Century Communities, Inc. (Form: 10-Q, Received: 07/29/2021 06:03:56)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36491

Century Communities, Inc.

(Exact name of registrant as specified in its charter)


Delaware		68-0521411
(State or other jurisdiction of ‎incorporation or organization)		(I.R.S. Employer ‎Identification No.)

8390 East Crescent Parkway, Suite 650 ‎Greenwood Village, CO		80111
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code): (303) 770-8300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	CCS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

On July 23, 2021, 33,760,940 shares of common stock, par value $0.01 per share, were outstanding.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Century Communities, Inc.

Condensed Consolidated Balance Sheets

As of June 30, 2021 and December 31, 2020

(in thousands, except share and per share amounts)



	June 30,		December 31,
	2021		2020
Assets	(unaudited)		(audited)
Cash and cash equivalents	$	419,416	$	394,001
Cash held in escrow		37,640		23,149
Accounts receivable		30,286		21,781
Inventories		1,948,769		1,929,664
Mortgage loans held for sale		235,712		282,639
Prepaid expenses and other assets		147,284		122,630
Property and equipment, net		26,359		28,384
Deferred tax assets, net		18,392		12,450
Goodwill		30,395		30,395
Total assets	$	2,894,253	$	2,845,093
Liabilities and stockholders' equity
Liabilities:
Accounts payable	$	80,609	$	107,712
Accrued expenses and other liabilities		263,956		302,751
Notes payable		901,254		894,875
Revolving line of credit		—		—
Mortgage repurchase facilities		159,776		259,050
Total liabilities		1,405,595		1,564,388
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none outstanding		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized, 33,760,940 and 33,350,633 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		338		334
Additional paid-in capital		690,707		697,200
Retained earnings		797,613		583,171
Total stockholders' equity		1,488,658		1,280,705
Total liabilities and stockholders' equity	$	2,894,253	$	2,845,093

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2021 and 2020

(in thousands, except share and per share amounts)



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues
Homebuilding revenues
Home sales revenues	$	1,004,789	$	747,415	$	1,964,068	$	1,320,125
Land sales and other revenues		8,258		3,307		23,928		23,411
Total homebuilding revenues		1,013,047		750,722		1,987,996		1,343,536
Financial services revenues		29,865		25,722		63,485		35,517
Total revenues		1,042,912		776,444		2,051,481		1,379,053
Homebuilding cost of revenues
Cost of home sales revenues		(764,668)		(620,655)		(1,521,175)		(1,091,181)
Cost of land sales and other revenues		(7,000)		(2,384)		(17,020)		(16,551)
Total homebuilding cost of revenues		(771,668)		(623,039)		(1,538,195)		(1,107,732)
Financial services costs		(18,168)		(12,744)		(36,469)		(22,330)
Selling, general and administrative		(99,656)		(86,706)		(191,807)		(160,325)
Inventory impairment and other		(41)		(910)		(41)		(1,691)
Other income (expense)		(1,245)		(2,942)		(1,786)		(2,784)
Income before income tax expense		152,134		50,103		283,183		84,191
Income tax expense		(34,224)		(11,653)		(63,621)		(19,615)
Net income	$	117,910	$	38,450	$	219,562	$	64,576

Earnings per share:
Basic	$	3.49	$	1.15	$	6.52	$	1.94
Diluted	$	3.47	$	1.15	$	6.47	$	1.93
Weighted average common shares outstanding:
Basic		33,738,586		33,340,184		33,651,727		33,274,056
Diluted		33,956,638		33,461,694		33,920,939		33,469,069

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(in thousands)


	Six Months Ended June 30,
	2021		2020
Operating activities
Net income	$	219,562	$	64,576
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,655		6,842
Stock-based compensation expense		7,212		8,588
Fair value of mortgage loans held for sale and other		3,359		(6,175)
Inventory impairment and other		41		1,691
Deferred income taxes		(5,942)		(1,322)
Loss on disposition of assets		804		914
Changes in assets and liabilities:
Cash held in escrow		(14,491)		(11,311)
Accounts receivable		(8,505)		4,592
Inventories		(56,779)		138,049
Mortgage loans held for sale		42,659		(30,990)
Prepaid expenses and other assets		(25,694)		13,229
Accounts payable		(27,103)		(35,158)
Accrued expenses and other liabilities		2,643		20,259
Net cash provided by operating activities		143,421		173,784
Investing activities
Purchases of property and equipment		(4,405)		(4,913)
Other investing activities		54		62
Net cash used in investing activities		(4,351)		(4,851)
Financing activities
Borrowings under revolving credit facilities		—		678,000
Payments on revolving credit facilities		—		(746,700)
Proceeds from issuance of insurance premium notes and other		9,477		4,542
Principal payments on insurance notes payable		(3,854)		(4,220)
Net proceeds (payments) on mortgage repurchase facilities		(99,274)		23,374
Withholding of common stock upon vesting of restricted stock units		(13,726)		(5,145)
Dividend payments		(5,065)		—
Other		(34)		(345)
Net cash used in financing activities		(112,476)		(50,494)
Net increase	$	26,594	$	118,439
Cash and cash equivalents and Restricted cash
Beginning of period		398,081		58,521
End of period	$	424,675	$	176,960
Supplemental cash flow disclosure
Cash paid for income taxes	$	78,909	$	410
Cash and cash equivalents and Restricted cash
Cash and cash equivalents	$	419,416	$	173,521
Restricted cash (Note 5)		5,259		3,439
Cash and cash equivalents and Restricted cash	$	424,675	$	176,960

See Notes to Unaudited Condensed Consolidated Financial Statements

Century Communities, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

For the Three and Six Months Ended June 30, 2021 and 2020

(in thousands)

For the Three Months Ended June 30, 2021 and 2020


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Retained Earnings		Total Stockholders' Equity
Balance at March 31, 2021	33,708	$	337	$	688,009	$	684,823	$	1,373,169
Vesting of restricted stock units	74		1		(1)		—		—
Withholding of common stock upon vesting of restricted stock units	(21)		—		(1,549)		—		(1,549)
Stock-based compensation expense	—		—		4,193		—		4,193
Cash dividends declared	—		—		55		(5,120)		(5,065)
Net income	—		—		—		117,910		117,910
Balance at June 30, 2021	33,761	$	338	$	690,707	$	797,613	$	1,488,658


Balance at March 31, 2020	33,319	$	333	$	681,060	$	403,140	$	1,084,533
Vesting of restricted stock units	42		1		(1)		—		—
Withholding of common stock upon vesting of restricted stock units	(10)		—		(168)		—		(168)
Stock-based compensation expense	—		—		6,903		—		6,903
Other	—		—		(230)		—		(230)
Net income	—		—		—		38,450		38,450
Balance at June 30, 2020	33,351	$	334	$	687,564	$	441,590	$	1,129,488

For the Six Months Ended June 30, 2021 and 2020


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Retained Earnings		Total Stockholders' Equity
Balance at December 31, 2020	33,351	$	334	$	697,200	$	583,171	$	1,280,705
Vesting of restricted stock units	675		7		(7)		—		—
Withholding of common stock upon vesting of restricted stock units	(265)		(3)		(13,723)		—		(13,726)
Stock-based compensation expense	—		—		7,212		—		7,212
Cash dividends declared	—		—		55		(5,120)		(5,065)
Other	—		—		(30)		—		(30)
Net income	—		—		—		219,562		219,562
Balance at June 30, 2021	33,761	$	338	$	690,707	$	797,613	$	1,488,658


Balance at December 31, 2019	33,067	$	331	$	684,354	$	377,014	$	1,061,699
Vesting of restricted stock units	454		5		(5)		—		—
Withholding of common stock upon vesting of restricted stock units	(170)		(2)		(5,143)		—		(5,145)
Stock-based compensation expense	—		—		8,588		—		8,588
Other	—		—		(230)		—		(230)
Net income	—		—		—		64,576		64,576
Balance at June 30, 2020	33,351	$	334	$	687,564	$	441,590	$	1,129,488

See Notes to Unaudited Condensed Consolidated Financial Statements

‎

Century Communities, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2021

1. Basis of Presentation

Century Communities, Inc. (which we refer to as “we,” “CCS,” or the “Company”), together with its subsidiaries, is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 17 states. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand targets a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade opportunities. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade opportunities. Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Additionally, our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, and IHL Home Insurance Agency, LLC, which provide mortgage, title, and insurance services, respectively, primarily to our homebuyers, have been identified as our Financial Services segment.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (which we refer to as “GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of our financial position and results of operations for the periods presented. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by GAAP and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 5, 2021.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities for which the Company is deemed to be the primary beneficiary. We currently do not have any variable interest entities in which we are deemed the primary beneficiary. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Recently Adopted Accounting Standards

Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). The standard simplifies the accounting for income taxes, eliminates certain exceptions, and clarifies certain aspects of ASC 740 to promote consistency among reporting entities. We adopted this standard on January 1, 2021 with no material effect on the condensed consolidated financial statements and related disclosures.

2. Reporting Segments

Our homebuilding operations are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 17 states. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand is managed by geographic location, and each of our four geographic regions targets a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade selections. Each of our four geographic regions is considered a separate operating segment. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the

internet, and generally provides no option or upgrade selections. Our Century Complete brand currently has operations in 11 states and is managed separately from our four geographic regions. Accordingly, it is considered a separate operating segment.

The management of our four Century Communities geographic regions and Century Complete reports to our chief operating decision makers (which we refer to as “CODMs”), the Co-Chief Executive Officers of our Company. The CODMs review the results of our operations, including total revenue and income before income tax expense to determine profitability and to allocate resources. Accordingly, we have presented our homebuilding operations as the following five reportable segments:

West (California and Washington)

Mountain (Arizona, Colorado, Nevada, and Utah)

Texas

Southeast (Georgia, North Carolina, South Carolina, Tennessee, and Florida)

Century Complete (Alabama, Arizona, Florida, Georgia, Indiana, Kentucky, Michigan, North Carolina, Ohio, South Carolina, and Texas)

We have also identified our Financial Services operations, which provide mortgage, title, and insurance services to our homebuyers, as a sixth reportable segment. Our Corporate operations are a non-operating segment, as they serve to support our homebuilding, and to a lesser extent our financial services operations, through functions, such as our executive, finance, treasury, human resources, accounting and legal departments. The following table summarizes total revenue and income before income tax expense by segment (in thousands):

‎




	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
West	$	237,367	$	166,125	$	423,193	$	298,012
Mountain		295,001		177,569		600,314		348,721
Texas		132,789		98,678		220,524		158,842
Southeast		168,519		174,626		388,925		306,128
Century Complete		179,371		133,724		355,040		231,833
Financial Services		29,865		25,722		63,485		35,517
Corporate		—		—		—		—
Total revenue	$	1,042,912	$	776,444	$	2,051,481	$	1,379,053

Income (loss) before income tax expense:
West	$	40,903	$	13,747	$	68,364	$	29,089
Mountain		55,814		20,616		107,794		39,094
Texas		19,139		9,610		27,670		15,108
Southeast		26,096		12,020		49,536		20,329
Century Complete		23,089		8,548		44,819		9,333
Financial Services		11,697		12,978		27,016		13,187
Corporate		(24,604)		(27,416)		(42,016)		(41,949)
Total income before income tax expense	$	152,134	$	50,103	$	283,183	$	84,191

The following table summarizes total assets by segment (in thousands):



	June 30,		December 31,
	2021		2020
West	$	611,192	$	536,907
Mountain		803,816		778,198
Texas		238,221		207,746
Southeast		279,101		329,930
Century Complete		284,838		218,604
Financial Services		333,109		421,153
Corporate		343,976		352,555
Total assets	$	2,894,253	$	2,845,093

Corporate assets primarily include certain cash and cash equivalents, certain property and equipment, prepaid insurance, and deferred financing costs on our revolving line of credit.

3. Inventories

Inventories included the following (in thousands):



	June 30,		December 31,
	2021		2020
Homes under construction	$	1,156,881	$	1,040,584
Land and land development		737,727		828,242
Capitalized interest		54,161		60,838
Total inventories	$	1,948,769	$	1,929,664

4. Financial Services

Our Financial Services are principally comprised of our mortgage lending operations, Inspire Home Loans Inc. (which we refer to as “Inspire”). Inspire is a full-service mortgage lender and primarily originates mortgage loans for our homebuyers. Inspire sells

substantially all of the loans it originates either as loans with servicing rights released, or with servicing rights retained, in the secondary mortgage market within a short period of time after origination, generally within 30 days. Inspire primarily finances these loans using its mortgage repurchase facilities. Mortgage loans in process for which interest rates were locked by borrowers, or interest rate lock commitments, totaled approximately $148.7 million and $172.3 million at June 30, 2021 and December 31, 2020, respectively, and carried a weighted average interest rate of approximately 3.2% and 2.8%, respectively. As of June 30, 2021 and December 31, 2020, Inspire had mortgage loans held for sale with an aggregate fair value of $235.7 million and $282.6 million, respectively, and an aggregate outstanding principal balance of $226.9 million and $269.6 million, respectively. Our net gains on the sale of mortgage loans were $23.9 million and $16.1 million for the three months ended June 30, 2021 and 2020, respectively, and were $46.8 million and $27.6 million for the six months ended June 30, 2021 and 2020, respectively, and are included in the financial services revenue on the condensed consolidated statements of operations. Interest rate risks related to these obligations are typically mitigated by the preselling of loans to investors or through our program to economically hedge interest rates.

Mortgage loans in process for which interest rates were committed to borrowers, mortgage loans held-for-sale, including the rights to service the mortgage loans, as well as the derivative instrument used to economically hedge our interest rate risk, which are typically forward commitments on mortgage backed securities, are carried at fair value and changes in fair value are reflected in financial services revenue on the condensed consolidated statements of operations. Management believes carrying loans held-for-sale and the derivative instruments used to economically hedge them at fair value improves financial reporting by more accurately reflecting the underlying transaction. Refer to Note 11 – Fair Value Disclosures for further information regarding our derivative instruments.

5. Prepaid Expenses and Other Assets

Prepaid expenses and other assets included the following (in thousands):


	June 30,		December 31,
	2021		2020
Prepaid insurance	$	22,060	$	18,699
Lot option and escrow deposits		52,749		39,985
Performance deposits		10,104		9,372
Deferred financing costs on revolving line of credit, net		5,727		3,206
Restricted cash ⁽¹⁾		5,259		4,080
Secured note receivable		2,380		2,434
Right of use assets		14,012		16,175
Other assets and prepaid expenses		8,327		8,082
Mortgage loans held for investment		10,823		8,727
Derivative assets and mortgage servicing rights		15,843		11,870
Total prepaid expenses and other assets	$	147,284	$	122,630

(1)Restricted cash consists of earnest money deposits for home sale contracts held by third parties as required by various jurisdictions, and certain pledge balances associated with our mortgage repurchase facilities.

6. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities included the following (in thousands):



	June 30,		December 31,
	2021		2020
Earnest money deposits	$	42,114	$	30,578
Warranty reserve		13,862		13,824
Accrued compensation costs		51,842		60,692
Land development and home construction accruals		81,381		80,088
Liability for product financing arrangements		19,808		62,084
Accrued interest		13,649		13,649
Lease liabilities - operating leases		14,551		16,801
Income taxes payable		—		3,118
Derivative liabilities		758		3,807
Other accrued liabilities		25,991		18,110
Total accrued expenses and other liabilities	$	263,956	$	302,751

7. Warranties

Estimated future direct warranty costs are accrued and charged to cost of home sales revenues in the period when the related home sales revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the condensed consolidated balance sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through a model that incorporates historical payment trends and adjust the amounts recorded, if necessary. Based on warranty payment trends relative to our estimates at the time of home closing, we reduced our warranty reserve by $0.4 million and $0.2 million during the three months ended June 30, 2021 and 2020, respectively, and we reduced our warranty reserve by $2.2 million and $1.3 million during the six months ended June 30, 2021 and 2020, respectively. These adjustments are included in cost of home sales revenues on our condensed consolidated statements of operations. Changes in our warranty accrual for the three and six months ended June 30, 2021 and 2020 are detailed in the table below (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Beginning balance	$	13,480	$	9,727	$	13,824	$	9,731
Warranty expense provisions		2,382		2,274		4,680		4,051
Payments		(1,605)		(612)		(2,444)		(1,301)
Warranty adjustment		(395)		(168)		(2,198)		(1,260)
Ending balance	$	13,862	$	11,221	$	13,862	$	11,221

8. Debt

Our outstanding debt obligations included the following as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30,		December 31,
	2021		2020
6.750% senior notes, due May 2027⁽¹⁾	$	495,176	$	494,768
5.875% senior notes, due July 2025⁽¹⁾		397,170		396,821
Other financing obligations		8,908		3,286
Notes payable		901,254		894,875
Revolving line of credit		—		—
Mortgage repurchase facilities		159,776		259,050
Total debt	$	1,061,030	$	1,153,925

⁽¹⁾ The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest expense over the respective terms of the senior notes.

Revolving Line of Credit

On June 5, 2018, we entered into an Amended and Restated Credit Agreement with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, the lenders party thereto and certain of our subsidiaries (which we refer to as the “Amended and Restated Credit Agreement”), which provided us with a revolving line of credit of up to $640.0 million, and unless terminated earlier, was scheduled to mature on April 30, 2023.

On May 21, 2021, we entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, and the lenders party thereto. The Second A&R Credit Agreement, which amended and restated the Amended and Restated Credit Agreement, provides us with a senior unsecured revolving line of credit (the “Credit Facility”) of up to $800 million, and unless terminated earlier, will mature on April 30, 2026. The Credit Facility includes a $250.0 million sublimit for standby letters of credit. Under the terms of the Second A&R Credit Agreement, the Company is entitled to request an increase in the size of the Credit Facility by an amount not exceeding $200 million. Our obligations under the Second A&R Credit Agreement are guaranteed by certain of our subsidiaries. The Second A&R Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default. Borrowings under the Second A&R Credit Agreement bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.05% and 2.65% per annum, and if made available in the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.05% and 1.65% per annum.

As of June 30, 2021 and December 31, 2020, no amounts were outstanding under the Credit Facility, and we were in compliance with all covenants.

Mortgage Repurchase Facilities – Financial Services

Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of June 30, 2021 and December 31, 2020, we had $159.8 million and $259.1 million outstanding under these repurchase facilities, respectively, and were in compliance with all covenants thereunder.

During the three months ended June 30, 2021 and 2020, we incurred interest expense on the repurchase facilities of $0.6 million and $0.5 million, respectively, which are included in financial services costs on our condensed consolidated statements of operations. During the six months ended June 30, 2021 and 2020, we incurred interest expense on the repurchase facilities of $1.4 million and $1.3 million, respectively.

9. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the three and six months ended June 30, 2021 and 2020, we capitalized all interest costs incurred during these periods, except for interest incurred on our mortgage repurchase facilities.

Our interest costs are as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Interest capitalized beginning of period	$	57,509	$	70,837	$	60,838	$	67,069
Interest capitalized during period		15,058		18,168		30,106		35,621
Less: capitalized interest in cost of sales		(18,406)		(18,694)		(36,783)		(32,379)
Interest capitalized end of period	$	54,161	$	70,311	$	54,161	$	70,311

10. Income Taxes

At the end of each interim period we are required to estimate our annual effective tax rate for the fiscal year, and to use that rate to provide for income taxes for the current year-to-date reporting period. Our 2021 estimated annual effective tax rate, before discrete items, of 23.5% is driven by our blended federal and state statutory rate of 24.7%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation and estimated federal energy credits for current year home deliveries, which decreased our rate by 1.2%.

For the six months ended June 30, 2021, our estimated annual rate of 23.5% was impacted by discrete items which had a net impact of decreasing our rate by 1.0%, including federal energy tax credits claimed on prior year home deliveries in excess of previous estimates and excess tax benefits for vested stock-based compensation.

For the three months ended June 30, 2021 and 2020, we recorded income tax expense of $34.2 million and $11.7 million, respectively. For the six months ended June 30, 2021 and 2020, we recorded income tax expense of $63.6 million and $19.6 million, respectively.

11. Fair Value Disclosures

Fair value measurements are used for the Company’s mortgage loans held for sale, mortgage loans held for investment, mortgage servicing rights, interest rate lock commitments and other derivative instruments on a recurring basis. We also utilize fair value measurements on a non-recurring basis for inventories, and intangible assets when events and circumstances indicate that the carrying value is not recoverable. The fair value hierarchy and its application to the Company’s assets and liabilities is as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date.

Mortgage loans held for sale – Fair value is based on quoted market prices for committed mortgage loans.

Derivative assets and liabilities – Derivative assets and liabilities are related to our financial services segment and fair value is based on market prices for similar instruments.

Level 3 – Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at the measurement date.

Mortgage servicing rights - The fair value of the mortgage servicing rights is calculated using third-party valuations. The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates.

Mortgage loans held for investment – The fair value of mortgage loans held for investment is calculated based on Level 3 analysis which incorporates information including the value of underlying collateral, from markets where there is little observable trading activity.

The following outlines the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020, respectively:


			June 30,		December 31,
	Balance Sheet Classification	Hierarchy	2021		2020

Mortgage loans held for sale	Mortgage loans held for sale	Level 2	$	235,712	$	282,639
Mortgage loans held for investment	Prepaid expenses and other assets	Level 3	$	10,823	$	8,727
Derivative assets	Prepaid expenses and other assets	Level 2	$	5,545	$	7,755
Mortgage servicing rights ⁽¹⁾	Prepaid expenses and other assets	Level 3	$	10,298	$	4,115
Derivative liabilities	Accrued expenses and other liabilities	Level 2	$	758	$	3,807

(1)The unobservable inputs used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and delinquency rates, which were 9.0%, 9.8%, and 0.3%, respectively as of June 30, 2021, and 10.4%, 9.8%, and 0.6%, respectively, as of December 31, 2020. The high and low end of the range of unobservable inputs used in the valuation did not result in a significant change to the fair value measurement.

The following table represents the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements:



	Three Months Ended June 30,				Six Months Ended June 30,
Mortgage servicing rights:		2021		2020		2021		2020
Beginning of period	$	8,249	$	—	$	4,115	$	—
Originations		2,500		—		6,382		—
Disposals/settlements		(143)		—		(270)		—
Changes in fair value		(308)		—		71		—
End of period	$	10,298	$	—	$	10,298	$	—

	Three Months Ended June 30,				Six Months Ended June 30,
Mortgage loans held-for-investment		2021		2020		2021		2020
Beginning of period	$	10,078	$	6,387	$	8,727	$	3,385
Originations		1,981		1,209		3,381		4,646
Disposals/settlements		(1,180)		(754)		(1,180)		(1,173)
Reduction in unpaid principal balance		(56)		(29)		(105)		(45)
Changes in fair value		—		—		—		—
End of period	$	10,823	$	6,813	$	10,823	$	6,813

For the financial assets and liabilities that the Company does not reflect at fair value, the following present both their respective carrying value and fair value at June 30, 2021 and December 31, 2020, respectively.



		June 30, 2021				December 31, 2020

	Hierarchy	Carrying		Fair Value		Carrying		Fair Value
Cash and cash equivalents	Level 1	$	419,416	$	419,416	$	394,001	$	394,001
Secured notes receivable ⁽¹⁾	Level 2	$	2,380	$	2,380	$	2,434	$	2,448
5.875% senior notes ⁽²⁾⁽³⁾	Level 2	$	397,170	$	412,500	$	396,821	$	417,500
6.750% senior notes ⁽²⁾⁽³⁾	Level 2	$	495,176	$	530,000	$	494,768	$	533,750
Revolving line of credit⁽⁴⁾	Level 2	$	—	$	—	$	—	$	—
Other financing obligations⁽⁴⁾⁽⁵⁾	Level 3	$	8,908	$	8,908	$	3,286	$	3,286
Mortgage repurchase facilities⁽⁴⁾	Level 2	$	159,776	$	159,776	$	259,050	$	259,050

(1)During the second quarter of 2021, the maturity of the secured note receivable was extended by two months to July of 2021, and the secured note receivable was paid in full in July 2021. Carrying amount approximates fair value due to short-term nature.

(2)Estimated fair value of the senior notes is based on recent trading activity in inactive markets.

(3)Carrying amounts include any associated unamortized deferred financing costs, premiums and discounts. As of June 30, 2021, these amounts totaled $4.8 million and $2.8 million for the 6.750% senior notes and 5.875% senior notes, respectively. As of December 31, 2020, these amounts totaled $5.2 million and $3.2 million for the 6.750% senior notes and 5.875% senior notes, respectively.

(4)Carrying amount approximates fair value due to short-term nature and interest rate terms.

(5)Insurance premium notes included in other financing obligations bore interest rates ranging from 3.200% 3.240% during the periods ended June 30, 2021 and December 31, 2020.

Non-financial assets and liabilities include items such as inventory and property and equipment that are measured at fair value when acquired and as a result of impairments, if deemed necessary. Nominal impairment charges were recorded in the three and six months ended June 30, 2021. During the three and six months ended June 30, 2020, we recognized impairment charges of $0.9 million and $1.7 million, respectively. The estimated fair value of the communities were determined through a discounted cash flow approach utilizing Level 3 inputs. Changes in our cash flow projections in future periods related to these communities may change our conclusions on the recoverability of inventory in the future.

12. Stock-Based Compensation

During the six months ended June 30, 2021, we granted restricted stock units (which we refer to as “RSUs”) covering 0.2 million shares of common stock, respectively, with a grant date fair value of $53.43, that primarily vest over a three year period. During the six months ended June 30, 2021, we also granted performance share units (which we refer to as “PSUs”) covering up to 0.2 million shares of common stock, assuming maximum level of performance, with a grant date fair value of $58.28 per share.

Granted PSUs are subject to both service and performance vesting conditions. The quantity of shares that will ultimately vest for the PSUs ranges from 0% to 250% of a targeted number of shares for each participant and will be determined based on an achievement of a three year pre-tax income performance goal. Approximately 0.8 million shares will vest if the defined maximum performance targets are met, and no shares will vest if the defined minimum performance targets are not met.

A summary of our outstanding RSUs and PSUs, assuming current estimated level of performance achievement, are as follows (in thousands, except years):


	As of June 30, 2021
Unvested units		1,123
Unrecognized compensation cost	$	24,071
Weighted-average period to recognize compensation cost		2.0 years

During the three months ended June 30, 2021 and 2020, we recognized stock-based compensation expense of $4.2 million and $6.9 million, respectively. During the six months ended June 30, 2021 and 2020, we recognized stock-based compensation expense of $7.2 million and $8.6 million, respectively. Stock-based compensation expense is included in selling, general, and administrative expense on our condensed consolidated statements of operations.

During the three months ended June 30, 2020, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards. Accordingly, our estimate of the number of shares which will ultimately vest under our PSU awards increased by 0.2 million, and we recorded a cumulative catch-up adjustment to increase stock-based compensation expense of $2.9 million ($2.2 million net of tax), or $0.07 per share (basic and diluted) for the three months ended June 30, 2020.

13. Stockholders’ Equity

Our authorized capital stock consists of 100.0 million shares of common stock, par value $0.01 per share, and 50.0 million shares of preferred stock, par value $0.01 per share. As of June 30, 2021, and December 31, 2020 there were 33.8 million and 33.4 million shares of common stock issued and outstanding, respectively, and no shares of preferred stock outstanding.

On May 10, 2017, our stockholders approved the adoption of the Century Communities, Inc. 2017 Omnibus Incentive Plan (which we refer to as our “2017 Incentive Plan”), which replaced our First Amended & Restated 2013 Long-Term Incentive Plan. We had reserved a total of 1.8 million shares of our common stock for issuance under our First Amended & Restated 2013 Long-Term Incentive Plan, of which approximately 0.6 million shares rolled over into the 2017 Incentive Plan when it became effective. On May 8, 2019, our stockholders approved the Century Communities, Inc. Amended and Restated 2017 Omnibus Incentive Plan (which we refer to as our “Amended 2017 Incentive Plan”), which increased the number of shares of our common stock authorized for issuance under the 2017 Incentive Plan by an additional 1.631 million shares. We issued 0.7 million and 0.5 million shares of common stock related to the vesting of RSUs during the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, approximately 0.7 million shares of common stock remained available for issuance under the Amended 2017 Incentive Plan.

