Taylor Morrison Home Corporation · NYSE:TMHC
Taylor Morrison Home — Q2 2021 Earnings Presentation
23 slides from Taylor Morrison Home's earnings presentation, Jul 29, 2021
Slide 1: Investor Presentation Second Quarter 2021
Investor Presentation Second Quarter 2021
Slide 2: Q2 2021 Highlights
Q2 2021 Highlights Absorption Pace Average Order Price • Home closings gross margin improved 370 basis points to 19.1%, ahead of prior guidance due to strong pricing trends. +23% +32% to 3.4 to $597,000 • Managed sales via pricing and limited releases to align with production capacity and maximize g
Slide 3: Management's Outlook for Select Financial Metrics
Management’s Outlook for Select Financial Metrics Third Quarter 2021 Full Year 2021 Average Active Community Count 330 to 335 330 to 335 Home Closings 3,300 to 3,500 14,500 to 15,000 GAAP Home Closings Gross Margin About 20 Percent High-19 to 20 Percent Range SG&A % of Home Closings Revenue Not Prov
Slide 4: Strong Gross Margin and ROE Accretion Expected in 2022
Strong Gross Margin and ROE Accretion Expected in 2022 Home Closings Gross Margin Return on Equity ~22% Over 20% High-19% to 20% 19.1% 18.3% 18.6% High-Teens Range 17.2% 16.6% 15.4% 15.4% 12.2% 10.5% 7.9% 7.9% 6.8% 5.9% 5.4% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2020 2021 2022 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Slide 5: Focused on Leveraging Enhanced Scale to Create Value
Focused on Leveraging Enhanced Scale to Create Value Balanced National Critical Local Gross Margin Asset Overhead Footprint in Strong Operating Scale Enhancement Efficiency Leverage Housing Markets Deep and Experienced Team Expanding Balance Sheet Return-Accretive Diversified Product and Effective B
Slide 6: Strategic Priorities Aligned to Enhance Results
Strategic Priorities Aligned to Enhance Results Operational Excellence Capital Efficiency Gross Margin Enhancement Return-Accretive Land Investments • Maximize Procurement with Natl. and Local Purchasing Capabilities • Expand Controlled Lot Share to at Least 40% by the End of 2021 • Streamline Opera
Slide 7: Our Unique Design Package Approach
Our Unique Design Package Approach • Canvas packages are thoughtfully curated to offer homebuyers an improved, easier design experience than the traditional design center approach • Package collections—which are available at five budget levels—include features with the highest design appeal at a com
Slide 8: Healthy Demand Trends Driving Strong Pace and Price
Healthy Demand Trends Driving Strong Pace and Price Monthly Absorption Pace per Community Average Community Count 4.3 East Central West 411 393 3.8 378 372 368 366 357 346 345 3.4 333 332 3.4 3.1 297 288 275 2.8 2.8 2.6 2.6 2.6 2.4 2.3 2.2 1.6 4Q20 1Q18 1Q19 1Q20 1Q21 2Q18 2Q19 2Q20 2Q21 3Q18 3Q19 3
Slide 9: Diverse Product Portfolio Serves All Major Buyer Groups
Diverse Product Portfolio Serves All Major Buyer Groups Net Sales Orders by Consumer Type in 2Q 2021 Entry Level 25% 32% Move Up 50-Plus Lifestyle 43% Average Net Sales Order Price (in Thousands) $597 $550 $527 $490 $467 $453 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 9
Slide 10: Balanced Market Footprint Across 11 States
Mix as of Q2 2021 West Central East Balanced Market Footprint Closings 38% 24% 38% Across 11 States Closings Revenue 43% 23% 34% Average Closing Price $567,000 $484,000 $452,000 Lot Supply 36% 32% 32% 10
Slide 11: Disciplined Approach to Land Portfolio Management
Disciplined Approach Years of Homebuilding Lots Based on Trailing Twelve-Month Closings to Land Portfolio Total Owned 6.0 Management 5.2 5.5 5.0 4.9 4.7 3.8 3.8 3.9 3.7 3.8 Q2 2021 Highlights 3.2 • Recently finalized new land financing vehicles that will improve capital efficiency of land portfolio
Slide 12: Strong Cash Flow Expected to Drive Further Deleveraging
Strong Cash Flow Net Debt-to-Capital Ratio Expected to Fall to Low-30% Range in 4Q21 Expected to Drive 46.8% 46.0% Further Deleveraging 41.6% 38.7% 40.1% 40.5% Low-30% Range Q2 2021 Highlights • Net debt-to-capital ratio expected to decline to the low-30 percent range by the end of 2021 1Q20 2Q20 3Q
Slide 13: Guided by a Balanced Capital Allocation Philosophy
Guided by a Balanced Capital Allocation Philosophy Allocate Capital for Long-Term Value Creation We aim to enhance the long-term value of our company by allocating capital with a balanced and disciplined approach Balance Sheet Stewardship Reinvest in the Business Return Excess Cash to Evaluate Growt
Slide 14: A Snapshot of Capital Deployment Over the Last Three Years
A Snapshot of Capital Deployment Over the Last Three Years $1.7B generated through $3.7B invested $1.4B cash and equity invested operating cash flow in land and development in M&A $600M reduction in senior notes and $600M spent on share repurchases 27% of shares repurchased revolving credit facility
Slide 15: Financial Services
Financial Services Q2 2021 Highlights Borrower Snapshot Unit Product Mix Suite of Services Benefits • 750 Average FICO Score • 80% Conventional • Mortgage Lending • Pre-Qualification of Nearly All Buyers • 80% Average LTV Ratio • 19% Government • Title Insurance • Valuable Backlog Management • $390,
Slide 16: Appendix
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Slide 17: Who We Are
Who We Are Headquartered in Scottsdale, Arizona, Taylor Morrison is the nation’s fifth largest homebuilder and developer with operations in many of the highest-growth housing markets across 11 states. We serve a wide array of homebuyers with our diverse product portfolio, including first-time, move-
Slide 18: Committed to Environmental, Social and Governance Values
Committed to Environmental, Social and Governance Values People First Building for the Future Transparency and Accountability 2,700+ 100 percent 6 years team members homes now offer TM LiveWell ® upgraded products America’s Most Trusted® Homebuilder award 7 of 8 3,700+ 100 percent of team members ar
Slide 19: A Strategic Journey to Become a Leading Homebuilder
A Strategic Journey to Become a Leading Homebuilder 19
Slide 20: Significant Growth Evident Across Key Metrics
Significant Growth Evident Across Key Metrics Home Closings Total Revenue ($ in Billions) 12,524 $6.1 9,964 $4.8 8,760 $4.2 8,032 $3.9 7,369 $3.6 6,311 $3.0 5,642 $2.7 4,716 $2.3 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 Gross Profit ($ in Millions) Stockholders
Slide 21: Historical Operating Data by Region
Historical Operating Data by Region FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 Average Active Selling Communities East 134 173 161 153 152 159 144 153 145 139 145 129 126 Central 121 140 137 135 124 134 134 132 122 113 124 106 101 West 52
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Net Homebuilding Debt to Capitalization Ratio Reconciliation As of ($ in thousands) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Total Debt $ 3,082,648 $ 3,025,587 $ 2,928,395 $ 3,180,072 $ 3,769,740 $ 3,700,368 Le
Slide 23: Forward-Looking Statements
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