Taylor Morrison Home Corp [TMHC] Filings

10-Q 1 tmhc-20240630.htm 10-Q tmhc-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2024


o			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 x No o

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 x No o

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	x	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

		Emerging growth company	o

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. o

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

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 24, 2024
Common stock, $0.00001 par value						104,241,692

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 , 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
	36	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk
	37	ITEM 4.	Controls and Procedures

Part II		OTHER INFORMATION
	38	ITEM 1.	Legal Proceedings
	38	ITEM 1A.	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

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, 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

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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

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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 – 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.

TAYLOR MORRISON HOME CORPORATION 10-Q

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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 consolidated joint ventures	—	—		—		—	—		—		—		1		1
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 $22.4 million of stock options exercised netted with the value of shares withheld for taxes on the issuance of restricted stock units.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

TAYLOR MORRISON HOME CORPORATION 10-Q

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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)

Cash and distributions to non-controlling interests of consolidated joint ventures	(424)		—
Net cash used in financing activities	$	(136,959)	$	(60,888)
Net Decrease/Increase in Cash and Cash Equivalents and Restricted Cash	$	(558,326)	$	501,394
Cash, Cash Equivalents, and Restricted Cash — Beginning of period	807,099		726,635
Cash, Cash Equivalents, and Restricted Cash — End of period	$	248,773	$	1,228,029
Supplemental Cash Flow Information
Income tax (paid)/refund, net	$	(125,792)	$	(78,877)
Supplemental Non-Cash Investing and Financing Activities:
Change in loans payable issued to sellers in connection with land purchase contracts	$	149,363	$	84,445
Change in inventory not owned	$	63,082	$	(23,079)
Accrual of excise tax on share repurchases	$	(2,125)	$	—

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

TAYLOR MORRISON HOME CORPORATION 10-Q

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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 components, and a financial services component, all of which are managed as four reportable segments: East, Central, West, and Financial Services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation — The accompanying unaudited Condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”). In the opinion of management, the accompanying unaudited Condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full fiscal year.

Joint Ventures — We consolidate certain joint ventures in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation. The income from the percentage of the joint venture not owned by us is presented as “Net income attributable to non-controlling interests” on the unaudited Condensed consolidated statement of operations. The equity from the percentage of the joint ventures not owned by us is presented as “Non-controlling interests” on the unaudited Condensed consolidated statement of stockholders’ equity. The balance of non-controlling interests will fluctuate from period to period as a result of activities within the respective joint ventures which may include the allocation of income or losses and distributions or contributions associated with the partners within the joint venture.

Use of Estimates — The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited Condensed consolidated financial statements and accompanying notes. Significant estimates include real estate development costs to complete, valuation of real estate, valuation of goodwill, valuation of estimated development liabilities, valuation of equity awards, valuation allowance on deferred tax assets, and reserves for warranty and self-insured risks. Actual results could differ from those estimates.

Real Estate Inventory — Inventory consists of raw land, land under development, homes under construction, completed homes, and model homes, all of which are stated at cost. In addition to direct carrying costs, we also capitalize interest, real estate taxes, and related development costs that benefit the entire community, such as field construction supervision and related direct overhead. Home vertical construction costs are accumulated and charged to Cost of home closings at the time of home closing using the specific identification method. Land acquisition, development, interest, and real estate taxes are allocated generally using the relative sales value method. Generally, all overhead costs relating to purchasing, vertical construction, and construction utilities are considered overhead costs and allocated on a per unit basis. These costs are capitalized to inventory from the point development begins to the point construction is completed. Changes in estimated costs to be incurred in a community are generally allocated to the remaining lots on a prospective basis.

The life cycle of a typical community generally ranges from two to five years, commencing with the acquisition of unentitled or entitled land, continuing through the land development phase and concluding with the sale, construction and delivery of homes. Actual community duration will vary based on the size of the community, the sales absorption rate and whether we purchased the property as raw land or as finished lots.

TAYLOR MORRISON HOME CORPORATION 10-Q

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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 allow for market conditions to improve. We refer to such communities as long-term strategic assets. The decision may be based on financial and/or operational metrics as determined by us. For those communities that have been temporarily closed or development has been discontinued, we do not allocate interest or other costs to the community's inventory until activity resumes. Such costs are expensed as incurred. In addition, if we decide to cease development, we will evaluate the project for impairment and then cease future development and marketing activity until such a time when we believe that market conditions have improved and economic performance can be maximized. Our assessment of the carrying value of our long-term strategic assets typically includes estimates of future performance, including the timing of when development will recommence, the type of product to be offered, and the margin to be realized. In the future, some of these inactive communities may be re-opened while others may be sold. As of June 30, 2024 and December 31, 2023, we had no long-term strategic assets.

