UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2023 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission file number 001-36126 LGI HOMES, INC. (Exact name of registrant as specified in its charter) Delaware 46-3088013 (State or other jurisdiction of in ...

LGI Homes, Inc. (NASDAQ:LGIH) Q3 2023 Earnings Conference Call October 31, 2023 12:30 PM ET Company Participants Joshua Fattor - Vice President of Investor Relations & Capital Markets Eric Lipar - Chairman of the Board & Chief Executive Officer Charles Merdian - Chief Financial Officer & Treasurer Conference Call Participants Andrew Azzi - JPMorgan Truman Patterson - Wolfe Ken Zener - Seaport Research Carl Reichardt - BTIG Jay McCanless - Wedbush Operator Welcome to LGI Homes Third Quarter 2023 Conference C ...

Financial Performance - Home sales revenues increased by 12.9% to $617.5 million from $547.1 million for the three months ended September 30, 2023[90]. - Home closings rose by 13.2% to 1,751 homes compared to 1,547 homes for the same period in 2022[90]. - Average sales price per home closed decreased by 0.3% to $352,678 from $353,635[90]. - Net income decreased by 25.8% to $67.0 million from $90.4 million for the three months ended September 30, 2023[90]. - For the nine months ended September 30, 2023, home sales revenues decreased by 3.6% to $1.75 billion from $1.82 billion[90]. - Net income for the nine months ended September 30, 2023 was $147.1 million, a decrease of $145.3 million, or 49.7%, from $292.5 million for the same period in 2022[118]. - Operating income for the nine months ended September 30, 2023 was $173.4 million, a decrease of $175.9 million, or 50.4%, from $349.3 million for the same period in 2022[115]. Margins and Expenses - Gross margin as a percentage of home sales revenues decreased to 25.7% from 28.5%[90]. - EBITDA as a percentage of home sales revenues decreased to 16.0% from 20.8% for the three months ended September 30, 2023[90]. - Cost of sales increased by $67.5 million, or 17.2%, to $458.7 million for the three months ended September 30, 2023, primarily due to the increase in homes closed[98]. - Selling expenses increased by $15.8 million, or 46.7%, to $49.8 million for the three months ended September 30, 2023, primarily due to increased sales commissions and advertising expenses[99]. - Gross margin for the nine months ended September 30, 2023 was $399.6 million, a decrease of $146.0 million, or 26.8%, from $545.6 million for the same period in 2022[111]. - Selling expenses for the nine months ended September 30, 2023 were $141.8 million, an increase of $30.2 million, or 27.1%, from $111.6 million for the same period in 2022[112]. Market Activity - The company had 106 active communities as of September 30, 2023, up from 93 active communities a year earlier[84]. - The number of net orders increased to 5,646 for the nine months ended September 30, 2023, compared to 4,373 in the same period of 2022, representing a growth of 29.1%[130]. - The ending backlog of homes increased by 9.7% to 1,377 homes as of September 30, 2023, compared to 1,255 homes as of September 30, 2022[129]. - Home sales revenues in the Florida segment increased by $53.4 million, or 78.2%, primarily due to an 81.7% increase in the number of homes closed[102]. - Home sales revenues in the Northwest segment increased by $20.9 million, or 44.7%, due to a 37.9% increase in the number of homes closed[102]. - Home sales revenues in the Southeast reportable segment increased by $69.1 million, or 21.0%, during the nine months ended September 30, 2023[115]. - Home sales revenues in the Florida reportable segment increased by $103.3 million, or 48.0%, during the nine months ended September 30, 2023[115]. Inventory and Lots - The company owned and controlled 72,109 lots as of September 30, 2023, compared to 69,226 lots at June 30, 2023[89]. - The total number of owned or controlled lots increased to 72,109 as of September 30, 2023, from 71,904 as of December 31, 2022[135]. - The company reported 4,971 home closings for the nine months ended September 30, 2023[138]. Cash Flow and Financing - Cash and cash equivalents stood at $47.0 million as of September 30, 2023[143]. - The company has a $1.13 billion revolving credit facility, which can be increased by up to $170 million[149]. - As of September 30, 2023, the borrowing base under the Credit Agreement is $1.8 billion, with $1.4 billion available to borrow[151]. - Net cash used in operating activities was $22.7 million for the nine months ended September 30, 2023, primarily due to a $194.4 million increase in real estate inventory[157]. - Net cash provided by financing activities was $45.3 million for the nine months ended September 30, 2023, driven by net borrowings of $75.9 million[160]. - The company did not repurchase any shares during the nine months ended September 30, 2023, leaving $211.5 million available for future repurchases[156]. Risk and Controls - The company is exposed to market risks related to fluctuations in interest rates on outstanding variable rate indebtedness[175]. - The company does not expect future interest rate risks related to existing indebtedness to materially impact financial position or results of operations[177]. - There have been no material changes to the risk factors previously disclosed in the Annual Report for the fiscal year ended December 31, 2022[182]. - The company’s disclosure controls and procedures are effective as of September 30, 2023, ensuring timely decision-making regarding required disclosures[178]. - No changes in internal control over financial reporting occurred during the three months ended September 30, 2023, that materially affected internal controls[181]. Long-term Outlook - The long-term outlook for new homes remains strong, driven by low inventory and strong household formations, despite current affordability constraints[86]. - The company expects to fund its long-term liquidity needs through cash generated from operations and available borrowing under the Credit Agreement[147]. - The company plans to utilize land banking financing arrangements to maximize long-term liquidity for lot development projects[147]. Inflation and Interest Rates - Inflation has pressured costs, but the company has been able to increase home sales prices to absorb these costs[163]. - As of September 30, 2023, the company had $904.2 million of variable rate indebtedness outstanding under the Credit Agreement[176]. - The interest rate for the variable rate indebtedness was SOFR plus 1.70%, with SOFR at 5.32% as of September 30, 2023[176]. - A hypothetical 100 basis point increase in the average interest rate would increase annual interest costs by approximately $9.0 million[176]. - The company utilizes both fixed-rate debt ($300.0 million aggregate principal amount of the 2029 Senior Notes) and variable-rate debt ($1.13 billion Credit Agreement) for financing operations[174]. - The company does not currently hold derivatives for trading or speculative purposes but may consider doing so in the future[175].

