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Tri Pointe Homes, Inc. - Quarter Report: 2016 March (Form 10-Q)

 

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 March 31, 2016

or

o

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

For the transition period from              to             

Commission File Number 1-35796

 

TRI Pointe Group, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

61-1763235

(State or other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

19540 Jamboree Road, Suite 300

Irvine, California 92612

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (949) 438-1400

 

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  x    No  ¨

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

 

Large accelerated filer

x

Accelerated filer

¨

 

 

 

 

Non-accelerated filer

¨  (Do not check if a smaller reporting company)

Smaller reporting company

¨

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

Registrant’s shares of common stock outstanding at April 22, 2016: 162,048,087

 

 

 

 


EXPLANATORY NOTE

As used in this Quarterly Report on Form 10-Q (including the consolidated financial statements and condensed notes thereto in this report), unless the context otherwise requires:

 

·

“Closing Date” refers to July 7, 2014;

 

·

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

·

“GAAP” refers to U.S. generally accepted accounting principles;

 

·

“Merger” refers to the merger of a wholly owned subsidiary of TRI Pointe with and into WRECO, with WRECO surviving the merger and becoming a wholly owned subsidiary of TRI Pointe;

 

·

“SEC” refers to the United States Securities and Exchange Commission;

 

·

“Securities Act” refers to the Securities Act of 1933, as amended;

 

·

“Transaction Agreement” refers to the agreement dated as of November 3, 2013 by and among Weyerhaeuser, TRI Pointe, WRECO, and a wholly owned subsidiary of TRI Pointe;

 

·

“TRI Pointe Homes” refers to TRI Pointe Homes, Inc., a Delaware corporation;

 

·

“TRI Pointe Group” refers to TRI Pointe Group, Inc., a Delaware corporation;

 

·

“Weyerhaeuser” refers to Weyerhaeuser Company, a Washington corporation and the former parent of WRECO; and

 

·

“WRECO” refers to Weyerhaeuser Real Estate Company, a Washington corporation, which following the Closing Date was renamed “TRI Pointe Holdings, Inc.”

Additionally, references to “TRI Pointe”, “the Company”, “we”, “us” or “our” in this Quarterly Report on Form 10-Q (including the consolidated financial statements and condensed notes thereto in this report) have the following meanings, unless the context otherwise requires:

 

·

For periods prior to July 7, 2015: TRI Pointe Homes and its subsidiaries; and

 

·

For periods from and after July 7, 2015: TRI Pointe Group and its subsidiaries.

 

 

 


TRI POINTE GROUP, INC.

FORM 10-Q

INDEX

March 31, 2016

 

 

 

Page
Number

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements for TRI Pointe Group, Inc.

3

 

 

 

 

Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015

3

 

 

 

 

Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2016 and 2015

4

 

 

 

 

Consolidated Statements of Equity for the Year Ended December 31, 2015 and the Three Months Ended March 31, 2016 (unaudited)

5

 

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (unaudited)

6

 

 

 

 

Condensed Notes to Consolidated Financial Statements (unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

 

 

 

Item 4.

Controls and Procedures

45

 

Part II.  OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

46

 

 

 

Item 1A.

Risk Factors

46

 

 

 

Item2.

Unregistered Sales of Equity Securities and Use of Proceeds

46

 

 

 

Item 6.

Exhibits

47

 

 

 

SIGNATURES

49

 

 

 

 

- 2 -


PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

TRI POINTE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

144,019

 

 

$

214,485

 

Receivables

 

 

32,688

 

 

 

43,710

 

Real estate inventories

 

 

2,705,251

 

 

 

2,519,273

 

Investments in unconsolidated entities

 

 

17,494

 

 

 

18,999

 

Goodwill and other intangible assets, net

 

 

161,895

 

 

 

162,029

 

Deferred tax assets, net

 

 

126,812

 

 

 

130,657

 

Other assets

 

 

45,918

 

 

 

48,918

 

Total assets

 

$

3,234,077

 

 

$

3,138,071

 

Liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

67,601

 

 

$

64,840

 

Accrued expenses and other liabilities

 

 

201,302

 

 

 

216,263

 

Unsecured revolving credit facility

 

 

374,392

 

 

 

299,392

 

Seller financed loans

 

 

 

 

 

2,434

 

Senior notes, net

 

 

869,939

 

 

 

868,679

 

Total liabilities

 

 

1,513,234

 

 

 

1,451,608

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares

   issued and outstanding as of March 31, 2016 and December 31, 2015,

   respectively

 

 

 

 

 

 

Common stock, $0.01 par value, 500,000,000 shares authorized;

   162,007,850 and 161,813,750 shares issued and outstanding at

   March 31, 2016 and December 31, 2015, respectively

 

 

1,620

 

 

 

1,618

 

Additional paid-in capital

 

 

912,719

 

 

 

911,197

 

Retained earnings

 

 

780,418

 

 

 

751,868

 

Total stockholders’ equity

 

 

1,694,757

 

 

 

1,664,683

 

Noncontrolling interests

 

 

26,086

 

 

 

21,780

 

Total equity

 

 

1,720,843

 

 

 

1,686,463

 

Total liabilities and equity

 

$

3,234,077

 

 

$

3,138,071

 

 

See accompanying condensed notes to the unaudited consolidated financial statements.

 

 

 

 

- 3 -


TRI POINTE GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Homebuilding:

 

 

 

 

 

 

 

 

Home sales revenue

 

$

423,055

 

 

$

374,265

 

Land and lot sales revenue

 

 

355

 

 

 

2,000

 

Other operations

 

 

580

 

 

 

993

 

Total revenues

 

 

423,990

 

 

 

377,258

 

Cost of home sales

 

 

324,499

 

 

 

299,907

 

Cost of land and lot sales

 

 

779

 

 

 

2,308

 

Other operations

 

 

566

 

 

 

562

 

Sales and marketing

 

 

26,321

 

 

 

23,286

 

General and administrative

 

 

28,396

 

 

 

28,153

 

Restructuring charges

 

 

135

 

 

 

222

 

Homebuilding income from operations

 

 

43,294

 

 

 

22,820

 

Equity in (loss) income of unconsolidated entities

 

 

(14

)

 

 

107

 

Other income, net

 

 

115

 

 

 

256

 

Homebuilding income before taxes

 

 

43,395

 

 

 

23,183

 

Financial Services:

 

 

 

 

 

 

 

 

Revenues

 

 

148

 

 

 

 

Expenses

 

 

58

 

 

 

26

 

Equity in income (loss) of unconsolidated entities

 

 

715

 

 

 

(33

)

Financial services income (loss) from operations before taxes

 

 

805

 

 

 

(59

)

Income before taxes

 

 

44,200

 

 

 

23,124

 

Provision for income taxes

 

 

(15,490

)

 

 

(7,827

)

Net income

 

 

28,710

 

 

 

15,297

 

Net income attributable to noncontrolling interests

 

 

(160

)

 

 

 

Net income available to common stockholders

 

$

28,550

 

 

$

15,297

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

0.09

 

Diluted

 

$

0.18

 

 

$

0.09

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

161,895,640

 

 

 

161,490,970

 

Diluted

 

 

162,192,610

 

 

 

162,807,376

 

 

See accompanying condensed notes to the unaudited consolidated financial statements.

 

 

 

 

- 4 -


TRI POINTE GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

(in thousands, except share amounts)

 

 

 

Number of

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Shares of Common

 

 

Common

 

 

Paid-in

 

 

Retained

 

 

Stockholders'

 

 

Noncontrolling

 

 

Total

 

 

 

Stock (Note 1)

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Equity

 

 

Interests

 

 

Equity

 

Balance at December 31, 2014

 

 

161,355,490

 

 

$

1,614

 

 

$

906,159

 

 

$

546,407

 

 

$

1,454,180

 

 

$

18,296

 

 

$

1,472,476

 

Net income

 

 

 

 

 

 

 

 

 

 

 

205,461

 

 

 

205,461

 

 

 

1,720

 

 

 

207,181

 

Adjustment to capital contribution by

   Weyerhaeuser, net

 

 

 

 

 

 

 

 

(6,747

)

 

 

 

 

 

(6,747

)

 

 

 

 

 

(6,747

)

Shares issued under share-based

   awards

 

 

458,260

 

 

 

4

 

 

 

1,612

 

 

 

 

 

 

1,616

 

 

 

 

 

 

1,616

 

Excess tax benefit of share-based

   awards, net

 

 

 

 

 

 

 

 

428

 

 

 

 

 

 

428

 

 

 

 

 

 

428

 

Minimum tax withholding paid on

   behalf of employees for restricted

   stock units

 

 

 

 

 

 

 

 

(2,190

)

 

 

 

 

 

(2,190

)

 

 

 

 

 

(2,190

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,935

 

 

 

 

 

 

11,935

 

 

 

 

 

 

11,935

 

Distributions to noncontrolling

   interests, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,833

)

 

 

(3,833

)

Net effect of consolidations,

   de-consolidations and other

   transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,597

 

 

 

5,597

 

Balance at December 31, 2015

 

 

161,813,750

 

 

 

1,618

 

 

 

911,197

 

 

 

751,868

 

 

 

1,664,683

 

 

 

21,780

 

 

 

1,686,463

 

Net income

 

 

 

 

 

 

 

 

 

 

 

28,550

 

 

 

28,550

 

 

 

160

 

 

 

28,710

 

Shares issued under share-based

   awards

 

 

194,100

 

 

 

2

 

 

 

4

 

 

 

 

 

 

6

 

 

 

 

 

 

6

 

Minimum tax withholding paid on

   behalf of employees for restricted

   stock units

 

 

 

 

 

 

 

 

(1,087

)

 

 

 

 

 

(1,087

)

 

 

 

 

 

(1,087

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,605

 

 

 

 

 

 

2,605

 

 

 

 

 

 

2,605

 

Distributions to noncontrolling

   interests, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,719

)

 

 

(1,719

)

Net effect of consolidations,

   de-consolidations and other

   transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,865

 

 

 

5,865

 

Balance at March 31, 2016

 

 

162,007,850

 

 

$

1,620

 

 

$

912,719

 

 

$

780,418

 

 

$

1,694,757

 

 

$

26,086

 

 

$

1,720,843

 

 

See accompanying condensed notes to the unaudited consolidated financial statements.

 

 

 

 

- 5 -


TRI POINTE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income

 

$

28,710

 

 

$

15,297

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,792

 

 

 

1,481

 

Equity in income of unconsolidated entities, net

 

 

(701

)

 

 

(74

)

Deferred income taxes, net

 

 

3,845

 

 

 

2,018

 

Amortization of stock-based compensation

 

 

2,605

 

 

 

2,381

 

Charges for impairments and lot option abandonments

 

 

182

 

 

 

360

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Real estate inventories

 

 

(180,540

)

 

 

(127,304

)

Receivables

 

 

11,141

 

 

 

(2,894

)

Other assets

 

 

2,871

 

 

 

6,963

 

Accounts payable

 

 

2,761

 

 

 

(7,865

)

Accrued expenses and other liabilities

 

 

(14,828

)

 

 

1,323

 

Returns on investments in unconsolidated entities, net

 

 

2,486

 

 

 

 

Net cash used in operating activities

 

 

(139,676

)

 

 

(108,314

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(411

)

 

 

(378

)

Investments in unconsolidated entities

 

 

(13

)

 

 

(978

)

Net cash used in investing activities

 

 

(424

)

 

 

(1,356

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings from debt

 

 

75,000

 

 

 

50,000

 

Repayment of debt

 

 

(2,434

)

 

 

(2,535

)

Net repayments of debt held by variable interest entities

 

 

(132

)

 

 

(742

)

Contributions from noncontrolling interests

 

 

808

 

 

 

873

 

Distributions to noncontrolling interests

 

 

(2,527

)

 

 

(726

)

Proceeds from issuance of common stock under share-based awards

 

 

6

 

 

 

263

 

Excess tax benefits of share-based awards

 

 

 

 

 

308

 

Minimum tax withholding paid on behalf of employees for share-based awards

 

 

(1,087

)

 

 

(1,827

)

Net cash provided by financing activities

 

 

69,634

 

 

 

45,614

 

Net decrease in cash and cash equivalents

 

 

(70,466

)

 

 

(64,056

)

Cash and cash equivalents - beginning of period

 

 

214,485

 

 

 

170,629

 

Cash and cash equivalents - end of period

 

$

144,019

 

 

$

106,573

 

 

See accompanying condensed notes to the unaudited consolidated financial statements.

 

 

 

- 6 -


TRI POINTE GROUP, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

1.

Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

TRI Pointe Group is engaged in the design, construction and sale of innovative single-family attached and detached homes through its portfolio of six quality brands across eight states, including Maracay Homes in Arizona, Pardee Homes in California and Nevada, Quadrant Homes in Washington, Trendmaker Homes in Texas, TRI Pointe Homes in California and Colorado and Winchester Homes in Maryland and Virginia.

Formation of TRI Pointe Group

On July 7, 2015, TRI Pointe Homes reorganized its corporate structure (the “Reorganization”) whereby TRI Pointe Homes became a direct, wholly owned subsidiary of TRI Pointe Group.  As a result of the Reorganization, each share of common stock, par value $0.01 per share, of TRI Pointe Homes (“Homes Common Stock”) was cancelled and converted automatically into the right to receive one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of TRI Pointe Group (“Group Common Stock”), each share having the same designations, rights, powers and preferences, and the qualifications, limitations and restrictions thereof as the shares of Homes Common Stock being so converted.  TRI Pointe Group, as the successor issuer to TRI Pointe Homes (pursuant to Rule 12g-3(a) under the Exchange Act), began making filings under the Securities Act and the Exchange Act on July 7, 2015.

In connection with the Reorganization, TRI Pointe Group (i) became a co-issuer of TRI Pointe Homes’ 4.375% Senior Notes due 2019 (the “2019 Notes”) and TRI Pointe Homes’ 5.875% Senior Notes due 2024 (the “2024 Notes” and together with the 2019 Notes, the “Senior Notes”); and (ii) replaced TRI Pointe Homes as the borrower under TRI Pointe Homes’ existing unsecured revolving credit facility.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with GAAP, as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as described in “Reverse Acquisition” below, as well as other entities in which the Company has a controlling interest and variable interest entities (“VIEs”) in which the Company is the primary beneficiary.  The noncontrolling interests as of March 31, 2016 and December 31, 2015 represent the outside owners’ interests in the Company’s consolidated entities and the net equity of the VIE owners.  All significant intercompany accounts have been eliminated upon consolidation.  In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation with respect to interim financial statements, have been included.

Reverse Acquisition

On the Closing Date, TRI Pointe consummated the Merger with WRECO, with WRECO becoming a wholly owned subsidiary of TRI Pointe. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations. For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer.

Use of Estimates

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from our estimates.

Reclassifications

Certain amounts in our consolidated financial statements for prior years have been reclassified to conform to the current period presentation.

 

- 7 -


Recently Issued Accounting Standards

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirements in ASC Topic 605, Revenue Recognition, most industry-specific guidance throughout the industry topics of the accounting standards codification, and some cost guidance related to construction-type and production-type contracts. On July 9, 2015, the FASB voted to defer the effective date of ASU No. 2014-09 by one year and it is now effective for public entities for the annual periods ending after December 15, 2017, and for annual and interim periods thereafter.  Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09.  Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and the interim periods within those years, beginning after December 15, 2016.  We are currently evaluating the approach for implementation and the potential impact of adopting this guidance on our consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We believe the adoption of this guidance will not have a material effect on our consolidated financial statements.

In February 2015, the FASB issued Accounting Standards Update No. 2015-02, (“ASU 2015-02”), Consolidation (Topic 810): Amendments to the Consolidation Analysis.   ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015.  We adopted ASU 2015-02 on January 1, 2016 and the adoption had no impact on our current or prior year financial statements.

In November 2015, the FASB issued Accounting Standards Update No. 2015-17, (“ASU 2015-17”), Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of position.  ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.  The adoption of ASU 2015-17 is not expected to have a material effect on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, (“ASU 2016-02”), Leases (Topic 842): Leases, which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and, at that time, we will adopt the new standard using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 may have on our consolidated financial statements and disclosures.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, (“ASU 2016-09”), Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are currently evaluating the impact that the adoption of ASU 2016-09 may have on our consolidated financial statements and disclosures.

 

 

2.

Restructuring

Restructuring charges were comprised of the following (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Employee-related charges

 

$

13

 

 

$

112

 

Lease termination charges

 

 

122

 

 

 

110

 

Total

 

$

135

 

 

$

222

 

 

 

- 8 -


Employee-related charges of $13,000 and $112,000 for the three months ended March 31, 2016 and 2015, respectively, relate to severance-related expenses for employees terminated during the period.  Lease termination charges of $122,000 and $110,000 for the three months ended March 31, 2016, and 2015, respectively, relate to the adjustment of restructuring reserves related to the estimate of sublease income.

Changes in employee-related restructuring reserves were as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Accrued employee-related charges, beginning of period

 

$

220

 

 

$

3,844

 

Current year charges

 

 

13

 

 

 

112

 

Payments

 

 

(159

)

 

 

(3,423

)

Accrued employee-related charges, end of period

 

$

74

 

 

$

533

 

 

Changes in lease termination related restructuring reserves were as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Accrued lease termination charges, beginning of period

 

$

767

 

 

$

1,394

 

Current year charges

 

 

122

 

 

 

110

 

Payments

 

 

(312

)

 

 

(578

)

Accrued lease termination charges, end of period

 

$

577

 

 

$

926

 

 

Employee and lease termination restructuring reserves are included in accrued expenses and other liabilities on our consolidated balance sheets.

 

 

3.

Segment Information

We operate two principal businesses: homebuilding and financial services.

Our homebuilding operations consist of six homebuilding companies that acquire and develop land and construct and sell single-family detached and attached homes. In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon the above factors, our homebuilding operations are comprised of the following six reportable segments: Maracay Homes, consisting of operations in Arizona; Pardee Homes, consisting of operations in California and Nevada; Quadrant Homes, consisting of operations in Washington; Trendmaker Homes, consisting of operations in Texas; TRI Pointe Homes, consisting of operations in California and Colorado; and Winchester Homes, consisting of operations in Maryland and Virginia.

Our financial services operation (“TRI Pointe Solutions”) is a reportable segment and is comprised of mortgage financing operations (“TRI Pointe Connect”) and title services operations (“TRI Pointe Assurance”).  While our homebuyers may obtain financing from any mortgage provider of their choice, TRI Pointe Connect, which was formed as a joint venture with an established mortgage lender, can act as a preferred mortgage broker to our homebuyers in all of the markets in which we operate, providing mortgage financing that helps facilitate the sale and closing process as well as generate additional fee income for us.  TRI Pointe Assurance provides title examinations for our homebuyers in our Trendmaker Homes and Winchester Homes brands.  TRI Pointe Assurance is a wholly owned subsidiary of TRI Pointe and acts as a title agency for First American Title Insurance Company.  We commenced our financial services operation in the fourth quarter of 2014.

