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 March 31,September 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission File Number 1-35796
_____________________________________________________________________________________________ 


logoa07.jpg
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, California92612
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (949) (949438-1400
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
____________________________________________________________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareTPHNew York Stock Exchange

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.    Yesx    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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 filerxAccelerated filer
Non-accelerated filer
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  x
142,210,147139,237,697 shares of the registrant's common stock were issued and outstanding as of April 12,October 14, 2019.

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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 consolidated subsidiaries.





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TRI POINTE GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
March 31,September 30, 2019
 
  
Page
Number
   
Item 1.
   
 
   
 
   
 
   
 
   
Item 2.
   
Item 3.
   
Item 4.
 
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 6.
   



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PART I. FINANCIAL INFORMATION


Item 1.Financial Statements


TRI POINTE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
March 31, 2019 December 31, 2018September 30, 2019 December 31, 2018
(unaudited)  (unaudited)  
Assets      
Cash and cash equivalents$148,782
 $277,696
$130,262
 $277,696
Receivables58,234
 51,592
70,507
 51,592
Real estate inventories3,242,678
 3,216,059
3,345,390
 3,216,059
Investments in unconsolidated entities4,191
 5,410
4,207
 5,410
Goodwill and other intangible assets, net160,293
 160,427
160,026
 160,427
Deferred tax assets, net67,761
 67,768
57,275
 67,768
Other assets173,956
 105,251
173,804
 105,251
Total assets$3,855,895
 $3,884,203
$3,941,471
 $3,884,203
Liabilities      
Accounts payable$66,605
 $81,313
$81,279
 $81,313
Accrued expenses and other liabilities319,791
 335,149
315,436
 335,149
Loans payable400,000
 
Senior notes, net1,412,463
 1,410,804
1,033,058
 1,410,804
Total liabilities1,798,859
 1,827,266
1,829,773
 1,827,266
      
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 March 31, 2019 and
December 31, 2018, respectively

 
Common stock, $0.01 par value, 500,000,000 shares authorized;
142,210,147 and 141,661,713 shares issued and outstanding at
March 31, 2019 and December 31, 2018, respectively
1,422
 1,417
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of September 30, 2019 and
December 31, 2018, respectively

 
Common stock, $0.01 par value, 500,000,000 shares authorized;
139,237,697 and 141,661,713 shares issued and outstanding at
September 30, 2019 and December 31, 2018, respectively
1,392
 1,417
Additional paid-in capital658,743
 658,720
624,312
 658,720
Retained earnings1,396,858
 1,396,787
1,485,981
 1,396,787
Total stockholders’ equity2,057,023
 2,056,924
2,111,685
 2,056,924
Noncontrolling interests13
 13
13
 13
Total equity2,057,036
 2,056,937
2,111,698
 2,056,937
Total liabilities and equity$3,855,895
 $3,884,203
$3,941,471
 $3,884,203
 
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 March 31,Three Months Ended September 30, Nine Months Ended September 30,
2019 20182019 2018 2019 2018
Homebuilding:          
Home sales revenue$492,703
 $582,572
$746,269
 $771,768
 $1,931,110
 $2,123,135
Land and lot sales revenue1,029
 223
607
 2,225
 6,819
 3,966
Other operations revenue598
 598
618
 598
 1,853
 1,795
Total revenues494,330
 583,393
747,494
 774,591
 1,939,782
 2,128,896
Cost of home sales421,536
 450,502
577,627
 607,053
 1,573,847
 1,661,651
Cost of land and lot sales1,495
 503
495
 2,234
 7,552
 4,163
Other operations expense590
 602
609
 590
 1,826
 1,781
Sales and marketing38,989
 38,283
47,834
 44,854
 133,888
 128,881
General and administrative38,597
 36,814
38,751
 38,109
 114,202
 111,406
Homebuilding (loss) income from operations(6,877) 56,689
Equity in loss of unconsolidated entities(25) (468)
Other income, net6,241
 171
Homebuilding (loss) income before income taxes(661) 56,392
Homebuilding income from operations82,178
 81,751
 108,467
 221,014
Equity in income (loss) of unconsolidated entities18
 15
 (33) (384)
Other income (expense), net325
 (477) 6,719
 (379)
Homebuilding income before income taxes82,521
 81,289
 115,153
 220,251
Financial Services:          
Revenues302
 283
901
 480
 1,959
 1,154
Expenses321
 137
817
 125
 1,765
 391
Equity in income of unconsolidated entities775
 1,002
2,114
 1,986
 4,861
 4,972
Financial services income before income taxes756
 1,148
2,198
 2,341
 5,055
 5,735
Income before income taxes95
 57,540
84,719
 83,630
 120,208
 225,986
Provision for income taxes(24) (14,660)(21,858) (19,661) (31,014) (55,457)
Net income$71
 $42,880
$62,861
 $63,969
 $89,194
 $170,529
Earnings per share 
  
 
  
    
Basic$0.00
 $0.28
$0.45
 $0.43
 $0.63
 $1.13
Diluted$0.00
 $0.28
$0.44
 $0.43
 $0.63
 $1.13
Weighted average shares outstanding          
Basic141,865,270
 151,464,547
141,088,381
 147,725,074
 141,729,759
 150,377,472
Diluted142,390,163
 152,775,851
141,533,546
 148,318,032
 142,128,786
 151,482,456
 
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
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Total
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
Balance at June 30, 2019142,258,663
 $1,423
 $662,087
 $1,423,120
 $2,086,630
 $13
 $2,086,643
Net income
 
 
 62,861
 62,861
 
 62,861
Shares issued under share-based awards14,454
 
 101
 
 101
 
 101
Minimum tax withholding paid on behalf of employees for restricted stock units
 
 
 
 
 
 
Stock-based compensation expense
 
 3,828
 
 3,828
 
 3,828
Share repurchases(3,035,420) (31) (41,704) 
 (41,735) 
 (41,735)
Balance at September 30, 2019139,237,697
 $1,392
 $624,312
 $1,485,981
 $2,111,685
 $13
 $2,111,698
             
Number of
Shares of Common
Stock
 
Common
Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Total
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
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, 2018141,661,713
 $1,417
 $658,720
 $1,396,787
 $2,056,924
 $13
 $2,056,937
141,661,713
 $1,417
 $658,720
 $1,396,787
 $2,056,924
 $13
 $2,056,937
Net income
 
 
 71
 71
 
 71

 
 
 89,194
 89,194
 
 89,194
Shares issued under share-based awards548,434
 5
 193
 
 198
 
 198
611,404
 6
 294
 
 300
 
 300
Minimum tax withholding paid on behalf of employees for restricted stock units
 
 (3,605) 
 (3,605) 
 (3,605)
 
 (3,612) 
 (3,612) 
 (3,612)
Stock-based compensation expense
 
 3,435
 
 3,435
 
 3,435

 
 10,614
 
 10,614
 
 10,614
Balance at March 31, 2019142,210,147
 $1,422
 $658,743
 $1,396,858
 $2,057,023
 $13
 $2,057,036
Share repurchases(3,035,420) (31) (41,704) 
 (41,735) 
 (41,735)
Balance at September 30, 2019139,237,697
 $1,392
 $624,312
 $1,485,981
 $2,111,685
 $13
 $2,111,698
             
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 June 30, 2018152,027,014
 $1,520
 $796,746
 $1,233,436
 $2,031,702
 $604
 $2,032,306
Net income
 
 
 63,969
 63,969
 
 63,969
Shares issued under share-based awards27,308
 1
 309
 
 310
 
 310
Stock-based compensation expense
 
 3,765
 
 3,765
 
 3,765
Share repurchases(9,852,009) (99) (139,250) 
 (139,349) 
 (139,349)
Balance at September 30, 2018142,202,313
 $1,422
 $661,570
 $1,297,405
 $1,960,397
 $604
 $1,961,001
             
             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, 2017151,162,999
 $1,512
 $793,980
 $1,134,230
 $1,929,722
 $605
 $1,930,327
151,162,999
 $1,512
 $793,980
 $1,134,230
 $1,929,722
 $605
 $1,930,327
Cumulative effect of accounting change

 
 
 (7,354) (7,354) 
 (7,354)
 
 
 (7,354) (7,354) 
 (7,354)
Net income
 
 
 42,880
 42,880
 
 42,880

 
 
 170,529
 170,529
 
 170,529
Shares issued under share-based awards759,460
 7
 968
 
 975
 
 975
891,323
 9
 1,934
 
 1,943
 
 1,943
Minimum tax withholding paid on behalf of employees for restricted stock units
 
 (6,049) 
 (6,049) 
 (6,049)
 
 (6,049) 
 (6,049) 
 (6,049)
Stock-based compensation expense
 
 3,470
 
 3,470
 
 3,470
  
 10,955
   10,955
   10,955
Share repurchases(9,852,009) (99) (139,250) 
 (139,349) 
 (139,349)
Distributions to noncontrolling interests, net
 
 
 
 
 (1) (1)
 
 
 
 
 (1) (1)
Balance at March 31, 2018151,922,459
 $1,519
 $792,369
 $1,169,756
 $1,963,644
 $604
 $1,964,248
Balance at September 30, 2018142,202,313
 $1,422
 $661,570
 $1,297,405
 $1,960,397
 $604
 $1,961,001


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)
 
Three Months Ended March 31,Nine Months Ended September 30,
2019 20182019 2018
Cash flows from operating activities:      
Net income$71
 $42,880
$89,194
 $170,529
Adjustments to reconcile net income to net cash (used in) provided by operating activities:      
Depreciation and amortization5,085
 5,488
18,357
 19,581
Equity in income of unconsolidated entities, net(750) (534)(4,828) (4,588)
Deferred income taxes, net7
 5,024
10,493
 19,729
Amortization of stock-based compensation3,435
 3,470
10,614
 10,955
Charges for impairments and lot option abandonments5,202
 248
6,519
 1,500
Changes in assets and liabilities:      
Real estate inventories(29,695) (87,107)(142,599) (315,825)
Receivables(6,642) 70,351
(18,915) 40,612
Other assets(5,476) 2,308
(9,086) (14,486)
Accounts payable(14,708) 3,379
(34) 10,841
Accrued expenses and other liabilities(73,446) 2,165
(60,239) (17,716)
Returns on investments in unconsolidated entities, net1,992
 2,214
6,215
 6,778
Net cash (used in) provided by operating activities(114,925) 49,886
Net cash used in operating activities(94,309) (72,090)
Cash flows from investing activities:      
Purchases of property and equipment(7,224) (2,170)(22,392) (24,547)
Proceeds from sale of property and equipment7
 
46
 8
Investments in unconsolidated entities(231) (947)(712) (1,812)
Net cash used in investing activities(7,448) (3,117)(23,058) (26,351)
Cash flows from financing activities:      
Borrowings from debt400,000
 100,000
Repayment of debt(10) 
(381,895) (57,931)
Debt issuance costs(3,124) 
(3,125) 
Distributions to noncontrolling interests
 (1)
 (1)
Proceeds from issuance of common stock under share-based awards198
 975
300
 1,943
Minimum tax withholding paid on behalf of employees for share-based awards(3,605) (6,049)(3,612) (6,049)
Share repurchases(41,735) (139,349)
Net cash used in financing activities(6,541) (5,075)(30,067) (101,387)
Net (decrease) increase in cash and cash equivalents(128,914) 41,694
Net decrease in cash and cash equivalents(147,434) (199,828)
Cash and cash equivalents–beginning of period277,696
 282,914
277,696
 282,914
Cash and cash equivalents–end of period$148,782
 $324,608
$130,262
 $83,086
 
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 is engaged in the design, construction and sale of innovative single-family attached and detached homes through its portfolio of six6 quality brands across ten9 states, including Maracay in Arizona, Pardee Homes in California and Nevada, Quadrant Homes in Washington, Trendmaker Homes in Texas, TRI Pointe Homes in California, Colorado and the CarolinasNorth Carolina 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, 2018. 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 and nine months ended March 31,September 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 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 March 31,September 30, 2019 and December 31, 2018 represent the outside owners’ interests in the Company’s consolidated entities.  All significant intercompany accounts have been eliminated upon consolidation.
Use of Estimates
Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from our estimates.
Revenue Recognition
We recognize revenue in accordance with Accounting Standards Update 2014-09, Topic 606 (“ASC 606”), Revenue from Contracts with Customers(Codified as “ASC 606”). Under ASC 606, we apply the following steps to determine the timing and amount of revenue to recognize: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.
Home sales revenue
We generate the majority of our total revenues from home sales, which consists of our core business operation of building and delivering completed homes to homebuyers. Home sales revenue and related profit is generally recognized when title to and possession of the home is transferred to the homebuyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied in less than one year from the original contract date. Included in home sales revenue are forfeited deposits, which occur when homebuyers cancel home purchase contracts that include a nonrefundable deposit. Both revenue from forfeited deposits and deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers are immaterial.
Land and lot sales revenue
Historically, we have generated land and lot sales revenue from a small number of transactions, although in some years we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to

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be material, but we still consider these sales to be an ordinary part of our business, thus meeting the definition of contracts with customers. Similar to our home sales, revenue from land and lot sales is typically fully recognized when the land and lot sales transactions are consummated, at which time no further performance obligations are left to be satisfied. Some of our historical land and lot sales have included future profit participation rights. We will recognize future land and lot sales revenue in the periods in which all closing conditions are met, subject to the constraint on variable consideration related to profit participation rights, if such rights exist in the sales contract.
Other operations revenue
The majority of our homebuilding other homebuilding operations revenue relates to a ground lease at our Quadrant Homes reporting segment. We are responsible for making lease payments to the land owner, and we collect sublease payments from the buyers of the buildings. This ground lease is accounted for in accordance with ASC Topic 842, Leases. We do not recognize a material profit on this ground lease.
Financial services revenues
TRI Pointe Solutions is a reportable segment and is comprised of our TRI Pointe Connect mortgage financing operations, TRI Pointe Assurance title and escrow services operations, and TRI Pointe Advantage property and casualty insurance agency operations.
Mortgage financing operations
TRI Pointe Connect was formed as a joint venture with an established mortgage lender and is accounted for under the equity method of accounting.  We record a percentage of income earned by TRI Pointe Connect based on our ownership percentage in this joint venture. TRI Pointe Connect activity appears as equity in income of unconsolidated entities under the Financial Services section of our consolidated statements of operations.
Title and escrow services operations
TRI Pointe Assurance provides title examinations for our homebuyers in Austin, Colorado and Maryland and both title examinations and escrow services for our homebuyers in Arizona, Nevada, Texas Maryland and Virginia.  TRI Pointe Assurance is a wholly owned subsidiary of TRI Pointe and acts as a title agency for First American Title Insurance Company. AtRevenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales transactions, we recognize a percentage of revenue captured by First American Title Insurance Company.transaction, at which time no further performance obligations are left to be satisfied. TRI Pointe Assurance revenue is included in the Financial Services section of our consolidated statements of operations.
Property and casualty insurance agency operations
TRI Pointe Advantage is a wholly owned subsidiary of TRI Pointe and provides property and casualty insurance agency services that help facilitate the closing process in all of the markets in which we operate. The total consideration for these services, including renewal options, is estimated upon the issuance of the initial insurance policy, subject to constraint. TRI Pointe Advantage revenue is included in the Financial Services section of our consolidated statements of operations.
Recently Issued Accounting Standards Not Yet Adopted
In January 2017, the FASB issued Accounting Standards Update No. 2017-04, IntangiblesGoodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”), 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 the adoption of ASU 2017-04 to have a material impact on our financial statements.
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. We are still evaluating the impact ASU 2016-13 will have on our consolidated financial statements.


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Adoption of New Accounting Standards
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Codified as “ASC 842”), which requires an entity to recognize a lease right-of-use asset and lease liability on the balance sheet for the rights and obligations created by leases with durations of greater than 12 months. Right-of-use lease assets represent our right to use the underlying asset for the lease term and the lease obligation represents our commitment to make the lease payments arising from the lease. The guidance also requires more disclosures about leases in the notes to financial statements. We adopted ASC 842 on January 1, 2019, using a modified retrospective approach resulting in the recognition of a cumulative effect adjustment to the opening balance sheet of $57.4 million, which included a lease right-of-use asset offset by a lease liability on our consolidated balance sheet. No prior period adjustment was recorded. Additionally, we have elected the transition package of three practical expedients permitted under ASC 842, which among other things, allows us to retain the current operating classification for all of our existing leases prior the effective adoption date.to January 1, 2019. For further details on the adoption of ASC 842, see Note 13, Commitments and Contingencies.




2.Segment Information
We operate two2 principal businesses: homebuilding and financial services.
Our homebuilding operations consist of six6 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 these factors, our homebuilding operations are comprised of the following six6 reportable segments: Maracay, 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, Colorado and the Carolinas;North Carolina; and Winchester Homes, consisting of operations in Maryland and Virginia.
Our TRI Pointe Solutions financial services operation is a reportable segment and is comprised of our TRI Pointe Connect mortgage financing operations, our TRI Pointe Assurance title and escrow services operations, and our TRI Pointe Advantage property and casualty insurance agency operations. For further details, seeNote 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.
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, Basis of Presentation and Summary of Significant Accounting Policies. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.



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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 March 31,Three Months Ended September 30, Nine Months Ended September 30,
2019 20182019 2018 2019 2018
Revenues          
Maracay$39,561
 $58,455
$70,860
 $66,730
 $166,074
 $182,134
Pardee Homes134,863
 180,470
321,922
 224,452
 651,484
 648,208
Quadrant Homes43,871
 61,903
49,875
 66,174
 164,812
 193,481
Trendmaker Homes70,821
 41,408
103,428
 78,606
 296,212
 197,730
TRI Pointe Homes171,791
 190,420
154,737
 264,499
 519,280
 710,561
Winchester Homes33,423
 50,737
46,672
 74,130
 141,920
 196,782
Total homebuilding revenues494,330
 583,393
747,494
 774,591
 1,939,782
 2,128,896
Financial services302
 283
901
 480
 1,959
 1,154
Total$494,632
 $583,676
$748,395
 $775,071
 $1,941,741
 $2,130,050
          
Income (loss) before income taxes          
Maracay$1,190
 $4,391
$6,179
 $6,260
 $10,355
 $15,665
Pardee Homes(791) 39,191
73,790
 36,087
 87,734
 122,195
Quadrant Homes(2,639) 8,140
1,600
 9,269
 4,154
 25,206
Trendmaker Homes(1,598) 370
5,578
 7,379
 10,888
 13,977
TRI Pointe Homes10,209
 14,531
7,245
 30,945
 29,734
 69,651
Winchester Homes(766) 1,607
(71) 4,122
 1,718
 9,908
Corporate(6,266) (11,838)(11,800) (12,773) (29,430) (36,351)
Total homebuilding (loss) income before income taxes(661) 56,392
Total homebuilding income before income taxes82,521
 81,289
 115,153
 220,251
Financial services756
 1,148
2,198
 2,341
 5,055
 5,735
Total$95
 $57,540
$84,719
 $83,630
 $120,208
 $225,986
 

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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, 2019 December 31, 2018
Real estate inventories   
Maracay$346,337
 $293,217
Pardee Homes1,343,809
 1,286,877
Quadrant Homes293,220
 279,486
Trendmaker Homes274,130
 271,061
TRI Pointe Homes803,339
 812,799
Winchester Homes284,555
 272,619
Total$3,345,390
 $3,216,059
    
Total assets   
Maracay$379,817
 $318,703
Pardee Homes1,451,879
 1,391,503
Quadrant Homes350,305
 313,947
Trendmaker Homes320,998
 325,943
TRI Pointe Homes995,806
 987,610
Winchester Homes317,583
 298,602
Corporate101,365
 228,010
Total homebuilding assets3,917,753
 3,864,318
Financial services23,718
 19,885
Total$3,941,471
 $3,884,203

 March 31, 2019 December 31, 2018
Real estate inventories   
Maracay$320,459
 $293,217
Pardee Homes1,300,853
 1,286,877
Quadrant Homes273,621
 279,486
Trendmaker Homes284,734
 271,061
TRI Pointe Homes780,568
 812,799
Winchester Homes282,443
 272,619
Total$3,242,678
 $3,216,059
    
Total assets   
Maracay$352,968
 $318,703
Pardee Homes1,404,466
 1,391,503
Quadrant Homes346,697
 313,947
Trendmaker Homes315,713
 325,943
TRI Pointe Homes966,252
 987,610
Winchester Homes312,636
 298,602
Corporate136,689
 228,010
Total homebuilding assets3,835,421
 3,864,318
Financial services20,474
 19,885
Total$3,855,895
 $3,884,203




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,
 2019 2018 2019 2018
Numerator: 
  
  
  
Net income$62,861
 $63,969
 $89,194
 $170,529
Denominator: 
  
  
  
Basic weighted-average shares outstanding141,088,381
 147,725,074
 141,729,759
 150,377,472
Effect of dilutive shares: 
    
  
Stock options and unvested restricted stock units445,165
 592,958
 399,027
 1,104,984
Diluted weighted-average shares outstanding141,533,546
 148,318,032
 142,128,786
 151,482,456
Earnings per share 
  
  
  
Basic$0.45
 $0.43
 $0.63
 $1.13
Diluted$0.44
 $0.43
 $0.63
 $1.13
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share2,459,868
 2,008,612
 2,916,252
 1,280,500
 Three Months Ended March 31,
 2019 2018
Numerator: 
  
Net income$71
 $42,880
Denominator: 
  
Basic weighted-average shares outstanding141,865,270
 151,464,547
Effect of dilutive shares: 
  
Stock options and unvested restricted stock units524,893
 1,311,304
Diluted weighted-average shares outstanding142,390,163
 152,775,851
Earnings per share 
  
Basic$0.00
 $0.28
Diluted$0.00
 $0.28
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share2,864,509
 1,248,483

  

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4.Receivables
Receivables consisted of the following (in thousands):
 September 30, 2019 December 31, 2018
Escrow proceeds and other accounts receivable, net$33,106
 $13,995
Warranty insurance receivable (Note 13)37,401
 37,597
Total receivables$70,507
 $51,592

 March 31, 2019 December 31, 2018
Escrow proceeds and other accounts receivable, net$20,715
 $13,995
Warranty insurance receivable (Note 13)37,519
 37,597
Total receivables$58,234
 $51,592


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 $456,000$451,000 and $667,000 as of March 31,September 30, 2019 and December 31, 2018, respectively.
 


