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What changed in Tri Pointe Homes, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Tri Pointe Homes, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+312 added−265 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-21)

Top changes in Tri Pointe Homes, Inc.'s 2025 10-K

312 paragraphs added · 265 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+23 added−8 removed84 unchanged
Biggest changeOur board of directors considers 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 ability of particular assets, and our company as a whole, to generate cash flow to cover the expected debt service. - 10 - We intend to finance future acquisitions and developments with the most advantageous source of capital available to us at the time of the transaction, which may include a combination of common and preferred equity, secured and unsecured corporate-level debt, property-level debt and mortgage financing and other public, private or bank debt.
Biggest changeOur board of directors considers 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 ability of particular assets, and our company as a whole, to generate cash flow to cover the expected debt service.
Further, we expect that as concerns about climate change and other environmental issues continue to grow, homebuilders will be required to comply with new and increasingly stringent laws and regulations, including the climate-related disclosure law enacted by the State of California and any disclosure requirements that may be adopted by the Securities and Exchange Commission (“SEC”) and/or other states, which we anticipate will likewise result in additional compliance costs to us and our suppliers.
Further, we expect that as concerns about climate change and other environmental issues continue to grow, homebuilders may be required to comply with new and increasingly stringent laws and regulations, including the climate-related disclosure law enacted by the State of California and any disclosure requirements that may be adopted by the Securities and Exchange Commission (“SEC”) and/or other states, which we anticipate will likewise result in additional compliance costs to us and our suppliers.
In limited instances, such as when we acquire land from a master developer that is part of a larger project, the seller may have repurchase rights entitling it to repurchase the land from us under circumstances when we do - 7 - not develop the land by an outside deadline (unless the delay is caused by certain circumstances outside our control), or when we seek to sell the land directly to a third party or indirectly through a change in control of our company.
In limited instances, such as when we acquire land from a master developer that is part of a larger project, the seller may have repurchase rights entitling it to repurchase the land from us under circumstances when we do not develop the land by an outside deadline (unless the delay is caused by certain circumstances outside our control), or when we seek to sell the land directly to a third party or indirectly through a change in control of our company.
The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this annual report on Form 10-K. In addition, the SEC website at www.sec.gov contains reports, proxy and information statements, and other information we file with, or furnish to, the SEC. - 13 -
The information contained in, or that can be accessed through, our website is not incorporated by reference and is not a part of this annual report on Form 10-K. In addition, the SEC website at www.sec.gov contains reports, proxy and information statements, and other information we file with, or furnish to, the SEC.
Additionally, we design our short- and long-term incentive programs to align individual incentives and rewards with our mission and strategies, to motivate our employees to achieve top performance in the industry and to attract and retain high-performing talent.
Additionally, we design our short- and long-term incentive programs to align individual incentives - 15 - and rewards with our mission and strategies, to motivate our employees to achieve top performance in the industry and to attract and retain high-performing talent.
We expect all of our backlog at December 31, 2024 to be converted to deliveries and revenues during 2025, net of cancellations. For information concerning backlog units, the dollar value and average sales price by segment, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this annual report on Form 10-K.
We expect all of our backlog at December 31, 2025 to be converted to deliveries and revenues during 2026, net of cancellations. For information concerning backlog units, the dollar value and average sales price by segment, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this annual report on Form 10-K.
Additionally, i n September 2023, we announced our expansion into the greater Salt Lake City region with the launch of a new division in Utah, followed by our expansion into the Orlando and Coastal Carolinas regions in early 2024. These markets are generally characterized by high job growth and increasing populations, which typically create strong demand for new housing.
Additionally, in September 2023, we announced our expansion into the greater Salt Lake City region with the launch of a new division in Utah, followed by our expansion into the Orlando and Coastal Carolinas regions in early 2024. These markets are generally characterized by high job growth and increasing populations, which typically create strong demand for new housing.
Our Financing Stra tegy We intend to employ debt and/or equity as part of our ongoing financing strategy, coupled with redeployment of cash flows from continuing operations, to provide us with the financial flexibility to access capital on the best terms available.
Our Financing Strategy We intend to employ debt and/or equity as part of our ongoing financing strategy, coupled with redeployment of cash flows from continuing operations, to provide us with the financial flexibility to access capital on the best terms available.
In furtherance of our efforts to maintain a healthy workplace culture, we measure - 12 - employee engagement and satisfaction by conducting team member engagement surveys to ensure that our employees have an opportunity to provide meaningful feedback on their experiences. We also regularly assess and track team member retention and engagement to generate actions plans for continued improvement.
In furtherance of our efforts to maintain a healthy workplace culture, we measure employee engagement and satisfaction by conducting team member engagement surveys to ensure that our employees have an opportunity to provide meaningful feedback on their experiences. We also regularly assess and track team member retention and engagement to generate action plans for continued improvement.
For purposes of this annual report on Form 10-K, the results of our homebuilding operations are organized into the three reportable segments of which our operations consisted during the year ended December 31, 2024: West Region: Arizona, California, Nevada and Washington Central Region: Colorado, Texas and Utah East Region: District of Columbia, Florida, Maryland, North Carolina, South Carolina and Virginia Our growth strategy is to capitalize on high demand in selected “core” markets with favorable population and employment growth as a result of proximity to job centers or primary transportation corridors.
For p urposes of this annual report on Form 10-K, the results of our homebuilding operations are organized into the three reportable segments of which our operations consisted during the year ended December 31, 2025: West Region: Arizona, California, Nevada and Washington Central Region: Colorado, Texas and Utah East Region: District of Columbia, Florida, Maryland, North Carolina, South Carolina and Virginia Our growth strategy is to capitalize on high demand in selected “core” markets with favorable population and employment growth as a result of proximity to job centers or primary transportation corridors.
We m ake available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after being filed with, or furnished to, the SEC.
We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after being filed with, or furnished to, the SEC.
Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. We also compete for sales with individual res ales of existing homes and with available rental housing. Human Capital We are a people-first company that believes in the importance of cultivating a respectful and collaborative environment.
Many of these competitors also have longstanding relationships with subcontractors and suppliers in the markets in which we operate. We also compete for sales with individual resales of existing homes and with available rental housing. Human Capital We are a people-first company that believes in the importance of cultivating a respectful and collaborative environment.
Although none of our employees are covered by collective bargaining agreements, certain of the subcontractors engaged by us are represented by labor unions or are subject to collective bargaining arrangements. We believe that our relations with our employees and trade partners are good. Access to Information Our internet website is ww w.tripointehomes.com .
Although none of our employees are covered by collective bargaining agreements, certain of the subcontractors engaged by us are represented by labor unions or are subject to collective bargaining arrangements. We believe that our relations with our employees and trade partners are good. Access to Information Our internet website is www.tripointehomes.com .
Therefore, our operating results in any given quarter will fluctuate compared to prior periods based on these factors. Bac klog Backlog units reflects 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.
Therefore, our operating results in any given quarter will fluctuate compared to prior periods based on these factors. Backlog Backlog units reflects the number of homes, net of actual cancellations experienced dur ing the period, for which we have entered into a sales contract with a homebuyer but for which we have not yet delivered the home.
The following table presents certain information with respect to our lots owned or controlled as of December 31, 2024.
The following table presents certain information with respect to our lots owned or controlled as of December 31, 2025.
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. The dollar value of backlog was approximately $1.2 billion and $1.6 billion as of December 31, 2024 and 2023, respectively.
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. The dollar value of backlog was approximately $670.1 million and $1.2 billion as of December 31, 2025 and 2024, respectively.
We design our total rewards (compensation and benefit programs) to offer our employees a comprehensive and compelling value proposition that includes customized training, learning and development programs, tuition reimbursement, paid parental and military leave benefits, paid time off to perform community service, paid adoption assistance and other programs designed to facilitate health and wellness.
We design our total rewards (compensation and benefit programs) to offer our employees a comprehensive and compelling value proposition that includes customized training, learning and development programs, tuition reimbursement, paid parental and military leave benefits, paid time off to perform community service, fertility and family forming benefits, and other programs designed to facilitate health and wellness.
As of December 31, 2024, we had no outstanding debt related to our unsecured revolving credit facility (the “Revolving Facility”) and $250 million in outstanding debt related to a term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”).
As of December 31, 2025, we had no outstanding debt related to our unsecured revolving credit facility (the “Revolving Facility”) and $450 million in outstanding debt related to a term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”).
As a result, we build across a variety of base sales price points, ranging from approximately $230,000 to $4.3 million, and home sizes, ranging from approximately 1,190 to 5,200 square feet.
As a result, we build across a variety of base sales price points, ranging from approximately $190,000 to $3.2 million, and home sizes, ranging from approximately 1,240 to 5,300 square feet.
Further, due to shortages of components, such as electronic chips that are commonly used in appliances and other building materials, as well as some lingering supply chain disruptions associated with the COVID-19 pandemic, shipping delays, factory downtime, and other factors, we have experienced and may continue to experience delays in our supply chain.
Further, due to shortages of components, such as electronic chips that are commonly used in appliances and other building materials, as well as shipping delays, factory downtime, and other factors, we have experienced and may continue to experience delays in our supply chain.
Our strict operating discipline and attention to controls, including financial accountability at the project management level, is a key part of our strategy to maximize returns while minimizing risk.
Strong Operational Discipline and Controls Our management teams pursue a hands-on approach. Our strict operating discipline and attention to controls, including financial accountability at the project management level, is a key part of our strategy to maximize returns while minimizing risk.
Segments The Company’s operations are organized in two principal businesses: homebuilding and financial services. In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply.
In accordance with ASC Topic 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross profits, production - 13 - processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply.
Warranty insurance receivables are recorded in receivables on our consolidated balance sheet. - 9 - 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 and comparable self-insured retentions, 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, that claims will not exceed our insurance coverage limits, 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 or design professionals.
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 and comparable self-insured retentions, 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, that claims will not exceed our insurance coverage limits, 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 or design professionals. - 12 - Seasonality We have experienced seasonal variations in our quarterly operating results and capital requirements.
Notwithstanding our efforts to protect against incidents, workplace accidents have occurred and may occur in the future. As of December 31, 2024, we had 1,750 employees, 747 of whom were executive, management and administrative personnel, 449 of whom were sales and marketing personnel and 554 of whom were involved in field construction.
Notwithstanding our efforts to protect against incidents, workplace accidents have occurred and may occur in the future. As of December 31, 2025, we had 1,579 employees, 696 of whom were executive, management and administrative personnel, 413 of whom were sales and marketing personnel and 470 of whom were involved in field construction.
We believe they represent attractive homebuilding markets with opportunities for long-term growth and that we have strong land positions strategically located within these markets. Moreover, our management teams have deep, local market knowledge of the homebuilding and development industries.
We believe they represent attractive homebuilding markets with opportunities for long-term growth and that we have strong land positions strategically located within these markets. Moreover, our management teams have deep, local market knowledge of the homebuilding and development industries. We believe this experience and strong relationships with local market participants enable us to source, acquire and entitle land efficiently.
Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding operating and reporting segments: West region : Arizona, California, Nevada and Washington Central region : Colorado, Texas and Utah East region : District of Columbia, Florida, Maryland, North Carolina, South Carolina and Virginia In September 2023, we announced our expansion into the greater Salt Lake City region.
Based upon these factors and in consideration of the geographical layout of our homebuilding markets, we have identified three homebuilding operating and reporting segments: West region : Arizona, California, Nevada and Washington Central region : Colorado, Texas and Utah East region : District of Columbia, Florida, Maryland, North Carolina, South Carolina and Virginia In April 2024, we announced our expansion into the Coastal Carolinas region, which includes parts of South Carolina and Georgia.
Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for related damages, including for bodily injury, and for investigation and clean-up costs incurred by such parties in connection with the contamination.
In addition, home deliveries in California may be delayed or prevented due to governmental responses to drought conditions, even when we have obtained water rights for those projects. - 14 - Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and clean up hazardous or toxic substances or petroleum product releases, and may be held liable to a governmental entity or to third parties for related damages, including for bodily injury, and for investigation and clean-up costs incurred by such parties in connection with the contamination.
Since then, we have grown from a Southern California fee homebuilder into a regionally-focused national homebuilder engaged in the design, construction and sale of innovative single-family attached and detached homes in 17 markets across twelve states and the District of Columbia. In late 2023, we announced our expansion into the greater Salt Lake City region.
Since then, we have grown from a Southern California fee homebuilder into a regionally-focused national homebuilder engaged in the design, construction and sale of innovative single-family attached and detached homes in 17 markets across twelve states and the District of Columbia. In early 2024, we announced our expansions into the Orlando and Coastal Carolinas regions.
As of December 31, 2024, our operations consisted of 145 active selling communities and 36,490 lots owned or controlled. See “Lots Owned or Controlled” below.
As of December 31, 2025, our operations consisted of 156 active selling communities and 32,219 lots owned or controlled. See “Lots Owned or Controlled” below.
Lots Owned or Controlled As of December 31, 2024, we owned or controlled, pursuant to land option contracts or purchase contracts, an aggregate of 36,490 lots, comprised of 46% lots owned and 54% lots controlled. We refer to lots that are under land option contracts as “controlled.” See “Acquisition Process” below.
See “Our Financing Strategy” below. - 9 - Lots Owned or Controlled As of December 31, 2025, we owned or controlled, pursuant to land option contracts or purchase contracts, an aggregate of 32,219 lots, comprised of 50% lots owned and 50% lots controlled. We refer to lots that are under land option contracts as “controlled.” See “Acquisition Process” below.
Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and both title examinations and escrow services for our homebuyers in Arizona, Colorado, 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.
Tri Pointe Assurance provides title examinations for our homebuyers in the Carolinas and both title examinations and escrow services for our homebuyers in Arizona, Colorado, the District of Columbia, Maryland, Nevada, Texas, Washington and Virginia.
As of December 31, 2024, we had $694.4 million available under the Credit Facility after considering the borrowing base provisions and outstanding letters of credit, as well as $970.0 million in cash and cash equivalents. As of December 31, 2024, we had $646.5 million of outstanding senior notes.
As of December 31, 2025, we had $798.1 million available under the Credit Facility after considering the borrowing base provisions and outstanding letters of credit, as well as $982.8 million in cash and cash equivalents. As of December 31, 2025, we had $647.6 million of outstanding senior notes.
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.
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.
Our Community Development, Construction and Sales and Marketing Process Community Development In certain of our markets, we typically develop community phases based upon projected sales, and we construct homes in each phase whether or not they have been pre-sold.
In some cases, however, we may be contractually obligated to complete development work even if we terminate the option to procure land or lots. - 10 - Our Community Development, Construction and Sales and Marketing Process Community Development In certain of our markets, we typically develop community phases based upon projected sales, and we construct homes in each phase whether or not they have been pre-sold.
For the years ended December 31, 2024 and 2023, we delivered 6,460 and 5,274 homes, respectively, and the average sales price of our new homes delivered was approximately $679,000 and $693,000, respectively.
For the years ended December 31, 2025 and 2024, we delivered 4,947 and 6,460 homes, respectively, and the average sales price of our new homes delivered was approximately $680,000 and $679,000, respectively. Announcement of Acquisition by Sumitomo Forestry Co., Ltd.
In addition, we devote significant resources to the research and design of our homes to better meet the needs of our homebuyers. Through our LivingSmart® platform, we provide homes that we believe are earth-friendly, enhance homeowners’ comfort, promote a healthier lifestyle and deliver tangible operating cost savings versus less efficient resale homes.
Through our LivingSmart® platform, we provide homes that we believe are earth-friendly, enhance homeowners’ comfort, promote a healthier lifestyle and deliver tangible operating cost savings versus less efficient resale homes. Collectively, we believe these steps enhance the selling process, lead to a more satisfied homeowner and increase the number of homebuyers referred to our communities.
While our primary growth strategy has focused on increasing our market position in our existing markets, we intend to continue, on an opportunistic basis, to explore expansion into other markets through organic growth and/or acquisition.
