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Supplemental Guarantor Information
6 Months Ended
Jun. 30, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Supplemental Guarantor Information
Supplemental Guarantor Information
2021 Notes and 2027 Notes
On May 26, 2016, TRI Pointe Group issued the 2021 Notes. On June 5, 2017, TRI Pointe Group issued the 2027 Notes. All of TRI Pointe Group’s 100% owned subsidiaries that are guarantors (each a “Guarantor” and, collectively, the “Guarantors”) of the Credit Facility, including TRI Pointe Homes, are party to supplemental indentures pursuant to which they jointly and severally guarantee TRI Pointe Group’s obligations with respect to the 2021 Notes and the 2027 Notes. Each Guarantor of the 2021 Notes and the 2027 Notes is 100% owned by TRI Pointe Group, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2021 Notes and the 2027 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 Group 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 Group 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 2021 Notes and the 2027 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 Group or a subsidiary thereof have been sold; (iii) the Guarantor merges with and into TRI Pointe Group or another Guarantor, with TRI Pointe Group 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 Group or any other Guarantor which gave rise to such Guarantor guaranteeing the 2021 Notes or the 2027 Notes; (vi) TRI Pointe Group exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable supplemental indenture are discharged.
2019 Notes and 2024 Notes
TRI Pointe Group and TRI Pointe Homes are co-issuers of the 2019 Notes and the 2024 Notes. All of the Guarantors (other than TRI Pointe Homes) have entered into supplemental indentures pursuant to which they jointly and severally guarantee the obligations of TRI Pointe Group and TRI Pointe Homes with respect to the 2019 Notes and the 2024 Notes. Each Guarantor of the 2019 Notes and the 2024 Notes is 100% owned by TRI Pointe Group and TRI Pointe Homes, and all guarantees are full and unconditional, subject to customary exceptions pursuant to the indentures governing the 2019 Notes and the 2024 Notes, as described below.
A Guarantor of the 2019 Notes and 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 2019 Notes and 2024 Notes; (vi) TRI Pointe exercises its legal defeasance or covenant defeasance options; or (vii) all obligations under the applicable indenture are discharged.
Presented below are the condensed consolidating balance sheets at June 30, 2017 and December 31, 2016, condensed consolidating statements of operations for the three and six months ended June 30, 2017 and 2016 and condensed consolidating statement of cash flows for the six months ended June 30, 2017 and 2016 Because TRI Pointe’s non-Guarantor subsidiaries are considered minor, as defined in Rule 3-10(h) of Regulation S-X, the non-Guarantor subsidiaries’ information is not separately presented in the tables below, but is included with the Guarantors. Additionally, because TRI Pointe Group has no independent assets or operations, as defined in Rule 3-10(h) of Regulation S-X, the condensed consolidated financial information of TRI Pointe Group and TRI Pointe Homes, the co-issuers of the 2019 Notes and 2024 Notes, is presented together in the column titled “Issuer”.
Condensed Consolidating Balance Sheet (in thousands):
 
 
June 30, 2017
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
48,305

 
$
66,640

 
$

 
$
114,945

Receivables
16,436

 
56,567

 

 
73,003

Intercompany receivables
961,964

 

 
(961,964
)
 

Real estate inventories
922,893

 
2,285,448

 

 
3,208,341

Investments in unconsolidated entities

 
18,787

 

 
18,787

Goodwill and other intangible assets, net
156,604

 
4,624

 

 
161,228

Investments in subsidiaries
1,328,681

 

 
(1,328,681
)
 

Deferred tax assets, net
15,644

 
101,938

 

 
117,582

Other assets
8,127

 
49,984

 

 
58,111

Total Assets
$
3,458,654

 
$
2,583,988

 
$
(2,290,645
)
 
$
3,751,997

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Accounts payable
$
8,208

 
$
55,043

 
$

 
$
63,251

Intercompany payables

 
961,964

 
(961,964
)
 

Accrued expenses and other liabilities
54,631

 
223,386

 

 
278,017

Unsecured revolving credit facility
150,000

 

 

 
150,000

Senior notes
1,467,861

 

 

 
1,467,861

Total Liabilities
1,680,700

 
1,240,393

 
(961,964
)
 
1,959,129

 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
Total stockholders’ equity
1,777,954

 
1,328,681

 
(1,328,681
)
 
1,777,954

Noncontrolling interests

 
14,914

 

