|
||||||||||||
Expenses
|
(11,626
|
)
|
(4,164
|
)
|
(34,635
|
)
|
(12,942
|
)
|
||||||||
Financial services pretax income
|
9,807
|
2,847
|
24,889
|
6,873
|
||||||||||||
Income before taxes
|
210,746
|
78,294
|
505,567
|
216,312
|
||||||||||||
Provision for income taxes
|
(78,398
|
)
|
(31,117
|
)
|
(187,798
|
)
|
(80,332
|
)
|
||||||||
Net income
|
132,348
|
47,177
|
317,769
|
135,980
|
||||||||||||
Less: Net income allocated to preferred shareholder
|
―
|
(11,342
|
)
|
―
|
(32,818
|
)
|
||||||||||
Less: Net income allocated to unvested restricted stock
|
(294
|
)
|
(93
|
)
|
(635
|
)
|
(274
|
)
|
||||||||
Net income available to common stockholders
|
$
|
132,054
|
$
|
35,742
|
$
|
317,134
|
$
|
102,888
|
||||||||
Income Per Common Share:
|
||||||||||||||||
Basic
|
$
|
1.12
|
$
|
0.65
|
$
|
2.66
|
$
|
1.87
|
||||||||
Diluted
|
$
|
0.97
|
$
|
0.59
|
$
|
2.34
|
$
|
1.71
|
||||||||
Weighted Average Common Shares Outstanding:
|
||||||||||||||||
Basic
|
118,338,891
|
55,345,443
|
119,188,145
|
55,059,683
|
||||||||||||
Diluted
|
136,077,415
|
62,292,524
|
136,888,927
|
62,152,754
|
||||||||||||
Weighted average additional common shares outstanding
|
||||||||||||||||
if preferred shares converted to common shares
|
―
|
17,562,557
|
―
|
17,562,557
|
||||||||||||
Total weighted average diluted common shares outstanding
|
||||||||||||||||
if preferred shares converted to common shares
|
136,077,415
|
79,855,081
|
136,888,927
|
79,715,311
|
||||||||||||
Cash Dividends Declared Per Common Share
|
$
|
0.04
|
$
|
―
|
$
|
0.12
|
$
|
―
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Net income
|
$
|
132,348
|
$
|
47,177
|
$
|
317,769
|
$
|
135,980
|
||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Unrealized gain on marketable securities, available for sale
|
―
|
―
|
39
|
―
|
||||||||||||
Total comprehensive income
|
$
|
132,348
|
$
|
47,177
|
$
|
317,808
|
$
|
135,980
|
September 30,
2016 |
December 31,
2015 |
|||||||
(Dollars in thousands) | ||||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Homebuilding:
|
||||||||
Cash and equivalents
|
$
|
184,033
|
$
|
151,076
|
||||
Restricted cash
|
29,796
|
35,990
|
||||||
Inventories:
|
||||||||
Owned
|
6,533,047
|
6,069,959
|
||||||
Not owned
|
75,484
|
83,246
|
||||||
Investments in unconsolidated joint ventures
|
139,373
|
132,763
|
||||||
Deferred income taxes, net of valuation allowance of $1,441 and $1,156 at
|
||||||||
September 30, 2016 and December 31, 2015, respectively
|
323,955
|
396,194
|
||||||
Goodwill
|
970,185
|
933,360
|
||||||
Other assets
|
109,348
|
118,768
|
||||||
Total Homebuilding Assets
|
8,365,221
|
7,921,356
|
||||||
Financial Services:
|
||||||||
Cash and equivalents
|
30,241
|
35,518
|
||||||
Restricted cash
|
21,799
|
22,914
|
||||||
Mortgage loans held for sale, net
|
171,262
|
325,770
|
||||||
Mortgage loans held for investment, net
|
24,450
|
22,704
|
||||||
Other assets
|
19,488
|
17,243
|
||||||
Total Financial Services Assets
|
267,240
|
424,149
|
||||||
Total Assets
|
$
|
8,632,461
|
$
|
8,345,505
|
||||
LIABILITIES AND EQUITY
|
||||||||
Homebuilding:
|
||||||||
Accounts payable
|
$
|
204,803
|
$
|
191,681
|
||||
Accrued liabilities
|
533,794
|
478,793
|
||||||
Revolving credit facility
|
146,000
|
―
|
||||||
Secured project debt and other notes payable
|
40,930
|
25,683
|
||||||
Senior notes payable
|
3,393,799
|
3,462,016
|
||||||
Total Homebuilding Liabilities
|
4,319,326
|
4,158,173
|
||||||
Financial Services:
|
||||||||
Accounts payable and other liabilities
|
16,802
|
22,474
|
||||||
Mortgage credit facilities
|
161,898
|
303,422
|
||||||
Total Financial Services Liabilities
|
178,700
|
325,896
|
||||||
Total Liabilities
|
4,498,026
|
4,484,069
|
||||||
Equity:
|
||||||||
Stockholders' Equity:
|
||||||||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued
|
||||||||
and outstanding at September 30, 2016 and December 31, 2015
|
―
|
―
|
||||||
Common stock, $0.01 par value; 600,000,000 shares authorized; 117,348,095
|
||||||||
and 121,286,153 shares issued and outstanding at September 30, 2016 and
|
||||||||
December 31, 2015, respectively
|
1,173
|
1,213
|
||||||
Additional paid-in capital
|
3,293,823
|
3,324,328
|
||||||
Accumulated earnings
|
839,395
|
535,890
|
||||||
Accumulated other comprehensive income, net of tax
|
44
|
5
|
||||||
Total Equity
|
4,134,435
|
3,861,436
|
||||||
Total Liabilities and Equity
|
$
|
8,632,461
|
$
|
8,345,505
|
Nine Months Ended September 30,
|
||||||||
2016
|
2015
|
|||||||
(Dollars in thousands) | ||||||||
(Unaudited) | ||||||||
Cash Flows From Operating Activities:
|
||||||||
Net income
|
$
|
317,769
|
$
|
135,980
|
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
(Income) loss from unconsolidated joint ventures
|
(2,643
|
)
|
381
|
|||||
Depreciation and amortization
|
43,193
|
22,369
|
||||||
Amortization of stock-based compensation
|
11,216
|
8,620
|
||||||
Excess tax benefits from share-based payment arrangements
|
―
|
(8,573
|
)
|
|||||
Deferred income tax provision
|
8,118
|
52,132
|
||||||
Other operating activities
|
100
|
633
|
||||||
Changes in cash and equivalents due to:
|
||||||||
Mortgage loans held for sale
|
154,622
|
88,360
|
||||||
Inventories - owned
|
(366,095
|
)
|
(521,646
|
)
|
||||
Inventories - not owned
|
(29,192
|
)
|
(21,612
|
)
|
||||
Other assets
|
7,665
|
8,862
|
||||||
Accounts payable
|
13,122
|
37,669
|
||||||
Accrued liabilities
|
9,787
|
(19,005
|
)
|
|||||
Net cash provided by (used in) operating activities
|
167,662
|
(215,830
|
)
|
|||||
Cash Flows From Investing Activities:
|
||||||||
Investments in unconsolidated homebuilding joint ventures
|
(27,000
|
)
|
(83,288
|
)
|
||||
Distributions of capital from unconsolidated homebuilding joint ventures
|
23,727
|
10,289
|
||||||
Other investing activities
|
(5,389
|
)
|
(11,716
|
)
|
||||
Net cash provided by (used in) investing activities
|
(8,662
|
)
|
(84,715
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Change in restricted cash
|
7,309
|
1,047
|
||||||
Borrowings from revolving credit facility
|
1,008,000
|
491,400
|
||||||
Principal payments on revolving credit facility
|
(862,000
|
)
|
(222,700
|
)
|
||||
Principal payments on secured project debt and other notes payable
|
(10,389
|
)
|
(569
|
)
|
||||
Principal payments on senior notes payable
|
(280,000
|
)
|
(29,789
|
)
|
||||
Proceeds from the issuance of senior notes payable
|
300,000
|
―
|
||||||
Payment of debt issuance costs
|
(2,657
|
)
|
―
|
|||||
Net proceeds from (payments on) mortgage credit facilities
|
(141,524
|
)
|
(10,554
|
)
|
||||
Repurchases of common stock
|
(137,464
|
)
|
(22,073
|
)
|
||||
Common stock dividend payments
|
(14,264
|
)
|
―
|
|||||
Issuance of common stock under employee stock plans, net of tax withholdings
|
1,868
|
(461
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
―
|
8,573
|
||||||
Other financing activities
|
(199
|
)
|
―
|
|||||
Net cash provided by (used in) financing activities
|
(131,320
|
)
|
214,874
|
|||||
Net increase (decrease) in cash and equivalents
|
27,680
|
(85,671
|
)
|
|||||
Cash and equivalents at beginning of period
|
186,594
|
212,393
|
||||||
Cash and equivalents at end of period
|
$
|
214,274
|
$
|
126,722
|
||||
Cash and equivalents at end of period
|
$
|
214,274
|
$
|
126,722
|
||||
Homebuilding restricted cash at end of period
|
29,796
|
37,425
|
||||||
Financial services restricted cash at end of period
|
21,799
|
1,045
|
||||||
Cash and equivalents and restricted cash at end of period
|
$
|
265,869
|
$
|
165,192
|
Cash and cash equivalents
|
$
|
268,517
|
||
Inventories
|
2,404,765
|
|||
Investments in unconsolidated joint ventures
|
13,821
|
|||
Deferred income taxes
|
120,615
|
|||
Homebuilding other assets
|
77,124
|
|||
Financial services assets, excluding cash
|
144,889
|
|||
Goodwill
|
970,185
|
|||
Total assets
|
3,999,916
|
|||
Accounts payable and accrued liabilities
|
(495,425
|
)
|
||
Secured project debt and other notes payables
|
(22,213
|
)
|
||
Senior notes payable
|
(1,291,541
|
)
|
||
Financial services liabilities
|
(124,619
|
)
|
||
Additional paid-in capital
|
(93,834
|
)
|
||
Total purchase price
|
$
|
1,972,284
|
Three Months Ended
September 30, 2015 |
Nine Months Ended
September 30, 2015 |
|||||||
(Dollars in thousands)
|
||||||||
Home sale revenues
|
$
|
1,318,885
|
$
|
3,619,912
|
||||
Pretax income
|
$
|
142,352
|
$
|
383,655
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Homebuilding revenues:
|
||||||||||||||||
North
|
$
|
283,060
|
$
|
n/a
|
|
$
|
710,889
|
$
|
n/a
|
|
||||||
Southeast
|
400,720
|
211,759
|
1,065,038
|
556,330
|
||||||||||||
Southwest
|
389,160
|
155,595
|
1,165,797
|
461,304
|
||||||||||||
West
|
598,018
|
284,836
|
1,493,279
|
804,466
|
||||||||||||
Total homebuilding revenues
|
$
|
1,670,958
|
$
|
652,190
|
$
|
4,435,003
|
$
|
1,822,100
|
||||||||
Homebuilding pretax income (1):
|
||||||||||||||||
North
|
$
|
25,627
|
$
|
n/a
|
|
$
|
53,177
|
$
|
n/a
|
|
||||||
Southeast
|
31,303
|
19,379
|
84,125
|
44,909
|
||||||||||||
Southwest
|
39,312
|
16,552
|
113,145
|
49,817
|
||||||||||||
West
|
104,697
|
39,516
|
230,231
|
114,713
|
||||||||||||
Total homebuilding pretax income
|
$
|
200,939
|
$
|
75,447
|
$
|
480,678
|
$
|
209,439
|
(1)
|
Homebuilding pretax income includes depreciation and amortization expense of $1.7 million, $4.2 million, $2.8 million and $7.1 million, respectively, in the North, Southeast, Southwest and West for the quarter ended September 30, 2016 and $4.5 million, $11.2 million, $8.6 million and $18.9 million, respectively, in the North, Southeast, Southwest and West for the nine months ended September 30, 2016.
