FORT WORTH, TEXAS, Nov 25, 2008 (BUSINESS WIRE) -- D.R. Horton, Inc. (NYSE:DHI), America's Builder, today reported results
for its fourth quarter and fiscal year ended September 30, 2008. Home
sales revenue for the fourth quarter of fiscal 2008 totaled $1.5 billion
on 6,961 homes closed, compared to $3.0 billion on 11,733 homes closed
in the same quarter of fiscal 2007. Land and lot sales revenue in the
fourth quarter totaled $209.2 million, compared to $154.8 million in the
same quarter of fiscal 2007. Approximately 32,000 lots were sold during
the quarter, of which 55% were undeveloped, 20% were partially developed
and 25% were fully developed. The Company owned approximately 99,000
lots at September 30, 2008.
Pre-tax charges to cost of sales in the fourth quarter included $364.7
million in impairment charges for owned inventory, $624.2 million in
impairment charges for land and lots that were sold during the quarter
and $85.7 million for write-offs of deposits and pre-acquisition costs
related to land option contracts that the Company does not intend to
pursue. Additionally, pre-tax goodwill impairment charges for the fourth
quarter totaled $79.4 million. For the fourth quarter of fiscal 2008,
the Company reported a net loss of $799.9 million or $2.53 per diluted
share, which reflects a tax benefit of $365.3 million. The net loss for
the same quarter of fiscal 2007 was $50.1 million or $0.16 per diluted
share.
For the fiscal year ended September 30, 2008, the Company reported home
sales revenue of $6.2 billion on 26,396 homes closed, compared to $10.7
billion in fiscal 2007 on 41,370 homes closed. Land and lot sales
revenue in fiscal 2008 totaled $354.3 million, compared to $367.6
million in fiscal 2007.
Pre-tax charges to cost of sales in fiscal 2008 included $2.4 billion in
inventory impairment charges and $111.9 million in write-offs of
deposits and pre-acquisition costs related to land option contracts that
the Company does not intend to pursue. Additionally, pre-tax goodwill
impairment charges for the fiscal year totaled $79.4 million. For fiscal
2008, the Company reported a net loss totaling $2.6 billion, or $8.34
per diluted share. The net loss for fiscal 2007 was $712.5 million or
$2.27 per diluted share.
The Company's sales backlog of homes under contract at September 30,
2008 was 5,297 homes ($1.2 billion), compared to 10,442 homes ($2.7
billion) at September 30, 2007. Net sales orders for the fourth quarter
ended September 30, 2008 totaled 3,977 homes ($852.3 million), compared
to 6,374 homes ($1.3 billion) for the same quarter of fiscal 2007. The
Company's cancellation rate (cancelled sales orders divided by gross
sales orders) for the fourth quarter of fiscal 2008 was 47%. Net sales
orders for fiscal 2008 were 21,251 homes ($4.7 billion), compared to
33,687 homes ($8.2 billion) for fiscal 2007.
The Company's homebuilding cash balance at September 30, 2008 was $1.4
billion, and the Company expects to receive a federal income tax refund
of $622 million in December 2008. Net cash provided by operating
activities for fiscal 2008 was $1.9 billion, compared to $1.4 billion in
fiscal 2007.
In the fourth quarter, the Company repurchased a total of $36.7 million
principal amount of its outstanding notes for a total purchase price of
$36.7 million, plus accrued interest. Subsequent to September 30, 2008,
the Company has repurchased a total of $102.9 million principal amount
of its outstanding notes for a total purchase price of $98.2 million,
plus accrued interest.
The Company has declared a quarterly cash dividend of $0.0375 per share.
The dividend is payable on December 18, 2008 to stockholders of record
on December 8, 2008.
Donald R. Horton, Chairman of the Board, said, "Market conditions
in the homebuilding industry deteriorated during our fourth fiscal
quarter and October, characterized by rising foreclosures, high
inventory levels of both new and existing homes, increasing unemployment
and eroding consumer confidence. We continue to adjust our business to
the current homebuilding environment by reducing our homes under
construction and our owned lot position, controlling costs and repaying
debt.
"We have generated positive cash flow from operations in each of the
past nine quarters, 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 our expected $622 million tax refund."
The Company will host a conference call today (Tuesday, November 25th)
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.
