Document

Newport Beach, Calif. – November 3, 2022 – Landsea Homes Corporation (Nasdaq: LSEA) (“Landsea Homes” or the “Company”), a publicly traded homebuilder, reported financial results for the third quarter ended September 30, 2022. For the quarter, the Company reported pretax net income of $25.3 million, and net income of $20.0 million, or $0.49 per share. Prior year reported pretax net income was $13.8 million with net income of $10.8 million, or $0.23 per share. Adjusted net income (a non-GAAP measure) was $27.6 million or $0.69 per share. For the prior year period adjusted net income was $8.2 million, or $0.18 per share.

“Landsea Homes posted strong year-over-year top and bottom-line growth in the third quarter of 2022, as home sales revenue increased 56% to $326 million and earnings grew 130% to $0.49 per diluted share,” said John Ho, Chief Executive Officer of Landsea Homes. “We also continued to make progress on the margin front generating a 480 basis-point improvement to our home sales gross margin, which came in at 20.9%. Our teams did an excellent job overcoming operational obstacles and supply chain issues in the quarter, particularly our Florida division, where we experienced closing delays but no major property damage due to Hurricane Ian.”

Mr. Ho continued, “As has been widely reported, new home sales activity slowed in the third quarter, as the combination of higher interest rates and negative buyer psychology weighed on demand. These factors also led to an increase in cancellation activity in our backlog, resulting in a cancellation rate of 9% of beginning backlog for the quarter. We are proactively adjusting our sales efforts to spur demand but expect the landscape to remain uncertain until there is more clarity on the interest rate outlook.”

Mr. Ho concluded, “Despite these near-term headwinds, we remain optimistic about the long-term outlook for our industry and our company. Existing home inventory remains scarce in our markets, and we believe that we have positioned our company in markets with great long-term housing fundamentals that are expected to experience outsized job and population growth.

Total homes delivered increased 43% to 543 homes at an average sales price of $601,000 compared to 380 homes delivered at an average sales price of $550,000 in the third quarter of 2021. The increase in deliveries was attributable to the larger contribution of our Florida operations, coupled with deliveries from New York.

Net new home orders were 257 homes with a dollar value of $165.5 million, an average sales price of $644,000 and a monthly absorption rate of 1.5 sales per active community. This compares to 275 homes with a dollar value of $184.9 million, an average sales price of $673,000 and a monthly absorption rate of 2.6 sales per active community in the prior year period. The decrease in new home orders was due to slowing demand related to the significant increase in interest rates which have created uncertainty with homebuyers and impacted affordability.

Total homes in backlog increased 18% to 1,285 homes with a dollar value of $741.1 million and an average sales price of $577,000 at September 30, 2022. This compares to 1,092 homes with a dollar value of $606.2 million and an average sales price of $555,000 at September 30, 2021. The increase in units and value is due to acquired inventory from our homebuilder acquisition in January. Average sales prices in backlog increased for all of our divisions, reflecting price appreciation from earlier in the year.

Total lots owned or controlled at September 30, 2022, increased 27% to 12,410 compared to 9,756 at September 30, 2021, primarily due to the acquisition of Hanover Family Builders and additional lots under control in Texas. Additionally, we have accelerated our asset-light strategy and now control 57% of our lots compared to 43% owned.

Home sales gross margin increased to 20.9% from 16.1% in the prior year period. Adjusted home sales gross margin (a non-GAAP measure) increased to 27.2% compared to 21.4% in the prior year period. The lift was primarily due to price appreciation and an increase in gross margins within our California and Florida segments.

Net income attributable to Landsea Homes increased to $20.0 million compared to $10.8 million in the prior year period. Adjusted net income attributable to Landsea Homes (a non-GAAP measure) increased to $27.6 million compared to $8.2 million in the prior year period. Net income per share on a fully diluted basis increased to $0.49 compared to $0.23 in the third quarter of 2021. Adjusted net income per share (a non-GAAP measure) on a fully diluted basis increased to $0.69 compared to $0.18 in the third quarter of 2021.

As of September 30, 2022, the Company had total liquidity of $198.1 million consisting of cash and cash equivalents and cash held in escrow of $117.4 million and $60.7 million in availability under the Company’s $675 million unsecured revolving credit facility. Total debt was $585.1 million compared to $461.1 million at December 31, 2021.

