UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended March 31, 2016
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the transition period from              to             
Commission File Number 1-35796

TRI Pointe Group, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware	 	61-1763235	
(State or other Jurisdiction of
Incorporation or Organization)	 	(I.R.S. Employer
Identification No.)	
19540 Jamboree Road, Suite 300
Irvine, California 92612
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (949) 438-1400
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨	
 	 	 	 	
Non-accelerated filer	¨   (Do not check if a smaller reporting company)	Smaller reporting company	¨	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x
Registrant’s shares of common stock outstanding at April 22, 2016: 162,048,087

 

EXPLANATORY NOTE
As used in this Quarterly Report on Form 10-Q (including the consolidated financial statements and condensed notes thereto in this report), unless the context otherwise requires:
 	·	“Closing Date” refers to July 7, 2014;	
 	·	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;	
 	·	“GAAP” refers to U.S. generally accepted accounting principles;	
 	·	“Merger” refers to the merger of a wholly owned subsidiary of TRI Pointe with and into WRECO, with WRECO surviving the merger and becoming a wholly owned subsidiary of TRI Pointe;	
 	·	“SEC” refers to the United States Securities and Exchange Commission;	
 	·	“Securities Act” refers to the Securities Act of 1933, as amended;	
 	·	“Transaction Agreement” refers to the agreement dated as of November 3, 2013 by and among Weyerhaeuser, TRI Pointe, WRECO, and a wholly owned subsidiary of TRI Pointe;	
 	·	“TRI Pointe Homes” refers to TRI Pointe Homes, Inc., a Delaware corporation;	
 	·	“TRI Pointe Group” refers to TRI Pointe Group, Inc., a Delaware corporation;	
 	·	“Weyerhaeuser” refers to Weyerhaeuser Company, a Washington corporation and the former parent of WRECO; and	
 	·	“WRECO” refers to Weyerhaeuser Real Estate Company, a Washington corporation, which following the Closing Date was renamed “TRI Pointe Holdings, Inc.”	
Additionally, references to “TRI Pointe”, “the Company”, “we”, “us” or “our” in this Quarterly Report on Form 10-Q (including the consolidated financial statements and condensed notes thereto in this report) have the following meanings, unless the context otherwise requires:
 	·	For periods prior to July 7, 2015: TRI Pointe Homes and its subsidiaries; and	
 	·	For periods from and after July 7, 2015: TRI Pointe Group and its subsidiaries.	

 

TRI POINTE GROUP, INC.
FORM 10-Q
INDEX
March 31, 2016
 
 	 	Page
Number	
PART I.  FINANCIAL INFORMATION	
 	 	 	
Item 1.	Financial Statements for TRI Pointe Group, Inc.	3	
 	 	 	
 	Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015	3	
 	 	 	
 	Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2016 and 2015	4	
 	 	 	
 	Consolidated Statements of Equity for the Year Ended December 31, 2015 and the Three Months Ended March 31, 2016 (unaudited)	5	
 	 	 	
 	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (unaudited)	6	
 	 	 	
 	Condensed Notes to Consolidated Financial Statements (unaudited)	7	
 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29	
 	 	 	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45	
 	 	 	
Item 4.	Controls and Procedures	45	
 	
Part II.  OTHER INFORMATION	
 	 	 	
Item 1.	Legal Proceedings	46	
 	 	 	
Item 1A.	Risk Factors	46	
 	 	 	
Item2.	Unregistered Sales of Equity Securities and Use of Proceeds	46	
 	 	 	
Item 6.	Exhibits	47	
 	 	 	
SIGNATURES	49	

 
 
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PART I. FINANCI AL INFORMATION
Item 1.	 Financial Statements	
TRI POINTE GROUP, INC.
 CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Assets	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	144,019	 	 	$	214,485	 	
Receivables	 	 	32,688	 	 	 	43,710	 	
Real estate inventories	 	 	2,705,251	 	 	 	2,519,273	 	
Investments in unconsolidated entities	 	 	17,494	 	 	 	18,999	 	
Goodwill and other intangible assets, net	 	 	161,895	 	 	 	162,029	 	
Deferred tax assets, net	 	 	126,812	 	 	 	130,657	 	
Other assets	 	 	45,918	 	 	 	48,918	 	
Total assets	 	$	3,234,077	 	 	$	3,138,071	 	
Liabilities	 	 	 	 	 	 	 	 	
Accounts payable	 	$	67,601	 	 	$	64,840	 	
Accrued expenses and other liabilities	 	 	201,302	 	 	 	216,263	 	
Unsecured revolving credit facility	 	 	374,392	 	 	 	299,392	 	
Seller financed loans	 	 	—	 	 	 	2,434	 	
Senior notes, net	 	 	869,939	 	 	 	868,679	 	
Total liabilities	 	 	1,513,234	 	 	 	1,451,608	 	
 	 	 	 	 	 	 	 	 	
Commitments and contingencies (Note 14)	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	
Stockholders’ Equity:	 	 	 	 	 	 	 	 	
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares
   issued and outstanding as of March 31, 2016 and December 31, 2015,
   respectively	 	 	—	 	 	 	—	 	
Common stock, $0.01 par value, 500,000,000 shares authorized;
   162,007,850 and 161,813,750 shares issued and outstanding at
   March 31, 2016 and December 31, 2015, respectively	 	 	1,620	 	 	 	1,618	 	
Additional paid-in capital	 	 	912,719	 	 	 	911,197	 	
Retained earnings	 	 	780,418	 	 	 	751,868	 	
Total stockholders’ equity	 	 	1,694,757	 	 	 	1,664,683	 	
Noncontrolling interests	 	 	26,086	 	 	 	21,780	 	
Total equity	 	 	1,720,843	 	 	 	1,686,463	 	
Total liabilities and equity	 	$	3,234,077	 	 	$	3,138,071	 	
 
See accompanying condensed notes to the unaudited consolidated financial statements.

 
 
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TRI POINTE GROUP, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Homebuilding:	 	 	 	 	 	 	 	 	
Home sales revenue	 	$	423,055	 	 	$	374,265	 	
Land and lot sales revenue	 	 	355	 	 	 	2,000	 	
Other operations	 	 	580	 	 	 	993	 	
Total revenues	 	 	423,990	 	 	 	377,258	 	
Cost of home sales	 	 	324,499	 	 	 	299,907	 	
Cost of land and lot sales	 	 	779	 	 	 	2,308	 	
Other operations	 	 	566	 	 	 	562	 	
Sales and marketing	 	 	26,321	 	 	 	23,286	 	
General and administrative	 	 	28,396	 	 	 	28,153	 	
Restructuring charges	 	 	135	 	 	 	222	 	
Homebuilding income from operations	 	 	43,294	 	 	 	22,820	 	
Equity in (loss) income of unconsolidated entities	 	 	(14	)	 	 	107	 	
Other income, net	 	 	115	 	 	 	256	 	
Homebuilding income before taxes	 	 	43,395	 	 	 	23,183	 	
Financial Services:	 	 	 	 	 	 	 	 	
Revenues	 	 	148	 	 	 	—	 	
Expenses	 	 	58	 	 	 	26	 	
Equity in income (loss) of unconsolidated entities	 	 	715	 	 	 	(33	)	
Financial services income (loss) from operations before taxes	 	 	805	 	 	 	(59	)	
Income before taxes	 	 	44,200	 	 	 	23,124	 	
Provision for income taxes	 	 	(15,490	)	 	 	(7,827	)	
Net income	 	 	28,710	 	 	 	15,297	 	
Net income attributable to noncontrolling interests	 	 	(160	)	 	 	—	 	
Net income available to common stockholders	 	$	28,550	 	 	$	15,297	 	
Earnings per share	 	 	 	 	 	 	 	 	
Basic	 	$	0.18	 	 	$	0.09	 	
Diluted	 	$	0.18	 	 	$	0.09	 	
Weighted average shares outstanding	 	 	 	 	 	 	 	 	
Basic	 	 	161,895,640	 	 	 	161,490,970	 	
Diluted	 	 	162,192,610	 	 	 	162,807,376	 	
 
See accompanying condensed notes to the unaudited consolidated financial statements.

 
 
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TRI POINTE GROUP, INC.
 CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(in thousands, except share amounts)
 
 	 	Number of	 	 	 	 	 	 	Additional	 	 	 	 	 	 	Total	 	 	 	 	 	 	 	 	 	
 	 	Shares   of Common	 	 	Common	 	 	Paid-in	 	 	Retained	 	 	Stockholders'	 	 	Noncontrolling	 	 	Total	 	
 	 	Stock   (Note 1)	 	 	Stock	 	 	Capital	 	 	Earnings	 	 	Equity	 	 	Interests	 	 	Equity	 	
Balance at December 31, 2014	 	 	161,355,490	 	 	$	1,614	 	 	$	906,159	 	 	$	546,407	 	 	$	1,454,180	 	 	$	18,296	 	 	$	1,472,476	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	205,461	 	 	 	205,461	 	 	 	1,720	 	 	 	207,181	 	
Adjustment to capital contribution by
   Weyerhaeuser, net	 	 	—	 	 	 	—	 	 	 	(6,747	)	 	 	—	 	 	 	(6,747	)	 	 	—	 	 	 	(6,747	)	
Shares issued under share-based
   awards	 	 	458,260	 	 	 	4	 	 	 	1,612	 	 	 	—	 	 	 	1,616	 	 	 	—	 	 	 	1,616	 	
Excess tax benefit of share-based
   awards, net	 	 	—	 	 	 	—	 	 	 	428	 	 	 	—	 	 	 	428	 	 	 	—	 	 	 	428	 	
Minimum tax withholding paid on
   behalf of employees for restricted
   stock units	 	 	—	 	 	 	—	 	 	 	(2,190	)	 	 	—	 	 	 	(2,190	)	 	 	—	 	 	 	(2,190	)	
Stock-based compensation expense	 	 	—	 	 	 	—	 	 	 	11,935	 	 	 	—	 	 	 	11,935	 	 	 	—	 	 	 	11,935	 	
Distributions to noncontrolling
   interests, net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3,833	)	 	 	(3,833	)	
Net effect of consolidations,
   de-consolidations and other
   transactions	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,597	 	 	 	5,597	 	
Balance at December 31, 2015	 	 	161,813,750	 	 	 	1,618	 	 	 	911,197	 	 	 	751,868	 	 	 	1,664,683	 	 	 	21,780	 	 	 	1,686,463	 	
Net income	 	 	—	 	 	 	—	 	 	 	—	 	 	 	28,550	 	 	 	28,550	 	 	 	160	 	 	 	28,710	 	
Shares issued under share-based
   awards	 	 	194,100	 	 	 	2	 	 	 	4	 	 	 	—	 	 	 	6	 	 	 	—	 	 	 	6	 	
Minimum tax withholding paid on
   behalf of employees for restricted
   stock units	 	 	—	 	 	 	—	 	 	 	(1,087	)	 	 	—	 	 	 	(1,087	)	 	 	—	 	 	 	(1,087	)	
Stock-based compensation expense	 	 	—	 	 	 	—	 	 	 	2,605	 	 	 	—	 	 	 	2,605	 	 	 	—	 	 	 	2,605	 	
Distributions to noncontrolling
   interests, net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(1,719	)	 	 	(1,719	)	
Net effect of consolidations,
   de-consolidations and other
   transactions	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,865	 	 	 	5,865	 	
Balance at March 31, 2016	 	 	162,007,850	 	 	$	1,620	 	 	$	912,719	 	 	$	780,418	 	 	$	1,694,757	 	 	$	26,086	 	 	$	1,720,843	 	
 
See accompanying condensed notes to the unaudited consolidated financial statements.

 
 
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TRI POINTE GROUP, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	
Net income	 	$	28,710	 	 	$	15,297	 	
Adjustments to reconcile net income to net cash used in operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	1,792	 	 	 	1,481	 	
Equity in income of unconsolidated entities, net	 	 	(701	)	 	 	(74	)	
Deferred income taxes, net	 	 	3,845	 	 	 	2,018	 	
Amortization of stock-based compensation	 	 	2,605	 	 	 	2,381	 	
Charges for impairments and lot option abandonments	 	 	182	 	 	 	360	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
Real estate inventories	 	 	(180,540	)	 	 	(127,304	)	
Receivables	 	 	11,141	 	 	 	(2,894	)	
Other assets	 	 	2,871	 	 	 	6,963	 	
Accounts payable	 	 	2,761	 	 	 	(7,865	)	
Accrued expenses and other liabilities	 	 	(14,828	)	 	 	1,323	 	
Returns on investments in unconsolidated entities, net	 	 	2,486	 	 	 	—	 	
Net cash used in operating activities	 	 	(139,676	)	 	 	(108,314	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(411	)	 	 	(378	)	
Investments in unconsolidated entities	 	 	(13	)	 	 	(978	)	
Net cash used in investing activities	 	 	(424	)	 	 	(1,356	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Borrowings from debt	 	 	75,000	 	 	 	50,000	 	
Repayment of debt	 	 	(2,434	)	 	 	(2,535	)	
Net repayments of debt held by variable interest entities	 	 	(132	)	 	 	(742	)	
Contributions from noncontrolling interests	 	 	808	 	 	 	873	 	
Distributions to noncontrolling interests	 	 	(2,527	)	 	 	(726	)	
Proceeds from issuance of common stock under share-based awards	 	 	6	 	 	 	263	 	
Excess tax benefits of share-based awards	 	 	—	 	 	 	308	 	
Minimum tax withholding paid on behalf of employees for share-based awards	 	 	(1,087	)	 	 	(1,827	)	
Net cash provided by financing activities	 	 	69,634	 	 	 	45,614	 	
Net decrease in cash and cash equivalents	 	 	(70,466	)	 	 	(64,056	)	
Cash and cash equivalents - beginning of period	 	 	214,485	 	 	 	170,629	 	
Cash and cash equivalents - end of period	 	$	144,019	 	 	$	106,573	 	
 
See accompanying condensed notes to the unaudited consolidated financial statements.

 
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TRI POINTE GROUP, INC.
 CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
1.	Organization, Basis of Presentation and Summary of Significant Accounting Policies	
Organization
TRI Pointe Group is engaged in the design, construction and sale of innovative single-family attached and detached 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.
Formation of TRI Pointe Group
On July 7, 2015, TRI Pointe Homes reorganized its corporate structure (the “Reorganization”) whereby TRI Pointe Homes became a direct, wholly owned subsidiary of TRI Pointe Group.  As a result of the Reorganization, each share of common stock, par value $0.01 per share, of TRI Pointe Homes (“Homes Common Stock”) was cancelled and converted automatically into the right to receive one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of TRI Pointe Group (“Group Common Stock”), each share having the same designations, rights, powers and preferences, and the qualifications, limitations and restrictions thereof as the shares of Homes Common Stock being so converted.  TRI Pointe Group, as the successor issuer to TRI Pointe Homes (pursuant to Rule 12g-3(a) under the Exchange Act), began making filings under the Securities Act and the Exchange Act on July 7, 2015.
In connection with the Reorganization, TRI Pointe Group (i) became a co-issuer of TRI Pointe Homes’ 4.375% Senior Notes due 2019 (the “2019 Notes”) and TRI Pointe Homes’ 5.875% Senior Notes due 2024 (the “2024 Notes” and together with the 2019 Notes, the “Senior Notes”); and (ii) replaced TRI Pointe Homes as the borrower under TRI Pointe Homes’ existing unsecured revolving credit facility.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with 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, as well as other entities in which the Company has a controlling interest and variable interest entities (“VIEs”) in which the Company is the primary beneficiary.  The noncontrolling interests as of March 31, 2016 and December 31, 2015 represent the outside owners’ interests in the Company’s consolidated entities and the net equity of the VIE owners.  All significant intercompany accounts have been eliminated upon consolidation.  In the opinion of management, all adjustments consisting of normal recurring adjustments, necessary for a fair presentation with respect to interim financial statements, have been included.
Reverse Acquisition
On the Closing Date, TRI Pointe consummated the Merger with WRECO, with WRECO becoming a wholly owned subsidiary of TRI Pointe. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations . For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer.
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.
Reclassifications
Certain amounts in our consolidated financial statements for prior years have been reclassified to conform to the current period presentation.
 
- 7 -

Recently Issued Accounting Standards
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. On July 9, 2015, the FASB voted to defer the effective date of ASU No. 2014-09 by one year and it is now effective for public entities for the annual periods ending after December 15, 2017, and for annual and interim periods thereafter.  Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09.  Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and the interim periods within those years, beginning after December 15, 2016.  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.
In February 2015, the FASB issued Accounting Standards Update No. 2015-02, (“ASU 2015-02”), Consolidation (Topic 810): Amendments to the Consolidation Analysis.   ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU 2015-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015.  We adopted ASU 2015-02 on January 1, 2016 and the adoption had no impact on our current or prior year financial statements.
In November 2015, the FASB issued Accounting Standards Update No. 2015-17, (“ASU 2015-17”), Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of position.  ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.  The adoption of ASU 2015-17 is not expected to have a material effect on our consolidated financial statements.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, (“ASU 2016-02”), Leases (Topic 842): Leases , which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and, at that time, we will adopt the new standard using a modified retrospective approach. We are currently evaluating the impact that the adoption of ASU 2016-02 may have on our consolidated financial statements and disclosures.
 In March 2016, the FASB issued Accounting Standards Update No. 2016-09, (“ASU 2016-09”), Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. We are currently evaluating the impact that the adoption of ASU 2016-09 may have on our consolidated financial statements and disclosures.

2.	Restructuring	
Restructuring charges were comprised of the following (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Employee-related charges	 	$	13	 	 	$	112	 	
Lease termination charges	 	 	122	 	 	 	110	 	
Total	 	$	135	 	 	$	222	 	

- 8 -

Employee-related charges of $13,000 and $112,000 for the three months ended March 31, 2016 and 2015, respectively, relate to severance-related expenses for employees terminated during the period.  Lease termination charges of $122,000 and $110,000 for the three months ended March 31, 2016, and 2015, res pectively, relate to the adjustment of restructuring reserves related to the estimate of sublease income.
Changes in employee-related restructuring reserves were as follows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Accrued employee-related charges, beginning of period	 	$	220	 	 	$	3,844	 	
Current year charges	 	 	13	 	 	 	112	 	
Payments	 	 	(159	)	 	 	(3,423	)	
Accrued employee-related charges, end of period	 	$	74	 	 	$	533	 	
 
Changes in lease termination related restructuring reserves were as follows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Accrued lease termination charges, beginning of period	 	$	767	 	 	$	1,394	 	
Current year charges	 	 	122	 	 	 	110	 	
Payments	 	 	(312	)	 	 	(578	)	
Accrued lease termination charges, end of period	 	$	577	 	 	$	926	 	
 
Employee and lease termination restructuring reserves are included in accrued expenses and other liabilities on our consolidated balance sheets.

