2017 Fourth Quarter and Full Year Results · 2018. 4. 19. · 2017 Fourth Quarter Highlights • Absorption rate of 2.8 new home orders per community per month • New home deliveries

2017 Fourth Quarter and Full Year 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 include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements in this presentation are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “plan,” “goal,” “target,” “guidance,” “outlook,” “will,” “future,” “strategy,” or other words that convey future events or outcomes. 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 any restructuring and cost reduction initiatives; global economic conditions; raw material prices; oil and other energy prices; the effect of weather, including the re-occurrence of drought conditions in California; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; transportation costs; federal and state tax policies; the effect of land use, environment and other governmental regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our customers’ confidential information or other forms of cyber-attack; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. This presentation includes certain non-GAAP financial metrics, including adjusted homebuilding gross margin, and net debt-to-net 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 a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. Winchester is a registered trademark and is used with permission. 2

Management Team

3

Michael GrubbsChief Financial Officer• Over 30 years of real estate

and homebuilding experience

• Former SVP / CFO of William Lyon Homes

Douglas BauerChief Executive Officer• Over 30 years of real estate

and homebuilding experience

• Former President and COO of William Lyon Homes

Thomas Mitchell President & COO

• Over 30 years of real estate and homebuilding experience

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

Working together for over 25 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

2017 Orders: 5,075 2017 Deliveries: 4,6972017 Home Sales (“HS”) Revenue: $2,732,299 2017 Average Sales Price (“ASP”): $582 Lots Owned or Controlled: 27,312

Market: Seattle Metro Area2017 Orders: 395 2017 Deliveries: 3522017 HS Revenue: $245,507 2017 ASP: $697Lots Owned or Controlled: 1,726

Markets: Los Angeles, Inland Empire, San Diego, Las Vegas2017 Orders: 1,580 2017 Deliveries: 1,4312017 HS Revenue: $756,433 2017 ASP: $529Lots Owned or Controlled: 15,144

Markets: Orange County, Los Angeles, San Diego, San Francisco Bay Area, Sacramento, Denver2017 Orders: 1,492 2017 Deliveries: 1,3132017 HS Revenue: $927,247 2017 ASP: $706Lots Owned or Controlled: 3,964

Markets: Phoenix, Tucson2017 Orders: 597 2017 Deliveries: 6282017 HS Revenue: $296,768 2017 ASP: $473Lots Owned or Controlled: 2,519

Markets: Houston, Austin2017 Orders: 516 2017 Deliveries: 5062017 HS Revenue: $250,0332017 ASP: $494Lots Owned or Controlled: 1,855

Markets: Washington DC Metro Area2017 Orders: 4952017 Deliveries: 4672017 HS Revenue: $256,311 2017 ASP: $549Lots Owned or Controlled: 2,104

Data as of December 31, 2017Note: Dollars in thousands

2017 Fourth Quarter and Full Year Highlights

2017 Fourth Quarter Highlights

• Absorption rate of 2.8 new home orders per community per month

• New home deliveries up 23% to 1,757 with an average sales price of $639,000

• Backlog units (1) up 32% to 1,571 homes and backlog dollar value (1) up 56% to $1.0 billion

• Home sales revenue up 46% to $1.1 billion

• Homebuilding gross margin of 21.7%

• SG&A expense decreased 200 basis points to 7.2% of home sales revenue compared to 9.2%

• Net income available to common stockholders of $74.0 million, or $0.49 per diluted share vs. $57.9 million, or $0.36 per diluted share

• Adjusted net income available to common stockholders of $107.4 million, or $0.70 per diluted share (2)

6(1) Backlog units and dollar value figures are as of December 31, 2017 and 2016, respectively(2) See “Reconciliation of Non-GAAP Measures” in the appendix of this presentation

