TRI POINTE HOMES, INC., 10-K filed on 3/12/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Feb. 27, 2015
Jun. 30, 2014
Document And Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
TPH 
 
 
Entity Registrant Name
TRI Pointe Homes, Inc. 
 
 
Entity Central Index Key
0001561680 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
161,587,547 
 
Entity Public Float
 
 
$ 265,187,078 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Assets
 
 
Cash and cash equivalents
$ 170,629 
$ 4,510 
Receivables
20,118 
60,397 
Real estate inventories
2,280,183 
1,465,526 
Investments in unconsolidated entities
16,805 
20,923 
Goodwill and other intangible assets, net
162,563 
6,494 
Deferred tax assets
157,821 
288,983 
Other assets
105,405 
63,631 
Total assets
2,913,524 
1,910,464 
Liabilities
 
 
Accounts payable
68,860 
59,676 
Accrued expenses and other liabilities
210,009 
190,682 
Notes payable and other borrowings
274,677 
 
Senior notes
887,502 
 
Debt payable to Weyerhaeuser
 
834,589 
Total liabilities
1,441,048 
1,084,947 
Commitments and contingencies (Note 15)
   
   
Stockholders' Equity:
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of December 31, 2014 and 2013, respectively
   
   
Common stock, $0.01 par value, 500,000,000 shares authorized; 161,355,490 and 129,700,000 shares issued and outstanding at December 31, 2014 and 2013, respectively (Note 1)
1,614 
1,297 
Additional paid-in capital
906,159 
333,589 
Retained earnings
546,407 
462,210 
Total stockholders' equity
1,454,180 
797,096 
Noncontrolling interests
18,296 
28,421 
Total equity
1,472,476 
825,517 
Total liabilities and equity
$ 2,913,524 
$ 1,910,464 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Statement Of Financial Position [Abstract]
 
 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
50,000,000 
50,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
500,000,000 
500,000,000 
Common stock, shares issued
161,355,490 
129,700,000 
Common stock, shares outstanding
161,355,490 
129,700,000 
Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Revenues:
 
 
 
Home sales
$ 1,646,274 
$ 1,218,430 
$ 870,596 
Land and lot sales
47,660 
52,261 
192,489 
Other operations
9,682 
4,021 
7,221 
Total revenues
1,703,616 
1,274,712 
1,070,306 
Expenses:
 
 
 
Cost of home sales
1,316,470 
948,561 
690,578 
Cost of land and lot sales
37,560 
38,052 
116,143 
Other operations
3,324 
2,854 
5,214 
Impairments and lot option abandonments
2,515 
345,448 
3,591 
Sales and marketing
103,600 
94,521 
78,022 
General and administrative
82,373 
74,244 
75,583 
Restructuring charges
10,543 
10,938 
2,460 
Total expenses
1,556,385 
1,514,618 
971,591 
Income (loss) from operations
147,231 
(239,906)
98,715 
Equity in (loss) income of unconsolidated entities
(288)
2,490 
Transaction expenses
(17,960)
 
 
Other income (expense), net
(1,019)
2,450 
(1,576)
Income (loss) from continuing operations before taxes
127,964 
(237,454)
99,629 
(Provision) benefit for income taxes
(43,767)
86,161 
(38,910)
Income (loss) from continuing operations
84,197 
(151,293)
60,719 
Discontinued operations, net of income taxes
 
1,838 
762 
Net income (loss)
$ 84,197 
$ (149,455)
$ 61,481 
Basic
 
 
 
Continuing operations
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
$ 0.02 
 
Net earnings (loss) per share
$ 0.58 
$ (1.15)
$ 0.47 
Diluted
 
 
 
Continuing operations
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
$ 0.02 
 
Net earnings (loss) per share
$ 0.58 
$ (1.15)
$ 0.47 
Weighted average shares outstanding
 
 
 
Basic
145,044,351 
129,700,000 
129,700,000 
Diluted
145,531,289 
129,700,000 
129,700,000 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
TRI Pointe [Member]
Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2011
$ 889,707 
$ 1,297 
$ 339,823 
$ 550,184 
$ 891,304 
$ (1,597)
Beginning Balance, Shares at Dec. 31, 2011
 
129,700,000 
 
 
 
 
Net income (loss)
61,481 
 
 
61,481 
61,481 
 
Capital contribution (return of capital) to Weyerhaeuser
(2,351)
 
(2,351)
 
(2,351)
 
Excess tax benefit (cost) of share-based awards, net
(509)
 
(509)
 
(509)
 
Stock-based compensation expense
3,854 
 
3,854 
 
3,854 
 
Contributions from (distributions to) noncontrolling interests, net
233 
 
 
 
 
233 
Net effect of consolidations, de- consolidations and other transactions
41,312 
 
 
 
 
41,312 
Ending Balance at Dec. 31, 2012
993,727 
1,297 
340,817 
611,665 
953,779 
39,948 
Ending Balance, Shares at Dec. 31, 2012
 
129,700,000 
 
 
 
 
Net income (loss)
(149,455)
 
 
(149,455)
(149,455)
 
Capital contribution (return of capital) to Weyerhaeuser
(13,920)
 
(13,920)
 
(13,920)
 
Excess tax benefit (cost) of share-based awards, net
1,690 
 
1,690 
 
1,690 
 
Stock-based compensation expense
5,002 
 
5,002 
 
5,002 
 
Contributions from (distributions to) noncontrolling interests, net
(7,121)
 
 
 
 
(7,121)
Net effect of consolidations, de- consolidations and other transactions
(4,406)
 
 
 
 
(4,406)
Ending Balance at Dec. 31, 2013
825,517 
1,297 
333,589 
462,210 
797,096 
28,421 
Ending Balance, Shares at Dec. 31, 2013
129,700,000 
129,700,000 
 
 
 
 
Net income (loss)
84,197 
 
 
84,197 
84,197 
 
Common shares issued in connection with the Merger (Note 2)
498,973 
317 
498,656 
 
498,973 
 
Common shares issued in connection with the Merger (Note 2), Shares
 
31,632,533 
 
 
 
 
Shares issued through stock plans
176 
 
176 
 
176 
 
Shares issued through stock plans, Shares
 
22,957 
 
 
 
 
Capital contribution (return of capital) to Weyerhaeuser
63,355 
 
63,355 
 
63,355 
 
Excess tax benefit (cost) of share-based awards, net
1,757 
 
1,757 
 
1,757 
 
Stock-based compensation expense
8,626 
 
8,626 
 
8,626 
 
Contributions from (distributions to) noncontrolling interests, net
(17,248)
 
 
 
 
(17,248)
Net effect of consolidations, de- consolidations and other transactions
7,123 
 
 
 
 
7,123 
Ending Balance at Dec. 31, 2014
$ 1,472,476 
$ 1,614 
$ 906,159 
$ 546,407 
$ 1,454,180 
$ 18,296 
Ending Balance, Shares at Dec. 31, 2014
161,355,490 
161,355,490 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities
 
 
 
Net income (loss)
$ 84,197 
$ (149,455)
$ 61,481 
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
 
 
 
Depreciation and amortization
11,423 
13,489 
11,798 
Equity in (income) loss of unconsolidated entities, net
288 
(2)
(2,453)
Deferred income taxes, net
5,716 
(108,869)
38,000 
Amortization of stock-based compensation
8,626 
5,002 
3,854 
Charges for impairments and lot option abandonments
2,515 
345,448 
3,591 
Net gain on sale of discontinued operations
 
(1,946)
 
Charge for early extinguishment of debt
 
645 
 
Bridge commitment fee
10,322 
 
 
Changes in assets and liabilities:
 
 
 
Real estate inventories
(276,315)
(165,471)
(74,939)
Receivables
40,933 
44,689 
(11,823)
Other assets
(6,680)
(19,391)
3,845 
Accounts payable
5,571 
(6,538)
10,262 
Accrued expenses and other liabilities
(46)
20,200 
16,370 
Returns on investments in unconsolidated entities, net
80 
1,111 
2,680 
Other operating cash flows
 
84 
180 
Net cash (used in) provided by operating activities
(113,370)
(21,004)
62,846 
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(7,850)
(10,350)
(3,529)
Cash acquired in the Merger
53,800 
 
 
Proceeds from sale of property and equipment
23 
Investments in unconsolidated entities
(1,311)
(1,571)
(232)
Proceeds from the sale of discontinued operations
 
3,623 
 
Proceeds from sale of partnership interests
 
 
1,634 
Net cash provided by (used in) investing activities
44,662 
(8,293)
(2,123)
Cash flows from financing activities:
 
 
 
Borrowings from notes payable
100,600 
 
 
Repayment of notes payable
(53,051)
(109,900)
(175,805)
Proceeds from issuance of senior notes
886,698 
 
 
Debt issuance costs for senior notes
(23,000)
 
 
Bridge commitment fee
(10,322)
 
 
Changes in debt payable to Weyerhaeuser
(623,589)
145,036 
120,810 
Change in book overdrafts
(22,491)
6,821 
(2,809)
Excess tax benefits of share-based awards
1,757 
2,097 
1,241 
Distributions to Weyerhaeuser
(8,606)
(13,920)
(2,351)
Net proceeds of debt held by variable interest entities
3,903 
5,582 
 
Contributions from noncontrolling interests
1,895 
925 
233 
Distributions to noncontrolling interests
(19,143)
(8,046)
 
Proceeds from exercise of equity awards
176 
 
 
Net cash provided by (used in) financing activities
234,827 
28,595 
(58,681)
Net increase (decrease) in cash and cash equivalents
166,119 
(702)
2,042 
Cash and cash equivalents - beginning of year
4,510 
5,212 
3,170 
Cash and cash equivalents - end of year
$ 170,629 
$ 4,510 
$ 5,212 
Organization and Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies

1.

Organization and Summary of Significant Accounting Policies

Organization

TRI Pointe Homes, Inc. is engaged in the design, construction and sale of innovative 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.

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”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as described in “Reverse Acquisition” below.  All significant intercompany accounts have been eliminated upon consolidation.  Certain prior period amounts have been reclassified to conform to current period presentation.  Subsequent events have been evaluated through the date the financial statements were issued.

Unless the context otherwise requires, the terms “we”, “us”, “our” and “the Company” refer to TRI Pointe Homes, Inc. (and its consolidated subsidiaries).

Reverse Acquisition

On July 7, 2014 (the “Closing Date”), TRI Pointe Homes, Inc. consummated the previously announced merger (the “Merger”) of our wholly-owned subsidiary, Topaz Acquisition, Inc. (“Merger Sub”), with and into Weyerhaeuser Real Estate Company (“WRECO”), with WRECO surviving the Merger and becoming our wholly-owned subsidiary, as contemplated by the Transaction Agreement, dated as of November 3, 2013 (the “Transaction Agreement”), by and among us, Weyerhaeuser Company (“Weyerhaeuser”), the Company, WRECO and Merger Sub. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations (“ASC 805”). For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer. Accordingly, WRECO is reflected as the predecessor and acquirer and therefore the accompanying consolidated financial statements reflect the historical consolidated financial statements of WRECO for all periods presented and do not include the historical financial statements of TRI Pointe prior to the Closing Date. Subsequent to the Closing Date, the consolidated financial statements reflect the results of the combined company.

See Note 2, Merger with Weyerhaeuser Real Estate Company, for further information on the Merger. In the Merger, each issued and outstanding WRECO common share was converted into 1.297 shares of TRI Pointe common stock. The historical issued and outstanding WRECO common shares (100,000,000 common shares for all periods presented prior to the Merger) have been recast (as 129,700,000 common shares of the Company for all periods prior to the Merger) in all periods presented to reflect this conversion.

Use of Estimates

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from our estimates.

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 an initial maturity date of less than three months. 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.

Real Estate Inventories and Cost of Sales

Real estate inventories consist of land, land under development, homes under construction, completed homes and model homes and are stated at cost, net of impairment losses. We capitalize direct carrying costs, including interest, property taxes and related development costs to inventories. Field construction supervision and related direct overhead are also included in the capitalized cost of inventories. Direct construction costs are specifically identified and allocated to homes while other common costs, such as land, land improvements and carrying costs, are allocated to homes within a community based upon their anticipated relative sales or fair value. In accordance with ASC Topic 835, Interest (“ASC 835”), homebuilding interest capitalized as a cost of inventories owned is included in costs of sales as related units or lots are sold. To the extent our debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. Qualified assets represent projects that are actively under development. Homebuilding cost of sales is recognized at the same time revenue is recognized and is recorded based upon total estimated costs to be allocated to each home within a community. Any changes to the estimated costs are allocated to the remaining undelivered lots and homes within their respective community. The estimation and allocation of these costs requires a substantial degree of judgment by management.

The estimation process involved in determining relative sales or fair values is inherently uncertain because it involves estimating future sales values of homes before delivery. Additionally, in determining the allocation of costs to a particular land parcel or individual home, we rely on project budgets that are based on a variety of assumptions, including assumptions about construction schedules and future costs to be incurred. It is common that actual results differ from budgeted amounts for various reasons, including construction delays, increases in costs that have not been committed or unforeseen issues encountered during construction that fall outside the scope of existing contracts, or costs that come in less than originally anticipated. While the actual results for a particular construction project are accurately reported over time, a variance between the budget and actual costs could result in the understatement or overstatement of costs and have a related impact on gross margins between reporting periods. To reduce the potential for such variances, we have procedures that have been applied on a consistent basis, including assessing and revising project budgets on a periodic basis, obtaining commitments from subcontractors and vendors for future costs to be incurred and utilizing the most recent information available to estimate costs.

If there are indications of impairment, we perform a detailed budget and cash flow review of our real estate assets to determine whether the estimated remaining undiscounted future cash flows of the community are more or less than the asset’s carrying value. If the undiscounted cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the undiscounted cash flows are less than the asset’s carrying value, the asset is deemed impaired and is written down to fair value. These impairment evaluations require us to make estimates and assumptions regarding future conditions, including timing and amounts of development costs and sales prices of real estate assets, to determine if expected future undiscounted cash flows will be sufficient to recover the asset’s carrying value.

When estimating undiscounted cash flows of a community, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property.

Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Depending on the underlying objective of the community, assumptions could have a significant impact on the projected cash flow analysis. For example, if our objective is to preserve operating margins, our cash flow analysis will be different than if the objective is to increase sales. These objectives may vary significantly from community to community and over time. If assets are considered impaired, impairment is determined by the amount the asset’s carrying value exceeds its fair value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development, construction and delivery timelines; market risk of price erosion; uncertainty of development or construction cost increases; and other risks specific to the asset or market conditions where the asset is located when assessment is made. These factors are specific to each community and may vary among communities. We perform a quarterly review for indicators of impairment. For the years ended December 31, 2014, 2013 and 2012 we recorded impairment charges of $931,000, $341.1 million and $735,000, respectively.  The impairment charge in 2013 was primarily related to the impairment of the Coyote Springs Property, which was an excluded asset per the Transaction Agreement.  

Revenue Recognition

In accordance with ASC Topic 360, Property, Plant, and Equipment, revenues from home sales and other real estate sales are recorded and a profit is recognized when the respective units are delivered. Home sales and other real estate sales are delivered when all conditions of escrow are met, including delivery of the home or other real estate asset, title passage, appropriate consideration is received and collection of associated receivables, if any, is reasonably assured. Sales incentives are a reduction of revenues when the respective unit is delivered. When it is determined that the earnings process is not complete, the sale and the related profit are deferred for recognition in future periods. The profit we record is based on the calculation of cost of sales, which is dependent on our allocation of costs, as described in more detail above in the section entitled “Real Estate Inventories and Cost of Sales.”

Warranty Reserves

In the normal course of business, we incur warranty-related costs associated with homes that have been delivered to homebuyers. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized while indirect warranty overhead salaries and related costs are charged to cost of sales in the period incurred. Amounts are accrued based upon our historical rates. We assess the adequacy of our warranty accrual on a quarterly basis and adjust the amounts as appropriate for current quantitative and qualitative factors. Factors that affect the warranty accruals include the number of homes delivered, historical and anticipated rates of warranty claims and cost per claim. Although we consider the warranty accruals reflected in our consolidated balance sheet to be adequate, actual future costs could differ significantly from our currently estimated amounts. Our warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

Investments in Unconsolidated Entities

We have investments in unconsolidated entities over which we have significant influence that we account for using the equity method with taxes provided on undistributed earnings. We record earnings and accrue taxes in the period that the earnings are recorded by our affiliates. Under the equity method, our share of the unconsolidated entities’ earnings or loss is included in equity in income (loss) of unconsolidated entities in the accompanying consolidated statement of operations. We evaluate our investments in unconsolidated entities for impairment when events and circumstances indicate that the carrying value of the investment may not be recoverable.

Variable Interest Entities

The Company accounts for variable interest entities in accordance with ASC Topic 810, Consolidation (“ASC 810”). Under ASC 810, a variable interest entity (“VIE”) is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve, or are conducted on behalf of, the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE.

Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as inventories owned, which we would have to write off should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE.

Stock-Based Compensation

We account for share-based awards in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees.

Sales and Marketing Expense

Sales and marketing costs incurred to sell real estate projects are capitalized if they are reasonably expected to be recovered from the sale of the project or from incidental operations and are incurred for tangible assets that are used directly through the selling period to aid in the sale of the project or services that have been performed to obtain regulatory approval of sales. All other selling expenses and other marketing costs are expensed in the period incurred.

Restructuring Charges

Restructuring charges are incurred related to the Merger in addition to general cost reduction initiatives.   These charges are comprised of employee retention and severance-related expenses and lease termination costs.  We account for restructuring charges in accordance with ASC Topic 420, Exit or Disposal Cost Obligations or ASC Topic 712 – Compensation – Nonretirement Postemployment Benefits.  

Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recorded based on future tax consequences of both temporary differences between the amounts reported for financial reporting purposes and the amounts deductible for income tax purposes, and are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted.

Each quarter we assess our deferred tax assets to determine whether all or any portion of the assets 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. Due to uncertainties inherent in the estimation process, it is possible that actual results may vary from estimates.

We classify any interest and penalties related to income taxes as part of income tax expense. As of December 31, 2014, the Company has liabilities for gross unrecognized tax benefits of $14.9 million the majority of which were assumed in connection with the Merger.

Goodwill

In connection with the Merger, $139.3 million of goodwill has been recorded as of December 31, 2014. We have completed the majority of our business combination accounting as of December 31, 2014 and expect to complete the remainder in the first quarter of 2015.  In accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”), we will evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.  Based on our qualitative analysis, we have concluded as of December 31, 2014, our goodwill was not impaired.

Recently Issued Accounting Standards

In April 2014, the FASB issued amendments to Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The update requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). The implementation of the amended guidance is not expected to have a material impact on our consolidated financial position or results of operations.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirements in ASC Topic 605, Revenue Recognition, most industry-specific guidance throughout the industry topics of the accounting standards codification, and some cost guidance related to construction-type and production-type contracts. ASU 2014-09 is effective for public entities for the annual periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. We are currently evaluating the approach for implementation and the potential impact of adopting this guidance on our consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We believe the adoption of this guidance will not have a material effect on our consolidated financial statements.

Merger with Weyerhaeuser Real Estate Company
Merger with Weyerhaeuser Real Estate Company

2.

Merger with Weyerhaeuser Real Estate Company

In the Merger, TRI Pointe issued 129,700,000 shares of TRI Pointe common stock to the former holders of WRECO common shares, together with cash in lieu of any fractional shares. On the Closing Date, WRECO became a wholly-owned subsidiary of TRI Pointe. Immediately following the consummation of the Merger, the ownership of TRI Pointe common stock on a fully diluted basis was as follows: (i) the WRECO common shares held by former Weyerhaeuser shareholders were converted into the right to receive, in the aggregate, approximately 79.6% of the then outstanding TRI Pointe common stock, (ii) the TRI Pointe common stock outstanding immediately prior to the consummation of the Merger represented approximately 19.4% of the then outstanding TRI Pointe common stock, and (iii) the outstanding equity awards of WRECO and TRI Pointe employees represented the remaining 1.0% of the then outstanding TRI Pointe common stock. On the Closing Date, the former direct parent entity of WRECO paid TRI Pointe $31.5 million in cash in accordance with the Transaction Agreement. Following the Merger, WRECO changed its name to TRI Pointe Holdings, Inc.