3.	Segment Information	
We operate two principal businesses: homebuilding and financial services.
Our homebuilding operations consist of six homebuilding companies that acquire and develop land and construct and sell single-family detached and attached homes. In accordance with ASC Topic 280, Segment Reporting , in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon the above factors, our homebuilding operations are comprised of the following six reportable segments: Maracay Homes, consisting of operations in Arizona; Pardee Homes, consisting of operations in California and Nevada; Quadrant Homes, consisting of operations in Washington; Trendmaker Homes, consisting of operations in Texas; TRI Pointe Homes, consisting of operations in California and Colorado; and Winchester Homes, consisting of operations in Maryland and Virginia.
Our financial services operation (“TRI Pointe Solutions”) is a reportable segment and is comprised of mortgage financing operations (“TRI Pointe Connect”) and title services operations (“TRI Pointe Assurance”).  While our homebuyers may obtain financing from any mortgage provider of their choice, TRI Pointe Connect, which was formed as a joint venture with an established mortgage lender, can act as a preferred mortgage broker to our homebuyers in all of the markets in which we operate, providing mortgage financing that helps facilitate the sale and closing process as well as generate additional fee income for us.  TRI Pointe Assurance provides title examinations for our homebuyers in our Trendmaker Homes and Winchester Homes brands.  TRI Pointe Assurance is a wholly owned subsidiary of TRI Pointe and acts as a title agency for First American Title Insurance Company.  We commenced our financial services operation in the fourth quarter of 2014.
The term “Corporate” refers to a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit and risk management, information technology and human resources, to benefit from economies of scale. Our Corporate non-operating segment also includes general and administrative expenses related to operating our corporate headquarters. A portion of the expenses incurred by Corporate is allocated to the homebuilding reporting segments.
The reportable segments follow the same accounting policies as our consolidated financial statements described in Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies . Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.

- 9 -

Total revenues and income before taxes for each of our reportable segments were as follows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Revenues	 	 	 	 	 	 	 	 	
Maracay Homes	 	$	45,437	 	 	$	32,477	 	
Pardee Homes	 	 	118,933	 	 	 	85,658	 	
Quadrant Homes	 	 	46,058	 	 	 	45,629	 	
Trendmaker Homes	 	 	43,786	 	 	 	56,208	 	
TRI Pointe Homes	 	 	131,957	 	 	 	106,858	 	
Winchester Homes	 	 	37,819	 	 	 	50,428	 	
Total homebuilding revenues	 	 	423,990	 	 	 	377,258	 	
Financial services	 	 	148	 	 	 	—	 	
Total	 	$	424,138	 	 	$	377,258	 	
 	 	 	 	 	 	 	 	 	
Income (loss) before taxes	 	 	 	 	 	 	 	 	
Maracay Homes	 	$	2,636	 	 	$	1,040	 	
Pardee Homes	 	 	32,131	 	 	 	13,559	 	
Quadrant Homes	 	 	3,696	 	 	 	1,580	 	
Trendmaker Homes	 	 	2,058	 	 	 	4,360	 	
TRI Pointe Homes	 	 	10,715	 	 	 	11,132	 	
Winchester Homes	 	 	661	 	 	 	381	 	
Corporate	 	 	(8,502	)	 	 	(8,869	)	
Total homebuilding income before taxes	 	 	43,395	 	 	 	23,183	 	
Financial services	 	 	805	 	 	 	(59	)	
Total	 	$	44,200	 	 	$	23,124	 	
 
Total real estate inventories and total assets for each of our reportable segments, as of the date indicated, were as follows (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Real estate inventories	 	 	 	 	 	 	 	 	
Maracay Homes	 	$	211,362	 	 	$	206,912	 	
Pardee Homes	 	 	1,066,086	 	 	 	1,011,982	 	
Quadrant Homes	 	 	209,707	 	 	 	190,038	 	
Trendmaker Homes	 	 	214,290	 	 	 	199,398	 	
TRI Pointe Homes	 	 	742,753	 	 	 	659,130	 	
Winchester Homes	 	 	261,053	 	 	 	251,813	 	
Total	 	$	2,705,251	 	 	$	2,519,273	 	
 	 	 	 	 	 	 	 	 	
Total assets	 	 	 	 	 	 	 	 	
Maracay Homes	 	$	241,762	 	 	$	227,857	 	
Pardee Homes	 	 	1,139,330	 	 	 	1,089,586	 	
Quadrant Homes	 	 	231,436	 	 	 	202,024	 	
Trendmaker Homes	 	 	227,791	 	 	 	213,562	 	
TRI Pointe Homes	 	 	907,366	 	 	 	832,423	 	
Winchester Homes	 	 	289,890	 	 	 	278,374	 	
Corporate	 	 	193,688	 	 	 	292,169	 	
Total homebuilding assets	 	 	3,231,263	 	 	 	3,135,995	 	
Financial services	 	 	2,814	 	 	 	2,076	 	
Total	 	$	3,234,077	 	 	$	3,138,071	 	

 
- 10 -

4.	Earnings Per Share	
The following table sets forth the components used in the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Numerator:	 	 	 	 	 	 	 	 	
Net income available to common stockholders	 	$	28,550	 	 	$	15,297	 	
Denominator:	 	 	 	 	 	 	 	 	
Basic weighted-average shares outstanding	 	 	161,895,640	 	 	 	161,490,970	 	
Effect of dilutive shares:	 	 	 	 	 	 	 	 	
Stock options and unvested restricted stock units	 	 	296,970	 	 	 	1,316,406	 	
Diluted weighted-average shares outstanding	 	 	162,192,610	 	 	 	162,807,376	 	
Earnings per share	 	 	 	 	 	 	 	 	
Basic	 	$	0.18	 	 	$	0.09	 	
Diluted	 	$	0.18	 	 	$	0.09	 	
Antidilutive stock options not included in diluted earnings per
   share	 	 	5,449,790	 	 	 	1,266,863	 	

5.	Receivables	
Receivables consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Escrow proceeds and other accounts receivable, net	 	$	22,026	 	 	$	32,917	 	
Warranty insurance receivable (Note 14)	 	 	10,362	 	 	 	10,493	 	
Notes and contracts receivable	 	 	300	 	 	 	300	 	
Total receivables	 	$	32,688	 	 	$	43,710	 	

6.	Real Estate Inventories	
Real estate inventories consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Real estate inventories owned:	 	 	 	 	 	 	 	 	
Homes completed or under construction	 	$	650,602	 	 	$	575,076	 	
Land under development	 	 	1,554,925	 	 	 	1,443,461	 	
Land held for future development	 	 	295,428	 	 	 	295,241	 	
Model homes	 	 	146,078	 	 	 	140,232	 	
Total real estate inventories owned	 	 	2,647,033	 	 	 	2,454,010	 	
Real estate inventories not owned:	 	 	 	 	 	 	 	 	
Land purchase and land option deposits	 	 	24,278	 	 	 	39,055	 	
Consolidated inventory held by VIEs	 	 	33,940	 	 	 	26,208	 	
Total real estate inventories not owned	 	 	58,218	 	 	 	65,263	 	
Total real estate inventories	 	$	2,705,251	 	 	$	2,519,273	 	
 
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 variable interest entities. For further details, see Note 8, Variable Interest Entities .
 
- 11 -

Inte rest incurred, capitalized and expensed were as follows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Interest incurred	 	$	15,149	 	 	$	15,176	 	
Interest capitalized	 	 	(15,149	)	 	 	(15,176	)	
Interest expensed	 	$	—	 	 	$	—	 	
Capitalized interest in beginning inventory	 	$	140,311	 	 	$	124,461	 	
Interest capitalized as a cost of inventory	 	 	15,149	 	 	 	15,176	 	
Interest previously capitalized as a cost of inventory,
   included in cost of sales	 	 	(8,830	)	 	 	(6,765	)	
Capitalized interest in ending inventory	 	$	146,630	 	 	$	132,872	 	
 
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, net.
Real estate inventory impairments and land and lot option abandonments
Land and lot option abandonments and pre-acquisition charges were as follows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Land and lot option abandonments and pre-acquisition charges	 	 	182	 	 	 	360	 	
Total	 	$	182	 	 	$	360	 	
 
Impairments of real estate inventory relate primarily to projects or communities that include homes completed or under construction. Within a project or community, there may be individual homes or parcels of land that are currently held for sale. Impairment charges recognized as a result of adjusting individual held-for-sale assets within a community to estimated fair value less cost to sell are also included in the total impairment charges above.  Charges for inventory impairments are expensed to cost of sales. During the three month periods ended March 31, 2016 and 2015, respectively, the Company did not incur any real estate inventory impairment charges.
In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date. We have option deposits and capitalized pre-acquisition costs associated with the optioned land and lots. When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition. Option deposits and capitalized pre-acquisition costs associated with the assets under option may be forfeited at that time. Charges for such forfeitures are expensed to cost of sales.

7.	Investments in Unconsolidated Entities	
As of March 31, 2016, we held equity investments in six active homebuilding partnerships or limited liability companies and one financial services limited liability company. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 7% to 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):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Limited liability company interests	 	$	14,226	 	 	$	15,739	 	
General partnership interests	 	 	3,268	 	 	 	3,260	 	
Total	 	$	17,494	 	 	$	18,999	 	

- 12 -

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 income (loss) of unconsolidated entities.
Assets and liabilities of unconsolidated entities (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Assets	 	 	 	 	 	 	 	 	
Cash	 	$	14,871	 	 	$	18,641	 	
Receivables	 	 	5,588	 	 	 	13,108	 	
Real estate inventories	 	 	94,309	 	 	 	92,881	 	
Other assets	 	 	1,147	 	 	 	1,180	 	
Total assets	 	$	115,915	 	 	$	125,810	 	
Liabilities and equity	 	 	 	 	 	 	 	 	
Accounts payable and other liabilities	 	$	8,296	 	 	$	14,443	 	
Company’s equity	 	 	17,494	 	 	 	18,999	 	
Outside interests' equity	 	 	90,125	 	 	 	92,368	 	
Total liabilities and equity	 	$	115,915	 	 	$	125,810	 	
 
Results of operations from unconsolidated entities (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Net sales	 	$	3,209	 	 	$	76	 	
Other operating expense	 	 	(2,150	)	 	 	(736	)	
Other income (expense)	 	 	1	 	 	 	2	 	
Net income (loss)	 	$	1,060	 	 	$	(658	)	
Company’s equity in income (loss) of unconsolidated entities	 	$	701	 	 	$	74	 	

8.	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 Consolidation to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, if we are determined to be the primary beneficiary of the VIE, we will consolidate the VIE in our financial statements and reflect its assets as real estate inventory not owned included in our real estate inventories, its liabilities as debt (nonrecourse) held by VIEs in accrued expenses and other liabilities and the net equity of the VIE owners as noncontrolling interests on our consolidated balance sheets. In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE.
Creditors of the entities with which we have land 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.
 
- 13 -

The following provides a summary of our interests in land option agreements (in thousands):
 
 	 	March 31, 2016	 	 	December 31, 2015	 	
 	 	 	 	 	 	Remaining	 	 	Consolidated	 	 	 	 	 	 	Remaining	 	 	Consolidated	 	
 	 	 	 	 	 	Purchase	 	 	Inventory	 	 	 	 	 	 	Purchase	 	 	Inventory	 	
 	 	Deposits	 	 	Price	 	 	Held by VIEs	 	 	Deposits	 	 	Price	 	 	Held by VIEs	 	
Consolidated VIEs	 	$	6,465	 	 	$	27,964	 	 	$	33,940	 	 	$	3,003	 	 	$	23,239	 	 	$	26,208	 	
Unconsolidated VIEs	 	 	4,164	 	 	 	94,843	 	 	N/A	 	 	 	11,615	 	 	 	74,590	 	 	N/A	 	
Other land option agreements	 	 	20,114	 	 	 	257,886	 	 	N/A	 	 	 	27,440	 	 	 	279,612	 	 	N/A	 	
Total	 	$	30,743	 	 	$	380,693	 	 	$	33,940	 	 	$	42,058	 	 	$	377,441	 	 	$	26,208	 	
 
Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not considered VIEs.
In addition to the deposits presented in the table above, our exposure to loss related to our land option contracts consisted of capitalized pre-acquisition costs of $8.0 million and $5.0 million as of March 31, 2016 and December 31, 2015, respectively. These pre-acquisition costs were included in real estate inventories as land under development on our consolidated balance sheets.  

9.	Goodwill and Other Intangible Assets	
In connection with the Merger, $139.3 million of goodwill has been recorded as of March 31, 2016.  
We have two intangible assets recorded as of March 31, 2016, comprised of an existing trade name from the acquisition of Maracay Homes in 2006, which has a 20 year useful life, and a TRI Pointe Homes trade name resulting from the Merger in 2014 which has an indefinite useful life.
Goodwill and other intangible assets consisted of the following (in thousands):
 
 	 	March 31, 2016	 	 	December 31, 2015	 	
 	 	Gross	 	 	 	 	 	 	Net	 	 	Gross	 	 	 	 	 	 	Net	 	
 	 	Carrying	 	 	Accumulated	 	 	Carrying	 	 	Carrying	 	 	Accumulated	 	 	Carrying	 	
 	 	Amount	 	 	Amortization	 	 	Amount	 	 	Amount	 	 	Amortization	 	 	Amount	 	
Goodwill	 	$	139,304	 	 	$	—	 	 	$	139,304	 	 	$	139,304	 	 	$	—	 	 	$	139,304	 	
Trade names	 	 	27,979	 	 	 	(5,388	)	 	 	22,591	 	 	 	27,979	 	 	 	(5,254	)	 	 	22,725	 	
Total	 	$	167,283	 	 	$	(5,388	)	 	$	161,895	 	 	$	167,283	 	 	$	(5,254	)	 	$	162,029	 	
 
The remaining useful life of our amortizing intangible asset related to the Maracay Homes trade name was 9.9 and 10.2 years as of March 31, 2016 and December 31, 2015, respectively. Amortization expense related to this intangible asset was $134,000 for each of the three month periods ended March 31, 2016 and 2015, respectively.  Amortization of this intangible asset was charged to sales and marketing expense.  Our $17.3 million indefinite life intangible asset related to the TRI Pointe Homes trade name is not amortizing.  All trade names are evaluated for impairment on an annual basis or more frequently if indicators of impairment exist.
Expected amortization of our intangible asset related to Maracay Homes for the remainder of 2016, the next four years and thereafter is (in thousands):
 
Remainder of 2016	 	$	400	 	
2017	 	 	534	 	
2018	 	 	534	 	
2019	 	 	534	 	
2020	 	 	534	 	
Thereafter	 	 	2,755	 	
Total	 	$	5,291	 	

 
- 14 -

10.	Other Assets	
Other assets consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Prepaid expenses	 	$	11,787	 	 	$	14,523	 	
Refundable fees and other deposits	 	 	16,891	 	 	 	17,056	 	
Development rights, held for future use or sale	 	 	4,360	 	 	 	4,360	 	
Deferred loan costs - unsecured revolving credit facility	 	 	2,128	 	 	 	2,179	 	
Operating properties and equipment, net	 	 	7,453	 	 	 	7,643	 	
Other	 	 	3,299	 	 	 	3,157	 	
Total	 	$	45,918	 	 	$	48,918	 	

11.	Accrued Expenses and Other Liabilities	
Accrued expenses and other liabilities consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Accrued payroll and related costs	 	$	13,502	 	 	$	28,264	 	
Warranty reserves (Note 14)	 	 	45,419	 	 	 	45,948	 	
Estimated cost for completion of real estate inventories	 	 	49,221	 	 	 	52,818	 	
Customer deposits	 	 	15,422	 	 	 	12,132	 	
Debt (nonrecourse) held by VIEs	 	 	2,310	 	 	 	2,442	 	
Income tax liability to Weyerhaeuser (Note 17)	 	 	8,975	 	 	 	8,900	 	
Accrued income taxes payable	 	 	11,015	 	 	 	19,279	 	
Liability for uncertain tax positions (Note 16)	 	 	307	 	 	 	307	 	
Accrued interest	 	 	13,937	 	 	 	2,417	 	
Accrued insurance expense	 	 	1,408	 	 	 	1,402	 	
Other tax liability	 	 	23,477	 	 	 	21,764	 	
Other	 	 	16,309	 	 	 	20,590	 	
Total	 	$	201,302	 	 	$	216,263	 	

12.	Senior Notes, Unsecured Revolving Credit Facility and Seller Financed Loans	
Senior Notes
The Senior Notes consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
4.375% Senior Notes due June 15, 2019	 	$	450,000	 	 	$	450,000	 	
5.875% Senior Notes due June 15, 2024	 	 	450,000	 	 	 	450,000	 	
Discount and deferred loan costs	 	 	(30,061	)	 	 	(31,321	)	
Total	 	$	869,939	 	 	$	868,679	 	
 
On the Closing Date, TRI Pointe assumed WRECO’s obligations as issuer of 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 $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.
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 March 31, 2016, no principal has been paid on the Senior Notes, and there was $19.5 million of capitalized debt financing costs, included in senior notes 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 $13.5 million and $1.9 million as of March 31, 2016 and December 31, 2015, respectively.
 
- 15 -

Un secured Revolving Credit Facility
Unsecured revolving credit facility consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Unsecured revolving credit facility	 	$	374,392	 	 	$	299,392	 	
 
In May 2015, the Company amended its unsecured revolving credit facility (the “Credit Facility”) from $425 million to $550 million.  The Credit Facility matures on May 18, 2019, 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 1.45% to 2.20%, depending on the Company’s leverage ratio. As of March 31, 2016, the outstanding balance under the Credit Facility was $374.4 million with an interest rate of 2.13% per annum and $170.3 million of availability after considering the borrowing base provisions and outstanding letters of credit.  As of March 31, 2016 there was $2.1 million of capitalized debt financing costs, included in Other Assets on our consolidated balance sheet, related to the Credit Facility that will amortize over the life of the Credit Facility, maturing on May 18, 2019.  Accrued interest related to the Credit Facility was $484,000 and $407,000 as of March 31, 2016 and December 31, 2015, respectively.
At March 31, 2016 we had outstanding letters of credit of $5.3 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
Seller financed loans consisted of the following (in thousands):
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Seller financed loans	 	$	—	 	 	$	2,434	 	
 
Accrued interest on the seller financed loans outstanding as of December 31, 2015 was $89,000.
Interest Incurred
During the three month periods ended March 31, 2016 and 2015, the Company incurred interest of $15.1 million and $15.2 million, respectively, related to all debt during the period. All interest incurred was capitalized to inventory for the three month periods ended March 31, 2016 and 2015, respectively. Included in interest incurred was amortization of deferred financing and Senior Note discount costs of $1.3 million and $1.2 million for the three months ended March 31, 2016 and 2015, respectively.  Accrued interest related to all outstanding debt at March 31, 2016 and December 31, 2015 was $13.9 million and $2.4 million, respectively.  
Covenant Requirements
The Senior Notes contain covenants that restrict our ability to, among other things, create liens or other encumbrances, enter into sale and leaseback transactions, or merge or sell all or substantially all of our assets. These limitations are subject to a number of qualifications and exceptions.
Under the Credit Facility, the Company is required to comply with certain financial covenants, including 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 March 31, 2016 and December 31, 2015.

 
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13.	Fair Value Disclosures	
Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures , defines “fair value” as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:
 	·	Level 1—Quoted prices for identical instruments in active markets	
 	·	Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date	
 	·	Level 3—Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date	
Fair Value of Financial Instruments
A summary of assets and liabilities at March 31, 2016 and December 31, 2015, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):
 
 	 	 	 	March 31, 2016	 	 	December 31, 2015	 	
 	 	Hierarchy	 	Book Value	 	 	Fair Value	 	 	Book Value	 	 	Fair Value	 	
Senior Notes (1)	 	Level 2	 	 	889,456	 	 	 	894,375	 	 	 	889,054	 	 	 	881,460	 	
Unsecured revolving credit facility (2)	 	Level 2	 	 	374,392	 	 	 	374,392	 	 	 	299,392	 	 	 	299,392	 	
Seller financed loans	 	Level 2	 	 	—	 	 	 	—	 	 	 	2,434	 	 	 	2,368	 	
  __________
(1)	The estimated fair value of the Senior Notes at March 31, 2016 and December 31, 2015 is based on quoted market prices.	
(2)	We believe that the carrying value of the Credit Facility approximates fair value based on the short term nature of the current market rate amended on May 18, 2015.	
 
