Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-35796 | |
Entity Registrant Name | Tri Pointe Homes, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1763235 | |
Entity Address, Address Line One | 940 Southwood Blvd | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Incline Village | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89451 | |
City Area Code | 775 | |
Local Phone Number | 413-1030 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | TPH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100,098,269 | |
Amendment Flag | false | |
Document Fiscal year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001561680 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 966,298 | $ 889,664 |
Receivables | 141,076 | 169,449 |
Real estate inventories | 3,142,412 | 3,173,849 |
Investments in unconsolidated entities | 134,071 | 129,837 |
Goodwill and other intangible assets, net | 156,603 | 156,603 |
Deferred tax assets, net | 34,851 | 34,851 |
Other assets | 163,929 | 165,687 |
Total assets | 4,739,240 | 4,719,940 |
Liabilities | ||
Accounts payable | 57,544 | 62,324 |
Accrued expenses and other liabilities | 436,275 | 443,034 |
Loans payable | 287,427 | 287,427 |
Senior notes, net | 1,091,509 | 1,090,624 |
Total liabilities | 1,872,755 | 1,883,409 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as March 31, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock, $0.01 par value, 500,000,000 shares authorized; 100,172,227 and 101,017,708 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 1,002 | 1,010 |
Additional paid-in capital | 0 | 3,685 |
Retained earnings | 2,862,621 | 2,827,694 |
Total stockholders’ equity | 2,863,623 | 2,832,389 |
Noncontrolling interests | 2,862 | 4,142 |
Total equity | 2,866,485 | 2,836,531 |
Total liabilities and equity | $ 4,739,240 | $ 4,719,940 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock issued (in shares) | 100,172,227 | 101,017,708 |
Common stock outstanding (in shares) | 100,172,227 | 101,017,708 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 779,661 | $ 736,244 |
Other operations expense | 665 | 646 |
Sales and marketing | 41,862 | 32,239 |
General and administrative | 46,366 | 48,456 |
Homebuilding income from operations | 92,331 | 115,016 |
Equity in income (loss) of unconsolidated entities | 227 | (55) |
Other income, net | 7,604 | 273 |
Homebuilding income before income taxes | 100,162 | 115,234 |
Equity in income of unconsolidated entities | 0 | 46 |
Financial services income before income taxes | 3,045 | 3,490 |
Income before income taxes | 103,207 | 118,724 |
Provision for income taxes | (27,350) | (30,225) |
Net income (loss) | 75,857 | 88,499 |
Net income attributable to noncontrolling interests | (1,115) | (1,021) |
Net income available to common stockholders | $ 74,742 | $ 87,478 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.74 | $ 0.82 |
Diluted (in dollars per share) | $ 0.73 | $ 0.81 |
Weighted average shares outstanding | ||
Basic (in shares) | 101,019,253 | 107,326,911 |
Diluted (in shares) | 101,706,438 | 108,197,485 |
Homebuilding | ||
Revenues | $ 770,785 | $ 727,492 |
Home sales revenue | ||
Revenues | 768,405 | 725,251 |
Cost of home, land and lot sales | 588,118 | 530,660 |
Land and lot sales revenue | ||
Revenues | 1,706 | 1,597 |
Cost of home, land and lot sales | 1,443 | 475 |
Other operations revenue | ||
Revenues | 674 | 644 |
Financial services | ||
Revenues | 8,876 | 8,752 |
Expenses | $ 5,831 | $ 5,308 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (unaudited) - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | Noncontrolling Interests |
Beginning balance (shares) at Dec. 31, 2021 | 109,644,474 | |||||
Beginning balance at Dec. 31, 2021 | $ 2,447,633 | $ 2,447,621 | $ 1,096 | $ 91,077 | $ 2,355,448 | $ 12 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 88,499 | 87,478 | 87,478 | 1,021 | ||
Shares issued under share-based awards (shares) | 631,622 | |||||
Shares issued under share-based awards | 29 | 29 | $ 6 | 23 | ||
Tax withholding paid on behalf of employees for share-based awards | (9,076) | (9,076) | (9,076) | |||
Stock-based compensation expense | 5,272 | 5,272 | 5,272 | |||
Share repurchases (shares) | (5,295,236) | |||||
Share repurchases | (123,090) | (123,090) | $ (52) | (123,038) | ||
Ending balance (shares) at Mar. 31, 2022 | 104,980,860 | |||||
Ending balance at Mar. 31, 2022 | $ 2,409,267 | 2,408,234 | $ 1,050 | 0 | 2,407,184 | 1,033 |
Beginning balance (shares) at Dec. 31, 2022 | 101,017,708 | 101,017,708 | ||||
Beginning balance at Dec. 31, 2022 | $ 2,836,531 | 2,832,389 | $ 1,010 | 3,685 | 2,827,694 | 4,142 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 75,857 | 74,742 | 74,742 | 1,115 | ||
Shares issued under share-based awards (shares) | 729,094 | |||||
Shares issued under share-based awards | 232 | 232 | $ 7 | 225 | ||
Tax withholding paid on behalf of employees for share-based awards | (9,780) | (9,780) | (9,780) | |||
Stock-based compensation expense | 3,861 | 3,861 | 3,861 | |||
Share repurchases (shares) | (1,574,575) | |||||
Share repurchases | (37,821) | (37,821) | $ (15) | (37,806) | ||
Distributions to noncontrolling interests, net | (2,395) | (2,395) | ||||
Reclass the negative APIC to retained earnings | $ 0 | (39,815) | (39,815) | |||
Ending balance (shares) at Mar. 31, 2023 | 100,172,227 | 100,172,227 | ||||
Ending balance at Mar. 31, 2023 | $ 2,866,485 | $ 2,863,623 | $ 1,002 | $ 0 | $ 2,862,621 | $ 2,862 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 75,857 | $ 88,499 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 7,054 | 5,285 |
Equity in (income) loss of unconsolidated entities, net | (227) | 9 |
Amortization of stock-based compensation | 3,861 | 5,272 |
Charges for impairments and lot option abandonments | 717 | 766 |
Returns on investments in unconsolidated entities, net | 0 | 2,253 |
Changes in assets and liabilities: | ||
Real estate inventories | 31,965 | (233,238) |
Receivables | 28,373 | 247 |
Other assets | (429) | (1,622) |
Accounts payable | (4,780) | (8,839) |
Accrued expenses and other liabilities | (6,752) | 25,254 |
Net cash provided by (used in) operating activities | 135,639 | (116,114) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (6,501) | (12,547) |
Net investments in unconsolidated entities | (2,951) | (7,141) |
Net cash used in investing activities | (9,452) | (19,688) |
Cash flows from financing activities: | ||
Repayment of debt | 0 | (504) |
Distributions to noncontrolling interests | (2,395) | (382) |
Proceeds from issuance of common stock under share-based awards | 232 | 29 |
Tax withholding paid on behalf of employees for share-based awards | (9,780) | (9,076) |
Share repurchases | (37,610) | (123,090) |
Net cash used in financing activities | (49,553) | (133,023) |
Net increase (decrease) in cash and cash equivalents | 76,634 | (268,825) |
Cash and cash equivalents–beginning of period | 889,664 | 681,528 |
Cash and cash equivalents–end of period | $ 966,298 | $ 412,703 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 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 across ten states, including Arizona, California, Colorado, Maryland, Nevada, North Carolina, South Carolina, Texas, Virginia and Washington, and the District of Columbia. 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, 2022. In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation with respect to interim financial statements, have been included. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 due to seasonal variations and other factors. The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2023 and December 31, 2022 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation. Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries. Use of Estimates 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. Cash and Cash Equivalents and Concentration of Credit Risk We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Revenue Recognition We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers . 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 are 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 periods we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to 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 operations revenue relates to a ground lease included in our West segment. We are responsible for making lease payments to the landowner, and we collect sublease payments from the owners of the buildings. This ground lease is accounted for in accordance with Accounting Standards Topic 842 (“ASC 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. The joint venture acts as a preferred mortgage loan broker to our homebuyers in all of the markets in which we operate, generating income from fees paid by third party lenders for the successful funding and closing of loans for homebuyers that originate through Tri Pointe Connect. Due to our ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance, Tri Pointe Connect is fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests. Title and escrow services operations Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington 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. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales 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, includ ing 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 No recent accounting pronouncements or changes in accounting pronouncements have been issued or adopted since those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that are of material significance, or have potential material significance, to the Company. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We op erate two principal businesses: homebuilding and financial services. In accordance with ASC Topic 280, Segment Reporting , in determining the most appropriate reportable segments within our homebuilding business, we have considered similar economic and other characteristics, including product types, average sales prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments and, as such, our homebuilding segments are reported under the following hierarchy: West region: Arizona, California, Nevada and Washington Central region: Colorado and Texas East region: District of Columbia, Maryland, North Carolina, South Carolina 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, see Note 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, 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. All of the expenses incurred by Corporate are allocated to each of the homebuilding reporting segments based on their respective percentage of revenues. 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. Total revenues and income before income taxes for each of our reportable segments were as follows (in thousands): Three Months Ended March 31, 2023 2022 Revenues West $ 480,941 $ 530,496 Central 166,140 137,097 East 123,704 59,899 Total homebuilding revenues 770,785 727,492 Financial services 8,876 8,752 Total $ 779,661 $ 736,244 Income before income taxes West $ 72,911 $ 100,557 Central 13,939 12,951 East 13,312 1,726 Total homebuilding income before income taxes 100,162 115,234 Financial services 3,045 3,490 Total $ 103,207 $ 118,724 Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands): March 31, 2023 December 31, 2022 Real estate inventories West $ 2,254,286 $ 2,258,606 Central 594,189 598,700 East 293,937 316,543 Total $ 3,142,412 $ 3,173,849 Total assets (1) West $ 2,549,111 $ 2,552,121 Central 756,928 761,082 East 355,119 376,129 Corporate 1,036,791 978,748 Total homebuilding assets 4,697,949 4,668,080 Financial services 41,291 51,860 Total $ 4,739,240 $ 4,719,940 __________ (1 ) Total assets as of March 31, 2023 and December 31, 2022 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2023 and December 31, 2022 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareThe 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 March 31, 2023 2022 Numerator: Net income available to common stockholders $ 74,742 $ 87,478 Denominator: Basic weighted-average shares outstanding 101,019,253 107,326,911 Effect of dilutive shares: Stock options and unvested restricted stock units 687,185 870,574 Diluted weighted-average shares outstanding 101,706,438 108,197,485 Earnings per share Basic $ 0.74 $ 0.82 Diluted $ 0.73 $ 0.81 Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share 2,671,754 2,405,692 |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables consisted of the following (in thousands): March 31, 2023 December 31, 2022 Escrow proceeds and other accounts receivable, net $ 84,709 $ 113,082 Warranty insurance receivable (Note 13) 56,367 56,367 Total receivables $ 141,076 $ 169,449 Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables based on an expected credit loss approach. Receivables were net of allowances for doubtful accounts of $472,000 as of both March 31, 2023 and December 31, 2022. |
Real Estate Inventories
Real Estate Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Real Estate Inventories | Real Estate Inventories Real estate inventories consisted of the following (in thousands): March 31, 2023 December 31, 2022 Real estate inventories owned: Homes completed or under construction $ 1,191,754 $ 1,293,681 Land under development 1,335,789 1,279,394 Land held for future development 158,908 140,725 Model homes 240,333 231,157 Total real estate inventories owned 2,926,784 2,944,957 Real estate inventories not owned: Land purchase and land option deposits 215,628 228,892 Total real estate inventories not owned 215,628 228,892 Total real estate inventories $ 3,142,412 $ 3,173,849 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 capital ized 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 increase in land held for future development as of March 31, 2023 compared to December 31, 2022 is attributable to two projects located in our West reporting segment that were transferred from land under development. Real estate inventories not owned represents deposits related to land purchase and land and lot option agreements. For further details, see Note 7, Variable Interest Entities . Interest incurred, capitalized and expensed were as follows (in thousands): Three Months Ended March 31, 2023 2022 Interest incurred $ 37,479 $ 28,553 Interest capitalized (37,479) (28,553) Interest expensed $ — $ — Capitalized interest in beginning inventory $ 191,411 $ 173,563 Interest capitalized as a cost of inventory 37,479 28,553 Interest previously capitalized as a cost of inventory, included in cost of sales (20,251) (17,065) Capitalized interest in ending inventory $ 208,639 $ 185,051 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 March 31, 2023 2022 Real estate inventory impairments $ — $ — Land and lot option abandonments and pre-acquisition charges 717 766 Total $ 717 $ 766 Impairments of real estate inventory, if any, relate primarily to projects or communities that include homes completed or under construction. Within a project or community, there may be individual homes or parcels of land that are currently held for sale. Impairment charges recognized as a result of adjusting individual held-for-sale assets within a community to estimated fair value less cost to sell are also included in the total impairment charges. In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date. We have option deposits and capitalized pre-acquisition costs associated with the optioned land and lots. When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition. Option deposits and capitalized pre-acquisition costs associated with the assets under option may be forfeited at that time. Real estate inventory impairments and land option abandonments are recorded in cost of home sales and cost of land and lot sales on the consolidated statements of operations. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities As of March 31, 2023, we held equity investments in twelve active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 7% to 50%, depending on the investment, with no controlling interest held in any of these investments. Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are as follows (in thousands): March 31, 2023 December 31, 2022 Assets Cash $ 22,575 $ 34,556 Receivables 36,298 30,893 Real estate inventories 451,417 458,121 Other assets 11,237 7,751 Total assets $ 521,527 $ 531,321 Liabilities and equity Accounts payable and other liabilities $ 145,388 $ 149,172 Company’s equity 134,071 129,837 Outside interests’ equity 242,068 252,312 Total liabilities and equity $ 521,527 $ 531,321 Results of operations from unconsolidated entities (in thousands): Three Months Ended March 31, 2023 2022 Net sales $ 22,138 $ 5,323 Other operating expense (21,653) (5,444) Other loss, net (3) — Net income (loss) $ 482 $ (121) Company’s equity in income (loss) of unconsolidated entities $ 227 $ (9) |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Land and Lot Option Agreements 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 Accounting Standards Topic 810 (“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 landowner 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. The following provides a summary of our interests in land and lot option agreements (in thousands): March 31, 2023 December 31, 2022 Deposits Remaining Consolidated Deposits Remaining Consolidated Unconsolidated VIEs $ 200,168 $ 1,055,531 N/A $ 207,846 $ 1,129,369 N/A Other land option agreements 15,460 170,658 N/A 21,046 210,964 N/A Total $ 215,628 $ 1,226,189 $ — $ 228,892 $ 1,340,333 $ — Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not with VIEs. In addition to the deposits pre sented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $14.3 million and $13.8 million as of March 31, 2023 and December 31, 2022, respectively. These pre-acquisition costs are included in real estate inventories as land under development on our consolidated balance sheets. Tri Pointe Connect Joint Venture During the first quarter of 2022, a reconsideration event under ASC 810 occurred for our Tri Pointe Connect joint venture that gave us the ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance. Based on our reassessment, we concluded that the mortgage financing joint venture is a VIE and we are the primary beneficiary bas ed on our controlling financial interest. As a result, beginning in January 2022, the joint venture is accounted for as a consolidated VIE. As of January 1, 2022, the accompanying consolidated balance sheets include the assets, liabilities and noncontrolling interests of this VIE. As of March 31, 2023, the accompanying consolidated balance sheets included the carrying value of the VIE’s assets of $6.4 million of cash and $5.1 million of other assets, $3.4 million of accrued expenses and other liabilities, and $2.9 million in noncontrolling interests. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible AssetsAs of March 31, 2023 and December 31, 2022, $139.3 million of goodwill is included in goodwill and other intangible assets, net on each of the consolidated balance sheets, which was recorded in connection with our merger with Weyerhaeuser Real Estate Company (“WRECO”) in 2014. In addition, as of March 31, 2023 and December 31, 2022, we have one intangible asset with a carrying amount of $17.3 million comprised of a Tri Pointe Homes trade name, which has an indefinite useful life and is non-amortizing, resulting from the acquisition of WRECO in 2014.Goodwill and other intangible assets are evaluated for impairment on an annual basis, or more frequently if indicators of impairment exist. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid expenses $ 17,959 $ 20,471 Refundable fees and other deposits 7,107 5,226 Development rights, held for future use or sale 1,192 1,192 Deferred loan costs—loans payable 6,155 6,515 Operating properties and equipment, net 66,880 67,430 Lease right-of-use assets 63,700 63,918 Other 936 935 Total $ 163,929 $ 165,687 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accrued payroll and related costs $ 22,352 $ 60,682 Warranty reserves (Note 13) 101,527 104,375 Estimated cost for completion of real estate inventories 107,792 108,072 Customer deposits 43,439 42,027 Accrued income taxes payable 44,193 17,280 Accrued interest 23,972 9,351 Other tax liability 2,741 4,099 Lease liabilities 77,472 77,728 Other 12,787 19,420 Total $ 436,275 $ 443,034 |
