D.R. Horton (DHI) 10-K risk factor changes: FY2022 vs FY2021

Adverse changes in these general and local economic conditions or deterioration in the broader economy [removed: would cause a negative] [added: may negatively] impact [removed: on] our business and financial results and increase the risk for asset impairments and [removed: writeoffs.][added: write-offs.]

[removed: Such events] [added: The federal government’s fiscal policies and the Federal Reserve’s monetary policies may negatively impact the financial markets and consumer confidence and] could hurt the U.S. economy and the housing and rental markets and in turn, could adversely affect the operating results of our businesses.

[removed: In the future, our] [added: Our] pricing and product strategies may also be limited by market conditions.

[removed: In addition,] [added: Additionally,] cancellations of home sales contracts in backlog may increase if homebuyers do not honor their contracts due to any of the factors discussed above.

[added: We may be responsible for losses] associated with mortgage loans originated and sold to third-party purchasers in the event of errors or omissions relating to certain representations and warranties that the loans sold meet certain requirements, including representations as to underwriting standards, the type of collateral, the existence of primary mortgage insurance, and the validity of certain borrower representations in the connection with the loan, and we may be required to repurchase certain of those mortgage loans or provide indemnification.

Additionally, [removed: in fiscal 2020] we [removed: began retaining] [added: may retain] mortgage servicing rights on [removed: some of] our originations.

Our homebuilding revolving credit facility also provides for the issuance of letters of credit with a sublimit equal to 100% of the [added: total] revolving credit [removed: commitment.][added: commitments.]

The maturity date of the facility is [removed: April 20,] [added: October 28,] 2026.

The Forestar revolving credit facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the [added: total] revolving credit [removed: commitment.][added: commitments.]

The maturity date of the facility is [removed: April 16, 2025.][added: October 28, 2027.]

Our mortgage subsidiary utilizes a [removed: $1.4] [added: $1.6] billion mortgage repurchase facility to finance the majority of the loans it originates.

The total capacity of the facility at September 30, [removed: 2021] [added: 2022] was [removed: $1.8] [added: $2.2] billion, and its maturity date is February [removed: 18, 2022.][added: 17, 2023.]

At September 30, [removed: 2021, $359.9] [added: 2022, $748.2] million remained available for issuance under Forestar’s shelf registration statement, of which [removed: $65.6] [added: $298.2] million was reserved for sales under its at-the-market equity offering program.

[removed: In October 2021, after the expiration of Forestar’s existing registration statement and at-the-market equity offering program, a new] [added: Forestar also has an effective] shelf registration statement [removed: became effective,] [added: filed with the SEC in October 2021,] registering $750 million of equity [removed: securities.][added: securities, of which $300 million was reserved for sales under its at-the-market equity offering program that became effective in November 2021.]

We believe that our existing cash resources, [added: together with the homebuilding, Forestar and rental] revolving credit facilities, mortgage repurchase facility and ability to access the capital markets or obtain additional financing will provide sufficient liquidity to fund our near-term working capital [added: needs and debt obligations.]

Adverse changes in economic, homebuilding or capital market conditions [removed: due to COVID-19 or otherwise] could negatively affect our business, liquidity and financial results, restrict our ability to obtain additional capital or increase our costs of capital.

During fiscal [removed: 2021,] [added: 2022,] approximately [removed: 52%] [added: 62%] of our mortgage loans were sold directly to Fannie [removed: Mae] [added: Mae, Freddie Mac] or into securities backed by Ginnie Mae, and [removed: 41%] [added: 30%] were sold to [removed: two] [added: one] other major financial [removed: entities.][added: entity.]

When interest rates increase, the cost of owning a home increases, which [removed: will likely reduce] [added: reduces] the number of potential homebuyers who can obtain mortgage financing and [removed: could] [added: can] result in a decline in the demand for our homes.

If housing demand declines, we may not be able to [removed: build,] sell [removed: and rent] homes [added: or rental properties] profitably in some of our communities, and we may not be able to fully recover the costs of some of the land and lots we own.

As a result, our deposits for lots controlled through purchase contracts may be put at risk, we may have to sell [removed: or rent homes] [added: homes, rental properties] or land for a lower profit margin or record inventory impairment charges on our land and lots.

[removed: In addition to the investment and merger with Forestar, we have acquired the homebuilding operations of several homebuilding companies in recent years, and we] [added: We] may make strategic acquisitions of or investments in other companies, operations or assets in the future.

Acquisitions and investments could also [added: raise new compliance-related obligations or] expose us to material liabilities not discovered in the due diligence process [removed: and] [added: that] may lead to litigation.

In [removed: a highly] [added: an] inflationary environment, depending on industry and other economic conditions, we may be precluded from raising home prices enough to keep up with the rate of inflation, which could reduce our profit margins.

Moreover, in [removed: a highly] [added: an] inflationary environment, our cost of capital, labor and materials can increase and the purchasing power of our cash resources can decline, which [removed: could] [added: can] have an adverse impact on our business or financial results.

[removed: These,] [added: These] or other factors [removed: that increase the risk of significant deflation,] [added: related to deflation] could have a negative impact on our business or financial results.

The effects of the pandemic [removed: combined with the improvement in economic conditions and the strong demand for new homes caused multiple disruptions in] [added: contributed to disrupting] our supply chain, [removed: and have] [added: which has] resulted in shortages [removed: in] [added: of] certain building materials and tightness in the labor [removed: market, which has caused our construction cycle to lengthen and costs of building materials to increase.][added: market.]

If shortages and cost increases in building materials and tightness in the labor market persist for a prolonged period of time, our profit margins could be adversely impacted if we are unable to [removed: pass on future] [added: offset] cost increases [removed: to our homebuyers] by increasing the selling price of our homes.

[removed: The] [added: There is uncertainty regarding the] extent to which [added: and how long] COVID-19 [removed: impacts] [added: and its variant strains will continue to impact the global economy and] our [added: supply chain, and the effect of the pandemic on our] operational and financial performance will depend on future developments, including [removed: the duration and spread of COVID-19 or other variant strains and the] [added: its] impact on our customers, trade partners and employees, all of which are highly uncertain and cannot be predicted.

If COVID-19 [removed: or other] [added: and its] variant strains [added: continue to] have a [removed: significant] negative impact on economic [removed: conditions over a prolonged period of time,] [added: conditions,] our results of operations and financial condition could be adversely impacted.

Any such events can [added: temporarily] delay our development work, home construction and home closings, unfavorably affect the cost or availability of materials or labor, damage homes under construction, lead to changing consumer preferences and/or negatively impact demand for new homes in affected areas.

[removed: There has] [added: However, there have] been no material [removed: impact] [added: lasting impacts] on our business from these events or material [added: permanent] operational challenges resulting from these events, but they could adversely affect our business in the future.

Any failure in health and safety [removed: performance, including compliance with potential new workplace requirements related to the COVID-19 pandemic,] [added: performance] may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety incident is likely to be costly and could expose us to liability that could be costly.

At September 30, [removed: 2021,] [added: 2022,] we had [removed: $2.3] [added: $2.8] billion of outstanding surety bonds.

The Tax Cuts and Jobs Act, which became effective January 1, 2018, established new limits on these federal tax [removed: deductions that could reduce the actual or perceived affordability of homeownership.][added: deductions.]

