D.R. Horton, Inc., America`s Builder, Reports Fiscal 2013 First Quarter Earnings

Tue Jan 29, 2013 7:00am EST

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FORT WORTH, Texas--(Business Wire)--
D.R. Horton, Inc. (NYSE:DHI), America`s Builder, today reported that net income
for its first fiscal quarter ended December 31, 2012 increased 139% to $66.3
million, or $0.20 per diluted share. Net income for the same quarter of fiscal
2012 was $27.7 million, or $0.09 per diluted share. Homebuilding revenue for the
first quarter of fiscal 2013 increased 39% to $1.2 billion from $0.9 billion in
the same quarter of 2012. Homes closed in the quarter increased 26% to 5,182,
compared to 4,118 homes in the year-ago quarter. 

Net sales orders for the first quarter ended December 31, 2012 increased 39% to
5,259 homes from 3,794 homes in the year-ago quarter and the value of net sales
orders increased 60% to $1.3 billion from $0.8 billion. The Company`s
cancellation rate (cancelled sales orders divided by gross sales orders) for the
first quarter of fiscal 2013 was 22%. The Company`s sales order backlog of homes
under contract at December 31, 2012 increased 62% to 7,317 homes from 4,530
homes at December 31, 2011. The value of the backlog increased 80% to $1.8
billion at December 31, 2012 from $1.0 billion a year ago. 

The Company ended the quarter with $643.1 million of homebuilding unrestricted
cash and marketable securities and net homebuilding debt to total capital of
33.0%. Net homebuilding debt to total capital consists of homebuilding notes
payable net of cash and marketable securities divided by total equity plus
homebuilding notes payable net of cash and marketable securities. 

Donald R. Horton, Chairman of the Board, said, "This quarter was our most
profitable first quarter since 2007, with $107.9 million of pre-tax income, a
270% increase from the year-ago quarter. We experienced substantial increases in
the number of homes sold, closed and in backlog compared to the year-ago
quarter. At the same time, our average sales price has increased due to pricing
power, geographic mix and larger average home size. As a result, we achieved
dollar value increases in homes sold of 60%, homes closed of 38% and backlog of
80%. 

"We experienced broad improvement in demand in most of our markets this quarter,
and we significantly increased our investments in homes under construction,
finished lots, land and land development to capture this increasing demand. D.R.
Horton is the best positioned it has been in its 35 year history. We are looking
forward to the spring selling season with optimism." 

The Company will host a conference call today (Tuesday, January 29th) at 10:00
a.m. Eastern time. The dial-in number is 877-407-8033, and the call will also be
webcast from www.drhorton.com on the "Investors" page. 

D.R. Horton, Inc., America`s Builder, is the largest homebuilder in the United
States, based on its 19,954 homes closed in the twelve-month period ended
December 31, 2012. Founded in 1978 in Fort Worth, Texas, D.R. Horton has
operations in 77 markets in 26 states in the East, Midwest, Southeast, South
Central, Southwest and West regions of the United States. The Company is engaged
in the construction and sale of high quality homes with sales prices ranging
from $100,000 to over $600,000. D.R. Horton also provides mortgage financing and
title services for homebuyers through its mortgage and title subsidiaries. 

Portions of this document may constitute "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 materially different. All
forward-looking statements are based upon information available to D.R. Horton
on the date this release was issued. D.R. Horton does not undertake any
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. Forward-looking
statements in this release includethat D.R. Horton is the best positioned it has
been in its 35 year history and that we are looking forward to the spring
selling season with optimism. 