PART I [Item 1. Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents LGI Homes, Inc.'s unaudited consolidated financial statements, including balance sheets, operations, equity, and cash flows, for the periods ended June 30, 2023 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets increased slightly to **$3.14 billion**, while total liabilities decreased to **$1.41 billion**, leading to an increase in total equity to **$1.73 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $43.3M | $32.0M | | Real estate inventory | $2.89B | $2.90B | | **Total assets** | **$3.14B** | **$3.12B** | | Notes payable | $1.05B | $1.12B | | **Total liabilities** | **$1.41B** | **$1.48B** | | **Total equity** | **$1.73B** | **$1.64B** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) LGI Homes reported a significant decline in Q2 2023 profitability, with home sales revenues decreasing by **10.8%** to **$645.3 million** and net income falling **56.9%** to **$53.1 million** Quarterly Performance (Three Months Ended June 30, in millions) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $645.3M | $723.1M | -10.8% | | Operating income | $65.1M | $159.0M | -59.1% | | Net income | $53.1M | $123.4M | -56.9% | | Diluted EPS | $2.25 | $5.20 | -56.7% | Year-to-Date Performance (Six Months Ended June 30, in millions) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $1.13B | $1.27B | -10.8% | | Operating income | $91.1M | $254.7M | -64.2% | | Net income | $80.1M | $202.1M | -60.4% | | Diluted EPS | $3.39 | $8.43 | -59.8% | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity increased to **$1.73 billion** as of June 30, 2023, primarily driven by **$80.1 million** in net income, with no stock repurchases in the first half of 2023 - Total equity grew to **$1.73 billion** at June 30, 2023, up from **$1.64 billion** at December 31, 2022, mainly due to retained earnings from net income[18](index=18&type=chunk) - The company did not repurchase any stock in the first six months of 2023, in contrast to **$95.1 million** in repurchases during the same period in 2022[22](index=22&type=chunk)[51](index=51&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, the company generated **$92.8 million** in cash from operating activities, a significant reversal from the **$263.3 million** used in the prior year, resulting in a net cash increase of **$11.3 million** Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $92.8M | ($263.3M) | | Net cash used in investing activities | ($6.8M) | ($2.5M) | | Net cash (used in) provided by financing activities | ($74.7M) | $257.2M | | **Net increase (decrease) in cash** | **$11.3M** | **($8.5M)** | | Cash and cash equivalents, end of period | $43.3M | $42.0M | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail accounting policies and key financial items, including **$2.9 billion** in real estate inventory, **$1.05 billion** in notes payable, and segment performance, with no stock repurchases in 2023 Real Estate Inventory Breakdown (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Land, land under development and finished lots | $1.93B | $1.91B | | Homes in progress | $508.8M | $287.1M | | Completed homes | $270.4M | $523.1M | | **Total owned inventory** | **$2.75B** | **$2.76B** | - As of June 30, 2023, total notes payable amounted to **$1.05 billion**, comprising **$768.1 million** under its revolving credit facility and **$300.0 million** in 4.000% Senior Notes due 2029[44](index=44&type=chunk) - The company did not repurchase any common stock during the first six months of 2023, with **$211.5 million** remaining available under the authorized program as of June 30, 2023[51](index=51&type=chunk) Segment Revenues (in thousands) | Segment | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Central | $230.6M | $316.7M | $381.0M | $579.0M | | Southeast | $143.6M | $117.6M | $248.0M | $190.0M | | Northwest | $70.4M | $70.8M | $145.2M | $173.7M | | West | $82.7M | $124.0M | $161.6M | $179.5M | | Florida | $117.9M | $94.1M | $196.8M | $146.9M | | **Total** | **$645.3M** | **$723.1M** | **$1.13B** | **$1.27B** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2023 performance to demand recovery strategies, despite year-over-year declines in home closings and revenues, and a significant gross margin compression from **32.0%** to **22.0%** - The company attributes Q2 2023 performance to strategies offsetting affordability pressures, including mortgage buy-down programs and a pivot to smaller, lower-priced homes[82](index=82&type=chunk) Key Financial Results (Three Months Ended June 30, in millions) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $645.3M | $723.1M | -10.8% | | Homes closed | 1,854 | 2,027 | -8.5% | | Average sales price | $348,042 | $356,719 | -2.4% | | Gross margin % | 22.0% | 32.0% | -10.0 p.p. | | Net income | $53.1M | $123.4M | -56.9% | - Gross margin as a percentage of home sales revenues decreased to **22.0%** for Q2 2023 from **32.0%** in Q2 2022, primarily due to higher costs and sales incentives[99](index=99&type=chunk) - The number of homes in backlog increased by **29.4%** to **1,638 homes** at June 30, 2023, compared to **1,266 homes** at June 30, 2022[130](index=130&type=chunk)[131](index=131&type=chunk) - As of June 30, 2023, the company maintained strong liquidity with **$43.3 million** in cash and **$341.4 million** available under its credit facility[141](index=141&type=chunk)[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity on its **$768.1 million** variable-rate debt, where a **100 basis point** increase would raise annual interest costs by **$7.7 million** - The company is exposed to interest rate risk on its **$768.1 million** of variable rate debt outstanding under the Credit Agreement[172](index=172&type=chunk) - A hypothetical **100 basis point** increase in the average interest rate on variable rate debt would increase annual interest costs by approximately **$7.7 million**[172](index=172&type=chunk) - The company also holds **$300.0 million** in fixed-rate 2029 Senior Notes, which helps mitigate interest rate