UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________________
FORM 8-K
_______________________________________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 25, 2018
_______________________________________________________________________________________

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

	
					
Delaware	 	1-35796	 	61-1763235	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	

	
					
19540 Jamboree Road, Suite 300, Irvine, California	 	 	 	92612	
(Address of principal executive offices)	 	 	 	(Zip Code)	
Registrant’s telephone number, including area code (949) 438-1400
Not Applicable
(Former name or former address, if changed since last report.)
_______________________________________________________________________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

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

		
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

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

1

		
Item 2.02	Results of Operations and Financial Condition  	

On April 25, 2018 , TRI Pointe Group, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended March 31, 2018 .  A copy of the Company’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including the exhibits attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing. In addition, the press release furnished as an exhibit to this report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Item 9.01	Financial Statements and Exhibits	

(d)	Exhibits	
		
99.1	Press Release dated April 25, 2018	

2

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

	
			
 	TRI Pointe Group, Inc.	
 	 	 	
Date: April 25, 2018	By:	/s/ Michael D. Grubbs	
 	 	Michael D. Grubbs,
Chief Financial Officer and Treasurer	

3

INDEX OF EXHIBITS

	
			
Exhibit
No.	  	Description of Document	
 	 	 	
99.1	  	Press Release dated April 25, 2018	

4

Exhibit 99.1

TRI POINTE GROUP, INC. REPORTS 2018 FIRST QUARTER RESULTS

-New Home Deliveries up 22% and New Home Orders up 15% for the Quarter- 
-Backlog Dollar Value up 39% on a 24% Increase in Backlog Units-
-Homebuilding Gross Margin Percentage Increased 390 Basis Points to 22.7%-
-Reports Diluted Earnings Per Share of $0.28 , up from $0.05 in the Prior Year-
Irvine, California, April 25, 2018 /Business Wire/ – TRI Pointe Group, Inc. (the "Company") (NYSE: TPH) today announced results for the first quarter ended March 31, 2018 .
Results and Operational Data for First Quarter 2018 and Comparisons to First Quarter 2017
		
•	Net income available to common stockholders was $42.9 million , or $0.28 per diluted share, compared to $8.2 million , or $0.05 per diluted share	
		
•	New home orders of 1,496 compared to 1,299 , an increase of 15%	
		
•	Active selling communities averaged 129.8 compared to 125.5 , an increase of 3%	
		
◦	New home orders per average selling community were 11.5 orders (3.8 monthly) compared to 10.4 orders (3.5 monthly)	
		
◦	Cancellation rate remained flat at 14%	
		
•	Backlog units at quarter end of 2,143 homes compared to 1,734 , an increase of 24%	
		
◦	Dollar value of backlog at quarter end of $1.4 billion compared to $1.0 billion , an increase of 39%	
		
◦	Average sales price in backlog at quarter end of $658,000 compared to $585,000, an increase of 12%	
		
•	Home sales revenue of $582.6 million compared to $392.0 million , an increase of 49%	
		
◦	New home deliveries of 924 homes compared to 758 homes, an increase of 22%	
		
◦	Average sales price of homes delivered of $630,000 compared to $517,000, an increase of 22%	
		
•	Homebuilding gross margin percentage of 22.7% compared to 18.8% , an increase of 390 basis points	
		
◦	Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 25.2% *	
		
•	SG&A expense as a percentage of homes sales revenue of 12.9% compared to 15.7% , a decrease of 280 basis points	
		
•	Ratios of debt-to-capital and net debt-to-net capital of 42.9% and 36.9% *, respectively, as of March 31, 2018	
		
•	Ended first quarter of 2018 with total liquidity of $917.2 million, including cash of $324.6 million and $592.6 million of availability under the Company's unsecured revolving credit facility	
 
