SCOTTSDALE, Ariz., Oct. 23,
2024 /PRNewswire/ -- Taylor Morrison Home Corporation
(NYSE: TMHC), a leading national land developer and homebuilder,
announced results for the third quarter ended September 30, 2024. Reported third quarter net
income was $251 million, or
$2.37 per diluted share, as compared
to $171 million, or $1.54 per diluted share, in the prior-year
quarter.
Third quarter 2024 highlights included the following, as
compared to the third quarter of 2023:
- Diluted EPS increased 54% to $2.37
- Net sales orders increased 9% to 2,830
- Home closings revenue of $2.0
billion, driven by 3,394 closings at an average price of
$598,000
- Home closings gross margin of 24.8%, up from 23.1% a year
ago
- 83,579 homebuilding lots owned and controlled, of which a
record 58% was controlled off balance sheet
- Share repurchases totaled $61
million during the quarter and $258
million year to date
- Total liquidity of $1.2 billion;
no senior debt maturities until 2027
"In the third quarter, our team delivered better-than-expected
results, which clearly demonstrated the benefits of our diversified
consumer and geographic strategy, as well as our team's impressive
execution in the face of continued interest rate volatility,
economic uncertainty and hurricane-related disruptions," said
Sheryl Palmer, Taylor Morrison CEO
and Chairman. "Led by strong top-line growth and improved margins,
our results generated over-50% year-over-year growth in our
earnings per diluted share to $2.37
and a 15% year-over-year increase in our book value per share to
approximately $54."
Palmer continued, "By meeting the needs of well-qualified
homebuyers with appropriate product offerings in prime community
locations, we continue to benefit from healthy demand and pricing
resiliency across our portfolio. On the sales front, our net orders
increased 9% year over year, driven by a monthly absorption pace of
2.8 per community. As I shared on our second quarter call, we had
begun to see traffic recover in June and July, which translated
into improving order volume throughout the third quarter, with
sales activity ending on a high note in September. While still
early in October, demand has generally been healthy and consistent
with seasonal trends, even with the impact of yet another hurricane
in Florida."
"Since expanding our company's scale and refining our
operational capabilities over the last many years, we believe that
our ability to generate accretive growth and attractive returns has
been permanently strengthened. This is reflected in the long-term
targets that we introduced earlier this year, each of which are
meaningfully stronger than our historic norms. These targets
include: 10% annual home closings growth, an annualized low-three
absorption pace, low-to-mid 20% home closings gross margins, and
mid-to-high teens returns on equity."
"This year, with just over two months to go, we expect to meet
or exceed each of these metrics with anticipated double-digit
closings growth to approximately 12,725 homes at a home closings
gross margin of around 24.3% as 2024 has shaped up to be another
milestone year for our company. As we head into 2025, we are
confident that our long-standing emphasis on capital-efficient
growth will yield another year of strong performance, supported by
tailwinds driving the need for new construction and our favorable
positioning as a diversified homebuilder," said Palmer.
Business Highlights (All comparisons are of the
current quarter to the prior-year quarter, unless indicated.)
Homebuilding
- Home closings revenue increased 26% to $2.0 billion, driven by a 29% increase in
closings to 3,394 homes, which was partially offset by a 2%
decrease in the average price to $598,000.
- The home closings gross margin was 24.8%, which was up 170
basis points from 23.1% in the prior-year quarter.
- Net sales orders increased 9% to 2,830, driven by a 5% increase
in ending community count to 340 outlets and a 4% increase in the
monthly absorption pace to 2.8 per community.
- SG&A as a percentage of home closings revenue decreased to
9.8% from 10.4% a year ago.
- Cancellations equaled 9.3% of gross orders, down from 11.4% a
year ago.
- Backlog at quarter end was 5,692 homes with a sales value of
$3.8 billion. Backlog customer
deposits averaged approximately $54,000 per home.
Land Portfolio
- Homebuilding land acquisition and development spend totaled
$593 million, up from $552 million a year ago. Development-related
spend accounted for 46% of the total versus 42% a year ago.
- Homebuilding lot supply was 83,579 homesites, of which a record
58% was controlled off balance sheet.
