2017 second quarter resultss2.q4cdn.com/231488844/files/doc_financials/...home sales revenue – q2...

2017 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,” “target,” “guidance,” “outlook,” “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; 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; 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 registeredtrademark and is used with permission.

2

Management Team

3

Michael GrubbsChief Financial Officer• Over 28 years of real estate

and homebuilding experience

• Former SVP / CFO of William Lyon Homes

Douglas BauerChief Executive Officer• Over 28 years of real estate

and homebuilding experience

• Former President and COO of William Lyon Homes

Thomas Mitchell President & COO

• Over 28 years of real estate and homebuilding experience

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

Working together for over 28 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: 4,585 LTM Deliveries: 4,275LTM Home Sales (“HS”) Revenue: $2,310,176 LTM Average Sales Price (“ASP”): $540 Lots Owned or Controlled: 28,892

Market: Seattle Metro AreaLTM Orders: 343 LTM Deliveries: 313LTM HS Revenue: $186,421 LTM ASP: $596Lots Owned or Controlled: 1,852

Markets: Los Angeles, Inland Empire, San Diego, Las VegasLTM Orders: 1,414 LTM Deliveries: 1,262LTM HS Revenue: $635,375 LTM ASP: $503Lots Owned or Controlled: 16,162

Markets: Orange County, Los Angeles, San Diego, San Francisco Bay Area, DenverLTM Orders: 1,219 LTM Deliveries: 1,122LTM HS Revenue: $723,450 LTM ASP: $645Lots Owned or Controlled: 3,494

Markets: Phoenix, TucsonLTM Orders: 624 LTM Deliveries: 673LTM HS Revenue: $288,774 LTM ASP: $429Lots Owned or Controlled: 3,023

Markets: Houston, AustinLTM Orders: 526 LTM Deliveries: 499LTM HS Revenue: $249,455LTM ASP: $500Lots Owned or Controlled: 1,912

Markets: Washington DC Metro AreaLTM Orders: 459LTM Deliveries: 406LTM HS Revenue: $226,701 LTM ASP: $558Lots Owned or Controlled: 2,449

Data as of June 30, 2017Note: Dollars in thousands

2017 Second Quarter Highlights

2017 Second Quarter Highlights

• Absorption rate of 3.8 new home orders per community per month

• New home deliveries up 8% to 1,071 with an average sales price of $531K

• Home sales revenue up 2% to $569MM

• Homebuilding gross margin of 20.1%

• Adj. homebuilding gross margin of 22.5% (1)

• SG&A expense increased 30 basis points to 11.6% of home sales revenue compared to 11.3%

• Net income available to common stockholders of $32.7MM, or $0.21 per diluted share vs. $73.9MM, or $0.46 per diluted share

• Repurchased 7,979,618 shares for $99.2MM at an average price of $12.43 per share in 2Q17.

6(1) See “Reconciliation of Non-GAAP Measures” in the appendix of this presentation(2) Backlog (units) figures are as of June 30, 2017 and 2016, respectively

