Standard Pacific Corp. Reports 2013 Full Year and Fourth Quarter Results

2013 pretax income of $257.7 million, up 230% from 2012

Fourth most profitable year in Company's nearly 50-year history

News provided by

Standard Pacific Corp.

Feb 05, 2014, 04:03 ET

IRVINE, Calif., Feb. 5, 2014 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the year and fourth quarter ended December 31, 2013.

2013 Highlights and Comparisons to 2012

  • Net income of $188.7 million, or $0.47 per diluted share, vs. net income of $531.4 million, or $1.44 per diluted share (2012 diluted earnings per share of $0.21*, excluding $454 million deferred tax asset valuation allowance reversal)
  • Pretax income of $257.7 million, up 230%
  • Net new orders of 4,898, up 22%
  • Backlog of 1,700 homes, up 21%; Dollar value of backlog up 55%
  • 166 average active selling communities, up 7%
  • Home sale revenues of $1,899.0 million, up 60%
  • Average selling price of $413 thousand, up 14%
  • 4,602 new home deliveries, up 40%
  • Gross margin from home sales of 24.6%, compared to 20.5%
  • SG&A rate from home sales of 12.1%, compared to 14.5%
  • Operating margin from home sales of $236.5 million, or 12.5%, compared to $71.4 million, or 6.0%
  • $807.9 million of land purchases and development costs, compared to $719.6 million

2013 Fourth Quarter Highlights and Comparisons to the 2012 Fourth Quarter

  • Net income of $64.8 million, or $0.16 per diluted share, vs. $486.9 million, or $1.22 per diluted share ($0.08* per diluted share, excluding $454 million deferred tax asset valuation allowance reversal)
  • Pretax income of $101.0 million, up 205%
  • Net new orders of 878, down 11%; Dollar value of net new orders up 9%
  • 173 average active selling communities, up 15%
  • Home sale revenues of $598.5 million, up 58%
  • Average selling price of $446 thousand, up 15%
  • 1,343 new home deliveries, up 38%
  • Gross margin from home sales of 26.8%, compared to 20.8%
  • SG&A rate from home sales of 11.3%, a 180 basis point improvement
  • Operating margin from home sales of $92.6 million, or 15.5%, compared to $29.1 million, or 7.7%
  • $216.0 million of land purchases and development costs, compared to $270.7 million

Scott Stowell, the Company's Chief Executive Officer commented, "I am pleased with our strong financial performance in 2013, the fourth most profitable year in Standard Pacific Homes' nearly 50-year history and our highest annual pretax earnings since 2005."  Mr. Stowell added, "The execution of our strategy continues to drive top line revenue and profitability and is reflected in our strong results."  

Revenues from home sales for the 2013 fourth quarter increased 58%, to $598.5 million, as compared to the prior year period, resulting primarily from a 38% increase in new home deliveries and a 15% increase in the Company's consolidated average home price to $446 thousand.  The increase in average home price was primarily attributable to general price increases within a majority of the Company's markets and a decrease in the use of sales incentives.  The increase in new home deliveries was driven by a 50% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter. 

Gross margin from home sales for the 2013 fourth quarter increased to 26.8% compared to 20.8% in the prior year period.  The 600 basis point year-over-year increase was primarily attributable to price increases and a decrease in the use of sales incentives.  Excluding previously capitalized interest costs, gross margin from home sales was 32.2%* for the 2013 fourth quarter versus 28.9%* for the 2012 fourth quarter.    

The Company's 2013 fourth quarter SG&A expenses (including Corporate G&A) were $67.9 million compared to $49.4 million, down 180 basis points as a percentage of home sale revenues to 11.3%, compared to 13.1% for the 2012 fourth quarter.  The improvement in the Company's SG&A rate was primarily due to a 58% increase in revenues from home sales and reflects the operating leverage inherent in our business.

Net new orders for the 2013 fourth quarter decreased 11% from the 2012 fourth quarter to 878 homes.  The year-over-year decrease is primarily attributable to a decrease in the Company's monthly sales absorption rate to 1.7 per community for the 2013 fourth quarter, compared to 2.2 per community in both the 2012 fourth quarter and the 2013 third quarter. The Company's cancellation rate for the 2013 fourth quarter was 21%, compared to 15% for the 2012 fourth quarter and 20% for the 2013 third quarter.  Our 2013 fourth quarter cancellation rate increased from the historically low levels we experienced in the prior year period, but was consistent with our average historical cancellation rate over the last 10 years.  As a percentage of beginning backlog our cancellation rate was 7.9% in the quarter, a 20 basis point increase from the same period last year.    

