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) February 22, 2017
_______________________________________________________________________________________
  
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))	

		
Item 2.02	Results of Operations and Financial Condition  	

On February 22, 2017 , TRI Pointe Group, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended December 31, 2016 and full year 2016.  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	Results of Operations	

(d)	Exhibits	
		
99.1	Press Release dated February 22, 2017	

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: February 22, 2017	By:	/s/ Michael D. Grubbs	
 	 	Michael D. Grubbs,
Chief Financial Officer and Treasurer	

INDEX OF EXHIBITS

	
			
Exhibit
No.	  	Description of Document	
 	 	 	
99.1	  	Press Release dated February 22, 2017	

Exhibit 99.1

TRI POINTE GROUP, INC. REPORTS 2016 FOURTH QUARTER AND FULL YEAR RESULTS
 
-New Home Orders up 21% for the Quarter-
-Reports Net Income Available to Common Stockholders of $ 57.9 Million, or $0.36 per Diluted Share-
-Home Sales Revenue of $770.7 Million for the Quarter-
-Homebuilding Gross Margin of 20.0% for the Quarter-

Irvine, California, February 22, 2017 /Business Wire/ – TRI Pointe Group, Inc. (the "Company") (NYSE: TPH) today announced results for the fourth quarter ended December 31, 2016 and full year 2016.
Results and Operational Data for Fourth Quarter 2016 and Comparisons to Fourth Quarter 2015
		
•	Net income available to common stockholders was $57.9 million , or $0.36 per diluted share, compared to $85.1 million , or $0.52 per diluted share	
		
•	New home orders of 909 compared to 753 , an increase of 21%	
		
•	Active selling communities averaged 122.8 compared to 112.8 , an increase of 9%	
		
◦	New home orders per average selling community increased by 10% to 7.4 orders (2.5 monthly) compared to 6.7 orders (2.2 monthly)	
		
◦	Cancellation rate of 20% compared to 21% , a decrease of 100 basis points	
		
•	Backlog units at quarter end of 1,193 homes compared to 1,156 , an increase of 3%	
		
◦	Dollar value of backlog at quarter end of $661.1 million compared to $697.3 million , a decrease of 5%	
		
◦	Average sales price in backlog at quarter end of $554,000 compared to $603,000, a decrease of 8%	
		
•	Home sales revenue of $770.7 million compared to $847.4 million , a decrease of 9%	
		
◦	New home deliveries of 1,427 homes compared to 1,453 homes, a decrease of 2%	
		
◦	Average sales price of homes delivered of $540,000 compared to $583,000, a decrease of 7%	
		
•	Homebuilding gross margin percentage of 20.0% compared to 22.2% , a decrease of 220 basis points	
		
◦	Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 22.2% *	
		
•	SG&A expense as a percentage of homes sales revenue of 9.2% compared to 8.4% , an increase of 80 basis points	
		
•	Ratios of debt-to-capital and net debt-to-capital of 43.0% and 39.1% *, respectively, as of December 31, 2016	
		
•	Repurchased 1,455,332 shares of common stock at an average price of $11.66 for an aggregate dollar amount of $17.0 million in the three months ended December 31, 2016	
		
•	Ended fourth quarter of 2016 with cash of $208.7 million and $420.7 million of availability under the Company's unsecured revolving credit facility	
 
*    See "Reconciliation of Non-GAAP Financial Measures"
Results and Operational Data for Full Year 2016 and Comparisons to Full Year 2015
		
•	Net income available to common stockholders was $195.2 million , or $1.21  per diluted share, compared to $205.5 million , or $1.27 per diluted share	
		
•	New home orders of 4,248 compared to 4,181 , an increase of 2%	
		
•	Active selling communities averaged 118.3 compared to 115.9 , an increase of 2%	
		
◦	New home orders per average selling community were 35.9 orders (3.0 monthly) compared to 36.1 orders (3.0 monthly)	

		
◦	Cancellation rate of 15% compared to 16% , a decrease of 100 basis points	
		
•	Home sales revenue of $2.329 billion compared to $2.291 billion , an increase of 2%	
		
◦	New home deliveries of 4,211 homes compared to 4,057 homes, an increase of 4%	
		
◦	Average sales price of homes delivered of $553,000 compared to $565,000, a decrease of 2%	
		
