ARLINGTON, Texas–(BUSINESS WIRE)–$DHI #earnings–D.R. Horton, Inc. (NYSE:DHI):
Fiscal 2022 Fourth Quarter Highlights – comparisons to the prior year quarter
Net income per diluted share increased 26% to $4.67
Net income attributable to D.R. Horton increased 22% to $1.6 billion
Consolidated revenues increased 19% to $9.6 billion
Consolidated pre-tax income increased 20% to $2.1 billion, with a pre-tax profit margin of 21.4%
Repurchased 3.6 million shares of common stock for $251.7 million
Fiscal 2022 Highlights – comparisons to the prior year
Net income per diluted share increased 45% to $16.51
Net income attributable to D.R. Horton increased 40% to $5.9 billion
Consolidated revenues increased 21% to $33.5 billion
Consolidated pre-tax income increased 42% to $7.6 billion, with a pre-tax profit margin of 22.8%
Home sales revenue increased 20% to $31.9 billion on 82,744 homes
Cash provided by homebuilding operations totaled $1.9 billion
Homebuilding leverage of 13.2%
Book value per common share increased 35% to $56.39
Repurchased 14.0 million shares of common stock for $1.1 billion
Return on equity was 34.5% and homebuilding return on inventory was 42.8%
D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income per common share attributable to D.R. Horton for its fourth fiscal quarter ended September 30, 2022 increased 26% to $4.67 per diluted share compared to $3.70 per diluted share in the same quarter of fiscal 2021. Net income attributable to D.R. Horton in the fourth quarter of fiscal 2022 increased 22% to $1.6 billion compared to $1.3 billion in the same quarter of fiscal 2021. Homebuilding revenue for the fourth quarter of fiscal 2022 increased 23% to $9.4 billion from $7.6 billion in the same quarter of fiscal 2021. Homes closed in the quarter increased 6% to 23,212 homes compared to 21,937 homes closed in the same quarter of fiscal 2021.
For the fiscal year ended September 30, 2022, net income per common share attributable to D.R. Horton increased 45% to $16.51 per diluted share compared to $11.41 per diluted share in fiscal 2021. Net income attributable to D.R. Horton in fiscal 2022 increased 40% to $5.9 billion compared to $4.2 billion in fiscal 2021. Homebuilding revenue for the fiscal year ended September 30, 2022 increased 20% to $31.9 billion from $26.6 billion in fiscal 2021. Homes closed in fiscal 2022 increased 1% to 82,744 homes compared to 81,965 homes closed in fiscal 2021.
Net sales orders for the fourth quarter ended September 30, 2022 decreased 15% to 13,582 homes and 10% in value to $5.4 billion compared to 15,949 homes and $6.0 billion in the same quarter of fiscal 2021. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the fourth quarter of fiscal 2022 was 32% compared to 19% in the prior year quarter. Net sales orders for the fiscal year ended September 30, 2022 decreased 6% to 76,137 homes and increased 9% in value to $30.4 billion compared to 81,378 homes and $27.7 billion in fiscal 2021. The Company’s cancellation rate for fiscal 2022 was 21% compared to 17% in fiscal 2021. The Company’s sales order backlog of homes under contract at September 30, 2022 decreased 25% to 19,614 homes and 16% in value to $8.0 billion compared to 26,221 homes and $9.5 billion at September 30, 2021.
At September 30, 2022, the Company had 46,400 homes in inventory, of which 27,200 were unsold. 4,400 of the Company’s unsold homes at September 30, 2022 were completed. The Company’s homebuilding land and lot portfolio totaled 573,200 lots at the end of the year, of which 23% were owned and 77% were controlled through land purchase contracts.
The Company’s return on equity (ROE) was 34.5% in fiscal 2022, and homebuilding return on inventory (ROI) was 42.8%. ROE is calculated as net income attributable to D.R. Horton for the year divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances of the trailing five quarters divided by five. Homebuilding ROI is calculated as homebuilding pre-tax income for the year divided by average inventory, where average inventory is the sum of ending homebuilding inventory balances for the trailing five quarters divided by five.
