Taylor Morrison Home Corp Files 2023 Annual Report (10-K)

Ticker: TMHC · Form: 10-K · Filed: Feb 21, 2024 · CIK: 1562476

Sentiment: neutral

Topics: 10-K, Taylor Morrison, Homebuilding, Financials, Senior Notes

TL;DR

<b>Taylor Morrison Home Corp filed its 2023 10-K, detailing financial performance and segment operations.</b>

AI Summary

Taylor Morrison Home Corp (TMHC) filed a Annual Report (10-K) with the SEC on February 21, 2024. Filed 10-K for the fiscal year ending December 31, 2023. Includes financial data for the fiscal year 2023. Details on Senior Notes, including 2027, 2030, and 2032 maturities. Information on operating segments: Homebuilding (East and West) and Mortgage Operations. Disclosure of fair value measurements for financial instruments.

Why It Matters

For investors and stakeholders tracking Taylor Morrison Home Corp, this filing contains several important signals. The 10-K filing provides a comprehensive overview of the company's financial health and operational performance for the fiscal year 2023, crucial for investors assessing its stability and growth prospects. Specific details on debt instruments like Senior Notes and credit facilities offer insight into the company's leverage and financing strategies.

Risk Assessment

Risk Level: medium — Taylor Morrison Home Corp shows moderate risk based on this filing. The company operates in the cyclical homebuilding industry, which is sensitive to economic downturns, interest rate fluctuations, and consumer confidence, as evidenced by the various disclosures related to debt and financial instruments.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Taylor Morrison's exposure to interest rate changes and housing market volatility.

Key Numbers

Key Players & Entities

FAQ

When did Taylor Morrison Home Corp file this 10-K?

Taylor Morrison Home Corp filed this Annual Report (10-K) with the SEC on February 21, 2024.

What is a 10-K filing?

A 10-K is a comprehensive annual financial report required by the SEC, covering audited financials, business operations, risk factors, and management discussion. This particular 10-K was filed by Taylor Morrison Home Corp (TMHC).

Where can I read the original 10-K filing from Taylor Morrison Home Corp?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by Taylor Morrison Home Corp.

What are the key takeaways from Taylor Morrison Home Corp's 10-K?

Taylor Morrison Home Corp filed this 10-K on February 21, 2024. Key takeaways: Filed 10-K for the fiscal year ending December 31, 2023.. Includes financial data for the fiscal year 2023.. Details on Senior Notes, including 2027, 2030, and 2032 maturities..

Is Taylor Morrison Home Corp a risky investment based on this filing?

Based on this 10-K, Taylor Morrison Home Corp presents a moderate-risk profile. The company operates in the cyclical homebuilding industry, which is sensitive to economic downturns, interest rate fluctuations, and consumer confidence, as evidenced by the various disclosures related to debt and financial instruments.

What should investors do after reading Taylor Morrison Home Corp's 10-K?

Review the detailed financial statements and risk factors in the 10-K to understand Taylor Morrison's exposure to interest rate changes and housing market volatility. The overall sentiment from this filing is neutral.

Risk Factors

Key Dates

Filing Stats: 4,346 words · 17 min read · ~14 pages · Grade level 16.5 · Accepted 2024-02-21 15:26:24

Key Financial Figures

Filing Documents

Business

Business 16 Item 1A.

Risk Factors

Risk Factors 36 Item 1B. Unresolved Staff Comments 36 Item 1C. Cybersecurity 37 Item 2.

Properties

Properties 37 Item 3.

Legal Proceedings

Legal Proceedings 37 Item 4. Mine Safety Disclosures PART II 39 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 40 Item 6. [Reserved] 41 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 61 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 62 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 96 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 96 Item 9A.

Controls and Procedures

Controls and Procedures 98 Item 9B. Other Information 98 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III 100 Item 10. Directors, Executive Officers and Corporate Governance 100 Item 11.

Executive Compensation

Executive Compensation 100 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 101 Item 13. Certain Relationships and Related Transactions, and Director Independence 101 Item 14. Principal Accountant Fees and Services PART IV 103 Item 15. Exhibits and Financial Statement Schedules 106 Item 16. Form 10-K Summary 107

Signatures

Signatures TAYLOR MORRISON HOME CORPORATION 10-K i Available Information Information about our company and communities is provided on our website at www.taylormorrison.com (the "Taylor Morrison website"). From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding our company is routinely posted and accessible on our website. In addition, you may automatically receive e-mail alerts and other information about our company by enrolling your e-mail address by visiting the "E-mail Alerts" section of the "Investor Relations" page on our website. The information contained on or accessible through the Taylor Morrison website is not considered part of this Annual Report on Form 10-K ("Annual Report"). Our periodic and current reports, including any amendments, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available, free of charge, on our Taylor Morrison website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission ("SEC"). In addition to our SEC filings, our corporate governance documents, including our Code of Conduct and Corporate Governance Guidelines are available on the "Investor Relations" page of our Taylor Morrison website under "ESG-Governance Documents." To the extent required by the SEC's rules and regulations, we intend to post amendments to or waivers from, if any, provisions of our Code of Conduct (to the extent applicable to our directors, principal executive officer, principal financial officer and principal accounting officer) at this location on the Taylor Morrison website. Our stockholders may also obtain these documents in paper format free of charge upon request made to our Investor Relations department. We were incorporated in Delaware in November 2012. Our principal executive offices are located a