Landsea Homes Corporation (Nasdaq: LSEA) is a publicly traded residential homebuilder based in Newport Beach, CA that designs and builds best-in-class homes and sustainable master-planned communities in some of the nation's most desirable markets. The company has developed homes and communities in New York, Boston, New Jersey, Arizona, Florida, Texas and throughout California in Silicon Valley, Los Angeles and Orange County. Landsea Homes was named the 2022 winner of the prestigious Builder of the Year award, presented by BUILDER magazine, in recognition of a historical year of transformation.

An award-winning homebuilder that builds suburban, single-family detached and attached homes, mid-and high-rise properties, and master-planned communities, Landsea Homes is known for creating inspired places that reflect modern living and provides homebuyers the opportunity to "Live in Your Element." Our homes allow people to live where they want to live, how they want to live – in a home created especially for them.

Driven by a pioneering commitment to sustainability, Landsea Homes' High Performance Homes are responsibly designed to take advantage of the latest innovations with home automation technology supported by Apple®. Homes include features that make life easier and provide energy savings that allow for more comfortable living at a lower cost through sustainability features that contribute to healthier living for both homeowners and the planet.

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business, including as they relate to anticipated effects of the business combination with LF Capital Acquisition Corporation on January 7, 2021 (the “Business Combination”). These statements constitute projections, forecasts, and forward-looking statements, and are not guarantees of performance. Landsea Homes cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Words such as “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “look” or similar expressions may identify forward-looking statements. Specifically, forward-looking statements may include statements relating to:

These forward-looking statements are based on information available as of the date of this press release and our management’s current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

These risks and uncertainties include, but not are limited to, the risk factors described by Landsea Homes in its filings with the Securities and Exchange Commission (“SEC”). These risk factors and those identified elsewhere in this press release, among others, could cause actual results to differ materially from historical performance and include, but are not limited to:

•the ability to recognize the anticipated benefits of the Acquisitions, which may be affected by, among other things, competition, the ability to integrate the combined businesses and the acquired business, and the ability of the combined business and the acquired business to grow and manage growth profitably;

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.


	September 30, 2022		December 31, 2021
	(dollars in thousands)
Assets
Cash and cash equivalents	$	110,192	$	342,810
Cash held in escrow	7,190		4,079
Restricted cash	—		443

Real estate inventories	1,179,418		844,792

Due from affiliates	5,180		4,465
Investment in and advances to unconsolidated joint ventures	—		470

Goodwill	68,639		24,457
Other assets	98,239		43,998
Total assets	$	1,468,858	$	1,265,514

Liabilities
Accounts payable	$	82,347	$	73,734
Accrued expenses and other liabilities	114,836		97,724
Due to affiliates	2,357		2,357

Warrant liability	—		9,185
Notes and other debts payable, net	585,065		461,117

Total liabilities	784,605		644,117

Commitments and contingencies

Equity
Stockholders' equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 42,110,794 issued and 40,950,043 outstanding as of September 30, 2022, 46,281,091 issued and outstanding as of December 31, 2021	4		5
Additional paid-in capital	497,078		535,345
Retained earnings	132,767		84,797
Total stockholders' equity	629,849		620,147
Noncontrolling interests	54,404		1,250
Total equity	684,253		621,397
Total liabilities and equity	$	1,468,858	$	1,265,514


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(dollars in thousands, except per share amounts)
Revenue
Home sales	$	326,496	$	208,916	$	975,269	$	603,281
Lot sales and other	9,089		5,213		45,222		21,541
Total revenues	335,585		214,129		1,020,491		624,822

Cost of sales
Home sales	258,362		175,349		770,220		511,177

Lot sales and other	10,737		3,419		40,546		16,929
Total cost of sales	269,099		178,768		810,766		528,106

Gross margin
Home sales	68,134		33,567		205,049		92,104
Lot sales and other	(1,648)		1,794		4,676		4,612
Total gross margin	66,486		35,361		209,725		96,716

Sales and marketing expenses	21,063		12,299		64,366		34,880
General and administrative expenses	21,111		16,905		70,734		45,826
Total operating expenses	42,174		29,204		135,100		80,706

