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

-Home Sales Revenue up 35% on a 13% Increase in Deliveries and a 19% Increase in Average Sales Price- 
-Backlog Dollar Value up 13% on an 8% Increase in Backlog Units-
-Homebuilding Gross Margin Percentage Increased 130 Basis Points to 21.4%-
-Diluted Earnings Per Share of $0.42, up from $0.21 in the Prior Year-
Irvine, California, July 27, 2018 /Business Wire/ – TRI Pointe Group, Inc. (the "Company") (NYSE: TPH) today announced results for the second quarter ended June 30, 2018.
Results and Operational Data for Second Quarter 2018 and Comparisons to Second Quarter 2017
Net income available to common stockholders was $63.7 million, or $0.42 per diluted share, compared to $32.7 million, or $0.21 per diluted share
New home orders of 1,343 compared to 1,445, a decrease of 7%
Active selling communities averaged 130.8 compared to 126.8, an increase of 3%
New home orders per average selling community were 10.3 orders (3.4 monthly) compared to 11.4 orders (3.8 monthly)
Cancellation rate increased to 16% compared to 15%
Backlog units at quarter end of 2,271 homes compared to 2,108, an increase of 8%
Dollar value of backlog at quarter end of $1.5 billion compared to $1.3 billion, an increase of 13%
Average sales price of homes in backlog at quarter end of $668,000 compared to $635,000, an increase of 5%
Home sales revenue of $768.8 million compared to $568.8 million, an increase of 35%
New home deliveries of 1,215 homes compared to 1,071 homes, an increase of 13%
Average sales price of homes delivered of $633,000 compared to $531,000, an increase of 19%
Homebuilding gross margin percentage of 21.4% compared to 20.1%, an increase of 130 basis points
Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 24.0%*
SG&A expense as a percentage of homes sales revenue of 10.7% compared to 11.6%, a decrease of 90 basis points
Ratios of debt-to-capital and net debt-to-net capital of 41.7% and 37.4%*, respectively, as of June 30, 2018
Ended second quarter of 2018 with total liquidity of $826.7 million, including cash of $239.9 million and $586.8 million of availability under the Company's unsecured revolving credit facility
 
*    See "Reconciliation of Non-GAAP Financial Measures"
“We are very pleased with our results this quarter as we met or exceeded our guidance for deliveries, ASPs, homebuilding gross margin and SG&A leverage,” said TRI Pointe Group CEO Doug Bauer. “We generated pretax income of nearly $85 million in the quarter, representing a 63% increase over the second quarter of last year. This year-over-year increase in profits was a function of both higher revenues and better gross margins, a strong indication that our business remains on solid footing. We continue to see positive fundamentals in the overall housing market, characterized by low inventory levels, improving wage gains, employment growth and consumer demand from millennials to baby boomers. These macro fundamentals, coupled with our strong balance sheet, consistent execution and strategic focus on design and innovation have TRI Pointe Group well positioned as we head into the second half of the year.”

