Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20172022
OR


¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 001-35873
TAYLOR MORRISON HOME CORPORATION
(Exact name of Registrantregistrant as specified in its Charter)
Delaware
90-0907433
Delaware
83-2026677
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
4900 N. Scottsdale Road, Suite 2000
Scottsdale, Arizona
85251
Scottsdale,Arizona
(Address of principal executive offices)(Zip Code)
(480) 840-8100
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.00001 par valueTMHCNew York Stock Exchange
Indicate by check mark whether the Registrant:registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer☒Accelerated filer☐
Non-accelerated filer¨Smaller reporting company☐
Large accelerated filer¨Accelerated filerý
Non-accelerated filer (Do not check if a smaller reporting company)¨Smaller reporting company¨
Emerging growth company¨☐




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding as of October 26, 2022
Common stock, $0.00001 par value108,346,617
ClassOutstanding as of November 1, 2017
Class A common stock, $0.00001 par value72,364,924
Class B common stock, $0.00001 par value47,193,672


Table of Contents
TAYLOR MORRISON HOME CORPORATION
TABLE OF CONTENTS
Page
Page
Item 1. Financial Statements of Taylor Morrison Home Corporation (Unaudited)
2
Condensed Consolidated Balance Sheets as of September 30, 20172022 and December 31, 20162021
2
Condensed Consolidated Statements of Operations for the three and nine month periods months ended September 30, 20172022 and 20162021
3
Condensed Consolidated Statements of Comprehensive Income for the three and nine month periods ended September 30, 2017 and 2016
4
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine month periodmonths ended September 30, 20172022 and 2021
54
Condensed Consolidated Statements of Cash Flows for the nine month period months ended September 30, 20172022 and 20162021
6
Notes to the Unaudited Condensed Consolidated Financial Statements
7
24
38
39
40
40
40
40
40
40
41
42

1
Table of Contents
PART I — FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


TAYLOR MORRISON HOME CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)


September 30,
2022		December 31,
2021
Assets
Cash and cash equivalents$329,244 $832,821 
Restricted cash578 3,519 
Total cash, cash equivalents, and restricted cash329,822 836,340 
Owned inventory5,904,344 5,444,207 
Consolidated real estate not owned54,733 55,314 
Total real estate inventory5,959,077 5,499,521 
Land deposits290,340 229,535 
Mortgage loans held for sale161,264 467,534 
Derivative assets23,832 2,110 
Lease right of use assets82,226 85,863 
Prepaid expenses and other assets, net188,671 314,986 
Other receivables, net214,282 150,864 
Investments in unconsolidated entities306,081 171,406 
Deferred tax assets, net151,240 151,240 
Property and equipment, net223,594 155,181 
Goodwill663,197 663,197 
Total assets$8,593,626 $8,727,777 
Liabilities
Accounts payable$264,190 $253,348 
Accrued expenses and other liabilities456,632 525,209 
Lease liabilities91,554 96,172 
Income taxes payable27,757 — 
Customer deposits527,412 485,705 
Estimated development liabilities37,958 38,923 
Senior notes, net2,173,798 2,452,322 
Loans payable and other borrowings409,791 404,386 
Revolving credit facility borrowings— 31,529 
Mortgage warehouse borrowings146,335 413,887 
Liabilities attributable to consolidated real estate not owned54,733 55,314 
Total liabilities$4,190,160 $4,756,795 
COMMITMENTS AND CONTINGENCIES (Note 13)
Stockholders’ Equity
Total stockholders’ equity4,403,466 3,970,982 
Total liabilities and stockholders’ equity$8,593,626 $8,727,777 
  September 30,
2017		 December 31,
2016
Assets    
Cash and cash equivalents $264,862
 $300,179
Restricted cash 1,315
 1,633
Total cash, cash equivalents, and restricted cash 266,177
 301,812
Owned inventory 3,240,664
 3,010,967
Real estate not owned under option agreements 3,107
 6,252
Total real estate inventory 3,243,771
 3,017,219
Land deposits 50,879
 37,233
Mortgage loans held for sale 107,665
 233,184
Derivative assets 2,037
 2,291
Prepaid expenses and other assets, net 72,546
 73,425
Other receivables, net 98,948
 115,246
Investments in unconsolidated entities 184,817
 157,909
Deferred tax assets, net 215,666
 206,634
Property and equipment, net 6,229
 6,586
Intangible assets, net 2,395
 3,189
Goodwill 66,198
 66,198
Total assets $4,317,328
 $4,220,926
Liabilities    
Accounts payable $146,263
 $136,636
Accrued expenses and other liabilities 190,384
 209,202
Income taxes payable 15,019
 10,528
Customer deposits 185,604
 111,573
Senior notes, net 1,239,211
 1,237,484
Loans payable and other borrowings 161,798
 150,485
Revolving credit facility borrowings —
 —
Mortgage warehouse borrowings 61,292
 198,564
Liabilities attributable to real estate not owned under option agreements 3,107
 6,252
Total liabilities 2,002,678
 2,060,724
COMMITMENTS AND CONTINGENCIES (Note 16) 
 
Stockholders’ Equity    
Class A common stock, $0.00001 par value, 400,000,000 shares authorized,
75,356,556 and 33,340,291 shares issued, 72,307,299 and 30,486,858 shares outstanding as of September 30, 2017 and December 31, 2016, respectively		 1
 —
Class B common stock, $0.00001 par value, 200,000,000 shares authorized,
47,249,127 and 88,942,052 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		 —
 1
Preferred stock, $0.00001 par value, 50,000,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016 —
 —
Additional paid-in capital 1,142,210
 384,709
Treasury stock at cost; 3,049,257 and 2,853,433 shares as of September 30, 2017 and December 31, 2016, respectively (47,622) (43,524)
Retained earnings 297,402
 228,613
Accumulated other comprehensive loss (17,989) (17,989)
Total stockholders’ equity attributable to Taylor Morrison Home Corporation 1,374,002
 551,810
Non-controlling interests – joint ventures 1,858
 1,525
Non-controlling interests – Principal Equityholders 938,790
 1,606,867
Total stockholders’ equity 2,314,650
 2,160,202
Total liabilities and stockholders’ equity $4,317,328
 $4,220,926


See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

2
Table of Contents
TAYLOR MORRISON HOME CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Home closings revenue, net$1,983,775 $1,772,495 $5,511,204 $4,780,304 
Land closings revenue14,225 42,228 66,651 79,174 
Financial services revenue27,749 38,046 98,419 119,503 
Amenity and other revenue8,895 5,982 56,517 16,862 
Total revenue2,034,644 1,858,751 5,732,791 4,995,843 
Cost of home closings1,438,164 1,397,319 4,084,748 3,838,602 
Cost of land closings11,571 36,439 50,139 68,604 
Financial services expenses20,395 26,202 66,092 76,136 
Amenity and other expenses6,574 6,341 39,264 16,907 
Total cost of revenue1,476,704 1,466,301 4,240,243 4,000,249 
Gross margin557,940 392,450 1,492,548 995,594 
Sales, commissions and other marketing costs94,692 97,185 279,950 280,697 
General and administrative expenses52,357 70,425 189,905 201,975 
Net loss/(income) from unconsolidated entities1,180 (1,482)2,986 (9,269)
Interest expense, net4,382 710 13,823 594 
Other expense/(income), net5,751 47 (4,720)1,067 
Gain on extinguishment of debt, net(71)— (13,542)— 
Income before income taxes399,649 225,565 1,024,146 520,530 
Income tax provision90,418 53,098 243,300 120,865 
Net income before allocation to non-controlling interests309,231 172,467 780,846 399,665 
Net loss/(income) attributable to non-controlling interests548 (4,333)(3,377)(9,363)
Net income available to Taylor Morrison Home Corporation$309,779 $168,134 $777,469 $390,302 
Earnings per common share
Basic$2.75 $1.35 $6.63 $3.07 
Diluted$2.72 $1.34 $6.56 $3.02 
Weighted average number of shares of common stock:
Basic112,701 124,378 117,242 127,217 
Diluted113,780 125,770 118,438 129,043 
  Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Home closings revenue, net $886,249
 $812,185
 $2,526,830
 $2,271,154
Land closings revenue 4,299
 27,418
 11,419
 44,957
Mortgage operations revenue 17,479
 13,814
 47,362
 36,951
Total revenues 908,027
 853,417
 2,585,611
 2,353,062
Cost of home closings 721,637
 658,507
 2,062,437
 1,852,724
Cost of land closings 3,002
 8,179
 7,869
 20,497
Mortgage operations expenses 12,070
 7,877
 30,874
 22,594
Total cost of revenues 736,709
 674,563
 2,101,180
 1,895,815
Gross margin 171,318
 178,854
 484,431
 457,247
Sales, commissions and other marketing costs 61,476
 58,277
 178,609
 165,300
General and administrative expenses 33,374
 29,944
 100,396
 91,078
Equity in income of unconsolidated entities (2,787) (1,646) (6,943) (4,734)
Interest income, net (135) (47) (314) (149)
Other expense, net 415
 1,935
 828
 8,602
Income before income taxes 78,975
 90,391
 211,855
 197,150
Income tax provision 24,282
 31,707
 65,631
 66,698
Net income before allocation to non-controlling interests 54,693
 58,684
 146,224
 130,452
Net income attributable to non-controlling interests — joint ventures (427) (376) (625) (856)
Net income before non-controlling interests — Principal Equityholders 54,266
 58,308
 145,599
 129,596
Net income attributable to non-controlling interests — Principal Equityholders (21,390) (43,471) (76,810) (96,261)
Net income available to Taylor Morrison Home Corporation $32,876
 $14,837
 $68,789
 $33,335
Earnings per common share        
Basic $0.45
 $0.49
 $1.21
 $1.07
Diluted $0.45
 $0.49
 $1.21
 $1.07
Weighted average number of shares of common stock:        
Basic 72,471
 30,427
 56,791
 31,300
Diluted 121,183
 120,103
 120,991
 120,870


See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

3
Table of Contents

TAYLOR MORRISON HOME CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMESTOCKHOLDERS’ EQUITY
(In thousands, except share data, unaudited)

For the three months ended September 30, 2022
  
 Common StockAdditional
Paid-in
Capital		Treasury StockStockholders' Equity
 SharesAmountAmountSharesAmountRetained
Earnings		Accumulated 
Other
Comprehensive
Income		Non-controlling
Interest 		Total
Stockholders’
Equity
Balance – June 30, 2022113,640,725 $1 $3,008,619 45,556,244 $(991,276)$2,156,505 $689 $19,357 $4,193,895 
Net income— — — — — 309,779 — (548)309,231 
Exercise of stock options77,951 — 1,512 — — — — — 1,512 
Issuance of restricted stock units, net of shares withheld for tax(1)
2,757 — — — — — — — — 
Repurchase of common stock(4,213,256)— — 4,213,256 (104,999)— — — (104,999)
Stock compensation expense— — 5,333 — — — — — 5,333 
Distributions to non-controlling interests of consolidated joint ventures— — — — — — — (1,515)(1,515)
Changes in non-controlling interests of consolidated joint ventures— — — — — — — 9 9 
Balance – September 30, 2022109,508,177 $1 $3,015,464 49,769,500 $(1,096,275)$2,466,284 $689 $17,303 $4,403,466 
(1) Dollar amount represents the value of shares withheld for taxes.

For the three months ended September 30, 2021
 
 Common StockAdditional
Paid-in
Capital		Treasury StockStockholders' Equity
 SharesAmountAmountSharesAmountRetained
Earnings		Accumulated 
Other
Comprehensive
Loss		Non-controlling
Interest		Total
Stockholders’
Equity
Balance – June 30, 2021125,910,318 $1 $2,977,269 32,167,192 $(624,615)$1,247,957 $(1,166)$69,403 $3,668,849 
Net income— — — — — 168,134 — 4,333 172,467 
Exercise of stock options276,595 — 5,778 — — — — — 5,778 
Issuance of restricted stock units, net of shares withheld for tax(1)
8,789 — (13)— — — — — (13)
Repurchase of common stock(3,309,196)— — 3,309,196 (91,659)— — — (91,659)
Stock compensation expense— — 4,793 — — — — — 4,793 
Distributions to non-controlling interests of consolidated joint ventures— — — — — — — (14,311)(14,311)
Changes in non-controlling interests of consolidated joint ventures— — — — — — — (8)(8)
Balance – September 30, 2021122,886,506 $1 $2,987,827 35,476,388 $(716,274)$1,416,091 $(1,166)$59,417 $3,745,896 
(1) Dollar amount represents the value of shares withheld for taxes.
4
Table of Contents
  Three Months Ended September 30, Nine Months Ended
September 30,
  2017 2016 2017 2016
Income before non-controlling interests, net of tax $54,693
 $58,684
 $146,224
 $130,452
Other comprehensive loss, net of tax:        
Post-retirement benefits adjustments, net of tax —
 —
 —
 (447)
Other comprehensive loss, net of tax —
 —
 —
 (447)
Comprehensive income 54,693
 58,684
 146,224
 130,005
Comprehensive income attributable to non-controlling interests — joint ventures (427) (376) (625) (856)
Comprehensive income attributable to non-controlling interests — Principal Equityholders (21,390) (43,471) (76,810) (95,932)
Comprehensive income available to Taylor Morrison Home Corporation $32,876
 $14,837
 $68,789
 $33,217
For the nine months ended September 30, 2022
 Common StockAdditional
Paid-in
Capital		Treasury StockStockholders' Equity
 SharesAmountAmountSharesAmountRetained
Earnings		Accumulated 
Other
Comprehensive
Income		Non-controlling
Interest 		Total
Stockholders’
Equity
Balance – December 31, 2021121,833,649 $1 $2,997,211 36,828,559 $(760,863)$1,688,815 $689 $45,129 $3,970,982 
Net income— — — — — 777,469 — 3,377 780,846 
Exercise of stock options209,940 — 4,424 — — — — — 4,424 
Issuance of restricted stock units, net of shares withheld for tax(1)
405,529 — (3,645)— — — — — (3,645)
Repurchase of common stock(12,940,941)— — 12,940,941 (335,412)— — — (335,412)
Stock compensation expense— — 17,474 — — — — — 17,474 
Distributions to non-controlling interests of consolidated joint ventures— — — — — — — (30,443)(30,443)
Changes in non-controlling interests of consolidated joint ventures— — — — — — — (760)(760)
Balance – September 30, 2022109,508,177 $1 $3,015,464 49,769,500 $(1,096,275)$2,466,284 $689 $17,303 $4,403,466 

(1) Dollar amount represents the value of shares withheld for taxes.

For the nine months ended September 30, 2021
 
 Common StockAdditional
Paid-in
Capital		Treasury StockStockholders' Equity
 SharesAmountAmountSharesAmountRetained
Earnings		Accumulated 
Other
Comprehensive
Loss		Non-controlling
Interest		Total
Stockholders’
Equity
Balance – December 31, 2020129,476,914 $1 $2,926,773 25,884,756 $(446,856)$1,025,789 $(1,166)$89,209 $3,593,750 
Net income— — — — — 390,302 — 9,363 399,665 
Exercise of stock options908,221 — 18,212 — — — — — 18,212 
Issuance of restricted stock units, net of shares withheld for tax(1)
388,798 — (4,870)— — — — — (4,870)
Warrant Exercises1,704,205 — 32,584 — — — — — 32,584 
Repurchase of common stock(8,565,933)— — 8,565,933 (236,831)— — — (236,831)
Common stock surrendered in connection with warrant exercise(1,025,699)— — 1,025,699 (32,587)— — — (32,587)
Stock compensation expense— — 15,128 — — — — — 15,128 
Distributions to non-controlling interests of consolidated joint ventures— — — — — — — (39,155)(39,155)
Balance – September 30, 2021122,886,506 $1 $2,987,827 35,476,388 $(716,274)$1,416,091 $(1,166)$59,417 $3,745,896 
(1) Dollar amount represents the value of shares withheld for taxes.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

TAYLOR MORRISON HOME CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands, except share data, unaudited)

5
  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 —
 —
 —
 —
 —
 —
 —
 68,789
 —
 625
 76,810
 146,224
Exchange of New TMM Units and corresponding number of Class B Common Stock 191,333
 —
 (191,333) —
 —
 —
 —
 —
 —
 —
 —
 —
Cancellation of forfeited New TMM Units and corresponding number of Class B Common Stock —
 —
 (1,592) —
 —
 —
 —
 —
 —
 —
 —
 —
Exercise of stock options 265,167
 —
 —
 —
 4,791
 —
 —
 —
 —
 —
 —
 4,791
Issuance of restricted stock units, net of shares withheld for tax 59,765
—
—
—
—
—
—
—
(307)—
—
—
—
—
—
—
—
—
—
—
—
—
(307)
Repurchase of common stock (195,824) —
 —
 —
 —
 195,824
 (4,098) —
 —
 —
 —
 (4,098)
Exchange of (repurchase) of B shares from secondary offerings 41,500,000
 1
 —
 —
 748,096
 —
 —
 —
 —
 —
 —
 748,097
Repurchase of New TMM Units from principal equityholders —
 —
 (41,500,000) (1) —
 —
 —
 —
 —
 —
 (750,193) (750,194)
Share based compensation —
 —
 —
 —
 4,921
 —
 —
 —
 —
 —
 5,306
 10,227
Changes in non-controlling interests of consolidated joint ventures —
 —
 —
 —
 —
 —
 —
 —
 —
 (292) —
 (292)
Balance – September 30, 2017 72,307,299
 $1
 47,249,127
 $—
 $1,142,210
 3,049,257
 $(47,622) $297,402
 $(17,989) $1,858
 $938,790
 $2,314,650
Table of Contents

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements


TAYLOR MORRISON HOME CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

 Nine Months Ended September 30, Nine Months Ended September 30,
 2017 2016 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:    CASH FLOWS FROM OPERATING ACTIVITIES:
Net income before allocation to non-controlling interests $146,224
 $130,452
Net income before allocation to non-controlling interests$780,846 $399,665 
Adjustments to reconcile net income to net cash provided by operating activities: 
 
Equity in income of unconsolidated entities (6,943) (4,734)
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Net loss/(income) from unconsolidated entitiesNet loss/(income) from unconsolidated entities2,986 (9,269)
Stock compensation expense 10,227
 8,959
Stock compensation expense17,474 15,128 
Gain on extinguishment of debt, netGain on extinguishment of debt, net(13,542)— 
Gain on land transfersGain on land transfers(14,508)— 
Distributions of earnings from unconsolidated entities 4,666
 2,538
Distributions of earnings from unconsolidated entities5,318 9,050 
Depreciation and amortization 2,994
 3,000
Depreciation and amortization25,448 29,726 
Operating lease expenseOperating lease expense20,543 12,167 
Debt issuance costs amortization 2,864
 2,888
Debt issuance costs amortization1,574 355 
Contingent consideration 766
 3,520
Deferred income taxes (9,032) (969)
Change in Urban Form assets due to saleChange in Urban Form assets due to sale11,675 — 
Land held for sale write-downsLand held for sale write-downs— 4,590 
Changes in operating assets and liabilities: 
 
