10-Q 1 ccs-20190331x10q.htm 10-Q CCS 03312019 Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



(Mark One)



 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2019



or





 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission File Number 001-36491



Century Communities, Inc.

(Exact name of registrant as specified in its charter)







 

 

Delaware

 

68-0521411

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)



 

8390 East Crescent Parkway, Suite 650
Greenwood Village, Colorado

 

80111

(Address of principal executive offices)

 

(Zip code)



(Registrant’s telephone number, including area code): (303) 770-8300

Securities registered pursuant to Section 12(b) of the Act:



 

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $0.01 per share

CCS

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.





 

 

 

 

 

 



 

 

 

 

 

 

Large accelerated filer

 

 

Accelerated filer

 



 

 

 

Non-accelerated filer

 

  

 

Smaller reporting company

 



 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

On April 23, 2019, 30,317,457 shares of common stock, par value $0.01 per share, were outstanding.   

 


 

CENTURY COMMUNITIES, INC.

FORM 10-Q

For the Three Months ended March 31, 2019



Index



 



Page No.

PART I

Item 1. Unaudited Condensed Consolidated Financial Statements

 

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

3

Unaudited Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2019 and 2018

4

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2019 and 2018 

5

Unaudited Condensed Consolidated Statements Stockholders Equity for the Three Months ended March 31, 2019 and 2018

6

Notes to Unaudited Condensed Consolidated Financial Statements – March 31, 2019

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3. Quantitative and Qualitative Disclosures About Market Risk

35

Item 4. Controls and Procedures

35

PART II

Item 1. Legal Proceedings

36

Item 1A. Risk Factors

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3. Defaults Upon Senior Securities

36

Item 4. Mine Safety Disclosures

36

Item 5. Other Information

36

Item 6. Exhibits

37

Signatures

38



 





2 

 


 

PART I

ITEM 1.     FINANCIAL STATEMENTS.





Century Communities, Inc.

Condensed Consolidated Balance Sheets

As of March 31, 2019 and December 31, 2018

(in thousands, except share amounts)







 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Assets

 

(Unaudited)

 

 

 

Cash and cash equivalents

 

$

38,115 

 

$

32,902 

Cash held in escrow

 

 

24,664 

 

 

24,344 

Accounts receivable

 

 

12,436 

 

 

13,464 

Inventories

 

 

1,943,792 

 

 

1,848,243 

Mortgage loans held for sale

 

 

98,591 

 

 

114,074 

Prepaid expenses and other assets

 

 

123,248 

 

 

138,717 

Property and equipment, net

 

 

33,471 

 

 

33,258 

Deferred tax assets, net

 

 

13,591 

 

 

13,763 

Amortizable intangible assets, net

 

 

4,762 

 

 

5,095 

Goodwill

 

 

30,395 

 

 

30,395 

Total assets

 

$

2,323,065 

 

$

2,254,255 

Liabilities and stockholders' equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

74,075 

 

$

89,907 

Accrued expenses and other liabilities

 

 

208,846 

 

 

213,157 

Notes payable

 

 

786,872 

 

 

784,777 

Revolving line of credit

 

 

287,000 

 

 

202,500 

Mortgage repurchase facilities

 

 

90,866 

 

 

104,555 

Total liabilities

 

 

1,447,659 

 

 

1,394,896 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding

 

 

 —

 

 

 —

Common stock, $0.01 par value, 100,000,000 shares authorized, 30,304,081 and 30,154,791 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

 

 

303 

 

 

302 

Additional paid-in capital

 

 

593,966 

 

 

595,037 

Retained earnings

 

 

281,137 

 

 

264,020 

Total stockholders' equity

 

 

875,406 

 

 

859,359 

Total liabilities and stockholders' equity

 

$

2,323,065 

 

$

2,254,255 

See Notes to Unaudited Condensed Consolidated Financial Statements





3 

 


 

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Operations

For the Three Months ended March 31, 2019 and 2018

(in thousands, except share and per share amounts)













 

 

 

 

 

 



 

Three months ended March 31,



 

2019

 

2018

Revenues

 

 

 

 

 

 

Homebuilding revenues

 

 

 

 

 

 

Home sales revenues

 

$

523,302 

 

$

394,831 

Land sales and other revenues

 

 

1,355 

 

 

1,459 



 

 

524,657 

 

 

396,290 

Financial services revenue

 

 

8,400 

 

 

5,556 

Total revenues

 

 

533,057 

 

 

401,846 

Homebuilding cost of revenues

 

 

 

 

 

 

Cost of home sales revenues

 

 

(433,757)

 

 

(319,583)

Cost of land sales and other revenues

 

 

(614)

 

 

(877)



 

 

(434,371)

 

 

(320,460)

Financial services costs

 

 

(6,829)

 

 

(4,395)

Selling, general and administrative

 

 

(68,936)

 

 

(56,522)

Acquisition expense

 

 

 —

 

 

(173)

Equity in income of unconsolidated subsidiaries

 

 

 —

 

 

3,168 

Other income (expense)

 

 

76 

 

 

(357)

Income before income tax expense

 

 

22,997 

 

 

23,107 

Income tax expense

 

 

(5,880)

 

 

(3,088)

Net income

 

$

17,117 

 

$

20,019 



 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

Basic

 

$

0.57 

 

$

0.68 

Diluted

 

$

0.56 

 

$

0.67 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

 

30,203,243 

 

 

29,515,531 

Diluted

 

 

30,444,276 

 

 

29,833,729 



See Notes to Unaudited Condensed Consolidated Financial Statements







4 

 


 

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

For the Three Months ended March 31, 2019 and 2018

(in thousands)











 

