10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________________________________ 

FORM 10-Q

_____________________________________________________________________________________________ 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ 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 Homes, 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.)

_____________________________________________________________________________________________ 

940 Southwood Blvd, Suite 200

Incline Village, Nevada 89451

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (775) 413-1030

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

____________________________________________________________________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	TPH	New York Stock Exchange

    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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

100,098,269 shares of the registrant's common stock were issued and outstanding as of April 14, 2023.

EXPLANATORY NOTE

As used in this quarterly report on Form 10-Q, references to “Tri Pointe”, “the Company”, “we”, “us”, or “our” (including in the consolidated financial statements and related notes thereto in this annual report on Form 10-Q) refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.

TRI POINTE HOMES, INC.

QUARTERLY REPORT ON FORM 10-Q

INDEX

March 31, 2023

		Page Number
PART I.  FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (unaudited)	4
	Consolidated Statements of Equity for the Three Months Ended March 31, 2023 and 2022 (unaudited)	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
Part II.  OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 6.	Exhibits	38
SIGNATURES		39

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PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

TRI POINTE HOMES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	March 31, 2023		December 31, 2022
	(unaudited)
Assets
Cash and cash equivalents	$	966,298	$	889,664
Receivables	141,076		169,449
Real estate inventories	3,142,412		3,173,849
Investments in unconsolidated entities	134,071		129,837
Goodwill and other intangible assets, net	156,603		156,603
Deferred tax assets, net	34,851		34,851
Other assets	163,929		165,687
Total assets	$	4,739,240	$	4,719,940
Liabilities
Accounts payable	$	57,544	$	62,324
Accrued expenses and other liabilities	436,275		443,034
Loans payable	287,427		287,427
Senior notes, net	1,091,509		1,090,624
Total liabilities	1,872,755		1,883,409
Commitments and contingencies (Note 13)
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no    shares issued and outstanding as March 31, 2023 and    December 31, 2022, respectively	—		—
Common stock, $0.01 par value, 500,000,000 shares authorized;    100,172,227 and 101,017,708 shares issued and outstanding at   March 31, 2023 and December 31, 2022, respectively	1,002		1,010
Additional paid-in capital	—		3,685
Retained earnings	2,862,621		2,827,694
Total stockholders’ equity	2,863,623		2,832,389
Noncontrolling interests	2,862		4,142
Total equity	2,866,485		2,836,531
Total liabilities and equity	$	4,739,240	$	4,719,940

See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE HOMES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2023		2022
Homebuilding:
Home sales revenue	$	768,405	$	725,251
Land and lot sales revenue	1,706		1,597
Other operations revenue	674		644
Total revenues	770,785		727,492
Cost of home sales	588,118		530,660
Cost of land and lot sales	1,443		475
Other operations expense	665		646
Sales and marketing	41,862		32,239
General and administrative	46,366		48,456
Homebuilding income from operations	92,331		115,016
Equity in income (loss) of unconsolidated entities	227		(55)
Other income, net	7,604		273
Homebuilding income before income taxes	100,162		115,234
Financial Services:
Revenues	8,876		8,752
Expenses	5,831		5,308
Equity in income of unconsolidated entities	—		46
Financial services income before income taxes	3,045		3,490
Income before income taxes	103,207		118,724
Provision for income taxes	(27,350)		(30,225)
Net income	75,857		88,499
Net income attributable to noncontrolling interests	(1,115)		(1,021)
Net income available to common stockholders	$	74,742	$	87,478
Earnings per share
Basic	$	0.74	$	0.82
Diluted	$	0.73	$	0.81
Weighted average shares outstanding
Basic	101,019,253		107,326,911
Diluted	101,706,438		108,197,485

See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE HOMES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

(in thousands, except share amounts)

	Number of Shares of Common Stock (Note 1)	Common Stock		Additional Paid-in Capital		Retained Earnings		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2022	101,017,708	$	1,010	$	3,685	$	2,827,694	$	2,832,389	$	4,142	$	2,836,531
Net income		—		—		74,742		74,742		1,115		75,857
Shares issued under share-based awards	729,094	7		225		—		232		—		232
Tax withholding paid on behalf of employees for share-based awards	—	—		(9,780)		—		(9,780)		—		(9,780)
Stock-based compensation expense	—	—		3,861		—		3,861		—		3,861
Share repurchases	(1,574,575)	(15)		(37,806)		—		(37,821)		—		(37,821)
Distributions to noncontrolling interests, net	—	—		—		—		—		(2,395)		(2,395)
Reclass the negative APIC to retained earnings	—	—		39,815		(39,815)		—		—		—
Balance at March 31, 2023	100,172,227	$	1,002	$	—	$	2,862,621	$	2,863,623	$	2,862	$	2,866,485
	Number of Shares of Common Stock (Note 1)	Common Stock		Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	109,644,474	$	1,096	$	91,077	$	2,355,448	$	2,447,621	$	12	$	2,447,633
Net income	—	—		—		87,478		87,478		1,021		88,499
Shares issued under share-based awards	631,622	6		23		—		29		—		29
Tax withholding paid on behalf of employees for share-based awards	—	—		(9,076)		—		(9,076)		—		(9,076)
Stock-based compensation expense	—	—		5,272		—		5,272		—		5,272
Share repurchases	(5,295,236)	(52)		(123,038)		—		(123,090)		—		(123,090)
Balance at March 31, 2022	104,980,860	$	1,050	$	—	$	2,407,184	$	2,408,234	$	1,033	$	2,409,267

See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE HOMES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	75,857	$	88,499
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	7,054		5,285
Equity in (income) loss of unconsolidated entities, net	(227)		9
Amortization of stock-based compensation	3,861		5,272
Charges for impairments and lot option abandonments	717		766
Returns on investments in unconsolidated entities, net	—		2,253
Changes in assets and liabilities:
Real estate inventories	31,965		(233,238)
Receivables	28,373		247
Other assets	(429)		(1,622)
Accounts payable	(4,780)		(8,839)
Accrued expenses and other liabilities	(6,752)		25,254
Net cash provided by (used in) operating activities	135,639		(116,114)
Cash flows from investing activities:
Purchases of property and equipment	(6,501)		(12,547)
Net investments in unconsolidated entities	(2,951)		(7,141)
Net cash used in investing activities	(9,452)		(19,688)
Cash flows from financing activities:
Repayment of debt	—		(504)
Distributions to noncontrolling interests	(2,395)		(382)
Proceeds from issuance of common stock under share-based awards	232		29
Tax withholding paid on behalf of employees for share-based awards	(9,780)		(9,076)
Share repurchases	(37,610)		(123,090)
Net cash used in financing activities	(49,553)		(133,023)
Net increase (decrease) in cash and cash equivalents	76,634		(268,825)
Cash and cash equivalents–beginning of period	889,664		681,528
Cash and cash equivalents–end of period	966,298		412,703

See accompanying condensed notes to the unaudited consolidated financial statements.

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TRI POINTE HOMES, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.    Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

Tri Pointe is engaged in the design, construction and sale of innovative single-family attached and detached homes across ten states, including Arizona, California, Colorado, Maryland, Nevada, North Carolina, South Carolina, Texas, Virginia and Washington, and the District of Columbia.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 due to seasonal variations and other factors.

The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2023 and December 31, 2022 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation.

Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.

Use of Estimates

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

Cash and Cash Equivalents and Concentration of Credit Risk

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Under ASC 606, we apply the following steps to determine the timing and amount of revenue to recognize: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

Home sales revenue

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We generate the majority of our total revenues from home sales, which consists of our core business operation of building and delivering completed homes to homebuyers. Home sales revenue and related profit is generally recognized when title to and possession of the home are transferred to the homebuyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied in less than one year from the original contract date. Included in home sales revenue are forfeited deposits, which occur when homebuyers cancel home purchase contracts that include a nonrefundable deposit. Both revenue from forfeited deposits and deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers are immaterial.

Land and lot sales revenue

Historically, we have generated land and lot sales revenue from a small number of transactions, although in some periods we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to be material, but we still consider these sales to be an ordinary part of our business, thus meeting the definition of contracts with customers. Similar to our home sales, revenue from land and lot sales is typically fully recognized when the land and lot sales transactions are consummated, at which time no further performance obligations are left to be satisfied. Some of our historical land and lot sales have included future profit participation rights. We will recognize future land and lot sales revenue in the periods in which all closing conditions are met, subject to the constraint on variable consideration related to profit participation rights, if such rights exist in the sales contract.

Other operations revenue

The majority of our homebuilding other operations revenue relates to a ground lease included in our West segment. We are responsible for making lease payments to the landowner, and we collect sublease payments from the owners of the buildings. This ground lease is accounted for in accordance with Accounting Standards Topic 842 (“ASC 842”), Leases. We do not recognize a material profit on this ground lease.

Financial services revenues

Tri Pointe Solutions is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, Tri Pointe Assurance title and escrow services operations, and Tri Pointe Advantage property and casualty insurance agency operations.

Mortgage financing operations

Tri Pointe Connect was formed as a joint venture with an established mortgage lender. The joint venture acts as a preferred mortgage loan broker to our homebuyers in all of the markets in which we operate, generating income from fees paid by third party lenders for the successful funding and closing of loans for homebuyers that originate through Tri Pointe Connect. Due to our ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance, Tri Pointe Connect is fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests.

Title and escrow services operations

Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales transaction, at which time no further performance obligations are left to be satisfied. Tri Pointe Assurance revenue is included in the Financial Services section of our consolidated statements of operations.

Property and casualty insurance agency operations

Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty insurance agency services that help facilitate the closing process in all of the markets in which we operate. The total consideration for these services, including renewal options, is estimated upon the issuance of the initial insurance policy, subject to constraint. Tri Pointe Advantage revenue is included in the Financial Services section of our consolidated statements of operations.

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Recently Issued Accounting Standards Not Yet Adopted

No recent accounting pronouncements or changes in accounting pronouncements have been issued or adopted since those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that are of material significance, or have potential material significance, to the Company.

2.    Segment Information

We operate two principal businesses: homebuilding and financial services.

In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments within our homebuilding business, we have considered similar economic and other characteristics, including product types, average sales prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments and, as such, our homebuilding segments are reported under the following hierarchy:

West region: Arizona, California, Nevada and Washington

Central region: Colorado and Texas

East region: District of Columbia, Maryland, North Carolina, South Carolina and Virginia

Our Tri Pointe Solutions financial services operation is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, our Tri Pointe Assurance title and escrow services operations, and our Tri Pointe Advantage property and casualty insurance agency operations. For further details, see Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.

Corporate is a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit, 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. All of the expenses incurred by Corporate are allocated to each of the homebuilding reporting segments based on their respective percentage of revenues.

The reportable segments follow the same accounting policies used for our consolidated financial statements, as 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.

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Total revenues and income before income taxes for each of our reportable segments were as follows (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenues
West	$	480,941	$	530,496
Central	166,140		137,097
East	123,704		59,899
Total homebuilding revenues	770,785		727,492
Financial services	8,876		8,752
Total	$	779,661	$	736,244
Income before income taxes
West	$	72,911	$	100,557
Central	13,939		12,951
East	13,312		1,726
Total homebuilding income before income taxes	100,162		115,234
Financial services	3,045		3,490
Total	$	103,207	$	118,724

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, 2023		December 31, 2022
Real estate inventories
West	$	2,254,286	$	2,258,606
Central	594,189		598,700
East	293,937		316,543
Total	$	3,142,412	$	3,173,849
Total assets(1)
West	$	2,549,111	$	2,552,121
Central	756,928		761,082
East	355,119		376,129
Corporate	1,036,791		978,748
Total homebuilding assets	4,697,949		4,668,080
Financial services	41,291		51,860
Total	$	4,739,240	$	4,719,940

__________

(1)    Total assets as of March 31, 2023 and December 31, 2022 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2023 and December 31, 2022 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets.

3.    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):

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	Three Months Ended March 31,
	2023		2022
Numerator:
Net income available to common stockholders	$	74,742	$	87,478
Denominator:
Basic weighted-average shares outstanding	101,019,253		107,326,911
Effect of dilutive shares:
Stock options and unvested restricted stock units	687,185		870,574
Diluted weighted-average shares outstanding	101,706,438		108,197,485
Earnings per share
Basic	$	0.74	$	0.82
Diluted	$	0.73	$	0.81
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share	2,671,754		2,405,692

4.    Receivables

Receivables consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Escrow proceeds and other accounts receivable, net	$	84,709	$	113,082
Warranty insurance receivable (Note 13)	56,367		56,367
Total receivables	$	141,076	$	169,449

Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables based on an expected credit loss approach. Receivables were net of allowances for doubtful accounts of $472,000 as of both March 31, 2023 and December 31, 2022.

5.    Real Estate Inventories

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

	March 31, 2023		December 31, 2022
Real estate inventories owned:
Homes completed or under construction	$	1,191,754	$	1,293,681
Land under development	1,335,789		1,279,394
Land held for future development	158,908		140,725
Model homes	240,333		231,157
Total real estate inventories owned	2,926,784		2,944,957
Real estate inventories not owned:
Land purchase and land option deposits	215,628		228,892
Total real estate inventories not owned	215,628		228,892
Total real estate inventories	$	3,142,412	$	3,173,849

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. The increase in land held for future development as of March 31, 2023 compared to December 31, 2022 is attributable to two projects located in our West reporting segment that were transferred from land under development.

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Real estate inventories not owned represents deposits related to land purchase and land and lot option agreements. For further details, see Note 7, Variable Interest Entities.

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

	Three Months Ended March 31,
	2023		2022
Interest incurred	$	37,479	$	28,553
Interest capitalized	(37,479)		(28,553)
Interest expensed	$	—	$	—
Capitalized interest in beginning inventory	$	191,411	$	173,563
Interest capitalized as a cost of inventory	37,479		28,553
Interest previously capitalized as a cost of inventory, included in cost of sales	(20,251)		(17,065)
Capitalized interest in ending inventory	$	208,639	$	185,051

Interest is capitalized to real estate inventory during development and other qualifying activities. During all periods presented, we capitalized all interest incurred to real estate inventory in accordance with ASC Topic 835, Interest, as our qualified assets exceeded our debt. Interest that is capitalized to real estate inventory is included in cost of home sales or cost of land and lot sales as related units or lots are delivered. Interest that is expensed as incurred is included in other (expense) income, net.

Real Estate Inventory Impairments and Land Option Abandonments

Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Real estate inventory impairments	$	—	$	—
Land and lot option abandonments and pre-acquisition charges	717		766
Total	$	717	$	766

Impairments of real estate inventory, if any, 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.

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. 

Real estate inventory impairments and land option abandonments are recorded in cost of home sales and cost of land and lot sales on the consolidated statements of operations.

6.    Investments in Unconsolidated Entities

As of March 31, 2023, we held equity investments in twelve active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 7% to 50%, depending on the investment, with no controlling interest held in any of these investments.

Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are as follows (in thousands):

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	March 31, 2023		December 31, 2022
Assets
Cash	$	22,575	$	34,556
Receivables	36,298		30,893
Real estate inventories	451,417		458,121
Other assets	11,237		7,751
Total assets	$	521,527	$	531,321
Liabilities and equity
Accounts payable and other liabilities	$	145,388	$	149,172
Company’s equity	134,071		129,837
Outside interests’ equity	242,068		252,312
Total liabilities and equity	$	521,527	$	531,321

Results of operations from unconsolidated entities (in thousands):

	Three Months Ended March 31,
	2023		2022
Net sales	$	22,138	$	5,323
Other operating expense	(21,653)		(5,444)
Other loss, net	(3)		—
Net income (loss)	$	482	$	(121)
Company’s equity in income (loss) of unconsolidated entities	$	227	$	(9)

7.    Variable Interest Entities

Land and Lot Option Agreements

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

We analyze each of our land and lot option agreements and other similar contracts under the provisions of Accounting Standards Topic 810 (“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 and lot option agreements have no recourse against us. The maximum exposure to loss under our land and lot option agreements is generally 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 landowner and budget shortfalls and savings will be borne by us. Additionally, we have entered into land banking arrangements which require us to complete development work even if we terminate the option to procure land or lots.

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

	March 31, 2023						December 31, 2022
	Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs		Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs
Unconsolidated VIEs	$	200,168	$	1,055,531	N/A		$	207,846	$	1,129,369	N/A
Other land option agreements	15,460		170,658		N/A		21,046		210,964		N/A
Total	$	215,628	$	1,226,189	$	—	$	228,892	$	1,340,333	$	—

Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not with VIEs.

In addition to the deposits presented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $14.3 million and $13.8 million as of March 31, 2023 and December 31, 2022, respectively. These pre-acquisition costs are included in real estate inventories as land under development on our consolidated balance sheets.

Tri Pointe Connect Joint Venture

During the first quarter of 2022, a reconsideration event under ASC 810 occurred for our Tri Pointe Connect joint venture that gave us the ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance. Based on our reassessment, we concluded that the mortgage financing joint venture is a VIE and we are the primary beneficiary based on our controlling financial interest. As a result, beginning in January 2022, the joint venture is accounted for as a consolidated VIE. As of January 1, 2022, the accompanying consolidated balance sheets include the assets, liabilities and noncontrolling interests of this VIE. As of March 31, 2023, the accompanying consolidated balance sheets included the carrying value of the VIE’s assets of $6.4 million of cash and $5.1 million of other assets, $3.4 million of accrued expenses and other liabilities, and $2.9 million in noncontrolling interests.

8.    Goodwill and Other Intangible Assets

As of March 31, 2023 and December 31, 2022, $139.3 million of goodwill is included in goodwill and other intangible assets, net on each of the consolidated balance sheets, which was recorded in connection with our merger with Weyerhaeuser Real Estate Company (“WRECO”) in 2014. In addition, as of March 31, 2023 and December 31, 2022, we have one intangible asset with a carrying amount of $17.3 million comprised of a Tri Pointe Homes trade name, which has an indefinite useful life and is non-amortizing, resulting from the acquisition of WRECO in 2014.

Goodwill and other intangible assets are evaluated for impairment on an annual basis, or more frequently if indicators of impairment exist.

9.    Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid expenses	$	17,959	$	20,471
Refundable fees and other deposits	7,107		5,226
Development rights, held for future use or sale	1,192		1,192
Deferred loan costs—loans payable	6,155		6,515
Operating properties and equipment, net	66,880		67,430
Lease right-of-use assets	63,700		63,918
Other	936		935
Total	$	163,929	$	165,687

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10.    Accrued Expenses and Other Liabilities

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

	March 31, 2023		December 31, 2022
Accrued payroll and related costs	$	22,352	$	60,682
Warranty reserves (Note 13)	101,527		104,375
Estimated cost for completion of real estate inventories	107,792		108,072
Customer deposits	43,439		42,027
Accrued income taxes payable	44,193		17,280
Accrued interest	23,972		9,351
Other tax liability	2,741		4,099
Lease liabilities	77,472		77,728
Other	12,787		19,420
Total	$	436,275	$	443,034

11.    Senior Notes and Loans Payable

Senior Notes

The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
5.875% Senior Notes due June 15, 2024	$	450,000	$	450,000
5.250% Senior Notes due June 1, 2027	300,000		300,000
5.700% Senior Notes due June 15, 2028	350,000		350,000
Discount and deferred loan costs	(8,491)		(9,376)
Total	$	1,091,509	$	1,090,624

In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity.

In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity.

Tri Pointe and its wholly owned subsidiary, Tri Pointe Homes Holdings, Inc., are co-issuers of the $450 million aggregate principal amount 5.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were issued at 98.15% of their aggregate principal amount in June of 2014. The net proceeds from the offering of the 2024 Notes was $429.0 million, after debt issuance costs and discounts. The 2024 Notes mature on June 15, 2024, with interest payable semiannually in arrears on June 15 and December 15 of each year until maturity.

As of March 31, 2023, there were $7.2 million of capitalized debt financing costs, included in senior notes, net 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 $18.8 million and $3.2 million as of March 31, 2023 and December 31, 2022, respectively.

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Loans Payable

The Company’s outstanding loans payable consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Term loan facility	$	250,000	$	250,000
Seller financed loans	37,427		37,427
Total	$	287,427	$	287,427

On June 29, 2022, we entered into a Third Modification Agreement (the “Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019. The Modification, among other things, (i) increased the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $650.0 million to $750.0 million, (ii) increased the sublimit for issuance of letters of credit under the Revolving Facility from $100 million to $150 million and (iii) extended the maturity date of both the Revolving Facility and term loan facility (the “Term Facility”) under the Credit Agreement to June 29, 2027. We may increase the Credit Facility to not more than $1.2 billion in the aggregate, at our request, upon satisfaction of specified conditions. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.

As of March 31, 2023, we had no outstanding debt under the Revolving Facility and there was $691.4 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2023, we had $250 million outstanding debt under the Term Facility with an interest rate of 4.55%. As of March 31, 2023, there were $6.2 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 remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Term Facility was $346,000 and $1.5 million as of March 31, 2023 and December 31, 2022, respectively.

At March 31, 2023 and December 31, 2022, we had outstanding letters of credit of $58.6 million and $58.9 million, respectively. 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.

As of March 31, 2023 and December 31, 2022, we had $37.4 million outstanding related to one seller-financed loan to acquire lots for the construction of homes. Principal on this loan is expected to mature in 2023, provided certain achievements are met. The seller-financed loan accrues interest at an imputed interest rate of 4.50% per annum.

Interest Incurred

During the three months ended March 31, 2023 and 2022, the Company incurred interest of $37.5 million and $28.6 million, respectively, related to all debt during the period. Included in interest incurred are amortization of deferred financing and Senior Note discount costs of $1.2 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively. Accrued interest related to all outstanding debt at March 31, 2023 and December 31, 2022 was $24.0 million and $9.4 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 those relating to consolidated tangible net worth, leverage, liquidity or interest coverage, and a spec unit inventory test. The Credit Facility also requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.

The Company was in compliance with all applicable financial covenants as of March 31, 2023 and December 31, 2022.

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12.    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, 2023 and December 31, 2022, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

		March 31, 2023				December 31, 2022
	Hierarchy	Book Value		Fair Value		Book Value		Fair Value
Senior Notes(1)	Level 2	$	1,098,685	$	1,041,250	$	1,098,425	$	1,040,750
Term loan(2)	Level 2	$	250,000	$	250,000	$	250,000	$	250,000
Seller financed loans(3)	Level 2	$	37,427	$	37,427	$	37,427	$	37,427

 __________

(1)The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $7.2 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of the Senior Notes at March 31, 2023 and December 31, 2022 is based on quoted market prices.

(2)The estimated fair value of the Term Loan Facility as of March 31, 2023 and December 31, 2022 approximated book value due to the variable interest rate terms of this loan.

(3)The estimated fair value of our seller financed loan as of December 31, 2022 approximated book value due to the short term nature of these loans.

At March 31, 2023 and December 31, 2022, the carrying value of cash and cash equivalents and receivables approximated fair value due to their short-term nature.

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 indicating the carrying value is not recoverable. No carrying values were adjusted to fair value for the three months ended March 31, 2023 or the year ended December 31, 2022. 

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

We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. Accordingly, it is possible that the ultimate outcome of any matter, 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, we had zero legal reserves as of March 31, 2023 and December 31, 2022, respectively.

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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 warranty and construction defect-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. 

Our warranty reserve and related estimated insurance recoveries are based on actuarial analysis that uses our historical claim and expense data, as well as industry data to estimate these overall costs and related recoveries. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. Our warranty reserve may also include an estimate of future fit and finish warranty claims to the extent not contemplated in the actuarial analysis. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a warranty or construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of product we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for variability in these underlying assumptions, our actual future costs could differ from those estimated. 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.

We also record expected recoveries from insurance carriers based on actual insurance claims made and actuarially determined amounts that depend on various factors, including the above-described reserve estimates, our insurance policy coverage limits for the applicable policy years and historical recovery rates. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. Outstanding warranty insurance receivables were $56.4 million as of both March 31, 2023 and December 31, 2022, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheets.