5.Real Estate Inventories
Real estate inventories consisted of the following (in thousands):
 September 30, 2019 December 31, 2018
Real estate inventories owned:   
Homes completed or under construction$1,217,154
 $959,911
Land under development1,654,172
 1,743,537
Land held for future development129,880
 201,874
Model homes273,173
 238,828
Total real estate inventories owned3,274,379
 3,144,150
Real estate inventories not owned:   
Land purchase and land option deposits71,011
 71,909
Total real estate inventories not owned71,011
 71,909
Total real estate inventories$3,345,390
 $3,216,059
 March 31, 2019 December 31, 2018
Real estate inventories owned:   
Homes completed or under construction$1,037,271
 $959,911
Land under development1,668,075
 1,743,537
Land held for future development203,476
 201,874
Model homes258,545
 238,828
Total real estate inventories owned3,167,367
 3,144,150
Real estate inventories not owned:   
Land purchase and land option deposits75,311
 71,909
Total real estate inventories not owned75,311
 71,909
Total real estate inventories$3,242,678
 $3,216,059

 
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. The decrease in land held under development as of September 30, 2019 compared to December 31, 2018 is attributable to 2 communities in which we commenced development activity during the three months ended September 30, 2019.
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.
Interest incurred, capitalized and expensed were as follows (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Interest incurred$22,405
 $23,942
 $67,740
 $67,089
Interest capitalized(22,405) (23,942) (67,740) (67,089)
Interest expensed$
 $
 $
 $
Capitalized interest in beginning inventory$197,295
 $185,589
 $184,400
 $176,348
Interest capitalized as a cost of inventory22,405
 23,942
 67,740
 67,089
Interest previously capitalized as a cost of
inventory, included in cost of sales
(19,234) (20,293) (51,674) (54,199)
Capitalized interest in ending inventory$200,466
 $189,238
 $200,466
 $189,238

 Three Months Ended March 31,
 2019 2018
Interest incurred$23,373
 $21,520
Interest capitalized(23,373) (21,520)
Interest expensed$
 $
Capitalized interest in beginning inventory$184,400
 $176,348
Interest capitalized as a cost of inventory23,373
 21,520
Interest previously capitalized as a cost of
inventory, included in cost of sales
(14,333) (14,242)
Capitalized interest in ending inventory$193,440
 $183,626


 

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Interest is capitalized to real estate inventory during development and other qualifying activities. During all periods presented, we capitalized all interest incurred to real estate inventory in accordance with ASC Topic 835, Interest, as our qualified assets exceeded our debt. 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 (expense) 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,
 2019 2018 2019 2018
Real estate inventory impairments$
 $
 $
 $
Land and lot option abandonments and pre-acquisition charges1,029
 643
 6,519
 1,500
Total$1,029
 $643
 $6,519
 $1,500
 Three Months Ended March 31,
 2019 2018
Real estate inventory impairments$
 $
Land and lot option abandonments and pre-acquisition charges5,202
 248
Total$5,202
 $248

 
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. NoNaN real estate inventory impairments were recorded for the three-monththree or nine-month periods ended March 31,September 30, 2019 or 2018, respectively.2018.
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 March 31,September 30, 2019, we held equity investments in four4 active homebuilding partnerships or limited liability companies and one1 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.
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.

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Assets and liabilities of unconsolidated entities (in thousands):
 
March 31, 2019 December 31, 2018September 30, 2019 December 31, 2018
Assets      
Cash$10,261
 $13,337
$9,740
 $13,337
Receivables3,358
 4,674
5,250
 4,674
Real estate inventories100,986
 99,864
102,878
 99,864
Other assets746
 811
672
 811
Total assets$115,351
 $118,686
$118,540
 $118,686
Liabilities and equity      
Accounts payable and other liabilities$6,930
 $11,631
$7,743
 $11,631
Company’s equity4,191
 5,410
4,207
 5,410
Outside interests’ equity104,230
 101,645
106,590
 101,645
Total liabilities and equity$115,351
 $118,686
$118,540
 $118,686
 
Results of operations from unconsolidated entities (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net sales$8,617
 $6,185
 $19,081
 $19,900
Other operating expense(5,466) (2,951) (11,746) (13,510)
Other income, net173
 1
 174
 85
Net income$3,324
 $3,235
 $7,509
 $6,475
Company’s equity in income of unconsolidated entities$2,132
 $2,001
 $4,828
 $4,588
 Three Months Ended March 31,
 2019 2018
Net sales$4,111
 $4,390
Other operating expense(2,752) (3,287)
Other income8
 63
Net income$1,367
 $1,166
Company’s equity in income of unconsolidated entities$750
 $534

  


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. These deposits are recorded as land purchase and land option deposits under real estate inventories not owned on the accompanying consolidated balance sheets.
We analyze each of our land and lot option agreements and other similar contracts under the provisions of ASC 810, Consolidation to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, if we are determined to be the primary beneficiary of the VIE, we will consolidate the VIE in our financial statements and reflect its assets as real estate inventory not owned included in our real estate inventories, its liabilities as debt (nonrecourse) held by VIEs in accrued expenses and other liabilities and the net equity of the VIE owners as noncontrolling interests on our consolidated balance sheets. In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE.
Creditors of the entities with which we have land and lot option agreements have no recourse against us. The maximum exposure to loss under our land and lot option agreements is generally 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. Additionally, we have entered into land banking arrangements which require us to complete development work even if we terminate the option to procure land or lots.

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The following provides a summary of our interests in land and lot option agreements (in thousands):
 September 30, 2019 December 31, 2018
 Deposits 
Remaining
Purchase
Price
 
Consolidated
Inventory
Held by VIEs
 Deposits 
Remaining
Purchase
Price
 
Consolidated
Inventory
Held by VIEs
Consolidated VIEs$
 $
 $
 $
 $
 $
Unconsolidated VIEs45,243
 403,246
 N/A
 41,198
 433,720
 N/A
Other land option agreements25,768
 327,033
 N/A
 30,711
 307,498
 N/A
Total$71,011
 $730,279
 $
 $71,909
 $741,218
 $
 March 31, 2019 December 31, 2018
 Deposits 
Remaining
Purchase
Price
 
Consolidated
Inventory
Held by VIEs
 Deposits 
Remaining
Purchase
Price
 
Consolidated
Inventory
Held by VIEs
Consolidated VIEs$
 $
 $
 $
 $
 $
Unconsolidated VIEs49,589
 390,757
 N/A
 41,198
 433,720
 N/A
Other land option agreements25,722
 271,299
 N/A
 30,711
 307,498
 N/A
Total$75,311
 $662,056
 $
 $71,909
 $741,218
 $

 
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 $7.0$7.2 million and $7.5 million as of March 31,September 30, 2019 and December 31, 2018, respectively. These pre-acquisition costs are included in real estate inventories as land under development on our consolidated balance sheets.  
  


8.Goodwill and Other Intangible Assets
As of March 31,September 30, 2019 and December 31, 2018, $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 two2 intangible assets as of March 31,September 30, 2019, comprised of an existing trade name from the acquisition of Maracay 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 in 2014, which has an indefinite useful life.
Goodwill and other intangible assets consisted of the following (in thousands):
 September 30, 2019 December 31, 2018
 
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 names27,979
 (7,257) 20,722
 27,979
 (6,856) 21,123
Total$167,283
 $(7,257) $160,026
 $167,283
 $(6,856) $160,427
 March 31, 2019 December 31, 2018
 
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 names27,979
 (6,990) 20,989
 27,979
 (6,856) 21,123
Total$167,283
 $(6,990) $160,293
 $167,283
 $(6,856) $160,427

 
The remaining useful life of our amortizing intangible asset related to the Maracay trade name was 6.96.4 and 7.2 years as of March 31,September 30, 2019 and December 31, 2018, respectively. The net carrying amount related to this intangible asset was $3.7$3.4 million and $3.8 million as of March 31,September 30, 2019 and December 31, 2018, respectively. Amortization expense related to this intangible asset was $134,000$133,000 for each of the three-month periods ended March 31,September 30, 2019 and 2018, respectively, and $401,000 for each of the nine-month periods ended September 30, 2019 and 2018, 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 for the remainder of 2019, the next four years and thereafter is (in thousands):
Remainder of 2019$133
2020534
2021534
2022534
2023534
Thereafter1,153
Total$3,422

Remainder of 2019$400
2020534
2021534
2022534
2023534
Thereafter1,153
Total$3,689

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9.Other Assets
Other assets consisted of the following (in thousands):
 September 30, 2019 December 31, 2018
Prepaid expenses$26,943
 $31,983
Refundable fees and other deposits24,556
 12,376
Development rights, held for future use or sale2,250
 845
Deferred loan costs–loans payable4,663
 2,424
Operating properties and equipment, net59,367
 54,198
Lease right-of-use assets52,462
 
Other3,563
 3,425
Total$173,804
 $105,251

 March 31, 2019 December 31, 2018
Prepaid expenses$30,414
 $31,983
Refundable fees and other deposits18,071
 12,376
Development rights, held for future use or sale2,288
 845
Deferred loan costs–loans payable5,298
 2,424
Operating properties and equipment, net56,462
 54,198
Lease right-of-use assets58,088
 
Other3,335
 3,425
Total$173,956
 $105,251


Lease right-of-use assets was impacted by our one-time cumulative adjustment resulting from the adoption of ASC 842. As a result of our cumulative adjustment, the December 31, 2018 balance increased by $57.4 million on January 1, 2019. For further details, see Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.Policies andNote 13, Commitments and Contingencies.




10.Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following (in thousands):
 September 30, 2019 December 31, 2018
Accrued payroll and related costs$28,660
 $44,010
Warranty reserves (Note 13)
72,893
 71,836
Estimated cost for completion of real estate inventories86,232
 114,928
Customer deposits23,587
 17,464
Income tax liability to Weyerhaeuser577
 6,577
Accrued income taxes payable4,315
 8,335
Liability for uncertain tax positions (Note 15)972
 972
Accrued interest19,135
 12,572
Other tax liability8,003
 21,892
Lease liabilities57,513
 3,196
Other13,549
 33,367
Total$315,436
 $335,149

 March 31, 2019 December 31, 2018
Accrued payroll and related costs$17,458
 $44,010
Warranty reserves (Note 13)
70,947
 71,836
Estimated cost for completion of real estate inventories77,533
 114,928
Customer deposits21,051
 17,464
Income tax liability to Weyerhaeuser577
 6,577
Accrued income taxes payable10,853
 8,335
Liability for uncertain tax positions (Note 15)972
 972
Accrued interest24,345
 12,572
Other tax liability21,171
 21,892
Lease liabilities61,284
 3,196
Other13,600
 33,367
Total$319,791
 $335,149


Lease liabilities was impacted by our one-time cumulative adjustment resulting from the adoption of ASC 842. As a result of our cumulative adjustment, the December 31, 2018 balance increased by $57.4 million on January 1, 2019. For further details, see Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.Policies andNote 13, Commitments and Contingencies.



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11.Senior Notes and Loans Payable
Senior Notes
The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):

 September 30, 2019 December 31, 2018
4.375% Senior Notes due June 15, 2019$
 $381,895
4.875% Senior Notes due July 1, 2021300,000
 300,000
5.875% Senior Notes due June 15, 2024450,000
 450,000
5.250% Senior Notes due June 1, 2027300,000
 300,000
Discount and deferred loan costs(16,942) (21,091)
Total$1,033,058
 $1,410,804
 March 31, 2019 December 31, 2018
4.375% Senior Notes due June 15, 2019$381,885
 $381,895
4.875% Senior Notes due July 1, 2021300,000
 300,000
5.875% Senior Notes due June 15, 2024450,000
 450,000
5.250% Senior Notes due June 1, 2027300,000
 300,000
Discount and deferred loan costs(19,422) (21,091)
Total$1,412,463
 $1,410,804

 
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.
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 wholly 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”) and the 4.375% Senior Notes that matured on June 15, 2019 (the “2019 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 of the 2019 Notes and the 2024 Notes 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 iswith interest payable semiannually in arrears on June 15 and December 15. During the three months ended March 31,In June 2019, we repurchased and cancelled an aggregaterepaid the remaining $381.9 million of principal amount of $10,000balance of the 2019 Notes.Notes upon maturity. During the year ended December 31, 2018, we repurchased and cancelled an aggregate principal amount of $68.1 million of the 2019 Notes.
As of March 31,September 30, 2019, there was $13.4$11.7 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 $23.3$16.7 million and $11.5 million as of March 31,September 30, 2019 and December 31, 2018, respectively.
Loans Payable
The Company’s outstanding loans payable consisted of the following (in thousands):

 September 30, 2019 December 31, 2018
Term loan facility$250,000
 $
Unsecured revolving credit facility150,000
 
Total$400,000
 $


On March 29, 2019, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), which amended and restated the Company’s Amended and Restated Credit Agreement, dated as of July 7, 2015. The Credit Facility (as defined below), which matures on March 29, 2023, consists of a $600 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility,


the “Credit Facility”). The Term Facility includes a 90 day90-day delayed draw provision. Theprovision that allowed the Company plans to draw the full $250 million from the Term Facility in June of 2019 in connection with the maturity of the 2019 Notes. The Company may increase the Credit Facility to not more than $1 billion in the aggregate, at its request, upon satisfaction of specified conditions. The Revolving Facility contains a sublimit of $75 million for letters of credit. The Company may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund its operations, including its land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates on borrowings under the Revolving 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. Interest rates on borrowings under the Term Facility will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.
As of March 31,September 30, 2019, we had no$150 million outstanding debt under the CreditRevolving Facility with an interest rate of 3.85% per annum and $818.8there was $418.6 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31,September 30, 2019, we had $250 million outstanding debt under the Term Facility with an interest rate of 3.45%. As of September 30, 2019, there was $5.3$4.7 million of capitalized debt financing costs, included in other assets on our consolidated balance sheet, related to the Credit Facility that

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will amortize over the remaining term of the Credit Facility.  Accrued interest, including loan commitment fees, related to the Credit Facility was $432,000$754,000 and $402,000 as of March 31,September 30, 2019 and December 31, 2018, respectively.
At March 31,September 30, 2019 and December 31, 2018, we had outstanding letters of credit of $31.2$31.4 million and $31.8 million, respectively.  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.
Interest Incurred
During the three months ended March 31,September 30, 2019 and 2018, the Company incurred interest of $23.4$22.4 million and $21.5$23.9 million, respectively, related to all debt during the period.  Included in interest incurred was amortization of deferred financing and Senior Note discount costs of $1.9$1.2 million and $2.0 million for the three months ended March 31,September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019 and 2018, the Company incurred interest of $67.7 million and $67.1 million, respectively, related to all debt during the period. Included in interest incurred was amortization of deferred financing and Senior Note discount costs of $5.0 million and $6.1 million for the nine months ended September 30, 2019 and 2018, respectively. Accrued interest related to all outstanding debt at March 31,September 30, 2019 and December 31, 2018 was $24.3$19.1 million and $12.6 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 those relating to consolidated tangible net worth, leverage, liquidity or interest coverage, and a spec unit inventory test. The Credit Facility also requires that at least 97.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.
The Company was in compliance with all applicable financial covenants as of March 31,September 30, 2019 and December 31, 2018.



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
Fair Value of Financial Instruments
A summary of assets and liabilities at March 31,September 30, 2019 and December 31, 2018, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):
   March 31, 2019 December 31, 2018
 Hierarchy Book Value Fair Value Book Value Fair Value
Senior Notes (1)
Level 2 $1,425,892
 $1,395,794
 $1,425,397
 $1,308,826
   September 30, 2019 December 31, 2018
 Hierarchy Book Value Fair Value Book Value Fair Value
Senior Notes (1)
Level 2 $1,044,775
 $1,084,875
 $1,425,397
 $1,308,826
Unsecured revolving credit facility (2)
Level 2 $150,000
 $150,000
 $
 $
Term loan facility (2)
Level 2 $250,000
 $250,000
 $
 $
__________
(1) 
The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $13.4$11.7 million and $14.6 million as of March 31,September 30, 2019 and December 31, 2018, respectively. The estimated fair value of the Senior Notes at March 31,September 30, 2019 and December 31, 2018 is based on quoted market prices.
(2)
The estimated fair value of the Credit Facility and Term Loan Facility as of September 30, 2019 approximated book value due to the variable interest rate terms of these loans.


At March 31,September 30, 2019 and December 31, 2018, the carrying value of cash and cash equivalents and receivables approximated fair value due to their short-term nature and variable interest rate terms.

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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. No carrying values were adjusted to fair value for the threenine months ended March 31,September 30, 2019 or the year ended December 31, 2018.




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 no0 legal reserve as of March 31,September 30, 2019. As of December 31, 2018, we had a $17.5 million legal reserve related to a settlement in connection with a previously disclosed lawsuit involving a land sale that occurred in 1987.1987, included in accrued expenses and other liabilities on our consolidated balance sheet. This settlement was paid on February 4, 2019.
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.

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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 $37.5$37.4 million and $37.6 million as of March 31,September 30, 2019 and December 31, 2018, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheets.
Warranty reserve activity consisted of the following (in thousands):
 
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Warranty reserves, beginning of period$71,471
 $72,342
 $71,836
 $69,373
Warranty reserves accrued6,826
 6,257
 17,481
 17,669
Warranty expenditures(5,404) (4,604) (16,424) (13,047)
Warranty reserves, end of period$72,893
 $73,995
 $72,893
 $73,995
 Three Months Ended March 31,
 2019 2018
Warranty reserves, beginning of period$71,836
 $69,373
Warranty reserves accrued4,270
 4,746
Warranty expenditures(5,159) (3,637)
Warranty reserves, end of period$70,947
 $70,482

 
Performance Bonds
We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. The beneficiaries of the bonds are various municipalities. As of March 31,September 30, 2019 and December 31, 2018, the Company had outstanding surety bonds totaling $653.9$592.1 million and $685.7 million, respectively. As of March 31,September 30, 2019 and December 31, 2018, our estimated cost to complete obligations related to these surety bonds was $415.2$398.2 million and $423.4 million, respectively.
Lease Obligations
Under ASC 842 we recognize a right-of-use lease asset and a lease liability for contracts deemed to contain a lease at the inception of the contract. Our lease population is fully comprised of operating leases, which are now recorded at the net present value of future lease obligations existing at each balance sheet date. At the inception of a lease, or if a lease is subsequently modified, we determine whether the lease is an operating or financing lease. Key estimates involved with ASC 842 include the discount rate used to measure our future lease obligations and the lease term, where considerations include renewal options and intent to renew. Lease right-of-use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities on our consolidated balance sheet.
Operating Leases
We lease certain property and equipment under non-cancelable operating leases. Office leases are for terms of up to ten years and generally provide renewal options. In most cases, we expect that, in the normal course of business, leases that expire will be renewed or replaced by other leases. Equipment leases are typically for terms of three to four years.