Factors that may cause the actual results to be materially different from the
future results expressed by the forward-looking statements include, but are not
limited to: potential deterioration in homebuilding industry conditions and the
current weak U.S. economy; the cyclical nature of the homebuilding industry and
changes in general economic, real estate and other conditions; constriction of
the credit markets, which could limit our ability to access capital and increase
our costs of capital; reductions in the availability of mortgage financing and
the liquidity provided by government-sponsored enterprises, the effects of
government programs, a decrease in our ability to sell mortgage loans on
attractive terms or an increase in mortgage interest rates; the risks associated
with our land and lot inventory; home warranty and construction defect claims;
supply shortages and other risks for acquiring land, building materials and
skilled labor; reductions in the availability of performance bonds; increases in
the costs of owning a home; the effects of governmental regulations and
environmental matters on our homebuilding operations; the effects of
governmental regulation on our financial services operations; our debt
obligations and our ability to comply with related debt covenants, restrictions
and limitations; competitive conditions within the homebuilding and financial
services industries; our ability to effect any future growth strategies
successfully; the impact of an inflationary or deflationary environment; our
ability to realize the full amount of our deferred income tax asset; and
information technology failures and data security breaches. Additional
information about issues that could lead to material changes in performance is
contained in D.R. Horton`s annual report on Form 10-K which is filed with the
Securities and Exchange Commission. 

WEBSITE ADDRESS:www.drhorton.com

                                                                                                                                                                             
 D.R. HORTON, INC.                                                                                                                                                           
 CONSOLIDATED BALANCE SHEETS                                                                                                                                                 
 (UNAUDITED)                                                                                                                                                                 
                                                                                                                                                                             
                                                                                                                       December 31,                   September 30,          
                                                                                                                       2012                           2012                   
   ASSETS                                                                                                              (In millions)                                         
   Homebuilding:                                                                                                                                                             
   Cash and cash equivalents                                                                                           $      546.4                   $      1,030.4         
   Marketable securities, available-for-sale                                                                                  96.7                           298.0           
   Restricted cash                                                                                                            54.8                           49.3            
   Inventories:                                                                                                                                                              
   Construction in progress and finished homes                                                                                1,909.5                        1,682.7         
   Residential land and lots - developed and under development                                                                2,475.7                        1,838.4         
   Land held for development                                                                                                  629.9                          644.1           
                                                                                                                              5,015.1                        4,165.2         
   Income taxes receivable                                                                                                    -                              14.4            
   Deferred income taxes, net of valuation allowance of $41.9 million at December 31, 2012 and September 30, 2012             683.5                          709.5           
   Property and equipment, net                                                                                                81.9                           72.6            
   Other assets                                                                                                               454.2                          456.8           
   Goodwill                                                                                                                   38.9                           38.9            
                                                                                                                              6,971.5                        6,835.1         
   Financial Services:                                                                                                                                                       
   Cash and cash equivalents                                                                                                  20.5                           17.3            
   Mortgage loans held for sale                                                                                               307.9                          345.3           
   Other assets                                                                                                               47.4                           50.5            
                                                                                                                              375.8                          413.1           
                                                                                                                       $      7,347.3                 $      7,248.2         
   LIABILITIES                                                                                                                                                               
   Homebuilding:                                                                                                                                                             
   Accounts payable                                                                                                    $      241.8                   $      216.2           
   Accrued expenses and other liabilities                                                                                     856.6                          893.8           
   Notes payable                                                                                                              2,424.3                        2,305.3         
                                                                                                                              3,522.7                        3,415.3         
   Financial Services:                                                                                                                                                       
   Accounts payable and other liabilities                                                                                     42.1                           50.4            
   Mortgage repurchase facility                                                                                               169.4                          187.8           
                                                                                                                              211.5                          238.2           
                                                                                                                              3,734.2                        3,653.5         
                                                                                                                                                                             
   EQUITY                                                                                                                                                                    
   Common stock                                                                                                               3.3                            3.3             
   Additional paid-in capital                                                                                                 1,992.2                        1,979.8         
   Retained earnings                                                                                                          1,749.2                        1,743.1         
   Treasury stock, at cost                                                                                                    (134.3   )                     (134.3   )      
   Accumulated other comprehensive income                                                                                     -                              0.2             
                                                                                                                              3,610.4                        3,592.1         
   Noncontrolling interests                                                                                                   2.7                            2.6             
                                                                                                                              3,613.1                        3,594.7         
                                                                                                                       $      7,347.3                 $      7,248.2         


