Green Brick Partners Inc

Previous wording

Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, and net new home orders, which refers to sales contracts executed reduced by the number of sales contracts canceled during the relevant period. Our results for each key financial and operating metric, as compared to the same period in 2023, are provided below:

Current wording

Our key financial and operating metrics are home deliveries, home closings revenue, average sales price of homes delivered, net new home orders, which refers to sales contracts executed reduced by the number of sales contracts canceled during the relevant period, and homebuilding gross margin. Our results for each key financial and operating metric, as compared to the same period in 2023, are provided below:

Previous wording

Our strong operating results continued to be driven by our superior infill and infill-adjacent locations in high-growth markets, our reduced cycle times, and the strong demand for new homes in our markets. Our average active selling communities increased 21.7% for the quarter while the average sales price of homes delivered decreased 4.4%, primarily as a result of closing out infill communities and opening new communities in surrounding infill-adjacent areas, with homebuilding gross margins improving from 31.3% to 34.5% for the quarter.

Current wording

Our strong operating results continued to be driven by our superior infill and infill-adjacent locations in high-growth markets, reduced cycle times, and the strong demand for new homes in our markets. Our average active selling communities increased 22.1% for the quarter while the average sales price of homes delivered decreased 0.8%. We maintained a strong homebuilding gross margin of 32.7%.

Previous wording

The 20.4% increase in residential units revenue was primarily driven by the 26.1% increase in new homes delivered partially offset by a 4.4% decrease in average sales price of new homes delivered for the three months ended June 30, 2024. The increase in new homes delivered is attributable to the limited competition in our infill and infill-adjacent community sites, our reduced cycle times, and the continued low supply of existing and new home inventory in our markets. The 4.4% decrease in the average sales price of homes delivered for the three months ended June 30, 2024 was a result of closing out infill communities and opening new communities in surrounding infill-adjacent areas.

Current wording

The 25.7% increase in residential units revenue was primarily driven by the 26.8% increase in new homes delivered partially offset by a 0.8% decrease in average sales price of new homes delivered for the three months ended September 30, 2024. The increase in new homes delivered is attributable to the limited competition in our infill and infill-adjacent community sites, our reduced cycle times, and the continued low supply of existing and new home inventory in our markets.

Previous wording

Net new home orders increased 4.0% over the prior year period, and our absorption rate per average active selling community decreased 14.1% year over year. Our average active selling communities increased 21.7% due to the continued opening of new communities. As a result, our absorption rate per average active selling community decreased 14.1% year over year, which was primarily due to the impact of increased mortgage rates, the metering of sales in certain infill communities, and what we believe is the return of pre-pandemic seasonality during the second quarter. The 3.6% decrease in revenue from net new home orders is primarily attributable to a higher mix of sales from newer, in-fill adjacent communities at lower average selling prices and fewer sales from closed-out, infill communities.

Current wording

Net new home orders increased 11.3% over the prior year period and our average active selling communities increased 22.1% due to the continued opening of new communities. As a result, our absorption rate per average active selling community decreased 8.7% year over year, which was primarily due to the impact of what we believe is buyer expectations for the expected drop in short-term rates to result in lower mortgage rates. Revenue from net new home orders was substantially in line with the prior year period.

Previous wording

Backlog refers to homes under sales contracts that have not yet closed at the end of the relevant period, and absorption rate refers to the rate at which net new home orders are contracted per average active selling community during the relevant period. Sales contracts may be canceled prior to closing for a number of reasons, including the inability of the homebuyer to obtain suitable mortgage financing. Accordingly, backlog may not be indicative of our future revenue.

Current wording

Backlog revenue refers to homes under sales contracts that have not yet closed at the end of the respective period, and absorption rate refers to the rate at which net new home orders are contracted per average active selling community during the respective period. Sales contracts may be canceled prior to closing for a number of reasons, including the inability of the homebuyer to obtain suitable mortgage financing. Accordingly, backlog may not be indicative of our future revenue.

Previous wording

Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 9.2% for the three months ended June 30, 2024, compared to 7.4% for the three months ended June 30, 2023. Our cancellation rate remained in a historically low range under 10.0% since December 31, 2022.

Current wording

Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 8.5% for the three months ended September 30, 2024, compared to 6.1% for the three months ended September 30, 2023. Our cancellation rate remained in a historically low range under 10.0% since December 31, 2022.

Previous wording

Residential units revenue increased by $92.7 million or 20.4% for the three months ended June 30, 2024 mainly due to a an increase in homes delivered of 26.1% partially offset by a decrease in the average sales price of homes delivered. Cost of residential units for the three months ended June 30, 2024 increased by $46.2 million, or 14.8%, compared to the same period in the previous year due to a combination of lower direct construction costs and lower lot costs associated with the higher mix of deliveries from infill-adjacent communities.

Current wording

Residential units revenue increased by $106.9 million or 25.7% for the three months ended September 30, 2024, mainly due to a an increase in homes delivered of 26.8% and partially offset by a decrease in the average sales price of homes delivered. Cost of residential units as a percent of residential units revenue for the three months ended September 30, 2024 was relatively unchanged at 67.3% compared to 66.7% in the same period in the previous year.

Previous wording

Residential units gross margin for the six months ended June 30, 2024 increased 450 bps to 34.0%, from 29.5% for the six months ended June 30, 2023. The increase in residential units gross margin is attributable to product mix and limited competition in our infill and infill-adjacent community sites.

Current wording

Residential units gross margin for the three months ended September 30, 2024 decreased 60 bps to 32.7%, from 33.3% for the three months ended September 30, 2023. The decrease in residential units gross margin is attributable to product mix and higher incentives.

Previous wording

Selling, general and administrative expenses as a percentage of revenue decreased by 0.5% for the three months ended June 30, 2024 due to an increase in builder operations revenues with better leveraging of overhead costs.

Current wording

Selling, general and administrative expenses as a percentage of revenue decreased by 0.2% for the three months ended September 30, 2024 due to an increase in builder operations revenues with better leveraging of overhead costs.

Previous wording

Selling, general and administrative expenses as a percentage of revenue for builder operations decreased by 0.3% for the three months ended June 30, 2024 due to an increase in builder operations revenues with better leveraging of our overhead costs. Builder operations expenditures include salary expenses, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.

Current wording

Selling, general and administrative expenses as a percentage of revenue for builder operations decreased by 0.2% for the three months ended September 30, 2024 due to an increase in builder operations revenues with better leveraging of our overhead costs. Builder operations expenditures include salary expenses, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.

Previous wording

Selling, general and administrative expenses for the corporate, other and unallocated non-operating segment for the three months ended June 30, 2024 were $2.4 million, compared to $1.4 million for the three months ended June 30, 2023. Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments.

Current wording

Selling, general and administrative expenses for the corporate, other and unallocated non-operating segment for the three months ended September 30, 2024 were $2.3 million, compared to $0.1 million for the three months ended September 30, 2023. Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments.

Previous wording

Equity in income of unconsolidated entities decreased to $1.2 million, or 79.2%, for the three months ended June 30, 2024, compared to $5.7 million for the three months ended June 30, 2023. The decrease is mainly due to the sale of our ownership interest in Challenger during the three months ended March 31, 2024. See Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of Green Brick’s share in net earnings by unconsolidated entity.

Current wording

Equity in income of unconsolidated entities decreased to $1.0 million, for the three months ended September 30, 2024, compared to $1.3 million for the three months ended September 30, 2023. See Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of Green Brick’s share in net earnings by unconsolidated entity.

Previous wording

Income tax expense was $23.9 million for the three months ended June 30, 2024 compared to $23.1 million for the three months ended June 30, 2023. The increase was substantially due to higher taxable income partially offset by a lower effective tax rate, lower state tax rates, and a discrete tax benefit for equity compensation deductions. See Note 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion on the Company’s income tax expense for the three months ended June 30, 2024.

Current wording

Income tax expense was $23.1 million for the three months ended September 30, 2024 compared to $21.0 million for the three months ended September 30, 2023. The increase was substantially due to higher taxable income partially offset by a lower effective tax rate, lower state tax rates, and a discrete tax benefit for equity compensation deductions. See Note 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion on the Company’s income tax expense for the three months ended September 30, 2024.

Previous wording

The table below represents residential units revenue and new homes delivered for the six months ended June 30, 2024 and 2023 (dollars in thousands):

Current wording

The table below represents residential units revenue and new homes delivered for the nine months ended September 30, 2024 and 2023 (dollars in thousands):

Previous wording

The $85.6 million increase in residential units revenue was driven by the 17.1% increase in new homes delivered partially offset by a 6.4% decrease in the average sales price of homes delivered for the six months ended June 30, 2024. The increase in new homes delivered was primarily driven by increased levels of active selling communities and home starts and an improvement in cycle times in the current year. The 6.4% decrease in the average sales price of homes delivered for the six months ended June 30, 2024 was a result of closing out infill communities and opening new communities in surrounding infill-adjacent areas.

Current wording

The $192.6 million increase in residential units revenue was driven by the 20.3% increase in new homes delivered partially offset by a 4.7% decrease in the average sales price of homes delivered for the nine months ended September 30, 2024. The increase in new homes delivered was primarily driven by an increase in active selling communities and home starts and an improvement in cycle times. The 4.7% decrease in the average sales price of homes delivered for the nine months ended September 30, 2024 was a result of closing out infill communities and opening new communities in surrounding infill-adjacent areas.

Previous wording

Net new home orders increased 2.0% over the prior year period while our average active selling communities increased 19.5%. As a result, our absorption rate per average active selling community decreased 14.8% year over year, which was primarily due to the impact of increased mortgage rates, the metering of sales in certain infill communities, and what we believe is the return of pre-pandemic seasonality during the second quarter. The 3.1% decrease in revenue from net new home orders is primarily attributable to a higher mix of sales from newer, in-fill adjacent communities at lower average selling prices and fewer sales from closed-out, infill communities.

Current wording

Net new home orders increased 4.7% over the prior year period while our average active selling communities increased 20.5%. As a result, our absorption rate per average active selling community decreased 13.9% year over year, which was primarily due to the impact of increased mortgage rates, the metering of sales in certain infill communities, what we believe is the return of pre-pandemic seasonality that began in the second quarter, and buyer expectations for the expected drop in short-term rates to result in lower mortgage rates. The 2.1% decrease in revenue from net new home orders is primarily attributable to a higher mix of sales from newer, infill adjacent communities at lower average selling prices and fewer sales from closed-out, infill communities where we typically face more limited competition and have higher sales prices .

Previous wording

Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 6.5% for the six months ended June 30, 2024, compared to 6.7% for the six months ended June 30, 2023. Our cancellation rate remained in a historically low range under 10.0% since December 31, 2022.

Current wording

Our cancellation rate, which refers to sales contracts canceled divided by sales contracts executed during the relevant period, was 7.1% for the nine months ended September 30, 2024, compared to 6.5% for the nine months ended September 30, 2023. Our cancellation rate remained in a historically low range under 10.0% since December 31, 2022.

Previous wording

Residential units revenue increased $85.6 million or 9.5% during the six months ended June 30, 2024 due to the increase in home deliveries of 17.1%. Cost of residential units for the six months ended June 30, 2024 increased by $15.3 million, or 2.4%, compared to the six months ended June 30, 2023 due to a combination of lower direct construction costs and lower lot costs associated with the higher mix of deliveries from infill-adjacent communities.

Current wording

Residential units revenue increased $192.6 million or 14.6% during the nine months ended September 30, 2024 due to the increase in home deliveries of 20.3%, partially offset by lower average sales prices. Cost of residential units as a percent of residential units revenue was 66.4% for the nine months ended September 30, 2024 compared to 69.3% for the nine months ended September 30, 2023 due to a combination of lower direct construction costs and lower lot costs associated with the higher mix of deliveries from infill-adjacent communities.

Previous wording

Residential units gross margin for the three months ended June 30, 2024 increased 320 bps to 34.5%, from 31.3% for the three months ended June 30, 2023. The increase in residential units gross margin is attributable to product mix and limited competition in our infill and infill-adjacent community sites.

Current wording

Residential units gross margin for the nine months ended September 30, 2024 increased 290 bps to 33.6%, from 30.7% for the nine months ended September 30, 2023. The increase in residential units gross margin is attributable to product mix and limited competition in our infill and infill-adjacent community sites.

Previous wording

From time to time we will opportunistically sell finished lots to other homebuilders when we determine that we have excess capacity in specific neighborhoods or submarkets. Lots revenue increased by $1.3 million during the six months ended June 30, 2024. Land revenue represents sales of two tracts of commercial land during the six months ended June 30, 2024.

Current wording

From time to time we will opportunistically sell finished lots to other homebuilders when we determine that we have excess capacity in specific neighborhoods or submarkets. Land revenue represents sales of two tracts of commercial land during the nine months ended September 30, 2024.

Previous wording

Selling, general and administrative expenses as a percentage of revenue was 10.7% by for the six months ended June 30, 2024 which is substantially in line with 10.5% for the six months ended June 30, 2023.

Current wording

Selling, general and administrative expenses as a percentage of revenue was 10.8% for the nine months ended September 30, 2024, which is substantially in line with 10.7% for the nine months ended September 30, 2023.

Previous wording

Selling, general and administrative expenses as a percentage of revenue for builder operations increased from 10.5% to 10.9% mainly due to an increase in salary expenses. Builder operations expenditures include salary expenses, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.

Current wording

Selling, general and administrative expenses as a percentage of revenue for builder operations increased from 10.7% to 10.9% mainly due to an increase in salary expenses. Builder operations expenditures include salary expenses, sales commissions, and community costs such as advertising and marketing expenses, rent, professional fees, and non-capitalized property taxes.

Previous wording

Selling, general and administrative expenses for the corporate, other and unallocated non-operating segment for the six months ended June 30, 2024 were $3.7 million and de minimis for the six months ended June 30, 2023. The increase was driven by incentive compensation and salary expenses during the six months ended June 30, 2024. Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments.

Current wording

Selling, general and administrative expenses for the corporate, other and unallocated non-operating segment for the nine months ended September 30, 2024 were $6.0 million and de minimis for the nine months ended September 30, 2023. The increase was driven by incentive compensation and salary expenses during the nine months ended September 30, 2024. Corporate, other and unallocated expenses generally include capitalized overhead adjustments that are not allocated to builder operations segments.

Previous wording

Equity in income of unconsolidated entities decreased to $3.8 million, or 61.9%, for the six months ended June 30, 2024, compared to $9.9 million for the six months ended June 30, 2023. The decrease is mainly due to the sale of our ownership interest in Challenger during the three months ended March 31, 2024, wherein, we recognized only one month of net earnings from this investment compared to six months in the prior year. See Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of Green Brick’s share in net earnings by unconsolidated entity.

Current wording

Equity in income of unconsolidated entities decreased to $4.8 million, or 57.7%, for the nine months ended September 30, 2024, compared to $11.3 million for the nine months ended September 30, 2023. The decrease is mainly due to the sale of our ownership interest in Challenger during the three months ended March 31, 2024, wherein, we recognized only one month of net earnings from this investment compared to nine months in the prior year. See Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a summary of Green Brick’s share in net earnings by unconsolidated entity.

Previous wording

Other income, net, increased to $21.3 million for the six months ended June 30, 2024, compared to $9.1 million for the six months ended June 30, 2023. The increase was primarily due to a $10.7 million gain in the sale of our investment in Challenger.

Current wording

Other income, net, increased to $25.4 million for the nine months ended September 30, 2024, compared to $13.7 million for the nine months ended September 30, 2023. The increase was primarily due to a $10.7 million gain in the sale of our investment in Challenger.

Previous wording

Income tax expense was $48.7 million for the six months ended June 30, 2024 compared to $42.2 million for the six months ended June 30, 2023. The increase was substantially due to higher taxable income partially offset by a lower effective tax rate, lower state tax rates, and a discrete tax benefit for equity compensation deductions. See Note 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion on the Company’s income tax expense for the six months ended June 30, 2024.

Current wording

Income tax expense was $71.8 million for the nine months ended September 30, 2024 compared to $63.2 million for the nine months ended September 30, 2023. The increase was substantially due to higher taxable income partially offset by a lower effective tax rate, lower state tax rates, and a discrete tax benefit for equity compensation deductions. See Note 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion on the Company’s income tax expense for the nine months ended September 30, 2024.

Previous wording

(1) Total lots owned includes finished lot purchases, which were less than 2.4% of total lots self-developed as of June 30, 2024.

Current wording

(1) Total lots owned includes finished lot purchases, which were less than 1.8% of total lots self-developed as of September 30, 2024.

Previous wording

As of June 30, 2024 and December 31, 2023, we had $133.3 million and $179.8 million of unrestricted cash and cash equivalents, respectively. Our historical cash management strategy includes redeploying net cash from the sale of home inventory to acquire and develop land and lots that represent opportunities to generate desired margins and returns, and using cash to make additional investments in business acquisitions, joint ventures, or other strategic activities.

Current wording

As of September 30, 2024 and December 31, 2023, we had $80.1 million and $179.8 million of unrestricted cash and cash equivalents, respectively. Our historical cash management strategy includes redeploying net cash from the sale of home inventory to acquire and develop land and lots that represent opportunities to generate desired margins and returns, and using cash to make additional investments in business acquisitions, joint ventures, share repurchases, or other strategic activities.

Previous wording

Our principal uses of capital for the six months ended June 30, 2024 were home construction, land purchases, land development, repayments of debt, operating expenses, and payment of routine liabilities. Historically, we have used funds generated by operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and remain poised for continued growth.

Current wording

Our principal uses of capital for the nine months ended September 30, 2024 were home construction, land purchases, land development, repayments of debt, operating expenses, share repurchases, and payment of routine liabilities. Historically, we have used funds generated by operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and remain poised for continued growth.

Previous wording

Our debt to total capitalization ratio, which is calculated as the sum of borrowings on lines of credit, the senior unsecured notes, and notes payable, net of debt issuance costs (“total debt”), divided by the total capitalization, which equals the sum of Green Brick Partners, Inc. stockholders’ equity and total debt, was approximately 17.7% as of June 30, 2024.

Current wording

Our debt to total capitalization ratio, which is calculated as the sum of borrowings on lines of credit, the senior unsecured notes, and notes payable, net of debt issuance costs (“total debt”), divided by the total capitalization, which equals the sum of Green Brick Partners, Inc. stockholders’ equity and total debt, was approximately 16.4% as of September 30, 2024.

Previous wording

Additionally, as of June 30, 2024, our net debt to total capitalization ratio, which is a non-GAAP financial measure, remained low at 10.9%. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding activities.

Current wording

Additionally, as of September 30, 2024, our net debt to total capitalization ratio, which is a non-GAAP financial measure, remained low at 12.5%. It is our intent to prudently employ leverage to continue to invest in our land acquisition, development and homebuilding activities.

Previous wording

The Company’s key sources of liquidity were funds generated by operations and borrowings during the six months ended June 30, 2024.

Current wording

The Company’s key sources of liquidity were funds generated by operations and borrowings during the nine months ended September 30, 2024.

Previous wording

The following summarizes our primary sources and uses of cash during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023:

Current wording

The following summarizes our primary sources and uses of cash during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023:

Previous wording

•Operating activities. Net cash provided by operating activities for the six months ended June 30, 2024 was $3.2 million, compared to $210.2 million during the six months ended June 30, 2023. The net cash outflows for the six months ended June 30, 2024 were primarily driven by an increase in inventory of $258.2 million, partially offset by $203.3 million of cash generated from business operations, increase in customer deposits of $6.2 million and the deferral of expense payments through a $43.3 million increase in accrued expenses and accounts payable.

Current wording

•Operating activities. Net cash used for operating activities for the nine months ended September 30, 2024 was $3.0 million, compared to $232.7 million provided by operating activities during the nine months ended September 30, 2023. The net cash outflows for the nine months ended September 30, 2024 were primarily driven by an increase in inventory of $383.9 million, partially offset by $300.7 million of cash generated from business operations and the deferral of expense payments through a $82.5 million increase in accrued expenses and accounts payable.

Previous wording

•Investing activities. Net cash provided by investing activities for the six months ended June 30, 2024 was $58.1 million, compared to net cash used of $7.8 million during the six months ended June 30, 2023. The cash inflows for the six months ended June 30, 2024 were primarily from proceeds of $64.0 million from the sale of our interest in Challenger in February 2024, partially offset by $3.5 million used in other investments in unconsolidated entities.

Current wording

•Investing activities. Net cash provided by investing activities for the nine months ended September 30, 2024 was $34.6 million, compared to net cash used of $10.0 million during the nine months ended September 30, 2023. The cash inflows for the nine months ended September 30, 2024 were primarily from proceeds of $64.0 million from the sale of our interest in Challenger in February 2024, partially offset by $25.8 million used in other investments in unconsolidated entities.

Previous wording

•Financing activities. Net cash used in financing activities for the six months ended June 30, 2024 was $102.6 million, compared to net cash used of $64.4 million during the six months ended June 30, 2023. The cash outflows were primarily related to share repurchases of $42.6 million, repayments of our senior unsecured notes of $25.0 million and notes payable of $12.9 million.

Current wording

•Financing activities. Net cash used in financing activities for the nine months ended September 30, 2024 was $126.4 million, compared to net cash used of $69.8 million during the nine months ended September 30, 2023. The cash outflows were primarily related to share repurchases of $48.0 million, repayments of our senior unsecured notes of $37.5 million and notes payable of $13.0 million.

Previous wording

Senior Unsecured Notes -As of June 30, 2024, we had four series of senior unsecured notes outstanding which were each issued pursuant to a note purchase agreement. The aggregate principal amount of senior unsecured notes outstanding was $311.4 million as of June 30, 2024 compared to $336.2 million as of December 31, 2023, net of issuance costs.

Current wording

Senior Unsecured Notes -As of September 30, 2024, we had four series of senior unsecured notes outstanding which were each issued pursuant to a note purchase agreement. The aggregate principal amount of senior unsecured notes outstanding was $299.0 million as of September 30, 2024 compared to $336.2 million as of December 31, 2023, net of issuance costs.

Previous wording

•In August 2019, we issued $75.0 million of senior unsecured notes (the “2026 Notes”). Interest accrues at an annual rate of 4.0% and is payable quarterly. Principal on the 2026 Notes is required to be paid in increments of $12.5 million on each of August 8, 2024 and August 8, 2025 with a final principal payment of $50.0 million on August 8, 2026.

Current wording

•In August 2019, we issued $75.0 million of senior unsecured notes (the “2026 Notes”) of which $62.5 million is outstanding as of September 30, 2024. Interest accrues at an annual rate of 4.0% and is payable quarterly. Principal on the 2026 Notes of $12.5 million is due on August 8, 2025 and the remaining principal amount of $50.0 million is due on August 8, 2026.

Previous wording

Optional prepayment is allowed with payment of a “make-whole” premium which fluctuates depending on market interest rates. Interest is payable quarterly in arrears.

Current wording

Optional prepayment is allowed with payment of a “make-whole” premium that fluctuates depending on market interest rates. Interest is payable quarterly in arrears.

Previous wording

•a minimum interest coverage (consolidated EBITDA to interest incurred) of no less than 2.0 to 1.0. As of June 30, 2024, our interest coverage on a last 12 months’ basis was 31.09 to 1.0;

Current wording

•a minimum interest coverage (consolidated EBITDA to interest incurred) of no less than 2.0 to 1.0. As of September 30, 2024, our interest coverage on a last 12 months’ basis was 33.16 to 1.0;