William Lyon Homes (WLH) 8-K Regulation FD Disclosure

10

th

Annual J.P. Morgan 2017 Homebuilding

& Building Products Conference

May 2017

Exhibit 99.1

Forward Looking Statements, Non-GAAP Information and Market Data

1

Certain statements contained in this presentation that are not historical information may constitute “forward-looking statements” as defined by the

Private Securities Litigation Reform Act of 1995, including, but not limited to, forward-looking statements related to: anticipated new home

deliveries, revenue and pre-tax income, margin performance, operating and financial results for the 2017 fiscal year, community count growth and

project openings and timing, new home pricing, market and industry trends, the continued housing market recovery, leverage ratios and reduction

strategies, debt costs and return and sufficiency of land supply. The forward-looking statements involve risks and uncertainties and actual results

may differ materially from those projected or implied. The Company makes no commitment, and disclaims any duty, to update or revise any

forward-looking statements to reflect future events or changes in these expectations. Further, certain forward-looking statements are based on

assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among

others: adverse weather conditions; the availability of labor and homebuilding materials and increased construction cycle times; our financial

leverage and level of indebtedness and any inability to comply with financial and other covenants under our debt instruments; continued volatility

and worsening in general economic conditions either internationally, nationally or in regions in which we operate; increased outside broker costs;

increased costs of homebuilding materials; changes in governmental laws and regulations and increased costs, fees and delays associated

therewith; potential changes to the tax code; worsening in markets for residential housing; the impact of construction defect, product liability and

home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; decline

in real estate values resulting in impairment of our real estate assets; volatility in the banking industry, credit and capital markets; terrorism or other

hostilities involving the United States; building moratorium or "slow-growth" or "no-growth" initiatives that could be implemented in states in which

we operate; changes in mortgage and other interest rates; conditions in the capital, credit and financial markets, including mortgage lending

standards and the availability of mortgage financing; changes in generally accepted accounting principles or interpretations of those principles;

cancellations and our ability to realize our backlog; limitations on our ability to utilize our tax attributes; the timing of receipt of regulatory approvals

and the opening of projects; the availability and cost of land for future development; and additional factors discussed under the sections captioned

"Risk Factors" included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not

exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the

impact of such risk factors on our business.

This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. GAAP. These non-GAAP measures

are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of

non-GAAP measures to GAAP measures is contained in the Appendix to this presentation. A copy of the press release reporting the Company’s

financial results for the three months ended March 31, 2017 is available on the Company's website at www.lyonhomes.com.

This presentation contains market data and industry forecasts and projections prepared by independent research providers and consulting firms. 

Any forecasts prepared by these sources are based on data (including third-party data), models and experiences of various professionals, and are

based on various assumptions (including the completeness and accuracy of third-party data), all of which are subject to change without notice. 

We have not independently verified the data obtained from these sources.  Forecasts and other forward-looking information obtained from these

sources are subject to the same qualifications and additional uncertainties regarding other forward-looking statements in this presentation, as set

forth above.

Management Presenters

Matthew R. Zaist

–

President and Chief Executive Officer

Colin T. Severn

–

Senior Vice President and Chief Financial Officer

2

California

34%

Oregon

22%

Washington

12%

Nevada

14%

Colorado

9%

Arizona

9%

California

25%

Oregon

26%

Washington

11%

Nevada

11%

Colorado

9%

Arizona

18%

William Lyon Homes “At-a-Glance”

One of the largest Western U.S. regional

homebuilders with operations in California,

Arizona, Nevada, Colorado, Washington and

Oregon

–

More than 60 year operating history with

100,000+

homes sold

Provide a wide range of high-quality homes and

product to entry-level, first and second-time

move-up buyers, as well as luxury product.