risk[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[174](index=174&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the second quarter of 2023[178](index=178&type=chunk) PART II [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor addresses potential adverse effects from financial industry turmoil and bank failures on the company's liquidity and credit facility availability - A new risk factor addresses potential adverse effects from financial industry turmoil, including bank failures observed in the first half of 2023[180](index=180&type=chunk) - The failure of a bank participating in the company's Credit Agreement could reduce available borrowing capacity, as non-defaulting lenders are not obligated to cover a defaulting lender's commitment[180](index=180&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2023 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2023[181](index=181&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The report includes CEO and CFO certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act[184](index=184&type=chunk) Signatures - The report was duly signed on August 1, 2023, by Eric Lipar, CEO and Chairman, and Charles Merdian, CFO and Treasurer[187](index=187&type=chunk)[188](index=188&type=chunk)

LGI Homes, Inc. (NASDAQ:LGIH) Q2 2023 Results Conference Call August 1, 2023 12:30 PM ET Company Participants Josh Fattor - VP, IR Eric Lipar - Chairman, CEO Charles Merdian - CFO, Treasurer Conference Call Participants Alex Barron - Housing Research Center Andrew Azzi - JP Morgan Jay McCanless - Wedbush Truman Patterson - Wolfe Research Operator Welcome to LGI Homes Second Quarter 2023 Conference Call. Today's call is being recorded, and a replay will be available on the company's website at www.lgihomes.c ...

LGI Homes, Inc. (NASDAQ:LGIH) Q1 2023 Earnings Conference Call May 2, 2023 12:30 PM ET Company Participants Josh Fattor - Vice President, Investor Relations Eric Lipar - Chief Executive Officer and Chairman Charles Merdian - Chief Financial Officer and Treasurer Conference Call Participants Michael Rehaut - JPMorgan Jay McCanless - Wedbush Carl Reichardt - BTIG Operator Welcome to the LGI Homes First Quarter 2023 Conference Call. Today's call is being recorded, and a replay will be available on the company' ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements and management's discussion for the quarter [Item 1. Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20LGI%20Homes%2C%20Inc.%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents LGI Homes' unaudited consolidated financial statements for Q1 2023 and 2022, covering balance sheets, operations, equity, cash flows, and notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) - The company's total assets slightly decreased from **$3,124.8 million** at December 31, 2022, to **$3,100.9 million** at March 31, 2023, primarily due to a decrease in real estate inventory and notes payable[12](index=12&type=chunk) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (vs. Dec 31, 2022) | | :----- | :---------------------------- | :------------------------------- | :------------------------ | | Total Assets | $3,100,923 | $3,124,828 | -$23,905 (-0.76%) | | Real Estate Inventory | $2,880,520 | $2,898,296 | -$17,776 (-0.61%) | | Total Liabilities | $1,426,694 | $1,482,416 | -$55,722 (-3.76%) | | Notes Payable | $1,045,837 | $1,117,001 | -$71,164 (-6.37%) | | Total Equity | $1,674,229 | $1,642,412 | +$31,817 (+1.94%) | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) - For the three months ended March 31, 2023, home sales revenues decreased by **10.7%** year-over-year, leading to a significant **65.7%** drop in net income, primarily due to lower operating income and higher selling expenses[15](index=15&type=chunk) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Home sales revenues | $487,357 | $546,050 | -$58,693 (-10.7%) | | Cost of sales | $388,541 | $387,643 | +$898 (+0.2%) | | Operating income | $26,051 | $95,720 | -$69,669 (-72.8%) | | Net income | $26,962 | $78,686 | -$51,724 (-65.7%) | | Basic EPS | $1.15 | $3.30 | -$2.15 (-65.2%) | | Diluted EPS | $1.14 | $3.25 | -$2.11 (-64.9%) | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity) - Total equity increased from **$1,642.4 million** at December 31, 2022, to **$1,674.2 million** at March 31, 2023, driven by net income and stock issued under employee incentive plans, partially offset by stock repurchases in the prior year[18](index=18&type=chunk)[47](index=47&type=chunk) | Metric | Dec 31, 2022 (in thousands) | Mar 31, 2023 (in thousands) | Change | | :----- | :-------------------------- | :-------------------------- | :----- | | Total Equity | $1,642,412 | $1,674,229 | +$31,817 | | Net income | — | $26,962 | +$26,962 | | Stock issued under employee incentive plans | — | $1,546 | +$1,546 | | Stock repurchase (3 months ended Mar 31, 2022) | — | — | -$57,659 (YoY) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) - The company generated **$77.6 million** in cash from operating activities for the three months ended March 31, 2023, a significant improvement from a net cash outflow in the prior year, primarily due to changes in real estate inventory and other assets. Investing activities used **$4.9 million**, and financing activities used **$61.8 million**, leading to a net increase in cash and cash equivalents of **$11.0 million**[21](index=21&type=chunk) | Cash Flow Activity | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----------------- | :--------------------------------------- | :--------------------------------------- | :----------- | | Operating Activities | $77,600 | $(137,787) | +$215,387 | | Investing Activities | $(4,855) | $(1,373) | -$3,482 | | Financing Activities | $(61,777) | $141,971 | -$203,748 | | Net increase in cash and cash equivalents | $10,968 | $2,811 | +$8,157 | | Cash and cash equivalents, end of period | $42,966 | $53,325 | -$10,359 | [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [1. Organization and Basis of Presentation](index=9&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) - LGI Homes, Inc. is a Delaware corporation headquartered in The Woodlands, Texas, engaged in the development, design, construction, and sale of new homes across multiple U.S. states[23](index=23&type=chunk) - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and with SEC regulations[24](index=24&type=chunk) [2. Real Estate Inventory](index=9&type=section&id=2.