[removed: These or any further] [added: Further] changes in income tax laws by the federal or state government to eliminate or substantially reduce income tax benefits associated with [removed: homeownership,] [added: homeownership] could adversely affect demand for and sales prices of new [removed: homes, especially in areas with relatively high housing prices or high taxes.][added: homes.]

Additionally, actual or perceived [removed: environmental, social, governance] [added: ESG] and other sustainability [removed: (ESG)] matters and our response to these matters could harm our business.

These regulations govern our communications with our shareholders and the capital markets, our financial statement disclosures and our legal [added: processes, and they also impact the work required to be performed by our independent registered public accounting firm and our legal counsel.]

As of September 30, [removed: 2021,] [added: 2022,] our consolidated debt was [removed: $5.4] [added: $6.1] billion, which consisted of [removed: $3.2] [added: $2.9] billion related to our homebuilding segment, [removed: $704.5] [added: $706] million related to our Forestar [added: segment, $800 million related to our rental] segment and [removed: $1.5] [added: $1.6] billion related to our financial services segment.

The Forestar revolving credit facility and the indentures governing Forestar’s senior notes impose restrictions on the ability of Forestar and its restricted subsidiaries to incur secured and unsecured debt, but still permit Forestar and its [added: restricted] subsidiaries to incur a substantial amount of future secured and unsecured debt, and do not restrict the incurrence of future secured and unsecured debt by Forestar’s unrestricted subsidiaries.

For example, possible consequences for our homebuilding, [added: Forestar,] financial services and [removed: Forestar] [added: rental] operations each with respect to their individual debt obligations, could:

Although the risks are organized and described separately, many of the risks are interrelated.

- inflation;

During fiscal 2022, in response to increased inflation, the Federal Reserve raised interest rates significantly and has signaled it expects additional future interest rate increases.

As a result, mortgage interest rates increased significantly, and we began to see a moderation in housing demand.

Increases in mortgage interest rates reduce the affordability of our homes and can have an adverse impact on our business or financial results.

Our homebuilding revolving credit facility and our homebuilding senior notes are guaranteed by D.R. Horton, Inc.’s significant wholly-owned homebuilding subsidiaries.

The Forestar revolving credit facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, financial services or rental operations.

DRH Rental has a $1.025 billion senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1.25 billion, subject to certain conditions and availability of additional bank commitments.

Availability under the rental revolving credit facility is subject to a borrowing base calculation based on the book value of DRH Rental’s real estate assets and unrestricted cash.

At September 30, 2022, the borrowing base limited the available capacity under the facility to $811.9 million.

The rental revolving credit facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments.

The maturity date of the facility is March 4, 2026.

The rental revolving credit facility is guaranteed by DRH Rental’s wholly-owned subsidiaries that are not immaterial subsidiaries or have not been designated as unrestricted subsidiaries.

The rental revolving credit facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, Forestar or financial services operations.

The mortgage repurchase facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, Forestar or rental operations.

Mortgage interest rates have increased significantly during fiscal 2022, and market conditions and government actions could cause mortgage rates to rise even further in the future.

We have acquired the homebuilding operations of several homebuilding companies in recent years, and in May 2022, we acquired Vidler Water Resources, Inc. (Vidler) for a total purchase price of $290.5 million.

The assets acquired through the Vidler transaction consisted primarily of water rights and other water-related assets.

During fiscal 2022, we began to see a moderation in housing demand as inflationary pressures and mortgage interest rates increased.

During fiscal 2021 and 2022, we have experienced multiple disruptions in our supply chain, which have resulted in shortages of certain building materials and tightness in the labor market.

This has caused our construction cycle to lengthen and costs of building materials to increase.

The ongoing COVID-19 pandemic continues to affect the global economy.

We have experienced temporary delays in production and short-term impacts on our sales and closings activity from weather events in recent years.

The rental revolving credit facility imposes restrictions on the ability of DRH Rental and its restricted subsidiaries to incur secured and unsecured debt, but still permits DRH Rental and its restricted subsidiaries to incur a substantial amount of future secured and unsecured debt, and does not restrict the incurrence of future secured and unsecured debt by DRH Rental’s unrestricted subsidiaries.

The mortgage repurchase facility imposes restrictions on the ability of DHI Mortgage and its restricted subsidiaries to incur secured and unsecured debt, but still permits DHI Mortgage and its restricted subsidiaries to incur a substantial amount of future secured and unsecured debt, and does not restrict the incurrence of future secured and unsecured debt by DHI Mortgage’s unrestricted subsidiaries.

*Change of control default under the rental revolving credit facility*.

A change of control (as defined in the rental revolving credit facility agreement) with respect to DRH Rental would constitute an event of default under the rental revolving credit facility, which could result in the acceleration of the repayment of any borrowings outstanding under the rental revolving credit facility, a requirement to cash collateralize all letters of credit outstanding thereunder and the termination of the commitments thereunder.

If repayment of the borrowings under the rental revolving credit facility were required, we can give no assurance that DRH Rental would have sufficient funds to pay the required amounts.

*Change of control default under mortgage repurchase facility*.

A change of control (as defined in the mortgage repurchase facility) with respect to DHI Mortgage would constitute an event of default under the mortgage repurchase facility, which could result in the acceleration of the repurchase of any loans outstanding under the facility and an increase in the repurchase price of such loans.

If repayments of the loans under DHI Mortgage’s mortgage repurchase facility were required, we can give no assurance that DHI Mortgage would have sufficient funds to pay the required amounts.

Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees, customers, vendors or other users of a company’s systems to disclose sensitive information to gain access to its data, have become more prevalent in recent years.

Further, geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine, may create a heightened risk of cyber-attacks or other data security breaches.

an office setting and remote locations as needed.

We provide employee awareness training about cybersecurity threats.

In the past, the federal government’s fiscal and trade policies and economic stimulus actions have created uncertainty in the financial markets and caused volatility in interest rates, which impacted business and consumer behavior.

Monetary policy actions affecting interest rates or fiscal policy actions and new legislation related to taxation, spending levels or borrowing limits, along with the related political debates, conflicts and compromises associated with such actions, may negatively impact the financial markets and consumer confidence.

We may be responsible for losses

Forestar and its subsidiaries, our financial services and rental subsidiaries, and certain of our other subsidiaries are not guarantors under our homebuilding revolving credit facility or our homebuilding senior notes.

The Forestar revolving credit facility is not guaranteed by us or our other subsidiaries.

Forestar also had an effective shelf registration statement filed with the SEC in September 2018, registering $500 million of equity securities.

Forestar anticipates entering into a new at-the-market equity offering program under this new shelf registration statement.

needs and debt obligations.

Mortgage rates are currently low compared to most historical periods; however, market conditions could change causing mortgage rates to rise in the future.

In fiscal 2018, we acquired 75% of the outstanding shares of Forestar and at September 30, 2021, we owned 63% of its outstanding shares.

Forestar is a publicly traded residential lot development company with operations in 56 markets across 23 states as of September 30, 2021.

Forestar’s strategy is focused on making significant investments in land acquisition and development to expand its residential lot development business across a geographically diversified national platform and consolidating market share in the fragmented U.S. lot development industry.

Our homebuilding divisions acquire finished lots from Forestar in accordance with the master supply agreement between the two companies, and we provide Forestar certain administrative, compliance, operational and procurement services through a shared services agreement.

As the controlling shareholder, we strongly influence the strategic direction and operations of Forestar.