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Second Quarter 2018 Operating Results
Net income available to common stockholders was $63.7 million, or $0.42 per diluted share, for the second quarter of 2018, compared to net income available to common stockholders of $32.7 million, or $0.21 per diluted share, for the second quarter of 2017.  
Home sales revenue increased $200.0 million, or 35%, to $768.8 million for the second quarter of 2018, as compared to $568.8 million for the second quarter of 2017.  The increase was primarily attributable to a 19% increase in the average sales price of homes delivered to $633,000, compared to $531,000 in the second quarter of 2017, and a 13% increase in new home deliveries to 1,215, compared to 1,071 in the second quarter of 2017.
New home orders decreased 7% to 1,343 homes for the second quarter of 2018, as compared to 1,445 homes for the same period in 2017.  Average selling communities increased 3% to 130.8 for the second quarter of 2018 compared to 126.8 for the second quarter of 2017. The Company’s overall absorption rate per average selling community decreased 10% for the second quarter of 2018 to 10.3 orders (3.4 monthly) compared to 11.4 orders (3.8 monthly) during the second quarter of 2017.  
The Company ended the quarter with 2,271 homes in backlog, representing approximately $1.5 billion. The average sales price of homes in backlog as of June 30, 2018 increased $33,000, or 5%, to $668,000, compared to $635,000 as of June 30, 2017.  
Homebuilding gross margin percentage for the second quarter of 2018 increased to 21.4%, compared to 20.1% for the second quarter of 2017.  Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 24.0%* for the second quarter of 2018, compared to 22.5%* for the second quarter of 2017.  Gross margin percentage increased at each of our homebuilding segments for the quarter as compared to the prior-year period. In addition, the percentage of deliveries from California, which generally produce gross margins above the company average, increased compared to the same period in the prior year.
Selling, general and administrative ("SG&A") expense for the second quarter of 2018 decreased to 10.7% of home sales revenue as compared to 11.6% for the second quarter of 2017, primarily due to increased leverage as a result of a 35% increase in home sales revenue. 
“While we pride ourselves on consistent execution every quarter, our attention remains squarely focused on positioning our company for longer-term success,” said TRI Pointe Group Chief Operating Officer Tom Mitchell. “For TRI Pointe, that meant continuing to build out the longer-dated assets we acquired in the WRECO transaction rather than booking short term land-sale profits. Now over four years removed from this transaction, these assets continue to contribute significantly to our bottom line and provide us with a healthy runway of lots. Today, we are taking the same long-term approach with each of our brands with an eye toward increasing our local market scale and creating a more diversified company.”
* See “Reconciliation of Non-GAAP Financial Measures”
Outlook
For the third quarter of 2018, the Company expects to open 15 new communities, and close out of 17, resulting in 128 active selling communities as of September 30, 2018.  In addition, the Company anticipates delivering 50% to 55% of its 2,271 units in backlog as of June 30, 2018 at an average sales price of $630,000.  The Company anticipates its homebuilding gross margin percentage will be in a range of 21.0% to 21.5% for the third quarter. Finally, the Company expects its SG&A expense as a percentage of home sales revenue to be in the range of 10.8% to 11.2% for the third quarter.
For the full year 2018, the Company is reiterating its guidance of growing average selling communities by 5% compared to 2017 and delivering between 5,100 and 5,400 homes. The Company is increasing its expected average sales price for the full year to $625,000 from $610,000. The Company continues to expect its homebuilding gross

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margin percentage for the full year 2018 to be in the range of 21.0% to 21.5%, 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%.
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 Friday, July 27, 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 Second 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 #13681373.  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 MaracayTM 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 June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Operating Data:
 
 
 
 
 
 
 
 
 
 
 
Home sales revenue
$
768,795

 
$
568,816

 
$
199,979

 
$
1,351,367

 
$
960,820

 
$
390,547

Homebuilding gross margin
$
164,699

 
$
114,575

 
$
50,124

 
$
296,769

 
$
188,175

 
$
108,594

Homebuilding gross margin %
21.4
%
 
20.1
%
 
1.3
 %
 
22.0
%
 
19.6
%
 
2.4
 %
Adjusted homebuilding gross margin %*
24.0
%
 
22.5
%
 
1.5
 %
 
24.5
%
 
22.0
%
 
2.5
 %
SG&A expense
$
82,227

 
$
66,018

 
$
16,209

 
$
157,324

 
$
127,367

 
$
29,957

SG&A expense as a % of home sales
   revenue
10.7
%
 
11.6
%
 
(0.9
)%
 
11.6
%
 
13.3
%
 
(1.7
)%
Net income available to common
   stockholders
$
63,680

 
$
32,714

 
$
30,966

 
$
106,560

 
$
40,907

 
$
65,653

Adjusted EBITDA*
$
115,901

 
$
70,522

 
$
45,379

 
$
196,888

 
$
98,202

 
$
98,686

Interest incurred
$
21,627

 
$
19,931

 
$
1,696

 
$
43,147

 
$
38,804

 
$
4,343

Interest in cost of home sales
$
19,569

 
$
13,145

 
$
6,424

 
$
33,798

 
$
22,825

 
$
10,973

 
 