Leading market share positions in attractive

housing markets

Consistent growth expected to continue in 2017

More than 17,600

lots owned or controlled as of

March 31, 2017

90 average selling communities in April 2017

3

High growth Western U.S. market focus

LTM Q1’17 Homebuilding Revenue and Deliveries

Revenue

Deliveries (Units)

$1.4 billion

$1.4 billion

2,737 homes

2,737 homes

Seattle

Washington

East Bay

California

Nevada

Phoenix

Las Vegas

Arizona

Los Angeles

South Bay

Orange County

Colorado

Fort

Collins

Denver

Oregon

Inland Empire

San Diego

$364

$532

$731

$1,586

Entry

1st time

move-up

2nd time

move-up

Luxury

4

We employ a diversified product strategy, even within the

same project footprint, allowing us to serve a wide range

of buyers and to adapt quickly to strengthening or

weakening market conditions

Breadth of product and price point allows flexibility to

pursue a broader array of land acquisition opportunities

Entry Level product represented 41% of units closed in

Q1’17, up from 35% in the same period of prior year,

demonstrating our continued focus on that buyer

segment.

ASP by Buyer Type

($ in ‘000s)

Units by Buyer Type

High Quality, Diverse Product Offerings

Buyer

Type

–

Q1

2017

Homes

Closed

Price

Range

–

Q1

2017

Home

Closings

and

Backlog

Home

Closings

-

Units

Backlog

-

Units

ASP: $519k

ASP: $577k

Buyer

Type

–

Q1

2017

Ending

Backlog

$423

$571

$892

$1,495

Entry

1st time

move-up

2nd time

move-up

Luxury

ASP by Buyer Type

($ in ‘000s)

Units by Buyer Type

Entry

42%

1st  time

move-up

45%

2nd  time

move-up

9%

Luxury

4%

$300k

20%

$301k -

$450k

25%

> $600k

32%

$451k -

$600k

23%

> $600k

22%

$301k -

$450k

32%

$451k -

$600k

27%

$300k

19%

Entry

41%

2nd time

move-up

16%

Luxury

2%

1st time

move-up

41%

2017: Strong Orders

Growth and Demand

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

202

230

257

291

255

325

225

223

203

207

176

181

227

283

355

432

6

2017 Sales Volume –

Actual vs. Prior Year

Total Net Orders by Month (Units)

% y-o-y change: 

+12%         +23%         +38%         +48%

2016            2017

Avg. Sales Locations: 

72      81         67     83         67     83         68     90         72         

77         

79         

78          

76         

78        

79         

81         

Monthly Absorption Rate:

2.8    2.8        3.4     3.4       3.8    4.3        4.3    4.8         3.5       

4.2        

2.8       

2.9        

2.7        

2.7       

2.2        

2.2    

Avg. Sales Locations: 

72      81         67     83         67     83         68     90         72         

77         

79         

78          

76         

78        

79         

81         

Monthly Absorption Rate:

2.8    2.8        3.4     3.4       3.8    4.3        4.3    4.8         3.5       

4.2        

2.8       

2.9        

2.7        

2.7       

2.2        

2.2    

Average

net

sales

activity,

on

a

trailing

3

months

basis,

has

improved

38%

Y-o-Y

primarily due to an increase in absorption rate

by community as well as an increase in the overall community count.

ASP

for

homes

in

backlog

at

3/31/17

is

11%

higher

than

deliveries

ASP

in

Q1’2017.

Total Units Net Sales –

Rolling 3-Month Average

Total Backlog Last 13 Weeks

Quarterly -

$ Thousands

Total Value:

$756 Million

Sales Trends

Sales Activity

Backlog

ASP (Homes Closed)

7

Total Units:

1,318

Up 8%

Y-o-Y

Q1’17

Backlog ASP

Up 38%

Y-o-Y

CA  $167

CA  $296

CA  $328

AZ  $62

AZ  $71

AZ  $71

NV  $87

NV  $65

NV  $77

CO  $53

CO  $52

CO  $61

WA  $35

WA  $81

WA  $109

OR  $68

OR  $69

OR  $110

8

Backlog Growth

Value    $472M

Homes   

885

ASP       $533k

Q1 2016

Q1 2017

Value    $634M

Homes    1,099

ASP       $577k

Variance

$ Value    +34%

Units        +24%

ASP           +8%

4/30/2017

Value    $756M

Homes    1,318

ASP       $574k

Backlog Growth by Region

Variance

$ Value    +19%

Units        +20%

ASP           (1%)