At March 31, 2016 and December 31, 2015, the carrying value of cash and cash equivalents and receivables approximated 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 when events and circumstances indicate 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):
 
 	 	 	 	Three Months Ended	 	 	Year Ended	 	
 	 	 	 	March 31, 2016	 	 	December 31, 2015	 	
 	 	 	 	 	 	 	 	Fair Value	 	 	 	 	 	 	Fair Value	 	
 	 	 	 	Impairment	 	 	Net of	 	 	Impairment	 	 	Net of	 	
 	 	 	 	Charge	 	 	Impairment	 	 	Charge	 	 	Impairment	 	
Real estate inventories (1)	 	 	 	$	—	 	 	$	—	 	 	$	1,167	 	 	$	28,540	 	
__________
(1)	Fair value of real estate inventories, net of impairment charges represents only those assets whose carrying values were adjusted to fair value in the respective periods presented. The fair value of these real estate inventories impaired was determined based on recent offers received from outside third parties or actual contracts.	

14.	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.
 
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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 necessa ry.  In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. Accordingly, it is possible that the ultimate outcome of any m atter, if in excess of a related accrual or if no accrual was made, could be material to our financial statements.  For matters as to which the Company believes a loss is probable and reasonably estimable, it had legal reserves of $400,000 and $450,000 as of March 31, 2016 and December 31, 2015, respectively.
Warranty
Warranty reserves are accrued as home deliveries occur. Our warranty reserves on homes delivered will vary based on product type and geographic area and also depending on state and local laws. The warranty reserve is included in accrued expenses and other liabilities on our consolidated balance sheets and represents expected future costs based on our historical experience over previous years. Estimated warranty costs are charged to cost of home sales in the period in which the related home sales revenue is recognized.
We maintain general liability insurance designed to protect us against a portion of our risk of loss from 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 $10.4 million and $10.5 million as of March 31, 2016 and December 31, 2015, 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):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Warranty reserves, beginning of period	 	$	45,948	 	 	$	33,270	 	
Warranty reserves accrued	 	 	2,073	 	 	 	2,872	 	
Adjustments to pre-existing reserves	 	 	—	 	 	 	301	 	
Warranty expenditures	 	 	(2,602	)	 	 	(2,478	)	
Warranty reserves, end of period	 	$	45,419	 	 	$	33,965	 	
 
Performance Bonds
We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. As of March 31, 2016 and December 31, 2015, the Company had outstanding surety bonds totaling $426.5 million and $414.1 million, respectively. The beneficiaries of the bonds are various municipalities.

15.	Stock-Based Compensation	
2013 Long-Term Incentive Plan
The Company’s stock compensation plan, the 2013 Long-Term Incentive Plan (the “2013 Incentive Plan”), was adopted by TRI Pointe in January 2013 and amended with the approval of our stockholders in 2014. 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.
 
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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 out standing option, stock appreciation right, stock award or performance award granted under the 2013 Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of our common stock generally shall again be available under the 2013 Incentive Plan. As of March 31, 2016 there were 7,637,283 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.  
The following table presents compensation expense recognized related to all stock-based awards (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Total stock-based compensation	 	$	2,605	 	 	$	2,381	 	
 
Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations.  As of March 31, 2016, total unrecognized stock-based compensation related to all stock-based awards was $27.2 million and the weighted average term over which the expense was expected to be recognized was 2.3 years.
Summary of Stock Option Activity
The following table presents a summary of stock option awards for the three months ended March 31, 2016:
 
 	 	 	 	 	 	Weighted	 	 	Weighted	 	 	 	 	 	
 	 	 	 	 	 	Average	 	 	Average	 	 	Aggregate	 	
 	 	 	 	 	 	Exercise	 	 	Remaining	 	 	Intrinsic	 	
 	 	 	 	 	 	Price	 	 	Contractual	 	 	Value	 	
 	 	Options	 	 	Per Share	 	 	Life	 	 	(in thousands)	 	
Options outstanding at December 31, 2015	 	 	3,220,147	 	 	$	13.12	 	 	 	5.2	 	 	$	3,081	 	
Granted	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Exercised	 	 	(1,401	)	 	 	4.51	 	 	 	—	 	 	 	—	 	
Forfeited	 	 	(144,407	)	 	 	12.33	 	 	 	—	 	 	 	—	 	
Options outstanding at March 31, 2016	 	 	3,074,339	 	 	 	13.15	 	 	 	5.1	 	 	 	2,075	 	
Options exercisable at March 31, 2016	 	 	2,871,261	 	 	 	12.46	 	 	 	4.6	 	 	 	2,515	 	
 
The intrinsic value of each stock option award outstanding or exercisable is the difference between the fair market value of the Company’s common stock at the end of the period and the exercise price of each stock option award to the extent it is considered “in-the-money”. A stock option award is considered to be “in-the-money” if the fair market value of the Company’s stock is greater than the exercise price of the stock option award. The aggregate intrinsic value of options outstanding and options exercisable represents the value that would have been received by the holders of stock option awards had they exercised their stock option award on the last trading day of the period and sold the underlying shares at the closing price on that day.
 
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Summary of Restricted Stock Unit Activity
The following table presents a summary of restricted stock units (“RSUs”) for the three months ended March 31, 2016:
 
 	 	 	 	 	 	Weighted	 	 	 	 	 	
 	 	 	 	 	 	Average	 	 	Aggregate	 	
 	 	Restricted	 	 	Grant Date	 	 	Intrinsic	 	
 	 	Stock	 	 	Fair Value	 	 	Value	 	
 	 	Units	 	 	Per Share	 	 	(in thousands)	 	
Nonvested RSUs at December 31, 2015	 	 	1,958,033	 	 	$	12.21	 	 	$	24,808	 	
Granted	 	 	1,829,923	 	 	 	8.27	 	 	 	21,556	 	
Vested	 	 	(298,772	)	 	 	14.26	 	 	 	—	 	
Forfeited	 	 	(714	)	 	 	14.48	 	 	 	—	 	
Nonvested RSUs at March 31, 2016	 	 	3,488,470	 	 	 	9.93	 	 	 	41,094	 	
 
On March 5, 2015, the Company granted an aggregate of 440,800 time-vested RSUs to employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three year period.  The fair value of each RSU granted on March 5, 2015 was measured using a price of $14.97 per share, which was the closing stock price on the date of grant.  Each award will be expensed on a straight-line basis over the vesting period.
On March 9, 2015, the Company granted 411,804, 384,351, and 274,536 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively, with 1/3 of the performance-based RSU amounts being allocated to each of the three following separate performance goals: total shareholder return (compared to a group of peer homebuilding companies); earnings per share; and stock price. The performance-based RSUs granted will vest in each case, if at all, based on the percentage of attainment of the applicable performance goal. The performance periods for the performance-based RSUs with vesting based on total shareholder return and earnings per share are January 1, 2015 to December 31, 2017. The performance period for the performance-based RSUs with vesting based on stock price is January 1, 2016 to December 31, 2017. The fair value of the performance-based RSUs related to the total shareholder return and stock price performance goals was determined to be $7.55 and $7.90 per share, respectively, based on a Monte Carlo simulation. The fair value of the performance-based RSUs related to the earnings per share goal was measured using a price of $14.57 per share, which was the closing stock price on the date of grant. Each grant will be expensed over the requisite service period.
 
On August 12, 2015, the Company granted an aggregate of 69,008 RSUs to the non-employee members of its board of directors. These RSUs vest in their entirety on the day immediately prior to the Company’s 2016 Annual Meeting of Stockholders. The fair value of each RSU granted on August 12, 2015 was measured using $14.49 per share, which was the closing price on the date of grant. Each award will be expensed on a straight-line basis over the vesting period.
On March 1, 2016, the Company granted an aggregate of 1,120,677 time-vested RSUs to employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three year period.  The fair value of each RSU granted on March 1, 2016 was measured using a price of $10.49 per share, which was the closing stock price on the date of grant.  Each award will be expensed on a straight-line basis over the vesting period.
On March 1, 2016, the Company granted 297,426, 285,986 and 125,834 performance-based RSUs to the Company’s Chief Executive Officer, President, and Chief Financial Officer, respectively. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the Company’s percentage attainment of specified threshold, target and maximum performance goals. The percentage of these performance-based RSUs that vest will be determined by comparing the Company’s total stockholder return to the total stockholder returns of a group of peer homebuilding companies. The performance period for these performance-based RSUs is January 1, 2016 to December 31, 2018. These performance-based RSUs will not vest if the Company’s total stockholder return from January 1, 2016 to December 31, 2018 is not a positive number, provided that the executive will thereafter become vested in the award units, or portion thereof, that would have otherwise vested on December 31, 2018 if on any day after December 31, 2018 and on or before December 31, 2020, the Company’s total stockholder return is greater than zero and the executive is employed by the Company on that date. If the performance-based RSUs have not vested on or before December 31, 2020, such performance-based RSUs shall be cancelled and forfeited for no consideration. The fair value of these performance-based RSUs was determined to be $4.76 per share based on a Monte Carlo simulation. Each award will be expensed over the requisite service period.
As RSUs vest, a portion of the shares awarded is generally withheld to cover employee tax withholdings. As a result, the number of RSUs vested and the number of shares of TRI Pointe common stock issued will differ.

 
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16.	Income Taxes	
We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rates for the years in which taxes are expected to be paid or recovered.  Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740.  We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable.  Our assessment considers, among other things, the nature, frequency and severity of our current and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods and tax planning alternatives.
We had net deferred tax assets of $126.8 million and $130.7 million as of March 31, 2016 and December 31, 2015, respectively.  We had a valuation allowance related to those net deferred tax assets of $3.3 million and $4.4 million as of March 31, 2016 and December 31, 2015, respectively.  The Company will continue to evaluate both positive and negative evidence in determining the need for a valuation allowance against its deferred tax assets. Changes in positive and negative evidence, including differences between the Company's future operating results and the estimates utilized in the determination of the valuation allowance, could result in changes in the Company's estimate of the valuation allowance against its deferred tax assets. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company's consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation allowance against the Company's deferred tax assets.
Our provision for income taxes totaled $15.5 million and $7.8 million for the three months ended March 31, 2016 and 2015, respectively.  The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense.  The Company had $307,000 of liabilities for uncertain tax positions recorded as of both March 31, 2016 and December 31, 2015, respectively.  The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

17.	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.
TRI Pointe has certain liabilities with Weyerhaeuser related to a tax sharing agreement.   As of March 31, 2016 and December 31, 2015, we had an income tax liability to Weyerhaeuser of $9.0 million and $8.9 million, respectively, which is recorded in accrued expenses and other liabilities on the accompanying balance sheet.

 
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18.	Supplemental Disclosure to Consolidated Statements of Cash Flow	
The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Supplemental disclosure of cash flow information:	 	 	 	 	 	 	 	 	
Cash paid during the period for:	 	 	 	 	 	 	 	 	
Interest, net of amounts capitalized of $15,149 and
   $15,176 (Note 6)	 	$	—	 	 	$	—	 	
Income taxes	 	$	19,876	 	 	$	1,504	 	
Supplemental disclosures of noncash activities:	 	 	 	 	 	 	 	 	
Amortization of senior note discount capitalized to real
   estate inventory	 	$	402	 	 	$	380	 	
Amortization of deferred loan costs capitalized to real
   estate inventory	 	$	858	 	 	$	—	 	
Effect of net consolidation and de-consolidation of
   variable interest entities:	 	 	 	 	 	 	 	 	
Increase in consolidated real estate
   inventory not owned	 	$	5,865	 	 	$	1,453	 	
Increase in deposits on real estate under option or
   contract and other assets	 	$	—	 	 	$	129	 	
Increase in noncontrolling interests	 	$	(5,865	)	 	$	(1,582	)	

19.	Supplemental Guarantor Information	
On the Closing Date, the TRI Pointe Homes assumed WRECO’s obligations as issuer of the Senior Notes.  Additionally, all of TRI Pointe’s wholly owned subsidiaries that are guarantors of the Company’s Credit Facility, including WRECO and certain of its wholly owned subsidiaries, entered into supplemental indentures pursuant to which they jointly and severally guaranteed TRI Pointe’s obligations with respect to the Senior Notes.  In connection with the Reorganization, TRI Pointe Group became a co-issuer with TRI Pointe Homes of the Senior Notes.
Presented below are the condensed consolidating balance sheets at March 31, 2016 and December 31, 2015, condensed consolidating statements of operations for the three months ended March 31, 2016 and 2015 and condensed consolidating statement of cash flows for the three month periods ended March 31, 2016 and 2015.  TRI Pointe’s non-guarantor subsidiaries represent less than 3% on an individual and aggregate basis of consolidated total assets, total revenues, and income from operations before taxes and cash flow from operating activities.  Therefore, the non-guarantor subsidiaries’ information is not separately presented in the tables below, but included with the guarantor subsidiaries.
 
- 22 -

Condensed Consolidating Balance Sheet (in thousands):
 
 	 	March 31, 2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	56,860	 	 	$	87,159	 	 	$	—	 	 	$	144,019	 	
Receivables	 	 	7,150	 	 	 	25,538	 	 	 	—	 	 	 	32,688	 	
Intercompany receivables	 	 	860,686	 	 	 	—	 	 	 	(860,686	)	 	 	—	 	
Real estate inventories	 	 	742,753	 	 	 	1,962,498	 	 	 	—	 	 	 	2,705,251	 	
Investments in unconsolidated entities	 	 	—	 	 	 	17,494	 	 	 	—	 	 	 	17,494	 	
Goodwill and other intangible assets, net	 	 	156,604	 	 	 	5,291	 	 	 	—	 	 	 	161,895	 	
Investments in subsidiaries	 	 	1,134,337	 	 	 	—	 	 	 	(1,134,337	)	 	 	—	 	
Deferred tax assets, net	 	 	18,952	 	 	 	107,860	 	 	 	—	 	 	 	126,812	 	
Other assets	 	 	10,129	 	 	 	35,789	 	 	 	—	 	 	 	45,918	 	
Total Assets	 	$	2,987,471	 	 	$	2,241,629	 	 	$	(1,995,023	)	 	$	3,234,077	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	16,822	 	 	$	50,779	 	 	$	—	 	 	$	67,601	 	
Intercompany payables	 	 	—	 	 	 	860,686	 	 	 	(860,686	)	 	 	—	 	
Accrued expenses and other liabilities	 	 	31,561	 	 	 	169,741	 	 	 	—	 	 	 	201,302	 	
Unsecured revolving credit facility	 	 	374,392	 	 	 	—	 	 	 	—	 	 	 	374,392	 	
Senior notes	 	 	869,939	 	 	 	—	 	 	 	—	 	 	 	869,939	 	
Total Liabilities	 	 	1,292,714	 	 	 	1,081,206	 	 	 	(860,686	)	 	 	1,513,234	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	1,694,757	 	 	 	1,134,337	 	 	 	(1,134,337	)	 	 	1,694,757	 	
Noncontrolling interests	 	 	—	 	 	 	26,086	 	 	 	—	 	 	 	26,086	 	
Total Equity	 	 	1,694,757	 	 	 	1,160,423	 	 	 	(1,134,337	)	 	 	1,720,843	 	
Total Liabilities and Equity	 	$	2,987,471	 	 	$	2,241,629	 	 	$	(1,995,023	)	 	$	3,234,077	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 23 -

19.	Supplemental Guarantor Information (continued)	
Condensed Consolidating Balance Sheet (in thousands):
 
 	 	December 31, 2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	147,771	 	 	$	66,714	 	 	$	—	 	 	$	214,485	 	
Receivables	 	 	17,358	 	 	 	26,352	 	 	 	—	 	 	 	43,710	 	
Intercompany receivables	 	 	783,956	 	 	 	—	 	 	 	(783,956	)	 	 	—	 	
Real estate inventories	 	 	657,221	 	 	 	1,862,052	 	 	 	—	 	 	 	2,519,273	 	
Investments in unconsolidated entities	 	 	—	 	 	 	18,999	 	 	 	—	 	 	 	18,999	 	
Goodwill and other intangible assets, net	 	 	156,604	 	 	 	5,425	 	 	 	—	 	 	 	162,029	 	
Investments in subsidiaries	 	 	1,093,261	 	 	 	—	 	 	 	(1,093,261	)	 	 	—	 	
Deferred tax assets, net	 	 	19,061	 	 	 	111,596	 	 	 	—	 	 	 	130,657	 	
Other assets	 	 	12,219	 	 	 	36,699	 	 	 	—	 	 	 	48,918	 	
Total Assets	 	$	2,887,451	 	 	$	2,127,837	 	 	$	(1,877,217	)	 	$	3,138,071	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	20,444	 	 	$	44,396	 	 	$	—	 	 	$	64,840	 	
Intercompany payables	 	 	—	 	 	 	783,956	 	 	 	(783,956	)	 	 	—	 	
Accrued expenses and other liabilities	 	 	32,219	 	 	 	184,044	 	 	 	—	 	 	 	216,263	 	
Unsecured revolving credit facility	 	 	299,392	 	 	 	—	 	 	 	—	 	 	 	299,392	 	
Seller financed loans	 	 	2,034	 	 	 	400	 	 	 	—	 	 	 	2,434	 	
Senior notes	 	 	868,679	 	 	 	—	 	 	 	—	 	 	 	868,679	 	
Total Liabilities	 	 	1,222,768	 	 	 	1,012,796	 	 	 	(783,956	)	 	 	1,451,608	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	1,664,683	 	 	 	1,093,261	 	 	 	(1,093,261	)	 	 	1,664,683	 	
Noncontrolling interests	 	 	—	 	 	 	21,780	 	 	 	—	 	 	 	21,780	 	
Total Equity	 	 	1,664,683	 	 	 	1,115,041	 	 	 	(1,093,261	)	 	 	1,686,463	 	
Total Liabilities and Equity	 	$	2,887,451	 	 	$	2,127,837	 	 	$	(1,877,217	)	 	$	3,138,071	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 24 -

