SCOTTSDALE, Ariz., July 26,
2023 /PRNewswire/ -- Taylor Morrison Home
Corporation (NYSE: TMHC), a leading national land developer and
homebuilder, announced results for the second quarter ended
June 30, 2023. Reported net income in
the second quarter was $235 million,
or $2.12 per diluted share.
Second quarter 2023 highlights included the following, as
compared to the second quarter 2022:
- Closings increased 3% to 3,125 homes at an average price of
$639,000, which generated home
closings revenue of $2.0
billion.
- Home closings gross margin declined 240 basis points year over
year but increased 30 basis points sequentially to 24.2%.
- Net sales orders increased 18% to 3,023, driven by a monthly
absorption pace of 3.1 per community versus 2.6 a year ago.
- Ended the quarter with approximately 72,000 homebuilding lots
owned and controlled, representing 5.8 years of total supply, of
which 3.3 years was owned.
- Total liquidity reached an all-time high of $2.3 billion.
- Homebuilding debt-to-capitalization declined to 29.7% on a
gross basis and 15.4% net of $1.2
billion of unrestricted cash.
- The Company's credit rating was upgraded by Moody's to Ba2 from
Ba3 with a Stable outlook.
- Book value per share increased 30% to $45.96.
"I am pleased to report that our results once again outperformed
our expectations across all key metrics as we continued to realize
the benefits of our scale, streamlined operations and balanced
portfolio along with improved market conditions. Among the
highlights for our second quarter, we delivered 3,125 homes at a
home closings gross margin of 24.2% and an SG&A ratio of 9.2%,
resulting in diluted earnings per share of $2.12. Coupled with nearly $400 million in share repurchases over the last
18 months, these earnings drove a 30% year-over-year increase in
our book value per share to nearly $46 and a return on equity of 22%," said
Sheryl Palmer, Taylor Morrison Chairman and CEO.
"Our focus on the operational efficiencies that generated these
earnings has been equally matched by our balance sheet stewardship.
As a result, we have never been in a stronger position to support
future growth as we ended the quarter with an all-time high
liquidity position of $2.3 billion
and a homebuilding net debt-to-capital ratio of just 15.4%."
Palmer continued, "On the demand front, sales and shopper
activity remained healthy throughout the quarter, maintaining the
momentum that began in the early spring selling season. In total,
our net sales orders increased 6% sequentially and 18% year over
year, driven by a monthly absorption pace of 3.1 per community as
compared to 2.9 in the first quarter and 2.6 a year ago."
"As we look ahead with the market environment showing signs of
stabilization, we are keenly focused on the future. The tools we
have put in place over the last year, and the exceptional cohesion
between our homebuilding and financial services teams, will allow
us to remain strongly focused on operating efficiently, investing
for future growth and serving our customers well. We have gained
critical advantages by achieving greater scale, simplifying our
operations and embracing innovation to drive both growth
opportunities and enhanced bottom-line results, and we will
continue to leverage those strengths as we move forward. Following
the strong first half of the year, we now expect to deliver
approximately 11,0000 homes at a home closings gross margin of
around 23.5% in 2023," said Palmer.
Business Highlights (All comparisons are of the
current quarter to the prior-year quarter, unless indicated.)
Homebuilding
- Home closings revenue increased 6% to $2.0 billion, driven by a 3% increase in home
closings to 3,125 and a 3% increase in average closing price to
$639,000.
- Home closings gross margin increased 30 basis points
sequentially but declined 240 basis points year over year to
24.2%.
- SG&A as a percentage of home closings revenue increased 40
basis points to 9.2%.
- Net sales orders increased 18% to 3,023, driven by a 17%
increase in the monthly absorption pace to 3.1 per community and a
1% increase in ending community count to 327. Average net sales
order price was $613,000, down 12%
due to a mix shift and net pricing adjustments.
- As a percentage of gross orders, cancellations equaled 11.2% as
compared to 14.0% in the prior quarter and 10.8% a year ago.
- Ending backlog was 6,165 sold homes, which was secured by
average customer deposits of approximately $62,000, or just over 9%, per home.
Land Portfolio
- Homebuilding land acquisition and development spend totaled
$397 million, down from $451 million a year ago. Development-related
spend accounted for 54% of the total versus 52% a year ago.
- Homebuilding lot supply was approximately 72,000 owned and
controlled homesites, down from 82,000.
- Controlled homebuilding lots as a share of total lot supply was
43%, up from 41% a year ago.
- Based on trailing twelve-month home closings, total
homebuilding lots represented 5.8 years of total supply, of which
3.3 years was owned. This compared to 6.1 years of total supply and
3.6 years of owned supply a year ago.
