D.R. Horton Reports Fiscal 2007 Third Quarter Results

D.R. Horton, Inc. (NYSE:DHI), America's Builder, Thursday (July 26, 2007), reported a net loss for its third fiscal quarter ended June 30, 2007 of $823.8 million, or $2.62 per diluted share. The quarterly results included pre-tax charges to cost of sales of $835.8 million for inventory impairments and $16.2 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the same quarter of fiscal 2006 was $292.8 million, or $0.93 per diluted share. Homebuilding revenue for the third quarter of fiscal 2007 totaled $2.5 billion, compared to $3.6 billion in the same quarter of fiscal 2006. Homes closed in the current quarter totaled 9,643, compared to 13,377 homes closed in the year ago quarter.

For the nine months ended June 30, 2007, the Company reported a net loss totaling $662.3 million, or $2.11 per diluted share. The nine-month results included pre-tax charges to cost of sales of $943.9 million for inventory impairments and $66.9 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the nine months ended June 30, 2006 was $955.6 million, or $3.02 per diluted share. Homebuilding revenue for the nine months ended June 30, 2007 totaled $8.0 billion, compared to $10.0 billion for the same period of fiscal 2006. Homes closed in the nine-month period totaled 29,637, compared to 35,838 homes closed in the same period of fiscal 2006.

The Company's sales backlog of homes under contract at June 30, 2007 was 15,801 homes ($4.4 billion), compared to 24,956 homes ($7.4 billion) at June 30, 2006. As previously reported, net sales orders for the third quarter ended June 30, 2007 totaled 8,559 homes ($2.0 billion), compared to 14,316 homes ($3.8 billion) for the same quarter of fiscal 2006. Net sales orders for the first nine months of fiscal 2007 were 27,313 homes ($6.9 billion), compared to 41,550 homes ($11.4 billion) for the same period of fiscal 2006.

Donald R. Horton, Chairman of the Board, said, "Market conditions in the homebuilding industry continue to be challenging as inventory levels of both new and existing homes remain at historically high levels, both as an absolute number and in terms of months' supply. Increased use of sales incentives continues to put pressure on profit margins. In addition, home price appreciation over the past few years, higher interest rates and tightened credit standards in the mortgage industry are all negatively impacting affordability. Even in the midst of this volatile housing market, we produced an operating profit before impairments this quarter and generated positive cash flow from operations for the fourth consecutive quarter.

"We believe that market conditions will continue to be challenging, and our quarter-end impairment evaluations incorporated our more cautious outlook for the industry. For the remainder of fiscal 2007, we will focus on generating cash, reducing inventory balances and paying down outstanding debt to maintain a strong balance sheet."

The Company will host a conference call on Thursday, July 26, 2007 at 10:00 a.m. Eastern Daylight Time. The dial-in number is 800-374-9096, and the call will also be webcast fromwww.drhorton.comon the "Investor Relations" page.

D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Northeast, Southeast, South Central, Southwest, California and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.

Portions of this document may constitute "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include our expectation that market conditions will continue to be challenging and that during the remainder of fiscal 2007 we will focus on generating cash, reducing inventory balances and paying down outstanding debt to maintain a strong balance sheet. Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: changes in general economic, real estate, construction and other business conditions; changes in interest rates, the availability of mortgage financing or increases in the costs of owning a home; governmental regulations and environmental matters; the Company's substantial debt; competitive conditions within the industry; the availability of capital to the Company on favorable terms; the Company's ability to successfully effect its operational strategies; and warranty and product liability claims. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton's annual report on Form 10-K and most recent quarterly report on Form 10-Q, which are filed with the Securities and Exchange Commission.

