10-QPeriod: Q3 FY2015

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2015

Filed July 28, 2015For Securities:DHI

Summary

D.R. Horton, Inc. reported strong financial performance for the third quarter of fiscal year 2015, with significant year-over-year increases in homebuilding revenues, net sales orders, and homes closed. This growth was driven by broad-based demand across its 27 states of operation and strategic acquisitions. The company's financial services segment also showed robust growth. Profitability improved substantially, with homebuilding pre-tax income rising 90% and consolidated pre-tax income increasing by 94%. This improved profitability, coupled with effective cost management and operational efficiencies, highlights the company's successful strategy in a recovering housing market. D.R. Horton maintained a strong balance sheet and liquidity position, demonstrating its financial resilience.

Financial Highlights

31 data points
Beta

Revenue

$2.95B

Net Income

$221.40M

7.5% Net Margin

EPS (Diluted)

$0.60

Total Assets

$10.86B

Cash & Equivalents

$805.60M

Free Cash Flow

$338.10M

Financial Statements
Beta
Revenue$2.95B
Net Income$221.40M
EPS (Basic)$0.60
EPS (Diluted)$0.60
Shares Outstanding (Basic)366.80M
Shares Outstanding (Diluted)370.30M

Key Highlights

  • 1Homebuilding revenues increased by 37% to $2.9 billion in Q3 FY15 compared to Q3 FY14.
  • 2Net sales orders rose 22% in volume and 25% in value, indicating strong demand.
  • 3Homes closed increased by 28% to 9,856 homes, reflecting improved operational execution.
  • 4Homebuilding pre-tax income more than doubled, increasing 90% to $302.1 million.
  • 5Financial services revenues surged by 69% to $74.4 million, with pre-tax income up 140%.
  • 6Diluted earnings per share increased significantly by 88% to $0.60.
  • 7The company maintained a healthy cash position of $766.7 million for its homebuilding operations.

Frequently Asked Questions

The primary driver of D.R. Horton's revenue growth was a significant increase in home closings, up 28% year-over-year, coupled with a 7% increase in the average selling price of homes. This was supported by a 22% increase in net sales orders, indicating robust demand across its diverse geographic markets.

D.R. Horton's inventory increased to $8.1 billion, with a focus on homes in progress and finished homes. The company managed its land and lot position, controlling 173,600 lots as of June 30, 2015, with an increasing emphasis on finished lots ready for construction and utilizing option purchase contracts to mitigate land ownership risks.

The company reported a strong liquidity position with $766.7 million in homebuilding cash and cash equivalents. Its debt-to-capital ratios remained healthy, with a net homebuilding debt to total capital of 31.6%. D.R. Horton also has substantial availability under its revolving credit facility, indicating a solid financial foundation.

The report mentions potential risks such as market demand fluctuations tied to local economies, interest rate changes, credit market conditions, and the cyclical nature of the homebuilding industry. The company also faces risks related to home warranty and construction defect claims, supply shortages, and compliance with governmental regulations.