The dollar value of homes in backlog increased 55% to $800.5 million, or 1,700 homes, compared to $515.5 million, or 1,404 homes, as of the end of fiscal year 2012, and was down 17% compared to $964.1 million, or 2,165 homes, as of the end of the 2013 third quarter.  The increase in year-over-year backlog value was driven primarily by a 28% increase in the average selling price of the homes in backlog, reflecting the continued execution of our strategy to focus on the move-up buyer, the shift to more to-be-built homes that have a longer construction cycle, and pricing opportunities in select markets.

Cash used in operating activities was $27.8 million for the 2013 fourth quarter versus $112.0 million in the 2012 fourth quarter.  During the 2013 fourth quarter, the Company spent $216.0 million on land purchases and development costs, compared to $270.7 million for the 2012 fourth quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 fourth quarter were $185.7 million* versus $158.8 million* in the 2012 fourth quarter.  The year-over-year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 58% increase in home sale revenues. 

The Company purchased $116.9 million of land (2,231 homesites) during the 2013 fourth quarter, of which 38% (based on homesites) was located in Florida, 22% in the Carolinas, 20% in Texas and 16% in California, with the balance spread throughout the Company's other operations.  As of December 31, 2013, the Company owned or controlled 35,175 homesites, of which 22,790 are owned and actively selling or under development, 7,442 are controlled or under option, and the remaining 4,943 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.0 year supply based on the Company's deliveries for the year ended December 31, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 full year and fourth quarter results will be held at 12:00 p.m. Eastern time February 6, 2014.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://ir.standardpacifichomes.com.  The call will also be accessible via telephone by dialing (877) 638-9069 (domestic) or (647) 438-1132 (international); Passcode: 2285500.  The audio transmission with the slide presentation will be available on our website for replay within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 2285500.

About Standard Pacific

Standard Pacific Homes (NYSE: SPF) has been building beautiful, high-quality homes and neighborhoods since its founding in Southern California in 1965.  With a trusted reputation for quality craftsmanship, an outstanding customer experience and exceptional architectural design, the Company utilizes its decades of land acquisition, development and homebuilding expertise to successfully navigate today's complex landscape to acquire and build desirable communities in locations that meet the high expectations of the Company's targeted move-up homebuyers.  Currently offering new homes in major metropolitan areas in Arizona, California, Colorado, Florida, North Carolina, South Carolina, and Texas, we invite you to learn more about us by visiting standardpacifichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, absorption rates, average home price, pricing power, revenue, profitability, cash flow, liquidity, gross margin, overhead expenses and other costs; community count; product mix; the benefit of, and execution on, our strategy; supply; demand; our future performance and the future condition of the economy and the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2012 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless 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.

Contact:
Jeff McCall, EVP & CFO (949) 789-1655, [email protected]

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

(Note: Tables Follow)

KEY STATISTICS AND FINANCIAL DATA1




As of or For the Three Months Ended

December 31,

December 31,

Percentage

September 30,

Percentage

2013

2012

or % Change

2013

or % Change

Operating Data

(Dollars in thousands)













Deliveries

1,343

973

38%

1,217

10%

Average selling price

$

446

$

388

15%

$

420

6%

Home sale revenues

$

598,496

$

377,674

58%

$

511,059

17%

Gross margin % (including land sales)

26.8%

18.7%

8.1%

25.3%

1.5%

Gross margin % from home sales

26.8%

20.8%

6.0%

25.3%

1.5%

Gross margin % from home sales (excluding interest amortized

     to cost of home sales)*












32.2%

28.9%

3.3%

31.2%

1.0%

Incentive and stock-based compensation expense

$

9,442

$

7,013

35%

$

8,023

18%

Selling expenses

$

28,114

$

19,362

45%

$

24,301

16%

G&A expenses (excluding incentive and stock-based 

     compensation expenses)











$

30,304

$

23,067

31%

$

29,615

2%

SG&A expenses

$

67,860

$

49,442

37%

$

61,939

10%

SG&A % from home sales

11.3%

13.1%

(1.8%)