 
 
 
 
 
 
 
 
 
 
Other Data:
 
 
 
 
 
 
 
 
 
 
 
Net new home orders
1,343

 
1,445

 
(102
)
 
2,839

 
2,744

 
95

New homes delivered
1,215

 
1,071

 
144

 
2,139

 
1,829

 
310

Average sales price of homes delivered
$
633

 
$
531

 
$
102

 
$
632

 
$
525

 
$
107

Cancellation rate
16
%
 
15
%
 
1
 %
 
15
%
 
15
%
 
0
 %
Average selling communities
130.8

 
126.8

 
4.0

 
130.1

 
126.6

 
3.5

Selling communities at end of period
130

 
131

 
(1
)
 
 
 
 
 
 
Backlog (estimated dollar value)
$
1,518,096

 
$
1,339,217

 
$
178,879

 
 
 
 
 
 
Backlog (homes)
2,271

 
2,108

 
163

 
 
 
 
 
 
Average sales price in backlog
$
668

 
$
635

 
$
33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
 
 
 
 
2018
 
2017
 
Change
 
 
 
 
 
 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
239,906

 
$
282,914

 
$
(43,008
)
 
 
 
 
 
 
Real estate inventories
$
3,247,786

 
$
3,105,553

 
$
142,233

 
 
 
 
 
 
Lots owned or controlled
28,829

 
27,312

 
1,517

 
 
 
 
 
 
Homes under construction (1)
2,925

 
1,941

 
984

 
 
 
 
 
 
Homes completed, unsold
172

 
269

 
(97
)
 
 
 
 
 
 
Debt
$
1,453,366

 
$
1,471,302

 
$
(17,936
)
 
 
 
 
 
 
Stockholders' equity
$
2,031,702

 
$
1,929,722

 
$
101,980

 
 
 
 
 
 
Book capitalization
$
3,485,068

 
$
3,401,024

 
$
84,044

 
 
 
 
 
 
Ratio of debt-to-capital
41.7
%
 
43.3
%
 
(1.6
)%
 
 
 
 
 
 
Ratio of net debt-to-net capital*
37.4
%
 
38.1
%
 
(0.7
)%
 
 
 
 
 
 
__________
(1)  
Homes under construction included 88 and 60 models at June 30, 2018 and December 31, 2017, respectively.
*
See “Reconciliation of Non-GAAP Financial Measures”

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CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
 
June 30,
 
December 31,
 
2018
 
2017
Assets
(unaudited)
 
 
Cash and cash equivalents
$
239,906

 
$
282,914

Receivables
59,611

 
125,600

Real estate inventories
3,247,786

 
3,105,553

Investments in unconsolidated entities
4,169

 
5,870

Goodwill and other intangible assets, net
160,694

 
160,961

Deferred tax assets, net
66,414

 
76,413

Other assets
94,105

 
48,070

Total assets
$
3,872,685

 
$
3,805,381

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
88,936

 
$
72,870

Accrued expenses and other liabilities
298,077

 
330,882

Senior notes
1,453,366

 
1,471,302

Total liabilities
1,840,379

 
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 June 30, 2018 and
December 31, 2017, respectively

 

Common stock, $0.01 par value, 500,000,000 shares authorized;
  152,027,014 and 151,162,999 shares issued and outstanding at
   June 30, 2018 and December 31, 2017, respectively
1,520

 
1,512

Additional paid-in capital
796,746

 
793,980

Retained earnings
1,233,436

 
1,134,230

Total stockholders' equity
2,031,702

 
1,929,722

Noncontrolling interests
604

 
605

Total equity
2,032,306

 
1,930,327

Total liabilities and equity
$
3,872,685

 
$
3,805,381



 

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CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Homebuilding:
 

 
 

 
 
 
 