While our primary growth strategy has focused on increasing our market position in our existing markets, we intend to continue, on an opportunistic basis, to explore expansion into other markets through organic growth and/or acquisition. - 8 - Provide Superior Design and Homeowner Experience and Service We consider ourselves a “progressive” homebuilder driven by an exemplary homeowner experience, cutting-edge product development and exceptional execution.
Our financial services operation (“Tri Pointe Solutions”) is comprised of mortgage financing operations (“Tri Pointe Connect”), our title and escrow services operations (“Tri Pointe Assurance”), and our property and casualty insurance agency operations (“Tri Pointe Advantage”).
Substantially all homebuyers utilize long-term mortgage financing to purchase a home and mortgage lenders will usually make loans only to qualified borrowers. Our financial services operation (“Tri Pointe Solutions”) is comprised of mortgage financing operations (“Tri Pointe Connect”), our title and escrow services operations (“Tri Pointe Assurance”), and our property and casualty insurance agency operations (“Tri Pointe Advantage”).
We typically sell homes using sales con tracts that include cash deposits by the purchasers. However, purchasers can generally cancel sales contracts and receive refunds of cash deposits if they are unable to sell their existing home or if they fail to qualify for financing.
However, purchasers can generally cancel sales contracts and receive refunds of cash deposits if they are unable to sell their existing home or if they fail to qualify for financing. Although cancellations can delay the sale of our homes, they have historically not had a material impact on our operating results.
For example, a California law makes direct contractors liable for wages, fringe or other benefit payments or contributions, penalties or liquidated damages, and interest owed by a subcontractor that does not make these payments or contributions to its employees. - 11 - We are also subject to a variety of local, state, federal and other statutes, ordinances, rules and regulations concerning the environment.
Also, some states have enacted legislation that makes homebuilders responsible for violations of wage and other labor laws by their subcontractors. For example, a California law makes direct contractors liable for wages, fringe or other benefit payments or contributions, penalties or liquidated damages, and interest owed by a subcontractor that does not make these payments or contributions to its employees.
We have also made significant investments in systems and infrastructure to operate our business efficiently and to support the planned future growth of our company as a result of executing our expansion strategy. - 6 - Utilize Prudent Leverage Our ongoing financial strategy includes redeployment of cash flows from continuing operations and debt to provide us with the financial flexibility to access capital on the best terms available.
We have also made significant investments in systems and infrastructure to operate our business efficiently and to support the planned future growth of our company as a result of executing our expansion strategy.
These environmental laws include such areas as storm water and surface water management, soil, groundwater and wetlands protection, subsurface conditions and air quality protection and enhancement.
We are also subject to a variety of local, state, federal and other statutes, ordinances, rules and regulations concerning the environment. These environmental laws include such areas as storm water and surface water management, soil, groundwater and wetlands protection, subsurface conditions and air quality protection and enhancement.
We believe that each generation of home buying families has different ideas about the kind of home buying experience it wants. As a result, our selling process focuses on the home’s features, benefits, quality and design, in addition to the traditional metrics of price and square footage.
As a result, our selling process focuses on the home’s features, benefits, quality and design, in addition to the traditional metrics of price and square footage. In addition, we devote significant resources to the research and design of our homes to better meet the needs of our homebuyers.
In addition to model homes and our digital assets, homebuyers can gain an understanding of the various design features and options available to them using design studios. At each design studio, homebuyers can meet with a design consultant and are shown the included and upgraded selections available to them.
Structural changes in design from the model homes are not generally permitted, but homebuyers may select various other optional construction and design amenities. In addition to model homes and our digital assets, homebuyers can gain an understanding of the various design features and options available to them using design studios.
In early 2024, we further expanded into the Orlando and Coastal Carolinas regions. As of December 31, 2024, we had not commenced home sales in any of these new markets.
As of December 31, 2025, we had not yet commenced home sales in either Orlando or the Coastal Carolinas.
Sales personnel are licensed, if applicable, by the real estate bodies in their respective markets, are trained by us and generally have had prior experience selling new homes in the local market. Our personnel, along with our consultants and professional service providers, carefully design exteriors and interiors of each home to coincide with the lifestyles of potential homebuyers.
Sales representatives assist potential homebuyers by providing them with basic floor plans, price information, development and construction timetables, tours of model homes, and the selection of structural options. Sales personnel are licensed, if applicable, by the real estate bodies in their respective markets, are trained by us and generally have had prior experience selling new homes in the local market.
In addition, we have invested in online sales solutions, such as virtual tours, online design studios and interactive floorplans, to allow homebuyers to tour our homes virtually rather than physically. We believe that our model homes and digital assets play a significant role in helping homebuyers understand the efficiencies and value provided by each floor plan type.
We frequently build model homes at our projects and have them professionally decorated to display design features. In addition, we have invested in online sales solutions, such as virtual tours, online design studios and interactive floorplans, to allow homebuyers to tour our homes virtually rather than physically.
Provide Superior Design and Homeowner Experience and Service We consider ourselves a “progressive” homebuilder driven by an exemplary homeowner experience, cutting-edge product development and exceptional execution. Our core operating philosophy is to provide a positive, memorable experience to our homeowners through active engagement in the building process, tailoring our product to homeowners’ lifestyle needs and enhancing communication, knowledge and satisfaction.
Our core operating philosophy is to provide a positive, memorable experience to our homeowners through active engagement in the building process, tailoring our product to homeowners’ lifestyle needs and enhancing communication, knowledge and satisfaction. We believe that each generation of home buying families has different ideas about the kind of home buying experience it wants.
Cancellation rates are subject to a variety of factors beyond our control, such as adverse economic conditions and increases in mortgage interest rates. Our inventory of completed and unsold production homes was 464 and 263 homes as of December 31, 2024 and 2023, respectively.
The cancellation rate of homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 12% and 10% for the years ended December 31, 2025 and 2024, respectively. Cancellation rates are subject to a variety of factors beyond our control, such as adverse economic conditions and increases in mortgage interest rates.
Homebuyer Financing, Title, Escrow and Homeowners Insurance Services We seek to assist our homebuyers in obtaining financing by arranging with mortgage lenders to offer qualified homebuyers a variety of financing options. Substantially all homebu yers utilize long-term mortgage financing to purchase a home and mortgage lenders will usually make loans only to qualified borrowers.
Our inventory of completed and unsold production homes was 681 and 464 homes as of December 31, 2025 and 2024, respectively. - 11 - Homebuyer Financing, Title, Escrow and Homeowners Insurance Services We seek to assist our homebuyers in obtaining financing by arranging with mortgage lenders to offer qualified homebuyers a variety of financing options.
Lots Owned Lots Controlled (1) Lots Owned or Controlled West 9,475 4,949 14,424 Central 5,437 9,841 15,278 East 1,697 5,091 6,788 Total 16,609 19,881 36,490 ______________________________________________ (1) Lots controlled for Central and East include 5,816 and 14 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
Lots Owned Lots Controlled (1) Lots Owned or Controlled West 8,629 3,864 12,493 Central 5,188 8,017 13,205 East 2,137 4,384 6,521 Total 15,954 16,265 32,219 ______________________________________________ (1) Lots controlled for Central include 5,356 lots which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
In that regard, we expect to employ prudent levels of leverage to finance the acquisition and development of our lots and construction of our homes. See “Our Financing Strategy” below.
Utilize Prudent Leverage Our ongoing financial strategy includes redeployment of cash flows from continuing operations and debt to provide us with the financial flexibility to access capital on the best terms available. In that regard, we expect to employ prudent levels of leverage to finance the acquisition and development of our lots and construction of our homes.
As of December 31, 2024, we owned 446 model homes that were either completed or under construction, including 19 homes in backlog. We frequently build model homes at our projects and have them professionally decorated to display design features.
Our personnel, along with our consultants and professional service providers, carefully design exteriors and interiors of each home to coincide with the lifestyles of potential homebuyers. As of December 31, 2025, we owned 449 model homes that were either completed or under construction, including 10 homes in backlog.
Interior decorations vary among our models and a re selected based upon the lifestyles of our homebuyers. Structural changes in design from the model homes are not generally permitted, but homebuyers may select various other optional construction and design amenities.
We believe that our model homes and digital assets play a significant role in helping homebuyers understand the efficiencies and value provided by each floor plan type. Interior decorations vary among our models and are selected based upon the lifestyles of our homebuyers.
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We believe this experience and strong relationships with local market participants enable us to source, acquire and entitle land efficiently. - 5 - Strong Operational Discipline and Controls Our management teams pursue a hands-on approach.
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On February 13, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sumitomo Forestry Co., Ltd., a Japanese corporation ( kabushiki kaisha ) (“Sumitomo Forestry”), and Teton NewCo, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Sumitomo Forestry (“Merger Sub”).
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Collectively, we believe these steps enhance the selling process, lead to a more satisfied homeowner and increase the number of homebuyers referred to our communities.
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Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into Tri Pointe (the “Merger”), with Tri Pointe surviving the Merger as a wholly owned subsidiary of Sumitomo Forestry.
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Sales representatives assist potential homebuyers by providing them with basic floor plans, pri ce information, development and construction timetables, tours of model homes, and the selection of structural options.
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Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of our common stock will be converted into the right to receive $47.00 in cash, without interest (the “Merger Consideration”), except for shares that are (A)(1) held by us as treasury stock; (2) held directly by Sumitomo Forestry or Merger Sub; or (3) held by any direct or indirect wholly owned subsidiary of Sumitomo Forestry or Merger Sub, in each case, immediately prior to the Effective Time (“Owned Company Shares”), or (B) held by a holder who has not voted in favor of the adoption of the Merger Agreement, and has properly and validly demanded appraisal for such shares in accordance, and who complies in all respects, with Section 262 of the DGCL (“Dissenting Shares”).
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Although cancellations can delay the sale of our homes, they have historically not had a material - 8 - impact on our operating results. The cancellation rate of homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 10% for each of the years ended December 31, 2024 and 2023.
Added
Further, at the Effective Time, each Owned Company Share will automatically be cancelled and cease to exist, and no consideration or payment will be delivered in exchange therefor or in respect thereof, and each share held by any direct or indirect wholly owned subsidiary of the Company will, if any, be converted into such number of shares of common stock of the surviving corporation with an aggregate value immediately after the consummation of the Merger equal to the Merger Consideration.
Removed
Seasonality We have experienced seasonal variations in our quarterly operating results and capital requirements.
Added
Additionally, at the Effective Time, (i) each restricted stock unit (“RSU”) granted under the Tri Pointe Homes, Inc. 2022 Long-Term Incentive Plan (“2022 Plan”) granted prior to 2026 and each RSU held by one of our non-employee directors, in each case whether vested or unvested, that is outstanding as of immediately prior to the Effective Time will be fully vested, cancelled and automatically converted into the right to receive an amount in cash (without interest and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such RSU, multiplied by (B) the Merger Consideration; (ii) each RSU that is not subject to the preceding clause (i) above that is outstanding as of immediately prior to the Effective Time will be cancelled and automatically converted into and substituted with a cash award representing the right to receive, upon each applicable vesting date for such RSU (or if earlier, upon a severance-eligible termination of employment), and subject to the same time-vesting terms and conditions that applied to such - 6 - RSU (other than vesting terms providing for accelerated vesting in connection with the Merger), as in effect immediately prior to such conversion, an amount in cash (without interest and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such RSU that would have vested on such vesting date had such RSU remained outstanding through such vesting date, multiplied by (B) the Merger Consideration; and (iii) each performance stock unit (“PSU”) granted under the 2022 Plan, whether vested or unvested, that is outstanding as of immediately prior to the Effective Time will be fully vested, cancelled, and automatically converted into the right to receive an amount in cash (without interest, and subject to deduction for any required tax withholdings) equal to the product of (A) the aggregate number of shares of common stock subject to such PSU (at maximum performance) multiplied by (B) the Merger Consideration.
Removed
In early 2024, we further expanded into the Orlando and Coastal Carolinas regions. As of December 31, 2024, we had not commenced home sales in any of these new markets.
Added
At the Effective Time, all Dissenting Shares will be cancelled and cease to exist, and the holders of Dissenting Shares will only be entitled to the rights granted to them under Section 262 of the DGCL with respect to such Dissenting Shares.
Removed
Also, some states have enacted legislation that makes homebuilders responsible for violations of wage and other labor laws by their subcontractors.
Added
If the Merger is consummated, our common stock will be de-listed from The New York Stock Exchange and de-registered under the Exchange Act.
Removed
In addition, home deliveries in California may be delayed or prevented due to governmental responses to drought conditions, even when we have obtained water rights for those projects.
Added
The completion of the Merger is subject to customary closing conditions, including, but not limited to, the (i) approval of the holders of a majority of the outstanding shares of common stock entitled to vote on such matters to adopt the Merger Agreement; (ii) expiration or termination of any waiting period (and extensions thereof) applicable to the Transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), and the rules and regulations promulgated thereunder; (iii) absence of any law, order or injunction enacted or issued after the date of the Merger Agreement restraining, enjoining or otherwise prohibiting the Merger; and (iv) absence of certain events comprising a material adverse effect on the Company’s business following the date of the Merger Agreement.
Added
The obligations of Sumitomo Forestry and Merger Sub to consummate the Merger are not subject to any financing condition.
Added
From the execution of the Merger Agreement until the earlier to occur of the termination of the Merger Agreement and the Effective Time, we will be subject to customary “no-shop” restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide information to, and participate in discussions and negotiations with, third parties regarding any alternative acquisition proposals, subject to a customary “fiduciary out” provision that allows us, under certain specified circumstances, to provide information to, and participate or engage in discussions or negotiations with, third parties with respect to an acquisition proposal if our board of directors determines in good faith (after consultation with our independent financial advisor and outside legal counsel) that such alternative acquisition proposal constitutes a superior proposal or would reasonably be expected to result in a superior proposal, and the failure to take such actions would be inconsistent with our directors’ fiduciary duties pursuant to applicable law.
Added
The Merger Agreement contains certain termination rights for us, on the one hand, and Sumitomo Forestry and Merger Sub, on the other hand.
Added
Upon termination of the Merger Agreement under specified circumstances, including (i) the Company terminating the Merger Agreement to enter into an alternative acquisition agreement providing for a superior proposal; or (ii) Sumitomo Forestry terminating the Merger Agreement due to our board of directors’ change of its recommendation that stockholders adopt the Merger Agreement and approve the Transactions contemplated thereby, including the Merger, in each case pursuant to and in accordance with the “fiduciary out” provisions of the Merger Agreement, we will be required to pay Sumitomo Forestry a termination fee of $82,336,000.
Added
The termination fee will also be payable by us if the Merger Agreement is terminated under certain circumstances and prior to such termination (or at least two business days prior to any stockholder meeting we hold for the purpose of obtaining stockholder approval of the Transactions contemplated by the Merger Agreement, including the Merger, in the case of termination for the failure to receive the requisite stockholder approval), an acquisition proposal has been publicly announced and not publicly withdrawn or not otherwise publicly abandoned, and an acquisition proposal is consummated or we enter into a definitive agreement with respect to an acquisition proposal within one year of the termination.
Added
In addition to the foregoing termination rights, and subject to certain limitations, we or Sumitomo Forestry may terminate the Merger Agreement if the Merger is not consummated by August 13, 2026, subject to extension, absent written notice to the contrary by either Sumitomo Forestry or us, for an additional three months if necessary to obtain HSR approval or to resolve an injunction relating to other specified governmental consents.
Added
The Company also made customary representations and warranties in the Merger Agreement and agreed to customary covenants regarding the operation of our business prior to the consummation of the Merger.
Added
The Merger Agreement also provides that we, on the one hand, or Sumitomo Forestry and Merger Sub, on the other hand, may specifically enforce the obligations under the Merger Agreement, including the obligation to consummate the Merger if the conditions set forth in the Merger Agreement are satisfied.
