D.R. Horton(DHI) - 2024 Q4 - Annual Report

Financial Performance - Consolidated revenues increased 4% to $36.8 billion compared to$ 35.5 billion in the prior year[215] - Net income attributable to D.R. Horton was $4.8 billion compared to$ 4.7 billion in the prior year[219] - The company reported net cash provided by operating activities of $2.2 billion in fiscal 2024, down from$ 4.3 billion in fiscal 2023[350] - D.R. Horton, Inc. reported total revenues of $33,756.1 million for the year ended September 30, 2024, with a net income of$ 4,148.9 million[366] - The company's total assets amounted to $28,865.7 million, with cash reserves of$ 3,542.4 million and inventories valued at $20,152.9 million as of September 30, 2024[366] - Total liabilities were reported at$ 6,455.0 million, with notes payable constituting $2,926.8 million[366] Homebuilding Operations - Homebuilding revenues increased 7% to$ 34.0 billion compared to $31.7 billion[225] - Homes closed increased 8% to 89,690 homes, while the average closing price decreased 1% to$ 378,000[225] - Net sales orders increased 10% to 86,561 homes, with the value of net sales orders increasing 11% to $32.7 billion[225] - Home sales revenue rose by 7% to$ 33.9 billion (89,690 homes closed) in 2024, up from $31.6 billion (82,917 homes closed) in 2023[254] - The average selling price of net sales orders in 2024 was$ 377,900, a slight decrease of 1% from the previous year[246] - The sales order cancellation rate improved to 18% in 2024 from 20% in 2023[249] Regional Performance - Homebuilding revenues in the Northwest region increased by 7% to $2,761.7 million in fiscal 2024, with pre-tax income rising to$ 420.8 million[272] - Homebuilding revenues in the Southwest region increased by 15% to $4,914.7 million in fiscal 2024, with pre-tax income rising to$ 703.5 million[273] - Homebuilding revenues in the Southeast region increased by 1% to $8,876.8 million in fiscal 2024, with pre-tax income decreasing to$ 1.4 billion[275] - Homebuilding revenues in the East region increased by 14% to $6,073.1 million in fiscal 2024, with pre-tax income rising to$ 1.1 billion[277] - Homebuilding revenues in the North region increased by 16% to $3,683.4 million in fiscal 2024, with pre-tax income rising to$ 498.4 million[278] Inventory and Land Management - Total homebuilding inventories amounted to $20,031.0 million as of September 30, 2024, with significant holdings in various regions[281] - The company plans to manage its inventory of owned land and lots relative to demand, actively controlling the number of unsold homes in inventory[281] - As of September 30, 2024, the total land/lots owned and controlled amounted to 632,900, with homes in inventory totaling 37,400[285] - The total remaining purchase price of lots controlled through land and lot purchase contracts was$ 25.2 billion as of September 30, 2024, compared to $21.1 billion in 2023[285] Financial Services - Financial services revenues increased 10% to$ 882.5 million compared to $801.5 million[238] - DHI Mortgage originated 70,308 first-lien loans in 2024, a 12% increase from 62,699 in 2023[300] - Total mortgage operations revenues increased by 11% to$ 681.6 million in 2024 from $616.3 million in 2023[306] - Pre-tax income from financial services increased to$ 311.2 million in 2024, up from $283.3 million in 2023, reflecting a growth of 9.9%[300] Expenses and Profitability - Selling, general and administrative (SG&A) expenses increased by 14% to$ 2.6 billion in 2024, representing 7.5% of homebuilding revenues[263] - Employee compensation and related costs were $2.1 billion in fiscal 2024, representing 82% of SG&A costs, with a 10% increase from the prior year[264] - Interest incurred by homebuilding operations decreased by 27% to$ 50.5 million in fiscal 2024, primarily due to an 11% decrease in average homebuilding debt[266] - Gross profit from home sales increased to $8.0 billion in 2024, maintaining a gross profit margin of 23.5%[257] Rental Operations - Rental revenues decreased to$ 1.7 billion compared to $2.6 billion[227] - The number of single-family homes closed decreased by 36% to 3,970 in 2024, while multi-family homes closed increased by 4% to 2,202[288] - The inventory of single-family rental homes decreased to 3,140 in 2024 from 5,630 in 2023, a decline of about 44%[291] - The rental operating margin for the rental segment decreased to 13.6% in 2024 from 20.1% in 2023[288] Claims and Insurance - The company maintains a loss reserve for mortgage loans based on historical experience and current market conditions[378] - As of September 30, 2024, the company had reserves for approximately 825 pending construction defect claims, up from 600 claims in 2023[391] - During fiscal 2024, the company was notified of approximately 600 new construction defect claims and resolved 375 claims at a total cost of$ 55.0 million[391] - Approximately 97% of the reserves established by the company relate to construction defect matters as of September 30, 2024, and 2023[390] Market Conditions and Risks - The company anticipates that seasonal patterns will continue to affect home closings and revenues, particularly in the third and fourth quarters of the fiscal year[368] - D.R. Horton, Inc. faces risks related to the cyclical nature of the homebuilding industry, including changes in economic conditions and mortgage financing availability[370] Accounting and Reporting - The Financial Accounting Standards Board (FASB) issued ASU 2023-07, effective for fiscal 2025, which will improve reportable segment disclosures for the company[396] - The company is evaluating the impact of new accounting standards on its consolidated financial statements and related disclosures[397]