Builders keep tight reign on inventories.

The Producers: Public Builder Report Card

By Iris Richmond

The public home builders ended last year with an average debt-to-capital ratio of about 48 percent, well below the 60 percent?plus levels that were the norm in the late ?80s and early ?90s.

Cleaner balance sheets are the result, tidied up considerably by controlling more land under option instead of owning it. Looking back 10 years ago, builders controlled 25 percent of their land off balance sheet. Today, that percentage strikes a better balance at 50 percent.

?Having too many houses and [too much] land has traditionally killed builders, and everyone learned from Del Webb,? says Matthew Moyer, equity research analyst at A.G. Edwards. ?Builders are a lot less longer on land than they used to be, and keeping a shorter supply, which means far less spec building. They may lose the sale from the buyer who wants to buy a house tomorrow, but the resale market is there for that.?

While most companies grew by 20 percent last year, so did the top officer compensation packages. NVR?s compensation amount, however, more than tripled, ranking the builder first for the third consecutive year.

?Compensation [based on financial performance] is the right kind of motivation,? says Carl Reichardt, an analyst with Banc of America Securities. ?It?s something that?s going to benefit shareholders in the end.?

Top 10 in Order Backlog

(in millions)

Pulte Corp. $2,100
Centex Corp. $2,013
Lennar Corp. $1,982
KB Home $1,910
D.R. Horton $1,830
Schuler Homes $1,692
NVR $1,512
Toll Brothers $1,411
The Ryland Group $917
Beazer Homes USA $815

Officer Compensation Leaders

(in millions)

NVR $18.30
Toll Brothers $8.04
KB Home $7.52
D.R. Horton $4.70
Centex Corp. $4.26
K. Hovnanian $3.50
M/I Schottenstein $3.45
Lennar Corp. $3.42
Beazer Homes USA $2.21
Meritage Corp. $1.88

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