Taylor Morrison Home Corporation (NYSE:TMHC) Q2 2023 Earnings Conference Call July 26, 2023 8:30 AM ET Company Participants Mackenzie Aron - VP, IR Sheryl Palmer - Chairman, President & CEO Erik Heuser - EVP & Chief Corporate Operations Officer Curt VanHyfte - West Area President & Interim CFO Conference Call Participants Michael Rehaut - JPMorgan Chase & Co. Carl Reichardt - BTIG Truman Patterson - Wolfe Research Elizabeth Langan - Barclays Bank Daniel Oppenheim - Crédit Suisse Alex Barrón - Housing Resear ...

Table of Contents (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35873 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q TAYLOR MORRISON HOME CORPORATION (Exact name of registrant as specified in its Charter) (State or other ...

Financial Performance - Total revenue for 2022 was $8,224,917, an increase of 9.6% from $7,501,265 in 2021[330]. - Home closings revenue reached $7,889,371, up 10% from $7,171,433 in the previous year[330]. - Net income attributable to Taylor Morrison Home Corporation for 2022 was $1,052,800, representing a 58.7% increase from $663,026 in 2021[330]. - Earnings per share (EPS) for 2022 were $9.16 (basic), compared to $5.26 in 2021, reflecting a 74.3% increase[330]. - The company reported a gross margin of $2,092,366 for 2022, an increase of 35.2% from $1,547,881 in 2021[330]. - The net income for the year ended December 31, 2022, was $1,056,247,000, compared to $1,052,800,000 in 2021, indicating a slight increase of about 0.4%[334]. - Net income for the year ended December 31, 2022, was $1,056,247, a 55% increase from $682,367 in 2021[337]. - The company reported an income before income taxes of $1,392,675,000 for 2022, compared to $863,108,000 in 2021, representing an increase of approximately 61.2%[463]. Share Repurchase and Dividends - The company intends to use future earnings for business development, working capital, debt repayment, and possibly share repurchases, with no cash dividends anticipated in the foreseeable future[201]. - In 2022, the company repurchased a total of 14,568,364 shares of Common Stock, compared to 9,918,104 shares in 2021, reflecting a significant increase in share repurchase activity[202]. - The company has authorized a $500 million renewal of its stock repurchase program until December 31, 2023, replacing a prior $250 million authorization[203]. - As of December 31, 2022, the amount available for repurchase was $279.1 million, after repurchasing 14,568,364 shares at a cost of $376.3 million[452]. Debt and Financing - As of December 31, 2022, approximately 88% of the company's debt was fixed rate, while 12% was variable rate, indicating a strong preference for fixed-rate debt[305]. - The company had approximately $1.0 billion of additional availability for borrowings under its Credit Facilities, including $130.8 million for letters of credit as of December 31, 2022[305]. - Total debt as of December 31, 2022, is $2,494.6 million, a decrease from $3,299.8 million in 2021, reflecting a reduction of approximately 24.4%[403]. - The company redeemed its 5.875% Senior Notes due 2023 in full on October 31, 2022, resulting in a net loss on extinguishment of debt of $0.8 million for the year ended December 31, 2022[405]. - The company had $361.5 million in loans payable and other borrowings as of December 31, 2022, compared to $404.4 million in 2021, indicating a decrease of approximately 10.6%[403]. - The company transitioned its mortgage warehouse borrowings from LIBOR to SOFR and BSBY, with total mortgage warehouse borrowings of $306.1 million as of December 31, 2022[431][438]. Assets and Liabilities - Total assets decreased to $8,470,724 in 2022 from $8,727,777 in 2021, a decline of 2.9%[328]. - Total liabilities reduced to $3,823,865 in 2022, down 19.6% from $4,756,795 in 2021[328]. - Total accrued expenses and other liabilities decreased to $490,253 as of December 31, 2022, down from $525,209 in 2021, representing a reduction of 6.7%[401]. - The present value of lease liabilities as of December 31, 2022, was $100.2 million, comprising $75.8 million for operating leases and $24.3 million for finance leases[350]. Real Estate and Inventory - Total owned inventory as of December 31, 2022, was $5,346.9 million, a slight decrease from $5,444.2 million in 2021[389]. - Real estate developed or under development as of December 31, 2022, was $3,607.2 million, down from $3,895.7 million in 2021[389]. - Total real estate inventory as of December 31, 2022, was $5,370.9 million, compared to $5,499.5 million in 2021[389]. - The company had outstanding letters of credit and surety bonds totaling $1.2 billion as of December 31, 2022, consistent with the previous year[466]. Taxation - The provision for income taxes for the year ended December 31, 2022, totaled $336.4 million, significantly higher than $180.7 million in 2021[441]. - The effective tax rate for the year ended December 31, 2022, was 24.2%, an increase from 20.9% in 2021, influenced by state income taxes and energy tax credits[442]. - Total deferred tax assets decreased from $248.6 million in 2021 to $215.0 million in 2022, primarily due to reductions in real estate inventory and accruals[444]. Other Financial Metrics - The company reported capitalized interest of $190,123 for the year ended December 31, 2022, an increase of 12.5% from $168,670 in 2021[394]. - The company recognized PRSU expense of $12,642,000 in 2022, up from $8,125,000 in 2021, reflecting a year-over-year increase of approximately 55.5%[459]. - Stock-based compensation expense for the year ended December 31, 2022, totaled $26.9 million, an increase from $19.9 million in 2021[454].