Financial Services
- The mortgage capture rate reached an all-time high of 86%, up
from 67%.
- Borrowers had an average credit score of 753 and debt-to-income
ratio of 39%.
Balance Sheet
- Total available liquidity was approximately $2.3 billion, including $1.2 billion of unrestricted cash and
$1.1 billion of total capacity on the
Company's revolving credit facilities, which were undrawn outside
of normal letters of credit.
- The gross homebuilding debt-to-capital ratio was 29.7%.
Including $1.2 billion of
unrestricted cash on hand, the net homebuilding debt-to-capital
ratio was 15.4%, down from 36.4% a year ago.
- In April, the Company received an upgraded credit rating from
Moody's to Ba2 from Ba3 with a Stable outlook in recognition of its
strong liquidity profile and proactive approach to debt
reduction.
- Over the last 18 months, the company has opportunistically
repurchased a total of 14.7 million shares outstanding for
approximately $380 million. During
the second quarter of 2023, the Company did not repurchase any
shares. At quarter end, the Company had $276
million remaining on its share repurchase
authorization.
Business Outlook
Third Quarter 2023
- Home closings are expected to be approximately 2,600
- Average closing price is expected to be around $615,000
- GAAP home closings gross margin is expected to be approximately
23.0%
- Ending active community count is expected to be between 320 to
325
- Effective tax rate is expected to be approximately 25%
- Diluted share count is expected to be approximately 111
million
Full Year 2023
- Home closings are now expected to be approximately 11,000
- Average closing price is expected to be around $625,000
- GAAP home closings gross margin is now expected to be
approximately 23.5%
- SG&A as a percentage of home closings revenue is expected
to be in the high-9% range
- Ending active community count is expected to be between 320 to
325
- Effective tax rate is expected to be approximately 25%
- Diluted share count is now expected to be approximately 111
million
- Homebuilding land and development spend is now expected to be
around $1.8 billion
Quarterly Financial Comparison
($ in
thousands)
|
|
Q2
2023
|
|
|
Q2
2022
|
|
|
Q2 2023 vs. Q2
2022
|
|
Total
Revenue
|
|
$
|
2,060,564
|
|
|
$
|
1,995,023
|
|
|
|
3.3
|
%
|
Home Closings
Revenue
|
|
$
|
1,996,747
|
|
|
$
|
1,883,020
|
|
|
|
6.0
|
%
|
Home Closings Gross
Margin
|
|
$
|
482,510
|
|
|
$
|
501,410
|
|
|
|
(3.8)
|
%
|
|
|
|
24.2
|
%
|
|
|
26.6
|
%
|
|
240 bps
decrease
|
|
SG&A
|
|
$
|
183,683
|
|
|
$
|
165,542
|
|
|
|
11.0
|
%
|
% of Home Closings
Revenue
|
|
|
9.2
|
%
|
|
|
8.8
|
%
|
|
40 bps
increase
|
|
CFO Appointment
Taylor Morrison announced today that its Board of Directors
has appointed Curt VanHyfte as the
Company's Executive Vice President and Chief Financial
Officer. Mr. VanHyfte had been serving as the Company's
Interim Chief Financial Officer since May of this year. Mr.
VanHyfte joined Taylor Morrison in
connection with its acquisition of William
Lyon Homes in February 2020.
Prior to serving as Interim Chief Financial Officer, Mr. VanHyfte
served as the Company's West Area President, where he was
responsible for overseeing and driving operational excellence and
growth for Western markets, including those in Arizona, California, Colorado, Washington and Oregon. During his nearly 30-year career in
homebuilding, he has held division, regional and national roles in
finance and spent time as a Division President in Chicago, St.
Louis, Houston and
Phoenix for several homebuilders.
Mr. VanHyfte earned a B.S. in accounting with a minor in business
management from St. John's University
in Minnesota.
Earnings Conference Call Webcast
A public webcast to discuss the Company's earnings will be held
later today at 8:30 a.m. ET. A live
audio webcast of the conference call will be available on the
Investor Relations portion of Taylor
Morrison's website at www.taylormorrison.com under the
Events & Presentations tab.
For call participants, the dial-in number is (833) 470-1428 and
conference ID is 811892. The call will be recorded and available
for replay on the Company's website later today and will be
available for one year from the date of the original earnings
call.
