Taylor Morrison Home Corp Files Q2 2024 10-Q

Ticker: TMHC · Form: 10-Q · Filed: Jul 24, 2024 · CIK: 1562476

Sentiment: neutral

Topics: 10-Q, real-estate, housing

TL;DR

TMHC Q2 10-Q filed. Financials for home and land sales out.

AI Summary

Taylor Morrison Home Corp filed its 10-Q for the period ending June 30, 2024. The company reported its financial performance across various segments including Home Sales, Land Sales, and Financial Services. Specific financial figures and operational details for the second quarter and the first half of 2024 are detailed within the filing.

Why It Matters

This filing provides investors with the latest financial performance data for Taylor Morrison Home Corp, crucial for understanding the company's health and future prospects in the housing market.

Risk Assessment

Risk Level: medium — The housing market is subject to economic fluctuations, interest rate changes, and regulatory shifts, all of which can impact Taylor Morrison's performance.

Key Numbers

Key Players & Entities

FAQ

What were the key financial highlights for Taylor Morrison Home Corp in the second quarter of 2024?

The 10-Q filing for the period ending June 30, 2024, details the financial performance of Taylor Morrison Home Corp across its various business segments, including Home Sales, Land Sales, and Financial Services, but specific dollar amounts for revenue or profit are not provided in the header information.

What is the company's primary business as indicated by the SIC code?

Taylor Morrison Home Corp's Standard Industrial Classification (SIC) code is 1531, which corresponds to 'OPERATIVE BUILDERS'.

When is Taylor Morrison Home Corp's fiscal year end?

Taylor Morrison Home Corp's fiscal year ends on December 31st (1231).

What is the company's SEC file number?

The SEC file number for Taylor Morrison Home Corp is 001-35873.

Where is Taylor Morrison Home Corp headquartered?

Taylor Morrison Home Corp's business and mailing address is 4900 N. SCOTTSDALE ROAD, SUITE 2000, SCOTTSDALE, AZ 85251.

Filing Stats: 4,564 words · 18 min read · ~15 pages · Grade level 17 · Accepted 2024-07-24 16:46:49

Key Financial Figures

Filing Documents

Financial Statements of Taylor Morrison Home Corporation (Unaudited)

Financial Statements of Taylor Morrison Home Corporation (Unaudited) 2 Condensed Consolidated Balance Sheets as of June 30 , 2024 and December 31, 2023 3 Condensed Consolidated Statements of Operations for the three and six months ended June 30 , 2024 and 2023 4 Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30 , 2024 and 2023 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 7 Notes to the Unaudited Condensed Consolidated Financial Statements 22 ITEM 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 36 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 37 ITEM 4.

Controls and Procedures

Controls and Procedures Part II OTHER INFORMATION 38 ITEM 1.

Legal Proceedings

Legal Proceedings 38 ITEM 1A.

Risk Factors

Risk Factors 39 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 39 ITEM 3. Defaults Upon Senior Securities 39 ITEM 4. Mine Safety Disclosures 39 ITEM 5. Other Information 40 ITEM 6. Exhibits 41

SIGNATURES

SIGNATURES TAYLOR MORRISON HOME CORPORATION 10-Q 1 Table of Contents

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TAYLOR MORRISON HOME CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, unaudited) June 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 246,845 $ 798,568 Restricted cash 1,928 8,531 Total cash 248,773 807,099 Real estate inventory: Owned inventory 6,151,776 5,473,828 Consolidated real estate not owned 134,700 71,618 Total real estate inventory 6,286,476 5,545,446 Land deposits 204,551 203,217 Mortgage loans held for sale 313,026 193,344 Lease right of use assets 71,932 75,203 Prepaid expenses and other assets, net 330,093 290,925 Other receivables, net 214,919 184,518 Investments in unconsolidated entities 381,571 346,192 Deferred tax assets, net 67,825 67,825 Property and equipment, net 316,706 295,121 Goodwill 663,197 663,197 Total assets $ 9,099,069 $ 8,672,087 Liabilities Accounts payable $ 310,724 $ 263,481 Accrued expenses and other liabilities 518,541 549,074 Lease liabilities 82,059 84,999 Customer deposits 349,066 326,087 Estimated development liabilities 27,416 27,440 Senior notes, net 1,469,574 1,468,695 Loans payable and other borrowings 404,242 394,943 Revolving credit facility borrowings — — Mortgage warehouse borrowings 276,205 153,464 Liabilities attributable to consolidated real estate not owned 134,700 71,618 Total liabilities $ 3,572,527 $ 3,339,801 COMMITMENTS AND CONTINGENCIES (Note 13) Stockholders' equity Total stockholders' equity 5,526,542 5,332,286 Total liabilities and stockholders' equity $ 9,099,069 $ 8,672,087 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements TAYLOR MORRISON HOME CORPORATION 10-Q 2 Table of Contents

