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8-K - FORM 8-K - HORTON D R INC /DE/ | d79289e8vk.htm |
Exhibit 99.1
Stacey Dwyer, EVP
301 Commerce Street,
Ste. 500, Fort Worth,
Texas 76102
817-390-8200
January 27, 2011
301 Commerce Street,
Ste. 500, Fort Worth,
Texas 76102
817-390-8200
January 27, 2011
D.R. HORTON, INC., AMERICAS BUILDER, REPORTS FIRST QUARTER FISCAL 2011 RESULTS AND DECLARES
QUARTERLY DIVIDEND
FORT WORTH, TEXAS D.R. Horton, Inc. (NYSE:DHI), Americas Builder, today reported a net
loss for its first fiscal quarter ended December 31, 2010 of $20.4 million, or $0.06 per diluted
share. The quarterly results included $8.4 million in pre-tax charges to cost of sales for
inventory impairments and land option cost write-offs. Net income for the same quarter of fiscal
2010 was $192.0 million, or $0.56 per diluted share, which included a tax benefit of $149.2
million. Homebuilding revenue for the first quarter of fiscal 2011 totaled $767.0 million,
compared to $1.1 billion in the same quarter of fiscal 2010. Homes closed totaled 3,637, compared
to 5,529 homes in the same quarter of fiscal 2010.
Net sales orders for the first quarter ended December 31, 2010 totaled 3,363 homes ($705.6
million), compared to 4,037 homes ($850.1 million) for the same quarter of fiscal 2010. The
Companys cancellation rate (cancelled sales orders divided by gross sales orders) for the first
quarter of fiscal 2011 was 28%. The Companys sales backlog of homes under contract at December
31, 2010 was 3,854 homes ($795.4 million), compared to 4,136 homes ($884.0 million) at December 31,
2009.
The Companys homebuilding cash and marketable securities at December 31, 2010
totaled $1.5 billion. During the first quarter, the Company reduced the number of homes in
inventory by 400, contributing to the net cash provided by operating activities of $49.5 million.
In the first quarter, the Company repurchased a total of $62.5 million principal amount of its
outstanding senior notes for a total purchase price of $63.8 million, plus accrued interest.
The Company has declared a quarterly cash dividend of $0.0375 per share. The dividend is
payable on February 18, 2011 to stockholders of record on February 10, 2011.
Donald R. Horton, Chairman of the Board, said, Housing affordability remains near record
highs, interest rates are favorable and new home inventory is still very low. However, we still
face challenges, such as rising foreclosures, significant existing home inventory, high
unemployment, tight mortgage lending standards and weak consumer confidence.
We are well positioned for the spring selling season, with homes available to meet the
seasonal increase in demand, a broad geographic footprint and price points focused on the
first-time homebuyer. While our year-over-year comparisons for net sales orders are very difficult
for the next two quarters, we do expect to see an increase from the sales levels we achieved in the
December quarter. Our strong balance sheet and liquidity support our long-term strategy of
providing affordable homes and increasing our number of active selling communities while
controlling our costs. This strategy has proven successful through the downturn as our national
market share of new home sales has increased significantly over the last three years.
The Company will host a conference call today (Thursday, January 27th) 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., Americas Builder, is the largest homebuilder in the United States, based
on its 18,983 homes closed in the twelve-month period ended December 31, 2010. Founded in 1978 in
Fort Worth, Texas, D.R. Horton has operations in 72 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 $90,000 to over
$700,000. 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 well positioned for the spring selling season, with homes available to meet the seasonal
increase in demand and our expectation to see an increase from the sales levels we achieved in the
December quarter. The forward-looking statements also include our continued focus on providing
