ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-2386963
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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301 Commerce Street, Suite 500,
Fort Worth, Texas
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76102
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Page
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December 31,
2012 |
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September 30,
2012 |
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(In millions)
(Unaudited)
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ASSETS
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Homebuilding:
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Cash and cash equivalents
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$
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546.4
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$
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1,030.4
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Marketable securities, available-for-sale
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96.7
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298.0
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Restricted cash
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54.8
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49.3
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Inventories:
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Construction in progress and finished homes
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1,909.5
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1,682.7
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Residential land and lots — developed and under development
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2,475.7
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1,838.4
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Land held for development
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629.9
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644.1
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5,015.1
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4,165.2
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Income taxes receivable
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—
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14.4
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Deferred income taxes, net of valuation allowance of $41.9 million
at December 31, 2012 and September 30, 2012
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683.5
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709.5
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Property and equipment, net
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81.9
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72.6
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Other assets
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454.2
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456.8
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Goodwill
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38.9
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38.9
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6,971.5
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6,835.1
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Financial Services:
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Cash and cash equivalents
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20.5
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17.3
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Mortgage loans held for sale
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307.9
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345.3
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Other assets
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47.4
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50.5
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375.8
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413.1
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Total assets
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$
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7,347.3
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$
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7,248.2
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LIABILITIES
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Homebuilding:
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Accounts payable
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$
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241.8
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$
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216.2
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Accrued expenses and other liabilities
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856.6
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893.8
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Notes payable
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2,424.3
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2,305.3
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3,522.7
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3,415.3
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Financial Services:
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Accounts payable and other liabilities
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42.1
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50.4
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Mortgage repurchase facility
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169.4
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187.8
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211.5
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238.2
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Total liabilities
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3,734.2
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3,653.5
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Commitments and contingencies (Note L)
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EQUITY
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Preferred stock, $.10 par value, 30,000,000 shares authorized, no shares issued
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—
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—
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Common stock, $.01 par value, 1,000,000,000 shares authorized, 328,464,422 shares issued and 321,264,351 shares outstanding at December 31, 2012 and 328,092,047 shares issued and 320,891,976 shares outstanding at September 30, 2012
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3.3
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3.3
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Additional paid-in capital
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1,992.2
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1,979.8
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Retained earnings
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1,749.2
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1,743.1
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Treasury stock, 7,200,071 shares at December 31, 2012 and September 30, 2012, at cost
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(134.3
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)
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(134.3
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)
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Accumulated other comprehensive income
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—
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0.2
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Total stockholders’ equity
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3,610.4
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3,592.1
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Noncontrolling interests
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2.7
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2.6
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Total equity
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3,613.1
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3,594.7
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Total liabilities and equity
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$
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7,347.3
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$
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7,248.2
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Three Months Ended
December 31, |
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2012
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2011
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(In millions, except per share data)
(Unaudited)
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Homebuilding:
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Revenues:
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Home sales
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$
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1,223.3
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$
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884.3
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Land/lot sales and other
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9.9
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1.3
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1,233.2
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885.6
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Cost of sales:
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Home sales
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992.8
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735.6
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Land/lot sales and other
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8.2
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—
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Inventory impairments and land option cost write-offs
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1.3
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1.4
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1,002.3
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737.0
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Gross profit:
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Home sales
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230.5
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148.7
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Land/lot sales and other
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1.7
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1.3
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Inventory impairments and land option cost write-offs
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(1.3
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(1.4
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)
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230.9
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148.6
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Selling, general and administrative expense
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140.8
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119.0
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Interest expense
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3.2
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6.9
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Gain on early retirement of debt, net
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—
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(0.1
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)
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Other (income)
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(3.3
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(2.2
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90.2
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25.0
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Financial Services:
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Revenues, net of recourse and reinsurance expense
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41.9
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21.0
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General and administrative expense
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25.7
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18.9
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Interest expense
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1.0
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0.9
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Interest and other (income)
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(2.5
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(3.0
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17.7
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4.2
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Income before income taxes
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107.9
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29.2
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Income tax expense
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41.6
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1.5
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Net income
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$
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66.3
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$
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27.7
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Other comprehensive income (loss), net of income tax:
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Unrealized (loss) gain related to available-for-sale securities
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(0.1
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)
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0.1
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Comprehensive income
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$
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66.2
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$
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27.8
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Basic net income per common share
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$
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0.21
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$
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0.09
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Net income per common share assuming dilution
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$
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0.20
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$
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0.09
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Cash dividends declared per common share
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$
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0.1875
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$
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0.0375
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Three Months Ended
December 31, |
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2012
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2011
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(In millions)
(Unaudited)
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OPERATING ACTIVITIES
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Net income
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$
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66.3
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$
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27.7
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Adjustments to reconcile net income to net cash used in operating activities:
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Depreciation and amortization
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4.8
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5.0
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Amortization of discounts and fees
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10.4
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9.8
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Stock based compensation expense
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3.5
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5.0
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Deferred income taxes
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35.2
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—
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Gain on early retirement of debt, net
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—
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(0.1
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)
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Gain on sale of marketable securities
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(0.2
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)
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—
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Inventory impairments and land option cost write-offs
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1.3
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1.4
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Changes in operating assets and liabilities:
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(Increase) decrease in construction in progress and finished homes
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(226.8
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)
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9.7
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Increase in residential land and lots –
developed, under development, and held for development
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(612.8
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)
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(40.1
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)
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Decrease in other assets
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22.8
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6.1
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Decrease in income taxes receivable
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14.4
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—
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Decrease in mortgage loans held for sale
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37.4
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18.2
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Decrease in accounts payable, accrued expenses and other liabilities
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(12.8
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)
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(44.4
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)
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Net cash used in operating activities
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(656.5
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)
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(1.7
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)
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INVESTING ACTIVITIES
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Purchases of property and equipment
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(14.0
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)
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(2.4
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)
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Purchases of marketable securities
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(26.8
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)
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(24.4
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)
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Proceeds from the sale or maturity of marketable securities
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226.7
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21.5
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(Increase) decrease in restricted cash
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(5.5
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)
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4.5
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Net principal increase of other mortgage loans and real estate owned
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(0.2
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)
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(1.6
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)
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Purchases of debt securities collateralized by residential real estate
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(18.6
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)
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—
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Payment related to acquisition of a business
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(9.4
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)
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—
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Net cash provided by (used in) investing activities
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152.2
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(2.4
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)
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FINANCING ACTIVITIES
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Proceeds from notes payable
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100.0
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29.5
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Repayment of notes payable
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(18.4
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)
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(12.6
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)
|
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Proceeds from stock associated with certain employee benefit plans
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2.1
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4.6
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Cash dividends paid
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(60.2
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)
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(11.9
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)
|
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Net cash provided by financing activities
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23.5
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9.6
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(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
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(480.8
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)
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5.5
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Cash and cash equivalents at beginning of period
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1,047.7
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732.6
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Cash and cash equivalents at end of period
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$
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566.9
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$
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738.1
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Supplemental disclosures of non-cash activities:
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Notes payable issued for inventory
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$
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11.4
|
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$
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—
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Stock issued under employee incentive plans
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$
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3.9
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|
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$
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3.1
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East:
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Delaware, Georgia (Savannah only), Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and Virginia
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Midwest:
|
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Colorado, Illinois and Minnesota
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Southeast:
|
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Alabama, Florida, Georgia and Mississippi
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South Central:
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Louisiana, New Mexico (Las Cruces only), Oklahoma and Texas
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Southwest:
|
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Arizona and New Mexico
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West:
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California, Hawaii, Idaho, Nevada, Oregon, Utah and Washington
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Three Months Ended
December 31, |
||||||
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2012
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2011
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||||
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(In millions)
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||||||
Revenues
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|
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Homebuilding revenues:
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East
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$
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137.4
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$
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118.8
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Midwest
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89.4
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57.7
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Southeast
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291.5
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196.9
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South Central
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310.5
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266.7
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Southwest
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76.0
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54.0
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West
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328.4
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191.5
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Total homebuilding revenues
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1,233.2
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885.6
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Financial services revenues
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41.9
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21.0
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Consolidated revenues
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$
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1,275.1
|
|
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$
|
906.6
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Income (Loss) Before Income Taxes
(1)
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Homebuilding income (loss) before income taxes:
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East
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$
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7.0
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$
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2.5
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Midwest
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(2.0
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)
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(7.1
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)
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Southeast
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19.4
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6.7
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South Central
|
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25.2
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|
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15.4
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Southwest
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9.8
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2.1
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West
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30.8
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5.4
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Total homebuilding income before income taxes
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90.2
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25.0
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Financial services income before income taxes
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17.7
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4.2
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|
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Consolidated income before income taxes
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$
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107.9
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$
|
29.2
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(1)
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Expenses maintained at the corporate level consist primarily of interest and property taxes, which are capitalized and amortized to cost of sales or expensed directly, and the expenses related to operating the Company’s corporate office. The amortization of capitalized interest and property taxes is allocated to each segment based on the segment’s revenue, while interest expense and those expenses associated with the corporate office are allocated to each segment based on the segment’s inventory balances.