Assumption of Senior Notes

On the Closing Date, TRI Pointe assumed WRECO’s obligations as issuer of $450 million aggregate principal amount of its 4.375% Senior Notes due 2019 (the “2019 Notes”) and $450 million aggregate principal amount of its 5.875% Senior Notes due 2024 (the “2024 Notes” and together with the 2019 Notes, the “Senior Notes”). Additionally, WRECO and certain of its subsidiaries (collectively, the “Guarantors”) entered into supplemental indentures pursuant to which they guaranteed TRI Pointe’s obligations with respect to the Senior Notes. The Guarantors also entered into a joinder agreement to the Purchase Agreement, dated as of June 4, 2014, among WRECO, TRI Pointe, and the initial purchasers of the Senior Notes (collectively, the “Initial Purchasers”), pursuant to which the Guarantors became parties to the Purchase Agreement. Additionally, TRI Pointe and the Guarantors entered into joinder agreements to the Registration Rights Agreements, dated as of June 13, 2014, among WRECO and the Initial Purchasers with respect to the Senior Notes, pursuant to which TRI Pointe and the Guarantors were joined as parties to the Registration Rights Agreements.

The net proceeds of $861.3 million from the offering of the Senior Notes were deposited into two separate escrow accounts following the closing of the offering on June 13, 2014. Upon release of the escrowed funds on the Closing Date and prior to the consummation of the Merger, WRECO paid $743.7 million in cash to its former direct parent, which cash was retained by Weyerhaeuser and its subsidiaries (other than WRECO and its subsidiaries). The payment consisted of the $739.0 million Payment Amount (as defined in the Transaction Agreement) as well as $4.7 million in payment of all unpaid interest on the debt payable to Weyerhaeuser that accrued from November 3, 2013 to the Closing Date. The remaining $117.6 million of proceeds was retained by TRI Pointe.

Transaction Expenses

Advisory, financing, integration and other transaction costs directly related to the Merger, excluding the impact of restructuring costs and purchase accounting adjustments, totaled $18.0 million for the year ended December 31, 2014. We do not expect to incur additional transaction-related costs in 2015.

Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the calculation of the fair value of the total consideration transferred and the provisional amounts recognized as of the Closing Date (in thousands, except shares and closing stock price):

 

Calculation of consideration transferred

 

 

 

 

 

 

 

 

TRI Pointe shares outstanding

 

 

 

 

 

 

31,632,533

 

TRI Pointe closing stock price on July 7, 2014

 

 

 

 

 

$

15.85

 

Consideration attributable to common stock

 

 

 

 

 

$

501,376

 

Consideration attributable to TRI Pointe

   equity awards

 

 

 

 

 

 

1,072

 

Total consideration transferred

 

 

 

 

 

$

502,448

 

Assets acquired and liabilities assumed

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

$

53,800

 

Accounts receivable

 

 

 

 

 

 

654

 

Real estate inventories

 

 

 

 

 

 

539,677

 

Intangible asset

 

 

 

 

 

 

17,300

 

Goodwill

 

 

 

 

 

 

139,304

 

Other assets

 

 

 

 

 

 

28,060

 

Total assets acquired

 

 

 

 

 

 

778,795

 

Accounts payable

 

 

 

 

 

 

26,105

 

Accrued expenses and other liabilities

 

 

 

 

 

 

23,114

 

Notes payable and other borrowings

 

 

 

 

 

 

227,128

 

Total liabilities assumed

 

 

 

 

 

 

276,347

 

Total net assets acquired

 

 

 

 

 

$

502,448

 

Cash and cash equivalents, accounts receivable, other assets, accounts payable, accrued payroll liabilities, and accrued expenses and other liabilities were generally stated at historical carrying values given the short-term nature of these assets and liabilities. Notes payable and other borrowings are stated at carrying value due to the limited amount of time since the notes payable and other borrowings were entered into prior to the Closing Date.

The Company determined the fair value of real estate inventories on a community-by-community basis primarily using a combination of market-comparable land transactions, land residual analysis and discounted cash flow models. The estimated fair value is significantly impacted by estimates related to expected average selling prices, sales pace, cancellation rates and construction and overhead costs. Such estimates must be made for each individual community and may vary significantly between communities.

The fair value of the acquired intangible asset was determined based on a valuation performed by an independent valuation specialist. The $17.3 million intangible asset is related to the TRI Pointe trade name which is deemed to have an indefinite useful life.

Goodwill is primarily attributed to expected synergies from combining WRECO’s and TRI Pointe’s existing businesses, including, but not limited to, expected cost synergies from overhead savings resulting from streamlining certain redundant corporate functions, improved operating efficiencies, including provision of certain corporate level administrative and support functions at a lower cost than was historically allocated to WRECO for such services by its former direct parent, and growth of ancillary operations in various markets as permitted under applicable law, including a mortgage business, a title company and other ancillary operations. The Company also anticipates opportunities for growth through expanded geographic and customer segment diversity and the ability to leverage additional brands. The acquired goodwill is not deductible for income tax purposes.

The Company has completed the majority of its business combination accounting as of December 31, 2014 and expects to complete the remainder in the first quarter of 2015. As of December 31, 2014, the Company had not completed its final review of the valuation of acquired inventory, investments in unconsolidated entities, income taxes and deferred income tax assets and liabilities, and certain other assets and liabilities. Final determinations of the values of assets acquired and liabilities assumed may result in adjustments to the values presented above and a corresponding adjustment to goodwill.

Supplemental Pro Forma Information (Unaudited)

The following represents unaudited pro forma operating results as if the acquisition had been completed as of January 1, 2013 (in thousands, except per share amounts):

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2014

 

 

2013

 

Total revenues

 

 

 

$

1,865,723

 

 

$

1,532,667

 

Net income (loss)

 

 

 

$

88,416

 

 

$

91,028

 

Earnings per share - basic

 

 

 

$

0.55

 

 

$

0.56

 

Earnings per share - diluted

 

 

 

$

0.55

 

 

$

0.56

 

The unaudited pro forma operating results have been determined after adjusting the operating results of TRI Pointe to reflect the purchase accounting and other acquisition adjustments including interest expense associated with the debt used to fund a portion of the Merger. The unaudited pro forma results do not reflect any cost savings, operating synergies or other enhancements that we may achieve as a result of the Merger or the costs necessary to integrate the operations to achieve these cost savings and synergies. Accordingly, the unaudited pro forma amounts are for comparative purposes only and may not necessarily reflect the results of operations had the Merger been completed at the beginning of the period or be indicative of the results we will achieve in the future.

Restructuring Charges
Restructuring Charges

3.

Restructuring Charges

In connection with the Merger, the Company initiated a restructuring plan to reduce duplicate corporate and divisional overhead costs and expenses. In addition, WRECO previously recognized restructuring expenses related to general cost reduction initiatives. Restructuring costs were comprised of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Employee-related costs

 

$

9,211

 

 

$

5,736

 

 

$

573

 

Lease termination costs

 

 

1,332

 

 

 

5,202

 

 

 

1,887

 

Total

 

$

10,543

 

 

$

10,938

 

 

$

2,460

 

Employee-related costs incurred during the year ended December 31, 2014 included employee retention and severance-related expenses of $8.3 million and stock-based compensation expense of $947,000 for employees terminated during the period.  Employee retention and severance-related expenses were $5.7 million and $573,000 for the years ended December 31, 2013 and 2012, respectively. Lease termination costs of $1.3 million, $5.2 million and $1.9 million during the years ended December 31, 2014, 2013 and 2012, respectively, relate to contract terminations as a result of general cost reduction initiatives.

Changes in employee-related restructuring reserves were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Accrued employee-related costs, beginning of period

 

$

4,336

 

 

$

28

 

 

$

104

 

Current year charges

 

 

8,264

 

 

 

5,736

 

 

 

573

 

Payments

 

 

(8,756

)

 

 

(1,428

)

 

 

(649

)

Accrued employee-related costs, end of period

 

$

3,844

 

 

$

4,336

 

 

$

28

 

Changes in lease termination related restructuring reserves were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Accrued lease termination costs, beginning of period

 

$

3,506

 

 

$

2,335

 

 

$

3,674

 

Current year charges

 

 

1,332

 

 

 

5,202

 

 

 

1,887

 

Payments

 

 

(3,444

)

 

 

(4,031

)

 

 

(3,226

)

Accrued lease termination costs, end of period

 

$

1,394

 

 

$

3,506

 

 

$

2,335

 

Employee and lease termination restructuring reserves are included in accrued expenses and other liabilities on our consolidated balance sheets.

 

Segment Information
Segment Information

4.

Segment Information

Our operations consist of six homebuilding companies where we acquire and develop land and construct and sell single-family homes. In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based on our aggregation analysis, we have not exercised any aggregation of our operating segments, which are represented by the following six reportable segments: Maracay, consisting of operations in Arizona; Pardee, consisting of operations in California and Nevada; Quadrant, consisting of operations in Washington; Trendmaker, consisting of operations in Texas; TRI Pointe, consisting of operations in California and Colorado; and Winchester, consisting of operations in Maryland and Virginia.

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 and risk management, information technology and human resources, to benefit from economies of scale. Our Corporate non-operating segment also includes general and administrative expenses related to operating our corporate headquarters. A portion of the expenses incurred by Corporate is allocated to the homebuilding reporting segments.

The reportable segments follow the same accounting policies as our consolidated financial statements described in Note 1. 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 from continuing operations before income taxes for each of our reportable segments were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Total revenues

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

150,689

 

 

$

145,822

 

 

$

103,222

 

Pardee

 

 

525,381

 

 

 

519,074

 

 

 

356,489

 

Quadrant

 

 

145,377

 

 

 

127,237

 

 

 

127,785

 

Trendmaker

 

 

281,270

 

 

 

260,566

 

 

 

298,396

 

TRI Pointe

 

 

324,208

 

 

 

 

 

 

 

Winchester

 

 

276,691

 

 

 

222,013

 

 

 

184,414

 

 

 

$

1,703,616

 

 

$

1,274,712

 

 

$

1,070,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

10,845

 

 

$

10,438

 

 

$

5,347

 

Pardee

 

 

74,898

 

 

 

(258,138

)

 

 

87,691

 

Quadrant

 

 

9,028

 

 

 

1,504

 

 

 

(2,851

)

Trendmaker

 

 

31,684

 

 

 

28,452

 

 

 

29,472

 

TRI Pointe

 

 

19,272

 

 

 

 

 

 

 

Winchester

 

 

24,612

 

 

 

24,561

 

 

 

18,537

 

Corporate (1)

 

 

(42,375

)

 

 

(44,271

)

 

 

(38,567

)

 

 

$

127,964

 

 

$

(237,454

)

 

$

99,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairments and lot option abandonments

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

443

 

 

$

203

 

 

$

181

 

Pardee

 

 

306

 

 

 

343,661

 

 

 

133

 

Quadrant

 

 

1,059

 

 

 

1,146

 

 

 

2,575

 

Trendmaker

 

 

45

 

 

 

7

 

 

 

 

TRI Pointe

 

 

49

 

 

 

 

 

 

 

Winchester

 

 

613

 

 

 

431

 

 

 

702

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

$

2,515

 

 

$

345,448

 

 

$

3,591

 

 

(1)

Includes $18.0 million of Merger related transaction costs and $5.5 million of restructuring charges for the year ended December 31, 2014.

 

Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

Real estate inventories

 

 

 

 

 

 

 

 

Maracay

 

$

153,577

 

 

$

131,380

 

Pardee

 

 

924,362

 

 

 

875,618

 

Quadrant

 

 

153,493

 

 

 

113,088

 

Trendmaker

 

 

176,696

 

 

 

130,973

 

TRI Pointe

 

 

613,666

 

 

 

 

Winchester

 

 

258,389

 

 

 

214,467

 

 

 

$

2,280,183

 

 

$

1,465,526

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

 

Maracay

 

$

170,932

 

 

$

138,552

 

Pardee

 

 

1,000,489

 

 

 

976,262

 

Quadrant

 

 

167,796

 

 

 

125,456

 

Trendmaker

 

 

195,829

 

 

 

134,628

 

TRI Pointe

 

 

764,001

 

 

 

 

Winchester

 

 

281,547

 

 

 

234,419

 

Corporate and Other

 

 

332,930

 

 

 

301,147

 

 

 

$

2,913,524

 

 

$

1,910,464

 

 

Earnings Per Share
Earnings Per Share

5.

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):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

84,197

 

 

$

(151,293

)

 

$

60,719

 

Discontinued operations, net of income taxes

 

 

 

 

 

1,838

 

 

 

762

 

Net income

 

$

84,197

 

 

$

(149,455

)

 

$

61,481

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

 

145,044,351

 

 

 

129,700,000

 

 

 

129,700,000

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options and unvested restricted stock units

 

 

486,938

 

 

 

 

 

 

 

Diluted weighted-average shares outstanding

 

 

145,531,289

 

 

 

129,700,000

 

 

 

129,700,000

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.58

 

 

$

(1.17

)

 

$

0.47

 

Discontinued operations

 

 

 

 

 

0.02

 

 

 

 

Net earnings per share

 

$

0.58

 

 

$

(1.15

)

 

$

0.47

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.58

 

 

$

(1.17

)

 

$

0.47

 

Discontinued operations

 

 

 

 

 

0.02

 

 

 

 

Net earnings per share

 

$

0.58

 

 

$

(1.15

)

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Antidilutive stock options not included

   in diluted earnings per share

 

 

1,295,280

 

 

 

 

 

 

 

 

In the Merger, each issued and outstanding WRECO common share was converted into 1.297 shares of TRI Pointe common stock. The historical issued and outstanding WRECO common shares (100,000,000 common shares for all periods presented prior to the Merger) have been recast (as 129,700,000 common shares of the Company for all periods prior to the Merger) in all periods presented to reflect this conversion.  See Note 2, Merger with Weyerhaeuser Real Estate Company, for further information on the Merger.

Receivables, Net
Receivables, Net

6.

Receivables, Net

Receivables, net consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

Accounts receivable, net

 

$

9,771

 

 

$

8,649

 

Warranty insurance receivable (Note 15)

 

 

10,047

 

 

 

12,489

 

Notes and contracts receivable

 

 

300

 

 

 

39,259

 

Total receivables

 

$

20,118

 

 

$

60,397

 

 

Real Estate Inventories
Real Estate Inventories

7.

Real Estate Inventories

Real estate inventories consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Real estate inventories owned:

 

 

 

 

 

 

 

 

Homes completed or under construction

 

$

461,712

 

 

$

308,856

 

Land under development

 

 

1,391,303

 

 

 

760,731

 

Land held for future development

 

 

245,673

 

 

 

264,120

 

Model homes

 

 

103,270

 

 

 

53,351

 

Total real estate inventories owned

 

 

2,201,958

 

 

 

1,387,058

 

Real estate inventories not owned:

 

 

 

 

 

 

 

 

Land purchase and land option deposits

 

 

44,155

 

 

 

38,788

 

Consolidated inventory held by VIEs

 

 

34,070

 

 

 

39,680

 

Total real estate inventories not owned

 

 

78,225

 

 

 

78,468

 

Total real estate inventories

 

$

2,280,183

 

 

$

1,465,526

 

 

Homes completed or under construction is comprised of costs associated with homes in various stages of construction and includes direct construction and related land acquisition and land development costs. Land under development primarily consists of land acquisition and land development costs, which include capitalized interest and real estate taxes, associated with land undergoing improvement activity. Land held for future development principally reflects land acquisition and land development costs related to land where development activity has not yet begun or has been suspended, but is expected to occur in the future.

Real estate inventories not owned represents deposits related to land purchase and land option agreements as well as consolidated inventory held by a VIE. For further details, see Note 9, Variable Interest Entities.

Interest incurred, capitalized and expensed were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Interest incurred

 

$

41,706

 

 

$

22,674

 

 

$

27,038

 

Interest capitalized

 

 

(38,975

)

 

 

(19,081

)

 

 

(22,059

)

Interest expensed

 

$

2,731

 

 

$

3,593

 

 

$

4,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized interest in beginning inventory

 

$

138,233

 

 

$

155,823

 

 

$

164,056

 

Interest capitalized as a cost of inventory

 

 

38,975

 

 

 

19,081

 

 

 

22,059

 

Interest previously capitalized as a cost of inventory, included in cost of sales

 

 

(52,747

)

 

 

(36,671

)

 

 

(30,292

)

Capitalized interest in ending inventory

 

$

124,461

 

 

$

138,233

 

 

$

155,823

 

 

Interest is capitalized to real estate inventory during development and other qualifying activities. Interest that is capitalized to real estate inventory is included in cost of home sales as related units are delivered. Interest that is expensed as incurred is included in other income (expense).

Real estate inventory impairments and land option abandonments

Real estate inventory impairments and land option abandonments consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Real estate inventory impairments

 

$

931

 

 

$

341,086

 

 

$

735

 

Land option abandonments and pre-acquisition costs

 

 

1,584

 

 

 

4,362

 

 

 

2,856

 

 

 

$

2,515

 

 

$

345,448

 

 

$

3,591

 

 

Impairments of homebuilding assets and related charges relate primarily to projects or communities held for development. Within a community that is held for development, 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 above.

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. Charges for such forfeitures are expensed to cost of sales.

The homebuilding impairment charge in 2013 is primarily related to the $340.3 million impairment of the Coyote Springs Property in December 2013. Under the terms of the Transaction Agreement, certain assets and liabilities of WRECO and its subsidiaries were excluded from the transaction and retained by Weyerhaeuser, including assets and liabilities relating to the Coyote Springs Property described in Note 9.  

 

Investments in Unconsolidated Entities
Investments in Unconsolidated Entities

8.

Investments in Unconsolidated Entities

As of December 31, 2014, we held equity investments in six active real estate 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 55%, depending on the investment, with no controlling interest held in any of these investments.

Investments Held

Our cumulative investment in entities accounted for on the equity method, including our share of earnings and losses, consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Limited partnerships and limited liability company interests

 

$

13,710

 

 

$

18,454

 

General partnership interests

 

 

3,095

 

 

 

2,469

 

Total

 

$

16,805

 

 

$

20,923

 

Unconsolidated Financial Information

Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are provided below. Because our ownership interest in these entities varies, a direct relationship does not exist between the information presented below and the amounts that are reflected on our consolidated balance sheets as our investment in unconsolidated entities or on our consolidated statement of operations as equity in (loss) income of unconsolidated entities.

Assets and liabilities of unconsolidated entities (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Assets

 

 

 

 

 

 

 

 

Cash

 

$

17,154

 

 

$

10,459

 

Receivables

 

 

9,550

 

 

 

9,443

 

Real estate inventories

 

 

95,500

 

 

 

254,505

 

Other assets

 

 

620

 

 

 

535

 

Total assets

 

$

122,824

 

 

$

274,942

 

Liabilities and equity

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

10,914

 

 

$

76,248

 

Company's equity

 

 

16,805

 

 

 

20,923

 

Outside interests' equity

 

 

95,105

 

 

 

177,771

 

Total liabilities and equity

 

$

122,824

 

 

$

274,942

 

Results of operations from unconsolidated entities (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Net sales

 

$

606

 

 

$

6,271

 

 

$

15,855

 

Other operating income (expense)

 

 

(4,290

)

 

 

(7,521

)

 

 

(12,244

)

Other income (expense)

 

 

(2

)

 

 

(18

)

 

 

(220

)

Net income (loss)

 

$

(3,686

)

 

$

(1,268

)

 

$

3,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company's equity in (loss) income of unconsolidated entities

 

$

(288

)

 

$

2

 

 

$

2,490

 

 

Variable Interest Entities
Variable Interest Entities

9.

Variable Interest Entities

In the ordinary course of business, we enter into land option agreements in order to procure land and residential lots for future development and the construction of homes. The use of such land 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 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. Such deposits are recorded as land purchase and land option deposits under real estate inventories not owned in the accompanying consolidated balance sheets.

We analyze each of our land option agreements and other similar contracts under the provisions of ASC 810 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 option agreements have no recourse against us. The maximum exposure to loss under our land option agreements is limited to non-refundable option deposits and any capitalized pre-acquisition costs. In some cases, we have also contracted to complete development work at a fixed cost on behalf of the land owner and budget shortfalls and savings will be borne by us.

The following provides a summary of our interests in land option agreements (in thousands):

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

Consolidated VIEs

 

$

8,071

 

 

$

43,432

 

 

$

34,070

 

 

$

6,979

 

 

$

34,724

 

 

$

39,680

 

Unconsolidated VIEs

 

 

13,309

 

 

 

129,637

 

 

N/A

 

 

 

7,102

 

 

 

75,171

 

 

N/A

 

Other land option

   agreements

 

 

30,846

 

 

 

284,819

 

 

N/A

 

 

 

31,686

 

 

 

321,240

 

 

N/A

 

Total

 

$

52,226

 

 

$

457,888

 

 

$

34,070

 

 

$

45,767

 

 

$

431,135

 

 

$

39,680

 

Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not considered VIEs. Included in other land option agreements as of December 31, 2013, was a $1.0 million deposit with a remaining purchase price of $105.2 million related to a large master planned community north of Las Vegas, Nevada (“Coyote Springs”) which was excluded from the Merger.

