D.R. Horton Files Q1 2025 10-Q

Ticker: DHI · Form: 10-Q · Filed: 2025-01-23T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, real-estate, housing, financials

Related Tickers: LEN, TOL, PHM

TL;DR

DHI's Q1 2025 10-Q is in. Check financials for housing market insights.

AI Summary

D.R. Horton, Inc. filed its 10-Q for the period ending December 31, 2024. The company reported its financial results for the first quarter of fiscal year 2025. Key financial data and operational details for the period were disclosed in this filing.

Why It Matters

This filing provides investors with the latest financial performance data for D.R. Horton, a major homebuilder, allowing them to assess the company's health and outlook in the current housing market.

Risk Assessment

Risk Level: medium — The filing contains standard financial disclosures, but the housing market is subject to economic fluctuations and interest rate changes, which can impact a homebuilder's performance.

Key Numbers

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is for the quarter ended December 31, 2024.

When was this 10-Q filed with the SEC?

This 10-Q was filed on January 23, 2025.

What is the company's primary business as indicated by its SIC code?

The company's Standard Industrial Classification (SIC) code is 1531, which corresponds to Operative Builders.

Where is D.R. Horton, Inc. headquartered?

D.R. Horton, Inc. is headquartered in Arlington, Texas.

What is the fiscal year end for D.R. Horton, Inc.?

The fiscal year end for D.R. Horton, Inc. is September 30.

Filing Stats: 4,671 words · 19 min read · ~16 pages · Grade level 6.7 · Accepted 2025-01-23 14:29:04

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (unaudited)

ITEM 1. Financial Statements (unaudited) Consolidated Balance Sheets at December 31, 2024 and September 30, 2024 3 Consolidated Statements of Operations for the three months ended December 31, 2024 and 2023 4 Consolidated Statements of Total Equity for the three months ended December 31, 2024 and 2023 5 Consolidated Statements of Cash Flows for the three months ended December 31, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures about Market Risk