Forward-Looking Statements

Forward-Looking Statements Certain information included in this Annual Report or in other materials we have filed or will file with the SEC (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. You can identify these statements by the fact that they do not relate to matters of strictly historical or factual nature and generally discuss or relate to estimates or other expectations regarding future events. They contain words such as, but not limited to, "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "may," "will," "can," "could," "might," "should" and other words or phrases of similar meaning in connection with any discussion of our strategy or future operating or financial performance. Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this Annual Report on Form 10-K, including those described below and under the heading "Risk Factors" in Part I, Item 1A and below under the heading "Summary of Material Risks". TAYLOR MORRISON HOME CORPORATION 10-K 1 Summary Of Material Risks As you read this Annual Report and other reports or public statements, you should understand that statements made herein are not guarantees of performance or results. They are subject to known and unknown risks, uncertainties and assumptions including those described under the heading "Risk Factors" in

Business

Business 16 Item 1A.

Risk Factors

Risk Factors 36 Item 1B. Unresolved Staff Comments 36 Item 1C. Cybersecurity 37 Item 2.

Properties

Properties 37 Item 3.

Legal Proceedings

Legal Proceedings 37 Item 4. Mine Safety Disclosures

| B USINESS

ITEM 1 | B USINESS General Overview Taylor Morrison Home Corporation ("TMHC") is a leading national land developer and homebuilder in the United States and has been named America's Most Trusted Homebuilder for nine consecutive years (awarded by Lifestory Research). We have expanded our market footprint and product positioning through our homebuilder acquisitions and smart organic growth and serve a broad range of consumers in the entry-level, move-up and resort lifestyle segments across the country. We are also a land developer, with a portfolio of lifestyle and master-planned communities with single and multi-family detached and attached homes. With each of our consumer groups seeking varying levels of home specification and affordability considerations, we have a dynamic and flexible operating strategy and product offering that allows us to best serve each of these segments and respond quickly to changing market conditions, community by community to maximize our financial performance. We operate under various brand names including Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade. We also leverage our core homebuilding and land development expertise in alternative ways by operating the following strategic real estate related businesses: We provide financial services to customers through our wholly owned mortgage subsidiary, Taylor Morrison Home Funding, Inc. ("TMHF"), title insurance and closing settlement services through our title company, Inspired Title Services, LLC ("Inspired Title"), and homeowner's insurance policies through our insurance agency, Taylor Morrison Insurance Services, LLC ("TMIS"). We operate a "Build-to-Rent" homebuilding business under the brand name Yardly. We serve as a land acquirer, developer, and homebuilder in addition to leasing and management functions. Through a wholly-owned subsidiary, we also develop and construct multi-use properties consisting of commercial space, retail, and multi-family pr

| BUSINESS

ITEM 1 | BUSINESS Our business is organized into multiple homebuilding operating components and a financial services component. Our homebuilding operating components are presented below. Business Strategy and Operations Our short and long-term priorities and strategies include the following: Short-term priorities strategic land initiatives to mitigate risk and enhance capital efficiency; process and product optimization to promote operational effectiveness; product innovation and standardization to drive operating efficiencies and cost reduction; balancing sales pace and price on a community-by-community basis to maintain targeted sales volume; TAYLOR MORRISON HOME CORPORATION 10-K 5

| BUSINESS

ITEM 1 | BUSINESS balancing our inventory of homes under construction and our pace of new construction starts; optimizing, at a community level, the intentional balance of to-be-built and quick-move-in homes; ability to swiftly adjust our pricing, discounts/incentives, or financial services product offerings based on our customers' needs; continuing to enhance the customer experience; and further scaling our Build-to-Rent operations to meet the need for rental households. Long-term strategies opportunistic land acquisition of prime assets in core locations; building distinctive communities driven by consumer preferences; resulting in a balanced portfolio which can withstand multiple economic cycles; consistent delivery of competitive financial metrics; innovative digital marketing capabilities; maintaining a cost-efficient operating structure and culture; and disciplined capital allocation with a focus on strong liquidity and balance sheet stewardship. To support our business strategies, we maintain a balanced capital allocation approach designed to maximize long-term shareholder value. We operate our business to capitalize on market dynamics while mitigating risks from economic downturns as we recognize the cyclical nature of the housing industry. This capital allocation strategy is built on the following pillars: reinvest in core homebuilding operations; seek additional growth opportunities through mergers, acquisitions, organic growth into adjacent markets, opportunistic land investment and joint venture strategies; optimize debt leverage; reinvest in ancillary business opportunities within the industry; and returning capital to shareholders (i.e. share repurchase programs). Land and Development Strategies Prudent and disciplined acquisition of land in core locations and thoughtful community development have always been pillars of our long-term strategy. We pride ourselves on our responsible land stewardship. While we focus

| BUSINESS

ITEM 1 | BUSINESS In order to maximize our risk-adjusted return, the allocation of capital for land investment is performed as part of a centralized process with a disciplined approach to overall portfolio management. Our portfolio investment committee of senior executives meets on a regular basis. Annually, our operating divisions prepare a strategic plan for their respective geographies. Macro and micro indices, including but not limited to employment, housing starts, new home sales, re-sales and foreclosures, along with market related shifts in competition, land availability and consumer preferences, are carefully analyzed to determine our land and homebuilding strategy. Supply and demand are analyzed on a consumer segment and submarket basis to ensure land investment is targeted appropriately. Our long-term plan is compared on an ongoing basis to current conditions in the marketplace as they evolve and is adjusted to the extent necessary. Strategic decisions regarding community positioning are included in the decision making and underwriting process and are made in consultation with senior executives of our management team. Consistent with our focus on capital-efficient growth, we continue to successfully increase the percentage of our total homebuilding lots controlled via options and other off-balance sheet arrangements. These arrangements include seller financing, joint ventures and land banking opportunities. We evaluate each land acquisition for the optimal financing arrangement based on projected cost of capital, duration and expected returns in order to secure prime assets, minimize risk and maximize returns. As a party to various land banking arrangements, we acquire land in staged takedowns, which limits risk and defers cash outflows. These third-party entities use equity contributions from their owners and/or incur debt to finance the acquisition and development of the land. Such lots are included in our controlled lots for the year ended Decembe

| BUSINESS

ITEM 1 | BUSINESS Actual life cycle will vary based on the size of the community, the sales absorption rate, and whether we purchased the property as raw land or as developed lots. The construction time for our homes varies from project to project depending on geographic region, the time of year, the size and complexity of construction, the governmental approval processes, local labor availability, availability of materials and supplies, weather, and other factors. Our dedication to service defines our customer experience and acknowledges homeowners' suggestions to incorporate style, quality and sustainability into every community we develop. We offer a range of award-winning and innovative designs with a number of features such as single-story, multi-story, multi-family, higher density living, ranch style living, split bedroom plans and first floor master bedroom suites to appeal to diverse buyer needs. We engage architectural firms and utilize internal architectural resources to develop and augment existing plans in order to ensure that our homes reflect current and local consumer tastes. We engineer our homes for energy-efficiency and cost savings to reduce the impact on the environment. Our TM LiveWell program provides homeowners with a robust suite of healthy home features and technologies focused on providing healthier air, cleaner water, and safer paint. Supply Chain Based on local market practices, we either directly, or indirectly through our subcontractors, purchase drywall, cement, steel, lumber, insulation and the other building materials necessary to construct a home. While these materials are generally widely available from a variety of sources, from time to time we experience material shortages on a localized basis which can substantially increase the price for such materials and our construction process can be slowed. Our construction, land and purchasing teams coordinate subcontracting services and supervise all aspects of construction w

| BUSINESS

ITEM 1 | BUSINESS Sales and Marketing We are committed to continuously enhancing our customer experience, including how we target and attract our consumers. Our marketing program utilizes a balanced approach of corporate support and local expertise to attract potential homebuyers in a focused, efficient, and cost-effective manner. Our goal is to identify the preferences of our customers and demographic groups and offer them innovative, well-designed, quality homes that are affordable for our customers, and efficient and profitable for us to build. We strive to maintain product and price level differentiation through continual market and customer research. We also use key indicators of market-specific supply and demand characteristics to determine the preferences of our customer base and to perform an optimal matching of consumer groups, product and community design, and community location. The central element of our marketing platform is our web presence at www.taylormorrison.com which houses our suite of home-shopping digital tools placing innovation, transparency, and consumer ease at the forefront. We continually test our online shopping experience with home shoppers to refine our online shopping experience. Our full suite of online shopping products includes: an artificial intelligence enhanced chatbot to help provide information, engage the shopper, and leads; online self-service appointments to help customers schedule an appointment with ease and convenience; self-guided tours to enable customers to tour our homes privately, safely, and outside of normal business hours; and online home reservations, which allow shoppers to get an initial price based on their selection of lot, floor plan, exterior, and in some markets structural options, and to reserve their desired home configuration digitally. These tools have proved to be instrumental to our online sales success. Shoppers can seamlessly continue their experience by visiting one of our quick-move-in

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