In addition to the deposits presented in the table above, our exposure to loss related to our land option contracts consisted of capitalized pre-acquisition costs of $5.3 million and $4.8 million as of December 31, 2014 and 2013, respectively. These pre-acquisition costs were included in real estate inventories as land under development on our consolidated balance sheets.

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

10.

Goodwill and Other Intangible Assets

In connection with the Merger, $139.3 million of goodwill has been recorded as of December 31, 2014. We have completed the majority of our business combination accounting as of December 31, 2014 and expect to complete the remainder in the first quarter of 2015. For further details on the goodwill recorded during the quarter, see Note 2, Merger with Weyerhaeuser Real Estate Company.

We have two intangible assets recorded as of December 31, 2014, including an existing trade name from the acquisition of Maracay in 2006 which has a 20 year useful life and a new trade name, TRI Pointe, resulting from the Merger which has an indefinite useful life. For further details on the TRI Pointe trade name see Note 2, Merger with Weyerhaeuser Real Estate Company.

Goodwill and other intangible assets consisted of the following (in thousands):

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

Gross

 

 

 

 

 

 

Net

 

 

Gross

 

 

 

 

 

 

Net

 

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

Amortization

 

 

Amount

 

Goodwill

 

$

139,304

 

 

$

 

 

$

139,304

 

 

$

 

 

$

 

 

$

 

Trade names

 

 

27,979

 

 

 

(4,720

)

 

 

23,259

 

 

 

10,679

 

 

 

(4,185

)

 

 

6,494

 

 

 

$

167,283

 

 

$

(4,720

)

 

$

162,563

 

 

$

10,679

 

 

$

(4,185

)

 

$

6,494

 

The remaining useful life of our amortizing intangible asset related to Maracay was 11.2 and 12.2 years as of December 31, 2014 and 2013, respectively. Amortization expense related to this intangible asset was $534,000 for the year ended December 31, 2014 and 2013, respectively, and was charged to sales and marketing expense.  Our indefinite life intangible asset related to TRI Pointe is not amortizing.

Expected amortization of our intangible asset related to Maracay for the next five years and thereafter is (in thousands):

 

 

 

December 31,

 

 

 

2014

 

2015

 

$

534

 

2016

 

 

534

 

2017

 

 

534

 

2018

 

 

534

 

2019

 

 

534

 

Thereafter

 

 

3,289

 

Total

 

$

5,959

 

 

Other Assets
Other Assets

11.

Other Assets

Other assets consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Prepaid expenses

 

$

29,111

 

 

$

8,590

 

Refundable fees and other deposits

 

 

15,581

 

 

 

19,566

 

Development rights, held for future use or sale

 

 

7,409

 

 

 

9,090

 

Deferred loan costs on Senior Notes

 

 

23,686

 

 

 

 

Operating properties and equipment, net

 

 

11,719

 

 

 

17,386

 

Income tax receivable

 

 

10,713

 

 

 

 

Other

 

 

7,186

 

 

 

8,999

 

 

 

$

105,405

 

 

$

63,631

 

 

Accrued Expenses and Other Liabilities
Accrued Expenses and Other Liabilities

12.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Accrued payroll and related costs

 

$

24,717

 

 

$

48,232

 

Warranty reserves (Note 15)

 

 

33,270

 

 

 

24,449

 

Estimated cost for completion

 

 

54,437

 

 

 

53,160

 

Customer deposits

 

 

14,229

 

 

 

13,432

 

Debt (nonrecourse) held by VIEs (Note 9)

 

 

9,512

 

 

 

6,571

 

Income tax liability to Weyerhaeuser (Note 18)

 

 

15,659

 

 

 

16,577

 

Liability for uncertain tax positions (Note 17)

 

 

13,797

 

 

 

 

Accrued interest on Senior Notes and notes payable

 

 

3,059

 

 

 

 

Accrued insurance expense

 

 

9,180

 

 

 

 

Other

 

 

32,149

 

 

 

28,261

 

 

 

$

210,009

 

 

$

190,682

 

 

Senior Notes and Notes Payable and Other Borrowings
Senior Notes and Notes Payable and Other Borrowings

13.Senior Notes and Notes Payable and Other Borrowings

Senior Notes

Senior notes consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

4.375% Senior Notes due June 15, 2019, net of discount

 

$

445,501

 

 

$

 

5.875% Senior Notes due June 15, 2024, net of discount

 

 

442,001

 

 

 

 

 

 

$

887,502

 

 

$

 

As discussed in Note 2, Merger with Weyerhaeuser Real Estate Company, on the Closing Date, TRI Pointe assumed WRECO’s obligations as issuer of the 2019 Notes and the 2024 Notes (collectively, the “Senior Notes”). The 2019 Notes were issued at 98.89% of their aggregate principal amount and the 2024 Notes were issued at 98.15% of their aggregate principal amount. The net proceeds of approximately $861.3 million, after debt issuance costs and discounts, from the offering were deposited into two separate escrow accounts following the closing of the offering on June 13, 2014. Upon release of the escrowed funds on the Closing Date, and prior to the consummation of the Merger, WRECO paid approximately $743.7 million in cash to the former direct parent entity of WRECO, which cash was retained by Weyerhaeuser and its subsidiaries (other than WRECO and its subsidiaries). The payment consisted of the $739 million Payment Amount (as defined in the Transaction Agreement) as well as approximately $4.7 million in payment of all unpaid interest on the debt payable to Weyerhaeuser that accrued from November 3, 2013 to the Closing Date. The remaining $117.6 million of proceeds was retained by TRI Pointe and used for general corporate purposes.

The 2019 Notes and the 2024 Notes mature on June 15, 2019 and June 15, 2024, respectively. Interest is payable semiannually in arrears on June 15 and December 15. As of December 31, 2014, no principal has been paid on the Senior Notes, and there was $23.7 million of capitalized debt financing costs, included in other assets 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 $1.9 million as of December 31, 2014.

Notes Payable and Other Borrowings

Notes payable and other borrowings consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Unsecured revolving Credit Facility

 

$

260,000

 

 

$

 

Seller financed loans

 

 

14,677

 

 

 

 

Debt payable to Weyerhaeuser

 

 

 

 

 

834,589

 

 

 

$

274,677

 

 

$

834,589

 

Unsecured Revolving Credit Facility

In June 2014, the Company entered into an unsecured $425 million revolving credit facility (the “Credit Facility”) with various lenders, with one lender serving as the administrative agent for the Credit Facility. The Credit Facility matures on July 1, 2018, and contains a sublimit of $75 million for letters of credit. The Company may borrow under the Credit Facility in the ordinary course of business to fund its operations, including its land development and homebuilding activities. Borrowings under the Credit Facility will be governed by, among other things, a borrowing base. Interest rates on borrowings under the Credit Facility will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 2.15% to 2.85%, depending on the Company’s leverage ratio. As of December 31, 2014, the outstanding balance under the Credit Facility was $260 million with an interest rate of 2.71% per annum and $153.2 million of availability after considering the borrowing base provisions and outstanding letters of credit.  Accrued interest related to the Credit Facility was $620,000 as of December 31, 2014.

At December 31, 2014 we had outstanding letters of credit of $11.8 million.  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.

Seller Financed Loans

As of December 31, 2014, the Company had $14.7 million outstanding related to seller financed loans to acquire lots for the construction of homes.  Principal and interest payments on these loans are due at various maturity dates, including at the time individual homes associated with the acquired land are delivered.  The seller financed loans accrue interest at a weighted average rate of 6.96% per annum, with interest calculated on a daily basis. Any remaining unpaid balance on these loans is due in May 2016.  Accrued interest on these loans were $517,000 as of December 31, 2014.

Debt Payable to Weyerhaeuser

WRECO had a revolving promissory note payable to Weyerhaeuser prior to the Closing Date on July 7, 2014. This note payable was settled at the close of the Merger. WRECO paid interest on the unpaid balance of the principal at a per annum rate of LIBOR plus 1.70%. Debt payable to Weyerhaeuser was $834.6 million at December 31, 2013.  See Note 18, Related Party Transactions, for further details.

Interest Incurred

During the years ended December 31, 2014 and 2013, the Company incurred interest of $41.7 million and $22.7 million, respectively, related to all notes payable, Senior Notes and debt payable to Weyerhaeuser outstanding during the period. Of the interest incurred, $39.0 million and $19.1 million was capitalized to inventory for the years ended December 31, 2014 and 2013, respectively. Included in interest incurred was amortization of deferred financing and Senior Note discount costs of $2.4 million for the year ended December 31, 2014. Accrued interest related to all outstanding debt at December 31, 2014 was $3.1 million. Accrued interest related to the debt payable with Weyerhaeuser was $4.3 million as of December 31, 2013, and is recorded in accounts payable on the accompanying consolidated balance sheet.

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 but not limited to (i) a minimum consolidated tangible net worth; (ii) a maximum total leverage ratio; and (iii) a minimum interest coverage ratio.

The Company was in compliance with all applicable financial covenants as of December 31, 2014 and December 31, 2013.

Fair Value Disclosures
Fair Value Disclosures

14.

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 December 31, 2014 and 2013, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

 

 

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

Hierarchy

 

Book Value

 

 

Fair Value

 

 

Book Value

 

 

Fair Value

 

Receivables (a)

 

Level 3

 

$

20,118

 

 

$

20,118

 

 

$

60,397

 

 

$

60,390

 

Senior Notes (b)

 

Level 2

 

 

887,502

 

 

 

896,625

 

 

 

 

 

 

 

 

 

Notes payable and other borrowings (c)

 

Level 3

 

 

274,677

 

 

 

274,677

 

 

 

 

 

 

 

 

 

At December 31, 2014 and 2013, the carrying value of cash and cash equivalents approximated fair value.

a.

The estimated fair value of our receivables was based on the discounted value of the expected future cash flows using current rates for similar receivables. The book value of our receivables equaled the fair value as of December 31, 2014 due to the short-term nature of the remaining receivables.

b.

The estimated fair value of our Senior Notes at December 31, 2014 is based on quoted market prices.

c.

We believe that the carrying value of our notes payable and other borrowings approximates fair value.

Fair Value of Nonfinancial Assets

Nonfinancial assets include items such as real estate inventories and long-lived assets that are measured at fair value on a nonrecurring basis with events and circumstances indicating the carrying value is not recoverable. The following table presents impairment charges and the remaining net fair value for nonfinancial assets that were measured during the periods presented (in thousands):

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

 

Fair Value

 

 

 

 

 

Impairment

 

 

Net of

 

 

Impairment

 

 

Net of

 

 

 

Hierarchy

 

Charge

 

 

Impairment

 

 

Charge

 

 

Impairment

 

Real estate inventories

 

Level 3

 

$

931

 

 

$

20,329

 

 

$

341,086

 

 

$

21,528

 

The homebuilding impairment charge as of December 31, 2013 was primarily related to the impairment of Coyote Springs in December 2013. Under the terms of the Transaction Agreement, certain assets and liabilities of WRECO and its subsidiaries were excluded from the transaction and retained by Weyerhaeuser, including assets and liabilities relating to the Coyote Springs Property. Consequently, WRECO recognized a $340.3 million impairment charge in the fourth quarter of 2013 for the impairment of the Coyote Springs Property. In addition, WRECO wrote off $3.0 million of option deposits and pre-acquisition costs related to the Coyote Springs Property.

 

Commitments and Contingencies
Commitments and Contingencies

15.

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 and environmental protection. As a result, we are subject to periodic examinations or inquiry by agencies administering these laws and regulations.

We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary.

In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. If our evaluations indicate loss contingencies that could be material are not probable, but are reasonably possible, we will disclose their nature with an estimate of a possible range of losses or a statement that such loss is not reasonably estimable.

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 construction-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. Included in our warranty reserve accrual are allowances to cover our estimated costs of self-insured retentions and deductible amounts under these policies and estimated costs for claims that may not be covered by applicable insurance or indemnities.  Estimation of these accruals include consideration of our claims history, including current claims and estimates of claims incurred but not yet reported.  In addition, we record expected recoveries from insurance carriers when proceeds are probable and estimable. Outstanding warranty insurance receivables were $10.0 million and $12.5 million as of December 31, 2014 and December 31, 2013, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheet.

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.

Warranty reserves consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Warranty reserves, beginning of period

 

$

24,449

 

 

$

24,485

 

 

$

26,404

 

Warranty reserves accrued

 

 

11,659

 

 

 

8,102

 

 

 

5,423

 

Liabilities assumed in the Merger

 

 

7,481

 

 

 

 

 

 

 

Adjustments to pre-existing reserves

 

 

199

 

 

 

1,933

 

 

 

2,650

 

Warranty expenditures

 

 

(10,518

)

 

 

(10,071

)

 

 

(9,992

)

Warranty reserves, end of period

 

$

33,270

 

 

$

24,449

 

 

$

24,485

 

Performance Bonds

We obtain surety bonds in the normal course of business with various municipalities and other government agencies to secure completion of certain infrastructure improvements of our projects.  As of December 31, 2014 and December 31, 2013, the Company had outstanding surety bonds totaling $355.2 million and $280.6 million, respectively. If any such performance bonds or letters of credit are called, we would be obligated to reimburse the issuer of the performance bond or letter of credit. We do not believe that a material amount of any currently outstanding performance bonds or letters of credit will be called.  Performance bonds do not have stated expiration dates. Rather, we are released from the performance bonds as the underlying performance is completed.

Operating Leases

Office Space, Buildings and Equipment

We lease certain property and equipment under non-cancelable operating leases. Office leases are for terms up to nine years and generally provide renewal options for terms up to an additional five years. In most cases, we expect that, in the normal course of business, leases that expire will be renewed or replaced by other leases. Equipment leases are typically for terms of three to four years.  The future minimum rental payments under operating leases, which primarily consist of office leases having initial or remaining noncancelable lease terms in excess of one year, are as follows (in thousands):

 

 

2015

 

$

7,255

 

2016

 

 

7,094

 

2017

 

 

5,985

 

2018

 

 

4,075

 

2019

 

 

3,870

 

Thereafter

 

 

8,400

 

 

 

$

36,679

 

 

For the years ended December 31, 2014, 2013 and 2012, rental expense was $4.9 million, $5.1 million and $5.4 million, respectively.

Our minimum sublease rental income due to us in future periods under noncancellable sublease arrangements for office space and other buildings and equipment for the next five years and thereafter are as follows (in thousands):

 

2015

 

$

624

 

2016

 

 

711

 

2017

 

 

535

 

2018

 

 

 

2019

 

 

 

Thereafter

 

 

 

 

 

$

1,870

 

Model Homes

As part of our model home activities, we sell selected model homes to third parties at fair value and lease them back at market lease payments for periods approximating six months to three years.  For the years ended December 31, 2014, 2013 and 2012, rental expense was $0.6 million, $0.7 million and $0.9 million, respectively.  As of December 31, 2014 our only model home commitments were $205,000 payable in 2015.

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 extending the lease through 2071.  The commercial buildings on these properties have been sold and the ground leases have been sublet to the buyers.

For one of these leases, we are responsible for making lease payments to the land owner, and we collect sublease payments from the buyers of the buildings.  Our lease commitments under this ground lease, which extends through 2071, were (in thousands):

 

2015

 

$

2,224

 

2016

 

 

2,224

 

2017

 

 

2,224

 

2018

 

 

2,224

 

2019

 

 

2,224

 

Thereafter

 

 

79,148

 

 

 

$

90,268

 

This ground lease has been subleased through 2041 to the buyers of the commercial buildings. Our lease commitments through 2041 total $60.1 million as of December 31, 2014, and are fully offset by sublease receipts under the noncancellable subleases.

For the second lease, the buyers of the buildings are responsible for making lease payments directly to the land owner. However, we have guaranteed the performance of the buyers/lessees. As of December 31, 2014, guaranteed future payments on the lease, which expires in 2041, were $11.4 million.

Purchase Obligations

In the ordinary course of business, we enter into land option contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require a cash deposit and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the use of funds from our corporate financing sources. Option contracts generally require a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. We generally have the right at our discretion to terminate our obligations under both purchase contracts and option contracts by forfeiting our cash deposit with no further financial responsibility to the land seller. As of December 31, 2014, we had $52.2 million of non-refundable cash deposits pertaining to land option contracts and purchase contracts with an aggregate remaining purchase price of approximately $457.9 million (net of deposits).

Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.

Stock-Based Compensation
Stock-Based Compensation

16.

Stock-Based Compensation

2013 Long-Term Incentive Plan

The Company’s stock compensation plan, the 2013 Long-Term Incentive Plan (the “2013 Incentive Plan”), was adopted by legacy TRI Pointe in January 2013 and amended with the approval of our stockholders in 2014. The 2013 Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, common stock, restricted stock, restricted stock units and performance awards. The 2013 Incentive Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2013 Incentive Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation.

As amended, the number of shares of our common stock that may be issued under the 2013 Incentive Plan is 11,727,833 shares. To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2013 Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of our common stock generally shall again be available under the 2013 Incentive Plan. As of December 31, 2014 there were 10,886,069 shares available for future grant under the 2013 Incentive Plan.

Converted Awards

Under the Transaction Agreement, each outstanding Weyerhaeuser equity award held by an employee of WRECO was converted into a similar equity award with TRI Pointe, based on the final exchange ratio of 2.1107 (the “Exchange Ratio”), rounded down to the nearest whole number of shares of common stock. The Company filed a registration statement on Form S-8 (Registration No. 333-197461) on July 16, 2014 to register 4,105,953 shares related to these equity awards. The converted awards have the same terms and conditions as the Weyerhaeuser equity awards except that all performance share units were surrendered in exchange for time-vesting restricted stock units without any performance-based vesting conditions or requirements and the exercise price of each converted stock option is equal to the original exercise price divided by the Exchange Ratio. There will be no future grants under the WRECO equity incentive plans. Refer to TRI Pointe’s Registration Statement on Form S-4, as amended (Registration No. 333-193248), for additional information on the Merger, the option exchange ratio and the treatment of equity awards under the Transaction Agreement.

The following table presents compensation expense recognized related to all stock-based awards (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Total stock-based compensation

 

$

7,679

 

 

$

5,002

 

 

$

3,854

 

As of December 31, 2014, total unrecognized stock-based compensation related to all stock-based awards was $10.9 million and the weighted average term over which the expense was expected to be recognized was 2.24 years.

Summary of Stock Option Activity

The following table presents a summary of stock option awards for the year ended December 31, 2014:

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

Weighted

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

 

Aggregate

 

 

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

Intrinsic

 

 

 

 

 

 

 

 

 

Price

 

 

Contractual

 

 

Value

 

 

 

 

 

Options

 

 

Per Share

 

 

Life

 

 

(in 000's)

 

Options outstanding at December 31, 2013 (1)

 

 

 

 

285,900

 

 

$

17.04

 

 

 

9.1

 

 

$

827

 

Granted

 

 

 

 

154,598

 

 

 

16.17

 

 

 

9.3

 

 

 

 

Assumed in the Merger

 

 

 

 

3,379,275

 

 

 

12.62

 

 

 

5.9

 

 

 

8,885

 

Exercised

 

 

 

 

(15,229

)

 

 

11.34

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

 

(481,995

)

 

 

13.24

 

 

 

 

 

 

 

 

 

Options outstanding at December 31, 2014

 

 

 

 

3,322,549

 

 

 

13.08

 

 

 

6.0

 

 

 

7,841

 

Options exercisable at December 31, 2014

 

 

 

 

1,813,003

 

 

 

12.27

 

 

 

4.0

 

 

 

5,573

 

(1)

Options outstanding at December 31, 2013 reflect outstanding options for the legal acquirer, TRI Pointe.

As discussed above, on July 7, 2014, the Company assumed an aggregate of 3,379,275 stock options, along with 726,678 restricted stock units discussed below, as a result of the Merger. The stock option awards assumed generally vest ratably over four years of continuous service and have a 10-year contractual term. Award provisions for awards granted in 2014, 2013, 2012 and 2011 at WRECO require an accelerated vesting schedule in the event of retirement eligibility or involuntary termination and will generally vest upon retirement for employees who retire at age 62 or older, but stop vesting for other voluntary terminations, including early retirement prior to age 62. The share-based compensation expense for individuals meeting the retirement eligibility requirements is recognized over a required service period that is less than the stated four-year vesting period.

Under ASC 805, for share-based payment awards held by employees of the accounting acquirer (WRECO), the legal exchange of the accounting acquirer awards for the legal acquirer (TRI Pointe) awards is considered, from an accounting perspective, to be a modification of the accounting acquirer’s outstanding awards. The modification was accounted for pursuant to ASC 718. The modification resulted in incremental stock-based compensation for the year ended December 31, 2014, of $722,000.