The term “Corporate” refers to a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit and risk management, information technology and human resources, to benefit from economies of scale. Our Corporate non-operating segment also includes general and administrative expenses related to operating our corporate headquarters. A portion of the expenses incurred by Corporate is allocated to the homebuilding reporting segments.

The reportable segments follow the same accounting policies as our consolidated financial statements described in Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.

 

 

- 9 -


Total revenues and income before taxes for each of our reportable segments were as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Revenues

 

 

 

 

 

 

 

 

Maracay Homes

 

$

45,437

 

 

$

32,477

 

Pardee Homes

 

 

118,933

 

 

 

85,658

 

Quadrant Homes

 

 

46,058

 

 

 

45,629

 

Trendmaker Homes

 

 

43,786

 

 

 

56,208

 

TRI Pointe Homes

 

 

131,957

 

 

 

106,858

 

Winchester Homes

 

 

37,819

 

 

 

50,428

 

Total homebuilding revenues

 

 

423,990

 

 

 

377,258

 

Financial services

 

 

148

 

 

 

 

Total

 

$

424,138

 

 

$

377,258

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

 

 

 

 

 

 

 

 

Maracay Homes

 

$

2,636

 

 

$

1,040

 

Pardee Homes

 

 

32,131

 

 

 

13,559

 

Quadrant Homes

 

 

3,696

 

 

 

1,580

 

Trendmaker Homes

 

 

2,058

 

 

 

4,360

 

TRI Pointe Homes

 

 

10,715

 

 

 

11,132

 

Winchester Homes

 

 

661

 

 

 

381

 

Corporate

 

 

(8,502

)

 

 

(8,869

)

Total homebuilding income before taxes

 

 

43,395

 

 

 

23,183

 

Financial services

 

 

805

 

 

 

(59

)

Total

 

$

44,200

 

 

$

23,124

 

 

Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Real estate inventories

 

 

 

 

 

 

 

 

Maracay Homes

 

$

211,362

 

 

$

206,912

 

Pardee Homes

 

 

1,066,086

 

 

 

1,011,982

 

Quadrant Homes

 

 

209,707

 

 

 

190,038

 

Trendmaker Homes

 

 

214,290

 

 

 

199,398

 

TRI Pointe Homes

 

 

742,753

 

 

 

659,130

 

Winchester Homes

 

 

261,053

 

 

 

251,813

 

Total

 

$

2,705,251

 

 

$

2,519,273

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

 

Maracay Homes

 

$

241,762

 

 

$

227,857

 

Pardee Homes

 

 

1,139,330

 

 

 

1,089,586

 

Quadrant Homes

 

 

231,436

 

 

 

202,024

 

Trendmaker Homes

 

 

227,791

 

 

 

213,562

 

TRI Pointe Homes

 

 

907,366

 

 

 

832,423

 

Winchester Homes

 

 

289,890

 

 

 

278,374

 

Corporate

 

 

193,688

 

 

 

292,169

 

Total homebuilding assets

 

 

3,231,263

 

 

 

3,135,995

 

Financial services

 

 

2,814

 

 

 

2,076

 

Total

 

$

3,234,077

 

 

$

3,138,071

 

 

 

 

- 10 -


4.

Earnings Per Share

The following table sets forth the components used in the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Numerator:

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

28,550

 

 

$

15,297

 

Denominator:

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

 

161,895,640

 

 

 

161,490,970

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

Stock options and unvested restricted stock units

 

 

296,970

 

 

 

1,316,406

 

Diluted weighted-average shares outstanding

 

 

162,192,610

 

 

 

162,807,376

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

0.09

 

Diluted

 

$

0.18

 

 

$

0.09

 

Antidilutive stock options not included in diluted earnings per

   share

 

 

5,449,790

 

 

 

1,266,863

 

 

 

5.

Receivables

Receivables consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Escrow proceeds and other accounts receivable, net

 

$

22,026

 

 

$

32,917

 

Warranty insurance receivable (Note 14)

 

 

10,362

 

 

 

10,493

 

Notes and contracts receivable

 

 

300

 

 

 

300

 

Total receivables

 

$

32,688

 

 

$

43,710

 

 

 

6.

Real Estate Inventories

Real estate inventories consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Real estate inventories owned:

 

 

 

 

 

 

 

 

Homes completed or under construction

 

$

650,602

 

 

$

575,076

 

Land under development

 

 

1,554,925

 

 

 

1,443,461

 

Land held for future development

 

 

295,428

 

 

 

295,241

 

Model homes

 

 

146,078

 

 

 

140,232

 

Total real estate inventories owned

 

 

2,647,033

 

 

 

2,454,010

 

Real estate inventories not owned:

 

 

 

 

 

 

 

 

Land purchase and land option deposits

 

 

24,278

 

 

 

39,055

 

Consolidated inventory held by VIEs

 

 

33,940

 

 

 

26,208

 

Total real estate inventories not owned

 

 

58,218

 

 

 

65,263

 

Total real estate inventories

 

$

2,705,251

 

 

$

2,519,273

 

 

Homes completed or under construction is comprised of costs associated with homes in various stages of construction and includes direct construction and related land acquisition and land development costs. Land under development primarily consists of land acquisition and land development costs, which include capitalized interest and real estate taxes, associated with land undergoing improvement activity. Land held for future development principally reflects land acquisition and land development costs related to land where development activity has not yet begun or has been suspended, but is expected to occur in the future.

Real estate inventories not owned represents deposits related to land purchase and land option agreements as well as consolidated inventory held by variable interest entities. For further details, see Note 8, Variable Interest Entities.

 

- 11 -


Interest incurred, capitalized and expensed were as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Interest incurred

 

$

15,149

 

 

$

15,176

 

Interest capitalized

 

 

(15,149

)

 

 

(15,176

)

Interest expensed

 

$

 

 

$

 

Capitalized interest in beginning inventory

 

$

140,311

 

 

$

124,461

 

Interest capitalized as a cost of inventory

 

 

15,149

 

 

 

15,176

 

Interest previously capitalized as a cost of inventory,

   included in cost of sales

 

 

(8,830

)

 

 

(6,765

)

Capitalized interest in ending inventory

 

$

146,630

 

 

$

132,872

 

 

Interest is capitalized to real estate inventory during development and other qualifying activities. Interest that is capitalized to real estate inventory is included in cost of home sales as related units are delivered.  Interest that is expensed as incurred is included in other income, net.

Real estate inventory impairments and land and lot option abandonments

Land and lot option abandonments and pre-acquisition charges were as follows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Land and lot option abandonments and pre-acquisition charges

 

 

182

 

 

 

360

 

Total

 

$

182

 

 

$

360

 

 

Impairments of real estate inventory relate primarily to projects or communities that include homes completed or under construction. Within a project or community, there may be individual homes or parcels of land that are currently held for sale. Impairment charges recognized as a result of adjusting individual held-for-sale assets within a community to estimated fair value less cost to sell are also included in the total impairment charges above.  Charges for inventory impairments are expensed to cost of sales. During the three month periods ended March 31, 2016 and 2015, respectively, the Company did not incur any real estate inventory impairment charges.

In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date. We have option deposits and capitalized pre-acquisition costs associated with the optioned land and lots. When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition. Option deposits and capitalized pre-acquisition costs associated with the assets under option may be forfeited at that time. Charges for such forfeitures are expensed to cost of sales.

 

 

7.

Investments in Unconsolidated Entities

As of March 31, 2016, we held equity investments in six active homebuilding partnerships or limited liability companies and one financial services limited liability company. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 7% to 55%, depending on the investment, with no controlling interest held in any of these investments.

Investments Held

Our cumulative investment in entities accounted for on the equity method, including our share of earnings and losses, consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Limited liability company interests

 

$

14,226

 

 

$

15,739

 

General partnership interests

 

 

3,268

 

 

 

3,260

 

Total

 

$

17,494

 

 

$

18,999

 

 

 

- 12 -


Unconsolidated Financial Information

Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are provided below. Because our ownership interest in these entities varies, a direct relationship does not exist between the information presented below and the amounts that are reflected on our consolidated balance sheets as our investment in unconsolidated entities or on our consolidated statement of operations as equity in income (loss) of unconsolidated entities.

Assets and liabilities of unconsolidated entities (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Assets

 

 

 

 

 

 

 

 

Cash

 

$

14,871

 

 

$

18,641

 

Receivables

 

 

5,588

 

 

 

13,108

 

Real estate inventories

 

 

94,309

 

 

 

92,881

 

Other assets

 

 

1,147

 

 

 

1,180

 

Total assets

 

$

115,915

 

 

$

125,810

 

Liabilities and equity

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

8,296

 

 

$

14,443

 

Company’s equity

 

 

17,494

 

 

 

18,999

 

Outside interests' equity

 

 

90,125

 

 

 

92,368

 

Total liabilities and equity

 

$

115,915

 

 

$

125,810

 

 

Results of operations from unconsolidated entities (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Net sales

 

$

3,209

 

 

$

76

 

Other operating expense

 

 

(2,150

)

 

 

(736

)

Other income (expense)

 

 

1

 

 

 

2

 

Net income (loss)

 

$

1,060

 

 

$

(658

)

Company’s equity in income (loss) of unconsolidated entities

 

$

701

 

 

$

74

 

 

 

8.

Variable Interest Entities

In the ordinary course of business, we enter into land option agreements in order to procure land and residential lots for future development and the construction of homes. The use of such land option agreements generally allows us to reduce the risks associated with direct land ownership and development, and reduces our capital and financial commitments. Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such deposits are recorded as land purchase and land option deposits under real estate inventories not owned in the accompanying consolidated balance sheets.

We analyze each of our land option agreements and other similar contracts under the provisions of ASC 810 Consolidation to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, if we are determined to be the primary beneficiary of the VIE, we will consolidate the VIE in our financial statements and reflect its assets as real estate inventory not owned included in our real estate inventories, its liabilities as debt (nonrecourse) held by VIEs in accrued expenses and other liabilities and the net equity of the VIE owners as noncontrolling interests on our consolidated balance sheets. In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE.

Creditors of the entities with which we have land option agreements have no recourse against us. The maximum exposure to loss under our land option agreements is limited to non-refundable option deposits and any capitalized pre-acquisition costs. In some cases, we have also contracted to complete development work at a fixed cost on behalf of the land owner and budget shortfalls and savings will be borne by us.

 

- 13 -


The following provides a summary of our interests in land option agreements (in thousands):

 

 

 

March 31, 2016

 

 

December 31, 2015

 

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

Consolidated VIEs

 

$

6,465

 

 

$

27,964

 

 

$

33,940

 

 

$

3,003

 

 

$

23,239

 

 

$

26,208

 

Unconsolidated VIEs

 

 

4,164

 

 

 

94,843

 

 

N/A

 

 

 

11,615

 

 

 

74,590

 

 

N/A

 

Other land option agreements

 

 

20,114

 

 

 

257,886

 

 

N/A

 

 

 

27,440

 

 

 

279,612

 

 

N/A

 

Total

 

$

30,743

 

 

$

380,693

 

 

$

33,940

 

 

$

42,058

 

 

$

377,441

 

 

$

26,208

 

 

Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not considered VIEs.

In addition to the deposits presented in the table above, our exposure to loss related to our land option contracts consisted of capitalized pre-acquisition costs of $8.0 million and $5.0 million as of March 31, 2016 and December 31, 2015, respectively. These pre-acquisition costs were included in real estate inventories as land under development on our consolidated balance sheets.  

 

 

9.

Goodwill and Other Intangible Assets

In connection with the Merger, $139.3 million of goodwill has been recorded as of March 31, 2016.  

We have two intangible assets recorded as of March 31, 2016, comprised of an existing trade name from the acquisition of Maracay Homes in 2006, which has a 20 year useful life, and a TRI Pointe Homes trade name resulting from the Merger in 2014 which has an indefinite useful life.

Goodwill and other intangible assets consisted of the following (in thousands):

 

 

 

March 31, 2016

 

 

December 31, 2015

 

 

 

Gross

 

 

 

 

 

 

Net

 

 

Gross

 

 

 

 

 

 

Net

 

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

Amortization

 

 

Amount

 

Goodwill

 

$

139,304

 

 

$

 

 

$

139,304

 

 

$

139,304

 

 

$

 

 

$

139,304

 

Trade names

 

 

27,979

 

 

 

(5,388

)

 

 

22,591

 

 

 

27,979

 

 

 

(5,254

)

 

 

22,725

 

Total

 

$

167,283

 

 

$

(5,388

)

 

$

161,895

 

 

$

167,283

 

 

$

(5,254

)

 

$

162,029

 

 

The remaining useful life of our amortizing intangible asset related to the Maracay Homes trade name was 9.9 and 10.2 years as of March 31, 2016 and December 31, 2015, respectively. Amortization expense related to this intangible asset was $134,000 for each of the three month periods ended March 31, 2016 and 2015, respectively.  Amortization of this intangible asset was charged to sales and marketing expense.  Our $17.3 million indefinite life intangible asset related to the TRI Pointe Homes trade name is not amortizing.  All trade names are evaluated for impairment on an annual basis or more frequently if indicators of impairment exist.

Expected amortization of our intangible asset related to Maracay Homes for the remainder of 2016, the next four years and thereafter is (in thousands):

 

Remainder of 2016

 

$

400

 

2017

 

 

534

 

2018

 

 

534

 

2019

 

 

534

 

2020

 

 

534

 

Thereafter

 

 

2,755

 

Total

 

$

5,291

 

 

 

 

- 14 -


10.

Other Assets

Other assets consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Prepaid expenses

 

$

11,787

 

 

$

14,523

 

Refundable fees and other deposits

 

 

16,891

 

 

 

17,056

 

Development rights, held for future use or sale

 

 

4,360

 

 

 

4,360

 

Deferred loan costs - unsecured revolving credit facility

 

 

2,128

 

 

 

2,179

 

Operating properties and equipment, net

 

 

7,453

 

 

 

7,643

 

Other

 

 

3,299

 

 

 

3,157

 

Total

 

$

45,918

 

 

$

48,918

 

 

 

11.

Accrued Expenses and Other Liabilities

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

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Accrued payroll and related costs

 

$

13,502

 

 

$

28,264

 

Warranty reserves (Note 14)

 

 

45,419

 

 

 

45,948

 

Estimated cost for completion of real estate inventories

 

 

49,221

 

 

 

52,818

 

Customer deposits

 

 

15,422

 

 

 

12,132

 

Debt (nonrecourse) held by VIEs

 

 

2,310

 

 

 

2,442

 

Income tax liability to Weyerhaeuser (Note 17)

 

 

8,975

 

 

 

8,900

 

Accrued income taxes payable

 

 

11,015

 

 

 

19,279

 

Liability for uncertain tax positions (Note 16)

 

 

307

 

 

 

307

 

Accrued interest

 

 

13,937

 

 

 

2,417

 

Accrued insurance expense

 

 

1,408

 

 

 

1,402

 

Other tax liability

 

 

23,477

 

 

 

21,764

 

Other

 

 

16,309

 

 

 

20,590

 

Total

 

$

201,302

 

 

$

216,263

 

 

 

12.

Senior Notes, Unsecured Revolving Credit Facility and Seller Financed Loans

Senior Notes

The Senior Notes consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

4.375% Senior Notes due June 15, 2019

 

$

450,000

 

 

$

450,000

 

5.875% Senior Notes due June 15, 2024

 

 

450,000

 

 

 

450,000

 

Discount and deferred loan costs

 

 

(30,061

)

 

 

(31,321

)

Total

 

$

869,939

 

 

$

868,679

 

 

On the Closing Date, TRI Pointe assumed WRECO’s obligations as issuer of the Senior Notes. The 2019 Notes were issued at 98.89% of their aggregate principal amount and the 2024 Notes were issued at 98.15% of their aggregate principal amount. The net proceeds of $861.3 million, after debt issuance costs and discounts, from the offering were deposited into two separate escrow accounts following the closing of the offering on June 13, 2014.

The 2019 Notes and the 2024 Notes mature on June 15, 2019 and June 15, 2024, respectively. Interest is payable semiannually in arrears on June 15 and December 15. As of March 31, 2016, no principal has been paid on the Senior Notes, and there was $19.5 million of capitalized debt financing costs, included in senior notes on our consolidated balance sheet, related to the Senior Notes that will amortize over the lives of the Senior Notes. Accrued interest related to the Senior Notes was $13.5 million and $1.9 million as of March 31, 2016 and December 31, 2015, respectively.

 

- 15 -


Unsecured Revolving Credit Facility

Unsecured revolving credit facility consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Unsecured revolving credit facility

 

$

374,392

 

 

$

299,392

 

 

In May 2015, the Company amended its unsecured revolving credit facility (the “Credit Facility”) from $425 million to $550 million.  The Credit Facility matures on May 18, 2019, and contains a sublimit of $75 million for letters of credit. The Company may borrow under the Credit Facility in the ordinary course of business to fund its operations, including its land development and homebuilding activities. Borrowings under the Credit Facility will be governed by, among other things, a borrowing base. Interest rates on borrowings under the Credit Facility will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 1.45% to 2.20%, depending on the Company’s leverage ratio. As of March 31, 2016, the outstanding balance under the Credit Facility was $374.4 million with an interest rate of 2.13% per annum and $170.3 million of availability after considering the borrowing base provisions and outstanding letters of credit.  As of March 31, 2016 there was $2.1 million of capitalized debt financing costs, included in Other Assets on our consolidated balance sheet, related to the Credit Facility that will amortize over the life of the Credit Facility, maturing on May 18, 2019.  Accrued interest related to the Credit Facility was $484,000 and $407,000 as of March 31, 2016 and December 31, 2015, respectively.

At March 31, 2016 we had outstanding letters of credit of $5.3 million.  These letters of credit were issued to secure various financial obligations.  We believe it is not probable that any outstanding letters of credit will be drawn upon.

Seller Financed Loans

Seller financed loans consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Seller financed loans

 

$

 

 

$

2,434

 

 

Accrued interest on the seller financed loans outstanding as of December 31, 2015 was $89,000.