Warranty reserve activity consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Warranty reserves, beginning of period	$	104,375	$	103,976
Warranty reserves accrued	5,902		4,721
Warranty expenditures	(8,750)		(5,663)
Warranty reserves, end of period	$	101,527	$	103,034

Performance Bonds

We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. The beneficiaries of the bonds are various municipalities. As of March 31, 2023 and December 31, 2022, the Company had outstanding surety bonds totaling $692.0 million and $710.8 million, respectively. As of March 31, 2023 and December 31, 2022, our estimated cost to complete obligations related to these surety bonds was $411.1 million and $443.7 million, respectively.

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Lease Obligations

Under ASC 842 we recognize a right-of-use lease asset and a lease liability for contracts deemed to contain a lease at the inception of the contract. Our lease population is fully comprised of operating leases, which are now recorded at the net present value of future lease obligations existing at each balance sheet date. At the inception of a lease, or if a lease is subsequently modified, we determine whether the lease is an operating or financing lease. Key estimates involved with ASC 842 include the discount rate used to measure our future lease obligations and the lease term, where considerations include renewal options and intent to renew. Lease right-of-use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities on our consolidated balance sheet.

Operating Leases

We lease certain property and equipment under non-cancelable operating leases. Office leases are for terms of up to ten years and generally provide renewal options. In most cases, we expect that, in the normal course of business, leases that expire will be renewed or replaced by other leases. Equipment leases are typically for terms of three to four years.

Ground Leases

In 1987, we obtained two 55-year ground leases of commercial property that provided for three renewal options of ten years each and one 45-year renewal option. We exercised the three 10-year extensions on one of these ground leases to extend the lease through 2071. The commercial buildings on these properties have been sold and the ground leases have been sublet to the buyers.

For one of these leases, we are responsible for making lease payments to the landowner, and we collect sublease payments from the buyers of the buildings. This ground lease has been subleased through 2041 to the buyers of the commercial buildings. For the second lease, the buyers of the buildings are responsible for making lease payments directly to the landowner, however, we have guaranteed the performance of the buyers/lessees. See below for additional information on leases (dollars in thousands):

	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Lease Cost
Operating lease cost (included in SG&A expense)	$	2,845	$	2,499
Ground lease cost (included in other operations expense)	663		635
Sublease income, operating leases	—		—
Sublease income, ground leases (included in other operations revenue)	(673)		(644)
Net lease cost	$	2,835	$	2,490
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows (included in operating cash flows)	$	2,429	$	3,381
Ground lease cash flows (included in operating cash flows)	$	663	$	663
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,927	$	83

	March 31, 2023		December 31, 2022
Weighted-average discount rate:
Operating leases	4.7	%	4.7	%
Ground leases	10.2	%	10.2	%
Weighted-average remaining lease term (in years):
Operating leases	6.8		7.0
Ground leases	45.1		45.3

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The future minimum lease payments under our operating leases are as follows (in thousands):

	Property, Equipment and Other Leases		Ground Leases (1)
Remaining in 2023	$	6,973	$	2,428
2024	9,106		3,237
2025	8,717		3,237
2026	7,633		3,237
2027	6,893		3,237
Thereafter	18,092		78,640
Total lease payments	$	57,414	$	94,016
Less: Interest	8,215		65,743
Present value of operating lease liabilities	$	49,199	$	28,273

 __________

(1)    Ground leases are fully subleased through 2041, representing $60.2 million of the $94.0 million future ground lease obligations.

14.    Stock-Based Compensation

2022 Long-Term Incentive Plan

On April 20, 2022, our stockholders approved the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “2022 Plan”), which had been previously approved by our board of directors. The 2022 Plan replaced the Company’s prior stock compensation plan, the TRI Pointe Group, Inc. Amended and Restated 2013 Long-Term Incentive Plan (the “2013 Plan”). The 2022 Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The 2022 Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2022 Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation.

The number of shares of our common stock that may be issued under the 2022 Plan is 7,500,000 shares. No new awards have been or will be granted under the 2013 Plan from and after February 23, 2022. Any awards outstanding under the 2013 Plan will remain subject to and be paid under the 2013 Plan, and any shares subject to outstanding awards under the 2013 Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2022 Plan.

To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2022 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 will again be available under the 2022 Plan. However, the 2022 Plan prohibits us from re-using shares that are tendered or surrendered to pay the exercise cost or tax obligation for stock options and SARs.

As of March 31, 2023, there were 6,415,172 shares available for future grant under the 2022 Plan.

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

	Three Months Ended March 31,
	2023		2022
Total stock-based compensation	$	3,861	$	5,272

Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations. As of March 31, 2023, total unrecognized stock-based compensation expense related to all stock-based awards was $32.4 million and the weighted average term over which the expense was expected to be recognized was 2.3 years.

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Summary of Stock Option Activity

The following table presents a summary of stock option awards for the three months ended March 31, 2023:

	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2022	159,255	$	15.08	0.9	$	565
Granted	—	—		—	—
Exercised	(48,592)	$	14.87	—	—
Forfeited	—	$	—	—	—
Options outstanding at March 31, 2023	110,663	$	15.17	0.9	$	1,064
Options exercisable at March 31, 2023	110,663	$	15.17	0.9	$	1,064

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.

Summary of Restricted Stock Unit Activity

The following table presents a summary of RSUs for the three months ended March 31, 2023:

	Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in thousands)
Nonvested RSUs at December 31, 2022	3,679,521	$	19.93	$	68,402
Granted	1,209,608	$	23.21	—
Vested	(1,133,424)	$	19.18	—
Forfeited	(126,093)	$	18.24	—
Nonvested RSUs at March 31, 2023	3,629,612	$	21.28	$	77,238

RSUs that vested, as reflected in the table above, during the three months ended March 31, 2023 include previously granted time-based RSUs. RSUs that were forfeited, as reflected in the table above, during the three months ended March 31, 2023 include performance-based RSUs and time-based RSUs that were forfeited for no consideration.

On February 22, 2023, the Company granted an aggregate of 505,200 time-based RSUs to certain 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 February 22, 2023 was measured using a price of $23.21 per share 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 February 22, 2023, the Company granted an aggregate of 704,408 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer, Chief Human Resources Officer and division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2023 to December 31, 2025. The fair value of these performance-based RSUs was measured using a price of $23.21, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

On February 22, 2022, the Company granted an aggregate of 629,520 time-based RSUs to certain employees and officers. The RSUs granted vest in equal installments annually on the anniversary of the grant date over a three-year period. The

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fair value of each RSU granted on February 22, 2022 was measured using a price of $21.00 per share 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 February 22, 2022, the Company granted an aggregate of 668,150 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer and Chief Human Resources Officer. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue, and (ii) 50% to pre-tax earnings. 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. Any award earned based on performance achieved may be increased or decreased by 25% based on the Company’s total stockholder return (“TSR”) relative to its peer-group homebuilders. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was determined to be $22.30 per share based on a Monte Carlo simulation. Each award will be expensed over the requisite service period.

On February 22, 2022, the Company granted an aggregate of 235,078 performance-based RSUs to the Company’s division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was measured using a price of $21.00, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

As RSUs vest for employees, 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.

15.    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 $34.9 million as of both March 31, 2023 and December 31, 2022. We had a valuation allowance related to those net deferred tax assets of $3.4 million as of both March 31, 2023 and December 31, 2022. 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 $27.4 million and $30.2 million for the three months ended March 31, 2023 and 2022, respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company did not have any uncertain tax positions recorded as of March 31, 2023 and December 31, 2022. The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions. We are

currently under examination by California for the 2020 and 2021 tax years. The outcome of this examination is not yet determinable.

16.    Related Party Transactions

We had no related party transactions for the three months ended March 31, 2023 and 2022.

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17.    Supplemental Disclosure to Consolidated Statements of Cash Flows

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

	Three Months Ended March 31,
	2023		2022
Supplemental disclosure of cash flow information:
Interest paid (capitalized), net	$	(15,866)	$	(17,869)
Income taxes paid, net	$	329	$	—
Supplemental disclosures of noncash activities:
Amortization of senior note discount capitalized to real estate inventory	$	259	$	243
Amortization of deferred loan costs capitalized to real estate inventory	$	986	$	889

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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 “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on our current intentions, beliefs, expectations and predictions for the future, and you should not place undue reliance on these statements. These statements use forward-looking terminology, are based on various assumptions made by us, 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 what effect it will have on our operations, financial condition, or share price.

We undertake no, and hereby disclaim any, obligation to update or revise any forward-looking statements, unless required by law. However, we reserve the right to make such updates or revisions from time to time by press release, periodic report, or other method of public disclosure without the need for specific reference to this Quarterly Report on Form 10-Q. No such update or revision shall be deemed to indicate that other statements not addressed by such update or revision remain correct or create an obligation to provide any other updates or revisions.

Forward-Looking Statements

Forward-looking statements that are included in this Quarterly Report on Form 10-Q are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or other words that convey the uncertainty of future events or outcomes. 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, the outcome of legal proceedings, the anticipated impact of natural disasters or contagious diseases on our operations, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects and capital spending.

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 effects of general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, 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;

•the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels;

•access to adequate capital on acceptable terms;

•geographic concentration of our operations;

•levels of competition;

•the successful execution of our internal performance plans, including restructuring and cost reduction initiatives;

•the prices and availability of supply chain inputs, including raw materials, labor and home components;

•oil and other energy prices;

•the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries;

•the effects of weather, including the occurrence of drought conditions in parts of the western United States;

•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;

•the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious disease, such as COVID-19;

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•transportation costs;

•federal and state tax policies;

•the effects of land use, environment and other governmental laws and 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 homebuyers’ confidential information or other forms of cyber-attack; and

•other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and in other filings we make with the Securities and Exchange Commission (“SEC”).

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 review and consider carefully 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, 2022 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.

Overview and Outlook

The housing market began showing signs of improvement in January 2023, following a reduction in demand for new home orders in the second half of 2022. Despite instability in the banking sector and treasury markets, mortgage rates decreased modestly during the first quarter of 2023 as compared to the fourth quarter of 2022, which positively impacted our sales pace. We continue to focus on key economic indicators that could impact the housing industry as the economy contends with the current inflationary cycle and the impact of higher interest rates resulting from the Federal Reserve’s series of aggressive federal funds rate hikes. We remain encouraged by the fundamental backdrop of housing due to, among other things, the lack of available supply, including due to less competition from the resale market, as existing homeowners are less motivated to sell and surrender their historically low interest rates. However, we recognize that the housing industry continues to navigate many uncertain macroeconomic factors and expect demand to remain potentially volatile. As such, we continue to focus on maintaining a strong balance sheet and ample liquidity. Further, as homebuyers further acclimate to the current higher interest rate environment, we continue to analyze price positioning and product offerings at our communities and look for opportunities to drive cost savings to produce more affordable price points for homebuyers. Notwithstanding these near-term challenges, due to the lack of available supply and favorable buyer demographics, we remain optimistic about the long-term outlook for housing.

Highlights of the quarter include 1,619 net new home orders at a monthly absorption rate of 4.0 orders per average selling community. We opened 18 new communities during the quarter, which helped us achieve a 22% increase in average selling communities compared to the prior-year period. We increased our home sales revenue to $768.4 million, as we delivered 1,065 new homes at an average sales price of $742,000. Our homebuilding gross margin percentage for the quarter was 23.5% and our sales and marketing and general and administrative (“SG&A”) expense as a percentage of home sales revenue was 11.5%. These factors led to net income available to common stockholders of $74.7 million, or diluted earnings per share of $0.73. In addition, we ended the quarter with total liquidity of $1.7 billion, including cash and cash equivalents of $966.3 million and $691.4 million of availability under our Credit Facility. Further, our ratio of debt-to-capital at quarter end was an all-time low of 32.5%.

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Consolidated Financial Data (in thousands, except per share amounts):

	Three Months Ended March 31,
	2023		2022
Homebuilding:
Home sales revenue	$	768,405	$	725,251
Land and lot sales revenue	1,706		1,597
Other operations revenue	674		644
Total revenues	770,785		727,492
Cost of home sales	588,118		530,660
Cost of land and lot sales	1,443		475
Other operations expense	665		646
Sales and marketing	41,862		32,239
General and administrative	46,366		48,456
Homebuilding income from operations	92,331		115,016
Equity in income (loss) of unconsolidated entities	227		(55)
Other income, net	7,604		273
Homebuilding income before income taxes	100,162		115,234
Financial Services:
Revenues	8,876		8,752
Expenses	5,831		5,308
Equity in income of unconsolidated entities	—		46
Financial services income before income taxes	3,045		3,490
Income before income taxes	103,207		118,724
Provision for income taxes	(27,350)		(30,225)
Net income	75,857		88,499
Net income attributable to noncontrolling interests	(1,115)		(1,021)
Net income available to common stockholders	$	74,742	$	87,478
Earnings per share
Basic	$	0.74	$	0.82
Diluted	$	0.73	$	0.81

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022			Percentage Change
	Net New Home Orders	Average Selling Communities	Monthly Absorption Rates	Net New Home Orders	Average Selling Communities	Monthly Absorption Rates	Net New Home Orders		Average Selling Communities		Monthly Absorption Rates
West	954	78.2	4.1	1,109	64.3	5.7	(14)	%	22	%	(29)	%
Central	355	39.8	3.0	546	30.5	6.0	(35)	%	30	%	(50)	%
East	310	18.0	5.7	241	16.7	4.8	29	%	8	%	19	%
Total	1,619	136.0	4.0	1,896	111.5	5.7	(15)	%	22	%	(30)	%

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Net new home orders for the three months ended March 31, 2023 decreased by 277, or 15%, to 1,619, compared to 1,896 during the prior-year period. The decrease in net new home orders was due to a 30% decrease in monthly absorption rates, offset by an 22% increase in average selling communities. Despite the negative year-over-year order comparison, demand improved significantly during the quarter compared to the preceding quarter ended December 31, 2022. While both net new home order volume and monthly absorption rates are down compared to the same prior-year period, current-year period absorption levels remained elevated compared to our typical historical first quarter levels prior to the pandemic.

Our West segment reported a 14% decrease in net new home orders due to a 29% decrease in monthly absorption rates offset by a 22% increase in average selling communities. The 22% increase in average selling communities was due to growth in a majority of our West markets, with the greatest impact coming from Southern California. Our Central segment reported a 35% decrease in net new home orders due to a 50% decrease in monthly absorption rates offset by a 30% increase in average selling communities. The 30% increase in average selling communities was due to growth in our Austin, Dallas-Fort Worth and Houston markets. Our East segment reported a 29% increase in net new home orders due to a 19% increase in monthly absorption rates, along with an 8% increase in average selling communities. Net new home order growth in our East segment was driven primarily by our Charlotte market, where orders increased to 200 for the current-year period compared to 94 in the prior-year period, an increase of 106 orders, or 113%. Growth in average selling communities in our East segment was due to accelerated operations in both Charlotte and Raleigh, where average selling communities for the current-year period increased by 3.0 in each of these markets compared to the prior-year period.

Backlog Units, Dollar Value and Average Sales Price by Segment (dollars in thousands)

	As of March 31, 2023					As of March 31, 2022					Percentage Change
	Backlog Units	Backlog Dollar Value		Average Sales Price		Backlog Units	Backlog Dollar Value		Average Sales Price		Backlog Units		Backlog Dollar Value		Average Sales Price
West	1,200	$	963,560	$	803	2,380	$	1,936,552	$	814	(50)	%	(50)	%	(1)	%
Central	433	271,897		628		1,103	672,420		610		(61)	%	(60)	%	3	%
East	393	267,925		682		472	320,215		678		(17)	%	(16)	%	1	%
Total	2,026	$	1,503,382	$	742	3,955	$	2,929,187	$	741	(49)	%	(49)	%	—	%

Backlog units reflect the number of homes, net of actual cancellations experienced during the period, for which we have entered into a sales contract with a homebuyer but for which we have not yet delivered the home. Homes in backlog are generally delivered within seven to ten months from the time the sales contract is entered into, although we may experience cancellations of sales contracts prior to delivery. Our cancellation rate of homebuyers who contracted to buy a home but cancelled prior to delivery of the home (as a percentage of overall orders) was 10% and 8% during the three months ended March 31, 2023 and 2022, respectively. Our cancellation rate for the current-year period increased slightly due largely to the impact of higher and more volatile interest rates during the current-year period compared to the prior-year period during which rates were significantly lower. The dollar value of backlog was $1.5 billion as of March 31, 2023 compared to $2.9 billion as of March 31, 2022. The decrease in dollar value of backlog was due to a decrease in backlog units of 1,929, or 49%, to 2,026 as of March 31, 2023, compared to 3,955 at March 31, 2022.

Backlog dollar value in our West segment decreased 50% due to a 50% decrease in backlog units and a 1% decrease in average sales price. The decrease in backlog units is largely due to the slower market conditions experienced in the second half of 2022 which led to a lower backlog balance leading into the current year. Backlog dollar value in our Central segment decreased by 60% due to a 61% decrease in backlog units, offset by a 3% increase in average sales price. The decrease in backlog units is due primarily to the slower demand we experienced during the second half of 2022 which led to lower backlog leading into the current year. Backlog dollar value in our East segment decreased by 16% due to a 17% decrease in backlog units offset by a 1% increase in average sales price. The decrease in backlog units is largely due to the slower market conditions that persisted through the second half of 2022.

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New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands)

	Three Months Ended March 31, 2023					Three Months Ended March 31, 2022					Percentage Change
	New Homes Delivered	Home Sales Revenue		Average Sales Price		New Homes Delivered	Home Sales Revenue		Average Sales Price		New Homes Delivered		Home Sales Revenue		Average Sales Price
West	590	$	478,733	$	811	740	$	528,255	$	714	(20)	%	(9)	%	14	%
Central	254	165,968		653		263	137,097		521		(3)	%	21	%	25	%
East	221	123,704		560		96	59,899		624		130	%	107	%	(10)	%
Total	1,065	$	768,405	$	722	1,099	$	725,251	$	660	(3)	%	6	%	9	%

Home sales revenue increased $43.2 million to $768.4 million for the three months ended March 31, 2023 compared to the prior-year period. The increase was comprised of $65.6 million related to a $62,000 increase in average sales price of homes delivered in the three months ended March 31, 2023 compared to the prior-year period, offset by a $22.4 million decrease related to 34 fewer homes delivered during the three months ended March 31, 2023 compared to the prior-year period.

Home sales revenue in our West segment decreased 9% due to an 20% decrease in new homes delivered, offset by a 14% increase in average sales price during the current-year period. The decrease in new homes delivered was due a decrease in backlog units to start the current-year period compared to the prior-year period, partially offset by a large increase in backlog conversion rate. The decline in backlog units to start the current-year period was due largely to the impact of higher interest rates in that second half of 2022, which negatively impacted our net new home orders. The improvement we experienced in our backlog conversion rate was due to supply chain improvements and overall reductions in construction cycle times that had been disrupted due to the pandemic. The increase in average sales price was due to market and product mix factors as a higher percentage of homes delivered in our West segment were from markets and communities with higher average sales prices. Home sales revenue in our Central segment increased 21% due to a 25% increase in average sales price, offset by a 3% decrease in new homes delivered. The increase in average sales price is a reflection of the strong pricing power that existed through the first half of 2022 compared to the pricing levels that fueled deliveries that took place during the first quarter of 2022. The decrease in new homes delivered was due a decrease in backlog units to start the current-year period compared to the prior-year period. Similar to our West segment, this impact was offset some by a higher backlog conversion rate in the current-year period. Home sales revenue in our East segment increased by 107% due to a 130% increase in new homes delivered, offset by a 10% decrease in average sales price. The increase in new homes delivered was due to a higher backlog conversion rate during the current-year period compared to the prior-year period. All of the year-over-year delivery growth came from our newer Charlotte and Raleigh operations, where combined deliveries grew from 28 in the prior-year period to 175 during the current-year period. The decrease in average sales price was also due to our growth in the Carolinas, as housing prices tend to be generally lower in this market compared to our other markets in the East, which are located in the Washington D.C. area.

Homebuilding Gross Margins (dollars in thousands)

	Three Months Ended March 31,
	2023			%		2022			%
Home sales revenue	$	768,405		100.0	%	$	725,251		100.0	%
Cost of home sales	588,118			76.5	%	530,660			73.2	%
Homebuilding gross margin	180,287			23.5	%	194,591			26.8	%
Add:  interest in cost of home sales	20,226			2.6	%	17,065			2.4	%
Add:  impairments and lot option abandonments	717			0.1	%	489			0.1	%
Adjusted homebuilding gross margin(1)	$	201,230		26.2	%	$	212,145		29.3	%
Homebuilding gross margin percentage	23.5		%			26.8		%
Adjusted homebuilding gross margin percentage(1)	26.2		%			29.3		%

__________

(1)Non-GAAP financial measure (as discussed below).

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Our homebuilding gross margin percentage decreased to 23.5% for the three months ended March 31, 2023 compared to 26.8% for the prior-year period. The decrease in gross margin percentage was due largely to higher incentives utilized in the first quarter of 2023 compared to the prior-year period. Market conditions during the first quarter of 2022 were generally much stronger as higher interest rates had not yet impacted pricing or market sentiment. As our homes are generally delivered within seven to ten months from the time we enter into a sales contract, in the current environment—in which we are facing extended construction cycles compared to historical norms—the demand slowdown we experienced during the second half of 2022 has put some downward pressure on current-year gross margins, as a higher percentage of homes delivered have been impacted by higher incentives and/or price decreases. Excluding interest, impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 26.2% for the three months ended March 31, 2023 compared to 29.3% for the prior-year period.

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 most directly comparable GAAP measure.

Sales and Marketing, General and Administrative Expense (dollars in thousands)

	Three Months Ended March 31,				As a Percentage of Home Sales Revenue
	2023		2022		2023		2022
Sales and marketing	$	41,862	$	32,239	5.4	%	4.4	%
General and administrative (G&A)	46,366		48,456		6.0	%	6.7	%
Total sales and marketing and G&A	$	88,228	$	80,695	11.5	%	11.1	%

Total SG&A expense as a percentage of home sales revenue increased to 11.5% for the three months ended March 31, 2023, compared to 11.1% in the prior-year period. Total SG&A expense increased $7.5 million to $88.2 million for the three months ended March 31, 2023 from $80.7 million in the prior-year period.

Sales and marketing expense as a percentage of home sales revenue increased to 5.4% for the three months ended March 31, 2023, compared to 4.4% for the prior-year period. The increase was due primarily to higher broker commissions along with increased marketing and advertising expenses, all of which are a response to year-over-year decline in market conditions.

General and administrative (“G&A”) expense as a percentage of home sales revenue decreased to 6.0% of home sales revenue for the three months ended March 31, 2023 compared to 6.7% for the prior-year period. G&A expense decreased to $46.4 million for the three months ended March 31, 2023 compared to $48.5 million for the prior-year period, largely due to lower headcount and a reduction in professional services.

Interest

Interest, which we incurred principally to finance land acquisitions, land development and home construction, totaled $37.5 million and $28.6 million for the three months ended March 31, 2023 and 2022, respectively. All interest incurred in both periods was capitalized.

Other Income, Net

Other income, net for the three months ended March 31, 2023 and 2022 was income of $7.6 million and $273,000, respectively. The increase was primarily due to higher interest income stemming from the higher interest rates realized on our existing cash balances.

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Income Tax

For the three months ended March 31, 2023, we recorded a tax provision of $27.4 million based on an effective tax rate of 26.5%. For the three months ended March 31, 2022, we recorded a tax provision of $30.2 million based on an effective tax rate of 25.5%. The decrease in provision for income taxes is due to a $15.5 million decrease in income before income taxes to $103.2 million for the three months ended March 31, 2023, compared to $118.7 million for the prior-year period.

Financial Services Segment

Income before income taxes from our financial services operations decreased to $3.0 million for the three months ended March 31, 2023 compared to $3.5 million for the prior-year period. Beginning in the fiscal year ended December 31, 2022, Tri Pointe Connect was fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests.