The fair value of stock option awards assumed in the Merger was determined by using an option-based model with the following assumptions:

 

 

 

2014 Grants

 

 

2013 Grants

 

 

2012 Grants

 

 

2011 Grants

 

Dividend yield

 

 

2.92

%

 

 

2.23

%

 

 

2.94

%

 

 

2.48

%

Expected volatility

 

 

31.71

%

 

 

38.00

%

 

 

40.41

%

 

 

38.56

%

Risk-free interest rate

 

 

1.57

%

 

 

0.92

%

 

 

1.01

%

 

 

2.65

%

Expected life (in years)

 

 

4.97

 

 

 

4.97

 

 

 

5.33

 

 

 

5.73

 

Expected volatility assumptions for all stock options are based on the historical volatility of similar companies’ stock prices from a trailing period equal to the expected life of the stock option and ending on the date of grant or date assumed. Historical data from TRI Pointe were used to estimate option exercise and employee terminations within the valuation model of all stock options and the risk-free rate for all stock options is based on the United States Treasury yield curve over a period matching the expected term of each option.

Summary of Restricted Stock Unit Activity

The following table presents a summary of restricted stock units (“RSUs”) for the year ended December 31, 2014:

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Aggregate

 

 

 

 

 

Restricted

 

 

Grant Date

 

 

Intrinsic

 

 

 

 

 

Stock

 

 

Fair Value

 

 

Value

 

 

 

 

 

Units

 

 

Per Share

 

 

(in 000's)

 

Nonvested RSUs at December 31, 2013(1)

 

 

 

 

145,517

 

 

$

17.68

 

 

$

2,900

 

Granted

 

 

 

 

274,287

 

 

 

15.33

 

 

 

4,183

 

Assumed in the Merger

 

 

 

 

726,678

 

 

 

15.74

 

 

 

11,082

 

Vested

 

 

 

 

(59,326

)

 

 

15.85

 

 

 

 

 

Forfeited

 

 

 

 

(204,447

)

 

 

15.74

 

 

 

 

 

Nonvested RSUs at December 31, 2014

 

 

 

 

882,709

 

 

 

15.62

 

 

 

13,461

 

(1)

Nonvested RSUs at December 31, 2013 reflect nonvested RSUs for the legal acquirer, TRI Pointe.

As discussed above, on July 7, 2014, the Company assumed an aggregate of 726,678 restricted stock units, along with 3,379,275 stock options, as a result of the Merger. Restricted stock units assumed in the Merger generally vest ratably over four years of continuous service. Award provisions require an accelerated vesting schedule in the event of retirement eligibility or involuntary termination. The share-based compensation expense for individuals meeting the retirement eligibility requirements is recognized over a required service period that is less than the stated four-year vesting period. There was no incremental expense resulting from the modification of the RSU awards on July 7, 2014 because the fair value before and after the modification was the same.

On April 7, 2014, the Company granted an aggregate of 217,839 restricted stock units to employees, officers and directors. The restricted stock units granted to employees and officers on April 7, 2014 ratably vest annually on the anniversary of the grant date over a three year period. The restricted stock units granted to directors on April 7, 2014 vest on January 31, 2015, except the restricted stock units granted to directors who left the board upon the closing of the Merger vested on the date they left the board based on the number of days served in 2014. The fair value of each restricted stock award granted on April 7, 2014 was measured using a price of $16.17 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 August 5, 2014, the Company granted an aggregate of 56,448 restricted stock units to members of its board of directors. The restricted stock units granted to directors on August 5, 2014 vest in their entirety on May 1, 2015. The fair value of each restricted stock award granted on August 5, 2014 was measured using $13.34 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.

As restricted stock units vest, a portion of the shares awarded is generally withheld to cover employee taxes. As a result, the number of restricted stock units vested and the number of shares of TRI Pointe common stock issued will differ.

Income Taxes
Income Taxes

17.

Income Taxes

The provision (benefit) for income tax attributable to income (loss) from continuing operations before income taxes consisted of (in thousands):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(109,565

)

 

$

21,773

 

 

$

1,457

 

State

 

 

5,339

 

 

 

1,646

 

 

 

122

 

Total current taxes

 

 

(104,226

)

 

 

23,419

 

 

 

1,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

147,797

 

 

 

(107,651

)

 

 

33,446

 

State

 

 

196

 

 

 

(1,929

)

 

 

3,885

 

Total deferred taxes

 

 

147,993

 

 

 

(109,580

)

 

 

37,331

 

Total income tax expense (benefit)

 

$

43,767

 

 

$

(86,161

)

 

$

38,910

 

The Company’s provision (benefit) for income taxes was different from the amount computed by applying the statutory federal income tax rate of 35% to the underlying income before income taxes as a result of the following (in thousands):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Taxes at the U.S. federal statutory rate

 

$

44,788

 

 

$

(83,109

)

 

$

34,870

 

State income taxes, net of federal tax impact

 

 

3,822

 

 

 

(859

)

 

 

3,964

 

Tax loss on the sale of WRI

 

 

(5,786

)

 

 

 

 

 

 

Non deductible transaction costs

 

 

2,594

 

 

 

 

 

 

 

Other, net

 

 

(1,651

)

 

 

(2,193

)

 

 

76

 

Total income tax expense (benefit)

 

$

43,767

 

 

$

(86,161

)

 

$

38,910

 

Effective income tax rate

 

 

34.2

%

 

 

36.3

%

 

 

39.1

%

Excluded from the calculation of our effective income tax rate for 2012 is a $400,000 benefit for the 2012 Energy Efficiency Credit that was not extended retroactively in law until the American Taxpayer Relief Act of 2012 was enacted in January 2013.

Deferred taxes consisted of the following at December 31, 2014 and 2013 (in thousands):

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

2014

 

 

2013

 

Deferred tax assets:

 

 

 

 

 

 

 

 

 

 

Impairment and other valuation reserves

 

 

 

$

110,816

 

 

$

230,430

 

Incentive compensation

 

 

 

 

2,646

 

 

 

15,892

 

Indirect costs capitalized

 

 

 

 

27,202

 

 

 

17,068

 

Net operating loss carryforwards (state)

 

 

 

 

29,975

 

 

 

34,000

 

Transaction costs

 

 

 

 

2,610

 

 

 

 

State taxes

 

 

 

 

1,368

 

 

 

 

Other costs and expenses

 

 

 

 

17,230

 

 

 

21,970

 

Gross deferred tax assets

 

 

 

 

191,847

 

 

 

319,360

 

Valuation allowance

 

 

 

 

(6,233

)

 

 

(8,300

)

Deferred tax assets, net of valuation allowance

 

 

 

 

185,614

 

 

 

311,060

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

 

 

 

(2,590

)

 

 

(3,040

)

Basis difference in inventory

 

 

 

 

(14,029

)

 

 

(14,007

)

Fixed assets

 

 

 

 

(555

)

 

 

 

Intangibles

 

 

 

 

(8,944

)

 

 

(2,463

)

Other

 

 

 

 

(1,675

)

 

 

(2,567

)

Deferred tax liabilities

 

 

 

 

(27,793

)

 

 

(22,077

)

Net deferred tax assets

 

 

 

$

157,821

 

 

$

288,983

 

In connection with the Merger, the Company acquired $16.8 million of net deferred tax assets and assumed $15.5 million of liabilities for uncertain tax positions.  

The Company accounts for income taxes in accordance with 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.

As of December 31, 2014, the Company had state net operating loss carryforward of $679.4 million, which will expire between 2015 and 2034. We had a valuation allowance related to deferred tax assets of $6.2 million and $8.3 million as of December 31, 2014 and December 31, 2013, respectively, related to certain state net operating loss carryforwards as the tax benefits from those state losses are not more likely than not to be realized.  The decrease in the valuation allowance in 2014 is principally due to the expiration of state net operating loss carryovers on which a full valuation allowance was previously recorded.

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.

Unrecognized tax benefits represent potential future obligations to taxing authorities if uncertain tax positions we have taken on previously filed tax returns are not sustained. These amounts represent the gross amount of exposure in individual jurisdictions and do not reflect any additional benefits expected to be realized if such positions were not sustained, such as federal deduction that could be realized if an unrecognized state deduction was not sustained.

The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions. The Company’s tax years 2010-2014 will remain open to examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credit carryforwards.

WRECO was part of the consolidated federal group of Weyerhaeuser NR Company, the Former Parent, through the tax period ended July 7, 2014. During 2013, the IRS completed the examination of the consolidated federal income tax returns for the taxable years 2008-2010. During April 2014, Weyerhaeuser NR Company’s 2012 consolidated federal income tax return was opened for examination. At this point, no adjustments are expected. In connection with the Merger, the Former Parent retained the obligation for uncertain tax positions arising through July 7, 2014. As a result, there is no liability for WRECO’s uncertain tax positions at July 7, 2014. No new uncertain tax positions were identified with respect to WRECO at December 31, 2014. Under the Tax Sharing Agreement, any additional tax liabilities that may arise as a result of the tax examinations of the pre-Merger periods are reimbursed by the Former Parent.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands):

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

2014

 

 

2013

 

Balance at beginning of year

 

 

 

 

 

 

 

 

 

 

Increase due to Merger

 

 

 

$

16,716

 

 

$

 

Increases (Decreases) related to current year tax positions

 

 

 

 

(1,859

)

 

 

 

Balance at end of year

 

 

 

$

14,857

 

 

$

 

The amount of unrecognized tax benefit that, if recognized and realized, would affect the effective tax rate is none as of December 31, 2014. Management believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months.

The Company classifies interest and penalties related to income taxes as part of income tax expense.  Accrued interest and penalties are included within the related liabilities in the balance sheet. The Company has recorded $48,000 of unpaid interest as a result of uncertain tax positions as of December 31, 2014.

Prior to the Merger, WRECO was included in the Weyerhaeuser NR Company consolidated federal income tax return and certain state income tax filings.  Income taxes were allocated using the pro rata method, which means our tax provisions and resulting income tax receivable from or payable to Weyerhaeuser NR Company represent the income tax amounts allocated to us on pro rata share method based upon our actual results. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards which exist for Weyerhaeuser NR Company and are attributable to our operations.

If we were to calculate income taxes using the separate return method, the effect on pro forma unaudited income from continuing operations and pro forma unaudited earnings per share would be as follows (in thousands, except per share amounts):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Income (loss) from continuing operations before taxes

 

 

 

 

 

 

 

 

 

 

 

 

as reported in the accompanying financial statements

 

$

127,964

 

 

$

(237,454

)

 

$

99,629

 

(Provision) benefit for income taxes assuming computation

 

 

 

 

 

 

 

 

 

 

 

 

on a separate return basis

 

 

(49,553

)

 

 

86,161

 

 

 

(38,910

)

Pro forma income (loss) from continuing operations

 

$

78,411

 

 

$

(151,293

)

 

$

60,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma earnings per share - basic

 

$

0.54

 

 

$

(1.17

)

 

$

0.47

 

Pro forma earnings per share - diluted

 

$

0.54

 

 

$

(1.17

)

 

$

0.47

 

Assuming computation on a separate return basis, our income tax provision would have increased by $5.8 million for the year ended December 31, 2014 related to the tax loss on the sale of Weyerhaeuser Realty Investors, Inc. to Weyerhaeuser NR Company that would not have provided a benefit to our income tax provision assuming computation on a separate return basis.  There would be no change to our income tax provision for the years ended December 31, 2013 and 2012.  

Refer to Note 18, Related Party Transactions, for a description of the tax sharing agreement between TRI Pointe and Weyerhaeuser.

 

Related Party Transactions
Related Party Transactions

18.

Related Party Transactions

Prior to the Merger, WRECO was a wholly-owned subsidiary of Weyerhaeuser. Weyerhaeuser provided certain services including payroll processing and related employee benefits, other corporate services such as corporate governance, cash management and other treasury services, administrative services such as government relations, tax, internal audit, legal, accounting, human resources and equity-based compensation plan administration, lease of office space, aviation services and insurance coverage. WRECO was allocated a portion of Weyerhaeuser corporate general and administrative costs on either a proportional cost or usage basis.

Weyerhaeuser-allocated corporate general and administrative expenses were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

 

2014

 

 

 

2013

 

 

 

2012

 

Weyerhaeuser-allocated costs

 

$

10,735

 

 

$

22,884

 

 

$

20,547

 

These expenses may not be indicative of the actual level of expense WRECO would have incurred if it had operated as an independent company or of expenses expected to be incurred in the future after the Closing Date.

During the year ended December 31, 2014 and prior to the Merger, WRECO sold $4.8 million of mineral rights and $21.2 million of land to Weyerhaeuser.

As of December 31, 2013, there were balances owed to Weyerhaeuser including accounts payable to Weyerhaeuser of $18.9 million, which is recorded in accounts payable on the accompanying consolidated balance sheet, $16.6 million of income tax liability to Weyerhaeuser, which is recorded in accrued expenses and other liabilities on the accompanying balance sheet and $834.6 million of debt payable to Weyerhaeuser, which is recorded on the face of the accompanying balance sheet. All amounts owed to Weyerhaeuser were settled on the Closing Date in connection with the Merger.

TRI Pointe has certain liabilities with Weyerhaeuser related to a tax sharing agreement executed in connection with the Merger. The liabilities under the tax sharing agreement relate to a portion of the California net operating loss generated prior to the Merger that are expected to be realized after July 7, 2014; federal tax credits generated prior to the Merger that are expected to be realized after July 7, 2014; and deductions for stock option awards granted through December 31, 2013 that are expected to be realized after July 7, 2014.  As of December 31, 2014, we had an income tax liability to Weyerhaeuser of $15.7 million which is recorded in accrued expenses and other liabilities on the accompanying balance sheet.

Discontinued Operations
Discontinued Operations

19.

Discontinued Operations

On October 31, 2013, a wholly-owned subsidiary of WRECO, Weyerhaeuser Realty Investors, Inc., (“WRI”), was sold to Weyerhaeuser NR Company. The results of operations for WRI have been recorded as discontinued operations in the accompanying consolidated financial statements. Cash flows of WRI through the date of the sale to Weyerhaeuser remain fully consolidated in the accompanying consolidated statement of cash flow for the year ended December 31, 2013.

Earnings of discontinued operations is as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Earnings before income taxes

 

$

 

 

$

602

 

 

$

487

 

Gain on sale of discontinued operations

 

 

 

 

 

1,946

 

 

 

-

 

(Provision) benefit for income taxes

 

 

 

 

 

(710

)

 

 

275

 

Discontinued operations, net of income taxes

 

$

 

 

$

1,838

 

 

$

762

 

On October 31, 2013, Weyerhaeuser NR Company acquired WRI for $3.6 million. The purchase price was recorded as a reduction in the debt payable to Weyerhaeuser. The transaction resulted in a net gain of approximately $1.9 million, which was recognized in the fourth quarter of 2013.

Supplemental Disclosure to Consolidated Statements of Cash Flow
Supplemental Disclosure to Consolidated Statements of Cash Flow

20.

Supplemental Disclosure to Consolidated Statements of Cash Flow

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

 

Year Ended December 31,

 

 

2014

 

 

2013

 

 

2012

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

Cash paid (received) during the period for:

 

 

 

 

 

 

 

 

 

 

 

Interest

$

42,969

 

 

$

18,811

 

 

$

26,763

 

Income taxes

$

43,005

 

 

$

(10,521

)

 

$

(20,744

)

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of noncash activities:

 

 

 

 

 

 

 

 

 

 

 

Increase in real estate inventory due to distribution of land from an

 

 

 

 

 

 

 

 

 

 

 

unconsolidated joint venture

$

5,052

 

 

$

 

 

$

 

Distribution to Weyerhaeuser of excluded assets and liabilities

$

126,687

 

 

$

 

 

$

 

Amounts owed to Weyerhaeuser related to the tax sharing agreement

$

15,688

 

 

$

 

 

$

 

Noncash settlement of debt payable to Weyerhaeuser

$

70,082

 

 

$

 

 

$

 

Amortization of senior note discount

$

804

 

 

$

 

 

$

 

Effect of net consolidation and de-consolidation of variable interest entities:

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in consolidated real estate inventory not owned

$

6,343

 

 

$

(7,411

)

 

$

39,057

 

Increase (decrease) in deposits on real estate under option or

 

 

 

 

 

 

 

 

 

 

 

contract and other assets

$

780

 

 

$

3,005

 

 

$

(4,511

)

Increase in debt held by variable interest entities

$

 

 

$

 

 

$

7,293

 

(Increase) decrease in noncontrolling interests

$

(7,123

)

 

$

4,406

 

 

$

(41,839

)

 

 

 

 

 

 

 

 

 

 

 

 

Merger:

 

 

 

 

 

 

 

 

 

 

 

Fair value of assets, excluding cash acquired

$

724,995

 

 

$

 

 

$

 

Liabilities assumed

$

276,347

 

 

$

 

 

$

 

 

Results of Quarterly Operations
Results of Quarterly Operations

21.

Results of Quarterly Operations (Unaudited)

The following table presents our unaudited quarterly financial data. As discussed in Note 1, the Merger was treated as a reverse acquisition and WRECO is considered the accounting acquirer.  Accordingly, WRECO is reflected as the predecessor and acquirer and therefore consolidated financial statements included in this Annual Report on Form 10-K reflect historical consolidated financial statements of WRECO for all periods presented, and do not include the historical financial statements of legacy TRI Pointe prior to the Closing Date.  As a result, quarterly financial data presented in the following table for periods prior to the third quarter of 2014 will differ from amounts previously reported on the Form 10-Q from the same periods.

In our opinion, this information has been prepared on a basis consistent with that of our audited consolidated financial statements and all necessary material adjustments, consisting of normal recurring accruals and adjustments, have been included to present fairly the unaudited quarterly financial data. Our quarterly results of operations for these periods are not necessarily indicative of future results of operations (in thousands, except per share amounts):

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

 

2014

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

Total revenues

 

$

248,132

 

 

$

342,563

 

 

$

477,920

 

 

$

635,001

 

Cost of homes sales and other

 

 

195,595

 

 

 

267,937

 

 

 

387,721

 

 

 

506,101

 

Impairments and lot option abandonments

 

 

468

 

 

 

104

 

 

 

552

 

 

 

1,391

 

Gross margin

 

$

52,069

 

 

$

74,522

 

 

$

89,647

 

 

$

127,509

 

Income (loss) from continuing operations

 

$

7,581

 

 

$

24,225

 

 

$

10,965

 

 

$

41,426

 

Discontinued operations, net of income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,581

 

 

$

24,225

 

 

$

10,965

 

 

$

41,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

 

2013

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

Total revenues

 

$

195,516

 

 

$

267,837

 

 

$

323,866

 

 

$

487,493

 

Cost of homes sales and other

 

 

159,567

 

 

 

211,135

 

 

 

247,119

 

 

 

371,646

 

Impairments and lot option abandonments

 

 

493

 

 

 

203

 

 

 

549

 

 

 

344,203

 

Gross margin

 

$

35,456

 

 

$

56,499

 

 

$

76,198

 

 

$

(228,356

)

Income (loss) from continuing operations

 

$

(55

)

 

$

8,441

 

 

$

19,941

 

 

$

(179,620

)

Discontinued operations, net of income taxes

 

 

189

 

 

 

(23

)

 

 

218

 

 

 

1,454

 

Net income

 

$

134

 

 

$

8,418

 

 

$

20,159

 

 

$

(178,166

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.38

)

Discontinued operations

 

 

 

 

 

 

 

 

0.01

 

 

 

0.01

 

Net earnings (loss) per share

 

$

 

 

$

0.06

 

 

$

0.16

 

 

$

(1.37

)

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.38

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Net earnings (loss) per share

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.37

)

 

Organization and Summary of Significant Accounting Policies (Policies)

Organization

TRI Pointe Homes, Inc. is engaged in the design, construction and sale of innovative 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.

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”).

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as described in “Reverse Acquisition” below.  All significant intercompany accounts have been eliminated upon consolidation.  Certain prior period amounts have been reclassified to conform to current period presentation.  Subsequent events have been evaluated through the date the financial statements were issued.

Unless the context otherwise requires, the terms “we”, “us”, “our” and “the Company” refer to TRI Pointe Homes, Inc. (and its consolidated subsidiaries).

Reverse Acquisition

On July 7, 2014 (the “Closing Date”), TRI Pointe Homes, Inc. consummated the previously announced merger (the “Merger”) of our wholly-owned subsidiary, Topaz Acquisition, Inc. (“Merger Sub”), with and into Weyerhaeuser Real Estate Company (“WRECO”), with WRECO surviving the Merger and becoming our wholly-owned subsidiary, as contemplated by the Transaction Agreement, dated as of November 3, 2013 (the “Transaction Agreement”), by and among us, Weyerhaeuser Company (“Weyerhaeuser”), the Company, WRECO and Merger Sub. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations (“ASC 805”). For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer. Accordingly, WRECO is reflected as the predecessor and acquirer and therefore the accompanying consolidated financial statements reflect the historical consolidated financial statements of WRECO for all periods presented and do not include the historical financial statements of TRI Pointe prior to the Closing Date. Subsequent to the Closing Date, the consolidated financial statements reflect the results of the combined company.

