D.r. Horton, Inc. · NYSE:DHI

D.r. Horton — Q1 2015 Earnings Presentation

22 slides from D.r. Horton's earnings presentation, 2015

  1. Slide 1: Q1 FY2015

    Savannah Melbourne = Do.” Birmingham Midland/Odessa 2 Oe. G) Killeen Fort CollinsSan Diego County 2: fos O Hattiesburg = A eg & Myrtle Beach Tuscaloosa‘ quo<s2 Mobile S OF RE —_____ Columbia 5 DARHORTON’ #0 Co 52 America’s Builder Oo Salt Lake city 2 5 Q1 FY2015 Tucson 2 5 E ‘San Bernardino County 3

  2. Slide 2: D.R. Horton, America's Builder (NYSE: DHI)

    DH NYSE D-RHORTON’ ## Junerica’s Buitaer

  3. Slide 3: Forward-Looking Statements

    Forward-Looking Statements This presentation may include “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 mate

  4. Slide 4: D.R. Horton, Inc.

    D.R. Horton, Inc.  Traded on NYSE as DHI  #1 builder for 13 consecutive years1  $8.7 billion in annual revenues2  30,455 in annual homes closed2  $10.3 billion of total assets3  $5.3 billion of stockholders’ equity3 1 Based on public builders reported closings as of January 26, 2015 2 Twelve m

  5. Slide 5: Geographic Diversification 79 Markets | 27 States

    Geographic Diversification HB Revenue 79 Markets | 27 States (TTM Ended 12/31/14) East 13% West 25% Midwest 6% Southwest 3% South Central 25% Southeast 28% East Inventory 11% (as of 12/31/14) Midwest Region States Covered West 7% 28% East Delaware, Georgia, Maryland, New Jersey, North Carolina, Penn

  6. Slide 6: Broad Range of Product Offerings

    Broad Range of Product Offerings Homes for entry-level, move-up and luxury buyers Under $500k+ $150k $400k to $500k $151k to $200k $300k to $400k $250k to $300k $200k to $250k 53% of closings < $250,000 in Q1 FY15, down from 58% in Q1 FY14 Revenues from homes > $500,000 increased to 17% of home sale

  7. Slide 7: D.R. Horton The Heart of our Business

    D.R. Horton The Heart of our Business  79 markets and 27 states  In the first quarter, accounted for:  84% of homes sold  87% of homes closed  88% of home sales revenue  Q1 Average Closing Price: $283,000 Reported metrics for D.R. Horton include our Breland Homes and Crown Communities operatio

  8. Slide 8: Emerald Homes

    Emerald Homes Higher-end move-up and luxury buyer  Introduced in 2013  35 markets and 15 states  In the first quarter, accounted for:  3% of homes sold  3% of homes closed  6% of home sales revenue  Q1 Average Closing Price: $660,000  Higher margin, slower absorption Q1 FY2015 8

  9. Slide 9: Express Homes

    Express Homes Targeted at the true entry-level buyer  Introduced in Spring 2014 $151k to  38 markets and 11 states $200k  In the first quarter, accounted for:  13% of homes sold  10% of homes closed  6% of home sales revenue  Q1 Average Closing Price: $169,000  Higher absorption, lower margi

  10. Slide 10: Operational Focus

    Operational Focus  Current land ownership level is sufficient to support double-digit revenue growth  Underwriting criteria for land and lot purchases and operational expectations for each community:  Minimum 20% annual net return on inventory investment (ROI) for all three brands  Net ROI% = Pr

  11. Slide 11: Q1 FY 2015 Highlights

    Q1 FY 2015 Highlights  The value of net homes sold, homes closed and homes in backlog increased by 40%, 37% and 29%, respectively  7,370 net homes sold and 7,973 homes closed  9,285 homes in backlog at 12/31/14  Consolidated pre-tax income increased 16% to $220.7 million  Consolidated pre-tax i

  12. Slide 12: Sales, Closings & Backlog – Q1 FY15

    Sales, Closings & Backlog – Q1 FY15 Net Sales Orders, Homes Closed and Homes in Backlog increased 35%, 29% and 21%, respectively, in Q1 of FY15 compared to Q1 of FY14 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Sales Closings Backlog 1Q FY13 1Q FY14 1Q FY15 Q1 FY2015 12