 
14,914

Total Equity
1,777,954

 
1,343,595

 
(1,328,681
)
 
1,792,868

Total Liabilities and Equity
$
3,458,654

 
$
2,583,988

 
$
(2,290,645
)
 
$
3,751,997



Condensed Consolidating Balance Sheet (in thousands):
 
 
December 31, 2016
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
141,568

 
$
67,089

 
$

 
$
208,657

Receivables
26,692

 
55,808

 

 
82,500

Intercompany receivables
775,321

 

 
(775,321
)
 

Real estate inventories
868,088

 
2,042,539

 

 
2,910,627

Investments in unconsolidated entities

 
17,546

 

 
17,546

Goodwill and other intangible assets, net
156,604

 
4,891

 

 
161,495

Investments in subsidiaries
1,285,295

 

 
(1,285,295
)
 

Deferred tax assets, net
15,644

 
107,579

 

 
123,223

Other assets
11,401

 
49,191

 

 
60,592

Total Assets
$
3,280,613

 
$
2,344,643

 
$
(2,060,616
)
 
$
3,564,640

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Accounts payable
$
20,637

 
$
49,615

 
$

 
$
70,252

Intercompany payables

 
775,321

 
(775,321
)
 

Accrued expenses and other liabilities
48,496

 
215,349

 

 
263,845

Unsecured revolving credit facility
200,000

 

 

 
200,000

Seller financed loans
13,726

 

 

 
13,726

Senior notes
1,168,307

 

 

 
1,168,307

Total Liabilities
1,451,166

 
1,040,285

 
(775,321
)
 
1,716,130

 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
 
Total stockholders’ equity
1,829,447

 
1,285,295

 
(1,285,295
)
 
1,829,447

Noncontrolling interests

 
19,063

 

 
19,063

Total Equity
1,829,447

 
1,304,358

 
(1,285,295
)
 
1,848,510

Total Liabilities and Equity
$
3,280,613

 
$
2,344,643

 
$
(2,060,616
)
 
$
3,564,640







Condensed Consolidating Statement of Operations (in thousands):
 
 
Three Months Ended June 30, 2017
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:
 
 
 
 
 
 
 
Home sales revenue
$
154,212

 
$
414,604

 
$

 
$
568,816

Land and lot sales revenue

 
865

 

 
865

Other operations revenue

 
600

 

 
600

Total revenues
154,212

 
416,069

 

 
570,281

Cost of home sales
132,859

 
321,382

 

 
454,241

Cost of land and lot sales

 
644

 

 
644

Other operations expense

 
591

 

 
591

Sales and marketing
6,966

 
25,364

 

 
32,330

General and administrative
16,304

 
17,384

 

 
33,688

Homebuilding (loss) income from operations
(1,917
)
 
50,704

 

 
48,787

Equity in income of unconsolidated entities

 
1,508

 

 
1,508

Other income, net
9

 
35

 

 
44

Homebuilding (loss) income before income taxes
(1,908
)
 
52,247

 

 
50,339

Financial Services:
 
 
 
 
 
 
 
Revenues

 
345

 

 
345

Expenses

 
77

 

 
77

Equity in income of unconsolidated entities

 
1,294

 

 
1,294

Financial services income before income taxes

 
1,562

 

 
1,562

(Loss) income before income taxes
(1,908
)
 
53,809

 

 
51,901

Equity of net income of subsidiaries
34,415

 

 
(34,415
)
 

Benefit (provision) for income taxes
207

 
(19,305
)
 

 
(19,098
)
Net income
32,714

 
34,504

 
(34,415
)
 
32,803

Net income attributable to noncontrolling interests

 
(89
)
 

 
(89
)
Net income available to common stockholders
$
32,714

 
$
34,415

 
$
(34,415
)
 
$
32,714




 
Condensed Consolidating Statement of Operations (in thousands):
 
 
Three Months Ended June 30, 2016
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:
 
 
 
 
 
 
 
Home sales revenue
$
152,827

 
$
404,098

 
$

 
$
556,925

Land and lot sales revenue

 
67,314

 

 
67,314

Other operations revenue

 
604

 

 
604

Total revenues
152,827

 
472,016

 

 
624,843

Cost of home sales
128,905

 
303,833

 

 
432,738

Cost of land and lot sales

 
14,460

 

 
14,460

Other operations expense

 
583

 