See Note 2, Merger with Weyerhaeuser Real Estate Company, for further information on the Merger. In the Merger, each issued and outstanding WRECO common share was converted into 1.297 shares of TRI Pointe common stock. The historical issued and outstanding WRECO common shares (100,000,000 common shares for all periods presented prior to the Merger) have been recast (as 129,700,000 common shares of the Company for all periods prior to the Merger) in all periods presented to reflect this conversion.

Use of Estimates

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from our estimates.

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 an initial maturity date of less than three months. 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.

Real Estate Inventories and Cost of Sales

Real estate inventories consist of land, land under development, homes under construction, completed homes and model homes and are stated at cost, net of impairment losses. We capitalize direct carrying costs, including interest, property taxes and related development costs to inventories. Field construction supervision and related direct overhead are also included in the capitalized cost of inventories. Direct construction costs are specifically identified and allocated to homes while other common costs, such as land, land improvements and carrying costs, are allocated to homes within a community based upon their anticipated relative sales or fair value. In accordance with ASC Topic 835, Interest (“ASC 835”), homebuilding interest capitalized as a cost of inventories owned is included in costs of sales as related units or lots are sold. To the extent our debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. Qualified assets represent projects that are actively under development. Homebuilding cost of sales is recognized at the same time revenue is recognized and is recorded based upon total estimated costs to be allocated to each home within a community. Any changes to the estimated costs are allocated to the remaining undelivered lots and homes within their respective community. The estimation and allocation of these costs requires a substantial degree of judgment by management.

The estimation process involved in determining relative sales or fair values is inherently uncertain because it involves estimating future sales values of homes before delivery. Additionally, in determining the allocation of costs to a particular land parcel or individual home, we rely on project budgets that are based on a variety of assumptions, including assumptions about construction schedules and future costs to be incurred. It is common that actual results differ from budgeted amounts for various reasons, including construction delays, increases in costs that have not been committed or unforeseen issues encountered during construction that fall outside the scope of existing contracts, or costs that come in less than originally anticipated. While the actual results for a particular construction project are accurately reported over time, a variance between the budget and actual costs could result in the understatement or overstatement of costs and have a related impact on gross margins between reporting periods. To reduce the potential for such variances, we have procedures that have been applied on a consistent basis, including assessing and revising project budgets on a periodic basis, obtaining commitments from subcontractors and vendors for future costs to be incurred and utilizing the most recent information available to estimate costs.

If there are indications of impairment, we perform a detailed budget and cash flow review of our real estate assets to determine whether the estimated remaining undiscounted future cash flows of the community are more or less than the asset’s carrying value. If the undiscounted cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the undiscounted cash flows are less than the asset’s carrying value, the asset is deemed impaired and is written down to fair value. These impairment evaluations require us to make estimates and assumptions regarding future conditions, including timing and amounts of development costs and sales prices of real estate assets, to determine if expected future undiscounted cash flows will be sufficient to recover the asset’s carrying value.

When estimating undiscounted cash flows of a community, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property.

Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Depending on the underlying objective of the community, assumptions could have a significant impact on the projected cash flow analysis. For example, if our objective is to preserve operating margins, our cash flow analysis will be different than if the objective is to increase sales. These objectives may vary significantly from community to community and over time. If assets are considered impaired, impairment is determined by the amount the asset’s carrying value exceeds its fair value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development, construction and delivery timelines; market risk of price erosion; uncertainty of development or construction cost increases; and other risks specific to the asset or market conditions where the asset is located when assessment is made. These factors are specific to each community and may vary among communities. We perform a quarterly review for indicators of impairment. For the years ended December 31, 2014, 2013 and 2012 we recorded impairment charges of $931,000, $341.1 million and $735,000, respectively.  The impairment charge in 2013 was primarily related to the impairment of the Coyote Springs Property, which was an excluded asset per the Transaction Agreement.  

Revenue Recognition

In accordance with ASC Topic 360, Property, Plant, and Equipment, revenues from home sales and other real estate sales are recorded and a profit is recognized when the respective units are delivered. Home sales and other real estate sales are delivered when all conditions of escrow are met, including delivery of the home or other real estate asset, title passage, appropriate consideration is received and collection of associated receivables, if any, is reasonably assured. Sales incentives are a reduction of revenues when the respective unit is delivered. When it is determined that the earnings process is not complete, the sale and the related profit are deferred for recognition in future periods. The profit we record is based on the calculation of cost of sales, which is dependent on our allocation of costs, as described in more detail above in the section entitled “Real Estate Inventories and Cost of Sales.”

Warranty Reserves

In the normal course of business, we incur warranty-related costs associated with homes that have been delivered to homebuyers. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized while indirect warranty overhead salaries and related costs are charged to cost of sales in the period incurred. Amounts are accrued based upon our historical rates. We assess the adequacy of our warranty accrual on a quarterly basis and adjust the amounts as appropriate for current quantitative and qualitative factors. Factors that affect the warranty accruals include the number of homes delivered, historical and anticipated rates of warranty claims and cost per claim. Although we consider the warranty accruals reflected in our consolidated balance sheet to be adequate, actual future costs could differ significantly from our currently estimated amounts. Our warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

Investments in Unconsolidated Entities

We have investments in unconsolidated entities over which we have significant influence that we account for using the equity method with taxes provided on undistributed earnings. We record earnings and accrue taxes in the period that the earnings are recorded by our affiliates. Under the equity method, our share of the unconsolidated entities’ earnings or loss is included in equity in income (loss) of unconsolidated entities in the accompanying consolidated statement of operations. We evaluate our investments in unconsolidated entities for impairment when events and circumstances indicate that the carrying value of the investment may not be recoverable.

Variable Interest Entities

The Company accounts for variable interest entities in accordance with ASC Topic 810, Consolidation (“ASC 810”). Under ASC 810, a variable interest entity (“VIE”) is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve, or are conducted on behalf of, the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE.

Under ASC 810, a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as inventories owned, which we would have to write off should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE.

Stock-Based Compensation

We account for share-based awards in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees.

Sales and Marketing Expense

Sales and marketing costs incurred to sell real estate projects are capitalized if they are reasonably expected to be recovered from the sale of the project or from incidental operations and are incurred for tangible assets that are used directly through the selling period to aid in the sale of the project or services that have been performed to obtain regulatory approval of sales. All other selling expenses and other marketing costs are expensed in the period incurred.

Restructuring Charges

Restructuring charges are incurred related to the Merger in addition to general cost reduction initiatives.   These charges are comprised of employee retention and severance-related expenses and lease termination costs.  We account for restructuring charges in accordance with ASC Topic 420, Exit or Disposal Cost Obligations or ASC Topic 712 – Compensation – Nonretirement Postemployment Benefits.  

Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recorded based on future tax consequences of both temporary differences between the amounts reported for financial reporting purposes and the amounts deductible for income tax purposes, and are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted.

Each quarter we assess our deferred tax assets to determine whether all or any portion of the assets 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. Due to uncertainties inherent in the estimation process, it is possible that actual results may vary from estimates.

We classify any interest and penalties related to income taxes as part of income tax expense. As of December 31, 2014, the Company has liabilities for gross unrecognized tax benefits of $14.9 million the majority of which were assumed in connection with the Merger.

Goodwill

In connection with the Merger, $139.3 million of goodwill has been recorded as of December 31, 2014. We have completed the majority of our business combination accounting as of December 31, 2014 and expect to complete the remainder in the first quarter of 2015.  In accordance with ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”), we will evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.  Based on our qualitative analysis, we have concluded as of December 31, 2014, our goodwill was not impaired.

Recently Issued Accounting Standards

In April 2014, the FASB issued amendments to Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The update requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). The implementation of the amended guidance is not expected to have a material impact on our consolidated financial position or results of operations.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 supersedes the revenue-recognition requirements in ASC Topic 605, Revenue Recognition, most industry-specific guidance throughout the industry topics of the accounting standards codification, and some cost guidance related to construction-type and production-type contracts. ASU 2014-09 is effective for public entities for the annual periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. We are currently evaluating the approach for implementation and the potential impact of adopting this guidance on our consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (“ASU 2014-15”), Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We believe the adoption of this guidance will not have a material effect on our consolidated financial statements.

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

In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply.

Merger with Weyerhaeuser Real Estate Company (Tables)

The following table summarizes the calculation of the fair value of the total consideration transferred and the provisional amounts recognized as of the Closing Date (in thousands, except shares and closing stock price):

 

Calculation of consideration transferred

 

 

 

 

 

 

 

 

TRI Pointe shares outstanding

 

 

 

 

 

 

31,632,533

 

TRI Pointe closing stock price on July 7, 2014

 

 

 

 

 

$

15.85

 

Consideration attributable to common stock

 

 

 

 

 

$

501,376

 

Consideration attributable to TRI Pointe

   equity awards

 

 

 

 

 

 

1,072

 

Total consideration transferred

 

 

 

 

 

$

502,448

 

Assets acquired and liabilities assumed

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

$

53,800

 

Accounts receivable

 

 

 

 

 

 

654

 

Real estate inventories

 

 

 

 

 

 

539,677

 

Intangible asset

 

 

 

 

 

 

17,300

 

Goodwill

 

 

 

 

 

 

139,304

 

Other assets

 

 

 

 

 

 

28,060

 

Total assets acquired

 

 

 

 

 

 

778,795

 

Accounts payable

 

 

 

 

 

 

26,105

 

Accrued expenses and other liabilities

 

 

 

 

 

 

23,114

 

Notes payable and other borrowings

 

 

 

 

 

 

227,128

 

Total liabilities assumed

 

 

 

 

 

 

276,347

 

Total net assets acquired

 

 

 

 

 

$

502,448

 

 

The following represents unaudited pro forma operating results as if the acquisition had been completed as of January 1, 2013 (in thousands, except per share amounts):

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2014

 

 

2013

 

Total revenues

 

 

 

$

1,865,723

 

 

$

1,532,667

 

Net income (loss)

 

 

 

$

88,416

 

 

$

91,028

 

Earnings per share - basic

 

 

 

$

0.55

 

 

$

0.56

 

Earnings per share - diluted

 

 

 

$

0.55

 

 

$

0.56

 

 

Restructuring Charges (Tables)

Restructuring costs were comprised of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Employee-related costs

 

$

9,211

 

 

$

5,736

 

 

$

573

 

Lease termination costs

 

 

1,332

 

 

 

5,202

 

 

 

1,887

 

Total

 

$

10,543

 

 

$

10,938

 

 

$

2,460

 

 

Changes in employee-related restructuring reserves were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Accrued employee-related costs, beginning of period

 

$

4,336

 

 

$

28

 

 

$

104

 

Current year charges

 

 

8,264

 

 

 

5,736

 

 

 

573

 

Payments

 

 

(8,756

)

 

 

(1,428

)

 

 

(649

)

Accrued employee-related costs, end of period

 

$

3,844

 

 

$

4,336

 

 

$

28

 

 

Changes in lease termination related restructuring reserves were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Accrued lease termination costs, beginning of period

 

$

3,506

 

 

$

2,335

 

 

$

3,674

 

Current year charges

 

 

1,332

 

 

 

5,202

 

 

 

1,887

 

Payments

 

 

(3,444

)

 

 

(4,031

)

 

 

(3,226

)

Accrued lease termination costs, end of period

 

$

1,394

 

 

$

3,506

 

 

$

2,335

 

 

Segment Information (Tables)
Summary of Financial Information Relating to Reportable Segments

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 from continuing operations before income taxes for each of our reportable segments were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Total revenues

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

150,689

 

 

$

145,822

 

 

$

103,222

 

Pardee

 

 

525,381

 

 

 

519,074

 

 

 

356,489

 

Quadrant

 

 

145,377

 

 

 

127,237

 

 

 

127,785

 

Trendmaker

 

 

281,270

 

 

 

260,566

 

 

 

298,396

 

TRI Pointe

 

 

324,208

 

 

 

 

 

 

 

Winchester

 

 

276,691

 

 

 

222,013

 

 

 

184,414

 

 

 

$

1,703,616

 

 

$

1,274,712

 

 

$

1,070,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

10,845

 

 

$

10,438

 

 

$

5,347

 

Pardee

 

 

74,898

 

 

 

(258,138

)

 

 

87,691

 

Quadrant

 

 

9,028

 

 

 

1,504

 

 

 

(2,851

)

Trendmaker

 

 

31,684

 

 

 

28,452

 

 

 

29,472

 

TRI Pointe

 

 

19,272

 

 

 

 

 

 

 

Winchester

 

 

24,612

 

 

 

24,561

 

 

 

18,537

 

Corporate (1)

 

 

(42,375

)

 

 

(44,271

)

 

 

(38,567

)

 

 

$

127,964

 

 

$

(237,454

)

 

$

99,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairments and lot option abandonments

 

 

 

 

 

 

 

 

 

 

 

 

Maracay

 

$

443

 

 

$

203

 

 

$

181

 

Pardee

 

 

306

 

 

 

343,661

 

 

 

133

 

Quadrant

 

 

1,059

 

 

 

1,146

 

 

 

2,575

 

Trendmaker

 

 

45

 

 

 

7

 

 

 

 

TRI Pointe

 

 

49

 

 

 

 

 

 

 

Winchester

 

 

613

 

 

 

431

 

 

 

702

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

$

2,515

 

 

$

345,448

 

 

$

3,591

 

 

(1)

Includes $18.0 million of Merger related transaction costs and $5.5 million of restructuring charges for the year ended December 31, 2014.

Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

Real estate inventories

 

 

 

 

 

 

 

 

Maracay

 

$

153,577

 

 

$

131,380

 

Pardee

 

 

924,362

 

 

 

875,618

 

Quadrant

 

 

153,493

 

 

 

113,088

 

Trendmaker

 

 

176,696

 

 

 

130,973

 

TRI Pointe

 

 

613,666

 

 

 

 

Winchester

 

 

258,389

 

 

 

214,467

 

 

 

$

2,280,183

 

 

$

1,465,526

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

 

Maracay

 

$

170,932

 

 

$

138,552

 

Pardee

 

 

1,000,489

 

 

 

976,262

 

Quadrant

 

 

167,796

 

 

 

125,456

 

Trendmaker

 

 

195,829

 

 

 

134,628

 

TRI Pointe

 

 

764,001

 

 

 

 

Winchester

 

 

281,547

 

 

 

234,419

 

Corporate and Other

 

 

332,930

 

 

 

301,147

 

 

 

$

2,913,524

 

 

$

1,910,464

 

 

Earnings Per Share (Tables)
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):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

84,197

 

 

$

(151,293

)

 

$

60,719

 

Discontinued operations, net of income taxes

 

 

 

 

 

1,838

 

 

 

762

 

Net income

 

$

84,197

 

 

$

(149,455

)

 

$

61,481

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

 

145,044,351

 

 

 

129,700,000

 

 

 

129,700,000

 

Effect of dilutive shares:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options and unvested restricted stock units

 

 

486,938

 

 

 

 

 

 

 

Diluted weighted-average shares outstanding

 

 

145,531,289

 

 

 

129,700,000

 

 

 

129,700,000

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.58

 

 

$

(1.17

)

 

$

0.47

 

Discontinued operations

 

 

 

 

 

0.02

 

 

 

 

Net earnings per share

 

$

0.58

 

 

$

(1.15

)

 

$

0.47

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.58

 

 

$

(1.17

)

 

$

0.47

 

Discontinued operations

 

 

 

 

 

0.02

 

 

 

 

Net earnings per share

 

$

0.58

 

 

$

(1.15

)

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Antidilutive stock options not included

   in diluted earnings per share

 

 

1,295,280

 

 

 

 

 

 

 

 

Receivables, net (Tables)
Components of Receivables, Net

Receivables, net consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

Accounts receivable, net

 

$

9,771

 

 

$

8,649

 

Warranty insurance receivable (Note 15)

 

 

10,047

 

 

 

12,489

 

Notes and contracts receivable

 

 

300

 

 

 

39,259

 

Total receivables

 

$

20,118

 

 

$

60,397

 

 

Real Estate Inventories (Tables)

Real estate inventories consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Real estate inventories owned:

 

 

 

 

 

 

 

 

Homes completed or under construction

 

$

461,712

 

 

$

308,856

 

Land under development

 

 

1,391,303

 

 

 

760,731

 

Land held for future development

 

 

245,673

 

 

 

264,120

 

Model homes

 

 

103,270

 

 

 

53,351

 

Total real estate inventories owned

 

 

2,201,958

 

 

 

1,387,058

 

Real estate inventories not owned:

 

 

 

 

 

 

 

 

Land purchase and land option deposits

 

 

44,155

 

 

 

38,788

 

Consolidated inventory held by VIEs

 

 

34,070

 

 

 

39,680

 

Total real estate inventories not owned

 

 

78,225

 

 

 

78,468

 

Total real estate inventories

 

$

2,280,183

 

 

$

1,465,526

 

 

Interest incurred, capitalized and expensed were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Interest incurred

 

$

41,706

 

 

$

22,674

 

 

$

27,038

 

Interest capitalized

 

 

(38,975

)

 

 

(19,081

)

 

 

(22,059

)

Interest expensed

 

$

2,731

 

 

$

3,593

 

 

$

4,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized interest in beginning inventory

 

$

138,233

 

 

$

155,823

 

 

$

164,056

 

Interest capitalized as a cost of inventory

 

 

38,975

 

 

 

19,081

 

 

 

22,059

 

Interest previously capitalized as a cost of inventory, included in cost of sales

 

 

(52,747

)

 

 

(36,671

)

 

 

(30,292

)

Capitalized interest in ending inventory

 

$

124,461

 

 

$

138,233

 

 

$

155,823

 

 

Real estate inventory impairments and land option abandonments consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Real estate inventory impairments

 

$

931

 

 

$

341,086

 

 

$

735

 

Land option abandonments and pre-acquisition costs

 

 

1,584

 

 

 

4,362

 

 

 

2,856

 

 

 

$

2,515

 

 

$

345,448

 

 

$

3,591

 

 

Investments in Unconsolidated Entities (Tables)

Our cumulative investment in entities accounted for on the equity method, including our share of earnings and losses, consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Limited partnerships and limited liability company interests

 

$

13,710

 

 

$

18,454

 

General partnership interests

 

 

3,095

 

 

 

2,469

 

Total

 

$

16,805

 

 

$

20,923

 

 

Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are provided below. Because our ownership interest in these entities varies, a direct relationship does not exist between the information presented below and the amounts that are reflected on our consolidated balance sheets as our investment in unconsolidated entities or on our consolidated statement of operations as equity in (loss) income of unconsolidated entities.