The Company ended the year with $2.0 billion of unrestricted homebuilding cash and $2.0 billion of available capacity on its revolving credit facility for total homebuilding liquidity of $4.0 billion. Homebuilding debt at September 30, 2022 totaled $2.9 billion, which includes $700 million of senior notes that mature in fiscal 2023. The Company’s homebuilding debt to total capital ratio at September 30, 2022 was 13.2%. Homebuilding debt to total capital ratio consists of homebuilding notes payable divided by stockholders’ equity plus homebuilding notes payable.
Donald R. Horton, Chairman of the Board, said, “The D.R. Horton team finished the year strong, highlighted by our fourth quarter consolidated pre-tax income increasing 20% to $2.1 billion on a 19% increase in revenues and a pre-tax profit margin of 21.4%. For the year, our consolidated pre-tax income increased 42% to $7.6 billion on a 21% increase in revenues and a 350 basis point increase in our pre-tax profit margin to 22.8%. With a record 83,518 homes closed by our homebuilding and single-family rental operations in fiscal 2022, D.R. Horton completed its 21st consecutive year as the largest homebuilder in the United States. These results reflect the strength of our experienced teams, industry-leading market share, broad geographic footprint and diverse product offerings.
“During most of the year, demand for our homes was strong. Beginning in June and continuing through today, we have seen a moderation in housing demand caused by significant increases in mortgage interest rates and general economic uncertainty. While these pressures may persist for some time, the supply of homes at affordable price points remains limited, and demographics supporting housing demand remain favorable.
“We are well-positioned to navigate changing market conditions and are focused on turning our inventory to maximize returns and capital efficiency in each of our communities. Our homebuilding cash flow from operations in fiscal 2022 was $1.9 billion, and our homebuilding leverage at the end of the year was 13.2%, the lowest in Company history. Our strong balance sheet, liquidity and low leverage provide us with significant financial flexibility, and we plan to maintain our disciplined approach to investing capital to enhance the long-term value of our company, including returning capital to our shareholders through both dividends and share repurchases on a consistent basis.”
Forestar
Forestar Group Inc. (NYSE:FOR) (“Forestar”) is a publicly traded residential lot development company that is a majority-owned subsidiary of D.R. Horton. Forestar’s results of operations for the periods presented are fully consolidated in the Company’s financial statements with the percentage not owned by the Company reported as noncontrolling interests.
For the fourth quarter ended September 30, 2022, Forestar sold 3,914 lots and generated $381.4 million of revenue compared to 4,902 lots and $418.7 million of revenue in the prior year quarter. For the fiscal year ended September 30, 2022, Forestar sold 17,691 lots and generated $1.5 billion of revenue compared to 15,915 lots and $1.3 billion of revenue in fiscal 2021.
Forestar’s pre-tax income in the fourth quarter of fiscal 2022 increased 13% to $66.4 million with a pre-tax profit margin of 17.4% compared to $58.8 million of pre-tax income and a 14.0% pre-tax profit margin in the same quarter of fiscal 2021. For the fiscal year ended September 30, 2022, Forestar’s pre-tax income increased 61% to $235.8 million with a pre-tax profit margin of 15.5% compared to $146.6 million of pre-tax income and a 11.1% pre-tax profit margin in fiscal 2021.
Financial Services
For the fourth quarter ended September 30, 2022, financial services revenues were $134.2 million compared to $222.5 million in the same quarter of fiscal 2021. Financial services pre-tax income for the quarter was $2.4 million with a pre-tax profit margin of 1.8% compared to $102.5 million of pre-tax income and a 46.1% pre-tax profit margin in the prior year quarter. For the fiscal year ended September 30, 2022, financial services revenues were $795.0 million compared to $823.6 million in fiscal 2021. Financial services pre-tax income for fiscal 2022 was $290.6 million with a pre-tax profit margin of 36.6% compared to $364.6 million of pre-tax income and a 44.3% pre-tax profit margin in fiscal 2021.
Rental Operations
The Company’s rental operations generated $510.2 million of revenues and $202.0 million of pre-tax income in fiscal 2022, which includes a pre-tax loss in the fourth quarter of $13.1 million.
During the fourth quarter of fiscal 2022, the Company sold 96 single-family rental homes for $21.1 million. During fiscal 2022, the Company sold 774 single-family rental homes for $313.8 million compared to 257 homes sold for $75.9 million in fiscal 2021. At September 30, 2022, the consolidated balance sheet included $1.7 billion of single-family rental property inventory consisting of 7,400 homes, of which 3,530 were completed, and 6,680 lots of which 1,770 were finished.
