Taylor Morrison(US:TMHC)2022-02-23 18:24Financial Performance - Total revenue for the year ended December 31, 2021, was $7.5 billion, a 22.4% increase compared to the previous year[24] - Home closings revenue for the same period was $7.2 billion, reflecting a 22.3% increase year-over-year[24] - Net income for 2021 was $663.0 million, with diluted earnings per share of $5.18, compared to $243.4 million and $1.88 in 2020[24] - Net sales orders value for 2021 was $8.7 billion, a 19.0% increase compared to the previous year[30] - The sales order backlog at the end of 2021 was $5.8 billion, a 36.2% increase from the prior year[30] Home Closings and Inventory - The company closed nearly 13,700 homes in 2021, a 9.4% increase from the prior year, with a gross margin of 20.3%[24] - As of December 31, 2021, the total sold homes in backlog amounted to 9,114 units, an increase from 8,403 units as of December 31, 2020, representing an 8.4% growth[43] - The total inventory of homes, including sold homes in backlog and showcase models, reached 11,339 units as of December 31, 2021, compared to 10,184 units in the previous year, indicating a 11.3% increase[43] - The company expects to deliver substantially all sold homes in backlog by the end of 2022[43] Operational Challenges - The company experienced significant supply chain disruptions in 2021, leading to cost inflation and delays in home closings[48] - The construction time for a typical home averages approximately six months, influenced by various factors including geographic region and material availability[47] - Labor shortages and increased costs could delay home development and construction, adversely affecting operating results[104] - Increased costs and delays in home construction may arise from raw material shortages and price fluctuations, impacting operating results[136] Market and Economic Factors - The availability of mortgage credit is crucial for home sales, and fluctuations in financing could adversely affect sales volume and prices[97] - Increases in interest rates could significantly raise homeownership costs, potentially reducing demand and sales prices[101] - Economic factors such as unemployment and inflation could lead to increased loan delinquencies and reduced demand for new homes[112][113] - The competitive environment in homebuilding may lead to increased selling incentives and reduced prices, affecting demand and operations[109] Regulatory and Compliance Issues - The company is subject to various local, state, and federal regulations that can increase costs and delay community development[69] - Compliance with new data privacy regulations, particularly in states like California, may lead to increased costs and potential penalties for noncompliance[143] - Legal and regulatory compliance costs are substantial and may increase due to new requirements, potentially affecting the feasibility of property developments[152] Sustainability and Corporate Responsibility - The company has been recognized as America's Most Trusted Home Builder® for seven consecutive years[30] - The company is committed to sustainability and has integrated these values into its business practices, as highlighted in its latest ESG report[77] - The company has been included in the 2022 Bloomberg Gender-Equality Index, highlighting its commitment to diversity, equity, and inclusion[86] Financial Services and Risk Management - TMHF, the company's mortgage lending operation, funds loans through warehouse credit facilities and earns revenue from origination and processing fees[65] - The financial services business is subject to risks related to the sale of originated mortgages, which could negatively impact liquidity if loans cannot be sold in the secondary market[161] - The company aims to manage credit risk by selecting financially strong counterparties and spreading risk among multiple parties[164] Shareholder and Stock Management - Taylor Morrison repurchased 9.9 million shares for $281.4 million during 2021[30] - The company’s stock repurchase program was renewed for $250 million until June 30, 2024, replacing the previous authorization set to expire on December 31, 2022[197] - For the year ended December 31, 2021, the company repurchased a total of 9,918,104 shares of Common Stock, compared to 5,941,324 shares repurchased in 2020[195] Future Growth and Strategic Plans - The company plans to expand its Build-to-Rent operations into additional markets in 2022[23] - The company plans to maintain a consistent approach to land positioning to optimize margin performance and may sell land if it aligns with overall strategy[204] - The company operates across 11 states, providing a range of homes for various consumer groups, including entry-level and active lifestyle buyers[200]