D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q3 2023 Earnings Presentation
30 slides from D.r. Horton's earnings presentation, Jul 20, 2023
Slide 1: Investor Presentation Q3 2023
Investor Presentation Investor Q3 2023 Presentation Q3 | 2023
Slide 2: America's #1 Homebuilder Since 2002
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 $34.6 billion $6.4 billion 24.3% & 31.8% Consolidated revenues Consolidated pre‐tax income ROE & ROI (HB), respectively* $21.7 billion $64.03 11.1% 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% 2022 Closings: 86,466 Homes Closed during TTM ended 6/30/2023 82,930 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 Cl
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 25% 50 20% 45 40 42 37 15% 30 10% 20 5% 10 12 0% 0 DFW Houston Phoenix Austin Atlanta #1 Top 5 Top 10 Operate In DHI Market Share Next Ranking Competitor Market Share Source: Builder ma
Slide 7: Management Tenure and Experience
MANAGEMENT TENURE AND EXPERIENCE Executive Team Region Presidents Division Presidents City Managers 30 years ~22 years >14 years ~12 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 66% of homes closed <$400k 21% 25% 20% 21% 13% $0 - $300k $301k - $350k $351k - $400k $401k - $500k >$500k Represents price points of homes closed for the twelve months ended 6/30/23
Slide 9: Return on Equity (ROE)
RETURN ON EQUITY (ROE) Strong ROE while maintaining low homebuilding leverage ROE HB leverage 40% 40% 35% 35% 35.1% 34.5% 30% 31.6% 30% 25% 25% 24.3% 20% 22.1% 20% 15% 15% 10% 10% 5% 5% 0% 0% FY 2020 FY 2021 TTM 6/30/22 FY 2022 TTM 6/30/23 ROE Leverage ROE is calculated as net income divided by aver
Slide 10: Emphasis on Homebuilding Return on Inventory (ROI)
EMPHASIS ON HOMEBUILDING RETURN ON INVENTORY (ROI) 45% 40% 41.7% 42.8% 35% 37.9% 30% 31.8% 25% 24.6% 20% 15% 10% 5% 0% FY 2020 FY 2021 TTM 6/30/22 FY 2022 TTM 6/30/23 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 EPS driving consistent growth in book value per share $70 Fiscal Year Ended $70 Nine Months Ended $60 $60 $64.03 $56.39 $50 $50 $52.00 $40 $41.81 $40 $38.54 $30 $32.53 $30 $27.20 $20 $20 $16.51 $11.85 $7.73 $9.39 $10 $10 $11.41 $4.29 $6.41 $0 $0 9/30/2019 9/3
Slide 12: Cash Flow at Work
CASH FLOW AT WORK Homebuilding operations generated $8.6 billion of cash flow over the past five years HB Cash Flow* $2,250 ~5-Year Capital Allocation** $2,000 $2,133 Cash Flow from $8.6B $1,917 Homebuilding $1,750 $1,889 Operations $1,500 Shareholder Return $4.9B $1,453 through Dividends and $1,250
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 and generate consistent cash flow by managing sales pace and pricing in each community to provide value to homebuyers and aggregate market share • Manage land, lot and home inventory efficiently to meet demand while gaining market share • Minimum inv
Slide 15: Rental Operations
RENTAL OPERATIONS Develop, construct, lease and sell single‐family and multi‐family residential properties Generated $1.2 billion of revenues and $294 million of pre‐tax income in the past twelve months Single-Family Rental Multi-Family Rental 3Q23 3Q22 TTM 3Q23 3Q22 TTM 6/30/23 6/30/23 Revenues $58
Slide 16: Forestar
FORESTAR • DHI owns 63% of Forestar, a publicly traded residential lot manufacturer (NYSE: FOR) • Operations in 52 markets and 20 states • Uniquely positioned to aggregate significant market share of lot sales to homebuilders • Supports DHI’s strategy of controlling land and lots through purchase co
Slide 17: Expectations