About Taylor Morrison
Headquartered in Scottsdale,
Arizona, Taylor Morrison is
one of the nation's leading homebuilders and developers. We serve a
wide array of consumers from coast to coast, including first-time,
move-up, luxury and resort lifestyle homebuyers and renters under
our family of brands—including Taylor
Morrison, Esplanade, Darling Homes Collection by
Taylor Morrison and Yardly. From
2016-2023, Taylor Morrison has been
recognized as America's Most Trusted® Builder by Lifestory
Research. Our strong commitment to sustainability, our
communities, and our team is highlighted in our latest
Environmental, Social, and Governance (ESG) Report on our
website.
Forward-Looking Statements
This earnings summary includes "forward-looking statements."
These statements are subject to a number of risks, uncertainties
and other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words ""anticipate," "estimate,"
"expect," "project," "intend," "plan," "believe," "may," "will,"
"can," "could," "might," "should" and similar expressions identify
forward-looking statements, including statements related to
expected financial, operating and performance results, planned
transactions, planned objectives of management, future developments
or conditions in the industries in which we participate and other
trends, developments and uncertainties that may affect our business
in the future.
Such risks, uncertainties and other factors include, among other
things: inflation or deflation; changes in general and local
economic conditions; slowdowns or severe downturns in the housing
market; homebuyers' ability to obtain suitable financing; increases
in interest rates, taxes or government fees; shortages in,
disruptions of and cost of labor; higher cancellation rates of
existing agreements of sale; competition in our industry; any
increase in unemployment or underemployment; the scale and scope of
the ongoing COVID-19 pandemic; the seasonality of our
business; the physical impacts of climate change and the increased
focus by third-parties on sustainability issues; our ability to
obtain additional performance, payment and completion surety bonds
and letters of credit; significant home warranty and construction
defect claims; our reliance on subcontractors; failure to manage
land acquisitions, inventory and development and construction
processes; availability of land and lots at competitive prices;
decreases in the market value of our land inventory; new or
changing government regulations and legal challenges; our
compliance with environmental laws and regulations regarding
climate change; our ability to sell mortgages we originate and
claims on loans sold to third parties; governmental regulation
applicable to our financial services and title services business;
the loss of any of our important commercial lender relationships;
our ability to use deferred tax assets; raw materials and building
supply shortages and price fluctuations; our concentration of
significant operations in certain geographic areas; risks
associated with our unconsolidated joint venture arrangements;
information technology failures and data security breaches; costs
to engage in and the success of future growth or expansion of our
operations or acquisitions or disposals of businesses; costs
associated with our defined benefit and defined contribution
pension schemes; damages associated with any major health and
safety incident; our ownership, leasing or occupation of land and
the use of hazardous materials; existing or future litigation,
arbitration or other claims; negative publicity or poor relations
with the residents of our communities; failure to recruit, retain
and develop highly skilled, competent people; utility and resource
shortages or rate fluctuations; constriction of the capital
markets; risks related to instability in the banking system as a
result of several recent bank failures; risks related to our
substantial debt and the agreements governing such debt, including
restrictive covenants contained in such agreements; our ability to
access the capital markets; the risks associated with maintaining
effective internal controls over financial reporting; provisions in
our charter and bylaws that may delay or prevent an acquisition by
a third party; and our ability to effectively manage our expanded
operations.
In addition, other such risks and uncertainties may be found in
our most recent annual report on Form 10-K and our subsequent
quarterly reports filed with the Securities and Exchange Commission
(SEC) as such factors may be updated from time to time in our
periodic filings with the SEC. We undertake no duty to update any
forward-looking statement, whether as a result of new information,
future events or changes in our expectations, except as required by
applicable law.