WEBSITE ADDRESS:www.drhorton.com

D.R. HORTON, INC.CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)Three Months Ended June 30,Nine Months Ended June 30,2006200720062007($'s in millions, except per share amounts) Homebuilding:Revenues:Home sales$3,581.4$2,470.5$9,842.7$7,753.1Land/lot sales12.277.6119.2212.73,593.62,548.19,961.97,965.8Cost of sales:Home sales2,727.82,058.87,328.86,380.2Land/lot sales6.765.646.2187.6Inventory impairments and land option cost write-offs60.9852.071.81,010.82,795.42,976.47,446.87,578.6Gross profit (loss):Home sales853.6411.72,513.91,372.9Land/lot sales5.512.073.025.1Inventory impairments and land option cost write-offs(60.9 )(852.0)(71.8)(1,010.8)798.2(428.3)2,515.1387.2Selling, general and administrative expense356.4267.51,046.9858.9Goodwill impairment-425.6-425.6Loss on early retirement of debt-12.115.012.1Other (income)(2.9)(3.9)(13.4)(5.7)Operating income (loss) from Homebuilding444.7(1,129.6)1,466.6(903.7)Financial Services:Revenues74.250.0206.6158.3General and administrative expense50.836.0147.6119.3Interest expense8.74.124.720.5Other (income) (12.8)(8.3)(40.4)(34.2)Operating income from Financial Services27.5 18.274.752.7Income (loss) before income taxes472.2(1,111.4)1,541.3(851.0)Provision for (benefit from) income taxes179.4(287.6)585.7(188.7)Net income (loss)$292.8$(823.8)$955.6$(662.3)Basic:Net income (loss) per share$0.94$(2.62)$3.06$(2.11)Weighted average number of common shares312.8314.3312.7313.9Diluted:Net income (loss) per share$0.93$(2.62)$3.02$(2.11)Weighted average number of common shares315.8314.3316.7 313.9Other Consolidated Financial Data:Interest amortized to home and land/lot cost of sales$60.1$60.8$164.5$ 171.5Depreciation and amortization$14.3$16.4$40.7$48.3Interest incurred$94.1$80.1$260.7$253.0D.R. HORTON, INC.CONSOLIDATED BALANCE SHEET(UNAUDITED)As of June 30,2007(In millions)ASSETSHomebuilding:Cash and cash equivalents$4.9Inventories:Construction in progress and finished homes4,207.5Residential land and lots - developed and under development5,869.5Land held for development359.4Land inventory not owned150.910,587.3Property and equipment, net117.9Deferred income taxes735.9Earnest money and other assets315.3Goodwill153.311,914.6Financial Services:Cash and cash equivalents55.9Mortgage loans held for sale469.0Other assets54.5579.4$12,494.0LIABILITIESHomebuilding:Accounts payable$807.6Accrued expenses and other liabilities982.0Notes payable4,598.06,387.6Financial Services:Accounts payable and other liabilities24.8Notes payable318.8343.66,731.2Minority interests85.1STOCKHOLDERS' EQUITYCommon stock3.2Additional capital1,686.7Retained earnings4,083.5Treasury stock, at cost(95.7)5,677.7$12,494.0 D.R. HORTON, INC.($'s in millions)NET SALES ORDERSThree Months Ended June 30,Nine Months Ended June 30,2006200720062007HomesValueHomesValueHomesValueHomesValueNortheast1,979$ 510.31,148$ 308.35,663$ 1,478.03,867$ 1,030.6Southeast2,010497.11,500323.75,8451,489.14,301961.1South Central 4,290744.22,541 443.511,1781,920.87,1981,282.2Southwest3,227880.51,894409.29,4772,535.16,3641,395.0California1,708805.1804307.16,0372,754.2 3,2471,413.2West1,102395.8672237.03,3501,185.82,336838.914,316$ 3,833.08,559$ 2,028.841,550$ 11,363.027,313$ 6,921.0HOMES CLOSEDThree Months Ended June 30,Nine Months Ended June 30,20062007 20062007HomesValueHomesValueHomesValue HomesValueNortheast2,014$ 561.41,404$ 384.85,441$ 1,477.94,238$ 1,131.8Southeast1,998494.91,575367.65,6211,416.64,4971,076.3South Central3,656623.32,746490.79,1921,551.67,9361,418.7Southwest2,839738.72,298548.07,3901,955.17,1811,733.6California1,818789.3913425.15,2692,394.13,5341,597.4West1,052373.8707254.32,9251,047.42,251795.313,377$ 3,581.49,643$ 2,470.535,838$ 9,842.729,637$ 7,753.1 SALES ORDER BACKLOGAs of June 30,20062007HomesValueHomesValueNortheast4,116$ 1,149.02,531$ 695.6Southeast3,343981.91,952518.6South Central4,961893.4 3,475641.3Southwest 7,1551,962.84,9371,211.6California3,6901,763.91,801857.6West1,691604.51,105428.324,956$ 7,355.515,801$ 4,353.0 CONTACT: D.R. Horton, Inc. Stacey Dwyer, EVP, 817-390-8200


Loading