Metric 4Q17 4Q16 %

Orders 1,063 909 17%

Deliveries 1,757 1,427 23%

ASP of Home Deliveries ($000s) $639 $540 18%

Backlog (units) (1) 1,571 1,193 32%

Backlog (dollar value) ($000s) (1) $1,033 $661 56%

Home Sales Revenue ($mm) $1,123 $771 46%

HB Gross Margin 21.7% 20.0% +170 bps

Land and Lot Sales Revenue ($mm) $4.6 $2.1 123%

Land and Lot Sales Profit ($mm) $3.0 $1.7 80%

SG&A Expense (% of sales) 7.2% 9.2% -200 bps

EPS (Diluted) $0.49 $0.36 36%

Adjusted EPS (Diluted) (2) $0.70 $0.36 94%

4Q16

Metric4Q 20164Q 2015% Change

Orders90975321%

Deliveries1,4271,453-2%

ASP of Deliveries ($000s)$540$583-7%

Backlog (units) (2)1,1931,1563%

Home Sales Revenue ($mm)$771$847-9%

HB Gross Margin20.0%22.2%-220 bps

Land and Lot Sales Revenue ($mm)$2.1$26.9-92%

Land and Lot Sales Profit ($mm)$1.7$9.2-82%

SG&A Expense (% of sales)9.2%8.4%+80 bps

EPS (Diluted)$0.36$0.52-30.8%

QTR 4Q17

Metric4Q174Q16% Change

Orders1,06390917%

Deliveries1,7571,42723%

ASP of Home Deliveries ($000s)$639$54018%

Backlog (units) (1)1,5711,19332%

Backlog (dollar value) ($000s) (1)$1,033$66156%

Home Sales Revenue ($mm)$1,123$77146%

HB Gross Margin21.7%20.0%+170 bps

Land and Lot Sales Revenue ($mm)$4.6$2.1123%

Land and Lot Sales Profit ($mm)$3.0$1.780%

SG&A Expense (% of sales)7.2%9.2%-200 bps

EPS (Diluted)$0.49$0.3636%

Adjusted EPS (Diluted) (2)$0.70$0.3694%

FY 2017

Metric20172016% Change

Orders5,0754,24819%

Deliveries4,6974,21112%

ASP of Home Deliveries ($000s)$582$5535%

Backlog (units) (1)1,5711,19332%

Backlog (dollar value) ($000s) (1)$1,033$66156%

Home Sales Revenue ($mm)$2,732$2,32917%

HB Gross Margin20.5%21.2%-70 bps

Land and Lot Sales Revenue ($mm)$74.2$72.33%

Land and Lot Sales Profit ($mm)$59.4$54.98%

SG&A Expense (% of sales)10.1%10.8%-70 bps

EPS (Diluted)$1.21$1.210%

Adjusted EPS (Diluted) (2)$1.42$1.2117%

Sheet2

Source: Q4 company investor pres

Deliveries

Quarterly

Q1 2015668

Q1 2016771

Growth15.4%

Annual

FY 20143,100

FY 20154,057

Growth30.9%

Home Revenue

Quarterly

Q1 2015$374

Q1 2016$423

Growth13.0%

Annual

FY 2014$1,646

FY 2015$2,291

Growth39.2%

Deliveries by State

Quarterly

Arizona12%

California45%

Maryland6%

Nevada9%

Colorado5%

Texas10%

Virginia5%

Washington8%

Annual

Arizona12%

California40%

Maryland5%

Nevada9%

Colorado5%

Texas13%

Virginia6%

Washington10%

Active Selling Communities and Absorption Rate

Cohen, Nathan [ICG-CIB]: Cohen, Nathan [ICG-CIB]:From p7 of Q4 investor Pres

Quarterly

CommunititesAbsorption

Q1 20151082.25

Q1 20161042.23

Annual

CommunititesAbsorption

FY 2014

FY 2015

Backlog - Units and Dollar Value

Cohen, Nathan [ICG-CIB]: Cohen, Nathan [ICG-CIB]:P 10 of q4 investor pres

Quarterly

20142015

Units1,0321,156

Value$653$697

New Home Orderes

Cohen, Nathan [ICG-CIB]: Cohen, Nathan [ICG-CIB]:P 10 of q4 investor pres

Annual

FY 20142,947

FY 20154,181

Growth41.9%

Q1 2015Q1 2016668771

FY 2014FY 201531004057

Q4 2014Q4 2015622.96199999999999847.40899999999999

FY 2014FY 20151646.27399999999992291.2640000000001

ArizonaCaliforniaMarylandNevadaColoradoTexasVirginiaWashington12456951058

ArizonaCaliforniaMarylandNevadaColoradoTexasVirginiaWashington124059513610Communitites