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December 31,
2012 |
|
September 30,
2012 |
||||
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(In millions)
|
||||||
Homebuilding Inventories
(1)
|
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East
|
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$
|
636.8
|
|
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$
|
572.7
|
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Midwest
|
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356.2
|
|
|
318.1
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Southeast
|
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1,103.8
|
|
|
905.0
|
|
||
South Central
|
|
1,216.7
|
|
|
935.2
|
|
||
Southwest
|
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229.8
|
|
|
188.6
|
|
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West
|
|
1,367.0
|
|
|
1,151.3
|
|
||
Corporate and unallocated (2)
|
|
104.8
|
|
|
94.3
|
|
||
Total homebuilding inventory
|
|
$
|
5,015.1
|
|
|
$
|
4,165.2
|
|
(1)
|
Homebuilding inventories are the only assets included in the measure of segment assets used by the Company’s chief operating decision maker, its CEO.
|
(2)
|
Corporate and unallocated consists primarily of capitalized interest and property taxes.
|
|
|
December 31, 2012
|
||||||||||||||
|
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Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
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(In millions)
|
||||||||||||||
Type of security:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
12.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.1
|
|
Obligations of U.S. government agencies
|
|
20.1
|
|
|
—
|
|
|
—
|
|
|
20.1
|
|
||||
Corporate debt securities
|
|
59.5
|
|
|
—
|
|
|
—
|
|
|
59.5
|
|
||||
Total debt securities
|
|
91.7
|
|
|
—
|
|
|
—
|
|
|
91.7
|
|
||||
Certificates of deposit
|
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Total marketable securities, available-for-sale
|
|
$
|
96.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96.7
|
|
|
|
September 30, 2012
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Type of security:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75.7
|
|
Obligations of U.S. government agencies
|
|
58.1
|
|
|
—
|
|
|
—
|
|
|
58.1
|
|
||||
Corporate debt securities issued under the
FDIC Temporary Liquidity Guarantee Program
|
|
39.2
|
|
|
—
|
|
|
—
|
|
|
39.2
|
|
||||
Corporate debt securities
|
|
114.8
|
|
|
0.2
|
|
|
—
|
|
|
115.0
|
|
||||
Total debt securities
|
|
287.8
|
|
|
0.2
|
|
|
—
|
|
|
288.0
|
|
||||
Certificates of deposit
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||
Total marketable securities, available-for-sale
|
|
$
|
297.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
298.0
|
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
|
|
(In millions)
|
||||||
Homebuilding:
|
|
|
|
|
||||
Unsecured:
|
|
|
|
|
||||
Revolving credit facility, maturing 2017
|
|
$
|
100.0
|
|
|
$
|
—
|
|
6.875% senior notes due 2013
|
|
171.7
|
|
|
171.7
|
|
||
6.125% senior notes due 2014, net
|
|
145.6
|
|
|
145.5
|
|
||
2% convertible senior notes due 2014, net
|
|
454.6
|
|
|
447.0
|
|
||
5.625% senior notes due 2014, net
|
|
137.7
|
|
|
137.6
|
|
||
5.25% senior notes due 2015, net
|
|
157.4
|
|
|
157.4
|
|
||
5.625% senior notes due 2016, net
|
|
169.7
|
|
|
169.6
|
|
||
6.5% senior notes due 2016, net
|
|
372.4
|
|
|
372.4
|
|
||
4.75% senior notes due 2017
|
|
350.0
|
|
|
350.0
|
|
||
4.375% senior notes due 2022
|
|
350.0
|
|
|
350.0
|
|
||
Other secured
|
|
15.2
|
|
|
4.1
|
|
||
|
|
$
|
2,424.3
|
|
|
$
|
2,305.3
|
|
Financial Services:
|
|
|
|
|
||||
Mortgage repurchase facility, maturing 2013
|
|
$
|
169.4
|
|
|
$
|
187.8
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2012
|
|
2011
|
||||
|
|
(In millions)
|
||||||
Capitalized interest, beginning of period
|
|
$
|
82.3
|
|
|
$
|
79.2
|
|
Interest incurred
|
|
38.1
|
|
|
28.8
|
|
||
Interest expensed:
|
|
|
|
|
||||
Directly to interest expense
|
|
(4.2
|
)
|
|
(7.8
|
)
|
||
Amortized to cost of sales
|
|
(24.9
|
)
|
|
(20.4
|
)
|
||
Capitalized interest, end of period
|
|
$
|
91.3
|
|
|
$
|
79.8
|
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
|
|
(In millions)
|
||||||
Other mortgage loans
|
|
$
|
37.1
|
|
|
$
|
38.1
|
|
Real estate owned
|
|
1.5
|
|
|
1.3
|
|
||
|
|
$
|
38.6
|
|
|
$
|
39.4
|
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
|
|
(In millions)
|
||||||
Loss reserves related to:
|
|
|
|
|
||||
Other mortgage loans
|
|
$
|
5.1
|
|
|
$
|
5.0
|
|
Real estate owned
|
|
0.5
|
|
|
0.4
|
|
||
Loan repurchase and settlement obligations – known and expected
|
|
25.0
|
|
|
25.5
|
|
||
|
|
$
|
30.6
|
|
|
$
|
30.9
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2012
|
|
2011
|
||||
|
|
(In millions)
|
||||||
Numerator:
|
|
|
|
|
||||
Net income
|
|
$
|
66.3
|
|
|
$
|
27.7
|
|
Effect of dilutive securities:
|
|
|
|
|
||||
Interest expense and amortization of issuance costs
associated with convertible senior notes, net of tax
|
|
5.7
|
|
|
—
|
|
||
Numerator for diluted earnings per share after assumed conversions
|
|
$
|
72.0
|
|
|
$
|
27.7
|
|
Denominator:
|
|
|
|
|
||||
Denominator for basic earnings per share —
weighted average common shares
|
|
321.1
|
|
|
316.3
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Employee stock awards
|
|
4.4
|
|
|
0.2
|
|
||
Convertible senior notes
|
|
38.6
|
|
|
—
|
|
||
Denominator for diluted earnings per share —
adjusted weighted average common shares
|
|
364.1
|
|
|
316.5
|
|
|
|
Three Months Ended
December 31, |
||||||
|
|
2012
|
|
2011
|
||||
|
|
(In millions)
|
||||||
Warranty liability, beginning of period
|
|
$
|
56.8
|
|
|
$
|
46.2
|
|
Warranties issued
|
|
5.5
|
|
|
4.1
|
|
||
Changes in liability for pre-existing warranties
|
|
3.6
|
|
|
1.9
|
|
||
Settlements made
|
|
(9.3
|
)
|
|
(6.2
|
)
|
||
Warranty liability, end of period
|
|
$
|
56.6
|
|
|
$
|
46.0
|
|
|
Three Months Ended
|
||
|
December 31, 2012
|
||
|
(In millions)
|
||
Reserves for legal claims, beginning of period
|
$
|
544.9
|
|
Payments
|
(8.2
|
)
|
|
Decrease in reserves
|
(6.9
|
)
|
|
Reserves for legal claims, end of period
|
$
|
529.8
|
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
|
|
(In millions)
|
||||||
Insurance receivables
|
|
$
|
202.0
|
|
|
$
|
225.0
|
|
Earnest money and refundable deposits
|
|
80.4
|
|
|
80.0
|
|
||
Accounts and notes receivable
|
|
19.5
|
|
|
21.9
|
|
||
Prepaid assets
|
|
31.7
|
|
|
29.4
|
|
||
Debt securities collateralized by residential real estate
|
|
18.6
|
|
|
—
|
|
||
Other assets
|
|
102.0
|
|
|
100.5
|
|
||
|
|
$
|
454.2
|
|
|
$
|
456.8
|
|
|
|
December 31,
2012 |
|
September 30,
2012 |
||||
|
|
(In millions)
|
||||||
Reserves for legal claims
|
|
$
|
529.8
|
|
|
$
|
544.9
|
|
Employee compensation and related liabilities
|
|
100.3
|
|
|
106.4
|
|
||
Warranty liability
|
|
56.6
|
|
|
56.8
|
|
||
Accrued interest
|
|
28.6
|
|
|
32.6
|
|
||
Federal and state income tax liabilities
|
|
25.8
|
|
|
21.6
|
|
||
Other liabilities
|
|
115.5
|
|
|
131.5
|
|
||
|
|
$
|
856.6
|
|
|
$
|
893.8
|
|
•
|
Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities. The Company’s U.S. Treasury securities are measured at fair value using Level 1 inputs.
|
•
|
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. The Company’s assets/liabilities measured at fair value using Level 2 inputs are as follows:
|
▪
|
government agency securities, corporate debt securities, foreign government securities and certificates of deposit;
|
▪
|
mortgage loans held for sale;
|
▪
|
over-the-counter derivatives such as forward sales of MBS, put options on MBS and best-efforts and mandatory commitments; and
|
▪
|
IRLCs.
