-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T+3f5a9+32tO1jQ3kquay/2599T9EDuw2a/4IK8DfKE0yFG1xKXzK0xJRdUfVImG cgrUk6ghkzdP/Khj920qcQ== 0000950134-02-006422.txt : 20020530 0000950134-02-006422.hdr.sgml : 20020530 20020529203708 ACCESSION NUMBER: 0000950134-02-006422 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020529 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORTON D R INC /DE/ CENTRAL INDEX KEY: 0000882184 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 752386963 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14122 FILM NUMBER: 02665342 BUSINESS ADDRESS: STREET 1: 1901 ASCENSION BLVD STREET 2: STE 100 CITY: ARLINGTON STATE: TX ZIP: 76006 BUSINESS PHONE: 8178568200 MAIL ADDRESS: STREET 1: 1901 ASCENSION BLVD STREET 2: SUITE 100 CITY: ARLINGTON STATE: TX ZIP: 76006 8-K 1 d97365e8vk.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 MAY 29, 2002 ------------ (Date of Report--Date of Earliest Event Reported) D.R. HORTON, INC. ----------------- (Exact Name of Registrant as Specified in its Charter) DELAWARE 1-14122 75-2386963 - ----------------------------- ------------------------ ------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 1901 ASCENSION BOULEVARD, SUITE 100, ARLINGTON, TEXAS 76006 ----------------------------------------------------------- (Address of Principal Executive Offices) (817) 856-8200 -------------- (Registrant's Telephone Number, Including Area Code) ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 5. OTHER EVENTS. Attached as Exhibit 99.1 and incorporated herein by reference are unaudited pro forma combined condensed statements of income for the six months ended March 31, 2002 and the year ended September 30, 2001, reflecting the registrant's acquisition of Schuler Homes, Inc. The pro forma statements provide supplementary information to the pro forma information previously filed by the registrant and reflect the determinations to date of the fair values of the Schuler assets acquired and the liabilities assumed. As further discussed in their accompanying notes, the pro forma statements do not purport to show what the operating results would have been if the acquisition had been consummated as of the dates indicated and should not be construed as representative of future operating results. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) EXHIBITS. 99.1 Unaudited pro forma combined condensed statements of income of D.R. Horton, Inc. and Schuler Homes, Inc. for the six months ended March 31, 2002 and the year ended September 30, 2001. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 29, 2002 D. R. Horton, Inc. By: /s/ SAMUEL R. FULLER ----------------------------------- Samuel R. Fuller Executive Vice President, Treasurer, and Chief Financial Officer 3 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 99.1 Unaudited pro forma combined condensed statements of income of D.R. Horton, Inc. and Schuler Homes, Inc. for the six months ended March 31, 2002 and for the year ended September 30, 2001.
4 EX-99.1 3 d97365exv99w1.txt UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS EXHIBIT 99.1 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME On February 21, 2002, Schuler Homes, Inc. merged with and into D.R. Horton, Inc., with D.R. Horton the surviving corporation. The total merger consideration consisted of the issuance of 20,079,532 shares of D.R. Horton common stock, valued at $30.93 per share (the average closing price of D.R. Horton common stock for a period of ten trading days from December 4, 2001 to December 17, 2001); the payment of $168.7 million in cash; the assumption of $802.2 million of Schuler's debt, $238.2 million of which was paid at closing; the assumption of trade payables and other liabilities amounting to $200.0 million; and the assumption of $10.8 million of obligations to the Schuler entities' minority interest holders. The intrinsic value of unvested stock options issued to Schuler employees was $7.8 million and was recorded as unearned compensation. The unearned compensation is being amortized over the remaining vesting period of the stock options. The number of shares included in the total merger consideration does not reflect the three-for-two stock split, effected as a 50% stock dividend, paid on April 9, 2002 to stockholders of record on March 26, 2002. The merger was treated as a purchase of Schuler by D.R. Horton for accounting purposes. Under this method, Schuler assets acquired and liabilities assumed were recorded on D.R. Horton's balance sheet at their fair values as of February 21, 2002. Schuler's results of operations from February 22, 2002 to March 31, 2002 were included in D.R. Horton's results of operations for the six months ended March 31, 2002. The following unaudited pro forma combined condensed statements of income give effect to the merger and reflect the operations of D.R. Horton and Schuler for the six months ended March 31, 2002 and the year ended September 30, 2001. The unaudited pro forma combined condensed statement of income for the six months ended March 31, 2002 assumes the merger occurred on October 1, 2001. The