On November 27, 2019, we entered into a Distribution Agreement with J.P. Morgan Securities LLC, BofA Securities, Inc., Citigroup Global Markets Inc., and Fifth Third Securities, Inc. (which we refer to as the “Distribution Agreement”), as sales agents pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through any of the sales agents party thereto in “at-the-market” offerings, in accordance with the terms and conditions set forth in the Distribution Agreement. This Distribution Agreement, which superseded and replaced a prior similar distribution agreement, had all $100.0 million available for sale as of June 30, 2021. We did not sell or issue any shares of our common stock during the three and six months ended June 30, 2021 and 2020, respectively. The Distribution Agreement will remain in full force and effect until terminated by either party pursuant to the terms of the agreement or such date that the maximum offering amount has been sold in accordance with the terms of the agreement. Sales cannot be made under the Distribution Agreement unless and until we file a prospectus supplement to our recently filed shelf registration statement that was filed on July 1, 2021, which prospectus supplement we intend to file in the near future.

On November 6, 2018, we authorized a stock repurchase program, under which we may repurchase up to 4,500,000 shares of our outstanding common stock. During the three and six months ended June 30, 2021 and 2020, we did not repurchase any shares of common stock. The maximum number of shares available to be purchased under the stock repurchase program as of June 30, 2021 was 3,812,939 shares.

On May 19, 2021, our Board of Directors announced the approval of the initiation of a quarterly cash dividend. Additionally, on May 19, 2021, our Board of Directors declared our first quarterly cash dividend of $0.15 per share and totaling $5.1 million, which was paid on June 16, 2021 to stockholders of record of our common stock as of June 2, 2021.

14. Earnings Per Share

We use the treasury stock method to calculate earnings per share as our currently issued non-vested RSUs and PSUs do not have participating rights.

The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, 2021 and 2020 (in thousands, except share and per share information):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Numerator
Net income	$	117,910	$	38,450	$	219,562	$	64,576
Denominator
Weighted average common shares outstanding - basic		33,738,586		33,340,184		33,651,727		33,274,056
Dilutive effect of restricted stock units		218,052		121,510		269,212		195,013
Weighted average common shares outstanding - diluted		33,956,638		33,461,694		33,920,939		33,469,069
Earnings per share:
Basic	$	3.49	$	1.15	$	6.52	$	1.94
Diluted	$	3.47	$	1.15	$	6.47	$	1.93

Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are antidilutive. We excluded 0.8 million common stock unit equivalents from diluted earnings per share during each of the three and six months ended June 30, 2021 and 2020 related to the PSUs for which performance conditions remained unsatisfied.

15. Commitments and Contingencies

Letters of Credit and Performance Bonds

Legal Proceedings

We are subject to claims and lawsuits that arise primarily in the ordinary course of business, which consist primarily of construction claims. It is the opinion of our management that if the claims have merit, parties other than the Company would be, at least in part, liable for the claims, and the eventual outcome of these claims will not have a material adverse effect upon our consolidated financial condition, results of operations, or cash flows. When we believe that a loss is probable and estimable, we record a charge to selling, general, and administrative expense on our condensed consolidated statements of operations for our estimated loss.

Under various insurance policies, we have the ability to recoup costs in excess of applicable self-insured retentions. Estimates of such amounts are recorded in other assets on our condensed consolidated balance sheet when recovery is probable.

We do not believe that the ultimate resolution of any claims and lawsuits will have a material adverse effect upon our consolidated financial position, results of operations, or cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Some of the statements included in this Quarterly Report on Form 10-Q (which we refer to as this “Form 10-Q”) constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, forecasts, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events and results of operations could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential,” the negative of such terms and other comparable terminology and the use of future dates. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors.

The forward-looking statements included in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ

significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking and subject to risks and uncertainties including among others:

the impact of the COVID-19 pandemic on our business operations, operating results and financial condition, as well as the general economy and housing market in particular;

economic changes, either nationally or in the markets in which we operate, including declines in employment, volatility of mortgage interest rates and inflation;

shortages of or increased prices for labor, land or raw materials, including lumber, used in housing construction;

a downturn in the homebuilding industry, including a reduction in demand or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial conditions, including an impairment of our assets;

changes in assumptions used to make industry forecasts, population growth rates, or trends affecting housing demand or prices;

continued volatility and uncertainty in the credit markets and broader financial markets;

our future operating results and financial condition;

our business operations;

changes in our business and investment strategy;

availability and price of land to acquire, and our ability to acquire such land on favorable terms or at all;

availability, terms and deployment of capital;

availability or cost of mortgage financing or an increase in the number of foreclosures in the market;

delays in land development or home construction resulting from adverse weather conditions or other events outside our control;

impact of construction defect, product liability, and/or home warranty claims, including the adequacy of accruals and the applicability and sufficiency of our insurance coverage;

changes in, or the failure or inability to comply with, governmental laws and regulations;

the timing of receipt of regulatory approvals and the opening of projects;

the impact and cost of compliance with evolving environmental, health and safety and other laws and regulations and third-party challenges to required permits and other approvals and potential legal liability in connection therewith;

the degree and nature of our competition;

our leverage, debt service obligations and exposure to changes in interest rates;

our ability to continue to fund and succeed in our mortgage lending business and the additional risks involved in that business;

availability of qualified personnel and contractors and our ability to retain key personnel and contractor relationships;

taxation and tax policy changes, tax rate changes, new tax laws, new or revised tax law interpretations or guidance; and

changes in United States generally accepted accounting principles (which we refer to as “GAAP”).

Forward-looking statements are based on our beliefs, assumptions and expectations of future events, taking into account all information currently available to us. Forward-looking statements are not guarantees of future events or of our performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these events and factors are described above and in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K, and other risks and uncertainties detailed in this report, including “Part II, Item 1A. Risk Factors”, and our other reports and filings with the SEC. If a change occurs, our business, financial condition, liquidity, cash flows and results of operations may vary materially from those expressed in or implied by our forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Therefore, you should not rely on these forward-looking statements as of any date subsequent to the date of this Form 10-Q.

As used in this Form 10-Q, references to “we,” “us,” “our,” “Century” or the “Company” refer to Century Communities, Inc., a Delaware corporation, and, unless the context otherwise requires, its subsidiaries and affiliates.

The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. We use certain non-GAAP financial measures that we believe are important for purposes of comparison to prior periods. This information is also used by our management to measure the profitability of our ongoing operations and analyze our business performance and trends. Some of the numbers included herein have been rounded for the convenience of presentation.

Overview

Century is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 17 states. In many of our projects, in addition to building homes, we are responsible for the entitlement and development of the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand targets

a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the ability to personalize their homes through certain option and upgrade opportunities. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet and generally provides no option or upgrade opportunities. Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Additionally, our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, and IHL Home Insurance Agency, LLC, which provide mortgage, title, and insurance services, respectively, primarily to our homebuyers have been identified as our Financial Services segment.

While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing us to more appropriately price the homes and deploy our capital.

Impact of COVID-19 Pandemic

The outbreak of the novel coronavirus, (COVID-19), which was declared a pandemic by the World Health Organization on March 11, 2020, created significant volatility, disruption, and uncertainty across the nation and abroad.

The homebuilding industry started to experience slowing sales trends in mid-March through April of 2020 at the outset of the widespread uncertainty concerning the pandemic. However, home sales sharply rebounded in May and June of 2020, aided by historically low interest rates, lack of supply, and renewed desire from customers to move out of urban areas and/or apartments and into new homes in suburban areas, which desire was likely accelerated by the COVID-19 pandemic. These positive trends and market dynamics continued throughout the remainder of 2020 and throughout the first half of 2021.

While these positive trends and market dynamics continued throughout the first half of 2021, we recognize that long term macro-economic effects of the pandemic that could ultimately impact the homebuilding industry have yet to be known. There is still uncertainty regarding the extent and duration of the COVID-19 pandemic and future increases in COVID-19 positive cases could result in altering of the “re-opening” plans of numerous state and local municipalities, which may include government restrictions, such as “stay-at-home” or “shelter-in-place” directives, quarantines, travel advisories and social distancing measures. Despite overall strong demand and sales of our homes during the first and second quarters of 2021, continued future demand is uncertain as economic conditions are uncertain, in particular with respect to unemployment levels, and the extent to which and how long COVID-19 and related government directives, actions, and economic relief efforts will impact the U.S. economy, unemployment levels, financial markets, credit and mortgage markets, consumer confidence, interest rates, availability of mortgage loans to homebuyers, and other factors, including those described elsewhere in this report. A decrease in demand for our homes would adversely affect our operating results in future periods, as well as have a direct effect on the origination volume of and revenues from our Financial Services segment. In addition, because the full magnitude and duration of the COVID-19 pandemic is uncertain and difficult to predict, changes in our cash flow projections may change our conclusions on the recoverability of inventories in the future.

Driven by the continued strong demand for our homes throughout the first and second quarters of 2021, we ended the second quarter of 2021 with no amounts outstanding under our revolving line of credit, $419.4 million of cash and cash equivalents, $37.6 million of cash held in escrow, and a net homebuilding debt to net capital ratio of 23.0%. Additionally, we increased our land acquisition and development activities during the first six months of 2021 to bolster our lot pipeline and support future community growth, which resulted in 65,610 lots owned and controlled at June 30, 2021, a 88.4% increase as compared to June 30, 2020 and a 31.3% increase as compared to December 31, 2020. Although the trajectory and strength of our markets have continued to remain strong and allowed us to pass on increased costs through price increases and increase our margins, we continued to experience materials and labor supply cost pressures during the first six months of 2021 that could negatively impact our margins in future periods. While the impact of the COVID-19 pandemic will continue to evolve and at any given time recovery could be slowed or reversed by a number of factors, we believe we are well positioned from a cash and liquidity standpoint not only to operate in an uncertain environment, but also to continue to grow with the market and pursue other ways to properly deploy capital to enhance returns, which may include taking advantage of debt refinancing and/or strategic opportunities as they arise.

Results of Operations

During the three and six months ended June 30, 2021, we delivered 2,771 and 5,568 homes, respectively, with an average sales price of $362.6 thousand and $352.7 thousand, respectively. These deliveries represent increases of 11.7% and 28.2%, respectively, as compared to the three and six months ended June 30, 2020 and represent a 20.3% and 16.1% increase in average sales price as compared to the three and six months ended June 30, 2020. During the three and six months ended June 30, 2021, we generated approximately $1.0 billion and $2.0 billion in home sales revenues, respectively, approximately $152.1 million and $283.2 million in income before income tax expense, respectively, and approximately $117.9 million and $219.6 million in net income, respectively, in each case representing substantial increases over the prior year periods.

For the three and six months ended June 30, 2021, our new home contracts, net of cancelations, totaled 3,120 and 6,575, respectively, a 17.1% and 30.1% increase over the same respective periods in 2020. As of June 30, 2021, we had a backlog of 4,446 homes, a 60.0% increase as compared to June 30, 2020, representing approximately $1,762.5 million in sales value, an 83.1% increase as compared to June 30, 2020.
‎

The following table summarizes our results of operations for the three and six months ended June 30, 2021 and 2020.


(in thousands, except per share amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Consolidated Statements of Operations:
Revenue
Home sales revenues	$	1,004,789		$	747,415		$	1,964,068		$	1,320,125
Land sales and other revenues		8,258			3,307			23,928			23,411
		1,013,047			750,722			1,987,996			1,343,536
Financial services revenues		29,865			25,722			63,485			35,517
Total revenues		1,042,912			776,444			2,051,481			1,379,053
Homebuilding cost of revenues
Cost of home sales revenues		(764,668)			(620,655)			(1,521,175)			(1,091,181)
Cost of land sales and other revenues		(7,000)			(2,384)			(17,020)			(16,551)
		(771,668)			(623,039)			(1,538,195)			(1,107,732)
Financial services costs		(18,168)			(12,744)			(36,469)			(22,330)
Selling, general, and administrative		(99,656)			(86,706)			(191,807)			(160,325)
Inventory impairment and other		(41)			(910)			(41)			(1,691)
Other income (expense)		(1,245)			(2,942)			(1,786)			(2,784)
Income before income tax expense		152,134			50,103			283,183			84,191
Income tax expense		(34,224)			(11,653)			(63,621)			(19,615)
Net income	$	117,910		$	38,450		$	219,562		$	64,576
Earnings per share:
Basic	$	3.49		$	1.15		$	6.52		$	1.94
Diluted	$	3.47		$	1.15		$	6.47		$	1.93
Adjusted diluted earnings per share⁽¹⁾	$	3.47		$	1.21		$	6.47		$	2.00
Other Operating Information (dollars in thousands):
Number of homes delivered		2,771			2,480			5,568			4,344
Average sales price of homes delivered	$	362.6		$	301.4		$	352.7		$	303.9
Homebuilding gross margin percentage⁽²⁾		23.9	%		16.9	%		22.5	%		17.2	%
Adjusted homebuilding gross margin excluding interest and inventory impairment and other ⁽¹⁾		25.7	%		19.5	%		24.4	%		19.8	%
Backlog at end of period, number of homes		4,446			2,778			4,446			2,778
Backlog at end of period, aggregate sales value	$	1,762,465		$	962,751		$	1,762,465		$	962,751
Average sales price of homes in backlog	$	396.4		$	346.6		$	396.4		$	346.6
Net new home contracts		3,120			2,664			6,575			5,052
Selling communities at period end⁽³⁾		184			223			184			223
Average selling communities⁽³⁾		179			231			187			226
Total owned and controlled lot inventory		65,610			34,832			65,610			34,832
Adjusted EBITDA⁽¹⁾	$	173,258		$	74,034		$	325,379		$	125,840
Adjusted income before income tax expense⁽¹⁾	$	152,175		$	52,597		$	283,224		$	87,466
Adjusted net income⁽¹⁾	$	117,987		$	40,343		$	219,594		$	67,088
Net homebuilding debt to net capital ⁽¹⁾		23.0	%		37.5	%		23.0	%		37.5	%

⁽¹⁾This is a non-GAAP financial measure and should not be used as a substitute for the Company’s operating results prepared in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information under “Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

⁽²⁾Homebuilding gross margin percentage is inclusive of a $0.9 million and $1.7 million inventory impairment for the three and six months ended June 30, 2020, respectively, which is included within inventory impairment and other on our condensed consolidated financial statements. We recognized nominal inventory impairment for the three and six months ended June 30, 2021.

⁽³⁾ The selling communities as of June 30, 2020 has been adjusted from prior year presentations to reflect 101 selling communities in our Century Complete segment, which business was acquired in 2018, and for which the number of selling communities was previously not disclosed.