•	Homebuilding gross margin percentage of 21.2% compared to 21.1%, an increase of 10 basis points	
		
◦	Excluding interest, impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 23.4% *	
		
•	SG&A expense as a percentage of homes sales revenue of 10.8% compared to 10.2% , an increase of 60 basis points	
		
•	Repurchased 3,560,853 shares of common stock at an average price of $11.82 for an aggregate dollar amount of $42.1 million in the full year ended December 31, 2016	
 
*    See "Reconciliation of Non-GAAP Financial Measures"

“I am extremely pleased with how we ended 2016,” said TRI Pointe Group CEO Doug Bauer. “Fourth quarter net orders grew 21% as compared to the prior year period, thanks to a 10% increase in the monthly absorption rate and a 9% rise in average community count. Order trends remained strong in our core California markets during the quarter, while many of our markets outside of California experienced an increase in absorption rate. We believe that this is a testament to the relative strength of our markets and the quality of our communities and new home offerings. With a 19% increase in active selling communities at the start of 2017 as compared to the beginning of 2016, TRI Pointe Group is in a great position to achieve its goals for 2017 and beyond.”
Fourth Quarter 2016 Operating Results
Net income available to common stockholders was $57.9 million , or $0.36 per diluted share in the fourth quarter of 2016 , compared to net income available to common stockholders of $85.1 million , or $0.52 per diluted share for the fourth quarter of 2015.  The decrease in net income available to common stockholders was primarily driven by lower home sales revenue and a $33.9 million decrease in homebuilding gross margin, resulting in a 220 basis point decrease in homebuilding gross margin percentage.
Home sales revenue decreased $76.7 million , or 9% , to $770.7 million for the fourth quarter of 2016, as compared to $847.4 million for the fourth quarter of 2015.  The decrease was primarily attributable to a 2% decrease in new home deliveries to 1,427, and a 7% decrease in average selling price of homes delivered to $540,000 compared to $583,000 in the fourth quarter of 2015.
New home orders increased 21% to 909 homes for the fourth quarter of 2016 , as compared to 753 homes for the same period in 2015.  Average selling communities was 122.8 for the fourth quarter of 2016 compared to 112.8 for the fourth quarter of 2015. The Company’s overall absorption rate per average selling community for the fourth quarter of 2016 was 7.4 orders (2.5 monthly) compared to 6.7 orders (2.2 monthly) during the fourth quarter of 2015.  
The Company ended the quarter with 1,193 homes in backlog, representing approximately $661.1 million . The average selling price of homes in backlog as of December 31, 2016 decreased $49,000, or 8%, to $554,000 compared to $603,000 at December 31, 2015.  
Homebuilding gross margin percentage for the fourth quarter of 2016 decreased to 20.0% compared to 22.2% for the fourth quarter of 2015.  Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 22.2% * for the fourth quarter of 2016 compared to 24.2% * for the fourth quarter of 2015.  The decrease in homebuilding gross margin percentage was largely due to the mix of homes delivered during the quarter, with 58 fewer homes delivered from California which have gross margins above the Company average.
Selling, general and administrative ("SG&A") expense for the fourth quarter of 2016 increased to 9.2% of home sales revenue as compared to 8.4% for the fourth quarter of 2015 due to decreased leverage as a result of the 9% decrease in home sales revenue.  

“TRI Pointe Group continues to strive for operational excellence in our current business while investing in the future, most notably with the continued development of our longer-dated California assets,” said TRI Pointe Group COO Tom Mitchell. “These assets will provide us with a great runway of lots in land constrained California for years to come and will be a key contributor to our success moving forward. We are extremely optimistic about the potential of these assets, as well as the prospects for all of our brands as we head into 2017.”
* See “Reconciliation of Non-GAAP Financial Measures”
Outlook
For the full year 2017, the Company is reiterating it’s guidance from their investor day this past November. The Company expects to grow average selling communities by 10% compared to the prior year and deliver between 4,500 and 4,800 homes at an average sales price of $570,000. The Company expects its homebuilding gross margin for the full year 2017 to be in the range of 20% to 21%, with quarterly fluctuations based on the mix of California deliveries, and expects its SG&A expense ratio to be in the range of 10.2% to 10.4% of home sales revenue. In addition, the Company anticipates gross profit from land and lot sales of approximately $45 million, most of which is expected to close in the third quarter of 2017.
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, February 22, 2017 .  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer and Mike Gr ubbs, Chief Financial Officer.
Interested parties can listen to the call live 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 dom estic participants or 1-201-493-6780 for international participants. Participants should ask for the TRI Pointe Group Fourth Quarter 2016 E arnings 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 #13653357.  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 one of the top ten largest public homebuilders by equity market capitalization 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.