Changes in operating assets and liabilities:
Real estate inventory and land deposits (243,343) (103,758)Real estate inventory and land deposits(610,346)(678,809)
Mortgages held for sale, prepaid expenses and other assets 141,813
 76,281
Mortgages held for sale, prepaid expenses and other assets245,633 (216,121)
Customer deposits 74,031
 44,780
Customer deposits41,707 209,290 
Accounts payable, accrued expenses and other liabilities 4,017
 (9,415)Accounts payable, accrued expenses and other liabilities(82,578)97,129 
Income taxes payable 4,491
 (11,119)Income taxes payable27,757 23,554 
Net cash provided by operating activities 132,775
 142,423
Net cash provided by/(used in) operating activitiesNet cash provided by/(used in) operating activities459,987 (103,545)
CASH FLOWS FROM INVESTING ACTIVITIES: 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,843) (934)Purchase of property and equipment(22,478)(15,698)
Payments for business acquisitions —
 (52,819)
Distributions of capital from unconsolidated entities 4,223
 3,546
Distributions of capital from unconsolidated entities95,517 14,237 
Investments of capital into unconsolidated entities (28,854) (24,509)Investments of capital into unconsolidated entities(91,846)(31,843)
Net cash (used in) investing activities (26,474) (74,716)
Investments in equity securitiesInvestments in equity securities— (10,000)
Net cash used in investing activitiesNet cash used in investing activities(18,807)(43,304)
CASH FLOWS FROM FINANCING ACTIVITIES: 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in loans payable and other borrowings 8,644
 55,720
Increase in loans payable and other borrowings33,495 103,805 
Repayments of loans payable and other borrowings (11,305) (65,075)
Borrowings on revolving credit facility —
 255,000
Payments on revolving credit facility —
 (155,000)
Borrowings on mortgage warehouse 567,922
 782,001
Repayment on mortgage warehouse (705,194) (874,279)
Payment of contingent consideration —
 (3,100)
Repayments on loans payable and other borrowingsRepayments on loans payable and other borrowings(50,761)(89,635)
Borrowings on revolving credit facilitiesBorrowings on revolving credit facilities182,548 126,692 
Repayments on revolving credit facilitiesRepayments on revolving credit facilities(214,077)— 
Borrowings on mortgage warehouse facilitiesBorrowings on mortgage warehouse facilities1,783,748 2,287,791 
Repayments on mortgage warehouse facilitiesRepayments on mortgage warehouse facilities(2,051,300)(2,179,395)
Repayments on senior notesRepayments on senior notes(264,935)— 
Proceeds from stock option exercises 4,791
 —
Proceeds from stock option exercises4,424 18,212 
Proceeds from issuance of shares from secondary offerings 882,306
 —
Repurchase of shares from principal equity holders (884,403) —
Payment of principal portion of finance leasePayment of principal portion of finance lease(1,340)(1,325)
Repurchase of common stock, net (4,098) (28,543)Repurchase of common stock, net(335,412)(236,831)
Payment of taxes related to net share settlement of equity awards (307) —
Payment of taxes related to net share settlement of equity awards(3,645)(5,494)
Distributions to non-controlling interests of consolidated joint ventures, net (292) (60)
Net cash (used in) financing activities (141,936) (33,336)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS $(35,635) $34,371
Cash and distributions to non-controlling interests of consolidated joint ventures, netCash and distributions to non-controlling interests of consolidated joint ventures, net(30,443)(36,095)
Net cash used in financing activitiesNet cash used in financing activities(947,698)(12,275)
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASHNET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH$(506,518)$(159,124)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period 301,812
 127,468
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period836,340 534,109 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period $266,177
 $161,839
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period$329,822 $374,985 
SUPPLEMENTAL CASH FLOW INFORMATION: 
 
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net $(70,172) $(78,786)
Income tax paymentsIncome tax payments$(176,683)$(96,753)
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: 
 
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Change in loans payable issued to sellers in connection with land purchase contracts $55,151
 $55,720
Change in loans payable issued to sellers in connection with land purchase contracts$184,458 $174,297 
Change in inventory not owned $(3,145) $(7,309)Change in inventory not owned$(581)$(64,344)
Original accrual of contingent consideration for business combinations

 $—
 $380
Investments of land in unconsolidated joint ventures, netInvestments of land in unconsolidated joint ventures, net$146,649 $— 
Net non-cash distributions from non-controlling interestsNet non-cash distributions from non-controlling interests$— $(3,060)
Common stock surrendered in connection with warrant exercisesCommon stock surrendered in connection with warrant exercises$— $32,587 
Common stock issued in connection with warrant exercisesCommon stock issued in connection with warrant exercises$— $(32,584)
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

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TAYLOR MORRISON HOME CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Organization and Description of the Business - — Taylor Morrison Home Corporation (referred“TMHC” through its subsidiaries (together with TMHC 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. AsWe operate in the states of September 30, 2017, we operated in Arizona, California, Colorado, Florida, Georgia, Illinois,Nevada, North and South Carolina, Oregon, Texas, and Texas. Our Company servesWashington. We provide an assortment of homes across a wide range of price points to appeal to an array of consumer groups from coastgroups. We design, build and sell single and multi-family detached and attached homes in traditionally high growth markets for entry level, move-up and resort lifestyle (formerly referred to coast, including first time, move-up, luxury, and 55 plusas 55-plus active lifestyle) 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 siteland development. Our Mortgage Operations reportable segment provideshomebuilding segments operate under our Taylor Morrison, Darling Homes Collection by Taylor Morrison, and Esplanade brand names. We operate a “Build-to-Rent” homebuilding business where we serve as a land acquirer, developer, and homebuilder. In addition, we develop and construct multi-use properties consisting of commercial space, retail, and multi-family properties under the “Urban Form” brand. We also have operations which provide financial services to customers through our wholly owned mortgage subsidiary, operating as Taylor Morrison Home Funding, LLCInc. (“TMHF”), and title services through our wholly owned title services subsidiary, Inspired Title Services, LLC (“Inspired Title”), and homeowner’s insurance policies through our insurance agency, Taylor Morrison Insurance Services, LLC (“TMIS”).

During the quarter ended March 31, 2017, we realigned our Our business is organized into multiple homebuilding operating divisions within our existing segments based on geographic locationcomponents, and management's long term strategic plans. As a result,financial services component, all historical periods presented in the segment information have been reclassified to give effect to this segment realignment.of which are managed as four reportable segments: East, Central, West, and Financial Services.

2. 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 for the year ended December 31, 2021 (the “Annual Report”). In the opinion of management, the accompanying Unauditedunaudited 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 shownWe consolidate certain joint ventures in U.S. dollars. Assets and liabilities recorded in foreign currencies are translated ataccordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation. The loss/income from the exchange ratepercentage of the joint ventures not owned by us is presented as “Net loss/income attributable to non-controlling interests” 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 sole owner of 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 of investors 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 nine months ended September 30, 2017.

Reclassifications - Prior period amounts for cash, cash equivalents, and restricted cash on theunaudited 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 ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.Operations.


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 unaudited Condensed Consolidated Financial Statements and these accompanying notes. Significant estimates include real estate development costs to complete, valuation of real estate, valuation of acquired assets,goodwill, valuation of goodwill,development liabilities, 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 EquityholdersGoodwill — Immediately prior to our IPO, as partThe excess of the Reorganization Transactions,purchase price of a business acquisition over the existing holdersnet fair value 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,assets acquired and liabilities assumed is exchangeable into one share of our Class A Common Stockcapitalized as goodwill in accordance with ASC Topic 350, Intangibles — Goodwill and Other.ASC 350 requires that goodwill and intangible assets that do not have finite lives not be amortized, but rather assessed for impairment at least annually or more frequently if certain impairment indicators are present. We perform our annual impairment test during the termsfourth quarter or whenever impairment indicators are present. We did not perform an impairment test during the third quarter of 2022 as indicators of impairment were not present.

Real Estate Inventory — Inventory consists of raw land, land under development, homes under construction, completed homes, and model homes, all of which are stated at cost. In addition to direct carrying costs, we also capitalize interest, real estate taxes, and related development costs that benefit the entire community, such as field construction supervision and related direct overhead. Home vertical construction costs are accumulated and charged to Cost of home closings at the time of home closing using the specific identification method. Land acquisition, development, interest, and real estate taxes are allocated to homes and units generally using the relative sales value method. Generally, all overhead costs relating to purchasing, vertical construction of a home, and construction utilities are considered overhead costs and allocated on a per unit basis. These costs are capitalized to inventory from the point development begins to the point construction is completed. Changes in estimated
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costs to be incurred in a community are generally allocated to the remaining lots on a prospective basis. For those communities that have been temporarily closed or development has been discontinued, we do not allocate interest or other costs to the community’s inventory until activity resumes. Such costs are expensed as incurred.

The life cycle of a typical community generally ranges from two to five years, commencing with the acquisition of unentitled or entitled land, continuing through the land development phase and concluding with the sale, construction and delivery of homes. Actual community duration will vary based on the size of the Exchange Agreement, dated as of April 9, 2013, amongcommunity, the Company, New TMMsales absorption rate and the holders of Class B Common Stock and New TMM Units.

During the nine months ended September 30, 2017, we completed multiple sales of our Class A Common Stock in registered public offerings, totaling 41.5 million shares. We used all of the net proceeds from the 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 all 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 and Condensed Consolidated Statement of Stockholders' Equity to reflect the change in ownership. The aggregate number of partnership units and corresponding shares of Class B Common Stockwhether we purchased was equalthe property as raw land or as finished lots.

We capitalize qualifying interest costs to the number of shares of Class A Common Stock sold in the public offerings. Refer to Note 11- Stockholders' Equity for discussion regarding our equity offering transactionsinventory during the nine months ended September 30, 2017.development and construction periods. Capitalized interest is charged to cost of home closings when the related inventory is charged to cost of home closings.


Real Estate Inventory —WeWe 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 communityon a community-level basis during each reporting period. If indicators of impairment are present for a community, we first perform an undiscounted cash flow analysis is generally prepared in order to determine if the carrying value of the assets in that community exceeds the expectedestimated undiscounted cash flows. Generally, if the carrying value of the assets exceeds their estimated undiscounted cash flows, then the assets are deemed to bepotentially impaired, and are recorded atrequiring a fair value as of the assessment.analysis. Our determination of fair value is primarily based on a discounted cash flow model which includes projections and estimates relating to sales prices, construction costs, sales pace, and other factors. However, fair value can be determined through other methods, such as appraisals, contractual purchase offers, and other third party opinions of value. 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 and nine months ended September 30, 20172022 and 2016,2021, no impairment charges were recorded.


In certain cases, we may elect to cease development and/or marketing of an existing community if we believe the economic performance of the community would be maximized by deferring development for a period of time to allow for market conditions to improve. We refer to such communities as long-term strategic assets. The decision may be based on financial and/or operational metrics as determined by us. If we decide to cease development, we will evaluate the project for impairment and then cease future development and marketing activity until such a time when we believe that market conditions have improved and economic performance can be maximized. Our assessment of the carrying value of our long-term strategic assets typically includes subjective estimates of future performance, including the timing of when development will recommence, the type of product to be offered, and the margin to be realized. In the future, some of these inactive communities may be re-opened while others may be sold. As of September 30, 2022 and December 31, 2021, we had no inactive projects.

In the ordinary course of business, we enter into various option agreements to acquire lots in staged takedowns which may require a significant cash deposit. We are not legally obligated to purchase the balance of the lots, but would forfeit any existing deposits and could be subject to financial and other penalties if the lots are not purchased. Real estate not owned under these agreements is reflected in Consolidated real estate not owned with a corresponding liability in Liabilities attributable to consolidated real estate not owned in the unaudited Condensed Consolidated Balance Sheets.

Land held for sale — In some locations where we act as a developer, we occasionally purchase land that includes commercially zoned parcels or areas designated for school or government use, which we typically sell to commercial developers or municipalities, as applicable. We also sell residential lots or land parcels to manage our land and lot supply on larger tracts of land. Land is considered held for sale once management intends to actively sell a parcel within the next 12 months or the parcel is under contract to sell. Land held for sale is recorded at the lower of cost or fair value less costs to sell. In determining the value of land held for sale, we consider recent offers received, prices for land in recent comparable sales transactions, and other factors. We record fair value adjustments for land held for sale within Cost of land closings on the unaudited Condensed Consolidated Statements of Operations.

Land banking arrangements — We have land purchase agreements with various land sellers. As a method of acquiring land in staged takedowns, while limiting risk and minimizing the use of funds from our available cash or other financing sources, we may transfer our right under certain specific performance agreements to entities owned by third parties (“land banking arrangements”). These entities use equity contributions from their owners and/or incur debt to finance the acquisition and development of the land. The entities grant us an option to acquire lots in staged takedowns. In consideration for this option, we make a non-refundable deposit. We are not legally obligated to purchase the balance of the lots, but would forfeit any existing deposits and could be subject to financial and other penalties if the lots were not purchased. We do not have an ownership interest in these entities or title to their assets and do not guarantee their liabilities. These land banking arrangements help us manage the financial and market risk associated with land holdings.

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Investments in Consolidated and Unconsolidated Entities

Consolidated Entities— In the ordinary course of business, we enter into land purchase contracts, lot option contracts and land banking arrangements in order to procure land or lots for the construction of homes. Such contracts enable us to control significant lot positions with a minimal initial capital investment and substantially reduce the risks associated with land ownership and development. In accordance with ASC Topic 810, Consolidation, we have concluded that when we enter into these agreements to acquire land or lots and pay a non-refundable deposit, a Variable Interest Entity (“VIE”) may be created because we are deemed to have provided subordinated financial support that will absorb some or all of an entity’s expected losses if they occur. If we are the primary beneficiary of the VIE, we will consolidate the VIE and reflect such assets and liabilities as Consolidated real estate not owned within our real estate inventory balance in the unaudited Condensed Consolidated Balance Sheets.

Unconsolidated Joint Ventures — We use the equity method of accounting for entities over which we exercise significant influence but do not have a controlling interest over the operating and financial policies of the investee. For unconsolidated entities in which we function as the managing member, we have evaluated the rights held by our joint venture partners and determined that the partners have substantive participating rights that preclude the presumption of control. Our share of net earnings or losses is included in Net income/loss from unconsolidated entities when earned and distributions are credited against our investment in the joint venture when received. These joint ventures are recorded in Investments in unconsolidated entities on the unaudited Condensed Consolidated Balance Sheets.

We evaluate our investments in unconsolidated entities for indicators of impairment.impairment semi-annually. 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, if any, is the excess of the investment’sinvestment'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, our intent and ability for us to recover our investment in the unconsolidated entity, financial condition and long-term prospects of the unconsolidated 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 believeswe believe that the decline in the fair value of the investment is temporary, then no impairment is recorded. We did not record anyrecorded no material impairment charges related to the investments in unconsolidated entities for the three and nine months ended September 30, 20172022 and 2021.

Revenue Recognition — We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). The standard's core principle requires an entity to recognize revenue when it transfers promised goods or 2016.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.


Revenue RecognitionHome and land closings revenue
HomeUnder Topic 606, the following steps are applied to determine the proper home closings revenue net — Homeand land closings revenue recognition: (1) we identify the contract(s) with our customer; (2) we identify the performance obligations in the contract; (3) we determine the transaction price; (4) we allocate the transaction price to the performance obligations in the contract; and (5) we recognize revenue when (or as) we satisfy the performance obligation. For our home sales transactions, we have one contract, with one performance obligation, with each customer to build and deliver the home purchased (or develop and deliver land). Based on the application of the five steps, the following summarizes the timing and manner of home and land sales revenue:
•Revenue from closings of residential real estate is recorded usingrecognized when closings have occurred, the completed-contract methodbuyer has made the required minimum down payment, obtained necessary financing, the risks and rewards of accounting at the time each home is delivered, title and possessionownership are transferred to the buyer, and we have no significant continuing involvement with the home, riskproperty, which is generally upon the close of loss has transferred, the buyer has demonstrated sufficient investment in the property, and the receivable, if any, from the homeowner or escrow agentescrow. Revenue 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 shownreported net of discounts. We also receive rebates from certain vendorsany discounts and these rebates are accounted for as a reduction to cost of home closings.incentives.       

Land closings revenue — •Revenue from land sales is recognized when a significant down payment is received, title passes and collectability of the receivable, if any, is transferredreasonably assured, and we have no continuing involvement with the property, which is generally upon the close of escrow.

Amenity and other revenue
We own and operate certain amenities such as golf courses, club houses, and fitness centers, which require us to provide club members with access to the buyer, therefacilities in exchange for the payment of club dues. We collect club dues and other fees from the club members, which are invoiced on a monthly basis. Revenue from our golf club operations is no significant continuing involvement,also included in amenity and
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other revenue. Amenity and other revenue also includes revenue from 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.sale of assets which include multi-use properties as part of our Urban Form operations.



Financial services revenue
Mortgage operations revenue —and hedging activity related to financial services are not within the scope of Topic 606. Loan origination fees (including title fees, points, and closing costs) are recognized at the time the related real estate transactions are completed, which is 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,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 operationsFinancial services revenue/expenses is theare realized and unrealized gains and losslosses from hedging instruments.


Recently Issued Accounting Pronouncements — In January 2017,March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles - GoodwillAccounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients for applying U.S. GAAP to contracts affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and Other (Topic 350): Simplifyingentities may elect to apply the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 fromamendments prospectively through December 31, 2022. The use of LIBOR is primarily limited to our financial services mortgage warehouse facilities and our Revolving Credit Facilities. Our warehouse facilities have been modified to directly replace the goodwill impairment test. Thisreference rate and did not change will allow an entitythe amount or timing of contractual cash flows. As such, we have elected the use of the practical expedient and treated such modification as a continuation of the debt agreement. Our Revolving Credit Facilities provide the option to avoid calculatingcontinue the implied fair valueuse of goodwill by assigning the fair value of a reporting unit to all ofLIBOR until 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 do not believe theexpiration. The adoption of ASU 2017-04 will have2020-04 has not had a material impact on our condensed consolidated financial statements and disclosures.unaudited Condensed Consolidated Financial Statements.


In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"). 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. As ASU 2017-01 is not retroactive, we do not believe such guidance will have a significant impact on our condensed consolidated financial statements and disclosures. Once adopted, we will evaluate the impact ASU 2017-01 will have on our condensed consolidated financial statements and disclosures in the event of future acquisitions.
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 (Topic 606) (“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 do not believe the adoption of this pronouncement will have a material impact on our condensed consolidated financial statements and disclosures. We will have new disclosures as required by the new standard. We believe the guidance relating to the cost to obtain a contract component of the new standard will have an impact on our condensed consolidated financial statements and disclosures. We also believe the adoption of this pronouncement will not materially affect our post-adoption revenue recognition since we have limited circumstances where we have separate performance obligations within our contracts.


3. 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 has completed 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)Acadia Homes
Acquisition DateJanuary 8, 2016
Assets acquired 
Real estate inventory$76,152
Land deposits984
Prepaid expenses and other assets816
Property and equipment204
Goodwill (1)
8,500
Total assets$86,656
  
Less liabilities assumed 
Accrued expenses and other liabilities$2,562
Customer deposits463
Net assets acquired$83,631
(1)Goodwill is fully deductible for tax purposes. The goodwill was allocated to our East homebuilding segment.


4. 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 dilutive 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):

 Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Numerator:
Net income available to TMHC$309,779 $168,134 $777,469 $390,302 
Denominator:
Weighted average shares – basic112,701 124,378 117,242 127,217 
Restricted stock units629 796 659 833 
Stock Options450 596 537 756 
Warrants— — — 237 
Weighted average shares – diluted113,780 125,770 118,438 129,043 
Earnings per common share – basic:
Net income available to Taylor Morrison Home Corporation$2.75 $1.35 $6.63 $3.07 
Earnings per common share – diluted:
Net income available to Taylor Morrison Home Corporation$2.72 $1.34 $6.56 $3.02 

  
Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2017 2016 2017 2016
Numerator:        
Net income available to TMHC – basic $32,876
 $14,837
 $68,789
 $33,335
Net income attributable to non-controlling interest – Principal Equityholders 21,390
 43,471
 76,810
 96,261
Loss fully attributable to public holding company 136
 19
 288
 191
Net income – diluted $54,402
 $58,327
 $145,887
 $129,787
Denominator:        
Weighted average shares – basic (Class A) 72,471
 30,427
 56,791
 31,300
Weighted average shares – Principal Equityholders’ non-controlling interest (Class B) 47,253
 89,053
 62,842
 89,089
Restricted stock units 1,121
 522
 1,026
 463
Stock Options 338
 101
 332
 18
Weighted average shares – diluted 121,183
 120,103
 120,991
 120,870
Earnings per common share – basic:        
Net income available to Taylor Morrison Home Corporation $0.45
 $0.49
 $1.21
 $1.07
Earnings per common share – diluted:        
Net income available to Taylor Morrison Home Corporation $0.45
 $0.49
 $1.21
 $1.07
We excluded a totalThe above calculations of weighted average of 1,685,938shares exclude 1,560,934 and 1,602,509 outstanding1,470,941 anti-dilutive stock options and unvested restricted stock units (“RSUs”) and 1,926,836 and 1,578,969 outstanding stock options and unvested RSUs from the calculation of earnings per share for the three and nine months ended September 30, 20172022, respectively, and 2016,1,218,781 and 1,063,586 anti-dilutive stock options and unvested RSUs for the three and nine months ended September 30, 2021, respectively.
The shares

10
Table 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.Contents
5.4. REAL ESTATE INVENTORY AND LAND DEPOSITS
Inventory consists of the following (in thousands):
As of
September 30,
2022		December 31, 2021
Real estate developed and under development$3,787,988 $3,895,681 
Real estate held for development or held for sale (1)
44,177 70,305 
Operating communities (2)
1,881,718 1,309,551 
Capitalized interest190,461 168,670 
Total owned inventory5,904,344 5,444,207 
Consolidated real estate not owned54,733 55,314 
Total real estate inventory$5,959,077 $5,499,521 
  As of
  September 30,
2017		 December 31, 2016
Real estate developed and under development $2,171,670
 $2,074,651
Real estate held for development or held for sale (1)
 143,585
 183,638
Operating communities (2)
 825,946
 650,036
Capitalized interest 99,463
 102,642
Total owned inventory 3,240,664
 3,010,967
Real estate not owned under option agreements 3,107
 6,252
Total real estate inventory $3,243,771
 $3,017,219
(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 consist of all vertical construction costs relating to homes in progress and completed homes for all active production of inventory.homes.



The development status of our land inventory is as follows (dollars in thousands):
 
  As of
  September 30, 2017 December 31, 2016
  Owned Lots 
Book Value of Land
and Development
 Owned Lots 
Book Value of Land
and Development
Raw 7,922
 $349,467
 7,142
 $403,902
Partially developed 5,526
 526,904
 8,037
 501,496
Finished 12,828
 1,426,683
 11,318
 1,336,709
Long-term strategic assets 893
 12,201
 1,489
 16,182
Total 27,169
 $2,315,255
 27,986
 $2,258,289
As of
September 30, 2022December 31, 2021
 Owned LotsBook Value of Land
and Development		Owned LotsBook Value of Land
and Development
Homebuilding owned lots
Undeveloped15,238 $517,929 17,671 $636,385 
Under development11,345 1,051,698 11,446 964,353 
Finished19,874 2,257,495 18,896 2,266,309 
Total homebuilding owned lots46,457 3,827,122 48,013 3,867,047 
Other assets(1)
— 5,043 5,298 98,939 
Total owned lots46,457 $3,832,165 53,311 $3,965,986 

Land Deposits — We provide deposits related to(1)The remaining book value of land options and land purchase contracts, which are capitalized when paid and classifieddevelopment as land deposits until the associated property is purchased.

As of September 30, 2017 and2022 relates to parcels of commercial assets which are. excluded from the owned lots presented in the table.

The homebuilding owned lots presented above as of December 31 2016, we had2021 have been recast as a result of an operational change in classification in the rightcurrent period. Undeveloped lots are those where no phase specific development work has commenced. Under development lots include land where phase specific development has commenced. Finished lots are fully developed for which vertical construction can commence. Our current classification allows for multi-phase or master planned communities to purchase 7,049be presented in more than one lot status based on their development compared to our prior process which grouped all phases of a multi-phase or master planned community into one category based on the phase that was most developed. We believe this operational change provides better transparency into lot status and 7,583 lots underthe book value of such lots.

We have land option purchase contracts, respectively, for an aggregate purchase price of $520.8 millionland banking arrangements and $542.6 million as of September 30, 2017 and December 31, 2016, respectively.other controlled lot agreements. We do not have title to the properties, and the property owner and its creditors generally only have no recourse against us in the Company. Asform of September 30, 2017retaining any non-refundable deposits. We are also not legally obligated to purchase the balance of the lots. Deposits related to these lots are capitalized when paid and December 31, 2016,classified as Land deposits until the associated property is purchased. The table below presents a summary of our controlled lots for the following periods (dollars in thousands):

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As of
September 30, 2022December 31, 2021
Controlled LotsPurchase Price
Land Deposit (1)
Controlled LotsPurchase Price
Land Deposit (1)
Homebuilding controlled lots
Land option purchase contracts7,193 $474,383 $57,919 8,360 $507,161 $57,554 
Land banking arrangements6,982 1,037,293 154,502 5,731 749,813 117,721 
Other controlled lots19,520 1,197,006 64,618 14,671 1,338,284 38,505 
Total controlled lots33,695 $2,708,682 $277,039 28,762 $2,595,258 $213,780 
(1) Land deposits are non-refundable and represent exposure to loss related to our option contracts with third parties, and unconsolidated entities, consistand land banking arrangements.. In addition, at September 30, 2022 and December 31, 2021 we had refundable deposits of non-refundable option deposits totaling $50.9$13.3 million and $37.2$15.7 million respectively, in land deposits related to land options and land purchase contracts.respectively.



Capitalized Interest — Interest capitalized, incurred and amortized is as follows (in thousands):

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Interest capitalized - beginning of period$185,364 $180,520 $168,670 $163,780 
Interest incurred and capitalized(1)
38,871 37,991 119,415 116,126 
Interest amortized to cost of home closings(33,774)(37,951)(97,624)(99,346)
Interest capitalized - end of period$190,461 $180,560 $190,461 $180,560 
(1) Excludes Interest expense, net on the unaudited Condensed Consolidated Statement of Operations as such amounts are not capitalizable.
  Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Interest capitalized - beginning of period $100,490
 $111,063
 $102,642
 $105,148
Interest incurred 20,762
 21,851
 62,187
 66,296
Interest amortized to cost of home closings (21,789) (21,502) (65,366) (60,032)
Interest capitalized - end of period $99,463
 $111,412
 $99,463
 $111,412

6.5. INVESTMENTS IN CONSOLIDATED AND UNCONSOLIDATED ENTITIES
Unconsolidated Entities
We have investments in a number of joint ventures with related and unrelated third parties, with ownership interests up to 50.0%.parties. These entities are generally involved in real estate development, homebuilding, andBuild-to-Rent, and/or mortgage lending activities. SomeThe primary activity of thesethe real estate development joint ventures develop land for the sole useis development and sale of thelots to joint venture participants, including us, and others develop land for sale to the joint venture participants and topartners and/or 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.


During the three and nine months ended September 30, 2022, we transferred land at fair value as part of an initial investment in existing unconsolidated joint ventures . In accordance with ASC 606 this was considered a transfer as we have no continuing involvement and the joint venture obtained title, physical possession, maintains risks and rewards of the property and has accepted the property. Included in Other expense/(income), net on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 is a gain of $0.8 million and $14.5 million, respectively, related to land transfers and represents the difference between the fair value and carrying value of the land at the time of contribution.

Summarized, unaudited combined financial information of unconsolidated entities that are accounted for by the equity method isare as follows (in thousands):

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 As ofAs of
 September 30,
2017		 December 31,
2016		September 30,
2022		December 31,
2021
Assets:    Assets:
Real estate inventory $736,746
 $614,441
Real estate inventory$717,667 $414,687 
Other assets 122,036
 171,216
Other assets132,990 118,990 
Total assets $858,782
 $785,657
Total assets$850,657 $533,677 
Liabilities and owners’ equity:    Liabilities and owners’ equity:
Debt $298,347
 $277,934
Debt$137,386 $167,842 
Other liabilities 25,585
 22,603
Other liabilities31,961 16,245 
Total liabilities 323,932
 300,537
Total liabilities169,347 184,087 
Owners’ equity:    Owners’ equity:
TMHC 184,817
 157,909
TMHC306,081 171,406 
Others 350,033
 327,211
Others375,229 178,184 
Total owners’ equity 534,850
 485,120
Total owners’ equity681,310 349,590 
Total liabilities and owners’ equity $858,782
 $785,657
Total liabilities and owners’ equity$850,657 $533,677 


 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Revenues$25,495 $21,833 $150,062 $101,458 
Costs and expenses(27,310)(16,647)(145,238)(73,705)
(Loss)/income of unconsolidated entities$(1,815)$5,186 $4,824 $27,753 
TMHC’s share in (loss)/income of unconsolidated entities$(1,180)$1,482 $(2,986)$9,269 
Distributions to TMHC from unconsolidated entities$10,006 $2,945 $100,835 $23,287 

Consolidated Entities
We have several joint ventures for the purpose of real estate development and homebuilding activities, which we have determined to be VIEs. As the managing member, we oversee the daily operations and have the power to direct the activities of the VIEs, or joint ventures. For this specific subset of joint ventures, based upon the allocation of income and loss per the applicable joint venture agreements and certain performance guarantees, we have potentially significant exposure to the risks and rewards of the joint ventures. Therefore, we are the primary beneficiary of these joint venture VIEs, and these entities are consolidated.

As of September 30, 2022, the assets of the consolidated joint ventures totaled $273.0 million, of which $35.3 million was cash and cash equivalents, $62.6 million was owned inventory and $125.3 million was fixed assets. The fixed asset balance is held for sale as of September 30, 2022. As of December 31, 2021, the assets of the consolidated joint ventures totaled $291.8 million, of which $22.3 million was cash and cash equivalents, $147.6 million was owned inventory and $74.3 million was fixed assets. The liabilities of the consolidated joint ventures totaled $159.2 million and $165.1 million as of September 30, 2022 and December 31, 2021, respectively, and were primarily comprised of notes payable, accounts payable and accrued liabilities.

  Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Revenues $60,020
 $45,219
 $147,273
 $94,881
Costs and expenses (47,505) (38,618) (118,546) (78,838)
Income of unconsolidated entities $12,515
 $6,601
 $28,727
 $16,043
TMHC’s share in income of unconsolidated entities $2,787
 $1,646
 $6,943
 $4,734
Distributions from unconsolidated entities $2,098
 $2,755
 $8,889
 $6,084


7.6. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consist of the following (in thousands):


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 As of
September 30, 2017		 As of
December 31, 2016		As of
September 30, 2022		As of
December 31, 2021
Real estate development costs to complete $9,597
 $15,156
Real estate development costs to complete$42,384 $49,833 
Compensation and employee benefits 53,065
 63,802
Compensation and employee benefits113,877 166,272 
Self-insurance and warranty reserves 51,536
 50,550
Self-insurance and warranty reserves139,991 141,839 
Interest payable 24,454
 17,233
Interest payable35,112 48,551 
Property and sales taxes payable 11,486
 17,231
Property and sales taxes payable31,648 29,384 
Other accruals 40,246
 45,230
Other accruals93,620 89,330 
Total accrued expenses and other liabilities $190,384
 $209,202
Total accrued expenses and other liabilities$456,632 $525,209 


Self-Insurance and Warranty Reserves – We accrue for the expected costs associated with theour limited one year warranty, deductibles and self-insured amounts under our various insurance policies within Beneva Indemnity Company ("Beneva"(“Beneva”), a wholly owned subsidiary. A summary of the changes in our reserves are as follows (in thousands):

 Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Reserve - beginning of period$137,491 $116,121 $141,839 $118,116 
Additions to reserves2,514 19,459 34,917 50,244 
Cost of claims incurred(3,541)(19,313)(43,743)(54,245)
Changes in estimates to pre-existing reserves3,527 279 6,978 2,431 
Reserve - end of period$139,991 $116,546 $139,991 $116,546 


14
  Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Reserve - beginning of period $54,084
 $44,342
 $50,550
 $43,098
Additions to reserves 6,403
 8,902
 17,446
 19,685
Costs and claims incurred (8,203) (5,173) (18,131) (17,720)
Change in estimates to existing reserves (748) (1,590) 1,671
 1,418
Reserve - end of period $51,536
 $46,481
 $51,536
 $46,481
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8.7. DEBT
Total debt consists of the following (in thousands):
As of
September 30, 2022December 31, 2021
PrincipalUnamortized Debt Issuance (Costs)/PremiumCarrying ValuePrincipalUnamortized Debt Issuance (Costs)/PremiumCarrying Value
5.875% Senior Notes due 2023(1)
$350,000 $(307)$349,693 $350,000 $(733)$349,267 
5.625% Senior Notes due 2024350,000 (763)349,237 350,000 (1,166)348,834 
5.875% Senior Notes due 2027500,000 (3,655)496,345 500,000 (4,243)495,757 
6.625% Senior Notes due 202735,040 1,789 36,829 300,000 17,718 317,718 
5.75% Senior Notes due 2028450,000 (3,341)446,659 450,000 (3,814)446,186 
5.125% Senior Notes due 2030500,000 (4,965)495,035 500,000 (5,440)494,560 
Senior Notes subtotal$2,185,040 $(11,242)$2,173,798 $2,450,000 $2,322 $2,452,322 
Loans payable and other borrowings409,791 — 409,791 404,386 — 404,386 
$1 Billion Revolving Credit Facility(2)
— — — — — — 
$100 Million Revolving Credit Facility(2)
— — — 31,529 — 31,529 
Mortgage warehouse borrowings146,335 — 146,335 413,887 — 413,887 
Total debt$2,741,166 $(11,242)$2,729,924 $3,299,802 $2,322 $3,302,124 
  As of
  September 30, 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
 $4,192
 $545,808
 $550,000
 $5,089
 $544,911
5.875% Senior Notes due 2023, unsecured 350,000
 3,143
 346,857
 350,000
 3,569
 346,431
5.625% Senior Notes due 2024, unsecured 350,000
 3,454
 346,546
 350,000
 3,858
 346,142
Senior Notes subtotal 1,250,000
 10,789
 1,239,211
 1,250,000
 12,516
 1,237,484
Loans payable and other borrowings 161,798
 —
 161,798
 150,485
 —
 150,485
Revolving Credit Facility —
 —
 —
 —
 —
 —
Mortgage warehouse borrowings 61,292
 —
 61,292
 198,564
 —
 198,564
Total Senior Notes and bank financing $1,473,090
 $10,789
 $1,462,301
 $1,599,049
 $12,516
 $1,586,533
(1)As of September 30, 2022, notice of full redemption for the entire outstanding principal amount of the notes was issued. The full notice of redemption states that the entire outstanding principal amount of the 2023 Notes will be redeemed on October 31, 2022 at a redemption price equal to 100.000% of the aggregate principal amount of the 2023 Notes to be redeemed plus the applicable premium (as defined in the indenture governing the 2023 Notes) and accrued and unpaid interest through the redemption date.

(2)The $1 Billion Revolving Credit Facility Agreement together with the $100 Million Revolving Credit Facility Agreement, the “Revolving Credit Facilities”
2021
Debt Instruments
Excluding the debt instruments discussed below, the terms governing all other debt instruments listed in the table above have not substantially changed from the year ended December 31, 2021. For information regarding such instruments, refer to Note 8 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. As of September 30, 2022, we were in compliance with all of the covenants in the debt instruments listed in the table above.

6.625% Senior Notes due 2027
On April 16, 2013,
Following our exchange offer in the first quarter of 2020 (the “Exchange Offer”), whereby Taylor Morrison Communities, Inc (“TM Communities”) offered to exchange any and all outstanding senior notes issued by William Lyon Homes (“WLH”), we issued $550.0had $290.4 million aggregate principal amount of 5.25%6.625% Senior Notes due 20212027 issued by TM Communities (the “2021“2027 6.625% TM Communities Notes”) and $9.6 million aggregate principal amount of 6.625% Senior Notes due 2027 issued by WLH (the “2027 6.625% WLH Notes” and together with the 2027 6.625% TM Communities Notes, the “2027 6.625% Senior Notes”).

The 2021 Senior2027 6.625% TM Communities Notes mature on April 15, 2021. The 2021 Senior Notesare obligations of TM Communities and are guaranteed by TMM Holdings,Taylor Morrison Home III Corporation, Taylor Morrison Holdings, Inc., Taylor Morrison Communities II, Inc. and their homebuilding subsidiaries (collectively, the “Guarantors”), which are.

In connection with the consummation of the Exchange Offer, WLH entered into a supplemental indenture to eliminate substantially 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 forcovenants in 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 Senior2027 6.625% WLH Notes, contains customary events of default. If we do not applyincluding the net cash proceeds of certain asset sales within specified deadlines, we will be requiredrequirements to offer to repurchasepurchase such notes upon a change of control, and to eliminate certain other restrictive provisions and events that constitute an “Event of Default” in such indenture.

On June 13, 2022, TM Communities announced a cash tender offer to purchase any and all of the 2021 Senior$290.4 million outstanding aggregate principal amount of the 2027 6.625% TM Communities Notes (the “Tender Offer”), which expired July 12, 2022. As of June 30, 2022, TM Communities had purchased $264.1 million of the 2027 6.625% TM Communities Notes pursuant to the Tender Offer using cash on hand and borrowings on our $1 Billion Revolving Credit Facility at par (plusa price equal to 100% of the principal amount, plus accrued and unpaid interest) with such proceeds. We are also requiredinterest up to, offer to repurchasebut excluding, the 2021 Seniorsettlement date. As a result of the Tender Offer, we recorded a total net gain on extinguishment of debt of approximately $13.5 million on the unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022. During the three months ended September 30, 2022,
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TM Communities repurchased an additional $0.8 million of the 2027 6.625% TM Communities Notes at a price equal to 101%97% of theirthe principal amount, resulting in a total of $265.0 million in aggregate principal amount of outstanding 2027 6.625% TM Communities Notes being repurchased pursuant to the Tender Offer.

In connection with the Tender Offer, TM Communities also solicited consents from holders of the 2027 6.625% TM Communities Notes to amend the indenture governing such notes to, among other things, eliminate substantially all of the restrictive covenants of the indenture (the “Proposed Amendments”). As of June 27, 2022, TM Communities had received the requisite consents to effect the Proposed Amendments and, as a result, a supplemental indenture was executed to effect the Proposed Amendments, which became effective on June 29, 2022.

The remaining 2027 6.625% Senior Notes mature on July 15, 2027. On or after July 15, 2022, the remaining 2027 6.625% Senior Notes are redeemable at a price equal to 103.313% of principal (plus accrued and unpaid interest) upon certain change of control events.

The 2021. On or after July 15, 2023, the 2027 6.625% Senior Notes are redeemable at scheduled redemption prices, currently at 102.625%,a price equal to 102.208% of their principal amount (plus accrued and unpaid interest).

There are no financial maintenance covenants for On or after July 31, 2024, 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 2023 Senior Notes mature on April 15, 2023. The 20232027 6.625% Senior Notes are guaranteed byredeemable at a price equal to a 101.104% of principal (plus accrued and unpaid interest). On or after July 15, 2025, 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 2023remaining 2027 6.625% 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 parof principal (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 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.

Billion Revolving Credit Facility
On September 9, 2022, we entered into an agreement to exercise the accordion feature under our existing Amended and Restated Credit Agreement (the “Credit Agreement”) increasing the aggregate commitments from $800.0 million to $1.0 billion. The commitments established have the same terms and conditions as the existing commitments under the Credit Agreement.

Our $500.0 million$1 Billion Revolving Credit Facility has a maturity date of March 11, 2027. We had no outstanding borrowings under our $1Billion Revolving Credit Facility matures on April 12, 2019. Theas of September 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, we had $3.8 million and $1.1 million, respectively, of unamortized debt issuance costs relating to our $1 Billion Revolving Credit Facility, is guaranteed bywhich are included in Prepaid expenses and other assets, net, on the same Guarantors that guaranteeunaudited Condensed Consolidated Balance Sheets. As of September 30, 2022 and December 31, 2021, we had $61.2 million and $58.7 million, respectively, of utilized letters of credit, resulting in $938.8 million and $741.3 million, respectively, of availability under the 2021, 2023 and 2024 Senior Notes.$1 Billion Revolving Credit Facility.

The $1 Billion 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, currently of at least $1.6$2.8 billion. The financial covenants would be in effect for any fiscal quarter during which any (a) loans under the $1 Billion 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 $1 Billion Revolving Credit Facility in an aggregate amount greater than $40.0 million or unreimbursed letters of credit issued under the $1 Billion 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 $1 Billion 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 $1 Billion Revolving Credit Facility contains certain restrictive covenants including limitations on incurrence of liens, the payment of 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 $1 Billion 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 September 30, 2017,2022, we were in compliance with all of the covenants under the $1 Billion Revolving Credit Facility.




Mortgage Warehouse Borrowings
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The following is a summary of our mortgage warehouse borrowings (in thousands):


  As of September 30, 2017
Facility Amount Drawn Facility Amount Interest Rate Expiration Date 
Collateral (1)
Flagstar $2,703
 $20,000
 LIBOR + 2.5% 30 days written notice Mortgage Loans
Comerica 23,290
 50,000
 LIBOR + 2.25% November 16, 2017 Mortgage Loans
J.P. Morgan 35,299
 100,000
 LIBOR + 2.375% September 26, 2018 Mortgage Loans and Pledged Cash
Total $61,292
 $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
  
 As of September 30, 2022
FacilityAmount
Drawn		Facility
Amount
Interest Rate(1)
Expiration Date
Collateral (2)
Warehouse A$24,612 $60,000 Daily SOFR + 1.70%On DemandMortgage Loans
Warehouse B20,578 75,000 BSBY 1M + 1.65%On DemandMortgage Loans
Warehouse C37,671 75,000 Term SOFR + 1.65%On DemandMortgage Loans and Restricted Cash
Warehouse D26,177 70,000 Daily SOFR + 1.50%September 6, 2023Mortgage Loans
Warehouse E37,297 70,000 Term SOFR + 1.60%On DemandMortgage Loans
Total$146,335 $350,000 
 As of December 31, 2021
FacilityAmount DrawnFacility Amount
Interest Rate(3)
Expiration Date
Collateral (2)
Warehouse A$12 $10,000 LIBOR + 1.75%On DemandMortgage Loans
Warehouse B86,409 150,000 LIBOR + 1.75%On DemandMortgage Loans
Warehouse C116,601 250,000 LIBOR + 2.05%On DemandMortgage Loans and Restricted Cash
Warehouse D105,065 150,000 LIBOR + 1.65%November 20, 2022Mortgage Loans
Warehouse E105,800 200,000 LIBOR + 1.50%On DemandMortgage Loans
Total$413,887 $760,000 
(1) As of September 30, 2022, our warehouse borrowings transitioned from LIBOR to the Secured Overnight Financing Rate (SOFR), and the Bloomberg Short-Term Bank Yield Index (BSBY).
(2) The mortgage warehouse borrowings outstanding as of September 30, 20172022 and December 31, 20162021 were collateralized by a) $107.7$161.3 million and $233.2$467.5 million, respectively, of mortgage loans held for sale, which comprisedcomprise the balance of mortgage loans held for sale, and b) approximately $1.3$0.6 million and $1.6$3.5 million, respectively, of cash which are included inis restricted cash in the accompanyingon our unaudited Condensed Consolidated Balance Sheets.

(3) Subject to certain interest rate floors.

Loans Payable and Other Borrowings
Loans payable and other borrowings as of September 30, 20172022 and December 31, 20162021 consist of project-level debt due to various land sellers and seller financing notes from current and prior year acquisitions.financial institutions for specific projects. Project-level debt is generally secured by the land that was acquired and the principal payments generally coincide with corresponding project lot salesclosings or a principal reduction schedule. Loans payable bear interest at rates that ranged from 0% to 8% at each of September 30, 20172022 and December 31, 2016. We impute interest for loans with no stated interest rates.2021.


9.8. 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 and liabilities includes interest rate lock commitments (“IRLCs”) and mortgage backed securities (“MBS”). The fair value of IRLCs is based on the value of the underlying mortgage loan, quoted MBS prices and the
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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 FacilityFacilities 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 usingour Equity Security Investment in a Monte Carlo simulation model under the option pricing method. As the measurement of the contingent considerationpublic company is based primarily on significant inputs not observableupon quoted prices for identical assets in the market, it represents a Level 3 measurement.an active market. There were no changes to or transfers between the levels of the fair value hierarchy for any of our financial instruments as of September 30, 2017,2022, when compared to December 31, 2016.2021.


The carrying value and fair value of our financial instruments are as follows:
  September 30, 2022December 31, 2021
(Dollars in thousands)Level in Fair
Value Hierarchy		Carrying
Value		Estimated
Fair
Value		Carrying
Value		Estimated
Fair
Value
Description:
Mortgage loans held for sale2$161,264 $161,264 $467,534 $467,534 
IRLCs3(12,792)(12,792)2,110 2,110 
MBSs223,832 23,832 (449)(449)
Mortgage warehouse borrowings2146,335 146,335 413,887 413,887 
Loans payable and other borrowings2409,791 409,791 404,386 404,386 
5.875% Senior Notes due 2023 (1)
2349,693 350,476 349,267 365,890 
5.625% Senior Notes due 2024 (1)
2349,237 342,675 348,834 372,750 
5.875% Senior Notes due 2027 (1)
2496,345 465,625 495,757 560,000 
6.625% Senior Notes due 2027 (1)
236,829 33,736 317,718 315,750 
5.75% Senior Notes due 2028(1)
2446,659 394,362 446,186 502,875 
5.125% Senior Notes due 2030(1)
2495,035 403,605 494,560 550,000 
$100 Million Revolving Credit Facility2— — 31,529 31,529 
Equity Security11,210 1,210 6,400 6,400 
    September 30, 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 $107,665
 $107,665
 $233,184
 $233,184
Derivative assets 2 2,037
 2,037
 2,291
 2,291
Mortgage warehouse borrowings 2 61,292
 61,292
 198,564
 198,564
Loans payable and other borrowings 2 161,798
 161,798
 150,485
 150,485
5.25% Senior Notes due 2021 (1)
 2 545,808
 564,465
 544,911
 563,750
5.875% Senior Notes due 2023 (1)
 2 346,857
 371,000
 346,431
 355,250
5.625% Senior Notes due 2024 (1)
 2 346,546
 364,000
 346,142
 353,500
Revolving Credit Facility 2 —
 —
 —
 —
Contingent consideration liability 3 5,358
 5,358
 17,200
 17,200
(1)Carrying value for Senior Notes, as presented, includes unamortized debt issuance costs.costs and premiums. 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 December 31, 2016.

(Dollars in thousands)    
Description:Level in
Fair Value
Hierarchy		  Fair Value at December 31, 2016
Inventories (1)
3  $3,778
(1) During the year ended December 31, 2016, we recorded $3.5 million of impairment charges.

As of September 30, 2017, the fair value for such inventories was not determined as there were no events and circumstances that indicated their carrying value was not recoverable.


10.9. INCOME TAXES

OurThe effective tax rate for the three and nine months ended September 30, 20172022 was 30.7%22.6% and 31.0%23.8%, respectively, compared to 35.1%23.5% and 33.8%23.2%, respectively, for the same periods in 2016, respectively.2021. For both the three and nine months ended September 30, 20172022 and 2016,2021 the effective tax rate differed from the U.S. federal statutory income tax rate primarily due to state income taxes, non-deductible executive compensation, excess tax benefits related to stock-based compensation and special deductions and credits relating to homebuilding activities, uncertain tax positions, and discrete tax adjustments related toactivities.

certain deferred tax assets and liabilities.

At both September 30, 20172022 and December 31, 2016, we had $12.9 million and $7.8 million of cumulative gross2021, there were no unrecognized tax benefits, respectively. All unrecognized tax benefits, if recognized, would affect our effective tax rate. We had $0.9 million and $0.4 million of gross interest and penalties related to unrecognized tax positions accrued as of September 30, 2017 and December 31, 2016, respectively.benefits.


11.10. STOCKHOLDERS’ EQUITY
Capital Stock — Holders

The Company’s authorized capital stock consists 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.

During the nine months ended September 30, 2017, we completed multiple sales of our Class A Common Stock in registered public offerings. We used all of the net proceeds from these public offerings to purchase partnership units in New TMM, our direct subsidiary, along with400,000,000 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 Equityholderscommon stock, par value $0.00001 per share (the “Common Stock”), and Additional paid-in capital on the Condensed Consolidated Balance Sheets to reflect the change in ownership. The aggregate number of partnership units and corresponding50,000,000 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.preferred stock, par value $0.00001 per share.
The following is a summary of the completed sales of our Class A Common Stock in registered public offerings.
(Shares presented in thousands)   
Closing dateNumber of shares Net purchase price per share
February 6, 201711,500
 $18.2875
March 27, 201710,000
 20.7800
May 5, 201710,000
 23.1200
June 27, 201710,000
 23.3000

The components and respective voting power of outstanding TMHC Common Stock including the effects of the secondary offerings at September 30, 2017 are as follows:

  
Shares
Outstanding
 Percentage
Class A Common Stock 72,307,299
 60.5%
Class B Common Stock 47,249,127
 39.5%
Total 119,556,426
 100%

Stock Repurchase Program

On September 18, 2017, ourMay 31, 2022, the Board of Directors authorized an extensiona new stock repurchase program which permits the Company to repurchase up to $500.0 million of the Company's Common Stock until December 31, 2023. The new stock repurchase program through December 31, 2018 and increasedreplaced the amount available for repurchasesCompany’s prior $250.0 million repurchase program, which had been scheduled to expire on June 30, 2024. Repurchases under the new program may occur from time to a maximum total amount of $100.0 million of the Company’s Class A Common Stock intime through open market purchases, privately negotiated transactions or other transactions. The timing, manner, price and amount of any common stock repurchase program is subject torepurchases will be determined by us in our discretion and will depend on a variety of factors, including prevailing market conditions, and other considerations, including our liquidity, the terms
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of our debt instruments, statutorylegal requirements, planned land investment and development spending, acquisition and other investment opportunities and ongoing capital requirements. DuringThe program does not require us to repurchase any specific number of shares of common stock, and the threeprogram may be suspended, extended, modified or discontinued at any time.

The following table summarizes share repurchase activity for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in thousands)2022202120222021
Amount available for repurchase — beginning of period$425,000 $191,659 $230,413 $86,831 
Amount cancelled from expired or unused authorizations— — (75,000)— 
Additional amount authorized for repurchase— — 500,000 250,000 
Amount repurchased(104,999)(91,659)(335,412)(236,831)
Amount available for repurchase — end of period$320,001 $100,000 $320,001 $100,000 

The Company repurchased 4,213,256 and nine months ended

September 30, 2017, we repurchased 195,824 for $4.1 million . During12,940,941 shares under the share repurchase program during the three and nine months ended September 30, 2016, we2022, respectively. The number of shares repurchased 247,366were 3,309,196 and 1,918,999 for $3.8 million8,565,933 during the three and $28.5 million, respectively. As ofnine months ended September 30, 2017, there was $95.9 million available to be used for repurchases.2021, respectively.


12.11. STOCK BASED COMPENSATION
Equity-Based Compensation
In April 2013, we adopted the Taylor Morrison Home Corporation 2013 Omnibus Equity Award Plan (the "Plan"“Plan”). The Plan
was most recently amended and restated in May 2017.2022. The Plan provides for the grant of stock options, RSUsrestricted stock units
(“RSUs”), performance-based restricted stock units (“PRSUs”), and other equity-based awards deliverable in shares of our Class A
Common Stock. As of September 30, 2017,2022, we had an aggregate of 8,989,8605,534,816 shares of Class A Common Stock available for future
grants under the Plan.


The following table provides the outstanding balance of time-based and performance based RSUs and stock options as of September 30, 2022:
Restricted Stock Units
 (time and performance)		Stock Options
UnitsWeighted Average
Grant Date Fair
Value		UnitsWeighted
Average Exercise
Price Per Share
Balance at September 30, 20221,618,601 $27.34 3,397,097 $23.24 

The following table provides information regarding the amount and components of stock-based compensation expense, all of which is included in generalGeneral and administrative expenses in the accompanyingunaudited Condensed Consolidated Statements of Operations (in thousands):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Restricted stock units (1)
$4,215 $3,746 $14,133 $12,108 
Stock options1,118 1,047 3,341 3,020 
Total stock compensation$5,333 $4,793 $17,474 $15,128 
  Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2017 2016 2017 2016
Restricted stock units (1)
 $2,157
 $1,810
 $6,348
 $4,948
Stock options 1,162
 1,056
 3,308
 3,074
New TMM units 58
 176
 571
 937
Total stock compensation $3,377
 $3,042
 $10,227
 $8,959
(1) Includes compensation expense related to time-based RSUs and performance-based RSUs. Outstanding performance-based RSUs reflected in the table above are reported at target level of performance.


At September 30, 20172022 and December 31, 2016,2021, the aggregate unrecognized value of all outstanding stock-based compensation awards was approximately $23.4$32.3 million and $18.8$26.5 million, respectively.

Restricted Stock Units – The following table summarizes the time-based RSU and performance-based RSU activity for the nine months ended September 30, 2017:
  Shares 
Weighted Average
Grant Date Fair
Value
Balance at December 31, 2016 1,358,701
 $13.39
Granted 647,354
 18.06
Vested (78,221) 17.43
Forfeited (53,892) 13.95
Balance at September 30, 2017 1,873,942
 $14.82

During the three and nine months ended September 30, 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 these 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 date the Compensation Committee certifies the applicable level of performance achieved 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 nine months ended September 30, 2017:
  Shares 
Weighted
Average Exercise
Price Per Share
Outstanding at December 31, 2016 2,431,347
 $17.09
Granted 790,651
 19.05
Exercised (265,167) 18.07
Canceled/Forfeited (74,811) 18.01
Outstanding at September 30, 2017 2,882,020
 $17.52
Options exercisable at September 30, 2017 933,259
 $19.63

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 options expire 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 as of September 30, 2017 were as follows:
  
Class B Shares/New
TMM Units
 
Weighted
Average Grant  Date
Fair Value
Balance at December 31, 2016 1,146,357
 $5.58
Exchanges (1)
 (191,333) 5.36
Forfeited (2)
 (1,592) 8.52
Balance at September 30, 2017 (3)
 953,432
 $5.62
(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 September 30, 2017 was 931,462.

13. 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 typically conducted in the normal course of operations and are generally executed at arm’s length, as they are entered into at terms comparable to those entered into with unrelated third parties. For the nine months ended September 30, 2017, we engaged in multiple equity offering transactions with our principal equityholders. Refer to Note 11 - Stockholders' Equity for discussion regarding such transactions. During the nine months ended September 30, 2017, we entered into a contract to purchase 140 home lots in Tustin, California for a total purchase price of $30.0 million from Intracorp Companies, which is owned and controlled by a member of the Board of Directors. For the three and nine months ended September 30, 2016 there were no related-party transactions.

14. ACCUMULATED OTHER COMPREHENSIVE INCOME
The table below provides the components of accumulated other comprehensive income (loss) (“AOCI”) for the periods presented (in thousands). There was no activity in the three months ended September 30, 2017 and 2016, therefore they are not presented.

  Nine Months Ended September 30, 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)
Gross amounts reclassified within accumulated other comprehensive income —
 27,968
 (27,968) —
Balance, end of period $2,061
 $(51,959) $31,909
 $(17,989)

  Nine Months Ended September 30, 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)

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.

15.12. 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 three reporting segments, East, Central, and West, based on similar long-term
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economic characteristics. The activity from our Build-to-Rent and Urban Form operations are included in our Corporate segment. We also have a mortgage and titlefinancial services reporting segment. We have no inter-segment sales as all sales are to external customers.

During the quarter ended 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, all historical periods presented in the segment information have been reclassified to give effect to this segment realignment.


Our reporting segments are as follows:
 
EastAtlanta, Charlotte, Chicago,Jacksonville, Naples, Orlando, Raleigh, Southwest FloridaSarasota, and Tampa
CentralAustin, Dallas, Denver, and Houston (both include a Taylor Morrison division and a Darling Homes division) and Denver
WestBay Area, Las Vegas, Phoenix, Portland, Sacramento, Seattle, and Southern California
Mortgage OperationsFinancial ServicesTaylor Morrison Home Funding, and Inspired Title Services, and Taylor Morrison Insurance Services


Segment information is as follows (in thousands):



 Three Months Ended September 30, 2022
 EastCentralWestFinancial Services
Corporate
and
Unallocated(1)
Total
Total revenue$649,058 $522,846 $831,409 $27,749 $3,582 $2,034,644 
Gross margin176,015 141,076 231,100 7,354 2,395 557,940 
Selling, general and administrative expenses(42,126)(32,589)(39,193)— (33,141)(147,049)
Net (loss)/income from unconsolidated entities— (86)(899)546 (741)(1,180)
Interest and other income/(expense), net(2)
(4,180)(1,325)(4,065)— (563)(10,133)
Gain on extinguishment of debt, net— — — — 71 71 
Income/(loss) before income taxes$129,709 $107,076 $186,943 $7,900 $(31,979)$399,649 
(1) Includes the activity from our Build-To-Rent and Urban Form operations.
(2) Interest and other income/(expense), net includes pre-acquisition write-offs of terminated projects.
 Three Months Ended September 30, 2021
 EastCentralWestFinancial Services
Corporate
and
Unallocated (1)
Total
Total revenue$571,879 $401,948 $846,082 $38,046 $796 $1,858,751 
Gross margin129,234 78,292 173,062 11,844 18 392,450 
Selling, general and administrative expenses(43,439)(31,325)(48,627)— (44,219)(167,610)
Net (loss)/income from unconsolidated entities— (15)143 1,354 — 1,482 
Interest and other income/(expense), net (2)
(419)(803)254 — 211 (757)
Income/(loss) before income taxes$85,376 $46,149 $124,832 $13,198 $(43,990)$225,565 
(1) Includes the activity from our Build-To-Rent and Urban Form operations.
(2) Interest and other income/(expense), net includes pre-acquisition write-offs of terminated projects.
Nine Months Ended September 30, 2022
 EastCentralWestFinancial
Services
Corporate
and
Unallocated(1)
Total
Total revenue$1,810,041 $1,351,093 $2,433,893 $98,419 $39,345 $5,732,791 
Gross margin476,241 332,440 635,318 32,327 16,222 1,492,548 
Selling, general and administrative expenses(127,041)(95,527)(125,086)— (122,201)(469,855)
Net income/(loss) from unconsolidated entities— (40)(7,004)4,799 (741)(2,986)
Interest and other income/(expense), net(2)
5,498 (4,262)(9,734)— (605)(9,103)
Gain on extinguishment of debt, net— — — — 13,542 13,542 
Income/(loss) before income taxes$354,698 $232,611 $493,494 $37,126 $(93,783)$1,024,146 
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  Three Months Ended September 30, 2017
  East Central West 
Mortgage
Operations
 
Corporate
and
Unallocated
 Total
Total revenues $312,539
 $256,842
 $321,167
 $17,479
 $—
 $908,027
             
Gross margin 63,188
 47,797
 54,924
 5,409
 —
 171,318
Selling, general and administrative expenses (28,469) (25,108) (19,087) —
 (22,186) (94,850)
Equity in income of unconsolidated entities —
 693
 924
 1,170
 —
 2,787
Interest and other (expense)/income, net (7) (87) 46
 —
 (232) (280)
Income/(loss) before income taxes $34,712
 $23,295
 $36,807
 $6,579
 $(22,418) $78,975
(1) Includes the activity from our Build-To-Rent and Urban Form operations.

(2) Interest and other income/(expense), net includes pre-acquisition write-offs of terminated projects.

 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2021
 East Central West 
Mortgage
Operations
 
Corporate
and
Unallocated
 TotalEastCentralWestFinancial
Services
Corporate
and
Unallocated(1)
Total
Total revenues $288,639
 $273,095
 $277,869
 $13,814
 $—
 $853,417
Total revenueTotal revenue$1,606,603 $1,110,399 $2,158,251 $119,503 $1,087 $4,995,843 
            
Gross margin 70,026
 51,267
 51,624
 5,937
 —
 178,854
Gross margin336,542 212,076 404,093 43,367 (484)995,594 
Selling, general and administrative expenses (26,866) (24,842) (18,507) —
 (18,006) (88,221)Selling, general and administrative expenses(128,402)(92,225)(137,384)— (124,661)(482,672)
Equity in income of unconsolidated entities 132
 331
 319
 864
 —
 1,646
Interest and other (expense)/income, net (1,260) (1,148) 162
 4
 354
 (1,888)
Net (loss)/income from unconsolidated entitiesNet (loss)/income from unconsolidated entities— (85)2,139 7,225 (10)9,269 
Interest and other income/(expense), net (2)
Interest and other income/(expense), net (2)
(328)(1,694)(1,165)— 1,526 (1,661)
Income/(loss) before income taxes $42,032
 $25,608

$33,598

$6,805

$(17,652)
$90,391
Income/(loss) before income taxes$207,812 $118,072 $267,683 $50,592 $(123,629)$520,530 

(1) Includes the activity from our Build-To-Rent and Urban Form operations.
(2) Interest and other income/(expense), net includes pre-acquisition write-offs of terminated projects.
  Nine Months Ended September 30, 2017
  East Central West 
Mortgage
Operations
 
Corporate
and
Unallocated
 Total
Total revenues $896,258
 $730,659
 $911,332
 $47,362
 $—
 $2,585,611
             
Gross margin 185,534
 133,418
 148,991
 16,488
 —
 484,431
Selling, general and administrative expenses (84,975) (72,533) (56,994) —
 (64,503) (279,005)
Equity in income of unconsolidated entities —
 751
 1,526
 4,666
 —
 6,943
Interest and other (expense)/income, net (220) 171
 (146) —
 (319) (514)
Income/(loss) before income taxes $100,339
 $61,807
 $93,377
 $21,154
 $(64,822) $211,855


 As of September 30, 2022
 EastCentralWestFinancial Services
Corporate
and
Unallocated(1)
Total
Real estate inventory and land deposits$2,039,049 $1,538,310 $2,672,058 $— $— $6,249,417 
Investments in unconsolidated entities46,629 92,884 119,752 4,673 42,143 306,081 
Other assets168,229 245,508 610,596 278,890 734,905 2,038,128 
Total assets$2,253,907 $1,876,702 $3,402,406 $283,563 $777,048 $8,593,626 
  Nine Months Ended September 30, 2016
  East Central West 
Mortgage
Operations
 
Corporate
and
Unallocated
 Total
Total revenues $737,550
 $767,825
 $810,736
 $36,951
 $—
 $2,353,062
             
Gross margin 161,437
 138,647
 142,806
 14,357
 —
 457,247
Selling, general and administrative expenses (76,027) (71,727) (54,276) —
 (54,348) (256,378)
Equity in income of unconsolidated entities 440
 110
 1,303
 2,881
 —
 4,734
Interest and other (expense)/income, net (3,821) (3,140) (250) 14
 (1,256) (8,453)
Income/(loss) before income taxes $82,029
 $63,890
 $89,583
 $17,252
 $(55,604) $197,150


  As of September 30, 2017
  East Central West 
Mortgage
Operations
 
Corporate
and
Unallocated
 Total
Real estate inventory and land deposits $1,236,731
 $906,024
 $1,151,895
 $—
 $—
 $3,294,650
Investments in unconsolidated entities 27,593
 32,695
 120,914
 3,615
 —
 184,817
Other assets 58,004
 126,162
 51,277
 153,728
 448,690
 837,861
Total assets $1,322,328
 $1,064,881
 $1,324,086
 $157,343
 $448,690
 $4,317,328
(1) Includes corporate cash and the assets from our Build-To-Rent and Urban Form operations.
 
 As of December 31, 2021
 EastCentralWestFinancial Services
Corporate
and
Unallocated (1)
Total
Real estate inventory and land deposits$1,781,948 $1,282,024 $2,665,084 $— $— $5,729,056 
Investments in unconsolidated entities— 87,600 79,531 4,275 — 171,406 
Other assets196,126 221,906 588,520 559,233 1,261,530 2,827,315 
Total assets$1,978,074 $1,591,530 $3,333,135 $563,508 $1,261,530 $8,727,777 
(1) Includes corporate cash and the assets from our Build-To-Rent and Urban Form operations.

  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

16.13. 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 $317.8 million and $302.8 million$1.2 billion as of September 30, 20172022 and December 31, 2016, respectively.2021. 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 letters of credit or surety bonds as of September 30, 20172022 will be drawn upon.


Purchase Commitments —We are subject to the usual obligations associated with entering into contracts (including land option contracts and land banking arrangements) for the purchase, development, and sale of real estate in the routine conduct of our business. We have a number of land purchase option contracts and land banking agreements, generally through cash deposits, for the right to purchase land or lots at a future point in time with predetermined terms. We do not have title to the property and the creditors of the property owner generally have no recourse. Our obligations with respect to such contracts are generally limited to the forfeiture of the related non-refundable cash deposits and/or letters of credit provided to obtain the options. At September 30, 2022 and December 31, 2021, the aggregate purchase price of these contracts was $1.5 billion and $1.3 billion, respectively.

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
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laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, title and insurance agency operations, safety and other 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 September 30, 20172022 and December 31, 2016,2021, our legal accruals were $2.7$20.5 million and $4.4$21.7 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 predictPredicting the ultimate resolution of the pending matters, the related timing or the eventual loss.loss associated with these matters is inherently difficult. Accordingly, the liability arising from the ultimate resolution of any matter may exceed the estimate reflected in the recorded reserves relating to such matters. 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,

On April 26, 2017, a class action complaint was filed in the Circuit Court of the Tenth Judicial Circuit in and for Polk County, Florida by Norman Gundel, William Mann, and Brenda Taylor against Avatar Properties, Inc. (an acquired AV Homes entity), generally alleging that our collection of club membership fees in connection with the use of one of our amenities in our East homebuilding segment violates various laws relating to homeowner associations and other Florida-specific laws. The class action complaint seeks an injunction to prohibit future collection of club membership fees. On November 2, 2021, the court determined that the club membership fees were improper and that plaintiffs were entitled to $35.0 million in fee reimbursements. We appealed the court’s ruling to the extentSecond District Court of Appeal on November 29, 2021, and as of September 30, 2022, our appeal remains pending. Plaintiffs have agreed to continue to pay club membership fees pending the liability arising fromoutcome of the appeal. We believe, based on our assessment and the opinion of external legal counsel, that the court’s legal interpretation constitutes legal error and the court incorrectly ruled on this matter. In accordance with ASC Topic 450, Contingencies, we evaluated the range of loss and the likelihood of each potential amount of loss within the range. While the ultimate resolutionoutcome and the costs associated with litigation are inherently uncertain and difficult to predict, in evaluating the potential outcomes, we believe the more likely outcome is that we win the appeal. This belief is based on our review of any matter exceeds the estimates reflectedlegal merit of the judgement, as well as the opinion of external legal counsel. Accordingly, in assessing the range of possible loss, we believe the more likely outcome is that we win on appeal and will have zero liability.

Leases — Our leases primarily consist of office space, construction trailers, model home leasebacks, a ground lease, equipment, and storage units. We assess each of these contracts to determine whether the arrangement contains a lease as defined by ASC 842, Leases. Lease obligations were $91.6 million and $96.2 million as of September 30, 2022 and December 31, 2021, respectively. We recorded reserves relating to such matter, we could incur additional charges that could be significant.lease expense of approximately $6.9 million and $20.5 million for the three and nine months ended September 30, 2022, and $4.2 million and $12.2 million for the three and nine months ended September 30, 2021, respectively, within General and administrative expenses on our unaudited Condensed Consolidated Statement of Operations.


17.14. 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 operationsFinancial Services revenue/expenses on the statementunaudited Condensed Consolidated Statements of operations and other comprehensive income.Operations. Unrealized gains and losses on the IRLCs, reflected as derivative assets or liabilities, 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 instrument assets (liabilities) as of the periods presented:


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 As ofAs of
 September 30, 2017 December 31, 2016September 30, 2022December 31, 2021
(Dollars in thousands) Fair Value Notional Amount Fair Value Notional Amount(Dollars in thousands)Fair Value
Notional Amount (1)
Fair Value
Notional Amount (1)
IRLCs $1,752
 $75,739
 $1,987
 $61,655
IRLCs$(12,792)$651,953 $2,110 $158,299 
MBSs 285
 101,000
 304
 97,000
MBSs23,832 596,000 (449)407,000 
Total $2,037
   $2,291
  Total$11,040 $1,661 

(1) The notional amounts in the table above include mandatory and best effort mortgages, that have been locked and approved.

Total commitments to originate loans approximated $119.7$716.6 million and $173.7 million as of September 30, 2017.2022 and December 31, 2021, respectively. This amount represents the commitments to originate loans for both best efforts and mandatory loans that have been locked and approved by underwriting. The notional amountamounts in the table above includes only mandatory and best effort loans that have been locked and approved by underwriting.


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. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon.




23
18. SUBSEQUENT EVENTS

On October 12, 2017 we completed the purchaseTable of 112 acres of land in South Carolina for $10.5 million. The land was purchased from IOTA Doby Bridge, LLC which is managed and partly owned by Gibralter Capital and Asset Managment, LLC, a fund managed by one of our principal equityholders, Oaktree Capital.Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For purposes of this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “the Company,” “we,” “us,” or “our” refer to Taylor Morrison Home Corporation (“TMHC”) and its subsidiaries. The Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements included elsewhere in this quarterly report.


Forward-Looking Statements
This quarterly report includes certain forward-looking statements within the meaning of the federal securities laws regarding, among other things, our or management’s intentions, plans, beliefs, expectations or predictions of future events, which are considered forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business and operations strategy. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “can,” “could,” “might,” “project” or similar expressions. These statements are based upon assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. As you read this quarterly report, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions, including those described under the heading “Risk Factors” in ourthe Company's Annual Report on Form 10-K for the year ended December 31, 2016 (the “Annual2021 (“Annual Report”) filedand in our subsequent filings with the U.S. Securities and Exchange Commission (“SEC”(the “SEC”). Although we believe that these forward-looking statements are based upon reasonable assumptions and currently available information, you should be aware that many factors, including those described under the heading “Risk Factors” in the Annual Report and in our subsequent filings with the SEC, could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements.


Our forward-looking statements made herein are made only as of the date of this quarterly report. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except as required by applicable law.


Business Overview
Our principal business is residential homebuilding and the development of lifestyle communities with operations geographically focused in Arizona, California, Colorado, Florida, Georgia, Illinois,Nevada, North and South Carolina, Oregon, Texas, and Texas. Our Company servesWashington. We serve a wide array of consumer groups from coast to coast, including first time,entry-level, move-up, luxury and 55 plus buyers.resort lifestyle (formerly referred to as 55-plus active lifestyle) buyers, building single and multi-family attached and detached homes. Our homebuilding businesscompany operates under our Taylor Morrison, and Darling Homes Collection by Taylor Morrison, and Esplanade brand names. We operate a “Build-to-Rent” homebuilding business where we serve as a land acquirer, developer, and homebuilder. We also operate Urban Form Development, LLC (“Urban Form”), which primarily develops and constructs multi-use properties consisting of commercial space, retail, and multi-family units. We have operations which provide financial services to customers through our wholly owned mortgage subsidiary, Taylor Morrison Home Funding, INC (“TMHF”), title services through our wholly owned title services subsidiary, Inspired Title Services, LLC (“Inspired Title”), and homeowner’s insurance policies through our insurance agency, Taylor Morrison Insurance Services, LLC (“TMIS”). Our business as of September 30, 2022 is organized into multiple homebuilding operating components, and a mortgage operatingfinancial services component, all of which are managed as four reportable segments: East, Central, West and Mortgage Operations,Financial Services, as follows:

EastAtlanta, Charlotte, Chicago,Jacksonville, Naples, Orlando, Raleigh, Southwest FloridaSarasota, and Tampa
CentralAustin, Dallas, Denver, and Houston (both include a Taylor Morrison division and a Darling Homes division), and Denver
WestBay Area, Las Vegas, Phoenix, Portland, Sacramento, Seattle, and Southern California
Mortgage OperationsFinancial Services
Taylor Morrison Home Funding, (“TMHF”) and Inspired Title Services, LLC (“Inspired Title”)
and Taylor Morrison Insurance Services


DuringCommunity development includes the quarter ended March 31, 2017,acquisition and development of land, which may include obtaining significant planning and entitlement approvals and completing construction of off-site and on-site utilities and infrastructure. We generally operate as community developers, but in some communities we realignedoperate solely as merchant builders, in which case we acquire fully entitled and developed lots. We remain disciplined in our underwriting to acquire land where we see opportunities to drive
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profitable growth over the full cycle, with the land acquisitions we are approving today largely expected to impact deliveries in the next 24 to 48 months.

In our homebuilding operating divisions withinoperations, we either directly, or indirectly through our existing segments based on geographic location and management's long term strategic plans. Assubcontractors, purchase the significant materials necessary to construct a result, all historical periods presented in the segment information have been reclassified to give effect to this segment realignment.

We offer single family attached and detached homes, and revenue is recognized when the homes are completed and delivered to the buyers. Our primary costs are the acquisition of land in various stages of developmenthome such as drywall, cement, steel, lumber, insulation and the construction costsother building materials. While these materials are generally widely available from a variety of the homessources, from time to time we sell.

Our Mortgage Operations reportable segment provides mortgage services to customers through our wholly owned mortgage subsidiary, TMHF, and title services through our wholly owned title services subsidiary, Inspired Title. Revenues from loan origination are recognized at the time the related real estate transactions are completed, usually upon the close of escrow.

Recent Developments
During the third quarter of 2017, our results of operations were affected by two hurricanes, Harvey and Irma, which primarily impacted our divisional operations in Houston and certain areas of Florida. As a result, approximately 40% of our communities were closed for at least a week and land development and construction were delayed by approximately two to three weeks, putting downward pressure on sales and absorption pace for the third quarter. As a result of the storms, we estimate that 130 home closings were pushed out of the third quarter of 2017, reducing our homebuilding revenueexperience material shortages on a period over period comparative basis.
Actual storm remediation costs incurred inlocalized basis which can substantially increase the third quarter of 2017 were immaterial, however, additional costs are expected to be incurred in the fourth quarter and early part of 2018. We believe most of these costs will be covered by insurance. We also expect the storms to have a future impact onprice for such materials and labor, as these resources become constrained, which will add to our construction inventory costs.process can be slowed.
Third Quarter 2017 Highlights:

As of September 30, 2022, we employed approximately 3,000 full-time equivalent persons. Of these, approximately 2,550 were engaged in corporate and homebuilding operations, and the remaining approximately 450 were engaged in financial services.
Key financial results as
Factors Affecting Comparability of and forResults

For the three and nine months ended September 30, 2017, as compared2022, we recognized a $0.8 million and $14.5 million gain on land transfers relating to our unconsolidated joint ventures, respectively, which is included in Other expense/(income), net on the same periodunaudited Condensed Consolidated Statements of Operations. In addition, for the three and nine months ended September 30, 2022, we recognized a $71 thousand and $13.5 million net gain on extinguishment of debt relating to our partial redemption of our 6.625% Senior Notes due 2027 which is included in 2016,Gain on extinguishment of debt, net on our unaudited Condensed Consolidated Statements of Operations. We did not incur such costs for the three or nine months ended September 30, 2021.

Third Quarter 2022 Highlights (all comparisons are as follows:

Home closings were 1,842, a 6% increase fromof the current quarter to the prior year quarter, unless otherwise indicated):
Total•Home closings revenue was $908 million, a 6% increase from the prior year quarterincreased 12 percent to $2.0 billion.
GAAP home•Home closings gross margin inclusiveimproved 630 basis points to 27.5 percent.
•SG&A as a percentage of capitalized interest, was 18.6%home closings revenue improved 210 basis points to 7.4 percent.
Net income•Homebuilding lot supply increased three percent to approximately 80,000 owned and controlled homesites.
•Controlled lots as a percentage of total lot supply increased approximately 600 basis points to 42 percent.
•Repurchased 4.2 million shares outstanding for the quarter was $54 million with diluted earnings per share$105 million.
•Return on equity improved 1,300 basis points to 25.8 percent.



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Table of $0.45Contents
Backlog units at the end of the quarter were 4,359 with a sales value of $2.1 billion, a 13% increase from the prior year quarter






Results of Operations
The following table sets forth our results of operations for the periods presented:


Three Months Ended
September 30,		Nine Months Ended
September 30,
 (Dollars in thousands)
2022202120222021
Statements of Operations Data:
Home closings revenue, net$1,983,775 $1,772,495 $5,511,204 $4,780,304 
Land closings revenue14,225 42,228 66,651 79,174 
Financial services revenue27,749 38,046 98,419 119,503 
Amenity and other revenue8,895 5,982 56,517 16,862 
Total revenue2,034,644 1,858,751 5,732,791 4,995,843 
Cost of home closings1,438,164 1,397,319 4,084,748 3,838,602 
Cost of land closings11,571 36,439 50,139 68,604 
Financial services expenses20,395 26,202 66,092 76,136 
Amenity and other expenses6,574 6,341 39,264 16,907 
Gross margin557,940 392,450 1,492,548 995,594 
Sales, commissions and other marketing costs94,692 97,185 279,950 280,697 
General and administrative expenses52,357 70,425 189,905 201,975 
Net loss/(income) from unconsolidated entities1,180 (1,482)2,986 (9,269)
Interest expense, net4,382 710 13,823 594 
Other expense/(income), net5,751 47 (4,720)1,067 
Gain on extinguishment of debt, net(71)— (13,542)— 
Income before income taxes399,649 225,565 1,024,146 520,530 
Income tax provision90,418 53,098 243,300 120,865 
Net income before allocation to non-controlling interests309,231 172,467 780,846 399,665 
Net loss/(income) attributable to non-controlling interests — joint ventures548 (4,333)(3,377)(9,363)
Net income available to Taylor Morrison Home Corporation$309,779 $168,134 $777,469 $390,302 
Home closings gross margin27.5 %21.2 %25.9 %19.7 %
Sales, commissions and other marketing costs as a percentage of home closings revenue, net4.8 %5.5 %5.1 %5.9 %
General and administrative expenses as a percentage of home closings revenue, net2.6 %4.0 %3.4 %4.2 %

Non-GAAP Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we have provided information in this quarterly report relating to: (i) adjusted net income and adjusted earnings per common share, (ii) adjusted income before income taxes and related margin, (iii) EBITDA and adjusted EBITDA and (iv) net homebuilding debt to capitalization ratio.

Adjusted net income, adjusted earnings per common share and adjusted income before income taxes and related margin are non-GAAP financial measures that reflect the net income/(loss) available to the Company excluding the impact of gains on land transfers and extinguishment of debt, net, and in the case of adjusted net income and adjusted earnings per common share, the tax impact due to such items. EBITDA and Adjusted EBITDA are non-GAAP financial measures that measure performance by adjusting net income before allocation to non-controlling interests to exclude interest expense/(income), net, amortization of capitalized interest, income taxes, depreciation and amortization (EBITDA), non-cash compensation expense, if any, gains on land transfers and extinguishment of debt, net. Net homebuilding debt to capitalization ratio is a non-GAAP financial measure we calculate by dividing (i) total debt, plus unamortized debt issuance cost/(premium), net, and less mortgage warehouse borrowings, net of unrestricted cash and cash equivalents, by (ii) total capitalization (the sum of net homebuilding debt and total stockholders’ equity).

Management uses these non-GAAP financial measures to evaluate our performance on a consolidated basis, as well as the performance of our regions, and to set targets for performance-based compensation. We also use the ratio of net homebuilding
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  Three Months Ended
September 30, 2017		 Nine Months Ended
September 30, 2017
 (Dollars in thousands)
 2017 2016 2017 2016
Statements of Operations Data:        
Home closings revenue, net $886,249
 $812,185
 $2,526,830
 $2,271,154
Land closings revenue 4,299
 27,418
 11,419
 44,957
Mortgage operations revenue 17,479
 13,814
 47,362
 36,951
Total revenues 908,027
 853,417
 2,585,611
 2,353,062
Cost of home closings 721,637
 658,507
 2,062,437
 1,852,724
Cost of land closings 3,002
 8,179
 7,869
 20,497
Mortgage operations expenses 12,070
 7,877
 30,874
 22,594
Gross margin 171,318
 178,854
 484,431
 457,247
Sales, commissions and other marketing costs 61,476
 58,277
 178,609
 165,300
General and administrative expenses 33,374
 29,944
 100,396
 91,078
Equity in income of unconsolidated entities (2,787) (1,646) (6,943) (4,734)
Interest income, net (135) (47) (314) (149)
Other expense, net 415
 1,935
 828
 8,602
Income before income taxes 78,975
 90,391
 211,855
 197,150
Income tax provision 24,282
 31,707
 65,631
 66,698
Net income before allocation to non-controlling interests 54,693
 58,684
 146,224
 130,452
Net income attributable to non-controlling interests – joint ventures (427) (376) (625) (856)
Net income before non-controlling interests – Principal Equityholders 54,266
 58,308
 145,599
 129,596
Net income from continuing operations attributable to non-controlling interests – Principal Equityholders (21,390) (43,471) (76,810) (96,261)
Net income available to Taylor Morrison Home Corporation $32,876
 $14,837
 $68,789
 $33,335
Home closings gross margin 18.6% 18.9% 18.4% 18.4%
Sales, commissions and other marketing costs as a percentage of home closings revenue 6.9% 7.2% 7.1% 7.3%
General and administrative expenses as a percentage of home closings revenue 3.8% 3.7% 4.0% 4.0%
Average sales price per home closed $481
 $468
 $474
 $459
debt to total capitalization as an indicator of overall leverage and to evaluate our performance against other companies in the homebuilding industry. In the future, we may include additional adjustments in the above-described non-GAAP financial measures to the extent we deem them appropriate and useful to management and investors.



We believe that adjusted net income, adjusted earnings per common share, adjusted income before income taxes and related margin, as well as EBITDA and adjusted EBITDA, are useful for investors in order to allow them to evaluate our operations without the effects of various items we do not believe are characteristic of our ongoing operations or performance and also because such metrics assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted EBITDA also provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization, or unusual items. Because we use the ratio of net homebuilding debt to total capitalization to evaluate our performance against other companies in the homebuilding industry, we believe this measure is also relevant and useful to investors for that reason.



These non-GAAP financial measures should be considered in addition to, rather than as a substitute for, the comparable U.S. GAAP financial measures of our operating performance or liquidity. Although other companies in the homebuilding industry may report similar information, their definitions may differ. We urge investors to understand the methods used by other companies to calculate similarly-titled non-GAAP financial measures before comparing their measures to ours.
Adjusted Net Income and Adjusted Earnings Per Common Share
Three Months Ended September 30,
(Dollars in thousands, except per share data)20222021
Net income available to TMHC$309,779 $168,134 
Gain on land transfers(808)— 
Gain on extinguishment of debt, net(71)— 
Tax impact due to above non-GAAP reconciling items205 — 
Adjusted net income$309,105 $168,134 
Basic weighted average number of shares112,701 124,378 
Adjusted earnings per common share - Basic$2.74 $1.35 
Diluted weighted average number of shares113,780 125,770 
Adjusted earnings per common share - Diluted$2.72 $1.34 

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Adjusted Income Before Income Taxes and Related Margin
 Three Months Ended September 30,
(Dollars in thousands)20222021
Income before income taxes$399,649 $225,565 
Gain on land transfers(808)— 
Gain on extinguishment of debt, net(71)— 
Adjusted income before income taxes$398,770 $225,565 
Total revenue$2,034,644 $1,858,751 
Income before income taxes margin19.6 %12.1 %
Adjusted income before income taxes margin19.6 %12.1 %



EBITDA and Adjusted EBITDA Reconciliation
 Three Months Ended September 30,
(Dollars in thousands)20222021
Net income before allocation to non-controlling interests$309,231 $172,467 
Interest expense, net4,382 710 
Amortization of capitalized interest33,774 37,951 
Income tax provision90,418 53,098 
Depreciation and amortization1,484 2,164 
EBITDA$439,289 $266,390 
Non-cash compensation expense5,333 4,793 
Gain on land transfers(808)— 
Gain on extinguishment of debt, net(71)— 
Adjusted EBITDA$443,743 $271,183 
Total revenue$2,034,644 $1,858,751 
Net income before allocation to non-controlling interests as a percentage of total revenue15.2 %9.3 %
EBITDA as a percentage of total revenue21.6 %14.3 %
Adjusted EBITDA as a percentage of total revenue21.8 %14.6 %



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Net Homebuilding Debt to Capitalization Ratio Reconciliation
(Dollars in thousands)As of
September 30, 2022		As of
June 30, 2022		As of
September 30, 2021
Total debt$2,729,924 $2,950,744 $3,221,569 
Plus: unamortized debt issuance cost/(premium), net11,242 11,891 (2,333)
Less: mortgage warehouse borrowings(146,335)(179,555)(235,685)
Total homebuilding debt$2,594,831 $2,783,080 $2,983,551 
Less: cash and cash equivalents(329,244)(378,340)(373,407)
Net homebuilding debt$2,265,587 $2,404,740 $2,610,144 
Total equity4,403,466 4,193,895 3,745,896 
Total capitalization$6,669,053 $6,598,635 $6,356,040 
Net homebuilding debt to capitalization ratio34.0 %36.4 %41.1 %



Three and Nine Months Endednine months ended September 30, 2017 Compared2022 compared to Threethree and Nine Months Endednine months ended September 30, 20162021
Average Active Selling Communities
  Three Months Ended September 30,
  2017 2016 Change
East 130
 132
 (1.5)%
Central 118
 116
 1.7
West 45
 61
 (26.2)
Total 293
 309
 (5.2)%

  Nine Months Ended September 30,
  2017 2016 Change
East 127
 131
 (3.1)%
Central 118
 118
 —
West 51
 63
 (19.0)
Total 296
 312
 (5.1)%

Average active selling communitiesThe results for the three and nine months ended September 30, 20172022 and 2021 were impacted by various macro economic conditions. From the second half of 2020 through the first quarter of 2022, demand for housing increased nationwide. Subsequently, multiple increases in mortgage interest rates beginning in March 2022 have caused buyer apprehension and affordability concerns, resulting in an increase in cancellations. We believe these have impacted us throughout the year, however the multiple increases in interest rates by the Federal Reserve in recent months impacted our net sales orders and cancellations, for the three months ended September 30, 2022 in particular. The overall strong demand for housing in the prior year and first half of 2022 allowed us to utilize pricing strategies that mitigated increases in costs. The average sales price for 2022 net sales orders, backlog, and homes closed all increased compared to the prior year. We continue to experience market-wide supply chain disruptions, trade labor shortages, and high costs related to materials due to inflationary impacts. However, these supply chain delays and labor shortages have extended our build cycle times. To combat this, several markets have shifted to a strategy of selling spec homes, which allows the homes to be further along the cycle time before releasing them to be sold. Operational information related to each period is presented below:

Ending Active Selling Communities
 As of
September 30, 2022		As of
June 30, 2022		Change
East118 117 0.9 %
Central105 104 1.0 
West103 102 1.0 
Total326 323 0.9 %
Net Sales Orders
Three Months Ended September 30,
 
Net Sales Orders (1)
Sales Value (1)
Average Selling Price
(Dollars in thousands)20222021Change20222021Change20222021Change
East1,041 1,279 (18.6)%$640,093 $742,449 (13.8)%$615 $580 6.0 %
Central450921(51.1)267,681 577,477 (53.6)595 627 (5.1)
West5781,172(50.7)372,223 840,963 (55.7)644 718 (10.3)
Total2,069 3,372 (38.6)%$1,279,997 $2,160,889 (40.8)%$619 $641 (3.4)%
(1) Net sales orders and sales value represent the number and dollar value, respectively, of new sales contracts executed with customers, net of cancellations.
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Nine Months Ended September 30,
 
Net Sales Orders (1)
Sales Value (1)
Average Selling Price
(Dollars in thousands)20222021Change20222021Change20222021Change
East3,189 4,358 (26.8)%$1,976,798 $2,334,431 (15.3)%$620 $536 15.7 %
Central1,979 2,843 (30.4)1,294,106 1,661,934 (22.1)654 585 11.8 
West2,509 4,085 (38.6)1,878,886 2,680,460 (29.9)749 656 14.2 
Total7,677 11,286 (32.0)%$5,149,790 $6,676,825 (22.9)%$671 $592 13.3 %

Net sales orders and sales value decreased by 5.2%38.6% and 5.1%40.8%, for the three months ended September 30, 2022, and 32.0% and 22.9%, for the nine months ended September 30, 2022, respectively, when compared to the same periods in the prior year. TheWe believe the decreases were primarily driven by our West region, whichthe result of the change in economic conditions and home buyer apprehensions due to rising mortgage interest rates and inflationary pressures. We experienced higher sales orders resulting inprice appreciation over recent quarters driving an increase in the number of close outs in the three months ended September 30, 2017, compared to the prior year. For the nine months ended September 30, 2017, the decrease in average active selling communities was also due to higher than expected net sales orders in the first and second quarters of 2017, resulting in an increase in community close outs. The timing of new community openings in our East region and higher than expected net sales order pace also led to increased community close-outs in the three and nine months ended September 30, 2017. During the period from October 2016 to September 2017, we closed approximately 70 communities and opened approximately 50 communities throughout the Company.

Net Sales Orders
  Three Months Ended September 30,
  
Net Sales Orders (1) 
 
Sales Value (1)
 Average Selling Price
(Dollars in thousands) 2017 2016 Change 2017 2016 Change 2017 2016 Change
East 777
 795
 (2.3)% $302,795
 $302,363
 0.1 % $390
 $380
 2.6 %
Central 521
 550
 (5.3) 247,084
 261,971
 (5.7) 474
 476
 (0.4)
West 463
 605
 (23.5) 300,815
 354,281
 (15.1) 650
 586
 10.9
Total 1,761
 1,950
 (9.7)% $850,694
 $918,615
 (7.4)% $483
 $471
 2.5 %

  Nine Months Ended September 30,
  
Net Sales Orders (1) 
 
Sales Value (1) 
 Average Selling Price
(Dollars in thousands) 2017 2016 Change 2017 2016 Change 2017 2016 Change
East 2,923
 2,388
 22.4 % $1,132,839
 $919,861
 23.2% $388
 $385
 0.8%
Central 1,826
 1,599
 14.2
 864,797
 753,454
 14.8
 474
 471
 0.6
West 1,813
 1,816
 (0.2) 1,088,661
 1,012,717
 7.5
 600
 558
 7.5
Total 6,562
 5,803
 13.1 % $3,086,297
 $2,686,032
 14.9% $470
 $463
 1.5%
(1) Net sales orders represent the number and dollar value of new sales contracts executed with customers, net of cancellations.

East:
The number of net sales orders decreased by 2.3%, while the sales value of homes remained relatively flat, for the three months ended September 30, 2017 compared to the prior year. The decrease in units for the three months ended September 30, 2017 is

primarily driven by an interruption to the business in our Florida markets as a result of a hurricane that occurred during the period. The number of net sales orders and sales value of homes increased by 22.4% and 23.2%, respectively,price for the nine months ended September 30, 20172022 compared to the prior year period. Our marketssame period in Florida continued to experience favorable demand especially in active adult communities; however, the increase in units and sales value for the nine months ended September 30, 2017 compared to the prior year is primarily driven by other divisions in the East region, particularly in our Atlanta market where demand for first-time homebuyer communities with lower average selling prices remains high.

Central:
The number of sales orders and sales value of homes decreased by 5.3% and 5.7%, respectively, foryear. However, during the three months ended September 30, 20172022 we began offering pricing incentives or discounts in certain markets which caused the overall average selling price to decrease for the quarter compared to the prior year. The decrease in units and sales value for the three months ended September 30, 2017 is primarily driven by an interruption to the business in our Houston market as a result of a hurricane that occurred during the period. The number of sales orders and sales value of homes increased by 14.2% and 14.8%, respectively, for the nine months ended September 30, 2017. A significant portion of the increase in units and sales value for the nine months ended September 30, 2017 reflects the improvementsame quarter in the Houston market from the prior year's soft economic environment. Other markets within this region continue to strengthen their performance and contributed to the overall increase in units and dollars for the segment as well.

West:
The average selling price increased by 10.9% and 7.5%, respectively, for the three and nine months ended September 30, 2017 compared to the prior year. The markets in this region are showing continued strength as evidenced by an increase in sales pace for both the three and nine months ended September 30, 2017. The number of sales orders and sales value of homes decreased by 23.5% and 15.1%, respectively, for the three months ended September 30, 2017 compared to the prior year which is in line with expectations, considering the increased focus on turn times and as result of the increase in the number close outs which limited our product availability. The value of net sales orders increased by 7.5% for the nine months ended September 30, 2017, while the number of homes sold remained relatively flat.


Sales Order Cancellations
Cancellation Rate(1)
 
Cancellation Rate(1)

Three Months Ended September 30,Nine Months Ended September 30,
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016 2022202120222021
East 11.8% 13.5% 10.1% 12.2%East9.2 %5.6 %7.3 %5.5 %
Central 14.4
 12.8
 12.2
 15.4
Central22.5 %7.5 %12.8 %6.7 %
West 11.1
 15.1
 11.6
 13.2
West20.2 %7.4 %12.7 %6.4 %
Total Company 12.4% 13.7% 11.1% 13.4%Total Company15.6 %6.7 %10.6 %6.1 %
(1) Cancellation rate represents the number of canceled sales orders divided by gross sales orders.


Favorable market conditions coupled withThe total company cancellation rate increased demand for new housing has led to lower cancellation rates across all of our regions for the three and nine months ended September 30, 2017.2022 compared to the same periods in the prior year. This increase in cancellations is due to increases in mortgage interest rates, buyer apprehensions, and other macro economic conditions such as inflation.


Sales Order Backlog
 As of September 30,
Sold Homes in Backlog (1)
Sales ValueAverage Selling Price
(Dollars in thousands)20222021Change20222021Change20222021Change
East3,256 3,729 (12.7)%$2,121,673 $2,090,661 1.5 %$652 $561 16.2 %
Central2,489 2,995 (16.9)1,694,111 1,760,401 (3.8)681 588 15.8 
West2,196 3,549 (38.1)1,579,937 2,272,904 (30.5)719 640 12.3 
Total7,941 10,273 (22.7)%$5,395,721 $6,123,966 (11.9)%$679 $596 13.9 %
  As of September 30,
  
Sold Homes in Backlog (1)
 Sales Value Average Selling Price
(Dollars in thousands) 2017 2016 Change 2017 2016 Change 2017 2016 Change
East 1,905
 1,478
 28.9% $774,001
 $608,840
 27.1% $406
 $412
 (1.5)%
Central 1,272
 1,202
 5.8
 653,415
 612,840
 6.6
 514
 510
 0.8
West 1,182
 1,175
 0.6
 697,790
 650,197
 7.3
 590
 553
 6.7
Total 4,359
 3,855
 13.1% $2,125,206
 $1,871,877
 13.5% $488
 $486
 0.4 %
(1) Sales order backlog represents homes under contract for which revenue has not yet been recognized at the end of the period (including homes sold but not yet started). Some of the contracts in our sales order backlog are subject to contingencies including mortgage loan approval and buyers selling their existing homes, which can result in cancellations.



Total sold homes in backlog units and total sales value increaseddecreased by 13.1%22.7% and 13.5%11.9% at September 30, 2017 compared to2022 and September 30, 2016,2021, respectively. The decrease in sold homes in backlog is primarily the result of a decrease in net sales as well as an increase in cancellations. Despite a lower number of sold homes in backlog units and total sales value, is primarilythe average selling price of homes in backlog increased by 13.9% as a result of sales price appreciation over the combinationpast several quarters.


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Table of increased sales orders and average selling price and lower cancellation rates.Contents


Home Closings Revenue
 Three Months Ended September 30,
Homes ClosedHome Closings Revenue, NetAverage Selling Price
(Dollars in thousands)20222021Change20222021Change20222021Change
East1,118 1,167 (4.2)%$638,270 $554,995 15.0 %$571 $476 20.0 %
Central835 764 9.3 522,247 398,762 31.0 625 522 19.7 
West1,097 1,396 (21.4)823,258 818,738 0.6 750 586 28.0 
Total3,050 3,327 (8.3)%$1,983,775 $1,772,495 11.9 %$650 $533 22.0 %
 Three Months Ended September 30, Nine Months Ended September 30,
 Homes Closed Home Closings Revenue, Net Average Selling PriceHomes ClosedHome Closings Revenue, NetAverage Selling Price
(Dollars in thousands) 2017 2016 Change 2017 2016 Change 2017 2016 Change(Dollars in thousands)20222021Change20222021Change20222021Change
East 776
 677
 14.6 % $311,526
 $273,928
 13.7 % $401
 $405
 (1.0)%East3,152 3,464 (9.0)%$1,757,444 $1,564,206 12.4 %$558 $452 23.5 %
Central 531
 548
 (3.1) 253,556
 263,852
 (3.9) 478
 481
 (0.6)Central2,277 2,246 1.4 1,347,828 1,101,681 22.3 592 491 20.6 
West 535
 512
 4.5
 321,167
 274,405
 17.0
 600
 536
 11.9
West3,421 3,706 (7.7)2,405,932 2,114,417 13.8 703 571 23.1 
Total 1,842
 1,737
 6.0 % $886,249
 $812,185
 9.1 % $481
 $468
 2.8 %Total8,850 9,416 (6.0)%$5,511,204 $4,780,304 15.3 %$623 $508 22.6 %


  Nine Months Ended September 30,
  Homes Closed Home Closings Revenue, Net Average Selling Price
(Dollars in thousands) 2017 2016 Change 2017 2016 Change 2017 2016 Change
East 2,238
 1,874
 19.4 % $891,740
 $722,814
 23.4 % $398
 $386
 3.1%
Central 1,512
 1,566
 (3.4) 723,758
 748,712
 (3.3) 479
 478
 0.2
West 1,585
 1,504
 5.4
 911,332
 799,628
 14.0
 575
 532
 8.1
Total 5,335
 4,944
 7.9 % $2,526,830
 $2,271,154
 11.3 % $474
 $459
 3.3%

East:
The number of homes closed increaseddecreased by 14.6%8.3% and 19.4%6.0%, respectively, for the three and nine months ended September 30, 2017 compared to the prior year. Home2022, respectively, while home closings revenue, net increased by 13.7%11.9% and 23.4%15.3%, respectively, for the same comparative periods. Our Florida markets were the primary drivers for both units and dollars as a result of increased net sales during the first half of the year. In addition, other divisions in the East region continued to gain momentum in the number of homes closed for the nine months ended September 30, 2017, compared to the prior year. Certain economic market improvements, as well as a continued favorable homebuyer reception of newer products and newer communities throughout the region, contributed to the increase in net home closings revenue.

Central:
For the three and nine months ended September 30, 2017 we experienced a decrease in both homes closed and home closings revenue, net, partially as a result of the hurricane that occurred during the period in Houston, which pushed some closings to future periods.

West:
The number of homes closed increased by 4.5% and 5.4% for the three and nine months ended September 30, 2017, and2022, respectively, compared to the same periods in the prior year. The decrease in the number of homes closed is primarily due to an increase in cancellations in the current year periods compared to the prior year periods. The increase in home closingclosings revenue, net increased by 17.0% and 14.0%, respectively, for the same comparative periods. The increases are primarily driven by strong sales in our Phoenix division and markets within Northern California which continue to experience strong consumer demand asis a result of increased job growth in those areas.sales price appreciation which caused average selling prices to increase by 22.0% and 22.6% for the three and nine months ended September 30, 2022, respectively.




Land Closings Revenue
Three Months Ended September 30,
(Dollars in thousands)20222021Change
East$5,732 $11,987 $(6,255)
Central599 3,186 (2,587)
West7,894 27,055 (19,161)
Total$14,225 $42,228 $(28,003)
 Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands)

 2017 2016 Change(Dollars in thousands)20222021Change
East $1,013
 $14,711
 $(13,698)East$36,482 $27,643 $8,839 
Central 3,286
 9,243
 (5,957)Central3,265 8,718 (5,453)
West —
 3,464
 (3,464)West26,904 42,813 (15,909)
Total $4,299
 $27,418
 $(23,119)Total$66,651 $79,174 $(12,523)

  Nine Months Ended September 30,
(Dollars in thousands) 2017 2016 Change
East $4,518
 $14,736
 $(10,218)
Central 6,901
 19,113
 (12,212)
West —
 11,108
 (11,108)
Total $11,419
 $44,957
 $(33,538)



We generally purchase land and lots with the intent to build and sell homes. However, in some locations where we act as a
developer, we occasionally purchase land that includes commercially zoned parcels or areas designated for school or
government use, which we typically sell to commercial developers or municipalities, as applicable. We also sell residential lots
or land parcels to manage our land and lot supply on larger tracts of land. As a developer, we may include land sales in our
underwriting strategies in many of our master plan communities where we may mitigate risk, enhance our returns or pursue
opportunities allowing access to new land positions. Land and lot sales occur at various intervals and
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Table of Contents
varying degrees of
profitability. Therefore, the revenue and gross margin from land closings will fluctuate from period to period, depending upon market opportunities and our land management strategy. The land closings revenue in the East for the
market opportunities. Thenine months ended September 30, 2022 was due to the sale of certain commercial assets as well as the sale of residential lots in our Florida market. In the prior year, period included salesthe land closings revenue in the West for the three months ended September 30, 2021 was due to the sale of legacy land that we had held for either appreciation or tax purposes. As of the third quarter of 2016, the tax holding period for certain land assets expired, creating certain tax benefits, thus resultingprojects in our significantOregon market while the land sales in the prior year.


Segment Home Closings Gross Margin
  Three Months Ended September 30,
  East Central West Consolidated
(Dollars in thousands) 2017 2016 2017 2016 2017 2016 2017 2016
Home closings revenue, net $311,526
 $273,928
 $253,556
 $263,852
 $321,167
 $274,405
 $886,249
 $812,185
Cost of home closings 248,455
 216,049
 206,939
 217,526
 266,243
 224,932
 721,637
 658,507
Home closings gross margin 63,071
 57,879
 46,617
 46,326
 54,924
 49,473
 164,612
 153,678
Home closings gross margin % 20.2% 21.1% 18.4% 17.6% 17.1% 18.0% 18.6% 18.9%
                 
  Nine Months Ended September 30,
  East Central West Consolidated
(Dollars in thousands) 2017 2016 2017 2016 2017 2016 2017 2016
Home closings revenue, net $891,740
 $722,814
 $723,758
 $748,712
 $911,332
 $799,628
 $2,526,830
 $2,271,154
Cost of home closings 707,614
 573,493
 592,482
 616,418
 762,341
 662,813
 2,062,437
 1,852,724
Home closings gross margin 184,126
 149,321
 131,276
 132,294
 148,991
 136,815
 464,393
 418,430
Home closings gross margin % 20.6% 20.7% 18.1% 17.7% 16.3% 17.1% 18.4% 18.4%

East:

Home closings gross margin percentage remained flatrevenue for the nine months ended September 30, 2017 compared2021 also includes project sales in our Washington and Arizona markets.

Amenity and Other Revenue
Three Months Ended September 30,
(Dollars in thousands)20222021Change
East$5,056 $4,897 $159 
Central— — — 
West257 289 (32)
Corporate3,582 796 2,786 
Total$8,895 $5,982 $2,913 
Nine Months Ended September 30,
(Dollars in thousands)20222021Change
East$16,115 $14,754 $1,361 
Central— — — 
West1,057 1,021 36 
Corporate39,345 1,087 38,258 
Total$56,517 $16,862 $39,655 

Several of our communities operate amenities such as golf courses, club houses, and fitness centers. We provide club members access to the same periodamenity facilities and other services in 2016exchange for club dues and decreasedfees. Our Corporate region also includes the activity relating to 20.2% from 21.1%our Build-To-Rent and Urban Form operations. The increase in amenity and other revenue in Corporate for the nine months ended September 30, 2022 is due to the sale of an asset relating to our Urban Form operations.

Home Closings Gross Margin
Three Months Ended September 30,
EastCentralWestConsolidated
(Dollars in thousands)20222021202220212022202120222021
Home closings revenue, net$638,270 $554,995 $522,247 $398,762 $823,258 $818,738 $1,983,775 $1,772,495 
Cost of home closings460,137 428,908 381,181 320,783 596,846 647,628 1,438,164 1,397,319 
Home closings gross margin$178,133 $126,087 $141,066 $77,979 $226,412 $171,110 $545,611 $375,176 
Home closings gross margin %27.9 %22.7 %27.0 %19.6 %27.5 %20.9 %27.5 %21.2 %
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Nine Months Ended September 30,
EastCentralWestConsolidated
(Dollars in thousands)20222021202220212022202120222021
Home closings revenue, net$1,757,444 $1,564,206 $1,347,828 $1,101,681 $2,405,932 $2,114,417 $5,511,204 $4,780,304 
Cost of home closings1,287,670 1,238,056 1,016,006 888,162 1,781,072 1,712,384 4,084,748 3,838,602 
Home closings gross margin$469,774 $326,150 $331,822 $213,519 $624,860 $402,033 $1,426,456 $941,702 
Home closings gross margin %26.7 %20.9 %24.6 %19.4 %26.0 %19.0 %25.9 %19.7 %
Home closings gross margin increased 630 basis points to 27.5% for the three months ended September 30, 2017 and 2016. The primary driver for these decreases is due2022, compared to increased land and development costs in several of our divisions21.2% in the East region.

Central:

Home closings gross margin percentage increasedprior year period and 620 basis points to 18.4% from 17.6% for the three months ended September 30, 2017 and 2016, respectively, and to 18.1% from 17.7%25.9% for the nine months ended September 30, 2017 and 2016, respectively.2022, compared to 19.7% in the prior year period. The increase is primarily due to geographical mix within the region.


West:
Home closings gross margin percentage decreased to 17.1% from 18.0%increases for both the three months ended September 30, 2017 and 2016 respectively, and to 16.3% from 17.1%, for the nine months ended September 30, 20172022 is a reflection of pricing power in excess of inflationary cost pressure, operational enhancements, and 2016, respectively. The decrease is primarily dueacquisition synergies. In addition, we strategically metered sales releases to product mixbetter manage supply chain and an increaselabor constraints in land and development coststhe earlier part of the homes closed in 2017 compared to those closed in 2016.2022.


Mortgage OperationsFinancial Services
Our Mortgage Operations segment provides mortgage lending through our subsidiary, TMHF, and title services through our subsidiary, Inspired Title. The following details the number of loans closed, net income per closed loan, the aggregate value and capture rate on our loansis a summary for the following periods:periods presented of our financial services income before income taxes as well as supplemental data:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(Dollars in thousands)20222021Change20222021Change
Financial services revenue$18,291 $29,721 (38.5)%$71,792 $96,756 (25.8)%
Title services and other revenue9,458 8,325 13.6 26,627 22,747 17.1 
     Total financial services revenue27,749 38,046 (27.1)%98,419 119,503 (17.6)%
Financial services net income from unconsolidated entities546 1,354 (59.7)4,799 7,225 (33.6)
     Total revenue28,295 39,400 (28.2)103,218 126,728 (18.6)
Financial services expenses20,395 26,202 (22.2)66,092 76,136 (13.2)
Financial services income before income taxes$7,900 $13,198 (40.1)%$37,126 $50,592 (26.6)%
Total originations:
     Number of Loans1,551 2,254 (31.2)%4,728 6,718 (29.6)%
     Principal$701,323 $900,404 (22.1)%$2,108,122 $2,621,103 (19.6)%

Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Supplemental data:
     Average FICO score752 752 753 751 
Funded origination breakdown:
     Government (FHA,VA,USDA)18 %17 %17 %18 %
     Other agency75 %79 %77 %79 %
     Total agency93 %96 %94 %97 %
     Non-agency7 %4 %6 %3 %
Total funded originations100 %100 %100 %100 %
  
Closed
Loans
 Profit Per Closed Loan 
Aggregate
Loan Volume
(in millions)
 Capture RateAverage FICO
Three Months Ended September 30, 2017 1,102
 $5,088
 $374.1
 76%745
Three Months Ended September 30, 2016 1,068
 $4,598
 $357.0
 81%744

  Closed
Loans		 Profit Per Closed Loan Aggregate
Loan Volume
(in millions)		 Capture RateAverage FICO
Nine Months Ended September 30, 2017 3,162
 $5,324
 $1,075.0
 76%744
Nine Months Ended September 30, 2016 2,965
 $4,626
 $992.0
 80%743

Our net income per closed loan increasedTotal financial services revenue decreased by 27.1% and 17.6% for both the three and nine months ended September 30, 20172022 compared to the same periods in the prior year, primarily due to the increaserespectively. The decrease in the average loan amount which istotal financial services revenue was a result of lower home mortgage originations and lower home closings during the increase in average selling priceperiods.

33
Table of homes closed. The increase in net income per closed loan is also partially attributable to improvements in the gain on sale of loans due to better investor pricing from our mandatory loan commitments model.Contents

Our mortgage capture rate represents the percentage of our homes sold to a home purchaser that utilized a mortgage and for which the borrower obtained such mortgage from TMHF or one of our preferred third party lenders. The decrease in capture rate for both the three and nine months ended September 30, 2017 compared to the same periods in the prior year is primarily due to increased competition for new home mortgages.

Sales, Commissions and Other Marketing Costs
Sales, commissions and other marketing costs, as a percentage of home closings revenue, net, decreased to 6.9%4.8% from 7.2%5.5%, and to 7.1%5.1% from 7.3% respectively,5.9% for the three and nine months ended September 30, 20172022, respectively, compared to the same periods in 2016. This decrease is primarily a result of efficient marketing and advertising. In addition, the prior year period had higheryear. The decrease was primarily driven by leverage in controllable sales and marketing costs as a result of our acquired divisions and an increase in new communities which typically have incremental startup costs during their early stages.costs.



General and Administrative Expenses
General and administrative expenses as a percentage of home closings revenue, net, remained relatively flatdecreased to 2.6% from 4.0% and to 3.4% from 4.2% for the three and nine months ended September 30, 2017,2022, respectively, compared to the same periods in the prior year. We continueThe decrease was primarily due to utilize our scalable platform, providing leveragethe increase in home closings revenue, along with existing infrastructuredecreases in an effort to maintain stable operating costs.general and administrative expenses.


Equity in Income ofNet Loss/(Income) from Unconsolidated Entities
Equity in income ofWe had a net loss from unconsolidated entities was $2.8of $1.2 million and $1.6net income from unconsolidated entities of $1.5 million for the three months ended September 30, 20172022 and 2016, respectively,2021, respectively. We also had a net loss of $3.0 million and $6.9net income of $9.3 million for the nine months ended September 30, 2022 and 2021, respectively. Net loss/(income) generated from unconsolidated entities is dependent on the number of joint venture investments and the stage of our investment. We recently made several new investments in unconsolidated joint ventures which have yet to yield returns.

Other Expense/(Income), Net
Other expense, net was $5.8 million for the three months ended September 30, 2022 and other income, net was $4.7 million for the nine months ended September 30, 20172022. Other expense, net was $47.0 thousand and 2016,$1.1 million for the same periods in the prior year, respectively. The increase isFor the three months ended September 30, 2022, other expense was primarily duerelated to our increasethe write-off of pre-acquisition costs during the period, and for the nine months ended September 30, 2022 other income was primarily related to $14.5 million in active unconsolidated joint ventures. We had six active unconsolidatedgains on land transferred at fair value as part of investments in two new joint ventures with third parties. The gain on land transferred represents the difference between the fair value and carrying value of the land at September 30, 2017 compared to five active unconsolidated joint ventures at September 30, 2016.the time of transfer.


Interest Income,Gain on Extinguishment of Debt, Net
Interest income,
Gain on extinguishment of debt, net was $135 thousand and $47$71 thousand for the three months ended September 30, 20172022 and 2016, respectively, and $314 thousand and $149 thousand for the nine months ended September 30, 2017 and 2016, respectively. Interest income, net includes interest earned on cash balances offset by interest incurred but not capitalized on our long-term debt and other borrowings.

Other Expense, Net
Other expense, net was $0.4 million and $1.9 million, for the three months ended September 30, 2017 and 2016, respectively, and $0.8 million and $8.613.5 million for the nine months ended September 30, 20172022. This gain is due to the Tender Offer and 2016, respectively. The threepurchase of our 6.625% Senior Notes due 2027 which was primarily executed in June 2022 and nine months ended September 30, 2016 included higher accruals for contingent consideration relating to our acquisitions during 2016, earn out accruals for our previous Darling Homes acquisition, and pre-acquisition costs on abandoned land projects.finalized in July 2022.


Income Tax Provision
Our effective tax rate for the three and nine months ended September 30, 2017 was 30.7% and 31%, respectively, compared to 35.1% and 33.8% for the same periods in 2016, respectively. The effective tax rate for the three and nine months ended September 30, 20172022 was favorably impacted by discrete22.6% and 23.8%, compared to 23.5% and 23.2%, respectively, for the same periods in the prior year. For both the three and nine months ended September 30, 2022 and September 30, 2021 the effective tax adjustmentsrate differed from the U.S. federal statutory income tax rate primarily due to state income taxes, non-deductible executive compensation, excess tax benefits related to certain deferred tax assetsstock-based compensation and liabilitiesspecial deductions and federal energy tax credits earned from building energy efficient homes, which were recorded in the current period but are associated with homes closed priorrelating to 2017.homebuilding activities.


Net Income
Net income before allocation to Principal Equityholders and diluted earnings per share for the three months ended September 30, 20172022 was $54.3$309.8 million and $0.45,$2.72, respectively. Net income before allocation to Principal Equityholders and diluted earnings per share for the three months ended September 30, 20162021 was $58.3$168.1 million and $0.49,$1.34, respectively. The decreaseincreases in net income and diluted earnings per share from the prior year iswere primarily attributable to lowerhigher home closing revenue, net and higher gross margin due to higher costs of goods sold as well as lower land sale gross margin during the three months ended September 30, 2017. However, these decreases in gross margin were partially offset by a lower effective tax rate for the three months ended September 30, 2017 compared to the same period in the prior year.dollars.

Liquidity and Capital Resources
Liquidity


We finance our operations through the following:


•Cash generated from operations;
•Borrowings under our Revolving Credit Facility (as defined below);Facilities;
•Our various series of Senior Notes (as defined below);Notes;
•Mortgage warehouse facilities;
•Project-level real estate financing (including non-recourse loans)loans, land banking, and joint ventures); and
•Performance, payment and completion surety bonds, and letters of credit; andcredit.
Cash generated from operations.
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We believe that we can fund our current and foreseeable liquidity needs for the next 12 months from:


Cash generated from operations; and
Borrowings under our Revolving Credit Facility.

We may also access the capital markets to obtain additional liquidity through debt and equity offerings on an opportunistic basis. Our principal uses of capital for the nine months ended September 30, 2017 and 2016 were land purchases, lot development, home construction, operating expenses, payment of debt service, income taxes, investments in joint ventures, stock repurchases, and the payment of various liabilities. In addition, all net proceeds from our four equity offerings during the nine months ended September 30, 2017, were used to purchase partnership units in New TMM, our direct subsidiary, along with shares of our Class B common stock, held by our Principal Equityholders. Cash flows for each of our communities depend on the status of the development cycle and can differ substantially from reported earnings. Early stages of development or expansion require significant cash expenditures for land acquisitions, on and off-site development, construction of model homes, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our statement of operations until a home closes, we incur significant cash outflows prior to recognition of earnings.


On September 28, 2022, we announced that our indirect wholly owned subsidiary, Taylor Morrison Communities, Inc. issued a notice of full redemption for the entire outstanding principal amount of the 5.875% Senior Notes due 2023 (the “2023 Notes”). The full notice of redemption states that the entire outstanding principal amount of the 2023 Notes will be redeemed on October 31, 2022 at a redemption price equal to 100.000% of the aggregate principal amount of the 2023 Notes to be redeemed plus the applicable premium (as defined in the indenture governing the 2023 Notes) and accrued and unpaid interest through the redemption date.

The table below summarizes our total cash and liquidity as of the dates indicated (in thousands):

As of
(Dollars in thousands)September 30, 2022December 31, 2021
Total cash, excluding restricted cash$329,244 $832,821 
$1 Billion Revolving Credit Facility1,000,000 800,000 
$100 Million Revolving Credit Facility100,000 100,000 
Letters of credit outstanding(61,242)(58,738)
$1 Billion Revolving Credit Facility borrowings outstanding— — 
$100 Million Revolving Credit Facility borrowings outstanding— (31,529)
Revolving Credit Facilities availability1,038,758 809,733 
Total liquidity$1,368,002 $1,642,554 

  As of
(Dollars in thousands) September 30, 2017 December 31, 2016
Total Cash, excluding Restricted Cash $264,862
 $300,179
     
Total Revolving Credit Facility 500,000
 500,000
Letters of Credit Outstanding (33,158) (31,903)
Revolving Credit Facility Borrowings Outstanding 
 —
 —
Revolving Credit Facility Availability 466,842
 468,097
     
Total Liquidity $731,704
 $768,276
We believe we have adequate capital resources from cash generated from operations and sufficient access to external financing sources from borrowings under our Revolving Credit Facilities to conduct our operations for the next twelve months, including the redemption of our 2023 Notes mentioned above. Beyond the next twelve months, our primary demand for funds will be for payments of our long-term debt as it becomes due, land purchases, lot development, home and amenity construction, long-term capital investments, investments in our joint ventures, and repurchases of common stock. We believe we will generate sufficient cash from our operations to meet the demands for such payments, however we may also access the capital markets to obtain additional liquidity through debt and equity offerings or refinance debt to secure capital for such long-term demands.



Cash Flow Activities


Operating Cash Flow Activities
Our net cash provided by operating activities was $132.8$460.0 million for the nine months ended September 30, 20172022, compared to $142.4$103.5 million provided byof cash used in operating activities for the nine months ended September 30, 2016.2021. The primary driver of the decreaseyear-over-year increase in cash provided by operating activities is primarily driven by an increase in the current period is increased spending onnet income and a decrease in mortgage loans held for sale as a result of fewer home mortgage originations. These increases were partially offset by a decrease in accounts payable, accrued expenses and other liabilities; an increase in real estate inventory and land deposits, partially offset by an increase in the number of homes closed, resulting in higher net incomedeposits; and an increase in customer deposits as a result of higher sales volume.deposits.


Investing Cash Flow Activities
Net cash used in investing activities was $26.5$18.8 million for the nine months ended September 30, 2017, as2022, compared to net$43.3 million of cash used in investing activities of $74.7 million for the nine months ended September 30, 2016.2021. The primary driver ofdecrease in cash used in investing activities was primarily due to an increase in capital distributions from unconsolidated entities, partially offset by increased investments in new unconsolidated entities during the change between periods was the 2016 acquisition of Acadia Homes for $52.8 million.period.


Financing Cash Flow Activities
Net cash used in financing activities was $141.9$947.7 million for the nine months ended September 30, 2017, as2022, compared to net cash used in financing activities of $33.3$12.3 million for the nine months ended September 30, 2016.2021. The increase in cash used in financing activities in 2017 and 2016 was primarily attributabledue to repayments on thesenior notes, Revolving Credit Facilities, and mortgage warehouse lines exceeding borrowings stemming from the seasonal decline in mortgage receivables, offset by net borrowings on the Revolving Credit Facility in the prior year. Asfacilities as well as repurchases of September 30, 2017, we did not have any borrowings outstanding under our Revolving Credit Facility.common stock.

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Debt Instruments


Senior Notes:


The following table summarizesFor information regarding our outstanding senior unsecured notes (collectively,debt instruments, including the “Senior Notes”) as of September 30, 2017.
(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

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 2021terms governing our 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 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 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 Credit Facilities, see Note 7 - Debtto 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.

TMHC Compared to TMM Holdings
TMM Holdings is a parent guarantor of certain of our debt facilities. The financial information of TMHC is substantially identical to the financial performance and operations of TMM Holdings except for certain SEC and regulatory fees which are attributable to TMHC.

Revolving Credit Facility
Our $500.0 millionRevolving 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, beUnaudited Condensed Consolidated Financial Statements 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.this quarterly report.

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 September 30, 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 subsidiary warehouse borrowings:
(Dollars in thousands) As of September 30, 2017
Facility Amount Drawn Facility Amount Interest Rate Expiration Date 
Collateral (1)
Flagstar $2,703
 $20,000
 LIBOR + 2.5% 30 days written notice Mortgage Loans
Comerica 23,290
 50,000
 LIBOR + 2.25% 
November 16, 2017 (2)
 Mortgage Loans
J.P. Morgan 35,299
 100,000
 LIBOR + 2.375% September 26, 2018 Mortgage Loans and Pledged Cash
Total $61,292

$170,000
      
(1) The mortgage warehouse borrowings outstanding as of September 30, 2017 and December 31, 2016 were collateralized by a) $107.7 million and $233.2 million, respectively, of mortgage loans held for sale, which comprised the balance of mortgage loans held for sale and b) approximately $1.3 million and $1.6 million, respectively, of cash which are included in restricted cash in the accompanying Condensed Consolidated Balance Sheets.
(2) We expect to renew the Comerica facility during the fourth quarter of 2017.

Loans Payable and Other Borrowings
Loans payable and other borrowings as of September 30, 2017 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 September 30, 2017 and December 31, 2016. We impute interest for loans with no stated interest rates.

Letters of Credit, Surety Bonds and Financial Guarantees

The following table summarizes our letters of credit and surety bonds as of the dates indicated:
  As of
(Dollars in thousands) September 30, 2017 December 31, 2016
Letters of credit (1)
 $33,158
 $31,903
Surety bonds 284,617
 270,943
Total outstanding letters of credit and surety bonds $317,775
 $302,846
(1)As of September 30, 2017 and December 31, 2016, there was $200 million total capacity of letters of credit available under our Revolving Credit Facility.


Off-Balance Sheet Arrangements as of September 30, 20172022


Investments in Land Development and Homebuilding Joint Ventures or Unconsolidated Entities
We participate in strategic land development and homebuilding joint ventures with related and unrelated third parties. The use ofOur participation with these entities, in some instances, enables us to acquire land to which we could not otherwise obtain access, or could not obtain access on terms that are as favorable. Our partners in these joint ventures historically have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to sites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large or expensive land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. For example, in April 2022, we established a joint venture with Värde Partners (“Värde”), a leading global alternative investment firm, to develop rental properties as a part of our Build-To-Rent program. The venture includes $850 million in equity commitments, funded 60 percent by Värde and 40 percent by the Company. The venture provides Värde with the exclusive opportunity to invest in the acquisition and development of Build-To-Rent projects identified by the Company that meet the venture's investment guidelines.


In certain of our unconsolidated joint ventures, wethe joint ventures enter into loan agreements, whereby we or one of our subsidiaries will provide the joint venture lenders with customary guarantees, including completion, indemnity and environmental guarantees subject to usual non-recourse terms.


For the nine months ended, September 30, 2017,2022 and 2021, total net capital invested incash contributions to unconsolidated joint ventures was $28.9 million.were $91.8 million and $31.8 million, respectively.


Land Purchase and Land Option Contracts and Land Banking Agreements
We enterare subject to the usual obligations associated with entering into contracts (including land option contracts and land banking arrangements) for the purchase, development, and sale of real estate in our routine business. We have a number of land purchase and option contracts and land banking agreements, generally through cash deposits, for the right to procurepurchase land or lots forat a future point in time with predetermined terms. We do not have title to the constructionproperty and the creditors of homes in the ordinary course of business. Lot option contracts enable usproperty owner generally have no recourse to control significant lot positions with a minimal initial capital investment and

substantially reduce the risks associated with land ownership and development. As of September 30, 2017, we had outstanding land purchase and lot option contracts of $520.8 million. We are obligated to close the transaction under our land purchase contracts. However, ourCompany. Our obligations with respect to the optionsuch contracts are generally limited to the forfeiture of the related non-refundable cash deposits and/or letters of credit provided to obtain the options. At September 30, 2017, we had non-refundable deposits totaling $50.9 million.2022 and December 31, 2021, the aggregate purchase price for land under these contracts was $1.5 billion and $1.3 billion, respectively.


Seasonality
Our business is seasonal. We have historically experienced, and in the future expect to continue to experience, variability in our results on a quarterly basis. We generally have more homes under construction, close more homes and have greater revenues and operating income in the third and fourth quarters of the year. Therefore, although new home contracts are obtained throughout the year, a higher portion of our home closings occur during the third and fourth calendar quarters. Our revenue therefore may fluctuate significantly on a quarterly basis, and we must maintain sufficient liquidity to meet short-term operating requirements. Factors expected to contribute to these fluctuations include:
 
•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.

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As a result of seasonal activity, our quarterly results of operations and financial position are not necessarily representative of the results we expect for the full year.


Inflation
We and the homebuilding industry in general may be adversely affected during periods of high inflation, primarily because of higher land, financing, labor and construction material costs. In addition, higher mortgage interest rates can significantly affect the affordability of permanent mortgage financing to prospective homebuyers. We attempt to pass through to our customers increases in our costs through increased sales prices. However, during periods of soft housing market conditions, we may not be able to offset our cost increases with higher selling prices.
Critical Accounting Policies and Estimates
There have been no significant changes to our critical accounting policies and estimates during the nine months ended September 30, 2017 as2022 compared to those we disclosed in Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report.




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our operations are interest rate sensitive. We monitor our exposure to changes in interest rates and incur both fixed rate and variable rate debt. At September 30, 2017,2022, approximately 96%95% of our debt was fixed rate and 4%5% was variable rate. None of our market sensitive instruments were entered into for trading purposes. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not impact the fair value of the debt instrument but may affect our future earnings and cash flows, and may also impact our variable rate borrowing costs, which principally relate to any borrowings under our Revolving Credit Facility and borrowings by TMHF under its various warehouse facilities. As of September 30, 2017,2022, we had no outstanding borrowings under our $1 Billion Revolving Credit Facility or our $100 Million Revolving Credit Facility. We had $466.8 million$1.0 billion of additional availability for borrowings and $166.8under the Credit Facilities including $138.8 million of additional availability for letters of credit under our $1 Billion Revolving Credit Facility as of September 30, 2022 (giving effect to $33.2$61.2 million of letters of credit outstanding as of such date). Our

The London Interbank Offered Rate (“LIBOR”) was the primary basis for determining interest payments on borrowings under each of our warehouse facilities and our Revolving Credit Facilities. On March 5, 2021, Senior NotesICE Benchmark Administration (“IBA”) confirmed it would cease publication of Overnight, 1, 3, 6 and 12 month US Dollar LIBOR settings immediately following the LIBOR publication on June 30, 2023. The Alternative Reference Rates Committee, which was convened by the Federal Reserve Board and the New York Federal Reserve, has identified the Secured Overnight Financing Rate (“SOFR”) as the recommended risk-free alternative rate for US Dollar LIBOR. In response to the planned discontinuation of LIBOR, our warehouse facilities agreements for facilities A, C, D, and E as well as our Revolving Credit Facilities have been restructured to begin using SOFR as the primary basis for determining interest payments. The agreement for warehouse facility B was also restructured to use the Bloomberg Short-Term Bank Yield Index (“BSBY”) as the primary basis for determining interest payments. The BSBY index is a proprietary index calculated daily as a credit sensitive supplement to manage the spread between funding costs and earned interest on loans. At this time, it is not possible to predict the full effect that the anticipated discontinuance of LIBOR, or the establishment of alternative reference rates such as SOFR and BSBY, will have on us or our borrowing costs. SOFR and BSBY are subjectrelatively new reference rates and their composition and characteristics are not the same as LIBOR. Given the limited history of these rates and potential volatility as compared to a requirement that we offer to purchase such notes at par with certain proceedsother benchmark or market rates, the future performance of asset sales (tothese rates cannot be predicted based on historical performance. The consequences of using SOFR and BSBY could include an increase in the extent not otherwise applied in accordance with the indenture governing such notes). cost of our variable rate indebtedness.

We are also required to offer to purchase all of our outstanding Senior Notessenior unsecured notes, as described in Note 7, Debt to the unaudited Condensed Consolidated Financial Statements included in this quarterly report, at 101% of their aggregate principal amount plus accrued and unpaid interest upon the occurrence of specified change of control events. Other than in those circumstances, we do not have an obligation to prepay fixed rate debt prior to maturity and, as a result, we would not expect interest rate risk and changes in fair value to have a significant impact on our cash flows related to our fixed rate debt until such time as we are required to refinance, repurchase or repay such debt.

We are not materially exposed to interest rate risk associated with TMHF’s mortgage loan origination business because at the time any loan is originated, TMHF has identified the investor who will agree to purchase the loan on the interest rate terms that are locked in with the borrower at the time the loan is originated.


The following table sets forth principal cash flowspayments by scheduled maturity and effective weighted average interest rates and estimated fair value of our debt obligations as of September 30, 2017.2022. The interest rate for our variable rate debt represents the weighted average interest rate on our borrowings under our mortgage warehouse facilities. Because the mortgage warehouse facilities are secured by certain mortgage loans held for sale which are typically sold within approximately 20 - 30 days, its outstanding balance is included as a variable rate maturity in the most current period presented.
 
 Expected Maturity DateFair
Value
(In millions, except percentage data)20222023202420252026ThereafterTotal
Fixed Rate Debt(1)
$461.3 $151.4 $416.0 $43.5 $27.2 $1,495.5 $2,594.9 $2,400.3 
Weighted average interest rate(2)
5.0 %3.0 %5.2 %3.0 %3.0 %5.6 %5.2 %
Variable Rate Debt(3)
$146.3 $— $— $— $— $— $146.3 $146.3 
Weighted average interest rate3.6 %— — — — — 3.6 %
  Expected Maturity Date 
Fair
Value
(In millions, except percentage data) 2017 2018 2019 2020 2021 Thereafter Total 
Fixed Rate Debt $47.5
 $61.8
 $40.5
 $5.5
 $552.6
 $703.9
 $1,411.8
 $1,461.3
Weighted average interest rate(1)
 3.5% 3.5% 3.5% 3.5% 5.5% 5.5% 5.3%  
Variable Rate Debt(2)
 $61.3
 $—
 $—
 $—
 $—
 $—
 $61.3
 $61.3
Weighted average interest rate 3.3% —% —% —% —% —% 3.3%  
(1) Fixed Rate Debt includes our 5.875% Senior Notes due 2023. As discussed in Note 7 to the unaudited Condensed Consolidated Financial Statements, these will be redeemed on October 31, 2022 and is presented in the table above with a 2022 expected maturity date.
(1)(2)Represents the coupon rate of interest on the full principal amount of the debt.
(2)(3) Based upon the amount of variable rate debt outstanding at September 30, 2017,2022, and holding the variable rate debt balance constant, each 1% increase in interest rates would increase the interest incurred by us by approximately $0.6$1.5 million per year.





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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our principal executive officer, principal financial officer and principal accounting officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of September 30, 2017.2022.  Based on this evaluation, our principal executive officer, principal financialfinancial officer and principal accounting officer concluded that, as of September 30, 2017,2022, the Company’sCompany's disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.


Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 20172022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




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PART II — OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS
We are involvedThe information required with respect to this item can be found in various litigationNote 13 - Commitments and legal claimsContingencies under “Legal Proceedings” 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. 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,Notes to the extent the liability arising from the ultimate resolution of any matter exceeds the estimates reflectedunaudited Condensed Consolidated Financial Statements included in the recorded reserves relating to such matter, we could incur additional charges that could be significant.this report.



ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors set forth in Part I, Item 1A.1A of our Annual Report. These risk factors may materially affect our business, financial condition or results of operations. You should carefully consider the risk factors set forth in our Annual Report and the other information set forth elsewhere in this quarterly report. You should be aware that these risk factors and other information may not describe every risk facing our Company.



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer PurchasesThe table below sets forth information regarding repurchases by the Company of Equity Securities

Duringits Common Stock during the three months ended September 30, 2017,2022.
PeriodTotal number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of publicly announced plans or programsApproximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)
July 1 to July 31, 2022— $— — $425,000 
August 1 to August 31, 20221,176,756 27.26 1,176,756 392,925 
September 1 to September 30, 20223,036,500 24.02 3,036,500 320,001 
   Total4,213,256 4,213,256 


On May 31, 2022, we repurchased the following number of shares ofannounced that our Class A Common Stock:

 Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs 
Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (a)
 
July 1 to July 31, 2017—
 $—
 —
 $56,427
August 1 to August 31, 2017—
 $—
 —
 $56,427
September 1 to September 30, 2017195,824
 $20.93
 195,824
 $95,898
   Total195,824
   195,824
  

(a) Our Board of Directors hashad authorized the repurchase of up to $100.0$500.0 million of the Company’s Class ACompany's Common Stock through December 31, 20182023. Repurchases of the Company's Common Stock under the new program will occur from time to time, if at all, in open market purchases, privately negotiated transactions or other transactions. The

Any 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. The program does not require us to repurchase any specific number of shares of common stock, and the program may be suspended, extended, modified or discontinued at any time.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.


ITEM 4. MINE SAFETY DISCLOSURES
None.


ITEM 5. OTHER INFORMATION
None.



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ITEM 6. EXHIBITS
Exhibit
No.		Description
Exhibit
No.
3.1		Description
3.1
3.2
10.1*†
10.2*†
10.3*†
10.4
31.1*
31.2*
32.1**
32.2**
101.INS101.INS*Inline XBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.CAL101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104.1*Cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in inline XBRL (and contained in Exhibit 101).
* Filed herewith

** Furnished herewith

† Management contract or compensatory plan in which directors and/or executive officers are eligible to participate.


The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them other than for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
TAYLOR MORRISON HOME CORPORATION
Registrant
DATE:November 1, 2017October 26, 2022
/s/ Sheryl D. Palmer

Sheryl D. Palmer
Chairman Presidentof the Board of Directors and Chief Executive Officer

(Principal Executive Officer)
/s/ C. David Cone

Louis Steffens
C. David ConeLouis Steffens
Executive Vice President and Chief Financial Officer

(Principal Financial Officer)
/s/ Joseph Terracciano

Joseph Terracciano
Chief Accounting Officer
(Principal Accounting Officer)


EXHIBIT INDEX

Exhibit
No.		Description/s/ Joseph Terracciano
Joseph Terracciano
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).
31.1*
Certification of Sheryl D. Palmer, Chief ExecutiveAccounting 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.INSXBRL Instance Document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.
(Principal Accounting Officer)
 * Filed herewith



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