D.R. Horton, Inc. (NYSE:DHI) said late Tuesday that the company expects the Tax Cuts and Jobs Act (“Tax Act”), which was enacted on December 22, 2017, to have a favorable impact on its fiscal 2018 results. The company is revising its previously issued guidance by lowering the estimate for its fiscal 2018 effective tax rate to approximately 26%, excluding a one-time charge to reduce its net deferred tax assets in the first quarter.
The change in the corporate tax rate requires a re-measurement of the Company’s net deferred tax assets in the period in which the law was enacted. Based on current estimates, the re-measurement will result in a charge of approximately $115 million in the first quarter of fiscal 2018 to reduce the company’s net deferred tax assets and increase the company’s income tax expense. No other changes to the company’s previous fiscal 2018 guidance are being made.
The company’s estimate of the impact from the Tax Act is based on currently available information and interpretation of its provisions. Horton anticipates finalizing the impact on its December 31, 2017 financials by the time of its earnings release scheduled for January 31, 2018.
The company also currently expects that its effective tax rate for fiscal 2019 will be approximately 25%.