Senior Notes and Loans Payable
Senior Notes and Loans Payable | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Senior Notes and Loans Payable | Senior Notes and Loans Payable Senior Notes The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands): March 31, 2023 December 31, 2022 5.875% Senior Notes due June 15, 2024 $ 450,000 $ 450,000 5.250% Senior Notes due June 1, 2027 300,000 300,000 5.700% Senior Notes due June 15, 2028 350,000 350,000 Discount and deferred loan costs (8,491) (9,376) Total $ 1,091,509 $ 1,090,624 In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) a t 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity. In June 2017, Tri Pointe 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 a nd discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity. Tri Pointe and its wholly owned subsidiary, Tri Pointe Homes Holdings, Inc., are co-issuers of the $450 million aggregate principal amount 5.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were issued at 98.15% of their aggregate principal amount in June of 2014. The net proceeds from the offering of the 2024 Notes was $429.0 million, after debt issuance costs and discounts. The 2024 Notes mature on June 15, 2024, with interest payable semiannually in arrears on June 15 and December 15 of each year until maturity. As of March 31, 2023, there were $7.2 million of capitalized debt financing costs, included in senior notes, net on our consolidated balance sheet, related to the Senior Notes that will amortize over the lives of the Senior Notes. Accrued interest related to the Senior Notes was $18.8 million and $3.2 million as of March 31, 2023 and December 31, 2022, respectively. Loans Payable The Company’s outstanding loans payable consisted of the following (in thousands): March 31, 2023 December 31, 2022 Term loan facility $ 250,000 $ 250,000 Seller financed loans 37,427 37,427 Total $ 287,427 $ 287,427 On June 29, 2022, we entered into a Third Modification Agreement (the “Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019. The Modification, among other things, (i) increased the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $650.0 million to $750.0 million, (ii) increased the sublimit for issuance of letters of credit under the Revolving Facility from $100 million to $150 million and (iii) extended the maturity date of both the Revolving Facility and term loan facility (the “Term Facility”) under the Credit Agreement to June 29, 2027. We may increase the Credit Facility to not more than $1.2 billion in the aggregate, at our request, upon satisfaction of specified conditions. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio. As of March 31, 2023, we had no outstanding debt under the Revolving Facility and there w as $691.4 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2023, we had $250 million outstanding debt under the Term Facility with an interest rate of 4.55%. As of March 31, 2023, there were $6.2 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 Term Facility was $346,000 and $1.5 million as of March 31, 2023 and December 31, 2022, respectively. At March 31, 2023 and December 31, 2022, we had outstanding letters of credit of $58.6 million and $58.9 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. As of March 31, 2023 and December 31, 2022, we had $37.4 million outstanding related to one seller-financed loan to acquire lots for the construction of homes. Principal on this loan is expected to mature in 2023, provided certain achievements are met. The seller-financed loan accrues interest at an imputed interest rate of 4.50% per annum. Interest Incurred During the three months ended March 31, 2023 and 2022, the Company incurred interest of $37.5 million and $28.6 million, respectively, related to all debt during the period. Included in interest incurred are amortization of deferred financing and Senior Note discount costs of $1.2 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively. Accrued interest related to all outstanding debt at March 31, 2023 and December 31, 2022 was $24.0 million and $9.4 million, respectively. Covenant Requirements The Senior Notes contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions. Under the Credit Facility, the Company is required to comply with certain financial covenants, including 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 95.0% 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, 2023 and December 31, 2022. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 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, 2023 and December 31, 2022, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands): March 31, 2023 December 31, 2022 Hierarchy Book Value Fair Value Book Value Fair Value Senior Notes (1) Level 2 $ 1,098,685 $ 1,041,250 $ 1,098,425 $ 1,040,750 Term loan (2) Level 2 $ 250,000 $ 250,000 $ 250,000 $ 250,000 Seller financed loans (3) Level 2 $ 37,427 $ 37,427 $ 37,427 $ 37,427 __________ (1) The book value of the Senior Notes is net of discounts, excluding deferred loan c osts of $7.2 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of the Senior Notes at March 31, 2023 and December 31, 2022 is based on quoted market prices. (2) The estimate d fair value of the Term Loan Facility as of March 31, 2023 and December 31, 2022 approximated book value due to the variable interest rate terms of this loan. (3) The estimated fair value of our seller financed loan as of December 31, 2022 approximated book value due to the short term nature of these loans. At March 31, 2023 and December 31, 2022, the carrying value of cash and cash equivalents and receivables approximated fair value due to their short-term nature. Fair Value of Nonfinancial Assets |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 base d 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 zero legal reserves as of March 31, 2023 and December 31, 2022, respectively. 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. Our warranty reserve may also include an estimate of future fit and finish warranty claims to the extent not contemplated in the actuarial analysis. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a warranty or construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of product we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for variability in these underlying assumptions, our actual future costs could differ from those estimated. There can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers, that we will be able to renew our insurance coverage or renew it at reasonable rates, that we will not be liable for damages, cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence or building related claims or that claims will not arise out of uninsurable events or circumstances not covered by insurance and not subject to effective indemnification agreements with certain subcontractors. We also record expected recoveries from insurance carriers based on actual insurance claims made and actuarially determined amounts that depend on various factors, including the above-described reserve estimates, our insurance policy coverage limits for the applicable poli cy 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 $56.4 million as of both March 31, 2023 and December 31, 2022, respectively. Warranty insurance receivables are recorded in receivables on the a ccompanying consolidated balance sheets. Warranty reserve activity consisted of the following (in thousands): Three Months Ended March 31, 2023 2022 Warranty reserves, beginning of period $ 104,375 $ 103,976 Warranty reserves accrued 5,902 4,721 Warranty expenditures (8,750) (5,663) Warranty reserves, end of period $ 101,527 $ 103,034 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, 2023 and December 31, 2022, the Company had outstanding surety bonds totaling $692.0 million and $710.8 million, respectively. As of March 31, 2023 and December 31, 2022, our estimated cost to complete obligations related to these surety bonds was $411.1 million and $443.7 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 Ground Leases In 1987, we obtained two 55-year ground leases of commercial property that provided for three renewal options of ten years each and one 45-year renewal option. We exercised the three 10-year extensions on one of these ground leases to 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 landowner, 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 landowner, however, we have