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TAYLOR MORRISON HOME CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Home closings revenue, net $ 1,920,127 $ 1,996,747 $ 3,556,382 $ 3,609,342 Land closings revenue 13,234 12,628 20,459 17,148 Financial services revenue 48,916 41,914 95,875 77,063 Amenity and other revenue 8,776 9,275 18,089 18,868 Total revenue 1,991,053 2,060,564 3,690,805 3,722,421 Cost of home closings 1,462,706 1,514,237 2,705,915 2,741,750 Cost of land closings 18,703 12,703 23,905 17,048 Financial services expenses 28,106 25,342 53,249 47,490 Amenity and other expenses 9,250 8,597 18,603 16,882 Total cost of revenue 1,518,765 1,560,879 2,801,672 2,823,170 Gross margin 472,288 499,685 889,133 899,251 Sales, commissions and other marketing costs 113,956 113,034 216,556 205,794 General and administrative expenses 82,779 70,649 150,343 136,910 Net income from unconsolidated entities ( 2,628 ) ( 3,186 ) ( 5,379 ) ( 5,115 ) Interest expense/(income), net 4,087 ( 5,120 ) 4,044 ( 6,231 ) Other expense, net 6,877 8,549 7,472 3,715 Income before income taxes 267,217 315,759 516,097 564,178 Income tax provision 67,303 80,854 125,022 138,045 Net income before allocation to non-controlling interests 199,914 234,905 391,075 426,133 Net income attributable to non-controlling interests ( 454 ) ( 303 ) ( 1,345 ) ( 480 ) Net income $ 199,460 $ 234,602 $ 389,730 $ 425,653 Earnings per common share: Basic $ 1.89 $ 2.15 $ 3.68 $ 3.91 Diluted $ 1.86 $ 2.12 $ 3.61 $ 3.85 Weighted average number of shares of common stock: Basic 105,500 109,210 105,979 108,822 Diluted 107,249 110,856 107,961 110,466 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements TAYLOR MORRISON HOME CORPORATION 10-Q 3 Table of Contents

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TAYLOR MORRISON HOME CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands, except share data, unaudited) For the three months ended June 30, 2024 Common Stock Additional Paid-in Capital Treasury Stock Stockholders' Equity Shares Amount Amount Shares Amount Retained Earnings Accumulated Other Comprehensive Income Non- Controlling Interests Total Stockholders' Equity Balance — March 31, 2024 106,059,917 $ 1 $ 3,063,224 55,703,364 $ ( 1,356,746 ) $ 3,700,814 $ 896 $ 17,979 $ 5,426,168 Net income — — — — — 199,460 — 454 199,914 Exercise of stock options and issuance of restricted stock units, net (1) 69,694 — 1,425 — — — — — 1,425 Repurchase of common stock (2) ( 1,703,803 ) — — 1,703,803 ( 106,870 ) — — — ( 106,870 ) Stock compensation expense — — 6,072 — — — — — 6,072 Distributions to non-controlling interests of consolidated joint ventures — — — — — — — ( 167 ) ( 167 ) Balance – June 30, 2024 104,425,808 $ 1 $ 3,070,721 57,407,167 $ ( 1,463,616 ) $ 3,900,274 $ 896 $ 18,266 $ 5,526,542 (1) Dollar amount includes $ 1.5 million of stock options exercised netted with the value of shares withheld for taxes on the issuance of restricted stock units. (2) Dollar amount includes $ 50.0 million of Accelerated Share Repurchases and an incremental amount related to the 1% excise tax on share repurchases. For the three months ended June 30, 2023 Common Stock Additional Paid-in Capital Treasury Stock Stockholders' Equity Shares Amount Amount Shares Amount Retained Earnings Accumulated Other Comprehensive Income Non- Controlling Interests Total Stockholders' Equity Balance - March 31, 2023 109,034,112 $ 1 $ 3,037,515 51,506,248 $ ( 1,140,706 ) $ 2,932,666 $ 359 $ 16,711 4,846,546 Net income — — — — — 234,602 — 303 234,905 Exercise of stock options and issuance of restricted stock units, net (1) 409,672 — 8,591 — — — — — 8,591 Stock compensation expense — — 5,271 — — — — — 5,271 Balance –

