Taylor Morrison Home Corp [TMHC] Filings

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10-Q 1 tmhc-20230630.htm 10-Q 10-Q

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


☐	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.

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

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

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

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

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		—

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