UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________________
FORM 8-K
_______________________________________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 24, 2020
_______________________________________________________________________________________

TRI Pointe Group, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________________

Delaware	 	1-35796	 	61-1763235	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS 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
Not Applicable
(Former name or former address, if changed since last report.)
_______________________________________________________________________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered	
Common Stock, par value $0.01 per share		TPH		New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02          Results of Operations and Financial Condition
On July 24, 2020, TRI Pointe Group, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended June 30, 2020.  A copy of the Company’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including the exhibits attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing. In addition, the press release furnished as an exhibit to this report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Item 9.01          Financial Statements and Exhibits

(d)Exhibits
99.1          Press Release dated July 24, 2020
104           Cover Page Interactive Data File, formatted in Inline XBRL

2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

									
 	TRI Pointe Group, Inc.	
 	 	 	
Date: July 24, 2020	By:	/s/ Glenn J. Keeler	
 	 	Glenn J. Keeler,
Chief Financial Officer and Treasurer	

3

Exhibit 99.1

TRI POINTE GROUP, INC. REPORTS 2020 SECOND QUARTER RESULTS

-June Net New Home Orders up 28% Year-Over-Year-
-Backlog Dollar Value up 17% Year-Over-Year-
-Homebuilding Gross Margin Percentage of 21.6%-
-Diluted Earnings Per Share of $0.43-
IRVINE, Calif., July 24, 2020 / TRI Pointe Group, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2020.
“TRI Pointe Group experienced a significant rebound from the initial weeks of the COVID-19 pandemic, with double-digit revenue growth and significant margin expansion as compared to the prior-year period, as well as improving order trends as the second quarter of 2020 progressed,” said TRI Pointe Group Chief Executive Officer Doug Bauer. “Net income for the quarter was $56.5 million, or $0.43 per diluted share, representing a 115% improvement over the prior-year period. Excluding the impact of costs related to the early extinguishment of debt and a workforce reduction plan, net income was $65.9 million, or $0.51 per diluted share. These results are a testament to the resiliency of our Company and underscore the heightened demand for single-family homes that currently exists in our country.”
Mr. Bauer continued, “Following the initial shock to the economy brought about by the COVID-19 pandemic, order activity steadily improved as the second quarter progressed, culminating in a 28% year-over-year improvement in net new home orders for the month of June, including a 36% year-over-year increase in California. This momentum has carried into July, with net new home orders up over 40% for the first three weeks of the month as compared to the prior-year period. The order activity has been broad-based, both from a geographic and product segment standpoint, and we have been actively raising prices in most markets in response to the strong demand.”
Mr. Bauer concluded, “While the long-term impact of the virus on the economy and our industry remains unclear, TRI Pointe Group is well positioned to navigate these uncertain times thanks to our seasoned management team, our well capitalized balance sheet and our strong market positioning. In addition, our team members have done an excellent job adapting to this new environment, giving me confidence that our Company will emerge from this health crisis a better and more efficient homebuilder.”
Results and Operational Data for Second Quarter 2020 and Comparisons to Second Quarter 2019
•Net income was $56.5 million, or $0.43 per diluted share, compared to $26.3 million, or $0.18 per diluted share. In the second quarter of 2020, the Company recorded costs related to the early extinguishment and refinancing of a portion of its Senior Notes due 2021 in connection with the issuance of its Senior Notes due 2028 during the quarter. The charge incurred was $6.9 million and is included in other expense (income), net on the Company's consolidated statements of operations. In addition, the Company incurred $5.5 million of restructuring charges related to a workforce reduction plan that was implemented in the second quarter of 2020. Excluding these items, adjusted net income was $65.9 million, or $0.51 per diluted share, for the second quarter of 2020.*
•Home sales revenue of $766.9 million compared to $692.1 million, an increase of 11%
◦New home deliveries of 1,229 homes compared to 1,125 homes, an increase of 9%
◦Average sales price of homes delivered of $624,000 compared to $615,000, an increase of 1%
•Homebuilding gross margin percentage of 21.6% compared to 17.0%, an increase of 460 basis points
◦Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 24.6%*
•SG&A expense as a percentage of homes sales revenue of 10.8% compared to 12.1%, a decrease of 130 basis points
•Net new home orders of 1,332 compared to 1,491, a decrease of 11%
Page 1

