Workflow
D.R. Horton(DHI) - 2021 Q1 - Quarterly Report
DHID.R. Horton(DHI)2021-01-26 16:00

Sales Performance - Net sales orders increased by 56% in volume and 62% in value for the three months ended December 31, 2020, compared to the prior year period[121] - Home sales revenues increased by 48% to 5.9billionforthethreemonthsendedDecember31,2020,comparedto5.9 billion for the three months ended December 31, 2020, compared to 4.0 billion in the prior year period[121] - Net sales orders increased 56% to 20,418 homes, and the value of net sales orders increased 62% to 6.4billion[133]−Salesorderbacklogincreased1076.4 billion[133] - Sales order backlog increased 107% to 28,487 homes, and the value of sales order backlog increased 111% to 8.9 billion[133] - Net sales orders increased 56% to 20,418 homes, with a value increase of 62% to 6.4billioninQ42020comparedtotheprioryearperiod[145]−Theaveragesellingpriceofnetsalesordersrose46.4 billion in Q4 2020 compared to the prior year period[145] - The average selling price of net sales orders rose 4% to 314,200 in Q4 2020[145] - Sales order cancellation rate decreased to 18% in Q4 2020 from 20% in the prior year period[146] - Home sales revenue increased 48% to 5.7billion(18,739homesclosed)inQ42020comparedto5.7 billion (18,739 homes closed) in Q4 2020 compared to 3.9 billion (12,959 homes closed) in the prior year period[150] Financial Performance - Pre-tax income rose to 1.0billionwithapre−taxoperatingmarginof17.41.0 billion with a pre-tax operating margin of 17.4% for the three months ended December 31, 2020, compared to 523.3 million and 13.0% in the prior year period[121] - Net income was 795.2millionforthethreemonthsendedDecember31,2020,comparedto795.2 million for the three months ended December 31, 2020, compared to 432.5 million in the prior year period[121] - Return on equity (ROE) was 24.4% and homebuilding return on inventory (ROI) was 28.0% for the trailing twelve months ended December 31, 2020, compared to 18.2% and 18.7% respectively in the prior year period[122] - Homebuilding revenues increased 47% to 5.7billioncomparedto5.7 billion compared to 3.9 billion[133] - Homebuilding pre-tax income increased to 935.2million,representing16.4935.2 million, representing 16.4% of homebuilding revenues compared to 11.9%[133] - Consolidated pre-tax income increased 98% to 1.0 billion, representing 17.4% of consolidated revenues[138] - Net income attributable to D.R. Horton increased 84% to 791.8million,withdilutednetincomepercommonshareincreasing84791.8 million, with diluted net income per common share increasing 84% to 2.14[138] - Gross profit from home sales increased to 1.4billion,representing24.11.4 billion, representing 24.1% of home sales revenues, up 310 basis points from the prior year period[153] - Pre-tax income for the three months ended December 31, 2020 was 1.0 billion, up from 523.3millionintheprioryearperiod,primarilyduetohigherhomebuildingrevenues[202]−IncometaxexpenseforQ42020was523.3 million in the prior year period, primarily due to higher homebuilding revenues[202] - Income tax expense for Q4 2020 was 239.1 million, with an effective tax rate of 23.1%, compared to 90.8millionand17.490.8 million and 17.4% in Q4 2019[203] - Revenues for Q4 2020 were 5.71 billion, with net income of 713.0million[236]−RevenuesforthethreemonthsendedDecember31,2020,were713.0 million[236] - Revenues for the three months ended December 31, 2020, were 5,714.2 million, with net income of 713.0million[236]RegionalPerformance−EastRegionhomebuildingrevenuesincreasedby55713.0 million[236] Regional Performance - East Region homebuilding revenues increased by 55% to 809.2 million in Q4 2020, with pre-tax income rising to 132.5million(16.4132.5 million (16.4% of revenues) compared to 59.9 million (11.5% of revenues) in Q4 2019[168] - Midwest Region homebuilding revenues grew by 46% to 413.1millioninQ42020,withpre−taxincomeincreasingto413.1 million in Q4 2020, with pre-tax income increasing to 49.2 million (11.9% of revenues) from 18.6million(6.618.6 million (6.6% of revenues) in Q4 2019[169] - Southeast Region homebuilding revenues rose by 55% to 1,778.4 million in Q4 2020, with pre-tax income reaching 305.8million(17.2305.8 million (17.2% of revenues) compared