Added
The parties to the Merger Agreement have also agreed to use their respective reasonable best efforts and take certain actions to obtain the requisite regulatory approvals for the Transactions. - 7 - The foregoing description of the Merger Agreement and the Transactions does not purport to be complete, and is subject, and qualified in its entirety by reference, to the full text of the Merger Agreement, which has been filed herewith as Exhibit 2.1 and is incorporated by reference herein.
Added
At each design studio, homebuyers can meet with a design consultant and are shown the included and upgraded selections available to them. We typically sell homes using sales contracts that include cash deposits by the purchasers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+37 added−8 removed273 unchanged
Biggest changeOur current financing arrangements contain, and the financing arrangements we may enter into in the future will likely contain, covenants affecting our ability to, among other things: • incur or guarantee additional indebtedness; • make certain investments; • reduce liquidity below certain levels; • pay dividends or make distributions on our capital stock; • sell assets, including capital stock of restricted subsidiaries; • agree to payment restrictions affecting our restricted subsidiaries; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • enter into transactions with our affiliates; • incur liens; • engage in sale-leaseback transactions; and - 29 - • designate any of our subsidiaries as unrestricted subsidiaries.
Biggest changeOur current financing arrangements contain, and the financing arrangements we may enter into in the future will likely contain, covenants affecting our ability to, among other things: • incur or guarantee additional indebtedness; • make certain investments; • reduce liquidity below certain levels; • pay dividends or make distributions on our capital stock; • sell assets, including capital stock of restricted subsidiaries; • agree to payment restrictions affecting our restricted subsidiaries; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • enter into transactions with our affiliates; • incur liens; • engage in sale-leaseback transactions; and • designate any of our subsidiaries as unrestricted subsidiaries. - 34 - If we fail to meet or satisfy any of these covenants in our debt agreements, we would be in default under these agreements, which could result in a cross-default under other debt agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their respective interests against existing collateral.
These changes can also cause us to take longer to build homes and make it more costly for us to do so or force us increase our selling incentives in order to sell homes. We may not be able to recover any of the increased costs by raising prices because of weak market conditions and increasing pricing pressure.
These changes can also cause us to take longer to build homes and make it more costly for us to do so or force us to increase our selling incentives in order to sell homes. We may not be able to recover any of the increased costs by raising prices because of weak market conditions and increasing pricing pressure.
The residential homebuilding and land development industry is cyclical and is substantially affected by adverse changes in general economic or business conditions that are outside of our control, including changes in: - 14 - • short- and long-term interest rates; • the availability and cost of financing for real estate industry participants, including financing for acquisitions, construction and permanent mortgages; • unanticipated increases in expenses, including, without limitation, insurance costs, labor and materials costs, development costs, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies; • enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, labor, employment, zoning, privacy, consumer protection, lender licensing, and tax laws; governmental fiscal policies; and the Americans with Disabilities Act of 1990; • consumer confidence generally and the confidence of potential homebuyers and others in the real estate industry in particular; • financial conditions of buyers and sellers of properties, particularly residential homes and land suitable for development of residential homes; • the ability of existing homeowners to sell their existing homes at prices that are acceptable to them; • the U.S. and global financial systems and credit markets, including stock market and credit market volatility; • private and federal mortgage financing programs and federal and state regulation of lending practices; • the availability and cost of construction, labor and materials; • federal and state income tax provisions, including provisions for the deduction of mortgage interest payments; the deduction of state and local tax, including real estate tax; and capital gain tax rates; • housing demand from population growth, household formation and demographic changes (including immigration levels and trends in urban and suburban migration); • the supply of available new or existing homes and other housing alternatives, such as condominiums, apartments and other residential rental property; • competition from other real estate investors with significant capital, including other real estate operating companies and developers and institutional investment funds; • employment levels and job and personal income growth and household debt-to-income levels; • the rate of inflation; • real estate taxes; and • the supply of, and demand for, developable land in our current and expected markets.
The residential homebuilding and land development industry is cyclical and is substantially affected by adverse changes in general economic or business conditions that are outside of our control, including changes in: • short- and long-term interest rates; • the availability and cost of financing for real estate industry participants, including financing for acquisitions, construction and permanent mortgages; • unanticipated increases in expenses, including, without limitation, insurance costs, labor and materials costs, development costs, real estate assessments and other taxes and costs of compliance with laws, regulations and governmental policies; • enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, labor, employment, zoning, privacy, consumer protection, lender licensing, and tax laws; governmental fiscal policies; and the Americans with Disabilities Act of 1990; • consumer confidence generally and the confidence of potential homebuyers and others in the real estate industry in particular; • financial conditions of buyers and sellers of properties, particularly residential homes and land suitable for development of residential homes; • the ability of existing homeowners to sell their existing homes at prices that are acceptable to them; • the U.S. and global financial systems and credit markets, including stock market and credit market volatility; • private and federal mortgage financing programs and federal and state regulation of lending practices; • the availability and cost of construction, labor and materials; - 19 - • federal and state income tax provisions, including provisions for the deduction of mortgage interest payments; the deduction of state and local tax, including real estate tax; and capital gain tax rates; • housing demand from population growth, household formation and demographic changes (including immigration levels and trends in urban and suburban migration); • the supply of available new or existing homes and other housing alternatives, such as condominiums, apartments and other residential rental property; • competition from other real estate investors with significant capital, including other real estate operating companies and developers and institutional investment funds; • employment levels and job and personal income growth and household debt-to-income levels; • the rate of inflation; • real estate taxes; and • the supply of, and demand for, developable land in our current and expected markets.
Our board of directors considers 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 such assets and the ability of the particular assets, and our company as a whole, to generate cash flow to cover the expected debt service. - 27 - Incurring substantial debt subjects us to many risks that, if realized, would materially and adversely affect our Financial Performance, including the risks that: • it may be more difficult for us to satisfy our obligations with respect to our debt or to our other creditors; • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt, which is likely to result in acceleration of our debt; • our debt may increase our vulnerability to adverse economic and industry conditions, including fluctuations in market interest rates, with no assurance that investment yields will increase with higher financing cost, particularly in the case of debt with a floating interest rate; • our debt may limit our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is limited; • we may be required to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations and capital expenditures, future investment opportunities or other purposes; • in the case of secured indebtedness, we could lose our ownership interests in our land parcels or other assets because defaults thereunder may result in foreclosure actions initiated by lenders; • our debt may limit our ability to buy back our common stock or pay cash dividends; • our debt may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby limiting our ability to compete with companies that are not as highly leveraged; and • the terms of any refinancing may not be as favorable as the terms of the debt being refinanced.
Our board of directors considers 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 such assets and the ability of the particular assets, and our company as a whole, to generate cash flow to cover the expected debt service. - 32 - Incurring substantial debt subjects us to many risks that, if realized, would materially and adversely affect our Financial Performance, including the risks that: • it may be more difficult for us to satisfy our obligations with respect to our debt or to our other creditors; • our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt, which is likely to result in acceleration of our debt; • our debt may increase our vulnerability to adverse economic and industry conditions, including fluctuations in market interest rates, with no assurance that investment yields will increase with higher financing cost, particularly in the case of debt with a floating interest rate; • our debt may limit our ability to obtain additional financing to fund capital expenditures and acquisitions, particularly when the availability of financing in the capital markets is limited; • we may be required to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations and capital expenditures, future investment opportunities or other purposes; • in the case of secured indebtedness, we could lose our ownership interests in our land parcels or other assets because defaults thereunder may result in foreclosure actions initiated by lenders; • our debt may limit our ability to buy back our common stock or pay cash dividends; • our debt may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby limiting our ability to compete with companies that are not as highly leveraged; and • the terms of any refinancing may not be as favorable as the terms of the debt being refinanced.
Tax law changes that increase the after-tax costs of owning a home could prevent potential customers from buying our homes and adversely affect our Financial Performance. Significant expenses associated with owning a home, including mortgage interest expenses and real estate taxes, were generally deductible expenses for an individual’s federal and, in some cases, state income taxes, subject to limitations.
Tax law changes that increase the after-tax costs of owning a home could prevent potential customers from buying our homes and adversely affect our Financial Performance. - 21 - Significant expenses associated with owning a home, including mortgage interest expenses and real estate taxes, were generally deductible expenses for an individual’s federal and, in some cases, state income taxes, subject to limitations.
Subject to certain exceptions, an interested stockholder is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock. This provision could prohibit or delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.
Subject to certain exceptions, an interested stockholder is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock. - 36 - This provision could prohibit or delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.
If skilled contractors and subcontractors are not available on a timely basis for a reasonable cost, or if contractors and subcontractors are not able to recruit sufficient numbers of skilled employees, our development and construction activities may suffer from delays and quality issues, which could lead to reduced levels of homebuyer satisfaction and materially and adversely affect our Financial Performance.
If skilled contractors and subcontractors are not available on a timely basis for a reasonable cost, or if - 23 - contractors and subcontractors are not able to recruit sufficient numbers of skilled employees, our development and construction activities may suffer from delays and quality issues, which could lead to reduced levels of homebuyer satisfaction and materially and adversely affect our Financial Performance.
We have substantial operations in Southern and Northern California that have historically experienced significant earthquake activity and seasonal wildfires. The incidence of large wildfires in California, such as the January 2025 wildfires that impacted the Los Angeles metropolitan area, has increased in recent years, attributed to wet and dry period fluctuations, climate change, and governmental policies.
We have substantial operations in Southern and Northern California that have historically experienced significant earthquake activity and seasonal wildfires. The incidence of large wildfires in California, such as the January 2025 wildfires that impacted the Los Angeles metropolitan area, has increased in recent years, attributed to wet and dry period fluctuations, - 22 - climate change, and governmental policies.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of its third-party partners or co-venturers.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our - 37 - expenses and prevent our officers and/or directors from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of its third-party partners or co-venturers.
Our ability to acquire land parcels for new projects may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning and other market conditions.
Our ability to acquire land parcels for new projects may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to - 18 - sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning and other market conditions.
If our potential homebuyers or the buyers of our homebuyers’ existing homes cannot obtain suitable financing, our Financial Performance could be materially and adversely affected. Our homebuyers may obtain mortgage financing for their home purchases from any lender of their choice.
If our potential homebuyers or the buyers of our homebuyers’ existing homes cannot obtain suitable financing, our Financial Performance could be materially and adversely affected. - 20 - Our homebuyers may obtain mortgage financing for their home purchases from any lender of their choice.
The U.S. housing markets experience dynamic demand and supply patterns from time to time due to volatile economic conditions, including increased amounts of home and land inventory that entered certain housing markets from foreclosure sales or short sale s.
The U.S. housing markets experience dynamic demand and supply patterns from time to time due to volatile economic conditions, including increased amounts of home and land inventory that entered certain housing markets from foreclosure sales or short sales.
Our access to additional third-party sources of financing will depend, in part, on: • general market conditions; • the market’s perception of our growth potential, including relative to other opportunities; - 28 - • with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed; • our corporate credit rating and ratings of our senior notes; • our current debt levels; • our current and expected future earnings; • our cash flow; • pending litigation and claims; and • the market price per share of our common stock.
Our access to additional third-party sources of financing will depend, in part, on: • general market conditions; • the market’s perception of our growth potential, including relative to other opportunities; - 33 - • with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed; • our corporate credit rating and ratings of our senior notes; • our current debt levels; • our current and expected future earnings; • our cash flow; • pending litigation and claims; and • the market price per share of our common stock.
Efforts that we make to resolve these issues or disputes could be deemed unsatisfactory by the affected homebuyers, and subsequent actions by these homebuyers could - 22 - materially and adversely affect our sales and reputation.
Efforts that we make to resolve these issues or disputes could be deemed unsatisfactory by the affected homebuyers, and subsequent actions by these homebuyers could materially and adversely affect our sales and reputation.
Furthermore, since WRECO self-insured a significant portion of its general liability exposure relating to its operations outside of California and Nevada prior to the merger, it is likely that most of these claims will not be covered by insurance. - 23 - There can be no assurance that any current or future developments undertaken by us will be free from defects once completed.
Furthermore, since WRECO self-insured a significant portion of its general liability exposure relating to its operations outside of California and Nevada prior to the merger, it is likely that most of these claims will not be covered by insurance. - 28 - There can be no assurance that any current or future developments undertaken by us will be free from defects once completed.
Non-U.S. holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock. - 33 - There is no assurance that the existence of a stock repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.
Non-U.S. holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock. - 38 - There is no assurance that the existence of a stock repurchase program will result in repurchases of our common stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.
Homebuyers’ ability to obtain financing largely depends on prevailing mortgage loan interest rates, the credit standards that mortgage lenders use and the availability of mortgage loan programs. In January 2025, the U.S. Federal Open Market Committee (“FOMC”) decided to maintain the current target range for federal funds.
Homebuyers’ ability to obtain financing largely depends on prevailing mortgage loan interest rates, the credit standards that mortgage lenders use and the availability of mortgage loan programs. In January 2026, the U.S. Federal Open Market Committee (“FOMC”) decided to maintain the current target range for federal funds.
In addition, we have experienced fluctuations in quarterly results of operations due to the number and characteristics of our active selling communities; the timing of new community openings; the timing of land and lot sales; an d the mix of product types, geographic locations and average selling prices of the homes delivered during the quarter.
In addition, we have experienced fluctuations in quarterly results of operations due to the number and characteristics of our active selling communities; the timing of new community openings; the timing of land and lot sales; and the mix of product types, geographic locations and average selling prices of the homes delivered during the quarter.
Home order cancellations can result from a number of factors, including declines or slow appreciation in the market value of homes, increases in the supply of homes available to be purchased, increased competition and use of sales incentiv es by competitors, higher mortgage interest rates, homebuyers’ inability to sell their existing homes, homebuyers’ inability to obtain suitable mortgage financing, including providing sufficient down payments, and adverse changes in local, regional or national economic conditions.
Home order cancellations can result from a number of factors, including declines or slow appreciation in the market value of homes, increases in the supply of homes available to be purchased, increased competition and use of sales incentives by competitors, higher mortgage interest rates, homebuyers’ inability to sell their existing homes, homebuyers’ inability to obtain suitable mortgage financing, including providing sufficient down payments, and adverse changes in local, regional or national economic conditions.
We cannot make any assurances that any available sources will be sufficient to fund Tri Pointe Connect’s mortgage lending activities and/or that Tri Pointe Connect will be able to obtain or renew its warehouse lines on commercially reasonable terms or at all.
We cannot make any assurances that any available sources will be sufficient to fund Tri Pointe Connect’s mortgage lending activities and/or that Tri Pointe Connect will be able to obtain new or renew its existing warehouse lines on commercially reasonable terms or at all.
For example, losses associated with landslides, earthquakes and other geologic events may not be insurable and other losses, such as those arising from terrorism, may not be economically insurable. A sizeable uninsured loss could materially and adversely affect our Financial Performance.
For example, losses associated with landslides, earthquakes and other geologic events may not be insurable and other losses, such as those arising from terrorism, may not be economically insurable. A sizable uninsured loss could materially and adversely affect our Financial Performance.
Any difficulty in obtaining sufficient capital for planned development expenditures could also cause project delays and any such delay could result in cost increases. Any of the foregoing factors could materially and adversely affect our Financial Performance. Tri Pointe Connect will finance its mortgage lending activities through cash on hand as well as the sale of mortgage loans to investors.
Any difficulty in obtaining sufficient capital for planned development expenditures could also cause project delays and any such delay could result in cost increases. Any of the foregoing factors could materially and adversely affect our Financial Performance. Tri Pointe Connect finances its mortgage lending activities through cash on hand as well as the sale of mortgage loans to investors.
If economic conditions become more uncertain, mortgage financing becomes less available or more expensive, or current homeowners find it difficult to sell their current homes, more homebuyers ma y cancel their purchase contracts. An increase in the level of home order cancellations could have a material and adverse impact on our Financial Performance.