•Active selling communities averaged 144.3 compared to 146.0, a decrease of 1%
◦Net new home orders per average selling community were 9.2 orders (3.1 monthly) compared to 10.2 orders (3.4 monthly)
◦Cancellation rate of 21% compared to 16%
•Backlog units at quarter end of 2,558 homes compared to 2,208, an increase of 16%
◦Dollar value of backlog at quarter end of $1.7 billion compared to $1.4 billion, an increase of 17%
◦Average sales price of homes in backlog at quarter end of $656,000 compared to $652,000, an increase of 1%
•Ratios of debt-to-capital and net debt-to-net capital of 39.4% and 30.2%*, respectively, as of June 30, 2020
•Issued $350 million aggregate principal amount of 5.70% Senior Notes due 2028
◦Proceeds from the issuance during the quarter were used to pay off $216 million of the $300 million of Senior Notes due 2021 that were tendered in a cash tender offer, with the remainder of the notes redeemed in early July.
•Ended the second quarter of 2020 with total liquidity of $1.0 billion, including cash and cash equivalents of $474.5 million and $559.4 million of availability under the Company’s unsecured revolving credit facility
 
* See “Reconciliation of Non-GAAP Financial Measures”

“The health and safety of our employees, trade partners and customers continues to be our top priority as we conduct our business in the era of COVID-19”, said TRI Pointe Group President and Chief Operating Officer Tom Mitchell. “We have implemented a number of safety protocols across our organization that encourage social distancing and allow for employees to work from home in an effort to limit the spread of the virus. Fortunately, we have been successful in our sales efforts despite the reduced in-person interaction, thanks to our virtual sales capabilities and the investments we have made in our online presence. We believe this new way of shopping for a home will be a lasting shift in consumer behavior and will lead to a more efficient sales model over time.”
Outlook
There remains significant uncertainty regarding COVID-19 and future developments, including the duration and severity of the outbreak, as well as the related short-term and long-term impacts on the economy. The following outlook is based on the Company’s backlog as of June 30, 2020, current market dynamics and management’s estimates. Actual results could differ due to, among other things, the effects of the COVID-19 pandemic, including the severity and duration of the outbreak and disruptions to the economy that may result from the pandemic.

For the third quarter of 2020, the Company anticipates delivering between 1,100 and 1,200 homes at an average sales price between $620,000 and $630,000. The Company expects its homebuilding gross margin percentage will be in the range of 20.0% to 21.0% for the third quarter of 2020 and anticipates its SG&A expense as a percentage of homes sales revenue will be in the range of 10.2% to 10.7% during such period. Lastly, the Company expects its effective tax rate for the third quarter of 2020 will be in the range of 25% to 26%.

For the full year, the Company anticipates delivering between 4,400 and 4,700 homes at an average sales price between $620,000 and $630,000. In addition, the Company expects homebuilding gross margin percentage will be in the range of 20.0% to 21.0% for the full year and anticipates its SG&A expense as a percentage of homes sales revenue will be in the range of 11.0% to 11.5%. Finally, the Company expects its effective tax rate for the full year will be in the range of 24% to 25%.
Page 2

Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Friday, July 24, 2020.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial Officer.
Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at presentation slides on the internet through the Investors section of the Company’s website at www.TRIPointeGroup.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the TRI Pointe Group Second Quarter 2020 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for two weeks following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13706410. An archive of the webcast will also be available on the Company’s website for a limited time.
About TRI Pointe Group®
Headquartered in Irvine, California, TRI Pointe Group, Inc. (NYSE: TPH) is a family of premium, regional homebuilders that designs, builds, and sells homes in major U.S. markets. As one of the top 10 largest public homebuilding companies based on revenue in the United States, TRI Pointe Group combines the resources, operational sophistication, and leadership of a national organization with the regional insights, community ties, and agility of local homebuilders. The TRI Pointe Group family includes Maracay® in Arizona, Pardee Homes® in California and Nevada, Quadrant Homes® in Washington, Trendmaker® Homes in Texas, TRI Pointe Homes® in California, Colorado and the Carolinas, and Winchester® Homes* in Maryland and Virginia. TRI Pointe Group was named 2019 Builder of the Year by Builder and Developer magazine, recognized in Fortune magazine’s 2017 100 Fastest-Growing Companies list, and garnered the 2015 Builder of the Year Award by Builder magazine. The company was also named one of the Best Places to Work in Orange County by the Orange County Business Journal in 2016, 2017, 2018 and 2019. For more information, please visit www.TriPointeGroup.com.
*Winchester is a registered trademark and is used with permission.
Page 3

