(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
ý | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page | |||||
December 31, 2020 | September 30, 2020 | ||||||||||
(In millions) (Unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | |||||||||||
Inventories: | |||||||||||
Construction in progress and finished homes | |||||||||||
Residential land and lots — developed and under development | |||||||||||
Land held for development | |||||||||||
Land held for sale | |||||||||||
Total inventory | |||||||||||
Mortgage loans held for sale | |||||||||||
Deferred income taxes, net of valuation allowance of $ at December 31, 2020 and September 30, 2020 | |||||||||||
Property and equipment, net | |||||||||||
Other assets | |||||||||||
Goodwill | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other liabilities | |||||||||||
Notes payable | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note L) | |||||||||||
EQUITY | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ and and | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, and September 30, 2020, respectively, at cost | ( | ( | |||||||||
Stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In millions, except per share data) (Unaudited) | |||||||||||
Revenues | $ | $ | |||||||||
Cost of sales | |||||||||||
Selling, general and administrative expense | |||||||||||
Gain on sale of assets | ( | ( | |||||||||
Other (income) expense | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | |||||||||||
Net income attributable to noncontrolling interests | |||||||||||
Net income attributable to D.R. Horton, Inc. | $ | $ | |||||||||
Basic net income per common share attributable to D.R. Horton, Inc. | $ | $ | |||||||||
Weighted average number of common shares | |||||||||||
Diluted net income per common share attributable to D.R. Horton, Inc. | $ | $ | |||||||||
Adjusted weighted average number of common shares |
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||||||||||||||||||
(In millions, except common stock share data) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balances at September 30, 2020 ( | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Exercise of stock options ( | — | — | — | ||||||||||||||||||||||||||||||||
Stock issued under employee benefit plans ( | — | — | — | ||||||||||||||||||||||||||||||||
Cash paid for shares withheld for taxes | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchases of common stock ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Change of ownership interest in Forestar | — | ( | — | — | |||||||||||||||||||||||||||||||
Balances at December 31, 2020 ( | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Non-controlling Interests | Total Equity | ||||||||||||||||||||||||||||||
(In millions, except common stock share data) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balances at September 30, 2019 ( | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Exercise of stock options ( | — | — | — | ||||||||||||||||||||||||||||||||
Stock issued under employee benefit plans ( | — | — | — | — | — | ||||||||||||||||||||||||||||||
Cash paid for shares withheld for taxes | ( | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchases of common stock ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Change of ownership interest in Forestar | — | ( | — | — | |||||||||||||||||||||||||||||||
Balances at December 31, 2019 ( | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In millions) (Unaudited) | |||||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of discounts and fees | |||||||||||
Stock-based compensation expense | |||||||||||
Equity in earnings of unconsolidated entities | ( | ( | |||||||||
Deferred income taxes | |||||||||||
Inventory and land option charges | |||||||||||
Gain on sale of assets | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Increase in construction in progress and finished homes | ( | ( | |||||||||
Increase in residential land and lots – developed, under development, held for development and held for sale | ( | ( | |||||||||
(Increase) decrease in other assets | ( | ||||||||||
Net decrease in mortgage loans held for sale | |||||||||||
Increase in accounts payable, accrued expenses and other liabilities | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
INVESTING ACTIVITIES | |||||||||||
Expenditures for property and equipment | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Expenditures related to rental properties | ( | ( | |||||||||
Return of investment in unconsolidated entities | |||||||||||
Net principal decrease (increase) of other mortgage loans and real estate owned | ( | ||||||||||
Payments related to business acquisitions | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
FINANCING ACTIVITIES | |||||||||||
Proceeds from notes payable | |||||||||||
Repayment of notes payable | ( | ||||||||||
Payments on mortgage repurchase facility, net | ( | ( | |||||||||
Proceeds from stock associated with certain employee benefit plans | |||||||||||
Cash paid for shares withheld for taxes | ( | ( | |||||||||
Cash dividends paid | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Distributions to noncontrolling interests, net | ( | ( | |||||||||
Other financing activities | ( | ||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES: | |||||||||||
Notes payable issued for inventory | $ | $ | |||||||||
Stock issued under employee incentive plans | $ | $ | |||||||||
Accrued expenditures for property and equipment | $ | $ | |||||||||
Accrual for holdback payments related to acquisitions | $ | $ | |||||||||
Repurchase of common stock not settled | $ | $ |
East: | Delaware, Georgia (Savannah only), Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and Virginia | ||||||||||
Midwest: | Colorado, Illinois, Indiana, Iowa, Minnesota and Ohio | ||||||||||
Southeast: | Alabama, Florida, Georgia, Mississippi and Tennessee | ||||||||||
South Central: | Louisiana, Oklahoma and Texas | ||||||||||
Southwest: | Arizona and New Mexico | ||||||||||
West: | California, Hawaii, Nevada, Oregon, Utah and Washington |
December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other | Eliminations and Other Adjustments (2) | Consolidated | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||||||||||||||
Inventories: | ||||||||||||||||||||||||||||||||||||||
Construction in progress and finished homes | ( | |||||||||||||||||||||||||||||||||||||
Residential land and lots — developed and under development | ( | |||||||||||||||||||||||||||||||||||||
Land held for development | ||||||||||||||||||||||||||||||||||||||
Land held for sale | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Mortgage loans held for sale | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes, net | ( | |||||||||||||||||||||||||||||||||||||
Property and equipment, net | ( | |||||||||||||||||||||||||||||||||||||
Other assets | ( | |||||||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Accrued expenses and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
Notes payable | ( | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ |
September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other | Eliminations and Other Adjustments (2) | Consolidated | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||||||||||||||
Inventories: | ||||||||||||||||||||||||||||||||||||||
Construction in progress and finished homes | ( | |||||||||||||||||||||||||||||||||||||
Residential land and lots — developed and under development | ( | |||||||||||||||||||||||||||||||||||||
Land held for development | ||||||||||||||||||||||||||||||||||||||
Land held for sale | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Mortgage loans held for sale | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes, net | ||||||||||||||||||||||||||||||||||||||
Property and equipment, net | ( | |||||||||||||||||||||||||||||||||||||
Other assets | ( | |||||||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Accrued expenses and other liabilities | ( | |||||||||||||||||||||||||||||||||||||
Notes payable | ( | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | ( | $ |
Three Months Ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other | Eliminations and Other Adjustments (2) | Consolidated | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||
Home sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Land/lot sales and other | ( | |||||||||||||||||||||||||||||||||||||
Financial services | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||
Home sales (3) | ( | |||||||||||||||||||||||||||||||||||||
Land/lot sales and other | ( | |||||||||||||||||||||||||||||||||||||
Inventory and land option charges | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | ||||||||||||||||||||||||||||||||||||||
Gain on sale of assets | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Other (income) expense | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Summary Cash Flow Information | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Cash (used in) provided by operating activities | $ | ( | $ | ( | $ | $ | $ | $ | ( |