Interest Incurred

During the three month periods ended March 31, 2016 and 2015, the Company incurred interest of $15.1 million and $15.2 million, respectively, related to all debt during the period. All interest incurred was capitalized to inventory for the three month periods ended March 31, 2016 and 2015, respectively. Included in interest incurred was amortization of deferred financing and Senior Note discount costs of $1.3 million and $1.2 million for the three months ended March 31, 2016 and 2015, respectively.  Accrued interest related to all outstanding debt at March 31, 2016 and December 31, 2015 was $13.9 million and $2.4 million, respectively.  

Covenant Requirements

The Senior Notes contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions.

Under the Credit Facility, the Company is required to comply with certain financial covenants, including but not limited to (i) a minimum consolidated tangible net worth; (ii) a maximum total leverage ratio; and (iii) a minimum interest coverage ratio.

The Company was in compliance with all applicable financial covenants as of March 31, 2016 and December 31, 2015.

 

 

 

- 16 -


13.

Fair Value Disclosures

Fair Value Measurements

ASC Topic 820, Fair Value Measurements and Disclosures, defines “fair value” as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:

 

·

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 measurement date

 

·

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

Fair Value of Financial Instruments

A summary of assets and liabilities at March 31, 2016 and December 31, 2015, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

 

 

 

 

 

March 31, 2016

 

 

December 31, 2015

 

 

 

Hierarchy

 

Book Value

 

 

Fair Value

 

 

Book Value

 

 

Fair Value

 

Senior Notes (1)

 

Level 2

 

 

889,456

 

 

 

894,375

 

 

 

889,054

 

 

 

881,460

 

Unsecured revolving credit facility (2)

 

Level 2

 

 

374,392

 

 

 

374,392

 

 

 

299,392

 

 

 

299,392

 

Seller financed loans

 

Level 2

 

 

 

 

 

 

 

 

2,434

 

 

 

2,368

 

 __________

(1)

The estimated fair value of the Senior Notes at March 31, 2016 and December 31, 2015 is based on quoted market prices.

(2)

We believe that the carrying value of the Credit Facility approximates fair value based on the short term nature of the current market rate amended on May 18, 2015.

 

At March 31, 2016 and December 31, 2015, the carrying value of cash and cash equivalents and receivables approximated fair value.

 

Fair Value of Nonfinancial Assets

Nonfinancial assets include items such as real estate inventories and long-lived assets that are measured at fair value on a nonrecurring basis when events and circumstances indicate the carrying value is not recoverable. The following table presents impairment charges and the remaining net fair value for nonfinancial assets that were measured during the periods presented (in thousands):

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

 

March 31, 2016

 

 

December 31, 2015

 

 

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

 

Fair Value

 

 

 

 

 

Impairment

 

 

Net of

 

 

Impairment

 

 

Net of

 

 

 

 

 

Charge

 

 

Impairment

 

 

Charge

 

 

Impairment

 

Real estate inventories (1)

 

 

 

$

 

 

$

 

 

$

1,167

 

 

$

28,540

 

__________

(1)

Fair value of real estate inventories, net of impairment charges represents only those assets whose carrying values were adjusted to fair value in the respective periods presented. The fair value of these real estate inventories impaired was determined based on recent offers received from outside third parties or actual contracts.

 

 

14.

Commitments and Contingencies

Legal Matters

Lawsuits, claims and proceedings have been and may be instituted or asserted against us in the normal course of business, including actions brought on behalf of various classes of claimants. We are also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices and environmental protection. As a result, we are subject to periodic examinations or inquiry by agencies administering these laws and regulations.

 

- 17 -


We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary.  In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. Accordingly, it is possible that the ultimate outcome of any matter, if in excess of a related accrual or if no accrual was made, could be material to our financial statements.  For matters as to which the Company believes a loss is probable and reasonably estimable, it had legal reserves of $400,000 and $450,000 as of March 31, 2016 and December 31, 2015, respectively.

Warranty

Warranty reserves are accrued as home deliveries occur. Our warranty reserves on homes delivered will vary based on product type and geographic area and also depending on state and local laws. The warranty reserve is included in accrued expenses and other liabilities on our consolidated balance sheets and represents expected future costs based on our historical experience over previous years. Estimated warranty costs are charged to cost of home sales in the period in which the related home sales revenue is recognized.

We maintain general liability insurance designed to protect us against a portion of our risk of loss from construction-related claims. We also generally require our subcontractors and design professionals to indemnify us for liabilities arising from their work, subject to various limitations. However, such indemnity is significantly limited with respect to certain subcontractors that are added to our general liability insurance policy. Included in our warranty reserve accrual are allowances to cover our estimated costs of self-insured retentions and deductible amounts under these policies and estimated costs for claims that may not be covered by applicable insurance or indemnities. Estimation of these accruals include consideration of our claims history, including current claims and estimates of claims incurred but not yet reported.  In addition, we record expected recoveries from insurance carriers when proceeds are probable and estimable.  Outstanding warranty insurance receivables were $10.4 million and $10.5 million as of March 31, 2016 and December 31, 2015, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheet.

There can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers, that we will be able to renew our insurance coverage or renew it at reasonable rates, that we will not be liable for damages, cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence or building related claims or that claims will not arise out of uninsurable events or circumstances not covered by insurance and not subject to effective indemnification agreements with certain subcontractors.

Warranty reserves consisted of the following (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Warranty reserves, beginning of period

 

$

45,948

 

 

$

33,270

 

Warranty reserves accrued

 

 

2,073

 

 

 

2,872

 

Adjustments to pre-existing reserves

 

 

 

 

 

301

 

Warranty expenditures

 

 

(2,602

)

 

 

(2,478

)

Warranty reserves, end of period

 

$

45,419

 

 

$

33,965

 

 

Performance Bonds

We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. As of March 31, 2016 and December 31, 2015, the Company had outstanding surety bonds totaling $426.5 million and $414.1 million, respectively. The beneficiaries of the bonds are various municipalities.

 

 

15.

Stock-Based Compensation

2013 Long-Term Incentive Plan

The Company’s stock compensation plan, the 2013 Long-Term Incentive Plan (the “2013 Incentive Plan”), was adopted by TRI Pointe in January 2013 and amended with the approval of our stockholders in 2014. The 2013 Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, common stock, restricted stock, restricted stock units and performance awards. The 2013 Incentive Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2013 Incentive Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation.

 

- 18 -


As amended, the number of shares of our common stock that may be issued under the 2013 Incentive Plan is 11,727,833 shares. To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2013 Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of our common stock generally shall again be available under the 2013 Incentive Plan. As of March 31, 2016 there were 7,637,283 shares available for future grant under the 2013 Incentive Plan.

Converted Awards

Under the Transaction Agreement, each outstanding Weyerhaeuser equity award held by an employee of WRECO was converted into a similar equity award with TRI Pointe, based on the final exchange ratio of 2.1107 (the “Exchange Ratio”), rounded down to the nearest whole number of shares of common stock. The Company filed a registration statement on Form S-8 (Registration No. 333-197461) on July 16, 2014 to register 4,105,953 shares related to these equity awards. The converted awards have the same terms and conditions as the Weyerhaeuser equity awards except that all performance share units were surrendered in exchange for time-vesting restricted stock units without any performance-based vesting conditions or requirements and the exercise price of each converted stock option is equal to the original exercise price divided by the Exchange Ratio. There will be no future grants under the WRECO equity incentive plans.  

The following table presents compensation expense recognized related to all stock-based awards (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Total stock-based compensation

 

$

2,605

 

 

$

2,381

 

 

Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations.  As of March 31, 2016, total unrecognized stock-based compensation related to all stock-based awards was $27.2 million and the weighted average term over which the expense was expected to be recognized was 2.3 years.

Summary of Stock Option Activity

The following table presents a summary of stock option awards for the three months ended March 31, 2016:

 

 

 

 

 

 

 

Weighted

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

 

Aggregate

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

Intrinsic

 

 

 

 

 

 

 

Price

 

 

Contractual

 

 

Value

 

 

 

Options

 

 

Per Share

 

 

Life

 

 

(in thousands)

 

Options outstanding at December 31, 2015

 

 

3,220,147

 

 

$

13.12

 

 

 

5.2

 

 

$

3,081

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(1,401

)

 

 

4.51

 

 

 

 

 

 

 

Forfeited

 

 

(144,407

)

 

 

12.33

 

 

 

 

 

 

 

Options outstanding at March 31, 2016

 

 

3,074,339

 

 

 

13.15

 

 

 

5.1

 

 

 

2,075

 

Options exercisable at March 31, 2016

 

 

2,871,261

 

 

 

12.46

 

 

 

4.6

 

 

 

2,515

 

 

The intrinsic value of each stock option award outstanding or exercisable is the difference between the fair market value of the Company’s common stock at the end of the period and the exercise price of each stock option award to the extent it is considered “in-the-money”. A stock option award is considered to be “in-the-money” if the fair market value of the Company’s stock is greater than the exercise price of the stock option award. The aggregate intrinsic value of options outstanding and options exercisable represents the value that would have been received by the holders of stock option awards had they exercised their stock option award on the last trading day of the period and sold the underlying shares at the closing price on that day.

 

- 19 -


Summary of Restricted Stock Unit Activity

The following table presents a summary of restricted stock units (“RSUs”) for the three months ended March 31, 2016:

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Aggregate

 

 

 

Restricted

 

 

Grant Date

 

 

Intrinsic

 

 

 

Stock

 

 

Fair Value

 

 

Value

 

 

 

Units

 

 

Per Share

 

 

(in thousands)

 

Nonvested RSUs at December 31, 2015

 

 

1,958,033

 

 

$

12.21

 

 

$

24,808

 

Granted

 

 

1,829,923

 

 

 

8.27

 

 

 

21,556

 

Vested

 

 

(298,772

)

 

 

14.26

 

 

 

 

Forfeited

 

 

(714

)

 

 

14.48

 

 

 

 

Nonvested RSUs at March 31, 2016

 

 

3,488,470

 

 

 

9.93

 

 

 

41,094

 

 

On March 5, 2015, the Company granted an aggregate of 440,800 time-vested RSUs to employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three year period.  The fair value of each RSU granted on March 5, 2015 was measured using a price of $14.97 per share, which was the closing stock price on the date of grant.  Each award will be expensed on a straight-line basis over the vesting period.

On March 9, 2015, the Company granted 411,804, 384,351, and 274,536 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively, with 1/3 of the performance-based RSU amounts being allocated to each of the three following separate performance goals: total shareholder return (compared to a group of peer homebuilding companies); earnings per share; and stock price. The performance-based RSUs granted will vest in each case, if at all, based on the percentage of attainment of the applicable performance goal. The performance periods for the performance-based RSUs with vesting based on total shareholder return and earnings per share are January 1, 2015 to December 31, 2017. The performance period for the performance-based RSUs with vesting based on stock price is January 1, 2016 to December 31, 2017. The fair value of the performance-based RSUs related to the total shareholder return and stock price performance goals was determined to be $7.55 and $7.90 per share, respectively, based on a Monte Carlo simulation. The fair value of the performance-based RSUs related to the earnings per share goal was measured using a price of $14.57 per share, which was the closing stock price on the date of grant. Each grant will be expensed over the requisite service period.

 

On August 12, 2015, the Company granted an aggregate of 69,008 RSUs to the non-employee members of its board of directors. These RSUs vest in their entirety on the day immediately prior to the Company’s 2016 Annual Meeting of Stockholders. The fair value of each RSU granted on August 12, 2015 was measured using $14.49 per share, which was the closing price on the date of grant. Each award will be expensed on a straight-line basis over the vesting period.

On March 1, 2016, the Company granted an aggregate of 1,120,677 time-vested RSUs to employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three year period.  The fair value of each RSU granted on March 1, 2016 was measured using a price of $10.49 per share, which was the closing stock price on the date of grant.  Each award will be expensed on a straight-line basis over the vesting period.

On March 1, 2016, the Company granted 297,426, 285,986 and 125,834 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the Company’s percentage attainment of specified threshold, target and maximum performance goals. The percentage of these performance-based RSUs that vest will be determined by comparing the Company’s total stockholder return to the total stockholder returns of a group of peer homebuilding companies. The performance period for these performance-based RSUs is January 1, 2016 to December 31, 2018. These performance-based RSUs will not vest if the Company’s total stockholder return from January 1, 2016 to December 31, 2018 is not a positive number, provided that the executive will thereafter become vested in the award units, or portion thereof, that would have otherwise vested on December 31, 2018 if on any day after December 31, 2018 and on or before December 31, 2020, the Company’s total stockholder return is greater than zero and the executive is employed by the Company on that date. If the performance-based RSUs have not vested on or before December 31, 2020, such performance-based RSUs shall be cancelled and forfeited for no consideration. The fair value of these performance-based RSUs was determined to be $4.76 per share based on a Monte Carlo simulation. Each award will be expensed over the requisite service period.

As RSUs vest, a portion of the shares awarded is generally withheld to cover employee tax withholdings. As a result, the number of RSUs vested and the number of shares of TRI Pointe common stock issued will differ.

 

 

 

- 20 -


16.

Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rates for the years in which taxes are expected to be paid or recovered.  Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740.  We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable.  Our assessment considers, among other things, the nature, frequency and severity of our current and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods and tax planning alternatives.

We had net deferred tax assets of $126.8 million and $130.7 million as of March 31, 2016 and December 31, 2015, respectively.  We had a valuation allowance related to those net deferred tax assets of $3.3 million and $4.4 million as of March 31, 2016 and December 31, 2015, respectively.  The Company will continue to evaluate both positive and negative evidence in determining the need for a valuation allowance against its deferred tax assets. Changes in positive and negative evidence, including differences between the Company's future operating results and the estimates utilized in the determination of the valuation allowance, could result in changes in the Company's estimate of the valuation allowance against its deferred tax assets. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company's consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation allowance against the Company's deferred tax assets.

Our provision for income taxes totaled $15.5 million and $7.8 million for the three months ended March 31, 2016 and 2015, respectively.  The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense.  The Company had $307,000 of liabilities for uncertain tax positions recorded as of both March 31, 2016 and December 31, 2015, respectively.  The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

 

 

17.

Related Party Transactions

Prior to the Merger, WRECO was a wholly owned subsidiary of Weyerhaeuser.  Weyerhaeuser provided certain services including payroll processing and related employee benefits, other corporate services such as corporate governance, cash management and other treasury services, administrative services such as government relations, tax, internal audit, legal, accounting, human resources and equity-based compensation plan administration, lease of office space, aviation services and insurance coverage. WRECO was allocated a portion of Weyerhaeuser corporate general and administrative costs on either a proportional cost or usage basis.

TRI Pointe has certain liabilities with Weyerhaeuser related to a tax sharing agreement.   As of March 31, 2016 and December 31, 2015, we had an income tax liability to Weyerhaeuser of $9.0 million and $8.9 million, respectively, which is recorded in accrued expenses and other liabilities on the accompanying balance sheet.

 

 

 

- 21 -


18.

Supplemental Disclosure to Consolidated Statements of Cash Flow

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized of $15,149 and

   $15,176 (Note 6)

 

$

 

 

$

 

Income taxes

 

$

19,876

 

 

$

1,504

 

Supplemental disclosures of noncash activities:

 

 

 

 

 

 

 

 

Amortization of senior note discount capitalized to real

   estate inventory

 

$

402

 

 

$

380

 

Amortization of deferred loan costs capitalized to real

   estate inventory

 

$

858

 

 

$

 

Effect of net consolidation and de-consolidation of

   variable interest entities:

 

 

 

 

 

 

 

 

Increase in consolidated real estate

   inventory not owned

 

$

5,865

 

 

$

1,453

 

Increase in deposits on real estate under option or

   contract and other assets

 

$

 

 

$

129

 

Increase in noncontrolling interests

 

$

(5,865

)

 

$

(1,582

)

 

 

19.

Supplemental Guarantor Information

On the Closing Date, the TRI Pointe Homes assumed WRECO’s obligations as issuer of the Senior Notes.  Additionally, all of TRI Pointe’s wholly owned subsidiaries that are guarantors of the Company’s Credit Facility, including WRECO and certain of its wholly owned subsidiaries, entered into supplemental indentures pursuant to which they jointly and severally guaranteed TRI Pointe’s obligations with respect to the Senior Notes.  In connection with the Reorganization, TRI Pointe Group became a co-issuer with TRI Pointe Homes of the Senior Notes.

Presented below are the condensed consolidating balance sheets at March 31, 2016 and December 31, 2015, condensed consolidating statements of operations for the three months ended March 31, 2016 and 2015 and condensed consolidating statement of cash flows for the three month periods ended March 31, 2016 and 2015.  TRI Pointe’s non-guarantor subsidiaries represent less than 3% on an individual and aggregate basis of consolidated total assets, total revenues, and income from operations before taxes and cash flow from operating activities.  Therefore, the non-guarantor subsidiaries’ information is not separately presented in the tables below, but included with the guarantor subsidiaries.

 

- 22 -


Condensed Consolidating Balance Sheet (in thousands):

 

 

 

March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,860

 

 

$

87,159

 

 

$

 

 

$

144,019

 

Receivables

 

 

7,150

 

 

 

25,538

 

 

 

 

 

 

32,688

 

Intercompany receivables

 

 

860,686

 

 

 

 

 

 

(860,686

)

 

 

 

Real estate inventories

 

 

742,753

 

 

 

1,962,498

 

 

 

 

 

 

2,705,251

 

Investments in unconsolidated entities

 

 

 

 

 

17,494

 

 

 

 

 

 

17,494

 

Goodwill and other intangible assets, net

 

 

156,604

 

 

 

5,291

 

 

 

 

 

 

161,895

 

Investments in subsidiaries

 

 

1,134,337

 

 

 

 

 

 

(1,134,337

)

 

 

 

Deferred tax assets, net

 

 

18,952

 

 

 

107,860

 

 

 

 

 

 

126,812

 

Other assets

 

 

10,129

 

 

 

35,789

 

 

 

 

 

 

45,918

 

Total Assets

 

$

2,987,471

 

 

$

2,241,629

 

 

$

(1,995,023

)

 

$

3,234,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

16,822

 

 

$

50,779

 

 

$

 

 

$

67,601

 

Intercompany payables

 

 

 

 

 

860,686

 

 

 

(860,686

)

 

 

 

Accrued expenses and other liabilities

 

 

31,561

 

 

 

169,741

 

 

 

 

 

 

201,302

 

Unsecured revolving credit facility

 

 

374,392

 

 

 

 

 

 

 

 

 

374,392

 

Senior notes

 

 

869,939

 

 

 

 

 

 

 

 

 

869,939

 

Total Liabilities

 

 

1,292,714

 

 

 

1,081,206

 

 

 

(860,686

)

 

 

1,513,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

1,694,757

 

 

 

1,134,337

 

 

 

(1,134,337

)

 

 

1,694,757

 

Noncontrolling interests

 

 

 

 

 

26,086

 

 

 

 

 

 

26,086

 

Total Equity

 

 

1,694,757

 

 

 

1,160,423

 

 

 

(1,134,337

)

 

 

1,720,843

 

Total Liabilities and Equity

 

$

2,987,471

 

 

$

2,241,629

 

 

$

(1,995,023

)

 

$

3,234,077

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 23 -


19.