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 55

Controls and Procedures

ITEM 4. Controls and Procedures 56

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

ITEM 1. Legal Proceedings 57

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 58

Other Information

ITEM 5. Other Information 58

Exhibits

ITEM 6. Exhibits 59

SIGNATURES

SIGNATURES 60 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS D.R. HORTON, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2024 September 30, 2024 (In millions) (Unaudited) ASSETS Cash and cash equivalents $ 3,050.1 $ 4,516.4 Restricted cash 18.9 27.6 Total cash, cash equivalents and restricted cash 3,069.0 4,544.0 Inventories: Construction in progress and finished homes 8,701.4 8,875.8 Residential land and lots — developed and under development 14,093.5 12,948.1 Land held for development 288.0 160.6 Land held for sale 8.7 12.7 Rental properties 2,988.9 2,906.0 Total inventory 26,080.5 24,903.2 Mortgage loans held for sale 1,794.4 2,477.5 Deferred income taxes, net of valuation allowance of $ 14.9 million at December 31, 2024 and September 30, 2024 127.4 167.5 Property and equipment, net 524.2 531.0 Other assets 3,270.7 3,317.6 Goodwill 163.5 163.5 Total assets $ 35,029.7 $ 36,104.3 LIABILITIES Accounts payable $ 1,372.6 $ 1,345.5 Accrued expenses and other liabilities 3,096.5 3,016.7 Notes payable 5,097.7 5,917.7 Total liabilities 9,566.8 10,279.9 Commitments and contingencies (Note K) EQUITY Preferred stock, $ .10 par value, 30,000,000 shares authorized, no shares issued — — Common stock, $ .01 par value, 1,000,000,000 shares authorized, 403,275,949 shares issued and 317,652,200 shares outstanding at December 31, 2024 and 402,848,342 shares issued and 324,027,360 shares outstanding at September 30, 2024 4.0 4.0 Additional paid-in capital 3,508.2 3,490.7 Retained earnings 28,667.4 27,951.0 Treasury stock, 85,623,749 shares and 78,820,982 shares at December 31, 2024 and September 30, 2024, respectively, at cost ( 7,235.7 ) ( 6,132.9 ) Stockholders' equity 24,943.9 25,312.8 Noncontrolling interests 519.0 511.6 Total equity 25,462.9 25,824.4 Total liabilities and equity $ 35,029.7 $ 36,104.3 See accompanying notes to consolidated financial statements. 3 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) December 31, 2024 NOTE A – BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its wholly-owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company, unless the context otherwise requires. Noncontrolling interests represent the proportionate equity interests in consolidated entities that are not 100% owned by the Company. As of December 31, 2024, the Company owned a 62 % controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 38 % interest the Company does not own is accounted for as noncontrolling interests. All intercompany accounts, transactions and balances have been eliminated in consolidation. The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2024, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2024 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 NOTE B – SEGMENT INFORMATION The Company is a national homebuilder that is primarily engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in 126 markets across 36 states. The Company's operating segments are its 92 homebuilding divisions, its rental operations, its majority-owned Forestar residential lot development operations, its financial services operations and its other business activities. The Company's reporting segments are its homebuilding reporting segments, its rental operations segment, its Forestar lot development segment and its financial services segment. Homebuilding The homebuilding operating segments are aggregated into six reporting segments. The reporting segments and the states in which the Company has homebuilding operations are as follows: Northwest: Colorado, Oregon, Utah and Washington Southwest: Arizona, California, Hawaii, Nevada and New Mexico South Central: Arkansas, Oklahoma and Texas Southeast: Alabama, Florida, Louisiana and Mississippi East: Georgia, North Carolina, South Carolina and Tennessee North: Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and Wisconsin The Company's homebuilding divisions design, build and sell single-family detached homes on lots they develop and on fully developed lots purchased ready for home construction. To a lesser extent, the homebuilding divisions also build and sell attached homes, such as townhomes, duplexes and triplexes. Most of the revenue generated by the