 

 

 

 

 



 

Three months ended March 31,



 

2019

 

2018

Operating activities

 

 

 

 

 

 

Net income

 

$

17,117 

 

$

20,019 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

3,074 

 

 

2,726 

Stock-based compensation expense

 

 

3,534 

 

 

2,516 

Deferred income taxes

 

 

172 

 

 

(2,808)

Distributions from unconsolidated subsidiaries

 

 

 —

 

 

3,460 

Equity in income of unconsolidated subsidiaries

 

 

 —

 

 

(3,168)

(Gain) loss on disposition of assets

 

 

358 

 

 

259 

Changes in assets and liabilities:

 

 

 

 

 

 

Cash held in escrow

 

 

(320)

 

 

16,188 

Accounts receivable

 

 

1,028 

 

 

994 

Inventories

 

 

(69,106)

 

 

(82,377)

Prepaid expenses and other assets

 

 

(2,659)

 

 

56 

Accounts payable

 

 

(15,831)

 

 

(1,637)

Accrued expenses and other liabilities

 

 

(11,296)

 

 

(12,947)

Mortgage loans held for sale

 

 

14,529 

 

 

12,148 

Net cash used in operating activities

 

 

(59,400)

 

 

(44,571)

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(3,270)

 

 

(2,370)

Other investing activities

 

 

(14)

 

 

295 

Net cash used in investing activities

 

 

(3,284)

 

 

(2,075)

Financing activities

 

 

 

 

 

 

Borrowings under revolving credit facilities

 

 

288,800 

 

 

60,000 

Payments on revolving credit facilities

 

 

(204,300)

 

 

(60,000)

Proceeds from issuance of insurance premium notes and other

 

 

9,301 

 

 

 —

Principal payments on notes payable

 

 

(7,716)

 

 

 —

Net proceeds from mortgage repurchase facilities

 

 

(13,689)

 

 

(11,307)

Net proceeds from issuances of common stock

 

 

 —

 

 

5,021 

Repurchases of common stock upon vesting of stock based compensation

 

 

(3,166)

 

 

(4,790)

Repurchases of common stock under our stock repurchase program

 

 

(1,439)

 

 

 —

Net cash provided by (used in) financing activities

 

 

67,791 

 

 

(11,076)

Net increase (decrease)

 

$

5,107 

 

$

(57,722)

Cash and cash equivalents and Restricted cash

 

 

 

 

 

 

Beginning of period

 

 

36,441 

 

 

93,713 

End of period

 

$

41,548 

 

$

35,991 

Supplemental cash flow disclosure

 

 

 

 

 

 

Cash paid for income taxes

 

$

 —

 

$

606 

Cash and cash equivalents and Restricted cash

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,115 

 

$

29,986 

Restricted cash (Note 6)

 

 

3,433 

 

 

6,005 

Cash and cash equivalents and Restricted cash

 

$

41,548 

 

$

35,991 

See Notes to Unaudited Condensed Consolidated Financial Statements

5 

 


 

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Stockholders Equity

For the Three Months ended March 31, 2019 and 2018

(in thousands)













 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Shares

 

Amount

 

Additional Paid-In Capital

 

Retained Earnings

 

Total Stockholders Equity

Balance at December 31, 2018

 

30,155 

 

$

302 

 

$

595,037 

 

$

264,020 

 

$

859,359 

Repurchase of common stock

 

(83)

 

 

 —

 

 

(1,438)

 

 

 —

 

 

(1,438)

Vesting of restricted stock units

 

232 

 

 

 

 

(3,167)

 

 

 —

 

 

(3,166)

Stock-based compensation expense

 

 —

 

 

 —

 

 

3,534 

 

 

 —

 

 

3,534 

Net income

 

 —

 

 

 —

 

 

 —

 

 

17,117 

 

 

17,117 

Balance at March 31, 2019

 

30,304 

 

 

303 

 

 

593,966 

 

 

281,137 

 

 

875,406 







 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Shares

 

Amount

 

Additional Paid-In Capital

 

Retained Earnings

 

Total Stockholders Equity

Balance at December 31, 2017

 

29,503 

 

$

295 

 

$

566,790 

 

$

168,148 

 

$

735,233 

Adoption of ASC 606

 

 —

 

 

 —

 

 

 —

 

 

(583)

 

 

(583)

Issuance of common stock

 

446 

 

 

 

 

5,018 

 

 

 —

 

 

5,021 

Repurchase of common stock

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Repurchase of common stock upon vesting of restricted stock awards

 

(159)

 

 

 —

 

 

(4,788)

 

 

 —

 

 

(4,788)

Stock-based compensation expense

 

 —

 

 

 —

 

 

2,516 

 

 

 —

 

 

2,516 

Net income

 

 —

 

 

 —

 

 

 —

 

 

20,019 

 

 

20,019 

Balance at March 31, 2018

 

29,790 

 

$

298 

 

$

569,536 

 

$

187,584 

 

$

757,418 



See Notes to Unaudited Condensed Consolidated Financial Statements



6 

 


 

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2019



1. Basis of Presentation

Century Communities, Inc. (which we refer to as “we,” “CCS,” or the “Company”), together with its subsidiaries, is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in the States of Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Nevada, North Carolina, Ohio, South Carolina, Tennessee, Texas, Utah, and Washington. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land.  We build and sell homes under our Century Communities and Wade Jurney Homes brands.  Our Century Communities brand targets a wide range of buyer profiles including: first time, first and second time move up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections.  Our Wade Jurney Homes brand solely targets first time homebuyers, sells homes through retail studios and the internet, and provides no option or upgrade selections.  Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Wade Jurney Homes.   Additionally, our indirect wholly-owned subsidiaries, Inspire Home Loans, Inc., Parkway Title, LLC, and IHL Home Insurance Agency, LLC, which provide mortgage, title and insurance services, respectively, to our home buyers have been identified as our Financial Services segment.

