2016 Second Quarter Results€¦ · Home Sales Revenue –Q2 2016 Results 11 $427,238 $556,925 $0 $200,000 $400,000 $600,000 2015 2016 Home Sales Revenue For the quarters ended June

2016 Second Quarter ResultsMaracay Homes – Pardee Homes – Quadrant Homes – Trendmaker Homes – TRI Pointe Homes – Winchester Homes

Forward Looking Statement

Various statements contained in this presentation, including those that express a belief, expectation or intention, as well asthose that are not statements of historical fact, are forward-looking statements. These forward-looking statements may includeprojections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, financial condition, prospects, and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal,” “will,” or other words that convey future events or outcomes. The forward-looking statements in this presentation speak only as of the date of this presentation, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; global economic conditions; raw material prices; energy prices; the effect of weather; the risk of loss from earthquakes, volcanoes, 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; changes in accounting principles; our relationship, and actual and potential conflicts of interest, with Starwood Capital Group or its affiliates; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. This presentation includes certain non-GAAP financial metrics, including adjusted homebuilding gross margin and net debt-to-capital. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please refer to the Supplemental Data and Reconciliation section of this presentation for areconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.

Management Team

3

Michael GrubbsChief Financial Officer

• Over 25 years of real estate and homebuilding experience

• Former SVP / CFO of William Lyon Homes

Douglas BauerChief Executive Officer


• Former President and COO of William Lyon Homes

Thomas Mitchell President & COO


• Former EVP and Southern California Regional President at William Lyon Homes

Working together for over 20 years, TRI Pointe senior management has significant experience running a large, geographically diverse, growth-oriented public homebuilder. Deep managerial talent at each operating division with key local relationships supports dynamic tailored growth strategies.

A Family of Regional Homebuilders

A Family of Regional Homebuilders

LTM Orders: 4,156 LTM Deliveries: 4,356

LTM Home Sales (“HS”) Revenue: $2,469,741 LTM Average Sales Price (“ASP”): $567

Lots Owned or Controlled: 27,680 2018 Goal: 5,100 – 5,400 Annual Deliveries

Market: Greater Puget Sound AreaLTM Orders: 400 LTM Deliveries: 428LTM HS Revenue: $201,933 LTM ASP: $472Lots Owned or Controlled: 1,4162018 Goal: 400 Annual Deliveries

Markets: Los Angeles/Ventura, Inland Empire, San Diego, Las VegasLTM Orders: 1,176 LTM Deliveries: 1,246LTM HS Revenue: $707,806 LTM ASP: $568Lots Owned or Controlled: 16,3262018 Goal: 1,400 – 1,500 Annual Deliveries

Markets: Orange County, Los Angeles, San Diego, San Francisco Bay Area, DenverLTM Orders: 1,050 LTM Deliveries: 1,165LTM HS Revenue: $821,378 LTM ASP: $705Lots Owned or Controlled: 3,7302018 Goal: 1,400 – 1,550 Annual Deliveries

Markets: Phoenix, TucsonLTM Orders: 625 LTM Deliveries: 539LTM HS Revenue: $212,888 LTM ASP: $395Lots Owned or Controlled: 2,2292018 Goal: 700 Annual Deliveries

Markets: Houston, AustinLTM Orders: 456 LTM Deliveries: 522LTM HS Revenue: $261,813LTM ASP: $502Lots Owned or Controlled: 1,7832018 Goal: 700 – 750 Annual Deliveries

Markets: Washington DCLTM Orders: 449LTM Deliveries: 456LTM HS Revenue: $263,923 LTM ASP: $579Lots Owned or Controlled: 2,1962018 Goal: 500 Annual Deliveries

Data as of June 30, 2016Note: Dollars in thousands

2016 Second Quarter Highlights

2016 Second Quarter Highlights

• Strong absorption rate of over 3.5 new home orders per community per month

• New home deliveries up 25% to 994 with an average sales price of $560K

• Home sales revenue up 30% to $557MM

• Homebuilding gross margin of 22.3%

• Adj. homebuilding gross margin of 24.4% (1)

