UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________________________ 
FORM 10-Q
_____________________________________________________________________________________________ 
(Mark One)

		
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended September 30, 2016
or

		
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the transition period from              to             
Commission File Number 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   ☒     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   ☒     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	☒	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   ☒
Registrant’s shares of common stock outstanding at October 14, 2016: 160,064,678

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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:
		
•	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;	
		
•	“GAAP” refers to U.S. generally accepted accounting principles;	
		
•	“SEC” refers to the United States Securities and Exchange Commission;	
		
•	“Securities Act” refers to the Securities Act of 1933, as amended;	
		
•	“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 its acquisition by TRI Pointe on July 7, 2014, 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.	

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TRI POINTE GROUP, INC.
FORM 10-Q
INDEX
September 30, 2016

	
			
 	 	Page
Number	
PART I.  FINANCIAL INFORMATION	
 	 	 	
Item 1.	Financial Statements	3	
 	 	 	
 	Consolidated Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015	3	
 	 	 	
 	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)	4	
 	 	 	
 	Consolidated Statements of Equity for the Year Ended December 31, 2015 and the Nine Months Ended September 30, 2016 (unaudited)	5	
 	 	 	
 	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 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	34	
 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58	
 	 	 	
Item 4.	Controls and Procedures	58	
 	
Part II.  OTHER INFORMATION	
 	 	 	
Item 1.	Legal Proceedings	59	
 	 	 	
Item 1A.	Risk Factors	59	
 	 	 	
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59	
 	 	 	
Item 6.	Exhibits	60	
 	 	 	
SIGNATURES	62	

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PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	

TRI POINTE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	
								
 	September 30, 2016	 	December 31, 2015	
 	(unaudited)	 	 	
Assets	 	 	 	
Cash and cash equivalents	$	128,715		 	$	214,485		
Receivables	35,321		 	43,710		
Real estate inventories	2,969,148		 	2,519,273		
Investments in unconsolidated entities	17,205		 	18,999		
Goodwill and other intangible assets, net	161,629		 	162,029		
Deferred tax assets, net	111,887		 	130,657		
Other assets	65,998		 	48,918		
Total assets	$	3,489,903		 	$	3,138,071		
Liabilities	 	 	 	
Accounts payable	$	77,667		 	$	64,840		
Accrued expenses and other liabilities	219,396		 	216,263		
Unsecured revolving credit facility	200,000		 	299,392		
Seller financed loans	17,758		 	2,434		
Senior notes, net	1,166,724		 	868,679		
Total liabilities	1,681,545		 	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 September 30, 2016 and December 31, 2015,
   respectively	—		 	—		
Common stock, $0.01 par value, 500,000,000 shares authorized;
   160,064,678 and 161,813,750 shares issued and outstanding at
   September 30, 2016 and December 31, 2015, respectively	1,601		 	1,618		
Additional paid-in capital	894,681		 	911,197		
Retained earnings	889,178		 	751,868		
Total stockholders’ equity	1,785,460		 	1,664,683		
Noncontrolling interests	22,898		 	21,780		
Total equity	1,808,358		 	1,686,463		
Total liabilities and equity	$	3,489,903		 	$	3,138,071		
 
See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)

	
																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	578,653		 	$	642,352		 	$	1,558,633		 	$	1,443,855		
Land and lot sales revenue	2,535		 	4,876		 	70,204		 	74,366		
Other operations revenue	606		 	613		 	1,790		 	2,213		
Total revenues	581,794		 	647,841		 	1,630,627		 	1,520,434		
Cost of home sales	462,323		 	507,543		 	1,219,560		 	1,149,191		
Cost of land and lot sales	1,734		 	3,451		 	16,973		 	17,324		
Other operations expense	575		 	570		 	1,724		 	1,704		
Sales and marketing	31,852		 	30,038		 	90,621		 	78,958		
General and administrative	31,150		 	26,736		 	89,815		 	83,150		
Restructuring charges	128		 	2,010		 	478		 	2,730		
Homebuilding income from operations	54,032		 	77,493		 	211,456		 	187,377		
Equity in (loss) income of unconsolidated entities	(20	)	 	(150	)	 	181		 	(82	)	
Other income, net	21		 	47		 	287		 	272		
Homebuilding income before income taxes	54,033		 	77,390		 	211,924		 	187,567		
Financial Services:	 	 	 	 	 	 	 	
Revenues	235		 	300		 	762		 	482		
Expenses	72		 	47		 	183		 	131		
Equity in income (loss) of unconsolidated entities	1,247		 	147		 	3,246		 	(2	)	
Financial services income before income taxes	1,410		 	400		 	3,825		 	349		
Income before income taxes	55,443		 	77,790		 	215,749		 	187,916		
Provision for income taxes	(20,298	)	 	(28,021	)	 	(77,701	)	 	(66,088	)	
Net income	35,145		 	49,769		 	138,048		 	121,828		
Net (income) loss attributable to noncontrolling interests	(311	)	 	393		 	(738	)	 	(1,439	)	
Net income available to common stockholders	$	34,834		 	$	50,162		 	$	137,310		 	$	120,389		
Earnings per share	 		 	 		 	 	 	 	
Basic	$	0.22		 	$	0.31		 	$	0.85		 	$	0.74		
Diluted	$	0.22		 	$	0.31		 	$	0.85		 	$	0.74		
Weighted average shares outstanding	 	 	 	 	 	 	 	
Basic	160,614,055		 	161,772,893		 	161,456,520		 	161,651,177		
Diluted	161,267,509		 	162,366,744		 	161,916,352		 	162,299,282		
 
See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE GROUP, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(in thousands, except share amounts)

	
																											
 	Number of
Shares of Common
Stock (Note 1)	 	Common
Stock	 	Additional
Paid-in
Capital	 	Retained
Earnings	 	Total
Stockholders'
Equity	 	Noncontrolling
Interests	 	Total
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	—		 	—		 	—		 	137,310		 	137,310		 	738		 	138,048		
Shares issued under share-based awards	356,449		 	4		 	457		 	—		 	461		 	—		 	461		
Excess tax deficit of share-based awards, net	—		 	—		 	(170	)	 	—		 	(170	)	 	—		 	(170	)	
Minimum tax withholding paid on behalf of employees for restricted stock units	—		 	—		 	(1,359	)	 	—		 	(1,359	)	 	—		 	(1,359	)	
Stock-based compensation expense	—		 	—		 	9,648		 	—		 	9,648		 	—		 	9,648		
Share repurchases	(2,105,521	)	 	(21	)	 	(25,092	)	 	—		 	(25,113	)	 	—		 	(25,113	)	
Distributions to noncontrolling interests, net	—		 	—		 	—		 	—		 	—		 	(3,104	)	 	(3,104	)	
Net effect of consolidations, de-consolidations and other transactions	—		 	—		 	—		 	—		 	—		 	3,484		 	3,484		
Balance at September 30, 2016	160,064,678		 	$	1,601		 	$	894,681		 	$	889,178		 	$	1,785,460		 	$	22,898		 	$	1,808,358		
 
See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

	
								
 	Nine Months Ended September 30,	
 	2016	 	2015	
Cash flows from operating activities:	 	 	 	
Net income	$	138,048		 	$	121,828		
Adjustments to reconcile net income to net cash used in operating activities:	 	 	 	
Depreciation and amortization	2,322		 	5,416		
Equity in (income) loss of unconsolidated entities, net	(3,427	)	 	84		
Deferred income taxes, net	18,770		 	16,342		
Amortization of stock-based compensation	9,648		 	8,536		
Charges for impairments and lot option abandonments	678		 	1,903		
Excess tax deficit of share-based awards	(170	)	 	—		
Changes in assets and liabilities:	 	 	 	
Real estate inventories	(442,671	)	 	(305,889	)	
Receivables	8,549		 	(12,803	)	
Other assets	(16,806	)	 	25,490		
Accounts payable	12,827		 	(1,113	)	
Accrued expenses and other liabilities	5,876		 	195		
Returns on investments in unconsolidated entities, net	5,049		 	—		
Net cash used in operating activities	(261,307	)	 	(140,011	)	
Cash flows from investing activities:	 	 	 	
Purchases of property and equipment	(2,056	)	 	(1,059	)	
Investments in unconsolidated entities	(32	)	 	(1,458	)	
Distributions from unconsolidated entities	—		 	319		
Net cash used in investing activities	(2,088	)	 	(2,198	)	
Cash flows from financing activities:	 	 	 	
Borrowings from debt	491,069		 	140,000		
Repayment of debt	(276,826	)	 	(57,713	)	
Debt issuance costs	(5,061	)	 	(2,688	)	
Net repayments of debt held by variable interest entities	(2,442	)	 	(5,927	)	
Contributions from noncontrolling interests	1,955		 	4,281		
Distributions to noncontrolling interests	(5,059	)	 	(9,198	)	
Proceeds from issuance of common stock under share-based awards	461		 	1,616		
Excess tax benefit of share-based awards	—		 	392		
Minimum tax withholding paid on behalf of employees for share-based awards	(1,359	)	 	(2,190	)	
Share repurchases	(25,113	)	 	—		
Net cash provided by financing activities	177,625		 	68,573		
Net decrease in cash and cash equivalents	(85,770	)	 	(73,636	)	
Cash and cash equivalents - beginning of period	214,485		 	170,629		
Cash and cash equivalents - end of period	$	128,715		 	$	96,993		
 
See accompanying condensed notes to the unaudited consolidated financial statements.

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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 (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 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 September 30, 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.
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, including the Company's change in reportable segments to include the addition of our financial services operation in the fourth quarter of 2015. These reclassifications had no material impact on the Company's condensed consolidated financial statements.

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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, 2016.  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.

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In August 2016, the FASB issued Accounting Standards Update No. 2016-15, (“ASU 2016-15”), Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments, which provides guidance on how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact that adoption of ASU 2016-15 may have on our consolidated financial statements and disclosures.

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

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Employee-related charges	$	5		 	$	1,433		 	$	30		 	$	1,568		
Lease termination charges	123		 	577		 	448		 	1,162		
Total	$	128		 	$	2,010		 	$	478		 	$	2,730		

Employee-related charges for the three and nine months ended September 30, 2016 and 2015 relate to severance-related expenses for employees terminated during the period.  Lease termination charges for the three and nine months ended September 30, 2016 , and 2015 relate to contract terminations and 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 September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Accrued employee-related charges, beginning of period	$	100		 	$	109		 	$	220		 	$	3,844		
Current year charges	5		 	1,433		 	30		 	1,568		
Payments	(20	)	 	(1,087	)	 	(165	)	 	(4,957	)	
Accrued employee-related charges, end of period	$	85		 	$	455		 	$	85		 	$	455		
 
Changes in lease termination related restructuring reserves were as follows (in thousands):

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Accrued lease termination charges, beginning of period	$	447		 	$	644		 	$	767		 	$	1,394		
Current year charges	123		 	577		 	448		 	1,162		
Payments	(352	)	 	(705	)	 	(997	)	 	(2,040	)	
Accrued lease termination charges, end of period	$	218		 	$	516		 	$	218		 	$	516		
 
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 brands 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

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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 originations that help 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.

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

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Revenues	 	 	 	 	 	 	 	
Maracay Homes	$	68,024		 	$	50,505		 	$	161,318		 	$	116,556		
Pardee Homes	188,148		 	172,957		 	547,311		 	424,680		
Quadrant Homes	48,354		 	48,173		 	153,575		 	132,698		
Trendmaker Homes	64,251		 	81,044		 	172,509		 	203,235		
TRI Pointe Homes	167,769		 	224,244		 	452,553		 	461,654		
Winchester Homes	45,248		 	70,918		 	143,361		 	181,611		
Total homebuilding revenues	581,794		 	647,841		 	1,630,627		 	1,520,434		
Financial services	235		 	300		 	762		 	482		
Total	$	582,029		 	$	648,141		 	$	1,631,389		 	$	1,520,916		
 	 	 	 	 	 	 	 	
Income (loss) before income taxes	 	 	 	 	 	 	 	
Maracay Homes	$	4,385		 	$	3,687		 	$	9,544		 	$	5,820		
Pardee Homes	37,508		 	39,776		 	165,718		 	121,112		
Quadrant Homes	5,497		 	3,850		 	14,808		 	6,176		
Trendmaker Homes	3,516		 	7,214		 	9,439		 	17,525		
TRI Pointe Homes	11,723		 	29,561		 	34,651		 	55,295		
Winchester Homes	1,692		 	1,557		 	6,345		 	7,948		
Corporate	(10,288	)	 	(8,255	)	 	(28,581	)	 	(26,309	)	
Total homebuilding income before income taxes	54,033		 	77,390		 	211,924		 	187,567		
Financial services	1,410		 	400		 	3,825		 	349		
Total	$	55,443		 	$	77,790		 	$	215,749		 	$	187,916		

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

								
 	September 30, 2016	 	December 31, 2015	
Real estate inventories	 	 	 	
Maracay Homes	$	252,094		 	$	206,912		
Pardee Homes	1,109,262		 	1,011,982		
Quadrant Homes	217,430		 	190,038		
Trendmaker Homes	221,201		 	199,398		
TRI Pointe Homes	877,941		 	659,130		
Winchester Homes	291,220		 	251,813		
Total	$	2,969,148		 	$	2,519,273		
 	 	 	 	
Total assets	 	 	 	
Maracay Homes	$	272,928		 	$	227,857		
Pardee Homes	1,182,282		 	1,089,586		
Quadrant Homes	237,959		 	202,024		
Trendmaker Homes	236,618		 	213,562		
TRI Pointe Homes	1,047,975		 	832,423		
Winchester Homes	314,069		 	278,374		
Corporate	192,654		 	292,169		
Total homebuilding assets	3,484,485		 	3,135,995		
Financial services	5,418		 	2,076		
Total	$	3,489,903		 	$	3,138,071		

		
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 September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Numerator:	 		 	 		 	 		 	 		
Net income available to common stockholders	$	34,834		 	$	50,162		 	$	137,310		 	$	120,389		
Denominator:	 		 	 		 	 		 	 		
Basic weighted-average shares outstanding	160,614,055		 	161,772,893		 	161,456,520		 	161,651,177		
Effect of dilutive shares:	 		 	 	 	 		 	 		
Stock options and unvested restricted stock units	653,454		 	593,851		 	459,832		 	648,105		
Diluted weighted-average shares outstanding	161,267,509		 	162,366,744		 	161,916,352		 	162,299,282		
Earnings per share	 		 	 		 	 		 	 		
Basic	$	0.22		 	$	0.31		 	$	0.85		 	$	0.74		
Diluted	$	0.22		 	$	0.31		 	$	0.85		 	$	0.74		
Antidilutive stock options and unvested restricted stock not included in diluted earnings per share	3,806,396		 	2,260,532		 	4,551,337		 	2,462,268		

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5.	Receivables	
Receivables consisted of the following (in thousands):

								
 	September 30, 2016	 	December 31, 2015	
Escrow proceeds and other accounts receivable, net	$	25,619		 	$	32,917		
Warranty insurance receivable (Note 14)	9,702		 	10,493		
Notes and contracts receivable	—		 	300		
Total receivables	$	35,321		 	$	43,710		