Taylor Morrison Home
Corporation
Consolidated
Statements of Operations
(In thousands, except
per share amounts, unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Home closings revenue,
net
|
|
$
|
1,996,747
|
|
|
$
|
1,883,020
|
|
|
$
|
3,609,342
|
|
|
$
|
3,527,429
|
|
Land closings
revenue
|
|
|
12,628
|
|
|
|
36,816
|
|
|
|
17,148
|
|
|
|
52,426
|
|
Financial services
revenue
|
|
|
41,914
|
|
|
|
35,471
|
|
|
|
77,063
|
|
|
|
70,670
|
|
Amenity and other
revenue
|
|
|
9,275
|
|
|
|
39,716
|
|
|
|
18,868
|
|
|
|
47,622
|
|
Total revenue
|
|
|
2,060,564
|
|
|
|
1,995,023
|
|
|
|
3,722,421
|
|
|
|
3,698,147
|
|
Cost of home
closings
|
|
|
1,514,237
|
|
|
|
1,381,610
|
|
|
|
2,741,750
|
|
|
|
2,646,584
|
|
Cost of land
closings
|
|
|
12,703
|
|
|
|
24,204
|
|
|
|
17,048
|
|
|
|
38,568
|
|
Financial services
expenses
|
|
|
25,342
|
|
|
|
21,483
|
|
|
|
47,490
|
|
|
|
45,697
|
|
Amenity and other
expenses
|
|
|
8,597
|
|
|
|
26,246
|
|
|
|
16,882
|
|
|
|
32,690
|
|
Total cost of revenue
|
|
|
1,560,879
|
|
|
|
1,453,543
|
|
|
|
2,823,170
|
|
|
|
2,763,539
|
|
Gross
margin
|
|
|
499,685
|
|
|
|
541,480
|
|
|
|
899,251
|
|
|
|
934,608
|
|
Sales, commissions and
other marketing costs
|
|
|
113,034
|
|
|
|
96,135
|
|
|
|
205,794
|
|
|
|
185,258
|
|
General and
administrative expenses
|
|
|
70,649
|
|
|
|
69,407
|
|
|
|
136,910
|
|
|
|
137,549
|
|
Net (income)/loss from
unconsolidated entities
|
|
|
(3,186)
|
|
|
|
3,637
|
|
|
|
(5,115)
|
|
|
|
1,806
|
|
Interest
(income)/expense, net
|
|
|
(5,120)
|
|
|
|
5,189
|
|
|
|
(6,231)
|
|
|
|
9,441
|
|
Other expense/(income),
net
|
|
|
8,549
|
|
|
|
(11,014)
|
|
|
|
3,715
|
|
|
|
(10,472)
|
|
Gain on extinguishment
of debt, net
|
|
|
—
|
|
|
|
(13,471)
|
|
|
|
—
|
|
|
|
(13,471)
|
|
Income before income
taxes
|
|
|
315,759
|
|
|
|
391,597
|
|
|
|
564,178
|
|
|
|
624,497
|
|
Income tax
provision
|
|
|
80,854
|
|
|
|
98,443
|
|
|
|
138,045
|
|
|
|
152,882
|
|
Net income before
allocation to non-controlling interests
|
|
|
234,905
|
|
|
|
293,154
|
|
|
|
426,133
|
|
|
|
471,615
|
|
Net income attributable
to non-controlling interests
|
|
|
(303)
|
|
|
|
(2,167)
|
|
|
|
(480)
|
|
|
|
(3,925)
|
|
Net income available
to Taylor Morrison Home Corporation
|
|
$
|
234,602
|
|
|
$
|
290,987
|
|
|
$
|
425,653
|
|
|
$
|
467,690
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.15
|
|
|
$
|
2.47
|
|
|
$
|
3.91
|
|
|
$
|
3.91
|
|
Diluted
|
|
$
|
2.12
|
|
|
$
|
2.45
|
|
|
$
|
3.85
|
|
|
$
|
3.87
|
|
Weighted average number
of shares of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
109,210
|
|
|
|
117,932
|
|
|
|
108,822
|
|
|
|
119,550
|
|
Diluted
|
|
|
110,856
|
|
|
|
118,931
|
|
|
|
110,466
|
|
|
|
120,796
|
|
Taylor Morrison Home
Corporation
Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,227,264
|
|
|
$
|
724,488
|
|
Restricted
cash
|
|
|
765
|
|
|
|
2,147
|
|
Total cash, cash
equivalents, and restricted cash
|
|
|
1,228,029
|
|
|
|
726,635
|
|
Owned
inventory
|
|
|
5,232,853
|
|
|
|
5,346,905
