Market Overview

The New Home Company Reports 2017 First Quarter Results

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The New Home Company Inc. (NYSE:NWHM) today announced results for the
2017 first quarter.

First Quarter 2017 Highlights Compared to First Quarter 2016

  • Net income of $0.8 million, or $0.04 per diluted share vs. a net loss
    of $0.8 million, or $(0.04) per diluted share
  • Total revenues of $125.0 million vs. $85.2 million, a 47% increase
  • Home sales revenue of $69.4 million, a 64% increase
  • Net new home orders up 125%
  • Backlog dollar value up 34% to $313.9 million, a record quarter-end
    value
  • Wholly owned community count up 40% to 14 vs. 10

"I am extremely pleased with our first quarter results," said The New
Home Company's Chief Executive Officer Larry Webb. "Both revenues and
profits came in ahead of our projections, resulting in earnings per
diluted share of $0.04 for the quarter. Orders for our wholly owned
business increased 125% on a year-over-year basis thanks to strong
contributions from both our Northern and Southern California operations.
The demand we saw in the first quarter is further evidence that
California continues to be one of the strongest housing markets in the
country. The state's track record of creating good paying jobs and its
ongoing lack of available supply have created a significant need for new
housing in a number of markets."

Mr. Webb continued, "The value of our backlog at the end of the quarter
was $314 million, up 34% from last year, and represented the highest
quarter-end backlog total in our company's history. The company also
improved its financial position and liquidity through the issuance of
$250 million senior unsecured notes due 2022."

Mr. Webb concluded, "The strong start to the year positions us well
towards achieving our full year financial goals. As we broaden our
product portfolio to include more affordable price points, The New Home
Company is in a solid position to take advantage of industry demand
trends for the benefit of our homebuyers and shareholders alike."

First Quarter 2017 Operating Results

Total revenues for the 2017 first quarter were $125.0 million, compared
to $85.2 million in the prior year period. Net income attributable to
the Company was $0.8 million, or $0.04 per diluted share, compared to a
net loss of $0.8 million, or $(0.04) per diluted share, in the prior
year period. The year-over-year increase in net income was primarily
attributable to a 47% increase in total revenues, a 20 basis point
improvement in home sales gross margin, and a 600 basis point
improvement in selling, general and administrative ("SG&A") expenses as
a percentage of home sales revenue, due to stronger operating leverage
from growth in our wholly owned operations. These improvements were
partially offset by a 170 basis point reduction in fee building gross
margin percentage.

Wholly Owned Projects

Home sales revenue for the 2017 first quarter increased 64% to $69.4
million, compared to $42.3 million in the prior year period. The
increase in home sales revenue was driven primarily by a 93% increase in
deliveries, which was partially offset by a 15% decrease in the average
selling price of homes delivered to $1.3 million. The decrease in our
average selling price was primarily due to a mix shift, including an
increase in the number of deliveries from lower-priced Southern
California communities.

Gross margin from homes sales was 13.5% versus 13.3% in the prior year
period. The increase in home sales gross margin as compared to the prior
year was primarily due to a change in mix, including the favorable
impact of higher margins from communities located in Newport Coast, CA.
Adjusted gross margin from home sales for the 2017 first quarter, which
excludes interest in cost of home sales was 15.7%* compared to 14.8%*.

Our SG&A expense ratio as a percentage of home sales revenue was 14.5%
versus 20.5% in the prior year period. The 600 basis point improvement
in the SG&A rate was largely attributable to a 64% increase in home
sales revenue, which was driven by a significant increase in new home
deliveries due to growth in our wholly owned operations, and leverage of
our G&A expenses.

Net new home orders were up 125% to 126 homes, compared to 56 homes in
the prior year period. The Company's monthly sales absorption pace was
up significantly to 2.8 sales per average selling community compared to
1.8 in the prior year period. Selling communities were up 40% over the
prior year, ending the 2017 first quarter with 14 communities compared
to 10 as of the end of the prior year period.

The dollar value of the Company's wholly owned backlog at the end of the
2017 first quarter was up 34% year-over-year to $313.9 million and
totaled 151 homes, compared to $234.0 million and 104 homes in the prior
year period. The increase in backlog dollar value primarily related to
the increase in net new home orders.