Income from operations	24,312		6,157		74,625		16,010

Other income (expense), net	920		394		(793)		3,927

Equity in net income of unconsolidated joint ventures	70		168		139		814
Gain (loss) on remeasurement of warrant liability	—		7,040		(7,315)		(3,245)
Pretax income	25,302		13,759		66,656		17,506

Provision for income taxes	4,021		2,977		17,460		3,160

Net income	21,281		10,782		49,196		14,346
Net income (loss) attributable to noncontrolling interests	1,311		(15)		1,226		(41)
Net income attributable to Landsea Homes Corporation	$	19,970	$	10,797	$	47,970	$	14,387

Income per share:
Basic	$	0.49	$	0.23	$	1.10	$	0.31
Diluted	$	0.49	$	0.23	$	1.09	$	0.31

Weighted average common shares outstanding:
Basic	39,935,152		45,281,091		42,768,269		45,077,015
Diluted	40,097,269		45,329,891		42,943,871		45,146,552


	Three Months Ended September 30,
	2022					2021					% Change
	Homes	Dollar Value		ASP		Homes	Dollar Value		ASP		Homes		Dollar Value		ASP
	(dollars in thousands)
Arizona	154	$	69,690	$	453	171	$	63,464	$	371	(10)	%	10	%	22	%
California	128	118,978		930		121	110,046		909		6	%	8	%	2	%
Florida	243	103,086		424		81	30,306		374		200	%	240	%	13	%
Metro New York	11	28,132		2,557		—	—		—		N/A		N/A		N/A
Texas	7	6,610		944		7	5,100		729		—	%	30	%	29	%
Total	543	$	326,496	$	601	380	$	208,916	$	550	43	%	56	%	9	%


	Nine Months Ended September 30,
	2022					2021					% Change
	Homes	Dollar Value		ASP		Homes	Dollar Value		ASP		Homes		Dollar Value		ASP
	(dollars in thousands)
Arizona	451	$	200,881	$	445	560	$	192,808	$	344	(19)	%	4	%	29	%
California	389	342,217		880		384	346,680		903		1	%	(1)	%	(3)	%
Florida	766	318,711		416		152	55,406		365		404	%	475	%	14	%
Metro New York	43	95,758		2,227		—	—		N/A		N/A		N/A		N/A
Texas	18	17,702		983		10	8,387		839		80	%	111	%	17	%
Total	1,667	$	975,269	$	585	1,106	$	603,281	$	545	51	%	62	%	7	%


	Three Months Ended September 30,
	2022						2021						% Change
	Homes	Dollar Value		ASP		Monthly Absorption Rate	Homes	Dollar Value		ASP		Monthly Absorption Rate	Homes		Dollar Value		ASP		Monthly Absorption Rate
	(dollars in thousands)
Arizona	38	$	15,397	$	405	0.8	98	$	47,922	$	489	2.5	(61)	%	(68)	%	(17	%)	(68)	%
California	68	56,460		830		1.8	142	107,442		757		4.6	(52)	%	(47)	%	10	%	(61)	%
Florida	134	70,973		530		1.8	29	13,869		478		1.1	362	%	412	%	11	%	64	%
Metro New York	7	13,472		1,925		2.3	8	13,220		1,653		2.7	(13)	%	2	%	16	%	(15)	%
Texas(1)	10	9,172		917		1.7	(2)	2,487		N/A		(0.4)	(600)	%	269	%	—	%	(525)	%
Total	257	165,474		$	644	1.5	275	184,940		$	673	2.6	(7)	%	(11)	%	(4)	%	(42)	%