If economic conditions become more uncertain, mortgage financing becomes less available or more expensive, or current homeowners find it difficult to sell their current homes, more homebuyers may cancel their purchase contracts. An increase in the level of home order cancellations could have a material and adverse impact on our Financial Performance.
Tri Pointe Connect depends materially on vendors that we do not control. - 26 - Tri Pointe Connect materially depends upon third-party vendors, including but not limited to consultants, services, platforms, and technologies, that we do not control.
Tri Pointe Connect depends materially on vendors that we do not control. - 31 - Tri Pointe Connect materially depends upon third-party vendors, including but not limited to consultants, services, platforms, and technologies, that we do not control.
For example, through the end of 2025, the annual deduction for real estate property taxes and state and local income or sales taxes has been limited to a combined amount of $10,000 ($5,000 in the case of a separate return filed by a married individual).
For example, through the end of 2025, the annual deduction for real estate property taxes and state and local income or sales taxes was limited to a combined amount of $10,000 ($5,000 in the case of a separate return filed by a married individual).
Further, due to elevated inflation rates from 2022 to 2024, we have experienced and may continue to experience increases in prevailing costs for skilled contractors and subcontractors.
Further, due to elevated inflation rates from 2022 to 2025, we have experienced and may continue to experience increases in prevailing costs for skilled contractors and subcontractors.
Acts of war, any outbreak or escalation of hostilities or geopolitical conflict (such as the ongoing conflicts between Russia and Ukraine and Israel and Hamas, respectively), acts of terrorism (including cyber-terrorism), civil unrest or public health emergencies, including outbreaks of contagious diseases, such as COVID-19 or other major epidemics or pandemics, have caused and may in the future cause disruption to the U.S. economy, or the local economies of the markets in which we operate, result in sanctions or export controls that could adversely impact our supply chain, cause shortages of building materials, disrupt utilities, increase costs associated with obtaining building materials, increase the price of gasoline and other fuels, result in building code changes that could increase costs of construction, affect job growth and consumer confidence, affect public health and public perception of health risk, or cause economic changes and/or social instability or distress that we cannot anticipate, all of which could reduce demand for our homes and materially and adversely impact our Financial Performance. - 25 - We are subject to litigation and claims that could materially and adversely affect us.
Acts of war, any outbreak or escalation of hostilities or geopolitical conflict, acts of terrorism (including cyber-terrorism), civil unrest or public health emergencies, including outbreaks of contagious diseases, such as COVID-19 or other major epidemics or pandemics, have caused and may in the future cause disruption to the U.S. economy, or the local economies of the markets in which we operate, result in sanctions or export controls that could adversely impact our supply chain, cause shortages of building materials, disrupt utilities, increase costs associated with obtaining building materials, increase the price of gasoline and other fuels, result in building code changes that could increase costs of construction, affect job growth and consumer confidence, affect public health and public perception of health risk, or cause economic changes and/or social instability or distress that we cannot anticipate, all of which could reduce demand for our homes and materially and adversely impact our Financial Performance. - 30 - We are subject to litigation and claims that could materially and adversely affect us.
Such investments may also have the potential risk of impasses on decisions, such - 32 - as a sale, because neither us nor the partner or co-venturer would have full control over the partnership or joint venture.
Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture.
In these circumstances, homebuyers may terminate their existing purchase contracts in order to negotiate for a lower price or because they cannot, or will not, complete the purchase. Our cancellation rate was 10% for each of the years ended December 31, 2024 and 2023. Cancellation rates may rise significantly in the future.
In these circumstances, homebuyers may terminate their existing purchase contracts in order to negotiate for a lower price or because they cannot, or will not, complete the purchase. Our cancellation rate was 12% and 10% the years ended December 31, 2025 and 2024, respectively. Cancellation rates may rise significantly in the future.
In addition, through the end of 2025, the deduction for mortgage interest will generally only be available with respect to acquisition indebtedness that does not exceed $750,000 ($375,000 in the case of a separate return filed by a married individual).
In addition, through the end of 2025, the deduction for mortgage interest was generally only available with respect to acquisition indebtedness that did not exceed $750,000 ($375,000 in the case of a separate return filed by a married individual).
A substantial portion of our access to capital is through the issuance of senior notes, of which we have $646.5 million outstanding, net of debt issuance costs, as of December 31, 2024. Among other things, we may rely on proceeds of debt issuances to pay the principal of existing senior notes when they mature.
A substantial portion of our access to capital is through the issuance of senior notes, of which we have $647.6 million outstanding, net of debt issuance costs, as of December 31, 2025. Among other things, we may rely on proceeds of debt issuances to pay the principal of existing senior notes when they mature.
These requirements are expected to impose significant additional compliance costs and/or burdens on us and our suppliers. We may be unable to develop our communities successfully or within expected timeframes.
Such requirements, if implemented, are expected to impose significant additional compliance costs and/or burdens on us and our suppliers. We may be unable to develop our communities successfully or within expected timeframes.
Specifically, our charter provides that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the person became an interested stockholder, unless: • prior to the time that person became an interested stockholder, our board of directors approved either the business combination or the transaction which resulted in the person becoming an interested stockholder; • upon consummation of the transaction which resulted in the person becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding certain shares; or • at or subsequent to the time the person became an interested stockholder, the business combination is approved by our board of directors and by the affirmative vote of at least 66 2 / 3 % of the outstanding voting stock which is not owned by the interested stockholder. - 31 - Generally, a business combination includes a merger, consolidation, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder.
Specifically, our charter provides that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the person became an interested stockholder, unless: • prior to the time that person became an interested stockholder, our board of directors approved either the business combination or the transaction which resulted in the person becoming an interested stockholder; • upon consummation of the transaction which resulted in the person becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding certain shares; or • at or subsequent to the time the person became an interested stockholder, the business combination is approved by our board of directors and by the affirmative vote of at least 66 2 / 3 % of the outstanding voting stock which is not owned by the interested stockholder.
During the year ended December 31, 2024, we had active selling communities in the states of Arizona, California, Colorado, Maryland, Nevada, North Carolina, South Carolina, Texas, Virginia and Washington, as well as the District of - 24 - Columbia.
During the year ended December 31, 2025, we had active selling communities in the states of Arizona, California, Colorado, Maryland, Nevada, North Carolina, South Carolina, Texas, Utah, Virginia and Washington, as well as the District of - 29 - Columbia.
For example, due to shortages of components, such as electronic chips that are commonly used in appliances and other building materials, as well as some lingering supply chain disruptions associated with the COVID-19 pandemic, shipping delays, factory downtime, and other factors, we have experienced and may continue to experience delays in our supply chain, including the ability to timely obtain the raw materials that we require to build our homes, as well as certain other construction materials.
For example, due to shortages of components, such as electronic chips that are commonly used in appliances and other building materials, as well as shipping delays, factory downtime, and other factors, we have experienced and may continue to experience delays in our supply chain, including the ability to timely obtain the raw materials that we require to build our homes, as well as certain other construction materials.
Further, there is a substantial possibility that substituting an alternate source of liquidity would increase mortgage interest rates, which would increase the buyers’ effective costs of the homes we sell, and therefore could reduce demand for our homes and have a material adverse effect on our Financial Performance. - 16 - Raw material shortages and price fluctuations could cause delays and increase our costs.
Further, there is a substantial possibility that substituting an alternate source of liquidity would increase mortgage interest rates, which would increase the buyers’ effective costs of the homes we sell, and therefore could reduce demand for our homes and have a material adverse effect on our Financial Performance.
We require raw materials to build our homes. The residential construction industry experiences serious raw material shortages from time to time, including shortages in supplies of insulation, drywall, cement, steel, lumber and other building materials.
Raw material shortages and price fluctuations could cause delays and increase our costs. We require raw materials to build our homes. The residential construction industry experiences serious raw material shortages from time to time, including shortages in supplies of insulation, drywall, cement, steel, lumber and other building materials.
Negative changes in the ratings of our senior notes could make it difficult for us to sell senior notes in the future and could result in more stringent covenants and higher interest rates with regard to new senior notes we issue.
Negative changes in the ratings of our senior notes could make it difficult for us to sell senior notes in the future and could result in more stringent covenants and higher interest rates with regard to new senior notes we issue. Our current financing arrangements contain, and our future financing arrangements likely will contain, restrictive covenants relating to our operations.
When homebuilding activity declines, skilled tradesmen may choose to leave the real estate industry to take jobs in other industries, which would result in shortages in the event that homebuilding activity later increases.
The residential construction industry experiences serious shortages of skilled labor from time to time. When homebuilding activity declines, skilled tradesmen may choose to leave the real estate industry to take jobs in other industries, which would result in shortages in the event that homebuilding activity later increases.
In addition, a California law makes direct contractors liable for wages, - 19 - fringe or other benefit payments or contributions, and interest owed by a subcontractor that does not make these payments or contributions to its employees. This liability could also extend to penalties and liquidated damages owed by a subcontractor.
In addition, a California law makes direct contractors liable for wages, fringe or other benefit payments or contributions, and interest owed by a subcontractor that does not make these payments or contributions to its employees.
We may be unable to find and retain suitable contractors and subcontractors at reasonable rates. Substantially all of our construction work is performed by subcontractors with us acting as the general contractor.
We may be unable to find and retain suitable contractors and subcontractors at reasonable rates. Substantially all of our construction work is performed by subcontractors with us acting as the general contractor. Accordingly, the timing and quality of our construction depend on the availability, cost and skill of contractors and subcontractors and their employees.
We compete with numerous large national and regional homebuilding companies and with smaller local homebuilders and land developers for, among other things, homebuyers, desirable land parcels, financing, raw materials and skilled management and labor resources.
There are relatively low barriers to entry into our business. We compete with numerous large national and regional homebuilding companies and with smaller local homebuilders and land developers for, among other things, homebuyers, desirable land parcels, financing, raw materials and skilled management and labor resources.
Changes in economic or business conditions may result in an increase in the default rate on the mortgages originated by Tri Pointe Connect, which could materially and adversely affect our ability to sell the mortgages to investors (or the pricing we receive upon the sale thereof) or may increase our recourse obligations for previous originations. - 15 - Because most of our homebuyers finance the purchase of their homes, the terms and availability of mortgage financing can affect the demand for and the ability to complete the purchase of a home, which could materially and adversely affect us.
Changes in economic or business conditions may result in an increase in the default rate on the mortgages originated by Tri Pointe Connect, which could materially and adversely affect our ability to sell the mortgages to investors (or the pricing we receive upon the sale thereof) or may increase our recourse obligations for previous originations.
We have established Tri Pointe Solutions, which provides mortgage loans to homebuyers through Tri Pointe Connect, title and escrow services through Tri Pointe Assurance, and property and casualty insurance through Tri Pointe Advantage. The residential mortgage lending, title insurance and property and casualty insurance industries are heavily regulated.
Laws and regulations governing the residential mortgage, title insurance, and property and casualty insurance industries could materially and adversely affect our Financial Performance. - 25 - We have established Tri Pointe Solutions, which provides mortgage loans to homebuyers through Tri Pointe Connect, title and escrow services through Tri Pointe Assurance, and property and casualty insurance through Tri Pointe Advantage.
In addition, we could be subject to individual or class action litigation alleging violations of these laws and regulations. Any of these could result in substantial costs and we could incur judgments or enter into settlements of claims that could have a material adverse effect on our business. Any of these outcomes could materially and adversely affect our Financial Performance.
Any of these could result in substantial costs and we could incur judgments or enter into settlements of claims that could have a material adverse effect on our business. Any of these outcomes could materially and adversely affect our Financial Performance. We may be unable to obtain suitable bonding for the development of our housing projects.
In addition, we could be required to make significant expenditures related to the settlement of such issues or disputes or to modify our community development plans, which could materially and adversely affect our Financial Performance. The homebuilding industry is highly competitive, and if our competitors are more successful or offer better value to potential homebuyers, our business could decline.
In addition, we could be required to make significant expenditures - 27 - related to the settlement of such issues or disputes or to modify our community development plans, which could materially and adversely affect our Financial Performance.
Repurchases pursuant to the 2025 Repurchase Program or any other stock repurchase program we adopt in the future could affect our stock price and increase its volatility and will reduce the market liquidity for our stock.
Repurchases pursuant to any stock repurchase program we adopt in the future could affect our stock price and increase its volatility and will reduce the market liquidity for our stock. The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.
If we are unable to obtain required bonds in the future for our projects, or if we are required to provide credit enhancements with respect to our current or future bonds, our Financial Performance could be materially and adversely affected. We are subject to environmental laws and regulations that may impose significant costs, delays, restrictions or liabilities.
We are often required to provide bonds to governmental authorities and others to ensure the completion of our projects. If we are unable to obtain required bonds in the future for our projects, or if we are required to provide credit enhancements with respect to our current or future bonds, our Financial Performance could be materially and adversely affected.
Changes to existing laws or regulations or adoption of new laws or regulations could require us to incur significant compliance costs. A material failure to comply with any of these laws or regulations could result in the loss or suspension of required licenses or other approvals, the imposition of monetary penalties, and restitution awards or other relief.
A material failure to comply with any of these laws or regulations could result in the loss or suspension of required licenses or other approvals, the imposition of monetary penalties, and restitution awards or other relief. In addition, we could be subject to individual or class action litigation alleging violations of these laws and regulations.
Additionally, i n September 2023, we announced our expansion into the greater Salt Lake City region with the launch of a new division in Utah, and in April 2024, we announced further expansion into Orlando, Florida, and the Coastal Carolinas area, which includes parts of Georgia and South Carolina..
Additionally, in April 2024, we announced our expansion into Orlando, Florida, and the Coastal Carolinas area, which includes parts of Georgia and South Carolina.
As a result, home sales could decline and costs could increase, which could materially and adversely affect our Financial Performance. - 20 - Laws and regulations governing the residential mortgage, title insurance, and property and casualty insurance industries could materially and adversely affect our Financial Performance.
As a result, home sales could decline and costs could increase, which could materially and adversely affect our Financial Performance.
Risks inherent in controlling, purchasing, holding and developing land parcels for new home construction are substantial and increase when demand for new homes decreases.
We face numerous risks associated with controlling, purchasing, holding and developing land. We acquire land for expansion into new markets and for replacement of land inventory and expansion within our current markets. Risks inherent in controlling, purchasing, holding and developing land parcels for new home construction are substantial and increase when demand for new homes decreases.
For example, in November 2022, pursuant to the Global Warming Solutions Act of 2006 (AB 32), the California Air Resources Board released a final scoping plan that, among other things, proposes to eliminate the installation of natural gas-powered appliances in favor of electric appliances in new residential construction effective in 2026.
For example, in November 2022, pursuant to the Global Warming Solutions Act of 2006 (AB 32), the California Air Resources Board released a final scoping plan that, among other things, identifies strategies and targets to reduce greenhouse gas emissions, including pathways that contemplate a transition away from natural gas-powered appliances toward electric appliances in new residential construction, subject to further regulatory, legislative or local action.
These reserves are established based on market practices, our historical experiences, and our judgment of the qualitative risks associated with the types of homes built.
We reserve a percentage of the sales price of each home that we sell to meet our warranty and other legal obligations to our homebuyers. These reserves are established based on market practices, our historical experiences, and our judgment of the qualitative risks associated with the types of homes built.
We operate in a very competitive environment that is characterized by competition from a number of other homebuilders and land developers in each geographical market in which we operate. There are relatively low barriers to entry into our business.
The homebuilding industry is highly competitive, and if our competitors are more successful or offer better value to potential homebuyers, our business could decline. We operate in a very competitive environment that is characterized by competition from a number of other homebuilders and land developers in each geographical market in which we operate.