During fiscal 2022, the Company sold 775 multi-family rental units for $195.5 million compared to 959 units sold for $191.9 million in fiscal 2021. At September 30, 2022, the consolidated balance sheet included $897.2 million of multi-family rental property inventory consisting of 5,810 units under active construction and 300 completed units.
The Company’s rental operating results are reported separately and are not included in the homes closed, revenues or inventories of its homebuilding segment.
Dividends
During the fourth quarter of fiscal 2022, the Company paid cash dividends of $78.2 million, for a total of $316.5 million of dividends paid during the year. Subsequent to year-end, the Company declared a quarterly cash dividend of $0.25 per common share, an increase of 11% compared to its most recent dividend paid. The dividend is payable on December 12, 2022 to stockholders of record on December 2, 2022.
Share Repurchases
The Company repurchased 3.6 million shares of common stock for $251.7 million during the fourth quarter of fiscal 2022, for a total of 14.0 million shares of common stock for $1.1 billion during the year. The Company’s remaining stock repurchase authorization at September 30, 2022 was $438.3 million.
Conference Call and Webcast Details
The Company will host a conference call today (Wednesday, November 9) at 8:30 a.m. Eastern Time. The dial-in number is 888-506-0062 (reference entry code 728765), and the call will also be webcast from the Company’s website at investor.drhorton.com.
About D.R. Horton, Inc.
D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States since 2002. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 106 markets in 33 states across the United States and closed 83,518 homes in its homebuilding and single-family rental operations during its fiscal year ended September 30, 2022. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Emerald Homes, Express Homes and Freedom Homes with sales prices generally ranging from $200,000 to over $1,000,000. Through its mortgage, title and insurance subsidiaries, D.R. Horton provides mortgage financing, title services and insurance agency services for its homebuyers. The Company also constructs and sells both single-family and multi-family rental properties and is the majority-owner of Forestar Group Inc., a national residential lot development company.
Forward-Looking Statements
Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that beginning in June and continuing through today, we have seen a moderation in housing demand caused by significant increases in mortgage interest rates and general economic uncertainty, and while these pressures may persist for some time, the supply of homes at affordable price points remains limited, and demographics supporting housing demand remain favorable. The forward-looking statements also include that we are well-positioned to navigate changing market conditions and are focused on turning our inventory to maximize returns and capital efficiency in each of our communities and that our strong balance sheet, liquidity and low leverage provide us with significant financial flexibility, and we plan to maintain our disciplined approach to investing capital to enhance the long-term value of our company, including returning capital to our shareholders through both dividends and share repurchases on a consistent basis.
Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the cyclical nature of the homebuilding, lot development and rental housing industries and changes in economic, real estate or other conditions; constriction of the credit and public capital markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land, lot and rental inventory; our ability to effect our growth strategies, acquisitions or investments successfully; the impact of an inflationary, deflationary or higher interest rate environment; supply shortages and other risks of acquiring land, building materials and skilled labor; the effects of public health issues such as a major epidemic or pandemic, including the impact of COVID-19 on the economy and our businesses; the effects of weather conditions and natural disasters on our business and financial results; home warranty and construction defect claims; the effects of health and safety incidents; reductions in the availability of performance bonds; increases in the costs of owning a home; the effects of governmental regulations and environmental matters on our homebuilding and land development operations; the effects of governmental regulations on our financial services operations; competitive conditions within the industries in which we operate; our ability to manage and service our debt and comply with related debt covenants, restrictions and limitations; the effects of negative publicity; the effects of the loss of key personnel; actions by activist stockholders; and information technology failures, data security breaches and our ability to satisfy privacy and data protection laws and regulations. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton’s annual report on Form 10-K and its most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.