Forward-Looking Statements
Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and efficacy of a vaccine, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the effects of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and 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; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations, particularly within California; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; raw material and labor prices and availability; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the re-occurrence of drought conditions in California; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism, civil unrest or outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; 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; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.
Investor Relations Contact:
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TRIPointeGroup.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045

Page 4

KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,	
	2020		2019		Change		% Change		2020		2019		Change		% Change	
Operating Data:	(unaudited)	
Home sales revenue	$	766,942 	 		$	692,138 	 		$	74,804 	 		11 	%		$	1,361,780 	 		$	1,184,841 	 		$	176,939 	 		15 	%	
Homebuilding gross margin	$	165,508 	 		$	117,454 	 		$	48,054 	 		41 	%		$	287,464 	 		$	188,621 	 		$	98,843 	 		52 	%	
Homebuilding gross margin %	21.6 	%		17.0 	%		4.6 	%				21.1 	%		15.9 	%		5.2 	%			
Adjusted homebuilding gross margin %*	24.6 	%		19.6 	%		5.0 	%				24.1 	%		19.1 	%		5.0 	%			

	
SG&A expense	$	82,748 	 		$	83,919 	 		$	(1,171)	 		(1)	%		$	165,222 	 		$	161,505 	 		$	3,717 	 		2 	%	
SG&A expense as a % of home sales
revenue	10.8 	%		12.1 	%		(1.3)	%				12.1 	%		13.6 	%		(1.5)	%			
Net income	$	56,528 	 		$	26,262 	 		$	30,266 	 		115 	%		$	88,411 	 		$	26,333 	 		$	62,078 	 		236 	%	
Adjusted net income*	$	65,921 	 		$	26,262 	 		$	39,659 	 		151 	%		$	97,841 	 		$	26,333 	 		$	71,508 	 		272 	%	
Adjusted EBITDA*	$	120,771 	 		$	63,617 	 		$	57,154 	 		90 	%		$	188,727 	 		$	91,766 	 		$	96,961 	 		106 	%	
Interest incurred	$	21,828 	 		$	21,962 	 		$	(134)	 		(1)	%		$	42,607 	 		$	45,335 	 		$	(2,728)	 		(6)	%	
Interest in cost of home sales	$	21,801 	 		$	18,071 	 		$	3,730 	 		21 	%		$	38,623 	 		$	32,262 	 		$	6,361 	 		20 	%	
																
Other Data:																
Net new home orders	1,332 	 		1,491 	 		(159)	 		(11)	%		2,993 	 		2,812 	 		181 	 		6 	%	
New homes delivered	1,229 	 		1,125 	 		104 	 		9 	%		2,187 	 		1,939 	 		248 	 		13 	%	
Average sales price of homes delivered	$	624 	 		$	615 	 		$	9 	 		1 	%		$	623 	 		$	611 	 		$	12 	 		2 	%	
Cancellation rate	21 	%		16 	%		5 	%				17 	%		15 	%		2 	%			
Average selling communities	144.3 	 		146.0 	 		(1.7)	 		(1)	%		142.4 	 		147.0 	 		(4.6)	 		(3)	%	
Selling communities at end of period	145 	 		146 	 		(1)	 		(1)	%									
Backlog (estimated dollar value)	$	1,679,068 	 		$	1,438,548 	 		$	240,520 	 		17 	%									
Backlog (homes)	2,558 	 		2,208 	 		350 	 		16 	%									
Average sales price in backlog	$	656 	 		$	652 	 		$	4 	 		1 	%									
																
