These homes are earmarked for his employees who can’t afford the American Dream
By Cheryl Hall

The Dallas Morning News

RISMEDIA, June 17- (KRT) - This year, D.R. Horton Inc. will sell two dozen houses for practically nothing. Yet these three- and four-bedroom homes will be more profitable than the other 45,000 units the Arlington, Texas,-based company constructs.

At least that’s the way Don Horton views it.

These homes are earmarked for his employees who can’t afford the American Dream. So he’s helping them with a program similar to Habitat for Humanity’s.

“People take care of the company. It’s up to the company to take care of the people,” the 54-year-old chairman of D.R. Horton says. “If the employee can only afford to pay $200 or $300 a month, the company will reduce the note down to that. Instead of the mortgage being, say, $70,000 to $100,000, it’ll be $20,000 to $40,000.”

Mr. Horton still thinks the company he founded 25 years ago is a family business where everybody is kin — never mind that it’s the nation’s largest home builder, with more than 8,000 employees and $8.7 billion in 2003 revenue.

D.R. Horton builds homes priced from $80,000 to $750,000 in 21 states and 51 markets and provides mortgage financing and title services.

At Mr. Horton’s instigation, the company has a free summer camp for children of workers who can’t afford such outings.

And it makes up the pay difference for called-up military reservists.

“They have enough to worry about without worry about their families making ends meet,” says Mr. Horton.

Until last year, the company was a major supporter of Habitat but decided to use those dollars to specifically aid Horton employees in financial need, living in questionable neighborhoods or sharing too-tight quarters.

“We’re in the home-building business,” Mr. Horton says. “We can make 100 percent of every dollar go into houses and not administrative costs.”

So far, 15 applications are in the works.

For Justin, a file clerk in California whose wife is blind, getting a Horton Family Home would mean escaping publicly assisted rental housing, reducing crippling debt and providing a safer environment for his 14-year-old daughter.

It took a year to get IRS approval for tax-free status and to hammer out legal concerns. The first approvals are expected later this month.

“We figure the first year we’ll probably do 25 homes,” Mr. Horton says. “I see that doubling next year and getting up to a 100.”

Another pet project of his is Camp Horton. This week, the first wave of 50 employee children arrives at the company’s 28,000-acre ranch 20 miles southeast of Fort Stockton in West Texas.

They’ll fly into Midland-Odessa from as far away as Hawaii and New Jersey to spend seven days riding horses and four-wheelers and chasing wild elk in a spread that’s six miles wide and 17 miles long.

For many of these 10- to 15-year-olds, it will be their first vacation ever.

“It’s not that the employees aren’t making good money,” Mr. Horton explains. “You can be a receptionist in New Jersey making $40,000 a year. But after you get through all the taxes and bills, there’s no money left.”

The ranch is used primarily to entertain hunting enthusiast subcontractors, vendors and business clients, as well as for a corporate team-building retreat.

Thirty-seven bankers in the company’s $1.25 billion credit consortium were recently turned into City Slickers, driving 25 head of cattle 12 miles on horseback.

“They were sore, but they had a blast,” says Mr. Horton, who acted as trail boss.

“This year we’ll have close to 1,100 people come through our ranch — 300 kids and 800 big kids,” he says.

The company just purchased an additional 58,000 acres with plans for a second lodge so it can handle 612 children in 2005.

“I don’t think we even want to know what the cost 1/8of running the camp3/8 is,” Mr. Horton says. “I’d say over $3 1/8million3/8, under $5 1/8million3/8, but it’s well worth it.”

He dismisses any financial analyst criticism about such spending.

“We don’t run our business to suit Wall Street,” says Mr. Horton, one of the largest shareholders. “The best thing we can do for Wall Street is continue to build a strong company, and that means taking care of our people.”

As proof, he points to 106 (soon to be 107) consecutive quarters of record sales and profits.