Supplemental Guarantor Information (continued)

Condensed Consolidating Balance Sheet (in thousands):

 

 

 

December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

147,771

 

 

$

66,714

 

 

$

 

 

$

214,485

 

Receivables

 

 

17,358

 

 

 

26,352

 

 

 

 

 

 

43,710

 

Intercompany receivables

 

 

783,956

 

 

 

 

 

 

(783,956

)

 

 

 

Real estate inventories

 

 

657,221

 

 

 

1,862,052

 

 

 

 

 

 

2,519,273

 

Investments in unconsolidated entities

 

 

 

 

 

18,999

 

 

 

 

 

 

18,999

 

Goodwill and other intangible assets, net

 

 

156,604

 

 

 

5,425

 

 

 

 

 

 

162,029

 

Investments in subsidiaries

 

 

1,093,261

 

 

 

 

 

 

(1,093,261

)

 

 

 

Deferred tax assets, net

 

 

19,061

 

 

 

111,596

 

 

 

 

 

 

130,657

 

Other assets

 

 

12,219

 

 

 

36,699

 

 

 

 

 

 

48,918

 

Total Assets

 

$

2,887,451

 

 

$

2,127,837

 

 

$

(1,877,217

)

 

$

3,138,071

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

20,444

 

 

$

44,396

 

 

$

 

 

$

64,840

 

Intercompany payables

 

 

 

 

 

783,956

 

 

 

(783,956

)

 

 

 

Accrued expenses and other liabilities

 

 

32,219

 

 

 

184,044

 

 

 

 

 

 

216,263

 

Unsecured revolving credit facility

 

 

299,392

 

 

 

 

 

 

 

 

 

299,392

 

Seller financed loans

 

 

2,034

 

 

 

400

 

 

 

 

 

 

2,434

 

Senior notes

 

 

868,679

 

 

 

 

 

 

 

 

 

868,679

 

Total Liabilities

 

 

1,222,768

 

 

 

1,012,796

 

 

 

(783,956

)

 

 

1,451,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

1,664,683

 

 

 

1,093,261

 

 

 

(1,093,261

)

 

 

1,664,683

 

Noncontrolling interests

 

 

 

 

 

21,780

 

 

 

 

 

 

21,780

 

Total Equity

 

 

1,664,683

 

 

 

1,115,041

 

 

 

(1,093,261

)

 

 

1,686,463

 

Total Liabilities and Equity

 

$

2,887,451

 

 

$

2,127,837

 

 

$

(1,877,217

)

 

$

3,138,071

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 24 -


19.

Supplemental Guarantor Information (continued)

Condensed Consolidating Statement of Operations (in thousands):

 

 

 

Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Homebuilding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenue

 

$

131,957

 

 

$

291,098

 

 

$

 

 

$

423,055

 

Land and lot sales revenue

 

 

 

 

 

355

 

 

 

 

 

 

355

 

Other operations

 

 

 

 

 

580

 

 

 

 

 

 

580

 

Total revenues

 

 

131,957

 

 

 

292,033

 

 

 

 

 

 

423,990

 

Cost of home sales

 

 

110,452

 

 

 

214,047

 

 

 

 

 

 

324,499

 

Cost of land and lot sales

 

 

 

 

 

779

 

 

 

 

 

 

779

 

Other operations

 

 

 

 

 

566

 

 

 

 

 

 

566

 

Sales and marketing

 

 

6,064

 

 

 

20,257

 

 

 

 

 

 

26,321

 

General and administrative

 

 

13,212

 

 

 

15,184

 

 

 

 

 

 

28,396

 

Restructuring charges

 

 

 

 

 

135

 

 

 

 

 

 

135

 

Homebuilding income from operations

 

 

2,229

 

 

 

41,065

 

 

 

 

 

 

43,294

 

Equity in loss of unconsolidated entities

 

 

 

 

 

(14

)

 

 

 

 

 

(14

)

Other income (loss), net

 

 

357

 

 

 

(242

)

 

 

 

 

 

115

 

Homebuilding income before taxes

 

 

2,586

 

 

 

40,809

 

 

 

 

 

 

43,395

 

Financial Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

148

 

 

 

 

 

 

148

 

Expenses

 

 

 

 

 

58

 

 

 

 

 

 

58

 

Equity in income of unconsolidated entities

 

 

 

 

 

715

 

 

 

 

 

 

715

 

Financial services income before taxes

 

 

 

 

 

805

 

 

 

 

 

 

805

 

Income before taxes

 

 

2,586

 

 

 

41,614

 

 

 

 

 

 

44,200

 

Equity of net income (loss) of subsidiaries

 

 

27,231

 

 

 

 

 

 

(27,231

)

 

 

 

Provision for income taxes

 

 

(1,267

)

 

 

(14,223

)

 

 

 

 

 

(15,490

)

Net income (loss)

 

 

28,550

 

 

 

27,391

 

 

 

(27,231

)

 

 

28,710

 

Net income attributable to noncontrolling interests

 

 

 

 

 

(160

)

 

 

 

 

 

(160

)

Net income (loss) available to common stockholders

 

$

28,550

 

 

$

27,231

 

 

$

(27,231

)

 

$

28,550

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 25 -


19.

Supplemental Guarantor Information (continued)

Condensed Consolidating Statement of Operations (in thousands):

 

 

 

Three Months Ended March 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Homebuilding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home sales revenue

 

$

106,858

 

 

$

267,407

 

 

$

 

 

$

374,265

 

Land and lot sales revenue

 

 

 

 

 

2,000

 

 

 

 

 

 

2,000

 

Other operations

 

 

 

 

 

993

 

 

 

 

 

 

993

 

Total revenues

 

 

106,858

 

 

 

270,400

 

 

 

 

 

 

377,258

 

Cost of home sales

 

 

86,981

 

 

 

212,926

 

 

 

 

 

 

299,907

 

Cost of land and lot sales

 

 

 

 

 

2,308

 

 

 

 

 

 

2,308

 

Other operations

 

 

 

 

 

562

 

 

 

 

 

 

562

 

Sales and marketing

 

 

4,981

 

 

 

18,305

 

 

 

 

 

 

23,286

 

General and administrative

 

 

12,672

 

 

 

15,481

 

 

 

 

 

 

28,153

 

Restructuring charges

 

 

 

 

 

222

 

 

 

 

 

 

222

 

Homebuilding income from operations

 

 

2,224

 

 

 

20,596

 

 

 

 

 

 

22,820

 

Equity in income of unconsolidated entities

 

 

 

 

 

107

 

 

 

 

 

 

107

 

Other income, net

 

 

39

 

 

 

217

 

 

 

 

 

 

256

 

Homebuilding income before taxes

 

 

2,263

 

 

 

20,920

 

 

 

 

 

 

23,183

 

Financial Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

26

 

 

 

 

 

 

26

 

Equity in loss of unconsolidated entities

 

 

 

 

 

(33

)

 

 

 

 

 

(33

)

Financial services loss from operations before taxes

 

 

 

 

 

(59

)

 

 

 

 

 

(59

)

Income before taxes

 

 

2,263

 

 

 

20,861

 

 

 

 

 

 

23,124

 

Equity of net income (loss) of subsidiaries

 

 

13,861

 

 

 

 

 

 

(13,861

)

 

 

 

Provision for income taxes

 

 

(827

)

 

 

(7,000

)

 

 

 

 

 

(7,827

)

Net income (loss) available to common stockholders

 

$

15,297

 

 

$

13,861

 

 

$

(13,861

)

 

$

15,297

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 26 -


19.

Supplemental Guarantor Information (continued)

Condensed Consolidating Statement of Cash Flows (in thousands):

 

 

 

Three Months Ended March 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(73,056

)

 

$

(66,620

)

 

$

 

 

$

(139,676

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(216

)

 

 

(195

)

 

 

 

 

 

(411

)

Investments in unconsolidated entities

 

 

 

 

 

(13

)

 

 

 

 

 

(13

)

Intercompany

 

 

(89,524

)

 

 

 

 

 

89,524

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(89,740

)

 

 

(208

)

 

 

89,524

 

 

 

(424

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings from debt

 

 

75,000

 

 

 

 

 

 

 

 

 

75,000

 

Repayment of debt

 

 

(2,034

)

 

 

(400

)

 

 

 

 

 

(2,434

)

Net repayments of debt held by variable interest entities

 

 

 

 

 

(132

)

 

 

 

 

 

(132

)

Contributions from noncontrolling interests

 

 

 

 

 

808

 

 

 

 

 

 

808

 

Distributions to noncontrolling interests

 

 

 

 

 

(2,527

)

 

 

 

 

 

(2,527

)

Proceeds from issuance of common stock under

   share-based awards

 

 

6

 

 

 

 

 

 

 

 

 

6

 

Minimum tax withholding paid on behalf of employees for

   restricted stock units

 

 

(1,087

)

 

 

 

 

 

 

 

 

(1,087

)

Intercompany

 

 

 

 

 

89,524

 

 

 

(89,524

)

 

 

 

Net cash provided by (used in) financing activities

 

 

71,885

 

 

 

87,273

 

 

 

(89,524

)

 

 

69,634

 

Net (decrease) increase in cash and cash equivalents

 

 

(90,911

)

 

 

20,445

 

 

 

 

 

 

(70,466

)

Cash and cash equivalents - beginning of period

 

 

147,771

 

 

 

66,714

 

 

 

 

 

 

214,485

 

Cash and cash equivalents - end of period

 

$

56,860

 

 

$

87,159

 

 

$

 

 

$

144,019

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 27 -


19.

Supplemental Guarantor Information (continued)

Condensed Consolidating Statement of Cash Flows (in thousands):

 

 

 

Three Months Ended March 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Guarantor

 

 

Consolidating

 

 

TRI Pointe

 

 

 

Issuer (1)

 

 

Subsidiaries

 

 

Adjustments

 

 

Group, Inc.

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(52,695

)

 

$

(55,619

)

 

$

 

 

$

(108,314

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(303

)

 

 

(75

)

 

 

 

 

 

(378

)

Investments in unconsolidated entities

 

 

 

 

 

(978

)

 

 

 

 

 

(978

)

Intercompany

 

 

(69,212

)

 

 

 

 

 

69,212

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(69,515

)

 

 

(1,053

)

 

 

69,212

 

 

 

(1,356

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings from notes payable

 

 

50,000

 

 

 

 

 

 

 

 

 

50,000

 

Repayment of notes payable

 

 

(2,535

)

 

 

 

 

 

 

 

 

(2,535

)

Net proceeds of debt held by variable interest entities

 

 

 

 

 

(742

)

 

 

 

 

 

(742

)

Contributions from noncontrolling interests

 

 

 

 

 

873

 

 

 

 

 

 

873

 

Distributions to noncontrolling interests

 

 

 

 

 

(726

)

 

 

 

 

 

(726

)

Proceeds from issuance of common stock under

   share-based awards

 

 

263

 

 

 

 

 

 

 

 

 

263

 

Excess tax benefits of share-based awards

 

 

308

 

 

 

 

 

 

 

 

 

308

 

Minimum tax withholding paid on behalf of employees for restricted stock units

 

 

(1,827

)

 

 

 

 

 

 

 

 

(1,827

)

Intercompany

 

 

 

 

 

69,212

 

 

 

(69,212

)

 

 

 

Net cash provided by (used in) financing activities

 

 

46,209

 

 

 

68,617

 

 

 

(69,212

)

 

 

45,614

 

Net (decrease) increase in cash and cash equivalents

 

 

(76,001

)

 

 

11,945

 

 

 

 

 

 

(64,056

)

Cash and cash equivalents - beginning of period

 

 

105,888

 

 

 

64,741

 

 

 

 

 

 

170,629

 

Cash and cash equivalents - end of period

 

$

29,887

 

 

$

76,686

 

 

$

 

 

$

106,573

 

__________

 

(1)

References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:

 

a.

for periods prior to July 7, 2015: TRI Pointe Homes only

 

b.

for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers

 

 

 

- 28 -


Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements relating to future events of our intentions, beliefs, expectations, predictions for the future and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.

These statements:

 

·

use forward-looking terminology;

 

·

are based on various assumptions made by TRI Pointe; and

 

·

may not be accurate because of risks and uncertainties surrounding the assumptions that are made.

Factors listed in this section – as well as other factors not included – may cause actual results to differ significantly from the forward-looking statements included in this Quarterly Report on Form 10-Q. There is no guarantee that any of the events anticipated by the forward-looking statements in this Quarterly Report on Form 10-Q will occur, or if any of the events occurs, there is no guarantee of what effect it will have on our operations, financial condition or share price.

We will not update the forward-looking statements contained in this Quarterly Report on Form 10-Q, unless otherwise required by law.

Forward-Looking Statements

These forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “will,” “would,” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements include, but are not limited to, statements regarding our anticipated future financial and operating performance and results, including our estimates for growth.

Forward-looking statements are based on a number of factors, including the expected effect of:

 

·

the economy;

 

·

laws and regulations;

 

·

adverse litigation outcome and the adequacy of reserves;

 

·

changes in accounting principles;

 

·

projected benefit payments; and

 

·

projected tax rates and credits.

Risks, Uncertainties and Assumptions

The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:

 

·

the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and the strength of the U.S. dollar;

 

·

market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;

 

·

levels of competition;

 

·

the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;

 

·

global economic conditions;

 

·

raw material prices;

 

·

oil and other energy prices;

 

·

the effect of weather, including the continuing drought in California;

 

- 29 -


 

·

the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters;

 

·

transportation costs;

 

·

federal and state tax policies;

 

·

the effect of land use, environment and other governmental regulations;

 

·

legal proceedings;

 

·

risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects;

 

·

change in accounting principles;

 

·

risks related to unauthorized access to our computer systems, theft of our customers’ confidential information or other forms of cyber-attack; and

 

·

other factors described in “Risk Factors.”

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related condensed notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our securities. We urge investors to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent reports on Form 8-K, which discuss our business in greater detail. The section entitled “Risk Factors” set forth in Item 1A of our Annual Report on Form 10-K, and similar disclosures in our other SEC filings, discuss some of the important risk factors that may affect our business, results of operations and financial condition. Investors should carefully consider those risks, in addition to the information in this report and in our other filings with the SEC, before deciding to invest in, or maintain an investment in, our common stock.

Reverse Acquisition and Formation of TRI Pointe Group

On the Closing Date, TRI Pointe consummated the Merger with WRECO, with WRECO becoming a wholly owned subsidiary of TRI Pointe. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations. For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer.

On July 7, 2015, TRI Pointe Homes reorganized its corporate structure (the “Reorganization”) whereby TRI Pointe Homes became a direct, wholly owned subsidiary of TRI Pointe Group.  As a result of the Reorganization, each share of common stock, par value $0.01 per share, of TRI Pointe Homes (“Homes Common Stock”) was cancelled and converted automatically into the right to receive one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of TRI Pointe Group (“Group Common Stock”), each share having the same designations, rights, powers and preferences, and the qualifications, limitations and restrictions thereof as the shares of Homes Common Stock being so converted.  TRI Pointe Group, as the successor issuer to TRI Pointe Homes (pursuant to Rule 12g-3(a) under the Exchange Act), began making filings under the Securities Act and the Exchange Act on July 7, 2015.

In connection with the Reorganization, TRI Pointe Group (i) became a co-issuer of TRI Pointe Homes’ 4.375% Senior Notes due 2019 and TRI Pointe Homes' 5.875% Senior Notes due 2024; and (ii) replaced TRI Pointe Homes as the borrower under TRI Pointe Homes’ existing unsecured revolving credit facility.

The business, executive officers and directors of TRI Pointe Group, and the rights and limitations of the holders of Group Common Stock immediately following the Reorganization were identical to the business, executive officers and directors of TRI Pointe Homes, and the rights and limitations of holders of Homes Common Stock immediately prior to the Reorganization.

