Table of Contents
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 75-2386963 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
301 Commerce Street, Suite 500, Fort Worth, Texas | 76102 | |
(Address of principal executive offices) | (Zip Code) |
Table of Contents
June 30, | September 30, | |||||||
2005 | 2004 | |||||||
(In millions) | ||||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Homebuilding: | ||||||||
Cash and cash equivalents | $ | 109.8 | $ | 480.1 | ||||
Inventories: | ||||||||
Construction in progress and finished homes | 3,945.3 | 2,878.5 | ||||||
Residential lots — developed and under development | 4,485.6 | 3,529.0 | ||||||
Land held for development | 6.3 | 6.2 | ||||||
Consolidated land inventory not owned | 185.2 | 153.7 | ||||||
8,622.4 | 6,567.4 | |||||||
Property and equipment (net) | 97.8 | 91.9 | ||||||
Earnest money deposits and other assets | 706.7 | 576.6 | ||||||
Goodwill | 578.9 | 578.9 | ||||||
10,115.6 | 8,294.9 | |||||||
Financial Services: | ||||||||
Cash and cash equivalents | 62.0 | 37.9 | ||||||
Mortgage loans held for sale | 828.7 | 623.3 | ||||||
Other assets | 38.2 | 29.1 | ||||||
928.9 | 690.3 | |||||||
$ | 11,044.5 | $ | 8,985.2 | |||||
LIABILITIES | ||||||||
Homebuilding: | ||||||||
Accounts payable | $ | 722.6 | $ | 585.2 | ||||
Accrued expenses and other liabilities | 929.3 | 756.9 | ||||||
Notes payable | 3,654.7 | 3,006.5 | ||||||
5,306.6 | 4,348.6 | |||||||
Financial Services: | ||||||||
Accounts payable and other liabilities | 16.8 | 16.8 | ||||||
Notes payable to financial institutions | 708.4 | 492.7 | ||||||
725.2 | 509.5 | |||||||
6,031.8 | 4,858.1 | |||||||
Minority interests | 192.4 | 166.4 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, $.10 par value, 30,000,000 shares authorized, no shares issued | — | — | ||||||
Common stock, $.01 par value, 400,000,000 shares authorized, 315,328,863 shares issued and 312,676,063 shares outstanding at June 30, 2005 and 236,028,696 shares issued and 233,375,896 shares outstanding at September 30, 2004 | 3.2 | 2.4 | ||||||
Additional capital | 1,620.3 | 1,599.9 | ||||||
Retained earnings | 3,255.7 | 2,417.3 | ||||||
Treasury stock, 2,652,800 shares at June 30, 2005 and September 30, 2004, at cost | (58.9 | ) | (58.9 | ) | ||||
4,820.3 | 3,960.7 | |||||||
$ | 11,044.5 | $ | 8,985.2 | |||||
-3-
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Homebuilding: | ||||||||||||||||
Revenues: | ||||||||||||||||
Home sales | $ | 3,277.1 | $ | 2,695.5 | $ | 8,432.9 | $ | 7,080.7 | ||||||||
Land/lot sales | 32.4 | 46.2 | 177.5 | 117.8 | ||||||||||||
3,309.5 | 2,741.7 | 8,610.4 | 7,198.5 | |||||||||||||
Cost of sales: | ||||||||||||||||
Home sales | 2,413.7 | 2,086.8 | 6,279.8 | 5,490.0 | ||||||||||||
Land/lot sales | 17.0 | 29.1 | 105.4 | 72.4 | ||||||||||||
2,430.7 | 2,115.9 | 6,385.2 | 5,562.4 | |||||||||||||
Gross profit: | ||||||||||||||||
Home sales | 863.4 | 608.7 | 2,153.1 | 1,590.7 | ||||||||||||
Land/lot sales | 15.4 | 17.1 | 72.1 | 45.4 | ||||||||||||
878.8 | 625.8 | 2,225.2 | 1,636.1 | |||||||||||||
Selling, general and administrative expense | 302.0 | 244.3 | 826.7 | 679.5 | ||||||||||||
Interest expense | — | — | — | 3.3 | ||||||||||||
Other (income) | (0.5 | ) | (7.4 | ) | (11.4 | ) | (7.1 | ) | ||||||||
577.3 | 388.9 | 1,409.9 | 960.4 | |||||||||||||
Financial Services: | ||||||||||||||||
Revenues | 60.7 | 48.7 | 156.5 | 131.7 | ||||||||||||
General and administrative expense | 38.5 | 32.2 | 105.1 | 83.8 | ||||||||||||
Interest expense | 4.1 | 1.6 | 9.1 | 4.0 | ||||||||||||
Other (income) | (9.0 | ) | (4.8 | ) | (22.0 | ) | (12.7 | ) | ||||||||
27.1 | 19.7 | 64.3 | 56.6 | |||||||||||||
INCOME BEFORE INCOME TAXES | 604.4 | 408.6 | 1,474.2 | 1,017.0 | ||||||||||||
Provision for income taxes | 232.7 | 157.3 | 567.5 | 391.5 | ||||||||||||
NET INCOME | $ | 371.7 | $ | 251.3 | $ | 906.7 | $ | 625.5 | ||||||||
Basic net income per common share | $ | 1.19 | $ | 0.81 | $ | 2.91 | $ | 2.02 | ||||||||
Net income per common share assuming dilution | $ | 1.17 | $ | 0.80 | $ | 2.85 | $ | 1.98 | ||||||||
Cash dividends declared per common share | $ | 0.09 | $ | 0.06 | $ | 0.2175 | $ | 0.155 | ||||||||
-4-
Table of Contents
Nine Months | ||||||||
Ended June 30, | ||||||||
2005 | 2004 | |||||||
(In millions) | ||||||||
(Unaudited) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 906.7 | $ | 625.5 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 39.2 | 34.4 | ||||||
Amortization of debt premiums, discounts and fees | 3.1 | 5.0 | ||||||
Changes in operating assets and liabilities: | ||||||||
Increase in inventories | (2,003.8 | ) | (1,334.1 | ) | ||||
Increase in earnest money deposits and other assets | (133.3 | ) | (39.6 | ) | ||||
(Increase) decrease in mortgage loans held for sale | (205.4 | ) | 71.9 | |||||
Increase in accounts payable and other liabilities | 292.6 | 73.9 | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (1,100.9 | ) | (563.0 | ) | ||||
INVESTING ACTIVITIES | ||||||||