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 projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial res ults, financial condition, prospects, and capital spending.  Our forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “estimate,” “goal,” “guidance,” “expect,” “intend,” “outlook,” “project,” “potential,” “plan,” “predict,” “target,” “will,” 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 strengt h 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; transportation costs; federal and state tax policies; the effect of land use, environment and other governmental regulations; legal proceedings and disputes; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; 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; our relationship, and actual and potential conflicts of interest, with Starwood Capital Group or its affiliates; 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:	Media Contact:  	
 	 	
Chris Martin, TRI Pointe Group	Carol Ruiz, cruiz@newgroundco.com , 310-437-0045	
Drew Mackintosh, Mackintosh Investor Relations	 	
InvestorRelations@TRIPointeGroup.com , 949-478-8696	 	

 

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

																								
 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	Change	 	2016	 	2015	 	Change	
Operating Data:	 	 	 	 	 	 	 	 	 	 	 	
Home sales revenue	$	770,703		 	$	847,409		 	$	(76,706	)	 	$	2,329,336		 	$	2,291,264		 	$	38,072		
Homebuilding gross margin	$	153,936		 	$	187,824		 	$	(33,888	)	 	$	493,009		 	$	482,488		 	$	10,521		
Homebuilding gross margin %	20.0	%	 	22.2	%	 	(2.2	)%	 	21.2	%	 	21.1	%	 	0.1	 %	
Adjusted homebuilding gross margin %*	22.2	%	 	24.2	%	 	(2.0	)%	 	23.4	%	 	23.1	%	 	0.3	 %	
Land and lot sales revenue	$	2,068		 	$	26,918		 	$	(24,850	)	 	$	72,272		 	$	101,284		 	$	(29,012	)	
Land and lot gross margin	$	1,674		 	$	9,153		 	$	(7,479	)	 	$	54,905		 	$	66,195		 	$	(11,290	)	
Land and lot gross margin %	80.9	%	 	34.0	%	 	46.9	 %	 	76.0	%	 	65.4	%	 	10.6	 %	
SG&A expense	$	70,937		 	$	71,605		 	$	(668	)	 	$	251,373		 	$	233,713		 	$	17,660		
SG&A expense as a % of home sales revenue	9.2	%	 	8.4	%	 	0.8	 %	 	10.8	%	 	10.2	%	 	0.6	 %	
Net income available to common
   stockholders	$	57,861		 	$	85,072		 	$	(27,211	)	 	$	195,171		 	$	205,461		 	$	(10,290	)	
Adjusted EBITDA*	$	107,425		 	$	155,196		 	$	(47,771	)	 	$	370,371		 	$	388,121		 	$	(17,750	)	
Interest incurred	$	18,276		 	$	15,185		 	$	3,091		 	$	68,306		 	$	60,964		 	$	7,342		
Interest in cost of home sales	$	16,458		 	$	16,759		 	$	(301	)	 	$	51,111		 	$	44,299		 	$	6,812		
 	 	 	 	 	 	 	 	 	 	 	 	