		
6.	Real Estate Inventories	
Real estate inventories consisted of the following (in thousands):

								
 	September 30, 2016	 	December 31, 2015	
Real estate inventories owned:	 	 	 	
Homes completed or under construction	$	757,707		 	$	575,076		
Land under development	1,720,126		 	1,443,461		
Land held for future development	298,841		 	295,241		
Model homes	140,566		 	140,232		
Total real estate inventories owned	2,917,240		 	2,454,010		
Real estate inventories not owned:	 	 	 	
Land purchase and land option deposits	29,608		 	39,055		
Consolidated inventory held by VIEs	22,300		 	26,208		
Total real estate inventories not owned	51,908		 	65,263		
Total real estate inventories	$	2,969,148		 	$	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 and lot option agreements as well as consolidated inventory held by variable interest entities. For further details, see Note 8, Variable Interest Entities .
In June of 2016, our Pardee Homes reporting segment sold two parcels, totaling 102 homebuilding lots, located in the Pacific Highlands Ranch community in San Diego, California. The land sold in these sales were classified as land under development and represented $61.6 million of land and lot sales revenue in the consolidated statements of operations for the nine months ended September 30, 2016 .
Interest incurred, capitalized and expensed were as follows (in thousands):

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Interest incurred	$	18,601		 	$	15,454		 	$	50,030		 	$	45,779		
Interest capitalized	(18,601	)	 	(15,454	)	 	(50,030	)	 	(45,779	)	
Interest expensed	$	—		 	$	—		 	$	—		 	$	—		
Capitalized interest in beginning inventory	$	151,347		 	$	140,106		 	$	140,311		 	$	124,461		
Interest capitalized as a cost of inventory	18,601		 	15,454		 	50,030		 	45,779		
Interest previously capitalized as a cost of inventory,
   included in cost of sales	(14,415	)	 	(13,339	)	 	(34,808	)	 	(28,019	)	
Capitalized interest in ending inventory	$	155,533		 	$	142,221		 	$	155,533		 	$	142,221		

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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 or cost of land and lot sales as related units or lots 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 September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Real estate inventory impairments	$	—		 	$	29		 	$	—		 	$	1,073		
Land and lot option abandonments and pre-acquisition charges	389		 	336		 	678		 	830		
Total	$	389		 	$	365		 	$	678		 	$	1,903		
 
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.
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 September 30, 2016 , we held equity investments in five 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):

								
 	September 30, 2016	 	December 31, 2015	
Limited liability company interests	$	13,946		 	$	15,739		
General partnership interests	3,259		 	3,260		
Total	$	17,205		 	$	18,999		
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 investments in unconsolidated entities or on our consolidated statements of operations as equity in income (loss) of unconsolidated entities.

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Assets and liabilities of unconsolidated entities (in thousands):

	
								
 	September 30, 2016	 	December 31, 2015	
Assets	 	 	 	
Cash	$	11,945		 	$	18,641		
Receivables	10,038		 	13,108		
Real estate inventories	96,654		 	92,881		
Other assets	1,065		 	1,180		
Total assets	$	119,702		 	$	125,810		
Liabilities and equity	 	 	 	
Accounts payable and other liabilities	$	12,932		 	$	14,443		
Company’s equity	17,205		 	18,999		
Outside interests' equity	89,565		 	92,368		
Total liabilities and equity	$	119,702		 	$	125,810		
 
Results of operations from unconsolidated entities (in thousands):

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Net sales	$	4,619		 	$	1,217		 	$	12,516		 	$	2,670		
Other operating expense	(2,913	)	 	(1,479	)	 	(8,067	)	 	(4,020	)	
Other income (loss)	1		 	(263	)	 	3		 	(256	)	
Net income (loss)	$	1,707		 	$	(525	)	 	$	4,452		 	$	(1,606	)	
Company’s equity in income (loss) of unconsolidated entities	$	1,227		 	$	(3	)	 	$	3,427		 	$	(84	)	

8.	Variable Interest Entities	
In the ordinary course of business, we enter into land and lot option agreements in order to procure land and residential lots for future development and the construction of homes. The use of such land and lot 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 and lot 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 and lot 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 and lot option agreements have no recourse against us. The maximum exposure to loss under our land and lot 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.

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

																								
 	September 30, 2016	 	December 31, 2015	
 	Deposits	 	Remaining
Purchase
Price	 	Consolidated
Inventory
Held by VIEs	 	Deposits	 	Remaining
Purchase
Price	 	Consolidated
Inventory
Held by VIEs	
Consolidated VIEs	$	600		 	$	21,700		 	$	22,300		 	$	3,003		 	$	23,239		 	$	26,208		
Unconsolidated VIEs	2,170		 	58,135		 	N/A		 	11,615		 	74,590		 	N/A		
Other land option agreements	27,438		 	365,224		 	N/A		 	27,440		 	279,612		 	N/A		
Total	$	30,208		 	$	445,059		 	$	22,300		 	$	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 and lot option agreements were not considered VIEs.
In addition to the deposits presented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $4.7 million and $5.0 million as of September 30, 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	
As of September 30, 2016 and December 31, 2015 , $139.3 million of goodwill is included in goodwill and other intangible assets, net on each of the consolidated balance sheets. The Company's goodwill balance is included in the TRI Pointe Homes reporting segment in Note 3, Segment Information . 
We have two intangible assets recorded as of September 30, 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 acquisition of WRECO in 2014, which has an indefinite useful life.
Goodwill and other intangible assets consisted of the following (in thousands):

																								
 	September 30, 2016	 	December 31, 2015	
 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net
Carrying
Amount	 	Gross
Carrying
Amount	 	Accumulated
Amortization	 	Net
Carrying
Amount	
Goodwill	$	139,304		 	$	—		 	$	139,304		 	$	139,304		 	$	—		 	$	139,304		
Trade names	27,979		 	(5,654	)	 	22,325		 	27,979		 	(5,254	)	 	22,725		
Total	$	167,283		 	$	(5,654	)	 	$	161,629		 	$	167,283		 	$	(5,254	)	 	$	162,029		
 
The remaining useful life of our amortizing intangible asset related to the Maracay Homes trade name was 9.4 and 10.2 years as of September 30, 2016 and December 31, 2015 , respectively. Amortization expense related to this intangible asset was $133,000 for each of the three month periods ended September 30, 2016 and 2015 , respectively and was $400,000 for each of the nine month periods ended September 30, 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	$	134		
2017	534		
2018	534		
2019	534		
2020	534		
Thereafter	2,755		
Total	$	5,025		

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10.	Other Assets	
Other assets consisted of the following (in thousands):

								
 	September 30, 2016	 	December 31, 2015	
Prepaid expenses	$	14,899		 	$	14,523		
Refundable fees and other deposits	21,695		 	17,056		
Development rights, held for future use or sale	4,227		 	4,360		
Deferred loan costs - unsecured revolving credit facility	2,319		 	2,179		
Operating properties and equipment, net	9,525		 	7,643		
Income tax receivable	10,633		 	—		
Other	2,700		 	3,157		
Total	$	65,998		 	$	48,918		

		
11.	Accrued Expenses and Other Liabilities	
Accrued expenses and other liabilities consisted of the following (in thousands):

								
 	September 30, 2016	 	December 31, 2015	
Accrued payroll and related costs	$	23,126		 	$	28,264		
Warranty reserves (Note 14)	45,665		 	45,948		
Estimated cost for completion of real estate inventories	53,218		 	52,818		
Customer deposits	19,428		 	12,132		
Debt (nonrecourse) held by VIEs	—		 	2,442		
Income tax liability to Weyerhaeuser (Note 17)	8,999		 	8,900		
Accrued income taxes payable	—		 	19,279		
Liability for uncertain tax positions (Note 17)	—		 	307		
Accrued interest	19,240		 	2,417		
Accrued insurance expense	2,529		 	1,402		
Other tax liability	30,459		 	21,764		
Other	16,732		 	20,590		
Total	$	219,396		 	$	216,263		

		
12.	Senior Notes, Unsecured Revolving Credit Facility and Seller Financed Loans	
Senior Notes
The Senior Notes consisted of the following (in thousands):

	
								
 	September 30, 2016	 	December 31, 2015	
4.375% Senior Notes due June 15, 2019	$	450,000		 	$	450,000		
4.875% Senior Notes due July 1, 2021	300,000		 	—		
5.875% Senior Notes due June 15, 2024	450,000		 	450,000		
Discount and deferred loan costs	(33,276	)	 	(31,321	)	
Total	$	1,166,724		 	$	868,679		
 
In May 2016, TRI Pointe Group issued $300 million aggregate principal amount of 4.875% Senior Notes due 2021 (the "2021 Notes") at 99.44% of their aggregate principal amount. Net proceeds of this issuance were $293.9 million , after debt issuance costs and discounts. The 2021 Notes mature on July 1, 2021 and interest is paid semiannually in arrears on January 1 and July 1.

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TRI Pointe Group and TRI Pointe Homes are co-issuers of the 2019 Notes and the 2024 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 from the offering were $861.3 million , after debt issuance costs and discounts. 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 September 30, 2016 , no principal has been paid on the 2019 Notes, 2021 Notes and 2024 Notes (together, the "Senior Notes"), and there was $22.0 million of capitalized debt financing costs, included in senior notes, net 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 $18.6 million and $1.9 million as of September 30, 2016 and December 31, 2015 , respectively.
Unsecured Revolving Credit Facility
Unsecured revolving credit facility consisted of the following (in thousands):

								
 	September 30, 2016	 	December 31, 2015	
Unsecured revolving credit facility	$	200,000		 	$	299,392		
 
On April 28, 2016, the Company partially exercised the accordion feature under its existing unsecured revolving credit facility (the “Credit Facility”) to increase the total commitments under the Credit Facility to $625 million from $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 acquisition, 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 September 30, 2016 , the outstanding balance under the Credit Facility was $200.0 million with an interest rate of 2.28%  per annum and $420.7 million of availability after considering the borrowing base provisions and outstanding letters of credit.  As of September 30, 2016 there was $2.3 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 $645,000 and $407,000 as of September 30, 2016 and December 31, 2015 , respectively.
At September 30, 2016 we had outstanding letters of credit of $4.3 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):

								
 	September 30, 2016	 	December 31, 2015	
Seller financed loans	$	17,758		 	$	2,434		
 
As of September 30, 2016 , the Company had $17.8 million outstanding related to a seller financed loan to acquire land and lots for the construction of homes. Principal and interest payments on this loan are due at various maturity dates, including at the time individual homes associated with the acquired land are delivered. As of September 30, 2016 , the seller financed loan accrues interest at a rate of 7.0% per annum, with interest calculated on a daily basis. A minimum principal payment of $12.1 million is due in June 2017 with any remaining unpaid balance due in June 2018. Accrued interest on seller financed loans was $359,000 and $89,000 as of September 30, 2016 and December 31, 2015 , respectively.

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Interest Incurred
During the three month periods ended September 30, 2016 and 2015 , the Company incurred interest of $18.6 million and $15.5 million , respectively, related to all debt during the period. All interest incurred was capitalized to inventory for the three month periods ended September 30, 2016 and 2015 , respectively. Included in interest incurred was amortization of deferred financing and Senior Notes discount costs of $1.8 million and $1.5 million for the three months ended September 30, 2016 and 2015 , respectively.  During the nine month periods ended September 30, 2016 and 2015 , the Company incurred interest of $50.0 million and $45.8 million , respectively, related to all debt during the period. All interest incurred was capitalized to inventory for the nine month periods ended September 30, 2016 and 2015, respectively. Included in interest incurred was amortization of deferred financing and Senior Notes discount costs of $4.7 million and $3.9 million for the nine months ended September 30, 2016 and 2015 , respectively.  Accrued interest related to all outstanding debt at September 30, 2016 and December 31, 2015 was $19.2 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 September 30, 2016 and December 31, 2015 .

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	

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Fair Value of Financial Instruments
A summary of assets and liabilities at September 30, 2016 and December 31, 2015 , related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

																		
 	 	 	September 30, 2016	 	December 31, 2015	
 	Hierarchy	 	Book Value	 	Fair Value	 	Book Value	 	Fair Value	
Senior Notes (1)	Level 2	 	$	1,188,686		 	$	1,235,250		 	$	889,054		 	$	881,460		
Unsecured revolving credit facility (2)	Level 2	 	$	200,000		 	$	192,772		 	$	299,392		 	$	299,392		
Seller financed loans (3)	Level 2	 	$	17,758		 	$	17,758		 	$	2,434		 	$	2,368		
  __________
		
(1)  	The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $22.0 million and $20.4 million as of September 30, 2016 and December 31, 2015 , respectively. The estimated fair value of the Senior Notes at September 30, 2016 and December 31, 2015 is based on quoted market prices.	
		
(2)  	The estimated fair value of the Credit Facility at September 30, 2016 is based on a treasury curve analysis. We believe that the carrying value of the Credit Facility approximated fair value at December 31, 2015 due to the short term nature of the current rate amended on May 18, 2015.	
		
(3)  	The estimated fair value of the seller financed loans at September 30, 2016 and December 31, 2015 is based on a treasury curve analysis.	

At September 30, 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):

																
 	Nine Months Ended September 30, 2016	 	Year Ended December 31, 2015	
 	Impairment
Charge	 	Fair Value
Net of
Impairment	 	Impairment
Charge	 	Fair Value
Net of
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, environmental protection and financial services. As a result, we are subject to periodic examinations or inquiry by agencies administering these laws and regulations.
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, we had legal reserves of $225,000 and $450,000 as of September 30, 2016 and December 31, 2015 , respectively.

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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 a significant majority of our subcontractors, which are enrolled in 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, management estimates warranty reserves and allowances necessary to cover any current or future construction-related claims based on actuarial analysis. Under this analysis, reserve amounts are estimated using our historical expense and claim data, as well as industry data. In addition, we record expected recoveries from insurance carriers when proceeds are probable and estimable.  Outstanding warranty insurance receivables were $9.7 million and $10.5 million as of September 30, 2016 and December 31, 2015 , respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheets.
There can be no assurance that our warranty reserves will sufficiently cover the costs of future warranty 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 September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Warranty reserves, beginning of period	$	45,272		 	$	35,375		 	$	45,948		 	$	33,270		
Warranty reserves accrued	3,329		 	4,201		 	8,373		 	10,427		
Adjustments to pre-existing reserves	200		 	(14	)	 	460		 	1,286		
Warranty expenditures	(3,136	)	 	(2,819	)	 	(9,116	)	 	(8,240	)	
Warranty reserves, end of period	$	45,665		 	$	36,743		 	$	45,665		 	$	36,743		
Performance Bonds
We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. As of September 30, 2016 and December 31, 2015 , the Company had outstanding surety bonds totaling $433.6 million and $414.1 million , respectively. The beneficiaries of the bonds are various municipalities.