D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30,
2022
2021
(In millions)
ASSETS
Cash and cash equivalents
$
2,540.5
$
3,210.4
Restricted cash
32.4
26.8
Total cash, cash equivalents and restricted cash
2,572.9
3,237.2
Inventories:
Construction in progress and finished homes
9,798.2
7,739.2
Residential land and lots — developed, under development,
held for development and held for sale
9,313.3
7,918.1
Rental properties
2,544.2
821.8
Total inventory
21,655.7
16,479.1
Mortgage loans held for sale
2,386.0
2,027.3
Deferred income taxes, net of valuation allowance of $17.9 million
and $4.2 million at September 30, 2022 and 2021, respectively
141.1
155.3
Property and equipment, net
471.6
392.9
Other assets
2,960.3
1,560.6
Goodwill
163.5
163.5
Total assets
$
30,351.1
$
24,015.9
LIABILITIES
Accounts payable
$
1,360.3
$
1,177.0
Accrued expenses and other liabilities
3,138.3
2,210.3
Notes payable
6,066.9
5,412.4
Total liabilities
10,565.5
8,799.7
EQUITY
Common stock, $.01 par value, 1,000,000,000 shares authorized,
399,172,937 shares issued and 343,953,023 shares outstanding at September 30, 2022 and
397,190,100 shares issued and 356,015,843 shares outstanding at September 30, 2021
4.0
4.0
Additional paid-in capital
3,349.5
3,274.8
Retained earnings
19,185.3
13,644.3
Treasury stock, 55,219,914 shares and 41,174,257 shares
at September 30, 2022 and 2021, respectively, at cost
(3,142.5
)
(2,036.6
)
Stockholders’ equity
19,396.3
14,886.5
Noncontrolling interests
389.3
329.7
Total equity
19,785.6
15,216.2
Total liabilities and equity
$
30,351.1
$
24,015.9
D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
Year Ended
September 30,
2022
2021
2022
2021
(In millions, except per share data)
Revenues
$
9,639.4
$
8,109.3
$
33,480.0
$
27,774.2
Cost of sales
6,760.9
5,703.2
22,975.9
19,899.2
Selling, general and administrative expense
832.0
693.0
2,933.7
2,556.2
Gain on sale of assets
—
—
—
(14.0
)
Loss on extinguishment of debt
—
—
—
18.1
Other (income) expense
(19.4
)
(13.5
)
(59.3
)
(41.6
)
Income before income taxes
2,065.9
1,726.6
7,629.7
5,356.3
Income tax expense
417.6
381.0
1,734.1
1,165.1
Net income
1,648.3
1,345.6
5,895.6
4,191.2
Net income attributable to noncontrolling interests
16.4
6.6
38.1
15.4
Net income attributable to D.R. Horton, Inc.
$
1,631.9
$
1,339.0
$
5,857.5
$
4,175.8
Basic net income per common share attributable to D.R. Horton, Inc.
$
4.70
$
3.74
$
16.65
$
11.56
Weighted average number of common shares
346.9
357.9
351.7
361.1
Diluted net income per common share attributable to D.R. Horton, Inc.
$
4.67
$
3.70
$
16.51
$
11.41
Adjusted weighted average number of common shares
349.7
362.1
354.8
365.8
Other Consolidated Financial Data:
Interest charged to cost of sales
$
39.4
$
39.4
$
142.8
$
142.2
Depreciation and amortization
$
21.2
$
18.5
$
81.4
$
82.1
Interest incurred
$
48.9
$
36.2
$
162.5
$
152.2
D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Year Ended September 30,
2022
2021
(In millions)
OPERATING ACTIVITIES
Net income
$
5,895.6
$
4,191.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
81.4
82.1
Stock-based compensation expense
105.1
91.4
Deferred income taxes
29.1
(10.0
)
Inventory and land option charges
70.4
28.6
Gain on sale of assets
—
(14.0
)
Loss on extinguishment of debt
—
18.1
Changes in operating assets and liabilities:
Increase in construction in progress and finished homes
(2,059.0
)
(1,734.9
)
Increase in residential land and lots –
developed, under development, held for development and held for sale
(1,402.8
)
(1,720.6
)
Increase in rental properties
(1,723.2
)
(303.6
)
Increase in other assets
(1,111.5
)
(440.7
)