Q4 2014Q4 2015108104Absorption

FY 2014FY 20152.252.23

2014

UnitsValue1032653.0962015

UnitsValue1156697.33399999999995

FY 2014FY 201529474181

2017 Full Year Highlights

• Absorption rate of 3.3 new home orders per community per month

• New home deliveries up 12% to 4,697 with an average sales price of $582,000

• Home sales revenue up 17% to $2.7 billion

• Homebuilding gross margin of 20.5%

• Land and lot sales revenue of $74.3 million generating $59.4 million in profit

• SG&A expense decreased 70 basis points to 10.1% of home sales revenue compared to 10.8%

• Net income available to common stockholders of $187.2 million, or $1.21 per diluted share vs. $195.2 million or $1.21 per diluted share

• Adjusted net income available to common stockholders of $220.6 million, or $1.42 per diluted share (2)

7(1) Backlog units and dollar value figures are as of December 31, 2017 and 2016, respectively(2) See “Reconciliation of Non-GAAP Measures” in the appendix of this presentation

Metric 2017 2016 %

Orders 5,075 4,248 19%

Deliveries 4,697 4,211 12%

ASP of Home Deliveries ($000s) $582 $553 5%

Backlog (units) (1) 1,571 1,193 32%

Backlog (dollar value) ($000s) (1) $1,033 $661 56%

Home Sales Revenue ($mm) $2,732 $2,329 17%

HB Gross Margin 20.5% 21.2% -70 bps

Land and Lot Sales Revenue ($mm) $74.3 $72.3 3%

Land and Lot Sales Profit ($mm) $59.4 $54.9 8%

SG&A Expense (% of sales) 10.1% 10.8% -70 bps

EPS (Diluted) $1.21 $1.21 0%

Adjusted EPS (Diluted) (2) $1.42 $1.21 17%

Arizona10%

California36%

Maryland8%

Nevada11%

Colorado5%

Texas22%

Virginia3%

Washington5%

Active Selling Communities and Absorption Rate Q4 2017 Results

8

124 130

2.5

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

20

40

60

80

100

120

140

2016 2017

Communities Absorption Rate

Active Selling Communities and Absorption RateAs of and for the quarters ended December 31, 2016 and 2017

Active Selling Communities by StateAs of December 31, 2017

Opened 14 new communities and closed 11 in Q4 2017

Incr

ease

5%

YO

Y

Arizona9%

California44%

Maryland9%

Nevada10%

Colorado6%

Texas12%

Virginia2%

Washington8%

New Home Orders – Q4 2017 Results

9

909

1,063

0

200

400

600

800

1,000

1,200

2016 2017

Incr

ease

17%

YO

Y

New Home OrdersFor the quarters ended December 31, 2016 and 2017

New Home Orders by StateFor the quarter ended December 31, 2017

Arizona10%

California48%

Maryland6%

Nevada7%

Colorado6%

Texas9%

Virginia3%

Washington11%

Backlog – Units and Dollar Value – Q4 2017 Results

10

Backlog – Units and Dollar ValueAs of December 31, 2016 and 2017 (dollars in thousands)

Backlog Dollar Value by StateAs of December 31, 2017

1,193

1,571

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Units

$661,146

$1,032,775

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$ Value

2016

2017

$554K $657KAverage Sales Price

in Backlog

Incr

ease

32%

YO

Y

Incr

ease

56%

YO

Y

Arizona10%

California47%

Maryland9%

Nevada10%

Colorado4%

Texas9%

Virginia3%

Washington8%

New Home Deliveries – Q4 2017 Results

11

New Home Deliveries by StateFor the quarter ended December 31, 2017

New Home DeliveriesAs of and for the quarters ended December 31, 2016 and 2017

1,427

1,757

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2016 2017

83% 78%Backlog Conversion Ratio

Incr

ease

23%

YO

Y

Arizona8%

California53%Maryland

7%

Nevada8%

Colorado4%

Texas7%

Virginia3%

Washington10%

Home Sales Revenue – Q4 2017 Results

12

$770,703

$1,122,841

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2016 2017

Home Sales RevenueFor the quarters ended December 31, 2016 and 2017 (dollars in thousands)

Home Sales Revenue by StateFor the quarter ended December 31, 2017

$540K $639KAverage Sales Price of Deliveries

Incr

ease

46%

YO

Y

SG&A Expenses, Income before Taxes and Net Income – Q4 2017 Results

13

$71,108

$81,328

$37,282

$44,857

$33,826$36,471

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

2016 2017

SG&A

S&M

G&A

Selling General and Administrative ExpensesFor the quarters ended December 31, 2016 and 2017 (dollars in thousands)