- 20 -

		
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 and 2015. In addition, our board of directors amended the 2013 Incentive Plan in 2014 to prohibit repricing (other than in connection with any equity restructuring or any change in capitalization) of outstanding options or stock appreciation rights without stockholder approval. The 2013 Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, bonus 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.
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 September 30, 2016 there were 7,604,642 shares available for future grant under the 2013 Incentive Plan.
Converted Awards
On July 16, 2014, the Company filed a registration statement on Form S-8 (Registration No. 333-197461) to register 4,105,953 shares of common stock related to converted equity awards issued in connection with the Company's acquisition of WRECO. The converted awards have the same terms and conditions as the prior 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 an exchange ratio of 2.1107 , rounded down to the nearest whole number of shares of common stock. 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 September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Total stock-based compensation	$	3,285		 	$	2,994		 	$	9,648		 	$	8,536		
 
Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations.  As of September 30, 2016 , total unrecognized stock-based compensation related to all stock-based awards was $20.3 million and the weighted average term over which the expense was expected to be recognized was 1.9 years .
Summary of Stock Option Activity
The following table presents a summary of stock option awards for the nine months ended September 30, 2016 :

														
 	Options	 	Weighted
Average
Exercise
Price
Per Share	 	Weighted
Average
Remaining
Contractual
Life	 	Aggregate
Intrinsic
Value
(in thousands)	
Options outstanding at December 31, 2015	3,220,147		 	$	13.12		 	5.2		 	$	3,081		
Granted	—		 	—		 	—		 	—		
Exercised	(79,689	)	 	9.89		 	—		 	—		
Forfeited	(155,380	)	 	12.39		 	—		 	—		
Options outstanding at September 30, 2016	2,985,078		 	13.24		 	4.6		 	3,282		
Options exercisable at September 30, 2016	2,616,544		 	13.05		 	4.3		 	3,282		

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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.

Summary of Restricted Stock Unit Activity
The following table presents a summary of restricted stock units (“RSUs”) for the nine months ended September 30, 2016 :

											
 	Restricted
Stock
Units	 	Weighted
Average
Grant Date
Fair Value
Per Share	 	Aggregate
Intrinsic
Value
(in thousands)	
Nonvested RSUs at December 31, 2015	1,958,033		 	$	12.21		 	$	24,808		
Granted	1,904,389		 	8.41		 	25,100		
Vested	(431,758	)	 	14.53		 	—		
Forfeited	(19,781	)	 	12.17		 	—		
Nonvested RSUs at September 30, 2016	3,410,883		 	9.77		 	44,993		
 
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 years 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 vested in their entirety on June 6, 2016. 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 was 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.

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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.
On June 6, 2016, the Company granted an aggregate of 74,466 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 2017 Annual Meeting of Stockholders. The fair value of each RSU granted on June 6, 2016 was measured using a price of $11.75 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.
As RSUs vest for employees, 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.

16.	Stock Repurchase Program	
On January 27, 2016, the Company announced that the board of directors approved a stock repurchase program, authorizing the repurchase of the Company’s 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.  We are not obligated under the program to repurchase any specific number or amount of shares of common stock, 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. For the three months ended September 30, 2016 , 852,500 shares of our common stock were repurchased and retired under this program at an average price of $12.22 per share for a total cost of $10.4 million . For the nine months ended September 30, 2016 , 2,105,521 shares of our common stock were repurchased and retired under this program at an average price of $11.93 per share for a total of cost of $25.1 million . Subsequent to September 30, 2016 and through the date of this filing, the Company repurchased and retired an additional 618,532 shares of our common stock under this program at an average price of $12.43 per share for a total cost of $7.7 million .

17.	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 $111.9 million and $130.7 million as of September 30, 2016 and December 31, 2015 , respectively.  We had a valuation allowance related to those net deferred tax assets of $3.5 million and $4.4 million as of September 30, 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.

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TRI Pointe has certain liabilities with Weyerhaeuser related to a tax sharing agreement.   As of September 30, 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 consolidated balance sheets.
Our provision for income taxes totaled $20.3 million and $28.0 million for the three months ended September 30, 2016 and 2015, respectively.  Our provision for income taxes totaled $77.7 million and $66.1 million for the nine months ended September 30, 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 zero and $307,000 of liabilities for uncertain tax positions recorded as of September 30, 2016 and December 31, 2015 , respectively.  The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

18.	Related Party Transactions	
In January of 2015, TRI Pointe acquired 46 lots located in Castle Rock, Colorado, for a purchase price of approximately $2.8 million , from an entity managed by an affiliate of Starwood Capital Group, a greater than 5% holder of our common stock. TRI Pointe’s Chairman of the Board is also the Chairman and Chief Executive Officer of Starwood Capital Group. This acquisition was approved by the TRI Pointe independent directors. In August of 2016, TRI Pointe entered into an agreement to purchase an additional 257 lots located in Castle Rock, Colorado, for a purchase price of approximately $8.6 million from an entity managed by an affiliate of Starwood Capital Group. This acquisition was approved by the TRI Pointe independent directors.
In October of 2015, TRI Pointe entered into an agreement with an affiliate of BlackRock, Inc. to acquire 161 lots located in Dublin, California, for a purchase price of approximately $60 million .  BlackRock, Inc. is a greater than five percent holder of our common stock. This acquisition was approved by the executive land committee, which was comprised of independent directors. In September of 2016, we acquired an additional 45 lots located in Dublin, California, for a purchase price of approximately $10.0 million from an affiliate of BlackRock, Inc. This acquisition was approved by a majority of the TRI Pointe independent directors.

19.	Supplemental Disclosure to Consolidated Statements of Cash Flows	
The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

								
 	Nine Months Ended September 30,	
 	2016	 	2015	
Supplemental disclosure of cash flow information:	 	 	 	
Cash paid during the period for:	 	 	 	
Interest, net of amounts capitalized of $50,030 and $45,779 (Note 6)	$	—		 	$	—		
Income taxes	$	89,269		 	$	44,394		
Supplemental disclosures of noncash activities:	 	 	 	
Amortization of senior note discount capitalized to real estate inventory	$	1,321		 	$	1,155		
Amortization of deferred loan costs capitalized to real estate inventory	$	2,865		 	$	2,690		
Effect of net consolidation and de-consolidation of variable interest entities:	 	 	 	
Increase (decrease) in consolidated real estate inventory not owned	$	3,484		 	$	(3,556	)	
Increase in deposits on real estate under option or contract and other assets	$	—		 	$	300		
(Increase) decrease in noncontrolling interests	$	(3,484	)	 	$	3,256		

- 24 -

		
20.	Supplemental Guarantor Information	
2021 Notes
On May 26, 2016, TRI Pointe Group issued the 2021 Notes. All of TRI Pointe Group’s 100% owned subsidiaries that are guarantors (each a “Guarantor” and, collectively, the “Guarantors”) of the Company’s Credit Facility, including TRI Pointe Homes and certain other of its 100% owned subsidiaries, are party to a supplemental indenture pursuant to which they jointly and severally guarantee TRI Pointe Group’s obligations with respect to the 2021 Notes. Each Guarantor of the 2021 Notes is 100% owned by TRI Pointe Group, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2021 Notes, as described in the following paragraph. All of our non-Guarantor subsidiaries have nominal assets and operations and are considered minor, as defined in Rule 3-10(h) of Regulation S-X. In addition, TRI Pointe Group has no independent assets or operations, as defined in Rule 3-10(h) of Regulation S-X. There are no significant restrictions upon the ability of TRI Pointe Group or any Guarantor to obtain funds from any of their respective wholly owned subsidiaries by dividend or loan. None of the assets of our subsidiaries represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X.
A Guarantor of the 2021 Notes shall be released from all of its obligations under its guarantee if (i) all of the assets of the Guarantor have been sold; (ii) all of the equity interests of the Guarantor held by TRI Pointe Group or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into TRI Pointe Group or another Guarantor, with TRI Pointe Group or such other Guarantor surviving the merger; (iv) the Guarantor is designated “unrestricted” for covenant purposes; (v) the Guarantor ceases to guarantee any indebtedness of TRI Pointe Group or any other Guarantor which gave rise to such Guarantor guaranteeing the 2021 Notes; (vi) TRI Pointe Group exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable supplemental indenture are discharged.
2019 Notes and 2024 Notes
TRI Pointe Group and TRI Pointe Homes are co-issuers of the 2019 Notes and the 2024 Notes. All of the Guarantors (other than TRI Pointe Homes) have entered into supplemental indentures pursuant to which they jointly and severally guarantee the obligations of TRI Pointe Group and TRI Pointe Homes with respect to the 2019 Notes and the 2024 Notes. Each Guarantor of the 2019 Notes and the 2024 Notes is 100% owned by TRI Pointe Group and TRI Pointe Homes, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2019 Notes and the 2024 Notes, as described below.
A Guarantor of the 2019 Notes and the 2024 Notes shall be released from all of its obligations under its guarantee if (i) all of the assets of the Guarantor have been sold; (ii) all of the equity interests of the Guarantor held by TRI Pointe or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into TRI Pointe or another Guarantor, with TRI Pointe or such other Guarantor surviving the merger; (iv) the Guarantor is designated “unrestricted” for covenant purposes; (v) the Guarantor ceases to guarantee any indebtedness of TRI Pointe or any other Guarantor which gave rise to such Guarantor guaranteeing the 2019 Notes and 2024 Notes; (vi) TRI Pointe exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable indenture are discharged.
Presented below are the condensed consolidating balance sheets at September 30, 2016 and December 31, 2015 , condensed consolidating statements of operations for the three and nine months ended September 30, 2016 and 2015 and condensed consolidating statement of cash flows for the nine month periods ended September 30, 2016 and 2015 .  Because TRI Pointe’s non-Guarantor subsidiaries are considered minor, as defined in Rule 3-10(h) of Regulation S-X, the non-Guarantor subsidiaries’ information is not separately presented in the tables below, but is included with the Guarantors. Additionally, because TRI Pointe Group has no independent assets or operations, as defined in Rule 3-10(h) of Regulation S-X, the condensed consolidated financial information of TRI Pointe Group and TRI Pointe Homes, the co-issuers of the 2019 Notes and 2024 Notes, is presented together in the column titled “Issuer” for all periods presented after July 7, 2015, the date of the Reorganization.

- 25 -

Condensed Consolidating Balance Sheet (in thousands):

	
																
 	September 30, 2016	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	61,073		 	$	67,642		 	$	—		 	$	128,715		
Receivables	12,496		 	22,825		 	—		 	35,321		
Intercompany receivables	856,866		 	—		 	(856,866	)	 	—		
Real estate inventories	877,940		 	2,091,208		 	—		 	2,969,148		
Investments in unconsolidated entities	—		 	17,205		 	—		 	17,205		
Goodwill and other intangible assets, net	156,604		 	5,025		 	—		 	161,629		
Investments in subsidiaries	1,241,559		 	—		 	(1,241,559	)	 	—		
Deferred tax assets, net	18,958		 	92,929		 	—		 	111,887		
Other assets	9,266		 	56,732		 	—		 	65,998		
Total Assets	$	3,234,762		 	$	2,353,566		 	$	(2,098,425	)	 	$	3,489,903		
 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	
Accounts payable	$	21,099		 	$	56,568		 	$	—		 	$	77,667		
Intercompany payables	—		 	856,866		 	(856,866	)	 	—		
Accrued expenses and other liabilities	43,721		 	175,675		 	—		 	219,396		
Unsecured revolving credit facility	200,000		 	—		 	—		 	200,000		
Seller financed loans	17,758		 	—		 	—		 	17,758		
Senior notes	1,166,724		 	—		 	—		 	1,166,724		
Total Liabilities	1,449,302		 	1,089,109		 	(856,866	)	 	1,681,545		
 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	
Total stockholders’ equity	1,785,460		 	1,241,559		 	(1,241,559	)	 	1,785,460		
Noncontrolling interests	—		 	22,898		 	—		 	22,898		
Total Equity	1,785,460		 	1,264,457		 	(1,241,559	)	 	1,808,358		
Total Liabilities and Equity	$	3,234,762		 	$	2,353,566		 	$	(2,098,425	)	 	$	3,489,903		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 26 -

Condensed Consolidating Balance Sheet (in thousands):

	
																
 	December 31, 2015	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
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 20 , 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 of the 2019 Notes and 2024 Notes	

- 27 -

Condensed Consolidating Statement of Operations (in thousands):

	
																
 	Three Months Ended September 30, 2016	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	167,769		 	$	410,884		 	$	—		 	$	578,653		
Land and lot sales revenue	—		 	2,535		 	—		 	2,535		
Other operations revenue	—		 	606		 	—		 	606		
Total revenues	167,769		 	414,025		 	—		 	581,794		
Cost of home sales	144,217		 	318,106		 	—		 	462,323		
Cost of land and lot sales	—		 	1,734		 	—		 	1,734		
Other operations expense	—		 	575		 	—		 	575		
Sales and marketing	6,598		 	25,254		 	—		 	31,852		
General and administrative	15,192		 	15,958		 	—		 	31,150		
Restructuring charges	—		 	128		 	—		 	128		
Homebuilding income from operations	1,762		 	52,270		 	—		 	54,032		
Equity in loss of unconsolidated entities	—		 	(20	)	 	—		 	(20	)	
Other (loss) income, net	(345	)	 	366		 	—		 	21		
Homebuilding income before income taxes	1,417		 	52,616		 	—		 	54,033		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	235		 	—		 	235		
Expenses	—		 	72		 	—		 	72		
Equity in income of unconsolidated entities	—		 	1,247		 	—		 	1,247		
Financial services income before income taxes	—		 	1,410		 	—		 	1,410		
Income before income taxes	1,417		 	54,026		 	—		 	55,443		
Equity of net income of subsidiaries	34,639		 	—		 	(34,639	)	 	—		
Provision for income taxes	(1,222	)	 	(19,076	)	 	—		 	(20,298	)	
Net income	34,834		 	34,950		 	(34,639	)	 	35,145		
Net income attributable to noncontrolling interests	—		 	(311	)	 	—		 	(311	)	
Net income available to common stockholders	$	34,834		 	$	34,639		 	$	(34,639	)	 	$	34,834		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 28 -

 
Condensed Consolidating Statement of Operations (in thousands):

	
																
 	Three Months Ended September 30, 2015	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	224,244		 	$	418,108		 	$	—		 	$	642,352		
Land and lot sales revenue	—		 	4,876		 	—		 	4,876		
Other operations revenue	—		 	613		 	—		 	613		
Total revenues	224,244		 	423,597		 	—		 	647,841		
Cost of home sales	182,754		 	324,789		 	—		 	507,543		
Cost of land and lot sales	—		 	3,451		 	—		 	3,451		
Other operations expense	—		 	570		 	—		 	570		
Sales and marketing	7,286		 	22,752		 	—		 	30,038		
General and administrative	12,942		 	13,794		 	—		 	26,736		
Restructuring charges	(83	)	 	2,093		 	—		 	2,010		
Homebuilding income from operations	21,345		 	56,148		 	—		 	77,493		
Equity in loss of unconsolidated entities	—		 	(150	)	 	—		 	(150	)	
Other (loss) income, net	(37	)	 	84		 	—		 	47		
Homebuilding income before income taxes	21,308		 	56,082		 	—		 	77,390		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	300		 	—		 	300		
Expenses	—		 	47		 	—		 	47		
Equity in income of unconsolidated entities	—		 	147		 	—		 	147		
Financial services income before income taxes	—		 	400		 	—		 	400		
Income before income taxes	21,308		 	56,482		 	—		 	77,790		
Equity of net income of subsidiaries	37,924		 	—		 	(37,924	)	 	—		
Provision for income taxes	(9,070	)	 	(18,951	)	 	—		 	(28,021	)	
Net income	50,162		 	37,531		 	(37,924	)	 	49,769		
Net income attributable to noncontrolling interests	—		 	393		 	—		 	393		
Net income available to common stockholders	$	50,162		 	$	37,924		 	$	(37,924	)	 	$	50,162		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 29 -

Condensed Consolidating Statement of Operations (in thousands):