guaranteed the performance of the buyers/lessees. See below for additional information on leases (dollars in thousands): Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Lease Cost Operating lease cost (included in SG&A expense) $ 2,845 $ 2,499 Ground lease cost (included in other operations expense) 663 635 Sublease income, operating leases — — Sublease income, ground leases (included in other operations revenue) (673) (644) Net lease cost $ 2,835 $ 2,490 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows (included in operating cash flows) $ 2,429 $ 3,381 Ground lease cash flows (included in operating cash flows) $ 663 $ 663 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,927 $ 83 March 31, 2023 December 31, 2022 Weighted-average discount rate: Operating leases 4.7 % 4.7 % Ground leases 10.2 % 10.2 % Weighted-average remaining lease term (in years): Operating leases 6.8 7.0 Ground leases 45.1 45.3 The future minimum lease payments under our operating leases are as follows (in thousands): Property, Equipment and Other Leases Ground Leases (1) Remaining in 2023 $ 6,973 $ 2,428 2024 9,106 3,237 2025 8,717 3,237 2026 7,633 3,237 2027 6,893 3,237 Thereafter 18,092 78,640 Total lease payments $ 57,414 $ 94,016 Less: Interest 8,215 65,743 Present value of operating lease liabilities $ 49,199 $ 28,273 __________ (1) Ground leases are fully subleased through 2041, representing $60.2 million of the $94.0 million future ground lease obligations. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2022 Long-Term Incentive Plan On April 20, 2022, our stockholders approved the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “2022 Plan”), which had been previously approved by our board of directors. The 2022 Plan replaced the Company’s prior stock compensation plan, the TRI Pointe Group, Inc. Amended and Restated 2013 Long-Term Incentive Plan (the “2013 Plan”). The 2022 Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The 2022 Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2022 Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation. The number of shares of our common stock that may be issued under the 2022 Plan is 7,500,000 shares. No new awards have been or will be granted under the 2013 Plan from and after February 23, 2022. Any awards outstanding under the 2013 Plan will remain subject to and be paid under the 2013 Plan, and any shares subject to outstanding awards under the 2013 Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2022 Plan. 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 2022 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 will again be available under the 2022 Plan. However, the 2022 Plan prohibits us from re-using shares that are tendered or surrendered to pay the exercise cost or tax obligation for stock options and SARs. As of March 31, 2023, there were 6,415,172 shares available for future grant under the 2022 Plan. The following table presents compensation expense recognized related to all stock-based awards (in thousands): Three Months Ended March 31, 2023 2022 Total stock-based compensation $ 3,861 $ 5,272 Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations. As of March 31, 2023, total unrecognized stock-based compensation expense related to all stock-based awards was $32.4 million and the weighted average term over which the expense was expected to be recognized was 2.3 years. Summary of Stock Option Activity The following table presents a summary of stock option awards for the three months ended March 31, 2023: Options Weighted Weighted Aggregate Options outstanding at December 31, 2022 159,255 $ 15.08 0.9 $ 565 Granted — — — — Exercised (48,592) $ 14.87 — — Forfeited — $ — — — Options outstanding at March 31, 2023 110,663 $ 15.17 0.9 $ 1,064 Options exercisable at March 31, 2023 110,663 $ 15.17 0.9 $ 1,064 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 three months ended March 31, 2023: Restricted Weighted Aggregate Nonvested RSUs at December 31, 2022 3,679,521 $ 19.93 $ 68,402 Granted 1,209,608 $ 23.21 — Vested (1,133,424) $ 19.18 — Forfeited (126,093) $ 18.24 — Nonvested RSUs at March 31, 2023 3,629,612 $ 21.28 $ 77,238 RSUs that vested, as reflected in the table above, during the three months ended March 31, 2023 include previously granted time-based RSUs. RSUs that were forfeited, as reflected in the table above, during the three months ended March 31, 2023 include performance-based RSUs and time-based RSUs that were forfeited for no consideration. On February 22, 2023, the Company granted an aggregate of 505,200 time-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 February 22, 2023 was measured using a price of $23.21 per share 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 February 22, 2023, the Company granted an aggregate of 704,408 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer, Chief Human Resources Officer and division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2023 to December 31, 2025. The fair value of these performance-based RSUs was measured using a price of $23.21, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period. On February 22, 2022, the Company granted an aggregate of 629,520 time-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 February 22, 2022 was measured using a price of $21.00 per share 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 February 22, 2022, the Company granted an aggregate of 668,150 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer and Chief Human Resources Officer. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue, and (ii) 50% to pre-tax earnings. 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. Any award earned based on performance achieved may be increased or decreased by 25% based on the Company’s total stockholder return (“TSR”) relative to its peer-group homebuilders. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was determined to be $22.30 per share based on a Monte Carlo simulation. Each award will be expensed over the requisite service period. On February 22, 2022, the Company granted an aggregate of 235,078 performance-based RSUs to the Company’s division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was measured using a price of $21.00, 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 $34.9 million as of both March 31, 2023 and December 31, 2022. We had a valuation allowance related to those net deferred tax assets of $3.4 million as of both March 31, 2023 and December 31, 2022. 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. Our provision for income taxes totaled $27.4 million and $30.2 million for the three months ended March 31, 2023 and 2022, respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company did not have any uncertain tax positions recorded as of March 31, 2023 and December 31, 2022. The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions. We are currently under examination by California for the 2020 and 2021 tax years. The outcome of this examination is not yet determinable. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsWe had no related party transactions for the three months ended March 31, 2023 and 2022. |
Supplemental Disclosure to Cons
Supplemental Disclosure to Consolidated Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure to Consolidated Statements of Cash Flows | Supplemental Disclosure to Consolidated Statements of Cash Flows The following are supplemental disclosures to the consolidated statements of cash flows (in thousands): Three Months Ended March 31, 2023 2022 Supplemental disclosure of cash flow information: Interest paid (capitalized), net $ (15,866) $ (17,869) Income taxes paid, net $ 329 $ — Supplemental disclosures of noncash activities: Amortization of senior note discount capitalized to real estate inventory $ 259 $ 243 Amortization of deferred loan costs capitalized to real estate inventory $ 986 $ 889 |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2022. In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation with respect to interim financial statements, have been included. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 due to seasonal variations and other factors. The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2023 and December 31, 2022 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation. Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries. |
Use of Estimates | Use of Estimates 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents and Concentration of Credit Risk We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Concentration of Credit Risk | Cash and Cash Equivalents and Concentration of Credit Risk We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers . 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 are 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 periods we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to 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 operations revenue relates to a ground lease included in our West segment. We are responsible for making lease payments to the landowner, and we collect sublease payments from the owners of the buildings. This ground lease is accounted for in accordance with Accounting Standards Topic 842 (“ASC 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. The joint venture acts as a preferred mortgage loan broker to our homebuyers in all of the markets in which we operate, generating income from fees paid by third party lenders for the successful funding and closing of loans for homebuyers that originate through Tri Pointe Connect. Due to our ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance, Tri Pointe Connect is fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests. Title and escrow services operations Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington 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. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales 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, includ ing 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 | Recently Issued Accounting Standards Not Yet Adopted No recent accounting pronouncements or changes in accounting pronouncements have been issued or adopted since those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that are of material significance, or have potential material significance, to the Company. |