9.2% 7.2%SG&A as a % of Home Sales Revenue

Incr

ease

14%

YO

Y

$86,478

$156,685

$57,861

$74,020

$0.36

$0.49

$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

$160,000

$180,000

2016 2017Inc Before Taxes Net Income EPS

Income before Taxes, Net Income available to Common Stockholders and EPS (Diluted)For the quarters ended December 31, 2016 and 2017 (dollars in thousands except EPS)

Incr

ease

81%

YO

Y

Incr

ease

28%

YO

Y

For the quarter ended December 31, 2017, adjusted net income available to common shareholders was $107,403 or $0.70 per diluted share (1)

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

Orders, Deliveries and Absorption Rate year over year comparisons for the Fourth Quarter and Full Year 2017 by Segment

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

144

93

225

1812.7

2.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

50

100

150

200

250

4Q16 4Q17Orders Deliveries Absorption

Orders, Deliveries and Absorption RateFor the quarters ended December 31, 2016 and 2017

4Q16 4Q17$417K $507KAverage Sales Price of Deliveries

Orders, Deliveries and Absorption RateFor the years ended December 31, 2016 and 2017

670

597625 628

3.13.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

100

200

300

400

500

600

700

FY16 FY17Orders Deliveries Absorption

FY16 FY17$408K $473KAverage Sales Price of Deliveries

Decr

ease

20%

YO

Y

Dec

35%

YO

Y

FLat

YOY

Decr

ease

11%

YO

Y

15

99 105

165169

2.9

2.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

50

100

150

200



Nevada



478502

460 4793.6 3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

100

200

300

400

500

600



Incr

ease

2%

YO

Y

Incr

ease

6%

YO

Y

Incr

ease

4%

YO

Y

Incr

ease

5%

YO

Y

16

171193

227

3663.9

3.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

50

100

150

200

250

300

350

400





728

1,078

760

952

4.8 5.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

200

400

600

800

1,000

1,200


FY16 FY17$646K $565K

Average Sales Price of Deliveries

California

Incr

ease

13%

YO

Y

Incr

ease

61%

YO

Y

Incr

ease

48%

YO

Y

Incr

ease

25%

YO

Y

17

67

8496

146

3.4

3.6

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





341

395383

352

3.6

4.4

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

300

350

400

450



Incr

ease

25%

YO

Y

Incr

ease

52%

YO

Y

Incr

ease

16%

YO

Y

Decr

ease

8%

YO

Y

18

116123

139

163

1.3

1.4

0.0

0.5

1.0

1.5

2.0

0

20

40

60

80

100

120

140

160

180




501 516474

506

1.5 1.4

0.0

0.5

1.0

1.5

2.0

2.5

0

100

200

300

400

500

600




Incr

ease

6%

YO

Y

Incr

ease

17%

YO

Y

Incr

ease

3%

YO

Y

Incr

ease

7%

YO

Y

19

28

69

42

75

2.1

3.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

20

40

60

80

100





135

213

160 1722.4

2.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

50

100

150

200

250


FY16 FY17$524K $596K

Average Sales Price of Deliveries

Colorado

Incr

ease

146

% Y

OY

Incr

ease

79%

YO

Y

Incr

ease

58%

YO

Y

Incr

ease

8%

YO

Y

20

186

279

369

455

2.6

3.7

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

300

350

400

450

500




962

1,279

929

1,141

3.5

4.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

200

400

600

800

1,000

1,200

1,400




California

Incr

ease

50%

YO

Y

Incr

ease

23%

YO

Y

Incr

ease

23%

YO

Y

Incr

ease

33%

YO

Y

21

98117

164

2022.5

2.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

50

100

150

200

250




433

495

420467

2.7

3.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

100

200

300

400

500

600




Incr

ease

19%

YO

Y

Incr

ease

11%

YO

Y

Incr

ease

14%

YO

Y

Incr

ease

23%

YO

Y

22

2014–2017 Historical Results with 2018 Guidance Ranges

Arizona12%

California34%

Maryland7%

Nevada9%

Colorado5%

Texas24%

Virginia3%

Washington6%

Average Selling Communities and Absorption Rate

24

99

116 118127

133

2.5

3.0 3.0

3.33.2

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

2014 2015 2016 2017 2018P

Communities Absorption Rate

Incr

ease

2%

YO

Y

Incr

ease

5%

YO

Y

Average Selling Communities and Absorption RateAs of and for the years ended December 31, 2014 through 2017 and 2018 projections