Land held for sale — In some locations where we act as a developer, we occasionally purchase land that includes commercially zoned parcels or areas designated for school or government use, which we typically sell to commercial developers or municipalities, as applicable. We also sell residential lots or land parcels to manage our land and lot supply on larger tracts of land. Land is considered held for sale once it meets all criteria in accordance with ASC 360 Property, Plant and Equipment. Land held for sale is recorded at the lower of cost or fair value less costs to sell. In determining the value of land held for sale, we consider recent offers received, prices for land in recent comparable sales transactions, and other factors. For the three and six months ended June 30, 2024, we recorded $6.8 million of fair value adjustments for land held for sale in our West reporting segment. For the three and six months ended June 30, 2023, we had no such charges. Adjustments for land held for sale are recorded within Cost of land closings on the Condensed consolidated statements of operations.

Land banking arrangements — We have land purchase agreements with various land sellers. As a method of acquiring land in staged takedowns, while limiting risk and minimizing the immediate use of funds from our available cash or other financing sources, we transfer our right under certain specific performance agreements to entities owned by third parties (“land banking arrangements”). These entities use equity contributions from their owners and/or incur debt to finance the acquisition and development of the land. We incur interest expense on these arrangements. Interest is based on remaining lots to be purchased and is capitalized for the percentage of lots in each project actively under development, with the remainder expensed and included in Interest expense/(income), net on the Condensed consolidated statements of operations. The entities grant us an option to acquire lots in staged takedowns. In consideration for this option, we make a non-significant and non-refundable cash deposit. We are not legally obligated to purchase the lots, but would forfeit any existing deposits and could be subject to financial and other penalties if the lots were not purchased. We do not have an ownership interest in these entities or title to their assets and do not guarantee their liabilities. As such, these entities are not consolidated. These land banking arrangements help us manage the financial and market risk associated with land holdings which are not included in the unaudited Condensed consolidated balance sheets.

Asset Acquisition

On April 29, 2024, we acquired substantially all the assets of Pyatt Builders, a privately-held Indianapolis based homebuilder. The assets acquired were primarily inventory for existing and future communities, including approximately 1,700 owned and controlled lots. The acquisition was accounted for as an asset acquisition and was not material to our results of operations or financial condition.

TAYLOR MORRISON HOME CORPORATION 10-Q

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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 presumption of control. Our share of net earnings or losses is included in Net income from unconsolidated entities on the unaudited Condensed consolidated statements of operations when earned and distributions are credited against our Investments in unconsolidated entities on the unaudited Condensed consolidated balance sheets when received.

We evaluate our investments in unconsolidated entities for indicators of impairment semi-annually. A series of operating losses of an investee or other factors may indicate that a decrease in value of our investment in the unconsolidated entity has occurred which is other-than-temporary. The amount of impairment recognized, if any, is the excess of the investment's carrying amount over its estimated fair value. Additionally, we consider various qualitative factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include age of the venture, stage in its life cycle, intent and ability for us to recover our investment in the entity, financial condition and long-term prospects of the entity, short-term liquidity needs of the unconsolidated entity, trends in the general economic environment of the land, entitlement status of the land held by the unconsolidated entity, overall projected returns on investment, defaults under contracts with third parties (including bank debt), recoverability of the investment through future cash flows and relationships among the entity's partners. If we believe that the decline in the fair value of the investment is temporary, then no impairment is recorded. We recorded no impairment charges related to the investments in unconsolidated entities for the three and six months ended June 30, 2024 and 2023.

Treasury Stock — We account for treasury stock, including the shares repurchased as part of our Accelerated Share Repurchase ("ASR") programs, in accordance with ASC Topic 505-30, Equity—Treasury Stock. Repurchased shares are reflected as a reduction in stockholders' equity. Refer to Note 10 - Stockholders' Equity for additional discussion regarding the ASR.

Revenue Recognition — Revenue is recognized in accordance with ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). The standard's core principle requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.

