Company Quick10K Filing
DR Horton
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 378 $16,346
10-Q 2020-01-28 Quarter: 2019-12-31
10-K 2019-11-25 Annual: 2019-09-30
10-Q 2019-07-31 Quarter: 2019-06-30
10-Q 2019-04-30 Quarter: 2019-03-31
10-Q 2019-01-29 Quarter: 2018-12-31
10-K 2018-11-16 Annual: 2018-09-30
10-Q 2018-07-27 Quarter: 2018-06-30
10-Q 2018-04-30 Quarter: 2018-03-31
10-Q 2018-02-08 Quarter: 2017-12-31
10-K 2017-11-15 Annual: 2017-09-30
10-Q 2017-07-27 Quarter: 2017-06-30
10-Q 2017-04-25 Quarter: 2017-03-31
10-Q 2017-01-25 Quarter: 2016-12-31
10-K 2016-11-18 Annual: 2016-09-30
10-Q 2016-07-26 Quarter: 2016-06-30
10-Q 2016-04-25 Quarter: 2016-03-31
10-Q 2016-01-28 Quarter: 2015-12-31
10-K 2015-11-19 Annual: 2015-09-30
10-Q 2015-07-28 Quarter: 2015-06-30
10-Q 2015-04-24 Quarter: 2015-03-31
10-Q 2015-01-27 Quarter: 2014-12-31
10-K 2014-11-18 Annual: 2014-09-30
10-Q 2014-07-24 Quarter: 2014-06-30
10-Q 2014-04-24 Quarter: 2014-03-31
10-Q 2014-01-28 Quarter: 2013-12-31
10-K 2013-11-26 Annual: 2013-09-30
10-Q 2013-07-25 Quarter: 2013-06-30
10-Q 2013-04-26 Quarter: 2013-03-31
10-Q 2013-01-29 Quarter: 2012-12-31
10-K 2012-11-16 Annual: 2012-09-30
10-Q 2012-04-23 Quarter: 2012-03-31
10-Q 2012-01-27 Quarter: 2011-12-31
10-K 2011-11-17 Annual: 2011-09-30
10-Q 2011-08-02 Quarter: 2011-06-30
10-Q 2011-04-29 Quarter: 2011-03-31
10-Q 2011-01-28 Quarter: 2010-12-31
10-K 2010-11-17 Annual: 2010-09-30
10-Q 2010-08-03 Quarter: 2010-06-30
10-Q 2010-04-30 Quarter: 2010-03-31
10-Q 2010-02-02 Quarter: 2009-12-31
8-K 2020-01-27 Earnings, Exhibits
8-K 2020-01-22 Shareholder Vote
8-K 2019-11-12 Earnings, Exhibits
8-K 2019-11-07 Officers
8-K 2019-10-10 Enter Agreement, Other Events, Exhibits
8-K 2019-10-07 Other Events, Exhibits
8-K 2019-10-02 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-07-30 Earnings, Exhibits
8-K 2019-06-21 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-04-25 Earnings, Exhibits
8-K 2019-02-22 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-01-25 Earnings, Exhibits
8-K 2019-01-23 Shareholder Vote
8-K 2018-12-07 Accountant, Exhibits
8-K 2018-11-08 Earnings, Exhibits
8-K 2018-11-06 Officers, Exhibits
8-K 2018-10-09 Earnings, Exhibits
8-K 2018-09-25 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-07-26 Earnings, Exhibits
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-02-23 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-01-31 Earnings, Exhibits
8-K 2018-01-24 Shareholder Vote
8-K 2018-01-09 Earnings, Exhibits
DHI 2019-12-31
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 a12312019exhibit311.htm
EX-31.2 a12312019exhibit312.htm
EX-32.1 a12312019exhibit321.htm
EX-32.2 a12312019exhibit322.htm

DR Horton Earnings 2019-12-31

DHI 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
LEN 17,181 29,583 14,337 21,563 1,274 1,925 2,482 16,160 6% 6.5 7%
DHI 16,346 15,224 5,409 17,059 3,761 1,585 2,143 15,461 22% 7.2 10%
NVR 14,169 3,603 1,484 7,334 0 827 1,081 13,263 0% 12.3 23%
PHM 8,774 10,096 5,026 10,134 0 935 1,303 8,115 0% 6.2 9%
FBHS 7,822 6,343 3,999 5,637 1,498 407 782 9,204 27% 11.8 6%
TOL 5,713 10,452 5,468 4,845 1,508 699 1,024 4,876 31% 4.8 7%
THO 3,147 5,660 3,565 7,865 973 133 437 4,650 12% 10.6 2%
KBH 2,374 4,920 2,725 4,407 246 262 319 2,195 6% 6.9 5%
TMHC 2,134 5,178 2,775 4,685 822 237 353 4,028 18% 11.4 5%
MDC 2,040 3,086 1,425 882 0 203 288 2,569 0% 8.9 7%