19.	Supplemental Guarantor Information (continued)	
Condensed Consolidating Statement of Operations (in thousands):
 
 	 	Three Months Ended March 31, 2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Homebuilding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Home sales revenue	 	$	131,957	 	 	$	291,098	 	 	$	—	 	 	$	423,055	 	
Land and lot sales revenue	 	 	—	 	 	 	355	 	 	 	—	 	 	 	355	 	
Other operations	 	 	—	 	 	 	580	 	 	 	—	 	 	 	580	 	
Total revenues	 	 	131,957	 	 	 	292,033	 	 	 	—	 	 	 	423,990	 	
Cost of home sales	 	 	110,452	 	 	 	214,047	 	 	 	—	 	 	 	324,499	 	
Cost of land and lot sales	 	 	—	 	 	 	779	 	 	 	—	 	 	 	779	 	
Other operations	 	 	—	 	 	 	566	 	 	 	—	 	 	 	566	 	
Sales and marketing	 	 	6,064	 	 	 	20,257	 	 	 	—	 	 	 	26,321	 	
General and administrative	 	 	13,212	 	 	 	15,184	 	 	 	—	 	 	 	28,396	 	
Restructuring charges	 	 	—	 	 	 	135	 	 	 	—	 	 	 	135	 	
Homebuilding income from operations	 	 	2,229	 	 	 	41,065	 	 	 	—	 	 	 	43,294	 	
Equity in loss of unconsolidated entities	 	 	—	 	 	 	(14	)	 	 	—	 	 	 	(14	)	
Other income (loss), net	 	 	357	 	 	 	(242	)	 	 	—	 	 	 	115	 	
Homebuilding income before taxes	 	 	2,586	 	 	 	40,809	 	 	 	—	 	 	 	43,395	 	
Financial Services:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	 	—	 	 	 	148	 	 	 	—	 	 	 	148	 	
Expenses	 	 	—	 	 	 	58	 	 	 	—	 	 	 	58	 	
Equity in income of unconsolidated entities	 	 	—	 	 	 	715	 	 	 	—	 	 	 	715	 	
Financial services income before taxes	 	 	—	 	 	 	805	 	 	 	—	 	 	 	805	 	
Income before taxes	 	 	2,586	 	 	 	41,614	 	 	 	—	 	 	 	44,200	 	
Equity of net income (loss) of subsidiaries	 	 	27,231	 	 	 	—	 	 	 	(27,231	)	 	 	—	 	
Provision for income taxes	 	 	(1,267	)	 	 	(14,223	)	 	 	—	 	 	 	(15,490	)	
Net income (loss)	 	 	28,550	 	 	 	27,391	 	 	 	(27,231	)	 	 	28,710	 	
Net income attributable to noncontrolling interests	 	 	—	 	 	 	(160	)	 	 	—	 	 	 	(160	)	
Net income (loss) available to common stockholders	 	$	28,550	 	 	$	27,231	 	 	$	(27,231	)	 	$	28,550	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 25 -

19.	Supplemental Guarantor Information (continued)	
Condensed Consolidating Statement of Operations (in thousands):
 
 	 	Three Months Ended March 31, 2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Homebuilding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Home sales revenue	 	$	106,858	 	 	$	267,407	 	 	$	—	 	 	$	374,265	 	
Land and lot sales revenue	 	 	—	 	 	 	2,000	 	 	 	—	 	 	 	2,000	 	
Other operations	 	 	—	 	 	 	993	 	 	 	—	 	 	 	993	 	
Total revenues	 	 	106,858	 	 	 	270,400	 	 	 	—	 	 	 	377,258	 	
Cost of home sales	 	 	86,981	 	 	 	212,926	 	 	 	—	 	 	 	299,907	 	
Cost of land and lot sales	 	 	—	 	 	 	2,308	 	 	 	—	 	 	 	2,308	 	
Other operations	 	 	—	 	 	 	562	 	 	 	—	 	 	 	562	 	
Sales and marketing	 	 	4,981	 	 	 	18,305	 	 	 	—	 	 	 	23,286	 	
General and administrative	 	 	12,672	 	 	 	15,481	 	 	 	—	 	 	 	28,153	 	
Restructuring charges	 	 	—	 	 	 	222	 	 	 	—	 	 	 	222	 	
Homebuilding income from operations	 	 	2,224	 	 	 	20,596	 	 	 	—	 	 	 	22,820	 	
Equity in income of unconsolidated entities	 	 	—	 	 	 	107	 	 	 	—	 	 	 	107	 	
Other income, net	 	 	39	 	 	 	217	 	 	 	—	 	 	 	256	 	
Homebuilding income before taxes	 	 	2,263	 	 	 	20,920	 	 	 	—	 	 	 	23,183	 	
Financial Services:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Expenses	 	 	—	 	 	 	26	 	 	 	—	 	 	 	26	 	
Equity in loss of unconsolidated entities	 	 	—	 	 	 	(33	)	 	 	—	 	 	 	(33	)	
Financial services loss from operations before taxes	 	 	—	 	 	 	(59	)	 	 	—	 	 	 	(59	)	
Income before taxes	 	 	2,263	 	 	 	20,861	 	 	 	—	 	 	 	23,124	 	
Equity of net income (loss) of subsidiaries	 	 	13,861	 	 	 	—	 	 	 	(13,861	)	 	 	—	 	
Provision for income taxes	 	 	(827	)	 	 	(7,000	)	 	 	—	 	 	 	(7,827	)	
Net income (loss) available to common stockholders	 	$	15,297	 	 	$	13,861	 	 	$	(13,861	)	 	$	15,297	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 26 -

19.	Supplemental Guarantor Information (continued)	
Condensed Consolidating Statement of Cash Flows (in thousands):
 
 	 	Three Months Ended March 31, 2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in operating activities	 	$	(73,056	)	 	$	(66,620	)	 	$	—	 	 	$	(139,676	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(216	)	 	 	(195	)	 	 	—	 	 	 	(411	)	
Investments in unconsolidated entities	 	 	—	 	 	 	(13	)	 	 	—	 	 	 	(13	)	
Intercompany	 	 	(89,524	)	 	 	—	 	 	 	89,524	 	 	 	—	 	
Net cash (used in) provided by investing activities	 	 	(89,740	)	 	 	(208	)	 	 	89,524	 	 	 	(424	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Borrowings from debt	 	 	75,000	 	 	 	—	 	 	 	—	 	 	 	75,000	 	
Repayment of debt	 	 	(2,034	)	 	 	(400	)	 	 	—	 	 	 	(2,434	)	
Net repayments of debt held by variable interest entities	 	 	—	 	 	 	(132	)	 	 	—	 	 	 	(132	)	
Contributions from noncontrolling interests	 	 	—	 	 	 	808	 	 	 	—	 	 	 	808	 	
Distributions to noncontrolling interests	 	 	—	 	 	 	(2,527	)	 	 	—	 	 	 	(2,527	)	
Proceeds from issuance of common stock under
   share-based awards	 	 	6	 	 	 	—	 	 	 	—	 	 	 	6	 	
Minimum tax withholding paid on behalf of employees for
   restricted stock units	 	 	(1,087	)	 	 	—	 	 	 	—	 	 	 	(1,087	)	
Intercompany	 	 	—	 	 	 	89,524	 	 	 	(89,524	)	 	 	—	 	
Net cash provided by (used in) financing activities	 	 	71,885	 	 	 	87,273	 	 	 	(89,524	)	 	 	69,634	 	
Net (decrease) increase in cash and cash equivalents	 	 	(90,911	)	 	 	20,445	 	 	 	—	 	 	 	(70,466	)	
Cash and cash equivalents - beginning of period	 	 	147,771	 	 	 	66,714	 	 	 	—	 	 	 	214,485	 	
Cash and cash equivalents - end of period	 	$	56,860	 	 	$	87,159	 	 	$	—	 	 	$	144,019	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 27 -

19.	Supplemental Guarantor Information (continued)	
Condensed Consolidating Statement of Cash Flows (in thousands):
 
 	 	Three Months Ended March 31, 2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	Consolidated	 	
 	 	 	 	 	 	Guarantor	 	 	Consolidating	 	 	TRI Pointe	 	
 	 	Issuer (1)	 	 	Subsidiaries	 	 	Adjustments	 	 	Group, Inc.	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in operating activities	 	$	(52,695	)	 	$	(55,619	)	 	$	—	 	 	$	(108,314	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(303	)	 	 	(75	)	 	 	—	 	 	 	(378	)	
Investments in unconsolidated entities	 	 	—	 	 	 	(978	)	 	 	—	 	 	 	(978	)	
Intercompany	 	 	(69,212	)	 	 	—	 	 	 	69,212	 	 	 	—	 	
Net cash (used in) provided by investing activities	 	 	(69,515	)	 	 	(1,053	)	 	 	69,212	 	 	 	(1,356	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Borrowings from notes payable	 	 	50,000	 	 	 	—	 	 	 	—	 	 	 	50,000	 	
Repayment of notes payable	 	 	(2,535	)	 	 	—	 	 	 	—	 	 	 	(2,535	)	
Net proceeds of debt held by variable interest entities	 	 	—	 	 	 	(742	)	 	 	—	 	 	 	(742	)	
Contributions from noncontrolling interests	 	 	—	 	 	 	873	 	 	 	—	 	 	 	873	 	
Distributions to noncontrolling interests	 	 	—	 	 	 	(726	)	 	 	—	 	 	 	(726	)	
Proceeds from issuance of common stock under
   share-based awards	 	 	263	 	 	 	—	 	 	 	—	 	 	 	263	 	
Excess tax benefits of share-based awards	 	 	308	 	 	 	—	 	 	 	—	 	 	 	308	 	
Minimum tax withholding paid on behalf of employees for restricted stock units	 	 	(1,827	)	 	 	—	 	 	 	—	 	 	 	(1,827	)	
Intercompany	 	 	—	 	 	 	69,212	 	 	 	(69,212	)	 	 	—	 	
Net cash provided by (used in) financing activities	 	 	46,209	 	 	 	68,617	 	 	 	(69,212	)	 	 	45,614	 	
Net (decrease) increase in cash and cash equivalents	 	 	(76,001	)	 	 	11,945	 	 	 	—	 	 	 	(64,056	)	
Cash and cash equivalents - beginning of period	 	 	105,888	 	 	 	64,741	 	 	 	—	 	 	 	170,629	 	
Cash and cash equivalents - end of period	 	$	29,887	 	 	$	76,686	 	 	$	—	 	 	$	106,573	 	
__________
 	(1)	References to “Issuer” in this Note 19, Supplemental Guarantor Information have the following meanings:	
 	a.	for periods prior to July 7, 2015: TRI Pointe Homes only	
 	b.	for periods from and after July 7, 2015:  TRI Pointe Homes and TRI Pointe Group as co-issuers	

 
- 28 -

Item 2.	 Management’s Discussion and Analysis of Financial Condition and Results of Operations	
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain statements relating to future events of our intentions, beliefs, expectations, predictions for the future and other matters that are “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
These statements:
 	·	use forward-looking terminology;	
 	·	are based on various assumptions made by TRI Pointe; and	
 	·	may not be accurate because of risks and uncertainties surrounding the assumptions that are made.	
Factors listed in this section – as well as other factors not included – may cause actual results to differ significantly from the forward-looking statements included in this Quarterly Report on Form 10-Q. There is no guarantee that any of the events anticipated by the forward-looking statements in this Quarterly Report on Form 10-Q will occur, or if any of the events occurs, there is no guarantee of what effect it will have on our operations, financial condition or share price.
We will not update the forward-looking statements contained in this Quarterly Report on Form 10-Q, unless otherwise required by law.
Forward-Looking Statements
These forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “will,” “would,” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements include, but are not limited to, statements regarding our anticipated future financial and operating performance and results, including our estimates for growth.
Forward-looking statements are based on a number of factors, including the expected effect of:
 	·	the economy;	
 	·	laws and regulations;	
 	·	adverse litigation outcome and the adequacy of reserves;	
 	·	changes in accounting principles;	
 	·	projected benefit payments; and	
 	·	projected tax rates and credits.	
Risks, Uncertainties and Assumptions
The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
 	·	the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and the strength of the U.S. dollar;	
 	·	market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;	
 	·	levels of competition;	
 	·	the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;	
 	·	global economic conditions;	
 	·	raw material prices;	
 	·	oil and other energy prices;	
 	·	the effect of weather, including the continuing drought in California;	
 
- 29 -

 	·	the risk of loss from earthquakes, volcano es, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters;	
 	·	transportation costs;	
 	·	federal and state tax policies;	
 	·	the effect of land use, environment and other governmental regulations;	
 	·	legal proceedings;	
 	·	risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects;	
 	·	change in accounting principles;	
 	·	risks related to unauthorized access to our computer systems, theft of our customers’ confidential information or other forms of cyber-attack; and	
 	·	other factors described in “Risk Factors.”	
The following discussion and analysis should be read in conjunction with our consolidated financial statements and related condensed notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. The information contained in this Quarterly Report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our securities. We urge investors to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent reports on Form 8-K, which discuss our business in greater detail. The section entitled “Risk Factors” set forth in Item 1A of our Annual Report on Form 10-K, and similar disclosures in our other SEC filings, discuss some of the important risk factors that may affect our business, results of operations and financial condition. Investors should carefully consider those risks, in addition to the information in this report and in our other filings with the SEC, before deciding to invest in, or maintain an investment in, our common stock.
Reverse Acquisition and Formation of TRI Pointe Group
On the Closing Date, TRI Pointe consummated the Merger with WRECO, with WRECO becoming a wholly owned subsidiary of TRI Pointe. The Merger is accounted for in accordance with ASC Topic 805, Business Combinations . For accounting purposes, the Merger is treated as a “reverse acquisition” and WRECO is considered the accounting acquirer.
On July 7, 2015, TRI Pointe Homes reorganized its corporate structure (the “Reorganization”) whereby TRI Pointe Homes became a direct, wholly owned subsidiary of TRI Pointe Group.  As a result of the Reorganization, each share of common stock, par value $0.01 per share, of TRI Pointe Homes (“Homes Common Stock”) was cancelled and converted automatically into the right to receive one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of TRI Pointe Group (“Group Common Stock”), each share having the same designations, rights, powers and preferences, and the qualifications, limitations and restrictions thereof as the shares of Homes Common Stock being so converted.  TRI Pointe Group, as the successor issuer to TRI Pointe Homes (pursuant to Rule 12g-3(a) under the Exchange Act), began making filings under the Securities Act and the Exchange Act on July 7, 2015.
In connection with the Reorganization, TRI Pointe Group (i) became a co-issuer of TRI Pointe Homes’ 4.375% Senior Notes due 2019 and TRI Pointe Homes' 5.875% Senior Notes due 2024; and (ii) replaced TRI Pointe Homes as the borrower under TRI Pointe Homes’ existing unsecured revolving credit facility.
The business, executive officers and directors of TRI Pointe Group, and the rights and limitations of the holders of Group Common Stock immediately following the Reorganization were identical to the business, executive officers and directors of TRI Pointe Homes, and the rights and limitations of holders of Homes Common Stock immediately prior to the Reorganization.
 
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Consolidated Financial Da ta (in thousands, except per share amounts):
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	2015	 	
Homebuilding:	 	 	 	 	 	 	 	 	
Home sales revenue	 	$	423,055	 	 	$	374,265	 	
Land and lot sales revenue	 	 	355	 	 	 	2,000	 	
Other operations	 	 	580	 	 	 	993	 	
Total revenues	 	 	423,990	 	 	 	377,258	 	
Cost of home sales	 	 	324,499	 	 	 	299,907	 	
Cost of land and lot sales	 	 	779	 	 	 	2,308	 	
Other operations	 	 	566	 	 	 	562	 	
Sales and marketing	 	 	26,321	 	 	 	23,286	 	
General and administrative	 	 	28,396	 	 	 	28,153	 	
Restructuring charges	 	 	135	 	 	 	222	 	
Homebuilding income from operations	 	 	43,294	 	 	 	22,820	 	
Equity in (loss) income of unconsolidated entities	 	 	(14	)	 	 	107	 	
Other income, net	 	 	115	 	 	 	256	 	
Homebuilding income before taxes	 	 	43,395	 	 	 	23,183	 	
Financial Services:	 	 	 	 	 	 	 	 	
Revenues	 	 	148	 	 	 	—	 	
Expenses	 	 	58	 	 	 	26	 	
Equity in income (loss) of unconsolidated entities	 	 	715	 	 	 	(33	)	
Financial services income (loss) before taxes	 	 	805	 	 	 	(59	)	
Income before taxes	 	 	44,200	 	 	 	23,124	 	
Provision for income taxes	 	 	(15,490	)	 	 	(7,827	)	
Net income	 	 	28,710	 	 	 	15,297	 	
Net income attributable to noncontrolling interests	 	 	(160	)	 	 	—	 	
Net income available to common stockholders	 	$	28,550	 	 	$	15,297	 	
Earnings per share	 	 	 	 	 	 	 	 	
Basic	 	$	0.18	 	 	$	0.09	 	
Diluted	 	$	0.18	 	 	$	0.09	 	
Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015
Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment
 
 	 	Three Months Ended March 31, 2016	 	 	Three Months Ended March 31, 2015	 	 	Percentage Change	 	
 	 	Net   New	 	 	Average	 	 	Monthly	 	 	Net New	 	 	Average	 	 	Monthly	 	 	Net New	 	 	Average	 	 	Monthly	 	
 	 	Home	 	 	Selling	 	 	Absorption	 	 	Home	 	 	Selling	 	 	Absorption	 	 	Home	 	 	Selling	 	 	Absorption	 	
 	 	Orders	 	 	Communities	 	 	Rates	 	 	Orders	 	 	Communities	 	 	Rates	 	 	Orders	 	 	Communities	 	 	Rates	 	
Maracay Homes	 	 	201	 	 	 	18.5	 	 	 	3.6	 	 	 	161	 	 	 	17.0	 	 	 	3.2	 	 	 	25	%	 	 	9	%	 	 	15	%	
Pardee Homes	 	 	313	 	 	 	23.5	 	 	 	4.4	 	 	 	308	 	 	 	20.3	 	 	 	5.1	 	 	 	2	%	 	 	16	%	 	 	(12	)%	
Quadrant   Homes	 	 	133	 	 	 	9.5	 	 	 	4.7	 	 	 	150	 	 	 	10.2	 	 	 	4.9	 	 	 	(11	)%	 	 	(7	)%	 	 	(5	)%	
Trendmaker Homes	 	 	122	 	 	 	24.3	 	 	 	1.7	 	 	 	132	 	 	 	26.5	 	 	 	1.7	 	 	 	(8	)%	 	 	(8	)%	 	 	1	%	
TRI Pointe Homes	 	 	265	 	 	 	25.5	 	 	 	3.5	 	 	 	336	 	 	 	26.3	 	 	 	4.3	 	 	 	(21	)%	 	 	(3	)%	 	 	(19	)%	
Winchester Homes	 	 	115	 	 	 	13.2	 	 	 	2.9	 	 	 	107	 	 	 	12.7	 	 	 	2.8	 	 	 	8	%	 	 	4	%	 	 	3	%	
Total	 	 	1,149	 	 	 	114.5	 	 	 	3.3	 	 	 	1,194	 	 	 	113.0	 	 	 	3.5	 	 	 	(4	)%	 	 	1	%	 	 	(5	)%	
 
Net new home orders for the three months ended March 31, 2016 decreased by 45 units or 4% to 1,149, compared to 1,194 during the prior year period.  Net new home orders declined at Trendmaker Homes due to a decrease in average selling communities due to timing of community openings.  Quadrant Homes and TRI Pointe Homes experienced declines in net new home orders due to a decrease in average selling communities and monthly absorption rates.  TRI Pointe Homes’ 19% decrease in absorption rate was largely due to a change in mix to slower absorbing inland communities in 2016 from high absorption coastal communities in 2015.  Pardee Homes and Winchester Homes showed modest growth in net new home orders largely due to an increase in average selling communities. Maracay Homes’ net new home orders increased 25% due to new, higher absorption communities opening during the quarter.      
 
