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

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

Business Wire

FORT WORTH, Texas -- November 12, 2012

D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net
income for its fourth fiscal quarter ended September 30, 2012 increased 180%
to $100.1 million, or $0.30 per diluted share. Net income for the same quarter
of fiscal 2011 was $35.7 million, or $0.11 per diluted share. Homebuilding
revenue for the fourth quarter of fiscal 2012 increased 21% to $1.3 billion
from $1.1 billion in the same quarter of 2011. Homes closed in the quarter
increased 12% to 5,575, compared to 4,987 homes in the year ago quarter.

For the fiscal year ended September 30, 2012, net income increased to $956.3
million, or $2.77 per diluted share. The fiscal year results included a tax
benefit of $713.4 million, primarily due to a reduction of the Company’s
valuation allowance for its deferred tax asset. Net income for fiscal 2011 was
$71.8 million, or $0.23 per diluted share, which included a tax benefit of
$59.7 million. Homebuilding revenue for fiscal 2012 increased 19% to $4.2
billion from $3.5 billion in fiscal 2011. Homes closed in fiscal 2012
increased 13% to 18,890 homes, compared to 16,695 homes in fiscal 2011.

Net sales orders for the fourth quarter ended September 30, 2012 increased 24%
to 5,276 homes from 4,241 homes in the year ago quarter and the value of net
sales orders increased 35% to $1.3 billion from $0.9 billion. The Company’s
cancellation rate (cancelled sales orders divided by gross sales orders) for
the fourth quarter of fiscal 2012 was 27%. Net sales orders for fiscal 2012
increased 21% to 21,048 homes from 17,421 homes in fiscal 2011, and the value
of net sales orders increased 29% to $4.8 billion from $3.7 billion.

The Company’s sales order backlog of homes under contract at September 30,
2012 increased 49% to 7,240 homes from 4,854 homes at September 30, 2011. The
value of the backlog increased 61% to $1.7 billion at September 30, 2012 from
$1.0 billion a year ago.

During the fourth quarter, the Company issued $350 million principal amount of
4.375% senior notes due September 2022. The Company ended the fiscal year with
$1.3 billion of homebuilding unrestricted cash and marketable securities and
net homebuilding debt to total capital of 21.4%. Net homebuilding debt to
total capital consists of homebuilding notes payable net of cash and
marketable securities divided by total equity plus homebuilding notes payable
net of cash and marketable securities.

The Company also entered into a five-year, $125 million senior unsecured
revolving credit facility in September 2012. Subsequent to fiscal year-end,
the Company amended the facility and obtained additional lending commitments
which increased the capacity of the facility to $600 million. The facility’s
uncommitted accordion feature was also amended to allow an increase in the
size of the facility to $1 billion.

The Company has declared a quarterly cash dividend of $0.0375 per share. The
dividend is payable on December 17, 2012 to stockholders of record on December
3, 2012.

Donald R. Horton, Chairman of the Board, said, “Our fiscal 2012 financial
results reflect continued improvement in the housing market and in our
company’s performance. Our fourth quarter pre-tax income of $99.2 million was
our highest in 22 quarters and contributed to our fiscal 2012 pre-tax income
of $242.9 million, the highest since fiscal 2006. Both our fourth quarter and
the fiscal year experienced significant year-over-year improvements in net
homes sold, homes closed, home sales gross margin, SG&A expense ratio and
financial services profitability. As our operating metrics and demand for
homes in most of our markets have improved, we have increased our investments
in homes, finished lots, land and land development. Our increased investments
include the acquisition of the homebuilding assets of Breland Homes during the
quarter. Even with our increased inventory investments, our balance sheet
remains strong with net homebuilding leverage of 21.4% and unrestricted
homebuilding cash and marketable securities totaling $1.3 billion.