	June 30,		December 31,													
	2020		2019		Change		% Change									
Balance Sheet Data:	(unaudited)															
Cash and cash equivalents	$	474,545 	 		$	329,011 	 		$	145,534 	 		44 	%									
Real estate inventories	$	3,012,622 	 		$	3,065,436 	 		$	(52,814)	 		(2)	%									
Lots owned or controlled	29,800 	 		30,029 	 		(229)	 		(1)	%									
Homes under construction (1)	2,326 	 		2,269 	 		57 	 		3 	%									
Homes completed, unsold	198 	 		343 	 		(145)	 		(42)	%									
Debt	$	1,416,189 	 		$	1,283,985 	 		$	132,204 	 		10 	%									
Stockholders’ equity	$	2,175,799 	 		$	2,186,530 	 		$	(10,731)	 		(0.5)	%									
Book capitalization	$	3,591,988 	 		$	3,470,515 	 		$	121,473 	 		4 	%									
Ratio of debt-to-capital	39.4 	%		37.0 	%		2.4 	%											
Ratio of net debt-to-net capital*	30.2 	%		30.4 	%		(0.2)	%											
__________
(1)  Homes under construction included 49 and 78 models at June 30, 2020 and December 31, 2019, respectively.
* See “Reconciliation of Non-GAAP Financial Measures”
Page 5

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

												
	June 30,		December 31,	
	2020		2019	
Assets	(unaudited)			
Cash and cash equivalents	$	474,545 	 		$	329,011 	 	
Receivables	87,580 	 		69,276 	 	
Real estate inventories	3,012,622 	 		3,065,436 	 	
Investments in unconsolidated entities	36,040 	 		11,745 	 	
Goodwill and other intangible assets, net	159,626 	 		159,893 	 	
Deferred tax assets, net	39,744 	 		49,904 	 	
Other assets	167,747 	 		173,425 	 	
Total assets	$	3,977,904 	 		$	3,858,690 	 	
				
Liabilities				
Accounts payable	$	71,086 	 		$	66,120 	 	
Accrued expenses and other liabilities	314,818 	 		322,043 	 	
Loans payable	250,000 	 		250,000 	 	
Senior notes	1,166,189 	 		1,033,985 	 	
Total liabilities	1,802,093 	 		1,672,148 	 	
				
Commitments and contingencies				
				
Equity				
Stockholders’ equity:				
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
   shares issued and outstanding as of June 30, 2020 and
   December 31, 2019, respectively	— 	 		— 	 	
Common stock, $0.01 par value, 500,000,000 shares authorized;
  130,325,865 and 136,149,633 shares issued and outstanding at
   June 30, 2020 and December 31, 2019, respectively	1,303 	 		1,361 	 	
Additional paid-in capital	482,111 	 		581,195 	 	
Retained earnings	1,692,385 	 		1,603,974 	 	
Total stockholders’ equity	2,175,799 	 		2,186,530 	 	
Noncontrolling interests	12 	 		12 	 	
Total equity	2,175,811 	 		2,186,542 	 	
Total liabilities and equity	$	3,977,904 	 		$	3,858,690 	 	

 
Page 6

CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)