Fee Building Projects

Fee building revenue for the 2017 first quarter increased 30% to $55.6
million primarily due to an increase in fee building construction
activity. Fee building gross margin was $1.7 million, or 3.0%, compared
to $2.0 million, or 4.7%, in the prior year period. The reduction in fee
building gross margin percentage was largely due to a decrease in
management fees received from joint ventures, which were $1.2 million
during the 2017 first quarter compared to $2.2 million in the prior year
period. The decrease in management fees from JVs was primarily the
result of fewer deliveries and lower revenues from JV communities, which
is consistent with the Company's strategic shift to emphasize wholly
owned operations.

Unconsolidated Joint Ventures (JVs)

The Company's share of joint venture income for the 2017 first quarter
was $0.3 million, compared to a $7,000 loss in the prior year period.
The following sets forth supplemental information about the Company's
JVs. Such information is not included in the Company's financial data
for GAAP purposes but is provided for informational purposes.

Total revenue of the JVs was $26.6 million and net loss was $(0.9)
million, compared to $42.0 million and $2.1 million in income in the
prior year period, respectively. Home sales revenue of the JVs was $25.1
million, compared to $38.2 million in the prior year period.

At the end of the 2017 first quarter, the JVs had nine active selling
communities, up from six at the end of the prior year period. Net new
home orders from JVs for the 2017 first quarter decreased 15% to 39
homes as compared to 46 homes in the prior year period. The dollar value
of homes in backlog from unconsolidated JVs at the end of the 2017 first
quarter was $64.0 million from 69 homes, compared to $94.7 million from
101 homes in the prior year period.

Balance Sheet and Liquidity

On March 17, 2017, the Company completed the sale of $250 million in
aggregate principal amount of 7.25% Senior Notes due 2022. Proceeds from
the notes were used to repay the outstanding balance under the Company's
revolving credit facility, with the balance to be used for general
corporate purposes. As of March 31, 2017, the Company had real estate
inventories totaling $322.0 million, of which $192.4 million represented
work-in-process and completed homes (including models), $87.1 million in
land and land under development, and $42.5 million in land deposits and
pre-acquisition costs. The Company owned or controlled 1,670 lots
through its wholly owned operations (excluding fee building and joint
venture lots), of which 1,036 lots, or 62%, were controlled or under
option. The Company ended the 2017 first quarter with $110.1 million in
cash and cash equivalents and had no borrowings outstanding under its
$260.0 million revolving credit facility. The Company ended the 2017
first quarter with $241.7 million in debt outstanding (net of
unamortized discount and debt issuance costs), a debt-to-capital ratio
of 49.6% and a net debt-to-capital ratio of 34.9%*.

Guidance

The Company maintained its full year guidance for 2017 as follows:

  • Home sales revenue of $530 - $570 million
  • Fee building revenue of $130 - $150 million
  • Income from unconsolidated joint ventures of $4 - $6 million
  • Wholly owned active year-end community count of 18
  • Joint venture active year-end community count of 8

Conference Call Details

The Company will host a conference call and webcast for investors and
other interested parties beginning at 11:00 a.m. Eastern Time on
Thursday, April 27, 2017, to review first quarter results, discuss
recent events and results, and discuss the Company's full year and
certain quarterly guidance for 2017. We will also conduct a
question-and-answer period. The conference call will be available in the
Investors section of the Company's website at www.NWHM.com.
To listen to the broadcast live, go to the site approximately 15 minutes
prior to the scheduled start time in order to register, download and
install any necessary audio software. To participate in the telephone
conference call, dial 1-877-407-0789 (domestic) or 1-201-689-8562
(international) at least five minutes prior to the start time. Replays
of the conference call will be available through May 28, 2017, and can
be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671
(international) and entering the pass code 13658651.

About The New Home Company

NWHM is a new generation homebuilder focused on the design, construction
and sale of innovative and consumer-driven homes in major metropolitan
areas within select growth markets in California and Arizona, including
coastal Southern California, the San Francisco Bay area, metro
Sacramento and the greater Phoenix area. The Company is headquartered in
Aliso Viejo, California. For more information about the Company and its
new home developments, please visit the Company's website at www.NWHM.com.

