EX-99.1 2 tphex991q32022.htm EX-99.1 Document
Exhibit 99.1
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TRI POINTE HOMES, INC. REPORTS 2022 THIRD QUARTER RESULTS

-Diluted Earnings Per Share of $1.45-
-Home Sales Revenue of $1.1 Billion-
-Homebuilding Gross Margin Percentage of 27.1%-
-Backlog Dollar Value of $2.4 Billion-

INCLINE VILLAGE, Nev., October 27, 2022 / Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the third quarter ended September 30, 2022.
“Tri Pointe Homes delivered strong profitability in the third quarter of 2022 with net income available to common stockholders of $149 million, or $1.45 in diluted earnings per share, representing a 24% increase in diluted earnings per share over the third quarter of 2021,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “We achieved these outstanding results through year-over-year improvements to home sales revenue, homebuilding gross margin and SG&A leverage. We also ended the quarter in a great position for a strong fourth quarter performance, thanks to a healthy backlog valued at over $2.4 billion.”
Mr. Bauer continued, “As the housing market continued to weaken due to the rapid rise in interest rates, our order demand slowed during the quarter. To navigate today’s reality, we have implemented several tactics designed to help our customers purchase and close their homes. Our main goals for the remainder of the year will be to close homes in backlog and generate cash from operations, while staying price competitive at our communities by utilizing incentives and targeted pricing. We will also continue to streamline our cost structure and adjust our land pipeline to reflect the current demand environment. With this comprehensive plan in place, coupled with our strong balance sheet and experienced leadership team, we are confident that Tri Pointe is well positioned for success over the long term.”
Results and Operational Data for Third Quarter 2022 and Comparisons to Third Quarter 2021
•Net income available to common stockholders was $149.2 million, or $1.45 per diluted share, compared to $133.2 million, or $1.17 per diluted share
•Home sales revenue of $1.1 billion compared to $1.0 billion, an increase of 3%
◦New home deliveries of 1,463 homes compared to 1,632 homes, a decrease of 10%
◦Average sales price of homes delivered of $723,000 compared to $630,000, an increase of 15%
•Homebuilding gross margin percentage of 27.1% compared to 26.3%, an increase of 80 basis points
◦Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 29.9%*
•SG&A expense as a percentage of homes sales revenue of 9.1% compared to 9.6%, a decrease of 50 basis points
•Net new home orders of 681 compared to 1,349, a decrease of 50%
•Active selling communities averaged 128.3 compared to 109.0, an increase of 18%
◦Net new home orders per average selling community were 5.3 orders (1.8 monthly) compared to 12.4 orders (4.1 monthly)
◦Cancellation rate of 27% compared to 9%
•Backlog units at quarter end of 3,044 homes compared to 3,619, a decrease of 16%
◦Dollar value of backlog at quarter end flat at $2.4 billion
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◦Average sales price of homes in backlog at quarter end of $797,000 compared to $671,000, an increase of 19%
•Ratios of debt-to-capital and net debt-to-net capital of 33.8% and 29.7%*, respectively, as of September 30, 2022
•Repurchased 948,911 shares of common stock at a weighted average price per share of $17.66 for an aggregate dollar amount of $16.8 million in the three months ended September 30, 2022
•Ended the third quarter of 2022 with total liquidity of $914.3 million, including cash and cash equivalents of $228.1 million and $686.2 million of availability under our revolving credit facility
 
*See “Reconciliation of Non-GAAP Financial Measures”
“Our team members once again demonstrated their ability to execute in a difficult operating environment in the third quarter, as we met or exceeded our stated guidance for new home deliveries, home sales gross margin and SG&A leverage,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “While we expect the demand environment to remain choppy in the near term, we remain confident that the long-term macro environment for the housing industry continues to be very bright due to the lack of supply and the housing deficit that has resulted from new home construction failing to meet the pace of household formations since 2009, coupled with the high cost of rental alternatives. We are positioning our company to take advantage of these long-term opportunities and feel that we have the right people, resources and strategies in place to be successful.”
Outlook
For the fourth quarter, the Company anticipates delivering between 1,700 and 1,900 homes at an average sales price between $700,000 and $715,000. The Company expects homebuilding gross margin percentage to be in the range of 25.0% to 26.0% for the fourth quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 8.0% to 9.0%. Finally, the Company expects its effective tax rate for the fourth quarter to be in the range of 24.0% to 25.0%.
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 27, 2022.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial 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 2022 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 13733444. An archive of the webcast will also be available on the Company’s website for a limited time.
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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, most recently in 2019. The company made Fortune magazine’s 2017 100 Fastest-Growing Companies list, was named as a Great Place to Work-Certified™ company in both 2021 and 2022 and was selected by Great Place to Work® as one of the Best Workplaces for Millennials™ in 2022, Best Workplaces in Construction™ in 2022 and Best Workplaces for Women™ in 2022. 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 the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the emergence and spread of new strains or variants of COVID-19, the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and acceptance of effective vaccines, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the effects of general economic conditions, including employment rates, housing starts, interest rate levels, 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, particularly within California; 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 and labor; 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 outbreaks of contagious diseases, 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,
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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:
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TriPointeHomes.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045
  