- Based on trailing twelve-month home closings, total
homebuilding lots represented 6.6 years of supply, of which 2.7
years was owned.
Financial Services
- The mortgage capture rate was 88%, unchanged from a year
ago.
- Borrowers had an average credit score of 754 and average
debt-to-income ratio of 40%.
Balance Sheet
- At quarter end, total liquidity was approximately $1.2 billion, including $946 million of total capacity on the Company's
revolving credit facility, which was undrawn outside of normal
letters of credit.
- The gross homebuilding debt to capital ratio was 25.1%.
Including $256 million of
unrestricted cash on hand, the net homebuilding debt-to-capital
ratio was 22.5%.
- The Company repurchased 1.0 million shares for $61 million, bringing the year-to-date total to
4.2 million shares for $258 million.
At quarter end, the remaining share repurchase authorization was
$237 million. Subsequent to quarter
end, our Board of Directors authorized an expanded share repurchase
authorization of up to $1 billion,
effective through December 31,
2026.
Business Outlook
Fourth Quarter 2024
- Home closings are expected to be approximately 3,400
- Average closing price is expected to be approximately
$610,000
- Home closings gross margin is expected to be around 24.5%
- Ending active community count is expected to be between 330 to
340
- Effective tax rate is expected to be approximately 25%
- Diluted share count is expected to be approximately 106
million
Full Year 2024
- Home closings are now expected to be approximately 12,725
- Average closing price is now expected to be approximately
$600,000
- Home closings gross margin is now expected to be approximately
24.3%
- Ending active community count is expected to be between 330 to
340
- SG&A as a percentage of home closings revenue is expected
to be in the high-9% range
- Effective tax rate is now expected to be between 24.5% to
25.0%
- Diluted share count is expected to be approximately 107
million
- Land and development spend is now expected to be around
$2.5 billion
- Share repurchases are expected to total approximately
$300 million
Quarterly Financial Comparison
(Dollars in
thousands)
|
Q3
2024
|
|
Q3
2023
|
|
Q3 2024 vs. Q3
2023
|
Total
Revenue
|
$
2,120,842
|
|
$
1,675,545
|
|
26.6 %
|
Home Closings
Revenue
|
$
2,029,134
|
|
$
1,611,883
|
|
25.9 %
|
Home Closings Gross
Margin
|
$
503,309
|
|
$
372,884
|
|
35.0 %
|
|
24.8 %
|
|
23.1 %
|
|
170 bps
increase
|
SG&A
|
$
199,341
|
|
$
167,791
|
|
18.8 %
|
% of Home Closings
Revenue
|
9.8 %
|
|
10.4 %
|
|
60 bps
decrease
|
Earnings Conference Call Webcast
A public webcast to discuss the Company's earnings will be held
later today at 8:30 a.m. ET. Call
participants are asked to register for the event here to receive a
unique passcode and dial-in information. The call will be recorded
and available for replay on Taylor
Morrison's website at www.taylormorrison.com on the Investor
Relations portion of the site under the Events & Presentations
tab.
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 resort lifestyle
homebuyers and renters under our family of brands—including
Taylor Morrison, Esplanade and
Yardly. From 2016-2024, Taylor
Morrison has been recognized as America's Most Trusted®
Builder by Lifestory Research. Our long-standing commitment to
sustainable operations is highlighted in our annual Sustainability
and Belonging Report.
For more information about Taylor
Morrison, please visit www.taylormorrison.com.
