D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — 8th Annual J.P. Morgan Homebuilding & Building Products Conference 2015
19 slides from D.r. Horton's conference presentation, May 19, 2015
Slide 1: 8th Annual J.P. Morgan Homebuilding & Building Products Conference
8th Annual J.P. Morgan Homebuilding & Building Products Conference May 19, 2015
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 13 consecutive years1 $9.3 billion in annual revenues2 32,504 in annual homes closed2 $10.7 billion of total assets3 $5.4 billion of stockholders’ equity3 1 By closings volume for calendar years 2002 to 2014 2 Twelve months ended Mar
Slide 4: Geographic Diversification
Geographic Diversification HB Revenue (TTM Ended 3/31/15) 79 Markets | 27 States East 13% West Midwest 25% 6% Southwest 3% South Central 25% Southeast 28% East 11% Inventory (as of 3/31/15) West 28% Midwest Region States Covered 6% East Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsy
Slide 5: Broad Range of Product Offerings
Broad Range of Product Offerings Homes for entry-level, move-up and luxury buyers $500k+ Under $500k+ $150k $400k to $500k $151k to 53% of closings < $250,000 in Q2 FY15, down $200k $300k to $400k from 56% in Q2 FY14 Revenues from homes > $500,000 were 15% of home sales revenues in Q2 FY15 flat
Slide 6: Competitive Advantage
Competitive Advantage Average employee tenure: Region Presidents – over 20 years Division Presidents – 15 years City Managers – over 10 years J.P. Morgan Homebuilding and Building Products Conference 6
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 second quarter, accounted for: 79% of homes sold 85% of homes closed 87% of home sales revenue Q2 Average Closing Price: $289,000 Reported metrics for D.R. Horton include our Breland Homes and Crown Communities operati
Slide 8: Emerald Homes
Emerald Homes Higher-end move-up and luxury buyer Introduced in 2013 41 markets and 16 states In the second quarter, accounted for: 3% of homes sold 2% of homes closed 5% of home sales revenue Q2 Average Closing Price: $561,000 Higher margin, slower absorption J.P. Morgan Homebuildin
Slide 9: Express Homes
Express Homes Targeted at the true entry-level buyer Introduced in Spring 2014 $151k to $200k 44 markets and 13 states In the second quarter, accounted for: 18% of homes sold 13% of homes closed 8% of home sales revenue Q2 Average Closing Price: $179,000 Higher absorption, lower marg
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
Slide 11: Targeted Market Consolidations
Targeted Market Consolidations Completed four acquisitions since fiscal 2012 $151k to Company Date Acquired Market(s) $200k Amount Paid Breland Homes Aug-12 Huntsville, Mobile and Baldwin Co., AL & MS gulf coast $105.9 million Regent Homes Oct-13 Charlotte, Greensboro & Winston-Salem, North Carolina
Slide 12: Q2 FY 2015 Highlights
Q2 FY 2015 Highlights The value of net homes sold, homes closed and homes in backlog increased by 33%, 38% and 27%, respectively 11,135 net homes sold and 8,243 homes closed 12,177 homes in backlog at 3/31/15 Consolidated pre-tax income increased 14% to $230.1 million Consolidated pre-tax
Slide 13: Home Sales Gross Margin
Home Sales Gross Margin 25% Homes sales gross margin of around 20% in a stable housing market 20% 22.3% 22.5% 20.7% 21.4% 21.9% 20.5% 19.8% 19.7% 20.4% 15% 18.8% 10% 17.7% 16.1% 5% 0% FY11 FY12 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 Q1 Q2 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 FY15 FY15 Shown as a % of home sales
Slide 14: Homebuilding SG&A
Homebuilding SG&A Long-term annual SG&A goal = 10% of homebuilding revenues Improved 70 basis points year-over-year in Q2 FY2015 FYTD 3/31 Second Fiscal Quarter 2015 SG&A $ SG&A $ $500 $250 10.4% 10.5% $400 11.1% $200 11.1% $300 $150 $480.4 $242.4 $200 $371.3 $100 $187.9 $100 $50 $0 $0 2014 2015 Q2
Slide 15: Homebuilding Pre-tax Income
Homebuilding Pre-tax Income Homebuilding pre-tax income margin in Q2 2015 was 8.9% FYTD 3/31 Second Fiscal Quarter 2015 PTI $ PTI $ $500 $210 8.9% 9.0% $400 11.2% $205 $300 $200 $414.7 $195 11.3% $208.6 $200 $373.6 $190 $100 $191.7 $185 $0 $180 2014 2015 Q2 FY14 Q2 FY15 Shown as a % of homebuilding
Slide 16: Balance Sheet
Balance Sheet 3/31/15 9/30/14 3/31/14 HB cash and cash equivalents $ 665.8 $ 632.5 $ 972.8 Restricted cash 10.4 10.0 79.8 Inventories 8,136.9 7,700.5 6,783.6 Deferred income taxes, net 547.7 565.0 569.8 Other assets 1,352.3 1,294.5 966.8 Total $ 10,713.1 $ 10,202.5 $ 9,372.8 Notes payable - HB $ 3,5
Slide 17: Homes in Inventory
Homes in Inventory Growing housing inventory to meet increasing sales pace 22,000 21,300 20,600 20,000 18,000 17,600 17,000 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 3/31/14 9/30/14 3/31/15 Models Sold Specs J.P. Morgan Homebuilding and Building Prod
Slide 18: Robust Lot Position
Robust Lot Position 64,000 of our total lots are finished at 3/31/15 200,000 180,900 183,500 177,200 180,000 171,600 160,000 152,700 54,300 58,900 46,900 55,500 140,000 120,000 112,700 58,100 100,000 26,900 80,000 60,000 126,600 124,700 124,600 121,700 94,600 40,000 85,800 20,000 0 9/30/11 9/30/12 9
Slide 19: FY 2015 Expectations
FY 2015 Expectations* Fiscal Year: Closings between 35,500 and 37,500 and consolidated revenues between $9.8 billion and $10.5 billion Home sales gross margin of 19.5% to 20.0% with potential quarterly fluctuations outside of this range Homebuilding SG&A expense of 9.9% to 10.2% of homebuildin
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