Ground Leases
In 1987, we obtained two2 55-year ground leases of commercial property that provided for three3 renewal options of ten years each and one1 45-year renewal option.  We exercised the three ten year3 ten-year extensions on one1 of these ground leases extendingto extend the lease through 2071.  The commercial buildings on these properties have been sold and the ground leases have been sublet to the buyers.
For one of these leases, we are responsible for making lease payments to the land owner, and we collect sublease payments from the buyers of the buildings. This ground lease has been subleased through 2041 to the buyers of the commercial buildings. For the second lease, the buyers of the buildings are responsible for making lease payments directly to the land owner, however, we have guaranteed the performance of the buyers/lessees. See below for additional information on leases (dollars in thousands):


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Three Months Ended March 31, 2019Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Lease cost 
Lease Cost   
Operating lease cost (included in SG&A expense)$2,044
$2,755
 $6,965
Ground lease cost (included in other operations expense)590
609
 1,826
Sublease income, ground leases (included in other operations revenue)(598)(618) (1,853)
Net lease cost$2,036
$2,746
 $6,938
    
Other information    
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease cash flows (included in operating cash flows)$1,609
$1,556
 $4,806
Ground lease cash flows (included in operating cash flows)$608
$609
 $1,826
Right-of-use assets obtained in exchange for new operating lease liabilities$1,707
$311
 $2,364
 March 31,September 30, 2019
Weighted-average discount rate: 
Operating leases6.0%
Ground leases10.2%
Weighted-average remaining lease term (in years): 
Operating leases6.36.1

Ground leases49.248.5


The future minimum lease payments under our operating leases are as follows (in thousands):
Property, Equipment and Other Leases 
Ground Leases (1)
Property, Equipment and Other Leases 
Ground Leases (1)
Remaining in 2019$6,347
 $2,238
$2,278
 $746
20208,322
 2,984
8,594
 2,984
20217,048
 2,984
7,182
 2,984
20225,453
 2,984
5,591
 2,984
20234,349
 2,984
4,484
 2,984
Thereafter8,799
 84,266
9,155
 84,266
$40,318
 $98,440
Total lease payments$37,284
 $96,948
Less: Interest6,708
 70,011
Present value of operating lease liabilities$30,576
 $26,937
(1)     Ground leases are fully subleased through 2041, representing $67.4$65.9 million of the $98.4$96.9 million future ground lease obligations.







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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 (“RSUs”) 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 March 31,September 30, 2019, there were 5,886,6055,835,420 shares available for future grant under the 2013 Incentive Plan.
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,
 2019 2018 2019 2018
Total stock-based compensation$3,828
 $3,765
 $10,614
 $10,955
 Three Months Ended March 31,
 2019 2018
Total stock-based compensation$3,435
 $3,470

 
Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations.  As of March 31,September 30, 2019, total unrecognized stock-based compensation related to all stock-based awards was $29.6$21.8 million and the weighted average term over which the expense was expected to be recognized was 2.31.9 years.
Summary of Stock Option Activity
The following table presents a summary of stock option awards for the threenine months ended March 31,September 30, 2019:
 Options 
Weighted
Average
Exercise
Price
Per Share
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value
(in thousands)
Options outstanding at December 31, 2018953,905
 $14.58
 4.2
 $296
Granted
 
 
 
Exercised(46,940) $6.66
 
 
Forfeited(3,625) $14.29
 
 
Options outstanding at September 30, 2019903,340
 $15.00
 3.6
 $786
Options exercisable at September 30, 2019903,340
 $15.00
 3.6
 $786
 Options 
Weighted
Average
Exercise
Price
Per Share
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value
(in thousands)
Options outstanding at December 31, 2018953,905
 $14.58
 4.2
 $296
Granted
 
 
 
Exercised(32,486) $6.50
 
 
Forfeited
 $
 
 
Options outstanding at March 31, 2019921,419
 $14.87
 4.1
 $350
Options exercisable at March 31, 2019921,419
 $14.87
 4.1
 $350

 
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 RSUs for the threenine months ended March 31,September 30, 2019:

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Restricted
Stock
Units
 
Weighted
Average
Grant Date
Fair Value
Per Share
 
Aggregate
Intrinsic
Value
(in thousands)
Nonvested RSUs at December 31, 20183,341,848
 $11.05
 $36,526
Granted1,656,333
 $12.15
 
Vested(844,534) $12.95
 
Forfeited(756,672) $5.32
 
Nonvested RSUs at September 30, 20193,396,975
 $12.39
 $51,091

 
Restricted
Stock
Units
 
Weighted
Average
Grant Date
Fair Value
Per Share
 
Aggregate
Intrinsic
Value
(in thousands)
Nonvested RSUs at December 31, 20183,341,848
 $11.05
 $36,526
Granted1,593,747
 $12.10
 
Vested(795,528) $12.70
 
Forfeited(745,756) $5.20
 
Nonvested RSUs at March 31, 20193,394,311
 $12.45
 $42,904

RSUs that vested, as reflected in the table above, during the nine months ended September 30, 2019 include previously granted time-based RSUs. RSUs that were forfeited, as reflected in the table above, during the nine months ended September 30, 2019 include performance-based RSUs and time-based RSUs that were forfeited for no consideration.

On May 6, 2019, the Company granted an aggregate of 61,488 time-based RSUs to the non-employee members of its board of directors and 1,098 time-based RSUs to certain employees. The RSUs granted to non-employee directors vest in their entirety on the day immediately prior to the Company's 2020 Annual Meeting of Stockholders and the RSUs granted to employee’s 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 May 6, 2019 was measured using a price of $13.66 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 11, 2019 and February 28, 2019, the Company granted an aggregate of 3,025 and 990,723, respectively, of time-vestedtime-based RSUs to certain 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 11, 2019 and February 28, 2019 was measured using a price of $13.22 and $12.60 per share, respectively, which waswere the closing stock priceprices on the datedates of grant. Each award will be expensed on a straight-line basis over the vesting period.


On February 28, 2019, the Company granted 247,619, 238,095 and 114,285 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) thirty percent to total stockholder return (“TSR”), with vesting based on the Company’s TSR relative to its peer-group homebuilders; and (ii) seventy percent to 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, 2019 to December 31, 2021. The fair value of the performance-based RSUs related to the TSR metric was determined to be $8.16 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 $12.60 per share, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

RSUs that vested, as reflected in the table above, during the three months ended March 31, 2019 included time-based RSUs that were previously granted. RSUs that were forfeited, as reflected in the table above, during the three months ended March 31, 2019 included performance-based RSUs and time-based RSUs that were forfeited for no consideration.


On April 30, 2018, the Company granted an aggregate of 40,910 RSUs to the non-employee members of its board of directors. On July 23, 2018, the Company granted 6,677 RSUs to a non-employee member of its board of directors in connection with such individual's appointment to the board of directors. These RSUs vestvested in their entirety on the day immediately prior to the Company's 2019 Annual Meeting of Stockholders.April 29, 2019. The fair value of each RSU granted on April 30, 2018 and July 23, 2018 was measured using a price of $17.11 and $16.37 per share, respectively, which waswere the closing stock priceprices on the datedates of grant. Each award will bewas expensed on a straight-line basis over the vesting period.
On May 7, 2018 and February 22, 2018, the Company granted an aggregate of 4,258 and 633,107, respectively, of time-vestedtime-based RSUs to certain 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 May 7, 2018 and February 22, 2018 was measured using a price of $17.61 and $16.94 per share, respectively, which waswere the closing stock priceprices on the date of grant.grants. Each award will be expensed on a straight-line basis over the vesting period.



On February 22, 2018, the Company granted 184,179, 177,095, and 85,005 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, 2018 to December 31, 2020. The fair value of the performance-based RSUs related to the TSR metric was determined to be $10.97 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 $16.94 per share, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service 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.



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15.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 $57.3 million and $67.8 million as of both March 31,September 30, 2019 and December 31, 2018.  We had a valuation allowance related to those net deferred tax assets of $3.4 million as of both March 31,September 30, 2019 and December 31, 2018.  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.
TRI Pointe has certain liabilities to Weyerhaeuser Company (“Weyerhaeuser”) related to a tax sharing agreement.  As of March 31,September 30, 2019 and December 31, 2018, we had an income tax liability to Weyerhaeuser of $577,000 and $6.6 million, respectively. The income tax liability to Weyerhaeuser is recorded in accrued expenses and other liabilities on the accompanying consolidated balance sheets. During the three months ended March 31, 2019, we amended our existing tax sharing agreement with Weyerhaeuser, pursuant to which the parties agreed, among other things, that we had no further obligation to remit payment to Weyerhaeuser in connection with any potential utilization of certain deductions or losses associated with certain Weyerhaeuser entities with respect to federal and state taxes. As a result of the amendment, during the three months ended March 31, 2019, we decreased our income tax liability to Weyerhaeuser and recorded other income of $6.0 million, which is included in other income, net in the accompanying consolidated statements of operations.
Our provision for income taxes totaled $24,000$21.9 million and $14.7$19.7 million for the three months ended March 31,September 30, 2019 and 2018, respectively. Our provision for income taxes totaled $31.0 million and $55.5 million for the nine months ended September 30, 2019 and 2018, respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense.  The Company had $1.0 million of uncertain tax positions recorded as of both March 31,September 30, 2019 and December 31, 2018.  The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 
  
16.Related Party Transactions
We had no0 related party transactions for the threenine months ended March 31,September 30, 2019 and 2018.



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17.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,
 2019 2018
Supplemental disclosure of cash flow information:   
Interest paid (capitalized), net$(11,599) $(12,807)
Income taxes paid (refunded), net$23,731
 $81,417
Supplemental disclosures of noncash activities:   
Amortization of senior note discount capitalized to real estate inventory$1,409
 $1,738
Amortization of deferred loan costs capitalized to real estate inventory$4,112
 $4,841
Increase in other assets related to adoption of ASC 606$
 $39,534
 Three Months Ended March 31,
 2019 2018
Supplemental disclosure of cash flow information:   
Interest paid (capitalized), net$(13,697) $(13,858)
Income taxes paid (refunded), net$(2,538) $30
Supplemental disclosures of noncash activities:   
Amortization of senior note discount capitalized to real estate inventory$505
 $531
Amortization of deferred loan costs capitalized to real estate inventory$1,415
 $1,492
Increase in other assets related to adoption of ASC 606$
 $39,534

  
18.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. The 2019 Notes matured on June 15, 2019, at which time the Company repaid the remaining principal balance of $381.9 million.
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

- 25 -



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 March 31,September 30, 2019 and December 31, 2018, condensed consolidating statements of operations for the three and nine months ended March 31,September 30, 2019 and 2018 and


condensed consolidating statement of cash flows for the threenine months ended March 31,September 30, 2019 and 2018. 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”.
Condensed Consolidating Balance Sheet (in thousands):
 
March 31, 2019September 30, 2019
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Assets              
Cash and cash equivalents$55,854
 $92,928
 $
 $148,782
$34,683
 $95,579
 $
 $130,262
Receivables20,616
 37,618
 
 58,234
25,703
 44,804
 
 70,507
Intercompany receivables858,286
 
 (858,286) 
843,814
 
 (843,814) 
Real estate inventories780,568
 2,462,110
 
 3,242,678
803,339
 2,542,051
 
 3,345,390
Investments in unconsolidated entities
 4,191
 
 4,191

 4,207
 
 4,207
Goodwill and other intangible assets, net156,603
 3,690
 
 160,293
156,604
 3,422
 
 160,026
Investments in subsidiaries1,668,464
 
 (1,668,464) 
1,760,138
 
 (1,760,138) 
Deferred tax assets, net14,822
 52,939
 
 67,761
14,822
 42,453
 
 57,275
Other assets20,894
 153,062
 
 173,956
18,925
 154,879
 
 173,804
Total assets$3,576,107
 $2,806,538
 $(2,526,750) $3,855,895
$3,658,028
 $2,887,395
 $(2,603,952) $3,941,471
              
Liabilities              
Accounts payable$11,973
 $54,632
 $
 $66,605
$20,098
 $61,181
 $
 $81,279
Intercompany payables
 858,286
 (858,286) 

 843,814
 (843,814) 
Accrued expenses and other liabilities94,648
 225,143
 
 319,791
93,187
 222,249
 
 315,436
Loans payable400,000
 
 
 400,000
Senior notes1,412,463
 
 
 1,412,463
1,033,058
 
 
 1,033,058
Total liabilities1,519,084
 1,138,061
 (858,286) 1,798,859
1,546,343
 1,127,244
 (843,814) 1,829,773
              
Equity              
Total stockholders’ equity2,057,023
 1,668,464
 (1,668,464) 2,057,023
2,111,685
 1,760,138
 (1,760,138) 2,111,685
Noncontrolling interests
 13
 
 13

 13
 
 13
Total equity2,057,023
 1,668,477
 (1,668,464) 2,057,036
2,111,685
 1,760,151
 (1,760,138) 2,111,698
Total liabilities and equity$3,576,107
 $2,806,538
 $(2,526,750) $3,855,895
$3,658,028
 $2,887,395
 $(2,603,952) $3,941,471





- 26 -




Condensed Consolidating Balance Sheet (in thousands):
 
 December 31, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Assets       
Cash and cash equivalents$148,129
 $129,567
 $
 $277,696
Receivables16,589
 35,003
 
 51,592
Intercompany receivables758,501
 
 (758,501) 
Real estate inventories812,799
 2,403,260
 
 3,216,059
Investments in unconsolidated entities
 5,410
 
 5,410
Goodwill and other intangible assets, net156,604
 3,823
 
 160,427
Investments in subsidiaries1,672,635
 
 (1,672,635) 
Deferred tax assets, net14,822
 52,946
 
 67,768
Other assets12,984
 92,267
 
 105,251
Total assets$3,593,063
 $2,722,276
 $(2,431,136) $3,884,203
        
Liabilities       
Accounts payable$13,433
 $67,880
 $
 $81,313
Intercompany payables
 758,501
 (758,501) 
Accrued expenses and other liabilities111,902
 223,247
 
 335,149
Senior notes1,410,804
 
 
 1,410,804
Total liabilities1,536,139
 1,049,628
 (758,501) 1,827,266
        
Equity       
Total stockholders’ equity2,056,924
 1,672,635
 (1,672,635) 2,056,924
Noncontrolling interests
 13
 
 13
Total equity2,056,924
 1,672,648
 (1,672,635) 2,056,937
Total liabilities and equity$3,593,063
 $2,722,276
 $(2,431,136) $3,884,203

 December 31, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Assets       
Cash and cash equivalents$148,129
 $129,567
 $
 $277,696
Receivables16,589
 35,003
 
 51,592
Intercompany receivables758,501
 
 (758,501) 
Real estate inventories812,799
 2,403,260
 
 3,216,059
Investments in unconsolidated entities
 5,410
 
 5,410
Goodwill and other intangible assets, net156,604
 3,823
 
 160,427
Investments in subsidiaries1,672,635
 
 (1,672,635) 
Deferred tax assets, net14,822
 52,946
 
 67,768
Other assets12,984
 92,267
 
 105,251
Total assets$3,593,063
 $2,722,276
 $(2,431,136) $3,884,203
        
Liabilities       
Accounts payable$13,433
 $67,880
 $
 $81,313
Intercompany payables
 758,501
 (758,501) 
Accrued expenses and other liabilities111,902
 223,247
 
 335,149
Senior notes1,410,804
 
 
 1,410,804
Total liabilities1,536,139
 1,049,628
 (758,501) 1,827,266
        
Equity       
Total stockholders’ equity2,056,924
 1,672,635
 (1,672,635) 2,056,924
Noncontrolling interests
 13
 
 13
Total equity2,056,924
 1,672,648
 (1,672,635) 2,056,937
Total liabilities and equity$3,593,063
 $2,722,276
 $(2,431,136) $3,884,203











- 27 -




Condensed Consolidating Statement of Operations (in thousands):
 
Three Months Ended March 31, 2019Three Months Ended September 30, 2019
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:              
Home sales revenue$171,791
 $320,912
 $
 $492,703
$154,737
 $591,532
 $
 $746,269
Land and lot sales revenue
 1,029
 
 1,029

 607
 
 607
Other operations revenue
 598
 
 598

 618
 
 618
Total revenues171,791
 322,539
 
 494,330
154,737
 592,757
 
 747,494
Cost of home sales145,075
 276,461
 
 421,536
130,248
 447,379
 
 577,627
Cost of land and lot sales
 1,495
 
 1,495

 495
 
 495
Other operations expense
 590
 
 590

 609
 
 609
Sales and marketing9,299
 29,690
 
 38,989
9,716
 38,118
 
 47,834
General and administrative19,479
 19,118
 
 38,597
19,353
 19,398
 
 38,751
Homebuilding loss from operations(2,062) (4,815) 
 (6,877)
Equity in loss of unconsolidated entities
 (25) 
 (25)
Homebuilding (loss) income from operations(4,580) 86,758
 
 82,178
Equity in income of unconsolidated entities
 18
 
 18
Other income, net6,140
 101
 
 6,241
21
 304
 
 325
Homebuilding income (loss) before income taxes4,078
 (4,739) 
 (661)
Homebuilding (loss) income before income taxes(4,559) 87,080
 
 82,521
Financial Services:              
Revenues
 302
 
 302

 901
 
 901
Expenses
 321
 
 321

 817
 
 817
Equity in income of unconsolidated entities
 775
 
 775

 2,114
 
 2,114
Financial services income before income taxes
 756
 
 756

 2,198
 
 2,198
Income (loss) before income taxes4,078
 (3,983) 
 95
Equity of net (loss) of subsidiaries(4,007) 
 4,007
 
(Loss) income before income taxes(4,559) 89,278
 
 84,719
Equity of net income of subsidiaries67,420
 
 (67,420) 
Provision for income taxes
 (24) 
 (24)
 (21,858) 
 (21,858)
Net income (loss)$71
 $(4,007) $4,007
 $71
Net income$62,861
 $67,420
 $(67,420) $62,861







- 28 -




 
Condensed Consolidating Statement of Operations (in thousands):
 
 Three Months Ended September 30, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:       
Home sales revenue$264,499
 $507,269
 $
 $771,768
Land and lot sales revenue
 2,225
 
 2,225
Other operations revenue
 598
 
 598
Total revenues264,499
 510,092
 
 774,591
Cost of home sales214,759
 392,294
 
 607,053
Cost of land and lot sales
 2,234
 
 2,234
Other operations expense
 590
 
 590
Sales and marketing11,434
 33,420
 
 44,854
General and administrative19,427
 18,682
 
 38,109
Homebuilding income from operations18,879
 62,872
 
 81,751
Equity in income of unconsolidated entities
 15
 
 15
Other (loss) income, net(572) 95
 
 (477)
Homebuilding income before income taxes18,307
 62,982
 
 81,289
Financial Services:       
Revenues
 480
 
 480
Expenses
 125
 
 125
Equity in income of unconsolidated entities
 1,986
 
 1,986
Financial services income before income taxes
 2,341
 
 2,341
Income before income taxes18,307
 65,323
 
 83,630
Equity of net income of subsidiaries45,662
 
 (45,662) 
Provision for income taxes
 (19,661) 
 (19,661)
Net income$63,969
 $45,662
 $(45,662) $63,969

 Three Months Ended March 31, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:       
Home sales revenue$190,420
 $392,152
 $
 $582,572
Land and lot sales revenue
 223
 
 223
Other operations revenue
 598
 
 598
Total revenues190,420
 392,973
 
 583,393
Cost of home sales159,055
 291,447
 
 450,502
Cost of land and lot sales
 503
 
 503
Other operations expense
 602
 
 602
Sales and marketing10,517
 27,766
 
 38,283
General and administrative18,159
 18,655
 
 36,814
Homebuilding income from operations2,689
 54,000
 
 56,689
Equity in loss of unconsolidated entities
 (468) 
 (468)
Other income, net139
 32
 
 171
Homebuilding income before income taxes2,828
 53,564
 
 56,392
Financial Services:       
Revenues
 283
 
 283
Expenses
 137
 
 137
Equity in income of unconsolidated entities
 1,002
 
 1,002
Financial services income before income taxes
 1,148
 
 1,148
Income before income taxes2,828
 54,712
 
 57,540
Equity of net income of subsidiaries40,052
 
 (40,052) 
Provision for income taxes
 (14,660) 
 (14,660)
Net income$42,880
 $40,052
 $(40,052) $42,880














Condensed Consolidating Statement of Operations (in thousands):
 Nine Months Ended September 30, 2019
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:       
Home sales revenue$519,280
 $1,411,830
 $
 $1,931,110
Land and lot sales revenue
 6,819
 