Document
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Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From              To             
Commission File Number: 1-14122
D.R. Horton, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
75-2386963
 
 
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
1341 Horton Circle
Arlington, Texas 76011
(Address of principal executive offices) (Zip code)
(817) 390-8200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
 
 
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share
 
DHI
 
New York Stock Exchange
5.750% Senior Notes due 2023
 
DHI 23A
 
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
 
Accelerated filer
 
Non-accelerated filer
 
Smaller reporting company
 
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  ý
As of January 22, 2020, there were 366,363,723 shares of the registrant’s common stock, par value $.01 per share, outstanding.
 



D.R. HORTON, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
 
 
Page
 
 
 



2

Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


December 31,
2019

September 30,
2019

(In millions)
(Unaudited)
ASSETS



Cash and cash equivalents
$
1,583.3


$
1,494.3

Restricted cash
12.6


19.7

Total cash, cash equivalents and restricted cash
1,595.9

 
1,514.0

Inventories:



Construction in progress and finished homes
5,580.1


5,245.0

Residential land and lots — developed and under development
6,214.1


5,939.4

Land held for development
82.1


77.8

Land held for sale
22.9


19.8

Total inventory
11,899.2


11,282.0

Mortgage loans held for sale
1,025.1


1,072.0

Deferred income taxes, net of valuation allowance of $18.3 million and $18.7 million
at December 31, 2019 and September 30, 2019, respectively
154.1


163.1

Property and equipment, net
563.4


499.2

Other assets
921.7


912.8

Goodwill
163.5


163.5

Total assets
$
16,322.9


$
15,606.6

LIABILITIES



Accounts payable
$
659.3


$
634.0

Accrued expenses and other liabilities
1,377.4


1,278.1

Notes payable
3,783.3


3,399.4

Total liabilities
5,820.0


5,311.5

Commitments and contingencies (Note L)





EQUITY



Preferred stock, $.10 par value, 30,000,000 shares authorized, no shares issued



Common stock, $.01 par value, 1,000,000,000 shares authorized, 393,014,557 shares issued
and 366,273,190 shares outstanding at December 31, 2019 and 392,172,821 shares issued
and 368,431,454 shares outstanding at September 30, 2019
3.9


3.9

Additional paid-in capital
3,182.0


3,179.1

Retained earnings
8,006.8


7,640.1

Treasury stock, 26,741,367 shares and 23,741,367 shares at December 31, 2019
and September 30, 2019, respectively, at cost
(965.3
)

(802.2
)
Stockholders’ equity
10,227.4


10,020.9

Noncontrolling interests
275.5


274.2

Total equity
10,502.9


10,295.1

Total liabilities and equity
$
16,322.9


$
15,606.6





See accompanying notes to consolidated financial statements.


3

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 

Three Months Ended 
 December 31,
 
2019

2018

(In millions, except per share data)
(Unaudited)
Revenues
$
4,020.7


$
3,519.0

Cost of sales
3,084.2


2,751.1

Selling, general and administrative expense
455.8


402.8

Gain on sale of assets
(31.1
)
 
(2.0
)
Other (income) expense
(11.5
)

(8.6
)
Income before income taxes
523.3


375.7

Income tax expense
90.8


89.0

Net income
432.5


286.7

Net income (loss) attributable to noncontrolling interests
1.2


(0.5
)
Net income attributable to D.R. Horton, Inc.
$
431.3


$
287.2







Basic net income per common share attributable to D.R. Horton, Inc.
$
1.17


$
0.77

Weighted average number of common shares
368.3

 
375.1

 
 
 
 
Diluted net income per common share attributable to D.R. Horton, Inc.
$
1.16


$
0.76

Adjusted weighted average number of common shares
373.4

 
380.1



























See accompanying notes to consolidated financial statements.