“We are positioned for a strong start to fiscal 2013, with our highest
year-end backlog since fiscal 2007. We have continued to see strong sales
demand through October and into November. With 13,000 homes in inventory and
60,000 finished lots controlled, we have the home and lot position to continue
to grow our market share and meet increasing customer demand. We look forward
to continued improvement in our operating metrics and increased profitability
in fiscal 2013.”

The Company will host a conference call today (Monday, November 12th) 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 www.drhorton.com on the “Investors”
page.

D.R. Horton, Inc., America’s Builder, is the largest homebuilder in the United
States, based on its 18,890 homes closed during its fiscal year ended
September 30, 2012. Founded in 1978 in Fort Worth, Texas, D.R. Horton has
operations in 77 markets in 26 states in the East, Midwest, Southeast, South
Central, Southwest and West regions of the United States. The Company is
engaged in the construction and sale of high quality homes with sales prices
ranging from $100,000 to over $600,000. 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 we are positioned for
a strong start to fiscal 2013 and that with 13,000 homes in inventory and
60,000 finished lots controlled, we have the home and lot position to continue
to grow our market share and meet increasing customer demand. The
forward-looking statements also include that we look forward to continued
improvement in our operating metrics and increased profitability in fiscal
2013.

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: potential deterioration in homebuilding industry conditions
and the current weak U.S. economy; the cyclical nature of the homebuilding
industry and changes in general 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 for acquiring
land, building materials and skilled labor; reductions in the availability of
performance bonds; increases 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; our debt obligations 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; the
impact of an inflationary or deflationary environment; our ability to realize
the full amount of our deferred income tax asset; 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)
                                                                   
                                                   September 30,
                                                   2012           2011
ASSETS                                             (In millions)
Homebuilding:
Cash and cash equivalents                          $ 1,030.4       $ 715.5
Marketable securities, available-for-sale            298.0           297.6
Restricted cash                                      49.3            49.1
Inventories:
Construction in progress and finished homes          1,682.7         1,369.2
Residential land and lots - developed and            1,838.4         1,370.7
under development
Land held for development                           644.1         709.8   
                                                     4,165.2         3,449.7
Income taxes receivable                              14.4            12.4
Deferred income taxes, net of valuation
allowance of $41.9 million and $848.5 million        709.5           -
at September 30, 2012 and 2011, respectively
Property and equipment, net                          72.6            57.6
Other assets                                         456.8           398.4
Goodwill                                            38.9          15.9    
                                                    6,835.1       4,996.2 
Financial Services:
Cash and cash equivalents                            17.3            17.1
Mortgage loans held for sale                         345.3           294.1
Other assets                                        50.5          51.0    
                                                    413.1         362.2   
                                                   $ 7,248.2      $ 5,358.4 
LIABILITIES
Homebuilding:
Accounts payable                                   $ 216.2         $ 154.0
Accrued expenses and other liabilities               893.8           829.8
Notes payable                                       2,305.3       1,588.1 
                                                    3,415.3       2,571.9 
Financial Services:
Accounts payable and other liabilities               50.4            46.5
Mortgage repurchase facility                        187.8         116.5   
                                                    238.2         163.0   
                                                    3,653.5       2,734.9 
                                                                   
EQUITY
Common stock                                         3.3             3.2
Additional paid-in capital                           1,979.8         1,917.0
Retained earnings                                    1,743.1         834.6
Treasury stock, at cost                              (134.3  )       (134.3  )
Accumulated other comprehensive income              0.2           0.1     
                                                     3,592.1         2,620.6
Noncontrolling interests                            2.6           2.9     
                                                    3,594.7       2,623.5 
                                                   $ 7,248.2      $ 5,358.4 

                   
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
                                                               
                       Three Months Ended              Fiscal Year Ended
                       September 30,                   September 30,
                       2012            2011            2012            2011
                       (In millions, except per share data)
Homebuilding:
Revenues:
Home sales             $ 1,288.3       $ 1,073.7       $ 4,218.4       $ 3,542.3
Land/lot sales and      10.5          0.4           17.8          7.3     
other
                                                                       