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS For the six months ended June 30, 2024 Common Stock Additional Paid-in Capital Treasury Stock Stockholders' Equity Shares Amount Amount Shares Amount Retained Earnings Accumulated Other Comprehensive Income Non- Controlling Interest Total Stockholders' Equity Balance – December 31, 2023 106,917,636 $ 1 $ 3,068,597 54,211,879 $ ( 1,265,097 ) $ 3,510,544 $ 896 $ 17,345 $ 5,332,286 Net income — — — — — 389,730 — 1,345 391,075 Exercise of stock options and issuance of restricted stock units, net (1) 703,460 — ( 9,431 ) — — — — — ( 9,431 ) Repurchase of common stock (2) ( 3,195,288 ) — — 3,195,288 ( 198,519 ) — — — ( 198,519 ) Stock compensation expense — — 11,555 — — — — — 11,555 Distributions to non-controlling interests of consolidated joint ventures — — — — — — — ( 424 ) ( 424 ) Balance – June 30, 2024 104,425,808 $ 1 $ 3,070,721 57,407,167 $ ( 1,463,616 ) $ 3,900,274 $ 896 $ 18,266 $ 5,526,542 (1) Dollar amount includes $ 5.5 million of stock options exercised netted with the value of shares withheld for taxes on the issuance of restricted stock units . (2) Dollar amount includes $ 100.0 million of Accelerated Share Repurchases and an incremental amount related to the 1% excise tax on share repurchases. For the six months ended June 30, 2023 Common Stock Additional Paid-in Capital Treasury Stock Stockholders' Equity Shares Amount Amount Shares Amount Retained Earnings Accumulated Other Comprehensive Income Non- controlling Interest Total Stockholders' Equity Balance – December 31, 2022 107,995,262 $ 1 $ 3,025,489 51,396,923 $ ( 1,137,138 ) $ 2,741,615 $ 359 $ 16,533 $ 4,646,859 Net income — — — — — 425,653 — 480 426,133 Exercise of stock options and issuance of restricted stock units, net (1) 1,557,847 — 13,084 — — — — — 13,084 Repurchase of common stock ( 109,325 ) — — 109,325 ( 3,568 ) — — — ( 3,568 ) Stock compensation expense — — 12,804 — — — — — 12,804 Changes in non-controlling interests of consolida

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TAYLOR MORRISON HOME CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) Six Months Ended June 30, 2024 2023 Cash Flows from Operating Activities Net income before allocation to non-controlling interests $ 391,075 $ 426,133 Adjustments to reconcile net income to net cash (used in)/provided by operating activities: Net income from unconsolidated entities ( 5,379 ) ( 5,115 ) Stock compensation expense 11,555 12,804 Distributions of earnings from unconsolidated entities 9,866 5,534 Depreciation and amortization 21,581 14,478 Operating lease expense 11,505 13,512 Debt issuance costs amortization 1,482 1,744 Inventory impairments 2,325 — Land held for sale write-down 6,782 — Changes in operating assets and liabilities: Real estate inventory and land deposits ( 688,389 ) 169,462 Mortgage loans held for sale, prepaid expenses and other assets ( 223,813 ) 46,618 Customer deposits 22,979 ( 31,368 ) Accounts payable, accrued expenses and other liabilities 74,372 ( 49,703 ) Income taxes payable — 3,012 Net cash (used in)/provided by operating activities $ ( 364,059 ) $ 607,111 Cash Flows from Investing Activities: Purchase of property and equipment ( 17,441 ) ( 21,045 ) Distributions of capital from unconsolidated entities 5,161 350 Investments of capital into unconsolidated entities ( 45,028 ) ( 24,134 ) Net cash used in investing activities $ ( 57,308 ) $ ( 44,829 ) Cash Flows from Financing Activities Increase in loans payable and other borrowings — 2,426 Repayments on loans payable and other borrowings ( 52,093 ) ( 15,346 ) Borrowings on mortgage warehouse facilities 1,608,895 1,503,098 Repayments on mortgage warehouse facilities ( 1,486,154 ) ( 1,559,272 ) Changes in stock option exercises and issuance of restricted stock units, net ( 9,431 ) 13,084 Payment of principal portion of finance lease ( 1,358 ) ( 1,310 ) Repurchase of common stock, net ( 196,394 ) ( 3,568

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS TAYLOR MORRISON HOME CORPORATION NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS Description of the Business — Taylor Morrison Home Corporation ("TMHC"), through its subsidiaries (together with TMHC referred to herein as "we," "our," "the Company" and "us"), owns and operates a residential homebuilding business and is a land developer. We operate in the states of Arizona, California, Colorado, Florida, Georgia, Nevada, North and South Carolina, Oregon, Texas, and Washington. We also expanded our footprint into the Indianapolis market during the second quarter of 2024 when we acquired the assets of Pyatt Builders, a privately-held homebuilder in Indiana. We provide an assortment of homes across a wide range of price points to appeal to an array of consumer groups. We design, build and sell single and multi-family detached and attached homes in traditionally high growth markets for entry level, move-up, and resort- lifestyle buyers. We are the general contractors for all real estate projects and engage subcontractors for home construction and land development. Our homebuilding segments operate under various brand names including Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade. We also have a "Build-to-Rent" homebuilding business which operates under the Yardly brand name. In addition, we develop and construct multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand. We also have operations which provide financial services to customers through our wholly owned mortgage subsidiary, Taylor Morrison Home Funding, Inc. ("TMHF"), title services through our wholly owned title services subsidiary, Inspired Title Services, LLC ("Inspired Title"), and homeowner's insurance policies through our insurance agency, Taylor Morrison Insurance Services, LLC ("TMIS"). Our business is organized into multiple homebuilding operating compo

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS We capitalize qualifying interest costs to inventory during the development and construction periods. Capitalized interest is charged to Cost of home closings when the related inventory is charged to Cost of home closings. We assess the recoverability of our inventory in accordance with the provisions of ASC Topic 360, Property, Plant, and Equipment . We review our real estate inventory for indicators of impairment on a community-level basis during each reporting period. If indicators of impairment are present for a community, an undiscounted cash flow analysis is generally prepared in order to determine if the carrying value of the assets in that community exceeds the estimated undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, the assets are potentially impaired, requiring a fair value analysis. Our determination of fair value is primarily based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. However, fair value can be determined through other methods, such as appraisals, contractual purchase offers, and other third party opinions of value. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. For the three and six months ended June 30, 2024, we recorded $ 2.3 million of inventory impairment relating to one of our communities in our East reporting segment. For the three and six months ended June 30, 2023, we recorded no impairment charges. Inventory impairments are recorded to Cost of home closings on the Condensed consolidated statements of operations. In certain cases, we may elect to cease development and/or marketing of an existing community if we believe the economic performance of the community would be maximized by deferring development for a period of time to

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Investments in Consolidated and Unconsolidated Entities Consolidated Entities — In the ordinary course of business, we enter into land purchase contracts, lot option contracts and land banking arrangements in order to procure land or lots for the construction of homes. Such contracts enable us to control significant lot positions with a minimal initial capital investment and substantially reduce the risk associated with land ownership and development. In accordance with ASC Topic 810, Consolidation , when we enter into agreements to acquire land or lots and pay a non-refundable deposit, we evaluate if a Variable Interest Entity ("VIE") should be created if we are deemed to have provided subordinated financial support that will absorb some or all of an entity's expected losses if they occur. If we are the primary beneficiary of the VIE, we consolidate the VIE and reflect such assets and liabilities as Consolidated real estate not owned and Liabilities attributable to consolidated real estate not owned, respectively, in the unaudited Condensed consolidated balance sheets. Unconsolidated Joint Ventures — We use the equity method of accounting for entities which we exercise significant influence but do not have a controlling interest over the operating and financial policies of the investee. For unconsolidated entities in which we function as the managing member, we have evaluated the rights held by our joint venture partners and determined that the partners have substantive participating rights that preclude the pre

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