|
|
Consolidated real
estate not owned
|
|
|
892
|
|
|
|
23,971
|
|
Total real estate
inventory
|
|
|
5,233,745
|
|
|
|
5,370,876
|
|
Land
deposits
|
|
|
207,946
|
|
|
|
263,356
|
|
Mortgage loans held for
sale
|
|
|
287,001
|
|
|
|
346,364
|
|
Lease right of use
assets
|
|
|
80,578
|
|
|
|
90,446
|
|
Prepaid expenses and
other assets, net
|
|
|
261,070
|
|
|
|
265,392
|
|
Other receivables,
net
|
|
|
189,455
|
|
|
|
191,504
|
|
Investments in
unconsolidated entities
|
|
|
306,265
|
|
|
|
282,900
|
|
Deferred tax assets,
net
|
|
|
67,656
|
|
|
|
67,656
|
|
Property and equipment,
net
|
|
|
223,847
|
|
|
|
202,398
|
|
Goodwill
|
|
|
663,197
|
|
|
|
663,197
|
|
Total
assets
|
|
$
|
8,748,789
|
|
|
$
|
8,470,724
|
|
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
281,583
|
|
|
$
|
269,761
|
|
Accrued expenses and
other liabilities
|
|
|
462,032
|
|
|
|
490,253
|
|
Lease
liabilities
|
|
|
89,310
|
|
|
|
100,174
|
|
Income taxes
payable
|
|
|
3,012
|
|
|
|
—
|
|
Customer
deposits
|
|
|
380,724
|
|
|
|
412,092
|
|
Estimated development
liabilities
|
|
|
42,352
|
|
|
|
43,753
|
|
Senior notes,
net
|
|
|
1,817,457
|
|
|
|
1,816,303
|
|
Loans payable and other
borrowings
|
|
|
326,216
|
|
|
|
361,486
|
|
Revolving credit
facility borrowings
|
|
|
—
|
|
|
|
—
|
|
Mortgage warehouse
borrowings
|
|
|
249,898
|
|
|
|
306,072
|
|
Liabilities
attributable to consolidated real estate not owned
|
|
|
892
|
|
|
|
23,971
|
|
Total
liabilities
|
|
$
|
3,653,476
|
|
|
$
|
3,823,865
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
5,095,313
|
|
|
|
4,646,859
|
|
Total liabilities
and stockholders' equity
|
|
$
|
8,748,789
|
|
|
$
|
8,470,724
|
|
Homes Closed and
Home Closings Revenue, Net:
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
Homes
Closed
|
|
|
Home Closings
Revenue, Net
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
1,228
|
|
|
|
1,097
|
|
|
|
11.9
|
%
|
|
$
|
732,279
|
|
|
$
|
613,176
|
|
|
|
19.4
|
%
|
|
$
|
596
|
|
|
$
|
559
|
|
|
|
6.6
|
%
|
Central
|
|
|
936
|
|
|
|
778
|
|
|
|
20.3
|
|
|
|
612,630
|
|
|
|
457,006
|
|
|
|
34.1
|
|
|
|
655
|
|
|
|
587
|
|
|
|
11.6
|
|
West
|
|
|
961
|
|
|
|
1,157
|
|
|
|
(16.9)
|
|
|
|
651,838
|
|
|
|
812,838
|
|
|
|
(19.8)
|
|
|
|
678
|
|
|
|
703
|
|
|
|
(3.6)
|
|
Total
|
|
|
3,125
|
|
|
|
3,032
|
|
|
|
3.1
|
%
|
|
$
|
1,996,747
|
|
|
$
|
1,883,020
|
|
|
|
6.0
|
%
|
|
$
|
639
|
|
|
$
|
621
|
|
|
|
2.9
|
%
|
|
|
Six Months Ended
June 30,
|
|
|
|
Homes
Closed
|
|
|
Home Closings
Revenue, Net
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
2,232
|
|
|
|
2,034
|
|
|
|
9.7
|
%
|
|
|
1,333,890
|
|
|
|
1,119,172
|
|
|
|
19.2
|
%
|
|
$
|
598
|
|
|
$
|
550
|
|
|
|
8.7
|
%
|
Central
|
|
|
1,667
|
|
|
|
1,442
|
|
|
|
15.6
|
|
|
|
1,076,025
|
|
|
|
825,582
|
|
|
|
30.3
|
|
|
|
645
|
|
|
|
573
|
|
|
|
12.6
|
|
West
|
|
|
1,767
|
|
|
|
2,324
|
|
|
|
(24.0)
|
|
|
|
1,199,427
|
|
|
|
1,582,675
|
|
|
|
(24.2)
|
|
|
|
679
|
|
|
|
681
|
|
|
|
(0.3)
|
|
Total
|
|
|
5,666
|
|
|
|
5,800
|
|
|
|
(2.3)
|