|
•
|
Level 3 – Valuation is typically derived from model-based techniques in which at least one significant input is unobservable and based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability. The Company's debt securities collateralized by residential real estate are measured using Level 3 inputs and are measured at fair value on a recurring basis. The assets shown below are measured using Level 3 inputs and are typically reported at the lower of carrying value or fair value on a nonrecurring basis:
|
▪
|
inventory held and used;
|
▪
|
certain mortgage loans; and
|
▪
|
real estate owned.
|
|
|
|
|
Fair Value at December 31, 2012
|
||||||||||||||
|
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Treasury securities
|
|
Marketable securities
|
|
$
|
12.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.1
|
|
Government agency and corporate debt securities
|
|
Marketable securities
|
|
—
|
|
|
79.6
|
|
|
—
|
|
|
79.6
|
|
||||
Certificates of deposit
|
|
Marketable securities
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
||||
Debt securities collateralized by residential real estate (a)
|
|
Other assets
|
|
—
|
|
|
—
|
|
|
18.6
|
|
|
18.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale (b)
|
|
Mortgage loans held for sale
|
|
—
|
|
|
300.2
|
|
|
7.7
|
|
|
307.9
|
|
||||
Derivatives not designated as hedging instruments (c):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
|
Other assets
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
||||
Forward sales of MBS
|
|
Other liabilities
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||
Best-efforts and mandatory commitments
|
|
Other liabilities
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
|
|
|
Fair Value at September 30, 2012
|
||||||||||||||
|
|
Balance Sheet Location
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Treasury securities
|
|
Marketable securities
|
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75.7
|
|
Government agency and corporate debt securities
|
|
Marketable securities
|
|
—
|
|
|
212.3
|
|
|
—
|
|
|
212.3
|
|
||||
Certificates of deposit
|
|
Marketable securities
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale (b)
|
|
Mortgage loans held for sale
|
|
—
|
|
|
345.3
|
|
|
—
|
|
|
345.3
|
|
||||
Derivatives not designated as hedging instruments (c):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate lock commitments
|
|
Other assets
|
|
—
|
|
|
6.1
|
|
|
—
|
|
|
6.1
|
|
||||
Forward sales of MBS
|
|
Other liabilities
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
(6.9
|
)
|
||||
Best-efforts and mandatory commitments
|
|
Other liabilities
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
Level 3 Assets at Fair Value for the
Three Months Ended December 31, 2012
|
||||||||||||||
|
Balance at
September 30, 2012
|
|
Purchases
|
|
Net transfers in and/or (out) of Level 3
|
|
Balance at
December 31, 2012
|
||||||||
|
(In millions)
|
||||||||||||||
Debt securities collateralized by residential real estate (a)
|
$
|
—
|
|
|
$
|
18.6
|
|
|
$
|
—
|
|
|
$
|
18.6
|
|
Mortgage loans held for sale (b)
|
—
|
|
|
—
|
|
|
7.7
|
|
|
7.7
|
|
(a)
|
In October 2012, the Company purchased
$18.6 million
of defaulted debt securities which are secured by residential real estate. The Company intends to foreclose and take possession of the residential real estate in order to develop the property and ultimately build and sell homes. These securities are classified as available for sale and are included in other assets in the Company's consolidated balance sheets. At
December 31, 2012
, the Company valued these securities at the recent October 2012 transaction price, which is considered to be the best initial estimate of fair value.
|
(b)
|
Mortgage loans held for sale are reflected at fair value. Interest income earned on mortgage loans held for sale is based on contractual interest rates and included in financial services interest and other income. Mortgage loans held for sale includes
$7.7 million
of loans originated under the fair value option which the Company has not sold into the secondary market, but plans to sell as market conditions permit. The fair value of these mortgage loans held for sale is generally calculated considering the secondary market and adjusted for the value of the underlying collateral, including interest rate risk, liquidity risk and prepayment risk; therefore, they were transferred from a Level 2 valuation to a Level 3 valuation during the three months ended
December 31, 2012
.
|
(c)
|
Fair value measurements of these derivatives represent changes in fair value since inception. These changes are reflected in the balance sheet and included in financial services revenues on the consolidated statement of operations.
|
|
|
|
|
Fair Value at
|
|
Fair Value at
|
||||
|
|
|
|
December 31, 2012
|
|
September 30, 2012
|
||||
|
|
Balance Sheet Location
|
|
Level 3
|
|
Level 3
|
||||
|
|
|
|
(In millions)
|
||||||
Homebuilding:
|
|
|
|
|
|
|
||||
Inventory held and used (a) (b)
|
|
Inventories
|
|
$
|
—
|
|
|
$
|
1.2
|
|
Financial Services:
|
|
|
|
|
|
|
||||
Other mortgage loans (a) (c)
|
|
Other assets
|
|
25.5
|
|
|
25.8
|
|
||
Real estate owned (a) (c)
|
|
Other assets
|
|
0.9
|
|
|
0.9
|
|
(a)
|
The fair values included in the table above represent only those assets whose carrying values were adjusted to fair value in the current quarter.
|
(b)
|
In performing its impairment analysis, the Company used discount rates ranging from
12%
to
20%
during the three months ended
December 31, 2012
and during fiscal
2012
.
|
(c)
|
The fair values for other mortgage loans and real estate owned are determined based on the value of the underlying collateral.
|
|
Carrying Value
|
|
Fair Value at December 31, 2012
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
|
(In millions)
|
||||||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (a)
|
$
|
546.4
|
|
|
$
|
546.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
546.4
|
|
Restricted cash (a)
|
54.8
|
|
|
54.8
|
|
|
—
|
|
|
—
|
|
|
54.8
|
|
|||||
Revolving credit facility (a)
|
100.0
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|
100.0
|
|
|||||
Senior notes (b)
|
1,854.5
|
|
|
—
|
|
|
1,961.3
|
|
|
—
|
|
|
1,961.3
|
|
|||||
Convertible senior notes (b)
|
454.6
|
|
|
—
|
|
|
791.6
|
|
|
—
|
|
|
791.6
|
|
|||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (a)
|
20.5
|
|
|
20.5
|
|
|
—
|
|
|
—
|
|
|
20.5
|
|
|||||
Mortgage repurchase facility (a)
|
169.4
|
|
|
—
|
|
|
—
|
|
|
169.4
|
|
|
169.4
|
|
|
Carrying Value
|
|
Fair Value at September 30, 2012
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
|
(In millions)
|
||||||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (a)
|
$
|
1,030.4
|
|
|
$
|
1,030.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,030.4
|
|
Restricted cash (a)
|
49.3
|
|
|
49.3
|
|
|
—
|
|
|
—
|
|
|
49.3
|
|
|||||
Senior notes (b)
|
1,854.2
|
|
|
—
|
|
|
1,973.9
|
|
|
—
|
|
|
1,973.9
|
|
|||||
Convertible senior notes (b)
|
447.0
|
|
|
—
|
|
|
821.2
|
|
|
—
|
|
|
821.2
|
|
|||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (a)
|
17.3
|
|
|
17.3
|
|
|
—
|
|
|
—
|
|
|
17.3
|
|
|||||
Mortgage repurchase facility (a)
|
187.8
|
|
|
—
|
|
|
—
|
|
|
187.8
|
|
|
187.8
|
|
(a)
|
The fair value approximates carrying value due to its short-term nature, short maturity or floating interest rate terms, as applicable.
|
(b)
|
The fair value is determined based on quoted market prices of recent transactions, which is classified as Level 2 within the fair value hierarchy.
