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3Q1 FY2016
This presentation may include “forward-looking statements” as defined by the Private Securities LitigationReform Act of 1995. Although D.R. Horton believes any such statements are based on reasonableassumptions, there is no assurance that actual outcomes will not be materially different. Factors that maycause the actual results to be materially different from the future results expressed by the forward-lookingstatements include, but are not limited to: the cyclical nature of the homebuilding industry and changes ineconomic, real estate and other conditions; constriction of the credit markets, which could limit our abilityto access capital and increase our costs of capital; reductions in the availability of mortgage financing andthe liquidity provided by government-sponsored enterprises, the effects of government programs, adecrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates;the risks associated with our land and lot inventory; home warranty and construction defect claims; supplyshortages and other risks of acquiring land, building materials and skilled labor; reductions in theavailability of performance bonds; increases in the costs of owning a home; the impact of an inflationary,deflationary or higher interest rate environment; the effects of governmental regulations and environmentalmatters on our homebuilding operations; the effects of governmental regulations on our financial servicesoperations; our substantial debt and our ability to comply with related debt covenants, restrictions andlimitations; competitive conditions within the homebuilding and financial services industries; our ability toeffect our growth strategies or acquisitions successfully; the effects of the loss of key personnel; the effectsof negative publicity; and information technology failures and data security breaches. Additionalinformation about issues that could lead to material changes in performance is contained in D.R. Horton’sannual report on Form 10-K and our most recent quarterly report on Form 10-Q, both of which are filedwith the Securities and Exchange Commission.
Forward-Looking Statements
4Q1 FY2016
Traded on NYSE as DHI
#1 builder for 14 consecutive years1
$10.9 billion in annual revenues2
36,736 in annual homes closed2
$1.1 billion in annual pre-tax income2
$11.2 billion of total assets3
$6.1 billion of stockholders’ equity3
Book value per share of $16.393
1By closings volume for fiscal years 2002 to 20152Twelve months ended December 31, 20153As of December 31, 2015
D.R. Horton, Inc.
5Q1 FY2016
Geographic DiversificationHB Revenue1
Region States Covered
East Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia
Midwest Colorado, Illinois, Indiana, Minnesota
Southeast Alabama, Florida, Georgia, Mississippi, Tennessee
South Central Louisiana, Oklahoma, Texas
Southwest Arizona, New Mexico
West California, Hawaii, Nevada, Oregon, Utah, Washington
Inventory2
South Central
26%
Southwest3%
West24%
East13%
Midwest6%
Southeast28%
Midwest6%
South Central
26%
Southeast25%
East10%
West29%
Southwest4%
79 Markets | 27 States
1Twelve months ended December 31, 20152As of December 31, 2015
6Q1 FY2016
$200k to $250k
$250k to $300k
$300k to $500k
27%
24% 18%
24%
Broad Range of Product Offerings
Homes for entry-level, move-up and luxury buyers
$0 to $200k
$500k+
Represents homes closed for the trailing twelve months ended 12/31/15
7%
7Q1 FY2016
74%
22%
4%
Substantial Growth in Brands
New Brand Growth - TTM
1,960
6,623
580
1,163
0
2,500
5,000
7,500
10,000
TTM 12/31/14 TTM 12/31/15
Overall Brand Mix – Q1
Represents homes closed
Homes Closed
8Q1 FY2016