                                                                                                                                                                     
 D.R. HORTON, INC.                                                                                                                                                   
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME                                                                                                      
 (UNAUDITED)                                                                                                                                                         
                                                                                                                                                                     
                                                                                                           Three Months Ended                                        
                                                                                                           December 31,                                              
                                                                                                                  2012                                 2011          
                                                                                                    (In millions, except per share data)                             
 Homebuilding:                                                                                                                                                       
                   Revenues:                                                                                                                                         
                                       Home sales                                                          $      1,223.3                       $      884.3         
                                       Land/lot sales and other                                                   9.9                                  1.3           
                                                                                                                                                                     
                                                                                                                  1,233.2                              885.6         
                   Cost of sales:                                                                                                                                    
                                       Home sales                                                                 992.8                                735.6         
                                       Land/lot sales and other                                                   8.2                                  -             
                                       Inventory impairments and land option cost write-offs                      1.3                                  1.4           
                                                                                                                                                                     
                                                                                                                  1,002.3                              737.0         
                   Gross profit:                                                                                                                                     
                                       Home sales                                                                 230.5                                148.7         
                                       Land/lot sales and other                                                   1.7                                  1.3           
                                       Inventory impairments and land option cost write-offs                      (1.3     )                           (1.4   )      
                                                                                                                                                                     
                                                                                                                  230.9                                148.6         
                                                                                                                                                                     
                   Selling, general and administrative expense                                                    140.8                                119.0         
                   Interest expense                                                                               3.2                                  6.9           
                   Gain on early retirement of debt, net                                                          -                                    (0.1   )      
                   Other (income)                                                                                 (3.3     )                           (2.2   )      
                                                                                                                                                                     
                   Operating income from Homebuilding                                                             90.2                                 25.0          
                                                                                                                                                                     
 Financial Services:                                                                                                                                                 
                   Revenues, net of recourse and reinsurance expense                                              41.9                                 21.0          
                   General and administrative expense                                                             25.7                                 18.9          
                   Interest expense                                                                               1.0                                  0.9           
                   Interest and other (income)                                                                    (2.5     )                           (3.0   )      
                                                                                                                                                                     
                   Operating income from Financial Services                                                       17.7                                 4.2           
                                                                                                                                                                     
 Income before income taxes                                                                                       107.9                                29.2          
 Income tax expense                                                                                               41.6                                 1.5           
                                                                                                                                                                     
 Net income                                                                                                $      66.3                          $      27.7          
                                                                                                                                                                     
 Other comprehensive income (loss), net of income tax:                                                                                                               
 Unrealized (loss) gain related to available-for-sale securities                                                  (0.1     )                           0.1           
                                                                                                                                                                     
 Comprehensive income                                                                                      $      66.2                          $      27.8          
                                                                                                                                                                     
 Basic:                                                                                                                                                              
                   Net income per share                                                                    $      0.21                          $      0.09          
                   Weighted average number of common shares                                                       321.1                                316.3         
 Diluted:                                                                                                                                                            
                   Net income per share                                                                    $      0.20                          $      0.09          
                   Numerator for diluted income per share after                                                                                                      
                   assumed conversions                                                                                                                               
                                                                                                 $  72.0                          $      27.7          
                   Adjusted weighted average number of common shares                                              364.1                                316.5         
                                                                                                                                                                     
 Other Consolidated Financial Data:                                                                                                                                  
                                                                                                                                                                     
                   Interest amortized to home and land/lot cost of sales                                   $      24.9                          $      20.4          
                   Depreciation and amortization                                                           $      4.8                           $      5.0           
                   Interest incurred                                                                       $      38.1                          $      28.8          


                                                                                                                                                     
 D.R. HORTON, INC.                                                                                                                                   
 CONSOLIDATED STATEMENT OF CASH FLOWS                                                                                                                
 (UNAUDITED)                                                                                                                                         
                                                                                                                                                     
                                                                                                                                                     
                                                                                                                          Three Months Ended         
                                                                                                                          December 31, 2012          
                                                                                                                          (In millions)              
                                                                                                                                                     