On June 14, 2018, we acquired the remaining 50% ownership interest in WJH, LLC (which we refer to as “WJH” or “Wade Jurney Homes”) for $37.5 million. WJH specializes in providing single family homes for first time buyers.  On the acquisition date, WJH had operations in Alabama, Florida, Georgia, North Carolina and South Carolina.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (which we refer to as “GAAP”) for interim financial statements and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 that was filed with the SEC on February 13, 2019.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities for which the Company is deemed to be the primary beneficiary.  We do not have any variable interest entities in which we are deemed the primary beneficiary.  All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Accordingly, actual results could differ from those estimates.

Recently Adopted Accounting Standards

Leases

The Financial Accounting Standards Board (which we refer to as “FASB”) issued ASC 842, Leases (which we refer to as “ASC 842”) which requires the recognition of lease assets and lease liabilities by lessees for most leases.  ASC 842 is effective for the Company beginning January 1, 2019 and interim periods within the annual period.  We adopted ASC 842 under a modified retrospective approach using the option to apply the transition provisions on the effective date January 1, 2019. The modified retrospective approach allows the Company to carryforward our historical lease classification, and to present historical periods under legacy lease accounting guidance.  The Company’s leases primarily consist of leases for office space, and computer and office equipment where we are the lessee.

7 

 


 

ASC 842 includes several practical expedients which we elected upon adoption including to (a) not reassess the lease classification for any expired or existing leases and (b) not reassess whether previously capitalized initial direct costs qualify for capitalization under ASC 842.  Additionally, we elected to utilize hindsight when determining the lease term. 

The adoption of ASC 842 resulted in the establishment of a right of use asset of $17.7 million and a lease liability of $18.7 million on our consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not impact stockholders’ equity.  



Recently Issued Accounting Standards



In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (which we refer to as “ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments.  ASU 2016-13 changes the probable threshold for initial recognition of a credit loss in current GAAP to a model that reflects an entity’s current estimate of all expected credit losses. ASU 2016-13 is effective for our interim and annual reporting periods beginning January 1, 2020.  We are currently evaluating the impact of ASU 2016-13 on our consolidated financial statements





2. Reporting Segments

Our homebuilding operations are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 15 states.  We build and sell homes under our Century Communities and Wade Jurney Homes brands.  Our Century Communities brand is managed by geographic location, and each of our four geographic regions targets a wide range of buyer profiles including: first time, first and second time move up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections.  Each of our four geographic regions is considered a separate operating segment.  Our Wade Jurney Homes brand solely targets first time homebuyers, sells homes through retail studios and the internet, and provides no option or upgrade selections.  Our Wade Jurney Homes brand currently has operations in ten states and is managed separately from our four geographic regions, accordingly, it is considered a separate operating segment.

The management of our four geographic regions and Wade Jurney Homes reports to our chief operating decision makers (which we refer to as “CODMs”), the Co-Chief Executive Officers of our Company.  The CODMs review the results of our operations, including total revenue and income before income tax expense to determine profitability and to allocate resources. Accordingly, we have presented our homebuilding operations as the following five reportable segments:

·

West (California and Washington)

·

Mountain (Colorado, Nevada and Utah)

·

Texas

·

Southeast (Georgia, North Carolina, South Carolina and Tennessee)

·

Wade Jurney Homes (Alabama, Arizona, Florida, Georgia, Indiana, North Carolina, Ohio, South Carolina, Tennessee, and Texas)

We have also identified our Financial Services operations, which provide mortgage, title, and insurance services to our homebuyers, as a sixth reportable segment.  Our Corporate operations are a non-operating segment, as it serves to support our homebuilding, and to a lesser extent our financial services operations, through functions, such as our executive, finance, treasury, human resources, accounting and legal departments.  The following table summarizes total revenue and income before income tax expense by segment (in thousands):   



 

 

 

 

 



Three months ended March 31,



2019

 

2018

Revenue:

 

 

 

 

 

West

$

112,120 

 

$

118,920 

Mountain

 

159,666 

 

 

145,493 

Texas

 

50,486 

 

 

38,028 

Southeast

 

112,812 

 

 

93,849 

Wade Jurney Homes

 

89,573 

 

 

 —

Financial Services

 

8,400 

 

 

5,556 

Corporate

 

 —

 

 

 —

Total revenue

$

533,057 

 

$

401,846 



 

 

 

 

 

Income (loss) before income tax expense:

 

 

 

 

 

West

$

8,648 

 

$

9,869 

Mountain

 

19,308 

 

 

17,923 

Texas

 

3,749 

 

 

1,808 

8 

 


 

Southeast

 

5,739 

 

 

4,681 

Wade Jurney Homes

 

3,973 

 

 

 —

Financial Services

 

1,590 

 

 

1,161 

Corporate

 

(20,010)

 

 

(12,335)

Total income before income tax expense

$

22,997 

 

$

23,107 



The following table summarizes total assets by operating segment (in thousands):



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

West

 

$

541,455 

 

$

502,381 

Mountain

 

 

636,258 

 

 

621,757 

Texas

 

 

217,538 

 

 

209,550 

Southeast

 

 

441,454 

 

 

448,681 

Wade Jurney

 

 

235,126 

 

 

204,925 

Financial Services

 

 

142,633 

 

 

146,710 

Corporate

 

 

108,601 

 

 

120,251 

Total assets

 

$

2,323,065 

 

$

2,254,255 

Corporate assets primarily include certain cash and cash equivalents, certain property and equipment, prepaid insurance, and deferred financing costs on our revolving line of credit.