4

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF TOTAL EQUITY

 
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 (368,431,454 shares)
$
3.9

 
$
3,179.1

 
$
7,640.1

 
$
(802.2
)
 
$
274.2

 
$
10,295.1

Net income

 

 
431.3

 

 
1.2

 
432.5

Exercise of stock options (258,800 shares)

 
4.1

 

 

 

 
4.1

Stock issued under employee benefit plans (582,936 shares)

 

 

 

 

 

Cash paid for shares withheld for taxes

 
(17.3
)
 

 

 

 
(17.3
)
Stock-based compensation expense

 
16.6

 

 

 

 
16.6

Cash dividends declared ($0.175 per share)

 

 
(64.6
)
 

 

 
(64.6
)
Repurchases of common stock (3,000,000 shares)

 

 

 
(163.1
)
 

 
(163.1
)
Distributions to noncontrolling interests

 

 

 

 
(0.4
)
 
(0.4
)
Change of ownership interest in Forestar

 
(0.5
)
 

 

 
0.5

 

Balances at December 31, 2019 (366,273,190 shares)
$
3.9

 
$
3,182.0

 
$
8,006.8

 
$
(965.3
)
 
$
275.5

 
$
10,502.9




 
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, 2018 (376,261,635 shares)
$
3.9

 
$
3,085.0

 
$
6,217.9

 
$
(322.4
)
 
$
174.5

 
$
9,158.9

Cumulative effect of adoption of ASC 606

 

 
27.1

 

 

 
27.1

Net income (loss)

 

 
287.2

 

 
(0.5
)
 
286.7

Exercise of stock options (806,817 shares)

 
8.6

 

 

 

 
8.6

Stock issued under employee benefit plans (273,608 shares)

 

 

 

 

 

Cash paid for shares withheld for taxes

 
(4.1
)
 

 

 

 
(4.1
)
Stock-based compensation expense

 
18.1

 

 

 

 
18.1

Cash dividends declared ($0.15 per share)

 

 
(56.0
)
 

 

 
(56.0
)
Repurchases of common stock (4,100,000 shares)

 

 

 
(140.6
)
 

 
(140.6
)
Distributions to noncontrolling interests

 

 

 

 
(0.5
)
 
(0.5
)
Balances at December 31, 2018 (373,242,060 shares)
$
3.9

 
$
3,107.6

 
$
6,476.2

 
$
(463.0
)
 
$
173.5

 
$
9,298.2









See accompanying notes to consolidated financial statements.


5

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

 
Three Months Ended 
 December 31,
 
2019
 
2018
 
(In millions)
(Unaudited)
OPERATING ACTIVITIES
 
 
 
Net income
$
432.5

 
$
286.7

Adjustments to reconcile net income to net cash used in operating activities:
 
 
 
Depreciation and amortization
19.0

 
16.9

Amortization of discounts and fees
3.1

 
2.6

Stock-based compensation expense
16.6

 
18.1

Equity in earnings of unconsolidated entities
(0.5
)
 
(0.6
)
Distributions of earnings of unconsolidated entities

 
0.5

Deferred income taxes
7.2

 
3.9

Inventory and land option charges
3.8

 
8.0

Gain on sale of assets
(31.1
)
 
(2.0
)
Changes in operating assets and liabilities:
 
 
 
Increase in construction in progress and finished homes
(334.8
)
 
(500.3
)
Increase in residential land and lots –
     developed, under development, held for development and held for sale
(373.1
)
 
(435.9
)
Decrease (increase) in other assets
2.0

 
(34.0
)
Net decrease in mortgage loans held for sale
46.9

 
174.2

Increase in accounts payable, accrued expenses and other liabilities
94.6

 
88.8

Net cash used in operating activities
(113.8
)
 
(373.1
)
INVESTING ACTIVITIES
 
 
 
Expenditures for property and equipment
(21.6
)
 
(20.2
)
Proceeds from sale of assets
62.8

 
10.4

Expenditures related to rental properties
(59.6
)
 
(11.4
)
Return of investment in unconsolidated entities
1.9

 
4.4

Net principal increase of other mortgage loans and real estate owned
(0.6
)
 
(0.6
)
Payments related to business acquisitions
(0.7
)
 
(293.0
)
Net cash used in investing activities
(17.8
)
 
(310.4
)
FINANCING ACTIVITIES
 
 
 
Proceeds from notes payable
495.7

 
578.3

Repayment of notes payable

 
(276.1
)
Payments on mortgage repurchase facility, net
(38.6
)
 
(163.8
)
Proceeds from stock associated with certain employee benefit plans
4.1

 
8.6

Cash paid for shares withheld for taxes
(17.3
)
 
(4.1
)
Cash dividends paid
(64.6
)
 
(56.0
)
Repurchases of common stock
(163.1
)
 
(140.6
)
Distributions to noncontrolling interests, net
(0.4
)
 
(0.5
)
Other financing activities
(2.3
)
 

Net cash provided by (used in) financing activities
213.5

 
(54.2
)
Net increase (decrease) in cash, cash equivalents and restricted cash
81.9

 
(737.7
)
Cash, cash equivalents and restricted cash at beginning of period
1,514.0

 
1,506.0

Cash, cash equivalents and restricted cash at end of period
$
1,595.9

 
$
768.3

SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:
 
 
 
Stock issued under employee incentive plans
$
31.8

 
$
9.4

Accrued expenditures for property and equipment
$
7.7

 
$
15.2

Accrual for holdback payment related to acquisition
$
9.5

 
$
27.7

See accompanying notes to consolidated financial statements.


