Financial Analysis

COMMITMENTS AND CONTINGENCIES Warranty Claims The Company typically provides its homebuyers with warranties for defects in structural elements, mechanical systems and other construction components of the home. Warranty liabilities are established by charging cost of sales for each home delivered based on managements estimate of expected warranty-related costs and by accruing for existing warranty claims. The Companys warranty liability is based upon historical warranty cost experience in each market in which it operates. The estimation of these costs is subject to variability due to uncertainties related to these factors. Due to the judgment required in establishing the liability for warranty claims, actual future costs could differ from current estimated amounts, and it is not possible for the Company to make a reasonable estimate of the possible loss or range of loss in excess of its warranty liability. Changes in the Companys warranty liability during fiscal 2025 and 2024 were as follows: September 30, 2025 2024 (In millions) Warranty liability, beginning of year $ 566.9 $ 512.4 Warranties issued 188.8 210.6 Changes in liability for pre-existing warranties (68.5) (36.0) Settlements made (121.0) (120.1) Warranty liability, end of year $ 566.2 $ 566.9 Legal Claims and Insurance The Company is named as a defendant in various claims, complaints and other legal actions in the ordinary course of business. At any point in time, the Company is managing several hundred individual c …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

EMPLOYEE BENEFIT PLANS The Company offers its employees a comprehensive compensation and benefits package, which includes a broad range of benefits, including medical, dental and vision healthcare insurance and paid parental leave. In addition to base pay, eligible employees may participate in the Companys 401(k) plan, employee stock purchase plan, short-term incentive bonus program and/or its stock compensation plans as described below. Deferred Compensation Plans The Company has a 401(k) plan for all employees who have been with the Company for a period of six months or more. The Company matches portions of employees voluntary contributions. The Company recorded $44.3 million, $43.8 million and $40.2 million of expense for matching contributions in fiscal 2025, 2024 and 2023, respectively. The Companys Supplemental Executive Retirement Plan (SERP) is a non-qualified deferred compensation program that provides benefits payable to certain management employees upon retirement, death or termination of employment. Under the SERP, the Company accrues an unfunded benefit based on a percentage of the eligible employees salaries, as well as an interest factor based upon a predetermined formula. The Companys liabilities related to the SERP were $64.2 million and $56.8 million at September 30, 2025 and 2024, respectively. The Company recorded $9.4 million, $8.9 million and $8.3 million of expense for this plan in fiscal 2025, 2024 and 2023, respectively. The Company has a deferred com …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

NOTES PAYABLE The Companys notes payable at their carrying amounts consist of the following: September 30, 2025 2024 (In millions) Homebuilding Revolving credit facility $ $ 2.5% senior notes due 2024 500.0 2.6% senior notes due 2025 499.0 1.3% senior notes due 2026 (1) 598.8 597.7 1.4% senior notes due 2027 (1) 498.2 497.4 4.85% senior notes due 2030 (1) 495.5 5.0% senior notes due 2034 (1) 687.7 686.5 5.5% senior notes due 2035 (1) 693.6 Other notes 180.6 146.2 3,154.4 2,926.8 Rental Revolving credit facility 600.0 745.0 Other notes 5.7 600.0 750.7 Forestar Revolving credit facility 3.85% senior notes due 2026 398.4 5.0% senior notes due 2028 (2) 298.7 298.1 6.5% senior notes due 2033 (2) 494.2 Other notes 9.9 9.9 802.8 706.4 Financial Services Mortgage repurchase facilities: Committed facility 1,103.5 1,229.3 Uncommitted facility 304.8 304.5 1,408.3 1,533.8 Total notes payable $ 5,965.5 $ 5,917.7 _______________ (1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $18.9 million and $11.7 million at September 30, 2025 and 2024, respectively. (2) Debt issuance costs that were deducted from the carrying amount of Forestars senior notes totaled $7.2 million and $3.5 million at September 30, 2025 and 2024, respectively. As of September 30, 2025, maturities of consolidated notes payable, assuming the mortgage repurchase facility is not extended or renewed, are $1.6 billion in fiscal 2026, $604.7 million in fiscal 2027, $1. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

