D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q1 2023 Earnings Presentation
31 slides from D.r. Horton's earnings presentation, Jan 24, 2023
Slide 1: Investor Presentation Q1 2023
Investor Presentation Q1 2023
Slide 2: America's #1 Homebuilder
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 $7.4 billion 31.5% & 39.5% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $20.2 billion $58.71 12.8% 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% 81,688 Homes Closed during TTM ended 12/31/2022 2022 Closings: 82,744 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 C
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 >10 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% 22% 13% $0 - $300k $301k - $350k $351k - $400k $401k - $500k >$500k Represents price points of homes closed for the twelve months ended 12/31/22
Slide 9: Return on Equity (ROE)
RETURN ON EQUITY (ROE) Strong ROE while maintaining low homebuilding leverage ROE HB leverage 40% 40% 35% 35% 34.5% 30% 31.6% 32.4% 31.5% 30% 25% 25% 20% 22.1% 20% 15% 15% 10% 10% 5% 5% 0% 0% FY 2020 FY 2021 TTM 12/31/21 FY 2022 TTM 12/31/22 ROE Leverage ROE is calculated as net income divided by av
Slide 10: Emphasis on Homebuilding Return on Inventory (ROI)
EMPHASIS ON HOMEBUILDING RETURN ON INVENTORY (ROI) 45% 40% 42.8% 38.5% 39.5% 35% 37.9% 30% 25% 24.6% 20% 15% 10% 5% 0% FY 2020 FY 2021 TTM 12/31/21 FY 2022 TTM 12/31/22 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Average homeb
Slide 11: Book Value and Earnings Per Share
BOOK VALUE AND EARNINGS PER SHARE Strong EPS driving consistent growth in book value per share $60 Fiscal Year Ended $60 Three Months Ended $58.71 $56.39 $50 $50 $40 $40 $44.25 $41.81 $30 $30 $34.33 $32.53 $27.20 $20 $20 $16.51 $10 $11.41 $10 $2.14 $3.17 $2.76 $4.29 $6.41 $0 $0 9/30/2019 9/30/2020 9
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 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 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 D.R. Horton’s rental operations develop, construct, lease and sell single‐family and multi‐family residential properties Single‐Family Rental Multi‐Family Rental 1Q23 FY22 1Q22 1Q23 FY22 1Q22 Revenues $228.0 million $313.8 million $80.3 million Revenues $99.5 million $196.4 million
Slide 16: Forestar
FORESTAR • DHI owns 63% of FOR, a publicly traded residential lot manufacturer (NYSE: FOR) • Operations in 52 markets and 20 states • Supports DHI’s strategy of increasing land and lots controlled through purchase contracts • Sold 2,263 lots, generating $217 million of revenue in Q1 FY23 • Liquidity
Slide 17: Q2 FY 2023 Expectations
Q2 FY 2023 EXPECTATIONS • As we look forward to the second 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 • Providi
Slide 18: FY 2023 Outlook
FY 2023 OUTLOOK • 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 • Still too early to know what housing market conditions will be like duri
Slide 19: First Quarter Data
First Quarter Data
Slide 20: Q1 FY 2023 Highlights
Q1 FY 2023 HIGHLIGHTS • Net income attributable to D.R. Horton of $958.7 million or $2.76 per diluted share • Consolidated pre‐tax income of $1.3 billion, with a pre‐tax profit margin of 17.5% • Consolidated revenues increased 3% to $7.3 billion • Homes sales revenue increased 1% to $6.7 billion on
Slide 21: Homes Closed and Revenues
HOMES CLOSED AND REVENUES Homes closed and home sales revenues decreased 6% and increased 1%, respectively, in Q1 FY23 compared to Q1 FY22 Homes Closed Home Sales Revenues # of Homes Revenues 20,000 $10,000 $8,000 15,000 $6,000 10,000 $4,000 5,000 $2,000 0 $‐ 1Q FY21 1Q FY22 1Q FY23 1Q FY21 1Q FY22
Slide 22: Income Statement
INCOME STATEMENT 3 MONTHS ENDED FISCAL YEAR ENDED 12/31/2022 12/31/2021 9/30/2022 9/30/2021 Homes closed 17,340 18,396 82,744 81,965 Homebuilding Revenues: Home sales $ 6,709.2 $ 6,656.4 $ 31,861.7 $ 26,502.6 Land/lot sales 34.8 23.0 61.4 75.0 6,744.0 6,679.4 31,923.1 26,577.6 Gross profit: Home sal
Slide 23: Home Sales Gross Margin
HOME SALES GROSS MARGIN 32% 28% 30.1% 28.9% 28.3% 28.7% 27.4% 24% 25.5% 23.9% 20% 21.8% 16% 12% 8% 4% 0% FY 2020 FY 2021 1Q22 2Q22 3Q22 4Q22 FY 2022 1Q23 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amortized to cost of sales Refer to slide 4 of the Comp
Slide 24: Homebuilding SG&A
HOMEBUILDING SG&A Continue to control SG&A while ensuring our platform adequately supports our business Fiscal Year First 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% $4,000
Slide 25: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Consolidated pre‐tax income was $1.3 billion with a pre‐tax profit margin of 17.5% in Q1 FY23 Fiscal Year First Fiscal Quarter PTI $ PTI $ $8,000 22.8% $1,800 $7,000 $7,629.7 $1,600 21.2% $1,400 $1,497.3 17.5% $6,000 19.3% $1,200 $1,267.2 $5,000 $5,356.3 $1,000 $4,000 $80
Slide 26: Balance Sheet
BALANCE SHEET 12/31/2022 9/30/2022 12/31/2021 Homebuilding Cash and cash equivalents $ 2,046.8 $ 2,052.0 $ 2,145.8 Inventories: Construction in progress and finished homes 9,657.4 9,951.5 8,879.5 Land inventories 8,048.4 7,372.9 6,417.4 17,705.8 17,324.4 15,296.9 Deferred income taxes and other asse
Slide 27: Homes in Inventory
HOMES IN INVENTORY Managing housing inventory to meet demand and support market share gains 60,000 54,800 50,000 47,800 46,400 43,200 40,000 38,000 30,000 20,000 10,000 0 9/30/20 9/30/21 12/31/21 9/30/22 12/31/22 Sold Specs Homes in inventory excluding model homes
Slide 28: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Flexible land and lot pipeline 25% owned / 75% controlled at 12/31/22 600,000 573,200 551,400 551,000 530,300 500,000 400,000 376,900 419,500 442,100 414,600 402,500 300,000 264,300 200,000 100,000 112,600 127,800 131,900 131,100 136,400 0 9/30/20 9/30/21 12/31/21
Slide 29: Appendix
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Slide 30: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 9% 109 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 31: 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