• | Net income per diluted share increased 53% to $1.16 |
• | Net income attributable to D.R. Horton increased 50% to $431.3 million |
• | Consolidated revenues increased 14% to $4.0 billion |
• | Consolidated pre-tax income increased 39% to $523.3 million |
• | Consolidated pre-tax margin increased 230 basis points to 13.0% |
• | Homes closed increased 13% in both homes and value to 12,959 homes and $3.9 billion |
• | Net sales orders increased 19% to 13,126 homes and 22% in value to $3.9 billion |
• | Repurchased 3.0 million shares of common stock for $163.1 million |
• | Consolidated revenues of $18.5 billion to $19.1 billion compared to prior guidance of $18.5 billion to $19.0 billion |
• | Homes closed in the range of 60,000 homes and 61,500 homes compared to prior guidance of 60,000 homes and 61,000 homes |
• | Income tax rate between 23% and 24% for the second, third and fourth quarters of fiscal 2020 |
• | Cash flow from homebuilding operations in excess of $1.0 billion |
• | Outstanding share count at end of fiscal 2020 down approximately 2% from end of fiscal 2019 |
December 31, 2019 | September 30, 2019 | ||||||
(In millions) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 1,583.3 | $ | 1,494.3 | |||
Restricted cash | 12.6 | 19.7 | |||||
Total cash, cash equivalents and restricted cash | 1,595.9 | 1,514.0 | |||||
Inventories: | |||||||
Construction in progress and finished homes | 5,580.1 | 5,245.0 | |||||
Residential land and lots — developed, under development, held for development and held for sale | 6,319.1 | 6,037.0 | |||||
Total inventory | 11,899.2 | 11,282.0 | |||||
Mortgage loans held for sale | 1,025.1 | 1,072.0 | |||||
Deferred income taxes, net of valuation allowance of $18.3 million and $18.7 million at December 31, 2019 and September 30, 2019, respectively | 154.1 | 163.1 | |||||
Property and equipment, net | 563.4 | 499.2 | |||||
Other assets | 921.7 | 912.8 | |||||
Goodwill | 163.5 | 163.5 | |||||
Total assets | $ | 16,322.9 | $ | 15,606.6 | |||
LIABILITIES | |||||||
Accounts payable | $ | 659.3 | $ | 634.0 | |||
Accrued expenses and other liabilities | 1,377.4 | 1,278.1 | |||||
Notes payable | 3,783.3 | 3,399.4 | |||||
Total liabilities | 5,820.0 | 5,311.5 | |||||
EQUITY | |||||||
Common stock, $.01 par value, 1,000,000,000 shares authorized, 393,014,557 shares issued and 366,273,190 shares outstanding at December 31, 2019 and 392,172,821 shares issued and 368,431,454 shares outstanding at September 30, 2019 | 3.9 | 3.9 | |||||
Additional paid-in capital | 3,182.0 | 3,179.1 | |||||
Retained earnings | 8,006.8 | 7,640.1 | |||||
Treasury stock, 26,741,367 shares and 23,741,367 shares at December 31, 2019 and September 30, 2019, respectively, at cost | (965.3 | ) | (802.2 | ) | |||
Stockholders’ equity | 10,227.4 | 10,020.9 | |||||
Noncontrolling interests | 275.5 | 274.2 | |||||
Total equity | 10,502.9 | 10,295.1 | |||||
Total liabilities and equity | $ | 16,322.9 | $ | 15,606.6 |
Three Months Ended December 31, | |||||||
2019 | 2018 | ||||||
(In millions, except per share data) | |||||||
Revenues | $ | 4,020.7 | $ | 3,519.0 | |||
Cost of sales | 3,084.2 | 2,751.1 | |||||
Selling, general and administrative expense | 455.8 | 402.8 | |||||