Metric 2Q17 2Q16 % Change

Orders 1,445 1,258 15%

Deliveries 1,071 994 8%

ASP of Home Deliveries ($000s) $531 $560 -5%

Backlog (units) (2) 2,108 1,798 17%

Home Sales Revenue ($000s) $568,816 $556,925 2%

HB Gross Margin 20.1% 22.3% -220 bps

Adjusted HB Gross Margin (1) 22.5% 24.4% -190 bps

Land and Lot Sales Revenue ($mm) $0.9 $67.3 -99%

Land and Lot Sales Profit ($mm) $0.2 $52.9 -100%

SG&A Expense (% of sales) 11.6% 11.3% +30 bps

EPS (Diluted) $0.21 $0.46 -54%

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%

YTD 1Q17

Metric2Q172Q16% Change

Orders1,4451,25815%

Deliveries1,0719948%

ASP of Home Deliveries ($000s)$531$560-5%

Backlog (units) (2)2,1081,79817%

Home Sales Revenue ($000s)$568,816$556,9252%

HB Gross Margin20.1%22.3%-220 bps

Adjusted HB Gross Margin (1)22.5%24.4%-190 bps

Land and Lot Sales Revenue ($mm)$0.9$67.3-99%

Land and Lot Sales Profit ($mm)$0.2$52.9-100%

SG&A Expense (% of sales)11.6%11.3%+30 bps

EPS (Diluted)$0.21$0.46-54%

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

Arizona11%

California35%

Maryland8%

Nevada8%

Colorado6%

Texas24%

Virginia2%

Washington6%

Active Selling Communities and Absorption Rate Q2 2017 Results

7

117131

3.5

3.8

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 June 30, 2016 and 2017

Active Selling Communities by StateAs of June 30, 2017

Opened 20 new communities and closed 12 in Q2 2017

Incr

ease

12%

YO

Y

Arizona11%

California48%Maryland

8%

Nevada11%

Colorado4%

Texas9%

Virginia2%

Washington7%

New Home Orders – Q2 2017 Results

8

1,258

1,445

0

200

400

600

800

1,000

1,200

1,400

1,600

2016 2017

Incr

ease

15%

YO

Y

New Home OrdersFor the quarters ended June 30, 2016 and 2017

New Home Orders by StateFor the quarter ended June 30, 2017

Arizona12%

California49%

Maryland7%

Nevada6%

Colorado4%

Texas8%

Virginia3%

Washington11%

Backlog – Units and Dollar Value – Q2 2017 Results

9

Backlog – Units and Dollar ValueAs of June 30, 2016 and 2017 (dollars in thousands)

Backlog Dollar Value by StateAs of June 30, 2017

1,798

2,108

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Units

$1,026,219

$1,339,217

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$ Value

2016

2017

$571K $635KAverage Sales Price

in Backlog

Incr

ease

17%

YO

Y

Incr

ease

31%

YO

Y

Arizona15%

California41%

Maryland7%

Nevada13%

Colorado4%

Texas12%

Virginia2%

Washington6%

New Home Deliveries – Q2 2017 Results

10

New Home Deliveries by StateFor the quarter ended June 30, 2017

New Home DeliveriesAs of and for the quarters ended June 30, 2016 and 2017

9941,071

0

200

400

600

800

1,000

1,200

2016 2017

65% 62%Backlog Conversion Ratio

Incr

ease

8%

YO

Y

Arizona13%

California45%

Maryland6%

Nevada10%

Colorado4%

Texas12%

Virginia3%

Washington7%

Home Sales Revenue – Q2 2017 Results

11

$556,925 $568,816

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2016 2017

Home Sales RevenueFor the quarters ended June 30, 2016 and 2017 (dollars in thousands)

Home Sales Revenue by StateFor the quarter ended June 30, 2017

$560K $531KAverage Sales Price of Deliveries

Incr

ease

2%

YO

Y

SG&A Expenses, Income before Taxes and Net Income – Q2 2017 Results

12

$62,932$66,018

$32,448 $32,330$30,484

$33,688

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

2016 2017

SG&A

S&M

G&A

Selling General and Administrative ExpensesFor the quarters ended June 30, 2016 and 2017 (dollars in thousands)

11.3% 11.6%SG&A as a % of Home Sales Revenue

Incr

ease

5%

YO

Y

$116,106

$51,901

$73,926

$32,714

$0.46

$0.21

$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

2016 2017Inc Before Taxes Net Income EPS

Income before Taxes, Net Income available to Common Stockholders and EPS (Diluted)For the quarters ended June 30, 2016 and 2017 (dollars in thousands except EPS)

Dec

55%

YO

Y

Dec

56%

YO

Y

Orders, Deliveries and Absorption Rate year over year comparisons for the Second Quarter 2017 by Segment(Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)