|
September 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(Dollars in thousands)
|
||||||||
Homebuilding assets:
|
||||||||
North
|
$
|
1,158,975
|
$
|
732,689
|
||||
Southeast
|
2,189,173
|
1,766,241
|
||||||
Southwest
|
1,874,226
|
1,470,654
|
||||||
West
|
2,613,248
|
2,357,597
|
||||||
Corporate (1)
|
529,599
|
1,594,175
|
||||||
Total homebuilding assets
|
$
|
8,365,221
|
$
|
7,921,356
|
(1)
|
The assets in our Corporate Segment include cash and cash equivalents and our deferred tax asset, and at December 31, 2015 included $0.9 billion of goodwill recorded in connection with our merger with Ryland. During the 2016 second quarter, recorded goodwill was allocated to the Company's reporting units (as of September 30, 2016, approximately $0.3 billion was included in each of the North, Southeast and Southwest segments, and approximately $0.1 billion was included in the West segment).
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$
|
132,348
|
$
|
47,177
|
$
|
317,769
|
$
|
135,980
|
||||||||
Less: Net income allocated to preferred shareholder
|
―
|
(11,342
|
)
|
―
|
(32,818
|
)
|
||||||||||
Less: Net income allocated to unvested restricted stock
|
(294
|
)
|
(93
|
)
|
(635
|
)
|
(274
|
)
|
||||||||
Net income available to common stockholders for basic
|
||||||||||||||||
earnings per common share
|
132,054
|
35,742
|
317,134
|
102,888
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Net income allocated to preferred shareholder
|
―
|
11,342
|
―
|
32,818
|
||||||||||||
Interest on 1.625% convertible senior notes due 2018
|
91
|
―
|
1,088
|
―
|
||||||||||||
Interest on 0.25% convertible senior notes due 2019
|
82
|
―
|
984
|
―
|
||||||||||||
Interest on 1.25% convertible senior notes due 2032
|
62
|
41
|
744
|
490
|
||||||||||||
Net income available to common and preferred stock for diluted
|
||||||||||||||||
earnings per share
|
$
|
132,289
|
$
|
47,125
|
$
|
319,950
|
$
|
136,196
|
||||||||
Denominator:
|
||||||||||||||||
Weighted average basic common shares outstanding
|
118,338,891
|
55,345,443
|
119,188,145
|
55,059,683
|
||||||||||||
Weighted average additional common shares outstanding if preferred shares
|
||||||||||||||||
converted to common shares (if dilutive)
|
―
|
17,562,557
|
―
|
17,562,557
|
||||||||||||
Total weighted average common shares outstanding if preferred shares
|
||||||||||||||||
converted to common shares
|
118,338,891
|
72,908,000
|
119,188,145
|
72,622,240
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Share-based awards
|
643,602
|
684,511
|
605,860
|
830,501
|
||||||||||||
1.625% convertible senior notes due 2018
|
7,165,845
|
―
|
7,165,845
|
―
|
||||||||||||
0.25% convertible senior notes due 2019
|
3,638,080
|
―
|
3,638,080
|
―
|
||||||||||||
1.25% convertible senior notes due 2032
|
6,290,997
|
6,262,570
|
6,290,997
|
6,262,570
|
||||||||||||
Weighted average diluted shares outstanding
|
136,077,415
|
79,855,081
|
136,888,927
|
79,715,311
|
||||||||||||
Income per common share:
|
||||||||||||||||
Basic
|
$
|
1.12
|
$
|
0.65
|
$
|
2.66
|
$
|
1.87
|
||||||||
Diluted
|
$
|
0.97
|
$
|
0.59
|
$
|
2.34
|
$
|
1.71
|
|
September 30, 2016
|
December 31, 2015
|
|||||||||||
|
Amortized
Cost
|
Gross Unrealized Gains
|
Estimated
Fair Value
|
Amortized
Cost
|
Gross Unrealized Gains
|
Estimated
Fair Value
|
|||||||
|
(Dollars in thousands)
|
||||||||||||
Type of security:
|
|
||||||||||||
Municipal bond and metropolitan district securities
|
|
$ 18,438
|
$ 44
|
$ 18,482
|
$ 19,439
|
$ 5
|
$ 19,444
|
September 30, 2016
|
||||
(Dollars in thousands)
|
||||
Contractual maturity:
|
||||
Maturing in one year or less
|
$
|
―
|
||
Maturing after three years
|
18,482
|
|||
Total marketable securities, available-for-sale
|
$
|
18,482
|
September 30, 2016
|
||||||||||||||||||||
North
|
Southeast
|
Southwest
|
West
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Land and land under development (1)
|
$
|
441,119
|
$
|
1,121,369
|
$
|
631,520
|
$
|
1,258,888
|
$
|
3,452,896
|
||||||||||
Homes completed and under construction
|
341,535
|
651,531
|
713,662
|
874,834
|
2,581,562
|
|||||||||||||||
Model homes
|
76,905
|
131,147
|
115,784
|
174,753
|
498,589
|
|||||||||||||||
Total inventories owned
|
$
|
859,559
|
$
|
1,904,047
|
$
|
1,460,966
|
$
|
2,308,475
|
$
|
6,533,047
|
||||||||||
December 31, 2015
|
||||||||||||||||||||
North
|
Southeast
|
Southwest
|
West
|
Total
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Land and land under development (1)
|
$
|
370,584
|
$
|
1,169,350
|
$
|
687,792
|
$
|
1,318,563
|
$
|
3,546,289
|
||||||||||
Homes completed and under construction
|
266,967
|
464,668
|
599,183
|
708,779
|
2,039,597
|
|||||||||||||||
Model homes
|
66,100
|
119,283
|
113,549
|
185,141
|
484,073
|
|||||||||||||||
Total inventories owned
|
$
|
703,651
|
$
|
1,753,301
|
$
|
1,400,524
|
$
|
2,212,483
|
$
|
6,069,959
|
(1)
|
During the nine months ended September 30, 2016, we purchased $680.9 million of land (10,048 homesites), of which 25% (based on homesites) were located in the North, 25% in the Southeast, 25% in the Southwest, and 25% in the West. During the year ended December 31, 2015, we purchased $515.3 million of land (6,631 homesites) and acquired an additional 40,245 homesites as a result of the merger with Ryland. The homesites we purchased during 2015, other than through the merger, were located as follows: 12% (based on homesites) were located in the North, 39% in the Southeast, 18% in the Southwest, and 31% in the West.
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Total interest incurred (1)
|
$
|
56,872
|
$
|
42,304
|
$
|
175,207
|
$
|
125,964
|
||||||||
Less: Interest capitalized to inventories owned (1)
|
(55,761
|
)
|
(41,611
|
)
|
(172,170
|
)
|
(124,520
|
)
|
||||||||
Less: Interest capitalized to investments in unconsolidated joint ventures
|
(1,111
|
)
|
(693
|
)
|
(3,037
|
)
|
(1,444
|
)
|
||||||||
Interest expense
|
$
|
―
|
$
|
―
|
$
|
―
|
$
|
―
|
||||||||
Interest previously capitalized to inventories owned, included in cost of home sales
|
$
|
44,636
|
$
|
30,275
|
$
|
115,367
|
$
|
87,721
|
||||||||
Interest previously capitalized to inventories owned, included in cost of land sales
|
$
|
115
|
$
|
3,048
|
$
|
1,596
|
$
|
4,803
|
||||||||
Interest previously capitalized to investments in unconsolidated joint ventures,
|
||||||||||||||||
included in income (loss) from unconsolidated joint ventures
|
$
|
613
|
$
|
―
|
$
|
613
|
$
|
―
|
||||||||
Interest capitalized in ending inventories owned (2)
|
$
|
362,807
|
$
|
307,603
|
$
|
362,807
|
$
|
307,603
|
||||||||
Interest capitalized as a percentage of inventories owned
|
5.6
|
%
|
8.1
|
%
|
5.6
|
%
|
8.1
|
%
|
||||||||
Interest capitalized in ending investments in unconsolidated joint ventures (2)
|
$
|
3,224
|
$
|
2,109
|
$
|
3,224
|
$
|
2,109
|
||||||||
Interest capitalized as a percentage of investments in unconsolidated joint ventures
|
2.3
|
%
|
1.7
|
%
|
2.3
|
%
|
1.7
|
%
|
(1)
|
Total interest incurred and interest capitalized to inventories owned during the nine months ended September 30, 2016 includes a $9 million increase related to the valuation of the 1.625% convertible senior notes that was completed during the 2016 first quarter. Please see Note 3 for further discussion.
|
(2)
|
During the three and nine months ended September 30, 2016, in connection with lot purchases from our joint ventures, $1.6 million and $2.1 million, respectively, of capitalized interest was transferred from investments in unconsolidated joint ventures to inventories owned.