 

- 30 -


Consolidated Financial Data (in thousands, except per share amounts):

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

2015

 

Homebuilding:

 

 

 

 

 

 

 

 

Home sales revenue

 

$

423,055

 

 

$

374,265

 

Land and lot sales revenue

 

 

355

 

 

 

2,000

 

Other operations

 

 

580

 

 

 

993

 

Total revenues

 

 

423,990

 

 

 

377,258

 

Cost of home sales

 

 

324,499

 

 

 

299,907

 

Cost of land and lot sales

 

 

779

 

 

 

2,308

 

Other operations

 

 

566

 

 

 

562

 

Sales and marketing

 

 

26,321

 

 

 

23,286

 

General and administrative

 

 

28,396

 

 

 

28,153

 

Restructuring charges

 

 

135

 

 

 

222

 

Homebuilding income from operations

 

 

43,294

 

 

 

22,820

 

Equity in (loss) income of unconsolidated entities

 

 

(14

)

 

 

107

 

Other income, net

 

 

115

 

 

 

256

 

Homebuilding income before taxes

 

 

43,395

 

 

 

23,183

 

Financial Services:

 

 

 

 

 

 

 

 

Revenues

 

 

148

 

 

 

 

Expenses

 

 

58

 

 

 

26

 

Equity in income (loss) of unconsolidated entities

 

 

715

 

 

 

(33

)

Financial services income (loss) before taxes

 

 

805

 

 

 

(59

)

Income before taxes

 

 

44,200

 

 

 

23,124

 

Provision for income taxes

 

 

(15,490

)

 

 

(7,827

)

Net income

 

 

28,710

 

 

 

15,297

 

Net income attributable to noncontrolling interests

 

 

(160

)

 

 

 

Net income available to common stockholders

 

$

28,550

 

 

$

15,297

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

0.09

 

Diluted

 

$

0.18

 

 

$

0.09

 

Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

 

 

 

Three Months Ended March 31, 2016

 

 

Three Months Ended March 31, 2015

 

 

Percentage Change

 

 

 

Net New

 

 

Average

 

 

Monthly

 

 

Net New

 

 

Average

 

 

Monthly

 

 

Net New

 

 

Average

 

 

Monthly

 

 

 

Home

 

 

Selling

 

 

Absorption

 

 

Home

 

 

Selling

 

 

Absorption

 

 

Home

 

 

Selling

 

 

Absorption

 

 

 

Orders

 

 

Communities

 

 

Rates

 

 

Orders

 

 

Communities

 

 

Rates

 

 

Orders

 

 

Communities

 

 

Rates

 

Maracay Homes

 

 

201

 

 

 

18.5

 

 

 

3.6

 

 

 

161

 

 

 

17.0

 

 

 

3.2

 

 

 

25

%

 

 

9

%

 

 

15

%

Pardee Homes

 

 

313

 

 

 

23.5

 

 

 

4.4

 

 

 

308

 

 

 

20.3

 

 

 

5.1

 

 

 

2

%

 

 

16

%

 

 

(12

)%

Quadrant Homes

 

 

133

 

 

 

9.5

 

 

 

4.7

 

 

 

150

 

 

 

10.2

 

 

 

4.9

 

 

 

(11

)%

 

 

(7

)%

 

 

(5

)%

Trendmaker Homes

 

 

122

 

 

 

24.3

 

 

 

1.7

 

 

 

132

 

 

 

26.5

 

 

 

1.7

 

 

 

(8

)%

 

 

(8

)%

 

 

1

%

TRI Pointe Homes

 

 

265

 

 

 

25.5

 

 

 

3.5

 

 

 

336

 

 

 

26.3

 

 

 

4.3

 

 

 

(21

)%

 

 

(3

)%

 

 

(19

)%

Winchester Homes

 

 

115

 

 

 

13.2

 

 

 

2.9

 

 

 

107

 

 

 

12.7

 

 

 

2.8

 

 

 

8

%

 

 

4

%

 

 

3

%

Total

 

 

1,149

 

 

 

114.5

 

 

 

3.3

 

 

 

1,194

 

 

 

113.0

 

 

 

3.5

 

 

 

(4

)%

 

 

1

%

 

 

(5

)%

 

Net new home orders for the three months ended March 31, 2016 decreased by 45 units or 4% to 1,149, compared to 1,194 during the prior year period.  Net new home orders declined at Trendmaker Homes due to a decrease in average selling communities due to timing of community openings.  Quadrant Homes and TRI Pointe Homes experienced declines in net new home orders due to a decrease in average selling communities and monthly absorption rates.  TRI Pointe Homes’ 19% decrease in absorption rate was largely due to a change in mix to slower absorbing inland communities in 2016 from high absorption coastal communities in 2015.  Pardee Homes and Winchester Homes showed modest growth in net new home orders largely due to an increase in average selling communities. Maracay Homes’ net new home orders increased 25% due to new, higher absorption communities opening during the quarter.      

 

- 31 -


Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)

 

 

 

As of March 31, 2016

 

 

As of March 31, 2015

 

 

Percentage Change

 

 

 

 

 

 

 

Backlog

 

 

Average

 

 

 

 

 

 

Backlog

 

 

Average

 

 

 

 

 

 

Backlog

 

 

Average

 

 

 

Backlog

 

 

Dollar

 

 

Sales

 

 

Backlog

 

 

Dollar

 

 

Sales

 

 

Backlog

 

 

Dollar

 

 

Sales

 

 

 

Units

 

 

Value

 

 

Price

 

 

Units

 

 

Value

 

 

Price

 

 

Units

 

 

Value

 

 

Price

 

Maracay Homes

 

 

289

 

 

$

121,130

 

 

$

419

 

 

 

181

 

 

$

67,817

 

 

$

375

 

 

 

60

%

 

 

79

%

 

 

12

%

Pardee Homes

 

 

379

 

 

 

242,278

 

 

 

639

 

 

 

358

 

 

 

228,206

 

 

 

637

 

 

 

6

%

 

 

6

%

 

 

0

%

Quadrant Homes

 

 

184

 

 

 

99,170

 

 

 

539

 

 

 

170

 

 

 

68,952

 

 

 

406

 

 

 

8

%

 

 

44

%

 

 

33

%

Trendmaker Homes

 

 

170

 

 

 

90,870

 

 

 

535

 

 

 

242

 

 

 

128,206

 

 

 

530

 

 

 

(30

)%

 

 

(29

)%

 

 

1

%

TRI Pointe Homes

 

 

354

 

 

 

238,669

 

 

 

674

 

 

 

440

 

 

 

323,215

 

 

 

735

 

 

 

(20

)%

 

 

(26

)%

 

 

(8

)%

Winchester Homes

 

 

158

 

 

 

99,415

 

 

 

629

 

 

 

167

 

 

 

126,956

 

 

 

760

 

 

 

(5

)%

 

 

(22

)%

 

 

(17

)%

Total

 

 

1,534

 

 

$

891,532

 

 

$

581

 

 

 

1,558

 

 

$

943,352

 

 

$

605

 

 

 

(2

)%

 

 

(5

)%

 

 

(4

)%

 

Backlog units reflects the number of homes, net of actual cancellations experienced during the period, for which we have entered into sales contracts with customers but for which we have not yet delivered the homes. Homes in backlog are generally delivered within three to nine months, although we may experience cancellations of sales contracts prior to delivery. Our cancellation rate of buyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 13% for the three months ended March 31, 2016 compared to 11% for the same prior year period.  The dollar value of backlog was $891.5 million as of March 31, 2016, a decrease of $51.8 million, or 5%, compared to $943.4 million as of March 31, 2015.  This decrease in dollar value of backlog is due to a 4% decrease in the average sales price of homes in backlog to $581,000 as of March 31, 2016 from $605,000 as of March 31, 2015, in addition to a 2% decline in backlog units to 1,534 as of March 31, 2016 from 1,558 as of March 31, 2015.

New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

 

 

 

Three Months Ended March 31, 2016

 

 

Three Months Ended March 31, 2015

 

 

Percentage Change

 

 

 

New

 

 

Home

 

 

Average

 

 

New

 

 

Home

 

 

Average

 

 

New

 

 

Home

 

 

Average

 

 

 

Homes

 

 

Sales

 

 

Sales

 

 

Homes

 

 

Sales

 

 

Sales

 

 

Homes

 

 

Sales

 

 

Sales

 

 

 

Delivered

 

 

Revenue

 

 

Price

 

 

Delivered

 

 

Revenue

 

 

Price

 

 

Delivered

 

 

Revenue

 

 

Price

 

Maracay Homes

 

 

115

 

 

$

45,437

 

 

$

395

 

 

 

85

 

 

$

32,477

 

 

$

382

 

 

 

35

%

 

 

40

%

 

 

3

%

Pardee Homes

 

 

208

 

 

 

118,933

 

 

 

572

 

 

 

168

 

 

 

85,658

 

 

 

510

 

 

 

24

%

 

 

39

%

 

 

12

%

Quadrant Homes

 

 

92

 

 

 

45,478

 

 

 

494

 

 

 

93

 

 

 

43,336

 

 

 

466

 

 

 

(1

)%

 

 

5

%

 

 

6

%

Trendmaker Homes

 

 

88

 

 

 

43,786

 

 

 

498

 

 

 

108

 

 

 

56,208

 

 

 

520

 

 

 

(19

)%

 

 

(22

)%

 

 

(4

)%

TRI Pointe Homes

 

 

201

 

 

 

131,957

 

 

 

657

 

 

 

139

 

 

 

106,858

 

 

 

769

 

 

 

45

%

 

 

23

%

 

 

(15

)%

Winchester Homes

 

 

67

 

 

 

37,464

 

 

 

559

 

 

 

75

 

 

 

49,728

 

 

 

663

 

 

 

(11

)%

 

 

(25

)%

 

 

(16

)%

Total

 

 

771

 

 

$

423,055

 

 

$

549

 

 

 

668

 

 

$

374,265

 

 

$

560

 

 

 

15

%

 

 

13

%

 

 

(2

)%

 

Home sales revenue increased $48.8 million, or 13%, to $423.1 million for the three months ended March 31, 2016 from $374.3 million for the prior year period. The increase was comprised of: (i) $57.7 million related to a 15% increase in homes delivered to 771 for the three months ended March 31, 2016 from 668 in the prior year period; and (ii) offset by a decline of $8.9 million due to a decrease in average sales price of $11,000 per home to $549,000 for the three months ended March 31, 2016 from $560,000 in the prior year period.  The decrease in average sales prices at TRI Pointe Homes was due to a lower mix of deliveries from coastal California markets and higher mix of attached product.  The increase in average sales prices at Pardee Homes was due to a higher mix of coastal deliveries in California.  

 

- 32 -


Homebuilding Gross Margins (dollars in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

 

%

 

 

2015

 

 

%

 

Home sales revenue

 

$

423,055

 

 

 

100.0

%

 

$

374,265

 

 

 

100.0

%

Cost of home sales

 

 

324,499

 

 

 

76.7

%

 

 

299,907

 

 

 

80.1

%

Homebuilding gross margin

 

 

98,556

 

 

 

23.3

%

 

 

74,358

 

 

 

19.9

%

Add:  interest in cost of home sales

 

 

8,830

 

 

 

2.1

%

 

 

6,711

 

 

 

1.8

%

Add:  impairments and lot option abandonments

 

 

182

 

 

 

0.0

%

 

 

345

 

 

 

0.1

%

Adjusted homebuilding gross margin(1)

 

$

107,568

 

 

 

25.4

%

 

$

81,414

 

 

 

21.8

%

Homebuilding gross margin percentage

 

 

23.3

%

 

 

 

 

 

 

19.9

%

 

 

 

 

Adjusted homebuilding gross margin percentage(1)

 

 

25.4

%

 

 

 

 

 

 

21.8

%

 

 

 

 

__________

(1)

Non-GAAP financial measure (as discussed below).

Our homebuilding gross margin percentage increased to 23.3% for the three months ended March 31, 2016 as compared to 19.9% for the prior year period and increased sequentially from 22.2% during the fourth quarter of 2015.  The increase in gross margin was primarily due to the 24% increase in deliveries from Pardee Homes, which carries a lower land basis in some of its longer-term land holdings.  Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 25.4% for the three months ended March 31, 2016, compared to 21.8% for the prior year period. The increase in the adjusted homebuilding gross margin was consistent with the change in homebuilding gross margin.

Adjusted homebuilding gross margin is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that leverage and noncash charges have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion. Because adjusted homebuilding gross margin is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.  See the table above reconciling this non-GAAP financial measure to homebuilding gross margin, the nearest GAAP equivalent.

Sales and Marketing, General and Administrative Expense (dollars in thousands)

 

 

 

Three Months Ended

 

 

As a Percentage of

 

 

 

March 31,

 

 

Home Sales Revenue

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Sales and marketing

 

$

26,321

 

 

$

23,286

 

 

 

6.2

%

 

 

6.2

%

General and administrative (G&A)

 

 

28,396

 

 

 

28,153

 

 

 

6.7

%

 

 

7.5

%

Total sales and marketing and G&A

 

$

54,717

 

 

$

51,439

 

 

 

12.9

%

 

 

13.7

%

 

Sales and marketing expense as a percentage of home sales revenue remained steady at 6.2% for each of the three month periods ended March 31, 2016 and 2015, respectively.  Total sales and marketing expense increased by $3.0 million to $26.3 million for the three months ended March 31, 2016 compared to $23.3 million in the same prior year period, and is primarily attributable to direct selling costs related to the 15% increase in new home deliveries.

General and administrative expenses as a percentage of home sales revenue decreased to 6.7% of home sales revenue for the three months ended March 31, 2016 compared to 7.5% for the prior year period.  The decrease is due primarily to higher operating leverage resulting from increased home sales revenue. General and administrative expenses remained relatively flat at $28.4 million for the three months ended March 31, 2016 compared to $28.2 million in the same prior year period.

Total sales and marketing and G&A (“SG&A”) as a percentage of home sales revenue decreased to 12.9% for the three month period ended March 31, 2016 compared to 13.7% in the prior year period, due primarily to higher home sales revenue in the current year period.  Total SG&A expense increased $3.3 million, or 6.4%, to $54.7 million for the three months ended March 31, 2016 from $51.4 million in the prior year period.  

Restructuring Charges

Restructuring charges decreased to $135,000 for the three months ended March 31, 2016 compared to $222,000 in the same period in the prior year.  The decrease was mainly due to higher severance costs in 2015.

 

- 33 -


Interest

Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $15.1 million and $15.2 million for the three months ended March 31, 2016 and 2015, respectively.  All interest incurred in both periods was capitalized.  The slight decrease in interest incurred during the three months ended March 31, 2016 as compared to the prior year period was primarily attributable to a decrease in the weighted average interest rate for the unsecured revolving credit facility debt as of March 31, 2016 compared to March 31, 2015, along with the decrease in seller financed loans outstanding as of March 31, 2016 compared to March 31, 2015.

Income Tax

For the three months ended March 31, 2016, we recorded a tax provision of $15.5 million based on an effective tax rate of 35.0%.  For the three months ended March 31, 2015, we recorded a tax provision of $7.8 million based on an effective tax rate of 33.8%. The increase in provision for income taxes is due to an increase in income before taxes of $21.1 million to $44.2 million for the three months ended March 31, 2016 compared to $23.1 million for the prior year period.

 

Lots Owned or Controlled by Segment

Excluded from owned and controlled lots are those related to Note 7, Investments in Unconsolidated Entities.  The table below summarizes our lots owned or controlled by segment as of the dates presented:

 

 

 

 

 

 

 

 

 

 

 

Increase

 

 

 

March 31,

 

 

(Decrease)

 

 

 

 

2016

 

 

 

2015

 

 

Amount

 

 

%

 

Lots Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maracay Homes

 

 

1,476

 

 

 

1,249

 

 

 

227

 

 

 

18

%

Pardee Homes

 

 

16,296

 

 

 

17,263

 

 

 

(967

)

 

 

(6

)%

Quadrant Homes

 

 

1,082

 

 

 

938

 

 

 

144

 

 

 

15

%

Trendmaker Homes

 

 

1,388

 

 

 

896

 

 

 

492

 

 

 

55

%

TRI Pointe Homes

 

 

2,865

 

 

 

3,067

 

 

 

(202

)

 

 

(7

)%

Winchester Homes

 

 

1,920

 

 

 

2,337

 

 

 

(417

)

 

 

(18

)%

Total

 

 

25,027

 

 

 

25,750

 

 

 

(723

)

 

 

(3

)%

Lots Controlled(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maracay Homes

 

 

804

 

 

 

937

 

 

 

(133

)

 

 

(14

)%

Pardee Homes

 

 

161

 

 

 

34

 

 

 

127

 

 

 

374

%

Quadrant Homes

 

 

428

 

 

 

559

 

 

 

(131

)

 

 

(23

)%

Trendmaker Homes

 

 

389

 

 

 

1,084

 

 

 

(695

)

 

 

(64

)%

TRI Pointe Homes

 

 

760

 

 

 

616

 

 

 

144

 

 

 

23

%

Winchester Homes

 

 

360

 

 

 

338

 

 

 

22

 

 

 

7

%

Total

 

 

2,902

 

 

 

3,568

 

 

 

(666

)

 

 

(19

)%

Total Lots Owned or Controlled(1)

 

 

27,929

 

 

 

29,318

 

 

 

(1,389

)

 

 

(5

)%

__________

(1)

As of March 31, 2016 and 2015 lots controlled included lots that were under land option contracts or purchase contracts.

 

 

Liquidity and Capital Resources

Overview

Our principal uses of capital for the three months ended March 31, 2016 were operating expenses, land purchases, land development and home construction. We used funds generated by our operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth. As of March 31, 2016, we had $144.0 million of cash and cash equivalents. We believe we have sufficient cash and sources of financing to fund operations for at least the next twelve months.

 

- 34 -


Our board of directors will consider a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets and the ability of particular assets, and our company as a whole, to generate cash flow to cover the expected debt service. Our charter does not contain a limitation on the amount of debt we may incur and our board of directors may change our target debt levels at any time without the approval of our stockholders.

Assumption of Senior Notes

On the Closing Date, TRI Pointe assumed WRECO’s obligations as issuer of $450 million aggregate principal amount of its 4.375% Senior Notes due 2019 (“2019 Notes”) and $450 million aggregate principal amount of its 5.875% Senior Notes due 2024 (“2024 Notes” and together with the 2019 Notes, the “Senior Notes”). The 2019 Notes were issued at 98.89% of their aggregate principal amount and the 2024 Notes were issued at 98.15% of their aggregate principal amount. The net proceeds of $861.3 million, after debt issuance costs and discounts, from the offering were deposited into two separate escrow accounts following the closing of the offering on June 13, 2014. Upon release of the escrowed funds on the Closing Date, and prior to the consummation of the Merger, WRECO paid $743.7 million in cash to the former direct parent entity of WRECO, which cash was retained by Weyerhaeuser and its subsidiaries (other than WRECO and its subsidiaries). The payment consisted of the $739 million Payment Amount (as defined in the Transaction Agreement) as well as $4.7 million in payment of all unpaid interest on the debt payable to Weyerhaeuser that accrued from November 3, 2013 to the Closing Date. The remaining $117.6 million of proceeds was retained by TRI Pointe and used for general corporate purposes.

The 2019 Notes and 2024 Notes mature on June 15, 2019 and June 15, 2024, respectively. Interest is payable semiannually in arrears on June 15 and December 15.  As of March 31, 2016, no principal has been paid on the Senior Notes, and there was $19.5 million of capitalized debt financing costs related to the Senior Notes, included in senior notes on our consolidated balance sheet. These costs will amortize over the respective lives of the Senior Notes.

Unsecured Revolving Credit Facility

In May 2015, the Company amended its unsecured revolving credit facility (the “Credit Facility”) from $425 million to $550 million.  The Credit Facility matures on May 18, 2019, and contains a sublimit of $75 million for letters of credit. The Company may borrow under the Credit Facility in the ordinary course of business to fund its operations, including its land development and homebuilding activities. Borrowings under the Credit Facility will be governed by, among other things, a borrowing base. The Credit Facility contains customary affirmative and negative covenants, including financial covenants relating to consolidated tangible net worth, leverage, and liquidity or interest coverage. Interest rates on borrowings will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 1.45% to 2.20% depending on the Company’s leverage ratio.

As of March 31, 2016, the outstanding balance under the Credit Facility was $374.4 million with an interest rate 2.13% per annum and $170.3 million of availability after considering the borrowing base provisions and outstanding letters of credit.  At March 31, 2016 we had outstanding letters of credit of $5.3 million.  These letters of credit were issued to secure various financial obligations.  We believe it is not probable that any outstanding letters of credit will be drawn upon.

Stock Repurchase Program

On January 27, 2016, we announced that our board of directors approved a stock repurchase program, authorizing the repurchase of our common stock with an aggregate value of up to $100 million through January 25, 2017.  Purchases of common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.  As of March 31, 2016, no shares have been repurchased under this program.  We are not obligated under the program to repurchase any specific number of shares, and we may modify, suspend or discontinue the program at any time.  Our management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements.  