Three Months Ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
Homebuilding | Forestar (1) | Financial Services | Other | Eliminations and Other Adjustments (2) | Consolidated | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||
Home sales | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Land/lot sales and other | ( | |||||||||||||||||||||||||||||||||||||
Financial services | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||
Home sales (3) | ( | |||||||||||||||||||||||||||||||||||||
Land/lot sales and other | ( | |||||||||||||||||||||||||||||||||||||
Inventory and land option charges | ||||||||||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | ||||||||||||||||||||||||||||||||||||||
Loss (gain) on sale of assets | ( | ( | ||||||||||||||||||||||||||||||||||||
Other (income) expense | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Income before income taxes | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Summary Cash Flow Information | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Cash (used in) provided by operating activities | $ | ( | $ | ( | $ | $ | $ | ( | $ | ( |
Homebuilding Inventories by Reporting Segment (1) | December 31, 2020 | September 30, 2020 | ||||||||||||
(In millions) | ||||||||||||||
East | $ | $ | ||||||||||||
Midwest | ||||||||||||||
Southeast | ||||||||||||||
South Central | ||||||||||||||
Southwest | ||||||||||||||
West | ||||||||||||||
Corporate and unallocated (2) | ||||||||||||||
$ | $ |
Homebuilding Results by Reporting Segment | Three Months Ended December 31, | |||||||||||||
2020 | 2019 | |||||||||||||
(In millions) | ||||||||||||||
Revenues | ||||||||||||||
East | $ | $ | ||||||||||||
Midwest | ||||||||||||||
Southeast | ||||||||||||||
South Central | ||||||||||||||
Southwest | ||||||||||||||
West | ||||||||||||||
$ | $ | |||||||||||||
Inventory and Land Option Charges | ||||||||||||||
East | $ | $ | ||||||||||||
Midwest | ||||||||||||||
Southeast | ||||||||||||||
South Central | ||||||||||||||
Southwest | ||||||||||||||
West | ||||||||||||||
$ | $ | |||||||||||||
Income before Income Taxes | ||||||||||||||
East | $ | $ | ||||||||||||
Midwest | ||||||||||||||
Southeast | ||||||||||||||
South Central | ||||||||||||||
Southwest | ||||||||||||||
West | ||||||||||||||
$ | $ |
December 31, 2020 | September 30, 2020 | |||||||||||||
(In millions) | ||||||||||||||
Homebuilding: | ||||||||||||||
Unsecured: | ||||||||||||||
Revolving credit facility | $ | $ | ||||||||||||
364-day revolving credit facility | ||||||||||||||
Other secured notes (2) | ||||||||||||||
Forestar: | ||||||||||||||
Unsecured: | ||||||||||||||
Revolving credit facility | ||||||||||||||
Other secured notes | ||||||||||||||
Financial Services: | ||||||||||||||
Mortgage repurchase facility | ||||||||||||||
$ | $ |
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
(In millions) | ||||||||||||||
Capitalized interest, beginning of period | $ | $ | ||||||||||||
Interest incurred (1) | ||||||||||||||
Interest charged to cost of sales | ( | ( | ||||||||||||
Capitalized interest, end of period | $ | $ |
December 31, 2020 | September 30, 2020 | ||||||||||
(In millions) | |||||||||||
Homebuilding | |||||||||||
Buildings and improvements | $ | $ | |||||||||
Model home furniture | |||||||||||
Office furniture and equipment | |||||||||||
Land | |||||||||||
Single-family rental operations | |||||||||||
Single-family rental properties | |||||||||||
Land | |||||||||||
Total single-family rental operations | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total homebuilding | |||||||||||
Other Businesses | |||||||||||
Multi-family rental operations | |||||||||||
Multi-family rental properties | |||||||||||
Land | |||||||||||
Total multi-family rental operations | |||||||||||
Oil and gas related assets | |||||||||||
Office furniture and equipment | |||||||||||
Land | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total other businesses | |||||||||||
Forestar, net | |||||||||||
Financial services, net | |||||||||||
Eliminations | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
(In millions) | ||||||||||||||
Numerator: | ||||||||||||||
Net income attributable to D.R. Horton, Inc. | $ | $ | ||||||||||||
Denominator: | ||||||||||||||
Denominator for basic earnings per share — weighted average common shares | ||||||||||||||
Effect of dilutive securities: | ||||||||||||||
Employee stock awards | ||||||||||||||
Denominator for diluted earnings per share — adjusted weighted average common shares | ||||||||||||||
Basic net income per common share attributable to D.R. Horton, Inc. | $ | $ | ||||||||||||
Diluted net income per common share attributable to D.R. Horton, Inc. | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
(In millions) | ||||||||||||||
Warranty liability, beginning of period | $ | $ | ||||||||||||
Warranties issued | ||||||||||||||
Changes in liability for pre-existing warranties | ||||||||||||||
Settlements made | ( | ( | ||||||||||||
Warranty liability, end of period | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In millions) | |||||||||||
Reserves for legal claims, beginning of period | $ | $ | |||||||||
Increase in reserves | |||||||||||
Payments | ( | ( | |||||||||
Reserves for legal claims, end of period | $ | $ |
December 31, 2020 | September 30, 2020 | |||||||||||||
(In millions) | ||||||||||||||
Earnest money and refundable deposits | $ | $ | ||||||||||||
Insurance receivables | ||||||||||||||
Other receivables | ||||||||||||||
Prepaid assets | ||||||||||||||
Interest rate lock commitments | ||||||||||||||
Margin deposits | ||||||||||||||
Contract assets - insurance agency commissions | ||||||||||||||
Lease right of use assets | ||||||||||||||
Mortgage servicing rights | ||||||||||||||
Other | ||||||||||||||
$ | $ |
December 31, 2020 | September 30, 2020 | |||||||||||||
(In millions) | ||||||||||||||
Reserves for legal claims | $ | $ | ||||||||||||
Employee compensation and related liabilities | ||||||||||||||
Warranty liability | ||||||||||||||
Mortgage hedging instruments and loan commitments | ||||||||||||||
Accrued interest | ||||||||||||||
Federal and state income tax liabilities | ||||||||||||||
Inventory related accruals | ||||||||||||||
Customer deposits | ||||||||||||||
Accrued property taxes | ||||||||||||||
Lease liabilities | ||||||||||||||
Other | ||||||||||||||
$ | $ |
Fair Value at December 31, 2020 | |||||||||||||||||||||||||||||
Balance Sheet Location | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Debt securities collateralized by residential real estate | Other assets | $ | $ | $ | $ | ||||||||||||||||||||||||
Mortgage loans held for sale (1) | Mortgage loans held for sale | ||||||||||||||||||||||||||||
Mortgage servicing rights (2) | Other assets | ||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments (3): | |||||||||||||||||||||||||||||
Interest rate lock commitments | Other assets | ||||||||||||||||||||||||||||
Forward sales of mortgage-backed securities | Other liabilities | ( | ( |
Fair Value at September 30, 2020 | |||||||||||||||||||||||||||||
Balance Sheet Location | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Debt securities collateralized by residential real estate | Other assets | $ | $ | $ | $ | ||||||||||||||||||||||||
Mortgage loans held for sale (1) | Mortgage loans held for sale | ||||||||||||||||||||||||||||
Mortgage servicing rights (2) | Other assets | ||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments (3): | |||||||||||||||||||||||||||||
Interest rate lock commitments | Other assets | ||||||||||||||||||||||||||||
Forward sales of mortgage-backed securities | Other liabilities | ( | ( |
Fair Value at December 31, 2020 | Fair Value at September 30, 2020 | ||||||||||||||||||||||||||||
Balance Sheet Location | Level 2 | Level 3 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Inventory held and used (1) (2) | Inventories | $ | $ | $ | $ | ||||||||||||||||||||||||
Mortgage loans held for sale (1) (3) | Mortgage loans held for sale | ||||||||||||||||||||||||||||
Other mortgage loans (1) (4) | Other assets |
Carrying Value | Fair Value at December 31, 2020 | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Cash and cash equivalents (1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Restricted cash (1) | |||||||||||||||||||||||||||||
Notes payable (2) (3) |
Carrying Value | Fair Value at September 30, 2020 | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
Cash and cash equivalents (1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Restricted cash (1) | |||||||||||||||||||||||||||||
Notes payable (2) (3) |
State | Reporting Region/Market | State | Reporting Region/Market | |||||||||||||||||
East Region | Midwest Region | |||||||||||||||||||
Delaware | Central Delaware | Colorado | Colorado Springs | |||||||||||||||||