Home and land closings revenue

Under Topic 606, the following steps are applied to determine home closings revenue and land closings revenue recognition: (1) identify the contract(s) with our customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the performance obligation(s) are satisfied. Our home sales transactions, have one contract, with one performance obligation, with each customer to build and deliver the home purchased (or develop and deliver land). Based on the application of the five steps, the following summarizes the timing and manner of home and land closings revenue:

•Revenue from closings of residential real estate is recognized when the buyer has made the required minimum down payment, obtained necessary financing, the risks and rewards of ownership are transferred to the buyer, and we have no continuing involvement with the property, which is generally upon the close of escrow. Revenue is reported net of any discounts and incentives.

•Revenue from land sales is recognized when a significant down payment is received, title passes and collectability of the receivable, if any, is reasonably assured, and we have no continuing involvement with the property, which is generally upon the close of escrow.

Amenity and other revenue

We own and operate certain amenities such as golf courses, clubhouses, and fitness centers, pursuant to which we provide club members with access to the facilities in exchange for the payment of club dues. We collect club dues and other fees from club members, which are invoiced on a monthly basis. Revenue from our golf club operations is also included in

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amenity and other revenue. Amenity and other revenue also includes revenue from the sale of assets from our Urban Form operations and Build-to-Rent operations.

Financial services revenue

Mortgage operations and hedging activity related to financial services are not within the scope of Topic 606. Loan origination fees (including title fees, points, and closing costs) are recognized at the time the related real estate transactions are completed, which is usually upon the close of escrow. Generally, loans TMHF originates are sold to third party investors within a short period of time, on a non-recourse basis. Gains and losses from the sale of mortgages are recognized in accordance with ASC Topic 860-20, Sales of Financial Assets. TMHF does not have continuing involvement with the transferred assets; therefore, we derecognize the mortgage loans at time of sale, based on the difference between the selling price and carrying value of the related loans upon sale, recording a gain/loss on sale in the period of sale. Also included in Financial services revenue/expenses is the realized and unrealized gains and losses from hedging instruments. ASC Topic 815-25, Derivatives and Hedging, requires that all hedging instruments be recognized as assets or liabilities on the balance sheet at their fair value. We do not meet the criteria for hedge accounting; therefore, we account for these instruments as free-standing derivatives, with changes in fair value recognized in Financial services revenue/expenses on the unaudited Condensed consolidated statements of operations in the period in which they occur.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires all public entities to report segment information in accordance with Topic 280. The guidance will be effective for the annual reporting period ending December 31, 2024 but entities may early adopt. We are currently evaluating the effect of adopting the new guidance on our consolidated financial statements and related disclosures.

3. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income available to TMHC by the weighted average number of shares of Common Stock (as defined in Note 10) outstanding during the period. Diluted earnings per share gives effect to the potential dilution that could occur if all outstanding dilutive equity awards to issue shares of Common Stock were exercised or settled.

The following is a summary of the components of basic and diluted earnings per share (in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	199,460	$	234,602	$	389,730	$	425,653
Denominator:
Weighted average shares – basic	105,500		109,210		105,979		108,822
Restricted stock units	750		804		982		863
Stock Options	999		842		1,000		781
Weighted average shares – diluted	107,249		110,856		107,961		110,466
Earnings per common share – basic:
Net income	$	1.89	$	2.15	$	3.68	$	3.91
Earnings per common share – diluted:
Net income	$	1.86	$	2.12	$	3.61	$	3.85

The above calculations of weighted average shares exclude 138,103 and 150,859 of anti-dilutive stock options and unvested performance and non-performance restricted stock units ("RSUs") for the three and six months ended June 30, 2024, respectively, and 347,052 and 267,531 of anti-dilutive stock options and RSUs for the three and six months ended June 30, 2023, respectively.

In addition, 192,105 and 367,084 shares relating to our ASR (refer to Note 10 - Stockholders' Equity) were also anti-dilutive and excluded from the above for the three and six months ended June 30, 2024, respectively. There were no ASR transactions in 2023.

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4. REAL ESTATE INVENTORY

Inventory consists of the following:


	As of
(Dollars in thousands)	June 30, 2024		December 31, 2023
Real estate developed and under development	$	4,263,720	$	3,855,534
Real estate held for development or held for sale (1)	49,307		29,317
Total land inventory	4,313,027		3,884,851
Operating communities (2)	1,666,486		1,414,528
Capitalized interest	172,263		174,449
Total 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

(1) Real estate held for development or held for sale includes properties which are not in active production.

(2) Operating communities consist of all vertical construction costs relating to homes in progress and completed homes.

