Releases

Taylor Morrison Reports Q4 Results With Sales Orders Up 42% and Sales Pace Per Community Up More Than 60% Year-over-Year

SCOTTSDALE, Ariz., Feb. 5, 2020 /PRNewswire/ -- Taylor Morrison Home Corporation (NYSE: TMHC) today reported adjusted diluted earnings per share of $2.98 and GAAP diluted earnings per share of $2.35.

Taylor Morrison (PRNewsFoto/Taylor Morrison) (PRNewsfoto/Taylor Morrison)

Fiscal Year 2019 Highlights:

  • Net sales orders were 10,517, a 25 percent increase over the prior year
  • Average monthly sales pace per community was 2.5, compared to 2.3 for 2018
  • Home closings were 9,964, an almost 14 percent increase over the prior year
  • Total revenue was $4.8 billion, a 13 percent increase over the prior year
  • Home closings gross margin adjusted for unusual items was 18.2 percent, while GAAP home closings gross margin was 17.0 percent

"To say that 2019 was a pivotal year in Taylor Morrison's history would be an understatement," said Sheryl Palmer, Chairman and CEO of Taylor Morrison. "We surpassed 10,000 sales orders for the first time, marking a significant milestone for us, and the sales momentum we saw build in 2019 has continued into 2020."

The Company finished Q4 with sales orders of 2,552, which was a 42 percent increase from the prior year quarter.  This represented a sales pace per community for the quarter of 2.6, which was tied with Q2 as the highest pace for the year.  Sales orders for fiscal year 2019 were 10,517, which represented a sales pace per community of 2.5 for the year.  "The strength in sales orders during the fourth quarter was consistent across all geographies and consumer groups led by entry-level, first move-up and second move-up each seeing at least a 50 percent increase," said Palmer.  "We're thrilled to see the sales success continuing into 2020, with a 46 percent growth in orders and a sales pace of more than 3.0 for January."

"We delivered 9,964 closings in 2019, an almost 14 percent increase over our results for the prior year and in-line with our most recent guidance," added Palmer.  "I'm proud of the teams' ability to deliver such strong sales and closings amidst a transformational acquisition in the works."         

The Company stated that they expect the acquisition of William Lyon Homes to close this week. "To support our continued growth we must think differently, operate differently and use our resources differently," added Palmer. "Effective upon closing, we've announced a new organizational structure that will provide greater line of sight into our corporate functions and help us streamline the regional areas given the added scale from William Lyon. Our regional structure will move from three to five and be led by Area Presidents from both Taylor Morrison and William Lyon. Through thoughtful and deliberate efforts, we've been able to outline an extremely strong combined business and assure that we'll have the best organizational structure and portfolio in place for a positive future."

"For the year, home closings gross margin was 18.2 percent when adjusted for the impact of unusual items, while GAAP home closings gross margin was 17.0 percent," said Dave Cone, Executive Vice President and Chief Financial Officer.  "We experienced certain unusual items during the quarter that impacted many of our key metrics. The impact to earnings before taxes included almost $50 million for an increase in our reserve related to remediating a warranty issue that impacted our Central region, $13 million for the write-off related to our Chicago exit, almost $11 million for transaction expenses related to both AV Homes and William Lyon Homes, $9 million for inventory impairments and almost $6 million related to the loss on extinguishment of debt due to the refinancing transactions earlier in the year. With all of this behind us, we're confident in how this positions the business and strengthens the balance sheet for the future."

Homebuilding inventories were nearly $4.0 billion at the end of the year, including 5,728 homes in inventory, compared to 6,014 homes in inventory at the end of the prior year.  Homes in inventory at the end of the quarter consisted of 3,450 sold units, 504 model homes and 1,774 inventory units, of which 361 were finished.  The Company ended the year with 4,711 units in backlog, a year-over-year increase of 13 percent, with a sales value of approximately $2.3 billion.

The Company finished the year with $326 million in unrestricted cash and a net homebuilding debt to capitalization ratio of 37.2 percent.  As of December 31, 2019, Taylor Morrison owned or controlled approximately 54,000 lots, representing 5.4 years of supply based on a trailing twelve months of closings and the Company is focused on securing land for 2021 and beyond.

