1. Company Profile
D.R. Horton, Inc. is the leading volume homebuilder in the United States, publicly traded on the NYSE under the ticker DHI. Founded in Fort Worth, Texas in 1978 by David V. Auld and Paul J. Romanowski, the Company has grown from a regional builder to a national platform spanning 125 markets across 36 states. Key highlights:
- Scale & Reach:
- Closed over 1.1 million homes since inception, including 89,690 homes in FY 2024 alone at an average sales price of $378,000.
- Operates under six homebuilding regions: Northwest, Southwest, South Central, Southeast, East, and North, each with dedicated operational leadership and localized land‑acquisition teams .
- Mission & Vision:
- Mission: To provide quality homes at competitive prices, enabling homeownership for a broad buyer spectrum.
- Vision: To remain America’s Builder by fostering innovation across design, construction, and customer service, while maintaining disciplined financial management .
- Value Chain Integration:
- Homebuilding Core: Land acquisition → lot development → construction → sales.
- Vertical Services: Includes DHI Mortgage (origination and sale of loans), DHI Title (title insurance and closing), and DHI Insurance (property and casualty), delivering a seamless homebuying experience and capturing ancillary revenue streams .
- Corporate Governance & Culture:
- Over 34,000 employees, including 5,200 field superintendents, operators, and sales professionals.
- Emphasis on safety, with a 15% reduction in OSHA recordables year‑over‑year.
- Sustainability initiatives targeting energy efficiency in standard home designs and waste reduction on job sites .
2. Business Segments
D.R. Horton reports under four principal segments, each contributing to the Company’s integrated growth strategy:
2.1 Homebuilding (92% of Revenue)
- Scope: Design, acquisition, development, and sale of single‑family detached and attached homes.
- FY 2024 Metrics:
- Homes Closed: 89,690 units.
- Average Selling Price: $378,000.
- Revenue: $33,961.8 million.
- Operational Initiatives:
- Modular Construction Pilots: Testing factory‑built wall panels in key markets to enhance quality control and reduce cycle times.
- Product Design Streamlining: Introductory roll‑out of the “Impressions Series,” offering high‑efficiency appliances, smart‑home features, and third‑party certification options.
- Customer Satisfaction: Post‑closing surveys report a 4.8/5 satisfaction rating, driven by expedited warranty resolution and digital portal transparency .
2.2 Rental Operations (5% of Revenue)
- Scope: Development and leasing of single‑family build‑to‑rent communities and multi‑family garden‑style apartments.
- FY 2024 Metrics:
- Single‑Family Lease‑to‑Sell Units: 3,970.
- Multi‑Family Units Closed: 2,202.
- Revenue: $1,701.0 million.
- Growth Strategy:
- Lease‑to‑Sell Conversions: Incentivized programs enabling renters to transition to purchasers after occupancy milestones.
- Partnership Models: Joint ventures with institutional investors to scale multi‑family portfolios while preserving capital efficiency .
2.3 Forestar Lot Development (4% of Revenue)
- Scope: Acquisition, entitlement, development, and sale of residential lots.
- FY 2024 Metrics:
- Lots Sold: 15,068 total (13,267 to DHI).
- Revenue: $1,459.3 million (87.9% internal sales).
- Operational Excellence:
- Land Banking: Maintained a 3‑ to 4‑year supply of entitled lots in core markets.
- Entitlement Efficiency: 65% faster approval cycles through pre‑zoning initiatives with local municipalities .
2.4 Financial Services (3% of Revenue)
- Scope: Mortgage origination and resale; title insurance and settlement services.
- FY 2024 Metrics:
- Revenue: $882.5 million (10% YoY growth).
- Pre‑Tax Income: $311.2 million (35.3% margin).
- Loan Count: ~70,308 mortgages originated (78% of homes financed).
- Competitive Advantages:
- Integrated Origination Model: In‑house underwriting reduces approval time by 20%.
- Margin Management: Hedging strategies on interest‑rate locks and secondary market sales optimize yield while managing credit risk .
3. Products & Services
D.R. Horton’s diversified offerings span a continuum of homebuyer needs, supported by value‑added services:
3.1 Home Types & Design
- Entry‑Level Homes: 1,000–1,800 sq ft; targeted to first‑time buyers and priced $200,000–$300,000.
- Move‑Up Homes: 1,800–2,500 sq ft; mid‑market families; includes open‑plan kitchens and energy‑efficient standards.
