[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20LGI%20Homes%2C%20Inc.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Presents LGI Homes' unaudited consolidated financial statements, detailing increased inventory, notes payable, mixed revenue and net income, and negative operating cash flow [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202022%20and%20December%2031%2C%202021) Total assets increased to **$2.87 billion** driven by real estate inventory, while liabilities grew to **$1.36 billion** due to notes payable, and equity rose to **$1.51 billion** Consolidated Balance Sheet Highlights | Account | June 30, 2022 | December 31, 2021 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $42.0M | $50.5M | ($8.5M) | | Real estate inventory | $2,633.7M | $2,085.9M | $547.8M | | **Total Assets** | **$2,873.4M** | **$2,351.9M** | **$521.5M** | | **Liabilities & Equity** | | | | | Notes payable | $1,155.5M | $805.2M | $350.2M | | **Total Liabilities** | **$1,359.4M** | **$956.0M** | **$403.4M** | | **Total Equity** | **$1,513.9M** | **$1,395.8M** | **$118.1M** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202022%20and%202021) Q2 2022 home sales revenues decreased **8.6%** while net income increased **4.4%**, contrasting with a **15.2%** revenue decline and **7.2%** net income decrease for the six-month period Quarterly Performance (Three Months Ended June 30) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $723.1M | $791.5M | -8.6% | | Operating income | $159.0M | $146.0M | +8.9% | | Net income | $123.4M | $118.1M | +4.4% | | Diluted EPS | $5.20 | $4.71 | +10.4% | Year-to-Date Performance (Six Months Ended June 30) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $1,269.1M | $1,497.5M | -15.2% | | Operating income | $254.7M | $268.5M | -5.1% | | Net income | $202.1M | $217.8M | -7.2% | | Diluted EPS | $8.43 | $8.66 | -2.7% | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202022%20and%202021) Total equity increased to **$1.51 billion** by June 30, 2022, driven by **$202.1 million** in net income, partially offset by **$95.1 million** in stock repurchases - For the six months ended June 30, 2022, total equity increased by **$118.1 million**, reflecting net income of **$202.1 million**, offset by stock repurchases totaling **$95.1 million** ($57.7M in Q1 and $37.4M in Q2)[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202022%20and%202021) Net cash used in operating activities was **$263.3 million** for H1 2022 due to inventory investment, offset by **$257.2 million** from financing activities, resulting in cash and cash equivalents of **$42.0 million** Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | ($263.3M) | $139.9M | | Net cash used in investing activities | ($2.5M) | ($29.8M) | | Net cash from (used in) financing activities | $257.2M | ($34.3M) | | **Net (decrease) increase in cash** | **($8.5M)** | **$75.8M** | | **Cash at end of period** | **$42.0M** | **$111.7M** | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail accounting policies, **$2.63 billion** in real estate inventory, a **$1.1 billion** credit facility amendment, increased stock repurchase program to **$550 million**, and segment-level data - Real estate inventory increased to **$2.63 billion** as of June 30, 2022, up from **$2.09 billion** at the end of 2021, with homes in progress seeing a significant jump from **$449.7 million** to **$684.4 million**[31](index=31&type=chunk) - On April 29, 2022, the company amended its credit agreement, increasing commitments by **$250.0 million** to a total of **$1.1 billion** and replacing LIBOR with SOFR as the benchmark interest rate[39](index=39&type=chunk) - In February 2022, the Board of Directors increased the stock repurchase program authorization by **$200.0 million**, bringing the total to **$550.0 million** As of June 30, 2022, **$211.5 million** remained available for repurchases[52](index=52&type=chunk) Segment Revenues | Segment | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | Central | $316.7M | $348.0M | $579.0M | $636.7M | | Southeast | $117.6M | $159.7M | $190.0M | $296.3M | | Northwest | $70.8M | $106.2M | $173.7M | $224.4M | | West | $124.0M | $80.8M | $179.5M | $162.0M | | Florida | $94.1M | $96.8M | $146.9M | $178.1M | [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 discusses Q2 2022 market headwinds from rising mortgage rates, impacting demand and cancellations, while highlighting increased ASP and gross margins, and outlining strategic responses and liquidity position [Business Overview and Key Results](index=20&type=section&id=Business%20Overview%20and%20Key%20Results) The housing market faced Q2 2022 headwinds from rising mortgage rates, leading to decreased home closings but increased average sales prices and expanded gross margins, prompting strategic adjustments - In Q2 2022, a rapid increase in mortgage interest rates led to decreased demand and a higher than normal cancellation rate as potential homebuyers paused or reconsidered purchases[85](index=85&type=chunk) - The company's strategy to combat market headwinds includes increasing targeted advertising and slowing the pace of new home starts to match current absorption levels[86](index=86&type=chunk) Key Results - Q2 2022 vs Q2 2021 | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | Home Sales Revenues | $723.1M | $791.5M | -8.6% | | Homes Closed | 2,027 | 2,856 | -29.0% | | Average Sales Price | $356,719 | $277,140 | +28.7% | | Gross Margin % | 32.0% | 27.0% | +500 bps | | Net Income | $123.4M | $118.1M | +4.4% | Key Results - H1 2022 vs H1 2021 | Metric | H1 2022 | H1 2021 | % Change | | :--- | :--- | :--- | :--- | | Home Sales Revenues | $1.3B | $1.5B | -15.2% | | Homes Closed | 3,626 | 5,417 | -33.1% | | Average Sales Price | $350,005 | $276,438 | +26.6% | | Gross Margin % | 30.7% | 27.0% | +370 bps | | Net Income | $202.1M | $217.8M | -7.2% | [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q2 2022 saw an **8.6%** revenue decline due to fewer closings, offset by a **28.7%** ASP increase and improved gross margin to **32.0%**, while H1 2022 revenue fell **15.2%** with G&A expenses rising - The increase in gross margin percentage for both Q2 and H1 2022 was primarily due to raising home prices higher than the increases in input costs[101](index=101&type=chunk)[116](index=116&type=chunk) - General and administrative expenses increased **25.0%** in Q2 and **19.5%** in H1 2022 compared to the prior year, mainly due to increased personnel costs and professional fees[103](index=103&type=chunk)[118](index=118&type=chunk) - Wholesale home sales revenues decreased significantly, from **$94.7 million** (430 homes) in Q2 2021 to **$36.9 million** (146 homes) in Q2 2022, due to a strategic prioritization of retail sales and cost volatility[99](index=99&type=chunk) [Non-GAAP Measures](index=29&type=section&id=Non-GAAP%20Measures) The company presents non-GAAP Adjusted Gross Margin and EBITDA, with Adjusted Gross Margin reaching **33.1%** in Q2 2022 and **31.9%** in H1 2022, reflecting core operating performance Adjusted Gross Margin Reconciliation | | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | Gross margin | $231.4M | $214.1M | $389.8M | $404.0M | | Capitalized interest | $5.7M | $10.4M | $10.2M | $21.1M | | Purchase accounting | $2.0M | $1.4M | $4.3M | $2.3M | | **Adjusted gross margin** | **$239.1M** | **$226.0M** | **$404.3M** | **$427.4M** | | **Adjusted gross margin %** | **33.1%** | **28.5%** | **31.9%** | **28.5%** | [Backlog](index=31&type=section&id=Backlog) As of June 30, 2022, backlog decreased **73.6%** to **1,266 homes** valued at **$445.1 million**, with the cancellation rate rising to **20.8%** due to market shifts and strategic changes Backlog and Cancellation Data | Metric | H1 2022 | H1 2021 | % Change | | :--- | :--- | :--- | :--- | | Net orders | 2,837 | 7,254 | -61.0% | | Cancellation rate | 20.8% | 14.8% | +600 bps | | Ending backlog – homes | 1,266 | 4,801 | -73.6% | | Ending backlog – value | $445.1M | $1,434.4M | -68.9% | - The company modified its timing for entering sales contracts to later in the construction cycle to mitigate cost volatility, which contributed to the lower backlog[134](index=134&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company had **$42.0 million** in cash, relying on operating cash flow and its **$1.1 billion** credit facility, with **$203.7 million** available, and repurchased **$95.1 million** in stock - The company's credit facility was increased to **$1.1 billion** in April 2022 As of June 30, 2022, borrowings (including Senior Notes) were **$1.2 billion** against a borrowing base of **$1.4 billion**, with **$203.7 million** available[153](index=153&type=chunk)[155](index=155&type=chunk) - Net cash used in operating activities was **$263.3 million** for H1 2022, primarily due to a **$547.6 million** increase in real estate inventory[161](index=161&type=chunk) - Net cash provided by financing activities was **$257.2 million** for H1 2022, driven by **$371.2 million** in borrowings, which offset **$95.1 million** in stock repurchases[165](index=165&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, impacting mortgage affordability and variable-rate debt costs, with a **100 bps** rate increase potentially raising annual interest costs by **$8.7 million** - The company's main market risk is from interest rate fluctuations, which can impact both housing demand and its own financing costs[176](index=176&type=chunk) - As of June 30, 2022, a hypothetical **100 basis point** increase in interest rates on the **$868.6 million** of variable rate debt would increase annual interest cost by approximately **$8.7 million**[179](index=179&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were effective[181](index=181&type=chunk) - There were no material changes to the company's internal control over financial reporting during the second quarter of 2022[185](index=185&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K have occurred - There have been no material changes to the risk factors from the company's 2021 Form 10-K[186](index=186&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2022, the company repurchased **417,861 shares** for **$37.4 million** under its **$550 million** stock repurchase program, with **$211.5 million** remaining available Share Repurchases for Q2 2022 | Period | Shares Purchased | Average Price Paid | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | April 2022 | 0 | $0.00 | $0 | | May 2022 | 177,761 | $95.63 | $17.0M | | June 2022 | 240,100 | $85.15 | $20.4M | | **Total Q2** | **417,861** | **$89.61** | **$37.4M** | - As of June 30, 2022, approximately **$211.5 million** remained available for purchase under the company's stock repurchase program[188](index=188&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL data, and incorporates previously filed documents by reference - Exhibits filed include Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[191](index=191&type=chunk)

LGI Homes, Inc. (NASDAQ:LGIH) Q1 2022 Earnings Conference Call May 3, 2022 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 Deepa Raghavan – Wells Fargo Doug Wardlaw – J.P. Morgan Jay McCanless – Wedbush Securities Truman Patterson – Wolfe Research Carl Reichardt – BTIG Alex Barron – Housing Research Ken Zener – KeyBanc Operator Welcome to LG ...

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 March 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 ...

LGI Homes, Inc. (NASDAQ:LGIH) Q4 2021 Earnings Conference Call February 15, 2022 12:30 PM ET Company Participants Joshua Fattor - Vice President, Investor Relations Eric Lipar - Chairman and Chief Executive Officer Charles Merdian - Chief Financial Officer and Treasurer Conference Call Participants Deepa Raghavan - Wells Fargo Securities Carl Reichardt - BTIG Jay McCanless - Wedbush Securities Mike Rehaut - JPMorgan Truman Patterson - Wolfe Research Disclaimer*: This transcript is designed to be used alongs ...