	Nine Months Ended September 30,
	2022						2021						% Change
	Homes	Dollar Value		ASP		Monthly Absorption Rate	Homes	Dollar Value		ASP		Monthly Absorption Rate	Homes		Dollar Value		ASP		Monthly Absorption Rate
	(dollars in thousands)
Arizona	310	$	154,420	$	498	2.6	531	$	213,907	$	403	4.4	(42)	%	(28)	%	24	%	(41)	%
California	357	330,705		926		3.4	422	379,979		900		4.2	(15)	%	(13)	%	3	%	(19)	%
Florida	728	350,029		481		3.0	76	35,556		468		1.6	858	%	884	%	3	%	88	%
Metro New York	20	50,662		2,533		2.2	13	26,518		2,040		2.4	54	%	91	%	24	%	(8)	%
Texas(1)(2)	17	16,268		957		0.8	(11)	(5,584)		N/A		(1.6)	(255)	%	(391)	%	N/A		(150)	%
Total	1,432	$	902,084	$	630	2.9	1,031	$	650,376	$	631	3.7	39	%	39	%	—	%	(22)	%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022	2021	% Change		2022	2021	% Change
Arizona	16.3	13.3	23	%	13.1	13.3	(2)	%
California	12.3	10.3	19	%	11.7	11.1	5	%
Florida(1)	25.3	9.0	181	%	26.9	9.6	180	%
Metro New York	1.0	1.0	—	%	1.0	0.6	67	%
Texas(1)	2.0	1.7	18	%	2.3	1.4	64	%
Total	57.0	35.3	61	%	55.0	31.1	77	%


	September 30, 2022					September 30, 2021					% Change
	Homes	Dollar Value		ASP		Homes	Dollar Value		ASP		Homes		Dollar Value		ASP
	(dollars in thousands)
Arizona	281	$	134,771	$	480	479	$	194,031	$	405	(41)	%	(31)	%	19	%
California	224	214,864		959		280	249,709		892		(20)	%	(14)	%	8	%
Florida(1)	767	374,953		489		301	118,632		394		155	%	216	%	24	%
Metro New York	2	5,591		2,796		13	26,518		2,040		(85)	%	(79)	%	37	%
Texas	11	10,914		992		19	17,347		913		(42)	%	(37)	%	9	%
Total	1,285	$	741,093	$	577	1,092	$	606,237	$	555	18	%	22	%	4	%


	September 30, 2022			September 30, 2021
	Lots Owned	Lots Controlled	Total	Lots Owned	Lots Controlled	Total	% Change
Arizona	2,302	2,191	4,493	3,842	1,246	5,088	(12)	%
California	628	1,948	2,576	1,005	1,137	2,142	20	%
Florida	2,420	1,978	4,398	806	697	1,503	193	%
Metro New York	7	—	7	50	—	50	(86)	%
Texas	18	918	936	55	918	973	(4)	%
Total	5,375	7,035	12,410	5,758	3,998	9,756	27	%

Home sales gross margin measures the price achieved on delivered homes compared to the costs needed to build the home. In the following table, we calculate gross margins adjusting for interest in cost of sales, inventory impairments (if applicable), and purchase price accounting for acquired work in process inventory (if applicable). This non-GAAP financial measure should not be used as a substitute for the Company's operating results in accordance with GAAP. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. We believe this non-GAAP measure is meaningful because it provides insight into the impact that financing arrangements and acquisitions have on our homebuilding gross margin and allows for comparability of our gross margins to competitors that present similar information.


	Three Months Ended September 30,
	2022		%		2021		%
	(dollars in thousands)
Home sales revenue	$	326,496	100.0	%	$	208,916	100.0	%
Cost of home sales	258,362		79.1	%	175,349		83.9	%
Home sales gross margin	68,134		20.9	%	33,567		16.1	%
Add: Interest in cost of home sales	10,138		3.1	%	7,262		3.5	%
Add: Inventory impairments	—		—	%	—		—	%
Adjusted home sales gross margin excluding interest and inventory impairments	78,272		24.0	%	40,829		19.5	%
Add: Purchase price accounting for acquired inventory	10,612		3.3	%	3,840		1.8	%
Adjusted home sales gross margin excluding interest, inventory impairments, and purchase price accounting for acquired inventory	$	88,884	27.2	%	$	44,669	21.4	%