to 146.3 million (12.7% of revenues) in Q4 2019[170] - South Central Region homebuilding revenues increased by 54% to 1,474.9millioninQ42020,withpre−taxincomeclimbingto1,474.9 million in Q4 2020, with pre-tax income climbing to 264.7 million (17.9% of revenues) from 132.6million(13.8132.6 million (13.8% of revenues) in Q4 2019[172] - Southwest Region homebuilding revenues grew by 10% to 232.6 million in Q4 2020, with pre-tax income rising to 38.6million(16.638.6 million (16.6% of revenues) compared to 34.5 million (16.4% of revenues) in Q4 2019[173] - West Region homebuilding revenues increased by 33% to 1,010.4millioninQ42020,withpre−taxincomereaching1,010.4 million in Q4 2020, with pre-tax income reaching 144.4 million (14.3% of revenues) compared to 69.7million(9.269.7 million (9.2% of revenues) in Q4 2019[174] - Total homebuilding revenues across all regions increased by 47% to 5,718.6 million in Q4 2020, with pre-tax income rising to 935.2million(16.4935.2 million (16.4% of revenues) from 461.6 million (11.9% of revenues) in Q4 2019[166] Inventory and Land Management - Lots controlled under purchase contracts represented 72% of the total lots owned and controlled at December 31, 2020, up from 70% at September 30, 2020 and 61% at December 31, 2019[123] - The company completed its first sale of a single-family rental community, representing 124 homes for 31.8million,resultinginagainonsaleof31.8 million, resulting in a gain on sale of 14.0 million during the three months ended December 31, 2020[116] - Homebuilding fixed assets included 106.6millionrelatedtothesingle−familyrentalplatform,representing13communitiestotaling890single−familyrentalhomesandfinishedlotsatDecember31,2020[116]−Multi−familyrentalassetswere106.6 million related to the single-family rental platform, representing 13 communities totaling 890 single-family rental homes and finished lots at December 31, 2020[116] - Multi-family rental assets were 294.3 million at December 31, 2020, up from 246.2millionatSeptember30,2020[119]−Totalassetsrelatedtootherbusinessactivitieswere246.2 million at September 30, 2020[119] - Total assets related to other business activities were 438.7 million at December 31, 2020, compared to 379.4millionatSeptember30,2020[119]−ThecompanyacquiredBraseltonHomesfor379.4 million at September 30, 2020[119] - The company acquired Braselton Homes for 23.0 million, gaining 90 homes in inventory, 95 lots, and control of approximately 840 additional lots[164] - Land/lot sales and other revenues were 19.9millioninQ42020,with19.9 million in Q4 2020, with 23.8 million of land held for sale expected to be sold in the next twelve months[155] - Inventory and land option charges included impairment charges of 5.6millioninQ42020,withnoimpairmentchargesrecordedintheprioryearperiod[156]−Thecompanysoldasingle−familyrentalcommunityfor5.6 million in Q4 2020, with no impairment charges recorded in the prior year period[156] - The company sold a single-family rental community for 31.8 million, resulting in a gain on sale of 13.1millioninthehomebuildingsegment[162]−Totalinventoryacrossallregionsincreasedto13.1 million in the homebuilding segment[162] - Total inventory across all regions increased to 12,138.5 million as of December 31, 2020, up from 11,015.0millionasofSeptember30,2020[178][179]−Totalland/lotsownedandcontrolledacrossallregionsincreasedto440,700asofDecember31,2020,upfrom376,900asofSeptember30,2020[181][182]−Homesininventoryacrossallregionsincreasedto42,100asofDecember31,2020,upfrom38,000asofSeptember30,2020[181][182]−Totalremainingpurchasepriceoflotscontrolledthroughlandandlotpurchasecontractswas11,015.0 million as of September 30, 2020[178][179] - Total land/lots owned and controlled across all regions increased to 440,700 as of December 31, 2020, up from 376,900 as of September 30, 2020[181][182] - Homes in inventory across all regions increased to 42,100 as of December 31, 2020, up from 38,000 as of September 30, 2020[181][182] - Total remaining purchase price of lots controlled through land and lot purchase contracts was 11.9 billion at December 31, 2020, up from 