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
526.6
|
|
|
$
|
18.9
|
|
|
$
|
21.4
|
|
|
$
|
—
|
|
|
$
|
566.9
|
|
Marketable securities, available-for-sale
|
|
96.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96.7
|
|
|||||
Restricted cash
|
|
54.0
|
|
|
0.7
|
|
|
0.1
|
|
|
—
|
|
|
54.8
|
|
|||||
Investments in subsidiaries
|
|
2,157.4
|
|
|
—
|
|
|
—
|
|
|
(2,157.4
|
)
|
|
—
|
|
|||||
Inventories
|
|
1,651.4
|
|
|
3,345.7
|
|
|
18.0
|
|
|
—
|
|
|
5,015.1
|
|
|||||
Deferred income taxes
|
|
220.1
|
|
|
463.4
|
|
|
—
|
|
|
—
|
|
|
683.5
|
|
|||||
Property and equipment, net
|
|
25.4
|
|
|
27.5
|
|
|
29.0
|
|
|
—
|
|
|
81.9
|
|
|||||
Other assets
|
|
126.8
|
|
|
270.1
|
|
|
104.7
|
|
|
—
|
|
|
501.6
|
|
|||||
Mortgage loans held for sale
|
|
—
|
|
|
—
|
|
|
307.9
|
|
|
—
|
|
|
307.9
|
|
|||||
Goodwill
|
|
—
|
|
|
38.9
|
|
|
—
|
|
|
—
|
|
|
38.9
|
|
|||||
Intercompany receivables
|
|
1,480.7
|
|
|
—
|
|
|
—
|
|
|
(1,480.7
|
)
|
|
—
|
|
|||||
Total Assets
|
|
$
|
6,339.1
|
|
|
$
|
4,165.2
|
|
|
$
|
481.1
|
|
|
$
|
(3,638.1
|
)
|
|
$
|
7,347.3
|
|
LIABILITIES & EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other liabilities
|
|
$
|
306.8
|
|
|
$
|
705.2
|
|
|
$
|
128.5
|
|
|
$
|
—
|
|
|
$
|
1,140.5
|
|
Intercompany payables
|
|
—
|
|
|
1,450.3
|
|
|
30.4
|
|
|
(1,480.7
|
)
|
|
—
|
|
|||||
Notes payable
|
|
2,421.9
|
|
|
2.4
|
|
|
169.4
|
|
|
—
|
|
|
2,593.7
|
|
|||||
Total Liabilities
|
|
2,728.7
|
|
|
2,157.9
|
|
|
328.3
|
|
|
(1,480.7
|
)
|
|
3,734.2
|
|
|||||
Total stockholders’ equity
|
|
3,610.4
|
|
|
2,007.3
|
|
|
150.1
|
|
|
(2,157.4
|
)
|
|
3,610.4
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
|
2.7
|
|
|||||
Total Equity
|
|
3,610.4
|
|
|
2,007.3
|
|
|
152.8
|
|
|
(2,157.4
|
)
|
|
3,613.1
|
|
|||||
Total Liabilities & Equity
|
|
$
|
6,339.1
|
|
|
$
|
4,165.2
|
|
|
$
|
481.1
|
|
|
$
|
(3,638.1
|
)
|
|
$
|
7,347.3
|
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
968.9
|
|
|
$
|
56.3
|
|
|
$
|
22.5
|
|
|
$
|
—
|
|
|
$
|
1,047.7
|
|
Marketable securities, available-for-sale
|
|
298.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
298.0
|
|
|||||
Restricted cash
|
|
48.7
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
49.3
|
|
|||||
Investments in subsidiaries
|
|
2,120.8
|
|
|
—
|
|
|
—
|
|
|
(2,120.8
|
)
|
|
—
|
|
|||||
Inventories
|
|
1,375.1
|
|
|
2,770.6
|
|
|
19.5
|
|
|
—
|
|
|
4,165.2
|
|
|||||
Income taxes receivable
|
|
14.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.4
|
|
|||||
Deferred income taxes
|
|
227.6
|
|
|
481.9
|
|
|
—
|
|
|
—
|
|
|
709.5
|
|
|||||
Property and equipment, net
|
|
20.7
|
|
|
20.7
|
|
|
31.2
|
|
|
—
|
|
|
72.6
|
|
|||||
Other assets
|
|
127.8
|
|
|
271.1
|
|
|
108.4
|
|
|
—
|
|
|
507.3
|
|
|||||
Mortgage loans held for sale
|
|
—
|
|
|
—
|
|
|
345.3
|
|
|
—
|
|
|
345.3
|
|
|||||
Goodwill
|
|
—
|
|
|
38.9
|
|
|
—
|
|
|
—
|
|
|
38.9
|
|
|||||
Intercompany receivables
|
|
1,022.6
|
|
|
—
|
|
|
—
|
|
|
(1,022.6
|
)
|
|
—
|
|
|||||
Total Assets
|
|
$
|
6,224.6
|
|
|
$
|
3,640.0
|
|
|
$
|
527.0
|
|
|
$
|
(3,143.4
|
)
|
|
$
|
7,248.2
|
|
LIABILITIES & EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other liabilities
|
|
$
|
329.8
|
|
|
$
|
700.0
|
|
|
$
|
130.6
|
|
|
$
|
—
|
|
|
$
|
1,160.4
|
|
Intercompany payables
|
|
—
|
|
|
986.8
|
|
|
35.8
|
|
|
(1,022.6
|
)
|
|
—
|
|
|||||
Notes payable
|
|
2,302.7
|
|
|
2.6
|
|
|
187.8
|
|
|
—
|
|
|
2,493.1
|
|
|||||
Total Liabilities
|
|
2,632.5
|
|
|
1,689.4
|
|
|
354.2
|
|
|
(1,022.6
|
)
|
|
3,653.5
|
|
|||||
Total stockholders’ equity
|
|
3,592.1
|
|
|
1,950.6
|
|
|
170.2
|
|
|
(2,120.8
|
)
|
|
3,592.1
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
|||||
Total Equity
|
|
3,592.1
|
|
|
1,950.6
|
|
|
172.8
|
|
|
(2,120.8
|
)
|
|
3,594.7
|
|
|||||
Total Liabilities & Equity
|
|
$
|
6,224.6
|
|
|
$
|
3,640.0
|
|
|
$
|
527.0
|
|
|
$
|
(3,143.4
|
)
|
|
$
|
7,248.2
|
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
406.2
|
|
|
$
|
823.6
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
1,233.2
|
|
Cost of sales
|
|
327.0
|
|
|
665.7
|
|
|
9.6
|
|
|
—
|
|
|
1,002.3
|
|
|||||
Gross profit (loss)
|
|
79.2
|
|
|
157.9
|
|
|
(6.2
|
)
|
|
—
|
|
|
230.9
|
|
|||||
Selling, general and administrative expense
|
|
64.0
|
|
|
75.1
|
|
|
1.7
|
|
|
—
|
|
|
140.8
|
|
|||||
Equity in (income) of subsidiaries
|
|
(94.9
|
)
|
|
—
|
|
|
—
|
|
|
94.9
|
|
|
—
|
|
|||||
Interest expense
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Other (income)
|
|
(1.0
|
)
|
|
(1.1
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(3.3
|
)
|
|||||
|
|
107.9
|
|
|
83.9
|
|
|
(6.7
|
)
|
|
(94.9
|
)
|
|
90.2
|
|
|||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues, net of recourse and reinsurance expense
|
|
—
|
|
|
—
|
|
|
41.9
|
|
|
—
|
|
|
41.9
|
|
|||||
General and administrative expense
|
|
—
|
|
|
—
|
|
|
25.7
|
|
|
—
|
|
|
25.7
|
|
|||||
Interest expense
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|||||
Interest and other (income)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|||||
|
|
—
|
|
|
—
|
|
|
17.7
|
|
|
—
|
|
|
17.7
|
|
|||||
Income before income taxes
|
|
107.9
|
|
|
83.9
|
|
|
11.0
|
|
|
(94.9
|
)
|
|
107.9
|
|
|||||
Income tax expense
|
|
41.6
|
|
|
26.8
|
|
|
1.5
|
|
|
(28.3
|
)
|
|
41.6
|
|
|||||
Net income
|
|
$
|
66.3
|
|
|
$
|
57.1
|
|
|
$
|
9.5
|
|
|
$
|
(66.6
|
)
|
|
$
|
66.3
|
|
Comprehensive income
|
|
$
|
66.2
|
|
|
$
|
57.1
|
|
|
$
|
9.5
|
|
|
$
|
(66.6
|
)
|
|
$
|
66.2
|
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
293.9
|
|
|
$
|
590.0
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
885.6
|
|
Cost of sales
|
|
244.4
|
|
|
487.1
|
|
|
5.5
|
|
|
—
|
|
|
737.0
|
|
|||||
Gross profit (loss)
|
|
49.5
|
|
|
102.9
|
|
|
(3.8
|
)
|
|
—
|
|
|
148.6
|
|
|||||
Selling, general and administrative expense
|
|
55.4
|
|
|
61.4
|
|
|
2.2
|
|
|
—
|
|
|
119.0
|
|
|||||
Equity in (income) of subsidiaries
|
|
(41.1
|
)
|
|
—
|
|
|
—
|
|
|
41.1
|
|
|
—
|
|
|||||
Interest expense
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
|||||
Gain on early retirement of debt, net
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Other (income)
|
|
(0.8
|
)
|
|
(0.6
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(2.2
|
)
|
|||||
|
|
29.2
|
|
|
42.1
|
|
|
(5.2
|
)
|
|
(41.1
|
)
|
|
25.0
|
|
|||||
Financial Services:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues, net of recourse and reinsurance expense
|
|
—
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
21.0
|
|
|||||
General and administrative expense
|
|
—
|
|
|
—
|
|
|
18.9
|
|
|
—
|
|
|
18.9
|
|
|||||
Interest expense
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||||
Interest and other (income)
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
(3.0
|
)
|
|||||
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
—
|
|
|
4.2
|
|
|||||
Income (loss) before income taxes
|
|
29.2
|
|
|
42.1
|
|
|
(1.0
|
)
|
|
(41.1
|
)
|
|
29.2
|
|
|||||
Income tax expense
|
|
1.5
|
|
|
0.9
|
|
|
0.1
|
|
|
(1.0
|
)
|
|
1.5
|
|
|||||
Net income (loss)
|
|
$
|
27.7
|
|
|
$
|
41.2
|
|
|
$
|
(1.1
|
)
|
|
$
|
(40.1
|
)
|
|
$
|
27.7
|
|
Comprehensive income (loss)
|
|
$
|
27.8
|
|
|
$
|
41.2
|
|
|
$
|
(1.1
|
)
|
|
$
|
(40.1
|
)
|
|
$
|
27.8
|
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(186.2
|
)
|
|
$
|
(491.3
|
)
|
|
$
|
51.0
|
|
|
$
|
(30.0
|
)
|
|
$
|
(656.5
|
)
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
|
(6.5
|
)
|
|
(3.7
|
)
|
|
(3.8
|
)
|
|
—
|
|
|
(14.0
|
)
|
|||||
Purchases of marketable securities
|
|
(26.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.8
|
)
|
|||||
Proceeds from the sale or maturity of marketable securities
|
|
226.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226.7
|
|
|||||
Increase in restricted cash
|
|
(5.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|||||
Net principal increase of other mortgage loans and real estate owned
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Purchases of debt securities collateralized by residential real estate
|
|
(18.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.6
|
)
|
|||||
Payment related to acquisition of a business
|
|
(9.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.4
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
160.1
|
|
|
(3.9
|
)
|
|
(4.0
|
)
|
|
—
|
|
|
152.2
|
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in notes payable
|
|
100.0
|
|
|
—
|
|
|
(18.4
|
)
|
|
—
|
|
|
81.6
|
|
|||||
Net change in intercompany receivables/payables
|
|
(458.1
|
)
|
|
457.8
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from stock associated with certain employee benefit plans
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Cash dividends paid
|
|
(60.2
|
)
|
|
—
|
|
|
(30.0
|
)
|
|
30.0
|
|
|
(60.2
|
)
|
|||||
Net cash (used in) provided by financing activities
|
|
(416.2
|
)
|
|
457.8
|
|
|
(48.1
|
)
|
|
30.0
|
|
|
23.5
|
|
|||||
Decrease in cash and cash equivalents
|
|
(442.3
|
)
|
|
(37.4
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
(480.8
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
968.9
|
|
|
56.3
|
|
|
22.5
|
|
|
—
|
|
|
1,047.7
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
526.6
|
|
|
$
|
18.9
|
|
|
$
|
21.4
|
|
|
$
|
—
|
|
|
$
|
566.9
|
|
|
|
D.R.