																
 	Nine Months Ended September 30, 2016	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	452,553		 	$	1,106,080		 	$	—		 	$	1,558,633		
Land and lot sales revenue	—		 	70,204		 	—		 	70,204		
Other operations revenue	—		 	1,790		 	—		 	1,790		
Total revenues	452,553		 	1,178,074		 	—		 	1,630,627		
Cost of home sales	383,574		 	835,986		 	—		 	1,219,560		
Cost of land and lot sales	—		 	16,973		 	—		 	16,973		
Other operations expense	—		 	1,724		 	—		 	1,724		
Sales and marketing	19,683		 	70,938		 	—		 	90,621		
General and administrative	42,984		 	46,831		 	—		 	89,815		
Restructuring charges	—		 	478		 	—		 	478		
Homebuilding income from operations	6,312		 	205,144		 	—		 	211,456		
Equity in income of unconsolidated entities	—		 	181		 	—		 	181		
Other income, net	157		 	130		 	—		 	287		
Homebuilding income before income taxes	6,469		 	205,455		 	—		 	211,924		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	762		 	—		 	762		
Expenses	—		 	183		 	—		 	183		
Equity in income of unconsolidated entities	—		 	3,246		 	—		 	3,246		
Financial services income before income taxes	—		 	3,825		 	—		 	3,825		
Income before income taxes	6,469		 	209,280		 	—		 	215,749		
Equity of net income of subsidiaries	135,024		 	—		 	(135,024	)	 	—		
Provision for income taxes	(4,183	)	 	(73,518	)	 			 	(77,701	)	
Net income	137,310		 	135,762		 	(135,024	)	 	138,048		
Net income attributable to noncontrolling interests	—		 	(738	)	 	—		 	(738	)	
Net income available to common stockholders	$	137,310		 	$	135,024		 	$	(135,024	)	 	$	137,310		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 30 -

Condensed Consolidating Statement of Operations (in thousands):

																
 	Nine Months Ended September 30, 2015	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	461,654		 	$	982,201		 	$	—		 	$	1,443,855		
Land and lot sales revenue	—		 	74,366		 	—		 	74,366		
Other operations revenue	—		 	2,213		 	—		 	2,213		
Total revenues	461,654		 	1,058,780		 	—		 	1,520,434		
Cost of home sales	376,100		 	773,091		 	—		 	1,149,191		
Cost of land and lot sales	—		 	17,324		 	—		 	17,324		
Other operations expense	—		 	1,704		 	—		 	1,704		
Sales and marketing	17,714		 	61,244		 	—		 	78,958		
General and administrative	38,874		 	44,276		 	—		 	83,150		
Restructuring charges	(169	)	 	2,899		 	—		 	2,730		
Homebuilding income from operations	29,135		 	158,242		 	—		 	187,377		
Equity in loss of unconsolidated entities	—		 	(82	)	 	—		 	(82	)	
Other (loss) income, net	(149	)	 	421		 	—		 	272		
Homebuilding income before income taxes	28,986		 	158,581		 	—		 	187,567		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	482		 	—		 	482		
Expenses	—		 	131		 	—		 	131		
Equity in loss of unconsolidated entities	—		 	(2	)	 	—		 	(2	)	
Financial services loss before income taxes	—		 	349		 	—		 	349		
Income before income taxes	28,986		 	158,930		 	—		 	187,916		
Equity of net income of subsidiaries	103,688		 	—		 	(103,688	)	 	—		
Provision for income taxes	(12,285	)	 	(53,803	)	 	—		 	(66,088	)	
Net income	120,389		 	105,127		 	(103,688	)	 	121,828		
Net income attributable to noncontrolling interests	—		 	(1,439	)	 	—		 	(1,439	)	
Net income available to common stockholders	$	120,389		 	$	103,688		 	$	(103,688	)	 	$	120,389		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 31 -

Condensed Consolidating Statement of Cash Flows (in thousands):

	
																
 	Nine Months Ended September 30, 2016	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Cash flows from operating activities	 	 	 	 	 	 	 	
Net cash used in operating activities	$	(186,487	)	 	$	(74,820	)	 	$	—		 	$	(261,307	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Purchases of property and equipment	(831	)	 	(1,225	)	 	—		 	(2,056	)	
Investments in unconsolidated entities	—		 	(32	)	 	—		 	(32	)	
Intercompany	(82,951	)	 	—		 	82,951		 	—		
Net cash (used in) provided by investing activities	(83,782	)	 	(1,257	)	 	82,951		 	(2,088	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	
Borrowings from debt	491,069		 	—		 	—		 	491,069		
Repayment of debt	(276,426	)	 	(400	)	 	—		 	(276,826	)	
Debt issuance costs	(5,061	)	 	—		 	—		 	(5,061	)	
Net repayments of debt held by variable interest entities	—		 	(2,442	)	 	—		 	(2,442	)	
Contributions from noncontrolling interests	—		 	1,955		 	—		 	1,955		
Distributions to noncontrolling interests	—		 	(5,059	)	 	—		 	(5,059	)	
Proceeds from issuance of common stock under
   share-based awards	461		 	—		 	—		 	461		
Minimum tax withholding paid on behalf of employees for
   restricted stock units	(1,359	)	 	—		 	—		 	(1,359	)	
Share repurchases	(25,113	)	 	—		 	—		 	(25,113	)	
Intercompany	—		 	82,951		 	(82,951	)	 	—		
Net cash provided by (used in) financing activities	183,571		 	77,005		 	(82,951	)	 	177,625		
Net decrease in cash and cash equivalents	(86,698	)	 	928		 	—		 	(85,770	)	
Cash and cash equivalents - beginning of period	147,771		 	66,714		 	—		 	214,485		
Cash and cash equivalents - end of period	$	61,073		 	$	67,642		 	$	—		 	$	128,715		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 32 -

Condensed Consolidating Statement of Cash Flows (in thousands):

	
																
 	Nine Months Ended September 30, 2015	
 	Issuer (1)	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Cash flows from operating activities	 	 	 	 	 	 	 	
Net cash used in operating activities	$	(69,362	)	 	$	(70,649	)	 	$	—		 	$	(140,011	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Purchases of property and equipment	(382	)	 	(677	)	 	—		 	(1,059	)	
Investments in unconsolidated entities	—		 	(1,458	)	 	—		 	(1,458	)	
Distributions from unconsolidated entities	—		 	319		 	—		 	319		
Intercompany	(78,354	)	 	—		 	78,354		 	—		
Net cash (used in) provided by investing activities	(78,736	)	 	(1,816	)	 	78,354		 	(2,198	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	
Borrowings from notes payable	140,000		 	—		 	—		 	140,000		
Repayment of notes payable	(57,513	)	 	(200	)	 	—		 	(57,713	)	
Debt issuance costs	(2,688	)	 	—		 	—		 	(2,688	)	
Net proceeds of debt held by variable interest entities	—		 	(5,927	)	 	—		 	(5,927	)	
Contributions from noncontrolling interests	—		 	4,281		 	—		 	4,281		
Distributions to noncontrolling interests	—		 	(9,198	)	 	—		 	(9,198	)	
Proceeds from issuance of common stock under
   share-based awards	1,616		 	—		 	—		 	1,616		
Excess tax benefit of share-based awards	—		 	392		 	—		 	392		
Minimum tax withholding paid on behalf of employees for restricted stock units	(2,190	)	 	—		 	—		 	(2,190	)	
Intercompany	—		 	78,354		 	(78,354	)	 	—		
Net cash provided by (used in) financing activities	79,225		 	67,702		 	(78,354	)	 	68,573		
Net decrease increase in cash and cash equivalents	(68,873	)	 	(4,763	)	 	—		 	(73,636	)	
Cash and cash equivalents - beginning of period	105,888		 	64,741		 	—		 	170,629		
Cash and cash equivalents - end of period	$	37,015		 	$	59,978		 	$	—		 	$	96,993		
__________

(1)  	References to “Issuer” in this Note 20 , 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 of the 2019 Notes and 2024 Notes	

- 33 -

		
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;	

- 34 -

		
•	the effect of weather, including the continuing drought in California;	
		
•	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 and disputes;	
		
•	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 review and consider carefully 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.
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 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.

- 35 -

Overview and Outlook
We continue to be encouraged by the strength of the overall U.S. new-home market, which continues to improve on a slow, sustainable growth trajectory, supported by stronger general economic conditions, low unemployment levels, modest wage gains, low interest rates, and increasing consumer confidence combined with a limited supply of new homes.  We believe demand will continue to be strong across the U.S. in general and in a majority of the markets in which we operate over the next several years. Nevertheless, we continue to see variability from market to market with demand generally driven by general local market economic conditions.  Homebuilding activity in many markets continues to be constrained by land and labor availability, as well as fee increases and delays imposed by local municipalities, which we expect will continue to constrict supply.  We expect these demand and supply trends will result in a continued slow and steady recovery in the homebuilding market. See "Cautionary Note Concerning Forward-Looking Statements".
Our third quarter 2016 results reflect a decrease in net income available to common stockholders of 31% as compared to the prior year period due primarily to a 10% decrease in new home deliveries and a 90 basis point decrease in homebuilding gross margin percentage. The decline in new home deliveries was largely due to the timing of deliveries, as we delivered a large number of our backlog units in the second quarter of 2016, and a lower number of backlog units going into the quarter compared to the prior year period. The decline in homebuilding gross margins was primarily due to the mix of deliveries, including an 11% decrease in deliveries in California, which have generally had higher margins than the Company average. For the nine months ended September 30, 2016, net income available to common stockholders increased 14% as compared to the prior year period as a result of a 7% increase in deliveries and a 140 basis point increase in homebuilding gross margin percentage.

- 36 -

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

	
																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2016	 	2015	 	2016	 	2015	
Homebuilding:	 		 	 		 	 	 	 	
Home sales revenue	$	578,653		 	$	642,352		 	$	1,558,633		 	$	1,443,855		
Land and lot sales revenue	2,535		 	4,876		 	70,204		 	74,366		
Other operations revenue	606		 	613		 	1,790		 	2,213		
Total revenues	581,794		 	647,841		 	1,630,627		 	1,520,434		
Cost of home sales	462,323		 	507,543		 	1,219,560		 	1,149,191		
Cost of land and lot sales	1,734		 	3,451		 	16,973		 	17,324		
Other operations expense	575		 	570		 	1,724		 	1,704		
Sales and marketing	31,852		 	30,038		 	90,621		 	78,958		
General and administrative	31,150		 	26,736		 	89,815		 	83,150		
Restructuring charges	128		 	2,010		 	478		 	2,730		
Homebuilding income from operations	54,032		 	77,493		 	211,456		 	187,377		
Equity in (loss) income of unconsolidated entities	(20	)	 	(150	)	 	181		 	(82	)	
Other income, net	21		 	47		 	287		 	272		
Homebuilding income before income taxes	54,033		 	77,390		 	211,924		 	187,567		
Financial Services:	 		 	 		 	 	 	 	
Revenues	235		 	300		 	762		 	482		
Expenses	72		 	47		 	183		 	131		
Equity in income (loss) of unconsolidated entities	1,247		 	147		 	3,246		 	(2	)	
Financial services income before income taxes	1,410		 	400		 	3,825		 	349		
Income before income taxes	55,443		 	77,790		 	215,749		 	187,916		
Provision for income taxes	(20,298	)	 	(28,021	)	 	(77,701	)	 	(66,088	)	
Net income	35,145		 	49,769		 	138,048		 	121,828		
Net (income) loss attributable to noncontrolling interests	(311	)	 	393		 	(738	)	 	(1,439	)	
Net income available to common stockholders	$	34,834		 	$	50,162		 	$	137,310		 	$	120,389		
Earnings per share	 		 	 		 	 	 	 	
Basic	$	0.22			$	0.31			$	0.85			$	0.74		
Diluted	$	0.22			$	0.31			$	0.85			$	0.74		
Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

	
																											
 	Three Months Ended September 30, 2016	 	Three Months Ended September 30, 2015	 	Percentage Change	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	
Maracay Homes	134		 	17.8		 	2.5		 	150		 	17.2		 	2.9		 	(11	)%	 	3	 %	 	(14	)%	
Pardee Homes	283		 	22.5		 	4.2		 	291		 	25.0		 	3.9		 	(3	)%	 	(10	)%	 	8	 %	
Quadrant Homes	49		 	7.3		 	2.3		 	87		 	11.8		 	2.5		 	(44	)%	 	(38	)%	 	(8	)%	
Trendmaker Homes	130		 	29.0		 	1.5		 	125		 	25.0		 	1.7		 	4	 %	 	16	 %	 	(12	)%	
TRI Pointe Homes	239		 	28.7		 	2.8		 	234		 	28.3		 	2.8		 	2	 %	 	1	 %	 	—	 %	
Winchester Homes	97		 	13.7		 	2.4		 	109		 	13.5		 	2.7		 	(11	)%	 	1	 %	 	(11	)%	
Total	932		 	119.0		 	2.6		 	996		 	120.8		 	2.7		 	(6	)%	 	(1	)%	 	(4	)%	

- 37 -

Net new home orders for the three months ended September 30, 2016 decreased by 64 units or 6% to 932 , compared to 996 during the prior year period.  Average selling communities decreased slightly to 119.0 from 120.8 for the periods ended September 30, 2016 and 2015, respectively. The decrease in net new home orders at Pardee Homes was primarily due to a 10% decrease in average selling communities, although absorption rates increased slightly. The significant decrease in net new home orders at Quadrant Homes was primarily due to a 38% decrease in average selling communities as a result of the timing of new community openings and closings and to a lesser extent, a decrease in absorption pace. The decrease in net new home orders at Maracay Homes and Winchester Homes was mainly due to slower absorption rates.
Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)

																															
 	As of September 30, 2016	 	As of September 30, 2015	 	Percentage Change	
 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	
Maracay Homes	329		 	$	144,127		 	$	438		 	293		 	$	118,164		 	$	403		 	12	 %	 	22	 %	 	9	 %	
Pardee Homes	382		 	182,263		 	477		 	448		 	296,477		 	662		 	(15	)%	 	(39	)%	 	(28	)%	
Quadrant Homes	130		 	83,467		 	642		 	169		 	79,955		 	473		 	(23	)%	 	4	 %	 	36	 %	
Trendmaker Homes	186		 	98,874		 	532		 	205		 	108,250		 	528		 	(9	)%	 	(9	)%	 	1	 %	
TRI Pointe Homes	495		 	319,823		 	646		 	567		 	388,336		 	685		 	(13	)%	 	(18	)%	 	(6	)%	
Winchester Homes	189		 	121,617		 	643		 	174		 	118,685		 	682		 	9	 %	 	2	 %	 	(6	)%	
Total	1,711		 	$	950,171		 	$	555		 	1,856		 	$	1,109,867		 	$	598		 	(8	)%	 	(14	)%	 	(7	)%	
 
Backlog units reflect 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 17% for the three months ended September 30, 2016 compared to 16% for the prior year period.  The dollar value of backlog was $950.2 million as of September 30, 2016 , a decrease of $159.7 million , or 14% , compared to $1.1 billion as of September 30, 2015 .  The decrease in dollar value of backlog was due to a decline in backlog units to 1,711 as of September 30, 2016 from 1,856 as of September 30, 2015 , representing $86.7 million of the decline. Additionally, a 7% decrease in the average sales price of homes in backlog to $555,000 as of September 30, 2016 from $598,000 as of September 30, 2015 , impacted the decrease in dollar value of backlog by $73.0 million. The average sales price of homes in backlog decreased as a result of our Pardee Homes and TRI Pointe Homes segments closing out of communities with higher average sales prices resulting in a decrease in average sales price at the active selling communities in those segments.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