We have land option purchase contracts, land banking arrangements and other controlled lot agreements. We do not have title to the properties, and the property owner and its creditors generally only have recourse against us in the form of retaining any non-refundable deposits. We are also not legally obligated to purchase the balance of the lots. Deposits related to these lots are capitalized when paid and classified as Land deposits until the associated property is purchased.

A summary of owned and controlled lots is as follows:


	As of
	June 30, 2024	December 31, 2023
Owned lots:
Undeveloped	13,450	13,418
Under development	10,452	8,848
Finished	11,098	11,811
Total owned lots	35,000	34,077
Controlled lots:
Land option purchase contracts	9,792	8,621
Land banking arrangements	5,454	5,818
Other controlled lots(1)	30,431	23,846
Total controlled lots	45,677	38,285
Total owned and controlled lots	80,677	72,362
Homes in inventory	9,021	7,867

(1) Other controlled lots include single transaction take-downs and lots from our portion of unconsolidated JVs.

Lots which represent homes in progress and completed homes have been excluded from total owned lots. Controlled lots represent lots in which we have a contractual right to acquire real property, generally through an option contract, land banking arrangement, or a land deposit paid to a seller. Homes in inventory include any lots which have commenced vertical construction.

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Capitalized Interest — Interest capitalized, incurred and amortized is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest capitalized - beginning of period	$	177,222	$	196,607	$	174,449	$	190,123
Interest incurred and capitalized(1)	23,344		32,049		49,742		66,182
Interest amortized to cost of home closings	(28,303)		(37,352)		(51,928)		(65,001)
Interest capitalized - end of period	$	172,263	$	191,304	$	172,263	$	191,304

(1) Excludes Interest expense/(income), net on the unaudited Condensed consolidated statements of operations as such amounts are not capitalizable.

5. INVESTMENTS IN CONSOLIDATED AND UNCONSOLIDATED ENTITIES

Unconsolidated Entities

Summarized, unaudited condensed combined financial information of unconsolidated entities that are accounted for by the equity method are as follows (in thousands):


	As of
	June 30, 2024		December 31, 2023
Assets:
Real estate inventory	$	1,057,652	$	952,223
Other assets	272,356		182,517
Total assets	$	1,330,008	$	1,134,740
Liabilities and owners’ equity:
Debt	$	409,044	$	317,224
Other liabilities	70,367		50,739
Total liabilities	$	479,411	$	367,963
Owners’ equity:
TMHC	$	381,571	$	346,192
Others	469,026		420,585
Total owners’ equity	$	850,597	$	766,777
Total liabilities and owners’ equity	$	1,330,008	$	1,134,740


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	89,384	$	32,100	$	163,152	$	51,637
Costs and expenses	(82,713)		(24,067)		(149,356)		(38,766)
Net income from unconsolidated entities	$	6,671	$	8,033	$	13,796	$	12,871
TMHC’s share in net income of unconsolidated entities	$	2,628	$	3,186	$	5,379	$	5,115
Distributions to TMHC from unconsolidated entities	$	12,130	$	4,687	$	15,027	$	5,884

Consolidated Entities

As of June 30, 2024, assets of the consolidated joint ventures totaled $261.7 million, of which $33.1 million was cash and cash equivalents, $67.4 million was owned real estate inventory, and $120.0 million was property and equipment, net (primarily related to Urban Form). The majority of the property and equipment, net balance is held for investment as of June 30, 2024. As of December 31, 2023, the assets of the consolidated joint ventures totaled $265.2 million, of which $29.8 million was cash and cash equivalents, $70.2 million was owned real estate inventory, and $121.3 million was property and equipment, net. The liabilities of the consolidated joint ventures totaled $83.5 million and $133.8 million as of June 30, 2024

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and December 31, 2023, respectively, and were primarily comprised of loans payable and other borrowings, accounts payable and accrued expenses and other liabilities.

6. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Real estate development costs to complete	$	45,729	$	46,114
Compensation and employee benefits	105,915		149,095
Self-insurance and warranty reserves	181,790		184,448
Interest payable	32,475		31,042
Property and sales taxes payable	33,533		30,887
Other accruals	119,099		107,488
Total accrued expenses and other liabilities	$	518,541	$	549,074

Self-Insurance and Warranty Reserves – We accrue for the expected costs associated with our limited warranty, deductibles and self-insured exposure under our various insurance policies within Beneva Indemnity Company (“Beneva”), a wholly owned subsidiary. A summary of the changes in reserves are as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Reserve - beginning of period	$	186,948	$	158,222	$	184,448	$	161,675
Additions to reserves	21,525		24,887		42,190		39,334
Cost of claims incurred	(28,713)		(23,318)		(49,906)		(43,826)
Changes in estimates to pre-existing reserves	2,030		535		5,058		3,143
Reserve - end of period	$	181,790	$	160,326	$	181,790	$	160,326

Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that actual costs could differ from those reserved and such differences could be material, resulting in a change in future estimated reserves.