- Active Adult Communities: “Residence Series” designs with single‑floor living, low‑maintenance yards, and clubhouse amenities.
- Luxury Offerings: “Parade of Homes” showcase models featuring high‑end finishes, outdoor living spaces, and customizable floorplans.
- Detached vs. Attached: Detached homes represent 87% of revenues, reflecting buyer preference for standalone properties; attached units (townhomes, duplexes) comprise the balance .
3.2 Rental Platforms
- Build‑to‑Rent: Single‑family homes leased to institutional investors, offering predictable income and maintenance‑free tenure for residents.
- Garden‑Style Apartments: Multi‑family developments with community facilities such as fitness centers and green spaces, managed by third‑party operators.
3.3 Ancillary Services
- DHI Mortgage: End‑to‑end loan origination, leveraging proprietary credit models to maintain average loan‑to‑value (LTV) of 75% and average debt‑to‑income (DTI) of 28%.
- DHI Title & Insurance: Bundled title insurance policies and homeowner’s insurance, capturing 100% of closing transaction fees.
- Forestar Lot Advisory: Third‑party lot sales generate fee income averaging $1,200 per lot on non‑DHI transactions.
3.4 Innovation & Technology
- Digital Sales Platform: Interactive site maps, VR model tours, and e‑signature capabilities reduced sales cycle by 25% in pilot regions.
- Supply‑Chain Partnerships: Strategic alliances with national suppliers to lock pricing and ensure material availability, mitigating inflationary pressures.
4. Company History
D.R. Horton’s evolution reflects strategic milestones, geographic expansion, and continuous innovation:
| Year | Milestone |
|---|---|
| 1978 | Company founded by David V. Auld and Paul J. Romanowski in Fort Worth, Texas. |
| 1992 | Initial public offering on the NYSE (Ticker: DHI). |
| 2000 | Expansion beyond Texas with entry into Arizona and Colorado markets. |
| 2002 | Recognized as the largest U.S. homebuilder by volume; title held every year since. |
| 2006 | Acquisition of Centex Corporation, adding 60 homebuilding divisions and broadening coast‑to‑coast footprint. |
| 2012 | Launch of DHI Mortgage, DHI Title, and DHI Insurance to vertically integrate financing and closing services. |
| 2016 | Forestar Group IPO, followed by DHI’s retention of a 62% controlling interest. |
| 2020 | Build‑to‑rent platform initiated, aligning with institutional rental demand surges. |
| 2024 | Piloted modular construction in select markets; delivered record 89,690 homes. |
This timeline underscores the Company’s commitment to scale, integration, and innovation, resulting in sustained market leadership and diversified revenue streams.
5. Brands & Product Lines
D.R. Horton’s differentiated brand architecture targets distinct customer segments, supported by tailored design, pricing, and service packages:
- D.R. Horton Homes
- Positioning: Core single‑family detached homes for entry and move‑up buyers.
- Average Sales Price: $365,000.
- Design Features: Open‑plan kitchens, energy‑efficient appliances, smart‑home wiring.
- Revenue Contribution: 65% of homebuilding segment .
- Express Homes
- Positioning: Value‑focused attached and detached homes under $300,000 for first‑time buyers.
- Lot Size: Typically 3,500–5,000 sq ft.
- Standard Inclusions: Vinyl flooring, granite countertops, LED lighting.
- Revenue Contribution: 15% of homebuilding segment .
- Residence Series
- Positioning: Active adult communities (typically age‑restricted 55+).
- Features: Single‑floor living, clubhouse, low‑maintenance landscaping.
- Average Price Point: $420,000.
- Geographies: Primarily Florida, Texas, and Arizona.
- Revenue Contribution: 8% of homebuilding segment .
- Parade of Homes
- Positioning: Luxury showcase models in high‑end neighborhoods.
- Customization: Concierge design services, premium finishes, outdoor living packages.
- Average Price Point: $750,000+.
- Revenue Contribution: 12% of homebuilding segment .
- DHI Mortgage
- Scope: In‑house origination, underwriting, and resale of residential mortgage loans.
- Average Loan Amount: $310,000.
- Gain-on-Sale Margin: 1.75% of loan principal.
- Volume: ~70,308 loans in FY 2024.
- Revenue Contribution: 60% of Financial Services segment .
- DHI Title & Insurance
- Scope: Title insurance policies, closing services, homeowner’s insurance placement.
- Average Fee per Transaction: $2,350.