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KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
20222021Change% Change20222021Change% Change
Operating Data:(unaudited)
Home sales revenue$1,057,491 $1,028,950 $28,541 3 %$2,787,386 $2,754,932 $32,454 1 %
Homebuilding gross margin$286,343 $270,926 $15,417 6 %$754,226 $690,337 $63,889 9 %
Homebuilding gross margin %27.1 %26.3 %0.8 %27.1 %25.1 %2.0 %
Adjusted homebuilding gross margin %*29.9 %28.8 %1.1 %29.7 %27.9 %1.8 %
SG&A expense$96,736 $98,365 $(1,629)(2)%$272,783 $276,926 $(4,143)(1)%
SG&A expense as a % of home sales
   revenue		9.1 %9.6 %(0.5)%9.8 %10.1 %(0.3)%
Net income available to common stockholders$149,226 $133,156 $16,070 12 %$373,087 $321,827 $51,260 16 %
Adjusted EBITDA*$237,369 $215,880 $21,489 10 %$604,365 $543,945 $60,420 11 %
Interest incurred$31,893 $24,280 $7,613 31 %$89,235 $68,017 $21,218 31 %
Interest in cost of home sales$26,531 $25,656 $875 3 %$68,559 $77,185 $(8,626)(11)%
Other Data:
Net new home orders681 1,349 (668)(50)%3,933 4,958 (1,025)(21)%
New homes delivered1,463 1,632 (169)(10)%4,047 4,303 (256)(6)%
Average sales price of homes delivered$723 $630 $93 15 %$689 $640 $49 8 %
Cancellation rate27 %9 %18 %15 %7 %8 %
Average selling communities128.3 109.0 19.3 18 %120.7 112.1 8.6 8 %
Selling communities at end of period133 109 24 22 %
Backlog (estimated dollar value)$2,427,301 $2,428,412 $(1,111)0 %
Backlog (homes)3,044 3,619 (575)(16)%
Average sales price in backlog$797 $671 $126 19 %
September 30,December 31,
20222021Change% Change
Balance Sheet Data:(unaudited)
Cash and cash equivalents$228,137 $681,528 $(453,391)(67)%
Real estate inventories$3,608,305 $3,054,743 $553,562 18 %
Lots owned or controlled37,269 41,675 (4,406)(11)%
Homes under construction (1)
4,120 3,632 488 13 %
Homes completed, unsold102 27 75 278 %
Debt$1,339,752 $1,337,723 $2,029 0 %
Stockholders’ equity$2,625,730 $2,447,621 $178,109 7 %
Book capitalization$3,965,482 $3,785,344 $180,138 5 %
Ratio of debt-to-capital33.8 %35.3 %(1.5)%
Ratio of net debt-to-net capital*29.7 %21.1 %8.6 %
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(1)     Homes under construction included 85 models at both September 30, 2022 and December 31, 2021, respectively.
*    See “Reconciliation of Non-GAAP Financial Measures”
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CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
September 30,December 31,
20222021
Assets(unaudited)
Cash and cash equivalents$228,137 $681,528 
Receivables169,496 116,996 
Real estate inventories3,608,305 3,054,743 
Investments in unconsolidated entities132,998 118,095 
Goodwill and other intangible assets, net156,603 156,603 
Deferred tax assets, net57,095 57,096 
Other assets173,404 151,162 
Total assets$4,526,038 $4,336,223 
Liabilities
Accounts payable$64,109 $84,854 
Accrued expenses and other liabilities494,727 466,013 
Loans payable250,000 250,504 
Senior notes1,089,752 1,087,219 
Total liabilities1,898,588 1,888,590 
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, 2022 and December 31, 2021, respectively— — 
Common stock, $0.01 par value, 500,000,000 shares authorized; 100,913,958 and 109,644,474 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively1,009 1,096 
Additional paid-in capital— 91,077 
Retained earnings2,624,721 2,355,448 
Total stockholders’ equity
2,625,730 2,447,621 
Noncontrolling interests1,720 12 
Total equity2,627,450 2,447,633 
Total liabilities and equity$4,526,038 $4,336,223 