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, 2021 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 2021 Earnings Conference Call November 2, 2021 12:30 PM ET Company Participants Josh Fattor - Vice President, Investor Relations Eric Lipar - Chairman and Chief Executive Officer Charles Merdian - Chief Financial Officer and Treasurer Conference Call Participants Jay McCanless - Wedbush Carl Reichardt - BTIG Truman Patterson - Wolfe Research Ken Zener - KeyBanc Deepa Raghavan - Wells Fargo Securities Alex Barron - Housing Research Center Operator Welcome to LGI Homes Third Q ...

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, 2021 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 ...

LGI Homes, Inc. (NASDAQ:LGIH) Q2 2021 Earnings Conference Call August 3, 2021 12:30 PM ET Company Participants Joshua Fattor - VP, IR Eric Lipar - Chairman & CEO Charles Merdian - CFO & Treasurer Conference Call Participants Deepa Raghavan - Wells Fargo Securities Truman Patterson - Wolfe Research Margaret Wellborn - JPMorgan Chase & Co. Jay McCanless - Wedbush Securities Alex Barrón - Housing Research Center Operator Welcome to LGI Homes Second Quarter 2021 Conference Call. Today's call is being recorded, ...

PART I - FINANCIAL INFORMATION [Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20LGI%20Homes%2C%20Inc.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Presents LGI Homes, Inc.'s unaudited consolidated financial statements for Q2 and H1 2021, covering balance sheets, operations, equity, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$2.06 billion** by June 30, 2021, driven by cash and real estate inventory, with liabilities and equity also rising Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $111,704 | $35,942 | | Real estate inventory | $1,750,860 | $1,569,489 | | **Total assets** | **$2,058,837** | **$1,826,087** | | **Liabilities & Equity** | | | | Notes payable | $583,656 | $538,398 | | **Total liabilities** | **$772,431** | **$687,082** | | **Total equity** | **$1,286,406** | **$1,139,005** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Home sales revenues surged to **$791.5 million** in Q2 2021, driving net income to **$118.1 million**, with strong growth continuing into H1 Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Home sales revenues | $791,512 | $481,602 | $1,497,465 | $936,329 | | Operating income | $146,007 | $67,834 | $268,450 | $121,712 | | Net income | $118,134 | $55,624 | $217,792 | $98,463 | | Diluted EPS | $4.71 | $2.21 | $8.66 | $3.88 | [Consolidated Statements of Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity increased to **$1.29 billion** by June 30, 2021, driven by **$217.8 million** in net income, partially offset by stock repurchases - Key changes in equity for the six months ended June 30, 2021 include net income of **$217.8 million** ($99.7M in Q1 and $118.1M in Q2) and stock repurchases totaling **$81.6 million** ($25.8M in Q1 and $55.8M in Q2)[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by **$75.8 million** in H1 2021, driven by operating activities, partially offset by investing and financing outflows Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $139,852 | $146,072 | | Net cash used in investing activities | ($29,763) | ($1,685) | | Net cash used in financing activities | ($34,327) | ($133,630) | | **Net increase in cash** | **$75,762** | **$10,757** | | **Cash and cash equivalents, end of period** | **$111,704** | **$49,102** | [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Provides detailed information supporting financial statements, covering revenue recognition, inventory, debt, stock compensation, segment reporting, and subsequent events Home Sales Revenues by Stream (in thousands) | Revenue Stream | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Retail home sales | $696,826 | $443,507 | $1,340,398 | $853,909 | | Wholesale home sales | $94,686 | $38,095 | $157,067 | $82,420 | | **Total** | **$791,512** | **$481,602** | **$1,497,465** | **$936,329** | Real Estate Inventory (in thousands) | Category | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Land, land