																								
 	Three Months Ended June 30,		Six Months Ended June 30,	
 	2020		2019		2020		2019	
Homebuilding:	 		 					
Home sales revenue	$	766,942 	 		$	692,138 	 		$	1,361,780 	 		$	1,184,841 	 	
Land and lot sales revenue	220 	 		5,183 	 		220 	 		6,212 	 	
Other operations revenue	648 	 		637 	 		1,266 	 		1,235 	 	
Total revenues	767,810 	 		697,958 	 		1,363,266 	 		1,192,288 	 	
Cost of home sales	601,434 	 		574,684 	 		1,074,316 	 		996,220 	 	
Cost of land and lot sales	374 	 		5,562 	 		576 	 		7,057 	 	
Other operations expense	624 	 		627 	 		1,248 	 		1,217 	 	
Sales and marketing	45,194 	 		47,065 	 		87,831 	 		86,054 	 	
General and administrative	37,554 	 		36,854 	 		77,391 	 		75,451 	 	
Restructuring charges	5,549 	 		— 	 		5,549 	 		— 	 	
Homebuilding income from operations	77,081 	 		33,166 	 		116,355 	 		26,289 	 	
Equity in loss of unconsolidated entities	(25)	 		(26)	 		(39)	 		(51)	 	
Other (expense) income, net	(6,328)	 		153 	 		(5,955)	 		6,394 	 	
Homebuilding income before income taxes	70,728 	 		33,293 	 		110,361 	 		32,632 	 	
Financial Services:								
Revenues	2,296 	 		756 	 		3,890 	 		1,058 	 	
Expenses	1,285 	 		627 	 		2,364 	 		948 	 	
Equity in income of unconsolidated entities	2,932 	 		1,972 	 		4,488 	 		2,747 	 	
Financial services income before income taxes	3,943 	 		2,101 	 		6,014 	 		2,857 	 	
Income before income taxes	74,671 	 		35,394 	 		116,375 	 		35,489 	 	
Provision for income taxes	(18,143)	 		(9,132)	 		(27,964)	 		(9,156)	 	
Net income	$	56,528 	 		$	26,262 	 		$	88,411 	 		$	26,333 	 	

Earnings per share			 				 	
Basic	$	0.43 	 		$	0.18 	 		$	0.67 	 		$	0.19 	 	
Diluted	$	0.43 	 		$	0.18 	 		$	0.67 	 		$	0.18 	 	
Weighted average shares outstanding			 					
Basic	130,292,563 	 		142,244,166 	 		132,326,856 	 		142,055,766 	 	
Diluted	130,506,567 	 		142,471,191 	 		132,763,775 	 		142,431,725 	 	

Page 7

MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)

																																																
	Three Months Ended June 30,		Six Months Ended June 30,	
 	2020		2019		2020		2019	
	New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price	
New Homes Delivered:																
Maracay	165 	 		$	525 	 		106 	 		$	525 	 		305 	 		$	519 	 		180 	 		$	529 	 	
Pardee Homes	362 	 		669 	 		325 	 		599 	 		619 	 		680 	 		567 	 		581 	 	
Quadrant Homes	40 	 		916 	 		67 	 		1,051 	 		92 	 		871 	 		111 	 		1,024 	 	
Trendmaker Homes	254 	 		477 	 		250 	 		468 	 		463 	 		469 	 		404 	 		463 	 	
TRI Pointe Homes	292 	 		707 	 		281 	 		686 	 		518 	 		705 	 		523 	 		697 	 	
Winchester Homes	116 	 		635 	 		96 	 		642 	 		190 	 		632 	 		154 	 		615 	 	
Total	1,229 	 		$	624 	 		1,125 	 		$	615 	 		2,187 	 		$	623 	 		1,939 	 		$	611 	 	

	Three Months Ended June 30,		Six Months Ended June 30,	
	2020		2019		2020		2019	
	New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price		New
Homes
Delivered		Average
Sales
Price	
New Homes Delivered:																
California	490 	 		$	737 	 		408 	 		$	661 	 		829 	 		$	747 	 		736 	 		$	669 	 	
Colorado	55 	 		595 	 		81 	 		569 	 		119 	 		580 	 		153 	 		559 	 	
Maryland	75 	 		556 	 		68 	 		533 	 		130 	 		558 	 		106 	 		509 	 	
Virginia	41 	 		777 	 		28 	 		906 	 		60 	 		791 	 		48 	 		849 	 	
Arizona	165 	 		525 	 		106 	 		525 	 		305 	 		519 	 		180 	 		529 	 	
Nevada	109 	 		505 	 		117 	 		613 	 		189 	 		515 	 		201 	 		578 	 	
Texas	254 	 		477 	 		250 	 		468 	 		463 	 		469 	 		404 	 		463 	 	
Washington	40 	 		916 	 		67 	 		1,051 	 		92 	 		871 	 		111 	 		1,024 	 	
Total	1,229 	 		$	624 	 		1,125 	 		$	615 	 		2,187 	 		$	623 	 		1,939 	 		$	611 	 	

Page 8

MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)