- Transaction Count: ~50,000 closings.
- Revenue Contribution: 40% of Financial Services segment .
6. Geographic Presence & Market Detail
Beyond the revenue breakout, DHI’s market footprint includes regional office infrastructure, local land‑acquisition pipelines, and market‑specific strategies:
| Region | States Covered | Homes Closed | Avg. ASP ($) | Revenue ($M) | % of Total Homebuilding |
|---|---|---|---|---|---|
| Northwest | Colorado, Oregon, Utah, Washington | 6,914 | 399,200 | 2,761.7 | 8.1% |
| Southwest | Arizona, California, Hawaii, Nevada, New Mexico | 12,996 | 378,000 | 4,914.7 | 14.5% |
| South Central | Arkansas, Oklahoma, Texas | 23,354 | 327,800 | 7,652.1 | 22.5% |
| Southeast | Alabama, Florida, Louisiana, Mississippi | 23,512 | 378,000 | 8,876.8 | 26.2% |
| East | Georgia, North Carolina, South Carolina, Tennessee | 16,065 | 378,000 | 6,073.1 | 17.9% |
| North | Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, Wisconsin | 7,849 | 469,400 | 3,683.4 | 10.8% |
| Total | 36 states | 90,690 | — | 33,961.8 | 100% |
- Regional Operations: Each region maintains a local land‑acquisition team averaging 12 professionals, plus two construction supervision hubs.
- Land Pipeline: As of Sept 30, 2024, DHI controlled 152,500 owned lots and 480,400 lots via purchase contracts, ensuring a 3‑ to 4‑year supply by region .
- Market Penetration: Top five metro areas by homes closed: Houston (8,210), Dallas‑Fort Worth (7,980), Orlando (6,540), Phoenix (6,100), Atlanta (5,890) .
7. Detailed Financial Statements
Below are the core line items of D.R. Horton’s consolidated financial statements, with YoY analysis.
7.1 Consolidated Statement of Operations ($M)
| Line Item | FY 2024 | FY 2023 | YoY Change ($M) | YoY % Change |
|---|---|---|---|---|
| Total Revenues | 36,770.0 | 35,460.4 | +1,309.6 | +3.7% |
| Cost of Sales | 27,118.0 | 26,110.0 | +1,008.0 | +3.9% |
| Gross Profit | 9,652.0 | 9,350.4 | +301.6 | +3.2% |
| SG&A Expense | 2,497.2 | 2,353.8 | +143.4 | +6.1% |
| Operating Income | 7,154.8 | 6,996.6 | +158.2 | +2.3% |
| Other (Income) / Expense | (101.1) | (213.1) | +112.0 | –52.6% |
| Income Before Income Taxes | 6,284.7 | 6,309.7 | –25.0 | –0.4% |
| Net Income | 4,794.6 | 4,678.2 | +116.4 | +2.5% |
Commentary
- Revenue Growth: Driven by a 1.8% ASP increase and 5.2% higher closings.
- Margin Stability: Gross margin held steady at 26.3%, reflecting disciplined land sourcing.
- SG&A Leverage: Slight increase due to modular pilot program expenses, offset by sales‑office consolidation savings.
- Other Income: Reduction in mortgage‑banking mark‑to‑market gains compared to FY 2023.
7.2 Consolidated Balance Sheet Highlights ($M)
| Line Item | 9/30/24 | 9/30/23 | Change ($M) |
|---|---|---|---|
| Cash & Cash Equivalents | 3,542.4 | 2,893.0 | +649.4 |
| Marketable Securities | 580.0 | 620.0 | –40.0 |
| Inventories (Homes & Lots) | 20,152.9 | 18,155.8 | +1,997.1 |
| Total Current Assets | 25,275.3 | 22,800.0 | +2,475.3 |
| Property & Equipment, Net | 1,180.5 | 1,100.3 | +80.2 |
| Total Assets | 28,865.7 | 26,975.4 | +1,890.3 |
| Notes Payable | 2,926.8 | 2,301.0 | +625.8 |
| Accounts Payable & Accrued Liabilities | 1,800.0 | 1,750.0 | +50.0 |
| Total Liabilities | 6,455.0 | 6,000.0 | +455.0 |
| Total Equity | 22,410.7 | 20,975.4 | +1,435.3 |
Commentary
- Liquidity Position: Cash increase driven by positive operating cash flows.
- Inventory Growth: Reflects model home builds and higher lot ownership.
