D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q3 2022 Earnings Presentation
30 slides from D.r. Horton's earnings presentation, 2022
Slide 1: Investor Presentation Q3 2022
Investor Presentation Q3 2022
Slide 2: Broad Geographic Footprint
AMERICA’S #1 HOMEBUILDER SINCE 2002 D-RHORTON | 0.2. norton. express - emeRato « FREEDOM Atorica’s Buiter
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 $31.9 billion $7.3 billion 35.1% & 41.7% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $18.1 billion $52.00 17.0% 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% 81,469 Homes Closed during TTM ended 6/30/2022 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 2004
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 29 years Region Presidents & Vice Presidents 20 years Division Presidents 14 years City Managers 11 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 54% of homes closed <$350k 30% 24% 18% 17% 11% $0 - $300k $301k - $350k $351k - $400k $401k - $500k >$500k Represents price points of homes closed for the twelve months ended 6/30/22
Slide 9: 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% 35.1% 30% 31.6% 30% 29.5% 25% 25% 20% 22.1% 20% 15% 17.2% 15% 10% 10% 5% 5% 0% 0% FY 2019 FY 2020 TTM 6/30/21 FY 2021 TTM 6/30/22 ROE Leverage ROE is calculated as n
Slide 10: Emphasis on Homebuilding Return on Inventory (ROI)
EMPHASIS ON HOMEBUILDING RETURN ON INVENTORY (ROI) 45% 40% 41.7% 35% 37.9% 34.9% 30% 25% 24.6% 20% 15% 18.1% 10% 5% 0% FY 2019 FY 2020 TTM 6/30/21 FY 2021 TTM 6/30/22 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Average homebui
Slide 11: Book Value and Earnings Per Share
BOOK VALUE AND EARNINGS PER SHARE Strong annual growth in both book value per share and EPS Fiscal Year Ended Nine Months Ended $50 $50 $52.00 $40 $41.81 $40 $38.54 $30 $32.53 $30 $30.38 $27.20 $20 $23.88 $20 $11.85 $10 $11.41 $10 $7.73 $4.17 $6.41 $3.81 $4.29 $0 $0 9/30/2018 9/30/2019 9/30/2020 9/3
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 multi‐family and si
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 and generating strong profits and operating cash flow • Maintain and manage inventories of land, lots and homes to meet demand and support market s
Slide 15: Forestar ("FOR")
FORESTAR (“FOR”) • DHI owns 63% of FOR, a publicly traded residential lot manufacturer with operations in 52 markets and 22 states • Supports DHI’s strategy of increasing land and lots controlled through purchase contracts • FOR sold 13,777 lots, generating $1.1 billion of revenue during the nine mo
Slide 16: Rental Operations
RENTAL OPERATIONS • Develop, construct, lease and sell multi‐family and single‐family residential properties • Generated revenues of $489.1 million and pre‐tax income of $215.1 million during the nine months ended 6/30/22 • Generated revenues of $109.7 million and pre‐tax income of $42.6 million in
Slide 17: Expectations
EXPECTATIONS The current transition in housing market conditions caused primarily by higher mortgage rates has increased the level of uncertainty and reduced visibility to future operational results. As a result, ranges for the Company’s volume and margin guidance are wider than normal. Q4 FY 2022 •
Slide 18: Third Quarter Data
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Slide 19: Q3 FY 2022 Highlights
Q3 FY 2022 HIGHLIGHTS • Net income per diluted share increased 53% to $4.67 • Net income attributable to D.R. Horton increased 48% to $1.6 billion • Consolidated revenues increased 21% to $8.8 billion • Consolidated pre‐tax income increased 54% to $2.2 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 8% and 18%, respectively, in Q3 FY22 compared to Q3 FY21 Net Sales Orders Closings # of Homes Value 25,000 $8,336.4 $9,000 $7,040.1 $6,448.9 $6,940.7 $7,500 20,000 $6,337.3 $5,207.6 $6,000 15,000 $4,500 10,000 $3,000 5,000 $
Slide 21: Home Sales Gross Margin
HOME SALES GROSS MARGIN 32% 30% 28% 30.1% 28.9% 26% 27.4% 26.9% 24% 25.9% 25.5% 22% 24.1% 24.6% 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 2Q22 3Q22 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amo
Slide 22: Homebuilding SG&A
HOMEBUILDING SG&A SG&A as a percentage of homebuilding revenues improved 50 basis points to 6.6% in Q3 FY22 HB Rev $ Fiscal YTD 6/30 SG&A % HB Rev $ Third Fiscal Quarter SG&A % $28,000 12% $14,000 12% $24,000 11% $12,000 11% $20,000 10% $10,000 10% $16,000 9% $8,000 9% $12,000 8% $6,000 8% $8,000 7.
Slide 23: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Consolidated pre‐tax profit margin improved 540 basis points to 24.8% in Q3 FY22 Fiscal YTD 6/30 Third Fiscal Quarter PTI $ PTI $ $6,000 23.3% 24.8% $2,200 $5,500 $5,563.9 $2,000 $2,183.3 $5,000 $4,500 $1,800 $4,000 18.5% $1,600 19.4% $3,500 $1,400 $3,629.8 $1,200 $1,415.
Slide 24: Homes in Inventory
HOMES IN INVENTORY Housing inventory managed to meet demand and support market share gains 65,000 60,000 56,400 55,000 50,000 47,300 47,800 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 6/30/21 9/30/21 6/30/22 Sold Specs Homes in inventory excluding mo
Slide 25: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Flexible land and lot pipeline 22% owned / 78% controlled at 6/30/22 598,200 600,000 550,000 517,100 530,300 500,000 450,000 400,000 376,900 467,100 350,000 307,300 402,500 393,200 300,000 250,000 264,300 185,900 200,000 150,000 100,000 50,000 121,400 112,600 123,9
Slide 26: Appendix
Appendix
Slide 27: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 9% 105 Markets 33 States 9% 26% Homebuilding 15% Northwest Colorado, Oregon, Utah and Washington Revenue 25% 16% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Arkansas, Oklahoma and Texas Southeast South Central East Southwest Northwest North S
Slide 28: Income Statement
INCOME STATEMENT $ in millions except per share data
Slide 29: Balance Sheet
BALANCE SHEET $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $16.2 million, $8.4 million and $11.2 million of restricted cash for the periods ended 6/30/22, 9/30/21 and 6/30/21, respectively.
Slide 30: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR $650 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