|
Nine Months Ended
September 30, |
||||||||
2016
|
2015
|
|||||||
(Dollars in thousands)
|
||||||||
(Unaudited)
|
||||||||
Revenues
|
$
|
27,426
|
$
|
22,350
|
||||
Cost of sales and expenses
|
(17,791
|
)
|
(25,444
|
)
|
||||
Income (loss) of unconsolidated joint ventures
|
$
|
9,635
|
$
|
(3,094
|
)
|
|||
Income (loss) from unconsolidated joint ventures reflected in the
|
||||||||
accompanying condensed consolidated statements of operations
|
$
|
2,643
|
$
|
(381
|
)
|
September 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(Dollars in thousands)
|
||||||||
(Unaudited)
|
||||||||
Assets:
|
||||||||
Cash
|
$
|
33,799
|
$
|
34,893
|
||||
Inventories
|
600,056
|
510,502
|
||||||
Other assets
|
11,872
|
14,540
|
||||||
Total assets
|
$
|
645,727
|
$
|
559,935
|
||||
Liabilities and Equity:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
37,176
|
$
|
26,571
|
||||
Non-recourse debt
|
30,683
|
33,704
|
||||||
CalAtlantic equity
|
159,214
|
130,750
|
||||||
Other members' equity
|
418,654
|
368,910
|
||||||
Total liabilities and equity
|
$
|
645,727
|
$
|
559,935
|
||||
Investments in unconsolidated joint ventures reflected in
|
||||||||
the accompanying condensed consolidated balance sheets (1)
|
$
|
139,373
|
$
|
132,763
|
(1)
|
As of September 30, 2016, our investments in unconsolidated joint ventures consisted of $127.6 million, $5.9 million, $0.3 million and $5.6 million, within our West, Southwest, Southeast and North reportable segments, respectively. As of December 31, 2015, our investments in unconsolidated joint ventures consisted of $121.3 million, $5.6 million, $0.3 million and $5.6 million, within our West, Southwest, Southeast and North reportable segments, respectively.
|
Nine Months Ended September 30,
|
||||||||
2016
|
2015
|
|||||||
(Dollars in thousands)
|
||||||||
Warranty accrual, beginning of the period
|
$
|
40,691
|
$
|
13,584
|
||||
Warranty costs accrued during the period
|
16,903
|
7,403
|
||||||
Warranty costs paid during the period
|
(15,088
|
)
|
(7,119
|
)
|
||||
Warranty accrual, end of the period
|
$
|
42,506
|
$
|
13,868
|
September 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(Dollars in thousands)
|
||||||||
10.75% Senior Notes due September 2016
|
$
|
―
|
$
|
275,845
|
||||
8.4% Senior Notes due May 2017
|
238,625
|
248,975
|
||||||
8.375% Senior Notes due May 2018
|
574,397
|
574,058
|
||||||
1.625% Convertible Senior Notes due May 2018
|
219,396
|
301,754
|
||||||
0.25% Convertible Senior notes due June 2019
|
252,357
|
248,098
|
||||||
6.625% Senior Notes due May 2020
|
321,402
|
325,882
|
||||||
8.375% Senior Notes due January 2021
|
394,970
|
394,152
|
||||||
6.25% Senior Notes due December 2021
|
297,504
|
297,148
|
||||||
5.375% Senior Notes due October 2022
|
249,197
|
249,096
|
||||||
5.875% Senior Notes due November 2024
|
296,886
|
296,598
|
||||||
5.25% Senior Notes due June 2026
|
297,428
|
―
|
||||||
1.25% Convertible Senior Notes due August 2032
|
251,637
|
250,410
|
||||||
$
|
3,393,799
|
$
|
3,462,016
|
Fair Value at
|
|||||||||
Description
|
Fair Value Hierarchy
|
September 30,
2016 |
December 31,
2015 |
||||||
(Dollars in thousands) | |||||||||
|
|||||||||
Marketable securities, available-for-sale
|
|||||||||
Municipal debt securities
|
|
Level 2
|
|
$
|
9,771
|
$
|
9,734
|
||
Metropolitan district bond securities
|
|
Level 3
|
$
|
8,711
|
$
|
9,710
|
|||
Mortgage loans held for sale
|
|
Level 2
|
|
$
|
173,568
|
$
|
328,835
|
September 30, 2016
|
December 31, 2015
|
||||||||||||||
Description
|
Fair Value Hierarchy
|
|
Carrying
Amount |
|
Fair Value
|
|
Carrying
Amount |
|
Fair Value
|
||||||
(Dollars in thousands) | |||||||||||||||
|
|||||||||||||||
Financial services assets:
|
|
||||||||||||||
Mortgage loans held for investment, net
|
|
Level 2
|
|
$
|
24,450
|
$
|
24,450
|
$
|
22,704
|
$
|
22,704
|
||||
Homebuilding liabilities:
|
|
||||||||||||||
Senior and convertible senior notes payable, net
|
|
Level 2
|
|
$
|
3,393,799
|
$
|
3,677,455
|
$
|
3,462,016
|
$
|
3,675,276
|
Nine Months Ended September 30,
|
|||||||||||
2016
|
2015
|
||||||||||
(Dollars in thousands)
|
|||||||||||
Supplemental Disclosures of Cash Flow Information:
|
|
||||||||||
Cash paid during the period for:
|
|
||||||||||
Income taxes
|
|
$
|
150,822
|
$
|
66,310
|
||||||
Supplemental Disclosures of Noncash Activities: | |||||||||||
Increase in secured project debt related to seller financed inventory purchases | $ | 25,625 | $ | 1,725 |
Three Months Ended September 30, 2016
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor Subsidiaries
|
Non-
Guarantor Subsidiaries |
Consolidating Adjustments
|
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Revenues
|
$
|
707,397
|
$
|
656,095
|
$
|
307,466
|
$
|
―
|
$
|
1,670,958
|
||||||||||
Cost of sales
|
(561,856
|
)
|
(520,810
|
)
|
(213,600
|
)
|
―
|
(1,296,266
|
)
|
|||||||||||
Gross margin
|
145,541
|
135,285
|
93,866
|
―
|
374,692
|
|||||||||||||||
Selling, general and administrative expenses
|
(75,217
|
)
|
(75,834
|
)
|
(19,764
|
)
|
―
|
(170,815
|
)
|
|||||||||||
Income (loss) from unconsolidated joint ventures
|
(717
|
)
|
44
|
1,904
|
―
|
1,231
|
||||||||||||||
Equity income of subsidiaries
|
95,380
|
―
|
―
|
(95,380
|
)
|
―
|
||||||||||||||
Interest income (expense), net
|
1,075
|
(886
|
)
|
(189
|
)
|
―
|
―
|
|||||||||||||
Other income (expense)
|
(3,602
|
)
|
(762
|
)
|
195
|
―
|
(4,169
|
)
|
||||||||||||
Homebuilding pretax income
|
162,460
|
57,847
|
76,012
|
(95,380
|
)
|
200,939
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Financial services pretax income
|
―
|
―
|
9,807
|
―
|
9,807
|
|||||||||||||||
Income before taxes
|
162,460
|
57,847
|
85,819
|
(95,380
|
)
|
210,746
|
||||||||||||||
Provision for income taxes
|
(30,112
|
)
|
(23,111
|
)
|
(25,175
|
)
|
―
|
(78,398
|
)
|
|||||||||||
Net income
|
$
|
132,348
|
$
|
34,736
|
$
|
60,644
|
$
|
(95,380
|
)
|
$
|
132,348
|
Three Months Ended September 30, 2015
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor Subsidiaries
|
Non-
Guarantor Subsidiaries |
Consolidating Adjustments
|
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Revenues
|
$
|
172,420
|
$
|
296,420
|
$
|
183,350
|
$
|
―
|
$
|
652,190
|
||||||||||
Cost of sales
|
(132,775
|
)
|
(226,945
|
)
|
(132,714
|
)
|
―
|
(492,434
|
)
|
|||||||||||
Gross margin
|
39,645
|
69,475
|
50,636
|
―
|
159,756
|
|||||||||||||||
Selling, general and administrative expenses
|
(21,582
|
)
|
(37,660
|
)
|
(14,018
|
)
|
―
|
(73,260
|
)
|
|||||||||||
Income (loss) from unconsolidated joint ventures
|
14
|
―
|
107
|
―
|
121
|
|||||||||||||||
Equity income of subsidiaries
|
48,155
|
―
|
―
|
(48,155
|
)
|
―
|
||||||||||||||
Interest income (expense), net
|
3,109
|
(2,160
|
)
|
(949
|
)
|
―
|
―
|
|||||||||||||
Other income (expense)
|
(11,782
|
)
|
(212
|
)
|
824
|
―
|
(11,170
|
)
|
||||||||||||
Homebuilding pretax income
|
57,559
|
29,443
|
36,600
|
(48,155
|
)
|
75,447
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Financial services pretax income
|
―
|
―
|
2,847
|
―
|
2,847
|
|||||||||||||||
Income before taxes
|
57,559
|
29,443
|
39,447
|
(48,155
|
)
|
78,294
|
||||||||||||||
Provision for income taxes
|
(10,382
|
)
|
(13,931
|
)
|
(6,804
|
)
|
―
|
(31,117
|
)
|
|||||||||||
Net income
|
$
|
47,177
|
$
|
15,512
|
$
|
32,643
|
$
|
(48,155
|
)
|
$
|
47,177
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor Subsidiaries
|
Non-
Guarantor Subsidiaries |
Consolidating Adjustments
|
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Revenues
|
$
|
1,817,935
|
$
|
1,866,598
|
$
|
750,470
|
$
|
―
|
$
|
4,435,003
|
||||||||||
Cost of sales
|
(1,451,579
|
)
|
(1,486,644
|
)
|
(533,543
|
)
|
―
|
(3,471,766
|
)
|
|||||||||||
Gross margin
|
366,356
|
379,954
|
216,927
|
―
|
963,237
|
|||||||||||||||
Selling, general and administrative expenses
|
(201,503
|
)
|
(220,595
|
)
|
(51,112
|
)
|
―
|
(473,210
|
)
|
|||||||||||
Income (loss) from unconsolidated joint ventures
|
29
|
444
|
2,170
|
―
|
2,643
|
|||||||||||||||
Equity income of subsidiaries
|
229,414
|
―
|
―
|
(229,414
|
)
|
―
|
||||||||||||||
Interest income (expense), net
|
3,685
|
(2,785
|
)
|
(900
|
)
|
―
|
―
|
|||||||||||||
Other income (expense)
|
(10,885
|
)
|
(1,241
|
)
|
134
|
―
|
(11,992
|
)
|
||||||||||||
Homebuilding pretax income
|
387,096
|
155,777
|
167,219
|
(229,414
|
)
|
480,678
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Financial services pretax income
|
―
|
―
|
24,889
|
―
|
24,889
|
|||||||||||||||
Income before taxes
|
387,096
|
155,777
|
192,108
|
(229,414
|
)
|
505,567
|
||||||||||||||
Provision for income taxes
|
(69,327
|
)
