D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q4 2023 Earnings Presentation
31 slides from D.r. Horton's earnings presentation, Nov 7, 2023
Slide 1: Investor Presentation Q4 2023
Investor Presentation Q4 2023
Slide 2: 118 Markets, 33 States: America's #1 Homebuilder
118 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 $35.5 billion $6.3 billion 22.7% & 29.7% Consolidated revenues Consolidated pre-tax income ROE & ROI (HB), respectively* $22.7 billion $67.78 18.3% Stockholders’ equity Book value per common share Consolidated leverage* As of or for the fiscal year ended Septe
Slide 5: DHI Growth, Consolidation And Market Share
DHI Growth, Consolidation And Market Share 2023 Closings: 1,400 14% 89,092 89,092 Homes Closed during fiscal year ended 9/30/2023 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
Slide 6: Market Share Dominance
Market Share Dominance D.R. Horton is the largest builder in each of the top 5 U.S. housing markets & in 55 of the 118 markets in which we operate Top 5 U.S. Housing Markets D.R. Horton Markets 20% 120 18% 110 118 111 16% 100 103 90 14% 80 12% 70 10% 60 8% 50 55 40 6% 30 4% 20 2% 10 0% 0 DFW Houston
Slide 7: Management Tenure And Experience
Management Tenure And Experience Executive Team ~30 years Region Presidents & Vice Presidents ~22 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 68% of homes closed <$400k 22% $0 - $300k 26% $301k - $350k 20% $351k - $400k 20% $401k - 500k 12% >$500K 0% 5% 10% 15% 20% 25% 30% Represents price points of homes closed for the fiscal year en
Slide 9: Return On Equity (ROE)
Return On Equity (ROE) Strong ROE while maintaining low leverage Consolidated ROE Leverage 40% 40% 35% 35% 34.5% 30% 31.6% 30% 25% 25% 20% 22.1% 22.7% 20% 15% 15% 10% 10% 5% 5% 0% 0% FY 2020 FY 2021 FY 2022 FY 2023 ROE Leverage ROE is calculated as net income divided by average stockholders’ equity.
Slide 10: Emphasis On Homebuilding Return On Inventory (ROI)
Emphasis On Homebuilding Return On Inventory (ROI) 45% 40% 42.8% 35% 37.9% 30% 29.7% 25% 24.6% 20% 15% 10% 5% 0% FY 2020 FY 2021 FY 2022 FY 2023 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Average homebuilding inventory in the
Slide 11: Consolidated Pre-Tax Profit Margin
Consolidated Pre-Tax Profit Margin Consolidated pre-tax profit margin of 17.8% in FY23 on a 6% increase in Rev $ consolidated revenues to $35.5 billion PTI % $40 25% 22.8% $35 19.3% $35.5 20% $30 $33.5 17.8% $25 14.7% $27.8 15% $20 $20.3 10% $15 $10 5% $5 $7.6 $6.3 $5.4 $3.0 $0 0% FY 2020 FY 2021 FY
Slide 12: 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 $67.78 $60 $56.39 $50 $40 $41.81 $30 $32.53 $27.20 $20 $16.51 $10 $13.82 $11.41 $4.29 $6.41 $0 9/30/2019 9/30/2020 9/30/2021 9/30/2022 9/30/2023 BV Per Share Diluted EPS As of or for
Slide 13: Cash Flow At Work
Cash Flow At Work Homebuilding operations generated $9.6 billion of cash flow over the past five years HB Cash Flow* $3,500 $3,000 ~5-Year Capital Allocation** $3,078 Cash Flow from $9.6B $2,500 Homebuilding Operations $2,000 Shareholder Return $5.4B $1,917 through Dividends and $1,889 Share Repurch
Slide 14: 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 15: 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 • Manage land, lot and home inventory efficiently to meet demand and gain market share • Minimum investment underwriting thresholds
Slide 16: Rental Operations
Rental Operations Develop, construct, lease and sell single-family and multi-family residential properties Generated $524 million of pre-tax income on $2.6 billion of revenues in fiscal 2023 Single-Family Rental Multi-Family Rental FY23 FY22 FY23 FY22 Revenues $2.01B $313.8M Revenues $590.7M $196.4M