Consequently, there is significant uncertainty in the solar power industry, which could impact the ability of our homeowners to bear the cost of solar panels, including pursuant to a lease agreement, or our ability to timely deliver homes and/or recover any additional construction costs we may incur to comply with applicable law. - 21 - In cases where an endangered or threatened species is involved and related agency rulemaking and litigation are ongoing, the outcome of such rule-making and litigation can be unpredictable and can result in unplanned or unforeseeable restrictions on, or the prohibition of, development and building activity in identified environmentally sensitive areas.
Consequently, there is significant uncertainty in the solar power industry, which could impact the ability of our homeowners to bear the cost of solar panels, including pursuant to a lease agreement, or our ability to timely deliver homes and/or recover any additional construction costs we may incur to comply with applicable law.
As a homebuilder and land developer, we are subject to the risks associated with numerous weather-related events and natural disasters that are beyond our control, which we have experienced and may in the future experience. These weather-related events and natural disasters include, but are not limited to, droughts, floods, wildfires, landslides, soil subsidence, hurricanes, tornadoes and earthquakes.
Adverse weather and natural disasters may increase costs, cause project delays and reduce consumer demand for housing. As a homebuilder and land developer, we are subject to the risks associated with numerous weather-related events and natural disasters that are beyond our control, which we have experienced and may in the future experience.
During the last economic downturn, the U.S. residential mortgage market as a whole experienced significant instability due to, among other things, defaults on subprime and other loans, resulting in the declining market value of those loans. In light of these developments, lenders, investors, regulators and other third parties questioned the adequacy of lending standards and other credit requirements.
Many of our homebuyers must sell their existing homes in order to buy a home from us. During the last economic downturn, the U.S. residential mortgage market as a whole experienced significant instability due to, among other things, defaults on subprime and other loans, resulting in the declining market value of those loans.
Moreover, such a loss could be negatively perceived in the capital markets, which could, in turn, materially and adversely affect the market price of our common stock. - 30 - We have not obtained key man life insurance that would provide us with proceeds in the event of death or disability of any of our key personnel.
Moreover, such a loss could be negatively perceived in the capital markets, which could, in turn, materially and adversely affect the market price of our common stock.
Termination of the employment agreements with the members of our management team could be costly and prevent a change in control of our company. Our employment agreements with Messrs.
We have not obtained key man life insurance that would provide us with proceeds in the event of death or disability of any of our key personnel. - 35 - Termination of the employment agreements with the members of our management team could be costly and prevent a change in control of our company. Our employment agreements with Messrs.
This led to tightened credit requirements and an increase in indemnity claims for mortgages.
In light of these developments, lenders, investors, regulators and other third parties questioned the adequacy of lending standards and other credit requirements. This led to tightened credit requirements and an increase in indemnity claims for mortgages.
We may incur costs, liabilities and reputational damage if our subcontractors engage in improper construction practices or install defective materials. Despite our quality control efforts, we may discover that our subcontractors were engaging in improper construction practices or installing defective materials in our homes.
Despite our quality control efforts, we may discover that our subcontractors were engaging in improper construction practices or installing defective materials in our homes. When we discover these issues, we, generally through our subcontractors, repair the homes in accordance with our new home warranty and as required by law.
Further material write-downs and impairments in the value of inventory may be require d, and we may sell land or homes at a loss, which could materially and adversely affect our Financial Performance. - 17 - Adverse weather and natural disasters may increase costs, cause project delays and reduce consumer demand for housing.
For the years ended December 31, 2025, 2024 and 2023, we recorded real estate inventory impairment charges of $31.1 million, zero, and $11.5 million, respectively. Further material write-downs and impairments in the value of inventory may be required, and we may sell land or homes at a loss, which could materially and adversely affect our Financial Performance.
Our business depends on the ability of our homebuyers to obtain financing for the purchase of their homes. Many of our homebuyers must sell their existing homes in order to buy a home from us.
Because most of our homebuyers finance the purchase of their homes, the terms and availability of mortgage financing can affect the demand for and the ability to complete the purchase of a home, which could materially and adversely affect us. Our business depends on the ability of our homebuyers to obtain financing for the purchase of their homes.
Please refer to the initial section of this annual report on Form 10-K entitled “Cautionary Note Concerning Forward-Looking Statements.” Risks Related to Our Business Our long-term growth depends upon our ability to identify and successfully acquire desirable land parcels at reasonable prices.
Please refer to the initial section of this annual report on Form 10-K entitled “Cautionary Note Concerning Forward-Looking Statements.” Risks Related to the Merger Consummation of the Merger is subject to certain conditions, including approval from our stockholders, the receipt of required regulatory approvals, and the satisfaction of other closing conditions, including conditions that may not be satisfied or completed within the expected timeframe, if at all.
Removed
These changes could adversely impact demand for and sales prices of homes, including ours, which could adversely affect our Financial Performance. We face numerous risks associated with controlling, purchasing, holding and developing land. We acquire land for expansion into new markets and for replacement of land inventory and expansion within our current markets.
Added
The consummation of the Merger is subject to certain conditions that render uncertain the closing and timing of the Merger.
Removed
For the years ended December 31, 2024, 2023 and 2022, we recorded real estate inventory impairment charges of zero, $11.5 million and zero, respectively.
Added
These conditions include, but are not limited to, the (i) approval of the holders of a majority of the outstanding shares of common stock entitled to vote on such matters to adopt the Merger Agreement; (ii) expiration or termination of any waiting period (and extensions thereof) applicable to the Transactions under HSR and the rules and regulations promulgated thereunder; (iii) absence of any law, order or injunction enacted or issued after the date of the Merger Agreement restraining, enjoining or - 16 - otherwise prohibiting the Merger; and (iv) absence of certain events comprising a material adverse effect on the Company’s business following the date of the Merger Agreement.
Removed
Accordingly, the timing and quality of our construction depend on the availability, cost and skill of contractors and subcontractors and their employees. - 18 - The residential construction industry experiences serious shortages of skilled labor from time to time.
Added
There can be no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, if all required consents and approvals are obtained and all closing conditions are satisfied (or waived, if applicable), there can be no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the closing of the Merger.
Removed
When we discover these issues, we, generally through our subcontractors, repair the homes in accordance with our new home warranty and as required by law. We reserve a percentage of the sales price of each home that we sell to meet our warranty and other legal obligations to our homebuyers.
Added
Certain of the conditions to consummation of the Merger are not within either our or Sumitomo Forestry’s control, and neither we nor Sumitomo Forestry can predict when or if these conditions will be satisfied (or waived, if applicable).
Removed
We may be unable to obtain suitable bonding for the development of our housing projects. We are often required to provide bonds to governmental authorities and others to ensure the completion of our projects.
Added
Further, there can be no assurance that the Transactions will receive HSR approval or that such approval will not impose conditions, divestitures, or other requirements.
Removed
Our current financing arrangements contain, and our future financing a rrangements likely will contain, restrictive covenants relating to our operations.
Added
Each party’s obligation to consummate the Merger is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger, including, with respect to us, covenants to operate our business in the ordinary course and not to engage in certain kinds of material transactions prior to closing of the Merger.
Removed
If we fail to meet or satisfy any of these covenants in our debt agreements, we would be in default under these agreements, which could result in a cross-default under other debt agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their respective interests against existing collateral.
Added
Failure to consummate the Merger in a timely manner, or at all, could negatively impact our Financial Performance and the market price of our common stock. The Merger may not be completed within the timeframe we expect, or at all, as a result of various factors, some of which are beyond our control.
Removed
The existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of such a program.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, as part of our risk-based approach to cybersecurity: • our information technology systems and internal controls undergo annual audit; • we conduct annual penetration testing in consultation with a third-party consultant to assess any vulnerabilities in our systems and utilize the results to evaluate and remediate any identified issues; • we conduct tabletop exercises in consultation with third-party consultants to enhance our readiness and response strategies in safeguarding against potential threats to our data, information technology systems, and critical business functions; • we perform daily vulnerability scans of all computers within our system; • we use single sign-on and multi-factor authentication; • we conduct diligence on, and seek engagements of, sophisticated, cloud-based third-party service providers for critical functions; • we have implemented a zero-trust security model with group-based access to resources on our network; • we monitor applicable privacy and data protection laws and regulations and implement changes, as necessary, to remain in compliance; • we maintain cyber liability and crime insurance policies; - 34 - • we maintain an alternate recovery site and immutable backups of the files on our systems to aid in the recovery of our data and for operational continuity, in the event of an incident or incursion; and • our employees participate in mandatory cybersecurity training, including a recurring cyber-phishing awareness campaign designed to assess our employees’ awareness of and responses to phishing requests.
Biggest changeAdditionally, as part of our risk-based approach to cybersecurity: • our information technology systems and internal controls undergo annual audit; • we conduct annual penetration testing in consultation with a third-party consultant to assess any vulnerabilities in our systems and utilize the results to evaluate and remediate any identified issues; • we conduct tabletop exercises in consultation with third-party consultants to enhance our readiness and response strategies in safeguarding against potential threats to our data, information technology systems, and critical business functions; • we perform daily vulnerability scans of all computers within our system; • we use single sign-on and multi-factor authentication; • we conduct diligence on, and seek engagements of, sophisticated, cloud-based third-party service providers for critical functions; • we have implemented a zero-trust security model with group-based access to resources on our network; • we monitor applicable privacy and data protection laws and regulations and implement changes, as necessary, to remain in compliance; • we maintain cyber liability and crime insurance policies; - 39 - • we maintain an alternate recovery site and immutable backups of the files on our systems to aid in the recovery of our data and for operational continuity, in the event of an incident or incursion; • our employees participate in mandatory cybersecurity training, including a recurring cyber-phishing awareness campaign designed to assess our employees’ awareness of and responses to phishing requests; and • we distribute a quarterly cybersecurity newsletter to all employees.
Our Risk Assessment Committee, which is comprised of individuals from our information technology, risk management, and internal audit departments, meets periodically to discuss our exposure to cyber risks as well as our efforts to mitigate the potential impact of such risks to our business or otherwise transfer such risk, including through the use of insurance products.
Our Risk Assessment Committee, which is comprised of individuals from our executive leadership team as well as our information technology, risk management, and internal audit departments, meets periodically to discuss our exposure to cyber risks as well as our efforts to mitigate the potential impact of such risks to our business or otherwise transfer such risk, including through the use of insurance products.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeWe believe that such properties, including the equipment located therein, are suitable and adequate to meet the needs of our businesses.
Biggest changeWe believe that such properties, including the equipment located therein, are suitable and adequate to meet the needs of our businesses. - 40 -

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed3 unchanged
Biggest changeItem 3. Legal Proceedings - 35 - 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.
Biggest changeItem 3. Legal Proceedings 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.
See Note 13, Commitments and Contingencies , of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. - 36 - PART II.
See Note 13, Commitments and Contingencies , of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. - 41 - PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−2 removed5 unchanged
Biggest changeDuring the three months ended December 31, 2024, we repurchased the following shares pursuant to our 2024 Repurchase Program: 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 (1) October 1, 2024 to October 31, 2024 193,376 $ 40.76 193,376 $ 145,536,898 November 1, 2024 to November 30, 2024 506,569 $ 41.66 506,569 $ 124,435,409 December 1, 2024 to December 31, 2024 502,968 $ 41.79 502,968 $ 250,000,000 Total 1,202,913 $ 41.57 1,202,913 (1) On December 18, 2024, we announced the approval of the 2025 Repurchase Program, pursuant to which are are authorized to repurchase shares of common stock with an aggregate value of up to $250 million through December 31, 2025.
Biggest changeDuring the three months ended December 31, 2025, we repurchased the following shares pursuant to our Repurchase Program: 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 October 1, 2025 to October 31, 2025 173,969 $ 32.52 173,969 $ 68,409,351 November 1, 2025 to November 30, 2025 873,453 $ 31.80 873,453 $ 40,636,619 December 1, 2025 to December 31, 2025 527,940 $ 33.75 527,940 $ 22,821,201 Total 1,575,362 $ 32.53 1,575,362 Stockholder Return Performance Graph The following performance graph shows a comparison of the cumulative total returns to stockholders of the Company, as compared with the Standard & Poor’s 500 Composite Stock Index and the Dow Jones U.S.
Accordingly, stockholders may need to sell their shares of our com mon stock to realize a return on their investment, and stockholders may not be able to sell their shares at or above the price they paid for them.
Accordingly, stockholders may need to sell their shares of our common stock to realize a return on their investment, and stockholders may not be able to sell their shares at or above the price they paid for them.
We have not paid any dividends on our common stock and currently intend to retain any future earnings to finance the development and expansion of our business and, therefore, do not intend to pay cash dividends on our common stock for the foreseeable future.
We have not paid any dividends on our common stock and currently intend to retain any future earnings to finance the developmen t and expansion of our business and, therefore, do not intend to pay cash dividends on our common stock for the foreseeable future.
See Part I, Item 1A, “Risk Factors—Risks Related to Ownership of Our Common Stock—We do not intend to pay dividends on our common stock for the foreseeable future” of this annual report on Form 10-K. - 38 - Item 6. [Reserved] - 39 -
See Part I, Item 1A, “Risk Factors—Risks Related to Ownership of Our Common Stock—We do not intend to pay dividends on our common stock for the foreseeable future” of this annual report on Form 10-K. - 43 - Item 6. [Reserved] - 44 -
Issuer Purchases of Equity Securities On December 18, 2024, we announced the approval of the 2025 Repurchase Program, which replaced the stock repurchase program that the Board of Directors authorized in December 2023 (the “2024 Repurchase Program”). The 2025 Repurchase Program authorizes the repurchase of up to $250 million of common stock through December 31, 2025.
Issuer Pur chases of Equity Securities On December 18, 2024, we announced the approval of a share repurchase program (the “Repurchase Program”), which replaced the stock repurchase program that the Board of Directors authorized in December 2023. The Repurchase Program authorized the repurchase of up to $250 million of common stock through December 31, 2025.
During the three months ended December 31, 2024, under the 2024 Repurchase Program, we repurchased 1,202,913 shares of common stock at an average price of $41.57 for an aggregate dollar amount of $50.0 million.
During the three months ended December 31, 2025, under the Repurchase Program, we repurchased 1,575,362 shares of common stock at an average price of $32.53 for an aggregate dollar amount of $51.2 million.
The Company’s common stock closing price on December 31, 2024 was $36.26 per share. The stock price performance of the Company’s common stock depicted in the graph above represents past performance only and is not necessarily indicative of future performance. As of February 6, 2025, we had 54 holders of record of our common stock.
The stock pri ce performance of the Company’s common stock depicted in the graph above represents past performance only and is not necessarily indicative of future performance. As of February 10, 2026, we had 54 holders of record of our common stock.
For the year ended December 31, 2024, under the 2024 Repurchase Program, we repurchased 3,964,537 shares of common stock at an average price of $36.97 for an aggregate dollar amount of $146.6 million.
For the year ended December 31, 2025, under the Repurchase Program, we repurchased 8,550,822 shares of common stock at an average price of $32.42 for an aggregate dollar amount of $277.2 million. All shares repurchased in 2025 were under the Repurchase Program, leaving $22.8 million of shares remaining to be purchased under the Repurchase Program as of December 31, 2025.
Removed
All shares repurchased in 2024 were under the 2024 Repurchase Program, leaving $250 million of shares remaining to be purchased under the 2025 Repurchase Program as of December 31, 2024.
Added
On July 23, 2025, our board of directors authorized the repurchase of up to an additional $50 million of common stock pursuant to the Repurchase Program, increasing the aggregate value of shares of common stock authorized to be repurchased under the Repurchase Program from $250 million to $300 million.
Removed
Stockholder Return Performance Graph The following performance graph shows a comparison of the cumulative total returns to stockholders of the Company, as compared with the Standard & Poor’s 500 Composite Stock Index and the Dow Jones U.S. Home Construction Index. - 37 - The above graph is based upon common stock and index prices calculated as of the dates indicated.
