Taylor Morrison Home Corporation · NYSE:TMHC
Taylor Morrison Home — Q1 2021 Earnings Presentation
24 slides from Taylor Morrison Home's earnings presentation, Apr 29, 2021
Slide 1: Investor Presentation First Quarter 2021
Investor Presentation First Quarter 2021
Slide 2: About Taylor Morrison
About Taylor Morrison Headquartered in Scottsdale, Arizona, Taylor Morrison is a leading homebuilder and developer. We serve a broad array of consumers from coast to coast, including first-time, move-up, luxury and active lifestyle homebuyers, with high-quality homes across a wide range of price poi
Slide 3: The Making of the Fifth Largest Homebuilder
The Making of the Fifth Largest Homebuilder 3
Slide 4: Significant Growth Evident Across Key Metrics
Significant Growth Evident Across Key Metrics 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 $1,044 $3.6 $824 $739 $738 $2.4 $2.5 $680 $2.3 $2.2 $2.0 $566 $568 $1.8 $1.5 $416 201
Slide 5: With Platform in Place, Well Positioned for Value Creation
With Platform in Place, Well Positioned for Value Creation Balanced Sharpened Consumer- National Critical Local Optimized Focus on Centric Footprint in Operating Production Operational Technological Strong Housing Scale Processes Effectiveness Innovation Markets Experienced Deep and Team and Return-
Slide 6: At an Inflection Point in Improving Return Trajectory
At an Inflection Point in Improving Return Trajectory Mid-Teens Low-19% Range Range 18.6% 18.3% 10.5% 17.2% 16.6% 15.4% 15.4% 7.9% 7.9% 6.8% 5.9% 5.4% 1Q20 2Q20 3Q20 4Q20 1Q21 2020 2021 1Q20 2Q20 3Q20 4Q20 1Q21 2020 2021 Guidance Guidance Note: 2020 includes impact from acquisition of William Lyon H
Slide 7: Key Opportunities to Achieve Targeted Returns
Key Opportunities to Achieve Targeted Returns Operational Effectiveness Capital Efficiency Margin Enhancement Return-Accretive Land Investments • Maximize Procurement Capabilities • Expand Controlled Lot Share to 40% • Plan and Option Rationalization • Target Lower Duration Land Positions • Strategi
Slide 8: Management's Outlook for Select Financial Metrics
Management’s Outlook for Select Financial Metrics Second Quarter 2021 Full Year 2021 Average Active Community Count Approximately 330 Approximately 330 Home Closings 3,200-3,400 14,500-15,000 GAAP Home Closings Gross Margin Mid-18 Percent Range Low-19 Percent Range SG&A % of Home Closings Revenue No
Slide 9: Q1 2021 Highlights
Q1 2021 Highlights • Monthly absorption pace increased 42 percent to 4.3 Net Orders Absorption Pace sales per community, a company high. • Broad-based sales strength driven across all consumer groups, led by active adult homebuyers. +30% 42 to 4,492 • Managing sales via pricing and limited releases
Slide 10: First Quarter Sales Pace Reaches an All-Time High
10 1Q18 2.8 2Q18 2.6 3Q18 2.2 4Q18 1.6 1Q19 2.3 2Q19 2.6 Note: Comparisons to the prior-year quarter. 3Q19 2.4 4Q19 2.6 1Q20 3.1 2Q20 2.8 3Q20 3.8 4Q20 3.4 1Q21 4.3 1Q18 288 2Q18 297 East 3Q18 275 4Q18 366 Central 1Q19 372 West 2Q19 357 3Q19 346 4Q19 333 1Q20 378 2Q20 411 First Quarter Sales Pace Re
Slide 11: Diverse Product Portfolio Serves All Major Buyer Groups
Diverse Product Portfolio Serves All Major Buyer Groups Entry Level 32% Move Up 46% Active Adult 22% $550 $527 $490 $467 $453 1Q20 2Q20 3Q20 4Q20 1Q21 11
Slide 12: Digital Innovation Driving Enhanced Efficiency
Digital Innovation Driving Enhanced Efficiency The Latest Addition to our Virtual Sales Tools To-Be-Built Home Reservations We recently expanded our innovative suite of virtual sales tools with the launch of our to-be-built reservation system. With this industry-first tool, our customers can now con
Slide 13: Balanced Footprint with Deep Local Market Share
Balanced Footprint with Deep Local Market Share Homebuilding operations in many of the most attractive housing markets across 11 states in the U.S. Mix as of Q1 2021 West Central East Closings 38% 24% 37% Closings Revenue 44% 23% 33% Average Closing Price $554,000 $463,000 $424,000 Lot Supply 39% 32
Slide 14: Disciplined Approach to Land Portfolio Management
Disciplined Approach to Land Portfolio Management • Invested $552 million in land acquisition and development Total Owned 5.8 5.5 • Targeting $2.0 billion in 2021 5.2 5.0 4.9 • Current land approvals expected to impact closings in 4.7 2023 and beyond 4.0 3.8 3.7 3.8 3.8 3.2 • Approximately 73,000 to
Slide 15: Cash Flow Expected to Drive Further Deleveraging
Cash Flow Expected to Drive Further Deleveraging • Net debt-to-capital ratio expected to decline to the low-30 47% 46% percent range by the end of 2021 42% 40% 37% 39% Low-30% • Further reduction anticipated in 2022 Range • Net debt-to-capital increased in 1Q20 due to acquisition of William Lyon Hom
Slide 16: Capital Allocation Priorities Aim to Drive Long-Term Value
Capital Allocation Priorities Aim to Drive Long-Term Value $1.1 billion in available liquidity Disciplined due diligence for investments in core homebuilding operations and growing build-to-rent business to enhance existing scale Opportunistically manage balance sheet to achieve a targeted leverage
Slide 17: A Snapshot of the Last Three Year's Capital Deployment
A Snapshot of the Last Three Year’s Capital Deployment 17 Note: Data reflects aggregate annual totals from 2018, 2019 and 2020.
Slide 18: Financial Services
Financial Services • 750 Average FICO Score • 79% Conventional • Mortgage Lending • Pre-Qualification of Nearly All Buyers • 80% Average LTV Ratio • 20% Government • Title Insurance • Valuable Backlog Management • $380,000 Loan Amount • 1% Jumbo • Homeowners’ Insurance • Enhanced Customer Experience
Slide 19: Committed to ESG Performance and Transparency
Committed to ESG Performance and Transparency 2,700+ 5th 6 Years team members largest homebuilder in the U.S. America’s Most Trusted® Homebuilder award 7 of 8 100 percent 31,700+ of team members are enthusiastic of our new homes now offer hours of employee training about working for Taylor Morrison
Slide 20: Recognition for Our ESG Practices
Recognition for Our ESG Practices Explore our Third Annual ESG Report Here
Slide 21: Appendix
Appendix 21
Slide 22: Historical Operating Data by Region
Historical Operating Data by Region Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Average Active Selling Communities East 124 121 109 177 134 173 161 153 152 159 144 153 145 139 145 129 Central 115 124 118 131 121 140
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Net Homebuilding Debt to Capitalization Ratio Reconciliation As of ($ in thousands) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Total Debt $ 3,025,587 $ 2,928,395 $ 3,180,072 $ 3,769,740 $ 3,700,368 $ 1,940,77
Slide 24: 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