 6,819
Other operations revenue
 1,853
 
 1,853
Total revenues519,280
 1,420,502
 
 1,939,782
Cost of home sales438,679
 1,135,168
 
 1,573,847
Cost of land and lot sales
 7,552
 
 7,552
Other operations expense
 1,826
 
 1,826
Sales and marketing28,976
 104,912
 
 133,888
General and administrative57,223
 56,979
 
 114,202
Homebuilding (loss) income from operations(5,598) 114,065
 
 108,467
Equity in loss of unconsolidated entities
 (33) 
 (33)
Other income, net6,169
 550
 
 6,719
Homebuilding income before income taxes571
 114,582
 
 115,153
Financial Services:       
Revenues
 1,959
 
 1,959
Expenses
 1,765
 
 1,765
Equity in income of unconsolidated entities
 4,861
 
 4,861
Financial services income before income taxes
 5,055
 
 5,055
Income before income taxes571
 119,637
 
 120,208
Equity of net income of subsidiaries88,628
 
 (88,628) 
Provision for income taxes(5) (31,009) 
 (31,014)
Net income$89,194
 $88,628
 $(88,628) $89,194
















Condensed Consolidating Statement of Operations (in thousands):
 Nine Months Ended September 30, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:       
Home sales revenue$710,561
 $1,412,574
 $
 $2,123,135
Land and lot sales revenue
 3,966
 
 3,966
Other operations revenue
 1,795
 
 1,795
Total revenues710,561
 1,418,335
 
 2,128,896
Cost of home sales586,852
 1,074,799
 
 1,661,651
Cost of land and lot sales
 4,163
 
 4,163
Other operations expense
 1,781
 
 1,781
Sales and marketing33,943
 94,938
 
 128,881
General and administrative55,527
 55,879
 
 111,406
Homebuilding income from operations34,239
 186,775
 
 221,014
Equity in loss of unconsolidated entities
 (384) 
 (384)
Other (loss) income, net(537) 158
 
 (379)
Homebuilding income before income taxes33,702
 186,549
 
 220,251
Financial Services:       
Revenues
 1,154
 
 1,154
Expenses
 391
 
 391
Equity in income of unconsolidated entities
 4,972
 
 4,972
Financial services income before income taxes
 5,735
 
 5,735
Income before income taxes33,702
 192,284
 
 225,986
Equity of net income of subsidiaries136,827
 
 (136,827) 
Provision for income taxes
 (55,457) 
 (55,457)
Net income$170,529
 $136,827
 $(136,827) $170,529






















- 29 -






Condensed Consolidating Statement of Cash Flows (in thousands):
 
Three Months Ended March 31, 2019Nine Months Ended September 30, 2019
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Cash flows from operating activities:              
Net cash provided by (used in) operating activities$15,054
 $(129,979) $
 $(114,925)$5,678
 $(99,987) $
 $(94,309)
Cash flows from investing activities:              
Purchases of property and equipment(2,065) (5,159) 
 (7,224)(7,088) (15,304) 
 (22,392)
Proceeds from sale of property and equipment
 7
 
 7

 46
 
 46
Investments in unconsolidated entities
 (231) 
 (231)
 (712) 
 (712)
Intercompany(98,723) 
 98,723
 
(81,969) 
 81,969
 
Net cash (used in) provided by investing activities(100,788) (5,383) 98,723
 (7,448)
Net cash used in investing activities(89,057) (15,970) 81,969
 (23,058)
Cash flows from financing activities:              
Borrowings from debt400,000
 
 
 400,000
Repayment of debt(10) 
 
 (10)(381,895) 
 
 (381,895)
Debt issuance costs(3,124) 
 
 (3,124)(3,125) 
 
 (3,125)
Proceeds from issuance of common stock under
share-based awards
198
 
 
 198
300
 
 
 300
Minimum tax withholding paid on behalf of employees for
restricted stock units
(3,605) 
 
 (3,605)(3,612) 
 
 (3,612)
Share repurchases(41,735) 
 
 (41,735)
Intercompany
 98,723
 (98,723) 

 81,969
 (81,969) 
Net cash (used in) provided by financing activities(6,541) 98,723
 (98,723) (6,541)(30,067) 81,969
 (81,969) (30,067)
Net decrease in cash and cash equivalents(92,275) (36,639) 
 (128,914)(113,446) (33,988) 
 (147,434)
Cash and cash equivalents–beginning of period148,129
 129,567
 
 277,696
148,129
 129,567
 
 277,696
Cash and cash equivalents–end of period$55,854
 $92,928
 $
 $148,782
$34,683
 $95,579
 $
 $130,262







- 30 -




Condensed Consolidating Statement of Cash Flows (in thousands):
 
 Nine Months Ended September 30, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Cash flows from operating activities:       
Net cash provided by (used in) operating activities$60,315
 $(132,405) $
 $(72,090)
Cash flows from investing activities:       
Purchases of property and equipment(6,603) (17,944) 
 (24,547)
Proceeds from sale of property and equipment
 8
 
 8
Investments in unconsolidated entities
 (1,812) 
 (1,812)
Intercompany(108,780) 
 108,780
 
Net cash used in investing activities(115,383) (19,748) 108,780
 (26,351)
Cash flows from financing activities:       
Borrowings from notes payable100,000
 
 
 100,000
Repayment of notes payable(57,931) 
 
 (57,931)
Distributions to noncontrolling interests
 (1) 
 (1)
Proceeds from issuance of common stock under
   share-based awards
1,943
 
 
 1,943
Minimum tax withholding paid on behalf of employees for restricted stock units(6,049) 
 
 (6,049)
Share repurchases(139,349) 
 
 (139,349)
Intercompany
 108,780
 (108,780) 
Net cash (used in) provided by financing activities(101,386) 108,779
 (108,780) (101,387)
Net decrease in cash and cash equivalents(156,454) (43,374) 
 (199,828)
Cash and cash equivalents–beginning of period176,684
 106,230
 
 282,914
Cash and cash equivalents–end of period$20,230
 $62,856
 $
 $83,086

 Three Months Ended March 31, 2018
 Issuer 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Cash flows from operating activities:       
Net cash provided by (used in) operating activities$52,793
 $(2,907) $
 $49,886
Cash flows from investing activities:       
Purchases of property and equipment(419) (1,751) 
 (2,170)
Proceeds from sale of property and equipment
 
 
 
Investments in unconsolidated entities
 (947) 
 (947)
Intercompany(18,449) 
 18,449
 
Net cash used in investing activities(18,868) (2,698) 18,449
 (3,117)
Cash flows from financing activities:       
Distributions to noncontrolling interests
 (1) 
 (1)
Proceeds from issuance of common stock under
   share-based awards
975
 
 
 975
Minimum tax withholding paid on behalf of employees for restricted stock units(6,049) 
 
 (6,049)
Intercompany
 18,449
 (18,449) 
Net cash (used in) provided by financing activities(5,074) 18,448
 (18,449) (5,075)
Net increase in cash and cash equivalents28,851
 12,843
 
 41,694
Cash and cash equivalents–beginning of period176,684
 106,230
 
 282,914
Cash and cash equivalents–end of period$205,535
 $119,073
 $
 $324,608









- 31 -





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
Forward-looking statements that are included in this Quarterly Report on Form 10-Q are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “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 uncertaintiesand assumptions that are madethat 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;
the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels;
access to adequate capital on acceptable terms;
geographic concentration of our operations, particularly within California;
levels of competition;
the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;
global economic conditions;
raw material and labor prices and availability;
oil and other energy prices;
the effect of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries;
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;
changes in accounting principles;

- 32 -



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” included in our Annual Report on Form 10-K for the year ended December 31, 2018 and in other filings we make with the Securities and Exchange Commission (“SEC”).
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related condensed notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our securities. We urge investors to review and consider carefully the various disclosures made by us in this report and in our other reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2018 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 areremain encouraged by thecurrent economic conditions experiencedconditions. Mortgage interest rates have declined in 2019 compared to rising rates in the first quarterback half of 2019,2018, which resultedhas provided support to a generally healthy homebuying market as evidenced by the 25% increase in a steady monthly increase inour net new home orders duringfor the quarter. We attribute thisthree months ended September 30, 2019 compared to the prior-year period. Lower mortgage interest rates are accompanied by low unemployment, positive trendwage growth and increasing household formations. In addition, the backdrop of housing remains favorable as supply remains low compared to a growinghistorical levels. While the U.S. economy aided by lower interest rates, strong unemployment metrics,has been resilient against international trade conflicts and stable core inflation projected to persistthe predictions of a global economic slowdown, we remain cautious as we guide our Company through the remaindercurrent phase of 2019. We feel our industry has favorable long term trends due to favorable demand characteristics from both the millennialeconomic cycle. While the global economic front remains uncertain and baby boomer demographics that are buffeteddeteriorating global conditions could negatively impact the U.S. economy, we remain confident heading into the fourth quarter of 2019 and looking outward into 2020. Based on the latest economic data and commentary by the constraints of supply, labor and the regulatory environment. WeFederal Reserve, we expect fiscal and monetary policy to remain favorable to our industry throughout the remainder of 2019. However, the global economy appears to be showing signs of a slowdown that could negatively impact the U.S. economy, and uncertainty in the market can act as a significant headwind to our industry. We remain optimistic as the spring selling season has moved into the second quarter.











- 33 -




Consolidated Financial Data (in thousands, except per share amounts):
 
Three Months Ended March 31,Three Months Ended September 30, Nine Months Ended September 30,
2019 20182019 2018 2019 2018
Homebuilding: 
  
 
  
    
Home sales revenue$492,703
 $582,572
$746,269
 $771,768
 $1,931,110
 $2,123,135
Land and lot sales revenue1,029
 223
607
 2,225
 6,819
 3,966
Other operations revenue598
 598
618
 598
 1,853
 1,795
Total revenues494,330
 583,393
747,494
 774,591
 1,939,782
 2,128,896
Cost of home sales421,536
 450,502
577,627
 607,053
 1,573,847
 1,661,651
Cost of land and lot sales1,495
 503
495
 2,234
 7,552
 4,163
Other operations expense590
 602
609
 590
 1,826
 1,781
Sales and marketing38,989
 38,283
47,834
 44,854
 133,888
 128,881
General and administrative38,597
 36,814
38,751
 38,109
 114,202
 111,406
Homebuilding (loss) income from operations(6,877) 56,689
Equity in loss of unconsolidated entities(25) (468)
Other income, net6,241
 171
Homebuilding (loss) income before income taxes(661) 56,392
Homebuilding income from operations82,178
 81,751
 108,467
 221,014
Equity in income (loss) of unconsolidated entities18
 15
 (33) (384)
Other income (expense), net325
 (477) 6,719
 (379)
Homebuilding income before income taxes82,521
 81,289
 115,153
 220,251
Financial Services:          
Revenues302
 283
901
 480
 1,959
 1,154
Expenses321
 137
817
 125
 1,765
 391
Equity in income of unconsolidated entities775
 1,002
2,114
 1,986
 4,861
 4,972
Financial services income before income taxes756
 1,148
2,198
 2,341
 5,055
 5,735
Income before income taxes95
 57,540
84,719
 83,630
 120,208
 225,986
Provision for income taxes(24) (14,660)(21,858) (19,661) (31,014) (55,457)
Net income$71
 $42,880
$62,861
 $63,969
 89,194
 170,529
Earnings per share   
   
    
Basic$0.00
 $0.28
$0.45
 $0.43
 $0.63
 $1.13
Diluted$0.00
 $0.28
$0.44
 $0.43
 $0.63
 $1.13
Three Months Ended March 31,September 30, 2019 Compared to Three Months Ended March 31,September 30, 2018
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment
 
Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Percentage ChangeThree Months Ended September 30, 2019 Three Months Ended September 30, 2018 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
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
Maracay161
 11.8
 4.5
 153
 13.2
 3.9
 5 % (11)% 18 %157
 15.5
 3.4
 97
 11.0
 2.9
 62% 41 % 15%
Pardee Homes433
 44.5
 3.2
 473
 32.5
 4.9
 (8)% 37 % (33)%424
 43.0
 3.3
 357
 36.8
 3.2
 19% 17 % 2%
Quadrant Homes75
 7.2
 3.5
 108
 7.0
 5.1
 (31)% 3 % (32)%68
 6.8
 3.3
 64
 7.0
 3.0
 6% (3)% 9%
Trendmaker Homes243
 39.3
 2.1
 155
 29.8
 1.7
 57 % 32 % 19 %192
 37.0
 1.7
 139
 27.5
 1.7
 38% 35 % 3%
TRI Pointe Homes295
 30.8
 3.2
 459
 33.8
 4.5
 (36)% (9)% (29)%293
 29.7
 3.3
 266
 30.3
 2.9
 10% (2)% 12%
Winchester Homes114
 14.2
 2.7
 148
 13.5
 3.7
 (23)% 5 % (27)%157
 15.5
 3.4
 112
 14.7
 2.5
 40% 5 % 33%
Total1,321
 147.8
 3.0
 1,496
 129.8
 3.8
 (12)% 14 % (22)%1,291
 147.5
 2.9
 1,035
 127.3
 2.7
 25% 16 % 8%
 

- 34 -



Net new home orders for the three months ended March 31,September 30, 2019 decreasedincreased by 175256 orders, or 12%25%, to 1,321,1,291, compared to 1,4961,035 during the prior-year period.  The decreaseincrease in net new home orders was due to a 22% decrease in monthly absorption rate, offset by a 14% increase in average selling communities. The overall decrease in our monthly absorption rate was primarily due to reduced sales in January 2019, as well as our exceptionally strong sales numbers in the first quarter of 2018. Our monthly net new home order rate increased sequentially during the current year period. The16% increase in average selling communities was due primarily to our acquisition of a Dallas–Fort Worth-based homebuilderand an 8% increase in December 2018.monthly absorption rates.


Maracay reported a 5%62% increase in net new home orders driven by an 18%a 41% increase in average selling communities and a 15% increase in monthly absorption rate offset by an 11% decrease in average selling communities.rates. The increase in Maracay’s monthly absorption rate to 4.53.4 for the three months ended March 31,September 30, 2019 was driven by strong demand for Maracay’s new community openings during the quartercurrent-year period as well as continued strong market fundamentals. The decreasefundamentals in average selling communities from the prior-year period was due to the timing of community openings and closings.Arizona. Pardee Homes reported an 8% decreasea 19% increase in net new home orders largely driven by a 33% decrease in monthly absorption rate, offset by a 37%17% increase in average selling communities. Pardee Homes’ monthly absorption rate remained strong at 3.2 homes per community per month, but decreased from a robust 4.9 in the prior-year period. The increase in average selling communities was a result of increased community count in theour Los Angeles, Inland Empire and San Diego markets. Net new home orders decreased 31%increased 6% at Quadrant Homes due primarily to a 32% decrease9% increase in monthly absorption rate during the current-year period as compared to the prior-year period. Quadrant Homes’The increase in monthly absorption rate of 3.5 for the three months ended March 31, 2019 was consistent with seasonal expectations but representeddue to a decreasemore stable demand environment compared to the substantially strong absorptions in the prior-year period. Trendmaker Homes’ net new home orders increased 57%38% due to a 32%35% increase in average selling communities and a 19%3% increase in monthly absorption rate. The increase in net new home orders and average selling communities was largely the result of the acquisition of a Dallas–Fort Worth-based homebuilder in the fourth quarter of 2018. During the three months ended March 31,September 30, 2019, Trendmaker Homes’Homes reported 8554 net new home orders from 13.812.5 average selling communities in Dallas–Fort Worth. The increase in Trendmaker Homes’ monthly absorption rate was due to both the addition of our Dallas–Fort Worth operations as well as a slight improvement in the monthly absorption rate in Houston. TRI Pointe Homes’ net new home orders decreased 36%increased 10% due to a 29% decrease12% increase in itsthe monthly absorption rate and a 9% decrease in average selling communities.rate. The decreaseincrease in TRI Pointe Homes’ monthly absorption rate was due bothprimarily driven by stronger market conditions in our California markets compared to the unfavorable comparison to the strong demand in the prior-year period discussed above and lower overall demand due to rising interest rates and affordability concerns in certain higher priced Northern and Southern California communities.period. Winchester Homes reported a 23% decrease40% increase in net new home orders as a result of a 27% decrease33% increase in our monthly absorption rate offset byand a 5% increase in average selling communities. The decreaseincrease in Winchester Homes’ monthly absorption rate was due to slowerstrong order demand for certain new community openings during the quarter and more favorable overall market conditions.conditions compared to the prior-year period.
Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)
As of March 31, 2019 As of March 31, 2018 Percentage ChangeAs of September 30, 2019 As of September 30, 2018 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
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Maracay238
 $139,862
 $588
 245
 $123,617
 $505
 (3)% 13 % 16 %404
 $218,424
 $541
 216
 $122,617
 $568
 87 % 78 % (5)%
Pardee Homes593
 472,729
 797
 608
 408,324
 672
 (2)% 16 % 19 %753
 542,370
 720
 698
 451,398
 647
 8 % 20 % 11 %
Quadrant Homes77
 75,599
 982
 169
 138,025
 817
 (54)% (45)% 20 %89
 77,426
 870
 129
 127,136
 986
 (31)% (39)% (12)%
Trendmaker Homes402
 196,256
 488
 244
 134,632
 552
 65 % 46 % (12)%367
 184,563
 503
 239
 143,000
 598
 54 % 29 % (16)%
TRI Pointe Homes371
 247,399
 667
 667
 474,240
 711
 (44)% (48)% (6)%451
 306,337
 679
 627
 460,700
 735
 (28)% (34)% (8)%
Winchester Homes161
 105,993
 658
 210
 130,204
 620
 (23)% (19)% 6 %248
 162,332
 655
 192
 126,374
 658
 29 % 28 %  %
Total1,842
 $1,237,838
 $672
 2,143
 $1,409,042
 $658
 (14)% (12)% 2 %2,312
 $1,491,452
 $645
 2,101
 $1,431,225
 $681
 10 % 4 % (5)%
 
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 cancelled prior to delivery of the home (as a percentage of overall orders) increased to 15% compared to 14%was 17% and 19% during the prior-year period.three-month periods ended September 30, 2019 and 2018, respectively. The dollar value of backlog was $1.2$1.5 billion as of March 31,September 30, 2019, a decreasean increase of $171.2$60.2 million, or 12%4%, compared to $1.4 billion as of March 31,September 30, 2018.  This decreaseincrease was due to a decreasean increase in backlog units of 301,211, or 14%10%, to 1,8422,312 as of March 31,September 30, 2019, compared to 2,1432,101 as of March 31,September 30, 2018, offset by a 2% increase5% decrease in the average sales price of homes in backlog to $672,000$645,000 as of March 31,September 30, 2019, compared to $658,000$681,000 as of March 31,September 30, 2018.