*    See "Reconciliation of Non-GAAP Financial Measures"
“2018 is off to a great start,” said TRI Pointe Group Chief Executive Officer Doug Bauer. “Earnings per share for the first quarter of 2018 grew more than five-fold on a year-over-year basis, thanks to significant increases in unit deliveries, average sales prices, and homebuilding gross margins. We saw strong demand throughout the quarter, as evidenced by our absorption rate of 3.8 homes per community per month. This demand was broad based, both from a geographic and segmentation standpoint, which enabled us to raise prices in several of our communities and helped offset cost pressures that the homebuilding industry has been facing. Our legacy assets in California continued to deliver strong results for our company, and I am pleased to report that all of our brands posted year-over-year homebuilding gross margin improvement. With excellent momentum on a number of fronts and a 39% increase to quarter-ending backlog on a dollar value basis, TRI Pointe Group is well positioned to achieve its goals in 2018.”

Page 1

First Quarter 2018 Operating Results
Net income available to common stockholders was $42.9 million , or $0.28 per diluted share, for the first quarter of 2018 , compared to net income available to common stockholders of $8.2 million , or $0.05 per diluted share, for the first quarter of 2017 .  
Home sales revenue increased $190.6 million, or 49%, to $582.6 million for the first quarter of 2018 , as compared to $392.0 million for the first quarter of 2017 .  The increase was primarily attributable to a 22% increase in new home deliveries to 924 , and a 22% increase in the average sales price of homes delivered to $630,000, compared to $517,000 in the first quarter of 2017 .
New home orders increased 15% to 1,496 homes for the first quarter of 2018 , as compared to 1,299 homes for the same period in 2017 .  Average selling communities increased 3% to 129.8 for the first quarter of 2018 compared to 125.5 for the first quarter of 2017 . The Company’s overall absorption rate per average selling community increased 11% for the first quarter of 2018 to 11.5 orders ( 3.8 monthly) compared to 10.4 orders (3.5 monthly) during the first quarter of 2017.  
The Company ended the quarter with 2,143 homes in backlog, representing approximately $1.4 billion . The average sales price of homes in backlog as of March 31, 2018 increased $73,000, or 12%, to $658,000, compared to $585,000 as of March 31, 2017 .  
Homebuilding gross margin percentage for the first quarter of 2018 increased to 22.7% , compared to 18.8% for the first quarter of 2017 .  Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 25.2% * for the first quarter of 2018 , compared to 21.3% * for the first quarter of 2017 .  The increase in homebuilding gross margin percentage was largely due to the mix of homes delivered, primarily in California.
Selling, general and administrative ("SG&A") expense for the first quarter of 2018 decreased to 12.9% of home sales revenue as compared to 15.7% for the first quarter of 2017 primarily due to increased leverage as a result of a 49% increase in home sales revenue. 
“Our performance this quarter is a testament to the quality of our local leadership teams and the emphasis TRI Pointe Group has put on design and innovation,” said TRI Pointe Group Chief Operating Officer Tom Mitchell. “Housing fundamentals remain strong in the markets in which we build, and we’ve been able to capitalize on this strength by making sure we have the right product in the right location. We have empowered our local teams to run their operations in an entrepreneurial manner, and they in turn have embraced TRI Pointe’s unique approach to homebuilding. This dynamic has been our formula for success for several years now, and we believe it will continue into the future.”
* See “Reconciliation of Non-GAAP Financial Measures”
Outlook
For the second quarter of 2018, the Company expects to open 16 new communities, and close out of 19, resulting in 128 active selling communities as of June 30, 2018.  In addition, the Company anticipates delivering 50% to 55% of its 2,143 units in backlog as of March 31, 2018 at an average sales price in a range of $620,000 to $630,000.  The Company anticipates its homebuilding gross margin percentage will be in a range of 21.0% to 21.5% for the second quarter. Finally, the Company expects its SG&A expense a s a percentage of home sales revenue to be in the range of 11.5% to 12.0% for the second quarter.
For the full year 2018, the Company is reiterating its original guidance of growing average selling communities by 5% compared to 2017 and delivering between 5,100 and 5,400 homes at an average sales price of approximately $610,000. The Company is updating its homebuilding gross margin percentage for the full year 2018 to be in the range of 21.0% to 21.5%, raising the low end of its previously stated range of 20.5% to 21.5%. The Company is reiterating its original guidance of SG&A expense as a percentage of home sales revenue to be in the range of 9.9% to 10.3% and its effective tax rate to be in the range of 25% to 26%.