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7. DEBT

Total debt consists of the following (in thousands):


	As of
	June 30, 2024						December 31, 2023
	Principal		Unamortized Debt Issuance (Costs)/ Premium		Carrying Value		Principal		Unamortized Debt Issuance (Costs)/ Premium		Carrying Value
5.875% Senior Notes due 2027	500,000		(2,281)		497,719		500,000		(2,672)		497,328
6.625% Senior Notes due 2027	27,070		877		27,947		27,070		1,022		28,092
5.75% Senior Notes due 2028	450,000		(2,236)		447,764		450,000		(2,551)		447,449
5.125% Senior Notes due 2030	500,000		(3,856)		496,144		500,000		(4,174)		495,826
Senior Notes subtotal	$	1,477,070	$	(7,496)	$	1,469,574	$	1,477,070	$	(8,375)	$	1,468,695
Loans payable and other borrowings	404,242		—		404,242		394,943		—		394,943
$1 Billion Revolving Credit Facility(1)(2)	—		—		—		—		—		—
$100 Million Revolving Credit Facility(1)(2)	—		—		—		—		—		—
Mortgage warehouse borrowings	276,205		—		276,205		153,464		—		153,464
Total debt	$	2,157,517	$	(7,496)	$	2,150,021	$	2,025,477	$	(8,375)	$	2,017,102

(1) Unamortized debt issuance costs are included in the Prepaid expenses and other assets, net on the Condensed consolidated balance sheets.

(2) The $1 Billion Revolving Credit Facility Agreement together with the $100 Million Revolving Credit Facility Agreement, the “Revolving Credit Facilities”.

Debt Instruments

Excluding the debt instruments discussed below, the terms governing all other debt instruments listed in the table above have not substantially changed from the year ended December 31, 2023. For information regarding such instruments, refer to Note 8 - Debt to the Consolidated Financial Statements in our Annual Report. As of June 30, 2024, we were in compliance with all of the covenants in the debt instruments listed in the table above.

$1 Billion Revolving Credit Facility

Our $1 Billion Revolving Credit Facility has a maturity date of March 11, 2027. We had no outstanding borrowings under our $1 Billion Revolving Credit Facility as of June 30, 2024 and December 31, 2023.

As of June 30, 2024 and December 31, 2023, we had $2.4 million and $2.9 million, respectively, of unamortized debt issuance costs relating to our $1 Billion Revolving Credit Facility, which are included in Prepaid expenses and other assets, net, on the unaudited Condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023, we had $57.0 million and $61.2 million, respectively, of utilized letters of credit, resulting in $943.0 million and $938.8 million, respectively, of availability under the $1 Billion Revolving Credit Facility. Subsequent to quarter-end, we borrowed $100 million under our $1 Billion Revolving Credit Facility.

As of June 30, 2024, we were in compliance with all of the covenants under the $1 Billion Revolving Credit Facility.

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Mortgage Warehouse Borrowings

The following is a summary of our mortgage warehouse borrowings (in thousands):

As of June 30, 2024

Facility

Amount
Drawn

Facility
Amount

Interest

Rate(2)

Expiration
Date

Collateral (1)

Warehouse A

32,244

60,000

Term SOFR + 1.70%

on Demand

Mortgage Loans

Warehouse C

76,683

100,000

Term SOFR + 1.50%

on Demand

Mortgage Loans

Warehouse D

76,154

100,000

Daily SOFR + 1.50%

September 4, 2024

Mortgage Loans

Warehouse E

91,124

100,000

Term SOFR + 1.60%

on Demand

Mortgage Loans

Total

276,205

360,000

As of December 31, 2023

Facility

Amount
Drawn

Facility
Amount

Interest

Rate(2)

Expiration
Date

Collateral (1)

Warehouse A

13,477

60,000

Term SOFR + 1.70%

on Demand

Mortgage Loans

Warehouse C

25,567

100,000

Term SOFR + 1.65%

on Demand

Mortgage Loans

Warehouse D

56,745

100,000

Daily SOFR + 1.50%

September 4, 2024

Mortgage Loans

Warehouse E

57,675

100,000

Term SOFR + 1.60%

on Demand

Mortgage Loans

Total

153,464

360,000

(1) The mortgage warehouse borrowings outstanding as of June 30, 2024 and December 31, 2023 were collateralized by $313.0 million and $193.3 million, respectively, of mortgage loans held for sale.