12.1%

(0.8%)

Operating margin from home sales

$

92,648

$

29,127

218%

$

67,426

37%

Operating margin % from home sales

15.5%

7.7%

7.8%

13.2%

2.3%

Net new orders (homes)

878

983

(11%)

1,110

(21%)

Net new orders (dollar value)

$

418,828

$

385,461

9%

$

510,668

(18%)

Average active selling communities

173

150

15%

168

3%

Monthly sales absorption rate per community

1.7

2.2

(23%)

2.2

(23%)

Cancellation rate

21%

15%

6%

20%

1%

Gross cancellations

234

178

31%

272

(14%)

Cancellations from current quarter sales

64

71

(10%)

124

(48%)

Backlog (homes)

1,700

1,404

21%

2,165

(21%)

Backlog (dollar value)

$

800,494

$

515,469

55%

$

964,148

(17%)













Cash flows (uses) from operating activities

$

(27,820)

$

(111,980)

75%

$

22,808

Cash flows (uses) from investing activities

$

(14,707)

$

(1,610)

(813%)

$

(2,296)

(541%)

Cash flows (uses) from financing activities

$

42,690

$

(19,311)


$

261,980

(84%)

Land purchases (incl. seller financing and JV purchases)

$

116,856

$

204,796

(43%)

$

69,196

69%

Adjusted Homebuilding EBITDA*

$

135,469

$

68,802

97%

$

101,953

33%

Adjusted Homebuilding EBITDA Margin %*

22.3%

16.4%

5.9%

19.9%

2.4%

Homebuilding interest incurred

$

37,546

$

35,095

7%

$

34,766

8%

Homebuilding interest capitalized to inventories owned

$

36,889

$

33,664

10%

$

34,118

8%

Homebuilding interest capitalized to investments in JVs

$

657

$

851

(23%)

$

648

1%

Interest amortized to cost of sales (incl. cost of land sales)

$

32,909

$

33,784

(3%)

$

30,322

9%

For the Year Ended

December 31,

December 31,

Percentage

2013

2012

or % Change

Operating Data

(Dollars in thousands)








Deliveries

4,602

3,291

40%

Average selling price

$

413

$

362

14%

Home sale revenues

$

1,898,989

$

1,190,252

60%

Gross margin % (including land sales)

24.5%

19.7%

4.8%

Gross margin % from home sales

24.6%

20.5%

4.1%

Gross margin % from home sales (excluding interest amortized 
     to cost of home sales)*







31.0%

28.9%

2.1%

Incentive and stock-based compensation expense

$

28,240

$

20,362

39%

Selling expenses

$

93,005

$

65,608

42%

G&A expenses (excluding incentive and stock-based 

     compensation expenses)






$

109,446

$

86,237

27%

SG&A expenses

$

230,691

$

172,207

34%

SG&A % from home sales

12.1%

14.5%

(2.4%)

Operating margin from home sales

$

236,501

$

71,415

231%

Operating margin % from home sales

12.5%

6.0%

6.5%

Net new orders (homes)

4,898

4,014

22%

Net new orders (dollar value)

$

2,126,355

$

1,445,962

47%

Average active selling communities

166

155

7%

Monthly sales absorption rate per community

2.5

2.2

14%

Cancellation rate

15%

13%

2%

Gross cancellations

852

621

37%

Cancellations from current year sales

361

289

25%








Cash flows (uses) from operating activities

$

(154,216)

$

(283,116)

46%

Cash flows (uses) from investing activities

$

(143,857)

$

(105,205)

(37%)

Cash flows (uses) from financing activities

$

314,809

$

324,354

(3%)

Land purchases (incl. seller financing and JV purchases)

$

493,583

$

542,106

(9%)

Adjusted Homebuilding EBITDA*

$

383,621

$

193,903

98%

Adjusted Homebuilding EBITDA Margin %*

20.0%

15.7%

4.3%

Homebuilding interest incurred

$

140,865

$

141,827

(1%)

Homebuilding interest capitalized to inventories owned

$

137,990

$

129,136

7%

Homebuilding interest capitalized to investments in JVs

$

2,875

$

6,295

(54%)

Interest amortized to cost of sales (incl. cost of land sales)