Lots Owned or Controlled by Segment

Lots owned or controlled include our share of lots controlled by our unconsolidated land development joint ventures. Investments in joint ventures are described in Note 6, Investments in Unconsolidated Entities, of the notes to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q. The table below summarizes our lots owned or controlled by segment as of the dates presented:

	March 31,		Increase (Decrease)
	2023	2022	Amount	%
Lots Owned
West	12,131	14,967	(2,836)	(19)	%
Central	4,824	5,641	(817)	(14)	%
East	1,304	1,709	(405)	(24)	%
Total	18,259	22,317	(4,058)	(18)	%
Lots Controlled(1)
West	4,036	6,902	(2,866)	(42)	%
Central	6,432	7,947	(1,515)	(19)	%
East	3,328	4,662	(1,334)	(29)	%
Total	13,796	19,511	(5,715)	(29)	%
Total Lots Owned or Controlled(1)	32,055	41,828	(9,773)	(23)	%

__________

(1)As of March 31, 2023 and 2022, lots controlled represented lots that were under land or lot option contracts or purchase contracts. As of March 31, 2023 and 2022, lots controlled for Central include 3,210 and 3,317 lots, respectively, and East include 124 and 174 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.

Liquidity and Capital Resources

Overview

Our principal uses of capital for the three months ended March 31, 2023 were operating expenses, land purchases, land development, home construction and repurchases of our common stock. We used funds generated by our operations to meet our short-term working capital requirements. We monitor financing requirements to evaluate potential financing sources, including bank credit facilities and note offerings. We also continue to monitor the credit markets as 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, 2023, we had total liquidity of $1.7 billion, including cash and cash equivalents of $966.3 million and $691.4 million of availability under our Credit Facility, as described below, after considering the borrowing base provisions and outstanding letters of credit.

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 availability of particular assets, and our Company as a whole, to generate cash flow to cover the expected debt service.

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Senior Notes

In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15.

In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1.

Tri Pointe and its wholly owned subsidiary, Tri Pointe Homes Holdings, Inc., are co-issuers of the $450 million aggregate principal amount 5.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were issued at 98.15% of their aggregate principal amount in June of 2014. The net proceeds from the offering of the 2024 Notes was $429.0 million, after debt issuance costs and discounts. The 2024 Notes mature on June 15, 2024, with interest payable semiannually in arrears on June 15 and December 15 of each year until maturity.

Our outstanding senior notes (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. As of March 31, 2023, we were in compliance with the covenants required by our Senior Notes.

Loans Payable

On June 29, 2022, we entered into a Third Modification Agreement (the “Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019. The Modification, among other things, (i) increases the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $650.0 million to $750.0 million, (ii) increases the sublimit for issuance of letters of credit under the Revolving Facility from $100 million to $150 million and (iii) extends the maturity date of both the Revolving Facility and term loan facility (the “Term Facility”) under the Credit Agreement to June 29, 2027. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.

As of March 31, 2023, we had no outstanding debt under the Revolving Facility and there was $691.4 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2023, we had $250 million of outstanding debt under the Term Facility with an interest rate of 4.55%. As of March 31, 2023, there were $6.2 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 remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Term Facility was $346,000 and $1.5 million as of March 31, 2023 and December 31, 2022, respectively.

At March 31, 2023 and December 31, 2022, we had outstanding letters of credit of $58.6 million and $58.9 million, respectively. 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.

As of March 31, 2023 and December 31, 2022, we had $37.4 million outstanding related to one seller-financed loan to acquire lots for the construction of homes. Principal on this loan is expected to mature in 2023, provided certain achievements are met. The seller-financed loan accrues interest at an imputed interest rate of 4.50% per annum.

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Under the 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):

	Actual at March 31,			Covenant Requirement at March 31,
Financial Covenants	2023			2023
Consolidated Tangible Net Worth	$	2,699,326		$	1,861,662
(Not less than $1.58 billion plus 50% of net income and    50% of the net proceeds from equity offerings after    March 31, 2022)
Leverage Test	13.6		%	≤60%
(Not to exceed 60%)
Interest Coverage Test	6.9			≥1.5
(Not less than 1.5:1.0)

In addition, the Credit Facility limits the aggregate number of single family dwellings (where construction has commenced) owned by the Company or any guarantor that are not presold or model units to no more than the greater of (i) 50% of the number of housing unit closings (as defined) during the preceding 12 months; or (ii) 100% of the number of housing unit closings during the preceding 6 months. However, a failure to comply with this “Spec Unit Inventory Test” will not be an event of default or default, but will be excluded from the borrowing base as of the last day of the quarter in which the non-compliance occurs. The Credit Facility further requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.

As of March 31, 2023, we were in compliance with all of these financial covenants.

Stock Repurchase Program

On February 15, 2023, our board of directors approved a share repurchase program (the “2023 Repurchase Program”), authorizing the repurchase of shares of common stock with an aggregate value of up to $250 million through December 31, 2023. Purchases of common stock pursuant to the 2023 Repurchase Program 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 under the Securities Exchange Act of 1934, as amended. We are not obligated under the 2023 Repurchase Program to repurchase any specific number or amount of shares of common stock, and we may modify, suspend or discontinue the program at any time. Company management will determine the timing and amount of any repurchases in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions, legal requirements and applicable tax effects. During the three months ended March 31, 2023, we repurchased and retired an aggregate of 1,574,575 shares of our common stock under the Repurchase Program for $37.6 million.

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-net capital are calculated as follows (dollars in thousands):

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	March 31, 2023			December 31, 2022
Loans Payable	$	287,427		$	287,427
Senior Notes	1,091,509			1,090,624
Total debt	1,378,936			1,378,051
Stockholders’ equity	2,863,623			2,832,389
Total capital	$	4,242,559		$	4,210,440
Ratio of debt-to-capital(1)	32.5		%	32.7		%
Total debt	$	1,378,936		$	1,378,051
Less: Cash and cash equivalents	(966,298)			(889,664)
Net debt	412,638			488,387
Stockholders’ equity	2,863,623			2,832,389
Net capital	$	3,276,261		$	3,320,776
Ratio of net debt-to-net capital(2)	12.6		%	14.7		%

__________

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

(2)The ratio of net debt-to-net capital is a non-GAAP financial measure and is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-net 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-net 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.

Cash Flows—Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

For the three months ended March 31, 2023 as compared to the three months ended March 31, 2022:

•Net cash provided by (used in) in operating activities increased by $251.8 million to net cash provided of $135.6 million for the three months ended March 31, 2023 compared to net cash used by operating activities of $116.1 million for the prior-year period. The change was comprised primarily of a decrease in cash used for real estate inventory purchases of $265.2 million, offset by a mix of other offsetting changes in net income, other assets, receivables, accounts payable, accrued expenses and other liabilities, deferred income taxes and returns on investments in unconsolidated entities. 

•Net cash used in investing activities was $9.5 million for the three months ended March 31, 2023, compared to $19.7 million for the prior-year period. The decrease in net cash used in investing activities was due to a reduction in cash used related to both investments in unconsolidated entities and purchases of property and equipment.

•Net cash used in financing activities was $49.6 million for the three months ended March 31, 2023, compared to net cash used in financing activities of $133.0 million for the prior-year period. Net cash used in financing activities in the current-year period was primarily comprised of $37.6 million of cash used for share repurchases.

Off-Balance Sheet Arrangements and Contractual Obligations

In the ordinary course of business, we enter into purchase 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 and land banking arrangements 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. These option contracts and land banking arrangements generally require a non-refundable deposit for the right to acquire land and 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. In some cases, however, we may be contractually obligated to complete development work even if we terminate the option to procure land or lots. As of March 31, 2023, we had $215.6

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million of cash deposits, the majority of which are non-refundable, pertaining to land and lot option contracts and purchase contracts with an aggregate remaining purchase price of $1.2 billion (net of deposits). See Note 7, Variable Interest Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Our utilization of land and lot option contracts and land banking arrangements is dependent on, among other things, the availability of land sellers or land banking firms willing to enter into such arrangements, the availability of capital to finance the development of optioned land and 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, 2023, we held equity investments in twelve active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. See Note 6, Investments in Unconsolidated Entities, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Supplemental Guarantor Financial Information

2027 Notes and 2028 Notes

On June 5, 2017, Tri Pointe issued the 2027 Notes and on June 10, 2020, Tri Pointe issued the 2028 Notes. All of Tri Pointe’s 100% owned subsidiaries that are guarantors (each a “Guarantor” and, collectively, the “Guarantors”) of the Credit Facility, including Tri Pointe Homes Holdings, are party to supplemental indentures pursuant to which they jointly and severally guarantee Tri Pointe’s obligations with respect to these Notes. Each Guarantor of the 2027 Notes and the 2028 Notes is 100% owned by Tri Pointe, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2027 Notes and the 2028 Notes, as described in the following paragraph. All of our non-Guarantor subsidiaries have nominal assets and operations and are considered minor, as defined in Rule 3-10(h) of Regulation S-X. In addition, Tri Pointe has no independent assets or operations, as defined in Rule 3-10(h) of Regulation S-X. There are no significant restrictions upon the ability of Tri Pointe or any Guarantor to obtain funds from any of their respective wholly owned subsidiaries by dividend or loan. None of the assets of our subsidiaries represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X.

A Guarantor of the 2027 Notes and the 2028 Notes shall be released from all of its obligations under its guarantee if (i) all of the assets of the Guarantor have been sold; (ii) all of the equity interests of the Guarantor held by Tri Pointe or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into Tri Pointe or another Guarantor, with Tri Pointe or such other Guarantor surviving the merger; (iv) the Guarantor is designated “unrestricted” for covenant purposes; (v) the Guarantor ceases to guarantee any indebtedness of Tri Pointe or any other Guarantor which gave rise to such Guarantor guaranteeing the 2027 Notes or the 2028 Notes; (vi) Tri Pointe exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable supplemental indenture are discharged.

2024 Notes

Tri Pointe and Tri Pointe Homes Holdings are co-issuers of the 2024 Notes. All of the Guarantors (other than Tri Pointe Homes Holdings) have entered into supplemental indentures pursuant to which they jointly and severally guarantee the obligations of Tri Pointe and Tri Pointe Homes Holdings with respect to the 2024 Notes. Each Guarantor of the 2024 Notes is 100% owned by Tri Pointe and Tri Pointe Homes Holdings, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2024 Notes, as described below.

A Guarantor of the 2024 Notes shall be released from all of its obligations under its guarantee if (i) all of the assets of the Guarantor have been sold; (ii) all of the equity interests of the Guarantor held by Tri Pointe or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into Tri Pointe or another Guarantor, with Tri Pointe or such other Guarantor surviving the merger; (iv) the Guarantor is designated “unrestricted” for covenant purposes; (v) the Guarantor ceases to guarantee any indebtedness of Tri Pointe or any other Guarantor which gave rise to such Guarantor guaranteeing the 2024 Notes; (vi) Tri Pointe exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable indenture are discharged.

Tri Pointe’s non-Guarantor subsidiaries are considered minor, as defined in Rule 3-10(h) of Regulation S-X, therefore the consolidated financial statements represent the full issuer and guarantor subsidiary results.

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Inflation

Inflation in the United States remained elevated during the three months ended March 31, 2023, despite notable improvement from the prior-year peak levels. In 2022, inflation materially exceeded a target range generally deemed appropriate in the United States, and despite the improvements achieved since the Federal Reserve began increasing its benchmark rate, current levels remain elevated above the acceptable target. 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 and more volatile mortgage rates, which can significantly affect the affordability of mortgage financing to homebuyers, as well as the confidence of our consumer base. 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. 

Seasonality

We have experienced seasonal variations in our quarterly operating results and capital requirements. We typically take orders for more homes in the first half of the fiscal year than in the second half, which creates additional working capital requirements in the second and third quarters to build our inventories to satisfy the deliveries in 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 (including developments and volatility resulting from the war in Ukraine). In addition to the overall volume of orders and deliveries, our operating results in a given quarter are significantly affected by the number and characteristics of our active selling communities; timing of new community openings; the timing of land and lot sales; and the mix of product types, geographic locations and average sales prices of the homes delivered during the quarter. Therefore, our operating results in any given quarter will fluctuate compared to prior periods based on these factors.

Critical Accounting Estimates

The preparation of our consolidated financial statements requires the use of judgment in the application of accounting policies and estimates of uncertain matters. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2023 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued Accounting Standards

See Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies, to the accompanying condensed notes to unaudited 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, 2023. We did not enter into during the three months ended March 31, 2023, and currently do not hold, derivatives for trading or speculative purposes.

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, 2023.

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Our management, including our Principal Executive Officer and Principal Financial Officer, has evaluated our internal control over financial reporting to determine whether any change occurred during the three months ended March 31, 2023 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, 2023.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The information required with respect to this item can be found under Note 13, Commitments and Contingencies—Legal Matters, to the accompanying condensed notes to unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q and is incorporated by reference into this Item 1.

Item 1A.    Risk Factors

    There have been no material changes to the risk factors in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. If any of the risks discussed 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 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.”

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

On February 15, 2023, our board of directors approved the 2023 Repurchase Program, authorizing the repurchase of shares of common stock with an aggregate value of up to $250 million through December 31, 2023. Purchases of common stock pursuant to the 2023 Repurchase Program 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 under the Securities Exchange Act of 1934, as amended. We are not obligated under the 2023 Repurchase Program to repurchase any specific number or amount of shares of common stock, and we may modify, suspend or discontinue the program at any time. Company management will determine the timing and amount of any repurchases in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions, legal requirements and applicable tax effects. During the three months ended March 31, 2023, we repurchased and retired an aggregate of 1,574,575 shares of our common stock under the Repurchase Program for $37.6 million.

During the three months ended March 31, 2023, we repurchased and retired the following shares pursuant to our repurchase programs:

	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced program	Approximate dollar value of shares that may yet be purchased under the program
January 1, 2023 to January 31, 2023	—	$	—	—	$	250,000,000
February 1, 2023 to February 28, 2023	—	$	—	—	$	250,000,000
March 1, 2023 to March 31, 2023	1,574,575	$	23.87	1,574,575	$	212,420,984
Total	1,574,575	$	23.87	1,574,575

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Item 6.    Exhibits 

Exhibit Number	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation of Tri Pointe Homes, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (filed July 7, 2015))
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of Tri Pointe Homes, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8‑K (filed January 21, 2021))
3.3	Amended and Restated Bylaws of Tri Pointe Homes, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (filed October 27, 2016))
10.1†	Form of Performance-Based Restricted Stock Unit Award Agreement (Pre-Tax Earnings) (Executive Form)
10.2†	Form of Performance-Based Restricted Stock Unit Award Agreement (Revenue) (Executive Form)
10.3†	Form of Performance-Based Cash Award Agreement
22.1	List of guarantor subsidiaries of Tri Pointe Homes, Inc. (incorporated by reference to Exhibit 22.1 to the Company’s Annual Report on Form 10-K (filed February 21, 2023))
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 Homes, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statement of Cash Flows, and (iv) Condensed Notes to Consolidated Financial Statement.
104	Cover page from Tri Pointe Homes, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL (and contained in Exhibit 101).
†	Management Contract or Compensatory Plan or Arrangement

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SIGNATURES

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 Homes, Inc.
Date: April 27, 2023	By:	/s/ Douglas F. Bauer
		Douglas F. Bauer
		Chief Executive Officer
		(Principal Executive Officer)
Date: April 27, 2023	By:	/s/ Glenn J. Keeler
		Glenn J. Keeler
		Chief Financial Officer
		(Principal Financial Officer)

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EX-10.1

Exhibit 10.1

TRI POINTE HOMES, INC.
2022 LONG-TERM INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
PRE-TAX EARNINGS PERFORMANCE MEASUREMENT
(EXECUTIVE FORM)

Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), hereby grants to [NAME] (the “Holder”) as of [DATE] (the “Grant Date”), pursuant to the terms and conditions of the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “Plan”), an award of performance-based restricted stock units (the “Award” and the restricted stock units granted pursuant to this Agreement, the “Award Units”) with respect to a maximum of [###] shares (with [###] shares referred to as the “Target Award”) of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), upon and subject to the restrictions, terms, and conditions set forth in the Plan and this agreement (the “Agreement”). Capitalized terms used in this Agreement and not defined herein or set forth in Attachment A have the respective meanings given to them in the Plan.

1.Award Subject to Acceptance of Agreement. The Award shall be null and void unless the Holder accepts this Agreement by executing it in the space provided below and returning such original execution copy to the Company, or by approving this Agreement by electronic means in a manner that has been approved by the Company.

2.Rights as a Stockholder. Each Award Unit shall represent the Holder’s right to receive one share of the Company’s Common Stock if and to the extent that such Award Unit becomes vested pursuant to the terms and conditions of this Agreement and the Plan. The Holder shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until, and only to the extent, such shares become vested pursuant to Section 3 hereof and the Holder becomes a stockholder of record with respect to such shares. As of each date on which the Company pays a cash dividend to record owners of shares of Common Stock (a “Dividend Date”), then the number of Award Units and shares subject to the Award shall increase by (i) the product of the total number of shares subject to the Award immediately prior to such Dividend Date multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such Dividend Date, divided by (ii) the Fair Market Value of a share of Common Stock on such Dividend Date. Any such additional Award Units and shares shall be subject to the same restrictions, vesting conditions, and payment terms set forth herein as the Award Units and shares to which they relate.

3.Performance Period and Vesting.

3.1.Performance-Based Vesting Conditions. The Award granted pursuant to this Agreement shall constitute a Performance Award (as defined in the Plan). Except as otherwise provided in this Section 3, if and to the extent that all or a portion of the Award (as determined in accordance with the provisions of Attachment B) shall vest on the Vesting Date as a result of the Company satisfying the Performance Measures set forth in Attachment B to this Agreement over the Performance Period, the Holder shall become vested in the Award Units, or the applicable portion thereof, if any, on the Vesting Date, provided that the Holder does not incur a Separation from Service before the Vesting Date. As used herein, (i) the term “Performance Period” shall mean the three-year period beginning on [DATE]and ending on [DATE]and (ii) the term “Vesting Date” shall mean [DATE].If the Performance Period is shortened pursuant to Section 3.2 as a result of a Change in Control, appropriate adjustments to the performance targets, performance periods, and the determination of actual performance shall be made by the Committee in order to carry out the intent of this Agreement.

3.2.Change in Control and Acceleration. In the event a Change in Control occurs after the first day of the Performance Period but prior to the end of the Performance Period, the Performance Period shall terminate on the closing date of the Change in Control and the following provisions shall apply:

3.2.1.If (a) the closing of the Change in Control occurs on or before the 12-month anniversary of the first day of the Performance Period, (b) the Holder does not incur a Separation from Service before the date of the closing of the Change in Control, and (c) the Award is not assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control or otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Target Award shall vest as of the date of the closing of the Change in Control.

3.2.2.If (a) the closing of the Change in Control occurs on or before the 12-month anniversary of the first day of the Performance Period and (b) the Award is assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control, or is otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Target Award may become vested in accordance with the provisions of the last sentence of this Section 3.2.2. If (i) the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the Vesting Date, the Target Award shall become fully vested effective as of the Vesting Date or (ii) if the Holder suffers a Qualifying Termination before the Vesting Date, the Target Award shall become vested upon the later of the effective date of such Qualifying Termination and the closing of the Change in Control.

3.2.3.If (a) the closing of the Change in Control occurs after the 12-month anniversary of the first day of the Performance Period, (b) the Holder does not incur a Separation from Service before the date of the closing of the Change in Control, and (c) the Award is not assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control or otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Award shall vest as of the date of the closing of the Change in Control, but only with respect to a number of Award Units equal to the Change in Control Units.

3.2.4.If (a) the closing of the Change in Control transaction occurs after the 12-month anniversary of the first day of the Performance Period and (b) the Award is assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control, or is otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control transaction, the Award Units may become vested in accordance with the provisions of the last sentence of this Section 3.2.4, but only with respect to a number of Award Units equal to the Change in Control Units. If (i) the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the Vesting Date, such Change in Control Units shall become fully effective as of the Vesting Date or (ii) if the Holder suffers a Qualifying Termination before the Vesting Date and the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the date of such Qualifying Termination, the Change in Control Units shall become vested upon the later of the effective date of such Qualifying Termination and the closing of the Change in Control.

3.2.5.The portion of the Award Units that do not vest in the event of a Change in Control pursuant to Sections 3.2.1, 3.2.2, 3.2.3, or 3.2.4 (i.e., the total number of Award Units less the number of Award Units that become vested pursuant to Sections 3.2.1, 3.2.2, 3.2.3, and 3.2.4) shall be cancelled and forfeited by the Holder for no consideration on the date of the Change in Control.

3.3.Separation from Service; Failure to Satisfy Performance Measures.

3.3.1.Except as otherwise provided in the Plan and this Agreement, if the Holder incurs a Separation from Service before the Vesting Date for any reason, then the entire Award shall be immediately forfeited by the Holder for no consideration and cancelled, effective as of the date of the Holder’s Separation from Service.

3.3.2.If the Holder does not incur a Separation from Service before the Vesting Date, any Award Units in which the Holder does not become vested pursuant to the Performance Measures set forth in Attachment B shall be immediately forfeited by the Holder for no consideration and cancelled, effective as of the last day of the Performance Period.

3.4.Acceleration on Death or Disability; Retirement.

3.4.1.Death or Disability. Notwithstanding the provisions of Section 3.3.1 of this Agreement, if the Holder incurs a Separation from Service prior to the Vesting Date by reason of death or Disability, then the Performance Period shall terminate and 100% of the Target Award will immediately become vested.

3.4.2.Retirement. Notwithstanding the provisions of Section 3.3.1 of this Agreement, if the Holder incurs a Separation from Service prior to the Vesting Date by reason of Retirement, (A) the proportion of the Award Units vesting under this provision shall be equal to the number of days in the Performance Period that elapsed before the Separation from Service divided by the total number of days in the Performance Period, provided that a minimum of 365 days of vesting (but in no event more than 100%) shall be allotted to the Holder, and (B) the amount of the Award Units vesting under this provision shall be based on actual achievement of the Performance Measures for the Award measured at the end of the Performance Period; provided, however, that if, after providing a Retirement Notice but before the end of the Performance Period, the Holder incurs a Separation from Service due to death or Disability, the Award shall be treated as provided in Section 3.4.1 of this Agreement.

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4.Delivery of Certificates. Subject to Section 6, as soon as practicable after the vesting of Award Units, in whole or in part, but in no event later than March 15 of the calendar year immediately following the year in which Award Units become vested, the Company shall (i) deliver or cause to be delivered one or more certificates issued in the Holder’s name (or such other name as is acceptable to the Company and designated in writing by the Holder), or (ii) issue in book entry form registered in the name of the Holder (or such other name as is acceptable to the Company and designated in writing by the Holder) a written or electronic notice or statement representing the number of vested shares represented by such vested Award Units. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such delivery, except as otherwise provided in Section 6. Prior to the issuance to the Holder of the shares of Common Stock subject to the Award, the Holder shall have no direct or secured claim in any specific assets of the Company or in such shares of Common Stock, and will have the status of a general unsecured creditor of the Company.

5.Transfer Restrictions and Investment Representation.

5.1.Nontransferability of Award. The Award may not be transferred by the Holder other than by will or the laws of descent and distribution, pursuant to the designation of one or more beneficiaries on the form prescribed by the Company, a trust or entity established by the Holder for estate planning purposes, or a charitable organization designated by the Holder or pursuant to a qualified domestic relations order, in each case, without consideration. Except to the extent permitted by the foregoing sentence, the Award and the Award Units may not be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of the Award or the Award Units in violation of this Agreement or the Plan, the Award and the Award Units and all rights hereunder shall immediately become null and void.

5.2.Investment Representation. The Holder hereby represents and covenants that (a) any share of Common Stock acquired upon the vesting of the Award Units will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Holder shall submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any shares of Common Stock hereunder or (y) is true and correct as of the date of any sale of any such share, as applicable. As a further condition precedent to the delivery to the Holder of any shares of Common Stock subject to the Award, the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Board shall in its sole discretion deem necessary or advisable.