Page 2

Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Wednesday, April 25, 2018 .  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer and Mike Grubbs, Chief Financial Officer.
Interested parties can listen to the call live and view the related presentation slides on the internet through the Investor Relations section of the Company’s website at www.TRIPointeGroup.com . Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software.  The call can also be accessed by dialing 1-877-407-3982 for domestic participants or 1-201-493-6780 for international participants. Participants should ask for the TRI Pointe Group First Quarter 2018 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start. The replay of the call will be available for two weeks following the call.  To access the replay, the domestic dial-in number is 1-844-512-2921, the international dial-in number is 1-412-317-6671, and the reference code is #13678166.  An archive of the webcast will be available on the Company’s website for a limited time.
About TRI Pointe Group, Inc.
Headquartered in Irvine, California, TRI Pointe Group, Inc. (NYSE: TPH) is among the largest public homebuilders in the United States. The company designs, constructs and sells premium single-family 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. Additional information is available at www.TRIPointeGroup.com . Winchester is a registered trademark and is used with permission.

Page 3

Forward-Looking Statements
Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements.  These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending.  Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes.  The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly.  These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the 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 any 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 regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our customers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission.  The foregoing list is not exhaustive.  New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.
Investor Relations Contact:
Chris Martin, TRI Pointe Group
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TRIPointeGroup.com , 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com , 310-437-0045

 

Page 4

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

												
 	Three Months Ended March 31,	
 	2018	 	2017	 	Change	
Operating Data:	 	 	 	 	 	
Home sales revenue	$	582,572		 	$	392,004		 	$	190,568		
Homebuilding gross margin	$	132,070		 	$	73,600		 	$	58,470		
Homebuilding gross margin %	22.7	%	 	18.8	%	 	3.9	 %	
Adjusted homebuilding gross margin %*	25.2	%	 	21.3	%	 	3.9	 %	
SG&A expense	$	75,097		 	$	61,349		 	$	13,748		
SG&A expense as a % of home sales
   revenue	12.9	%	 	15.7	%	 	(2.8	)%	
Net income available to common
   stockholders	$	42,880		 	$	8,193		 	$	34,687		
Adjusted EBITDA*	$	80,988		 	$	27,681		 	$	53,307		
Interest incurred	$	21,520		 	$	18,873		 	$	2,647		
Interest in cost of home sales	$	14,229		 	$	9,680		 	$	4,549		
 	 	 	 	 	 	
Other Data:	 	 	 	 	 	
Net new home orders	1,496		 	1,299		 	197		
New homes delivered	924		 	758		 	166		
Average sales price of homes delivered	$	630		 	$	517		 	$	113		
Average selling communities	129.8		 	125.5		 	4.3		
Selling communities at end of period	131		 	123		 	8		
Cancellation rate	14	%	 	14	%	 	0	 %	
Backlog (estimated dollar value)	$	1,409,042		 	$	1,014,163		 	$	394,879		
Backlog (homes)	2,143		 	1,734		 	409		
Average sales price in backlog	$	658		 	$	585		 	$	73		
 	 	 	 	 	 	
 	March 31,	 	December 31,	 	 	
 	2018	 	2017	 	Change	
Balance Sheet Data:	 	 	 	 	 	
Cash and cash equivalents	$	324,608		 	$	282,914		 	$	41,694		
Real estate inventories	$	3,145,555		 	$	3,105,553		 	$	40,002		
Lots owned or controlled	28,191		 	27,312		 	879		
Homes under construction (1)	2,282		 	1,941		 	341		
Homes completed, unsold	201		 	269		 	(68	)	
Debt	$	1,473,074		 	$	1,471,302		 	$	1,772		
Stockholders' equity	$	1,963,644		 	$	1,929,722		 	$	33,922		
Book capitalization	$	3,436,718		 	$	3,401,024		 	$	35,694		
Ratio of debt-to-capital	42.9	%	 	43.3	%	 	(0.4	)%	
Ratio of net debt-to-net capital*	36.9	%	 	38.1	%	 	(1.2	)%	
__________
		
(1)  	Homes under construction included 80 and 60 models at March 31, 2018 and December 31, 2017 , respectively.	
		