|
(66,659
|
)
|
(51,812
|
)
|
―
|
(187,798
|
)
|
|||||||||||
Net income
|
$
|
317,769
|
$
|
89,118
|
$
|
140,296
|
$
|
(229,414
|
)
|
$
|
317,769
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor Subsidiaries
|
Non-
Guarantor Subsidiaries |
Consolidating Adjustments
|
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Revenues
|
$
|
500,500
|
$
|
840,513
|
$
|
481,087
|
$
|
―
|
$
|
1,822,100
|
||||||||||
Cost of sales
|
(380,929
|
)
|
(646,798
|
)
|
(348,571
|
)
|
―
|
(1,376,298
|
)
|
|||||||||||
Gross margin
|
119,571
|
193,715
|
132,516
|
―
|
445,802
|
|||||||||||||||
Selling, general and administrative expenses
|
(69,121
|
)
|
(110,934
|
)
|
(39,185
|
)
|
―
|
(219,240
|
)
|
|||||||||||
Income (loss) from unconsolidated joint ventures
|
36
|
―
|
(417
|
)
|
―
|
(381
|
)
|
|||||||||||||
Equity income of subsidiaries
|
121,691
|
―
|
―
|
(121,691
|
)
|
―
|
||||||||||||||
Interest income (expense), net
|
9,507
|
(7,369
|
)
|
(2,138
|
)
|
―
|
―
|
|||||||||||||
Other income (expense)
|
(19,223
|
)
|
(435
|
)
|
2,916
|
―
|
(16,742
|
)
|
||||||||||||
Homebuilding pretax income
|
162,461
|
74,977
|
93,692
|
(121,691
|
)
|
209,439
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Financial services pretax income
|
―
|
―
|
6,873
|
―
|
6,873
|
|||||||||||||||
Income before taxes
|
162,461
|
74,977
|
100,565
|
(121,691
|
)
|
216,312
|
||||||||||||||
Provision for income taxes
|
(26,481
|
)
|
(34,502
|
)
|
(19,349
|
)
|
―
|
(80,332
|
)
|
|||||||||||
Net income
|
$
|
135,980
|
$
|
40,475
|
$
|
81,216
|
$
|
(121,691
|
)
|
$
|
135,980
|
September 30, 2016
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor
Subsidiaries |
Non-Guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Cash and equivalents
|
$
|
118,170
|
$
|
30,931
|
$
|
34,932
|
$
|
―
|
$
|
184,033
|
||||||||||
Restricted cash
|
―
|
―
|
29,796
|
―
|
29,796
|
|||||||||||||||
Intercompany receivables
|
2,110,248
|
―
|
235,105
|
(2,345,353
|
)
|
―
|
||||||||||||||
Inventories:
|
||||||||||||||||||||
Owned
|
2,850,899
|
2,350,260
|
1,331,888
|
―
|
6,533,047
|
|||||||||||||||
Not owned
|
38,300
|
32,841
|
4,343
|
―
|
75,484
|
|||||||||||||||
Investments in unconsolidated joint ventures
|
4,358
|
4,696
|
130,319
|
―
|
139,373
|
|||||||||||||||
Investments in subsidiaries
|
1,855,517
|
―
|
―
|
(1,855,517
|
)
|
―
|
||||||||||||||
Deferred income taxes, net
|
342,413
|
―
|
―
|
(18,458
|
)
|
323,955
|
||||||||||||||
Goodwill and other intangibles, net
|
970,185
|
―
|
―
|
―
|
970,185
|
|||||||||||||||
Other assets
|
62,148
|
44,449
|
2,751
|
―
|
109,348
|
|||||||||||||||
Total Homebuilding Assets
|
8,352,238
|
2,463,177
|
1,769,134
|
(4,219,328
|
)
|
8,365,221
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Cash and equivalents
|
―
|
―
|
30,241
|
―
|
30,241
|
|||||||||||||||
Restricted cash
|
―
|
―
|
21,799
|
―
|
21,799
|
|||||||||||||||
Mortgage loans held for sale, net
|
―
|
―
|
171,262
|
―
|
171,262
|
|||||||||||||||
Mortgage loans held for investment, net
|
―
|
―
|
24,450
|
―
|
24,450
|
|||||||||||||||
Other assets
|
―
|
―
|
21,131
|
(1,643
|
)
|
19,488
|
||||||||||||||
Total Financial Services Assets
|
―
|
―
|
268,883
|
(1,643
|
)
|
267,240
|
||||||||||||||
Total Assets
|
$
|
8,352,238
|
$
|
2,463,177
|
$
|
2,038,017
|
$
|
(4,220,971
|
)
|
$
|
8,632,461
|
|||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Accounts payable
|
$
|
99,023
|
$
|
78,204
|
$
|
27,576
|
$
|
―
|
$
|
204,803
|
||||||||||
Accrued liabilities and intercompany payables
|
306,603
|
1,408,418
|
949,122
|
(2,130,349
|
)
|
533,794
|
||||||||||||||
Revolving credit facility
|
146,000
|
―
|
―
|
―
|
146,000
|
|||||||||||||||
Secured project debt and other notes payable
|
272,378
|
―
|
3,657
|
(235,105
|
)
|
40,930
|
||||||||||||||
Senior notes payable
|
3,393,799
|
―
|
―
|
―
|
3,393,799
|
|||||||||||||||
Total Homebuilding Liabilities
|
4,217,803
|
1,486,622
|
980,355
|
(2,365,454
|
)
|
4,319,326
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Accounts payable and other liabilities
|
―
|
―
|
16,802
|
―
|
16,802
|
|||||||||||||||
Mortgage credit facilities
|
―
|
―
|
161,898
|
―
|
161,898
|
|||||||||||||||
Total Financial Services Liabilities
|
―
|
―
|
178,700
|
―
|
178,700
|
|||||||||||||||
Total Liabilities
|
4,217,803
|
1,486,622
|
1,159,055
|
(2,365,454
|
)
|
4,498,026
|
||||||||||||||
Equity:
|
||||||||||||||||||||
Total Equity
|
4,134,435
|
976,555
|
878,962
|
(1,855,517
|
)
|
4,134,435
|
||||||||||||||
Total Liabilities and Equity
|
$
|
8,352,238
|
$
|
2,463,177
|
$
|
2,038,017
|
$
|
(4,220,971
|
)
|
$
|
8,632,461
|
December 31, 2015
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor
Subsidiaries |
Non-Guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Cash and equivalents
|
$
|
6,387
|
$
|
112,852
|
$
|
31,837
|
$
|
―
|
$
|
151,076
|
||||||||||
Restricted cash
|
―
|
―
|
35,990
|
―
|
35,990
|
|||||||||||||||
Intercompany receivables
|
2,380,899
|
―
|
152,505
|
(2,533,404
|
)
|
―
|
||||||||||||||
Inventories:
|
||||||||||||||||||||
Owned
|
2,524,927
|
2,304,305
|
1,240,727
|
―
|
6,069,959
|
|||||||||||||||
Not owned
|
32,393
|
38,925
|
11,928
|
―
|
83,246
|
|||||||||||||||
Investments in unconsolidated joint ventures
|
5,353
|
4,330
|
123,080
|
―
|
132,763
|
|||||||||||||||
Investments in subsidiaries
|
1,644,453
|
―
|
―
|
(1,644,453
|
)
|
―
|
||||||||||||||
Deferred income taxes, net
|
405,945
|
―
|
―
|
(9,751
|
)
|
396,194
|
||||||||||||||
Goodwill
|
933,360
|
―
|
―
|
―
|
933,360
|
|||||||||||||||
Other assets
|
67,578
|
48,027
|
3,163
|
―
|
118,768
|
|||||||||||||||
Total Homebuilding Assets
|
8,001,295
|
2,508,439
|
1,599,230
|
(4,187,608
|
)
|
7,921,356
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Cash and equivalents
|
―
|
―
|
35,518
|
―
|
35,518
|
|||||||||||||||
Restricted cash
|
―
|
―
|
22,914
|
―
|
22,914
|
|||||||||||||||
Mortgage loans held for sale, net
|
―
|
―
|
325,770
|
―
|
325,770
|
|||||||||||||||
Mortgage loans held for investment, net
|
―
|
―
|
22,704
|
―
|
22,704
|
|||||||||||||||
Other assets
|
―
|
―
|
18,886
|
(1,643
|
)
|
17,243
|
||||||||||||||
Total Financial Services Assets
|
―
|
―
|
425,792
|
(1,643
|
)
|
424,149
|
||||||||||||||
Total Assets
|
$
|
8,001,295
|
$
|
2,508,439
|
$
|
2,025,022
|
$
|
(4,189,251
|
)
|
$
|
8,345,505
|
|||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||
Homebuilding:
|
||||||||||||||||||||
Accounts payable
|
$
|
91,873
|
$
|
82,906
|
$
|
16,902
|
$
|
―
|
$
|
191,681
|
||||||||||
Accrued liabilities and intercompany payables
|
415,803
|
1,538,096
|
903,761
|
(2,378,867
|
)
|
478,793
|
||||||||||||||
Secured project debt and other notes payable
|
170,167
|
―
|
4,061
|
(148,545
|
)
|
25,683
|
||||||||||||||
Senior notes payable
|
3,462,016
|
―
|
―
|
―
|
3,462,016
|
|||||||||||||||
Total Homebuilding Liabilities
|
4,139,859
|
1,621,002
|
924,724
|
(2,527,412
|
)
|
4,158,173
|
||||||||||||||
Financial Services:
|
||||||||||||||||||||
Accounts payable and other liabilities
|
―
|
―
|
39,860
|
(17,386
|
)
|
22,474
|
||||||||||||||
Mortgage credit facilities
|
―
|
―
|
303,422
|
―
|
303,422
|
|||||||||||||||
Total Financial Services Liabilities
|
―
|
―
|
343,282
|
(17,386
|
)
|
325,896
|
||||||||||||||
Total Liabilities
|
4,139,859
|
1,621,002
|
1,268,006
|
(2,544,798
|
)
|
4,484,069
|
||||||||||||||
Equity:
|
||||||||||||||||||||
Total Equity
|
3,861,436
|
887,437
|
757,016
|
(1,644,453
|
)
|
3,861,436
|
||||||||||||||
Total Liabilities and Equity
|
$
|
8,001,295
|
$
|
2,508,439
|
$
|
2,025,022
|
$
|
(4,189,251
|
)
|
$
|
8,345,505
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor
Subsidiaries |
Non-Guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(49,169
|
)
|
$
|
16,087
|
$
|
200,744
|
$
|
―
|
$
|
167,662
|
|||||||||
Cash Flows From Investing Activities:
|
||||||||||||||||||||
Investments in unconsolidated homebuilding joint ventures
|
(235
|
)
|
(192
|
)
|
(26,573
|
)
|
―
|
(27,000
|
)
|
|||||||||||
Distributions of capital from unconsolidated homebuilding joint ventures
|
1,107
|
333
|
22,287
|
―
|
23,727
|
|||||||||||||||
Loan to parent and subsidiaries
|
―
|
―
|
(88,800
|
)
|
88,800
|
―
|
||||||||||||||
Other investing activities
|
(325
|
)
|
(1,958
|
)
|
(3,106
|
)
|
―
|
(5,389
|
)
|
|||||||||||
Net cash provided by (used in) investing activities
|
547
|
(1,817
|
)
|
(96,192
|
)
|
88,800
|
(8,662
|
)
|
||||||||||||
Cash Flows From Financing Activities:
|
||||||||||||||||||||
Change in restricted cash
|
―
|
―
|
7,309
|
―
|
7,309
|
|||||||||||||||
Borrowings from revolving credit facility
|
1,008,000
|
―
|
―
|
―
|
1,008,000
|
|||||||||||||||
Principal payments on revolving credit facility
|
(862,000
|
)
|
―