During the fourth quarter, the Company changed its operating segments
from operating regions to operating divisions. As a result of this
change, the composition of the Company's reporting segments was also
revised. The California markets, which were previously presented as a
separate reporting segment, are now included in the West reporting
segment. Additionally, the Salt Lake City, Utah market, which was
previously included in the Southwest reporting segment, is now included
in the West reporting segment. The name of the Northeast reporting
segment has been changed to the East reporting segment, although the
markets comprising it remain the same. All prior year segment
information has been restated to conform to the fiscal 2008
presentation. The changes in reporting segments have no effect on the
Company's consolidated financial position, results of operations or cash
flows for the periods presented.
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 continuing to reduce our homes under construction
and our owned lot position, controlling costs and repaying debt. 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 our expected $622 million tax refund. 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; 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
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Fiscal Year Ended
September 30, September 30,
2008 2007 2008 2007
(In millions, except per share data)
Homebuilding:
Revenues:
Home sales $ 1,544.5 $ 2,968.2 $ 6,164.3 $ 10,721.2
Land/lot sales 209.2 154.8 354.3 367.6
1,753.7 3,123.0 6,518.6 11,088.8
Cost of sales:
Home sales 1,376.0 2,492.3 5,473.1 8,872.3
Land/lot sales 206.1 95.6 324.2 283.3
Inventory impairments and land option cost write-offs 1,074.6 318.6 2,484.5 1,329.5
2,656.7 2,906.5 8,281.8 10,485.1
Gross profit (loss):
Home sales 168.5 475.9 691.2 1,848.9
Land/lot sales 3.1 59.2 30.1 84.3
Inventory impairments and land option cost write-offs (1,074.6 ) (318.6 ) (2,484.5 ) (1,329.5 )
(903.0 ) 216.5 (1,763.2 ) 603.7
Selling, general and administrative expense 175.7 282.6 791.8 1,141.5
Goodwill impairment 79.4 48.5 79.4 474.1
Interest expense 16.1 - 39.0 -
Loss on early retirement of debt - - 2.6 12.1
Other expense (income) (2.1 ) 1.7 (9.1 ) (4.0 )
Operating loss from Homebuilding (1,172.1 ) (116.3 ) (2,666.9 ) (1,020.0 )
Financial Services:
Revenues 28.7 49.4 127.5 207.7
General and administrative expense 23.7 34.4 100.1 153.8
Interest expense 1.0 3.1 3.7 23.6
Interest and other income (2.9 ) (4.2 ) (11.4 ) (38.5 )
Operating income from Financial Services 6.9 16.1 35.1 68.8
Loss before income taxes (1,165.2 ) (100.2 ) (2,631.8 ) (951.2 )
Provision for (benefit from) income taxes (365.3 ) (50.1 ) 1.8 (238.7 )
Net loss $ (799.9 ) $ (50.1 ) $ (2,633.6 ) $ (712.5 )
Basic and Diluted:
Net loss per share $ (2.53 ) $ (0.16 ) $ (8.34 ) $ (2.27 )
Weighted average number of common shares 316.6 314.8 315.7 314.1
Other Consolidated Financial Data:
Interest amortized to home and land/lot cost of sales $ 49.8 $ 48.7 $ 227.9 $ 220.3
Depreciation and amortization $ 11.1 $ 16.1 $ 53.2 $ 64.4
Interest incurred $ 59.8 $ 74.9 $ 240.4 $ 327.8
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of September 30,
2008 2007
ASSETS (In millions)
Homebuilding:
Cash and cash equivalents $ 1,355.6 $ 228.3
Inventories:
Construction in progress and finished homes 1,681.6 3,346.8
Residential land and lots - developed and under development 2,409.6 5,334.7
Land held for development 531.7 540.1
Land inventory not owned 60.3 121.9
4,683.2 9,343.5
Property and equipment, net 65.9 110.2
Income taxes receivable 676.2 -
Deferred income taxes, net of valuation allowance of $961.3 million
and $4.7 million at September 30, 2008 and 2007, respectively 213.5 863.8
Earnest money deposits and other assets 247.5 291.2
Goodwill 15.9 95.3
7,257.8 10,932.3
Financial Services:
Cash and cash equivalents 31.7 41.3
Mortgage loans held for sale 352.1 523.5
