TRI Pointe Group, Inc. (NYSE: TPH) today announced results for the second quarter ended June 30, 2015.

On July 7, 2014, TRI Pointe consummated the merger with Weyerhaeuser Real Estate Company ("WRECO"). The merger was accounted for as a "reverse acquisition" of TRI Pointe by WRECO. As a result, legacy TRI Pointe's financial results are only included in the combined company's financial statements from the closing date forward and are not reflected in the combined company's historical financial statements. Accordingly, legacy TRI Pointe's financial results are not included in the Generally Accepted Accounting Principles ("GAAP") results for the three and six months ended June 30, 2014, included in this press release. The Company has appended Supplemental Combined Company Information to this press release to provide supplemental financial and operational information of the combined company that is "Adjusted" to include legacy TRI Pointe's standalone operations for the relevant periods prior to the merger.

Results and Operational Data for Second Quarter 2015 and Comparisons to Second Quarter 2014
  • Net income available to common shareholders was $54.9 million, or $0.34 per diluted share compared to $24.2 million, or $0.19 per diluted share
  • New home orders increased to 1,238 compared to 763, an increase of 62%
  • Active selling communities averaged 119.5 compared to 97.5
    • New home orders per average selling community were 10.4 orders (3.5 monthly) compared to 7.8 orders (2.6 monthly), an increase of 33%
    • Cancellation rate was consistent at 16%
  • Backlog units of 1,998 homes with a dollar value increase of 79%, to $1.2 billion
    • Average sales price in backlog increased 7% to $601,000
  • Home sales revenue of $427.2 million, an increase of 38%
    • New homes deliveries of 798, up 27%
    • Average sales price of homes delivered grew 9% to $535,000
  • Homebuilding gross margin percentage of 20.0%
    • Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 22.0%*
  • Land and lot sales gross margin percentage of 82.9%
  • SG&A expense as a percentage of homes sales revenue improved to 12.6% compared to 13.6%
  • Ratios of debt and net debt to capital of 46.0% and 43.5%, respectively, at June 30, 2015*
  • Cash of $121.9 million and availability under unsecured revolving credit facility of $141.1 million

* See "Reconciliation of Non-GAAP Financial Measures"

"I am extremely pleased with our company's execution this quarter," commented Chief Executive Officer Doug Bauer. "TRI Pointe Group continued to sell homes at a healthy pace, with an absorption rate of 3.5 homes per community per month, compared to a rate of 2.6 homes per community per month in the same period in 2014. We also delivered on our previously stated guidance for backlog conversion and homebuilding gross margins. In addition, we closed the Pacific Highlands Ranch commercial site land sale which generated revenue of $53.0 million and $49.6 million of gross margin. These achievements resulted in a 68% year-over-year increase to earnings per share, and reflect our ongoing commitment to unlocking shareholder value through our traditional homebuilding operations and strategic land sales."

GAAP Second quarter 2015 operating results

Net income available to common shareholders was $54.9 million, or $0.34 per diluted share in the second quarter of 2015, compared net income of $24.2 million, or $0.19 per diluted share for the second quarter of 2014. The improvement in net income available to common shareholders was primarily driven by an increase of $53.2 million in land sales gross margin and an $18.6 million increase in homebuilding gross margin due to higher home sales revenue, offset by an increase in SG&A expense of $12.0 million, an increase in the Company's provision for income taxes of $24.4 million and an increase in net income attributable to noncontrolling interests of $1.8 million.

Home sales revenue increased $117.6 million to $427.2 million for the second quarter of 2015, as compared to $309.6 million for the same period in 2014. The increase was attributable to a 27% increase in new home deliveries to 798 and a 9% increase in the Company's average sales price of homes delivered to $535,000. The increase in new home deliveries and the average sales price was primarily attributable to the addition of legacy TRI Pointe which delivered 174 homes with an average sales price of $750,000 for the quarter ended June 30, 2015, with no comparable amounts in the prior year period.