Added
Home Construction Index. - 42 - The above graph is based upon common stoc k and index prices calculated as of the dates indicated. The Company’s common stock closing price on December 31, 2025 was $31.47 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTri Pointe Connect was in compliance with all covenants and requirements as of December 31, 2024. - 47 - Covenant Compliance 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 December 31, Covenant Requirement at December 31, Financial Covenants 2024 2024 Consolidated Tangible Net Worth, as defined $ 3,175,460 $ 2,225,158 (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 0.3 % ≤60% (Not to exceed 60%) Interest Coverage Test 7.2 ≥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) that may be 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.
Biggest changeAs the Merger would otherwise trigger a change in control event of default under each of the Repurchase Agreements, we intend to seek the required consent of our lenders to the transaction prior to closing or, if we do not obtain such consent, terminate the applicable Repurchase Agreement(s) and repay all outstanding amounts thereunder in connection with the closing of the Merger. - 52 - Covenant Compliance 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 December 31, Covenant Requirement at December 31, Financial Covenants 2025 2025 Consolidated Tangible Net Worth, as defined $ 3,148,664 $ 2,343,366 (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 5.7 % ≤60% (Not to exceed 60%) Interest Coverage Test 6.4 ≥1.5 (Not less than 1.5:1.0) 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.
Purchases of common stock pursuant to the 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.
Purchases of common stock pursuant to the 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 a ccordance 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.
For a more detailed description of our land purchase and option contracts, please see Note 7, Variable Interest Entities, of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K, in addition to the discussion set forth above in the section entitled “Off-Balance Sheet Arrangements and Contractual Obligations.” 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 P ointe issued the 2028 Notes.
For a more detailed description of our land purchase and option contracts, please see Note 7, Variable Interest Entities, of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K, in addition to the discussion set forth above in the section entitled “Off-Balance Sheet Arrangements and Contractual Obligations.” 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.
See Note 6, Investments in Unconsolidated Entities , of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. - 50 - Cont ractual Obligations We have numerous contractual obligations and commitments to pay third parties, impacting our need for short-term and long-term liquidity and capital resources.
See Note 6, Investments in Unconsolidated Entities , of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. - 55 - Cont ractual Obligations We have numerous contractual obligations and commitments to pay third parties, impacting our need for short-term and long-term liquidity and capital resources.
While above-trend inflation persisted through 2023, it is noteworthy that inflation has exhibited a sustained period of easing, which has provided a degree of relief. While we attempt to pass on cost increases to homebuyers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.
While above-trend inflation persisted through 2025, it is noteworthy that inflation has exhibited a sustained period of easing, which has provided a degree of relief. While we attempt to pass on cost increases to homebuyers through increased prices, when weak housing market conditions exist, we are often unable to offset cost increases with higher selling prices.
This omitted information is not incorporated by reference and is not a part of this annual report on Form 10-K. Liquidity and Capital Resources Overview Our principal uses of capital for the year ended December 31, 2024 were operating expenses, share repurchases, land purchases, land development and home construction.
This omitted information is not incorporated by reference and is not a part of this annual report on Form 10-K. Liquidity and Capital Resources Overview Our principal uses of capital for the year ended December 31, 2025 were operating expenses, share repurchases, land purchases, land development and home construction.
Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions. As of December 31, 2024, we held equity investments in fifteen active homebuilding partnerships or limited liability companies and one financial services limited liability company.
Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions. As of December 31, 2025, we held equity investments in fifteen active homebuilding partnerships or limited liability companies and one financial services limited liability company.
Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. - 54 - Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”) .
Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated. Income Taxes - 59 - We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”) .
Due to this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters of our fiscal year, and the majority of cash receipts - 51 - from home deliveries occur during the second half of the year.
Due to this seasonality, home starts, construction costs and related cash outflows have historically been highest in the second and third quarters of our fiscal year, and the majority of cash receipts - 56 - from home deliveries occur during the second half of the year.
Recently Issued Accounting Standards See Note 1, Organization and Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. - 55 -
Recently Issued Accounting Standards See Note 1, Organization and Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K. - 60 -
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Discussion and analysis of our 2023 fiscal year and the year-over-year comparison of our 2023 financial performance to our 2022 financial performance may be found in Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024, which is available in the “investors” portion of our internet website at www.tripointehomes.com and the SEC’s website at www.sec.gov .
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Discussion and analysis of our 2024 fiscal year and the year-over-year comparison of our 2024 financial performance to our 2023 financial performance may be found in Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025, which is available in the “investors” portion of our internet website at www.tripointehomes.com and the SEC’s website at www.sec.gov .
Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 26.8% for the year ended December 31, 2024 compared to 25.9% for the prior year. Adjusted homebuilding gross margin is a non-GAAP financial measure.
Excluding interest and impairments and lot option abandonments in cost of home sales, adjusted homebuilding gross margin percentage was 25.2% for the year ended December 31, 2025 compared to 26.8% for the prior year. Adjusted homebuilding gross margin is a non-GAAP financial measure.
These costs related to the Credit Facility will amortize over the remaining term of the Credit Facility and are included in other assets on our consolidated balance sheets. Accrued interest, including loan commitment fees, related to the Credit Facility was $1.5 million and $1.6 million as of December 31, 2024 and 2023, respectively.
These costs related to the Credit Facility will amortize over the remaining term of the Credit Facility and are included in other assets on our consolidated balance sheets. Accrued interest, including loan commitment fees, related to the Credit Facility was $2.4 million and $1.5 million as of December 31, 2025 and 2024, respectively.
For the years ended December 31, 2024, 2023 and 2022, we recorded no real estate inventory impairment charges, $11.5 million and no impairment charges, respectively. Warranty Reserves In the normal course of business, we incur warranty-related costs associated with homes that have been delivered to homebuyers.
For the years ended December 31, 2025, 2024 and 2023, we recorded real estate inventory impairment charges of $31.1 million, zero, and $11.5 million, respectively. Warranty Reserves In the normal course of business, we incur warranty-related costs associated with homes that have been delivered to homebuyers.
Our cancellation rate of homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 10% for both the years ended December 31, 2024 and 2023, respectively.
Our cancellation rate of homebuyers who contracted to buy a home but did not close escrow (as a percentage of overall orders) was 12% and 10% for the years ended December 31, 2025 and 2024, respectively.
We used funds generated by our operations to meet our short-term working capital requirements. 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 December 31, 2024, we had $970.0 million of cash and cash equivalents.
We used funds generated by our operations to meet our short-term working capital requirements. 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 December 31, 2025, we had $982.8 million of cash and cash equivalents.
The difference between our effective tax rate for the years ended December 31, 2024 and 2023 and the federal statutory rate was primarily due to state income tax expense, stock-based compensation, federal energy tax credits and non-deductible executive compensation.
The difference between our effective tax rate for the years ended December 31, 2025 and 2024 and the federal statutory rate was primarily due to state income tax expense, federal energy tax credits, and non-deductible executive and share-based compensation.
At December 31, 2024 and 2023, we had outstanding letters of credit of $55.6 million and $52.3 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.
At December 31, 2025 and 2024, we had outstanding letters of credit of $51.9 million and $55.6 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 December 31, 2024, we had $241.1 million of non-refundable cash deposits pertaining to land option contracts and purchase contracts with an aggregate remaining purchase price of approximately $2.2 billion (net of deposits).
As of December 31, 2025, we had $209.6 million of non-refundable cash deposits pertaining to land option contracts and purchase contracts with an aggregate remaining purchase price of approximately $2.1 billion (net of deposits).
As of December 31, 2024, we were in compliance with all of the above financial covenants. - 48 - Stock Repurchase Program On December 18, 2024, we announced the approval of the 2025 Repurchase Program, which replaced the stock repurchase program that the Board of Directors authorized in December 2023 (the “2024 Repurchase Program”).
As of December 31, 2025, we were in compliance with all of the above financial covenants. - 53 - Stock Repurchase Program On December 18, 2024, we announced the approval of a share repurchase program (the “Repurchase Program”), which replaced the stock repurchase program that the Board of Directors authorized in December 2023.
All shares repurchased in 2024 were under the 2024 Repurchase Program, leaving $250 million of shares remaining to be purchased under the 2025 Repurchase Program as of December 31, 2024.
All shares repurchased in 2025 were under the Repurchase Program, leaving $22.8 million of shares remaining to be purchased under the Repurchase Program as of December 31, 2025.
Interest Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $114.9 million and $147.2 million for the years ended December 31, 2024 and 2023, respectively. The decrease in 2024 was primarily driven by a reduced interest burden following the redemption of our 2024 Senior Notes in May 2024.
Interest Interest, which was incurred principally to finance land acquisitions, land development and home construction, totaled $81.5 million and $114.9 million for the years ended December 31, 2025 and 2024, respectively. The decrease in 2025 was driven primarily by a lower interest burden following the redemption of our $450 million 2024 Senior Notes in May 2024.
These impairment evaluations require us to make estimates and assumptions regarding future conditions, including timing and amounts of development costs and sales prices of real estate assets, to determine if expected future undiscounted cash flows will be sufficient to recover the asset’s carrying value. - 53 - When estimating undiscounted cash flows of a community, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property.
When estimating undiscounted cash flows of a community, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other communities, and future sales price adjustments based on market and economic trends; (ii) expected - 58 - sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property.
We believe this information is meaningful as it isolates the impact that leverage and non-cash charges have on homebuilding gross margin and permits investors to make better - 43 - comparisons with our competitors, who adjust gross margins in a similar fashion. See the table above reconciling this non-GAAP financial measure to homebuilding gross margin, the nearest GAAP equivalent.
We believe this information is meaningful as it isolates the impact that leverage and non-cash charges have on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.
As of December 31, 2024 and 2023, lots controlled for Central include 5,816 and 3,561 lots, respectively, and lots controlled for East include 14 and 71 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
As of December 31, 2025 and 2024, lots controlled for Central include 5,356 and 5,816 lots, respectively, and - 50 - lots controlled for East include 0 and 14 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.
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.
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.
Income Tax For the year ended December 31, 2024, we have recorded a tax provision of $158.9 million based on an effective tax rate of 25.8%. For the year ended December 31, 2023, we recorded a tax provision of $118.2 million based on an effective tax rate of 25.3% .
Income Tax For the year ended December 31, 2025, we have recorded a tax provision of $92.8 million based on an effective tax rate of 27.8%. For the year ended December 31, 2024, we recorded a tax provision of $158.9 million based on an effective tax rate of 25.8%.
As of December 31, 2024, we were in compliance with the covenants required by our Senior Notes. Loans Payable - 46 - On December 15, 2023, we entered into a Fourth Modification Agreement (the “Fourth Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019 (the “Credit Agreement”).
As of December 31, 2025, we were in compliance with the covenants required by our Senior Notes. Loans Payable On April 30, 2025, we entered into a Fifth Modification Agreement (the “Fifth Modification”) to our Second Amended and Restated Credit Agreement dated as of March 29, 2019 (the “Credit Agreement”).
We believe the ratio of net homebuilding debt-to-net cap ital 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.
We believe the ratio of net homebuilding 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.
Additionally, the prior-year period included a $5.7 million charge related to unused forward commitments. - 44 - The following table presents selected financial information for Tri Pointe Connect, our mortgage financing operations, excluding brokered loan originations (dollars in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Total Originations: Loans 1,262 — Principal $ 633,538 $ — Mortgage Loan Origination Product Mix: Government (FHA, VA, USDA) 8 % — % Other agency 92 % — % Total agency 100 % — % Loan Type: Fixed rate 100 % — % ARM — % — % Credit Quality: Average FICO score 761 — Other Data: Average combined LTV ratio 77 % — % Full documentation loans 100 % — % Loans Sold to Third Parties: Loans 1,239 — Principal $ 620,606 $ — Lots Owned or Controlled by Segment Lots owned or controlled include our share of lots controlled from our unconsolidated land development joint ventures.
The following table presents selected financial information for Tri Pointe Connect, our mortgage financing operations, excluding brokered loan originations (dollars in thousands): - 49 - Year Ended December 31, 2025 Year Ended December 31, 2024 Total Originations: Loans 2,795 1,262 Principal $ 1,493,710 $ 633,538 Mortgage Loan Origination Product Mix: Government (FHA, VA, USDA) 18 % 8 % Other agency 82 % 92 % Total agency 100 % 100 % Loan Type: Fixed rate 95 % 100 % ARM 5 % — % Credit Quality: Average FICO score 755 761 Other Data: Average combined LTV ratio 79 % 77 % Full documentation loans 100 % 100 % Loans Sold to Third Parties: Loans 2,835 1,239 Principal $ 1,507,215 $ 620,606 Lots Owned or Controlled by Segment Lots owned or controlled include our share of lots controlled from our unconsolidated land development joint ventures.
The change was primarily comprised of (i) an increase in net income to $458.0 million in 2024 compared to $349.2 million in 2023, (ii) an increase in cash related to real estate inventories of $355.4 million in 2024, and (iii) an increase in cash provided by receivables of $168.2 million, offset by (iv) other normal fluctuations, including changes in other assets, accounts payable, accrued expenses and other liabilities and deferred income taxes. • Net cash used in investing activities was $63.5 million in 2024 compared to $26.4 million in 2023.
The change was primarily comprised of (i) a decrease in net income to $241.0 million in 2025 compared to $458.0 million in 2024, (ii) an increase in cash used related to real estate inventories of $257.5 million in 2025, and (iii) a decrease in cash provided by receivables of $148.7 million, offset by (iv) other normal fluctuations, including changes in other assets, accounts payable, accrued expenses and other liabilities and deferred income taxes. • Net cash used in investing activities was $45.8 million in 2025 compared to $63.5 million in 2024.
The dollar value of backlog was approximately $1.2 billion as of December 31, 2024, a decrease of $447.5 million, or 28%, compared to $1.6 billion as of December 31, 2023.
The dollar value of backlog was approximately $670.1 million as of December 31, 2025, a decrease of $494.5 million, or 42%, compared to $1.2 billion as of December 31, 2024.
SG&A as a percentage of home sales revenue decreased to 10.8% of home sales revenue for the year ended December 31, 2024 from 11.0% for the year ended December 31, 2023.
SG&A as a percentage of home sales revenue increased to 12.6% of home sales revenue for the year ended December 31, 2025 from 10.8% for the year ended December 31, 2024.
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 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.
Revenues from mortgage financing operations primarily represent mortgage loan broker fees paid by third party lenders, fees earned on mortgage loan originations and the realized and unrealized gains and losses associated with the sales and - 52 - changes in the fair value of mortgage loans held for sale.
Tri Pointe Connect will retain the ability to act as a mortgage loan broker for our homebuyers that originate loans with third party lenders. - 57 - Revenues from mortgage financing operations primarily represent mortgage loan broker fees paid by third party lenders, fees earned on mortgage loan originations and the realized and unrealized gains and losses associated with the sales and changes in the fair value of mortgage loans held for sale.
Home sales revenue in our East segment increased by 24% due to a 20% increase in new homes delivered and a 4% increase in average sales price. Backlog units at the start of the year were 28% higher than the prior-year period, which was the primary driver of our new home delivery growth.
Home sales revenue in our East segment decreased by 10% due to a 20% decrease in new homes delivered, offset some by a 12% increase in average sales price. Backlog units at the start of the year were 39% lower than the prior-year period, which was the primary driver of lower new homes delivered.
With a strong bala nce sheet and disciplined capital allocation, we are confident in our ability to deliver long-term value to our stockholders. Our approach focuses on balanced inventory management and prioritizing return-generating uses of cash, which enables us to optimize short-term performance while laying the foundation for sustained growth and stability in the long term.
Our approach focuses on balanced inventory management and prioritizing return-generating uses of cash, which enables us to optimize short-term performance while laying the foundation for sustained growth and stability in the long term.
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 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.