191

162

120

164

3.43.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

50

100

150

200

250

2Q16 2Q17Orders Deliveries Absorption

Orders, Deliveries and Absorption RateFor the quarters ended June 30, 2016 and 2017

2Q16 2Q17$399K $462KAverage Sales Price of Deliveries

14



Incr

ease

37%

YO

Y

Decr

ease

15%

YO

Y

92

107105

64

3.4

5.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

0

20

40

60

80

100

120

140


Incr

ease

16%

YO

Y

Decr

ease

39%

YO

Y

133 129126 1331.6

1.4

0.0

0.5

1.0

1.5

2.0

0

20

40

60

80

100

120

140

160



15




Decr

ease

3%

YO

Y

Incr

ease

6%

YO

Y

123

151

108953.0

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

20

40

60

80

100

120

140

160

180


Decr

ease

12%

YO

Y

Incr

ease

23%

YO

Y

201

327

200232

6.16.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0

50

100

150

200

250

300

350

400



16



2Q16 2Q17$359K $412K

Average Sales Price of Deliveries

California

Incr

ease

63%

YO

Y

Incr

ease

16%

YO

Y139

156

118

1404.1

4.6

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

180


Nevada

Incr

ease

12%

YO

Y

Incr

ease

19%

YO

Y

346 362

167206

4.94.8

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



17



2Q16 2Q17$509K $617K

Average Sales Price of Deliveries

California

Incr

ease

5%

YO

Y

Incr

ease

23%

YO

Y

Colorado

33

5150

37

2.3

2.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

10

20

30

40

50

60


Decr

ease

26%

YO

Y

Incr

ease

55%

YO

Y

2014 – 2016 Historical Results with 2017 Guidance Ranges

Arizona15%

California30%

Maryland6%

Nevada9%

Colorado4%

Texas24%

Virginia5%

Washington7%

Average Selling Communities and Absorption Rate

19

99

116 118128

2.5

3.0 3.03.2

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 2017P

Communities Absorption Rate

Incr

ease

2%

YO

Y

Incr

ease

8%

YO

Y

Average Selling Communities and Absorption RateAs of and for the years ended December 31, 2014 through 2016 and 2017 projections

Average Selling Communities by StateFor the year ended December 31, 2016

Opened 63 new communities and closed 43 in 2016Expect to open over 60 new communities in 2017

Incr

ease

17%

YO

Y

See Forward Looking Statement disclosure on page 2 of the presentation

Adjusted FY average due to increased absorption

rates through 2Q17 resulting in earlier than expected close out of

communities

Arizona16%

California40%

Maryland7%

Nevada11%

Colorado3%

Texas12%

Virginia3%

Washington8%

New Home Orders – FY 2014 through FY 2016

20

2,947

4,1814,248

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2014 2015 2016

Incr

ease

2%

YO

Y

New Home OrdersFor the years ended December 31, 2014 through 2016

New Home Orders by StateFor the year ended December 31, 2016

Incr

ease

42%

YO

Y

Arizona21%

California34%

Maryland8%

Nevada8%

Colorado5%

Texas14%

Virginia2%

Washington8%

Backlog Units – FY 2014 through FY 2016

21

1,032

1,1561,193

0

500

1,000

1,500

2014 2015 2016

Incr

ease

3%

YO

Y

Backlog UnitsFor the years ended December 31, 2014 through 2016

Backlog Units by StateFor the year ended December 31, 2016

Incr

ease

12%

YO

Y

$633K $603K $554KAverage Sales Price of Backlog Units

Arizona15%

California40%

Maryland6%

Nevada11%

Colorado4%

Texas11%

Virginia4%

Washington9%

New Home Deliveries – FY 2014 through FY 2016

22

New Home Deliveries by StateFor the year ended December 31, 2016

New Home DeliveriesFor the years ended December 31, 2014 through 2016 and 2017 projections

