SCOTTSDALE, Ariz., Feb. 14,
2024 /PRNewswire/ -- Taylor Morrison Home Corporation
(NYSE: TMHC), a leading national land developer and homebuilder,
announced results for the fourth quarter and year ended
December 31, 2023. Reported net
income in the fourth quarter was $173
million, or $1.58 per diluted
share while adjusted net income was $223
million, or $2.05 per diluted
share. For the full year 2023, reported net income was $769 million, or $6.98 per diluted share, while adjusted net
income was $830 million, or
$7.54 per diluted share.
Fourth quarter 2023 highlights included the
following:
- Net sales orders increased 30% to 2,361, driven by a monthly
absorption pace of 2.4 per community
- Home closings revenue of $1.9
billion, driven by 3,190 home closings at an average price
of $607,000
- Home closings gross margin of 24.1%
- 72,362 homebuilding lots owned and controlled, representing 6.3
years of total supply, of which 3.0 years was owned
Full year 2023 highlights included the following:
- Net sales orders increased 14% to 10,830, driven by a monthly
absorption pace of 2.8 per community
- Home closings revenue of $7.2
billion, driven by 11,495 home closings at an average price
of $623,000
- Home closings gross margin of 23.9% and adjusted home closings
gross margin of 24.0%
- Repurchased 2.8 million common shares for $128 million
- Homebuilding debt-to-capitalization of 26.0% on a gross basis
and 16.8% net of $799 million of
unrestricted cash
- Total liquidity of $1.8
billion
"Our team's strong fourth quarter execution wrapped up another
tremendous year for Taylor Morrison.
In total, we delivered 11,495 homes to generate $7.2 billion of homebuilding revenue at a healthy
adjusted home closings gross margin of 24.0%, driving adjusted
earnings of $7.54 per diluted share.
Our earnings combined with $889
million of share repurchases over the last four years drove
our book value per share to a new high of $49, which was up 15% from a year ago and 53%
from two years ago," said Sheryl
Palmer, Taylor Morrison
Chairman and CEO.
"While we faced significant headwinds from rising interest
rates, economic uncertainty and global unrest, our business
displayed the resiliency we have strategically positioned it for
following years of intentional growth, transformative M&A
integrations, and tireless commitment to streamlining and
optimizing our operational abilities. We strongly believe that our
diversification across buyer groups ranging from entry-level,
move-up and resort lifestyle combined with our emphasis on
high-quality community locations are critical differentiators that
enhance our bottom-line potential, growth opportunities and risk
mitigation throughout housing's inevitable ebbs and flows as
demonstrated with our results through a volatile fourth
quarter."
Palmer continued, "Our top priority as we move ahead is
reaccelerating our growth now that we believe that we have firmly
established the operational efficiency required for outsized market
share gains. In 2024, we expect to deliver at least 12,000 home
closings at a home closings gross margin of 23.0% to 23.5%,
followed by approximately 10% closings growth in 2025 and
thereafter. Our $1.8 billion land
investment in 2023 was focused on supporting these growth
aspirations, and with one of the strongest balance sheets in our
company's history, we are well positioned to continue investing
with an accretive, disciplined approach in 2024 with an initial
planned land spend in the range of $2.3
billion to $2.5 billion. In
addition to driving growth in the years ahead, we also expect to
repurchase approximately $300 million
of common stock in 2024, further enhancing our shareholder
returns."
Business Highlights (All comparisons are of the
current quarter to the prior-year period, unless indicated.)
Homebuilding
- Home closings revenue declined 19% to $1.9 billion, driven by a 16% decrease in home
closings to 3,190 and a 3% decrease in average closing price to
$607,000.
- Home closings gross margin increased 60 basis points year over
year to 24.1%. In the fourth quarter of 2022, home closings gross
margin included an inventory impairment of $25 million. Excluding this charge, the adjusted
home closings gross margin in the fourth quarter of 2022 was 24.5%.
There was no similar charge taken in the fourth quarter of
2023.
- Net sales orders increased 30% to 2,361, driven by a 29%
increase in the monthly absorption pace to 2.4 per community and a
1% increase in ending community count to 327. Average net sales
order price increased 9% to $629,000.
- SG&A as a percentage of home closings revenue increased 240
basis points to 9.7% from the record low of 7.3% a year ago. The
reduced leverage was primarily due to lower home closings revenue,
higher performance-based compensation expense and external broker
commissions.
- Cancellations equaled 11.6% of gross orders, down from 24.4% a
year ago. This was consistent with historic norms.
- Backlog at quarter end was 5,289 homes with a sales value of
$3.6 billion. Backlog customer
deposits averaged approximately $62,000, or 9%, per home.
Land Portfolio
- Homebuilding land acquisition and development spend totaled
$537 million in the fourth quarter,
up from $373 million a year ago.
Development-related spend accounted for 42% of the fourth quarter
total versus 64% a year ago.
- To provide greater clarity into our lot position and improve
comparability to some of our peers, we adjusted our methodology for
calculating owned and controlled lots as of December 31, 2023. Specific to owned lots, we
have excluded lots that have begun vertical construction. Those
lots are defined separately as homes in inventory. With regard to
controlled lots, we have expanded our definition to include those
lots under contract with an earnest money deposit that have not yet
been formally approved by our investment committee to offer a more
complete look at our lot pipeline. All presented periods have been
recast under the new methodology.
- Homebuilding lot supply was 72,362 owned and controlled
homesites, down from 74,787 a year ago and 74,794 lots two years
ago.
