D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q3 2024 Earnings Presentation
34 slides from D.r. Horton's earnings presentation, Jul 18, 2024
Slide 1: Investor Presentation Q3 2024
Investor Presentation Q3 2024
Slide 2: 121 Markets, 33 States: America's #1 Homebuilder
121 Markets 33 States be iad AMERICA’S #1 HOMEBUILDER SINCE 2002 D-RHORTON Sumericas Buitder
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 $37.3 billion $6.6 billion 21.5% & 29.5% Consolidated revenues Consolidated pre-tax income ROE & ROI (HB), respectively* $24.7 billion $75.32 18.8% Stockholders’ equity Book value per common share Consolidated leverage** As of or for the trailing twelve months
Slide 5: Growth in Market Share
Growth in Market Share 2023 Closings: 1,400 14% 90,777 94,255 Homes Closed during trailing twelve months ended 6/30/2024 1,200 12% 1,000 10% 800 8% 2006 Closings: 600 6% 53,410 2011 Closings: 17,176 400 4% 1992 Closings: 200 1,231 2% 0 0% Total U.S. Single-Family New Home Sales ('000s) DHI Homes Clo
Slide 6: Market Share Dominance
Market Share Dominance D.R. Horton is the largest builder in 3 of the top 5 U.S. housing markets & in 52 of the 118 markets in which we operated at September 30, 2023 Top 5 U.S. Housing Markets D.R. Horton Markets 25% 120 110 118 114 20% 100 107 90 80 15% 70 60 10% 50 52 40 30 5% 20 10 0% 0 DFW Hous
Slide 7: Management Tenure And Experience
Management Tenure And Experience Executive Team ~27 years Region Presidents & Vice Presidents ~20 years Division Presidents & City Managers ~14 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 69% of homes closed <$400k 23% $0 - $300k 25% $301k - $350k 21% $351k - $400k 20% $401k - 500k 11% >$500K 0% 5% 10% 15% 20% 25% 30% Represents price points of homes closed for the trailing twelv
Slide 9: Then & Now
Then & Now DHI’s business model has changed – strong balance sheet, low risk land position and cash flow generation Enhanced Financial Position De-Risked Lot Pipeline 47.8% $5,779 3.0 479,300 18.8% 190,245 1.7 $2,366 155,655 150,900 9/30/2005 6/30/2024 9/30/2005 6/30/2024 Liquidity Consolidated Leve
Slide 10: Total Shareholder Returns
Total Shareholder Returns D.R. Horton’s total shareholder return (TSR) ranks in the top quartile of all S&P 500 companies 3-Year TSR 5-Year TSR 10-Year TSR +319% TSR +748% TSR 94th Percentile +90% TSR 1st Quartile 1st Quartile 92nd Percentile 1st Quartile 85th Percentile 2nd Quartile 2nd Quartile 2n
Slide 11: Value Creation Strategy Will Continue to Produce Best-in-Class Returns
Value Creation Strategy Will Continue to Produce Best-in-Class Returns Disciplined focus on returns, consistent cash flow generation and balanced capital allocation drives shareholder value
Slide 12: Return On Equity
Return On Equity D.R. Horton’s average annual return on equity (ROE) ranks in the upper half of all S&P 500 companies 3-Year ROE 5-Year ROE 10-Year ROE 1st Quartile 1st Quartile 1st Quartile +27% ROE +26% ROE 70th Percentile 71st Percentile +22% ROE 2nd Quartile 2nd Quartile 66th Percentile 2nd Quar
Slide 13: Homebuilding Return On Inventory
Homebuilding Return On Inventory Manufacturing business model focused on operating and capital efficiency to produce strong returns and consistent cash flow 45% 40% 42.8% 35% 37.9% 30% 31.8% 29.7% 29.5% 25% 24.6% 20% 15% 18.1% 10% 5% 0% FY 2019 FY 2020 FY 2021 FY 2022 TTM 6/30/23 FY 2023 TTM 6/30/24
Slide 14: Return On Assets
Return On Assets D.R. Horton’s average annual return on assets (ROA) ranks in the top quartile of all S&P 500 companies 3-Year ROA 5-Year ROA 10-Year ROA +18% ROA +17% ROA 90th Percentile 1st Quartile 90th Percentile 1st Quartile +14% ROA 1st Quartile 86th Percentile 2nd Quartile 2nd Quartile 2nd Qu
Slide 15: Strong Track Record of Exceptional Financial Performance
Strong Track Record of Exceptional Financial Performance Diluted Earnings Per Share ($) Book Value Per Share ($) Consolidated Revenues ($ billions) $16.51 $37.3 $75.32 $35.5 $14.89 $33.5 $67.78 $13.82 $27.8 $56.39 $11.41 $20.3 $41.81 $17.6 $16.1 $32.53 $6.41 $27.20 $23.88 $4.29 $3.81 FY18 FY19 FY20
Slide 16: Cash Flow At Work
Cash Flow At Work ~60% of cash flow from homebuilding operations returned to shareholders over the past five years, HB Cash Flow* with an expected increase in return of capital to shareholders in FY25 and beyond $3,500 $3,000 ~5-Year Capital Allocation** $3,078 Cash Flow from $9.6B $2,500 Homebuildi
Slide 17: Capital And Cash Flow Priorities
Capital And Cash Flow Priorities • Focused on generating consistent and increasing cash flows from operations • Balanced, disciplined, flexible and opportunistic capital allocation to enhance long-term value • Invest to grow homebuilding business and multi-family and single-family rental platforms •
