We delivered 2,271 homes for record second quarter homebuilding revenue of $1.84 billion.
Our adjusted gross margin of 24.4% increased 150 basis points year-over-year and was 100 basis points above our guidance.
SG&A as a percentage of homebuilding revenue was 11.9%, an improvement of 190 basis points year-over-year and 110 basis points better than guidance.
Pre-tax income of $169.8 million and earnings per share of $1.01 per share increased 66% and 71% respectively compared to the prior year period.
Our backlog at quarter end was valued at $8.7 billion on 10,104 units, up 58% in dollars and 57% in units compared to last year.
We signed 3,487 net new contracts for $3.1 billion in the quarter.
On a year-over-year basis, our net signed contracts in the second quarter were up 85% in units and 97% in dollars.
We are increasing our full-year 2021 projected home deliveries by 100 units to 10,300 at the midpoint, and we now project return on beginning equity of 14.5% for fiscal year 2021, representing a 570 basis point improvement over 2020.
While we are not providing formal guidance for 2022 at this point, we believe our 2022 return on beginning equity is expected to exceed 20%, and that our gross margin for 2022 will significantly exceed fiscal year 2021's gross margin.
For the three weeks ended May 23, non-binding reservation deposits were up 19% over the comparable period last year.
The market did not dictate this 19% deposit growth, we did.
This quarter our buyers added on average $162,000 or approximately 24% of the base price in lot premiums options and upgrades.
This is up from our long-term average of about 21%.
At quarter-end, we owned or optioned approximately 74,500 lots.
Notwithstanding our 85% order growth this quarter, we met our Q2 guidance of 320 communities at quarter end.
And while we project community count to drop to 310 at the end of our third quarter due simply to the timing of certain community sellouts and openings, we continue to project 340 communities at fiscal year-end.
We also reaffirm our guidance for 10% community count growth in fiscal '22 and this guidance is based solely on the land that we already control today.
We now operate in over 50 markets in 24 states with communities in both high growth and the high barrier to entry markets.
For example, in the 12 months ended April 30, 2021, nearly 16% of contracts were from markets where we had no presence five years ago.
This is up from approximately 6% in the comparable period last year.
First-time homebuyers who are primary buyers in our affordable luxury market accounted for 30% of our deliveries this quarter compared to 25% one year ago.
Orders in our active adult segment were up 135% compared to the second quarter of last year.
With our increased focus on capital efficiency, a record backlog and expanding gross margins, we are projecting ROE growth this year and next with fiscal year 2022 ROE expected to exceed 20%.
As we have discussed over the past 18 months, we have totally revamped our land underwriting standards to inquire [Phonetic] higher, risk-adjusted returns.
At second quarter end, the percentage of lots that we optioned versus owned grew to 49% from 46% at the end of the first quarter and 40% one year ago.
Since we have just about met our previously announced 50-50 target, we are now updating our target to 60% optioned land, and 40% owned.
Since fiscal 2016, we have bought back approximately one-third of the outstanding shares at an average price of $37.20, and in April, we increased our quarterly dividend by 55% to $0.17 per share.
We project approximately $750 million in cash generated from operating activities this year.
With respect to our city living urban condo business, we are very pleased with the renewed demand coming out of New York City where we signed 44 contracts in our second quarter, including 27 at 77 Charlton in West Soho, up from 33 totaled for all of the City Living business in the first quarter of 2021.
We recorded a $10.7 million gain on sale this quarter and expect more through the balance of the year, but we recognize that this business can also be an inconsistent contributor to earnings and thus ROE.
We delivered 2,271 homes at an average price of approximately $809,000 generating record second quarter homebuilding revenue of $1.84 billion.
Deliveries were up 18% in units and 21% in dollars, compared to one year ago.
Our second quarter pre-tax income was $169.8 million compared to $102.1 million in the second quarter of 2020.
Net income was $127.9 million or $1.01 per share diluted compared to $75.7 million and $0.59 per share diluted one year ago.
It's important to note that our second quarter pre-tax and net income included a $34.2 million pre-tax charge or $0.20 per share after tax related to the early redemption of debt.