 

 

- 35 -


Covenant Compliance

Under our Credit Facility, we are required to comply with certain financial covenants, including, but not limited to, those set forth in the table below (dollars in thousands):

 

 

 

 

 

 

 

Covenant

 

 

 

Actual at

 

 

Requirement at

 

 

 

March 31,

 

 

March 31,

 

Financial Covenants

 

2016

 

 

2016

 

Consolidated Tangible Net Worth

 

$

1,532,862

 

 

$

985,242

 

(Not less than $875.9 million plus 50% of net income and

   50% of the net proceeds from equity offerings after

   March 31, 2015)

 

 

 

 

 

 

 

 

Leverage Test

 

 

42.4

%

 

<55%

 

(Not to exceed 55%)

 

 

 

 

 

 

 

 

Interest Coverage Test

 

 

6.8

 

 

>1.5

 

(Not less than 1.5:1.0)

 

 

 

 

 

 

 

 

 

As of March 31, 2016, we were in compliance with all of these financial covenants.

Leverage Ratios

We believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management. The ratio of debt-to-capital and the ratio of net debt-to-capital are calculated as follows (dollars in thousands):  

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

Unsecured revolving credit facility

 

$

374,392

 

 

$

299,392

 

Seller financed loans

 

 

 

 

 

2,434

 

Senior Notes

 

 

869,939

 

 

 

868,679

 

Total debt

 

 

1,244,331

 

 

 

1,170,505

 

Stockholders’ equity

 

 

1,694,757

 

 

 

1,664,683

 

Total capital

 

$

2,939,088

 

 

$

2,835,188

 

Ratio of debt-to-capital(1)

 

 

42.3

%

 

 

41.3

%

 

 

 

 

 

 

 

 

 

Total debt

 

$

1,244,331

 

 

$

1,170,505

 

Less: Cash and cash equivalents

 

 

(144,019

)

 

 

(214,485

)

Net debt

 

 

1,100,312

 

 

 

956,020

 

Stockholders’ equity

 

 

1,694,757

 

 

 

1,664,683

 

Total capital

 

$

2,795,069

 

 

$

2,620,703

 

Ratio of net debt-to-capital(2)

 

 

39.4

%

 

 

36.5

%

__________

(1)

The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of total debt plus equity.

(2)

The ratio of net debt-to-capital is a non-GAAP measure and is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. See the table above reconciling this non-GAAP financial measure to the ratio of debt-to-capital.  Because the ratio of net debt-to-capital is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

 

- 36 -


Cash Flows—Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015

For the three months ended March 31, 2016 as compared to the three months ended March 31, 2015, the comparison of cash flows is as follows:

 

·

Net cash used in operating activities increased by $31.4 million to $139.7 million for the three months ended March 31, 2016 from $108.4 million for the three months ended March 31, 2015. The change was comprised of offsetting activity, including (i) an increase in real estate inventories of $180.5 million in 2016 compared to an increase of $127.3 million in 2015 to support our community count growth and (ii) other offsetting activity included changes in other assets, accounts payable, accrued expenses, and net income.

 

·

Net cash used in investing activities was $424,000 for the three months ended March 31, 2016 compared to $1.4 million for the same prior year period in 2015.  The decrease in cash used in investing activities was due to lower new investments in unconsolidated entities.

 

·

Net cash provided by financing activities increased to $69.6 million for the three months ending March 31, 2016 from $45.6 million for the same period in the prior year. The change was primarily a result of borrowings from debt of $75.0 million in the current period compared to $50.0 million in the prior year period.

As of March 31, 2016, our cash and cash equivalents balance was $144.0 million.

Off-Balance Sheet Arrangements and Contractual Obligations

In the ordinary course of business, we enter into land and lot option 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 by the sellers, including obtaining applicable property and development entitlements.  We also utilize option contracts with land sellers 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 a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices.  We generally have the right, at our discretion, to terminate our obligations under both purchase contracts and option contracts by forfeiting our cash deposit with no further financial responsibility to the land seller.  As of March 31, 2016, we had $30.7 million of cash deposits, the majority of which are non-refundable, pertaining to land option contracts and purchase contracts with an aggregate remaining purchase price of $380.7 million (net of deposits).

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 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.

As of March 31, 2016 we had $170.3 million of availability under our Credit Facility after considering the borrowing base provisions and outstanding letters of credit.

Inflation

Our operations can be adversely impacted by inflation, primarily from higher land, financing, labor, material 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.  In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers.

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 first and second quarters of our fiscal year, 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 three to nine months to construct a new home, the number of homes delivered and associated home sales revenue typically increases in the third and fourth quarters of our fiscal year as new home orders sold earlier in the year 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 of our fiscal year, and the majority of cash receipts from home deliveries occur 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.

 

 

- 37 -


 

Description of Projects and Communities under Development

The following table presents project information relating to each of our markets as of March 31, 2016 and includes information on current projects under development where we are building and selling homes.

Maracay Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Phoenix, Arizona

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Town of Buckeye:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verrado Tilden

 

2012

 

 

102

 

 

 

96

 

 

 

6

 

 

 

4

 

 

 

2

 

 

$239 - $304

Verrado Palisades

 

2015

 

 

63

 

 

 

17

 

 

 

46

 

 

 

3

 

 

 

1

 

 

$305 - $378

Verrado Victory

 

2015

 

 

98

 

 

 

20

 

 

 

78

 

 

 

5

 

 

 

3

 

 

$368 - $381

City of Chandler:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Artesian Ranch

 

2013

 

 

90

 

 

 

69

 

 

 

21

 

 

 

17

 

 

 

12

 

 

$344 - $400

Vaquero Ranch

 

2013

 

 

74

 

 

 

70

 

 

 

4

 

 

 

4

 

 

 

3

 

 

$298 - $373

Maracay at Layton Lakes

 

2015

 

 

47

 

 

 

22

 

 

 

25

 

 

 

21

 

 

 

11

 

 

$484 - $524

Sendera Place

 

2015

 

 

49

 

 

 

20

 

 

 

29

 

 

 

17

 

 

 

8

 

 

$264 - $311

Chandler Heights

 

2017

 

 

84

 

 

 

 

 

 

84

 

 

 

 

 

 

 

 

$467 - $500

Town of Gilbert:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arch Crossing at Bridges of Gilbert

 

2014

 

 

67

 

 

 

63

 

 

 

4

 

 

 

3

 

 

 

3

 

 

$283 - $341

Trestle Place at Bridges of Gilbert

 

2014

 

 

73

 

 

 

69

 

 

 

4

 

 

 

3

 

 

 

6

 

 

$344 - $424

Artisan at Morrison Ranch

 

2016

 

 

105

 

 

 

 

 

 

105

 

 

 

18

 

 

 

 

 

$302 - $354

Marquis at Morrison Ranch

 

2016

 

 

66

 

 

 

 

 

 

66

 

 

 

23

 

 

 

 

 

$393 - $477

City of Goodyear:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calderra at Palm Valley

 

2013

 

 

81

 

 

 

81

 

 

 

 

 

 

 

 

 

1

 

 

Closed

City of Mesa:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kinetic Point at Eastmark

 

2013

 

 

80

 

 

 

71

 

 

 

9

 

 

 

4

 

 

 

11

 

 

$273 - $353

Lumiere Garden at Eastmark

 

2013

 

 

85

 

 

 

63

 

 

 

22

 

 

 

9

 

 

 

3

 

 

$318 - $398

Aileron Square at Eastmark

 

2016

 

 

58

 

 

 

2

 

 

 

56

 

 

 

11

 

 

 

2

 

 

$318 - $398

Curie Court at Eastmark

 

2016

 

 

106

 

 

 

3

 

 

 

103

 

 

 

15

 

 

 

3

 

 

$273 - $353

Palladium Point

 

2016

 

 

53

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

$308 - $377

Town of Peoria:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Reserve at Plaza del Rio

 

2013

 

 

162

 

 

 

94

 

 

 

68

 

 

 

22

 

 

 

7

 

 

$205 - $258

Maracay at Northlands

 

2014

 

 

67

 

 

 

42

 

 

 

25

 

 

 

16

 

 

 

7

 

 

$319 - $400

Meadows - 5500's

 

2016

 

 

80

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

$355 - $437

Meadows - 6500's

 

2016

 

 

56

 

 

 

 

 

 

56

 

 

 

 

 

 

 

 

$417 - $535

Meadows - Oversized

 

2016

 

 

37

 

 

 

 

 

 

37

 

 

 

 

 

 

 

 

$417 - $535

Town of Queen Creek:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Preserve at Hastings Farms

 

2014

 

 

89

 

 

 

55

 

 

 

34

 

 

 

21

 

 

 

12

 

 

$298 - $383

Villagio

 

2013

 

 

135

 

 

 

101

 

 

 

34

 

 

 

13

 

 

 

12

 

 

$283 - $345

Phoenix, Arizona Total

 

 

 

 

2,007

 

 

 

958

 

 

 

1,049

 

 

 

229

 

 

 

107

 

 

 

Tucson, Arizona

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marana:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tortolita Vistas

 

2014

 

 

55

 

 

 

26

 

 

 

29

 

 

 

8

 

 

 

2

 

 

$454 - $511

Oro Valley:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rancho del Cobre

 

2014

 

 

68

 

 

 

48

 

 

 

20

 

 

 

4

 

 

 

5

 

 

$410 - $478

Desert Crest - Center Pointe Vistoso

 

2016

 

 

103

 

 

 

 

 

 

103

 

 

 

6

 

 

 

 

 

$249 - $294

The Cove - Center Pointe Vistoso

 

2016

 

 

83

 

 

 

 

 

 

83

 

 

 

5

 

 

 

 

 

$322 - $382

Summit (South) - Center Pointe Vistoso

 

2016

 

 

88

 

 

 

 

 

 

88

 

 

 

16

 

 

 

 

 

$369 - $404

The Pinnacle - Center Pointe Vistoso

 

2016

 

 

69

 

 

 

 

 

 

69

 

 

 

17

 

 

 

 

 

$422 - $455

Tucson:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deseo at Sabino Canyon

 

2014

 

 

39

 

 

 

38

 

 

 

1

 

 

 

1

 

 

 

1

 

 

$419 - $505

Ranches at Santa Catalina

 

2016

 

 

34

 

 

 

 

 

 

34

 

 

 

3

 

 

 

 

 

$404 - $474

Tucson, Arizona Total

 

 

 

 

539

 

 

 

112

 

 

 

427

 

 

 

60

 

 

 

8

 

 

 

Maracay Homes Total

 

 

 

 

2,546

 

 

 

1,070

 

 

 

1,476

 

 

 

289

 

 

 

115

 

 

 

 

 

- 38 -


Pardee Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

California

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Diego County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alta Del Mar Homes

 

2013

 

 

117

 

 

 

85

 

 

 

32

 

 

 

23

 

 

 

5

 

 

$1,800 - $2,300

Watermark

 

2013

 

 

160

 

 

 

141

 

 

 

19

 

 

 

19

 

 

 

10

 

 

$1,000 - $1,310

Canterra

 

2015

 

 

89

 

 

 

33

 

 

 

56

 

 

 

23

 

 

 

8

 

 

$760 - $900

Casabella

 

2015

 

 

122

 

 

 

42

 

 

 

80

 

 

 

27

 

 

 

20

 

 

$900 - $1,000

Verana

 

2015

 

 

78

 

 

 

56

 

 

 

22

 

 

 

14

 

 

 

18

 

 

$990 - $1,100

Pacific Highlands Ranch Future

 

TBD

 

 

963

 

 

 

 

 

 

963

 

 

 

 

 

 

 

 

TBD

Olive Hill Estate

 

2016

 

 

37

 

 

 

 

 

 

37

 

 

 

6

 

 

 

 

 

$650 - $770

Castlerock

 

TBD

 

 

415

 

 

 

 

 

 

415

 

 

 

 

 

 

 

 

$470 - $710

Meadowood

 

TBD

 

 

844

 

 

 

 

 

 

844

 

 

 

 

 

 

 

 

$290 - $590

Parkview Condos

 

2016

 

 

73

 

 

 

 

 

 

73

 

 

 

 

 

 

 

 

$430 - $480

Ocean View HillsFuture

 

2017

 

 

913

 

 

 

 

 

 

913

 

 

 

 

 

 

 

 

TBD

South Otay Mesa

 

TBD

 

 

893

 

 

 

 

 

 

893

 

 

 

 

 

 

 

 

$185 - $530

Los Angeles County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Golden Valley

 

2017

 

 

498

 

 

 

 

 

 

498

 

 

 

 

 

 

 

 

$550 - $830

Skyline Ranch

 

TBD

 

 

1,260

 

 

 

 

 

 

1,260

 

 

 

 

 

 

 

 

$510 - $640

Riverside County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meadow Ridge

 

2013

 

 

132

 

 

 

116

 

 

 

16

 

 

 

11

 

 

 

8

 

 

$370 - $470

Meadow Glen

 

2014

 

 

142

 

 

 

105

 

 

 

37

 

 

 

10

 

 

 

16

 

 

$350 - $410

Amberleaf

 

2014

 

 

131

 

 

 

100

 

 

 

31

 

 

 

26

 

 

 

14

 

 

$320 - $370

Summerfield

 

2015

 

 

85

 

 

 

65

 

 

 

20

 

 

 

14

 

 

 

13

 

 

$310 - $320

Senterra

 

2016

 

 

82

 

 

 

 

 

 

82

 

 

 

 

 

 

 

 

$360 - $460

Canyon Hills Future

 

TBD

 

 

581

 

 

 

 

 

 

581

 

 

 

 

 

 

 

 

TBD

Tournament Hills Future

 

TBD

 

 

268

 

 

 

 

 

 

268

 

 

 

 

 

 

 

 

TBD

Woodmont

 

2014

 

 

84

 

 

 

77

 

 

 

7

 

 

 

6

 

 

 

9

 

 

$320 - $390

Cielo

 

2015

 

 

92

 

 

 

87

 

 

 

5

 

 

 

5

 

 

 

9

 

 

$250 - $275

Northstar

 

2015

 

 

123

 

 

 

30

 

 

 

93

 

 

 

10

 

 

 

12

 

 

$300 - $325

Skycrest

 

2015

 

 

125

 

 

 

39

 

 

 

86

 

 

 

9

 

 

 

9

 

 

$360 - $380

Flagstone

 

2016

 

 

79

 

 

 

 

 

 

79

 

 

 

11

 

 

 

 

 

$390 - $430

Lunetta

 

2016

 

 

89

 

 

 

 

 

 

89

 

 

 

14

 

 

 

 

 

$270 - $290

Sundance Future

 

TBD

 

 

1,435

 

 

 

 

 

 

1,435

 

 

 

 

 

 

 

 

TBD

Banning

 

TBD

 

 

4,318

 

 

 

 

 

 

4,318

 

 

 

 

 

 

 

 

$170 - $250

Sacramento County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natomas

 

TBD

 

 

120

 

 

 

 

 

 

120

 

 

 

 

 

 

 

 

TBD

San Joaquin County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bear Creek

 

TBD

 

 

1,252

 

 

 

 

 

 

1,252

 

 

 

 

 

 

 

 

TBD

California Total

 

 

 

 

15,600

 

 

 

976

 

 

 

14,624

 

 

 

228

 

 

 

151

 

 

 

Nevada

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Clark County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LivingSmart at Eldorado Ridge

 

2012

 

 

169

 

 

 

166

 

 

 

3

 

 

 

2

 

 

 

6

 

 

$260 - $310

LivingSmart at Eldorado Heights

 

2013

 

 

135

 

 

 

124

 

 

 

11

 

 

 

5

 

 

 

2

 

 

$310 - $395

LivingSmart Sandstone

 

2013

 

 

145

 

 

 

104

 

 

 

41

 

 

 

28

 

 

 

14

 

 

$228 - $255

North Peak

 

2015

 

 

150

 

 

 

11

 

 

 

139

 

 

 

13

 

 

 

5

 

 

$280 - $330

Castle Rock

 

2015

 

 

150

 

 

 

12

 

 

 

138

 

 

 

20

 

 

 

8

 

 

$350 - $410

Camino

 

2016

 

 

86

 

 

 

 

 

 

86

 

 

 

 

 

 

 

 

$240 - $262

Eldorado Future

 

2016

 

 

59

 

 

 

 

 

 

59

 

 

 

 

 

 

 

 

TBD

Solano

 

2014

 

 

132

 

 

 

67

 

 

 

65

 

 

 

17

 

 

 

6

 

 

$296 - $328

Alterra

 

2014

 

 

47

 

 

 

27

 

 

 

20

 

 

 

8

 

 

 

2

 

 

$425 - $506

Bella Verdi

 

2015

 

 

64

 

 

 

21

 

 

 

43

 

 

 

7

 

 

 

2

 

 

$373 - $440

Escala

 

2016

 

 

78

 

 

 

 

 

 

78

 

 

 

3

 

 

 

 

 

$510 - $570

Montero

 

2016

 

 

101

 

 

 

 

 

 

101

 

 

 

 

 

 

 

 

$430 - $475

Responsive Home

 

2016

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

TBD

POD 5-1 Future

 

2017

 

 

215

 

 

 

 

 

 

215

 

 

 

 

 

 

 

 

TBD

Durango Ranch

 

2012

 

 

153

 

 

 

149

 

 

 

4

 

 

 

2

 

 

 

2

 

 

$467 - $560

Durango Trail

 

2014

 

 

77

 

 

 

76

 

 

 

1

 

 

 

1

 

 

 

2

 

 

$380 - $410

Meridian

 

2016

 

 

87

 

 

 

 

 

 

74

 

 

 

15

 

 

 

 

 

$580 - $677

Encanto

 

2015

 

 

129

 

 

 

 

 

 

129

 

 

 

3

 

 

 

 

 

$470 - $525

Horizon Terrace

 

2014

 

 

165

 

 

 

62

 

 

 

103

 

 

 

15

 

 

 

2

 

 

$400 - $455

Summerglen

 

2014

 

 

140

 

 

 

74

 

 

 

66

 

 

 

12

 

 

 

6

 

 

$293 - $299

Skye Canyon Large

 

2016

 

 

70

 

 

 

 

 

 

70

 

 

 

 

 

 

 

 

$430 - $460

Skye Canyon Small

 

2017

 

 

120

 

 

 

 

 

 

120

 

 

 

 

 

 

 

 

$337 - $370

The Canyons at MacDonald Ranch - CD

 

2017

 

 

82

 

 

 

 

 

 

82

 