Increase in mortgage loans held for sale
(358.8
)
(498.3
)
Increase in accounts payable, accrued expenses and other liabilities
1,035.5
845.1
Net cash provided by operating activities
561.8
534.4
INVESTING ACTIVITIES
Expenditures for property and equipment
(148.2
)
(93.5
)
Proceeds from sale of assets
—
37.6
Expenditures related to rental properties
—
(173.9
)
Payments related to business acquisitions, net of cash acquired
(271.5
)
(24.5
)
Other investing activities
4.8
2.1
Net cash used in investing activities
(414.9
)
(252.2
)
FINANCING ACTIVITIES
Proceeds from notes payable
4,250.0
1,541.6
Repayment of notes payable
(3,801.2
)
(826.3
)
Advances on mortgage repurchase facility, net
123.7
362.0
Proceeds from stock associated with certain employee benefit plans
33.2
22.7
Cash paid for shares withheld for taxes
(62.0
)
(78.5
)
Cash dividends paid
(316.5
)
(289.3
)
Repurchases of common stock
(1,131.5
)
(848.4
)
Net proceeds from issuance of Forestar common stock
1.7
33.5
Net other financing activities
91.4
(2.4
)
Net cash used in financing activities
(811.2
)
(85.1
)
Net (decrease) increase in cash, cash equivalents and restricted cash
(664.3
)
197.1
Cash, cash equivalents and restricted cash at beginning of year
3,237.2
3,040.1
Cash, cash equivalents and restricted cash at end of year
$
2,572.9
$
3,237.2
D.R. HORTON, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(UNAUDITED)
September 30, 2022
Homebuilding
Forestar (1)
Financial Services
Rental
Eliminations
and Other (2)
Consolidated
(In millions)
Assets
Cash and cash equivalents
$
2,040.7
$
264.8
$
103.3
$
109.9
$
21.8
$
2,540.5
Restricted cash
11.3
—
19.7
1.4
—
32.4
Inventories:
Construction in progress and finished homes
9,951.5
—
—
—
(153.3
)
9,798.2
Residential land and lots
7,372.9
2,022.4
—
—
(82.0
)
9,313.3
Rental properties
—
—
—
2,572.1
(27.9
)
2,544.2
17,324.4
2,022.4
—
2,572.1
(263.2
)
21,655.7
Mortgage loans held for sale
—
—
2,386.0
—
—
2,386.0
Deferred income taxes, net
146.3
—
—
(7.1
)
1.9
141.1
Property and equipment, net
361.8
5.7
4.3
2.0
97.8
471.6
Other assets
2,266.5
50.1
492.5
18.4
132.8
2,960.3
Goodwill
134.3
—
—
—
29.2
163.5
$
22,285.3
$
2,343.0
$
3,005.8
$
2,696.7
$
20.3
$
30,351.1
Liabilities
Accounts payable
$
1,149.1
$
72.2
$
0.2
$
233.6
$
(94.8
)
$
1,360.3
Accrued expenses and other liabilities
2,365.7
365.4
596.2
25.0
(214.0
)
3,138.3
Notes payable
2,942.6
706.0
1,618.3
800.0
—
6,066.9
$
6,457.4
$
1,143.6
$
2,214.7
$
1,058.6
$
(308.8
)
$
10,565.5
September 30, 2021
Homebuilding
Forestar (1)
Financial Services
Rental
Eliminations
and Other (2)
Consolidated
(In millions)
Assets
Cash and cash equivalents
$
2,950.1
$
153.6
$
79.0
$
16.8
$
10.9
$
3,210.4
Restricted cash
8.4
—
18.0
0.4
—
26.8
Inventories:
Construction in progress and finished homes
7,848.0
—
—
—
(108.8
)
7,739.2
Residential land and lots
6,059.8
1,905.2
—
—
(46.9
)
7,918.1
Rental properties
—
—
—
840.9
(19.1
)
821.8
13,907.8
1,905.2
—
840.9
(174.8
)
16,479.1
Mortgage loans held for sale
—
—
2,027.3
—
—
2,027.3
Deferred income taxes, net
159.2
—
—
—
(3.9
)
155.3
Property and equipment, net
303.3
2.9
3.5
0.6
82.6
392.9
Other assets
1,468.7
40.0
107.6
6.3
(62.0
)
1,560.6
Goodwill
134.3
—
—
—
29.2
163.5
$
18,931.8
$
2,101.7
$
2,235.4
$
865.0
$
(118.0
)
$
24,015.9
Liabilities
Accounts payable
$
1,073.7
$
47.4
$
—
$
55.9
$
—
$
1,177.0
Accrued expenses and other liabilities
1,941.3
333.9
88.6
15.0
(168.5
)
2,210.3
Notes payable
3,214.0
704.5
1,494.6
—
(0.7
)
5,412.4
$
6,229.0
$
1,085.8
$
1,583.2
$
70.9
$
(169.2
)
$
8,799.7
Contacts
D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Vice President of Investor Relations
InvestorRelations@drhorton.com
