0000882184-16-000159.txt : 20160421 0000882184-16-000159.hdr.sgml : 20160421 20160421130758 ACCESSION NUMBER: 0000882184-16-000159 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160421 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160421 DATE AS OF CHANGE: 20160421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORTON D R INC /DE/ CENTRAL INDEX KEY: 0000882184 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 752386963 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14122 FILM NUMBER: 161583527 BUSINESS ADDRESS: STREET 1: D.R. HORTON TOWER STREET 2: 301 COMMERCE STREET, SUITE 500 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173908200 MAIL ADDRESS: STREET 1: D.R. HORTON TOWER STREET 2: 301 COMMERCE STREET, SUITE 500 CITY: FORT WORTH STATE: TX ZIP: 76102 8-K 1 a33120168-kearningsrelease.htm 8-K 8-K


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________
FORM 8-K
 ______________________________
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 21, 2016
 ______________________________
D.R. Horton, Inc.
(Exact name of registrant as specified in its charter)
______________________________
 
Delaware
 
1-14122
 
75-2386963
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
301 Commerce Street, Suite 500, Fort Worth, Texas 76102
(Address of principal executive offices)
Registrant’s telephone number, including area code: (817) 390-8200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 ______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 2.02.    Results of Operations and Financial Condition.

On April 21, 2016, D.R. Horton, Inc. issued a press release announcing its results and related information for its second quarter ended March 31, 2016 and declaring its quarterly dividend. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference in its entirety into this Item 2.02.

The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01.    Financial Statements and Exhibits.

(d)
Exhibit

99.1
Press Release dated April 21, 2016 related to the Company’s results and related information for the second quarter ended March 31, 2016 and declaring its quarterly dividend.

2


SIGNATURE

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 hereunto duly authorized.

 
 
 
D.R. Horton, Inc.
 
 
Date:
April 21, 2016
 
By:
/S/ BILL W. WHEAT
 
 
 
 
Bill W. Wheat
 
 
 
 
Executive Vice President and
 
 
 
 
Chief Financial Officer



3


EXHIBIT INDEX
 
Exhibit
Number
  
Description
99.1
 
Press Release dated April 21, 2016


 EX-99.1 2 a3312016exhibit991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

Jessica Hansen, Vice President of Investor Relations
301 Commerce Street, Ste. 500, Fort Worth, Texas 76102
817-390-8200 | InvestorRelations@drhorton.com
April 21, 2016


D.R. HORTON, INC., AMERICA’S BUILDER, REPORTS FISCAL 2016 SECOND QUARTER EARNINGS AND DECLARES QUARTERLY DIVIDEND OF $0.08 PER SHARE

FORT WORTH, TEXAS (Business Wire) - April 21, 2016
Fiscal 2016 Second Quarter Highlights - comparisons to the same period in the prior year
•
Net income increased 32% to $195.1 million, or $0.52 per diluted share
•
Pre-tax income increased 31% to $300.5 million
•
Pre-tax profit margin improved 130 basis points to 10.9%
•
Net sales orders increased 13% in value to $3.6 billion and 10% in homes to 12,292
•
Homes closed increased 16% in value to $2.7 billion and 12% in homes to 9,262
•
Sales order backlog increased 14% in value to $4.1 billion and 12% in homes to 13,695
•
Net cash provided by operations for the six months ended March 31, 2016 was $26.9 million, compared to net cash used in operations of $168.8 million
•
Increases fiscal 2016 guidance for consolidated pre-tax profit margin to a range of 10.7% to 11.2%
•
Reaffirms fiscal 2016 guidance for consolidated revenues of $12.0 billion to $12.5 billion