                      Operating Activities                                                                                                           
                      Net income                                                                                          $        66.3              
                      Adjustments to reconcile net income to net cash used in operating activities:                                                  
                      Depreciation and amortization                                                                                4.8               
                      Amortization of discounts and fees                                                                           10.4              
                      Stock based compensation expense                                                                             3.5               
                      Deferred income taxes                                                                                        35.2              
                      Gain on sale of marketable securities                                                                        (0.2     )        
                      Inventory impairments and land option cost write-offs                                                        1.3               
                      Changes in operating assets and liabilities:                                                                                   
                      Increase in construction in progress and finished homes                                                      (226.8   )        
                      Increase in residential land and lots - developed, under development, and held for development                                 
                                                                                                                                   (612.8   )        
                      Decrease in other assets                                                                                     22.8              
                      Decrease in income taxes receivable                                                                          14.4              
                      Decrease in mortgage loans held for sale                                                                     37.4              
                      Decrease in accounts payable, accrued expenses and other liabilities                                         (12.8    )        
                      Net cash used in operating activities                                                                        (656.5   )        
                      Investing Activities                                                                                                           
                      Purchases of property and equipment                                                                          (14.0    )        
                      Purchases of marketable securities                                                                           (26.8    )        
                      Proceeds from the sale or maturity of marketable securities                                                  226.7             
                      Increase in restricted cash                                                                                  (5.5     )        
                      Net principal increase of other mortgage loans and real estate owned                                                           
                                                                                                                                   (0.2     )        
                      Purchases of debt securities collateralized by residential real estate                                       (18.6    )        
                      Payment related to acquisition of a business                                                                 (9.4     )        
                      Net cash provided by investing activities                                                                    152.2             
                      Financing Activities                                                                                                           
                      Proceeds from notes payable                                                                                  100.0             
                      Repayment of notes payable                                                                                   (18.4    )        
                      Proceeds from stock associated with certain employee benefit plans                                           2.1               
                      Cash dividends paid                                                                                          (60.2    )        
                      Net cash provided by financing activities                                                                    23.5              
                      Decrease in Cash and Cash Equivalents                                                                        (480.8   )        
                      Cash and cash equivalents at beginning of period                                                             1,047.7           
                      Cash and cash equivalents at end of period                                                          $        566.9             


                                                                                   
                       D.R. HORTON, INC.                                           
                       ($'s in millions)                                           
                                                                                   
                       NET SALES ORDERS                                            
                                                                                   
                       Three Months Ended December 31,                             
                       2012                              2011                      
                       Homes        Value                Homes        Value        
 East                  528          $     141.4          509          $     115.3  
 Midwest               275                89.9           213                59.1   
 Southeast             1,584              353.5          921                181.1  
 South Central         1,641              330.6          1,299              233.2  
 Southwest             247                53.2           249                46.9   
 West                  984                345.5          603                187.6  
                       5,259        $     1,314.1        3,794        $     823.2  
                                                                                   
                                                                                   
                       HOMES CLOSED                                                
                                                                                   
                       Three Months Ended December 31,                             
                       2012                              2011                      
                       Homes        Value                Homes        Value        
 East                  517          $     137.4          495          $     118.8  
 Midwest               287                89.4           213                57.7   
 Southeast             1,374              291.3          1,013              195.6  
 South Central         1,619              309.3          1,492              266.7  
 Southwest             383                76.0           279                54.0   
 West                  1,002              319.9          626                191.5  
                       5,182        $     1,223.3        4,118        $     884.3  
                                                                                   
                                                                                   
                       SALES ORDER BACKLOG                                         
                                                                                   
                       As of December 31,                                          
                       2012                              2011                      
                       Homes        Value                Homes        Value        
 East                  674          $     174.6          620          $     144.1  
 Midwest               413                127.9          288                81.9   
 Southeast             2,419              527.1          1,193              232.4  
 South Central         2,254              454.8          1,517              276.0  
 Southwest             563                112.1          396                69.5   
 West                  994                362.2          516                171.1  
                       7,317        $     1,758.7        4,530        $     975.0  


D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Vice President of Communications




Copyright Business Wire 2013

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