Without this one-time charge, earnings per share would have been $1.21.
Second quarter adjusted gross margin was 24.4% compared to 22.9% in fiscal year 2020 second quarter, and 100 basis points better than projected.
Looking forward, we are now projecting adjusted gross margin for full year 2021 of 24.6%, up 30 basis points from prior guidance.
On average, 15% to 20% of our deliveries each year are build on spec.
Our strategy is now to delay selling these homes until we reach at least 50% completion, allowing us to maximize the price at which we sell these homes.
Turning back to our second quarter results, as Doug mentioned, SG&A as a percentage of revenue in the quarter was 11.9% of revenues, 190 basis point improvement over the prior year period and 110 basis points better than our guidance.
Joint venture, land sales and other income was $21.5 million in the second quarter compared to $16 million in the same quarter last year and our projection of $7 million.
We ended our second quarter with approximately $2.5 billion of liquidity including $715 million of cash and $1.79 billion available under our $1.9 billion revolving bank credit facility.
In the second quarter, we invested approximately $430 million in land and acquisition and development.
We also redeemed $250 million of our 5.625% notes due in 2024 in the quarter, which resulted in the $34 million charge I noted earlier.
In total, in the first half of fiscal year '21, we retired approximately $440 million of debt and have reduced our debt to capital ratio at quarter-end to 42.2% on a gross basis and 35.6% on a net basis, compared to 43.8% and 35.8% respectively at the end of the first quarter of fiscal year 2021.
We continue to target a net debt to capital ratio in the high 20% range by fiscal year-end.
We also continue to project approximately $750 million in cash generation from operating activities in fiscal year '21.
As Doug noted, we will continue to use our cash to invest in the growth of our business with excess cash returned to shareholders and used to further reduce our financial leverage, including repaying $410 million of our 5.875% public notes that are due in February 2022, when they become callable at par in mid-November '21.
We now expect full-year deliveries of between 10,200 and 10,400 units with approximately 2,675 to be delivered in the third quarter.
We estimate an average delivered price for the full year of between $805,000 and $825,000 per home.
This is up $15,000 at the midpoint, compared to previous guidance.
Average delivered price for the third quarter is expected to be between $820,000 ad $840,000.
As I mentioned earlier, we project adjusted gross margin of 24.6% for the full fiscal year, up from our previous projection of 24.3%.
We expect adjusted gross margin to be approximately 24.8% in the third quarter, which implies a fourth quarter margin of 25.4%.
We expect our gross margin to grow further from Q4 in fiscal year 2022.
As Doug said, we have increased our projected return on beginning equity for fiscal year '21 by 570 basis points to 14.5% and we expect it to exceed 20% in fiscal year '22.
We expect full year interest in cost of sales to be approximately 2.4%, which is also what we expect in the third quarter versus 2.5% in fiscal 2020.
We expect SG&A as a percentage of revenues to be approximately 11.8% for the full year and 11.6% in the third quarter.
We expect community count to be 310 at the end of our third quarter and 340 at fiscal year-end with an additional 10% growth in community count by fiscal year-end '22.
Our full year guide for other income, income from unconsolidated entities and land sales gross margin is now $110 million for the full year, up $30 million from our prior guidance with approximately $20 million projected for the third quarter.
To wrap it up, we continue to believe that with our strong land position, our plans to grow community count this year and next, and the wide variety of homes that we offer in 24 states and 50 markets, we are very well positioned to capitalize on the extraordinary demand we are seeing in the housing market.

Summary:
We delivered 2,271 homes for record second quarter homebuilding revenue of $1.84 billion.
Pre-tax income of $169.8 million and earnings per share of $1.01 per share increased 66% and 71% respectively compared to the prior year period.
Net income was $127.9 million or $1.01 per share diluted compared to $75.7 million and $0.59 per share diluted one year ago.
We now expect full-year deliveries of between 10,200 and 10,400 units with approximately 2,675 to be delivered in the third quarter.
We expect our gross margin to grow further from Q4 in fiscal year 2022.