 

 

 

 

 

 

 

$680 - $780

The Canyons at MacDonald Ranch - R

 

2017

 

 

22

 

 

 

 

 

 

22

 

 

 

 

 

 

 

 

$535 - $565

Nevada Total

 

 

 

 

2,578

 

 

 

893

 

 

 

1,672

 

 

 

151

 

 

 

57

 

 

 

Pardee Homes Total

 

 

 

 

18,178

 

 

 

1,869

 

 

 

16,296

 

 

 

379

 

 

 

208

 

 

 

 

 

- 39 -


Quadrant Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Washington

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Skagit County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Skagit Highlands, Mt Vernon

 

2005

 

 

423

 

 

 

419

 

 

 

4

 

 

 

3

 

 

 

10

 

 

$260 - $291

Skagit Clearwater Court, Mt Vernon

 

2016

 

 

11

 

 

 

 

 

 

11

 

 

 

11

 

 

 

 

 

$299 - $319

Skagit Surplus Pod E, Mt Vernon

 

TBD

 

 

4

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

TBD

Snohomish County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kings Corner 1&2, Mill Creek

 

2014

 

 

116

 

 

 

113

 

 

 

3

 

 

 

2

 

 

 

14

 

 

$484 - $518

King's Corner 3, Mill Creek

 

2016

 

 

29

 

 

 

 

 

 

29

 

 

 

26

 

 

 

 

 

$483 - $517

Evergreen Heights, Monroe

 

2016

 

 

71

 

 

 

 

 

 

71

 

 

 

 

 

 

 

 

$450 - $515

The Grove at Canyon Park, Bothell

 

2017

 

 

60

 

 

 

 

 

 

60

 

 

 

 

 

 

 

 

$558 - $658

Greenstone Heights, Bothell

 

2017

 

 

41

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

$845 - $905

King County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sonata Hill, Auburn

 

2014

 

 

71

 

 

 

46

 

 

 

25

 

 

 

18

 

 

 

9

 

 

$351 - $413

The Gardens at Eastlake, Sammamish

 

2015

 

 

8

 

 

 

7

 

 

 

1

 

 

 

1

 

 

 

4

 

 

$971

Heathers Ridge, Kirkland

 

2015

 

 

41

 

 

 

20

 

 

 

21

 

 

 

15

 

 

 

8

 

 

$663 - $945

Hedgewood, Redmond

 

2015

 

 

11

 

 

 

6

 

 

 

5

 

 

 

2

 

 

 

3

 

 

$857 - $910

Hedgewood East, Redmond

 

2016

 

 

15

 

 

 

 

 

 

15

 

 

 

13

 

 

 

 

 

$731 - $975

Grasslawn Estates, Redmond

 

2016

 

 

4

 

 

 

1

 

 

 

3

 

 

 

 

 

 

1

 

 

$1,450 - $1,600

Vintner's Place, Kirkland

 

2016

 

 

35

 

 

 

 

 

 

35

 

 

 

11

 

 

 

 

 

$727 - $832

Copperwood, Renton

 

2016

 

 

46

 

 

 

 

 

 

46

 

 

 

5

 

 

 

 

 

$620 - $710

Viscaia, Bellevue

 

2017

 

 

18

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

$617 - $672

Trailside, Redmond

 

2017

 

 

9

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

$686 - $735

Parkwood Terrace, Woodinville

 

2017

 

 

15

 

 

 

 

 

 

15

 

 

 

 

 

 

 

 

$680 - $750

Hazelwood Ridge, Newcastle

 

2017

 

 

30

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

$605 - $790

Inglewood Landing, Sammamish

 

2017

 

 

21

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

$880 - $962

Jacobs Landing, Issaquah

 

2017

 

 

20

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

$834 - $929

Kirkwood Terrace, Sammamish

 

2017

 

 

12

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

$1,200 - $1,500

English Landing P2, Redmond

 

2017

 

 

25

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

$910 - $1,029

English Landing P1, Redmond

 

2017

 

 

50

 

 

 

 

 

 

50

 

 

 

 

 

 

 

 

$910 - $1,029

Heathers Ridge South, Redmond

 

2017

 

 

8

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

$590 - $890

Cedar Landing, North Bend

 

2017

 

 

138

 

 

 

 

 

 

123

 

 

 

 

 

 

 

 

$500 - $650

Monarch Ridge, Sammamish

 

2017

 

 

59

 

 

 

 

 

 

59

 

 

 

 

 

 

 

 

$761 - $961

42nd Avenue Townhomes, Seattle

 

TBD

 

 

40

 

 

 

 

 

 

40

 

 

 

 

 

 

 

 

TBD

Wynstone, Federal Way

 

TBD

 

 

4

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

TBD

Pierce County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harbor Hill S-9, Gig Harbor

 

2014

 

 

40

 

 

 

37

 

 

 

3

 

 

 

1

 

 

 

1

 

 

$379 - $466

Harbor Hill S-8, Gig Harbor

 

2015

 

 

33

 

 

 

13

 

 

 

20

 

 

 

17

 

 

 

9

 

 

$379 - $466

Harbor Hill S-7, Gig Harbor

 

2016

 

 

16

 

 

 

 

 

 

16

 

 

 

3

 

 

 

 

 

$409 - $470

Chambers Ridge, Tacoma

 

2014

 

 

24

 

 

 

22

 

 

 

2

 

 

 

2

 

 

 

5

 

 

$507 - $630

The Enclave at Harbor Hill, Gig Harbor

 

2016

 

 

33

 

 

 

3

 

 

 

30

 

 

 

7

 

 

 

3

 

 

$540 - $595

Thurston County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Campus Fairways, Lacey

 

2015

 

 

39

 

 

 

17

 

 

 

22

 

 

 

7

 

 

 

4

 

 

$365 - $465

Kitsap County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McCormick Meadows, Port Orchard

 

2012

 

 

167

 

 

 

132

 

 

 

35

 

 

 

20

 

 

 

13

 

 

$278 - $357

Vinland Pointe, Poulsbo

 

2013

 

 

90

 

 

 

89

 

 

 

1

 

 

 

1

 

 

 

7

 

 

$348

Mountain Aire, Poulsbo

 

2016

 

 

145

 

 

 

 

 

 

145

 

 

 

19

 

 

 

 

 

$386 - $448

Closed Communities

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

N/A

Washington Total

 

 

 

 

2,022

 

 

 

925

 

 

 

1,082

 

 

 

184

 

 

 

92

 

 

 

Quadrant Homes Total

 

 

 

 

2,022

 

 

 

925

 

 

 

1,082

 

 

 

184

 

 

 

92

 

 

 

 

 

- 40 -


Trendmaker Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Texas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazoria County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sedona Lakes, Pearland

 

2014

 

 

30

 

 

 

17

 

 

 

13

 

 

 

1

 

 

 

 

 

$431 - $506

Southern Trails, Pearland

 

2014

 

 

40

 

 

 

32

 

 

 

8

 

 

 

4

 

 

 

3

 

 

$493 - $569

Pomona, Manvel

 

2015

 

 

24

 

 

 

 

 

 

24

 

 

 

3

 

 

 

 

 

$379 - $476

Rise Meridiana

 

2016

 

 

12

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

$319 - $355

Fort Bend County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cross Creek Ranch 60', Fulshear

 

2013

 

 

53

 

 

 

32

 

 

 

21

 

 

 

 

 

 

2

 

 

$399 - $455

Cross Creek Ranch 65', Fulshear

 

2013

 

 

52

 

 

 

23

 

 

 

29

 

 

 

2

 

 

 

2

 

 

$405 - $458

Cross Creek Ranch 70', Fulshear

 

2013

 

 

56

 

 

 

39

 

 

 

17

 

 

 

6

 

 

 

2

 

 

$497 - $567

Cross Creek Ranch 80', Fulshear

 

2013

 

 

29

 

 

 

11

 

 

 

18

 

 

 

5

 

 

 

2

 

 

$541 - $656

Cross Creek Ranch 90', Fulshear

 

2013

 

 

25

 

 

 

13

 

 

 

12

 

 

 

2

 

 

 

1

 

 

$603 - $673

Villas at Cross Creek Ranch, Fulshear

 

2013

 

 

101

 

 

 

94

 

 

 

7

 

 

 

3

 

 

 

3

 

 

$454 - $496

Fulshear Run, Richmond

 

2016

 

 

1

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

$536 - $638

Cinco Ranch, Katy

 

2015

 

 

55

 

 

 

55

 

 

 

 

 

 

 

 

 

1

 

 

$396 - $530

Harvest Green 75', Richmond

 

2015

 

 

19

 

 

 

 

 

 

19

 

 

 

5

 

 

 

 

 

$438 - $517

Sienna Plantation 80', Missouri City

 

2013

 

 

45

 

 

 

42

 

 

 

3

 

 

 

3

 

 

 

3

 

 

$542 - $650

Sienna Plantation 85', Missouri City

 

2015

 

 

25

 

 

 

 

 

 

25

 

 

 

7

 

 

 

 

 

$531 - $650

Villas at Sienna South, Missouri City

 

2015

 

 

19

 

 

 

 

 

 

19

 

 

 

2

 

 

 

 

 

$445 - $507

Lakes of Bella Terra, Richmond

 

2013

 

 

109

 

 

 

82

 

 

 

27

 

 

 

5

 

 

 

2

 

 

$465 - $553

Villas at Aliana, Richmond

 

2013

 

 

99

 

 

 

62

 

 

 

37

 

 

 

5

 

 

 

2

 

 

$409 - $503

Riverstone 55', Sugar Land

 

2013

 

 

34

 

 

 

18

 

 

 

16

 

 

 

6

 

 

 

1

 

 

$403 - $460

Riverstone 80', Sugar Land

 

2013

 

 

30

 

 

 

29

 

 

 

1

 

 

 

1

 

 

 

1

 

 

$559 - $710

Riverstone Avanti at Avalon 100', Sugar Land

 

2015

 

 

5

 

 

 

1

 

 

 

4

 

 

 

2

 

 

 

 

 

$1,174 - $1,232

The Townhomes at Imperial, Sugar Land

 

2015

 

 

27

 

 

 

27

 

 

 

 

 

 

 

 

 

7

 

 

$396 - $530

Galveston County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Harborwalk, Hitchcock

 

2014

 

 

50

 

 

 

46

 

 

 

4

 

 

 

1

 

 

 

2

 

 

$587 - $645

Harris County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fairfield, Cypress

 

2010

 

 

39

 

 

 

29

 

 

 

10

 

 

 

 

 

 

4

 

 

$474 - $573

Lakes of Fairhaven, Cypress

 

2008

 

 

166

 

 

 

165

 

 

 

1

 

 

 

5

 

 

 

8

 

 

$409 - $505

Towne Lake Living Views, Cypress

 

2013

 

 

122

 

 

 

104

 

 

 

18

 

 

 

3

 

 

 

 

 

$445 - $540

The Groves, Humble

 

2015

 

 

31

 

 

 

16

 

 

 

15

 

 

 

10

 

 

 

2

 

 

$436 - $498

Lakes of Creekside

 

2015

 

 

10

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

$549 - $648

Bridgeland '80

 

2015

 

 

9

 

 

 

 

 

 

9

 

 

 

5

 

 

 

 

 

$487 - $569

Hidden Arbor, Cypress

 

2015

 

 

84

 

 

 

 

 

 

84

 

 

 

13

 

 

 

 

 

$387 - $586

Clear Lake, Houston

 

2015

 

 

752

 

 

 

91

 

 

 

661

 

 

 

31

 

 

 

13

 

 

$383 - $658

Montgomery County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barton Woods, Conroe

 

2013

 

 

118

 

 

 

105

 

 

 

13

 

 

 

4

 

 

 

3

 

 

$425 - $623

Villas at Oakhurst, Porter

 

 

 

 

55

 

 

 

53

 

 

 

2

 

 

 

2

 

 

 

3

 

 

$542 - $650

Woodtrace, Woodtrace

 

2014

 

 

36

 

 

 

14

 

 

 

22

 

 

 

1

 

 

 

3

 

 

$450 - $499

Northgrove, Tomball

 

2015

 

 

25

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

$498 - $557

Bender's Landing Estates, Spring

 

2014

 

 

104

 

 

 

27

 

 

 

77

 

 

 

3

 

 

 

4

 

 

$457 - $567

The Woodlands, Creekside Park

 

2015

 

 

35

 

 

 

1

 

 

 

34

 

 

 

 

 

 

1

 

 

$505 - $651

Waller County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cane Island, Katy

 

2015

 

 

15

 

 

 

3

 

 

 

12

 

 

 

3

 

 

 

3

 

 

$537 - $647

Williamson County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crystal Falls

 

TBD

 

 

29

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

$550

Hays County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Belterra, Austin

 

2016

 

 

20

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

$560 - $619

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avanti Custom Homes

 

2007

 

 

125

 

 

 

107

 

 

 

18

 

 

 

15

 

 

 

5

 

 

$480 - $856

Texas Casual Cottages, Round Top

 

2010

 

 

88

 

 

 

79

 

 

 

9

 

 

 

9

 

 

 

5

 

 

$389 - $520

Texas Casual Cottages, Hill Country

 

2012

 

 

46

 

 

 

44

 

 

 

2

 

 

 

2

 

 

 

 

 

$443 - $500

Texas Total

 

 

 

 

2,849

 

 

 

1,461

 

 

 

1,388

 

 

 

170

 

 

 

88

 

 

 

Trendmaker Homes Total

 

 

 

 

2,849

 

 

 

1,461

 

 

 

1,388

 

 

 

170

 

 

 

88

 

 

 

 

 

- 41 -


TRI Pointe Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Southern California

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Orange County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arcadia, Irvine

 

2013

 

 

61

 

 

 

46

 

 

 

6

 

 

 

9

 

 

 

 

 

$1,199 - $1,420

Arcadia II, Irvine

 

2014

 

 

66

 

 

 

62

 

 

 

4

 

 

 

2

 

 

 

8

 

 

$1,199 - $1,281

Fairwind, Huntington Beach

 

2015

 

 

80

 

 

 

70

 

 

 

10

 

 

 

10

 

 

 

7

 

 

$937 - $1,032

Cariz, Irvine

 

2014

 

 

112

 

 

 

112

 

 

 

 

 

 

 

 

 

18

 

 

$495 - $650

Messina, Irvine

 

2014

 

 

59

 

 

 

43

 

 

 

7

 

 

 

6

 

 

 

5

 

 

$1,515 - $1,630

Messina II, Irvine

 

2016

 

 

43

 

 

 

 

 

 

 

 

 

8

 

 

 

 

 

$1,500

Aria-Rancho Mission Viejo

 

2016

 

 

87

 

 

 

7

 

 

 

80

 

 

 

14

 

 

 

4

 

 

$615 - $652

Aria II-Rancho Mission Viejo

 

2017

 

 

64

 

 

 

 

 

 

64

 

 

 

 

 

 

 

 

$615 - $652

Aubergine-Rancho Mission Viejo

 

2016

 

 

66

 

 

 

3

 

 

 

63

 

 

 

12

 

 

 

3

 

 

$1,005 - $1,115

Aubergine II-Rancho Mission Viejo

 

2017

 

 

57

 

 

 

 

 

 

57

 

 

 

 

 

 

 

 

TBD

Great Park 10-Pack Garden Court, Irvine

 

2017

 

 

74

 

 

 

 

 

 

74

 

 

 

 

 

 

 

 

TBD

Great Park Row Townhomes, Irvine

 

2017

 

 

96

 

 

 

 

 

 

96

 

 

 

 

 

 

 

 

TBD

Riverside County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Topazridge, Riverside

 

2012

 

 

68

 

 

 

65

 

 

 

3

 

 

 

2

 

 

 

2

 

 

$464 - $530

Topazridge II, Riverside

 

2014

 

 

49

 

 

 

47

 

 

 

2

 

 

 

1

 

 

 

2

 

 

$459 - $515

Aldea, Temecula

 

2014

 

 

90

 

 

 

90

 

 

 

 

 

 

 

 

 

13

 

 

$262 - $298

Kite Ridge, Riverside

 

2014

 

 

87

 

 

 

25

 

 

 

62

 

 

 

11

 

 

 

7

 

 

$445 - $470

Serrano Ridge at Sycamore Creek, Riverside

 

2015

 

 

87

 

 

 

9

 

 

 

78

 

 

 

14

 

 

 

5

 

 

$363 - $393

Terrassa Courts, Corona

 

2015

 

 

94

 

 

 

 

 

 

94

 

 

 

3

 

 

 

 

 

$400 - $438

Terrassa Villas, Corona

 

2015

 

 

52

 

 

 

 

 

 

52

 

 

 

2

 

 

 

 

 

$438 - $478

Los Angeles County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grayson, Santa Clarita

 

2015

 

 

119

 

 

 

13

 

 

 

106

 

 

 

10

 

 

 

7

 

 

$517 - $550

San Bernardino County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sedona at Parkside, Ontario

 

2015

 

 

152

 

 

 

23

 

 

 

129

 

 

 

25

 

 

 

10

 

 

$346 - $381

Kensington at Park Place, Ontario

 

2015

 

 

67

 

 

 

13

 

 

 

54

 

 

 

8

 

 

 

7

 

 

$486 - $509

St. James at Park Place, Ontario

 

2015

 

 

57

 

 

 

19

 

 

 

38

 

 

 

14

 

 

 

2

 

 

$453 - $468

Ventura County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Westerlies, Oxnard

 

2015

 

 

116

 

 

 

 

 

 

116

 

 

 

3

 

 

 

 

 

$370 - $499

Southern California Total

 

 

 

 

1,903

 

 

 

647

 

 

 

1,195

 

 

 

154

 

 

 

100

 

 

 

Northern California

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contra Costa County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Berkshire at Barrington, Brentwood

 

2014

 

 

89

 

 

 

74

 

 

 

15

 

 

 

13

 

 

 

11

 

 

$506 - $553

Hawthorne at Barrington, Brentwood

 

2014

 

 

105

 

 

 

67

 

 

 

38

 

 

 

12

 

 

 

9

 

 

$549 - $615

Marquette at Barrington, Brentwood

 

2015

 

 

90

 

 

 

26

 

 

 

64

 

 

 

9

 

 

 

9

 

 

$480 - $715

Wynstone at Barrington, Brentwood

 

2016

 

 

92

 

 

 

 

 

 

92

 

 

 

 

 

 

 

 

$450 - $550

Penrose at Barrington, Brentwood

 

2016

 

 

34

 

 

 

 

 

 

34

 

 

 

 

 

 

 

 

$498 - $515

Cobblestone, Milpitas

 

2015

 

 

32

 

 

 