|
―
|
―
|
(862,000
|
)
|
|||||||||||||
Principal payments on secured project debt and other notes payable
|
(9,985
|
)
|
―
|
(404
|
)
|
―
|
(10,389
|
)
|
||||||||||||
Principal payments on senior notes payable
|
(280,000
|
)
|
―
|
―
|
―
|
(280,000
|
)
|
|||||||||||||
Proceeds from the issuance of senior notes payable
|
300,000
|
―
|
―
|
―
|
300,000
|
|||||||||||||||
Payment of debt issue costs
|
(2,657
|
)
|
―
|
―
|
―
|
(2,657
|
)
|
|||||||||||||
Loan from subsidiary
|
88,800
|
―
|
―
|
(88,800
|
)
|
―
|
||||||||||||||
Net proceeds from (payments on) mortgage credit facilities
|
―
|
―
|
(141,524
|
)
|
―
|
(141,524
|
)
|
|||||||||||||
(Contributions to) distributions from Corporate and subsidiaries
|
18,350
|
―
|
(18,350
|
)
|
―
|
―
|
||||||||||||||
Repurchases of common stock
|
(137,464
|
)
|
―
|
―
|
―
|
(137,464
|
)
|
|||||||||||||
Common stock dividend payments
|
(14,264
|
)
|
―
|
―
|
―
|
(14,264
|
)
|
|||||||||||||
Issuance of common stock under employee stock plans, net of tax withholdings
|
1,868
|
―
|
―
|
―
|
1,868
|
|||||||||||||||
Other financing activities
|
―
|
(199
|
)
|
―
|
―
|
(199
|
)
|
|||||||||||||
Intercompany advances, net
|
49,757
|
(95,992
|
)
|
46,235
|
―
|
―
|
||||||||||||||
Net cash provided by (used in) financing activities
|
160,405
|
(96,191
|
)
|
(106,734
|
)
|
(88,800
|
)
|
(131,320
|
)
|
|||||||||||
Net increase (decrease) in cash and equivalents
|
111,783
|
(81,921
|
)
|
(2,182
|
)
|
―
|
27,680
|
|||||||||||||
Cash and equivalents at beginning of period
|
6,387
|
112,852
|
67,355
|
―
|
186,594
|
|||||||||||||||
Cash and equivalents at end of period
|
$
|
118,170
|
$
|
30,931
|
$
|
65,173
|
$
|
―
|
$
|
214,274
|
Nine Months Ended September 30, 2015
|
||||||||||||||||||||
CalAtlantic
Group, Inc. |
Guarantor
Subsidiaries |
Non-Guarantor
Subsidiaries |
Consolidating
Adjustments |
Consolidated
CalAtlantic Group, Inc. |
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(116,827
|
)
|
$
|
(14,645
|
)
|
$
|
(84,358
|
)
|
$
|
―
|
$
|
(215,830
|
)
|
||||||
Cash Flows From Investing Activities:
|
||||||||||||||||||||
Investments in unconsolidated homebuilding joint ventures
|
―
|
―
|
(83,288
|
)
|
―
|
(83,288
|
)
|
|||||||||||||
Distributions of capital from unconsolidated homebuilding joint ventures
|
―
|
―
|
10,289
|
―
|
10,289
|
|||||||||||||||
Loan to parent and subsidiaries
|
―
|
―
|
80,000
|
(80,000
|
)
|
―
|
||||||||||||||
Other investing activities
|
(2,308
|
)
|
(1,605
|
)
|
(7,803
|
)
|
―
|
(11,716
|
)
|
|||||||||||
Net cash provided by (used in) investing activities
|
(2,308
|
)
|
(1,605
|
)
|
(802
|
)
|
(80,000
|
)
|
(84,715
|
)
|
||||||||||
Cash Flows From Financing Activities:
|
||||||||||||||||||||
Change in restricted cash
|
―
|
―
|
1,047
|
―
|
1,047
|
|||||||||||||||
Borrowings from revolving credit facility
|
491,400
|
―
|
―
|
―
|
491,400
|
|||||||||||||||
Principal payments on revolving credit facility
|
(222,700
|
)
|
―
|
―
|
―
|
(222,700
|
)
|
|||||||||||||
Principal payments on secured project debt and other notes payable
|
―
|
―
|
(569
|
)
|
―
|
(569
|
)
|
|||||||||||||
Principal payments on senior notes payable
|
(29,789
|
)
|
(29,789
|
)
|
||||||||||||||||
Net proceeds from (payments on) mortgage credit facilities
|
―
|
―
|
(90,554
|
)
|
80,000
|
(10,554
|
)
|
|||||||||||||
(Contributions to) distributions from Corporate and subsidiaries
|
14,373
|
(31,719
|
)
|
17,346
|
―
|
―
|
||||||||||||||
Repurchases of common stock
|
(22,073
|
)
|
―
|
―
|
―
|
(22,073
|
)
|
|||||||||||||
Issuance of common stock under employee stock plans, net of tax withholdings
|
(461
|
)
|
―
|
―
|
―
|
(461
|
)
|
|||||||||||||
Excess tax benefits from share-based payment arrangements
|
8,573
|
―
|
―
|
―
|
8,573
|
|||||||||||||||
Intercompany advances, net
|
(192,076
|
)
|
56,711
|
135,365
|
―
|
―
|
||||||||||||||
Net cash provided by (used in) financing activities
|
47,247
|
24,992
|
62,635
|
80,000
|
214,874
|
|||||||||||||||
Net increase (decrease) in cash and equivalents
|
(71,888
|
)
|
8,742
|
(22,525
|
)
|
―
|
(85,671
|
)
|
||||||||||||
Cash and equivalents at beginning of period
|
133,304
|
1,061
|
78,028
|
―
|
212,393
|
|||||||||||||||
Cash and equivalents at end of period
|
$
|
61,416
|
$
|
9,803
|
$
|
55,503
|
$
|
―
|
$
|
126,722
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Homebuilding:
|
||||||||||||||||
Home sale revenues
|
$
|
1,665,030
|
$
|
626,008
|
$
|
4,402,896
|
$
|
1,789,065
|
||||||||
Land sale revenues
|
5,928
|
26,182
|
32,107
|
33,035
|
||||||||||||
Total revenues
|
1,670,958
|
652,190
|
4,435,003
|
1,822,100
|
||||||||||||
Cost of home sales
|
(1,290,628
|
)
|
(467,358
|
)
|
(3,440,549
|
)
|
(1,346,108
|
)
|
||||||||
Cost of land sales
|
(5,638
|
)
|
(25,076
|
)
|
(31,217
|
)
|
(30,190
|
)
|
||||||||
Total cost of sales
|
(1,296,266
|
)
|
(492,434
|
)
|
(3,471,766
|
)
|
(1,376,298
|
)
|
||||||||
Gross margin
|
374,692
|
159,756
|
963,237
|
445,802
|
||||||||||||
Gross margin percentage
|
22.4
|
%
|
24.5
|
%
|
21.7
|
%
|
24.5
|
%
|
||||||||
Selling, general and administrative expenses
|
(170,815
|
)
|
(73,260
|
)
|
(473,210
|
)
|
(219,240
|
)
|
||||||||
Income (loss) from unconsolidated joint ventures
|
1,231
|
121
|
2,643
|
(381
|
)
|
|||||||||||
Other income (expense
|
(4,169
|
)
|
(11,170
|
)
|
(11,992
|
)
|
(16,742
|
)
|
||||||||
Homebuilding pretax income
|
200,939
|
75,447
|
480,678
|
209,439
|
||||||||||||
Financial Services:
|
||||||||||||||||
Revenues
|
21,433
|
7,011
|
59,524
|
19,815
|
||||||||||||
Expenses
|
(11,626
|
)
|
(4,164
|
)
|
(34,635
|
)
|
(12,942
|
)
|
||||||||
Financial services pretax income
|
9,807
|
2,847
|
24,889
|
6,873
|
||||||||||||
Income before taxes
|
210,746
|
78,294
|
505,567
|
216,312
|
||||||||||||
Provision for income taxes
|
(78,398
|
)
|
(31,117
|
)
|
(187,798
|
)
|
(80,332
|
)
|
||||||||
Net income
|
132,348
|
47,177
|
317,769
|
135,980
|
||||||||||||
Less: Net income allocated to preferred shareholder
|
―
|
(11,342
|
)
|
―
|
(32,818
|
)
|
||||||||||
Less: Net income allocated to unvested restricted stock
|
(294
|
)
|
(93
|
)
|
(635
|
)
|
(274
|
)
|
||||||||
Net income available to common stockholders
|
$
|
132,054
|
$
|
35,742
|
$
|
317,134
|
$
|
102,888
|
||||||||
Income Per Common Share:
|
||||||||||||||||
Basic
|
$
|
1.12
|
$
|
0.65
|
$
|
2.66
|
$
|
1.87
|
||||||||
Diluted
|
$
|
0.97
|
$
|
0.59
|
$
|
2.34
|
$
|
1.71
|
||||||||
Weighted Average Common Shares Outstanding:
|
||||||||||||||||
Basic
|
118,338,891
|
55,345,443
|
119,188,145
|
55,059,683
|
||||||||||||
Diluted
|
136,077,415
|
62,292,524
|
136,888,927
|
62,152,754
|
||||||||||||
Weighted average additional common shares outstanding
|
||||||||||||||||
if preferred shares converted to common shares
|
―
|
17,562,557
|
―
|
17,562,557
|
||||||||||||
Total weighted average diluted common shares outstanding
|
||||||||||||||||
if preferred shares converted to common shares
|
136,077,415
|
79,855,081
|
136,888,927
|
79,715,311
|
||||||||||||
Cash dividends declared per common share
|
$
|
0.04
|
$
|
―
|
$
|
0.12
|
$
|
―
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
104,048
|
$
|
(104,633
|
)
|
$
|
167,662
|
$
|
(215,830
|
)
|
||||||
Net cash provided by (used in) investing activities
|
$
|
9,981
|
$
|
(60,675
|
)
|
$
|
(8,662
|
)
|
$
|
(84,715
|
)
|
|||||
Net cash provided by (used in) financing activities
|
$
|
(187,625
|
)
|
$
|
203,717
|
$
|
(131,320
|
)
|
$
|
214,874
|
||||||
Adjusted Homebuilding EBITDA (1) | $ | 267,835 | $ | 130,769 | $ | 682,113 | $ | 350,732 |
(1)
|
Adjusted Homebuilding EBITDA means net income (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense, (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) gain (loss) on early extinguishment of debt, (f) homebuilding depreciation and amortization, including amortization of capitalized model costs, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures, (i) income (loss) from financial services subsidiaries, (j) purchase accounting adjustments and (k) merger and other one-time transaction related costs. Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently. We believe Adjusted Homebuilding EBITDA information is useful to management and investors as it provides perspective on the underlying performance of the business. However, it should be noted that Adjusted Homebuilding EBITDA is not a U.S. generally accepted accounting principles ("GAAP") financial measure. Due to the significance of the GAAP components excluded, Adjusted Homebuilding EBITDA should not be considered in isolation or as an alternative to cash flows from operations or any other liquidity performance measure prescribed by GAAP.