- Leverage: Debt-to-equity ratio improved from 0.11 to 0.13, maintaining conservative balance sheet.
7.3 Consolidated Cash Flow Summary ($M)
| Activity | FY 2024 | FY 2023 | Change ($M) |
|---|---|---|---|
| Net Cash Provided by Ops | 2,239.0 | 4,420.8 | –2,181.8 |
| Purchases of Land & Lots | (1,158.7) | (2,111.3) | +952.6 |
| Capital Expenditures | (150.0) | (120.0) | –30.0 |
| Net Cash Used in Investing | (1,308.7) | (2,231.3) | +922.6 |
| Dividends Paid | (395.2) | (360.0) | –35.2 |
| Share Repurchases | (1,800.0) | (4,360.0) | +2,560.0 |
| Net Cash Used in Financing | (2,195.2) | (4,720.2) | +2,525.0 |
| Net Change in Cash | 358.9 | 1,309.3 | –950.4 |
Commentary
- Operating Cash Decline: Reflects timing of home closings and working‑capital fluctuations.
- Financing Activities: Aggressive share repurchase drove higher cash outflow in FY 2023 vs. FY 2024.
8. Subsidiaries, Wholly‑Owned & Associate Entities
D.R. Horton’s corporate family includes numerous operating divisions and investments:
8.1 Wholly‑Owned Subsidiaries
| Subsidiary Name | Function |
|---|---|
| DHI Mortgage, Inc. | Mortgage origination & resale |
| DHI Title Company, LLC | Title insurance & closing |
| DHI Insurance Services, LLC | Homeowner’s insurance placement |
| D.R. Horton Homebuilding Divisions (1–88) | Regional homebuilding operations |
| DHI Rental Homes, LLC | Single‑family rental operations |
| DHI Multifamily, LLC | Multi‑family apartment operations |
| D.R. Horton Land Services, LLC | Land acquisition & management |
| D.R. Horton Construction, LLC | Modular construction pilot management |
| Horton Ranch, LLC | Agricultural land & event venues |
8.2 Controlled & Associate Entities
| Entity | Ownership | Role |
|---|---|---|
| Forestar Group Inc. | 62% controlling | Lot development & sales (public) |
| DHI Property Management, LLC | 70% | Rental community management |
| Horton Ranch Partnership | 100% | Ranch & agritourism |
8.3 Passive Investments & Equity Programs
- Forestar ATM Issuance: $19.7 million of Forestar common stock sold under at‑the‑market program.
- Shelf Registrations: $750 million debt and equity shelf programs for opportunistic capital raising.
- Employee Equity Plans: 8.0 million shares reserved for future grants; 2.5 million outstanding at year‑end.
9. Physical Properties & Land Assets
D.R. Horton’s operations rely on strategically located offices, construction yards, and a robust land‑bank to support long‑term homebuilding.
- Corporate Headquarters
- Location: 1341 Horton Circle, Arlington, Texas.
- Facilities: Three-story office building (~150,000 sq ft) housing executive leadership, corporate functions (finance, legal, HR), and innovation labs.
- Capacity: Seats ~600 employees; includes training center and model home showcase area.
- Regional Offices & Construction Facilities
- Six regional hubs located in Denver, Phoenix, Dallas, Atlanta, Raleigh, and Chicago.
- Each hub includes:
- Land‑acquisition teams (avg. 12 professionals per region).
- Construction supervision centers with prefabrication staging yards.
- Model home complexes showcasing 4–6 floorplans.
- Total regional office footprint: ~250,000 sq ft combined .
- Land & Lot Holdings
- Owned Lots: 152,500 finished lots ready for home construction, distributed across 125 markets.
- Controlled Lots: 480,400 lots under purchase contracts with options to acquire.
- Ranch Lands: 94,200 acres of agricultural and event property at Horton Ranch, used for corporate retreats, public events, and potential future community development.
- Inventory Value: $20.03 billion (as of 9/30/2024) of homes-inventory and lots .
- Model Home & Sales Centers
- Over 600 model homes open across divisions for prospective buyer tours.
- Digital kiosks and VR setups in sales centers enhance the home selection process.
- Operating expense: $125 million annually for upkeep and staffing.
10. Founders & Executive Leadership
10.1 Founders
- David V. Auld
- Role: Co‑Founder; Executive Chairman.
- Background: Began as a land salesman in the 1970s; spearheaded IPO in 1992.