If oil prices decline significantly, economic conditions in markets that have significant exposure to the energy sector may weaken.

As restrictive orders relating to COVID-19 were eased and economic activity resumed, demand for our homes increased significantly.

In December 2019, COVID-19 emerged in the Wuhan region of China and subsequently spread worldwide.

The World Health Organization declared COVID-19 a pandemic, resulting in federal, state and local governments and private entities mandating various restrictions requiring closure of non-essential businesses for a period of time, which began to adversely affect our business in March 2020.

As economic activity resumed and restrictive orders relating to COVID-19 were eased, demand for our homes improved significantly during the remainder of fiscal 2020 and remained strong throughout fiscal 2021.

However, the effects of the pandemic combined with the improvement in economic conditions and the strong demand for new homes caused multiple disruptions in our supply chain and have resulted in shortages in certain building materials and tightness in the labor market, which has caused our construction cycle to lengthen.

There is uncertainty regarding the extent to which and how long COVID-19 will impact the U.S. economy and our supply chain.

processes, and they also impact the work required to be performed by our independent registered public accounting firm and our legal counsel.

lose customers, adversely impact our sales and revenue and require us to incur significant expense to address and remediate or otherwise resolve these kinds of issues.

This section [removed: generally] discusses the results of operations for fiscal [removed: 2021] [added: 2022] compared to [removed: 2020.][added: 2021.]

For similar operating and financial data and discussion of our fiscal [removed: 2020] [added: 2021] results compared to our fiscal [removed: 2019] [added: 2020] results, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of our annual report on Form 10-K for the fiscal year ended September 30, [removed: 2020,] [added: 2021,] which was filed with the SEC on November [removed: 20, 2020.][added: 18, 2021.]

Fiscal [removed: 2021] [added: 2022] Operating Results

In fiscal [removed: 2021,] [added: 2022,] our number of homes closed and home sales revenues increased [removed: 25%] [added: 1%] and [removed: 35%,] [added: 20%,] respectively, compared to the prior year, and our consolidated revenues increased [removed: 37%] [added: 21%] to [removed: $27.8] [added: $33.5] billion compared to [removed: $20.3] [added: $27.8] billion in the prior year.

Our pre-tax income was [removed: $5.4] [added: $7.6] billion in fiscal [removed: 2021] [added: 2022] compared to [removed: $3.0] [added: $5.4] billion in fiscal [removed: 2020,] [added: 2021,] and our pre-tax operating margin was [removed: 19.3%] [added: 22.8%] compared to [removed: 14.7%.][added: 19.3%.]

Net income was [removed: $4.2] [added: $5.9] billion in fiscal [removed: 2021] [added: 2022] compared to [removed: $2.4] [added: $4.2] billion in fiscal [removed: 2020,] [added: 2021,] and our diluted earnings per share was [removed: $11.41] [added: $16.51] compared to [removed: $6.41.][added: $11.41.]

[removed: Cash] [added: - Net cash] provided by [removed: our] homebuilding operations was [removed: $1.2] [added: $1.9] billion [removed: in fiscal 2021] compared to [removed: $1.9 billion in fiscal 2020.][added: $1.2 billion.]

In fiscal [removed: 2021,] [added: 2022,] our return on equity (ROE) was [removed: 31.6%] [added: 34.5%] compared to [removed: 22.1%] [added: 31.6%] in fiscal [removed: 2020,] [added: 2021,] and our homebuilding return on inventory (ROI) was [removed: 37.9%] [added: 42.8%] compared to [removed: 24.6%.][added: 37.9%.]

[removed: However, multiple] [added: The supply of homes at affordable price points remains limited across most of our markets, and] disruptions in the supply [removed: chain, combined with the improvement in economic conditions and strong demand] [added: chains] for [removed: new homes, have resulted in shortages in] certain building materials and tightness in the labor [removed: market, which has] [added: market have] caused our construction cycle to lengthen.

Within our homebuilding land and lot portfolio, our lots controlled through purchase contracts represent [removed: 76%] [added: 77%] of the lots owned and controlled at September 30, [removed: 2021] [added: 2022] compared to [removed: 70%] [added: 76%] at September 30, [removed: 2020.][added: 2021.]

Our relationship with Forestar and expanded relationships with other land developers across the country have allowed us to [removed: continue to] [added: significantly] increase the controlled portion of our lot [removed: pipeline.][added: pipeline over the past few years.]

Our operating strategy focuses on enhancing long-term value to our shareholders by leveraging our financial and competitive position [removed: in our core homebuilding business] to maximize the returns on our inventory investments and generate strong profitability and cash flows, while managing risk and maintaining financial flexibility to navigate changing economic [removed: conditions and make opportunistic strategic investments.][added: conditions.]

- Maintaining a [removed: strong] [added: significant] cash balance and [added: strong] overall liquidity position [removed: and] [added: while] controlling our level of debt.

- Investing in [added: lots,] land and land development in desirable markets, while controlling the level of land and lots we own in each market relative to the local new home demand.

- Opportunistically evaluating potential acquisitions to enhance our [removed: operations and improve returns.][added: operating platform.]

- [removed: Increasing our investments] [added: Investing] in the construction and leasing of single-family and multi-family rental properties to meet rental demand in high growth suburban markets and selling these properties profitably.

We believe our operating strategy, which has produced positive results in recent years, will allow us to successfully operate through changing economic conditions [removed: to maintain] and [removed: improve] [added: maintain] our [added: strong] financial [added: performance] and competitive position.

Key financial results as of and for our fiscal year ended September 30, [removed: 2021,] [added: 2022,] as compared to fiscal [removed: 2020,] [added: 2021,] were as follows:

- Homebuilding revenues increased [removed: 35%] [added: 20%] to [removed: $26.6] [added: $31.9] billion compared to [removed: $19.6] [added: $26.6] billion.

- Homes closed increased [removed: 25%] [added: 1%] to [removed: 81,965] [added: 82,744] homes, and the average closing price of those homes [removed: was $323,300.][added: increased 19% to $385,100.]

- Net sales orders [removed: increased 4%] [added: decreased 6%] to [removed: 81,378] [added: 76,137] homes, [removed: and] [added: while] the value of net sales orders increased [removed: 18%] [added: 9%] to [removed: $27.7] [added: $30.4] billion.

- Sales order backlog decreased [removed: 2%] [added: 25%] to [removed: 26,221] [added: 19,614] homes, [removed: while] [added: and] the value of sales order backlog [removed: increased] [added: decreased] 16% to [removed: $9.5] [added: $8.0] billion.

- Home sales gross margin was [removed: 25.5%] [added: 28.7%] compared to [removed: 21.8%.][added: 25.5%.]

- Homebuilding SG&A expense was [removed: 7.3%] [added: 6.8%] of homebuilding revenues compared to [removed: 8.1%.][added: 7.3%.]

- Homebuilding pre-tax income was [removed: $4.8] [added: $6.9] billion compared to [removed: $2.7] [added: $4.8] billion.

- Homebuilding pre-tax income was [removed: 18.1%] [added: 21.7%] of homebuilding revenues compared to [removed: 13.6%.][added: 18.1%.]

- Homebuilding return on inventory was [removed: 37.9%] [added: 42.8%] compared to [removed: 24.6%.][added: 37.9%.]