3,100

4,0574,211

4,600

4,800

0

1,000

2,000

3,000

4,000

5,000

2014 2015 2016 2017P

Incr

ease

12%

YO

Y at

mid

poin

t of t

he ra

nge

Incr

ease

4%

YO

Y

Incr

ease

31%

YO

YUpdated Guidance Range of Deliveries


Arizona11%

California48%

Maryland6%

Nevada8%

Colorado4%

Texas10%

Virginia4%

Washington9%

Home Sales Revenue – FY 2014 through FY 2016

23

$1,646

$2,291 $2,329$2,622

$2,736

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2014 2015 2016 2017P

Incr

ease

15%

YO

Y at

mid

poin

t of t

he ra

nge

Home Sales RevenueFor the years ended December 31, 2014 through 2016 and 2017 projections(dollars in millions)

Home Sales Revenue by StateFor the year ended December 31, 2016

$531K $565K $553K $570KAverage Sales Price of Deliveries

Incr

ease

2%

YO

Y

Incr

ease

39%

YO

Y

Updated Guidance Range of

Home Sales Revenue


24

$185,958

$233,713$251,093

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

2014 2015 2016 2017

Selling, General and Administrative ExpensesFor the years ended December 31, 2014 through 2016 (dollars in thousands)

11.3% 10.2% 10.8% 10.2%-10.4%SG&A as a % of Home Sales Revenue

Incr

ease

7%

YO

Y

Incr

ease

26%

YO

Y

2017 GuidanceProject SG&A Expense Ratio

of 10.2% to 10.4% of Home Sales Revenue

$127,964

$319,260$302,227

$84,197

$205,461$195,171

$0.58

$1.27$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

2014 2015 2016Inc 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 2016 (dollars in thousands except EPS)

SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 2016

Incr

ease

144

% Y

OY

Incr

ease

149

% Y

OY

Decr

ease

5%

YO

Y

Decr

ease

5%

YO

Y


2017 Outlook

Third Quarter and Full Year 2017 Outlook

26

Third Quarter

• Expect to open 10 new communities and close out of 19, resulting in 122 active selling communities as of September 30, 2017

• Anticipate delivering approximately 50% to 55% of the 2,108 homes in backlog as of June 30, 2017 at an average sales price of approximately $570,000

• Anticipate homebuilding gross margins for the third quarter in a range of 19.0% to 20.0%

Full Year 2017

• Lower expected full year growth of average selling communities from 10% to 8% due to the higher than anticipated absorption rate through the second quarter of 2017, causing the early close out of communities.

• Raise the lower end of the anticipated delivery range from 4,500 homes to 4,600 homes, resulting in a full year delivery range between 4,600 and 4,800 homes at an average sales price of $570,000

• Increasing land and lot sales gross margin for the full year to approximately $50 million from $45 million, most of which is expected to close in the third quarter of 2017

• Anticipate homebuilding gross margins for the full year in a range of 20% to 21%

• Anticipate SG&A expense ratio for the full year to be in a range of 10.2% to 10.4% of home sales revenue


Land Supply

Orders by Month

Debt

Significant Land Supply to Fuel Growth

Combined Lot Position

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

California 16,324 344 16,668 98% $1,773,183 1,745 9.6

Colorado 618 229 847 73% $112,227 139 6.1

Washington, D.C. (2) 1,672 777 2,589 65% $298,134 406 6.4

Arizona 1,993 1,030 3,023 66% $257,404 673 4.5

Nevada 2,016 125 2,141 94% $284,060 500 4.3

Texas 1,578 334 1,912 83% $212,917 499 3.8

Washington 1,107 745 1,852 60% $270,416 313 5.9

Total 25,308 3,584 28,892 88% $3,208,341 4,275 6.8

As of June 30, 2017

California58%

Colorado3%

Washington, D.C. (2)9%

Arizona10%

Nevada7%

Texas7%

Washington6%

Total Lots

(1) Based on last twelve months’ deliveries as of June 30, 2017(2) Includes lots in the greater Washington D.C. area.