• Land and lot sales revenue of $67MM generating $53MM in profit

• SG&A expense improved to 11.3% of home sales revenue compared to 12.6% last year

• Net income available to common stockholders of $73.9M, or $0.46 per diluted share vs. $54.9M or $0.34 per diluted share Q2 2015

• Repurchased 1,253,021 shares for $14.7MM at an average price of $11.73 per share

6(1) See “Reconciliation of Non-GAAP Measures” in the appendix of this presentation

Metric 2Q 2016 2Q 2015 % Change

Orders 1,258 1,238 2%

Deliveries 994 798 25%

ASP ($000s) $560K $535K 5%

Backlog (units) 1,798 1,998 -10%

Home Sales

Revenue ($mm)$557 $427 30%

HB Gross Margin 22.3% 20.0% +230 bps

Land and Lot Sales

Revenue ($mm)$67 $67 0%

Land and Lot Sales

Profit ($mm)$53 $56 -5%

SG&A Expense

(% of sales)11.3% 12.6% -130 bps

EPS (Diluted) $0.46 $0.34 35.3%

Arizona15%

California28%

Maryland6%

Nevada10%

Colorado5%

Texas24%

Virginia6%

Washington6%

Active Selling Communities and Absorption Rate

7

122117

3.53.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

25

50

75

100

125

150

2015 2016

Communities Absorption Rate

Active Selling Communities and Absorption RateAs of and for the quarters ended June 30, 2015 and 2016

Communities by StateAs of June 30, 2016

Opened 10 new communities and closed 18 in 2Q16

De

cre

ase

4%

YO

Y

Arizona15%

California43%Maryland

6%

Nevada11%

Colorado3%

Texas11%

Virginia4%

Washington7%

New Home Orders – Q2 2016 Results

8

1,238 1,258

0

200

400

600

800

1,000

1,200

1,400

2015 2016

Incr

eas

e 2

% Y

OY

Second Quarter - New Home OrdersFor the quarters ended June 30, 2015 and 2016

Orders by StateFor the quarter ended June 30, 2016

Arizona15%

California44%Maryland

6%

Nevada7%

Colorado4%

Texas9%

Virginia5%

Washington10%

Backlog – Units and Dollar Value

9

Backlog – Units and Dollar ValueAs of June 30, 2015 and 2016 (dollars in thousands)

Dollar Value by StateAs of June 30, 2016

1,998

1,798

0

500

1,000

1,500

2,000

2,500

Units

$1,199,847

$1,026,219

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$ Value

2015

2016

$601K $571KAverage Sales Price

in Backlog

De

cre

ase

10

% Y

OY

De

cre

ase

14

% Y

OY

Arizona12%

California37%

Maryland7%

Nevada12%

Colorado5%

Texas13%

Virginia4%

Washington10%

New Home Deliveries – Q2 2016 Results

10

Deliveries by StateFor the quarter ended June 30, 2016

New Home DeliveriesAs of and for the quarters ended June30, 2015 and 2016

798

994

0

200

400

600

800

1,000

1,200

2015 2016

51% 65%Backlog Conversion Ratio

Incr

eas

e 2

5%

YO

Y

Arizona9%

California47%

Maryland6%

Nevada8%

Colorado4%

Texas11%

Virginia5%

Washington10%

Home Sales Revenue – Q2 2016 Results

11

$427,238

$556,925

$0

$200,000

$400,000

$600,000

2015 2016

Home Sales RevenueFor the quarters ended June 30, 2015 and 2016 (dollars in thousands)

Home Sales Revenue by StateFor the quarter ended June 30, 2016

$535K $560KAverage Sales Price of Deliveries

Incr

eas

e 3

0%

YO

Y

SG&A Expenses– Q2 2016 Results

12

$53,895

$62,717

$25,634

$32,448

$28,261$30,269

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

2015 2016

SG&A

S&M

G&A

Selling General and Administrative ExpensesFor the quarters ended June 30, 2015 and 2016

