D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q2 2023 Earnings Presentation
30 slides from D.r. Horton's earnings presentation, Apr 20, 2023
Slide 1: Investor Presentation Q2 2023
Investor Presentation Q2 2023
Slide 2: America's #1 Homebuilder Since 2002
AMERICA’S #1 HOMEBUILDER SINCE 2002 D-RHORTON Americas Builder
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
Slide 4: D.R. Horton, Inc.
D.R. HORTON, INC. Traded on NYSE as DHI $33.7 billion $6.8 billion 27.2% & 35.1% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $20.7 billion $60.73 11.5% Stockholders’ equity Book value per common share Homebuilding leverage* As of or for the twelve‐month period end
Slide 5: DHI Growth, Consolidation and Market Share
DHI GROWTH, CONSOLIDATION AND MARKET SHARE 1,400 14% 2022 Closings: 81,524 Homes Closed during TTM ended 3/31/2023 81,688 1,200 12% 1,000 10% 800 8% 2011 Closings: 2006 Closings: 17,176 600 53,410 6% 400 4% 200 1992 Closings: 2% 1,231 0 0% Total U.S. Single‐Family New Home Sales ('000s) DHI Homes Cl
Slide 6: Market Share Dominance
MARKET SHARE DOMINANCE D.R. Horton Share and Rankings in Largest U.S. Housing Markets Top 5 Markets Top 50 Markets 20% 50 18% 16% 44 45 40 14% 39 12% 30 10% 8% 20 6% 15 4% 10 2% 0% 0 DFW Houston Atlanta Phoenix Austin #1 Top 5 Top 10 Operate In DHI Market Share Next Ranking Competitor Market Share S
Slide 7: Management Tenure and Experience
MANAGEMENT TENURE AND EXPERIENCE Executive Team ~30 years Region Presidents >20 years Division Presidents 14 years City Managers ~12 years Average employee tenure
Slide 8: Diverse Product Offerings and Price Points
DIVERSE PRODUCT OFFERINGS AND PRICE POINTS Homes for entry‐level, move‐up, active adult and luxury buyers 65% of homes closed <$400k 20% 24% 21% 21% 14% $0 - $300k $301k - $350k $351k - $400k $401k - $500k >$500k Represents price points of homes closed for the twelve months ended 3/31/23
Slide 9: Return on Equity (ROE)
RETURN ON EQUITY (ROE) Strong ROE while maintaining low homebuilding leverage ROE HB leverage 40% 40% 35% 35% 34.0% 34.5% 30% 31.6% 30% 25% 27.2% 25% 20% 22.1% 20% 15% 15% 10% 10% 5% 5% 0% 0% FY 2020 FY 2021 TTM 3/31/22 FY 2022 TTM 3/31/23 ROE Leverage ROE is calculated as net income divided by aver
Slide 10: Emphasis on Homebuilding Return on Inventory (ROI)
EMPHASIS ON HOMEBUILDING RETURN ON INVENTORY (ROI) 45% 40% 42.8% 40.3% 35% 37.9% 35.1% 30% 25% 24.6% 20% 15% 10% 5% 0% FY 2020 FY 2021 TTM 3/31/22 FY 2022 TTM 3/31/23 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Average homebui
Slide 11: Book Value and Earnings Per Share
BOOK VALUE AND EARNINGS PER SHARE Strong EPS driving consistent growth in book value per share $70 Fiscal Year Ended $70 Six Months Ended $60 $60 $60.73 $56.39 $50 $50 $47.66 $40 $41.81 $40 $35.96 $30 $32.53 $30 $27.20 $20 $20 $16.51 $10 $10 $7.20 $5.50 $11.41 $4.67 $4.29 $6.41 $0 $0 9/30/2019 9/30/
Slide 12: Cash Flow at Work
CASH FLOW AT WORK Our homebuilding operations generated $7.5 billion of cash flow over the past five years Cash Flow* $2,000 5 Year Capital Allocation** $1,889 $1,917 $1,750 Cash Flow from $7.5B Homebuilding $1,500 Operations $1,453 Shareholder Return $4.2B $1,250 through Dividends and $1,240 Share
Slide 13: Capital and Cash Flow Priorities
CAPITAL AND CASH FLOW PRIORITIES • Balanced, disciplined, flexible and opportunistic; focused on enhancing long‐term value • Strong balance sheet, liquidity and low leverage provide significant financial flexibility • Invest in homebuilding business, including acquisitions • Grow multi‐family and si
Slide 14: Homebuilding Operational Focus
HOMEBUILDING OPERATIONAL FOCUS • Maximize returns by turning inventory and managing sales pace and pricing in each community to provide value to homebuyers and generate strong operating cash flow • Maintain and manage land, lot and home inventory to meet demand and support market share aggregation •
Slide 15: Rental Operations