Current Gross

Margin in

Backlog = 18%

Year over Year Comparisons

9

% y-o-y change: 

+3%                     +4%                   +9%                    +26%

% y-o-y change: 

+7%                    +7%                    +7%                   +19%

% y-o-y change: 

(4%)                      (3%)                  +2%                   +6%               

Net New Orders (Units)

Order Value (In Millions)

Average Community Count

Monthly Order Absorption Rate/Avg. Community

% y-o-y change: 

+13%                  +17%                 +17%                +35%

67

73

74

69

72

78

79

82

Q2

Q3

Q4

Q1

4.2

2.9

2.3

3.3

4.0

2.8

2.4

3.5

Q2

Q3

Q4

Q1

$374

$298

$244

$335

$424

$349

$284

$453

Q2

Q3

Q4

Q1

843

628

516

689

871

651

564

865

Q2

Q3

Q4

Q1

Order ASP ($ In Thousands)

$444   $486               $475   $536               $473   $504              $486    $523

Order ASP ($ In Thousands)

$444   $486               $475   $536               $473   $504              $486    $523

2015       2016     2017

% y-o-y change: 

+31%                   +40%                 +19%                 

(1%)

Year over Year Comparisons (continued)

10

% y-o-y change: 

+20%                 +19%              

+11%               

(8%)

Homes Closed

Homebuilding Revenue ($ Million)

Bps y-o-y change: 

(200bps)             (250bps)             (260bps)            (360bps)

Bps

y-o-y

change: 

(180bps)             (140bps)            (130bps)

(210bps)                 

Adjusted Gross Margin

Gross Margin (GAAP)

$248

$244

$397

$261

$325

$343

$473

$259

Q2

Q3

Q4

Q1

26.0%

24.7%

24.2%

24.7%

24.0%

22.2%

21.6%

21.1%

Q2

Q3

Q4

Q1

19.2%

18.0%

18.3%

17.7%

17.4%

16.6%

17.0%

15.6%

Q2

Q3

Q4

Q1

553

564

809

543

663

673

902

499

Q2

Q3

Q4

Q1

Closings ASP ($ In Thousands)

$448   $490               $433   $509               $491   $525

$481   $519

Closings ASP ($ In Thousands)

$448   $490               $433   $509               $491   $525

$481   $519

2015       2016     2017

Significant Growth in Revenues and Closings

11

$573

$897

$1,104

$1,406

$1,650  -

$1,750

$55

$78

$87

$103

$135 -

$150

1,360

1,753

2,314

2,781

3,000 –

3,250

2013

2014

2015

2016

2017 Guidance

Expectations

Total Revenue ($ Millions)

Pre-Tax Income ($ Millions)

Home Closings

Totals by Year

(1)

Represents guidance ranges for full year 2017.

(2)

Represents guidance expectations for home sales revenue for full year 2017.

(1)

(2)

$150

$350

$450

2017

2018

2019

2020

2021

2022

2023

2024

2025

12

Senior Notes Refinance and Maturity Dates

5.75% Sr. Notes

5.875% Sr. Notes

7.0% Sr. Notes

Note: The 5.75%, 7.0% and 5.875% Senior Notes are callable beginning in April 2016, August 2017

and February 2020, respectively.

($ in millions)

New notes description: $450 million 5.875% Senior

Notes due 2025.

Interest savings of approximately $10 million annually.

Net tax effected cost associated with refinance is

approximately $14.1 million, which will return with

interest savings in approximately 17 months.

13

Drive revenue growth and profitability through community count growth and monetization of existing land supply

We own or control all of our expected 2017 and 2018 selling communities.

