Exhibit 99.1
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TRI POINTE GROUP, INC. REPORTS 2018 FIRST QUARTER RESULTS

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

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

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

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Forward-Looking Statements
Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements.  These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending.  Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes.  The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly.  These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control.  The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; levels of competition; the successful execution of our internal performance plans, including any restructuring and cost reduction initiatives; global economic conditions; raw material prices; oil and other energy prices; the effect of weather, including the re-occurrence of drought conditions in California; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; transportation costs; federal and state tax policies; the effect of land use, environment and other governmental regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our customers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission.  The foregoing list is not exhaustive.  New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.
Investor Relations Contact:
Chris Martin, TRI Pointe Group
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TRIPointeGroup.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045
 
 

 

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KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)
 
Three Months Ended March 31,
 
2018
 
2017
 
Change
Operating Data:
 
 
 
 
 
Home sales revenue
$
582,572

 
$
392,004

 
$
190,568

Homebuilding gross margin
$
132,070

 
$
73,600

 
$
58,470

Homebuilding gross margin %
22.7
%
 
18.8
%
 
3.9
 %
Adjusted homebuilding gross margin %*
25.2
%
 
21.3
%
 
3.9
 %
SG&A expense
$
75,097

 
$
61,349

 
$
13,748

SG&A expense as a % of home sales
   revenue
12.9
%
 
15.7
%
 
(2.8
)%
Net income available to common
   stockholders
$
42,880

 
$
8,193

 
$
34,687

Adjusted EBITDA*
$
80,988

 
$
27,681

 
$
53,307

Interest incurred
$
21,520

 
$
18,873

 
$
2,647

Interest in cost of home sales
$
14,229

 
$
9,680

 
$
4,549

 
 
 
 
 
 
Other Data:
 
 
 
 
 
Net new home orders
1,496

 
1,299

 
197

New homes delivered
924

 
758

 
166

Average sales price of homes delivered
$
630

 
$
517

 
$
113

Average selling communities
129.8

 
125.5

 
4.3

Selling communities at end of period
131

 
123

 
8

Cancellation rate
14
%
 
14
%
 
0
 %
Backlog (estimated dollar value)
$
1,409,042

 
$
1,014,163

 
$
394,879

Backlog (homes)
2,143

 
1,734

 
409

Average sales price in backlog
$
658

 
$
585

 
$
73

 
 
 
 
 
 
 
March 31,
 
December 31,
 
 
 
2018
 
2017
 
Change
Balance Sheet Data:
 
 
 
 
 
Cash and cash equivalents
$
324,608

 
$
282,914

 
$
41,694

Real estate inventories
$
3,145,555

 
$
3,105,553

 
$
40,002

Lots owned or controlled
28,191

 
27,312

 
879

Homes under construction (1)
2,282

 
1,941

 
341

Homes completed, unsold
201

 
269

 
(68
)
Debt
$
1,473,074

 
$
1,471,302

 
$
1,772

Stockholders' equity
$
1,963,644

 
$
1,929,722

 
$
33,922

Book capitalization
$
3,436,718

 
$
3,401,024

 
$
35,694

Ratio of debt-to-capital
42.9
%
 
43.3
%
 
(0.4
)%
Ratio of net debt-to-net capital*
36.9
%
 
38.1
%
 
(1.2
)%
__________
(1)  
Homes under construction included 80 and 60 models at March 31, 2018 and December 31, 2017, respectively.
*
See “Reconciliation of Non-GAAP Financial Measures”

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CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 
 
March 31,
 
December 31,
 
2018
 
2017
Assets
(unaudited)
 
 
Cash and cash equivalents
$
324,608

 
$
282,914

Receivables
55,249

 
125,600

Real estate inventories
3,145,555

 
3,105,553

Investments in unconsolidated entities
4,699

 
5,870

Goodwill and other intangible assets, net
160,827

 
160,961

Deferred tax assets, net
73,818

 
76,413

Other assets
82,005

 
48,070

Total assets
$
3,846,761

 
$
3,805,381

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
76,249

 
$
72,870

Accrued expenses and other liabilities
333,190

 
330,882

Senior notes
1,473,074

 
1,471,302

Total liabilities
1,882,513

 
1,875,054

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity
 
 
 
Stockholders' Equity:
 
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of March 31, 2018 and
December 31, 2017, respectively

 

Common stock, $0.01 par value, 500,000,000 shares authorized;
  151,922,459 and 151,162,999 shares issued and outstanding at
   March 31, 2018 and December 31, 2017, respectively
1,519