[removed: - Net] [added: Consolidated net] cash provided by [added: operating activities was $561.8 million in fiscal 2022 and $534.4 million in fiscal 2021, and cash provided by our] homebuilding operations was [removed: $1.2] [added: $1.9] billion [added: in fiscal 2022] compared to [removed: $1.9 billion.][added: $1.2 billion in fiscal 2021.]

- Homebuilding cash and cash equivalents totaled [removed: $3.0] [added: $2.0] billion compared to [removed: $2.6] [added: $3.0] billion.

- Homebuilding inventories totaled [removed: $13.9] [added: $17.3] billion compared to [removed: $11.0] [added: $13.9] billion.

- Homes in inventory totaled [removed: 47,800] [added: 46,400] compared to [removed: 38,000.][added: 47,800.]

- Owned lots totaled [removed: 127,800] [added: 131,100] compared to [removed: 112,600,] [added: 127,800,] and lots controlled through purchase contracts increased to [removed: 402,500] [added: 442,100] from [removed: 264,300.][added: 402,500.]

- Homebuilding debt was [removed: $3.2] [added: $2.9] billion compared to [removed: $2.5] [added: $3.2] billion.

- Homebuilding debt to total capital was [removed: 17.8%] [added: 13.2%] compared to [removed: 17.5%,] [added: 17.8%,] and net homebuilding debt to total capital was [removed: 1.7%] [added: 4.4%] compared to [removed: (0.3)%.][added: 1.7%.]

- Forestar’s revenues increased [removed: 42%] [added: 15%] to [removed: $1.3] [added: $1.5] billion compared to [removed: $931.8 million.][added: $1.3 billion.]

Revenues in [added: both] fiscal [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] included $1.2 billion [removed: and $887.4 million, respectively,] of revenue from land and lot sales to our homebuilding segment.

- Forestar’s lots sold increased [removed: 53%] [added: 11%] to [removed: 15,915] [added: 17,691] compared to [removed: 10,373.][added: 15,915.]

Lots sold to D.R. Horton totaled [removed: 14,839] [added: 14,895] compared to [removed: 10,164.][added: 14,839.]

- Forestar’s pre-tax income was [removed: $146.6 million, which included an $18.1] [added: $235.8] million [removed: loss on extinguishment of debt,] compared to [removed: $78.1] [added: $146.6] million.

- Forestar’s pre-tax income was [removed: 11.1%] [added: 15.5%] of [removed: Forestar] revenues compared to [removed: 8.4%.][added: 11.1%.]

In June 2022, we began to see a moderation in housing demand that persisted through the end of our fiscal year as mortgage interest rates increased substantially and inflationary pressures remained elevated.

Although these pressures may persist for some time, we believe we are well-positioned to meet these changing market conditions with our affordable product offerings and lot supply, and we will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand.

Rental:

- Rental revenues were $510.2 million compared to $267.8 million.

- Rental pre-tax income was $202.0 million compared to $86.5 million.

- Rental inventory totaled $2.6 billion compared to $840.9 million.

- Multi-family rental units closed totaled 775 compared to 959.

- Single-family rental homes closed totaled 774 compared to 257.

- Consolidated revenues increased 21% to $33.5 billion compared to $27.8 billion.

Our operating segments are our 78 homebuilding divisions, our majority-owned Forestar residential lot development operations, our financial services operations, our rental operations and our other business activities.

The homebuilding operating segments are aggregated into six reporting segments.

These reporting segments, which we also refer to as reporting regions, have homebuilding operations located in the following states:

The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the fiscal years ended September 30, 2022 and 2021.

| | | | | | | Net Homes Sold | | | | | | | | | | | | | | | | | | Value (In millions) | | | | | | | | | | | | | | | | | | Average Selling Price | | | | | | | | | | | | | | |

| Northwest | | | | | | 4,509 | | | | | | 4,530 | | | | | | — | | % | | | | $ | 2,566.5 | | | | | $ | 2,320.2 | | | | | 11 | | % | | | | $ | 569,200 | | | | | $ | 512,200 | | | | | 11 | | % |

| Southwest | | | | | | 8,111 | | | | | | 9,456 | | | | | | (14) | | % | | | | 4,235.5 | | | | | | 4,179.3 | | | | | | 1 | | % | | | | 522,200 | | | | | | 442,000 | | | | | | 18 | | % |

| South Central | | | | | | 21,417 | | | | | | 23,631 | | | | | | (9) | | % | | | | 7,409.8 | | | | | | 6,992.9 | | | | | | 6 | | % | | | | 346,000 | | | | | | 295,900 | | | | | | 17 | | % |

| Southeast | | | | | | 21,649 | | | | | | 24,239 | | | | | | (11) | | % | | | | 8,193.6 | | | | | | 7,632.1 | | | | | | 7 | | % | | | | 378,500 | | | | | | 314,900 | | | | | | 20 | | % |

| East | | | | | | 13,479 | | | | | | 14,038 | | | | | | (4) | | % | | | | 5,059.7 | | | | | | 4,496.9 | | | | | | 13 | | % | | | | 375,400 | | | | | | 320,300 | | | | | | 17 | | % |

| North | | | | | | 6,972 | | | | | | 5,484 | | | | | | 27 | | % | | | | 2,908.5 | | | | | | 2,126.8 | | | | | | 37 | | % | | | | 417,200 | | | | | | 387,800 | | | | | | 8 | | % |

| | | | | | | 76,137 | | | | | | 81,378 | | | | | | (6) | | % | | | | $ | 30,373.6 | | | | | $ | 27,748.2 | | | | | 9 | | % | | | | $ | 398,900 | | | | | $ | 341,000 | | | | | 17 | | % |

._____________

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | |

| Northwest | | | | | | 845 | | | | | | 583 | | | | | | $ | 468.2 | | | | | $ | 294.2 | | | | | 16 | | % | | | | 11 | | % |

| Southwest | | | | | | 2,485 | | | | | | 1,497 | | | | | | 1,190.8 | | | | | | 598.0 | | | | | | 23 | | % | | | | 14 | | % |

| Southeast | | | | | | 5,612 | | | | | | 5,356 | | | | | | 2,006.3 | | | | | | 1,585.1 | | | | | | 21 | | % | | | | 18 | | % |

| East | | | | | | 2,913 | | | | | | 3,136 | | | | | | 1,055.5 | | | | | | 947.6 | | | | | | 18 | | % | | | | 18 | | % |

| North | | | | | | 1,384 | | | | | | 986 | | | | | | 564.2 | | | | | | 354.6 | | | | | | 17 | | % | | | | 15 | | % |

| | | | | | | 20,105 | | | | | | 16,859 | | | | | | $ | 7,628.8 | | | | | $ | 5,289.7 | | | | | 21 | | % | | | | 17 | | % |

During the first half of fiscal 2022 and for most of the third quarter, demand for our homes remained strong.

We restricted our sales order pace during the year in most of our communities to match our longer construction cycles, which have resulted from disruptions in the supply chains for certain building materials and tightness in the labor market.

In June 2022, we began to see a moderation in housing demand that persisted through the end of our fiscal year as mortgage interest rates increased substantially and inflationary pressures remained elevated.

Our net sales order volume decreased 15% in the fourth quarter of fiscal 2022 compared to the prior year quarter, and the average selling price of net sales orders declined by 4% sequentially in the fourth quarter compared to the third quarter.

Although these pressures may persist for some time, we believe we are well-positioned to meet these changing market conditions with our affordable product offerings.