6

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December 31, 2019


NOTE ABASIS 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, 2019, 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, 2019.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current year presentation. At December 31, 2019, the Company reclassified its single-family rental properties from other assets to property and equipment in its homebuilding segment. Reclassification of the prior period amount resulted in a $37.0 million decrease in other assets with a corresponding increase in property and equipment at September 30, 2019. This reclassification had no effect on the Company’s consolidated financial position or results of operations.

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, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2020 or subsequent periods.

Adoption of New Accounting Standard

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases,” which requires that lease assets and liabilities be recognized on the balance sheet and that key information about leasing arrangements be disclosed. The guidance was effective for the Company beginning October 1, 2019 and did not have a material impact on its consolidated financial position, results of operations or cash flows. As a result of the adoption of this standard on October 1, 2019, the Company recorded right of use assets of $39.0 million and lease liabilities of $40.3 million. Lease right of use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities in the consolidated balance sheet.



7

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2019




Pending Accounting Standards

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses,” which replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information in determining credit loss estimates. The guidance is effective for the Company beginning October 1, 2020 and is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other,” which simplifies the measurement of goodwill impairment by removing the second step of the goodwill impairment test and requires the determination of the fair value of individual assets and liabilities of a reporting unit. Under the new guidance, goodwill impairment is measured as the amount by which a reporting unit’s carrying amount exceeds its fair value with the loss recognized limited to the total amount of goodwill allocated to the reporting unit. The guidance is effective for the Company beginning October 1, 2020 and is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

In December 2019, the 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 and cash flows.






8

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2019




NOTE BSEGMENT 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 52 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 land 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:
 
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

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.

The Forestar segment is a residential lot development company with operations in 51 markets across 20 states. Forestar is making significant investments in land acquisition and development to expand its business across a geographically diversified national platform. 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 related servicing rights to third-party purchasers.

In addition to its homebuilding, Forestar and financial services operations, the Company has subsidiaries that engage in other business activities. These subsidiaries conduct insurance-related operations, construct and own income-producing multi-family rental properties, own non-residential real estate including ranch land and improvements and own and operate oil and gas related assets. The operating results of these subsidiaries are immaterial for separate reporting and therefore are grouped together and presented as other. One of these subsidiaries, DHI Communities, constructs multi-family rental properties and has four projects under active construction and one project that was substantially complete at December 31, 2019. In November 2019, DHI Communities sold a multi-family rental property for $61.5 million and recorded a gain on the sale of $31.2 million. At December 31, 2019 and September 30, 2019, the consolidated balance sheets included $209.8 million and $204.0 million, respectively, of assets owned by DHI Communities.



9

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2019




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, 2019. Financial information relating to the Company’s reporting segments is as follows:
 
 
December 31, 2019
 
 
Homebuilding
 
Forestar (1)
 
Financial Services
 
Other (2)
 
Eliminations (3)
 
Other Adjustments (4)
 
Consolidated
 
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,152.9

 
$
373.3

 
$
37.5

 
$
19.6

 
$

 
$

 
$
1,583.3

Restricted cash
 
6.6

 

 
5.9

 
0.1

 

 

 
12.6

Inventories:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Construction in progress and finished homes
 
5,603.3

 

 

 

 
(23.2
)
 

 
5,580.1

     Residential land and lots — developed and under development
 
5,192.7

 
1,051.4

 

 

 
(32.1
)
 
2.1

 
6,214.1

     Land held for development
 
66.7

 
15.4

 

 

 

 

 
82.1

     Land held for sale
 
22.9

 

 

 

 

 

 
22.9


 
10,885.6

 
1,066.8

 

 

 
(55.3
)
 
2.1

 
11,899.2

Mortgage loans held for sale
 

 

 
1,025.1

 

 

 

 
1,025.1

Deferred income taxes, net
 
140.1

 
11.8

 

 

 
8.2

 
(6.0
)
 
154.1

Property and equipment, net
 
292.8

 
0.9

 
3.1

 
267.6

 
(1.0
)
 

 
563.4

Other assets
 
864.4

 
27.1

 
59.7

 
46.1

 
(86.1
)
 
10.5

 
921.7

Goodwill
 
134.3

 

 

 

 

