D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q1 FY2022 Earnings Presentation
30 slides from D.r. Horton's earnings presentation, February 2022
Slide 1: Investor Presentation Q1 2022
Investor Presentation Q1 2022
Slide 2: Broad Geographic Footprint
Broad Geographic Footprint 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may include “forward‐looking statements” as defined by the COVID‐19 on the economy and our businesses; the effects of weather conditions Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any and natural disasters on our busin
Slide 4: D.R. Horton, Inc.
D.R. HORTON, INC. Traded on NYSE as DHI $28.9 billion $5.8 billion 32.4% & 38.5% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $15.7 billion $44.25 17.3% 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 12% 81,622 Homes Closed during TTM ended 12/31/2021 2021 Closings: 81,622 1,200 10% 1,000 8% 800 2011 Closings: 2006 Closings: 17,176 6% 53,410 600 4% 400 2% 200 1992 Closings: 1,231 0 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 200
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 18% 50 16% 40 44 14% 41 12% 35 30 10% 8% 20 6% 4% 15 10 2% 0% 0 DFW Houston Atlanta Phoenix Austin #1 Top 5 Top 10 Operate In DHI Market Share Next Ranking Competitor Market Share Sourc
Slide 7: Management Tenure and Experience
MANAGEMENT TENURE AND EXPERIENCE Executive Team 28 years Region Presidents & Vice Presidents 20 years Division Presidents 13 years City Managers >10 years Average employee tenure 7
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 68% of homes closed <$350k 18% 28% 35% 11% 8% $0 - $250k $251k - $300k $301k - $400k $401k - $500k >$500k Represents price points of homes closed for the twelve months ended 12/31/21 8
Slide 9: Return on Equity (ROE)
RETURN ON EQUITY (ROE) ROE has improved to over 30% while maintaining homebuilding leverage below 20% ROE HB leverage 35% 35% 30% 31.6% 32.4% 30% 25% 25% 24.4% 20% 22.1% 20% 15% 17.2% 15% 10% 10% 5% 5% 0% 0% FY 2019 FY 2020 TTM 12/31/2020 FY 2021 TTM 12/31/2021 ROE Leverage ROE is calculated as net
Slide 10: Emphasis on Return on Inventory (ROI)
EMPHASIS ON RETURN ON INVENTORY (ROI) Homebuilding ROI target ‐ Minimum of 20% 40% 37.9% 38.5% 35% 30% 25% 27.9% 24.6% 20% 15% 18.1% 10% 5% 0% FY 2019 FY 2020 TTM 12/31/20 FY 2021 TTM 12/31/21 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding
Slide 11: Book Value per Share
BOOK VALUE PER SHARE Consistent annual double‐digit percentage growth in book value per share $45.00 $44.25 $40.00 $41.81 $35.00 $34.33 $30.00 $32.53 $25.00 $27.20 $20.00 $15.00 $10.00 $5.00 $0.00 9/30/2019 9/30/2020 12/31/2020 9/30/2021 12/31/2021 11
Slide 12: Cash Flow at Work
CASH FLOW AT WORK Utilization of nearly $6 billion of cash generated by homebuilding operations Investments CF from HB Operations $2,000 $2,000 $1,889 $1,800 $1,800 5 Year Cumulative Capital* $1,453 $1,600 $1,600 Cash Flow from $5.9B $1,400 $1,240 $1,400 Homebuilding Operations $1,200 $1,200 $1,002
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 our multi‐family an
Slide 14: Homebuilding Operational Focus
HOMEBUILDING OPERATIONAL FOCUS • Maximize returns by managing inventories, sales pace and pricing in each community, while providing value to homebuyers • Consolidate market share while generating strong profits and operating cash flow • Maintain sufficient inventories of land, lots and homes to sup
Slide 15: Forestar ("FOR")
FORESTAR (“FOR”) • DHI owns 63% of FOR, a publicly traded residential lot manufacturer with operations in 55 markets and 23 states • Supports DHI’s strategy of increasing land and lots controlled through purchase contracts • FOR delivered 4,516 lots and generated $408 million of revenue in Q1 2022 •
Slide 16: Rental Operations