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
LTM Ended
September 30, |
||||||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Net income
|
$
|
132,348
|
$
|
47,177
|
$
|
317,769
|
$
|
135,980
|
$
|
395,398
|
$
|
200,624
|
||||||||||||
Provision for income taxes
|
78,398
|
31,117
|
187,798
|
80,332
|
236,446
|
120,070
|
||||||||||||||||||
Homebuilding interest amortized to cost of sales
|
44,751
|
33,323
|
116,963
|
92,524
|
163,820
|
131,878
|
||||||||||||||||||
Homebuilding depreciation and amortization
|
15,735
|
7,368
|
43,128
|
22,288
|
61,827
|
30,691
|
||||||||||||||||||
EBITDA (1)
|
271,232
|
118,985
|
665,658
|
331,124
|
857,491
|
483,263
|
||||||||||||||||||
Add:
|
||||||||||||||||||||||||
Amortization of stock-based compensation (1)
|
3,704
|
3,536
|
11,216
|
8,620
|
18,220
|
9,353
|
||||||||||||||||||
Cash distributions of income from unconsolidated
|
||||||||||||||||||||||||
joint ventures
|
―
|
―
|
450
|
592
|
2,688
|
592
|
||||||||||||||||||
Merger-related purchase accounting adjustments
|
||||||||||||||||||||||||
included in cost of home sales
|
―
|
―
|
18,535
|
―
|
82,705
|
―
|
||||||||||||||||||
Merger and other one-time costs
|
3,937
|
11,216
|
13,786
|
16,888
|
58,635
|
16,888
|
||||||||||||||||||
Less:
|
||||||||||||||||||||||||
Income (loss) from unconsolidated joint ventures
|
1,231
|
121
|
2,643
|
(381
|
)
|
4,990
|
(707
|
)
|
||||||||||||||||
Income from financial services subsidiaries
|
9,807
|
2,847
|
24,889
|
6,873
|
34,955
|
9,345
|
||||||||||||||||||
Adjusted Homebuilding EBITDA
|
$
|
267,835
|
$
|
130,769
|
$
|
682,113
|
$
|
350,732
|
$
|
979,794
|
$
|
501,458
|
(1)
|
During the 2016 third quarter, the Company removed amortization of stock-based compensation as a component of the EBITDA subtotal and began including this amount as an adjusting item to calculate Adjusted Homebuilding EBITDA. Prior periods presented have been restated to conform to this new presentation.
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
Actual
2016 |
Pro Forma
2015 |
% Change
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Home sale revenues
|
|||||||||||||||||||
North
|
$
|
281,860
|
$
|
260,202
|
8%
|
$
|
709,329
|
$
|
660,387
|
7%
|
|||||||||
Southeast
|
399,904
|
356,579
|
12%
|
1,062,737
|
914,471
|
16%
|
|||||||||||||
Southwest
|
389,128
|
351,384
|
11%
|
1,165,269
|
1,025,906
|
14%
|
|||||||||||||
West
|
594,138
|
350,720
|
69%
|
1,465,561
|
1,019,148
|
44%
|
|||||||||||||
Consolidated total
|
$
|
1,665,030
|
$
|
1,318,885
|
26%
|
$
|
4,402,896
|
$
|
3,619,912
|
22%
|
Three Months Ended September 30,
|
|||||||||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
|||||||||||||||||||
Homes
|
ASP
|
Homes
|
ASP
|
Homes
|
ASP
|
||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
New homes delivered:
|
|||||||||||||||||||||
North
|
848
|
$
|
332
|
768
|
$
|
339
|
10%
|
(2%)
|
|||||||||||||
Southeast
|
1,052
|
380
|
976
|
365
|
8%
|
4%
|
|||||||||||||||
Southwest
|
894
|
435
|
857
|
410
|
4%
|
6%
|
|||||||||||||||
West
|
|
886
|
|
671
|
|
610
|
|
575
|
|
45%
|
|
17%
|
|||||||||
Consolidated total
|
|
3,680
|
$
|
452
|
|
3,211
|
$
|
411
|
|
15%
|
|
10%
|
|||||||||
Net new orders:
|
|||||||||||||||||||||
North
|
823
|
$
|
337
|
636
|
$
|
337
|
29%
|
―
|
|||||||||||||
Southeast
|
1,071
|
375
|
905
|
376
|
18%
|
(0%)
|
|||||||||||||||
Southwest
|
831
|
428
|
926
|
427
|
(10%)
|
0%
|
|||||||||||||||
West
|
|
806
|
|
603
|
|
771
|
|
601
|
|
5%
|
|
0%
|
|||||||||
Consolidated total
|
|
3,531
|
$
|
431
|
|
3,238
|
$
|
437
|
|
9%
|
|
(1%)
|
Nine Months Ended September 30,
|
|||||||||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
|||||||||||||||||||
Homes
|
ASP
|
Homes
|
ASP
|
Homes
|
ASP
|
||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
New homes delivered:
|
|||||||||||||||||||||
North
|
2,120
|
$
|
335
|
1,940
|
$
|
340
|
9%
|
(1%)
|
|||||||||||||
Southeast
|
2,748
|
387
|
2,589
|
353
|
6%
|
10%
|
|||||||||||||||
Southwest
|
2,751
|
424
|
2,519
|
407
|
9%
|
4%
|
|||||||||||||||
West
|
|
2,272
|
|
645
|
|
1,717
|
|
594
|
|
32%
|
|
9%
|
|||||||||
Consolidated total
|
|
9,891
|
$
|
445
|
|
8,765
|
$
|
413
|
|
13%
|
|
8%
|
|||||||||
Net new orders:
|
|||||||||||||||||||||
North
|
2,647
|
$
|
333
|
2,201
|
$
|
336
|
20%
|
(1%)
|
|||||||||||||
Southeast
|
3,384
|
374
|
3,145
|
364
|
8%
|
3%
|
|||||||||||||||
Southwest
|
2,907
|
429
|
3,314
|
412
|
(12%)
|
4%
|
|||||||||||||||
West
|
|
2,649
|
|
632
|
|
2,492
|
|
592
|
|
6%
|
|
7%
|
|||||||||
Consolidated total
|
|
11,587
|
$
|
437
|
|
11,152
|
$
|
424
|
|
4%
|
|
3%
|
At September 30,
|
|||||||||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
|||||||||||||||||||
Homes
|
Dollar
Value |
Homes
|
Dollar
Value |
Homes
|
Dollar
Value |
||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||
Backlog:
|
|||||||||||||||||||||
North
|
1,530
|
$
|
523,882
|
1,234
|
$
|
417,931
|
24%
|
25%
|
|||||||||||||
Southeast
|
2,257
|
934,797
|
1,933
|
805,356
|
17%
|
16%
|
|||||||||||||||
Southwest
|
2,058
|
945,052
|
2,220
|
957,390
|
(7%)
|
(1%)
|
|||||||||||||||
West
|
|
1,462
|
|
911,152
|
|
1,320
|
|
834,279
|
|
11%
|
|
9%
|
|||||||||
Consolidated total
|
|
7,307
|
$
|
3,314,883
|
|
6,707
|
$
|
3,014,956
|
|
9%
|
|
10%
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
Actual
2016 |
Pro Forma
2015 |
% Change
|
||||||||||
Average number of selling communities
|
|||||||||||||||
during the period:
|
|||||||||||||||
North
|
134
|
118
|
14%
|
125
|
116
|
8%
|
|||||||||
Southeast
|
182
|
177
|
3%
|
180
|
171
|
5%
|
|||||||||
Southwest
|
165
|
185
|
(11%)
|
170
|
183
|
(7%)
|
|||||||||
West
|
85
|
87
|
(2%)
|
91
|
83
|
10%
|
|||||||||
Consolidated total
|
566
|
567
|
(0%)
|
566
|
553
|
2%
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
Actual
2016 |
Pro Forma
2015 |
% Change
|
Actual
2016 |
Pro Forma
2015 |
% Change
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Home sale revenues
|
$
|
1,665,030
|
$
|
1,318,885
|
26%
|
$
|
4,402,896
|
$
|
3,619,912
|
22%
|
|||||||||
Pretax income
|
$
|
210,746
|
$
|
142,352
|
48%
|
$
|
505,567
|
$
|
383,655
|
32%
|
Three Months Ended September 30,
|
Nine Months Ended September 30, | |||||||||||||||||||