under development and finished lots | $1,105,388 | $981,838 | | Homes in progress | $554,012 | $337,364 | | Completed homes | $62,258 | $220,086 | | **Total** | **$1,750,860** | **$1,569,489** | - On May 6, 2021, the company acquired real estate assets from KenRoe Inc. for approximately **$27.3 million** in cash, expanding its presence in the Minneapolis market with about **100 homes** under construction and over **3,000 owned and controlled lots**[40](index=40&type=chunk) - Subsequent to the quarter end, on July 15, 2021, the company redeemed all outstanding 6.875% Senior Notes due 2026. On July 14, 2021, it acquired assets from Buffington Homebuilding Group in Austin, TX for approximately **$40.0 million**[86](index=86&type=chunk)[87](index=87&type=chunk) [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 discusses strong Q2 and H1 2021 financial performance, highlighting significant growth in revenues, net income, and home closings, driven by strong demand [Key Results](index=21&type=section&id=Key%20Results) The company reported substantial year-over-year growth in Q2 and H1 2021, with Q2 home sales revenues up **64.3%** and net income up **112.4%** Q2 2021 vs Q2 2020 Performance | Metric | Q2 2021 | Q2 2020 | % Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $791.5M | $481.6M | +64.3% | | Homes closed | 2,856 | 2,005 | +42.4% | | Average sales price | $277,140 | $240,200 | +15.4% | | Net income | $118.1M | $55.6M | +112.4% | H1 2021 vs H1 2020 Performance | Metric | H1 2021 | H1 2020 | % Change | | :--- | :--- | :--- | :--- | | Home sales revenues | $1.5B | $936.3M | +59.9% | | Homes closed | 5,417 | 3,840 | +41.1% | | Average sales price | $276,438 | $243,836 | +13.4% | | Net income | $217.8M | $98.5M | +121.2% | [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Strong performance driven by demand and pricing, with Q2 2021 home sales revenue up **64.3%** and gross margin expanding to **27.0%**, achieving operating leverage - For Q2 2021, home sales revenue increased **64.3%** YoY, driven by a **42.4%** increase in homes closed and a **15.4%** increase in average sales price. Gross margin percentage rose to **27.0%** from **24.5%** due to price increases outpacing input cost rises[108](index=108&type=chunk)[111](index=111&type=chunk) - For H1 2021, home sales revenue increased **59.9%** YoY, driven by a **41.1%** increase in homes closed and a **13.4%** increase in average sales price. Gross margin percentage improved to **27.0%** from **24.0%**[118](index=118&type=chunk)[121](index=121&type=chunk) - Selling, General & Administrative (SG&A) expenses decreased as a percentage of home sales revenues due to operating leverage from higher revenues. For Q2 2021, selling expenses were **5.7%** of revenue (vs. **6.2%** in Q2 2020) and G&A was **2.9%** (vs. **4.2%**)[112](index=112&type=chunk)[113](index=113&type=chunk) [Non-GAAP Measures](index=28&type=section&id=Non-GAAP%20Measures) The company uses non-GAAP measures like Adjusted Gross Margin and EBITDA, with Q2 2021 Adjusted Gross Margin at **28.5%** and Adjusted EBITDA margin at **20.0%** Reconciliation of Adjusted Gross Margin (in thousands) | | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Gross margin | $214,079 | $117,973 | $404,028 | $224,537 | | Capitalized interest | $10,442 | $8,684 | $21,115 | $17,614 | | Purchase accounting adj. | $1,446 | $1,252 | $2,258 | $1,875 | | **Adjusted gross margin** | **$225,967** | **$127,909** | **$427,401** | **$244,026** | | **Adjusted gross margin %** | **28.5%** | **26.6%** | **28.5%** | **26.1%** | Reconciliation of Adjusted EBITDA (in thousands) | | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income | $118,134 | $55,624 | $217,792 | $98,463 | | Adjustments | $40,010 | $22,302 | $74,568 | $43,055 | | **Adjusted EBITDA** | **$158,144** | **$77,926** | **$292,360** | **$141,518** | | **Adjusted EBITDA margin %** | **20.0%** | **16.2%** | **19.5%** | **15.1%** | [Backlog and Land Inventory](index=30&type=section&id=Backlog%20and%20Land%20Inventory) Ending backlog more than doubled to **$1.43 billion** by June 30, 2021, with