affordable homes and increasing our number of active selling communities while controlling our
costs. 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; the continuing 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; and our ability to utilize our
tax losses, which could be substantially limited if we experienced an ownership change as defined
in the Internal Revenue Code. Additional information about issues that could lead to material
changes in performance is contained in D.R. Hortons 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)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, | September 30, | |||||||
2010 | 2010 | |||||||
(In millions) | ||||||||
ASSETS |
||||||||
Homebuilding: |
||||||||
Cash and cash equivalents |
$ | 1,200.1 | $ | 1,282.6 | ||||
Marketable securities, available-for-sale |
296.6 | 297.7 | ||||||
Restricted cash |
46.2 | 53.7 | ||||||
Inventories: |
||||||||
Construction in progress and finished homes |
1,217.6 | 1,286.0 | ||||||
Residential land and lots developed and under development |
1,441.1 | 1,406.1 | ||||||
Land held for development |
753.2 | 749.3 | ||||||
Land inventory not owned |
| 7.6 | ||||||
3,411.9 | 3,449.0 | |||||||
Income taxes receivable |
14.3 | 16.0 | ||||||
Deferred income taxes, net of valuation allowance of
$905.6 million and $902.6 million at December 31, 2010 and
September 30, 2010, respectively |
| | ||||||
Property and equipment, net |
60.0 | 60.5 | ||||||
Other assets |
425.8 | 434.8 | ||||||
Goodwill |
15.9 | 15.9 | ||||||
5,470.8 | 5,610.2 | |||||||
Financial Services: |
||||||||
Cash and cash equivalents |
21.0 | 26.7 | ||||||
Mortgage loans held for sale |
188.5 | 253.8 | ||||||
Other assets |
46.4 | 47.9 | ||||||
255.9 | 328.4 | |||||||
$ | 5,726.7 | $ | 5,938.6 | |||||
LIABILITIES |
||||||||
Homebuilding: |
||||||||
Accounts payable |
$ | 127.5 | $ | 135.1 | ||||
Accrued expenses and other liabilities |
916.7 | 957.2 | ||||||
Notes payable |
2,029.0 | 2,085.3 | ||||||
3,073.2 | 3,177.6 | |||||||
Financial Services: |
||||||||
Accounts payable and other liabilities |
41.2 | 51.6 | ||||||
Mortgage repurchase facility |
21.7 | 86.5 | ||||||
62.9 | 138.1 | |||||||
3,136.1 | 3,315.7 | |||||||
EQUITY |
||||||||
Common stock |
3.2 | 3.2 | ||||||
Additional paid-in capital |
1,902.9 | 1,894.8 | ||||||
Retained earnings |
778.2 | 810.6 | ||||||
Treasury stock, at cost |
(95.7 | ) | (95.7 | ) | ||||
Accumulated other comprehensive income |
| 0.3 | ||||||
2,588.6 | 2,613.2 | |||||||
Noncontrolling interests |
2.0 | 9.7 | ||||||
2,590.6 | 2,622.9 | |||||||
$ | 5,726.7 | $ | 5,938.6 | |||||
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
(In millions, except per share data) | ||||||||
Homebuilding: |
||||||||
Revenues: |
||||||||
Home sales |
$ | 761.1 | $ | 1,108.2 | ||||
Land/lot sales |
5.9 | 0.7 | ||||||
767.0 | 1,108.9 | |||||||
Cost of sales: |
||||||||
Home sales |
642.5 | 918.8 | ||||||
Land/lot sales |
5.9 | 0.6 | ||||||
Inventory impairments and
land option cost
write-offs |
8.4 | 1.2 | ||||||
656.8 | 920.6 | |||||||
Gross profit: |
||||||||
Home sales |
118.6 | 189.4 | ||||||
Land/lot sales |
| 0.1 | ||||||
Inventory impairments and
land option cost
write-offs |
(8.4 | ) | (1.2 | ) | ||||
110.2 | 188.3 | |||||||
Selling, general and administrative expense |
118.9 | 128.4 | ||||||
Interest expense |
16.2 | 26.9 | ||||||
Loss (gain) on early retirement of debt, net |
1.5 | (1.6 | ) | |||||
Other (income) |
(2.3 | ) | (1.5 | ) | ||||
Operating income (loss) from Homebuilding |
(24.1 | ) | 36.1 | |||||
Financial Services: |
||||||||
Revenues, net of recourse and reinsurance expense |
21.2 | 23.3 | ||||||
General and administrative expense |
19.0 | 18.7 | ||||||
Interest expense |
0.3 | 0.5 | ||||||
Interest and other (income) |
(2.3 | ) | (2.6 | ) | ||||
Operating income from Financial Services |
4.2 | 6.7 | ||||||
Income (loss) before income taxes |
(19.9 | ) | 42.8 | |||||
Provision for (benefit from) income taxes |
0.5 | (149.2 | ) | |||||