 
29.2

 
163.5

 
 
$
13,476.7

 
$
1,479.9

 
$
1,131.3

 
$
333.4

 
$
(134.2
)
 
$
35.8

 
$
16,322.9

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
624.7

 
$
19.8

 
$
1.4

 
$
13.4

 
$

 
$

 
$
659.3

Accrued expenses and other liabilities
 
1,240.6

 
172.4

 
62.3

 
9.7

 
(94.5
)
 
(13.1
)
 
1,377.4

Notes payable
 
2,470.0

 
462.1

 
850.2

 

 

 
1.0

 
3,783.3

 
 
$
4,335.3

 
$
654.3

 
$
913.9

 
$
23.1

 
$
(94.5
)
 
$
(12.1
)
 
$
5,820.0

______________
(1)
Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.
(2)
Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.
(3)
Amounts represent the elimination of intercompany transactions.
(4)
Amounts represent purchase accounting adjustments related to the Forestar acquisition.


10

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2019




 
 
September 30, 2019
 
 
Homebuilding
 
Forestar (1)
 
Financial Services
 
Other (2)
 
Eliminations (3)
 
Other Adjustments (4)
 
Consolidated
 
 
(In millions)
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,043.0

 
$
382.8

 
$
43.4

 
$
25.1

 
$

 
$

 
$
1,494.3

Restricted cash
 
8.0

 

 
11.6

 
0.1

 

 

 
19.7

Inventories:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Construction in progress and finished homes
 
5,249.0

 

 

 

 
(4.0
)
 

 
5,245.0

     Residential land and lots — developed and under development
 
4,956.1

 
1,011.8

 

 

 
(31.4
)
 
2.9

 
5,939.4

     Land held for development
 
60.7

 
17.1

 

 

 

 

 
77.8

     Land held for sale
 
19.8

 

 

 

 

 

 
19.8


 
10,285.6

 
1,028.9

 

 

 
(35.4
)
 
2.9

 
11,282.0

Mortgage loans held for sale
 

 

 
1,072.0

 

 

 

 
1,072.0

Deferred income taxes, net
 
146.4

 
17.4

 

 

 
5.1

 
(5.8
)
 
163.1

Property and equipment, net
 
272.4

 
2.4

 
3.2

 
221.2

 

 

 
499.2

Other assets
 
826.2

 
24.2

 
68.3

 
71.5

 
(88.5
)
 
11.1

 
912.8

Goodwill
 
134.3

 

 

 

 

 
29.2

 
163.5

 
 
$
12,715.9

 
$
1,455.7

 
$
1,198.5

 
$
317.9

 
$
(118.8
)
 
$
37.4

 
$
15,606.6

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
598.6

 
$
16.8

 
$
7.0

 
$
11.6

 
$

 
$

 
$
634.0

Accrued expenses and other liabilities
 
1,152.5

 
169.5

 
53.0

 
9.3

 
(93.6
)
 
(12.6
)
 
1,278.1

Notes payable
 
2,047.6

 
460.5

 
888.9

 

 

 
2.4

 
3,399.4

 
 
$
3,798.7

 
$
646.8

 
$
948.9

 
$
20.9

 
$
(93.6
)
 
$
(10.2
)
 
$
5,311.5

______________
(1)
Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.
(2)
Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.
(3)
Amounts represent the elimination of intercompany transactions.
(4)
Amounts represent purchase accounting adjustments related to the Forestar acquisition.


11

Table of Contents

D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2019




 
 
Three Months Ended December 31, 2019
 
 
Homebuilding
 
Forestar (1)
 
Financial Services
 
Other (2)
 
Eliminations (3)
 
Other Adjustments (4)
 
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home sales
 
$
3,863.3

 
$

 
$

 
$

 
$

 
$

 
$
3,863.3

Land/lot sales and other
 
19.7

 
247.2

 

 
8.8

 
(221.2
)
 

 
54.5

Financial services
 

 

 
102.9

 

 

 

 
102.9

 
 
3,883.0

 
247.2

 
102.9

 
8.8

 
(221.2
)
 

 
4,020.7

Cost of sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home sales (5)
 
3,051.6

 

 

 

 
(6.7
)
 

 
3,044.9

Land/lot sales and other
 
13.3

 
216.3

 

 

 
(193.4
)
 
(0.7
)
 
35.5

Inventory and land option charges
 
3.5

 
0.3

 

 

 

 

 
3.8

 
 
3,068.4

 
216.6

 

 

 
(200.1
)
 
(0.7
)
 
3,084.2

Selling, general and administrative expense
 
358.4

 
10.5

 
77.9

 
8.8

 

 
0.2