cancellation rate improving to **14.8%**, and total owned/controlled lots reaching **75,910** Backlog Data | Metric | As of June 30, 2021 | As of June 30, 2020 | | :--- | :--- | :--- | | Net orders (H1) | 7,254 | 4,734 | | Cancellation rate (H1) | 14.8% | 21.8% | | Ending backlog – homes | 4,801 | 2,127 | | Ending backlog – value | $1,434,382,000 | $558,007,000 | Owned and Controlled Lots by Segment (as of June 30, 2021) | Reportable Segment | Owned | Controlled | Total | | :--- | :--- | :--- | :--- | | Central | 19,110 | 13,529 | 32,639 | | Southeast | 11,944 | 7,201 | 19,145 | | Northwest | 3,685 | 4,899 | 8,584 | | West | 4,942 | 4,776 | 9,718 | | Florida | 2,811 | 3,013 | 5,824 | | **Total** | **42,492** | **33,418** | **75,910** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$111.7 million** cash and **$714.5 million** available credit, issuing new senior notes and repurchasing common stock - On April 28, 2021, the company amended its credit agreement, increasing commitments to **$850.0 million**, extending the maturity to 2025, and reducing the applicable margin for LIBOR loans[152](index=152&type=chunk) - On June 28, 2021, the company issued **$300.0 million** of **4.000%** Senior Notes due 2029. The proceeds were used to redeem all outstanding **$300.0 million** of **6.875%** Senior Notes due 2026 in July 2021[156](index=156&type=chunk)[159](index=159&type=chunk) - During the six months ended June 30, 2021, the company repurchased **551,221 shares** of its common stock for **$81.6 million**. As of June 30, 2021, **$218.8 million** remained available under the stock repurchase program[162](index=162&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity, with minimal variable-rate debt outstanding, and a hypothetical 100 basis point rate increase having an immaterial impact - The company is exposed to interest rate risk on its variable-rate debt under the Credit Agreement. As of June 30, 2021, only **$0.3 million** of variable rate debt was outstanding[185](index=185&type=chunk) - A hypothetical **100 basis point** increase in the average interest rate above the **0.50%** LIBOR floor would increase annual interest cost by approximately **$0.0 million**, indicating minimal current exposure on outstanding balances[185](index=185&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2021, the company's disclosure controls and procedures were **effective**[188](index=188&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[191](index=191&type=chunk) PART II - OTHER INFORMATION [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2020 Annual Report on Form 10-K - There have been **no material changes** to the risk factors disclosed in the company's 2020 Form 10-K[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2021, the company repurchased **335,000** shares for **$55.8 million**, with **$218.8 million** remaining available under the repurchase program Common Stock Repurchases (Q2 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | Value of Shares Remaining for Purchase (end of period) | | :--- | :--- | :--- | :--- | | May 2021 | 160,000 | $172.76 | $246,943,000 | | June 2021 | 175,000 | $160.77 | $218,809,000 | | **Total Q2** | **335,000** | **$166.50** | **$218,809,000** | [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and incorporated by reference documents - Key exhibits filed include **CEO and CFO certifications** (31.1, 31.2, 32.1, 32.2) and XBRL data files. The Third Supplemental Indenture for the **4.000%** Senior Notes and the Fifth Amended and Restated Credit Agreement were incorporated by reference[198](index=198&type=chunk)

INVESTOR PRESENTATION May 2021 CAUTIONARY STATEMENT | --- | --- | |-------|------------------------| | | | | | © LGI Homes, Inc. \| 2 | COMPANY HIGHLIGHTS Founded in 2003, LGI Homes is one of the nation's fastest growing homebuilders. Currently recognized as the 10th largest residential builder in America based on units closed, LGI Homes' unique business model is focused on offering entry-level homebuyers quality homes at affordable prices through a wellestablished sales and marketing approach, a culture of ...