Northern Delaware | Denver | |||||||||||||||||||
Georgia | Savannah | Fort Collins | ||||||||||||||||||
Maryland | Baltimore | Illinois | Chicago | |||||||||||||||||
Suburban Washington, D.C. | Indiana | Fort Wayne | ||||||||||||||||||
New Jersey | Northern New Jersey | Indianapolis | ||||||||||||||||||
Southern New Jersey | Iowa | Des Moines | ||||||||||||||||||
North Carolina | Asheville | Minnesota | Minneapolis/St. Paul | |||||||||||||||||
Charlotte | Ohio | Cincinnati | ||||||||||||||||||
Greensboro/Winston-Salem | Columbus | |||||||||||||||||||
Raleigh/Durham | ||||||||||||||||||||
Wilmington | South Central Region | |||||||||||||||||||
Pennsylvania | Central Pennsylvania | Louisiana | Baton Rouge | |||||||||||||||||
Philadelphia | Lake Charles/Lafayette | |||||||||||||||||||
South Carolina | Charleston | Oklahoma | Oklahoma City | |||||||||||||||||
Columbia | Texas | Austin | ||||||||||||||||||
Greenville/Spartanburg | Bryan/College Station | |||||||||||||||||||
Hilton Head | Corpus Christi | |||||||||||||||||||
Myrtle Beach | Dallas | |||||||||||||||||||
Virginia | Northern Virginia | Fort Worth | ||||||||||||||||||
Southern Virginia | Houston | |||||||||||||||||||
Killeen/Temple/Waco | ||||||||||||||||||||
Southeast Region | Midland/Odessa | |||||||||||||||||||
Alabama | Birmingham | New Braunfels/San Marcos | ||||||||||||||||||
Huntsville | San Antonio | |||||||||||||||||||
Mobile/Baldwin County | ||||||||||||||||||||
Montgomery | Southwest Region | |||||||||||||||||||
Tuscaloosa | Arizona | Phoenix | ||||||||||||||||||
Florida | Fort Myers/Naples | Tucson | ||||||||||||||||||
Gainesville | New Mexico | Albuquerque | ||||||||||||||||||
Jacksonville | ||||||||||||||||||||
Lakeland | West Region | |||||||||||||||||||
Melbourne/Vero Beach | California | Bakersfield | ||||||||||||||||||
Miami/Fort Lauderdale | Bay Area | |||||||||||||||||||
Ocala | Fresno | |||||||||||||||||||
Orlando | Los Angeles County | |||||||||||||||||||
Pensacola/Panama City | Modesto/Merced | |||||||||||||||||||
Port St. Lucie | Riverside County | |||||||||||||||||||
Tampa/Sarasota | Sacramento | |||||||||||||||||||
Volusia County | San Bernardino County | |||||||||||||||||||
West Palm Beach | San Diego County | |||||||||||||||||||
Georgia | Atlanta | Hawaii | Oahu | |||||||||||||||||
Augusta | Nevada | Las Vegas | ||||||||||||||||||
Mississippi | Gulf Coast | Reno | ||||||||||||||||||
Tennessee | Chattanooga | Oregon | Bend | |||||||||||||||||
Knoxville | Portland/Salem | |||||||||||||||||||
Memphis | Utah | Salt Lake City | ||||||||||||||||||
Nashville | Washington | Seattle/Tacoma/Everett/Olympia | ||||||||||||||||||
Spokane | ||||||||||||||||||||
Vancouver |
Net Sales Orders (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Homes Sold | Value (In millions) | Average Selling Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||
East | 2,634 | 1,841 | 43 | % | $ | 861.6 | $ | 546.8 | 58 | % | $ | 327,100 | $ | 297,000 | 10 | % | ||||||||||||||||||||||||||||||||||||||||
Midwest | 1,255 | 714 | 76 | % | 475.9 | 255.4 | 86 | % | 379,200 | 357,700 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southeast | 7,007 | 4,374 | 60 | % | 2,082.2 | 1,191.8 | 75 | % | 297,200 | 272,500 | 9 | % | ||||||||||||||||||||||||||||||||||||||||||||
South Central | 6,690 | 3,775 | 77 | % | 1,806.5 | 964.2 | 87 | % | 270,000 | 255,400 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southwest | 902 | 667 | 35 | % | 284.6 | 199.7 | 43 | % | 315,500 | 299,400 | 5 | % | ||||||||||||||||||||||||||||||||||||||||||||
West | 1,930 | 1,755 | 10 | % | 905.2 | 791.9 | 14 | % | 469,000 | 451,200 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
20,418 | 13,126 | 56 | % | $ | 6,416.0 | $ | 3,949.8 | 62 | % | $ | 314,200 | $ | 300,900 | 4 | % | |||||||||||||||||||||||||||||||||||||||||
Sales Order Cancellations | ||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||
Cancelled Sales Orders | Value (In millions) | Cancellation Rate (2) | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||
East | 570 | 430 | $ | 171.0 | $ | 123.1 | 18 | % | 19 | % | ||||||||||||||||||||||||||||
Midwest | 248 | 161 | 92.7 | 51.2 | 17 | % | 18 | % | ||||||||||||||||||||||||||||||
Southeast | 1,676 | 1,171 | 476.9 | 320.7 | 19 | % | 21 | % | ||||||||||||||||||||||||||||||
South Central | 1,433 | 994 | 373.4 | 254.4 | 18 | % | 21 | % | ||||||||||||||||||||||||||||||
Southwest | 206 | 160 | 59.7 | 44.6 | 19 | % | 19 | % | ||||||||||||||||||||||||||||||
West | 275 | 291 | 123.9 | 129.9 | 12 | % | 14 | % | ||||||||||||||||||||||||||||||
4,408 | 3,207 | $ | 1,297.6 | $ | 923.9 | 18 | % | 20 | % | |||||||||||||||||||||||||||||
Sales Order Backlog | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homes in Backlog | Value (In millions) | Average Selling Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||
East | 3,625 | 1,959 | 85 | % | $ | 1,194.4 | $ | 602.5 | 98 | % | $ | 329,500 | $ | 307,600 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
Midwest | 2,135 | 964 | 121 | % | 795.5 | 337.8 | 135 | % | 372,600 | 350,400 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southeast | 8,967 | 4,420 | 103 | % | 2,684.4 | 1,262.0 | 113 | % | 299,400 | 285,500 | 5 | % | ||||||||||||||||||||||||||||||||||||||||||||
South Central | 9,059 | 4,161 | 118 | % | 2,441.8 | 1,090.2 | 124 | % | 269,500 | 262,000 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southwest | 2,134 | 819 | 161 | % | 648.6 | 245.4 | 164 | % | 303,900 | 299,600 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||
West | 2,567 | 1,457 | 76 | % | 1,170.1 | 688.7 | 70 | % | 455,800 | 472,700 | (4) | % | ||||||||||||||||||||||||||||||||||||||||||||
28,487 | 13,780 | 107 | % | $ | 8,934.8 | $ | 4,226.6 | 111 | % | $ | 313,600 | $ | 306,700 | 2 | % |
Homes Closed and Home Sales Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Homes Closed | Value (In millions) | Average Selling Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||
East | 2,592 | 1,798 | 44 | % | $ | 804.6 | $ | 520.4 | 55 | % | $ | 310,400 | $ | 289,400 | 7 | % | ||||||||||||||||||||||||||||||||||||||||
Midwest | 1,136 | 813 | 40 | % | 411.9 | 282.2 | 46 | % | 362,600 | 347,100 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southeast | 6,296 | 4,231 | 49 | % | 1,776.3 | 1,149.3 | 55 | % | 282,100 | 271,600 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
South Central | 5,669 | 3,780 | 50 | % | 1,473.4 | 958.0 | 54 | % | 259,900 | 253,400 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Southwest | 773 | 663 | 17 | % | 232.2 | 196.0 | 18 | % | 300,400 | 295,600 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||||
West | 2,273 | 1,674 | 36 | % | 1,000.3 | 757.4 | 32 | % | 440,100 | 452,400 | (3) | % | ||||||||||||||||||||||||||||||||||||||||||||
18,739 | 12,959 | 45 | % | $ | 5,698.7 | $ | 3,863.3 | 48 | % | $ | 304,100 | $ | 298,100 | 2 | % | |||||||||||||||||||||||||||||||||||||||||
Homebuilding Operating Margin Analysis | ||||||||||||||
Percentages of Related Revenues | ||||||||||||||
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
Gross profit – home sales | 24.1 | % | 21.0 | % | ||||||||||
Gross profit – land/lot sales and other | 30.7 | % | 32.5 | % | ||||||||||
Inventory and land option charges | (0.1) | % | (0.1) | % | ||||||||||
Gross profit – total homebuilding | 24.0 | % | 21.0 | % | ||||||||||
Selling, general and administrative expense | 7.9 | % | 9.2 | % | ||||||||||
Gain on sale of assets | (0.2) | % | — | % | ||||||||||
Other (income) expense | — | % | (0.1) | % | ||||||||||
Homebuilding pre-tax income | 16.4 | % | 11.9 | % |
Three Months Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||||||||
Homebuilding Revenues | Homebuilding Pre-tax Income (1) | % of Revenues | Homebuilding Revenues | Homebuilding Pre-tax Income (1) | % of Revenues | |||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
East | $ | 809.2 | $ | 132.5 | 16.4 | % | $ | 520.5 | $ | 59.9 | 11.5 | % | ||||||||||||||||||||||||||
Midwest | 413.1 | 49.2 | 11.9 | % | 282.6 | 18.6 | 6.6 | % | ||||||||||||||||||||||||||||||
Southeast | 1,778.4 | 305.8 | 17.2 | % | 1,150.6 | 146.3 | 12.7 | % | ||||||||||||||||||||||||||||||
South Central | 1,474.9 | 264.7 | 17.9 | % | 958.7 | 132.6 | 13.8 | % | ||||||||||||||||||||||||||||||
Southwest | 232.6 | 38.6 | 16.6 | % | 211.0 | 34.5 | 16.4 | % | ||||||||||||||||||||||||||||||
West | 1,010.4 | 144.4 | 14.3 | % | 759.6 | 69.7 | 9.2 | % | ||||||||||||||||||||||||||||||
$ | 5,718.6 | $ | 935.2 | 16.4 | % | $ | 3,883.0 | $ | 461.6 | 11.9 | % | |||||||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||||||||
Construction in Progress and Finished Homes | Residential Land/Lots Developed and Under Development | Land Held for Development | Land Held for Sale | Total Inventory | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
East | $ | 865.2 | $ | 572.2 | $ | 5.5 | $ | 1.4 | $ | 1,444.3 | |||||||||||||||||||