Other Data:	 	 	 	 	 	 	 	 	 	 	 	
Net new home orders	909		 	753		 	156		 	4,248		 	4,181		 	67		
New homes delivered	1,427		 	1,453		 	(26	)	 	4,211		 	4,057		 	154		
Average selling price of homes delivered	$	540		 	$	583		 	$	(43	)	 	$	553		 	$	565		 	$	(12	)	
Average selling communities	122.8		 	112.8		 	10.0		 	118.3		 	115.9		 	2.4		
Selling communities at end of period	124		 	104		 	20		 	N/A		 	N/A		 	N/A		
Cancellation rate	20	%	 	21	%	 	(1	)%	 	15	%	 	16	%	 	(1	)%	
Backlog (estimated dollar value)	$	661,146		 	$	697,334		 	$	(36,188	)	 	 	 	 	 	 	
Backlog (homes)	1,193		 	1,156		 	37		 	 	 	 	 	 	
Average selling price in backlog	$	554		 	$	603		 	$	(49	)	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	December 31,
2016	 	December 31,
2015	 	Change	 	 	 	 	 	 	
Balance Sheet Data:	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	208,657		 	$	214,485		 	$	(5,828	)	 	 	 	 	 	 	
Real estate inventories	$	2,910,627		 	$	2,519,273		 	$	391,354		 	 	 	 	 	 	
Lots owned or controlled	28,309		 	27,602		 	707		 	 	 	 	 	 	
Homes under construction (1)	1,605		 	1,531		 	74		 	 	 	 	 	 	
Homes completed, unsold	405		 	351		 	54		 	 	 	 	 	 	
Debt	$	1,382,033		 	$	1,170,505		 	$	211,528		 	 	 	 	 	 	
Stockholders' equity	$	1,829,447		 	$	1,664,683		 	$	164,764		 	 	 	 	 	 	
Book capitalization	$	3,211,480		 	$	2,835,188		 	$	376,292		 	 	 	 	 	 	
Ratio of debt-to-capital	43.0	%	 	41.3	%	 	1.7	 %	 	 	 	 	 	 	
Ratio of net debt-to-capital*	39.1	%	 	36.5	%	 	2.6	 %	 	 	 	 	 	 	
_____________________________________
		
(1)  	Homes under construction included 65 and 69 models at December 31, 2016 and December 31, 2015 , respectively.	
		
*	See “Reconciliation of Non-GAAP Financial Measures”	

CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	
								
 	December 31,
2016	 	December 31,
2015	
Assets	(unaudited)	 	 	
Cash and cash equivalents	$	208,657		 	$	214,485		
Receivables	82,500		 	43,710		
Real estate inventories	2,910,627		 	2,519,273		
Investments in unconsolidated entities	17,546		 	18,999		
Goodwill and other intangible assets, net	161,495		 	162,029		
Deferred tax assets, net	123,223		 	130,657		
Other assets	60,592		 	48,918		
Total assets	$	3,564,640		 	$	3,138,071		
 	 	 	 	
Liabilities	 	 	 	
Accounts payable	$	70,252		 	$	64,840		
Accrued expenses and other liabilities	263,845		 	216,263		
Unsecured revolving credit facility	200,000		 	299,392		
Seller financed loans	13,726		 	2,434		
Senior notes	1,168,307		 	868,679		
Total liabilities	1,716,130		 	1,451,608		
 	 	 	 	
Commitments and contingencies	 	 	 	
 	 	 	 	
Equity	 	 	 	
Stockholders' Equity:	 	 	 	
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of December 31, 2016 and
December 31, 2015, respectively	—		 	—		
Common stock, $0.01 par value, 500,000,000 shares authorized;
   158,626,229 and 161,813,750 shares issued and outstanding at
   December 31, 2016 and December 31, 2015, respectively	1,586		 	1,618		
Additional paid-in capital	880,822		 	911,197		
Retained earnings	947,039		 	751,868		
Total stockholders' equity	1,829,447		 	1,664,683		
Noncontrolling interests	19,063		 	21,780		
Total equity	1,848,510		 	1,686,463		
Total liabilities and equity	$	3,564,640		 	$	3,138,071		

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

	
																