 
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CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Homebuilding:  
Home sales revenue$1,057,491 $1,028,950 $2,787,386 $2,754,932 
Land and lot sales revenue2,626 581 4,337 7,520 
Other operations revenue674 646 2,021 1,969 
Total revenues1,060,791 1,030,177 2,793,744 2,764,421 
Cost of home sales771,148 758,024 2,033,160 2,064,595 
Cost of land and lot sales1,256 891 2,075 5,918 
Other operations expense670 801 2,020 2,111 
Sales and marketing41,950 44,875 112,712 130,824 
General and administrative54,786 53,490 160,071 146,102 
Homebuilding income from operations190,981 172,096 483,706 414,871 
Equity in loss of unconsolidated entities(122)(43)(34)(72)
Other income, net463 171 852 428 
Homebuilding income before income taxes191,322 172,224 484,524 415,227 
Financial Services:
Revenues11,005 3,016 31,985 7,802 
Expenses5,827 1,618 17,457 4,510 
Equity in income of unconsolidated entities— 3,946 46 10,586 
Financial services income before income taxes5,178 5,344 14,574 13,878 
Income before income taxes196,500 177,568 499,098 429,105 
Provision for income taxes(45,923)(44,412)(122,084)(107,278)
Net income150,577 133,156 377,014 321,827 
Net income attributable to noncontrolling interests(1,351)— (3,927)— 
Net income available to common stockholders$149,226 $133,156 $373,087 $321,827 
Earnings per share  
Basic$1.47 $1.18 $3.60 $2.77 
Diluted$1.45 $1.17 $3.57 $2.75 
Weighted average shares outstanding 
Basic101,242,708 112,781,663 103,555,717 116,296,265 
Diluted102,661,222 113,782,251 104,526,594 117,188,893 
 
 
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MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY
(dollars in thousands)
(unaudited)
 
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price
Arizona166 $773 187 $685 363 $751 570 $667 
California636 768 708 646 1,729 718 1,863 674 
Nevada122 771 180 611 363 731 381 607 
Washington46 853 76 983 172 978 223 984 
West total970 773 1,151 669 2,627 742 3,037 687 
Colorado82 753 55 589 201 699 154 584 
Texas250 571 274 492 788 527 721 483 
Central total332 616 329 508 989 562 875 501 
Carolinas(1)80 469 25 386 152 464 64 383 
Washington D.C. Area(2)81 805 127 643 279 762 327 628 
East total161 638 152 601 431 657 391 588 
Total1,463 $723 1,632 $630 4,047 $689 4,303 $640 
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities
Arizona74 13.5 182 13.2 484 13.5 676 14.4 
California275 53.7 545 38.3 1,577 47.5 1,865 38.9 
Nevada56 6.8 133 10.2 317 7.6 568 11.1 
Washington34 3.0 68 6.5 103 2.8 229 5.7 
West total439 77.0 928 68.2 2,481 71.4 3,338 70.1 
Colorado15 7.3 55 6.5 180 7.7 218 5.7 
Texas123 23.5 238 21.5 691 22.8 945 22.6 
Central total138 30.8 293 28.0 871 30.5 1,163 28.3 
Carolinas(1)76 13.7 41 3.0 372 11.3 129 3.1 
Washington D.C. Area(2)28 6.8 87 9.8 209 7.5 328 10.6 
East total104 20.5 128 12.8 581 18.8 457 13.7 
Total681 128.3 1,349 109.0 3,933 120.7 4,958 112.1 
(1)     Carolinas comprises North Carolina and South Carolina.
(2)     Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.