unaudited pro forma combined condensed statement of income for the year ended September 30, 2001 assumes the merger occurred on October 1, 2000. The financial information about D.R. Horton and Schuler for the six months ended March 31, 2002 has been derived from the D.R. Horton and Schuler unaudited financial statements contained in the Quarterly Report of D.R. Horton, Inc. on Form 10-Q filed May 15, 2002 and in the Quarterly Report of Schuler Homes, Inc. on Form 10-Q filed February 14, 2002, and the Schuler unaudited statement of income for the period from January 1, 2002 to February 21, 2002. The historical financial information about D.R. Horton and Schuler for the year ended September 30, 2001 has been derived from the D.R. Horton and Schuler (and its predecessor) audited and unaudited financial statements. The unaudited pro forma combined condensed statements of income should be read in conjunction with the accompanying notes and the historical consolidated financial statements of D.R. Horton and Schuler. The unaudited pro forma combined condensed statements of income have been included for comparative purposes only. As further discussed in the accompanying notes, the unaudited pro forma combined condensed statements of income do not purport to show what the operating results would have been if the merger had been consummated as of the dates indicated and should not be construed as representative of future operating results. 1 D.R. HORTON, INC. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED MARCH 31, 2002
PRE-ACQUISITION PRO FORMA D.R. HORTON SCHULER ADJUSTMENTS COMBINED ------------ --------------- ------------ ------------ (IN THOUSANDS, EXCEPT PER SHARE DATA) HOMEBUILDING: Revenues $ 2,711,168 $ 575,002 $ -- $ 3,286,170 Cost of sales 2,201,850 451,952 728B(1) 2,662,016 7,486B(2) ------------ ------------ ------------ ------------ Gross profit 509,318 123,050 (8,214) 624,154 Selling, general & administrative expense 267,911 69,996 1,621B(3) 338,778 (750)B(4) Interest expense 3,759 960 4,719 Other expense (income) 146 (1,560) -- (1,414) ------------ ------------ ------------ ------------ 237,502 53,654 (9,085) 282,071 ------------ ------------ ------------ ------------ FINANCIAL SERVICES: Revenues 48,787 -- -- 48,787 Selling, general & administrative expense 30,041 -- -- 30,041 Interest expense 2,335 -- -- 2,335 Other (income) (5,862) -- -- (5,862) ------------ ------------ ------------ ------------ 22,273 -- -- 22,273 ------------ ------------ ------------ ------------ Income before income taxes 259,775 53,654 (9,085) 304,344 Income taxes 97,416 21,126 (3,407)B(5) 115,135 ------------ ------------ ------------ ------------ Net income $ 162,359 $ 32,528 $ (5,678) $ 189,209 ============ ============ ============ ============ Net income per common share: Basic $ 1.33 N/A -- $ 1.30 Diluted $ 1.26 N/A -- $ 1.24 ============ ============ ============ ============ Cash dividends per common share $ 0.11 N/A --C $ 0.11 ============ ============ ============ ============ Weighted average number of common shares outstanding: Basic 122,095 N/A 23,831D 145,926 Diluted 129,415 N/A 24,056D 153,471 ============ ============ ============ ============
2 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE YEAR ENDED SEPTEMBER 30, 2001
COMBINED PRO FORMA PRO FORMA D.R. HORTON SCHULER (E) ADJUSTMENTS COMBINED --------------- --------------- --------------- --------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) HOMEBUILDING: Revenues $ 4,383,552 $ 1,540,818 $ -- $ 5,924,370 Cost of sales 3,527,142 1,207,165 1,294B(1) 4,755,339 19,738B(2) --------------- --------------- --------------- --------------- Gross profit 856,410 333,653 (21,032) 1,169,031 Selling, general & administrative expense 432,013 159,450 2,847B(3) 592,095 (1,500)B(4) (715)B(6) Interest expense 8,809 6,856 302B(1) 15,967 Other expense (income) 34,747 13,985 -- 48,732 --------------- --------------- --------------- --------------- 380,841 153,362 (21,966) 512,237 --------------- --------------- --------------- --------------- FINANCIAL SERVICES: Revenues 71,962 -- -- 71,962 Selling, general & administrative expense 47,387 -- -- 47,387 Interest expense 5,288 -- -- 5,288 Other (income) (7,669) -- -- (7,669) --------------- --------------- --------------- --------------- 26,956 -- -- 26,956 --------------- --------------- --------------- --------------- Income before income taxes and cumulative effect of change in accounting principle 407,797 153,362 (21,966) 539,193 Income taxes 152,924 61,204 (8,325)B(5) 205,803 --------------- --------------- --------------- --------------- Income before cumulative effect of change in accounting principle $ 254,873 $ 92,158 $ (13,641) $ 333,390 =============== =============== =============== =============== Income before cumulative effect of change accounting principle per common share: Basic $ 2.25 N/A -- $ 2.32 Diluted $ 2.21 N/A -- $ 2.29 =============== =============== =============== =============== Cash dividends per common share $ 0.19 N/A --C $ 0.19 =============== =============== =============== =============== Weighted average number of common shares outstanding: Basic 113,515 N/A 30,119D 143,634 Diluted 115,430 N/A 30,284D 145,714 =============== =============== =============== ===============