Maintain strict operating discipline focused on earnings and cash flow

Optimize balance between opportunistic price increases with homebuyer demand

Continue focus on entry level buyer and grow on 55+ target demographic with the Ovation Active Lifestyle Communities

Enhance our leading positions in current high growth Western U.S. markets

Decentralized management approach allows for detailed knowledge of local market conditions

Maximize our long-term and strong reputation for superior quality and customer service

Prudent focus on investor returns and balance sheet optimization

Substantial cash flow and earnings growth to reduce net leverage

Remain disciplined in land acquisitions to support future growth

Utilize long-standing local relationships with land sellers, master planned community developers and other builders

Employ land strategy that is dynamic, nimble and responsive to prevailing and projected future market conditions

Continued Execution of Our Tested Strategy

Divisional Market

Summaries

15

Southern California –

Active and Future Communities

The Southern California Division comprises 1,682 owned and controlled lots at March 31, 2017.

WLH Headquarters

Current Projects

Future Projects

Lyon Perspective

•

Sales: YOY sales increase of 74%

•

Pricing

Power

–

2.5%

increase

in

the

first

four

months of

2017

•

Key Drivers

•

Markets

with

limited

supply

of

new

homes

•

Driving affordability

•

Coastal ASP in Backlog at $776,000 vs. Market

ASP of $840,000

•

Inland

Empire

–

43%

attached

with

an

ASP

of

$371,000

•

Diverse offering with ASP in Backlog Range:

$341,000

-

$4,050,000

Third

Party

Market

Data

–

JBREC

and

Ryness

•

Employment Growth to Permit Ratio at 3.3 (Past 7 year

annual average of 4.2)

•

New and Resale Supply at 3 months vs. normal at 6 months

•

YOY New Home Sales up 6%

•

Pricing forecasted to be 5.3% for 2017

16

Northern California –

Active and Future Communities

The Northern California Division comprises 894 owned and controlled lots at March 31, 2017.

Lyon Perspective

Core Bay Area

•

Sales: YOY sales and rates of sales increase of 86%

•

Pricing

Power

–

2.5%

increase

in

the

first

four

months

of

2017

•

Key Drivers

•

Markets

with

limited

supply

of

new

homes

•

Bayshores

–

Driving Affordability:

•

ASP in Backlog of $843,000

•

South Bay Area Existing Median Home Price of $924,000

•

Access to transportation and job centers

Third

Party

Market

Data

–

JBREC

Bay Area

•

Employment Growth to Permit Ratio at 4 (Past 7 year annual average

of 4.2)

•

New and Resale Supply at 0.76 and 0.9 months, respectively

•

Existing Median Home Price is $924,400

•

Pricing forecasted to be 4.9% for 2017

Future Projects

Current Projects

17

Arizona –

Active and Future Communities

The Arizona Division comprises 4,838 owned and controlled lots at March 31, 2017.

Lyon Perspective

•

Sales: YOY sales and rates of sales increase of 23%

•

Pricing

Power

–

2%

increase

in

the

first

four

months

of

2017

•

Key Drivers

•

Affordability

–

ASP

in

Backlog

of

$298,000

vs.

MSA

average of $312,600

•

Quality Land Supply and Master Planned Driven:

•

Total Lots Owned of 4,932

•

Meridian –

2,247 lots with 4 actively selling

communities and 4

in planning

•

Rancho Mercado –

1,928 lots available in products

opening for sale in 2018

•

Currently planning for 6 product types

Third

Party

Market

Data

–

JBREC

•

Employment Growth to Permit Ratio at 1.9 (Past 7 year average

of 2.6)

•

Supply constrained:

•

18,746 forecasted permits vs. 37 year average of 24,000

•

Existing Home Supply shrinking. Currently at 2.7 months

•

Pricing forecasted to be 5.8% for 2017

Current Projects

Future Projects

18

Nevada –

Active and Future Communities

The Nevada Division comprises 3,023 owned and controlled lots at March 31, 2017.

