10-KPeriod: FY2013

HORTON D R INC /DE/ Annual Report, Year Ended Sep 30, 2013

Filed November 26, 2013For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported a significant improvement in its financial performance for the fiscal year ended September 30, 2013. The company experienced a substantial increase in homebuilding revenues, driven by higher sales volumes and average selling prices, reflecting a recovering housing market. This growth translated into a strong increase in homebuilding pre-tax income, nearly tripling from the prior year. The financial services segment also contributed positively to overall profitability. Looking ahead, DHI is strategically positioned to capitalize on continued housing market recovery. The company has increased its investments in land and inventory to meet rising demand and has maintained a strong balance sheet and liquidity. While acknowledging potential headwinds such as rising interest rates and economic uncertainties, DHI remains optimistic about its ability to grow profitability and maintain financial strength.

Financial Highlights

36 data points
Beta

Revenue

$6.26B

Net Income

$462.70M

7.4% Net Margin

EPS (Diluted)

$1.33

Total Assets

$8.86B

Cash & Equivalents

$977.40M

Free Cash Flow

-$1.29B

Financial Statements
Beta
Revenue$6.26B
Interest Expense$7.10M
Net Income$462.70M
EPS (Basic)$1.44
EPS (Diluted)$1.33
Shares Outstanding (Basic)322.10M
Shares Outstanding (Diluted)364.90M

Key Highlights

  • 1Homebuilding revenues surged by 44% to $6.1 billion, with 24,155 homes closed, a 28% increase year-over-year.
  • 2Average closing price for homes increased by 12% to $249,400, reflecting improved market conditions and pricing power.
  • 3Home sales gross margins expanded by 310 basis points to 20.8%, driven by reduced sales incentives and higher pricing.
  • 4Homebuilding SG&A expenses decreased as a percentage of revenue to 10.7% from 12.5%, indicating operational efficiency.
  • 5Consolidated pre-tax income reached $657.8 million, a significant increase from $242.9 million in the prior year.
  • 6The company's sales order backlog grew by 33% in value to $2.2 billion, signaling strong future demand.
  • 7DHI Mortgage supported 56% of home closings, demonstrating the synergy between its homebuilding and financial services segments.

Frequently Asked Questions

D.R. Horton demonstrated significant financial improvement in fiscal year 2013 compared to 2012. Homebuilding revenues increased by 44% to $6.1 billion, driven by a 28% rise in homes closed and a 12% increase in the average selling price. Gross margins improved, and SG&A expenses as a percentage of revenue decreased, leading to a substantial increase in homebuilding pre-tax income from $203.7 million to $592.3 million. Overall, consolidated pre-tax income nearly tripled.

The improved performance is primarily attributed to strengthening housing market conditions in most of DHI's markets, characterized by increased demand and more limited home supply. This favorable environment allowed the company to raise sales prices and reduce incentives, leading to higher average selling prices and improved gross margins. Strategic inventory investments and effective cost controls also contributed to the positive results.

D.R. Horton views its business as well-positioned for profitable growth in the ongoing housing recovery, supported by a strong balance sheet and liquidity. They anticipate continued growth, though at a moderated pace compared to the second half of fiscal 2013, citing factors like increased mortgage interest rates and home prices. Key risks identified include potential deterioration in economic and homebuilding industry conditions, constriction of credit markets, rising interest rates, and challenges in acquiring land, materials, and skilled labor.

D.R. Horton's financial services segment, primarily DHI Mortgage and its title agencies, complements the homebuilding operations by providing mortgage financing and title services to homebuyers. In fiscal 2013, this segment generated $173.4 million in revenues and $65.5 million in pre-tax income. DHI Mortgage facilitated financing for 56% of the company's home closings, highlighting its role in supporting sales volume and potentially enhancing customer experience.