- 35 -



Maracay’s backlog dollar value increased 13%78% compared to the prior-year period largely due to a 16%an 87% increase in average sales price.backlog units. The increase in average sales price wasbacklog units is due to product mixstrong market conditions in Arizona and increasing prices due to favorable overall market conditions.the success of recently opened communities. Pardee Homes’ backlog dollar value increased 16%20% due to an increase in average sales price of 19%11% and an increase in backlog units of 8%. The increase in average sales price is largely due to a higher priced mix of homes in backlog in both thefrom our San Diego, and Las Vegas markets.California division. The increase in backlog units was due to the 19% increase in net new home orders for the current quarter. Quadrant Homes’ backlog dollar value decreased 45%39% as a result of a 54%31% decrease in backlog units offset byand a 20% increase12% decrease in average sales price. The decrease in backlog units was a result of starting the decrease in net new home ordersquarter with lower backlog units resulting from generally slower year over year market conditions in the Seattle area. The increase in average sales price was related to an increase in the number of homes in backlog from the core Seattle markets of King and Snohomish counties, which tend to have higher price points. Trendmaker Homes’ backlog dollar value increased 46% primarily29% due to an 65%a 54% increase in backlog units.units, offset by a 16% decrease in average sales price. The increase in backlog units and the decrease in average sales price resulted primarily from our expansion into Dallas–Fort Worth, where we had 167109 homes in backlog as of March 31, 2019.September 30, 2019 at an average sales price of $381,000 which is lower than our legacy Houston and Austin operations. TRI Pointe Homes’ backlog dollar value decreased 48%34% mainly due to a 44%28% decrease in backlog units and a 6% decrease in average sales price. The decrease in backlog units was due to a decrease in net new home orders in Northern and Southern California as a result of starting the quarter with lower demand compared to the prior-year period.backlog units. Winchester Homes’ backlog dollar value decreased 19%increased 28% due to a 23% decrease29%


increase in backlog units offset by a 6%units. The increase in average sales price. The decrease in backlog units is a result of the 23% decrease40% increase in net new home orders for the three months ended March 31, 2019 as well as the reduced number of units in backlog as of the beginning of the current-year period as compared to the prior-year period.September 30, 2019.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)
Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Percentage ChangeThree Months Ended September 30, 2019 Three Months Ended September 30, 2018 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
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
Maracay74
 $39,561
 $535
 125
 $58,455
 $468
 (41)% (32)% 14 %138
 $70,860
 $513
 137
 $66,730
 $487
 1 % 6 % 5 %
Pardee Homes242
 134,863
 557
 274
 180,470
 659
 (12)% (25)% (15)%461
 321,922
 698
 354
 224,452
 634
 30 % 43 % 10 %
Quadrant Homes44
 43,273
 983
 83
 61,305
 739
 (47)% (29)% 33 %56
 49,258
 880
 73
 65,576
 898
 (23)% (25)% (2)%
Trendmaker Homes154
 70,120
 455
 84
 41,185
 490
 83 % 70 % (7)%224
 102,821
 459
 150
 77,348
 516
 49 % 33 % (11)%
TRI Pointe Homes242
 171,791
 710
 269
 190,420
 708
 (10)% (10)%  %226
 154,737
 685
 367
 264,500
 721
 (38)% (41)% (5)%
Winchester Homes58
 33,095
 571
 89
 50,737
 570
 (35)% (35)%  %82
 46,671
 569
 124
 73,162
 590
 (34)% (36)% (4)%
Total814
 $492,703
 $605
 924
 $582,572
 $630
 (12)% (15)% (4)%1,187
 $746,269
 $629
 1,205
 $771,768
 $640
 (1)% (3)% (2)%
 
Home sales revenue decreased $89.9$25.5 million, or 15%3%, to $492.7$746.3 million for the three months ended March 31,September 30, 2019. The decrease was comprised of (i) $69.4$11.5 million related to a decrease of 11018 new homes delivered in the three months ended March 31,September 30, 2019 compared to the prior-year period, and (ii) $20.5$14.0 million related to a decrease of $25,000$11,000 in average sales price of homes delivered in the three months ended March 31,September 30, 2019 compared to the prior-year period.
Maracay had a 32% decrease in home sales revenue increased 6% due primarily to a 41% decrease5% increase in average sales price. The increase in average sales price is due to product mix. Pardee Homes’ home sales revenue increased 43% due to a 30% increase in new homes delivered.delivered and a 10% increase in average sales price. The decreaseincrease in new home deliveries washomes delivered is due to a combination of timing and the decreaseincrease in backlog units at the start of the current-year period compared to the prior-year period. Pardee Homes’ home sales revenue decreased 25% due to a 15% decrease in average sales price and a 12% decrease in new homes delivered. The decreaseincrease in average sales price was due to a product mix shift that included a lessergreater proportion of deliveries from our higher priced long-dated California assets in the current-year period. Quadrant Homes’ home sales revenue decreased by 29%25% due to a 47%23% decrease in new homes delivered, offset by a 33% increase in average sales price.delivered. The decrease in new homes delivered was due to starting the current-year period with a lower number of backlog units compared to the prior-year period. The increase in average sales price was the result of delivering more units in the core Seattle markets of King and Snohomish counties, which tend to have higher price points. Trendmaker Homes’ home sales revenue increased 70%33% due to an 83%a 49% increase in new homes delivered.delivered, offset by an 11% decrease in average sales price. The increase in new homes delivered was largely due to 5382 deliveries from our Dallas–Fort Worth operations, along with higher volume in the Austin market. TRI Pointe Homes had a 10% decrease inHomes’ home sales revenue decreased 41% due to a 10%38% decrease in new homes delivered.delivered and a 5% decrease in average sales price. The decrease in new homes delivered was driven by lower backlog units at the start of the current-year period compared to the prior-year period. Home sales revenue decreased at Winchester Homes by 35%36% due to a 35%34% decrease in new homes delivered asand a result of4% decrease in average sales price. The decrease in new homes delivered was due to lower backlog units at the start of the current-year period compared to the prior-year period.

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Homebuilding Gross Margins (dollars in thousands)
Three Months Ended March 31,Three Months Ended September 30,
2019 % 2018 %2019 % 2018 %
Home sales revenue$492,703
 100.0% $582,572
 100.0%$746,269
 100.0% $771,768
 100.0%
Cost of home sales421,536
 85.6% 450,502
 77.3%577,627
 77.4% 607,053
 78.7%
Homebuilding gross margin71,167
 14.4% 132,070
 22.7%168,642
 22.6% 164,715
 21.3%
Add: interest in cost of home sales14,191
 2.9% 14,229
 2.4%19,240
 2.6% 20,128
 2.6%
Add: impairments and lot option abandonments5,202
 1.1% 248
 0.0%1,029
 0.1% 568
 0.1%
Adjusted homebuilding gross margin(1)
$90,560
 18.4% $146,547
 25.2%$188,911
 25.3% $185,411
 24.0%
Homebuilding gross margin percentage14.4%   22.7%  22.6%   21.3%  
Adjusted homebuilding gross margin percentage(1)
18.4%   25.2%  25.3%   24.0%  
__________
(1) 
Non-GAAP financial measure (as discussed below).


Our homebuilding gross margin percentage decreasedincreased to 14.4%22.6% for the three months ended March 31,September 30, 2019 as compared to 22.7%21.3% for the prior-year period.  The decreaseincrease in gross margin percentage was due to an increase in lot option abandonments, as well as lowerhigher revenue from some of our long-datedlong-term California communities, which produce gross margins above the Company average. In addition, we increased incentives in the fourth quarter of 2018 to sell inventory homes, which impacted gross margin percentage upon delivery of those homes during the first quarter of 2019, as well as purchase accounting adjustments related to the acquisition of a Dallas-Fort Worth based building in the fourth quarter of 2018. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 18.4%25.3% for the three months ended March 31,September 30, 2019, compared to 25.2%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 most directly comparable GAAP measure.
Sales and Marketing, General and Administrative Expense (dollars in thousands)
Three Months Ended March 31, 
As a Percentage of
Home Sales Revenue
Three Months Ended September 30, 
As a Percentage of
Home Sales Revenue
2019 2018 2019 20182019 2018 2019 2018
Sales and marketing$38,989
 $38,283
 7.9% 6.6%$47,834
 $44,854
 6.4% 5.8%
General and administrative (G&A)38,597
 36,814
 7.8% 6.3%38,751
 38,109
 5.2% 4.9%
Total sales and marketing and G&A$77,586
 $75,097
 15.7% 12.9%$86,585
 $82,963
 11.6% 10.7%
 
Total sales and marketing and general and administrative (“SG&A”) as a percentage of home sales revenue increased to 15.7%11.6% for the three months ended March 31,September 30, 2019, compared to 12.9%10.7% in the prior-year period. Total SG&A expense increased $2.5$3.6 million to $77.6$86.6 million for the three months ended March 31,September 30, 2019 from $75.1$83.0 million in the prior-year period.  
Sales and marketing expense as a percentage of home sales revenue increased to 7.9%6.4% for the three months ended March 31,September 30, 2019, compared to 6.6%5.8% for the prior-year period. The increase was due primarily to advertising costs associated with the timing of current and future community openings. In addition, our ending community count increased from 131to 150 as of March 31, 2018 to 146September 30, 2019 from 125 as of March 31, 2019,September 30, 2018, resulting in higher fixed sales and marketing costs on a year over year basis. Sales and marketing expense increased to $39.0$47.8 million for the three months ended March 31,September 30, 2019 compared to $38.3$44.9 million in the prior-year period due to the higher fixed costcosts associated with a higher community count.
General and administrative (“G&A”) expense as a percentage of home sales revenue increased to 7.8%5.2% of home sales revenue for the three months ended March 31,September 30, 2019 compared to 6.3%4.9% for the prior-year period largely due to lower leverage on our G&A expense as a result of lower operating leverage duethe 3% decrease in homebuilding revenue compared to the 15% decrease in home sales revenue.same prior-year period.  G&A expense increased to $38.6$38.8 million for the three months ended

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March 31, September 30, 2019 compared to $36.8$38.1 million for the prior-year period primarily as a result of additional headcount to support future growth in our new and existing markets, including our organic expansion into the CarolinasNorth Carolina in October 2018 and our acquisition of a Dallas–Fort Worth basedWorth-based homebuilder in December 2018.
Interest
Interest, which we incurred principally to finance land acquisitions, land development and home construction, totaled $23.4$22.4 million and $21.5$23.9 million for the three months ended March 31,September 30, 2019 and 2018, respectively.  All interest incurred in both periods was capitalized.  
Income Tax
For the three months ended September 30, 2019, we recorded a tax provision of $21.9 million based on an effective tax rate of 25.8%.  For the three months ended September 30, 2018, we recorded a tax provision of $19.7 million based on an effective tax rate of 23.5%. The increase in provision for income taxes is due to a $1.1 million increase in income before income taxes to $84.7 million for the three months ended September 30, 2019, compared to $83.6 million for the prior-year period.


Financial Services Segment
Income before income taxes from our financial services operations decreased to $2.2 million for the three months ended September 30, 2019 compared to $2.3 million for the prior-year period.  This decrease is due to higher expenses related to the early execution of growth initiatives at our TRI Pointe Assurance title and escrow services and our TRI Pointe Advantage property and casualty insurance agency operations. For the three months ended September 30, 2019, expense growth outpaced revenue growth, resulting in a decrease in profitability for these financial services.
Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment
 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 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
Maracay571
 14.0
 4.5
 382
 12.6
 3.4
 49 % 11 % 32 %
Pardee Homes1,379
 43.9
 3.5
 1,294
 34.3
 4.2
 7 % 28 % (17)%
Quadrant Homes210
 6.9
 3.4
 226
 6.8
 3.7
 (7)% 1 % (8)%
Trendmaker Homes682
 38.1
 2.0
 455
 28.7
 1.8
 50 % 33 % 11 %
TRI Pointe Homes882
 29.7
 3.3
 1,133
 32.5
 3.9
 (22)% (9)% (15)%
Winchester Homes379
 14.7
 2.9
 384
 14.1
 3.0
 (1)% 4 % (3)%
Total4,103
 147.3
 3.1
 3,874
 129.0
 3.3
 6 % 14 % (6)%
Net new home orders for the nine months ended September 30, 2019 increased by 229 orders, or 6%, to 4,103, compared to 3,874 during the prior-year period.  The increase in net new home orders was due to a 14% increase in average selling communities offset by a 6% decrease in monthly absorption rates.
Maracay reported a 49% increase in net new home orders driven by a 32% increase in monthly absorption rate and an 11% increase in average selling communities. For the current nine-month period, Maracay experienced strong market conditions in Arizona, as demonstrated by a monthly absorption rate of 4.5 homes per community. Pardee Homes increased net new home orders by 7% due to a 28% increase in average community count offset by a 17% decrease in monthly absorption rate. The increase in average selling communities was a result of increased community growth in the Los Angeles, Inland Empire and San Diego markets. Overall demand for the period was strong at Pardee Homes with a monthly absorption rate of 3.5 homes per community. Net new home orders decreased 7% at Quadrant Homes due primarily to an 8% decrease in monthly absorption rate. The decrease in the monthly absorption rate at Quadrant Homes was due primarily to the substantially strong absorptions we experienced in the early months of 2018 compared to the same current-year period. Trendmaker Homes’ net new home orders increased 50% due to a 33% increase in average selling communities and an 11% increase in monthly absorption rate. The increase in net new home orders and average selling communities was largely the result of the acquisition of a Dallas–Fort Worth-based homebuilder in the fourth quarter of 2018. During the nine months ended September 30, 2019, Trendmaker Homes reported 205 net new home orders from 13.1 average selling communities in Dallas–Fort Worth. The increase in the monthly absorption rate was due to improved market conditions in Houston and Austin during the nine months ended September 30, 2019 compared to the prior-year period. TRI Pointe Homes’ net new home orders decreased 22% due to a 15% decrease in monthly absorption rate and a 9% decrease in average selling communities. The decrease in monthly absorption rates was driven primarily by activity at our core Bay Area market where we experienced stronger market conditions in the early half of 2018 compared to 2019. The decrease in average selling communities was due to the timing of community openings and closings, particularly in our Southern California market. Winchester Homes’ net new home orders decreased 1% as a result of a 3% decrease in monthly absorption rate, offset by a 4% increase in average selling communities.


New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)
 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 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
Maracay318
 $166,074
 $522
 383
 $182,134
 $476
 (17)% (9)% 10 %
Pardee Homes1,028
 651,484
 634
 1,005
 648,208
 645
 2 % 1 % (2)%
Quadrant Homes167
 162,960
 976
 241
 191,686
 795
 (31)% (15)% 23 %
Trendmaker Homes628
 289,951
 462
 389
 194,731
 501
 61 % 49 % (8)%
TRI Pointe Homes749
 519,280
 693
 983
 710,561
 723
 (24)% (27)% (4)%
Winchester Homes236
 141,361
 599
 343
 195,815
 571
 (31)% (28)% 5 %
Total3,126
 $1,931,110
 $618
 3,344
 $2,123,135
 $635
 (7)% (9)% (3)%
Home sales revenue decreased $192.0 million, or 9%, to $1.9 billion for the nine months ended September 30, 2019. The decrease was comprised of (i) $138.4 million related to a decrease in new homes delivered to 3,126 for the nine months ended September 30, 2019 from 3,344 in the prior-year period, and (ii) $53.6 million related to a $17,000, or 3%, decrease in average sales price of homes delivered to $618,000 for the nine months ended September 30, 2019, from $635,000 in the prior-year period.
Maracay home sales revenue decreased 9% due to a 17% decrease in new homes delivered, offset by a 10% increase in average sales price. The decrease in new home deliveries was due to the timing of deliveries and the decrease in backlog units at the start of the current-year period compared to the prior-year period. Pardee Homes’ home sales revenue increased 1% due to a 2% increase in new homes delivered. Quadrant Homes’ home sales revenue decreased by 15% due to a 31% decrease in new homes delivered offset by a 23% increase in average sales price. The increase in average sales price was the result of delivering more units in some core greater Puget Sound markets, which tend to have higher price points. Trendmaker Homes’ home sales revenue increased 49% due to a 61% increase in new homes delivered offset by an 8% decrease in average sales price compared to the prior year. The increase in new homes delivered was largely due to 231 deliveries from our Dallas–Fort Worth operations that were acquired in December 2018, along with higher volume in the Austin market. TRI Pointe Homes’ home sales revenue decreased 27% due to a 24% decrease in new homes delivered and a 4% decrease in average sales price. The decrease in new homes delivered was driven by a lesser number of backlog units to start the current year compared to the prior-year period, and the decrease in average sales price was related to product mix in the quarter. Home sales revenue decreased at Winchester Homes by 28% due to a 31% decrease in homes delivered offset by a 5% increase in average sales price. The decrease in new homes delivered was due to lower backlog units at the start of the current-year period compared to the prior-year period with relatively flat net new home orders in the current-year period.
Homebuilding Gross Margins (dollars in thousands)
 Nine Months Ended September 30,
 2019 % 2018 %
Home sales revenue$1,931,110
 100.0% $2,123,135
 100.0%
Cost of home sales1,573,847
 81.5% 1,661,651
 78.3%
Homebuilding gross margin357,263
 18.5% 461,484
 21.7%
Add:  interest in cost of home sales51,502
 2.7% 53,926
 2.5%
Add:  impairments and lot option abandonments6,519
 0.3% 1,425
 0.1%
Adjusted homebuilding gross margin(1)
$415,284
 21.5% $516,835
 24.3%
Homebuilding gross margin percentage18.5%   21.7%  
Adjusted homebuilding gross margin percentage(1)
21.5%   24.3%  
__________
(1)
Non-GAAP financial measure (as discussed below).


Our homebuilding gross margin percentage decreased to 18.5% for the nine months ended September 30, 2019 as compared to 21.7% for the prior-year period.  The decrease in gross margin percentage was primarily due to the mix of deliveries and increased incentives offered in the back half of 2018 and into the first half of 2019, which we offered due to slower market conditions experienced during that period. Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 21.5% for the nine months ended September 30, 2019, compared to 24.3% 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 most directly comparable GAAP measure.
Sales and Marketing, General and Administrative Expense (dollars in thousands)
 Nine Months Ended September 30, As a Percentage of
Home Sales Revenue
 2019 2018 2019 2018
Sales and marketing$133,888
 $128,881
 6.9% 6.1%
General and administrative (G&A)114,202
 111,406
 5.9% 5.2%
Total sales and marketing and G&A$248,090
 $240,287
 12.8% 11.3%
Total SG&A as a percentage of home sales revenue increased to 12.8% for the nine months ended September 30, 2019, compared to 11.3% for the prior-year period. Total SG&A expense increased $7.8 million, to $248.1 million for the nine months ended September 30, 2019 from $240.3 million in the prior-year period.  
Sales and marketing expense as a percentage of home sales revenue increased to 6.9% for the nine months ended September 30, 2019, compared to 6.1% for the prior-year period. The increase was due primarily to lower operating leverage on the fixed components of sales and marketing expenses as a result of the 9% decrease in homes sales revenue and the community count growth we have experienced in the current year, resulting in higher fixed sales and marketing costs on a year over year basis. Sales and marketing expense increased to $133.9 million for the nine months ended September 30, 2019 compared to $128.9 million in the prior-year period due to the active community count.
G&A expenses as a percentage of home sales revenue increased to 5.9% of home sales revenue for the nine months ended September 30, 2019 compared to 5.2% for the prior-year period as a result of lower operating leverage due to the 9% decrease in home sales revenue.  G&A expenses increased to $114.2 million for the nine months ended September 30, 2019 compared to $111.4 million in the prior-year period primarily as a result of additional headcount to support future growth in our existing markets.
Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $67.7 million and $67.1 million for the nine months ended September 30, 2019 and 2018, respectively.  All interest incurred in both periods was capitalized.  
Other Income (Expense), Net
Other income (expense), net for the threenine months ended March 31,September 30, 2019 and 2018 was $6.2income of $6.7 million and $0.2 million,expense of $379,000, respectively. During the three months ended March 31, 2019, we amended our existing tax sharing agreement with Weyerhaeuser Company (“Weyerhaeuser”), pursuant to which the parties agreed, among other things, that we had no further obligation to remit payment to Weyerhaeuser in connection with any potential utilization of certain deductions or losses associated with certain Weyerhaeuser entities with respect to federal and state taxes. As a result of the amendment, during the three months ended March 31, 2019, we recorded other income of $6.0 million related to the reduction of our income tax liability to Weyerhaeuser.


Income Tax
For the threenine months ended March 31,September 30, 2019, we recorded a tax provision of $24,000 based on an effective tax rate of 25.3%.  For the three months ended March 31, 2018, we recorded a tax provision of $14.7$31.0 million based on an effective tax rate of 25.5%25.8%.  For the nine months ended September 30, 2018, we recorded a tax provision of $55.5 million based on an effective tax rate of 24.5%. The decrease in provision for income taxes is due to a $57.4$105.8 million decrease in income before income taxes to $95,000$120.2 million for the threenine months ended March 31,September 30, 2019, compared to $57.5$226.0 million for the prior-year period.
Financial Services Segment
Income before income taxes from our financial services operations decreased to $756,000$5.1 million for the threenine months ended March 31,September 30, 2019 compared to $1.1$5.7 million for the prior-year period.  The decrease in financial services income for the threenine months ended March 31,September 30, 2019 compared to the prior-year period relates to the 12% decreasedecline in new homes delivered,home deliveries we have experienced, which resulted in fewer opportunities to capture financial services income. 

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income, as well as higher expenses related to the early execution of growth initiatives at our TRI Pointe Assurance title and escrow services and our TRI Pointe Advantage property and casualty insurance agency operations.  
Lots Owned or Controlled by Segment
Excluded from owned and controlled lots are those related to Note 6, Investments in Unconsolidated Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q. The table below summarizes our lots owned or controlled by segment as of the dates presented:
March 31, 
Increase
(Decrease)
September 30, 
Increase
(Decrease)
2019 2018 Amount %2019 2018 Amount %
Lots Owned              
Maracay2,272
 1,825
 447
 24 %2,095
 2,501
 (406) (16)%
Pardee Homes13,523
 14,814
 (1,291) (9)%13,631
 14,427
 (796) (6)%
Quadrant Homes854
 1,148
 (294) (26)%1,029
 1,002
 27
 3 %
Trendmaker Homes1,787
 1,503
 284
 19 %2,131
 1,393
 738
 53 %
TRI Pointe Homes2,914
 2,845
 69
 2 %2,954
 3,107
 (153) (5)%
Winchester Homes1,291
 1,555
 (264) (17)%1,188
 1,460
 (272) (19)%
Total22,641
 23,690
 (1,049) (4)%23,028
 23,890
 (862) (4)%
Lots Controlled(1)
              
Maracay738
 1,176
 (438) (37)%1,395
 710
 685
 96 %
Pardee Homes731
 799
 (68) (9)%296
 977
 (681) (70)%
Quadrant Homes694
 625
 69
 11 %398
 853
 (455) (53)%
Trendmaker Homes611
 429
 182
 42 %1,012
 428
 584
 136 %
TRI Pointe Homes927
 872
 55
 6 %2,235
 1,107
 1,128
 102 %
Winchester Homes359
 600
 (241) (40)%392
 436
 (44) (10)%
Total4,060
 4,501
 (441) (10)%5,728
 4,511
 1,217
 27 %
Total Lots Owned or Controlled(1)
26,701
 28,191
 (1,490) (5)%28,756
 28,401
 355
 1 %
__________
(1) 
As of March 31,September 30, 2019 and 2018, lots controlled represented lots that were under land or lot option contracts or purchase contracts.