Horton, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(8.5
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
13.1
|
|
|
$
|
—
|
|
|
$
|
(1.7
|
)
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
|
(0.7
|
)
|
|
(1.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||||
Purchases of marketable securities
|
|
(24.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.4
|
)
|
|||||
Proceeds from the sale or maturity of marketable securities
|
|
21.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.5
|
|
|||||
Decrease (increase) in restricted cash
|
|
4.6
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
4.5
|
|
|||||
Net principal increase of other mortgage loans and real estate owned
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
1.0
|
|
|
(1.6
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(2.4
|
)
|
|||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net change in notes payable
|
|
(11.7
|
)
|
|
(0.9
|
)
|
|
29.5
|
|
|
—
|
|
|
16.9
|
|
|||||
Net change in intercompany receivables/payables
|
|
47.9
|
|
|
(7.7
|
)
|
|
(40.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Proceeds from stock associated with certain employee benefit plans
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|||||
Cash dividends paid
|
|
(11.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
28.9
|
|
|
(8.6
|
)
|
|
(10.7
|
)
|
|
—
|
|
|
9.6
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
|
21.4
|
|
|
(16.5
|
)
|
|
0.6
|
|
|
—
|
|
|
5.5
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
681.3
|
|
|
31.3
|
|
|
20.0
|
|
|
—
|
|
|
732.6
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
702.7
|
|
|
$
|
14.8
|
|
|
$
|
20.6
|
|
|
$
|
—
|
|
|
$
|
738.1
|
|
State
|
|
Reporting Region/Market
|
|
State
|
|
Reporting Region/Market
|
|
|
|
|
|
|
|
|
|
East Region
|
|
|
|
South Central Region
|
Delaware
|
|
Central Delaware
|
|
Louisiana
|
|
Baton Rouge
|
Georgia
|
|
Savannah
|
|
|
|
Lafayette
|
Maryland
|
|
Baltimore
|
|
New Mexico
|
|
Las Cruces
|
|
|
Suburban Washington, D.C.
|
|
Oklahoma
|
|
Oklahoma City
|
New Jersey
|
|
North New Jersey
|
|
Texas
|
|
Austin
|
|
|
South New Jersey
|
|
|
|
Dallas
|
North Carolina
|
|
Charlotte
|
|
|
|
El Paso
|
|
|
Fayetteville
|
|
|
|
Fort Worth
|
|
|
Greensboro/Winston-Salem
|
|
|
|
Houston
|
|
|
Jacksonville
|
|
|
|
Killeen/Temple/Waco
|
|
|
Raleigh/Durham
|
|
|
|
Midland/Odessa
|
|
|
Wilmington
|
|
|
|
Rio Grande Valley
|
Pennsylvania
|
|
Lancaster
|
|
|
|
San Antonio
|
|
|
Philadelphia
|
|
|
|
|
South Carolina
|
|
Charleston
|
|
|
|
Southwest Region
|
|
|
Columbia
|
|
Arizona
|
|
Phoenix
|
|
|
Greenville
|
|
|
|
Tucson
|
|
|
Hilton Head
|
|
New Mexico
|
|
Albuquerque
|
|
|
Myrtle Beach
|
|
|
|
|
Virginia
|
|
Northern Virginia
|
|
|
|
West Region
|
|
|
|
|
California
|
|
Bay Area
|
|
|
Midwest Region
|
|
|
|
Central Valley
|
Colorado
|
|
Colorado Springs
|
|
|
|
Imperial Valley
|
|
|
Denver
|
|
|
|
Los Angeles County
|
|
|
Fort Collins
|
|
|
|
Riverside County
|
Illinois
|
|
Chicago
|
|
|
|
Sacramento
|
Minnesota
|
|
Minneapolis/St. Paul
|
|
|
|
San Bernardino County
|
|
|
|
|
|
|
San Diego County
|
|
|
Southeast Region
|
|
|
|
Ventura County
|
Alabama
|
|
Birmingham
|
|
Hawaii
|
|
Hawaii
|
|
|
Huntsville
|
|
|
|
Maui
|
|
|
Mobile
|
|
|
|
Oahu
|
|
|
Montgomery
|
|
Idaho
|
|
Boise
|
|
|
Tuscaloosa
|
|
Nevada
|
|
Las Vegas
|
Florida
|
|
Fort Myers/Naples
|
|
|
|
Reno
|
|
|
Jacksonville
|
|
Oregon
|
|
Portland
|
|
|
Lakeland
|
|
Utah
|
|
Salt Lake City
|
|
|
Melbourne/Vero Beach
|
|
Washington
|
|
Seattle/Tacoma
|
|
|
Miami/West Palm Beach
|
|
|
|
Vancouver
|
|
|
Orlando
|
|
|
|
|
|
|
Pensacola/Panama City
|
|
|
|
|
|
|
Tampa/Sarasota
|
|
|
|
|
|
|
Volusia County
|
|
|
|
|
Georgia
|
|
Atlanta
|
|
|
|
|
|
|
Middle Georgia
|
|
|
|
|
Mississippi
|
|
Gulf Coast
|
|
|
|
|
•
|
Maintaining a strong cash balance and overall liquidity position.
|
•
|
Managing the sales prices and level of sales incentives on our homes to optimize the balance of sales volumes, profits, returns on inventory investments and cash flows.
|
•
|
Entering into lot option contracts to purchase finished lots, where possible, which mitigates many of the risks of land ownership.
|
•
|
Investing in land acquisition, land development and housing inventory opportunities as housing demand improves and expanding our operations in desirable markets.
|
•
|
Managing our inventory of homes under construction relative to demand in each of our markets, including starting construction on unsold homes to capture new home demand, monitoring the number and aging of unsold homes and aggressively marketing unsold, completed homes in inventory.
|
•
|
Controlling the cost of goods purchased from both vendors and subcontractors.
|
•
|
Modifying product offerings and pricing to meet consumer demand in each of our markets.
|
•
|
Controlling our SG&A infrastructure to match production levels.
|
•
|
Homebuilding revenues
increased
39%
to
$1.2 billion
.
|
•
|
Homes closed increased
26%
to
5,182
homes, and the average closing price of those homes increased
10%
to
$236,100
.
|
•
|
Net sales orders increased
39%
to
5,259
homes, and the value of net sales orders increased
60%
to
$1.3 billion
.
|
•
|
Sales order backlog increased
80%
to
$1.8 billion
.
|
•
|
Home sales gross margins
increased
200
basis points to
18.8%
.
|
•
|
Homebuilding SG&A expenses
decreased
as a percentage of homebuilding revenues by
200
basis points to
11.4%
.
