Taylor Morrison Home Stock

Taylor Morrison Home Corporation (TMHC) operates as a national land developer and homebuilder in the United States.

The company has expanded its market footprint and product positioning through the company’s homebuilder acquisitions and smart organic growth and serves a broad range of consumers in the entry-level, move-up and resort lifestyle segments across the country. The company is also a land developer, with a portfolio of lifestyle and master-planned communities with single and multi-family detached and attached homes.

The company operates under various brand names including Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade. The company also leverages its core homebuilding and land development expertise in alternative ways by operating the following strategic real estate related businesses:

The company provides financial services to customers through its wholly owned mortgage subsidiary, Taylor Morrison Home Funding, Inc. (‘TMHF’), title insurance and closing settlement services through the company’s title company, Inspired Title Services, LLC (‘Inspired Title’), and homeowner’s insurance policies through the company’s insurance agency, Taylor Morrison Insurance Services, LLC (‘TMIS’).

The company operates a ‘Build-to-Rent’ homebuilding business under the brand name Yardly. The company serves as a land acquirer, developer, and homebuilder in addition to leasing and management functions.

Through a wholly-owned subsidiary, the company also develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties under the Urban Form brand name.

The company’s business is organized into multiple homebuilding operating components and a financial services component.

Business Strategy and Operations

The company’s short and long-term priorities and strategies include the following:

Short-term Priorities: Strategic land initiatives to mitigate risk; process and product optimization to promote operational effectiveness; product innovation and standardization to drive operating efficiencies; balancing the company’s inventory of homes under construction and the company’s pace of new construction starts; optimizing, at a community level, the intentional balance of to-be-built and quick-move-in homes; continuing to enhance the customer experience; and further scaling the company’s Build-to-Rent operations to meet the need for rental households.

Long-term Strategies: Opportunistic land acquisition of prime assets in core locations; building distinctive communities driven by consumer preferences; resulting in a balanced portfolio, which can withstand multiple economic cycles; and innovative digital marketing capabilities.

Land and Development Strategies

Prudent and disciplined acquisition of land in core locations and thoughtful community development have always been pillars of the company’s long-term strategy. The company generally operates as community developers, however in some communities the company operates solely as merchant builders, in which case the company acquires fully entitled and developed lots.

The company offers a range of award-winning and innovative designs with a number of features, such as single-story, multi-story, multi-family, higher density living, ranch style living, split bedroom plans and first floor master bedroom suites to appeal to diverse buyer needs. The company engages architectural firms and utilize internal architectural resources to develop and augment existing plans in order to ensure that the company’s homes reflect current and local consumer tastes. The company engineers its homes for energy-efficiency to reduce the impact on the environment. The company’s TM LiveWell program provides homeowners with a robust suite of healthy home features and technologies focused on providing healthier air, cleaner water, and safer paint.

Sales and Marketing

The central element of the company’s marketing platform is its web presence at www.taylormorrison.com, which houses the company’s suite of home-shopping digital tools placing innovation, transparency, and consumer ease at the forefront. The company continually tests its online shopping experience with home shoppers to refine the company’s online shopping experience. The company’s full suite of online shopping products includes an artificial intelligence enhanced chatbot to help provide information, engage the shopper, and leads; online self-service appointments to help customers schedule an appointment with ease and convenience; self-guided tours to enable customers to tour the company’s homes privately, safely, and outside of normal business hours; and online home reservations, which allow shoppers to get an initial price based on their selection of lot, floor plan, exterior, and in some markets structural options, and to reserve their desired home configuration digitally.

The company’s homes are sold by commissioned team members who work from sales offices generally located within the company’s model homes. The company’s sales team members are licensed real estate agents, where required by law, and assist the company’s customers in adding design features to their homes, which appeal to local consumer preferences. Third-party brokers who sell the company’s homes are generally paid a sales commission based on the price of the home. In some of the company’s divisions, the company contracts with third-party design studios that specialize in assisting the company’s homebuyers with options and upgrades to personalize their homes.

Seasonality

The company’s business is seasonal. The company has historically experienced variability in its results on a quarterly basis (year ended December 2023).

Financial Services

TMHF provides a number of finance-related services to the company’s customers through the company’s mortgage lending operations. The strategic purpose of TMHF is:

To utilize mortgage finance as a sales tool in the home sale process to ensure a consistent customer experience and assist in maintaining home production efficiency; and

To control and analyze the company’s sales order backlog quality and to manage projected home closing and delivery dates for the company’s customers.

TMHF operates as an independent mortgage banker and conducts its business as a Federal Housing Administration (‘FHA’) Full Eagle lender. TMHF funds mortgage loans utilizing warehouse credit facilities. Revenue is earned through originating, selling, and servicing residential mortgage loans through its retail channel. Typically, loans are sold and servicing is released.

TMHF competes with other mortgage lenders, including national, regional and local mortgage bankers and other financial institutions. TMHF utilizes a multi-investor correspondent platform which gives the company increased flexibility when placing loans with investors. TMHF has continued to expand and strengthen the company’s correspondent relationships. This has created stability and consistency in the company’s origination process and delivery.

Inspired Title operates as a title insurance agent providing title and/or escrow services. Inspired Title searches and examines land title records, prepares title commitments and polices for acquired land and homebuyers in the company’s Florida, Georgia, North Carolina, South Carolina, Arizona, Nevada, Colorado and Texas markets, contracting with agents in other markets where title insurance underwriters and attorneys perform the escrow closing functions. Inspired Title competes against other title and escrow agents that provide similar services. Specific to the company’s California markets, Inspired California Escrow provides escrow services for homebuyers in the company’s California market and competes against other escrow agents that provide similar services.

TMIS operates as an insurance agency utilizing third-party carriers that specialize in homeowner’s insurance for new homes and offers other insurance products such as auto, flood and universal for homebuyers in all of the company’s markets. TMIS competes against other insurance agencies that provide similar services.

Regulation, Environmental, Health and Safety Matters

In order for the company’s homebuyers to finance their home purchases with FHA-insured, Veterans Administration (‘VA’)-guaranteed or the U.S. Department of Agriculture-guaranteed mortgages, the company is required to build such homes in accordance with the regulatory requirements of those agencies.

History

Taylor Morrison Home Corporation was founded in 1936. The company was incorporated in Delaware in 2012.