Net purchases of property and equipment | (44.7 | ) | (39.3 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (44.7 | ) | (39.3 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Proceeds from notes payable | 2,344.0 | 2,313.9 | ||||||
Repayment of notes payable | (1,497.8 | ) | (2,017.7 | ) | ||||
Proceeds from stock associated with certain employee benefit plans | 21.5 | 11.5 | ||||||
Cash dividends paid | (68.3 | ) | (48.2 | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 799.4 | 259.5 | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS | (346.2 | ) | (342.8 | ) | ||||
Cash and cash equivalents at beginning of period | 518.0 | 582.9 | ||||||
Cash and cash equivalents at end of period | $ | 171.8 | $ | 240.1 | ||||
Supplemental disclosures of noncash activities: | ||||||||
Notes payable issued for inventory | $ | 17.8 | $ | 63.8 | ||||
-5-
Table of Contents
-6-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Denominator for basic earnings per share— weighted average common shares | 312.4 | 310.7 | 312.0 | 310.3 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Employee stock options | 5.9 | 5.4 | 5.8 | 5.7 | ||||||||||||
Denominator for diluted earnings per share— adjusted weighted average common shares | 318.3 | 316.1 | 317.8 | 316.0 | ||||||||||||
-7-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
June 30, | September 30, | |||||||
2005 | 2004 | |||||||
(In millions) | ||||||||
Homebuilding: | ||||||||
Unsecured: | ||||||||
Revolving credit facility due 2008 | $ | 50.0 | $ | — | ||||
10.5% senior notes due 2005, net | — | 199.9 | ||||||
7.5% senior notes due 2007 | 215.0 | 215.0 | ||||||
5% senior notes due 2009, net | 199.6 | 199.5 | ||||||
8% senior notes due 2009, net | 384.0 | 383.8 | ||||||
9.375% senior notes due 2009, net | 241.5 | 242.5 | ||||||
9.75% senior subordinated notes due 2010, net | 149.2 | 149.2 | ||||||
4.875% senior notes due 2010, net | 248.6 | — | ||||||
7.875% senior notes due 2011, net | 198.8 | 198.7 | ||||||
9.375% senior subordinated notes due 2011, net | 199.8 | 199.8 | ||||||
10.5% senior subordinated notes due 2011, net | 150.4 | 150.9 | ||||||
8.5% senior notes due 2012, net | 248.4 | 248.3 | ||||||
6.875% senior notes due 2013 | 200.0 | 200.0 | ||||||
5.875% senior notes due 2013 | 100.0 | 100.0 | ||||||
6.125% senior notes due 2014, net | 197.3 | 197.2 | ||||||
5.625% senior notes due 2014, net | 248.1 | 247.9 | ||||||
5.25% senior notes due 2015, net | 297.8 | — | ||||||
5.625% senior notes due 2016, net | 297.4 | — | ||||||
Other secured | 28.8 | 73.8 | ||||||
$ | 3,654.7 | $ | 3,006.5 | |||||
Financial Services: | ||||||||
Mortgage warehouse facility due 2006 | $ | 308.4 | $ | 267.7 | ||||
Commercial paper conduit facility due 2006 | 400.0 | 225.0 | ||||||
$ | 708.4 | $ | 492.7 | |||||
-8-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
-9-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Capitalized interest, beginning of period | $ | 189.7 | $ | 175.4 | $ | 152.7 | $ | 168.4 | ||||||||
Interest incurred – homebuilding | 68.8 | 59.7 | 204.7 | 177.7 | ||||||||||||
Interest expensed: | ||||||||||||||||
Directly – homebuilding | — | — | — | (3.3 | ) | |||||||||||
Amortized to cost of sales | (59.7 | ) | (65.4 | ) | (158.6 | ) | (173.1 | ) | ||||||||
Capitalized interest, end of period | $ | 198.8 | $ | 169.7 | $ | 198.8 | $ | 169.7 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions) | ||||||||||||||||
Warranty reserve, beginning of period | $ | 100.9 | $ | 79.7 | $ | 96.0 | $ | 73.1 | ||||||||
Warranties issued | 17.2 | 14.0 | 44.5 | 36.9 | ||||||||||||
Changes in reserves for pre-existing warranties | (1.2 | ) | (5.9 | ) | (3.3 | ) | (9.2 | ) | ||||||||
Settlements made | (10.9 | ) | (7.8 | ) | (31.2 | ) | (20.8 | ) | ||||||||
Warranty reserve, end of period | $ | 106.0 | $ | 80.0 | $ | 106.0 | $ | 80.0 | ||||||||
-10-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In millions, except per share data) | ||||||||||||||||
Net income as reported | $ | 371.7 | $ | 251.3 | $ | 906.7 | $ | 625.5 | ||||||||
Add: Stock-based employee compensation expense included in reported net income, net of tax | — | 0.3 | — | 1.0 | ||||||||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method, net of tax | (1.9 | ) | (2.0 | ) | (5.9 | ) | (4.8 | ) | ||||||||
Pro forma net income | $ | 369.8 | $ | 249.6 | $ | 900.8 | $ | 621.7 | ||||||||
Reported basic earnings per share | $ | 1.19 | $ | 0.81 | $ | 2.91 | $ | 2.02 | ||||||||
Pro forma basic earnings per share | $ | 1.18 | $ | 0.80 | $ | 2.89 | $ | 2.00 | ||||||||
Reported diluted earnings per share | $ | 1.17 | $ | 0.80 | $ | 2.85 | $ | 1.98 | ||||||||
Pro forma diluted earnings per share | $ | 1.16 | $ | 0.79 | $ | 2.83 | $ | 1.97 | ||||||||
-11-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Year Ended September 30, | ||||||||||||
2003 | 2002 | 2001 | ||||||||||
Reported diluted income per share before cumulative effect of change in accounting principle | $ | 2.05 | $ | 1.44 | $ | 1.10 | ||||||
Per share effect of adoption of EITF 04-8 | (0.06 | ) | (0.05 | ) | (0.03 | ) | ||||||
Adjusted diluted income per share before cumulative effect of change in accounting principle | $ | 1.99 | $ | 1.39 | $ | 1.07 | ||||||