Although its billboards are mounted throughout North Texas, D.R. Horton may be the most unknown Fortune 500 corporation with headquarters here. Ask who’s the biggest home builder in the country, and people are more likely to name Centex Corp. or Pulte Homes Inc.

“That’s probably true,” says Mr. Horton in the company’s low-rise headquarters near Hurricane Harbor. “We’re not big personal horn-tooters. Actions speak louder than words.”

In January, Forbes magazine named D.R. Horton the nation’s best-managed construction company, citing Mr. Horton’s acquisition prowess. Then in April, Professional Builder magazine ranked the company No. 1 in dollar volume, having sold 37,000 homes in 2003.

In this arena, he’s Donald R. Horton, chairman of the nation’s fastest-growing home builder, with expectations to be twice its size in six years.

But growing up in rural Arkansas, this middle son of five children was Donnie Ray when his mother wanted his undivided attention.

When he was 6, his family moved from their farm into Marshall, Ark., when his father was elected county sheriff.

“It was very much like Andy Griffith. We lived in the bottom of the jail, and the prisoners were on top,” recalls Mr. Horton.

The worst offender was the town drunk, with an occasional roadblock adding to the local excitement.

After attending the University of Central Arkansas for three years, the 21-year-old transferred to the pharmacy school at the University of Oklahoma. But he quickly determined he didn’t want to count pills for the rest of his life.

What he did want was to marry Marty Martin, a perky brunette who caught his eye walking up the science building steps the first day of class.

In 1971, the couple moved to Marshall, where Mr. Horton took over the real estate business his father started after his law enforcement stint.

Six years later, Mrs. Horton and the couple’s two young sons moved in with her folks in Fort Worth to finish her teaching degree. Mr. Horton followed her in 1978, used $3,000 in life’s savings, borrowed $30,000 and built his first home in south Fort Worth — a three-bedroom, one-bath ranch-style that sold before the framing was finished.

Although he certainly didn’t imagine what’s come to be, Mr. Horton did set goals. His first was 100 homes in one year, achieved in year three.

“Our goal is 55 1/8thousand homes3/8 in ‘05, then 65 in ‘06,” he says. “Our ultimate goal is to be the first builder to do 100,000 units. We plan to achieve that by year 2010.”

To put 100,000 houses in perspective: That was one in every 15 homes built by the whole industry in 2003.

It means the Horton workforce (which doesn’t include tens of thousands of construction subcontractors) needs to nearly double — hence the importance of creating a corporate environment where employees don’t leave.

“As far as the division presidents, we average over 13 years,” Mr. Horton says, comparing that to an industry average of two to three years. “At the regional level, we average over 15 years.”

His first “trim and trash guy” — the person who does carpentry trim work and construction cleanup — was a street-hustling day laborer driving a $200 pickup truck in 1980. Twenty-four years later, Jim Frasure is the president of the Las Vegas division.

“We had a warrior mentality: We could beat anyone at any time,” Mr. Frasure recalls of the rough-and-tumble early years.

Mr. Horton’s idea of light reading is analysts’ reports on the home building industry. He owns a cutting horse ranch an hour west of Fort Worth with about 500 cutting horses, a breeding operation and training facilities.

“Frankly,” says company vice chairman Don Tomnitz, “he doesn’t have as much fun with the horses as he does with business and Camp Horton.”

Mr. Horton turned over the CEO reins to the 55-year-old Mr. Tomnitz in late 1998. The duo recently celebrated their 20th anniversary as business associates.

For years when they traveled together, they shared a motel room to hold down costs, Mr. Tomnitz says.

“Two beds, of course,” Mr. Horton pipes in.

Their road accommodations these days are considerably better, as are their multimillion-dollar compensation packages. But their business bond remains based on trust without egos or titles getting in the way.

“We don’t care who gets credit for what,” says Mr. Tomnitz. “Clearly, though, he’s the visionary and I’m the guy who makes sure the vision gets executed.”

? 2004, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News.

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