‎

Results of Operations by Segment

(dollars in thousands)


	New Homes Delivered				Average Sales Price of Homes Delivered				Home Sales Revenues				Income before Income Tax Expense
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020		2021		2020		2021		2020
West		385		313	$	616.5	$	530.6	$	237,359	$	166,089	$	40,903	$	13,747
Mountain		611		417	$	473.1	$	418.6		289,058		174,559		55,814		20,616
Texas		477		400	$	273.9	$	246.4		130,641		98,558		19,139		9,610
Southeast		429		515	$	392.7	$	338.8		168,453		174,492		26,096		12,020
Century Complete		869		835	$	206.3	$	160.1		179,278		133,717		23,089		8,548
Financial Services		—		—	$	—	$	—		—		—		11,697		12,978
Corporate		—		—	$	—	$	—		—		—		(24,604)		(27,416)
Total		2,771		2,480	$	362.6	$	301.4	$	1,004,789	$	747,415	$	152,134	$	50,103

	New Homes Delivered				Average Sales Price of Homes Delivered				Home Sales Revenues				Income before Income Tax Expense
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020		2021		2020		2021		2020
West		704		546	$	601.1	$	536.0	$	423,149	$	292,651	$	68,364	$	29,089
Mountain		1,296		813	$	446.9	$	407.2		579,123		331,091		107,794		39,094
Texas		805		644	$	271.3	$	246.4		218,380		158,697		27,670		15,108
Southeast		997		883	$	389.7	$	346.4		388,534		305,894		49,536		20,329
Century Complete		1,766		1,458	$	201.0	$	159.0		354,882		231,792		44,819		9,333
Financial Services		—		—	$	—	$	—		—		—		27,016		13,187
Corporate		—		—	$	—	$	—		—		—		(42,016)		(41,949)
Total		5,568		4,344	$	352.7	$	303.9	$	1,964,068	$	1,320,125	$	283,183	$	84,191

West

During the three and six months ended June 30, 2021, our West segment generated income before income tax expense of $40.9 million and $68.4 million, respectively, a 197.5% and 135.0% increase, respectively, over the respective prior year period. These increases were driven by increases in home sales revenue of $71.3 million and $130.5 million, respectively, and increases of 896 basis points and 622 basis points, respectively, in the percentage of income before income tax expense to home sales revenues, as a result of (1) increased revenues on a partially fixed cost base and (2) increased gross margins on home sales. The increases in revenue during the three and six months ended June 30, 2021 were generated by both increases in the number of homes delivered of 23.0% and 28.9%, respectively, as well as increases of 16.2% and 12.1%, respectively, in the average sales price per home. During the three and six months ended June 30, 2021, the increases in the number of homes delivered were driven by increases in our monthly absorption rate of 73.2% and 64.2%, respectively, and increases in the average sales price were driven by both the mix of deliveries within individual communities, as well as increased pricing power as a result of strong market dynamics.

Mountain

During the three and six months ended June 30, 2021, our Mountain segment generated income before income tax expense of $55.8 million and $107.8 million, respectively, a 170.7% and 175.7% increase, respectively, over the respective prior year period. These increases were driven by increases in home sales revenue of $114.5 million and $248.0 million, respectively, and increases of 750 basis points and 681 basis points, respectively, in the percentage of income before income tax expense to home sales revenues, as a result of (1) increased revenues on a partially fixed cost base and (2) increased gross margins on home sales. The increases in revenue during the three and six months ended June 30, 2021 were generated by both increases in the number of homes delivered of 46.5% and 59.4%, respectively, as well as increases of 13.0% and 9.7%, respectively, in the average sales price per home. During the three and six months ended June 30, 2021, the increases in the number of homes delivered were driven by increases in our monthly absorption rate of 81.0% and 102.1%, respectively, and increases in the average sales price were driven by both the mix of deliveries within individual communities, as well as increased pricing power as a result of strong market dynamics.

Texas

During the three and six months ended June 30, 2021, our Texas segment generated income before income tax expense of $19.1 million and $27.7 million, respectively, a 99.2% and 83.1% increase, respectively, over the respective prior year period. These increases were driven by increases in home sales revenue of $32.1 million and $59.7 million, respectively, and increases of 490 basis points and 315 basis points, respectively, in the percentage of income before income tax expense to home sales revenues, as a result of (1) increased revenues on a partially fixed cost base and (2) increased gross margins on home sales. The increases in revenue during the three and six months ended June 30, 2021 were generated by both increases in the number of homes delivered of 19.3% and 25.0%, respectively, as well as increases of 11.2% and 10.1%, respectively, in the average sales price per home. During the three and six months ended June 30, 2021, the increases in the number of homes delivered were driven by increases in our monthly absorption rate of 53.2% and 91.2%, respectively, and increases in the average sales price were driven by both the mix of deliveries within individual communities, as well as increased pricing power as a result of strong market dynamics.

Southeast

During the three months ended June 30, 2021, our Southeast segment generated income before income tax expense of $26.1 million, a 117.1% increase over the prior year period, driven by an increase of 860 basis points in the percentage of income before income tax expense to home sales revenues. Home sales revenues decreased during the three months ended June 30, 2021, generated by a decrease in the number of homes delivered of 16.7%, partially offset by an increase of 15.9% in the average sales price per home. During the three months ended June 30, 2021, the decrease in the number of homes delivered was driven by a decrease in our monthly absorption rate of 6.4%. The increase in the average sales price was driven by both the mix of deliveries within individual communities, as well as increased pricing power as a result of strong market dynamics. During the six months ended June 30, 2021, our Southeast segment generated income before income tax expense of $49.5 million, a 143.7% increase, respectively, over the prior year period. The increase was driven by the increase in home sales revenue of $82.6 million, and an increase of 610 basis points in the percentage of income before income tax expense to home sales revenues, as a result of increased revenues on a partially fixed cost base. The increase in revenue during the six months ended June 30, 2021 was generated by both an increase in the number of homes delivered of 12.9% as well as an increase of 12.5% in the average sales price per home. During the six months ended June 30, 2021, the increase in the number of homes delivered was driven by an increase in our monthly absorption rate of 28.9% and the increase in the average sales price was driven by both the mix of deliveries within individual communities between years, as well as increased pricing power as a result of strong market dynamics.

Century Complete

During the three and six months ended June 30, 2021, our Century Complete segment generated income before income tax expense of $23.1 million and $44.8 million, respectively, a 170.1% and 380.2% increase, respectively, over the respective prior year period. These increases were driven by increases in home sales revenue of $45.6 million and $123.1 million, respectively, and increases of 649 basis points and 860 basis points, respectively, in the percentage of income before income tax expense to home sales revenues, as a result of increased revenues on a partially fixed cost base. The increases in revenue during the three and six months ended June 30, 2021 were generated by both increases in the number of homes delivered of 4.1% and 21.1%, respectively, as well as increases of 28.9% and 26.4%, respectively, in the average sales price per home. During the three and six months ended June 30, 2021, the increases in the number of homes delivered were driven by increases in our monthly absorption rate of 50.0% and 178.6%, respectively, and increases in the average sales price were driven by both the mix of deliveries within markets between years, as well as increased pricing power as a result of strong market dynamics.

Financial Services

Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, performance typically correlates to the number of homes delivered. During the three months ended June 30, 2021, income before income tax expense for our Financial Services segment decreased $1.3 million to $11.7 million compared to the same period in 2020. This decrease was primarily the result of a $3.0 million favorable fair value adjustment on mortgage loans held for sale during the second quarter of 2020, and was partially offset by a 59.5% increase in the number of loans sold during the three months ended June 30, 2021 as compared to the same period in 2020. During the six months ended June 30, 2021, income before income tax expense for our Financial Services segment increased $13.8 million to $27.0 million compared to the same period in 2020. The increase was primarily the result of a $28.0 million overall increase in financial services revenue during the six months ended June 30, 2021 compared to the same period in 2020. The increase in financial services

revenue was directly attributable to an 84.3% increase in the number of loans sold during the six months ended June 30, 2021 as compared to the same period in 2020.

The following table presents selected operational data for our Financial Services segment in relation to our loan origination activities (dollars in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Total originations:
Number of loans		2,138			1,724			4,439			2,657
Principal	$	661,853		$	493,534		$	1,374,144		$	765,326
Capture rate of Century homebuyers		74	%		59	%		75	%		56	%
Century		78	%		70	%		81	%		68	%
Century Complete		66	%		34	%		62	%		31	%
Average FICO score		737			735			737			735

Loans sold to third parties:
Number of loans sold		2,326			1,458			4,605			2,499
Principal	$	725,393		$	419,557		$	1,406,550		$	729,027

Corporate

During the three and six months ended June 30, 2021, our Corporate segment generated losses of $24.6 million and $42.0 million, respectively, as compared to losses of $27.4 million and $41.9 million, respectively, for the same periods in 2020. The decrease in loss for the three-month comparison is primarily due to the cumulative catch-up adjustment to stock-based compensation expense of $2.9 million that occurred in the prior year period. The increase in loss for the six-month comparison is primarily attributed to higher compensation costs, including estimated bonuses, during the six months ended June 30, 2021, partially offset by increased stock-based compensation expense due to the cumulative catch-up adjustment that occurred in the prior year period.

Homebuilding Gross Margin

(dollars in thousands)

Homebuilding gross margin represents home sales revenues less cost of home sales revenues. Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, increased during the three and six months ended June 30, 2021 to 23.9% and 22.5%, respectively as compared to 16.9% and 17.2%, respectively, for the same periods in 2020. This increase was primarily driven by the positive homebuilding sales environment across our markets, which resulted in our ability to increase sales price in excess of an increase in our labor and direct costs period over period.

In the following table, we calculate our homebuilding gross margin, as adjusted to exclude inventory impairment and other and interest in cost of home sales revenues.


	Three Months Ended June 30,

	2021		%		2020		%

Home sales revenues	$	1,004,789	100.0	%	$	747,415	100.0	%
Cost of home sales revenues		(764,668)	(76.1)	%		(620,655)	(83.0)	%
Inventory impairment and other		(41)	(0.0)	%		(910)	(0.1)	%
Gross margin from home sales		240,080	23.9	%		125,850	16.9	%
Add: Inventory impairment and other		41	0.0	%		910	0.1	%
Add: Interest in cost of home sales revenues		18,406	1.8	%		18,694	2.5	%
Adjusted homebuilding gross margin excluding interest and inventory impairment and other	$	258,527	25.7	%	$	145,454	19.5	%


	Six Months Ended June 30,

	2021		%		2020		%

Home sales revenues	$	1,964,068	100.0	%	$	1,320,125	100.0	%
Cost of home sales revenues		(1,521,175)	(77.5)	%		(1,091,181)	(82.7)	%
Inventory impairment and other		(41)	(0.0)	%		(1,691)	(0.1)	%
Gross margin from home sales		442,852	22.5	%		227,253	17.2	%
Add: Inventory impairment and other		41	0.0	%		1,691	0.1	%
Add: Interest in cost of home sales revenues		36,783	1.9	%		32,379	2.5	%
Adjusted homebuilding gross margin excluding interest and inventory impairment and other	$	479,676	24.4	%	$	261,323	19.8	%

⁽¹⁾This non-GAAP financial measure should not be used as a substitute for the Company’s operating results in accordance with GAAP. See the reconciliations to the most comparable GAAP measure and other information under “—Non-GAAP Financial Measures.” An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

For the three and six months ended June 30, 2021, excluding inventory impairment and other, and interest in cost of home sales revenues, our adjusted homebuilding gross margin percentage was 25.7% and 24.4%, respectively, as compared to 19.5% and 19.8%, respectively, for the same periods in 2020. We believe the above information is meaningful as it isolates the impact that inventory impairment, indebtedness and acquisitions (if applicable) have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to previous periods and our competitors.

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Selling, General and Administrative Expense


(dollars in thousands)
	Three Months Ended June 30,						Increase
	2021			2020			Amount		%
Selling, general and administrative	$	99,656		$	86,706		$	12,950	14.9	%
As a percentage of home sales revenue		9.9	%		11.6	%

	Six Months Ended June 30,						Increase
	2021			2020			Amount		%
Selling, general and administrative	$	191,807		$	160,325		$	31,482	19.6	%
As a percentage of home sales revenue		9.8	%		12.1	%

Our selling, general and administrative expense increased $13.0 million and $31.5 million respectively, for the three and six months ended June 30, 2021 as compared to the same periods in 2020. These increases were primarily attributable to the following: (1) increases of $10.0 million and $19.5 million, respectively, in salaries and wages, primarily related to increased bonus expense as compared to the same periods in 2020 and (2) increases of $3.5 million and $15.6 million, respectively, in internal and external commission expense, which are directly related to the increases in home sales revenues. These increases were partially offset by decreases in expenses in numerous areas including advertising and legal expenses. Additionally, during the three and six months ended June 30, 2021, our selling, general and administrative expense decreased 170 basis points and 230 basis points, respectively, as a percentage of home sales revenue as compared to the same periods ended June 30, 2020, as a result of increased revenues on a partially fixed cost base.

Income Tax Expense

Segment Assets

(dollars in thousands)


	June 30,		December 31,			Increase (Decrease)
	2021		2020			Amount	Change
West	$	611,192	$	536,907	$	74,285	13.8	%
Mountain		803,816		778,198		25,618	3.3	%
Texas		238,221		207,746		30,475	14.7	%
Southeast		279,101		329,930		(50,829)	(15.4)	%
Century Complete		284,838		218,604		66,234	30.3	%
Financial Services		333,109		421,153		(88,044)	(20.9)	%
Corporate		343,976		352,555		(8,579)	(2.4)	%
Total assets	$	2,894,253	$	2,845,093	$	49,160	1.7	%

Total assets increased moderately by $49.2 million, or 1.7%, to $2.9 billion at June 30, 2021 as compared to December 31, 2020, primarily as a result of the overall growth of the Company.

Lots owned and controlled


	June 30, 2021			December 31, 2020			% Change
	Owned	Controlled	Total	Owned	Controlled	Total	Owned		Controlled		Total

West	3,833	5,532	9,365	3,266	3,392	6,658	17.4	%	63.1	%	40.7	%
Mountain	7,800	8,046	15,846	7,951	5,910	13,861	(1.9)	%	36.1	%	14.3	%
Texas	3,468	6,767	10,235	3,035	5,873	8,908	14.3	%	15.2	%	14.9	%
Southeast	2,973	12,567	15,540	3,076	6,389	9,465	(3.3)	%	96.7	%	64.2	%
Century Complete	4,487	10,137	14,624	3,473	7,600	11,073	29.2	%	33.4	%	32.1	%
Total	22,561	43,049	65,610	20,801	29,164	49,965	8.5	%	47.6	%	31.3	%

Of our total lots owned and controlled as of June 30, 2021, 34.4% were owned and 65.6% were controlled, as compared to 41.6% owned and 58.4% controlled as of December 31, 2020.