In regions with a decrease in sales order volume, the markets contributing most to the decreases were: the Arizona and California markets in the Southwest; the Austin market in the South Central; the Louisiana markets in the Southeast; and the Atlanta market in the East.

In the North region, the markets contributing most to the increase in sales order volume were the Chicago, Indianapolis, New Jersey and Iowa markets.

The increase in the cancellation rate primarily reflects the moderation in demand we experienced beginning in June 2022 as mortgage rates increased substantially and inflationary pressures remained elevated throughout the remainder of the year.

Our cancellation rate in the fourth quarter of fiscal 2022 was 32%, up sequentially from 24% in the third quarter.

During March 2020, the impacts of the COVID-19 pandemic and the related widespread reductions in economic activity across the United States began to adversely affect our business.

As economic activity resumed and restrictive orders relating to COVID-19 were eased, demand for our homes improved significantly during the remainder of fiscal 2020 and remained strong throughout fiscal 2021.

We believe the increase in demand has been fueled by historically low interest rates on mortgage loans and the limited supply of homes at affordable price points across most of our markets.

We are well-positioned for increased demand with our affordable product offerings, lot supply and housing inventory.

We have slowed our home sales pace to more closely align with our production levels, and we are selling homes later in the construction cycle when we have more certainty regarding the home close date for our homebuyers.

Based on the current availability of labor and materials, the stage of completion of our current homes in inventory, production schedules and capacity, we expect to continue restricting the pace of our sales orders in many of our communities in the near term to match our production levels.

- Debt to total capital was 26.7% compared to 26.6%, and net debt to total capital was 12.9% compared to 9.7%.

Due to the change in aggregation of our homebuilding operating segments into six new reportable segments during fiscal 2021, the following tables and related discussion of our homebuilding results include comparative information for the fiscal years ended September 30, 2021, 2020 and 2019.

Based on the new aggregation, our six reporting segments and the states in which we have homebuilding operations are as follows:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | 2021 vs 2020 | | | | | | 2020 vs 2019 | | |

| Northwest | | | | | | 4,530 | | | | | | 5,308 | | | | | | 3,919 | | | | | | (15) | | % | | | | 35 | | % |

| Southwest | | | | | | 9,456 | | | | | | 10,214 | | | | | | 7,382 | | | | | | (7) | | % | | | | 38 | | % |

| South Central | | | | | | 23,631 | | | | | | 21,511 | | | | | | 14,942 | | | | | | 10 | | % | | | | 44 | | % |

| Southeast | | | | | | 24,239 | | | | | | 21,103 | | | | | | 15,640 | | | | | | 15 | | % | | | | 35 | | % |

| East | | | | | | 14,038 | | | | | | 14,480 | | | | | | 11,011 | | | | | | (3) | | % | | | | 32 | | % |

| North | | | | | | 5,484 | | | | | | 5,842 | | | | | | 3,671 | | | | | | (6) | | % | | | | 59 | | % |

| | | | | | | 81,378 | | | | | | 78,458 | | | | | | 56,565 | | | | | | 4 | | % | | | | 39 | | % |

| Northwest | | | | | | $ | 2,320.2 | | | | | $ | 2,342.3 | | | | | $ | 1,737.4 | | | | | (1) | | % | | | | 35 | | % |

| Southwest | | | | | | 4,179.3 | | | | | | 3,838.8 | | | | | | 2,909.8 | | | | | | 9 | | % | | | | 32 | | % |

| South Central | | | | | | 6,992.9 | | | | | | 5,555.2 | | | | | | 3,821.5 | | | | | | 26 | | % | | | | 45 | | % |

| Southeast | | | | | | 7,632.1 | | | | | | 5,781.2 | | | | | | 4,122.0 | | | | | | 32 | | % | | | | 40 | | % |

| East | | | | | | 4,496.9 | | | | | | 4,086.3 | | | | | | 3,034.1 | | | | | | 10 | | % | | | | 35 | | % |

| North | | | | | | 2,126.8 | | | | | | 2,002.5 | | | | | | 1,218.6 | | | | | | 6 | | % | | | | 64 | | % |

| | | | | | | $ | 27,748.2 | | | | | $ | 23,606.3 | | | | | $ | 16,843.4 | | | | | 18 | | % | | | | 40 | | % |

| Northwest | | | | | | $ | 512,200 | | | | | $ | 441,300 | | | | | $ | 443,300 | | | | | 16 | | % | | | | — | | % |

| Southwest | | | | | | 442,000 | | | | | | 375,800 | | | | | | 394,200 | | | | | | 18 | | % | | | | (5) | | % |

| South Central | | | | | | 295,900 | | | | | | 258,200 | | | | | | 255,800 | | | | | | 15 | | % | | | | 1 | | % |

| Southeast | | | | | | 314,900 | | | | | | 274,000 | | | | | | 263,600 | | | | | | 15 | | % | | | | 4 | | % |

| East | | | | | | 320,300 | | | | | | 282,200 | | | | | | 275,600 | | | | | | 14 | | % | | | | 2 | | % |

| North | | | | | | 387,800 | | | | | | 342,800 | | | | | | 332,000 | | | | | | 13 | | % | | | | 3 | | % |

| | | | | | | $ | 341,000 | | | | | $ | 300,900 | | | | | $ | 297,800 | | | | | 13 | | % | | | | 1 | | % |

_____________

| | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

| Northwest | | | | | | 583 | | | | | | 760 | | | | | | 540 | | | | | | $ | 294.2 | | | | | $ | 334.1 | | | | | $ | 228.5 | | | | | 11 | | % | | | | 13 | | % | | | | 12 | | % |

| Southwest | | | | | | 1,497 | | | | | | 1,994 | | | | | | 1,889 | | | | | | 598.0 | | | | | | 739.1 | | | | | | 697.5 | | | | | | 14 | | % | | | | 16 | | % | | | | 20 | | % |

| Southeast | | | | | | 5,356 | | | | | | 5,882 | | | | | | 4,323 | | | | | | 1,585.1 | | | | | | 1,604.1 | | | | | | 1,128.1 | | | | | | 18 | | % | | | | 22 | | % | | | | 22 | | % |

| East | | | | | | 3,136 | | | | | | 3,948 | | | | | | 3,488 | | | | | | 947.6 | | | | | | 1,073.4 | | | | | | 937.4 | | | | | | 18 | | % | | | | 21 | | % | | | | 24 | | % |

| North | | | | | | 986 | | | | | | 1,150 | | | | | | 864 | | | | | | 354.6 | | | | | | 365.0 | | | | | | 279.4 | | | | | | 15 | | % | | | | 16 | | % | | | | 19 | | % |

The net fair value change, which for the years ended September 30, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] was not significant, is recognized in current earnings.

At September 30, [removed: 2021,] [added: 2022,] hedging instruments used to mitigate interest rate risk related to uncommitted mortgage loans held for sale and uncommitted IRLCs totaled a notional amount of [removed: $2.7] [added: $5.4] billion.

Uncommitted IRLCs totaled a notional amount of approximately [removed: $1.4] [added: $4.0] billion and uncommitted mortgage loans held for sale totaled a notional amount of approximately [removed: $1.3] [added: $1.6] billion at September 30, [removed: 2021.][added: 2022.]