12.6% 11.3%SG&A as a % of Home Sales Revenue

Incr

eas

e 1

6%

YO

Y

$87,002

$116,106

$54,930

$75,339

$0.34

$0.46

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

2015 2016

Inc Before Taxes Net Income EPS

Income before Taxes, Net Income available to Common Stockholders and EPS (Diluted)For the quarters ended June 30, 2015 and 2016

Incr

eas

e 3

7%

YO

Y

Incr

eas

e 3

3%

YO

Y

Orders, Deliveries and Absorption Rate year over year comparisons for the Second Quarter 2016 by Segment

(Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)

184191

91

120

3.4

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

50

100

150

200

250

2Q15 2Q16Orders Deliveries Absorption

Orders, Deliveries and Absorption RateFor the quarters ended June 30, 2015 and 2016

2Q15 2Q16$369K $399KAverage Sales Price of Deliveries

14



Incr

eas

e 3

2%

YO

Y

Incr

eas

e 4

% Y

OY

116

9287

1053.6 3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

20

40

60

80

100

120

140


De

cre

ase

21

% Y

OY

Incr

eas

e 2

1%

YO

Y

124133

123 126

1.6 1.6

0.0

0.5

1.0

1.5

2.0

0

20

40

60

80

100

120

140

160

180

200



15




Incr

eas

e 7

% Y

OY

Incr

eas

e 2

% Y

OY

94

123

81

108

2.2

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

20

40

60

80

100

120

140


Incr

eas

e 3

3%

YO

Y

Incr

eas

e 3

1%

YO

Y

254

201

157

200

6.4

6.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0

50

100

150

200

250

300



16



2Q15 2Q16$394K $359K

Average Sales Price of Deliveries

California

De

cre

ase

21

% Y

OY

Incr

eas

e 2

7%

YO

Y

101

139

85

118

3.4

4.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

20

40

60

80

100

120

140

160


Nevada

Incr

eas

e 3

8%

YO

Y

Incr

eas

e 3

9%

YO

Y

305

346

130

167

5.0

4.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

50

100

150

200

250

300

350

400



17




California

Incr

eas

e 1

3%

YO

Y

Incr

eas

e 2

8%

YO

Y

Colorado

60

33

44

50

3.2

2.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

10

20

30

40

50

60

70

2Q15 2Q16

Orders Deliveries Absorption

Incr

eas

e 1

4%

YO

Y

De

cre

ase

45

% Y

OY

2016 Outlook

Third Quarter and Full Year 2016 Outlook

19

Third Quarter

• Anticipate opening 16 new communities and closing out of 12, resulting in 121 active selling communities as of September 30, 2016

• Anticipate delivering approximately 55% of the 1,798 homes in backlog as of June 30, 2016

• Anticipate homebuilding gross margins on deliveries in 3Q16 to be approximately 20.0%

Full Year 2016

• Expect to grow active selling communities by 20% for the full year

• Anticipate delivering between 4,200 and 4,400 homes at an average sales price of $550,000

• Anticipated homebuilding gross margins for the full year to a range of 20.5% to 21.5%

• Anticipate SG&A expenses as a percentage of home sales revenue to a range of 10.3% to 10.5%

See Forward Looking Statement disclosure on page 2 of the presentation

Land Supply

Orders by Month

Debt

Significant Land Supply to Fuel Growth

Combined Lot Position

Market Owned Controlled Total Lots % Owned Inventory Dollars LTM DeliveriesImplied Years of Supply (1)

California 16,888 392 17,280 98% $1,624,349 1,797 9.6

Colorado 505 331 836 60% $73,626 204 4.1

Washington, D.C. (2) 1,916 280 2,196 87% $261,793 456 4.8

Arizona 1,491 738 2,229 67% $225,280 539 4.1

Nevada 1,768 172 1,940 91% $233,878 410 4.7

Texas 1,321 462 1,783 74% $215,310 522 3.4

Washington 1,008 408 1,416 71% $205,977 428 3.3

Total 24,897 2,783 27,680 90% $2,840,213 4,356 6.4

As of June 30, 2016

California62%

Colorado3%

Washington, D.C. (2)8%

Arizona8%

Nevada7%

Texas7%

Washington5%

Total Lots

(1) Based on last twelve months’ deliveries as of June 30, 2016(2) Includes lots in the greater Washington D.C. area. Note: Dollars in thousands

