D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Deutsche Bank Leveraged Finance Conference 2016
18 slides from D.r. Horton's conference presentation, Sep 27, 2016
Slide 1: Deutsche Bank Leveraged Finance Conference
Deutsche Bank Leveraged Finance Conference September 27, 2016
Slide 2: 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
Slide 3: D.R. Horton, Inc.
D.R. Horton, Inc. Traded on NYSE as DHI #1 builder for 14 consecutive years1 $11.6 billion in annual revenues2 38,638 in annual homes closed2 $1.3 billion in annual pre-tax income2 $11.3 billion of total assets3 $6.5 billion of stockholders’ equity3 Book value per share of $17.503 1B
Slide 4: Geographic Diversification: 78 Markets | 26 States
Geographic Diversification HB Revenue1 East West 12% 78 Markets | 26 States 24% Midwest 6% Southwest 3% South Central 26% Southeast 29% East Inventory2 11% Midwest 5% West 29% Region States East Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia Midwest Colorado,
Slide 5: Broad Range of Product Offerings
Broad Range of Product Offerings Homes for entry-level, move-up and luxury buyers 7% $500k+ 26% < $200k 25% $300k to $500k $200k to $250k to $250k $300k 24% 18% Represents homes closed for the trailing twelve months ended 6/30/16 Deutsche Bank Leveraged Finance Conference I September 2016 5
Slide 6: D.R. Horton Market Share Rankings
D.R. Horton Market Share Rankings # of Markets Top 50 U.S. Housing Markets 50 45 40 41 35 35 36 30 30 25 29 20 23 15 10 13 5 7 0 #1 Top 5 Top 10 Operations In Source: Builder magazine - 2016 Local Leaders issue 2009 2015 Market share rankings based on homes closed Deutsche Bank Leveraged Finance Con
Slide 7: Substantial Growth in New Brands
Substantial Growth in New Brands Brand Growth - TTM Overall Brand Mix – Q3 Homes Closed 12,000 4% 10,000 1,401 28% 8,000 6,000 68% 911 9,106 4,000 2,000 4,027 0 TTM 6/30/15 TTM 6/30/16 Represents homes closed Deutsche Bank Leveraged Finance Conference I September 2016 7
Slide 8: Newest Brand - Freedom Homes
Newest Brand - Freedom Homes Targeted at the active adult buyer Introduced in July 2016 Carefree affordable living for active adults Coming Soon! Low-maintenance lifestyle Age-restricted and age-targeted communities Available in at least 8 markets by end of FY16 and approximately 1/3 of ou
Slide 9: Management Tenure & Experience
Management Tenure & Experience Average employee tenure: Executive Team and Region Presidents – over 20 years Division Presidents – approximately 15 years City Managers – over 10 years Deutsche Bank Leveraged Finance Conference I September 2016 9
Slide 10: Operational Focus
Operational Focus Current land ownership level is sufficient to support double-digit annual growth in both revenues and profits Consistently optimize balance of sales absorptions and gross margins to maximize returns in each community Manage land and home inventory levels efficiently to genera
Slide 11: Q3 FY 2016 Highlights
Q3 FY 2016 Highlights The value of net homes sold, homes closed and homes in backlog increased by 14%, 9% and 17%, respectively Consolidated pre-tax income increased 13% to $378.6 million Consolidated pre-tax income margin improved 40 basis points to 11.7% Net income increased 13% to $249.8
Slide 12: Balance Sheet
Balance Sheet 6/30/16 9/30/15 6/30/15 HB cash and cash equivalents $ 862.9 $ 1,355.9 $ 766.7 Restricted cash 11.8 9.7 11.7 Inventories 8,504.2 7,807.0 8,111.2 Deferred income taxes, net 505.1 558.1 544.3 Other assets 1,449.2 1,420.3 1,411.3 Total $ 11,333.2 $ 11,151.0 $ 10,845.2 Notes payable - HB $
Slide 13: Homes in Inventory
Homes in Inventory 30,000 25,300 25,000 20,600 21,200 20,000 19,800 17,000 15,000 13,000 10,000 5,000 0 9/30/12 9/30/13 9/30/14 6/30/15 9/30/15 6/30/16 Models Sold Specs Deutsche Bank Leveraged Finance Conference I September 2016 13
Slide 14: Land and Lot Position
Land and Lot Position Supports double-digit growth in both revenues and pre-tax profits 225,000 202,000 200,000 180,900 183,500 173,600 173,900 175,000 152,700 150,000 55,500 89,900 58,100 54,300 58,900 53,500 125,000 100,000 75,000 94,600 126,600 124,600 120,100 118,400 112,100 50,000 25,000 0 9/30
Slide 15: Cash Flow Priorities
Cash Flow Priorities Invest in homebuilding business where opportunities to generate acceptable returns exist Business acquisitions to further consolidate market share Pay off debt at maturity Paid $170 million and $373 million of senior notes at maturity in January and April 2016, respectiv
Slide 16: Wilson Parker Acquisition
Wilson Parker Acquisition Acquired the homebuilding operations of Wilson Parker Homes (WPH) in September 2016 for approximately $90 million in cash WPH operates in Atlanta and Augusta, GA; Raleigh, NC; Columbia, SC and Phoenix, AZ Assets include approximately 490 lots, 390 homes in inventory a
Slide 17: Public Debt Maturities by Year
Public Debt Maturities by Year DHI debt ratings upgraded by S&P on 8/12/16 to BBB- $800 $700 $700 $600 $500 $500 $500 5.750% $400 $400 $350 $350 $300 $200 $100 4.750% 3.625% 3.750% 4.000% 4.375% 4.750% $0 FY 17 FY 18 FY 19 FY 20 FY 22 FY 23 $ in millions Deutsche Bank Leveraged Finance Conference I
Slide 18: Preliminary FY17 Expectations
Preliminary FY17 Expectations* Consolidated revenue increase of 10% to 15% Consolidated pre-tax operating margin of 11.2% to 11.5% Cash flow from operations in the range of $300 to $500 million Income tax rate between 35% and 36% Diluted share count increase of approximately 1.5% *Based on
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