Taylor Morrison Home Corporation (NYSE:TMHC) Q4 2022 Earnings Conference Call February 15, 2023 8:30 AM ET Company Participants Sheryl Palmer - Chairman, Chief Executive Officer Lou Steffens - Chief Financial Officer Erik Heuser - Chief Corporate Operations Officer Mackenzie Aron - Vice President, Investor Relations Conference Call Participants Truman Patterson - Wolfe Research Carl Reichardt - BTIG Elizabeth Langan - Barclays Jay McCanless - Wedbush Doug Wardlaw - JP Morgan Ryan Frank - RBC Capital Marke ...

Taylor Morrison Home Corporation (NYSE:TMHC) Q3 2022 Earnings Conference Call October 26, 2022 8:30 AM ET Company Participants Mackenzie Aron - Vice President of Investor Relations Sheryl Palmer - Chairman and Chief Executive Officer Erik Heuser - Chief Corporate Operations Officer Lou Steffens - Chief Financial Officer Conference Call Participants Carl Reichardt - BTIG Elizabeth Langan - Barclays Alan Ratner - Zelman and Associates Doug Wardlaw - JPMorgan Alex Rygiel - B. Riley Securities Paul Przybylski - ...

Q2 2022 Performance Highlights - Home closings revenue increased by 15% to $1.9 billion[2] - Home closings gross margin improved by 750 basis points to a record high of 26.6%[2] - SG&A as a percentage of home closings revenue improved by 140 basis points to a second quarter record low of 8.8%[2] - Backlog value increased by 6% to $6.1 billion[2] - Total revenue increased by 16% to $2.0 billion[2] - Reported diluted EPS increased by 158% to $2.45[2] Land and Lots - Homebuilding lot supply increased by 8% to approximately 82,000 homesites, with 41% controlled[2] - Invested $451 million in land acquisition and development, with 52% development-related[11] Financial Position - Repurchased 6.8 million shares outstanding for $172 million[2] - Return on equity improved by 1,090 basis points to a record high of 23.1%[2] Outlook - The company is targeting around $2 billion in homebuilding land investment in 2022[11]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements%20of%20Taylor%20Morrison%20Home%20Corporation%20(Unaudited)) Presents unaudited condensed consolidated financial statements for the periods ended June 30, 2022, and 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Total cash, cash equivalents, and restricted cash | $379,293 | $836,340 | | Total real estate inventory | $6,046,368 | $5,499,521 | | Total assets | $8,650,223 | $8,727,777 | | **Liabilities & Equity** | | | | Senior notes, net | $2,173,998 | $2,452,322 | | Total liabilities | $4,456,328 | $4,756,795 | | Total stockholders' equity | $4,193,895 | $3,970,982 | | Total liabilities and stockholders' equity | $8,650,223 | $8,727,777 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $1,995,023 | $1,719,280 | $3,698,147 | $3,137,092 | | Gross margin | $541,480 | $328,703 | $934,608 | $603,144 | | Income before income taxes | $391,597 | $163,224 | $624,497 | $294,965 | | Net income available to TMHC | $290,987 | $124,147 | $467,690 | $222,168 | | Diluted EPS | $2.45 | $0.95 | $3.87 | $1.70 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $195,490 | $(97,594) | | Net cash provided by/(used in) investing activities | $4,193 | $(22,034) | | Net cash used in financing activities | $(656,730) | $(46,360) | | **Net decrease in cash** | **$(457,047)** | **$(165,988)** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company operates a residential homebuilding and community development business across 11 states, serving various buyer segments and offering financial services[24](index=24&type=chunk) Total Real Estate Inventory (in thousands) | Inventory Category | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total 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** | - In June 2022, the company purchased **$264.1 million** of its 6.625% Senior Notes due 2027 through a cash tender offer, resulting in a net gain on debt extinguishment of approximately **$13.5 million**[64](index=64&type=chunk) - A