Liquidity and Capital Resources
Overview
Our principal uses of capital for the threenine months ended March 31,September 30, 2019 were the repayment of debt, operating expenses, land purchases, land development, home construction and home construction.repurchases of our common stock. We used funds generated by our operations to meet our short-term working capital requirements. We monitor financing requirements to evaluate potential financing sources, including bank credit facilities and note offerings. 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 March 31,September 30, 2019, we had total liquidity of $967.6$548.9 million, including cash and cash equivalents of $148.8$130.3 million and $818.8$418.6 million of availability under our Credit Facility, as described below, 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 availability of particular assets, and our Company as a whole, to generate cash flow to cover the expected debt service.
Senior Notes
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.
In May 2016, TRI Pointe Group issued $300 million aggregate principal amount of 4.875% Senior Notes due 2021 (the “2021 Notes”) at 99.44% of their aggregate principal amount. Net proceeds of this issuance were $293.9 million, after debt issuance costs and discounts. The 2021 Notes mature on July 1, 2021 and interest is paid semiannually in arrears on January 1 and July 1.

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TRI Pointe Group and its wholly 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”) and the 4.375% Senior Notes that matured on June 15, 2019 (the “2019 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 of the 2019 Notes and the 2024 Notes 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 iswith interest payable semiannually in arrears on June 15 and December 15. During the three months ended March 31,June 30, 2019, we repurchased and cancelled an aggregaterepaid the remaining $381.9 million of principal amount of $10,000balance of the 2019 Notes.Notes upon maturity. During the year ended December 31, 2018, we repurchased and cancelled an aggregate principal amount of $68.1 million of the 2019 Notes. As of March 31, 2019 the principal amount outstanding under the 2019 Notes was $381.9 million.
Our outstanding senior notes (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. As of March 31,September 30, 2019, we were in compliance with the covenants required by our Senior Notes.
Loans Payable
On March 29, 2019, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), which amended and restated our Amended and Restated Credit Agreement, dated as of July 7, 2015. The Credit Facility (as defined below), which matures on March 29, 2023, consists of a $600 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the Credit“Credit Facility”). The Term Facility includes a 90 day90-day delayed draw provision. The Company plansprovision, which allowed us to draw the full $250 million from the Term Facility in June of 2019 in connection with the maturity of the 2019 Notes. The CompanyWe may increase the Credit Facility to not more than $1 billion in the aggregate, at itsour request, upon satisfaction of specified conditions. The Revolving Facility contains a sublimit of $75 million for letters of credit. The CompanyWe may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund itsour operations, including itsour land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates on borrowings under the Revolving 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’sour leverage ratio. Interest rates on borrowings under the Term Facility will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.


As of March 31,September 30, 2019, we had no$150 million outstanding debt under the CreditRevolving Facility with an interest rate of 3.85% per annum and $818.8there was $418.6 million of availability after considering the borrowing base provisions and outstanding letters of credit.  As of September 30, 2019, we had $250 million outstanding debt under the Term Facility with an interest rate of 3.45%. As of September 30, 2019, there was $4.7 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 remaining term of the Credit Facility.  Accrued interest, including loan commitment fees, related to the Credit Facility was $754,000 and $402,000 as of September 30, 2019 and December 31, 2018, respectively.
At MarchSeptember 30, 2019 and December 31, 20192018, we had outstanding letters of credit of $31.2 million.$31.4 million and $31.8 million, respectively.  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.
Under the 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
March 31,
 Covenant
Requirement at
March 31,
Actual at
September 30,
 Covenant
Requirement at
September 30,
Financial Covenants2019 20192019 2019
Consolidated Tangible Net Worth$1,896,730
 $1,350,036
$1,951,659
 $1,394,598
(Not less than $1.35 billion plus 50% of net income and
50% of the net proceeds from equity offerings after
December 31, 2018)
   
   
Leverage Test40.5% ≤55%
40.5% ≤55%
(Not to exceed 55%)   
   
Interest Coverage Test4.9
 ≥1.5
4.4
 ≥1.5
(Not less than 1.5:1.0)   
   
 
In addition, the Credit Facility limits the aggregate number of single family dwellings (where construction has commenced) owned by the Company or any guarantor that are not presold or model units to no more than the greater of (i) 50% of the number of housing unit closings (as defined) during the preceding 12 months; or (ii) 100% of the number of housing unit closings during the preceding 6 months. However, a failure to comply with this “Spec Unit Inventory Test” will not be an event of default or default, but will be excluded from the borrowing base as of the last day of the quarter in which the non-

- 40 -



compliancenon-compliance occurs. The Credit Facility further requires that at least 97.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.
As of March 31,September 30, 2019, we were in compliance with all of these financial covenants.
Stock Repurchase Program
On February 21, 2019, our board of directors discontinued and cancelled theour 2018 Repurchase Program and approved theour 2019 Repurchase Program, authorizing the repurchase of shares of common stock with an aggregate value of up to $100 million through March 31, 2020. Purchases of common stock pursuant to the 2019 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 under the Exchange Act. We are not obligated under the 2019 Repurchase Program to repurchase any specific number or dollar amount of shares of common stock, and we may modify, suspend or discontinue the 2019 Repurchase 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. ThroughDuring the datethree and nine months ended September 30, 2019, we repurchased and retired an aggregate of the filing of this Quarterly Report on Form 10-Q, no3,035,420 shares of our common stock have been repurchased under the 2019 Repurchase Program.Program for $41.7 million.
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):  


March 31, 2019 December 31, 2018September 30, 2019 December 31, 2018
Loans Payable$400,000
 $
Senior Notes$1,412,463
 $1,410,804
1,033,058
 1,410,804
Total debt1,412,463
 1,410,804
1,433,058
 1,410,804
Stockholders’ equity2,057,023
 2,056,924
2,111,685
 2,056,924
Total capital$3,469,486
 $3,467,728
$3,544,743
 $3,467,728
Ratio of debt-to-capital(1)
40.7% 40.7%40.4% 40.7%
      
Total debt$1,412,463
 $1,410,804
$1,433,058
 $1,410,804
Less: Cash and cash equivalents(148,782) (277,696)(130,262) (277,696)
Net debt1,263,681
 1,133,108
1,302,796
 1,133,108
Stockholders’ equity2,057,023
 2,056,924
2,111,685
 2,056,924
Net capital$3,320,704
 $3,190,032
$3,414,481
 $3,190,032
Ratio of net debt-to-net capital(2)
38.1% 35.5%38.2% 35.5%
__________
(1) 
The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
(2) 
The ratio of net debt-to-net capital is a non-GAAP financial 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 stockholders’ 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.

- 41 -



Cash Flows—ThreeNine Months Ended March 31,September 30, 2019 Compared to ThreeNine Months Ended March 31,September 30, 2018
For the threenine months ended March 31,September 30, 2019 as compared to the threenine months ended March 31,September 30, 2018, the comparison of cash flows is as follows:
Net cash used in operating activities increased by $164.8$22.2 million to $114.9$94.3 million for the threenine months ended March 31,September 30, 2019, from net cash providedused of $49.9$72.1 million for the threenine months ended March 31,September 30, 2018. The change was comprised of offsetting activity, including (i) a decrease in net income to $71,000$89.2 million for the threenine months ended March 31,September 30, 2019 compared to $42.9$170.5 million in the prior-year period, (ii) a decrease in cash collected to cash used of $6.6$18.9 million in the threenine months ended March 31,September 30, 2019 compared to cash provided of $70.4$40.6 million in the prior-year period, (iii) an increase in cash used for accrued expenses and (iii) other offsetting activity, including changesliabilities to $60.2 million in the nine months ended September 30, 2019 compared to $17.7 million in the prior-year period, offset by (iv) a decrease in cash used for real estate inventory other assets, accounts payable and accrued expenses.to $142.6 million in the nine months ended September 30, 2019 compared to $315.8 million in the prior-year period.
Net cash used in investing activities was $7.4$23.1 million for the threenine months ended March 31,September 30, 2019, compared to $3.1$26.4 million for the prior-year period.  The increasedecrease in cash used in investing activities was due mainly to increaseda decrease in purchases of property and equipment.
Net cash used in financing activities was $6.5$30.1 million for the threenine months ending March 31,ended September 30, 2019, compared to net cash provided by financing activities of $5.1$101.4 million for the same period in the prior year. The decrease in cash used was due to share repurchases of $41.7 million for the nine months ended September 30, 2019 compared to $139.3 million for the prior-year period, offset by lower net borrowings in the current year, down approximately $24.0 million from the prior-year period.
Off-Balance Sheet Arrangements and Contractual Obligations
In the ordinary course of business, we enter into purchase 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 and land banking arrangements 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.  These option contracts and land banking arrangements 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.  In some cases, however, we may be contractually obligated to complete development work even if we terminate the option to procure land or lots. As of March 31,September 30, 2019, we had $75.3$71.0 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 $662.1$730.3 million (net of deposits). See Note 7, Variable Interest Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.
Our utilization of land and lot option contracts and land banking arrangements is dependent on, among other things, the availability of land sellers or land banking firms willing to enter into such 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 March 31, 2019, we had total liquidity of $967.6 million, including cash of $148.8 million and $818.8 million of availability under the 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. 

- 42 -



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 March 31,September 30, 2019 and includes information on current projects under development where we are building and selling homes.


- 43 -Maracay

County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
Phoenix, Arizona             
City of Buckeye:             
Verrado Victory2015 98
 95
 3
 1
 15
  $373 - $405
Arroyo Seco2020 44
 
 44
 
 
  $419 - $479
City of Chandler:             
Hawthorn Manor2017 84
 78
 6
 5
 19
  $490 - $564
Mission Estates2019 26
 5
 21
 12
 5
  $537 - $598
Windermere Ranch2019 91
 3
 88
 30
 3
  $505 - $545
City of Gilbert:             
Marathon Ranch2018 63
 46
 17
 13
 37
 $520 - $563
Lakes At Annecy2019 216
 15
 201
 37
 15
 $264 - $354
Annecy P32021 250
 
 250
 
 
 $226 - $301
Lakeview Trails2019 92
 16
 76
 45
 16
 $552 - $633
Lakeview Trails II2020 68
 
 68
 
 
 $554 - $629
Copper Bend2020 38
 
 38
 6
 
 $482 - $501
Waterston2020 331
 
 331
 
 
 $487 - $775
City of Goodyear:             
Villages at Rio Paseo2018 117
 47
 70
 13
 29
  $190 - $221
Cottages at Rio Paseo2018 93
 62
 31
 10
 31
  $231 - $252
City of Mesa:             
The Vista at Granite Crossing2018 37
 37
 
 
 12
  $438 - $513
Electron at Eastmark2019 53
 20
 33
 29
 20
  $364 - $441
City of Peoria:             
Legacy at The Meadows2017 74
 68
 6
 
 2
  $425 - $451
Estates at The Meadows2017 272
 145
 127
 43
 45
  $509 - $598
Enclave at The Meadows2018 126
 53
 73
 40
 24
  $397 - $492
Deseo2019 94
 
 94
 23
 
  $504 - $598
City of Phoenix:             
Navarro Groves2018 54
 49
 5
 4
 25
  $439 - $484
Loma @ Avance2019 124
 2
 122
 39
 2
  $371 - $430
Ranger @ Avance2020 145
 
 145
 26
 
  $411 - $483
Piedmont @ Avance2019 99
 
 99
 22
 
  $498 - $513
Alta @ Avance2020 26
 
 26
 5
 
  $607 - $636
Town of Queen Creek:             
Pathfinder South At Spur Cross2020 53
 
 53
 
 
  $474 - $494
Pathfinder North At Spur Cross2020 65
 
 65
 
 
  $565 - $579
Closed CommunitiesN/A 
 
 
 
 
  
Phoenix, Arizona Total  2,833
 741
 2,092
 403
 300
  
Tucson, Arizona             
Oro Valley:             
Desert Crest - Center Pointe Vistoso2016 103
 100
 3
 1
 13
 $262 - $307
The Cove - Center Pointe Vistoso2016 83
 83
 
 
 1
 $345 - $405
Summit N & S - Center Pointe Vistoso2016 88
 88
 
 
 3
 $397 - $432
The Pinnacle - Center Pointe Vistoso2016 69
 69
 
 
 1
 $448 - $480
Tucson, Arizona Total  343
 340
 3
 1
 18
  
Maracay Total  3,176
 1,081
 2,095
 404
 318
  



Maracay
Pardee Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
Phoenix, Arizona             
City of Buckeye:             
Verrado Victory2015 98
 85
 13
 7
 5
  $373 - $405
Arroyo Seco2020 44
 
 44
 
 
  $406 - $458
City of Chandler:             
Hawthorn Manor2017 84
 66
 18
 14
 7
  $490 - $564
Mission Estates2019 26
 
 26
 7
 
  $530 - $590
Windermere Ranch2019 91
 
 91
 7
 
  $499 - $539
City of Gilbert:             
Marathon Ranch2018 63
 19
 44
 27
 10
 $515 - $558
Lakes At Annecy2019 216
 
 216
 5
 
 $250 - $350
Annecy P32020 250
 
 250
 
 
 $226 - $301
Lakeview Trails2019 92
 
 92
 38
 
 $528 - $603
Copper Bend2020 38
 
 38
 
 
 $451 - $484
Hamstra Assemblage2020 332
 
 332
 
 
 $470 - $750
City of Goodyear:             
Villages at Rio Paseo2018 117
 24
 93
 9
 6
  $190 - $220
Cottages at Rio Paseo2018 93
 38
 55
 12
 7
  $231 - $251
City of Mesa:             
The Vista at Granite Crossing2018 37
 31
 6
 6
 6
  $438 - $513
Electron at Eastmark2019 53
 
 53
 20
 
  $361 - $438
City of Peoria:             
Legacy at The Meadows2017 74
 68
 6
 
 2
  $425 - $451
Estates at The Meadows2017 272
 114
 158
 46
 14
  $499 - $576
Enclave at The Meadows2018 126
 32
 94
 21
 3
  $375 - $470
Deseo2019 94
 
 94
 
 
  $501 - $583
City of Phoenix:             
Navarro Groves2018 54
 31
 23
 18
 7
  $439 - $484
Loma at Avance2019 124
 
 124
 
 
  $352 - $412
Ranger at Avance2019 143
 
 143
 
 
  $398 - $466
Piedmont at Avance2019 101
 
 101
 
 
  $475 - $495
Alta at Avance2019 26
 
 26
 
 
  $595 - $625
Town of Queen Creek:             
Spur Cross2020 118
 
 118
 
 
  $454 - $544
Closed CommunitiesN/A 
 
 
 
 
  
Phoenix, Arizona Total  2,766
 508
 2,258
 237
 67
  
Tucson, Arizona             
Oro Valley:             
Desert Crest - Center Pointe Vistoso2016 103
 90
 13
 1
 3
 $262 - $307
The Cove - Center Pointe Vistoso2016 83
 83
 
 
 1
 $345 - $405
Summit N & S - Center Pointe Vistoso2016 88
 88
 
 
 3
 $397 - $432
The Pinnacle - Center Pointe Vistoso2016 69
 68
 1
 
 
 $448 - $480
Tucson, Arizona Total  343
 329
 14
 1
 7
  
Maracay Total  3,109
 837
 2,272
 238
 74
  
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
California             
San Diego County:             
Almeria2017 80
 80
 
 
 5
 $1,440 - $1,560
Vista Santa Fe2019 44
 
 44
 17
 
 $1,760 - $1,950
Sendero2019 112
 35
 77
 46
 35
 $1,150 - $1,365
Terraza2019 81
 29
 52
 29
 29
 $1,260 - $1,400
Carmel2019 105
 21
 84
 26
 21
 $1,380 - $1,510
Vista Del Mar2019 79
 17
 62
 17
 17
 $1,530 - $1,730
Pacific Highlands Ranch Future2020 115
 
 115
 
 
 TBD
Sandstone2018 81
 81
 
 
 32
 $640 - $710
Lake Ridge2018 129
 71
 58
 11
 37
 $710 - $860
Veraz2018 111
 31
 80
 4
 21
 $380 - $465
Moderna2018 44
 44
 
 
 34
 $355 - $440
Marea2020 143
 
 143
 
 
 $370 - $470
Solmar2019 74
 
 74
 8
 
 $365 - $465
Solmar Sur2019 108
 
 108
 
 
 $365 - $465
PA61 Townhomes2021 170
 
 170
 
 
 TBD
MeadowoodTBD 844
 
 844
 
 
 $390 - $630
South Otay MesaTBD 893
 
 893
 
 
 TBD
Los Angeles County:             
Verano2017 95
 49
 46
 8
 12
 $575 - $670
Arista2017 143
 82
 61
 11
 14
 $725 - $790
Cresta2018 67
 30
 37
 4
 20
 $790 - $890
Lyra2019 84
 14
 70
 21
 14
  $650 - $720
Sola2019 104
 31
 73
 38
 31
  $545 - $600
Skyline Ranch FutureTBD 882
 
 882
 
 
  $550 - $810
Riverside County:             
Vantage2016 101
 101
 
 
 2
 $390 - $410
Aura2017 100
 100
 
 
 3
 $370 - $385
Starling2017 68
 60
 8
 5
 20
 $425 - $440
Canyon Hills Future 70 x 115TBD 125
 
 125
 
 
 TBD
Westlake2020 163
 
 163
 
 
 $310 - $325
Elara2016 260
 234
 26
 24
 32
 $310 - $345
Daybreak2017 159
 93
 66
 33
 19
 $350 - $370
Cascade2017 194
 137
 57
 18
 37
 $330 - $345
Abrio2018 113
 53
 60
 24
 21
 $400 - $435
Beacon2018 106
 54
 52
 19
 36
 $485 - $525
Alisio2019 84
 30
 54
 18
 30
 $295 - $330
Vita2019 113
 17
 96
 6
 17
 $310 - $335
Avid2019 69
 12
 57
 8
 12
 $340 - $365
Elan2019 102
 6
 96
 15
 6
 $400 - $420
Mira2019 90
 8
 82
 5
 8
 $365 - $395
Sundance Future Active AdultTBD 330
 
 330
 
 
 TBD
Avena2018 84
 45
 39
 10
 20
 $450 - $475
Tamarack2018 84
 71
 13
 5
 16
 $480 - $520
Braeburn2018 82
 25
 57
 29
 17
 $405 - $440
Canvas2018 89
 33
 56
 30
 25
 $390 - $415
Kadence2018 85
 26
 59
 30
 18
 $410 - $425
Newpark2018 93
 25
 68
 17
 17
 $440 - $485
Easton2018 92
 23
 69
 14
 18
 $465 - $520
Tournament Hills FutureTBD 268
 
 268
 
 
 TBD
Banning2020 4,348
 
 4,348
 
 
 TBD


- 44 -



Pardee Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
California             
San Diego County:             
Almeria2017 80
 80
 
 
 5
 $1,440 - $1,560
Vista Santa Fe2019 44
 
 44
 8
 
 $1,760 - $1,900
Sendero2019 112
 
 112
 56
 
 $1,150 - $1,300
Terraza2019 81
 
 81
 30
 
 $1,260 - $1,370
Carmel2019 105
 
 105
 27
 
 $1,380 - $1,490
Vista Del Mar2019 79
 
 79
 22
 
 $1,530 - $1,720
Pacific Highlands Ranch Future2020 115
 
 115
 
 
 $1,800 - $1,900
Sandstone2018 81
 63
 18
 10
 14
 $640 - $710
Lake Ridge2018 129
 50
 79
 13
 16
 $710 - $860
Veraz2018 111
 15
 96
 3
 5
 $380 - $460
Moderna2018 44
 18
 26
 6
 8
 $355 - $440
Marea2020 135
 