FAIR VALUE MEASUREMENTS Fair value measurements are used for the Companys mortgage loans held for sale, mortgage servicing rights, IRLCs and other derivative instruments on a recurring basis and are used for inventories, other mortgage loans and real estate owned on a nonrecurring basis, when events and circumstances indicate that the carrying value is not recoverable. The fair value hierarchy and its application to these Company assets and liabilities is as follows: Level 1 Valuation is based on quoted prices in active markets for identical assets and liabilities. The Company does not currently have any assets or liabilities measured at fair value using Level 1 inputs. Level 2 Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. The Companys assets and liabilities measured at fair value using Level 2 inputs on a recurring basis are as follows: Mortgage loans held for sale - The fair value of these loans is generally calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Closed mortgage loans are typically sold shortly after origination, which limits exposure to nonperformance by loan buyer counterparties to a short time period. In addition, the Company actively monitors the financial str …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

INCOME TAXES Income Tax Expense The components of the Companys income tax expense are as follows: Year Ended September 30, 2025 2024 2023 (In millions) Current tax expense: Federal $ 821.4 $ 1,200.9 $ 1,293.0 State 174.4 258.8 272.4 995.8 1,459.7 1,565.4 Deferred tax expense (benefit): Federal 104.8 15.5 (39.0) State 18.4 3.5 (6.9) 123.2 19.0 (45.9) Total income tax expense $ 1,119.0 $ 1,478.7 $ 1,519.5 The Companys effective tax rate was 23.6%, 23.5% and 24.1% in fiscal 2025, 2024 and 2023, respectively. The effective tax rates for all years include an expense for state income taxes and tax benefits related to stock-based compensation and federal energy efficient home tax credits. Reconciliation of Expected Income Tax Expense Differences between income tax expense and tax computed by applying the federal statutory rate of 21% to income before income taxes during each year is due to the following: Year Ended September 30, 2025 2024 2023 (In millions) Income taxes at federal statutory rate $ 995.4 $ 1,319.8 $ 1,326.1 Increase (decrease) in tax resulting from: State income taxes, net of federal benefit 154.1 205.8 208.1 Valuation allowance (0.3) 0.1 (3.1) Tax credits (39.5) (70.4) (44.4) Excess tax benefit from stock-based compensation (16.0) (42.7) (25.6) Tax contingencies (1.4) (1.5) Other 25.3 67.5 59.9 Total income tax expense $ 1,119.0 $ 1,478.7 $ 1,519.5 Deferred Income Taxes Deferred tax assets and liabilities reflect the tax consequences of temporary differences between …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures. The ASU expands public entities segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segments profit or loss and assets. The Company adopted this standard for the annual reporting period ended September 30, 2025, with retrospective disclosure of prior periods presented. See Note B for the related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures. The standard is effective for the Companys annual periods beginning in fiscal 2026. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation D …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Companys operating segments are its 92 homebuilding divisions, its rental operations, its majority-owned Forestar residential lot development operations, its financial services operations and its other business activities. The Companys reporting segments are its homebuilding reporting segments, its Forestar lot development segment, its financial services segment and its rental operations segment. The accounting policies of the reporting segments are described throughout Note A. Homebuilding The homebuilding operating segments are aggregated into six reporting segments. The reporting segments and the states in which the Company has homebuilding operations are as follows: Northwest: Colorado, Oregon, Utah and Washington Southwest: Arizona, California, Hawaii, Nevada and New Mexico South Central: Arkansas, Oklahoma and Texas Southeast: Alabama, Florida, Louisiana and Mississippi East: Georgia, North Carolina, South Carolina and Tennessee North: Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and Wisconsin Homebuilding is the Companys core business, generating 92% of consolidated revenues in fiscal 2025 and 2024 and 90% of consolidated revenues in fiscal 2023. The Companys homebuilding divisions are primarily engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in 126 markets across 36 state …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include the accounts of D.R. Horton, Inc. and all of its wholly 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. As of September 30, 2025, the Company owns a 62% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 38% interest the Company does not own is accounted for as noncontrolling interests. All intercompany accounts, transactions and balances have been eliminated in consolidation. 