Other Homebuilding Operating Data


	Three Months Ended					Six Months Ended
Net new home contracts	June 30,		Increase (Decrease)			June 30,		Increase (Decrease)
	2021	2020	Amount	% Change		2021	2020	Amount	% Change
West	497	389	108	27.8	%	891	725	166	22.9	%
Mountain	617	474	143	30.2	%	1,564	1,088	476	43.8	%
Texas	399	391	8	2.0	%	917	724	193	26.7	%
Southeast	288	566	(278)	(49.1)	%	764	1,082	(318)	(29.4)	%
Century Complete	1,319	844	475	56.3	%	2,439	1,433	1,006	70.2	%
Total	3,120	2,664	456	17.1	%	6,575	5,052	1,523	30.1	%

Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2021 increased by 456 homes, or 17.1%, to 3,120, compared to 2,664 for the same period in 2020. Net new home contracts for the six months ended June 30, 2021 increased by 1,523 homes, or 30.1%, to 6,575, compared to 5,052 for the same period in 2020. These increases were primarily driven by stronger sales across all of our segments as the homebuilding industry continued to experience positive trends during the first six months of 2021, partially offset by a decrease in the Southeast region. The decrease in our Southeast segment is driven by a 45.0%

decrease in selling communities at period end as compared to the end of the prior year period.

Our overall monthly “absorption rate” (the rate at which home orders are contracted, net of cancelations) for the three and six months ended June 30, 2021 by segment are included in the table below:


	Three Months Ended June 30,		Increase (Decrease)
	2021	2020	Amount	% Change
West	9.7	5.6	4.1	73.2	%
Mountain	7.6	4.2	3.4	81.0	%
Texas	9.5	6.2	3.3	53.2	%
Southeast	4.4	4.7	(0.3)	(6.4)	%
Century Complete	4.2	2.8	1.4	50.0	%
Total	5.7	4.0	1.7	42.5	%

	Six Months Ended June 30,		Increase (Decrease)
	2021	2020	Amount	% Change
West	8.7	5.3	3.4	64.2	%
Mountain	9.7	4.8	4.9	102.1	%
Texas	10.9	5.7	5.2	91.2	%
Southeast	5.8	4.5	1.3	28.9	%
Century Complete	3.9	1.4	2.5	178.6	%
Total	6.0	2.0	4.0	200.0	%

During the three and six months ended June 30, 2021, our absorption rates increased by 42.5% and 200.0%, respectively, to 5.7 and 6.0 per month, respectively, as compared to the same periods in 2020. These increases were attributable to continued historically low interest rates and strong demand for new homes during the current year periods. Furthermore, our absorption rate during the six months ended June 30, 2020 was negatively impacted by the initial outbreak of COVID-19.



Selling communities at period end	As of June 30,		Increase/(Decrease)
	2021	2020	Amount	% Change

West	17	23	(6)	(26.1)	%
Mountain	27	38	(11)	(28.9)	%
Texas	14	21	(7)	(33.3)	%
Southeast	22	40	(18)	(45.0)	%
Century Complete	104	101	3	3.0	%
Total	184	223	(39)	(17.5)	%

Our selling communities decreased to 184 communities at June 30, 2021 as compared to 223 at June 30, 2020. This decrease was a result of the strong sales environment, which outpaced new community openings.

Century Complete sells primarily from retail studios and online via the internet, instead of from traditional model homes. While Century Complete has historically purchased land and constructed homes within traditional communities similar to our Century Communities brand, we also purchase land and construct a significant number of homes on scattered lots outside of traditional communities. As the Century Complete brand has grown, entered new markets and expanded its land pipeline, we have increasingly operated within traditional communities, and now rely, to a lesser degree, on scattered lots. Additionally, we have organized our construction and sales operations for scattered lot positions within “pods” which are clustered together lot positions, which we operate more like a traditional community. Accordingly, our selling communities at period end for the 2020 period have been updated from amounts previously disclosed to include communities for our Century Complete brand.

Backlog

(dollars in thousands)



	As of June 30,
	2021					2020					% Change

	Homes	Dollar Value		Average Sales Price		Homes	Dollar Value		Average Sales Price		Homes		Dollar Value		Average Sales Price

West	673	$	440,008	$	653.8	381	$	203,395	$	533.8	76.6	%	116.3	%	22.5	%
Mountain	1,057		544,365		515.0	648		281,999		435.2	63.1	%	93.0	%	18.3	%
Texas	497		182,080		366.4	355		95,193		268.1	40.0	%	91.3	%	36.7	%
Southeast	568		230,558		405.9	712		262,096		368.1	(20.2)	%	(12.0)	%	10.3	%
Century Complete	1,651		365,454		221.4	682		120,068		176.1	142.1	%	204.4	%	25.7	%
Total / Weighted Average	4,446	$	1,762,465	$	396.4	2,778	$	962,751	$	346.6	60.0	%	83.1	%	14.4	%

Backlog reflects the number of homes, net of actual cancellations experienced during the period, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. At June 30, 2021, we had 4,446 homes in backlog with a total value of $1,762.5 million, which represents an increase of 60.0% and 83.1%, respectively, as compared to June 30, 2020. The increase in backlog dollar value is primarily attributable to the increase in backlog units and a 14.4% increase in the average sales price of homes in backlog.

Supplemental Guarantor Information

Our 5.875% senior notes due 2025 and 6.750% senior notes due 2027 (which we collectively refer to as our “Senior Notes”) are our unsecured senior obligations and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to collectively as “Guarantors”). Our subsidiaries associated with our financial services operations (referred to as “Non-Guarantors”) do not guarantee the Senior Notes. The guarantees are senior unsecured obligations of the Guarantors that rank equal with all existing and future senior debt of the Guarantors and senior to all subordinated debt of the Guarantors. The guarantees are effectively subordinated to any secured debt of the Guarantors. As of June 30, 2021, Century Communities, Inc. had outstanding $900.0 million in total principal amount of Senior Notes.

Each of the indentures governing our Senior Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the respective indentures), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the respective indentures) or is made in compliance with applicable provisions of the applicable indenture; (2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable indenture; provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the respective indentures); (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the applicable indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the applicable Indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the respective Indentures), in accordance with the applicable indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the applicable indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the applicable indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the applicable indenture.

If a guarantor were to become a debtor in a case under the US Bankruptcy Code, a court may decline to enforce its guarantee of the Senior Notes. This may occur when, among other factors, it is found that the guarantor originally received less than fair consideration for the guarantee and the guarantor would be rendered insolvent by enforcement of the guarantee. On the basis of historical financial information, operating history and other factors, we believe that each of the guarantors, after giving effect to the issuance of its guarantee of the Senior Notes when the guarantee was issued, was not insolvent and did not and has not incurred debts beyond its ability to pay

such debts as they mature. The Company cannot predict, however, what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.

As the guarantees were made in connection with exchange offers effected in February 2015, October 2015 and April 2017 and the issuance of the 5.875% senior notes due 2025 and of the 6.750% senior notes due 2027, the Guarantors’ condensed financial information is presented as if the guarantees existed during the periods presented. If any Guarantors are released from the guarantees in future periods, the changes are reflected prospectively. We have determined that separate, full financial statements of the Guarantors would not be material to investors, and accordingly, supplemental financial information is presented below.

On March 2, 2020, the SEC adopted amendments to Rules 3-10 and 3-16 of Regulation S-X, under Rule Release No. 33-10762, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities (“Rule 33-10762”), that reduce and simplify the financial disclosure requirements applicable to registered debt offerings for guarantors and issuers of guaranteed securities (which we previously included within the notes to our consolidated financial statements in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q). The amendments under Rule 33-10762 were effective January 4, 2021, but voluntary compliance was permitted in advance of the effective date. We adopted the new disclosure requirements permitted under Rule 33-10762, beginning with the three and six month period ended June 30, 2020.

The following summarized financial information is presented for Century Communities, Inc. and the Guarantor Subsidiaries on a combined basis after eliminating intercompany transactions and balances among Century Communities, Inc. and the Guarantor Subsidiaries, as well as their investment in, and equity in earnings from Non-Guarantor Subsidiaries.

‎

Century Communities, Inc. and Guarantor Subsidiaries


Summarized Balance Sheet Data (in thousands)	June 30, 2021		December 31, 2020

Assets
Cash and cash equivalents	$	362,548	$	307,167
Cash held in escrow		37,640		23,149
Accounts receivable		25,904		18,742
Inventories		1,948,769		1,929,664
Prepaid expenses and other assets		113,634		94,181
Property and equipment, net		25,503		27,360
Deferred tax assets, net		18,392		12,450
Goodwill		30,395		30,395
Total assets	$	2,562,785	$	2,443,108
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	79,018	$	106,288
Accrued expenses and other liabilities		249,489		267,708
Intercompany loan payable		—		17,600
Notes payable		901,253		894,875
Revolving line of credit		—		—
Total liabilities		1,229,760		1,286,471
Stockholders’ equity:		1,333,025		1,156,637
Total liabilities and stockholders’ equity	$	2,562,785	$	2,443,108


Summarized Statement of Operations Data (in thousands)	Six Months Ended June 30, 2021		Year Ended December 31, 2020

Total homebuilding revenues	$	1,987,996	$	3,057,884
Total homebuilding cost of revenues		(1,538,195)		(2,490,062)
Selling, general and administrative		(191,807)		(341,710)
Inventory impairment and other		(41)		(2,172)
Other income (expense)		(1,872)		(3,014)
Income before income tax expense		256,081		220,926
Income tax expense		(57,532)		(52,389)
Net income	$	198,549	$	168,537

‎

Critical Accounting Policies

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 5, 2021, in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.”

Liquidity and Capital Resources

Overview

Our principal uses of capital for the three and six months ended June 30, 2021 were our land purchases, land development, home construction, and the payment of routine liabilities. We use funds generated by operations, available borrowings under our revolving line of credit, and proceeds from sales of common stock, including our at-the-market facility, to fund our short term working capital obligations and fund our purchases of land, as well as land development and home construction activities. During the three months ended June 30, 2021, we initiated a quarterly cash dividend, which we intend to fund from our funds generated by operations.

Cash flows for each of our communities depend on the stage in the development cycle and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, entitlements and other approvals, and construction of model homes, roads, utilities, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our statements of operations until a home closes, we incur significant cash outlays prior to our recognition of earnings. In the later stages of community development, cash inflows may significantly exceed earnings reported for financial statement purposes, as the cash outflow associated with home and land construction was previously incurred. From a liquidity standpoint, we are actively acquiring and developing lots in our markets to maintain and grow our lot supply and active selling communities. As we continue to expand our business, our cash outlays for land purchases and land development to grow our lot inventory may exceed our cash generated by operations.

In response to the COVID-19 pandemic, we took certain measures to ensure we are positioned with cash flow and liquidity to endure an extended period of lower demand for our homes, should it arise. Specifically commencing in mid-March of 2020, we slowed our land acquisition and development activities and instituted a variety of actions designed to reduce our operating expenses, including a reduction in the size of our workforce through a targeted layoff in April 2020. In addition, given the uncertainty surrounding the COVID-19 pandemic, we initially increased our borrowings under our revolving line of credit during the end of the first quarter of 2020 and into the beginning of the second quarter of 2020 as a proactive measure in order to expand our financial flexibility at that time. We repaid these borrowings during the second quarter of 2020 in light of our second quarter 2020 operating results and to decrease our interest expense. As of June 30, 2021, we continued to have no amounts outstanding under our revolving line of credit.

We increased our land acquisition and development activities during the first six months of 2021, which resulted in 65,610 lots owned and controlled at June 30, 2021, a 31.3% increase as compared to December 31, 2020.

Our Financial Services operations use funds generated from operations and availability under our mortgage repurchase facilities to finance operations including originations of mortgage loans to our homebuyers.

Under our shelf registration statement, which we filed with the SEC on July 1, 2021 and was automatically effective upon filing, we have the ability to access the debt and equity capital markets in registered transactions from time to time and as needed as part of our ongoing financing strategy and subject to market conditions.

We believe that we will be able to fund our current and foreseeable liquidity needs with our cash on hand, cash generated from operations, and cash expected to be available from our revolving line of credit or through accessing debt or equity capital, as needed or appropriate, although no assurance can be provided that such additional debt or equity capital will be available or on acceptable terms, especially in light of the current COVID-19 pandemic, its impact on the macro-economy, and market conditions at the time. While the impact of the COVID-19 pandemic will continue to evolve, we believe we are well positioned from a cash and liquidity standpoint to not only operate in an uncertain environment, but also continue to grow with the market, pay down debt and pursue other ways to properly deploy capital to enhance returns, which may include taking advantage of debt refinancing and/or strategic opportunities as they arise.

Revolving Line of Credit

Restated Credit Agreement”), which provided us with a revolving line of credit of up to $640.0 million, and unless terminated earlier, was scheduled to mature on April 30, 2023.

On May 21, 2021, we entered into a Second Amended and Restated Credit Agreement (the “Second A&R Credit Agreement”) with, Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, and the lenders party thereto. The Second A&R Credit Agreement, which amended and restated the Amended and Restated Credit Agreement, provides us with a senior unsecured revolving line of credit (the “Credit Facility”) of up to $800 million, and unless terminated earlier, will mature on April 30, 2026. The Credit Facility includes a $250.0 million sublimit for standby letters of credit. Under the terms of the Second A&R Credit Agreement, the Company is entitled to request an increase in the size of the Credit Facility by an amount not exceeding $200 million. Our obligations under the Second A&R Credit Agreement are guaranteed by certain of our subsidiaries. The Second A&R Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default. Borrowings under the Second A&R Credit Agreement bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.05% and 2.65% per annum, and if made available in the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.05% and 1.65% per annum

As of June 30, 2021, we had no amounts outstanding under the Credit Facility and were in compliance with all covenants under the Second A&R Credit Agreement.

Mortgage Repurchase Facilities – Financial Services

On May 4, 2018, September 14, 2018, and August 1, 2019, Inspire entered into mortgage warehouse facilities, with Comerica Bank, J.P. Morgan, and Wells Fargo, respectively. The mortgage warehouse lines of credit (which we refer to as the “repurchase facilities”), which were increased during 2020, provide Inspire with uncommitted repurchase facilities of up to an aggregate of $350 million as of June 30, 2021, secured by the mortgage loans financed thereunder. Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of June 30, 2021, we had $159.8 million outstanding under these repurchase facilities and were in compliance with all covenants thereunder.