Slide 18: Homebuilding Operational Focus
Homebuilding Operational Focus • Maximize returns and generate consistent cash flow by managing sales pace and pricing in each community and provide value to homebuyers • Manage land, lot and home inventory efficiently to meet demand and gain market share • Minimum investment underwriting thresholds
Slide 19: Rental Operations
Rental Operations Develop, construct, lease and sell single-family and multi-family residential properties Generated $346.0 million of pre-tax income on $2.4 billion of revenues in the past twelve months Single-Family Rental Multi-Family Rental 3Q24 3Q23 TTM 3Q24 3Q23 TTM 6/30/24 6/30/24 Revenues $2
Slide 20: Forestar
Forestar • DHI owns 62% of Forestar, a publicly traded residential lot developer (NYSE: FOR) • Operations in 60 markets and 24 states • Uniquely positioned to aggregate significant market share of lot sales to homebuilders • Supports DHI’s strategy of controlling land and lots through purchase contr
Slide 21: Expectations
Expectations Although volatility in mortgage rates and changes in economic conditions could significantly impact the business, the Company’s expectations for Q4 and FY 2024 are as follows: Q4 FY 2024 • Consolidated revenues in a range of $10.0 billion to $10.4 billion • Homes closed between 24,000 h
Slide 22: Third Quarter Data
Third Quarter Data
Slide 23: Q3 FY 2024 Highlights
Q3 FY 2024 Highlights • Earnings per diluted share increased 5% to $4.10 on net income of $1.4 billion • Consolidated pre-tax income increased 1% to $1.8 billion, with a pre-tax profit margin of 18.1% • Consolidated revenues increased 2% to $10.0 billion • Homes closed increased 5% to 24,155 homes a
Slide 24: Homes Closed And Revenues
Homes Closed And Revenues Home sales revenues of $9.2 billion on 24,155 homes closed by homebuilding operations in Q3 FY24 Homes Closed Home Sales Revenues # of Homes Revenues 30,000 $9,231 $10,000 $8,703 24,155 $8,336 25,000 22,985 $8,000 21,308 20,000 $6,000 15,000 $4,000 10,000 $2,000 5,000 0 $-
Slide 25: Income Statement
Income Statement $ in millions except per share data
Slide 26: Home Sales Gross Margin
Home Sales Gross Margin Home sales gross margin fluctuating primarily due to interest rates and incentive levels 32% 28% 28.7% 24% 25.5% 23.9% 23.5% 24.0% 23.3% 22.9% 23.2% 20% 21.6% 16% 12% 8% 4% 0% FY 2021 FY 2022 1Q23 2Q23 3Q23 FY 2023 1Q24 2Q24 3Q24 Shown as a % of the Company’s homebuilding seg
Slide 27: Homebuilding SG&A
Homebuilding SG&A Controlling SG&A while ensuring that our platform adequately supports future growth Fiscal YTD 6/30 Third 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% $10,000 10% $20,000 9% $8,000 9% $16,000 8% $6,000 8% $12,000 7.5% 7%
Slide 28: Consolidated Pre-Tax Income
Consolidated Pre-Tax Income Q3 FY24 consolidated pre-tax income was $1.8 billion, with a profit margin of 18.1% Fiscal YTD 6/30 Third Fiscal Quarter PTI $ PTI $ $4,800 17.1% $2,400 17.2% $4,200 $4,575.0 $2,100 $4,296.4 $3,600 $1,800 18.3% 18.1% $1,783.9 $1,799.0 $3,000 $1,500 $2,400 $1,200 $1,800 $9
Slide 29: Balance Sheet
Balance Sheet $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $6.3 million, $6.5 million and $9.9 million of restricted cash for the periods ended 6/30/2024, 9/30/2023 and 6/30/2023, respectively
Slide 30: Homes In Inventory
Homes In Inventory Faster housing turns support more efficient housing inventory levels 70,000 60,000 50,000 47,800 46,400 43,800 42,000 42,600 40,000 30,000 20,000 10,000 0 9/30/21 9/30/22 6/30/23 9/30/23 6/30/24 Sold Specs Homes in inventory excluding model homes
Slide 31: Homebuilding Land And Lot Position
Homebuilding Land And Lot Position Strong, flexible land and lot pipeline 24% owned / 76% controlled at 6/30/24 700,000 630,200 600,000 573,200 568,400 555,100 530,300 500,000 400,000 479,300 442,100 417,600 427,300 402,500 300,000 200,000 100,000 127,800 131,100 137,500 141,100 150,900 0 9/30/21 9/
Slide 32: Appendix
Appendix
Slide 33: Geographic Diversification
Geographic Diversification 10% 121 Markets | 33 States 8% 26% Northwest Homebuilding 15% Colorado, Oregon, Utah and Washington Revenue 23% 18% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Arkansas, Oklahoma and Texas Southeast South Central East Southwest Northwest Nort
Slide 34: Homebuilding Public Debt Maturities By Year
Homebuilding Public Debt Maturities By Year Next senior note maturity in early fiscal 2025 – plan to refinance $700 $600 $600 $500 $500 $500 $500 $400 $300 $200 2.50% 2.60% 1.30% 1.40% $100 $0 FY 24 FY 25 FY 26 FY 27 FY 28 $ in millions