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, 2017
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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

				
Large accelerated filer	☒	Accelerated filer	☐	
Non-accelerated filer	☐   (Do not check if a smaller reporting company)	Smaller reporting company	☐	
 	 	Emerging Growth Company	☐	
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐     No   ☒
150,432,421 shares of common stock were issued and outstanding as of October 16, 2017.

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EXPLANATORY NOTE
As used in this Quarterly Report on Form 10-Q, references to “TRI Pointe”, “the Company”, “we”, “us”, or “our” (including in the consolidated financial statements and related notes thereto in this report) refer to TRI Pointe Group, Inc., a Delaware corporation (“TRI Pointe Group”) and its subsidiaries.

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TRI POINTE GROUP, INC.
FORM 10-Q
INDEX
September 30, 2017

	
			
 	 	Page
Number	
PART I.  FINANCIAL INFORMATION	
 	 	 	
Item 1.	Financial Statements	3	
 	 	 	
 	Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016	3	
 	 	 	
 	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016 (unaudited)	4	
 	 	 	
 	Consolidated Statements of Equity for the Year Ended December 31, 2016 and the Nine Months Ended September 30, 2017 (unaudited)	5	
 	 	 	
 	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016 (unaudited)	6	
 	 	 	
 	Condensed Notes to Consolidated Financial Statements (unaudited)	7	
 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35	
 	 	 	
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	61	
 	 	 	
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, 2017	 	December 31, 2016	
 	(unaudited)	 	 	
Assets	 	 	 	
Cash and cash equivalents	$	162,396		 	$	208,657		
Receivables	84,583		 	82,500		
Real estate inventories	3,303,421		 	2,910,627		
Investments in unconsolidated entities	17,616		 	17,546		
Goodwill and other intangible assets, net	161,094		 	161,495		
Deferred tax assets, net	108,664		 	123,223		
Other assets	58,292		 	60,592		
Total assets	$	3,896,066		 	$	3,564,640		
Liabilities	 	 	 	
Accounts payable	$	64,038		 	$	70,252		
Accrued expenses and other liabilities	316,487		 	263,845		
Unsecured revolving credit facility	200,000		 	200,000		
Seller financed loan	—		 	13,726		
Senior notes, net	1,469,558		 	1,168,307		
Total liabilities	2,050,083		 	1,716,130		
 	 	 	 	
Commitments and contingencies (Note 13)		 		
 	 	 	 	
Equity	 	 	 	
Stockholders’ Equity:	 	 	 	
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
   shares issued and outstanding as of September 30, 2017 and
   December 31, 2016, respectively	—		 	—		
Common stock, $0.01 par value, 500,000,000 shares authorized;
   150,429,021 and 158,626,229 shares issued and outstanding at
   September 30, 2017 and December 31, 2016, respectively	1,504		 	1,586		
Additional paid-in capital	780,715		 	880,822		
Retained earnings	1,060,210		 	947,039		
Total stockholders’ equity	1,842,429		 	1,829,447		
Noncontrolling interests	3,554		 	19,063		
Total equity	1,845,983		 	1,848,510		
Total liabilities and equity	$	3,896,066		 	$	3,564,640		
 
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,	
 	2017	 	2016	 	2017	 	2016	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	648,638		 	$	578,653		 	$	1,609,458		 	$	1,558,633		
Land and lot sales revenue	68,218		 	2,535		 	69,661		 	70,204		
Other operations revenue	584		 	606		 	1,752		 	1,790		
Total revenues	717,440		 	581,794		 	1,680,871		 	1,630,627		
Cost of home sales	521,918		 	462,323		 	1,294,563		 	1,219,560		
Cost of land and lot sales	12,001		 	1,734		 	13,299		 	16,973		
Other operations expense	575		 	575		 	1,726		 	1,724		
Sales and marketing	33,179		 	31,852		 	92,209		 	90,621		
General and administrative	32,956		 	31,278		 	101,293		 	90,293		
Homebuilding income from operations	116,811		 	54,032		 	177,781		 	211,456		
Equity in (loss) income of unconsolidated entities	—		 	(20	)	 	1,646		 	181		
Other income, net	26		 	21		 	147		 	287		
Homebuilding income before income taxes	116,837		 	54,033		 	179,574		 	211,924		
Financial Services:	 	 	 	 	 	 	 	
Revenues	295		 	235		 	881		 	762		
Expenses	82		 	72		 	233		 	183		
Equity in income of unconsolidated entities	1,351		 	1,247		 	2,911		 	3,246		
Financial services income before income taxes	1,564		 	1,410		 	3,559		 	3,825		
Income before income taxes	118,401		 	55,443		 	183,133		 	215,749		
Provision for income taxes	(46,112	)	 	(20,298	)	 	(69,824	)	 	(77,701	)	
Net income	72,289		 	35,145		 	113,309		 	138,048		
Net income attributable to noncontrolling interests	(25	)	 	(311	)	 	(138	)	 	(738	)	
Net income available to common stockholders	$	72,264		 	$	34,834		 	$	113,171		 	$	137,310		
Earnings per share	 		 	 		 	 	 	 	
Basic	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Diluted	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Weighted average shares outstanding	 	 	 	 	 	 	 	
Basic	151,214,744		 	160,614,055		 	155,238,206		 	161,456,520		
Diluted	152,129,825		 	161,267,509		 	155,936,076		 	161,916,352		
 
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, 2015	161,813,750		 	$	1,618		 	$	911,197		 	$	751,868		 	$	1,664,683		 	$	21,780		 	$	1,686,463		
Net income	—		 	—		 	—		 	195,171		 	195,171		 	962		 	196,133		
Shares issued under share-based awards	373,332		 	4		 	583		 	—		 	587		 	—		 	587		
Excess tax deficit of share-based awards, net	—		 	—		 	(165	)	 	—		 	(165	)	 	—		 	(165	)	
Minimum tax withholding paid on behalf of employees for restricted stock units	—		 	—		 	(1,359	)	 	—		 	(1,359	)	 	—		 	(1,359	)	
Stock-based compensation expense	—		 	—		 	12,612		 	—		 	12,612		 	—		 	12,612		
Share repurchases	(3,560,853	)	 	(36	)	 	(42,046	)	 	—		 	(42,082	)	 	—		 	(42,082	)	
Distributions to noncontrolling interests, net	—		 	—		 	—		 	—		 	—		 	(3,363	)	 	(3,363	)	
Net effect of consolidations, de-consolidations and other transactions	—		 	—		 	—		 	—		 	—		 	(316	)	 	(316	)	
Balance at December 31, 2016	158,626,229		 	1,586		 	880,822		 	947,039		 	1,829,447		 	19,063		 	1,848,510		
Net income	—		 	—		 	—		 	113,171		 	113,171		 	138		 	113,309		
Shares issued under share-based awards	797,497		 	8		 	3,285		 	—		 	3,293		 	—		 	3,293		
Minimum tax withholding paid on behalf of employees for restricted stock units	—		 	—		 	(2,896	)	 	—		 	(2,896	)	 	—		 	(2,896	)	
Stock-based compensation expense	—		 	—		 	11,631		 	—		 	11,631		 	—		 	11,631		
Share repurchases	(8,994,705	)	 	(90	)	 	(112,127	)	 	—		 	(112,217	)	 	—		 	(112,217	)	
Distributions to noncontrolling interests, net	—		 	—		 	—		 	—		 	—		 	(987	)	 	(987	)	
Net effect of consolidations, de-consolidations and other transactions	—		 	—		 	—		 	—		 	—		 	(14,660	)	 	(14,660	)	
Balance at September 30, 2017	150,429,021		 	$	1,504		 	$	780,715		 	$	1,060,210		 	$	1,842,429		 	$	3,554		 	$	1,845,983		
 
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,	
 	2017	 	2016	
Cash flows from operating activities:	 	 	 	
Net income	$	113,309		 	$	138,048		
Adjustments to reconcile net income to net cash used in operating activities:	 	 	 	
Depreciation and amortization	2,567		 	2,322		
Equity in income of unconsolidated entities, net	(4,557	)	 	(3,427	)	
Deferred income taxes, net	14,559		 	18,770		
Amortization of stock-based compensation	11,631		 	9,648		
Charges for impairments and lot option abandonments	1,203		 	678		
Excess tax deficit of share-based awards	—		 	(170	)	
Changes in assets and liabilities:	 	 	 	
Real estate inventories	(401,322	)	 	(442,671	)	
Receivables	(3,263	)	 	8,549		
Other assets	3,894		 	(16,806	)	
Accounts payable	(6,214	)	 	12,827		
Accrued expenses and other liabilities	52,640		 	5,876		
Returns on investments in unconsolidated entities, net	4,897		 	5,049		
Net cash used in operating activities	(210,656	)	 	(261,307	)	
Cash flows from investing activities:	 	 	 	
Purchases of property and equipment	(2,212	)	 	(2,056	)	
Proceeds from sale of property and equipment	6		 	—		
Investments in unconsolidated entities	(934	)	 	(32	)	
Net cash used in investing activities	(3,140	)	 	(2,088	)	
Cash flows from financing activities:	 	 	 	
Borrowings from debt	500,000		 	491,069		
Repayment of debt	(213,726	)	 	(276,826	)	
Debt issuance costs	(5,932	)	 	(5,061	)	
Net repayments of debt held by variable interest entities	—		 	(2,442	)	
Contributions from noncontrolling interests	—		 	1,955		
Distributions to noncontrolling interests	(987	)	 	(5,059	)	
Proceeds from issuance of common stock under share-based awards	3,293		 	461		
Minimum tax withholding paid on behalf of employees for share-based awards	(2,896	)	 	(1,359	)	
Share repurchases	(112,217	)	 	(25,113	)	
Net cash provided by financing activities	167,535		 	177,625		
Net decrease in cash and cash equivalents	(46,261	)	 	(85,770	)	
Cash and cash equivalents - beginning of period	208,657		 	214,485		
Cash and cash equivalents - end of period	$	162,396		 	$	128,715		
 
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.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016. 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. The results for the three months and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year due to seasonal variations and other factors.
The consolidated financial statements include the accounts of TRI Pointe Group and its wholly owned subsidiaries, as well as other entities in which TRI Pointe Group has a controlling interest and variable interest entities (“VIEs”) in which TRI Pointe Group is the primary beneficiary.  The noncontrolling interests as of September 30, 2017 and December 31, 2016 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.
Use of Estimates
The preparation of our 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 the prior year periods have been reclassified to conform to the presentation of the current year periods, including the Company's reclassification of restructuring charges, which was presented as a separate line item on the consolidated statement of operations in the prior year, and has been reclassified to general and administrative expense for both the current and prior years. This reclassification 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 (Codified as "ASC 606"). The core principle of ASC 606 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. ASC 606 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. ASC 606 is 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 ASC 606, and we expect to adopt the new standard under the modified retrospective approach. The Company's assessment efforts to date have included reviewing current accounting policies and processes, as well as assigning internal resources to assist in the process. Additionally, the Company has begun to review historical contracts and other arrangements to identify potential differences that could arise from the adoption of ASC 606. We are still evaluating the accounting for certain marketing costs and it is likely that the adoption of ASC 606 will impact the timing of recognition and classification in our consolidated financial statements of certain marketing costs that we incur to obtain sales contracts from our customers. For example, we currently capitalize and amortize various marketing costs with each home delivered in a community. Under the new guidance, these costs may need to be expensed when incurred or capitalized to other assets and amortized to selling expense. Although we are still evaluating our contracts, we do not believe the adoption of ASC 606 will have a material impact on the amount or timing of our home sales revenue, but could impact the amount and timing of land and lot sales. We are continuing to evaluate the exact impact the new standard will have on recording revenue and our marketing costs in our consolidated financial statements and related disclosures.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, (Codified as “ASC 842”), 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. ASC 842 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 ASC 842 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. On January 1, 2017, we adopted ASU 2016-09. This new guidance requires that we record excess tax benefit and tax deficiencies related to the settlement of employee stock-based compensation to the income tax expense line item on our consolidated statement of operations. We previously recorded the excess tax benefits and tax deficiencies to the additional paid-in capital line item on our consolidated balance sheets. Under the new guidance, the Company elected the option to no longer apply a forfeiture rate to our stock-based compensation expense, and to recognize forfeitures as they occur. The adoption of the aforementioned amendments in ASU 2016-09 were applied using the modified retrospective approach and did not have a material impact on our current or prior year financial statements, with no resulting cumulative-effect adjustment to retained earnings. The new guidance also requires excess tax benefits to be classified as an operating activity in the statement of cash flows rather than as a financing activity. Additionally, ASU 2016-09 requires that the minimum tax withholding paid on behalf of employees for share-based awards be classified as a financing activity in the statement of cash flows. Adoption of ASU 2016-09 did not result in any adjustments to prior period disclosures on the statement of cash flows.
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, however we do not believe the guidance will have a material impact on our financial statements upon adoption.
In January 2017, the FASB issued Accounting Standards Update No. 2017-04, (“ASU 2017-04”), Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment , which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not expect ASU 2017-04 to have a material impact on our financial statements.

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2.	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 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 at 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.
Corporate is 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 used for our consolidated financial statements, as described in Note 1, Organization 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.

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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,	
 	2017	 	2016	 	2017	 	2016	
Revenues	 	 	 	 	 	 	 	
Maracay Homes	$	78,167		 	$	68,024		 	$	204,981		 	$	161,318		
Pardee Homes	231,376		 	188,148		 	495,452		 	547,311		
Quadrant Homes	54,781		 	48,354		 	135,599		 	153,575		
Trendmaker Homes	53,787		 	64,251		 	171,615		 	172,509		
TRI Pointe Homes	239,110		 	167,769		 	524,159		 	452,553		
Winchester Homes	60,219		 	45,248		 	149,065		 	143,361		
Total homebuilding revenues	717,440		 	581,794		 	1,680,871		 	1,630,627		
Financial services	295		 	235		 	881		 	762		
Total	$	717,735		 	$	582,029		 	$	1,681,752		 	$	1,631,389		
 	 	 	 	 	 	 	 	
Income (loss) before income taxes	 	 	 	 	 	 	 	
Maracay Homes	$	6,431		 	$	4,385		 	$	14,429		 	$	9,544		
Pardee Homes	82,407		 	37,508		 	128,570		 	165,718		
Quadrant Homes	6,251		 	5,497		 	13,104		 	14,808		
Trendmaker Homes	3,233		 	3,516		 	9,657		 	9,439		
TRI Pointe Homes	24,382		 	11,723		 	39,779		 	34,651		
Winchester Homes	4,284		 	1,692		 	6,903		 	6,345		
Corporate	(10,151	)	 	(10,288	)	 	(32,868	)	 	(28,581	)	
Total homebuilding income before income taxes	116,837		 	54,033		 	179,574		 	211,924		
Financial services	1,564		 	1,410		 	3,559		 	3,825		
Total	$	118,401		 	$	55,443		 	$	183,133		 	$	215,749		

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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, 2017	 	December 31, 2016	
Real estate inventories	 	 	 	
Maracay Homes	$	246,223		 	$	228,965		
Pardee Homes	1,251,842		 	1,098,608		
Quadrant Homes	281,272		 	221,386		
Trendmaker Homes	213,179		 	211,035		
TRI Pointe Homes	981,813		 	868,088		
Winchester Homes	329,092		 	282,545		
Total	$	3,303,421		 	$	2,910,627		
 	 	 	 	
Total assets	 	 	 	
Maracay Homes	$	274,263		 	$	255,466		
Pardee Homes	1,338,304		 	1,201,302		
Quadrant Homes	312,160		 	242,208		
Trendmaker Homes	236,800		 	225,025		
TRI Pointe Homes	1,162,397		 	1,052,400		
Winchester Homes	351,717		 	305,379		
Corporate	210,574		 	275,923		
Total homebuilding assets	3,886,215		 	3,557,703		
Financial services	9,851		 	6,937		
Total	$	3,896,066		 	$	3,564,640		

		
3.	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,	
 	2017	 	2016	 	2017	 	2016	
Numerator:	 		 	 		 	 		 	 		
Net income available to common stockholders	$	72,264		 	$	34,834		 	$	113,171		 	$	137,310		
Denominator:	 		 	 		 	 		 	 		
Basic weighted-average shares outstanding	151,214,744		 	160,614,055		 	155,238,206		 	161,456,520		
Effect of dilutive shares:	 		 	 	 	 		 	 		
Stock options and unvested restricted stock units	915,081		 	653,454		 	697,870		 	459,832		
Diluted weighted-average shares outstanding	152,129,825		 	161,267,509		 	155,936,076		 	161,916,352		
Earnings per share	 		 	 		 	 		 	 		
Basic	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Diluted	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Antidilutive stock options and unvested restricted stock not included in diluted earnings per share	3,406,498		 	3,806,396		 	3,710,674		 	4,551,337		

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

								
 	September 30, 2017	 	December 31, 2016	
Escrow proceeds and other accounts receivable, net	$	38,660		 	$	35,625		
Warranty insurance receivable (Note 13)	45,923		 	46,875		
Total receivables	$	84,583		 	$	82,500		

Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables when collection becomes doubtful.  Receivables were net of allowances for doubtful accounts of $286,000 as of both September 30, 2017 and December 31, 2016 .