 
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MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY, continued
(dollars in thousands)
(unaudited)
 
As of September 30, 2022As of September 30, 2021
Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price		Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price
Arizona641 $531,135 $829 585 $438,093 $749 
California884 836,320 946 1,260 843,994 670 
Nevada280 232,850 832 323 226,035 700 
Washington60 48,387 806 145 155,172 1,070 
West total1,865 1,648,692 884 2,313 1,663,294 719 
Colorado163 128,733 790 190 135,851 715 
Texas539 346,530 643 722 364,537 505 
Central total702 475,263 677 912 500,388 549 
Carolinas(1)341 161,675 474 80 34,358 429 
Washington D.C. Area(2)136 141,671 1,042 314 230,372 734 
East total477 303,346 636 394 264,730 672 
Total3,044 $2,427,301 $797 3,619 $2,428,412 $671 
September 30,December 31,
20222021
Lots Owned or Controlled:
Arizona3,355 4,607 
California12,863 15,091 
Nevada1,815 2,161 
Washington891 1,010 
West total18,924 22,869 
Colorado1,973 1,683 
Texas10,994 12,297 
Central total12,967 13,980 
Carolinas(1)3,929 3,458 
Washington D.C. Area(2)1,449 1,368 
East total5,378 4,826 
Total37,269 41,675 
September 30,December 31,
20222021
Lots by Ownership Type:
Lots owned20,698 22,136 
Lots controlled (3)16,571 19,539 
Total37,269 41,675 

(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, 2022 and December 31, 2021, lots controlled included lots that were under land option contracts or purchase contracts. As of September 30, 2022 and December 31, 2021, lots controlled for Central include 3,388 and 2,950 lots, respectively, and lots controlled for East include 154 and 179 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
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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 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,
2022%2021%
(dollars in thousands)
Home sales revenue$1,057,491 100.0 %$1,028,950 100.0 %
Cost of home sales771,148 72.9 %758,024 73.7 %
Homebuilding gross margin286,343 27.1 %270,926 26.3 %
Add:  interest in cost of home sales26,531 2.5 %25,656 2.5 %
Add:  impairments and lot option abandonments3,034 0.3 %268 0.0 %
Adjusted homebuilding gross margin$315,908 29.9 %$296,850 28.8 %
Homebuilding gross margin percentage27.1 % 26.3 % 
Adjusted homebuilding gross margin percentage29.9 % 28.8 % 


Nine Months Ended September 30,
2022%2021%
Home sales revenue$2,787,386 100.0 %$2,754,932 100.0 %
Cost of home sales2,033,160 72.9 %2,064,595 74.9 %
Homebuilding gross margin754,226 27.1 %690,337 25.1 %
Add:  interest in cost of home sales68,559 2.5 %77,185 2.8 %
Add:  impairments and lot option abandonments4,495 0.2 %713 0.0 %
Adjusted homebuilding gross margin$827,280 29.7 %$768,235 27.9 %
Homebuilding gross margin percentage27.1 %25.1 %
Adjusted homebuilding gross margin percentage29.7 %27.9 %







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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, 2022December 31, 2021
Loans payable$250,000 $250,504 
Senior notes1,089,752 1,087,219 
Total debt1,339,752 1,337,723 
Stockholders’ equity2,625,730 2,447,621 
Total capital$3,965,482 $3,785,344 
Ratio of debt-to-capital(1)
33.8 %35.3 %
Total debt$1,339,752 $1,337,723 
Less: Cash and cash equivalents(228,137)(681,528)
Net debt1,111,615 656,195 
Stockholders’ equity2,625,730 2,447,621 
Net capital$3,737,345 $3,103,816 
Ratio of net debt-to-net capital(2)
29.7 %21.1 %
__________
(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.


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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,
2022202120222021
(in thousands)
Net income available to common stockholders$149,226 $133,156 $373,087 $321,827 
Interest expense:
Interest incurred31,893 24,280 89,235 68,017 
Interest capitalized(31,893)(24,280)(89,235)(68,017)
Amortization of interest in cost of sales26,611 25,655 68,639 77,457 
Provision for income taxes45,923 44,412 122,084 107,278 
Depreciation and amortization6,615 7,979 18,641 24,098 
EBITDA228,375 211,202 582,451 530,660 
Amortization of stock-based compensation5,717 4,410 16,740 12,572 
Impairments and lot option abandonments3,277 268 5,174 713 
Adjusted EBITDA$237,369 $215,880 $604,365 $543,945 
 
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