  13. Slide 13: Income Statement

    Income Statement 3 Months Ended Fiscal Year Ended 12/31/2014 12/31/2013 9/30/2014 9/30/2013 Homes closed 7,973 6,188 28,670 24,155 Revenues: Home sales $ 2,240.7 $ 1,630.8 $ 7,804.7 $ 6,024.8 Land/lot sales & other 12.3 4.8 53.8 61.1 2,253.0 1,635.6 7,858.5 6,085.9 Gross Profit: Home sales 442.6 364

  14. Slide 14: Home Sales Gross Margin

    Home Sales Gross Margin Homes sales gross margin of around 20% in a stable housing market 25% 20% 22.5% 21.4% 21.9% 22.3% 20.7% 20.5% 19.8% 20.4% 15% 18.8% 10% 17.7% 16.1% 5% 0% FY11 FY12 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 Q1 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 FY15 Shown as a % of home sales revenues Incl

  15. Slide 15: Homebuilding SG&A

    Homebuilding SG&A Long-term annual SG&A goal = 10% of homebuilding revenues Improved 60 basis points year-over-year in Q1 FY2015 Fiscal Year 2014 First Fiscal Quarter 2015 SG&A $ SG&A $ $1,000 $250 10.6% 10.6% $800 $200 11.2% 10.7% $600 $150 $238.0 $834.2 $400 $100 $183.4 $649.9 $200 $50 $0 $0 2013

  16. Slide 16: Homebuilding Pre-tax Income

    Homebuilding Pre-tax Income Homebuilding pre-tax income margin in Q1 2015 was 9.1% Fiscal Year 2014 First Fiscal Quarter 2015 PTI $ PTI $ $800 9.8% $210 9.1% $600 9.7% $200 $190 $400 $768.8 11.1% $206.1 $592.3 $180 $200 $181.9 $170 $0 $160 2013 2014 Q1 FY14 Q1 FY15 Shown as a % of homebuilding reven

  17. Slide 17: Balance Sheet

    Balance Sheet 12/31/14 9/30/14 12/31/13 HB cash and cash equivalents $ 517.7 $ 632.5 $ 801.1 Restricted cash 9.6 10.0 81.1 Inventories 7,989.3 7,700.5 6,496.1 Deferred income taxes, net 552.7 565.0 578.5 Other assets 1,269.4 1,294.5 970.4 Total $ 10,338.7 $ 10,202.5 $ 8,927.2 Notes payable - HB $ 3,

  18. Slide 18: Homes in Inventory

    Homes in Inventory Growing housing inventory to meet increasing sales pace 22,000 21,300 20,600 20,000 18,000 17,000 16,800 16,000 14,000 13,000 12,000 10,500 10,000 8,000 6,000 4,000 2,000 0 9/30/11 9/30/12 9/30/13 12/31/13 9/30/14 12/31/14 Models Sold Specs Q1 FY2015 18

  19. Slide 19: Robust Lot Position

    Robust Lot Position 71,000 of our total lots are finished at 12/31/14 200,000 180,900 183,500 184,700 180,000 174,800 160,000 152,700 54,300 49,000 58,900 60,200 140,000 120,000 58,100 112,700 100,000 26,900 80,000 60,000 126,600 125,800 124,600 124,500 85,800 94,600 40,000 20,000 0 9/30/11 9/30/12

  20. Slide 20: Inactive Land Held for Development

    Inactive Land Held for Development “Mothballed” lot count down 36% from 9/30/13 $800 50000 $699.2 45000 $700 $628.3 43,100 40000 $600 39,400 35000 $500 $450.2 30000 $400 25000 $332.8 $304.3 20000 $300 21,700 15000 $200 14,000 13,900 10000 $100 5000 $0 0 9/30/11 9/30/12 9/30/13 9/30/14 12/31/14 Balan

  21. Slide 21: Public Debt Maturities by Year

    Public Debt Maturities by Year $800 As of February 17, 2015 $700 $700 $600 $543 $500 $500 $500 $400 $400 $400 $350 5.750% $350 $350 6.500% $300 $200 $100 5.625% 4.750% 3.625% 3.750% 4.000% 4.375% 4.750% $0 FY 16 FY 17 FY 18 FY 19 FY 20 FY 22 FY 23 Pro-forma balance of public notes o/s of $3.3b (for

  22. Slide 22: FY 2015 Expectations

    FY 2015 Expectations* Fiscal Year:  Closings between 34,500 and 37,500 and consolidated revenues between $9.5 billion and $10.5 billion  Home sales gross margin of 19.5% to 20.5% with potential quarterly fluctuations outside of this range  Homebuilding SG&A expense of 10.0% to 10.3% of homebuildi

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