Slides
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Investor Presentation Fourth Quarter 2024
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Strategic priorities grounded in sustaining attractive full-cycle returns Operational Efficiency • Diversified Consumer Base • Balanced To-be-Built and Spec Home Strategy • Pace and Price Management • Floorplan and Option Rationalization • “Canvas” Option Packages on All Spec Homes • Digital Sales and Marketing Innovation • Efficiencies with Enhanced Scale Returns-Focused Land Investment • Focused on Investing in Prime Core Locations • Further Growth Opportunities Across All Existing Markets of Operations • Utilizing Balance Sheet-Friendly Financing Structures for Capital Efficiency, Risk Mitigation • Strong Internal Development Expertise Expands Investment Opportunities and Margin Potential • Invest to Support 10% Annual Home Closings Growth Target Balanced Capital Allocation • Invest for Smart Growth to Drive Returns • Maintain Significant Liquidity • Proactive Liability Management • Return Excess Capital via Share Repurchases 2
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4,716 5,642 6,311 7,369 8,032 8,760 9,964 12,524 13,699 12,647 11,495 12,896 Value creation journey provided critical depth and breadth for long-term performance 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Milestones $722M IPO marked largest in NYSE homebuilding history Acquired Darling Homes (Houston and Dallas) Sold Canadian operations Acquired JEH Homes (Atlanta) and three divisions of Orleans Homes (Charlotte, Raleigh, Chicago) Acquired Acadia Homes (Atlanta) Increased public float to 70% from 25% through divestiture of private equity sponsors’ ownership Became a fully-floated public company Acquired AV Homes, adding scale to AZ, TX and Carolinas markets and entrance into Jacksonville Entered the Build-to-Rent business with unique product offering Acquired William Lyon Homes, adding scale to AZ, CA and TX markets and entrance into WA, OR and NV Exited Chicago Debuted on the Fortune 500 List Launched Build-to-Rent brand, Yardly Celebrated 100,000 home closings since going public Entered Indianapolis with acquisition of Pyatt Builders Home Closings 3
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Annualized Monthly Sales Pace Home Closings Gross Margin Long-term targets reflect structural improvements to our expected earnings potential 4 Return on Equity1 Note: (1) ROE is calculated as trailing-twelve month net income divided by the average of stockholders’ equity in the current and prior-year period. 2.3 3.0 Low-Three Range 2013-19 Average 2024 Target 18.8% 24.4% Low-to-Mid 20% Range 2013-19 Average 2024 Target 10.3% 15.8% Mid-to-High Teen Range 2013-19 Average 2024 Target
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At a glance 12,896 home closings 5 $7.8 billion total revenue 3.0 average monthly sales pace 86,153 total homebuilding lots (57% controlled) 6.6 years of total lot supply (2.8 years owned) 339 active selling communities fourth quarter 2024 $608,000 average home closing price 24.9% adjusted home closings gross margin 15.8% return on equity full year 2024
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Diverse portfolio serves consumers across the homebuyer spectrum 6 Product portfolio serves a broad range of consumers Attractive coast-to-coast footprint in top markets Entry Level 32% Move Up 48% Resort Lifestyle 20% Sales by Consumer Group1 Note: (1) Data as of Q4 2024.