$

121,778

$

103,902

17%

As of 

December 31,

December 31,

Percentage

2013

2012

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)








Homebuilding cash (including restricted cash)

$

376,949

$

366,808

3%

Inventories owned

$

2,536,102

$

1,971,418

29%

Homesites owned and controlled

35,175

30,767

14%

Homes under construction

2,001

1,574

27%

Completed specs

327

215

52%

Deferred tax asset valuation allowance

$

4,591

$

22,696

(80%)

Homebuilding debt

$

1,839,595

$

1,542,018

19%

Stockholders' equity

$

1,468,960

$

1,255,816

17%

Stockholders' equity per share (including if-converted 

     preferred stock)*

 

$

 

4.02

 

$

 

3.48

 

16%

Total consolidated debt to book capitalization

56.9%

56.5%

0.4%

Adjusted net homebuilding debt to total adjusted 

     book capitalization*







49.9%

48.3%

1.6%








1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.
*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release. 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS











Three Months Ended
December 31,

Year Ended
December 31,




2013

2012

2013

2012




(Dollars in thousands, except per share amounts)




(Unaudited)

Homebuilding:











Home sale revenues

$

598,496

$

377,674

$

1,898,989

$

1,190,252

Land sale revenues

7,955

42,169

15,620

46,706


Total revenues

606,451

419,843

1,914,609

1,236,958

Cost of home sales

(437,988)

(299,105)

(1,431,797)

(946,630)

Cost of land sales

(5,945)

(42,196)

(13,616)

(46,654)


Total cost of sales

(443,933)

(341,301)

(1,445,413)

(993,284)



Gross margin

162,518

78,542

469,196

243,674



Gross margin %

26.8%

18.7%

24.5%

19.7%

Selling, general and administrative expenses

(67,860)

(49,442)

(230,691)

(172,207)

Income (loss) from unconsolidated joint ventures

(300)

617

949

(2,090)

Interest expense

  ―    

(580)

  ―    

(6,396)

Other income (expense)

4,191

(44)

6,815

4,664



Homebuilding pretax income 

98,549

29,093

246,269

67,645

Financial Services:











Revenues

5,983

7,051

24,910

21,300

Expenses

(3,765)

(3,110)

(14,159)

(11,062)

Other income

258

87

678

304



Financial services pretax income

2,476

4,028

11,429

10,542

Income before taxes

101,025

33,121

257,698

78,187

(Provision) benefit for income taxes

(36,205)

453,804

(68,983)

453,234

Net income 

64,820

486,925

188,715

531,421

  Less: Net income allocated to preferred shareholder

(15,570)

(199,646)

(57,386)

(224,408)

  Less: Net income allocated to unvested restricted stock

(99)

(489)

(265)

(410)

Net income available to common stockholders

$

49,151

$

286,790

$

131,064

$

306,603















Income Per Common Share:











Basic

$

0.18

$

1.35

$

0.52

$

1.52

Diluted

$

0.16

$

1.22

$

0.47

$

1.44















Weighted Average Common Shares Outstanding:











Basic

277,212,473

212,332,054

253,118,247

201,953,799

Diluted

315,284,731

250,562,775

291,173,953

220,518,897















Weighted average additional common shares outstanding if preferred shares converted to common shares

 

87,812,786

147,812,786

 

110,826,557

147,812,786















Total weighted average diluted common shares outstanding if preferred shares converted to common shares

403,097,517

398,375,561

402,000,510

368,331,683

CONDENSED CONSOLIDATED BALANCE SHEETS















December 31,

December 31,






2013

2012






(Dollars in thousands)

ASSETS

(Unaudited)


Homebuilding:





Cash and equivalents

$

355,489

$

339,908

Restricted cash

21,460

26,900

Trade and other receivables

14,431

10,724

Inventories:








Owned


2,536,102

1,971,418


Not owned

98,341

71,295

Investments in unconsolidated joint ventures

66,054

52,443

Deferred income taxes, net

375,400

455,372

Other assets


45,977

41,918



Total Homebuilding Assets

3,513,254

2,969,978

Financial Services:





Cash and equivalents

7,802

6,647

Restricted cash

1,295

2,420

Mortgage loans held for sale, net

122,031

119,549

Mortgage loans held for investment, net

12,220

9,923

Other assets


5,503

4,557



Total Financial Services Assets

148,851

143,096




Total Assets

$

3,662,105

$

3,113,074











LIABILITIES AND EQUITY




Homebuilding:





Accounts payable

$

35,771

$

22,446

Accrued liabilities

214,266

198,144

Secured project debt and other notes payable

6,351

11,516

Senior notes payable

1,833,244

1,530,502



Total Homebuilding Liabilities

2,089,632

1,762,608

Financial Services:





Accounts payable and other liabilities

2,646

2,491

Mortgage credit facilities

100,867

92,159



Total Financial Services Liabilities

103,513

94,650




Total Liabilities

2,193,145

1,857,258

Equity:





Stockholders' Equity:






Preferred stock, $0.01 par value; 10,000,000 shares    






    authorized; 267,829 and 450,829 shares issued and outstanding






    at December 31, 2013 and 2012, respectively

3

5


Common stock, $0.01 par value; 600,000,000 shares 






    authorized; 277,618,177 and 213,245,488 shares 






    issued and outstanding at December 31, 2013 and






    2012, respectively

2,776

2,132


Additional paid-in capital

1,354,814

1,333,255


Accumulated earnings (deficit)

111,367

(77,348)


Accumulated other comprehensive loss, net of tax

  ―    

(2,228)



Total Equity

1,468,960

1,255,816




Total Liabilities and Equity

$

3,662,105

$

3,113,074

INVENTORIES







December 31,

December 31,


2013

2012


(Dollars in thousands)

Inventories Owned:

(Unaudited)






     Land and land under development

$     1,771,661

$     1,444,161

     Homes completed and under construction

628,371

427,196

     Model homes

136,070

100,061

        Total inventories owned

$     2,536,102

$     1,971,418





Inventories Owned by Segment:








     California

$     1,182,520

$     1,086,159

     Southwest

603,303

461,201

     Southeast

750,279

424,058

        Total inventories owned

$     2,536,102

$     1,971,418

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS













Three Months Ended
December 31,

Year Ended
December 31,





2013

2012

2013

2012





(Dollars in thousands)





(Unaudited)

Cash Flows From Operating Activities:











Net income

$

64,820

$

486,925

$

188,715

$

531,421

Adjustments to reconcile net income to net cash 












provided by (used in) operating activities:













Amortization of stock-based compensation

2,359

2,633

9,015

7,151



Deposit write-offs

 ―   

 ―   

 ―   

133



Deferred income taxes

35,725

(454,000)

84,214

(454,000)



Other operating activities

1,427

2,679

6,019

8,517



Changes in cash and equivalents due to:














Trade and other receivables

5,218

12,944

(3,244)

801




Mortgage loans held for sale

(46,722)

(32,323)

(2,543)

(46,339)




Inventories - owned

(100,937)

(129,807)

(415,312)

(315,639)




Inventories - not owned

(11,619)

(20,861)

(43,319)

(31,551)




Other assets

564

1,696

965

2,618




Accounts payable

6,470

5,988

13,325

4,617




Accrued liabilities

14,875

12,146

7,949

9,155


Net cash provided by (used in) operating activities

(27,820)

(111,980)

(154,216)

(283,116)
















Cash Flows From Investing Activities:











Investments in unconsolidated homebuilding joint ventures

(11,386)

(4,380)

(24,328)

(57,458)

Distributions of capital from unconsolidated joint ventures

2,444

2,590

4,763

14,530

Net cash paid for acquisitions

(2,469)

 ―   

(116,262)

(60,752)

Other investing activities

(3,296)

180

(8,030)

(1,525)


Net cash provided by (used in) investing activities

(14,707)

(1,610)

(143,857)

(105,205)
















Cash Flows From Financing Activities:











Change in restricted cash

6,564

(1,687)

6,565

3,347

Principal payments on secured project debt and other notes payable

(1,045)

(84)

(8,334)

(866)

Principal payments on senior subordinated notes payable

 ―   

(39,613)

 ―   

(49,603)

Proceeds from the issuance of senior notes payable

 ―   

 ―   

300,000

253,000

Payment of debt issuance costs

(1,271)

(3,680)

(5,316)

(11,761)

Net proceeds from (payments on) mortgage credit facilities

36,687

21,124

8,708

45,351

Proceeds from the issuance of common stock

 ―   

 ―   

 ―   

75,849

Payment of common stock issuance costs

 ―   

(88)