5.3.Additional Restrictions. If the Holder is, or becomes, a person subject to any policy of the Company providing for recoupment of performance-based compensation in the event of a restatement of the Company’s financial results, then Holder agrees the Award and the Award Units (and any shares of Common Stock issued with respect thereto) will be subject to such recoupment policy. The Company may impose, and Holder agrees to be bound by, such restrictions, conditions, or limitations as the Company determines appropriate as to the timing and manner of any resales or other transfers of any Award Units (and any shares of Common Stock issued with respect thereto) as to which transferability restrictions have lapsed as provided under this Agreement, including without limitation (a) restrictions under an insider trading or other Company policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Holder and others following a public offering of the Company’s securities, (c) stock ownership or holding requirements, and (d) the required use of a specified brokerage firm for such resales or other transfers.

6.Additional Terms and Conditions of Award.

6.1.Withholding Taxes. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock upon the vesting of the Award Units, payment by the Holder of such Award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such Award (the “Required Tax Payments”). The Holder may satisfy his or her obligation to advance the Required Tax Payments by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments, (3) authorizing the Company to withhold up to the maximum required number of shares of Common Stock which would otherwise be delivered or an amount of cash which would otherwise be payable to the Holder having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments,

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or (4) any combination of (1), (2), and (3). To the extent applicable, the Holder may satisfy his or her withholding obligation only with shares that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

6.2.Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through an extraordinary dividend, the terms of this Award, including the number and class of securities subject hereto, shall be appropriately adjusted by the Committee. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. The decision of the Committee regarding any such adjustment shall be final, binding, and conclusive.

6.3.Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration, or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the shares of Common Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval, or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval, or other action.

6.4.Award Confers No Rights to Continued Employment or Service. In no event shall the granting of the Award or its acceptance by the Holder, or any provision of this Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by or service to the Company, any Subsidiary, or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary, or any affiliate of the Company to terminate the employment or service of any person at any time.

6.5.Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Holder or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on all parties.

6.6.Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon the Holder and his or her heirs, executors, administrators, successors, and assigns.

6.7.Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to Tri Pointe Homes, Inc., Attn: General Counsel, 3161 Michelson Drive, Suite 1500, Irvine, California 92612, and if to the Holder, to the last known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails, or (d) by express courier service. The notice, request, or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission, or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request, or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

6.8.Governing Law. This Agreement, the Award, and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.9.Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan, including without limitation, Section 4.2 relating to terms of Performance Awards, and shall be interpreted in accordance therewith. To the extent of any inconsistency between the terms of the Plan and the terms of this Agreement, the terms of the Plan shall control. The Holder hereby acknowledges receipt of a copy of the Plan.

6.10.Entire Agreement. The Plan is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their

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entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder.

6.11.Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

6.12.Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Holder, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect, or enforceability of this Agreement.

6.13.Counterparts. This Agreement may be executed in two counterparts each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

6.14.Section 409A. This Agreement will be interpreted in accordance with Section 409A of the Code, to the extent applicable, including without limitation any Treasury Regulations or other Department of Treasury guidance that may be issued or amended after the date hereof, and will not be amended or modified in any manner that would cause this Agreement to violate the requirements of Section 409A. If, following the date hereof, the Committee determines that the Award may be subject to Section 409A, including such Department of Treasury guidance as may be issued after the date hereof, the Committee may, in its discretion, adopt such amendments to this Agreement or adopt such other policies and procedures (including amendments, policies, and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to (i) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Section 409A. Notwithstanding anything to the contrary in the Plan or in this Agreement, the Holder agrees that the Holder (or the Holder’s estate or permitted beneficiary(ies)) will be solely responsible for the satisfaction of all taxes, interest, and penalties that may be imposed on the Holder or for the Holder’s account in connection with this Award (including, without limitation, any taxes, interest, and penalties under Section 409A), and neither the Company nor its Affiliates will have any obligation to reimburse, indemnify, or otherwise hold the Holder (or the Holder’s estate or permitted beneficiary(ies)) harmless from any or all of such taxes, interest, or penalties.

6.15.Clawback. The Award Units shall be subject to the Company’s Executive Recoupment Policy and any Company clawback or similar policy and any Applicable Law related to such actions. The Holder’s acceptance of this Award shall be deemed to constitute the Holder’s acknowledgement of and consent to the Company’s application, implementation, and enforcement of the Executive Recoupment Policy and any other applicable Company clawback or similar policy that may apply to the Holder, whether adopted before or after the Grant Date, and any Applicable Law relating to clawback, cancellation, recoupment, rescission, payback, or reduction of compensation, and the Holder’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or Applicable Law, without further consideration or action.

[Signature page follows.]

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TRI POINTE HOMES, INC.,

a Delaware corporation

By:

Name:

Its:

Accepted on: __________________________

_____________________________________    

[NAME]

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Attachment A

DEFINITIONS

For purpose of this Agreement, the following terms shall have the meanings set forth below:

“Adjusted Pre-Tax Earnings” means the income from continuing operations before taxes of the Company, as reported in the Company’s consolidated financial statements for the relevant periods, adjusted to exclude the impact of consolidated annual bonus expense, land-related charges and impairments, debt refinancing or extinguishment, changes in applicable accounting standards, net income attributed to non-controlling interests, and any unusual or nonrecurring events affecting the Company or its financial statements that the Committee deems appropriate in its sole discretion.

“Cause” shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means, as determined by the Company in its sole discretion, any of the following: (i) the Holder’s breach of any agreement with the Company or any Subsidiary; (ii) the Holder’s failure or refusal to satisfactorily perform the duties reasonably required of him or her as an employee of the Company or any Subsidiary; (iii) the Holder’s commission of any act of fraud, embezzlement, dishonesty, or insubordination; (iv) the Holder’s unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary; (v) the Holder’s breach of a policy of the Company or any Subsidiary or the rules of any governmental or regulatory body applicable to the Company or any Subsidiary; or (vi) any other misconduct by the Holder that has, or could have, an adverse impact on the business, reputation, or affairs of the Company or any Subsidiary. A Separation from Service for Cause shall be deemed to include a determination by the Company after the Holder’s Separation from Service that circumstances existing before the Separation from Service would have entitled the Company or a Subsidiary to have terminated the Holder’s service for Cause. All rights that the Holder has or may have under this Agreement or the Plan shall be suspended automatically during the pendency of any investigation by the Company, or during any negotiations between the Company and the Holder, regarding any actual or alleged act or omission by the Holder of the type described in this definition of Cause.

“Change in Control Units” in the event a Change in Control is consummated during the Performance Period but before the Vesting Date, Change in Control Units means the total number of Award Units that would have vested and become payable, determined as set forth in Attachment B, based on the Company’s actual performance relative to such metrics set forth on Attachment B, through the end of the Company’s last fiscal quarter ending before the closing date of the Change in Control as if the last day of such quarter were the last day of the Performance Period. For purposes of this paragraph, the Cumulative Pre-Tax Earnings Plan shall be reduced proportionally to the number of quarters completed from the first day of the Performance Period through the end of the Company’s last fiscal quarter ending before the closing date of the Change in Control.

“Cumulative Pre-Tax Earnings” means the sum of the Adjusted Pre-Tax Earnings over the Performance Period for each period in which Adjusted Pre-Tax Earnings is measured pursuant to the above definition of Adjusted Pre-Tax Earnings.

“Cumulative Pre-Tax Earnings Plan” means $[__].

“Disability” shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Disability” means the Holder is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of 180 days or more, as determined by an independent physician selected with the approval of the Company or any Subsidiary and the Holder.

“Good Reason”shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Good Reason” shall mean any of the following are undertaken without the Holder’s prior written consent: (a) a material diminution in the Holder’s title, authority, duties, or responsibilities that substantially reduces the nature or character of the Holder’s position with the Company (or the highest parent entity if the Company has one or more parent entities); (b) a reduction by the Company of the Holder’s base salary as in effect immediately prior to such reduction; (c) a material reduction by the Company of the Holder’s target annual bonus as in effect immediately prior to such reduction; (d) relocation of the Holder’s principal office (defined as a relocation of the Holder’s principal office to a location that increases the Holder’s one-way commute by more than 50 miles), provided, that, for the avoidance of doubt, reasonable required travel by the Holder on the Company’s business shall not constitute a relocation; (e) a change in the Holder’s title following a Change in Control such that the Holder does not serve as [TITLE] of the surviving entity’s highest

parent entity; or (f) any material breach by the Company of any provision of this Agreement. Notwithstanding the foregoing, the Holder’s resignation shall not constitute a resignation for “Good Reason” as a result of any event described in the preceding sentence unless (A) the Holder provides written notice thereof to the Company within 30 days after the first occurrence of such event; (B) to the extent correctable, the Company fails to remedy such circumstance or event within 30 days following the Company’s receipt of such written notice; and (C) the effective date of the Holder’s resignation for “Good Reason” is not later than 90 days after the initial existence of the circumstances constituting Good Reason.

“Performance Measures” means the Performance Measures set forth on Attachment B to this Agreement.

“Qualifying Termination” means (a) a Separation from Service of the Holder that occurs within 3 months prior to or within 24 months following a Change in Control, by reason of the Holder’s dismissal or discharge by the Company (or its successor-in-interest) without Cause or by the Holder for Good Reason, or (b) a Retirement after a Change in Control where the Holder provided a Retirement Notice in accordance with the Plan prior to the Change in Control.

“Retirement” means the Holder’s voluntary Separation from Service without Cause at or after the time the Holder has (i) attained age 60 and (ii) worked for the Company or its Subsidiaries for at least five years, provided that each of the following conditions must also be satisfied in order for the Holder’s Separation from Service to constitute a Retirement:

(i)The Holder must provide the Company with written notice of his or her intent to retire on a form provided by the Company electing Retirement treatment under this Award (a “Retirement Notice”) at least 180 days prior to the Holder’s anticipated date of Retirement date, as stated in the Retirement Notice. During this period, the Holder shall remain an at-will employee and must remain in good standing and continue to meet all applicable performance standards, as determined by the Company.

(ii)The Holder must execute a separation agreement and general release in a form acceptable to the Company.

(iii)The Holder’s length of service with the Company and its Subsidiaries shall be determined by the Company.

Attachment B

PERFORMANCE MEASURES

Cumulative Pre-Tax Earnings Performance Table

Performance Level	Cumulative Pre-Tax Earnings	Pre-Tax Earnings Performance Rating
Maximum	[__]% of Cumulative Pre-Tax Earnings Plan and above	[__]%
Target	[__]% of Cumulative Pre-Tax Earnings Plan	[__]%
Threshold	[__]% of Cumulative Pre-Tax Earnings Plan	[__]%
Below Threshold	Below [__]% of Cumulative Pre-Tax Earnings Plan	[__]%

The percentage of the Award that is eligible to vest if the Cumulative Pre-Tax Earnings for the Performance Period is between the “Threshold” and “Target” or “Target” and “Maximum” performance levels, as applicable, shall be determined by straight line interpolation.

The Committee shall determine the number of Award Units that shall vest by the following formula: the Target Award x Pre-Tax Earnings Performance Rating, rounded down to the nearest whole share.

EX-10.2

Exhibit 10.2

TRI POINTE HOMES, INC.
2022 LONG-TERM INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
REVENUES PERFORMANCE MEASUREMENT
(EXECUTIVE FORM)

Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), hereby grants to [NAME] (the “Holder”) as of [DATE] (the “Grant Date”), pursuant to the terms and conditions of the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “Plan”), an award of performance-based restricted stock units (the “Award” and the restricted stock units granted pursuant to this Agreement, the “Award Units”) with respect to a maximum of [###] shares (with [###] shares referred to as the “Target Award”) of the Company’s Common Stock, par value $0.01 per share (“Common Stock”), upon and subject to the restrictions, terms, and conditions set forth in the Plan and this agreement (the “Agreement”). Capitalized terms used in this Agreement and not defined herein or set forth in Attachment A have the respective meanings given to them in the Plan.

1.Award Subject to Acceptance of Agreement. The Award shall be null and void unless the Holder accepts this Agreement by executing it in the space provided below and returning such original execution copy to the Company, or by approving this Agreement by electronic means in a manner that has been approved by the Company.

2.Rights as a Stockholder. Each Award Unit shall represent the Holder’s right to receive one share of the Company’s Common Stock if and to the extent that such Award Unit becomes vested pursuant to the terms and conditions of this Agreement and the Plan. The Holder shall not be entitled to any privileges of ownership with respect to the shares of Common Stock subject to the Award unless and until, and only to the extent, such shares become vested pursuant to Section 3 hereof and the Holder becomes a stockholder of record with respect to such shares. As of each date on which the Company pays a cash dividend to record owners of shares of Common Stock (a “Dividend Date”), then the number of Award Units and shares subject to the Award shall increase by (i) the product of the total number of shares subject to the Award immediately prior to such Dividend Date multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such Dividend Date, divided by (ii) the Fair Market Value of a share of Common Stock on such Dividend Date. Any such additional Award Units and shares shall be subject to the same restrictions, vesting conditions, and payment terms set forth herein as the Award Units and shares to which they relate.

3.Performance Period and Vesting.

3.1.Performance-Based Vesting Conditions. The Award granted pursuant to this Agreement shall constitute a Performance Award (as defined in the Plan). Except as otherwise provided in this Section 3, if and to the extent that all or a portion of the Award (as determined in accordance with the provisions of Attachment B) shall vest on the Vesting Date as a result of the Company satisfying the Performance Measures set forth in Attachment B to this Agreement over the Performance Period, the Holder shall become vested in the Award Units, or the applicable portion thereof, if any, on the Vesting Date, provided that the Holder does not incur a Separation from Service before the Vesting Date. As used herein, (i) the term “Performance Period” shall mean the three-year period beginning on [DATE]and ending on [DATE]and (ii) the term “Vesting Date” shall mean [DATE].If the Performance Period is shortened pursuant to Section 3.2 as a result of a Change in Control, appropriate adjustments to the performance targets, performance periods, and the determination of actual performance shall be made by the Committee in order to carry out the intent of this Agreement.

3.2.Change in Control and Acceleration. In the event a Change in Control occurs after the first day of the Performance Period but prior to the end of the Performance Period, the Performance Period shall terminate on the closing date of the Change in Control and the following provisions shall apply:

3.2.1.If (a) the closing of the Change in Control occurs on or before the 12-month anniversary of the first day of the Performance Period, (b) the Holder does not incur a Separation from Service before the date of the closing of the Change in Control, and (c) the Award is not assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control or otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Target Award shall vest as of the date of the closing of the Change in Control.

3.2.2.If (a) the closing of the Change in Control occurs on or before the 12-month anniversary of the first day of the Performance Period and (b) the Award is assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control, or is otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Target Award may become vested in accordance with the provisions of the last sentence of this Section 3.2.2. If (i) the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the Vesting Date, the Target Award shall become fully vested effective as of the Vesting Date or (ii) if the Holder suffers a Qualifying Termination before the Vesting Date, the Target Award shall become vested upon the later of the effective date of such Qualifying Termination and the closing of the Change in Control.

3.2.3.If (a) the closing of the Change in Control occurs after the 12-month anniversary of the first day of the Performance Period, (b) the Holder does not incur a Separation from Service before the date of the closing of the Change in Control, and (c) the Award is not assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control or otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control, the Award shall vest as of the date of the closing of the Change in Control, but only with respect to a number of Award Units equal to the Change in Control Units.

3.2.4.If (a) the closing of the Change in Control transaction occurs after the 12-month anniversary of the first day of the Performance Period and (b) the Award is assumed in full by the acquiring or successor company or its affiliate upon the closing of the Change in Control, or is otherwise expressly continued in full force and effect pursuant to the terms of the Change in Control transaction, the Award Units may become vested in accordance with the provisions of the last sentence of this Section 3.2.4, but only with respect to a number of Award Units equal to the Change in Control Units. If (i) the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the Vesting Date, such Change in Control Units shall become fully effective as of the Vesting Date or (ii) if the Holder suffers a Qualifying Termination before the Vesting Date and the Holder remains in service with the Company or its successor-in-interest or an affiliate thereof through the date of such Qualifying Termination, the Change in Control Units shall become vested upon the later of the effective date of such Qualifying Termination and the closing of the Change in Control.

3.2.5.The portion of the Award Units that do not vest in the event of a Change in Control pursuant to Sections 3.2.1, 3.2.2, 3.2.3, or 3.2.4 (i.e., the total number of Award Units less the number of Award Units that become vested pursuant to Sections 3.2.1, 3.2.2, 3.2.3, and 3.2.4) shall be cancelled and forfeited by the Holder for no consideration on the date of the Change in Control.

3.3.Separation from Service; Failure to Satisfy Performance Measures.

3.3.1.Except as otherwise provided in the Plan and this Agreement, if the Holder incurs a Separation from Service before the Vesting Date for any reason, then the entire Award shall be immediately forfeited by the Holder for no consideration and cancelled, effective as of the date of the Holder’s Separation from Service.

3.3.2.If the Holder does not incur a Separation from Service before the Vesting Date, any Award Units in which the Holder does not become vested pursuant to the Performance Measures set forth in Attachment B shall be immediately forfeited by the Holder for no consideration and cancelled, effective as of the last day of the Performance Period.

3.4.Acceleration on Death or Disability; Retirement.

3.4.1.Death or Disability. Notwithstanding the provisions of Section 3.3.1 of this Agreement, if the Holder incurs a Separation from Service prior to the Vesting Date by reason of death or Disability, then the Performance Period shall terminate and 100% of the Target Award will immediately become vested.

3.4.2.Retirement. Notwithstanding the provisions of Section 3.3.1 of this Agreement, if the Holder incurs a Separation from Service prior to the Vesting Date by reason of Retirement, (A) the proportion of the Award Units vesting under this provision shall be equal to the number of days in the Performance Period that elapsed before the Separation from Service divided by the total number of days in the Performance Period, provided that a minimum of 365 days of vesting (but in no event more than 100%) shall be allotted to the Holder, and (B) the amount of the Award Units vesting under this provision shall be based on actual achievement of the Performance Measures for the Award measured at the end of the Performance Period; provided, however, that if, after providing a Retirement Notice but before the end of the Performance Period, the Holder incurs a Separation from Service due to death or Disability, the Award shall be treated as provided in Section 3.4.1 of this Agreement.

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4.Delivery of Certificates. Subject to Section 6, as soon as practicable after the vesting of Award Units, in whole or in part, but in no event later than March 15 of the calendar year immediately following the year in which Award Units become vested, the Company shall (i) deliver or cause to be delivered one or more certificates issued in the Holder’s name (or such other name as is acceptable to the Company and designated in writing by the Holder), or (ii) issue in book entry form registered in the name of the Holder (or such other name as is acceptable to the Company and designated in writing by the Holder) a written or electronic notice or statement representing the number of vested shares represented by such vested Award Units. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such delivery, except as otherwise provided in Section 6. Prior to the issuance to the Holder of the shares of Common Stock subject to the Award, the Holder shall have no direct or secured claim in any specific assets of the Company or in such shares of Common Stock, and will have the status of a general unsecured creditor of the Company.

5.Transfer Restrictions and Investment Representation.

5.1.Nontransferability of Award. The Award may not be transferred by the Holder other than by will or the laws of descent and distribution, pursuant to the designation of one or more beneficiaries on the form prescribed by the Company, a trust or entity established by the Holder for estate planning purposes, or a charitable organization designated by the Holder or pursuant to a qualified domestic relations order, in each case, without consideration. Except to the extent permitted by the foregoing sentence, the Award and the Award Units may not be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of the Award or the Award Units in violation of this Agreement or the Plan, the Award and the Award Units and all rights hereunder shall immediately become null and void.

5.2.Investment Representation. The Holder hereby represents and covenants that (a) any share of Common Stock acquired upon the vesting of the Award Units will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), unless such acquisition has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Holder shall submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of vesting of any shares of Common Stock hereunder or (y) is true and correct as of the date of any sale of any such share, as applicable. As a further condition precedent to the delivery to the Holder of any shares of Common Stock subject to the Award, the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Board shall in its sole discretion deem necessary or advisable.

5.3.Additional Restrictions. If the Holder is, or becomes, a person subject to any policy of the Company providing for recoupment of performance-based compensation in the event of a restatement of the Company’s financial results, then Holder agrees the Award and the Award Units (and any shares of Common Stock issued with respect thereto) will be subject to such recoupment policy. The Company may impose, and Holder agrees to be bound by, such restrictions, conditions, or limitations as the Company determines appropriate as to the timing and manner of any resales or other transfers of any Award Units (and any shares of Common Stock issued with respect thereto) as to which transferability restrictions have lapsed as provided under this Agreement, including without limitation (a) restrictions under an insider trading or other Company policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Holder and others following a public offering of the Company’s securities, (c) stock ownership or holding requirements, and (d) the required use of a specified brokerage firm for such resales or other transfers.

6.Additional Terms and Conditions of Award.

6.1.Withholding Taxes. The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock upon the vesting of the Award Units, payment by the Holder of such Award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such Award (the “Required Tax Payments”). The Holder may satisfy his or her obligation to advance the Required Tax Payments by any of the following means: (1) a cash payment to the Company, (2) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments, (3) authorizing the Company to withhold up to the maximum required number of shares of Common Stock which would otherwise be delivered or an amount of cash which would otherwise be payable to the Holder having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments,

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or (4) any combination of (1), (2), and (3). To the extent applicable, the Holder may satisfy his or her withholding obligation only with shares that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

6.2.Adjustment. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through an extraordinary dividend, the terms of this Award, including the number and class of securities subject hereto, shall be appropriately adjusted by the Committee. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants. The decision of the Committee regarding any such adjustment shall be final, binding, and conclusive.

6.3.Compliance with Applicable Law. The Award is subject to the condition that if the listing, registration, or qualification of the shares of Common Stock subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the shares of Common Stock subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval, or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval, or other action.

6.4.Award Confers No Rights to Continued Employment or Service. In no event shall the granting of the Award or its acceptance by the Holder, or any provision of this Agreement or the Plan, give or be deemed to give the Holder any right to continued employment by or service to the Company, any Subsidiary, or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary, or any affiliate of the Company to terminate the employment or service of any person at any time.

6.5.Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Holder or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on all parties.

6.6.Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon the Holder and his or her heirs, executors, administrators, successors, and assigns.

6.7.Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to Tri Pointe Homes, Inc., Attn: General Counsel, 3161 Michelson Drive, Suite 1500, Irvine, California 92612, and if to the Holder, to the last known mailing address of the Holder contained in the records of the Company. All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails, or (d) by express courier service. The notice, request, or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission, or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request, or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

6.8.Governing Law. This Agreement, the Award, and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.9.Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan, including without limitation, Section 4.2 relating to terms of Performance Awards, and shall be interpreted in accordance therewith. To the extent of any inconsistency between the terms of the Plan and the terms of this Agreement, the terms of the Plan shall control. The Holder hereby acknowledges receipt of a copy of the Plan.

6.10.Entire Agreement. The Plan is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their

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entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder.

6.11.Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

6.12.Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Holder, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect, or enforceability of this Agreement.

6.13.Counterparts. This Agreement may be executed in two counterparts each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

6.14.Section 409A. This Agreement will be interpreted in accordance with Section 409A of the Code, to the extent applicable, including without limitation any Treasury Regulations or other Department of Treasury guidance that may be issued or amended after the date hereof, and will not be amended or modified in any manner that would cause this Agreement to violate the requirements of Section 409A. If, following the date hereof, the Committee determines that the Award may be subject to Section 409A, including such Department of Treasury guidance as may be issued after the date hereof, the Committee may, in its discretion, adopt such amendments to this Agreement or adopt such other policies and procedures (including amendments, policies, and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to (i) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Section 409A. Notwithstanding anything to the contrary in the Plan or in this Agreement, the Holder agrees that the Holder (or the Holder’s estate or permitted beneficiary(ies)) will be solely responsible for the satisfaction of all taxes, interest, and penalties that may be imposed on the Holder or for the Holder’s account in connection with this Award (including, without limitation, any taxes, interest, and penalties under Section 409A), and neither the Company nor its Affiliates will have any obligation to reimburse, indemnify, or otherwise hold the Holder (or the Holder’s estate or permitted beneficiary(ies)) harmless from any or all of such taxes, interest, or penalties.