%20REAL%20ESTATE%20INVENTORY) | Inventory Category | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----------------- | :---------------------------- | :------------------------------- | | Land, land under development and finished lots | $1,922,275 | $1,911,307 | | Homes in progress | $350,098 | $287,069 | | Completed homes | $417,575 | $523,054 | | Total owned inventory | $2,726,584 | $2,756,504 | | Real estate not owned | $153,936 | $141,792 | | Total real estate inventory | $2,880,520 | $2,898,296 | - The company uses land banking financing arrangements to acquire finished lots in staged takedowns, limiting risk and minimizing cash use, while retaining control over the economic outcome of these 'real estate not owned' assets[27](index=27&type=chunk) [3. Accrued Expenses and Other Liabilities](index=10&type=section&id=3.%20ACCURRED%20EXPENSES%20AND%20OTHER%20LIABILITIES) | Liability Category | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----------------- | :---------------------------- | :------------------------------- | | Land banking financing arrangements | $153,936 | $141,792 | | Real estate inventory development and construction payable | $68,239 | $73,678 | | Taxes payable | $51,071 | $47,037 | | Warranty reserve | $11,350 | $10,750 | | Total accrued expenses and other liabilities | $340,917 | $340,128 | - The warranty reserve increased from **$10.75 million** at the beginning of the period to **$11.35 million** at March 31, 2023, with a provision of **$1.85 million** and expenditures of **$1.25 million** during the quarter[32](index=32&type=chunk) [4. Notes Payable](index=10&type=section&id=4.%20NOTES%20PAYABLE) | Debt Instrument | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------- | :---------------------------- | :------------------------------- | | 2022 Credit Agreement | $756,241 | $828,350 | | 4.000% Senior Notes due 2029 | $300,000 | $300,000 | | Total notes payable | $1,045,837 | $1,117,001 | - The revolving credit facility was amended on **April 28, 2023**, increasing to **$1.13 billion**, with **$775.0 million** (**68.6%**) of commitments extended to **April 28, 2027**, while the remaining mature on **April 28, 2025**[40](index=40&type=chunk) - As of **March 31, 2023**, the borrowing base under the 2022 Credit Agreement was **$1.4 billion**, with **$1.1 billion** outstanding (including 2029 Senior Notes) and **$315.8 million** available to borrow[37](index=37&type=chunk) [5. Income Taxes](index=12&type=section&id=5.%20INCOME%20TAXES) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Income tax provision | $5,386 | $20,864 | -$15,478 (-74.2%) | | Effective tax rate | 16.7% | 21.0% | -4.3 percentage points | - The lower effective tax rate is primarily due to deductions in excess of compensation cost for share-based payments and the extension of federal energy-efficient homes tax credits[45](index=45&type=chunk) [6. Equity](index=12&type=section&id=6.%20EQUITY) - The Board approved a **$200.0 million** increase to the stock repurchase program in **February 2022**, bringing the total authorization to **$550.0 million**[47](index=47&type=chunk) - No shares were repurchased during the three months ended **March 31, 2023**[47](index=47&type=chunk) - As of **March 31, 2023**, **$211.5 million** remained available under the stock repurchase program[47](index=47&type=chunk) [7. Earnings Per Share](index=13&type=section&id=7.%20EARNINGS%20PER%20SHARE) | Metric | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change (YoY) | | :----- | :-------------------------- | :-------------------------- | :----------- | | Basic EPS | $1.15 | $3.30 | -$2.15 (-65.2%) | | Diluted EPS | $1.14 | $3.25 | -$2.11 (-64.9%) | | Basic weighted average shares outstanding | 23,381,294 | 23,837,170 | -455,876 (-1.9%) | | Diluted weighted average shares outstanding | 23,629,779 | 24,194,321 | -564,542 (-2.3%) | [8. Stock-Based Compensation](index=13&type=section&id=8.%20STOCK-BASED%20COMPENSATION) - Stock-based compensation expense for time-vested Restricted Stock Units (RSUs) was **$1.1 million** for Q1 2023, up from **$0.8 million** in Q1 2022[50](index=50&type=chunk) - Unrecognized compensation cost for unvested RSUs was **$10.7 million** as of **March 31, 2023**, to be recognized over a weighted average period of **2.3 years**[50](index=50&type=chunk) - Stock-based compensation expense for Performance-Based Restricted Stock Units (PSUs) was **$1.6 million** for Q1 2023, down from **$2.3 million** in Q1 2022[54](index=54&type=chunk) [9. Fair Value Disclosures](index=14&type=section&id=9.%20FAIR%20VALUE%20DISCLOSURES) - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant observable inputs), and Level 3 (significant unobservable inputs)[56](index=56&type=chunk)[57](index=57&type=chunk) | Liability | Fair Value Hierarchy | Carrying Value (Mar 31, 2023, in thousands) | Estimated Fair Value (Mar 31, 2023, in thousands) | | :-------- | :------------------- | :------------------------------------------ | :------------------------------------------------ | | 2029 Senior Notes | Level 2 | $300,000 | $259,334 | [10. Commitments and Contingencies](index=15&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) - Management believes ordinary course claims and environmental matters will not have a material effect on financial statements[60](index=60&type=chunk)[61](index=61&type=chunk) | Commitment | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------- | :---------------------------- | :------------------------------- | | Land deposits and option payments | $24,139 | $22,406 | | Commitments under land purchase contracts | $439,666 | $411,776 | | Lots under land purchase contracts | 12,088 | 13,184 | - Outstanding letters of credit and performance/surety bonds totaled **$361.1 million** at **March 31, 2023**, related to site improvements[67](index=67&type=chunk) [11. Revenues](index=16&type=section&id=11.