2016
|
2015
|
% Change
|
2016
|
2015
|
% Change
|
|||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Homebuilding revenues:
|
||||||||||||||||||||
North
|
|
$
|
283,060
|
$
|
n/a
|
n/a
|
$
|
710,889
|
$
|
n/a
|
n/a
|
|||||||||
Southeast
|
|
400,720
|
211,759
|
89%
|
1,065,038
|
556,330
|
91%
|
|||||||||||||
Southwest
|
|
389,160
|
155,595
|
150%
|
1,165,797
|
461,304
|
153%
|
|||||||||||||
West
|
|
|
598,018
|
|
284,836
|
110%
|
|
1,493,279
|
|
804,466
|
86%
|
|||||||||
Total homebuilding revenues
|
|
$
|
1,670,958
|
$
|
652,190
|
156%
|
$
|
4,435,003
|
$
|
1,822,100
|
143%
|
|||||||||
|
||||||||||||||||||||
Homebuilding pretax income:
|
|
|||||||||||||||||||
North
|
|
$
|
25,627
|
$
|
n/a
|
n/a
|
$
|
53,177
|
$
|
n/a
|
n/a
|
|||||||||
Southeast
|
|
31,303
|
19,379
|
62%
|
84,125
|
44,909
|
87%
|
|||||||||||||
Southwest
|
|
39,312
|
16,552
|
138%
|
113,145
|
49,817
|
127%
|
|||||||||||||
West
|
|
|
104,697
|
|
39,516
|
165%
|
|
230,231
|
|
114,713
|
101%
|
|||||||||
Total homebuilding pretax income
|
|
$
|
200,939
|
$
|
75,447
|
166%
|
$
|
480,678
|
$
|
209,439
|
130%
|
|||||||||
|
||||||||||||||||||||
Homebuilding pretax income as a percentage
|
|
|||||||||||||||||||
of homebuilding revenues:
|
||||||||||||||||||||
North
|
|
9.1%
|
n/a
|
n/a
|
7.5%
|
n/a
|
n/a
|
|||||||||||||
Southeast
|
|
7.8%
|
9.2%
|
(1.4%)
|
7.9%
|
8.1%
|
(0.2%)
|
|||||||||||||
Southwest
|
|
10.1%
|
10.6%
|
(0.5%)
|
9.7%
|
10.8%
|
(1.1%)
|
|||||||||||||
West
|
|
|
17.5%
|
|
13.9%
|
3.6%
|
|
15.4%
|
|
14.3%
|
1.1%
|
|||||||||
Total homebuilding pretax income percentage
|
|
|
12.0%
|
|
11.6%
|
0.4%
|
|
10.8%
|
|
11.5%
|
(0.7%)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016
|
2015
|
% Change
|
2016
|
2015
|
% Change
|
|||||||||||
New homes delivered:
|
|
|||||||||||||||
North
|
|
848
|
n/a
|
n/a
|
2,120
|
n/a
|
n/a
|
|||||||||
Southeast
|
|
1,052
|
467
|
125%
|
2,748
|
1,328
|
107%
|
|||||||||
Southwest
|
|
894
|
282
|
217%
|
2,751
|
858
|
221%
|
|||||||||
West
|
|
886
|
416
|
113%
|
2,272
|
1,256
|
81%
|
|||||||||
Total
|
|
3,680
|
1,165
|
216%
|
9,891
|
3,442
|
187%
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
2016
|
2015
|
% Change
|
2016
|
2015
|
% Change
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Average selling prices of homes delivered:
|
|
||||||||||||||||||
North
|
|
$
|
332
|
$
|
n/a
|
n/a
|
$
|
335
|
$
|
n/a
|
n/a
|
||||||||
Southeast
|
|
380
|
437
|
(13%)
|
387
|
411
|
(6%)
|
||||||||||||
Southwest
|
|
435
|
552
|
(21%)
|
424
|
533
|
(20%)
|
||||||||||||
West
|
|
671
|
641
|
5%
|
645
|
625
|
3%
|
||||||||||||
Total
|
|
$
|
452
|
$
|
537
|
(16%)
|
$
|
445
|
$
|
520
|
(14%)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
2016
|
2015
|
% Change
|
% Absorption Change (1)
|
2016
|
2015
|
% Change
|
% Absorption Change (1)
|
||||||||||||
Net new orders (2):
|
|
||||||||||||||||||
North
|
|
823
|
n/a
|
n/a
|
n/a
|
2,647
|
n/a
|
n/a
|
n/a
|
||||||||||
Southeast
|
|
1,071
|
429
|
150%
|
32%
|
3,384
|
1,511
|
124%
|
9%
|
||||||||||
Southwest
|
|
831
|
325
|
156%
|
(16%)
|
2,907
|
1,123
|
159%
|
(18%)
|
||||||||||
West
|
|
806
|
572
|
41%
|
8%
|
2,649
|
1,830
|
45%
|
0%
|
||||||||||
Total
|
|
3,531
|
1,326
|
166%
|
1%
|
11,587
|
4,464
|
160%
|
(6%)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||
2016
|
2015
|
% Change
|
2016
|
2015
|
% Change
|
||||||||||||||
Cancellation Rates:
|
|
|
|||||||||||||||||
North
|
|
16%
|
n/a
|
n/a
|
13%
|
n/a
|
n/a
|
||||||||||||
Southeast
|
|
14%
|
16%
|
(2%)
|
13%
|
13%
|
―
|
||||||||||||
Southwest
|
|
18%
|
16%
|
2%
|
15%
|
11%
|
4%
|
||||||||||||
West
|
|
18%
|
22%
|
(4%)
|
17%
|
18%
|
(1%)
|
||||||||||||
Total
|
|
|
16%
|
|
19%
|
(3%)
|
|
14%
|
|
15%
|
(1%)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
2016
|
2015
|
% Change
|
2016
|
2015
|
% Change
|
||||||||||
Average number of selling communities during the period:
|
|
||||||||||||||
North
|
|
134
|
n/a
|
n/a
|
125
|
n/a
|
n/a
|
||||||||
Southeast
|
|
182
|
96
|
90%
|
180
|
88
|
105%
|
||||||||
Southwest
|
|
165
|
54
|
206%
|
170
|
54
|
215%
|
||||||||
West
|
|
85
|
65
|
31%
|
91
|
63
|
44%
|
||||||||
Total
|
|
566
|
215
|
163%
|
566
|
205
|
176%
|
(1)
|
Represents the percentage change of net new orders per average number of selling communities during the period.
|
(2)
|
Net new orders are new orders for the purchase of homes during the period, less cancellations during such period of existing contracts for the purchase of homes.
|
At September 30,
|
|||||||||||||||||||||
|
2016
|
2015
|
% Change
|
||||||||||||||||||
Backlog ($ in thousands):
|
|
Homes
|
Dollar Value
|
Homes
|
Dollar Value
|
Homes
|
Dollar Value
|
||||||||||||||
North
|
|
1,530
|
$
|
523,882
|
n/a
|
$
|
n/a
|
n/a
|
n/a
|
||||||||||||
Southeast
|
|
2,257
|
934,797
|
954
|
511,449
|
137%
|
83%
|
||||||||||||||
Southwest
|
|
2,058
|
945,052
|
811
|
438,753
|
154%
|
115%
|
||||||||||||||
West
|
|
1,462
|
911,152
|
968
|
705,294
|
51%
|
29%
|
||||||||||||||
Total
|
|
|
7,307
|
$
|
3,314,883
|
|
2,733
|
$
|
1,655,496
|
|
167%
|
|
100%
|
At September 30,
|
|||||||||
2016
|
2015
|
% Change
|
|||||||
Homesites owned and controlled:
|
|
||||||||
North
|
|
15,966
|
n/a
|
n/a
|
|||||
Southeast
|
|
22,993
|
16,098
|
43%
|
|||||
Southwest
|
|
15,113
|
6,537
|
131%
|
|||||
West
|
|
13,892
|
12,880
|
8%
|
|||||
Total (including joint ventures)
|
|
67,964
|
35,515
|
91%
|
|||||
|
|||||||||
Homesites owned
|
|
51,385
|
28,343
|
81%
|
|||||
Homesites optioned or subject to contract
|
|
15,209
|
5,792
|
163%
|
|||||
Joint venture homesites (1)
|
|
1,370
|
1,380
|
(1%)
|
|||||
Total (including joint ventures)
|
|
67,964
|
35,515
|
91%
|
|||||
|
|||||||||
Homesites owned:
|
|
||||||||
Raw lots
|
|
13,168
|
6,916
|
90%
|
|||||
Homesites under development
|
|
11,836
|
7,717
|
53%
|
|||||
Finished homesites
|
|
14,235
|
7,674
|
85%
|
|||||
Under construction or completed homes
|
|
10,055
|
4,323
|
133%
|
|||||
Held for sale
|
|
2,091
|
1,713
|
22%
|
|||||
Total
|
|
51,385
|
28,343
|
81%
|
(1)
|
Joint venture homesites represent our expected share of land development joint venture homesites and all of the homesites of our homebuilding joint ventures.