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$471,000 Average Loan Amount Taylor Morrison Home Funding Borrower Snapshot Mortgage Capture Rate 86% 88% 89% Q4 2023 Q3 2024 Q4 2024 Our buyers tend to be well-qualified with financial flexibility 7 Note: (1) Defined per mortgage disclosures as buyers who have not owned a home in the prior three years. Mortgage Unit Product Mix as of Q4 2024 Conventional 73% FHA 19% VA 7% Jumbo 1% 752 Average FICO Score 23% Average Downpayment 44% First-Time Homebuyers1 39% Average Debt-to-Income Ratio
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• Disciplined land investment strategy focuses on prime land locations in core submarkets • Utilizing land-lighter investment tools to balance cost of capital with expected returns • Targeting controlled share of at least 60-65% in near term • Expect to invest ~$2.6 billion in homebuilding land acquisition and development in 2025 • Total investment was $2.4 billion in 2024 • Expect community count to increase to at least 355 by the end of 2025 Disciplined land investment supported by strong lot portfolio 8 Homebuilding Lot Supply Years of Homebuilding Lot Supply 51% 53% 57% 49% 47% 43% 74,787 72,362 86,153 Q4 2022 Q4 2023 Q4 2024 Owned Controlled 5.9 6.3 6.6 2.9 3.0 2.8 Q4 2022 Q4 2023 Q4 2024 Total Owned Based on trailing-twelve month closings
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Capital allocation balances liquidity, growth and returns 9 Reinvest in Our Business Balance Sheet Stewardship Maintain Strong Liquidity Evaluate Growth Opportunities Return Cash to Shareholders ▪ Balanced capital allocation strategy aims to deliver shareholder returns over the course of a housing cycle ▪ Significant investment to achieve and maintain critical scale and diversification ▪ Prudent balance sheet management prioritizes liquidity ▪ Since 2015, we have repurchased nearly 55% of beginning shares outstanding for approx. $1.8 billion
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Well-capitalized balance sheet provides financial flexibility 10 • $1.4 billion total liquidity • $487 million unrestricted cash • $947 billion total revolving credit facility capacity, which was undrawn outside of normal course letters of credit • 20.0% net homebuilding debt-to-capital ratio • Expect to repurchase $300 million to $350 million of common stock in 2025 • $910M remaining authorization Share Repurchases (in Millions) Senior Note Maturity Schedule (in Millions) $103 $281 $376 $128 $348 2020 2021 2022 2023 2024 $527 $450 $500 2025 2026 2027 2028 2029 2030 10 Note: All as of year end.
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45% 47% 47% 53% 58% 53% 15% 16% 16% 16% 17% 15% Q3 2023 Q4 2023 1Q 2024 2Q 2024 3Q 2024 Q4 2024 Our digital sales tools have modernized the homebuying experience 11 Online reservations that convert to sales Online reservations as a percentage of gross sales
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12 ~40 build-to-rent owned & controlled communities 9 markets with Yardly operations Our growing Build-to-Rent business develops single-family rental communities designed to cater to consumers seeking an alternative to traditional multi-family rentals. 5 to 7 asset dispositions expected in 2025
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Operating statistics 4Q 2024 4Q 2023 Change 2024 2023 Change Ending active selling communities 339 327 4% 339 327 4% Net sales orders 2,621 2,361 11% 12,248 10,830 13% Net sales orders per community per month 2.6 2.4 8% 3.0 2.8 7% Cancellation rate 13.1% 11.6% 150 bps 9.5% 12.1% (260) bps Home closings 3,571 3,190 12% 12,896 11,495 12% Backlog units 4,742 5,289 (10)% 4,742 5,289 (10)% Income statement metrics Home closings revenue $2,170 $1,938 12% $7,755 $7,159 8% Total revenue $2,356 $2,020 17% $8,168 $7,418 10% Home closings gross margin 24.8% 24.1% 70 bps 24.4% 23.9% 50 bps Adjusted home closings gross margin 24.9% 24.1% 80 bps 24.5% 24.0% 50 bps SG&A % of home closings revenue 9.4% 9.7% (30) bps 9.9% 9.8% 10 bps Earnings per Diluted Share $2.30 $1.58 46% $8.27 $6.98 19% Adjusted Earnings per Diluted Share $2.64 $2.05 29% $8.72 $7.54 16% Balance sheet metrics Cash and equivalents $487 $799 (39)% $487 $799 (39)% Stockholders' equity $5,878 $5,332 10% $5,878 $5,332 10% Book value per diluted share $55.87 $48.93 14% $55.02 $48.41 14% Homebuilding debt-to-capitalization 24.9% 26.0% (110) bps 24.9% 26.0% (110) bps Homebuilding net debt-to-capitalization 20.0% 16.8% 320 bps 20.0% 16.8% 320 bps Key metrics 13 Note: Dollars in millions, unless noted.