Segment Information | In accordance with ASC Topic 280, Segment Reporting , in determining the most appropriate reportable segments within our homebuilding business, we have considered similar economic and other characteristics, including product types, average sales prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments and, as such, our homebuilding segments are reported under the following hierarchy: West region: Arizona, California, Nevada and Washington Central region: Colorado and Texas East region: District of Columbia, Maryland, North Carolina, South Carolina 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, see Note 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, 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. All of the expenses incurred by Corporate are allocated to each of the homebuilding reporting segments based on their respective percentage of revenues. 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. |
Fair Value Measurements | 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 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Financial Information Relating to Reportable Segments | Total revenues and income before income taxes for each of our reportable segments were as follows (in thousands): Three Months Ended March 31, 2023 2022 Revenues West $ 480,941 $ 530,496 Central 166,140 137,097 East 123,704 59,899 Total homebuilding revenues 770,785 727,492 Financial services 8,876 8,752 Total $ 779,661 $ 736,244 Income before income taxes West $ 72,911 $ 100,557 Central 13,939 12,951 East 13,312 1,726 Total homebuilding income before income taxes 100,162 115,234 Financial services 3,045 3,490 Total $ 103,207 $ 118,724 Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands): March 31, 2023 December 31, 2022 Real estate inventories West $ 2,254,286 $ 2,258,606 Central 594,189 598,700 East 293,937 316,543 Total $ 3,142,412 $ 3,173,849 Total assets (1) West $ 2,549,111 $ 2,552,121 Central 756,928 761,082 East 355,119 376,129 Corporate 1,036,791 978,748 Total homebuilding assets 4,697,949 4,668,080 Financial services 41,291 51,860 Total $ 4,739,240 $ 4,719,940 __________ (1 ) Total assets as of March 31, 2023 and December 31, 2022 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2023 and December 31, 2022 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted 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 March 31, 2023 2022 Numerator: Net income available to common stockholders $ 74,742 $ 87,478 Denominator: Basic weighted-average shares outstanding 101,019,253 107,326,911 Effect of dilutive shares: Stock options and unvested restricted stock units 687,185 870,574 Diluted weighted-average shares outstanding 101,706,438 108,197,485 Earnings per share Basic $ 0.74 $ 0.82 Diluted $ 0.73 $ 0.81 Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share 2,671,754 2,405,692 |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Receivables | Receivables consisted of the following (in thousands): March 31, 2023 December 31, 2022 Escrow proceeds and other accounts receivable, net $ 84,709 $ 113,082 Warranty insurance receivable (Note 13) 56,367 56,367 Total receivables $ 141,076 $ 169,449 |
Real Estate Inventories (Tables
Real Estate Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Real Estate Inventories | Real estate inventories consisted of the following (in thousands): March 31, 2023 December 31, 2022 Real estate inventories owned: Homes completed or under construction $ 1,191,754 $ 1,293,681 Land under development 1,335,789 1,279,394 Land held for future development 158,908 140,725 Model homes 240,333 231,157 Total real estate inventories owned 2,926,784 2,944,957 Real estate inventories not owned: Land purchase and land option deposits 215,628 228,892 Total real estate inventories not owned 215,628 228,892 Total real estate inventories $ 3,142,412 $ 3,173,849 |
Summary of Interest Incurred, Capitalized and Expensed | Interest incurred, capitalized and expensed were as follows (in thousands): Three Months Ended March 31, 2023 2022 Interest incurred $ 37,479 $ 28,553 Interest capitalized (37,479) (28,553) Interest expensed $ — $ — Capitalized interest in beginning inventory $ 191,411 $ 173,563 Interest capitalized as a cost of inventory 37,479 28,553 Interest previously capitalized as a cost of inventory, included in cost of sales (20,251) (17,065) Capitalized interest in ending inventory $ 208,639 $ 185,051 |
Schedule of 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 March 31, 2023 2022 Real estate inventory impairments $ — $ — Land and lot option abandonments and pre-acquisition charges 717 766 Total $ 717 $ 766 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Aggregated Assets, Liabilities and Operating Results of Entities as Equity-Method Investments | March 31, 2023 December 31, 2022 Assets Cash $ 22,575 $ 34,556 Receivables 36,298 30,893 Real estate inventories 451,417 458,121 Other assets 11,237 7,751 Total assets $ 521,527 $ 531,321 Liabilities and equity Accounts payable and other liabilities $ 145,388 $ 149,172 Company’s equity 134,071 129,837 Outside interests’ equity 242,068 252,312 Total liabilities and equity $ 521,527 $ 531,321 Results of operations from unconsolidated entities (in thousands): Three Months Ended March 31, 2023 2022 Net sales $ 22,138 $ 5,323 Other operating expense (21,653) (5,444) Other loss, net (3) — Net income (loss) $ 482 $ (121) Company’s equity in income (loss) of unconsolidated entities $ 227 $ (9) |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Interests in Land Option Agreements | The following provides a summary of our interests in land and lot option agreements (in thousands): March 31, 2023 December 31, 2022 Deposits Remaining Consolidated Deposits Remaining Consolidated Unconsolidated VIEs $ 200,168 $ 1,055,531 N/A $ 207,846 $ 1,129,369 N/A Other land option agreements 15,460 170,658 N/A 21,046 210,964 N/A Total $ 215,628 $ 1,226,189 $ — $ 228,892 $ 1,340,333 $ — |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid expenses $ 17,959 $ 20,471 Refundable fees and other deposits 7,107 5,226 Development rights, held for future use or sale 1,192 1,192 Deferred loan costs—loans payable 6,155 6,515 Operating properties and equipment, net 66,880 67,430 Lease right-of-use assets 63,700 63,918 Other 936 935 Total $ 163,929 $ 165,687 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accrued payroll and related costs $ 22,352 $ 60,682 Warranty reserves (Note 13) 101,527 104,375 Estimated cost for completion of real estate inventories 107,792 108,072 Customer deposits 43,439 42,027 Accrued income taxes payable 44,193 17,280 Accrued interest 23,972 9,351 Other tax liability 2,741 4,099 Lease liabilities 77,472 77,728 Other 12,787 19,420 Total $ 436,275 $ 443,034 |
Senior Notes and Loans Payable
Senior Notes and Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Notes and Outstanding Loans Payable | The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands): March 31, 2023 December 31, 2022 5.875% Senior Notes due June 15, 2024 $ 450,000 $ 450,000 5.250% Senior Notes due June 1, 2027 300,000 300,000 5.700% Senior Notes due June 15, 2028 350,000 350,000 Discount and deferred loan costs (8,491) (9,376) Total $ 1,091,509 $ 1,090,624 The Company’s outstanding loans payable consisted of the following (in thousands): March 31, 2023 December 31, 2022 Term loan facility $ 250,000 $ 250,000 Seller financed loans 37,427 37,427 Total $ 287,427 $ 287,427 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Related to Financial Instruments, Measured at Fair Value on a Recurring Basis | A summary of assets and liabilities at March 31, 2023 and December 31, 2022, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands): March 31, 2023 December 31, 2022 Hierarchy Book Value Fair Value Book Value Fair Value Senior Notes (1) Level 2 $ 1,098,685 $ 1,041,250 $ 1,098,425 $ 1,040,750 Term loan (2) Level 2 $ 250,000 $ 250,000 $ 250,000 $ 250,000 Seller financed loans (3) Level 2 $ 37,427 $ 37,427 $ 37,427 $ 37,427 __________ (1) The book value of the Senior Notes is net of discounts, excluding deferred loan c osts of $7.2 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of the Senior Notes at March 31, 2023 and December 31, 2022 is based on quoted market prices. (2) The estimate d fair value of the Term Loan Facility as of March 31, 2023 and December 31, 2022 approximated book value due to the variable interest rate terms of this loan. (3) The estimated fair value of our seller financed loan as of December 31, 2022 approximated book value due to the short term nature of these loans. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Warranty Reserves | Warranty reserve activity consisted of the following (in thousands): Three Months Ended March 31, 2023 2022 Warranty reserves, beginning of period $ 104,375 $ 103,976 Warranty reserves accrued 5,902 4,721 Warranty expenditures (8,750) (5,663) Warranty reserves, end of period $ 101,527 $ 103,034 |