%
|
|
$
|
3,609,342
|
|
|
$
|
3,527,429
|
|
|
|
2.3
|
%
|
|
$
|
637
|
|
|
$
|
608
|
|
|
|
4.8
|
%
|
Net Sales
Orders:
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
Net Sales
Orders
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
1,047
|
|
|
|
1,121
|
|
|
|
(6.6)
|
%
|
|
$
|
582,944
|
|
|
$
|
730,495
|
|
|
|
(20.2)
|
%
|
|
$
|
557
|
|
|
$
|
652
|
|
|
|
(14.6)
|
%
|
Central
|
|
|
808
|
|
|
|
642
|
|
|
|
25.9
|
|
|
|
489,142
|
|
|
$
|
443,146
|
|
|
|
10.4
|
|
|
|
605
|
|
|
|
690
|
|
|
|
(12.3)
|
|
West
|
|
|
1,168
|
|
|
|
791
|
|
|
|
47.7
|
|
|
|
782,046
|
|
|
$
|
610,932
|
|
|
|
28.0
|
|
|
|
670
|
|
|
|
772
|
|
|
|
(13.2)
|
|
Total
|
|
|
3,023
|
|
|
|
2,554
|
|
|
|
18.4
|
%
|
|
$
|
1,854,132
|
|
|
$
|
1,784,573
|
|
|
|
3.9
|
%
|
|
$
|
613
|
|
|
$
|
699
|
|
|
|
(12.3)
|
%
|
|
|
Six Months Ended
June 30,
|
|
|
|
Net Sales
Orders
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
2,126
|
|
|
|
2,148
|
|
|
|
(1.0)
|
%
|
|
$
|
1,227,463
|
|
|
$
|
1,336,705
|
|
|
|
(8.2)
|
%
|
|
$
|
577
|
|
|
$
|
622
|
|
|
|
(7.2)
|
%
|
Central
|
|
|
1,482
|
|
|
|
1,529
|
|
|
|
(3.1)
|
|
|
|
873,972
|
|
|
|
1,026,426
|
|
|
|
(14.9)
|
|
|
|
590
|
|
|
|
671
|
|
|
|
(12.1)
|
|
West
|
|
|
2,269
|
|
|
|
1,931
|
|
|
|
17.5
|
|
|
|
1,538,390
|
|
|
|
1,506,663
|
|
|
|
2.1
|
|
|
|
678
|
|
|
|
780
|
|
|
|
(13.1)
|
|
Total
|
|
|
5,877
|
|
|
|
5,608
|
|
|
|
4.8
|
%
|
|
$
|
3,639,825
|
|
|
$
|
3,869,794
|
|
|
|
(5.9)
|
%
|
|
$
|
619
|
|
|
$
|
690
|
|
|
|
(10.3)
|
%
|
Sales Order
Backlog:
|
|
|
|
|
|
As of
June 30,
|
|
|
|
Sold Homes in
Backlog
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
2,477
|
|
|
|
3,333
|
|
|
|
(25.7)
|
%
|
|
$
|
1,626,635
|
|
|
$
|
2,119,850
|
|
|
|
(23.3)
|
%
|
|
$
|
657
|
|
|
$
|
636
|
|
|
|
3.3
|
%
|
Central
|
|
|
1,532
|
|
|
|
2,874
|
|
|
|
(46.7)
|
|
|
|
1,009,441
|
|
|
$
|
1,948,678
|
|
|
|
(48.2)
|
|
|
|
659
|
|
|
|
678
|
|
|
|
(2.8)
|
|
West
|
|
|
2,156
|
|
|
|
2,715
|
|
|
|
(20.6)
|
|
|
|
1,458,395
|
|
|
$
|
2,030,972
|
|
|
|
(28.2)
|
|
|
|
676
|
|
|
|
748
|
|
|
|
(9.6)
|
|
Total
|
|
|
6,165
|
|
|
|
8,922
|
|
|
|
(30.9)
|
%
|
|
$
|
4,094,471
|
|
|
$
|
6,099,500
|
|
|
|
(32.9)
|
%
|
|
$
|
664
|
|
|
$
|
684
|
|
|
|
(2.9)
|
%
|
Ending Active
Selling Communities:
|
|
|
|
|
|
As of
June 30,
|
|
|
Change
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
East
|
|
|
103
|
|
|
|
117
|
|
|
|
(12.0)
|
%
|
Central
|
|
|
103
|
|
|
|
104
|
|
|
|
(1.0)
|
|
West
|
|
|
121
|
|
|
|
102
|
|
|
|
18.6
|
|
Total
|
|
|
327
|
|
|
|
323
|
|
|
|
1.2
|
%
|
Reconciliation of Non-GAAP Financial Measures
In addition to the results reported in accordance with
accounting principles generally accepted in the United States ("GAAP"), we provide our
investors with supplemental information relating to: (i) adjusted
net income and adjusted earnings per common share, (ii) adjusted
income before income taxes and related margin, (iii) adjusted home
closings gross margin; (iv) EBITDA and adjusted EBITDA and (v) net
homebuilding debt to capitalization ratio.