Preliminary fourth quarter 2019 results for William Lyon included sales orders of 802 and home closings of 1,294.  Backlog at the end of the year included 876 units with a sales value of $382 million.

Annual Financial Comparison






($ thousands)







2019


2018


2019 vs. 2018

Total Revenue

$4,762,059


$4,227,393


12.6

%

Home Closings Revenue, Net

$4,623,484


$4,115,216


12.4

%

Home Closings Gross Margin

$786,627


$704,363


11.7

%


17.0

%


17.1

%


10 bps decrease

Adjusted Home Closings Gross Margin

$839,357


$753,327


11.4

%


18.2

%


18.3

%


10 bps decrease

SG&A

$490,271


$416,943


17.6

%

% of Home Closings Revenue, Net

10.6

%


10.1

%


50 bps increase

Adjusted SG&A

$

481,965



$

415,743



15.9

%

% of Home Closings Revenue, Net

10.4

%


10.1

%


30 bps increase
























Quarterly Financial Comparison






($ thousands)







2019


2018


2019 vs. 2018

Total Revenue

$1,466,436


$1,457,853


0.6

%

Home Closings Revenue, Net

$1,418,232


$1,411,524


0.5

%

Home Closings Gross Margin

$201,343


$203,048


(0.8)

%


14.2

%


14.4

%


20 bps decrease

Adjusted Home Closings Gross Margin

$254,073


$249,512


1.8

%


17.9

%


17.7

%


20 bps increase

SG&A

$142,472


$129,342


10.2

%

% of Home Closings Revenue, Net

10.0

%


9.2

%


80 bps increase

Adjusted SG&A

$

134,166



$

128,142



4.7

%

% of Home Closings Revenue, Net

9.5

%


9.1

%


40 bps increase

First Quarter 2020 Business Outlook

  • Average active community count is expected to be between 320 and 330
  • Home closings are expected to be between 2,100 and 2,200
  • GAAP home closings gross margin is expected to be about 18 percent
  • SG&A as a percentage of home closings revenue is expected to be in the mid 11 percent range
  • Effective tax rate is expected to be about 23.5 percent

"The 2020 year should prove exciting with the closing and integration of William Lyon, which will have a significant impact on our operating and financial metrics," said Cone.  "As we mentioned in the William Lyon acquisition announcement in November of last year, we will be in a position to provide annual guidance on the combined business during our first quarter call in late April."

Earnings Webcast

A public webcast to discuss the fourth quarter 2019 earnings will be held later today at 8:30 a.m. Eastern time. The participant dial-in is 1 (855) 470-8731 and the passcode is 7197299. More information can be found on the Company's investor relations website at investors.taylormorrison.com. A webcast replay will also be available on the site later today and will be available for one year from the date of the original earnings call.

About Taylor Morrison

Taylor Morrison Home Corporation (NYSE: TMHC) is a leading national homebuilder and developer that has been recognized as the 2016, 2017, 2018, 2019 and 2020 America's Most Trusted® Home Builder by Lifestory Research. Based in Scottsdale, Arizona we operate under two well-established brands, Taylor Morrison and Darling Homes. We serve a wide array of consumer groups from coast to coast, including first-time, move-up, luxury, and 55 plus buyers. In Texas, Darling Homes builds communities with a focus on individuality and custom detail while delivering on the Taylor Morrison standard of excellence.

For more information about Taylor Morrison and Darling Homes please visit www.taylormorrison.com or www.darlinghomes.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 "believe," "expect," "intend," "estimate," "anticipate," "project," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including statements related to expected operating and performing 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: changes in general and local economic conditions (including as a result of recent extreme weather 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; inflation or deflation; the seasonality of our business; 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 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; material losses in excess of insurance limits; 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 our substantial debt and the agreements governing such debt, including restrictive covenants contained in such agreements; our ability to access the capital markets; the inherent uncertainty associated with financial or other projections; the risks associated with maintaining effective internal controls over financial reporting; and risks related to the integration of William Lyon Homes and the ability to recognize the anticipated benefits from the combination of Taylor Morrison and William Lyon Homes. In addition, other such risks and uncertainties may be found in our most recent annual report on Form 10-K 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.