Average Selling Communities by StateFor the year ended December 31, 2017

Opened 58 new communities and closed 52 in 2017Expect to open over 60 new communities in 2018

Incr

ease

17%

YO

Y

See Forward Looking Statement disclosure on page 2 of the presentation

Incr

ease

8%

YO

Y

Arizona13%


7%

Nevada10%

Colorado4%

Texas11%

Virginia3%

Washington7%

New Home Deliveries – FY 2014 through FY 2017

25

New Home Deliveries by StateFor the year ended December 31, 2017

New Home DeliveriesFor the years ended December 31, 2014 through 2017 and 2018 projections

3,100

4,057 4,211

4,697

5,100

5,400

0

1,000

2,000

3,000

4,000

5,000

6,000

2014 2015 2016 2017 2018P

Incr

ease

12%

YO

Y at

mid

poin

t of t

he ra

nge

Incr

ease

4%

YO

Y

Incr

ease

31%

YO

Y

Guidance Range of Deliveries


Incr

ease

12%

YO

Y

Arizona11%


6%

Nevada8%

Colorado4%

Texas9%

Virginia3%

Washington9%

Home Sales Revenue – FY 2014 through FY 2017

26

$1,646

$2,291 $2,329

$2,732 $3,111

$3,348

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2014 2015 2016 2017 2018P

Incr

ease

19%

YO

Y at

mid

poin

t of t

he ra

nge

Home Sales RevenueFor the years ended December 31, 2014 through 2017 and 2018 projections(dollars in millions)

Home Sales Revenue by StateFor the year ended December 31, 2017

$531K $565K $553K $582K $610-620KAverage Sales Price of Deliveries

Incr

ease

2%

YO

Y

Incr

ease

39%

YO

YGuidance Range of

Home Sales Revenue


Incr

ease

17%

YO

Y

27

$196,501

$237,042$252,022

$274,830

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

2014 2015 2016 2017 2018

Selling, General and Administrative ExpensesFor the years ended December 31, 2014 through 2017 (dollars in thousands)

11.9% 10.3% 10.8% 10.1% 9.9%-10.3%SG&A as a % of Home Sales Revenue

Incr

ease

6%

YO

Y

Incr

ease

21%

YO

Y

2018 GuidanceProject SG&A Expense Ratio

of 9.9% to 10.3% of Home Sales Revenue

$127,964

$319,260$302,227

$339,818

$84,197

$205,461 $195,171 $187,191$0.58

$1.27$1.21

$1.21

-$0.10

$0.10

$0.30

$0.50

$0.70

$0.90

$1.10

$1.30

$1.50

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2014 2015 2016 2017Inc Before Taxes Net Income EPS

Income before Taxes, Net Income available to Common Stockholders and EPS (Diluted)For the full years ended December 31, 2014 through 2017 (dollars in thousands except EPS)

SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 2017

Incr

ease

144

% Y

OY

Incr

ease

149

% Y

OY

Decr

ease

5%

YO

Y

Decr

ease

5%

YO

Y

(1) See “Reconciliation of Non-GAAP Measures” in the appendix of this presentationSee Forward Looking Statement disclosure on page 2 of the presentation

Incr

ease

9%

YO

Y

For the year ended December 31, 2017, adjusted net income available to common shareholders was $220.6 million or $1.42 per diluted share (1)

Incr

ease

12%

YO

Y

Decr

ease

4%

YO

Y

2018 Outlook

Full Year 2018 Outlook

29

Full Year 2018 Outlook

• Expect to grow average selling communities by 5% for the full year

• Anticipate delivering between 5,100 and 5,400 homes at an average sales price of approximately $610,000

• Anticipate homebuilding gross margin for the full year in a range of 20.5% to 21.5%

• Anticipate SG&A expense ratio for the full year to be in a range of 9.9% to 10.3% of home sales revenue

• Anticipate effective tax rate to be in a range of 25% to 26%


First Quarter 2018 Outlook

30

First Quarter 2018 Outlook

• Expect to open 8 new communities and close out of 11, resulting in 127 active selling communities as of March 31, 2018