- Controlled homebuilding lots as a share of total lot supply was
53%, up from 51% a year ago and 49% two years ago.
- Based on trailing twelve-month home closings, total
homebuilding lots represented 6.3 years of total supply, of which
3.0 years was owned. This compared to 5.9 years of total supply and
2.9 years of owned supply at year-end 2022 and 5.5 years of total
supply and 2.8 years of owned supply at year-end 2021.
Financial Services
- The mortgage capture rate increased to 86%, up from 78% a year
ago.
- Borrowers had an average credit score of 751 and debt-to-income
ratio of 40%.
Balance Sheet
- At quarter end, total liquidity was approximately $1.8 billion, including $799 million of unrestricted cash and
$1.1 billion of total capacity on the
Company's revolving credit facilities, which were undrawn outside
of normal letters of credit.
- The gross homebuilding debt-to-capital ratio was 26.0%, down
from 32.0% a year ago. Including $799
million of unrestricted cash on hand, the net homebuilding
debt-to-capital ratio was 16.8%, down from 24.0% a year ago.
- The Company repurchased 2.8 million shares for $128 million in 2023, including approximately
500,000 shares for $24 million in the
fourth quarter. At quarter end, the Company had $494 million remaining on its share repurchase
authorization.
Business Outlook
First Quarter 2024
- Home closings are expected to be approximately 2,700
- Average closing price is expected to be around $600,000
- Home closings gross margin is expected to be between 23.0% to
23.5%
- Ending active community count is expected to be between 320 to
325
- Effective tax rate is expected to be approximately 25%
- Diluted share count is expected to be approximately 108
million
Full Year 2024
- Home closings are expected to be at least 12,000
- Average closing price is expected to be around $600,000
- Home closings gross margin is expected to be between 23.0% to
23.5%
- Ending active community count is expected to be between 320 to
325
- SG&A as a percentage of home closings revenue is expected
to be in the high-9% range
- Effective tax rate is expected to be approximately 25%
- Diluted share count is expected to be approximately 109
million
- Land and development spend is expected to be between
$2.3 billion to $2.5 billion
Quarterly Financial Comparison
(Dollars in
thousands)
|
|
Q4
2023
|
|
|
Q4
2022
|
|
|
Q4 2023 vs. Q4
2022
|
|
Total
Revenue
|
|
$
|
2,019,865
|
|
|
$
|
2,492,126
|
|
|
|
(19.0)
|
%
|
Home Closings
Revenue
|
|
$
|
1,937,632
|
|
|
$
|
2,378,167
|
|
|
|
(18.5)
|
%
|
Home Closings Gross
Margin
|
|
$
|
466,980
|
|
|
$
|
558,457
|
|
|
|
(16.4)
|
%
|
|
|
|
24.1
|
%
|
|
|
23.5
|
%
|
|
60 bps
increase
|
|
Adjusted Home
Closings Gross Margin
|
|
$
|
466,980
|
|
|
$
|
583,327
|
|
|
|
(19.9)
|
%
|
|
|
|
24.1
|
%
|
|
|
24.5
|
%
|
|
40 bps
decrease
|
|
SG&A
|
|
$
|
188,212
|
|
|
$
|
173,357
|
|
|
|
8.6
|
%
|
% of Home Closings
Revenue
|
|
|
9.7
|
%
|
|
|
7.3
|
%
|
|
240 bps
increase
|
|
Annual Financial Comparison
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023 vs.
2022
|
|
Total
Revenue
|
|
$
|
7,417,831
|
|
|
$
|
8,224,917
|
|
|
|
(9.8)
|
%
|
Home Closings
Revenue
|
|
$
|
7,158,857
|
|
|
$
|
7,889,371
|
|
|
|
(9.3)
|
%
|
Home Closings Gross
Margin
|
|
$
|
1,707,456
|
|
|
$
|
1,984,913
|
|
|
|
(14.0)
|
%
|
|
|
|
23.9
|
%
|
|
|
25.2
|
%
|
|
130 bps
decrease
|
|
Adjusted Home Closings
Gross Margin
|
|
$
|
1,719,247
|
|
|
$
|
2,009,783
|
|
|
|
(14.5)
|
%
|
|
|
|
24.0
|
%
|
|
|
25.5
|
%
|
|
150 bps
decrease
|
|
SG&A
|
|
$
|
698,707
|
|
|
$
|
643,212
|
|
|
|
8.6
|
%
|
% of Home Closings
Revenue
|
|
|
9.8
|
%
|
|
|
8.2
|
%
|
|
160 bps
increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Conference Call Webcast
A public webcast to discuss the Company's earnings will be held
later today at 8:30 a.m. ET.
A live audio webcast of the conference call will be
available on Taylor Morrison's
website at www.taylormorrison.com on the Investor
Relations portion of the site under the Events & Presentations
tab. For call participants, the dial-in number is (833) 470-1428
and conference ID is 791610. The call will be recorded and
available for replay on the Company's website.
About Taylor Morrison
Headquartered in Scottsdale, Arizona, Taylor
Morrison is one of the nation's leading homebuilders and
developers. We serve a wide array of consumers from coast to coast,
including first-time, move-up and resort lifestyle homebuyers and
renters under our family of brands—including Taylor Morrison, Esplanade, Darling Homes
Collection by Taylor Morrison and
Yardly. From 2016-2024, Taylor
Morrison has been recognized as America's Most Trusted®
Builder by Lifestory Research. Our strong commitment to
sustainability, our communities, and our team is highlighted in our
latest Environmental, Social, and Governance (ESG) Report on
our website.
