D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q4 2022 Earnings Presentation
33 slides from D.r. Horton's earnings presentation, November 2022
Slide 1: Investor Presentation Q4 2022
Investor Presentation Q4 2022
Slide 2: Broad Geographic Footprint
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 $33.5 billion $7.6 billion 34.5% & 42.8% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $19.4 billion $56.39 13.2% Stockholders’ equity Book value per common share Homebuilding leverage* As of or for the fiscal year ended Septe
Slide 5: FY 2022 Highlights
FY 2022 HIGHLIGHTS • Net income per diluted share increased 45% to $16.51 • Net income attributable to D.R. Horton increased 40% to $5.9 billion • Consolidated revenues increased 21% to $33.5 billion • Consolidated pre‐tax income increased 42% to $7.6 billion with a pre‐tax profit margin of 22.8% •
Slide 6: DHI Growth, Consolidation and Market Share
DHI GROWTH, CONSOLIDATION AND MARKET SHARE 1,400 14% 82,744 Homes Closed during fiscal year ended 9/30/2022 FY 2022 Closings: 82,744 1,200 12% 1,000 10% 800 8% 2011 Closings: 2006 Closings: 17,176 53,410 600 6% 400 4% 200 1992 Closings: 2% 1,231 0 0% Total U.S. Single‐Family New Home Sales ('000s) D
Slide 7: 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 8: Management Tenure and Experience
MANAGEMENT TENURE AND EXPERIENCE Executive Team 29 years Region Presidents >20 years Division Presidents 14 years City Managers >10 years Average employee tenure
Slide 9: Diverse Product Offerings and Price Points
DIVERSE PRODUCT OFFERINGS AND PRICE POINTS Homes for entry‐level, move‐up, active adult and luxury buyers 67% of homes closed <$400k 23% 24% 20% 20% 13% $0 - $300k $301k - $350k $351k - $400k $401k - $500k >$500k Represents price points of homes closed for the fiscal year ended 9/30/22
Slide 10: Return on Equity (ROE)
RETURN ON EQUITY (ROE) ROE has increased to over 30% while maintaining homebuilding leverage below 20% ROE HB leverage 40% 40% 35% 35% 34.5% 30% 31.6% 30% 25% 25% 20% 22.1% 20% 15% 17.2% 15% 10% 10% 5% 5% 0% 0% FY 2019 FY 2020 FY 2021 FY 2022 ROE Leverage ROE is calculated as net income divided by a
Slide 11: Emphasis on Homebuilding Return on Inventory (ROI)
EMPHASIS ON HOMEBUILDING RETURN ON INVENTORY (ROI) 45% 40% 42.8% 35% 37.9% 30% 25% 24.6% 20% 15% 18.1% 10% 5% 0% FY 2019 FY 2020 FY 2021 FY 2022 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Average homebuilding inventory in the
Slide 12: Consolidated Pre-Tax Profit Margin
CONSOLIDATED PRE-TAX PROFIT MARGIN Consolidated pre‐tax profit margin improved 350 basis points in FY22 Rev $ on a 21% revenue increase to $33.5 billion PTI % $35 22.8% 25% $33.5 $30 19.3% 20% $25 $27.8 14.7% 15% $20 12.1% $20.3 $15 $17.6 10% $10 5% $5 $7.6 $5.4 $2.1 $3.0 $0 0% FY 2019 FY 2020 FY 20
Slide 13: Book Value and Earnings Per Share
BOOK VALUE AND EARNINGS PER SHARE Strong annual growth in both book value per share and EPS $60 As of or For the Fiscal Year Ended $56.39 $50 $40 $41.81 $30 $32.53 $27.20 $20 $23.88 $16.51 $10 $11.41 $4.29 $6.41 $3.81 $0 9/30/2018 9/30/2019 9/30/2020 9/30/2021 9/30/2022 Book Value Per Share Diluted
Slide 14: 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 Cumulative Capital** $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 15: 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 16: 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 17: Forestar
FORESTAR • DHI owns 63% of FOR, a publicly traded residential lot manufacturer (NYSE: FOR) • Operations in 51 markets and 21 states • Supports DHI’s strategy of increasing land and lots controlled through purchase contracts • Sold 3,914 lots, generating $381 million of revenue in Q4 FY22 • Sold 17,6
Slide 18: Rental Operations