 ―   

(4,002)

Payment of issuance costs in connection with preferred 












shareholder equity transactions

 ―   

 ―   

(350)

 ―   

Proceeds from the exercise of stock options

1,755

4,717

13,536

13,039


Net cash provided by (used in) financing activities

42,690

(19,311)

314,809

324,354
















Net increase (decrease) in cash and equivalents

163

(132,901)

16,736

(63,967)

Cash and equivalents at beginning of period

363,128

479,456

346,555

410,522

Cash and equivalents at end of period

$

363,291

$

346,555

$

363,291

$

346,555
















Cash and equivalents at end of period

$

363,291

$

346,555

$

363,291

$

346,555

Homebuilding restricted cash at end of period

21,460

26,900

21,460

26,900

Financial services restricted cash at end of period

1,295

2,420

1,295

2,420

Cash and equivalents and restricted cash at end of period

$

386,046

$

375,875

$

386,046

$

375,875

REGIONAL OPERATING DATA















Three Months Ended
December 31, 

Year Ended
December 31, 






2013

2012

% Change

2013

2012

% Change

New homes delivered:













California

476

400

19%

1,762

1,304

35%

Arizona

87

71

23%

258

247

4%

Texas

211

104

103%

669

472

42%

Colorado

51

34

50%

168

114

47%

Nevada

       ―   

       ―   

      ―  

      ―  

9

(100%)

Florida

320

170

88%

1,027

581

77%

Carolinas

198

194

2%

718

564

27%



Consolidated total

1,343

973

38%

4,602

3,291

40%

Unconsolidated joint ventures

2

10

(80%)

25

38

(34%)



Total (including joint ventures)

1,345

983

37%

4,627

3,329

39%













Three Months Ended
December 31, 

Year Ended
December 31, 





2013

2012

% Change

2013

2012

% Change





(Dollars in thousands)

Average selling prices of homes delivered:
















California

$

628

$

543

16%

$

565

$

506

12%

Arizona

318

231

38%

280

213

31%

Texas

423

354

19%

393

318

24%

Colorado

476

392

21%

450

388

16%

Nevada

      ―  

      ―  

      ―  

      ―  

192

      ―  

Florida

300

253

19%

279

247

13%

Carolinas

315

263

20%

289

247

17%



Consolidated

446

388

15%

413

362

14%

Unconsolidated joint ventures

581

446

30%

511

444

15%



Total (including joint ventures)

$

446

$

389

15%

$

413

$

363

14%













Three Months Ended
December 31,

Year Ended
December 31,





2013

2012

% Change

2013

2012

% Change

Net new orders:












California

337

401

(16%)

1,718

1,570

9%

Arizona

38

30

27%

286

267

7%

Texas

143

103

39%

755

527

43%

Colorado

45

43

5%

201

156

29%

Nevada

        ―  

        ―  

        ―  

        ―  

6

(100%)

Florida

155

217

(29%)

1,165

785

48%

Carolinas

160

189

(15%)

773

703

10%



Consolidated total

878

983

(11%)

4,898

4,014

22%

Unconsolidated joint ventures

1

5

(80%)

13

47

(72%)



Total (including joint ventures)

879

988

(11%)

4,911

4,061

21%





















Three Months Ended
December 31,

Year Ended
December 31,





2013

2012

% Change

2013

2012

% Change

Average number of selling communities 











  during the period:












California

49

45

9%

47

49

(4%)

Arizona

10

6

67%

9

7

29%

Texas

33

24

38%

31

21

48%

Colorado

9

8

13%

8

7

14%

Florida

40

33

21%

40

36

11%

Carolinas

32

34

(6%)

31

35

(11%)



Consolidated total

173

150

15%

166

155

7%

Unconsolidated joint ventures

         ―  

1

(100%)

         ―  

2

(100%)



Total (including joint ventures)

173

151

15%

166

157

6%





At December 31,





2013

2012

% Change





Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value





(Dollars in thousands)

Backlog:


















California

396

$

262,097

440

$

218,115

(10%)