6.15.Clawback. The Award Units shall be subject to the Company’s Executive Recoupment Policy and any Company clawback or similar policy and any Applicable Law related to such actions. The Holder’s acceptance of this Award shall be deemed to constitute the Holder’s acknowledgement of and consent to the Company’s application, implementation, and enforcement of the Executive Recoupment Policy and any other applicable Company clawback or similar policy that may apply to the Holder, whether adopted before or after the Grant Date, and any Applicable Law relating to clawback, cancellation, recoupment, rescission, payback, or reduction of compensation, and the Holder’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or Applicable Law, without further consideration or action.

[Signature page follows.]

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TRI POINTE HOMES, INC.,

a Delaware corporation

By:

Name:

Its:

Accepted on: __________________________

_____________________________________    

[NAME]

Attachment A

DEFINITIONS

For purpose of this Agreement, the following terms shall have the meanings set forth below:

“Adjusted Revenue” means the home sales revenue of the Company, as reported in the Company’s consolidated financial statements for the relevant periods, after such adjustments thereto as the Committee deems appropriate in its sole discretion (i) to exclude the effect of extraordinary, unusual, and/or nonrecurring items, including revenues attributable to non-controlling interests not originally forecast in the Cumulative Revenue Plan, and changes in applicable accounting standards and (ii) to reflect such other factors as the Committee deems appropriate to fairly reflect revenue.

“Cause” shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means, as determined by the Company in its sole discretion, any of the following: (i) the Holder’s breach of any agreement with the Company or any Subsidiary; (ii) the Holder’s failure or refusal to satisfactorily perform the duties reasonably required of him or her as an employee of the Company or any Subsidiary; (iii) the Holder’s commission of any act of fraud, embezzlement, dishonesty, or insubordination; (iv) the Holder’s unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary; (v) the Holder’s breach of a policy of the Company or any Subsidiary or the rules of any governmental or regulatory body applicable to the Company or any Subsidiary; or (vi) any other misconduct by the Holder that has, or could have, an adverse impact on the business, reputation, or affairs of the Company or any Subsidiary. A Separation from Service for Cause shall be deemed to include a determination by the Company after the Holder’s Separation from Service that circumstances existing before the Separation from Service would have entitled the Company or a Subsidiary to have terminated the Holder’s service for Cause. All rights that the Holder has or may have under this Agreement or the Plan shall be suspended automatically during the pendency of any investigation by the Company, or during any negotiations between the Company and the Holder, regarding any actual or alleged act or omission by the Holder of the type described in this definition of Cause.

“Change in Control Units” in the event a Change in Control is consummated during the Performance Period but before the Vesting Date, Change in Control Units means the total number of Award Units that would have vested and become payable, determined as set forth in Attachment B, based on the Company’s actual performance relative to such metrics set forth on Attachment B, through the end of the Company’s last fiscal quarter ending before the closing date of the Change in Control as if the last day of such quarter were the last day of the Performance Period. For purposes of this paragraph, the Cumulative Revenue Plan shall be reduced proportionally to the number of quarters completed from the first day of the Performance Period through the end of the Company’s last fiscal quarter ending before the closing date of the Change in Control.

“Cumulative Revenue” means the sum of the Adjusted Revenue over the Performance Period for each period in which Adjusted Revenue is measured pursuant to the above definition of Adjusted Revenue.

“Cumulative Revenue Plan” means $[__].

“Disability” shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Disability” means the Holder is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of 180 days or more, as determined by an independent physician selected with the approval of the Company or any Subsidiary and the Holder.

“Good Reason”shall be defined as that term is defined in the Holder’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Good Reason” shall mean any of the following are undertaken without the Holder’s prior written consent: (a) a material diminution in the Holder’s title, authority, duties, or responsibilities that substantially reduces the nature or character of the Holder’s position with the Company (or the highest parent entity if the Company has one or more parent entities); (b) a reduction by the Company of the Holder’s base salary as in effect immediately prior to such reduction; (c) a material reduction by the Company of the Holder’s target annual bonus as in effect immediately prior to such reduction; (d) relocation of the Holder’s principal office (defined as a relocation of the Holder’s principal office to a location that increases the Holder’s one-way commute by more than 50 miles), provided, that, for the avoidance of doubt, reasonable required travel by the Holder on the Company’s business shall not constitute a relocation; (e) a change in the Holder’s title following a Change in Control such that the Holder does not serve as [TITLE] of the surviving entity’s highest parent entity; or (f) any material breach by the Company of any provision of this Agreement. Notwithstanding the

foregoing, the Holder’s resignation shall not constitute a resignation for “Good Reason” as a result of any event described in the preceding sentence unless (A) the Holder provides written notice thereof to the Company within 30 days after the first occurrence of such event; (B) to the extent correctable, the Company fails to remedy such circumstance or event within 30 days following the Company’s receipt of such written notice; and (C) the effective date of the Holder’s resignation for “Good Reason” is not later than 90 days after the initial existence of the circumstances constituting Good Reason.

“Performance Measures” means the Performance Measures set forth on Attachment B to this Agreement.

“Qualifying Termination” means (a) a Separation from Service of the Holder that occurs within 3 months prior to or within 24 months following a Change in Control, by reason of the Holder’s dismissal or discharge by the Company (or its successor-in-interest) without Cause or by the Holder for Good Reason, or (b) a Retirement after a Change in Control where the Holder provided a Retirement Notice in accordance with the Plan prior to the Change in Control.

“Retirement” means the Holder’s voluntary Separation from Service without Cause at or after the time the Holder has (i) attained age 60 and (ii) worked for the Company or its Subsidiaries for at least five years, provided that each of the following conditions must also be satisfied in order for the Holder’s Separation from Service to constitute a Retirement:

(i)The Holder must provide the Company with written notice of his or her intent to retire on a form provided by the Company electing Retirement treatment under this Award (a “Retirement Notice”) at least 180 days prior to the Holder’s anticipated date of Retirement date, as stated in the Retirement Notice. During this period, the Holder shall remain an at-will employee and must remain in good standing and continue to meet all applicable performance standards, as determined by the Company.

(ii)The Holder must execute a separation agreement and general release in a form acceptable to the Company.

(iii)The Holder’s length of service with the Company and its Subsidiaries shall be determined by the Company.

Attachment B

PERFORMANCE MEASURES

Cumulative Revenue Performance Table

Performance Level	Cumulative Revenue	Revenue Performance Rating
Maximum	[__]% of Cumulative Revenue Plan and above	[__]%
Target	[__]% of Cumulative Revenue Plan	[__]%
Threshold	[__]% of Cumulative Revenue Plan	[__]%
Below Threshold	Below [__]% of Cumulative Revenue Plan	[__]%

The percentage of the Award that is eligible to vest if the Cumulative Revenue for the Performance Period is between the “Threshold” and “Target” or “Target” and “Maximum” performance levels, as applicable, shall be determined by straight line interpolation.

The Committee shall determine the number of Award Units that shall vest by the following formula: the Target Award x Revenue Performance Rating, rounded down to the nearest whole share.

EX-10.3

Exhibit 10.3

TRI POINTE HOMES, INC.

2022 LONG-TERM INCENTIVE PLAN

PERFORMANCE-BASED CASH AWARD AGREEMENT

Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), hereby grants to [NAME] (the “Employee”) as of [DATE] (the “Grant Date”), pursuant to the terms and conditions of the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “Plan”), a performance-based cash award (the “Award”), upon and subject to the restrictions, terms, and conditions set forth in the Plan and this agreement (the “Agreement”). Capitalized terms used in this Agreement and not defined herein or set forth in Attachment A have the respective meanings given to them in the Plan.

1.Award Subject to Acceptance of Agreement. The Award shall be null and void unless the Employee accepts this Agreement by executing it in the space provided below and returning such original execution copy to the Company, or by approving this Agreement by electronic means in a manner that has been approved by the Company.

2.Grant. The Company hereby grants to the Employee the Award, which entitles the Employee to earn a cash payment in an amount equal to the product of (a) the Cash Target Amount, and (b) the Percentage of the Award that Vests. Employee shall not be entitled to any privileges of ownership with respect to the cash subject to the Award unless and until, and only to the extent, such cash award becomes vested pursuant to Section 3 hereof.

3.Performance Period and Vesting.

3.1.Performance-Based Vesting Conditions. The Award granted pursuant to this Agreement shall constitute a Performance Award (as defined in the Plan). Except as otherwise provided in this Section 3, if and to the extent that all or a portion of the Award (as determined in accordance with the provisions of this Section 3 and Attachment B) shall vest on the Vesting Date as a result of the Company satisfying the Performance Measures set forth in Attachment B to this Agreement over the Performance Period, the Employee shall become vested in the cash Award, or the applicable portion thereof, if any, on the Vesting Date, provided that the Employee does not incur a Separation from Service before the Vesting Date. As used herein, (i) the term “Performance Period” shall mean the one-year period beginning on [DATE] and ending on [DATE] and (ii) the term “Vesting Date” shall mean the date on which the vested portion of the cash under the Award is delivered under Section 4.

3.2.Separation from Service; Failure to Satisfy Performance Measures; Change in Control; Death and Disability.

3.2.1.General. Except as otherwise provided in this Section 3.2, if the Employee incurs a Separation from Service prior to the Vesting Date for any reason, then the entire Award shall be immediately forfeited by the Employee for no consideration and cancelled, effective as of the date of the Employee’s Separation from Service.

3.2.2.Involuntary Termination. Notwithstanding the provisions of Section 3.2.1 of this Agreement, if the Employee incurs a Separation from Service (i) by the Company (or its successor-in-interest after a Change in Control) without Cause or (ii) by the Employee for Good Reason (each, an “Involuntary Termination”), the Award shall be eligible to vest as follows: (a) the proportion of the Award vesting under this provision shall be equal to the number of days in the Performance Period that elapsed before the Involuntary Termination divided by the total number of days in such Performance Period (for the avoidance of doubt, net of any proportion of the Award that has already vested), and (b) the amount of the Award vesting under this provision shall be based on actual achievement of the Performance Measures measured at the end of the Performance Period. Any portion of the Award vesting under this provision shall vest at the end of the Performance Period.

3.2.3.Retirement. Notwithstanding the provisions of Section 3.2.1 of this Agreement, if the Employee incurs a Separation from Service prior to the Vesting Date by reason of Retirement, the Award shall be treated the same as under Section 3.2.2 of this Agreement in case of an Involuntary Termination; provided, however, that if, after providing a Retirement Notice but before the end of the Performance Period, the Employee incurs a Separation from Service due to death or Disability, the Award shall be treated as provided in Section 3.2.6 of this Agreement.

3.2.4.Failure to Satisfy Performance Measures. If the Employee does not incur a Separation from Service before the Vesting Date, but the Performance Measures set forth in Attachment B to this

Agreement do not equal or exceed the Maximum Performance Level, and the Employee thus does not become vested in 200% of the Cash Target Amount, then the right to receive any portion of the cash under the Award in which the Employee does not become vested pursuant to the Performance Measures set forth in said Attachment B shall be immediately forfeited by the Employee for no consideration and cancelled, effective as of the last day of the Performance Period.

3.2.5.Change in Control. Upon a Change in Control, the Award shall be subject to Section 5.8 of the Plan.

3.2.6.Death or Disability. Notwithstanding the provisions of Section 3.2.1 of this Agreement, if the Employee incurs a Separation from Service prior to the Vesting Date by reason of death or Disability, then the Performance Period shall terminate and 100% of the Cash Target Amount will immediately become vested.

4.Delivery of Cash Payment. Subject to Section 6, within 30 days after the determination of the Performance Measures set forth in Attachment B, in whole or in part, but in no event later than 180 days after the end of the Performance Period, the Company shall deliver or cause to be delivered the vested portion of the cash under the Award, as calculated in accordance with this Agreement and Attachment B hereto. Prior to the payment to the Employee of the cash that has vested under the Award, the Employee shall have no direct or secured claim in any specific assets of the Company, and will have the status of a general unsecured creditor of the Company.

5.Transfer Restrictions and Investment Representation.

5.1.Nontransferability of Award. The Award may not be transferred by the Employee other than by will or the laws of descent and distribution, pursuant to the designation of one or more beneficiaries on the form prescribed by the Company, a trust or entity established by the Employee for estate planning purposes, or a charitable organization designated by the Employee or pursuant to a qualified domestic relations order, in each case, without consideration. Except to the extent permitted by the foregoing sentence, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered, or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment, or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of the Award in violation of this Agreement or the Plan, the Award and all rights hereunder shall immediately become null and void.

5.2.Additional Restrictions. If the Employee is, or becomes, a person subject to any policy of the Company providing for recoupment of performance-based compensation in the event of a restatement of the Company’s financial results, then Employee agrees the Award (and any cash issued with respect thereto) will be subject to such recoupment policy.

6.Additional Terms and Conditions of Award.

6.1.Withholding Taxes. The Company shall have the right to withhold from any cash payment under the Award and remit to the appropriate taxing authorities all taxes required to be withheld under applicable law, as determined by the Company in its sole and absolute discretion.

6.2.Award Confers No Rights to Continued Employment or Service. In no event shall the granting of the Award or its acceptance by the Employee, or any provision of this Agreement or the Plan, give or be deemed to give the Employee any right to continued employment by or service to the Company, any Subsidiary, or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary, or any affiliate of the Company to terminate the employment or service of any person at any time.

6.3.Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Employee or by the Company forthwith to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on all parties.

6.4.Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon the Employee and his or her heirs, executors, administrators, successors, and assigns.

6.5.Notices. All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to Tri Pointe Homes, Inc., Attn: General Counsel, 3161 Michelson Drive, Suite 1500, Irvine, California 92612, and if to the Employee, to the last known mailing address of the Employee contained in the records of the Company. All notices, requests or other communications provided for in this

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Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails, or (d) by express courier service. The notice, request, or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission, or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request, or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

6.6.Governing Law. This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

6.7.Agreement Subject to the Plan. This Agreement is subject to the provisions of the Plan, including without limitation, Section 4.2 relating to terms of Performance Awards, and shall be interpreted in accordance therewith. To the extent of any inconsistency between the terms of the Plan and the terms of this Agreement, the terms of the Plan shall control. The Employee hereby acknowledges receipt of a copy of the Plan.

6.8.Entire Agreement. The Plan is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement of the parties with respect to the Award and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the Award, and may not be modified adversely to the Employee’s interest except by means of a writing signed by the Company and the Employee.

6.9.Partial Invalidity. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

6.10.Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Employee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect, or enforceability of this Agreement.

6.11.Counterparts. This Agreement may be executed in two counterparts each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

6.12.Section 409A. This Agreement will be interpreted in accordance with Section 409A of the Code, to the extent applicable, including without limitation any Treasury Regulations or other Department of Treasury guidance that may be issued or amended after the date hereof, and will not be amended or modified in any manner that would cause this Agreement to violate the requirements of Section 409A. If, following the date hereof, the Committee determines that the Award may be subject to Section 409A, including such Department of Treasury guidance as may be issued after the date hereof, the Committee may, in its discretion, adopt such amendments to this Agreement or adopt such other policies and procedures (including amendments, policies, and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to (i) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Section 409A. Notwithstanding anything to the contrary in the Plan or in this Agreement, the Employee agrees that the Employee (or the Employee’s estate or permitted beneficiary(ies)) will be solely responsible for the satisfaction of all taxes, interest, and penalties that may be imposed on the Employee or for the Employee’s account in connection with this Award (including, without limitation, any taxes, interest, and penalties under Section 409A), and neither the Company nor its Affiliates will have any obligation to reimburse, indemnify, or otherwise hold the Employee (or the Employee’s estate or permitted beneficiary(ies)) harmless from any or all of such taxes, interest, or penalties.

6.13.Clawback. The Award shall be subject to the Company’s Executive Recoupment Policy and any Company clawback or similar policy and any Applicable Law related to such actions. The Employee’s acceptance of this Award shall be deemed to constitute the Employee’s acknowledgement of and consent to the Company’s application, implementation, and enforcement of the Executive Recoupment Policy and any other applicable Company clawback or similar policy that may apply to the Employee, whether adopted before or after the Grant Date, and any Applicable Law relating to clawback, cancellation, recoupment, rescission, payback, or reduction of compensation, and the Employee’s agreement that the Company may take any actions that may be necessary to effectuate any such policy or Applicable Law, without further consideration or action.

[Signature page follows.]

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TRI POINTE HOMES, INC.,

a Delaware corporation

By:

Name:

Its:

Accepted on: __________________________

_____________________________________    

[NAME]

Attachment A

DEFINITIONS

For purpose of this Agreement, the following terms shall have the meanings set forth below:

“Adjusted Pre-Tax Earnings” means the income from continuing operations before taxes of the Company, as reported in the Company’s consolidated financial statements for the relevant periods, adjusted to exclude the impact of consolidated annual bonus expense, land-related charges and impairments, debt refinancing or extinguishment, changes in applicable accounting standards, net income attributed to non-controlling interests, and any unusual or nonrecurring events affecting the Company or its financial statements that the Committee deems appropriate in its sole discretion.

“Adjusted Revenue” means the home sales revenue of the Company, as reported in the Company’s consolidated financial statements for the relevant periods, after such adjustments thereto as the Committee deems appropriate in its sole discretion (i) to exclude the effect of unusual and/or nonrecurring items, including revenues attributable to non-controlling interests not originally forecast in the Revenue plan, and changes in applicable accounting standards and (ii) to reflect such other factors as the Committee deems appropriate to fairly reflect revenue.

“Cash Target Amount” means the product of (i) [__]% multiplied by (ii) the Employee’s base salary as approved by the Board for the fiscal year of the Company during which the Grant Date falls.

“Cause” shall be defined as that term is defined in the Employee’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means, as determined by the Company in its sole discretion, any of the following: (i) the Employee’s breach of any agreement with the Company or any Subsidiary; (ii) the Employee’s failure or refusal to satisfactorily perform the duties reasonably required of him or her as an employee of the Company or any Subsidiary; (iii) the Employee’s commission of any act of fraud, embezzlement, dishonesty, or insubordination; (iv) the Employee’s unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary; (v) the Employee’s breach of a policy of the Company or any Subsidiary or the rules of any governmental or regulatory body applicable to the Company or any Subsidiary; or (vi) any other misconduct by the Employee that has, or could have, an adverse impact on the business, reputation, or affairs of the Company or any Subsidiary. A Separation from Service for Cause shall be deemed to include a determination by the Company after the Employee’s Separation from Service that circumstances existing before the Separation from Service would have entitled the Company or a Subsidiary to have terminated the Employee’s service for Cause. All rights that the Employee has or may have under this Agreement or the Plan shall be suspended automatically during the pendency of any investigation by the Company, or during any negotiations between the Company and the Employee, regarding any actual or alleged act or omission by the Employee of the type described in this definition of Cause.

“Disability” shall be defined as that term is defined in the Employee’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Disability” means the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of 180 days or more, as determined by an independent physician selected with the approval of the Company or any Subsidiary and the Employee.

“Good Reason”shall be defined as that term is defined in the Employee’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Good Reason” shall mean any of the following are undertaken without the Employee’s prior written consent: (a) a material diminution in the Employee’s title, authority, duties, or responsibilities that substantially reduces the nature or character of the Employee’s position with the Company (or the highest parent entity if the Company has one or more parent entities); (b) a reduction by the Company of the Employee’s base salary as in effect immediately prior to such reduction; (c) a material reduction by the Company of the Employee’s target annual bonus as in effect immediately prior to such reduction; (d) relocation of the Employee’s principal office (defined as a relocation of the Employee’s principal office to a location that increases the Employee’s one-way commute by more than 50 miles), provided, that, for the avoidance of doubt, reasonable required travel by the Employee on the Company’s business shall not constitute a relocation; (e) a change in the Employee’s title following a Change in Control such that the Employee does not serve as [TITLE] of the surviving entity’s highest parent entity; or (f) any material breach by the Company of any provision of this Agreement. Notwithstanding the foregoing, the Employee’s resignation shall not constitute a resignation for “Good Reason” as a result of any event described in the preceding sentence unless (A) the Employee provides written notice thereof to the Company within 30 days after the first occurrence of such event; (B) to the extent correctable, the Company fails to remedy such circumstance or event within 30 days following the

Company’s receipt of such written notice; and (C) the effective date of the Employee’s resignation for “Good Reason” is not later than 90 days after the initial existence of the circumstances constituting Good Reason.

“Percentage of the Award that Vests” means the percentage determined in accordance with Attachment B to this Agreement based on the applicable Performance Level met for each Performance Measure for the Performance Period, or portion thereof, as applicable.

“Performance Measures” means the Performance Measures set forth on Attachment B to this Agreement.

“Retirement” shall mean the Employee’s voluntary Separation from Service without Cause at or after the time the Employee has (i) attained age 60 and (ii) worked for the Company or its Subsidiaries for at least five years, provided that each of the following conditions must also be satisfied in order for the Employee’s Separation from Service to constitute a Retirement:

(i)    The Employee must provide the Company with written notice of his or her intent to retire on a form provided by the Company electing Retirement treatment under this Award (a “Retirement Notice”) at least 180 days prior to the Employee’s anticipated date of Retirement date, as stated in the Retirement Notice. During this period, the Employee shall remain an at-will employee and must remain in good standing and continue to meet all applicable performance standards, as determined by the Company.

(ii)    The Employee must execute a separation agreement and general release in a form acceptable to the Company.

(iii)    The Employee’s length of service with the Company and its Subsidiaries shall be determined by the Company.

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Attachment B

PERFORMANCE MEASURES

Adjusted Revenue (Weighted [__]%)

Performance Level	Adjusted Revenue	Achievement Percentage
Maximum ([__]% of Plan)	$[__] or above	[__]%
Target ([__]% of Plan)	$[__]	[__]%
Threshold ([__]% of Plan)	$[__]	[__]%
Below Threshold (Below [__]% of Plan)	Below $[__]	[__]%

Adjusted Pre-Tax Earnings (Weighted [__]%)

Performance Level	Adjusted Pre-Tax Earnings	Achievement Percentage
Maximum ([__]% of Plan)	$[__] or above	[__]%
Target ([__]% of Plan)	$[__]	[__]%
Threshold ([__]% of Plan)	$[__]	[__]%
Below Threshold (Below [__]% of Plan)	Below $[__]	[__]%

The “Achievement Percentage” for each Performance Measure for performance level results for the Performance Period between the “Threshold” and “Target” or “Target” and “Maximum” performance levels, as applicable, shall be determined by straight line interpolation.

The “Percentage of the Award that Vests” shall be calculated by (A) multiplying the “Achievement Percentage” for each Performance Measure by the applicable weighting set forth above, and (B) summing the two resulting amounts together.