																															
 	Three Months Ended September 30, 2016	 	Three Months Ended September 30, 2015	 	Percentage Change	
 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	
Maracay Homes	165		 	$	68,024		 	$	412		 	131		 	$	50,504		 	$	386		 	26	 %	 	35	 %	 	7	 %	
Pardee Homes	302		 	188,148		 	623		 	314		 	170,450		 	543		 	(4	)%	 	10	 %	 	15	 %	
Quadrant Homes	90		 	47,749		 	531		 	117		 	47,560		 	406		 	(23	)%	 	—	 %	 	31	 %	
Trendmaker Homes	121		 	62,408		 	516		 	163		 	80,732		 	495		 	(26	)%	 	(23	)%	 	4	 %	
TRI Pointe Homes	260		 	167,769		 	645		 	298		 	224,243		 	752		 	(13	)%	 	(25	)%	 	(14	)%	
Winchester Homes	81		 	44,555		 	550		 	115		 	68,863		 	599		 	(30	)%	 	(35	)%	 	(8	)%	
Total	1,019		 	$	578,653		 	$	568		 	1,138		 	$	642,352		 	$	564		 	(10	)%	 	(10	)%	 	1	 %	

- 38 -

Home sales revenue decreased $63.7 million , or 10% , to $578.7 million for the three months ended September 30, 2016 from $642.4 million for the prior year period. The decrease was comprised of: (i) $67.2 million related to a 10% decrease in homes delivered to 1,019 for the three months ended September 30, 2016 from 1,138 in the prior year period; and (ii) offset by an increase of $3.5 million due to an increase in average sales price of $4,000 per home to $568,000 for the three months ended September 30, 2016 from $564,000 in the prior year period. The decrease in new home deliveries for the quarter was largely due to the timing of deliveries, as we delivered a large number of our backlog units in the second quarter of 2016, and had a lower number of backlog units going into the quarter compared to the prior year.
Homebuilding Gross Margins (dollars in thousands)

														
 	Three Months Ended September 30,	
 	2016	 	%	 	2015	 	%	
Home sales revenue	$	578,653		 	100.0	%	 	$	642,352		 	100.0	%	
Cost of home sales	462,323		 	79.9	%	 	507,543		 	79.0	%	
Homebuilding gross margin	116,330		 	20.1	%	 	134,809		 	21.0	%	
Add:  interest in cost of home sales	14,385		 	2.5	%	 	13,189		 	2.1	%	
Add:  impairments and lot option abandonments	389		 	0.1	%	 	366		 	0.1	%	
Adjusted homebuilding gross margin (1)	$	131,104		 	22.7	%	 	$	148,364		 	23.1	%	
Homebuilding gross margin percentage	20.1	%	 	 	 	21.0	%	 	 	
Adjusted homebuilding gross margin percentage (1)	22.7	%	 	 	 	23.1	%	 	 	
__________

(1)  	Non-GAAP financial measure (as discussed below).	
Our homebuilding gross margin percentage decreased to 20.1% for the three months ended September 30, 2016 as compared to 21.0% for the prior year period.  The decrease in gross margin was primarily due to the mix of deliveries, particularly the 11% decrease in deliveries from our TRI Pointe Homes and Pardee Homes segments in California, which produce gross margins above the Company average. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.7% for the three months ended September 30, 2016 , compared to 23.1% for the prior year period. The decrease 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.
Land and Lot Gross Margins (dollars in thousands)

														
 	Three Months Ended September 30,	
 	2016	 	%	 	2015	 	%	
Land and lot sales revenue	$	2,535		 	100.0	%	 	$	4,876		 	100.0	%	
Cost of land and lot sales	1,734		 	68.4	%	 	3,451		 	70.8	%	
Land and lot gross margin	$	801		 	31.6	%	 	$	1,425		 	29.2	%	

Our land and lot gross margin percentage increased to 31.6% for the three months ended September 30, 2016 as compared to 29.2% for the prior year period. Land and lot sales gross margin percentage can vary significantly due to the type of land and its related cost basis.

- 39 -

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

														
 	Three Months Ended September 30,	 	As a Percentage of
Home Sales Revenue	
 	2016	 	2015	 	2016	 	2015	
Sales and marketing	$	31,852		 	$	30,038		 	5.5	%	 	4.7	%	
General and administrative (G&A)	31,150		 	26,736		 	5.4	%	 	4.2	%	
Total sales and marketing and G&A	$	63,002		 	$	56,774		 	10.9	%	 	8.8	%	
 
Sales and marketing expense as a percentage of home sales revenue increased to 5.5% for the three month period ended September 30, 2016 compared to 4.7% for the prior year period. The increase was the result of lower operating leverage on the fixed components of sales and marketing expenses as a result of the 10% decrease in homes sales revenue. Total sales and marketing expense increased by $1.8 million to $31.9 million for the three months ended September 30, 2016 compared to $30.0 million in the same prior year period, and is primarily attributable to an increase in broker co-op payments and opening more communities in the quarter compared to the prior year period.
General and administrative (“G&A”) expenses as a percentage of home sales revenue increased to 5.4% of home sales revenue for the three months ended September 30, 2016 compared to 4.2% for the prior year period.  The increase is due primarily to decreased operating leverage resulting from the 10% decrease in home sales revenue. G&A expenses increased to $31.2 million for the three months ended September 30, 2016 compared to $26.7 million in the same prior year period primarily as a result of additional headcount to support future growth.
Total sales and marketing and G&A (“SG&A”) as a percentage of home sales revenue increased to 10.9% for the three month period ended September 30, 2016 compared to 8.8% in the prior year period. Total SG&A expense increased $6.2 million , or 11.0%, to $63.0 million for the three months ended September 30, 2016 from $56.8 million in the prior year period.  
Restructuring Charges
Restructuring charges decreased to $128,000 for the three months ended September 30, 2016 compared to $2.0 million in the same period in the prior year.  The decrease was mainly due to lower lease termination costs in 2016.
Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $18.6 million and $15.5 million for the three months ended September 30, 2016 and 2015 , respectively.  All interest incurred in both periods was capitalized.  The increase in interest incurred during the three months ended September 30, 2016 as compared to the prior year period was primarily attributable to an increase in our debt balance and our weighted average interest rate as a result of the issuance of our 2021 Notes in May of 2016.
Income Tax
For the three months ended September 30, 2016 , we recorded a tax provision of $20.3 million based on an effective tax rate of 36.6% .  For the three months ended September 30, 2015 , we recorded a tax provision of $ 28.0 million based on an effective tax rate of 36.0% . The decrease in provision for income taxes is due to a decrease in income before income taxes of $22.3 million to $55.4 million for the three months ended September 30, 2016 compared to $77.8 million for the prior year period. The increase in the effective tax rate was the result of discrete tax adjustments recorded during the quarter.

- 40 -

Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

	
																											
 	Nine Months Ended September 30, 2016	 	Nine Months Ended September 30, 2015	 	Percentage Change	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Monthly
Absorption
Rates	
Maracay Homes	526		 	18.1		 	3.2		 	495		 	17.3		 	3.2		 	6	 %	 	5	 %	 	—	 %	
Pardee Homes	936		 	22.8		 	4.6		 	954		 	22.8		 	4.6		 	(2	)%	 	—	 %	 	—	 %	
Quadrant Homes	274		 	8.5		 	3.6		 	353		 	10.8		 	3.6		 	(22	)%	 	(21	)%	 	—	 %	
Trendmaker Homes	385		 	26.8		 	1.6		 	381		 	26.0		 	1.6		 	1	 %	 	3	 %	 	—	 %	
TRI Pointe Homes	883		 	27.3		 	3.6		 	935		 	27.0		 	3.8		 	(6	)%	 	1	 %	 	(5	)%	
Winchester Homes	335		 	13.5		 	2.8		 	310		 	13.5		 	2.6		 	8	 %	 	—	 %	 	8	 %	
Total	3,339		 	117.0		 	3.2		 	3,428		 	117.4		 	3.2		 	(3	)%	 	—	 %	 	—	 %	

Net new home orders for the nine months ended September 30, 2016 decreased by 89 units, or 3% , to 3,339 , compared to 3,428 during the prior year period.  The decrease in net new home orders at Quadrant Homes was primarily due to a decrease in average selling communities as a result of timing of new community openings and closings. The decrease in net new home orders at TRI Pointe Homes was mainly due to a decrease in absorptions rates, although absorptions remained strong at 3.6 orders per community per month. Maracay Homes' orders increased 6% as a result of increased communities while Winchester Homes' orders increased 8% due to increased absorption as a result of better market conditions.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

																															
 	Nine Months Ended September 30, 2016	 	Nine Months Ended September 30, 2015	 	Percentage Change	
 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	 	New
Homes
Delivered	 	Home
Sales
Revenue	 	Average
Sales
Price	
Maracay Homes	400		 	$	161,318		 	$	403		 	307		 	$	116,555		 	$	380		 	30	 %	 	38	 %	 	6	 %	
Pardee Homes	828		 	485,683		 	587		 	724		 	366,339		 	506		 	14	 %	 	33	 %	 	16	 %	
Quadrant Homes	287		 	147,935		 	515		 	297		 	126,585		 	426		 	(3	)%	 	17	 %	 	21	 %	
Trendmaker Homes	335		 	169,423		 	506		 	394		 	201,592		 	512		 	(15	)%	 	(16	)%	 	(1	)%	
TRI Pointe Homes	678		 	452,553		 	667		 	611		 	461,654		 	756		 	11	 %	 	(2	)%	 	(12	)%	
Winchester Homes	256		 	141,721		 	554		 	271		 	171,130		 	631		 	(6	)%	 	(17	)%	 	(12	)%	
Total	2,784		 	$	1,558,633		 	$	560		 	2,604		 	$	1,443,855		 	$	554		 	7	 %	 	8	 %	 	1	 %	
 
Home sales revenue increased $114.8 million , or 8% , to $1.6 billion for the nine months ended September 30, 2016 from $1.4 billion for the prior year period. The increase was comprised of: (i) $99.8 million related to a 7% increase in homes delivered to 2,784 for the nine months ended September 30, 2016 from 2,604 in the prior year period; and (ii) $15.0 million due to an increase in average sales price of $6,000 per home to $560,000 for the nine months ended September 30, 2016 from $554,000 in the prior year period. 

- 41 -

Homebuilding Gross Margins (dollars in thousands)

														
 	Nine Months Ended September 30,	
 	2016	 	%	 	2015	 	%	
Home sales revenue	$	1,558,633		 	100.0	%	 	$	1,443,855		 	100.0	%	
Cost of home sales	1,219,560		 	78.2	%	 	1,149,191		 	79.6	%	
Homebuilding gross margin	339,073		 	21.8	%	 	294,664		 	20.4	%	
Add:  interest in cost of home sales	34,653		 	2.2	%	 	27,540		 	1.9	%	
Add:  impairments and lot option abandonments	678		 	0.0	%	 	1,593		 	0.1	%	
Adjusted homebuilding gross margin (1)	$	374,404		 	24.0	%	 	$	323,797		 	22.4	%	
Homebuilding gross margin percentage	21.8	%	 	 	 	20.4	%	 	 	
Adjusted homebuilding gross margin percentage (1)	24.0	%	 	 	 	22.4	%	 	 	
__________

(1)  	Non-GAAP financial measure (as discussed below).	
Our homebuilding gross margin percentage increased to 21.8% for the nine months ended September 30, 2016 as compared to 20.4% for the prior year period.  The increase in gross margin was primarily due to mix of deliveries, particularly the 13% increase in deliveries from our TRI Pointe Homes and Pardee Homes segments in California, which produce gross margins above the Company average. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 24.0% for the nine months ended September 30, 2016 , compared to 22.4% 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.
Land and Lot Gross Margins (dollars in thousands)

														
 	Nine Months Ended September 30,	
 	2016	 	%	 	2015	 	%	
Land and lot sales revenue	$	70,204		 	100.0	%	 	$	74,366		 	100.0	%	
Cost of land and lot sales	16,973		 	24.2	%	 	17,324		 	23.3	%	
Land and lot gross margin	$	53,231		 	75.8	%	 	$	57,042		 	76.7	%	
Our land and lot gross margin percentage was 75.8% for the nine months ended September 30, 2016 as compared to 76.7% for the same prior year period. In June of 2016, our Pardee Homes reporting segment sold two parcels, totaling 102 homebuilding lots, located in the Pacific Highlands Ranch community in San Diego, California. Pardee Homes received $61.6 million in cash proceeds from the sales. In June of 2015 our Pardee Homes reporting segment sold a commercial site in the Pacific Highlands Ranch community for $53.0 million in cash proceeds. These transactions involving the Pacific Highlands Ranch community included significant gross margins due to the low land basis of the community which was acquired in 1981. Land and lot sales gross margin percentage can vary significantly due to the type of land and its related cost basis.
Sales and Marketing, General and Administrative Expense (dollars in thousands)

														
 	Nine Months Ended September 30,	 	As a Percentage of
Home Sales Revenue	
 	2016	 	2015	 	2016	 	2015	
Sales and marketing	$	90,621		 	$	78,958		 	5.8	%	 	5.5	%	
General and administrative (G&A)	89,815		 	83,150		 	5.8	%	 	5.8	%	
Total sales and marketing and G&A	$	180,436		 	$	162,108		 	11.6	%	 	11.2	%	

- 42 -

 
Sales and marketing expense as a percentage of home sales revenue increased to 5.8% for the nine months ended September 30, 2016 compared to 5.5% for the prior year period. The increase was primarily attributable to the increase in active selling communities, as well as pre-marketing efforts for new communities opening in the fourth quarter of 2016, and the expansion into the Austin, Texas and Los Angeles, California markets. Total sales and marketing expense increased by $11.7 million to $90.6 million for the nine months ended September 30, 2016 compared to $79.0 million in the same prior year period, and is primarily attributable to direct selling costs related to the 7% increase in new home deliveries, an increase in broker co-op payments and opening more communities in the nine months ended September 30, 2016 compared to the prior year period.
G&A expenses as a percentage of home sales revenue remained flat at 5.8% for the nine months ended September 30, 2016 and September 30, 2015 , respectively.  G&A expenses increased to $89.8 million for the nine months ended September 30, 2016 compared to $83.2 million in the same prior year period as a result of additional headcount to support future growth.
Total SG&A as a percentage of home sales revenue increased to 11.6% for the nine month period ended September 30, 2016 compared to 11.2% in the prior year period.  Total SG&A expense increased $18.3 million , or 11.2%, to $180.4 million for the nine months ended September 30, 2016 from $162.1 million in the prior year period.  
Restructuring Charges
Restructuring charges decreased to $478,000 for the nine months ended September 30, 2016 compared to $2.7 million in the same period in the prior year.  The decrease was due to lower lease termination and severance costs in 2016.
Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $50.0 million and $45.8 million for the nine months ended September 30, 2016 and 2015 , respectively.  All interest incurred in both periods was capitalized.  The increase in interest incurred during the nine months ended September 30, 2016 as compared to the prior year period was primarily attributable to an increase in our weighted average interest rate as a result of the issuance of our 2021 Notes in May of 2016.
Income Tax
For the nine months ended September 30, 2016 , we recorded a tax provision of $ 77.7 million based on an effective tax rate of 36.0% .  For the nine months ended September 30, 2015 , we recorded a tax provision of $ 66.1 million based on an effective tax rate of 35.2% . The increase in provision for income taxes was primarily due to an increase in income before income taxes of $27.8 million to $215.7 million for the nine months ended September 30, 2016 compared to $187.9 million for the prior year period. The increase in the effective tax rate was the result of discrete tax adjustments recorded during the quarter ended September 30, 2016.