	Nine Months Ended September 30,
	2022		%		2021		%
	(dollars in thousands)
Home sales revenue	$	975,269	100.0	%	$	603,281	100.0	%
Cost of home sales	770,220		79.0	%	511,177		84.7	%
Home sales gross margin	205,049		21.0	%	92,104		15.3	%
Add: Interest in cost of home sales	31,224		3.2	%	25,551		4.2	%
Add: Inventory impairments	—		—	%	—		—	%
Adjusted home sales gross margin excluding interest and inventory impairments	236,273		24.2	%	117,655		19.5	%
Add: Purchase price accounting for acquired inventory	41,162		4.2	%	10,969		1.8	%
Adjusted home sales gross margin excluding interest, inventory impairments, and purchase price accounting for acquired inventory	$	277,435	28.4	%	$	128,624	21.3	%

performance. We define Adjusted EBITDA as net income before (i) income tax expense (benefit), (ii) interest expenses, (iii) depreciation and amortization, (iv) inventory impairments, (v) purchase accounting adjustments for acquired work in process inventory related to business combinations, (vi) loss (gain) on debt extinguishment or forgiveness, (vii) transaction costs related to the Merger and business combinations, (viii) the impact of income or loss allocations from our unconsolidated joint ventures, and (ix) loss on remeasurement of warrant liability. We believe Adjusted EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest, effective tax rates, levels of depreciation and amortization, and items considered to be non-recurring. The economic activity related to our unconsolidated joint ventures is not core to our operations and is the reason we have excluded those amounts. Accordingly, we believe this measure is useful for comparing our core operating performance from period to period. Our presentation of Adjusted EBITDA should not be considered as an indication that our future results will be unaffected by unusual or non-recurring items.


	Three Months Ended September 30,
	2022		2021
	(dollars in thousands)
Net income	$	21,281	$	10,782
Provision for income taxes	4,021		2,977
Interest in cost of sales	10,150		7,282
Interest relieved to equity in net income of unconsolidated joint ventures	—		281
Interest expense	—		11
Depreciation and amortization expense	1,382		1,287
EBITDA	36,834		22,620

Purchase price accounting in cost of home sales	10,612		3,840
Transaction costs	—		328
Equity in net income of unconsolidated joint ventures, excluding interest relieved	(70)		(449)
Loss (gain) on debt extinguishment or forgiveness	—		—
Gain on remeasurement of warrant liability	—		(7,040)

Adjusted EBITDA	$	47,376	$	19,299


	Nine Months Ended September 30,
	2022		2021
	(dollars in thousands)
Net income	$	49,196	$	14,346
Provision for income taxes	17,460		3,160
Interest in cost of sales	31,276		25,648
Interest relieved to equity in net income of unconsolidated joint ventures	70		1,056
Interest expense	—		32
Depreciation and amortization expense	4,445		3,240
EBITDA	102,447		47,482

Purchase price accounting in cost of home sales	41,162		10,969
Transaction costs	1,205		4,492
Equity in net income of unconsolidated joint ventures, excluding interest relieved	(209)		(1,870)
Loss (gain) on debt extinguishment or forgiveness	2,496		(4,266)
Loss on remeasurement of warrant liability	7,315		3,245

Adjusted EBITDA	$	154,416	$	60,052

Adjusted Net Income to Landsea Homes is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating results without the effect of certain expenses that were historically pushed down by our parent

company and other non-recurring items. We believe excluding these items provides a more comparable assessment of our financial results from period to period. Adjusted Net Income to Landsea Homes is calculated by excluding the effects of related party interest that was pushed down by our parent company, purchase accounting adjustments for acquired work in process inventory related to business combinations, the impact from our unconsolidated joint ventures, loss (gain) on debt extinguishment or forgiveness, and loss on remeasurement of warrant liability, merger related transaction costs, and tax-effected using a blended statutory tax rate. The economic activity related to our unconsolidated joint ventures is not core to our operations and is the reason we have excluded those amounts. We also adjust for the expense of related party interest pushed down from our parent company as we have no obligation to repay the debt and related interest.