CONTACT: Investor Relations
Taylor Morrison Home Corporation
(480) 734-2060
investor@taylormorrison.com

Taylor Morrison Home Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts, unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2019


2018


2019


2018

Home closings revenue, net

$

1,418,232



$

1,411,524



$

4,623,484



$

4,115,216


Land closings revenue

12,690



21,566



27,081



39,901


Financial services revenue

30,698



20,245



92,815



67,758


Amenity and other revenue

4,816



4,518



18,679



4,518


Total revenues

1,466,436



1,457,853



4,762,059



4,227,393


Cost of home closings

1,216,889



1,208,476



3,836,857



3,410,853


Cost of land closings

23,453



18,754



32,871



33,458


Financial services expenses

14,491



9,822



51,086



41,469


Amenity and other expense

4,401



3,420



17,155



3,420


Total cost of revenues

1,259,234



1,240,472



3,937,969



3,489,200


Gross margin

207,202



217,381



824,090



738,193


Sales, commissions and other marketing costs

93,611



92,649



320,420



278,455


General and administrative expenses

48,861



36,693



169,851



138,488


Equity in income of unconsolidated entities

(1,526)



(3,555)



(9,509)



(13,332)


Interest Income, net

(423)



(350)



(2,673)



(1,639)


Other expense, net

8,718



8,388



7,226



11,816


Transaction and corporate reorganization expenses

4,201



49,428



10,697



50,889


Loss on extinguishment of debt, net





5,806




Income before income taxes

53,760



34,128



322,272



273,516


Income tax (benefit)/provision

(949)



24,913



67,358



63,036


Net income before allocation to non-controlling interests

54,709



9,215



254,914



210,480


Net income attributable to non-controlling interests - joint ventures

(51)



(105)



(262)



(533)


Net income before non-controlling interests - Former Principal Equityholders

54,658



9,110



254,652



209,947


Net income attributable to non-controlling interests - Former Principal Equityholders



(55)





(3,583)


Net income available to Taylor Morrison Home Corporation

$

54,658



$

9,055



$

254,652



$

206,364










Earnings per common share








Basic

$

0.52



$

0.08



$

2.38



$

1.85


Diluted

$

0.51



$

0.08



$

2.35



$

1.83


Weighted average number of shares of common stock:








Basic

105,835



116,933



106,997



111,743


Diluted

107,406



118,336



108,289



115,119


 

Taylor Morrison Home Corporation

Condensed Consolidated Balance Sheets

(In thousands)



December 31,
2019


December 31,
2018

Assets





Cash and cash equivalents


$

326,437



$

329,645


Restricted cash


2,135



2,214


Total cash, cash equivalents, and restricted cash


328,572



331,859


Owned inventory


3,967,359



3,965,306


Real estate not owned


19,185



15,259


Total real estate inventory


3,986,544



3,980,565


Land deposits


39,810



57,929


Mortgage loans held for sale


190,880



181,897


Derivative assets


2,099



1,838


Operating lease right of use assets


36,663




Prepaid expenses and other assets, net


85,515



98,225


Other receivables, net


70,447



86,587


Investments in unconsolidated entities


128,759



140,541


Deferred tax assets, net


140,466



145,076


Property and equipment, net


85,866



86,736


Intangible assets, net


637



1,072


Goodwill


149,428



152,116


Total assets


$

5,245,686



$

5,264,441


Liabilities





Accounts payable


$

164,580



$

151,586


Accrued expenses and other liabilities


325,370



266,686


Operating lease liabilities


42,317




Income taxes payable


3,719




Customer deposits


167,328



165,432


Estimated development liabilities


36,705



37,147


Senior notes, net


1,635,008



1,653,746


Loans payable and other borrowings


182,531



225,497


Revolving credit facility borrowings




200,000


Mortgage warehouse borrowings


123,233



130,353


Liabilities attributable to real estate not owned


19,185



15,259


Total liabilities


$

2,699,976



$

2,845,706


Stockholders' Equity





Total stockholders' equity


2,545,710



2,418,735


Total liabilities and stockholders' equity


$

5,245,686



$

5,264,441


 

Homes Closed and Home Closings Revenue, Net:



Three Months Ended December 31,


Homes Closed


Home Closings Revenue, Net


Average Selling Price

(Dollars in thousands)

2019


2018


Change


2019


2018


Change


2019


2018


Change

East

1,652



1,533



7.8

%


$

653,420



$

609,598



7.2

%


$

396



$

398



(0.5)

%

Central

840



735



14.3



402,786



345,765



16.5



480



470



2.1


West

644



838



(23.2)



362,026



456,161



(20.6)



562



544



3.3


Total

3,136



3,106



1.0

%


$

1,418,232



$

1,411,524



0.5

%


$

452



$

454



(0.4)

%



Twelve Months Ended December 31,


Homes Closed


Home Closings Revenue, Net


Average Selling Price

(Dollars in thousands)

2019


2018


Change


2019


2018


Change


2019


2018


Change

East

4,715



4,061



16.1

%


$

1,912,179



$

1,643,152



16.4

%


$

406



$

405



0.2

%

Central

2,784



2,380



17.0



1,327,197



1,126,446



17.8



477



473



0.8


West

2,465



2,319



6.3



1,384,108



1,345,618



2.9



562



580



(3.1)


Total

9,964



8,760



13.7

%


$

4,623,484



$

4,115,216



12.4

%


$

464



$

470



(1.3)

%



Net Sales Orders:



Three Months Ended December 31,


Net Sales Orders


Sales Value


Average Selling Price

(Dollars in thousands)

2019


2018


Change


2019


2018


Change


2019


2018


Change

East

1,282



867



47.9

%


$

509,633



$

342,748



48.7

%


$

398



$

395



0.8

%

Central

639



493



29.6



304,901



235,778



29.3



477



478



(0.2)


West

631



433



45.7



344,045



227,871



51.0



545



526



3.6


Total

2,552



1,793



42.3

%


$

1,158,579



$

806,397



43.7

%


$

454



$

450



0.9

%




Twelve Months Ended December 31,


Net Sales Orders


Sales Value


Average Selling Price

(Dollars in thousands)

2019


2018


Change


2019


2018


Change


2019


2018


Change

East

4,893



3,471



41.0

%


$

1,979,100



$

1,438,757



37.6

%


$

404



$

415



(2.7)

%

Central

3,019



2,697



11.9



1,434,406



1,300,630



10.3



475



482



(1.5)


West

2,605



2,232



16.7



1,405,357



1,356,634



3.6



539



608



(11.3)


Total

10,517



8,400



25.2

%


$

4,818,863



$

4,096,021



17.6

%


$

458



$

488



(6.1)

%



Sales Order Backlog:



As of December 31,


Sold Homes in Backlog


Sales Value


Average Selling Price

(Dollars in thousands)

2019


2018


Change


2019


2018


Change


2019


2018


Change

East

1,816



1,638



10.9

%


$

791,485



$

724,564



9.2

%


$

436



$

442



(1.4)

%

Central

1,655



1,420



16.5



839,004



731,795



14.7



507



515



(1.6)


West

1,240



1,100



12.7



644,459



623,210



3.4



520



567



(8.3)


Total

4,711



4,158



13.3

%


$

2,274,948



$

2,079,569



9.4

%


$

483



$

500



(3.4)

%

 

Average Active Selling Communities:



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2019


2018


Change


2019


2018


Change

East

152



177



(14.1)

%


159



134



18.7

%

Central

124



131



(5.3)



134



121



10.7


West

57



58



(1.7)



58



52



11.5


Total

333



366



(9.0)

%


351



307



14.3

%

Reconciliation of Non-GAAP Financial Measures

The following tables set forth reconciliations of: (i) adjusted income before income taxes, (ii) EBITDA and adjusted EBITDA to net income before allocation to non-controlling interests, (iii) adjusted net income and adjusted earnings per share, (iv) net homebuilding debt to total capitalization ratio, (v) home closings gross margin and adjusted home closings gross margin, (vi) adjusted SG&A, and (vii) income before income taxes margin and adjusted income before income taxes margin.