For example, if the “Achievement Percentage” for the Revenue Performance Measure is 120% and the “Achievement Percentage” for the Pre-Tax Earnings Performance Measure is 100%, the “Percentage of the Award that Vests” will be:

(A) 120% x [__]% = [__]% + (B) 100% x [__]% = [__]%, for a Percentage of the Award that Vests of [__]%

EX-31.1

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 Homes, 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, 2023	/s/ Douglas F. Bauer
	Douglas F. Bauer
	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Glenn J. Keeler, certify that:

1.I have reviewed this report on Form 10-Q of Tri Pointe Homes, 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, 2023	/s/ Glenn J. Keeler
	Glenn J. Keeler
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

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 Quarterly Report of Tri Pointe Homes, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2023 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, 2023	/s/ Douglas F. Bauer
	Douglas F. Bauer
	Chief Executive Officer (Principal Executive Officer)

EX-32.2

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 Quarterly Report of Tri Pointe Homes, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Glenn J. Keeler, 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, 2023	/s/ Glenn J. Keeler
	Glenn J. Keeler
	Chief Financial Officer (Principal Financial Officer)

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 14, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	1-35796
Entity Registrant Name	Tri Pointe Homes, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	61-1763235
Entity Address, Address Line One	940 Southwood Blvd
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Incline Village
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89451
City Area Code	775
Local Phone Number	413-1030
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	TPH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		100,098,269
Amendment Flag	false
Document Fiscal year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001561680
Current Fiscal Year End Date	--12-31

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 966,298	$ 889,664
Receivables	141,076	169,449
Real estate inventories	3,142,412	3,173,849
Investments in unconsolidated entities	134,071	129,837
Goodwill and other intangible assets, net	156,603	156,603
Deferred tax assets, net	34,851	34,851
Other assets	163,929	165,687
Total assets	4,739,240	4,719,940
Liabilities
Accounts payable	57,544	62,324
Accrued expenses and other liabilities	436,275	443,034
Loans payable	287,427	287,427
Senior notes, net	1,091,509	1,090,624
Total liabilities	1,872,755	1,883,409
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as March 31, 2023 and December 31, 2022, respectively	0	0
Common stock, $0.01 par value, 500,000,000 shares authorized;    100,172,227 and 101,017,708 shares issued and outstanding at   March 31, 2023 and December 31, 2022, respectively	1,002	1,010
Additional paid-in capital	0	3,685
Retained earnings	2,862,621	2,827,694
Total stockholders’ equity	2,863,623	2,832,389
Noncontrolling interests	2,862	4,142
Total equity	2,866,485	2,836,531
Total liabilities and equity	$ 4,739,240	$ 4,719,940

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	50,000,000	50,000,000
Preferred stock issued (in shares)	0	0
Preferred stock outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	500,000,000	500,000,000
Common stock issued (in shares)	100,172,227	101,017,708
Common stock outstanding (in shares)	100,172,227	101,017,708

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues	$ 779,661	$ 736,244
Other operations expense	665	646
Sales and marketing	41,862	32,239
General and administrative	46,366	48,456
Homebuilding income from operations	92,331	115,016
Equity in income (loss) of unconsolidated entities	227	(55)
Other income, net	7,604	273
Homebuilding income before income taxes	100,162	115,234
Equity in income of unconsolidated entities	0	46
Financial services income before income taxes	3,045	3,490
Income before income taxes	103,207	118,724
Provision for income taxes	(27,350)	(30,225)
Net income (loss)	75,857	88,499
Net income attributable to noncontrolling interests	(1,115)	(1,021)
Net income available to common stockholders	$ 74,742	$ 87,478
Earnings per share
Basic (in dollars per share)	$ 0.74	$ 0.82
Diluted (in dollars per share)	$ 0.73	$ 0.81
Weighted average shares outstanding
Basic (in shares)	101,019,253	107,326,911
Diluted (in shares)	101,706,438	108,197,485
Homebuilding
Revenues	$ 770,785	$ 727,492
Home sales revenue
Revenues	768,405	725,251
Cost of home, land and lot sales	588,118	530,660
Land and lot sales revenue
Revenues	1,706	1,597
Cost of home, land and lot sales	1,443	475
Other operations revenue
Revenues	674	644
Financial services
Revenues	8,876	8,752
Expenses	$ 5,831	$ 5,308

XML

CONSOLIDATED STATEMENTS OF EQUITY (unaudited) - USD ($) $ in Thousands	Total	Total Stockholders’ Equity	Common Stock	Additional Paid-in Capital	Retained Earnings	Noncontrolling Interests
Beginning balance (shares) at Dec. 31, 2021			109,644,474
Beginning balance at Dec. 31, 2021	$ 2,447,633	$ 2,447,621	$ 1,096	$ 91,077	$ 2,355,448	$ 12
Increase (Decrease) in Stockholders' Equity
Net income	88,499	87,478			87,478	1,021
Shares issued under share-based awards (shares)			631,622
Shares issued under share-based awards	29	29	$ 6	23
Tax withholding paid on behalf of employees for share-based awards	(9,076)	(9,076)		(9,076)
Stock-based compensation expense	5,272	5,272		5,272
Share repurchases (shares)			(5,295,236)
Share repurchases	(123,090)	(123,090)	$ (52)	(123,038)
Ending balance (shares) at Mar. 31, 2022			104,980,860
Ending balance at Mar. 31, 2022	$ 2,409,267	2,408,234	$ 1,050	0	2,407,184	1,033
Beginning balance (shares) at Dec. 31, 2022	101,017,708		101,017,708
Beginning balance at Dec. 31, 2022	$ 2,836,531	2,832,389	$ 1,010	3,685	2,827,694	4,142
Increase (Decrease) in Stockholders' Equity
Net income	75,857	74,742			74,742	1,115
Shares issued under share-based awards (shares)			729,094
Shares issued under share-based awards	232	232	$ 7	225
Tax withholding paid on behalf of employees for share-based awards	(9,780)	(9,780)		(9,780)
Stock-based compensation expense	3,861	3,861		3,861
Share repurchases (shares)			(1,574,575)
Share repurchases	(37,821)	(37,821)	$ (15)	(37,806)
Distributions to noncontrolling interests, net	(2,395)					(2,395)
Reclass the negative APIC to retained earnings	$ 0			(39,815)	(39,815)
Ending balance (shares) at Mar. 31, 2023	100,172,227		100,172,227
Ending balance at Mar. 31, 2023	$ 2,866,485	$ 2,863,623	$ 1,002	$ 0	$ 2,862,621	$ 2,862

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 75,857	$ 88,499
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	7,054	5,285
Equity in (income) loss of unconsolidated entities, net	(227)	9
Amortization of stock-based compensation	3,861	5,272
Charges for impairments and lot option abandonments	717	766
Returns on investments in unconsolidated entities, net	0	2,253
Changes in assets and liabilities:
Real estate inventories	31,965	(233,238)
Receivables	28,373	247
Other assets	(429)	(1,622)
Accounts payable	(4,780)	(8,839)
Accrued expenses and other liabilities	(6,752)	25,254
Net cash provided by (used in) operating activities	135,639	(116,114)
Cash flows from investing activities:
Purchases of property and equipment	(6,501)	(12,547)
Net investments in unconsolidated entities	(2,951)	(7,141)
Net cash used in investing activities	(9,452)	(19,688)
Cash flows from financing activities:
Repayment of debt	0	(504)
Distributions to noncontrolling interests	(2,395)	(382)
Proceeds from issuance of common stock under share-based awards	232	29
Tax withholding paid on behalf of employees for share-based awards	(9,780)	(9,076)
Share repurchases	(37,610)	(123,090)
Net cash used in financing activities	(49,553)	(133,023)
Net increase (decrease) in cash and cash equivalents	76,634	(268,825)
Cash and cash equivalents–beginning of period	889,664	681,528
Cash and cash equivalents–end of period	$ 966,298	$ 412,703

XML

Organization, Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

Tri Pointe is engaged in the design, construction and sale of innovative single-family attached and detached homes across ten states, including Arizona, California, Colorado, Maryland, Nevada, North Carolina, South Carolina, Texas, Virginia and Washington, and the District of Columbia.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 due to seasonal variations and other factors.

The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2023 and December 31, 2022 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation.

Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.

Use of Estimates

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

Cash and Cash Equivalents and Concentration of Credit Risk

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Under ASC 606, we apply the following steps to determine the timing and amount of revenue to recognize: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

Home sales revenue

We generate the majority of our total revenues from home sales, which consists of our core business operation of building and delivering completed homes to homebuyers. Home sales revenue and related profit is generally recognized when title to and possession of the home are transferred to the homebuyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied in less than one year from the original contract date. Included in home sales revenue are forfeited deposits, which occur when homebuyers cancel home purchase contracts that include a nonrefundable deposit. Both revenue from forfeited deposits and deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers are immaterial.

Land and lot sales revenue

Historically, we have generated land and lot sales revenue from a small number of transactions, although in some periods we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to be material, but we still consider these sales to be an ordinary part of our business, thus meeting the definition of contracts with customers. Similar to our home sales, revenue from land and lot sales is typically fully recognized when the land and lot sales transactions are consummated, at which time no further performance obligations are left to be satisfied. Some of our historical land and lot sales have included future profit participation rights. We will recognize future land and lot sales revenue in the periods in which all closing conditions are met, subject to the constraint on variable consideration related to profit participation rights, if such rights exist in the sales contract.

Other operations revenue

The majority of our homebuilding other operations revenue relates to a ground lease included in our West segment. We are responsible for making lease payments to the landowner, and we collect sublease payments from the owners of the buildings. This ground lease is accounted for in accordance with Accounting Standards Topic 842 (“ASC 842”), Leases. We do not recognize a material profit on this ground lease.

Financial services revenues

Tri Pointe Solutions is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, Tri Pointe Assurance title and escrow services operations, and Tri Pointe Advantage property and casualty insurance agency operations.

Mortgage financing operations

Tri Pointe Connect was formed as a joint venture with an established mortgage lender. The joint venture acts as a preferred mortgage loan broker to our homebuyers in all of the markets in which we operate, generating income from fees paid by third party lenders for the successful funding and closing of loans for homebuyers that originate through Tri Pointe Connect. Due to our ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance, Tri Pointe Connect is fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests.

Title and escrow services operations

Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales transaction, at which time no further performance obligations are left to be satisfied. Tri Pointe Assurance revenue is included in the Financial Services section of our consolidated statements of operations.

Property and casualty insurance agency operations

Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty insurance agency services that help facilitate the closing process in all of the markets in which we operate. The total consideration for these services, including renewal options, is estimated upon the issuance of the initial insurance policy, subject to constraint. Tri Pointe Advantage revenue is included in the Financial Services section of our consolidated statements of operations.

Recently Issued Accounting Standards Not Yet Adopted

No recent accounting pronouncements or changes in accounting pronouncements have been issued or adopted since those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that are of material significance, or have potential material significance, to the Company.

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Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

We operate two principal businesses: homebuilding and financial services.

In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments within our homebuilding business, we have considered similar economic and other characteristics, including product types, average sales prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments and, as such, our homebuilding segments are reported under the following hierarchy:

West region: Arizona, California, Nevada and Washington

Central region: Colorado and Texas

East region: District of Columbia, Maryland, North Carolina, South Carolina and Virginia

Our Tri Pointe Solutions financial services operation is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, our Tri Pointe Assurance title and escrow services operations, and our Tri Pointe Advantage property and casualty insurance agency operations. For further details, see Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.

Corporate is a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit, 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. All of the expenses incurred by Corporate are allocated to each of the homebuilding reporting segments based on their respective percentage of revenues.

The reportable segments follow the same accounting policies used for our consolidated financial statements, as 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.

Total revenues and income before income taxes for each of our reportable segments were as follows (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenues
West	$	480,941	$	530,496
Central	166,140		137,097
East	123,704		59,899
Total homebuilding revenues	770,785		727,492
Financial services	8,876		8,752
Total	$	779,661	$	736,244
Income before income taxes
West	$	72,911	$	100,557
Central	13,939		12,951
East	13,312		1,726
Total homebuilding income before income taxes	100,162		115,234
Financial services	3,045		3,490
Total	$	103,207	$	118,724

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, 2023		December 31, 2022
Real estate inventories
West	$	2,254,286	$	2,258,606
Central	594,189		598,700
East	293,937		316,543
Total	$	3,142,412	$	3,173,849
Total assets(1)
West	$	2,549,111	$	2,552,121
Central	756,928		761,082
East	355,119		376,129
Corporate	1,036,791		978,748
Total homebuilding assets	4,697,949		4,668,080
Financial services	41,291		51,860
Total	$	4,739,240	$	4,719,940

__________

(1)    Total assets as of March 31, 2023 and December 31, 2022 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2023 and December 31, 2022 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets.

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Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareThe 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,
	2023		2022
Numerator:
Net income available to common stockholders	$	74,742	$	87,478
Denominator:
Basic weighted-average shares outstanding	101,019,253		107,326,911
Effect of dilutive shares:
Stock options and unvested restricted stock units	687,185		870,574
Diluted weighted-average shares outstanding	101,706,438		108,197,485
Earnings per share
Basic	$	0.74	$	0.82
Diluted	$	0.73	$	0.81
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share	2,671,754		2,405,692

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Receivables

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Receivables

Receivables

Receivables consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Escrow proceeds and other accounts receivable, net	$	84,709	$	113,082
Warranty insurance receivable (Note 13)	56,367		56,367
Total receivables	$	141,076	$	169,449

Receivables are evaluated for collectability and allowances for potential losses are established or maintained on applicable receivables based on an expected credit loss approach. Receivables were net of allowances for doubtful accounts of $472,000 as of both March 31, 2023 and December 31, 2022.

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Real Estate Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Real Estate Inventories

Real Estate Inventories

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

	March 31, 2023		December 31, 2022
Real estate inventories owned:
Homes completed or under construction	$	1,191,754	$	1,293,681
Land under development	1,335,789		1,279,394
Land held for future development	158,908		140,725
Model homes	240,333		231,157
Total real estate inventories owned	2,926,784		2,944,957
Real estate inventories not owned:
Land purchase and land option deposits	215,628		228,892
Total real estate inventories not owned	215,628		228,892
Total real estate inventories	$	3,142,412	$	3,173,849

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. The increase in land held for future development as of March 31, 2023 compared to December 31, 2022 is attributable to two projects located in our West reporting segment that were transferred from land under development.

Real estate inventories not owned represents deposits related to land purchase and land and lot option agreements. For further details, see Note 7, Variable Interest Entities.

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

	Three Months Ended March 31,
	2023		2022
Interest incurred	$	37,479	$	28,553
Interest capitalized	(37,479)		(28,553)
Interest expensed	$	—	$	—
Capitalized interest in beginning inventory	$	191,411	$	173,563
Interest capitalized as a cost of inventory	37,479		28,553
Interest previously capitalized as a cost of inventory, included in cost of sales	(20,251)		(17,065)
Capitalized interest in ending inventory	$	208,639	$	185,051

Interest is capitalized to real estate inventory during development and other qualifying activities. During all periods presented, we capitalized all interest incurred to real estate inventory in accordance with ASC Topic 835, Interest, as our qualified assets exceeded our debt. Interest that is capitalized to real estate inventory is included in cost of home sales or cost of land and lot sales as related units or lots are delivered. Interest that is expensed as incurred is included in other (expense) income, net.

Real Estate Inventory Impairments and Land Option Abandonments

Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Real estate inventory impairments	$	—	$	—
Land and lot option abandonments and pre-acquisition charges	717		766
Total	$	717	$	766

Impairments of real estate inventory, if any, 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.

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. 

Real estate inventory impairments and land option abandonments are recorded in cost of home sales and cost of land and lot sales on the consolidated statements of operations.

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Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

As of March 31, 2023, we held equity investments in twelve active homebuilding partnerships or limited liability companies. Our participation in these entities may be as a developer, a builder, or an investment partner. Our ownership percentage varies from 7% to 50%, depending on the investment, with no controlling interest held in any of these investments.

Aggregated assets, liabilities and operating results of the entities we account for as equity-method investments are as follows (in thousands):

	March 31, 2023		December 31, 2022
Assets
Cash	$	22,575	$	34,556
Receivables	36,298		30,893
Real estate inventories	451,417		458,121
Other assets	11,237		7,751
Total assets	$	521,527	$	531,321
Liabilities and equity
Accounts payable and other liabilities	$	145,388	$	149,172
Company’s equity	134,071		129,837
Outside interests’ equity	242,068		252,312
Total liabilities and equity	$	521,527	$	531,321

Results of operations from unconsolidated entities (in thousands):

	Three Months Ended March 31,
	2023		2022
Net sales	$	22,138	$	5,323
Other operating expense	(21,653)		(5,444)
Other loss, net	(3)		—
Net income (loss)	$	482	$	(121)
Company’s equity in income (loss) of unconsolidated entities	$	227	$	(9)

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Variable Interest Entities

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Variable Interest Entities

Land and Lot Option Agreements

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

We analyze each of our land and lot option agreements and other similar contracts under the provisions of Accounting Standards Topic 810 (“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 and lot option agreements have no recourse against us. The maximum exposure to loss under our land and lot option agreements is generally 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 landowner and budget shortfalls and savings will be borne by us. Additionally, we have entered into land banking arrangements which require us to complete development work even if we terminate the option to procure land or lots.

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

	March 31, 2023						December 31, 2022
	Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs		Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs
Unconsolidated VIEs	$	200,168	$	1,055,531	N/A		$	207,846	$	1,129,369	N/A
Other land option agreements	15,460		170,658		N/A		21,046		210,964		N/A
Total	$	215,628	$	1,226,189	$	—	$	228,892	$	1,340,333	$	—

Unconsolidated VIEs represent land option agreements that were not consolidated because we were not the primary beneficiary. Other land option agreements were not with VIEs.

In addition to the deposits presented in the table above, our exposure to loss related to our land and lot option contracts consisted of capitalized pre-acquisition costs of $14.3 million and $13.8 million as of March 31, 2023 and December 31, 2022, respectively. These pre-acquisition costs are included in real estate inventories as land under development on our consolidated balance sheets.

Tri Pointe Connect Joint Venture

During the first quarter of 2022, a reconsideration event under ASC 810 occurred for our Tri Pointe Connect joint venture that gave us the ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance. Based on our reassessment, we concluded that the mortgage financing joint venture is a VIE and we are the primary beneficiary based on our controlling financial interest. As a result, beginning in January 2022, the joint venture is accounted for as a consolidated VIE. As of January 1, 2022, the accompanying consolidated balance sheets include the assets, liabilities and noncontrolling interests of this VIE. As of March 31, 2023, the accompanying consolidated balance sheets included the carrying value of the VIE’s assets of $6.4 million of cash and $5.1 million of other assets, $3.4 million of accrued expenses and other liabilities, and $2.9 million in noncontrolling interests.

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Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible AssetsAs of March 31, 2023 and December 31, 2022, $139.3 million of goodwill is included in goodwill and other intangible assets, net on each of the consolidated balance sheets, which was recorded in connection with our merger with Weyerhaeuser Real Estate Company (“WRECO”) in 2014. In addition, as of March 31, 2023 and December 31, 2022, we have one intangible asset with a carrying amount of $17.3 million comprised of a Tri Pointe Homes trade name, which has an indefinite useful life and is non-amortizing, resulting from the acquisition of WRECO in 2014.Goodwill and other intangible assets are evaluated for impairment on an annual basis, or more frequently if indicators of impairment exist.

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Other Assets

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid expenses	$	17,959	$	20,471
Refundable fees and other deposits	7,107		5,226
Development rights, held for future use or sale	1,192		1,192
Deferred loan costs—loans payable	6,155		6,515
Operating properties and equipment, net	66,880		67,430
Lease right-of-use assets	63,700		63,918
Other	936		935
Total	$	163,929	$	165,687

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Accrued Expenses and Other Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

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

	March 31, 2023		December 31, 2022
Accrued payroll and related costs	$	22,352	$	60,682
Warranty reserves (Note 13)	101,527		104,375
Estimated cost for completion of real estate inventories	107,792		108,072
Customer deposits	43,439		42,027
Accrued income taxes payable	44,193		17,280
Accrued interest	23,972		9,351
Other tax liability	2,741		4,099
Lease liabilities	77,472		77,728
Other	12,787		19,420
Total	$	436,275	$	443,034

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Senior Notes and Loans Payable

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Senior Notes and Loans Payable

Senior Notes and Loans Payable

Senior Notes

The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
5.875% Senior Notes due June 15, 2024	$	450,000	$	450,000
5.250% Senior Notes due June 1, 2027	300,000		300,000
5.700% Senior Notes due June 15, 2028	350,000		350,000
Discount and deferred loan costs	(8,491)		(9,376)
Total	$	1,091,509	$	1,090,624

In June 2020, Tri Pointe issued $350 million aggregate principal amount of 5.700% Senior Notes due 2028 (the “2028 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $345.2 million, after debt issuance costs and discounts. The 2028 Notes mature on June 15, 2028 and interest is paid semiannually in arrears on June 15 and December 15 of each year until maturity.

In June 2017, Tri Pointe issued $300 million aggregate principal amount of 5.250% Senior Notes due 2027 (the “2027 Notes”) at 100.00% of their aggregate principal amount. Net proceeds of this issuance were $296.3 million, after debt issuance costs and discounts. The 2027 Notes mature on June 1, 2027 and interest is paid semiannually in arrears on June 1 and December 1 of each year until maturity.

Tri Pointe and its wholly owned subsidiary, Tri Pointe Homes Holdings, Inc., are co-issuers of the $450 million aggregate principal amount 5.875% Senior Notes due 2024 (the “2024 Notes”). The 2024 Notes were issued at 98.15% of their aggregate principal amount in June of 2014. The net proceeds from the offering of the 2024 Notes was $429.0 million, after debt issuance costs and discounts. The 2024 Notes mature on June 15, 2024, with interest payable semiannually in arrears on June 15 and December 15 of each year until maturity.

As of March 31, 2023, there were $7.2 million of capitalized debt financing costs, included in senior notes, net 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 $18.8 million and $3.2 million as of March 31, 2023 and December 31, 2022, respectively.

Loans Payable

The Company’s outstanding loans payable consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Term loan facility	$	250,000	$	250,000
Seller financed loans	37,427		37,427
Total	$	287,427	$	287,427

On June 29, 2022, we entered into a Third Modification Agreement (the “Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019. The Modification, among other things, (i) increased the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $650.0 million to $750.0 million, (ii) increased the sublimit for issuance of letters of credit under the Revolving Facility from $100 million to $150 million and (iii) extended the maturity date of both the Revolving Facility and term loan facility (the “Term Facility”) under the Credit Agreement to June 29, 2027. We may increase the Credit Facility to not more than $1.2 billion in the aggregate, at our request, upon satisfaction of specified conditions. We may borrow under the Revolving Facility in the ordinary course of business to repay senior notes and fund our operations, including our land acquisition, land development and homebuilding activities. Borrowings under the Revolving Facility will be governed by, among other things, a borrowing base. Interest rates under the Revolving Facility will be based on the Secured Overnight Financing Rate (“SOFR”), plus a spread ranging from 1.25% to 1.90%, depending on the Company’s leverage ratio. Interest rates under the Term Facility will be based on SOFR, plus a spread ranging from 1.10% to 1.85%, depending on the Company’s leverage ratio.

As of March 31, 2023, we had no outstanding debt under the Revolving Facility and there was $691.4 million of availability after considering the borrowing base provisions and outstanding letters of credit. As of March 31, 2023, we had $250 million outstanding debt under the Term Facility with an interest rate of 4.55%. As of March 31, 2023, there were $6.2 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 remaining term of the Credit Facility. Accrued interest, including loan commitment fees, related to the Term Facility was $346,000 and $1.5 million as of March 31, 2023 and December 31, 2022, respectively.

At March 31, 2023 and December 31, 2022, we had outstanding letters of credit of $58.6 million and $58.9 million, respectively. 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.

As of March 31, 2023 and December 31, 2022, we had $37.4 million outstanding related to one seller-financed loan to acquire lots for the construction of homes. Principal on this loan is expected to mature in 2023, provided certain achievements are met. The seller-financed loan accrues interest at an imputed interest rate of 4.50% per annum.

Interest Incurred

During the three months ended March 31, 2023 and 2022, the Company incurred interest of $37.5 million and $28.6 million, respectively, related to all debt during the period. Included in interest incurred are amortization of deferred financing and Senior Note discount costs of $1.2 million and $1.1 million for the three months ended March 31, 2023 and 2022, respectively. Accrued interest related to all outstanding debt at March 31, 2023 and December 31, 2022 was $24.0 million and $9.4 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 those relating to consolidated tangible net worth, leverage, liquidity or interest coverage, and a spec unit inventory test. The Credit Facility also requires that at least 95.0% of consolidated tangible net worth must be attributable to the Company and its guarantor subsidiaries, subject to certain grace periods.

The Company was in compliance with all applicable financial covenants as of March 31, 2023 and December 31, 2022.

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Fair Value Disclosures

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Disclosures

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, 2023 and December 31, 2022, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

		March 31, 2023				December 31, 2022
	Hierarchy	Book Value		Fair Value		Book Value		Fair Value
Senior Notes(1)	Level 2	$	1,098,685	$	1,041,250	$	1,098,425	$	1,040,750
Term loan(2)	Level 2	$	250,000	$	250,000	$	250,000	$	250,000
Seller financed loans(3)	Level 2	$	37,427	$	37,427	$	37,427	$	37,427

 __________

(1)The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $7.2 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of the Senior Notes at March 31, 2023 and December 31, 2022 is based on quoted market prices.