 
583

Sales and marketing
7,021

 
25,427

 

 
32,448

General and administrative
14,580

 
15,904

 

 
30,484

Homebuilding income from operations
2,321

 
111,809

 

 
114,130

Equity in income of unconsolidated entities

 
215

 

 
215

Other income, net
145

 
6

 

 
151

Homebuilding income before income taxes
2,466

 
112,030

 

 
114,496

Financial Services:
 
 
 
 
 
 
 
Revenues

 
379

 

 
379

Expenses

 
53

 

 
53

Equity in income of unconsolidated entities

 
1,284

 

 
1,284

Financial services income before income taxes

 
1,610

 

 
1,610

Income before income taxes
2,466

 
113,640

 

 
116,106

Equity of net income of subsidiaries
73,154

 

 
(73,154
)
 

Provision for income taxes
(1,694
)
 
(40,219
)
 

 
(41,913
)
Net income
73,926

 
73,421

 
(73,154
)
 
74,193

Net income attributable to noncontrolling interests

 
(267
)
 

 
(267
)
Net income available to common stockholders
$
73,926

 
$
73,154

 
$
(73,154
)
 
$
73,926














Condensed Consolidating Statement of Operations (in thousands):
 
Six Months Ended June 30, 2017
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:
 
 
 
 
 
 
 
Home sales revenue
$
285,049

 
$
675,771

 
$

 
$
960,820

Land and lot sales revenue

 
1,443

 

 
1,443

Other operations revenue

 
1,168

 

 
1,168

Total revenues
285,049

 
678,382

 

 
963,431

Cost of home sales
245,117

 
527,528

 

 
772,645

Cost of land and lot sales

 
1,298

 

 
1,298

Other operations expense

 
1,151

 

 
1,151

Sales and marketing
13,449

 
45,581

 

 
59,030

General and administrative
33,553

 
34,784

 

 
68,337

Homebuilding income from operations
(7,070
)
 
68,040

 

 
60,970

Equity in income of unconsolidated entities

 
1,646

 

 
1,646

Other income, net
18

 
103

 

 
121

Homebuilding (loss) income before income taxes
(7,052
)
 
69,789

 

 
62,737

Financial Services:
 
 
 
 
 
 
 
Revenues

 
586

 

 
586

Expenses

 
151

 

 
151

Equity in income of unconsolidated entities

 
1,560

 

 
1,560

Financial services income before income taxes

 
1,995

 

 
1,995

(Loss) income before income taxes
(7,052
)
 
71,784

 

 
64,732

Equity of net income of subsidiaries
43,452

 

 
(43,452
)
 

Benefit (provision) for income taxes
4,507

 
(28,219
)
 
 
 
(23,712
)
Net income
40,907

 
43,565

 
(43,452
)
 
41,020

Net income attributable to noncontrolling interests

 
(113
)
 

 
(113
)
Net income available to common stockholders
$
40,907

 
$
43,452

 
$
(43,452
)
 
$
40,907















Condensed Consolidating Statement of Operations (in thousands):
 
Six Months Ended June 30, 2016
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Homebuilding:
 
 
 
 
 
 
 
Home sales revenue
$
284,784

 
$
695,196

 
$

 
$
979,980

Land and lot sales revenue

 
67,669

 

 
67,669

Other operations revenue

 
1,184

 

 
1,184

Total revenues
284,784

 
764,049

 

 
1,048,833

Cost of home sales
239,357

 
517,880

 

 
757,237

Cost of land and lot sales

 
15,239

 

 
15,239

Other operations expense

 
1,149

 

 
1,149

Sales and marketing
13,085

 
45,684

 

 
58,769

General and administrative
27,792

 
31,223

 

 
59,015

Homebuilding income from operations
4,550

 
152,874

 

 
157,424

Equity in income of unconsolidated entities

 
201

 

 
201

Other income (loss), net
502

 
(236
)
 

 
266

Homebuilding income before income taxes
5,052

 
152,839

 

 
157,891

Financial Services:
 
 
 
 
 
 
 
Revenues

 
527

 

 
527

Expenses

 
111

 

 
111

Equity in income of unconsolidated entities

 
1,999

 

 
1,999

Financial services income before income taxes

 
2,415

 

 
2,415

Income before income taxes
5,052

 
155,254

 

 
160,306

Equity of net income of subsidiaries
100,385

 

 
(100,385
)
 

Provision for income taxes
(2,961
)
 
