ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 90-0907433 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
4900 N. Scottsdale Road, Suite 2000 Scottsdale, Arizona | 85251 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ý | |||
Non-accelerated filer (Do not check if a smaller reporting company) | ¨ | Smaller Reporting Company | ¨ | |||
Emerging Growth Company | ¨ |
Class | Outstanding as of April 27, 2017 | |
Class A common stock, $0.00001 par value | 52,108,830 | |
Class B common stock, $0.00001 par value | 67,390,504 |
Page | |
March 31, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 300,839 | $ | 300,179 | ||||
Restricted cash | 1,320 | 1,633 | ||||||
Total cash, cash equivalents, and restricted cash | 302,159 | 301,812 | ||||||
Owned inventory | 3,059,016 | 3,010,967 | ||||||
Real estate not owned under option agreements | 4,682 | 6,252 | ||||||
Total real estate inventory | 3,063,698 | 3,017,219 | ||||||
Land deposits | 36,283 | 37,233 | ||||||
Mortgage loans held for sale | 109,079 | 233,184 | ||||||
Derivative assets | 1,961 | 2,291 | ||||||
Prepaid expenses and other assets, net | 81,165 | 73,425 | ||||||
Other receivables, net | 100,774 | 115,246 | ||||||
Investments in unconsolidated entities | 171,815 | 157,909 | ||||||
Deferred tax assets, net | 206,634 | 206,634 | ||||||
Property and equipment, net | 6,055 | 6,586 | ||||||
Intangible assets, net | 2,924 | 3,189 | ||||||
Goodwill | 66,198 | 66,198 | ||||||
Total assets | $ | 4,148,745 | $ | 4,220,926 | ||||
Liabilities | ||||||||
Accounts payable | $ | 136,413 | $ | 136,636 | ||||
Accrued expenses and other liabilities | 167,435 | 209,202 | ||||||
Income taxes payable | 27,205 | 10,528 | ||||||
Customer deposits | 151,751 | 111,573 | ||||||
Senior notes, net | 1,238,059 | 1,237,484 | ||||||
Loans payable and other borrowings | 156,330 | 150,485 | ||||||
Revolving credit facility borrowings | — | — | ||||||
Mortgage warehouse borrowings | 69,146 | 198,564 | ||||||
Liabilities attributable to real estate not owned under option agreements | 4,682 | 6,252 | ||||||
Total liabilities | 1,951,021 | 2,060,724 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 16) | ||||||||
Stockholders’ Equity | ||||||||
Class A common stock, $0.00001 par value, 400,000,000 shares authorized, 54,955,018 and 33,340,291 shares issued, 52,101,585 and 30,486,858 shares outstanding as of March 31, 2017 and December 31, 2016, respectively | — | — | ||||||
Class B common stock, $0.00001 par value, 200,000,000 shares authorized, 67,390,504 and 88,942,052 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 1 | 1 | ||||||
Preferred stock, $0.00001 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2017 and December 31, 2016 | — | — | ||||||
Additional paid-in capital | 773,549 | 384,709 | ||||||
Treasury stock at cost; 2,853,433 shares as of March 31, 2017 and December 31, 2016 | (43,524 | ) | (43,524 | ) | ||||
Retained earnings | 240,089 | 228,613 | ||||||
Accumulated other comprehensive loss | (17,989 | ) | (17,989 | ) | ||||
Total stockholders’ equity attributable to Taylor Morrison Home Corporation | 952,126 | 551,810 | ||||||
Non-controlling interests – joint ventures | 1,126 | 1,525 | ||||||
Non-controlling interests – Principal Equityholders | 1,244,472 | 1,606,867 | ||||||
Total stockholders’ equity | 2,197,724 | 2,160,202 | ||||||
Total liabilities and stockholders’ equity | $ | 4,148,745 | $ | 4,220,926 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Home closings revenue, net | $ | 751,485 | $ | 629,088 | ||||
Land closings revenue | 3,356 | 6,602 | ||||||
Mortgage operations revenue | 14,249 | 9,639 | ||||||
Total revenues | 769,090 | 645,329 | ||||||
Cost of home closings | 616,295 | 514,532 | ||||||
Cost of land closings | 2,400 | 5,632 | ||||||
Mortgage operations expenses | 8,702 | 6,524 | ||||||
Total cost of revenues | 627,397 | 526,688 | ||||||
Gross margin | 141,693 | 118,641 | ||||||
Sales, commissions and other marketing costs | 55,617 | 47,841 | ||||||
General and administrative expenses | 33,128 | 29,424 | ||||||
Equity in income of unconsolidated entities | (1,085 | ) | (782 | ) | ||||
Interest income, net | (90 | ) | (87 | ) | ||||
Other (income)/expense, net | (351 | ) | 3,254 | |||||
Income before income taxes | 54,474 | 38,991 | ||||||
Income tax provision | 18,873 | 12,887 | ||||||
Net income before allocation to non-controlling interests | 35,601 | 26,104 | ||||||
Net loss/(income) attributable to non-controlling interests — joint ventures | 9 | (184 | ) | |||||
Net income before non-controlling interests — Principal Equityholders | 35,610 | 25,920 | ||||||
Net income attributable to non-controlling interests — Principal Equityholders | (24,134 | ) | (19,107 | ) | ||||
Net income available to Taylor Morrison Home Corporation | $ | 11,476 | $ | 6,813 | ||||
Earnings per common share | ||||||||
Basic | $ | 0.30 | $ | 0.21 | ||||
Diluted | $ | 0.30 | $ | 0.21 | ||||
Weighted average number of shares of common stock: | ||||||||
Basic | 38,554 | 31,923 | ||||||
Diluted | 120,478 | 121,267 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Income before non-controlling interests, net of tax | $ | 35,601 | $ | 26,104 | ||||
Other comprehensive loss, net of tax: | ||||||||
Post-retirement benefits adjustments, net of tax | — | (447 | ) | |||||
Other comprehensive loss, net of tax | — | (447 | ) | |||||
Comprehensive income | 35,601 | 25,657 | ||||||
Comprehensive loss/(income) attributable to non-controlling interests — joint ventures | 9 | (184 | ) | |||||
Comprehensive income attributable to non-controlling interests — Principal Equityholders | (24,134 | ) | (18,778 | ) | ||||
Comprehensive income available to Taylor Morrison Home Corporation | $ | 11,476 | $ | 6,695 |
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Additional Paid-in Capital | Treasury Stock | Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Amount | Shares | Amount | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interest - Joint Venture | Non-controlling Interest - Principal Equityholders | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
Balance – December 31, 2016 | 30,486,858 | $ | — | 88,942,052 | $ | 1 | $ | 384,709 | 2,853,433 | $ | (43,524 | ) | $ | 228,613 | $ | (17,989 | ) | $ | 1,525 | $ | 1,606,867 | $ | 2,160,202 | ||||||||||||||||||||||
Net income/(loss) | — | — | — | — | — | — | — | 11,476 | — | (9 | ) | 24,134 | 35,601 | ||||||||||||||||||||||||||||||||
Exchange of New TMM Units and corresponding number of Class B Common Stock | 49,956 | — | (49,956 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Cancellation of forfeited New TMM Units and corresponding number of Class B Common Stock | — | — | (1,592 | ) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Exercise of stock options | 33,583 | — | — | — | 411 | — | — | — | — | — | — | 411 | |||||||||||||||||||||||||||||||||
Issuance of restricted stock units | 46,130 | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Restricted stock units withheld to cover taxes | (14,942 | ) | — | — | — | (282 | ) | — | — | — | — | — | — | (282 | ) | ||||||||||||||||||||||||||||||
Issuance of shares from secondary offerings | 21,500,000 | — | — | — | 387,720 | — | — | — | — | — | — | 387,720 | |||||||||||||||||||||||||||||||||
Repurchase of New TMM Units from principal equityholders | — | — | (21,500,000 | ) | — | — | — | — | — | — | — | (388,550 | ) | (388,550 | ) | ||||||||||||||||||||||||||||||
Share based compensation | — | — | — | — | 991 | — | — | — | — | — | 2,021 | 3,012 | |||||||||||||||||||||||||||||||||
Changes in non-controlling interests of consolidated joint ventures | — | — | — | — | — | — | — | — | — | (390 | ) | — | (390 | ) | |||||||||||||||||||||||||||||||
Balance – March 31, 2017 | 52,101,585 | $ | — | 67,390,504 | $ | 1 | $ | 773,549 | 2,853,433 | $ | (43,524 | ) | $ | 240,089 | $ | (17,989 | ) | $ | 1,126 | $ | 1,244,472 | $ | 2,197,724 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income before allocation to non-controlling interests | $ | 35,601 | $ | 26,104 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Equity in income of unconsolidated entities | (1,085 | ) | (782 | ) | ||||
Stock compensation expense | 3,012 | 2,720 | ||||||
Distributions of earnings from unconsolidated entities | 1,336 | 111 | ||||||
Depreciation and amortization | 1,071 | 1,078 | ||||||
Debt issuance costs amortization | 955 | 956 | ||||||
Contingent consideration | 223 | 1,097 | ||||||
Deferred income taxes | — | (261 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Real estate inventory and land deposits | (47,099 | ) | (108,979 | ) | ||||
Mortgages held for sale, prepaid expenses and other assets | 130,789 | 74,694 | ||||||
Customer deposits | 40,178 | 30,492 | ||||||
Accounts payable, accrued expenses and other liabilities | (33,747 | ) | (14,965 | ) | ||||
Income taxes payable | 16,677 | (28,848 | ) | |||||
Net cash provided by (used in) operating activities | 147,911 | (16,583 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (275 | ) | (705 | ) | ||||
Payments for business acquisitions | — | (52,819 | ) | |||||
Distribution from unconsolidated entities | 403 | — | ||||||
Investments of capital into unconsolidated entities | (14,561 | ) | (15,159 | ) | ||||
Net cash used in investing activities | (14,433 | ) | (68,683 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Increase in loans payable and other borrowings | — | 23,659 | ||||||
Repayments of loans payable and other borrowings | (2,622 | ) | (21,558 | ) | ||||
Borrowings on revolving credit facility | — | 230,000 | ||||||
Payments on revolving credit facility | — | (35,000 | ) | |||||
Borrowings on mortgage warehouse | 190,424 | 211,350 | ||||||
Repayment on mortgage warehouse | (319,842 | ) | (302,798 | ) | ||||
Payment of contingent consideration | — | (384 | ) | |||||
Proceeds from stock option exercises | 411 | — | ||||||
Proceeds from issuance of shares from secondary offerings | 418,106 | — | ||||||
Repurchase of shares from principal equity holders | (418,936 | ) | — | |||||
Repurchase of common stock, net | — | (4,993 | ) | |||||
Payment of taxes related to net share settlement of equity awards | (282 | ) | — | |||||
Distributions to non-controlling interests of consolidated joint ventures, net | (390 | ) | (74 | ) | ||||
Net cash (used in) provided by financing activities | (133,131 | ) | 100,202 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | $ | 347 | $ | 14,936 | ||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period | 301,812 | 127,468 | ||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period | $ | 302,159 | $ | 142,404 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Income taxes paid, net | $ | (2,195 | ) | $ | (42,184 | ) | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Change in loans payable issued to sellers in connection with land purchase contracts | $ | 20,381 | $ | 16,931 | ||||
Change in inventory not owned | $ | (1,570 | ) | $ | (6,926 | ) | ||
Original accrual of contingent consideration for business combinations | $ | — | $ | 380 |
(In thousands) | Acadia Homes | ||
Acquisition Date | January 8, 2016 | ||
Assets acquired | |||
Real estate inventory | $ | 76,152 | |
Land deposits | 984 | ||
Prepaid expenses and other assets | 816 | ||
Property and equipment | 204 | ||
Goodwill (1) | 8,500 | ||
Total assets | $ | 86,656 | |
Less liabilities assumed | |||
Accrued expenses and other liabilities | $ | 2,562 | |
Customer deposits | 463 | ||
Net assets acquired | $ | 83,631 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Numerator: | ||||||||
Net income available to TMHC – basic | $ | 11,476 | $ | 6,813 | ||||
Net income attributable to non-controlling interest – Principal Equityholders | 24,134 | 19,107 | ||||||
Loss fully attributable to public holding company | 27 | 72 | ||||||
Net income – diluted | $ | 35,637 | $ | 25,992 | ||||
Denominator: | ||||||||
Weighted average shares – basic (Class A) | 38,554 | 31,923 | ||||||
Weighted average shares – Principal Equityholders’ non-controlling interest (Class B) | 81,015 | 89,107 | ||||||
Restricted stock units | 703 | 237 | ||||||
Stock Options | 206 | — | ||||||
Weighted average shares – diluted | 120,478 | 121,267 | ||||||
Earnings per common share – basic: | ||||||||
Net income available to Taylor Morrison Home Corporation | $ | 0.30 | $ | 0.21 | ||||
Earnings per common share – diluted: | ||||||||
Net income available to Taylor Morrison Home Corporation | $ | 0.30 | $ | 0.21 |
As of | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Real estate developed and under development | $ | 2,069,795 | $ | 2,074,651 | ||||
Real estate held for development or held for sale (1) | 176,688 | 183,638 | ||||||
Operating communities (2) | 709,474 | 650,036 | ||||||
Capitalized interest | 103,059 | 102,642 | ||||||
Total owned inventory | 3,059,016 | 3,010,967 | ||||||
Real estate not owned under option agreements | 4,682 | 6,252 | ||||||
Total real estate inventory | $ | 3,063,698 | $ | 3,017,219 |
As of | ||||||||||||||
March 31, 2017 | December 31, 2016 | |||||||||||||
Owned Lots | Book Value of Land and Development | Owned Lots | Book Value of Land and Development | |||||||||||
Raw | 6,145 | $ | 341,389 | 7,142 | $ | 403,902 | ||||||||
Partially developed | 7,983 | 549,083 | 8,037 | 501,496 | ||||||||||
Finished | 11,571 | 1,341,236 | 11,318 | 1,336,709 | ||||||||||
Long-term strategic assets | 1,425 | 14,775 | 1,489 | 16,182 | ||||||||||
Total | 27,124 | $ | 2,246,483 | 27,986 | $ | 2,258,289 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Interest capitalized - beginning of period | $ | 102,642 | $ | 105,148 | ||||
Interest incurred | 20,714 | 22,244 | ||||||
Interest amortized to cost of home closings | (20,297 | ) | (16,430 | ) | ||||
Interest capitalized - end of period | $ | 103,059 | $ | 110,962 |
As of | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Assets: | ||||||||
Real estate inventory | $ | 736,324 | $ | 614,441 | ||||
Other assets | 127,566 | 171,216 | ||||||
Total assets | $ | 863,890 | $ | 785,657 | ||||
Liabilities and owners’ equity: | ||||||||
Debt | $ | 333,260 | $ | 277,934 | ||||
Other liabilities | 18,004 | 22,603 | ||||||