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

								
 	September 30, 2017	 	December 31, 2016	
Real estate inventories owned:	 	 	 	
Homes completed or under construction	$	1,045,648		 	$	659,210		
Land under development	1,873,806		 	1,824,989		
Land held for future development	135,801		 	226,915		
Model homes	218,274		 	155,039		
Total real estate inventories owned	3,273,529		 	2,866,153		
Real estate inventories not owned:	 	 	 	
Land purchase and land option deposits	26,992		 	26,174		
Consolidated inventory held by VIEs	2,900		 	18,300		
Total real estate inventories not owned	29,892		 	44,474		
Total real estate inventories	$	3,303,421		 	$	2,910,627		
 
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 7, Variable Interest Entities .
During the quarter ended September 30, 2017, our Pardee Homes reporting segment sold a parcel, consisting of 69 homebuilding lots, located in the Pacific Highlands Ranch community in San Diego, California. The land sold in this sale was classified as land under development and represented $66.8 million of land and lot sales revenue in the consolidated statements of operations for the three and nine months ended September 30, 2017.
During the quarter ended June 30, 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 this sale was classified as land under development and represented  $61.6 million  of land and lot sales revenue in the consolidated statements of operations for nine months ended September 30, 2016.

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

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Interest incurred	$	22,865		 	$	18,601		 	$	61,669		 	$	50,030		
Interest capitalized	(22,865	)	 	(18,601	)	 	(61,669	)	 	(50,030	)	
Interest expensed	$	—		 	$	—		 	$	—		 	$	—		
Capitalized interest in beginning inventory	$	173,261		 	$	151,347		 	$	157,329		 	$	140,311		
Interest capitalized as a cost of inventory	22,865		 	18,601		 	61,669		 	50,030		
Interest previously capitalized as a cost of
inventory, included in cost of sales	(15,899	)	 	(14,415	)	 	(38,771	)	 	(34,808	)	
Capitalized interest in ending inventory	$	180,227		 	$	155,533		 	$	180,227		 	$	155,533		
 
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 option abandonments
Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Real estate inventory impairments	$	—		 	$	—		 	$	267		 	$	—		
Land and lot option abandonments and pre-acquisition charges	374		 	389		 	936		 	678		
Total	$	374		 	$	389		 	$	1,203		 	$	678		
 
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.  
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. 
Real estate inventory impairments and land option abandonments are recorded in cost of home sales and cost of land and lot sales on the consolidated statements of operations.

		
6.	Investments in Unconsolidated Entities	
As of September 30, 2017 , 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 65% , depending on the investment, with no controlling interest held in any of these investments.

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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, 2017	 	December 31, 2016	
Limited liability company interests	$	14,433		 	$	14,327		
General partnership interests	3,183		 	3,219		
Total	$	17,616		 	$	17,546		
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 of unconsolidated entities.
Assets and liabilities of unconsolidated entities (in thousands):

	
								
 	September 30, 2017	 	December 31, 2016	
Assets	 	 	 	
Cash	$	11,895		 	$	9,796		
Receivables	4,871		 	10,203		
Real estate inventories	98,370		 	97,402		
Other assets	924		 	1,087		
Total assets	$	116,060		 	$	118,488		
Liabilities and equity	 	 	 	
Accounts payable and other liabilities	$	8,612		 	$	12,844		
Company’s equity	17,616		 	17,546		
Outside interests' equity	89,832		 	88,098		
Total liabilities and equity	$	116,060		 	$	118,488		
 
Results of operations from unconsolidated entities (in thousands):

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Net sales	$	5,404		 	$	4,619		 	$	15,722		 	$	12,516		
Other operating expense	(3,532	)	 	(2,913	)	 	(9,714	)	 	(8,067	)	
Other income	36		 	1		 	60		 	3		
Net income	$	1,908		 	$	1,707		 	$	6,068		 	$	4,452		
Company’s equity in income of unconsolidated entities	$	1,351		 	$	1,227		 	$	4,557		 	$	3,427		

		
7.	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.

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

																								
 	September 30, 2017	 	December 31, 2016	
 	Deposits	 	Remaining
Purchase
Price	 	Consolidated
Inventory
Held by VIEs	 	Deposits	 	Remaining
Purchase
Price	 	Consolidated
Inventory
Held by VIEs	
Consolidated VIEs	$	75		 	$	2,828		 	$	2,900		 	$	400		 	$	17,900		 	$	18,300		
Unconsolidated VIEs	2,450		 	74,034		 	N/A		 	2,375		 	49,016		 	N/A		
Other land option agreements	24,542		 	278,566		 	N/A		 	23,799		 	246,658		 	N/A		
Total	$	27,067		 	$	355,428		 	$	2,900		 	$	26,574		 	$	313,574		 	$	18,300		
 
Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not considered VIEs.
In addition to the deposits presented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $3.7 million and $3.6 million as of September 30, 2017 and December 31, 2016 , respectively. These pre-acquisition costs were included in real estate inventories as land under development on our consolidated balance sheets.  

		
8.	Goodwill and Other Intangible Assets	
As of September 30, 2017 and December 31, 2016 , $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 2, Segment Information . 
We have two intangible assets as of September 30, 2017 , 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 Weyerhaeuser Real Estate Company (“WRECO”) in 2014, which has an indefinite useful life.
Goodwill and other intangible assets consisted of the following (in thousands):

																								
 	September 30, 2017	 	December 31, 2016	
 	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		 	(6,189	)	 	21,790		 	27,979		 	(5,788	)	 	22,191		
Total	$	167,283		 	$	(6,189	)	 	$	161,094		 	$	167,283		 	$	(5,788	)	 	$	161,495		

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The remaining useful life of our amortizing intangible asset related to the Maracay Homes trade name was 8.4 and 9.2 years as of September 30, 2017 and December 31, 2016 , respectively. Amortization expense related to this intangible asset was $134,000 for each of the three-month periods ended September 30, 2017 and 2016 , respectively, and $401,000 for each of the nine -month periods ended September 30, 2017 and 2016 , respectively. Amortization of this intangible 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 2017 , the next four years and thereafter is (in thousands):

				
Remainder of 2017	$	133		
2018	534		
2019	534		
2020	534		
2021	534		
Thereafter	2,221		
Total	$	4,490		

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

								
 	September 30, 2017	 	December 31, 2016	
Prepaid expenses	$	19,117		 	$	24,495		
Refundable fees and other deposits	18,921		 	17,731		
Development rights, held for future use or sale	2,569		 	2,569		
Deferred loan costs - unsecured revolving credit facility	3,655		 	2,101		
Operating properties and equipment, net	10,696		 	10,884		
Income tax receivable	1,181		 	—		
Other	2,153		 	2,812		
Total	$	58,292		 	$	60,592		

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

								
 	September 30, 2017	 	December 31, 2016	
Accrued payroll and related costs	$	26,133		 	$	33,761		
Warranty reserves   (Note 13)	80,922		 	83,135		
Estimated cost for completion of real estate inventories	84,793		 	59,531		
Customer deposits	28,039		 	13,437		
Income tax liability to Weyerhaeuser (Note 16)	7,200		 	8,589		
Accrued income taxes payable	10,978		 	1,200		
Liability for uncertain tax positions (Note 16)	1,416		 	—		
Accrued interest	22,599		 	11,570		
Other tax liability	36,657		 	34,961		
Other	17,750		 	17,661		
Total	$	316,487		 	$	263,845		

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

	
								
 	September 30, 2017	 	December 31, 2016	
4.375% Senior Notes due June 15, 2019	$	450,000		 	$	450,000		
4.875% Senior Notes due July 1, 2021	300,000		 	300,000		
5.875% Senior Notes due June 15, 2024	450,000		 	450,000		
5.250% Senior Notes due June 1, 2027	300,000		 	—		
Discount and deferred loan costs	(30,442	)	 	(31,693	)	
Total	$	1,469,558		 	$	1,168,307		
 
In June 2017, TRI Pointe Group issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the "2027 Notes") at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million , after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity, beginning on December 1, 2017.
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.
TRI Pointe Group and its 100% owned subsidiary TRI Pointe Homes, Inc. ("TRI Pointe Homes") are co-issuers of the 4.375% Senior Notes due 2019 (the "2019 Notes") and the 5.875% Senior Notes due 2024 (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, 2017 , no principal has been paid on the 2019 Notes, 2021 Notes, 2024 Notes and 2027 Notes (together, the "Senior Notes"), and there was $21.1 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 $22.1 million and $10.7 million as of September 30, 2017 and December 31, 2016 , respectively.
Unsecured Revolving Credit Facility
Unsecured revolving credit facility consisted of the following (in thousands):

								
 	September 30, 2017	 	December 31, 2016	
Unsecured revolving credit facility	$	200,000		 	$	200,000		
 
On June 20, 2017, the Company modified its existing unsecured revolving credit facility (the “Credit Facility”) to extend the maturity date by two years to May 18, 2021, while decreasing the total commitments under the Credit Facility to $600 million from $625 million . In addition, the Credit Facility was modified to give the Company the option to make offers to the lenders to extend the maturity date of the facility in twelve-month increments, subject to the satisfaction of certain conditions. The Credit Facility 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 1.25% to 2.00% , depending on the Company’s leverage ratio. As of September 30, 2017 , the outstanding balance under the Credit Facility was $200.0 million with an interest rate of 2.99%  per annum and there was $392.2 million of availability after considering the borrowing base provisions and outstanding letters of

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credit.  As of September 30, 2017 there was $3.7 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, 2021.  Accrued interest related to the Credit Facility was $505,000 and $658,000 as of September 30, 2017 and December 31, 2016 , respectively.
At September 30, 2017 we had outstanding letters of credit of $7.8 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, 2017	 	December 31, 2016	
Seller financed loans	$	—		 	$	13,726		
 
Accrued interest on a seller financed loan outstanding as of December 31, 2016 was $519,000 .
Interest Incurred
During the three-month periods ended September 30, 2017 and 2016 , the Company incurred interest of $22.9 million and $18.6 million , respectively, related to all debt during the period.  Included in interest incurred was amortization of deferred financing and Senior Note discount costs of  $2.0 million  and  $1.8 million  for the three months ended  September 30, 2017  and 2016, respectively. During the nine-month periods ended September 30, 2017 and 2016, the Company incurred interest of $61.7 million and $50.0 million , respectively, related to all debt during the period. Included in interest incurred was amortization of deferred financing and Senior Notes discount costs of $5.6 million and $4.7 million for the nine months ended September 30, 2017 and 2016 , respectively.  Accrued interest related to all outstanding debt at September 30, 2017 and December 31, 2016 was $22.6 million and $11.6 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, 2017 and December 31, 2016 .

		
12.	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, 2017 and December 31, 2016 , related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

																		
 	 	 	September 30, 2017	 	December 31, 2016	
 	Hierarchy	 	Book Value	 	Fair Value	 	Book Value	 	Fair Value	
Senior Notes (1)	Level 2	 	$	1,490,706		 	$	1,558,500		 	$	1,189,180		 	$	1,219,125		
Unsecured revolving credit facility (2)	Level 2	 	$	200,000		 	$	195,058		 	$	200,000		 	$	177,410		
Seller financed loan (3)	Level 2	 	$	—		 	$	—		 	$	13,726		 	$	13,189		
  __________
		
(1)  	The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $21.1 million and $20.9 million as of September 30, 2017 and December 31, 2016 , respectively. The estimated fair value of the Senior Notes at September 30, 2017 and December 31, 2016 is based on quoted market prices.	
		
(2)  	The estimated fair value of the Credit Facility at September 30, 2017 and December 31, 2016 is based on a treasury curve analysis.	
		
(3)  	The estimated fair value of the seller financed loan at December 31, 2016 is based on a treasury curve analysis.	

At September 30, 2017 and December 31, 2016 , 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 indicating 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, 2017	 	Year Ended December 31, 2016	
 	Impairment
Charge	 	Fair Value
Net of
Impairment	 	Impairment
Charge	 	Fair Value
Net of
Impairment	
Real estate inventories   (1)	$	267		 	$	1,574		 	$	—		 	$	—		
  __________
(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 an analysis of future undiscounted net cash flows.  In the case of lots for sale, fair value was determined based on recent land and lot sales for similar assets.

13.	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 $100,000 and $225,000 as of September 30, 2017 and December 31, 2016 , respectively.

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On April 3, 2017, Pardee Homes was named as a defendant in a lawsuit filed in San Diego County Superior Court by Scripps Health (“Scripps”) related to the April 1989 sale by Pardee Homes of real property located in Carmel Valley, California to Scripps pursuant to a purchase agreement dated December 18, 1987 (as amended, the “Purchase Agreement”). In March 2003, Scripps contacted Pardee Homes and alleged Pardee Homes had breached a covenant in the Purchase Agreement by failing to record a restriction against the development of the surrounding property then owned by Pardee Homes for medical office use. In November 2003, the parties entered into a tolling agreement, pursuant to which the parties agreed to toll any applicable statutes of limitation from November 3, 2003 until the expiration of the agreement. The tolling agreement did not revive any cause of action already time barred by a statute of limitation as of November 3, 2003. The tolling agreement was terminated as of February 21, 2017. Pardee Homes became an indirect, wholly owned subsidiary of TRI Pointe on July 7, 2014 in connection with TRI Pointe’s acquisition of WRECO.
We intend to vigorously defend the action, and intend to continue challenging Scripps' claims. Although we cannot predict or determine the timing or final outcome of the lawsuit or the effect that any adverse findings or determinations may have on us, we believe Scripps' claims against Pardee Homes are without merit and that this dispute will not have a material impact on our business, liquidity, financial condition and results of operations. An unfavorable determination could result in the payment by us of monetary damages, which could be significant. The complaint does not indicate the amount of relief sought, and an estimate of possible loss or range of loss cannot presently be made with respect to this matter. No reserve with respect to this matter has been recorded on our consolidated financial statements.
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 warranty and construction defect-related claims. We also generally require our subcontractors and design professionals to indemnify us for liabilities arising from their work, subject to various limitations. However, such indemnity is significantly limited with respect to certain subcontractors that are added to our general liability insurance policy. 
Our warranty reserve and related estimated insurance recoveries are based on actuarial analysis that uses our historical claim and expense data, as well as industry data to estimate these overall costs and related recoveries. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a warranty or construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of product we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for variability in these underlying assumptions, our actual future costs could differ from those estimated. There can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers, that we will be able to renew our insurance coverage or renew it at reasonable rates, that we will not be liable for damages, cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence or building related claims or that claims will not arise out of uninsurable events or circumstances not covered by insurance and not subject to effective indemnification agreements with certain subcontractors.
We also record expected recoveries from insurance carriers based on actual insurance claims made and actuarially determined amounts that depend on various factors, including the above-described reserve estimates, our insurance policy coverage limits for the applicable policy years and historical recovery rates. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. Outstanding warranty insurance receivables were $45.9 million and $46.9 million as of September 30, 2017 and December 31, 2016 , respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheet.

