Greetings and welcome to the TRI Pointe Homes Second Quarter 2014 Earnings Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Glen Keeler, Chief Accounting Officer. Thank you, you may begin.

Good morning. Welcome to TRI Pointe Homes second quarter 2014 earnings conference call. Earlier today, the Company released its financial results for the quarter. Documents detailing these results are available on the Company's Investor Relations website at www.tripointehomes.com. Before the call begin, I would like to remind everyone that certain statements made in the course of this call are not based on historical information and constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described or implied in these forward-looking statements. I refer you to the Company's filings made with SEC for a more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The Company undertakes no duty to update these forward-looking statements that are made during the course of this call. Additionally, non-GAAP financial measures will be discussed on this conference call. The Company's presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through the filings with the SEC at www.sec.gov. Hosting the call today is Doug Bauer, TRI Pointe Homes’ Chief Executive Officer; Mike Grubbs, the Company's Chief Financial Officer; and Tom Mitchell, the Company’s Chief Operating Officer and President. With that, I will now turn the call over to Doug.

Thank you, Glen, I would also like welcome everyone to today’s call. Legacy TRI Pointe Homes again delivered across all financial metrics during the second quarter of 2014 which continues to reflect our management’s strength and our emphasis on growth. Net income was 6.1 million and $0.19 per diluted share is nearly three times the prior year period. New home orders increased 45% to 190 and we had an average 12.3 active selling communities. Home sales revenue grew 84% to 87.3 million and gross margins increased 440 basis points to 23.7% compared to the same period a year ago. We also remained active in the land market acquiring 198 lots valued at $36.4 million ending the quarter with 3,828 lots owned or controlled. This activity will continue to provide future growth. Subsequent to quarter end on July 7th, we closed the merger with WRECO, the homebuilding subsidiary of Weyerhaeuser. We were very proud that our TRI Pointe team accomplished these excellent results while also completing this merger with WRECO which is solid evidence of the capacities and depth at the Company. To that end, I would like to thank our team for their focus and dedication in completing this transformational transaction. Needless to say, we are very excited about the combination of TRI Pointe Homes with these five great homebuilding companies that offer leading brands, experienced leadership, and what we consider to be some of the best long-term housing markets in the country. The first is Maracay Homes, which was founded in 1994 and purchased by WRECO in 2006. Maracay operates in the premium first-time and move-up market segments of Phoenix and Tucson with base prices ranging from the low $200,000 to the high 400,000 while owning or controlling over 2,500 lots. The second is Pardee Homes the largest of…

Thanks Doug and good morning. I would also like to welcome everyone to today’s call. This morning I’m going to highlight some of the results and key financial metrics from our second quarter for legacy TRI Pointe, provide some clarity regarding the reverse Morris Trust transaction accounting and our expectations and outlook for the third quarter and remaining six months of 2014 for the combined Company. We’ll then open it up for some questions. As Doug mentioned we’re very pleased with our results for legacy TRI Pointe second quarter, our home sales revenue is 87.3 million on a 103 deliveries with an average sales price of 848,000. Our home building gross margins improved to 23.7% while our SG&A expense as a percentage of home sales revenue improved 11.2% for the quarter, which resulted in net income of 6.1 million or $0.19 per diluted share or $0.20 per diluted share excluding the retail related transaction expenses incurred during the quarter. As for our selling communities we opened six new communities during the second quarter, three in Southern California, two in North California and one in Colorado. We also closed two communities both of which were in Southern California leaving us with 14 after selling locations. For the second quarter we averaged 12.3 selling locations versus 6.8 selling communities during the same period last year and 10 selling communities in the first quarter of 2014. We continued to see strong absorption rates in our communities with 5.2 orders per month per average selling community during the second quarter of 2014 which was an increase sequentially from an absorption rate of 4.6 orders per month from the previous quarter. Our cancellation rate for the second quarter was 9% compared to 8% from last quarter and 6% for the comparable period over a year…

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Thank you. Our first question comes from the line of Mark Weintraub with Buckingham Research. Please proceed with your question.

Thank you. Two questions. First, if you could, you had indicated that in the 2015 guidance you were assuming I believe land sales fairly consistent with historical WRECO. Could you frame for us roughly what historical WRECO land sales had been totaling?

Hi Mark this is Doug. Land sales historically have been recurring item for the party companies and throughout the WRECO organization and over the last five years it’s averaged nearly $100 million.

Okay, great. And then second, just on the step up of basis, that was very helpful. Is it fair to assume that about $23 million, roughly half of it would probably show up in the third quarter, is that a reasonable way to think of it?