Net income (loss) |
$ | (20.4 | ) | $ | 192.0 | |||
Basic: |
||||||||
Net income (loss) per share |
$ | (0.06 | ) | $ | 0.60 | |||
Weighted average number of common shares |
319.1 | 317.7 | ||||||
Diluted: |
||||||||
Net income (loss) per share |
$ | (0.06 | ) | $ | 0.56 | |||
Numerator for diluted income (loss) per share after
assumed conversions |
$ | (20.4 | ) | $ | 198.8 | |||
Adjusted weighted average number of common shares |
319.1 | 356.1 | ||||||
Other Consolidated Financial Data: |
||||||||
Interest amortized to home and land/lot cost of sales |
$ | 20.9 | $ | 31.8 | ||||
Depreciation |
$ | 4.9 | $ | 4.9 | ||||
Interest incurred |
$ | 35.5 | $ | 50.4 | ||||
D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended | ||||
December 31, 2010 | ||||
(In millions) | ||||
Operating Activities |
||||
Net loss |
$ | (20.4 | ) | |
Adjustments to reconcile net loss to net cash provided by
operating activities: |
||||
Depreciation |
4.9 | |||
Amortization of discounts and fees |
9.0 | |||
Stock based compensation expense |
3.4 | |||
Loss on early retirement of debt, net |
1.5 | |||
Gain on sale of marketable securities |
(0.1 | ) | ||
Inventory impairments and land option cost write-offs |
8.4 | |||
Changes in operating assets and liabilities: |
||||
Decrease in construction in progress and finished homes |
66.9 | |||
Increase in residential land and lots developed,
under development, and held for development |
(45.5 | ) | ||
Decrease in other assets |
8.8 | |||
Decrease in income taxes receivable |
1.7 | |||
Decrease in mortgage loans held for sale |
65.3 | |||
Decrease in accounts payable, accrued expenses and other
liabilities |
(54.4 | ) | ||
Net cash provided by operating activities |
49.5 | |||
Investing Activities |
||||
Purchases of property and equipment |
(3.7 | ) | ||
Purchases of marketable securities |
(123.3 | ) | ||
Proceeds from the sale or maturity of marketable
securities |
122.3 | |||
Decrease in restricted cash |
7.5 | |||
Net cash provided by investing activities |
2.8 | |||
Financing Activities |
||||
Repayment of notes payable |
(129.0 | ) | ||
Proceeds from stock associated with certain employee
benefit plans |
0.5 | |||
Cash dividends paid |
(12.0 | ) | ||
Net cash used in financing activities |
(140.5 | ) | ||
Decrease in Cash and Cash Equivalents |
(88.2 | ) | ||
Cash and cash equivalents at beginning of period |
1,309.3 | |||
Cash and cash equivalents at end of period |
$ | 1,221.1 | ||
D.R. HORTON, INC.
($s in millions)
($s in millions)
NET SALES ORDERS
Three Months Ended December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Homes | Value | Homes | Value | |||||||||||||
East |
400 | $ | 87.9 | 397 | $ | 97.2 | ||||||||||
Midwest |
186 | 51.1 | 235 | 65.7 | ||||||||||||
Southeast |
769 | 148.8 | 815 | 153.6 | ||||||||||||
South Central |
1,162 | 204.7 | 1,495 | 259.2 | ||||||||||||
Southwest |
255 | 47.5 | 406 | 72.0 | ||||||||||||
West |
591 | 165.6 | 689 | 202.4 | ||||||||||||
3,363 | $ | 705.6 | 4,037 | $ | 850.1 | |||||||||||
HOMES CLOSED
Three Months Ended December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Homes | Value | Homes | Value | |||||||||||||
East |
439 | $ | 100.7 | 556 | $ | 127.2 | ||||||||||
Midwest |
215 | 57.8 | 341 | 88.6 | ||||||||||||
Southeast |
747 | 143.9 | 1,020 | 181.9 | ||||||||||||
South Central |
1,303 | 228.8 | 2,140 | 361.7 | ||||||||||||
Southwest |
312 | 58.2 | 533 | 91.3 | ||||||||||||
West |
621 | 171.7 | 939 | 257.5 | ||||||||||||
3,637 | $ | 761.1 | 5,529 | $ | 1,108.2 | |||||||||||
SALES ORDER BACKLOG
As of December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Homes | Value | Homes | Value | |||||||||||||
East |
433 | $ | 90.7 | 400 | $ | 96.6 | ||||||||||
Midwest |
218 | 63.5 | 283 | 82.1 | ||||||||||||
Southeast |
834 | 167.4 | 764 | 150.8 | ||||||||||||
South Central |
1,550 | 273.1 | 1,717 | 300.1 | ||||||||||||
Southwest |
348 | 61.1 | 365 | 67.0 | ||||||||||||
West |
471 | 139.6 | 607 | 187.4 | ||||||||||||
3,854 | $ | 795.4 | 4,136 | $ | 884.0 | |||||||||||