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Warranty reserve activity consisted of the following (in thousands):

	
																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Warranty reserves, beginning of period (1)	$	80,128		 	$	45,272		 	$	83,135		 	$	45,948		
Warranty reserves accrued	4,448		 	3,329		 	10,122		 	8,373		
Adjustments to pre-existing reserves	400		 	200		 	1,021		 	460		
Warranty expenditures	(4,054	)	 	(3,136	)	 	(13,356	)	 	(9,116	)	
Warranty reserves, end of period	$	80,922		 	$	45,665		 	$	80,922		 	$	45,665		
  __________
		
(1)  	Included in the 2017 opening balance is approximately $38.0 million of additional warranty liabilities estimated to be covered by our insurance policies that were adjusted to present the warranty reserves and related estimated warranty insurance receivable on a gross basis at December 31, 2016. Of the $38.0 million , approximately $36.5 million related to prior year estimated warranty insurance recoveries.	

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, 2017 and December 31, 2016 , the Company had outstanding surety bonds totaling $544.3 million and $449.6 million , respectively. The beneficiaries of the bonds are various municipalities.

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14.	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, 2017 , there were 6,207,889 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,	
 	2017	 	2016	 	2017	 	2016	
Total stock-based compensation	$	3,887		 	$	3,285		 	$	11,631		 	$	9,648		
 
Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations.  As of September 30, 2017 , total unrecognized stock-based compensation related to all stock-based awards was $21.3 million and the weighted average term over which the expense was expected to be recognized was 1.7 years .
Summary of Stock Option Activity
The following table presents a summary of stock option awards for the nine months ended September 30, 2017 :

														
 	Options	 	Weighted
Average
Exercise
Price
Per Share	 	Weighted
Average
Remaining
Contractual
Life	 	Aggregate
Intrinsic
Value
(in thousands)	
Options outstanding at December 31, 2016	2,971,370		 	$	13.12		 	4.4		 	$	1,568		
Granted	—		 	—		 	—		 	—		
Exercised	(318,419	)	 	10.34		 	—		 	—		
Forfeited	(686,720	)	 	14.16		 	—		 	—		
Options outstanding at September 30, 2017	1,966,231		 	13.44		 	5.0		 	2,322		
Options exercisable at September 30, 2017	1,851,395		 	13.39		 	4.9		 	2,322		

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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, 2017 :

											
 	Restricted
Stock
Units	 	Weighted
Average
Grant Date
Fair Value
Per Share	 	Aggregate
Intrinsic
Value
(in thousands)	
Nonvested RSUs at December 31, 2016	3,412,719		 	$	9.77		 	$	39,178		
Granted	1,670,936		 	11.00		 	22,508		
Vested	(714,612	)	 	12.34		 	—		
Forfeited	(40,362	)	 	11.68		 	—		
Nonvested RSUs at September 30, 2017	4,328,681		 	9.80		 	58,307		
 
On March 1, 2016, the Company granted an aggregate of 1,120,677 time-vested RSUs to employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three year period.  The fair value of each RSU granted on March 1, 2016 was measured using a price of $10.49 per share, which was the closing stock price on the date of grant.  Each award will be expensed on a straight-line basis over the vesting period.
On March 1, 2016, the Company granted 297,426 , 285,986 and 125,834 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the Company’s percentage attainment of specified threshold, target and maximum performance goals. The percentage of these performance-based RSUs that vest will be determined by comparing the Company’s total stockholder return (“TSR”) to the TSRs 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. On March 27, 2017, 21,276 of these RSUs vested in their entirety and on May 25, 2017, 53,190 of these RSUs vested in their entirety. 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 was expensed on a straight-line basis over the vesting period.
On February 27, 2017, the Company granted an aggregate of 990,279 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 February 27, 2017 was measured using a price of $12.10 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 February 27, 2017, the Company granted  257,851 , 247,933 and 119,008 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively. These performance-based RSUs are allocated in equal parts to two separate performance metrics: (i) TSR, with vesting based on the Company’s TSR relative to its peer-group homebuilders; and (ii) earnings per share. 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 performance period for these performance-based RSUs is January 1, 2017 to December 31, 2019. The fair value of the performance-based RSUs related to the TSR metric was determined to be $6.16 per share 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  $12.10  per share, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

On May 30, 2017, the Company granted an aggregate of 55,865 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 2018 Annual Meeting of Stockholders. The fair value of each RSU granted on May 30, 2017 was measured using a price of $12.53 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.

		
15.	Stock Repurchase Program	
On February 23, 2017, our board of directors approved a new stock repurchase program, authorizing the repurchase of our common stock with an aggregate value of up to $100 million through March 31, 2018 (the “2017 Repurchase Program”).  On July 25, 2017 our board of directors authorized the repurchase of up to an additional $50 million of our common stock under the 2017 Repurchase Program, increasing the aggregate authorization from $100 million to $150 million . Purchases of common stock pursuant to the 2017 Repurchase Program 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 Securities Exchange Act of 1934, as amended.  We are not obligated under the 2017 Repurchase 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, 2017 , we repurchased and retired 975,700 shares of our common stock under the 2017 Repurchase Program at a weighted average price of $12.83 per share for a total cost of $12.5 million . For the nine months ended September 30, 2017 , we repurchased and retired 8,994,705 shares of our common stock under the 2017 Repurchase Program at a weighted average price of $12.48 per share for a total cost of $112.2 million .

16.	Income Taxes	
We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rates for the years in which taxes are expected to be paid or recovered.  Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740.  We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable.  Our assessment considers, among other things, the nature, frequency and severity of our current and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods and tax planning alternatives.
We had net deferred tax assets of $108.7 million and $123.2 million as of September 30, 2017 and December 31, 2016 , respectively.  We had a valuation allowance related to those net deferred tax assets of $323,000 as of both September 30, 2017 and December 31, 2016 .  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.

- 24 -

TRI Pointe has certain liabilities with Weyerhaeuser Company (“Weyerhaeuser”) related to a tax sharing agreement.  As of September 30, 2017 and December 31, 2016 , we had an income tax liability to Weyerhaeuser of $7.2 million and $8.6 million , respectively. The income tax liability to Weyerhaeuser is recorded in accrued expenses and other liabilities on the accompanying consolidated balance sheets.
Our provision for income taxes totaled $46.1 million and $20.3 million for the three months ended September 30, 2017 and 2016 , respectively.  Our provision for income taxes totaled $69.8 million and $77.7 million for the nine months ended September 30, 2017 and 2016 , respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense.  The Company had $1.4 million of uncertain tax positions recorded as of September 30, 2017 . The Company had no uncertain tax positions as of December 31, 2016 .  The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

17.	Related Party Transactions	
We had no related party transactions for the nine months ended September 30, 2017 .
In May of 2016, we entered into an agreement with an affiliate of Starwood Capital Group, a then greater than 5% holder of our common stock, to acquire 52 lots located in Azusa, California, for an aggregate purchase price of $18.4 million . In October of 2016, we acquired 27 of these lots for a purchase price of $9.6 million . Our former Chairman of the Board is also the Chairman and Chief Executive Officer of Starwood Capital Group. This acquisition was approved by our independent directors. In August of 2016, we entered into an agreement with an affiliate of Starwood Capital Group to purchase 257 lots located in Castle Rock, Colorado, for an aggregate purchase price of approximately $8.6 million . In October of 2016, we acquired 126 of these lots for a purchase price of $4.2 million . This acquisition was approved by our independent directors. As of March 27, 2017, Starwood Capital Group is no longer a related party.
In 2016, we acquired 93 lots located in Dublin, California, for a purchase price of approximately $25.5 million from an affiliate of BlackRock, Inc., a greater than 5% holder of our common stock. This acquisition was approved by the vote of our independent directors in accordance with the requirements of the Company’s Code of Business Conduct and Ethics.

18.	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,	
 	2017	 	2016	
Supplemental disclosure of cash flow information:	 	 	 	
Cash paid during the period for:	 	 	 	
Interest, net of amounts capitalized of $61,669 and $50,030 (Note 5)	$	—		 	$	—		
Income taxes	$	44,784		 	$	89,269		
Supplemental disclosures of noncash activities:	 	 	 	
Amortization of senior note discount capitalized to real estate inventory	$	1,525		 	$	1,321		
Amortization of deferred loan costs capitalized to real estate inventory	$	4,104		 	$	2,865		
Effect of net consolidation and de-consolidation of variable interest entities:	 	 	 	
Decrease in consolidated real estate inventory not owned	$	(14,660	)	 	$	3,484		
Decrease in noncontrolling interests	$	14,660		 	$	(3,484	)	

- 25 -

		
19.	Supplemental Guarantor Information	
2021 Notes and 2027 Notes
On May 26, 2016, TRI Pointe Group issued the 2021 Notes. On June 5, 2017, TRI Pointe Group issued the 2027 Notes. All of TRI Pointe Group’s 100% owned subsidiaries that are guarantors (each a “Guarantor” and, collectively, the “Guarantors”) of the Credit Facility, including TRI Pointe Homes, are party to supplemental indentures pursuant to which they jointly and severally guarantee TRI Pointe Group’s obligations with respect to the 2021 Notes and the 2027 Notes. Each Guarantor of the 2021 Notes and the 2027 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 and the 2027 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 and the 2027 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 or the 2027 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, 2017 and December 31, 2016 , condensed consolidating statements of operations for the three and nine months ended September 30, 2017 and 2016 and condensed consolidating statement of cash flows for the nine months ended September 30, 2017 and 2016 .  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”.

- 26 -

Condensed Consolidating Balance Sheet (in thousands):

	
																
 	September 30, 2017	
 	Issuer	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	86,046		 	$	76,350		 	$	—		 	$	162,396		
Receivables	29,963		 	54,620		 	—		 	84,583		
Intercompany receivables	940,894		 	—		 	(940,894	)	 	—		
Real estate inventories	981,813		 	2,321,608		 	—		 	3,303,421		
Investments in unconsolidated entities	—		 	17,616		 	—		 	17,616		
Goodwill and other intangible assets, net	156,604		 	4,490		 	—		 	161,094		
Investments in subsidiaries	1,388,227		 	—		 	(1,388,227	)	 	—		
Deferred tax assets, net	15,644		 	93,020		 	—		 	108,664		
Other assets	7,953		 	50,339		 	—		 	58,292		
Total Assets	$	3,607,144		 	$	2,618,043		 	$	(2,329,121	)	 	$	3,896,066		
 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	
Accounts payable	$	8,561		 	$	55,477		 	$	—		 	$	64,038		
Intercompany payables	—		 	940,894		 	(940,894	)	 	—		
Accrued expenses and other liabilities	86,596		 	229,891		 	—		 	316,487		
Unsecured revolving credit facility	200,000		 	—		 	—		 	200,000		
Senior notes	1,469,558		 	—		 	—		 	1,469,558		
Total Liabilities	1,764,715		 	1,226,262		 	(940,894	)	 	2,050,083		
 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	
Total stockholders’ equity	1,842,429		 	1,388,227		 	(1,388,227	)	 	1,842,429		
Noncontrolling interests	—		 	3,554		 	—		 	3,554		
Total Equity	1,842,429		 	1,391,781		 	(1,388,227	)	 	1,845,983		
Total Liabilities and Equity	$	3,607,144		 	$	2,618,043		 	$	(2,329,121	)	 	$	3,896,066		

- 27 -

Condensed Consolidating Balance Sheet (in thousands):

	
																
 	December 31, 2016	
 	Issuer	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	141,568		 	$	67,089		 	$	—		 	$	208,657		
Receivables	26,692		 	55,808		 	—		 	82,500		
Intercompany receivables	775,321		 	—		 	(775,321	)	 	—		
Real estate inventories	868,088		 	2,042,539		 	—		 	2,910,627		
Investments in unconsolidated entities	—		 	17,546		 	—		 	17,546		
Goodwill and other intangible assets, net	156,604		 	4,891		 	—		 	161,495		
Investments in subsidiaries	1,285,295		 	—		 	(1,285,295	)	 	—		
Deferred tax assets, net	15,644		 	107,579		 	—		 	123,223		
Other assets	11,401		 	49,191		 	—		 	60,592		
Total Assets	$	3,280,613		 	$	2,344,643		 	$	(2,060,616	)	 	$	3,564,640		
 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	
Accounts payable	$	20,637		 	$	49,615		 	$	—		 	$	70,252		
Intercompany payables	—		 	775,321		 	(775,321	)	 	—		
Accrued expenses and other liabilities	48,496		 	215,349		 	—		 	263,845		
Unsecured revolving credit facility	200,000		 	—		 	—		 	200,000		
Seller financed loans	13,726		 	—		 	—		 	13,726		
Senior notes	1,168,307		 	—		 	—		 	1,168,307		
Total Liabilities	1,451,166		 	1,040,285		 	(775,321	)	 	1,716,130		
 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	
Total stockholders’ equity	1,829,447		 	1,285,295		 	(1,285,295	)	 	1,829,447		
Noncontrolling interests	—		 	19,063		 	—		 	19,063		
Total Equity	1,829,447		 	1,304,358		 	(1,285,295	)	 	1,848,510		
Total Liabilities and Equity	$	3,280,613		 	$	2,344,643		 	$	(2,060,616	)	 	$	3,564,640		

- 28 -

Condensed Consolidating Statement of Operations (in thousands):

	
																
 	Three Months Ended September 30, 2017	
 	Issuer	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	239,110		 	$	409,528		 	$	—		 	$	648,638		
Land and lot sales revenue	—		 	68,218		 	—		 	68,218		
Other operations revenue	—		 	584		 	—		 	584		
Total revenues	239,110		 	478,330		 	—		 	717,440		
Cost of home sales	200,384		 	321,534		 	—		 	521,918		
Cost of land and lot sales	—		 	12,001		 	—		 	12,001		
Other operations expense	—		 	575		 	—		 	575		
Sales and marketing	8,816		 	24,363		 	—		 	33,179		
General and administrative	15,560		 	17,396		 	—		 	32,956		
Homebuilding income from operations	14,350		 	102,461		 	—		 	116,811		
Equity in income of unconsolidated entities	—		 	—		 	—		 	—		
Other income, net	15		 	11		 	—		 	26		
Homebuilding income before income taxes	14,365		 	102,472		 	—		 	116,837		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	295		 	—		 	295		
Expenses	—		 	82		 	—		 	82		
Equity in income of unconsolidated entities	—		 	1,351		 	—		 	1,351		
Financial services income before income taxes	—		 	1,564		 	—		 	1,564		
Income before income taxes	14,365		 	104,036		 	—		 	118,401		
Equity of net income of subsidiaries	59,725		 	—		 	(59,725	)	 	—		
Provision for income taxes	(1,826	)	 	(44,286	)	 	—		 	(46,112	)	
Net income	72,264		 	59,750		 	(59,725	)	 	72,289		
Net income attributable to noncontrolling interests	—		 	(25	)	 	—		 	(25	)	
Net income available to common stockholders	$	72,264		 	$	59,725		 	$	(59,725	)	 	$	72,264		

- 29 -

 
Condensed Consolidating Statement of Operations (in thousands):

	
																
 	Three Months Ended September 30, 2016	
 	Issuer	 	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		 	16,086		 	—		 	31,278		
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		

- 30 -

Condensed Consolidating Statement of Operations (in thousands):