30 miles

Pahrump

Lyon Perspective

•

Sales: YOY sales and rates of sales up 10%

•

Pricing

Power

–

4%

increase

in

the

first

four

months

of

2017

•

Key Drivers

•

Diverse offering appealing to broad buyer base

•ASP

in

Backlog

Range:

$220,000

-

$1,641,000

•

The Future –

Focused on two large groups of the

population

-

Millennials

and

Boomers

•

Affinity –

The Millennials:

•

485 attached homes, 4 product types in

Summerlin

with an ASP of $390,000

•

Ovation

at

Mountain

Falls

–

The

Boomers

•

500 SFD homes, 3 product types with

an ASP of $325,000

Third

Party

Market

Data

–

JBREC

•

Employment Growth to Permit Ratio at 1.8 (Past 7 year

average of 2.4)

•

Supply constrained:

•

9,000 forecasted permits vs. 30 year average of

15,000

•

Existing Home Supply shrinking. Currently at 3

months

•

Our most affordable market with affordability at its historical

median

•

Pricing forecasted to be 6.7% for 2017

Current Projects

Future Projects

19

Colorado –

Active and Future Communities

The Colorado Division comprises 1,519 owned and controlled lots at March 31, 2017.

Lyon Perspective

•

Q1

–

Product

repositioning

60%

of

existing

communities

•

Sales: YOY sales down 8% due to product repositioning

•

April Sales up 3% YOY

•

Pricing

Power

–

3%

increase

in

the

first

four

months

of 2017

•

Key Drivers

•

The

Future

–

High

Quality

MSA

focus

and

Driving

for

greater

Affordability

•

Avion

at Denver Connection:

•

694 attached and detached homes, 4 product types

in Denver with ASP in backlog of $309,000

•

High

Quality

MSA’s

–

Main

and

Main

•

Denver, Aurora, Erie

Third

Party

Market

Data

–

JBREC

•

Employment Growth to Permit Ratio forecasted for 2017 to be 1.2 (Past

7 year average of 2.5)

•

Job Creation continues to grow 28,600 jobs projected in Denver in 2017

•

Supply constrained:

•

10,190 forecasted permits vs. 20 year average of 13,000

•

Existing Home Supply at 0.9 months

•

Pricing forecasted to be 7.5% for 2017

Current Projects

Future Projects

20

Oregon –

Active and Future Communities

The Oregon Division comprises 3,351 owned and controlled lots at March 31, 2017.

Nike

Xerox

FLIR

Mentor

Graphics

Oregon Health &

Science Foundation

Intel

Intel

Hawthorne

Kaiser

Key Employers

Downtown

Current Projects

Future Projects

Lyon Perspective

•

#1 in Market Share in Portland

•

Sales: YOY sales increase of 9.4%

•

Pricing

Power

–

3.1%

increase

in

the

first

four

months

of

2017

•

Key Drivers

•

Strong Key Assets in 3 West Side Portland Masterplans

•

Villebois

–

626

owned/controlled

lots

•

Bethany

–

694

owned/controlled

lots

•

River

Terrace

–

1,754

owned/controlled

lots

•

Creating value through community vs. neighborhood

•

Diverse

offering

with

4

–

6

product

types

per

community

•

25% Attached, 75% detached

Third

Party

Market

Data

–

JBREC

•

Employment Growth to Permit Ratio at 1.4 (Past 7 year average

of 2.5)

•

Income growth continues to be strong at 4.4% forecasted for

2017 and up 21.6% since 2010

•

New and Resale Supply at 1.2 months

•

Pricing forecasted to be 7.4% for 2017

21

Washington –

Active and Future Communities

The Washington Division comprises 2,333 owned and controlled lots at March 31, 2017.