Reported diluted net income per share | $ | 2.05 | $ | 1.44 | $ | 1.11 | ||||||
Per share effect of adoption of EITF 04-8 | (0.06 | ) | (0.05 | ) | (0.03 | ) | ||||||
Adjusted diluted net income per share | $ | 1.99 | $ | 1.39 | $ | 1.08 | ||||||
-12-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
June 30, 2005
D.R. | Guarantor | Non-Guarantor | ||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 47.0 | $ | 58.7 | $ | 66.1 | $ | — | $ | 171.8 | ||||||||||
Advances to and investments in subsidiaries | 6,615.6 | 157.8 | — | (6,773.4 | ) | — | ||||||||||||||
Inventories | 2,121.0 | 6,291.5 | 209.9 | — | 8,622.4 | |||||||||||||||
Property and equipment (net) | 13.0 | 68.3 | 16.5 | — | 97.8 | |||||||||||||||
Earnest money deposits and other assets | 304.7 | 367.9 | 72.3 | — | 744.9 | |||||||||||||||
Mortgage loans held for sale | — | — | 828.7 | — | 828.7 | |||||||||||||||
Goodwill | — | 578.9 | — | — | 578.9 | |||||||||||||||
Total Assets | $ | 9,101.3 | $ | 7,523.1 | $ | 1,193.5 | $ | (6,773.4 | ) | $ | 11,044.5 | |||||||||
LIABILITIES & EQUITY | ||||||||||||||||||||
Accounts payable and other liabilities | $ | 634.3 | $ | 980.4 | $ | 54.0 | $ | — | $ | 1,668.7 | ||||||||||
Advances from parent/subsidiaries | — | 4,535.1 | 91.3 | (4,626.4 | ) | — | ||||||||||||||
Notes payable | 3,646.7 | 8.0 | 708.4 | — | 4,363.1 | |||||||||||||||
Total Liabilities | 4,281.0 | 5,523.5 | 853.7 | (4,626.4 | ) | 6,031.8 | ||||||||||||||
Minority interests | — | — | 192.4 | — | 192.4 | |||||||||||||||
Total Equity | 4,820.3 | 1,999.6 | 147.4 | (2,147.0 | ) | 4,820.3 | ||||||||||||||
Total Liabilities & Equity | $ | 9,101.3 | $ | 7,523.1 | $ | 1,193.5 | $ | (6,773.4 | ) | $ | 11,044.5 | |||||||||
-13-
Table of Contents
D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
NOTE K — SUMMARIZED FINANCIAL INFORMATION — (Continued)
Consolidating Balance Sheet
September 30, 2004
D.R. | Guarantor | Non-Guarantor | ||||||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 338.9 | $ | 131.6 | $ | 47.5 | $ | — | $ | 518.0 | ||||||||||||||
Advances to and investments in subsidiaries | 5,384.5 | 182.4 | — | (5,566.9 | ) | — | ||||||||||||||||||
Inventories | 1,487.6 | 4,894.4 | 185.4 | — | 6,567.4 | |||||||||||||||||||
Property and equipment (net) | 16.3 | 58.8 | 16.8 | — | 91.9 | |||||||||||||||||||
Earnest money deposits and other assets | 256.3 | 299.8 | 49.6 | — | 605.7 | |||||||||||||||||||
Mortgage loans held for sale | — | — | 623.3 | — | 623.3 | |||||||||||||||||||
Goodwill | — | 578.9 | — | — | 578.9 | |||||||||||||||||||
Total Assets | $ | 7,483.6 | $ | 6,145.9 | $ | 922.6 | $ | (5,566.9 | ) | $ | 8,985.2 | |||||||||||||
LIABILITIES & EQUITY | ||||||||||||||||||||||||
Accounts payable and other liabilities | $ | 537.1 | $ | 772.3 | $ | 49.5 | $ | — | $ | 1,358.9 | ||||||||||||||
Advances from parent/subsidiaries | — | 3,374.5 | 90.6 | (3,465.1 | ) | — | ||||||||||||||||||
Notes payable | 2,985.8 | 18.9 | 494.5 | — | 3,499.2 | |||||||||||||||||||
Total Liabilities | 3,522.9 | 4,165.7 | 634.6 | (3,465.1 | ) | 4,858.1 | ||||||||||||||||||
Minority interests | — | — | 166.4 | — | 166.4 | |||||||||||||||||||
Total Equity | 3,960.7 | 1,980.2 | 121.6 | (2,101.8 | ) | 3,960.7 | ||||||||||||||||||
Total Liabilities & Equity | $ | 7,483.6 | $ | 6,145.9 | $ | 922.6 | $ | (5,566.9 | ) | $ | 8,985.2 | |||||||||||||
-14-
Table of Contents
D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
NOTE K — SUMMARIZED FINANCIAL INFORMATION — (Continued)
Consolidating Statement of Income
Three Months Ended June 30, 2005
D.R. | Guarantor | Non-Guarantor | |||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Homebuilding: | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Home sales | $ | 743.1 | $ | 2,528.7 | $ | 5.3 | $ | — | $ | 3,277.1 | |||||||||||
Land/lot sales | 14.4 | 18.0 | — | — | 32.4 | ||||||||||||||||
757.5 | 2,546.7 | 5.3 | — | 3,309.5 | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||
Home sales | 496.2 | 1,913.7 | 3.8 | — | 2,413.7 | ||||||||||||||||
Land/lot sales | 6.7 | 10.3 | — | — | 17.0 | ||||||||||||||||
502.9 | 1,924.0 | 3.8 | — | 2,430.7 | |||||||||||||||||
Gross profit: | |||||||||||||||||||||
Home sales | 246.9 | 615.0 | 1.5 | — | 863.4 | ||||||||||||||||
Land/lot sales | 7.7 | 7.7 | — | — | 15.4 | ||||||||||||||||
254.6 | �� | 622.7 | 1.5 | — | 878.8 | ||||||||||||||||
Selling, general and administrative expense | 121.8 | 174.5 | 1.8 | 3.9 | 302.0 | ||||||||||||||||
Other (income) expense | (471.6 | ) | (0.5 | ) | (0.5 | ) | 472.1 | (0.5 | ) | ||||||||||||
604.4 | 448.7 | 0.2 | (476.0 | ) | 577.3 | ||||||||||||||||
Financial services: | |||||||||||||||||||||
Revenues | — | — | 60.7 | — | 60.7 | ||||||||||||||||
General and administrative expense | — | — | 42.4 | (3.9 | ) | 38.5 | |||||||||||||||
Interest expense | — | — | 4.1 | — | 4.1 | ||||||||||||||||
Other (income) | — | — | (9.0 | ) | — | (9.0 | ) | ||||||||||||||
— | — | 23.2 | 3.9 | 27.1 | |||||||||||||||||
Income before income taxes | 604.4 | 448.7 | 23.4 | (472.1 | ) | 604.4 | |||||||||||||||
Provision for income taxes | 232.7 | 172.9 | 8.9 | (181.8 | ) | 232.7 | |||||||||||||||