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. Revenue Recognition Homebuilding revenue and related profit are generally recognized at the time of the …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS EQUITY D.R. Horton has an automatically effective universal shelf registration statement, filed with the SEC in July 2024, registering debt and equity securities that it may issue from time to time in amounts to be determined. At September 30, 2025, the Company had 404,031,443 shares of common stock issued and 294,475,153 shares outstanding. No shares of preferred stock were issued or outstanding. In April 2025, the Board of Directors authorized the repurchase of up to $5.0 billion of the Companys common stock, replacing the previous authorization. The authorization has no expiration date. During fiscal 2025, the Company repurchased 30.7 million shares of its common stock at a total cost, including commissions and excise taxes, of $4.3 billion, of which $2.6 billion was repurchased under the previous authorization. At September 30, 2025, there was $3.3 billion remaining on the repurchase authorization. The Board of Directors approved and the Company paid quarterly cash dividends of $0.40 per share in fiscal 2025 and $0.30 per share in fiscal 2024. Cash dividends declared and paid in fiscal 2025 totaled $494.8 million. In October 2025, the Board approved a quarterly cash dividend of $0.45 per share, payable on November 20, 2025 to stockholders of record on November 13, 2025. Forestar has an effective shelf registration statement, filed with the SEC in September 2024, registering $750 million of equity securities, of which $300 million is reserved for sales under i …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES Warranty Claims The Company typically provides its homebuyers with a ten-year limited warranty for major defects in structural elements such as framing components and foundation systems, a two-year limited warranty on major mechanical systems and a one-year limited warranty on other construction components of the home. The Companys warranty liability is based upon historical warranty cost experience in each market in which it operates. Changes in the Companys warranty liability during the three and nine months ended June 30, 2026 and 2025 were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 (In millions) Warranty liability, beginning of period $ 546.5 $ 557.3 $ 566.2 $ 566.9 Warranties issued 49.6 51.5 129.5 138.5 Changes in liability for pre-existing warranties (26.2) (13.4) (85.8) (51.4) Settlements made (19.2) (30.7) (59.2) (89.3) Warranty liability, end of period $ 550.7 $ 564.7 $ 550.7 $ 564.7 Legal Claims and Insurance The Company is named as a defendant in various claims, complaints and other legal actions in the ordinary course of business. At any point in time, the Company is managing several hundred individual claims related to construction defect matters, personal injury claims, employment matters, land development issues, contract disputes and other matters. The Company has established reserves for these contingencies based on the estimated costs of pending claims and the estimated costs of antic …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTES PAYABLE The Companys notes payable at their carrying amounts consist of the following: June 30, 2026 September 30, 2025 (In millions) Homebuilding Revolving credit facility $ 500.0 $ 1.3% senior notes due 2026 (1) 599.7 598.8 1.4% senior notes due 2027 (1) 498.9 498.2 4.85% senior notes due 2030 (1) 496.1 495.5 5.0% senior notes due 2034 (1) 688.6 687.7 5.5% senior notes due 2035 (1) 694.0 693.6 Other notes 208.0 180.6 3,685.3 3,154.4 Rental Revolving credit facility 820.0 600.0 Other notes 0.3 820.3 600.0 Forestar Revolving credit facility 5.0% senior notes due 2028 (2) 299.1 298.7 6.5% senior notes due 2033 (2) 494.7 494.2 Other notes 9.9 793.8 802.8 Financial Services Mortgage repurchase facilities: Committed facility 1,512.1 1,103.5 Uncommitted facility 301.1 304.8 1,813.2 1,408.3 Total notes payable (3) $ 7,112.6 $ 5,965.5 _____________ (1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $16.3 million and $18.9 million at June 30, 2026 and September 30, 2025, respectively. (2) Debt issuance costs that were deducted from the carrying amount of Forestars senior notes totaled $6.2 million and $7.2 million at June 30, 2026 and September 30, 2025, respectively. (3) The fair value of notes payable at June 30, 2026 totaled $7.1 billion, of which $3.8 billion were measured using Level 2 inputs and $3.3 billion were measured using Level 3 inputs. The fair value of notes payable at September 30, 2025 totaled $6.0 bill …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The Companys income tax expense for the three and nine months ended June 30, 2026 was $307.5 million and $713.5 million, respectively, compared to $325.0 million and $831.0 million in the prior year