• Anticipate delivering approximately 55% of the 1,571 homes in backlog as of December 31, 2017 at an average sales price range of $630,000 to $640,000

• Anticipate homebuilding gross margin for the first quarter in a range of 21.5% to 22.5%

• Anticipate SG&A expense ratio for the first quarter to be in a range of 13.0% to 13.5% of home sales revenue


Land Supply

Orders by Month

Debt

Significant Land Supply to Fuel Growth

Combined Lot Position

Market Owned Controlled (3) Total Lots % Owned Inventory Dollars LTM Deliveries Implied Years of Supply (1)

California 15,316 976 16,292 94% $1,711,806 2,093 7.8

Colorado 644 98 742 87% $112,936 172 4.3

Washington, D.C. (2) 1,597 507 2,104 76% $297,471 467 4.5

Arizona 1,950 569 2,519 77% $243,882 628 4.0

Nevada 1,855 219 2,074 89% $276,643 479 4.3

Texas 1,508 347 1,855 81% $204,926 506 3.7

Washington 1,070 656 1,726 62% $257,887 352 4.9

Total 23,940 3,372 27,312 88% $3,105,553 4,697 5.8

As of December 31, 2017

California61%

Colorado3%

Washington, D.C. (2)8%

Arizona7%

Nevada8%

Texas7%

Washington6%

Total Lots

(1) Based on last twelve months’ deliveries as of December 31, 2017(2) Includes lots in the greater Washington D.C. area. (3) Lots controlled include lots that are under land option contracts or purchase contracts

California55%

Colorado4%

Washington, D.C. (2)10%

Arizona8%

Nevada9%

Texas7%

Washington8%

Inventory Dollars

32

. Note: Dollars in thousands

New Home Orders – Historical by Month

33

322

409 418

477

425

356

280306

346 345

297

267

377

477

445

524

477

444431

400

437

375354

334

459

0

50

100

150

200

250

300

350

400

450

500

550

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

201620172018

2018 - 3.54

2017 - 3.03 3.74 3.53 4.26 3.77 3.40 3.29 3.07 3.40 2.95 2.80 2.61

2016 - 2.98 3.57 3.45 3.89 3.60 3.06 2.41 2.59 2.84 2.83 2.43 2.16

Absorption Rate = Orders per Month per Community

4Q17 Orders up 17% YOY

Selected Balance Sheet Metrics

34

$450

$300

$450

$300

$0

$100

$200

$300

$400

$500

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

4.375% Senior Notes 4.875% Senior Notes 5.875% Senior Notes 5.250% Senior Notes

• During the quarter, the Company paid down its unsecured revolving credit facility to $0.

$ in thousands 12/31/2017 12/31/2016

Cash and cash equivalents $ 282,914 $ 208,657 Real estate inventories $ 3,105,553 $ 2,910,627 Total Debt $ 1,471,302 $ 1,382,033 Total Stockholders' equity $ 1,929,722 $ 1,829,447

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

43.3%38.1%

43.0%39.1%

Selected Balance Sheet Metrics

Senior Note Debt Maturities (in millions)

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

Supplemental Data and Reconciliation

Reconciliation of Non-GAAP Financial Measures(unaudited)

36

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

Three Months Ended December 31, 2017 % 2016 % (dollars in thousands) Home sales revenue $ 1,122,841 100.0 % $ 770,703 100.0 % Cost of home sales 878,688 78.3 % 616,767 80.0 % Homebuilding gross margin 244,153 21.7 % 153,936 20.0 %

Add: interest in cost of home sales 26,387 2.4 % 16,458 2.1 % Add: impairments and lot option abandonments 851 0.1 % 792 0.1 %

Adjusted homebuilding gross margin $ 271,391 24.2 % $ 171,186 22.2 % Homebuilding gross margin percentage 21.7 % 20.0 % Adjusted homebuilding gross margin percentage 24.2 % 22.2 %

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

37

Year Ended December 31, 2017 % 2016 % (dollars in thousands) Home sales revenue $ 2,732,299 100.0 % $ 2,329,336 100.0 % Cost of home sales 2,173,251 79.5 % 1,836,327 78.8 % Homebuilding gross margin 559,048 20.5 % 493,009 21.2 %

Add: interest in cost of home sales 64,835 2.4 % 51,111 2.2 % Add: impairments and lot option abandonments 2,020 0.1 % 1,470 0.1 %