Forward-Looking Statements
This earnings summary includes "forward-looking statements."
These statements are subject to a number of risks, uncertainties
and other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words ""anticipate," "estimate,"
"expect," "project," "intend," "plan," "believe," "may," "will,"
"can," "could," "might," "should" and similar expressions identify
forward-looking statements, including statements related to
expected financial, operating and performance results, planned
transactions, planned objectives of management, future developments
or conditions in the industries in which we participate and other
trends, developments and uncertainties that may affect our business
in the future.
Such risks, uncertainties and other factors include, among other
things: inflation or deflation; changes in general and local
economic conditions; slowdowns or severe downturns in the housing
market; homebuyers' ability to obtain suitable financing; increases
in interest rates, taxes or government fees; shortages in,
disruptions of and cost of labor; higher cancellation rates of
existing agreements of sale; competition in our industry; any
increase in unemployment or underemployment; the seasonality of our
business; the physical impacts of climate change and the increased
focus by third-parties on sustainability issues; our ability to
obtain additional performance, payment and completion surety bonds
and letters of credit; significant home warranty and construction
defect claims; our reliance on subcontractors; failure to manage
land acquisitions, inventory and development and construction
processes; availability of land and lots at competitive prices;
decreases in the market value of our land inventory; new or
changing government regulations and legal challenges; our
compliance with environmental laws and regulations regarding
climate change; our ability to sell mortgages we originate and
claims on loans sold to third parties; governmental regulation
applicable to our financial services and title services business;
the loss of any of our important commercial lender relationships;
our ability to use deferred tax assets; raw materials and building
supply shortages and price fluctuations; our concentration of
significant operations in certain geographic areas; risks
associated with our unconsolidated joint venture arrangements;
information technology failures and data security breaches; costs
to engage in and the success of future growth or expansion of our
operations or acquisitions or disposals of businesses; costs
associated with our defined benefit and defined contribution
pension schemes; damages associated with any major health and
safety incident; our ownership, leasing or occupation of land and
the use of hazardous materials; existing or future litigation,
arbitration or other claims; negative publicity or poor relations
with the residents of our communities; failure to recruit, retain
and develop highly skilled, competent people; utility and resource
shortages or rate fluctuations; constriction of the capital
markets; risks related to instability in the banking system; risks
associated with civil unrest, acts of terrorism, threats to
national security, the conflicts in Eastern Europe and the Middle East and other geopolitical events; the
scale and scope of current and future public health events,
including pandemics and epidemics; any failure of lawmakers to
agree on a budget or appropriation legislation to fund the federal
government's operations (also known as a government shutdown), and
financial markets' and businesses' reactions to any such failure;
risks related to our substantial debt and the agreements governing
such debt, including restrictive covenants contained in such
agreements; our ability to access the capital markets; the risks
associated with maintaining effective internal controls over
financial reporting; provisions in our charter and bylaws that may
delay or prevent an acquisition by a third party; and our ability
to effectively manage our expanded operations.
In addition, other such risks and uncertainties may be found in
our most recent annual report on Form 10-K and our subsequent
quarterly reports filed with the Securities and Exchange Commission
(SEC) as such factors may be updated from time to time in our
periodic filings with the SEC. We undertake no duty to update any
forward-looking statement, whether as a result of new information,
future events or changes in our expectations, except as required by
applicable law.
Taylor Morrison Home
Corporation
Consolidated
Statements of Operations
(In thousands, except
per share amounts, unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Home closings revenue,
net
|
|
$
|
1,937,632
|
|
|
$
|
2,378,167
|
|
|
$
|
7,158,857
|
|
|
$
|
7,889,371
|
|
Land closings
revenue
|
|
|
29,532
|
|
|
|
14,419
|
|
|
|
60,971
|
|
|
|
81,070
|
|
Financial services
revenue
|
|
|
43,204
|
|
|
|
37,072
|
|
|
|
160,312
|
|
|
|
135,491
|
|
Amenity and other
revenue
|
|
|
9,497
|
|
|
|
62,468
|
|
|
|
37,691
|
|
|
|
118,985
|
|
Total revenue
|
|
|
2,019,865
|
|
|
|
2,492,126
|
|
|
|
7,417,831
|
|
|
|
8,224,917
|
|
Cost of home
closings
|
|
|
1,470,652
|
|
|
|
1,819,710
|
|
|
|
5,451,401
|
|
|
|
5,904,458
|
|
Cost of land
closings
|
|
|
24,598
|
|
|
|
13,505
|
|
|
|
55,218
|
|
|
|
63,644
|
|
Financial services
expenses
|
|
|
23,372
|
|
|
|
17,868
|
|
|
|
93,990
|
|
|
|
83,960
|
|
Amenity and other
expenses
|
|
|
9,139
|
|
|
|
41,225
|
|
|
|
34,149
|
|
|
|
80,489
|
|
Total cost of revenue
|
|
|
1,527,761
|
|
|
|
1,892,308
|
|
|
|
5,634,758
|
|
|
|
6,132,551
|
|
Gross
margin
|
|
|
492,104
|
|
|
|
599,818
|
|
|
|
1,783,073
|
|
|
|
2,092,366
|
|
Sales, commissions and
other marketing costs
|
|
|
113,543
|
|
|
|
118,124
|
|
|
|
418,134
|
|
|
|
398,074
|
|
General and
administrative expenses
|
|
|
74,669
|
|
|
|
55,232
|
|
|
|
280,573
|
|
|
|
245,138
|
|
Net (income)/loss from
unconsolidated entities
|
|
|
(1,708)
|
|
|
|
11,198
|
|
|
|
(8,757)
|
|
|
|
14,184
|
|
Interest
(income)/expense, net
|
|
|
(564)
|
|
|
|
3,851
|
|
|
|
(12,577)
|
|
|
|
17,674
|
|
Other expense,
net
|
|
|
80,884
|
|
|
|
43,218
|
|
|
|
87,567
|
|
|
|
38,497
|
|
Loss/(gain) on
extinguishment of debt, net
|
|
|
26
|
|
|
|
(334)
|
|
|
|
295
|
|
|
|
(13,876)
|
|
Income before income
taxes
|
|
|
225,254
|
|
|
|
368,529
|
|
|
|
1,017,838
|
|
|
|
1,392,675
|
|
Income tax
provision
|
|
|
52,092
|
|
|
|
93,128
|
|
|
|
248,097
|
|
|
|
336,428
|
|
Net income before
allocation to non-controlling interests
|
|
|
173,162
|
|
|
|
275,401
|
|
|
|
769,741
|
|
|
|
1,056,247
|
|
Net income attributable
to non-controlling interests
|
|
|
(577)
|
|
|
|
(70)
|
|
|
|
(812)
|
|
|
|
(3,447)
|
|
Net
income
|
|
$
|
172,585
|
|
|
$
|
275,331
|
|
|
$
|
768,929
|
|
|
$
|
1,052,800
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.61
|
|
|
$
|
2.54
|
|
|
$
|
7.09
|
|
|
$
|
9.16
|
|
Diluted
|
|
$
|
1.58
|
|
|
$
|
2.51
|
|
|
$
|
6.98
|
|
|
$
|
9.06
|
|
Weighted average number
of shares of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
107,227
|
|
|
|
108,277
|
|
|
|
108,424
|
|
|
|
114,982
|
|
Diluted
|
|
|
108,969
|
|
|
|
109,643
|
|
|
|
110,145
|
|
|
|
116,221
|
|
Taylor Morrison Home
Corporation
Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
|
December 31,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
798,568
|
|
|
$
|
724,488
|
|
Restricted
cash
|
|
|
8,531
|
|
|
|
2,147
|
|
Total cash
|
|
|
807,099
|
|
|
|
726,635
|
|
Owned
inventory
|
|
|
5,473,828
|
|
|
|
5,346,905
|
|
Consolidated real
estate not owned
|
|
|
71,618
|
|
|
|
23,971
|
|
Total real estate
inventory
|
|
|
5,545,446
|
|
|
|
5,370,876
|
|
Land
deposits
|
|
|
203,217
|
|
|
|
263,356
|
|
Mortgage loans held for
sale
|
|
|
193,344
|
|
|
|
346,364
|
|
Lease right of use
assets
|
|
|
75,203
|
|
|
|
90,446
|
|
Prepaid expenses and
other assets, net
|
|
|
290,925
|
|
|
|
265,392
|
|
Other receivables,
net
|
|
|
184,518
|
|
|
|
191,504
|
|
Investments in
unconsolidated entities
|
|
|
346,192
|
|
|
|
282,900
|
|
Deferred tax assets,
net
|
|
|
67,825
|
|
|
|
67,656
|
|
Property and equipment,
net
|
|
|
295,121
|
|
|
|
202,398
|
|
Goodwill
|
|
|
663,197
|
|
|
|
663,197
|
|
Total assets
|
|
$
|
8,672,087
|
|
|
$
|
8,470,724
|
|
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
263,481
|
|
|
$
|
269,761
|
|
Accrued expenses and
other liabilities
|
|
|
549,074
|
|
|
|
490,253
|
|
Lease
liabilities
|
|
|
84,999
|
|
|
|
100,174
|
|
Customer
deposits
|
|
|
326,087
|
|
|
|
412,092
|
|
Estimated development
liabilities
|
|
|
27,440
|
|
|
|
43,753
|
|
Senior notes,
net
|
|
|
1,468,695
|
|
|
|
1,816,303
|
|
Loans payable and other
borrowings
|
|
|
394,943
|
|
|
|
361,486
|
|
Revolving credit
facility borrowings
|
|
|
—
|
|
|
|
—
|
|
Mortgage warehouse
borrowings
|
|
|
153,464
|
|
|
|
306,072
|
|
Liabilities
attributable to consolidated real estate not owned
|
|
|
71,618
|
|
|
|
23,971
|
|
Total
liabilities
|
|
$
|
3,339,801
|
|
|
$
|
3,823,865
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
5,332,286
|
|
|
|
4,646,859
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,672,087
|
|
|
$
|
8,470,724
|
|
Homes Closed and
Home Closings Revenue, Net:
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Homes
Closed
|
|
|
Home Closings
Revenue, Net
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
1,252
|
|
|
|
1,612
|
|
|
|
(22.3)
|
%
|
|
$
|
712,461
|
|
|
$
|
916,509
|
|
|
|
(22.3)
|
%
|
|
$
|
569
|
|
|
$
|
569
|
|
|
|
0.0
|
%
|
Central
|
|
|
767
|
|
|
|
1,082
|
|
|
|
(29.1)
|
%
|
|
|
436,080
|
|
|
|
667,040
|
|
|
|
(34.6)
|
%
|
|
|
569
|
|
|
|
616
|
|
|
|
(7.6)
|
%
|
West
|
|
|
1,171
|
|
|
|
1,103
|
|
|
|
6.2
|
%
|
|
|
789,091
|
|
|
|
794,618
|
|
|
|
(0.7)
|
%
|
|
|
674
|
|
|
|
720
|
|
|
|
(6.4)
|
%
|
Total
|
|
|
3,190
|
|
|
|
3,797
|
|
|
|
(16.0)
|
%
|
|
$
|
1,937,632
|
|
|
$
|
2,378,167
|
|
|
|
(18.5)
|
%
|
|
$
|
607
|
|
|
$
|
626
|
|
|
|
(3.0)
|
%
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
Homes
Closed
|
|
|
Home Closings
Revenue, Net
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
4,480
|
|
|
|
4,764
|
|
|
|
(6.0)
|
%
|
|
$
|
2,619,322
|
|
|
$
|
2,673,951
|
|
|
|
(2.0)
|
%
|
|
$
|
585
|
|
|
$
|
561
|
|
|
|
4.3
|
%
|
Central
|
|
|
3,143
|
|
|
|
3,359
|
|
|
|
(6.4)
|
%
|
|
|
1,935,500
|
|
|
|
2,014,869
|
|
|
|
(3.9)
|
%
|
|
|
616
|
|
|
|
600
|
|
|
|
2.7
|
%
|
West
|
|
|
3,872
|
|
|
|
4,524
|
|
|
|
(14.4)
|
%
|
|
|
2,604,035
|
|
|
|
3,200,551
|
|
|
|
(18.6)
|
%
|
|
|
673
|
|
|
|
707
|
|
|
|
(4.8)
|
%
|
Total
|
|
|
11,495
|
|
|
|
12,647
|
|
|
|
(9.1)
|
%
|
|
$
|
7,158,857
|
|
|
$
|
7,889,371
|
|
|
|
(9.3)
|
%
|
|
$
|
623
|
|
|
$
|
624
|
|
|
|
(0.2)
|
%
|
Net Sales
Orders:
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Net Sales
Orders
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
902
|
|
|
|
939
|
|
|
|
(3.9)
|
%
|
|
$
|
579,540
|
|
|
$
|
527,898
|
|
|
|
9.8
|
%
|
|
$
|
643
|
|
|
$
|
562
|
|
|
|
14.4
|
%
|
Central
|
|
|
602
|
|
|
|
310
|
|
|
|
94.2
|
%
|
|
|
339,973
|
|
|
|
184,422
|
|
|
|
84.3
|
%
|
|
|
565
|
|
|
|
595
|
|
|
|
(5.0)
|
%
|
West
|
|
|
857
|
|
|
|
561
|
|
|
|
52.8
|
%
|
|
|
565,747
|
|
|
|
334,113
|
|
|
|
69.3
|
%
|
|
|
660
|
|
|
|
596
|
|
|
|
10.7
|
%
|
Total
|
|
|
2,361
|
|
|
|
1,810
|
|
|
|
30.4
|
%
|
|
$
|
1,485,260
|
|
|
$
|
1,046,433
|
|
|
|
41.9
|
%
|
|
$
|
629
|
|
|
$
|
578
|
|
|
|
8.8
|
%
|
|
|
Twelve Months Ended
December 31,
|
|
|
|
Net Sales
Orders
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
3,968
|
|
|
|
4,128
|
|
|
|
(3.9)
|
%
|
|
$
|
2,366,528
|
|
|
$
|
2,504,696
|
|
|
|
(5.5)
|
%
|
|
$
|
596
|
|
|
$
|
607
|
|
|
|
(1.8)
|
%
|
Central
|
|
|
2,725
|
|
|
|
2,289
|
|
|
|
19.0
|
%
|
|
|
1,588,169
|
|
|
|
1,478,528
|
|
|
|
7.4
|
%
|
|
|
583
|
|
|
|
646
|
|
|
|
(9.8)
|
%
|
West
|
|
|
4,137
|
|
|
|
3,070
|
|
|
|
34.8
|
%
|
|
|
2,784,803
|
|
|
|
2,212,999
|
|
|
|
25.8
|
%
|
|
|
673
|
|
|
|
721
|
|
|
|
(6.7)
|
%
|
Total
|
|
|
10,830
|
|
|
|
9,487
|
|
|
|
14.2
|
%
|
|
$
|
6,739,500
|
|
|
$
|
6,196,223
|
|
|
|
8.8
|
%
|
|
$
|
622
|
|
|
$
|
653
|
|
|
|
(4.7)
|
%
|
Sales Order
Backlog:
|
|
|
|
As of
December 31,
|
|
|
|
Sold Homes in
Backlog
|
|
|
Sales
Value
|
|
|
Average Selling
Price
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
|
2023
|
|
|
2022
|
|
|
Change
|
|
East
|
|
|
2,071
|
|
|
|
2,583
|
|
|
|
(19.8)
|
%
|
|
$
|
1,480,268
|
|
|
$
|
1,733,062
|
|
|
|
(14.6)
|
%
|
|
$
|
715
|
|
|
$
|
671
|
|
|
|
6.6
|
%
|
Central
|
|
|
1,299
|
|
|
|
1,717
|
|
|
|
(24.3)
|
%
|
|
|
864,162
|
|
|
|
1,211,493
|
|
|
|
(28.7)
|
%
|
|
|
665
|
|
|
|
706
|
|
|
|
(5.8)
|
%
|
West
|
|
|
1,919
|
|
|
|
1,654
|
|
|
|
16.0
|
%
|
|
|
1,300,200
|
|
|
|
1,119,432
|
|
|
|
16.1
|
%
|
|
|
678
|
|
|
|
677
|
|
|
|
0.1
|
%
|
Total
|
|
|
5,289
|
|
|
|
5,954
|
|
|
|
(11.2)
|
%
|
|
$
|
3,644,630
|
|
|
$
|
4,063,987
|
|
|
|
(10.3)
|
%
|
|
$
|
689
|
|
|
$
|
683
|
|
|
|
0.9
|
%
|
Ending Active
Selling Communities:
|
|
|
|
As of
|
|
|
Change
|
|
|
|
December 31,
2023
|
|
|
December 31,
2022
|
|
|
|
|
East
|
|
|
108
|
|
|
|
106
|
|
|
|
1.9
|
%
|
Central
|
|
|
93
|
|
|
|
104
|
|
|
|
(10.6)
|
%
|
West
|
|
|
126
|
|
|
|
114
|
|
|
|
10.5
|
%
|
Total
|
|
|
327
|
|
|
|
324
|
|
|
|
0.9
|
%
|
Reconciliation of Non-GAAP Financial Measures
In addition to the results reported in accordance with
accounting principles generally accepted in the United States ("GAAP"), we provide our
investors with supplemental information relating to: (i) adjusted
net income and adjusted earnings per common share, (ii) adjusted
income before income taxes and related margin, (iii) adjusted home
closings gross margin; (iv) EBITDA and adjusted EBITDA and (v) net
homebuilding debt to capitalization ratio.
Adjusted net income, adjusted earnings per common share and
adjusted income before income taxes and related margin are non-GAAP
financial measures that reflect the net income/(loss) available to
the Company excluding, to the extent applicable in a given period,
the impact of inventory impairment charges, impairment of
investment in unconsolidated entities, pre-acquisition abandonment
charges, gains/losses on land transfers to joint ventures,
extinguishment of debt, net, and legal settlements that the Company
deems not to be in the ordinary course of business and in the case
of adjusted net income and adjusted earnings per common share, the
tax impact due to such items. EBITDA and Adjusted EBITDA are
non-GAAP financial measures that measure performance by adjusting
net income before allocation to non-controlling interests to
exclude, as applicable, interest expense/(income), net,
amortization of capitalized interest, income taxes, depreciation
and amortization (EBITDA), non-cash compensation expense, if any,
inventory impairment charges, impairment of investment in
unconsolidated entities, pre-acquisition abandonment charges,
gains/losses on land transfers to joint ventures, extinguishment of
debt, net and legal settlements that the Company deems not to be in
the ordinary course of business. Net homebuilding debt to
capitalization ratio is a non-GAAP financial measure we calculate
by dividing (i) total debt, plus unamortized debt issuance
cost/(premium), net, and less mortgage warehouse borrowings, net of
unrestricted cash and cash equivalents ("net homebuilding debt"),
by (ii) total capitalization (the sum of net homebuilding debt and
total stockholders' equity). Adjusted home closings gross margin is
a non-GAAP financial measure based on GAAP home closings gross
margin (which is inclusive of capitalized interest), excluding
inventory impairment charges.
Beginning with the fourth quarter of 2023, we are excluding the
impact of legal settlements that the Company deems not to be in the
ordinary course of business from our calculation of Adjusted Net
Income and Adjusted EBITDA, as we believe such legal settlements
are not characteristic of our underlying operating
performance. The Company believes the exclusion of such
amounts is useful to investors as it assists in the comparison of
our operational performance across different periods. While
all previously reported periods have been conformed to the new
definition, we determined that no further adjustments to prior
periods were necessary under the new definition.
Management uses these non-GAAP financial measures to evaluate
our performance on a consolidated basis, as well as the performance
of our regions, and to set targets for performance-based
compensation. We also use the ratio of net homebuilding debt
to total capitalization as an indicator of overall leverage and to
evaluate our performance against other companies in the
homebuilding industry. In the future, we may include
additional adjustments in the above-described non-GAAP financial
measures to the extent we deem them appropriate and useful to
management and investors.
We believe that adjusted net income, adjusted earnings per
common share, adjusted income before income taxes and related
margin, as well as EBITDA and adjusted EBITDA, are useful for
investors in order to allow them to evaluate our operations without
the effects of various items we do not believe are characteristic
of our ongoing operations or performance and also because such
metrics assist both investors and management in analyzing and
benchmarking the performance and value of our business. Adjusted
EBITDA also provides an indicator of general economic performance
that is not affected by fluctuations in interest rates or effective
tax rates, levels of depreciation or amortization, or unusual
items. Because we use the ratio of net homebuilding debt to total
capitalization to evaluate our performance against other companies
in the homebuilding industry, we believe this measure is also
relevant and useful to investors for that reason. We believe that
adjusted home closings gross margin is useful to investors because
it allows investors to evaluate the performance of our homebuilding
operations without the varying effects of items or transactions we
do not believe are characteristic of our ongoing operations or
performance.
These non-GAAP financial measures should be considered in
addition to, rather than as a substitute for, the comparable U.S.
GAAP financial measures of our operating performance or liquidity.
Although other companies in the homebuilding industry may report
similar information, their definitions may differ. We urge
investors to understand the methods used by other companies to
calculate similarly-titled non-GAAP financial measures before
comparing their measures to ours.
A reconciliation of (i) adjusted net income and adjusted
earnings per common share, (ii) adjusted income before income taxes
and related margin, (iii) adjusted home closings gross margin;
(iv) EBITDA and adjusted EBITDA and (v) net homebuilding debt to
capitalization ratio to the comparable GAAP measures is presented
below.
Adjusted Net Income
and Adjusted Earnings Per Common Share
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
thousands, except per share data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net income
|
|
$
|
172,585
|
|
|
$
|
275,331
|
|
|
$
|
768,929
|
|
|
$
|
1,052,800
|
|
Legal
settlements(1)
|
|
|
64,665
|
|
|
|
-
|
|
|
|
64,665
|
|
|
|
-
|
|
Inventory impairments
(2)
|
|
|
-
|
|
|
|
24,870
|
|
|
|
11,791
|
|
|
|
24,870
|
|
Impairment of
investment in unconsolidated entities(3)
|
|
|
-
|
|
|
|
11,186
|
|
|
|
-
|
|
|
|
14,714
|
|
Pre-acquisition
abandonment charges(1)
|
|
|
1,176
|
|
|
|
24,903
|
|
|
|
4,235
|
|
|
|
33,240
|
|
Gain on land transfers
to joint ventures(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,508)
|
|
Loss/(gain) on
extinguishment of debt, net(4)
|
|
|
26
|
|
|
|
(334)
|
|
|
|
295
|
|
|
|
(13,876)
|
|
Tax impact due to above
non-GAAP reconciling items
|
|
|
(15,216)
|
|
|
|
(14,726)
|
|
|
|
(19,737)
|
|
|
|
(10,654)
|
|
Adjusted net
income
|
|
$
|
223,236
|
|
|
$
|
321,230
|
|
|
$
|
830,178
|
|
|
$
|
1,086,586
|
|
Basic weighted average
number of shares
|
|
|
107,227
|
|
|
|
108,277
|
|
|
|
108,424
|
|
|
|
114,982
|
|
Adjusted earnings
per common share - Basic
|
|
$
|
2.08
|
|
|
$
|
2.97
|
|
|
$
|
7.66
|
|
|
$
|
9.45
|
|
Diluted weighted
average number of shares
|
|
|
108,969
|
|
|
|
109,643
|
|
|
|
110,145
|
|
|
|
116,221
|
|
Adjusted earnings
per common share - Diluted
|
|
$
|
2.05
|
|
|
$
|
2.93
|
|
|
$
|
7.54
|
|
|
$
|
9.35
|
|
Adjusted Income
Before Income Taxes and Related Margin
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Income before income
taxes
|
|
$
|
225,254
|
|
|
$
|
368,529
|
|
|
$
|
1,017,838
|
|
|
$
|
1,392,675
|
|
Legal
settlements(1)
|
|
|
64,665
|
|
|
|
-
|
|
|
|
64,665
|
|
|
|
-
|
|
Inventory
impairments(2)
|
|
|
-
|
|
|
|
24,870
|
|
|
|
11,791
|
|
|
|
24,870
|
|
Impairment of
investment in unconsolidated entities(3)
|
|
|
-
|
|
|
|
11,186
|
|
|
|
-
|
|
|
|
14,714
|
|
Pre-acquisition
abandonment charges(1)
|
|
|
1,176
|
|
|
|
24,903
|
|
|
|
4,235
|
|
|
|
33,240
|
|
Gain on land transfers
to joint ventures(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(14,508)
|
|
Loss/(gain) on
extinguishment of debt, net(4)
|
|
|
26
|
|
|
|
(334)
|
|
|
|
295
|
|
|
|
(13,876)
|
|
Adjusted income
before income taxes
|
|
$
|
291,121
|
|
|
$
|
429,154
|
|
|
$
|
1,098,824
|
|
|
$
|
1,437,115
|
|
Total
revenue
|
|
$
|
2,019,865
|
|
|
$
|
2,492,126
|
|
|
$
|
7,417,831
|
|
|
$
|
8,224,917
|
|
Income before income
taxes margin
|
|
|
11.2
|
%
|
|
|
14.8
|
%
|
|
|
13.7
|
%
|
|
|
16.9
|
%
|
Adjusted income
before income taxes margin
|
|
|
14.4
|
%
|
|
|
17.2
|
%
|
|
|
14.8
|
%
|
|
|
17.5
|
%
|
Adjusted Home
Closings Gross Margin
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Home closings
revenue
|
|
$
|
1,937,632
|
|
|
$
|
2,378,167
|
|
|
$
|
7,158,857
|
|
|
$
|
7,889,371
|
|
Cost of home
closings
|
|
|
1,470,652
|
|
|
|
1,819,710
|
|
|
|
5,451,401
|
|
|
|
5,904,458
|
|
Home closings gross
margin
|
|
$
|
466,980
|
|
|
$
|
558,457
|
|
|
$
|
1,707,456
|
|
|
$
|
1,984,913
|
|
Inventory impairment
charges(2)
|
|
|
-
|
|
|
|
24,870
|
|
|
|
11,791
|
|
|
|
24,870
|
|
Adjusted home
closings gross margin
|
|
$
|
466,980
|
|
|
$
|
583,327
|
|
|
$
|
1,719,247
|
|
|
$
|
2,009,783
|
|
Home closings gross
margin as a percentage of home closings revenue
|
|
|
24.1
|
%
|
|
|
23.5
|
%
|
|
|
23.9
|
%
|
|
|
25.2
|
%
|
Adjusted home closings
gross margin as a percentage of home closings revenue
|
|
|
24.1
|
%
|
|
|
24.5
|
%
|
|
|
24.0
|
%
|
|
|
25.5
|
%
|
EBITDA and Adjusted
EBITDA Reconciliation
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net income before
allocation to non-controlling interests
|
|
$
|
173,162
|
|
|
$
|
275,401
|
|
|
$
|
769,741
|
|
|
$
|
1,056,247
|
|
Interest
(income)/expense, net
|
|
|
(564)
|
|
|
|
3,851
|
|
|
|
(12,577)
|
|
|
|
17,674
|
|
Amortization of
capitalized interest
|
|
|
37,491
|
|
|
|
40,836
|
|
|
|
134,870
|
|
|
|
138,460
|
|
Income tax
provision
|
|
|
52,092
|
|
|
|
93,128
|
|
|
|
248,097
|
|
|
|
336,428
|
|
Depreciation and
amortization
|
|
|
2,918
|
|
|
|
2,710
|
|
|
|
8,976
|
|
|
|
7,565
|
|
EBITDA
|
|
$
|
265,099
|
|
|
$
|
415,926
|
|
|
$
|
1,149,107
|
|
|
$
|
1,556,374
|
|
Legal
settlements(1)
|
|
|
64,665
|
|
|
|
-
|
|
|
|
64,665
|
|
|
|
-
|
|
Non-cash compensation
expense
|
|
|
7,589
|
|
|
|
9,427
|
|
|
|
26,095
|
|
|
|
26,901
|
|
Inventory
impairments(2)
|
|
|
—
|
|
|
|
24,870
|
|
|
|
11,791
|
|
|
|
24,870
|
|
Impairment of
investment in unconsolidated entities(3)
|
|
|
—
|
|
|
|
11,186
|
|
|
|
—
|
|
|
|
14,714
|
|
Pre-acquisition
abandonment charges(1)
|
|
|
1,176
|
|
|
|
24,903
|
|
|
|
4,235
|
|
|
|
33,240
|
|
Gain on land transfers
to joint ventures(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14,508)
|
|
Loss/(gain) on
extinguishment of debt, net(4)
|
|
|
26
|
|
|
|
(334)
|
|
|
|
295
|
|
|
|
(13,876)
|
|
Adjusted
EBITDA
|
|
$
|
338,555
|
|
|
$
|
485,978
|
|
|
$
|
1,256,188
|
|
|
$
|
1,627,715
|
|
Total
revenue
|
|
$
|
2,019,865
|
|
|
$
|
2,492,126
|
|
|
$
|
7,417,831
|
|
|
$
|
8,224,917
|
|
Net income before
allocation to non-controlling interests as a percentage of total
revenue
|
|
|
8.6
|
%
|
|
|
11.1
|
%
|
|
|
10.4
|
%
|
|
|
12.8
|
%
|
EBITDA as a
percentage of total revenue
|
|
|
13.1
|
%
|
|
|
16.7
|
%
|
|
|
15.5
|
%
|
|
|
18.9
|
%
|
Adjusted EBITDA as a
percentage of total revenue
|
|
|
16.8
|
%
|
|
|
19.5
|
%
|
|
|
16.9
|
%
|
|
|
19.8
|
%
|
Debt to
Capitalization Ratios Reconciliation
|
|
|
|
(Dollars in
thousands)
|
|
As of
December 31,
2023
|
|
|
As of
September 30,
2023
|
|
|
As of
December 31,
2022
|
|
Total debt
|
|
$
|
2,017,102
|
|
|
$
|
1,992,077
|
|
|
$
|
2,483,861
|
|
Plus: unamortized debt
issuance cost, net
|
|
|
8,375
|
|
|
|
8,815
|
|
|
|
10,767
|
|
Less: mortgage
warehouse borrowings
|
|
|
(153,464)
|
|
|
|
(191,645)
|
|
|
|
(306,072)
|
|
Total homebuilding
debt
|
|
$
|
1,872,013
|
|
|
$
|
1,809,247
|
|
|
$
|
2,188,556
|
|
Total equity
|
|
|
5,332,286
|
|
|
|
5,175,110
|
|
|
|
4,646,859
|
|
Total
capitalization
|
|
$
|
7,204,299
|
|
|
$
|
6,984,357
|
|
|
$
|
6,835,415
|
|
Total homebuilding
debt to capitalization ratio
|
|
|
26.0
|
%
|
|
|
25.9
|
%
|
|
|
32.0
|
%
|
Total homebuilding
debt
|
|
$
|
1,872,013
|
|
|
$
|
1,809,247
|
|
|
$
|
2,188,556
|
|
Less: cash and cash
equivalents
|
|
|
(798,568)
|
|
|
|
(613,811)
|
|
|
|
(724,488)
|
|
Net homebuilding
debt
|
|
$
|
1,073,445
|
|
|
$
|
1,195,436
|
|
|
$
|
1,464,068
|
|
Total equity
|
|
|
5,332,286
|
|
|
|
5,175,110
|
|
|
|
4,646,859
|
|
Total
capitalization
|
|
$
|
6,405,731
|
|
|
$
|
6,370,546
|
|
|
$
|
6,110,927
|
|
Net homebuilding
debt to capitalization ratio
|
|
|
16.8
|
%
|
|
|
18.8
|
%
|
|
|
24.0
|
%
|
|
|
1)
|
Included in Other
expense, net on the Consolidated Statement of Operations
|
2)
|
Included in Cost of
home closings on the Consolidated Statement of
Operations
|
3)
|
Included in Net
(income)/loss from unconsolidated entities on the Consolidated
Statement of Operations
|
4)
|
Included in Loss/(gain)
on extinguishment of debt, net on the Consolidated Statement of
Operations
|
CONTACT:
Mackenzie
Aron, VP Investor Relations
(480) 734-2060
investor@taylormorrison.com
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SOURCE Taylor Morrison