Assets and liabilities of unconsolidated entities (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Assets

 

 

 

 

 

 

 

 

Cash

 

$

17,154

 

 

$

10,459

 

Receivables

 

 

9,550

 

 

 

9,443

 

Real estate inventories

 

 

95,500

 

 

 

254,505

 

Other assets

 

 

620

 

 

 

535

 

Total assets

 

$

122,824

 

 

$

274,942

 

Liabilities and equity

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

10,914

 

 

$

76,248

 

Company's equity

 

 

16,805

 

 

 

20,923

 

Outside interests' equity

 

 

95,105

 

 

 

177,771

 

Total liabilities and equity

 

$

122,824

 

 

$

274,942

 

Results of operations from unconsolidated entities (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Net sales

 

$

606

 

 

$

6,271

 

 

$

15,855

 

Other operating income (expense)

 

 

(4,290

)

 

 

(7,521

)

 

 

(12,244

)

Other income (expense)

 

 

(2

)

 

 

(18

)

 

 

(220

)

Net income (loss)

 

$

(3,686

)

 

$

(1,268

)

 

$

3,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company's equity in (loss) income of unconsolidated entities

 

$

(288

)

 

$

2

 

 

$

2,490

 

 

Variable Interest Entities (Tables)
Summary of Interests in Land Option Agreements

The following provides a summary of our interests in land option agreements (in thousands):

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

Remaining

 

 

Consolidated

 

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

 

 

 

Purchase

 

 

Inventory

 

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

 

Deposits

 

 

Price

 

 

Held by VIEs

 

Consolidated VIEs

 

$

8,071

 

 

$

43,432

 

 

$

34,070

 

 

$

6,979

 

 

$

34,724

 

 

$

39,680

 

Unconsolidated VIEs

 

 

13,309

 

 

 

129,637

 

 

N/A

 

 

 

7,102

 

 

 

75,171

 

 

N/A

 

Other land option

   agreements

 

 

30,846

 

 

 

284,819

 

 

N/A

 

 

 

31,686

 

 

 

321,240

 

 

N/A

 

Total

 

$

52,226

 

 

$

457,888

 

 

$

34,070

 

 

$

45,767

 

 

$

431,135

 

 

$

39,680

 

 

Goodwill and Other Intangible Assets (Tables)

Goodwill and other intangible assets consisted of the following (in thousands):

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

Gross

 

 

 

 

 

 

Net

 

 

Gross

 

 

 

 

 

 

Net

 

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

Amortization

 

 

Amount

 

Goodwill

 

$

139,304

 

 

$

 

 

$

139,304

 

 

$

 

 

$

 

 

$

 

Trade names

 

 

27,979

 

 

 

(4,720

)

 

 

23,259

 

 

 

10,679

 

 

 

(4,185

)

 

 

6,494

 

 

 

$

167,283

 

 

$

(4,720

)

 

$

162,563

 

 

$

10,679

 

 

$

(4,185

)

 

$

6,494

 

 

Expected amortization of our intangible asset related to Maracay for the next five years and thereafter is (in thousands):

 

 

 

December 31,

 

 

 

2014

 

2015

 

$

534

 

2016

 

 

534

 

2017

 

 

534

 

2018

 

 

534

 

2019

 

 

534

 

Thereafter

 

 

3,289

 

Total

 

$

5,959

 

 

Other Assets (Tables)
Schedule of Other Assets

Other assets consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Prepaid expenses

 

$

29,111

 

 

$

8,590

 

Refundable fees and other deposits

 

 

15,581

 

 

 

19,566

 

Development rights, held for future use or sale

 

 

7,409

 

 

 

9,090

 

Deferred loan costs on Senior Notes

 

 

23,686

 

 

 

 

Operating properties and equipment, net

 

 

11,719

 

 

 

17,386

 

Income tax receivable

 

 

10,713

 

 

 

 

Other

 

 

7,186

 

 

 

8,999

 

 

 

$

105,405

 

 

$

63,631

 

 

Accrued Expenses and Other Liabilities (Tables)
Schedule of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Accrued payroll and related costs

 

$

24,717

 

 

$

48,232

 

Warranty reserves (Note 15)

 

 

33,270

 

 

 

24,449

 

Estimated cost for completion

 

 

54,437

 

 

 

53,160

 

Customer deposits

 

 

14,229

 

 

 

13,432

 

Debt (nonrecourse) held by VIEs (Note 9)

 

 

9,512

 

 

 

6,571

 

Income tax liability to Weyerhaeuser (Note 18)

 

 

15,659

 

 

 

16,577

 

Liability for uncertain tax positions (Note 17)

 

 

13,797

 

 

 

 

Accrued interest on Senior Notes and notes payable

 

 

3,059

 

 

 

 

Accrued insurance expense

 

 

9,180

 

 

 

 

Other

 

 

32,149

 

 

 

28,261

 

 

 

$

210,009

 

 

$

190,682

 

 

Senior Notes and Notes Payable and Other Borrowings (Tables)

Senior notes consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

4.375% Senior Notes due June 15, 2019, net of discount

 

$

445,501

 

 

$

 

5.875% Senior Notes due June 15, 2024, net of discount

 

 

442,001

 

 

 

 

 

 

$

887,502

 

 

$

 

 

Notes payable and other borrowings consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Unsecured revolving Credit Facility

 

$

260,000

 

 

$

 

Seller financed loans

 

 

14,677

 

 

 

 

Debt payable to Weyerhaeuser

 

 

 

 

 

834,589

 

 

 

$

274,677

 

 

$

834,589

 

 

Fair Value Disclosures (Tables)

A summary of assets and liabilities at December 31, 2014 and 2013, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

 

 

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

Hierarchy

 

Book Value

 

 

Fair Value

 

 

Book Value

 

 

Fair Value

 

Receivables (a)

 

Level 3

 

$

20,118

 

 

$

20,118

 

 

$

60,397

 

 

$

60,390

 

Senior Notes (b)

 

Level 2

 

 

887,502

 

 

 

896,625

 

 

 

 

 

 

 

 

 

Notes payable and other borrowings (c)

 

Level 3

 

 

274,677

 

 

 

274,677

 

 

 

 

 

 

 

 

 

 

At December 31, 2014 and 2013, the carrying value of cash and cash equivalents approximated fair value.

·

The estimated fair value of our receivables was based on the discounted value of the expected future cash flows using current rates for similar receivables. The book value of our receivables equaled the fair value as of December 31, 2014 due to the short-term nature of the remaining receivables.

·

The estimated fair value of our Senior Notes at December 31, 2014 is based on quoted market prices.

·

We believe that the carrying value of our notes payable and other borrowings approximates fair value.

The following table presents impairment charges and the remaining net fair value for nonfinancial assets that were measured during the periods presented (in thousands):

 

 

 

 

 

Year Ended

 

 

Year Ended

 

 

 

 

 

December 31, 2014

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

 

Fair Value

 

 

 

 

 

Impairment

 

 

Net of

 

 

Impairment

 

 

Net of

 

 

 

Hierarchy

 

Charge

 

 

Impairment

 

 

Charge

 

 

Impairment

 

Real estate inventories

 

Level 3

 

$

931

 

 

$

20,329

 

 

$

341,086

 

 

$

21,528

 

 

Commitments and Contingencies (Tables)

Warranty reserves consisted of the following (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Warranty reserves, beginning of period

 

$

24,449

 

 

$

24,485

 

 

$

26,404

 

Warranty reserves accrued

 

 

11,659

 

 

 

8,102

 

 

 

5,423

 

Liabilities assumed in the Merger

 

 

7,481

 

 

 

 

 

 

 

Adjustments to pre-existing reserves

 

 

199

 

 

 

1,933

 

 

 

2,650

 

Warranty expenditures

 

 

(10,518

)

 

 

(10,071

)

 

 

(9,992

)

Warranty reserves, end of period

 

$

33,270

 

 

$

24,449

 

 

$

24,485

 

 

 

2015

 

$

624

 

2016

 

 

711

 

2017

 

 

535

 

2018

 

 

 

2019

 

 

 

Thereafter

 

 

 

 

 

$

1,870

 

 

 

 

2015

 

$

7,255

 

2016

 

 

7,094

 

2017

 

 

5,985

 

2018

 

 

4,075

 

2019

 

 

3,870

 

Thereafter

 

 

8,400

 

 

 

$

36,679

 

 

 

2015

 

$

2,224

 

2016

 

 

2,224

 

2017

 

 

2,224

 

2018

 

 

2,224

 

2019

 

 

2,224

 

Thereafter

 

 

79,148

 

 

 

$

90,268

 

 

Stock-Based Compensation (Tables)

The following table presents compensation expense recognized related to all stock-based awards (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Total stock-based compensation

 

$

7,679

 

 

$

5,002

 

 

$

3,854

 

 

The following table presents a summary of stock option awards for the year ended December 31, 2014:

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

Weighted

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

 

Aggregate

 

 

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

Intrinsic

 

 

 

 

 

 

 

 

 

Price

 

 

Contractual

 

 

Value

 

 

 

 

 

Options

 

 

Per Share

 

 

Life

 

 

(in 000's)

 

Options outstanding at December 31, 2013 (1)

 

 

 

 

285,900

 

 

$

17.04

 

 

 

9.1

 

 

$

827

 

Granted

 

 

 

 

154,598

 

 

 

16.17

 

 

 

9.3

 

 

 

 

Assumed in the Merger

 

 

 

 

3,379,275

 

 

 

12.62

 

 

 

5.9

 

 

 

8,885

 

Exercised

 

 

 

 

(15,229

)

 

 

11.34

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

 

(481,995

)

 

 

13.24

 

 

 

 

 

 

 

 

 

Options outstanding at December 31, 2014

 

 

 

 

3,322,549

 

 

 

13.08

 

 

 

6.0

 

 

 

7,841

 

Options exercisable at December 31, 2014

 

 

 

 

1,813,003

 

 

 

12.27

 

 

 

4.0

 

 

 

5,573

 

(1)

Options outstanding at December 31, 2013 reflect outstanding options for the legal acquirer, TRI Pointe.

The fair value of stock option awards assumed in the Merger was determined by using an option-based model with the following assumptions:

 

 

 

2014 Grants

 

 

2013 Grants

 

 

2012 Grants

 

 

2011 Grants

 

Dividend yield

 

 

2.92

%

 

 

2.23

%

 

 

2.94

%

 

 

2.48

%

Expected volatility

 

 

31.71

%

 

 

38.00

%

 

 

40.41

%

 

 

38.56

%

Risk-free interest rate

 

 

1.57

%

 

 

0.92

%

 

 

1.01

%

 

 

2.65

%

Expected life (in years)

 

 

4.97

 

 

 

4.97

 

 

 

5.33

 

 

 

5.73

 

 

The following table presents a summary of restricted stock units (“RSUs”) for the year ended December 31, 2014:

 

 

 

 

 

2014

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Aggregate

 

 

 

 

 

Restricted

 

 

Grant Date

 

 

Intrinsic

 

 

 

 

 

Stock

 

 

Fair Value

 

 

Value

 

 

 

 

 

Units

 

 

Per Share

 

 

(in 000's)

 

Nonvested RSUs at December 31, 2013(1)

 

 

 

 

145,517

 

 

$

17.68

 

 

$

2,900

 

Granted

 

 

 

 

274,287

 

 

 

15.33

 

 

 

4,183

 

Assumed in the Merger

 

 

 

 

726,678

 

 

 

15.74

 

 

 

11,082

 

Vested

 

 

 

 

(59,326

)

 

 

15.85

 

 

 

 

 

Forfeited

 

 

 

 

(204,447

)

 

 

15.74

 

 

 

 

 

Nonvested RSUs at December 31, 2014

 

 

 

 

882,709

 

 

 

15.62

 

 

 

13,461

 

(1)

Nonvested RSUs at December 31, 2013 reflect nonvested RSUs for the legal acquirer, TRI Pointe.

Income Taxes (Tables)

The provision (benefit) for income tax attributable to income (loss) from continuing operations before income taxes consisted of (in thousands):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(109,565

)

 

$

21,773

 

 

$

1,457

 

State

 

 

5,339

 

 

 

1,646

 

 

 

122

 

Total current taxes

 

 

(104,226

)

 

 

23,419

 

 

 

1,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

147,797

 

 

 

(107,651

)

 

 

33,446

 

State

 

 

196

 

 

 

(1,929

)

 

 

3,885

 

Total deferred taxes

 

 

147,993

 

 

 

(109,580

)

 

 

37,331

 

Total income tax expense (benefit)

 

$

43,767

 

 

$

(86,161

)

 

$

38,910

 

 

The Company’s provision (benefit) for income taxes was different from the amount computed by applying the statutory federal income tax rate of 35% to the underlying income before income taxes as a result of the following (in thousands):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Taxes at the U.S. federal statutory rate

 

$

44,788

 

 

$

(83,109

)

 

$

34,870

 

State income taxes, net of federal tax impact

 

 

3,822

 

 

 

(859

)

 

 

3,964

 

Tax loss on the sale of WRI

 

 

(5,786

)

 

 

 

 

 

 

Non deductible transaction costs

 

 

2,594

 

 

 

 

 

 

 

Other, net

 

 

(1,651

)

 

 

(2,193

)

 

 

76

 

Total income tax expense (benefit)

 

$

43,767

 

 

$

(86,161

)

 

$

38,910

 

Effective income tax rate

 

 

34.2

%

 

 

36.3

%

 

 

39.1

%

 

Deferred taxes consisted of the following at December 31, 2014 and 2013 (in thousands):

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

2014

 

 

2013

 

Deferred tax assets:

 

 

 

 

 

 

 

 

 

 

Impairment and other valuation reserves

 

 

 

$

110,816

 

 

$

230,430

 

Incentive compensation

 

 

 

 

2,646

 

 

 

15,892

 

Indirect costs capitalized

 

 

 

 

27,202

 

 

 

17,068

 

Net operating loss carryforwards (state)

 

 

 

 

29,975

 

 

 

34,000

 

Transaction costs

 

 

 

 

2,610

 

 

 

 

State taxes

 

 

 

 

1,368

 

 

 

 

Other costs and expenses

 

 

 

 

17,230

 

 

 

21,970

 

Gross deferred tax assets

 

 

 

 

191,847

 

 

 

319,360

 

Valuation allowance

 

 

 

 

(6,233

)

 

 

(8,300

)

Deferred tax assets, net of valuation allowance

 

 

 

 

185,614

 

 

 

311,060

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

 

 

 

(2,590

)

 

 

(3,040

)

Basis difference in inventory

 

 

 

 

(14,029

)

 

 

(14,007

)

Fixed assets

 

 

 

 

(555

)

 

 

 

Intangibles

 

 

 

 

(8,944

)

 

 

(2,463

)

Other

 

 

 

 

(1,675

)

 

 

(2,567

)

Deferred tax liabilities

 

 

 

 

(27,793

)

 

 

(22,077

)

Net deferred tax assets

 

 

 

$

157,821

 

 

$

288,983

 

 

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands):

 

 

 

 

 

Year Ended

 

 

 

 

 

December 31,

 

 

 

 

 

2014

 

 

2013

 

Balance at beginning of year

 

 

 

 

 

 

 

 

 

 

Increase due to Merger

 

 

 

$

16,716

 

 

$

 

Increases (Decreases) related to current year tax positions

 

 

 

 

(1,859

)

 

 

 

Balance at end of year

 

 

 

$

14,857

 

 

$

 

 

If we were to calculate income taxes using the separate return method, the effect on pro forma unaudited income from continuing operations and pro forma unaudited earnings per share would be as follows (in thousands, except per share amounts):

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Income (loss) from continuing operations before taxes

 

 

 

 

 

 

 

 

 

 

 

 

as reported in the accompanying financial statements

 

$

127,964

 

 

$

(237,454

)

 

$

99,629

 

(Provision) benefit for income taxes assuming computation

 

 

 

 

 

 

 

 

 

 

 

 

on a separate return basis

 

 

(49,553

)

 

 

86,161

 

 

 

(38,910

)

Pro forma income (loss) from continuing operations

 

$

78,411

 

 

$

(151,293

)

 

$

60,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro forma earnings per share - basic

 

$

0.54

 

 

$

(1.17

)

 

$

0.47

 

Pro forma earnings per share - diluted

 

$

0.54

 

 

$

(1.17

)

 

$

0.47

 

 

Related Party Transactions (Tables)
Schedule of Allocated Corporate General and Administrative Expenses

Weyerhaeuser-allocated corporate general and administrative expenses were as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

 

2014

 

 

 

2013

 

 

 

2012

 

Weyerhaeuser-allocated costs

 

$

10,735

 

 

$

22,884

 

 

$

20,547

 

 

Discontinued Operations (Tables)
Schedule of Earnings Discontinued Operations

Earnings of discontinued operations is as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2014

 

 

2013

 

 

2012

 

Earnings before income taxes

 

$

 

 

$

602

 

 

$

487

 

Gain on sale of discontinued operations

 

 

 

 

 

1,946

 

 

 

-

 

(Provision) benefit for income taxes

 

 

 

 

 

(710

)

 

 

275

 

Discontinued operations, net of income taxes

 

$

 

 

$

1,838

 

 

$

762

 

 

Supplemental Disclosure to Consolidated Statements of Cash Flow (Tables)
Supplemental Disclosure to Consolidated Statements of Cash Flows

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

 

Year Ended December 31,

 

 

2014

 

 

2013

 

 

2012

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

Cash paid (received) during the period for:

 

 

 

 

 

 

 

 

 

 

 

Interest

$

42,969

 

 

$

18,811

 

 

$

26,763

 

Income taxes

$

43,005

 

 

$

(10,521

)

 

$

(20,744

)

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of noncash activities:

 

 

 

 

 

 

 

 

 

 

 

Increase in real estate inventory due to distribution of land from an

 

 

 

 

 

 

 

 

 

 

 

unconsolidated joint venture

$

5,052

 

 

$

 

 

$

 

Distribution to Weyerhaeuser of excluded assets and liabilities

$

126,687

 

 

$

 

 

$

 

Amounts owed to Weyerhaeuser related to the tax sharing agreement

$

15,688

 

 

$

 

 

$

 

Noncash settlement of debt payable to Weyerhaeuser

$

70,082

 

 

$

 

 

$

 

Amortization of senior note discount

$

804

 

 

$

 

 

$

 

Effect of net consolidation and de-consolidation of variable interest entities:

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in consolidated real estate inventory not owned

$

6,343

 

 

$

(7,411

)

 

$

39,057

 

Increase (decrease) in deposits on real estate under option or

 

 

 

 

 

 

 

 

 

 

 

contract and other assets

$

780

 

 

$

3,005

 

 

$

(4,511

)

Increase in debt held by variable interest entities

$

 

 

$

 

 

$

7,293

 

(Increase) decrease in noncontrolling interests

$

(7,123

)

 

$

4,406

 

 

$

(41,839

)

 

 

 

 

 

 

 

 

 

 

 

 

Merger:

 

 

 

 

 

 

 

 

 

 

 

Fair value of assets, excluding cash acquired

$

724,995

 

 

$

 

 

$

 

Liabilities assumed

$

276,347

 

 

$

 

 

$

 

 

Results of Quarterly Operations (Tables)
Schedule of Quarterly Results of Operations

Our quarterly results of operations for these periods are not necessarily indicative of future results of operations (in thousands, except per share amounts):

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

 

2014

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

Total revenues

 

$

248,132

 

 

$

342,563

 

 

$

477,920

 

 

$

635,001

 

Cost of homes sales and other

 

 

195,595

 

 

 

267,937

 

 

 

387,721

 

 

 

506,101

 

Impairments and lot option abandonments

 

 

468

 

 

 

104

 

 

 

552

 

 

 

1,391

 

Gross margin

 

$

52,069

 

 

$

74,522

 

 

$

89,647

 

 

$

127,509

 

Income (loss) from continuing operations

 

$

7,581

 

 

$

24,225

 

 

$

10,965

 

 

$

41,426

 

Discontinued operations, net of income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,581

 

 

$

24,225

 

 

$

10,965

 

 

$

41,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share

 

$

0.06

 

 

$

0.19

 

 

$

0.07

 

 

$

0.26

 

 

 

 

First

 

 

Second

 

 

Third

 

 

Fourth

 

2013

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

Total revenues

 

$

195,516

 

 

$

267,837

 

 

$

323,866

 

 

$

487,493

 

Cost of homes sales and other

 

 

159,567

 

 

 

211,135

 

 

 

247,119

 

 

 

371,646

 

Impairments and lot option abandonments

 

 

493

 

 

 

203

 

 

 

549

 

 

 

344,203

 

Gross margin

 

$

35,456

 

 

$

56,499

 

 

$

76,198

 

 

$

(228,356

)

Income (loss) from continuing operations

 

$

(55

)

 

$

8,441

 

 

$

19,941

 

 

$

(179,620

)

Discontinued operations, net of income taxes

 

 

189

 

 

 

(23

)

 

 

218

 

 

 

1,454

 

Net income

 

$

134

 

 

$

8,418

 

 

$

20,159

 

 

$

(178,166

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.38

)

Discontinued operations

 

 

 

 

 

 

 

 

0.01

 

 

 

0.01

 

Net earnings (loss) per share

 

$

 

 

$

0.06

 

 

$

0.16

 

 

$

(1.37

)

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.38

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Net earnings (loss) per share

 

$

 

 

$

0.06

 

 

$

0.15

 

 

$

(1.37

)

 

Organization and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
12 Months Ended 0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Jul. 7, 2014
Common Stock [Member]
Dec. 31, 2014
Common Stock [Member]
Dec. 31, 2013
Common Stock [Member]
Dec. 31, 2012
Common Stock [Member]
Dec. 31, 2011
Common Stock [Member]
Dec. 31, 2014
WRECO Transaction [Member]
Dec. 31, 2013
WRECO Transaction [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
Impairment charges
$ 931,000 
$ 341,086,000 
$ 735,000 
 
 
 
 
 
 
 
Gross unrecognized tax benefits
14,857,000 
 
 
 
 
 
 
 
 
 
Goodwill recorded
$ 139,304,000 
 
 
 
 
 
 
 
$ 139,304,000 
 
Common stock, shares issued
161,355,490 
129,700,000 
 
 
 
 
 
 
 
100,000,000 
Common stock, shares outstanding
161,355,490 
129,700,000 
 
 
161,355,490 
129,700,000 
129,700,000 
129,700,000 
31,632,533 
100,000,000 
Conversion of shares, issued and outstanding
 
 
 
1.297 
 
 
 
 
 
 
Merger with Weyerhaeuser Real Estate Company - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended
Jun. 13, 2014
Deposit
Dec. 31, 2014
Dec. 31, 2013
Business Acquisition [Line Items]
 
 
 