																
 	Nine Months Ended September 30, 2017	
 	Issuer	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Homebuilding:	 	 	 	 	 	 	 	
Home sales revenue	$	524,159		 	$	1,085,299		 	$	—		 	$	1,609,458		
Land and lot sales revenue	—		 	69,661		 	—		 	69,661		
Other operations revenue	—		 	1,752		 	—		 	1,752		
Total revenues	524,159		 	1,156,712		 	—		 	1,680,871		
Cost of home sales	445,501		 	849,062		 	—		 	1,294,563		
Cost of land and lot sales	—		 	13,299		 	—		 	13,299		
Other operations expense	—		 	1,726		 	—		 	1,726		
Sales and marketing	22,265		 	69,944		 	—		 	92,209		
General and administrative	49,113		 	52,180		 	—		 	101,293		
Homebuilding income from operations	7,280		 	170,501		 	—		 	177,781		
Equity in income of unconsolidated entities	—		 	1,646		 	—		 	1,646		
Other income, net	33		 	114		 	—		 	147		
Homebuilding income before income taxes	7,313		 	172,261		 	—		 	179,574		
Financial Services:	 	 	 	 	 	 	 	
Revenues	—		 	881		 	—		 	881		
Expenses	—		 	233		 	—		 	233		
Equity in income of unconsolidated entities	—		 	2,911		 	—		 	2,911		
Financial services income before income taxes	—		 	3,559		 	—		 	3,559		
Income before income taxes	7,313		 	175,820		 	—		 	183,133		
Equity of net income of subsidiaries	103,177		 	—		 	(103,177	)	 	—		
Benefit (provision) for income taxes	2,681		 	(72,505	)	 	 	 	(69,824	)	
Net income	113,171		 	103,315		 	(103,177	)	 	113,309		
Net income attributable to noncontrolling interests	—		 	(138	)	 	—		 	(138	)	
Net income available to common stockholders	$	113,171		 	$	103,177		 	$	(103,177	)	 	$	113,171		

- 31 -

Condensed Consolidating Statement of Operations (in thousands):

																
 	Nine Months Ended September 30, 2016	
 	Issuer	 	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		 	47,309		 	—		 	90,293		
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		

- 32 -

Condensed Consolidating Statement of Cash Flows (in thousands):

	
																
 	Nine Months Ended September 30, 2017	
 	Issuer	 	Guarantor
Subsidiaries	 	Consolidating
Adjustments	 	Consolidated
TRI Pointe
Group, Inc.	
Cash flows from operating activities	 	 	 	 	 	 	 	
Net cash used in operating activities	$	(60,816	)	 	$	(149,840	)	 	$	—		 	$	(210,656	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Purchases of property and equipment	(1,473	)	 	(739	)	 	—		 	(2,212	)	
Proceeds from sale of property and equipment	—		 	6		 	—		 	6		
Investments in unconsolidated entities	—		 	(934	)	 	—		 	(934	)	
Intercompany	(161,755	)	 	—		 	161,755		 	—		
Net cash (used in) provided by investing activities	(163,228	)	 	(1,667	)	 	161,755		 	(3,140	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	
Borrowings from debt	500,000		 	—		 	—		 	500,000		
Repayment of debt	(213,726	)	 	—		 	—		 	(213,726	)	
Debt issuance costs	(5,932	)	 	—		 	—		 	(5,932	)	
Distributions to noncontrolling interests	—		 	(987	)	 	—		 	(987	)	
Proceeds from issuance of common stock under
   share-based awards	3,293		 	—		 	—		 	3,293		
Minimum tax withholding paid on behalf of employees for
   restricted stock units	(2,896	)	 	—		 	—		 	(2,896	)	
Share repurchases	(112,217	)	 	—		 	—		 	(112,217	)	
Intercompany	—		 	161,755		 	(161,755	)	 	—		
Net cash provided by (used in) financing activities	168,522		 	160,768		 	(161,755	)	 	167,535		
Net (decrease) increase in cash and cash equivalents	(55,522	)	 	9,261		 	—		 	(46,261	)	
Cash and cash equivalents - beginning of period	141,568		 	67,089		 	—		 	208,657		
Cash and cash equivalents - end of period	$	86,046		 	$	76,350		 	$	—		 	$	162,396		

- 33 -

Condensed Consolidating Statement of Cash Flows (in thousands):

	
																
 	Nine Months Ended September 30, 2016	
 	Issuer	 	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 notes payable	491,069		 	—		 	—		 	491,069		
Repayment of notes payable	(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) increase 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		

- 34 -

		
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 that are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are based on our current intentions, beliefs, expectations and predictions for the future, and you should not place undue reliance on these statements. These statements use forward-looking terminology, are based on various assumptions made by us, 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 what effect it will have on our operations, financial condition, or share price.
We undertake no, and hereby disclaim any, obligation to update or revise any forward-looking statements, unless required by law. However, we reserve the right to make such updates or revisions from time to time by press release, periodic report, or other method of public disclosure without the need for specific reference to this Quarterly Report on Form 10-Q. No such update or revision shall be deemed to indicate that other statements not addressed by such update or revision remain correct or create an obligation to provide any other updates or revisions.
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,” “target,” “will,” “would,” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, the outcome of legal proceedings, the anticipated impact of natural disasters on our operations, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects and capital spending.
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 strength of the U.S. dollar;	
		
•	market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;	
		
•	levels of competition;	
		
•	the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;	
		
•	global economic conditions;	
		
•	raw material prices;	
		
•	oil and other energy prices;	
		
•	the effect of weather, including the re-occurrence of drought conditions in California;  	
		
•	the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters;	
		
•	transportation costs;	
		
•	federal and state tax policies;	
		
•	the effect of land use, environment and other governmental laws and regulations;	
		
•	legal proceedings or disputes and the adequacy of reserves;	
		
•	risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects;	
		
•	change in accounting principles;	

- 35 -

		
•	risks related to unauthorized access to our computer systems, theft of our homebuyers’ 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 Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2016 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.
Overview and Outlook
We continue to be encouraged by the strength of the overall U.S. new-home market, which continues to be supported by strong general economic conditions, low unemployment levels, modest wage gains, favorable interest rates, and increasing consumer confidence combined with a limited supply of new and existing 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 mostly driven by general local economic conditions. In certain markets, price and affordability issues are potentially limiting demand. Additionally, 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. While the limited supply and production deficits have supported price appreciation in many markets, these increases have been partially or sometimes fully offset by increases in labor and material costs and we expect that these construction cost pressures will continue.  We believe these demand and supply trends will result in a continued growth trajectory in the homebuilding market, with consumer, job and household formation growth serving as leading indicators of positive demand, offset by certain downward pressures. 
The Houston area was severely impacted by Hurricane Harvey, which caused significant flooding and widespread damage to existing homes, commercial buildings, and infrastructure. While our active projects in Houston sustained minimal damage, and the hurricane did not significantly impact our overall results for the three or nine months ended September 30, 2017, we did experience some delivery delays during the third quarter of 2017 as approximately 30 deliveries that would have delivered in 2017 will instead deliver in early 2018.  Additionally, our Houston operations, and our consolidated financial statements, could be further impacted in future quarters by, among other things, a decline in homebuyer traffic and net new home orders; land development and home construction delays, resulting in delayed deliveries; and increased costs stemming from general hurricane-related recovery efforts that heighten the demand for, and constrain the supply of, building materials and available labor; and warranty repair claims from our affected homeowners. 

- 36 -

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

	
																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Homebuilding:	 		 	 		 	 	 	 	
Home sales revenue	$	648,638		 	$	578,653		 	$	1,609,458		 	$	1,558,633		
Land and lot sales revenue	68,218		 	2,535		 	69,661		 	70,204		
Other operations revenue	584		 	606		 	1,752		 	1,790		
Total revenues	717,440		 	581,794		 	1,680,871		 	1,630,627		
Cost of home sales	521,918		 	462,323		 	1,294,563		 	1,219,560		
Cost of land and lot sales	12,001		 	1,734		 	13,299		 	16,973		
Other operations expense	575		 	575		 	1,726		 	1,724		
Sales and marketing	33,179		 	31,852		 	92,209		 	90,621		
General and administrative	32,956		 	31,278		 	101,293		 	90,293		
Homebuilding income from operations	116,811		 	54,032		 	177,781		 	211,456		
Equity in (loss) income of unconsolidated entities	—		 	(20	)	 	1,646		 	181		
Other income, net	26		 	21		 	147		 	287		
Homebuilding income before income taxes	116,837		 	54,033		 	179,574		 	211,924		
Financial Services:	 	 	 	 	 	 	 	
Revenues	295		 	235		 	881		 	762		
Expenses	82		 	72		 	233		 	183		
Equity in income of unconsolidated entities	1,351		 	1,247		 	2,911		 	3,246		
Financial services income before income taxes	1,564		 	1,410		 	3,559		 	3,825		
Income before income taxes	118,401		 	55,443		 	183,133		 	215,749		
Provision for income taxes	(46,112	)	 	(20,298	)	 	(69,824	)	 	(77,701	)	
Net income	72,289		 	35,145		 	113,309		 	138,048		
Net income attributable to noncontrolling interests	(25	)	 	(311	)	 	(138	)	 	(738	)	
Net income available to common stockholders	$	72,264		 	$	34,834		 	$	113,171		 	$	137,310		
Earnings per share	 	 	 		 	 	 	 		
Basic	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Diluted	$	0.48		 	$	0.22		 	$	0.73		 	$	0.85		
Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

	
																											
 	Three Months Ended September 30, 2017	 	Three Months Ended September 30, 2016	 	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	158		 	13.5		 	3.9		 	134		 	17.8		 	2.5		 	18	 %	 	(24	)%	 	56	 %	
Pardee Homes	421		 	30.8		 	4.6		 	283		 	22.5		 	4.2		 	49	 %	 	37	 %	 	10	 %	
Quadrant Homes	84		 	8.3		 	3.4		 	49		 	7.3		 	2.3		 	71	 %	 	14	 %	 	48	 %	
Trendmaker Homes	113		 	29.3		 	1.3		 	130		 	29.0		 	1.5		 	(13	)%	 	1	 %	 	(13	)%	
TRI Pointe Homes	378		 	34.7		 	3.6		 	239		 	28.7		 	2.8		 	58	 %	 	21	 %	 	29	 %	
Winchester Homes	114		 	13.2		 	2.9		 	97		 	13.7		 	2.4		 	18	 %	 	(4	)%	 	21	 %	
Total	1,268		 	129.8		 	3.3		 	932		 	119.0		 	2.6		 	36	 %	 	9	 %	 	27	 %	

- 37 -

Net new home orders for the three months ended September 30, 2017 increased by 336 orders, or 36%, to 1,268 , compared to 932 during the prior year period.  The increase in net new home orders was due to a 9% increase in average selling communities and a 27% increase in monthly absorption rates.
Maracay Homes reported an 18% increase in net new home orders driven by a 56% increase in monthly absorption rate as a result of improved market conditions compared to the prior year period. We experienced a 24% decrease in average selling communities due to the timing of community openings and closings compared to the prior year period. Pardee Homes increased net new home orders by 49% due to a 37% increase in average community count and a 10% increase in monthly absorption rate. The increase in monthly absorption rate was driven by strong demand for new community openings, particularly in the San Diego and Los Angeles markets. Net new home orders increased 71% at Quadrant Homes due primarily to a 55% increase in monthly absorption rate, and enhanced by a 14% increase in average selling communities. The increase in monthly absorption rate was the result of our well located communities and continued strong market fundamentals. Trendmaker Homes' net new home orders decreased 13% due to a 13% decrease in monthly absorption rate and a relatively flat average selling community count. The decrease in monthly absorption rate was due in part to the loss of two weeks of selling homes during and after Hurricane Harvey, as well as the continued challenges with the Houston market as a result of the continued economic pressure on oil prices and the related impact on job growth. TRI Pointe Homes’ net new home orders increased 58% due to a 29% increase in monthly absorption rate and a 21% increase in average selling communities. Demand remains strong in the markets in which TRI Pointe Homes builds, as evidenced by a monthly absorption rate of 3.6 homes at average selling prices above the Company average. Winchester Homes experienced an 18% increase in net new home orders largely as a result of a 21% increase in monthly absorption rate, partially offset by a 4% decrease in average selling communities. The increase in monthly absorption rate was due to strong customer demand in some of our larger master plan communities.
Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)

																															
 	As of September 30, 2017	 	As of September 30, 2016	 	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	305		 	$	154,324		 	$	506		 	329		 	$	144,127		 	$	438		 	(7	)%	 	7	%	 	16	 %	
Pardee Homes	646		 	436,376		 	676		 	382		 	182,263		 	477		 	69	 %	 	139	%	 	42	 %	
Quadrant Homes	206		 	160,202		 	778		 	130		 	83,467		 	642		 	58	 %	 	92	%	 	21	 %	
Trendmaker Homes	213		 	107,968		 	507		 	186		 	98,874		 	532		 	15	 %	 	9	%	 	(5	)%	
TRI Pointe Homes	659		 	481,537		 	731		 	495		 	319,823		 	646		 	33	 %	 	51	%	 	13	 %	
Winchester Homes	236		 	141,858		 	601		 	189		 	121,617		 	643		 	25	 %	 	17	%	 	(7	)%	
Total	2,265		 	$	1,482,265		 	$	654		 	1,711		 	$	950,171		 	$	555		 	32	 %	 	56	%	 	18	 %	
 
Backlog units reflect the number of homes, net of actual cancellations experienced during the period, for which we have entered into a sales contract with a homebuyer but for which we have not yet delivered the home. 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 homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) decreased to 15% from 17% for the same period in 2016. The dollar value of backlog was approximately $1.5 billion as of September 30, 2017, an increase of $532.1 million, or 56%, compared to $950.2 million as of September 30, 2016.  This increase was due to an increase in backlog units of 554, or 32%, to 2,265 as of September 30, 2017, compared to 1,711 as of September 30, 2016 and an 18% increase in the average sales price of homes in backlog to $654,000 as of September 30, 2017, compared to $555,000 as of September 30, 2016.
Maracay Homes’ backlog dollar value increased 7% compared to the prior year due to a 16% increase in average sales price, offset by a 7% decrease in units. The increase in average sales price was due to a product mix shift that included a greater proportion of move-up and luxury product compared to the prior year. Pardee Homes' backlog dollar value increased 139% due to an increase in both backlog units and average selling price. The increase in backlog units was due to the 49% increase in orders during the quarter while the increase in average selling price was due to increased pricing power in our markets and a higher end product mix with higher price points. Quadrant Homes’ backlog dollar value increased 92% as a result of an increase in backlog units and average sales price. The increase in backlog units directly relates to the 71% increase in orders during the quarter and the increase in average sales price was related to a higher mix of homes in backlog from the core Seattle markets of King and Snohomish counties, which have higher price points. Trendmaker Homes' backlog dollar value increased 9% primarily due to a 15% increase in backlog units. TRI Pointe Homes’ backlog dollar value increased 51%

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due to an increase in backlog units and average selling price. The increase in backlog units was the result of a 58% increase in orders for the three months ended September 30, 2017. Winchester Homes’ backlog dollar value increased 17% largely driven by the increase in backlog units as a result of the 18% increase in orders during the quarter.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

																															
 	Three Months Ended September 30, 2017	 	Three Months Ended September 30, 2016	 	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	164		 	$	78,166		 	$	477		 	165		 	$	68,024		 	$	412		 	(1	)%	 	15	 %	 	16	 %	
Pardee Homes	328		 	164,548		 	502		 	302		 	188,148		 	623		 	9	 %	 	(13	)%	 	(19	)%	
Quadrant Homes	79		 	54,197		 	686		 	90		 	47,749		 	531		 	(12	)%	 	14	 %	 	29	 %	
Trendmaker Homes	104		 	52,453		 	504		 	121		 	62,408		 	516		 	(14	)%	 	(16	)%	 	(2	)%	
TRI Pointe Homes	332		 	239,110		 	720		 	260		 	167,769		 	645		 	28	 %	 	43	 %	 	12	 %	
Winchester Homes	104		 	60,164		 	579		 	81		 	44,555		 	550		 	28	 %	 	35	 %	 	5	 %	
Total	1,111		 	$	648,638		 	$	584		 	1,019		 	$	578,653		 	$	568		 	9	 %	 	12	 %	 	3	 %	
 
Home sales revenue increased $70.0 million, or 12%, to $648.6 million for the three months ended September 30, 2017. The increase was comprised of (i) $52.2 million related to an increase in homes delivered to 1,111 for the three months ended September 30, 2017 from 1,019 in the prior year period, and (ii) a $16,000, or 3%, increase in the average sales price of homes delivered to $584,000 for the three months ended September 30, 2017, from $568,000 in the prior year period.
Maracay Homes had a 15% increase in home sales revenue due to an increase in average sales price and relatively flat new home deliveries. The increase in average sales price was due to a product mix shift that included a greater proportion of move-up and luxury products compared to the prior year. Pardee Homes’ home sales revenue decreased 13% due to a 19% decrease in average sales price, offset by a 9% increase in new homes delivered. The decrease in average sales price was due to a product mix shift that included a greater proportion of entry-level product, specifically in our San Diego market. Quadrant Homes increased home sales revenue by 14% due to a 29% increase in average sales price offset by a 12% decrease in new homes delivered. The increase in average sales price was the result of delivering more units in the core Seattle markets of King and Snohomish counties, which have higher price points. Trendmaker Homes' home sales revenue decreased 16% due to a 14% decrease in new homes delivered and a 2% decrease in average sales price of homes delivered. The decrease was due in part to Hurricane Harvey, which caused significant flooding and widespread damage in Houston, and was responsible for delivery delays during the third quarter of 2017. Approximately 30 deliveries that would have delivered in the third quarter of 2017 will instead deliver in early 2018 at Trendmaker Homes. TRI Pointe Homes had a 43% increase in home sales revenue due to a 28% increase in new homes delivered and a 12% increase in average sales price. The increase in new homes delivered was driven by higher backlog to start the quarter compared to the same prior year period. Home sales revenue increased at Winchester Homes by 35% largely due to an increase in homes delivered as a result of higher backlog to start the quarter compared to the same prior year period.