Current land ownership level is sufficient to support double-digit annual growth in both revenues and profits
Consistently optimize balance of sales absorptions and gross margins to maximize returns in each community
Manage land and home inventory levels efficiently to generate consistent positive cash flow from operations
Underwriting criteria for land and lot purchases and operational expectations for each community: Minimum 20% annual net return on inventory investment
(ROI) for all brands Net ROI% = Pre-tax Income divided by Average Inventory
Initial cash investment returned within 24 months or less
Operational Focus
9Q1 FY2016
Average employee tenure: Region Presidents – over 20 years Division Presidents – 15 years City Managers – over 10 years
Management Tenure & Experience
10Q1 FY2016
Fiscal Year: Consolidated pre-tax margin in the range of 10.5% to 11.0% Consolidated revenues of $12.0 billion to $12.5 billion Closings between 39,500 and 41,500 homes Home sales gross margin in the high 19s to 20% Homebuilding SG&A expense in the range of 9.2% to 9.4% of homebuilding revenues Financial Services operating margin between 30% and 33% Income tax rate between 35% and 36% Diluted share count of approximately 375 million shares Cash flow from operations in the range of $300 million to $500 million
Second Quarter: Backlog conversion rate in the range of 82% to 85% Home sales gross margin in the high 19s to 20%, consistent with first quarter Homebuilding SG&A expense in the range of 10.3% to 10.6% of homebuilding revenues
FY 2016 Expectations*
*Based on housing market conditions as noted on the Company’s conference call on 1/25/16
11Q1 FY2016
Invest in homebuilding business where opportunities to generate acceptable returns exist, including business acquisitions
Pay off debt at maturity Paid $170 million of senior notes at maturity in
January 2016
$373 million maturities remaining in fiscal 2016 – most likely pay off some portion, while refinancing the rest
Be opportunistic, while remaining disciplined
Cash Flow Priorities
13Q1 FY2016
The value of net homes sold, homes closed and homes in backlog increased by 12%, 4% and 16%, respectively
8,064 net homes sold and 8,061 homes closed
10,665 homes in backlog at 12/31/15
Consolidated pre-tax income increased 9% to $241.3 million
Consolidated pre-tax income margin improved 40 basis points to 10%
Net income increased 11% to $157.7 million
Cash flow used in operations improved $127.5 million to $1.5 million
Q1 FY 2016 Highlights
14Q1 FY2016
In the first quarter, accounted for:
71% of homes sold
74% of homes closed
77% of home sales revenue
Q1 Average Closing Price: $302,000
D.R. Horton
The Heart of our Business
Reported metrics for D.R. Horton include our Crown Communities and Pacific Ridge Homes operations
79 Markets | 27 States
15Q1 FY2016
Introduced in 2013
In the first quarter, accounted for:
4% of homes sold
4% of homes closed
8% of home sales revenue
Q1 Average Closing Price: $592,000
Emerald Homes
Higher-end move-up and luxury buyer
44 Markets | 17 States
16Q1 FY2016
Introduced in Spring 2014
In the first quarter, accounted for: 25% of homes sold 22% of homes closed 15% of home sales revenue
Q1 Average Closing Price: $199,000
Express Homes
Targeted at the true entry-level buyer
Reported metrics for Express include our Regent Homes operations
48 Markets | 15 States
17Q1 FY2016
Sales, Closings & Backlog – Q1 FY16
Net Sales Orders, Homes Closed and Homes in Backlog increased 9%, 1% and 15%, respectively, in Q1 of FY2016 compared to Q1 of FY2015
0
2,000
4,000
6,000
8,000
10,000
12,000
Sales Closings Backlog
1Q FY14 1Q FY15 1Q FY16
18Q1 FY2016
Income Statement
$ in millions
12/31/2015 12/31/2014 9/30/2015 9/30/2014