Homebuilding Gross Margins (dollars in thousands) Year Ended December 31, 2024 % 2023 % Home sales revenue $ 4,386,447 100.0 % $ 3,654,035 100.0 % Cost of home sales 3,363,881 76.7 % 2,838,513 77.7 % Homebuilding gross margin 1,022,566 23.3 % 815,522 22.3 % Add: interest in cost of home sales 148,547 3.4 % 116,143 3.2 % Add: impairments and lot option abandonments 4,157 0.1 % 14,157 0.4 % Adjusted homebuilding gross margin (1) $ 1,175,270 26.8 % $ 945,822 25.9 % Homebuilding gross margin percentage 23.3 % 22.3 % Adjusted homebuilding gross margin percentage (1) 26.8 % 25.9 % ______________________________________ (1) Non-GAAP financial measure (as discussed below).
Homebuilding Gross Margins (dollars in thousands) Year Ended December 31, 2025 % 2024 % Home sales revenue $ 3,363,814 100.0 % $ 4,386,447 100.0 % Cost of home sales 2,657,351 79.0 % 3,363,881 76.7 % Homebuilding gross margin 706,463 21.0 % 1,022,566 23.3 % Add: interest in cost of home sales 105,376 3.1 % 148,547 3.4 % Add: impairments and lot option abandonments 36,399 1.1 % 4,157 0.1 % Adjusted homebuilding gross margin (1) $ 848,238 25.2 % $ 1,175,270 26.8 % Homebuilding gross margin percentage 21.0 % 23.3 % Adjusted homebuilding gross margin percentage (1) 25.2 % 26.8 % ______________________________________ (1) Non-GAAP financial measure (as discussed below).
Backlog dollar value in our East segment decreased by 7% due to a 39% decrease in backlog units, offset by a 51% increase in average sales price.
Backlog dollar value in our East segment decreased by 36% due to a 25% decrease in backlog units and a 14% decrease in average sales price.
As of December 31, 2024, we had $694.4 million of availability under the Credit Facility after considering the borrowing base provisions and outstanding letters of credit. As of December 31, 2024, the Company had $21.0 million outstanding related to two seller-financed loans. As of December 31, 2023 we had $38.3 million outstanding related to two seller-financed loans.
As of December 31, 2025, we had $798.1 million of availability under the Credit Facility after considering the borrowing base provisions and outstanding letters of credit. As of December 31, 2025, the Company had $6.5 million outstanding under two seller-financed loans, compared with $21.0 million outstanding under two such loans as of December 31, 2024.
As of December 31, 2024, we had $250 million of outstanding debt under the Term Facility with a variable interest rate of 5.5%. As of December 31, 2024 and 2023, there was $3.5 million and $5.1 million, respectively, of capitalized debt financing costs.
We had no outstanding debt under the Revolving Facility as of December 31, 2025 and 2024. As of December 31, 2025, we had $450 million outstanding debt under the Term Facility with a variable interest rate of 4.9%. As of December 31, 2025 and 2024, there was $7.2 million and $3.6 million, of capitalized debt financing costs.
Other Income, Net Other income, net for the years ended December 31, 2024 and 2023 was income of $39.6 million and $39.4 million, respectively, with both amounts primarily driven by interest income from our existing cash balances.
This decrease was partially offset by a $200 million increase in borrowings under our term loan facility in September 2025. Other Income, Net Other income, net for the years ended December 31, 2025 and 2024 was income of $29.4 million and $39.6 million, respectively, with both amounts primarily driven by interest income from our existing cash balances.
The ratio of debt-to-capital and the ratio of net debt-to-net capital are calculated as follows (dollars in thousands): December 31, 2024 December 31, 2023 Loans payable $ 270,970 $ 288,337 Senior notes 646,534 1,094,249 Mortgage repurchase facilities 104,098 — Total debt 1,021,602 1,382,586 Less: mortgage repurchase facilities (104,098) — Total homebuilding debt 917,504 1,382,586 Stockholders’ equity 3,335,710 3,010,958 Total capital $ 4,253,214 $ 4,393,544 Ratio of homebuilding debt-to-capital(1) 21.6 % 31.5 % Total homebuilding debt $ 917,504 $ 1,382,586 Less: Cash and cash equivalents (970,045) (868,953) Net homebuilding debt (52,541) 513,633 Stockholders’ equity 3,335,710 3,010,958 Net capital $ 3,283,169 $ 3,524,591 Ratio of net homebuilding debt-to-net capital(2) (1.6) % 14.6 % ______________________________________________ (1) The ratio of homebuilding debt-to-capital is computed as the quotient obtained by dividing total homebuilding debt by the sum of total homebuilding debt plus stockholders’ equity.
The ratio of debt-to-capital and the ratio of net debt-to-net capital are calculated as follows (dollars in thousands): December 31, 2025 December 31, 2024 Loans payable $ 456,468 $ 270,970 Senior notes 647,586 646,534 Mortgage repurchase facilities 90,570 104,098 Total debt 1,194,624 1,021,602 Less: mortgage repurchase facilities (90,570) (104,098) Total homebuilding debt 1,104,054 917,504 Stockholders’ equity 3,315,834 3,335,710 Total capital $ 4,419,888 $ 4,253,214 Ratio of homebuilding debt-to-capital(1) 25.0 % 21.6 % Total homebuilding debt $ 1,104,054 $ 917,504 Less: Cash and cash equivalents (982,814) (970,045) Net homebuilding debt 121,240 (52,541) Stockholders’ equity 3,315,834 3,335,710 Net capital $ 3,437,074 $ 3,283,169 Ratio of net homebuilding debt-to-net capital(2) 3.5 % (1.6) % ______________________________________________ (1) Th e ratio of homebuilding debt-to-capital is computed as the quotient obtained by dividing total homebuilding debt by the sum of total homebuilding debt plus stockholders’ equity.
Home sales revenue in our West segment increased 10% due to a 10% increase in new homes delivered offset by a 1% decrease in average sales price.
Home sales revenue in our West segment decreased 29% due to a 29% decrease in new homes delivered on a flat average sales price.
Our financial strength provides the flexibility and security needed to navigate evolving market conditions while continuing to execute our strategic objectives. - 40 - Consolidated Financial Data (in thousands, except share and per share amounts): Year Ended December 31, 2024 2023 2022 Homebuilding: Home sales revenue $ 4,386,447 $ 3,654,035 $ 4,291,563 Land and lot sales revenue 33,064 12,197 5,108 Other operations revenue 3,162 2,971 2,695 Total revenues 4,422,673 3,669,203 4,299,366 Cost of home sales 3,363,881 2,838,513 3,160,581 Cost of land and lot sales 30,591 12,083 2,075 Other operations expense 3,061 2,894 2,685 Sales and marketing 216,518 184,388 175,005 General and administrative 256,038 217,994 212,504 Homebuilding income from operations 552,584 413,331 746,516 Equity in income (loss) of unconsolidated entities 361 (97) 312 Other income, net 39,640 39,446 2,307 Homebuilding income before income taxes 592,585 452,680 749,135 Financial Services: Revenues 70,197 46,001 49,167 Expenses 45,914 31,322 25,136 Equity in income of unconsolidated entities — — 46 Financial services income before income taxes 24,283 14,679 24,077 Income before income taxes 616,868 467,359 773,212 Provision for income taxes (158,898) (118,164) (190,803) Net income 457,970 349,195 582,409 Net loss (income) attributable to noncontrolling interests 59 (5,493) (6,349) Net income available to common stockholders $ 458,029 $ 343,702 $ 576,060 Earnings per share Basic $ 4.87 $ 3.48 $ 5.60 Diluted $ 4.83 $ 3.45 $ 5.54 Weighted average shares outstanding Basic 93,985,551 98,679,477 102,898,423 Diluted 94,912,589 99,695,662 104,003,652 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment Year Ended December 31, 2024 Year Ended December 31, 2023 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 3,140 71.6 3.7 3,528 77.7 3.8 (11) % (8) % (3) % Central 1,707 61.6 2.3 1,707 52.2 2.7 — % 18 % (15) % East 810 17.2 3.9 887 17.6 4.2 (9) % (2) % (7) % Total 5,657 150.4 3.1 6,122 147.5 3.5 (8) % 2 % (11) % - 41 - Net new home orders for the year ended December 31, 2024 decreased 8% to 5,657, compared to 6,122 for the prior year.
This balance sheet strength provides us with the financial flexibility to meet our obligations, manage through periods of market volatility, and maintain a disciplined approach to capital deployment as conditions evolve. - 45 - Consolidated Financial Data (in thousands, except share and per share amounts): Year Ended December 31, 2025 2024 2023 Homebuilding: Home sales revenue $ 3,363,814 $ 4,386,447 $ 3,654,035 Land and lot sales revenue 31,844 33,064 12,197 Other operations revenue 3,244 3,162 2,971 Total revenues 3,398,902 4,422,673 3,669,203 Cost of home sales 2,657,351 3,363,881 2,838,513 Cost of land and lot sales 29,890 30,591 12,083 Other operations expense 3,174 3,061 2,894 Sales and marketing 193,784 216,518 184,388 General and administrative 230,070 256,038 217,994 Homebuilding income from operations 284,633 552,584 413,331 Equity in income (loss) of unconsolidated entities 2,526 361 (97) Other income, net 29,439 39,640 39,446 Homebuilding income before income taxes 316,598 592,585 452,680 Financial Services: Revenues 71,802 70,197 46,001 Expenses 54,622 45,914 31,322 Equity in income of unconsolidated entities — — — Financial services income before income taxes 17,180 24,283 14,679 Income before income taxes 333,778 616,868 467,359 Provision for income taxes (92,785) (158,898) (118,164) Net income 240,993 457,970 349,195 Net loss (income) attributable to noncontrolling interests 95 59 (5,493) Net income available to common stockholders $ 241,088 $ 458,029 $ 343,702 Earnings per share Basic $ 2.73 $ 4.87 $ 3.48 Diluted $ 2.72 $ 4.83 $ 3.45 Weighted average shares outstanding Basic 88,172,175 93,985,551 98,679,477 Diluted 88,695,831 94,912,589 99,695,662 Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Net New Home Orders, Average Selling Communities and Monthly Absorption Rates by Segment Year Ended December 31, 2025 Year Ended December 31, 2024 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 2,123 69.0 2.6 3,140 71.6 3.7 (32) % (4) % (30) % Central 1,461 60.4 2.0 1,707 61.6 2.3 (14) % (2) % (13) % East 708 21.1 2.8 810 17.2 3.9 (13) % 23 % (28) % Total 4,292 150.5 2.4 5,657 150.4 3.1 (24) % — % (23) % Net new home orders for the year ended December 31, 2025 decreased 24% to 4,292, compared to 5,657 for the prior year.
The 2025 Repurchase Program authorizes the repurchase of up to $250 million of common stock through December 31, 2025. During the three months ended December 31, 2024, under the 2024 Repurchase Program, we repurchased 1,202,913 shares of common stock at an average price of $41.57 for an aggregate dollar amount of $50.0 million.
During the three months ended December 31, 2025, under the Repurchase Program, we repurchased 1,575,362 shares of common stock at an average price of $32.53 for an aggregate dollar amount of $51.2 million.
Off-Balance Sheet Arrangements and Contractual Obligations In the ordinary course of business, we enter into land option 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.
As of December 31, 2025, our cash and cash equivalents balance was $982.8 million. Off-Balance Sheet Arrangements and Contractual Obligations In the ordinary course of business, we enter into land option contracts in order to procure lots for the construction of our homes.
Financial Services Segment Income before income taxes from our financial services operations increased to $24.3 million for the year ended December 31, 2024, compared to $14.7 million for the prior-year period. This increase in income from financial services is due to higher home sales revenue, resulting in higher services available for capture.
Financial Services Segment Income before income taxes from our financial services operations decreased to $17.2 million for the year ended December 31, 2025, compared to $24.3 million for the prior-year period. This decrease in income from financial services is due primarily to lower new home deliveries and reduced home sales revenue, which resulted in fewer financial services available for capture.
For the year ended December 31, 2024, we recorded $1.2 million of unrealized gains, in Financial Services revenue, related to our mortgage loans held for sale as of December 31, 2024.
For the year ended December 31, 2025, we recorded an unrealized loss of $356,000 related to mortgage loans held for sale, compared to an unrealized gain of $1.2 million for the year ended December 31, 2024.
As of December 31, 2024, Tri Pointe Connect had $104.1 million of outstanding debt related to the Repurchase Agreements at a weighted-average interest rate of 6.2%, and $75.9 million of remaining capacity under the Repurchase Agreements.
As of December 31, 2025, Tri Pointe Connect had $90.6 million of outstanding debt related to the Repurchase Agreements at a weighted-average interest rate of 5.7%, and $109.4 million of remaining capacity under the Repurchase Agreements. Tri Pointe Connect was in compliance with all covenants and requirements as of December 31, 2025.
Backlog Units, Backlog Dollar Value and Average Sales Price by Segment (dollars in thousands) As of December 31, 2024 As of December 31, 2023 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 807 $ 653,064 $ 809 1,178 $ 921,211 $ 782 (31) % (29) % 3 % Central 472 281,377 596 754 442,732 587 (37) % (36) % 2 % East 238 230,161 967 388 248,171 640 (39) % (7) % 51 % Total 1,517 $ 1,164,602 $ 768 2,320 $ 1,612,114 $ 695 (35) % (28) % 11 % 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.
Backlog Units, Backlog Dollar Value and Average Sales Price by Segment (dollars in thousands) As of December 31, 2025 As of December 31, 2024 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 424 $ 360,647 $ 851 807 $ 653,064 $ 809 (47) % (45) % 5 % Central 260 161,398 621 472 281,377 596 (45) % (43) % 4 % East 178 148,093 832 238 230,161 967 (25) % (36) % (14) % Total 862 $ 670,138 $ 777 1,517 $ 1,164,602 $ 768 (43) % (42) % 1 % 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.
Total lots owned or controlled as of December 31, 2024 increased 14% from the prior year, driven by a 50% increase in lots controlled while lots owned decreased by 11%.
Total lots owned or controlled as of December 31, 2025 decreased 12% from the prior year, driven by an 18% decrease in lots controlled while lots owned decreased by 4%.
The Repurchase Agreements contain various affirmative and negative covenants applicable to Tri Pointe Connect, including thresholds related to net worth, net income, liquidity, and profitability.
Mortgage Repurchase Facilities As of December 31, 2025, Tri Pointe Connect had two active Master Repurchase Agreements totaling $200 million (“Repurchase Agreements”). The Repurchase Agreements contain various affirmative and negative covenants applicable to Tri Pointe Connect, including thresholds related to net worth, net income, liquidity, and profitability.
This decrease was due to a decrease in backlog units of 803, or 35%, to 1,517 as of December 31, 2024, compared to 2,320 as of December 31, 2023, offset to an extent by the 11% increase in average sales price in backlog to $768,000. Higher mortgage rates, particularly in the second half of 2024, negatively impacted our backlog units.
This decrease was due to a decrease in backlog units of 655, or 43%, to 862 as of December 31, 2025, compared to 1,517 as of December 31, 2024, offset to an extent by the 1% increase in average sales price in backlog to $777,000.
Although supply has increased compared to 2023, an imbalance persists, helping to offset some of the affordability challenges associated with elevated rates and outsized price appreciation over the past few years. Our West segment reported an 11% decrease in net new home orders due to a 3% decrease in monthly absorption rates and an 8% decrease in average selling communities.
While housing supply increased compared to 2024, a structural imbalance between supply and demand persists, which partially offset affordability pressures associated with elevated mortgage rates and significant home price appreciation over the past several years. - 46 - Our West segment reported an 32% decrease in net new home orders due to a 30% decrease in monthly absorption rates and a 4% decrease in average selling communities.
The increase in net cash used in investing activities of $37.0 million was due primarily to a $56.2 million increase in investments in unconsolidated entities, offset by a $16.4 million increase in distributions from unconsolidated entities. • Net cash used in financing activities increased to $531.5 million in 2024 from $189.6 million in 2023.
The decrease in net cash used in investing activities of $17.6 million was due primarily to a $26.9 million decrease in investments in unconsolidated entities, in addition to a $1.0 million increase in distributions received from unconsolidated entities. • Net cash used in financing activities decreased to $102.9 million in 2025 from $531.5 million in 2024.