New home orders increased 62% to 1,238 homes for the second quarter of 2015, as compared to 763 homes for the same period in 2014. In addition, average active selling communities increased to 119.5 as compared to 97.5 for the same period in the prior year, mainly due to the addition of legacy TRI Pointe. The Company's overall absorption rate per average selling community for the three months ended June 30, 2015, increased 33% to 10.4 orders (3.5 monthly) compared to 7.8 orders (2.6 monthly) during the same period in 2014.

The Company ended the quarter with 1,998 homes in backlog, representing approximately $1.2 billion in future home sales revenue. The average sales price of homes in backlog as of June 30, 2015, increased $38,000, or 7%, to $601,000 compared to $563,000 at June 30, 2014. The increase in average sales price of homes in backlog was primarily attributable to the addition of legacy TRI Pointe which had an average sales price of homes in backlog of $712,000 as of June 30, 2015.

Homebuilding gross margin percentage for the second quarter of 2015 decreased to 20.0% compared to 21.6% for the same period in 2014 but increased sequentially from 19.9% during the first quarter of 2015. This decrease compared to the same period in the 2014 was primarily due to increases in land, labor and material costs outpacing home price appreciation. Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.0%* for the second quarter of 2015 versus 23.3%* for the same period in 2014.

Land and lot sales revenue increased $40.0 million to $67.5 million for the second quarter of 2015, as compared to $27.5 million for the same period in 2014. Land and lot sales gross margin percentage for the second quarter increased to 82.9% compared to 10.0% for the same period in 2014. The increase in land and lot sales revenue and gross margin percentage was mainly due to the sale of a 15.72 acre employment center located in the Pacific Highlands Ranch master plan community in the San Diego, CA division of our Pardee Homes reporting segment. The sale was completed in June of 2015 for $53.0 million in cash. The transaction included significant gross profits due to the low land basis of the Pacific Highlands Ranch community which was purchased in 1981.

Selling, general and administrative expense for the second quarter of 2015 improved to 12.6% of home sales revenue as compared to 13.6% for the same period in 2014. The decrease in the selling, general and administrative expense ratio was primarily attributable to higher leverage from increased home sales revenue due to the addition of TRI Pointe.

Thomas Mitchell, TRI Pointe Group's President and Chief Operating Officer, said, "TRI Pointe's homebuilding operations continue to gain momentum, as evidenced by our 38% increase in homebuilding revenues and our 62% increase in homes sold. With quarter end backlog up 68% year-over-year on a unit basis, and up 79% on a dollar value basis, TRI Pointe stands poised to deliver strong top and bottom line results in the second half of 2015."

The following operational information is "Adjusted" to include legacy TRI Pointe's operations for the second quarter of 2014. No other adjustments have been made to this information, which is purely informational and does not purport to be indicative of what would have happened had the merger occurred as of the beginning of the period presented, nor is it indicative of results that may occur in the future, nor does it include any synergies of the combined company. Please refer to the Reconciliation of Non-GAAP Financial Measures and Supplemental Combined Company Information appended to this press release.

Adjusted Operational Information for Second Quarter 2015 and Comparisons to Second Quarter 2014
  • New home orders increased to 1,238 compared to 953, an increase of 30%
  • Active selling communities averaged 119.5 compared to 109.8
    • New home orders per average selling community were 10.4 orders (3.5 monthly) compared to 8.7 orders (2.9 monthly), an increase of 20%
    • Cancellation rate of 16% compared to 14%
  • Backlog units of 1,998 homes with a dollar value of $1.2 billion, an increase of 36% and 33% respectively
    • Average sales price in backlog decreased 2% to $601,000
  • Home sales revenue of $427.2 million, an increase of 8%
    • New homes deliveries of 798, an increase of 9%
    • Average sales price of homes delivered decreased 1% to $535,000

* See "Reconciliation of Non-GAAP Financial Measures"

Outlook

For the third quarter of 2015, the Company anticipates delivering approximately 50% of its 1,998 units in backlog as of June 30, 2015. In addition, the Company expects to open 8 new communities, and close out of 14, resulting in 116 active selling communities as of September 30, 2015. The Company anticipates expanding homebuilding gross margins for the third quarter sequentially from the second quarter of 2015.