Net income | $ | 371.7 | $ | 275.8 | $ | 14.5 | $ | (290.3 | ) | $ | 371.7 | ||||||||||
-15-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
NOTE K — SUMMARIZED FINANCIAL INFORMATION — (Continued)
Consolidating Statement of Income
Nine Months Ended June 30, 2005
D.R. | Guarantor | Non-Guarantor | ||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Homebuilding: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Home sales | $ | 1,843.2 | $ | 6,551.6 | $ | 38.1 | $ | — | $ | 8,432.9 | ||||||||||
Land/lot sales | 119.1 | 58.4 | — | — | 177.5 | |||||||||||||||
1,962.3 | 6,610.0 | 38.1 | — | 8,610.4 | ||||||||||||||||
Cost of sales: | ||||||||||||||||||||
Home sales | 1,284.4 | 4,969.6 | 25.8 | — | 6,279.8 | |||||||||||||||
Land/lot sales | 75.1 | 30.3 | — | — | 105.4 | |||||||||||||||
1,359.5 | 4,999.9 | 25.8 | — | 6,385.2 | ||||||||||||||||
Gross profit: | ||||||||||||||||||||
Home sales | 558.8 | 1,582.0 | 12.3 | — | 2,153.1 | |||||||||||||||
Land/lot sales | 44.0 | 28.1 | — | — | 72.1 | |||||||||||||||
602.8 | 1,610.1 | 12.3 | — | 2,225.2 | ||||||||||||||||
Selling, general and administrative expense | 321.2 | 489.8 | 5.5 | 10.2 | 826.7 | |||||||||||||||
Other (income) expense | (1,192.6 | ) | (8.8 | ) | (0.6 | ) | 1,190.6 | (11.4 | ) | |||||||||||
1,474.2 | 1,129.1 | 7.4 | (1,200.8 | ) | 1,409.9 | |||||||||||||||
Financial services: | ||||||||||||||||||||
Revenues | — | — | 156.5 | — | 156.5 | |||||||||||||||
General and administrative expense | — | — | 115.3 | (10.2 | ) | 105.1 | ||||||||||||||
Interest expense | — | — | 9.1 | — | 9.1 | |||||||||||||||
Other (income) | — | — | (22.0 | ) | — | (22.0 | ) | |||||||||||||
— | — | 54.1 | 10.2 | 64.3 | ||||||||||||||||
Income before income taxes | 1,474.2 | 1,129.1 | 61.5 | (1,190.6 | ) | 1,474.2 | ||||||||||||||
Provision for income taxes | 567.5 | 434.9 | 23.5 | (458.4 | ) | 567.5 | ||||||||||||||
Net income | $ | 906.7 | $ | 694.2 | $ | 38.0 | $ | (732.2 | ) | $ | 906.7 | |||||||||
-16-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Three Months Ended June 30, 2004
D.R. | Guarantor | Non-Guarantor | |||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Homebuilding: | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Home sales | $ | 527.8 | $ | 2,121.1 | $ | 46.6 | $ | — | $ | 2,695.5 | |||||||||||
Land/lot sales | 2.3 | 43.9 | — | — | 46.2 | ||||||||||||||||
530.1 | 2,165.0 | 46.6 | — | 2,741.7 | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||
Home sales | 378.1 | 1,677.6 | 31.1 | — | 2,086.8 | ||||||||||||||||
Land/lot sales | 2.3 | 26.8 | — | — | 29.1 | ||||||||||||||||
380.4 | 1,704.4 | 31.1 | — | 2,115.9 | |||||||||||||||||
Gross profit: | |||||||||||||||||||||
Home sales | 149.7 | 443.5 | 15.5 | — | 608.7 | ||||||||||||||||
Land/lot sales | — | 17.1 | — | — | 17.1 | ||||||||||||||||
149.7 | 460.6 | 15.5 | — | 625.8 | |||||||||||||||||
Selling, general and administrative expense | 89.9 | 147.5 | 3.7 | 3.2 | 244.3 | ||||||||||||||||
Other (income) expense | (348.8 | ) | (3.6 | ) | 3.4 | 341.6 | (7.4 | ) | |||||||||||||
408.6 | 316.7 | 8.4 | (344.8 | ) | 388.9 | ||||||||||||||||
Financial services: | |||||||||||||||||||||
Revenues | — | — | 48.7 | — | 48.7 | ||||||||||||||||
General and administrative expense | — | — | 35.4 | (3.2 | ) | 32.2 | |||||||||||||||
Interest expense | — | — | 1.6 | — | 1.6 | ||||||||||||||||
Other (income) | — | — | (4.8 | ) | — | (4.8 | ) | ||||||||||||||
— | — | 16.5 | 3.2 | 19.7 | |||||||||||||||||
Income before income taxes | 408.6 | 316.7 | 24.9 | (341.6 | ) | 408.6 | |||||||||||||||
Provision for income taxes | 157.3 | 121.9 | 9.6 | (131.5 | ) | 157.3 | |||||||||||||||
Net income | $ | 251.3 | $ | 194.8 | $ | 15.3 | $ | (210.1 | ) | $ | 251.3 | ||||||||||
-17-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Nine Months Ended June 30, 2004
D.R. | Guarantor | Non-Guarantor | |||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||
(In millions) | |||||||||||||||||||||
Homebuilding: | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||
Home sales | $ | 1,273.4 | $ | 5,709.3 | $ | 98.0 | $ | — | $ | 7,080.7 | |||||||||||
Land/lot sales | 10.9 | 106.9 | — | — | 117.8 | ||||||||||||||||
1,284.3 | 5,816.2 | 98.0 | — | 7,198.5 | |||||||||||||||||
Cost of sales: | |||||||||||||||||||||
Home sales | 918.8 | 4,501.7 | 69.5 | — | 5,490.0 | ||||||||||||||||
Land/lot sales | 7.0 | 65.4 | — | — | 72.4 | ||||||||||||||||
925.8 | 4,567.1 | 69.5 | — | 5,562.4 | |||||||||||||||||
Gross profit: | |||||||||||||||||||||
Home sales | 354.6 | 1,207.6 | 28.5 | — | 1,590.7 | ||||||||||||||||
Land/lot sales | 3.9 | 41.5 | — | — | 45.4 | ||||||||||||||||
358.5 | 1,249.1 | 28.5 | — | 1,636.1 | |||||||||||||||||
Selling, general and administrative expense | 235.5 | 427.2 | 8.2 | 8.6 | 679.5 | ||||||||||||||||
Interest expense | 3.0 | — | 0.3 | — | 3.3 | ||||||||||||||||
Other (income) expense | (897.0 | ) | (7.2 | ) | 7.6 | 889.5 | (7.1 | ) | |||||||||||||
1,017.0 | 829.1 | 12.4 | (898.1 | ) | 960.4 | ||||||||||||||||
Financial services: | |||||||||||||||||||||
Revenues | — | — | 131.7 | — | 131.7 | ||||||||||||||||