20%

Arizona

105

35,846

77

19,178

36%

87%

Texas

290

134,583

204

78,468

42%

72%

Colorado

108

54,946

75

32,230

44%

70%

Florida

504

215,312

366

95,264

38%

126%

Carolinas

297

97,710

242

72,214

23%

35%



Consolidated total

1,700

800,494

1,404

515,469

21%

55%

Unconsolidated joint ventures

           ―    

           ―    

12

5,575

(100%)

(100%)



Total (including joint ventures)

1,700

$

800,494

1,416

$

521,044

20%

54%





At December 31,





2013

2012

% Change

Homesites owned and controlled:






California

9,638

10,288

(6%)

Arizona

2,351

1,965

20%

Texas

4,607

5,129

(10%)

Colorado

1,307

792

65%

Nevada

1,124

1,124

          ―   

Florida

11,461

8,159

40%

Carolinas

4,687

3,310

42%


Total (including joint ventures)

35,175

30,767

14%











Homesites owned

27,733

25,475

9%

Homesites optioned or subject to contract 

7,047

4,681

51%

Joint venture homesites

395

611

(35%)


Total (including joint ventures)

35,175

30,767

14%




















Homesites owned:






Raw lots

6,211

5,522

12%

Homesites under development

9,340

9,357

(0%)

Finished homesites

7,024

5,178

36%

Under construction or completed homes

2,804

2,194

28%

Held for sale

2,354

3,224

(27%)


Total

27,733

25,475

9%

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently.  Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's net income to net income excluding the partial reversal of the deferred tax asset valuation allowance during the 2012 fourth quarter.  We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding the benefit from the valuation allowance reversal and provides comparability with the Company's peer group.  Net income and diluted earnings per share excluding the reversal of the deferred tax asset valuation allowance for the three months and year ended December 31, 2012 is calculated as follows:

Three Months Ended

Year Ended

December 31, 2012

December 31, 2012

(Dollars in thousands, except per share amounts)






Net income

$

486,925

$

531,421

Less: Deferred tax asset valuation allowance reversal

(454,000)

(454,000)

Adjusted net income

$

32,925

$

77,421






Diluted earnings per share

$

0.08

$

0.21

Total weighted average diluted common shares outstanding




   if preferred shares converted to common

398,375,561

368,331,683

The table set forth below reconciles the Company's gross margin percentage from home sales to the gross margin percentage from home sales, excluding interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.

Three Months Ended

December 31,
2013

Gross
Margin %

December 31,
2012

Gross
Margin %

September 30,
2013

Gross
Margin %

(Dollars in thousands)















Home sale revenues

$

598,496


$

377,674


$

511,059

Less: Cost of home sales

(437,988)



(299,105)



(381,694)

Gross margin from home sales

160,508

26.8%

78,569

20.8%

129,365

25.3%

Add: Capitalized interest included in cost 













  of home sales

32,378

5.4%

30,592

8.1%

30,303

5.9%

Gross margin from home sales, excluding 













  interest amortized to cost of home sales

$

192,886

32.2%

$

109,161

28.9%

$

159,668

31.2%

Year Ended December 31,

2013

Gross
Margin %

2012

Gross
Margin %

(Dollars in thousands)










Home sale revenues

$

1,898,989


$

1,190,252

Less: Cost of home sales

(1,431,797)



(946,630)

Gross margin from home sales

467,192

24.6%

243,622

20.5%

Add: Capitalized interest included in cost 








  of home sales

120,714

6.4%

100,683

8.4%

Gross margin from home sales, excluding 








  interest amortized to cost of home sales

$

587,906

31.0%

$

344,305

28.9%

The table set forth below reconciles the Company's cash flows provided by (used in) operations to cash inflows from operations excluding land purchases and development costs.  We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases and development costs.

Three Months Ended

Year Ended December 31,

December 31,
2013

December 31,
2012

September 30,
2013

2013

2012

(Dollars in thousands)















Cash flows provided by (used in) operations

$

(27,820)

$

(111,980)

$

22,808

$

(154,216)

$

(283,116)

Add: Cash land purchases included in operating activities

114,386

204,796

69,196

377,303

436,729

Add: Land development costs

99,133

65,948

87,115

314,267

177,452

Cash inflows from operations (excluding land purchases













   and development costs)

$

185,699

$

158,764

$

179,119

$

537,354

$

331,065

The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios.  We believe that the adjusted net homebuilding debt to total adjusted book capitalization ratio is useful to management and investors as a measure of the Company's ability to obtain financing.  For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity.  Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents.