Midwest | 560.9 | 516.5 | 1.8 | 0.5 | 1,079.7 | ||||||||||||||||||||||||
Southeast | 1,887.2 | 1,227.9 | 26.9 | 0.8 | 3,142.8 | ||||||||||||||||||||||||
South Central | 1,756.5 | 1,498.5 | 0.3 | 0.5 | 3,255.8 | ||||||||||||||||||||||||
Southwest | 304.9 | 542.7 | 1.6 | — | 849.2 | ||||||||||||||||||||||||
West | 1,166.4 | 951.2 | 5.7 | 20.3 | 2,143.6 | ||||||||||||||||||||||||
Corporate and unallocated (1) | 124.0 | 98.3 | 0.5 | 0.3 | 223.1 | ||||||||||||||||||||||||
$ | 6,665.1 | $ | 5,407.3 | $ | 42.3 | $ | 23.8 | $ | 12,138.5 |
As of September 30, 2020 | |||||||||||||||||||||||||||||
Construction in Progress and Finished Homes | Residential Land/Lots Developed and Under Development | Land Held for Development | Land Held for Sale | Total Inventory | |||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||
East | $ | 785.3 | $ | 531.2 | $ | 5.5 | $ | 6.3 | $ | 1,328.3 | |||||||||||||||||||
Midwest | 497.0 | 459.0 | 1.8 | 0.7 | 958.5 | ||||||||||||||||||||||||
Southeast | 1,655.5 | 1,231.5 | 32.3 | 0.6 | 2,919.9 | ||||||||||||||||||||||||
South Central | 1,596.3 | 1,282.3 | 0.3 | 1.0 | 2,879.9 | ||||||||||||||||||||||||
Southwest | 244.2 | 449.7 | 1.6 | 0.3 | 695.8 | ||||||||||||||||||||||||
West | 1,137.3 | 847.1 | 5.7 | 19.0 | 2,009.1 | ||||||||||||||||||||||||
Corporate and unallocated (1) | 121.9 | 100.6 | 0.6 | 0.4 | 223.5 | ||||||||||||||||||||||||
$ | 6,037.5 | $ | 4,901.4 | $ | 47.8 | $ | 28.3 | $ | 11,015.0 |
As of December 31, 2020 | |||||||||||||||||||||||
Land/Lots Owned (1) | Lots Controlled Under Land and Lot Purchase Contracts (2)(3) | Total Land/Lots Owned and Controlled | Homes in Inventory (4) | ||||||||||||||||||||
East | 11,400 | 57,800 | 69,200 | 5,400 | |||||||||||||||||||
Midwest | 8,700 | 22,800 | 31,500 | 3,000 | |||||||||||||||||||
Southeast | 29,100 | 110,300 | 139,400 | 13,200 | |||||||||||||||||||
South Central | 45,400 | 81,500 | 126,900 | 13,500 | |||||||||||||||||||
Southwest | 8,100 | 15,600 | 23,700 | 2,500 | |||||||||||||||||||
West | 19,300 | 30,700 | 50,000 | 4,500 | |||||||||||||||||||
122,000 | 318,700 | 440,700 | 42,100 | ||||||||||||||||||||
28 | % | 72 | % | 100 | % |
As of September 30, 2020 | |||||||||||||||||||||||
Land/Lots Owned (1) | Lots Controlled Under Land and Lot Purchase Contracts (2)(3) | Total Land/Lots Owned and Controlled | Homes in Inventory (4) | ||||||||||||||||||||
East | 11,300 | 50,500 | 61,800 | 4,900 | |||||||||||||||||||
Midwest | 8,000 | 17,800 | 25,800 | 2,600 | |||||||||||||||||||
Southeast | 28,700 | 95,700 | 124,400 | 11,500 | |||||||||||||||||||
South Central | 40,100 | 65,200 | 105,300 | 12,600 | |||||||||||||||||||
Southwest | 7,200 | 7,600 | 14,800 | 1,800 | |||||||||||||||||||
West | 17,300 | 27,500 | 44,800 | 4,600 | |||||||||||||||||||
112,600 | 264,300 | 376,900 | 38,000 | ||||||||||||||||||||
30 | % | 70 | % | 100 | % |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In millions) | |||||||||||
Residential land and lot sales | $ | 307.0 | $ | 247.1 | |||||||
Other | 0.1 | 0.1 | |||||||||
Total revenues | $ | 307.1 | $ | 247.2 | |||||||
Cost of sales | 262.9 | 216.6 | |||||||||
Selling, general and administrative expense | 15.5 | 10.5 | |||||||||
Loss on sale of assets | — | 0.1 | |||||||||
Other (income) expense | (0.5) | (2.2) | |||||||||
Income before income taxes | $ | 29.2 | $ | 22.2 |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
($ in millions) | |||||||||||
Total residential single-family lots sold | 3,567 | 2,422 | |||||||||
Residential single-family lots sold to D.R. Horton | 3,389 | 2,390 | |||||||||
Residential lot sales revenues from sales to D.R. Horton | $ | 294.2 | $ | 214.0 | |||||||
Residential tract acres sold to D.R. Horton | — | 36 | |||||||||
Residential land sales revenues from sales to D.R. Horton | $ | — | $ | 7.2 | |||||||
Three Months Ended December 31, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
Number of first-lien loans originated or brokered by DHI Mortgage for D.R. Horton homebuyers | 12,722 | 8,401 | 51 | % | ||||||||||||||||
Number of homes closed by D.R. Horton | 18,739 | 12,959 | 45 | % | ||||||||||||||||
Percentage of D.R. Horton homes financed by DHI Mortgage | 68 | % | 65 | % | ||||||||||||||||
Number of total loans originated or brokered by DHI Mortgage for D.R. Horton homebuyers | 12,738 | 8,442 | 51 | % | ||||||||||||||||
Total number of loans originated or brokered by DHI Mortgage | 13,073 | 8,723 | 50 | % | ||||||||||||||||
Captive business percentage | 97 | % | 97 | % | ||||||||||||||||
Loans sold by DHI Mortgage to third parties | 13,458 | 8,745 | 54 | % |
Three Months Ended December 31, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Loan origination and other fees | $ | 11.1 | $ | 7.5 | 48 | % | ||||||||||||||
Gains on sale of mortgage loans and mortgage servicing rights | 138.9 | 73.6 | 89 | % | ||||||||||||||||
Servicing income | 2.4 | — | — | % | ||||||||||||||||
Total mortgage operations revenues | 152.4 | 81.1 | 88 | % | ||||||||||||||||
Title policy premiums | 34.8 | 21.8 | 60 | % | ||||||||||||||||
Total revenues | 187.2 | 102.9 | 82 | % | ||||||||||||||||
General and administrative expense | 109.5 | 77.9 | 41 | % | ||||||||||||||||
Other (income) expense | (6.4) | (5.5) | 16 | % | ||||||||||||||||
Financial services pre-tax income | $ | 84.1 | $ | 30.5 | 176 | % |
Percentages of Financial Services Revenues | ||||||||||||||
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
General and administrative expense | 58.5 | % | 75.7 | % | ||||||||||
Other (income) expense | (3.4) | % | (5.3) | % | ||||||||||
Financial services pre-tax income | 44.9 | % | 29.6 | % |
D.R. Horton, Inc. and Guarantor Subsidiaries | ||||||||||||||
Summarized Balance Sheet Data | December 31, 2020 | September 30, 2020 | ||||||||||||
(In millions) | ||||||||||||||
Assets | ||||||||||||||
Cash | $ | 2,044.8 | $ | 2,498.5 | ||||||||||
Inventories | 12,044.0 | 10,921.8 | ||||||||||||
Amount due from Non-Guarantor Subsidiaries | 572.7 | 524.6 | ||||||||||||
Total assets | 16,374.6 | 15,503.9 | ||||||||||||
Liabilities & Stockholders’ Equity | ||||||||||||||
Notes payable | $ | 2,606.2 | $ | 2,514.4 | ||||||||||
Total liabilities | 5,053.6 | 4,746.9 | ||||||||||||
Stockholders’ equity | 11,321.0 | 10,757.0 | ||||||||||||
Summarized Statement of Operations Data | Three Months Ended December 31, 2020 | Fiscal Year Ended September 30, 2020 | ||||||||||||
(In millions) | ||||||||||||||
Revenues | $ | 5,714.2 | $ | 19,630.0 | ||||||||||
Cost of sales | 4,343.9 | 15,379.2 | ||||||||||||
Selling, general and administrative expense | 435.9 | 1,584.4 | ||||||||||||
Income before income taxes | 926.7 | 2,666.4 | ||||||||||||
Net income | 713.0 | 2,134.7 |
Nine Months Ending September 30, 2021 | Fiscal Year Ending September 30, | Fair Value at December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate | $64.1 | $350.3 | $700.4 | $365.3 | $500.4 | $500.4 | $800.3 | $3,281.2 | $3,471.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Average interest rate | 3.8% | 4.5% | 5.5% | 8.4% | 2.7% | 2.8% | 3.0% | 4.2% | ||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate | $969.1 | $— | $— | $— | $— | $— | $— | $969.1 | $969.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Average interest rate | 2.4% | —% | —% | —% | —% | —% | —% | 2.4% |
Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (1) (In millions) | ||||||||||||||||||||
October 1, 2020 - October 31, 2020 | — | $ | — | — | $ | 535.3 | |||||||||||||||||
November 1, 2020 - November 30, 2020 | — | $ | — | — | 535.3 | ||||||||||||||||||
December 1, 2020 - December 31, 2020 | 1,000,000 | $ | 69.85 | 1,000,000 | 465.5 | ||||||||||||||||||
Total | 1,000,000 | $ | 69.85 | 1,000,000 | $ | 465.5 |
(a) | Exhibits. | ||||||||||
2.1 | |||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
4.1 | |||||||||||
22.1 | |||||||||||
31.1 | * | ||||||||||
31.2 | * | ||||||||||
32.1 | * | ||||||||||
32.2 | * | ||||||||||
101.INS | ** | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
101.SCH | ** | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
101.CAL | ** | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
101.DEF | ** | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
101.LAB | ** | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||||
101.PRE | ** | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
104 | ** | Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101). | |||||||||
* | Filed or furnished herewith. | ||||||||||
** | Submitted electronically herewith. |
D.R. HORTON, INC. | |||||||||||
Date: | January 27, 2021 | By: | /s/ Bill W. Wheat | ||||||||
Bill W. Wheat | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
Date: | January 27, 2021 | By: | /s/ Aron M. Odom | ||||||||
Aron M. Odom | |||||||||||
Vice President and Controller | |||||||||||
(Principal Accounting 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. |
/s/ DAVID V. AULD | |||||||||||