31

 

 

 

1

 

 

 

 

 

 

9

 

 

$960 - $1,163

Solano County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redstone, Vacaville

 

2015

 

 

141

 

 

 

32

 

 

 

109

 

 

 

8

 

 

 

5

 

 

$455 - $527

Green Valley-Lewis, Fairfield

 

2018

 

 

95

 

 

 

 

 

 

95

 

 

 

 

 

 

 

 

TBD

Green Valley-Westgate, Fairfield

 

2018

 

 

53

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

TBD

San Joaquin County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ventana, Tracy

 

2015

 

 

93

 

 

 

29

 

 

 

64

 

 

 

9

 

 

 

7

 

 

$438 - $540

Sundance, Mountain House

 

2015

 

 

113

 

 

 

18

 

 

 

95

 

 

 

32

 

 

 

9

 

 

$555 - $635

Alameda County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cadence, Alameda Landing

 

2015

 

 

91

 

 

 

42

 

 

 

49

 

 

 

7

 

 

 

4

 

 

$1,057 - $1,234

Linear, Alameda Landing

 

2015

 

 

106

 

 

 

54

 

 

 

52

 

 

 

10

 

 

 

 

 

$685 - $915

Symmetry, Alameda Landing

 

2016

 

 

56

 

 

 

 

 

 

56

 

 

 

9

 

 

 

 

 

$775 - $875

Commercial, Alameda Landing

 

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

$620

Parasol, Fremont

 

2016

 

 

39

 

 

 

 

 

 

39

 

 

 

 

 

 

 

 

$590 - $850

Blackstone at the Cannery, Hayward SFA

 

2016

 

 

105

 

 

 

 

 

 

105

 

 

 

 

 

 

 

 

$530 - $600

Blackstone at the Cannery, Hayward SFD

 

2016

 

 

52

 

 

 

 

 

 

52

 

 

 

2

 

 

 

 

 

$865 - $915

Catalina Crossing, Livermore

 

2017

 

 

31

 

 

 

 

 

 

31

 

 

 

 

 

 

 

 

$865 - $915

Jordan Ranch, Dublin

 

2017

 

 

56

 

 

 

 

 

 

56

 

 

 

 

 

 

 

 

$865 - $915

Jordan Ranch, Dublin

 

2017

 

 

105

 

 

 

 

 

 

57

 

 

 

 

 

 

 

 

$865 - $915

Mission Stevenson, Fremont

 

2018

 

 

77

 

 

 

 

 

 

77

 

 

 

 

 

 

 

 

 

Northern California Total

 

 

 

 

1,657

 

 

 

373

 

 

 

1,236

 

 

 

111

 

 

 

63

 

 

 

California Total

 

 

 

 

3,560

 

 

 

1,020

 

 

 

2,431

 

 

 

265

 

 

 

163

 

 

 

Colorado

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Douglas County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terrain 4000 Series, Castle Rock

 

2013

 

 

149

 

 

 

111

 

 

 

38

 

 

 

28

 

 

 

11

 

 

$345 - $398

Terrain 3500 Series, Castle Rock

 

2015

 

 

67

 

 

 

47

 

 

 

20

 

 

 

15

 

 

 

10

 

 

$321 - $344

Jefferson County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leyden Rock 4000 Series, Arvada

 

2014

 

 

51

 

 

 

47

 

 

 

4

 

 

 

3

 

 

 

2

 

 

$385 - $441

Leyden Rock 5000 Series, Arvada

 

2015

 

 

67

 

 

 

38

 

 

 

29

 

 

 

15

 

 

 

8

 

 

$454 - $509

Candelas 6000 Series, Arvada

 

2015

 

 

76

 

 

 

7

 

 

 

69

 

 

 

10

 

 

 

1

 

 

$498 - $625

Candelas 3500 Series, Arvada

 

2016

 

 

97

 

 

 

 

 

 

97

 

 

 

 

 

 

 

 

TBD

Denver County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 42 -


 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Platt Park North, Denver

 

2014

 

 

29

 

 

 

29

 

 

 

 

 

 

 

 

 

1

 

 

$611 - $615

Larimer County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Centerra 5000 Series, Loveland

 

2015

 

 

150

 

 

 

17

 

 

 

62

 

 

 

18

 

 

 

5

 

 

$394 - $426

Arapahoe County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Whispering Pines, Aurora

 

2016

 

 

115

 

 

 

 

 

 

115

 

 

 

 

 

 

 

 

$518 - $600

Colorado Total

 

 

 

 

801

 

 

 

296

 

 

 

434

 

 

 

89

 

 

 

38

 

 

 

TRI Pointe Homes Total

 

 

 

 

4,361

 

 

 

1,316

 

 

 

2,865

 

 

 

354

 

 

 

201

 

 

 

 

 

- 43 -


Winchester Homes

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

Homes Delivered

 

 

 

 

 

 

 

 

 

 

 

Homes

 

 

Lots

 

 

 

 

 

 

for the Three

 

 

 

 

 

Year of

 

Total

 

 

Delivered as of

 

 

Owned as of

 

 

Backlog as of

 

 

Months Ended

 

 

Sales Price

 

 

First

 

Number of

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

Range

County, Project, City

 

Delivery(1)

 

Lots(2)

 

 

2016

 

 

2016(3)

 

 

2016(4)(5)

 

 

2016

 

 

(in thousands)(6)

Maryland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anne Arundel County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Watson's Glen, Millersville

 

2015

 

 

103

 

 

 

3

 

 

 

100

 

 

 

 

 

 

1

 

 

Closed

Frederick County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landsdale, Monrovia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landsdale Village SFD

 

2015

 

 

222

 

 

 

20

 

 

 

202

 

 

 

8

 

 

 

4

 

 

$495 - $635

Landsdale Townhomes

 

2015

 

 

100

 

 

 

6

 

 

 

94

 

 

 

6

 

 

 

3

 

 

$335 - $375

Landsdale TND Neo SFD

 

2015

 

 

77

 

 

 

3

 

 

 

74

 

 

 

5

 

 

 

3

 

 

$435 - $468

Howard County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Walnut Creek, Ellicott City

 

2014

 

 

25

 

 

 

17

 

 

 

8

 

 

 

7

 

 

 

2

 

 

$1,182- $1,409

Montgomery County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cabin Branch, Clarksburg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cabin Branch SFD

 

2014

 

 

359

 

 

 

52

 

 

 

307

 

 

 

22

 

 

 

9

 

 

$480 - $668

Cabin Branch Boulevard Townhomes

 

TBD

 

 

61

 

 

 

 

 

 

61

 

 

 

 

 

 

 

 

TBD

Cabin Branch Townhomes

 

2014

 

 

567

 

 

 

70

 

 

 

497

 

 

 

17

 

 

 

7

 

 

$375 - $411

Preserve at Stoney Spring-Lots for Sale

 

N/A

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

N/A

Preserve at Rock Creek, Rockville

 

2012

 

 

68

 

 

 

65

 

 

 

3

 

 

 

 

 

 

2

 

 

$748 - $964

Poplar Run, Silver Spring

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Poplar Run Townhomes

 

2013

 

 

136

 

 

 

129

 

 

 

7

 

 

 

7

 

 

 

11

 

 

$390 - $435

Poplar Run SFD

 

2010

 

 

297

 

 

 

215

 

 

 

82

 

 

 

19

 

 

 

6

 

 

$567 - $766

Poplar Run Single Family Neos

 

2016

 

 

29

 

 

 

 

 

 

29

 

 

 

2

 

 

 

 

 

$530 - $620

Potomac Highlands, Potomac

 

2016

 

 

23

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

TBD

Glenmont MetroCenter, Silver Spring

 

2016

 

 

89

 

 

 

 

 

 

89

 

 

 

 

 

 

 

 

TBD

Closed Communities

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maryland Total

 

 

 

 

2,156

 

 

 

580

 

 

 

1,581

 

 

 

93

 

 

 

48

 

 

 

Virginia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fairfax County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reserve at Waples Mill, Oakton

 

2013

 

 

28

 

 

 

27

 

 

 

1

 

 

 

1

 

 

 

2

 

 

$1,460

Stuart Mill & Timber Lake, Oakton

 

2014

 

 

19

 

 

 

5

 

 

 

14

 

 

 

2

 

 

 

 

 

$1,363 - $1,675

Prince William County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Villages of Piedmont, Haymarket

 

2015

 

 

168

 

 

 

21

 

 

 

147

 

 

 

9

 

 

 

4

 

 

$370 - $424

Loudoun County:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brambleton, Ashburn

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

English Manor Townhomes

 

2014

 

 

46

 

 

 

27

 

 

 

19

 

 

 

11

 

 

 

2

 

 

$495 - $540

Glenmere at Brambleton SFD

 

2014

 

 

80

 

 

 

68

 

 

 

12

 

 

 

16

 

 

 

5

 

 

$650 - $733

Glenmere at Brambleton Townhomes

 

2014

 

 

99

 

 

 

75

 

 

 

24

 

 

 

13

 

 

 

3

 

 

$470 - $474

Vistas at Lansdowne, Lansdowne

 

2015

 

 

120

 

 

 

20

 

 

 

100

 

 

 

9

 

 

 

2

 

 

$569 - $670

Willowsford Grant II, Aldie

 

2016

 

 

9

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

TBD

Willowsford Greens, Aldie

 

2014

 

 

38

 

 

 

25

 

 

 

13

 

 

 

4

 

 

 

1

 

 

$760 - $840

Closed Communities

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Virginia Total

 

 

 

 

607

 

 

 

268

 

 

 

339

 

 

 

65

 

 

 

19

 

 

 

Winchester Homes Total

 

 

 

 

2,763

 

 

 

848

 

 

 

1,920

 

 

 

158

 

 

 

67

 

 

 

TRI Pointe Group Total

 

 

 

 

32,694

 

 

 

7,464

 

 

 

25,027

 

 

 

1,534

 

 

 

771

 

 

 

__________

(1)

Year of first delivery for future periods is based upon management’s estimates and is subject to change.

(2)

The number of homes to be built at completion is subject to change, and there can be no assurance that we will build these homes.

(3)

Owned lots as of March 31, 2016 include owned lots in backlog as of March 31, 2016.

(4)

Backlog consists of homes under sales contracts that had not yet been delivered, and there can be no assurance that delivery of sold homes will occur.

(5)

Of the total homes subject to pending sales contracts that have not been delivered as of March 31, 2016, 869 homes are under construction, 300 homes have completed construction, and 365 homes have not started construction.

(6)

Sales price range reflects base price only and excludes any lot premium, buyer incentives and buyer-selected options, which may vary from project to project. Sales prices for homes required to be sold pursuant to affordable housing requirements are excluded from sales price range. Sales prices reflect current pricing and might not be indicative of past or future pricing.

 

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Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements contained elsewhere in this report, which have been prepared in accordance with GAAP. Our notes to the unaudited condensed consolidated financial statement contained elsewhere in this report and the audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015 describe the significant accounting policies essential to our unaudited condensed consolidated financial statements. The preparation of our financial statements requires our management to make estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions that we have used are appropriate and correct based on information available at the time they were made. These estimates, judgments and assumptions can affect our reported assets and liabilities as of the date of the financial statements, as well as the reported revenues and expenses during the period presented. If there is a material difference between these estimates, judgments and assumptions and actual facts, our financial statements may be affected.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require our judgment in its application. There are areas in which our judgment in selecting among available alternatives would not produce a materially different result, but there are some areas in which our judgment in selecting among available alternatives would produce a materially different result. See the notes to the unaudited condensed consolidated financial statements that contain additional information regarding our accounting policies and other disclosures.

Recently Issued Accounting Standards

See Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies, to the accompanying condensed notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

Related Party Transactions

See Note 17, Related Party Transactions to the accompanying condensed notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks related to fluctuations in interest rates on our outstanding debt.  We did not utilize swaps, forward or option contracts on interest rates or commodities, or other types of derivative financial instruments as of or during the three months ended March 31, 2016. We have not entered into and currently do not hold derivatives for trading or speculative purposes. Many of the statements contained in this section are forward looking and should be read in conjunction with our disclosures under the heading “Cautionary Note Concerning Forward-Looking Statements.”

Item 4.

Controls and Procedures

We have established disclosure controls and procedures to ensure that information we are required to disclose in the reports 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, and accumulated and communicated to management, including the Chief Executive Officer (the “Principal Executive Officer”) and Chief Financial Officer (the “Principal Financial Officer”), as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of senior management, including our Principal Executive Officer and Principal Financial Officer, we evaluated our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2016.

Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated our internal control over financial reporting to determine whether any change occurred during the three months ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the three months ended March 31, 2016.

 

 

 

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PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Not applicable.

Item 1A.

Risk Factors

The following supplements and updates the risk factors in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2015.  If any of the risks discussed below or in our Annual Report on Form 10-K occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly and you could lose all or a part of your investment.  Some statements in this Quarterly Report on Form 10-Q, including statements in the following risk factor, constitute forward-looking statements.  Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q entitled “Cautionary Note Concerning Forward-Looking Statements.”

Risks Related to Ownership of Our Common Stock

We cannot assure you that our stock repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.

Repurchases pursuant to our stock repurchase program described in Part II, Item 2 of this Quarterly Report on Form 10-Q could affect our stock price and increase its volatility and will reduce the market liquidity for our stock.  The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.  Additionally, these repurchases will diminish our cash reserves, which could impact our ability to pursue possible future strategic opportunities and acquisitions and would result in lower overall returns on our cash balances.  There can be no assurance that any stock repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value.  Although our stock repurchase program is intended to enhance long term stockholder value, short-term stock price fluctuations could reduce the effectiveness of these repurchases.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On January 27, 2016, we announced that our board of directors approved a stock repurchase program, authorizing the repurchase of our common stock with an aggregate value of up to $100 million through January 25, 2017.  Purchases of common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.  As of March 31, 2016, no shares have been repurchased under this program.  We are not obligated under the program to repurchase any specific number of shares, and we may modify, suspend or discontinue the program at any time.  Our management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements.  

 

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Item 6.

Exhibits

 

Exhibit
Number

 

Exhibit Description

 

 

 

2.1

 

Transaction Agreement, dated as of November 3, 2013, among TRI Pointe Homes, Inc., Weyerhaeuser Company, Weyerhaeuser Real Estate Company, and Topaz Acquisition, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 (filed Mar. 28, 2014))

 

 

 

2.2

 

Agreement and Plan of Merger to Form Holding Company, dated as of July 7, 2015, by and among TRI Pointe Homes, Inc., TRI Pointe Group, Inc. and TPG Merger, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (filed July 7, 2015))

 

 

 

3.1

 

Amended and Restated Certificate of Incorporation of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (filed July 7, 2015))

 

 

 

3.2

 

Amended and Restated Bylaws of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (filed July 7, 2015))

 

 

 

4.1

 

Specimen Common Stock Certificate of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed Dec. July 7, 2015))

 

 

 

4.2

 

Investor Rights Agreement, dated as of January 30, 2013, by and among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas J. Bauer, Thomas J. Mitchell and Michael D. Grubbs. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 (filed Jan. 9, 2014))

 

 

 

4.3

 

First Amendment to Investor Rights Agreement, dated as of November 3, 2013, by and among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas F. Bauer, Thomas J. Mitchell and Michael D. Grubbs (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K (filed Nov. 4, 2013))

 

 

 

4.4

 

Second Amendment to Investor Rights Agreement, dated as of July 7, 2015, among TRI Pointe Group, Inc., TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas F. Bauer, Thomas J. Mitchell and Michael D. Grubbs (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8K (filed July 7, 2015))

 

 

 

4.5

 

Registration Rights Agreement, dated as of January 30, 2013, among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., and certain TRI Pointe Homes, Inc. stockholders (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-4 (filed Jan. 9, 2014))

 

 

 

4.6

 

First Amendment to Registration Rights Agreement, dated as of July 7, 2015, among TRI Pointe Group, Inc., TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C. and certain TRI Pointe Homes, Inc. stockholders (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8K (filed July 7, 2015))

 

 

 

4.7

 

Indenture, dated as of June 13, 2014, by and among Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee (including form of 4.375% Senior Note due 2019) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed June 19, 2014))

 

 

 

4.8

 

First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed July 7, 2014))

 

 

 

4.9

 

Second Supplemental Indenture, dated as of July 7, 2014, among the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (filed July 7, 2014))

 

 

 

4.10

 

Third Supplemental Indenture, dated as of July 7, 2015, among TRI Point Group, Inc., TRI Pointe Homes, Inc. and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8‑K (filed July 7, 2015))

 

 

 

4.11

 

Indenture, dated as of June 13, 2014, by and among Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee (including form of 5.875% Senior Note due 2024) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed June 19, 2014))

 

- 47 -


Exhibit
Number

 

Exhibit Description

 

 

 

4.12

 

First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed July 7, 2014))

 

 

 

4.13

 

Second Supplemental Indenture, dated as of July 7, 2014, among the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (filed July 7, 2014))

 

 

 

4.14

 

Third Supplemental Indenture, dated as of July 7, 2015, among TRI Point Group, Inc., TRI Pointe Homes, Inc. and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8K (filed July 7, 2015))

 

 

 

10.1*

 

Form of Performance-Based Cash Award Agreement. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (filed March 2, 2016))

 

 

 

10.2*

 

Form of Performance-Based Restricted Stock Unit Award Agreement (total shareholder return) (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (filed March 2, 2016))

 

 

 

10.3*

 

Form of Time-Vested Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K (filed March 2, 2016))

 

 

 

10.4*

 

Form of Severance and Change in Control Protection Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (filed March 2, 2016))

 

 

 

4.12

 

First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed July 7, 2014))

 

 

 

 

 

 

31.1

 

Chief Executive Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002

 

 

 

31.2

 

Chief Financial Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002

 

 

 

32.1

 

Chief Executive Officer Section 906 Certification of the Sarbanes-Oxley Act of 2002

 

 

 

32.2

 

Chief Financial Officer Section 906 Certification of the Sarbanes-Oxley Act of 2002

 

 

 

101

 

The following materials from TRI Pointe Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statement of Cash Flows, and (v) Condensed Notes to Consolidated Financial Statement.

*Management Contract or Compensatory Plan or Arrangement

 

 

 

- 48 -


 

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.

 

 

 

TRI Pointe Group, Inc.

 

 

 

 

 

 

 

By:

 

/s/ Douglas F. Bauer

 

 

 

 

Douglas F. Bauer

 

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

By:

 

/s/ Michael D. Grubbs

 

 

 

 

Michael D. Grubbs

 

 

 

 

Chief Financial Officer

Date: April 27, 2016

 

 

 

- 49 -