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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:

												
 	September 30,	 	Increase
(Decrease)	
 	2016	 	2015	 	Amount	 	%	
Lots Owned	 	 	 	 	 	 	 	
Maracay Homes	1,662		 	1,582		 	80		 	5	 %	
Pardee Homes	15,906		 	16,835		 	(929	)	 	(6	)%	
Quadrant Homes	969		 	1,087		 	(118	)	 	(11	)%	
Trendmaker Homes	1,757		 	1,158		 	599		 	52	 %	
TRI Pointe Homes	3,048		 	2,644		 	404		 	15	 %	
Winchester Homes	1,886		 	2,178		 	(292	)	 	(13	)%	
Total	25,228		 	25,484		 	(256	)	 	(1	)%	
Lots Controlled (1)	 	 	 	 	 	 	 	
Maracay Homes	596		 	216		 	380		 	176	 %	
Pardee Homes	1,081		 	240		 	841		 	350	 %	
Quadrant Homes	926		 	335		 	591		 	176	 %	
Trendmaker Homes	373		 	818		 	(445	)	 	(54	)%	
TRI Pointe Homes	912		 	749		 	163		 	22	 %	
Winchester Homes	597		 	398		 	199		 	50	 %	
Total	4,485		 	2,756		 	1,729		 	63	 %	
Total Lots Owned or Controlled (1)	29,713		 	28,240		 	1,473		 	5	 %	
__________
		
(1)  	As of September 30, 2016 and 2015 lots controlled included lots that were under land or lot option contracts or purchase contracts.	

Liquidity and Capital Resources
Overview
Our principal uses of capital for the three and nine months ended September 30, 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 September 30, 2016 , we had $128.7 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.
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.
Senior Notes
In May 2016, TRI Pointe Group issued $300 million aggregate principal amount of 4.875% Senior Notes due 2021 (the “2021 Notes”) at 99.44% of their aggregate principal amount. Net proceeds of this issuance was $293.9 million , after debt issuance costs and discounts. The 2021 Notes mature on July 1, 2021 and interest is paid semiannually in arrears on January 1 and July 1.

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TRI Pointe Group and TRI Pointe Homes are co-issuers of $450 million aggregate principal amount of 4.375% Senior Notes due 2019 (“2019 Notes”) and $450 million aggregate principal amount of 5.875% Senior Notes due 2024 (“2024 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 from the offering were $861.3 million , after debt issuance costs and discounts. The 2019 Notes and 2024 Notes mature on June 15, 2019 and June 15, 2024. Interest is payable semiannually in arrears on June 15 and December 15.
As of September 30, 2016 , no principal has been paid on the 2019 Notes, 2021 Notes and 2024 Notes (together, the "Senior Notes"), and there was $22.0 million of capitalized debt financing costs, included in senior notes, net 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 $18.6 million and $1.9 million as of September 30, 2016 and December 31, 2015 , respectively.
Unsecured Revolving Credit Facility
On April 28 2016, the Company partially exercised the accordion feature under its existing unsecured revolving credit facility (the “Credit Facility”) to increase the total commitments under the Credit Facility to $625 million from $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 September 30, 2016 , the outstanding balance under the Credit Facility was $200.0 million with an interest rate 2.28%  per annum and $420.7 million of availability after considering the borrowing base provisions and outstanding letters of credit.  At September 30, 2016 , we had outstanding letters of credit of $4.3 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 Loan
As of September 30, 2016 , the Company had $17.8 million outstanding related to a seller financed loan to acquire lots for the construction of homes. Principal and interest payments on this loan are due at various maturity dates, including at the time individual homes associated with the acquired land are delivered. The seller financed loan accrues interest at a rate of 7.0% per annum, with interest calculated on a daily basis. A minimum principal payment of $12.1 million is due in June 2017 with any remaining unpaid balance due in June 2018.
Stock Repurchase Program
On January 27, 2016, the Company announced that the board of directors approved a stock repurchase program, authorizing the repurchase of the Company’s 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.  We are not obligated under the program to repurchase any specific number or amount of shares of common stock, 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. As of September 30, 2016 , 2,105,521 shares of our common stock had been repurchased and retired under this program at an average price of $11.93 per share for a total of cost of $25.1 million .

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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):

	
								
 	Actual at
September 30,	 	Covenant
Requirement at
September 30,	
Financial Covenants	2016	 	2016	
Consolidated Tangible Net Worth	$	1,623,831		 	$	1,039,622		
(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	44.1	%	 	<55%		
(Not to exceed 55%)	 	 	 		
Interest Coverage Test	6.4		 	>1.5		
(Not less than 1.5:1.0)	 	 	 		
 
As of September 30, 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):  

								
 	September 30, 2016	 	December 31, 2015	
Unsecured revolving credit facility	$	200,000		 	$	299,392		
Seller financed loans	17,758		 	2,434		
Senior Notes	1,166,724		 	868,679		
Total debt	1,384,482		 	1,170,505		
Stockholders’ equity	1,785,460		 	1,664,683		
Total capital	$	3,169,942		 	$	2,835,188		
Ratio of debt-to-capital (1)	43.7	%	 	41.3	%	
 	 	 	 	
Total debt	$	1,384,482		 	$	1,170,505		
Less: Cash and cash equivalents	(128,715	)	 	(214,485	)	
Net debt	1,255,767		 	956,020		
Stockholders’ equity	1,785,460		 	1,664,683		
Total capital	$	3,041,227		 	$	2,620,703		
Ratio of net debt-to-capital (2)	41.3	%	 	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.	

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Cash Flows— Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015
For the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2015 , the comparison of cash flows is as follows:
		
•	Net cash used in operating activities increased by $121.3 million to $261.3 million for the nine months ended September 30, 2016 from $140.0 million for the nine months ended September 30, 2015 . The change was comprised of offsetting activity, including (i) an increase in real estate inventories of $442.7 million in 2016 compared to an increase of $305.9 million in 2015 to support our future community count growth and (ii) other offsetting activity included changes in other assets, receivables, accounts payable, accrued expenses, and net income.	
		
•	Net cash used in investing activities was $2.1 million for the nine months ended September 30, 2016 compared to $2.2 million for the same prior year period in 2015.  The decrease in cash used in investing activities was due mainly due to lower investments in unconsolidated entities, offset by increases in the purchase of property and equipment.	
		
•	Net cash provided by financing activities increased to $177.6 million for the nine months ending September 30, 2016 from $68.6 million for the same period in the prior year. The change was primarily a result of higher net borrowings from debt of $214.2 million during the nine months ended September 30, 2016 compared to $82.3 million for the nine months ended September 30, 2015 , offset by an increase in spending related to the share repurchase program of $25.1 million during the current year period with no comparable prior year activity.	
As of September 30, 2016 , our cash and cash equivalents balance was $128.7 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 land and 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 September 30, 2016 , we had $30.2 million of cash deposits, the majority of which are non-refundable, pertaining to land and lot option contracts and purchase contracts with an aggregate remaining purchase price of $445.1 million (net of deposits).
Our utilization of land and lot 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 land and 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 September 30, 2016 , we had $420.7 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. 

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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.

Description of Projects and Communities under Development
The following table presents project information relating to each of our markets as of September 30, 2016 and includes information on current projects under development where we are building and selling homes.

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Maracay Homes

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
Phoenix, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	
Town of Buckeye:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Verrado Tilden	2012	 	102		 	102		 	—		 	—		 	8		 	 $239 - $304	
Verrado Palisades	2015	 	63		 	20		 	43		 	17		 	4		 	 $310 - $383	
Verrado Victory	2015	 	98		 	23		 	75		 	9		 	6		 	 $357 - $392	
City of Chandler:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Artesian Ranch	2013	 	90		 	89		 	1		 	1		 	32		 	 $344 - $400	
Vaquero Ranch	2013	 	74		 	74		 	—		 	—		 	7		 	 $298 - $373	
Maracay at Layton Lakes	2015	 	47		 	41		 	6		 	6		 	30		 	 $484 - $524	
Sendera Place	2015	 	79		 	40		 	39		 	22		 	28		 	 $273 - $320	
Hawthorn Manor	2017	 	84		 	—		 	84		 	—		 	—		 	 $467 - $500	
Town of Gilbert:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Arch Crossing at Bridges of Gilbert	2014	 	67		 	67		 	—		 	—		 	7		 	$283 - $341	
Trestle Place at Bridges of Gilbert	2014	 	73		 	73		 	—		 	—		 	10		 	$344 - $424	
Marquis at Morrison Ranch	2016	 	66		 	15		 	51		 	25		 	15		 	$405 - $492	
Artisan at Morrison Ranch	2016	 	105		 	18		 	87		 	22		 	18		 	$314 - $367	
Adora Trails	2017	 	82		 	—		 	82		 	—		 	—		 	$368 - $407	
City of Goodyear:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Calderra at Palm Valley	2013	 	81		 	81		 	—		 	—		 	1		 	 Closed	
City of Mesa:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Kinetic Point at Eastmark	2013	 	80		 	75		 	5		 	—		 	15		 	 $283 - $361	
Lumiere Garden at Eastmark	2013	 	85		 	75		 	10		 	2		 	15		 	 $327 - $404	
Aileron Square at Eastmark	2016	 	58		 	12		 	46		 	18		 	12		 	 $327 - $404	
Curie Court at Eastmark	2016	 	106		 	17		 	89		 	16		 	17		 	 $283 - $361	
Palladium Point	2016	 	53		 	—		 	53		 	11		 	—		 	 $310 - $379	
Hendrix Point	2018	 	37		 	—		 	37		 	—		 	—		 	 $381 - $456	
Town of Peoria:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Reserve at Plaza del Rio	2013	 	162		 	118		 	44		 	21		 	31		 	 $205 - $267	
Maracay at Northlands	2014	 	90		 	60		 	30		 	23		 	25		 	 $330 - $411	
Legacy at The Meadows	2017	 	74		 	—		 	74		 	5		 	—		 	 $397 - $423	
Estates at The Meadows	2017	 	99		 	—		 	99		 	16		 	—		 	 $456 - $530	
Meadows 1 & 3	2018	 	299		 	—		 	299		 	—		 	—		 	 $365 - $523	
Town of Queen Creek:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Preserve at Hastings Farms	2014	 	89		 	73		 	16		 	12		 	30		 	 $300 - $385	
Villagio	2013	 	135		 	116		 	19		 	15		 	27		 	 $291 - $352	
Phoenix, Arizona Total	 	 	2,478		 	1,189		 	1,289		 	241		 	338		 	 	
Tucson, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marana:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tortolita Vistas	2014	 	55		 	35		 	20		 	8		 	11		 	$458 - $515	
Oro Valley:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rancho del Cobre	2014	 	68		 	53		 	15		 	4		 	10		 	$410 - $478	
Desert Crest - Center Pointe Vistoso	2016	 	103		 	8		 	95		 	14		 	8		 	$252 - $297	
The Cove - Center Pointe Vistoso	2016	 	83		 	4		 	79		 	16		 	4		 	$327 - $387	
Summit N & S - Center Pointe Vistoso	2016	 	88		 	17		 	71		 	14		 	17		 	$376 - $411	
The Pinnacle - Center Pointe Vistoso	2016	 	69		 	7		 	62		 	29		 	7		 	$435 - $467	
Tucson:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deseo at Sabino Canyon	2014	 	39		 	39		 	—		 	—		 	2		 	$419 - $505	
Ranches at Santa Catalina	2016	 	34		 	3		 	31		 	3		 	3		 	$404 - $450	
Tucson, Arizona Total	 	 	539		 	166		 	373		 	88		 	62		 	 	
Maracay Total	 	 	3,017		 	1,355		 	1,662		 	329		 	400		 	 	

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Pardee Homes

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
California	 	 	 	 	 	 	 	 	 	 	 	 	 	
San Diego County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Alta Del Mar Homes	2013	 	117		 	116		 	1		 	1		 	36		 	$1,800 - $2,200	
Watermark	2013	 	160		 	160		 	—		 	—		 	29		 	$1,000 - $1,310	
Canterra	2015	 	89		 	67		 	22		 	19		 	42		 	$760 - $900	
Casabella	2015	 	122		 	78		 	44		 	19		 	56		 	$900 - $1,000	
Verana	2015	 	78		 	78		 	—		 	—		 	40		 	$990 - $1,100	
Casavia	2017	 	83		 	—		 	83		 	5		 	—		 	$980 - $1,000	
Artesana	2017	 	56		 	—		 	56		 	—		 	—		 	$1,650 - $1,850	
Pacific Highlands Ranch Future	TBD	 	786		 	—		 	786		 	—		 	—		 	TBD	
Olive Hill Estate	2016	 	37		 	10		 	27		 	4		 	10		 	$650 - $770	
Castlerock	TBD	 	415		 	—		 	415		 	—		 	—		 	$510 - $770	
Meadowood	TBD	 	844		 	—		 	844		 	—		 	—		 	$290 - $590	
Parkview Condos	2016	 	73		 	28		 	45		 	19		 	28		 	$435 - $500	
Luna	2017	 	96		 	—		 	96		 	—		 	—		 	$330 - $400	
Azul	2017	 	121		 	—		 	121		 	—		 	—		 	$325 - $370	
Ocean View HillsFuture	2017	 	700		 	—		 	700		 	—		 	—		 	TBD	
South Otay Mesa	TBD	 	893		 	—		 	893		 	—		 	—		 	$185 - $530	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Golden Valley	2017	 	498		 	—		 	498		 	—		 	—		 	 $558 - $839	
Skyline Ranch	TBD	 	1,260		 	—		 	1,260		 	—		 	—		 	 $510 - $640	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Meadow Ridge	2013	 	132		 	132		 	—		 	—		 	24		 	$370 - $470	
Meadow Glen	2014	 	142		 	137		 	5		 	4		 	48		 	$350 - $410	
Amberleaf	2014	 	131		 	130		 	1		 	1		 	44		 	$320 - $370	
Summerfield	2015	 	85		 	85		 	—		 	—		 	33		 	$310 - $330	
Senterra	2016	 	82		 	—		 	82		 	29		 	—		 	$390 - $460	
Vantage	2016	 	83		 	—		 	83		 	21		 	—		 	$350 - $370	
Viewpoint	2016	 	75		 	—		 	75		 	15		 	—		 	$290 - $310	
Overlook	2016	 	112		 	—		 	112		 	19		 	—		 	$305 - $335	
Canyon Hills Future	TBD	 	311		 	—		 	311		 	—		 	—		 	TBD	
Tournament Hills Future	TBD	 	268		 	—		 	268		 	—		 	—		 	TBD	
Woodmont	2014	 	84		 	84		 	—		 	—		 	16		 	$320 - $390	
Cielo	2015	 	92		 	92		 	—		 	—		 	14		 	$220 - $275	
Northstar	2015	 	123		 	55		 	68		 	4		 	38		 	$300 - $330	
Skycrest	2015	 	125		 	60		 	65		 	3		 	29		 	$330 - $380	
Flagstone	2016	 	79		 	13		 	66		 	16		 	13		 	$380 - $440	
Lunetta	2016	 	89		 	33		 	56		 	16		 	33		 	$270 - $300	
Elara	2016	 	118		 	—		 	118		 	24		 	—		 	$260 - $290	
Sundance Future	TBD	 	1,317		 	—		 	1,317		 	—		 	—		 	TBD	
Tierra Del Rey	2017	 	84		 	—		 	84		 	—		 	—		 	$390 - $430	
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	 	 	15,650		 	1,358		 	14,292		 	219		 	533		 	 	
Nevada	 	 	 	 	 	 	 	 	 	 	 	 	 	
Clark County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
LivingSmart at Eldorado Ridge	2012	 	169		 	169		 	—		 	—		 	9		 	$260 - $310	
LivingSmart at Eldorado Heights	2013	 	135		 	135		 	—		 	—		 	13		 	 $310 - $395	
LivingSmart Sandstone	2013	 	145		 	138		 	7		 	7		 	48		 	 $228 - $255	