%20REVENUES) | Revenue Stream | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :------------- | :--------------------------------------- | :--------------------------------------- | :----------- | | Retail home sales revenues | $456,177 | $494,206 | -$38,029 (-7.7%) | | Wholesale home sales revenues | $31,180 | $51,844 | -$20,664 (-39.9%) | | Total home sales revenues | $487,357 | $546,050 | -$58,693 (-10.7%) | [12. Segment Information](index=17&type=section&id=12.%20SEGMENT%20INFORMATION) - The company aggregates seven operating segments into five qualifying reportable segments: Central, Southeast, Northwest, West, and Florida[72](index=72&type=chunk) | Segment | Revenues (3 Months Ended Mar 31, 2023, in thousands) | Revenues (3 Months Ended Mar 31, 2022, in thousands) | Net Income (Loss) Before Taxes (3 Months Ended Mar 31, 2023, in thousands) | Net Income (Loss) Before Taxes (3 Months Ended Mar 31, 2022, in thousands) | | :------ | :------------------------------------------------- | :------------------------------------------------- | :------------------------------------------------------------------------- | :------------------------------------------------------------------------- | | Central | $150,380 | $262,298 | $9,064 | $57,740 | | Southeast | $104,376 | $72,463 | $6,924 | $10,129 | | Northwest | $74,815 | $102,874 | $7,651 | $27,584 | | West | $78,886 | $55,583 | $2,383 | $(231) | | Florida | $78,900 | $52,832 | $7,487 | $5,360 | | Total | $487,357 | $546,050 | $32,348 | $99,550 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of LGI Homes' Q1 2023 financial condition and operational results, covering key metrics, performance, and liquidity [Business Overview](index=18&type=section&id=Business%20Overview) - LGI Homes adapted to market conditions in Q1 2023 by increasing targeted advertising, offering mortgage buy-down programs, and focusing on smaller, more affordable homes[78](index=78&type=chunk) - Demand for homes increased in Q1 2023 compared to Q4 2022, leading to higher net orders and selective increases in construction starts[79](index=79&type=chunk) - Home closings decreased by **14.6%** to **1,366 homes** in Q1 2023 (vs. **1,599** in Q1 2022) due to the slowdown in demand during H2 2022 and ongoing supply chain disruptions[80](index=80&type=chunk) [Recent Developments](index=19&type=section&id=Recent%20Developments) - The revolving credit facility was amended on **April 28, 2023**, increasing to **$1.13 billion**, with **$775.0 million** of commitments extended to **April 28, 2027**[85](index=85&type=chunk) [Key Results](index=19&type=section&id=Key%20Results) | Metric | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change (YoY) | | :----- | :-------------------------- | :-------------------------- | :----------- | | Home sales revenues | $487.4 million | $546.1 million | -10.7% | | Homes closed | 1,366 | 1,599 | -14.6% | | Average sales price per home closed | $356,777 | $341,495 | +4.5% | | Gross margin % | 20.3% | 29.0% | -8.7 percentage points | | Net income before income taxes | $32.3 million | $99.6 million | -67.5% | | Net income | $27.0 million | $78.7 million | -65.7% | | EBITDA % (non-GAAP) | 8.1% | 19.1% | -11.0 percentage points | | Adjusted EBITDA % (non-GAAP) | 7.2% | 18.8% | -11.6 percentage points | - The company owned and controlled **69,724 lots** at **March 31, 2023**, a decrease from **71,904 lots** at December 31, 2022[86](index=86&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) - The company experienced a significant decline in operating performance for Q1 2023 compared to Q1 2022, with home sales revenues decreasing by **10.7%** and net income before income taxes dropping by **67.5%**[87](index=87&type=chunk)[98](index=98&type=chunk) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Home sales revenues | $487,357 | $546,050 | -$58,693 (-10.7%) | | Operating income | $26,051 | $95,720 | -$69,669 (-72.8%) | | Net income before income taxes | $32,348 | $99,550 | -$67,202 (-67.5%) | | Net income | $26,962 | $78,686 | -$51,724 (-65.7%) | | Gross margin % | 20.3% | 29.0% | -8.7 percentage points | | Selling expenses % of revenue | 8.8% | 6.3% | +2.5 percentage points | | General and administrative % of revenue | 6.1% | 5.2% | +0.9 percentage points | [Homes Sales](index=22&type=section&id=Homes%20Sales) | Metric | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change (YoY) | | :----- | :-------------------------- | :-------------------------- | :----------- | | Home sales revenues | $487,357 | $546,050 | -10.7% | | Homes closed | 1,366 | 1,599 | -14.6% | | Average sales price per home closed | $356,777 | $341,495 | +4.5% | | Average community count | 97.7 | 89.0 | +9.8% | | Average monthly absorption rate | 4.7 | 6.0 | -21.7% | - Wholesale revenues decreased significantly to **$31.2 million** (**103 closings**) in Q1 2023 from **$51.8 million** (**213 closings**) in Q1 2022, representing a smaller percentage of total closings (**7.5%** vs. **13.3%**)[92](index=92&type=chunk) [Cost of Sales and Gross Margin](index=23&type=section&id=Cost%20of%20Sales%20and%20Gross%20Margin) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Cost of sales | $388,541 | $387,643 | +$898 (+0.2%) | | Gross margin | $98,816 | $158,407 | -$59,591 (-37.6%) | | Gross margin % | 20.3% | 29.0% | -8.7 percentage points | - The decrease in gross margin percentage was primarily due to higher construction costs, capitalized interest, and the impact of sales incentives[94](index=94&type=chunk) [Selling Expenses](index=23&type=section&id=Selling%20Expenses) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Selling expenses | $42,805 | $34,398 | +$8,407 (+24.4%) | | Selling expenses % of home sales revenues | 8.8% | 6.3% | +2.5 percentage points | [General and Administrative](index=23&type=section&id=General%20and%20Administrative) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | General and administrative | $29,960 | $28,289 | +$1,671 (+5.9%) | | General and administrative % of home sales revenues | 6.1% | 5.2% | +0.9 percentage points | [Other