California57%

Colorado3%

Washington, D.C. (1)9%

Arizona8%

Nevada8%

Texas8%

Washington7%

Inventory Dollars

21

New Home Orders – 2015 vs 2016 (through June)

22

324

415

455

410

457

371355

367

274

318

227208

322

409 418

477

425

356

0

50

100

150

200

250

300

350

400

450

500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2015

2016

2016 - 2.98 3.57 3.45 3.89 3.60 3.06

2015 - 2.96 3.67 3.91 3.47 3.82 3.05 2.91 2.97 2.29 2.76 1.98 1.92

Absorption Rate = Orders per Month per Community

Selected Balance Sheet Metrics

23

$450

$300

$450

$0

$100

$200

$300

$400

$500

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

4.375% Senior Notes 4.875% Senior Notes 5.875% Senior Notes

• During the second quarter, the Company increased its total commitments under our unsecured revolving credit facility to $625 million from $550 million. In addition, the Company issued $300 million aggregate principal amount of 4.875% Senior Notes due 2021.

$ in thousands 6/30/2016 12/31/2015

Cash and cash equivalents $ 117,509 $ 214,485

Real estate inventories $ 2,840,213 $ 2,519,273

Total Debt $ 1,282,872 $ 1,170,505

Total Stockholders' equity $ 1,757,301 $ 1,664,683

Debt-to-capitalNet debt-to-capital(1)

42.2%39.9%

41.3%36.5%

Selected Balance Sheet Metrics

Debt Maturities (in millions)

(1) See “Reconciliation of Non-GAAP Measures” in the Company’s press release

Supplemental Data and Reconciliation

Reconciliation of Non-GAAP Financial Measures(unaudited)

25

In this presentation, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated inaccordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

The following table reconciles homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.

Three Months Ended June 30,

2016 % 2015 %

(dollars in thousands)

Home sales revenue $ 556,925 100.0 % $ 427,238 100.0 %

Cost of home sales 432,738 77.7 % 341,742 80.0 %

Homebuilding gross margin 124,187 22.3 % 85,496 20.0 %

Add: interest in cost of home sales 11,438 2.1 % 7,640 1.8 %

Add: impairments and lot option abandonments 107 0.0 % 882 0.2 %

Adjusted homebuilding gross margin $ 135,732 24.4 % $ 94,018 22.0 %

Homebuilding gross margin percentage 22.3 % 20.0 %

Adjusted homebuilding gross margin percentage 24.4 % 22.0 %

Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited)

26

The following table reconciles the Company’s ratio of debt-to-capital to the ratio of net debt-to-capital. We believe that the ratio of net debt-to-capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.

June 30, 2016 December 31, 2015

Unsecured revolving credit facility $ 100,000 $ 299,392

Seller financed loans 17,758 2,434

Senior notes 1,165,114 868,679

Total debt 1,282,872 1,170,505

Stockholders’ equity 1,757,301 1,664,683

Total capital $ 3,040,173 $ 2,835,188

Ratio of debt-to-capital(1) 42.2 % 41.3 %

Total debt $ 1,282,872 $ 1,170,505

Less: Cash and cash equivalents (117,509 ) (214,485 )

Net debt 1,165,363 956,020

Stockholders’ equity 1,757,301 1,664,683

Total capital $ 2,922,664 $ 2,620,703

Ratio of net debt-to-capital(2) 39.9 % 36.5 %

__________ (1) The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity.

(2) The ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt (which is debt less cash and cash equivalents)

by the sum of net debt plus equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital.

Documents

2016 Second Quarter Results€¦ · Home Sales Revenue –Q2 2016 Results 11 $427,238 $556,925 $0 $200,000 $400,000 $600,000 2015 2016 Home Sales Revenue For the quarters ended June