Slide 17: Forestar
Forestar • DHI owns 63% of Forestar, a publicly traded residential lot manufacturer (NYSE: FOR) • Operations in 54 markets and 22 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 18: Expectations
Expectations Expect challenging market conditions to persist in fiscal 2024 with continued uncertainty regarding mortgage rates, the capital markets and general economic conditions that may significantly impact the business Q1 FY 2024 • Consolidated revenues in a range of $7.4 billion to $7.6 billio
Slide 19: Fourth Quarter Data
Fourth Quarter Data
Slide 20: Q4 FY 2023 Highlights
Q4 FY 2023 Highlights • Net income of $1.5 billion or $4.45 per diluted share • Consolidated pre-tax income of $2.0 billion, with a pre-tax profit margin of 19.2% • Consolidated revenues increased 9% to $10.5 billion • Home sales revenues of $8.8 billion on 22,928 homes closed • Net sales orders inc
Slide 21: Homes Closed And Revenues
Homes Closed And Revenues Home sales revenues of $8.8 billion on 22,928 homes closed by homebuilding operations in Q4 FY23 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 $- 4Q FY21 4Q FY22 4Q FY23 4Q FY21 4Q FY22 4Q FY23 $
Slide 22: Income Statement
Income Statement $ in millions except per share data
Slide 23: Home Sales Gross Margin
Home Sales Gross Margin Home sales gross margin adjusting due to higher mortgage interest rates 32% 28% 28.7% 24% 25.5% 25.1% 23.9% 23.3% 23.5% 20% 21.8% 21.6% 16% 12% 8% 4% 0% FY 2020 FY 2021 FY 2022 1Q23 2Q23 3Q23 4Q23 FY 2023 Shown as a % of the Company’s homebuilding segment’s home sales revenue
Slide 24: Homebuilding SG&A
Homebuilding SG&A Controlling SG&A while maintaining our platform capacity to meet market demand Fiscal Year Fourth 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% $4,000 7% $8
Slide 25: Consolidated Pre-Tax Income
Consolidated Pre-Tax Income Q4 FY23 consolidated pre-tax income was $2.0 billion with a profit margin of 19.2% PTI $ PTI Margin % $2,400 25% 21.4% $2,100 19.2% 21.3% $2,065.9 20% $1,800 $2,018.3 $1,500 $1,726.6 15% $1,200 16.5% $900 10% $1,056.1 $600 5% $300 $0 0% Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 $ i
Slide 26: Balance Sheet
Balance Sheet $ in millions except per share metrics Homebuilding cash and cash equivalents presented above includes $6.5 million and $11.3 million of restricted cash for the periods ended 9/30/2023 and 9/30/22, respectively.
Slide 27: Homes In Inventory
Homes In Inventory Managing housing inventory to meet demand and aggregate market share 70,000 60,000 50,000 47,800 46,400 42,000 40,000 38,000 30,000 20,000 10,000 0 9/30/20 9/30/21 9/30/22 9/30/23 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 9/30/23 600,000 573,200 568,400 530,300 500,000 400,000 376,900 442,100 427,300 402,500 300,000 264,300 200,000 100,000 112,600 127,800 131,100 141,100 0 9/30/20 9/30/21 9/30/22 9/30/23 Owned Controlled C
Slide 29: Appendix
Appendix
Slide 30: Geographic Diversification
Geographic Diversification 10% 118 Markets | 33 States 8% 28% 13% Northwest Homebuilding Colorado, Oregon, Utah and Washington Revenue 17% 24% Southwest Arizona, California, Hawaii, Nevada and New Mexico South Central Arkansas, Oklahoma and Texas Southeast South Central East Southwest Northwest Nort
Slide 31: Homebuilding Public Debt Maturities By Year
Homebuilding Public Debt Maturities By Year No senior note maturities until fiscal 2025 $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