For the full year 2015, the Company expects to increase new home deliveries by 25% over 2014 combined deliveries. In addition, the Company expects full year homebuilding gross margins to be approximately 21%. Finally, the Company is reiterating its 2015 outlook for earnings per diluted share to a range of $1.15 to $1.30.

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 Monday, August 10, 2015. The call will be hosted by Doug Bauer, Chief Executive Officer and Mike Grubbs, Chief Financial Officer.

Interested parties can listen to the call live on the internet through the Investor Relations section of the Company's website at www.TRIPointeGroup.com. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call can also be accessed by dialing 1-877-407-3982 for domestic participants or 1-201-493-6780 for international participants. Participants should ask for the TRI Pointe Group Second Quarter 2015 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start. The replay of the call will be available for two weeks following the call. To access the replay, the domestic dial-in number is 1-877-870-5176, the international dial-in number is 1-858-384-5517, and the pass code is 13614256. An archive of the webcast will be available on the Company's website for a limited time.

About TRI Pointe Group, Inc.

Headquartered in Irvine, California, TRI Pointe Group, Inc. (NYSE: TPH) is one of the top ten largest public homebuilders by equity market capitalization in the United States. The company designs, constructs and sells premium single-family homes through its portfolio of six quality brands across eight states, included Maracay Homes in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California and Colorado; and Winchester Homes in Maryland and Virginia. Additional information is available at www.tripointegroup.com.

Forward-Looking Statements

Various statements contained in this presentation, 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 projections and estimates concerning the timing and success of specific projects, our ability to achieve the anticipated benefits of the Weyerhaeuser Real Estate Company (WRECO) transaction and our future production, operational and financial results, financial condition, prospects, and capital spending. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "intend," "anticipate," "potential," "plan," "goal," "will," or other words that convey future events or outcomes. The forward-looking statements in this presentation speak only as of the date of this presentation, 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 effect 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; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; global economic conditions; raw material prices; oil and other energy prices; the effect of weather; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters; transportation costs; federal and state tax policies; the effect of land use, environment and other governmental regulations; legal proceedings; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; the risk that disruptions from the WRECO transaction will harm our business; our ability to achieve the benefits of the WRECO transaction in the estimated amount and the anticipated timeframe, if at all; our ability to integrate WRECO successfully and to achieve the anticipated synergies therefrom; changes in accounting principles; our relationship, and actual and potential conflicts of interest, with Starwood Capital Group or its affiliates; and additional factors discussed under the sections captioned "Risk Factors" included in our annual and quarterly reports filed with the Securities and Exchange Commission ("SEC"). 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.
KEY OPERATIONS AND FINANCIAL DATA

(dollars in thousands)

(unaudited)
 