3 D.R. HORTON, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME NOTE A. BASIS OF PRESENTATION The unaudited pro forma combined condensed statements of income reflect the combined results of operations of D.R. Horton and Schuler for the six months ended March 31, 2002, assuming that the merger had taken place on October 1, 2001, and for the year ended September 30, 2001, assuming that the merger had taken place on October 1, 2000. Under accounting principles generally accepted in the United States, the merger of Schuler into D.R. Horton was accounted for under the purchase method of accounting. Accordingly, the purchase price was allocated to the Schuler assets acquired and liabilities assumed based on their respective fair values, with the excess allocated to goodwill. On October 1, 2001, D.R. Horton adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." In accordance with SFAS No. 142, goodwill is no longer amortized but is subject to periodic review for impairment, and as such, no pro forma adjustment for amortization of the goodwill resulting from the merger is presented in the unaudited pro forma combined condensed statements of income. Other identifiable intangibles are insignificant. In March 2002, the Company's Board of Directors declared a three-for-two stock split (effected as a 50% stock dividend), payable on April 9, 2002 to common stockholders of record on March 26, 2002. All D. R. Horton share amounts presented have been restated to reflect the effects of the three-for-two stock split. 4 D.R. HORTON, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME - (CONTINUED) NOTE B. PRO FORMA ADJUSTMENTS The following adjustments are included in the unaudited pro forma combined condensed statements of income for the six months ended March 31, 2002, and for the year ended September 30, 2001. (1) Represents the pro forma six-month and twelve-month impact of additional interest costs assumed to have been incurred to finance the cash portion of the merger consideration and other merger costs, at a 3.5% marginal interest rate, which approximates D.R. Horton's current floating rate on its revolving line of credit. Most of such assumed additional interest costs were assumed to have been capitalized in inventory and a portion thereof subsequently amortized to cost of sales. Those assumed additional interest costs that were not capitalized in inventory were expensed. (2) Represents the pro forma effect on results of operations related to the recording of the Schuler inventory acquired at its February 21, 2002 fair value on D.R. Horton's balance sheet as of the respective assumed dates of the merger. (3) Represents the effect of the issuance of options to purchase approximately 791,000 (split adjusted) shares of D.R. Horton common stock to Schuler employees to replace outstanding Schuler stock options. The fair value of the D.R. Horton stock options issued was $10.4 million and was recorded as additional capital. The intrinsic value of the unvested options issued was $7.8 million and was recorded as unearned compensation. The unearned compensation is being amortized over the remaining vesting period of the stock options. The estimated incremental compensation expense related thereto for the six months and twelve months following the respective assumed dates of the merger is $1,621,000 and $2,847,000, respectively. (4) Represents the estimated savings in compensation expense that would have occurred during the six months and twelve months following the respective assumed dates of the merger, related to D.R. Horton employment agreements with two members of Schuler management, as described in the Joint Proxy Statement/Prospectus of D.R. Horton and Schuler, dated January 17, 2002, filed with the Securities and Exchange Commission. (5) Represents the net effect on income tax expense of the pro forma adjustments, calculated using the pro forma combined incremental income tax rate of 37.5% for the six months ended March 31, 2002, and 37.9% for the year ended September 30, 2001. (6) Represents the elimination of the goodwill amortization expense included in the Combined Pro Forma Schuler statement of income for the year ended September 30, 2001, as all of Schuler's prior goodwill balances were eliminated in the merger with D.R. Horton. NOTE C. DIVIDENDS The pro forma combined cash dividends per common share are not necessarily indicative of dividends to be paid to holders of D.R. Horton common stock in future periods. Future dividends will be determined by the D.R. Horton board of directors based on the earnings and financial condition of D.R. Horton and its subsidiaries, as well as other factors. 5 D.R. HORTON, INC. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AND UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME - (CONTINUED) NOTE D. PRO FORMA WEIGHTED AVERAGE NUMBER OF SHARES AND NET INCOME PER SHARE The pro forma combined basic net income per share for the six months ended March 31, 2002 and for the year ended September 30, 2001 is based on the weighted average number of shares of D.R. Horton common stock outstanding for the six months ended March 31, 2002 and the year ended September 30, 2001, assuming the issuance of 30,119,298 (split adjusted) shares of D.R. Horton common stock on October 1, 2001 for the six months ending March 31, 2002, and on October 1, 2000, for the year ended September 30, 2001. The pro forma combined diluted net income per share for the six months ended March 31, 2002 and the year ended September 30, 2001 is based on the weighted average number of shares of D.R. Horton common stock outstanding during the six months ended March 31, 2002 and the year ended September 30, 2001, adjusted for the effects of dilutive securities outstanding, plus the 30,119,298 (split adjusted) shares of D.R. Horton common stock issued in the merger and the dilutive effect of D.R. Horton stock options issued in the merger. Options to purchase approximately 791,000 (split adjusted) shares of D.R. Horton common stock were issued in the merger, which resulted in an incremental dilutive effect of 284,000 (split adjusted) shares for the six months ended March 31, 2002, and 165,000 (split adjusted) shares for the year ended September 30, 2001. NOTE E. COMBINED PRO FORMA SCHULER Schuler was formed in April 2001 when Schuler Residential combined with Western Pacific Housing. Schuler Residential is the predecessor of Schuler. Therefore, the Schuler statement of income for the year ended September 30, 2001 is presented on a pro forma combined basis to include the combined operations of Schuler, Schuler Residential and Western Pacific for the year ended September 30, 2001 assuming that the combination had taken place on October 1, 2000. Following are the historical statements of income of Schuler, Schuler Residential and Western Pacific and the pro forma adjustments which comprise the combined pro forma Schuler statement of income for the year ended September 30, 2001. 6 D.R. HORTON, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME - (CONTINUED)
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, SIX MONTHS ENDED MARCH 31, 2001 2001 2001 ---------------------------------------------------------------- ------------- ------------ PRO FORMA PRO FORMA SCHULER WESTERN PRO FORMA COMBINED COMBINED RESIDENTIAL PACIFIC ADJUSTMENTS SCHULER SCHULER SCHULER ------------ ------------ ------------ ------------ ------------ ------------ (IN THOUSANDS, EXCEPT PER SHARE DATA) Revenues .................... $ 298,807 $ 543,190 $ -- $ 841,997 $ 698,821 $ 1,540,818 Cost of sales ............... 226,305 424,088 -- 650,393 556,772 1,207,165 ------------ ------------ ------------ ------------ ------------ ------------ Gross profit ................ 72,502 119,102 -- 191,604 142,049 333,653 Selling, general & administrative expense .... 35,417 48,943 (4,207)(a) 80,153 79,297 159,450 Interest expense ............ 3,316 -- -- 3,316 3,540 6,856 Other expense ............... 704 14,003 -- 14,707 (722) 13,985 ------------ ------------ ------------ ------------ ------------ ------------ Income before income taxes ..................... 33,065 56,156 4,207 93,428 59,934 153,362 Income taxes ................ 12,785 -- 24,580(b) 37,365 23,839 61,204 ------------ ------------ ------------ ------------ ------------ ------------ Net income .................. $ 20,280 $ 56,156 $ (20,373) $ 56,063 $ 36,095 $ 92,158 ============ ============ ============ ============ ============ ============ Net income per common share: Basic ................. $ 1.01 N/A -- $ 1.39 $ 0.89 $ 2.28 Diluted ............... $ 0.93 N/A -- $ 1.33 $ 0.86 $ 2.18 ============ ============ ============ ============ ============ ============ Cash dividends per common share ............. -- N/A -- -- -- -- ============ ============ ============ ============ ============ ============ Weighted average number of common shares outstanding: Basic ................. 20,114 N/A 20,166(c) 40,280 40,517 40,399 Diluted ............... 22,972 N/A 20,166(c) 43,138 43,209 43,174 ============ ============ ============ ============ ============ ============
(a) Represents the exclusion of a non-cash charge for compensation expense recognized in conjunction with equity interests granted to Western Pacific executives related to the combination with Schuler Residential. This charge is a nonrecurring item and is not indicative of future operating results. (b) Represents the pro forma effect on the combined provision for income taxes resulting from the operations of Western Pacific and Schuler Residential for the six months ended March 31, 2001 and the other pro forma adjustment, based on an effective tax rate of 40.7%. Prior to its combination with Schuler Residential, Western Pacific was operated through a series of partnerships and was not subject to taxation at the entity level. (c) Represents the issuance of 20,166,000 Schuler shares of Class B common stock in the Western Pacific/Schuler Residential combination, assuming such shares were outstanding beginning on October 1, 2000. 7 -----END PRIVACY-ENHANCED MESSAGE-----