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First quarter and full year 2025 guidance metrics First Quarter 2025 Full Year 2025 Ending active community count 340 to 345 At least 355 Home closings Approximately 2,900 13,500 to 14,000 Average closing price $590,000 to $600,000 $590,000 to $600,000 GAAP home closings gross margin High-23% Range 23% to 24% SG&A % of home closings revenue Not Provided Mid-9% Range Effective tax rate Approximately 24% 24.5% to 25.0% Diluted share count Approximately 104 Million Approximately 102 Million Share repurchases Not Provided $300 Million to $350 Million Homebuilding land & development spend Not Provided Around $2.6 Billion 14 Outlook issued Feb. 12, 2025
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Appendix
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Headquartered in Scottsdale, Arizona, Taylor Morrison (NYSE:TMHC) is a leading land developer and homebuilder with operations in 20 housing markets across 12 states. We serve a wide array of homebuyers with our diverse product portfolio, including entry level, move up and resort lifestyle consumers. We also develop lifestyle-oriented horizontal apartment communities that meet the need of rental households. Our Financial Services segment offers mortgage financing, title services and homeowners’ insurance. Backed by a homebuilding legacy of over 100 years, we are committed to sustainability, our communities and our team. This commitment has helped us earn the distinction of America’s Most Trusted® Homebuilder by Lifestory Research for an unmatched ten consecutive years. About Taylor Morrison 16
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What sets Taylor Morrison apart National, regional and local scale Enhanced scale provides operational efficiencies, cost leverage and land advantages 17 Diversified consumer groups and price points Exposure to key demographic groups mitigates risk and enables a balanced spec and to-be-built business Core locations in prime submarkets Concentration in prime locations enhances our portfolio’s through-the-cycle resiliency 1 2 3 4 Consumer-centric mantra Floorplans, option offerings and digital sales capabilities are driven by deep research insights to best serve our consumers 5 Well-capitalized balance sheet Significant financial flexibility to invest for growth and drive shareholder returns 6 Community-focused land developer Development expertise adds value to homebuilding operations and expands investment opportunities 7 America’s Most Trusted® builder Committed to delivering an exceptional customer experience and embracing smart innovation 8 Wholly-owned financial services Leveraging finance as a sales tool improves customer experience, operational predictability and profitability
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Historical operating data by region 18 Note: Dollars in millions, unless noted. Totals may not sum due to rounding. 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 Net Sales Orders East 4,128 1,079 1,047 940 902 3,968 1,295 1,160 1,140 993 4,588 Central 2,289 674 808 641 602 2,725 904 815 747 784 3,250 West 3,070 1,101 1,168 1,011 857 4,137 1,487 1,136 943 844 4,410 TMHC 9,487 2,854 3,023 2,592 2,361 10,830 3,686 3,111 2,830 2,621 12,248 Homes Closed East 4,764 1,004 1,228 996 1,252 4,480 933 1,237 1,320 1,432 4,922 Central 3,359 731 936 709 767 3,143 832 864 932 924 3,552 West 4,524 806 961 934 1,171 3,872 966 1,099 1,142 1,215 4,422 TMHC 12,647 2,541 3,125 2,639 3,190 11,495 2,731 3,200 3,394 3,571 12,896 Home Closings Revenue East $2,674 $602 $732 $573 $712 $2,619 $542 $691 $758 $836 $2,827 Central $2,015 $463 $613 $423 $436 $1,936 $472 $481 $516 $501 $1,969 West $3,201 $548 $652 $616 $789 $2,604 $622 $748 $755 $833 $2,959 TMHC $7,889 $1,613 $1,997 $1,612 $1,938 $7,159 $1,636 $1,920 $2,029 $2,170 $7,755 Home Closings Gross Margin East 26.6% 27.5% 27.8% 27.6% 26.9% 27.4% 27.0% 26.0% 27.3% 27.4% 26.9% Central 24.4% 24.0% 26.1% 25.6% 25.8% 25.4% 26.0% 25.3% 24.6% 22.3% 24.5% West 24.4% 19.9% 18.3% 