(2) Secured Overnight Financing Rate ("SOFR")

Loans Payable and Other Borrowings

Loans payable and other borrowings as of June 30, 2024 and December 31, 2023 consist of project-level debt due to various land sellers and financial institutions for specific communities. Project-level debt is generally secured by the land that was acquired and the principal payments generally coincide with corresponding project lot closings or a principal reduction schedule. Loans payable bear interest at rates that ranged from 0% to 10% and 0% to 9% at June 30, 2024 and December 31, 2023, respectively. We impute interest for loans with no stated interest rates.

8. FAIR VALUE DISCLOSURES

ASC Topic 820 provides a framework for measuring fair value under GAAP, expands disclosures about fair value measurements, and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the fair value hierarchy are summarized as follows:

Level 1 — Fair value is based on quoted prices for identical assets or liabilities in active markets.

Level 2 — Fair value is determined using quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable.

Level 3 — Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.

The fair value of our mortgage loans held for sale is derived from negotiated rates with partner lending institutions. Derivative assets and liabilities include interest rate lock commitments (“IRLCs”) and mortgage backed securities (“MBS”). The fair value of IRLCs is based on the value of the underlying mortgage loans, quoted MBS prices and the probability that the mortgage loan will fund within the terms of the IRLCs. We estimate the fair value of the forward sales commitments based on quoted MBS prices. The fair value of our mortgage warehouse borrowings, loans payable and other borrowings, and the borrowings under our Revolving Credit Facilities approximate carrying value due to their short term nature and variable interest rate terms. The fair value of our senior notes is derived from quoted market prices by independent dealers in markets that are not active. There were no changes to or transfers between the levels of the fair value hierarchy for any of our financial instruments as of June 30, 2024, when compared to December 31, 2023.

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The carrying value and fair value of our financial instruments are as follows:


		June 30, 2024				December 31, 2023
(Dollars in thousands)	Level in Fair Value Hierarchy	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Description:
Mortgage loans held for sale	2	$	313,026	$	313,026	$	193,344	$	193,344
IRLCs	3	(3,620)		(3,620)		1,489		1,489
MBSs	2	2,616		2,616		(5,055)		(5,055)
Mortgage warehouse borrowings	2	276,205		276,205		153,464		153,464
Loans payable and other borrowings	2	404,242		404,242		394,943		394,943
5.875% Senior Notes due 2027 (1)	2	497,719		497,770		497,328		502,500
6.625% Senior Notes due 2027 (1)	2	27,947		26,673		28,092		26,529
5.75% Senior Notes due 2028 (1)	2	447,764		445,500		447,449		451,571
5.125% Senior Notes due 2030 (1)	2	496,144		478,750		495,826		483,690

(1) Carrying value for senior notes, as presented, includes unamortized debt issuance costs and premiums. Debt issuance costs are not factored into the fair value calculation for the senior notes.

Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable. The following table presents the fair value for our inventories measured at fair value on a nonrecurring basis:



(Dollars in thousands)	Level in Fair Value Hierarchy	As of June 30, 2024		As of September 30, 2023(1)
Description:
Real estate inventory	3	$	7,024	$	19,263

(1) As of December 31, 2023 there was no additional impairment; therefore, the fair value information presented is as of September 30, 2023.

9. INCOME TAXES

The effective tax rate for the three and six months ended June 30, 2024 was 25.2% and 24.2%, respectively, compared to 25.6% and 24.5% for the same periods in 2023. For the three months ended June 30, 2024, the effective tax rate differed from the U.S. federal statutory income tax rate primarily due to state income taxes, non-deductible executive compensation, and energy credits related to homebuilding activities.

There were no unrecognized tax benefits as of June 30, 2024 or December 31, 2023.

10. STOCKHOLDERS’ EQUITY

Capital Stock

The Company’s authorized capital stock consists of 400,000,000 shares of common stock, par value $0.00001 per share (the “Common Stock”), and 50,000,000 shares of preferred stock, par value $0.00001 per share.

Stock Repurchase Program

On December 15, 2023 the Board of Directors authorized a renewal of the Company's then-existing stock repurchase program which permits the repurchase up to $500 million of the Company’s common stock through December 31, 2025. Repurchases under the program may occur from time to time through open market purchases, privately negotiated transactions or other transactions.

Using the availability under our stock repurchase program, we entered into two ASR agreements with the same financial institution during the six months ended June 30, 2024. We paid $50.0 million for each agreement and received an initial delivery of 80% of common stock shares in accordance with the ASR agreements. The remaining 20% of settlements are expected to occur no later than the third quarter of 2024, at which time, the volume-weighted average price calculations over the term of the ASR agreements will be used to determine the final number of shares to be delivered. We accounted for the ASRs as common stock repurchases and forward contracts indexed to our own common stock. We determined that the equity classification criteria was met for the forward contracts; therefore, they were not accounted for as derivative instruments.

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The following table summarizes share repurchase activity for the periods presented:


	Three Months Ended June 30,		Six Months Ended June 30,
(Number of Shares)	2024	2023	2024	2023
March 5, 2024 ASR Agreement	—	—	705,343	—
June 7, 2024 ASR Agreement	720,461	—	720,461	—
Number of shares repurchased with ASR	720,461	—	1,425,804	—
Other share repurchases(1)	983,342	—	1,769,484	109,325
Total share repurchases - end of period	1,703,803	—	3,195,288	109,325

(1) Amount represents shares repurchased under our existing share repurchase program which are not part of ASRs.

The following table summarizes the spend on share repurchases for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2024		2023		2024		2023
Amount available for repurchase — beginning of period	$	402,840	$	275,570	$	494,489	$	279,138


Amount repurchased(1)	(104,745)		—		(196,394)		(3,568)
Amount available for repurchase — end of period	$	298,095	$	275,570	$	298,095	$	275,570

(1) 2024 includes the amount paid for our ASR programs.

The Inflation Reduction Act was enacted on August 16, 2022 and includes a one percent excise tax on the net repurchase of company stock. We have accrued such tax as of June 30, 2024 and included in the cost of treasury stock repurchases on our unaudited Condensed consolidated statements of stockholders' equity for the three and six months ended June 30, 2024.

11. STOCK BASED COMPENSATION

Equity-Based Compensation

In April 2013, we adopted the Taylor Morrison Home Corporation 2013 Omnibus Equity Award Plan (the “Plan”). The Plan was most recently amended and restated in May 2022. The Plan provides for the grant of stock options, RSUs, performance-based restricted stock units (“PRSUs”), and other equity-based awards deliverable in shares of our Common Stock. As of June 30, 2024, we had an aggregate of 4,860,483 shares of Common Stock available for future grants under the Plan.

The following table provides the outstanding balance of RSUs, PRSUs, and stock options as of June 30, 2024:


	RSUs and PRSUs			Stock Options
	Number of Units	Weighted Average Grant Date Fair Value		Number of Options	Weighted Average Exercise Price Per Share
Balance at June 30, 2024	1,350,025	$	38.08	2,170,799	$	28.54

The following table provides information regarding the amount and components of stock-based compensation expense, all of which is included in General and administrative expenses in the unaudited Condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Restricted stock units (1)	$	4,671	$	4,212	$	9,444	$	10,887
Stock options	1,401		1,059		2,111		1,917
Total stock compensation expense	$	6,072	$	5,271	$	11,555	$	12,804

(1) Includes compensation expense related to time-based RSUs and PRSUs.

At June 30, 2024 and December 31, 2023, the aggregate unrecognized value of all outstanding stock-based compensation awards was approximately $40.7 million and $26.5 million, respectively.

TAYLOR MORRISON HOME CORPORATION 10-Q

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

12. OPERATING AND REPORTING SEGMENTS

We have multiple homebuilding operating components which are engaged in the business of acquiring and developing land, constructing homes, marketing and selling homes, and providing warranty and customer service. We aggregate our homebuilding operating components into three reporting segments, East, Central, and West, based on similar long-term economic characteristics. The activity from our Build-to-Rent and Urban Form operations are included in our Corporate segment. We also have a Financial Services reporting segment.

Our reporting segments are as follows:


East			Atlanta, Charlotte, Jacksonville, Naples, Orlando, Raleigh, Sarasota, and Tampa
Central			Austin, Dallas, Denver, Houston, and Indianapolis
West			Bay Area, Las Vegas, Phoenix, Portland, Sacramento, Seattle, and Southern California
Financial Services			Taylor Morrison Home Funding, Inspired Title Services, and Taylor Morrison Insurance Services

Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity. Segment information is as follows (in thousands):


	Three Months Ended June 30, 2024
	East		Central		West		Financial Services		Corporate and Unallocated(1)		Total
Total revenue	$	694,630	$	493,406	$	749,076	$	48,916	$	5,025	$	1,991,053
Gross margin	178,152		122,628		149,334		20,810		1,364		472,288
Selling(2), general and administrative expenses	(53,062)		(39,965)		(48,067)		—		(55,641)		(196,735)
Net (loss)/income from unconsolidated entities	—		(28)		79		3,001		(424)		2,628
Interest and other (expense)/income, net(3)	(560)		(2,861)		(3,109)		604		(5,038)		(10,964)

Income/(loss) before income taxes	$	124,530	$	79,774	$	98,237	$	24,415	$	(59,739)	$	267,217

(1) Includes the activity from our Build-To-Rent and Urban Form operations.

(2) Includes sales, commissions, and other marketing costs.

(3) Interest and other (expense)/income, net includes pre-acquisition write-offs on terminated projects.


	Three Months Ended June 30, 2023
	East		Central		West		Financial Services		Corporate and Unallocated(1)		Total
Total revenue	$	740,064	$	623,207	$	652,257	$	41,914	$	3,122	$	2,060,564
Gross margin	203,165		160,485		119,113		16,572		350		499,685
Selling(2), general and administrative expenses	(47,904)		(45,390)		(47,101)		(91)		(43,197)		(183,683)
Net income/(loss) from unconsolidated entities	—		100		(173)		3,259		—		3,186
Interest and other (expense)/income, net(3)	(1,136)		(1,520)		(3,007)		—		2,234		(3,429)

Income/(loss) before income taxes	$	154,125	$	113,675	$	68,832	$	19,740	$	(40,613)	$	315,759

(1) Includes the activity from our Build-To-Rent and Urban Form operations.

(2) Includes sales, commissions, and other marketing costs.

(3) Interest and other (expense)/income, net includes pre-acquisition write-offs on terminated projects.

TAYLOR MORRISON HOME CORPORATION 10-Q

Table of Contents

ITEM 1. FINANCIAL STATEMENTS



	Six Months Ended June 30, 2024
	East		Central		West		Financial Services		Corporate and Unallocated(1)		Total
Total revenue	$	1,241,941	$	971,895	$	1,371,905	$	95,875	$	9,189	$	3,690,805
Gross margin	324,040		246,859		272,998		42,626		2,610		889,133
Selling(2), general and administrative expenses	(99,263)		(79,358)		(92,815)		—		(95,463)		(366,899)
Net (loss)/income from unconsolidated entities	—		(69)		53		5,898		(503)		5,379
Interest and other (expense)/income, net(3)	(1,387)		(5,276)		(6,627)

Taylor Morrison Home Corp [TMHC] Filings
10-Q	[2024-07-24]
10-Q	[2024-04-30]
10-K	[2024-02-21]
10-Q	[2023-10-25]
10-Q	[2023-07-26]
10-Q	[2023-04-26]
10-K	[2023-02-22]
10-Q	[2022-10-26]
10-Q	[2022-07-28]
10-Q	[2022-04-27]
10-K	[2022-02-23]
10-Q	[2021-10-27]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-K	[2021-02-24]
10-Q	[2020-11-02]
10-Q	[2020-08-06]
10-Q	[2020-05-11]
10-K	[2020-02-19]
10-Q	[2019-10-30]
10-Q	[2019-08-01]
10-Q	[2019-05-01]
10-K	[2019-02-20]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-02-21]
10-Q	[2017-11-02]
10-Q	[2017-08-02]
10-Q	[2017-04-27]
10-K	[2017-02-21]
10-Q	[2016-11-02]
10-Q	[2016-08-03]
10-Q	[2016-05-04]
10-K	[2016-02-25]
10-Q	[2015-11-04]
10-Q	[2015-08-05]
10-Q	[2015-05-07]
10-K	[2015-02-27]
10-Q	[2014-11-05]
10-Q	[2014-08-05]
10-Q	[2014-05-07]
10-K	[2014-02-24]
10-Q	[2013-11-13]
10-Q	[2013-08-14]
10-Q	[2013-05-15]
S-1	[2012-12-05]