At December 31,



2013

2012



(Dollars in thousands)








Total consolidated debt

$

1,940,462

$

1,634,177

Less:





Financial services indebtedness

(100,867)

(92,159)

Homebuilding cash

(376,949)

(366,808)

Adjusted net homebuilding debt

1,462,646

1,175,210

Stockholders' equity

1,468,960

1,255,816

Total adjusted book capitalization

$

2,931,606

$

2,431,026








Total consolidated debt to book capitalization

56.9%

56.5%








Adjusted net homebuilding debt to total adjusted book capitalization

49.9%

48.3%

The table set forth below calculates pro forma stockholders' equity per common share.  The Company believes that the pro forma stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.

December 31,

December 31,

2013

2012






Actual common shares outstanding

277,618,177

213,245,488

Add: Conversion of preferred shares to common shares

87,812,786

147,812,786

Pro forma common shares outstanding

365,430,963

361,058,274






Stockholders' equity (Dollars in thousands)

$

1,468,960

$

1,255,816

Divided by pro forma common shares outstanding

÷

365,430,963

÷

361,058,274

Pro forma stockholders' equity per common share

$

4.02

$

3.48

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing.  Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.

Three Months Ended

Year Ended December 31,



December 31,
2013

December 31,
2012

September 30,
2013

2013

2012



(Dollars in thousands)

















Net income 

$

64,820

$

486,925

$

58,935

$

188,715

$

531,421

Provision (benefit) for income taxes

36,205

(453,804)

11,201

68,983

(453,234)

Homebuilding interest amortized to cost of sales and interest expense

32,909

34,364

30,322

121,778

110,298

Homebuilding depreciation and amortization

1,094

617

1,031

3,455

2,372

Amortization of stock-based compensation

2,359

2,633

2,681

9,015

7,151

EBITDA

137,387

70,735

104,170

391,946

198,008

Add:














Cash distributions of income from unconsolidated joint ventures

       ―  

2,625

       ―  

3,375

3,910

Deposit write-offs

       ―  

       ―  

       ―  

       ―  

133

Less:














Income (loss) from unconsolidated joint ventures

(300)

617

(32)

949

(2,090)

Income from financial services subsidiary

2,218

3,941

2,249

10,751

10,238

Adjusted Homebuilding EBITDA

$

135,469

$

68,802

$

101,953

$

383,621

$

193,903

















Homebuilding revenues

$

606,451

$

419,843

$

511,756

$

1,914,609

$

1,236,958

















Adjusted Homebuilding EBITDA Margin %

22.3%

16.4%

19.9%

20.0%

15.7%

The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:


Three Months Ended

Year Ended December 31,




December 31,
2013

December 31,
2012

September 30,
2013

2013

2012




(Dollars in thousands)


















Net cash provided by (used in) operating activities

$

(27,820)

$

(111,980)

$

22,808

$

(154,216)

$

(283,116)

Add:














Provision (benefit) for income taxes

480

(453,804)

(16,105)

(15,231)

(453,234)

Deferred income tax benefit

        ―   

454,000

        ―   

        ―   

454,000

Homebuilding interest amortized to cost of sales and interest expense

32,909

34,364

30,322

121,778

110,298

Less:














Income from financial services subsidiary

2,218

3,941

2,249

10,751

10,238

Depreciation and amortization from financial services subsidiary

32

32

33

121

108

Loss on disposal of property and equipment

1

22

        ―   

17

37

Net changes in operating assets and liabilities:















Trade and other receivables

(5,218)

(12,944)

(11,186)

3,244

(801)


Mortgage loans held for sale

46,722

32,323

(32,221)

2,543

46,339


Inventories-owned

100,937

129,807

84,352

415,312

315,639


Inventories-not owned

11,619

20,861

21,990

43,319

31,551


Other assets

(564)

(1,696)

(1,655)

(965)

(2,618)


Accounts payable 

(6,470)

(5,988)

(7,235)

(13,325)

(4,617)


Accrued liabilities

(14,875)

(12,146)

13,165

(7,949)

(9,155)

Adjusted Homebuilding EBITDA

$

135,469

$

68,802

$

101,953

$

383,621

$

193,903

SOURCE Standard Pacific Corp.

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