                        1,298.8       1,074.1       4,236.2       3,549.6 
Cost of sales:
Home sales               1,055.6         901.1           3,472.9         2,971.0
Land/lot sales and       9.2             0.2             13.3            6.9
other
Inventory
impairments and         1.5           12.8          6.2           45.4    
land option cost
write-offs
                                                                       
                        1,066.3       914.1         3,492.4       3,023.3 
Gross profit:
Home sales               232.7           172.6           745.5           571.3
Land/lot sales and       1.3             0.2             4.5             0.4
other
Inventory
impairments and         (1.5    )      (12.8   )      (6.2    )      (45.4   )
land option cost
write-offs
                                                                       
                        232.5         160.0         743.8         526.3   
                                                                       
Selling, general
and administrative       145.9           124.2           528.7           480.0
expense
Interest expense         4.9             9.5             23.6            50.5
(Gain) loss on
early retirement         -               0.1             (0.1    )       10.8
of debt, net
Other (income)          (4.0    )      (1.2    )      (12.1   )      (8.0    )
                                                                       
Operating income
(loss) from             85.7          27.4          203.7         (7.0    )
Homebuilding
                                                                       
Financial
Services:
Revenues, net of
recourse and             37.4            24.2            117.8           87.2
reinsurance
expense
General and
administrative           25.6            20.0            85.5            76.3
expense
Interest expense         0.9             0.6             3.3             1.4
Interest and other      (2.6    )      (2.8    )      (10.2   )      (9.6    )
(income)
                                                                       
Operating income
from Financial          13.5          6.4           39.2          19.1    
Services
                                                                       
Income before            99.2            33.8            242.9           12.1
income taxes
Income tax benefit      (0.9    )      (1.9    )      (713.4  )      (59.7   )
                                                                       
Net income             $ 100.1        $ 35.7         $ 956.3        $ 71.8    
Other
comprehensive
income (loss), net
of income tax:
Unrealized gain
(loss) related to       0.2           (0.2    )      0.1           (0.2    )
available-for-sale
securities
Comprehensive          $ 100.3        $ 35.5         $ 956.4        $ 71.6    
income
                                                                       
Basic:
Net income per         $ 0.31         $ 0.11         $ 3.01         $ 0.23    
share
Weighted average
number of common        319.6         316.0         318.1         318.3   
shares
                                                                       
Diluted:
Net income per         $ 0.30         $ 0.11         $ 2.77         $ 0.23    
share
Numerator for
diluted income per
share after            $ 109.8        $ 35.7         $ 993.1        $ 71.8    
assumed
conversions
Adjusted weighted
average number of       362.8         316.2         359.0         318.5   
common shares
                                                                       
Other Consolidated
Financial Data:
                                                                       
Interest amortized
to home and            $ 27.6         $ 25.1         $ 94.0         $ 90.8    
land/lot cost of
sales
Depreciation           $ 4.4          $ 5.0          $ 18.8         $ 19.9    
Interest incurred      $ 34.6         $ 30.3         $ 124.1        $ 131.6   