D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its second fiscal quarter ended March 31, 2016 increased 32% to $195.1 million, or $0.52 per diluted share, from $147.9 million, or $0.40 per diluted share, in the same quarter of fiscal 2015. Homebuilding revenue for the second quarter of fiscal 2016 increased 16% to $2.7 billion from $2.3 billion in the same quarter of fiscal 2015. Homes closed in the quarter increased 12% to 9,262 homes, compared to 8,243 homes in the prior year quarter.
For the six months ended March 31, 2016, net income increased 21% to $352.8 million, or $0.94 per diluted share, from $290.4 million, or $0.79 per diluted share, in the same period of fiscal 2015. Homebuilding revenue for the six months ended March 31, 2016 increased 10% to $5.1 billion from $4.6 billion in the first six months of fiscal 2015. Homes closed in the six-month period increased 7% to 17,323, compared to 16,216 homes in the same period of fiscal 2015.
Net sales orders for the second quarter ended March 31, 2016 increased 10% to 12,292 homes and 13% in value to $3.6 billion, compared to 11,135 homes and $3.2 billion in the prior year quarter. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the second quarter of fiscal 2016 was 19%. Net sales orders for the first six months of fiscal 2016 increased 10% to 20,356 homes from 18,505 homes in the first six months of fiscal 2015, and the value of net sales orders increased 13% to $5.9 billion from $5.3 billion.




The Company’s sales order backlog of homes under contract at March 31, 2016 increased 12% to 13,695 homes and 14% in value to $4.1 billion, compared to 12,177 homes and $3.6 billion at March 31, 2015.

During the quarter, the Company repaid at maturity $170.2 million principal amount of its 5.625% senior notes and ended the quarter with $1.2 billion of homebuilding unrestricted cash and homebuilding debt to total capital of 33.6%. Subsequent to quarter end, the Company repaid at maturity $372.7 million principal amount of its 6.5% senior notes.

Donald R. Horton, Chairman of the Board, said, “The spring selling season is off to a great start at D.R. Horton. Our team delivered a strong second quarter, highlighted by $300.5 million of pre-tax income on $2.8 billion of revenues. Our pre-tax profit margin improved 130 basis points from the prior year quarter to 10.9%. The number and dollar value of our homes sold, closed and in backlog all increased by double-digit percentages. Our net sales orders in the March quarter increased 52% sequentially from the December quarter and 10% from the March quarter last year.

"Solid performance in our three core brands is enabling us to capitalize on market opportunities and expand our industry-leading market share. With a sales backlog of 13,695 homes at the end of March and a robust lot supply and inventory of homes available for sale, we are well-positioned for the second half of fiscal 2016. We remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive cash flows and improved returns.”

D.R. Horton is increasing its fiscal 2016 guidance for consolidated pre-tax profit margin to a range of 10.7% to 11.2% from its prior guidance of 10.5% to 11.0%. The Company is also updating its annual guidance for homebuilding SG&A to 9.0% to 9.2% of homebuilding revenues from its prior guidance of 9.2% to 9.4%.

D.R. Horton reaffirms its previously issued fiscal 2016 guidance for other metrics including:

•Consolidated revenues of $12.0 billion to $12.5 billion
•Homes closed between 39,500 homes and 41,500 homes
•Home sales gross margin in the high 19s to 20%
•Financial services pre-tax profit margin between 30% and 33%
•Income tax rate of 35% to 36%
•Diluted share count of approximately 375 million shares
•Cash flow from operations of $300 million to $500 million

The Company has declared a quarterly cash dividend of $0.08 per common share. The dividend is payable on May 27, 2016 to stockholders of record on May 13, 2016.

The Company will host a conference call today (Thursday, April 21st) at 10:00 a.m. Eastern Time. The dial-in number is 877-407-8033, and the call will also be webcast from the Company’s website at investor.drhorton.com.

D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States for fourteen consecutive years. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 79 markets in 26 states across the United States and closed 37,755 homes in the twelve-month period ended March 31, 2016. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Express Homes and Emerald Homes with sales prices ranging from $100,000 to over $1,000,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.



Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that with a sales backlog of 13,695 homes at the end of March and a robust lot supply and inventory of homes available for sale, we are well-positioned for the second half of fiscal 2016 and that we remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive cash flows and improved returns. The forward-looking statements also include that D.R. Horton is updating its fiscal 2016 guidance for pre-tax profit margin and homebuilding SG&A and is reaffirming its previously issued fiscal 2016 guidance for other metrics.

Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the cyclical nature of the homebuilding industry and changes in economic, real estate and other conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing and the liquidity provided by government-sponsored enterprises, the effects of government programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land and lot inventory; home warranty and construction defect claims; supply shortages and other risks of acquiring land, building materials and skilled labor; reductions in the availability of performance bonds; increases in the costs of owning a home; the impact of an inflationary, deflationary or higher interest rate environment; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulations on our financial services operations; our substantial debt and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within the homebuilding and financial services industries; our ability to effect our growth strategies or acquisitions successfully; the effects of the loss of key personnel; the effects of negative publicity; and information technology failures and data security breaches. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton’s annual report on Form 10-K and our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.


D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
March 31,
2016
 
September 30,
2015
 
(In millions)
ASSETS
 
 
 
Homebuilding:
 
 
 
Cash and cash equivalents
$
1,195.2

 
$
1,355.9

Restricted cash
11.4

 
9.7

Inventories:
 
 
 
Construction in progress and finished homes
4,153.8

 
3,501.2

Residential land and lots — developed and under development
3,829.3

 
4,065.3

Land held for development
194.3

 
202.3

Land held for sale
39.2

 
38.2

 
8,216.6

 
7,807.0

Deferred income taxes, net of valuation allowance of $10.1 million
     at March 31, 2016 and September 30, 2015
526.6

 
558.1

Property and equipment, net
149.5

 
144.0

Other assets
378.9

 
456.2

Goodwill
87.2

 
87.2

 
10,565.4

 
10,418.1

Financial Services:
 
 
 
Cash and cash equivalents
28.9

 
27.9

Mortgage loans held for sale
616.1

 
631.0

Other assets
89.8

 
74.0

 
734.8

 
732.9

Total assets
$
11,300.2

 
$
11,151.0

LIABILITIES
 
 
 
Homebuilding:
 
 
 
Accounts payable
$
499.8

 
$
473.0

Accrued expenses and other liabilities
847.0

 
929.2

Notes payable
3,167.3

 
3,333.6

 
4,514.1

 
4,735.8

Financial Services:
 
 
 
Accounts payable and other liabilities
41.7

 
41.9

Mortgage repurchase facility
495.4

 
477.9

 
537.1

 
519.8

Total liabilities
5,051.2

 
5,255.6

EQUITY
 
 
 
Common stock, $.01 par value, 1,000,000,000 shares authorized,
    377,931,164 shares issued and 370,731,093 shares outstanding at
    March 31, 2016 and 375,847,442 shares issued and 368,647,371 shares
    outstanding at September 30, 2015
3.8

 
3.8

Additional paid-in capital
2,795.6

 
2,733.8

Retained earnings
3,583.3

 
3,289.6

Treasury stock, 7,200,071 shares at March 31, 2016 and
    September 30, 2015, at cost
(134.3
)
 
(134.3
)
Accumulated other comprehensive income
—

 
1.4

Stockholders’ equity
6,248.4

 
5,894.3

Noncontrolling interests
0.6

 
1.1

Total equity
6,249.0

 
5,895.4

Total liabilities and equity
$
11,300.2

 
$
11,151.0

7


D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
 
Three Months Ended 
 March 31,
 
Six Months Ended 
 March 31,
 
2016
 
2015
 
2016
 
2015
 
(In millions, except per share data)
Homebuilding:
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Home sales
$
2,686.0

 
$
2,318.8

 
$
5,026.9

 
$
4,559.4

Land/lot sales and other
15.0

 
19.7

 
35.2

 
32.1

 
2,701.0

 
2,338.5

 
5,062.1

 
4,591.5

Cost of sales:
 
 
 
 
 
 
 
Home sales
2,151.3

 
1,861.9

 
4,025.6

 
3,659.9

Land/lot sales and other
12.0

 
17.6

 
27.9

 
28.0

Inventory and land option charges
6.0

 
12.5

 
7.9

 
18.6

 
2,169.3

 
1,892.0

 
4,061.4

 
3,706.5

Gross profit:
 
 
 
 
 
 
 
Home sales
534.7

 
456.9

 
1,001.3

 
899.5

Land/lot sales and other
3.0

 
2.1

 
7.3

 
4.1

Inventory and land option charges
(6.0
)
 
(12.5
)
 
(7.9
)
 
(18.6
)
 
531.7

 
446.5

 
1,000.7

 
885.0

Selling, general and administrative expense
258.2

 
242.4

 
501.6

 
480.4

Other (income)
(9.6
)
 
(4.5
)
 
(13.0
)
 
(10.1
)
Homebuilding pre-tax income
283.1

 
208.6

 
512.1

 
414.7

Financial Services:
 
 
 
 
 
 
 
Revenues
66.9

 
59.5

 
122.2

 
109.2

General and administrative expense
51.0

 
40.7

 
97.1

 
78.6

Interest and other (income)
(1.5
)
 
(2.7
)
 
(4.6
)
 
(5.5
)
Financial services pre-tax income
17.4

 
21.5

 
29.7

 
36.1

Income before income taxes
300.5

 
230.1

 
541.8

 
450.8

Income tax expense
105.4

 
82.2

 
189.0

 
160.4

Net income
$
195.1

 
$
147.9

 
$
352.8

 
$
290.4

Other comprehensive income, net of income tax
(2.6
)
 
—

 
(1.4
)
 
—

Comprehensive income
$
192.5

 
$
147.9

 
$
351.4

 
$
290.4

Basic:
 
 
 
 
 
 
 
Net income per share
$
0.53

 
$
0.40

 
$
0.95

 
$
0.79

Weighted average number of common shares
370.2

 
365.8

 
369.7

 
365.4

Diluted:
 
 
 
 
 
 
 
Net income per share
$
0.52

 
$
0.40

 
$
0.94

 
$
0.79

Adjusted weighted average number of common shares
373.7

 
369.4

 
373.6

 
368.8

Other Consolidated Financial Data:
 
 
 
 
 
 
 
Interest charged to cost of sales
$
40.9

 
$
35.6

 
$
76.1

 
$
69.2

Depreciation and amortization
$
14.0

 
$
13.1

 
$
27.6

 
$
25.4

Interest incurred
$
40.4

 
$
42.6

 
$
82.6

 
$
83.0




D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) 
 
Six Months Ended 
 March 31,
 
2016
 
2015
 
(In millions)
OPERATING ACTIVITIES
 
 
 
Net income
$
352.8

 
$
290.4

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
27.6

 
25.4

Amortization of discounts and fees
2.8

 
2.7

Stock based compensation expense
24.3

 
22.4

Excess income tax benefit from employee stock awards
(3.9
)
 
(6.7
)
Deferred income taxes
29.6

 
17.4

Inventory and land option charges
7.9

 
18.6

Gain on sale of debt securities collateralized by residential real estate
(4.5
)
 
—

Changes in operating assets and liabilities:
 
 
 
Increase in construction in progress and finished homes
(652.8
)
 
(375.6
)
Decrease (increase) in residential land and lots –
    developed, under development, held for development and held for sale
235.9

 
(71.2
)
Decrease (increase) in other assets
36.6

 
(11.1
)
Decrease (increase) in mortgage loans held for sale
14.9

 
(40.7
)
Decrease in accounts payable, accrued expenses and other liabilities
(44.3
)
 
(40.4
)
Net cash provided by (used in) operating activities
26.9

 
(168.8
)
INVESTING ACTIVITIES
 
 
 
Purchases of property and equipment
(40.4
)
 
(24.0
)
Increase in restricted cash
(1.7
)
 
(0.4
)
Net principal increase of other mortgage loans and real estate owned
(0.4
)
 
(4.9
)
Proceeds from sale of debt securities collateralized by residential real estate
35.8

 
—

Net cash used in investing activities
(6.7
)
 
(29.3
)
FINANCING ACTIVITIES
 
 
 
Proceeds from notes payable
17.6

 
1,350.3

Repayment of notes payable
(170.6
)
 
(1,098.3
)
Proceeds from stock associated with certain employee benefit plans
28.4

 
21.0

Excess income tax benefit from employee stock awards
3.9

 
6.7

Cash dividends paid
(59.2
)
 
(45.7
)
Net cash (used in) provided by financing activities
(179.9
)
 
234.0

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(159.7
)
 
35.9

Cash and cash equivalents at beginning of period
1,383.8

 
661.8

Cash and cash equivalents at end of period
$
1,224.1

 
$
697.7




D.R. HORTON, INC.
($’s in millions)

 
 
NET SALES ORDERS

 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2016
 
2015
 
2016
 
2015
 
 
Homes
 
Value
 
Homes
 
Value
 
Homes
 
Value
 
Homes
 
Value
East
 
1,446
 
$
411.3

 
1,481
 
$
394.7

 
2,423
 
$
682.1

 
2,451
 
$
654.8

Midwest
 
600
 
223.6

 
571
 
218.0

 
845
 
317.5

 
911
 
341.3

Southeast
 
4,027
 
1,039.0

 
3,216
 
835.2

 
6,733
 
1,745.4

 
5,443
 
1,404.1

South Central
 
3,973
 
959.3

 
3,812
 
904.0

 
6,501
 
1,576.2

 
6,178
 
1,472.8

Southwest
 
482
 
110.2

 
447
 
99.3

 
817
 
187.5

 
757
 
168.8

West
 
1,764
 
832.2

 
1,608
 
715.6

 
3,037
 
1,435.0

 
2,765
 
1,233.2

 
 
12,292
 
$
3,575.6

 
11,135
 
$
3,166.8

 
20,356
 
$
5,943.7

 
18,505
 
$
5,275.0



 
 
HOMES CLOSED

 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2016
 
2015
 
2016
 
2015
 
 
Homes
 
Value
 
Homes
 
Value
 
Homes
 
Value
 
Homes
 
Value
East
 
1,135
 
$
308.6

 
1,018
 
$
278.8

 
2,188
 
$
603.0

 
2,106
 
$
576.7

Midwest
 
419
 
162.1

 
402
 
145.0

 
731
 
285.4

 
767
 
274.7

Southeast
 
3,124
 
810.3

 
2,518
 
644.8

 
5,815
 
1,520.9

 
4,898
 
1,260.4

South Central
 
2,864
 
691.8

 
2,709
 
619.8

 
5,342
 
1,296.8

 
5,264
 
1,192.5

Southwest
 
348
 
79.9

 
313
 
70.9

 
670
 
153.8

 
643
 
146.3

West
 
1,372
 
633.3

 
1,283
 
559.5

 
2,577
 
1,167.0

 
2,538
 
1,108.8

 
 
9,262
 
$
2,686.0

 
8,243
 
$
2,318.8

 
17,323
 
$
5,026.9

 
16,216
 
$
4,559.4



 
 
SALES ORDER BACKLOG

 
 
As of March 31,
 
 
2016
 
2015
 
 
Homes
 
Value
 
Homes
 
Value
East
 
1,665
 
$
492.1

 
1,796
 
$
494.8

Midwest
 
526
 
198.5

 
671
 
257.8

Southeast
 
4,429
 
1,202.5

 
3,446
 
934.4

South Central
 
4,815
 
1,230.6

 
4,272
 
1,072.0

Southwest
 
718
 
157.8

 
539
 
118.6

West
 
1,542
 
782.1

 
1,453
 
696.8

 
 
13,695
 
$
4,063.6

 
12,177
 
$
3,574.4