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Table of Contents

 

bi

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35873

 

TAYLOR MORRISON HOME CORPORATION

(Exact name of registrant as specified in its Charter)

 

 

Delaware

83-2026677

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

4900 N. Scottsdale Road, Suite 2000

85251

Scottsdale,

Arizona

 

 

(Address of principal executive offices)

(Zip Code)

(480) 840-8100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.00001 par value

TMHC

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding as of July 26, 2023

Common stock, $0.00001 par value

109,448,089

 

 


Table of Contents

 

TAYLOR MORRISON HOME CORPORATION

TABLE OF CONTENTS

 

 

 

 

Part I

 

FINANCIAL INFORMATION

 

2

ITEM 1.

Financial Statements of Taylor Morrison Home Corporation (Unaudited)

 

2

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

3

 

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022

 

4

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

 

6

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

 

7

 

Notes to the Unaudited Condensed Consolidated Financial Statements

 

21

ITEM 2.

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

 

33

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

 

34

ITEM 4.

Controls and Procedures

 

 

 

 

 

 

 

 

Part II

 

OTHER INFORMATION

 

35

ITEM 1.

Legal Proceedings

 

35

ITEM 1A.

Risk Factors

 

36

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

ITEM 3.

Defaults Upon Senior Securities

 

36

ITEM 4.

Mine Safety Disclosures

 

36

ITEM 5.

Other Information

 

38

ITEM 6.

Exhibits

 

 

 

 

 

39

SIGNATURES

 

TAYLOR MORRISON HOME CORPORATION 10-Q

1


Table of Contents

ITEM 1. FINANCIAL STATEMENTS

 

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

 

Real estate inventory:

 

 

 

 

 

 

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

 

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

 

COMMITMENTS AND CONTINGENCIES (Note 13)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Total stockholders’ equity

 

 

5,095,313

 

 

 

4,646,859

 

          Total liabilities and stockholders’ equity

 

$

8,748,789

 

 

$

8,470,724

 

 

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

TAYLOR MORRISON HOME CORPORATION 10-Q

2


Table of Contents

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,

 

 

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

 

 

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

TAYLOR MORRISON HOME CORPORATION 10-Q

3


Table of Contents

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, 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 – 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 – June 30, 2023

 

 

109,443,784

 

 

$

1

 

 

$

3,051,377

 

 

 

51,506,248

 

 

$

(1,140,706

)

 

$

3,167,268

 

 

$

359

 

 

$

17,014

 

 

$

5,095,313

 

 

(1)
Dollar amount includes $8.9 million of stock options exercised netted with the value of shares withheld for taxes on the issuance of restricted stock units.

 

For the three months ended June 30, 2022

 

 

 

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 – March 31, 2022

 

 

120,365,390

 

 

$

1

 

 

$

3,002,809

 

 

 

38,776,746

 

 

$

(818,892

)

 

$

1,865,518

 

 

$

689

 

 

$

44,673

 

 

$

4,094,798

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

290,987

 

 

 

 

 

 

2,167

 

 

 

293,154

 

Exercise of stock options and issuance of restricted stock units, net(1)

 

 

54,833

 

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

532

 

Repurchase of common stock

 

 

(6,779,498

)

 

 

 

 

 

 

 

 

6,779,498

 

 

 

(172,384

)

 

 

 

 

 

 

 

 

 

 

 

(172,384

)

Stock compensation expense

 

 

 

 

 

 

 

 

5,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,278

 

Distributions to non-controlling interests of
   consolidated joint ventures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,176

)

 

 

(27,176

)

Changes in non-controlling interests of consolidated
   joint ventures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(307

)

 

 

(307

)

Balance – June 30, 2022

 

 

113,640,725

 

 

$

1

 

 

$

3,008,619

 

 

 

45,556,244

 

 

$

(991,276

)

 

$

2,156,505

 

 

$

689

 

 

$

19,357

 

 

$

4,193,895

 

 

(1)
Dollar amount includes $0.6 million of stock options exercised netted with the value of shares withheld for taxes on the issuance of restricted stock units.

 

TAYLOR MORRISON HOME CORPORATION 10-Q

4


Table of Contents

ITEM 1. FINANCIAL STATEMENTS

 

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 consolidated
   joint ventures