* Adjusted homebuilding gross margin percentage and net debt-to-capital
ratio are non-GAAP measures. A reconciliation of the appropriate GAAP
measure to each of these measures is included in the accompanying
financial data. See "Reconciliation of Non-GAAP Financial Measures."

Forward-Looking Statements

Various statements contained in this press release, including those that
express a belief, anticipation, 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,
community counts and openings and our future production, our ability to
execute our strategic growth objectives, gross margins, revenues,
projected results, income, earnings per share 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," "guidance," or other
words that convey the uncertainty of future events or outcomes. The
forward-looking statements in this press release speak only as of the
date of this release, and we disclaim any obligation to update these
statements unless required by law, and we caution you not to rely on
them unduly. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they 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: economic changes either
nationally or in the markets in which we operate, including declines in
employment, volatility of mortgage interest rates and inflation; a
downturn in the homebuilding industry; changes in sales conditions,
including home prices, in the markets where we build homes, volatility
and uncertainty in the credit markets and broader financial markets; our
business and investment strategy; availability of land to acquire and
our ability to acquire such land on favorable terms or at all; our
liquidity and availability, terms and deployment of capital; shortages
of or increased prices for labor, land or raw materials used in housing
construction; delays in land development or home construction resulting
from adverse weather conditions or other events outside our control;
issues concerning our joint venture partnerships; the cost and
availability of insurance and surety bonds; changes in, or the failure
or inability to comply with, governmental laws and regulations; the
timing of receipt of regulatory approvals and the opening of projects;
the degree and nature of competition; our leverage and debt service
obligations; the impact of recent accounting standards; restrictive
covenants relating to our operations in our current of future financing
arrangements; availability of qualified personnel and our ability to
retain our key personnel; and additional factors discussed under the
sections captioned "Risk Factors" included in our annual report and
other reports filed with the Securities and Exchange Commission. The
Company reserves the right to make such updates from time to time by
press release, periodic report or other method of public disclosure
without the need for specific reference to this press release. No such
update shall be deemed to indicate that other statements not addressed
by such update remain correct or create an obligation to provide any
other updates.

               

THE NEW HOME COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
Three Months Ended March 31,
2017           2016
(Dollars in thousands, except per share amounts)
Revenues:
Home sales $ 69,406 $ 42,303
Fee building, including management fees from unconsolidated joint
ventures of $1,214 and $2,175, respectively
55,617   42,937  
125,023   85,240  
Cost of Sales:
Home sales 60,065 36,670
Fee building 53,926   40,914  
113,991 77,584
Gross Margin:
Home sales 9,341 5,633
Fee building 1,691   2,023  
11,032 7,656
 
Selling and marketing expenses (5,001 ) (3,476 )
General and administrative expenses (5,090 ) (5,175 )
Equity in net income (loss) of unconsolidated joint ventures 306 (7 )
Other income (expense), net 113   (109 )
Income (loss) before income taxes 1,360 (1,111 )
(Provision) benefit for income taxes (524 ) 242  
Net income (loss) 836 (869 )
Net loss attributable to noncontrolling interest 10   55  
Net income (loss) attributable to The New Home Company Inc. $ 846   $ (814 )
 
Earnings (loss) per share attributable to The New Home Company Inc.:
Basic $ 0.04 $ (0.04 )
Diluted $ 0.04 $ (0.04 )
Weighted average shares outstanding:
Basic 20,767,464 20,599,014
Diluted 20,899,263 20,599,014
 
 
                       

THE NEW HOME COMPANY

CONSOLIDATED BALANCE SHEETS

 
March 31, December 31,
2017 2016
(Dollars in thousands, except per share amounts)
(Unaudited)
Assets
Cash and cash equivalents $ 110,113 $ 30,496
Restricted cash 209 585
Contracts and accounts receivable 25,682 27,833
Due from affiliates 456 1,138
Real estate inventories 321,994 286,928
Investment in and advances to unconsolidated joint ventures 54,204 50,857
Other assets 25,107   21,299
Total assets $ 537,765   $ 419,136
 