  Three Months Ended   Six Months Ended
June 30, June 30,
  2015       2014     Change   2015       2014     Change
Operating Data:
Home sales $ 427,238 $ 309,609 $ 117,629 $ 801,503 $ 551,511 $ 249,992
Homebuilding gross margin $ 85,496 $ 66,900 $ 18,596 $ 159,855 $ 117,534 $ 42,321
Homebuilding gross margin % 20.0 % 21.6 % (1.6 )% 19.9 % 21.3 % (1.4 )%
Adjusted homebuilding gross margin %* 22.0 % 23.3 % (1.3 )% 21.9 % 23.0 % (1.1 )%
Land and lot gross margin $ 55,926 $ 2,747 $ 53,179 $ 55,617 $ 2,971 $ 52,646
Land and lot gross margin % 82.9 % 10.0 % 72.9 % 80.0 % 9.6 % 70.4 %
SG&A expense $ 53,933 $ 41,982 $ 11,951 $ 105,398 $ 80,892 $ 24,506
SG&A expense as a % of home sales 12.6 % 13.6 % (1.0 )% 13.2 % 14.7 % (1.5 )%
Net income available to common shareholders $ 54,930 $ 24,225 $ 30,705 $ 70,227 $ 31,806 $ 38,421
Adjusted EBITDA* $ 99,611 $ 66,175 $ 33,436 $ 133,944 $ 88,878 $ 45,066
Interest incurred $ 15,149 $ 6,551 $ 8,598 $ 30,325 $ 10,589 $ 19,736
Interest expense, net of interest capitalized $ $ 2,212 $ (2,212 ) $ $ 2,441 $ (2,441 )
Interest in cost of home sales $ 7,640 $ 5,340 $ 2,300 $ 14,351 $ 8,640 $ 5,711
 
Other Data:
Net new home orders 1,238 763 475 2,432 1,430 1,002
New homes delivered 798 628 170 1,466 1,136 330
Average selling price of homes delivered $ 535 $ 493 $ 42 $ 547 $ 485 $ 62
Average selling communities (QTD) 119.5 97.5 22.0 N/A N/A N/A
Average selling communities (YTD) N/A N/A N/A 116.1 94.0 22.1
Selling communities at end of period 122 100 22 N/A N/A N/A
Cancellation rate 16 % 16 % 0 % 14 % 15 % (1 )%
Backlog (estimated dollar value) $ 1,199,847 $ 670,225 $ 529,622
Backlog (homes) 1,998 1,191 807
Average selling price in backlog $ 601 $ 563 $ 38
 
June 30, December 31,
  2015     2014   Change
Balance Sheet Data:
Cash and cash equivalents $ 121,907 $ 170,629 $ (48,722 )
Real estate inventories $ 2,535,753 $ 2,280,183 $ 255,570
Lots owned and controlled 28,921 29,718 (797 )
Homes under construction (1) 2,804 1,887 917
Debt $ 1,300,049 $ 1,162,179 $ 137,870
Stockholder equity $ 1,528,771 $ 1,454,180 $ 74,591
Book capitalization $ 2,828,820 $ 2,616,359 $ 212,461
Ratio of debt-to-capital 46.0 % 44.4 % 1.6 %
Ratio of net debt-to-capital* 43.5 % 40.5 % 3.0 %
(1)   Homes under construction includes completed homes
* See "Reconciliation of Non-GAAP Financial Measures"
 
CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)
 
  June 30,     December 31,
2015 2014
Assets
Cash and cash equivalents $ 121,907 $ 170,629
Receivables 34,189 20,118
Real estate inventories 2,535,753 2,280,183
Investments in unconsolidated entities 17,325 16,805
Goodwill and other intangible assets, net 162,296 162,563
Deferred tax assets 148,367 157,821
Other assets   87,350   105,405
Total assets $ 3,107,187 $ 2,913,524
 
Liabilities
Accounts payable $ 51,009 $ 68,860
Accrued expenses and other liabilities 205,422 210,009
Unsecured revolving credit facility 399,392 260,000
Seller financed loans 12,390 14,677
Senior notes   888,267   887,502
Total liabilities   1,556,480   1,441,048
Commitments and contingencies
 
Equity
Stockholders' Equity:

Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively

Common stock, $0.01 par value, 500,000,000 shares authorized; 161,737,684 and 161,355,490 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
1,617 1,614
Additional paid-in capital 910,520 906,159
Retained earnings   616,634   546,407
Total stockholders' equity 1,528,771 1,454,180
Noncontrolling interests   21,936   18,296
Total equity   1,550,707   1,472,476
Total liabilities and equity $ 3,107,187 $ 2,913,524
 
CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2015       2014     2015       2014  
Revenues:
Home sales $ 427,238 $ 309,609 $ 801,503 $ 551,511
Land and lot sales 67,490 27,512 69,490 30,899
Other operations   789     5,442     1,782     8,285  
Total revenues   495,517     342,563     872,775     590,695  
 
Expenses:
Cost of home sales 341,742 242,709 641,648 433,977
Cost of land and lot sales 11,564 24,765 13,873 27,928
Other operations 592 567 1,154 2,199
Sales and marketing 25,634 23,798 48,920 44,703
General and administrative 28,299 18,184 56,478 36,189
Restructuring charges   498     520     720     2,178  
Total expenses   408,329     310,543     762,793     547,174  
Income from operations 87,188 32,020 109,982 43,521
Equity in (loss) of unconsolidated entities (155 ) (69 ) (81 ) (137 )
Transaction expenses (448 ) (506 )
Other income (loss), net   (31 )   (1,476 )   225     (741 )
Income before income taxes 87,002 30,027 110,126 42,137
Provision for income taxes   (30,240 )   (5,802 )   (38,067 )   (10,331 )
Net income 56,762 24,225 72,059 31,806
Less: net income attributable to noncontrolling interests   (1,832 )       (1,832 )    
Net income available to common shareholders $ 54,930   $ 24,225   $ 70,227   $ 31,806  
 
Earnings per share
Basic $ 0.34 $ 0.19 $ 0.43 $ 0.25
Diluted $ 0.34 $ 0.19 $ 0.43 $ 0.25
Weighted average shares outstanding
Basic 161,686,570 129,700,000 161,589,310 129,700,000
Diluted 162,308,099 129,700,000 162,265,155 129,700,000
 
MARKET DATA

(dollars in thousands)

(unaudited)
 
  Three Months Ended June 30,   Six Months Ended June 30,
2015   2014 2015   2014
Homes   Avg. Selling Homes   Avg. Selling Homes   Avg. Selling Homes   Avg. Selling
Delivered Price Delivered Price Delivered Price Delivered Price
New Homes Delivered:
Maracay 91 $ 369 93 $ 377 176 $ 375 192 $ 366
Pardee 242 456 246 483 410 478 381 489
Quadrant 87 410 67 376 180 439 145 388
Trendmaker 123 526 139 487 231 523 269 480
TRI Pointe 174 750 313 759
Winchester 81   649 83   756 156   656 149   735
Total 798 $ 535 628 $ 493 1,466 $ 547 1,136 $ 485
 
 
 
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
New Average New Average New Average New Average
Home Selling Home Selling Home Selling Home Selling
Orders Communities Orders Communities Orders Communities Orders Communities
Net New Home Orders:
Maracay 184 18.0 120 17.0 345 17.4 225 16.0
Pardee 355 23.5 284 20.0 663 22.0 529 19.7
Quadrant 116 10.8 106 14.0 266 10.4 204 13.3
Trendmaker 124 26.5 166 24.5 256 26.4 309 23.1
TRI Pointe 365 26.5 701 26.3
Winchester 94   14.3 87   22.0 201   13.6 163   21.9
Total 1,238   119.5 763   97.5 2,432   116.1 1,430   94.0
 
MARKET DATA Continued

(dollars in thousands)

(unaudited)
 
  June 30, 2015   June 30, 2014
  Backlog   Average   Backlog   Average
Backlog Dollar Selling Backlog Dollar Selling
Units Value Price Units Value Price
Backlog:
Maracay 274 $ 106,347 $ 388 149 $ 61,255 $ 411
Pardee 471 296,298 629 428 238,276 557
Quadrant 199 87,233 438 155 77,671 501
Trendmaker 243 128,645 529 262 136,115 520
TRI Pointe 631 449,080 712
Winchester 180   132,244   735 197   156,908   796
Total 1,998 $ 1,199,847 $ 601 1,191 $ 670,225 $ 563
 