- 50 -

	
																			
North Peak	2015	 	150		 	40		 	110		 	22		 	34		 	$280 - $330	
Castle Rock	2015	 	150		 	41		 	109		 	17		 	37		 	$350 - $410	
Camino	2016	 	86		 	9		 	77		 	10		 	9		 	$250 - $260	
Eldorado Future	2017	 	59		 	—		 	59		 	—		 	—		 	 TBD	
Solano	2014	 	132		 	95		 	37		 	13		 	34		 	 $300 - $330	
Alterra	2014	 	47		 	40		 	7		 	5		 	15		 	 $425 - $500	
Bella Verdi	2015	 	49		 	40		 	9		 	5		 	21		 	 $373 - $440	
Escala	2016	 	154		 	3		 	151		 	18		 	3		 	 $510 - $575	
Montero	2016	 	74		 	—		 	74		 	11		 	—		 	 $420 - $480	
Strada	2017	 	116		 	—		 	116		 	—		 	—		 	 $380 - $400	
Responsive Home	2016	 	2		 	—		 	2		 	2		 	—		 	$590 - $940	
POD 5-1/2-2 Future	2017	 	31		 	—		 	31		 	—		 	—		 	TBD	
Durango Ranch	2012	 	153		 	152		 	1		 	1		 	5		 	 $467 - $560	
Durango Trail	2014	 	77		 	77		 	—		 	—		 	3		 	 $380 - $410	
Meridian	2016	 	82		 	7		 	75		 	15		 	7		 	 $580 - $680	
Encanto	2016	 	129		 	5		 	124		 	7		 	5		 	 $470 - $525	
Horizon Terrace	2014	 	165		 	82		 	83		 	11		 	22		 	 $400 - $455	
Summerglen	2014	 	140		 	98		 	42		 	13		 	30		 	 $295 - $300	
Keystone	2017	 	70		 	—		 	70		 	6		 	—		 	 $450 - $530	
Cobalt	2017	 	110		 	—		 	110		 	—		 	—		 	 $340 - $370	
Axis	2017	 	78		 	—		 	78		 	—		 	—		 	 $680 - $780	
The Canyons at MacDonald Ranch	2017	 	22		 	—		 	22		 	—		 	—		 	 $535 - $565	
Sunridge Heights	2017	 	108		 	—		 	108		 	—		 	—		 	 $392 - $455	
Nova Ridge	2018	 	112		 	—		 	112		 	—		 	—		 	 $680 - $715	
Nevada Total	 	 	2,745		 	1,131		 	1,614		 	163		 	295		 	 	
Pardee Total	 	 	18,395		 	2,489		 	15,906		 	382		 	828		 	 	

- 51 -

Quadrant Homes  

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
Washington	 	 	 	 	 	 	 	 	 	 	 	 	 	
Skagit County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Skagit Surplus Pod E, Mt Vernon	TBD	 	4		 	—		 	4		 	—		 	—		 	TBD	
Snohomish County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
King's Corner 3, Mill Creek	2016	 	29		 	26		 	3		 	3		 	26		 	$477 - $491	
Evergreen Heights, Monroe	2016	 	71		 	—		 	71	 	10		 	—		 	$450 - $515	
The Grove at Canyon Park, Bothell	2017	 	60		 	—		 	60		 	—		 	—		 	$645 - $720	
Greenstone Heights, Bothell	2017	 	41		 	—		 	41		 	—		 	—		 	$859 - $919	
King County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sonata Hill, Auburn	2014	 	71		 	68		 	3		 	2		 	31		 	$368 - $415	
Heathers Ridge, Kirkland	2015	 	41		 	40		 	1		 	1		 	28		 	$810	
Hedgewood, Redmond	2015	 	11		 	10		 	1		 	1		 	7		 	$810	
Hedgewood East, Redmond	2016	 	15		 	8		 	7		 	6		 	8		 	$747 - $925	
Grasslawn Estates, Redmond	2016	 	4		 	3		 	1		 	1		 	3		 	$1,450	
Vintner's Place, Kirkland	2016	 	35		 	6		 	29		 	28		 	6		 	$712 - $850	
Copperwood, Renton	2016	 	46		 	3		 	43		 	30		 	3		 	$610 - $737	
Viscaia, Bellevue	2017	 	18		 	—		 	18		 	—		 	—		 	$690 - $788	
Trailside, Redmond	2017	 	9		 	—		 	9		 	—		 	—		 	$870 - $1,005	
Parkwood Terrace, Woodinville	2017	 	15		 	—		 	15		 	—		 	—		 	$759 - $960	
Hazelwood Ridge, Newcastle	2017	 	30		 	—		 	30		 	—		 	—		 	$760 - $905	
Inglewood Landing, Sammamish	2018	 	21		 	—		 	21		 	—		 	—		 	$865 - $1,000	
Jacobs Landing, Issaquah	2017	 	20		 	—		 	20		 	—		 	—		 	$935 - $1,000	
Kirkwood Terrace, Sammamish	2017	 	12		 	—		 	12		 	—		 	—		 	$1,310 - $1,610	
English Landing P2, Redmond	2017	 	25		 	—		 	25		 	—		 	—		 	$930 - $1,070	
English Landing P1, Redmond	2017	 	50		 	—		 	50		 	—		 	—		 	$945 - $1,095	
Heathers Ridge South, Redmond	2017	 	8		 	—		 	8		 	—		 	—		 	$625 - $925	
Cedar Landing, North Bend	2017	 	138		 	—		 	138		 	—		 	—		 	$590 - $740	
Monarch Ridge, Sammamish	2017	 	59		 	—		 	59		 	—		 	—		 	$860 - $975	
Ray Meadows, Redmond	2018	 	27		 	—		 	27		 	—		 	—		 	$930 - $1,080	
Wynstone, Federal Way	TBD	 	4		 	—		 	4		 	—		 	—		 	TBD	
Breva, Bellevue	2017	 	29		 	—		 	29		 	—		 	—		 	$642 - $714	
Canton Crossing, Maple Valley	2017	 	51		 	—		 	51		 	—		 	—		 	$560 - $655	
Pierce County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Harbor Hill S-9, Gig Harbor	2014	 	40		 	38		 	2		 	—		 	2		 	$422	
Harbor Hill S-8, Gig Harbor	2015	 	33		 	31		 	2		 	1		 	27		 	$422 - $454	
Harbor Hill S-7, Gig Harbor	2016	 	16		 	—		 	16		 	8		 	—		 	$412 - $472	
Chambers Ridge, Tacoma	2014	 	24		 	23		 	1		 	1		 	6		 	$630	
The Enclave at Harbor Hill, Gig Harbor	2016	 	33		 	11		 	22		 	4		 	11		 	$520 - $560	
Thurston County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Campus Fairways, Lacey	2015	 	39		 	29		 	10		 	6		 	16		 	$365 - $430	
Kitsap County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
McCormick Meadows, Port Orchard	2012	 	167		 	161		 	6		 	6		 	42		 	$300 - $354	
Mountain Aire, Poulsbo	2016	 	145		 	15		 	130		 	22		 	15		 	$393 - $455	
Closed Communities	N/A	 	—		 	—		 	—		 	—		 	56		 	N/A	
Washington Total	 	 	1,441		 	472		 	969		 	130		 	287		 	 	
Quadrant Total	 	 	1,441		 	472		 	969		 	130		 	287		 	 	

- 52 -

Trendmaker Homes

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
Texas	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazoria County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona Lakes, Pearland	2014	 	34		 	19		 	15		 	1		 	2		 	 $387 - $458	
Southern Trails, Pearland	2014	 	40		 	37		 	3		 	1		 	8		 	 $499 - $550	
Pomona, Manvel	2015	 	31		 	3		 	28		 	5		 	3		 	 $358 - $450	
Rise Meridiana	2016	 	16		 	—		 	16		 	5		 	—		 	 $303 - $336	
Fort Bend County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cross Creek Ranch 60', Fulshear	2013	 	109		 	74		 	35		 	6		 	3		 	 $356 - $442	
Cross Creek Ranch 65', Fulshear	2013	 	98		 	72		 	26		 	2		 	10		 	 $405 - $458	
Cross Creek Ranch 70', Fulshear	2013	 	110		 	88		 	22		 	8		 	7		 	 $450 - $510	
Cross Creek Ranch 80', Fulshear	2013	 	120		 	108		 	12		 	3		 	13		 	 $541 - $656	
Cross Creek Ranch 90', Fulshear	2013	 	43		 	28		 	15		 	4		 	4		 	 $604 - $680	
Villas at Cross Creek Ranch, Fulshear	2013	 	101		 	100		 	1		 	—		 	9		 	 $454 - $496	
Fulshear Run, Richmond	2016	 	15		 	—		 	15		 	7		 	—		 	 $542 - $638	
Cinco Ranch, Katy	2015	 	93		 	93		 	—		 	—		 	1		 	 $396 - $530	
Harvest Green 75', Richmond	2015	 	19		 	7		 	12		 	1		 	7		 	 $421 - $486	
Sienna Plantation 80', Missouri City	2013	 	38		 	38		 	—		 	—		 	6		 	 $542 - $650	
Sienna Plantation 85', Missouri City	2015	 	25		 	8		 	17		 	5		 	8		 	 $530 - $635	
Villas at Sienna South, Missouri City	2015	 	19		 	6		 	13		 	2		 	6		 	 $445 - $507	
Lakes of Bella Terra, Richmond	2013	 	109		 	99		 	10		 	3		 	19		 	 $465 - $553	
Villas at Aliana, Richmond	2013	 	109		 	78		 	31		 	7		 	18		 	 $380 - $503	
Riverstone 55', Sugar Land	2013	 	97		 	94		 	3		 	1		 	14		 	 $437 - $467	
Riverstone 80', Sugar Land	2013	 	102		 	102		 	—		 	—		 	2		 	 $559 - $710	
Riverstone Avanti at Avalon 100', Sugar Land	2015	 	5		 	4		 	1		 	1		 	3		 	 $1,197	
The Townhomes at Imperial, Sugar Land	2015	 	27		 	27		 	—		 	—		 	7		 	 $396 - $530	
Galveston County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Harborwalk, Hitchcock	2014	 	50		 	50		 	—		 	—		 	6		 	 $680 - $686	
Harris County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fairfield, Cypress	2010	 	91		 	90		 	1		 	1		 	13		 	 $530 - $595	
Lakes of Fairhaven, Cypress	2008	 	257		 	257		 	—		 	—		 	9		 	 $409 - $505	
Towne Lake Living Views, Cypress	2013	 	122		 	115		 	7		 	4		 	11		 	 $468 - $561	
The Groves, Humble	2015	 	41		 	23		 	18		 	10		 	9		 	 $436 - $498	
Lakes of Creekside	2015	 	21		 	1		 	20		 	4		 	1		 	 $476 - $550	
Bridgeland '80, Cypress	2015	 	92		 	73		 	19		 	12		 	3		 	 $487 - $569	
Bridgeland Patio, Cypress	2016	 	10		 	—		 	10		 	—		 	—		 	 TBD	
Elyson 70', Cypress	2016	 	6		 	—		 	6		 	—		 	—		 	 $445 - $501	
Hidden Arbor, Cypress	2015	 	129		 	8		 	121		 	21		 	8		 	 $332 - $587	
Clear Lake, Houston	2015	 	774		 	150		 	624		 	42		 	40		 	 $360 - $660	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Barton Woods, Conroe	2013	 	118		 	117		 	1		 	1		 	15		 	 $447 - $624	
Villas at Oakhurst, Porter	 	 	55		 	55		 	—		 	—		 	5		 	 $542 - $650	
Woodtrace, Woodtrace	2014	 	36		 	16		 	20		 	4		 	5		 	 $430 - $479	
Northgrove, Tomball	2015	 	25		 	—		 	25		 	—		 	—		 	 $440 - $490	
Bender's Landing Estates, Spring	2014	 	104		 	36		 	68		 	2		 	13		 	 $457 - $567	
The Woodlands, Creekside Park	2015	 	92		 	6		 	86		 	5		 	6		 	 $430 - $618	
Waller County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cane Island, Katy	2015	 	17		 	9		 	8		 	3		 	9		 	 $498 - $574	
Mustang Estates	2016	 	350		 	—		 	350		 	—		 	—		 	 TBD	
Williamson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Crystal Falls	TBD	 	29		 	—		 	29		 	3		 	—		 	 $450 - $525	

- 53 -

	
																			
Rancho Sienna 60'	TBD	 	28		 	22		 	6		 	—		 	—		 	 TBD	
Hays County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belterra 60', Austin	2016	 	10		 	—		 	10		 	—		 	—		 	 $530 - $603	
Belterra 80', Austin	2016	 	30		 	3		 	27		 	2		 	3		 	 $530 - $603	
Headwaters, Dripping Springs	2016	 	14		 	—		 	14		 	—		 	—		 	 $410 - $512	
Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Avanti Custom Homes	2007	 	125		 	117		 	8		 	6		 	17		 	 $480 - $856	
Texas Casual Cottages, Round Top	2010	 	88		 	85		 	3		 	3		 	11		 	 $389 - $520	
Texas Casual Cottages, Hill Country	2012	 	46		 	45		 	1		 	1		 	1		 	 $443 - $500	
Texas Total	 	 	4,120		 	2,363		 	1,757		 	186		 	335		 	 	
Trendmaker Homes Total	 	 	4,120		 	2,363		 	1,757		 	186		 	335		 	 	

