D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q2 FY2015 Earnings Presentation
24 slides from D.r. Horton's earnings presentation, 2015
Slide 1: Q2 FY2015
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Slide 2: D.R. Horton, America's Builder
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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 #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 5: Geographic Diversification
Geographic Diversification HB Revenue 79 Markets | 27 States (TTM Ended 3/31/15) East 13% West 25% Midwest 6% Southwest 3% South Central 25% Southeast 28% East Inventory 11% (as of 3/31/15) Midwest Region States Covered West 6% 28% East Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsy
Slide 6: Broad Range of Product Offerings
Broad Range of Product Offerings Homes for entry-level, move-up and luxury buyers Under $500k+ $150k $400k to $500k $151k to $200k $300k to $400k $250k to $300k $200k to $250k 53% of closings < $250,000 in Q2 FY15, down from 56% in Q2 FY14 Revenues from homes > $500,000 were 15% of home sales revenu
Slide 7: Competitive Advantage
Competitive Advantage Average employee tenure: Region Presidents – over 20 years Division Presidents – 15 years City Managers – over 10 years 10 Q2 FY2015 7
Slide 8: 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 9: 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 Q2 FY2015 9
Slide 10: Express Homes
Express Homes Targeted at the true entry-level buyer Introduced in Spring 2014 $151k to 44 markets and 13 states $200k 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 11: 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 12: Targeted Market Consolidations
Targeted Market Consolidations Completed four acquisitions since fiscal 2012 $151k Company Date Acquired Market(s) to Amount Paid $200k 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 13: 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 14: Sales, Closings & Backlog – Q2 FY15
Sales, Closings & Backlog – Q2 FY15 Net Sales Orders, Homes Closed and Homes in Backlog increased 30%, 33% and 21%, respectively, in Q2 of FY15 compared to Q2 of FY14 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Sales Closings Backlog 2Q FY13 2Q FY14 2Q FY15 Q2 FY2015 14
Slide 15: Income Statement
Income Statement 6 Months Ended Fiscal Year Ended 3/31/2015 3/31/2014 9/30/2014 9/30/2013 Homes closed 16,216 12,382 28,670 24,155 Revenues: Home sales $ 4,559.4 $ 3,310.8 $ 7,804.7 $ 6,024.8 Land/lot sales & other 32.1 21.5 53.8 61.1 4,591.5 3,332.3 7,858.5 6,085.9 Gross Profit: Home sales 899.5 74
Slide 16: Home Sales Gross Margin
Home Sales Gross Margin Homes sales gross margin of around 20% in a stable housing market 25% 20% 22.5% 21.4% 21.9% 22.3% 20.7% 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 17: 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 10.5% $250 10.4% $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 18: 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 $500 9.0% $400 11.2% $400 $300 $300 11.3% 8.9% $414.7 $200 $200 $373.6 $208.6 $100 $100 $191.7 $0 $0 2014 2015 Q2 FY14 Q2 FY15 Shown as a % of homebuilding revenue
Slide 19: 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 20: 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 Q2 FY2015 20
Slide 21: Robust Lot Position
Robust Lot Position 64,000 of our total lots are finished at 3/31/15 200,000 180,900 183,500 180,000 177,200 171,600 160,000 152,700 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 85,800 94,600 40,000 20,000 0 9/30/11 9/30/12 9
Slide 22: Inactive Land Held for Development
Inactive Land Held for Development “Mothballed” lot count down 41% from 9/30/13 $800 50000 $699.2 45000 $700 $628.3 43,100 40000 $600 39,400 35000 $500 $450.2 30000 $400 25000 $332.8 21,700 20000 $300 $271.3 15000 $200 14,000 12,900 10000 $100 5000 $0 0 9/30/11 9/30/12 9/30/13 9/30/14 3/31/15 Carryi
Slide 23: Public Debt Maturities by Year
Public Debt Maturities by Year $800 $700 $700 $600 $543 $500 $500 $500 $400 $400 $400 $350 5.750% $350 $350 6.500% $300 $200 $100 5.625% 4.750% 3.625% 3.750% 4.000% 4.375% 4.750% $0 FY 16 FY 17 FY 18 FY 19 FY 20 FY 22 FY 23 Balance of public notes outstanding at 3/31/15 of $3.3 billion $ in millions
Slide 24: 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