Homes closed 8,061 7,973 36,648 28,670
Revenues:Home sales 2,340.9$ 2,240.7$ 10,469.4$ 7,804.7$ Land/lot sales & other 20.2 12.3 89.6 53.8
2,361.1 2,253.0 10,559.0 7,858.5 Gross Profit:
Home sales 466.6 442.6 2,075.8 1,665.6 Land/lot sales & other 4.3 2.0 7.8 9.5 Inventory & land option charges (2.0) (6.0) (60.3) (85.2)
468.9 438.6 2,023.3 1,589.9 SG&A 243.3 238.0 1,013.6 834.2 Goodwill Impairment - - 9.8 - Interest and other (income) (3.4) (5.5) (18.4) (13.1) Homebuilding pre-tax income 229.0 206.1 1,018.3 768.8 Financial Services pre-tax income 12.3 14.6 105.1 45.4 Pre-tax income 241.3 220.7 1,123.4 814.2 Income tax expense 83.6 78.2 372.7 280.7 Net income 157.7$ 142.5$ 750.7$ 533.5$
3 Months Ended Fiscal Year Ended
19Q1 FY2016
Home Sales Gross Margin
Homes sales gross margin of around 20% in a stable housing market
0%
5%
10%
15%
20%
25%
FY12 FY13 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16
17.7%
20.8% 21.3%19.8% 19.7% 19.9% 19.9% 19.9%
Shown as a % of home sales revenuesIncludes interest amortized to cost of sales
20Q1 FY2016
Homebuilding SG&A
SG&A as a percentage of homebuilding revenues improved 30 basis points in Q1 FY2016
Fiscal Year 2015
$0
$200
$400
$600
$800
$1,000
$1,200
2014 2015
$834.2 $1,013.6
10.6%
9.6%
$0
$200
$400
$600
$800
$1,000
$1,200
Q1 FY15 Q1 FY16
$238.0 $243.3
10.3%
SG&A $SG&A $
10.6%
Shown as a % of homebuilding revenues$ in millions
First Fiscal Quarter 2016
21Q1 FY2016
Consolidated Pre-tax Income
Consolidated pre-tax income margin in Q1 FY2016 improved 40 basis points to 10.0%
Fiscal Year 2015 First Fiscal Quarter 2016
$0
$200
$400
$600
$800
$1,000
$1,200
2014 2015
$814.2
$1,123.4
10.1%
10.4%
$0
$200
$400
$600
$800
$1,000
$1,200
Q1 FY15 Q1 FY16
$220.7 $241.3
9.6% 10.0%
Shown as a % of consolidated revenues$ in millions
PTI $ PTI $
22Q1 FY2016
Balance Sheet
$ in millions
12/31/15 9/30/15 12/31/14
HB cash and cash equivalents 1,245.7$ 1,355.9$ 517.7$ Restricted cash 9.7 9.7 9.6 Inventories 8,088.2 7,807.0 7,989.3 Deferred income taxes, net 542.2 558.1 552.7 Other assets 1,293.7 1,420.3 1,269.4 Total 11,179.5$ 11,151.0$ 10,338.7$
Notes payable - HB 3,337.2$ 3,333.6$ 3,403.1$ Other liabilities 1,781.8 1,922.0 1,671.8 Equity 6,060.5 5,895.4 5,263.8 Total 11,179.5$ 11,151.0$ 10,338.7$
Homebuilding Leverage Gross 35.5% 36.1% 39.2% Net of cash 25.7% 25.1% 35.3%
Book Value/Share $16.39 $15.99 $14.40
23Q1 FY2016
Homes in Inventory
0
5,000
10,000
15,000
20,000
25,000
9/30/12 9/30/13 9/30/14 12/31/14 9/30/15 12/31/15
Models Sold Specs
17,000
13,000
21,30019,800
20,60021,500
24Q1 FY2016
Robust Lot Position
94,600 126,600 124,600 124,500 118,400 116,600
58,100 54,300 58,900 60,200 55,500 61,100
0
25,000
50,000
75,000
100,000
125,000
150,000
175,000
200,000
9/30/12 9/30/13 9/30/14 12/31/14 9/30/15 12/31/15
Optioned Owned
152,700
180,900 183,500 184,700173,900 177,700
Increased optioned lot position by 10% from 9/30/15 to 12/31/15
25Q1 FY2016
$ in millionsLand held for development is shown as separate line item on face of balance sheet
Inactive Land Held for Development
“Mothballed” lot count down 24% from 12/31/14
$628.3
$450.2
$332.8$304.3
$202.3 $185.4
39,400
21,700
14,000 13,90011,100 10,500
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
$0
$100
$200
$300
$400
$500
$600
$700
9/30/12 9/30/13 9/30/14 12/31/14 9/30/15 12/31/15
Balance
Lots Held
26Q1 FY2016
Public Debt Maturities by Year
$0
$100
$200
$300
$400
$500
$600
$700
$800
FY 16 FY 17 FY 18 FY 19 FY 20 FY 22 FY 23
4.750%
$350
$500
$373
$500
$350
$400
6.500% 4.750% 3.625% 3.750% 4.000% 4.375%
5.750%
$700
$ in millionsPro forma balance of public notes outstanding subsequent to 1/15/2016 debt maturity
As of January 25, 2016