(2)The estimated fair value of the Term Loan Facility as of March 31, 2023 and December 31, 2022 approximated book value due to the variable interest rate terms of this loan.

(3)The estimated fair value of our seller financed loan as of December 31, 2022 approximated book value due to the short term nature of these loans.

At March 31, 2023 and December 31, 2022, the carrying value of cash and cash equivalents and receivables approximated fair value due to their short-term nature.

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 indicating the carrying value is not recoverable. No carrying values were adjusted to fair value for the three months ended March 31, 2023 or the year ended December 31, 2022.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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

We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. Accordingly, it is possible that the ultimate outcome of any matter, 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, we had zero legal reserves as of March 31, 2023 and December 31, 2022, 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 warranty and construction defect-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. 

Our warranty reserve and related estimated insurance recoveries are based on actuarial analysis that uses our historical claim and expense data, as well as industry data to estimate these overall costs and related recoveries. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. Our warranty reserve may also include an estimate of future fit and finish warranty claims to the extent not contemplated in the actuarial analysis. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a warranty or construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of product we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for variability in these underlying assumptions, our actual future costs could differ from those estimated. 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.

We also record expected recoveries from insurance carriers based on actual insurance claims made and actuarially determined amounts that depend on various factors, including the above-described reserve estimates, our insurance policy coverage limits for the applicable policy years and historical recovery rates. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. Outstanding warranty insurance receivables were $56.4 million as of both March 31, 2023 and December 31, 2022, respectively. Warranty insurance receivables are recorded in receivables on the accompanying consolidated balance sheets.

Warranty reserve activity consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Warranty reserves, beginning of period	$	104,375	$	103,976
Warranty reserves accrued	5,902		4,721
Warranty expenditures	(8,750)		(5,663)
Warranty reserves, end of period	$	101,527	$	103,034

Performance Bonds

We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. The beneficiaries of the bonds are various municipalities. As of March 31, 2023 and December 31, 2022, the Company had outstanding surety bonds totaling $692.0 million and $710.8 million, respectively. As of March 31, 2023 and December 31, 2022, our estimated cost to complete obligations related to these surety bonds was $411.1 million and $443.7 million, respectively.

Lease Obligations

Under ASC 842 we recognize a right-of-use lease asset and a lease liability for contracts deemed to contain a lease at the inception of the contract. Our lease population is fully comprised of operating leases, which are now recorded at the net present value of future lease obligations existing at each balance sheet date. At the inception of a lease, or if a lease is subsequently modified, we determine whether the lease is an operating or financing lease. Key estimates involved with ASC 842 include the discount rate used to measure our future lease obligations and the lease term, where considerations include renewal options and intent to renew. Lease right-of-use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities on our consolidated balance sheet.

Operating Leases

We lease certain property and equipment under non-cancelable operating leases. Office leases are for terms of up to ten years and generally provide renewal options. In most cases, we expect that, in the normal course of business, leases that expire will be renewed or replaced by other leases. Equipment leases are typically for terms of three to four years.

Ground Leases

In 1987, we obtained two 55-year ground leases of commercial property that provided for three renewal options of ten years each and one 45-year renewal option. We exercised the three 10-year extensions on one of these ground leases to extend the lease through 2071. The commercial buildings on these properties have been sold and the ground leases have been sublet to the buyers.

For one of these leases, we are responsible for making lease payments to the landowner, and we collect sublease payments from the buyers of the buildings. This ground lease has been subleased through 2041 to the buyers of the commercial buildings. For the second lease, the buyers of the buildings are responsible for making lease payments directly to the landowner, however, we have guaranteed the performance of the buyers/lessees. See below for additional information on leases (dollars in thousands):

	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Lease Cost
Operating lease cost (included in SG&A expense)	$	2,845	$	2,499
Ground lease cost (included in other operations expense)	663		635
Sublease income, operating leases	—		—
Sublease income, ground leases (included in other operations revenue)	(673)		(644)
Net lease cost	$	2,835	$	2,490
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows (included in operating cash flows)	$	2,429	$	3,381
Ground lease cash flows (included in operating cash flows)	$	663	$	663
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,927	$	83

	March 31, 2023		December 31, 2022
Weighted-average discount rate:
Operating leases	4.7	%	4.7	%
Ground leases	10.2	%	10.2	%
Weighted-average remaining lease term (in years):
Operating leases	6.8		7.0
Ground leases	45.1		45.3

The future minimum lease payments under our operating leases are as follows (in thousands):

	Property, Equipment and Other Leases		Ground Leases (1)
Remaining in 2023	$	6,973	$	2,428
2024	9,106		3,237
2025	8,717		3,237
2026	7,633		3,237
2027	6,893		3,237
Thereafter	18,092		78,640
Total lease payments	$	57,414	$	94,016
Less: Interest	8,215		65,743
Present value of operating lease liabilities	$	49,199	$	28,273

 __________

(1)    Ground leases are fully subleased through 2041, representing $60.2 million of the $94.0 million future ground lease obligations.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

2022 Long-Term Incentive Plan

On April 20, 2022, our stockholders approved the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (the “2022 Plan”), which had been previously approved by our board of directors. The 2022 Plan replaced the Company’s prior stock compensation plan, the TRI Pointe Group, Inc. Amended and Restated 2013 Long-Term Incentive Plan (the “2013 Plan”). The 2022 Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted stock, restricted stock units, bonus stock and performance awards. The 2022 Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2022 Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation.

The number of shares of our common stock that may be issued under the 2022 Plan is 7,500,000 shares. No new awards have been or will be granted under the 2013 Plan from and after February 23, 2022. Any awards outstanding under the 2013 Plan will remain subject to and be paid under the 2013 Plan, and any shares subject to outstanding awards under the 2013 Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2022 Plan.

To the extent that shares of our common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2022 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 will again be available under the 2022 Plan. However, the 2022 Plan prohibits us from re-using shares that are tendered or surrendered to pay the exercise cost or tax obligation for stock options and SARs.

As of March 31, 2023, there were 6,415,172 shares available for future grant under the 2022 Plan.

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

	Three Months Ended March 31,
	2023		2022
Total stock-based compensation	$	3,861	$	5,272

Stock-based compensation is charged to general and administrative expense on the accompanying consolidated statements of operations. As of March 31, 2023, total unrecognized stock-based compensation expense related to all stock-based awards was $32.4 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, 2023:

	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2022	159,255	$	15.08	0.9	$	565
Granted	—	—		—	—
Exercised	(48,592)	$	14.87	—	—
Forfeited	—	$	—	—	—
Options outstanding at March 31, 2023	110,663	$	15.17	0.9	$	1,064
Options exercisable at March 31, 2023	110,663	$	15.17	0.9	$	1,064

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.

Summary of Restricted Stock Unit Activity

The following table presents a summary of RSUs for the three months ended March 31, 2023:

	Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in thousands)
Nonvested RSUs at December 31, 2022	3,679,521	$	19.93	$	68,402
Granted	1,209,608	$	23.21	—
Vested	(1,133,424)	$	19.18	—
Forfeited	(126,093)	$	18.24	—
Nonvested RSUs at March 31, 2023	3,629,612	$	21.28	$	77,238

RSUs that vested, as reflected in the table above, during the three months ended March 31, 2023 include previously granted time-based RSUs. RSUs that were forfeited, as reflected in the table above, during the three months ended March 31, 2023 include performance-based RSUs and time-based RSUs that were forfeited for no consideration.

On February 22, 2023, the Company granted an aggregate of 505,200 time-based RSUs to certain 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 February 22, 2023 was measured using a price of $23.21 per share 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 February 22, 2023, the Company granted an aggregate of 704,408 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer, Chief Human Resources Officer and division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2023 to December 31, 2025. The fair value of these performance-based RSUs was measured using a price of $23.21, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

On February 22, 2022, the Company granted an aggregate of 629,520 time-based RSUs to certain 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 February 22, 2022 was measured using a price of $21.00 per share 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 February 22, 2022, the Company granted an aggregate of 668,150 performance-based RSUs to the Company’s Chief Executive Officer, Chief Operating Officer and President, Chief Financial Officer, General Counsel, Chief Marketing Officer and Chief Human Resources Officer. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue, and (ii) 50% to pre-tax earnings. 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. Any award earned based on performance achieved may be increased or decreased by 25% based on the Company’s total stockholder return (“TSR”) relative to its peer-group homebuilders. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was determined to be $22.30 per share based on a Monte Carlo simulation. Each award will be expensed over the requisite service period.

On February 22, 2022, the Company granted an aggregate of 235,078 performance-based RSUs to the Company’s division presidents. These performance-based RSUs are allocated to two separate performance metrics, as follows: (i) 50% to homebuilding revenue of the applicable Company division, and (ii) 50% to pre-tax earnings of the applicable Company division. The vesting, if at all, of these performance-based RSUs may range from 0% to 100% and will be based on the applicable Company division’s percentage attainment of specified threshold, target and maximum performance goals. The performance period for these performance-based RSUs is January 1, 2022 to December 31, 2024. The fair value of these performance-based RSUs was measured using a price of $21.00, which was the closing stock price on the date of grant. Each award will be expensed over the requisite service period.

As RSUs vest for employees, 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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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

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 $34.9 million as of both March 31, 2023 and December 31, 2022. We had a valuation allowance related to those net deferred tax assets of $3.4 million as of both March 31, 2023 and December 31, 2022. 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 $27.4 million and $30.2 million for the three months ended March 31, 2023 and 2022, respectively. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company did not have any uncertain tax positions recorded as of March 31, 2023 and December 31, 2022. The Company has not been assessed interest or penalties by any major tax jurisdictions related to prior years. 

The Company files income tax returns in the U.S., including federal and multiple state and local jurisdictions. We are

currently under examination by California for the 2020 and 2021 tax years. The outcome of this examination is not yet determinable.

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Related Party Transactions	3 Months Ended
	Mar. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsWe had no related party transactions for the three months ended March 31, 2023 and 2022.

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Supplemental Disclosure to Consolidated Statements of Cash Flows

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure to Consolidated Statements of Cash Flows

Supplemental Disclosure to Consolidated Statements of Cash Flows

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

	Three Months Ended March 31,
	2023		2022
Supplemental disclosure of cash flow information:
Interest paid (capitalized), net	$	(15,866)	$	(17,869)
Income taxes paid, net	$	329	$	—
Supplemental disclosures of noncash activities:
Amortization of senior note discount capitalized to real estate inventory	$	259	$	243
Amortization of deferred loan costs capitalized to real estate inventory	$	986	$	889

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Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. 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. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023 due to seasonal variations and other factors.

The consolidated financial statements include the accounts of Tri Pointe Homes and its wholly owned subsidiaries, as well as other entities in which Tri Pointe Homes has a controlling interest and variable interest entities (“VIEs”) in which Tri Pointe Homes is the primary beneficiary. The noncontrolling interests as of March 31, 2023 and December 31, 2022 represent the outside owners’ interests in the Company’s consolidated entities. All significant intercompany accounts have been eliminated upon consolidation.

Unless the context otherwise requires, the terms “Tri Pointe”, “the Company”, “we”, “us”, and “our” used herein refer to Tri Pointe Homes, Inc., a Delaware corporation, and its consolidated subsidiaries.

Use of Estimates

Use of Estimates

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

Cash and Cash Equivalents

Cash and Cash Equivalents and Concentration of Credit Risk

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.

Concentration of Credit Risk

Cash and Cash Equivalents and Concentration of Credit Risk

We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short-term liquid investments with a maturity date of less than three months from the date of acquisition, including U.S. Treasury bills and government money-mark funds with maturities of 90 days or less when purchased. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.

Revenue Recognition

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Topic 606 (“ASC 606”), Revenue from Contracts with Customers. Under ASC 606, we apply the following steps to determine the timing and amount of revenue to recognize: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

Home sales revenue

We generate the majority of our total revenues from home sales, which consists of our core business operation of building and delivering completed homes to homebuyers. Home sales revenue and related profit is generally recognized when title to and possession of the home are transferred to the homebuyer at the home closing date. Our performance obligation to deliver the agreed-upon home is generally satisfied in less than one year from the original contract date. Included in home sales revenue are forfeited deposits, which occur when homebuyers cancel home purchase contracts that include a nonrefundable deposit. Both revenue from forfeited deposits and deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers are immaterial.

Land and lot sales revenue

Historically, we have generated land and lot sales revenue from a small number of transactions, although in some periods we have realized a significant amount of revenue and gross margin. We do not expect our future land and lot sales revenue to be material, but we still consider these sales to be an ordinary part of our business, thus meeting the definition of contracts with customers. Similar to our home sales, revenue from land and lot sales is typically fully recognized when the land and lot sales transactions are consummated, at which time no further performance obligations are left to be satisfied. Some of our historical land and lot sales have included future profit participation rights. We will recognize future land and lot sales revenue in the periods in which all closing conditions are met, subject to the constraint on variable consideration related to profit participation rights, if such rights exist in the sales contract.

Other operations revenue

The majority of our homebuilding other operations revenue relates to a ground lease included in our West segment. We are responsible for making lease payments to the landowner, and we collect sublease payments from the owners of the buildings. This ground lease is accounted for in accordance with Accounting Standards Topic 842 (“ASC 842”), Leases. We do not recognize a material profit on this ground lease.

Financial services revenues

Tri Pointe Solutions is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, Tri Pointe Assurance title and escrow services operations, and Tri Pointe Advantage property and casualty insurance agency operations.

Mortgage financing operations

Tri Pointe Connect was formed as a joint venture with an established mortgage lender. The joint venture acts as a preferred mortgage loan broker to our homebuyers in all of the markets in which we operate, generating income from fees paid by third party lenders for the successful funding and closing of loans for homebuyers that originate through Tri Pointe Connect. Due to our ability to direct the activities of the joint venture that most significantly affect the entity’s economic performance, Tri Pointe Connect is fully consolidated under the Financial Services section of our consolidated statements of operations, with the noncontrolling interest recorded on the consolidated statements of operations as net income attributable to noncontrolling interests.

Title and escrow services operations

Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and Colorado and both title examinations and escrow services for our homebuyers in Arizona, the District of Columbia, Maryland, Nevada, Texas, Washington and Virginia. Tri Pointe Assurance is a wholly owned subsidiary of Tri Pointe and acts as a title agency for First American Title Insurance Company. Revenue from our title and escrow services operations is fully recognized at the time of the consummation of the home sales transaction, at which time no further performance obligations are left to be satisfied. Tri Pointe Assurance revenue is included in the Financial Services section of our consolidated statements of operations.

Property and casualty insurance agency operations

Tri Pointe Advantage is a wholly owned subsidiary of Tri Pointe and provides property and casualty insurance agency services that help facilitate the closing process in all of the markets in which we operate. The total consideration for these services, including renewal options, is estimated upon the issuance of the initial insurance policy, subject to constraint. Tri Pointe Advantage revenue is included in the Financial Services section of our consolidated statements of operations.

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted

No recent accounting pronouncements or changes in accounting pronouncements have been issued or adopted since those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 that are of material significance, or have potential material significance, to the Company.

Segment Information

In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments within our homebuilding business, we have considered similar economic and other characteristics, including product types, average sales prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding reporting segments and, as such, our homebuilding segments are reported under the following hierarchy:

West region: Arizona, California, Nevada and Washington

Central region: Colorado and Texas

East region: District of Columbia, Maryland, North Carolina, South Carolina and Virginia

Our Tri Pointe Solutions financial services operation is a reportable segment and is comprised of our Tri Pointe Connect mortgage financing operations, our Tri Pointe Assurance title and escrow services operations, and our Tri Pointe Advantage property and casualty insurance agency operations. For further details, see Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies.

Corporate is a non-operating segment that develops and implements company-wide strategic initiatives and provides support to our homebuilding reporting segments by centralizing certain administrative functions, such as marketing, legal, accounting, treasury, insurance, internal audit, 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. All of the expenses incurred by Corporate are allocated to each of the homebuilding reporting segments based on their respective percentage of revenues.

The reportable segments follow the same accounting policies used for our consolidated financial statements, as 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.

Fair Value Measurements

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

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Summary of Financial Information Relating to Reportable Segments

Total revenues and income before income taxes for each of our reportable segments were as follows (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenues
West	$	480,941	$	530,496
Central	166,140		137,097
East	123,704		59,899
Total homebuilding revenues	770,785		727,492
Financial services	8,876		8,752
Total	$	779,661	$	736,244
Income before income taxes
West	$	72,911	$	100,557
Central	13,939		12,951
East	13,312		1,726
Total homebuilding income before income taxes	100,162		115,234
Financial services	3,045		3,490
Total	$	103,207	$	118,724

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, 2023		December 31, 2022
Real estate inventories
West	$	2,254,286	$	2,258,606
Central	594,189		598,700
East	293,937		316,543
Total	$	3,142,412	$	3,173,849
Total assets(1)
West	$	2,549,111	$	2,552,121
Central	756,928		761,082
East	355,119		376,129
Corporate	1,036,791		978,748
Total homebuilding assets	4,697,949		4,668,080
Financial services	41,291		51,860
Total	$	4,739,240	$	4,719,940

__________

(1)    Total assets as of March 31, 2023 and December 31, 2022 includes $139.3 million of goodwill, with $125.4 million included in the West segment, $8.3 million included in the Central segment and $5.6 million included in the East segment. Total Corporate assets as of March 31, 2023 and December 31, 2022 includes our Tri Pointe Homes trade name. For further details on goodwill and our intangible assets, see Note 8, Goodwill and Other Intangible Assets.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the components used in the computation of basic and diluted earnings per share (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2023		2022
Numerator:
Net income available to common stockholders	$	74,742	$	87,478
Denominator:
Basic weighted-average shares outstanding	101,019,253		107,326,911
Effect of dilutive shares:
Stock options and unvested restricted stock units	687,185		870,574
Diluted weighted-average shares outstanding	101,706,438		108,197,485
Earnings per share
Basic	$	0.74	$	0.82
Diluted	$	0.73	$	0.81
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share	2,671,754		2,405,692

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Receivables (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Receivables

Receivables consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Escrow proceeds and other accounts receivable, net	$	84,709	$	113,082
Warranty insurance receivable (Note 13)	56,367		56,367
Total receivables	$	141,076	$	169,449

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Real Estate Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Summary of Real Estate Inventories

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

	March 31, 2023		December 31, 2022
Real estate inventories owned:
Homes completed or under construction	$	1,191,754	$	1,293,681
Land under development	1,335,789		1,279,394
Land held for future development	158,908		140,725
Model homes	240,333		231,157
Total real estate inventories owned	2,926,784		2,944,957
Real estate inventories not owned:
Land purchase and land option deposits	215,628		228,892
Total real estate inventories not owned	215,628		228,892
Total real estate inventories	$	3,142,412	$	3,173,849

Summary of Interest Incurred, Capitalized and Expensed

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

	Three Months Ended March 31,
	2023		2022
Interest incurred	$	37,479	$	28,553
Interest capitalized	(37,479)		(28,553)
Interest expensed	$	—	$	—
Capitalized interest in beginning inventory	$	191,411	$	173,563
Interest capitalized as a cost of inventory	37,479		28,553
Interest previously capitalized as a cost of inventory, included in cost of sales	(20,251)		(17,065)
Capitalized interest in ending inventory	$	208,639	$	185,051

Schedule of Real Estate Inventory Impairments and Land Option Abandonments

Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Real estate inventory impairments	$	—	$	—
Land and lot option abandonments and pre-acquisition charges	717		766
Total	$	717	$	766

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Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Aggregated Assets, Liabilities and Operating Results of Entities as Equity-Method Investments

	March 31, 2023		December 31, 2022
Assets
Cash	$	22,575	$	34,556
Receivables	36,298		30,893
Real estate inventories	451,417		458,121
Other assets	11,237		7,751
Total assets	$	521,527	$	531,321
Liabilities and equity
Accounts payable and other liabilities	$	145,388	$	149,172
Company’s equity	134,071		129,837
Outside interests’ equity	242,068		252,312
Total liabilities and equity	$	521,527	$	531,321

Results of operations from unconsolidated entities (in thousands):

	Three Months Ended March 31,
	2023		2022
Net sales	$	22,138	$	5,323
Other operating expense	(21,653)		(5,444)
Other loss, net	(3)		—
Net income (loss)	$	482	$	(121)
Company’s equity in income (loss) of unconsolidated entities	$	227	$	(9)

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Interests in Land Option Agreements

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

	March 31, 2023						December 31, 2022
	Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs		Deposits		Remaining Purchase Price		Consolidated Inventory Held by VIEs
Unconsolidated VIEs	$	200,168	$	1,055,531	N/A		$	207,846	$	1,129,369	N/A
Other land option agreements	15,460		170,658		N/A		21,046		210,964		N/A
Total	$	215,628	$	1,226,189	$	—	$	228,892	$	1,340,333	$	—

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Other Assets (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid expenses	$	17,959	$	20,471
Refundable fees and other deposits	7,107		5,226
Development rights, held for future use or sale	1,192		1,192
Deferred loan costs—loans payable	6,155		6,515
Operating properties and equipment, net	66,880		67,430
Lease right-of-use assets	63,700		63,918
Other	936		935
Total	$	163,929	$	165,687

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Accrued Expenses and Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Liabilities

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

	March 31, 2023		December 31, 2022
Accrued payroll and related costs	$	22,352	$	60,682
Warranty reserves (Note 13)	101,527		104,375
Estimated cost for completion of real estate inventories	107,792		108,072
Customer deposits	43,439		42,027
Accrued income taxes payable	44,193		17,280
Accrued interest	23,972		9,351
Other tax liability	2,741		4,099
Lease liabilities	77,472		77,728
Other	12,787		19,420
Total	$	436,275	$	443,034

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Senior Notes and Loans Payable (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Senior Notes and Outstanding Loans Payable

The Company’s outstanding senior notes (together, the “Senior Notes”) consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
5.875% Senior Notes due June 15, 2024	$	450,000	$	450,000
5.250% Senior Notes due June 1, 2027	300,000		300,000
5.700% Senior Notes due June 15, 2028	350,000		350,000
Discount and deferred loan costs	(8,491)		(9,376)
Total	$	1,091,509	$	1,090,624

The Company’s outstanding loans payable consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Term loan facility	$	250,000	$	250,000
Seller financed loans	37,427		37,427
Total	$	287,427	$	287,427

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Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Related to Financial Instruments, Measured at Fair Value on a Recurring Basis

A summary of assets and liabilities at March 31, 2023 and December 31, 2022, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):

		March 31, 2023				December 31, 2022
	Hierarchy	Book Value		Fair Value		Book Value		Fair Value
Senior Notes(1)	Level 2	$	1,098,685	$	1,041,250	$	1,098,425	$	1,040,750
Term loan(2)	Level 2	$	250,000	$	250,000	$	250,000	$	250,000
Seller financed loans(3)	Level 2	$	37,427	$	37,427	$	37,427	$	37,427

 __________

(1)The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $7.2 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of the Senior Notes at March 31, 2023 and December 31, 2022 is based on quoted market prices.

(2)The estimated fair value of the Term Loan Facility as of March 31, 2023 and December 31, 2022 approximated book value due to the variable interest rate terms of this loan.

(3)The estimated fair value of our seller financed loan as of December 31, 2022 approximated book value due to the short term nature of these loans.