By: | David V. Auld 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. |
/s/ BILL W. WHEAT | |||||||||||
By: | Bill W. Wheat Executive Vice President and Chief Financial Officer |
Date: | January 27, 2021 | /s/ DAVID V. AULD | |||||||||||||||
By: | David V. Auld President and Chief Executive Officer |
Date: | January 27, 2021 | /s/ BILL W. WHEAT | |||||||||||||||
By: | Bill W. Wheat Executive Vice President and Chief Financial Officer |
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Statement [Abstract] | ||
Revenues | $ 5,933.4 | $ 4,020.7 |
Cost of sales | 4,332.5 | 3,084.2 |
Selling, general and administrative expense | 585.9 | 455.8 |
Gain on sale of assets | (14.0) | (31.1) |
Other (income) expense | (5.3) | (11.5) |
Income before income taxes | 1,034.3 | 523.3 |
Income tax expense | 239.1 | 90.8 |
Net income | 795.2 | 432.5 |
Net income (loss) attributable to noncontrolling interests | 3.4 | 1.2 |
Net income attributable to D.R. Horton, Inc. | $ 791.8 | $ 431.3 |
Basic net income per common share attributable to D.R. Horton, Inc. (in dollars per share) | $ 2.17 | $ 1.17 |
Weighted average number of common shares | 364.4 | 368.3 |
Diluted net income per common share attributable to D.R. Horton, Inc. (in dollars per share) | $ 2.14 | $ 1.16 |
Adjusted weighted average number of common shares | 370.0 | 373.4 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Deferred Tax Assets, Valuation Allowance | $ 7.5 | $ 7.5 |
Preferred Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 |
Preferred Stock, Shares Authorized | 30,000,000 | 30,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Shares, Issued | 395,389,246 | 394,741,349 |
Common Stock, Shares, Outstanding | 363,647,879 | 363,999,982 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Treasury Stock, Shares | 31,741,367 | 30,741,367 |
Basis of Presentation |
3 Months Ended |
---|---|
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its 100% 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. The Company owns a 65% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 35% 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, 2020, 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, 2020. 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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Seasonality Historically, the homebuilding industry has experienced seasonal fluctuations; therefore, the operating results for the three months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021 or subsequent periods. Business Acquisition In October 2020, the Company acquired the homebuilding operations of Braselton Homes for approximately $23.0 million in cash. Braselton Homes operates in Corpus Christi, Texas. The assets acquired included approximately 90 homes in inventory, 95 lots and control of approximately 840 additional lots through purchase contracts. The Company also acquired a sales order backlog of approximately 125 homes. Pending Accounting Standards In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12 related to simplifying the accounting for income taxes. The guidance is effective for the Company beginning October 1, 2021, although early adoption is permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect them to have a material impact on its consolidated financial statements or related disclosures.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | 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 90 markets across 29 states. The Company’s operating segments are its 55 homebuilding divisions, 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 Forestar lot development segment and its financial services segment. The homebuilding operating segments are aggregated into the following six reporting segments: East, Midwest, Southeast, South Central, Southwest and West. These reporting segments have homebuilding operations located in the following states:
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. During fiscal 2020, the Company began constructing and leasing homes as income-producing single-family rental communities. After a rental community is constructed and achieves a stabilized level of leased occupancy, the Company generally expects to market the community for a bulk sale of homes. These operations are reported in the Company’s homebuilding segment. During the three months ended December 31, 2020, the Company completed its first sale of a single-family rental community representing 124 homes for $31.8 million, resulting in a gain on sale of $14.0 million. At December 31, 2020, the Company’s homebuilding fixed assets included $106.6 million of assets related to its single-family rental platform, representing 13 communities totaling 890 single-family rental homes and finished lots, which included 440 completed homes. At September 30, 2020, the Company’s homebuilding fixed assets included $87.2 million of assets related to its single-family rental platform, representing 10 communities totaling 740 single-family rental homes and finished lots, which included 440 completed homes. The Forestar segment is a residential lot development company with operations in 51 markets across 21 states. Forestar has made significant investments in land acquisition and development to expand its business across the United States. The homebuilding divisions acquire finished lots from Forestar in accordance with the master supply agreement between the two companies. Forestar’s segment results are presented on their historical cost basis, consistent with the manner in which management evaluates segment performance. The Company’s financial services segment provides mortgage financing and title agency services to homebuyers in many of the Company’s homebuilding markets. The segment generates the substantial majority of its revenues from originating and selling mortgages and collecting fees for title insurance agency and closing services. The Company sells substantially all of the mortgages it originates and the majority of the related servicing rights to third-party purchasers. In addition to its homebuilding, Forestar and financial services operations, the Company engages in other business activities through its subsidiaries. The Company conducts insurance-related operations, constructs and owns income-producing multi-family rental properties, owns non-residential real estate including ranch land and improvements and owns and operates oil and gas related assets. The results of these operations are immaterial for separate reporting and therefore are grouped together and presented as other. The Company’s multi-family rental operations develop, construct, lease and own multi-family rental properties, which are typically marketed for sale after achieving a stabilized level of leased occupancy. At December 31, 2020, the Company had four multi-family rental projects under active construction and four projects that were substantially complete. These eight projects represent 2,325 multi-family units, including 1,015 units under active construction and 1,310 completed units. At December 31, 2020 and September 30, 2020, the consolidated balance sheets included $294.3 million and $246.2 million, respectively, of multi-family rental assets. 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, 2020. Financial information relating to the Company’s reporting segments is as follows:
______________ (1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
______________ (1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
______________ (1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition. (3)Amount in the Eliminations and Other Adjustments column represents the 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.
______________ (1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition. (3)Amount in the Eliminations and Other Adjustments column represents the 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.
_________________ (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 capitalized interest and property taxes.
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Inventory |
3 Months Ended |
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Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 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, 2020, the Company performed detailed impairment evaluations of communities and land inventories with a combined carrying value of $33.5 million and recorded impairment charges of $5.6 million during the three months ended December 31, 2020 to reduce the carrying value of impaired land to fair value. There were no impairment charges recorded in the prior year period. During the three months ended December 31, 2020 and 2019, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $2.7 million and $3.8 million, respectively. Inventory impairments and land option charges are included in cost of sales in the consolidated statements of operations.