 
1,512

Additional paid-in capital
792,369

 
793,980

Retained earnings
1,169,756

 
1,134,230

Total stockholders' equity
1,963,644

 
1,929,722

Noncontrolling interests
604

 
605

Total equity
1,964,248

 
1,930,327

Total liabilities and equity
$
3,846,761

 
$
3,805,381



 

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CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
 
Three Months Ended March 31,
 
2018
 
2017
Homebuilding:
 

 
 

Home sales revenue
$
582,572

 
$
392,004

Land and lot sales revenue
223

 
578

Other operations revenue
598

 
568

Total revenues
583,393

 
393,150

Cost of home sales
450,502

 
318,404

Cost of land and lot sales
503

 
654

Other operations expense
602

 
560

Sales and marketing
38,283

 
26,700

General and administrative
36,814

 
34,649

Homebuilding income from operations
56,689

 
12,183

Equity in (loss) income of unconsolidated entities
(468
)
 
138

Other income, net
171

 
77

Homebuilding income before income taxes
56,392

 
12,398

Financial Services:
 
 
 
Revenues
283

 
241

Expenses
137

 
74

Equity in income of unconsolidated entities
1,002

 
266

Financial services income before income taxes
1,148

 
433

Income before income taxes
57,540

 
12,831

Provision for income taxes
(14,660
)
 
(4,614
)
Net income
42,880

 
8,217

Net income attributable to noncontrolling interests

 
(24
)
Net income available to common stockholders
$
42,880

 
$
8,193

Earnings per share
 
 
 

Basic
$
0.28

 
$
0.05

Diluted
$
0.28

 
$
0.05

Weighted average shares outstanding
 
 
 

Basic
151,464,547

 
158,769,478

Diluted
152,775,851

 
159,390,586

 
 

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MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
2018
 
2017
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
Maracay Homes
125

 
$
468

 
119

 
$
429

Pardee Homes
274

 
659

 
196

 
427

Quadrant Homes
83

 
739

 
63

 
633

Trendmaker Homes
84

 
490

 
106

 
490

TRI Pointe Homes
269

 
708

 
208

 
629

Winchester Homes
89

 
570

 
66

 
524

Total
924

 
$
630

 
758

 
$
517

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2018
 
2017
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
California
400

 
$
736

 
299

 
$
570

Colorado
60

 
580

 
30

 
564

Maryland
66

 
544

 
46

 
499

Virginia
23

 
645

 
20

 
582

Arizona
125

 
468

 
119

 
429

Nevada
83

 
503

 
75

 
364

Texas
84

 
490

 
106

 
490

Washington
83

 
739

 
63

 
633

Total
924

 
$
630

 
758

 
$
517


 

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MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
Three Months Ended March 31,
 
2018
 
2017
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
Maracay Homes
153

 
13.2

 
184

 
16.5

Pardee Homes
473

 
32.5

 
378

 
28.5

Quadrant Homes
108

 
7.0

 
120

 
7.5

Trendmaker Homes
155

 
29.8

 
151

 
32.0

TRI Pointe Homes
459

 
33.8

 
353

 
29.3

Winchester Homes
148

 
13.5

 
113

 
11.7

Total
1,496

 
129.8

 
1,299

 
125.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2018
 
2017
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
California
628

 
44.5

 
564

 
41.5

Colorado
102

 
7.0

 
53

 
5.0

Maryland
100

 
9.5

 
67

 
8.0

Virginia
48

 
4.0

 
46

 
3.7

Arizona
153

 
13.2

 
184

 
16.5

Nevada
202

 
14.8

 
114

 
11.3

Texas
155

 
29.8

 
151

 
32.0

Washington
108

 
7.0

 
120

 
7.5

Total
1,496

 
129.8

 
1,299

 
125.5


 

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MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)
 
 
As of March 31, 2018
 
As of March 31, 2017
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
Maracay Homes
245

 
$
123,617

 
$
505

 
313

 
$
153,389

 
$
490

Pardee Homes
608

 
408,324

 
672

 
442

 
248,621

 
562

Quadrant Homes
169

 
138,025

 
817

 
158

 
111,551

 
706

Trendmaker Homes
244

 
134,632

 
552

 
208

 
107,860

 
519

TRI Pointe Homes
667

 
474,240

 
711

 
443

 
283,986

 
641

Winchester Homes
210

 
130,204

 
620

 
170

 
108,756

 
640

Total
2,143

 
$
1,409,042

 
$
658

 
1,734

 
$
1,014,163

 
$
585

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2018
 
As of March 31, 2017
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
California
894