|
At September 30,
|
|||||||||
2016
|
2015
|
% Change
|
|||||||
Homes under construction:
|
|
||||||||
Homes under construction (excluding specs)
|
|
4,797
|
1,914
|
151%
|
|||||
Speculative homes under construction
|
|
2,568
|
1,338
|
92%
|
|||||
Total homes under construction
|
|
7,365
|
3,252
|
126%
|
|||||
Completed homes:
|
|
||||||||
Completed and unsold homes (excluding models)
|
|
973
|
377
|
158%
|
|||||
Completed and under contract (excluding models)
|
|
845
|
287
|
194%
|
|||||
Model homes
|
|
872
|
407
|
114%
|
|||||
Total completed homes
|
|
2,690
|
1,071
|
151%
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||
(Dollars in thousands)
|
|||||||||||
Total Originations:
|
|
||||||||||
Loans
|
|
1,779
|
691
|
5,026
|
2,102
|
||||||
Principal
|
|
$546,408
|
$251,163
|
$1,567,455
|
$766,326
|
||||||
Capture Rate
|
|
54%
|
72%
|
57%
|
74%
|
||||||
Loans Sold to Third Parties:
|
|
||||||||||
Loans
|
|
1,813
|
729
|
5,434
|
2,354
|
||||||
Principal
|
|
$562,962
|
$275,417
|
$1,713,306
|
$842,642
|
||||||
Mortgage Loan Origination Product Mix:
|
|
||||||||||
FHA loans
|
|
15%
|
8%
|
15%
|
8%
|
||||||
Other government loans (VA & USDA)
|
|
10%
|
9%
|
11%
|
8%
|
||||||
Total government loans
|
|
25%
|
17%
|
26%
|
16%
|
||||||
Conforming loans
|
|
71%
|
72%
|
70%
|
72%
|
||||||
Jumbo loans
|
|
4%
|
11%
|
4%
|
12%
|
||||||
100%
|
100%
|
100%
|
100%
|
||||||||
Loan Type:
|
|
||||||||||
Fixed
|
|
98%
|
89%
|
97%
|
91%
|
||||||
ARM
|
|
2%
|
11%
|
3%
|
9%
|
||||||
Credit Quality:
|
|
||||||||||
Avg. FICO score
|
|
737
|
753
|
738
|
752
|
||||||
Other Data:
|
|
||||||||||
Avg. combined LTV ratio
|
|
83%
|
79%
|
83%
|
79%
|
||||||
Full documentation loans
|
|
100%
|
100%
|
100%
|
100%
|
· land acquisition
· homebuilder acquisitions
· investments in joint ventures
· construction and development
· operating expenses
|
· principal and interest payments on debt
· cash collateralization
· stock repurchases
· the payment of dividends
|
· internally generated funds
· bank revolving credit and term loans
· land option contracts and seller notes
· public and private sales of our equity
· public and private note offerings
|
· joint venture financings
· assessment district bond financings
· letters of credit and surety bonds
· mortgage credit facilities
|
Covenant and Other Requirement
|
Actual at
September 30, 2016
|
Covenant
Requirements at
September 30, 2016
|
||||
(Dollars in millions) | ||||||
Consolidated Tangible Net Worth (1)
|
$3,164.0 | ≥ | $1,849.8 | |||
Leverage Ratio:
|
||||||
Net Homebuilding Debt to Adjusted Consolidated Tangible Net Worth Ratio (2)
|
1.10 | ≤ | 2.00 | |||
Liquidity or Interest Coverage Ratio (3): | ||||||
Liquidity | $149.1 | ≥ | $220.4 | |||
EBITDA (as defined in the Revolving Facility) to Consolidated Interest Incurred (4) | 3.13 | ≥ | 1.25 | |||
Investments in Homebuilding Joint Ventures or Consolidated Homebuilding Non-Guarantor Entities (5) | $767.8 | ≤ | $1,187.4 |
(1)
|
The minimum covenant requirement amount is subject to increase over time based on subsequent earnings (without deductions for losses) and proceeds from equity offerings.
|
(2)
|
Net Homebuilding Debt represents Consolidated Homebuilding Debt reduced for certain cash balances in excess of $5 million.
|
(3)
|
Under the liquidity and interest coverage covenant, we are required to either (i) maintain an unrestricted cash balance in excess of our consolidated interest incurred for the previous four fiscal quarters or (ii) satisfy a minimum interest coverage ratio. At September 30, 2016, we met the condition described in clause (ii).
|
(4)
|
Consolidated Interest Incurred excludes noncash interest expense.
|
(5)
|
Net investments in unconsolidated homebuilding joint ventures or consolidated homebuilding non-guarantor entities must not exceed 35% of consolidated tangible net worth plus $80 million.
|
September 30, 2016
|
||||
(Dollars in thousands)
|
||||
|
||||
8.4% Senior Notes due May 2017
|
|
$
|
230,000
|
|
8.375% Senior Notes due May 2018
|
|
575,000
|
||
1.625% Convertible Senior Notes due May 2018
|
|
225,000
|
||
0.25% Convertible Senior Notes due June 2019
|
|
267,500
|
||
6.625% Senior Notes due May 2020
|
|
300,000
|
||
8.375% Senior Notes due January 2021
|
|
400,000
|
||
6.25% Senior Notes due December 2021
|
|
300,000
|
||
5.375% Senior Notes due October 2022
|
|
250,000
|
||
5.875% Senior Notes due November 2024
|
|
300,000
|
||
5.25% Senior Notes due June 2026
|
|
300,000
|
||
1.25% Convertible Senior Notes due August 2032
|
|
|
253,000
|
|
$
|
3,400,500
|
· accessing larger or highly desirable lot positions
· establishing strategic alliances
· leveraging our capital base
|
· expanding our market opportunities
· managing the financial and market risk associated with land holdings
|
·
|
Segment reporting;
|
·
|
Inventories and impairments;
|
·
|
Stock-based compensation;
|
·
|
Homebuilding revenue and cost of sales;
|
·
|
Variable interest entities;
|
·
|
Unconsolidated homebuilding and land development joint ventures;
|
·
|
Warranty accruals;
|
·
|
Insurance and litigation accruals;
|
·
|
Income taxes; and
|
·
|
Goodwill.
|
·
|
our strategy;
|
·
|
housing market and economic conditions and trends in the geographic markets in which we operate;
|
·
|
our land acquisition strategy and our sources of funds relating thereto;
|
·
|
litigation outcomes and related costs;
|
·
|
plans to purchase notes prior to maturity and engage in debt exchange transactions;
|
·
|
the impact of recent accounting pronouncements;
|
·
|
amounts remaining to complete relating to existing surety bonds; and
|
·
|
our interest rate hedging and derivatives strategy.
|
·
|
adverse economic developments that negatively impact the demand for homes;
|
·
|
the market value and availability of land;
|
·
|
the willingness of customers to purchase homes at times when mortgage-financing costs are high or when credit is difficult to obtain;
|
·
|
competition with other homebuilders as well as competition from the sellers of existing homes and rental properties;
|
·
|
the cost and availability of labor and materials;
|
·
|
our ability to obtain suitable bonding for development of our communities;
|
·
|
high cancellation rates;
|
·
|
the risk of our longer term acquisition strategy;
|
·
|
adverse weather conditions and natural disasters;
|
·
|
litigation and warranty claims;
|
·
|
the inherent danger of our building sites;
|
·
|
our reliance on subcontractors and their ability to construct our homes;
|
·
|
risks relating to our mortgage financing activities, including our obligation to repurchase loans we previously sold in the secondary market;
|
·
|
our dependence on key employees;
|
·
|
risks relating to acquisitions, including integration risks;
|
·
|
our failure to maintain the security of our electronic and other confidential information;
|
·
|
the adverse effects of negative media publicity;
|
·
|
government regulation, including environmental, building, climate change, worker health, safety, mortgage lending, title insurance, zoning and land use regulation;
|
·
|
increased regulation of the mortgage industry;
|
·
|
changes to tax laws that make homeownership more expensive;
|
·
|
the impact of "slow growth", "no growth" and similar initiatives;
|
·
|
our ability to obtain additional capital when needed and at an acceptable cost;
|
·
|
the impact of restrictive covenants in our credit agreements, public notes and private term loans and our ability to comply with these covenants, including our ability to incur additional indebtedness;
|
·
|
the amount of, and our ability to repay, renew or extend, our outstanding debt and its impact on our operations and our ability to obtain financing;
|
·
|
our ability to generate cash, including to service our debt;
|
·
|
risks relating to our unconsolidated joint ventures, including our ability and the ability of our partners to contribute funds to our joint ventures when needed or contractually agreed to, entitlement and development risks for the land owned by our joint ventures, the availability of financing to the joint ventures, our completion obligations to the joint venture, the illiquidity of our joint venture investments, partner disputes, and risks relating to our determinations concerning the consolidation or non-consolidation of our joint venture investments;
|
·
|
integration risk relating to Ryland, including the difficulty of the process, loss of key personnel, that we may incur additional costs, that our future results will suffer if we do not effectively manage our expanded operations, and that our rebranding initiative may not be successful;
|
·
|
the influence of our principal stockholder;
|
·
|
the provisions of our charter, bylaws, stockholders' rights agreements and debt covenants that could prevent a third party from acquiring us or limit the price investors might be willing to pay for shares of our common stock; and
|
·
|
other risks discussed in this report and our other filings with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended December 31, 2015.
|
Total Number
|
Approximate
|
||||||||
of Shares
|
Dollar Value
|
||||||||
Purchased as
|
of Shares that
|
||||||||
Part of
|
May Yet be
|
||||||||
Average
|
Publicly
|
Purchased
|
|||||||
Total Number
|
Price
|
Announced
|
Under the
|
||||||
of Shares
|
Paid per
|
Plans or
|
Plans or
|
||||||
Period
|
Purchased (1)
|
Share
|
Programs (1)
|
Programs (1)
|
|||||
July 1, 2016 to July 31, 2016
|
|
―
|
―
|
―
|
$500,000,000
|
||||
August 1, 2016 to August 31, 2016
|
|
―
|
―
|
―
|
$500,000,000
|
||||
September 1, 2016 to September 30, 2016
|
|
1,102,500
|
$34.12
|
1,102,500
|
$462,387,155
|
||||
Total
|
|
1,102,500
|
$34.12
|
1,102,500
|
(1)
|
On July 27, 2016, our Board of Directors authorized a new $500 million common stock repurchase plan. The stock repurchase plan has no stated expiration date and replaces in its entirety the $200 million authorized by our Board of Directors on February 11, 2016.
|
4.1 | Twenty-Seventh Supplemental Indenture, dated as of May 31, 2016, by and among the Company, the Guarantors and The Bank of New York Mellon Trust Company, N.A. |
31.1
|
Certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101 | The following materials from CalAtlantic Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements. |
Dated: October 28, 2016
|
By:
|
/s/ Larry T. Nicholson
|
Larry T. Nicholson
President and Chief Executive Officer
(Principal Executive Officer)
|
||
Dated: October 28, 2016
|
By:
|
/s/ Jeff J. McCall
|
Jeff J. McCall
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|