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Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE | NOTES PAYABLE The Company’s notes payable at their carrying amounts consist of the following:
____________________________ (1)Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $14.1 million and $10.7 million at December 31, 2020 and September 30, 2020, respectively. (2)Homebuilding other secured notes excludes $3.8 million and $4.8 million of earnest money notes payable due to Forestar at December 31, 2020 and September 30, 2020, respectively. These intercompany notes are eliminated in consolidation. (3)Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $8.4 million and $8.9 million at December 31, 2020 and September 30, 2020, respectively. Homebuilding: The Company has a $1.59 billion senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $2.5 billion, subject to certain conditions and availability of additional bank commitments. The facility also provides for the issuance of letters of credit with a sublimit equal to 100% of the revolving credit commitment. Letters of credit issued under the facility reduce the available borrowing capacity. The interest rate on borrowings under the revolving credit facility may be based on either the Prime Rate or LIBOR plus an applicable margin, as defined in the credit agreement governing the facility. The maturity date of the facility is October 2, 2024. At December 31, 2020, there were no borrowings outstanding and $151.6 million of letters of credit issued under the revolving credit facility, resulting in available capacity of approximately $1.44 billion. In May 2020, the Company entered into a credit agreement providing for a $375 million 364-day senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $550 million, subject to certain conditions and availability of additional bank commitments. The interest rate on borrowings under the 364-day revolving credit facility may be based on either the Prime Rate or LIBOR plus an applicable margin, as defined in the credit agreement governing the facility. The maturity date of the facility is May 27, 2021. There were no borrowings outstanding under the facility at December 31, 2020. The Company’s homebuilding revolving credit facilities impose restrictions on its operations and activities, including requiring the maintenance of a maximum allowable leverage ratio and a borrowing base restriction if the leverage ratio exceeds a certain level. Both facilities include substantially the same affirmative and negative covenants, events of default and financial covenants. These covenants are measured as defined in the credit agreements governing the facilities and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facilities or cause any outstanding borrowings to become due and payable prior to maturity. The credit agreements governing the facilities and the indentures governing the senior notes also impose restrictions on the creation of secured debt and liens. At December 31, 2020, the Company was in compliance with all of the covenants, limitations and restrictions of its homebuilding revolving credit facilities and public debt obligations. D.R. Horton has an automatically effective universal shelf registration statement filed with the SEC in August 2018, registering debt and equity securities that the Company may issue from time to time in amounts to be determined. In October 2020, the Company issued $500 million principal amount of 1.4% senior notes due October 15, 2027, with interest payable semi-annually. The annual effective interest rate of these notes after giving effect to the amortization of the discount and financing costs is 1.6%. In December 2020, the Company repaid $400 million principal amount of its 2.55% senior notes at maturity. Effective July 30, 2019, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities. The authorization has no expiration date. All of the $500 million authorization was remaining at December 31, 2020. Forestar: Forestar has a $380 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $570 million, subject to certain conditions and availability of additional bank commitments. The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the revolving credit commitment. Borrowings under the revolving credit facility are subject to a borrowing base calculation based on Forestar’s book value of its real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. At December 31, 2020, there were no borrowings outstanding and $40.5 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $339.5 million. The maturity date of the facility is October 2, 2022, which can be extended by up to one year on up to two additional occasions, subject to the approval of lenders holding a majority of the commitments. The Forestar revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants. The financial covenants require Forestar to maintain a minimum level of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. Forestar’s revolving credit facility and its senior notes are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. At December 31, 2020, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations. Effective April 30, 2020, Forestar’s Board of Directors authorized the repurchase of up to $30 million of Forestar’s debt securities. The authorization has no expiration date. All of the $30 million authorization was remaining at December 31, 2020. Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties upon receipt of funds from the counterparties. DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames from 45 to 60 days in accordance with the terms of the mortgage repurchase facility. The total capacity of the facility is $1.35 billion; however, the capacity increased, without requiring additional commitments, to $1.575 billion for approximately 45 days around September 30, 2020 and increased again for approximately 30 days around December 31, 2020. The capacity of the facility can also be increased to $1.8 billion, subject to the availability of additional commitments. The maturity date of the facility is February 19, 2021. The Company is currently in discussions with its lenders and expects to renew and extend the facility on similar terms prior to its maturity date. As of December 31, 2020, $1.31 billion of mortgage loans held for sale with a collateral value of $1.29 billion were pledged under the mortgage repurchase facility. As a result of advance paydowns totaling $319.4 million, DHI Mortgage had an obligation of $969.1 million outstanding under the mortgage repurchase facility at December 31, 2020 at a 2.4% annual interest rate. The mortgage repurchase facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. The facility contains financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable leverage ratio and its minimum required liquidity. These covenants are measured and reported to the lenders monthly. At December 31, 2020, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility.
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Capitalized Interest |
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CAPITALIZED INTEREST | CAPITALIZED INTEREST The Company capitalizes interest costs incurred to inventory during active development and construction (active inventory). Capitalized interest is charged to cost of sales as the related inventory is delivered to the buyer. During periods in which the Company’s active inventory is lower than its debt level, a portion of the interest incurred is reflected as interest expense in the period incurred. During the first three months of fiscal 2021 and fiscal 2020, the Company’s active inventory exceeded its debt level, and all interest incurred was capitalized to inventory. The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three months ended December 31, 2020 and 2019:
_______________ (1) Interest incurred included interest on the Company's mortgage repurchase facility of $4.5 million and $4.7 million in the three months ended December 31, 2020 and 2019, respectively, and Forestar interest of $11.5 million and $8.7 million in those periods.
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Property and Equipment |
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Property and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | PROPERTY AND EQUIPMENT The Company’s property and equipment balances and the related accumulated depreciation at December 31, 2020 and September 30, 2020 are summarized below.
Depreciation expense was $17.8 million and $17.2 million during the three months ended December 31, 2020 and 2019, respectively.
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Mortgage Loans |
3 Months Ended |
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Dec. 31, 2020 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
MORTGAGE LOANS | MORTGAGE LOANS Mortgage loans held for sale consist primarily of single-family residential loans collateralized by the underlying property. At December 31, 2020, mortgage loans held for sale had an aggregate carrying value of $1.44 billion and an aggregate outstanding principal balance of $1.37 billion. At September 30, 2020, mortgage loans held for sale had an aggregate carrying value of $1.53 billion and an aggregate outstanding principal balance of $1.46 billion. During the three months ended December 31, 2020 and 2019, mortgage loans originated totaled $3.5 billion and $2.3 billion, respectively, and mortgage loans sold totaled $3.6 billion and $2.3 billion, respectively. The Company had gains on sales of loans and servicing rights of $138.9 million during the three months ended December 31, 2020 compared to $73.6 million in the prior year period. Net gains on sales of loans and servicing rights are included in revenues in the consolidated statements of operations. During the three months ended December 31, 2020, approximately 66% of the Company’s mortgage loans were sold directly to the Federal National Mortgage Association (Fannie Mae) or into securities backed by the Government National Mortgage Association (Ginnie Mae) and 27% were sold to two other major financial entities. In response to the COVID-19 pandemic (C-19), the U.S. government has taken various actions to support the economy and the continued functioning of the financial markets. In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which included changes to current forbearance options for government-backed loans designed to keep homeowners in their homes. Due to the uncertainty surrounding these forbearance options, servicing values declined rapidly at the end of March. As a result, the Company began retaining the servicing rights on a portion of its loan originations. Servicing values have since improved, and the Company sold a portion of its retained mortgage servicing rights in the three months ended December 31, 2020. The Company expects to continue retaining some servicing rights prior to selling them to third parties, typically within six months of loan origination. At December 31, 2020 and September 30, 2020, the fair value of mortgage servicing rights was $9.8 million and $17.1 million, respectively, and is included in other assets in the consolidated balance sheets. The Company also uses hedging instruments as part of a program to offer below market interest rate financing to its homebuyers. At December 31, 2020 and September 30, 2020, the Company had mortgage-backed securities (MBS) totaling $1.4 billion and $1.1 billion, respectively, that did not yet have interest rate lock commitments or closed loans created or assigned and recorded a liability of $7.5 million and $5.3 million for the fair value of such MBS position.
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Income Taxes |
3 Months Ended |
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Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s income tax expense for the three months ended December 31, 2020 and 2019 was $239.1 million and $90.8 million, respectively. The effective tax rate was 23.1% for the three months ended December 31, 2020 compared to 17.4% in the prior year period. The effective tax rates for both periods include an expense for state income taxes and tax benefits related to stock-based compensation and the federal energy efficient homes tax credit. For the three months ended December 31, 2019, the retroactive reinstatement of the federal energy efficient homes tax credit for homes closed from January 1, 2018 to September 30, 2019 reduced the effective tax rate by 5.6%. The Company’s deferred tax assets, net of deferred tax liabilities, were $149.5 million at December 31, 2020 compared to $152.4 million at September 30, 2020. The Company has a valuation allowance of $7.5 million at December 31, 2020 and September 30, 2020 related to state deferred tax assets for net operating loss (NOL) carryforwards that are more likely than not to expire before being realized. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to the remaining state NOL carryforwards. Any reversal of the valuation allowance in future periods will impact the Company’s effective tax rate. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation of the Company’s deferred tax assets.
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Earnings Per Share |
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EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the numerators and denominators used in the computation of basic and diluted earnings per share.
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Stockholders' Equity |
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Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY D.R. Horton has an automatically effective universal shelf registration statement, filed with the SEC in August 2018, registering debt and equity securities that it may issue from time to time in amounts to be determined. Forestar also has an effective shelf registration statement filed with the SEC in September 2018, registering $500 million of equity securities. As of December 31, 2020, $394.3 million remained available for issuance under Forestar’s shelf registration statement, $100 million of which is reserved for sales under its at-the-market equity offering program that became effective in August 2020. As of December 31, 2020, no shares had been issued under the at-the-market equity offering program. Effective July 30, 2019, the Board of Directors authorized the repurchase of up to $1.0 billion of the Company’s common stock. The authorization has no expiration date. During the three months ended December 31, 2020, the Company repurchased 1.0 million shares of its common stock for $69.8 million. The Company’s remaining authorization at December 31, 2020 was $465.5 million. During the three months ended December 31, 2020, the Board of Directors approved a quarterly cash dividend of $0.20 per common share, which was paid on December 14, 2020 to stockholders of record on December 4, 2020. In January 2021, the Board of Directors approved a quarterly cash dividend of $0.20 per common share, payable on February 25, 2021 to stockholders of record on February 17, 2021. Cash dividends of $0.175 per common share were approved and paid in each quarter of fiscal 2020.
