D.R. Horton, Inc., America's Builder, Reports Fiscal 2009 Second Quarter Results and Declares Quarterly Dividend

FORT WORTH, Texas--(BUSINESS WIRE)--May. 4, 2009-- D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported a net loss for its second fiscal quarter ended March 31, 2009 of $108.6 million, or $0.34 per diluted share. The quarterly results included $48.1 million in pre-tax charges to cost of sales for inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. The net loss for the same quarter of fiscal 2008 was $1.3 billion, or $4.14 per diluted share. Homebuilding revenue for the second quarter of fiscal 2009 totaled $775.3 million, compared to $1.6 billion in the same quarter of fiscal 2008. Homes closed totaled 3,585 homes, compared to 6,719 homes in the year ago quarter.

For the six months ended March 31, 2009, the Company reported a net loss totaling $171.1 million, or $0.54 per diluted share. The six-month results included pre-tax charges to cost of sales of $104.4 million of inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. The net loss for the same period of fiscal 2008 was $1.4 billion, or $4.55 per diluted share. Homebuilding revenue for the six months ended March 31, 2009 totaled $1.7 billion, compared to $3.3 billion for the same period of fiscal 2008. Homes closed in the six-month period totaled 7,653 homes, compared to 13,268 homes closed in the same period of fiscal 2008.

The Company’s sales order backlog of homes under contract at March 31, 2009 was 4,581 homes ($963.0 million), compared to 8,947 homes ($2.1 billion), at March 31, 2008. Net sales orders for the second quarter totaled 4,160 homes ($844.5 million), compared to 7,528 homes ($1.7 billion) for the same quarter of fiscal 2008. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the second quarter of fiscal 2009 was 30%. Net sales orders for the first six months of fiscal 2009 were 6,937 homes ($1.4 billion), compared to 11,773 homes ($2.6 billion) for the same period of fiscal 2008.

The Company’s homebuilding cash balance at March 31, 2009 was $1.5 billion. Net cash provided by operating activities for the first six months of fiscal 2009 was $978.6 million, including $161.0 million provided during the three months ended March 31, 2009.

As of March 31, 2009, the Company was in compliance with all the covenants associated with its homebuilding revolving credit facility and had $275 million available under its borrowing base. With its substantial cash balance and expected future cash position, the Company does not anticipate a need to borrow from the facility for the remainder of its term ending in December 2011. Therefore, the Company has chosen to terminate the facility. The Company has provided notice to its lenders participating in the facility and expects the termination to be effective May 11, 2009. The Company expects to save over $3 million annually in non-use fees as a result of terminating its revolving credit facility.

During the second quarter, the Company repaid the outstanding principal of $460 million of its 5% and 8% senior notes, which became due on January 15, 2009 and February 1, 2009, respectively. Also during the quarter, the Company repurchased $77.8 million principal amount of its outstanding notes with maturities beyond 2009 for a total purchase price of $75.3 million, plus accrued interest. Subsequent to March 31st, the Company repurchased a total of $25.2 million principal amount of its outstanding notes for a total purchase price of $23.7 million, plus accrued interest.

The Company has declared a quarterly cash dividend of $0.0375 per share. The dividend is payable on May 27, 2009 to stockholders of record on May 19, 2009.

Donald R. Horton, Chairman of the Board, said, “We saw a seasonal increase in sales activity in the March quarter, with our net sales increasing 50% from our December quarter. However, market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of both new and existing homes, increasing unemployment, tight credit for homebuyers and eroding consumer confidence. We have continued to adjust our business to the current homebuilding environment by reducing our owned lot position, controlling costs and improving our balance sheet.

“We have generated positive cash flow from operations in each of the past eleven quarters, and our cash balance was $1.5 billion at March 31, 2009, even after redeeming approximately $538 million of our outstanding notes during the quarter. Our net homebuilding debt to total capitalization was 34.3% at the end of the quarter, and we will continue to focus on maintaining our strong liquidity position and balance sheet. We plan to generate positive operating cash flow in fiscal 2009, in addition to the cash provided by any federal income tax refunds.”

The Company will host a conference call tomorrow (Tuesday, May 5) at 10:00 a.m. Eastern time. The dial-in number is 800-374-9096, and the call will also be webcast from www.drhorton.com on the “Investor Relations” page.

D.R. Horton, Inc., America’s Builder, is the largest homebuilder in the United States, delivering more than 26,000 homes in its fiscal year ended September 30, 2008. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 77 markets in 27 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.

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 the Company’s expected future cash position, not anticipating a need to borrow from its credit facility for the remainder of its term ending in December 2011 and its expectations that the agreement governing the facility will be terminated effective May 11, 2009 and that terminating the facility will save the Company over $3 million annually in non-use fees. The forward-looking statements also include our continued focus on maintaining our strong liquidity position and balance sheet, and our plan to generate positive operating cash flow in fiscal year 2009 in addition to the cash provided by any federal income tax refunds. 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 continuing downturn in the homebuilding industry, including further deterioration in industry or broader economic conditions; the downturn in homebuilding and the disruptions in the credit markets, which could limit our ability to access capital and increase our costs of capital; the reduction in availability of mortgage financing and the increase in mortgage interest rates; the limited success of our strategies in responding to adverse conditions in the industry; changes in general economic, real estate, construction and other business conditions; changes in the costs of owning a home; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulation on our financial services operations; our substantial debt and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within our industry; our ability to effect any future growth strategies successfully; our ability to realize our deferred income tax asset; our net operating loss carryforwards could be substantially limited if we experienced an ownership change as defined in the Internal Revenue Code; and the uncertainties inherent in home warranty and construction defect claims matters. 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 most recent quarterly report on Form 10-Q, which are filed with the Securities and Exchange Commission.

WEBSITE ADDRESS: www.drhorton.com

Source: D.R. Horton, Inc.

D.R. Horton, Inc.
Stacey Dwyer, EVP, 817-390-8200