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Homebuilding Gross Margins (dollars in thousands)

														
 	Three Months Ended September 30,	
 	2017	 	%	 	2016	 	%	
Home sales revenue	$	648,638		 	100.0	%	 	$	578,653		 	100.0	%	
Cost of home sales	521,918		 	80.5	%	 	462,323		 	79.9	%	
Homebuilding gross margin	126,720		 	19.5	%	 	116,330		 	20.1	%	
Add:  interest in cost of home sales	15,623		 	2.4	%	 	14,385		 	2.5	%	
Add:  impairments and lot option abandonments	374		 	0.1	%	 	389		 	0.1	%	
Adjusted homebuilding gross margin (1)	$	142,717		 	22.0	%	 	$	131,104		 	22.7	%	
Homebuilding gross margin percentage	19.5	%	 	 	 	20.1	%	 	 	
Adjusted homebuilding gross margin percentage (1)	22.0	%	 	 	 	22.7	%	 	 	
__________

(1)  	Non-GAAP financial measure (as discussed below).	
Our homebuilding gross margin percentage decreased to 19.5% for the three months ended September 30, 2017 as compared to 20.1% for the prior year period.  The decrease in gross margin percentage was primarily due to the mix of deliveries from our long-dated California communities, which produce gross margins above the Company average, having less of an impact on our overall gross margin percentage compared to the same period in the prior year. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.0% for the three months ended September 30, 2017, compared to 22.7% for the prior year period.
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,	
 	2017	 	%	 	2016	 	%	
Land and lot sales revenue	$	68,218		 	100.0	%	 	$	2,535		 	100.0	%	
Cost of land and lot sales	12,001		 	17.6	%	 	1,734		 	68.4	%	
Land and lot gross margin	$	56,217		 	82.4	%	 	$	801		 	31.6	%	
Our land and lot gross margin percentage increased to 82.4% for the three months ended September 30, 2017 as compared to 31.6% for the prior year period.  During the quarter ended September 30, 2017 , our Pardee Homes reporting segment sold a parcel consisting of 69 homebuilding lots, located in the Pacific Highlands Ranch community in San Diego, California, representing $66.8 million in land and lot sales revenue and $56.1 million in land and lot gross margin. This sale resulted in significant gross margin due to the low land basis of the Pacific Highlands Ranch 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. Additionally, we expect land and lot sales revenue to vary significantly between reporting periods based on our business decisions to maintain or decrease our land ownership in various markets. Our land and lot sale decisions will be based on a variety of factors, including, without limitation, prevailing market conditions.

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

														
 	Three Months Ended September 30,	 	As a Percentage of
Home Sales Revenue	
 	2017	 	2016	 	2017	 	2016	
Sales and marketing	$	33,179		 	$	31,852		 	5.1	%	 	5.5	%	
General and administrative (G&A)	32,956		 	31,278		 	5.1	%	 	5.4	%	
Total sales and marketing and G&A	$	66,135		 	$	63,130		 	10.2	%	 	10.9	%	
 
Sales and marketing expense as a percentage of home sales revenue decreased to 5.1% for the three months ended September 30, 2017 , compared to 5.5% for the prior year period. The decrease was the result of higher operating leverage on the fixed components of sales and marketing expenses as a result of the 12% increase in homes sales revenue.
General and administrative (“G&A”) expenses as a percentage of home sales revenue decreased to 5.1% of home sales revenue for the three months ended September 30, 2017 compared to 5.4% for the prior year period as a result of higher operating leverage due to the 12% increase in home sales revenue.  G&A expenses increased to $33.0 million for the three months ended September 30, 2017 compared to $31.3 million in the prior year period primarily as a result of additional headcount to support future growth, along with our continued expansion into Austin, Texas and Los Angeles, California and the recently announced expansion into the Sacramento, California market. G&A expense was positively impacted for the three months ended September 30, 2017 by a decrease in the income tax liability to Weyerhaeuser of $1.4 million related to the expiration of stock options whose benefit would have been passed on to Weyerhaeuser under our tax sharing agreement.
Total sales and marketing and G&A (“SG&A”) as a percentage of home sales revenue decreased to 10.2% for the three months ended September 30, 2017 , compared to 10.9% in the prior year period. Total SG&A expense increased $3.0 million , to $66.1 million for the three months ended September 30, 2017 from $63.1 million in the prior year period.  
Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $22.9 million and $18.6 million for the three months ended September 30, 2017 and 2016 , respectively.  All interest incurred in both periods was capitalized.  The increase in interest incurred during the three months ended September 30, 2017 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 in June of 2017 of our $300 million aggregate principal amount of 5.250% Senior Notes due 2027 ("the 2027 Notes").
Income Tax
For the three months ended September 30, 2017 , we recorded a tax provision of $46.1 million based on an effective tax rate of 38.9%   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% . The increase in the current year income tax rate is due to the expiration of federal energy tax credits in 2017 as well as a negative impact on the tax rate from the expiration of non-qualified stock options. The increase in provision for income taxes is due to an increase in income before income taxes of $63.0 million to $118.4 million for the three months ended September 30, 2017 , compared to $55.4 million for the prior year period.

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Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

	
																											
 	Nine Months Ended September 30, 2017	 	Nine Months Ended September 30, 2016	 	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	504		 	15.3		 	3.7		 	526		 	18.1		 	3.2		 	(4	)%	 	(15	)%	 	16	 %	
Pardee Homes	1,282		 	29.3		 	4.9		 	936		 	22.8		 	4.6		 	37	 %	 	29	 %	 	7	 %	
Quadrant Homes	311		 	7.6		 	4.5		 	274		 	8.5		 	3.6		 	14	 %	 	(11	)%	 	25	 %	
Trendmaker Homes	393		 	30.9		 	1.4		 	385		 	26.8		 	1.6		 	2	 %	 	15	 %	 	(13	)%	
TRI Pointe Homes	1,144		 	31.9		 	4.0		 	883		 	27.3		 	3.6		 	30	 %	 	17	 %	 	11	 %	
Winchester Homes	378		 	12.4		 	3.4		 	335		 	13.5		 	2.8		 	13	 %	 	(8	)%	 	21	 %	
Total	4,012		 	127.4		 	3.5		 	3,339		 	117.0		 	3.2		 	20	 %	 	9	 %	 	9	 %	
 
Net new home orders for the nine months ended September 30, 2017 increased by 673 orders or 20% to 4,012 , compared to 3,339 during the prior year period.  The increase in net new home orders was due to a 9% increase in average selling communities and a 9% increase in monthly absorption rates.
Maracay Homes had a 4% decrease in net new home orders driven by a 15% decrease in average selling communities due to the timing of community openings and closings compared to the prior year period. This was offset by a 16% increase in monthly absorption rate as a result of improved market conditions compared to the prior year period. Pardee Homes increased net new home orders by 37% largely due to a 29% increase in average selling communities and a 7% increase in absorption rate to 4.9 orders per community per month. Net new home orders increased 14% at Quadrant Homes mainly due to a 25% increase in monthly absorption rate due to continued strong market fundamentals. This was offset by an 11% decrease in average selling communities due to the timing of new community openings and closings. Trendmaker Homes increased net new home orders by 2% primarily based on a 15% increase in average selling communities. Trendmaker Homes’ monthly absorption rate declined compared to the prior year period as a result of the loss of two weeks of selling due to the impact of Hurricane Harvey and the continued softer market conditions due to the decrease in oil prices and the related impact on job growth in the Houston market. TRI Pointe Homes’ net new home orders increased 30% due to a 17% increase in average selling communities and an 11% increase in monthly absorption rate. Demand remains strong in the markets in which TRI Pointe Homes builds, as evidenced by a monthly absorption rate of 4.0 homes at average selling prices above the Company average. Winchester Homes experienced a 13% increase in net new home orders due to a 21% increase in monthly absorption rate, partially offset by an 8% decrease in average selling communities. The increase in monthly absorption rate was due to strong customer demand in some of our larger master plan communities.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

																															
 	Nine Months Ended September 30, 2017	 	Nine Months Ended September 30, 2016	 	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	447		 	$	204,981		 	$	459		 	400		 	$	161,318		 	$	403		 	12	 %	 	27	 %	 	14	 %	
Pardee Homes	896		 	428,624		 	478		 	828		 	485,683		 	587		 	8	 %	 	(12	)%	 	(19	)%	
Quadrant Homes	206		 	133,747		 	649		 	287		 	147,935		 	515		 	(28	)%	 	(10	)%	 	26	 %	
Trendmaker Homes	343		 	169,189		 	493		 	335		 	169,423		 	506		 	2	 %	 	—	 %	 	(3	)%	
TRI Pointe Homes	783		 	524,159		 	669		 	678		 	452,553		 	667		 	15	 %	 	16	 %	 	—	 %	
Winchester Homes	265		 	148,758		 	561		 	256		 	141,721		 	554		 	4	 %	 	5	 %	 	1	 %	
Total	2,940		 	1,609,458		 	$	547		 	2,784		 	$	1,558,633		 	$	560		 	6	 %	 	3	 %	 	(2	)%	
 
Home sales revenue increased $50.8 million, or 3%, to $1.6 billion for the nine months ended September 30, 2017 . The increase was comprised of: (i) $87.3 million related to a 156, or 6%, increase in homes delivered to 2,940 for the nine months

- 42 -

ended September 30, 2017 , from 2,784 in the prior year period, offset by (ii) a decrease of $36.5 million related to the decrease in average sales price of homes delivered by 2%, or $13,000, to $547,000 for the nine months ended September 30, 2017, from $560,000 in the prior year period.
Maracay Homes had a 27% increase in home sales revenue due to increases in both new homes delivered and average sales price. The increase in new homes delivered was due to starting the year with more homes in backlog. The increase in average sales price was driven by a product mix shift that included a greater proportion of move-up and luxury product compared to the prior year period. Pardee Homes’ home sales revenue decreased by 12% largely due to a 19% decrease in average sales price. The decrease in average sales price was due to a product mix shift that included a greater proportion of entry level homes delivered, specifically in our San Diego market. This difference in product mix was due to the timing of deliveries compared to the prior year period. Quadrant Homes decreased home sales revenue by 10%, a result of a 28% decrease in new homes delivered, partially offset by a 26% increase in average sales price. The large decrease in new homes delivered was due to starting the year with a lower number of backlog units compared to the prior year period as a result of lower average selling communities. The large increase in average sales price was the result of delivering more homes in the core Seattle markets of King and Snohomish counties, which have higher price points. Home sales revenue was flat at Trendmaker Homes due to relatively flat new homes delivered and average sales price of homes delivered. Hurricane Harvey, which caused significant flooding and widespread damage in Houston, was responsible for delivery delays during the third quarter of 2017 at Trendmaker Homes. Approximately 30 deliveries that would have delivered in the third quarter of 2017 will instead deliver in early 2018 at Trendmaker Homes. Home sales revenue at TRI Pointe Homes increased by 16% due to a 15% increase in new homes delivered. Home sales revenue increased at Winchester Homes by 5% mainly due to a 4% increase in new homes delivered due to the timing of deliveries.
Homebuilding Gross Margins (dollars in thousands)

														
 	Nine Months Ended September 30,	
 	2017	 	%	 	2016	 	%	
Home sales revenue	$	1,609,458		 	100.0	%	 	$	1,558,633		 	100.0	%	
Cost of home sales	1,294,563		 	80.4	%	 	1,219,560		 	78.2	%	
Homebuilding gross margin	314,895		 	19.6	%	 	339,073		 	21.8	%	
Add:  interest in cost of home sales	38,448		 	2.4	%	 	34,653		 	2.2	%	
Add:  impairments and lot option abandonments	1,169		 	0.1	%	 	678		 	—	%	
Adjusted homebuilding gross margin (1)	$	354,512		 	22.0	%	 	$	374,404		 	24.0	%	
Homebuilding gross margin percentage	19.6	%	 	 	 	21.8	%	 	 	
Adjusted homebuilding gross margin percentage (1)	22.0	%	 	 	 	24.0	%	 	 	
__________

(1)  	Non-GAAP financial measure (as discussed below).	
Our homebuilding gross margin percentage decreased to 19.6% for the nine months ended September 30, 2017 as compared to 21.8% for the prior year period.  The decrease in gross margin percentage was primarily due to the mix of homes delivered and increased labor and materials cost. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.0% for the nine months ended September 30, 2017, compared to 24.0% for the prior year period.
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.