|
•
|
Interest expensed directly
decreased
54%
, to
$3.2 million
.
|
•
|
Interest amortized to cost of sales declined to
2.5%
of total home and land/lot cost of sales, from
2.8%
.
|
•
|
Homebuilding pre-tax income
increased
261%
to
$90.2 million
.
|
•
|
Homebuilding cash and marketable securities totaled
$643.1 million
, compared to
$1.3 billion
and
$1.0 billion
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Homebuilding inventories totaled
$5.0 billion
, compared to
$4.2 billion
and
$3.5 billion
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Homes in inventory totaled
14,200
, compared to
13,000
and
10,200
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Owned and optioned lots totaled
177,300
, compared to
152,700
and
115,300
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Homebuilding debt was
$2.4 billion
, compared to
$2.3 billion
and
$1.6 billion
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Gross homebuilding debt to total capital was
40.2%
, an increase of
110
basis points and
280
basis points from the ratios at
September 30, 2012
and
December 31, 2011
, respectively. Net homebuilding debt to total capital was
33.0%
, increasing from
21.4%
and
17.5%
at
September 30, 2012
and
December 31, 2011
, respectively.
|
•
|
Total financial services revenues, net of recourse and reinsurance expenses,
increased
100%
to
$41.9 million
.
|
•
|
Financial services pre-tax income
increased
321%
to
$17.7 million
.
|
•
|
Consolidated pre-tax income was
$107.9 million
, compared to
$29.2 million
.
|
•
|
Net income was
$66.3 million
, compared to
$27.7 million
.
|
•
|
Diluted earnings per share was
$0.20
, compared to
$0.09
.
|
•
|
Total equity was
$3.6 billion
, essentially unchanged from the balance at
September 30, 2012
, and up from
$2.7 billion
at
December 31, 2011
.
|
•
|
Net cash used in operations was
$656.5 million
, compared to
$1.7 million
.
|
|
|
Net Sales Orders
(1)
|
|||||||||||||||||||||||||||
|
|
Three Months Ended December 31,
|
|||||||||||||||||||||||||||
|
|
Net Homes Sold
|
|
Value (In millions)
|
|
Average Selling Price
|
|||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|||||||||||
East
|
|
528
|
|
509
|
|
4
|
%
|
|
$
|
141.4
|
|
|
$
|
115.3
|
|
|
23
|
%
|
|
$
|
267,800
|
|
|
$
|
226,500
|
|
|
18
|
%
|
Midwest
|
|
275
|
|
213
|
|
29
|
%
|
|
89.9
|
|
|
59.1
|
|
|
52
|
%
|
|
326,900
|
|
|
277,500
|
|
|
18
|
%
|
||||
Southeast
|
|
1,584
|
|
921
|
|
72
|
%
|
|
353.5
|
|
|
181.1
|
|
|
95
|
%
|
|
223,200
|
|
|
196,600
|
|
|
14
|
%
|
||||
South Central
|
|
1,641
|
|
1,299
|
|
26
|
%
|
|
330.6
|
|
|
233.2
|
|
|
42
|
%
|
|
201,500
|
|
|
179,500
|
|
|
12
|
%
|
||||
Southwest
|
|
247
|
|
249
|
|
(1
|
)%
|
|
53.2
|
|
|
46.9
|
|
|
13
|
%
|
|
215,400
|
|
|
188,400
|
|
|
14
|
%
|
||||
West
|
|
984
|
|
603
|
|
63
|
%
|
|
345.5
|
|
|
187.6
|
|
|
84
|
%
|
|
351,100
|
|
|
311,100
|
|
|
13
|
%
|
||||
|
|
5,259
|
|
3,794
|
|
39
|
%
|
|
$
|
1,314.1
|
|
|
$
|
823.2
|
|
|
60
|
%
|
|
$
|
249,900
|
|
|
$
|
217,000
|
|
|
15
|
%
|
|
|
Sales Order Cancellations
|
||||||||||||||||
|
|
Three Months Ended December 31,
|
||||||||||||||||
|
|
Cancelled Sales Orders
|
|
Value (In millions)
|
|
Cancellation Rate
(2)
|
||||||||||||
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||
East
|
|
130
|
|
137
|
|
$
|
30.8
|
|
|
$
|
30.0
|
|
|
20
|
%
|
|
21
|
%
|
Midwest
|
|
49
|
|
31
|
|
15.0
|
|
|
9.1
|
|
|
15
|
%
|
|
13
|
%
|
||
Southeast
|
|
431
|
|
356
|
|
88.5
|
|
|
64.3
|
|
|
21
|
%
|
|
28
|
%
|
||
South Central
|
|
514
|
|
509
|
|
95.2
|
|
|
90.1
|
|
|
24
|
%
|
|
28
|
%
|
||
Southwest
|
|
146
|
|
151
|
|
28.9
|
|
|
24.6
|
|
|
37
|
%
|
|
38
|
%
|
||
West
|
|
207
|
|
143
|
|
68.3
|
|
|
47.2
|
|
|
17
|
%
|
|
19
|
%
|
||
|
|
1,477
|
|
1,327
|
|
$
|
326.7
|
|
|
$
|
265.3
|
|
|
22
|
%
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net sales orders represent the number and dollar value of new sales contracts executed with customers (gross sales orders), net of cancelled sales orders.
|
(2)
|
Cancellation rate represents the number of cancelled sales orders divided by gross sales orders.
|
|
|
Sales Order Backlog
|
|||||||||||||||||||||||||||
|
|
As of December 31,
|
|||||||||||||||||||||||||||
|
|
Homes in Backlog
|
|
Value (In millions)
|
|
Average Selling Price
|
|||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|||||||||||
East
|
|
674
|
|
620
|
|
9
|
%
|
|
$
|
174.6
|
|
|
$
|
144.1
|
|
|
21
|
%
|
|
$
|
259,100
|
|
|
$
|
232,400
|
|
|
11
|
%
|
Midwest
|
|
413
|
|
288
|
|
43
|
%
|
|
127.9
|
|
|
81.9
|
|
|
56
|
%
|
|
309,700
|
|
|
284,400
|
|
|
9
|
%
|
||||
Southeast
|
|
2,419
|
|
1,193
|
|
103
|
%
|
|
527.1
|
|
|
232.4
|
|
|
127
|
%
|
|
217,900
|
|
|
194,800
|
|
|
12
|
%
|
||||
South Central
|
|
2,254
|
|
1,517
|
|
49
|
%
|
|
454.8
|
|
|
276.0
|
|
|
65
|
%
|
|
201,800
|
|
|
181,900
|
|
|
11
|
%
|
||||
Southwest
|
|
563
|
|
396
|
|
42
|
%
|
|
112.1
|
|
|
69.5
|
|
|
61
|
%
|
|
199,100
|
|
|
175,500
|
|
|
13
|
%
|
||||
West
|
|
994
|
|
516
|
|
93
|
%
|
|
362.2
|
|
|
171.1
|
|
|
112
|
%
|
|
364,400
|
|
|
331,600
|
|
|
10
|
%
|
||||
|
|
7,317
|
|
4,530
|
|
62
|
%
|
|
$
|
1,758.7
|
|
|
$
|
975.0
|
|
|
80
|
%
|
|
$
|
240,400
|
|
|
$
|
215,200
|
|
|
12
|
%
|
|
|
Homes Closed and Home Sales Revenue
|
|||||||||||||||||||||||||||
|
|
Three Months Ended December 31,
|
|||||||||||||||||||||||||||
|
|
Homes Closed
|
|
Value (In millions)
|
|
Average Selling Price
|
|||||||||||||||||||||||
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|
2012
|
|
2011
|
|
%
Change
|
|||||||||||
East
|
|
517
|
|
495
|
|
4
|
%
|
|
$
|
137.4
|
|
|
$
|
118.8
|
|
|
16
|
%
|
|
$
|
265,800
|
|
|
$
|
240,000
|
|
|
11
|
%
|
Midwest
|
|
287
|
|
213
|
|
35
|
%
|
|
89.4
|
|
|
57.7
|
|
|
55
|
%
|
|
311,500
|
|
|
270,900
|
|
|
15
|
%
|
||||
Southeast
|
|
1,374
|
|
1,013
|
|
36
|
%
|
|
291.3
|
|
|
195.6
|
|
|
49
|
%
|
|
212,000
|
|
|
193,100
|
|
|
10
|
%
|
||||
South Central
|
|
1,619
|
|
1,492
|
|
9
|
%
|
|
309.3
|
|
|
266.7
|
|
|
16
|
%
|
|
191,000
|
|
|
178,800
|
|
|
7
|
%
|
||||
Southwest
|
|
383
|
|
279
|
|
37
|
%
|
|
76.0
|
|
|
54.0
|
|
|
41
|
%
|
|
198,400
|
|
|
193,500
|
|
|
3
|
%
|
||||
West
|
|
1,002
|
|
626
|
|
60
|
%
|
|
319.9
|
|
|
191.5
|
|
|
67
|
%
|
|
319,300
|
|
|