Schedule of Lease Costs and Other Information | See below for additional information on leases (dollars in thousands): Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Lease Cost Operating lease cost (included in SG&A expense) $ 2,845 $ 2,499 Ground lease cost (included in other operations expense) 663 635 Sublease income, operating leases — — Sublease income, ground leases (included in other operations revenue) (673) (644) Net lease cost $ 2,835 $ 2,490 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease cash flows (included in operating cash flows) $ 2,429 $ 3,381 Ground lease cash flows (included in operating cash flows) $ 663 $ 663 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,927 $ 83 March 31, 2023 December 31, 2022 Weighted-average discount rate: Operating leases 4.7 % 4.7 % Ground leases 10.2 % 10.2 % Weighted-average remaining lease term (in years): Operating leases 6.8 7.0 Ground leases 45.1 45.3 |
Schedule of Future Minimum Lease Payments | The future minimum lease payments under our operating leases are as follows (in thousands): Property, Equipment and Other Leases Ground Leases (1) Remaining in 2023 $ 6,973 $ 2,428 2024 9,106 3,237 2025 8,717 3,237 2026 7,633 3,237 2027 6,893 3,237 Thereafter 18,092 78,640 Total lease payments $ 57,414 $ 94,016 Less: Interest 8,215 65,743 Present value of operating lease liabilities $ 49,199 $ 28,273 __________ (1) Ground leases are fully subleased through 2041, representing $60.2 million of the $94.0 million future ground lease obligations. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Compensation Expense Recognized Related to All Stock-Based Awards | The following table presents compensation expense recognized related to all stock-based awards (in thousands): Three Months Ended March 31, 2023 2022 Total stock-based compensation $ 3,861 $ 5,272 |
Summary of Stock Option Awards | The following table presents a summary of stock option awards for the three months ended March 31, 2023: Options Weighted Weighted Aggregate Options outstanding at December 31, 2022 159,255 $ 15.08 0.9 $ 565 Granted — — — — Exercised (48,592) $ 14.87 — — Forfeited — $ — — — Options outstanding at March 31, 2023 110,663 $ 15.17 0.9 $ 1,064 Options exercisable at March 31, 2023 110,663 $ 15.17 0.9 $ 1,064 |
Summary of Restricted Stock Units | The following table presents a summary of RSUs for the three months ended March 31, 2023: Restricted Weighted Aggregate Nonvested RSUs at December 31, 2022 3,679,521 $ 19.93 $ 68,402 Granted 1,209,608 $ 23.21 — Vested (1,133,424) $ 19.18 — Forfeited (126,093) $ 18.24 — Nonvested RSUs at March 31, 2023 3,629,612 $ 21.28 $ 77,238 |
Supplemental Disclosure to Co_2
Supplemental Disclosure to Consolidated Statements of Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure to Consolidated Statement of Cash Flows | The following are supplemental disclosures to the consolidated statements of cash flows (in thousands): Three Months Ended March 31, 2023 2022 Supplemental disclosure of cash flow information: Interest paid (capitalized), net $ (15,866) $ (17,869) Income taxes paid, net $ 329 $ — Supplemental disclosures of noncash activities: Amortization of senior note discount capitalized to real estate inventory $ 259 $ 243 Amortization of deferred loan costs capitalized to real estate inventory $ 986 $ 889 |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | Mar. 31, 2023 state |
Accounting Policies [Abstract] | |
Number of states in which entity operates | 10 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 business_line segment | |
Segment Reporting [Abstract] | |
Number of principal businesses | business_line | 2 |
Number of reportable segments | segment | 3 |
Segment Information - Summary o
Segment Information - Summary of Financial Information Relating to Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information | |||
Revenues | $ 779,661 | $ 736,244 | |
Income before income taxes | 103,207 | 118,724 | |
Real estate inventories | 3,142,412 | $ 3,173,849 | |
Total assets | 4,739,240 | 4,719,940 | |
Goodwill | 139,300 | 139,300 | |
Homebuilding Revenue | |||
Segment Reporting Information | |||
Revenues | 770,785 | 727,492 | |
Income before income taxes | 100,162 | 115,234 | |
Real estate inventories | 3,142,412 | 3,173,849 | |
Total assets | 4,697,949 | 4,668,080 | |
Goodwill | 139,300 | 139,300 | |
Homebuilding Revenue | Corporate | |||
Segment Reporting Information | |||
Total assets | 1,036,791 | 978,748 | |
Homebuilding Revenue | West | |||
Segment Reporting Information | |||
Revenues | 480,941 | 530,496 | |
Income before income taxes | 72,911 | 100,557 | |
Goodwill | 125,400 | 125,400 | |
Homebuilding Revenue | West | Operating Segments | |||
Segment Reporting Information | |||
Real estate inventories | 2,254,286 | 2,258,606 | |
Total assets | 2,549,111 | 2,552,121 | |
Homebuilding Revenue | Central | |||
Segment Reporting Information | |||
Revenues | 166,140 | 137,097 | |
Income before income taxes | 13,939 | 12,951 | |
Goodwill | 8,300 | 8,300 | |
Homebuilding Revenue | Central | Operating Segments | |||
Segment Reporting Information | |||
Real estate inventories | 594,189 | 598,700 | |
Total assets | 756,928 | 761,082 | |
Homebuilding Revenue | East | |||
Segment Reporting Information | |||
Revenues | 123,704 | 59,899 | |
Income before income taxes | 13,312 | 1,726 | |
Goodwill | 5,600 | 5,600 | |
Homebuilding Revenue | East | Operating Segments | |||
Segment Reporting Information | |||
Real estate inventories | 293,937 | 316,543 | |
Total assets | 355,119 | 376,129 | |
Financial Services Segment | |||
Segment Reporting Information | |||
Income before income taxes | 3,045 | $ 3,490 | |
Financial Services Segment | Operating Segments | |||
Segment Reporting Information | |||
Total assets | $ 41,291 | $ 51,860 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income available to common stockholders | $ 74,742 | $ 87,478 |
Net income available to common stockholders | $ 74,742 | $ 87,478 |
Denominator: | ||
Basic weighted-average shares outstanding (in shares) | 101,019,253 | 107,326,911 |
Effect of dilutive shares: | ||
Stock options and unvested restricted stock units (in shares) | 687,185 | 870,574 |
Diluted weighted-average shares outstanding (in shares) | 101,706,438 | 108,197,485 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.74 | $ 0.82 |
Diluted (in dollars per share) | $ 0.73 | $ 0.81 |
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share (in shares) | 2,671,754 | 2,405,692 |
Receivables - Components of Rec
Receivables - Components of Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Escrow proceeds and other accounts receivable, net | $ 84,709 | $ 113,082 |
Warranty insurance receivable | 56,367 | 56,367 |
Total receivables | $ 141,076 | $ 169,449 |
Receivables - Narrative (Detail
Receivables - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 472 | $ 472 |
Real Estate Inventories - Summa
Real Estate Inventories - Summary of Real Estate Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate inventories owned: | ||
Homes completed or under construction | $ 1,191,754 | $ 1,293,681 |
Land under development | 1,335,789 | 1,279,394 |
Land held for future development | 158,908 | 140,725 |
Model homes | 240,333 | 231,157 |
Total real estate inventories owned | 2,926,784 | 2,944,957 |
Real estate inventories not owned: | ||
Land purchase and land option deposits | 215,628 | 228,892 |
Total real estate inventories not owned | 215,628 | 228,892 |
Total real estate inventories | $ 3,142,412 | $ 3,173,849 |
Real Estate Inventories - Narra
Real Estate Inventories - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 project | |
Real Estate [Abstract] | |
Number of projects transferred to land held for future development | 2 |
Real Estate Inventories - Sum_2
Real Estate Inventories - Summary of Interest Incurred, Capitalized and Expensed (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Real Estate [Abstract] | ||
Interest incurred | $ 37,479 | $ 28,553 |
Interest capitalized | (37,479) | (28,553) |
Interest expensed | 0 | 0 |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Capitalized interest in beginning inventory | 191,411 | 173,563 |
Interest capitalized as a cost of inventory | 37,479 | 28,553 |
Interest previously capitalized as a cost of inventory, included in cost of sales | (20,251) | (17,065) |
Capitalized interest in ending inventory | $ 208,639 | $ 185,051 |
Real Estate Inventories - Sched
Real Estate Inventories - Schedule of Real Estate Inventory Impairments and Land Option Abandonments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Real Estate [Abstract] | ||
Real estate inventory impairments | $ 0 | $ 0 |
Land and lot option abandonments and pre-acquisition charges | 717 | 766 |
Total | $ 717 | $ 766 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 investment | |
Minimum | |
Investment Holdings | |
Ownership percentage | 7% |
Maximum | |
Investment Holdings | |
Ownership percentage | 50% |
Homebuilding partnerships or limited liability companies | |
Investment Holdings | |
Number of equity investments | 12 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Aggregated Assets, Liabilities and Operating Results of Entities as Equity-Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Assets | |||
Cash | $ 966,298 | $ 889,664 | |
Receivables | 141,076 | 169,449 | |
Real estate inventories | 3,142,412 | 3,173,849 | |
Other assets | 163,929 | 165,687 | |
Total assets | 4,739,240 | 4,719,940 | |
Liabilities and equity | |||
