(In Thousands, Except Percentages — Unaudited)
This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted housing gross profit margin which is not calculated in accordance with generally accepted accounting principles (“GAAP”). The Company believes this non-GAAP financial measure is relevant and useful to investors in understanding its operations, and may be helpful in comparing the Company with other companies in the homebuilding industry to the extent they provide similar information. However, because the adjusted housing gross profit margin is not calculated in accordance with GAAP, this measure may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as an alternative to the operating and financial performance measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement its respective most directly comparable GAAP financial measure in order to provide a greater understanding of the factors and trends affecting the Company’s operations.
Adjusted Housing Gross Profit Margin
The following table reconciles the Company’s housing gross profit margin calculated in accordance with GAAP to the non-GAAP financial measure of the Company’s adjusted housing gross profit margin:
|Six Months||Three Months|
|Housing construction and land costs||(786,263||)||(484,873||)||(442,998||)||(253,041||)|
|Housing gross profits||138,341||67,627||78,790||47,564|
|Add: Inventory impairment and land option contract abandonment charges||284||16,509||284||9,937|
|Water intrusion-related charges||17,547||—||15,873||—|
|Less: Warranty adjustments||—||(11,162||)||—||(11,162||)|
|Adjusted housing gross profits||$||156,172||$||62,974||$||94,947||$||36,339|
|Housing gross profit margin as a percentage of housing revenues||15.0||%||12.2||%||15.1||%||15.8||%|
|Adjusted housing gross profit margin as a percentage of housing revenues||16.9||%||11.4||%||18.2||%||12.1||%|
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