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Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)
 
 	 	As of March 31, 2016	 	 	As of March 31, 2015	 	 	Percentage Change	 	
 	 	 	 	 	 	Backlog	 	 	Average	 	 	 	 	 	 	Backlog	 	 	Average	 	 	 	 	 	 	Backlog	 	 	Average	 	
 	 	Backlog	 	 	Dollar	 	 	Sales	 	 	Backlog	 	 	Dollar	 	 	Sales	 	 	Backlog	 	 	Dollar	 	 	Sales	 	
 	 	Units	 	 	Value	 	 	Price	 	 	Units	 	 	Value	 	 	Price	 	 	Units	 	 	Value	 	 	Price	 	
Maracay Homes	 	 	289	 	 	$	121,130	 	 	$	419	 	 	 	181	 	 	$	67,817	 	 	$	375	 	 	 	60	%	 	 	79	%	 	 	12	%	
Pardee Homes	 	 	379	 	 	 	242,278	 	 	 	639	 	 	 	358	 	 	 	228,206	 	 	 	637	 	 	 	6	%	 	 	6	%	 	 	0	%	
Quadrant Homes	 	 	184	 	 	 	99,170	 	 	 	539	 	 	 	170	 	 	 	68,952	 	 	 	406	 	 	 	8	%	 	 	44	%	 	 	33	%	
Trendmaker Homes	 	 	170	 	 	 	90,870	 	 	 	535	 	 	 	242	 	 	 	128,206	 	 	 	530	 	 	 	(30	)%	 	 	(29	)%	 	 	1	%	
TRI Pointe Homes	 	 	354	 	 	 	238,669	 	 	 	674	 	 	 	440	 	 	 	323,215	 	 	 	735	 	 	 	(20	)%	 	 	(26	)%	 	 	(8	)%	
Winchester Homes	 	 	158	 	 	 	99,415	 	 	 	629	 	 	 	167	 	 	 	126,956	 	 	 	760	 	 	 	(5	)%	 	 	(22	)%	 	 	(17	)%	
Total	 	 	1,534	 	 	$	891,532	 	 	$	581	 	 	 	1,558	 	 	$	943,352	 	 	$	605	 	 	 	(2	)%	 	 	(5	)%	 	 	(4	)%	
 
Backlog units reflects the number of homes, net of actual cancellations experienced during the period, for which we have entered into sales contracts with customers but for which we have not yet delivered the homes. Homes in backlog are generally delivered within three to nine months, although we may experience cancellations of sales contracts prior to delivery. Our cancellation rate of buyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 13% for the three months ended March 31, 2016 compared to 11% for the same prior year period.  The dollar value of backlog was $891.5 million as of March 31, 2016, a decrease of $51.8 million, or 5%, compared to $943.4 million as of March 31, 2015.  This decrease in dollar value of backlog is due to a 4% decrease in the average sales price of homes in backlog to $581,000 as of March 31, 2016 from $605,000 as of March 31, 2015, in addition to a 2% decline in backlog units to 1,534 as of March 31, 2016 from 1,558 as of March 31, 2015.
New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)
 
 	 	Three Months Ended March 31, 2016	 	 	Three Months Ended March 31, 2015	 	 	Percentage Change	 	
 	 	New	 	 	Home	 	 	Average	 	 	New	 	 	Home	 	 	Average	 	 	New	 	 	Home	 	 	Average	 	
 	 	Homes	 	 	Sales	 	 	Sales	 	 	Homes	 	 	Sales	 	 	Sales	 	 	Homes	 	 	Sales	 	 	Sales	 	
 	 	Delivered	 	 	Revenue	 	 	Price	 	 	Delivered	 	 	Revenue	 	 	Price	 	 	Delivered	 	 	Revenue	 	 	Price	 	
Maracay Homes	 	 	115	 	 	$	45,437	 	 	$	395	 	 	 	85	 	 	$	32,477	 	 	$	382	 	 	 	35	%	 	 	40	%	 	 	3	%	
Pardee Homes	 	 	208	 	 	 	118,933	 	 	 	572	 	 	 	168	 	 	 	85,658	 	 	 	510	 	 	 	24	%	 	 	39	%	 	 	12	%	
Quadrant Homes	 	 	92	 	 	 	45,478	 	 	 	494	 	 	 	93	 	 	 	43,336	 	 	 	466	 	 	 	(1	)%	 	 	5	%	 	 	6	%	
Trendmaker Homes	 	 	88	 	 	 	43,786	 	 	 	498	 	 	 	108	 	 	 	56,208	 	 	 	520	 	 	 	(19	)%	 	 	(22	)%	 	 	(4	)%	
TRI Pointe Homes	 	 	201	 	 	 	131,957	 	 	 	657	 	 	 	139	 	 	 	106,858	 	 	 	769	 	 	 	45	%	 	 	23	%	 	 	(15	)%	
Winchester Homes	 	 	67	 	 	 	37,464	 	 	 	559	 	 	 	75	 	 	 	49,728	 	 	 	663	 	 	 	(11	)%	 	 	(25	)%	 	 	(16	)%	
Total	 	 	771	 	 	$	423,055	 	 	$	549	 	 	 	668	 	 	$	374,265	 	 	$	560	 	 	 	15	%	 	 	13	%	 	 	(2	)%	
 
Home sales revenue increased $48.8 million, or 13%, to $423.1 million for the three months ended March 31, 2016 from $374.3 million for the prior year period. The increase was comprised of: (i) $57.7 million related to a 15% increase in homes delivered to 771 for the three months ended March 31, 2016 from 668 in the prior year period; and (ii) offset by a decline of $8.9 million due to a decrease in average sales price of $11,000 per home to $549,000 for the three months ended March 31, 2016 from $560,000 in the prior year period.  The decrease in average sales prices at TRI Pointe Homes was due to a lower mix of deliveries from coastal California markets and higher mix of attached product.  The increase in average sales prices at Pardee Homes was due to a higher mix of coastal deliveries in California.  
 
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Homebuilding Gross Margins (dollars in thousands)
 
 	 	Three Months Ended March 31,	 	
 	 	2016	 	 	%	 	 	2015	 	 	%	 	
Home sales revenue	 	$	423,055	 	 	 	100.0	%	 	$	374,265	 	 	 	100.0	%	
Cost of home sales	 	 	324,499	 	 	 	76.7	%	 	 	299,907	 	 	 	80.1	%	
Homebuilding gross margin	 	 	98,556	 	 	 	23.3	%	 	 	74,358	 	 	 	19.9	%	
Add:  interest in cost of home sales	 	 	8,830	 	 	 	2.1	%	 	 	6,711	 	 	 	1.8	%	
Add:  impairments and lot option abandonments	 	 	182	 	 	 	0.0	%	 	 	345	 	 	 	0.1	%	
Adjusted homebuilding gross margin (1)	 	$	107,568	 	 	 	25.4	%	 	$	81,414	 	 	 	21.8	%	
Homebuilding gross margin percentage	 	 	23.3	%	 	 	 	 	 	 	19.9	%	 	 	 	 	
Adjusted homebuilding gross margin percentage (1)	 	 	25.4	%	 	 	 	 	 	 	21.8	%	 	 	 	 	
__________
(1)	Non-GAAP financial measure (as discussed below).	
Our homebuilding gross margin percentage increased to 23.3% for the three months ended March 31, 2016 as compared to 19.9% for the prior year period and increased sequentially from 22.2% during the fourth quarter of 2015.  The increase in gross margin was primarily due to the 24% increase in deliveries from Pardee Homes, which carries a lower land basis in some of its longer-term land holdings.  Excluding interest and impairment and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 25.4% for the three months ended March 31, 2016, compared to 21.8% for the prior year period. The increase in the adjusted homebuilding gross margin was consistent with the change in homebuilding gross margin.
Adjusted homebuilding gross margin is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that leverage and noncash charges have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion. Because adjusted homebuilding gross margin is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.  See the table above reconciling this non-GAAP financial measure to homebuilding gross margin, the nearest GAAP equivalent.
Sales and Marketing, General and Administrative Expense (dollars in thousands)
 
 	 	Three Months Ended	 	 	As a Percentage of	 	
 	 	March 31,	 	 	Home Sales Revenue	 	
 	 	2016	 	 	2015	 	 	2016	 	 	2015	 	
Sales and marketing	 	$	26,321	 	 	$	23,286	 	 	 	6.2	%	 	 	6.2	%	
General and administrative (G&A)	 	 	28,396	 	 	 	28,153	 	 	 	6.7	%	 	 	7.5	%	
Total sales and marketing and G&A	 	$	54,717	 	 	$	51,439	 	 	 	12.9	%	 	 	13.7	%	
 
Sales and marketing expense as a percentage of home sales revenue remained steady at 6.2% for each of the three month periods ended March 31, 2016 and 2015, respectively.  Total sales and marketing expense increased by $3.0 million to $26.3 million for the three months ended March 31, 2016 compared to $23.3 million in the same prior year period, and is primarily attributable to direct selling costs related to the 15% increase in new home deliveries.
General and administrative expenses as a percentage of home sales revenue decreased to 6.7% of home sales revenue for the three months ended March 31, 2016 compared to 7.5% for the prior year period.  The decrease is due primarily to higher operating leverage resulting from increased home sales revenue. General and administrative expenses remained relatively flat at $28.4 million for the three months ended March 31, 2016 compared to $28.2 million in the same prior year period.
Total sales and marketing and G&A (“SG&A”) as a percentage of home sales revenue decreased to 12.9% for the three month period ended March 31, 2016 compared to 13.7% in the prior year period, due primarily to higher home sales revenue in the current year period.  Total SG&A expense increased $3.3 million, or 6.4%, to $54.7 million for the three months ended March 31, 2016 from $51.4 million in the prior year period.  
Restructuring Charges
Restructuring charges decreased to $135,000 for the three months ended March 31, 2016 compared to $222,000 in the same period in the prior year.  The decrease was mainly due to higher severance costs in 2015.
 
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Interest
Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $15.1 million and $15.2 million for the three months ended March 31, 2016 and 2015, respectively.  All interest incurred in both periods was capitalized.  The slight decrease in interest incurred during the three months ended March 31, 2016 as compared to the prior year period was primarily attributable to a decrease in the weighted average interest rate for the unsecured revolving credit facility debt as of March 31, 2016 compared to March 31, 2015, along with the decrease in seller financed loans outstanding as of March 31, 2016 compared to March 31, 2015.
Income Tax
For the three months ended March 31, 2016, we recorded a tax provision of $15.5 million based on an effective tax rate of 35.0%.  For the three months ended March 31, 2015, we recorded a tax provision of $7.8 million based on an effective tax rate of 33.8%. The increase in provision for income taxes is due to an increase in income before taxes of $21.1 million to $44.2 million for the three months ended March 31, 2016 compared to $23.1 million for the prior year period.
 
Lots Owned or Controlled by Segment
Excluded from owned and controlled lots are those related to Note 7, Investments in Unconsolidated Entities .  The table below summarizes our lots owned or controlled by segment as of the dates presented:
 
 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	March 31,	 	 	(Decrease)	 	
 	 	 	2016	 	 	 	2015	 	 	Amount	 	 	%	 	
Lots Owned	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	 	 	1,476	 	 	 	1,249	 	 	 	227	 	 	 	18	%	
Pardee Homes	 	 	16,296	 	 	 	17,263	 	 	 	(967	)	 	 	(6	)%	
Quadrant Homes	 	 	1,082	 	 	 	938	 	 	 	144	 	 	 	15	%	
Trendmaker Homes	 	 	1,388	 	 	 	896	 	 	 	492	 	 	 	55	%	
TRI Pointe Homes	 	 	2,865	 	 	 	3,067	 	 	 	(202	)	 	 	(7	)%	
Winchester Homes	 	 	1,920	 	 	 	2,337	 	 	 	(417	)	 	 	(18	)%	
Total	 	 	25,027	 	 	 	25,750	 	 	 	(723	)	 	 	(3	)%	
Lots Controlled (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Maracay Homes	 	 	804	 	 	 	937	 	 	 	(133	)	 	 	(14	)%	
Pardee Homes	 	 	161	 	 	 	34	 	 	 	127	 	 	 	374	%	
Quadrant Homes	 	 	428	 	 	 	559	 	 	 	(131	)	 	 	(23	)%	
Trendmaker Homes	 	 	389	 	 	 	1,084	 	 	 	(695	)	 	 	(64	)%	
TRI Pointe Homes	 	 	760	 	 	 	616	 	 	 	144	 	 	 	23	%	
Winchester Homes	 	 	360	 	 	 	338	 	 	 	22	 	 	 	7	%	
Total	 	 	2,902	 	 	 	3,568	 	 	 	(666	)	 	 	(19	)%	
Total Lots Owned or Controlled (1)	 	 	27,929	 	 	 	29,318	 	 	 	(1,389	)	 	 	(5	)%	
__________
(1)	As of March 31, 2016 and 2015 lots controlled included lots that were under land option contracts or purchase contracts.	

Liquidity and Capital Resources
Overview
Our principal uses of capital for the three months ended March 31, 2016 were operating expenses, land purchases, land development and home construction. We used funds generated by our operations and available borrowings to meet our short-term working capital requirements. We remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth. As of March 31, 2016, we had $144.0 million of cash and cash equivalents. We believe we have sufficient cash and sources of financing to fund operations for at least the next twelve months.
 
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Our board of directors will consider a number of factors when evaluating our level of indebtedness and when making decisions regarding the incurrence of new indebtedness, including the purchase price of assets to be acquired with debt financing, the estimated market value of our assets and the ability of particular assets, and our company as a whole, t o generate cash flow to cover the expected debt service. Our charter does not contain a limitation on the amount of debt we may incur and our board of directors may change our target debt levels at any time without the approval of our stockholders.
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 (“2019 Notes”) and $450 million aggregate principal amount of its 5.875% Senior Notes due 2024 (“2024 Notes” and together with the 2019 Notes, 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 $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 $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 $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 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 March 31, 2016, no principal has been paid on the Senior Notes, and there was $19.5 million of capitalized debt financing costs related to the Senior Notes, included in senior notes on our consolidated balance sheet. These costs will amortize over the respective lives of the Senior Notes.
Unsecured Revolving Credit Facility
In May 2015, the Company amended its unsecured revolving credit facility (the “Credit Facility”) from $425 million to $550 million.  The Credit Facility matures on May 18, 2019, 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. The Credit Facility contains customary affirmative and negative covenants, including financial covenants relating to consolidated tangible net worth, leverage, and liquidity or interest coverage. Interest rates on borrowings will be based on either a daily Eurocurrency base rate or a Eurocurrency rate, in either case, plus a spread ranging from 1.45% to 2.20% depending on the Company’s leverage ratio.
As of March 31, 2016, the outstanding balance under the Credit Facility was $374.4 million with an interest rate 2.13% per annum and $170.3 million of availability after considering the borrowing base provisions and outstanding letters of credit.  At March 31, 2016 we had outstanding letters of credit of $5.3 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.
Stock Repurchase Program
On January 27, 2016, we announced that our board of directors approved a stock repurchase program, authorizing the repurchase of our common stock with an aggregate value of up to $100 million through January 25, 2017.  Purchases of common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.  As of March 31, 2016, no shares have been repurchased under this program.  We are not obligated under the program to repurchase any specific number of shares, and we may modify, suspend or discontinue the program at any time.  Our management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements.  

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Covenant Compliance
Under our Credit Facility, we are required to comply with certain financial covenants, including, but not limited to, those set forth in the table below (dollars in thousands):
 
 	 	 	 	 	 	Covenant	 	
 	 	Actual at	 	 	Requirement at	 	
 	 	March 31,	 	 	March 31,	 	
Financial Covenants	 	2016	 	 	2016	 	
Consolidated Tangible Net Worth	 	$	1,532,862	 	 	$	985,242	 	
(Not less than $875.9 million plus 50% of net income and
   50% of the net proceeds from equity offerings after
   March 31, 2015)	 	 	 	 	 	 	 	 	
Leverage Test	 	 	42.4	%	 	<55%	 	
(Not to exceed 55%)	 	 	 	 	 	 	 	 	
Interest Coverage Test	 	 	6.8	 	 	>1.5	 	
(Not less than 1.5:1.0)	 	 	 	 	 	 	 	 	
 
As of March 31, 2016, we were in compliance with all of these financial covenants.
Leverage Ratios
We believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management. The ratio of debt-to-capital and the ratio of net debt-to-capital are calculated as follows (dollars in thousands):  
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
Unsecured revolving credit facility	 	$	374,392	 	 	$	299,392	 	
Seller financed loans	 	 	—	 	 	 	2,434	 	
Senior Notes	 	 	869,939	 	 	 	868,679	 	
Total debt	 	 	1,244,331	 	 	 	1,170,505	 	
Stockholders’ equity	 	 	1,694,757	 	 	 	1,664,683	 	
Total capital	 	$	2,939,088	 	 	$	2,835,188	 	
Ratio of debt-to-capital (1)	 	 	42.3	%	 	 	41.3	%	
 	 	 	 	 	 	 	 	 	
Total debt	 	$	1,244,331	 	 	$	1,170,505	 	
Less: Cash and cash equivalents	 	 	(144,019	)	 	 	(214,485	)	
Net debt	 	 	1,100,312	 	 	 	956,020	 	
Stockholders’ equity	 	 	1,694,757	 	 	 	1,664,683	 	
Total capital	 	$	2,795,069	 	 	$	2,620,703	 	
Ratio of net debt-to-capital (2)	 	 	39.4	%	 	 	36.5	%	
__________
(1)	The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of total debt plus equity.	
(2)	The ratio of net debt-to-capital is a non-GAAP measure and is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents) by the sum of net debt plus equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. See the table above reconciling this non-GAAP financial measure to the ratio of debt-to-capital.  Because the ratio of net debt-to-capital is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.	
 
- 36 -

Cash Flows—Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015
For the three months ended March 31, 2016 as compared to the three months ended March 31, 2015, the comparison of cash flows is as follows:
 	·	Net cash used in operating activities increased by $31.4 million to $139.7 million for the three months ended March 31, 2016 from $108.4 million for the three months ended March 31, 2015. The change was comprised of offsetting activity, including (i) an increase in real estate inventories of $180.5 million in 2016 compared to an increase of $127.3 million in 2015 to support our community count growth and (ii) other offsetting activity included changes in other assets, accounts payable, accrued expenses, and net income.	
 	·	Net cash used in investing activities was $424,000 for the three months ended March 31, 2016 compared to $1.4 million for the same prior year period in 2015.  The decrease in cash used in investing activities was due to lower new investments in unconsolidated entities.	
 	·	Net cash provided by financing activities increased to $69.6 million for the three months ending March 31, 2016 from $45.6 million for the same period in the prior year. The change was primarily a result of borrowings from debt of $75.0 million in the current period compared to $50.0 million in the prior year period.	
As of March 31, 2016, our cash and cash equivalents balance was $144.0 million.
Off-Balance Sheet Arrangements and Contractual Obligations
In the ordinary course of business, we enter into land and lot 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 March 31, 2016, we had $30.7 million of cash deposits, the majority of which are non-refundable, pertaining to land option contracts and purchase contracts with an aggregate remaining purchase price of $380.7 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 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.
As of March 31, 2016 we had $170.3 million of availability under our Credit Facility after considering the borrowing base provisions and outstanding letters of credit.
Inflation
Our operations can be adversely impacted by inflation, primarily from higher land, financing, labor, material and construction costs.  In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers.  While we attempt to pass on cost increases to customers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.  In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers.
Seasonality
Historically, the homebuilding industry experiences seasonal fluctuations in quarterly operating results and capital requirements.  We typically experience the highest new home order activity during the first and second quarters of our fiscal year, although this activity is also highly dependent on the number of active selling communities, timing of new community openings and other market factors.  Since it typically takes three to nine months to construct a new home, the number of homes delivered and associated home sales revenue typically increases in the third and fourth quarters of our fiscal year as new home orders sold earlier in the year convert to home deliveries.  Because of this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters of our fiscal year, and the majority of cash receipts from home deliveries occur during the second half of the year.  We expect this seasonal pattern to continue over the long-term, although it may be affected by volatility in the homebuilding industry.