9.9billionatSeptember30,2020[183]−Approximately34,900lotswereownedorcontrolledbyForestaratDecember31,2020,with18,300undercontracttopurchaseand16,600witharightoffirstoffer[184]−Approximately16,300homesininventorywereunsoldatDecember31,2020,with1,600completedand200completedformorethansixmonths[185]−Forestar′sresidentiallandandlotsalesrevenuewas9.9 billion at September 30, 2020[183] - Approximately 34,900 lots were owned or controlled by Forestar at December 31, 2020, with 18,300 under contract to purchase and 16,600 with a right of first offer[184] - Approximately 16,300 homes in inventory were unsold at December 31, 2020, with 1,600 completed and 200 completed for more than six months[185] - Forestar's residential land and lot sales revenue was 307.1 million for the three months ended December 31, 2020, up from 247.2millionintheprioryearperiod[187]−LandandlotpurchasecontractsatDecember31,2020included247.2 million in the prior year period[187] - Land and lot purchase contracts at December 31, 2020 included 73.5 million subject to specific performance provisions, with 41.5millionrelatedtocontractsbetweenthehomebuildingsegmentandForestar[234]−LandandlotpurchasecontractsatDecember31,2020,included41.5 million related to contracts between the homebuilding segment and Forestar[234] - Land and lot purchase contracts at December 31, 2020, included 73.5 million of remaining purchase price subject to specific performance provisions[234] Financial Services - Financial services revenues increased 82% to 187.2million,withpre−taxincomeincreasing176187.2 million, with pre-tax income increasing 176% to 84.1 million[137] - DHI Mortgage originated or brokered 12,722 first-lien loans for D.R. Horton homebuyers in the three months ended December 31, 2020, a 51% increase from the prior year period[191] - Financial services pre-tax income increased 176% to 84.1millioninthethreemonthsendedDecember31,2020,drivenbyhighermortgageandtitleoperationsrevenues[191]−ThenumberofloanssoldbyDHIMortgageincreased5484.1 million in the three months ended December 31, 2020, driven by higher mortgage and title operations revenues[191] - The number of loans sold by DHI Mortgage increased 54% to 13,458 in the three months ended December 31, 2020 compared to the prior year period[195] Cash Flow and Financing - Net cash used in operating activities was 252.1 million in Q4 2020, compared to 113.8millioninQ42019[225]−Cashusedtoincreaseconstructioninprogressandfinishedhomeinventorywas113.8 million in Q4 2019[225] - Cash used to increase construction in progress and finished home inventory was 591.2 million in Q4 2020, up from 334.8millioninQ42019[226]−Cashusedtoincreaseresidentiallandandlotswas334.8 million in Q4 2019[226] - Cash used to increase residential land and lots was 716.8 million in Q4 2020, compared to 373.1millioninQ42019[226]−Netcashusedininvestingactivitieswas373.1 million in Q4 2019[226] - Net cash used in investing activities was 91.4 million in Q4 2020, compared to 17.8millioninQ42019[227]−NetcashusedinfinancingactivitiesforQ42020was17.8 million in Q4 2019[227] - Net cash used in financing activities for Q4 2020 was 221.7 million, primarily due to repayment of 400millioninseniornotes,400 million in senior notes, 163.5 million in mortgage repurchase facility payments, 72.9millionincashdividends,and72.9 million in cash dividends, and 53.8 million in share repurchases, partially offset by 500millioninnewseniornotesissuance[228]−NetcashprovidedbyfinancingactivitiesforQ42019was500 million in new senior notes issuance[228] - Net cash provided by financing activities for Q4 2019 was 213.5 million, driven by 500millioninseniornotesissuance,partiallyoffsetby500 million in senior notes issuance, partially offset by 163.1 million in share repurchases, 64.6millionincashdividends,and64.6 million in cash dividends, and 38.6 million in mortgage repurchase facility payments[229] - Quarterly cash dividends increased to 0.20percommonshareinQ42020andQ12021,upfrom0.20 per common share in Q4 2020 and Q1 2021, up from 0.175 per share in fiscal 2020[230] - Homebuilding cash and cash equivalents totaled 2.1billionatDecember31,2020[211]−Forestarhadcashandcashequivalentsof2.1 billion at December 31, 2020[211] - Forestar had cash and cash equivalents of 237.4 million at December 31, 2020[217] - Financial services operations had cash and cash equivalents of 