Income](index=23&type=section&id=Other%20Income) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Other income, net | $6,297 | $3,830 | +$2,467 (+64.4%) | [Operating Income and Net Income before Income Taxes](index=23&type=section&id=Operating%20Income%20and%20Net%20Income%20before%20Income%20Taxes) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Operating income | $26,051 | $95,720 | -$69,669 (-72.8%) | | Net income before income taxes | $32,348 | $99,550 | -$67,202 (-67.5%) | - The Central segment contributed **28.0%** (**$9.1 million**) to net income before income taxes, Southeast **21.4%** (**$6.9 million**), Northwest **23.7%** (**$7.7 million**), West **7.4%** (**$2.4 million**), and Florida **23.1%** (**$7.5 million**)[98](index=98&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Income tax provision | $5,386 | $20,864 | -$15,478 (-74.2%) | | Effective tax rate | 16.7% | 21.0% | -4.3 percentage points | [Net Income](index=25&type=section&id=Net%20Income) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Net income | $26,962 | $78,686 | -$51,724 (-65.7%) | [Non-GAAP Measures](index=25&type=section&id=Non-GAAP%20Measures) - The company provides non-GAAP financial measures, Adjusted Gross Margin, EBITDA, and Adjusted EBITDA, to offer supplemental insights into operating performance by excluding certain non-cash or non-recurring items[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) [Adjusted Gross Margin](index=25&type=section&id=Adjusted%20Gross%20Margin) - Adjusted gross margin is defined as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales[103](index=103&type=chunk) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Gross margin | $98,816 | $158,407 | -$59,591 (-37.6%) | | Capitalized interest charged to cost of sales | $6,757 | $4,513 | +$2,244 (+49.7%) | | Purchase accounting adjustments | $2,036 | $2,282 | -$246 (-10.8%) | | Adjusted gross margin | $107,609 | $165,202 | -$57,593 (-34.8%) | | Adjusted gross margin % | 22.1% | 30.3% | -8.2 percentage points | [EBITDA and Adjusted EBITDA](index=25&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) - EBITDA is defined as net income before interest expense, income taxes, depreciation and amortization, and capitalized interest charged to the cost of sales. Adjusted EBITDA further excludes loss on extinguishment of debt, other income, net, and purchase accounting adjustments[105](index=105&type=chunk) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | Change (YoY) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------- | | Net income | $26,962 | $78,686 | -$51,724 (-65.7%) | | EBITDA | $39,587 | $104,411 | -$64,824 (-62.1%) | | Adjusted EBITDA | $35,326 | $102,863 | -$67,537 (-65.7%) | | EBITDA margin % | 8.1% | 19.1% | -11.0 percentage points | | Adjusted EBITDA margin % | 7.2% | 18.8% | -11.6 percentage points | [Backlog](index=27&type=section&id=Backlog) | Metric | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change (YoY) | | :----- | :-------------------------- | :-------------------------- | :----------- | | Net orders | 2,219 | 1,973 | +246 (+12.5%) | | Cancellation rate | 15.9% | 15.6% | +0.3 percentage points | | Ending backlog – homes | 1,555 | 2,429 | -874 (-36.0%) | | Ending backlog – value (in thousands) | $561,422 | $849,117 | -$287,695 (-33.9%) | - The decrease in ending backlog is attributed to lower demand for home sales in Q1 2023 compared to Q1 2022, influenced by increased mortgage rates[113](index=113&type=chunk) [Land Acquisition Policies and Development](index=28&type=section&id=Land%20Acquisition%20Policies%20and%20Development) - The company had **99 active communities** as of **March 31, 2023**[115](index=115&type=chunk) - Total owned or controlled lot inventory decreased to **69,724 lots** at **March 31, 2023**, from **71,904 lots** at December 31, 2022[116](index=116&type=chunk) | Reportable Segment | Home Closings (3 Months Ended Mar 31, 2023) | Owned Lots (As of Mar 31, 2023) | Controlled Lots (As of Mar 31, 2023) | Total Lots (As of Mar 31, 2023) | | :----------------- | :------------------------------------------ | :------------------------------ | :----------------------------------- | :------------------------------ | | Central | 453 | 21,471 | 3,413 | 24,884 | | Southeast | 316 | 14,761 | 2,750 | 17,511 | | Northwest | 159 | 6,553 | 2,010 | 8,563 | | West | 209 | 9,669 | 1,255 | 10,924 | | Florida | 229 | 5,182 | 2,660 | 7,842 | | Total | 1,366 | 57,636 | 12,088 | 69,724 | [Homes in Inventory](index=29&type=section&id=Homes%20in%20Inventory) - As of **March 31, 2023**, the company had **1,628 completed homes** (including information centers) and **2,026 homes** in progress[120](index=120&type=chunk) [Raw Materials and Labor](index=29&type=section&id=Raw%20Materials%20and%20Labor) - The company mitigates risks from material and labor cost increases by contracting at fixed prices for the anticipated construction period[121](index=121&type=chunk) - During Q1 2023, the company experienced delays and cost increases in building materials and construction, which were generally absorbed by increasing home sales prices[121](index=121&type=chunk)[146](index=146&type=chunk) [Seasonality](index=29&type=section&id=Seasonality) - The homebuilding industry is seasonal, with the company typically closing more homes in the second, third, and fourth quarters, leading to quarterly fluctuations in results and higher capital requirements in those periods[122](index=122&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) [Overview](index=29&type=section&id=Overview) - As of **March 31, 2023**, cash and cash equivalents totaled **$43.0 million**[124](index=124&type=chunk) - Principal uses of capital include operating expenses, land/lot purchases, lot development, home construction, interest costs, and stock repurchases[125](index=125&type=chunk) [Short-term Liquidity and Capital Resources](index=29&type=section&id=Short-term%20Liquidity%20and%20Capital%20Resources) - Short-term liquidity is primarily funded by operating cash flows, the Credit Agreement, and land banking financing arrangements[126](index=126&type=chunk) - The company believes it can fund liquidity