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Description of Projects and Communities under Development
The following table presents project information relating to each of our markets as of March 31, 2016 and includes information on current projects under development where we are building and selling homes.
Maracay Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Phoenix, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Town of Buckeye:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Verrado Tilden	 	2012	 	 	102	 	 	 	96	 	 	 	6	 	 	 	4	 	 	 	2	 	 	$239 - $304	
Verrado Palisades	 	2015	 	 	63	 	 	 	17	 	 	 	46	 	 	 	3	 	 	 	1	 	 	$305 - $378	
Verrado Victory	 	2015	 	 	98	 	 	 	20	 	 	 	78	 	 	 	5	 	 	 	3	 	 	$368 - $381	
City of Chandler:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Artesian Ranch	 	2013	 	 	90	 	 	 	69	 	 	 	21	 	 	 	17	 	 	 	12	 	 	$344 - $400	
Vaquero Ranch	 	2013	 	 	74	 	 	 	70	 	 	 	4	 	 	 	4	 	 	 	3	 	 	$298 - $373	
Maracay at Layton Lakes	 	2015	 	 	47	 	 	 	22	 	 	 	25	 	 	 	21	 	 	 	11	 	 	$484 - $524	
Sendera Place	 	2015	 	 	49	 	 	 	20	 	 	 	29	 	 	 	17	 	 	 	8	 	 	$264 - $311	
Chandler Heights	 	2017	 	 	84	 	 	 	—	 	 	 	84	 	 	 	—	 	 	 	—	 	 	$467 - $500	
Town of Gilbert:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Arch Crossing at Bridges of Gilbert	 	2014	 	 	67	 	 	 	63	 	 	 	4	 	 	 	3	 	 	 	3	 	 	$283 - $341	
Trestle Place at Bridges of Gilbert	 	2014	 	 	73	 	 	 	69	 	 	 	4	 	 	 	3	 	 	 	6	 	 	$344 - $424	
Artisan at Morrison Ranch	 	2016	 	 	105	 	 	 	—	 	 	 	105	 	 	 	18	 	 	 	—	 	 	$302 - $354	
Marquis at Morrison Ranch	 	2016	 	 	66	 	 	 	—	 	 	 	66	 	 	 	23	 	 	 	—	 	 	$393 - $477	
City of Goodyear:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Calderra at Palm Valley	 	2013	 	 	81	 	 	 	81	 	 	 	—	 	 	 	—	 	 	 	1	 	 	Closed	
City of Mesa:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Kinetic Point at Eastmark	 	2013	 	 	80	 	 	 	71	 	 	 	9	 	 	 	4	 	 	 	11	 	 	$273 - $353	
Lumiere Garden at Eastmark	 	2013	 	 	85	 	 	 	63	 	 	 	22	 	 	 	9	 	 	 	3	 	 	$318 - $398	
Aileron Square at Eastmark	 	2016	 	 	58	 	 	 	2	 	 	 	56	 	 	 	11	 	 	 	2	 	 	$318 - $398	
Curie Court at Eastmark	 	2016	 	 	106	 	 	 	3	 	 	 	103	 	 	 	15	 	 	 	3	 	 	$273 - $353	
Palladium Point	 	2016	 	 	53	 	 	 	—	 	 	 	53	 	 	 	—	 	 	 	—	 	 	$308 - $377	
Town of Peoria:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Reserve at Plaza del Rio	 	2013	 	 	162	 	 	 	94	 	 	 	68	 	 	 	22	 	 	 	7	 	 	$205 - $258	
Maracay at Northlands	 	2014	 	 	67	 	 	 	42	 	 	 	25	 	 	 	16	 	 	 	7	 	 	$319 - $400	
Meadows - 5500's	 	2016	 	 	80	 	 	 	—	 	 	 	80	 	 	 	—	 	 	 	—	 	 	$355 - $437	
Meadows - 6500's	 	2016	 	 	56	 	 	 	—	 	 	 	56	 	 	 	—	 	 	 	—	 	 	$417 - $535	
Meadows - Oversized	 	2016	 	 	37	 	 	 	—	 	 	 	37	 	 	 	—	 	 	 	—	 	 	$417 - $535	
Town of Queen Creek:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Preserve at Hastings Farms	 	2014	 	 	89	 	 	 	55	 	 	 	34	 	 	 	21	 	 	 	12	 	 	$298 - $383	
Villagio	 	2013	 	 	135	 	 	 	101	 	 	 	34	 	 	 	13	 	 	 	12	 	 	$283 - $345	
Phoenix, Arizona Total	 	 	 	 	2,007	 	 	 	958	 	 	 	1,049	 	 	 	229	 	 	 	107	 	 	 	
Tucson, Arizona	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marana:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tortolita Vistas	 	2014	 	 	55	 	 	 	26	 	 	 	29	 	 	 	8	 	 	 	2	 	 	$454 - $511	
Oro Valley:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rancho del Cobre	 	2014	 	 	68	 	 	 	48	 	 	 	20	 	 	 	4	 	 	 	5	 	 	$410 - $478	
Desert Crest - Center Pointe Vistoso	 	2016	 	 	103	 	 	 	—	 	 	 	103	 	 	 	6	 	 	 	—	 	 	$249 - $294	
The Cove - Center Pointe Vistoso	 	2016	 	 	83	 	 	 	—	 	 	 	83	 	 	 	5	 	 	 	—	 	 	$322 - $382	
Summit (South) - Center Pointe Vistoso	 	2016	 	 	88	 	 	 	—	 	 	 	88	 	 	 	16	 	 	 	—	 	 	$369 - $404	
The Pinnacle - Center Pointe Vistoso	 	2016	 	 	69	 	 	 	—	 	 	 	69	 	 	 	17	 	 	 	—	 	 	$422 - $455	
Tucson:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deseo at Sabino Canyon	 	2014	 	 	39	 	 	 	38	 	 	 	1	 	 	 	1	 	 	 	1	 	 	$419 - $505	
Ranches at Santa Catalina	 	2016	 	 	34	 	 	 	—	 	 	 	34	 	 	 	3	 	 	 	—	 	 	$404 - $474	
Tucson, Arizona Total	 	 	 	 	539	 	 	 	112	 	 	 	427	 	 	 	60	 	 	 	8	 	 	 	
Maracay Homes Total	 	 	 	 	2,546	 	 	 	1,070	 	 	 	1,476	 	 	 	289	 	 	 	115	 	 	 	

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Pardee Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
California	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
San Diego County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Alta Del Mar Homes	 	2013	 	 	117	 	 	 	85	 	 	 	32	 	 	 	23	 	 	 	5	 	 	$1,800 - $2,300	
Watermark	 	2013	 	 	160	 	 	 	141	 	 	 	19	 	 	 	19	 	 	 	10	 	 	$1,000 - $1,310	
Canterra	 	2015	 	 	89	 	 	 	33	 	 	 	56	 	 	 	23	 	 	 	8	 	 	$760 - $900	
Casabella	 	2015	 	 	122	 	 	 	42	 	 	 	80	 	 	 	27	 	 	 	20	 	 	$900 - $1,000	
Verana	 	2015	 	 	78	 	 	 	56	 	 	 	22	 	 	 	14	 	 	 	18	 	 	$990 - $1,100	
Pacific Highlands Ranch Future	 	TBD	 	 	963	 	 	 	—	 	 	 	963	 	 	 	—	 	 	 	—	 	 	TBD	
Olive Hill Estate	 	2016	 	 	37	 	 	 	—	 	 	 	37	 	 	 	6	 	 	 	—	 	 	$650 - $770	
Castlerock	 	TBD	 	 	415	 	 	 	—	 	 	 	415	 	 	 	—	 	 	 	—	 	 	$470 - $710	
Meadowood	 	TBD	 	 	844	 	 	 	—	 	 	 	844	 	 	 	—	 	 	 	—	 	 	$290 - $590	
Parkview Condos	 	2016	 	 	73	 	 	 	—	 	 	 	73	 	 	 	—	 	 	 	—	 	 	$430 - $480	
Ocean View HillsFuture	 	2017	 	 	913	 	 	 	—	 	 	 	913	 	 	 	—	 	 	 	—	 	 	TBD	
South Otay Mesa	 	TBD	 	 	893	 	 	 	—	 	 	 	893	 	 	 	—	 	 	 	—	 	 	$185 - $530	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Golden Valley	 	2017	 	 	498	 	 	 	—	 	 	 	498	 	 	 	—	 	 	 	—	 	 	$550 - $830	
Skyline Ranch	 	TBD	 	 	1,260	 	 	 	—	 	 	 	1,260	 	 	 	—	 	 	 	—	 	 	$510 - $640	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Meadow Ridge	 	2013	 	 	132	 	 	 	116	 	 	 	16	 	 	 	11	 	 	 	8	 	 	$370 - $470	
Meadow Glen	 	2014	 	 	142	 	 	 	105	 	 	 	37	 	 	 	10	 	 	 	16	 	 	$350 - $410	
Amberleaf	 	2014	 	 	131	 	 	 	100	 	 	 	31	 	 	 	26	 	 	 	14	 	 	$320 - $370	
Summerfield	 	2015	 	 	85	 	 	 	65	 	 	 	20	 	 	 	14	 	 	 	13	 	 	$310 - $320	
Senterra	 	2016	 	 	82	 	 	 	—	 	 	 	82	 	 	 	—	 	 	 	—	 	 	$360 - $460	
Canyon Hills Future	 	TBD	 	 	581	 	 	 	—	 	 	 	581	 	 	 	—	 	 	 	—	 	 	TBD	
Tournament Hills Future	 	TBD	 	 	268	 	 	 	—	 	 	 	268	 	 	 	—	 	 	 	—	 	 	TBD	
Woodmont	 	2014	 	 	84	 	 	 	77	 	 	 	7	 	 	 	6	 	 	 	9	 	 	$320 - $390	
Cielo	 	2015	 	 	92	 	 	 	87	 	 	 	5	 	 	 	5	 	 	 	9	 	 	$250 - $275	
Northstar	 	2015	 	 	123	 	 	 	30	 	 	 	93	 	 	 	10	 	 	 	12	 	 	$300 - $325	
Skycrest	 	2015	 	 	125	 	 	 	39	 	 	 	86	 	 	 	9	 	 	 	9	 	 	$360 - $380	
Flagstone	 	2016	 	 	79	 	 	 	—	 	 	 	79	 	 	 	11	 	 	 	—	 	 	$390 - $430	
Lunetta	 	2016	 	 	89	 	 	 	—	 	 	 	89	 	 	 	14	 	 	 	—	 	 	$270 - $290	
Sundance Future	 	TBD	 	 	1,435	 	 	 	—	 	 	 	1,435	 	 	 	—	 	 	 	—	 	 	TBD	
Banning	 	TBD	 	 	4,318	 	 	 	—	 	 	 	4,318	 	 	 	—	 	 	 	—	 	 	$170 - $250	
Sacramento County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natomas	 	TBD	 	 	120	 	 	 	—	 	 	 	120	 	 	 	—	 	 	 	—	 	 	TBD	
San Joaquin County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bear Creek	 	TBD	 	 	1,252	 	 	 	—	 	 	 	1,252	 	 	 	—	 	 	 	—	 	 	TBD	
California Total	 	 	 	 	15,600	 	 	 	976	 	 	 	14,624	 	 	 	228	 	 	 	151	 	 	 	
Nevada	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Clark County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LivingSmart at Eldorado Ridge	 	2012	 	 	169	 	 	 	166	 	 	 	3	 	 	 	2	 	 	 	6	 	 	$260 - $310	
LivingSmart at Eldorado Heights	 	2013	 	 	135	 	 	 	124	 	 	 	11	 	 	 	5	 	 	 	2	 	 	$310 - $395	
LivingSmart Sandstone	 	2013	 	 	145	 	 	 	104	 	 	 	41	 	 	 	28	 	 	 	14	 	 	$228 - $255	
North Peak	 	2015	 	 	150	 	 	 	11	 	 	 	139	 	 	 	13	 	 	 	5	 	 	$280 - $330	
Castle Rock	 	2015	 	 	150	 	 	 	12	 	 	 	138	 	 	 	20	 	 	 	8	 	 	$350 - $410	
Camino	 	2016	 	 	86	 	 	 	—	 	 	 	86	 	 	 	—	 	 	 	—	 	 	$240 - $262	
Eldorado Future	 	2016	 	 	59	 	 	 	—	 	 	 	59	 	 	 	—	 	 	 	—	 	 	TBD	
Solano	 	2014	 	 	132	 	 	 	67	 	 	 	65	 	 	 	17	 	 	 	6	 	 	$296 - $328	
Alterra	 	2014	 	 	47	 	 	 	27	 	 	 	20	 	 	 	8	 	 	 	2	 	 	$425 - $506	
Bella Verdi	 	2015	 	 	64	 	 	 	21	 	 	 	43	 	 	 	7	 	 	 	2	 	 	$373 - $440	
Escala	 	2016	 	 	78	 	 	 	—	 	 	 	78	 	 	 	3	 	 	 	—	 	 	$510 - $570	
Montero	 	2016	 	 	101	 	 	 	—	 	 	 	101	 	 	 	—	 	 	 	—	 	 	$430 - $475	
Responsive Home	 	2016	 	 	2	 	 	 	—	 	 	 	2	 	 	 	—	 	 	 	—	 	 	TBD	
POD 5-1 Future	 	2017	 	 	215	 	 	 	—	 	 	 	215	 	 	 	—	 	 	 	—	 	 	TBD	
Durango Ranch	 	2012	 	 	153	 	 	 	149	 	 	 	4	 	 	 	2	 	 	 	2	 	 	$467 - $560	
Durango Trail	 	2014	 	 	77	 	 	 	76	 	 	 	1	 	 	 	1	 	 	 	2	 	 	$380 - $410	
Meridian	 	2016	 	 	87	 	 	 	—	 	 	 	74	 	 	 	15	 	 	 	—	 	 	$580 - $677	
Encanto	 	2015	 	 	129	 	 	 	—	 	 	 	129	 	 	 	3	 	 	 	—	 	 	$470 - $525	
Horizon Terrace	 	2014	 	 	165	 	 	 	62	 	 	 	103	 	 	 	15	 	 	 	2	 	 	$400 - $455	
Summerglen	 	2014	 	 	140	 	 	 	74	 	 	 	66	 	 	 	12	 	 	 	6	 	 	$293 - $299	
Skye Canyon Large	 	2016	 	 	70	 	 	 	—	 	 	 	70	 	 	 	—	 	 	 	—	 	 	$430 - $460	
Skye Canyon Small	 	2017	 	 	120	 	 	 	—	 	 	 	120	 	 	 	—	 	 	 	—	 	 	$337 - $370	
The Canyons at MacDonald Ranch - CD	 	2017	 	 	82	 	 	 	—	 	 	 	82	 	 	 	—	 	 	 	—	 	 	$680 - $780	
The Canyons at MacDonald Ranch - R	 	2017	 	 	22	 	 	 	—	 	 	 	22	 	 	 	—	 	 	 	—	 	 	$535 - $565	
Nevada Total	 	 	 	 	2,578	 	 	 	893	 	 	 	1,672	 	 	 	151	 	 	 	57	 	 	 	
Pardee Homes Total	 	 	 	 	18,178	 	 	 	1,869	 	 	 	16,296	 	 	 	379	 	 	 	208	 	 	 	

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Quadrant Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Washington	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Skagit County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Skagit Highlands, Mt Vernon	 	2005	 	 	423	 	 	 	419	 	 	 	4	 	 	 	3	 	 	 	10	 	 	$260 - $291	
Skagit Clearwater Court, Mt Vernon	 	2016	 	 	11	 	 	 	—	 	 	 	11	 	 	 	11	 	 	 	—	 	 	$299 - $319	
Skagit Surplus Pod E, Mt Vernon	 	TBD	 	 	4	 	 	 	—	 	 	 	4	 	 	 	—	 	 	 	—	 	 	TBD	
Snohomish County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Kings Corner 1&2, Mill Creek	 	2014	 	 	116	 	 	 	113	 	 	 	3	 	 	 	2	 	 	 	14	 	 	$484 - $518	
King's Corner 3, Mill Creek	 	2016	 	 	29	 	 	 	—	 	 	 	29	 	 	 	26	 	 	 	—	 	 	$483 - $517	
Evergreen Heights, Monroe	 	2016	 	 	71	 	 	 	—	 	 	 	71	 	 	 	—	 	 	 	—	 	 	$450 - $515	
The Grove at Canyon Park, Bothell	 	2017	 	 	60	 	 	 	—	 	 	 	60	 	 	 	—	 	 	 	—	 	 	$558 - $658	
Greenstone Heights, Bothell	 	2017	 	 	41	 	 	 	—	 	 	 	41	 	 	 	—	 	 	 	—	 	 	$845 - $905	
King County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sonata Hill, Auburn	 	2014	 	 	71	 	 	 	46	 	 	 	25	 	 	 	18	 	 	 	9	 	 	$351 - $413	
The Gardens at Eastlake, Sammamish	 	2015	 	 	8	 	 	 	7	 	 	 	1	 	 	 	1	 	 	 	4	 	 	$971	
Heathers Ridge, Kirkland	 	2015	 	 	41	 	 	 	20	 	 	 	21	 	 	 	15	 	 	 	8	 	 	$663 - $945	
Hedgewood, Redmond	 	2015	 	 	11	 	 	 	6	 	 	 	5	 	 	 	2	 	 	 	3	 	 	$857 - $910	
Hedgewood East, Redmond	 	2016	 	 	15	 	 	 	—	 	 	 	15	 	 	 	13	 	 	 	—	 	 	$731 - $975	
Grasslawn Estates, Redmond	 	2016	 	 	4	 	 	 	1	 	 	 	3	 	 	 	—	 	 	 	1	 	 	$1,450 - $1,600	
Vintner's Place, Kirkland	 	2016	 	 	35	 	 	 	—	 	 	 	35	 	 	 	11	 	 	 	—	 	 	$727 - $832	
Copperwood, Renton	 	2016	 	 	46	 	 	 	—	 	 	 	46	 	 	 	5	 	 	 	—	 	 	$620 - $710	
Viscaia, Bellevue	 	2017	 	 	18	 	 	 	—	 	 	 	18	 	 	 	—	 	 	 	—	 	 	$617 - $672	
Trailside, Redmond	 	2017	 	 	9	 	 	 	—	 	 	 	9	 	 	 	—	 	 	 	—	 	 	$686 - $735	
Parkwood Terrace, Woodinville	 	2017	 	 	15	 	 	 	—	 	 	 	15	 	 	 	—	 	 	 	—	 	 	$680 - $750	
Hazelwood Ridge, Newcastle	 	2017	 	 	30	 	 	 	—	 	 	 	30	 	 	 	—	 	 	 	—	 	 	$605 - $790	
Inglewood Landing, Sammamish	 	2017	 	 	21	 	 	 	—	 	 	 	21	 	 	 	—	 	 	 	—	 	 	$880 - $962	
Jacobs Landing, Issaquah	 	2017	 	 	20	 	 	 	—	 	 	 	20	 	 	 	—	 	 	 	—	 	 	$834 - $929	
Kirkwood Terrace, Sammamish	 	2017	 	 	12	 	 	 	—	 	 	 	12	 	 	 	—	 	 	 	—	 	 	$1,200 - $1,500	
English Landing P2, Redmond	 	2017	 	 	25	 	 	 	—	 	 	 	25	 	 	 	—	 	 	 	—	 	 	$910 - $1,029	
English Landing P1, Redmond	 	2017	 	 	50	 	 	 	—	 	 	 	50	 	 	 	—	 	 	 	—	 	 	$910 - $1,029	
Heathers Ridge South, Redmond	 	2017	 	 	8	 	 	 	—	 	 	 	8	 	 	 	—	 	 	 	—	 	 	$590 - $890	
Cedar Landing, North Bend	 	2017	 	 	138	 	 	 	—	 	 	 	123	 	 	 	—	 	 	 	—	 	 	$500 - $650	
Monarch Ridge, Sammamish	 	2017	 	 	59	 	 	 	—	 	 	 	59	 	 	 	—	 	 	 	—	 	 	$761 - $961	
42nd Avenue Townhomes, Seattle	 	TBD	 	 	40	 	 	 	—	 	 	 	40	 	 	 	—	 	 	 	—	 	 	TBD	
Wynstone, Federal Way	 	TBD	 	 	4	 	 	 	—	 	 	 	4	 	 	 	—	 	 	 	—	 	 	TBD	
Pierce County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Harbor Hill S-9, Gig Harbor	 	2014	 	 	40	 	 	 	37	 	 	 	3	 	 	 	1	 	 	 	1	 	 	$379 - $466	
Harbor Hill S-8, Gig Harbor	 	2015	 	 	33	 	 	 	13	 	 	 	20	 	 	 	17	 	 	 	9	 	 	$379 - $466	
Harbor Hill S-7, Gig Harbor	 	2016	 	 	16	 	 	 	—	 	 	 	16	 	 	 	3	 	 	 	—	 	 	$409 - $470	
Chambers Ridge, Tacoma	 	2014	 	 	24	 	 	 	22	 	 	 	2	 	 	 	2	 	 	 	5	 	 	$507 - $630	
The Enclave at Harbor Hill, Gig Harbor	 	2016	 	 	33	 	 	 	3	 	 	 	30	 	 	 	7	 	 	 	3	 	 	$540 - $595	
Thurston County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Campus Fairways, Lacey	 	2015	 	 	39	 	 	 	17	 	 	 	22	 	 	 	7	 	 	 	4	 	 	$365 - $465	
Kitsap County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
McCormick Meadows, Port Orchard	 	2012	 	 	167	 	 	 	132	 	 	 	35	 	 	 	20	 	 	 	13	 	 	$278 - $357	
Vinland Pointe, Poulsbo	 	2013	 	 	90	 	 	 	89	 	 	 	1	 	 	 	1	 	 	 	7	 	 	$348	
Mountain Aire, Poulsbo	 	2016	 	 	145	 	 	 	—	 	 	 	145	 	 	 	19	 	 	 	—	 	 	$386 - $448	
Closed Communities	 	N/A	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1	 	 	N/A	
Washington Total	 	 	 	 	2,022	 	 	 	925	 	 	 	1,082	 	 	 	184	 	 	 	92	 	 	 	
Quadrant Homes Total	 	 	 	 	2,022	 	 	 	925	 	 	 	1,082	 	 	 	184	 	 	 	92	 	 	 	