*	See “Reconciliation of Non-GAAP Financial Measures”	

Page 5

CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	
								
 	March 31,	 	December 31,	
 	2018	 	2017	
Assets	(unaudited)	 	 	
Cash and cash equivalents	$	324,608		 	$	282,914		
Receivables	55,249		 	125,600		
Real estate inventories	3,145,555		 	3,105,553		
Investments in unconsolidated entities	4,699		 	5,870		
Goodwill and other intangible assets, net	160,827		 	160,961		
Deferred tax assets, net	73,818		 	76,413		
Other assets	82,005		 	48,070		
Total assets	$	3,846,761		 	$	3,805,381		
 	 	 	 	
Liabilities	 	 	 	
Accounts payable	$	76,249		 	$	72,870		
Accrued expenses and other liabilities	333,190		 	330,882		
Senior notes	1,473,074		 	1,471,302		
Total liabilities	1,882,513		 	1,875,054		
 	 	 	 	
Commitments and contingencies	 	 	 	
 	 	 	 	
Equity	 	 	 	
Stockholders' Equity:	 	 	 	
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of March 31, 2018 and
December 31, 2017, respectively	—		 	—		
Common stock, $0.01 par value, 500,000,000 shares authorized;
  151,922,459 and 151,162,999 shares issued and outstanding at
   March 31, 2018 and December 31, 2017, respectively	1,519		 	1,512		
Additional paid-in capital	792,369		 	793,980		
Retained earnings	1,169,756		 	1,134,230		
Total stockholders' equity	1,963,644		 	1,929,722		
Noncontrolling interests	604		 	605		
Total equity	1,964,248		 	1,930,327		
Total liabilities and equity	$	3,846,761		 	$	3,805,381		

 

Page 6

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

	
								
 	Three Months Ended March 31,	
 	2018	 	2017	
Homebuilding:	 		 	 		
Home sales revenue	$	582,572		 	$	392,004		
Land and lot sales revenue	223		 	578		
Other operations revenue	598		 	568		
Total revenues	583,393		 	393,150		
Cost of home sales	450,502		 	318,404		
Cost of land and lot sales	503		 	654		
Other operations expense	602		 	560		
Sales and marketing	38,283		 	26,700		
General and administrative	36,814		 	34,649		
Homebuilding income from operations	56,689		 	12,183		
Equity in (loss) income of unconsolidated entities	(468	)	 	138		
Other income, net	171		 	77		
Homebuilding income before income taxes	56,392		 	12,398		
Financial Services:	 	 	 	
Revenues	283		 	241		
Expenses	137		 	74		
Equity in income of unconsolidated entities	1,002		 	266		
Financial services income before income taxes	1,148		 	433		
Income before income taxes	57,540		 	12,831		
Provision for income taxes	(14,660	)	 	(4,614	)	
Net income	42,880		 	8,217		
Net income attributable to noncontrolling interests	—		 	(24	)	
Net income available to common stockholders	$	42,880		 	$	8,193		
Earnings per share	 	 	 		
Basic	$	0.28		 	$	0.05		
Diluted	$	0.28		 	$	0.05		
Weighted average shares outstanding	 	 	 		
Basic	151,464,547		 	158,769,478		
Diluted	152,775,851		 	159,390,586		

Page 7

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

	
														