3. Business Combinations



WJH, LLC - Wade Jurney Homes

On June 14, 2018, we acquired the remaining 50% ownership interest in WJH for $37.5 million, whereby WJH became a 100% owned subsidiary of the Company.  We initially acquired a 50% ownership interest in WJH in November 2016 as part of a joint venture, which was accounted for under the equity method of accounting.  Our Wade Jurney Homes brand solely targets first time homebuyers in markets which are traditionally underserved by new homebuilders, sells homes through retail studios and the internet, and provides no option or upgrade selections.  The acquired assets primarily include homes under construction that are in various stages of completion and are geographically dispersed.  We determined that the fair value of the gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets.  As the acquired assets and processes have the ability to create outputs in the form of revenue from the sale of single family residences, we concluded that the acquisition represents a business combination. We incurred $0.4 million in acquisition costs.



Authoritative guidance on accounting for business combinations requires that an acquirer re-measure its previously held equity interest in the acquisition at its acquisition date fair value and recognize the resulting gain or loss in earnings.  As such, we valued our previously held equity interest in WJH at $35.6 million, which was inclusive of an estimated discount for lack of control of $1.9 million, and recognized a gain of $7.2 million during the year ended December 31, 2018. 



The following table outlines the total consideration transferred, inclusive of cash acquired and the fair value of our previously held equity interest (in thousands):







 

 

 

Cash consideration transferred for 50% ownership interest

 

$

37,500 

Previously held equity interest acquisition date fair value

 

 

35,625 

Net assets acquired

 

$

73,125 

9 

 


 



The following table summarizes our estimates of the assets acquired and liabilities assumed as of the acquisition date (in thousands):  





 

 

Cash and cash equivalents

$

9,464 

Cash held in escrow

 

260 

Accounts receivable

 

1,042 

Inventories

 

156,828 

Prepaid expenses and other assets

 

7,710 

Amortizable intangible assets, net

 

3,600 

Goodwill

 

3,317 



$

182,221 



 

 

Accounts payable

$

12,516 

Accrued expenses and other liabilities

 

2,349 

Total senior notes and revolving line of credit

 

94,231 

Total liabilities

 

109,096 

Fair value of assets acquired

$

73,125 

Acquired inventories consist primarily of work in process inventories. We estimated the fair value of acquired work in process inventories based upon the stage of production of each unit and a gross margin that we believe a market participant would require to complete the remaining development and requisite selling efforts.  The stage of production, as of the acquisition date, ranged from recently started lots to fully completed single family residences.   Amortizable intangible assets include acquired trade names and a non-compete agreement, which were estimated to have fair values of $3.3 million and $0.3  million, respectively, and are amortized over 10 years and 2 years, respectively. 

We determined that WJH’s carrying costs approximated fair value for all other acquired assets and assumed liabilities. 

WJH’s results of operations, which include homebuilding revenues of $89.6 million and income before tax inclusive of purchase price accounting, of $4.0 million are included in our accompanying Consolidated Statement of Operations for the three months ended March 31, 2019.



Pro Forma Financial Information

Pro forma revenue and income before tax expense for the quarter ended March 31, 2018 gives effect to the results of the acquisition of WJH. The effect of the WJH acquisition is reflected as though the acquisition date was as of January 1, 2018.  Unaudited pro forma income before tax expense adjusts the operating results of WJH to reflect the additional costs that would have been recorded assuming the fair value adjustments had been applied as of the beginning of the year preceding the year of the acquisition and excludes acquisition expense incurred related to the transactions. 







 

 



Three months ended

March 31, 2018

Total revenues

$

474,452 



 

 

Income before tax expense

$

23,113 

Tax expense

 

(3,086)

Net income

$

20,027 

Less: Undistributed earnings allocated to participating securities

 

(49)

Numerator for basic and diluted pro forma EPS

$

19,978 



 

 

Pro forma weighted average shares-basic

 

29,515,531 

Pro forma weighted average shares-diluted

 

29,833,729 



 

 

Pro forma basic EPS

$

0.68 

Pro forma diluted EPS

$

0.67 



















10 

 


 

4. Inventories

Inventories included the following (in thousands):





 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Homes under construction

 

$

989,153 

 

$

1,073,682 

Land and land development

 

 

895,518 

 

 

720,719 

Capitalized interest

 

 

59,121 

 

 

53,842 

Total inventories

 

$

1,943,792 

 

$

1,848,243 





5. Financial Services

 

Our Financial Services are principally comprised of our mortgage lending operations, Inspire Home Loans, Inc. (which we refer to as “Inspire”).  Inspire, is a full-service mortgage lender and primarily originates mortgage loans for our homebuyers. Inspire sells substantially all of the loans it originates and their related servicing rights in the secondary mortgage market within a short period of time after origination, generally within 30 days.  Inspire primarily finances these loans under its mortgage repurchase facilities.  Mortgage loans in process for which interest rates were committed to borrowers totaled approximately $45.2 million and $26.2 million at March 31, 2019 and December 31, 2018, respectively, and carried a weighted average interest rate of approximately 4.4%, and 4.7%, respectively.  As of March 31, 2019 and December 31, 2018, Inspire had mortgage loans held for sale with an aggregate fair value of $98.6 million and $114.1 million, respectively, and an aggregate outstanding principal balance of $93.8 million and $108.0 million, respectively. Interest rate risks related to these obligations are mitigated by the preselling of loans to investors or through our interest rate hedging program.



