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D.R. Horton, Inc., America’s Builder, Reports Fiscal 2012 Second Quarter Results And Declares Quarterly Dividend

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 continuing downturn in the homebuilding industry, including further deterioration in industry or broader economic conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; the reduction in availability of mortgage financing, increases in mortgage interest rates and the effects of government programs; the limited success of our strategies in responding to adverse conditions in the industry; the impact of an inflationary or deflationary environment; changes in general economic, real estate and other business conditions; the risks associated with our inventory ownership position in changing market conditions; supply risks for land, materials and labor; changes in the costs of owning a home; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulation on our financial services operations; the uncertainties inherent in home warranty and construction defect claims matters; our substantial debt and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within our industry; our ability to effect any future growth strategies successfully; our ability to realize our deferred income tax asset; our ability to utilize our tax losses, which could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code; 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.

WEBSITE ADDRESS: www.drhorton.com

 
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
       
March 31, September 30,
2012       2011
ASSETS (In millions)
Homebuilding:
Cash and cash equivalents $ 662.2 $ 715.5
Marketable securities, available-for-sale 299.1 297.6
Restricted cash 40.7 49.1
Inventories:
Construction in progress and finished homes 1,441.1 1,369.2
Residential land and lots - developed and under development 1,495.1 1,370.7
Land held for development   700.5     709.8  
3,636.7 3,449.7
Income taxes receivable 12.9 12.4

Deferred income taxes, net of valuation allowance of $816.4 million and $848.5 millionat March 31, 2012 and September 30, 2011, respectively

- -
Property and equipment, net 53.4 57.6
Other assets 400.4 398.4
Goodwill   15.9     15.9  
  5,121.3     4,996.2  
Financial Services:
Cash and cash equivalents 17.6 17.1
Mortgage loans held for sale 297.3 294.1
Other assets   48.7     51.0  
  363.6     362.2  
$ 5,484.9   $ 5,358.4  
LIABILITIES
Homebuilding:
Accounts payable $ 166.1 $ 154.0
Accrued expenses and other liabilities 821.1 829.8
Notes payable   1,592.9     1,588.1  
  2,580.1     2,571.9  
Financial Services:
Accounts payable and other liabilities 38.0 46.5
Mortgage repurchase facility   163.8     116.5  
  201.8     163.0  
  2,781.9     2,734.9  
 
EQUITY
Common stock 3.3 3.2
Additional paid-in capital 1,951.8 1,917.0
Retained earnings 879.1 834.6
Treasury stock, at cost (134.3 ) (134.3 )
Accumulated other comprehensive income   0.1     0.1  
2,700.0 2,620.6
Noncontrolling interests   3.0     2.9  
  2,703.0     2,623.5  
$ 5,484.9   $ 5,358.4  
 
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
             
Three months ended Six months ended
March 31, March 31,
2012 2011 2012 2011

 

(In millions, except per share data)

Homebuilding:
Revenues:
Home sales $ 930.6 $ 733.0 $ 1,814.9 $ 1,494.1
Land/lot sales   5.0     0.1     6.3     6.0  
 
  935.6     733.1     1,821.2     1,500.1  
Cost of sales:
Home sales 767.2 613.9 1,502.7 1,256.4
Land/lot sales 3.2 0.1 3.2 6.0
Inventory impairments and land option cost write-offs   0.8     14.3     2.2     22.7  
 
  771.2     628.3     1,508.1     1,285.1  
Gross profit:
Home sales 163.4 119.1 312.2 237.7
Land/lot sales 1.8 - 3.1 -
Inventory impairments and land option cost write-offs   (0.8 )   (14.3 )   (2.2 )   (22.7 )
 
  164.4     104.8     313.1     215.0  
 
Selling, general and administrative expense 127.5 123.2 246.5 242.0
Interest expense 5.5 14.7 12.5 31.0
Loss (gain) on early retirement of debt, net - 2.7 (0.1 ) 4.2
Other (income)   (3.2 )   (3.4 )   (5.5 )   (5.6 )
 
Operating income (loss) from Homebuilding   34.6     (32.4 )   59.7     (56.6 )
 
Financial Services:
Revenues, net of recourse and reinsurance expense 25.6 18.0 46.6 39.2
General and administrative expense 19.6 18.2 38.5 37.1
Interest expense 0.8 0.1 1.7 0.4
Interest and other (income)   (2.5 )   (1.9 )   (5.4 )   (4.2 )
 
Operating income from Financial Services   7.7     1.6     11.8     5.9  
 
Income (loss) before income taxes 42.3 (30.8 ) 71.5 (50.7 )
Income tax expense (benefit)   1.7     (58.6 )   3.2     (58.1 )
 
