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Press release from PR Newswire

Standard Pacific Corp. Reports 2012 Third Quarter Results

Thursday, October 25, 2012

Standard Pacific Corp. Reports 2012 Third Quarter Results16:02 EDT Thursday, October 25, 2012Q3 2012 Net Income of $21.7 million, or $0.05 per diluted share Q3 2012 Net New Orders up 29% and Backlog up 64% vs. Q3 2011IRVINE, Calif., Oct. 25, 2012 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2012.2012 Third Quarter Highlights and Comparisons to the 2011 Third Quarter:Net income of $21.7 million, or $0.05 per diluted share, vs. net loss of $6.4 million, or $0.02 per diluted share Net new orders of 989, up 29% Backlog of 1,394 homes, up 64% 156 average active selling communities, down 2% Homebuilding revenues up 32% Average selling price of $369 thousand, up 7% 861 new home deliveries, up 24% Gross margin from home sales of 20.2%, compared to 15.8% (18.8%* excluding impairment charges) SG&A rate from home sales of 13.6%, a 260 basis point improvement $246.2 million of land purchases and development costs compared to $106.4 million Adjusted Homebuilding EBITDA of $51.5 million*, or 16.2%* of homebuilding revenues, compared to $28.4 million*, or 11.7%* of homebuilding revenues Homebuilding cash balance of $500 million Amended undrawn revolving credit facility in October 2012 to increase capacity to $350 millionScott Stowell, the Company's Chief Executive Officer and President commented, "We are pleased that the positive momentum we experienced during the first half of 2012 continued into the third quarter.  We earned $21.7 million, with deliveries up 24%, orders up 29% and homebuilding revenues up 32% over the prior year period.  We are most pleased by the significant 64% year-over-year increase in the dollar value and number of homes in backlog to approximately $500 million, or 1,400 homes.  Our solid third quarter results reflect the execution of our strategy and improved housing market conditions during the quarter."Revenues from home sales for the 2012 third quarter increased 31%, to $317.4 million from $241.4 million, as compared to the prior year period, primarily due to a 24% increase in new home deliveries (excluding joint ventures) to 861 homes and a 7% increase in our consolidated average home price to $369 thousand.  The increase in new home deliveries was driven by a 62% increase in the number of homes in backlog at the beginning of the quarter as compared to the prior year period.  Gross margin from home sales for the 2012 third quarter increased to 20.2% compared to 15.8% (18.8%* excluding $7.2 million of inventory impairment charges) in the prior year period.  Excluding inventory impairment charges and previously capitalized interest costs, gross margin from home sales was 28.7%* for the 2012 third quarter versus 26.6%* for the 2011 third quarter.  This 210 basis point improvement was primarily attributable to a mix shift to more deliveries from higher margin communities, price increases in certain communities with higher sales absorption, and improved margins from speculative homes sold and delivered during the quarter.  The Company's 2012 third quarter SG&A expenses (including Corporate G&A) were $43.1 million compared to $39.1 million for the prior year period, down 260 basis points as a percentage of home sale revenues to 13.6%, compared to 16.2% for the 2011 third quarter.  The improvement in the Company's SG&A rate was primarily due to a 31% increase in revenues from home sales and the operating leverage inherent in our business. Net new orders (excluding joint ventures) for the 2012 third quarter increased 29% from the 2011 third quarter to 989 homes.  The 29% year-over-year growth is attributable to a 32% increase in the Company's monthly sales absorption rate, partially offset by a 2% decrease in the number of average active selling communities.    The Company's monthly sales absorption rate for the 2012 third quarter was 2.1 per community, compared to 1.6 per community for the 2011 third quarter and 2.4 per community for the 2012 second quarter.  The 10% decrease in absorption rate from the 2012 second quarter to the 2012 third quarter is slightly better than the historical seasonality for the Company.  The Company's cancellation rate for the 2012 third quarter was 14%, compared to 16% for the 2011 third quarter and 11% for the 2012 second quarter.    The dollar value of homes in backlog (excluding joint ventures) increased 64% to $498.7 million, or 1,394 homes, compared to $304.8 million, or 848 homes, for the 2011 third quarter, and increased 13% compared to $439.7 million, or 1,266 homes, for the 2012 second quarter.  The increase in year over year backlog value was driven primarily by a 29% increase in net new orders and a shift to more to-be-built homes.  The Company used $72.4 million of cash in operating activities for the 2012 third quarter versus $78.5 million in the 2011 third quarter.  During the 2012 third quarter, the Company spent $246.2 million on land purchases and development costs, of which $140.8 million of cash land purchases and development costs were included in cash flows used in operating activities, compared to $106.4 million for the 2011 third quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2012 third quarter were $68.4 million* versus $27.9 million* in the 2011 third quarter.  The year over year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 31% increase in home sale revenues.  The Company purchased $206.7 million of land (3,497 homesites) during the 2012 third quarter, of which 76% (based on homesites) was located in California and 11% in Texas, with the balance spread throughout the Company's other operations.  The Company purchased $337.3 million of land (6,259 homesites) during the nine months ended September 30, 2012, of which 47% (based on homesites) was located in California, 24% in the Carolinas, 13% in Texas and 13% in Florida, with the balance spread throughout the Company's other operations.  As of September 30, 2012, the Company owned or controlled 30,154 homesites, of which 17,718 are owned and actively selling or under development, 6,180 are controlled or under option, and the remaining 6,256 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.7 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2012.   Earnings Conference CallA conference call to discuss the Company's 2012 third quarter results will be held at 12:00 p.m. Eastern time October 26, 2012.  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 (888) 811-5448 (domestic) or (913) 905-3226 (international); Passcode: 8191394.  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: 8191394. About Standard PacificStandard Pacific, one of the nation's largest homebuilders, has built more than 115,000 homes during its 47-year history.  The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers.  Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas and Colorado.  For more information about the Company and its new home developments, please visit our website at: www.standardpacifichomes.com.This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, average home price, revenue, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; community count; product mix; execution on our strategy; 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, 2011 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, jmccall@stanpac.com*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.(Note: Tables Follow) KEY STATISTICS AND FINANCIAL DATA1As of or For the Three Months EndedSeptember 30,September 30,PercentageJune 30,Percentage20122011or % Change2012or % ChangeOperating Data(Dollars in thousands)Deliveries86169724%8156%Average selling price$369$3467%$3379%Home sale revenues$317,389$241,43431%$274,87215%Gross margin %20.1%15.8%4.3%20.5%(0.4%)Gross margin % from home sales (excluding impairments)*20.2%18.8%1.4%20.5%(0.3%)Gross margin % from home sales (excluding impairments and interest amortized to cost of home sales)*28.7%26.6%2.1%29.4%(0.7%)Inventory impairments and deposit write-offs$  ?  $8,959(100%)$  ?    ?  Restructuring charges$  ?  $631(100%)$  ?    ?  Incentive and stock-based compensation expense$4,768$4,3809%$4,6762%Selling expenses$17,069$12,98531%$16,3115%G&A expenses (excluding incentive and stock-based compensation expenses and restructuring charges)$21,284$21,1281%$20,9652%SG&A expenses$43,121$39,12410%$41,9523%SG&A % from home sales13.6%16.2%(2.6%)15.3%(1.7%)Net new orders98976429%1,108(11%)Average active selling communities156159(2%)157(1%)Monthly sales absorption rate per community2.11.632%2.4(10%)Cancellation rate14%16%(2%)11%3%Gross cancellations16114412%13817%Cancellations from current quarter sales67636%72(7%)Backlog (homes)1,39484864%1,26610%Backlog (dollar value)$498,739$304,84664%$439,69413%Cash flows (uses) from operating activities$(72,418)$(78,464)8%$(56,600)(28%)Cash flows (uses) from investing activities$(95,704)$4,254$(5,545)(1,626%)Cash flows (uses) from financing activities$348,696$21,8841,493%$(11,638)Land purchases (incl. seller financing and JV purchases) $206,740$74,736177%$96,584114%Adjusted Homebuilding EBITDA*$51,523$28,35082%$41,81023%Adjusted Homebuilding EBITDA Margin %*16.2%11.7%4.5%15.2%1.0%Homebuilding interest incurred$36,112$35,2732%$35,3052%Homebuilding interest capitalized to inventories owned$32,604$29,32911%$31,8762%Homebuilding interest capitalized to investments in JVs$1,839$1,6949%$1,8121%Interest amortized to cost of sales (incl. cost of land sales)$27,078$18,85344%$24,46511% As of September 30,June 30,PercentageDecember 31,Percentage20122012or % Change2011or % ChangeBalance Sheet Data(Dollars in thousands, except per share amounts)Homebuilding cash (including restricted cash)$499,572$317,24257%$438,15714%Inventories owned$1,829,996$1,605,13814%$1,477,23924%Homesites owned and controlled30,15427,7579%26,44414%Homes under construction1,5071,31714%94060%Completed specs212239(11%)383(45%)Deferred tax asset valuation allowance$488,490$499,701(2%)$510,621(4%)Homebuilding debt$1,581,076$1,319,68220%$1,324,94819%Stockholders' equity$760,017$656,62416%$623,75422%Stockholders' equity per share (including if-converted preferred stock)*$2.11$1.9110%$1.8216%Total consolidated debt to book capitalization68.5%67.5%1.0%68.7%(0.2%)Adjusted net homebuilding debt to total adjusted book capitalization*58.7%60.4%(1.7%)58.7%0.0%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 OPERATIONSThree Months EndedSeptember 30,Nine Months EndedSeptember 30,2012201120122011(Dollars in thousands, except per share amounts)(Unaudited)Homebuilding:Home sale revenues$317,389$241,434$812,578$589,369Land sale revenues1,1523594,537468Total revenues318,541241,793817,115589,837Cost of home sales(253,344)(203,188)(647,525)(486,933)Cost of land sales(1,092)(359)(4,458)(473)Total cost of sales(254,436)(203,547)(651,983)(487,406)Gross margin64,10538,246165,132102,431Gross margin %20.1%15.8%20.2%17.4%Selling, general and administrative expenses(43,121)(39,124)(122,765)(109,828)Loss from unconsolidated joint ventures(39)(455)(2,707)(1,091)Interest expense(1,669)(4,250)(5,816)(22,209)Other income (expense)117(1,948)4,708(679)Homebuilding pretax income (loss)19,393(7,531)38,552(31,376)Financial Services:Revenues5,2183,52914,2497,124Expenses(2,777)(2,324)(7,952)(7,171)Other income704221798Financial services pretax income2,5111,2476,51451Income (loss) before income taxes21,904(6,284)45,066(31,325)Provision for income taxes(194)(150)(570)(425)Net income (loss)21,710(6,434)44,496(31,750)  Less: Net (income) loss allocated to preferred shareholder(9,100)2,780(18,980)13,743  Less: Net (income) loss allocated to unvested restricted stock(22) ?   (31) ?   Net income (loss) available to common stockholders$12,588$(3,654)$25,485$(18,007)Income (Loss) Per Common Share:Basic$0.06$(0.02)$0.13$(0.09)Diluted$0.05$(0.02)$0.12$(0.09)Weighted Average Common Shares Outstanding:Basic204,485,294194,311,129198,469,130193,686,614Diluted235,273,648194,311,129210,441,932193,686,614Weighted average additional common shares outstandingif preferred shares converted to common shares147,812,786147,812,786147,812,786147,812,786Total weighted average diluted common shares outstandingif preferred shares converted to common shares383,086,434342,123,915358,254,718341,499,400 CONDENSED CONSOLIDATED BALANCE SHEETSSeptember 30,December 31,20122011(Dollars in thousands)ASSETS(Unaudited)Homebuilding:Cash and equivalents$473,859$406,785Restricted cash25,71331,372Trade and other receivables23,66811,525Inventories:Owned1,829,9961,477,239Not owned52,11259,840Investments in unconsolidated joint ventures52,63081,807Deferred income taxes, net2,3665,326Other assets40,83335,693Total Homebuilding Assets2,501,1772,109,587Financial Services:Cash and equivalents5,5973,737Restricted cash1,9201,295Mortgage loans held for sale, net88,13673,811Mortgage loans held for investment, net9,65210,115Other assets3,8711,838Total Financial Services Assets109,17690,796Total Assets$2,610,353$2,200,383LIABILITIES AND EQUITYHomebuilding:Accounts payable$16,458$17,829Accrued liabilities179,658185,890Secured project debt and other notes payable11,6003,531Senior notes payable1,529,8631,275,093Senior subordinated notes payable39,61346,324Total Homebuilding Liabilities1,777,1921,528,667Financial Services:Accounts payable and other liabilities2,1091,154Mortgage credit facilities71,03546,808Total Financial Services Liabilities73,14447,962Total Liabilities1,850,3361,576,629Equity:Stockholders' Equity:Preferred stock, $0.01 par value; 10,000,000 shares     authorized; 450,829 shares issued and outstanding    at September 30, 2012 and December 31, 201155Common stock, $0.01 par value; 600,000,000 shares     authorized; 215,576,688 and 198,563,273 shares     issued and outstanding at September 30, 2012 and     and December 31, 2011, respectively2,1561,985Additional paid-in capital1,325,9701,239,180Accumulated deficit(564,273)(608,769)Accumulated other comprehensive loss, net of tax(3,841)(8,647)Total Equity760,017623,754Total Liabilities and Equity$2,610,353$2,200,383 INVENTORIESSeptember 30,December 31,20122011(Dollars in thousands)Inventories Owned:(Unaudited)     Land and land under development$      1,301,857$      1,036,829     Homes completed and under construction416,759339,849     Model homes111,380100,561        Total inventories owned$      1,829,996$      1,477,239Inventories Owned by Segment:     California$      1,082,181$         890,300     Southwest378,954302,686     Southeast368,861284,253        Total inventories owned$      1,829,996$      1,477,239 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSThree Months EndedSeptember 30,Nine Months EndedSeptember 30,2012201120122011(Dollars in thousands)(Unaudited)Cash Flows From Operating Activities:Net income (loss)$21,710$(6,434)$44,496$(31,750)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Amortization of stock-based compensation1,5592,6354,5188,094Inventory impairment charges and deposit write-offs ?   8,95913314,918Other operating activities1,7981,3435,8383,901Changes in cash and equivalents due to:Trade and other receivables(4,681)(816)(12,143)(12,309)Mortgage loans held for sale(18,119)(14,967)(14,016)(19,737)Inventories - owned(70,645)(67,719)(185,832)(261,777)Inventories - not owned(7,191)(4,859)(10,690)(17,659)Other assets999(2,341)922(313)Accounts payable826,027(1,371)5,889Accrued liabilities2,070(292)(2,991)166Net cash provided by (used in) operating activities(72,418)(78,464)(171,136)(310,577)Cash Flows From Investing Activities:Investments in unconsolidated homebuilding joint ventures(44,797)(2,484)(53,078)(11,304)Distributions of capital from unconsolidated joint ventures10,1457,73711,9407,786Net cash paid for acquisitions(60,752) ?   (60,752) ?   Other investing activities(300)(999)(1,705)(1,752)Net cash provided by (used in) investing activities(95,704)4,254(103,595)(5,270)Cash Flows From Financing Activities:Change in restricted cash(1,203)3,7575,034(1,819)Principal payments on secured project debt and other notes payable(138)(316)(782)(839)Principal payments on senior subordinated notes payable ?    ?   (9,990) ?   Proceeds from the issuance of senior notes payable253,000 ?   253,000 ?   Payment of debt issuance costs(8,081) ?   (8,081)(4,575)Net proceeds from (payments on) mortgage credit facilities26,60817,65524,22722,184Proceeds from the issuance of common stock75,849 ?   75,849 ?   Payment of common stock issuance costs(3,913) ?   (3,913) ?   Proceeds from the exercise of stock options6,5747888,321874Net cash provided by (used in) financing activities348,69621,884343,66515,825Net increase (decrease) in cash and equivalents180,574(52,326)68,934(300,022)Cash and equivalents at beginning of period298,882483,675410,522731,371Cash and equivalents at end of period$479,456$431,349$479,456$431,349Cash and equivalents at end of period$479,456$431,349$479,456$431,349Homebuilding restricted cash at end of period25,71331,18225,71331,182Financial services restricted cash at end of period1,9201,7451,9201,745Cash and equivalents and restricted cash at end of period$507,089$464,276$507,089$464,276 REGIONAL OPERATING DATAThree Months EndedSeptember 30, Nine Months EndedSeptember 30, 20122011% Change20122011% ChangeNew homes delivered:California36329523%90469630%Arizona663778%17611553%Texas107113(5%)36828529%Colorado332532%806916%Nevada     ? 2(100%)912(25%)Florida15112026%41129340%Carolinas14110534%37027634%Consolidated total86169724%2,3181,74633%Unconsolidated joint ventures14138%28274%Total (including joint ventures) 87571023%2,3461,77332% Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 20122011% Change20122011% Change(Dollars in thousands)Average selling prices of homes delivered:California$505$4962%$489$4870%Arizona2041955%2062041%Texas32828117%3072906%Colorado39930730%38630825%Nevada      ?  192--192194(1%)Florida25620227%24420022%Carolinas2412267%2382256%Consolidated3693467%3513384%Unconsolidated joint ventures45035626%4434098%Total (including joint ventures)$370$3477%$352$3394% Three Months EndedSeptember 30,Nine Months EndedSeptember 30,20122011% Change20122011% ChangeNet new orders:California41728646%1,16983141%Arizona61577%23713674%Texas13211713%42437613%Colorado452488%1137551%Nevada     ? 4(100%)67(14%)Florida17415413%56841138%Carolinas16012231%51434449%Consolidated total98976429%3,0312,18039%Unconsolidated joint ventures187157%422383%Total (including joint ventures)1,00777131%3,0732,20339% Three Months EndedSeptember 30,Nine Months EndedSeptember 30,20122011% Change20122011% ChangeAverage number of selling communities   during the period:California5052(4%)51502%Arizona510(50%)79(22%)Texas2222      ? 2021(5%)Colorado7540%6520%Nevada      ? 1(100%)      ? 1(100%)Florida3838      ? 37363%Carolinas343110%352825%Consolidated total156159(2%)1561504%Unconsolidated joint ventures 13(67%)23(33%)Total (including joint ventures)157162(3%)1581533% At September 30,20122011% ChangeHomesDollar ValueHomesDollar ValueHomesDollar Value(Dollars in thousands)Backlog:California439$217,549254$145,04373%50%Arizona11828,3575711,229107%153%Texas20574,73619057,4688%30%Colorado6626,4063612,36283%114%Nevada       ?         ?  3565(100%)(100%)Florida31981,95018545,78172%79%Carolinas24769,74112332,398101%115%Consolidated total1,394498,739848304,84664%64%Unconsolidated joint ventures 176,83614091,600%1,571%Total (including joint ventures)1,411$505,575849$305,25566%66% At September 30,20122011% ChangeHomesites owned and controlled:California9,8069,5273%Arizona1,8441,860(1%)Texas4,4514,1208%Colorado669718(7%)Nevada1,1241,136(1%)Florida8,2116,55425%Carolinas4,0492,91139%Total (including joint ventures)30,15426,82612%Homesites owned23,97420,13919%Homesites optioned or subject to contract 5,6055,3924%Joint venture homesites5751,295(56%)Total (including joint ventures)30,15426,82612%Homesites owned:Raw lots4,5034,2027%Homesites under development8,7734,326103%Finished homesites5,3045,982(11%)Under construction or completed homes2,1701,96111%Held for sale3,2243,668(12%)Total23,97420,13919% RECONCILIATION OF NON-GAAP FINANCIAL MEASURESEach 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 gross margin percentage from home sales to the gross margin percentage from home sales, excluding inventory impairment charges and 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 EndedSeptember 30, 2012GrossMargin %September 30,2011GrossMargin %June 30, 2012GrossMargin %(Dollars in thousands)Home sale revenues$317,389$241,434$274,872Less: Cost of home sales(253,344)(203,188)(218,586)Gross margin from home sales64,04520.2%38,24615.8%56,28620.5%Add: Inventory impairment charges    ?    7,230    ?    Gross margin from home sales, excluding  impairment charges64,04520.2%45,47618.8%56,28620.5%Add: Capitalized interest included in cost   of home sales27,0718.5%18,7767.8%24,4658.9%Gross margin from home sales, excluding   impairment charges and interest amortized  to cost of home sales$91,11628.7%$64,25226.6%$80,75129.4%The table set forth below reconciles the Company's cash flows used in operations to cash inflows from operations excluding land purchases and development costs.  We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases and development costs.Three Months EndedSeptember 30,2012September 30,2011June 30,2012(Dollars in thousands)Cash flows used in operations$(72,418)$(78,464)$(56,600)Add: Land purchases (excl. seller financing and JV purchases)101,36374,73696,584Add: Land development costs39,42231,67334,514Cash inflows from operations (excluding land purchases and development costs)$68,367$27,945$74,498The 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 EndedLTM Ended September 30,September 30,2012September 30,2011June 30,201220122011(Dollars in thousands)Net income (loss)$21,710$(6,434)$14,263$59,829$(53,607)Provision (benefit) for income taxes19415018989(765)Homebuilding interest amortized to cost of sales and interest expense28,74723,10326,082102,55090,539Homebuilding depreciation and amortization5906875752,3862,512Amortization of stock-based compensation1,5592,6351,8857,66311,344EBITDA52,80020,14142,994172,51750,023Add:Cash distributions of income from unconsolidated joint ventures1,125       ?  1601,28520Impairment charges and deposit write-offs       ?  8,959       ?  54916,836Loss on early extinguishment of debt       ?         ?         ?         ?  23,839Less:Income (loss) from unconsolidated joint ventures(39)(455)(1,146)(1,409)(1,066)Income (loss) from financial services subsidiary2,4411,2052,4907,850(154)Adjusted Homebuilding EBITDA$51,523$28,350$41,810$167,910$91,938Homebuilding revenues$318,541$241,793$274,872$1,110,271$802,261Adjusted Homebuilding EBITDA Margin %16.2%11.7%15.2%15.1%11.5%The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:Three Months EndedLTM Ended September 30,September 30,2012September 30,2011June 30,201220122011(Dollars in thousands)Net cash provided by (used in) operating activities$(72,418)$(78,464)$(56,600)$(183,172)$(363,040)Add:Provision (benefit) for income taxes19415018989(765)Homebuilding interest amortized to cost of sales and interest expense28,74723,10326,082102,55090,539Less:Income (loss) from financial services subsidiary2,4411,2052,4907,850(154)Depreciation and amortization from financial services subsidiary32172894937(Gain) loss on disposal of property and equipment12184310182Net changes in operating assets and liabilities:Trade and other receivables4,6818164715,1924,785Mortgage loans held for sale18,11914,9674,43037,94013,418Inventories-owned70,64567,71970,986206,502290,063Inventories-not owned7,1914,85987212,75821,450Other assets(999)2,3411,105(7,447)(2,337)Accounts payable and accrued liabilities(2,152)(5,735)(3,204)1,45238,790Adjusted Homebuilding EBITDA$51,523$28,350$41,810$167,910$91,938The 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.September 30,June 30,December 31,September 30,2012201220112011(Dollars in thousands)Total consolidated debt$1,652,111$1,364,109$1,371,756$1,376,252Less:Financial services indebtedness(71,035)(44,427)(46,808)(52,528)Homebuilding cash(499,572)(317,242)(438,157)(451,192)Adjusted net homebuilding debt1,081,5041,002,440886,791872,532Stockholders' equity760,017656,624623,754604,931Total adjusted book capitalization$1,841,521$1,659,064$1,510,545$1,477,463Total consolidated debt to book capitalization68.5%67.5%68.7%69.5%Adjusted net homebuilding debt to total adjusted book capitalization58.7%60.4%58.7%59.1%The table set forth below calculates pro forma stockholders' equity per common share.  The pro forma common shares outstanding include common shares issuable upon conversion of our outstanding Series B Preferred Stock, and excludes 3.9 million shares issued under a share lending agreement related to the Company's 6% Convertible Senior Subordinated Notes.  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 and excluding shares outstanding under the share lending agreement. September 30,June 30,December 31,201220122011Actual common shares outstanding215,576,688199,933,447198,563,273Add: Conversion of preferred shares to common shares147,812,786147,812,786147,812,786Less: Common shares outstanding under share lending facility(3,919,904)(3,919,904)(3,919,904)Pro forma common shares outstanding359,469,570343,826,329342,456,155Stockholders' equity (Dollars in thousands)$760,017$656,624$623,754Divided by pro forma common shares outstanding÷359,469,570÷343,826,329÷342,456,155Pro forma stockholders' equity per common share$2.11$1.91$1.82 SOURCE Standard Pacific Corp.