During the three and six months ended June 30, 2021, we incurred interest expense on the repurchase facilities of $0.6 million and $1.4 million, respectively. During the same periods in 2020, we incurred interest expense on the repurchase facilities of $0.5 million and $1.3 million, respectively. Interest expense on mortgage repurchase facilities is included in financial services costs on our condensed consolidated statements of operations.

At-the-Market Offerings

On November 27, 2019, we entered into a Distribution Agreement with J.P. Morgan Securities LLC, BofA Securities, Inc., Citigroup Global Markets Inc., and Fifth Third Securities, Inc. (which we refer to as the “Distribution Agreement”), as sales agents pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through any of the sales agents party thereto in “at-the-market” offerings, in accordance with the terms and conditions set forth in the Distribution Agreement. This Distribution Agreement, which superseded and replaced a prior similar distribution agreement, had all $100 million available for sale as of June 30, 2021. We did not sell or issue any shares of our common stock during the three and six months ended June 30, 2021 and 2020, respectively. The Distribution Agreement will remain in full force and effect until terminated by either party pursuant to the terms of the agreement or such date that the maximum offering amount has been sold in accordance with the terms of the agreement. Sales cannot be made under the Distribution Agreement unless and until we file a prospectus supplement to our recently filed shelf registration statement that was filed on July 1, 2021, which prospectus supplement we intend to file in the near future.

Letters of Credit and Performance Bonds

In the normal course of business, we post letters of credit and performance and other bonds primarily related to our land development performance obligations with local municipalities. As of June 30, 2021, and December 31, 2020, we had $464.6 million and $402.7 million, respectively, in letters of credit and performance and other bonds issued and outstanding. Although significant development and construction activities have been completed related to the improvements at these sites, the letters of credit and performance and other bonds are not generally released until all development and construction activities are completed.

Debt

Our outstanding debt obligations included the following as of June 30, 2021 and December 31, 2020 (in thousands):



	June 30,		December 31,
	2021		2020
6.750% senior notes, due May 2027⁽¹⁾	$	495,176	$	494,768
5.875% senior notes, due July 2025⁽¹⁾		397,170		396,821
Other financing obligations		8,908		3,286
Notes payable		901,254		894,875
Revolving line of credit		—		—
Mortgage repurchase facilities		159,776		259,050
Total debt	$	1,061,030	$	1,153,925

⁽¹⁾ The carrying value of the senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes.

A summary of our debt obligations is included in Note 10 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 5, 2021 and in Note 8 to our condensed consolidated financial statements in this Form 10-Q. We may from time to time seek to refinance or increase our outstanding debt or retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may or may not be material during any particular reporting period.

Stock Repurchase Program

On November 6, 2018, our Board of Directors authorized a stock repurchase program, under which we may repurchase up to 4,500,000 shares of our outstanding common stock. The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws. The actual manner, timing, amount and value of repurchases under the stock repurchase program will be determined by management at its discretion and will depend on a number of factors, including the market price of our common stock, trading volume, other capital management objectives and opportunities, applicable legal requirements, and general market and economic conditions.

We intend to finance any stock repurchases through available cash and our revolving credit facility. Repurchases also may be made under a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, which would permit shares to be repurchased when we otherwise may be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The stock repurchase program has no expiration date and may be extended, suspended or discontinued by our Board of Directors at any time without notice at our discretion. All shares of common stock repurchased under the program will be cancelled and returned to the status of authorized but unissued shares of common stock.

No shares were repurchased during the three and six months ended June 30, 2021 and 2020, respectively. The maximum number of shares available to be purchased under the stock repurchase program as of June 30, 2021 is 3,812,939.

Dividends

On May 19, 2021, our Board of Directors announced the initiation of a quarterly cash dividend. Additionally on May 19, 2021, our Board of Directors declared our first quarterly cash dividend of $0.15 per share and totaling $5.1 million, which was paid on June 16, 2021 to stockholders of record of our common stock as of June 2, 2021.

Cash Flows— Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

For the six months ended June 30, 2021 and 2020, the comparison of cash flows is as follows:

Our primary sources of cash flows from operations are from the sale of single-family attached and detached homes and mortgages. Our primary uses of cash flows from operations is the acquisition of land and expenditures associated with the construction of our single-family attached and detached homes and the origination of mortgages held for sale. During the six months ended June 30, 2021 and 2020, we generated $143.4 million and $173.8 million in cash from operations, respectively. The decrease in cash provided by operations is primarily a result of increased investment in our homebuilding

inventories for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, partially offset by a $155.0 million increase in net income during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Net cash used in investing activities decreased to $4.4 million during the six months ended June 30, 2021, compared to $4.9 million used during the same period in 2020. The decrease was primarily related to less purchases of property and equipment.

Net cash used in financing activities increased to $112.5 million during the six months ended June 30, 2021, compared to $50.5 million used during the same period in 2020. The increase was primarily attributable to a $122.6 million increase in net payments on our mortgage repurchase facilities, partially offset by a $68.7 million decrease in net payments under our revolving line of credit.

As of June 30, 2021, our cash and cash equivalents and restricted cash balance was $424.7 million.

Off-Balance Sheet Arrangements

In the ordinary course of business, we enter into land purchase contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require a cash deposit, and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers and others as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require payment by us of a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. Our obligations with respect to purchase contracts and option contracts are generally limited to the forfeiture of the related non-refundable cash deposits. As of June 30, 2021, we had outstanding purchase contracts and option contracts for 43,049 lots with a total purchase price of approximately $1.7 billion and had $35.2 million of non-refundable cash deposits pertaining to land option contracts. While our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change, we currently anticipate performing on the substantial majority of the purchase and option contracts during the next twelve months, with performance on the remaining purchase and option contracts occurring in future periods.

Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.

We post letters of credit and performance and other bonds primarily related to our land development performance obligations, with local municipalities. As of June 30, 2021, and December 31, 2020, we had $464.6 million and $402.7 million, respectively, in letters of credit and performance and other bonds issued and outstanding. We anticipate that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business.

Contractual Obligations

For the three and six months ended June 30, 2021, there were no material changes to the contractual obligations we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 5, 2021.

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Non-GAAP Financial Measures

In this Form 10-Q, we use certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, net homebuilding debt to net capital, and adjusted net earnings per diluted common shares. These non-GAAP financial measures are presented to provide investors additional information to facilitate the comparison of our past and present operations. We believe these non-GAAP financial measures provide useful information to investors because they are used to evaluate our performance on a comparable year-over-year basis. These non-GAAP financial measures are not in accordance with, or an alternative for, GAAP measures and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive or standard set of accounting rules or principles. Accordingly, the calculation of our non-GAAP financial measures may differ from the definitions of other companies using the same or similar names limiting, to some extent, the usefulness of such measures for comparison purposes. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our financial results as determined in accordance with GAAP. These measures should only be used to evaluate our financial results in conjunction with the corresponding GAAP measures. Accordingly, we qualify our use of non-GAAP financial information in a statement when non-GAAP financial information is presented.

EBITDA and Adjusted EBITDA

The following table presents EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2021 and 2020. Adjusted EBITDA is a non-GAAP financial measure we use as a supplemental measure in evaluating operating performance. We define Adjusted EBITDA as consolidated net income before (i) income tax expense, (ii) interest in cost of home sales revenues, (iii) other interest expense, (iv) loss on debt extinguishment, (v) inventory impairment and other, (vi) depreciation and amortization expense, and (vii) adjustments resulting from the application of purchase accounting for acquired work in process inventory related to business combinations. We believe Adjusted EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, and items considered to be non-recurring. Accordingly, our management believes that this measurement is useful for comparing general operating performance from period to period. Adjusted EBITDA should be considered in addition to, and not as a substitute for, consolidated net income in accordance with GAAP as a measure of performance. Our presentation of Adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. Our Adjusted EBITDA is limited as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.


	Three Months Ended June 30,							Six Months Ended June 30,
	2021		2020		% Change			2021		2020		% Change
Net income	$	117,910	$	38,450		206.7	%	$	219,562	$	64,576		240.0	%
Income tax expense		34,224		11,653		193.7	%		63,621		19,615		224.3	%
Interest in cost of home sales revenues		18,406		18,694		(1.5)	%		36,783		32,379		13.6	%
Interest expense (income)		(172)		(684)		(74.9)	%		(283)		(847)		(66.6)	%
Depreciation and amortization expense		2,849		3,427		(16.9)	%		5,655		6,842		(17.3)	%
EBITDA		173,217		71,540		142.1	%		325,338		122,565		165.4	%
Inventory impairment and other		41		910		(95.5)	%		41		1,691		(97.6)	%
Restructuring costs		—		1,584		NM			—		1,584		NM
Adjusted EBITDA	$	173,258	$	74,034		134.0	%	$	325,379	$	125,840		158.6	%

NM – Not Meaningful

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Net Homebuilding Debt to Net Capital

The following table presents our ratio of net homebuilding debt to net capital, which is a non-GAAP financial measure. We calculate this by dividing net homebuilding debt (notes payable and borrowings under our revolving line of credit less cash and cash equivalents and cash held in escrow) by net capital (net homebuilding debt plus total stockholders’ equity). The most directly comparable GAAP measure is the ratio of debt to total capital. We believe the ratio of net homebuilding debt to net capital is a relevant and useful financial measure to investors in understanding the leverage employed in our operations and as an indicator of our ability to obtain external financing.


	June 30,		December 31,
	2021		2020
Total homebuilding debt	$	901,254	$	894,875
Total stockholders' equity		1,488,658		1,280,705
Total capital	$	2,389,912	$	2,175,580
Homebuilding debt to capital		37.7%		41.1%

Total homebuilding debt	$	901,254	$	894,875
Cash and cash equivalents		(419,416)		(394,001)
Cash held in escrow		(37,640)		(23,149)
Net homebuilding debt		444,198		477,725
Total stockholders' equity		1,488,658		1,280,705
Net capital	$	1,932,856	$	1,758,430

Net homebuilding debt to net capital		23.0%		27.2%

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Adjusted Net Income and Adjusted Diluted Earnings per Share

Adjusted Net Income and Adjusted Diluted Earnings per Share (which we refer to as “Adjusted EPS”) are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of certain non-recurring items. We believe excluding certain non-recurring items provides more comparable assessment of our financial results from period to period. We define Adjusted Net Income as consolidated net income before (i) income tax expense, (ii) inventory impairment and other and (iii) restructuring costs, less adjusted income tax expense, calculated using the Company’s estimated annual effective tax rate after discrete items for the applicable period. Adjusted Diluted EPS is calculated by excluding the effect of loss on inventory impairment and other and restructuring costs from the calculation of reported EPS.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Numerator
Net income	$	117,910	$	38,450	$	219,562	$	64,576
Denominator
Weighted average common shares outstanding - basic		33,738,586		33,340,184		33,651,727		33,274,056
Dilutive effect of restricted stock units		218,052		121,510		269,212		195,013
Weighted average common shares outstanding - diluted		33,956,638		33,461,694		33,920,939		33,469,069
Earnings per share:
Basic	$	3.49	$	1.15	$	6.52	$	1.94
Diluted	$	3.47	$	1.15	$	6.47	$	1.93

Adjusted earnings per share
Numerator
Income before income tax expense	$	152,134	$	50,103	$	283,183	$	84,191
Inventory impairment and other		41		910		41		1,691
Restructuring costs		—		1,584		—		1,584
Adjusted income before income tax expense		152,175		52,597		283,224		87,466
Adjusted income tax expense⁽¹⁾		(34,188)		(12,254)		(63,630)		(20,378)
Adjusted net income	$	117,987		40,343	$	219,594		67,088

Denominator - Diluted		33,956,638		33,461,694		33,920,939		33,469,069

Adjusted diluted earnings per share	$	3.47	$	1.21	$	6.47	$	2.00

⁽¹⁾The tax rate used in calculating adjusted net income for the three and six months ended June 30, 2021 was 22.5% which is reflective of the Company’s estimated annual effective tax rate after discrete items for the applicable period. For the three and six months ended June 30, 2020, the tax rate utilized was our estimated annual effective tax rate after discrete items of 23.3%.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rates

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with Second A&R Credit Agreement. Borrowings under the Second A&R Credit Agreement bear interest at a floating rate equal to the adjusted Eurodollar Rate plus an applicable margin between 2.05% and 2.65% per annum, and if made available in the Administrative Agent’s discretion, a base rate plus an applicable margin between 1.05% and 1.65% per annum. The “applicable margins” described above are determined by a schedule based on the leverage ratio of the Company, as defined in the Second A&R Credit Agreement. The Second A&R Credit Agreement also provides for fronting fees and letter of credit fees payable to the L/C Issuer and commitment fees payable to the Administrative Agent equal to 0.20% of the unused portion of the Credit Facility.

For fixed rate debt, such as our senior notes, changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows.

Our Financial Services business utilizes mortgage-backed securities, forward commitments, option contracts and investor commitments to protect the value of rate-locked commitments and loans held-for-sale from fluctuations in mortgage-related interest rates. To mitigate interest risk associated with loans held-for-sale, we typically use derivative financial instruments to hedge our exposure to risk from the time a borrower locks a loan until the time the loan is securitized. We also typically hedge our interest rate exposure through entering into interest rate swap futures.

Inflation

Our homebuilding operations can be adversely impacted by inflation, primarily from higher land, financing, labor, material, particularly lumber, and construction costs. In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers. While we attempt to pass on cost increases to customers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.

Seasonality

Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements. We typically experience the highest new home order activity during the spring, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors. Since it typically takes four to eight months to construct a new home, we deliver more homes in the second half of the year as spring and summer home orders convert to home deliveries. Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters, and the majority of cash receipts from home deliveries occurs during the second half of the year. We expect this seasonal pattern to continue over the long term, although it may be affected by volatility in the homebuilding industry and the COVID-19 pandemic.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our co-principal executive officers and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”)) as of June 30, 2021, the end of the period covered by this Form 10-Q. Based on this evaluation, our co-principal executive officers and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2021 in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

During the financial statement close for the quarter ended June 30, 2021, certain accounting and finance employees worked remotely due to the COVID-19 pandemic. All internal control over financial reporting continued as in the past, but with certain necessary documentation changes in light of the remote working environment for certain personnel. There were no changes during the second quarter of 2021 in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Because of the nature of the homebuilding business, we and certain of our subsidiaries and affiliates have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business. In the opinion of our management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 that was filed with the SEC on February 5, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Century Communities, Inc.



