8-KMaterial AgreementsExhibits & Filings

HORTON D R INC /DE/ 8-K Report, Material Agreement (Jul 10, 2007)

Filed July 10, 2007For Securities:DHI

Summary

This Form 8-K filing by D.R. Horton, Inc. (DHI) on July 10, 2007, reports a material amendment to its unsecured Revolving Credit Agreement, effective July 6, 2007. The key change is the elimination of a restriction that previously limited the company's ability to pay dividends and make other distributions to shareholders to 50% of its most recent full fiscal year's consolidated net income. Under the amended agreement, D.R. Horton can now make dividends and distributions, provided there are no payment defaults, the company satisfies certain financial covenants, and these distributions do not cause a breach of those covenants. This amendment provides the company with greater flexibility in managing its shareholder distributions, which could be viewed positively by investors seeking returns, contingent on the company's ongoing financial health and adherence to its credit facility terms.

Key Highlights

  • 1D.R. Horton amended its unsecured Revolving Credit Agreement on July 6, 2007.
  • 2The Third Amendment to the Credit Facility was entered into with Wachovia Bank, National Association as Administrative Agent.
  • 3A significant restriction on dividend and distribution payments has been removed.
  • 4Previously, dividends were capped at 50% of the prior fiscal year's consolidated net income.
  • 5The amended agreement allows for dividends and distributions if no payment default exists.
  • 6Shareholder distributions are permitted provided financial covenants are met and will not be breached by the distribution.
  • 7This provides the company with increased flexibility for shareholder capital returns.

Frequently Asked Questions

The primary change is the removal of a restriction that limited D.R. Horton's ability to pay dividends and make other distributions to shareholders to 50% of its most recent full fiscal year's consolidated net income. The amended agreement allows for such distributions under certain conditions.

D.R. Horton must ensure there is no payment default on its obligations, satisfy specific financial covenants outlined in the agreement, and the dividend or distribution must not cause the company to be out of compliance with these financial covenants.

This amendment provides D.R. Horton with greater flexibility to return capital to shareholders through dividends and other distributions. This could be viewed as a positive signal for investors who prioritize shareholder returns, assuming the company's financial health remains strong.

Wachovia Bank, National Association is serving as the Administrative Agent for the Amended Credit Facility.