- 54 -

TRI Pointe Homes

	
																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
Southern California	 	 	 	 	 	 	 	 	 	 	 	 	 	
Orange County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Arcadia, Irvine	2013	 	61		 	59		 	2		 	2		 	13		 	 $1,199 - $1,420	
Arcadia II, Irvine	2014	 	66		 	66		 	—		 	—		 	12		 	 $1,199 - $1,281	
Fairwind, Huntington Beach	2015	 	80		 	80		 	—		 	—		 	17		 	 $937 - $1,032	
Cariz, Irvine	2014	 	112		 	112		 	—		 	—		 	18		 	 $495 - $649	
Messina, Irvine	2014	 	59		 	50		 	—		 	—		 	12		 	 $1,515 - $1,660	
Messina II, Irvine	2016	 	43		 	8		 	18		 	16		 	8		 	 $1,515 - $1,660	
Aria, Rancho Mission Viejo	2016	 	87		 	32		 	55		 	18		 	29		 	 $618 - $669	
Aria II, Rancho Mission Viejo	2017	 	64		 	—		 	64		 	—		 	—		 	 TBD	
Aubergine, Rancho Mission Viejo	2016	 	66		 	17		 	49		 	7		 	17		 	 $1,110 - $1,135	
Aubergine II, Rancho Mission Viejo	2017	 	57		 	—		 	57		 	—		 	—		 	 TBD	
Carlisle 10-Pack Garden Court, Irvine	2017	 	74		 	—		 	74		 	—		 	—		 	 $685 - $770	
Sterling Row Townhomes, Irvine	2017	 	96		 	—		 	96		 	—		 	—		 	 $589 - $702	
Varenna at Orchard Hills, Irvine	2016	 	71		 	—		 	37		 	8		 	—		 	 $1,160 - $1,235	
Alston, Anaheim	2017	 	75		 	—		 	75		 	—		 	—		 	 $780 - $820	
StrataPointe, Buena Park	2017	 	149		 	—		 	149		 	—		 	—		 	 $480 - $600	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Topazridge, Riverside	2012	 	68		 	68		 	—		 	—		 	5		 	 $464 - $529	
Topazridge II, Riverside	2014	 	49		 	49		 	—		 	—		 	4		 	 $459 - $515	
Aldea, Temecula	2014	 	90		 	90		 	—		 	—		 	13		 	 $262 - $298	
Kite Ridge, Riverside	2014	 	87		 	45		 	42		 	25		 	27		 	 $459 - $487	
Serrano Ridge at Sycamore Creek, Riverside	2015	 	87		 	32		 	55		 	35		 	28		 	 $397 - $423	
Terrassa Court, Corona	2015	 	94		 	8		 	86		 	12		 	8		 	 $400 - $438	
Terrassa Villas, Corona	2015	 	52		 	2		 	50		 	4		 	2		 	 $438 - $478	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Grayson, Santa Clarita	2015	 	119		 	34		 	85		 	16		 	28		 	 $520 - $553	
Garvey Square, El Monte	2017	 	102		 	—		 	102		 	—		 	—		 	 TBD	
San Bernardino County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona at Parkside, Ontario	2015	 	152		 	53		 	99		 	49		 	40		 	 $371 - $408	
Kensington at Park Place, Ontario	2015	 	67		 	28		 	39		 	21		 	22		 	 $492 - $524	
St. James at Park Place, Ontario	2015	 	57		 	44		 	13		 	7		 	27		 	 $456 - $468	
Ventura County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Westerlies, Oxnard	2015	 	116		 	9		 	107		 	47		 	9		 	 $388 - $512	
Southern California Total	 	 	2,300		 	886		 	1,354		 	267		 	339		 	 	
Northern California	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contra Costa County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Berkshire at Barrington, Brentwood	2014	 	89		 	86		 	3		 	—		 	23		 	 $508 - $587	
Hawthorne at Barrington, Brentwood	2014	 	105		 	83		 	22		 	12		 	25		 	 $572 - $620	
Marquette at Barrington, Brentwood	2015	 	90		 	36		 	54		 	18		 	19		 	 $480 - $740	
Wynstone at Barrington, Brentwood	2016	 	92		 	—		 	92		 	—		 	—		 	 $475 - $595	
Penrose at Barrington, Brentwood	2016	 	34		 	11		 	23		 	7		 	11		 	 $508 - $587	
Santa Clara County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cobblestone, Milpitas	2015	 	32		 	31		 	1		 	1		 	9		 	 $960 - $1,163	
Derose, Morgan Hill	2018	 	65		 	—		 	65		 	—		 	—		 	 $555 - $755	
Solano County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Redstone, Vacaville	2015	 	141		 	49		 	92		 	14		 	22		 	 $464 - $538	
Green Valley-Lewis, Fairfield	2018	 	95		 	—		 	95		 	—		 	—		 	 $475 - $510	
Green Valley-Westgate, Fairfield	2018	 	53		 	—		 	53		 	—		 	—		 	 $527 - $572	
San Joaquin County:	 	 	 	 	 	 	 	 	 	 	 	 	 	

- 55 -

	
																			
Ventana, Tracy	2015	 	93		 	47		 	46		 	10		 	25		 	 $447 - $552	
Sundance, Mountain House	2015	 	113		 	53		 	60		 	19		 	44		 	 $580 - $660	
Alameda County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cadence, Alameda Landing	2015	 	91		 	52		 	39		 	11		 	14		 	 $1,082 - $1,279	
Linear, Alameda Landing	2015	 	106		 	54		 	52		 	10		 	—		 	 $699 - $935	
Symmetry, Alameda Landing	2016	 	56		 	20		 	36		 	6		 	20		 	 $885 - $990	
Commercial, Alameda Landing	TBD	 	2		 	—		 	2		 	—		 	—		 	$620	
Parasol, Fremont	2016	 	39		 	—		 	39		 	19		 	—		 	$770 - $1,050	
Blackstone at the Cannery, Hayward SFA	2016	 	105		 	3		 	102		 	19		 	3		 	$563 - $678	
Blackstone at the Cannery, Hayward SFD	2016	 	52		 	6		 	46		 	9		 	6		 	$669 - $719	
Coopers Place, Livermore	2017	 	31		 	—		 	31		 	—		 	—		 	$655 - $662	
Slate at Jordan Ranch, Dublin	2017	 	56		 	—		 	56		 	—		 	—		 	$1,010 - $1,135	
Onyx at Jordan Ranch, Dublin	2017	 	105		 	—		 	57		 	—		 	—		 	$880 - $945	
Jordan Ranch II, Dublin	2018	 	45		 	—		 	45		 	—		 	—		 	$850 - $1,030	
Mission Stevenson, Fremont	2018	 	77		 	—		 	77		 	—		 	—		 	$655 - $925	
Palm Avenue, Fremont	2018	 	31		 	—		 	31		 	—		 	—		 	$2,000 - $2,200	
Northern California Total	 	 	1,798		 	531		 	1,219		 	155		 	221		 	 	
California Total	 	 	4,098		 	1,417		 	2,573		 	422		 	560		 	 	
Colorado	 	 	 	 	 	 	 	 	 	 	 	 	 	
Douglas County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Terrain 4000 Series, Castle Rock	2013	 	149		 	132		 	17		 	12		 	32		 	 $355 - $408	
Terrain 3500 Series, Castle Rock	2015	 	67		 	62		 	5		 	2		 	25		 	 $327 - $350	
Jefferson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Leyden Rock 4000 Series, Arvada	2014	 	51		 	51		 	—		 	—		 	6		 	 $390 - $446	
Leyden Rock 5000 Series, Arvada	2015	 	67		 	56		 	11		 	8		 	26		 	 $454 - $509	
Candelas 6000 Series, Arvada	2015	 	76		 	14		 	62		 	16		 	8		 	 $508 - $645	
Candelas 3500 Series, Arvada	2016	 	97		 	—		 	97		 	8		 	—		 	 $388 - $450	
Denver County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Platt Park North, Denver	2014	 	29		 	29		 	—		 	—		 	1		 	 $611 - $615	
Larimer County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Centerra 5000 Series, Loveland	2015	 	79		 	32		 	47		 	19		 	20		 	 $411 - $447	
Arapahoe County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Whispering Pines, Aurora	2015	 	115		 	—		 	115		 	8		 	—		 	 $560 - $626	
Adams County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amber Creek, Thornton	2017	 	121		 	—		 	121		 	—		 	—		 	 $391 - $457	
Colorado Total	 	 	851		 	376		 	475		 	73		 	118		 	 	
TRI Pointe Total	 	 	4,949		 	1,793		 	3,048		 	495		 	678		 	 	

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Winchester Homes

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2016	 	Lots
Owned as of
September 30,
2016 (3)	 	Backlog as of
September 30,
2016 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2016	 	Sales Price
Range
(in thousands) (6)	
Maryland	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anne Arundel County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Watson's Glen, Millersville	2015	 	103		 	4		 	99		 	—		 	2		 	Closed	
Frederick County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Landsdale Village SFD	2015	 	222		 	32		 	190		 	14		 	16		 	$495 - $607	
Landsdale Townhomes	2015	 	100		 	19		 	81		 	5		 	16		 	$335 - $375	
Landsdale TND Neo SFD	2015	 	77		 	8		 	69		 	6		 	8		 	$435 - $468	
Howard County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Walnut Creek, Ellicott City	2014	 	25		 	22		 	3		 	2		 	7		 	$1,182 - $1,409	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabin Branch SFD	2014	 	359		 	72		 	287		 	31		 	29		 	 $498 - $668	
Cabin Branch Boulevard Townhomes	TBD	 	121		 	—		 	121		 	—		 	—		 	TBD	
Cabin Branch Townhomes	2014	 	507		 	108		 	399		 	17		 	45		 	 $380 - $423	
Preserve at Stoney Spring	N/A	 	5		 	—		 	5		 	—		 	—		 	 N/A	
Preserve at Rock Creek, Rockville	2012	 	68		 	65		 	3		 	2		 	2		 	 $784 - $818	
Poplar Run Townhomes	2013	 	136		 	136		 	—		 	—		 	18		 	 $390 - $435	
Poplar Run SFD	2010	 	305		 	240		 	65		 	21		 	23		 	 $567 - $766	
Poplar Run Single Family Neos	2016	 	29		 	3		 	26		 	20		 	3		 	 $545 - $635	
Potomac Highlands, Potomac	2016	 	23		 	—		 	23		 	1		 	—		 	 $1,191 - $1,289	
Two Rivers, Crofton	2017	 	4		 	—		 	4		 	—		 	—		 	 TBD	
Glenmont MetroCenter, Silver Spring	2016	 	171		 	—		 	171		 	3		 	—		 	 $485 - $568	
Maryland Total	 	 	2,255		 	709		 	1,546		 	122		 	169		 	 	
Virginia	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fairfax County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reserve at Waples Mill, Oakton	2013	 	28		 	28		 	—		 	—		 	3		 	$1,460	
Stuart Mill & Timber Lake, Oakton	2014	 	14		 	6		 	8		 	2		 	1		 	$1,363 - $1,675	
Stuart Mill , Oakton	N/A	 	5		 	—		 	5		 	—		 	—		 	N/A	
Prince William County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Villages of Piedmont, Haymarket	2015	 	168		 	33		 	135		 	14		 	16		 	$370 - $428	
Loudoun County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
English Manor Villas	2014	 	58		 	37		 	21		 	13		 	12		 	$495 - $545	
Glenmere at Brambleton SFD	2014	 	100		 	83		 	17		 	16		 	20		 	$650 - $733	
Glenmere at Brambleton Townhomes	2014	 	107		 	92		 	15		 	10		 	20		 	$470 - $474	
Vistas at Lansdowne, Lansdowne	2015	 	120		 	27		 	93		 	9		 	9		 	$569 - $670	
Westbrook, Fairfax	2018	 	24		 	—		 	24		 	—		 	—		 	TBD	
Willowsford Grant II, Aldie	2016	 	14		 	—		 	14		 	2		 	—		 	$1,200 - $1,326	
Willowsford Greens, Aldie	2014	 	38		 	30		 	8		 	1		 	6		 	$760 - $840	
Virginia Total	 	 	676		 	336		 	340		 	67		 	87		 	 	
Winchester Total	 	 	2,931		 	1,045		 	1,886		 	189		 	256		 	 	
Combined Company Total	 	 	34,853		 	9,517		 	25,228		 	1,711		 	2,784		 	 	
__________

(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 September 30, 2016 include owned lots in backlog as of September 30, 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 September 30, 2016 , 1,130 homes are under construction, 282 homes have completed construction, and 299 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.  	

- 57 -

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.

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 or nine months ended September 30, 2016 . We did not enter into during the nine months ended September 30, 2016 , and currently do not hold, derivatives for trading or speculative purposes.

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 September 30, 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 or nine months ended September 30, 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 or nine months ended September 30, 2016 .

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PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	
Not applicable.

Item 1A.	Risk Factors	
See Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2015 and Part II, Item 1A "Risk Factors" in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2016 and June 30, 2016.  If any of the risks discussed in our Annual Report on Form 10-K or Quarterly Reports on Form 10-Q 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.  

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.  We are not obligated under the program to repurchase any specific number or amount of shares of common stock, 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.  
During the three months ended September 30, 2016 , we repurchased the following shares under our repurchase program:

															
 	 	Total number of shares purchased	 	Average price paid per share	 	Total number of shares purchased as part of publicly announced program	 	Approximate dollar value of shares that may yet be purchased under the program (1)	
July 1, 2016 to July 31, 2016	 	254,700		 	$	11.71		 	254,700		 	$	82,320,008		
August 1, 2016 to August 31, 2016	 	—		 	$	—		 	—		 	$	82,320,008		
September 1, 2016 to September 30, 2016	 	597,800		 	$	12.43		 	597,800		 	$	74,886,579		
Total	 	852,500		 	$	12.22		 	852,500		 	 	
__________
(1)     During the three and nine months ended September 30, 2016, there was an aggregate of 852,500 and 2,105,521 shares of common stock repurchased for $10.4 million and $25.1 million , respectively. No shares of common stock were repurchased during the year ended December 31, 2015.

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Item 6.	Exhibits  	

			
Exhibit
Number	 	Exhibit Description	
 	 	 	
2.1	 	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 3.1 to the Company’s Current Report on Form 8-K (filed October 27, 2016))	
 	 	 	
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 8‑K (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 8‑K (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 Notes 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 Pointe 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 Notes due 2024) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed June 19, 2014))	
 	 	 	
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))	

- 60 -

	
			
4.14	 	Third Supplemental Indenture, dated as of July 7, 2015, among TRI Pointe 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 8‑K (filed July 7, 2015))	
 	 	 	
4.15	 	Indenture, dated as of May 23, 2016, by and between TRI Pointe Group, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3ASR (filed May 23, 2016))	
 	 	 	
4.16	 	First Supplemental Indenture, dated as of May 26, 2016, among TRI Pointe Group, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the 4.875% Senior Notes due 2021 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed May 26, 2016))	
 	 	 	
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 September 30, 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.	

- 61 -

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	
Date: October 27, 2016	 	Chief Financial Officer	

- 62 -

Exhibit 31.1
SECTION 302 CERTIFICATION
I, Douglas F. Bauer, certify that:
		
(1)	I have reviewed this report on Form 10-Q of TRI Pointe Group, Inc.;	

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

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

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

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

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

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

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

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

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

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

		
Date: October 27, 2016	/s/ Douglas F. Bauer	
 	Douglas F. Bauer	
 	Chief Executive Officer (Principal Executive Officer)	

Exhibit 31.2
SECTION 302 CERTIFICATION
I, Michael D. Grubbs, certify that:
		
(1)	I have reviewed this report on Form 10-Q of TRI Pointe Group, Inc.;	

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

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

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

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

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

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

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

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

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

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

		
Date: October 27, 2016	/s/ Michael D. Grubbs	
 	Michael D. Grubbs	
 	Chief Financial Officer (Principal Financial Officer)	

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Report of TRI Pointe Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas F. Bauer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
		
1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
		
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

		
Date: October 27, 2016	/s/ Douglas F. Bauer	
 	Douglas F. Bauer	
 	Chief Executive Officer (Principal Executive Officer)	

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Report of TRI Pointe Group, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael D. Grubbs, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
		
1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
		
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

		
Date: October 27, 2016	/s/ Michael D. Grubbs	
 	Michael D. Grubbs	
 	Chief Financial Officer (Principal Financial Officer)