                                                              
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                                   
                                                                   
                                                   Fiscal Year Ended
                                                   September 30,
                                                   2012            2011
                                                   (In millions)
Operating Activities
Net income                                         $ 956.3         $ 71.8
Adjustments to reconcile net income to net
cash (used in) provided by operating
activities:
Depreciation                                         18.8            19.9
Amortization of discounts and fees                   40.4            37.2
Stock based compensation expense                     18.1            14.2
Deferred income taxes                                (709.5  )       -
(Gain) loss on early retirement of debt, net         (0.1    )       10.8
Gain on sale of marketable securities                (0.2    )       (0.1    )
Inventory impairments and land option cost           6.2             45.4
write-offs
Changes in operating assets and liabilities:
Increase in construction in progress and             (275.4  )       (91.4   )
finished homes
(Increase) decrease in residential land and
lots — developed, under development, and held        (371.0  )       16.9
for development
(Increase) decrease in other assets                  (42.1   )       28.7
(Increase) decrease in income taxes receivable       (2.0    )       3.6
Increase in mortgage loans held for sale             (51.2   )       (40.3   )
Increase (decrease) in accounts payable,            123.0         (101.8  )
accrued expenses and other liabilities
Net cash (used in) provided by operating            (288.7  )      14.9    
activities
Investing Activities
Purchases of property and equipment                  (33.6   )       (16.3   )
Purchases of marketable securities                   (240.8  )       (300.1  )
Proceeds from the sale or maturity of                232.8           292.5
marketable securities
(Increase) decrease in restricted cash               (0.2    )       4.6
Acquisition of a business                           (105.9  )      -       
Net cash used in investing activities               (147.7  )      (19.3   )
Financing Activities
Proceeds from notes payable                          765.9           30.0
Repayment of notes payable                           (17.5   )       (519.3  )
Proceeds from stock associated with certain          50.9            3.4
employee benefit plans
Cash dividends paid                                  (47.8   )       (47.8   )
Purchase of treasury stock                          -             (38.6   )
Net cash provided by (used in) financing            751.5         (572.3  )
activities
Increase (Decrease) in Cash and Cash                 315.1           (576.7  )
Equivalents
Cash and cash equivalents at beginning of year      732.6         1,309.3 
Cash and cash equivalents at end of year           $ 1,047.7      $ 732.6   

                                                                                    
D.R. HORTON, INC.
($'s in millions)
                                                                                   
NET SALES ORDERS
                                                                                                  
              Three Months Ended September 30,                Fiscal Year Ended September 30,
              2012                    2011                    2012                     2011
              Homes     Value         Homes     Value         Homes      Value         Homes      Value
East          558       $ 144.3       509       $ 126.2       2,244      $ 565.3       2,066      $ 482.6
Midwest       330         99.5        247         69.8        1,301        386.2       1,005        272.0
Southeast     1,497       315.1       998         195.2       5,378        1,101.9     4,019        776.1
South         1,574       308.2       1,498       270.5       6,822        1,282.3     6,169        1,092.2
Central
Southwest     371         77.6        352         66.1        1,715        327.7       1,284        239.6
West          946        309.9       637        199.8       3,588       1,139.9     2,878       865.1
              5,276     $ 1,254.6     4,241     $ 927.6       21,048     $ 4,803.3     17,421     $ 3,727.6
                                                                                                  
HOMES CLOSED
                                                                                                  
              Three Months Ended September 30,                Fiscal Year Ended September 30,
              2012                    2011                    2012                     2011
              Homes    Value         Homes     Value         Homes      Value         Homes      Value
East          572       $ 149.4       557       $ 129.5       2,187      $ 542.4       1,932      $ 438.4
Midwest       396         121.4       264         74.9        1,164        339.3       964          261.5
Southeast     1,369       280.6       1,089       212.0       4,682        930.7       3,546        691.8
South         1,736       325.2       1,862       328.4       6,300        1,158.4     6,150        1,080.0
Central
Southwest     464         88.5        366         70.7        1,442        269.4       1,263        234.8
West          1,038      323.2       849        258.2       3,115       978.2       2,840       835.8
              5,575     $ 1,288.3     4,987     $ 1,073.7     18,890     $ 4,218.4     16,695     $ 3,542.3
                                                                                                  
                                      SALES ORDER BACKLOG
                                                                                                  
                                      As of September 30,
                                      2012                    2011
                                      Homes     Value         Homes      Value
                    East              663       $ 170.5       606        $ 147.6
                    Midwest           425         127.4       288          80.6
                    Southeast         2,209       465.0       1,285        246.9
                    South Central     2,232       433.5       1,710        309.5
                    Southwest         699         134.9       426          76.6
                    West              1,012      336.6       539         175.0
                                      7,240     $ 1,667.9     4,854      $ 1,036.2

Contact:

D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Director of Investor Relations
 
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