- 40 -

Trendmaker Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Texas	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brazoria County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona Lakes, Pearland	 	2014	 	 	30	 	 	 	17	 	 	 	13	 	 	 	1	 	 	 	—	 	 	$431 - $506	
Southern Trails, Pearland	 	2014	 	 	40	 	 	 	32	 	 	 	8	 	 	 	4	 	 	 	3	 	 	$493 - $569	
Pomona, Manvel	 	2015	 	 	24	 	 	 	—	 	 	 	24	 	 	 	3	 	 	 	—	 	 	$379 - $476	
Rise Meridiana	 	2016	 	 	12	 	 	 	—	 	 	 	12	 	 	 	—	 	 	 	—	 	 	$319 - $355	
Fort Bend County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cross Creek Ranch 60', Fulshear	 	2013	 	 	53	 	 	 	32	 	 	 	21	 	 	 	—	 	 	 	2	 	 	$399 - $455	
Cross Creek Ranch 65', Fulshear	 	2013	 	 	52	 	 	 	23	 	 	 	29	 	 	 	2	 	 	 	2	 	 	$405 - $458	
Cross Creek Ranch 70', Fulshear	 	2013	 	 	56	 	 	 	39	 	 	 	17	 	 	 	6	 	 	 	2	 	 	$497 - $567	
Cross Creek Ranch 80', Fulshear	 	2013	 	 	29	 	 	 	11	 	 	 	18	 	 	 	5	 	 	 	2	 	 	$541 - $656	
Cross Creek Ranch 90', Fulshear	 	2013	 	 	25	 	 	 	13	 	 	 	12	 	 	 	2	 	 	 	1	 	 	$603 - $673	
Villas at Cross Creek Ranch, Fulshear	 	2013	 	 	101	 	 	 	94	 	 	 	7	 	 	 	3	 	 	 	3	 	 	$454 - $496	
Fulshear Run, Richmond	 	2016	 	 	1	 	 	 	—	 	 	 	1	 	 	 	1	 	 	 	—	 	 	$536 - $638	
Cinco Ranch, Katy	 	2015	 	 	55	 	 	 	55	 	 	 	—	 	 	 	—	 	 	 	1	 	 	$396 - $530	
Harvest Green 75', Richmond	 	2015	 	 	19	 	 	 	—	 	 	 	19	 	 	 	5	 	 	 	—	 	 	$438 - $517	
Sienna Plantation 80', Missouri City	 	2013	 	 	45	 	 	 	42	 	 	 	3	 	 	 	3	 	 	 	3	 	 	$542 - $650	
Sienna Plantation 85', Missouri City	 	2015	 	 	25	 	 	 	—	 	 	 	25	 	 	 	7	 	 	 	—	 	 	$531 - $650	
Villas at Sienna South, Missouri City	 	2015	 	 	19	 	 	 	—	 	 	 	19	 	 	 	2	 	 	 	—	 	 	$445 - $507	
Lakes of Bella Terra, Richmond	 	2013	 	 	109	 	 	 	82	 	 	 	27	 	 	 	5	 	 	 	2	 	 	$465 - $553	
Villas at Aliana, Richmond	 	2013	 	 	99	 	 	 	62	 	 	 	37	 	 	 	5	 	 	 	2	 	 	$409 - $503	
Riverstone 55', Sugar Land	 	2013	 	 	34	 	 	 	18	 	 	 	16	 	 	 	6	 	 	 	1	 	 	$403 - $460	
Riverstone 80', Sugar Land	 	2013	 	 	30	 	 	 	29	 	 	 	1	 	 	 	1	 	 	 	1	 	 	$559 - $710	
Riverstone Avanti at Avalon 100', Sugar Land	 	2015	 	 	5	 	 	 	1	 	 	 	4	 	 	 	2	 	 	 	—	 	 	$1,174 - $1,232	
The Townhomes at Imperial, Sugar Land	 	2015	 	 	27	 	 	 	27	 	 	 	—	 	 	 	—	 	 	 	7	 	 	$396 - $530	
Galveston County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Harborwalk, Hitchcock	 	2014	 	 	50	 	 	 	46	 	 	 	4	 	 	 	1	 	 	 	2	 	 	$587 - $645	
Harris County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fairfield, Cypress	 	2010	 	 	39	 	 	 	29	 	 	 	10	 	 	 	—	 	 	 	4	 	 	$474 - $573	
Lakes of Fairhaven, Cypress	 	2008	 	 	166	 	 	 	165	 	 	 	1	 	 	 	5	 	 	 	8	 	 	$409 - $505	
Towne Lake Living Views, Cypress	 	2013	 	 	122	 	 	 	104	 	 	 	18	 	 	 	3	 	 	 	—	 	 	$445 - $540	
The Groves, Humble	 	2015	 	 	31	 	 	 	16	 	 	 	15	 	 	 	10	 	 	 	2	 	 	$436 - $498	
Lakes of Creekside	 	2015	 	 	10	 	 	 	—	 	 	 	10	 	 	 	—	 	 	 	—	 	 	$549 - $648	
Bridgeland '80	 	2015	 	 	9	 	 	 	—	 	 	 	9	 	 	 	5	 	 	 	—	 	 	$487 - $569	
Hidden Arbor, Cypress	 	2015	 	 	84	 	 	 	—	 	 	 	84	 	 	 	13	 	 	 	—	 	 	$387 - $586	
Clear Lake, Houston	 	2015	 	 	752	 	 	 	91	 	 	 	661	 	 	 	31	 	 	 	13	 	 	$383 - $658	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Barton Woods, Conroe	 	2013	 	 	118	 	 	 	105	 	 	 	13	 	 	 	4	 	 	 	3	 	 	$425 - $623	
Villas at Oakhurst, Porter	 	 	 	 	55	 	 	 	53	 	 	 	2	 	 	 	2	 	 	 	3	 	 	$542 - $650	
Woodtrace, Woodtrace	 	2014	 	 	36	 	 	 	14	 	 	 	22	 	 	 	1	 	 	 	3	 	 	$450 - $499	
Northgrove, Tomball	 	2015	 	 	25	 	 	 	—	 	 	 	25	 	 	 	—	 	 	 	—	 	 	$498 - $557	
Bender's Landing Estates, Spring	 	2014	 	 	104	 	 	 	27	 	 	 	77	 	 	 	3	 	 	 	4	 	 	$457 - $567	
The Woodlands, Creekside Park	 	2015	 	 	35	 	 	 	1	 	 	 	34	 	 	 	—	 	 	 	1	 	 	$505 - $651	
Waller County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cane Island, Katy	 	2015	 	 	15	 	 	 	3	 	 	 	12	 	 	 	3	 	 	 	3	 	 	$537 - $647	
Williamson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Crystal Falls	 	TBD	 	 	29	 	 	 	—	 	 	 	29	 	 	 	—	 	 	 	—	 	 	$550	
Hays County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belterra, Austin	 	2016	 	 	20	 	 	 	—	 	 	 	20	 	 	 	—	 	 	 	—	 	 	$560 - $619	
Other:	 	 	 	 	 	 	 	 	—	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Avanti Custom Homes	 	2007	 	 	125	 	 	 	107	 	 	 	18	 	 	 	15	 	 	 	5	 	 	$480 - $856	
Texas Casual Cottages, Round Top	 	2010	 	 	88	 	 	 	79	 	 	 	9	 	 	 	9	 	 	 	5	 	 	$389 - $520	
Texas Casual Cottages, Hill Country	 	2012	 	 	46	 	 	 	44	 	 	 	2	 	 	 	2	 	 	 	—	 	 	$443 - $500	
Texas Total	 	 	 	 	2,849	 	 	 	1,461	 	 	 	1,388	 	 	 	170	 	 	 	88	 	 	 	
Trendmaker Homes Total	 	 	 	 	2,849	 	 	 	1,461	 	 	 	1,388	 	 	 	170	 	 	 	88	 	 	 	

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TRI Pointe Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Southern California	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Orange County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Arcadia, Irvine	 	2013	 	 	61	 	 	 	46	 	 	 	6	 	 	 	9	 	 	 	—	 	 	$1,199 - $1,420	
Arcadia II, Irvine	 	2014	 	 	66	 	 	 	62	 	 	 	4	 	 	 	2	 	 	 	8	 	 	$1,199 - $1,281	
Fairwind, Huntington Beach	 	2015	 	 	80	 	 	 	70	 	 	 	10	 	 	 	10	 	 	 	7	 	 	$937 - $1,032	
Cariz, Irvine	 	2014	 	 	112	 	 	 	112	 	 	 	—	 	 	 	—	 	 	 	18	 	 	$495 - $650	
Messina, Irvine	 	2014	 	 	59	 	 	 	43	 	 	 	7	 	 	 	6	 	 	 	5	 	 	$1,515 - $1,630	
Messina II, Irvine	 	2016	 	 	43	 	 	 	—	 	 	 	—	 	 	 	8	 	 	 	—	 	 	$1,500	
Aria-Rancho Mission Viejo	 	2016	 	 	87	 	 	 	7	 	 	 	80	 	 	 	14	 	 	 	4	 	 	$615 - $652	
Aria II-Rancho Mission Viejo	 	2017	 	 	64	 	 	 	—	 	 	 	64	 	 	 	—	 	 	 	—	 	 	$615 - $652	
Aubergine-Rancho Mission Viejo	 	2016	 	 	66	 	 	 	3	 	 	 	63	 	 	 	12	 	 	 	3	 	 	$1,005 - $1,115	
Aubergine II-Rancho Mission Viejo	 	2017	 	 	57	 	 	 	—	 	 	 	57	 	 	 	—	 	 	 	—	 	 	TBD	
Great Park 10-Pack Garden Court, Irvine	 	2017	 	 	74	 	 	 	—	 	 	 	74	 	 	 	—	 	 	 	—	 	 	TBD	
Great Park Row Townhomes, Irvine	 	2017	 	 	96	 	 	 	—	 	 	 	96	 	 	 	—	 	 	 	—	 	 	TBD	
Riverside County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Topazridge, Riverside	 	2012	 	 	68	 	 	 	65	 	 	 	3	 	 	 	2	 	 	 	2	 	 	$464 - $530	
Topazridge II, Riverside	 	2014	 	 	49	 	 	 	47	 	 	 	2	 	 	 	1	 	 	 	2	 	 	$459 - $515	
Aldea, Temecula	 	2014	 	 	90	 	 	 	90	 	 	 	—	 	 	 	—	 	 	 	13	 	 	$262 - $298	
Kite Ridge, Riverside	 	2014	 	 	87	 	 	 	25	 	 	 	62	 	 	 	11	 	 	 	7	 	 	$445 - $470	
Serrano Ridge at Sycamore Creek, Riverside	 	2015	 	 	87	 	 	 	9	 	 	 	78	 	 	 	14	 	 	 	5	 	 	$363 - $393	
Terrassa Courts, Corona	 	2015	 	 	94	 	 	 	—	 	 	 	94	 	 	 	3	 	 	 	—	 	 	$400 - $438	
Terrassa Villas, Corona	 	2015	 	 	52	 	 	 	—	 	 	 	52	 	 	 	2	 	 	 	—	 	 	$438 - $478	
Los Angeles County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Grayson, Santa Clarita	 	2015	 	 	119	 	 	 	13	 	 	 	106	 	 	 	10	 	 	 	7	 	 	$517 - $550	
San Bernardino County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sedona at Parkside, Ontario	 	2015	 	 	152	 	 	 	23	 	 	 	129	 	 	 	25	 	 	 	10	 	 	$346 - $381	
Kensington at Park Place, Ontario	 	2015	 	 	67	 	 	 	13	 	 	 	54	 	 	 	8	 	 	 	7	 	 	$486 - $509	
St. James at Park Place, Ontario	 	2015	 	 	57	 	 	 	19	 	 	 	38	 	 	 	14	 	 	 	2	 	 	$453 - $468	
Ventura County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The Westerlies, Oxnard	 	2015	 	 	116	 	 	 	—	 	 	 	116	 	 	 	3	 	 	 	—	 	 	$370 - $499	
Southern California Total	 	 	 	 	1,903	 	 	 	647	 	 	 	1,195	 	 	 	154	 	 	 	100	 	 	 	
Northern California	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contra Costa County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Berkshire at Barrington, Brentwood	 	2014	 	 	89	 	 	 	74	 	 	 	15	 	 	 	13	 	 	 	11	 	 	$506 - $553	
Hawthorne at Barrington, Brentwood	 	2014	 	 	105	 	 	 	67	 	 	 	38	 	 	 	12	 	 	 	9	 	 	$549 - $615	
Marquette at Barrington, Brentwood	 	2015	 	 	90	 	 	 	26	 	 	 	64	 	 	 	9	 	 	 	9	 	 	$480 - $715	
Wynstone at Barrington, Brentwood	 	2016	 	 	92	 	 	 	—	 	 	 	92	 	 	 	—	 	 	 	—	 	 	$450 - $550	
Penrose at Barrington, Brentwood	 	2016	 	 	34	 	 	 	—	 	 	 	34	 	 	 	—	 	 	 	—	 	 	$498 - $515	
Cobblestone, Milpitas	 	2015	 	 	32	 	 	 	31	 	 	 	1	 	 	 	—	 	 	 	9	 	 	$960 - $1,163	
Solano County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Redstone, Vacaville	 	2015	 	 	141	 	 	 	32	 	 	 	109	 	 	 	8	 	 	 	5	 	 	$455 - $527	
Green Valley-Lewis, Fairfield	 	2018	 	 	95	 	 	 	—	 	 	 	95	 	 	 	—	 	 	 	—	 	 	TBD	
Green Valley-Westgate, Fairfield	 	2018	 	 	53	 	 	 	—	 	 	 	53	 	 	 	—	 	 	 	—	 	 	TBD	
San Joaquin County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ventana, Tracy	 	2015	 	 	93	 	 	 	29	 	 	 	64	 	 	 	9	 	 	 	7	 	 	$438 - $540	
Sundance, Mountain House	 	2015	 	 	113	 	 	 	18	 	 	 	95	 	 	 	32	 	 	 	9	 	 	$555 - $635	
Alameda County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cadence, Alameda Landing	 	2015	 	 	91	 	 	 	42	 	 	 	49	 	 	 	7	 	 	 	4	 	 	$1,057 - $1,234	
Linear, Alameda Landing	 	2015	 	 	106	 	 	 	54	 	 	 	52	 	 	 	10	 	 	 	—	 	 	$685 - $915	
Symmetry, Alameda Landing	 	2016	 	 	56	 	 	 	—	 	 	 	56	 	 	 	9	 	 	 	—	 	 	$775 - $875	
Commercial, Alameda Landing	 	 	 	 	2	 	 	 	—	 	 	 	2	 	 	 	—	 	 	 	—	 	 	$620	
Parasol, Fremont	 	2016	 	 	39	 	 	 	—	 	 	 	39	 	 	 	—	 	 	 	—	 	 	$590 - $850	
Blackstone at the Cannery, Hayward SFA	 	2016	 	 	105	 	 	 	—	 	 	 	105	 	 	 	—	 	 	 	—	 	 	$530 - $600	
Blackstone at the Cannery, Hayward SFD	 	2016	 	 	52	 	 	 	—	 	 	 	52	 	 	 	2	 	 	 	—	 	 	$865 - $915	
Catalina Crossing, Livermore	 	2017	 	 	31	 	 	 	—	 	 	 	31	 	 	 	—	 	 	 	—	 	 	$865 - $915	
Jordan Ranch, Dublin	 	2017	 	 	56	 	 	 	—	 	 	 	56	 	 	 	—	 	 	 	—	 	 	$865 - $915	
Jordan Ranch, Dublin	 	2017	 	 	105	 	 	 	—	 	 	 	57	 	 	 	—	 	 	 	—	 	 	$865 - $915	
Mission Stevenson, Fremont	 	2018	 	 	77	 	 	 	—	 	 	 	77	 	 	 	—	 	 	 	—	 	 	 	
Northern California Total	 	 	 	 	1,657	 	 	 	373	 	 	 	1,236	 	 	 	111	 	 	 	63	 	 	 	
California Total	 	 	 	 	3,560	 	 	 	1,020	 	 	 	2,431	 	 	 	265	 	 	 	163	 	 	 	
Colorado	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Douglas County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Terrain 4000 Series, Castle Rock	 	2013	 	 	149	 	 	 	111	 	 	 	38	 	 	 	28	 	 	 	11	 	 	$345 - $398	
Terrain 3500 Series, Castle Rock	 	2015	 	 	67	 	 	 	47	 	 	 	20	 	 	 	15	 	 	 	10	 	 	$321 - $344	
Jefferson County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Leyden Rock 4000 Series, Arvada	 	2014	 	 	51	 	 	 	47	 	 	 	4	 	 	 	3	 	 	 	2	 	 	$385 - $441	
Leyden Rock 5000 Series, Arvada	 	2015	 	 	67	 	 	 	38	 	 	 	29	 	 	 	15	 	 	 	8	 	 	$454 - $509	
Candelas 6000 Series, Arvada	 	2015	 	 	76	 	 	 	7	 	 	 	69	 	 	 	10	 	 	 	1	 	 	$498 - $625	
Candelas 3500 Series, Arvada	 	2016	 	 	97	 	 	 	—	 	 	 	97	 	 	 	—	 	 	 	—	 	 	TBD	
Denver County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
- 42 -