Mortgage loans held-for-sale, including the rights to service the mortgage loans, as well as the derivative instrument used to economically hedge our interest rate risk, which are typically forward commitments on mortgage backed securities, are carried at fair value and changes in fair value are reflected in Financial Services Revenue on the Consolidated Statement of Operations. Management believes carrying loans held-for-sale at fair value improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them.



6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets included the following (in thousands):







 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Prepaid insurance

 

$

31,780 

 

$

20,226 

Lot option and escrow deposits

 

 

46,070 

 

 

51,038 

Performance deposits

 

 

6,626 

 

 

4,552 

Deferred financing costs revolving line of credit, net

 

 

4,226 

 

 

4,155 

Restricted cash

 

 

3,433 

 

 

3,539 

Secured note receivable

 

 

2,700 

 

 

4,947 

Right of use assets

 

 

17,254 

 

 

 —

Insurance receivable and other

 

 

11,159 

 

 

50,260 

Total prepaid expenses and other assets

 

$

123,248 

 

$

138,717 

 



11 

 


 

7. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities included the following (in thousands):





 

 

 

 

 

 



 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Earnest money deposits

 

$

12,922 

 

$

13,990 

Warranty reserve

 

 

8,633 

 

 

7,970 

Accrued compensation costs

 

 

17,259 

 

 

29,770 

Land development and home construction accruals

 

 

118,653 

 

 

77,748 

Accrued interest

 

 

16,583 

 

 

15,636 

Lease liabilities - operating leases

 

 

18,184 

 

 

 —

Income taxes payable

 

 

3,638 

 

 

 —

Liability for product financing arrangements and other

 

 

12,974 

 

 

68,043 

Total accrued expenses and other liabilities

 

$

208,846 

 

$

213,157 



 



8. Warranties

Estimated future direct warranty costs are accrued and charged to cost of home sales revenues in the period when the related home sales revenues are recognized. Amounts accrued, which are included in Accrued expenses and other liabilities on the Consolidated Balance Sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal model that incorporates historical payment trends and adjust the amounts recorded if necessary. We increased our warranty reserve by $22 thousand during the three months ended March 31, 2019, compared to a $45 thousand decrease during the same period in 2018. This adjustment is included as a reduction to Cost of home sales revenues on our Consolidated Statements of Operations.   Changes in our warranty accrual are detailed in the table below (in thousands):





 

 

 

 

 

 



 

Three months ended March 31,



 

2019

 

2018

Beginning balance

 

$

7,970 

 

$

8,531 

Warranty expense provisions

 

 

1,661 

 

 

1,434 

Payments

 

 

(1,020)

 

 

(959)

Warranty adjustment

 

 

22 

 

 

(45)

Ending balance

 

$

8,633 

 

$

8,961 

 



9. Debt



Our outstanding debt obligations included the following as of March 31, 2019 and December 31, 2018 (in thousands):  











 

 

 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

6.875% senior notes, due May 2022(1)

 

$

380,900 

 

$

380,567 

5.875% senior notes, due July 2025(1)

 

 

395,591 

 

 

395,415 

Insurance premium notes and other financing obligations

 

 

10,381 

 

 

8,795 

Senior notes payable

 

 

786,872 

 

 

784,777 

Revolving line of credit, due April 2022

 

 

287,000 

 

 

202,500 

Mortgage repurchase facility

 

 

90,866 

 

 

104,555 

Total debt

 

$

1,164,738 

 

$

1,091,832 

(1)    The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes.

 

Revolving Line of Credit

We are party to an Amended and Restated Credit Agreement with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, the lenders party thereto and certain of our subsidiaries, which, as amended most recently on February 12, 2019, provides us with a revolving line of credit of up to $640.0 million, and unless terminated earlier, will mature on April 30, 2022.  Under the terms of the Amended and Restated Credit Agreement, we may request a twelve-month extension of the maturity date.  Our obligations under

12 

 


 

the Amended and Restated Credit Agreement are guaranteed by certain of our subsidiaries. The Amended and Restated Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default.  These covenants are measured as defined in the Amended and Restated Credit Agreement and are reported to the lenders quarterly.  Borrowings under the Amended and Restated Credit Agreement bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.60% and 3.10% per annum, or, in the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.60% and 2.10% per annum.  As of March 31, 2019, we had $287.0 million outstanding under the credit facility, leaving $353.0 million in availability and were in compliance with all covenants.



Mortgage Repurchase Facilities – Financial Services 

On May 4, 2018 and September 14, 2018, Inspire entered into mortgage warehouse facilities, with Comerica Bank, and J.P. Morgan, respectively. The mortgage warehouse lines of credit (which we refer to as the “Repurchase Facilities”) provide Inspire with uncommitted repurchase facilities of up to $140 million, secured by the mortgage loans financed thereunder. Amounts outstanding under the Repurchase Facilities are not guaranteed by us or any of our subsidiaries and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of March 31, 2019, we had $90.9 million outstanding under these Repurchase Facilities and were in compliance with all covenants thereunder. No assurance can be provided, however, that we will remain in compliance with the covenants or have continued access to these facilities or substitute or replacement facilities in an amount sufficient to fund our mortgage lending business.  During the three months ended March 31, 2019 and 2018, we incurred interest expense on our Repurchase Facilities of $0.6 million and $0.2 million, respectively, which are included in financial services costs on our Consolidated Statements of Operations.



10. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed.  As our qualifying assets exceeded our outstanding debt during the three months ended March 31, 2019 and 2018, we capitalized all interest costs incurred during these periods, except for interest incurred on our Mortgage repurchase facilities.