																																																
	Three Months Ended June 30,		Six Months Ended June 30,	
 	2020		2019		2020		2019	
	Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities	
Net New Home Orders:																
Maracay	162 	 		19.0 	 		253 	 		15.0 	 		402 	 		16.9 	 		414 	 		13.4 	 	
Pardee Homes	423 	 		44.0 	 		522 	 		44.5 	 		898 	 		43.0 	 		955 	 		44.4 	 	
Quadrant Homes	105 	 		9.5 	 		67 	 		6.5 	 		231 	 		8.3 	 		142 	 		6.9 	 	
Trendmaker Homes	205 	 		29.8 	 		247 	 		37.5 	 		439 	 		30.1 	 		490 	 		38.6 	 	
TRI Pointe Homes	327 	 		30.3 	 		294 	 		28.5 	 		741 	 		31.4 	 		589 	 		29.6 	 	
Winchester Homes	110 	 		11.7 	 		108 	 		14.0 	 		282 	 		12.7 	 		222 	 		14.1 	 	
Total	1,332 	 		144.3 	 		1,491 	 		146.0 	 		2,993 	 		142.4 	 		2,812 	 		147.0 	 	

	Three Months Ended June 30,		Six Months Ended June 30,	
	2020		2019		2020		2019	
	Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities		Net New
Home
Orders		Average
Selling
Communities	
Net New Home Orders:																
California	598 	 		54.0 	 		616 	 		54.0 	 		1,262 	 		54.9 	 		1,133 	 		54.3 	 	
Colorado	50 	 		3.8 	 		56 	 		6.3 	 		109 	 		4.1 	 		137 	 		6.6 	 	
Maryland	80 	 		8.5 	 		84 	 		10.0 	 		203 	 		9.1 	 		168 	 		9.9 	 	
Virginia	30 	 		3.3 	 		24 	 		4.0 	 		79 	 		3.6 	 		54 	 		4.2 	 	
Arizona	162 	 		19.0 	 		253 	 		15.0 	 		402 	 		16.9 	 		414 	 		13.4 	 	
Nevada	102 	 		16.5 	 		144 	 		12.7 	 		268 	 		15.4 	 		274 	 		13.1 	 	
Texas	205 	 		29.7 	 		247 	 		37.5 	 		439 	 		30.1 	 		490 	 		38.6 	 	
Washington	105 	 		9.5 	 		67 	 		6.5 	 		231 	 		8.3 	 		142 	 		6.9 	 	
Total	1,332 	 		144.3 	 		1,491 	 		146.0 	 		2,993 	 		142.4 	 		2,812 	 		147.0 	 	

Page 9

MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)

																																				
 	As of June 30, 2020		As of June 30, 2019	
	Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price		Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price	
Backlog:												
Maracay	427 	 		$	255,916 	 		$	599 	 		385 	 		$	211,935 	 		$	550 	 	
Pardee Homes	739 	 		494,785 	 		670 	 		790 	 		602,054 	 		762 	 	
Quadrant Homes	228 	 		213,093 	 		935 	 		77 	 		65,968 	 		857 	 	
Trendmaker Homes	321 	 		146,650 	 		457 	 		399 	 		195,871 	 		491 	 	
TRI Pointe Homes	552 	 		383,826 	 		695 	 		384 	 		252,708 	 		658 	 	
Winchester Homes	291 	 		184,798 	 		635 	 		173 	 		110,012 	 		636 	 	
Total	2,558 	 		$	1,679,068 	 		$	656 	 		2,208 	 		$	1,438,548 	 		$	652 	 	

	As of June 30, 2020		As of June 30, 2019	
	Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price		Backlog
Units		Backlog
Dollar
Value		Average
Sales
Price	
Backlog:												
California	985 	 		$	689,789 	 		$	700 	 		853 	 		$	671,695 	 		$	787 	 	
Colorado	90 	 		54,170 	 		602 	 		128 	 		73,429 	 		574 	 	
Maryland	190 	 		108,856 	 		573 	 		123 	 		63,321 	 		515 	 	
Virginia	101 	 		75,942 	 		752 	 		50 	 		46,691 	 		934 	 	
Arizona	427 	 		255,916 	 		599 	 		385 	 		211,935 	 		550 	 	
Nevada	216 	 		134,652 	 		623 	 		193 	 		109,638 	 		568 	 	
Texas	321 	 		146,650 	 		457 	 		399 	 		195,871 	 		491 	 	
Washington	228 	 		213,093 	 		935 	 		77 	 		65,968 	 		857 	 	
Total	2,558 	 		$	1,679,068 	 		$	656 	 		2,208 	 		$	1,438,548 	 		$	652 	 	