 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Platt Park North, Denver	 	2014	 	 	29	 	 	 	29	 	 	 	—	 	 	 	—	 	 	 	1	 	 	$611 - $615	
Larimer County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Centerra 5000 Series, Loveland	 	2015	 	 	150	 	 	 	17	 	 	 	62	 	 	 	18	 	 	 	5	 	 	$394 - $426	
Arapahoe County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Whispering Pines, Aurora	 	2016	 	 	115	 	 	 	—	 	 	 	115	 	 	 	—	 	 	 	—	 	 	$518 - $600	
Colorado Total	 	 	 	 	801	 	 	 	296	 	 	 	434	 	 	 	89	 	 	 	38	 	 	 	
TRI Pointe Homes Total	 	 	 	 	4,361	 	 	 	1,316	 	 	 	2,865	 	 	 	354	 	 	 	201	 	 	 	

- 43 -

Winchester Homes
 
 	 	 	 	 	 	 	 	Cumulative	 	 	 	 	 	 	 	 	 	 	Homes Delivered	 	 	 	
 	 	 	 	 	 	 	 	Homes	 	 	Lots	 	 	 	 	 	 	for the Three	 	 	 	
 	 	Year of	 	Total	 	 	Delivered as of	 	 	Owned as of	 	 	Backlog as of	 	 	Months Ended	 	 	Sales Price	
 	 	First	 	Number of	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	March 31,	 	 	Range	
County, Project, City	 	Delivery (1)	 	Lots (2)	 	 	2016	 	 	2016 (3)	 	 	2016 (4)(5)	 	 	2016	 	 	(in thousands) (6)	
Maryland	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anne Arundel County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Watson's Glen, Millersville	 	2015	 	 	103	 	 	 	3	 	 	 	100	 	 	 	—	 	 	 	1	 	 	Closed	
Frederick County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Landsdale, Monrovia	 	 	 	 	—	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Landsdale Village SFD	 	2015	 	 	222	 	 	 	20	 	 	 	202	 	 	 	8	 	 	 	4	 	 	$495 - $635	
Landsdale Townhomes	 	2015	 	 	100	 	 	 	6	 	 	 	94	 	 	 	6	 	 	 	3	 	 	$335 - $375	
Landsdale TND Neo SFD	 	2015	 	 	77	 	 	 	3	 	 	 	74	 	 	 	5	 	 	 	3	 	 	$435 - $468	
Howard County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Walnut Creek, Ellicott City	 	2014	 	 	25	 	 	 	17	 	 	 	8	 	 	 	7	 	 	 	2	 	 	$1,182- $1,409	
Montgomery County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabin Branch, Clarksburg	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabin Branch SFD	 	2014	 	 	359	 	 	 	52	 	 	 	307	 	 	 	22	 	 	 	9	 	 	$480 - $668	
Cabin Branch Boulevard Townhomes	 	TBD	 	 	61	 	 	 	—	 	 	 	61	 	 	 	—	 	 	 	—	 	 	TBD	
Cabin Branch Townhomes	 	2014	 	 	567	 	 	 	70	 	 	 	497	 	 	 	17	 	 	 	7	 	 	$375 - $411	
Preserve at Stoney Spring-Lots for Sale	 	N/A	 	 	—	 	 	 	—	 	 	 	5	 	 	 	—	 	 	 	—	 	 	N/A	
Preserve at Rock Creek, Rockville	 	2012	 	 	68	 	 	 	65	 	 	 	3	 	 	 	—	 	 	 	2	 	 	$748 - $964	
Poplar Run, Silver Spring	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Poplar Run Townhomes	 	2013	 	 	136	 	 	 	129	 	 	 	7	 	 	 	7	 	 	 	11	 	 	$390 - $435	
Poplar Run SFD	 	2010	 	 	297	 	 	 	215	 	 	 	82	 	 	 	19	 	 	 	6	 	 	$567 - $766	
Poplar Run Single Family Neos	 	2016	 	 	29	 	 	 	—	 	 	 	29	 	 	 	2	 	 	 	—	 	 	$530 - $620	
Potomac Highlands, Potomac	 	2016	 	 	23	 	 	 	—	 	 	 	23	 	 	 	—	 	 	 	—	 	 	TBD	
Glenmont MetroCenter, Silver Spring	 	2016	 	 	89	 	 	 	—	 	 	 	89	 	 	 	—	 	 	 	—	 	 	TBD	
Closed Communities	 	N/A	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	
Maryland Total	 	 	 	 	2,156	 	 	 	580	 	 	 	1,581	 	 	 	93	 	 	 	48	 	 	 	
Virginia	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fairfax County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reserve at Waples Mill, Oakton	 	2013	 	 	28	 	 	 	27	 	 	 	1	 	 	 	1	 	 	 	2	 	 	$1,460	
Stuart Mill & Timber Lake, Oakton	 	2014	 	 	19	 	 	 	5	 	 	 	14	 	 	 	2	 	 	 	—	 	 	$1,363 - $1,675	
Prince William County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Villages of Piedmont, Haymarket	 	2015	 	 	168	 	 	 	21	 	 	 	147	 	 	 	9	 	 	 	4	 	 	$370 - $424	
Loudoun County:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Brambleton, Ashburn	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
English Manor Townhomes	 	2014	 	 	46	 	 	 	27	 	 	 	19	 	 	 	11	 	 	 	2	 	 	$495 - $540	
Glenmere at Brambleton SFD	 	2014	 	 	80	 	 	 	68	 	 	 	12	 	 	 	16	 	 	 	5	 	 	$650 - $733	
Glenmere at Brambleton Townhomes	 	2014	 	 	99	 	 	 	75	 	 	 	24	 	 	 	13	 	 	 	3	 	 	$470 - $474	
Vistas at Lansdowne, Lansdowne	 	2015	 	 	120	 	 	 	20	 	 	 	100	 	 	 	9	 	 	 	2	 	 	$569 - $670	
Willowsford Grant II, Aldie	 	2016	 	 	9	 	 	 	—	 	 	 	9	 	 	 	 	 	 	 	—	 	 	TBD	
Willowsford Greens, Aldie	 	2014	 	 	38	 	 	 	25	 	 	 	13	 	 	 	4	 	 	 	1	 	 	$760 - $840	
Closed Communities	 	N/A	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	
Virginia Total	 	 	 	 	607	 	 	 	268	 	 	 	339	 	 	 	65	 	 	 	19	 	 	 	
Winchester Homes Total	 	 	 	 	2,763	 	 	 	848	 	 	 	1,920	 	 	 	158	 	 	 	67	 	 	 	
TRI Pointe Group Total	 	 	 	 	32,694	 	 	 	7,464	 	 	 	25,027	 	 	 	1,534	 	 	 	771	 	 	 	
__________
(1)	Year of first delivery for future periods is based upon management’s estimates and is subject to change.	
(2)	The number of homes to be built at completion is subject to change, and there can be no assurance that we will build these homes.	
(3)	Owned lots as of March 31, 2016 include owned lots in backlog as of March 31, 2016.	
(4)	Backlog consists of homes under sales contracts that had not yet been delivered, and there can be no assurance that delivery of sold homes will occur.	
(5)	Of the total homes subject to pending sales contracts that have not been delivered as of March 31, 2016, 869 homes are under construction, 300 homes have completed construction, and 365 homes have not started construction.	
(6)	Sales price range reflects base price only and excludes any lot premium, buyer incentives and buyer-selected options, which may vary from project to project. Sales prices for homes required to be sold pursuant to affordable housing requirements are excluded from sales price range. Sales prices reflect current pricing and might not be indicative of past or future pricing.	
 
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Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements contained elsewhere in this report, which have been prepared in accordance with GAAP. Our notes to the unaudited condensed consolidated financial statement contained elsewhere in this report and the audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015 describe the significant accounting policies essential to our unaudited condensed consolidated financial statements. The preparation of our financial statements requires our management to make estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions that we have used are appropriate and correct based on information available at the time they were made. These estimates, judgments and assumptions can affect our reported assets and liabilities as of the date of the financial statements, as well as the reported revenues and expenses during the period presented. If there is a material difference between these estimates, judgments and assumptions and actual facts, our financial statements may be affected.
In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require our judgment in its application. There are areas in which our judgment in selecting among available alternatives would not produce a materially different result, but there are some areas in which our judgment in selecting among available alternatives would produce a materially different result. See the notes to the unaudited condensed consolidated financial statements that contain additional information regarding our accounting policies and other disclosures.
Recently Issued Accounting Standards
See Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies , to the accompanying condensed notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.
Related Party Transactions
See Note 17, Related Party Transactions to the accompanying condensed notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.
Item 3.	 Quantitative and Qualitative Disclosures about Market Risk	
We are exposed to market risks related to fluctuations in interest rates on our outstanding debt.  We did not utilize swaps, forward or option contracts on interest rates or commodities, or other types of derivative financial instruments as of or during the three months ended March 31, 2016. We have not entered into and currently do not hold derivatives for trading or speculative purposes. Many of the statements contained in this section are forward looking and should be read in conjunction with our disclosures under the heading “Cautionary Note Concerning Forward-Looking Statements.”
Item 4.	 Controls and Procedures	
We have established disclosure controls and procedures to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and accumulated and communicated to management, including the Chief Executive Officer (the “Principal Executive Officer”) and Chief Financial Officer (the “Principal Financial Officer”), as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of senior management, including our Principal Executive Officer and Principal Financial Officer, we evaluated our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2016.
Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated our internal control over financial reporting to determine whether any change occurred during the three months ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the three months ended March 31, 2016.

 
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PART II. OTHER INFORMATION
Item 1.	 Legal Proceedings	
Not applicable.
Item 1A.	 Ri  sk Factors	
The following supplements and updates the risk factors in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2015.  If any of the risks discussed below or in our Annual Report on Form 10-K occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline significantly and you could lose all or a part of your investment.  Some statements in this Quarterly Report on Form 10-Q, including statements in the following risk factor, constitute forward-looking statements.  Please refer to Part I, Item 2 of this Quarterly Report on Form 10-Q entitled “Cautionary Note Concerning Forward-Looking Statements.”
 Risks Related to Ownership of Our Common Stock
We cannot assure you that our stock repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.
Repurchases pursuant to our stock repurchase program described in Part II, Item 2 of this Quarterly Report on Form 10-Q could affect our stock price and increase its volatility and will reduce the market liquidity for our stock.   The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.   Additionally, these repurchases will diminish our cash reserves, which could impact our ability to pursue possible future strategic opportunities and acquisitions and would result in lower overall returns on our cash balances.  There can be no assurance that any stock repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value.  Although our stock repurchase program is intended to enhance long term stockholder value, short-term stock price fluctuations could reduce the effectiveness of these repurchases.
Item 2.	 Unregistered Sales of Equity Securities and Use of Proceeds	
On January 27, 2016, we announced that our board of directors approved a stock repurchase program, authorizing the repurchase of our common stock with an aggregate value of up to $100 million through January 25, 2017.  Purchases of common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Exchange Act.  As of March 31, 2016, no shares have been repurchased under this program.  We are not obligated under the program to repurchase any specific number of shares, and we may modify, suspend or discontinue the program at any time.  Our management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements.  
 
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Item 6.	Exhibits	
 
Exhibit
Number	 	Exhibit Description	
 	 	 	
2.1	 	Transaction Agreement, dated as of November 3, 2013, among TRI Pointe Homes, Inc., Weyerhaeuser Company, Weyerhaeuser Real Estate Company, and Topaz Acquisition, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 (filed Mar. 28, 2014))	
 	 	 	
2.2	 	Agreement and Plan of Merger to Form Holding Company, dated as of July 7, 2015, by and among TRI Pointe Homes, Inc., TRI Pointe Group, Inc. and TPG Merger, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (filed July 7, 2015))	
 	 	 	
3.1	 	Amended and Restated Certificate of Incorporation of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (filed July 7, 2015))	
 	 	 	
3.2	 	Amended and Restated Bylaws of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (filed July 7, 2015))	
 	 	 	
4.1	 	Specimen Common Stock Certificate of TRI Pointe Group, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed Dec. July 7, 2015))	
 	 	 	
4.2	 	Investor Rights Agreement, dated as of January 30, 2013, by and among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas J. Bauer, Thomas J. Mitchell and Michael D. Grubbs. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 (filed Jan. 9, 2014))	
 	 	 	
4.3	 	First Amendment to Investor Rights Agreement, dated as of November 3, 2013, by and among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas F. Bauer, Thomas J. Mitchell and Michael D. Grubbs (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K (filed Nov. 4, 2013))	
 	 	 	
4.4	 	Second Amendment to Investor Rights Agreement, dated as of July 7, 2015, among TRI Pointe Group, Inc., TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., BMG Homes, Inc., The Bauer Revocable Trust U/D/T Dated December 31, 2003, Grubbs Family Trust Dated June 22, 2012, The Mitchell Family Trust U/D/T Dated February 8, 2000, Douglas F. Bauer, Thomas J. Mitchell and Michael D. Grubbs (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8 ‑ K (filed July 7, 2015))	
 	 	 	
4.5	 	Registration Rights Agreement, dated as of January 30, 2013, among TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C., and certain TRI Pointe Homes, Inc. stockholders (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-4 (filed Jan. 9, 2014))	
 	 	 	
4.6	 	First Amendment to Registration Rights Agreement, dated as of July 7, 2015, among TRI Pointe Group, Inc., TRI Pointe Homes, Inc., VIII/TPC Holdings, L.L.C. and certain TRI Pointe Homes, Inc. stockholders (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8 ‑ K (filed July 7, 2015))	
 	 	 	
4.7	 	Indenture, dated as of June 13, 2014, by and among Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee (including form of 4.375% Senior Note due 2019) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed June 19, 2014))	
 	 	 	
4.8	 	First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed July 7, 2014))	
 	 	 	
4.9	 	Second Supplemental Indenture, dated as of July 7, 2014, among the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (filed July 7, 2014))	
 	 	 	
4.10	 	Third Supplemental Indenture, dated as of July 7, 2015, among TRI Point Group, Inc., TRI Pointe Homes, Inc. and U.S. Bank National Association, as trustee, relating to the 4.375% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8‑K (filed July 7, 2015))	
 	 	 	
4.11	 	Indenture, dated as of June 13, 2014, by and among Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee (including form of 5.875% Senior Note due 2024) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed June 19, 2014))	
 
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Exhibit
Number	 	Exhibit Description	
 	 	 	
4.12	 	First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed July 7, 2014))	
 	 	 	
4.13	 	Second Supplemental Indenture, dated as of July 7, 2014, among the guarantors party thereto and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (filed July 7, 2014))	
 	 	 	
4.14	 	Third Supplemental Indenture, dated as of July 7, 2015, among TRI Point Group, Inc., TRI Pointe Homes, Inc. and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8 ‑ K (filed July 7, 2015))	
 	 	 	
10.1*	 	Form of Performance-Based Cash Award Agreement. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (filed March 2, 2016))	
 	 	 	
10.2*	 	Form of Performance-Based Restricted Stock Unit Award Agreement (total shareholder return) (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (filed March 2, 2016))	
 	 	 	
10.3*	 	Form of Time-Vested Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K (filed March 2, 2016))	
 	 	 	
10.4*	 	Form of Severance and Change in Control Protection Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (filed March 2, 2016))	
 	 	 	
4.12	 	First Supplemental Indenture, dated as of July 7, 2014, among TRI Pointe Homes, Inc., Weyerhaeuser Real Estate Company and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed July 7, 2014))	

31.1	 	Chief Executive Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002	
 	 	 	
31.2	 	Chief Financial Officer Section 302 Certification of the Sarbanes-Oxley Act of 2002	
 	 	 	
32.1	 	Chief Executive Officer Section 906 Certification of the Sarbanes-Oxley Act of 2002	
 	 	 	
32.2	 	Chief Financial Officer Section 906 Certification of the Sarbanes-Oxley Act of 2002	
 	 	 	
101	 	The following materials from TRI Pointe Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statement of Cash Flows, and (v) Condensed Notes to Consolidated Financial Statement.	
*Management Contract or Compensatory Plan or Arrangement

 
- 48 -

 SIGNAT URES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 	 	TRI Pointe Group, Inc.	
 	 	 	 	 	
 	 	By:	 	/s/ Douglas F. Bauer	
 	 	 	 	Douglas F. Bauer	
 	 	 	 	Chief Executive Officer	
 	 	 	 	 	
 	 	By:	 	/s/ Michael D. Grubbs	
 	 	 	 	Michael D. Grubbs	
 	 	 	 	Chief Financial Officer	
Date: April 27, 2016

 
- 49 -

Exhibit 31.1
SECTION 302 CERTIFICATION
I, Douglas F. Bauer, certify that:
(1)	I have reviewed this report on Form 10-Q of TRI Pointe Group, Inc.;	
(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
(4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: April 27, 2016	 	/s/ Douglas F. Bauer	
 	 	Douglas F. Bauer	
 	 	Chief Executive Officer (Principal Executive Officer)	

Exhibit 31.2
SECTION 302 CERTIFICATION
I, Michael D. Grubbs, certify that:
(1)	I have reviewed this report on Form 10-Q of TRI Pointe Group, Inc.;	
(2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	
(3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	
(4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	
 	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	
 	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	
 	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 
Date: April 27, 2016	 	/s/ Michael D. Grubbs	
 	 	Michael D. Grubbs	
 	 	Chief Financial Officer (Principal Financial Officer)	

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Report of TRI Pointe Group, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Douglas F. Bauer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
 	1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 
Date: April 27, 2016	 	/s/ Douglas F. Bauer	
 	 	Douglas F. Bauer	
 	 	Chief Executive Officer (Principal Executive Officer)	

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Report of TRI Pointe Group, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael D. Grubbs, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
 	1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	
 
Date: April 27, 2016	 	/s/ Michael D. Grubbs	
 	 	Michael D. Grubbs	
 	 	Chief Financial Officer (Principal Financial Officer)