General and administrative expense | — | — | 92.4 | (8.6 | ) | 83.8 | |||||||||||||||
Interest expense | — | — | 4.0 | — | 4.0 | ||||||||||||||||
Other (income) | — | — | (12.7 | ) | — | (12.7 | ) | ||||||||||||||
— | — | 48.0 | 8.6 | 56.6 | |||||||||||||||||
Income before income taxes | 1,017.0 | 829.1 | 60.4 | (889.5 | ) | 1,017.0 | |||||||||||||||
Provision for income taxes | 391.5 | 319.2 | 23.2 | (342.4 | ) | 391.5 | |||||||||||||||
Net income | $ | 625.5 | $ | 509.9 | $ | 37.2 | $ | (547.1 | ) | $ | 625.5 | ||||||||||
-18-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Nine Months Ended June 30, 2005
D.R. | Guarantor | Non-Guarantor | |||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | |||||||||||||||||
(In millions) | |||||||||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||||||
Net income | $ | 906.7 | $ | 694.2 | $ | 38.0 | $ | (732.2 | ) | $ | 906.7 | ||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||||||
Depreciation and amortization | 5.0 | 31.8 | 2.4 | — | 39.2 | ||||||||||||||||
Amortization of debt premiums, discounts and fees | 3.1 | — | — | — | 3.1 | ||||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||||||
(Increase) decrease in inventories | (624.6 | ) | (1,388.1 | ) | 8.9 | — | (2,003.8 | ) | |||||||||||||
Increase in earnest money deposits and other assets | (42.9 | ) | (67.3 | ) | (23.1 | ) | — | (133.3 | ) | ||||||||||||
Increase in mortgage loans held for sale | — | — | (205.4 | ) | — | (205.4 | ) | ||||||||||||||
Increase (decrease) in accounts payable and other liabilities | 87.6 | 208.0 | (3.0 | ) | — | 292.6 | |||||||||||||||
Net cash provided by (used in) operating activities | 334.9 | (521.4 | ) | (182.2 | ) | (732.2 | ) | (1,100.9 | ) | ||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||||||
Net purchases of property and equipment | (2.2 | ) | (40.9 | ) | (1.6 | ) | — | (44.7 | ) | ||||||||||||
Net cash used in investing activities | (2.2 | ) | (40.9 | ) | (1.6 | ) | — | (44.7 | ) | ||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||||||
Net change in notes payable | 645.2 | (12.9 | ) | 213.9 | — | 846.2 | |||||||||||||||
(Decrease) increase in intercompany payables | (1,223.0 | ) | 1,177.3 | (11.5 | ) | 57.2 | — | ||||||||||||||
Proceeds from stock associated with certain employee benefit plans | 21.5 | — | — | — | 21.5 | ||||||||||||||||
Cash dividends/distributions paid | (68.3 | ) | (675.0 | ) | — | 675.0 | (68.3 | ) | |||||||||||||
Net cash (used in) provided by financing activities | (624.6 | ) | 489.4 | 202.4 | 732.2 | 799.4 | |||||||||||||||
(Decrease) increase in cash and cash equivalents | (291.9 | ) | (72.9 | ) | 18.6 | — | (346.2 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 338.9 | 131.6 | 47.5 | — | 518.0 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 47.0 | $ | 58.7 | $ | 66.1 | $ | — | $ | 171.8 | |||||||||||
-19-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
Nine Months Ended June 30, 2004
D.R. | Guarantor | Non-Guarantor | ||||||||||||||||||
Horton, Inc. | Subsidiaries | Subsidiaries | Eliminations | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||||||
Net income | $ | 625.5 | $ | 509.9 | $ | 37.2 | $ | (547.1 | ) | $ | 625.5 | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Depreciation and amortization | 5.9 | 26.0 | 2.5 | — | 34.4 | |||||||||||||||
Amortization of debt premiums, discounts and fees | 5.0 | — | — | — | 5.0 | |||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
(Increase) decrease in inventories | (310.1 | ) | (1,042.6 | ) | 18.6 | — | (1,334.1 | ) | ||||||||||||
Increase in earnest money deposits and other assets | (5.9 | ) | (32.8 | ) | (0.9 | ) | — | (39.6 | ) | |||||||||||
Decrease in mortgage loans held for sale | — | — | 71.9 | — | 71.9 | |||||||||||||||
(Decrease) increase in accounts payable and other liabilities | (44.6 | ) | 130.6 | (12.1 | ) | — | 73.9 | |||||||||||||
Net cash provided by (used in) operating activities | 275.8 | (408.9 | ) | 117.2 | (547.1 | ) | (563.0 | ) | ||||||||||||
INVESTING ACTIVITIES | ||||||||||||||||||||
Net purchases of property and equipment | (7.0 | ) | (29.5 | ) | (2.8 | ) | — | (39.3 | ) | |||||||||||
Net cash used in investing activities | (7.0 | ) | (29.5 | ) | (2.8 | ) | — | (39.3 | ) | |||||||||||
FINANCING ACTIVITIES | ||||||||||||||||||||
Net change in notes payable | 414.3 | (29.4 | ) | (88.7 | ) | — | 296.2 | |||||||||||||
(Decrease) increase in intercompany payables | (769.0 | ) | 751.6 | (29.7 | ) | 47.1 | — | |||||||||||||
Proceeds from stock associated with certain employee benefit plans | 11.5 | — | — | — | 11.5 | |||||||||||||||
Cash dividends/distributions paid | (48.2 | ) | (500.0 | ) | — | 500.0 | (48.2 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (391.4 | ) | 222.2 | (118.4 | ) | 547.1 | 259.5 | |||||||||||||
Decrease in cash and cash equivalents | (122.6 | ) | (216.2 | ) | (4.0 | ) | — | (342.8 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 196.1 | 319.0 | 67.8 | — | 582.9 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 73.5 | $ | 102.8 | $ | 63.8 | $ | — | $ | 240.1 | ||||||||||