new stock repurchase program of up to **$500.0 million** was authorized on May 31, 2022, and during Q2 2022, the company repurchased **6.8 million shares** for **$172.4 million**[86](index=86&type=chunk)[87](index=87&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance for Q2 2022, highlighting revenue growth and margin expansion amid market challenges - Key highlights for Q2 2022 include a **15% increase in home closings revenue** to $1.9 billion and a **750 basis point improvement in gross margin** to 26.6%[114](index=114&type=chunk) - Net sales orders for Q2 2022 **decreased 25.4%** to 2,554 units, attributed to rising mortgage rates and inflation, partially offset by a **17.1% increase in average selling price**[133](index=133&type=chunk)[134](index=134&type=chunk) - The sales order cancellation rate **more than doubled to 10.8%** in Q2 2022 from 5.2% in Q2 2021, driven by higher interest rates and extended build times[135](index=135&type=chunk) - Home closings gross margin **increased to 26.6%** in Q2 2022 from 19.1% in Q2 2021, reflecting strong pricing power that outpaced cost pressures[141](index=141&type=chunk) Total Liquidity (in thousands) | Component | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total cash, excluding restricted cash | $378,340 | $832,821 | | Revolving credit facilities availability | $683,686 | $809,733 | | **Total liquidity** | **$1,062,026** | **$1,642,554** | [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to market risks, primarily interest rate risk from its variable-rate debt - The company's operations are sensitive to interest rates, with approximately **89% of its debt being fixed-rate** as of June 30, 2022, limiting the impact of rate changes[167](index=167&type=chunk) - A hypothetical **1% increase in interest rates** would increase annual interest incurred on variable-rate debt by approximately **$3.3 million**[169](index=169&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls - The company's principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of June 30, 2022[171](index=171&type=chunk) - There were **no material changes** in the company's internal control over financial reporting during the quarter ended June 30, 2022[172](index=172&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Discloses a key class action lawsuit regarding club membership fees, for which a $35.0 million judgment is under appeal - For details on legal proceedings, the report refers to Note 13 in the Notes to the Consolidated Financial Statements[174](index=174&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to risk factors previously disclosed in the Annual Report on Form 10-K - There have been **no material changes** to the risk factors set forth in the company's Annual Report[175](index=175&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock repurchases in Q2 2022 and the authorization of a new $500 million program Share Repurchases in Q2 2022 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | 833,421 | $26.86 | | May 2022 | 2,746,436 | $27.31 | | June 2022 | 3,199,641 | $23.44 | | **Total** | **6,779,498** | **N/A** | - On May 31, 2022, the Board of Directors authorized a new stock repurchase program of up to **$500.0 million**, effective through December 31, 2023[177](index=177&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) Discloses amendments to executive employment agreements regarding bonus payments after a change in control - On July 26, 2022, the company amended employment agreements for its named executive officers to provide for a **prorated annual bonus payment** in the event of a "Change in Control Qualifying Termination"[182](index=182&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including required executive certifications - A list of exhibits filed with the report is provided, including officer certifications under Sarbanes-Oxley Sections 302 and 906[184](index=184&type=chunk)

Financial Data and Key Metrics Changes - The company achieved record profitability with a home closings gross margin of 26.6%, up 750 basis points from 19.1% a year ago and more than 1,100 basis points from two years ago [9][11][47] - Earnings per diluted share reached a new high of $2.45, with adjusted earnings per share at $2.27, reflecting a 139% increase year-over-year [11][43] - Return on equity improved by over 1,000 basis points year-over-year to just over 23% [12] Business Line Data and Key Metrics Changes - The company delivered 3,032 homes at an average selling price of $621,000, generating home closings revenue of $1.9 billion, which is a 15% increase year-over-year [44] - Monthly sales absorption pace moderated to 2.6 net orders per community, down from record levels experienced during the previous year [16] - The cancellation rate increased to 10.8% of gross orders, but remains below the long-term run rate [21] Market Data and Key Metrics Changes - The company noted a decline in sales activity in July, with signs of improvement in web traffic and mortgage pre-qualification volume since mid-June [25][26] - The entry-level segment showed the greatest reduction in sales pace, while the move-up and active lifestyle segments displayed greater resiliency [16][72] - The company reported that over half of its business in markets like Florida and Nevada comes from out-of-state buyers, indicating strong migration trends [134] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and being selective in land investments, with a well-vintage land pipeline of 82,000 home sites [29][37] - The strategic allocation of incentive dollars is emphasized over price adjustments to protect profitability and long-term community value [20] - The company plans to invest approximately $2 billion in home building land acquisition and development this year, down from prior expectations, reflecting a more opportunistic stance [37][122] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of higher interest rates and geopolitical tensions on consumer confidence and home buying demand [14] - Despite current challenges, management remains optimistic about long-term demand drivers and the company's ability to navigate uncertainties [28] - The company expects to close approximately 13,500 homes for the full year, with an average price of at least $625,000 [46] Other Important Information - The company repurchased 6.8 million shares for $172 million, marking the highest level of repurchase activity since 2018 [54] - The company ended the quarter with $1.1 billion in total liquidity, including $378 million in unrestricted cash [50] Q&A Session Summary Question: Current incentives compared to historical levels - Management noted that Q2 incentives were lower than Q1 and all of last year, emphasizing the effectiveness of financing incentives over price reductions [68][70] Question: Trends among different buyer groups - The entry-level buyer segment experienced the greatest reduction in sales pace, while active adult buyers showed more resilience [72][74] Question: Percentage of orders on build-to-order versus specs - Management reported that 45% of orders were build-to-order, an increase from 37% in the previous quarter [87][89] Question: Cancellations differentiation between to-be-built versus pre-started - Cancellations were more heavily weighted towards spec sales, with 75% of cancellations written this year [92][94] Question: Land banking terms and costs - Management indicated that terms for land banking deals remain favorable, with no unusual terms affecting their strategy [100][102] Question: Municipal delays affecting cycle times - Management confirmed that while back-end delays persist, there are signs of improvement on the front-end of the build process [105][107] Question: Trends in incentives in hotter markets - Management acknowledged a reduction in incentives in markets like Texas and Florida, with expectations for this trend to continue [146]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35873 TAYLOR MORRISON HOME CORPORATION (Exact name of registrant as specified in its Charter) Delaware 83-202 ...

Financial Data and Key Metrics Changes - The company reported first-quarter earnings of $1.44 per diluted share, a 92% increase year-over-year, driven by strong revenue growth and improved gross margins [29] - Home closings gross margin improved by 450 basis points year-over-year to 23.1%, with expectations to reach at least 24.5% for the full year, up over 400 basis points from 2021 [33][8] - SG&A as a percentage of home closings revenue decreased by 120 basis points year-over-year to 9.6%, with expectations to improve to the mid- to high 8% range in 2022 [34] Business Line Data and Key Metrics Changes - The company delivered 2,768 homes in the first quarter, with a 23% increase in average closing price to $594,000, generating home closings revenue of $1.6 billion [29] - The backlog consists of 9,400 sold homes, with strong embedded equity and a cancellation rate of approximately 6%, among all-time lows [12][8] - The company expects to deliver between 14,000 to 15,000 homes in 2022, including 3,000 to 3,200 homes in the second quarter [32] Market Data and Key Metrics Changes - The average net sales order price increased by 24% year-over-year, reflecting strong demand across markets [9] - The company ended the quarter with a monthly absorption pace of 3.1 net sales orders per community, with strong demand exceeding this level [10] - The average credit score of borrowers in the backlog is at an all-time high of 752, with average down payments of 24% higher than a year ago [12] Company Strategy and Development Direction - The company is focused on operational priorities to leverage market scale, prime land positions, and consumer-centric products, aiming for long-term structural improvements [7] - A disciplined investment strategy is in place, with a robust land pipeline of approximately 77,000 owned and controlled homebuilding lots, representing 5.6 years of total supply [22] - The company is increasing its share of land spend on development, with over 50% of first-quarter land investment dedicated to land development [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook despite rising interest rates and geopolitical issues, focusing on delivering a record year of financial performance [8] - The company is closely monitoring the impact of rising mortgage rates on consumer behavior, particularly among entry-level buyers [11] - Management highlighted the strength of their buyers and the quality of their land positions, indicating resilience in demand [12] Other Important Information - The company published its fourth annual environmental, social, and governance report, emphasizing sustainable business practices and community contributions [39][40] - The company has introduced a new extended rate loss program to help maintain strong mortgage capture rates amid rising interest rates [16] Q&A Session Summary Question: Performance of different buyer segments - Management noted robust demand across all consumer segments, with no significant differences observed in April compared to the first quarter [47] Question: Sales restrictions and home release timing - Management indicated that sales restrictions are still in place, but they expect to have a more open environment by the latter part of the quarter [49] Question: Impact of rising rates on land acquisition strategy - Management confirmed that the overall mix of the business remains intentional, with no significant changes in land acquisition strategy due to rising rates [62] Question: Land market conditions - Management stated that there has not been meaningful capitulation in the land market yet, with a typical 9-month lag expected before any significant changes occur [78] Question: Supply chain and SKU rationalization - Management confirmed that SKU rationalization has been beneficial, leading to improved gross margins while maintaining customer customization options [82]