Common stock, shares issued
 
161,355,490 
129,700,000 
Amount of adjustment based on transaction agreement
 
$ 31,500,000 
 
Net proceeds offering
861,300,000 
886,698,000 
 
Number of escrow accounts
 
 
Transaction agreement date
 
Nov. 03, 2013 
 
Transaction costs directly related to Merger
 
17,960,000 
 
Trade names [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Acquisition related to trade names
 
17,300,000 
 
4.375% Senior notes due 2019 [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Aggregate principal amount
 
450,000,000 
 
Interest rate on senior note
 
4.375% 
4.375% 
Debt instrument, maturity year
 
2019 
 
5.875% Senior notes due 2024 [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Aggregate principal amount
 
450,000,000 
 
Interest rate on senior note
 
5.875% 
5.875% 
Debt instrument, maturity year
 
2024 
 
WRECO Transaction [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Common stock, shares issued
 
 
100,000,000 
Cash payment to former direct parent
743,700,000 
 
 
WRECO Transaction [Member] |
Transaction Agreement [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Cash payment to former direct parent
739,000,000 
 
 
WRECO Transaction [Member] |
Unpaid Interest [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Cash payment to former direct parent
4,700,000 
 
 
TRI Pointe [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Common stock, shares issued
 
129,700,000 
 
Percentage of common stock outstanding
 
79.60% 
 
Percentage of common stock owned after the Merger by TRI Pointe shareholders of record prior to the Merger
 
19.40% 
 
Cash retained by the Company
 
$ 117,600,000 
 
TRI Pointe [Member] |
WRECO Transaction [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Outstanding equity awards of the employee in percentage
 
1.00% 
 
Merger with Weyerhaeuser Real Estate Company - Summary of Calculation of Fair Value of Total Consideration Transferred and Provisional Amounts Recognized (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Calculation of consideration transferred
 
 
TRI Pointe shares outstanding
161,355,490 
129,700,000 
Assets acquired and liabilities assumed
 
 
Goodwill
$ 139,304 
 
WRECO Transaction [Member]
 
 
Calculation of consideration transferred
 
 
TRI Pointe shares outstanding
31,632,533 
100,000,000 
TRI Pointe closing stock price on July 7, 2014
$ 15.85 
 
Consideration attributable to common stock
501,376 
 
Consideration attributable to TRI Pointe equity awards
1,072 
 
Total consideration transferred
502,448 
 
Assets acquired and liabilities assumed
 
 
Cash and cash equivalents
53,800 
 
Accounts receivable
654 
 
Real estate inventories
539,677 
 
Intangible asset
17,300 
 
Goodwill
139,304 
 
Other assets
28,060 
 
Total assets acquired
778,795 
 
Accounts payable
26,105 
 
Accrued expenses and other liabilities
23,114 
 
Notes payable and other borrowings
227,128 
 
Total liabilities assumed
276,347 
 
Total net assets acquired
$ 502,448 
 
Merger with Weyerhaeuser Real Estate Company - Summary of Pro Forma Operating Results (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Business Combinations [Abstract]
 
 
Total revenues
$ 1,865,723 
$ 1,532,667 
Net income (loss)
$ 88,416 
$ 91,028 
Earnings per share - basic
$ 0.55 
$ 0.56 
Earnings per share - diluted
$ 0.55 
$ 0.56 
Restructuring Charges - Schedule of Restructuring Costs (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Restructuring And Related Activities [Abstract]
 
 
 
Employee-related costs
$ 9,211 
$ 5,736 
$ 573 
Lease termination costs
1,332 
5,202 
1,887 
Total
$ 10,543 
$ 10,938 
$ 2,460 
Restructuring Charges - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Restructuring Cost And Reserve [Line Items]
 
 
 
Employee-related costs
$ 9,211,000 
$ 5,736,000 
$ 573,000 
Stock based compensation expense
7,679,000 
5,002,000 
3,854,000 
Lease termination costs
1,332,000 
5,202,000 
1,887,000 
Employee-Related Restructuring Reserves [Member]
 
 
 
Restructuring Cost And Reserve [Line Items]
 
 
 
Employee-related costs
8,300,000 
5,700,000 
573,000 
Stock based compensation expense
947,000 
 
 
Lease termination costs
$ 1,300,000 
$ 5,200,000 
$ 1,900,000 
Segment Information - Additional Information (Detail)
12 Months Ended
Dec. 31, 2014
GeographicalAreas
OperatingLocation
Segment Reporting [Abstract]
 
Number of operating divisions
Number of reportable segments
Segment Information - Summary of Financial Information Relating to Reportable Segments (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$ 635,001 
$ 477,920 
$ 342,563 
$ 248,132 
$ 487,493 
$ 323,866 
$ 267,837 
$ 195,516 
$ 1,703,616 
$ 1,274,712 
$ 1,070,306 
Real estate inventories
2,280,183 
 
 
 
1,465,526 
 
 
 
2,280,183 
1,465,526 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
127,964 
(237,454)
99,629 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
1,391 
552 
104 
468 
344,203 
549 
203 
493 
2,515 
345,448 
3,591 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
2,913,524 
 
 
 
1,910,464 
 
 
 
2,913,524 
1,910,464 
 
Corporate and Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
332,930 
 
 
 
301,147 
 
 
 
332,930 
301,147 
 
Operating segments [Member] |
Maracay [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
150,689 
145,822 
103,222 
Real estate inventories
153,577 
 
 
 
131,380 
 
 
 
153,577 
131,380 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
10,845 
10,438 
5,347 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
443 
203 
181 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
170,932 
 
 
 
138,552 
 
 
 
170,932 
138,552 
 
Operating segments [Member] |
Pardee [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
525,381 
519,074 
356,489 
Real estate inventories
924,362 
 
 
 
875,618 
 
 
 
924,362 
875,618 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
74,898 
(258,138)
87,691 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
306 
343,661 
133 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
1,000,489 
 
 
 
976,262 
 
 
 
1,000,489 
976,262 
 
Operating segments [Member] |
Quadrant [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
145,377 
127,237 
127,785 
Real estate inventories
153,493 
 
 
 
113,088 
 
 
 
153,493 
113,088 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
9,028 
1,504 
(2,851)
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
1,059 
1,146 
2,575 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
167,796 
 
 
 
125,456 
 
 
 
167,796 
125,456 
 
Operating segments [Member] |
Trendmaker [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
281,270 
260,566 
298,396 
Real estate inventories
176,696 
 
 
 
130,973 
 
 
 
176,696 
130,973 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
31,684 
28,452 
29,472 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
45 
 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
195,829 
 
 
 
134,628 
 
 
 
195,829 
134,628 
 
Operating segments [Member] |
TRI Pointe [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
324,208 
 
 
Real estate inventories
613,666 
 
 
 
 
 
 
 
613,666 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
19,272 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
49 
 
 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
764,001 
 
 
 
 
 
 
 
764,001 
 
 
Operating segments [Member] |
Winchester [Member]
 
 
 
 
 
 
 
 
 
 
 
Real estate inventories
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
276,691 
222,013 
184,414 
Real estate inventories
258,389 
 
 
 
214,467 
 
 
 
258,389 
214,467 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
24,612 
24,561 
18,537 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
 
 
 
Impairments and lot option abandonments
 
 
 
 
 
 
 
 
613 
431 
702 
Total assets
 
 
 
 
 
 
 
 
 
 
 
Total assets
281,547 
 
 
 
234,419 
 
 
 
281,547 
234,419 
 
Corporate [Member]
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes
 
 
 
 
 
 
 
 
$ (42,375)1
$ (44,271)1
$ (38,567)1
Segment Information - Summary of Financial Information Relating to Reportable Segments (Parenthetical) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
 
Merger related transaction costs
$ 17,960 
 
 
Restructuring charges
10,543 
10,938 
2,460 
Corporate [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Merger related transaction costs
17,960 
 
 
Restructuring charges
$ 5,500 
 
 
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations
$ 41,426 
$ 10,965 
$ 24,225 
$ 7,581 
$ (179,620)
$ 19,941 
$ 8,441 
$ (55)
$ 84,197 
$ (151,293)
$ 60,719 
Discontinued operations, net of income taxes
 
 
 
 
1,454 
218 
(23)
189 
 
1,838 
762 
Net income (loss)
$ 41,426 
$ 10,965 
$ 24,225 
$ 7,581 
$ (178,166)
$ 20,159 
$ 8,418 
$ 134 
$ 84,197 
$ (149,455)
$ 61,481 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Basic weighted-average shares outstanding
 
 
 
 
 
 
 
 
145,044,351 
129,700,000 
129,700,000 
Effect of dilutive shares:
 
 
 
 
 
 
 
 
 
 
 
Stock options and unvested restricted stock units
 
 
 
 
 
 
 
 
486,938 
 
 
Diluted weighted-average shares outstanding
 
 
 
 
 
 
 
 
145,531,289 
129,700,000 
129,700,000 
Basic
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.38)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
 
 
 
$ 0.01 
$ 0.01 
 
 
 
$ 0.02 
 
Net earnings per share
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.37)
$ 0.16 
$ 0.06 
 
$ 0.58 
$ (1.15)
$ 0.47 
Diluted
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.38)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
 
 
 
$ 0.01 
 
 
 
 
$ 0.02 
 
Net earnings per share
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.37)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.15)
$ 0.47 
Antidilutive stock options not included in diluted earnings per share
 
 
 
 
 
 
 
 
1,295,280 
 
 
Earnings Per Share - Additional Information (Detail)
0 Months Ended
Jul. 7, 2014
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Business Acquisition [Line Items]
 
 
 
 
 
Common stock, shares issued
 
161,355,490 
129,700,000 
 
 
Common stock, shares outstanding
 
161,355,490 
129,700,000 
 
 
Common Stock [Member]
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
Conversion of shares, issued and outstanding
1.297 
 
 
 
 
Common stock, shares outstanding
 
161,355,490 
129,700,000 
129,700,000 
129,700,000 
WRECO Transaction [Member]
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
Common stock, shares issued
 
 
100,000,000 
 
 
Common stock, shares outstanding
 
31,632,533 
100,000,000 
 
 
Receivables, Net - Components of Receivables, Net (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Receivables [Abstract]
 
 
Accounts receivable, net
$ 9,771 
$ 8,649 
Warranty insurance receivable (Note 15)
10,047 
12,489 
Notes and contracts receivable
300 
39,259 
Total receivables
$ 20,118 
$ 60,397 
Real Estate Inventories - Summary of Real Estate Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Real estate inventories owned:
 
 
Homes completed or under construction
$ 461,712 
$ 308,856 
Land under development
1,391,303 
760,731 
Land held for future development
245,673 
264,120 
Model homes
103,270 
53,351 
Total real estate inventories owned
2,201,958 
1,387,058 
Real estate inventories not owned:
 
 
Land purchase and land option deposits
44,155 
38,788 
Consolidated inventory held by VIEs
34,070 
39,680 
Total real estate inventories not owned
78,225 
78,468 
Total real estate inventories
$ 2,280,183 
$ 1,465,526 
Real Estate Inventories - Summary of Interest Incurred, Capitalized and Expensed (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
 
 
 
Interest incurred
$ 41,706 
$ 22,674 
$ 27,038 
Interest capitalized
(38,975)
(19,081)
(22,059)
Interest expensed
2,731 
3,593 
4,979 
Capitalized interest in beginning inventory
138,233 
155,823 
164,056 
Interest capitalized as a cost of inventory
38,975 
19,081 
22,059 
Interest previously capitalized as a cost of inventory, included in cost of sales
(52,747)
(36,671)
(30,292)
Capitalized interest in ending inventory
$ 124,461 
$ 138,233 
$ 155,823 
Real Estate Inventories - Schedule of Real Estate Inventory Impairments and Land Option Abandonments (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Real Estate [Abstract]
 
 
 
Real estate inventory impairments
$ 931,000 
$ 341,086,000 
$ 735,000 
Land option abandonments and pre-acquisition costs
1,584,000 
4,362,000 
2,856,000 
Real estate inventory impairments and land option abandonments, Total
$ 2,515,000 
$ 345,448,000 
$ 3,591,000 
Real Estate Inventories - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Real Estate Properties [Line Items]
 
 
 
Impairment charges
$ 2,515 
$ 345,448 
$ 3,591 
WRECO Transaction [Member]
 
 
 
Real Estate Properties [Line Items]
 
 
 
Impairment charges
 
$ 340,300 
 
Investments in Unconsolidated Entities - Additional Information (Detail)
12 Months Ended
Dec. 31, 2014
Investment
Schedule of Equity Method Investments [Line Items]
 
Number of equity investments
Minimum [Member]
 
Schedule of Equity Method Investments [Line Items]
 
Ownership percentage
7.00% 
Maximum [Member]
 
Schedule of Equity Method Investments [Line Items]
 
Ownership percentage
55.00% 
Investments in Unconsolidated Entities - Schedule of Cumulative Investment in Entities on Equity Method, Including Share of Earnings and Losses (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Schedule of Investments [Line Items]
 
 
Investments in unconsolidated entities
$ 16,805 
$ 20,923 
Limited Partnerships and Limited Liability Company Interests [Member]
 
 
Schedule of Investments [Line Items]
 
 
Investments in unconsolidated entities
13,710 
18,454 
General Partnership Interests [Member]
 
 
Schedule of Investments [Line Items]
 
 
Investments in unconsolidated entities
$ 3,095 
$ 2,469 
Investments in Unconsolidated Entities - Aggregated Assets, Liabilities and Operating Results of Entities as Equity-Method Investments (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Assets
 
 
 
Total assets
$ 122,824 
$ 274,942 
 
Liabilities and equity
 
 
 
Accounts payable and other liabilities
10,914 
76,248 
 
Company's equity
16,805 
20,923 
 
Outside interests' equity
95,105 
177,771 
 
Total liabilities and equity
122,824 
274,942 
 
Net sales
606 
6,271 
15,855 
Other operating income (expense)
(4,290)
(7,521)
(12,244)
Other income (expense)
(2)
(18)
(220)
Net income (loss)
(3,686)
(1,268)
3,391 
Company's equity in (loss) income of unconsolidated entities
(288)
2,490 
Cash [Member]
 
 
 
Assets
 
 
 
Total assets
17,154 
10,459 
 
Receivables [Member]
 
 
 
Assets
 
 
 
Total assets
9,550 
9,443 
 
Real Estate Inventories [Member]
 
 
 
Assets
 
 
 
Total assets
95,500 
254,505 
 
Other Assets [Member]
 
 
 
Assets
 
 
 
Total assets
$ 620 
$ 535 
 
Variable Interest Entities - Summary of Interests in Land Option Agreements (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Variable Interest Entity [Line Items]
 
 
Deposits
$ 52,226 
$ 45,767 
Remaining Purchase Price
457,888 
431,135 
Consolidated Inventory Held by VIEs
34,070 
39,680 
Consolidated VIEs [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Deposits
8,071 
6,979 
Remaining Purchase Price
43,432 
34,724 
Consolidated Inventory Held by VIEs
34,070 
39,680 
Unconsolidated VIEs [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Deposits
13,309 
7,102 
Remaining Purchase Price
129,637 
75,171 
Other land option agreements [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Deposits
30,846 
31,686 
Remaining Purchase Price
$ 284,819 
$ 321,240 
Variable Interest Entities - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Variable Interest Entity [Line Items]
 
 
Deposits
$ 52,226,000 
$ 45,767,000 
Remaining Purchase Price
457,888,000 
431,135,000 
Other land option agreements [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Deposits
30,846,000 
31,686,000 
Remaining Purchase Price
284,819,000 
321,240,000 
Capitalized pre-acquisition costs
5,300,000 
4,800,000 
Other land option agreements [Member] |
Coyote Springs [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Deposits
 
1,000,000 
Remaining Purchase Price
 
$ 105,200,000 
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Assets
Dec. 31, 2013
Schedule Of Intangible Assets And Goodwill [Line Items]
 
 
Goodwill recorded
$ 139,304 
 
Number of intangible assets
 
Remaining useful life of amortizing asset
11 years 2 months 12 days 
12 years 2 months 12 days 
Amortization expense
534 
534 
Maracay [Member]
 
 
Schedule Of Intangible Assets And Goodwill [Line Items]
 
 
Intangible assets useful life
20 years 
 
WRECO Transaction [Member]
 
 
Schedule Of Intangible Assets And Goodwill [Line Items]
 
 
Goodwill recorded
$ 139,304 
 
Goodwill and Other Intangible Assets - Schedule of Goodwill and Other Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Finite Lived Intangible Assets [Line Items]
 
 
Goodwill, Gross Carrying Amount
$ 139,304 
 
Goodwill, Net Carrying Amount
139,304 
 
Gross Carrying Amount
167,283 
10,679 
Accumulated Amortization
(4,720)
(4,185)
Net Carrying Amount
162,563 
6,494 
Finite-Lived Intangible Assets, Net Carrying Amount
5,959 
 
Trade names [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross Carrying Amount
27,979 
10,679 
Accumulated Amortization
(4,720)
(4,185)
Finite-Lived Intangible Assets, Net Carrying Amount
$ 23,259 
$ 6,494 
Goodwill and Other Intangible Assets - Schedule of Expected Amortization of Intangible Asset (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
 
2015
$ 534 
2016
534 
2017
534 
2018
534 
2019
534 
Thereafter
3,289 
Finite-Lived Intangible Assets, Net Carrying Amount
$ 5,959 
Other Assets - Schedule of Other Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
 
 
Prepaid expenses
$ 29,111 
$ 8,590 
Refundable fees and other deposits
15,581 
19,566 
Development rights, held for future use or sale
7,409 
9,090 
Deferred loan costs on Senior Notes
23,686 
 
Operating properties and equipment, net
11,719 
17,386 
Income tax receivable
10,713 
 
Other
7,186 
8,999 
Other assets, total
$ 105,405 
$ 63,631 
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2011
Payables And Accruals [Abstract]
 
 
 
 
Accrued payroll and related costs
$ 24,717 
$ 48,232 
 
 
Warranty reserves (Note 15)
33,270 
24,449 
24,485 
26,404 
Estimated cost for completion
54,437 
53,160 
 
 
Customer deposits
14,229 
13,432 
 
 
Debt (nonrecourse) held by VIEs (Note 9)
9,512 
6,571 
 
 
Income tax liability to Weyerhaeuser (Note 18)
15,659 
16,577 
 
 
Liability for uncertain tax positions (Note 17)
13,797 
 
 
 
Accrued interest on Senior Notes and notes payable
3,059 
 
 
 
Accrued insurance expense
9,180 
 
 
 
Other
32,149 
28,261 
 
 
Accrued expenses and other liabilities
$ 210,009 
$ 190,682 
 
 
Senior Notes and Notes Payable and Other Borrowings - Schedule of Senior Notes (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Debt Instrument [Line Items]
 
Senior notes, net of discount
$ 887,502 
4.375% Senior notes due 2019 [Member]
 
Debt Instrument [Line Items]
 
Senior notes, net of discount
445,501 
5.875% Senior notes due 2024 [Member]
 
Debt Instrument [Line Items]
 
Senior notes, net of discount
$ 442,001 
Senior Notes and Notes Payable and Other Borrowings - Schedule of Senior Notes (Parenthetical) (Detail)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
4.375% Senior notes due 2019 [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate on senior note
4.375% 
4.375% 
Maturity date of senior note
Jun. 15, 2019 
Jun. 15, 2019 
5.875% Senior notes due 2024 [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate on senior note
5.875% 
5.875% 
Maturity date of senior note
Jun. 15, 2024 
Jun. 15, 2024 
Senior Notes and Notes Payable and Other Borrowings - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jun. 13, 2014
Deposit
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2014
Notes payable [Member]
Dec. 31, 2013
Weyerhaeuser [Member]
Dec. 31, 2014
425 million revolving credit facility [Member]
Jun. 30, 2014
425 million revolving credit facility [Member]
Dec. 31, 2014
425 million revolving credit facility [Member]
Minimum [Member]
Dec. 31, 2014
425 million revolving credit facility [Member]
Maximum [Member]
Dec. 31, 2014
TRI Pointe [Member]
Jun. 13, 2014
WRECO Transaction [Member]
Jun. 13, 2014
Transaction Agreement [Member]
WRECO Transaction [Member]
Jun. 13, 2014
Unpaid Interest [Member]
WRECO Transaction [Member]
Dec. 31, 2014
4.375% Senior notes due 2019 [Member]
Dec. 31, 2013
4.375% Senior notes due 2019 [Member]
Dec. 31, 2014
5.875% Senior notes due 2024 [Member]
Dec. 31, 2013
5.875% Senior notes due 2024 [Member]
Dec. 31, 2014
Senior Notes [Member]
Dec. 31, 2014
Seller financed loan [Member]
Dec. 31, 2014
Revolving promissory note [Member]
LIBOR [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes issue price as a percentage of principal amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
98.89% 
 
98.15% 
 
 
 