305,900
|
|
|
4
|
%
|
||||
|
|
5,182
|
|
4,118
|
|
26
|
%
|
|
$
|
1,223.3
|
|
|
$
|
884.3
|
|
|
38
|
%
|
|
$
|
236,100
|
|
|
$
|
214,700
|
|
|
10
|
%
|
Homebuilding Operating Margin Analysis
|
||||||
|
|
Percentages of Related Revenues
|
||||
|
|
Three Months Ended
December 31, |
||||
|
|
2012
|
|
2011
|
||
Gross profit – Home sales
|
|
18.8
|
%
|
|
16.8
|
%
|
Gross profit – Land/lot sales and other
|
|
17.2
|
%
|
|
100.0
|
%
|
Effect of inventory impairments and land option cost write-offs
on total homebuilding gross profit
|
|
(0.1
|
)%
|
|
(0.2
|
)%
|
Gross profit – Total homebuilding
|
|
18.7
|
%
|
|
16.8
|
%
|
Selling, general and administrative expense
|
|
11.4
|
%
|
|
13.4
|
%
|
Interest expense
|
|
0.3
|
%
|
|
0.8
|
%
|
Other (income)
|
|
(0.3
|
)%
|
|
(0.2
|
)%
|
Income before income taxes
|
|
7.3
|
%
|
|
2.8
|
%
|
|
|
Three Months Ended December 31,
|
||||||||||||||||||||
|
|
2012
|
|
2011
|
||||||||||||||||||
|
|
Homebuilding
Revenues
|
|
Homebuilding
Income (Loss)
Before
Income Taxes
(1)
|
|
% of
Region
Revenues
|
|
Homebuilding
Revenues
|
|
Homebuilding
Income (Loss)
Before
Income Taxes
(1)
|
|
% of
Region
Revenues
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||||
East
|
|
$
|
137.4
|
|
|
$
|
7.0
|
|
|
5.1
|
%
|
|
$
|
118.8
|
|
|
$
|
2.5
|
|
|
2.1
|
%
|
Midwest
|
|
89.4
|
|
|
(2.0
|
)
|
|
(2.2
|
)%
|
|
57.7
|
|
|
(7.1
|
)
|
|
(12.3
|
)%
|
||||
Southeast
|
|
291.5
|
|
|
19.4
|
|
|
6.7
|
%
|
|
196.9
|
|
|
6.7
|
|
|
3.4
|
%
|
||||
South Central
|
|
310.5
|
|
|
25.2
|
|
|
8.1
|
%
|
|
266.7
|
|
|
15.4
|
|
|
5.8
|
%
|
||||
Southwest
|
|
76.0
|
|
|
9.8
|
|
|
12.9
|
%
|
|
54.0
|
|
|
2.1
|
|
|
3.9
|
%
|
||||
West
|
|
328.4
|
|
|
30.8
|
|
|
9.4
|
%
|
|
191.5
|
|
|
5.4
|
|
|
2.8
|
%
|
||||
|
|
$
|
1,233.2
|
|
|
$
|
90.2
|
|
|
7.3
|
%
|
|
$
|
885.6
|
|
|
$
|
25.0
|
|
|
2.8
|
%
|
(1)
|
Expenses maintained at the corporate level consist primarily of interest and property taxes, which are capitalized and amortized to cost of sales or expensed directly, and the expenses related to operating our corporate office. The amortization of capitalized interest and property taxes is allocated to each segment based on the segment’s revenue, while interest expense and those expenses associated with the corporate office are allocated to each segment based on the segment’s inventory balances.
|
|
As of December 31, 2012
|
|
As of September 30, 2012
|
||||||||||||||||||
|
Land/Lots
Owned
|
|
Lots
Controlled
Under Land and Lot
Option
Purchase
Contracts
(1)
|
|
Total
Land/Lots
Owned and
Controlled
|
|
Homes
in
Inventory
|
|
Land/Lots
Owned
|
|
Lots
Controlled
Under Land and Lot
Option
Purchase
Contracts
(1)
|
|
Total
Land/Lots
Owned and
Controlled
|
|
Homes
in
Inventory
|
||||||
East
|
13,600
|
|
|
7,100
|
|
|
20,700
|
|
|
1,600
|
|
11,600
|
|
|
7,100
|
|
|
18,700
|
|
|
1,500
|
Midwest
|
5,200
|
|
|
1,300
|
|
|
6,500
|
|
|
1,000
|
|
5,000
|
|
|
1,100
|
|
|
6,100
|
|
|
800
|
Southeast
|
29,900
|
|
|
19,300
|
|
|
49,200
|
|
|
4,000
|
|
24,900
|
|
|
20,500
|
|
|
45,400
|
|
|
3,400
|
South Central
|
38,800
|
|
|
21,800
|
|
|
60,600
|
|
|
4,700
|
|
25,700
|
|
|
22,300
|
|
|
48,000
|
|
|
4,200
|
Southwest
|
6,300
|
|
|
6,800
|
|
|
13,100
|
|
|
900
|
|
5,200
|
|
|
4,200
|
|
|
9,400
|
|
|
1,000
|
West
|
24,100
|
|
|
3,100
|
|
|
27,200
|
|
|
2,000
|
|
22,200
|
|
|
2,900
|
|
|
25,100
|
|
|
2,100
|
|
117,900
|
|
|
59,400
|
|
|
177,300
|
|
|
14,200
|
|
94,600
|
|
|
58,100
|
|
|
152,700
|
|
|
13,000
|
|
66
|
%
|
|
34
|
%
|
|
100
|
%
|
|
|
|
62
|
%
|
|
38
|
%
|
|
100
|
%
|
|
|
(1)
|
Excludes approximately
4,200
and
5,200
lots at
December 31, 2012
and
September 30, 2012
, respectively, representing lots controlled under lot option contracts for which we do not expect to exercise our option to purchase the land or lots, but the underlying contracts have yet to be terminated. We have reserved the deposits related to these contracts.
|
|
|
Three Months Ended December 31,
|
|||||||
|
|
2012
|
|
2011
|
|
% Change
|
|||
Number of first-lien loans originated or brokered by
DHI Mortgage for D.R. Horton homebuyers
|
|
3,035
|
|
|
2,458
|
|
|
23
|
%
|
Number of homes closed by D.R. Horton
|
|
5,182
|
|
|
4,118
|
|
|
26
|
%
|
DHI Mortgage capture rate
|
|
59
|
%
|
|
60
|
%
|
|
|
|
Number of total loans originated or brokered
by DHI Mortgage for D.R. Horton homebuyers
|
|
3,052
|
|
|
2,469
|
|
|
24
|
%
|
Total number of loans originated or brokered by DHI Mortgage
|
|
3,670
|
|
|
2,969
|
|
|
24
|
%
|
Captive business percentage
|
|
83
|
%
|
|
83
|
%
|
|
|
|
Loans sold by DHI Mortgage to third parties
|
|
3,859
|
|
|
3,025
|
|
|
28
|
%
|
|
|
Three Months Ended December 31,
|
|||||||||
|
|
2012
|
|
2011
|
|
% Change
|
|||||
|
|
(In millions)
|
|||||||||
Loan origination fees
|
|
$
|
5.1
|
|
|
$
|
4.4
|
|
|
16
|
%
|
Sale of servicing rights and gains from sale of mortgages
|
|
28.0
|
|
|
11.8
|
|
|
137
|
%
|
||
Recourse expense
|
|
(0.5
|
)
|
|
(1.7
|
)
|
|
(71
|
)%
|
||
Sale of servicing rights and gains from sale of mortgages, net
|
|
27.5
|
|
|
10.1
|
|
|
172
|
%
|
||
Other revenues
|
|
2.4
|
|
|
1.7
|
|
|
41
|
%
|
||
Reinsurance expense
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(80
|
)%
|
||
Other revenues, net
|
|
2.3
|
|
|
1.2
|
|
|
92
|
%
|
||
Total mortgage operations revenues
|
|
34.9
|
|
|
15.7
|
|
|
122
|
%
|
||
Title policy premiums, net
|
|
7.0
|
|
|
5.3
|
|
|
32
|
%
|
||
Total revenues
|
|
41.9
|
|
|
21.0
|
|
|
100
|
%
|
||
General and administrative expense
|
|
25.7
|
|
|
18.9
|
|
|
36
|
%
|
||
Interest expense
|
|
1.0
|
|
|
0.9
|
|
|
11
|
%
|
||
Interest and other (income)
|
|
(2.5
|
)
|
|
(3.0
|
)
|
|
(17
|
)%
|
||
Income before income taxes
|
|
$
|
17.7
|
|
|
$
|
4.2
|
|
|
321
|
%
|
|
|
Percentages of
Financial Services Revenues
(1)
|
||||
|
|
Three Months Ended
December 31, |
||||
|
|
2012
|
|
2011
|
||
Recourse and reinsurance expense
|
|
1.4
|
%
|
|
9.5
|
%
|
General and administrative expense
|
|
60.5
|
%
|
|
81.5
|
%
|
Interest expense
|
|
2.4
|
%
|
|
3.9
|
%
|
Interest and other (income)
|
|
(5.9
|
)%
|
|
(12.9
|
)%
|
Income before income taxes
|
|
41.6
|
%
|
|
18.1
|
%
|
(1)
|
Excludes the effects of recourse and reinsurance charges on financial services revenues.