Our interest costs are as follows (in thousands):





 

 

 

 

 

 

 



 

Three months ended March 31,

 



 

2019

 

2018

 

Interest capitalized beginning of period

 

$

53,842 

 

 

41,762 

 

Interest capitalized during period

 

 

17,866 

 

 

13,357 

 

Less: capitalized interest in cost of sales

 

 

(12,587)

 

 

(8,959)

 

Interest capitalized end of period

 

$

59,121 

 

 

46,160 

 



















11. Income Taxes



At the end of each interim period we are required to estimate our annual effective tax rate for the fiscal year, and to use that rate to provide for income taxes for the current year-to-date reporting period.  Our 2019 estimated annual effective tax rate of 26.7% is driven by our blended federal and state statutory rate of 24.9%, and certain other permanent differences between GAAP and tax which increased our rate by 1.8%

For the three months ended March 31, 2019 our estimated annual rate of 26.7% was impacted by discrete items which had a net impact of decreasing our rate by 1.2%, including excess tax benefits for vested stock-based compensation.



For the three months ended March 31, 2019 and 2018, we recorded income tax expense of $5.9 million and $3.1 million, respectively.



12. Fair Value Disclosures

Accounting Standards Codification Topic 820, Fair Value Measurement, defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:

Level 1 — Quoted prices for identical instruments in active markets.

13 

 


 

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date.

Level 3 — Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date.

The following table presents carrying values and estimated fair values of financial instruments (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

March 31, 2019

 

December 31, 2018



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Hierarchy 

 

Carrying 

 

Fair Value

 

Carrying 

 

Fair Value

Secured notes receivable(1)

 

Level 2

 

$

2,700 

 

$

2,616 

 

$

4,947 

 

$

4,830 

Mortgage loans held for sale(2)

 

Level 2

 

$

98,591 

 

$

98,591 

 

$

114,074 

 

$

114,074 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.875% senior notes(3)

 

Level 2

 

$

380,900 

 

$

385,308 

 

$

380,567 

 

$

367,618 

5.875 % senior notes (3)

 

Level 2

 

$

395,591 

 

$

373,591 

 

$

395,415 

 

$

351,414 

3.278% insurance premium notes(4)

 

Level 2

 

$

10,381 

 

$

10,381 

 

$

6,475 

 

$

6,475 

Revolving line of credit(4)

 

Level 3

 

$

287,000 

 

$

287,000 

 

$

202,500 

 

$

202,500 

Other financing obligation(4)

 

Level 2

 

$

 —

 

$

 —

 

$

2,320 

 

$

2,320 

Mortgage repurchase facilities(4)

 

Level 2

 

$

90,866 

 

$

90,866 

 

$

104,555 

 

$

104,555 



(1)

Estimated fair value of the secured notes receivable was based on cash flow models discounted at market interest rates that considered the underlying risks of the note.

(2)

The mortgage loans held for sale are carried at fair value, which was based on quoted market prices for those committed mortgage loans.

(3)

Estimated fair value of the senior notes incorporated recent trading activity in inactive markets.

(4)

Carrying amount approximates fair value due to short-term nature and interest rate terms.

The carrying amount of cash and cash equivalents approximates fair value. Non-financial assets and liabilities are measured at fair value when acquired in a business combination.  Long-lived assets determined to be impaired are measured at fair value.

13. Stock-Based Compensation

During the three months ended March 31, 2019, we granted performance share units (which we refer to as “PSUs”) covering up to 0.3 million shares of common stock, assuming maximum level of performance, with a grant date fair value of $22.01 per share that are subject to both service and performance vesting conditions.  The quantity of shares that will vest under the PSUs ranges from 0% to 250% of a targeted number of shares for each participant and will be determined based on an achievement of a three-year pre-tax income performance goal. During the three months ended March 31, 2019, we also granted restricted stock units (which we refer to as “RSUs”) covering 0.5 million shares of common stock with a grant date fair value of $23.76 per share that vest over a three-year period.  As of March 31, 2019, we had no remaining unvested restricted stock awards (which we refer to as “RSAs”) outstanding. 

A summary of our outstanding RSUs and PSUs, assuming maximum level of performance, are as follows (in thousands, except years):





 

 

 



 

As of March 31, 2019

Unvested units

 

 

1,326 

Unrecognized compensation cost

 

$

24,442 

Period to recognize compensation cost

 

 

2.0 years

During the three months ended March 31, 2019 and 2018, we recognized stock-based compensation expense of $3.5 million and $2.5 million, respectively. Stock-based compensation expense is included in selling, general, and administrative on our Consolidated Statements of Operations.

14. Stockholders’ Equity

Our authorized capital stock consists of 100.0 million shares of common stock, par value $0.01 per share, and 50.0 million shares of preferred stock, par value $0.01 per share. As of March 31, 2019 and December 31, 2018, there were 30.3 million and 30.2 million shares of common stock issued and outstanding, respectively.

14 

 


 

On May 10, 2017, our stockholders approved the adoption of the Century Communities, Inc. 2017 Omnibus Incentive Plan (which we refer to as our “2017 Incentive Plan”), which replaced our First Amended & Restated 2013 Long-Term Incentive Plan.  We had reserved a total of 1.8 million shares of our common stock for issuance under our First Amended & Restated 2013 Long-Term Incentive Plan, of which approximately 0.6 million shares rolled over into the 2017 Incentive Plan when it became effective. We issued 0.4 million shares of common stock related to the vesting of RSUs during the three months ended March 31, 2019.  As of March 31, 2019, approximately 0.2 million shares remained available for issuance under the 2017 Incentive Plan.  