-20-
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
June 30, 2005
-21-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Mortgage (M) | ||||
State | Region/Market | Title (T) | ||
Mid-Atlantic Region | ||||
Maryland | Baltimore | M | ||
Suburban Washington D.C. | M,T | |||
New Jersey | New Jersey | M,T | ||
North Carolina | Brunswick | |||
Charlotte | M | |||
Greensboro/Winston-Salem | M | |||
Raleigh/Durham | M | |||
Pennsylvania | Philadelphia | |||
York/Lancaster | ||||
South Carolina | Charleston | M | ||
Columbia | M | |||
Greenville | M | |||
Hilton Head | M | |||
Myrtle Beach | M | |||
Virginia | Northern Virginia | M,T | ||
Midwest Region | ||||
Illinois | Chicago | M | ||
Minnesota | Minneapolis/St. Paul | M,T | ||
Wisconsin | Kenosha | |||
Southeast Region | ||||
Alabama | Birmingham | M | ||
Huntsville | M | |||
Georgia | Atlanta | M,T | ||
Macon | ||||
Savannah | M | |||
Florida | Daytona Beach | M | ||
Fort Myers/Naples | M,T | |||
Jacksonville | M,T | |||
Melbourne | M | |||
Miami/West Palm Beach | M,T | |||
Orlando | M,T | |||
Tampa | M,T |
Mortgage (M) | ||||
State | Region/Market | Title (T) | ||
Southwest Region | ||||
Arizona | Casa Grande | M,T | ||
Phoenix | M,T | |||
Tucson | M | |||
New Mexico | Albuquerque | M | ||
Las Cruces | M | |||
Oklahoma | Oklahoma City | |||
Texas | Austin | M,T | ||
Dallas | M,T | |||
Fort Worth | M,T | |||
Houston | M,T | |||
Killeen/Temple | M | |||
Laredo | M | |||
Rio Grande Valley | M | |||
San Antonio | M,T | |||
Waco | M | |||
West Region | ||||
California | Bakersfield/Lancaster/Palmdale | M | ||
Fresno/Modesto | M | |||
Los Angeles County | M | |||
Oakland/North Bay | M | |||
Orange County | M | |||
Riverside/San Bernardino | M | |||
Sacramento | M | |||
San Diego County | M | |||
San Francisco | M | |||
San Jose/Pleasanton/East Bay | M | |||
Ventura County | M | |||
Colorado | Colorado Springs | M | ||
Denver | M | |||
Ft. Collins | M | |||
Hawaii | Hawaii | M | ||
Maui | M | |||
Oahu | M | |||
Nevada | Las Vegas | M,T | ||
Reno | M | |||
Oregon | Albany | |||
Bend | M | |||
Eugene | M | |||
Portland | M | |||
Utah | Salt Lake City | M | ||
Washington | Seattle/Tacoma | M | ||
Vancouver | M |
-22-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• | Net sales orders increased 29% to $4.1 billion | ||
• | Sales order backlog increased 36% to $7.0 billion | ||
• | Homebuilding revenue increased 21% to $3.3 billion | ||
• | Home sales gross profit margin improved 370 basis points to 26.3% | ||
• | Net income increased 48% to $371.7 million | ||
• | Diluted earnings per share increased 46% to $1.17 per share |
• | Net sales orders increased 27% to $10.9 billion | ||
• | Homebuilding revenue increased 20% to $8.6 billion | ||
• | Home sales gross profit margin improved 300 basis points to 25.5% | ||
• | Net income increased 45% to $906.7 million | ||
• | Diluted earnings per share increased 44% to $2.85 per share |
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
Homes Sold | Value (In millions) | Average Selling Price | ||||||||||||||||||||||||||||||||||
% | % | % | ||||||||||||||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | 2005 | 2004 | Change | ||||||||||||||||||||||||||||
Mid-Atlantic | 1,453 | 1,147 | 27 | % | $ | 381.6 | $ | 296.7 | 29 | % | $ | 262,600 | $ | 258,700 | 2 | % | ||||||||||||||||||||
Midwest | 952 | 586 | 62 | % | 254.5 | 162.2 | 57 | % | 267,300 | 276,800 | (3 | )% | ||||||||||||||||||||||||
Southeast | 2,346 | 1,739 | 35 | % | 577.3 | 394.1 | 46 | % | 246,100 | 226,600 | 9 | % | ||||||||||||||||||||||||
Southwest | 5,807 | 4,962 | 17 | % | 1,158.5 | 839.2 | 38 | % | 199,500 | 169,100 | 18 | % | ||||||||||||||||||||||||
West | 4,422 | 4,010 | 10 | % | 1,762.9 | 1,524.1 | 16 | % | 398,700 | 380,100 | 5 | % | ||||||||||||||||||||||||
14,980 | 12,444 | 20 | % | $ | 4,134.8 | $ | 3,216.3 | 29 | % | $ | 276,000 | $ | 258,500 | 7 | % | |||||||||||||||||||||
Nine Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
Homes Sold | Value (In millions) | Average Selling Price | ||||||||||||||||||||||||||||||||||
% | % | % | ||||||||||||||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | 2005 | 2004 | Change | ||||||||||||||||||||||||||||
Mid-Atlantic | 3,753 | 2,896 | 30 | % | $ | 1,004.7 | $ | 740.6 | 36 | % | $ | 267,700 | $ | 255,700 | 5 | % | ||||||||||||||||||||
Midwest | 2,258 | 1,617 | 40 | % | 603.8 | 462.5 | 31 | % | 267,400 | 286,000 | (7 | )% | ||||||||||||||||||||||||
Southeast | 6,079 | 4,670 | 30 | % | 1,485.8 | 1,010.7 | 47 | % | 244,400 | 216,400 | 13 | % | ||||||||||||||||||||||||
Southwest | 15,383 | 13,677 | 12 | % | 3,007.1 | 2,300.2 | 31 | % | 195,500 | 168,200 | 16 | % | ||||||||||||||||||||||||
West | 11,809 | 11,298 | 5 | % | 4,787.8 | 4,069.8 | 18 | % | 405,400 | 360,200 | 13 | % | ||||||||||||||||||||||||
39,282 | 34,158 | 15 | % | $ | 10,889.2 | $ | 8,583.8 | 27 | % | $ | 277,200 | $ | 251,300 | 10 | % | |||||||||||||||||||||
-23-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SALES ORDER BACKLOG | |||||||||||||||||||||||||||||||||||||
As of June 30, | |||||||||||||||||||||||||||||||||||||