 
Net proceeds offering after debt issuance costs and discounts
$ 861,300,000 
$ 886,698,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of escrow accounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash payment to be made subject to adjustment
 
 
 
 
 
 
 
 
 
 
 
743,700,000 
739,000,000 
 
 
 
 
 
 
 
 
Cash retained by the Company
 
 
 
 
 
 
 
 
 
 
117,600,000 
 
 
4,700,000 
 
 
 
 
 
 
 
Transaction agreement date
 
Nov. 03, 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal payment on Senior Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalization of deferred finance costs
 
23,686,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,700,000 
 
 
Accrued interest
 
3,059,000 
 
 
 
4,300,000 
620,000 
 
 
 
 
 
 
 
 
 
 
 
1,900,000 
517,000 
 
Maturity date of senior note
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jun. 15, 2019 
Jun. 15, 2019 
Jun. 15, 2024 
Jun. 15, 2024 
 
 
 
Unsecured revolving credit facility
 
 
 
 
 
 
 
425,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maturity date
 
 
 
 
 
 
Jul. 01, 2018 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding balance
 
260,000,000 
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument variable interest rate
 
 
 
 
 
 
 
 
2.15% 
2.85% 
 
 
 
 
 
 
 
 
 
 
1.70% 
Interest rate on revolving credit facility
 
2.71% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available secured revolving credit facility
 
153,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding letters of credit
 
11,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining unpaid balance due date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016-05 
 
Notes payable and other borrowings
 
274,677,000 
834,589,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14,677,000 
 
Interest rate on seller financed loan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.375% 
4.375% 
5.875% 
5.875% 
 
6.96% 
 
Debt payable
 
 
834,589,000 
 
 
834,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest incurred
 
41,706,000 
22,674,000 
27,038,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest capitalized
 
38,975,000 
19,081,000 
22,059,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of deferred financing costs
 
 
 
 
$ 2,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior Notes and Notes Payable and Other Borrowings - Components of Notes Payable and Other Borrowings (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Notes payable and other borrowings
$ 274,677 
$ 834,589 
Debt payable to Weyerhaeuser
 
834,589 
Unsecured Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes payable and other borrowings
260,000 
 
Seller financed loan [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes payable and other borrowings
$ 14,677 
 
Fair Value Disclosures - Summary of Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis (Detail) (Level 3 [Member], Fair Value, Measurements, Nonrecurring [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Impairment Charge [Member]
 
 
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
 
 
Real estate inventories
$ 931 
$ 341,086 
Fair Value Adjustment to Inventory [Member]
 
 
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
 
 
Real estate inventories
$ 20,329 
$ 21,528 
Fair Value Disclosures - Additional Information (Detail) (USD $)
12 Months Ended 3 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Dec. 31, 2013
WRECO Transaction [Member]
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items]
 
 
 
 
Impairment charge of inventory recognized
$ 2,515,000 
$ 345,448,000 
$ 3,591,000 
$ 340,300,000 
Write off of option deposits and pre-acquisition costs
 
 
 
$ 3,000,000 
Commitments and Contingencies - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Commitment And Contingencies [Line Items]
 
 
 
Outstanding warranty insurance receivables
$ 10,047,000 
$ 12,489,000 
 
Renewal options
5 years 
 
 
Rental expense
4,900,000 
5,100,000 
5,400,000 
Operating lease expiration year
2071 
 
 
Operating leases future commitments
1,870,000 
 
 
Operating leases guaranteed future payments
11,400,000 
 
 
Non-refundable cash deposits pertaining to land option contracts
52,200,000 
 
 
Aggregate purchase price
457,900,000 
 
 
55 year ground lease [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Operating leases, renewal term
10 years 
 
 
45 year ground lease [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Operating leases, renewal term
10 years 
 
 
Sublease through 2041 [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Operating lease expiration year
2041 
 
 
Operating leases future commitments
60,100,000 
 
 
Office Leases [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Lease term
9 years 
 
 
Model Homes
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Rental expense
600,000 
700,000 
900,000 
Lease commitment payable in 2015
205,000 
 
 
Commercial property [Member] |
55 year ground lease [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Number of properties obtained subject to ground leases
 
 
Commercial property [Member] |
45 year ground lease [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Number of properties obtained subject to ground leases
 
 
Minimum [Member] |
Equipment Leases [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Lease term
3 years 
 
 
Minimum [Member] |
Model Homes
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Market lease payment period for fair value and lease
6 months 
 
 
Maximum [Member] |
Equipment Leases [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Lease term
4 years 
 
 
Maximum [Member] |
Model Homes
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Market lease payment period for fair value and lease
3 years 
 
 
Surety bonds [Member]
 
 
 
Commitment And Contingencies [Line Items]
 
 
 
Outstanding surety bonds
$ 355,200,000 
$ 280,600,000 
 
Commitments and Contingencies - Schedule of Warranty Reserves (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
 
Warranty reserves, beginning of period
$ 24,449 
$ 24,485 
$ 26,404 
Warranty reserves accrued
11,659 
8,102 
5,423 
Liabilities assumed in the Merger
7,481 
 
 
Adjustments to pre-existing reserves
199 
1,933 
2,650 
Warranty expenditures
(10,518)
(10,071)
(9,992)
Warranty reserves, end of period
$ 33,270 
$ 24,449 
$ 24,485 
Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Non-Cancelable Operating Lease Agreements (Detail) (USD $)
Dec. 31, 2014
Office Space Buildings And Equipment
 
Commitment And Contingencies [Line Items]
 
2015
$ 7,255,000 
2016
7,094,000 
2017
5,985,000 
2018
4,075,000 
2019
3,870,000 
Thereafter
8,400,000 
Future minimum lease payments under non-cancelable operating lease agreements
36,679,000 
Ground Leases
 
Commitment And Contingencies [Line Items]
 
2015
2,224,000 
2016
2,224,000 
2017
2,224,000 
2018
2,224,000 
2019
2,224,000 
Thereafter
79,148,000 
Future minimum lease payments under non-cancelable operating lease agreements
$ 90,268,000 
Commitments and Contingencies - Schedule of Future Minimum Sublease Income under Non-Cancelable Sublease Agreements (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Commitments And Contingencies Disclosure [Abstract]
 
2015
$ 624 
2016
711 
2017
535 
Future minimum sublease income under non-cancellable sublease agreements
$ 1,870 
Stock-Based Compensation - Additional Information (Detail) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended
Aug. 5, 2014
Jul. 7, 2014
Apr. 7, 2014
Dec. 31, 2014
Dec. 31, 2014
2013 Incentive Plan [Member]
Jul. 16, 2014
WRECO equity incentive plans [Member]
WRECO Transaction [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Common stock
 
 
 
 
11,727,833 
 
Shares available for future grant
 
 
 
 
10,886,069 
 
Number of registered shares
 
 
 
 
 
4,105,953 
Exchange ratio
 
 
 
 
 
2.1107 
Unrecognized stock based compensation related to all stock-based awards
 
 
 
$ 10,900,000 
 
 
Weighted average period, expense to recognize
 
 
 
2 years 2 months 5 days 
 
 
Options, Granted
 
3,379,275 
 
154,598 
 
 
Stock option awards, vesting period
 
4 years 
3 years 
 
 
 
Expiration from the date of grant
 
10 years 
 
 
 
 
Restricted stock units, granted
56,448 
726,678 
217,839 
274,287 
 
 
Incremental expense recognized
 
$ 0 
 
$ 722,000 
 
 
Restricted stock award granted, fair value
$ 13.34 
 
$ 16.17 
$ 15.33 
 
 
Stock-Based Compensation - Summary of Stock Option Awards (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 12 Months Ended
Jul. 7, 2014
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Options, Outstanding, Balance
 
285,900 
 
Options, Granted
3,379,275 
154,598 
 
Options, Exercised
 
(15,229)
 
Options, Forfeited
 
(481,995)
 
Options, Outstanding, Balance
 
3,322,549 
285,900 
Options exercisable at December 31, 2014
 
1,813,003 
 
Weighted Average Exercise Price, Outstanding, Balance
 
$ 17.04 
 
Weighted Average Exercise Price, Granted
 
$ 16.17 
 
Weighted Average Exercise Price, Exercised
 
$ 11.34 
 
Weighted Average Exercise Price, Forfeited
 
$ 13.24 
 
Weighted Average Exercise Price, Outstanding, Balance
 
$ 13.08 
$ 17.04 
Weighted Average Exercise Price, Options exercisable at December 31, 2014
 
$ 12.27 
 
Weighted Average Remaining Contractual Life, Outstanding
 
6 years 
9 years 1 month 6 days 
Weighted Average Remaining Contractual Life, Granted
 
9 years 3 months 18 days 
 
Weighted Average Remaining Contractual Life, Outstanding
 
6 years 
9 years 1 month 6 days 
Weighted Average Remaining Contractual Life, Options exercisable at December 31, 2014
 
4 years 
 
Aggregate Intrinsic Value, Outstanding, Balance
 
$ 827 
 
Aggregate Intrinsic Value, Outstanding, Balance
 
7,841 
827 
Aggregate Intrinsic Value, Outstanding, Options exercisable at December 31, 2014
 
5,573 
 
WRECO Transaction [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Options, Assumed in the Merger
 
3,379,275 
 
Weighted Average Exercise Price, Assumed in the Merger
 
$ 12.62 
 
Weighted Average Remaining Contractual Life, Assumed in the Merger
 
5 years 10 months 24 days 
 
Aggregate Intrinsic Value, Outstanding, Assumed in the Merger
 
$ 8,885 
 
Stock-Based Compensation - Summary of Fair Value of Stock Option Awards (Detail)
12 Months Ended
Dec. 31, 2014
2014 Grants [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Dividend yield
2.92% 
Expected volatility
31.71% 
Risk-free interest rate
1.57% 
Expected life (in years)
4 years 11 months 19 days 
2013 Grants[Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Dividend yield
2.23% 
Expected volatility
38.00% 
Risk-free interest rate
0.92% 
Expected life (in years)
4 years 11 months 19 days 
2012 Grants [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Dividend yield
2.94% 
Expected volatility
40.41% 
Risk-free interest rate
1.01% 
Expected life (in years)
5 years 3 months 29 days 
2011 Grants [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Dividend yield
2.48% 
Expected volatility
38.56% 
Risk-free interest rate
2.65% 
Expected life (in years)
5 years 8 months 23 days 
Stock-Based Compensation - Summary of Restricted Stock Units (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 12 Months Ended
Aug. 5, 2014
Jul. 7, 2014
Apr. 7, 2014
Dec. 31, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
 
 
 
 
Nonvested Restricted Stock Units, Beginning Balance
 
 
 
145,517 
Nonvested Restricted Stock Units, Granted
56,448 
726,678 
217,839 
274,287 
Nonvested Restricted Stock Units, Assumed in the Merger
 
 
 
726,678 
Nonvested Restricted Stock Units, Vested
 
 
 
(59,326)
Nonvested Restricted Stock Units, Forfeited
 
 
 
(204,447)
Nonvested Restricted Stock Units, Ending Balance
 
 
 
882,709 
Weighted Average Grant Date Fair Value, Beginning Balance
 
 
 
$ 17.68 
Weighted Average Grant Date Fair Value, Granted
$ 13.34 
 
$ 16.17 
$ 15.33 
Weighted Average Grant Date Fair Value, Assumed in WRECO Transaction
 
 
 
$ 15.74 
Weighted Average Grant Date Fair Value, Vested
 
 
 
$ 15.85 
Weighted Average Grant Date Fair Value, Forfeited
 
 
 
$ 15.74 
Weighted Average Grant Date Fair Value, Ending Balance
 
 
 
$ 15.62 
Aggregate Intrinsic Value, Beginning Balance
 
 
 
$ 2,900 
Aggregate Intrinsic Value, Granted
 
 
 
4,183 
Aggregate Intrinsic Value, Assumed in the Merger
 
 
 
11,082 
Aggregate Intrinsic Value, Ending Balance
 
 
 
$ 13,461 
Income Taxes - Provision (Benefit) for Income Tax Attributable to Income (Loss) from Continuing Operations before Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Current:
 
 
 
Federal
$ (109,565)
$ 21,773 
$ 1,457 
State
5,339 
1,646 
122 
Total current taxes
(104,226)
23,419 
1,579 
Deferred:
 
 
 
Federal
147,797 
(107,651)
33,446 
State
196 
(1,929)
3,885 
Total deferred taxes
147,993 
(109,580)
37,331 
Total income tax expense (benefit)
$ 43,767 
$ (86,161)
$ 38,910 
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Contingency [Line Items]
 
 
 
Effective tax rate differs from federal statutory rate
35.00% 
 
 
Income Tax Credits and Adjustments
 
 
$ 400,000 
Net deferred tax assets
185,614,000 
311,060,000 
 
Liabilities for uncertain tax positions
13,797,000 
 
 
Valuation allowance related to deferred tax assets
6,233,000 
8,300,000 
 
Unrecognized tax benefit
 
 
Unpaid interest amount
48,000 
 
 
Income tax provision that would have increased if computed on separate return basis
5,800,000 
 
 
Change in income tax provision
 
State and Local Jurisdiction
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net operating loss carryforward
679,400,000 
 
 
Valuation allowance related to deferred tax assets
5,950,000 
8,300,000 
 
State and Local Jurisdiction |
Minimum [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net operating loss carryforward, expire date
Dec. 31, 2015 
 
 
State and Local Jurisdiction |
Maximum [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net operating loss carryforward, expire date
Dec. 31, 2034 
 
 
WRECO Transaction [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Net deferred tax assets
16,800,000 
 
 
Liabilities for uncertain tax positions
$ 15,500,000 
 
 
Income Taxes - Effective Tax Rate Differs from Federal Statutory Rate (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Taxes at the U.S. federal statutory rate
$ 44,788 
$ (83,109)
$ 34,870 
State income taxes, net of federal tax impact
3,822 
(859)
3,964 
Tax loss on the sale of WRI
(5,786)
 
 
Non deductible transaction costs
2,594 
 
 
Other, net
(1,651)
(2,193)
76 
Total income tax expense (benefit)
$ 43,767 
$ (86,161)
$ 38,910 
Effective income tax rate
34.20% 
36.30% 
39.10% 
Income Taxes - Components of Deferred Income Tax Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Deferred tax assets:
 
 
Impairment and other valuation reserves
$ 110,816 
$ 230,430 
Incentive compensation
2,646 
15,892 
Indirect costs capitalized
27,202 
17,068 
Net operating loss carryforwards (state)
29,975 
34,000 
Transaction costs
2,610 
 
State taxes
1,368 
 
Other costs and expenses
17,230 
21,970 
Gross deferred tax assets
191,847 
319,360 
Valuation allowance
(6,233)
(8,300)
Deferred tax assets, net of valuation allowance
185,614 
311,060 
Deferred tax liabilities:
 
 
Interest capitalized
(2,590)
(3,040)
Basis difference in inventory
(14,029)
(14,007)
Fixed assets
(555)
 
Intangibles
(8,944)
(2,463)
Other
(1,675)
(2,567)
Deferred tax liabilities
(27,793)
(22,077)
Net deferred tax assets
$ 157,821 
$ 288,983 
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
Increase due to Merger
$ 16,716 
Increases (Decreases) related to current year tax positions
(1,859)
Balance at end of year
$ 14,857 
Income Taxes - Schedule of Pro Forma Income from Continuing Operations and Pro Forma Earnings Per Share (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Income from continuing operations before taxes
$ 127,964 
$ (237,454)
$ 99,629 
(Provision) benefit for income taxes assuming computation on a separate return basis
(49,553)
86,161 
(38,910)
Pro forma income (loss) from continuing operations
$ 78,411 
$ (151,293)
$ 60,719 
Pro forma earnings per share - basic
$ 0.54 
$ (1.17)
$ 0.47 
Pro forma earnings per share - diluted
$ 0.54 
$ (1.17)
$ 0.47 
Related Party Transactions - Schedule of Allocated Corporate General and Administrative Expenses (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Related Party Transaction [Line Items]
 
 
 
General and administrative
$ 82,373 
$ 74,244 
$ 75,583 
Weyerhaeuser [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
General and administrative
$ 10,735 
$ 22,884 
$ 20,547 
Related Party Transactions - Additional Information (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Related Party Transaction [Line Items]
 
 
Payment to acquire land from WRECO
$ 457,900,000 
 
Accounts payable
68,860,000 
59,676,000 
Debt payable
 
834,589,000 
Weyerhaeuser [Member]
 
 
Related Party Transaction [Line Items]
 
 
Payment to acquire land from WRECO
21,200,000 
 
Payment to acquire mineral rights from WRECO
4,800,000 
 
Accounts payable
 
18,900,000 
Accrued liabilities
15,700,000 
16,600,000 
Debt payable
 
$ 834,600,000 
Discontinued Operations - Schedule of Earnings Discontinued Operations (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2013
Dec. 31, 2012
Discontinued Operations And Disposal Groups [Abstract]
 
 
 
 
 
 
Earnings before income taxes
 
 
 
 
$ 602 
$ 487 
Gain on sale of discontinued operations
 
 
 
 
1,946 
 
(Provision) benefit for income taxes
 
 
 
 
(710)
275 
Discontinued operations, net of income taxes
$ 1,454 
$ 218 
$ (23)
$ 189 
$ 1,838 
$ 762 
Discontinued Operations - Additional Information (Detail) (Weyerhaeuser [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 12 Months Ended
Oct. 31, 2013
Dec. 31, 2013
Dec. 31, 2014
Weyerhaeuser [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Date of Acquisition
 
 
Oct. 31, 2013 
Payments to acquire businesses
$ 3.6 
 
 
Net gain on transaction
 
$ 1.9 
 
Supplemental Disclosure to Consolidated Statements of Cash Flow - Supplemental Disclosure to Consolidated Statements of Cash Flows (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Supplemental disclosure of cash flow information:
 
 
 
Interest
$ 42,969 
$ 18,811 
$ 26,763 
Income taxes
43,005 
(10,521)
(20,744)
Supplemental disclosures of noncash activities:
 
 
 
Increase in real estate inventory due to distribution of land from an unconsolidated joint venture
5,052 
 
 
Distribution to Weyerhaeuser of excluded assets and liabilities
126,687 
 
 
Amounts owed to Weyerhaeuser related to the tax sharing agreement
15,688 
 
 
Noncash settlement of debt payable to Weyerhaeuser
70,082 
 
 
Amortization of senior note discount
804 
 
 
Effect of net consolidation and de-consolidation of variable interest entities:
 
 
 
Increase (decrease) in consolidated real estate inventory not owned
6,343 
(7,411)
39,057 
Increase (decrease) in deposits on real estate under option or contract and other assets
780 
3,005 
(4,511)
Increase in debt held by variable interest entities
 
 
7,293 
(Increase) decrease in noncontrolling interests
(7,123)
4,406 
(41,839)
Merger:
 
 
 
Fair value of assets, excluding cash acquired
724,995 
 
 
Liabilities assumed
$ 276,347 
 
 
Results of Quarterly Operations - Schedule of Quarterly Results of Operations (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$ 635,001 
$ 477,920 
$ 342,563 
$ 248,132 
$ 487,493 
$ 323,866 
$ 267,837 
$ 195,516 
$ 1,703,616 
$ 1,274,712 
$ 1,070,306 
Cost of homes sales and other
506,101 
387,721 
267,937 
195,595 
371,646 
247,119 
211,135 
159,567 
 
 
 
Impairments and lot option abandonments
1,391 
552 
104 
468 
344,203 
549 
203 
493 
2,515 
345,448 
3,591 
Gross margin
127,509 
89,647 
74,522 
52,069 
(228,356)
76,198 
56,499 
35,456 
 
 
 
Income (loss) from continuing operations
41,426 
10,965 
24,225 
7,581 
(179,620)
19,941 
8,441 
(55)
84,197 
(151,293)
60,719 
Discontinued operations, net of income taxes
 
 
 
 
1,454 
218 
(23)
189 
 
1,838 
762 
Net income (loss)
$ 41,426 
$ 10,965 
$ 24,225 
$ 7,581 
$ (178,166)
$ 20,159 
$ 8,418 
$ 134 
$ 84,197 
$ (149,455)
$ 61,481 
Basic
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.38)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
 
 
 
$ 0.01 
$ 0.01 
 
 
 
$ 0.02 
 
Net earnings (loss) per share
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.37)
$ 0.16 
$ 0.06 
 
$ 0.58 
$ (1.15)
$ 0.47 
Diluted
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.38)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.17)
$ 0.47 
Discontinued operations
 
 
 
 
$ 0.01 
 
 
 
 
$ 0.02 
 
Net earnings (loss) per share
$ 0.26 
$ 0.07 
$ 0.19 
$ 0.06 
$ (1.37)
$ 0.15 
$ 0.06 
 
$ 0.58 
$ (1.15)
$ 0.47