Company's homebuilding operations is from the sale of completed homes and to a lesser extent from the sale of land and lots. Rental The Company's rental segment consists of single-family and multi-family rental operations. The single-family rental operations construct a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 The accounting policies of the reporting segments are described throughout Note A included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2024. Financial information relating to the Company's reporting segments is as follows: December 31, 2024 Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated (In millions) Assets Cash and cash equivalents $ 2,547.9 $ 113.0 $ 132.0 $ 238.6 $ 18.6 $ 3,050.1 Restricted cash 3.3 1.6 — 14.0 — 18.9 Inventories: Construction in progress and finished homes 8,808.0 — — — ( 106.6 ) 8,701.4 Residential land and lots — developed and under development 11,799.4 — 2,484.1 — ( 190.0 ) 14,093.5 Land held for development 35.3 — 252.7 — — 288.0 Land held for sale 8.7 — — — — 8.7 Rental properties — 2,985.3 — — 3.6 2,988.9 20,651.4 2,985.3 2,736.8 — ( 293.0 ) 26,080.5 Mortgage loans held for sale — — — 1,794.4 — 1,794.4 Deferred income taxes, net 169.2 ( 14.7 ) — — ( 27.1 ) 127.4 Property and equipment, net 492.1 1.3 6.8 3.9 20.1 524.2 Other assets 2,939.6 36.4 85.0 141.0 68.7 3,270.7 Goodwill 134.3 — — — 29.2 163.5 $ 26,937.8 $ 3,122.9 $ 2,960.6 $ 2,191.9 $ ( 183.5 ) $ 35,029.7 Liabilities Accounts payable $ 1,112.7 $ 268.6 $ 78.6 $ 0.1 $ ( 87.4 ) $ 1,372.6 Accrued expenses and other liabilities 2,712.3 25.8 461.2 262.9 ( 365.7 ) 3,096.5 Notes payable 2,448.2 1,055.8 806.8 786.9 — 5,097.7 $ 6,273.2 $ 1,350.2 $ 1,346.6 $ 1,049.9 $ ( 453.1 ) $ 9,566.8 ______________ (1) Amounts include the balances of the Company's other businesses and the elimination of intercompany transactions. 9 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 September 30, 2024 Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated (In millions) Assets Cash and cash equivalents $ 3,623.0 $ 157.6 $ 481.2 $ 242.3 $ 12.3 $ 4,516.4 Restricted cash 4.8 2.2 — 20.6 — 27.6 Inventories: Construction in progress and finished homes 8,986.1 — — — ( 110.3 ) 8,875.8 Residential land and lots — developed and under development 11,011.7 — 2,126.1 — ( 189.7 ) 12,948.1 Land held for development 20.5 — 140.1 — — 160.6 Land held for sale 12.7 — — — — 12.7 Rental properties — 2,902.4 — — 3.6 2,906.0 20,031.0 2,902.4 2,266.2 — ( 296.4 ) 24,903.2 Mortgage loans held for sale — — — 2,477.5 — 2,477.5 Deferred income taxes, net 211.6 ( 14.7 ) — — ( 29.4 ) 167.5 Property and equipment, net 500.2 1.1 7.1 4.0 18.6 531.0 Other assets 2,976.5 74.5 85.6 212.3 ( 31.3 ) 3,317.6 Goodwill 134.3 — — — 29.2 163.5 $ 27,481.4 $ 3,123.1 $ 2,840.1 $ 2,956.7 $ ( 297.0 ) $ 36,104.3 Liabilities Accounts payable $ 1,046.1 $ 474.2 $ 85.9 $ 0.8 $ ( 261.5 ) $ 1,345.5 Accrued expenses and other liabilities 2,552.0 67.8 452.8 234.6 ( 290.5 ) 3,016.7 Notes payable 2,926.8 750.7 706.4 1,533.8 — 5,917.7 $ 6,524.9 $ 1,292.7 $ 1,245.1 $ 1,769.2 $ ( 552.0 ) $ 10,279.9 ______________ (1) Amounts include the balances of the Company's other businesses and the elimination of intercompany transactions. 10 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 Three Months Ended December 31, 2024 Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated (In millions) Revenues Home sales $ 7,146.0 $ — $ — $ — $ — $ 7,146.0 Land/lot sales and other 21.2 — 250.4 — ( 204.7 ) 66.9 Rental property sales — 217.8 — — — 217.8 Financial services — — — 182.3 — 182.3 7,167.2 217.8 250.4 182.3 ( 204.7 ) 7,613.0 Cost of sales Home sales (2) 5,522.0 — — — ( 53.3 ) 5,468.7 Land/lot sales and other 13.8 — 194.2 — ( 169.9 ) 38.1 Rental property sales — 179.4 — — — 179.4 Inventory and land option charges 11.8 3.6 1.2 — — 16.6 5,547.6 183.0 195.4 — ( 223.2 ) 5,702.8 Selling, general and administrative expense 636.6 46.4 36.0 154.2 4.9 878.1 Other (income) expense ( 29.9 ) ( 23.5 ) ( 2.9 ) ( 20.5 ) ( 1.0 ) ( 77.8 ) Income before income taxes $ 1,012.9 $ 11.9 $ 21.9 $ 48.6 $ 14.6 $ 1,109.9 Summary Cash Flow Information Depreciation and amortization $ 22.2 $ 0.5 $ 0.8 $ 0.4 $ 0.2 $ 24.1 Cash provided by (used in) operating activities $ 552.0 $ ( 283.3 ) $ ( 449.9 ) $ 813.3 $ 14.6 $ 646.7 ______________ (1) Amounts include the results of the Company's other businesses and the elimination of intercompany transactions. (2) Amount in the Eliminations and Other column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers. 11 