RENTAL OPERATIONS Develop, construct, lease and sell single‐family and multi‐family residential properties Generated $682 million of revenues and $174 million of pre‐tax income in the past twelve months Single-Family Rental Multi-Family Rental 2Q23 2Q22 TTM 2Q23 2Q22 TTM 3/31/23 3/31/23 Revenues $22
Slide 16: Forestar
FORESTAR • DHI owns 63% of Forestar, a publicly traded residential lot manufacturer (NYSE: FOR) • Operations in 52 markets and 20 states • Supports DHI’s strategy of controlling a significant portion of land and lots through purchase contracts • Sold 2,979 lots, generating $302 million of revenue in
Slide 17: Expectations
EXPECTATIONS Looking forward, we expect current market conditions to continue with uncertainty regarding mortgage interest rates, the capital markets and general economic conditions that may significantly impact our business Q3 FY 2023 • Consolidated revenues in a range from $8.0 billion to $8.5 bil
Slide 18: Second Quarter Data
Second Quarter Data
Slide 19: Q2 FY 2023 Highlights
Q2 FY 2023 HIGHLIGHTS • Net income attributable to D.R. Horton of $942.2 million or $2.73 per diluted share • Consolidated pre‐tax income of $1.2 billion, with a pre‐tax profit margin of 15.6% • Consolidated revenues of $8.0 billion • Home sales revenues of $7.4 billion on 19,664 homes closed • Net
Slide 20: Homes Closed and Revenues
HOMES CLOSED AND REVENUES Homes closed and home sales revenues both decreased 1% in Q2 FY23 compared to Q2 FY22 Homes Closed Home Sales Revenues # of Homes Revenues 25,000 $10,000 20,000 $8,000 15,000 $6,000 10,000 $4,000 5,000 $2,000 0 $‐ 2Q FY21 2Q FY22 2Q FY23 2Q FY21 2Q FY22 2Q FY23 $ in million
Slide 21: Income Statement
INCOME STATEMENT $ in millions except per share data
Slide 22: Home Sales Gross Margin
HOME SALES GROSS MARGIN Home sales gross margin returning to normal levels 32% 28% 28.9% 28.7% 27.4% 24% 25.5% 23.9% 20% 21.8% 21.6% 16% 12% 8% 4% 0% FY 2020 FY 2021 1Q22 2Q22 FY 2022 1Q23 2Q23 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amortized to co
Slide 23: Homebuilding SG&A
HOMEBUILDING SG&A Control SG&A while ensuring our platform adequately supports our business Fiscal YTD 3/31 Second Fiscal Quarter HB Rev $ SG&A % HB Rev $ SG&A % $32,000 12% $14,000 12% $28,000 11% $12,000 11% $24,000 $10,000 10% 10% $20,000 9% $8,000 9% $16,000 8% $6,000 8% $12,000 7.5% 7% $4,000 7
Slide 24: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Q2 FY23 consolidated pre‐tax income was $1.2 billion with a profit margin of 15.6% Fiscal YTD 3/31 Second Fiscal Quarter PTI $ PTI $ $4,000 $2,400 $3,500 22.5% $2,100 23.5% $3,000 $3,380.6 $1,800 16.5% $1,883.3 $2,500 $1,500 15.6% $2,512.5 $2,000 $1,200 $1,245.3 $1,500 $9
Slide 25: Balance Sheet
BALANCE SHEET $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $8.5 million, $11.3 million and $14.9 million of restricted cash for the periods ended 3/31/23, 9/30/22 and 3/31/22, respectively.
Slide 26: Homes in Inventory
HOMES IN INVENTORY Managing housing inventory to meet demand and support market share gains 70,000 59,800 60,000 50,000 47,800 46,400 43,600 40,000 38,000 30,000 20,000 10,000 0 9/30/20 9/30/21 3/31/22 9/30/22 3/31/23 Sold Specs Homes in inventory excluding model homes
Slide 27: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Flexible land and lot pipeline 25% owned / 75% controlled at 3/31/23 600,000 574,000 573,200 547,000 530,300 500,000 400,000 376,900 442,800 442,100 410,700 402,500 300,000 264,300 200,000 100,000 112,600 127,800 131,200 131,100 136,300 0 9/30/20 9/30/21 3/31/22 9/
Slide 28: Appendix
Appendix
Slide 29: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 9% 110 Markets 33 States 8% 26% 14% Northwest Homebuilding Colorado, Oregon, Utah and Washington Revenue 26% 17% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Arkansas, Oklahoma and Texas Southeast South Central East Southwest Northwest North S
Slide 30: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR Repaid $300 million of senior notes at maturity in February 2023 $400 million of senior note maturities remaining in next 12 months $700 $600 $600 $500 $500 $500 $500 $400 $400 $300 $200 5.750% 2.500% 2.600% 1.300% 1.400% $100 $0 FY 23 FY 24 FY 25 FY 26 FY