10-KPeriod: FY2020

HORTON D R INC /DE/ Annual Report, Year Ended Sep 30, 2020

Filed November 20, 2020For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported a strong fiscal year performance, concluding on September 30, 2020. As the largest homebuilder in the U.S., the company saw a significant increase in revenues, up 15% to $20.3 billion, driven by a 15% rise in homes closed to 65,388. This growth was particularly robust in the latter half of the fiscal year, recovering from initial COVID-19 impacts. The company's strategic focus on entry-level homes and its diversified geographic presence across 29 states contributed to its resilience. DHI also demonstrated improved profitability, with pre-tax income rising 40% to $3.0 billion and a notable increase in home sales gross margin to 21.8%. The company's financial services segment also performed well, with revenues up 32% and pre-tax income up 47%, indicating the integrated strength of its business model. DHI ended the fiscal year with a strong cash position and a healthy backlog, positioning it well for continued growth.

Financial Highlights

39 data points
Beta

Revenue

$20.31B

24.3% Gross Margin

Net Income

$2.38B

11.7% Net Margin

EPS (Diluted)

$6.41

Total Assets

$18.91B

Cash & Equivalents

$3.04B

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$20.31B
Cost of Revenue$15.37B
Gross Profit$4.94B
SG&A Expenses$2.05B
Net Income$2.38B
EPS (Basic)$6.49
EPS (Diluted)$6.41
Shares Outstanding (Basic)365.50M
Shares Outstanding (Diluted)370.20M

Key Highlights

  • 1Record revenues of $20.3 billion, a 15% increase year-over-year.
  • 2Homes closed increased by 15% to 65,388, with an average closing price of $299,100.
  • 3Home sales gross margin improved to 21.8% from 20.2% in the prior year.
  • 4Net sales orders surged by 39% in volume, and backlog increased by 98% in value, indicating strong future demand.
  • 5Financial services segment showed robust growth with revenues up 32% and pre-tax income up 47%.
  • 6Return on equity (ROE) improved to 22.1% from 17.2% in the prior year.
  • 7Company maintained a strong liquidity position with $3.0 billion in cash, cash equivalents, and restricted cash at year-end.

Frequently Asked Questions

D.R. Horton reported consolidated revenues of $20.3 billion, a 15% increase from the prior year. Pre-tax income grew by 40% to $3.0 billion, and net income attributable to D.R. Horton was $2.37 billion. The homebuilding segment, in particular, saw strong performance with revenues up 15% and home sales gross margin improving to 21.8%.

While the pandemic initially caused increased cancellations and decreased sales orders in early fiscal 2020, residential construction and financial services were largely deemed essential, allowing operations to continue. The company implemented safety protocols, and demand rebounded strongly in the latter half of the year, driven by low interest rates and limited housing supply. Management remains cautious about ongoing economic impacts.

D.R. Horton focuses on controlling its inventory investments to match expected housing demand in its markets. A key part of this strategy is increasing the proportion of lots controlled through purchase contracts, which was 70% of its owned and controlled lots at September 30, 2020. This strategy is supported by its relationship with Forestar Group Inc. and expanded partnerships with land developers.

The financial services segment, primarily DHI Mortgage, experienced significant growth. Revenues increased by 32% to $584.9 million, and pre-tax income rose by 47% to $245.2 million. This performance was driven by a 35% increase in the number of loans originated, with DHI Mortgage financing 68% of the company's total homes closed.