At September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we had MBS totaling [removed: $834.6] [added: $532.4] million and [removed: $1.1 billion,] [added: $834.6 million,] respectively, that did not yet have IRLCs or closed loans created or assigned and recorded an asset of [removed: $1.1] [added: $4.8] million [removed: at September 30, 2021] and [removed: a liability of $5.3 million at September 30, 2020] [added: $1.1 million, respectively,] for the fair value of such MBS position.

The following table sets forth principal cash flows by scheduled maturity, effective weighted average interest rates and estimated fair value of our debt obligations as of September 30, [removed: 2021.][added: 2022.]

The interest rate for our variable rate debt represents the weighted average interest rate in effect at September 30, [removed: 2021.][added: 2022.]

| | | | | | | Fiscal Year Ending September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value at September 30, [removed: 2021] [added: 2022] | | |

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | Thereafter | | | | | | Total | | | | | | | | |

| Average interest rate | | | | | | [removed: 2.1] [added: 4.6] | | % | | | | — | | % | | | | — | | % | | | | [removed: —] [added: 4.8] | | % | | | | — | | % | | | | — | | % | | | | [removed: 2.1] [added: 4.7] | | % | | | | | | |

| Fixed rate | | | | | | $ | 855.1 | | | | | $ | 12.9 | | | | | $ | 500.4 | | | | | $ | 900.4 | | | | | $ | 600.4 | | | | | $ | 800.0 | | | | | $ | 3,669.2 | | | | | $ | 3,291.0 | |

| Average interest rate | | | | | | 5.2 | | % | | | | 4.0 | | % | | | | 2.7 | | % | | | | 3.4 | | % | | | | 1.5 | | % | | | | 3.0 | | % | | | | 3.3 | | % | | | | | | |

| Variable rate | | | | | | $ | 1,618.3 | | | | | $ | — | | | | | $ | — | | | | | $ | 800.0 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,418.3 | | | | | $ | 2,418.3 | |

| Fixed rate | | | | | | $ | 429.5 | | | | | $ | 700.3 | | | | | $ | 13.7 | | | | | $ | 500.4 | | | | | $ | 900.4 | | | | | $ | 1,400.4 | | | | | $ | 3,944.7 | | | | | $ | 4,045.6 | |

| Average interest rate | | | | | | 4.2 | | % | | | | 5.4 | | % | | | | 3.7 | | % | | | | 2.7 | | % | | | | 3.4 | | % | | | | 2.3 | | % | | | | 3.4 | | % | | | | | | |

| Variable rate | | | | | | $ | 1,494.6 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,494.6 | | | | | $ | 1,494.6 | |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of D.R. Horton, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of D.R. Horton, Inc. and subsidiaries (the Company) as of September 30, 2021 and 2020, and the related consolidated statements of operations, total equity, and cash flows for each of the three years in the period ended September 30, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2021 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 18, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Estimation of reserves for construction defect matters | | | | | |

| *Description of the Matter* | | | At September 30, 2021, the Company’s reserve for legal claims related to construction defect matters was $575.1 million. As explained in Note L to the consolidated financial statements, the Company has established reserves for construction defect matters based on the estimated costs of pending legal claims and the estimated costs of anticipated future legal claims related to previously closed homes, and this liability is included within the accrued expenses and other liabilities account in the consolidated balance sheet. This reserve estimate is subject to a high degree of variability and ongoing revision as the circumstances of individual pending claims and historical data and trends change. Management applies judgment in determining the key assumptions used in calculating the reserve for construction defect matters. Auditing the reserve for construction defect matters is complex and especially challenging due to the judgmental nature of the key assumptions related to projections of the frequency of future claims and the costs to resolve claims in consideration of historical claims information. These assumptions are developed by management, are subjective in nature and have a significant effect on the determined amount of the reserve for construction defect matters. Further, the estimated reserve balance is sensitive to changes in these key assumptions. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for estimating the reserve for construction defect matters. We tested the Company’s controls that address the risk of material misstatement related to the measurement and valuation of the reserve for construction defect matters, including the key assumptions related to the projections of the frequency and costs of future claims, and the completeness and accuracy of data used in the model developed by management. To test the reserve for construction defect matters, our audit procedures included, among others, evaluating the methodology used, the key assumptions and the underlying data used by the Company in developing the reserve estimate. As management utilizes historical trends of frequency of claims incurred and the average cost to resolve claims relative to the types of products and markets where the Company operates in measuring the reserve estimate, we evaluated management’s methodology for determining the frequency and cost of future claims assumptions by comparing these key assumptions to trends observed in historical Company claims data and other available information. In addition, we involved an actuarial specialist to assist with our procedures. Our specialist developed a range of values for the reserve estimate based on independently selected assumptions, which we compared to management’s recorded amount to evaluate management’s estimate. We also performed sensitivity analyses to determine the effect of changes in assumptions, where appropriate. We also tested completeness and accuracy of underlying claims data used in management’s estimation calculations and performed recalculations to evaluate the accuracy of the model used by management to determine the estimate. | | |

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Dallas, Texas

November 18, 2021

Opinion on Internal Control Over Financial Reporting

We have audited D.R Horton, Inc. and subsidiaries’ internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, D.R. Horton, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2021 and 2020, the related consolidated statements of operations, total equity, and cash flows for each of the three years in the period ended September 30, 2021, and the related notes and our report dated November 18, 2021 expressed an unqualified opinion thereon.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We construct and sell homes through our operating divisions in [removed: 98] [added: 106] markets across [removed: 31] [added: 33] states, primarily under the names of D.R. Horton, *America’s Builder*, Emerald Homes, Express Homes and Freedom Homes.

Our homes [added: generally] range in size from 1,000 to more than 4,000 square feet and in price from [removed: $150,000] [added: $200,000] to more than $1,000,000.

For the year ended September 30, [removed: 2021, we] [added: 2022, our homebuilding operations] closed [removed: 81,965] [added: 82,744] homes with an average closing price of [removed: $323,300.][added: $385,100.]

Our homebuilding operations are our core business, generating [removed: 96%] [added: 95%] of our consolidated revenues of [added: $33.5 billion in fiscal 2022, 96% of consolidated revenues of] $27.8 billion in fiscal 2021 and 97% of consolidated revenues of $20.3 billion [removed: and $17.6 billion] in fiscal [removed: 2020 and 2019, respectively.][added: 2020.]

Approximately [removed: 90%] [added: 91%] of our home sales revenue in fiscal [removed: 2021] [added: 2022] was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.

At September 30, [removed: 2021,] [added: 2022,] we owned 63% of Forestar’s outstanding common stock.

DHI Mortgage, our [removed: 100% owned] [added: wholly-owned] subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party [removed: purchasers.][added: purchasers after origination.]

Our [removed: 100% owned] [added: wholly-owned] subsidiary title companies serve as title insurance agents by providing title insurance policies, [removed: examination] [added: examination, underwriting] and closing services, primarily to our homebuyers.

The multi-family rental operations develop, construct, [removed: lease, own] [added: lease] and [removed: ultimately] sell [removed: the] residential [added: rental] properties.

The single-family rental operations [added: primarily] construct [added: and lease] single-family [removed: rental] homes [removed: with the intent to later] [added: within a community and then] market [removed: the] [added: each] community for a bulk sale of [added: rental] homes.

We conduct insurance-related operations, own [added: water rights and other water-related assets, own] non-residential real estate including ranch land and improvements and own and operate [removed: energy related] [added: energy-related] assets.