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 Three Months Ended December 31, 2023 Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated (In millions) Revenues Home sales $ 7,276.4 $ — $ — $ — $ — $ 7,276.4 Land/lot sales and other 20.3 — 305.9 — ( 264.5 ) 61.7 Rental property sales — 195.3 — — — 195.3 Financial services — — — 192.6 — 192.6 7,296.7 195.3 305.9 192.6 ( 264.5 ) 7,726.0 Cost of sales Home sales (2) 5,608.0 — — — ( 54.2 ) 5,553.8 Land/lot sales and other 13.2 — 232.8 — ( 222.6 ) 23.4 Rental property sales — 141.3 — — ( 4.8 ) 136.5 Inventory and land option charges 5.5 0.4 0.2 — — 6.1 5,626.7 141.7 233.0 — ( 281.6 ) 5,719.8 Selling, general and administrative expense 603.4 47.4 28.0 151.5 4.7 835.0 Other (income) expense ( 29.5 ) ( 25.1 ) ( 6.3 ) ( 24.9 ) 9.5 ( 76.3 ) Income before income taxes $ 1,096.1 $ 31.3 $ 51.2 $ 66.0 $ 2.9 $ 1,247.5 Summary Cash Flow Information Depreciation and amortization $ 18.0 $ 0.6 $ 0.8 $ 0.5 $ 0.1 $ 20.0 Cash provided by (used in) operating activities $ 31.2 $ ( 516.2 ) $ ( 156.7 ) $ 464.7 $ 23.6 $ ( 153.4 ) ______________ (1) Amounts include the results of the Company's other businesses and the elimination of intercompany transactions. (2) Amount in the Eliminations and Other column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers. 12 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 Homebuilding Inventories by Reporting Segment (1) December 31, 2024 September 30, 2024 (In millions) Northwest $ 1,946.0 $ 1,935.2 Southwest 3,187.9 3,278.9 South Central 3,920.9 3,728.0 Southeast 4,328.4 4,284.5 East 4,288.2 3,978.2 North 2,696.3 2,551.2 Corporate and unallocated (2) 283.7 275.0 $ 20,651.4 $ 20,031.0 ____________________________ (1) Homebuilding inventories are the only assets included in the measure of homebuilding segment assets used by the Company's chief operating decision makers. (2) Corporate and unallocated consists primarily of homebuilding capitalized interest and property taxes. Homebuilding Results by Reporting Segment Three Months Ended December 31, 2024 2023 (In millions) Revenues Northwest $ 533.2 $ 577.9 Southwest 1,140.1 1,051.4 South Central 1,486.9 1,669.2 Southeast 1,749.8 1,999.6 East 1,314.5 1,268.3 North 942.7 730.3 $ 7,167.2 $ 7,296.7 Income before Income Taxes Northwest $ 76.2 $ 69.5 Southwest 168.4 134.9 South Central 221.3 271.6 Southeast 222.8 329.4 East 194.4 204.6 North 129.8 86.1 $ 1,012.9 $ 1,096.1 13 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 NOTE C – INVENTORIES At the end of each quarter, the Company reviews the performance and outlook for all of its communities and land inventories for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary. As of December 31, 2024, the Company performed detailed impairment evaluations of communities and land inventories and determined that communities with a combined carrying value of $ 40.2 million were impaired on a non-recurring basis using Level 3 inputs. As a result, impairment charges of $ 3.2 million were recorded during the three months ended December 31, 2024 to reduce the carrying value of the related inventories to fair value. There were no impairment charges recorded in the prior year quarter. During the three months ended December 31, 2024, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 13.4 million compared to $ 6.1 million in the prior year quarter. Inventory impairments and land option charges are included in cost of sales in the consolidated statements of operations. 14 Table of Contents D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued) December 31, 2024 NOTE D – NOTES PAYABLE The Company's notes payable at their carrying amounts consist of the following: December 31, 2024 September 30, 2024 (In millions) Homebuilding Revolving credit facility $ — $ — 2.5 % senior notes due 2024 (1) — 500.0 2.6 % senior notes due 2025 (1) 499.2 499.0 1.3 % senior notes due 2026 (1) 598.0 597.7 1.4 % senior notes due 2027 (1) 497.6 497.4 5.0 % senior notes due 2034 (1) 686.8 686.5 Other notes 166.6 146.2 2,448.2 2,926.8 Rental Revolving credit facility 1,050.0 745.0 Other notes 5.8 5.7 1,055.8 750.7 Forestar Revolving credit facility 100.0 — 3.85 % senior notes due 2026 (2) 398.6 398.4 5.0 % senior notes due 2028 (2) 298.3 298.1 Other notes 9.9 9.9 806.8 706.4 Financial Services Mortgage repurchase facilities: Committed facility 669.8 1,229.3 Uncommitted facility 117.1 304.5 786.9 1,533.8 Total notes payable (3) $ 5,097.7 $ 5,917.7 _____________ (1) Debt issuance costs

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