D.R. Horton, Inc., America’s Builder, Reports Fiscal 2013 First Quarter Earnings Business Wire FORT WORTH, Texas -- January 29, 2013 D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its first fiscal quarter ended December 31, 2012 increased 139% to $66.3 million, or $0.20 per diluted share. Net income for the same quarter of fiscal 2012 was $27.7 million, or $0.09 per diluted share. Homebuilding revenue for the first quarter of fiscal 2013 increased 39% to $1.2 billion from $0.9 billion in the same quarter of 2012. Homes closed in the quarter increased 26% to 5,182, compared to 4,118 homes in the year-ago quarter. Net sales orders for the first quarter ended December 31, 2012 increased 39% to 5,259 homes from 3,794 homes in the year-ago quarter and the value of net sales orders increased 60% to $1.3 billion from $0.8 billion. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the first quarter of fiscal 2013 was 22%. The Company’s sales order backlog of homes under contract at December 31, 2012 increased 62% to 7,317 homes from 4,530 homes at December 31, 2011. The value of the backlog increased 80% to $1.8 billion at December 31, 2012 from $1.0 billion a year ago. The Company ended the quarter with $643.1 million of homebuilding unrestricted cash and marketable securities and net homebuilding debt to total capital of 33.0%. 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. Donald R. Horton, Chairman of the Board, said, “This quarter was our most profitable first quarter since 2007, with $107.9 million of pre-tax income, a 270% increase from the year-ago quarter. We experienced substantial increases in the number of homes sold, closed and in backlog compared to the year-ago quarter. At the same time, our average sales price has increased due to pricing power, geographic mix and larger average home size. As a result, we achieved dollar value increases in homes sold of 60%, homes closed of 38% and backlog of 80%. “We experienced broad improvement in demand in most of our markets this quarter, and we significantly increased our investments in homes under construction, finished lots, land and land development to capture this increasing demand. D.R. Horton is the best positioned it has been in its 35 year history. We are looking forward to the spring selling season with optimism.” The Company will host a conference call today (Tuesday, January 29^th) at 10:00 a.m. Eastern time. The dial-in number is 877-407-8033, and the call will also be webcast from 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 19,954 homes closed in the twelve-month period ended December 31, 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 D.R. Horton is the best positioned it has been in its 35 year history and that we are looking forward to the spring selling season with optimism. 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 the homebuilding and financial services industries; 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 which is filed with the Securities and Exchange Commission. WEBSITE ADDRESS: www.drhorton.com D.R. HORTON, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, September 30, 2012 2012 ASSETS (In millions) Homebuilding: Cash and cash equivalents $ 546.4 $ 1,030.4 Marketable securities, available-for-sale 96.7 298.0 Restricted cash 54.8 49.3 Inventories: Construction in progress and finished 1,909.5 1,682.7 homes Residential land and lots - developed and 2,475.7 1,838.4 under development Land held for development 629.9 644.1 5,015.1 4,165.2 Income taxes receivable - 14.4 Deferred income taxes, net of valuation allowance of $41.9 million at December 683.5 709.5 31, 2012 and September 30, 2012 Property and equipment, net 81.9 72.6 Other assets 454.2 456.8 Goodwill 38.9 38.9 6,971.5 6,835.1 Financial Services: Cash and cash equivalents 20.5 17.3 Mortgage loans held for sale 307.9 345.3 Other assets 47.4 50.5 375.8 413.1 $ 7,347.3 $ 7,248.2 LIABILITIES Homebuilding: Accounts payable $ 241.8 $ 216.2 Accrued expenses and other liabilities 856.6 893.8 Notes payable 2,424.3 2,305.3 3,522.7 3,415.3 Financial Services: Accounts payable and other liabilities 42.1 50.4 Mortgage repurchase facility 169.4 187.8 211.5 238.2 3,734.2 3,653.5 EQUITY Common stock 3.3 3.3 Additional paid-in capital 1,992.2 1,979.8 Retained earnings 1,749.2 1,743.1 Treasury stock, at cost (134.3 ) (134.3 ) Accumulated other comprehensive income - 0.2 3,610.4 3,592.1 Noncontrolling interests 2.7 2.6 3,613.1 3,594.7 $ 7,347.3 $ 7,248.2 