June 30, December 31,
2015 2014
Lots Owned and Controlled:
Maracay 1,812 1,985
Pardee 17,195 17,639
Quadrant 1,416 1,544
Trendmaker 2,111 2,073
TRI Pointe 3,655 3,726
Winchester   2,732   2,751
Total   28,921   29,718
 
Lots by Ownership Type:
Lots owned 25,543 25,535
Lots controlled (1)   3,378   4,183
Total   28,921   29,718

(1)
  As of June 30, 2015 and December 31, 2014, lots controlled included lots that were under land option contracts or purchase contracts.
 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(unaudited)
 

In this earnings 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 table reconciles 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 June 30,
  2015     %     2014     %
(dollars in thousands)
Home sales $ 427,238 100.0% $ 309,609 100.0%
Cost of home sales   341,742   80.0%   242,709   78.4%
Homebuilding gross margin 85,496 20.0% 66,900 21.6%
Add: interest in cost of home sales 7,640 1.8% 5,340 1.7%
Add: impairments and lot option abandonments   882   0.2%   (22 ) 0.0%

Adjusted homebuilding gross margin
$ 94,018   22.0% $ 72,218   23.3%
Homebuilding gross margin percentage   20.0 %   21.6 %

Adjusted homebuilding gross margin percentage
  22.0 %   23.3 %
 
Six Months Ended June 30,
  2015   %   2014   %
(dollars in thousands)
Home sales $ 801,503 100.0% $ 551,511 100.0%
Cost of home sales   641,648   80.1%   433,977   78.7%
Homebuilding gross margin 159,855 19.9% 117,534 21.3%
Add: interest in cost of home sales 14,351 1.8% 8,640 1.6%
Add: impairments and lot option abandonments   1,227   0.2%   407   0.1%

Adjusted homebuilding gross margin
$ 175,433   21.9% $ 126,581   23.0%
Homebuilding gross margin percentage   19.9 %   21.3 %

Adjusted homebuilding gross margin percentage
  21.9 %   23.0 %
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)

(unaudited)
 

The following table reconciles the Company's ratio of debt-to-capital to the ratio of net debt-to-capital. We believe that the ratio of net debt-to-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.
 
  June 30,   December 31,
  2015     2014  
(dollars in thousands)
Unsecured revolving credit facility $ 399,392 $ 260,000
Seller financed loans 12,390 14,677
Senior Notes   888,267     887,502  
Total debt 1,300,049 1,162,179
Stockholders' equity   1,528,771     1,454,180  
Total capital $ 2,828,820   $ 2,616,359  
Ratio of debt-to-capital (1)   46.0 %   44.4 %
 
Total debt $ 1,300,049 $ 1,162,179
Less: Cash and cash equivalents   (121,907 )   (170,629 )
Net debt 1,178,142 991,550
Stockholders' equity   1,528,771     1,454,180  
Total capital $ 2,706,913   $ 2,445,730  
Ratio of net debt-to-capital (2)   43.5 %   40.5 %
(1)   The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.
(2) The ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital.
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)

(unaudited)
 

The following table calculates the non-GAAP measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income (loss), as reported and prepared in accordance with GAAP. EBITDA means net income (loss) before (a) interest expense, (b) income taxes, (c) depreciation and amortization, (d) expensing of previously capitalized interest included in costs of home sales and (e) amortization of stock-based compensation. Adjusted EBITDA means EBITDA before (f) restructuring expenses and (g) impairment 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   Six Months Ended
June 30, June 30,
  2015       2014     2015       2014  
(in thousands)
Net income available to common shareholders $ 54,930 $ 24,225 $ 70,227 $ 31,806
Interest expense:
Interest incurred 15,149 6,551 30,325 10,589
Interest capitalized (15,149 ) (4,339 ) (30,325 ) (8,148 )
Amortization of interest in cost of sales 7,915 28,553 14,680 32,616
Provision for income taxes 30,240 5,802 38,067 10,331
Depreciation and amortization 1,689 3,349 3,170 6,231
Amortization of stock-based compensation   3,161     1,410     5,542     2,703  
EBITDA 97,935 65,551 131,686 86,128
Restructuring charges 498 520 720 2,178
Impairments and lot abandonments   1,178     104     1,538     572  
Adjusted EBITDA $ 99,611   $ 66,175   $ 133,944   $ 88,878  
 