RENTAL OPERATIONS • The Company’s rental operations develop, construct, lease and sell multi‐family and single‐family residential properties • Generated revenues of $156.5 million and pre‐tax income of $70.1 million in Q1 FY22 • Sold one multi‐family property (350 total units) in Q1 FY22 for $76.2 m
Slide 17: Expectations
EXPECTATIONS Q2 FY 2022 • Consolidated revenues in a range of $7.3 billion to $7.7 billion • Homes closed between 19,000 homes and 20,000 homes • Home sales gross margin of approximately 27.5% • Homebuilding SG&A of approximately 7.5% of homebuilding revenues • Financial services pre‐tax profit marg
Slide 18: First Quarter Data
First Quarter Data
Slide 19: Q1 FY 2022 Highlights
Q1 FY 2022 HIGHLIGHTS • Net income per diluted share increased 48% to $3.17 • Net income attributable to D.R. Horton increased 44% to $1.1 billion • Consolidated revenues increased 19% to $7.1 billion • Consolidated pre‐tax income increased 45% to $1.5 billion • Consolidated pre‐tax profit margin im
Slide 20: Sales and Closings
SALES AND CLOSINGS The value of Net Sales Orders and Homes Closed increased 29% and 17%, respectively, in Q1 FY22 compared to Q1 FY21 Net Sales Orders Closings # of Homes Value $8,256.4 $9,000 25,000 $7,500 $6,416.0 $6,656.4 $5,698.7 20,000 $6,000 $3,863.3 15,000 $3,949.8 $4,500 10,000 $3,000 5,000
Slide 21: Income Statement
INCOME STATEMENT $ in millions except per share data 21
Slide 22: Home Sales Gross Margin
HOME SALES GROSS MARGIN 28% 26% 26.9% 27.4% 24% 25.9% 25.5% 24.1% 24.6% 22% 20% 21.8% 18% 20.2% 16% 14% 12% 10% 8% 6% 4% 2% 0% FY 2019 FY 2020 1Q21 2Q21 3Q21 4Q21 FY 2021 1Q22 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amortized to cost of sales Refer
Slide 23: Homebuilding SG&A
HOMEBUILDING SG&A SG&A as a percentage of homebuilding revenues improved 40 basis points to 7.5% in Q1 FY22 HB Rev $ Fiscal Year SG&A % HB Rev $ First Fiscal Quarter SG&A % $28,000 12% $14,000 12% $24,000 11% $12,000 11% $20,000 $10,000 10% 10% $16,000 $8,000 9% 9% $12,000 $6,000 8% 8% $8,000 8.1% $
Slide 24: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Consolidated pre‐tax profit margin improved 380 basis points to 21.2% in Q1 FY22 Fiscal Year First Fiscal Quarter PTI $ PTI $ $5,500 19.3% $1,800 $5,000 $5,356.3 $1,600 21.2% $4,500 $1,400 $1,497.3 $4,000 $3,500 $1,200 17.4% 14.7% $3,000 $1,000 $2,983.0 $1,034.3 $2,500 $8
Slide 25: Balance Sheet
BALANCE SHEET $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $12.4 million, $8.4 million and $10.7 million of restricted cash for the periods ended 12/31/21, 9/30/21 and 12/31/20, respectively. 25
Slide 26: Homes in Inventory
HOMES IN INVENTORY Increased housing inventory to meet the current strong demand 60,000 55,000 54,800 50,000 47,800 45,000 42,100 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 12/31/20 9/30/21 12/31/21 Sold Specs Homes in inventory excluding model homes 26
Slide 27: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Controlled portion of land and lot pipeline increased 32% from a year ago 24% owned / 76% controlled at 12/31/21 600,000 551,400 550,000 530,300 500,000 440,700 450,000 400,000 376,900 350,000 307,300 402,500 419,500 300,000 318,700 250,000 264,300 185,900 200,000
Slide 28: Appendix
Appendix
Slide 29: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 9% 9% 102 Markets 32 States 27% Homebuilding 15% Northwest Colorado, Oregon, Utah and Washington Revenue 23% 17% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Oklahoma and Texas Southeast South Central East Southwest Northwest North Southeast 1
Slide 30: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR $350 million of senior note maturities in next 12 months $800 $700 $700 $600 $600 $500 $500 $500 $500 5.750% $400 $350 $300 $200 4.375% 4.750% 2.500% 2.600% 1.300% 1.400% $100 $0 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 $ in millions 30