Yes, Mark for anything other than that that’s probably a fair assumption. I think it’s going to turn a little bit quicker in the third than it would in the fourth quarter, but we just have not completed our analysis to be able to determine that.

Okay, great. And then most of the stepped up basis will have, not all I guess, but much of it will have played out through the second half of this year, is that correct?

It turns fairly quickly because they are higher margin projects are the ones that are delivering units in the next two to three quarters so it turns fairly quickly.

Our next question comes from the line of Will Randall with Citigroup. Please proceed with your question.

First, I just want to say congratulations on the progress, legacy TRI Pointe while completing this transformational acquisition. My first question, it seems like the biggest opportunity here, and you alluded to a couple of the points, the cycle times and obviously your asset turns on land, given the big book you’ve acquired. Can you talk about the opportunities there and how you plan to move the needle for I assume 2016 as it may take a year really to get the plan in place?

Will, I didn’t make it out from the bill today.

Hi Tom.

This is Tom. Yes, we’re excited about the opportunity obviously. We think that the operational efficiency we’re going to create will really have a pretty strong impact, but as you said over a little longer period of time approximately about 12 months to 24 months, and we’re going to look at all five of the companies and really turn it into what you would expect given your look at TRI Pointe over the last 18 months.

So, more of a merchant builder, if you will. As a follow up, thank you for the initial 2015 guidance. Can you walk us through...

I will just add to that and as I pointed out on my remarks, we are going to continue to not only look at cycle times but also by repositioning the assets and it’s really focused as we continue to focus since we started TRI Pointe 2009 and turning those assets from the start of sales to closings in 36 months. So those are obviously things that we've been successful in doing for the last five years and we think we can continue to improve on those type of operating philosophies as we put these companies together. Will Randall – Citigroup: And then just on your 2015 guidance, directionally speaking, can you walk us through some of your operating assumptions? I know you don't want to quantify them, but just directionally how we should think about things like gross margin, SG&A, as well as top line drivers?

Obviously dough mentioned the delivery account we are reflecting for 2014 roughly 2,100 units from that number you would add the combined first and second quarter obviously from a GAAP standpoint you would only add WRECO’s deliveries but we’re referring to the combined company when we’re saying that we think we’re going to have deliveries in excess of 25% of that number from the growth perspective. So that gets you around the 4,200, 4,300 units and we think we’ll potentially exceed that. Talking about average sales price again we managed average sales prices around 550,000 that’s probably a fairly decent run rate for 2015 as well we’ll have look to at that number as we move forward and update everybody on that. Margins from a perspective we mentioned that TRI Pointe legacy homebuilding margin is going to come in little a bit in the second half of this year -- WRECO from the historical perspective, their margins have been roughly around 21%, 21.5% historically I think for the balance of first part of this year. We see that maybe coming a little bit in the second half of year just based on the some of the softening of the markets. And then SG&A that’s certainly a big focus of our as we look out 12 to 24 months and it something that we were able to achieve here at legacy TRI Pointe, that is a big metric for us that we look to achieve operational efficiencies over the next couple of years around 100 basis points a year.

Well, we think this is a good starting point in light of current market conditions and its significant growth in light of where the current market is, so we’re very proud of where we believe this combined company is going to go in 2015 after you go through this tough period and onetime adjustments of 2014.

Our next question comes from the line of Nishu Sood with Deutsche Bank. Please proceed with your question.

Thanks. This is Rob Hansen on for Nishu. So I think Pardee had somewhere around 19,000 lots or so. What -- like how much would you consider kind of excess on a lot basis? And how do you think about -- once you deploy that, once you sell that land -- you talked about $100 million in land sales per year, how do you think about deploying that cash? Where is it going to go to? Is it going to go towards debt repayment or are you going to funnel it back into land elsewhere? How do you think about all that?

As Mike mentioned, we will look to increase those returns in cycle inventory and land sales as part of our recurrent -- part of our business to either fund future growth in the homebuilding business and to our pay down debt. We’ve indicated over the length of our company that we want to keep a prudent balance sheet and keep our debt to capital at below 50%, so all those things will be factored into the increase cash flow and profitability of the company.

Okay and then just wanted to kind of return to the guidance for -- for a moment. We really appreciate that. And I know you haven't given any numbers, but in terms of SG&A and I'm not asking for necessarily next year, but just kind of a long-term target, what is the goal ultimately to have that as kind of a percentage of revenues now that you have the much larger company?

Historically builders of this size would be somewhere in 11% range, the WRECO companies at the end of the second quarter were north of 14% as I indicated in my remarks, so we'll like to see over the next three years a gradual reduction to where we think the industry is more normally situated.