Adjusted homebuilding gross margin $ 625,903 22.9 % $ 545,590 23.4 % Homebuilding gross margin percentage 20.5 % 21.2 % Adjusted homebuilding gross margin percentage 22.9 % 23.4 %

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

38

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

December 31, 2017 December 31, 2016 Unsecured revolving credit facility $ — $ 200,000 Seller financed loans — 13,726 Senior notes 1,471,302 1,168,307

Total debt 1,471,302 1,382,033 Stockholders’ equity 1,929,722 1,829,447

Total capital $ 3,401,024 $ 3,211,480

Ratio of debt-to-capital(1) 43.3 % 43.0 % Total debt $ 1,471,302 $ 1,382,033 Less: Cash and cash equivalents (282,914 ) (208,657 )

Net debt 1,188,388 1,173,376 Stockholders’ equity 1,929,722 1,829,447

Net capital $ 3,118,110 $ 3,002,823

Ratio of net debt-to-net capital(2) 38.1 % 39.1 % __________ (1) The ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of debt plus equity. (2) The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is debt less cash

and cash equivalents) by the sum of net debt plus equity.

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

39

The following table contains information about our operating results reflecting certain adjustments to income before

income taxes, (provision) benefit for income taxes, net income, net income available to common stockholders and earnings per share (diluted). We believe reflecting these adjustments is useful to investors in understanding our recurring operations by eliminating the varying effects of certain non-routine events, and may be helpful in comparing the Company to other homebuilders to the extent they provide similar information.

Three Months Ended December 31, 2017 Year Ended December 31, 2017 As Reported Adjustments Adjusted As Reported Adjustments Adjusted (in thousands) Income before income taxes 156,685 13,182 (1) 169,867 339,818 13,182 (1) 353,000 (Provision) benefit for income taxes (82,443 ) 20,201 (2) (62,242 ) (152,267 ) 20,201 (2) (132,066 ) Net income 74,242 33,383 107,625 187,551 33,383 220,934 Net income attributable to noncontrolling i

(222 ) — (222 ) (360 ) — (360 ) Net income available to common stockholders $ 74,020

$ 33,383

$ 107,403

$ 187,191

$ 33,383

$ 220,574

Earnings per share Diluted $ 0.49 $ 0.70 $ 1.21 $ 1.42

Weighted average shares outstanding Diluted 152,568 152,568 155,085 155,085

Effective tax rate 52.6 % 36.6 % 44.8 % 37.4 %

__________ (1) Includes a charge related to the impairment of an investment in an unconsolidated entity. (2) Includes a tax charge related to the re-measurement of the Company’s net deferred tax assets as a result of the Tax

Cuts and Jobs Act enacted in the fourth quarter of 2017, net of the impact of the charge related to the impairment of an investment in an unconsolidated entity.

2017 Fourth Quarter and Full Year ResultsForward Looking StatementManagement TeamA Family of Regional Homebuilders2017 Fourth Quarter and Full Year Highlights2017 Fourth Quarter Highlights2017 Full Year HighlightsActive Selling Communities and Absorption Rate Q4 2017 ResultsNew Home Orders – Q4 2017 ResultsBacklog – Units and Dollar Value – Q4 2017 ResultsNew Home Deliveries – Q4 2017 ResultsHome Sales Revenue – Q4 2017 ResultsSG&A Expenses, Income before Taxes and Net Income – Q4 2017 ResultsOrders, Deliveries and Absorption Rate year over year comparisons for the Fourth Quarter and Full Year 2017 by Segment��(Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 222014–2017 Historical Results with 2018 Guidance RangesAverage Selling Communities and Absorption RateNew Home Deliveries – FY 2014 through FY 2017Home Sales Revenue – FY 2014 through FY 2017Slide Number 272018 OutlookFull Year 2018 OutlookFirst Quarter 2018 OutlookLand Supply��Orders by Month��DebtSlide Number 32New Home Orders – Historical by MonthSelected Balance Sheet MetricsSupplemental Data and ReconciliationReconciliation of Non-GAAP Financial Measures�(unaudited)Reconciliation of Non-GAAP Financial Measures�(cont’d)(unaudited)Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited)Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited)

Documents

2017 Fourth Quarter and Full Year Results · 2018. 4. 19. · 2017 Fourth Quarter Highlights • Absorption rate of 2.8 new home orders per community per month • New home deliveries