 
Page 10

MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)

												
	June 30,		December 31,	
	2020		2019	
Lots Owned or Controlled(1):				
Maracay	3,490 	 		3,730 	 	
Pardee Homes	12,950 	 		13,267 	 	
Quadrant Homes	1,010 	 		1,103 	 	
Trendmaker Homes	4,213 	 		4,034 	 	
TRI Pointe Homes	6,369 	 		6,170 	 	
Winchester Homes	1,768 	 		1,725 	 	
Total	29,800 	 		30,029 	 	

	June 30,		December 31,	
	2020		2019	
Lots Owned or Controlled(1):				
California	14,148 	 		14,677 	 	
Colorado	1,126 	 		1,033 	 	
Maryland	1,050 	 		1,140 	 	
Virginia	718 	 		585 	 	
Arizona	3,490 	 		3,730 	 	
Nevada	2,024 	 		2,026 	 	
North Carolina	1,909 	 		1,590 	 	
South Carolina	112 	 		111 	 	
Texas	4,213 	 		4,034 	 	
Washington	1,010 	 		1,103 	 	
Total	29,800 	 		30,029 	 	

	June 30,		December 31,	
	2020		2019	
Lots by Ownership Type:				
Lots owned	21,749 	 		22,845 	 	
Lots controlled(1)	8,051 	 		7,184 	 	
Total	29,800 	 		30,029 	 	
__________
(1) As of June 30, 2020 and December 31, 2019, lots controlled included lots that were under land option contracts or purchase contracts.

Page 11

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they 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.
The following tables reconcile homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.

																								
	Three Months Ended June 30,	
	2020		%		2019		%	
	(dollars in thousands)	
Home sales revenue	$	766,942 	 		100.0 	%		$	692,138 	 		100.0 	%	
Cost of home sales	601,434 	 		78.4 	%		574,684 	 		83.0 	%	
Homebuilding gross margin	165,508 	 		21.6 	%		117,454 	 		17.0 	%	
Add:  interest in cost of home sales	21,801 	 		2.8 	%		18,071 	 		2.6 	%	
Add:  impairments and lot option abandonments	1,380 	 		0.2 	%		288 	 		0.0 	%	
Adjusted homebuilding gross margin	$	188,689 	 		24.6 	%		$	135,813 	 		19.6 	%	
Homebuilding gross margin percentage	21.6 	%		 		17.0 	%		 	
Adjusted homebuilding gross margin percentage	24.6 	%		 		19.6 	%		 	

																								
	Six Months Ended June 30,	
	2020		%		2019		%	
Home sales revenue	$	1,361,780 	 		100.0 	%		$	1,184,841 	 		100.0 	%	
Cost of home sales	1,074,316 	 		78.9 	%		996,220 	 		84.1 	%	
Homebuilding gross margin	287,464 	 		21.1 	%		188,621 	 		15.9 	%	
Add:  interest in cost of home sales	38,623 	 		2.8 	%		32,262 	 		2.7 	%	
Add:  impairments and lot option abandonments	1,729 	 		0.1 	%		5,490 	 		0.5 	%	
Adjusted homebuilding gross margin(1)	$	327,816 	 		24.1 	%		$	226,373 	 		19.1 	%	
Homebuilding gross margin percentage	21.1 	%				15.9 	%			
Adjusted homebuilding gross margin percentage(1)	24.1 	%				19.1 	%			

Page 12

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
 
The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.