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
Condensed
Consolidated Statements of Operations
(In thousands, except
per share amounts, unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Home closings revenue,
net
|
$
2,029,134
|
|
$
1,611,883
|
|
$
5,585,516
|
|
$
5,221,225
|
Land closings
revenue
|
27,820
|
|
14,291
|
|
48,279
|
|
31,439
|
Financial services
revenue
|
49,654
|
|
40,045
|
|
145,529
|
|
117,108
|
Amenity and other
revenue
|
14,234
|
|
9,326
|
|
32,323
|
|
28,194
|
Total
revenue
|
2,120,842
|
|
1,675,545
|
|
5,811,647
|
|
5,397,966
|
Cost of home
closings
|
1,525,825
|
|
1,238,999
|
|
4,231,740
|
|
3,980,749
|
Cost of land
closings
|
27,010
|
|
13,572
|
|
50,915
|
|
30,620
|
Financial services
expenses
|
27,304
|
|
23,128
|
|
80,553
|
|
70,618
|
Amenity and other
expenses
|
9,634
|
|
8,128
|
|
28,237
|
|
25,010
|
Total cost of
revenue
|
1,589,773
|
|
1,283,827
|
|
4,391,445
|
|
4,106,997
|
Gross
margin
|
531,069
|
|
391,718
|
|
1,420,202
|
|
1,290,969
|
Sales, commissions and
other marketing costs
|
117,714
|
|
98,797
|
|
334,270
|
|
304,591
|
General and
administrative expenses
|
81,627
|
|
68,994
|
|
231,970
|
|
205,904
|
Net income from
unconsolidated entities
|
(707)
|
|
(1,934)
|
|
(6,086)
|
|
(7,049)
|
Interest
expense/(income), net
|
3,379
|
|
(5,782)
|
|
7,423
|
|
(12,013)
|
Other (income)/expense,
net
|
(3,635)
|
|
2,968
|
|
3,837
|
|
6,683
|
Loss on extinguishment
of debt, net
|
—
|
|
269
|
|
—
|
|
269
|
Income before income
taxes
|
332,691
|
|
228,406
|
|
848,788
|
|
792,584
|
Income tax
provision
|
81,219
|
|
57,960
|
|
206,241
|
|
196,005
|
Net income before
allocation to non-controlling interests
|
251,472
|
|
170,446
|
|
642,547
|
|
596,579
|
Net (income)/loss
attributable to non-controlling interests
|
(346)
|
|
245
|
|
(1,691)
|
|
(235)
|
Net
income
|
$
251,126
|
|
$
170,691
|
|
$
640,856
|
|
$
596,344
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.41
|
|
$
1.57
|
|
$
6.08
|
|
$
5.48
|
Diluted
|
$
2.37
|
|
$
1.54
|
|
$
5.97
|
|
$
5.40
|
Weighted average number
of shares of common stock:
|
|
|
|
|
|
|
|
Basic
|
104,132
|
|
108,837
|
|
105,359
|
|
108,827
|
Diluted
|
106,089
|
|
110,622
|
|
107,361
|
|
110,536
|
Taylor Morrison Home
Corporation
Condensed
Consolidated Balance Sheets
(In thousands,
unaudited)
|
|
|
September
30,
2024
|
|
December 31,
2023
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
256,447
|
|
$
798,568
|
Restricted
cash
|
846
|
|
8,531
|
Total cash
|
257,293
|
|
807,099
|
Owned
inventory
|
6,265,280
|
|
5,473,828
|
Consolidated real
estate not owned
|
175,245
|
|
71,618
|
Total real estate
inventory
|
6,440,525
|
|
5,545,446
|
Land
deposits
|
273,967
|
|
203,217
|
Mortgage loans held for
sale
|
265,356
|
|
193,344
|
Lease right of use
assets
|
69,083
|
|
75,203
|
Prepaid expenses and
other assets, net
|
336,051
|
|
290,925
|
Other receivables,
net
|
207,595
|
|
184,518
|
Investments in
unconsolidated entities
|
397,061
|
|
346,192
|
Deferred tax assets,
net
|
67,825