Homes in Backlog | Value (In millions) | Average Selling Price | |||||||||||||||||||||||||||||||||||
% | % | % | |||||||||||||||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | 2005 | 2004 | Change | |||||||||||||||||||||||||||||
Mid-Atlantic | 2,812 | 1,861 | 51 | % | $ | 825.3 | $ | 523.5 | 58 | % | $ | 293,500 | $ | 281,300 | 4 | % | |||||||||||||||||||||
Midwest | 1,701 | 1,177 | 45 | % | 502.3 | 355.5 | 41 | % | 295,300 | 302,000 | (2 | )% | |||||||||||||||||||||||||
Southeast | 4,027 | 2,730 | 48 | % | 1,047.0 | 624.0 | 68 | % | 260,000 | 228,600 | 14 | % | |||||||||||||||||||||||||
Southwest | 8,543 | 7,415 | 15 | % | 1,796.9 | 1,280.8 | 40 | % | 210,300 | 172,700 | 22 | % | |||||||||||||||||||||||||
West | 6,833 | 6,348 | 8 | % | 2,853.2 | 2,372.7 | 20 | % | 417,600 | 373,800 | 12 | % | |||||||||||||||||||||||||
23,916 | 19,531 | 22 | % | $ | 7,024.7 | $ | 5,156.5 | 36 | % | $ | 293,700 | $ | 264,000 | 11 | % | ||||||||||||||||||||||
HOMES CLOSED | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
Homes Closed | Value (In millions) | Average Selling Price | |||||||||||||||||||||||||||||||||||
% | % | % | |||||||||||||||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | 2005 | 2004 | Change | |||||||||||||||||||||||||||||
Mid-Atlantic | 978 | 994 | (2 | )% | $ | 253.1 | $ | 226.0 | 12 | % | $ | 258,800 | $ | 227,400 | 14 | % | |||||||||||||||||||||
Midwest | 563 | 534 | 5 | % | 146.7 | 147.3 | — | % | 260,600 | 275,800 | (6 | )% | |||||||||||||||||||||||||
Southeast | 1,942 | 1,360 | 43 | % | 447.9 | 281.9 | 59 | % | 230,600 | 207,300 | 11 | % | |||||||||||||||||||||||||
Southwest | 4,819 | 4,565 | 6 | % | 892.8 | 769.3 | 16 | % | 185,300 | 168,500 | 10 | % | |||||||||||||||||||||||||
West | 3,967 | 3,597 | 10 | % | 1,536.6 | 1,271.0 | 21 | % | 387,300 | 353,400 | 10 | % | |||||||||||||||||||||||||
12,269 | 11,050 | 11 | % | $ | 3,277.1 | $ | 2,695.5 | 22 | % | $ | 267,100 | $ | 243,900 | 10 | % | ||||||||||||||||||||||
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
Homes Closed | Value (In millions) | Average Selling Price | |||||||||||||||||||||||||||||||||||
% | % | % | |||||||||||||||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | 2005 | 2004 | Change | |||||||||||||||||||||||||||||
Mid-Atlantic | 2,681 | 2,637 | 2 | % | $ | 671.6 | $ | 588.0 | 14 | % | $ | 250,500 | $ | 223,000 | 12 | % | |||||||||||||||||||||
Midwest | 1,418 | 1,421 | — | % | 371.2 | 385.8 | (4 | )% | 261,800 | 271,500 | (4 | )% | |||||||||||||||||||||||||
Southeast | 5,039 | 3,763 | 34 | % | 1,137.3 | 750.8 | 51 | % | 225,700 | 199,500 | 13 | % | |||||||||||||||||||||||||
Southwest | 13,472 | 12,938 | 4 | % | 2,405.5 | 2,140.3 | 12 | % | 178,600 | 165,400 | 8 | % | |||||||||||||||||||||||||
West | 9,940 | 9,356 | 6 | % | 3,847.3 | 3,215.8 | 20 | % | 387,100 | 343,700 | 13 | % | |||||||||||||||||||||||||
32,550 | 30,115 | 8 | % | $ | 8,432.9 | $ | 7,080.7 | 19 | % | $ | 259,100 | $ | 235,100 | 10 | % | ||||||||||||||||||||||
Percentages of Total Homebuilding Revenues | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Gross profit: | |||||||||||||||||
Home sales | 26.3 | % | 22.6 | % | 25.5 | % | 22.5 | % | |||||||||
Land/lot sales | 47.5 | % | 37.0 | % | 40.6 | % | 38.5 | % | |||||||||
Total homebuilding gross profit | 26.6 | % | 22.8 | % | 25.8 | % | 22.7 | % | |||||||||
Selling, general and administrative expense | 9.1 | % | 8.9 | % | 9.6 | % | 9.4 | % | |||||||||
Interest expense | — | % | — | % | — | % | — | % | |||||||||
Other (income) | — | % | (0.3 | )% | (0.1 | )% | (0.1 | )% | |||||||||
Income before income taxes | 17.4 | % | 14.2 | % | 16.4 | % | 13.3 | % |
-24-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-25-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-26-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||
% | % | |||||||||||||||||||||||
2005 | 2004 | Change | 2005 | 2004 | Change | |||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||
Loan origination fees | $ | 11.0 | $ | 9.4 | 17 | % | $ | 28.0 | $ | 24.7 | 13 | % | ||||||||||||
Sale of servicing rights and gains from sale of mortgages | 29.1 | 23.9 | 22 | % | 76.1 | 64.9 | 17 | % | ||||||||||||||||
Other revenues | 8.5 | 6.1 | 39 | % | 21.2 | 15.3 | 39 | % | ||||||||||||||||
Total mortgage banking revenues | 48.6 | 39.4 | 23 | % | 125.3 | 104.9 | 19 | % | ||||||||||||||||
Title policy premiums, net | 12.1 | 9.3 | 30 | % | 31.2 | 26.8 | 16 | % | ||||||||||||||||
Total revenues | 60.7 | 48.7 | 25 | % | 156.5 | 131.7 | 19 | % | ||||||||||||||||
General and administrative expense | 38.5 | 32.2 | 20 | % | 105.1 | 83.8 | 25 | % | ||||||||||||||||
Interest expense | 4.1 | 1.6 | 156 | % | 9.1 | 4.0 | 128 | % | ||||||||||||||||
Other (income) | (9.0 | ) | (4.8 | ) | 88 | % | (22.0 | ) | (12.7 | ) | 73 | % | ||||||||||||
Income before income taxes | $ | 27.1 | $ | 19.7 | 38 | % | $ | 64.3 | $ | 56.6 | 14 | % | ||||||||||||
Percentages of Total Financial Services Revenues | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
General and administrative expense | 63.4 | % | 66.1 | % | 67.2 | % | 63.6 | % | ||||||||