	Three Months Ended September 30,
	2022		2021
	(dollars in thousands, except share and per share amounts)
Net income attributable to Landsea Homes Corporation	$	19,970	$	10,797


Previously capitalized related party interest included in cost of sales	714		2,571
Equity in net income of unconsolidated joint ventures	(70)		(168)
Purchase price accounting for acquired inventory	10,612		3,840

Loss (gain) on debt extinguishment or forgiveness	—		—
Gain on remeasurement of warrant liability	—		(7,040)
Total adjustments	11,256		(797)
Tax-effected adjustments (1)	8,270		(2,458)

Adjusted net income attributable to Landsea Homes Corporation	$	28,240	$	8,339


Net income attributable to Landsea Homes Corporation	$	19,970	$	10,797
Less: undistributed earnings allocated to participating shares	(487)		(239)
Net income attributable to common stockholders	$	19,483	$	10,558

Adjusted net income attributable to Landsea Homes Corporation	$	28,240	$	8,339
Less: adjusted undistributed earnings allocated to participating shares	(689)		(184)
Adjusted net income attributable to common stockholders	$	27,551	$	8,155

Earnings per share
Basic	$	0.49	$	0.23
Diluted	$	0.49	$	0.23

Adjusted earnings per share
Basic	$	0.69	$	0.18
Diluted	$	0.69	$	0.18

Weighted average common shares outstanding used in EPS - basic	39,935,152		45,281,091
Weighted average common shares outstanding used in EPS - diluted	40,097,269		45,329,891


	Nine Months Ended September 30,
	2022		2021
	(dollars in thousands, except share and per share amounts)
Net income attributable to Landsea Homes Corporation	$	47,970	$	14,387


Previously capitalized related party interest included in cost of sales	3,831		9,813
Equity in net income of unconsolidated joint ventures	(139)		(814)
Purchase price accounting for acquired inventory	41,162		10,969
Merger related transaction costs	—		2,656
Loss (gain) on debt extinguishment or forgiveness	2,496		(4,266)
Loss on remeasurement of warrant liability	7,315		3,245
Total adjustments	54,665		21,603
Tax-effected adjustments (1)	44,599		15,583

Adjusted net income attributable to Landsea Homes Corporation	$	92,569	$	29,970


Net income attributable to Landsea Homes Corporation	$	47,970	$	14,387
Less: undistributed earnings allocated to participating shares	(1,094)		(315)
Net income attributable to common stockholders	$	46,876	$	14,072

Adjusted net income attributable to Landsea Homes Corporation	$	92,569	$	29,970
Less: adjusted undistributed earnings allocated to participating shares	(2,111)		(656)
Adjusted net income attributable to common stockholders	$	90,458	$	29,314

Earnings per share
Basic	$	1.10	$	0.31
Diluted	$	1.09	$	0.31

Adjusted earnings per share
Basic	$	2.12	$	0.65
Diluted	$	2.11	$	0.65

Weighted shares outstanding
Weighted average common shares outstanding used in EPS - basic	42,768,269		45,077,015
Weighted average common shares outstanding used in EPS - diluted	42,943,871		45,146,552

The following table presents the ratio of debt to capital as well as the ratio of net debt to net capital which is a non-GAAP financial measure. The ratio of debt to capital is computed as the quotient obtained by dividing total debt, net of issuance costs, by total capital (sum of total debt, net of issuance costs, plus total equity).

The non-GAAP ratio of net debt to net capital is computed as the quotient obtained by dividing net debt (which is total debt, net of issuance costs, less cash, cash equivalents, and restricted cash as well as cash held in escrow to the extent necessary to reduce the debt balance to zero) by net capital (sum of net debt plus total equity). The most comparable GAAP financial measure is the ratio of debt to capital. We believe the ratio of net debt to net capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. We believe that by deducting our cash from our debt, we provide a measure of our indebtedness that takes into account our cash liquidity. We believe this provides useful information as the ratio of debt to capital does not take into account our liquidity and we believe that the ratio of net debt to net capital provides supplemental information by which our financial position may be considered.


	September 30, 2022			December 31, 2021
	(dollars in thousands)
Total notes and other debts payable, net	$	585,065		$	461,117
Total equity	684,253			621,397
Total capital	$	1,269,318		$	1,082,514
Ratio of debt to capital	46.1		%	42.6		%

Total notes and other debts payable, net	$	585,065		$	461,117
Less: cash, cash equivalents, and restricted cash	110,192			343,253
Less: cash held in escrow	7,190			4,079
Net debt	467,683			113,785
Total equity	684,253			621,397
Net capital	$	1,151,936		$	735,182
Ratio of net debt to net capital	40.6		%	15.5		%