Company’s equity | 2,863,623 | 2,832,389 | |
Outside interests’ equity | 2,862 | 4,142 | |
Total liabilities and equity | 4,739,240 | 4,719,940 | |
Other operations expense | (665) | $ (646) | |
Net income (loss) | 75,857 | 88,499 | |
Company’s equity in income (loss) of unconsolidated entities | 227 | (55) | |
Equity method investment, nonconsolidated investee or group of investees | |||
Assets | |||
Cash | 22,575 | 34,556 | |
Receivables | 36,298 | 30,893 | |
Real estate inventories | 451,417 | 458,121 | |
Other assets | 11,237 | 7,751 | |
Total assets | 521,527 | 531,321 | |
Liabilities and equity | |||
Accounts payable and other liabilities | 145,388 | 149,172 | |
Company’s equity | 134,071 | 129,837 | |
Outside interests’ equity | 242,068 | 252,312 | |
Total liabilities and equity | 521,527 | $ 531,321 | |
Net sales | 22,138 | 5,323 | |
Other operations expense | (21,653) | (5,444) | |
Other loss, net | (3) | 0 | |
Net income (loss) | 482 | (121) | |
Company’s equity in income (loss) of unconsolidated entities | $ 227 | $ (9) |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Interests in Land Option Agreements (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity | ||
Deposits | $ 215,628 | $ 228,892 |
Remaining Purchase Price | 1,226,189 | 1,340,333 |
Consolidated Inventory Held by VIEs | 0 | 0 |
Unconsolidated VIEs | ||
Variable Interest Entity | ||
Deposits | 200,168 | 207,846 |
Remaining Purchase Price | 1,055,531 | 1,129,369 |
Other land option agreements | ||
Variable Interest Entity | ||
Deposits | 15,460 | 21,046 |
Remaining Purchase Price | $ 170,658 | $ 210,964 |
Variable Interest Entities -Nar
Variable Interest Entities -Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity | ||
Other assets | $ 163,929 | $ 165,687 |
Accrued expenses and other liabilities | 436,275 | 443,034 |
Noncontrolling interests | 2,862 | 4,142 |
Other land option agreements | ||
Variable Interest Entity | ||
Capitalized pre-acquisition costs | 14,300 | $ 13,800 |
Consolidated VIEs | ||
Variable Interest Entity | ||
Cash | 6,400 | |
Other assets | 5,100 | |
Accrued expenses and other liabilities | 3,400 | |
Noncontrolling interests | $ 2,900 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets - Narrative (Details) $ in Thousands | Mar. 31, 2023 USD ($) intangible_asset | Dec. 31, 2022 USD ($) intangible_asset |
Schedule Of Intangible Assets And Goodwill | ||
Goodwill | $ 139,300 | $ 139,300 |
WRECO | Trade Names | ||
Schedule Of Intangible Assets And Goodwill | ||
Trade names, net carrying amount | $ 17,300 | $ 17,300 |
WRECO | Trade Names | ||
Schedule Of Intangible Assets And Goodwill | ||
Number of intangible assets | intangible_asset | 1 | 1 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 17,959 | $ 20,471 |
Refundable fees and other deposits | 7,107 | 5,226 |
Development rights, held for future use or sale | 1,192 | 1,192 |
Deferred loan costs—loans payable | 6,155 | 6,515 |
Operating properties and equipment, net | 66,880 | 67,430 |
Lease right-of-use assets | 63,700 | 63,918 |
Other | 936 | 935 |
Total | $ 163,929 | $ 165,687 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total | Total |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||||
Accrued payroll and related costs | $ 22,352 | $ 60,682 | ||
Warranty reserves | 101,527 | 104,375 | $ 103,034 | $ 103,976 |
Estimated cost for completion of real estate inventories | 107,792 | 108,072 | ||
Customer deposits | 43,439 | 42,027 | ||
Accrued income taxes payable | 44,193 | 17,280 | ||
Accrued interest | 23,972 | 9,351 | ||
Other tax liability | 2,741 | 4,099 | ||
Lease liabilities | 77,472 | 77,728 | ||
Other | 12,787 | 19,420 | ||
Total | $ 436,275 | $ 443,034 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Total | Total |
Senior Notes and Loans Payabl_2
Senior Notes and Loans Payable - Schedule of Senior Notes (Details) - Senior Notes - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2020 | Jun. 30, 2017 |
Debt Instrument | ||||
Discount and deferred loan costs | $ (8,491) | $ (9,376) | ||
Total | $ 1,091,509 | $ 1,090,624 | ||
5.875% Senior Notes due June 15, 2024 | ||||
Debt Instrument | ||||
Interest rate on senior note (percent) | 5.875% | 5.875% | 5.875% | |
Long-term debt, gross | $ 450,000 | $ 450,000 | ||
5.250% Senior Notes due June 1, 2027 | ||||
Debt Instrument | ||||
Interest rate on senior note (percent) | 5.25% | 5.25% | 5.25% | |
Long-term debt, gross | $ 300,000 | $ 300,000 | ||
5.700% Senior Notes due June 15, 2028 | ||||
Debt Instrument | ||||
Interest rate on senior note (percent) | 5.70% | 5.70% | 5.70% | |
Long-term debt, gross | $ 350,000 | $ 350,000 |
Senior Notes and Loans Payabl_3
Senior Notes and Loans Payable - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||||
Jun. 29, 2022 USD ($) | Jun. 30, 2020 USD ($) | Jun. 30, 2017 USD ($) | Mar. 31, 2023 USD ($) loan | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) loan | Jun. 28, 2022 USD ($) | |
Debt Instrument | |||||||
Capitalization of deferred finance costs | $ 6,155,000 | $ 6,515,000 | |||||
Accrued interest | 23,972,000 | 9,351,000 | |||||
Loans payable | $ 287,427,000 | $ 287,427,000 | |||||
Number of seller-financed loans | loan | 1,000 | 1,000 | |||||
Interest incurred | $ 37,479,000 | $ 28,553,000 | |||||
Term loan facility | |||||||
Debt Instrument | |||||||
Amortization of deferred financing costs | 1,200,000 | $ 1,100,000 | |||||
Senior Notes | |||||||
Debt Instrument | |||||||
Capitalization of deferred finance costs | 7,200,000 | $ 7,800,000 | |||||
Accrued interest | $ 18,800,000 | 3,200,000 | |||||
Seller financed loans | |||||||
Debt Instrument | |||||||
Interest rate on debt instrument (percent) | 4.50% | ||||||
Loans payable | $ 37,427,000 | $ 37,427,000 | |||||
5.700% Senior Notes due June 15, 2028 | Senior Notes | |||||||
Debt Instrument | |||||||
Aggregate principal amount | $ 350,000,000 | ||||||
Interest rate on debt instrument (percent) | 5.70% | 5.70% | 5.70% | ||||
Debt issuance, percentage of aggregate principal (percent) | 100% | ||||||
Proceeds from issuance of senior notes, net | $ 345,200,000 | ||||||
5.250% Senior Notes due June 1, 2027 | Senior Notes | |||||||
Debt Instrument | |||||||
Aggregate principal amount | $ 300,000,000 | ||||||
Interest rate on debt instrument (percent) | 5.25% | 5.25% | 5.25% | ||||
Debt issuance, percentage of aggregate principal (percent) | 100% | ||||||
Proceeds from issuance of senior notes, net | $ 296,300,000 | ||||||
5.875% Senior Notes due June 15, 2024 | Senior Notes | |||||||
Debt Instrument | |||||||
Aggregate principal amount | $ 450,000,000 | ||||||
Interest rate on debt instrument (percent) | 5.875% | 5.875% | 5.875% | ||||
Proceeds from issuance of senior notes, net | $ 429,000,000 | ||||||
Notes issue price as a percentage of principal amount | 98.15% | ||||||
Revolving Facility | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Maximum borrowing capacity under facility | $ 750,000,000 | $ 650,000,000 | |||||
Amended Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Capitalization of deferred finance costs | $ 6,200,000 | ||||||
Accrued interest | 346,000 | $ 1,500,000 | |||||
Loans payable | 0 | ||||||
Line of credit facility, current borrowing capacity | 691,400,000 | ||||||
Amended Revolving Credit Facility | Revolving Credit Facility | Minimum | |||||||
Debt Instrument | |||||||
Debt instrument variable interest rate (percent) | 1.25% | ||||||
Amended Revolving Credit Facility | Revolving Credit Facility | Maximum | |||||||
Debt Instrument | |||||||
Debt instrument variable interest rate (percent) | 1.90% | ||||||
Amended Revolving Credit Facility | Letters of Credit | |||||||
Debt Instrument | |||||||
Maximum borrowing capacity under facility | $ 150,000,000 | $ 100,000,000 | |||||
Outstanding letters of credit | $ 58,600,000 | 58,900,000 | |||||
Revolving Facility and Term Loan Facility | |||||||
Debt Instrument | |||||||
Line of credit facility, potential maximum borrowing capacity under specified conditions | $ 1,200,000,000 | ||||||
Consolidated tangible net worth attributed to Company required under covenants (percent) | 95% | ||||||
Term Loan Facility | Term loan facility | |||||||
Debt Instrument | |||||||
Loans payable | $ 250,000,000 | $ 250,000,000 | |||||
Interest rate of outstanding debt (percent) | 4.55% | ||||||
Term Loan Facility | Term loan facility | Minimum | |||||||
Debt Instrument | |||||||
Debt instrument variable interest rate (percent) | 1.10% | ||||||
Term Loan Facility | Term loan facility | Maximum | |||||||
Debt Instrument | |||||||
Debt instrument variable interest rate (percent) | 1.85% |
Senior Notes and Loans Payabl_4
Senior Notes and Loans Payable - Schedule of Outstanding Loans Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Line of Credit Facility | ||
Loans payable | $ 287,427 | $ 287,427 |
Seller financed loans | ||
Line of Credit Facility | ||
Loans payable | 37,427 | 37,427 |
Term loan facility | Term loan facility | ||
Line of Credit Facility | ||
Loans payable | $ 250,000 | $ 250,000 |
Fair Value Disclosures - Summar
Fair Value Disclosures - Summary of Assets and Liabilities Related to Financial Instruments, Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred loan costs | $ 6,155 | $ 6,515 |
Term Loan | Level 2 | Recurring | Book Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | 250,000 | 250,000 |
Term Loan | Level 2 | Recurring | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | 250,000 | 250,000 |
Senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred loan costs | 7,200 | 7,800 |
Senior notes | Level 2 | Recurring | Book Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | 1,098,685 | 1,098,425 |