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Employee Benefit Plans |
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Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Compensation Related Costs, General | EMPLOYEE BENEFIT PLANS Restricted Stock Units (RSUs) The Company’s Stock Incentive Plan provides for the granting of stock options and restricted stock units to executive officers, other key employees and non-management directors. Restricted stock unit awards may be based on performance (performance-based) or on service over a requisite time period (time-based). Performance-based and time-based RSU equity awards represent the contingent right to receive one share of the Company’s common stock per RSU if the vesting conditions and/or performance criteria are satisfied. The RSUs have no dividend or voting rights until vested. In November 2020, the Company granted 360,000 performance-based RSU equity awards to its executive officers. These awards vest at the end of a -year performance period ending September 30, 2023. The number of units that ultimately vest depends on the Company’s relative position as compared to its peers in achieving certain performance criteria and can range from 0% to 200% of the number of units granted. The performance criteria are total shareholder return; return on investment; selling, general and administrative expense containment; and gross profit. The grant date fair value of these equity awards was $70.60 per unit. Compensation expense related to this grant was $3.2 million in the three months ended December 31, 2020, based on an estimate of the Company’s performance against its peer group, the elapsed portion of the performance period and the grant date fair value of the award. Stock-based compensation expense related to the Company’s performance-based and time-based restricted stock units was $21.2 million during the three months ended December 31, 2020 compared to $15.9 million during the three months ended December 31, 2019.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Warranty Claims The Company provides its homebuyers with a ten-year limited warranty for major defects in structural elements such as framing components and foundation systems, a two-year limited warranty on major mechanical systems and a one-year limited warranty on other construction components. The Company’s warranty liability is based upon historical warranty cost experience in each market in which it operates and is adjusted to reflect qualitative risks associated with the types of homes built and the geographic areas in which they are built. Changes in the Company’s warranty liability during the three months ended December 31, 2020 and 2019 were as follows:
Legal Claims and Insurance The Company is named as a defendant in various claims, complaints and other legal actions in the ordinary course of business. At any point in time, the Company is managing several hundred individual claims related to construction defect matters, personal injury claims, employment matters, land development issues, contract disputes and other matters. The Company has established reserves for these contingencies based on the estimated costs of pending claims and the estimated costs of anticipated future claims related to previously closed homes. The estimated liabilities for these contingencies were $491.8 million and $473.8 million at December 31, 2020 and September 30, 2020, respectively, and are included in accrued expenses and other liabilities in the consolidated balance sheets. Approximately 99% of these reserves related to construction defect matters at both December 31, 2020 and September 30, 2020. Expenses related to the Company’s legal contingencies were $17.4 million and $16.6 million in the three months ended December 31, 2020 and 2019, respectively. Changes in the Company’s legal claims reserves during the three months ended December 31, 2020 and 2019 were as follows:
The Company estimates and records receivables under its applicable insurance policies related to its estimated contingencies for known claims and anticipated future construction defect claims on previously closed homes and other legal claims and lawsuits incurred in the ordinary course of business when recovery is probable. However, because the self-insured retentions under these policies are significant, the Company anticipates it will largely be self-insured. The Company’s estimated insurance receivables from estimated losses for pending legal claims and anticipated future claims related to previously closed homes totaled $82.2 million, $81.2 million and $76.9 million at December 31, 2020, September 30, 2020 and December 31, 2019, respectively, and are included in other assets in the consolidated balance sheets. Additionally, the Company may have the ability to recover a portion of its losses from its subcontractors and their insurance carriers when the Company has been named as an additional insured on their insurance policies. The estimation of losses related to these reserves and the related estimates of recoveries from insurance policies are subject to a high degree of variability due to uncertainties such as trends in construction defect claims relative to the Company’s markets and the types of products built, claim frequency, claim settlement costs and patterns, insurance industry practices and legal interpretations, among others. Due to the high degree of judgment required in establishing reserves for these contingencies, actual future costs and recoveries from insurance could differ significantly from current estimated amounts, and it is not possible for the Company to make a reasonable estimate of the possible loss or range of loss in excess of its reserves. Land and Lot Purchase Contracts The Company enters into land and lot purchase contracts to acquire land or lots for the construction of homes. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of many of the purchase contracts, the deposits are not refundable in the event the Company elects to terminate the contract. Land purchase contract deposits and capitalized pre-acquisition costs are expensed to inventory and land option charges when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover these costs through other means. At December 31, 2020, the Company’s homebuilding segment had total deposits of $776.0 million, consisting of cash deposits of $710.3 million and promissory notes and surety bonds of $65.7 million, related to contracts to purchase land and lots with a total remaining purchase price of approximately $11.9 billion. The majority of land and lots under contract are currently expected to be purchased within three years. Of these amounts, $122.9 million of the deposits related to contracts with Forestar to purchase land and lots with a remaining purchase price of $1.3 billion. A limited number of the homebuilding land and lot purchase contracts at December 31, 2020, representing $73.5 million of remaining purchase price, were subject to specific performance provisions that may require the Company to purchase the land or lots upon the land sellers meeting their respective contractual obligations. Of the $73.5 million remaining purchase price subject to specific performance provisions, $41.5 million related to contracts between the homebuilding segment and Forestar. During the three months ended December 31, 2020 and 2019, Forestar reimbursed the homebuilding segment $16.1 million and $10.7 million, respectively, for previously paid earnest money and $20.9 million and $5.2 million, respectively, for pre-acquisition and other due diligence costs related to land purchase contracts whereby the homebuilding segment assigned its rights under contract to Forestar. Other Commitments At December 31, 2020, the Company had outstanding surety bonds of $1.9 billion and letters of credit of $192.1 million to secure performance under various contracts. Of the total letters of credit, $151.6 million were issued under the homebuilding revolving credit facility and $40.5 million were issued under Forestar’s revolving credit facility.
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Other Assets, Accrued Expenses and Other Liabilities |
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Other Assets and Accrued Expenses and Other Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS, ACCRUED EXPENSES AND OTHER LIABILITIES | OTHER ASSETS, ACCRUED EXPENSES AND OTHER LIABILITIES The Company’s other assets at December 31, 2020 and September 30, 2020 were as follows:
The Company’s accrued expenses and other liabilities at December 31, 2020 and September 30, 2020 were as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and September 30, 2020. Changes in the fair value of the Level 3 assets during the three months ended December 31, 2020 and 2019 were not material.
___________________ (1)The Company typically elects the fair value option upon origination for mortgage loans held for sale. Interest income earned on mortgage loans held for sale is based on contractual interest rates and included in other income. Mortgage loans held for sale valued using Level 3 inputs at December 31, 2020 and September 30, 2020 include $17.9 million and $15.1 million, respectively, of loans for which the Company elected the fair value option upon origination and did not sell into the secondary market. The fair value of these mortgage loans held for sale is generally calculated considering pricing in the secondary market and adjusted for the value of the underlying collateral, including interest rate risk, liquidity risk and prepayment risk. The Company plans to sell these loans as market conditions permit. (2)Although the majority of the Company’s mortgage loans are sold on a servicing-released basis, when the servicing rights are retained, the Company records them at fair value using third-party valuations. The key assumptions used in the valuation, which are generally unobservable inputs, are mortgage prepayment rates, discount rates and delinquency rates, which were 11%, 11% and 5%, respectively, at December 31, 2020 and 13%, 11% and 5%, respectively, at September 30, 2020. (3)Fair value measurements of these derivatives represent changes in fair value, as calculated by reference to quoted prices for similar assets, and are reflected in the balance sheet as other assets or accrued expenses and other liabilities. Changes in the fair value of these derivatives are included in revenues in the consolidated statements of operations. The net fair value change for the three months ended December 31, 2020 and 2019 recognized in revenues in the consolidated statements of operations was not significant. The following table summarizes the Company’s assets measured at fair value on a nonrecurring basis at December 31, 2020 and September 30, 2020:
___________________ (1)The fair values included in the table above represent only those assets whose carrying values were adjusted to fair value as a result of impairment in the respective period and were held at the end of the period. (2)The fair value of inventory was determined based on recent offers received from outside parties. (3)These mortgage loans have some degree of impairment affecting their marketability and are valued at the lower of carrying value or fair value. When available, quoted prices in the secondary market are used to determine fair value (Level 2); otherwise, a cash flow valuation model is used to determine fair value (Level 3). (4)The fair values of other mortgage loans was determined based on the value of the underlying collateral. For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at December 31, 2020 and September 30, 2020:
___________________ (1)The fair values of cash, cash equivalents and restricted cash approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy. (2)The fair value of the senior notes is determined based on quoted prices, which is classified as Level 2 within the fair value hierarchy. (3)The fair values of other secured notes and borrowings on the revolving credit facilities and the mortgage repurchase facility approximate carrying value due to their short-term nature or floating interest rate terms, as applicable, and are classified as Level 3 within the fair value hierarchy.