needs for at least the next twelve months with cash on hand, operating cash, and available credit[127](index=127&type=chunk) [Long-term Liquidity and Capital Resources](index=30&type=section&id=Long-term%20Liquidity%20and%20Capital%20Resources) - Long-term liquidity uses include inventory purchases, stock repurchases, capital expenditures, and principal and interest payments on debt obligations[129](index=129&type=chunk) - Long-term funding sources include operating cash flows, the Credit Agreement, and strategic land banking, with potential for additional debt or equity capital[129](index=129&type=chunk) [Revolving Credit Facility](index=30&type=section&id=Revolving%20Credit%20Facility) - The Credit Agreement provides a **$1.13 billion** revolving credit facility, which can be increased by up to **$170.0 million**[130](index=130&type=chunk) - Lenders with **$775.0 million** (**68.6%**) of commitments extended their maturity to **April 28, 2027**, with the remaining maturing on **April 28, 2025**[130](index=130&type=chunk) - As of **March 31, 2023**, **$315.8 million** was available to borrow under the **$1.4 billion** borrowing base[132](index=132&type=chunk) [Senior Notes Offering](index=30&type=section&id=Senior%20Notes%20Offering) - **$300.0 million** aggregate principal amount of **4.000%** Senior Notes due **July 15, 2029**, were issued on **June 28, 2021**[134](index=134&type=chunk) [Letters of Credit, Surety Bonds and Financial Guarantees](index=30&type=section&id=Letters%20of%20Credit%2C%20Surety%20Bonds%20and%20Financial%20Guarantees) - Outstanding letters of credit, surety bonds, and financial guarantees totaled **$361.1 million** as of **March 31, 2023**[136](index=136&type=chunk) - Management does not believe it is probable that any outstanding letters of credit, surety bonds, or financial guarantees will be drawn upon[138](index=138&type=chunk) [Stock Repurchase Program](index=32&type=section&id=Stock%20Repurchase%20Program) - The stock repurchase program was increased to **$550.0 million** in **February 2022**[139](index=139&type=chunk) - No shares were repurchased in Q1 2023; **$57.7 million** was used to repurchase **475,055 shares** in Q1 2022[139](index=139&type=chunk) - **$211.5 million** remained available under the program as of **March 31, 2023**[139](index=139&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) [Operating Activities](index=32&type=section&id=Operating%20Activities) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | | Net cash provided by (used in) operating activities | $77,600 | $(137,787) | | Net change in real estate inventory | +$15,945 | $(251,612) | | Net income | $26,962 | $78,686 | [Investing Activities](index=32&type=section&id=Investing%20Activities) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | | Net cash used in investing activities | $(4,855) | $(1,373) | | Investment in unconsolidated entities | $(5,919) | $(380) | [Financing Activities](index=32&type=section&id=Financing%20Activities) | Metric | 3 Months Ended Mar 31, 2023 (in thousands) | 3 Months Ended Mar 31, 2022 (in thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | | Net cash provided by (used in) financing activities | $(61,777) | $141,971 | | Payments on notes payable | $(105,000) | — | | Proceeds from notes payable | $32,890 | $197,617 | | Stock repurchase | — | $(57,659) | [Inflation](index=32&type=section&id=Inflation) - Inflation adversely impacts land, financing, labor, material, and construction costs, and can increase mortgage rates, affecting homebuyer affordability[145](index=145&type=chunk) - The company expects cost pressures from inflation to continue in 2023 but has generally offset them by increasing home sales prices[146](index=146&type=chunk) [Material Cash Requirements](index=33&type=section&id=Material%20Cash%20Requirements) - As of **March 31, 2023**, there have been no material changes to the company's known contractual and other obligations previously disclosed in its 2022 Annual Report on Form 10-K[148](index=148&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No significant changes to critical accounting policies and estimates were identified during Q1 2023 compared to the 2022 Annual Report on Form 10-K[150](index=150&type=chunk) [Cautionary Statement about Forward-Looking Statements](index=33&type=section&id=Cautionary%20Statement%20about%20Forward-Looking%20Statements) - Forward-looking statements are subject to risks such as adverse economic changes, market volatility, supply chain disruptions, inflation, and changes in mortgage rates[153](index=153&type=chunk) - The company expressly disclaims any intent, obligation, or undertaking to update or revise any forward-looking statements[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to market risks, particularly interest rate fluctuations, and its management strategies for variable-rate debt [Quantitative and Qualitative Disclosures About Interest Rate Risk](index=34&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Interest%20Rate%20Risk) - The company utilizes both fixed-rate debt (**$300.0 million** Senior Notes) and variable-rate debt (**$756.2 million** outstanding under the 2022 Credit Agreement)[157](index=157&type=chunk)[159](index=159&type=chunk) - A hypothetical **100 basis point** increase in the average interest rate above the SOFR floor on variable-rate indebtedness would increase annual interest cost by approximately **$7.6 million**[159](index=159&type=chunk) - Management believes that current interest rate management policies will prevent a material adverse impact on the company's financial position, results of operations, or liquidity[160](index=160&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Addresses the effectiveness of disclosure controls and procedures, reporting on changes in internal control over financial reporting for the quarter [Disclosure Controls and Procedures](index=35&type=section&id=Disclosure%20Controls%20and%20Procedures) - As of **March 31, 2023**, the CEO and CFO concluded that the company's disclosure controls and procedures were effective in ensuring timely and accurate information