Total liabilities | 351,264 | 300,537 | ||||||
Owners’ equity: | ||||||||
TMHC | 171,815 | 157,909 | ||||||
Others | 340,811 | 327,211 | ||||||
Total owners’ equity | 512,626 | 485,120 | ||||||
Total liabilities and owners’ equity | $ | 863,890 | $ | 785,657 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Revenues | $ | 22,994 | $ | 12,620 | ||||
Costs and expenses | (20,104 | ) | (10,110 | ) | ||||
Income of unconsolidated entities | $ | 2,890 | $ | 2,510 | ||||
TMHC’s share in income of unconsolidated entities | $ | 1,085 | $ | 782 | ||||
Distributions from unconsolidated entities | $ | 1,739 | $ | 111 |
As of March 31, 2017 | As of December 31, 2016 | |||||||
Real estate development costs to complete | $ | 11,514 | $ | 15,156 | ||||
Compensation and employee benefits | 31,412 | 63,802 | ||||||
Self-insurance and warranty reserves | 52,416 | 50,550 | ||||||
Interest payable | 24,450 | 17,233 | ||||||
Property and sales taxes payable | 7,054 | 17,231 | ||||||
Other accruals | 40,589 | 45,230 | ||||||
Total accrued expenses and other liabilities | $ | 167,435 | $ | 209,202 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Reserve - beginning of period | $ | 50,550 | $ | 43,098 | ||||
Additions to reserves | 4,299 | 5,768 | ||||||
Costs and claims incurred | (3,335 | ) | (6,585 | ) | ||||
Change in estimates to existing reserves | 902 | 914 | ||||||
Reserve - end of period | $ | 52,416 | $ | 43,195 |
As of | ||||||||||||||||||||||||
March 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
Principal | Unamortized Debt Issuance Costs | Carrying Value | Principal | Unamortized Debt Issuance Costs | Carrying Value | |||||||||||||||||||
5.25% Senior Notes due 2021, unsecured | $ | 550,000 | $ | 4,791 | $ | 545,209 | $ | 550,000 | $ | 5,089 | $ | 544,911 | ||||||||||||
5.875% Senior Notes due 2023, unsecured | 350,000 | 3,427 | 346,573 | 350,000 | 3,569 | 346,431 | ||||||||||||||||||
5.625% Senior Notes due 2024, unsecured | 350,000 | 3,723 | 346,277 | 350,000 | 3,858 | 346,142 | ||||||||||||||||||
Senior Notes subtotal | 1,250,000 | 11,941 | 1,238,059 | 1,250,000 | 12,516 | 1,237,484 | ||||||||||||||||||
Loans payable and other borrowings | 156,330 | — | 156,330 | 150,485 | — | 150,485 | ||||||||||||||||||
Revolving Credit Facility | — | — | — | — | — | — | ||||||||||||||||||
Mortgage warehouse borrowings | 69,146 | — | 69,146 | 198,564 | — | 198,564 | ||||||||||||||||||
Total Senior Notes and bank financing | $ | 1,475,476 | $ | 11,941 | $ | 1,463,535 | $ | 1,599,049 | $ | 12,516 | $ | 1,586,533 |
As of March 31, 2017 | ||||||||||||||
Facility | Amount Drawn | Facility Amount | Interest Rate | Expiration Date | Collateral (1) | |||||||||
Flagstar | $ | 13,750 | $ | 20,000 | LIBOR + 2.5% | 30 days written notice | Mortgage Loans | |||||||
Comerica | 11,863 | 50,000 | LIBOR + 2.25% | November 16, 2017 | Mortgage Loans | |||||||||
J.P. Morgan | 43,533 | 100,000 | LIBOR + 2.375% | September 26, 2017 | Mortgage Loans and Pledged Cash | |||||||||
Total | $ | 69,146 | $ | 170,000 | ||||||||||
As of December 31, 2016 | ||||||||||||||
Facility | Amount Drawn | Facility Amount | Interest Rate | Expiration Date | Collateral (1) | |||||||||
Flagstar | $ | 37,093 | $ | 55,000 | LIBOR + 2.5% | 30 days written notice | Mortgage Loans | |||||||
Comerica | 57,875 | 85,000 | LIBOR + 2.25% | November 16, 2017 | Mortgage Loans | |||||||||
J.P. Morgan | 103,596 | 125,000 | LIBOR + 2.375% to 2.5% | September 26, 2017 | Mortgage Loans and Pledged Cash | |||||||||
Total | $ | 198,564 | $ | 265,000 |
March 31, 2017 | December 31, 2016 | |||||||||||||||||
(Dollars in thousands) | Level in Fair Value Hierarchy | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||
Description: | ||||||||||||||||||
Mortgage loans held for sale | 2 | $ | 109,079 | $ | 109,079 | $ | 233,184 | $ | 233,184 | |||||||||
Derivative assets | 2 | 1,961 | 1,961 | 2,291 | 2,291 | |||||||||||||
Mortgage warehouse borrowings | 2 | 69,146 | 69,146 | 198,564 | 198,564 | |||||||||||||
Loans payable and other borrowings | 2 | 156,330 | 156,330 | 150,485 | 150,485 | |||||||||||||
5.25% Senior Notes due 2021 (1) | 2 | 545,209 | 563,750 | 544,911 | 563,750 | |||||||||||||
5.875% Senior Notes due 2023 (1) | 2 | 346,573 | 366,625 | 346,431 | 355,250 | |||||||||||||
5.625% Senior Notes due 2024 (1) | 2 | 346,277 | 362,250 | 346,142 | 353,500 | |||||||||||||
Revolving Credit Facility | 2 | — | — | — | — | |||||||||||||
Contingent consideration liability | 3 | 4,815 | 4,815 | 17,200 | 17,200 |
(Dollars in thousands) | ||||||
Description: | Level in Fair Value Hierarchy | December 31, 2016 | ||||
Inventories (1) | 3 | $ | 3,778 |
Shares Outstanding | Percentage | |||||
Class A Common Stock | 52,101,585 | 43.6 | % | |||
Class B Common Stock | 67,390,504 | 56.4 | % | |||
Total | 119,492,089 | 100 | % |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Restricted stock units (RSUs) (1) | $ | 1,897 | $ | 1,382 | ||||
Stock options | 958 | 957 | ||||||
New TMM units | 157 | 381 | ||||||
Total stock compensation | $ | 3,012 | $ | 2,720 |
Shares | Weighted Average Grant Date Fair Value | ||||||
Balance at December 31, 2016 | 1,358,701 | $ | 13.39 | ||||
Granted | 621,293 | 17.84 | |||||
Vested | (49,036 | ) | 18.76 | ||||
Forfeited | (37,559 | ) | 13.41 | ||||
Balance at March 31, 2017 | 1,893,399 | $ | 14.72 |
Shares | Weighted Average Exercise Price Per Share | ||||||
Outstanding at December 31, 2016 | 2,431,347 | $ | 17.09 | ||||
Granted | 785,132 | 19.03 | |||||
Exercised | (33,583 | ) | 12.25 | ||||
Canceled/Forfeited | (54,912 | ) | 17.86 | ||||
Outstanding at March 31, 2017 | 3,127,984 | $ | 17.62 | ||||
Options exercisable at March 31, 2017 | 935,059 | $ | 18.94 |
Class B Shares/New TMM Units | Weighted Average Grant Date Fair Value | ||||||
Balance at December 31, 2016 | 1,146,357 | $ | 5.58 | ||||
Exchanges (1) | (49,956 | ) | 4.09 | ||||
Forfeited (2) | (1,592 | ) | 8.04 | ||||
Balance at March 31, 2017 (3) | 1,094,809 | $ | 5.65 |
Three Months Ended March 31, 2017 | ||||||||||||||||
Total Post- Retirement Benefits Adjustments | Foreign Currency Translation Adjustments | Non-controlling Interest - Principal Equityholders Reclassification | Total | |||||||||||||
Balance, beginning of period | $ | 2,061 | $ | (79,927 | ) | $ | 59,877 | $ | (17,989 | ) | ||||||
Other comprehensive loss before reclassifications | — | — | — | — | ||||||||||||
Other comprehensive loss, net of tax | $ | — | $ | — | $ | — | $ | — | ||||||||
Gross amounts reclassified within accumulated other comprehensive income | — | 16,479 | (16,479 | ) | — | |||||||||||
Balance, end of period | $ | 2,061 | $ | (63,448 | ) | $ | 43,398 | $ | (17,989 | ) |
Three Months Ended March 31, 2016 | ||||||||||||||||
Total Post- Retirement Benefits Adjustments | Foreign Currency Translation Adjustments | Non-controlling Interest - Principal Equityholders Reclassification | Total | |||||||||||||
Balance, beginning of period | $ | 2,305 | $ | (79,927 | ) | $ | 59,625 | $ | (17,997 | ) | ||||||
Other comprehensive income before reclassifications | (447 | ) | — | — | (447 | ) | ||||||||||
Other comprehensive income, net of tax | $ | (447 | ) | $ | — | $ | — | $ | (447 | ) | ||||||
Gross amounts reclassified within accumulated other comprehensive income | — | — | 329 | 329 | ||||||||||||
Balance, end of period | $ | 1,858 | $ | (79,927 | ) | $ | 59,954 | $ | (18,115 | ) |
East | Atlanta, Charlotte, Chicago, Orlando, Raleigh, Southwest Florida and Tampa |
Central | Austin, Dallas and Houston (both include a Taylor Morrison division and a Darling Homes division), and Denver |
West | Bay Area, Phoenix, Sacramento and Southern California |
Mortgage Operations | Taylor Morrison Home Funding and Inspired Title |
Three Months Ended March 31, 2017 | ||||||||||||||||||||||||
East | Central | West | Mortgage Operations | Corporate and Unallocated | Total | |||||||||||||||||||
Total revenues | $ | 263,665 | $ | 206,257 | $ | 284,919 | $ | 14,249 | $ | — | $ | 769,090 | ||||||||||||
Gross margin | 53,358 | 37,208 | 45,580 | 5,547 | — | 141,693 | ||||||||||||||||||
Selling, general and administrative expenses | (27,169 | ) | (21,492 | ) | (19,053 | ) | — | (21,031 | ) | (88,745 | ) | |||||||||||||
Equity in income of unconsolidated entities | — | (168 | ) | (83 | ) | 1,336 | — | 1,085 | ||||||||||||||||
Interest and other (expense)/income, net | (84 | ) | (344 | ) | (125 | ) | — | 994 | 441 | |||||||||||||||
Income/(loss) before income taxes | $ | 26,105 | $ | 15,204 | $ | 26,319 | $ | 6,883 | $ | (20,037 | ) | $ | 54,474 |
Three Months Ended March 31, 2016 | ||||||||||||||||||||||||
East | Central | West | Mortgage Operations | Corporate and Unallocated | Total | |||||||||||||||||||
Total revenues | $ | 181,725 | $ | 222,567 | $ | 231,398 | $ | 9,639 | $ | — | $ | 645,329 | ||||||||||||
Gross margin | 37,778 | 40,224 | 37,524 | 3,115 | — | 118,641 | ||||||||||||||||||
Selling, general and administrative expenses | (21,996 | ) | (21,613 | ) | (16,406 | ) | — | (17,250 | ) | (77,265 | ) | |||||||||||||
Equity in (loss)/income of unconsolidated entities | — | (57 | ) | 244 | 595 | — | 782 | |||||||||||||||||
Interest and other (expense)/income, net | (1,246 | ) | (1,643 | ) | 227 | — | (505 | ) | (3,167 | ) | ||||||||||||||
Income/(loss) before income taxes | $ | 14,536 | $ | 16,911 | $ | 21,589 | $ | 3,710 | $ | (17,755 | ) | $ | 38,991 |
As of March 31, 2017 | ||||||||||||||||||||||||
East | Central | West | Mortgage Operations | Corporate and Unallocated | Total | |||||||||||||||||||
Real estate inventory and land deposits | $ | 1,143,204 | $ | 862,457 | $ | 1,094,320 | $ | — | $ | — | $ | 3,099,981 | ||||||||||||
Investments in unconsolidated entities | 26,073 | 29,977 | 112,150 | 3,615 | — | 171,815 | ||||||||||||||||||
Other assets | 69,049 | 119,868 | 30,059 | 145,003 | 512,970 | 876,949 | ||||||||||||||||||
Total assets | $ | 1,238,326 | $ | 1,012,302 | $ | 1,236,529 | $ | 148,618 | $ | 512,970 | $ | 4,148,745 |
As of December 31, 2016 | ||||||||||||||||||||||||
East | Central | West | Mortgage Operations | Corporate and Unallocated | Total | |||||||||||||||||||
Real estate inventory and land deposits | $ | 1,110,340 | $ | 829,354 | $ | 1,114,758 | $ | — | $ | — | $ | 3,054,452 | ||||||||||||
Investments in unconsolidated entities | 25,923 | 30,146 | 98,625 | 3,215 | — | 157,909 | ||||||||||||||||||
Other assets | 80,320 | 139,383 | 43,304 | 269,131 | 476,427 | 1,008,565 | ||||||||||||||||||
Total assets | $ | 1,216,583 | $ | 998,883 | $ | 1,256,687 | $ | 272,346 | $ | 476,427 | $ | 4,220,926 |
As of | ||||||||||||||||
March 31, 2017 | December 31, 2016 | |||||||||||||||
(Dollars in thousands) | Fair Value | Notional Amount | Fair Value | Notional Amount | ||||||||||||
IRLCs | $ | 2,468 | $ | 75,839 | $ | 1,987 | $ | 61,655 | ||||||||
MBSs | (507 | ) | 94,116 | 304 | 97,000 | |||||||||||
Total | $ | 1,961 | $ | 2,291 |
East | Atlanta, Charlotte, Chicago, Orlando, Raleigh, Southwest Florida and Tampa | |
Central | Austin, Dallas and Houston (both include a Taylor Morrison division and a Darling Homes division), and Denver | |
West | Bay Area, Phoenix, Sacramento and Southern California | |
Mortgage Operations | Taylor Morrison Home Funding (“TMHF”) and Inspired Title Services, LLC (“Inspired Title”) |
• | Net sales orders were 2,425, a 33% increase from the prior year quarter |
• | Sales per outlet were 2.7, a 35% increase from the prior year quarter |
• | Home closings were 1,630, a 17% increase from the prior year quarter |
• | Total revenue was $769 million, a 19% increase from the prior year quarter |
• | GAAP home closings gross margin, inclusive of capitalized interest, was 18.0% |
• | Net income for the quarter was $36 million with earnings per share of $0.30, increases of 37% and 43% from the prior year quarter, respectively |
Three Months Ended March 31, 2017 | ||||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Statements of Operations Data: | ||||||||
Home closings revenue, net | $ | 751,485 | $ | 629,088 | ||||
Land closings revenue | 3,356 | 6,602 | ||||||
Mortgage operations revenue | 14,249 | 9,639 | ||||||
Total revenues | 769,090 | 645,329 | ||||||
Cost of home closings | 616,295 | 514,532 | ||||||
Cost of land closings | 2,400 | 5,632 | ||||||
Mortgage operations expenses | 8,702 | 6,524 | ||||||
Gross margin | 141,693 | 118,641 | ||||||
Sales, commissions and other marketing costs | 55,617 | 47,841 | ||||||
General and administrative expenses | 33,128 | 29,424 | ||||||
Equity in income of unconsolidated entities | (1,085 | ) | (782 | ) | ||||
Interest income, net | (90 | ) | (87 | ) | ||||
Other (income)/expense, net | (351 | ) | 3,254 | |||||
Income before income taxes | 54,474 | 38,991 | ||||||
Income tax provision | 18,873 | 12,887 | ||||||
Net income before allocation to non-controlling interests | 35,601 | 26,104 | ||||||
Net loss/(income) attributable to non-controlling interests – joint ventures | 9 | (184 | ) | |||||
Net income before non-controlling interests – Principal Equityholders | 35,610 | 25,920 | ||||||
Net income from continuing operations attributable to non-controlling interests – Principal Equityholders | (24,134 | ) | (19,107 | ) | ||||
Net income available to Taylor Morrison Home Corporation | $ | 11,476 | $ | 6,813 | ||||
Home closings gross margin | 18.0 | % | 18.2 | % | ||||
Adjusted home closings gross margin | 20.7 | % | 20.8 | % | ||||
Sales, commissions and other marketing costs as a percentage of home closings revenue | 7.4 | % | 7.6 | % | ||||
General and administrative expenses as a percentage of home closings revenue | 4.4 | % | 4.7 | % | ||||
Average sales price per home closed | $ | 461 | $ | 452 |
Three Months Ended March 31, | |||||||||
2017 | 2016 | Change | |||||||
East | 125 | 125 | — | % | |||||
Central | 116 | 121 | (4.1 | ) | |||||
West | 57 | 64 | (10.9 | ) | |||||
Total | 298 | 310 | (3.9 | )% |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
Net Sales Orders (1) | Sales Value (1) | Average Selling Price | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
East | 1,050 | 737 | 42.5 | % | $ | 412,043 | $ | 286,878 | 43.6 | % | $ | 392 | $ | 389 | 0.8 | % | |||||||||||||||