D.R. HORTON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended December 31, 2012 2011 (In millions, except per share data) Homebuilding: Revenues: Home sales $ 1,223.3 $ 884.3 Land/lot sales and other 9.9 1.3 1,233.2 885.6 Cost of sales: Home sales 992.8 735.6 Land/lot sales and other 8.2 - Inventory impairments and land option cost 1.3 1.4 write-offs 1,002.3 737.0 Gross profit: Home sales 230.5 148.7 Land/lot sales and other 1.7 1.3 Inventory impairments and land option cost (1.3 ) (1.4 ) write-offs 230.9 148.6 Selling, general and administrative 140.8 119.0 expense Interest expense 3.2 6.9 Gain on early retirement of debt, - (0.1 ) net Other (income) (3.3 ) (2.2 ) Operating income from Homebuilding 90.2 25.0 Financial Services: Revenues, net of recourse and 41.9 21.0 reinsurance expense General and administrative expense 25.7 18.9 Interest expense 1.0 0.9 Interest and other (income) (2.5 ) (3.0 ) Operating income from Financial 17.7 4.2 Services Income before income taxes 107.9 29.2 Income tax expense 41.6 1.5 Net income $ 66.3 $ 27.7 Other comprehensive income (loss), net of income tax: Unrealized (loss) gain related to (0.1 ) 0.1 available-for-sale securities Comprehensive income $ 66.2 $ 27.8 Basic: Net income per share $ 0.21 $ 0.09 Weighted average number of common 321.1 316.3 shares Diluted: Net income per share $ 0.20 $ 0.09 Numerator for diluted income per share after $ 72.0 $ 27.7 assumed conversions Adjusted weighted average number of 364.1 316.5 common shares Other Consolidated Financial Data: Interest amortized to home and $ 24.9 $ 20.4 land/lot cost of sales Depreciation and amortization $ 4.8 $ 5.0 Interest incurred $ 38.1 $ 28.8 D.R. HORTON, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three Months Ended December 31, 2012 (In millions) Operating Activities Net income $ 66.3 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 4.8 Amortization of discounts and fees 10.4 Stock based compensation expense 3.5 Deferred income taxes 35.2 Gain on sale of marketable securities (0.2 ) Inventory impairments and land option cost write-offs 1.3 Changes in operating assets and liabilities: Increase in construction in progress and finished (226.8 ) homes Increase in residential land and lots — developed, under development, and held for development (612.8 ) Decrease in other assets 22.8 Decrease in income taxes receivable 14.4 Decrease in mortgage loans held for sale 37.4 Decrease in accounts payable, accrued expenses and (12.8 ) other liabilities Net cash used in operating activities (656.5 ) Investing Activities Purchases of property and equipment (14.0 ) Purchases of marketable securities (26.8 ) Proceeds from the sale or maturity of marketable 226.7 securities Increase in restricted cash (5.5 ) Net principal increase of other mortgage loans and real estate owned (0.2 ) Purchases of debt securities collateralized by (18.6 ) residential real estate Payment related to acquisition of a business (9.4 ) Net cash provided by investing activities 152.2 Financing Activities Proceeds from notes payable 100.0 Repayment of notes payable (18.4 ) Proceeds from stock associated with certain employee 2.1 benefit plans Cash dividends paid (60.2 ) Net cash provided by financing activities 23.5 Decrease in Cash and Cash Equivalents (480.8 ) Cash and cash equivalents at beginning of period 1,047.7 Cash and cash equivalents at end of period $ 566.9 D.R. HORTON, INC. ($'s in millions) NET SALES ORDERS Three Months Ended December 31, 2012 2011 Homes Value Homes Value East 528 $ 141.4 509 $ 115.3 Midwest 275 89.9 213 59.1 Southeast 1,584 353.5 921 181.1 South Central 1,641 330.6 1,299 233.2 Southwest 247 53.2 249 46.9 West 984 345.5 603 187.6 5,259 $ 1,314.1 3,794 $ 823.2 HOMES CLOSED Three Months Ended December 31, 2012 2011 Homes Value Homes Value East 517 $ 137.4 495 $ 118.8 Midwest 287 89.4 213 57.7 Southeast 1,374 291.3 1,013 195.6 South Central 1,619 309.3 1,492 266.7 Southwest 383 76.0 279 54.0 West 1,002 319.9 626 191.5 5,182 $ 1,223.3 4,118 $ 884.3 SALES ORDER BACKLOG As of December 31, 2012 2011 Homes Value Homes Value East 674 $ 174.6 620 $ 144.1 Midwest 413 127.9 288 81.9 Southeast 2,419 527.1 1,193 232.4 South Central 2,254 454.8 1,517 276.0 Southwest 563 112.1 396 69.5 West 994 362.2 516 171.1 7,317 $ 1,758.7 4,530 $ 975.0 Contact: D.R. Horton, Inc. Jessica Hansen, 817-390-8200 Vice President of Communications
D.R. Horton, Inc., America’s Builder, Reports Fiscal 2013 First Quarter Earnings
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