EXPECTATIONS Looking forward, we expect current market conditions to continue with uncertainty regarding mortgage interest rates, the capital markets and general economic conditions that may significantly impact our business Q4 FY 2023 • Consolidated revenues in a range from $9.7 billion to $10.1 bi
Slide 18: Third Quarter Data
Third Quarter Data
Slide 19: Q3 FY 2023 Highlights
Q3 FY 2023 HIGHLIGHTS • Net income attributable to D.R. Horton of $1.3 billion or $3.90 per diluted share • Consolidated pre‐tax income of $1.8 billion, with a pre‐tax profit margin of 18.3% • Consolidated revenues increased 11% to $9.7 billion • Homes closed increased 8% to 22,985 homes and 4% in v
Slide 20: Homes Closed and Revenues
HOMES CLOSED AND REVENUES Homes closed increased 8% and home sales revenues increased 4% in Q3 FY23 compared to Q3 FY22 Homes Closed Home Sales Revenues # of Homes Revenues 25,000 $10,000 20,000 $8,000 15,000 $6,000 10,000 $4,000 5,000 $2,000 0 $‐ 3Q FY21 3Q FY22 3Q FY23 3Q FY21 3Q FY22 3Q FY23 $ in
Slide 21: Income Statement
INCOME STATEMENT $ in millions except per share data
Slide 22: Home Sales Gross Margin
HOME SALES GROSS MARGIN Home sales gross margin is stabilizing after adjustment to higher mortgage interest rates 32% 28% 30.1% 28.9% 28.7% 27.4% 24% 25.5% 23.9% 23.3% 20% 21.8% 21.6% 16% 12% 8% 4% 0% FY 2020 FY 2021 1Q22 2Q22 3Q22 FY 2022 1Q23 2Q23 3Q23 Shown as a % of the Company’s homebuilding se
Slide 23: Homebuilding SG&A
HOMEBUILDING SG&A Control SG&A while maintaining our platform capacity to grow market share 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 $10,000 10% 10% $20,000 9% $8,000 9% $16,000 8% $6,000 8% $12,000 7% $4,000 7% $8,0
Slide 24: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Q3 FY23 consolidated pre‐tax income was $1.8 billion with a profit margin of 18.3% Fiscal YTD 6/30 Third Fiscal Quarter PTI $ PTI $ $6,000 23.3% $2,400 24.8% $2,100 $2,183.3 $5,000 $5,563.9 18.3% 17.2% $1,800 $4,000 $1,783.9 $4,296.4 $1,500 $3,000 $1,200 $900 $2,000 $600
Slide 25: Balance Sheet
BALANCE SHEET $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $9.9 million, $11.3 million and $16.2 million of restricted cash for the periods ended 6/30/23, 9/30/22 and 6/30/22, respectively.
Slide 26: Homes in Inventory
HOMES IN INVENTORY Managing housing inventory to meet demand and aggregate market share 70,000 60,000 56,400 50,000 47,800 46,400 43,800 40,000 38,000 30,000 20,000 10,000 0 9/30/20 9/30/21 6/30/22 9/30/22 6/30/23 Sold Specs Homes in inventory excluding model homes
Slide 27: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Flexible land and lot pipeline 25% owned / 75% controlled at 6/30/23 598,200 600,000 573,200 555,100 530,300 500,000 400,000 376,900 467,100 442,100 417,600 402,500 300,000 264,300 200,000 100,000 112,600 127,800 131,100 131,100 137,500 0 9/30/20 9/30/21 6/30/22 9/
Slide 28: Appendix
Appendix
Slide 29: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 10% 113 Markets 33 States 8% 26% Homebuilding 14% Northwest Colorado, Oregon, Utah and Washington Revenue 25% 17% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Arkansas, Oklahoma and Texas Southeast South Central East Southwest Northwest North
Slide 30: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR $700 $600 $600 $500 $500 $500 $500 $400* $400 $300 $200 5.750% 2.500% 2.600% 1.300% 1.400% $100 $0 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 $ in millions *Redeemed $400 million of senior notes due August 2023 in July 2023