Our homebuilding business operates in [removed: 98] [added: 106] markets across [removed: 31] [added: 33] states, which provides us with geographic diversification in our homebuilding inventory investments and our sources of revenues and earnings.

We conduct our homebuilding operations in the geographic regions, states and markets listed [removed: below, and we conduct our financial services operations in many of these markets.][added: below.]

| | | | | | | [removed: Northwest] [added: South Central] Region | | | | | | | | | | | | [removed: South Central Region] [added: Knoxville] | | |

| [removed: Colorado] [added: Oklahoma] | | | | | | [removed: Colorado Springs] [added: Oklahoma City] | | | | | | [removed: Oklahoma] | | | | | | [removed: Oklahoma City] [added: Nashville] | | |

| | | | | | | [removed: Denver] [added: Tulsa] | | | | | | | | | | | | [removed: Tulsa] | | |

| | | | | | | [removed: Portland/Salem] [added: Bryan/College Station] | | | | | | | | | | | | [removed: Bryan/College Station] [added: Northern Delaware] | | |

| Utah | | | | | | Salt Lake City | | | | | | | | | | | | [removed: Corpus Christi] [added: Volusia County] | | |

| [removed: Washington] | | | | | | Seattle/Tacoma/Everett/Olympia | | | | | | | | | | | | [removed: Fort Worth] [added: Lake Charles/Lafayette] | | |

| | | | | | | [removed: Vancouver] [added: Killeen/Temple/Waco] | | | | | | [added: Iowa] | | | | | | [removed: Killeen/Temple/Waco] [added: Des Moines] | | |

| | | | | | | [added: Midland/Odessa] | | | | | | [added: Kentucky] | | | | | | [removed: Midland/Odessa] [added: Louisville] | | |

| | | | | | | [removed: Southwest Region] [added: New Braunfels/San Marcos] | | | | | | [added: Maryland] | | | | | | [removed: New Braunfels/San Marcos] [added: Baltimore] | | |

| Arizona | | | | | | Phoenix | | | | | | | | | | | | [removed: San Antonio] [added: Augusta] | | |

| [removed: California] | | | | | | [removed: Bakersfield] | | | | | | | | | | | | East Region | | |

| | | | | | | Los Angeles County | | | | | | | | | | | | [removed: Savannah] [added: Greensboro/Winston-Salem] | | |

| | | | | | | Riverside County | | | | | | | | | | | | [removed: Charlotte] [added: Raleigh/Durham] | | |

| Nevada | | | | | | Las Vegas | | | | | | | | | | | | [removed: Columbia] [added: Greenville/Spartanburg] | | |

| New Mexico | | | | | | Albuquerque | | | | | | | | | | | | [removed: Hilton Head] [added: Myrtle Beach] | | |

| | | | | | | [removed: Southeast Region] | | | | | | Tennessee | | | | | | Chattanooga | | |

| Alabama | | | | | | Birmingham | | | | | | [added: Nebraska] | | | | | | [removed: Knoxville] [added: Omaha] | | |

| | | | | | | Mobile/Baldwin County | | | | | | | | | | | | [removed: Nashville] [added: Southern New Jersey] | | |

| [added: Texas] | | | | | | [removed: Tuscaloosa] [added: Austin] | | | | | | | | | | | | North Region | | |

| Florida | | | | | | Fort Myers/Naples | | | | | | [removed: Delaware] [added: Pennsylvania] | | | | | | Central [removed: Delaware] [added: Pennsylvania] | | |

| | | | | | | [removed: Jacksonville] [added: Corpus Christi] | | | | | | Illinois | | | | | | Chicago | | |

| | | | | | | [removed: Lakeland] [added: Dallas] | | | | | | Indiana | | | | | | Fort Wayne | | |

| | | | | | | Melbourne/Vero Beach | | | | | | | | | | | | [removed: Indianapolis] [added: Virginia Beach/Williamsburg] | | |

| | | | | | | [removed: Pensacola/Panama City] [added: Fort Collins] | | | | | | [removed: Maryland] | | | | | | [removed: Baltimore] [added: Pensacola/Panama City] | | |

| | | | | | | [removed: Tallahassee] | | | | | | | | | | | | Western Maryland | | |

| | | | | | | [removed: Tampa/Sarasota] [added: Southeast Region] | | | | | | Minnesota | | | | | | Minneapolis/St. Paul | | |

| | | | | | | [removed: West Palm Beach] [added: Huntsville] | | | | | | New Jersey | | | | | | Northern New Jersey | | |

| | | | | | | Northwest Region | | | | | | | | | | | | Southeast Region (Continued) | | |

| Colorado | | | | | | Colorado Springs | | | | | | Florida | | | | | | Ocala | | |

| | | | | | | Denver | | | | | | | | | | | | Orlando | | |

| Oregon | | | | | | Bend | | | | | | | | | | | | Port St. Lucie | | |

| | | | | | | Eugene/Springfield | | | | | | | | | | | | Tallahassee | | |

| | | | | | | Portland/Salem | | | | | | | | | | | | Tampa/Sarasota | | |

| | | | | | | St. George | | | | | | | | | | | | West Palm Beach | | |

| Washington | | | | | | Central Washington | | | | | | Louisiana | | | | | | Baton Rouge | | |

| | | | | | | Vancouver | | | | | | | | | | | | | | |

| | | | | | | Southwest Region | | | | | | Georgia | | | | | | Atlanta | | |

| | | | | | | Tucson | | | | | | | | | | | | Central Georgia | | |

| California | | | | | | Bakersfield | | | | | | | | | | | | Savannah | | |

| | | | | | | Bay Area | | | | | | North Carolina | | | | | | Asheville | | |

| | | | | | | Fresno/Tulare | | | | | | | | | | | | Charlotte | | |

| | | | | | | Modesto/Merced/Stockton | | | | | | | | | | | | New Bern/Greenville | | |

| | | | | | | Sacramento | | | | | | | | | | | | Wilmington | | |

| | | | | | | San Bernardino County | | | | | | South Carolina | | | | | | Charleston | | |

| Hawaii | | | | | | Oahu | | | | | | | | | | | | Columbia | | |

| | | | | | | Reno | | | | | | | | | | | | Hilton Head | | |

| Arkansas | | | | | | Northwest Arkansas | | | | | | | | | | | | Memphis | | |

| | | | | | | Beaumont | | | | | | Delaware | | | | | | Central Delaware | | |

| | | | | | | Fort Worth | | | | | | | | | | | | Indianapolis | | |

| | | | | | | Houston | | | | | | | | | | | | Northwest Indiana | | |

| | | | | | | Lubbock | | | | | | | | | | | | Iowa City/Cedar Rapids | | |

| | | | | | | San Antonio | | | | | | | | | | | | Suburban Washington, D.C. | | |

| | | | | | | Montgomery | | | | | | Ohio | | | | | | Cincinnati | | |

| | | | | | | Tuscaloosa | | | | | | | | | | | | Columbus | | |

| | | | | | | Lakeland | | | | | | | | | | | | Richmond | | |

| | | | | | | Miami/Fort Lauderdale | | | | | | West Virginia | | | | | | Eastern West Virginia | | |

Continuing supply chain delays and disruptions during fiscal 2022 lengthened our construction cycle time further.

We sold 775 multi-family rental units in fiscal 2022 compared to 959 units in fiscal 2021.