|
|
67,825
|
Property and equipment,
net
|
322,483
|
|
295,121
|
Goodwill
|
663,197
|
|
663,197
|
Total
assets
|
$
9,300,436
|
|
$
8,672,087
|
Liabilities
|
|
|
|
Accounts
payable
|
$
269,300
|
|
$
263,481
|
Accrued expenses and
other liabilities
|
577,501
|
|
549,074
|
Lease
liabilities
|
79,426
|
|
84,999
|
Income taxes
payable
|
5,528
|
|
—
|
Customer
deposits
|
307,510
|
|
326,087
|
Estimated development
liabilities
|
19,241
|
|
27,440
|
Senior notes,
net
|
1,470,014
|
|
1,468,695
|
Loans payable and other
borrowings
|
439,878
|
|
394,943
|
Revolving credit
facility borrowings
|
—
|
|
—
|
Mortgage warehouse
borrowings
|
233,331
|
|
153,464
|
Liabilities
attributable to consolidated real estate not owned
|
175,245
|
|
71,618
|
Total
liabilities
|
$
3,576,974
|
|
$
3,339,801
|
Stockholders'
equity
|
|
|
|
Total stockholders'
equity
|
5,723,462
|
|
5,332,286
|
Total liabilities
and stockholders' equity
|
$
9,300,436
|
|
$
8,672,087
|
Homes Closed and
Home Closings Revenue, Net:
|
|
|
Three Months Ended
September 30,
|
|
Homes
Closed
|
|
Home Closings
Revenue, Net
|
|
Average Selling
Price
|
(Dollars in
thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
East
|
1,320
|
|
996
|
|
32.5 %
|
|
$
758,179
|
|
$
572,971
|
|
32.3 %
|
|
$ 574
|
|
$ 575
|
|
(0.2 %)
|
Central
|
932
|
|
709
|
|
31.5 %
|
|
515,643
|
|
423,396
|
|
21.8 %
|
|
553
|
|
597
|
|
(7.4) %
|
West
|
1,142
|
|
934
|
|
22.3 %
|
|
755,312
|
|
615,516
|
|
22.7 %
|
|
661
|
|
659
|
|
0.3 %
|
Total
|
3,394
|
|
2,639
|
|
28.6 %
|
|
$
2,029,134
|
|
$
1,611,883
|
|
25.9 %
|
|
$ 598
|
|
$ 611
|
|
(2.1) %
|
|
|
Nine Months Ended
September 30,
|
|
Homes
Closed
|
|
Home Closings
Revenue, Net
|
|
Average Selling
Price
|
(Dollars in
thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
East
|
3,490
|
|
3,228
|
|
8.1 %
|
|
$
1,991,038
|
|
$
1,906,862
|
|
4.4 %
|
|
$ 570
|
|
$ 591
|
|
(3.6 %)
|
Central
|
2,628
|
|
2,376
|
|
10.6 %
|
|
1,468,197
|
|
1,499,420
|
|
(2.1) %
|
|
559
|
|
631
|
|
(11.4 %)
|
West
|
3,207
|
|
2,701
|
|
18.7 %
|
|
2,126,281
|
|
1,814,943
|
|
17.2 %
|
|
663
|
|
672
|
|
(1.3) %
|
Total
|
9,325
|
|
8,305
|
|
12.3 %
|
|
$
5,585,516
|
|
$
5,221,225
|
|
7.0 %
|
|
$ 599
|
|
$ 629
|
|
(4.8) %
|
Net Sales
Orders:
|
|
|
Three Months Ended
September 30,
|
|
Net Sales
Orders
|
|
Sales
Value
|
|
Average Selling
Price
|
(Dollars in
thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
East
|
1,140
|
|
940
|
|
21.3 %
|
|
$
610,892
|
|
$
559,524
|
|
9.2 %
|
|
$ 536
|
|
$ 595
|
|
(9.9 %)
|
Central
|
747
|
|
641
|
|
16.5 %
|
|
398,587
|
|
374,224
|
|
6.5 %
|
|
534
|
|
584
|
|
(8.6) %
|
West
|
943
|
|
1,011
|
|
(6.7 %)
|
|
651,841
|
|
680,666
|
|
(4.2 %)
|
|
691
|
|
673
|
|
2.7 %
|
Total
|
2,830
|
|
2,592
|
|
9.2 %
|
|
$
1,661,320
|
|
$
1,614,414
|
|
2.9 %
|
|
$ 587
|
|
$ 623
|
|
(5.8 %)
|
|
Nine Months Ended
September 30,
|
|
Net Sales
Orders
|
|
Sales
Value
|
|
Average Selling
Price
|
(Dollars in
thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
East
|
3,595
|
|
3,066
|
|
17.3 %
|
|
$
2,004,598
|
|
$
1,786,988
|
|
12.2 %
|
|
$ 558
|
|
$ 583
|
|
(4.3) %
|
Central
|
2,466
|
|
2,123
|
|
16.2 %
|
|
1,362,042
|
|
1,248,196
|
|
9.1 %
|
|
552
|
|
588
|
|
(6.1) %
|
West
|
3,566
|
|
3,280
|
|
8.7 %
|
|
2,404,249
|
|
2,219,056
|
|
8.3 %
|
|
674
|
|
677
|
|
(0.4) %
|
Total
|
9,627
|
|
8,469
|
|
13.7 %
|
|
$
5,770,889
|
|
$
5,254,240
|
|
9.8 %
|
|
$ 599
|
|
$ 620
|
|
(3.4) %
|
Sales Order
Backlog:
|
|
|
As of September
30,
|
|
Sold Homes in
Backlog
|
|
Sales
Value
|
|
Average Selling
Price
|
(Dollars in
thousands)
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
East
|
2,176
|
|
2,421
|
|
(10.1) %
|
|
$
1,493,828
|
|
$
1,613,188
|
|
(7.4) %
|
|
$ 687
|
|
$ 666
|
|
3.2 %
|
Central
|
1,238
|
|
1,464
|
|
(15.4) %
|
|
758,008
|
|
960,269
|
|
(21.1) %
|
|
612
|
|
656
|
|
(6.7) %
|
West
|
2,278
|
|
2,233
|
|
2.0 %
|
|
1,578,168
|
|
1,523,545
|
|
3.6 %
|
|
693
|
|
682
|
|
1.6 %
|
Total
|
5,692
|
|
6,118
|
|
(7.0) %
|
|
$
3,830,004
|
|
$
4,097,002
|
|
(6.5) %
|
|
$ 673
|
|
$ 670
|
|
0.4 %
|
Ending Active Selling
Communities:
|
|
|
As of
|
|
Change
|
|
September 30,
2024
|
|
September 30,
2023
|
|
|
East
|
120
|
|
107
|
|
12.1 %
|
Central
|
106
|
|
94
|
|
12.8 %
|
West
|
114
|
|
124
|
|
(8.1 %)
|
Total
|
340
|
|
325
|
|
4.6 %
|
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 or land 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 reserves or 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. Adjusted home closings
gross margin is a non-GAAP financial measure calculated on GAAP
home closings gross margin (which is inclusive of capitalized
interest), excluding inventory impairment charges. 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 or land 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 reserves
or settlements that the Company deems not to be in the ordinary
course of business, in each case, as applicable in a given period.
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).
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
September 30,
|
(Dollars in
thousands, except per share data)
|
2024
|
|
2023
|
Net income
|
$
251,126
|
|
$
170,691
|
Inventory impairment
charges (1)
|
—
|
|
11,791
|
Loss on extinguishment
of debt, net
|
—
|
|
269
|
Tax impact due to above
non-GAAP reconciling items
|
—
|
|
(3,060)
|
Adjusted net
income
|
$
251,126
|
|
$
179,691
|
Basic weighted average
number of shares
|
104,132
|
|
108,837
|
Adjusted earnings
per common share - Basic
|
$
2.41
|
|
$
1.65
|
Diluted weighted
average number of shares
|
106,089
|
|
110,622
|
Adjusted earnings
per common share - Diluted
|
$
2.37
|
|
$
1.62
|
Adjusted Income
Before Income Taxes and Related Margin
|
|
|
|
|
|
Three Months Ended
September 30,
|
(Dollars in
thousands)
|
2024
|
|
2023
|
Income before income
taxes
|
332,691
|
|
228,406
|
Inventory impairment
charges (1)
|
—
|
|
11,791
|
Loss on extinguishment
of debt, net
|
—
|
|
269
|
Adjusted income
before income taxes
|
$
332,691
|
|
$
240,466
|
Total
revenue
|
2,120,842
|
|
1,675,545
|
Income before income
taxes margin
|
15.7 %
|
|
13.6 %
|
Adjusted income
before income taxes margin
|
15.7 %
|
|
14.4 %
|
Adjusted Home
Closings Gross Margin
|
|
|
|
|
|
Three Months Ended
September 30,
|
(Dollars in
thousands)
|
2024
|
|
2023
|
Home closings
revenue
|
$ 2,029,134
|
|
$ 1,611,883
|
Cost of home
closings
|
1,525,825
|
|
1,238,999
|
Home closings gross
margin
|
$
503,309
|
|
$
372,884
|
Inventory impairment
charges (1)
|
—
|
|
11,791
|
Adjusted home
closings gross margin
|
$
503,309
|
|
$
384,675
|
Home closings gross
margin as a percentage of home closings revenue
|
24.8 %
|
|
23.1 %
|
Adjusted home closings
gross margin as a percentage of home closings revenue
|
24.8 %
|
|
23.9 %
|
EBITDA and Adjusted
EBITDA Reconciliation
|
|
|
Three Months
Ended
September 30,
|
(Dollars in
thousands)
|
2024
|
|
2023
|
Net income before
allocation to non-controlling interests
|
$
251,472
|
|
$
170,446
|
Interest
expense/(income), net
|
3,379
|
|
(5,782)
|
Amortization of
capitalized interest
|
30,064
|
|
32,377
|
Income tax
provision
|
81,219
|
|
57,960
|
Depreciation and
amortization
|
2,668
|
|
2,728
|
EBITDA
|
$
368,802
|
|
$
257,729
|
Non-cash compensation
expense
|
5,461
|
|
5,702
|
Inventory impairment
charges (1)
|
—
|
|
11,791
|
Loss on extinguishment
of debt, net
|
—
|
|
269
|
Adjusted
EBITDA
|
$
374,263
|
|
$
275,491
|
Total
revenue
|
$ 2,120,842
|
|
$ 1,675,545
|
Net income before
allocation to non-controlling interests as a percentage of total
revenue
|
11.9 %
|
|
10.2 %
|
EBITDA as a
percentage of total revenue
|
17.4 %
|
|
15.4 %
|
Adjusted EBITDA as a
percentage of total revenue
|
17.6 %
|
|
16.4 %
|
|
|
(1)
|
Included in Cost of
home closings on the Condensed consolidated statement of
operations
|
Debt to
Capitalization Ratios Reconciliation
|
|
(Dollars
in thousands)
|
As of
September 30, 2024
|
|
As of
June 30, 2024
|
|
As of
September 30, 2023
|
Total debt
|
$
2,143,223
|
|
$
2,150,021
|
|
$
1,992,077
|
Plus: unamortized debt
issuance cost, net
|
7,056
|
|
7,496
|
|
8,815
|
Less: mortgage
warehouse borrowings
|
(233,331)
|
|
(276,205)
|
|
(191,645)
|
Total homebuilding
debt
|
$
1,916,948
|
|
$
1,881,312
|
|
$
1,809,247
|
Total equity
|
5,723,462
|
|
5,526,542
|
|
5,175,110
|
Total
capitalization
|
$
7,640,410
|
|
$
7,407,854
|
|
$
6,984,357
|
Total homebuilding
debt to capitalization ratio
|
25.1 %
|
|
25.4 %
|
|
25.9 %
|
Total homebuilding
debt
|
$
1,916,948
|
|
$
1,881,312
|
|
$
1,809,247
|
Less: cash and cash
equivalents
|
(256,447)
|
|
(246,845)
|
|
(613,811)
|
Net homebuilding
debt
|
$
1,660,501
|
|
$
1,634,467
|
|
$
1,195,436
|
Total equity
|
5,723,462
|
|
5,526,542
|
|
5,175,110
|
Total
capitalization
|
$
7,383,963
|
|
$
7,161,009
|
|
$
6,370,546
|
Net homebuilding
debt to capitalization ratio
|
22.5 %
|
|
22.8 %
|
|
18.8 %
|
CONTACT:
Mackenzie
Aron, VP Investor Relations
(480) 734-2060
investor@taylormorrison.com
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SOURCE Taylor Morrison