 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
Homebuilding:	 		 	 		 	 	 	 	
Home sales revenue	$	770,703		 	$	847,409		 	$	2,329,336		 	$	2,291,264		
Land and lot sales revenue	2,068		 	26,918		 	72,272		 	101,284		
Other operations revenue	524		 	5,388		 	2,314		 	7,601		
Total revenues	773,295		 	879,715		 	2,403,922		 	2,400,149		
Cost of home sales	616,767		 	659,585		 	1,836,327		 	1,808,776		
Cost of land and lot sales	394		 	17,765		 	17,367		 	35,089		
Other operations expense	523		 	2,656		 	2,247		 	4,360		
Sales and marketing	37,282		 	37,259		 	127,903		 	116,217		
General and administrative	33,655		 	34,346		 	123,470		 	117,496		
Restructuring charges	171		 	599		 	649		 	3,329		
Homebuilding income from operations	84,503		 	127,505		 	295,959		 	314,882		
Equity in (loss) income of unconsolidated entities	(2	)	 	1,542		 	179		 	1,460		
Other income, net	25		 	586		 	312		 	858		
Homebuilding income before income taxes	84,526		 	129,633		 	296,450		 	317,200		
Financial Services:	 	 	 	 	 	 	 	
Revenues	458		 	528		 	1,220		 	1,010		
Expenses	70		 	50		 	253		 	181		
Equity in income of unconsolidated entities	1,564		 	1,233		 	4,810		 	1,231		
Financial services income before income taxes	1,952		 	1,711		 	5,777		 	2,060		
Income before income taxes	86,478		 	131,344		 	302,227		 	319,260		
Provision for income taxes	(28,393	)	 	(45,991	)	 	(106,094	)	 	(112,079	)	
Net income	58,085		 	85,353		 	196,133		 	207,181		
Net income attributable to noncontrolling interests	(224	)	 	(281	)	 	(962	)	 	(1,720	)	
Net income available to common stockholders	$	57,861		 	$	85,072		 	$	195,171		 	$	205,461		
Earnings per share	 	 	 		 	 	 	 		
Basic	$	0.36		 	$	0.53		 	$	1.21		 	$	1.27		
Diluted	$	0.36		 	$	0.52		 	$	1.21		 	$	1.27		
Weighted average shares outstanding	 		 	 		 	 		 	 		
Basic	159,082,568		 	161,813,750		 	160,859,782		 	161,692,152		
Diluted	159,789,940		 	162,379,826		 	161,381,499		 	162,319,758		

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

	
																												
 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	
New Homes Delivered:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	225		 	$	417		 	173		 	$	399		 	625		 	$	408		 	480		 	$	387		
Pardee Homes	392		 	467		 	406		 	591		 	1,220		 	548		 	1,130		 	536		
Quadrant Homes	96		 	616		 	114		 	475		 	383		 	541		 	411		 	440		
Trendmaker Homes	139		 	506		 	145		 	511		 	474		 	506		 	539		 	511		
TRI Pointe Homes	411		 	658		 	449		 	696		 	1,089		 	664		 	1,060		 	730		
Winchester Homes	164		 	570		 	166		 	590		 	420		 	560		 	437		 	616		
Total	1,427		 	$	540		 	1,453		 	$	583		 	4,211		 	$	553		 	4,057		 	$	565		

 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	 	New
Homes
Delivered	 	Average
Sales
Price	
New Homes Delivered:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
California	596		 	$	601		 	654		 	$	717		 	1,689		 	$	669		 	1,623		 	$	707		
Colorado	42		 	579		 	65		 	512		 	160		 	524		 	193		 	496		
Maryland	96		 	544		 	89		 	467		 	265		 	518		 	209		 	502		
Virginia	68		 	608		 	77		 	732		 	155		 	631		 	228		 	720		
Arizona	225		 	417		 	173		 	399		 	625		 	408		 	480		 	387		
Nevada	165		 	433		 	136		 	368		 	460		 	386		 	374		 	368		
Texas	139		 	506		 	145		 	511		 	474		 	506		 	539		 	511		
Washington	96		 	616		 	114		 	475		 	383		 	541		 	411		 	440		
Total	1,427		 	$	540		 	1,453		 	$	583		 	4,211		 	$	553		 	4,057		 	$	565		

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

	
																								
 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	
Net New Home Orders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	144		 	18.0		 	83		 	15.0		 	670		 	18.0		 	578		 	16.6		
Pardee Homes	270		 	26.0		 	232		 	24.0		 	1,206		 	23.6		 	1,186		 	23.1		
Quadrant Homes	67		 	6.5		 	88		 	10.5		 	341		 	8.0		 	441		 	10.7		
Trendmaker Homes	116		 	30.8		 	76		 	22.3		 	501		 	27.8		 	457		 	25.1		
TRI Pointe Homes	214		 	28.5		 	172		 	27.5		 	1,097		 	27.6		 	1,107		 	26.9		
Winchester Homes	98		 	13.0		 	102		 	13.5		 	433		 	13.3		 	412		 	13.5		
Total	909		 	122.8		 	753		 	112.8		 	4,248		 	118.3		 	4,181		 	115.9		