California55%

Colorado3%

Washington, D.C. (2)9%

Arizona8%

Nevada9%

Texas7%

Washington8%

Inventory Dollars

28

. Note: Dollars in thousands

New Home Orders – Historical by Month

29

324

415

455

410

457

371355

367

274

318

227208

322

409418

477

425

356

280306

346 345

297

267

377

477

445

524

477

444

0

50

100

150

200

250

300

350

400

450

500

550

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

201520162017

2017 - 3.03 3.74 3.53 4.26 3.77 3.40

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

2015 - 2.96 3.67 3.91 3.47 3.82 3.05 2.91 3.02 2.29 2.72 1.98 1.92

Absorption Rate = Orders per Month per Community

1Q17 Orders up 13% YOY



Selected Balance Sheet Metrics

30

$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 successfully issued $300 million aggregate principal amount of 5.25% Senior Notes due 2027.

• Extended existing unsecured revolving credit facility maturity by two years to May 2021, while decreasing total commitments from $625 million to $600 million.

$ in thousands 6/30/2017 12/31/2016

Cash and cash equivalents $ 114,945 $ 208,657 Real estate inventories $ 3,208,341 $ 2,910,627 Total Debt $ 1,617,861 $ 1,382,033 Total Stockholders' equity $ 1,777,954 $ 1,829,447

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

47.6%45.8%

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)

32

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, 2017 % 2016 % (dollars in thousands) Home sales revenue $ 568,816 100.0 % $ 556,925 100.0 % Cost of home sales 454,241 79.9 % 432,738 77.7 % Homebuilding gross margin 114,575 20.1 % 124,187 22.3 %

Add: interest in cost of home sales 13,145 2.3 % 11,438 2.1 % Add: impairments and lot option abandonments 507 0.1 % 107 0.0 %

Adjusted homebuilding gross margin $ 128,227 22.5 % $ 135,732 24.4 % Homebuilding gross margin percentage 20.1 % 22.3 % Adjusted homebuilding gross margin percentage 22.5 % 24.4 %

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

33

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.

June 30, 2017 December 31, 2016 Unsecured revolving credit facility $ 150,000 $ 200,000 Seller financed loans — 13,726 Senior notes 1,467,861 1,168,307

Total debt 1,617,861 1,382,033 Stockholders’ equity 1,777,954 1,829,447

Total capital $ 3,395,815 $ 3,211,480

Ratio of debt-to-capital(1) 47.6 % 43.0 % Total debt $ 1,617,861 $ 1,382,033 Less: Cash and cash equivalents (114,945 ) (208,657 )

Net debt 1,502,916 1,173,376 Stockholders’ equity 1,777,954 1,829,447

Net capital $ 3,280,870 $ 3,002,823

Ratio of net debt-to-net capital(2) 45.8 % 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.

2017 Second Quarter ResultsForward Looking StatementManagement TeamA Family of Regional Homebuilders2017 Second Quarter Highlights2017 Second Quarter HighlightsActive Selling Communities and Absorption Rate Q2 2017 ResultsNew Home Orders – Q2 2017 ResultsBacklog – Units and Dollar Value – Q2 2017 ResultsNew Home Deliveries – Q2 2017 ResultsHome Sales Revenue – Q2 2017 ResultsSG&A Expenses, Income before Taxes and Net Income – Q2 2017 ResultsSlide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 172014 – 2016 Historical Results with 2017 Guidance RangesAverage Selling Communities and Absorption RateNew Home Orders – FY 2014 through FY 2016Backlog Units – FY 2014 through FY 2016New Home Deliveries – FY 2014 through FY 2016Home Sales Revenue – FY 2014 through FY 2016Slide Number 242017 Outlook Third Quarter and Full Year 2017 OutlookLand Supply��Orders by Month��DebtSlide Number 28New 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)

2017 second quarter resultss2.q4cdn.com/231488844/files/doc_financials/...home sales revenue – q2...

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