On July 3, 2018, we entered into a Distribution Agreement with J.P. Morgan Securities LLC, Citigroup Global Markets Inc., and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sales agents pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through any of the sales agents party thereto in “at-the-market” offerings.  This Distribution Agreement, which superseded and replaced a prior similar Distribution Agreement, had $72.7 million available for sale as of March 31, 2019. We did not sell or issue any shares of our common stock during the three months ended March 31, 2019. During the three months ended March 31, 2018, we sold and issued an aggregate of 0.2 million shares of our common stock under a prior Distribution Agreement, which provided net proceeds of $5.0 million, and in connection with such sales, paid total commissions and fees to the Sales Agents of $0.1 million. The Distribution Agreement will remain in full force and effect until terminated by either party pursuant to the terms of the agreement or such date that the maximum offering amount has been sold in accordance with the terms of the agreement.



15.  Earnings Per Share

We use the two-class method of calculating EPS as our non-vested RSAs have non-forfeitable rights to dividends and, accordingly, represent a participating security. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period.  We use the treasury stock method to calculate the dilutive effect of our RSUs and PSUs as these awards do not have participating rights.

The following table sets forth the computation of basic and diluted EPS for the three months ended March 31, 2019 and 2018 (in thousands, except share and per share information):



 

 

 

 

 



Three months ended



March 31,



2019

 

2018

Numerator

 

 

 

 

 

Net income

$

17,117 

 

$

20,019 

Less: Undistributed earnings allocated to participating securities

 

 —

 

 

(49)

Net income allocable to common stockholders

$

17,117 

 

$

19,970 

Denominator

 

 

 

 

 

Weighted average common shares outstanding - basic

 

30,203,243 

 

 

29,515,531 

Dilutive effect of restricted stock units

 

241,033 

 

 

318,198 

Weighted average common shares outstanding - diluted

 

30,444,276 

 

 

29,833,729 

Earnings per share:

 

 

 

 

 

Basic

$

0.57 

 

$

0.68 

Diluted

$

0.56 

 

$

0.67 



Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are antidilutive.  We excluded 0.3 million common unit equivalents from diluted earnings per share during the three months ended March 31, 2019 related to the PSUs granted during the periods.  We did not have any common unit equivalents to exclude from diluted earnings per share during the three months ended March 31, 2018.













16. Commitments and Contingencies

Letters of Credit and Performance Bonds

In the normal course of business, we post letters of credit and performance bonds related to our land development performance obligations with local municipalities. As of March 31, 2019, and December 31, 2018, we had $298.0 million and $289.8  million, respectively, in letters of credit and performance bonds issued and outstanding.

Litigation

15 

 


 

We are subject to claims and lawsuits that arise primarily in the ordinary course of business, which consist primarily of construction defect claims. It is the opinion of our management that if the claims have merit, parties other than the Company would be, at least in part, liable for the claims, and eventual outcome of these claims will not have a material adverse effect upon our consolidated financial condition, results of operations, or cash flows. When we believe that a loss is probable and estimable, we record a charge to selling, general, and administrative on our Consolidated Statements of Operations for our estimated loss.

Under various insurance policies, we have the ability to recoup costs in excess of applicable self-insured retentions.  Estimates of such amounts are recorded in other assets when recovery is probable.  As of December 31, 2018, substantially all of the amounts reflected in Insurance receivable and other were related to construction claims, which were settled and amounts collected under the applicable insurance policies during the quarter ended March 31, 2019.

We do not believe that the ultimate resolution of any claims and lawsuits will have a material adverse effect upon our consolidated financial position, results of operations, or cash flows.

17. Leases



Under ASC 842, the Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.



We primarily enter into operating leases for the right to use office space, and computer and office equipment, which have lease terms that generally range from 1 to 7 years and often include one or more options to renew.  We include renewal terms in the lease term when it is reasonably certain that we will exercise the option.  For leases entered into after January 1, 2019, we establish a right of use asset and a lease liability at the commencement date of the lease based on the present value of future minimum lease payments.  As the rate implicit in each lease is not readily determinable, we utilize our incremental borrowing rate in determining the present value of future minimum payments.  Our incremental borrowing rate is determined based on information available at the commencement date.  We account for the lease components and non-lease components as a single lease component. As of March 31, 2019, the Company had $17.3 million and $18.2 million recognized as a right of use asset and lease liability, respectively, which are presented on the consolidated balance sheet within Prepaid expenses and other assets and Accrued expenses and other liabilities, respectively.  The Company has entered into various short-term operating leases, primarily for marketing billboards, with an initial term of twelve months or less.  These leases are not recorded on the Company's balance sheet.



Under both ASC 840 and ASC 842, operating lease expense is recognized on a straight-line basis over the lease term and was $1.4 million and $0.9 million for the quarters ended March 31, 2019 and 2018, respectively.

Information related to the Company’s right of use asset and lease liability were as follows (in thousands):



 

 

 

 



 

 

 

 



 

Three Months Ended

March 31, 2019

 

Cash paid for operating lease liabilities

 

$

1,311 

 

Right-of-use assets obtained in exchange for new operating lease obligations

 

$

847 

 

Weighted-average remaining lease term

 

 

4.29 years

 

Weighted-average discount rate

 

 

6.39 

%

Maturities of lease liabilities as of March 31, 2019 were as follows (in thousands):



 

 

 



 

 

 

Due in 12 month period ended March 31,

 

 

 

2020

 

$

5,492 

2021

 

 

5,023 

2022

 

 

4,027 

2023

 

 

2,861 

2024

 

 

2,258 

Thereafter

 

 

1,251 

Total

 

 

20,912 

Less: discount

 

 

(2,728)

Total lease liabilities

 

$

18,184 

16 

 


 













18. Supplemental Guarantor Information

Our 6.875% senior notes due 2022 and 5.875% senior notes due 2025 (which we collectively refer to as our “Senior Notes”) are our unsecured senior obligations and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to collectively as “Guarantors”).