Okay. And on that 14%, how much of that was just due to the allocation to Weyerhaeuser?

It’s a combination of overhead and selling, its combination of all factors.

Our next question comes from the line of Allen Ratner with Zelman and Associates. Please proceed with your question.

Doug, just on the comment about focusing on the turns on WRECO’s assets, I was hoping you could give us a little bit of insight on how you think about absorptions going forward. If you look at the TRI Pointe absorption rate up to this point, you guys have done a fantastic job, absorptions have been in the five per month range and obviously that’s not necessarily a sustainable level as the company grows, but WRECO’s absorption is more in the two to three per month range. So when you say focusing on the turns do you see an opportunity to really bring that absorption rate closer to legacy TRI Pointe, or is that something that you think maybe two to three is more normal thinking about going forward?

Hi Allen this is Tom. It’s a good question one we’ve been working quite a bit on. Obviously absorption is fairly dependent on individual market. So there is a variety as we look at the different WRECO companies there. But I think the goal is to try to optimize each one of those companies and get it to perform at little higher turns. I think we’d be targeting in that 2 to 4 range versus some of the 2 to 3 ranges that you see currently in the WRECO companies. And likewise, I think at TRI Pointe we’ll have a little acceleration from that, but four would be more the norm than over 5 we’ve experiencing lately.

The other part of our operating philosophy in cycle times Allen is also construction cycle times, the various companies build in some premium product stand points and we think there is some efficiencies and looking at how they establish a fact and deliver their product. So that’s the other thing that we’re referring to also when you look at the Winchester to Quadrant to Maracay to Trendmaker brands. We’re very cognizant of starting communities and selling them out in 36 months. So it’s not just absorption it’s also improving on construction cycle times.

And just thinking about that absorption goal to improve those, what are the leverage you see at least in near term you see yourself focusing on on those, is it more pricing, is it changing the product to drive better selling pace, is it specking more? What are the ways you’re thinking about that as far as improving that absorption pace from the legacy WRECO?

I think it’s a combination of all those factors and also the fact that we as a historical TRI Pointe company have always focused more on the balancing and looking at each community from the ground up as far as maintaining pace and pricing in each one of the sub markets and I think that's something that we can continue to improve on with these company.

Allen, the other thing I think we can do relative to some immediate results just really have the marketing and merchandising efforts be more consistent with how you’re seeing TRI Pointe product implemented. But we’ll be looking at future go forward products as well and I think we’ve got a great opportunity to have some success there.

Our next question comes from the line Steve Stelmach with FBR. Please proceed with your question.

Going back to the land question, I think on pro forma basis you guys are right around a nine year supply of land. Considering your increased target on increasing cycle times and on land sales, where should we think that number goes over the longer term? Maybe you’re comfortable at sort of higher end of peers, or do you want to get more towards the lower end of lot supplies?

Steve, this is Doug. We message and continue to believe that we like to see that get down into the five range overall, but you got to be careful when you take that nine obviously it’s based if you look on our investors they actually provided it’s heavily skewed by the Pardee company.

Understood, yes.

And a little bit of Winchester that owns and controls 3,100 lots. If you take out those companies they’re actually very much wanted to TRI Pointe in that cycle three to five, three to four year range. And when I say that I’m always thinking forward. I know the street looks at LTM but Pardee and Winchester is where you’ll see that average come down. So the overall average will probably be in that five year range.

Okay.

And Steve just one thing on that.

Yes.

Obviously land sale is a component of that but also just increase volume, when you look at the community account growth and the volume growth it will naturally begin to skew that down to the lower middle end of the range.

Absolutely, yes. And so how should we think about balance sheet and leverage under that scenario? A little bit more efficient, a little bit higher turn Doug, I think you mentioned the 50% net debt to cap, is there a bias to go lower, or more static sort of number where we're at in terms of leverage?

We are currently running in the mid-40s, low 40s, we have net debt to cap and our tolerance level is around that 50%, so that's -- when me take about where we’ll use the capital from some of the land sales as we monetize some of the land to either pay down debt to be a little bit more conservative on the debt side and that we’ll also use that capital to look at opportunities for future growth. Getting into 50% range is not where we want to be.

(Operator Instructions) Our next question comes from the line of Brendan Lynch with Sidoti. Please proceed with your question. Brendan Lynch – Sidoti: Doug, I appreciate your walking us through your markets and lot position, and Mike, your comments on the book value. In trying to get a fair value assessment of WRECO's inventory. Can you give us some color on vintage of the lots that you have there? And also a break down by raw, partially developed, and finished?

Well, I mean I can give some sort of indication on vantage and really where most of that kind of situation is in Pardee, when you look at Riverside County assets and I believe we’re actually on the website today putting up the project table but you can also refer to project tables in our previous filings whereby we show all the lot counts by project by county by region. When you look at Riverside County [indiscernible] of that is between 1989 and 2000, Los Angles County is somewhere between 1987 and the most recent asset was in 2004 I believe. San Diego we have properties back -- Pacific Highlands Ranches which is in 1979, it’s a very significant asset and has a value way above its basis. But anyway in San Diego between 1979, I think the most recent asset was 2004, most of those were purchased in the late 90s or 2000. And then Nevada is some of that 1989 but most of that's more new properties in 2011.

Yes, Brendan, in Las Vegas, were really down to one legacy project that we have there that Mike was referring back to back to 80s purchase, but other than that in Las Vegas we're really more acting as a merchant builder and doing more recent acquisition. Brendan Lynch – Sidoti: And for these lots that date back many years, are you currently developing those and building homes on those or are you -- are those being held for development in the future?

Yes it's really a combination of both of those Brendan, most of the older ones are in active development but some of them had significant entitlement periods to them and have not hit that active development yet. Brendan Lynch – Sidoti: And when we get to that point where those are -- you're getting more deliveries out of those -- would we be ready to expect expanded gross margins based on the low cost basis?

Well in generally yes, I mean, every assets is absolutely different and we’re not here to talk about and disclose margins on every assets that we have in our balance. I think the other thing you asked was kind of breakdown of inventory, you can see that in our previous filings, but roughly for WRECO that billion 5 that they have inventory that’s about 450 million of real estate and development or for sale and there is residential lots of roughly 500 million, land and development was about 300 million and then land held for future is about 250 million.

Our next question comes from the line of Jay McCanless with Sterne Agee. Please proceed with your question.

Thanks for taking my questions. I apologize if I missed this. But did you guys give a community count growth expectation for 2015?

We did not Jay. We just gave a community count for the balance of 2014.

Okay. And then my second question, it’s following on a little bit of what you just talked about in the prior question, what percentage if you would be willing to give that of that, sounds like roughly $1 billion in active inventory from WRECO? What percentage of that is going to be coming online over the next two years, three years, et cetera? And if you could, maybe give us an idea of whether that's California, good California land or if it's BC lots? Any kind of color about the quality of it would help also.

We don’t typically disclose that kind of information but you refer to two categories real estate and development for sale and residential lots, I mean that’s all active communities that are coming to market or at market right now and that market being available for sale and units under construction.

Our next question comes from the line of Alex Barron with Housing Research Center. Please proceed with your question.

Good morning guys. And congrats on the quarter’s results and the merger. I wanted to I guess focus a little bit on the SG&A. Can you guys give us a sense of I guess what the percentage or the dollars would be fixed versus variable or how you guys are thinking about that going forward?

Yes, we’re not really guiding to any of those numbers Alex. I mean obviously as part of the transaction we’re eliminating duplicative corporate they had a home office, we have an office so you will see some impact of that moving into 2015 or is it fairly significant allocation from Weyerhaeuser that we've replaced those services here and there may be at potentially lower cost.

But as we said earlier Alex I mean historically home building companies operating at an efficient level of about 11% in the WRECO companies that the second quarter was north of 14% we think over the next three years there is gradual improvement in the SG&A number and its both combination of variable and fixed cost. So we look at the total expense and continue to refine and create operating leverage. And frankly we create more efficiency by the increase in deliveries too. As we indicated we think deliveries will increase 25% or so into 2015.

As you know I mean most of the SG&A costs are obviously associated with people and we think we have people in place and we can leverage their talent to deliver more products.

Got it. And then I guess just to get a little bit more clarity on the comment about the ASP going lower as we move into next year, so I’m guessing part of that is because the legacy TRI Pointe was obviously much higher than WRECO but within the Legacy TRI Pointe, are you also expecting the ASP to go down because of product mix?

Yes, I think we previously mentioned that on several calls Alex. I mean it’s probably our peak on ASP right now. I think our backlog or deliveries were 848 and 822. We see that number coming down because a lot of the newer communities and we’re opening 24 new communities this year, 26 new communities are at lower price points, they’re more easily located, less coastal we have some different in product mix. So our ASP naturally at legacy TRI Pointe was trending down.

Thank you. We have reached the end of the question-and-answer session. Mr. Bauer, I would now like to turn the floor back over to you for closing comments.

Thank you. And thank you everyone for attending today’s call. And we look forward to talking to you all at the end of the third quarter and sharing more about the future growth of the six fine home building companies. So again thank you for being part of todays call and look forward to next quarter.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.