Key Employers

Downtown

Boeing

Amazon

Boeing

Costco

Microsoft

Current Projects

Future Projects

Lyon Perspective

•

Sales: YOY sales increase of 100%

•

Pricing Power –

3.6% increase in the first four months of 2017

•

Key Drivers

•

Outstanding High Quality Markets with limited supply

•

Driving affordability –

ASP in Backlog at $614,000 vs.

Market ASP of $651,000

•

Diverse offering with ASP in Backlog Range: $274,990 -

$1,234,990

•

Diverse Product Type with 40% Attached and 60%

Detached

•

Key Assets coming to market in the back half of the year:

•

Crossroads –

Bellevue

•

Westridge

Single

Family

–

Issaquah

Highlands

•

High Point –

Seattle

•

Ovation at Oak Tree Preserve –

Lacey

Third Party Market Data –

JBREC

•

Employment

Growth

to

Permit

Ratio

at

2.4

–

consistent

with

past 5

years

•

New and Resale Supply at 0.6 months

•

2017 Forecasted New Home Permits to be 7,800, while New Home

Sales at 6,900

•

Pricing forecasted to be 6.5% for 2017

Starbucks

Appendix

23

William Lyon Homes’ business has continued to deliver across a number of financial and operating metrics

–

Dollar value of orders up 35% y-o-y and new home orders up 26% y-o-y.

–

Average Sales Price of homes closed up 8% y-o-y.

–

New home deliveries are down 8% y-o-y and home sales revenues down 1% y-o-y.

–

Adjusted EBITDA of $22.5 million in Q1, down 33% y-o-y.

Note: See reconciliation of non-GAAP measures in the appendix section of this presentation.

Summary of 2017 Q1 Results

3/31/2017

3/31/2016

Change

Select operating statistics

New home orders

865

689

26%

Dollar value of orders ($mm)

$452.7

$334.5

35%

New home deliveries

499

543

(8%)

ASP (homes closed, $000s)

$518.7

$481.2

8%

Summary financial information ($mm)

Home sales revenue

$258.9

$261.3

(1%)

Homebuilding gross profit

$40.4

$46.1

(12%)

Operating income

$6.3

$13.3

(53%)

Adj. Net income to common stockholders

$4.1

$9.0

(54%)

Adjusted diluted EPS ($)

$0.11

$0.24

(54%)

Adjusted EBITDA

$22.5

$33.5

(33%)

Select margins

bps

Gross margin

15.6%

17.7%

(210)

Adjusted gross margin

21.1%

24.7%

(360)

SG&A margin

13.0%

12.5%

(50)

Three months ended

Strong New Order Growth –

Dollars Trailing Twelve Months

Dollar value of new home orders of $1.5 billion TTM Q1, an increase of 21% over the prior year and up 71% over a two

year period.

Q1’17 dollar value of new orders was $453 million, up 35% over the prior year.

24

$880

$1,058

$1,158

$1,185

$1,251

$1,300

$1,351

$1,391

$1,509

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

Q4'16

Q1'17

TTM Dollar Value of Orders

($ Millions)

TTM Ending:

Up 21%

Y-o-Y

Continued Growth and Diversification Through

Monetization of High Quality Land Positions

25

Total lots owned and controlled vs. years of land supply

LTM Deliveries

-

Units

Continued diversification across markets

Lots Inventory Summary as of 3/31/17

We own 13,404 lots (76% of total) and control 4,236 lots (24% of total) as of March 31, 2017 in some of

the most dynamic and land constrained markets in the Western U.S.