Senior notes | Level 2 | Recurring | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | 1,041,250 | 1,040,750 |
Seller financed loans | Level 2 | Recurring | Book Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | 37,427 | 37,427 |
Seller financed loans | Level 2 | Recurring | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets and liabilities related to financial instruments | $ 37,427 | $ 37,427 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 1987 lease leaseRenewalOption | Dec. 31, 1987 leaseExtension lease | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Commitment And Contingencies [Line Items] | ||||
Legal reserves | $ 0 | $ 0 | ||
Outstanding warranty insurance receivables | 56,367,000 | 56,367,000 | ||
Estimated remaining liabilities related to surety bonds | $ 12,787,000 | 19,420,000 | ||
Office Leases | ||||
Commitment And Contingencies [Line Items] | ||||
Lease obligation original term (in years) | 10 years | |||
Equipment Leases | Minimum | ||||
Commitment And Contingencies [Line Items] | ||||
Lease obligation original term (in years) | 3 years | |||
Equipment Leases | Maximum | ||||
Commitment And Contingencies [Line Items] | ||||
Lease obligation original term (in years) | 4 years | |||
Ground leases | ||||
Commitment And Contingencies [Line Items] | ||||
Lease obligation original term (in years) | 55 years | 55 years | ||
Number of properties subject to ground leases | lease | 2 | 2 | ||
Ground leases | Ten Year Renewal Option | ||||
Commitment And Contingencies [Line Items] | ||||
Number of lease renewal options | 3 | 3 | ||
Term of lease extension (in years) | 10 years | 10 years | ||
Ground leases | Forty-five Year Renewal Option | ||||
Commitment And Contingencies [Line Items] | ||||
Lease obligation original term (in years) | 45 years | 45 years | ||
Number of properties subject to ground leases | lease | 1 | 1 | ||
Ground leases | Extension Through 2071 | ||||
Commitment And Contingencies [Line Items] | ||||
Number of ground leases extended | leaseExtension | 1 | |||
Surety Bonds | ||||
Commitment And Contingencies [Line Items] | ||||
Outstanding surety bonds | $ 692,000,000 | 710,800,000 | ||
Estimated remaining liabilities related to surety bonds | $ 411,100,000 | $ 443,700,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Movement in Standard Product Warranty Accrual | ||
Warranty reserves, beginning of period | $ 104,375 | $ 103,976 |
Warranty reserves accrued | 5,902 | 4,721 |
Warranty expenditures | (8,750) | (5,663) |
Warranty reserves, end of period | $ 101,527 | $ 103,034 |
Commitments and Contingencies_3
Commitments and Contingencies - Lease Costs and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Lessee, Lease, Description | |||
Net lease cost | $ 2,835 | $ 2,490 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,927 | 83 | |
Operating leases | |||
Lessee, Lease, Description | |||
Lease cost | 2,845 | 2,499 | |
Sublease income, ground leases (included in other operations revenue) | 0 | 0 | |
Cash paid for amounts included in the measurement of lease liabilities | $ 2,429 | 3,381 | |
Weighted-average discount rate (percent) | 4.70% | 4.70% | |
Weighted-average remaining lease term (in years) | 6 years 9 months 18 days | 7 years | |
Ground leases | |||
Lessee, Lease, Description | |||
Lease cost | $ 663 | 635 | |
Sublease income, ground leases (included in other operations revenue) | (673) | (644) | |
Cash paid for amounts included in the measurement of lease liabilities | $ 663 | $ 663 | |
Weighted-average discount rate (percent) | 10.20% | 10.20% | |
Weighted-average remaining lease term (in years) | 45 years 1 month 6 days | 45 years 3 months 18 days |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description | ||
Present value of operating lease liabilities | $ 77,472 | $ 77,728 |
Operating leases | ||
Lessee, Lease, Description | ||
Remaining in 2023 | 6,973 | |
2024 | 9,106 | |
2025 | 8,717 | |
2026 | 7,633 | |
2027 | 6,893 | |
Thereafter | 18,092 | |
Total lease payments | 57,414 | |
Less: Interest | 8,215 | |
Present value of operating lease liabilities | 49,199 | |
Ground leases | ||
Lessee, Lease, Description | ||
Remaining in 2023 | 2,428 | |
2024 | 3,237 | |
2025 | 3,237 | |
2026 | 3,237 | |
2027 | 3,237 | |
Thereafter | 78,640 | |
Total lease payments | 94,016 | |
Less: Interest | 65,743 | |
Present value of operating lease liabilities | 28,273 | |
Payments to be received | $ 60,200 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Feb. 22, 2023 | Feb. 22, 2022 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Unrecognized stock based compensation related to all stock-based awards | $ 32.4 | ||
Weighted average period, expense to recognized (in years) | 2 years 3 months 18 days | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Restricted stock units, granted (in shares) | 1,209,608 | ||
Granted (in dollars per share) | $ 23.21 | ||
Restricted Stock Units (RSUs) | Employees and Officers | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Restricted stock units, granted (in shares) | 505,200 | 629,520 | |
Award vesting period (in years) | 3 years | 3 years | |
Share price (in dollars per share) | $ 23.21 | $ 21 | |
Restricted Stock Units (RSUs) | Officers | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Restricted stock units, granted (in shares) | 704,408 | 668,150 | |
Granted (in dollars per share) | $ 23.21 | $ 22.30 | |
Potential change in TSR (percent) | 25% | ||
Restricted Stock Units (RSUs) | Officers | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights (percent) | 0% | ||
Restricted Stock Units (RSUs) | Officers | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights (percent) | 100% | ||
Restricted Stock Units (RSUs) | Officers | Homebuilding Revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance percentage (percent) | 50% | ||
Restricted Stock Units (RSUs) | Officers | Pre-tax Earnings | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance percentage (percent) | 50% | ||
Restricted Stock Units (RSUs) | Division Presidents | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Restricted stock units, granted (in shares) | 235,078 | ||
Granted (in dollars per share) | $ 21 | ||
Restricted Stock Units (RSUs) | Division Presidents | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights (percent) | 0% | ||
Restricted Stock Units (RSUs) | Division Presidents | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights (percent) | 100% | ||
Restricted Stock Units (RSUs) | Division Presidents | Homebuilding Revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance percentage (percent) | 50% | ||
Restricted Stock Units (RSUs) | Division Presidents | Pre-tax Earnings | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Performance percentage (percent) | 50% | ||
2022 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock authorized for incentive plan (in shares) | 7,500,000 | ||
Shares available for future grant (in shares) | 6,415,172 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Compensation Expense Recognized Related to all Stock-Based Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Total stock-based compensation | $ 3,861 | $ 5,272 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Awards (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Options | ||
Options outstanding at beginning of period (in shares) | 159,255 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (48,592) | |
Options forfeited (in shares) | 0 | |
Options outstanding at end of period (in shares) | 110,663 | 159,255 |
Options exercisable at end of period (in shares) | 110,663 | |
Weighted Average Exercise Price Per Share | ||
Beginning balance (in dollars per share) | $ 15.08 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 14.87 | |
Forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | 15.17 | $ 15.08 |
Exercisable at end of period (in dollars per share) | $ 15.17 | |
Weighted average contractual life | 10 months 24 days | 10 months 24 days |
Weighted average options exercisable | 10 months 24 days | |
Aggregate intrinsic value | $ 1,064 | $ 565 |
Aggregate intrinsic value, exercisable at end of period | $ 1,064 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Restricted Stock Units | ||
Nonvested RSU's beginning balance (in shares) | 3,679,521 | |
Granted (in shares) | 1,209,608 | |
Vested (in shares) | (1,133,424) | |
Forfeited (in shares) | (126,093) | |
Nonvested RSU's ending balance (in shares) | 3,629,612 | |
Weighted Average Grant Date Fair Value Per Share | ||
Beginning balance (in dollars per share) | $ 19.93 | |
Granted (in dollars per share) | 23.21 | |
Vested (in dollars per share) | 19.18 | |
Forfeited (in dollars per share) | 18.24 | |
Ending balance (in dollars per share) | $ 21.28 | |
Aggregate intrinsic value | $ 77,238 | $ 68,402 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax assets, net | $ 34,851 | $ 34,851 | |
Valuation allowance related to net deferred tax assets | 3,400 | $ 3,400 | |
Provision for income taxes | $ 27,350 | $ 30,225 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Related party transactions | $ 0 | $ 0 |
Supplemental Disclosure to Co_3
Supplemental Disclosure to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental disclosure of cash flow information: | ||
Interest paid (capitalized), net | $ (15,866) | $ (17,869) |
Income taxes paid, net | 329 | 0 |
Supplemental disclosures of noncash activities: | ||
Amortization of senior note discount capitalized to real estate inventory | 259 | 243 |
Amortization of deferred loan costs capitalized to real estate inventory | $ 986 | $ 889 |