Date: July 28, 2021	By:	/s/ Dale Francescon
		Dale Francescon
		Chairman of the Board and Co-Chief Executive Officer (Co-Principal Executive Officer)

Date: July 28, 2021	By:	/s/ Robert J. Francescon
		Robert J. Francescon
		Co-Chief Executive Officer and President (Co-Principal Executive Officer)


Date: July 28, 2021	By:	/s/ David Messenger
		David Messenger
		Chief Financial Officer (Principal Financial Officer)


Date: July 28, 2021	By:	/s/ J. Scott Dixon
		J. Scott Dixon
		Chief Accounting Officer (Principal Accounting Officer)

RESTATED BYLAWS

CENTURY COMMUNITIES, INC.

ARTICLE I

Meetings of Stockholders

Section 1.1 Annual Meetings. If required by applicable law, an annual meeting of stockholders shall be held for the election of directors at such date, time and place, if any, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting.

Section 1.2 Special Meetings. Subject to the rights, if any, of the holders of any outstanding series of Preferred Stock as provided for or fixed pursuant to the provisions of Article FOURTH of the certificate of incorporation, special meetings of stockholders for any purpose or purposes may be called at any time by (i) the Board of Directors of the corporation (the “Board of Directors”), (ii) the Chairperson of the Board of Directors, (iii) the Chief Executive Officer, or (iv) the President, but such special meetings of stockholders may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Unless (i) a registration statement registering the resale of “Registrable Shares” (as defined in the Registration Rights Agreement made and entered into between the corporation and FBR Capital Markets & Co. (the “Registration Rights Agreement”)) has been declared effective by The Securities and Exchange Commission, and (ii) such Registrable Shares have been listed for trading on a national securities exchange, on or before June 30, 2014, then, notwithstanding the foregoing, the Chief Executive Officer or the President shall call a special meeting of stockholders solely for the purposes of (i) considering and voting upon the removal of each then-serving member of the Board of Directors, and (ii) electing such number of directors as there are then vacancies on the Board of Directors (including any vacancies created by the removal of any director as aforesaid), to be held not more than thirty (30) days after June 30, 2014 (such meeting, the “Special Election Meeting”).

Section 1.3 Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given that shall state the place, if any, date and hour of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the certificate of incorporation or these bylaws, the notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, as of the record date for determining the stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notwithstanding the foregoing, notice of the Special Election Meeting shall be given no less than fifteen (15) nor more than twenty-five (25) days before the date of the Special Election Meeting and shall include the name of each nominee for election as director to be considered by the stockholders at such Special Election Meeting.

Section 1.4 Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is

taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 1.8 of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

Section 1.5 Quorum. Except as otherwise provided by law, the certificate of incorporation or these bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of a majority in voting power of the outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 1.4 of these bylaws until a quorum shall attend. Shares of its own stock belonging to the corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the corporation or any subsidiary of the corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

Section 1.6 Organization. Meetings of stockholders shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in his or her absence by the Chief Executive Officer, or in his or her absence by the President, or in his or her absence by a Vice President, or in the absence of the foregoing persons by a chairperson designated by the Board of Directors, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

Section 1.7 Voting; Proxies. Except as otherwise provided by or pursuant to the provisions of the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot. At all meetings of stockholders for the election of directors at which a quorum is present, each nominee for director shall be elected by a majority of the votes cast. For purposes of this Section 1.7, a “majority of the votes cast” shall mean that the number of votes cast “for” a director nominee exceeds the number of votes cast “against” such director nominee (with “abstentions” and “broker non-votes” not counted as a vote cast either “for” or “against” that nominee’s election); provided, however, that directors shall be elected by a plurality of the votes cast in connection with any Contested Election, as defined herein. For purposes of this Section 1.7, a “Contested Election” is any election of directors in connection with which (a)(i) the Secretary of the corporation receives notice, in compliance with the advance notice requirements for Nominations set forth in Section 1.13 of this Article I, that a stockholder has nominated one or more persons to compete with the persons nominated by the Board of Directors for election to the Board of Directors and (ii) such Nomination has not been withdrawn by such stockholder on or prior to the fifth (5th) day preceding the

date the corporation first mails its notice of meeting for such meeting to the stockholders or (b) one or more director nominees has been presented for election by a stockholder or stockholders pursuant to a solicitation of written consents pursuant to Section 1.10 of this Article I, if then permitted under the certificate of incorporation. If directors are to be elected by a plurality of the votes cast in connection with any Contested Election, stockholders shall not be permitted to vote against a nominee, but rather shall be given the opportunity with regard to each nominee for election to vote for the election of the nominee or to withhold votes with regard to the nominee. All other questions presented to the stockholders at a meeting at which a quorum is present shall, unless otherwise provided by the certificate of incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the corporation, or applicable law or pursuant to any regulation applicable to the corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the corporation which are present in person or by proxy and entitled to vote thereon.

Section 1.8 Fixing Date for Determination of Stockholders of Record. In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, or, to the extent permitted by the certificate of incorporation, to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date: (1) in the case of determination of stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting and, unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for determining the stockholders entitled to vote at such meeting, the record date for determining the stockholders entitled to notice of such meeting shall also be the record date for determining the stockholders entitled to vote at such meeting; (2) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, to the extent permitted by the certificate of incorporation, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, to the extent permitted by the certificate of incorporation, when no prior action of the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for the stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 1.8 at the adjourned meeting.

Section 1.9 List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the

stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the corporation. The list of stockholders must also be open to examination at the meeting as required by applicable law. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.

Section 1.10 Action By Written Consent of Stockholders. Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation.

Section 1.11 Inspectors of Election. The corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by applicable law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.

Section 1.12 Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by

the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person at the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and, if such presiding person should so determine, such presiding person shall so declare to the meeting, and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 1.13 Notice of Stockholder Business and Nominations.

(A) Annual Meetings of Stockholders. (1) Nominations of one or more individuals for election to the Board of Directors (each, a “Nomination” and more than one, “Nominations”) and the proposal of business other than Nominations to be considered by the stockholders (“Business”) may be made at an annual meetings of stockholders only (a) pursuant to the corporation’s notice of meeting (or any supplement thereto), provided, however, that reference in the corporation’s notice of meeting to the election of directors or the election of the members of Board of Directors shall not include or be deemed to include Nominations, (b) by or at the direction of the Board of Directors or (c) by an stockholder of the corporation who was a stockholder of record of the corporation at the time the notice provided for in this Section 1.13 is delivered to the Secretary, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.13.

(2) For Nominations or Business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 1.13, the stockholder must have given timely notice thereof in writing to the Secretary and any proposed Business must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later on the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders of the corporation commence a new time period (or extend any time period) for the giving of a stockholder’s notice as describe above. Such stockholder’s notice shall set forth: (a) as to each Nomination to be made by such stockholder, (i) all information relating to the individual subject to such the Nomination that is required to be disclosed in solicitations of proxies for election of directors in

an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), without regard to the application of the Exchange Act to either the Nomination or the corporation, (ii) such individual’s written consent to being named in a proxy statement as a nominee and to serving as director if elected, and (iii) a statement whether such person, would be in compliance if elected as a director of the corporation, and will comply with all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation; (b) as to the Business proposed by such stockholder, a brief description of the Business, the text of the proposed Business (including the text of any resolutions proposed for consideration and in the event that such Business includes a proposal to amend the by-laws of the corporation, the language of the proposed amendment), the reasons for conducting such Business at the meeting and any material interest in such Business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the Nomination or Business is made (i) the name and address of such stockholder, as they appear on the corporation’s books, and such beneficial owner, (ii) the class, series and number of shares of capital stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to propose such Nomination or Business, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver by proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the Business or elect the nominee subject to the Nomination and/or (b) otherwise to solicit proxies from stockholders of the corporation in support of such Nomination or Business; provided, however, that if the Business is otherwise subject to Rule 14a-8 (or any successor thereto) promulgated under the Exchange Act (“Rule 14a-8”), the foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the corporation of his, her or its intention to present such Business at an annual meeting of stockholders of the corporation in compliance with Rule 14a-8, and such Business has been included in a proxy statement that has been prepared by the corporation to solicit proxies for such annual meeting of stockholders. The corporation may require any individual subject to such Nomination to furnish such other information as it may reasonably require to determine the eligibility of such individual subject to such Nomination to serve as a director of the corporation.

(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 1.13 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation at an annual meeting is increased and there is no public announcement by the corporation naming the nominees for election to the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 1.13 shall also be considered timely, but only with respect to nominees for election to the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the corporation.

(B) Special Meetings of Stockholders. Only such Business shall be conducted at a special meeting of stockholders of the corporation as shall have been brought before the meeting pursuant to the corporation’s notice of meeting; provided, however, that reference therein to the election of directors or the election of members of the Board of Directors shall not include or be deemed to include Nominations. Nominations may be made at a special meeting of stockholders of the corporation at which directors are to be elected pursuant to the corporation’s notice of meeting as aforesaid (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the corporation who is a stockholder of record at the time

the notice provided for in this Section 1.13 is delivered to the Secretary, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 1.13. In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such elections of directors may make Nominations of one or more individuals (as the case may be) for election to such position(s) as specified in the corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 1.13 shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of such special meeting and of the nominees proposed by the Board of Directors to be elected as such special meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting of stockholders of the corporation commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

(C) General. (1) Only individuals subject to a Nomination made in compliance with the procedures set forth in this Section 1.13 shall be eligible for election at an annual or special meeting of stockholders of the corporation, and only such business shall be conducted at an annual or special meeting of stockholders of the corporation as shall have been brought before such meeting in accordance with the procedures set forth in this Section 1.13. Except as otherwise provided by law, the person presiding over the meeting shall have the power and duty (a) to determine whether a Nomination or any Business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.13 and (b) if any proposed Nomination or Business shall be disregarded or that such Nomination or Business shall not be considered or transacted. Notwithstanding the foregoing provisions of this Section 1.13, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a Nomination or Business, such Nomination or Business shall be disregarded and such Nomination or Business shall not be considered or transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation.

(2) For purposed of this Section 1.13, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14, and 15(d) of the Exchange Act (or any successor thereto).

(3) Nothing in this Section 1.13 shall be deemed to affect any (a) rights or obligations, if any, of stockholders with respect to inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 (to the extent the corporation or such proposals are subject to Rule 14a-8) or (b) rights, if any, of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the certificate of incorporation of the corporation.

(4) Nothing in this Section 1.13 shall be deemed to affect any rights or obligations, if any, of stockholders with respect to the making of nominations for the election of directors at the Special Election Meeting pursuant to the Registration Rights Agreement.

ARTICLE II

Board of Directors

Section 2.1 Number; Qualifications. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board of Directors. Directors need not be stockholders.

Section 2.2 Election; Resignation; Vacancies; Removal. The Board of Directors shall initially consist of the persons named as directors in the certificate of incorporation or elected by the incorporator of the corporation, and each director so elected shall hold office until the first annual meeting of stockholders and until his or her successor is duly elected and qualified. At the first annual meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect directors each of whom shall hold office for a term of one year or until his or her successor is duly elected and qualified, subject to such director’s earlier death, resignation, disqualification or removal. Any director may resign at any time upon notice to the corporation. Subject to the rights, if any, of the holders of any outstanding series of Preferred Stock as provided for or fixed pursuant to the provisions of Article FOURTH of the certificate of incorporation and the right of stockholders to elect directors to fill vacancies on the Board of Directors in connection with a Special Election Meeting, newly created directorships resulting from an increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. Except for such additional directors, if any, as are elected by the holders of any outstanding series of Preferred Stock as provided for or fixed pursuant to the provisions of Article FOURTH of the certificate of incorporation and except with respect to the removal of directors at a Special Election Meeting, any director or the entire Board of Directors of the corporation may be removed solely by the affirmative vote of the holders of at least 66 2/3% of the voting power of all the then outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

Section 2.3 Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine.

Section 2.4 Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chief Executive Officer, President, the Secretary, or by any member of the Board of Directors. Notice of a special meeting of the Board of Directors shall be given by the person or persons calling the meeting at least twenty-four (24) hours before the special meeting.

Section 2.5 Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this bylaw shall constitute presence in person at such meeting.

Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board of Directors the directors entitled to cast a majority of the votes of the whole Board of Directors shall constitute a quorum for the transaction of business. Except in cases in which the certificate of incorporation, these bylaws or applicable law otherwise provides, a majority of the votes entitled to be cast by the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 2.7 Organization. Meetings of the Board of Directors shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in his or her absence by the Chief Executive Officer, or in his or her absence by the President, or in their absence by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in

his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

Section 2.8 Action by Unanimous Consent of Directors. Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the board or committee in accordance with applicable law.

ARTICLE III

Committees

Section 3.1 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors or these bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.

Section 3.2 Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these bylaws.

ARTICLE IV

Officers

Section 4.1 Executive Officers; Election; Qualifications; Term of Office, Resignation; Removal; Vacancies. The Board of Directors shall elect a Chief Executive Officer, President and Secretary, and it may, if it so determines, choose a Chairperson of the Board and a Vice Chairperson of the Board from among its members. The Board of Directors may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as it shall from time to time deem necessary or desirable. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. Any officer may resign at any time upon written notice to the corporation. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation. Any number of offices may be held by the same person. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.

Section 4.2 Powers and Duties of Executive Officers. The officers of the corporation shall have such powers and duties in the management of the corporation as may be prescribed in a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties.

Section 4.3 Appointing Attorneys and Agents; Voting Securities of Other Entities. Unless otherwise provided by resolution adopted by the Board of Directors, the Chairperson of the Board, the Chief Executive Officer, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the corporation, for, in the name and on behalf of the corporation, to cast the votes which the corporation may be entitled to cast as the holder of stock or other securities in any other corporation or other entity, any of whose stock or other securities may be held by the corporation, at meetings of the holders of the stock or other securities of such other corporation or other entity, or to consent in writing, in the name of the corporation as such holder, to any action by such other corporation or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consents, and may execute or cause to be executed for, in the name and on behalf of the corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper. Any of the rights set forth in this Section 4.3 which may be delegated to an attorney or agent may also be exercised directly by the Chairperson of the Board, the Chief Executive Officer, the President or any Vice President.

ARTICLE V

Stock

Section 5.1 Certificates. Every holder of stock represented by certificates shall be entitled to have a certificate signed by or in the name of the corporation by the Chairperson or Vice Chairperson of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, certifying the number of shares owned by such holder in the corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue. The corporation shall not have the power to issue a certificate in bearer form.

Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VI

Indemnification

Section 6.1 Right to Indemnification. The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by

reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors.

Section 6.2 Prepayment of Expenses. The corporation shall to the fullest extent not prohibited by applicable law, as it presently exists or may hereafter be amended, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article VI or otherwise.

Section 6.3 Claims. If a claim for indemnification (following the final disposition of such action, suit or proceeding) or advancement of expenses under this Article VI is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the corporation, the Covered Person may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

Section 6.4 Nonexclusivity of Rights. The rights conferred on any Covered Person by this Article VI shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 6.5 Other Sources. The corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person collects as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or nonprofit entity.

Section 6.6 Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such repeal or modification.

Section 6.7 Other Indemnification and Prepayment of Expenses. This Article VI shall not limit the right of the corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.

ARTICLE VII

Miscellaneous

Section 7.1 Fiscal Year. The fiscal year of the corporation shall be determined by resolution of the Board of Directors.

Section 7.2 Seal. The corporate seal shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.

Section 7.3 Manner of Notice. Except as otherwise provided herein or permitted by applicable law, notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice to directors may be given by telecopier, telephone or other means of electronic transmission.

Section 7.4 Waiver of Notice of Meetings of Stockholders, Directors and Committees. Any waiver of notice, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in a waiver of notice.

Section 7.5 Form of Records. Any records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

Section 7.6 Amendment of Bylaws. These bylaws may be altered, amended or repealed, and new bylaws made, by the Board of Directors, but the stockholders may make additional bylaws and may alter and repeal any bylaws whether adopted by them or otherwise. Any bylaw that is to be made, altered, amended or repealed by the stockholders of the corporation shall receive the affirmative vote of the holders of at least 66 2/3% of the voting power of all the then outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE VIII

Exclusive Forum for Certain Actions

Unless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation, (ii) any action asserting a claim of or for breach of a fiduciary duty owed by any director or officer or other employee of the corporation to the corporation or to the corporation’s stockholders, (iii) any action asserting a claim against the corporation or against any director or officer or other employee of the corporation arising pursuant to any provision of the General Corporation Law of the State of Delaware, the certificate of incorporation, as amended, of the corporation, or these bylaws (as they may be amended from time to time), or (iv) any action asserting a claim against the corporation or against any director or officer or other employee of the corporation governed by the internal affairs doctrine, shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction in respect of any of the actions enumerated in clauses (i), (ii), (iii) and (iv) of this Article VIII, the U.S. federal district court for the District of Delaware).

Exhibit 22.1

LIST OF SUBSIDIARY GUARANTORS

Century Communities, Inc. (the “Issuer”), has $500 million principal amount outstanding of 6.75% Senior Notes due May 2027 and $400 million principal amount outstanding of 5.875% Senior Notes due July 2025 (referred to collectively as the “Senior Notes”). As of June 30, 2021 the following 100% owned subsidiaries are guarantors of the outstanding Senior Notes:


Name of Entity		State of Formation, Organization, or Incorporation
5280 Reinsurance, LLC............................................... Augusta Pointe, LLC...................................................		Arizona Colorado
Avalon at Inverness, LLC.............................................		Colorado
AVR A, LLC.................................................................		Colorado
AVR B, LLC.................................................................		Colorado
AVR C, LLC.................................................................		Colorado
Beacon Pointe, LLC.....................................................		Colorado
Benchmark Communities, LLC.....................................		Delaware
Blackstone Homes, LLC...............................................		Colorado
Bluffmont Estates, LLC...............................................		Colorado
BMC East Garrison, LLC...............................................		Delaware
BMC EG Bluffs, LLC.....................................................		Delaware
BMC EG Bungalow, LLC...............................................		Delaware
BMC EG Garden, LLC...................................................		Delaware
BMC EG Grove, LLC.....................................................		Delaware
BMC EG Towns, LLC...................................................		Delaware
BMC EG Village, LLC.....................................................		Delaware
BMC Realty Advisors, Inc.............................................		California
BMCH California, LLC...................................................		Delaware
BMCH North Carolina, LLC...........................................		Delaware
BMCH Tennessee, LLC.................................................		Delaware
BMCH Washington, LLC...............................................		Delaware
Bradburn Village Homes, LLC.......................................		Colorado
Casa Acquisition Corp. ...............................................		Delaware
CC Communities, LLC.................................................		Colorado
CC Southeast Constructors, LLC.................................		North Carolina
CCC Holdings, LLC.....................................................		Colorado
CCG Constructors LLC...............................................		Georgia
CCG Realty Group LLC...............................................		Georgia

CCH Homes, LLC.........................................................		Colorado
CCNC Realty Group, LLC.............................................		North Carolina
CCSC Realty Group, LLC.............................................		South Carolina
Centennial Holding Company LLC.................................		Colorado
Century at Anthology, LLC.........................................		Colorado
Century at Ash Meadows, LLC.....................................		Colorado
Century at Autumn Valley Ranch, LLC.........................		Colorado
Century at Beacon Pointe, LLC...................................		Colorado
Century at Belleview Place, LLC...................................		Colorado
Century at Caley, LLC.................................................		Colorado
Century at Candelas, LLC...........................................		Colorado
Century at Carousel Farms, LLC...................................		Colorado
Century at Castle Pines Town Center, LLC...................		Colorado
Century at Claremont Ranch, LLC...............................		Colorado
Century at Colliers Hill, LLC...........................................		Colorado
Century at Compark Village North, LLC.........................		Colorado
Century at Compark Village South, LLC.......................		Colorado
Century at Coyote Creek, LLC.....................................		Colorado
Century at Forest Meadows, LLC.................................		Colorado
Century at Harvest Meadows, LLC...............................		Colorado
Century at Landmark, LLC...........................................		Colorado
Century at Littleton Village, LLC...................................		Colorado
Century at Littleton Village II, LLC.................................		Colorado
Century at LOR, LLC...................................................		Colorado
Century at Lowry, LLC...............................................		Colorado
Century at Marvella, LLC.............................................		Colorado
Century at Mayfield, LLC.............................................		Colorado
Century at Meadowbrook, LLC.....................................		Colorado
Century at Midtown, LLC.............................................		Colorado
Century at Millennium, LLC...........................................		Colorado
Century at Murphy Creek, LLC.....................................		Colorado
Century at Oak Street, LLC.........................................		Colorado
Century at Observatory Heights, LLC...........................		Colorado
Century at Outlook, LLC.............................................		Colorado
Century at Pearson Grove, LLC...................................		Colorado

Century at Salisbury Heights, LLC.................................		Colorado
Century at Shalom Park, LLC.......................................		Colorado
Century at Southshore, LLC.......................................		Colorado
Century at Spring Valley Ranch, LLC.............................		Colorado
Century at Tanglewood, LLC.......................................		Colorado
Century at Terrain, LLC...............................................		Colorado
Century at The Grove, LLC.........................................		Colorado
Century at the Heights, LLC.........................................		Colorado
Century at The Meadows, LLC.....................................		Colorado
Century at Vista Ridge, LLC.........................................		Colorado
Century at Wildgrass, LLC...........................................		Colorado
Century at Wolf Ranch, LLC.......................................		Colorado
Century at Wyndham Hill, LLC.....................................		Colorado
Century City, LLC.......................................................		Colorado
Century Communities Construction of Arizona, LLC		Arizona
Century Communities Construction of Utah, LLC		Utah
Century Communities Investments LLC…………..		Colorado
Century Communities of Arizona, LLC……………		Arizona
Century Communities of California, LLC.......................		Delaware
Century Communities of Florida, LLC...........................		Colorado
Century Communities of Georgia, LLC.........................		Colorado
Century Communities of Idaho, LLC…………..		Colorado
Century Communities of Nevada, LLC.........................		Delaware
Century Communities of Nevada Realty, LLC ...............		Nevada
Century Communities of North Carolina, LLC.................		Delaware
Century Communities of South Carolina, LLC...............		Delaware
Century Communities of Tennessee, LLC.....................		Delaware
Century Communities of Utah, LLC.............................		Utah
Century Communities of Washington, LLC...................		Delaware
Century Communities Realty of Utah, LLC...................		Utah
Century Communities Southeast, LLC.........................		Colorado
Century Land Holdings, LLC.........................................		Colorado
Century Land Holdings II, LLC.....................................		Colorado
Century Land Holdings of Texas, LLC...........................		Colorado
Century Land Holdings of Utah, LLC.............................		Utah

Century Living, LLC.....................................................		Delaware
Century Rhodes Ranch GC, LLC...................................		Delaware
Century Townhomes at Candelas, LLC.........................		Colorado
Century Tuscany GC, LLC...........................................		Delaware
Cherry Hill Park, LLC ...................................................		Colorado
Cottages at Willow Park, LLC.......................................		Colorado
Crown Hill, LLC...........................................................		Colorado
Enclave at Pine Grove, LLC.........................................		Colorado
Estates at Chatfield Farms, LLC...................................		Colorado
Hearth at Oak Meadows, LLC.......................................		Colorado
Hometown, LLC.........................................................		Colorado
Hometown South, LLC...............................................		Colorado
Horizon Building Services, LLC.....................................		Colorado
Ladera, LLC...............................................................		Colorado
Lakeview Fort Collins, LLC...........................................		Colorado
Lincoln Park at Ridgegate, LLC.....................................		Colorado
Meridian Ranch, LLC...................................................		Colorado
Montecito at Ridgegate, LLC.......................................		Colorado
Neighborhood Associations Group, LLC.........................		Delaware
Park 5th Avenue Development Co., LLC.......................		Colorado
Peninsula Villas, LLC.....................................................		Colorado
Red Rocks Pointe, LLC...............................................		Colorado
Reserve at Highpointe Estates, LLC.............................		Colorado
Reserve at The Meadows, LLC.....................................		Colorado
Saddleback Heights, LLC.............................................		Colorado
SAH Holdings, LLC.......................................................		Colorado
Stetson Ridge Homes, LLC...........................................		Colorado
The Overlook at Tallyn’s Reach...................................		Colorado
The Retreat at Ridgegate, LLC.....................................		Colorado
The Veranda, LLC.......................................................		Colorado
The Wheatlands, LLC.................................................		Colorado
UCP, LLC.....................................................................		Delaware
UCP Barclay III, LLC.....................................................		Delaware
UCP East Garrison, LLC...............................................		Delaware
UCP Kerman, LLC.......................................................		Delaware

UCP Meadowood III, LLC.............................................		Delaware
UCP Sagewood, LLC...................................................		Delaware
UCP Soledad, LLC.......................................................		Delaware
UCP Tapestry, LLC.....................................................		Delaware
Venue at Arista, LLC...................................................		Colorado
Verona Estates, LLC...................................................		Colorado
Villas at Highland Park, LLC...........................................		Colorado
Villas at Murphy Creek, LLC.........................................		Colorado
Waterside at Highland Park, LLC...................................		Colorado
Westown Condominiums, LLC.....................................		Colorado
Westown Townhomes, LLC.........................................		Colorado
Wildgrass, LLC...........................................................		Colorado
WJH LLC.......................................................................		Delaware
WJHAL LLC.................................................................		North Carolina
WJHAL2 LLC...............................................................		North Carolina
WJH Brokerage OH LLC...............................................		Ohio
WJH Brokerage MI LLC...............................................		Michigan
WJH Sales of AZ LLC...................................................		Arizona

EXHIBIT 31.1

CERTIFICATION OF CO-PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dale Francescon, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Century Communities, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: July 28, 2021	/s/ Dale Francescon
	Dale Francescon
	Chairman of the Board and Co-Chief Executive Officer
	(Co-Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION OF CO-PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert J. Francescon, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Century Communities, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: July 28, 2021	/s/ Robert J. Francescon
	Robert J. Francescon
	Co-Chief Executive Officer and President
	(Co-Principal Executive Officer)

EXHIBIT 31.3

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David Messenger, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Century Communities, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: July 28, 2021		/s/ David Messenger
		David Messenger
		Chief Financial Officer (Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Century Communities, Inc. (the “Company”) for the quarterly period ended June 30, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Dale Francescon, Chairman of the Board and Co-Chief Executive Officer (Co-Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: July 28, 2021	/s/ Dale Francescon
	Dale Francescon
	Chairman of the Board and Co-Chief Executive Officer
	(Co-Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Century Communities, Inc. (the “Company”) for the quarterly period ended June 30, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Francescon, Co-Chief Executive Officer and President (Co-Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: July 28, 2021	/s/ Robert J. Francescon
	Robert J. Francescon
	Co-Chief Executive Officer and President
	(Co-Principal Executive Officer)

EXHIBIT 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Century Communities, Inc. (the “Company”) for the quarterly period ended June 30, 2021, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, David Messenger, Chief Financial Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: July 28, 2021	/s/ David Messenger
	David Messenger
	Chief Financial Officer
	(Principal Financial Officer)


	Page No.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020 (audited)	3
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020	4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	5
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2021 and 2020	6
Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	38
Item 4. Controls and Procedures	38
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	39
Item 1A. Risk Factors	39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3. Defaults Upon Senior Securities	39
Item 4. Mine Safety Disclosures	39
Item 5. Other Information	39
Item 6. Exhibits	40
Signatures	41

Item No.		Description
3.1		Certificate of Incorporation of Century Communities, Inc., as amended (incorporated by reference to Exhibit 3.1 to the initial filing of the Company’s Registration Statement on Form S-1, filed with the SEC on May 5, 2014 (File No. 333-195678))
3.2		Restated Bylaws of Century Communities, Inc. (filed herewith)
10.1		Second Amended and Restated Credit Agreement, dated as of May 21, 2021, by and among Century Communities, Inc., the lenders party thereto, Texas Capital Bank, National Association, as Administrative Agent and L/C Issuer, and Texas Capital Bank, National Association, BBVA USA, BofA Securities, Inc., Fifth Third Bank, National Association and U.S. Bank National Association, as Joint Lead Arrangers and Joint Book Runners, and Wells Fargo Bank, N.A., as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 25, 2021 (File No. 001-36491))
22.1		List of Guarantor Subsidiaries (filed herewith)
31.1		Certification of the Co-Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith)
31.2		Certification of the Co-Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith)
31.3		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith)
32.1		Certification of the Co-Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2		Certification of the Co-Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.3		Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS		Inline XBRL Instance Document (the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document (filed herewith)
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document (filed herewith)
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104		Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)