 	Three Months Ended March 31,	
 	2018	 	2017	
 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	
New Homes Delivered:	 	 	 	 	 	 	 	
Maracay Homes	125		 	$	468		 	119		 	$	429		
Pardee Homes	274		 	659		 	196		 	427		
Quadrant Homes	83		 	739		 	63		 	633		
Trendmaker Homes	84		 	490		 	106		 	490		
TRI Pointe Homes	269		 	708		 	208		 	629		
Winchester Homes	89		 	570		 	66		 	524		
Total	924		 	$	630		 	758		 	$	517		

 	Three Months Ended March 31,	
 	2018	 	2017	
 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	
New Homes Delivered:	 	 	 	 	 	 	 	
California	400		 	$	736		 	299		 	$	570		
Colorado	60		 	580		 	30		 	564		
Maryland	66		 	544		 	46		 	499		
Virginia	23		 	645		 	20		 	582		
Arizona	125		 	468		 	119		 	429		
Nevada	83		 	503		 	75		 	364		
Texas	84		 	490		 	106		 	490		
Washington	83		 	739		 	63		 	633		
Total	924		 	$	630		 	758		 	$	517		

Page 8

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

	
												
 	Three Months Ended March 31,	
 	2018	 	2017	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	
Net New Home Orders:	 	 	 	 	 	 	 	
Maracay Homes	153		 	13.2		 	184		 	16.5		
Pardee Homes	473		 	32.5		 	378		 	28.5		
Quadrant Homes	108		 	7.0		 	120		 	7.5		
Trendmaker Homes	155		 	29.8		 	151		 	32.0		
TRI Pointe Homes	459		 	33.8		 	353		 	29.3		
Winchester Homes	148		 	13.5		 	113		 	11.7		
Total	1,496		 	129.8		 	1,299		 	125.5		

 	Three Months Ended March 31,	
 	2018	 	2017	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	
Net New Home Orders:	 	 	 	 	 	 	 	
California	628		 	44.5		 	564		 	41.5		
Colorado	102		 	7.0		 	53		 	5.0		
Maryland	100		 	9.5		 	67		 	8.0		
Virginia	48		 	4.0		 	46		 	3.7		
Arizona	153		 	13.2		 	184		 	16.5		
Nevada	202		 	14.8		 	114		 	11.3		
Texas	155		 	29.8		 	151		 	32.0		
Washington	108		 	7.0		 	120		 	7.5		
Total	1,496		 	129.8		 	1,299		 	125.5		

Page 9

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

	
																						
 	As of March 31, 2018	 	As of March 31, 2017	
 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	
Backlog:	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	245		 	$	123,617		 	$	505		 	313		 	$	153,389		 	$	490		
Pardee Homes	608		 	408,324		 	672		 	442		 	248,621		 	562		
Quadrant Homes	169		 	138,025		 	817		 	158		 	111,551		 	706		
Trendmaker Homes	244		 	134,632		 	552		 	208		 	107,860		 	519		
TRI Pointe Homes	667		 	474,240		 	711		 	443		 	283,986		 	641		
Winchester Homes	210		 	130,204		 	620		 	170		 	108,756		 	640		
Total	2,143		 	$	1,409,042		 	$	658		 	1,734		 	$	1,014,163		 	$	585		

 	As of March 31, 2018	 	As of March 31, 2017	
 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	
Backlog:	 	 	 	 	 	 	 	 	 	 	 	
California	894		 	$	662,008		 	$	741		 	667		 	$	421,381		 	$	632		
Colorado	142		 	81,743		 	576		 	82		 	50,100		 	611		
Maryland	147		 	83,339		 	567		 	123		 	73,226		 	595		
Virginia	63		 	46,865		 	744		 	47		 	35,530		 	756		
Arizona	245		 	123,617		 	505		 	313		 	153,389		 	490		
Nevada	239		 	138,813		 	581		 	136		 	61,126		 	449		
Texas	244		 	134,632		 	552		 	208		 	107,860		 	519		
Washington	169		 	138,025		 	817		 	158		 	111,551		 	706		
Total	2,143		 	$	1,409,042		 	$	658		 	1,734		 	$	1,014,163		 	$	585		

 

Page 10

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

	
						
 	March 31,	 	December 31,	
 	2018	 	2017	
Lots Owned or Controlled (1) :	 	 	 	
Maracay Homes	3,001		 	2,519		
Pardee Homes	15,613		 	15,144		
Quadrant Homes	1,773		 	1,726		
Trendmaker Homes	1,932		 	1,855		
TRI Pointe Homes	3,717		 	3,964		
Winchester Homes	2,155		 	2,104		
Total	28,191		 	27,312		

 	March 31,	 	December 31,	
 	2018	 	2017	
Lots Owned or Controlled (1) :	 	 	 	
California	16,140		 	16,292		
Colorado	782		 	742		
Maryland	1,445		 	1,507		
Virginia	710		 	597		
Arizona	3,001		 	2,519		
Nevada	2,408		 	2,074		
Texas	1,932		 	1,855		
Washington	1,773		 	1,726		
Total	28,191		 	27,312		

 	March 31,	 	December 31,	
 	2018	 	2017	
Lots by Ownership Type:	 	 	 	
Lots owned	23,690		 	23,940		
Lots controlled (1)	4,501		 	3,372		
Total	28,191		 	27,312		
__________
		
(1)  	As of March 31, 2018 and December 31, 2017 , lots controlled included lots that were under land option contracts or purchase contracts.	

Page 11

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

	
														
 	Three Months Ended March 31,	
 	2018	 	%	 	2017	 	%	
 	(dollars in thousands)	
Home sales revenue	$	582,572		 	100.0	%	 	$	392,004		 	100.0	%	
Cost of home sales	450,502		 	77.3	%	 	318,404		 	81.2	%	
Homebuilding gross margin	132,070		 	22.7	%	 	73,600		 	18.8	%	
Add:  interest in cost of home sales	14,229		 	2.4	%	 	9,680		 	2.5	%	
Add:  impairments and lot option abandonments	248		 	0.0	%	 	288		 	0.1	%	
Adjusted homebuilding gross margin	$	146,547		 	25.2	%	 	$	83,568		 	21.3	%	
Homebuilding gross margin percentage	22.7	%	 	 	 	18.8	%	 	 	
Adjusted homebuilding gross margin percentage	25.2	%	 	 	 	21.3	%	 	 	

 

Page 12

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

	
								
 	March 31, 2018	 	December 31, 2017	
Senior notes	$	1,473,074		 	$	1,471,302		
Total debt	1,473,074		 	1,471,302		
Stockholders’ equity	1,963,644		 	1,929,722		
Total capital	$	3,436,718		 	$	3,401,024		
Ratio of debt-to-capital (1)	42.9	%	 	43.3	%	
 			 			
Total debt	$	1,473,074		 	$	1,471,302		
Less: Cash and cash equivalents	(324,608	)	 	(282,914	)	
Net debt	1,148,466		 	1,188,388		
Stockholders’ equity	1,963,644		 	1,929,722		
Net capital	$	3,112,110		 	$	3,118,110		
Ratio of net debt-to-net capital (2)	36.9	%	 	38.1	%	
__________
		
(1)  	The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.	
		
(2)  	The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity.	

Page 13

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

	
								
 	Three Months Ended March 31,	
 	2018	 	2017	
 	(in thousands)	
Net income available to common stockholders	$	42,880		 	$	8,193		
Interest expense:	 	 	 	
Interest incurred	21,520		 	18,873		
Interest capitalized	(21,520	)	 	(18,873	)	
Amortization of interest in cost of sales	14,242		 	9,687		
Provision for income taxes	14,660		 	4,614		
Depreciation and amortization	5,488		 	822		
EBITDA	77,270		 	23,316		
Amortization of stock-based compensation	3,470		 	3,841		
Impairments and lot option abandonments	248		 	321		
Restructuring charges	—		 	203		
Adjusted EBITDA	$	80,988		 	$	27,681		

 

 

 

Page 14