Each of the indentures governing our Senior Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the respective indentures), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the respective indentures) or is made in compliance with applicable provisions of the applicable indenture; (2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable indenture; provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the respective indentures); (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the applicable indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the applicable Indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the respective Indentures), in accordance with the applicable indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the applicable indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the applicable indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the applicable indenture.  

As the guarantees were made in connection with exchange offers effected in February 2015, October 2015 and April 2017 and the issuance of the 5.875% senior notes due 2025, the Guarantors’ condensed financial information is presented as if the guarantees existed during the periods presented. If any Guarantors are released from the guarantees in future periods, the changes are reflected prospectively. 

We have determined that separate, full financial statements of the Guarantors would not be material to investors, and accordingly, supplemental financial information is presented below:

17 

 


 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Supplemental Condensed Consolidated Balance Sheet



 

As of March 31, 2019  (in thousands)  



 

 

 

 

Guarantor

 

Non Guarantor

 

Elimination

 

Consolidated



 

Century

 

Subsidiaries

 

Subsidiaries

 

Entries

 

Century

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

643 

 

 

2,596 

 

 

34,876 

 

 

 —

 

$

38,115 

Cash held in escrow

 

 

 —

 

 

24,664 

 

 

 —

 

 

 —

 

 

24,664 

Accounts receivable

 

 

3,627 

 

 

8,754 

 

 

55 

 

 

 —

 

 

12,436 

Investment in consolidated  subsidiaries

 

 

1,928,076 

 

 

 —

 

 

 —

 

 

(1,928,076)

 

 

 —

Inventories

 

 

 —

 

 

1,943,792 

 

 

 —

 

 

 —

 

 

1,943,792 

Mortgage loans held for sale

 

 

 —

 

 

 —

 

 

98,591 

 

 

 —

 

 

98,591 

Prepaid expenses and other assets

 

 

13,807 

 

 

101,649 

 

 

7,792 

 

 

 —

 

 

123,248 

Deferred tax assets, net

 

 

13,591 

 

 

 —

 

 

 —

 

 

 —

 

 

13,591 

Property and equipment, net

 

 

13,966 

 

 

18,578 

 

 

927 

 

 

 —

 

 

33,471 

Amortizable intangible assets, net

 

 

 —

 

 

4,762 

 

 

 —

 

 

 —

 

 

4,762 

Goodwill

 

 

 —

 

 

30,395 

 

 

 —

 

 

 —

 

 

30,395 

Total assets

 

$

1,973,710 

 

$

2,135,190 

 

$

142,241 

 

$

(1,928,076)

 

$

2,323,065 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

835 

 

 

73,002 

 

 

238 

 

 

 —

 

$

74,075 

Accrued expenses and other liabilities

 

 

33,978 

 

 

166,029 

 

 

8,839 

 

 

 —

 

 

208,846 

Notes payable

 

 

776,491 

 

 

10,381 

 

 

 —

 

 

 —

 

 

786,872 

Revolving line of credit

 

 

287,000 

 

 

 —

 

 

 —

 

 

 —

 

 

287,000 

Mortgage repurchase facilities

 

 

 —

 

 

 —

 

 

90,866 

 

 

 —

 

 

90,866 

Total liabilities

 

 

1,098,304 

 

 

249,412 

 

 

99,943 

 

 

 —

 

 

1,447,659 

Stockholders’ equity:

 

 

875,406 

 

 

1,885,778 

 

 

42,298 

 

 

(1,928,076)

 

 

875,406 

Total liabilities and stockholders’ equity

 

$

1,973,710 

 

$

2,135,190 

 

$

142,241 

 

$

(1,928,076)

 

$

2,323,065 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Supplemental Condensed Consolidated Balance Sheet



 

As of December 31, 2018  (in thousands)  



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Guarantor

 

Non Guarantor

 

Elimination

 

Consolidated



 

Century

 

Subsidiaries

 

Subsidiaries

 

Entries

 

Century

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,183 

 

 

2,101 

 

 

28,618 

 

 

 —

 

$

32,902 

Cash held in escrow

 

 

 —

 

 

24,344 

 

 

 —

 

 

 —

 

 

24,344 

Accounts receivable

 

 

6,117 

 

 

7,424 

 

 

(77)

 

 

 —

 

 

13,464 

Investment in consolidated  subsidiaries

 

 

1,827,456 

 

 

 —

 

 

 —

 

 

(1,827,456)

 

 

 —

Inventories

 

 

 —

 

 

1,848,243 

 

 

 —

 

 

 —

 

 

1,848,243 

Mortgage loans held for sale

 

 

 —

 

 

 —

 

 

114,074 

 

 

 —

 

 

114,074 

Prepaid expenses and other assets

 

 

51,177 

 

 

85,224 

 

 

2,316 

 

 

 —

 

 

138,717 

Deferred tax assets, net

 

 

13,763 

 

 

 —

 

 

 —

 

 

 —

 

 

13,763 

Property and equipment, net

 

 

13,274 

 

 

18,989 

 

 

995 

 

 

 —

 

 

33,258 

Amortizable intangible assets, net

 

 

 —

 

 

5,095 

 

 

 —

 

 

 —

 

 

5,095 

Goodwill

 

 

 —

 

 

30,395 

 

 

 —

 

 

 —

 

 

30,395 

Total assets

 

$

1,913,970 

 

$

2,021,815 

 

$

145,926 

 

$

(1,827,456)

 

$

2,254,255 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities: