Century Communities Inc
For the period ended Dec 31, 2024. Filed Jan 30, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Jan 30, 2025
CCS$55.21-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-05.
0001576940-24-000005
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-01-30.
0001576940-25-000006
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 151 current paragraphs.
69 unchanged; 64 reworded; 18 added; 22 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
While the homebuilding industry has continued to be impacted by volatile mortgage rates, current housing market conditions demonstrate strong underlying demand for affordable new homes, supported by solid demographic trends. We experienced solid demand during the year ended December 31, 2024, as net new home contracts (new home contracts net of cancellations) for the year ended December 31, 2024 increased 20.9% compared to the prior year. We have continued to provide, when necessary, incentive offerings across our communities, including discounts on base home prices, lot premiums, options and upgrades, and financing incentives, including interest rate buydowns. During the year ended December 31, 2024, cycle times remained in the four- to five-month timeframe.
Current report
During the year ended December 31, 2024, we generated financial services revenue of $92.9 million, representing an increase of 15.8% as compared to the prior year. During the year ended December 31, 2024, the number of mortgages originated increased 29.9% as compared to the prior year period, which benefited from increased capture rates, and the number of loans sold to third parties increased 33.4% as compared to the prior year period. While total loan origination volumes increased during the year ended December 31, 2024 compared to the prior year, the decrease in income before income tax expense of our Financial Services segment was primarily driven by lower margins on mortgages originated due to a more competitive market.
Current report
Our Century Living operationsare engaged in the development, construction and management of multi-family rental properties. As of December 31, 2024, the Company had three multi-family rental properties under active construction in Colorado, two of which were available for pre-leasing. These three projects represent over 1,000 total multi-family units, including 543 under active construction and 509 completed units, of which 154 were occupied as of December 31, 2024. Further, during the year ended December 31, 2024, one multi-family rental property was sold, resulting in a $23.3 million gain on sale reflected in other income (expense) on our consolidated statements of operations.
Current report
(1)Includes cost of land sales and other revenues, and other income (expense)
Current report
During the year ended December 31, 2024, our Texas segment generated income before income tax expense of $58.0 million, a 32.6% increase over the prior year, which was primarily driven by an increase in revenue of $165.7 million and an increase in homebuilding gross margin. The revenue increase during the year ended December 31, 2024 was primarily driven by a 28.4% increase in the number of home delivered and a 5.8% increase in the average sales price per home. The increase in the number of homes delivered was primarily driven by an increase in the number of homes under construction, and the average sales price increase was driven by the mix of deliveries within individual communities. Homebuilding gross margin was 19.9% for the year ended December 31, 2024, which improved 110 basis points from 18.8% in the prior year period, primarily driven by the mix of deliveries within individual communities, and partially offset by an increase in impairment charges of $2.8 million.
Current report
During the year ended December 31, 2024, our Southeast segment generated income before income tax expense of $102.1 million, a 4.6% decrease over the prior year, which was primarily due to decreased homebuilding gross margin. Homebuilding gross margin was 23.8% for the year ended December 31, 2024, which decreased 330 basis points from 27.1% in the prior year period, primarily driven by the mix of deliveries within individual communities, as well as an increase in impairment charges of $1.1 million recognized during the current year period. This decrease was partially offset by an increase in revenue of $106.0 million, primarily driven by an increase of 20.7% in the number of homes delivered, and partially offset by a decrease of 2.4% in the average sales price per home. The increase in the number of homes delivered was primarily driven by an increase in the number of homes under construction, and the average sales price decrease was driven by the mix of deliveries within individual communities.
Current report
During the year ended December 31, 2024, our Century Complete segment generated income before income tax expense of $108.8 million, a 9.8% increase over the prior year, which was primarily driven by an increase in revenue of $76.9 million and an increase in homebuilding gross margin. The revenue increase during the year ended December 31, 2024 was primarily driven by a 7.4% increase in the number of home delivered and a 1.0% increase in the average sales price per home. The increase in the number of homes delivered was primarily driven by an increase in the number of homes under construction, and the average sales price increase was driven by the mix of deliveries within individual communities. Homebuilding gross margin was 20.9% for the year ended December 31, 2024, which improved 70 basis points from 20.2% in the prior year period, primarily driven by the mix of deliveries within individual communities and partially offset by an increase in impairment charges of $3.0 million.
Current report
Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, the volume of loans originated typically correlates to our number of homes delivered. Fluctuations in financial services income before income tax may occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned. Our Financial Services segment generated income before income tax expense of $26.7 million for the year ended December 31, 2024, a 15.4% decrease over the prior year. During the year ended December 31, 2024, the number of mortgages originated increased 29.9% as compared to the prior year, which benefited from increased capture rates, and the number of loans sold to third parties increased 33.4% as compared to prior year period. While total loan origination volumes increased during the year ended December 31, 2024 compared to the prior year, the decrease in income before income tax expense of our Financial Services segment was primarily driven by lower margins on mortgages originated due to a more competitive market.
Current report
Average monthly absorption rate
Current report
Selling communities
Current report
In addition, in the ordinary course of business, we explore, and from time to time, enter into purchase agreements to opportunistically acquire other homebuilders to add existing and future lots to our land portfolio and augment the organic expansion of our land portfolio. These acquisitions are often legally structured as asset acquisitions for cash and conditioned upon a due diligence investigation by us of the business for a limited period of time, in addition to other standard and customary closing conditions.
Current report
3.875% Senior Notes Due 2029
Current report
In August 2021, we completed a private offering of $500.0 million aggregate principal amount of our 3.875% Senior Notes due 2029 (which we refer to as the “2029 Notes”) in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended (which we refer to as the “Securities Act”). The 2029 Notes were issued under an Indenture, dated as of August 23, 2021, among the Company, our subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee (which we refer to as the “August 2021 Indenture,” as it may be supplemented or amended from time to time). The 2029 Notes were issued at 100% of their principal amount and we received proceeds of $493.8 million, net of $6.2 million in issuance costs. The August 2021 Indenture contains certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the 2029 Notes is due August 2029, with interest only payments due semi-annually in February and August of each year, beginning on February 15, 2022. As of December 31, 2024, the aggregate obligation, inclusive of unamortized financing costs on the 2029 Notes, was $496.4 million.
Current report
6.750% Senior Notes Due 2027
Current report
In May 2019, we completed a private offering of $500.0 million aggregate principal amount of the Company’s Initial 6.750% Senior Notes due 2027 (which we refer to as the “Initial Notes due 2027”) in reliance on Rule 144A and Regulation S under the Securities Act of 1933. The Initial Notes due 2027 were issued under the Indenture, dated as of May 23, 2019, among the Company, our subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee (which we refer to as the “May 2019 Indenture,” as it may be supplemented or amended from time to time). The Initial Notes due 2027 were issued at 100% of their principal amount and we received net proceeds of $493.9 million. In connection with this issuance, we deferred $6.1 million of issuance costs, which is presented in the notes payable line item of the consolidated balance sheet. In February 2020, we completed an offer to exchange approximately $500.0 million in aggregate principal amount of our Initial Notes due 2027, which are registered under the Securities Act (which we refer to as the “Exchange Notes due 2027”), for an equivalent amount of the Initial Notes due 2027 that were tendered and accepted for exchange. The terms of the Exchange Notes due 2027 are identical in all material respects to the Initial Notes due 2027, except that the Exchange Notes due 2027 are registered under the Securities Act and the transfer restrictions, registration rights, and additional interest provisions that are applicable to the Initial Notes due 2027 do not apply to the Exchange Notes due 2027.
Current report
The Initial Notes due 2027 and Exchange Notes due 2027 (which we refer to collectively, as the “Existing Notes due 2027”) will be treated as a single series of notes under the May 2019 Indenture, and will vote as a single class of notes for all matters submitted to a vote of holders under the May 2019 Indenture. The Existing Notes due 2027 are unsecured senior obligations which are guaranteed on an unsecured senior basis by certain of our current and future subsidiaries. The May 2019 Indenture governing the Existing Notes due 2027 contains certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the Existing Notes due 2027 is due June 2027, with interest only payments due semi-annually in June and December of each year, which began on December 1, 2019. As of December 31, 2024, the aggregate obligation, inclusive of unamortized financing costs on the Existing Notes due 2027, was $498.0 million.
Current report
As of December 31, 2024, $135.5 million was outstanding under the revolving line of credit, with borrowings that bore an interest rate of 5.9%, and we were in compliance with all covenants thereunder. As of December 31, 2023, no amounts were outstanding under our prior revolving line of credit.
Current report
Cash Dividends
Removed paragraphs (22)
Previous report
While inflation continued to impact the broader economy during 2023, homebuyers are adjusting to a more normalized higher interest rate environment. Accordingly, we generated solid financial results during 2023 and we are encouraged by recent housing market conditions demonstrating the strong, underlying demand that exists for affordable new homes, as compared to the second half of 2022, when increased mortgage interest rates, inflation, and macro-economic uncertainty considerably impacted the U.S. housing market. Net new home contracts (new home contracts net of cancellations) for the year ended December 31, 2023 increased 13.9% as compared to the prior year period. Further, during the year ended December 31, 2023, our cancellation rate was 16.6%, representing a significant improvement from the 24% cancellation rate we experienced in 2022, as we believe homebuyers are adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cyclehas benefitted our cancellation rate.
Previous report
In response to the significant mortgage rate increases experienced in the latter half of 2022, and to maintain sales momentum, we increased incentive offerings across our communities during 2023 as compared to 2022, including discounts on base home prices, lot premiums, and options and upgrades and financing incentives, including interest rate buydowns, which resulted in downward pressure to our homebuilding gross margin during the year ended December 31, 2023.
Previous report
During the year ended December 31, 2023, we experienced improved cycle times, returning to a more normalized four to five month timeframe, and our deliveries in the latter half of 2023 benefitted from reduced direct construction costs from our starts earlier in the year, as compared to the high point of our direct construction costs during the second quarter of 2022.
Previous report
During the year ended December 31, 2023, we generated financial services revenue of $80.2 million, representing a decrease of 15.9% as compared to the prior year, driven byreduced margins on loans sold to third parties period over period and a decrease in the number of mortgages originated period over period.
Previous report
Our Century Living operations are engaged in construction on three multi-family for rent projects in Colorado, which commenced in 2022 and comprise over 900 total units. A portion of the first multi-family property consisting of over 200 units became available for leasing during the second half of 2023, and we anticipate the remaining projects will be available for leasing during 2024.
Previous report
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment. Accordingly, we have presented segment information under this new basis for the year ended December 31, 2023, and we have restated the corresponding segment information for those segments for the year ended December 31, 2022.
Previous report
During the year ended December 31, 2023, our Texas segment generated income before income tax expense of $43.8 million, a 41.5% decrease over the prior year, which was primarily driven by a decrease in home sales revenue of $68.9 million. The revenue decrease during the year ended December 31, 2023 was primarily driven by a 11.6% decrease in the average sales price per home. The average sales price decrease was driven by the mix of deliveries within individual communities and pricing to market within individual communities. For the year ended December 31, 2023, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
Previous report
During the year ended December 31, 2023, our Southeast segment generated income before income tax expense of $107.0 million, a 23.0% decrease over the prior year, which was primarily driven by a decrease in home sales revenue of $129.1 million. The revenue decrease during the year ended December 31, 2023 was primarily driven by a 18.5% decrease in the number of home delivered, primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022.
Previous report
During the year ended December 31, 2023, our Century Complete segment generated income before income tax expense of $99.0 million, a 12.8% decrease over the prior year, which was primarily driven by a decrease in home sales revenue of $8.6 million. The revenue decrease during the year ended December 31, 2023 was primarily driven by a 3.3% decrease in the number of homes delivered and partially offset by a 2.5% increase in the average sales price per home. The decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and the average sales price increase was driven by the mix of deliveries within individual communities and pricing to market within individual communities.
Previous report
Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, performance typically correlates to our number of homes delivered. Our Financial Services segment generated income before income tax of $31.6 million for the year ended December 31, 2023, a 23.3% decrease over the prior year period, primarily the result of a $15.2 million decrease in financial services revenue as compared to the prior year period. The decrease in financial services revenue was primarily driven by reduced margins on loans sold to third parties period over period and a decrease in the number of mortgages originated period over period.
Previous report
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment. Accordingly, we have presented segment information under this new basis as of December 31, 2023, and we have restated the corresponding segment information for those segments as of December 31, 2022.
Previous report
Commencing in the first quarter of 2023, our Century Complete operations in Texas were realigned and are now managed under our Texas segment. Accordingly, we have presented segment information under this new basis as of and for the year ended December 31, 2023, and we have restated the corresponding segment information for those segments as of and for the year ended December 31, 2022.
Previous report
13.9%, to 8,828 as compared to 7,753 for the year ended December 31, 2022, primarily due to more homes available for sale.
Previous report
Monthly absorption rate
Previous report
During the year ended December 31, 2023, our absorption rate decreased by 6.5% to 2.9 per month, as compared to 2022. During the year ended December 31, 2023, we experienced a cancellation rate of 16.6%, which represents a significant improvement from the cancellation rate of 24% we experienced in 2022 as we believe homebuyers are adjusting to the higher interest rate environment and our strategy of selling homes later in the construction cycle has benefitted our cancellation rate.
Previous report
Selling communities at period end
Previous report
As of December 31, 2023 and 2022, no amounts were outstanding under the revolving line of credit facility and were in compliance with all covenants under the Second A&R Agreement.
Previous report
At-the-Market Offerings
Previous report
We are party to a Distribution Agreement with J.P. Morgan Securities LLC, BofA Securities, Inc., Wells Fargo Securities, LLC and Fifth Third Securities, Inc. (which we refer to as the “Distribution Agreement”), as sales agents pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through any of the sales agents party thereto in “at-the-market” offerings, in accordance with the terms and conditions set forth in the Distribution Agreement. The Distribution Agreement will remain in full force and effect until terminated by either party pursuant to the terms of the agreement or such date that the maximum offering amount has been sold in accordance with the terms of the agreement. We did not sell or issue any shares of our common stock during the years ended December 31, 2023 and 2022, respectively, and as of December 31, 2023, all $100.0 million remained available for sale.
Previous report
Dividends
Previous report
Stock-Based Compensation
Previous report
We account for stock-based awards in accordance with ASC 718, Compensation—Stock Compensation, which requires us toestimate the grant date fair value of stock-based compensation awards and to recognize the fair value as compensation costs over the requisite service period, which is generally three years, for all awards that vest. We estimate an annual forfeiture rate at the time of grant based on historical experience, and revise the rate in subsequent periods, if necessary, based on actual forfeiture data. The fair value of our restricted stock units and awards in the form of unrestricted shares of common stock is equal to the closing price of our common stock on the New York Stock Exchange on the date of grant. Stock-based compensation expense associated with outstanding performance share units is measured using the grant date fair value and is based on the estimated achievement of the established performance criteria at the end of each reporting period until the performance period ends, recognized on a straight-line basis over the performance period. Stock-based compensation expense is only recognized for performance share units that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. Management judgment is required in estimating the level of performance that will be achieved and the number of shares that will be earned, and considers, among other factors, our historical operating results and our expectation of future profitability. The performance share units granted during the fiscal years ended December 31, 2023, 2022, and 2021 have three-year performance-based metrics measured over performance periods ending on December 31 for each three-year period.
Reworded paragraphs (64)
Previous wording
The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Some of the numbers included herein have been rounded for the convenience of presentation.
Current wording
The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and current business environment and is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” in Part I, Item 1A of this Form 10-K and elsewhere in this Form 10-K. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Some of the numbers included herein have been rounded for the convenience of presentation.
Previous wording
Our Century Communities brand has an emphasis on serving the entry-level homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade opportunities.
Current wording
We are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 17 states. In many of our projects, in addition to building homes, we entitle and develop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand has an emphasis on serving the affordable homebuilding market but offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade opportunities.
Previous wording
Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance, and escrow services, respectively, primarily to our homebuyers have been identified as our Financial Services segment. Additionally, our wholly owned subsidiary, Century Living, LLC, is engaged in the development, construction and management of multi-family rental properties. During the year ended December 31, 2023, our Century Living operations were engaged in construction on three multi-family projects in Colorado, which commenced construction in 2022. Century Living, LLC is included in our Corporate segment.
Current wording
Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage, and escrow services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment. Additionally, our wholly owned subsidiary, Century Living, LLC, is engaged in the development, construction and management of multi-family rental properties, currently all located in Colorado. Century Living, LLC is included in our Corporate segment.
Previous wording
While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital. Of the 9,568 homes delivered during 2023, approximately 92% of our deliveries were made to entry-level homebuyers that were below Federal Housing Administration-insured mortgage limitsand approximately 99% of homes delivered were built as move-in ready homes.
Current wording
While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital. Of the 11,007 homes delivered during the year ended December 31, 2024, approximately 93% of our deliveries were made to entry-level homebuyers that were below the Federal Housing Administration-insured mortgage limits and approximately 99% of homes delivered were built as move-in ready homes.
Previous wording
On January 22, 2024, we closed on the acquisition of substantially all the assets of Landmark Homes of Tennessee, Inc. (“Landmark”), a homebuilder with operations, including six active communities, in Nashville, Tennessee.
Current wording
During 2024, we completed two acquisitions. On July 31, 2024, we closed on the acquisition of substantially all the assets and operations and assumed certain liabilities of Anglia Homes LP (“Anglia”), a homebuilder with operations in the greater Houston, Texas area, for approximately $127.0 million in cash, inclusive of customary holdbacks. On January 22, 2024, we closed on the acquisition of substantially all the assets and assumed certain liabilities of Landmark Homes of Tennessee, Inc. (“Landmark”), a homebuilder with operations, including six active communities, in Nashville, Tennessee, for approximately $33.4 million in cash, inclusive of customary holdbacks.
Previous wording
We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, andwe expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful. We believe future demand for our homes remains uncertain as future economic and market conditions remain uncertain, in particular with respect to inflation; the impact of potential future increases or decreases to the federal funds interest rate by the Federal Reserve; interest rates; availability and cost of mortgage loans to homebuyers; financial markets, credit and mortgage markets; the extent to which and how long government monetary directives, actions, and economic relief efforts will impact the U.S. economy; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; and other factors, including those described elsewhere in this Form 10-K. Specifically, changes in interest rates impacts the costs of owning a home and affects the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to interest rates or otherwise would affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of and revenues from our Financial Services segment, and net income. As a result, our past performance may not be indicative of our future results.
Current wording
We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, andwe expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful. We believe future demand for our homes remains uncertain as future economic and market conditions remain uncertain, in particular with respect to inflation; the impact of potential future increases or decreases to the federal funds interest rate by the Federal Reserve; interest rates; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long government monetary directives, actions, and economic relief efforts will impact the U.S. economy; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; and other factors, including those described elsewhere in this Form 10-K. Specifically, changes in mortgage interest rates impact the costs of owning a home and affect the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to mortgage interest rates or otherwise affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of and revenues from our Financial Services segment, and net income. As a result, our past performance may not be indicative of our future results.
Previous wording
Despite future macro-economic uncertainty, especially in relation to the interest rate environment, we believe we are well-positioned to benefit from the ongoing shortage of both new and resale homes available for purchase in our key markets and the favorable demographics that support the need for new affordable housing. We believe our operations are prepared to withstand volatility in future market conditions as a result of our product offerings which both span the home buying segment and focus on affordable price points, and our current and future inventories of attractive land positions. We have continued to focus on maintaining an appropriate balance of home and land inventories in relation to anticipated future demand, as well as prudent leverage, and, as a result, we believe we are well positioned to continue to execute on our strategy in order to optimize stockholder returns.
Current wording
We believe we are well-positioned to benefit from the ongoing shortage of both new and resale homes available for purchase in our key markets and the favorable demographics that support the need for new affordable housing. We believe our operations are prepared to withstand volatility in future market conditions as a result of our product offerings which both span the home buying segment and focus on affordable price points, and our current and future inventories of attractive land positions. We have continued to focus on maintaining an appropriate balance of home and land inventories in relation to anticipated future demand, as well as prudent leverage, and, as a result, we believe we are well positioned to continue to execute on our strategy to optimize stockholder returns.
Previous wording
During the year ended December 31, 2023, we generated $350.8 million in income before income tax expense, as compared to $676.9 million in the prior year. During the year ended December 31, 2023, we generated net income of $259.2 million, or $8.05 per diluted share, as compared to $525.1 million, or $15.92 per diluted share in the prior year.
Current wording
During the year ended December 31, 2024, we generated $440.1 million in income before income tax expense, as compared to $350.8 million in the prior year. During the year ended December 31, 2024, we generated net income of $333.8 million, or $10.40 per diluted share, as compared to $259.2 million, or $8.05 per diluted share in the prior year.
Previous wording
During the year ended December 31, 2023, we generated total homebuilding revenues of $3.6 billion, as compared to $4.4 billion in the prior year. During the year ended December 31, 2023, we delivered 9,568 homes with an average sales price of $376.7 thousand. The number of homes delivered decreased by 9.7%as compared to the prior year, primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022. Average sales price decreased 9.2% as compared to the prior year.
Current wording
During the year ended December 31, 2024, we generated total revenues of $4.4 billion, as compared to $3.7 billion in the prior year, driven primarily by increased home sales revenue from increased selling communities and increased average sales prices. During the year ended December 31, 2024, we delivered 11,007 homes with an average sales price of $390.9 thousand. The number of homes delivered increased by 15.0%as compared to the prior year, representing growth across all of our segments. Average sales price increased 3.8% as compared to the prior year. During the year ended December 31, 2024, net new contracts increased 20.9% to 10,676 as compared to the prior year.
Previous wording
We ended 2023 with no amounts outstanding under our revolving line of credit, $226.2 million of cash and cash equivalents, $101.8 million of cash held in escrow, and a net homebuilding debt to net capital ratio of 22.4%, a decrease from 23.5% as of December 31, 2022. During the year ended December 31, 2023, we paid quarterly cash dividends to our stockholders of $0.23 per share, and aggregate cash dividends of $0.92 per share, a 15% increase from the quarterly dividends paid during the year ended December 31, 2022 of $0.20 per share, or $0.80 per share in the aggregate. We have continued to strategically manage our lot pipeline, resulting in 73,720 lots owned and controlled at December 31, 2023, a 38.8% increase as compared to December 31, 2022.
Current wording
We ended 2024 with $150.0 million of cash and cash equivalents and $3.0 million of cash held in escrow. We had $135.5 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 30.3% and a net homebuilding debt to net capital ratio of 27.4%. During the year ended December 31, 2024, we paid quarterly cash dividends to our stockholders of $0.26 per share, and aggregate cash dividends of $1.04 per share, a 13% increase from the quarterly dividends paid during the year ended December 31, 2023 of $0.23 per share, or $0.92 per share in the aggregate. We have continued to strategically manage our lot pipeline, resulting in 80,632 lots owned and controlled at December 31, 2024, a 9.4% increase as compared to December 31, 2023.
Previous wording
(1)This is a non-GAAP financial measure and should not be used as a substitute for the Company’s operating results prepared in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information within our “Homebuilding Gross Margin” and “Non-GAAP Financial Measures” sections in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Current wording
(1)This is a non-GAAP financial measure and should not be used as a substitute for our operating results prepared in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information within our“—Homebuilding Gross Margin” and“—Non-GAAP Financial Measures” sections in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Previous wording
(2)Homebuilding gross margin percentage is inclusive of $1.9 million in impairment charges for the year ended December 31, 2023 and $10.1 million in impairment charges for the year ended December 31, 2022, included within inventory impairment on our consolidated statements of operations. See Note 13 – Fair Value Disclosures in the Notes to the Consolidated Financial Statements for further detail.
Current wording
(2)Homebuilding gross margin percentage is inclusive of $8.8 million in impairment charges for the year ended December 31, 2024 and $1.9 million in impairment charges for the year ended December 31, 2023, included within inventory impairment on our consolidated statements of operations. See Note 14 – Fair Value Disclosures in the Notes to the Consolidated Financial Statements for further detail.
Previous wording
During the year ended December 31, 2023, our West segment generated income before income tax expense of $89.5 million, a 59.0% decrease over the prior year, which was primarily driven by a decrease in home sales revenue of $407.5 million. The revenue decrease during the year ended December 31, 2023 was primarily driven by a 28.8% decrease in the number of home delivered and a 12.8% decrease in the average sales price per home. The decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and the average sales price decrease was driven by the mix of deliveries within individual communities and pricing to market within individual communities. For the year ended December 31, 2023, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
Current wording
During the year ended December 31, 2024, our West segment generated income before income tax expense of $142.4 million, a 59.1% increase over the prior year, which was primarily driven by an increase in revenue of $234.6 million and an increase in homebuilding gross margin. The revenue increase during the year ended December 31, 2024 was primarily driven by a 26.8% increase in the number of home delivered and a 6.6% increase in the average sales price per home. The increase in the number of homes delivered was primarily driven by an increase in the number of homes under construction, and the average sales price increase was driven by the mix of deliveries within individual communities. Homebuilding gross margin was 23.5% for the year ended December 31, 2024, which improved 180 basis points from 21.7% in the prior year period, primarily driven by the mix of deliveries within individual communities.
Previous wording
During the year ended December 31, 2023, our Mountain segment generated income before income tax expense of $114.0 million, a 40.8% decrease over the prior year, which was primarily driven by a decrease in home sales revenue of $175.2 million. The revenue decrease during the year ended December 31, 2023 was primarily driven by a 5.4% decrease in the number of home delivered and a 10.5% decrease in the average sales price per home. The decrease in the number of homes delivered was primarily driven by fewer homes available for delivery given a decrease in home starts during the latter half of 2022, and the average sales price decrease was driven by the mix of deliveries within individual communities and pricing to market within individual communities. For the year ended December 31, 2023, the decrease in the percentage of income before income tax expense to home sales revenue was primarily a result of (1) decreased revenue on a partially fixed cost base and (2) decreased gross margins on home sales.
Current wording
During the year ended December 31, 2024, our Mountain segment generated income before income tax expense of $129.9 million, a 14.0% increase over the prior year, which was primarily driven by an increase in revenue of $110.2 million, and an increase in homebuilding gross margin. The revenue increase during the year ended December 31, 2024 was primarily driven by a 6.7% increase in the number of home delivered and a 4.9% increase in the average sales price per home. The increase in the number of homes delivered was primarily driven by an increase in the number of homes under construction, and the average sales price increase was driven by the mix of deliveries within individual communities. Homebuilding gross margin was 20.6% for the year ended December 31, 2024, which improved 40 basis points from 20.2% in the prior year period, primarily driven by the mix of deliveries within individual communities.
Previous wording
During the year ended December 31, 2023, our Corporate segment generated a loss of $134.0 million, as compared to a loss of $102.7 million during 2022. The increase in loss was primarily driven by an increase in compensation costs during the year ended December 31, 2023.
Current wording
During the year ended December 31, 2024, our Corporate segment generated a loss of $127.9 million, as compared to a loss of $134.0 million during 2023. The decrease in loss was primarily due to the sale ofone multi-family rental property, resulting in a $23.3 million gain on sale reflected in other income (expense) on our consolidated statements of operations. This gain was offset by$9.9 million impairment charge related to other investments during year ended December 31, 2024, as well as a reduction in interest income as compared to the prior year.
Previous wording
Homebuilding gross margin represents home sales revenues less cost of home sales revenues and inventory impairment, if applicable. Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased to 21.2% for the year ended December 31, 2023, as compared to 24.5% for the year ended December 31, 2022. This decrease was primarily driven by deliveries during the period that carried higher incentives.
Current wording
Homebuilding gross margin represents home sales revenues less cost of home sales revenues and inventory impairment, if applicable. Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, increased to 21.5% for the year ended December 31, 2024, as compared to 21.2% for the year ended December 31, 2023. The increase was primarily driven by deliveries during the prior year period that carried higher incentives.
Previous wording
In the following table, we calculate our homebuilding gross margin, as adjusted to exclude inventory impairment, if applicable, and interest in cost of home sales revenues.
Current wording
In the following table, we calculate our homebuilding gross margin, as adjusted to exclude inventory impairment, if applicable, and interest in cost of home sales revenues, and further adjusted to exclude the effect of purchase price accounting for acquired work in process inventory, if applicable. See Note 3 Business Combinationsin the Notes to the Consolidated Financial Statements for additional discussion regarding our methodology for estimating the fair value of acquired work in process inventory.
Previous wording
(1)This non-GAAP financial measure should not be used as a substitute for the Company’s operating results in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information under “—Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Current wording
(1)This non-GAAP financial measure should not be used as a substitute for our operating results in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information under “—Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
Previous wording
For the year ended December 31, 2023, our adjusted homebuilding gross margin percentage excluding inventory impairment, and interest in cost of home sales revenues, was 22.5% as compared to 26.0% for 2022. We believe the above information is meaningful as it isolates the impact that inventory impairment (if applicable) and acquisitions (if applicable) have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to previous periods and our competitors.
Current wording
For the year ended December 31, 2024, our adjusted homebuilding gross margin percentage excluding inventory impairment, interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory was 23.3% as compared to 22.5% for 2023. We believe the above information is meaningful as it isolates the impact that inventory impairment (if applicable), indebtedness, and acquisitions (if applicable) have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to previous periods and our competitors.
Previous wording
Our selling, general and administrative expense increased $16.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. This increase was primarily attributable to an increase in compensation costs and increased headcount due toincreased active community count during 2023. As a percentage of home sales revenue, our selling, general and administrative expense increased 260 basis points during the year ended December 31, 2023 as compared to the year ended December 31, 2022, driven primarily by higher commission rates compared to the prior year period and decreased revenue on a partially fixed cost base.
Current wording
Our selling, general and administrative expense increased $69.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily attributable to an increase in internal and external commission expense associated with the increase in home sales revenue and increased compensation and other costs due to increased active community count, and partially offset by decreased stock compensation expense. As a percentage of home sales revenue, our selling, general and administrative expense decreased 40 basis points during the year ended December 31, 2024, driven primarily by increased revenue on a partially fixed cost base.
Previous wording
Our income tax expense for the year ended December 31, 2023 was $91.6 million, or 26.1% of income before income tax expense, as compared to $151.8 million, or 22.4% of income before income tax expense, for the year ended December 31, 2022.
Current wording
Our income tax expense for the year ended December 31, 2024 was $106.2 million, or 24.1% of income before income tax expense, as compared to $91.6 million, or 26.1% of income before income tax expense, for the year ended December 31, 2023.
Previous wording
Our effective tax rate of 26.1% for the year ended December 31, 2023 is comprised of our statutory federal and blended state rate of 24.7%, partially offset by certain permanent differences between taxable income and GAAP income before tax expense. These differences include disallowed deductions for executive compensation offset by estimated federal energy home credits for current year home deliveries and other items, which combined resulted in a net increase of 1.4%.
Current wording
Our effective tax rate of 24.1% for the year ended December 31, 2024 is comprised of our statutory federal and blended state rate of 24.5%, partially offset by certain permanent differences between taxable income and GAAP income before tax expense. These differences include disallowed deductions for executive compensation offset by estimated federal energy home credits for current year home deliveries and other items, which combined resulted in a net decrease in our effective tax rate of 0.4%.
Previous wording
Our effective rates for the years ended December 31, 2023 and 2022 were impacted by benefits of $2.6 million and $18.3 million, respectively, as a result of federal energy efficient home credits. The Inflation Reduction Act of 2022 (“IRA”) extended the energy efficient home credit beginning January 1, 2023, requiring a more rigorous certification process than previous years and provides a $2,500 or $5,000 tiered credit for new single-family homes meeting designated “Energy Star” or “Zero Energy” program requirements, respectively.
Current wording
Our effective rates for the years ended December 31, 2024 and 2023 were impacted by benefits of $6.6 million and $2.6 million, respectively, as a result of federal energy efficient home credits. The Inflation Reduction Act of 2022 (“IRA”) extended the energy efficient home credit beginning January 1, 2023, requiring a more rigorous certification process than previous years and provides a $2,500 or $5,000 tiered credit for new single-family homes meeting designated “Energy Star” or “Zero Energy” program requirements, respectively.
Previous wording
Total assets increased by $365.6 million, or 9.7%, to $4.1 billion at December 31, 2023, as compared to $3.8 billion at December 31, 2022, primarily as a result of changes in our inventory balances within our homebuilding segments related to timing of home and land development construction activities and an increase in the number of homes under construction, as well as an increase in mortgage loans held for sale andassets associated with development of multi-family rental properties.
Current wording
Total assets increased by $393.1 million, or 9.5%, to $4.5 billion at December 31, 2024, as compared to $4.1 billion at December 31, 2023, primarilyas a result of changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities and an increase in the number of homes under construction.
Previous wording
Of our total lots owned and controlled as of December 31, 2023, 41.5% were owned and 58.5% were controlled, as compared to 60.5% owned and 39.5% controlled as of December 31, 2022.
Current wording
During the year ended December 31, 2024, we continued to strategically increase our lot pipeline, including both organically and through acquisitions, resulting in 80,632 lots owned and controlled at December 31, 2024, compared to 73,720 at December 31, 2023. Of our total lots owned and controlled as of December 31, 2024, 44.3% were owned and 55.7% were controlled, as compared to 41.5% owned and 58.5% controlled as of December 31, 2023.
Previous wording
Net new home contracts (new home contracts net of cancellations) for the year ended December 31, 2023 increased by 1,075 homes, or
Current wording
Net new home contracts (new home contracts net of cancellations) for the year ended December 31, 2024 increased by 1,848 homes, or 20.9%, to 10,676 as compared to 8,828 for the year ended December 31, 2023. These increases were primarily due to more homes available for sale, and supported by underlying solid demand for affordable new homes.
Previous wording
Our overall monthly “absorption rate” (the rate at which home orders are contracted, net of cancellations) for the years ended December 31, 2023 and 2022 by segment is included in the table below:
Current wording
Our overall average monthly “absorption rate”(calculated as monthly net new home contracts divided by average selling communities) for the years ended December 31, 2024 and 2023 by segment is included in the table below:
Previous wording
Our selling communities increased by 43 communities to 251 communities at December 31, 2023, as compared to 208 communities at December 31, 2022. This 20.7% increase was a result of an increased land pipeline that resulted in new community openings in excess of community closeouts during 2023.
Current wording
Our selling communities increased by 71 communities to 322 communities as of December 31, 2024, as compared to 251 communities at December 31, 2023. This 28.2% increase was a result of an increased land pipeline that resulted in new community openings in excess of community closeouts during the year ended December 31, 2024, and includes our acquisition of Anglia, which added 26 new communities in our Texas segment at acquisition.
Previous wording
Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. At December 31, 2023, we had 1,070 homes in backlog with a total value of $400.8 million, which represents decreases of 40.9% and 40.3%, respectively, as compared to 1,810 homes in backlog with a total value of $671.4 million at December 31, 2022. The decrease in backlog dollar value is primarily attributable to the decrease in backlog units.
Current wording
Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. As of December 31, 2024, we had 850 homes in backlog, which represents a decrease of 20.6% as compared to 1,070 homes in backlog at December 31, 2023, with a total value of $351.2 million, as compared to $400.8 million at December 31, 2023. Backlog dollar value decreased due to the decrease in the number of backlog units, and was partially offset by a 10.3% increase in the average sales price of backlog units, largely due to mix.
Previous wording
Our liquidity, consisting of our cash and cash equivalents, cash held in escrow and revolving credit facility availability, was $1.1 billion as of December 31, 2023, compared to $1.2 billion as of December 31, 2022.
Current wording
Our liquidity, consisting of our cash and cash equivalents, cash held in escrow and revolving line of credit availability, was $918.0 million as of December 31, 2024, compared to $1.1 billion as of December 31, 2023.
Previous wording
Our principal uses of capital for the year ended December 31, 2023 were our land purchases, land development, home construction, and the payment of routine liabilities.
Current wording
Our principal uses of capital for the year ended December 31, 2024 were our land purchases, land development, home construction, the acquisition of Anglia and Landmark, share repurchases, dividends, and the payment of routine liabilities.
Previous wording
We use funds generated by operations, available borrowings under our revolving credit facility, and proceeds from issuances of debt or equity, including our current at-the-market facility, to fund our short term working capital obligations and fund our purchases of land, as well as land development, home construction activities, and other cash needs.
Current wording
We use funds generated by operations, available borrowings under our revolving line of credit, and proceeds from issuances of debt or equity to fund our short-term working capital obligations and fund our purchases of land, as well as land development, home construction activities, and other cash needs. We had $135.5 million outstanding under our revolving line of credit as of December 31, 2024, as compared to no amounts outstanding as of December 31, 2023. This increase in borrowings was primarily driven by an increased community count and an increase in our investment in homes under construction during 2024, as well as our acquisitions of Anglia and Landmark.
Previous wording
Beyond the next twelve months, we believe that our principal uses of capital will be land and inventory purchases and other expenditures, as well as principal and interest payments on our long-term debt obligations. We believe that we will be able to fund our long-term liquidity needs with cash generated from operations and cash expected to be available from our revolving line of credit or through accessing debt or equity capital, as needed or appropriate, although no assurance can be provided that such additional debt or equity capital will be available, or on favorable terms, especially in light of rising interest rates. In a higher interest rate environment, we may incur additional interest expense on borrowings that bear floating interest rates, such as our revolving line of credit, repurchase facilities, and construction loan agreements. To the extent these sources of capital are insufficient to meet our needs, we may also conduct additional public or private offerings of our securities, refinance debt, or dispose of certain assets to fund our operating activities and capital needs.
Current wording
Beyond the next twelve months, we believe that our principal uses of capital will be land and inventory purchases and other expenditures, as well as principal and interest payments on our long-term debt obligations. We believe that we will be able to fund our long-term liquidity needs with cash generated from operations and cash expected to be available from our revolving line of credit or through accessing debt or equity capital, as needed or appropriate, although no assurance can be provided that such additional debt or equity capital will be available, or on favorable terms, especially if interest rates remain high. In a higher interest rate environment, we may incur additional interest expense on borrowings that bear floating interest rates, such as under our revolving line of credit, repurchase facilities, and construction loan agreements. To the extent these sources of capital are insufficient to meet our needs, we may also conduct additional public or private offerings of our securities, refinance debt, or dispose of certain assets to fund our operating activities and capital needs.
Previous wording
(1)Principal payments in accordance with our revolving line of credit, mortgage repurchase facilities and long-term debt agreements, and interest payments for outstanding long-term debt obligations. Interest on variable rate debt was calculated using the interest rate as of December 31, 2023. See Note 10 – Debt in the Notes to the Consolidated Financial Statements for further detail.
Current wording
(1)Consists of principal payments in accordance with our revolving line of credit, mortgage repurchase facilities and long-term debt agreements, and interest payments for outstanding long-term debt obligations. Interest on variable rate debt was calculated using the interest rate as of December 31, 2024. See Note 11 – Debt in the Notes to the Consolidated Financial Statements for further detail.
Previous wording
As of December 31, 2023, we had outstanding purchase contracts and option contracts for 43,097 lots totaling approximately $1.8 billion and we had $51.4 million of deposits for land contracts, of which $18.3 million were non-refundable cash deposits pertaining to land contracts. For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.
Current wording
As of December 31, 2024, we had outstanding purchase contracts and option contracts for 44,876 lots totaling approximately $2.7 billion and we had $92.5 million of deposits for land contracts, of which $54.7 million were non-refundable cash deposits pertaining to land contracts. For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.
Previous wording
One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. Our outstanding indebtedness is described in detail in Note 10 – Debt in the Notes to the Consolidated Financial Statements. We are required to meet certain covenants, and as of December 31, 2023, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit and mortgage repurchase facilities. See Note 10 – Debt in the Notes to the Consolidated Financial Statements for further detail.
Current wording
One of our principal liquidity needs is the payment of principal and interest on our outstanding indebtedness. Our outstanding indebtedness is described in detail in Note 11 – Debt in the Notes to the Consolidated Financial Statements. We are required to meet certain covenants, and as of December 31, 2024, we were in compliance with all such covenants and requirements under the agreements governing our revolving line of credit, mortgage repurchase facilities, and construction loan agreements. See Note 11 – Debt in the Notes to the Consolidated Financial Statements for further detail.
Previous wording
(1)The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes.
Current wording
(1)The carrying value of the senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes.
Previous wording
(2)As of December 31, 2023, other financing obligations included $24.7 million related to insurance premium notes and certain secured borrowings, as well as $44.9 million outstanding under construction loan agreements, as described below. As of December 31, 2022, other financing obligations included $20.7 million related to insurance premium notes and certain secured borrowings, as well as $7.4 million outstanding under construction loan agreements.
Current wording
(2)As of December 31, 2024, other financing obligations included $11.0 million related to insurance premium notes and certain secured borrowings, as well as $102.4 million outstanding under construction loan agreements, as described below. As of December 31, 2023, other financing obligations included $24.7 million related to insurance premium notes and certain secured borrowings, as well as $44.9 million outstanding under construction loan agreements.
Previous wording
Certain wholly owned subsidiaries of Century Living, LLC are parties to construction loan agreements entered into during 2022 and the first quarter of 2023 with various banks, (which we collectively refer to as “the lenders”). The three construction loan agreements collectively provide that we may borrow up to an aggregate of $187.6 million from the lenders for purposes of construction of multi-family projects in Colorado, with advances made by the lenders upon the satisfaction of certain conditions. Borrowings under the construction loan agreements bear interest at various rates, including a fixed rate, and floating interest rates per annum equal to the Secured Overnight Financing Rate (which we refer to as “SOFR”) and the Bloomberg Short-term Bank Yield Index, plus an applicable margin. The outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates through March 17, 2028, with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied. The construction loan agreements contain customary affirmative and negative covenants (including covenants related to construction completion, and limitations on the use of loan proceeds, transfers of land, equipment, and improvements), as well as customary events of default. Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the consolidated balance sheets while the related multi-family rental properties are being actively developed.
Current wording
Certain wholly owned subsidiaries of Century Living, LLC are parties to construction loan agreements with various banks (whichwe collectively refer to as “the lenders”). These construction loan agreements collectively provide that we may borrow up to an aggregate of $139.6 million from the lenders for purposes of construction of multi-family projects in Colorado, with advances made by the lenders upon the satisfaction of certain conditions. Borrowings under the construction loan agreements bear interest at various rates, including a fixed rate and floating interest rates per annum equal to the Secured Overnight Financing Rate (which we refer to as “SOFR”) plus an applicable margin. The outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates from March 17, 2026 through March 17, 2028, with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied. The construction loan agreements contain customary affirmative and negative covenants (including covenants related to construction completion, and limitations on the use of loan proceeds, transfers of land, equipment, and improvements), as well as customary events of default. Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the consolidated balance sheets while the related multi-family rental properties are being actively developed.
Previous wording
As of December 31, 2023 and 2022, $44.9 million and $7.4 million were outstanding under the construction loan agreements, respectively, with borrowings that bore a weighted average interest rate of 7.4% and 5.6% during the year ended December 31, 2023 and 2022, respectively, and we were in compliance with all covenants thereunder.
Current wording
As of December 31, 2024 and 2023, $102.4 million and $44.9 million were outstanding under the construction loan agreements, respectively, with borrowings that bore a weighted average interest rate of 6.5% and 7.4% as of December 31, 2024 and 2023, respectively, and we were in compliance with all covenants thereunder.
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Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
We are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 18 states. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land. We build and sell homes under our Century Communities and Century Complete brands.
Previous report — wording carried elsewhere
We intendto finance any stock repurchases through available cash and ourrevolving credit facility. Repurchases alsomaybe made under a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased whenwe otherwisemaybe precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The stock repurchase program has no expiration date and may be extended, suspended or discontinued by our Board of Directors at any time without notice atour discretion. All shares of common stock repurchased under the program will be cancelled and returned to the status of authorized but unissued shares of common stock.