 135
 
 
 $370 - $470
Solmar2019 74
 
 74
 
 
 $365 - $440
Solmar Sur2019 108
 
 108
 
 
 $365 - $440
MeadowoodTBD 845
 
 845
 
 
 $290 - $590
South Otay MesaTBD 893
 
 893
 
 
 TBD
Los Angeles County:             
Verano2017 95
 45
 50
 4
 8
 $565 - $670
Arista2017 143
 75
 68
 3
 7
 $700 - $785
Cresta2018 67
 14
 53
 10
 4
 $790 - $890
Lyra2019 84
 
 84
 10
 
  $648 - $720
Sola2019 73
 
 73
 34
 
  $545 - $590
Skyline Ranch FutureTBD 913
 
 913
 
 
  $550 - $810
Riverside County:             
Vantage2016 101
 100
 1
 
 1
 $390 - $410
Aura2017 100
 100
 
 
 3
 $370 - $385
Starling2017 68
 49
 19
 4
 9
 $425 - $430
Canyon Hills Future 70 x 115TBD 125
 
 125
 
 
 TBD
Westlake2020 163
 
 163
 
 
 $318 - $325
Elara2016 260
 213
 47
 14
 11
 $300 - $330
Daybreak2017 159
 83
 76
 5
 9
 $360 - $385
Cascade2017 209
 118
 91
 8
 18
 $325 - $340
Abrio2018 98
 37
 61
 11
 5
 $400 - $420
Beacon2018 106
 27
 79
 21
 9
 $465 - $520
Alisio2019 84
 
 84
 28
 
 $300 - $330
Vita2019 111
 
 111
 17
 
 $310 - $335
Avid2019 72
 
 72
 14
 
 $340 - $365
Elan2019 101
 
 101
 6
 
 $410 - $440
Mira2019 90
 
 90
 5
 
 $375 - $400
Sundance Future Active AdultTBD 330
 
 330
 
 
 TBD
Avena2018 84
 32
 52
 8
 7
 $450 - $475
Tamarack2018 84
 57
 27
 6
 2
 $470 - $520
Braeburn2018 82
 14
 68
 8
 6
 $420 - $450
Canvas2018 89
 12
 77
 12
 4
 $400 - $425
Kadence2018 85
 10
 75
 7
 2
 $420 - $440
Newpark2018 93
 11
 82
 9
 3
 $450 - $495
Easton2018 92
 7
 85
 8
 2
 $475 - $530
Tournament Hills FutureTBD 268
 
 268
 
 
 TBD
Banning2020 4,344
 
 4,344
 
 
 TBD
San Joaquin County:             

- 45 -




San Joaquin County:           
Bear CreekTBD 1,252
 
 1,252
 
 
 TBDTBD 1,252
 
 1,252
 
 
 TBD
Closed Communities 
 
 
 
 
 
California Total 13,061
 1,230
 11,831
 427
 158
  13,242
 1,768
 11,474
 550
 696
 
Nevada                      
Clark County:                      
North Peak2015 176
 176
 
 
 1
 $312 - $3702015 176
 176
 
 
 1
 $312 - $370
Castle Rock2015 183
 181
 2
 2
 2
 $365 - $4552015 183
 183
 
 
 4
 $365 - $455
Escala2016 64
 64
 
 
 1
  $520 - $5902016 64
 64
 
 
 1
  $520 - $590
Strada2017 140
 59
 81
 7
 
  $425 - $4802017 83
 65
 18
 15
 6
  $425 - $490
Strada 2.02019 92
 
 92
 9
 
  $430 - $545
Linea2018 123
 58
 65
 33
 10
 $360 - $4002018 123
 94
 29
 17
 46
  $365 - $405
Strada 2.02019 35
 
 35
 
 
 $425 - $480
Linea II2020 79
 
 79
 
 
 $360 - $400
Inspirada Townhomes2020 114
 
 114
 
 
 TBD
Arden2020 79
 
 79
 
 
  $360 - $400
Capri2020 114
 
 114
 
 
  TBD
Arden 2.02021 154
 
 154
 
 
  TBD
Capri 2.02021 214
 
 214
 
 
  TBD
Meridian2016 62
 62
 
 
 1
  $595 - $6902016 62
 62
 
 
 1
  $595 - $690
Pebble Estate FutureTBD 8
 
 8
 
 
  TBDTBD 8
 
 8
 
 
 TBD
Encanto2016 51
 50
 1
 
 1
  $475 - $5302016 51
 51
 
 
 2
  $475 - $530
Luma2018 63
 49
 14
 10
 8
  $490 - $5302018 63
 63
 
 
 22
  $490 - $530
Evolve2019 74
 
 74
 
 
  $3002019 74
 
 74
 35
 
  $300 - $325
Corterra2018 112
 10
 102
 6
 7
  $465 - $5502018 53
 18
 35
 13
 15
  $450 - $550
Highline2020 59
 
 59
     
Keystone2017 70
 66
 4
 2
 3
  $465 - $5502017 70
 69
 1
 1
 6
  $465 - $550
Cobalt2017 124
 51
 73
 8
 5
  $380 - $4552017 107
 68
 39
 8
 22
  $380 - $455
Onyx2018 71
 15
 56
 14
 1
  $450 - $4852018 88
 40
 48
 12
 26
  $460 - $490
Axis2017 52
 36
 16
 11
 3
  $860 - $1,1252017 52
 49
 3
 1
 16
  $860 - $1,125
Axis at the Canyons2019 26
 
 26
 2
 
  $875 - $9052019 26
 1
 25
 13
 1
  $780 - $905
Midnight Ridge2019 104
 
 104
 
 
  $540 - $5852019 104
 
 104
 10
 
  $510 - $630
Pivot2017 88
 54
 34
 11
 10
  $405 - $4702017 88
 76
 12
 
 32
  $405 - $470
Strada at Pivot2017 27
 26
 1
 1
 1
  $450 - $4802017 27
 27
 
 9
 2
  $450 - $480
Nova Ridge2017 108
 44
 64
 20
 5
  $680 - $8402017 81
 60
 21
 7
 21
  $680 - $840
Nova Ridge at the Cliffs2019 27
 
 27
 6
 
  $680 - $840
Tera Luna2018 116
 9
 107
 6
 5
  $545 - $6602018 116
 20
 96
 12
 16
  $545 - $660
Indogo2018 202
 32
 170
 10
 10
  $315 - $3602018 202
 61
 141
 12
 39
  $300 - $355
Larimar2018 170
 8
 162
 5
 4
  $380 - $4202018 106
 24
 82
 7
 20
 $350 - $405
Blackstone2018 140
 11
 129
 18
 6
  $405 - $5002018 105
 36
 69
 12
 31
 $415 - $500
35 x 90 ProductTBD 140
 
 140
 
 
 TBD
Cirrus2019 54
 
 54
 
 
  $350 - $3752019 54
 2
 52
 4
 2
 $360 - $395
Silverado2020 305
 
 305
 
 
 TBD
Sandalwood2020 117
 
 117
 
 
  $685 - $8152020 116
 
 116
 
 
 $685 - $815
Nevada Total 2,753
 1,061
 1,692
 166
 84
  3,466
 1,309
 2,157
 203
 332
 
Pardee Total 15,814
 2,291
 13,523
 593
 242
  16,708
 3,077
 13,631
 753
 1,028
 




- 46 -



Quadrant Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
Washington                          
Snohomish County:                      
Grove North, Bothell2019 43
 
 43
 
 
 $765 - $9002019 43
 5
 38
 6
 5
 $770 - $880
Grove South, Bothell2019 9
 
 9
 
 
 $785 - $8202019 9
 1
 8
 4
 1
 $770 - $820
King County:                      
Vareze, Kirkland2019 82
 
 82
 
 
 $700 - $9002020 82
 
 82
 
 
 $690 - $880
Inglewood Landing, Sammamish2019 21
 1
 20
 9
 1
 $1,115 - $1,2952019 21
 15
 6
 5
 15
 $1,115 - $1,295
Kirkwood Terrace, Sammamish2018 12
 8
 4
 2
 3
 $1,800 - $1,9002018 12
 11
 1
 1
 6
 $1,800
English Landing P1, Redmond2018 50
 44
 6
 5
 7
 $1,245
Cedar Landing, North Bend2019 138
 
 138
 14
 
 $740 - $8802019 138
 4
 134
 30
 4
 $740 - $880
Monarch Ridge, Sammamish2019 59
 
 59
 
 
 $970 - $1,1352019 59
 
 59
 8
 
 $970 - $1,245
Overlook at Summit Park, Maple Valley2019 126
 1
 125
 13
 1
 $590 - $7002019 126
 17
 109
 15
 17
 $570 - $750
Ray Meadows, Redmond2018 27
 14
 13
 12
 4
 $1,065
Aurea, Sammamish2019 41
 
 41
 
 
 $710 - $8602019 41
 1
 40
 2
 1
 $675 - $846
Aldea, Newcastle2019 129
 11
 118
 8
 11
 $695 - $9252019 129
 30
 99
 14
 30
 $665 - $900
Lario, Bellevue2019 46
 
 46
 
 
 $795 - $1,1252020 46
 
 46
 
 
 $765 - $1,030
Soundview, Federal Way2018 21
 4
 17
 6
 
 $531 - $660
Lakeview Crest, Renton2020 17
 
 17
 
 
 $1,450 - $1,620
Eagles Glen, Sammamish2020 10
 
 10
 
 
 $1,100 - $2,0002020 10
 
 10
 
 
 $1,100 - $1,700
Proctor Willows (Mira), Redmond2023 173
 
 173
 
 
 $680 - $890
Perrinville Townhomes, Lynnwood2021 42
 
 42
 
 
 $535 - $655
Finn Meadows, Kirkland2020 5
 
 5
 
 
 $900 - $1,0492020 10
 
 10
 
 
 $880 - $1,100
Pierce County:           
Harbor Hill S-5/6, Gig Harbor2017 72
 69
 3
 3
 6
 $493
Hazelwood Gardens, Newcastle2021 15
 
 15
 
 
 $1,100 - $1,260
Kitsap County:                      
Lone Pine, Poulsbo2019 15
 
 15
 
 
 $473 - $5302019 15
 6
 9
 4
 6
 $474 - $530
Winslow Grove, Bainbridge Island2018 19
 4
 15
 5
 2
 $1,042 - $1,142
Blue Heron, Poulsbo2021 85
 
 85
 
 
 $474 - $6492021 85
 
 85
 
 
 $489 - $664
Poulsbo Meadows, Poulsbo2021 46
 
 46
 
 
 $494 - $530
Closed Communities 
 
 
 
 9
 N/A 
 
 
 
 82
 N/A
Washington Total 1,010
 156
 854
 77
 44
  1,119
 90
 1,029
 89
 167
 
Quadrant Total 1,010
 156
 854
 77
 44
  1,119
 90
 1,029
 89
 167
 








Trendmaker Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
Texas             
Brazoria County:             
Pomona, Manvel2015 49
 47
 2
 1
 12
 $446 - $489
Rise Meridiana2016 47
 39
 8
 3
 9
 $292 - $350
Fort Bend County:             
Cross Creek Ranch 60', Fulshear2013 34
 3
 31
 13
 8
 $415 - $500
Cross Creek Ranch 65', Fulshear2013 77
 47
 30
 4
 13
 $442 - $559
Cross Creek Ranch 70', Fulshear2013 89
 67
 22
 12
 15
 $510 - $587
Cross Creek Ranch 80', Fulshear2013 63
 41
 22
 15
 16
 $600 - $655
Cross Creek Ranch 90', Fulshear2013 37
 30
 7
 1
 2
 $695 - $829
Fulshear Run 1/2 Acre, Richmond2016 145
 47
 98
 1
 16
 $573 - $699
Harvest Green 75', Richmond2015 53
 37
 16
 7
 6
 $449 - $574
Sienna Plantation 85', Missouri City2015 54
 35
 19
 1
 5
 $546 - $717
Grayson Woods 60'TBD 17
 (9) 26
 
 
 $400 - $480
Grayson Woods 70'TBD 10
 
 10
 4
 
 $480 - $555
Katy GastonTBD 129
 
 129
 
 
 TBD
Harris County:             
The Groves, Humble2015 117
 86
 31
 6
 14
 $298 - $360
Lakes of Creekside2015 38
 26
 12
 2
 10
 $460 - $611
Balmoral 50'2019 24
 1
 23
 4
 1
 $270 - $351
Bridgeland '80, Cypress2015 118
 91
 27
 14
 15
 $555 - $683
Bridgeland 70'2018 41
 13
 28
 6
 6
 $511 - $574
Villas at Bridgeland 50'2018 48
 13
 35
 1
 11
 $356 - $409
Elyson 70', Cypress2016 20
 20
 
 
 2
 $463 - $482
Falls at Dry Creek2019 7
 
 7
 3
 
 TBD
Hidden Arbor, Cypress2015 129
 102
 27
 
 
 $419 - $599
Clear Lake, Houston2015 722
 508
 214
 54
 75
 $350 - $698
Montgomery County:             
Northgrove, TomballTBD 25
 7
 18
 
 
 TBD
Bender's Landing Estates, Spring2014 104
 104
 
 
 13
 $553 - $555
The Woodlands, Creekside Park2015 127
 104
 23
 13
 38
 $423 - $729
Royal Brook, Porter2018 25
 1
 24
 2
 1
 $393 - $479
Waller County:             
LakeHouse2019 350
 12
 338
 28
 12
 $263 - $575
Williamson County:             
Crystal Falls2016 29
 25
 4
 
 
 $150
Rancho Sienna 60'2016 51
 32
 19
 4
 14
 $339 - $446
Rancho Sienna 80'2018 5
 5
 
 
 3
 $456 - $519
Highlands at Mayfield Ranch 50'2018 46
 23
 23
 8
 15
 $282 - $375
Highlands at Mayfield Ranch 60'2018 23
 3
 20
 7
 11
 $335 - $406
Rancho Sienna 50'2019 38
 3
 35
 4
 3
 $291 - $394
Palmera Ridge2019 30
 7
 23
 20
 7
 $272 - $344
Hays County:             
Belterra 60', Austin2017 36
 41
 (5) 
 10
 $419 - $458
Belterra 80', Austin2016 37
 37
 
 
 3
 $552 - $562
Headwaters, Dripping Springs2017 30
 30
 
 
 7
 $453 - $485
6 Creeks 50' Section 1 & 22019 35
 
 35
 
 
 $269
6 Creeks 60' Section 1 & 22019 15
 
 15
 
 
 $328
Travis County:             
Lakes Edge 70'2018 45
 27
 18
 13
 19
 $645 - $830
Lakes Edge 80'2018 14
 7
 7
 7
 3
 $742 - $792
Turner's Crossing (Land)TBD 
 
 324
 
 
 TBD




- 47 -



Trendmaker Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
Texas             
Brazoria County:             
Pomona, Manvel2015 49
 37
 12
 3
 2
 $422 - $489
Rise Meridiana2016 47
 31
 16
 1
 1
 $292 - $373
Fort Bend County:             
Cross Creek Ranch 60', Fulshear2013 48
 31
 17
 6
 
 $399 - $500
Cross Creek Ranch 65', Fulshear2013 89
 71
 18
 7
 7
 $442 - $557
Cross Creek Ranch 70', Fulshear2013 72
 50
 22
 11
 4
 $510 - $609
Cross Creek Ranch 80', Fulshear2013 54
 30
 24
 16
 3
 $600 - $655
Cross Creek Ranch 90', Fulshear2013 37
 33
 4
 1
 1
 $695 - $759
Fulshear Run 1/2 Acre, Richmond2016 54
 33
 21
 11
 2
 $573 - $679
Harvest Green 75', Richmond2015 44
 37
 7
 4
 2
 $446 - $543
Sienna Plantation 85', Missouri City2015 54
 32
 22
 1
 2
 $546 - $661
Grayson Woods 60'TBD 10
 
 10
 
 
 TBD
Grayson Woods 70'TBD 8
 
 8
 
 
 TBD
Harris County:             
The Groves, Humble2015 117
 77
 40
 5
 6
 $483 - $511
Lakes of Creekside2015 38
 17
 21
 7
 1
 $534 - $611
Balmoral 50'2019 24
 
 24
 
 
 TBD
Bridgeland '80, Cypress2015 147
 127
 20
 5
 2
 $549 - $708
Bridgeland 70'2018 41
 8
 33
 5
 1
 $511 - $574
Villas at Bridgeland 50'2018 48
 4
 44
 2
 2
 $370 - $409
Elyson 70', Cypress2016 20
 18
 2
 2
 
 $463 - $482
Falls at Dry Creek2019 1
 
 1
 
 
 TBD
Clear Lake, Houston2015 778
 491
 287
 52
 18
 $395 - $717
Montgomery County:             
Northgrove, Tomball2015 25
 7
 18
 
 
 TBD
Bender's Landing Estates, Spring2014 104
 95
 9
 5
 4
 $553 - $596
The Woodlands, Creekside Park2015 126
 88
 38
 13
 14
 $423 - $699
Royal Brook, Porter2019 25
 
 25
 2
 
 $386 - $479
Waller County:             
LakeHouseTBD 350
 
 350
 
 
 $260 - $575
Williamson County:             
Crystal Falls2016 29
 25
 4
 
 
 TBD
Rancho Sienna 60'2016 51
 22
 29
 4
 4
 $335 - $420
Rancho Sienna 80'2018 5
 2
 3
 3
 
 $456 - $519
Highlands at Mayfield Ranch 50'2018 36
 12
 24
 8
 4
 $280 - $330
Highlands at Mayfield Ranch 60'2018 23
 5
 18
 4
 4
 $340 - $407
Rancho Sienna 50'2019 30
 
 30
 2
 
 $330 - $372
Palmera Ridge2019 30
 
 30
 12
 
 $270 - $326
Hays County:             
Belterra 60', Austin2017 36
 32
 4
 4
 6
 $445 - $489
Belterra 80', Austin2016 37
 35
 2
 1
 1
 $600
Headwaters, Dripping Springs2017 30
 26
 4
 4
 3
 $453 - $485
6 Creeks 50' Section 1 & 22019 35
 
 35
 
 
 TBD
6 Creeks 60' Section 1 & 22019 15
 
 15
 
 
 TBD
Travis County:             
Lakes Edge 70'2018 45
 17
 28
 27
 4
 $645 - $830
Lakes Edge 80'2018 14
 5
 9
 7
 1
 $742 - $792
Collin County:             
Miramonte, Frisco2016 62
 40
 22
 8
 4
 $475 - $560
Retreat at Craig Ranch, McKinney2012 165
 145
 20
 4
 2
 $375 - $415

- 48 -




Collin County:           
Miramonte, Frisco2016 62
 49
 13
 5
 13
 $475 - $560
Retreat at Craig Ranch, McKinney2012 165
 152
 13
 4
 9
 $375 - $415
Dallas County:                      
Vineyards, Rowlett2017 34
 15
 19
 6
 3
 $368 - $4802017 40
 22
 18
 9
 10
 $368 - $480
Denton County:                      
Glenview, Frisco2017 50
 13
 37
 7
 5
 $345 - $4852017 50
 25
 25
 4
 17
 $345 - $485
Paloma Creek, Little Elm2015 267
 151
 116
 16
 7
 $275 - $390 267
 169
 98
 9
 25
 $275 - $390
Parks at Legacy, Prosper2017 49
 18
 31
 8
 4
 $384 - $4952017 55
 28
 27
 5
 14
 $384 - $495
Shadow Creek, Hickory Creek2016 40
 38
 2
 1
 2
 $360 - $4002016 40
 40
 
 
 4
 $360 - $400
Valencia, Little Elm2016 76
 42
 34
 8
 5
 $350 - $4442016 82
 51
 31
 5
 14
 $350 - $444
Villages of Carmel, Denton2017 94
 46
 48
 33
 4
 $290 - $3602017 96
 71
 25
 13
 29
 $290 - $360
Kaufman County:                      
Park Trails, Forney2015 85
 80
 5
 2
 7
 $240 - $2802015 85
 84
 1
 
 11
 $240 - $280
Rockwall County:                      
Heath Golf and Yacht, Heath2016 91
 59
 32
 9
 2
 $294 - $4902016 100
 68
 32
 9
 11
 $294 - $490
Woodcreek, Fate2017 83
 65
 18
 13
 3
 $267 - $3302017 107
 81
 26
 12
 19
 $267 - $330
Tarrant County:                      
Chisholm Trail Ranch, Fort Worth2017 70
 45
 25
 15
 1
 $270 - $3752017 90
 62
 28
 7
 18
 $270 - $375
Lakes of River Trails, Fort Worth2011 143
 123
 20
 20
 2
 $317 - $4162011 158
 140
 18
 16
 19
 $317 - $416
Ventana, Benbrook2017 61
 31
 30
 17
 2
 $318 - $4302017 78
 47
 31
 11
 18
 $318 - $430
Closed CommunitiesN/A 
 