SUPPLEMENTAL COMBINED COMPANY INFORMATION

(unaudited)
 

The merger with Weyerhaeuser Real Estate Company ("WRECO") was accounted for as a "reverse acquisition" of TRI Pointe by WRECO in accordance with ASC Topic 805, "Business Combinations." As a result, legacy TRI Pointe's financial results are not included in the combined company's GAAP results for any period prior to July 7, 2014, the closing date of the merger. This schedule provides certain supplemental financial and operations information of the combined company that is "Adjusted" to include legacy TRI Pointe stand-alone operations. No other adjustments have been made to the supplemental combined company information provided and this information is summary only and may not necessarily be indicative of the results had the merger occurred at the beginning of the periods presented or the financial condition to be expected for the remainder of the year or any future date or period.
 

The following schedule provides certain supplemental financial and operations information of the combined company that is "Adjusted" to include legacy TRI Pointe stand-alone operations for the three month period ending June 30, 2014 as though the WRECO merger was completed on January 1, 2014.
 
  Three Months Ended
June 30, 2015   June 30, 2014
Combined   Legacy   Combined Combined   Legacy   Combined
Reported Adjustments Adjusted Reported Adjustments Adjusted
Supplemental Operating Data: (dollars in thousands)
Home sales revenue $ 427,238 NA $ 427,238 $ 309,609 $ 87,336 $ 396,945
Net new home orders 1,238 NA 1,238 763 190 953
New homes delivered 798 NA 798 628 103 731
Average selling price of homes delivered $ 535 NA $ 535 $ 493 $ 848 $ 543
Average selling communities 119.5 NA 119.5 97.5 12.3 109.8
Selling communities at end of period 122 NA 122 100 14 114
Cancellation rate 16 % NA 16 % 16 % 9 % 14 %
Backlog (estimated dollar value) $ 1,199,847 NA $ 1,199,847 $ 670,225 $ 231,726 $ 901,951
Backlog (homes) 1,998 NA 1,998 1,191 282 1,473
Average selling price in backlog $ 601 NA

$

601
$ 563 $ 822 $ 612
 
SUPPLEMENTAL COMBINED COMPANY INFORMATION (continued)

(unaudited)
 

The following schedule provides certain supplemental financial and operations information of the combined company that is "Adjusted" to include legacy TRI Pointe stand-alone operations for the six month period ending June 30, 2014 as though the WRECO merger was completed on January 1, 2014.
 
  Six Months Ended
June 30, 2015   June 30, 2014
Combined   Legacy   Combined Combined   Legacy   Combined
Reported Adjustments Adjusted Reported Adjustments Adjusted
Supplemental Operating Data: (dollars in thousands)
Home sales revenue $ 801,503 NA $ 801,503 $ 551,511 $ 160,148 $ 711,659
Net new home orders 2,432 NA 2,432 1,430 328 1,758
New homes delivered 1,466 NA 1,466 1,136 195 1,331
Average selling price of homes delivered $ 547 NA $ 547 $ 485 $ 821 $ 535
Average selling communities 116.1 NA 116.1 94.0 11.3 94.0
Selling communities at end of period 122 NA 122 100 14 114
Cancellation rate 14 % NA 14 % 15 % 9 % 14 %

View source version on businesswire.com: http://www.businesswire.com/news/home/20150810005227/en/

Copyright Business Wire 2010