Liabilities and equity
Accounts payable $ 38,082 $ 33,094
Accrued expenses and other liabilities 12,439 23,418
Unsecured revolving credit facility 118,000
Senior notes, net 241,738  
Total liabilities 292,259   174,512
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no
shares outstanding
Common stock, $0.01 par value, 500,000,000 shares authorized,
20,863,399 and 20,712,166, shares issued and outstanding as of March
31, 2017 and December 31, 2016, respectively
209 207
Additional paid-in capital 197,205 197,161
Retained earnings 48,001   47,155
Total stockholders' equity 245,415 244,523
Noncontrolling interest in subsidiary 91   101
Total equity 245,506   244,624
Total liabilities and equity $ 537,765   $ 419,136
 
 
             

THE NEW HOME COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
Three Months Ended
March 31,
2017           2016
(Dollars in thousands)
Operating activities:
Net income (loss) $ 836 $ (869 )
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Deferred taxes (54 ) (27 )
Amortization of equity based compensation 611 985
Excess income tax provision from stock-based compensation 97
Distributions of earnings from unconsolidated joint ventures 1,588
Equity in net (income) loss of unconsolidated joint ventures (306 ) 7
Deferred profit from unconsolidated joint ventures 148 312
Depreciation 123 125
Abandoned project costs 34 149
Net changes in operating assets and liabilities:
Restricted cash 376 138
Contracts and accounts receivable 2,151 5,875
Due from affiliates 799 53
Real estate inventories (36,077 ) (98,712 )
Other assets (3,669 ) (3,616 )
Accounts payable 4,988 5,470
Accrued expenses and other liabilities (10,979 ) (10,723 )
Due to affiliates   (30 )
Net cash used in operating activities (39,431 ) (100,766 )
Investing activities:
Purchases of property and equipment (50 ) (174 )
Contributions and advances to unconsolidated joint ventures (3,796 ) (4,327 )
Distributions of capital from unconsolidated joint ventures 24   3,531  
Net cash used in investing activities (3,822 ) (970 )
Financing activities:
Borrowings from credit facility 72,000 115,000
Repayments of credit facility (190,000 )
Proceeds from senior notes 247,402
Borrowings from other notes payable 339
Repayments of other notes payable (14,822 )
Payment of debt issuance costs (5,967 )
Minimum tax withholding paid on behalf of employees for stock awards (565 ) (630 )
Excess income tax provision from stock-based compensation   (97 )
Net cash provided by financing activities 122,870   99,790  
Net increase (decrease) in cash and cash equivalents 79,617 (1,946 )
Cash and cash equivalents – beginning of period 30,496   45,874  
Cash and cash equivalents – end of period $ 110,113   $ 43,928  
 
 

THE NEW HOME COMPANY
KEY FINANCIAL AND OPERATING DATA
(Dollars
in thousands)
(Unaudited)

New Home Deliveries:
      Three Months Ended March 31,
2017       2016       % Change
Homes    

Dollar

Value

   

Average

Price

Homes    

Dollar

Value

   

Average

Price

Homes    

Dollar

Value

   

Average

Price

Southern California 22 $ 43,923 $ 1,997 11 $ 29,308 $ 2,664 100 % 50 % (25 )%
Northern California 32   25,483   796 17   12,995   764 88 % 96 % 4 %
Total 54   $ 69,406   $ 1,285 28   $ 42,303   $ 1,511 93 % 64 % (15 )%
 
Net New Home Orders:
          Three Months Ended March 31,
2017           2016           % Change
Southern California 56 27 107 %
Northern California 70 29   141 %
126 56   125 %
 
Active Communities:
As of March 31,
2017 2016 % Change
Southern California 7 5 40 %
Northern California 7   5   40 %
14   10   40 %
 
Backlog:
      As of March 31,
2017       2016       % Change
Homes    

Dollar

Value

   

Average

Price

Homes    

Dollar

Value

   

Average

Price

Homes    

Dollar

Value

   

Average

Price

Southern California 82 $ 267,141 $ 3,258 70 $ 200,848 $ 2,869 17 % 33 % 14 %
Northern California 69   46,792   678 34   33,112   974 103 % 41 % (30 )%
Total 151   $ 313,933   $ 2,079 104   $ 233,960   $ 2,250 45 % 34 % (8 )%
 