Adjusted income before income taxes is a non-GAAP financial measure that reflects our income before income taxes excluding the impact of significant and unusual transactions, which for the three and twelve months ended December 31, 2019 included impairments, warranty expense, litigation expenses for such warranty expense, loss on extinguishment of debt, and write-off of expenses related to the divestiture of certain assets, and for the three and twelve months ended December 31, 2018 included impairments and warranty expenses, as well as, in each period, transaction and corporate reorganization expenses.  EBITDA and Adjusted EBITDA are non-GAAP financial measures that measure performance by adjusting net income before allocation to non-controlling interests to exclude interest amortized to cost of sales and interest income, net, income taxes, depreciation and amortization (EBITDA), and non-cash compensation expense, if any, significant and unusual transactions, as well as, in each period, transaction and corporate reorganization expenses and loss on extinguishment of debt (Adjusted EBITDA).  Adjusted net income and adjusted earnings per share are non-GAAP financial measures that reflect the net income available to the Company excluding the impact of significant and unusual transactions, which for the three and twelve months ended December 31, 2019 included impairments, warranty expense, litigation expenses for such warranty expense, loss on extinguishment of debt, and write-off of expenses related to the divestiture of certain assets, and for the three and twelve months ended December 31, 2018 included impairments and warranty expenses, as well as, in each period, transaction and corporate reorganization expenses and the tax impact due to such items.  Net homebuilding debt to capitalization is a non-GAAP financial measure we calculate by dividing (i) total debt, less unamortized debt issuance costs and mortgage warehouse borrowings, net of unrestricted cash and cash equivalents, by (ii) total capitalization (the sum of net homebuilding debt and total stockholders' equity).  Adjusted home closings gross margin is a non-GAAP financial measure calculated based on GAAP home closings gross margin (which is inclusive of capitalized interest), excluding impairments and warranty charges.  Adjusted SG&A is a non-GAAP measure that reflects our GAAP SG&A excluding the impact of significant and unusual transactions, which for the three and twelve months ended December 31, 2019 included litigation expenses for the warranty expense and write-off expenses related to the divestiture of certain assets, and for the three and twelve months ended December 31, 2018 included litigation expenses for the warranty expense.

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 income before income taxes, adjusted net income and adjusted earnings per share, adjusted SG&A, 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 inventory impairment charges and warranty charges.

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.


Three Months Ended
December 31,


Twelve Months Ended
December 31,

(Dollars in thousands, except per share data)

2019


2018


2019


2018









Income before income taxes

$

53,760



$

34,128



$

322,272



$

273,516


Significant and unusual transactions

72,146



47,600



72,146



50,100


Transaction and corporate reorganization expenses

4,201



49,428



10,697



50,889


Loss on extinguishment of debt





5,806




Adjusted income before income taxes

$

130,107



$

131,156



$

410,921



$

374,505










Net income available to TMHC

$

54,658



$

9,055



$

254,652



$

206,364


Significant and unusual transactions

72,146



47,600



72,146



50,100


Transaction and corporate reorganization expenses

4,201



49,428



10,697



50,889


Loss on extinguishment of debt





5,806




Tax impact due to significant and unusual transactions, transaction and corporate reorganization expenses, and loss on extinguishment of debt

(17,632)



(919)



(20,578)



(1,874)


Adjustments to non-controlling interest



(587)





(1,692)


Adjusted net income - Basic

$

113,373



$

104,577



$

322,723



$

303,787










Net income available to TMHC

$

54,658



$

9,055



$

254,652



$

206,364


Net income attributable to non-controlling interests - Former Principal Equityholders



55





3,583


Loss fully attributable to public holding company



191





540


Net income - Diluted

54,658



9,301



254,652



210,487


Significant and unusual transactions

72,146



47,600



72,146



50,100


Transaction and corporate reorganization expenses

4,201



49,428



10,697



50,889


Loss on extinguishment of debt





5,806




Tax impact due to significant and unusual transactions, transaction and corporate reorganization expenses, and loss on extinguishment of debt

(17,632)



(919)



(20,578)



(1,874)


Adjusted net income - Diluted

113,373



105,410



322,723



309,602










Weighted average number of shares of common stock:








Basic

105,835



116,933



106,997



111,743


Diluted

107,406



118,336



108,289



115,119










Earnings per common share:








Basic

$

0.52



$

0.08



$

2.38



$

1.85


Diluted

$

0.51



$

0.08



$

2.35



$

1.83










Adjusted earnings per common share:








Basic

$

1.07



$

0.89



$

3.02



$

2.72


Diluted

$

1.06



$

0.89



$

2.98



$

2.69


 

Income before income taxes margin and Adjusted income before income taxes margin




Twelve Months Ended
December 31,

(Dollars in thousands)


2019


2018

Total Revenues


$

4,762,059



$

4,227,393







Income before income taxes


$

322,272



$

273,516


Significant and unusual transactions


72,146



50,100


Transaction and corporate reorganization expenses


10,697



50,889


Loss on extinguishment of debt


5,806




Adjusted Income before income taxes


$

410,921



$

374,505












Income before income taxes margin


6.8

%


6.5

%

Adjusted income before income taxes margin


8.6

%


8.9

%

 

Adjusted Home Closings Gross Margin



Three Months Ended

December 31,


Twelve Months Ended
December 31,

(Dollars in thousands)

2019


2018


2019


2018

Home closings revenue

$

1,418,232



$

1,411,524



$

4,623,484



$

4,115,216


Cost of home closings

1,216,889



1,208,476



3,836,857



3,410,853


Home closings gross margin

$

201,343



$

203,048



$

786,627



$

704,363


        Inventory impairment charges

9,384



9,631



9,384



9,631


        Warranty charge

43,346



36,833



43,346



39,333


Adjusted home closings gross margin

$

254,073



$

249,512



$

839,357



$

753,327


Home closings gross margin as a percentage of home closings revenue

14.2

%


14.4

%


17.0

%


17.1

%

Adjusted home closings gross margin as a percentage of home closings revenue

17.9

%


17.7

%


18.2

%


18.3

%










Adjusted SG&A Reconciliation



Three Months Ended

December 31,


Twelve Months Ended
December 31,

(Dollars in thousands)

2019


2018


2019


2018

Sales, commissions and other marketing costs

$

93,611



$

92,649



$

320,420



$

278,455


General and administrative expenses

48,861



36,693



169,851



138,488


Total SG&A

$

142,472



$

129,342



$

490,271



$

416,943


SG&A related to significant and unusual transactions

8,306



1,200



8,306



1,200


Adjusted Total SG&A

$

134,166



$

128,142



$

481,965



$

415,743










Home closings revenue, net

$

1,418,232



$

1,411,524



$

4,623,484



$

4,115,216










Total SG&A as % of Home closings revenue, net

10.0

%


9.2

%


10.6

%


10.1

%

Total adjusted SG&A as % of Home closings revenue, net

9.5

%


9.1

%


10.4

%


10.1

%

 

EBITDA and Adjusted EBITDA Reconciliation



Three Months Ended December 31,

(Dollars in thousands)

2019


2018

Net income before allocation to non-controlling interests

$

54,709



$

9,215


Interest income, net

(423)



(350)


Amortization of capitalized interest

30,614



26,459


Income tax provision

(949)



24,913


Depreciation and amortization

1,436



2,089


EBITDA

$

85,387



$

62,326


Non-cash compensation expense

3,827



4,746


Significant and unusual transactions

72,146



47,600


Transaction and corporate reorganization expenses

4,201



49,428


Adjusted EBITDA excluding significant and non routine transaction type costs

$

165,561



$

164,100






Total revenues

$

1,466,436



$

1,457,853


EBITDA as a percentage of total revenues

5.8

%


4.3

%

Adjusted EBITDA as a percentage of total revenues

11.3

%


11.3

%

 

Net Homebuilding Debt to Capitalization Ratio Reconciliation


(Dollars in thousands)

December 31,
2019

Total debt

$

1,940,772


Less unamortized debt issuance costs

(14,992)


Less mortgage warehouse borrowings

123,233


Total homebuilding debt

$

1,832,531


Less cash and cash equivalents

326,437


Net homebuilding debt

$

1,506,094


Total equity

2,545,710


Total capitalization

$

4,051,804




Net homebuilding debt to capitalization ratio

37.2

%

 

SOURCE Taylor Morrison