reporting[161](index=161&type=chunk) - Control systems, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives are met and can be circumvented[162](index=162&type=chunk) [Changes in Internal Controls](index=35&type=section&id=Changes%20in%20Internal%20Controls) - No change in internal control over financial reporting occurred during the three months ended **March 31, 2023**, that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting[164](index=164&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Provides additional information including risk factors, recent developments, exhibits, and official signatures [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, noting no material changes except for new concerns regarding financial industry and capital markets turmoil impacting liquidity - No material changes to previously disclosed risk factors, except for new concerns about financial industry and capital markets turmoil[166](index=166&type=chunk) - The failure of other banks could adversely affect liquidity if the company has deposits or if Credit Agreement lenders face issues, potentially limiting access to the full borrowing capacity[167](index=167&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) Reiterates the recent amendment to the 2022 Credit Agreement, detailing the revolving credit facility increase and extended maturity - The 2022 Credit Agreement was amended on **April 28, 2023**, to provide for a **$1.13 billion** revolving credit facility[168](index=168&type=chunk) - Lenders with **$775.0 million**, or **68.6%**, of the commitments agreed to extend the maturity of their commitments to **April 28, 2027**[168](index=168&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) Lists all documents filed as exhibits to the Form 10-Q, including corporate governance, amended credit agreement, and officer certifications - Key exhibits include the Third Amendment to Fifth Amended and Restated Credit Agreement, CEO and CFO certifications, and Inline XBRL documents[170](index=170&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) Contains the official signatures of the registrant's authorized officers, certifying the Form 10-Q filing - The report was signed by Eric Lipar (Chief Executive Officer and Chairman of the Board) and Charles Merdian (Chief Financial Officer and Treasurer) on **May 2, 2023**[173](index=173&type=chunk)[174](index=174&type=chunk)

Financial Data and Key Metrics Changes - In 2022, the company reported home closings of 6,621, a significant decrease from over 10,000 in the previous year, leading to disappointment in meeting guidance [5][9] - Revenue for the fourth quarter was $488.3 million, a 39% year-over-year decline, primarily due to a 42.7% decrease in closings [14] - Full-year revenue was $2.3 billion, down 24.4%, with a net income of $326.6 million, or $13.90 per basic share [18][20] - The gross margin for the full year was 28.1%, and adjusted gross margin was 29.2%, both representing new company records [20] Business Line Data and Key Metrics Changes - The wholesale business accounted for 29.8% of total closings in Q4, up from 14.6% in the same period last year [15] - The average selling price increased by 19.2% year-over-year to $348,052, despite a 4.6% decrease from Q3 [18] Market Data and Key Metrics Changes - The Dallas Fort Worth market led with an average of 11 closings per community per month, followed by San Antonio and Charlotte [8] - The cancellation rate for the full year was 24.4%, with a Q4 cancellation rate of 37.5% [21] Company Strategy and Development Direction - The company is focusing on cash flow and preserving capital, ending the year with a net debt to capital ratio below 40% [10] - Plans for 2023 include closing between 6,000 and 7,000 homes, with an average sales price between $335,000 and $350,000 [34] - The company is also targeting a 20% to 30% growth in community count expected in 2024 [34] Management's Comments on Operating Environment and Future Outlook - Management expressed tempered optimism for 2023, citing a significant increase in leads generated and a strong sales pace early in the year [31][34] - The company is cautious about the impact of rising interest rates on affordability and is adjusting pricing strategies accordingly [48][72] Other Important Information - The company reduced its total owned and controlled lots by almost 22% and ended the year with 3,308 completed homes [10][24] - The company has paused stock repurchases to maintain liquidity and focus on land development [26][93] Q&A Session Summary Question: Insights on Q1 expectations and gross margins - Management expects Q1 gross margins to be similar to Q4 due to the need to move inventory and adjust pricing [39] Question: February closings and sales pace - February closings are expected to be approximately 450, showing a significant increase from January [42] Question: Gross margin guidance and pricing strategies - Management indicated that they have raised prices in several communities due to increased demand, but are cautious about affordability [47] Question: Community openings and closings - The company plans to open around 40 to 50 new communities while closing 20 to 30 [58] Question: Impact of interest rates on capitalized interest - Interest costs are expected to tick up slightly over time as projects are developed, but will be capitalized against communities under development [75] Question: Build times and inventory management - Build times are improving slightly, and the company is managing starts to align with projected deliveries [77] Question: Mortgage payments versus rent - The company noted that the difference between mortgage payments and rent has become more pronounced, with ownership becoming more affordable relative to renting [98]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2022 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission file number 001-36126 LGI HOMES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2022 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission file number 001-36126 LGI HOMES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...