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Warranty Reserves

Warranty reserve activity consisted of the following (in thousands):

	Three Months Ended March 31,
	2023		2022
Warranty reserves, beginning of period	$	104,375	$	103,976
Warranty reserves accrued	5,902		4,721
Warranty expenditures	(8,750)		(5,663)
Warranty reserves, end of period	$	101,527	$	103,034

Schedule of Lease Costs and Other Information

See below for additional information on leases (dollars in thousands):

	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Lease Cost
Operating lease cost (included in SG&A expense)	$	2,845	$	2,499
Ground lease cost (included in other operations expense)	663		635
Sublease income, operating leases	—		—
Sublease income, ground leases (included in other operations revenue)	(673)		(644)
Net lease cost	$	2,835	$	2,490
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows (included in operating cash flows)	$	2,429	$	3,381
Ground lease cash flows (included in operating cash flows)	$	663	$	663
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,927	$	83

	March 31, 2023		December 31, 2022
Weighted-average discount rate:
Operating leases	4.7	%	4.7	%
Ground leases	10.2	%	10.2	%
Weighted-average remaining lease term (in years):
Operating leases	6.8		7.0
Ground leases	45.1		45.3

Schedule of Future Minimum Lease Payments

The future minimum lease payments under our operating leases are as follows (in thousands):

	Property, Equipment and Other Leases		Ground Leases (1)
Remaining in 2023	$	6,973	$	2,428
2024	9,106		3,237
2025	8,717		3,237
2026	7,633		3,237
2027	6,893		3,237
Thereafter	18,092		78,640
Total lease payments	$	57,414	$	94,016
Less: Interest	8,215		65,743
Present value of operating lease liabilities	$	49,199	$	28,273

 __________

(1)    Ground leases are fully subleased through 2041, representing $60.2 million of the $94.0 million future ground lease obligations.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Compensation Expense Recognized Related to All Stock-Based Awards

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

	Three Months Ended March 31,
	2023		2022
Total stock-based compensation	$	3,861	$	5,272

Summary of Stock Option Awards

The following table presents a summary of stock option awards for the three months ended March 31, 2023:

	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2022	159,255	$	15.08	0.9	$	565
Granted	—	—		—	—
Exercised	(48,592)	$	14.87	—	—
Forfeited	—	$	—	—	—
Options outstanding at March 31, 2023	110,663	$	15.17	0.9	$	1,064
Options exercisable at March 31, 2023	110,663	$	15.17	0.9	$	1,064

Summary of Restricted Stock Units

The following table presents a summary of RSUs for the three months ended March 31, 2023:

	Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in thousands)
Nonvested RSUs at December 31, 2022	3,679,521	$	19.93	$	68,402
Granted	1,209,608	$	23.21	—
Vested	(1,133,424)	$	19.18	—
Forfeited	(126,093)	$	18.24	—
Nonvested RSUs at March 31, 2023	3,629,612	$	21.28	$	77,238

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Supplemental Disclosure to Consolidated Statements of Cash Flows (Tables)

3 Months Ended

Mar. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure to Consolidated Statement of Cash Flows

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

	Three Months Ended March 31,
	2023		2022
Supplemental disclosure of cash flow information:
Interest paid (capitalized), net	$	(15,866)	$	(17,869)
Income taxes paid, net	$	329	$	—
Supplemental disclosures of noncash activities:
Amortization of senior note discount capitalized to real estate inventory	$	259	$	243
Amortization of deferred loan costs capitalized to real estate inventory	$	986	$	889

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Organization, Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details)	Mar. 31, 2023 state
Accounting Policies [Abstract]
Number of states in which entity operates	10

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Segment Information - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 business_line segment
Segment Reporting [Abstract]
Number of principal businesses | business_line	2
Number of reportable segments | segment	3

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Segment Information - Summary of Financial Information Relating to Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segment Reporting Information
Revenues	$ 779,661	$ 736,244
Income before income taxes	103,207	118,724
Real estate inventories	3,142,412		$ 3,173,849
Total assets	4,739,240		4,719,940
Goodwill	139,300		139,300
Homebuilding Revenue
Segment Reporting Information
Revenues	770,785	727,492
Income before income taxes	100,162	115,234
Real estate inventories	3,142,412		3,173,849
Total assets	4,697,949		4,668,080
Goodwill	139,300		139,300
Homebuilding Revenue | Corporate
Segment Reporting Information
Total assets	1,036,791		978,748
Homebuilding Revenue | West
Segment Reporting Information
Revenues	480,941	530,496
Income before income taxes	72,911	100,557
Goodwill	125,400		125,400
Homebuilding Revenue | West | Operating Segments
Segment Reporting Information
Real estate inventories	2,254,286		2,258,606
Total assets	2,549,111		2,552,121
Homebuilding Revenue | Central
Segment Reporting Information
Revenues	166,140	137,097
Income before income taxes	13,939	12,951
Goodwill	8,300		8,300
Homebuilding Revenue | Central | Operating Segments
Segment Reporting Information
Real estate inventories	594,189		598,700
Total assets	756,928		761,082
Homebuilding Revenue | East
Segment Reporting Information
Revenues	123,704	59,899
Income before income taxes	13,312	1,726
Goodwill	5,600		5,600
Homebuilding Revenue | East | Operating Segments
Segment Reporting Information
Real estate inventories	293,937		316,543
Total assets	355,119		376,129
Financial Services Segment
Segment Reporting Information
Income before income taxes	3,045	$ 3,490
Financial Services Segment | Operating Segments
Segment Reporting Information
Total assets	$ 41,291		$ 51,860

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income available to common stockholders	$ 74,742	$ 87,478
Net income available to common stockholders	$ 74,742	$ 87,478
Denominator:
Basic weighted-average shares outstanding (in shares)	101,019,253	107,326,911
Effect of dilutive shares:
Stock options and unvested restricted stock units (in shares)	687,185	870,574
Diluted weighted-average shares outstanding (in shares)	101,706,438	108,197,485
Earnings per share
Basic (in dollars per share)	$ 0.74	$ 0.82
Diluted (in dollars per share)	$ 0.73	$ 0.81
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share (in shares)	2,671,754	2,405,692

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Receivables - Components of Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Escrow proceeds and other accounts receivable, net	$ 84,709	$ 113,082
Warranty insurance receivable	56,367	56,367
Total receivables	$ 141,076	$ 169,449

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Receivables - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Receivables [Abstract]
Allowance for doubtful accounts	$ 472	$ 472

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Real Estate Inventories - Summary of Real Estate Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Real estate inventories owned:
Homes completed or under construction	$ 1,191,754	$ 1,293,681
Land under development	1,335,789	1,279,394
Land held for future development	158,908	140,725
Model homes	240,333	231,157
Total real estate inventories owned	2,926,784	2,944,957
Real estate inventories not owned:
Land purchase and land option deposits	215,628	228,892
Total real estate inventories not owned	215,628	228,892
Total real estate inventories	$ 3,142,412	$ 3,173,849

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Real Estate Inventories - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 project
Real Estate [Abstract]
Number of projects transferred to land held for future development	2

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Real Estate Inventories - Summary of Interest Incurred, Capitalized and Expensed (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Real Estate [Abstract]
Interest incurred	$ 37,479	$ 28,553
Interest capitalized	(37,479)	(28,553)
Interest expensed	0	0
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
Capitalized interest in beginning inventory	191,411	173,563
Interest capitalized as a cost of inventory	37,479	28,553
Interest previously capitalized as a cost of inventory, included in cost of sales	(20,251)	(17,065)
Capitalized interest in ending inventory	$ 208,639	$ 185,051

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Real Estate Inventories - Schedule of Real Estate Inventory Impairments and Land Option Abandonments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Real Estate [Abstract]
Real estate inventory impairments	$ 0	$ 0
Land and lot option abandonments and pre-acquisition charges	717	766
Total	$ 717	$ 766

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Investments in Unconsolidated Entities - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 investment
Minimum
Investment Holdings
Ownership percentage	7.00%
Maximum
Investment Holdings
Ownership percentage	50.00%
Homebuilding partnerships or limited liability companies
Investment Holdings
Number of equity investments	12

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Investments in Unconsolidated Entities - Aggregated Assets, Liabilities and Operating Results of Entities as Equity-Method Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Assets
Cash	$ 966,298		$ 889,664
Receivables	141,076		169,449
Real estate inventories	3,142,412		3,173,849
Other assets	163,929		165,687
Total assets	4,739,240		4,719,940
Liabilities and equity
Company’s equity	2,863,623		2,832,389
Outside interests’ equity	2,862		4,142
Total liabilities and equity	4,739,240		4,719,940
Other operations expense	(665)	$ (646)
Net income (loss)	75,857	88,499
Company’s equity in income (loss) of unconsolidated entities	227	(55)
Equity method investment, nonconsolidated investee or group of investees
Assets
Cash	22,575		34,556
Receivables	36,298		30,893
Real estate inventories	451,417		458,121
Other assets	11,237		7,751
Total assets	521,527		531,321
Liabilities and equity
Accounts payable and other liabilities	145,388		149,172
Company’s equity	134,071		129,837
Outside interests’ equity	242,068		252,312
Total liabilities and equity	521,527		$ 531,321
Net sales	22,138	5,323
Other operations expense	(21,653)	(5,444)
Other loss, net	(3)	0
Net income (loss)	482	(121)
Company’s equity in income (loss) of unconsolidated entities	$ 227	$ (9)

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Variable Interest Entities - Summary of Interests in Land Option Agreements (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Variable Interest Entity
Deposits	$ 215,628	$ 228,892
Remaining Purchase Price	1,226,189	1,340,333
Consolidated Inventory Held by VIEs	0	0
Unconsolidated VIEs
Variable Interest Entity
Deposits	200,168	207,846
Remaining Purchase Price	1,055,531	1,129,369
Other land option agreements
Variable Interest Entity
Deposits	15,460	21,046
Remaining Purchase Price	$ 170,658	$ 210,964

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Variable Interest Entities -Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Variable Interest Entity
Other assets	$ 163,929	$ 165,687
Accrued expenses and other liabilities	436,275	443,034
Noncontrolling interests	2,862	4,142
Other land option agreements
Variable Interest Entity
Capitalized pre-acquisition costs	14,300	$ 13,800
Consolidated VIEs
Variable Interest Entity
Cash	6,400
Other assets	5,100
Accrued expenses and other liabilities	3,400
Noncontrolling interests	$ 2,900

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Goodwill and Other Intangible Assets - Narrative (Details) $ in Thousands	Mar. 31, 2023 USD ($) intangible_asset	Dec. 31, 2022 USD ($) intangible_asset
Schedule Of Intangible Assets And Goodwill
Goodwill	$ 139,300	$ 139,300
WRECO | Trade Names
Schedule Of Intangible Assets And Goodwill
Trade names, net carrying amount	$ 17,300	$ 17,300
WRECO | Trade Names
Schedule Of Intangible Assets And Goodwill
Number of intangible assets | intangible_asset	1	1

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Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 17,959	$ 20,471
Refundable fees and other deposits	7,107	5,226
Development rights, held for future use or sale	1,192	1,192
Deferred loan costs—loans payable	6,155	6,515
Operating properties and equipment, net	66,880	67,430
Lease right-of-use assets	63,700	63,918
Other	936	935
Total	$ 163,929	$ 165,687
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Total	Total

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Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued payroll and related costs	$ 22,352	$ 60,682
Warranty reserves	101,527	104,375	$ 103,034	$ 103,976
Estimated cost for completion of real estate inventories	107,792	108,072
Customer deposits	43,439	42,027
Accrued income taxes payable	44,193	17,280
Accrued interest	23,972	9,351
Other tax liability	2,741	4,099
Lease liabilities	77,472	77,728
Other	12,787	19,420
Total	$ 436,275	$ 443,034
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Total	Total

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Senior Notes and Loans Payable - Schedule of Senior Notes (Details) - Senior Notes - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2020	Jun. 30, 2017
Debt Instrument
Discount and deferred loan costs	$ (8,491)	$ (9,376)
Total	$ 1,091,509	$ 1,090,624
5.875% Senior Notes due June 15, 2024
Debt Instrument
Interest rate on senior note (percent)	5.875%	5.875%		5.875%
Long-term debt, gross	$ 450,000	$ 450,000
5.250% Senior Notes due June 1, 2027
Debt Instrument
Interest rate on senior note (percent)	5.25%	5.25%		5.25%
Long-term debt, gross	$ 300,000	$ 300,000
5.700% Senior Notes due June 15, 2028
Debt Instrument
Interest rate on senior note (percent)	5.70%	5.70%	5.70%
Long-term debt, gross	$ 350,000	$ 350,000

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Senior Notes and Loans Payable - Narrative (Details)		1 Months Ended		3 Months Ended
	Jun. 29, 2022 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2023 USD ($) loan	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) loan	Jun. 28, 2022 USD ($)
Debt Instrument
Capitalization of deferred finance costs				$ 6,155,000		$ 6,515,000
Accrued interest				23,972,000		9,351,000
Loans payable				$ 287,427,000		$ 287,427,000
Number of seller-financed loans | loan				1,000		1,000
Interest incurred				$ 37,479,000	$ 28,553,000
Term loan facility
Debt Instrument
Amortization of deferred financing costs				1,200,000	$ 1,100,000
Senior Notes
Debt Instrument
Capitalization of deferred finance costs				7,200,000		$ 7,800,000
Accrued interest				$ 18,800,000		3,200,000
Seller financed loans
Debt Instrument
Interest rate on debt instrument (percent)				4.50%
Loans payable				$ 37,427,000		$ 37,427,000
5.700% Senior Notes due June 15, 2028 | Senior Notes
Debt Instrument
Aggregate principal amount		$ 350,000,000
Interest rate on debt instrument (percent)		5.70%		5.70%		5.70%
Debt issuance, percentage of aggregate principal (percent)		100.00%
Proceeds from issuance of senior notes, net		$ 345,200,000
5.250% Senior Notes due June 1, 2027 | Senior Notes
Debt Instrument
Aggregate principal amount			$ 300,000,000
Interest rate on debt instrument (percent)			5.25%	5.25%		5.25%
Debt issuance, percentage of aggregate principal (percent)			100.00%
Proceeds from issuance of senior notes, net			$ 296,300,000
5.875% Senior Notes due June 15, 2024 | Senior Notes
Debt Instrument
Aggregate principal amount			$ 450,000,000
Interest rate on debt instrument (percent)			5.875%	5.875%		5.875%
Proceeds from issuance of senior notes, net			$ 429,000,000
Notes issue price as a percentage of principal amount			98.15%
Revolving Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity under facility	$ 750,000,000						$ 650,000,000
Amended Revolving Credit Facility | Revolving Credit Facility
Debt Instrument
Capitalization of deferred finance costs				$ 6,200,000
Accrued interest				346,000		$ 1,500,000
Loans payable				0
Line of credit facility, current borrowing capacity				691,400,000
Amended Revolving Credit Facility | Revolving Credit Facility | Minimum
Debt Instrument
Debt instrument variable interest rate (percent)	1.25%
Amended Revolving Credit Facility | Revolving Credit Facility | Maximum
Debt Instrument
Debt instrument variable interest rate (percent)	1.90%
Amended Revolving Credit Facility | Letters of Credit
Debt Instrument
Maximum borrowing capacity under facility	$ 150,000,000						$ 100,000,000
Outstanding letters of credit				$ 58,600,000		58,900,000
Revolving Facility and Term Loan Facility
Debt Instrument
Line of credit facility, potential maximum borrowing capacity under specified conditions	$ 1,200,000,000
Consolidated tangible net worth attributed to Company required under covenants (percent)				95.00%
Term Loan Facility | Term loan facility
Debt Instrument
Loans payable				$ 250,000,000		$ 250,000,000
Interest rate of outstanding debt (percent)				4.55%
Term Loan Facility | Term loan facility | Minimum
Debt Instrument
Debt instrument variable interest rate (percent)	1.10%
Term Loan Facility | Term loan facility | Maximum
Debt Instrument
Debt instrument variable interest rate (percent)	1.85%

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Senior Notes and Loans Payable - Schedule of Outstanding Loans Payable (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Line of Credit Facility
Loans payable	$ 287,427	$ 287,427
Seller financed loans
Line of Credit Facility
Loans payable	37,427	37,427
Term loan facility | Term loan facility
Line of Credit Facility
Loans payable	$ 250,000	$ 250,000

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Fair Value Disclosures - Summary of Assets and Liabilities Related to Financial Instruments, Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred loan costs	$ 6,155	$ 6,515
Term Loan | Level 2 | Recurring | Book Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	250,000	250,000
Term Loan | Level 2 | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	250,000	250,000
Senior notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred loan costs	7,200	7,800
Senior notes | Level 2 | Recurring | Book Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	1,098,685	1,098,425
Senior notes | Level 2 | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	1,041,250	1,040,750
Seller financed loans | Level 2 | Recurring | Book Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	37,427	37,427
Seller financed loans | Level 2 | Recurring | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets and liabilities related to financial instruments	$ 37,427	$ 37,427

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Commitments and Contingencies - Narrative (Details)	12 Months Ended
	Dec. 31, 1987 lease leaseRenewalOption	Dec. 31, 1987 leaseExtension lease	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Commitment And Contingencies [Line Items]
Legal reserves			$ 0	$ 0
Outstanding warranty insurance receivables			56,367,000	56,367,000
Estimated remaining liabilities related to surety bonds			$ 12,787,000	19,420,000
Office Leases
Commitment And Contingencies [Line Items]
Lease obligation original term (in years)			10 years
Equipment Leases | Minimum
Commitment And Contingencies [Line Items]
Lease obligation original term (in years)			3 years
Equipment Leases | Maximum
Commitment And Contingencies [Line Items]
Lease obligation original term (in years)			4 years
Ground leases
Commitment And Contingencies [Line Items]
Lease obligation original term (in years)	55 years	55 years
Number of properties subject to ground leases | lease	2	2
Ground leases | Ten Year Renewal Option
Commitment And Contingencies [Line Items]
Number of lease renewal options	3	3
Term of lease extension (in years)	10 years	10 years
Ground leases | Forty-five Year Renewal Option
Commitment And Contingencies [Line Items]
Lease obligation original term (in years)	45 years	45 years
Number of properties subject to ground leases | lease	1	1
Ground leases | Extension Through 2071
Commitment And Contingencies [Line Items]
Number of ground leases extended | leaseExtension		1
Surety Bonds
Commitment And Contingencies [Line Items]
Outstanding surety bonds			$ 692,000,000	710,800,000
Estimated remaining liabilities related to surety bonds			$ 411,100,000	$ 443,700,000

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Commitments and Contingencies - Schedule of Warranty Reserves (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Movement in Standard Product Warranty Accrual
Warranty reserves, beginning of period	$ 104,375	$ 103,976
Warranty reserves accrued	5,902	4,721
Warranty expenditures	(8,750)	(5,663)
Warranty reserves, end of period	$ 101,527	$ 103,034

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Commitments and Contingencies - Lease Costs and Other Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Lessee, Lease, Description
Net lease cost	$ 2,835	$ 2,490
Right-of-use assets obtained in exchange for new operating lease liabilities	1,927	83
Operating leases
Lessee, Lease, Description
Lease cost	2,845	2,499
Sublease income, ground leases (included in other operations revenue)	0	0
Cash paid for amounts included in the measurement of lease liabilities	$ 2,429	3,381
Weighted-average discount rate (percent)	4.70%		4.70%
Weighted-average remaining lease term (in years)	6 years 9 months 18 days		7 years
Ground leases
Lessee, Lease, Description
Lease cost	$ 663	635
Sublease income, ground leases (included in other operations revenue)	(673)	(644)
Cash paid for amounts included in the measurement of lease liabilities	$ 663	$ 663
Weighted-average discount rate (percent)	10.20%		10.20%
Weighted-average remaining lease term (in years)	45 years 1 month 6 days		45 years 3 months 18 days

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Lessee, Lease, Description
Present value of operating lease liabilities	$ 77,472	$ 77,728
Operating leases
Lessee, Lease, Description
Remaining in 2023	6,973
2024	9,106
2025	8,717
2026	7,633
2027	6,893
Thereafter	18,092
Total lease payments	57,414
Less: Interest	8,215
Present value of operating lease liabilities	49,199
Ground leases
Lessee, Lease, Description
Remaining in 2023	2,428
2024	3,237
2025	3,237
2026	3,237
2027	3,237
Thereafter	78,640
Total lease payments	94,016
Less: Interest	65,743
Present value of operating lease liabilities	28,273
Payments to be received	$ 60,200

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Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended
	Feb. 22, 2023	Feb. 22, 2022	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized stock based compensation related to all stock-based awards			$ 32.4
Weighted average period, expense to recognized (in years)			2 years 3 months 18 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock units, granted (in shares)			1,209,608
Granted (in dollars per share)			$ 23.21
Restricted Stock Units (RSUs) | Employees and Officers
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock units, granted (in shares)	505,200	629,520
Award vesting period (in years)	3 years	3 years
Share price (in dollars per share)	$ 23.21	$ 21.00
Restricted Stock Units (RSUs) | Officers
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock units, granted (in shares)	704,408	668,150
Granted (in dollars per share)	$ 23.21	$ 22.30
Potential change in TSR (percent)		25.00%
Restricted Stock Units (RSUs) | Officers | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Vesting rights (percent)		0.00%
Restricted Stock Units (RSUs) | Officers | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Vesting rights (percent)		100.00%
Restricted Stock Units (RSUs) | Officers | Homebuilding Revenue
Share-based Compensation Arrangement by Share-based Payment Award
Performance percentage (percent)		50.00%
Restricted Stock Units (RSUs) | Officers | Pre-tax Earnings
Share-based Compensation Arrangement by Share-based Payment Award
Performance percentage (percent)		50.00%
Restricted Stock Units (RSUs) | Division Presidents
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock units, granted (in shares)		235,078
Granted (in dollars per share)		$ 21.00
Restricted Stock Units (RSUs) | Division Presidents | Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Vesting rights (percent)		0.00%
Restricted Stock Units (RSUs) | Division Presidents | Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Vesting rights (percent)		100.00%
Restricted Stock Units (RSUs) | Division Presidents | Homebuilding Revenue
Share-based Compensation Arrangement by Share-based Payment Award
Performance percentage (percent)		50.00%
Restricted Stock Units (RSUs) | Division Presidents | Pre-tax Earnings
Share-based Compensation Arrangement by Share-based Payment Award
Performance percentage (percent)		50.00%
2022 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Common stock authorized for incentive plan (in shares)			7,500,000
Shares available for future grant (in shares)			6,415,172

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Stock-Based Compensation - Summary of Compensation Expense Recognized Related to all Stock-Based Awards (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]
Total stock-based compensation	$ 3,861	$ 5,272

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Stock-Based Compensation - Summary of Stock Option Awards (Details) - Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Options
Options outstanding at beginning of period (in shares)	159,255
Options granted (in shares)	0
Options exercised (in shares)	(48,592)
Options forfeited (in shares)	0
Options outstanding at end of period (in shares)	110,663	159,255
Options exercisable at end of period (in shares)	110,663
Weighted Average Exercise Price Per Share
Beginning balance (in dollars per share)	$ 15.08
Granted (in dollars per share)	0
Exercised (in dollars per share)	14.87
Forfeited (in dollars per share)	0
Ending balance (in dollars per share)	15.17	$ 15.08
Exercisable at end of period (in dollars per share)	$ 15.17
Weighted average contractual life	10 months 24 days	10 months 24 days
Weighted average options exercisable	10 months 24 days
Aggregate intrinsic value	$ 1,064	$ 565
Aggregate intrinsic value, exercisable at end of period	$ 1,064

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Stock-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Restricted Stock Units
Nonvested RSU's beginning balance (in shares)	3,679,521
Granted (in shares)	1,209,608
Vested (in shares)	(1,133,424)
Forfeited (in shares)	(126,093)
Nonvested RSU's ending balance (in shares)	3,629,612
Weighted Average Grant Date Fair Value Per Share
Beginning balance (in dollars per share)	$ 19.93
Granted (in dollars per share)	23.21
Vested (in dollars per share)	19.18
Forfeited (in dollars per share)	18.24
Ending balance (in dollars per share)	$ 21.28
Aggregate intrinsic value	$ 77,238	$ 68,402

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Deferred tax assets, net	$ 34,851		$ 34,851
Valuation allowance related to net deferred tax assets	3,400		$ 3,400
Provision for income taxes	$ 27,350	$ 30,225

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Related Party Transactions (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Related Party Transactions [Abstract]
Related party transactions	$ 0	$ 0

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Supplemental Disclosure to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental disclosure of cash flow information:
Interest paid (capitalized), net	$ (15,866)	$ (17,869)
Income taxes paid, net	329	0
Supplemental disclosures of noncash activities:
Amortization of senior note discount capitalized to real estate inventory	259	243
Amortization of deferred loan costs capitalized to real estate inventory	$ 986	$ 889