(54,442
)
 

 
(57,403
)
Net income
102,476

 
100,812

 
(100,385
)
 
102,903

Net income attributable to noncontrolling interests

 
(427
)
 

 
(427
)
Net income available to common stockholders
$
102,476

 
$
100,385

 
$
(100,385
)
 
$
102,476















Condensed Consolidating Statement of Cash Flows (in thousands):
 
 
Six Months Ended June 30, 2017
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Cash flows from operating activities
 
 
 
 
 
 
 
Net cash used in operating activities
$
(38,171
)
 
$
(182,529
)
 
$

 
$
(220,700
)
Cash flows from investing activities:
 
 
 
 
 
 
 
Purchases of property and equipment
(1,232
)
 
(561
)
 

 
(1,793
)
Proceeds from sale of property and equipment

 
6

 

 
6

Investments in unconsolidated entities

 
(462
)
 

 
(462
)
Intercompany
(184,084
)
 

 
184,084

 

Net cash (used in) provided by investing activities
(185,316
)
 
(1,017
)
 
184,084

 
(2,249
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Borrowings from debt
450,000

 

 

 
450,000

Repayment of debt
(213,726
)
 

 

 
(213,726
)
Debt issuance costs
(5,906
)
 

 

 
(5,906
)
Distributions to noncontrolling interests

 
(987
)
 

 
(987
)
Proceeds from issuance of common stock under
   share-based awards
2,449

 

 

 
2,449

Minimum tax withholding paid on behalf of employees for
   restricted stock units
(2,896
)
 

 

 
(2,896
)
Share repurchases
(99,697
)
 

 

 
(99,697
)
Intercompany

 
184,084

 
(184,084
)
 

Net cash provided by (used in) financing activities
130,224

 
183,097

 
(184,084
)
 
129,237

Net decrease in cash and cash equivalents
(93,263
)
 
(449
)
 

 
(93,712
)
Cash and cash equivalents - beginning of period
141,568

 
67,089

 

 
208,657

Cash and cash equivalents - end of period
$
48,305

 
$
66,640

 
$

 
$
114,945




Condensed Consolidating Statement of Cash Flows (in thousands):
 
 
Six Months Ended June 30, 2016
 
Issuer
 
Guarantor
Subsidiaries
 
Consolidating
Adjustments
 
Consolidated
TRI Pointe
Group, Inc.
Cash flows from operating activities
 
 
 
 
 
 
 
Net cash used in operating activities
$
(149,745
)
 
$
(36,451
)
 
$

 
$
(186,196
)
Cash flows from investing activities:
 
 
 
 
 
 
 
Purchases of property and equipment
(372
)
 
(751
)
 

 
(1,123
)
Investments in unconsolidated entities

 
(32
)
 

 
(32
)
Distributions from unconsolidated entities

 

 
 
 

Intercompany
(39,469
)
 

 
39,469

 

Net cash (used in) provided by investing activities
(39,841
)
 
(783
)
 
39,469

 
(1,155
)
Cash flows from financing activities:
 
 
 
 
 
 
 
Borrowings from notes payable
392,758

 

 

 
392,758

Repayment of notes payable
(276,426
)
 
(400
)
 

 
(276,826
)
Debt issuance costs
(5,110
)
 

 

 
(5,110
)
Net repayments of debt held by variable interest entities

 
(2,297
)
 

 
(2,297
)
Net proceeds of debt held by variable interest entities

 

 

 

Contributions from noncontrolling interests

 
1,810

 

 
1,810

Distributions to noncontrolling interests

 
(3,921
)
 

 
(3,921
)
Proceeds from issuance of common stock under
   share-based awards
18

 

 

 
18

Excess tax benefits of share-based awards

 

 

 

Minimum tax withholding paid on behalf of employees for restricted stock units
(1,359
)
 

 

 
(1,359
)
Share repurchases
(14,698
)
 

 

 
(14,698
)
Intercompany

 
39,469

 
(39,469
)
 

Net cash provided by (used in) financing activities
95,183

 
34,661

 
(39,469
)
 
90,375

Net decrease in cash and cash equivalents
(94,403
)
 
(2,573
)
 

 
(96,976
)
Cash and cash equivalents - beginning of period
147,771

 
66,714

 

 
214,485

Cash and cash equivalents - end of period
$
53,368

 
$
64,141

 
$

 
$
117,509