D.R. Horton, Inc., America’s Builder, Reports Fourth Quarter and Fiscal 2013 Earnings

Fiscal 2013 Fourth Quarter Highlights - as compared to the prior year quarter

• Pre-tax income increased 104% to $202.8 million
• Pre-tax income margin increased 350 basis points to 10.9% of revenues
• Home sales gross margin increased 380 basis points to 21.9%
• Homebuilding SG&A as a percentage of homebuilding revenues improved 90 basis points to 10.3%

Fiscal 2013 Highlights - as compared to the prior year

• Pre-tax income increased 171% to $657.8 million
• Pre-tax income margin increased 490 basis points to 10.5% of revenues
• Home sales gross margin increased 310 basis points to 20.8%
• Homebuilding SG&A as a percentage of homebuilding revenues improved 180 basis points to 10.7%
• Net sales orders increased 19% in homes to 25,120 and 37% in value to $6.6 billion
• Homes closed increased 28% in homes to 24,155 and 43% in value to $6.0 billion
• Sales order backlog increased 13% in homes to 8,205 and 33% in value to $2.2 billion

FORT WORTH, Texas--(BUSINESS WIRE)--Nov. 12, 2013-- D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that pre-tax income for its fourth fiscal quarter ended September 30, 2013 increased 104% to $202.8 million, compared to $99.2 million in the same quarter of fiscal 2012. The quarterly results included $27.1 million of pre-tax inventory and land option charges to cost of sales, compared to $1.5 million in the same quarter of fiscal 2012. Net income for the fourth fiscal quarter was $139.5 million, or $0.40 per diluted share, compared to $100.1 million, or $0.30 per diluted share, in the same quarter of fiscal 2012. The prior year quarterly results included a non-cash tax benefit of $36.5 million from a reduction of the Company's valuation allowance on its deferred tax assets. Homebuilding revenue for the fourth quarter of fiscal 2013 increased 40% to $1.8 billion from $1.3 billion in the same quarter of 2012. Homes closed in the quarter increased 23% to 6,866, compared to 5,575 homes in the year-ago quarter.

For the fiscal year ended September 30, 2013, the Company's pre-tax income increased 171% to $657.8 million, compared to $242.9 million in the same period of 2012. The fiscal year results included $31.1 million of pre-tax inventory and land option charges to cost of sales, compared to $6.2 million in the prior year. Net income for the fiscal year ended September 30, 2013 was $462.7 million, or $1.33 per diluted share, compared to $956.3 million, or $2.77 per diluted share, in fiscal 2012. The results in fiscal 2012 included a non-cash tax benefit of $753.2 million from a reduction of the Company's valuation allowance on its deferred tax assets. Homebuilding revenue for the fiscal year ended September 30, 2013 increased 44% to $6.1 billion from $4.2 billion in fiscal 2012. Homes closed in fiscal 2013 increased 28% to 24,155, compared to 18,890 homes in fiscal 2012.

Net sales orders for the fourth quarter ended September 30, 2013 decreased 2% to 5,160 homes from 5,276 homes in the year-ago quarter and the value of net sales orders increased 14% to $1.4 billion from $1.3 billion. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the fourth quarter of fiscal 2013 was 31%. Net sales orders for the fiscal year ended September 30, 2013 increased 19% to 25,120 homes from 21,048 homes in fiscal 2012 and the value of net sales orders increased 37% to $6.6 billion from $4.8 billion. The Company’s sales order backlog of homes under contract at September 30, 2013 increased 13% to 8,205 homes from 7,240 homes at September 30, 2012. The value of the backlog increased 33% to $2.2 billion at September 30, 2013 from $1.7 billion a year ago.

The Company ended the year with $913.3 million of homebuilding unrestricted cash and net homebuilding debt to total capital of 36.7%. Net homebuilding debt to total capital consists of homebuilding notes payable net of cash divided by total equity plus homebuilding notes payable net of cash.

Donald R. Horton, Chairman of the Board, said, “Our fourth quarter provided a solid finish to a great year. In fiscal 2013, our homebuilding and financial services operating results improved significantly, with pre-tax income margin increasing 490 basis points to 10.5% from 5.6% last year. In addition, consolidated revenues increased 44% to $6.3 billion for the year, resulting in a 171% increase in pre-tax income to $657.8 million. The number of homes sold, closed and in backlog all increased by double-digit percentages compared to fiscal 2012. Our average sales price increased 15% to $261,400, reflecting increased demand from move-up buyers in addition to pricing power across many of our markets.

“We are well-positioned to continue to profitably grow our operations during the recovery with a strong balance sheet, good liquidity and sufficient inventories of homes and finished lots. Fiscal 2014 is off to a strong start with a beginning backlog of 8,205 homes valued at $2.2 billion and increased year-over-year net sales in October.”

The Company will host a conference call today (Tuesday, November 12^th) at 10:00 a.m. Eastern time. The dial-in number is 877-407-8033, and the call will also be webcast from www.drhorton.com on the “Investors” page.

D.R. Horton, Inc., America’s Builder, is the largest homebuilder in the United States, based on its 24,155 homes closed during its fiscal year ended September 30, 2013. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 78 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 $100,000 to over $1,000,000. 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 that we are well-positioned to continue to profitably grow our operations during the recovery with a strong balance sheet, good liquidity and sufficient inventories of homes and finished lots and that fiscal 2014 is off to a strong start with a beginning backlog of 8,205 homes valued at $2.2 billion and increased year-over-year net sales in October. 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: potential deterioration in homebuilding industry conditions and the current weak U.S. economy; the cyclical nature of the homebuilding industry and changes in economic, real estate and other conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing and the liquidity provided by government-sponsored enterprises, the effects of government 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 and lot inventory; home warranty and construction defect claims; supply shortages and other risks of acquiring land, building materials and skilled labor; 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 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 the homebuilding and financial services industries; our ability to effect any future growth strategies or acquisitions successfully; the effects of the loss of key personnel; the impact of an inflationary or deflationary environment; our ability to realize the full amount of our deferred income tax assets; and information technology failures and data security breaches. 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 our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.

WEBSITE ADDRESS: www.drhorton.com

Source: D.R. Horton, Inc.

D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Vice President of Communications