LTM

Home

Revenue

-

$

Owned -

Active

Projects

Owned -

Future

Projects

Controlled

Total

Lots

Lots Inventory

  California 

         1,183

            309

         1,084

     2,576

  Arizona 

         1,793

         3,045

                -  

     4,838

  Nevada 

         1,052

         1,933

               38

     3,023

  Colorado

            461

            981

               77

     1,519

  Oregon

            890

            532

         1,929

     3,351

  Washington

            942

            283

         1,108

     2,333

Total

         6,321

         7,083

         4,236

   17,640

18,035

18,835

18,149

17,858

17,640

5.7

5.7

5.2

5.3

5.3

0

2

4

6

8

10

0

5,000

10,000

15,000

20,000

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Years of

supply

Total lots

years

California

25%

Oregon

26%

Washington

11%

Nevada

11%

Colorado

9%

Arizona

18%

California

34%

Oregon

22%

Washington

12%

Nevada

14%

Colorado

9%

Arizona

9%

26

Backlog Conversion Rate

Backlog

Conversion

Rate

-

Quarterly

82%

73%

73%

75%

68%

78%

98%

81%

82%

58%

78%

73%

75%

62%

84%

68%

Annually (Wtd. Avg.)

Quarterly

Adjusted EBITDA Reconciliation

27

Adjusted EBITDA is not a financial measure prepared in accordance with U.S. GAAP.  Adjusted EBITDA is presented herein because management believes the

presentation of adjusted EBITDA provides useful information to the Company’s investors regarding the Company’s financial condition and results of operations

because adjusted EBITDA is a widely utilized indicator of a company's operating performance.

2017

2016

(dollars in thousands)

Net (loss) income to common stockholders

$    (10,000)

$        9,014

(Benefit from) provision for income taxes

(5,630)

5,045

Interest expense

aaInterest incurred

19,424

20,261

aaInterest capitalized

(19,424)

(20,261)

Amortization of capitalized interest included in

cost of sales

11,608

11,747

Stock-based compensation

1,676

1,492

Depreciation and amortization

449

498

Non-cash purchase accounting adjustments

2,501

6,593

Cash distributions of income from

unconsolidated joint ventures

359

324

Equity in income of unconsolidated joint

ventures

(249)

(1,181)

Loss on extinguishment of debt

21,828

-

Adjusted EBITDA

$     22,542

$      33,532

Three Months Ended

March 31,

Adjusted EBITDA

Adjusted Homebuilding Gross Margin Reconciliation

28

(1) Cost of sales excluding interest and purchase accounting adjustments.

Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. GAAP. It is used by management in evaluating operating

performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe

this information is meaningful as it isolates the impact that interest and purchase accounting adjustments have on homebuilding gross margin and allows investors

to make better comparisons with our competitors.

2017

2016

(dollars in thousands)

Homes closed

499

543

Home sales revenue

$   258,854

$    261,295

Adjusted cost of sales

(1)

(204,346)

(196,831)

Adjusted gross margin

$     54,508

$      64,464

Adjusted gross margin percentage

21.1%

24.7%

Interest in cost of sales

(11,608)

(11,747)

Purchase accounting adjustments

(2,501)

(6,593)

Gross margin

$     40,399

$      46,124

Gross margin percentage

15.6%

17.7%

Three Months Ended

March 31,

Selected Financial Information

Adjusted Net Income and Adjusted Diluted EPS Reconciliation

29

Three

Months

Ended

March 31,

Adjusted Net Income and Adjusted EPS

2017

   (dollars in thousands, except share data)

Net loss available to common stockholders

(10,000)

$    

Add: Loss on extinguishment of debt

21,828

(7,752)

4,076

$        

Diluted weighted average common shares outstanding

38,360,335

0.11

$          

Net income, adjusted for loss on extinghishment of debt, net

of tax benefit

Less: Income tax benefit applicable to loss on extinguishment

  of debt

Adjusted net income excluding noncontrolling interest per

diluted share

Adjusted net income is not a financial measure prepared in accordance with U.S. GAAP.  Adjusted net income is presented herein because management believes

the presentation of adjusted net income provides useful information to the Company’s investors regarding the Company’s results of operations because adjusted

net income isolates the impact of the infrequent extinguishment fees.

Diluted weighted average common shares outstanding as presented on the Consolidated Statement of Operations excludes any potentially issuable anti-dilutive

shares due to the net loss reported for the period presented. Additional dilutive shares have been included in this calculation.