Lots Owned and Controlled:
                March 31,
2017           2016           % Change
Lots Owned
Southern California 354 202 75 %
Northern California 280   272   3 %
Total 634   474   34 %

Lots Controlled(1)

Southern California 635 635 %
Northern California 253 379 (33 )%
Arizona 148     NA
Total 1,036   1,014   2 %
Lots Owned and Controlled - Wholly Owned 1,670 1,488 12 %

Fee Building(2)

817   1,227   (33 )%
Total Lots Owned and Controlled 2,487   2,715   (8 )%
 
(1)     Includes lots that we control under purchase and sale agreements or
option agreements subject to customary conditions and have not yet
closed. There can be no assurance that such acquisitions will occur.
(2) Lots owned by third party property owners for which we perform
construction services.
 
Other Financial Data:
              Three Months Ended
March 31,
2017           2016
Interest incurred $ 2,036 $ 1,281
Adjusted EBITDA(1) $ 4,961 $ 803
Adjusted EBITDA margin percentage 4.0 % 0.9 %
 
LTM(2) Ended March 31,
2017 2016
Interest incurred $ 8,239 $ 5,125
Adjusted EBITDA(1) $ 47,302 $ 37,907
Adjusted EBITDA margin percentage 6.4 % 9.2 %
Ratio of Adjusted EBITDA to total interest incurred 5.7x 7.4x
 
(1)     Adjusted EBITDA, Adjusted EBITDA margin percentage, and ratio of
Adjusted EBITDA to total interest incurred are non-GAAP measures.
Please see "Reconciliation of Non-GAAP Financial Measures" for a
reconciliation of each of these measures to the appropriate GAAP
measure.
(2) "LTM" indicates amounts for the trailing 12 months.
 
 
             

THE NEW HOME COMPANY

KEY FINANCIAL AND OPERATING DATA - UNCONSOLIDATED JOINT VENTURES

(Dollars in thousands)

(Unaudited)

 
Three Months Ended March 31,
2017           2016          

%

Change

Financial Data - Unconsolidated Joint Ventures:
Home sales revenue $ 25,146 $ 38,201 (34 )%
Land sales revenue 1,474   3,756   (61 )%
Total revenue $ 26,620   $ 41,957   (37 )%
Net income (loss) $ (864 ) $ 2,141   (140 )%
 
Operating Data - Unconsolidated Joint Ventures:
New home orders 39 46 (15 )%
New homes delivered 32 45 (29 )%
Average selling price of homes delivered $ 786 $ 849 (7 )%
 
Selling communities at end of period 9 6 50 %
Backlog homes (dollar value) $ 63,982 $ 94,707 (32 )%
Backlog (homes) 69 101 (32 )%
Average sales price of backlog $ 927 $ 938 (1 )%
 
Homebuilding lots owned and controlled 553 667 (17 )%
Land development lots owned and controlled 2,415   2,575   (6 )%
Total lots owned and controlled 2,968   3,242   (8 )%
 
 

THE NEW HOME COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES

(Unaudited)

In this earnings release, we utilize certain 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 leverage has on
homebuilding gross margin and provides investors better comparisons with
our competitors, who adjust gross margins in a similar fashion.

      Three Months Ended March 31,
2017       %       2016       %
(Dollars in thousands)
 
Home sales revenue $ 69,406 100.0 % $ 42,303 100.0 %
Cost of home sales 60,065   86.5 % 36,670   86.7 %
Homebuilding gross margin 9,341 13.5 % 5,633 13.3 %
Add: Interest in cost of home sales 1,551   2.2 % 648   1.5 %
Adjusted homebuilding gross margin $ 10,892   15.7 % $ 6,281   14.8 %
 
 