|
•
|
potential deterioration in homebuilding industry conditions and the current weak U.S. economy;
|
•
|
the cyclical nature of the homebuilding industry and changes in general 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 for 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 debt obligations 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 successfully;
|
•
|
the impact of an inflationary or deflationary environment;
|
•
|
our ability to realize the full amount of our deferred income tax asset; and
|
•
|
information technology failures and data security breaches.
|
|
|
Nine Months
Ending September 30, 2013 |
|
Fiscal Year Ending September 30,
|
|
Fair Value at December 31, 2012
|
||||||||||||||||||||||||||||||
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
|
||||||||||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed rate
|
|
$
|
187.0
|
|
|
$
|
783.8
|
|
|
$
|
157.7
|
|
|
$
|
542.9
|
|
|
$
|
350.0
|
|
|
$
|
—
|
|
|
$
|
350.0
|
|
|
$
|
2,371.4
|
|
|
$
|
2,768.1
|
|
Average interest rate
|
|
7.1
|
%
|
|
8.3
|
%
|
|
5.4
|
%
|
|
6.4
|
%
|
|
5.0
|
%
|
|
—
|
%
|
|
4.5
|
%
|
|
6.5
|
%
|
|
|
||||||||||
Variable rate
|
|
$
|
169.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
269.4
|
|
|
$
|
269.4
|
|
Average interest rate
|
|
2.8
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.8
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.5
|
%
|
|
|
(a)
|
|
Exhibits.
|
|||
|
|
3.1
|
|
|
Certificate of Amendment of the Amended and Restated Certificate of Incorporation, as amended, of the Company dated January 31, 2006, and the Amended and Restated Certificate of Incorporation, as amended, of the Company dated March 18, 1992. (1)
|
|
|
3.2
|
|
|
Amended and Restated Bylaws of the Company. (2)
|
|
|
10.1
|
|
|
Executive Compensation Summary - Chairman and Chief Executive Officer. (3)
|
|
|
10.2
|
|
|
Executive Compensation Summary - Other Executive Officers. (4)
|
|
|
10.3
|
|
|
Director Compensation Summary. (5)
|
|
|
10.4
|
|
|
Form of Restricted Stock Unit Agreement (Outside Director) pursuant to the Company's 2006 Stock Incentive Plan, as amended and restated. (*)
|
|
|
10.5
|
|
|
Amendment No. 1 to Credit Agreement, dated November 1, 2012 by and among D.R. Horton, Inc., The Royal Bank of Scotland plc, as Administrative Agent, and the Lenders named therein. (6)
|
|
|
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. (*)
|
|
|
101
|
|
|
The following financial statements from D
.R. Horton, Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012, filed on January 29, 2013, fo
rmatted in XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
(1)
|
Incorporated by reference from Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2005, filed with the SEC on February 2, 2006.
|
(2)
|
Incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K dated July 30, 2009, filed with the SEC on August 5, 2009.
|
(3)
|
Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K dated November 8, 2012, filed with the SEC on November 15, 2012.
|
(4)
|
Incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K dated November 8, 2012, filed with the SEC on November 15, 2012.
|
(5)
|
Incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K dated November 8, 2012, filed with the SEC on November 15, 2012.
|
(6)
|
Incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K dated November 1, 2012, filed with the SEC on November 5, 2012.
|
|
|
|
D.R. HORTON, INC.
|
Date:
|
January 29, 2013
|
|
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)
|
(a)
|
The 2006 SIP is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
|
(b)
|
The grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past. All decisions with respect to future award grants, if any, will be at the sole discretion of the Company;
|
(c)
|
The Award and the Participant's participation in the 2006 SIP will not be interpreted to form an employment contract or service contract or relationship with the Company or any Affiliate;
|
(d)
|
The Participant is voluntarily participating in the 2006 SIP;
|
(e)
|
The future value of the underlying Shares is unknown and cannot be predicted with certainty.
|
(a)
|
Responsibility for Taxes
. Regardless of any action taken by the Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant's participation in the 2006 SIP and legally applicable to the Participant
(the “
Tax-Related Items
”)
,
the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant's responsibility and may exceed the amount actually withheld by the Company. The Participant further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of Shares acquired pursuant to such settlement, or the receipt of any dividends, and (b) does not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Participant's liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant has become subject to tax in more than one jurisdiction between the Date of Award and the date of any relevant taxable or tax
|
(b)
|
Withholding in Shares
. Subject to applicable law, the Company may require the Participant to satisfy Tax-Related Items by deducting from the Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Shares having a fair market value equal to the closing price of the Company's common stock as of the date on which the Tax-Related Items arise, not in excess of the amount of such Tax-Related Items.
|
(c)
|
Alternative Withholding Methods
. The Company may satisfy its obligations for Tax-Related Items by:
|
(a)
|
Description of Electronic Delivery. The 2006 SIP documents, which may include but do not necessarily include: the 2006 SIP, this Agreement, the 2006 SIP Prospectus, and any reports of the Company provided generally to the Company's stockholders, may be delivered to the Participant electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the 2006 SIP, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.
|
(b)
|
Consent to Electronic Delivery. The Participant acknowledges that the Participant has read the “Delivery of Documents and Notices” section of this Agreement and consents to the electronic delivery of the 2006 SIP documents and Agreement, as described in this section. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in this section or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents as described in this section.
|
By:
|
____________________________________________
|
By:
|
____________________________________________
|
|
|
Three Months Ended
December 31, 2012
|
|
For the Fiscal Year Ended September 30,
|
||||||||||||||||||||
|
|
|
2012
|
|
2011
|
|
2010
|
|
2009 (1)
|
|
2008
|
|||||||||||||
|
|
($ in millions)
|
||||||||||||||||||||||
Consolidated income (loss) before income taxes
|
|
$
|
107.9
|
|
|
$
|
242.9
|
|
|
$
|
12.1
|
|
|
$
|
99.5
|
|
|
$
|
(556.8
|
)
|
|
$
|
(2,631.8
|
)
|
Noncontrolling interests in losses before income taxes of majority owned subsidiaries which have incurred losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(3.1
|
)
|
|
(0.6
|
)
|
||||||
Amortization of capitalized interest
|
|
24.9
|
|
|
94.1
|
|
|
92.0
|
|
|
124.2
|
|
|
136.6
|
|
|
375.8
|
|
||||||
Interest expensed
|
|
5.3
|
|
|
31.5
|
|
|
57.0
|
|
|
94.4
|
|
|
110.3
|
|
|
56.6
|
|
||||||
Earnings (loss)
|
|
$
|
138.1
|
|
|
$
|
368.5
|
|
|
$
|
161.1
|
|
|
$
|
317.9
|
|
|
$
|
(313.0
|
)
|
|
$
|
(2,200.0
|
)
|
Interest incurred
|
|
$
|
39.2
|
|
|
$
|
128.7
|
|
|
$
|
136.7
|
|
|
$
|
181.3
|
|
|
$
|
215.1
|
|
|
$
|
254.3
|
|
Fixed charges
|
|
$
|
39.2
|
|
|
$
|
128.7
|
|
|
$
|
136.7
|
|
|
$
|
181.3
|
|
|
$
|
215.1
|
|
|
$
|
254.3
|
|
Ratio of earnings to fixed charges
|
|
3.52
|
|
|
2.86
|
|
|
1.18
|
|
|
1.75
|
|
|
—
|
|
|
—
|
|
||||||
Coverage deficiency
|
|
|
|
|
|
|
|
|
|
|
$
|
528.1
|
|
|
$
|
2,454.3
|
|
(1)
|
On October 1, 2009, the Company adopted the FASB’s authoritative guidance for accounting for debt with conversion options, which specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. As a result, fiscal 2009 interest expense and interest incurred were increased by $4.5 million and $8.2 million, respectively, due to the retrospective application of the change in accounting for the Company’s 2% convertible senior notes issued in May 2009.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of D.R. Horton, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
|
/s/ D
ONALD
J. T
OMNITZ
|
|
|
|
Donald J. Tomnitz
Vice Chairman, President and
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of D.R. Horton, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
|
/s/ B
ILL
W. W
HEAT
|
|
|
|
Bill W. Wheat
Executive Vice President and
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
|
January 29, 2013
|
By:
|
|
/s/ D
ONALD
J. T
OMNITZ
|
|
|
|
|
|
Donald J. Tomnitz
Vice Chairman, President and
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
|
January 29, 2013
|
By:
|
|
/s/ B
ILL
W. W
HEAT
|
|
|
|
|
|
Bill W. Wheat
Executive Vice President and
Chief Financial Officer
|