America's Builder in Loss

D.R. Horton, Inc. (NYSE:DHI), America's Builder, Thursday (July 26, 2007), reported a net loss for its third fiscal quarter ended June 30, 2007 of $823.8 million, or $2.62 per diluted share.

The quarterly results included pre-tax charges to cost of sales of $835.8 million for inventory impairments and $16.2 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the same quarter of fiscal 2006 was $292.8 million, or $0.93 per diluted share. Homebuilding revenue for the third quarter of fiscal 2007 totaled $2.5 billion, compared to $3.6 billion in the same quarter of fiscal 2006. Homes closed in the current quarter totaled 9,643, compared to 13,377 homes closed in the year ago quarter.

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

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

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

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

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