Adjusted EBITDA, Adjusted EBITDA margin percentage and the ratio of
Adjusted EBITDA to total interest incurred are non-GAAP measures.
Adjusted EBITDA means net income (loss) (plus cash distributions of
income from unconsolidated joint ventures) before (a) income taxes, (b)
interest expense, (c) amortization of previously capitalized interest
included in cost of sales or other expense, (d) non-cash impairment
charges and abandoned project costs, (e) gain (loss) on extinguishment
of debt, (f) depreciation and amortization, (g) amortization of
equity-based compensation and (h) income (loss) from unconsolidated
joint ventures. Adjusted EBITDA margin percentage is calculated by
dividing Adjusted EBITDA by total revenue for a given period. The ratio
of Adjusted EBITDA to total interest incurred is calculated by dividing
Adjusted EBITDA by total interest incurred for a given period. Other
companies may calculate Adjusted EBITDA differently. Management believes
that Adjusted EBITDA assists investors in understanding and comparing
the operating characteristics of homebuilding activities by eliminating
many of the differences in companies' respective capitalization,
interest costs, tax position and level of impairments. Due to the
significance of the GAAP components excluded, Adjusted EBITDA should not
be considered in isolation or as an alternative to net income, cash
flows from operations or any other performance measure prescribed by
GAAP. A reconciliation of net income (loss) attributable to us to
Adjusted EBITDA, Adjusted EBITDA margin percentage and the ratio of
Adjusted EBITDA to total interest incurred is provided in the following
table.

      Three Months Ended       LTM(1) Ended
March 31, March 31,
2017       2016 2017       2016
(Dollars in thousands)
 
Net income (loss) $ 836 $ (869 ) $ 22,631 $ 15,964
Add:
Interest amortized to cost of sales and other expense 1,551 648 6,234 2,885
Provision (benefit) for income taxes 524 (242 ) 13,790 9,406
Depreciation and amortization 123 125 509 485
Amortization of equity-based compensation 611 985 3,097 4,615
Cash distributions of income from unconsolidated joint ventures 1,588 5,330 15,775
Non-cash impairments and abandonments 34 149 3,965 669
Less:
Gain from notes payable principal reduction (250 )
(Income) loss from unconsolidated joint ventures (306 ) 7   (8,004 ) (11,892 )
Adjusted EBITDA $ 4,961   $ 803   $ 47,302   $ 37,907  
Total Revenue $ 125,023   $ 85,240   $ 734,239   $ 412,474  
Adjusted EBITDA margin percentage 4.0 % 0.9 % 6.4 % 9.2 %
Interest incurred $ 2,036   $ 1,281   $ 8,239   $ 5,125  
Ratio of Adjusted EBITDA to total interest incurred 5.7x 7.4x
 
(1)     "LTM" indicates amounts for the trailing 12 months.
 
 

The following table reconciles the Company's ratio of debt-to-capital to
the non-GAAP 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.

            March 31,           December 31,
2017 2016
(Dollars in thousands)
 
Total debt, net $ 241,738 $ 118,000
Equity, exclusive of noncontrolling interest 245,415   244,523  
Total capital $ 487,153   $ 362,523  
Ratio of debt-to-capital(1) 49.6 % 32.5 %
 
Total debt, net $ 241,738 $ 118,000
Less: cash, cash equivalents and restricted cash 110,322   31,081  
Net debt 131,416 86,919
Equity, exclusive of noncontrolling interest 245,415   244,523  
Total capital $ 376,831   $ 331,442  
Ratio of net debt-to-capital(2) 34.9 % 26.2 %
 
(1)     The ratio of debt-to-capital is computed as the quotient obtained by
dividing total debt, net by the sum of total debt plus equity,
exclusive of noncontrolling interest.
(2) The ratio of net debt-to-capital is computed as the quotient
obtained by dividing net debt (which is total debt, net less cash to
the extent necessary to reduce the debt balance to zero) by total
capital, exclusive of noncontrolling interest. The most directly
comparable GAAP financial measure is the ratio of debt-to-capital.
We believe the ratio of net debt-to-capital is a relevant financial
measure for investors to understand the leverage employed in our
operations and as an indicator of our ability to obtain financing.
We believe that by deducting our cash from our notes payable, we
provide a measure of our indebtedness that takes into account our
cash liquidity. We believe this provides useful information as the
ratio of debt-to-capital does not take into account our liquidity
and we believe that the ratio net of cash provides supplemental
information by which our financial position may be considered.
Investors may also find this to be helpful when comparing our
leverage to the leverage of our competitors that present similar
information. See the table above reconciling this non-GAAP financial
measure to the ratio of debt-to-capital.
 

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