Mortgage loans held for sale We intend to sell all of the loans we originate in the secondary market within a short period of time after origination. As of December 31, 2024 , mortgage loans held for sale had an aggregate estimated fair value of $115.0 million and an aggregate outstanding principal balance of $113.8 million.
As of December 31, 2025, mortgage loans held for sale had an aggregate estimated fair value of $98.5 million and an aggregate outstanding principal balance of $97.7 million, compared to an aggregate estimated fair value of $115.0 million and an aggregate outstanding principal balance of $113.8 million as of December 31, 2024.
All seller-financed loans are to acquire lots for the construction of homes. Principal on these loans are expected to be fully paid by the end of fiscal year 2025, provided certain achievements are met. One of the seller-financed loans, comprising $20.8 million of the total balance, accrues interest at an imputed interest rate of rate of 4.50% per annum.
All seller-financed loans were used to acquire lots for the construction of homes. Principal on the existing loans are expected to be fully paid by the end of fiscal year 2026, provided certain achievements are met.
For the year ended December 31, 2024, under the 2024 Repurchase Program, we repurchased 3,964,537 shares of common stock at an average price of $36.97 for an aggregate dollar amount of $146.6 million.
For the year ended December 31, 2025, under the Repurchase Program, we repurchased 8,550,822 sha res of common stock at an average price of $32.42 for an aggregate dollar amount of $277.2 million.
The table below summarizes our lots owned or controlled by segment as of the dates presented: Increase December 31, (Decrease) 2024 2023 Amount % Lots Owned West 9,475 11,172 (1,697) (15) % Central 5,437 5,967 (530) (9) % East 1,697 1,600 97 6 % Total 16,609 18,739 (2,130) (11) % Lots Controlled (1) West 4,949 3,867 1,082 28 % Central 9,841 5,997 3,844 64 % East 5,091 3,357 1,734 52 % Total 19,881 13,221 6,660 50 % Total Lots Owned or Controlled (1) 36,490 31,960 4,530 14 % - 45 - ______________________________________________ (1) As of December 31, 2024 and 2023, lots controlled included lots that were under land option contracts or purchase contracts.
The table below summarizes our lots owned or controlled by segment as of the dates presented: Increase December 31, (Decrease) 2025 2024 Amount % Lots Owned West 8,629 9,475 (846) (9) % Central 5,188 5,437 (249) (5) % East 2,137 1,697 440 26 % Total 15,954 16,609 (655) (4) % Lots Controlled (1) West 3,864 4,949 (1,085) (22) % Central 8,017 9,841 (1,824) (19) % East 4,384 5,091 (707) (14) % Total 16,265 19,881 (3,616) (18) % Total Lots Owned or Controlled (1) 32,219 36,490 (4,271) (12) % ______________________________________________ (1) As of December 31, 2025 and 2024, lots controlled included lots that were under land option contracts or purchase contracts.
Sales and Marketing, General and Administrative Expense (dollars in thousands) Year Ended December 31, As a Percentage of Home Sales Revenue 2024 2023 2024 2023 Sales and marketing $ 216,518 $ 184,388 4.9 % 5.0 % General and administrative (G&A) 256,038 217,994 5.8 % 6.0 % Total sales and marketing and G&A $ 472,556 $ 402,382 10.8 % 11.0 % Sales and marketing expense as a percentage of home sales revenue decreased to 4.9% for the year ended December 31, 2024 from 5.0% for the year ended December 31, 2023.
See the table above reconciling this non-GAAP financial measure to homebuilding gross margin, the nearest GAAP equivalent. - 48 - Sales and Marketing, General and Administrative Expense (dollars in thousands) Year Ended December 31, As a Percentage of Home Sales Revenue 2025 2024 2025 2024 Sales and marketing $ 193,784 $ 216,518 5.8 % 4.9 % General and administrative (G&A) 230,070 256,038 6.8 % 5.8 % Total sales and marketing and G&A $ 423,854 $ 472,556 12.6 % 10.8 % Sales and marketing expense as a percentage of home sales revenue increased to 5.8% for the year ended December 31, 2025 from 4.9% for the year ended December 31, 2024.
Backlog dollar value in our Central segment decreased 36% compared to the prior year due to a 37% decrease in backlog units, offset by a 2% increase in average sales price. The decrease in backlog units was due primarily to the slower monthly absorption rate we experienced in 2024, while increasing our new home deliveries by 55%.
Backlog dollar value in our Central segment decreased 43% compared to the prior year due to a 45% decrease in backlog units, offset by a 4% increase in average sales price.
The decrease in backlog units was largely due to the 9% decrease in net new home orders, while new homes delivered increased by 20%. - 42 - New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 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 3,511 $ 2,641,125 $ 752 3,186 $ 2,408,704 $ 756 10 % 10 % (1) % Central 1,989 1,127,972 567 1,285 746,752 581 55 % 51 % (2) % East 960 617,350 643 803 498,579 621 20 % 24 % 4 % Total 6,460 $ 4,386,447 $ 679 5,274 $ 3,654,035 $ 693 22 % 20 % (2) % Home sales revenue increased $732.4 million, or 20%, to $4.4 billion for the year ended December 31, 2024.
The decrease in backlog units was largely due to the 13% decrease in net new home orders we experienced in 2025, as well as lower backlog entering 2025, with backlog units down by 39%. - 47 - New Homes Delivered, Homes Sales Revenue and Average Sales Price by Segment (dollars in thousands) Year Ended December 31, 2025 Year Ended December 31, 2024 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 2,506 $ 1,886,728 $ 753 3,511 $ 2,641,125 $ 752 (29) % (29) % — % Central 1,673 924,290 552 1,989 1,127,972 567 (16) % (18) % (3) % East 768 552,796 720 960 617,350 643 (20) % (10) % 12 % Total 4,947 $ 3,363,814 $ 680 6,460 $ 4,386,447 $ 679 (23) % (23) % — % Home sales revenue decreased $1.0 billion, or 23%, to $3.4 billion for the year ended December 31, 2025.
This decrease was primarily driven by the 20% increase in home sales revenue resulting in improved utilization of leverage on the fixed components of our sales and marketing costs. Sales and marketing expense increased to $216.5 million for the year ended December 31, 2024 compared to $184.4 million in the prior year.
This increase was largely due to the 23% decrease in home sales revenue, which negatively impacted our fixed cost leverage. Sales and marketing expense decreased to $193.8 million for the year ended December 31, 2025 compared to $216.5 million in the prior year.
The increase was largely attributable to higher broker and internal commissions, as well as increased advertising expenses aimed at driving traffic and orders in response to more challenging market conditions. General and administrative expense as a percentage of home sales revenue decreased to 5.8% for the year ended December 31, 2024 from 6.0% for the year ended December 31, 2023.
The decrease was largely attributable to fewer broker and internal commissions, as these variable costs are directly tied to home sales activity and declined in line with lower revenue. General and administrative expense as a percentage of home sales revenue increased to 6.8% for the year ended December 31, 2025 from 5.8% for the year ended December 31, 2024.
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.
We may borrow under the Revolving Facility - 51 - 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.
Our East segment reported a 9% decrease in net new home orders due to a 7% decrease in monthly absorption rates and a 2% decrease in average selling communities. Similar to our West segment, the decrease in absorption rates, from 4.2 to 3.9, reflects sustained healthy market demand, despite rising affordability challenges.
Our Central segment reported a 14% decrease in net new home orders due to a 13% decrease in monthly absorption rates and a 2% decrease in average selling communities.
The Credit Facility (as defined below), consists of a $750 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”).
Following the Fifth Modification, The Credit Facility (as defined below), consisted of an $850 million revolving credit facility (the “Revolving Facility”) and a $250 million term loan facility (the “Term Facility” and together with the Revolving Facility, the “Credit Facility”). The Term Facility was scheduled to mature on June 29, 2027 while the Revolving Facility matures on April 30, 2030.
Cash Flows—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 - 49 - The comparison of cash flows for the years ended December 31, 2024 and 2023 is as follows: • Net cash provided by operating activities increased by $500.8 million to $696.1 million in 2024 from $195.3 million in 2023.
See the table above reconciling this non-GAAP financial measure to the ratio of debt-to-capital. - 54 - Cash Flows—Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The comp arison of cash flows for the years ended December 31, 2025 and 2024 is as follows: • Net cash provided by operating activities decreased by $534.6 million to $161.5 million in 2025 from $696.1 million in 2024.
The increase in general and administrative expenses is primarily related to higher employee costs. Total sales and marketing and G&A (“SG&A”) expense increased $70.2 million, or 17.4%, to $472.6 million for the year ended December 31, 2024 from $402.4 million in the prior year.
Total sales and marketing and G&A (“SG&A”) expense decreased $48.7 million, or 10.3%, to $423.9 million for the year ended December 31, 2025 from $472.6 million in the prior year.
Overview and Outlook We believe the Company is well-positioned to capitalize on the housing industry’s strong long-term fundamentals, as well as a structural supply-demand imbalance and favorable demographics, including Millennials and Gen Z entering their prime homebuying years. In recent years, home sales have not kept pace with population growth and household formation trends.
Overview and Outlook We remain optimistic about the long-term outlook for the housing industry, supported by strong underlying fundamentals, a persistent structural supply–demand imbalance, and favorable demographic trends as Millennials and Gen Z enter their prime home buying years. Over time, housing production has not kept pace with population growth and household formation, reinforcing the need for new supply.
Our homebuilding gross margin percentage improved to 23.3%, while total sales and general and administrative expense as a percentage of home sales revenue decreased to 10.8%, contributing to a 33% increase in net income available to common stockholders to $458.0 million. Diluted earnings per share rose 40% to $4.83, supported by our ongoing stock repurchase program and our strong earnings.
In the 2025 fiscal year, we achieved home sales revenue of $3.4 billion, and our homebuilding gross margin percentage was 21.0%, while total sales and general and administrative expense as a percentage of home sales revenue increased to 12.6%. These results led to net income available to common stockholders of $241.1 million, or diluted earnings per share of $2.72.
Backlog dollar value in our West segment decreased 29% compared to the prior year as a result of a 31% decrease in backlog units, offset by a 3% increase in average sales price. The decrease in backlog units was due primarily to the decrease in new order activity experienced during 2024, coupled with an increase in deliveries.
The availability of these homes allows us to address buyer demand on shorter timelines and helps mitigate the impact of lower backlog levels on future deliveries. Backlog dollar value in our West segment decreased 45% compared to the prior year as a result of a 47% decrease in backlog units, offset by a 5% increase in average sales price.
Home sales revenue in our Central segment increased 51% due to a 55% increase in new homes delivered offset by a 2% decrease in average sales price. This growth was supported by a 127% increase in backlog units at the start of the year compared to the prior-year period.
This decrease was driven by a 37% decrease in backlog units at the start of the year compared to the prior-year period, as well as lower net new home order activity during the year.
Our homebuilding gross margin percentage increased to 23.3% for the year ended December 31, 2024, as compared to 22.3% for the year ended December 31, 2023. This increase was driven by a favorable product mix and reduced utilization of incentives in 2024.
Our homebuilding gross margin percentage decreased to 21.0% for the year ended December 31, 2025, as compared to 23.3% for the year ended December 31, 2024. The year-over-year decline was primarily driven by $31.1 million of inventory impairment charges, which impacted gross margin by approximately 90 basis points.
Previously, we entered into a Third Modification Agreement on June 29, 2022 (the “Third Modification”) to our Credit Agreement dated as of March 29, 2019.
On September 18, 2025, we entered into a Sixth Modification Agreement (the “Sixth Modification”) to the Credit Agreement.
The Third 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.
The Fifth Modification, among other things, amends the Credit Agreement to (i) increase the maximum amount of the revolving credit facility (the “Revolving Facility”) under the Credit Agreement from $750.0 million to $850.0 million, with the ability to increase the aggregate amount of the Revolving Facility up to $1.2 billion under certain circumstances, (ii) extend the maturity date of the Revolving Facility to April 30, 2030, (iii) permit three one-year extension requests for the maturity date of the Revolving Facility under certain circumstances, and (iv) modify certain financial covenants.
W e remain focused on optimizing capital returns while using strategic incentives to drive demand and sustain long-term performance. Our balance sheet remains strong, as we ended 2024 with $1.7 billion in total liquidity, including cash of $970.0 million and $694.4 million of availability under our unsecured revolving credit facility.
Our balance sheet remains strong, as we ended 2025 with $1.8 billion in total liquidity, including cash of $982.8 million and $798.1 million of availability under our unsecured revolving credit facility. During 2025, we generated $161.5 million in net cash provided by operating activities, further strengthening our liquidity position.
The increase in deliveries was primarily due to a 41% rise in backlog units at the start of the year compared to the prior-year period, partially offset by slower demand in the second half of the year.
The decrease in deliveries was primarily attributable to a 31% reduction in backlog units at the beginning of the year compared to the prior-year period, as well as lower net new home order activity during the year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have not entered into and currently do not hold derivatives for trading or speculative purposes.
Biggest changeFrom time to time, we enter into forward mortgage commitment arrangements in connection with home sales, which are used to support buyer financing and are not entered into for trading or speculative purposes. We have not entered into and currently do not hold derivatives for trading or speculative purposes.
The fair value of our debt, which consists of the Credit Facility, two seller-financed loans and Senior Notes, is based on quoted market prices for the same or similar instruments as of December 31, 2024.
The fair value of our debt, which consists of the Credit Facility, two seller-financed loans and Senior Notes, is based on quoted market prices for the same or similar instruments as of December 31, 2025.
Many of the statements contained in this section are forward looking and should be read in conjunction with our disclosure s under the heading “Cautionary Note Concerning Forward-Looking Statements.” The table below details the principal amount and the average interest rates for the outstanding debt for each category based upon the expected maturity or disposition dates.
Many of the statements contained in this section are forward looking and should be read in conjunction with our disclosures under the heading “Cautionary Note Concerning Forward-Looking Statements.” The table below details the principal amount and the average interest rates for the outstanding debt for each category based upon the expected maturity or disposition dates.
Item 7A. 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 year ended December 31, 2024.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to m arket risks related to fluctuations in interest rates on our outstanding debt. We did not utilize swaps, forward or option contracts on interest rates or co mmodities, or other types of derivative financial instruments as of or during the year ended December 31, 2025.
Expected Maturity Date Estimated December 31, 2025 2026 2027 2028 2029 Thereafter Total Fair Value (dollars in thousands) Liabilities : Variable rate debt $ — $ — $ 250,000 $ — $ — $ — $ 250,000 $ 250,000 Weighted average interest rate — % — % 5.5 % — % — % — % 5.5 % Fixed rate debt $ 20,970 $ — $ 300,000 $ 350,000 $ — $ — $ 670,970 $ 663,660 Weighted average interest rate 4.5 % — % 5.3 % 5.7 % — % — % 5.5 % Based on the current interest rate management policies we have in place with respect to our outstanding debt, we do not believe that the future market rate risks related to the above securities will have a material adverse impact on our financial position, results of operations or liquidity.
Expected Maturity Date Estimated December 31, 2026 2027 2028 2029 2030 Thereafter Total Fair Value (dollars in thousands) Liabilities : Variable rate debt $ — $ 450,000 $ — $ — $ — $ — $ 450,000 $ 450,000 Weighted average interest rate — % 4.9 % — % — % — % — % 4.9 % Fixed rate debt $ 6,468 $ 300,000 $ 350,000 $ — $ — $ — $ 656,468 $ 664,356 Weighted average interest rate 4.5 % 5.3 % 5.7 % — % — % — % 5.5 % Based on the current interest rate management policies we have in place with respect to our outstanding debt, we do not believe that the future market rate risks related to the above securities will have a material adverse impact on our financial position, results of operations or liquidity.

Other TPH 10-K year-over-year comparisons