17.3% 20.6% 19.1% 19.9% 20.8% 22.5% 23.7% 21.9% TMHC 25.2% 23.9% 24.2% 23.1% 24.1% 23.9% 24.0% 23.8% 24.8% 24.8% 24.4% Sales Order Backlog East 2,583 2,658 2,477 2,421 2,071 2,071 2,433 2,356 2,176 1,737 1,737 Central 1,717 1,660 1,532 1,464 1,299 1,299 1,371 1,423 1,238 1,098 1,098 West 1,654 1,949 2,156 2,233 1,919 1,919 2,440 2,477 2,278 1,907 1,907 TMHC 5,954 6,267 6,165 6,118 5,289 5,289 6,244 6,256 5,692 4,742 4,742 Backlog Value East $1,733 $1,776 $1,627 $1,613 $1,480 $1,480 $1,715 $1,641 $1,494 $1,191 $1,191 Central $1,211 $1,133 $1,009 $960 $864 $864 $871 $875 $758 $669 $669 West $1,119 $1,328 $1,458 $1,524 $1,300 $1,300 $1,662 $1,682 $1,578 $1,333 $1,333 TMHC $4,064 $4,237 $4,094 $4,097 $3,645 $3,645 $4,248 $4,198 $3,830 $3,192 $3,192
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Disclosures
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Reconciliation of non-GAAP measures 20 Adjusted Net Income and Adjusted Earnings Per Common Share Three Months Ended December 31, Twelve Months Ended December 31, (Dollars in thousands, except per share data) 2024 2023 2024 2023 Net income $ 242,453 $ 172,585 $ 883,309 $ 768,929 Legal reserves or settlements 17,392 64,665 23,682 64,665 Real estate impairment charges 20,530 — 29,637 11,791 Pre-acquisition abandonment charges 6,545 1,176 9,453 4,235 Loss on extinguishment of debt, net — 26 — 295 Tax impact due to above non-GAAP reconciling items (9,160) (15,216) (14,638) (19,737) Adjusted net income $ 277,760 $ 223,236 $ 931,443 $ 830,178 Basic weighted average number of shares 103,189 107,227 104,813 108,424 Adjusted earnings per common share - Basic $ 2.69 $ 2.08 $ 8.89 $ 7.66 Diluted weighted average number of shares 105,218 108,969 106,846 110,145 Adjusted earnings per common share - Diluted $ 2.64 $ 2.05 $ 8.72 $ 7.54
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Reconciliation of non-GAAP measures 21 Adjusted Home Closings Gross Margin Three Months Ended December 31, Twelve Months Ended December 31, (Dollars in thousands) 2024 2023 2024 2023 Home closings revenue $ 2,169,703 $ 1,937,632 $ 7,755,219 $ 7,158,857 Cost of home closings 1,632,003 1,470,652 5,863,743 5,451,401 Home closings gross margin $ 537,700 $ 466,980 $ 1,891,476 $ 1,707,456 Inventory impairment charges 2,711 — 5,036 11,791 Adjusted home closings gross margin $ 540,411 $ 466,980 $ 1,896,512 $ 1,719,247 Home closings gross margin as a percentage of home closings revenue 24.8% 24.1% 24.4% 23.9% Adjusted home closings gross margin as a percentage of home closings revenue 24.9% 24.1% 24.5% 24.0%
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Reconciliation of non-GAAP measures 22 Debt to Capitalization Ratios Reconciliation (Dollars in thousands) As of December 31, 2024 As of September 30, 2024 As of December 31, 2023 Total debt $ 2,120,483 $ 2,143,223 $ 2,017,102 Plus: unamortized debt issuance cost, net 6,616 7,056 8,375 Less: mortgage warehouse borrowings (174,460) (233,331) (153,464) Total homebuilding debt $ 1,952,639 $ 1,916,948 $ 1,872,013 Total equity 5,878,180 5,723,462 5,332,286 Total capitalization $ 7,830,819 $ 7,640,410 $ 7,204,299 Total homebuilding debt to capitalization ratio 24.9% 25.1% 26.0% Total homebuilding debt $ 1,952,639 $ 1,916,948 $ 1,872,013 Less: cash and cash equivalents (487,151) (256,447) (798,568) Net homebuilding debt $ 1,465,488 $ 1,660,501 $ 1,073,445 Total equity 5,878,180 5,723,462 5,332,286 Total capitalization $ 7,343,668 $ 7,383,963 $ 6,405,731 Net homebuilding debt to capitalization ratio 20.0% 22.5% 16.8%
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Reconciliation of non-GAAP measures In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we provide our investors with supplemental information relating to: (i) adjusted net income and adjusted earnings per common share, (ii) adjusted home closings gross margin and (iii) net homebuilding debt to capitalization ratio. Adjusted net income and adjusted earnings per common share are non-GAAP financial measures that reflect the net income/(loss) available to the Company excluding, to the extent applicable in a given period, the impact of inventory and real estate impairment charges, impairment of investment in unconsolidated entities, pre-acquisition abandonment charges, gains/losses on land transfers to joint ventures, extinguishment of debt, net, and legal reserves or settlements that the Company deems not to be in the ordinary course of business and in the case of adjusted net income and adjusted earnings per common share, the tax impact due to such items. Adjusted home closings gross margin is a non-GAAP financial measure calculated as GAAP home closings gross margin (which is inclusive of capitalized interest), excluding inventory impairment charges. Net homebuilding debt to capitalization ratio is a non-GAAP financial measure we calculate by dividing (i) total debt, plus unamortized debt issuance cost/(premium), net, and less mortgage warehouse borrowings, net of unrestricted cash and cash equivalents (“net homebuilding debt”), by (ii) total capitalization (the sum of net homebuilding debt and total stockholders’ equity). Management uses these non-GAAP financial measures to evaluate our performance on a consolidated basis, as well as the performance of our segments, 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 financial 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 net income and adjusted earnings per common share 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. 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 items or transactions we do not believe are characteristic of our ongoing operations or performance. 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. A reconciliation of these adjusted metrics to the comparable GAAP measures is presented on the pages above. 23
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Forward-looking statements This presentation 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 ““anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “will,” “can,” “could,” “might,” “should” and similar expressions identify forward-looking statements, including statements related to expected financial, operating and performance 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: inflation or deflation; changes in general and local economic 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; the seasonality of our business; the physical impacts of climate change and the increased focus by third-parties on sustainability issues; 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; failure to develop and maintain relationships with suitable land banks; 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 lender relationships; our ability to use deferred tax assets; raw materials and building supply shortages and price fluctuations, including as a result of tariffs; 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; 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 instability in the banking system; risks associated with civil unrest, acts of terrorism, threats to national security, the conflicts in Eastern Europe and the Middle East and other geopolitical events; the scale and scope of current and future public health events, including pandemics and epidemics; any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government’s operations (also known as a government shutdown), and financial markets’ and businesses’ reactions to any such failure; 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 risks associated with maintaining effective internal controls over financial reporting; provisions in our charter and bylaws that may delay or prevent an acquisition by a third party; and our ability to effectively manage our expanded operations. In addition, other such risks and uncertainties may be found in our most recent annual report on Form 10-K and our subsequent quarterly reports 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. Investor Relations Contact Mackenzie Aron Vice President, Investor Relations (407) 906-6262 investor@taylormorrison.com 24