Home sales revenue
$
768,795

 
$
568,816

 
$
1,351,367

 
$
960,820

Land and lot sales revenue
1,518

 
865

 
1,741

 
1,443

Other operations revenue
599

 
600

 
1,197

 
1,168

Total revenues
770,912

 
570,281

 
1,354,305

 
963,431

Cost of home sales
604,096

 
454,241

 
1,054,598

 
772,645

Cost of land and lot sales
1,426

 
644

 
1,929

 
1,298

Other operations expense
589

 
591

 
1,191

 
1,151

Sales and marketing
45,744

 
32,330

 
84,027

 
59,030

General and administrative
36,483

 
33,688

 
73,297

 
68,337

Homebuilding income from operations
82,574

 
48,787

 
139,263

 
60,970

Equity in income (loss) of unconsolidated entities
69

 
1,508

 
(399
)
 
1,646

Other (expense) income, net
(73
)
 
44

 
98

 
121

Homebuilding income before income taxes
82,570

 
50,339

 
138,962

 
62,737

Financial Services:
 
 
 
 
 
 
 
Revenues
391

 
345

 
674

 
586

Expenses
129

 
77

 
266

 
151

Equity in income of unconsolidated entities
1,984

 
1,294

 
2,986

 
1,560

Financial services income before income taxes
2,246

 
1,562

 
3,394

 
1,995

Income before income taxes
84,816

 
51,901

 
142,356

 
64,732

Provision for income taxes
(21,136
)
 
(19,098
)
 
(35,796
)
 
(23,712
)
Net income
63,680

 
32,803

 
106,560

 
41,020

Net income attributable to noncontrolling interests

 
(89
)
 

 
(113
)
Net income available to common stockholders
$
63,680

 
$
32,714

 
$
106,560

 
$
40,907

Earnings per share
 
 
 

 
 
 
 

Basic
$
0.42

 
$
0.21

 
$
0.70

 
$
0.26

Diluted
$
0.42

 
$
0.21

 
$
0.70

 
$
0.26

Weighted average shares outstanding
 
 
 

 
 
 
 
Basic
151,983,886

 
155,603,699

 
151,725,651

 
157,335,296

Diluted
153,355,965

 
156,140,543

 
153,067,342

 
157,924,561

 
 

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MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maracay
121

 
$
471

 
164

 
$
462

 
246

 
$
469

 
283

 
$
448

Pardee Homes
377

 
645

 
372

 
485

 
651

 
651

 
568

 
465

Quadrant Homes
85

 
762

 
64

 
620

 
168

 
751

 
127

 
626

Trendmaker Homes
155

 
492

 
133

 
487

 
239

 
491

 
239

 
488

TRI Pointe Homes
347

 
737

 
243

 
635

 
616

 
724

 
451

 
632

Winchester Homes
130

 
553

 
95

 
569

 
219

 
560

 
161

 
550

Total
1,215

 
$
633

 
1,071

 
$
531

 
2,139

 
$
632

 
1,829

 
$
525

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
California
516

 
$
746

 
438

 
$
580

 
916

 
$
741

 
737

 
$
576

Colorado
59

 
605

 
37

 
617

 
119

 
593

 
67

 
593

Maryland
100

 
540

 
69

 
526

 
166

 
542

 
115

 
515

Virginia
30

 
596

 
26

 
681

 
53

 
617

 
46

 
638

Arizona
121

 
471

 
164

 
462

 
246

 
469

 
283

 
448

Nevada
149

 
526

 
140

 
412

 
232

 
518

 
215

 
395

Texas
155

 
492

 
133

 
487

 
239

 
491

 
239

 
488

Washington
85

 
762

 
64

 
620

 
168

 
751

 
127

 
626

Total
1,215

 
$
633

 
1,071

 
$
531

 
2,139

 
$
632

 
1,829

 
$
525


 

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MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maracay
132