65.3millionatDecember31,2020[221]DebtandLiabilities−Debttototalcapitalratiodecreasedto25.365.3 million at December 31, 2020[221] Debt and Liabilities - Debt to total capital ratio decreased to 25.3% at December 31, 2020, from 26.6% at September 30, 2020 and 27.0% at December 31, 2019[209] - Outstanding homebuilding senior notes totaled 2.55 billion as of December 31, 2020[237] - The company had 192.1millioninoutstandinglettersofcreditand192.1 million in outstanding letters of credit and 1.9 billion in surety bonds as of December 31, 2020[233] - D.R. Horton, Inc. had outstanding 2.55billionprincipalamountofhomebuildingseniornotesasofDecember31,2020[237]−Fixed−ratedebtobligationsasofDecember31,2020,totaled2.55 billion principal amount of homebuilding senior notes as of December 31, 2020[237] - Fixed-rate debt obligations as of December 31, 2020, totaled 3,281.2 million, with an average interest rate of 4.2%[253] - Variable-rate debt obligations as of December 31, 2020, totaled 969.1million,withanaverageinterestrateof2.4969.1 million, with an average interest rate of 2.4%[253] - Fixed rate debt totaled 3,281.2 million with an average interest rate of 4.2% at December 31, 2020[253] - Variable rate debt totaled 969.1millionwithanaverageinterestrateof2.4969.1 million with an average interest rate of 2.4% at December 31, 2020[253] Assets and Reserves - Total assets as of December 31, 2020 were 16.37 billion, including 2.04billionincashand2.04 billion in cash and 12.04 billion in inventories[240] - Cash and inventories for D.R. Horton, Inc. and Guarantor Subsidiaries totaled 2,044.8millionand2,044.8 million and 12,044.0 million, respectively, at December 31, 2020[240] - Total assets for D.R. Horton, Inc. and Guarantor Subsidiaries were 16,374.6millionatDecember31,2020[240]−Reservesforconstructiondefectclaimsincreasedto270pendingclaimsatDecember31,2020,upfrom260atSeptember30,2020[246]−Thecompanyestablishedreservesfor30newconstructiondefectclaimsandresolved20claimsatatotalcostof16,374.6 million at December 31, 2020[240] - Reserves for construction defect claims increased to 270 pending claims at December 31, 2020, up from 260 at September 30, 2020[246] - The company established reserves for 30 new construction defect claims and resolved 20 claims at a total cost of 2.3 million during the three months ended December 31, 2020[246] - Reserves for construction defect claims increased to approximately 270 pending claims at December 31, 2020, up from 260 at September 30, 2020[246] Hedging and Risk Management - The company's hedging instruments for uncommitted mortgage loans and IRLCs totaled a notional amount of 2.4billionatDecember31,2020,withuncommittedIRLCsat2.4 billion at December 31, 2020, with uncommitted IRLCs at 1.5 billion and uncommitted mortgage loans held for sale at 966.5million[251]−ThecompanyhadMBStotaling966.5 million[251] - The company had MBS totaling 1.4 billion at December 31, 2020, with a liability of 7.5millionforthefairvalueofsuchMBSposition[252]−HedginginstrumentsusedtomitigateinterestrateriskrelatedtouncommittedmortgageloansandIRLCstotaledanotionalamountof7.5 million for the fair value of such MBS position[252] - Hedging instruments used to mitigate interest rate risk related to uncommitted mortgage loans and IRLCs totaled a notional amount of 2.4 billion at December 31, 2020[251] - Uncommitted IRLCs totaled a notional amount of approximately 1.5billionatDecember31,2020[251]−Uncommittedmortgageloansheldforsaletotaledanotionalamountofapproximately1.5 billion at December 31, 2020[251] - Uncommitted mortgage loans held for sale totaled a notional amount of approximately 966.5 million at December 31, 2020[251] - The company had MBS totaling 1.4billionatDecember31,2020,upfrom1.4 billion at December 31, 2020, up from 1.1 billion at September 30, 2020[252] - The company recorded a liability of 7.5millionforthefairvalueofMBSpositionsatDecember31,2020[252]EnvironmentalandLegalProceedings−Thecompanydisclosedthatitwillreportenvironmentalproceedingsifmonetarysanctionsareexpectedtoexceed7.5 million for the fair value of MBS positions at December 31, 2020[252] Environmental and Legal Proceedings - The company disclosed that it will report environmental proceedings if monetary sanctions are expected to exceed 1 million[259]