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Basis of Presentation (Policies) |
3 Months Ended |
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Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its 100% 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. The Company owns a 65% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 35% 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, 2020, 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, 2020.
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Use of Estimates | 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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
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Business Combinations Policy | Business Acquisition In October 2020, the Company acquired the homebuilding operations of Braselton Homes for approximately $23.0 million in cash. Braselton Homes operates in Corpus Christi, Texas. The assets acquired included approximately 90 homes in inventory, 95 lots and control of approximately 840 additional lots through purchase contracts. The Company also acquired a sales order backlog of approximately 125 homes.
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Recent Accounting Pronouncements | Pending Accounting Standards In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12 related to simplifying the accounting for income taxes. The guidance is effective for the Company beginning October 1, 2021, although early adoption is permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect them to have a material impact on its consolidated financial statements or related disclosures.
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Segment Information (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information, by segment | Financial information relating to the Company’s reporting segments is as follows:
______________ (1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
______________ (1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
______________ (1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition. (3)Amount in the Eliminations and Other Adjustments column represents the 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.
______________ (1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. (2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition. (3)Amount in the Eliminations and Other Adjustments column represents the 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.
_________________ (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 capitalized interest and property taxes.
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Notes Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of notes payable at principal amounts, net of unamortized discounts | The Company’s notes payable at their carrying amounts consist of the following:
____________________________ (1)Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $14.1 million and $10.7 million at December 31, 2020 and September 30, 2020, respectively. (2)Homebuilding other secured notes excludes $3.8 million and $4.8 million of earnest money notes payable due to Forestar at December 31, 2020 and September 30, 2020, respectively. These intercompany notes are eliminated in consolidation. (3)Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $8.4 million and $8.9 million at December 31, 2020 and September 30, 2020, respectively.
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Capitalized Interest (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Costs Incurred [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of capitalized interest | The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three months ended December 31, 2020 and 2019:
_______________ (1) Interest incurred included interest on the Company's mortgage repurchase facility of $4.5 million and $4.7 million in the three months ended December 31, 2020 and 2019, respectively, and Forestar interest of $11.5 million and $8.7 million in those periods.
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Property and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | The Company’s property and equipment balances and the related accumulated depreciation at December 31, 2020 and September 30, 2020 are summarized below.
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numerator and denominator used to compute basic and diluted earnings per share | The following table sets forth the numerators and denominators used in the computation of basic and diluted earnings per share.
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Commitments and Contingencies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in warranty liability | Changes in the Company’s warranty liability during the three months ended December 31, 2020 and 2019 were as follows:
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Changes in legal claims reserves | Changes in the Company’s legal claims reserves during the three months ended December 31, 2020 and 2019 were as follows:
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Other Assets, Accrued Expenses and Other Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets and Accrued Expenses and Other Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other assets | The Company’s other assets at December 31, 2020 and September 30, 2020 were as follows:
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Accrued expenses and other liabilities | The Company’s accrued expenses and other liabilities at December 31, 2020 and September 30, 2020 were as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements of assets and liabilities on a recurring basis | The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and September 30, 2020. Changes in the fair value of the Level 3 assets during the three months ended December 31, 2020 and 2019 were not material.
___________________ (1)The Company typically elects the fair value option upon origination for mortgage loans held for sale. Interest income earned on mortgage loans held for sale is based on contractual interest rates and included in other income. Mortgage loans held for sale valued using Level 3 inputs at December 31, 2020 and September 30, 2020 include $17.9 million and $15.1 million, respectively, of loans for which the Company elected the fair value option upon origination and did not sell into the secondary market. The fair value of these mortgage loans held for sale is generally calculated considering pricing in the secondary market and adjusted for the value of the underlying collateral, including interest rate risk, liquidity risk and prepayment risk. The Company plans to sell these loans as market conditions permit. (2)Although the majority of the Company’s mortgage loans are sold on a servicing-released basis, when the servicing rights are retained, the Company records them at fair value using third-party valuations. The key assumptions used in the valuation, which are generally unobservable inputs, are mortgage prepayment rates, discount rates and delinquency rates, which were 11%, 11% and 5%, respectively, at December 31, 2020 and 13%, 11% and 5%, respectively, at September 30, 2020. (3)Fair value measurements of these derivatives represent changes in fair value, as calculated by reference to quoted prices for similar assets, and are reflected in the balance sheet as other assets or accrued expenses and other liabilities. Changes in the fair value of these derivatives are included in revenues in the consolidated statements of operations. The net fair value change for the three months ended December 31, 2020 and 2019 recognized in revenues in the consolidated statements of operations was not significant.
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Fair value measurements of assets on a non-recurring basis | The following table summarizes the Company’s assets measured at fair value on a nonrecurring basis at December 31, 2020 and September 30, 2020:
___________________ (1)The fair values included in the table above represent only those assets whose carrying values were adjusted to fair value as a result of impairment in the respective period and were held at the end of the period. (2)The fair value of inventory was determined based on recent offers received from outside parties. (3)These mortgage loans have some degree of impairment affecting their marketability and are valued at the lower of carrying value or fair value. When available, quoted prices in the secondary market are used to determine fair value (Level 2); otherwise, a cash flow valuation model is used to determine fair value (Level 3). (4)The fair values of other mortgage loans was determined based on the value of the underlying collateral.
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Carrying values and fair values of financial assets and liabilities not reflected at fair value | For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at December 31, 2020 and September 30, 2020:
___________________ (1)The fair values of cash, cash equivalents and restricted cash approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy. (2)The fair value of the senior notes is determined based on quoted prices, which is classified as Level 2 within the fair value hierarchy. (3)The fair values of other secured notes and borrowings on the revolving credit facilities and the mortgage repurchase facility approximate carrying value due to their short-term nature or floating interest rate terms, as applicable, and are classified as Level 3 within the fair value hierarchy.
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Basis of Presentation (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
Home
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Dec. 31, 2019
USD ($)
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 65.00% | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 35.00% | |
Payments related to business acquisitions | $ | $ 23.0 | $ 0.7 |
Business Acquisition, Number of Homes Acquired | 90 | |
Business Acquisition, Number of Finished Lots Acquired | 95 | |
Business Acquisition, Number of Lots Under Option Contracts | 840 | |
Business Acquisition, Sales Order Backlog Acquired | 125 |
Inventory (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Inventory [Line Items] | ||
Carrying value of communities with impairment indicators | $ 33.5 | |
Impairment charges | 5.6 | $ 0.0 |
Write-offs (recoveries) of earnest money deposits and pre-acquisition costs | $ 2.7 | $ 3.8 |
Capitalized Interest (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Rollforward of capitalized interest | ||
Capitalized interest, beginning of period | $ 207.7 | $ 180.1 |
Interest incurred | 40.4 | 37.7 |
Interest charged to cost of sales | (33.0) | (25.7) |
Capitalized interest, end of period | 215.1 | 192.1 |
Financial Services [Member] | ||
Rollforward of capitalized interest | ||
Interest incurred | 4.5 | 4.7 |
Forestar Group [Member] | ||
Rollforward of capitalized interest | ||
Interest incurred | $ 11.5 | $ 8.7 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2020 |
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Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 239.1 | $ 90.8 | |
Effective tax rate (percent) | 23.10% | 17.40% | |
Effective Income Tax Rate Reconciliation, Tax Credit, Other, Percent | 5.60% | ||
Deferred tax assets net of DTL | $ 149.5 | $ 152.4 | |
Valuation allowance for deferred income taxes | $ 7.5 | $ 7.5 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
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Numerator: | ||
Net Income (Loss) Attributable to Parent | $ 791.8 | $ 431.3 |
Denominator: | ||
Denominator for basic earnings per share — weighted average common shares | 364.4 | 368.3 |
Effect of dilutive securities: | ||
Employee stock awards (shares) | 5.6 | 5.1 |
Denominator for diluted earnings per share — adjusted weighted average common shares | 370.0 | 373.4 |
Basic net income per common share attributable to Parent (in dollars per share) | $ 2.17 | $ 1.17 |
Diluted net income per common share attributable to Parent (in dollars per share) | $ 2.14 | $ 1.16 |
Commitments and Contingencies - Warranty Claims (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Standard Product Warranty Accrual | $ 324.0 | $ 251.6 | $ 310.2 | $ 247.3 |
Standard Product Warranty Accrual, Increase for Warranties Issued | 33.3 | 21.2 | ||
Standard Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties | 2.6 | 2.7 | ||
Standard Product Warranty Accrual, Decrease for Payments | $ 22.1 | $ 19.6 |
Commitments and Contingencies - Legal Claims and Insurance (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
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Rollforward of reserves for legal claims | ||
Reserves for legal claims, beginning of period | $ 473.8 | $ 434.7 |
Increase in reserves | 24.2 | 21.1 |
Payments | (6.2) | (23.3) |
Reserves for legal claims, end of period | $ 491.8 | $ 432.5 |
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