												
	June 30, 2020		December 31, 2019	
Loans payable	$	250,000 	 		$	250,000 	 	
Senior notes	1,166,189 	 		1,033,985 	 	
Total debt	1,416,189 	 		1,283,985 	 	
Stockholders’ equity	2,175,799 	 		2,186,530 	 	
Total capital	$	3,591,988 	 		$	3,470,515 	 	
Ratio of debt-to-capital(1)	39.4 	%		37.0 	%	
				
Total debt	$	1,416,189 	 		$	1,283,985 	 	
Less: Cash and cash equivalents	(474,545)	 		(329,011)	 	
Net debt	941,644 	 		954,974 	 	
Stockholders’ equity	2,175,799 	 		2,186,530 	 	
Net capital	$	3,117,443 	 		$	3,141,504 	 	
Ratio of net debt-to-net capital(2)	30.2 	%		30.4 	%	
__________
(1) The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
(2) The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity.

Page 13

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
 
The following table calculates the non-GAAP financial measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income, as reported and prepared in accordance with GAAP. EBITDA means net income before (a) interest expense, (b) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation, (f) impairments and lot option abandonments, (g) early loan termination costs and (h) restructuring charges. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company’s ability to service debt and obtain financing.

	Three Months Ended June 30,		Six Months Ended June 30,	
	2020		2019		2020		2019	
	(in thousands)	
Net income	$	56,528 	 		$	26,262 	 		$	88,411 	 		$	26,333 	 	
Interest expense:								
Interest incurred	21,828 	 		21,962 	 		42,607 	 		45,335 	 	
Interest capitalized	(21,828)	 		(21,962)	 		(42,607)	 		(45,335)	 	
Amortization of interest in cost of sales	21,806 	 		18,107 	 		38,628 	 		32,440 	 	
Provision for income taxes	18,143 	 		9,132 	 		27,964 	 		9,156 	 	
Depreciation and amortization	6,720 	 		6,477 	 		12,176 	 		11,561 	 	
EBITDA	103,197 	 		59,978 	 		167,179 	 		79,490 	 	
Amortization of stock-based compensation	3,786 	 		3,351 	 		7,411 	 		6,786 	 	
Impairments and lot option abandonments	1,380 	 		288 	 		1,729 	 		5,490 	 	
Early loan termination costs	6,859 	 		— 	 		6,859 	 		— 	 	
Restructuring charges	5,549 	 		— 	 		5,549 	 		— 	 	
Adjusted EBITDA	$	120,771 	 		$	63,617 	 		$	188,727 	 		$	91,766 	 	

 

 

Page 14

 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)

 The following table contains information about our operating results reflecting certain adjustments to income before income taxes, (provision) benefit for income taxes, net income, net income available to common stockholders and earnings per share (diluted). We believe reflecting these adjustments is useful to investors in understanding our recurring operations by eliminating the varying effects of certain non-routine events, and may be helpful in comparing the Company to other homebuilders to the extent they provide similar information.

																																				
	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020	
	As Reported		Adjustments		Adjusted		As Reported		Adjustments		Adjusted	
	(in thousands, except per share amounts)	
Income before income taxes	$	74,671 	 		$	12,408 	 	(1)	$	87,079 	 		$	116,375 	 		$	12,408 	 	(1)	$	128,783 	 	
Provision for income taxes	(18,143)	 		(3,015)	 	(2)	(21,158)	 		(27,964)	 		(2,978)	 	(2)	(30,942)	 	

Net income	$	56,528 	 		$	9,393 	 		$	65,921 	 		$	88,411 	 		$	9,430 	 		$	97,841 	 	
Earnings per share												
Diluted	$	0.43 	 				$	0.51 	 		$	0.67 	 				$	0.74 	 	
Weighted average shares outstanding												
Diluted	130,507 	 				130,507 	 		132,764 	 				132,764 	 	
												
Effective tax rate	24.3 	%				24.3 	%		24.0 	%				24.0 	%	
_________
(1)Includes (i) a $6.9 million charge related to the early extinguishment of a portion of our Senior Notes due 2021, which is included in other (expense) income, net on our consolidated statements of operations, and (ii) $5.5 million of restructuring charges related to a workforce reduction plan.
(2)Includes a tax adjustment to reflect the higher pretax earnings associated with the aforementioned adjustments.
Page 15