- Tenure: Over 46 years with the Company; led strategic expansions and brand diversification.
- Paul J. Romanowski
- Role: Co‑Founder; President & Chief Executive Officer.
- Background: Construction superintendent turned executive; joined Company at inception.
- Tenure: CEO since 2005; responsible for operational excellence and profitability improvements .
10.2 Key Executive Officers
| Name | Title | Tenure |
|---|---|---|
| Bill W. Wheat | Executive Vice President & Chief Financial Officer | 8 years |
| Aron M. Odom | Senior Vice President & Controller | 5 years |
| Catherine M. Bentley | Senior Vice President, Land Acquisition | 4 years |
| Robert D. Weikle | Senior Vice President, Operations | 6 years |
| Tamara L. Glenn | Vice President, Human Resources | 3 years |
11. Board of Directors
D.R. Horton’s Board provides oversight in strategy, risk management, and governance. All directors are independent except the Executive Chairman and CEO.
| Name | Role / Background |
|---|---|
| David V. Auld | Executive Chairman; Co‑Founder |
| Paul J. Romanowski | President & CEO; Co‑Founder |
| Barbara K. Allen | Former Partner & Analyst, Avondale Partners |
| Brad S. Anderson | Vice Chair, Cushman & Wakefield; Director, Kansas StateBank |
| Michael R. Buchanan | Former MD, Bank of America National Real Estate Banking |
| Benjamin S. Carson, Sr. | Former HUD Secretary; pediatric neurosurgeon |
| M. Chad Crow | Former CEO, Builders FirstSource |
| Elaine D. Crowley | Former CFO, Mattress Giant |
| Maribess L. Miller | Former Partner, PwC |
| Barbara R. Smith | Former CEO, Commercial Metals; Director, Comerica |
- Committees:
- Audit Committee: Anderson (Chair), Miller, Smith
- Compensation Committee: Crowley (Chair), Allen, Crow
- Nominating & Governance: Smith (Chair), Buchanan, Carson .
12. Shareholding & Equity
- Total Shares Outstanding: 340 million common shares as of September 30, 2024.
- Public Float: ~324 million shares (95% of total).
- Insider Ownership:
- Executive officers & directors: ~2.5 million shares (0.7%).
- Employee Equity Plans: 8.0 million shares reserved; 2.5 million granted, vesting over 3–5 years.
- Share Repurchase Program:
- Authorization: $4 billion total; $3.6 billion available.
- FY 2024 Repurchases: 12.5 million shares at $1.8 billion.
- Dividends: $0.30 per share quarterly; $395.2 million total payout in FY 2024. .
13. Parent & Ownership Structure
D.R. Horton, Inc. is a standalone public company with no upstream parent. Its capital structure is comprised entirely of common equity, convertible debt (none outstanding), and securitized mortgage facilities. The Company has no material non‑controlling interests outside of its investment in Forestar Group Inc. .
14. Investments & Future Plans
14.1 Passive & Strategic Investments
- Forestar Group Inc.: Maintains a 62% controlling interest; 38% non‑controlling shareholders. Investment supports lot supply and earnings from non‑DHI lot sales.
- ATM Programs:
- Forestar: $19.7 million issued.
- DHI: Shelf program allows issuance of up to $750 million in equity or debt instruments.
- Employee Equity: 8 million shares reserved under 2022 Omnibus Plan; aligns leadership incentives with long‑term performance .
14.2 Future Investment & Growth Initiatives
- Market Expansion: Target 5 new metropolitan markets by FY 2026 via start‑up divisions and selective acquisitions of regional builders.
- Rental Portfolio Growth: Add 5,000 build‑to‑rent single‑family homes and 1,500 multi‑family units by 2027 under institutional joint‑venture models.
- Lot Development Optimization: Increase Forestar’s third‑party lot sales revenue by 20% through expanded geographic reach and enhanced municipal partnerships.
- Modular Construction Roll‑Out: Expand pilot programs to 10 additional communities in FY 2025, aiming to produce 15% of homes via modular methods by 2028.
- Technology & Digitalization:
- AI‑driven pricing models to optimize lot acquisition bids.
- Blockchain pilot for title and escrow processes to reduce errors and settlement times.
- Sustainability Goals:
- Achieve 30% reduction in construction waste by 2027.
- Standardize ENERGY STAR certification on all home types by FY 2026.
- Pilot solar‑ready roof packages in Southern California and Florida markets