 
$
662,008

 
$
741

 
667

 
$
421,381

 
$
632

Colorado
142

 
81,743

 
576

 
82

 
50,100

 
611

Maryland
147

 
83,339

 
567

 
123

 
73,226

 
595

Virginia
63

 
46,865

 
744

 
47

 
35,530

 
756

Arizona
245

 
123,617

 
505

 
313

 
153,389

 
490

Nevada
239

 
138,813

 
581

 
136

 
61,126

 
449

Texas
244

 
134,632

 
552

 
208

 
107,860

 
519

Washington
169

 
138,025

 
817

 
158

 
111,551

 
706

Total
2,143

 
$
1,409,042

 
$
658

 
1,734

 
$
1,014,163

 
$
585



 

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MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
March 31,
 
December 31,
 
2018
 
2017
Lots Owned or Controlled(1):
 
 
 
Maracay Homes
3,001

 
2,519

Pardee Homes
15,613

 
15,144

Quadrant Homes
1,773

 
1,726

Trendmaker Homes
1,932

 
1,855

TRI Pointe Homes
3,717

 
3,964

Winchester Homes
2,155

 
2,104

Total
28,191

 
27,312

 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
2018
 
2017
Lots Owned or Controlled(1):
 
 
 
California
16,140

 
16,292

Colorado
782

 
742

Maryland
1,445

 
1,507

Virginia
710

 
597

Arizona
3,001

 
2,519

Nevada
2,408

 
2,074

Texas
1,932

 
1,855

Washington
1,773

 
1,726

Total
28,191

 
27,312

 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
2018
 
2017
Lots by Ownership Type:
 
 
 
Lots owned
23,690

 
23,940

Lots controlled(1)
4,501

 
3,372

Total
28,191

 
27,312

__________
(1) 
As of March 31, 2018 and December 31, 2017, lots controlled included lots that were under land option contracts or purchase contracts.
 
 

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
The following table reconciles homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.
 
 
Three Months Ended March 31,
 
2018
 
%
 
2017
 
%
 
(dollars in thousands)
Home sales revenue
$
582,572

 
100.0
%
 
$
392,004

 
100.0
%
Cost of home sales
450,502

 
77.3
%
 
318,404

 
81.2
%
Homebuilding gross margin
132,070

 
22.7
%
 
73,600

 
18.8
%
Add:  interest in cost of home sales
14,229

 
2.4
%
 
9,680

 
2.5
%
Add:  impairments and lot option abandonments
248

 
0.0
%
 
288

 
0.1
%
Adjusted homebuilding gross margin
$
146,547

 
25.2
%
 
$
83,568

 
21.3
%
Homebuilding gross margin percentage
22.7
%
 
 
 
18.8
%
 
 
Adjusted homebuilding gross margin percentage
25.2
%
 
 
 
21.3
%
 
 






 

















Page 12

tphlogo.jpg

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
 
The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.
 
 
March 31, 2018
 
December 31, 2017
Senior notes
$
1,473,074

 
$
1,471,302

Total debt
1,473,074

 
1,471,302

Stockholders’ equity
1,963,644

 
1,929,722

Total capital
$
3,436,718

 
$
3,401,024

Ratio of debt-to-capital(1)
42.9
%
 
43.3
%
 


 


Total debt
$
1,473,074

 
$
1,471,302

Less: Cash and cash equivalents
(324,608
)
 
(282,914
)
Net debt
1,148,466

 
1,188,388

Stockholders’ equity
1,963,644

 
1,929,722

Net capital
$
3,112,110

 
$
3,118,110

Ratio of net debt-to-net capital(2)
36.9
%
 
38.1
%
__________
(1) 
The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.
(2) 
The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity.
































Page 13

tphlogo.jpg

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

 
Three Months Ended March 31,
 
2018
 
2017
 
(in thousands)
Net income available to common stockholders
$
42,880

 
$
8,193

Interest expense:
 
 
 
Interest incurred
21,520

 
18,873

Interest capitalized
(21,520
)
 
(18,873
)
Amortization of interest in cost of sales
14,242

 
9,687

Provision for income taxes
14,660

 
4,614

Depreciation and amortization
5,488

 
822

EBITDA
77,270

 
23,316

Amortization of stock-based compensation
3,470

 
3,841

Impairments and lot option abandonments
248

 
321

Restructuring charges

 
203

Adjusted EBITDA
$
80,988

 
$
27,681

 
 
 
 
 
 
 
 
 
 
 

Page 14

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