Interest expense | 6.8 | % | 3.3 | % | 5.8 | % | 3.0 | % | ||||||||
Other (income) | (14.8 | )% | (9.9 | )% | (14.1 | )% | (9.6 | )% | ||||||||
Income before income taxes | 44.6 | % | 40.5 | % | 41.1 | % | 43.0 | % |
-27-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-28-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-29-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-30-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Lots owned — developed and under development | 150,000 | |||
Lots controlled under lot option and similar contracts | 173,000 | |||
Total land/lots controlled | 323,000 | |||
Percentage controlled under option | 54% | |||
-31-
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- changes in general economic, real estate and other conditions; | |||
- changes in interest rates and the availability of mortgage financing; | |||
- the effects of governmental regulations and environmental matters; | |||
- the uncertainties inherent in warranty and product liability claims matters; | |||
- competitive conditions within our industry; | |||
- our substantial debt; | |||
- the availability of capital; and | |||
- our ability to effect our growth strategies successfully. |
-32-
Table of Contents
Three Months | |||||||||||||||||||||||||||||||||
Ending | Fair value | ||||||||||||||||||||||||||||||||
September 30, | Fiscal Year Ending September 30, | at | |||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | Thereafter | Total | 6/30/05 | ||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||||||
Fixed rate | $ | 249.9 | $ | 9.0 | $ | 3.5 | $ | 215.3 | $ | 586.0 | $ | 2,544.8 | $ | 3,608.5 | $ | 3,757.4 | |||||||||||||||||
Average interest rate | 8.4 | % | 7.5 | % | 5.6 | % | 7.6 | % | 7.3 | % | 7.0 | % | 7.2 | % | |||||||||||||||||||
Variable rate | $ | — | $ | 708.4 | $ | — | $ | 50.0 | $ | — | $ | — | $ | 758.4 | $ | 758.4 | |||||||||||||||||
Average interest rate | — | 4.0 | % | — | 4.6 | % | — | — | 4.1 | % | |||||||||||||||||||||||
Interest Rate Swaps: | |||||||||||||||||||||||||||||||||
Variable to fixed | $ | 200.0 | $ | 200.0 | $ | 200.0 | $ | 200.0 | $ | — | $ | — | $ | — | $ | 6.4 | |||||||||||||||||
Average pay rate | 5.1 | % | 5.1 | % | 5.1 | % | 5.0 | % | — | — | — | ||||||||||||||||||||||
Average receive rate | 90-day LIBOR |
-33-
Table of Contents
3.1 | Amended and Restated Certificate of Incorporation, as amended, of the Company is incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q/A, filed with the Commission on February 18, 2003. | |
3.1(a) | Amendment to Amended and Restated Certificate of Incorporation, as amended, of the Company, effective February 6, 2003, is incorporated by reference from Exhibit 3.1(a) to the Company’s Quarterly Report on Form 10-Q/A, filed with the Commission on February 18, 2003. | |
3.2 | Amended and Restated Bylaws of the Company are incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1998, filed with the Commission on February 16, 1999. | |
4.1 | Twenty-Fourth Supplemental Indenture, dated July 7, 2005, by and among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, as trustee, relating to the 5.375% Senior Notes due 2012 issued by the Company (1). | |
10.1 | Second Amendment to Amended and Restated Credit Agreement between DHI Mortgage Company, Ltd. and U.S. Bank National Association dated April 8, 2005 (2). | |
10.2* | Third Amendment to Amended and Restated Credit Agreement between DHI Mortgage Company, Ltd. and U.S. Bank National Association dated June 23, 2005. | |
10.3* | Seventh Omnibus Amendment, dated June 29, 2005, to Master Repurchase Agreement dated July 9, 2002, as amended, among CH Funding LLC. Calyon New York Branch (as successor in interest to Credit Lyonnais New York Branch), Atlantic Asset Securitization Corp., La Fayette Asset Securitization LLC, Falcon Asset Securitization Corporation, U.S. Bank National Bank Association, Lloyds TSB Bank PLC and DHI Mortgage Company, Ltd. | |
10.4* | Executive Compensation Summary — Named Executive Officers (COOs). | |
12.1* | Statement of Computation of Ratio of Earnings to Fixed Charges. | |
31.1* | Certificate of Chief Executive Officer provided pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certificate of Chief Financial Officer provided pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certificate provided pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Company’s Chief Executive Officer. | |
32.2* | Certificate provided pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Company’s Chief Financial Officer. |
* | Filed herewith | |
(1) | Incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K dated June 29, 2005 and filed with the SEC on July 6, 2005. | |
(2) | Incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated May 4, 2005 and filed with the SEC on May 4, 2005. |
-34-
Table of Contents
D.R. HORTON, INC. | ||||
Date: August 9, 2005 | By: | /s/ Bill W. Wheat | ||
Bill W. Wheat, on behalf of D.R. Horton, Inc., | ||||
as Executive Vice President and | ||||
Chief Financial Officer (Principal Financial and | ||||
Principal Accounting Officer) |
-35-