Central | 628 | 491 | 27.9 | 289,055 | 230,266 | 25.5 | 460 | 469 | (1.9 | ) | |||||||||||||||||||||
West | 747 | 600 | 24.5 | 430,527 | 320,589 | 34.3 | 576 | 534 | 7.9 | ||||||||||||||||||||||
Total | 2,425 | 1,828 | 32.7 | % | $ | 1,131,625 | $ | 837,733 | 35.1 | % | $ | 467 | $ | 458 | 2.0 | % |
Cancellation Rate(1) | ||||||
Three Months Ended March 31, | ||||||
2017 | 2016 | |||||
East | 10.3 | % | 12.1 | % | ||
Central | 11.4 | 16.6 | ||||
West | 11.5 | 13.5 | ||||
Total Company | 10.9 | % | 13.8 | % |
As of March 31, | |||||||||||||||||||||||||||||||
Sold Homes in Backlog (1) | Sales Value | Average Selling Price | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
East | 1,589 | 1,204 | 32.0 | % | $ | 676,054 | $ | 510,448 | 32.4 | % | $ | 425 | $ | 424 | 0.2 | % | |||||||||||||||
Central | 1,162 | 1,214 | (4.3 | ) | 589,305 | 613,611 | (4.0 | ) | 507 | 505 | 0.4 | ||||||||||||||||||||
West | 1,176 | 1,014 | 16.0 | 660,024 | 524,428 | 25.9 | 561 | 517 | 8.5 | ||||||||||||||||||||||
Total | 3,927 | 3,432 | 14.4 | % | $ | 1,925,383 | $ | 1,648,487 | 16.8 | % | $ | 490 | $ | 480 | 2.1 | % |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
Homes Closed | Home Closings Revenue, Net | Average Selling Price | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||||||
East | 682 | 496 | 37.5 | % | $ | 263,101 | $ | 181,725 | 44.8 | % | $ | 386 | $ | 366 | 5.5 | % | |||||||||||||||
Central | 424 | 446 | (4.9 | ) | 203,465 | 215,965 | (5.8 | ) | 480 | 484 | (0.8 | ) | |||||||||||||||||||
West | 524 | 449 | 16.7 | 284,919 | 231,398 | 23.1 | 544 | 515 | 5.6 | ||||||||||||||||||||||
Total | 1,630 | 1,391 | 17.2 | % | $ | 751,485 | $ | 629,088 | 19.5 | % | $ | 461 | $ | 452 | 2.0 | % |
Three Months Ended March 31, | ||||||||||||
(Dollars in thousands) | 2017 | 2016 | Change | |||||||||
East | $ | 564 | $ | — | $ | 564 | ||||||
Central | 2,792 | 6,602 | (3,810 | ) | ||||||||
West | — | — | — | |||||||||
Total | $ | 3,356 | $ | 6,602 | $ | (3,246 | ) |
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
East | Central | West | Consolidated | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Home closings revenue, net | $ | 263,101 | $ | 181,725 | $ | 203,465 | $ | 215,965 | $ | 284,919 | $ | 231,398 | $ | 751,485 | $ | 629,088 | ||||||||||||||||
Cost of home closings | 209,818 | 143,947 | 167,138 | 176,711 | 239,339 | 193,874 | 616,295 | 514,532 | ||||||||||||||||||||||||
Home closings gross margin | 53,283 | 37,778 | 36,327 | 39,254 | 45,580 | 37,524 | 135,190 | 114,556 | ||||||||||||||||||||||||
Capitalized interest amortization | 5,401 | 4,060 | 5,874 | 5,920 | 9,022 | 6,450 | 20,297 | 16,430 | ||||||||||||||||||||||||
Adjusted home closings gross margin | $ | 58,684 | $ | 41,838 | $ | 42,201 | $ | 45,174 | $ | 54,602 | $ | 43,974 | $ | 155,487 | $ | 130,986 | ||||||||||||||||
Home closings gross margin % | 20.3 | % | 20.8 | % | 17.9 | % | 18.2 | % | 16.0 | % | 16.2 | % | 18.0 | % | 18.2 | % | ||||||||||||||||
Adjusted home closings gross margin % | 22.3 | % | 23.0 | % | 20.7 | % | 20.9 | % | 19.2 | % | 19.0 | % | 20.7 | % | 20.8 | % |
Three Months Ended March 31, | ||||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Mortgage operations revenue | $ | 14,249 | $ | 9,639 | ||||
Mortgage operations expenses | 8,702 | 6,524 | ||||||
Mortgage operations gross margin | $ | 5,547 | $ | 3,115 | ||||
Mortgage operations margin % | 38.9 | % | 32.3 | % |
Closed Loans | Aggregate Loan Volume (in millions) | Capture Rate | ||||||||
Three Months Ended March 31, 2017 | 946 | $ | 319.1 | 74 | % | |||||
Three Months Ended March 31, 2016 | 801 | $ | 261.6 | 79 | % |
• | Borrowings under our Revolving Credit Facility (as defined below); |
• | Our various series of Senior Notes (as defined below); |
• | Mortgage warehouse facilities; |
• | Project-level financing (including non-recourse loans); |
• | Performance, payment and completion surety bonds, and letters of credit; and |
• | Cash generated from operations. |
• | Cash generated from operations; and |
• | Borrowings under our Revolving Credit Facility. |
As of | ||||||||
(Dollars in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Total Cash, including Restricted Cash | $ | 302,159 | $ | 301,812 | ||||
Total Revolving Credit Facility | 500,000 | 500,000 | ||||||
Letters of Credit Outstanding | (22,985 | ) | (31,903 | ) | ||||
Revolving Credit Facility Borrowings Outstanding | — | — | ||||||
Revolving Credit Facility Availability | 477,015 | 468,097 | ||||||
Total Liquidity | $ | 779,174 | $ | 769,909 |
(Dollars in thousands) | Date Issued | Principal Amount | Initial Offering Price | Interest Rate | Original Net Proceeds | Original Debt Issuance Cost | ||||||||||||||
Senior Notes due 2021 | April 16, 2013 | 550,000 | 100.0 | % | 5.250 | % | 541,700 | 8,300 | ||||||||||||
Senior Notes due 2023 | April 16, 2015 | 350,000 | 100.0 | % | 5.875 | % | 345,500 | 4,500 | ||||||||||||
Senior Notes due 2024 | March 5, 2014 | 350,000 | 100.0 | % | 5.625 | % | 345,300 | 4,700 | ||||||||||||
Total | $ | 1,250,000 | $ | 1,232,500 | $ | 17,500 |
(Dollars in thousands) | As of March 31, 2017 | |||||||||||||
Facility | Amount Drawn | Facility Amount | Interest Rate | Expiration Date | Collateral (1) | |||||||||
Flagstar | $ | 13,750 | $ | 20,000 | LIBOR + 2.5% | 30 days written notice | Mortgage Loans | |||||||
Comerica | 11,863 | 50,000 | LIBOR + 2.25% | November 16, 2017 | Mortgage Loans | |||||||||
J.P. Morgan | 43,533 | 100,000 | LIBOR + 2.375% | September 26, 2017 | Mortgage Loans and Pledged Cash | |||||||||
Total | $ | 69,146 | $ | 170,000 |
As of | ||||||||
(Dollars in thousands) | March 31, 2017 | December 31, 2016 | ||||||
Letters of credit (1) | $ | 22,985 | $ | 31,903 | ||||
Surety bonds | 274,976 | 270,943 | ||||||
Total outstanding letters of credit and surety bonds | $ | 297,961 | $ | 302,846 |
• | the timing of the introduction and start of construction of new projects; |
• | the timing of project sales; |
• | the timing of closings of homes, lots and parcels; |
• | the timing of receipt of regulatory approvals for development and construction; |
• | the condition of the real estate market and general economic conditions in the areas in which we operate; |
• | mix of homes closed; |
• | construction timetables; |
• | the prevailing interest rates and the availability of financing, both for us and for the purchasers of our homes; |
• | the cost and availability of materials and labor; and |
• | weather conditions in the markets in which we build. |
Expected Maturity Date | Fair Value | |||||||||||||||||||||||||||||||
(In millions, except percentage data) | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||||||
Fixed Rate Debt | $ | 65.6 | $ | 50.1 | $ | 24.9 | $ | 8.8 | $ | 553.6 | $ | 703.3 | $ | 1,406.3 | $ | 1,449.0 | ||||||||||||||||
Weighted average interest rate(1) | 3.8 | % | 3.8 | % | 3.8 | % | 3.8 | % | 5.5 | % | 5.5 | % | 5.3 | % | ||||||||||||||||||
Variable Rate Debt(2) | $ | 69.1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 69.1 | $ | 69.1 | ||||||||||||||||
Weighted average interest rate | 3.0 | % | — | — | — | % | — | — | 3.0 | % |
Exhibit No. | Description | |
3.1 | Amended and Restated Certificate of Incorporation (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on April 15, 2013, and incorporated herein by reference). | |
3.2 | Amended and Restated By-laws (included as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on April 15, 2013, and incorporated herein by reference). | |
10.1 | Purchase Agreement, dated as of January 31, 2017, by and among Taylor Morrison Home Corporation, TMM Holdings II Limited Partnership and certain sellers named in Schedule I thereto (included as Exhibit 10.1 to Taylor Morrison Home Corporation’s Current Report on Form 8-K, filed on February 6, 2017, and incorporated herein by reference). | |
10.2 | Purchase Agreement, dated March 22, 2017, by and among Taylor Morrison Home Corporation and certain sellers named in Schedule I thereto (included as Exhibit 10.1 to Taylor Morrison Home Corporation’s Current Report on Form 8-K, filed on March 27, 2017, and incorporated herein by reference). | |
31.1* | Certification of Sheryl D. Palmer, Chief Executive Officer, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002. | |
31.2* | Certification of C. David Cone, Chief Financial Officer, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002. | |
32.1* | Certification of Sheryl D. Palmer, Chief Executive Officer, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002. | |
32.2* | Certification of C. David Cone, Chief Financial Officer, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
TAYLOR MORRISON HOME CORPORATION | |||
Registrant | |||
DATE: | April 27, 2017 | ||
/s/ Sheryl D. Palmer | |||
Sheryl D. Palmer | |||
President and Chief Executive Officer (Principal Executive Officer) | |||
/s/ C. David Cone | |||
C. David Cone | |||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
/s/ Joseph Terracciano | |||
Joseph Terracciano | |||
Chief Accounting Officer (Principal Accounting Officer) |
Exhibit No. | Description | |
3.1 | Amended and Restated Certificate of Incorporation (included as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on April 15, 2013, and incorporated herein by reference). | |
3.2 | Amended and Restated By-laws (included as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on April 15, 2013, and incorporated herein by reference). | |
10.1 | Purchase Agreement, dated as of January 31, 2017, by and among Taylor Morrison Home Corporation, TMM Holdings II Limited Partnership and certain sellers named in Schedule I thereto (included as Exhibit 10.1 to Taylor Morrison Home Corporation’s Current Report on Form 8-K, filed on February 6, 2017, and incorporated herein by reference). | |
10.2 | Purchase Agreement, dated March 22, 2017, by and among Taylor Morrison Home Corporation and certain sellers named in Schedule I thereto (included as Exhibit 10.1 to Taylor Morrison Home Corporation’s Current Report on Form 8-K, filed on March 27, 2017, and incorporated herein by reference). | |
31.1* | Certification of Sheryl D. Palmer, Chief Executive Officer, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002. | |
31.2* | Certification of C. David Cone, Chief Financial Officer, pursuant to Section 302 of the Sarbanes–Oxley Act of 2002. | |
32.1* | Certification of Sheryl D. Palmer, Chief Executive Officer, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002. | |
32.2* | Certification of C. David Cone, Chief Financial Officer, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
By: | /s/ Sheryl D. Palmer | |
Sheryl D. Palmer | ||
President and Chief Executive Officer | ||
Taylor Morrison Home Corporation |
By: | /s/ C. David Cone | |
C. David Cone | ||
Executive Vice President and Chief Financial Officer Taylor Morrison Home Corporation |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
April 27, 2017 | /s/ Sheryl D. Palmer | |
Sheryl D. Palmer | ||
President and Chief Executive Officer | ||
Taylor Morrison Home Corporation |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
April 27, 2017 | /s/ C. David Cone | |
C. David Cone | ||
Executive Vice President and Chief Financial Officer | ||
Taylor Morrison Home Corporation |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 27, 2017 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TMHC | |
Entity Registrant Name | Taylor Morrison Home Corp | |
Entity Central Index Key | 0001562476 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 52,108,830 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 67,390,504 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Common stock, shares outstanding | 119,492,089 | |
Preferred stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares held | 2,853,433 | 2,853,433 |
Class A Common Stock | ||
Common stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 54,955,018 | 33,340,291 |
Common stock, shares outstanding | 52,101,585 | 30,486,858 |
Class B Common Stock | ||
Common stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 67,390,504 | 88,942,052 |
Common stock, shares outstanding | 67,390,504 | 88,942,052 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income before non-controlling interests, net of tax | $ 35,601 | $ 26,104 |
Other comprehensive loss, net of tax: | ||
Post-retirement benefits adjustments, net of tax | 0 | (447) |
Other comprehensive loss, net of tax | 0 | (447) |
Comprehensive income | 35,601 | 25,657 |
Comprehensive income available to Taylor Morrison Home Corporation | 11,476 | 6,695 |
Joint Ventures | ||
Other comprehensive loss, net of tax: | ||
Comprehensive (income) loss attributable to non-controlling interests - joint ventures/Principal Equityholders | 9 | (184) |
Principal Equityholders | ||
Other comprehensive loss, net of tax: | ||
Comprehensive (income) loss attributable to non-controlling interests - joint ventures/Principal Equityholders | $ (24,134) | $ (18,778) |
Business |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | BUSINESS Organization and Description of the Business - Taylor Morrison Home Corporation (referred to herein as “TMHC,” “we,” “our,” “the Company” and “us”), through its divisions and segments, owns and operates a residential homebuilding business and is a developer of lifestyle communities. As of March 31, 2017, we operated in Arizona, California, Colorado, Florida, Georgia, Illinois, North Carolina, and Texas. Our Company serves a wide array of consumer groups from coast to coast, including first time, move-up, luxury, and 55 plus buyers. Our homebuilding company operates under our Taylor Morrison and Darling Homes brand names. Our business is organized into multiple homebuilding operating components, and a mortgage operating component, all of which are managed as four reportable segments: East, Central, West, and Mortgage Operations. The communities in our homebuilding segments offer single family attached and detached homes. We are the general contractors for all real estate projects and retain subcontractors for home construction and site development. Our Mortgage Operations reportable segment provides financial services to customers through our wholly owned mortgage subsidiary, operating as Taylor Morrison Home Funding, LLC (“TMHF”), and title services through our wholly owned title services subsidiary, Inspired Title Service, LLC (“Inspired Title”). As of March 31, 2017 we realigned our homebuilding operating divisions within our existing segments based on geographic location and management's long term strategic plans. As a result, historical periods in the segment information have been reclassified to give effect to the segment realignment. |
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation — The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in our 2016 Annual Report on Form 10-K. In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full fiscal year. Unless otherwise stated, amounts are shown in U.S. dollars. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date, and revenues and expenses are translated at average rates of exchange prevailing during the period. Translation adjustments resulting from this process are recorded to accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. Non-controlling interests – In connection with a series of transactions consummated at the time of the Company’s IPO (the “Reorganization Transactions”), the Company became the sole owner of the general partner of TMM Holdings II Limited Partnership (“New TMM”). As the general partner of New TMM, the Company exercises exclusive and complete control over New TMM. Consequently, the Company consolidates New TMM and records a non-controlling interest in the Condensed Consolidated Balance Sheets for the economic interests in New TMM, that are directly or indirectly held by a consortium comprised of affiliates of TPG Global, LLC (the “TPG Entities” or “TPG”), investment funds managed by Oaktree Capital Management, L.P. (“Oaktree”) or their respective subsidiaries (the “Oaktree Entities”), and affiliates of JH Investments, Inc. (“JH” and together with the TPG Entities and Oaktree Entities, the “Principal Equityholders”) or by members of management and members of the Board of Directors. Refer to Note 11- Stockholders' Equity for discussion regarding our equity offering transactions during the three months ended March 31, 2017. Reclassifications - Prior period amounts for cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows have been reclassified to conform with current period financial statement presentation as a result of adopting Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. Use of Estimates — The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates include real estate development costs to complete, valuation of real estate, valuation of acquired assets, valuation of goodwill, valuation of equity awards, valuation allowance on deferred tax assets and reserves for warranty and self-insured risks. Actual results could differ from those estimates. Non-controlling Interests – Principal Equityholders — Immediately prior to our IPO, as part of the Reorganization Transactions, the existing holders of limited partnership interests of TMM Holdings Limited Partnership (“TMM Holdings”) exchanged their limited partnership interests for limited partnership interests of New TMM (“New TMM Units”). For each New TMM Unit received in the exchange, the holders of New TMM Units also received a corresponding number of shares of our Class B Common Stock (the “Class B Common Stock”). Our Class B Common Stock has voting rights but no economic rights. One share of Class B Common Stock, together with one New TMM Unit, is exchangeable into one share of our Class A Common Stock in accordance with the terms of the Exchange Agreement, dated as of April 9, 2013, among the Company, New TMM and the holders of Class B Common Stock and New TMM Units. Real Estate Inventory —We assess the recoverability of our land inventory in accordance with the provisions of ASC Topic 360, “Property, Plant, and Equipment.” We review our real estate inventory for indicators of impairment by community during each reporting period. If indicators of impairment are present for a community, we first perform an undiscounted cash flow analysis to determine if the carrying value of the assets in that community exceeds the undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, then the assets are deemed to be impaired and are recorded at fair value as of the assessment. Our determination of fair value is based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. For the three months ended March 31, 2017 and 2016, no impairment charges were recorded. Investments in Unconsolidated Entities —We evaluate our investments in unconsolidated entities for indicators of impairment. A series of operating losses of an investee or other factors may indicate that a decrease in value of our investment in the unconsolidated entity has occurred which is other-than-temporary. The amount of impairment recognized is the excess of the investment’s carrying amount over its estimated fair value. Additionally, we consider various qualitative factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include age of the venture, stage in its life cycle, intent and ability for us to recover our investment in the entity, financial condition and long-term prospects of the entity, short-term liquidity needs of the unconsolidated entity, trends in the general economic environment of the land, entitlement status of the land held by the unconsolidated entity, overall projected returns on investment, defaults under contracts with third parties (including bank debt), recoverability of the investment through future cash flows and relationships with the other partners. If the Company believes that the decline in the fair value of the investment is temporary, then no impairment is recorded. We did not record any impairment charges for the three months ended March 31, 2017 or 2016. Revenue Recognition Home closings revenue, net — Home closings revenue is recorded using the completed-contract method of accounting at the time each home is delivered, title and possession are transferred to the buyer, we have no significant continuing involvement with the home, risk of loss has transferred, the buyer has demonstrated sufficient investment in the property, and the receivable, if any, from the homeowner or escrow agent is not subject to future subordination. We typically grant our homebuyers certain sales incentives, including cash discounts, incentives on options included in the home, option upgrades, and seller-paid financing or closing costs. Incentives and discounts are accounted for as a reduction in the sales price of the home and home closings revenue is shown net of discounts. We also receive rebates from certain vendors and these rebates are accounted for as a reduction to cost of home closings. Land closings revenue — Revenue from land sales is recognized when title is transferred to the buyer, there is no significant continuing involvement, and the buyer has demonstrated sufficient investment in the property sold. If the buyer has not made an adequate investment in the property, the profit on such sales is deferred until these conditions are met. Mortgage operations revenue — Loan origination fees (including title fees, points, closing costs) are recognized at the time the related real estate transactions are completed, usually upon the close of escrow. All of the loans TMHF originates are sold to third party investors within a short period of time, on a non-recourse basis. Gains and losses from the sale of mortgages are recognized in accordance with ASC Topic 860-20, “Sales of Financial Assets.” TMHF does not have continuing involvement with the transferred assets, therefore, we derecognize the mortgage loans at time of sale, based on the difference between the selling price and carrying value of the related loans upon sale, recording a gain/loss on sale in the period of sale. Also included in mortgage operations revenue/expenses is the realized and unrealized gains and loss from hedging instruments. Recently Issued Accounting Pronouncements — In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. This change will allow an entity to avoid calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, thus reducing the cost and complexity of evaluating goodwill for impairment. This amendment will be effective for us in our fiscal year beginning January 1, 2020. We are currently evaluating the impact the adoption of ASU 2017-04 will have on our condensed consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 provides clarification on the definition of a business by providing a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. This screen is expected to reduce the number of transactions that need to be further evaluated. This amendment will be effective for us in our fiscal year beginning January 1, 2018. We are currently evaluating the impact the adoption of ASU 2017-01 will have on our condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 primarily impacts off-balance sheet operating leases and will require such leases, with the exception of short-term leases, to be recorded on the balance sheet. Lessor accounting is not significantly impacted by the new guidance, however certain updates were made to align lessee and lessor treatment. ASU 2016-02 will be effective for us in our fiscal year beginning January 1, 2019. We do not believe the adoption of ASU 2016-02 will have a material impact on our condensed consolidated financial statements and disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in ASC Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. In doing so, entities will generally need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 has been deferred and will be effective beginning January 1, 2018 and, at that time, we will adopt the new standard under the modified retrospective approach. We are currently conducting a company-wide initiative to prepare for implementation of this guidance. We do not believe the adoption of this pronouncement will have a material impact on our condensed consolidated financial statements and disclosures, except as it relates to the newly required transition disclosures and potential new revenue recognition footnote disclosures required by the new standard. |
Business Combinations |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | BUSINESS COMBINATIONS On January 8, 2016, we acquired Acadia Homes, an Atlanta based homebuilder, for total consideration of $83.6 million (including $19.7 million of seller financing holdbacks and contingent consideration). In accordance with ASC Topic 805, Business Combinations, all material assets and liabilities, including contingent consideration were measured and recognized at fair value as of the date of the acquisition to reflect the purchase price paid, which resulted in goodwill for the transaction. Unaudited pro forma results of the business combination as if Acadia Homes had been acquired on January 1, 2016 have not been provided as they are immaterial to the total Company's consolidated results of operations. We determined the estimated fair value of real estate inventory on a community-by-community basis primarily using the sales comparison and income approaches. The sales comparison approach was used for all inventory in process. The income approach derives a value using a discounted cash flow for income-producing real property. This approach was used exclusively for finished lots. The income approach using discounted cash flows was also used to value lot option contracts acquired. These estimated cash flows and ultimate valuation are significantly affected by the discount rate, estimates related to expected average selling prices and sales incentives, expected sales paces and cancellation rates, expected land development and construction timelines, and anticipated land development, construction, and overhead costs; all of which may vary significantly between communities. The Company performed a final allocation of purchase price as of the acquisition date for Acadia Homes. The following is a summary of the fair value of assets acquired, liabilities assumed, and liabilities created (in thousands):
(1) Goodwill is fully deductible for tax purposes. The goodwill was allocated to our East homebuilding segment. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE Basic earnings per common share is computed by dividing net income available to TMHC by the weighted average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share gives effect to the potential dilution that could occur if all shares of Class B Common Stock and their corresponding New TMM Units were exchanged for shares of Class A Common Stock and if all outstanding equity awards to issue shares of Class A Common Stock were exercised or settled. The following is a summary of the components of basic and diluted earnings per share (in thousands, except per share amounts):
We excluded a total weighted average of anti-dilutive 1,847,982 and 2,136,552 stock options and unvested restricted stock units (“RSUs”) from the calculation of earnings per share for the three months ended March 31, 2017 and 2016, respectively. The shares of Class B Common Stock have voting rights but do not have economic rights or rights to dividends or distributions on liquidation and therefore are not participating securities. Accordingly, Class B Common Stock is not included in basic earnings per share. |
Real Estate Inventory and Land Deposits |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Inventory and Land Deposits | REAL ESTATE INVENTORY AND LAND DEPOSITS Inventory consists of the following (in thousands):
(1) Real estate held for development or held for sale includes properties which are not in active production. This includes raw land recently purchased or awaiting entitlement, future phases of current projects that will be developed as prior phases sell out and long-term strategic assets. (2) Operating communities consists of all vertical construction costs relating to homes in progress and completed homes for all active production of inventory. The development status of our land inventory is as follows (dollars in thousands):
Land Deposits — We provide deposits related to land options and land purchase contracts, which are capitalized when paid and classified as land deposits until the associated property is purchased. As of March 31, 2017 and December 31, 2016, we had the right to purchase 7,294 and 7,583 lots under land option purchase contracts, respectively, for an aggregate purchase price of $506.5 million and $542.6 million as of March 31, 2017 and December 31, 2016, respectively. We do not have title to the properties and the creditors generally have no recourse against the Company. As of March 31, 2017 and December 31, 2016, our exposure to loss related to our option contracts with third parties and unconsolidated entities consist of non-refundable option deposits totaling $36.3 million and $37.2 million, respectively, in land deposits related to land options and land purchase contracts. Capitalized Interest — Interest capitalized, incurred and amortized is as follows (in thousands):
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Investments in Unconsolidated Entities |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Entities | INVESTMENTS IN UNCONSOLIDATED ENTITIES We participate in a number of joint ventures with related and unrelated third parties, with ownership interests up to 50.0%. These entities are generally involved in real estate development, homebuilding and mortgage lending activities. Summarized, unaudited combined financial information of unconsolidated entities that are accounted for by the equity method is as follows (in thousands):
We have investments in a number of joint ventures with related and unrelated parties to develop land and to develop housing communities, including for-sale residential homes. Some of these joint ventures develop land for the sole use of the joint venture participants, including us, and others develop land for sale to the joint venture participants and to unrelated builders. Our share of the joint venture profit relating to lots we purchase from the joint ventures is deferred until homes are delivered by us and title passes to a homebuyer. |
Accrued Expenses and Other Liabilities |
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Accrued Expenses and Other Liabilities | ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following (in thousands):
Self-Insurance and Warranty Reserves – We accrue for the expected costs associated with the limited one year warranty, deductibles and self-insured amounts under our various insurance policies within Beneva Indemnity Company ("Beneva") a wholly owned subsidiary. A summary of the changes in our reserves are as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Total debt consists of the following (in thousands):
2021 Senior Notes On April 16, 2013, we issued $550.0 million aggregate principal amount of 5.25% Senior Notes due 2021 (the “2021 Senior Notes”). The 2021 Senior Notes mature on April 15, 2021. The 2021 Senior Notes are guaranteed by TMM Holdings, Taylor Morrison Holdings, Inc., Taylor Morrison Communities II, Inc. and their homebuilding subsidiaries (collectively, the “Guarantors”), which are all subsidiaries directly or indirectly of TMHC. The 2021 Senior Notes and the related guarantees are senior unsecured obligations and are not subject to registration rights. The indenture for the 2021 Senior Notes contains covenants that limit (i) the making of investments, (ii) the payment of dividends and the redemption of equity and junior debt, (iii) the incurrence of additional indebtedness, (iv) asset dispositions, (v) mergers and similar corporate transactions, (vi) the incurrence of liens, (vii) prohibitions on payments and asset transfers among the issuers and restricted subsidiaries and (viii) transactions with affiliates, among others. The indenture governing the 2021 Senior Notes contains customary events of default. If we do not apply the net cash proceeds of certain asset sales within specified deadlines, we will be required to offer to repurchase the 2021 Senior Notes at par (plus accrued and unpaid interest) with such proceeds. We are also required to offer to repurchase the 2021 Senior Notes at a price equal to 101% of their aggregate principal amount (plus accrued and unpaid interest) upon certain change of control events. The 2021 Senior Notes are redeemable at scheduled redemption prices, currently at 102.625%, of their principal amount (plus accrued and unpaid interest). There are no financial maintenance covenants for the 2021 Senior Notes. 2023 Senior Notes and Redemption of 2020 Senior Notes On April 16, 2015, we issued $350.0 million aggregate principal amount of 5.875% Senior Notes due 2023 (the “2023 Senior Notes”). The 2023 Senior Notes and the related guarantees are senior unsecured obligations and are not subject to registration rights. The net proceeds of the offering, together with cash on hand, were used to redeem the entire remaining principal amount of 7.75% Senior Notes due 2020 (the “2020 Senior Notes”) on May 1, 2015, at a redemption price of 105.813% of their aggregate principal amount, plus accrued and unpaid interest thereon to, but not including, the date of redemption. As a result of the redemption of the 2020 Senior Notes, we recorded a loss on extinguishment of debt of $33.3 million during the second quarter of 2015, which included the payment of the redemption premium and write-off of net unamortized deferred financing fees. The 2023 Senior Notes mature on April 15, 2023. The 2023 Senior Notes are guaranteed by the same Guarantors that guarantee the 2021 Senior Notes. The indenture governing the 2023 Senior Notes contains covenants that limit our ability to incur debt secured by liens and enter into certain sale and leaseback transactions. The indenture governing the 2023 Senior Notes contains events of default that are similar to those contained in the indenture governing the 2021 Senior Notes. The change of control provisions in the indenture governing the 2023 Senior Notes are similar to those contained in the indenture governing the 2021 Senior Notes, but a credit rating downgrade must occur in connection with the change of control before the repurchase offer requirement is triggered for the 2023 Senior Notes. Prior to January 15, 2023, the 2023 Senior Notes are redeemable at a price equal to 100% plus a “make-whole” premium for payments through January 15, 2023 (plus accrued and unpaid interest). Beginning January 15, 2023, the 2023 Senior Notes are redeemable at par (plus accrued and unpaid interest). There are no financial maintenance covenants for the 2023 Senior Notes. 2024 Senior Notes On March 5, 2014, we issued $350.0 million aggregate principal amount of 5.625% Senior Notes due 2024 (the “2024 Senior Notes”). The net proceeds from the issuance of the 2024 Senior Notes were used to repay the outstanding balance under the Revolving Credit Facility and for general corporate purposes. The 2024 Senior Notes mature on March 1, 2024. The 2024 Senior Notes are guaranteed by the same Guarantors that guarantee the 2021 and 2023 Senior Notes. The 2024 Senior Notes and the related guarantees are senior unsecured obligations and are not subject to registration rights. The indenture governing the 2024 Senior Notes contains covenants that limit our ability to incur debt secured by liens and enter into certain sale and leaseback transactions similar to the 2023 Senior Notes. The indenture governing the 2024 Senior Notes contains events of default that are similar to those contained in the indenture governing the 2021 and 2023 Senior Notes. The change of control provisions in the indenture governing the 2024 Senior Notes are similar to those contained in the indenture governing the 2023 Senior Notes. Prior to December 1, 2023, the 2024 Senior Notes are redeemable at a price equal to 100% plus a “make-whole” premium for payments through December 1, 2023 (plus accrued and unpaid interest). Beginning on December 1, 2023, the 2024 Senior Notes are redeemable at par (plus accrued and unpaid interest). There are no financial maintenance covenants for the 2024 Senior Notes. Revolving Credit Facility Our $500.0 million Revolving Credit Facility matures on April 12, 2019. The Revolving Credit Facility is guaranteed by the same Guarantors that guarantee the 2021, 2023 and 2024 Senior Notes. The Revolving Credit Facility contains certain “springing” financial covenants, requiring us and our subsidiaries to comply with a maximum debt to capitalization ratio of not more than 0.60 to 1.00 and a minimum consolidated tangible net worth level of at least $1.6 billion. The financial covenants would be in effect for any fiscal quarter during which any (a) loans under the Revolving Credit Facility are outstanding during the last day of such fiscal quarter or on more than five separate days during such fiscal quarter or (b) undrawn letters of credit (except to the extent cash collateralized) issued under the Revolving Credit Facility in an aggregate amount greater than $40.0 million or unreimbursed letters of credit issued under the Revolving Credit Facility are outstanding on the last day of such fiscal quarter or for more than five consecutive days during such fiscal quarter. For purposes of determining compliance with the financial covenants for any fiscal quarter, the Revolving Credit Facility provides that we may exercise an equity cure by issuing certain permitted securities for cash or otherwise recording cash contributions to our capital that will, upon the contribution of such cash to the borrower, be included in the calculation of consolidated tangible net worth and consolidated total capitalization. The equity cure right is exercisable up to twice in any period of four consecutive fiscal quarters and up to five times overall. The Revolving Credit Facility contains certain restrictive covenants including limitations on incurrence of liens, dividends and other distributions, asset dispositions and investments in entities that are not guarantors, limitations on prepayment of subordinated indebtedness and limitations on fundamental changes. The Revolving Credit Facility contains customary events of default, subject to applicable grace periods, including for nonpayment of principal, interest or other amounts, violation of covenants (including financial covenants, subject to the exercise of an equity cure), incorrectness of representations and warranties in any material respect, cross default and cross acceleration, bankruptcy, material monetary judgments, ERISA events with material adverse effect, actual or asserted invalidity of material guarantees and change of control. As of March 31, 2017, we were in compliance with all of the covenants under the Revolving Credit Facility. Mortgage Warehouse Borrowings The following is a summary of our mortgage warehouse borrowings (in thousands):
(1) The mortgage warehouse borrowings outstanding as of March 31, 2017 and December 31, 2016, are collateralized by a) $109.1 million and $233.2 million, respectively, of mortgage loans held for sale, which comprise the balance of mortgage loans held for sale and b) approximately $1.3 million and $1.6 million, respectively, which are included in restricted cash in the accompanying Condensed Consolidated Balance Sheets. Loans Payable and Other Borrowings Loans payable and other borrowings as of March 31, 2017 and December 31, 2016 consist of project-level debt due to various land sellers and seller financing notes from current and prior year acquisitions. Project-level debt is generally secured by the land that was acquired and the principal payments generally coincide with corresponding project lot sales or a principal reduction schedule. Loans payable bear interest at rates that ranged from 0% to 8% at March 31, 2017 and December 31, 2016. We impute interest for loans with no stated interest rates. |
Fair Value Disclosures |
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Fair Value Disclosures | FAIR VALUE DISCLOSURES We have adopted ASC Topic 820, Fair Value Measurements, for valuation of financial instruments. ASC Topic 820 provides a framework for measuring fair value under GAAP, expands disclosures about fair value measurements, and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the fair value hierarchy are summarized as follows: Level 1 — Fair value is based on quoted prices for identical assets or liabilities in active markets. Level 2 — Fair value is determined using quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable. Level 3 — Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique. The fair value of our mortgage loans held for sale is derived from negotiated rates with partner lending institutions. The fair value of derivative assets includes interest rate lock commitments (“IRLCs”) and mortgage backed security (“MBS”). The fair value of IRLCs is based on the value of the underlying mortgage loan, quoted MBS prices and the probability that the mortgage loan will fund within the terms of the IRLCs. We estimate the fair value of the forward sales commitments based on quoted MBS prices. The fair value of our mortgage warehouse borrowings, loans payable and other borrowings and the borrowings under our Revolving Credit Facility approximate carrying value due to their short term nature and variable interest rate terms. The fair value of our Senior Notes is derived from quoted market prices by independent dealers in markets that are not active. The fair value of the contingent consideration liability related to previous acquisitions was estimated using a Monte Carlo simulation model under the option pricing method. As the measurement of the contingent consideration is based primarily on significant inputs not observable in the market, it represents a Level 3 measurement. The carrying value and fair value of our financial instruments are as follows:
(1) Carrying value for Senior Notes, as presented, includes unamortized debt issuance costs. Debt issuance costs are not factored into the fair value calculation for the Senior Notes. Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable. The following table presents the fair value for our inventories measured at fair value on a nonrecurring basis as of the period presented.
(1) During the year ended December 31, 2016, we recorded $3.5 million of impairment charges. As of March 31, 2017, the fair value for such inventories was not determined as there were no events and circumstances that indicated their carrying value is not recoverable. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We recorded income tax expense of $18.9 million and $12.9 million for the three months ended March 31, 2017 and March 31, 2016, respectively. Our effective tax rate for the three months ended March 31, 2017 was 34.6%, compared to 33.1% for the same period in 2016. The effective tax rate for the three month period ended March 31, 2016 was favorably impacted by federal energy tax credits earned from building energy efficient homes. The credits were the result of legislation enacted in December of 2015, which extended the availability of the credit through December 31, 2016. To date, there has been no extension of the federal energy credits into 2017. At both March 31, 2017 and December 31, 2016, cumulative gross unrecognized tax benefits were $7.8 million, and all unrecognized tax benefits, if recognized, would affect our effective tax rate. At March 31, 2017, we have accrued for $0.5 million of potential interest and penalties related to unrecognized tax benefits. At December 31, 2016, we had $0.4 million accrued for interest and penalties. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | STOCKHOLDERS’ EQUITY Capital Stock — Holders of Class A Common Stock and Class B Common Stock are entitled to one vote for each share held on all matters submitted to stockholders for their vote or approval. The holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to stockholders for their vote or approval, except with respect to the amendment of certain provisions of the amended and restated Certificate of Incorporation that would alter or change the powers, preferences or special rights of the Class B Common Stock so as to affect them adversely. Such amendments must be approved by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law. The voting power of the outstanding Class B Common Stock (expressed as a percentage of the total voting power of all Common Stock) is equal to the percentage of partnership interests in New TMM not held directly or indirectly by TMHC. On February 6, 2017, we completed the sale of 11,500,000 shares of our Class A Common Stock in a registered public offering at a net purchase price per share of $18.2875. On March 27, 2017, we completed the sale of an additional 10,000,000 shares of our Class A Common Stock in a registered public offering at a net purchase price per share of $20.78. We used all of the net proceeds from both public offerings to purchase partnership units in New TMM, our direct subsidiary, along with shares of our Class B Common Stock, held by our Principal Equityholders. As a result of net proceeds being distributed to our Principal Equityholders, we adjusted Non-controlling interests - Principal Equityholders and Additional paid-in capital on the Condensed Consolidated Balance Sheets to reflect the change in ownership. The aggregate number of partnership units and corresponding shares of Class B Common Stock we purchased was equal to the number of shares of Class A Common Stock sold in the public offerings. The components and respective voting power of outstanding TMHC Common Stock including the effects of the secondary offerings at March 31, 2017 are as follows:
Stock Repurchase Program Our Board of Directors has authorized the repurchase of up to $100.0 million of the Company’s Class A Common Stock through December 31, 2017 in open market purchases, privately negotiated transactions or other transactions. The stock repurchase program is subject to prevailing market conditions and other considerations, including our liquidity, the terms of our debt instruments, statutory requirements, planned land investment and development spending, acquisition and other investment opportunities and ongoing capital requirements. During the three months ended March 31, 2017 there were no shares repurchased. During the three months ended March 31, 2016, there were 337,760 shares repurchased for $5.0 million. As of March 31, 2017 there was $56.4 million available to be used for repurchases. |
Stock Based Compensation |
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Stock Based Compensation | STOCK BASED COMPENSATION Equity-Based Compensation In April 2013, we adopted the Taylor Morrison Home Corporation 2013 Omnibus Equity Award Plan, which was amended and restated in May 2016 (the “Plan”). The Plan provides for the grant of stock options, RSUs and other equity awards based on our common stock. As of March 31, 2017 we had an aggregate of 2,822,754 shares of Class A Common Stock available for future grants under the Plan. The following table provides information regarding the amount and components of stock-based compensation expense included in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations (in thousands):
(1) Includes compensation expense related to time-based RSUs and performance-based RSUs. At March 31, 2017 and December 31, 2016, the aggregate unrecognized value of all outstanding stock-based compensation awards was approximately $30.1 million and $18.8 million, respectively. Restricted Stock Units – The following table summarizes the time-based RSU and performance-based RSU activity for the three months ended March 31, 2017:
During the three months ended March 31, 2017, we issued time-based RSU awards and performance-based RSU awards to certain employees and members of the Board of Directors of the Company. Our time-based RSUs consist of awards that settle in shares of Class A Common Stock and have been awarded to our employees and members of our Board of Directors. Vesting of RSUs is subject to continued employment with TMHC or an affiliate, or continued service on the Board of Directors, through the applicable vesting dates. Time-based RSUs granted to employees generally become vested with respect to 33% of the RSUs on the second, third, and fourth anniversaries of the grant date. Time-based RSUs granted to members of the Board of Directors generally become vested on the first anniversary of the grant date. Additionally, we issued performance-based RSUs to certain employees of the Company. These awards will vest in full based on the achievement of certain performance goals over a three-year performance period, subject to the employee’s continued employment through the last date of the performance period and will be settled in shares of our Class A common stock. The number of shares that may be issued in settlement of the performance-based RSUs to the award recipients may be greater or lesser than the target award amount depending on actual performance achieved as compared to the performance targets set forth in the awards. Stock Options – The following table summarizes the stock option activity for the three months ended March 31, 2017:
Options granted to employees vest and become exercisable ratably on the second, third, fourth and fifth anniversary of the date of grant. Options granted to members of the Board of Directors vest and become exercisable ratably on the first, second and third anniversary of the date of grant. Vesting of the options is subject to continued employment with TMHC or an affiliate, or continued service on the Board of Directors, through the applicable vesting dates and expires within ten years from the date of grant. New TMM Units – Certain members of management and certain members of the Board of Directors were issued Class M partnership units in TMM Holdings. Those units were subject to both time and performance vesting conditions. Pursuant to the Reorganization Transactions, the time-vesting Class M Units in TMM Holdings were exchanged for New TMM Units with vesting terms substantially the same as the Class M Units surrendered for exchange. One New TMM Unit together with a corresponding share of Class B Common Stock is exchangeable for one share of Class A Common Stock. The shares of Class B Common Stock/New TMM Units held by members of management and members of our Board of Directors outstanding as of March 31, 2017 were as follows:
(1) Exchanges during the period represent the exchange of a vested New TMM Unit along with the corresponding share of Class B Common Stock for a newly issued share of Class A Common Stock. (2) Awards forfeited during the period represent the unvested portion of New TMM Unit awards for employees who have terminated employment with the Company and for which the New TMM Unit and the corresponding Class B Share have been canceled. (3) The number of vested and unexchanged New TMM Units as of March 31, 2017 was 1,021,369 . |
Related-Party Transactions |
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Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | RELATED-PARTY TRANSACTIONS From time to time, we may engage in transactions with entities or persons that are affiliated with us or one or more of the Principal Equityholders. Such transactions with related parties are in the normal course of operations and are executed at arm’s length, as they are entered into at terms comparable to those entered into with unrelated third parties. For the three months ended March 31, 2017 we engaged in equity offering transactions with our principal equityholders. Refer to Note 11 - Stockholders' Equity for discussion regarding such transactions. For the three months ended March 31, 2016 there were no related-party transactions. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME The table below provides the components of accumulated other comprehensive income (loss) (“AOCI”) for the periods presented (in thousands).
Reclassifications for the amortization of the employee retirement plans are included in selling, general and administrative expense in the accompanying Condensed Consolidated Statements of Operations. |
Reporting Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Segments | REPORTING SEGMENTS We have multiple homebuilding operating components which are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes, and providing warranty and customer service. We aggregate our homebuilding operating components into reporting segments, East, Central, and West, based on similar long-term economic characteristics. We also have a mortgage and title services reporting segment. We have no inter-segment sales as all sales are to external customers. As of March 31, 2017 we realigned our homebuilding operating divisions within our existing segments based on geographic location and management's long term strategic plans. As a result, historical periods in the segment information have been reclassified to give effect to the segment realignment. Our reporting segments are as follows:
Segment information is as follows (in thousands):
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Letters of Credit and Surety Bonds — We are committed, under various letters of credit and surety bonds, to perform certain development and construction activities and provide certain guarantees in the normal course of business. Outstanding letters of credit and surety bonds under these arrangements totaled $298.0 million and $302.8 million as of March 31, 2017 and December 31, 2016, respectively. Although significant development and construction activities have been completed related to these site improvements, the bonds are generally not released until all development and construction activities are completed. We do not believe that it is probable that any outstanding bonds as of March 31, 2017 will be drawn upon. Legal Proceedings — We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment practices, and protection of the environment. As a result, we are subject to periodic examination or inquiry by various governmental agencies that administer these laws and regulations. We establish liabilities for legal claims and regulatory matters when such matters are both probable of occurring and any potential loss is reasonably estimable. At March 31, 2017 and December 31, 2016, our legal accruals were $4.7 million and $4.4 million, respectively. We accrue for such matters based on the facts and circumstances specific to each matter and revise these estimates as the matters evolve. In such cases, there may exist an exposure to loss in excess of any amounts currently accrued. In view of the inherent difficulty of predicting the outcome of these legal and regulatory matters, we generally cannot predict the ultimate resolution of the pending matters, the related timing or the eventual loss. While the outcome of such contingencies cannot be predicted with certainty, we do not believe that the resolution of such matters will have a material adverse impact on our results of operations, financial position, or cash flows. However, to the extent the liability arising from the ultimate resolution of any matter exceeds the estimates reflected in the recorded reserves relating to such matter, we could incur additional charges that could be significant. Commitments to Extend Credit — We enter into IRLCs with customers who have applied for mortgage loans and meet certain credit and underwriting criteria. These commitments expose us to market risk if interest rates change and the underlying loan is not economically hedged or committed to an investor. We also are exposed to credit loss if the loan is originated and not sold to an investor and the borrower does not perform. The collateral upon extension of credit typically consists of first deed of trust in the mortgagor's property. Commitments to originated loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans approximated $175.9 million as of March 31, 2017. |
Mortgage Hedging Activities |
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Mortgage Hedging Activities | MORTGAGE HEDGING ACTIVITIES We enter into IRLCs to originate residential mortgage loans held for sale, at specified interest rates and within a specified period of time (generally between 30 and 60 days), with customers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs meet the definition of a derivative and are reflected on the balance sheet at fair value with changes in fair value recognized in mortgage operations revenue/expenses on the statement of operations and other comprehensive income. Unrealized gains and losses on the IRLCs, reflected as derivative assets, are measured based on the fair value of the underlying mortgage loan, quoted Agency MBS prices, estimates of the fair value of the mortgage servicing rights (“MSRs”) and the probability that the mortgage loan will fund within the terms of the IRLC, net of commission expense and broker fees. The fair value of the forward loan sales commitment and mandatory delivery commitments being used to hedge the IRLCs and mortgage loans held for sale not committed to be purchased by investors are based on quoted Agency MBS prices. The following summarizes derivative instruments as of the periods presented:
We have exposure to credit loss in the event of contractual non-performance by our trading counterparties in derivative instruments that we use in our rate risk management activities. We manage this credit risk by selecting only counterparties that we believe to be financially strong, spreading the risk among multiple counterparties, by placing contractual limits on the amount of unsecured credit extended to any single counterparty, and by entering into netting agreements with counterparties, as appropriate. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation — The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in our 2016 Annual Report on Form 10-K. In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full fiscal year. Unless otherwise stated, amounts are shown in U.S. dollars. Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date, and revenues and expenses are translated at average rates of exchange prevailing during the period. Translation adjustments resulting from this process are recorded to accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. |
Non-controlling interests | Non-controlling interests – In connection with a series of transactions consummated at the time of the Company’s IPO (the “Reorganization Transactions”), the Company became the sole owner of the general partner of TMM Holdings II Limited Partnership (“New TMM”). As the general partner of New TMM, the Company exercises exclusive and complete control over New TMM. Consequently, the Company consolidates New TMM and records a non-controlling interest in the Condensed Consolidated Balance Sheets for the economic interests in New TMM, that are directly or indirectly held by a consortium comprised of affiliates of TPG Global, LLC (the “TPG Entities” or “TPG”), investment funds managed by Oaktree Capital Management, L.P. (“Oaktree”) or their respective subsidiaries (the “Oaktree Entities”), and affiliates of JH Investments, Inc. (“JH” and together with the TPG Entities and Oaktree Entities, the “Principal Equityholders”) or by members of management and members of the Board of Directors. |
Reclassifications | Reclassifications - Prior period amounts for cash, cash equivalents, and restricted cash on the Condensed Consolidated Statements of Cash Flows have been reclassified to conform with current period financial statement presentation as a result of adopting Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. |
Use of Estimates | Use of Estimates — The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates include real estate development costs to complete, valuation of real estate, valuation of acquired assets, valuation of goodwill, valuation of equity awards, valuation allowance on deferred tax assets and reserves for warranty and self-insured risks. Actual results could differ from those estimates. |
Non-controlling Interests - Principal Equityholders | Non-controlling Interests – Principal Equityholders — Immediately prior to our IPO, as part of the Reorganization Transactions, the existing holders of limited partnership interests of TMM Holdings Limited Partnership (“TMM Holdings”) exchanged their limited partnership interests for limited partnership interests of New TMM (“New TMM Units”). For each New TMM Unit received in the exchange, the holders of New TMM Units also received a corresponding number of shares of our Class B Common Stock (the “Class B Common Stock”). Our Class B Common Stock has voting rights but no economic rights. One share of Class B Common Stock, together with one New TMM Unit, is exchangeable into one share of our Class A Common Stock in accordance with the terms of the Exchange Agreement, dated as of April 9, 2013, among the Company, New TMM and the holders of Class B Common Stock and New TMM Units. |
Real Estate Inventory | Real Estate Inventory —We assess the recoverability of our land inventory in accordance with the provisions of ASC Topic 360, “Property, Plant, and Equipment.” We review our real estate inventory for indicators of impairment by community during each reporting period. If indicators of impairment are present for a community, we first perform an undiscounted cash flow analysis to determine if the carrying value of the assets in that community exceeds the undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, then the assets are deemed to be impaired and are recorded at fair value as of the assessment. Our determination of fair value is based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions. |
Investments in Consolidated and Unconsolidated Entities | Investments in Unconsolidated Entities —We evaluate our investments in unconsolidated entities for indicators of impairment. A series of operating losses of an investee or other factors may indicate that a decrease in value of our investment in the unconsolidated entity has occurred which is other-than-temporary. The amount of impairment recognized is the excess of the investment’s carrying amount over its estimated fair value. Additionally, we consider various qualitative factors to determine if a decrease in the value of the investment is other-than-temporary. These factors include age of the venture, stage in its life cycle, intent and ability for us to recover our investment in the entity, financial condition and long-term prospects of the entity, short-term liquidity needs of the unconsolidated entity, trends in the general economic environment of the land, entitlement status of the land held by the unconsolidated entity, overall projected returns on investment, defaults under contracts with third parties (including bank debt), recoverability of the investment through future cash flows and relationships with the other partners. If the Company believes that the decline in the fair value of the investment is temporary, then no impairment is recorded. |
Revenue Recognition | Revenue Recognition Home closings revenue, net — Home closings revenue is recorded using the completed-contract method of accounting at the time each home is delivered, title and possession are transferred to the buyer, we have no significant continuing involvement with the home, risk of loss has transferred, the buyer has demonstrated sufficient investment in the property, and the receivable, if any, from the homeowner or escrow agent is not subject to future subordination. We typically grant our homebuyers certain sales incentives, including cash discounts, incentives on options included in the home, option upgrades, and seller-paid financing or closing costs. Incentives and discounts are accounted for as a reduction in the sales price of the home and home closings revenue is shown net of discounts. We also receive rebates from certain vendors and these rebates are accounted for as a reduction to cost of home closings. Land closings revenue — Revenue from land sales is recognized when title is transferred to the buyer, there is no significant continuing involvement, and the buyer has demonstrated sufficient investment in the property sold. If the buyer has not made an adequate investment in the property, the profit on such sales is deferred until these conditions are met. Mortgage operations revenue — Loan origination fees (including title fees, points, closing costs) are recognized at the time the related real estate transactions are completed, usually upon the close of escrow. All of the loans TMHF originates are sold to third party investors within a short period of time, on a non-recourse basis. Gains and losses from the sale of mortgages are recognized in accordance with ASC Topic 860-20, “Sales of Financial Assets.” TMHF does not have continuing involvement with the transferred assets, therefore, we derecognize the mortgage loans at time of sale, based on the difference between the selling price and carrying value of the related loans upon sale, recording a gain/loss on sale in the period of sale. Also included in mortgage operations revenue/expenses is the realized and unrealized gains and loss from hedging instruments. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements — In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. This change will allow an entity to avoid calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, thus reducing the cost and complexity of evaluating goodwill for impairment. This amendment will be effective for us in our fiscal year beginning January 1, 2020. We are currently evaluating the impact the adoption of ASU 2017-04 will have on our condensed consolidated financial statements and disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 provides clarification on the definition of a business by providing a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. This screen is expected to reduce the number of transactions that need to be further evaluated. This amendment will be effective for us in our fiscal year beginning January 1, 2018. We are currently evaluating the impact the adoption of ASU 2017-01 will have on our condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 primarily impacts off-balance sheet operating leases and will require such leases, with the exception of short-term leases, to be recorded on the balance sheet. Lessor accounting is not significantly impacted by the new guidance, however certain updates were made to align lessee and lessor treatment. ASU 2016-02 will be effective for us in our fiscal year beginning January 1, 2019. We do not believe the adoption of ASU 2016-02 will have a material impact on our condensed consolidated financial statements and disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU also supersedes some cost guidance included in ASC Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. In doing so, entities will generally need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 has been deferred and will be effective beginning January 1, 2018 and, at that time, we will adopt the new standard under the modified retrospective approach. We are currently conducting a company-wide initiative to prepare for implementation of this guidance. We do not believe the adoption of this pronouncement will have a material impact on our condensed consolidated financial statements and disclosures, except as it relates to the newly required transition disclosures and potential new revenue recognition footnote disclosures required by the new standard. |
Business Combinations (Tables) |
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Summary of Fair Value of Assets Acquired and Liabilities Created | The following is a summary of the fair value of assets acquired, liabilities assumed, and liabilities created (in thousands):
(1) Goodwill is fully deductible for tax purposes. The goodwill was allocated to our East homebuilding segment. |
Earnings Per Share (Tables) |
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Summary of Earnings Per Common Share | The following is a summary of the components of basic and diluted earnings per share (in thousands, except per share amounts):
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Real Estate Inventory and Land Deposits (Tables) |
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Schedule of Inventory | Inventory consists of the following (in thousands):
(1) Real estate held for development or held for sale includes properties which are not in active production. This includes raw land recently purchased or awaiting entitlement, future phases of current projects that will be developed as prior phases sell out and long-term strategic assets. (2) Operating communities consists of all vertical construction costs relating to homes in progress and completed homes for all active production of inventory. |
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Schedule of Development Status of Land Inventory | The development status of our land inventory is as follows (dollars in thousands):
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Schedule of Interest Capitalized, Incurred, Expensed and Amortized | Capitalized Interest — Interest capitalized, incurred and amortized is as follows (in thousands):
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Investments in Unconsolidated Entities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information of Unconsolidated Entities Accounted by Equity Method | Summarized, unaudited combined financial information of unconsolidated entities that are accounted for by the equity method is as follows (in thousands):
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Accrued Expenses and Other Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands):
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Summary of Changes in Reserves | Self-Insurance and Warranty Reserves – We accrue for the expected costs associated with the limited one year warranty, deductibles and self-insured amounts under our various insurance policies within Beneva Indemnity Company ("Beneva") a wholly owned subsidiary. A summary of the changes in our reserves are as follows (in thousands):
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Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes and Other Borrowings | Total debt consists of the following (in thousands):
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Summary of Mortgage Subsidiary Borrowings | The following is a summary of our mortgage warehouse borrowings (in thousands):
(1) The mortgage warehouse borrowings outstanding as of March 31, 2017 and December 31, 2016, are collateralized by a) $109.1 million and $233.2 million, respectively, of mortgage loans held for sale, which comprise the balance of mortgage loans held for sale and b) approximately $1.3 million and $1.6 million, respectively, which are included in restricted cash in the accompanying Condensed Consolidated Balance Sheets. |
Fair Value Disclosures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Value and Fair Value of Financial Instruments | The carrying value and fair value of our financial instruments are as follows:
(1) Carrying value for Senior Notes, as presented, includes unamortized debt issuance costs. Debt issuance costs are not factored into the fair value calculation for the Senior Notes. |
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Fair Value Measurements, Nonrecurring [Table Text Block] | The following table presents the fair value for our inventories measured at fair value on a nonrecurring basis as of the period presented.
(1) During the year ended December 31, 2016, we recorded $3.5 million of impairment charges. |
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Components and Voting Power of Outstanding Common Stock | The components and respective voting power of outstanding TMHC Common Stock including the effects of the secondary offerings at March 31, 2017 are as follows:
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Stock Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock-Based Compensation Expense | The following table provides information regarding the amount and components of stock-based compensation expense included in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations (in thousands):
(1) Includes compensation expense related to time-based RSUs and performance-based RSUs. |
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Summary of Activity of Stock Units | The shares of Class B Common Stock/New TMM Units held by members of management and members of our Board of Directors outstanding as of March 31, 2017 were as follows:
(1) Exchanges during the period represent the exchange of a vested New TMM Unit along with the corresponding share of Class B Common Stock for a newly issued share of Class A Common Stock. (2) Awards forfeited during the period represent the unvested portion of New TMM Unit awards for employees who have terminated employment with the Company and for which the New TMM Unit and the corresponding Class B Share have been canceled. The following table summarizes the time-based RSU and performance-based RSU activity for the three months ended March 31, 2017:
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Summary of Stock Option Activity | The following table summarizes the stock option activity for the three months ended March 31, 2017:
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Accumulated Other Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The table below provides the components of accumulated other comprehensive income (loss) (“AOCI”) for the periods presented (in thousands).
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Reporting Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Segments | Our reporting segments are as follows:
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Segment Information | Segment information is as follows (in thousands):
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Assets from Segment |
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Mortgage Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summaries of Derivative Instruments | The following summarizes derivative instruments as of the periods presented:
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Business (Detail) |
3 Months Ended |
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Mar. 31, 2017
Segment
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments (in segment) | 4 |
Summary of Significant Accounting Policies (Detail) - USD ($) |
3 Months Ended | ||||
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Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Apr. 09, 2015 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Unamortized debt issuance costs | $ 11,941,000 | $ 12,516,000 | |||
Number of shares issued for each share of Class B Common Stock and TMM Unit converted (in shares) | 1 | ||||
Impairment of real estate inventory | 0 | $ 0 | |||
Equity method investment impairment charges | $ 0 | $ 0 | |||
Effect on prior period amounts related to adopting Accounting Standards Update 2015-03 | Respective debt liability | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Unamortized debt issuance costs | $ 19,900,000 | ||||
Effect on prior period amounts related to adopting Accounting Standards Update 2015-03 | Prepaid expenses and other assets, net | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Unamortized debt issuance costs | $ (19,900,000) |
Business Combinations (Detail) - USD ($) $ in Thousands |
Jan. 08, 2016 |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Assets acquired | |||
Goodwill | $ 66,198 | $ 66,198 | |
Acadia Homes | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 83,600 | ||
Seller financing and holdbacks, and contingent consideration included in purchase price | 19,700 | ||
Assets acquired | |||
Real estate inventory | 76,152 | ||
Land deposits | 984 | ||
Prepaid expenses and other assets | 816 | ||
Property and equipment | 204 | ||
Goodwill | 8,500 | ||
Total assets | 86,656 | ||
Less liabilities assumed | |||
Accrued expenses and other liabilities | 2,562 | ||
Customer deposits | 463 | ||
Net assets acquired | $ 83,631 |
Earnings Per Share - Additional Information (Detail) - shares |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
|
Stock options and time-vesting RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from the calculation of earnings per share | 1,847,982 | 2,136,552 |
Real Estate Inventory and Land Deposits - Schedule of Inventory (Detail) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Real Estate [Abstract] | ||||
Real estate developed and under development | $ 2,069,795 | $ 2,074,651 | ||
Real estate held for development or held for sale | 176,688 | 183,638 | ||
Operating communities | 709,474 | 650,036 | ||
Capitalized interest | 103,059 | 102,642 | $ 110,962 | $ 105,148 |
Total owned inventory | 3,059,016 | 3,010,967 | ||
Real estate not owned under option agreements | 4,682 | 6,252 | ||
Total real estate inventory | $ 3,063,698 | $ 3,017,219 |
Real Estate Inventory and Land Deposits - Schedule of Development Status of Land Inventory (Detail) $ in Thousands |
Mar. 31, 2017
USD ($)
Lot
|
Dec. 31, 2016
USD ($)
Lot
|
---|---|---|
Inventory [Line Items] | ||
Number of Owned Lots (in lot) | Lot | 27,124 | 27,986 |
Book Value of Land and Development | ||
Inventory [Line Items] | ||
Raw | $ | $ 341,389 | $ 403,902 |
Partially developed | $ | 549,083 | 501,496 |
Finished | $ | 1,341,236 | 1,336,709 |
Long-term strategic assets | $ | 14,775 | 16,182 |
Total | $ | $ 2,246,483 | $ 2,258,289 |
Raw | ||
Inventory [Line Items] | ||
Number of Owned Lots (in lot) | Lot | 6,145 | 7,142 |
Partially developed | ||
Inventory [Line Items] | ||
Number of Owned Lots (in lot) | Lot | 7,983 | 8,037 |
Finished | ||
Inventory [Line Items] | ||
Number of Owned Lots (in lot) | Lot | 11,571 | 11,318 |
Long-term strategic assets | ||
Inventory [Line Items] | ||
Number of Owned Lots (in lot) | Lot | 1,425 | 1,489 |
Real Estate Inventory and Land Deposits - Additional Information (Detail) $ in Millions |
Mar. 31, 2017
USD ($)
Lot
|
Dec. 31, 2016
USD ($)
Lot
|
---|---|---|
Real Estate [Abstract] | ||
Right to purchase lots of land option (in lot) | Lot | 7,294 | 7,583 |
Aggregate purchase price | $ 506.5 | $ 542.6 |
Non-refundable option deposits | $ 36.3 | $ 37.2 |
Real Estate Inventory and Land Deposits - Schedule of Interest Capitalized, Incurred, Expensed and Amortized (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Interest capitalized - beginning of period | $ 102,642 | $ 105,148 |
Interest incurred | 20,714 | 22,244 |
Interest amortized to cost of home closings | (20,297) | (16,430) |
Interest capitalized - end of period | $ 103,059 | $ 110,962 |
Investments in Unconsolidated Entities - Additional Information (Detail) |
Mar. 31, 2017 |
---|---|
Equity Method Investments and Joint Ventures [Abstract] | |
Maximum related and unrelated third parties ownership interests | 50.00% |
Investments in Unconsolidated Entities - Summarized Balance Sheets of Unconsolidated Entities Accounted by Equity Method (Detail) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Other assets | $ 876,949 | $ 1,008,565 |
Liabilities and owners’ equity: | ||
Debt | 1,463,535 | 1,586,533 |
Equity Method Investments | ||
Assets: | ||
Real estate inventory | 736,324 | 614,441 |
Other assets | 127,566 | 171,216 |
Total assets | 863,890 | 785,657 |
Liabilities and owners’ equity: | ||
Debt | 333,260 | 277,934 |
Other liabilities | 18,004 | 22,603 |
Total liabilities | 351,264 | 300,537 |
Owners’ equity: | ||
TMHC | 171,815 | 157,909 |
Others | 340,811 | 327,211 |
Total owners’ equity | 512,626 | 485,120 |
Total liabilities and owners’ equity | $ 863,890 | $ 785,657 |
Investments in Unconsolidated Entities - Summarized Statements of Operations of Unconsolidated Entities Accounted by Equity Method (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||
TMHC’s share in income of unconsolidated entities | $ 1,085 | $ 782 |
Equity Method Investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 22,994 | 12,620 |
Costs and expenses | (20,104) | (10,110) |
Income of unconsolidated entities | 2,890 | 2,510 |
TMHC’s share in income of unconsolidated entities | 1,085 | 782 |
Distributions from unconsolidated entities | $ 1,739 | $ 111 |
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Payables and Accruals [Abstract] | ||||
Real estate development costs to complete | $ 11,514 | $ 15,156 | ||
Compensation and employee benefits | 31,412 | 63,802 | ||
Self-insurance and warranty reserves | 52,416 | 50,550 | $ 43,195 | $ 43,098 |
Interest payable | 24,450 | 17,233 | ||
Property and sales taxes payable | 7,054 | 17,231 | ||
Other accruals | 40,589 | 45,230 | ||
Total accrued expenses and other liabilities | $ 167,435 | $ 209,202 |
Accrued Expenses and Other Liabilities - Summary of Changes in Reserves (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Payables and Accruals [Abstract] | ||
Standard product warranty term (in years) | 1 year | |
Changes in Warranty Reserves | ||
Reserve - beginning of period | $ 50,550 | $ 43,098 |
Additions to reserves | 4,299 | 5,768 |
Costs and claims incurred | (3,335) | (6,585) |
Change in estimates to existing reserves | 902 | 914 |
Reserve - end of period | $ 52,416 | $ 43,195 |
Debt - 2021 Senior Notes - Additional Information (Detail) - 5.25% Senior Notes due 2021 - Senior Notes - USD ($) |
3 Months Ended | |
---|---|---|
Apr. 16, 2013 |
Mar. 31, 2017 |
|
Debt Instrument [Line Items] | ||
Senior Notes issued amount | $ 550,000,000 | |
Stated interest rate of senior notes (as a percent) | 5.25% | 5.25% |
Redemption price (as a percent) | 101.00% | 102.625% |
Debt - 2023 Senior Notes and Redemption of 2020 Senior Notes - Additional Information (Detail) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Apr. 16, 2015 |
Mar. 31, 2017 |
Jun. 30, 2015 |
May 01, 2015 |
|
5.875% Senior Notes due 2023 | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Senior Notes issued amount | $ 350,000,000 | |||
Stated interest rate of senior notes (as a percent) | 5.875% | |||
Loss on extinguishment of debt | $ 33,300,000 | |||
Redemption price (as a percent) | 100.00% | |||
5.875% Senior Notes due 2023 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate of senior notes (as a percent) | 5.875% | |||
7.75% Senior Notes due 2020 | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Percentage of redemption price, principal amount of debt | 105.813% | |||
7.75% Senior Notes due 2020 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate of senior notes (as a percent) | 7.75% |
Debt - 2024 Senior Notes - Additional Information (Detail) - 5.625% Senior Notes due 2024 - Senior Notes - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 05, 2014 |
|
Debt Instrument [Line Items] | ||
Senior Notes issued amount | $ 350,000,000 | |
Stated interest rate of senior notes (as a percent) | 5.625% | 5.625% |
Redemption price (as a percent) | 100.00% |
Debt - Revolving Credit Facility - Additional Information (Detail) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
fiscal_quarter
|
Dec. 31, 2016
USD ($)
|
|
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 0 | $ 0 |
Revolving Credit Facility | Restated Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity on line of credit | $ 500,000,000.0 | |
Maximum capitalization ratio | 60.00% | |
Minimum consolidated tangible net worth requirement | $ 1,600,000,000 | |
Revolving credit facility | $ 40,000,000 | |
Maximum consecutive days for financial covenant | 5 days | |
Number of consecutive fiscal quarters in which equity cure right can be used twice (in fiscal quarter) | fiscal_quarter | 4 | |
Maximum number of times equity cure right can be exercised | 5 |
Debt - Loans Payable and Other Borrowings - Additional Information (Detail) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Carrying Value | $ 1,463,535 | $ 1,586,533 |
Loans Payables | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate on loans payable | 0.00% | 0.00% |
Loans Payables | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate on loans payable | 8.00% | 8.00% |
Fair Value Disclosures - Nonrecurring Basis (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Inventory impairment charges | $ 3,500 | |
Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Inventories (1) | $ 3,778 |
Income Taxes (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Income Tax [Line Items] | |||
Income tax provision | $ 18,873 | $ 12,887 | |
Effective tax rate | 34.60% | 33.10% | |
Potential interest and penalties accrued | $ 500 | $ 400 | |
Domestic | |||
Income Tax [Line Items] | |||
Gross cumulative unrecognized tax benefits | $ 7,800 |
Stockholders' Equity - Additional Information (Detail) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 27, 2017
$ / shares
shares
|
Feb. 06, 2017
$ / shares
shares
|
Mar. 31, 2017
USD ($)
vote / shares
shares
|
Mar. 31, 2016
USD ($)
shares
|
|
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Voting rights per share | vote / shares | 1 | |||
Issuance of shares from secondary offerings (in shares) | shares | 10,000,000 | 11,500,000 | ||
Net purchase price per share (usd per share) | $ / shares | $ 20.78 | $ 18.2875 | ||
Authorized amount for Stock Repurchase Program | $ 100,000,000 | |||
Repurchase of common stock (in shares) | shares | 0 | 337,760 | ||
Amount of stock repurchased during period | $ 5,000,000 | |||
Remaining amount authorized for repurchase | $ 56,400,000 | |||
Class B Common Stock | ||||
Class of Stock [Line Items] | ||||
Voting rights per share | vote / shares | 1 |
Stockholders' Equity - Components and Voting Power of Outstanding Common Stock (Detail) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Class of Stock [Line Items] | ||
Shares Outstanding (in shares) | 119,492,089 | |
Percentage | 100.00% | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Shares Outstanding (in shares) | 52,101,585 | 30,486,858 |
Percentage | 43.60% | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Shares Outstanding (in shares) | 67,390,504 | 88,942,052 |
Percentage | 56.40% |
Stock Based Compensation - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Apr. 09, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate unamortized outstanding stock based compensation | $ 30.1 | $ 18.8 | |
Number of shares issued for each share of Class B Common Stock and TMM Unit converted (in shares) | 1 | ||
Restricted stock units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of units vested | 33.00% | ||
Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
2013 Omnibus Equity Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate common stock available for future grants (in shares) | 2,822,754 |
Stock Based Compensation - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation | $ 3,012 | $ 2,720 |
New TMM units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation | 157 | 381 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation | 958 | 957 |
Restricted stock units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation | $ 1,897 | $ 1,382 |
Stock Based Compensation - Summary of Restricted Stock Unit and Performance Based Restricted Stock Unit Activity (Detail) - Restricted Stock Units and Performance Based Restricted Stock Units |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Shares | |
Beginning balance (in shares) | shares | 1,358,701 |
Granted (in shares) | shares | 621,293 |
Vested (in shares) | shares | (49,036) |
Forfeited (in shares) | shares | (37,559) |
Ending balance (in shares) | shares | 1,893,399 |
Weighted Average Grant Date Fair Value | |
Outstanding, Beginning balance (usd per share) | $ / shares | $ 13.39 |
Granted (usd per share) | $ / shares | 17.84 |
Vested (usd per share) | $ / shares | 18.76 |
Forfeited (usd per share) | $ / shares | 13.41 |
Outstanding, Ending balance (usd per share) | $ / shares | $ 14.72 |
Stock Based Compensation - Summary of Stock Option Plan (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Shares | |
Outstanding, Beginning balance (in shares) | shares | 2,431,347 |
Granted (in shares) | shares | 785,132 |
Exercised (in shares) | shares | (33,583) |
Canceled/Forfeited (in shares) | shares | (54,912) |
Outstanding, Ending balance (in shares) | shares | 3,127,984 |
Options exercisable (in shares) | shares | 935,059 |
Weighted Average Exercise Price Per Share | |
Outstanding, Beginning balance (usd per share) | $ / shares | $ 17.09 |
Granted (usd per share) | $ / shares | 19.03 |
Exercised (usd per share) | $ / shares | 12.25 |
Canceled/Forfeited (usd per share) | $ / shares | 17.86 |
Outstanding, Ending balance (usd per share) | $ / shares | 17.62 |
Options exercisable (usd per share) | $ / shares | $ 18.94 |
Stock Based Compensation - Summary of Class B/New TMM Unit Activity (Detail) - Class B Common Stock/New TMM Units |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
shares
| |
Shares/New TMM Units | |
Beginning balance (in shares) | 1,146,357 |
Exchanges (in shares) | (49,956) |
Forfeited (in shares) | (1,592) |
Ending balance (in shares) | 1,094,809 |
Weighted Average Grant Date Fair Value | |
Beginning balance (usd per share) | $ / shares | $ 5.58 |
Exchanges (usd per share) | $ / shares | 4.09 |
Forfeited (usd per share) | $ / shares | 8.04 |
Ending balance (usd per share) | $ / shares | $ 5.65 |
Number of units vested and not sold (in shares) | 1,021,369 |
Related-Party Transactions (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Affiliates | |
Related Party Transaction [Line Items] | |
Real estate inventory acquisitions from affiliates | $ 0 |
Commitments and Contingencies (Detail) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding letters of credit and surety bonds | $ 298.0 | $ 302.8 |
Legal accruals | 4.7 | $ 4.4 |
Exposure to collectibility of receivables if not sold to an investor | ||
Loss Contingencies [Line Items] | ||
Total commitments to extend credit | $ 175.9 |
Mortgage Hedging Activities (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Derivative [Line Items] | ||
Fair Value | $ 1,961 | $ 2,291 |
IRLCs | ||
Derivative [Line Items] | ||
Fair Value | 2,468 | 1,987 |
Notional Amount | 75,839 | 61,655 |
MBSs | ||
Derivative [Line Items] | ||
Fair Value | (507) | 304 |
Notional Amount | $ 94,116 | $ 97,000 |
Minimum | ||
Derivative [Line Items] | ||
Derivative term | 30 days | |
Maximum | ||
Derivative [Line Items] | ||
Derivative term | 60 days |
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