RENTAL OPERATIONS D.R. Horton’s rental operations develop, construct, lease and sell single‐family and multi‐family residential properties Single‐Family Rental Multi‐Family Rental FY22 FY21 FY22 FY21 Revenues $313.8 million $75.9 million Revenues $196.4 million $191.9 million Homes Sold 774 257 Unit
Slide 19: Q1 FY 2023 Expectations
Q1 FY 2023 EXPECTATIONS • As we look forward to the first quarter of fiscal 2023, we expect challenging market conditions to persist with continued uncertainty regarding mortgage interest rates, the capital markets and general economic conditions that may significantly impact our business • Providin
Slide 20: FY 2023 Outlook
FY 2023 OUTLOOK • Expect challenging market conditions to persist with continued uncertainty regarding mortgage interest rates, the capital markets and general economic conditions that may significantly impact the business • Limited current visibility to what housing market conditions will be in cal
Slide 21: Fourth Quarter Data
Fourth Quarter Data
Slide 22: Q4 FY 2022 Highlights
Q4 FY 2022 HIGHLIGHTS • Net income per diluted share increased 26% to $4.67 • Net income attributable to D.R. Horton increased 22% to $1.6 billion • Consolidated revenues increased 19% to $9.6 billion • Consolidated pre‐tax income increased 20% to $2.1 billion, with a pre‐tax profit margin of 21.4%
Slide 23: Homes Closed and Revenues
HOMES CLOSED AND REVENUES Homes closed and home sales revenues increased 6% and 23%, respectively, in Q4 FY22 compared to Q4 FY21 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 $‐ 4Q FY20 4Q FY21 4Q FY22 4Q FY20 4Q FY21 4Q
Slide 24: Income Statement
INCOME STATEMENT $ in millions except per share data
Slide 25: Home Sales Gross Margin
HOME SALES GROSS MARGIN 32% 30% 28% 30.1% 28.9% 28.3% 28.7% 26% 27.4% 24% 25.5% 22% 20% 21.8% 18% 20.2% 16% 14% 12% 10% 8% 6% 4% 2% 0% FY 2019 FY 2020 FY 2021 1Q22 2Q22 3Q22 4Q22 FY 2022 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amortized to cost of s
Slide 26: Homebuilding SG&A
HOMEBUILDING SG&A SG&A as a percentage of homebuilding revenues improved 50 basis points to 6.8% for fiscal year 2022 HB Rev $ Fiscal Year SG&A % HB Rev $ Fourth Fiscal Quarter SG&A % $32,000 12% $14,000 12% $28,000 11% $12,000 11% $24,000 10% $10,000 10% $20,000 9% $8,000 9% $16,000 8% $6,000 8% $1
Slide 27: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Consolidated pre‐tax profit margin improved 10 basis points year‐over‐year to 21.4% in Q4 FY22 Fourth Fiscal Quarter PTI $ PTI Margin % $2,500 25% 21.4% $2,000 21.3% 20% $2,065.9 $1,500 $1,726.6 15% 16.5% $1,000 13.1% 10% $1,056.1 $500 $660.1 5% $0 0% Q4 FY19 Q4 FY20 Q4 F
Slide 28: Balance Sheet
BALANCE SHEET $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $11.3 million and $8.4 million of restricted cash for the periods ended 9/30/22 and 9/30/21, respectively.
Slide 29: Homes in Inventory
HOMES IN INVENTORY Managing housing inventory to meet demand and support market share gains 65,000 60,000 55,000 50,000 47,800 46,400 45,000 40,000 38,000 35,000 30,000 27,700 25,000 20,000 15,000 10,000 5,000 0 9/30/19 9/30/20 9/30/21 9/30/22 Sold Specs Homes in inventory excluding model homes
Slide 30: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Flexible land and lot pipeline 23% owned / 77% controlled at 9/30/22 600,000 573,200 550,000 530,300 500,000 450,000 400,000 376,900 350,000 442,100 307,300 402,500 300,000 250,000 264,300 185,900 200,000 150,000 100,000 50,000 121,400 112,600 127,800 131,100 0 9/3
Slide 31: Appendix
Appendix
Slide 32: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 9% 106 Markets 33 States 8% 25% 15% 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 33: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR $700 million of senior note maturities in next 12 months $800 $700 $700 $600 $600 5.750% $500 $500 $500 $500 $400 $300 $200 4.750% 2.500% 2.600% 1.300% 1.400% $100 $0 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 $ in millions