 	Three Months Ended December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	 	Net New
Home
Orders	 	Average
Selling
Communities	
Net New Home Orders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
California	357		 	38.8		 	285		 	34.9		 	1,690		 	35.4		 	1,706		 	33.5		
Colorado	28		 	4.5		 	25		 	5.8		 	135		 	4.8		 	193		 	6.2		
Maryland	76		 	8.0		 	68		 	6.5		 	290		 	7.0		 	233		 	6.0		
Virginia	22		 	5.0		 	34		 	7.0		 	143		 	6.3		 	179		 	7.5		
Arizona	144		 	18.0		 	83		 	15.0		 	670		 	18.0		 	578		 	16.6		
Nevada	99		 	11.2		 	94		 	10.8		 	478		 	11.0		 	394		 	10.3		
Texas	116		 	30.8		 	76		 	22.3		 	501		 	27.8		 	457		 	25.1		
Washington	67		 	6.5		 	88		 	10.5		 	341		 	8.0		 	441		 	10.7		
Total	909		 	122.8		 	753		 	112.8		 	4,248		 	118.3		 	4,181		 	115.9		

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

	
																						
 	As of December 31, 2016	 	As of December 31, 2015	
 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	
Backlog:	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	248		 	$	114,203		 	$	460		 	203		 	$	82,171		 	$	405		
Pardee Homes	260		 	134,128		 	516		 	274		 	200,588		 	732		
Quadrant Homes	101		 	68,461		 	678		 	143		 	72,249		 	505		
Trendmaker Homes	163		 	85,579		 	525		 	136		 	72,604		 	534		
TRI Pointe Homes	298		 	180,012		 	604		 	290		 	192,097		 	662		
Winchester Homes	123		 	78,763		 	640		 	110		 	77,625		 	706		
Total	1,193		 	$	661,146		 	$	554		 	1,156		 	$	697,334		 	$	603		

 	As of December 31, 2016	 	As of December 31, 2015	
 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	 	Backlog
Units	 	Backlog
Dollar
Value	 	Average
Sales
Price	
Backlog:	 	 	 	 	 	 	 	 	 	 	 	
California	402		 	$	237,748		 	$	591		 	401		 	$	321,753		 	$	802		
Colorado	59		 	35,764		 	606		 	84		 	41,026		 	488		
Maryland	102		 	60,904		 	597		 	77		 	49,760		 	646		
Virginia	21		 	17,859		 	850		 	33		 	27,865		 	844		
Arizona	248		 	114,203		 	460		 	203		 	82,171		 	405		
Nevada	97		 	40,628		 	419		 	79		 	29,906		 	379		
Texas	163		 	85,579		 	525		 	136		 	72,604		 	534		
Washington	101		 	68,461		 	678		 	143		 	72,249		 	505		
Total	1,193		 	$	661,146		 	$	554		 	1,156		 	$	697,334		 	$	603		

 

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

	
						
 	December 31,
2016	 	December 31,
2015	
Lots Owned or Controlled (1) :	 	 	 	
Maracay Homes	2,053		 	1,811		
Pardee Homes	16,912		 	16,679		
Quadrant Homes	1,582		 	1,274		
Trendmaker Homes	1,999		 	1,858		
TRI Pointe Homes	3,479		 	3,628		
Winchester Homes	2,284		 	2,352		
Total	28,309		 	27,602		

 	December 31,
2016	 	December 31,
2015	
Lots Owned or Controlled (1) :	 	 	 	
California	17,245		 	17,527		
Colorado	918		 	876		
Maryland	1,779		 	1,716		
Virginia	505		 	636		
Arizona	2,053		 	1,811		
Nevada	2,228		 	1,904		
Texas	1,999		 	1,858		
Washington	1,582		 	1,274		
Total	28,309		 	27,602		

 	December 31,
2016	 	December 31,
2015	
Lots by Ownership Type:	 	 	 	
Lots owned	25,283		 	24,733		
Lots controlled (1)	3,026		 	2,869		
Total	28,309		 	27,602		
__________
		
(1)  	As of December 31, 2016 and December 31, 2015 , lots controlled included lots that were under land option contracts or purchase contracts.	