Gain on sale of assets | (31.1 | ) | (2.0 | ) | |||
Other (income) expense | (11.5 | ) | (8.6 | ) | |||
Income before income taxes | 523.3 | 375.7 | |||||
Income tax expense | 90.8 | 89.0 | |||||
Net income | 432.5 | 286.7 | |||||
Net income (loss) attributable to noncontrolling interests | 1.2 | (0.5 | ) | ||||
Net income attributable to D.R. Horton, Inc. | $ | 431.3 | $ | 287.2 | |||
Basic net income per common share attributable to D.R. Horton, Inc. | $ | 1.17 | $ | 0.77 | |||
Weighted average number of common shares | 368.3 | 375.1 | |||||
Diluted net income per common share attributable to D.R. Horton, Inc. | $ | 1.16 | $ | 0.76 | |||
Adjusted weighted average number of common shares | 373.4 | 380.1 | |||||
Other Consolidated Financial Data | |||||||
Interest charged to cost of sales | $ | 25.7 | $ | 25.6 | |||
Depreciation and amortization | $ | 19.0 | $ | 16.9 | |||
Interest incurred | $ | 37.7 | $ | 31.7 |
Three Months Ended December 31, | |||||||
2019 | 2018 | ||||||
(In millions) | |||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 432.5 | $ | 286.7 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Depreciation and amortization | 19.0 | 16.9 | |||||
Amortization of discounts and fees | 3.1 | 2.6 | |||||
Stock-based compensation expense | 16.6 | 18.1 | |||||
Equity in earnings of unconsolidated entities | (0.5 | ) | (0.6 | ) | |||
Distributions of earnings of unconsolidated entities | — | 0.5 | |||||
Deferred income taxes | 7.2 | 3.9 | |||||
Inventory and land option charges | 3.8 | 8.0 | |||||
Gain on sale of assets | (31.1 | ) | (2.0 | ) | |||
Changes in operating assets and liabilities: | |||||||
Increase in construction in progress and finished homes | (334.8 | ) | (500.3 | ) | |||
Increase in residential land and lots – developed, under development, held for development and held for sale | (373.1 | ) | (435.9 | ) | |||
Decrease (increase) in other assets | 2.0 | (34.0 | ) | ||||
Net decrease in mortgage loans held for sale | 46.9 | 174.2 | |||||
Increase in accounts payable, accrued expenses and other liabilities | 94.6 | 88.8 | |||||
Net cash used in operating activities | (113.8 | ) | (373.1 | ) | |||
INVESTING ACTIVITIES | |||||||
Expenditures for property and equipment | (21.6 | ) | (20.2 | ) | |||
Proceeds from sale of assets | 62.8 | 10.4 | |||||
Expenditures related to rental properties | (59.6 | ) | (11.4 | ) | |||
Return of investment in unconsolidated entities | 1.9 | 4.4 | |||||
Net principal increase of other mortgage loans and real estate owned | (0.6 | ) | (0.6 | ) | |||
Payments related to business acquisitions | (0.7 | ) | (293.0 | ) | |||
Net cash used in investing activities | (17.8 | ) | (310.4 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from notes payable | 495.7 | 578.3 | |||||
Repayment of notes payable | — | (276.1 | ) | ||||
Payments on mortgage repurchase facility, net | (38.6 | ) | (163.8 | ) | |||
Proceeds from stock associated with certain employee benefit plans | 4.1 | 8.6 | |||||
Cash paid for shares withheld for taxes | (17.3 | ) | (4.1 | ) | |||
Cash dividends paid | (64.6 | ) | (56.0 | ) | |||
Repurchases of common stock | (163.1 | ) | (140.6 | ) | |||
Distributions to noncontrolling interests, net | (0.4 | ) | (0.5 | ) | |||
Other financing activities | (2.3 | ) | — | ||||
Net cash provided by (used in) financing activities | 213.5 | (54.2 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 81.9 | (737.7 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 1,514.0 | 1,506.0 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,595.9 | $ | 768.3 |
December 31, 2019 | ||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other (2) | Eliminations (3) | Other Adjustments (4) | Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,152.9 | $ | 373.3 | $ | 37.5 | $ | 19.6 | $ | — | $ | — | $ | 1,583.3 | ||||||||||||||
Restricted cash | 6.6 | — | 5.9 | 0.1 | — | — | 12.6 | |||||||||||||||||||||
Inventories: | ||||||||||||||||||||||||||||
Construction in progress and finished homes | 5,603.3 | — | — | — | (23.2 | ) | — | 5,580.1 | ||||||||||||||||||||
Residential land and lots — developed, under development, held for development and held for sale | 5,282.3 | 1,066.8 | — | — | (32.1 | ) | 2.1 | 6,319.1 | ||||||||||||||||||||
10,885.6 | 1,066.8 | — | — | (55.3 | ) | 2.1 | 11,899.2 | |||||||||||||||||||||
Mortgage loans held for sale | — | — | 1,025.1 | — | — | — | 1,025.1 | |||||||||||||||||||||
Deferred income taxes, net | 140.1 | 11.8 | — | — | 8.2 | (6.0 | ) | 154.1 | ||||||||||||||||||||
Property and equipment, net | 292.8 | 0.9 | 3.1 | 267.6 | (1.0 | ) | — | 563.4 | ||||||||||||||||||||
Other assets | 864.4 | 27.1 | 59.7 | 46.1 | (86.1 | ) | 10.5 | 921.7 | ||||||||||||||||||||
Goodwill | 134.3 | — | — | — | — | 29.2 | 163.5 | |||||||||||||||||||||
$ | 13,476.7 | $ | 1,479.9 | $ | 1,131.3 | $ | 333.4 | $ | (134.2 | ) | $ | 35.8 | $ | 16,322.9 | ||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Accounts payable | $ | 624.7 | $ | 19.8 | $ | 1.4 | $ | 13.4 | $ | — | $ | — | $ | 659.3 | ||||||||||||||
Accrued expenses and other liabilities | 1,240.6 | 172.4 | 62.3 | 9.7 | (94.5 | ) | (13.1 | ) | 1,377.4 | |||||||||||||||||||
Notes payable | 2,470.0 | 462.1 | 850.2 | — | — | 1.0 | 3,783.3 | |||||||||||||||||||||
$ | 4,335.3 | $ | 654.3 | $ | 913.9 | $ | 23.1 | $ | (94.5 | ) | $ | (12.1 | ) | $ | 5,820.0 |
September 30, 2019 | ||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other (2) | Eliminations (3) | Other Adjustments (4) | Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,043.0 | $ | 382.8 | $ | 43.4 | $ | 25.1 | $ | — | $ | — | $ | 1,494.3 | ||||||||||||||
Restricted cash | 8.0 | — | 11.6 | 0.1 | — | — | 19.7 | |||||||||||||||||||||
Inventories: | ||||||||||||||||||||||||||||
Construction in progress and finished homes | 5,249.0 | — | — | — | (4.0 | ) | — | 5,245.0 | ||||||||||||||||||||
Residential land and lots — developed, under development, held for development and held for sale | 5,036.6 | 1,028.9 | — | — | (31.4 | ) | 2.9 | 6,037.0 | ||||||||||||||||||||
10,285.6 | 1,028.9 | — | — | (35.4 | ) | 2.9 | 11,282.0 | |||||||||||||||||||||
Mortgage loans held for sale | — | — | 1,072.0 | — | — | — | 1,072.0 | |||||||||||||||||||||
Deferred income taxes, net | 146.4 | 17.4 | — | — | 5.1 | (5.8 | ) | 163.1 | ||||||||||||||||||||
Property and equipment, net | 272.4 | 2.4 | 3.2 | 221.2 | — | — | 499.2 | |||||||||||||||||||||
Other assets | 826.2 | 24.2 | 68.3 | 71.5 | (88.5 | ) | 11.1 | 912.8 | ||||||||||||||||||||
Goodwill | 134.3 | — | — | — | — | 29.2 | 163.5 | |||||||||||||||||||||
$ | 12,715.9 | $ | 1,455.7 | $ | 1,198.5 | $ | 317.9 | $ | (118.8 | ) | $ | 37.4 | $ | 15,606.6 | ||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Accounts payable | $ | 598.6 | $ | 16.8 | $ | 7.0 | $ | 11.6 | $ | — | $ | — | $ | 634.0 | ||||||||||||||
Accrued expenses and other liabilities | 1,152.5 | 169.5 | 53.0 | 9.3 | (93.6 | ) | (12.6 | ) | 1,278.1 | |||||||||||||||||||
Notes payable | 2,047.6 | 460.5 | 888.9 | — | — | 2.4 | 3,399.4 | |||||||||||||||||||||
$ | 3,798.7 | $ | 646.8 | $ | 948.9 | $ | 20.9 | $ | (93.6 | ) | $ | (10.2 | ) | $ | 5,311.5 |
(1) | Amounts are presented on Forestar’s historical cost basis. |
(2) | Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting. |
(3) | Amounts represent the elimination of intercompany transactions. |
(4) | Amounts represent purchase accounting adjustments related to the Forestar acquisition. |
Three Months Ended December 31, 2019 | ||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other (2) | Eliminations (3) | Other Adjustments (4) | Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Home sales | $ | 3,863.3 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3,863.3 | ||||||||||||||
Land/lot sales and other | 19.7 | 247.2 | — | 8.8 | (221.2 | ) | — | 54.5 | ||||||||||||||||||||
Financial services | — | — | 102.9 | — | — | — | 102.9 | |||||||||||||||||||||
3,883.0 | 247.2 | 102.9 | 8.8 | (221.2 | ) | — | 4,020.7 | |||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||
Home sales (5) | 3,051.6 | — | — | — | (6.7 | ) | — | 3,044.9 | ||||||||||||||||||||
Land/lot sales and other | 13.3 | 216.3 | — | — | (193.4 | ) | (0.7 | ) | 35.5 | |||||||||||||||||||
Inventory and land option charges | 3.5 | 0.3 | — | — | — | — | 3.8 | |||||||||||||||||||||
3,068.4 | 216.6 | — | — | (200.1 | ) | (0.7 | ) | 3,084.2 | ||||||||||||||||||||
Selling, general and administrative expense | 358.4 | 10.5 | 77.9 | 8.8 | — | 0.2 | 455.8 | |||||||||||||||||||||
Loss (gain) on sale of assets | — | 0.1 | — | (31.2 | ) | — | — | (31.1 | ) | |||||||||||||||||||
Other (income) expense | (5.4 | ) | (2.2 | ) | (5.5 | ) | 1.6 | — | — | (11.5 | ) | |||||||||||||||||
Income before income taxes | $ | 461.6 | $ | 22.2 | $ | 30.5 | $ | 29.6 | $ | (21.1 | ) | $ | 0.5 | $ | 523.3 | |||||||||||||
Summary Cash Flow Information | ||||||||||||||||||||||||||||
Cash (used in) provided by operating activities | $ | (178.4 | ) | $ | (11.7 | ) | $ | 83.5 | $ | 3.9 | $ | (11.1 | ) | $ | — | $ | (113.8 | ) |
Three Months Ended December 31, 2018 | ||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other (2) | Eliminations (3) | Other Adjustments (4) | Consolidated | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Home sales | $ | 3,410.6 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3,410.6 | ||||||||||||||
Land/lot sales and other | 6.7 | 38.5 | — | 6.9 | (29.0 | ) | — | 23.1 | ||||||||||||||||||||
Financial services | — | — | 85.3 | — | — | — | 85.3 | |||||||||||||||||||||
3,417.3 | 38.5 | 85.3 | 6.9 | (29.0 | ) | — | 3,519.0 | |||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||
Home sales | 2,729.2 | — | — | — | (1.1 | ) | — | 2,728.1 | ||||||||||||||||||||
Land/lot sales and other | 5.1 | 30.7 | — | — | (24.4 | ) | 3.6 | 15.0 | ||||||||||||||||||||
Inventory and land option charges | 8.0 | — | — | — | — | — | 8.0 | |||||||||||||||||||||
2,742.3 | 30.7 | — | — | (25.5 | ) | 3.6 | 2,751.1 | |||||||||||||||||||||
Selling, general and administrative expense | 324.7 | 5.7 | 65.6 | 6.7 | — | 0.1 | 402.8 | |||||||||||||||||||||
Gain on sale of assets | (2.0 | ) | (0.9 | ) | — | — | — | 0.9 | (2.0 | ) | ||||||||||||||||||
Other (income) expense | (2.0 | ) | (1.9 | ) | (3.9 | ) | (0.8 | ) | — | — | (8.6 | ) | ||||||||||||||||
Income before income taxes | $ | 354.3 | $ | 4.9 | $ | 23.6 | $ | 1.0 | $ | (3.5 | ) | $ | (4.6 | ) | $ | 375.7 | ||||||||||||
Summary Cash Flow Information | ||||||||||||||||||||||||||||
Cash (used in) provided by operating activities | $ | (396.8 | ) | $ | (164.1 | ) | $ | 193.8 | $ | (1.6 | ) | $ | — | $ | (4.4 | ) | $ | (373.1 | ) |
(1) | Results are presented on Forestar’s historical cost basis. |
(2) | Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting. |
(3) | Amounts represent the elimination of intercompany transactions. |
(4) | Amounts represent purchase accounting adjustments related to the Forestar acquisition. |
(5) | Amount in the Eliminations column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers. |
NET SALES ORDERS | ||||||||||||
Three Months Ended December 31, | ||||||||||||
2019 | 2018 | |||||||||||
Homes | Value | Homes | Value | |||||||||
East | 1,841 | $ | 546.8 | 1,570 | $ | 444.9 | ||||||
Midwest | 714 | 255.4 | 532 | 196.9 | ||||||||
Southeast | 4,374 | 1,191.8 | 3,616 | 963.3 | ||||||||
South Central | 3,775 | 964.2 | 3,395 | 855.8 | ||||||||
Southwest | 667 | 199.7 | 530 | 134.9 | ||||||||
West | 1,755 | 791.9 | 1,399 | 629.4 | ||||||||
13,126 | $ | 3,949.8 | 11,042 | $ | 3,225.2 |
HOMES CLOSED | ||||||||||||
Three Months Ended December 31, | ||||||||||||
2019 | 2018 | |||||||||||
Homes | Value | Homes | Value | |||||||||
East | 1,798 | $ | 520.4 | 1,558 | $ | 445.9 | ||||||
Midwest | 813 | 282.2 | 671 | 244.7 | ||||||||
Southeast | 4,231 | 1,149.3 | 3,783 | 1,013.4 | ||||||||
South Central | 3,780 | 958.0 | 3,478 | 872.4 | ||||||||
Southwest | 663 | 196.0 | 561 | 143.6 | ||||||||
West | 1,674 | 757.4 | 1,449 | 690.6 | ||||||||
12,959 | $ | 3,863.3 | 11,500 | $ | 3,410.6 |
SALES ORDER BACKLOG | ||||||||||||
As of December 31, | ||||||||||||
2019 | 2018 | |||||||||||
Homes | Value | Homes | Value | |||||||||
East | 1,959 | $ | 602.5 | 1,915 | $ | 569.0 | ||||||
Midwest | 964 | 337.8 | 893 | 302.9 | ||||||||
Southeast | 4,420 | 1,262.0 | 4,054 | 1,122.1 | ||||||||
South Central | 4,161 | 1,090.2 | 4,409 | 1,135.2 | ||||||||
Southwest | 819 | 245.4 | 897 | 242.9 | ||||||||
West | 1,457 | 688.7 | 1,397 | 664.2 | ||||||||
13,780 | $ | 4,226.6 | 13,565 | $ | 4,036.3 |
HOMES IN INVENTORY | ||||
As of December 31, | ||||
2019 | 2018 | |||
East | 4,200 | 4,500 | ||
Midwest | 2,300 | 2,300 | ||
Southeast | 9,300 | 9,600 | ||
South Central | 9,000 | 9,200 | ||
Southwest | 1,400 | 1,700 | ||
West | 4,000 | 4,500 | ||
30,200 | 31,800 |