 
14.2

 
162

 
16.0

 
285

 
13.6

 
346

 
16.1

Pardee Homes
464

 
33.5

 
483

 
28.8

 
937

 
33.1

 
861

 
28.6

Quadrant Homes
54

 
6.3

 
107

 
6.8

 
162

 
6.6

 
227

 
7.3

Trendmaker Homes
161

 
29.0

 
129

 
31.7

 
316

 
29.3

 
280

 
31.9

TRI Pointe Homes
408

 
33.8

 
413

 
31.5

 
867

 
33.6

 
766

 
30.7

Winchester Homes
124

 
14.0

 
151

 
12.0

 
272

 
13.9

 
264

 
12.0

Total
1,343

 
130.8

 
1,445

 
126.8

 
2,839

 
130.1

 
2,744

 
126.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
California
607

 
45.3

 
689

 
42.5

 
1,235

 
44.8

 
1,253

 
42.3

Colorado
77

 
6.8

 
51

 
6.5

 
179

 
6.9

 
104

 
5.9

Maryland
85

 
9.0

 
117

 
9.0

 
185

 
9.3

 
184

 
8.6

Virginia
39

 
5.0

 
34

 
3.0

 
87

 
4.5

 
80

 
3.4

Arizona
132

 
14.2

 
162

 
16.0

 
285

 
13.7

 
346

 
16.1

Nevada
188

 
15.2

 
156

 
11.3

 
390

 
15.0

 
270

 
11.1

Texas
161

 
29.0

 
129

 
31.7

 
316

 
29.3

 
280

 
31.9

Washington
54

 
6.3

 
107

 
6.8

 
162

 
6.6

 
227

 
7.3

Total
1,343

 
130.8

 
1,445

 
126.8

 
2,839

 
130.1

 
2,744

 
126.6


 

Page 9

tphlogo.jpg

MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)
 
 
As of June 30, 2018
 
As of June 30, 2017
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
Maracay
256

 
$
134,138

 
$
524

 
311

 
$
156,611

 
$
504

Pardee Homes
695

 
451,860

 
650

 
553

 
369,021

 
667

Quadrant Homes
138

 
130,270

 
944

 
201

 
144,204

 
717

Trendmaker Homes
250

 
145,046

 
580

 
204

 
105,663

 
518

TRI Pointe Homes
728

 
523,907

 
720

 
613

 
428,281

 
699

Winchester Homes
204

 
132,875

 
651

 
226

 
135,437

 
599

Total
2,271

 
$
1,518,096

 
$
668

 
2,108

 
$
1,339,217

 
$
635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2018
 
As of June 30, 2017
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
California
985

 
$
719,113

 
$
730

 
918

 
$
660,548

 
$
720

Colorado
160

 
88,902

 
556

 
96

 
60,686

 
632

Maryland
132

 
75,129

 
569

 
171

 
96,443

 
564

Virginia
72

 
57,746

 
802

 
55

 
38,994

 
709

Arizona
256

 
134,138

 
524

 
311

 
156,611

 
504

Nevada
278

 
167,752

 
603

 
152

 
76,068

 
500

Texas
250

 
145,046

 
580

 
204

 
105,663

 
518

Washington
138

 
130,270

 
944

 
201

 
144,204

 
717

Total
2,271

 
$
1,518,096

 
$
668

 
2,108

 
$
1,339,217

 
$
635



 

Page 10

tphlogo.jpg

MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
June 30,
 
December 31,
 
2018
 
2017
Lots Owned or Controlled(1):
 
 
 
Maracay
3,056

 
2,519

Pardee Homes
15,824

 
15,144

Quadrant Homes
1,832

 
1,726

Trendmaker Homes
1,924

 
1,855

TRI Pointe Homes
4,168

 
3,964

Winchester Homes
2,025

 
2,104

Total
28,829

 
27,312

 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
2018
 
2017
Lots Owned or Controlled(1):
 
 
 
California
16,608

 
16,292

Colorado
723

 
742

Maryland
1,345

 
1,507

Virginia
680

 
597

Arizona
3,056

 
2,519

Nevada
2,661

 
2,074

Texas
1,924

 
1,855

Washington
1,832

 
1,726

Total
28,829

 
27,312

 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
2018
 
2017
Lots by Ownership Type:
 
 
 
Lots owned
23,561

 
23,940

Lots controlled(1)
5,268

 
3,372

Total
28,829

 
27,312

__________
(1) 
As of June 30, 2018 and December 31, 2017, lots controlled included lots that were under land option contracts or purchase contracts.
 