Net income $ 40.6   $ 27.8   $ 68.3   $ 7.4  
 
Other comprehensive income (loss), net of income tax:
Unrealized loss related to available-for-sale securities   (0.1 )   -     -     (0.3 )
 
Comprehensive income $ 40.5   $ 27.8   $ 68.3   $ 7.1  
 
Basic:
Net income per share $ 0.13   $ 0.09   $ 0.22   $ 0.02  
Weighted average number of common shares   317.6     319.3     317.0     319.2  
 
Diluted:
Net income per share $ 0.13   $ 0.09   $ 0.21   $ 0.02  
Adjusted weighted average number of common shares   320.1     319.9     318.3     319.5  
 
 
Other Consolidated Financial Data:
 
Interest amortized to home and land/lot cost of sales $ 21.3   $ 19.5   $ 41.7   $ 40.4  
Depreciation $ 4.8   $ 5.0   $ 9.8   $ 9.9  
Interest incurred $ 28.9   $ 34.0   $ 57.8   $ 69.6  
 
D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
   
 
Six Months Ended
March 31, 2012
(In millions)
 
Operating Activities
Net income $ 68.3

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation 9.8
Amortization of discounts and fees 19.7
Stock based compensation expense 10.1
Gain on early retirement of debt, net (0.1 )
Gain on sale of marketable securities (0.2 )
Inventory impairments and land option cost write-offs 2.2
Changes in operating assets and liabilities:
Increase in construction in progress and finished homes (72.2 )

Increase in residential land and lots — developed, under development, and held for development

(112.8 )
Increase in other assets (1.7 )
Increase in income taxes receivable (0.5 )
Increase in mortgage loans held for sale (3.2 )
Decrease in accounts payable, accrued expenses and other liabilities   (2.0 )
Net cash used in operating activities   (82.6 )
Investing Activities
Purchases of property and equipment (5.5 )
Purchases of marketable securities (162.8 )
Proceeds from the sale or maturity of marketable securities 157.5
Decrease in restricted cash   8.4  
Net cash used in investing activities   (2.4 )
Financing Activities
Proceeds from notes payable 47.3
Repayment of notes payable (12.9 )
Proceeds from stock associated with certain employee benefit plans 21.6
Cash dividends paid   (23.8 )
Net cash provided by financing activities 32.2
Decrease in Cash and Cash Equivalents (52.8 )
Cash and cash equivalents at beginning of period   732.6  
Cash and cash equivalents at end of period $ 679.8  
 

 

 

D.R. HORTON, INC.

 

 

($'s in millions)

               
 
NET SALES ORDERS
 
Three Months Ended March 31, Six Months Ended March 31,
2012 2011 2012 2011
Homes Value Homes Value Homes Value Homes Value
 
East 611 $ 153.7 603 $ 135.4 1,120 $ 269.1 1,003 $ 223.4
Midwest 402 116.6 269 68.0 615 175.6 455 119.2
Southeast 1,473 300.0 1,143 216.2 2,394 481.1 1,912 365.0
South Central 2,017 370.7 1,843 318.3 3,316 603.9 3,005 523.0
Southwest 527 95.8 349 64.3 776 142.7 604 111.7
West 869   276.7 736   224.7 1,472   464.3 1,327   390.3
 
5,899 $ 1,313.5 4,943 $ 1,026.9 9,693 $ 2,136.7 8,306 $ 1,732.6
 
 
 
HOMES CLOSED
 
Three Months Ended March 31, Six Months Ended March 31,
2012 2011 2012 2011
Homes Value Homes Value Homes Value Homes Value
 
East 551 $ 133.6 428 $ 93.5 1,046 $ 252.4 867 $ 194.3
Midwest 247 71.7 209 54.9 460 129.4 424 112.7
Southeast 1,096 213.1 714 141.7 2,109 408.7 1,461 285.5
South Central 1,417 259.8 1,323 228.1 2,909 526.5 2,626 457.0
Southwest 307 55.6 274 50.0 586 109.6 586 108.1
West 622   196.8 568   164.8 1,248   388.3 1,189   336.5
 
4,240 $ 930.6 3,516 $ 733.0 8,358 $ 1,814.9 7,153 $ 1,494.1
 
 
 
SALES ORDER BACKLOG

 

As of March 31,
2012 2011
Homes Value Homes Value
 
East 680 $ 164.3 608 $ 132.6
Midwest 443 126.8 278 76.6
Southeast 1,570 319.3 1,263 242.0
South Central 2,117 387.0 2,070 363.2
Southwest 616 109.7 423 75.5
West 763   250.9 639   199.4
 
6,189 $ 1,358.0 5,281 $ 1,089.3




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