periods. The effective tax rate was 25.1% and 24.7% for the three and nine months ended June 30, 2026, respectively, compared to 23.9% and 23.5% in the prior year periods. The effective tax rates for all periods include an expense for state income taxes and tax benefits related to stock-based compensation and federal energy efficient home tax credits. At June 30, 2026, the Company had deferred tax liabilities, net of deferred tax assets, of $43.4 million, after consideration of a valuation allowance of $14.6 million recorded against certain deferred tax assets. At September 30, 2025, the Company had deferred tax assets, net of deferred tax liabilities, of $44.5 million, after consideration of a valuation allowance of $14.6 million recorded against certain deferred tax assets. The valuation allowance for both periods relates to deferred tax assets for state net operating loss (NOL) and tax credit carryforwards that are expected to expire before being realized. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to the remaining state NOL and tax credit carryforwards. Reversal of any portion of the valuation allowance in future periods would impact the Companys effective tax rate. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures. The standard became effective for the Companys annual periods beginning in fiscal 2026. The standard will impact certain of the Companys income tax disclosures but will not impact its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. The standard is effective for the Companys annual periods beginning in fiscal 2028 and interim periods beginning in the first quarter of fiscal 2029, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its disclosures. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

SEGMENT 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 126 markets across 36 states. The Companys operating segments are its homebuilding divisions, its rental operations, its majority-owned Forestar residential lot development operations, its financial services operations and its other business activities. The Companys reporting segments are its homebuilding reporting segments, its rental operations segment, its Forestar lot development segment and its financial services segment. The accounting policies of the reporting segments are described throughout Note A in the Companys annual report on Form 10-K for the fiscal year ended September 30, 2025. Homebuilding The homebuilding operating segments are aggregated into six reporting segments. The reporting segments and the states in which the Company has homebuilding operations are as follows: Northwest: Colorado, Oregon, Utah and Washington Southwest: Arizona, California, Hawaii, Nevada and New Mexico South Central: Arkansas, Oklahoma and Texas Southeast: Alabama, Florida, Louisiana and Mississippi East: Georgia, North Carolina, South Carolina and Tennessee North: Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and Wisconsin The Companys homebuilding divisions design, build and sell sing …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its wholly 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. As of June 30, 2026, the Company owned a 62% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 38% 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, 2025, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS EQUITY D.R. Horton has an automatically effective universal shelf registration statement, filed with the SEC in July 2024, registering debt and equity securities that it may issue from time to time in amounts to be determined. In April 2025, the Board of Directors authorized the repurchase of up to $5.0 billion of the Companys common stock. The authorization has no expiration date. During the nine months ended June 30, 2026, the Company repurchased 14.6 million shares of its common stock at a total cost including commissions and excise taxes of $2.2 billion. At June 30, 2026, there was $1.1 billion remaining on the repurchase authorization. During each of the first three quarters of fiscal 2026, the Board of Directors approved a quarterly cash dividend of $0.45 per share, the most recent of which was paid on May 14, 2026 to stockholders of record on May 7, 2026. Cash dividends declared and paid in the three and nine months ended June 30, 2026 totaled $127.1 million and $388.3 million, respectively. In July 2026, the Board of Directors approved a quarterly cash dividend of $0.45 per share, payable on August 13, 2026 to stockholders of record on August 6, 2026. Forestar has an effective shelf registration statement, filed with the SEC in September 2024, registering $750 million of equity securities, of which $300 million is reserved for sales under its at-the-market equity offering (ATM) program that was entered into in November 2024. During the nine months ended J …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing