SCOTTSDALE, Ariz., July 27,
2022 /PRNewswire/ -- Taylor Morrison Home Corporation
(NYSE: TMHC), a leading national land developer and homebuilder,
announced results for the second quarter ended June 30, 2022. Reported net income was
$291 million, or $2.45 per diluted share, compared to $124 million, or $0.95 per diluted share, in the second quarter of
2021. Excluding gains on an extinguishment of debt and land
transfers to unconsolidated joint ventures in the second quarter of
2022, adjusted net income of $271
million and adjusted earnings per diluted share of
$2.27 were up 118 percent and 139
percent, respectively, from the second quarter of 2021.
Second quarter highlights included the following, as compared to
the prior-year quarter:
- Home closings revenue increased 15 percent to $1.9 billion.
- Home closings gross margin improved 750 basis points to 26.6
percent.
- SG&A as a percentage of home closings revenue improved 140
basis points to 8.8 percent.
- Homebuilding lot supply increased eight percent to
approximately 82,000 owned and controlled homesites.
- Controlled lots as a percentage of total lot supply increased
approximately 600 basis points to 41 percent.
- Repurchased 6.8 million shares outstanding for $172 million.
- Return on equity improved 1,090 basis points to 23.1
percent.
"We are pleased to share the results of our second quarter,
which included new Company highs for home closings gross margin,
earnings per diluted share and return on equity. To have achieved
these record results despite the unprecedented spike in mortgage
interest rates, ongoing supply chain challenges and broader
economic uncertainty demonstrates the strength of our scale, team,
strategy, land portfolio and well-qualified consumer set. These
strengths will continue to serve us well as we adapt to today's
market reality," said Sheryl Palmer,
Taylor Morrison Chairman and
CEO.
"Housing market conditions evolved quickly during the second
quarter as the impact of higher interest rates collided with home
price appreciation, stock market volatility and geopolitical
tensions. The rapid deterioration in affordability and consumer
confidence cooled homebuying demand as shoppers faced significant
uncertainty, related as much to the sheer speed of change as to the
shock of higher costs. These headwinds became most pronounced in
the latter weeks of the quarter and have continued thus far in
July. The impact has been felt across our wide range of price
points, geographies and consumer groups, albeit to varying degrees.
Our move-up and active lifestyle segments have displayed greater
resiliency—from a traffic, sales, pricing and cancellation
perspective—compared to our entry-level segment," said Palmer.
"As the market continues to search for its new equilibrium, our
homebuilding and mortgage teams have acted quickly to reestablish
sales momentum, maintain the quality of our backlog and manage
production and inventory levels. We remain focused on protecting
our strong balance sheet and maintaining disciplined guardrails on
land investment. With a well-vintaged land pipeline of 82,000
homesites, we are in a favorable position to drive future growth,
be patient with investment spend and weather changing market
conditions," continued Palmer.
Lou Steffens, Executive Vice
President and Chief Financial Officer, said "following the strong
upside to our second quarter home closings gross margin, we are
once again raising our full-year outlook and now expect to generate
a home closings gross margin between 25 percent and 26 percent in
2022. This margin performance has been driven by our focus on
operational effectiveness, acquisition synergies and robust pricing
power, which has more than offset cost pressure from rising
inflation and supply chain constraints. However, given the elevated
level of uncertainty in today's market and ongoing disruptions and
delays in the construction cycle, we now anticipate our full-year
home closing volume to be around 13,500 deliveries."
"Our well-capitalized balance sheet is strong, with over
$1 billion of liquidity. During the
quarter, we reduced gross debt levels, which improved our long-term
risk profile and will enhance future gross margins. At the same
time, we accelerated our pace of share repurchases to $172 million, the highest level since 2018.
Looking ahead, we continue to expect to drive our return on equity
to the mid-to-high 20 percent range this year and remain on track
to reduce our net debt-to-capitalization ratio to the mid-20
percent range by year end," said Steffens.
Business Highlights (All comparisons are of the
current quarter to the prior-year quarter, unless indicated.)
Homebuilding
- Home closings revenue increased 15 percent to $1.9 billion, driven by a 24 percent increase in
average closing price to $621,000,
which more than offset a seven percent decline in home closings to
3,032.
- Home closings gross margin improved 750 basis points to 26.6
percent, a Company high. The improvement was driven by robust
pricing power, improved operating efficiencies and acquisition
synergies.
- SG&A as a percentage of home closings revenue declined 140
basis points to 8.8 percent due to top-line growth, cost management
and sales efficiencies from virtual sales tools, including lower
broker commissions.
- Net sales orders of 2,554 were down 25 percent compared to the
exceptional strength experienced in the prior year due to a decline
in the monthly absorption pace to 2.6 net sales orders per
community and lower community count.
- The Company's cancellation rate increased to 10.8% of gross
orders from 6.4% in the prior quarter and 5.2% a year ago, although
this remains below its historical average.
- Average net sales order price increased 17 percent to
$699,000, driven by robust pricing
power and a favorable mix impact from a greater penetration of
move-up transactions versus entry-level sales compared to a year
ago.
- Ending backlog was 8,922 sold homes, down 13 percent, with a
sales value of $6.1 billion, up six
percent.
Land Portfolio
- Investment in homebuilding land acquisition and development
totaled $451 million, of which 52
percent was development-related versus 45 percent a year ago.
- Homebuilding lot supply was approximately 82,000 owned and
controlled homesites, up eight percent.
- Controlled homebuilding lots as a percentage of total lot
supply was 41 percent, up from 35 percent.
- Based on trailing twelve-month home closings, total
homebuilding lots represented 3.6 years of owned supply and 6.1
years of total supply.
Financial Services
- The mortgage capture rate equaled 67 percent.
- Borrowers had an average credit score of 755 and debt-to-income
ratio of 38 percent.
Balance Sheet
- At quarter end, total available liquidity was approximately
$1.1 billion, including $378 million of unrestricted cash and
$684 million of undrawn capacity on
the Company's corporate revolving credit facilities.
- Net homebuilding debt-to-capital equaled 36.4 percent.
- The Company repurchased 6.8 million of its outstanding shares,
or 5.5 percent of its prior diluted shares outstanding, for
$172 million at an average share
price of $25.43. At quarter end, the
Company had $425 million remaining on
its $500 million share repurchase
authorization.
Business Outlook
Third Quarter 2022
- Ending active community count is expected to be between 315 to
325
- Home closings are expected to be between 3,200 and 3,400
- GAAP home closings gross margin is expected to be consistent
with the second quarter
- Effective tax rate is expected to be approximately 25
percent
- Diluted share count is expected to be approximately 115
million
Full Year 2022
- Ending active community count is expected to be around 350
- Home closings are now expected to be around 13,500
- GAAP home closings gross margin is now expected to be between
25 percent and 26 percent
- Average sales price is expected to be at least $625,000
- SG&A as a percentage of home closings revenue is expected
to be in the mid-to-high eight percent range
- Effective tax rate is now expected to be approximately 25
percent
- Diluted share count is now expected to be approximately 118
million
- Homebuilding land and development spend is now expected to be
around $2 billion
Quarterly Financial
Comparison
|
|
|
|
|
|
|
($ in
thousands)
|
|
Q2
2022
|
|
Q2
2021
|
|
Q2 2022 vs. Q2
2021
|
|
Total
Revenue
|
|
$1,995,023
|
|
$1,719,280
|
|
16.0 %
|
|
Home Closings
Revenue
|
|
$1,883,020
|
|
$1,644,380
|
|
14.5 %
|
|
Home Closings Gross
Margin
|
|
$501,410
|
|
$313,339
|
|
60.0 %
|
|
|
|
26.6 %
|
|
19.1 %
|
|
750 bps
increase
|
|
SG&A
|
|
$165,542
|
|
$167,557
|
|
(1.2) %
|
|
% of Home Closings
Revenue
|
|
8.8 %
|
|
10.2 %
|
|
140 bps
leverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Conference Call Webcast
A public webcast to discuss the Company's second quarter 2022
earnings will be held later today at 8:30
a.m. EST. A live audio webcast of the conference call will
be available on Taylor Morrison's
website at investors.taylormorrison.com under the Events &
Presentations tab. For call participants, the dial-in number is
(844) 200-6205 and conference ID is 073087. The call will be
recorded and available for replay on the Company's website later
today and will be available for one year from the date of the
original earnings call.
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, luxury and 55-plus active lifestyle homebuyers under our
family of brands—including Taylor
Morrison, Esplanade, Darling Homes Collection by
Taylor Morrison and Christopher Todd
Communities built by Taylor
Morrison. From 2016-2022, 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 scale and scope of
the ongoing COVID-19 pandemic; 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 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
Condensed
Consolidated Statements of Operations
(In thousands, except
per share amounts, unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Home closings revenue,
net
|
|
$ 1,883,020
|
|
$ 1,644,380
|
|
$ 3,527,429
|
|
$
3,007,809
|
Land closings
revenue
|
|
36,816
|
|
32,057
|
|
52,426
|
|
36,946
|
Financial services
revenue
|
|
35,471
|
|
37,392
|
|
70,670
|
|
81,457
|
Amenity and other
revenue
|
|
39,716
|
|
5,451
|
|
47,622
|
|
10,880
|
Total
revenues
|
|
1,995,023
|
|
1,719,280
|
|
3,698,147
|
|
3,137,092
|
Cost of home
closings
|
|
1,381,610
|
|
1,331,041
|
|
2,646,584
|
|
2,441,283
|
Cost of land
closings
|
|
24,204
|
|
28,138
|
|
38,568
|
|
32,165
|
Financial services
expenses
|
|
21,483
|
|
25,935
|
|
45,697
|
|
49,934
|
Amenity and other
expense
|
|
26,246
|
|
5,463
|
|
32,690
|
|
10,566
|
Total cost of
revenues
|
|
1,453,543
|
|
1,390,577
|
|
2,763,539
|
|
2,533,948
|
Gross margin
|
|
541,480
|
|
328,703
|
|
934,608
|
|
603,144
|
Sales, commissions and
other marketing costs
|
|
96,135
|
|
97,560
|
|
185,258
|
|
183,512
|
General and
administrative expenses
|
|
69,407
|
|
69,997
|
|
137,549
|
|
131,550
|
Net loss/(income) from
unconsolidated entities
|
|
3,637
|
|
(2,126)
|
|
1,806
|
|
(7,787)
|
Interest
expense/(income), net
|
|
5,189
|
|
3
|
|
9,441
|
|
(116)
|
Other (income)/expense,
net
|
|
(11,014)
|
|
45
|
|
(10,472)
|
|
1,020
|
Gain on extinguishment
of debt, net
|
|
(13,471)
|
|
—
|
|
(13,471)
|
|
—
|
Income before income
taxes
|
|
391,597
|
|
163,224
|
|
624,497
|
|
294,965
|
Income tax
provision
|
|
98,443
|
|
38,469
|
|
152,882
|
|
67,767
|
Net income before
allocation to non-controlling interests
|
|
293,154
|
|
124,755
|
|
471,615
|
|
227,198
|
Net income attributable
to non-controlling interests - joint
ventures
|
|
(2,167)
|
|
(608)
|
|
(3,925)
|
|
(5,030)
|
Net income available to
Taylor Morrison Home Corporation
|
|
$
290,987
|
|
$
124,147
|
|
$
467,690
|
|
$
222,168
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.47
|
|
$
0.97
|
|
$
3.91
|
|
$
1.73
|
Diluted
|
|
$
2.45
|
|
$
0.95
|
|
$
3.87
|
|
$
1.70
|
Weighted average number
of shares of common stock:
|
|
|
|
|
|
|
|
|
Basic
|
|
117,932
|
|
128,440
|
|
119,550
|
|
128,661
|
Diluted
|
|
118,931
|
|
130,259
|
|
120,796
|
|
130,766
|
Taylor Morrison Home
Corporation
Condensed
Consolidated Balance Sheets
(In
thousands)
|
|
|
June 30,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
378,340
|
|
$
832,821
|
Restricted
cash
|
|
953
|
|
3,519
|
Total cash, cash
equivalents, and restricted cash
|
|
379,293
|
|
836,340
|
Owned
inventory
|
|
5,975,551
|
|
5,444,207
|
Consolidated real
estate not owned
|
|
70,817
|
|
55,314
|
Total real estate
inventory
|
|
6,046,368
|
|
5,499,521
|
Land
deposits
|
|
278,314
|
|
229,535
|
Mortgage loans held for
sale
|
|
203,238
|
|
467,534
|
Derivative
assets
|
|
4,918
|
|
2,110
|
Lease right of use
assets
|
|
82,876
|
|
85,863
|
Prepaid expenses and
other assets, net
|
|
157,252
|
|
314,986
|
Other receivables,
net
|
|
171,737
|
|
150,864
|
Investments in
unconsolidated entities
|
|
291,560
|
|
171,406
|
Deferred tax assets,
net
|
|
151,240
|
|
151,240
|
Property and equipment,
net
|
|
220,230
|
|
155,181
|
Goodwill
|
|
663,197
|
|
663,197
|
Total
assets
|
|
$
8,650,223
|
|
$
8,727,777
|
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$
291,337
|
|
$
253,348
|
Accrued expenses and
other liabilities
|
|
431,478
|
|
525,209
|
Lease
liabilities
|
|
91,872
|
|
96,172
|
Income taxes
payable
|
|
1,855
|
|
—
|
Customer
deposits
|
|
579,945
|
|
485,705
|
Estimated development
liabilities
|
|
38,280
|
|
38,923
|
Senior notes,
net
|
|
2,173,998
|
|
2,452,322
|
Loans payable and other
borrowings
|
|
447,191
|
|
404,386
|
Revolving credit
facility borrowings
|
|
150,000
|
|
31,529
|
Mortgage warehouse
borrowings
|
|
179,555
|
|
413,887
|
Liabilities
attributable to consolidated real estate not owned
|
|
70,817
|
|
55,314
|
Total
liabilities
|
|
$
4,456,328
|
|
$
4,756,795
|
Stockholders'
Equity
|
|
|
|
|
Total stockholders'
equity
|
|
4,193,895
|
|
3,970,982
|
Total liabilities and
stockholders' equity
|
|
$
8,650,223
|
|
$
8,727,777
|
Homes Closed and
Home Closings Revenue, Net:
|
|
|
Three Months Ended
June 30,
|
|
|
Homes
Closed
|
|
Home Closings
Revenue, Net
|
|
Average Selling
Price
|
($ in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
East
|
|
1,097
|
|
1,245
|
|
(11.9) %
|
|
$
613,176
|
|
$
563,326
|
|
8.8 %
|
|
$
559
|
|
$
452
|
|
23.7 %
|
Central
|
|
778
|
|
791
|
|
(1.6)
|
|
457,006
|
|
382,743
|
|
19.4
|
|
587
|
|
484
|
|
21.3
|
West
|
|
1,157
|
|
1,232
|
|
(6.1)
|
|
812,838
|
|
698,311
|
|
16.4
|
|
703
|
|
567
|
|
24.0
|
Total
|
|
3,032
|
|
3,268
|
|
(7.2) %
|
|
$
1,883,020
|
|
$
1,644,380
|
|
14.5 %
|
|
$
621
|
|
$
503
|
|
23.5 %
|
|
|
Six Months Ended
June 30,
|
|
|
Homes
Closed
|
|
Home Closings
Revenue, Net
|
|
Average Selling
Price
|
($ in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
East
|
|
2,034
|
|
2,297
|
|
(11.4) %
|
|
$
1,119,172
|
|
$
1,009,211
|
|
10.9 %
|
|
$ 550
|
|
$
439
|
|
25.3 %
|
Central
|
|
1,442
|
|
1,482
|
|
(2.7)
|
|
825,582
|
|
702,920
|
|
17.5
|
|
573
|
|
474
|
|
20.9
|
West
|
|
2,324
|
|
2,310
|
|
0.6
|
|
1,582,675
|
|
1,295,678
|
|
22.2
|
|
681
|
|
561
|
|
21.4
|
Total
|
|
5,800
|
|
6,089
|
|
(4.7) %
|
|
$
3,527,429
|
|
$
3,007,809
|
|
17.3 %
|
|
$ 608
|
|
$
494
|
|
23.1 %
|
Net Sales
Orders:
|
|
|
Three Months Ended
June 30,
|
|
|
Net Sales
Orders
|
|
Sales
Value
|
|
Average Selling
Price
|
($ in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
East
|
|
1,121
|
|
1,302
|
|
(13.9) %
|
|
$ 730,495
|
|
$ 713,398
|
|
2.4 %
|
|
$
652
|
|
$
548
|
|
19.0 %
|
Central
|
|
642
|
|
850
|
|
(24.5)
|
|
443,146
|
|
500,976
|
|
(11.5)
|
|
690
|
|
589
|
|
17.1
|
West
|
|
791
|
|
1,270
|
|
(37.7)
|
|
610,932
|
|
828,731
|
|
(26.3)
|
|
772
|
|
653
|
|
18.2
|
Total
|
|
2,554
|
|
3,422
|
|
(25.4) %
|
|
$ 1,784,573
|
|
$
2,043,105
|
|
(12.7) %
|
|
$
699
|
|
$
597
|
|
17.1 %
|
|
|
Six Months Ended
June 30,
|
|
|
Net Sales
Orders
|
|
Sales
Value
|
|
Average Selling
Price
|
($ in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
East
|
|
2,148
|
|
3,079
|
|
(30.2) %
|
|
$ 1,336,705
|
|
$
1,591,982
|
|
(16.0) %
|
|
$
622
|
|
$
517
|
|
20.3 %
|
Central
|
|
1,529
|
|
1,922
|
|
(20.4)
|
|
1,026,426
|
|
1,084,457
|
|
(5.4)
|
|
671
|
|
564
|
|
19.0
|
West
|
|
1,931
|
|
2,913
|
|
(33.7)
|
|
1,506,663
|
|
1,839,497
|
|
(18.1)
|
|
780
|
|
631
|
|
23.6
|
Total
|
|
5,608
|
|
7,914
|
|
(29.1) %
|
|
$ 3,869,794
|
|
$
4,515,936
|
|
(14.3) %
|
|
$
690
|
|
$
571
|
|
20.8 %
|
Sales Order
Backlog:
|
|
|
As of June
30,
|
|
|
Sold Homes in
Backlog
|
|
Sales
Value
|
|
Average Selling
Price
|
($ in
thousands)
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
East
|
|
3,333
|
|
3,617
|
|
(7.9) %
|
|
$
2,119,850
|
|
$
1,903,206
|
|
11.4 %
|
|
$
636
|
|
$
526
|
|
20.9 %
|
Central
|
|
2,874
|
|
2,838
|
|
1.3
|
|
1,948,678
|
|
1,581,686
|
|
23.2
|
|
678
|
|
557
|
|
21.7
|
West
|
|
2,715
|
|
3,773
|
|
(28.0)
|
|
2,030,972
|
|
2,250,680
|
|
(9.8)
|
|
748
|
|
597
|
|
25.3
|
Total
|
|
8,922
|
|
10,228
|
|
(12.8) %
|
|
$
6,099,500
|
|
$
5,735,572
|
|
6.3 %
|
|
$
684
|
|
$
561
|
|
21.9 %
|
Ending Active
Selling Communities:
|
|
|
As of
|
|
|
|
|
June 30,
2022
|
|
March 31,
2022
|
|
Change
|
East
|
|
117
|
|
121
|
|
(3.3) %
|
Central
|
|
104
|
|
106
|
|
(1.9)
|
West
|
|
102
|
|
97
|
|
5.2
|
Total
|
|
323
|
|
324
|
|
(0.3) %
|
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 have provided
information in this press release relating to: (i) adjusted net
income and adjusted earnings per common share, (ii) adjusted income
before income taxes and related margin, (iii) EBITDA and adjusted
EBITDA and (iv) 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 the impact of gains on land transfers and
extinguishment of debt, net, 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 interest expense/(income),
net, amortization of capitalized interest, income taxes,
depreciation and amortization (EBITDA), non-cash compensation
expense, if any, gains on land transfers and extinguishment of
debt, net. Net homebuilding debt to capitalization ratio is a
non-GAAP financial measure we calculate by dividing (i) total debt,
less unamortized debt issuance premiums, net, and mortgage
warehouse borrowings, net of unrestricted cash and cash
equivalents, by (ii) total capitalization (the sum of net
homebuilding debt and total stockholders' equity).
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.
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.
Adjusted Net Income
and Adjusted Earnings Per Share
|
|
|
Three Months
Ended
June 30,
|
($ in thousands,
except per share data)
|
|
2022
|
|
2021
|
Net income available to
TMHC
|
|
$ 290,987
|
|
$ 124,147
|
Gain on land
transfers
|
|
(13,700)
|
|
—
|
Gain on extinguishment
of debt, net
|
|
(13,471)
|
|
—
|
Tax impact due to above
non-GAAP reconciling items
|
|
6,749
|
|
—
|
Adjusted net
income
|
|
$ 270,565
|
|
$ 124,147
|
|
|
|
|
|
Basic weighted average
shares
|
|
117,932
|
|
128,440
|
Adjusted earnings
per common share - Basic
|
|
$
2.29
|
|
$
0.97
|
|
|
|
|
|
Diluted weighted
average shares
|
|
118,931
|
|
130,259
|
Adjusted earnings
per common share - Diluted
|
|
$
2.27
|
|
$
0.95
|
Adjusted Income
Before Income Taxes and Related Margin
|
|
|
Three Months
Ended
June
30,
|
($ in
thousands)
|
|
2022
|
|
2021
|
Income before income
taxes
|
|
$
391,597
|
|
$
163,224
|
Gain on land
transfers
|
|
(13,700)
|
|
—
|
Gain on extinguishment
of debt, net
|
|
(13,471)
|
|
—
|
Adjusted income
before income taxes
|
|
$
364,426
|
|
$
163,224
|
|
|
|
|
|
Total
revenues
|
|
$1,995,023
|
|
$1,719,280
|
|
|
|
|
|
Income before income
taxes margin
|
|
19.6 %
|
|
9.5 %
|
Adjusted income
before income taxes margin
|
|
18.3 %
|
|
9.5 %
|
|
|
|
|
|
EBITDA and Adjusted
EBITDA Reconciliation
|
|
|
Three Months Ended
June 30,
|
($ in
thousands)
|
|
2022
|
|
2021
|
Net income before
allocation to non-controlling interests
|
|
$
293,154
|
|
$
124,755
|
Interest expense,
net
|
|
5,189
|
|
3
|
Amortization of
capitalized interest
|
|
33,420
|
|
34,070
|
Income tax
provision
|
|
98,443
|
|
38,469
|
Depreciation and
amortization
|
|
1,442
|
|
2,193
|
EBITDA
|
|
$
431,648
|
|
$
199,490
|
Non-cash compensation
expense
|
|
5,278
|
|
4,654
|
Gain on land
transfers
|
|
(13,700)
|
|
—
|
Gain on extinguishment
of debt, net
|
|
(13,471)
|
|
—
|
Adjusted
EBITDA
|
|
$
409,755
|
|
$
204,144
|
|
|
|
|
|
Total
revenues
|
|
$
1,995,023
|
|
$
1,719,280
|
Net income before
allocation to non-controlling interests as a percentage of
total revenues
|
|
14.7 %
|
|
7.3 %
|
EBITDA as a
percentage of total revenues
|
|
21.6 %
|
|
11.6 %
|
Adjusted EBITDA as a
percentage of total revenues
|
|
20.5 %
|
|
11.9 %
|
Net Homebuilding
Debt to Capitalization Ratio Reconciliation
|
($ in
thousands)
|
As of
June 30,
2022
|
|
As of
March 31,
2022
|
Total debt
|
$
2,950,744
|
|
$
3,048,373
|
Less unamortized debt
issuance (cost)/premiums, net
|
(11,891)
|
|
2,311
|
Less mortgage warehouse
borrowings
|
179,555
|
|
200,662
|
Total homebuilding
debt
|
$
2,783,080
|
|
$
2,845,400
|
Less cash and cash
equivalents
|
378,340
|
|
569,249
|
Net homebuilding
debt
|
$
2,404,740
|
|
$
2,276,151
|
Total equity
|
4,193,895
|
|
4,094,798
|
Total
capitalization
|
$
6,598,635
|
|
$
6,370,949
|
|
|
|
|
Net homebuilding
debt to capitalization ratio
|
36.4 %
|
|
35.7 %
|
CONTACT:
Mackenzie
Aron, VP Investor Relations
(480) 734-2060
investor@taylormorrison.com
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SOURCE Taylor Morrison