Other assets 68.0 59.2
451.8 624.0
$ 7,709.6 $ 11,556.3
LIABILITIES
Homebuilding:
Accounts payable $ 254.0 $ 566.2
Accrued expenses and other liabilities 814.9 933.3
Notes payable 3,544.9 3,989.0
4,613.8 5,488.5
Financial Services:
Accounts payable and other liabilities 27.5 24.7
Repurchase agreement and notes payable 203.5 387.8
231.0 412.5
4,844.8 5,901.0
Minority interests 30.5 68.4
STOCKHOLDERS' EQUITY
Common stock 3.2 3.2
Additional capital 1,716.3 1,693.3
Retained earnings 1,210.5 3,986.1
Treasury stock, at cost (95.7 ) (95.7 )
2,834.3 5,586.9
$ 7,709.6 $ 11,556.3
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Fiscal Year Ended
September 30,
2008 2007
(In millions)
Operating Activities
Net loss $ (2,633.6 ) $ (712.5 )
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 53.2 64.4
Amortization of debt discounts and fees 7.2 6.6
Stock option compensation expense 13.5 12.4
Income tax benefit from stock option exercises - (9.9 )
Deferred income taxes 650.3 (489.0 )
Loss on early retirement of debt 2.6 12.1
Inventory impairments and land option cost write-offs 2,484.5 1,329.5
Goodwill impairment 79.4 474.1
Changes in operating assets and liabilities:
Decrease in construction in progress and finished homes 1,304.6 657.8
Decrease in residential land and lots -- developed, under
development, and held for development 835.1 79.8
(Increase) decrease in earnest money deposits and other assets (4.4 ) 123.3
Increase in income taxes receivable (676.2 ) -
Decrease in mortgage loans held for sale 171.4 499.4
Decrease in accounts payable, accrued expenses and other liabilities (407.7 ) (692.5 )
Net cash provided by operating activities 1,879.9 1,355.5
Investing Activities
Purchases of property and equipment (6.6 ) (39.8 )
Cash used in investing activities (6.6 ) (39.8 )
Financing Activities
Proceeds from notes payable and repurchase agreement 321.5 2,980.0
Repayment of notes payable and repurchase agreement (944.6 ) (4,696.2 )
Decrease in restricted cash - 248.3
Proceeds from stock associated with certain employee benefit plans 9.5 12.7
Income tax benefit from stock option exercises - 9.9
Cash dividends paid (142.0 ) (188.4 )
Net cash used in financing activities (755.6 ) (1,633.7 )
Increase (Decrease) in Cash and Cash Equivalents 1,117.7 (318.0 )
Cash and cash equivalents at beginning of year 269.6 587.6
Cash and cash equivalents at end of year $ 1,387.3 $ 269.6
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended September 30, Fiscal Year Ended September 30,
2008 2007 2008 2007
Homes Value Homes Value Homes Value Homes Value
East 377 $ 80.6 558 $ 123.2 1,602 $ 396.3 3,085 $ 792.3
Midwest 488 93.7 481 141.1 1,633 425.3 3,065 887.0
Southeast 649 129.2 905 169.4 3,235 637.6 5,206 1,130.4
South Central 1,370 245.1 2,542 441.4 7,266 1,293.3 9,740 1,723.5
Southwest 129 25.9 1,088 188.4 2,982 551.6 6,017 1,140.7
West 964 277.8 800 246.0 4,533 1,373.1 6,574 2,556.7
3,977 $ 852.3 6,374 $ 1,309.5 21,251 $ 4,677.2 33,687 $ 8,230.6
HOMES CLOSED
Three Months Ended September 30, Fiscal Year Ended September 30,
2008 2007 2008 2007
Homes Value Homes Value Homes Value Homes Value
East 572 $ 139.0 1,170 $ 301.7 2,309 $ 584.8 4,119 $ 1,072.9
Midwest 603 134.0 983 292.1 1,905 525.8 3,502 1,037.1
Southeast 875 181.0 1,659 378.3 3,650 781.6 6,156 1,454.6
South Central 2,103 378.2 3,324 586.5 7,960 1,430.1 11,260 2,005.2
Southwest 1,260 235.3 2,413 548.9 5,309 1,066.5 8,149 1,839.2
West 1,548 477.0 2,184 860.7 5,263 1,775.5 8,184 3,312.2
6,961 $ 1,544.5 11,733 $ 2,968.2 26,396 $ 6,164.3 41,370 $ 10,721.2
SALES ORDER BACKLOG
As of September 30,
2008 2007
Homes Value Homes Value
East 487 $ 118.2 1,194 $ 306.6
Midwest 328 91.6 600 192.1
Southeast 783 165.7 1,198 309.6
South Central 1,999 359.4 2,693 496.2
Southwest 812 170.6 3,139 685.5
West 888 301.9 1,618 704.4
5,297 $ 1,207.4 10,442 $ 2,694.4
SOURCE:
D.R. Horton, Inc.
D.R. Horton, Inc.
Stacey Dwyer, EVP, 817-390-8200
