Tri Pointe Homes, Inc.TPH
Tri Pointe Homes, Inc. Fair Value Disclosure
Fair Value Disclosures
Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures, defines “fair value” as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories:
•Level 1—Quoted prices for identical instruments in active markets
•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date
•Level 3—Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date
Fair Value of Financial Instruments
A summary of assets and liabilities at December 31, 2025 and 2024, related to our financial instruments, measured at fair value for disclosure purposes on a recurring basis, is set forth below (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| Hierarchy | Book Value | Fair Value | Book Value | Fair Value | |||||||||||||||||||||||||
Senior Notes (1) | Level 2 | $ | 650,000 | $ | 657,888 | $ | 650,000 | $ | 642,690 | ||||||||||||||||||||
Term loan (2) | Level 2 | $ | 450,000 | $ | 450,000 | $ | 250,000 | $ | 250,000 | ||||||||||||||||||||
Seller-financed loans (3) | Level 2 | $ | 6,468 | $ | 6,468 | $ | 20,970 | $ | 20,970 | ||||||||||||||||||||
| Mortgage loans held for sale | Level 2 | $ | 98,514 | $ | 98,514 | $ | 115,001 | $ | 115,001 | ||||||||||||||||||||
| Mortgage repurchase facilities | Level 2 | $ | 90,570 | $ | 90,570 | $ | 104,098 | $ | 104,098 | ||||||||||||||||||||
__________
(1)The book value of the Senior Notes is net of discounts, excluding deferred loan costs of $2.4 million and $3.5 million as of December 31, 2025 and 2024, respectively. The estimated fair value of our Senior Notes at December 31, 2025 and 2024 is based on quoted market prices.
(2)The estimated fair value of the Term Loan Facility as of December 31, 2025 and 2024 approximated book value due to the variable interest rate terms of these loans.
(3)The estimated fair value of our seller-financed loans as of December 31, 2025 and 2024 approximated book value due to the short term nature of these loans.
(4)The estimated fair value for mortgage loans held for sale are determined based on quoted market prices, and are measured at fair value on a recurring basis, with changes in fair value recognized in our consolidated statements of operations.
(5)The estimated fair value of our mortgage repurchase facilities approximated book value due to the short term nature of these maturities.
At December 31, 2025 and 2024, the carrying value of cash and cash equivalents, receivables, other assets, accounts payable and accrued expenses and other liabilities approximated fair value due to their short-term nature and variable interest rate terms.
Fair Value of Nonfinancial Assets
Nonfinancial assets include items such as real estate inventories and long-lived assets that are measured at fair value on a nonrecurring basis with events and circumstances indicating the carrying value is not recoverable. For further details, see Note 5, Real Estate Inventories. The following table presents real estate inventories impairment charges and the remaining net fair value for nonfinancial assets that were measured during the periods presented (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||||||||||||||||||
| Hierarchy | Impairment Charge | Fair Value Net of Impairment | Impairment Charge | Fair Value Net of Impairment | |||||||||||||||||||||||||
Real estate inventories (1) | Level 3 | $ | 31,097 | $ | 106,315 | $ | — | $ | — | ||||||||||||||||||||
(1)Fair value of real estate inventories, net of impairment charges represents only those assets whose carrying values were adjusted to fair value in the respective periods presented. Fair Value Net of Impairment represents the fair value of the real estate inventories, net of the impairment charge, as of the date that the fair value measurements were made. The carrying value for these real estate inventories subsequently changed from the fair value reflected due to activity that occurred since the measurement date.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.