 
 
 2
 N/A 
 
 
 
 2
 
Texas Total 4,196
 2,409
 1,787
 402
 154
  4,608
 2,801
 2,131
 367
 628
 
Trendmaker Homes Total 4,196
 2,409
 1,787
 402
 154
  4,608
 2,801
 2,131
 367
 628
 



- 49 -




TRI Pointe Homes
 
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
Southern California                          
Orange County:                      
Aria, Rancho Mission Viejo2016 151
 148
 3
 2
 2
  $687 - $7192016 151
 151
 
 
 5
  $687 - $719
Viridian2018 72
 21
 51
 12
 4
  $895 - $9822018 72
 37
 35
 22
 20
  $895 - $994
Sterling Row Townhomes, Irvine2017 96
 96
 
 
 1
  $572 - $7792017 96
 96
 
 
 1
  $572 - $779
Varenna at Orchard Hills, Irvine2016 89
 79
 10
 5
 6
  $1,225 - $1,3262016 111
 93
 18
 6
 20
  $1,225 - $1,343
Alston, Anaheim2017 75
 72
 3
 3
 12
  $828 - $8692017 75
 75
 
 
 15
  $828 - $869
StrataPointe, Buena Park2017 149
 133
 16
 15
 8
  $564 - $7202017 149
 148
 1
 1
 23
  $549 - $737
Lyric2019 70
 15
 55
 10
 15
  $790 - $9372019 70
 28
 42
 8
 28
  $790 - $943
Citron at Bedford2019 35
 7
 28
 11
 7
  $383 - $4112019 101
 23
 78
 22
 23
  $370 - $415
Windbourne2020 19
 
 19
 13
 
  $1,026 - $1,201
Cerise2020 8
 
 8
 
 
  TBD
Violet2020 11
 
 11
 
 
  TBD
Claret2020 6
 
 6
 
 
  TBD
San Diego County:                      
Prism at Weston2018 142
 42
 100
 13
 8
  $574 - $6322018 142
 69
 73
 27
 35
  $574 - $632
Talus at Weston2018 63
 37
 26
 9
 5
  $680 - $7302018 63
 56
 7
 2
 24
  $680 - $730
Riverside County:                      
Terrassa Court, Corona2015 94
 94
 
 
 1
  $421 - $4992015 94
 94
 
 
 1
  $421 - $499
Terrassa Villas, Corona2015 52
 49
 3
 1
 3
  $491 - $5492015 52
 52
 
 
 6
  $491 - $554
Cassis at Rancho Soleo2020 79
 
 79
 
 
  TBD2020 79
 
 79
 
 
  TBD
Cava at Rancho Soleo2020 63
 
 63
 
 
  TBD2020 63
 
 63
 
 
  TBD
Cerro at Rancho Soleo2020 103
 
 103
 
 
  TBD2020 103
 
 103
 
 
  TBD
Los Angeles County:                      
VuePointe, El Monte2017 102
 98
 4
 1
 11
  $479 - $5872017 102
 102
 
 
 15
  $479 - $654
Bradford at Rosedale, Azusa2017 52
 52
 
 
 1
  $816 - $906
Bradford @ Rosedale, Azusa2017 52
 52
 
 
 1
  $816 - $906
Lucera at Aliento2017 67
 66
 1
 
 4
  $622 - $6482017 67
 67
 
 
 5
  $622 - $648
Tierno at Aliento2017 63
 49
 14
 
 
  $667 - $6952017 63
 49
 14
 
 
  $667 - $695
Tierno II at Aliento2018 63
 15
 48
 7
 5
  $642 - $7032018 63
 26
 37
 8
 16
  $642 - $708
Paloma at West Creek2018 155
 67
 88
 13
 17
  $453 - $5162018 155
 93
 62
 30
 43
  $444 - $530
Mystral2019 78
 
 78
 17
 
  $635 - $6792019 78
 21
 57
 22
 21
  $635 - $684
Celestia2019 72
 
 72
 20
 
  $597 - $6262019 72
 30
 42
 16
 30
  $597 - $626
San Bernardino County:                      
St. James at Park Place, Ontario2015 125
 119
 6
 
 
  $509 - $5602015 125
 119
 6
 6
 
  $509 - $560
St. James III at Park Place, Ontario2018 82
 43
 39
 11
 6
  $509 - $5602018 82
 65
 17
 13
 28
  $509 - $560
Ivy at The Preserve2020 113
 
 113
 
 
  TBD2020 113
 
 113
 2
 
  $395 - $440
Hazel at The Preserve2020 133
 
 133
 
 
  TBD2020 133
 
 133
 2
 
  $360 - $430
Tempo at The Resort2019 80
 
 80
 
 
  TBD2020 80
 
 80
 
 
  TBD
Southern California Total 2,518
 1,302
 1,216
 150
 116
  2,650
 1,546
 1,104
 200
 360
 
Northern California                      
Contra Costa County:                      
Wynstone at Barrington, Brentwood2017 92
 83
 9
 5
 6
  $536 - $6752017 92
 92
 
 
 15
  $640 - $675
Greyson Place2019 44
 
 44
 1
 
  $910 - $9802019 44
 7
 37
 9
 7
  $805 - $905
Santa Clara County:                      
Madison Gate2018 65
 30
 35
 
 6
  $815 - $1,1342018 65
 30
 35
 13
 6
  $729 - $1,134
Luchessa2019 49
 
 49
 
 
  $755 - $799
The Grove2019 64
 
 64
 
 
  $850 - $920
The Heights2020 25
 
 25
 
 
  TBD
Blanc at Glen Loma2019 49
 
 49
 5
 
  $765 - $815
Noir at Glen Loma2019 64
 
 64
 6
 
  $870 - $920
Lotus at Urban Oak2022 43
 
 43
 
 
  $930 - $1,054
Solano County:                      
Bloom at Green Valley, Fairfield2018 91
 38
 53
 8
 7
  $530 - $5702018 91
 52
 39
 22
 21
  $548 - $588
Harvest at Green Valley, Fairfield2018 56
 33
 23
 3
 5
  $550 - $6302018 56
 41
 15
 8
 13
  $550 - $630
Lantana, Fairfield2019 133
 
 133
 23
 
  $455 - $490
San Joaquin County:           
Sundance, Mountain House2015 113
 108
 5
 
 
  $648 - $721
Sundance II, Mountain House2017 138
 65
 73
 8
 6
  $648 - $721

- 50 -




Lantana, Fairfield2019 133
 29
 104
 28
 29
  $478 - $523
San Joaquin County:           
Sundance, Mountain House2015 113
 108
 5
 
 
  $648 - $721
Sundance II, Mountain House2017 138
 82
 56
 14
 23
  $648 - $721
Alameda County: 
 
 
 
 
            
Commercial, Alameda Landing2019 2
 
 2
 2
 
 $5002019 2
 2
 
 
 2
 $550
Blackstone at the Cannery, Hayward SFA2016 105
 105
 
 
 1
 $666 - $7762016 105
 105
 
 
 1
 $666 - $776
Slate at Jordan Ranch, Dublin2017 56
 54
 2
 2
 3
 $1,125 - $1,2252017 56
 56
 
 
 5
 $1,125 - $1,225
Onyx at Jordan Ranch, Dublin2017 105
 61
 44
 3
 7
 $899 - $9512017 105
 71
 34
 8
 17
 $914 - $966
Quartz at Jordan Ranch, Dublin2018 45
 34
 11
 6
 4
 $958 - $1,0982018 45
 45
 
 
 15
 $958 - $1,098
Apex, Fremont2018 77
 45
 32
 2
 6
 $784 - $1,0962018 77
 51
 26
 1
 12
 $684 - $946
Palm, Fremont2019 31
 3
 28
 5
 3
 $2,119 - $2,2252019 31
 8
 23
 3
 8
 $2,150 - $2,292
Ellis at Central Station, Oakland2019 128
 
 128
 
 
 $711 - $8072020 128
 
 128
 
 
 $728 - $813
Sacramento County:                      
Natomas2019 94
 
 94
 
 
 $344 - $410TBD 94
 
 94
 
 
 $344 - $410
Mangini - Brookstone2020 50
 
 50
 
 
 $582 - $654
Mangini - Waterstone2020 37
 
 37
 
 
 $638 - $705
Placer County:                      
Twelve Bridges2019 102
 
 102
 
 
 $432 - $528
La Madera2019 102
 
 102
 18
 
 $451 - $531
San Francisco County: 
 
 
 
 
            
Lofton at NOPO, San Francisco2020 54
 
 54
 
 
 $995 - $1,2372020 54
 
 54
 
 
 $1,145 - $1,388
Northern California Total 1,669
 659
 1,010
 68
 54
  1,774
 779
 995
 135
 174
 
California Total 4,187
 1,961
 2,226
 218
 170
  4,424
 2,325
 2,099
 335
 534
 
Colorado 
 
 
 
 
  
 
 
 
 
 
Douglas County:                      
Terrain Ravenwood Village (3500)2018 157
 50
 107
 26
 16
  $375 - $4272018 157
 76
 81
 21
 42
  $375 - $427
Terrain Ravenwood Village (4000)2018 100
 39
 61
 20
 6
  $403 - $4712018 100
 60
 40
 16
 27
  $403 - $479
Trails at Crowfoot2020 100
 
 100
 
 
  TBD2020 100
 
 100
 
 
  TBD
Sterling Ranch2020 80
 
 80
 
 
  TBD2020 80
 
 80
 
 
  TBD
The Canyons2020 89
 
 89
 
 
  TBD2020 89
 
 89
 
 
  TBD
Terrain Sunstone2020 74
 
 74
 
 
  TBD
Jefferson County:                      
Candelas 6000 Series, Arvada2015 76
 76
 
 
 1
  $516 - $6562015 76
 76
 
 
 1
  $516 - $656
Candelas 3500 Series, Arvada2016 97
 92
 5
 5
 11
  $408 - $4662016 97
 97
 
 
 16
  $408 - $466
Candelas 5000 Series, Arvada2017 62
 56
 6
 3
 12
  $516 - $5842017 62
 62
 
 
 18
  $516 - $584
Candelas 4020 Series, Arvada2019 98
 3
 95
 35
 3
  $465 - $5202019 98
 35
 63
 21
 35
  $458 - $520
Crown Pointe, Westminster2019 64
 2
 62
 25
 2
  $430 - $482
Candelas TH, Arvada2020 92
 
 92
 
 
  TBD
Crown Point, Westminster2019 64
 18
 46
 31
 18
  $430 - $485
Arapahoe County:                      
Whispering Pines, Aurora2016 115
 69
 46
 22
 5
  $636 - $6812016��115
 86
 29
 17
 22
  $611 - $681
Adonea 3500, Aurora2020 71
 
 71
 
 
 
Adams County:            
 
 
 
 
 
Amber Creek, Thornton2017 121
 84
 37
 17
 16
  $398 - $4832017 121
 104
 17
 10
 36
  $398 - $490
Reunion Alley2020 50
 
 50
 
 
 
Colorado Total 1,159
 471
 688
 153
 72
  1,446
 614
 832
 116
 215
 
North Carolina           
Wake County:           
Lakeview Townhomes, Raleigh2020 23
 
 23
 
 
  TBD
North Carolina Total 23
 
 23
 
 
 
TRI Pointe Total 5,346
 2,432
 2,914
 371
 242
  5,893
 2,939
 2,954
 451
 749
 



- 51 -




Winchester Homes
County, Project, City
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
March 31,
2019
 
Lots
Owned as of
March 31, 2019(3)
 
Backlog as of
March 31,
2019(4)(5)
 
Homes
Delivered
for the Three
Months Ended
March 31,
2019
 
Sales Price
Range
(in thousands)(6)
Year of
First
Delivery(1)
 
Total
Number of
Lots(2)
 
Cumulative
Homes
Delivered
as of
September 30,
2019
 
Lots
Owned as of
September 30, 2019(3)
 
Backlog as of
September 30,
2019(4)(5)
 
Homes
Delivered
for the Nine
Months Ended
September 30,
2019
 
Sales Price
Range
(in thousands)(6)
Maryland                          
Anne Arundel County:                      
Two Rivers Townhomes, Crofton2017 100
 43
 57
 15
 4
 $450 - $5602017 132
 56
 76
 13
 17
 $450 - $560
Two Rivers Cascades SFD, Crofton2018 37
 16
 21
 7
 
 $540 - $6252018 43
 25
 18
 1
 9
 $550 - $610
Watson's Glen, Millersville2015 103
 4
 99
 
 
  TBD2015 103
 4
 99
 
 
 TBD
Frederick County:                      
Landsdale, Monrovia            
         
Landsdale SFD2015 222
 130
 92
 16
 5
 $495 - $5972015 222
 141
 81
 30
 16
 $495 - $597
Landsdale Townhomes2015 100
 78
 22
 4
 2
 $330 - $3832015 100
 89
 11
 5
 13
 $330 - $383
Landsdale TND Neo SFD2015 77
 47
 30
 6
 3
 $440 - $4732015 77
 50
 27
 14
 6
 $440 - $473
Montgomery County:                      
Cabin Branch, Clarksburg                      
Cabin Branch SFD2014 359
 210
 149
 14
 6
  $510 - $7602014 359
 227
 132
 19
 23
  $700 - $775
Cabin Branch Avenue Townhomes2017 121
 59
 62
 5
 7
 $420 - $4882017 86
 72
 14
 8
 20
 $420 - $488
Cabin Branch Townhomes2014 507
 303
 204
 11
 4
  $360 - $458
Cabin Branch Crossings Townhomes2019 98
 
 98
 2
 
  $420 - $490
Cabin Branch Manor Townhomes2014 444
 329
 115
 17
 30
  $393 - $474
Preserve at Stoney Spring - Lots for SaleN/A 4
 
 4
 
 
  N/AN/A 3
 
 3
 
 
  N/A
Glenmont MetroCenter, Silver Spring2016 171
 81
 90
 23
 6
  $435 - $5132016 171
 111
 60
 24
 36
  $435 - $513
Chapman Row, Rockville2019 61
 
 61
 6
 
  $710 - $7992019 61
 1
 60
 8
 1
  $700 - $750
Randolph Farms, Rockville2019 104
 
 104
 
 
  TBD
North Quarter, North Bethesda2019 104
 
 104
 3
 
  $620 - $670
Closed CommunitiesN/A 
 
 
 
 1
   N/A 
 
 
 
 1
 
Maryland Total 1,966
 971
 995
 107
 38
  2,003
 1,105
 898
 144
 172
 
Virginia                      
Fairfax County:                      
Stuart Mill, Oakton - Lots for SaleN/A 5
 
 5
 
 
 N/AN/A 5
 
 5
 
 
 N/A
Westgrove, Fairfax2018 24
 5
 19
 9
 4
 $1,001 - $1,1072018 24
 13
 11
 7
 12
 $1,001 - $1,107
West Oaks Corner, Fairfax2019 188
 
 188
 
 
 TBD2019 188
 
 188
 40
 
 $670 - $770
Bren Pointe SFA, Fairfax2020 7
 
 7
 
 
 TBD
Loudoun County:                      
Brambleton, Ashburn                      
West Park SFD2018 48
 24
 24
 14
 4
 $700 - $7242018 53
 36
 17
 17
 16
 $700 - $724
Birchwood AA2018 37
 14
 23
 15
 5
 $577 - $634
Vistas at Lansdowne, Lansdowne2015 120
 115
 5
 5
 6
 $536 - $576
Birchwood Bungalows AA2018 46
 25
 21
 12
 16
 $577 - $634
Birchwood Carriages AA2019 17
 
 17
 14
 
 $524 - $553
Willowsford Grant II, Aldie2016 55
 23
 32
 11
 
 $950 - $1,2262016 55
 31
 24
 14
 8
 $950 - $1,226
Closed CommunitiesN/A 
 
 
 
 1
 N/A 
 
 
 
 12
  N/A
Virginia Total 477
 181
 296
 54
 20
  395
 105
 290
 104
 64
 
Winchester Total 2,443
 1,152
 1,291
 161
 58
  2,398
 1,210
 1,188
 248
 236
 
                      
Combined Company Total 31,918
 9,277
 22,641
 1,842
 814
  33,902
 11,198
 23,028
 2,312
 3,126
 
__________
(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 March 31,September 30, 2019 include owned lots in backlog as of March 31,September 30, 2019.
(4) 
Backlog consists of homes under sales contracts that have 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 March 31,September 30, 2019, 1,1601,602 homes are under construction, 317318 homes have completed construction, and 365392 homes have not started construction.
(6) 
Sales price range reflects base price only and excludes any lot premium, buyer incentives and buyer-selected options, which may vary from project to project. Sales prices for homes required to be sold pursuant to affordable housing requirements are excluded from sales price range. Sales prices reflect current pricing and might not be indicative of past or future pricing.

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Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, which have been prepared in accordance with GAAP. Our condensed notes to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 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.
Except for accounting policies related to our adoption of ASC 842, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 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 for the critical accounting policies resulting from our adoption of ASC 842.
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 threenine months ended March 31,September 30, 2019. We did not enter into during the threenine months ended March 31,September 30, 2019, 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 March 31,September 30, 2019.
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 three months ended March 31,September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the three months ended March 31,September 30, 2019.

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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 ContingenciesLegal Matters, to 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


There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.  If any of the risks discussed 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 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.”


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
On February 21, 2019, our board of directors discontinued and cancelled theour 2018 Repurchase Program and approved theour 2019 Repurchase Program, authorizing the repurchase of shares of common stock with an aggregate value of up to $100 million through March 31, 2020. Purchases of common stock pursuant to the 2019 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 under the Exchange Act. We are not obligated under the 2019 Repurchase Program to repurchase any specific number or dollar amount of shares of common stock, and we may modify, suspend or discontinue the 2019 Repurchase 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. ThroughDuring the datethree and nine months ended September 30, 2019, we repurchased and retired an aggregate of the filing of this Quarterly Report on Form 10-Q, no3,035,420 shares of our common stock have been repurchased under the 2019 Repurchase Program.Program for $41.7 million.


During the three months ended September 30, 2019, we repurchased and retired the following shares pursuant to our 2019 Repurchase Program:
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 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
July 1, 2019 to July 31, 2019
 $
 
 $
August 1, 2019 to August 31, 20191,705,620
 $13.58
 1,705,620
 $76,844,670
September 1, 2019 to September 30, 20191,329,800
 $13.97
 1,329,800
 $58,265,017
Total3,035,420
 $13.75
 3,035,420
  








Item 6.
Exhibits
Exhibit
Number
 Exhibit Description
   
 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))
   
 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))
   
10.1
 AmendedLetter agreement by and Restated 2013 Long-Term Incentive Planbetween TRI Pointe Group, Inc. and Michael D. Grubbs, dated as of July 1, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (filed February 26,July 1, 2019))
   
10.2
Form of Non-Employee Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (filed February 26, 2019))
10.3
Form of Time-Vested Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (filed February 26, 2019))
10.4
Form of Time-Vested Restricted Stock Unit Award Agreement
10.5
Form of Performance-Based Cash Award Agreement
10.6
Form of Performance-Based Restricted Stock Unit Award Agreement (earnings per share)
10.7
Form of Performance-Based Restricted Stock Unit Award Agreement (total stockholder return)
Second Amended and Restated Credit Agreement, dated as of March 29, 2019, among TRI Pointe Group, Inc., U.S. Bank National Association, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (filed April 4, 2019))
Second Amendment to Tax Sharing Agreement, dated as of March 29, 2019, among TRI Pointe Group, Inc., TRI Pointe Homes, Inc., TRI Pointe Holdings, Inc. and Weyerhaeuser Company (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (filed April 4, 2019))
 Chief Executive Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002
   
 Chief Financial Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002
   
 Chief Executive Officer Section 906 Certification of the Sarbanes-Oxley Act of 2002
   
 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 threenine months ended March 31,September 30, 2019, formatted in Inline eXtensible Business Reporting Language (XBRL)(iXBRL): (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.
   
104Cover page from TRI Pointe Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline XBRL (and contained in Exhibit 101).
 Management Contract or Compensatory Plan or Arrangement



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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.
   
Date: April 25,October 31, 2019By:/s/ Douglas F. Bauer
  Douglas F. Bauer
  Chief Executive Officer
  (Principal Executive Officer)
Date: April 25,October 31, 2019By:/s/ Michael D. Grubbs
  Michael D. Grubbs
  Chief Financial Officer
  (Principal Financial Officer)


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