- 43 -

Land and Lot Gross Margins (dollars in thousands) 

														
 	Nine Months Ended September 30,	
 	2017	 	%	 	2016	 	%	
Land and lot sales revenue	$	69,661		 	100.0	%	 	$	70,204		 	100.0	%	
Cost of land and lot sales	13,299		 	19.1	%	 	16,973		 	24.2	%	
Land and lot gross margin	$	56,362		 	80.9	%	 	$	53,231		 	75.8	%	
Our land and lot gross margin percentage increased to 80.9% for the nine months ended September 30, 2017 as compared to 75.8% for the prior year period.  During the quarter ended September 30, 2017, our Pardee Homes reporting segment sold a parcel consisting of 69 homebuilding lots, located in the Pacific Highlands Ranch community in San Diego, California, representing $66.8 million in land and lot sales revenue and $56.1 million in land and lot gross margin. This sale resulted in significant gross margin due to the low land basis of the Pacific Highlands Ranch community, which was acquired in 1981. 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 related sales in 2016. Land and lot sales gross margin percentage can vary significantly due to the type of land and its related cost basis. Additionally, we expect land and lot sales revenue to vary significantly between reporting periods based on our business decisions to maintain or decrease our land ownership in various markets. Our land and lot sale decisions will be based on a variety of factors, including, without limitation, prevailing market conditions.
Sales and Marketing, General and Administrative Expense (dollars in thousands)

														
 	Nine Months Ended September 30,	 	As a Percentage of
Home Sales Revenue	
 	2017	 	2016	 	2017	 	2016	
Sales and marketing	$	92,209		 	$	90,621		 	5.7	%	 	5.8	%	
General and administrative (G&A)	101,293		 	90,293		 	6.3	%	 	5.8	%	
Total sales and marketing and G&A	$	193,502		 	$	180,914		 	12.0	%	 	11.6	%	
 
Sales and marketing expense as a percentage of home sales revenue decreased to 5.7% for the nine months ended September 30, 2017 , compared to 5.8% for the prior year period. The decrease was primarily the result of higher operating leverage on the fixed components of sales and marketing expenses as a result of the 3% increase in homes sales revenue. Total sales and marketing expense increased by $1.6 million to $92.2 million for the nine months ended September 30, 2017 , compared to $90.6 million in the prior year period.
G&A expenses as a percentage of home sales revenue increased to 6.3% of home sales revenue for the nine months ended September 30, 2017 compared to 5.8% for the prior year period.  G&A expenses increased to $101.3 million for the nine months ended September 30, 2017 compared to $90.3 million in the prior year period primarily as a result of additional headcount to support future growth, along with our continued expansion into Austin, Texas and Los Angeles, California and the recently announced expansion into the Sacramento, California market.
SG&A as a percentage of home sales revenue increased to 12.0% for the nine months ended September 30, 2017 , compared to 11.6% in the prior year period. Total SG&A expense increased $12.6 million , to $193.5 million for the nine months ended September 30, 2017 from $180.9 million in the prior year period.  
Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $61.7 million and $50.0 million for the nine months ended September 30, 2017 and 2016 , respectively.  All interest incurred in both periods was capitalized.  The increase in interest incurred during the nine months ended September 30, 2017 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 the 2021 Notes in May of 2016, along with the 2027 Notes in June of 2017.

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Income Tax
For the nine months ended September 30, 2017 , we recorded a tax provision of $69.8 million based on an effective tax rate of 38.1% .  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% . The increase in the current year income tax rate is due to the expiration of federal energy tax credits in 2017 as well as a negative impact on the tax rate from the expiration of non-qualified stock options. The decrease in provision for income taxes is due to a decrease in income before income taxes of $32.6 million to $183.1 million for the nine months ended September 30, 2017 , compared to $215.7 million for the prior year period.
Lots Owned or Controlled by Segment
Excluded from owned and controlled lots are those related to Note 6, Investments in Unconsolidated Entities .  The table below summarizes our lots owned or controlled by segment as of the dates presented:

												
 	September 30,	 	Increase
(Decrease)	
 	2017	 	2016	 	Amount	 	%	
Lots Owned	 	 	 	 	 	 	 	
Maracay Homes	1,855		 	1,662		 	193		 	12	 %	
Pardee Homes	15,348		 	15,906		 	(558	)	 	(4	)%	
Quadrant Homes	1,169		 	969		 	200		 	21	 %	
Trendmaker Homes	1,542		 	1,757		 	(215	)	 	(12	)%	
TRI Pointe Homes	3,117		 	3,048		 	69		 	2	 %	
Winchester Homes	1,772		 	1,886		 	(114	)	 	(6	)%	
Total	24,803		 	25,228		 	(425	)	 	(2	)%	
Lots Controlled (1)	 	 	 	 	 	 	 	
Maracay Homes	751		 	596		 	155		 	26	 %	
Pardee Homes	307		 	1,081		 	(774	)	 	(72	)%	
Quadrant Homes	516		 	926		 	(410	)	 	(44	)%	
Trendmaker Homes	314		 	373		 	(59	)	 	(16	)%	
TRI Pointe Homes	667		 	912		 	(245	)	 	(27	)%	
Winchester Homes	534		 	597		 	(63	)	 	(11	)%	
Total	3,089		 	4,485		 	(1,396	)	 	(31	)%	
Total Lots Owned or Controlled (1)	27,892		 	29,713		 	(1,821	)	 	(6	)%	
__________
		
(1)  	As of September 30, 2017 and 2016 , 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 nine months ended September 30, 2017 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, 2017 , we had total liquidity of $554.6 million, including cash and cash equivalents of $162.4 million and $392.2 million of availability under our Credit Facility after considering the borrowing base provisions and outstanding letters of credit.
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.

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Senior Notes
In June 2017, TRI Pointe Group issued the 2027 Notes at 100.00% of their aggregate principal amount. Net proceeds of this issuance was $296.3 million , after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1.
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.
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, 2017 , no principal has been paid on the 2019 Notes, 2021 Notes, 2024 Notes and 2027 Notes (together, the "Senior Notes"), and there was $21.1 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 $22.1 million and $10.7 million as of September 30, 2017 and December 31, 2016 , respectively.
Unsecured Revolving Credit Facility
On June 20, 2017, the Company modified its existing unsecured revolving credit facility (the “Credit Facility”) to extend the maturity date by two years to May 18, 2021, while decreasing the total commitments under the Credit Facility to $600 million from $625 million .  In addition, the Credit Facility was modified to give the Company the option to make offers to the lenders to extend the maturity date of the facility in twelve-month increments, subject to the satisfaction of certain conditions. The Credit Facility 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 1.25% to 2.00% depending on the Company’s leverage ratio. As of September 30, 2017 , the outstanding balance under the Credit Facility was $200.0 million with an interest rate 2.99%  per annum and $392.2 million of availability after considering the borrowing base provisions and outstanding letters of credit.  At September 30, 2017 , we had outstanding letters of credit of $7.8 million .  These letters of credit were issued to secure various financial obligations.  We believe it is not probable that any outstanding letters of credit will be drawn upon.
Stock Repurchase Program
On February 23, 2017, our board of directors approved the 2017 Repurchase Program.  On July 25, 2017 our board of directors authorized the repurchase of up to an additional $50 million of our common stock under the 2017 Repurchase Program, increasing the aggregate authorization from $100 million to $150 million. Purchases of common stock pursuant to the 2017 Repurchase Program 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 2017 Repurchase 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, 2017 , we repurchased and retired 975,700 shares of our common stock under this program at a weighted average price of $12.83 per share for a total cost of $12.5 million . For the nine months ended September 30, 2017 , we repurchased and retired 8,994,705 shares of common stock under this program at a weighted average price of $12.48 per share, for a total cost of $112.2 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	2017	 	2017	
Consolidated Tangible Net Worth	$	1,681,335		 	$	1,152,489		
(Not less than $1.1 billion plus 50% of net income and
   50% of the net proceeds from equity offerings after
   March 31, 2017)	 	 	 		
Leverage Test	47.7	%	 	≤55%		
(Not to exceed 55%)	 	 	 		
Interest Coverage Test	4.3		 	≥1.5		
(Not less than 1.5:1.0)	 	 	 		
 
As of September 30, 2017 , 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-net capital are calculated as follows (dollars in thousands):  

								
 	September 30, 2017	 	December 31, 2016	
Unsecured revolving credit facility	$	200,000		 	$	200,000		
Seller financed loans	—		 	13,726		
Senior Notes	1,469,558		 	1,168,307		
Total debt	1,669,558		 	1,382,033		
Stockholders’ equity	1,842,429		 	1,829,447		
Total capital	$	3,511,987		 	$	3,211,480		
Ratio of debt-to-capital (1)	47.5	%	 	43.0	%	
 	 	 	 	
Total debt	$	1,669,558		 	$	1,382,033		
Less: Cash and cash equivalents	(162,396	)	 	(208,657	)	
Net debt	1,507,162		 	1,173,376		
Stockholders’ equity	1,842,429		 	1,829,447		
Net capital	$	3,349,591		 	$	3,002,823		
Ratio of net debt-to-net capital (2)	45.0	%	 	39.1	%	
__________

(1)  	The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus equity.	
		
(2)  	The ratio of net debt-to-net capital is a non-GAAP measure and is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-net 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-net 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, 2017 Compared to Nine Months Ended September 30, 2016
For the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 , the comparison of cash flows is as follows:
		
•	Net cash used in operating activities decreased by $50.7 million to $210.7 million for the nine months ended September 30, 2017 , from $261.3 million for the nine months ended September 30, 2016 . The change was comprised of offsetting activity, including (i) an increase in real estate inventory of $401.3 million in 2017 compared to an increase of $442.7 million in 2016, offset by (ii) decrease in net income of $24.7 million in 2017 compared to the prior year period, and (iii) other offsetting activity including changes in other assets, receivables, accounts payable and accrued expenses.	
		
•	Net cash used in investing activities was $3.1 million for the nine months ended September 30, 2017 , compared to $2.1 million for the prior year period in 2016.  The increase in cash used in investing activities was due mainly to increased investments in unconsolidated entities.	
		
•	Net cash provided by financing activities decreased to $167.5 million for the nine months ending September 30, 2017 , from $177.6 million for the same period in the prior year. The change was primarily a result of higher net borrowings from debt of $280.3 million during the nine months ended September 30, 2017 , compared to $209.2 million for the nine months ended September 30, 2016 , offset by higher cash used for share repurchases of $112.2 million during the nine months ended September 30, 2017, compared to $25.1 million for the nine months ended September 30, 2016.	
As of September 30, 2017 , our cash and cash equivalents balance was $162.4 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, 2017 , we had $27.1 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 $355.4 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, 2017 , we had total liquidity of $554.6 million, including cash of $162.4 million and $392.2 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, 2017 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,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
Phoenix, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	
City of Buckeye:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Verrado Palisades	2015	 	63		 	55		 	8		 	6		 	22		 	 $301 - $374	
Verrado Victory	2015	 	98		 	43		 	55		 	15		 	13		 	 $363 - $396	
City of Chandler:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sendera Place	2015	 	79		 	79		 	—		 	—		 	21		 	 $277 - $324	
Hawthorn Manor	2017	 	84		 	12		 	72		 	31		 	12		 	 $517 - $559	
Mission Estates	2019	 	26		 	—		 	26		 	—		 	—		 	 $545 - $570	
City of Gilbert:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marquis at Morrison Ranch	2016	 	66		 	61		 	5		 	3		 	25		 	$414 - $501	
Artisan at Morrison Ranch	2016	 	105		 	69		 	36		 	20		 	34		 	$339 - $392	
The Preserve at Adora Trails	2017	 	82		 	11		 	71		 	30		 	11		 	$408 - $451	
Marathon Ranch	2018	 	63		 	—		 	63		 	—		 	—		 	$486 - $535	
Lakes At Annecy	2018	 	216		 	—		 	216		 	—		 	—		 	$276 - $309	
Lakeview Trails	2019	 	92		 	—		 	92		 	—		 	—		 	$451 - $511	
City of Goodyear:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rio Paseo Villages	2018	 	117		 	—		 	117		 	—		 	—		 	 $213 - $227	
Rio Paseo Cottages	2018	 	93		 	—		 	93		 	—		 	—		 	 $253 - $271	
City of Mesa:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Kinetic Point at Eastmark	2013	 	80		 	77		 	3		 	—		 	2		 	 $294 - $373	
Lumiere Garden at Eastmark	2013	 	85		 	82		 	3		 	3		 	7		 	 $332 - $409	
Aileron Square at Eastmark	2016	 	58		 	46		 	12		 	12		 	22		 	 $332 - $409	
Curie Court at Eastmark	2016	 	106		 	50		 	56		 	26		 	20		 	 $294 - $373	
Palladium Point	2016	 	53		 	22		 	31		 	24		 	18		 	 $321 - $390	
The Vista at Granite Crossing	2018	 	37		 	—		 	37		 	—		 	—		 	 $412 - $488	
Town of Peoria:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Reserve at Plaza del Rio	2013	 	162		 	162		 	—		 	—		 	27		 	 $227 - $270	
Maracay at Northlands	2014	 	90		 	90		 	—		 	—		 	13		 	 $330 - $411	
Legacy at The Meadows	2017	 	74		 	19		 	55		 	25		 	19		 	 $415 - $441	
Estates at The Meadows	2017	 	272		 	27		 	245		 	31		 	27		 	 $471 - $545	
Enclave at The Meadows	2018	 	126		 	—		 	126		 	5		 	—		 	 $377 - $472	
City of Phoenix:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Navarro Groves	2018	 	54		 	—		 	54		 	—		 	—		 	 $402 - $447	
Vistal	2019	 	204		 	—		 	204		 	—		 	—		 	 $336 - $598	
Town of Queen Creek:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Preserve at Hastings Farms	2014	 	89		 	89		 	—		 	—		 	1		 	 $300 - $385	
Villagio	2013	 	135		 	135		 	—		 	—		 	6		 	 $291 - $352	
Phoenix, Arizona Total	 	 	2,809		 	1,129		 	1,680		 	231		 	300		 	 	
Tucson, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marana:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tortolita Vistas	2014	 	55		 	55		 	—		 	—		 	14		 	$458 - $515	
Oro Valley:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rancho del Cobre	2014	 	68		 	66		 	2		 	—		 	11		 	$410 - $478	
Desert Crest - Center Pointe Vistoso	2016	 	103		 	40		 	63		 	17		 	27		 	$257 - $302	
The Cove - Center Pointe Vistoso	2016	 	83		 	37		 	46		 	24		 	19		 	$344 - $404	
Summit N & S - Center Pointe Vistoso	2016	 	88		 	55		 	33		 	11		 	32		 	$393 - $428	
The Pinnacle - Center Pointe Vistoso	2016	 	69		 	51		 	18		 	12		 	29		 	$446 - $478	
Tucson:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ranches at Santa Catalina	2016	 	34		 	21		 	13		 	10		 	15		 	$414 - $460	
Tucson, Arizona Total	 	 	500		 	325		 	175		 	74		 	147		 	 	
Maracay Total	 	 	3,309		 	1,454		 	1,855		 	305		 	447		 	 	