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

	
														
 	Three Months Ended December 31,	
 	2016	 	%	 	2015	 	%	
 	(dollars in thousands)	
Home sales revenue	$	770,703		 	100.0	%	 	$	847,409		 	100.0	%	
Cost of home sales	616,767		 	80.0	%	 	659,585		 	77.8	%	
Homebuilding gross margin	153,936		 	20.0	%	 	187,824		 	22.2	%	
Add:  interest in cost of home sales	16,458		 	2.1	%	 	16,759		 	2.0	%	
Add:  impairments and lot option abandonments	792		 	0.1	%	 	92		 	0.0	%	
Adjusted homebuilding gross margin	$	171,186		 	22.2	%	 	$	204,675		 	24.2	%	
Homebuilding gross margin percentage	20.0	%	 	 	 	22.2	%	 	 	
Adjusted homebuilding gross margin percentage	22.2	%	 	 	 	24.2	%	 	 	

	
														
 	Year Ended December 31,	
 	2016	 	%	 	2015	 	%	
 	(dollars in thousands)	
Home sales revenue	$	2,329,336		 	100.0	%	 	$	2,291,264		 	100.0	%	
Cost of home sales	1,836,327		 	78.8	%	 	1,808,776		 	78.9	%	
Homebuilding gross margin	493,009		 	21.2	%	 	482,488		 	21.1	%	
Add:  interest in cost of home sales	51,111		 	2.2	%	 	44,299		 	1.9	%	
Add:  impairments and lot option abandonments	1,470		 	0.1	%	 	1,685		 	0.1	%	
Adjusted homebuilding gross margin	$	545,590		 	23.4	%	 	$	528,472		 	23.1	%	
Homebuilding gross margin percentage	21.2	%	 	 	 	21.1	%	 	 	
Adjusted homebuilding gross margin percentage	23.4	%	 	 	 	23.1	%	 	 	

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-capital. We believe that the ratio of net debt-to-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.

	
								
 	December 31, 2016	 	December 31, 2015	
Unsecured revolving credit facility	$	200,000		 	$	299,392		
Seller financed loans	13,726		 	2,434		
Senior notes	1,168,307		 	868,679		
Total debt	1,382,033		 	1,170,505		
Stockholders’ equity	1,829,447		 	1,664,683		
Total capital	$	3,211,480		 	$	2,835,188		
Ratio of debt-to-capital (1)	43.0	%	 	41.3	%	
 	 	 	 	
Total debt	$	1,382,033		 	$	1,170,505		
Less: Cash and cash equivalents	(208,657	)	 	(214,485	)	
Net debt	1,173,376		 	956,020		
Stockholders’ equity	1,829,447		 	1,664,683		
Total capital	$	3,002,823		 	$	2,620,703		
Ratio of net debt-to-capital (2)	39.1	%	 	36.5	%	
__________
		
(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-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.	

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
 
The following table calculates the non-GAAP 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) income taxes, (c) depreciation and amortization, (d) expensing of previously capitalized interest included in costs of home sales and (e) amortization of stock-based compensation. Adjusted EBITDA means EBITDA before (f) impairment and lot option abandonments and (g) 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 December 31,	 	Year Ended December 31,	
 	2016	 	2015	 	2016	 	2015	
 	(in thousands)	
Net income available to common stockholders	$	57,861		 	$	85,072		 	$	195,171		 	$	205,461		
Interest expense:	 	 	 	 	 	 	 	
Interest incurred	18,276		 	15,185		 	68,306		 	60,964		
Interest capitalized	(18,276	)	 	(15,185	)	 	(68,306	)	 	(60,964	)	
Amortization of interest in cost of sales	16,480		 	17,095		 	51,288		 	45,114		
Provision for income taxes	28,393		 	45,991		 	106,094		 	112,079		
Depreciation and amortization	764		 	2,859		 	3,087		 	8,273		
Amortization of stock-based compensation	2,964		 	3,399		 	12,612		 	11,935		
EBITDA	106,462		 	154,416		 	368,252		 	382,862		
Impairments and lot abandonments	792		 	181		 	1,470		 	1,930		
Restructuring charges	171		 	599		 	649		 	3,329		
Adjusted EBITDA	$	107,425		 	$	155,196		 	$	370,371		 	$	388,121