Adjusted net income, adjusted earnings per common share and
adjusted income before income taxes and related margin are non-GAAP
financial measures that reflect the net income/(loss) available to
the Company excluding, to the extent applicable in a given period,
the impact of inventory impairment charges, impairment of
investment in unconsolidated entities, pre-acquisition abandonment
charges, gains/losses on land transfers and extinguishment of debt,
net, and in the case of adjusted net income and adjusted earnings
per common share, the tax impact due to such items. EBITDA and
Adjusted EBITDA are non-GAAP financial measures that measure
performance by adjusting net income before allocation to
non-controlling interests to exclude, as applicable, interest
expense/(income), net, amortization of capitalized interest, income
taxes, depreciation and amortization (EBITDA), non-cash
compensation expense, if any, inventory impairment charges,
impairment of investment in unconsolidated entities,
pre-acquisition abandonment charges, gains/losses on land transfers
and extinguishment of debt, net. Net homebuilding debt to
capitalization ratio is a non-GAAP financial measure we calculate
by dividing (i) total debt, plus unamortized debt issuance
cost/(premium), net, and less mortgage warehouse borrowings, net of
unrestricted cash and cash equivalents ("net homebuilding debt"),,
by (ii) total capitalization (the sum of net homebuilding debt and
total stockholders' equity). Adjusted home closings gross margin is
a non-GAAP financial measure based on GAAP home closings gross
margin (which is inclusive of capitalized interest), excluding
inventory impairment charges.
Management uses these non-GAAP financial measures to evaluate
our performance on a consolidated basis, as well as the performance
of our regions, and to set targets for performance-based
compensation. We also use the ratio of net homebuilding debt
to total capitalization as an indicator of overall leverage and to
evaluate our performance against other companies in the
homebuilding industry. In the future, we may include
additional adjustments in the above-described non-GAAP financial
measures to the extent we deem them appropriate and useful to
management and investors.
We believe that adjusted net income, adjusted earnings per
common share, adjusted income before income taxes and related
margin, as well as EBITDA and adjusted EBITDA, are useful for
investors in order to allow them to evaluate our operations without
the effects of various items we do not believe are characteristic
of our ongoing operations or performance and also because such
metrics assist both investors and management in analyzing and
benchmarking the performance and value of our business. Adjusted
EBITDA also provides an indicator of general economic performance
that is not affected by fluctuations in interest rates or effective
tax rates, levels of depreciation or amortization, or unusual
items. Because we use the ratio of net homebuilding debt to total
capitalization to evaluate our performance against other companies
in the homebuilding industry, we believe this measure is also
relevant and useful to investors for that reason. We believe that
adjusted home closings gross margin is useful to investors because
it allows investors to evaluate the performance of our homebuilding
operations without the varying effects of items or transactions we
do not believe are characteristic of our ongoing operations or
performance.
These non-GAAP financial measures should be considered in
addition to, rather than as a substitute for, the comparable U.S.
GAAP financial measures of our operating performance or liquidity.
Although other companies in the homebuilding industry may report
similar information, their definitions may differ. We urge
investors to understand the methods used by other companies to
calculate similarly-titled non-GAAP financial measures before
comparing their measures to ours.
A reconciliation of (i) adjusted net income and adjusted
earnings per common share, (ii) adjusted income before income taxes
and related margin, (iii) EBITDA and adjusted EBITDA and (iv)
net homebuilding debt to capitalization ratio to the comparable
GAAP measures is presented below. Because the company did not
experience any material adjustments applicable to adjusted home
closings gross margin during the periods presented that would cause
such measure to differ from the comparable GAAP measure such
measure has not been separately presented herein.
Adjusted Net Income
and Adjusted Earnings Per Common Share
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
(Dollars in
thousands, except per share data)
|
|
2023
|
|
|
2022
|
|
Net income available to
TMHC
|
|
$
|
234,602
|
|
|
$
|
290,987
|
|
Gain on land
transfers
|
|
|
—
|
|
|
|
(13,700)
|
|
Gain on extinguishment
of debt, net
|
|
|
—
|
|
|
|
(13,471)
|
|
Tax impact due to above
non-GAAP reconciling items
|
|
|
—
|
|
|
|
6,749
|
|
Adjusted net
income
|
|
$
|
234,602
|
|
|
$
|
270,565
|
|
Basic weighted average
number of shares
|
|
|
109,210
|
|
|
|
117,932
|
|
Adjusted earnings
per common share - Basic
|
|
$
|
2.15
|
|
|
$
|
2.29
|
|
Diluted weighted
average number of shares
|
|
|
110,856
|
|
|
|
118,931
|
|
Adjusted earnings
per common share - Diluted
|
|
$
|
2.12
|
|
|
$
|
2.27
|
|
Adjusted Income
Before Income Taxes and Related Margin
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
Income before income
taxes
|
|
$
|
315,759
|
|
|
$
|
391,597
|
|
Gain on land
transfers
|
|
|
—
|
|
|
|
(13,700)
|
|
Gain on extinguishment
of debt, net
|
|
|
—
|
|
|
|
(13,471)
|
|
Adjusted income
before income taxes
|
|
$
|
315,759
|
|
|
$
|
364,426
|
|
Total
revenue
|
|
$
|
2,060,564
|
|
|
$
|
1,995,023
|
|
Income before income
taxes margin
|
|
|
15.3
|
%
|
|
|
19.6
|
%
|
Adjusted income
before income taxes margin
|
|
|
15.3
|
%
|
|
|
18.3
|
%
|
EBITDA and Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
Net income before
allocation to non-controlling interests
|
|
$
|
234,905
|
|
|
$
|
293,154
|
|
Interest
(income)/expense, net
|
|
|
(5,120)
|
|
|
|
5,189
|
|
Amortization of
capitalized interest
|
|
|
37,352
|
|
|
|
33,420
|
|
Income tax
provision
|
|
|
80,854
|
|
|
|
98,443
|
|
Depreciation and
amortization
|
|
|
1,540
|
|
|
|
1,442
|
|
EBITDA
|
|
$
|
349,531
|
|
|
$
|
431,648
|
|
Non-cash compensation
expense
|
|
|
5,271
|
|
|
|
5,278
|
|
Gain on land
transfers
|
|
|
—
|
|
|
|
(13,700)
|
|
Gain on extinguishment
of debt, net
|
|
|
—
|
|
|
|
(13,471)
|
|
Adjusted
EBITDA
|
|
$
|
354,802
|
|
|
$
|
409,755
|
|
Total
revenue
|
|
$
|
2,060,564
|
|
|
$
|
1,995,023
|
|
Net income before
allocation to non-controlling interests as a percentage of
total revenue
|
|
|
11.4
|
%
|
|
|
14.7
|
%
|
EBITDA as a
percentage of total revenue
|
|
|
17.0
|
%
|
|
|
21.6
|
%
|
Adjusted EBITDA as a
percentage of total revenue
|
|
|
17.2
|
%
|
|
|
20.5
|
%
|
Debt to
Capitalization Ratios Reconciliation
|
|
|
|
($ in
thousands)
|
|
As of
June 30, 2023
|
|
|
As of
March 31, 2023
|
|
|
As of
June 30, 2022
|
|
Total debt
|
|
$
|
2,393,571
|
|
|
$
|
2,301,878
|
|
|
$
|
2,950,744
|
|
Plus: unamortized debt
issuance cost, net
|
|
|
9,613
|
|
|
|
10,193
|
|
|
|
11,891
|
|
Less: mortgage
warehouse borrowings
|
|
$
|
(249,898)
|
|
|
|
(146,334)
|
|
|
|
(179,555)
|
|
Total homebuilding
debt
|
|
$
|
2,153,286
|
|
|
$
|
2,165,737
|
|
|
$
|
2,783,080
|
|
Total equity
|
|
|
5,095,313
|
|
|
|
4,846,546
|
|
|
|
4,193,895
|
|
Total
capitalization
|
|
$
|
7,248,599
|
|
|
$
|
7,012,283
|
|
|
$
|
6,976,975
|
|
Total homebuilding
debt to capitalization ratio
|
|
|
29.7
|
%
|
|
|
30.9
|
%
|
|
|
39.9
|
%
|
Total homebuilding
debt
|
|
$
|
2,153,286
|
|
|
$
|
2,165,737
|
|
|
$
|
2,783,080
|
|
Less: cash and cash
equivalents
|
|
|
(1,227,264)
|
|
|
|
(877,717)
|
|
|
|
(378,340)
|
|
Net homebuilding
debt
|
|
$
|
926,022
|
|
|
$
|
1,288,020
|
|
|
$
|
2,404,740
|
|
Total equity
|
|
|
5,095,313
|
|
|
|
4,846,546
|
|
|
|
4,193,895
|
|
Total
capitalization
|
|
$
|
6,021,335
|
|
|
$
|
6,134,566
|
|
|
$
|
6,598,635
|
|
Net homebuilding
debt to capitalization ratio
|
|
|
15.4
|
%
|
|
|
21.0
|
%
|
|
|
36.4
|
%
|
CONTACT:
Mackenzie
Aron, VP Investor Relations
(480) 734-2060
investor@taylormorrison.com
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SOURCE Taylor Morrison