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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,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
California	 	 	 	 	 	 	 	 	 	 	 	 	 	
San Diego County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Casabella	2015	 	139		 	139		 	—		 	—		 	39		 	$900 - $1,000	
Casavia	2017	 	83		 	34		 	49		 	47		 	34		 	$980 - $1,070	
Artesana	2017	 	56		 	11		 	45		 	33		 	11		 	$1,680 - $1,910	
Almeria	2017	 	80		 	—		 	80		 	18		 	—		 	$1,440 - $1,530	
Olvera	2017	 	84		 	—		 	84		 	27		 	—		 	$1,310 - $1,425	
Pacific Highlands Ranch Future	TBD	 	605		 	—		 	536		 	—		 	—		 	TBD	
Olive Hill Estate	2016	 	37		 	35		 	2		 	2		 	19		 	$650 - $770	
Sandstone (Castlerock)	2018	 	81		 	—		 	81		 	—		 	—		 	$650 - $680	
Lake Ridge (Castlerock)	2018	 	129		 	—		 	129		 	—		 	—		 	$740 - $800	
Meadowood	TBD	 	844		 	—		 	844		 	—		 	—		 	$290 - $590	
Parkview Condos	2016	 	73		 	73		 	—		 	—		 	37		 	$435 - $515	
Luna	2017	 	96		 	36		 	60		 	48		 	36		 	$370 - $470	
Azul	2017	 	121		 	48		 	73		 	45		 	48		 	$360 - $460	
Ocean View Hills Future	2017	 	691		 	—		 	691		 	—		 	—		 	TBD	
South Otay Mesa	TBD	 	893		 	—		 	893		 	—		 	—		 	TBD	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Aliento - Verano	2017	 	95		 	—		 	95		 	11		 	—		 	$540 - $660	
Aliento - Arista	2017	 	112		 	11		 	101		 	25		 	11		 	$695 - $760	
Aliento - 55x100	2018	 	94		 	—		 	94		 	—		 	—		 	TBD	
Aliento - 70x100	2018	 	67		 	—		 	67		 	—		 	—		 	TBD	
Skyline Ranch	TBD	 	1,220		 	—		 	1,220		 	—		 	—		 	 $550 - $810	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Meadow Glen	2014	 	142		 	142		 	—		 	—		 	2		 	$350 - $410	
Senterra	2016	 	82		 	61		 	21		 	16		 	36		 	$415 - $480	
Vantage	2016	 	83		 	40		 	43		 	11		 	25		 	$370 - $390	
Viewpoint	2016	 	75		 	69		 	6		 	4		 	51		 	$305 - $330	
Overlook	2016	 	112		 	60		 	52		 	33		 	36		 	$315 - $345	
Aura	2017	 	79		 	34		 	45		 	11		 	34		 	$350 - $375	
Starling	2017	 	107		 	4		 	103		 	13		 	4		 	$410 - $425	
Canyon Hills Future 70 x 115	2018	 	125		 	—		 	125		 	—		 	—		 	TBD	
Tournament Hills Future	TBD	 	268		 	—		 	268		 	—		 	—		 	TBD	
Northstar	2015	 	102		 	96		 	6		 	4		 	30		 	$320 - $340	
Skycrest	2015	 	131		 	90		 	41		 	17		 	22		 	$370 - $390	
Flagstone	2016	 	79		 	52		 	27		 	11		 	18		 	$420 - $450	
Lunetta	2016	 	89		 	88		 	1		 	1		 	33		 	$290 - $320	
Elara	2016	 	215		 	80		 	135		 	39		 	60		 	$290 - $310	
Daybreak	2017	 	139		 	—		 	139		 	29		 	—		 	$325 - $340	
Cascade	2017	 	105		 	—		 	105		 	17		 	—		 	$296 - $312	
Abrio	2018	 	83		 	—		 	83		 	—		 	—		 	TBD	
Beacon	2018	 	108		 	—		 	108		 	—		 	—		 	TBD	
Sundance Future Active Adult	TBD	 	704		 	—		 	704		 	—		 	—		 	TBD	
Sundance Future	TBD	 	101		 	—		 	101		 	—		 	—		 	TBD	
Avena	2017	 	84		 	—		 	84		 	—		 	—		 	$400 - $440	
Tamarack	2017	 	84		 	—		 	84		 	—		 	—		 	$430 - $460	
Centennial	TBD	 	359		 	—		 	359		 	—		 	—		 	$375 - $450	
Banning	TBD	 	4,318		 	—		 	4,318		 	—		 	—		 	TBD	
San Joaquin County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bear Creek	TBD	 	1,252		 	—		 	1,252		 	—		 	—		 	TBD	
California Total	 	 	14,626		 	1,203		 	13,354		 	462		 	586		 	 	
Nevada	 	 	 	 	 	 	 	 	 	 	 	 	 	

- 51 -

	
																			
Clark County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
LivingSmart Sandstone	2013	 	145		 	145		 	—		 	—		 	1		 	 $228 - $255	
North Peak	2015	 	171		 	96		 	75		 	24		 	39		 	$299 - $350	
Castle Rock	2015	 	188		 	98		 	90		 	18		 	37		 	$340 - $430	
Camino	2016	 	86		 	82		 	4		 	4		 	59		 	$255 - $270	
Solano	2014	 	132		 	132		 	—		 	—		 	15		 	 $300 - $335	
Alterra	2014	 	47		 	47		 	—		 	—		 	2		 	 $425 - $505	
Bella Verdi	2015	 	57		 	49		 	8		 	4		 	2		 	 $400 - $440	
Escala	2016	 	103		 	39		 	64		 	10		 	20		 	 $520 - $590	
Montero	2016	 	77		 	33		 	44		 	26		 	25		 	 $420 - $500	
Strada	2017	 	119		 	13		 	106		 	11		 	13		 	 $405 - $440	
Linea	2018	 	87		 	—		 	87		 	—		 	—		 	$300 - $350	
Meridian	2016	 	62		 	30		 	32		 	20		 	10		 	 $590 - $680	
Encanto	2016	 	51		 	26		 	25		 	8		 	15		 	 $470 - $525	
Luma	2017	 	71		 	—		 	71		 	—		 	—		 	 $470 - $526	
Encanto Townhomes	2018	 	70		 	—		 	70		 	—		 	—		 	 TBD	
Horizon Terrace	2014	 	165		 	124		 	41		 	14		 	30		 	 $410 - $465	
Horizon Valle Verde	2018	 	53		 	—		 	53		 	—		 	—		 	 $450 - $470	
Summerglen	2014	 	140		 	140		 	—		 	—		 	27		 	 $300 - $305	
Keystone	2017	 	70		 	15		 	55		 	9		 	14		 	 $450 - $540	
Cobalt	2017	 	107		 	—		 	107		 	5		 	—		 	 $355 - $420	
Axis	2017	 	78		 	1		 	77		 	16		 	1		 	 $825 - $1,035	
The Canyons at MacDonald Ranch - R	2017	 	22		 	—		 	22		 	—		 	—		 	 $515 - $585	
Pivot	2017	 	88		 	—		 	88		 	8		 	—		 	 $400 - $440	
Strada at Pivot	2017	 	27		 	—		 	27		 	7		 	—		 	 $440 - $475	
Nova Ridge	2018	 	108		 	—		 	108		 	—		 	—		 	 $620 - $760	
Tera Luna	2017	 	116		 	—		 	116		 	—		 	—		 	 $540 - $590	
Onyx	2018	 	88		 	—		 	88		 	—		 	—		 	 $425 - $465	
Tule Springs	TBD	 	339		 	—		 	339		 	—		 	—		 	 TBD	
Cactus/Jones	TBD	 	54		 	—		 	54		 	—		 	—		 	 TBD	
Commerce & Deer Springs	TBD	 	143		 	—		 	143		 	—		 	—		 	 TBD	
Nevada Total	 	 	3,064		 	1,070		 	1,994		 	184		 	310		 	 	
Pardee Total	 	 	17,690		 	2,273		 	15,348		 	646		 	896		 	 	

- 52 -

Quadrant Homes  

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
Washington	 	 	 	 	 	 	 	 	 	 	 	 	 	
Snohomish County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Evergreen Heights, Monroe	2016	 	71		 	46		 	25		 	25		 	43		 	$459 - $558	
The Grove at Canyon Park, Bothell	2017	 	60		 	9		 	51		 	46		 	9		 	$645 - $780	
Greenstone Heights, Bothell	2017	 	41		 	—		 	41		 	12		 	—		 	$920 - $1,102	
King County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Viscaia, Bellevue	2017	 	18		 	17		 	1		 	1		 	17		 	$880	
Trailside, Redmond	2017	 	9		 	2		 	7		 	5		 	2		 	$1,119 - $1,317	
Vareze, Kirkland	2019	 	82		 	—		 	82		 	—		 	—		 	$661 - $871	
Parkwood Terrace, Woodinville	2017	 	15		 	2		 	13		 	13		 	2		 	$759 - $960	
Hazelwood Ridge, Newcastle	2017	 	30		 	3		 	27		 	25		 	3		 	$805 - $1,025	
Inglewood Landing, Sammamish	2018	 	21		 	—		 	21		 	—		 	—		 	$1,100 - $1,280	
Jacobs Landing, Issaquah	2017	 	20		 	—		 	20		 	1		 	—		 	$1,160 - $1,289	
Kirkwood Terrace, Sammamish	2018	 	12		 	—		 	12		 	—		 	—		 	$1,725 - $2,026	
English Landing P2, Redmond	2017	 	25		 	—		 	25		 	9		 	—		 	$1,084 - $1,340	
English Landing P1, Redmond	2018	 	50		 	—		 	50		 	—		 	—		 	$1,100 - $1,350	
Cedar Landing, North Bend	2018	 	138		 	—		 	138		 	—		 	—		 	$660 - $810	
Monarch Ridge, Sammamish	2018	 	59		 	—		 	59		 	—		 	—		 	$915 - $1,065	
Overlook at Summit Park, Maple Valley	2018	 	122		 	—		 	122		 	—		 	—		 	$600 - $765	
Ray Meadows, Redmond	2018	 	27		 	—		 	27		 	—		 	—		 	$1,094 - $1,355	
Wynstone, Federal Way	TBD	 	4		 	—		 	4		 	—		 	—		 	TBD	
Breva, Bellevue	2017	 	29		 	—		 	29		 	15		 	—		 	$777 - $888	
Canton Crossing, Maple Valley	2017	 	51		 	2		 	49		 	14		 	2		 	$563 - $655	
Aurea, Sammamish	2018	 	41		 	—		 	41		 	—		 	—		 	$670 - $860	
Aldea (Avalon Townhomes), Newcastle	2018	 	129		 	—		 	129		 	—		 	—		 	$620 - $885	
Pierce County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Harbor Hill S-5/6, Gig Harbor	2017	 	72		 	12		 	60		 	10		 	12		 	$443 - $501	
Harbor Hill S-2, Gig Harbor	2017	 	41		 	—		 	41		 	5		 	—		 	$425 - $464	
Kitsap County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mountain Aire, Poulsbo	2016	 	145		 	69		 	76		 	25		 	40		 	$412 - $473	
Winslow Grove, Bainbridge Island	2018	 	19		 	—		 	19		 	—		 	—		 	$1,067 - $1,212	
Closed Communities	N/A	 	—		 	—		 	—		 	—		 	76		 	N/A	
Washington Total	 	 	1,331		 	162		 	1,169		 	206		 	206		 	 	
Quadrant Total	 	 	1,331		 	162		 	1,169		 	206		 	206		 	 	

- 53 -

Trendmaker Homes

																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
Texas	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazoria County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona Lakes, Pearland	2014	 	34		 	27		 	7		 	6		 	6		 	$380	
Pomona, Manvel	2015	 	49		 	18		 	31		 	8		 	13		 	$360 - $455	
Rise Meridiana	2016	 	31		 	14		 	17		 	4		 	13		 	$288 - $346	
Fort Bend County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cross Creek Ranch 60', Fulshear	2013	 	35		 	13		 	22		 	4		 	9		 	$370 - $465	
Cross Creek Ranch 65', Fulshear	2013	 	61		 	47		 	14		 	4		 	14		 	$429 - $488	
Cross Creek Ranch 70', Fulshear	2013	 	100		 	70		 	30		 	5		 	10		 	$485 - $548	
Cross Creek Ranch 80', Fulshear	2013	 	68		 	63		 	5		 	2		 	10		 	$551 - $666	
Cross Creek Ranch 90', Fulshear	2013	 	28		 	22		 	6		 	4		 	10		 	$654 - $718	
Villas at Cross Creek Ranch, Fulshear	2013	 	101		 	101		 	—		 	—		 	1		 	$454 - $496	
Fulshear Run, Richmond	2016	 	45		 	11		 	34		 	4		 	10		 	$562 - $668	
Harvest Green 75', Richmond	2015	 	21		 	16		 	5		 	2		 	7		 	$426 - $500	
Sienna Plantation 85', Missouri City	2015	 	39		 	20		 	19		 	1		 	10		 	$546 - $645	
Villas at Sienna South, Missouri City	2015	 	19		 	17		 	2		 	2		 	8		 	$383 - $407	
Lakes of Bella Terra, Richmond	2013	 	109		 	109		 	—		 	—		 	8		 	$465 - $553	
Villas at Aliana, Richmond	2013	 	117		 	98		 	19		 	5		 	11		 	$399 - $451	
Riverstone 55', Sugar Land	2013	 	97		 	97		 	—		 	—		 	1		 	$437 - $467	
Harris County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Towne Lake Living Views, Cypress	2013	 	122		 	122		 	—		 	—		 	4		 	$468 - $561	
The Groves, Humble	2015	 	72		 	41		 	31		 	2		 	12		 	$323 - $524	
Lakes of Creekside	2015	 	21		 	7		 	14		 	1		 	6		 	$512 - $585	
Bridgeland '80, Cypress	2015	 	117		 	96		 	21		 	6		 	12		 	$522 - $611	
Bridgeland Patio, Cypress	2017	 	30		 	8		 	22		 	10		 	7		 	$344 - $413	
Bridgeland 70'	TBD	 	4		 	—		 	4		 	—		 	—		 	TBD	
Villas at Bridgeland 50'	TBD	 	1		 	—		 	1		 	—		 	—		 	TBD	
Elyson 70', Cypress	2017	 	20		 	4		 	16		 	3		 	4		 	$454 - $496	
Hidden Arbor, Cypress	2015	 	129		 	66		 	63		 	26		 	42		 	$366 - $586	
Clear Lake, Houston	2015	 	770		 	255		 	515		 	54		 	53		 	$330 - $655	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Woodtrace, Woodtrace	2014	 	39		 	26		 	13		 	3		 	8		 	$438 - $480	
Northgrove, Tomball	2015	 	25		 	5		 	20		 	—		 	4		 	$454 - $498	
Bender's Landing Estates, Spring	2014	 	104		 	50		 	54		 	11		 	11		 	$468 - $563	
The Woodlands, Creekside Park	2015	 	100		 	29		 	71		 	10		 	15		 	$410 - $624	
Waller County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cane Island, Katy	2015	 	23		 	17		 	6		 	1		 	3		 	$525 - $634	
Mustang Estates	TBD	 	350		 	—		 	350		 	—		 	—		 	TBD	
Williamson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Crystal Falls	2016	 	29		 	7		 	22		 	8		 	4		 	$460 - $535	
Rancho Sienna 60'	2017	 	26		 	1		 	25		 	4		 	1		 	$350 - $422	
Hays County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belterra 60', Austin	2017	 	28		 	3		 	25		 	7		 	3		 	$375 - $466	
Belterra 80', Austin	2016	 	37		 	14		 	23		 	5		 	8		 	$535 - $603	
Headwaters, Dripping Springs	2017	 	30		 	3		 	27		 	9		 	3		 	$420 - $479	
Travis County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lakes Edge 70'	TBD	 	6		 	—		 	6		 	1		 	—		 	$620 - $806	
Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Avanti Custom Homes	2007	 	125		 	123		 	2		 	1		 	2		 	$480 - $856	
Texas Total	 	 	3,162		 	1,620		 	1,542		 	213		 	343		 	 	
Trendmaker Homes Total	 	 	3,162		 	1,620		 	1,542		 	213		 	343		 	 	

- 54 -

TRI Pointe Homes

	
																			
County, Project, City	Year of
First
Delivery (1)	 	Total
Number of
Lots (2)	 	Cumulative
Homes
Delivered
as of
September 30,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
Southern California	 	 	 	 	 	 	 	 	 	 	 	 	 	
Orange County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Messina, Irvine	2014	 	102		 	88		 	14		 	8		 	18		 	 $1,565 - $1,710	
Aria, Rancho Mission Viejo	2016	 	151		 	82		 	69		 	17		 	34		 	 $623 - $688	
Aubergine, Rancho Mission Viejo	2016	 	66		 	38		 	28		 	24		 	15		 	 $983 - $1,129	
Viridian	2017	 	57		 	—		 	57		 	—		 	—		 	 $855 - $920	
Carlisle 10-Pack Garden Court, Irvine	2017	 	74		 	8		 	66		 	39		 	8		 	 $670 - $780	
Sterling Row Townhomes, Irvine	2017	 	96		 	11		 	85		 	33		 	11		 	 $574 - $754	
Varenna at Orchard Hills, Irvine	2016	 	71		 	26		 	18		 	13		 	18		 	 $1,170 - $1,235	
Alston, Anaheim	2017	 	75		 	—		 	75		 	19		 	—		 	 $805 - $850	
StrataPointe, Buena Park	2017	 	149		 	10		 	139		 	55		 	10		 	 $515 - $656	
Cadence Park	2018	 	70		 	—		 	70		 	—		 	—		 	 TBD	
San Diego County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prism at Weston	2018	 	142		 	—		 	142		 	—		 	—		 	 $585 - $620	
Talus at Weston	2018	 	63		 	—		 	63		 	—		 	—		 	 $680 - $705	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Kite Ridge, Riverside	2014	 	87		 	87		 	—		 	—		 	25		 	 $472 - $500	
Serrano Ridge at Sycamore Creek, Riverside	2015	 	87		 	87		 	—		 	—		 	24		 	 $403 - $429	
Terrassa Court, Corona	2015	 	94		 	51		 	43		 	29		 	38		 	 $421 - $474	
Terrassa Villas, Corona	2015	 	52		 	14		 	38		 	—		 	8		 	 $453 - $495	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Grayson at Five Knolls, Santa Clarita	2015	 	119		 	89		 	30		 	16		 	40		 	 $559 - $586	
VuePointe, El Monte	2017	 	102		 	—		 	102		 	22		 	—		 	 $452 - $552	
Bradford @ Rosedale, Azusa	2017	 	52		 	5		 	22		 	13		 	5		 	 $816 - $871	
Golden Valley/ Lucera at Aliento	2017	 	67		 	6		 	61		 	16		 	6		 	 $622 - $645	
Golden Valley/Tierno at Aliento	2017	 	63		 	8		 	55		 	20		 	8		 	 $667 - $695	
Sonrisa	2017	 	155		 	—		 	155		 	—		 	—		 	 TBD	
San Bernardino County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona at Parkside, Ontario	2015	 	152		 	140		 	12		 	12		 	48		 	 $405 - $443	
Kensington at Park Place, Ontario	2015	 	67		 	67		 	—		 	—		 	22		 	 $507 - $539	
St. James at Park Place, Ontario	2015	 	125		 	89		 	36		 	29		 	38		 	 $514 - $544	
Ventura County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Westerlies, Oxnard	2015	 	116		 	95		 	21		 	21		 	50		 	 $435 - $552	
Southern California Total	 	 	2,454		 	1,001		 	1,401		 	386		 	426		 	 	
Northern California	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contra Costa County:	 	 		 		 		 		 		 	 	
Berkshire at Barrington, Brentwood	2014	 	123		 	122		 	1		 	—		 	16		 	 $508 - $587	
Hawthorne at Barrington, Brentwood	2014	 	105		 	103		 	2		 	1		 	9		 	 $572 - $620	
Marquette at Barrington, Brentwood	2015	 	90		 	64		 	26		 	9		 	20		 	 $695 - $730	
Wynstone at Barrington, Brentwood	2017	 	92		 	19		 	73		 	18		 	19		 	 $480 - $634	
Santa Clara County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derose, Morgan Hill	2018	 	65		 	—		 	65		 	—		 	—		 	 $600 - $820	
Solano County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Redstone, Vacaville	2015	 	141		 	91		 	50		 	16		 	31		 	 $470 - $533	
Green Valley-Lewis, Fairfield	2018	 	91		 	—		 	91		 	—		 	—		 	 $510 - $550	
Green Valley-Westgate, Fairfield	2018	 	56		 	—		 	56		 	—		 	—		 	 $555 - $599	
San Joaquin County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ventana, Tracy	2015	 	93		 	85		 	8		 	4		 	29		 	 $457 - $557	
Sundance, Mountain House	2015	 	113		 	102		 	11		 	5		 	28		 	 $595 - $675	
Sundance II, Mountain House	2018	 	138		 	—		 	138		 	8		 	—		 	 $600 - $710	

- 55 -

	
																			
Alameda County:	 	 		 		 		 		 		 	 	
Cadence, Alameda Landing	2015	 	91		 	77		 	14		 	13		 	15		 	 $1,182 - $1,390	
Linear, Alameda Landing	2015	 	106		 	69		 	37		 	15		 	5		 	 $769 - $1,020	
Symmetry, Alameda Landing	2016	 	56		 	51		 	5		 	—		 	25		 	 $865 - $950	
Commercial, Alameda Landing	 	 	2		 	—		 	2		 	—		 	—		 	$620	
Parasol, Fremont	2016	 	39		 	39		 	—		 	—		 	15		 	$770 - $1,050	
Blackstone at the Cannery, Hayward SFA	2016	 	105		 	40		 	65		 	32		 	16		 	$626 - $726	
Blackstone at the Cannery, Hayward SFD	2016	 	52		 	47		 	5		 	8		 	28		 	$709 - $769	
Coopers Place, Livermore	2017	 	31		 	2		 	29		 	18		 	2		 	$660 - $670	
Slate at Jordan Ranch, Dublin	2017	 	56		 	2		 	54		 	12		 	2		 	$1,050 - $1,169	
Onyx at Jordan Ranch, Dublin	2017	 	105		 	—		 	105		 	8		 	—		 	$875 - $925	
Jordan Ranch II, Dublin	2018	 	45		 	—		 	45		 	—		 	—		 	$855 - $1,035	
Mission Stevenson, Fremont	2018	 	77		 	—		 	77		 	—		 	—		 	$675 - $965	
Palm Avenue, Fremont	2018	 	31		 	—		 	31		 	—		 	—		 	$2,080 - $2,235	
Pleasant Hill	2018	 	44		 	—		 	44		 	—		 	—		 	TBD	
Sacramento County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natomas	2018	 	94		 	—		 	94		 	—		 	—		 	TBD	
Northern California Total	 	 	2,041		 	913		 	1,128		 	167		 	260		 	 	
California Total	 	 	4,495		 	1,914		 	2,529		 	553		 	686		 	 	
Colorado	 	 		 		 		 		 		 	 	
Douglas County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Terrain 4000 Series, Castle Rock	2013	 	149		 	147		 	2		 	—		 	5		 	 $358 - $411	
Terrain 3500 Series, Castle Rock	2015	 	67		 	64		 	3		 	—		 	—		 	 $327 - $350	
Terrain Ravenwood Village (3500)	2017	 	157		 	—		 	88		 	7		 	—		 	 $379 - $426	
Terrain Ravenwood Village (4000)	2017	 	100		 	—		 	38		 	5		 	—		 	 $400 - $463	
Jefferson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Leyden Rock 5000 Series, Arvada	2015	 	67		 	67		 	—		 	—		 	3		 	 $454 - $509	
Candelas 6000 Series, Arvada	2015	 	76		 	40		 	36		 	19		 	19		 	 $534 - $671	
Candelas 3500 Series, Arvada	2016	 	97		 	22		 	75		 	18		 	18		 	 $405 - $467	
Candelas 5000 Series, Arvada	2017	 	62		 	—		 	62		 	12		 	—		 	 $510 - $564	
Crown Pointe, Westminster	2018	 	64		 	—		 	64		 	—		 	—		 	 $415 - $486	
Larimer County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Centerra 5000 Series, Loveland	2015	 	79		 	63		 	16		 	9		 	24		 	 $411 - $469	
Arapahoe County:	 	 		 		 		 		 		 	 	
Whispering Pines, Aurora	2015	 	115		 	19		 	96		 	21		 	16		 	 $589 - $656	
Adams County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amber Creek, Thornton	2017	 	121		 	13		 	108		 	15		 	12		 	 $386 - $469	
Colorado Total	 	 	1,154		 	435		 	588		 	106		 	97		 	 	
TRI Pointe Total	 	 	5,649		 	2,349		 	3,117		 	659		 	783		 	 	

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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,
2017	 	Lots
Owned as of
September 30,
2017 (3)	 	Backlog as of
September 30,
2017 (4)(5)	 	Homes
Delivered
for the Nine
Months Ended
September 30,
2017	 	Sales Price
Range
(in thousands) (6)	
Maryland	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anne Arundel County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Two Rivers Townhomes, Crofton	2017	 	36		 	—		 	36		 	17		 	—		 	$440 - $520	
Two Rivers Cascades SFD, Crofton	2018	 	7		 	—		 	7		 	—		 	—		 	$600 - $620	
Watson's Glen, Millersville	2015	 	103		 	4		 	99		 	—		 	—		 	Closed	
Frederick County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Landsdale, Monrovia	 	 	—		 	 	 	 	 	 	 	 	 	 	
Landsdale SFD	2015	 	222		 	69		 	153		 	26		 	29		 	$495 - $597	
Landsdale Townhomes	2015	 	100		 	33		 	67		 	12		 	7		 	$320 - $378	
Landsdale TND Neo SFD	2015	 	77		 	25		 	52		 	5		 	11		 	$440 - $473	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabin Branch, Clarksburg	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabin Branch SFD	2014	 	359		 	123		 	236		 	33		 	32		 	 $480 - $745	
Cabin Branch Avenue Townhomes	2017	 	121		 	1		 	120		 	16		 	1		 	$425 - $485	
Cabin Branch Townhomes	2014	 	507		 	192		 	315		 	22		 	61		 	 $391 - $435	
Preserve at Stoney Spring	N/A	 	5		 	—		 	5		 	—		 	—		 	 N/A	
Poplar Run, Silver Spring	 	 	 	 	 	 	 	 	 	 	 	 	 	
Poplar Run SFD	2010	 	305		 	270		 	35		 	19		 	21		 	 $562 - $786	
Poplar Run Single Family Neos	2016	 	29		 	26		 	3		 	1		 	11		 	 $545 - $635	
Potomac Highlands, Potomac	2017	 	23		 	5		 	18		 	7		#	5		 	 $1,191 - $1,289	
Glenmont MetroCenter, Silver Spring	2016	 	171		 	20		 	151		 	17		 	13		 	 $435 - $513	
Chapman Row, Rockville	2018	 	61		 	—		 	61		 	—		 	—		 	 TBD	
Closed Communities	N/A	 	—		 	—		 	—		 	—		 	1		 	 	
Maryland Total	 	 	2,126		 	768		 	1,358		 	175		 	192		 	 	
Virginia	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fairfax County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stuart Mill & Timber Lake, Oakton	2014	 	14		 	8		 	6		 	4		 	1		 	$1,363 - $1,675	
Stuart Mill, Oakton	N/A	 	5		 	—		 	5		 	—		 	—		 	N/A	
Westgrove, Fairfax	2018	 	24		 	—		 	24		 	—		 	—		 	TBD	
West Oaks Corner	2019	 	188		 	—		 	188		 	—		 	—		 	TBD	
Prince William County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Villages of Piedmont, Haymarket	2015	 	168		 	84		 	84		 	31		 	35		 	$370 - $440	
Loudoun County:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brambleton, Ashburn	 	 		 		 		 		 		 	 	
West Park SFD	2018	 	12		 	—		 	12		 	4		 	—		 	$708 - $724	
Vistas at Lansdowne, Lansdowne	2015	 	120		 	52		 	68		 	17		 	14		 	$574 - $674	
Willowsford Grant II, Aldie	2017	 	29		 	7		 	22		 	5		 	7		 	$1,000 - $1,326	
Willowsford Greens	N/A	 	5		 	—		 	5		 	—		 	—		 	N/A	
Closed Communities	N/A	 	—		 	—		 	—		 	—		 	16		 	 	
Virginia Total	 	 	565		 	151		 	414		 	61		 	73		 	 	
Winchester Total	 	 	2,691		 	919		 	1,772		 	236		 	265		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Combined Company Total	 	 	33,832		 	8,777		 	24,803		 	2,265		 	2,940		 	 	
__________

(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, 2017 include owned lots in backlog as of September 30, 2017 .	
		
(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, 2017 , 1,695 homes are under construction, 278 homes have completed construction, and 292 homes have not started construction.	

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(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.	
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements contained elsewhere in this report, which have been prepared in accordance with GAAP. Our condensed notes to the unaudited consolidated financial statements 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, 2016 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 condensed notes to the unaudited 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 unaudited 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 nine months ended September 30, 2017 . We did not enter into during the nine months ended September 30, 2017 , 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, 2017 .
Our management, including our Principal Executive Officer and Principal Financial Officer, has evaluated our internal control over financial reporting to determine whether any change occurred during the nine months ended September 30, 2017 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 nine months ended September 30, 2017 .

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PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	
The information required with respect to this item can be found under Note 13, Commitments and Contingencies-Legal Matters , of the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and is incorporated by reference into this Item 1.

Item 1A.	Risk Factors	

The following supplements and updates the risk factors in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2016.  If any of the risks discussed below or in our Annual Report on Form 10-K occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly and you could lose all or a part of your investment.  Some statements in this Quarterly Report on Form 10-Q, including statements in the following risk factor, constitute forward-looking statements.  Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q entitled “Cautionary Note Concerning Forward-Looking Statements.”

Risks Related to Our Business
We could be responsible for employment-related liabilities with respect to our contractors’ employees.
Several other homebuilders have received inquiries from regulatory agencies concerning whether homebuilders using contractors are deemed to be employers of the employees of such contractors under certain circumstances. Although contractors are independent of the homebuilders that contract with them under normal management practices and the terms of trade contracts and subcontracts within the homebuilding industry, if regulatory agencies reclassify the employees of contractors as employees of homebuilders, homebuilders using contractors could be responsible for wage and hour labor laws, employment discrimination, workers’ compensation and other employment-related liabilities of their contractors.  A 2015 National Labor Relations Board ruling held that for labor law purposes a firm could under some circumstances be responsible as a joint employer of its contractors' employees. This ruling has been appealed and legislation has been introduced to limit joint-employer liability. If the ruling is not overturned on appeal, limited by legislation, or revisited by the National Labor Relations Board, it could make us responsible for collective bargaining obligations and labor law violations by our subcontractors. Governmental rulings that make us responsible for labor practices by our subcontractors could create substantial exposures for us in situations that are not within our control. Even if we are not deemed to be joint employers with our contractors, we may be subject to legislation, such as California Labor Code Section 2810.3 that requires us to share liability with our contractors for the payment of wages and the failure to secure valid workers’ compensation coverage. In addition, California’s Governor recently signed legislation, AB 1701, that will require direct construction contractors to assume and be liable for unpaid wages, fringe or other benefit payments or contributions, including interest, incurred by a subcontractor at any tier for contracts entered into on or after January 1, 2018. While we are still analyzing the ultimate impact this legislation could have on our business, we believe it may result in increased costs. While we attempt to pass on cost increases to homebuyers through increased prices, we may be unable to offset cost increases with higher selling prices.

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	
On February 28, 2017, we announced that our board of directors approved the 2017 Repurchase Program, authorizing the repurchase of shares of common stock with an aggregate value of up to $100 million through March 31, 2018.  On July 25, 2017 our board of directors authorized the repurchase of up to an additional $50 million of our common stock under the 2017 Repurchase Program, increasing the aggregate authorization from $100 million to $150 million. Purchases of common stock pursuant to the 2017 Repurchase Program 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 2017 Repurchase 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, 2017 , we repurchased and retired the following shares pursuant to our 2017 Repurchase Program:

- 59 -

	
															
 	 	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, 2017 to July 31, 2017	 	—		 	$	—		 	—		 	$	50,303,199		
August 1, 2017 to August 31, 2017	 	310,000		 	$	12.84		 	310,000		 	$	46,321,839		
September 1, 2017 to September 30, 2017	 	665,700		 	$	12.83		 	665,700		 	$	37,783,295		
Total	 	975,700		 	$	12.83		 	975,700		 	 	
__________
(1)     During the three months ended September 30, 2017 , we repurchased and retired an aggregate of 975,700 shares of our common stock for $12,519,904 .

- 60 -

		
Item 6.	Exhibits  	

			
Exhibit
Number	 	Exhibit Description	
 	 	 	
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))	
 	 	 	
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 nine months ended September 30, 2017, 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 25, 2017	 	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 25, 2017	/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 25, 2017	/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, 2017 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 25, 2017	/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, 2017 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 25, 2017	/s/ Michael D. Grubbs	
 	Michael D. Grubbs	
 	Chief Financial Officer (Principal Financial Officer)