 

Page 11

tphlogo.jpg

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
The following tables reconcile homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.
 
 
Three Months Ended June 30,
 
2018
 
%
 
2017
 
%
 
(dollars in thousands)
Home sales revenue
$
768,795

 
100.0
%
 
$
568,816

 
100.0
%
Cost of home sales
604,096

 
78.6
%
 
454,241

 
79.9
%
Homebuilding gross margin
164,699

 
21.4
%
 
114,575

 
20.1
%
Add:  interest in cost of home sales
19,569

 
2.5
%
 
13,145

 
2.3
%
Add:  impairments and lot option abandonments
609

 
0.1
%
 
507

 
0.1
%
Adjusted homebuilding gross margin
$
184,877

 
24.0
%
 
$
128,227

 
22.5
%
Homebuilding gross margin percentage
21.4
%
 
 
 
20.1
%
 
 
Adjusted homebuilding gross margin percentage
24.0
%
 
 
 
22.5
%
 
 


 
Six Months Ended June 30,
 
2018
 
%
 
2017
 
%
 
(dollars in thousands)
Home sales revenue
$
1,351,367

 
100.0
%
 
$
960,820

 
100.0
%
Cost of home sales
1,054,598

 
78.0
%
 
772,645

 
80.4
%
Homebuilding gross margin
296,769

 
22.0
%
 
188,175

 
19.6
%
Add:  interest in cost of home sales
33,798

 
2.5
%
 
22,825

 
2.4
%
Add:  impairments and lot option abandonments
857

 
0.1
%
 
795

 
0.1
%
Adjusted homebuilding gross margin
$
331,424

 
24.5
%
 
$
211,795

 
22.0
%
Homebuilding gross margin percentage
22.0
%
 
 
 
19.6
%
 
 
Adjusted homebuilding gross margin percentage
24.5
%
 
 
 
22.0
%
 
 




 



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.
 
 
June 30, 2018
 
December 31, 2017
Senior notes
$
1,453,366

 
$
1,471,302

Total debt
1,453,366

 
1,471,302

Stockholders’ equity
2,031,702

 
1,929,722

Total capital
$
3,485,068

 
$
3,401,024

Ratio of debt-to-capital(1)
41.7
%
 
43.3
%
 


 


Total debt
$
1,453,366

 
$
1,471,302

Less: Cash and cash equivalents
(239,906
)
 
(282,914
)
Net debt
1,213,460

 
1,188,388

Stockholders’ equity
2,031,702

 
1,929,722

Net capital
$
3,245,162

 
$
3,118,110

Ratio of net debt-to-net capital(2)
37.4
%
 
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 June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
(in thousands)
Net income available to common stockholders
$
63,680

 
$
32,714

 
$
106,560

 
$
40,907

Interest expense:
 
 
 
 
 
 
 
Interest incurred
21,627

 
19,931

 
43,147

 
38,804

Interest capitalized
(21,627
)
 
(19,931
)
 
(43,147
)
 
(38,804
)
Amortization of interest in cost of sales
19,664

 
13,185

 
33,906

 
22,872

Provision for income taxes
21,136

 
19,098

 
35,796

 
23,712

Depreciation and amortization
7,092

 
877

 
12,579

 
1,698

EBITDA
111,572

 
65,874

 
188,841

 
89,189

Amortization of stock-based compensation
3,720

 
3,903

 
7,190

 
7,744

Impairments and lot option abandonments
609

 
507

 
857

 
828

Restructuring charges

 
238

 

 
441

Adjusted EBITDA
$
115,901

 
$
70,522

 
$
196,888

 
$
98,202

 
 
 
 
 
 
 
 
 
 
 

Page 14

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