D.R. Horton(DHI) - 2022 Q3 - Quarterly Report

Acquisition and Purchase Price Allocation - The Company acquired Vidler Water Resources, Inc. for a total purchase price of $290.5 million, with a per-share price of $15.75[25] - The preliminary allocation of the purchase price includes $251.0 million in intangible and other assets, primarily consisting of water rights[26] - The Company expects to finalize the purchase price allocation for the Vidler acquisition during the fourth quarter of fiscal 2022[27] Financial Position and Assets - As of June 30, 2022, the Company reported total assets of $28.87 billion, with homebuilding assets amounting to $21.90 billion[43] - The Company has cash and cash equivalents of $1.66 billion, with $1.21 billion attributed to homebuilding operations[43] - The Company’s rental segment includes multi-family and single-family rental operations, with rental properties valued at $1.95 billion[43] Revenue and Profitability - Home sales revenue for the nine months ended June 30, 2022, was $22,492.0 million, with total consolidated revenues reaching $23,840.6 million[53] - The cost of home sales for the same period was $15,996.0 million, resulting in a gross profit of $6,496.0 million[53] - The company reported income before income taxes of $5,563.9 million for the nine months ended June 30, 2022[53] Cash Flow and Liabilities - Cash provided by operating activities was $(562.8) million, indicating a cash outflow during this period[53] - The total liabilities as of September 30, 2021, were $8,799.7 million, with accounts payable at $1,177.0 million[47] - The company held inventories of $16,479.1 million, including construction in progress and finished homes valued at $7,739.2 million[47] Homebuilding Operations - The Company’s homebuilding segment generated significant revenues from the sale of completed homes, with inventories of $10.80 billion in construction in progress and finished homes[43] - The company reported a significant increase in homebuilding inventories, totaling $17,936.9 million as of June 30, 2022, compared to $13,907.8 million as of September 30, 2021[62] - Home sales revenue for the three months ended June 30, 2021, was $7,040.1 million, while for the nine months ended June 30, 2021, it was $18,909.2 million, reflecting a strong performance in homebuilding[56] Financial Services Segment - The financial services segment reported mortgage loans held for sale totaling $2.08 billion[43] - The financial services segment generated revenue of $660.8 million for the nine months ended June 30, 2022[53] - Gains on sales of loans and servicing rights were $195.3 million for the three months ended June 30, 2022, up from $135.4 million in the prior year, a 44.3% increase[91] Shareholder Value and Stock Performance - The Company had a net income attributable to D.R. Horton, Inc. of $1.6 billion for the nine months ended June 30, 2022, compared to $2.8 billion in the prior year, reflecting a decrease of 42.9%[97] - The Company repurchased 10.5 million shares for $854.2 million during the nine months ended June 30, 2022, with $690.0 million remaining on the repurchase authorization[98] - The return on equity (ROE) for the trailing twelve months ended June 30, 2022, was 35.1%, up from 29.5% in the prior year period[134] Market Conditions and Demand - The company experienced a moderation in housing demand in June 2022 due to rising mortgage interest rates and inflationary pressures[135] - The company noted strong demand for homes during the first half of fiscal 2022, but began to see a moderation in demand in June 2022 due to economic pressures[166] - The cancellation rate for sales orders was 24% in the three months ended June 30, 2022, up from 17% in the prior year, reflecting a moderation in demand due to rising mortgage interest rates[169] Inventory Management - The company actively manages its land and lot inventory to align with market demand, ensuring efficient development and construction[200] - As of June 30, 2022, the total land/lots owned and controlled by the company was 598,200, an increase from 530,300 as of September 30, 2021, representing a growth of approximately 12.8%[206][207] - The total remaining purchase price of lots controlled through land and lot purchase contracts was $20.2 billion as of June 30, 2022, up from $15.5 billion as of September 30, 2021, indicating a 30.3% increase[208] Operational Costs and Expenses - Selling, general, and administrative expenses amounted to $2,101.6 million for the nine months ended June 30, 2022[53] - Selling, general and administrative (SG&A) expenses increased 10% to $553.2 million for the three months ended June 30, 2022, with SG&A as a percentage of homebuilding revenues at 6.6%[185] - Employee compensation and related costs were $445.7 million for the three months ended June 30, 2022, representing 81% of SG&A costs[186]