We sold 774 single-family rental homes in fiscal 2022 compared to 257 homes in fiscal 2021.

We have an active recruiting team that partners with college campuses and external organizations to identify strong new hires and experienced professionals.

Our paid internship program provides college students and recent graduates an opportunity to work alongside some of the most experienced professionals in the homebuilding industry.

During fiscal 2022, we held specialized trainings for employees within key business functions of our homebuilding operations, such as purchasing, construction and sales, and we held our inaugural Leadership Development Program, which provides internal training for up and coming leaders within our homebuilding operations.

Additionally, during the fiscal year, 25 employees were placed into a new homebuilding market leadership position, and of those 100% were promoted from within the organization.

Our Board of Directors is actively involved in the Company’s executive leadership succession planning and is equally committed to our culture of promoting rising talent from within.

A substantial portion of our executive and senior operating leadership’s total compensation is variable, at-risk pay based on the Company’s performance.

The Company is committed to supporting its employees in their health, wellness and financial planning goals.

Additional benefits offered include a 401(k) savings plan, employee stock purchase plan and access to professional resources to support employees with their mental and physical health, financial planning, identity theft protection and legal needs.

Our product offerings across our operating markets are broad and diverse.

Our entry-level homes at affordable price points have experienced very strong demand from homebuyers, as the entry-level segment of the new home market remains under-served, with low inventory levels relative to demand.

DHI Mortgage originates loans in accordance with purchaser guidelines and sells substantially all of its mortgage production after origination.

During the fourth quarter of fiscal 2021, we reassessed our operating segments and reportable segments and realigned the aggregation of our homebuilding operating segments into six new reportable segments to better allocate our homebuilding operating segments across geographic reporting regions.

| | | | | | | Fort Collins | | | | | | Texas | | | | | | Austin | | |

| Oregon | | | | | | Bend | | | | | | | | | | | | Beaumont | | |

| | | | | | | St. George | | | | | | | | | | | | Dallas | | |

| | | | | | | Spokane | | | | | | | | | | | | Houston | | |

| | | | | | | Tucson | | | | | | | | | | | | | | |

| | | | | | | Bay Area | | | | | | Georgia | | | | | | Atlanta | | |

| | | | | | | Fresno | | | | | | | | | | | | Augusta | | |

| | | | | | | Modesto/Merced/Stockton | | | | | | North Carolina | | | | | | Asheville | | |

| | | | | | | Sacramento | | | | | | | | | | | | Greensboro/Winston-Salem | | |

| | | | | | | San Bernardino County | | | | | | | | | | | | Raleigh/Durham | | |

| | | | | | | San Diego County | | | | | | | | | | | | Wilmington | | |

| Hawaii | | | | | | Oahu | | | | | | South Carolina | | | | | | Charleston | | |

| | | | | | | Reno | | | | | | | | | | | | Greenville/Spartanburg | | |

| | | | | | | | | | | | | | | | | | | Myrtle Beach | | |

| | | | | | | Huntsville | | | | | | | | | | | | Memphis | | |

| | | | | | | Montgomery | | | | | | | | | | | | | | |

| | | | | | | Gainesville | | | | | | | | | | | | Northern Delaware | | |

| | | | | | | Miami/Fort Lauderdale | | | | | | | | | | | | Northwest Indiana | | |

| | | | | | | Ocala | | | | | | Iowa | | | | | | Des Moines | | |

| | | | | | | Orlando | | | | | | Kentucky | | | | | | Louisville | | |

| | | | | | | Port St. Lucie | | | | | | | | | | | | Suburban Washington, D.C. | | |

| | | | | | | Volusia County | | | | | | Nebraska | | | | | | Omaha | | |

| Louisiana | | | | | | Baton Rouge | | | | | | | | | | | | Southern New Jersey | | |

| | | | | | | Lake Charles/Lafayette | | | | | | Ohio | | | | | | Cincinnati | | |

| | | | | | | | | | | | | Pennsylvania | | | | | | Central Pennsylvania | | |

| | | | | | | | | | | | | | | | | | | Southern Virginia | | |

The percentage of home closings and home sales revenue contributed by each brand during fiscal 2021 was as follows:

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Percentage of Home Closings | | | | | | | | | Percentage of Home Sales Revenue | | | | | |

| D.R. Horton | | | 65 | | % | | | | | | | 68 | | % | | | |

| Emerald | | | 1 | | % | | | | | | | 2 | | % | | | |

| Express | | | 31 | | % | | | | | | | 27 | | % | | | |

| Freedom | | | 3 | | % | | | | | | | 3 | | % | | | |

| Total | | | 100 | | % | | | | | | | 100 | | % | | | |

We also use names of acquired companies for a period of time after the acquisition.

For the Fiscal Year Ended September 30, [removed: 2021][added: 2022]

[removed: ][added: ]

As of March 31, [removed: 2021,] [added: 2022,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately [removed: $32.0] [added: $26.1] billion based on the closing price as reported on the New York Stock Exchange.

As of November [removed: 11, 2021,] [added: 10, 2022,] there were [removed: 356,529,507] [added: 344,341,227] shares of the registrant’s common stock outstanding.

Portions of the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders are incorporated herein by reference (to the extent indicated) in Part III.

[removed: 2021] [added: 2022] ANNUAL REPORT ON FORM 10-K

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| [ITEM [removed: 16.](#i8300e37934874469bb7650f2efbd8dd1_205)] [added: 16.](#i487a4a0ac4ad49c6998b5471f4719718_196)] | | | [10-K [removed: Summary](#i8300e37934874469bb7650f2efbd8dd1_205)] [added: Summary](#i487a4a0ac4ad49c6998b5471f4719718_196)] | | | [removed: [115](#i8300e37934874469bb7650f2efbd8dd1_205)] [added: [115](#i487a4a0ac4ad49c6998b5471f4719718_196)] | | |

| [PART I](#i487a4a0ac4ad49c6998b5471f4719718_13) | | | | | | | | |

| [PART II](#i487a4a0ac4ad49c6998b5471f4719718_34) | | | | | | | | |

| [ITEM 9C.](#i487a4a0ac4ad49c6998b5471f4719718_2138) | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i487a4a0ac4ad49c6998b5471f4719718_2138) | | | [106](#i487a4a0ac4ad49c6998b5471f4719718_2138) | | |

| [PART III](#i487a4a0ac4ad49c6998b5471f4719718_172) | | | | | | | | |

| [PART IV](#i487a4a0ac4ad49c6998b5471f4719718_190) | | | | | | | | |

| [SIGNATURES](#i487a4a0ac4ad49c6998b5471f4719718_199) | | | | | | [116](#i487a4a0ac4ad49c6998b5471f4719718_199) | | |

| [PART I](#i8300e37934874469bb7650f2efbd8dd1_13) | | | | | | | | |

| [PART II](#i8300e37934874469bb7650f2efbd8dd1_34) | | | | | | | | |

| [PART III](#i8300e37934874469bb7650f2efbd8dd1_181) | | | | | | | | |

| [PART IV](#i8300e37934874469bb7650f2efbd8dd1_199) | | | | | | | | |

| [SIGNATURES](#i8300e37934874469bb7650f2efbd8dd1_208) | | | | | | [116](#i8300e37934874469bb7650f2efbd8dd1_208) | | |

We also own office buildings totaling approximately [removed: 1.3] [added: 1.6] million square feet, and we lease approximately [removed: 530,000] [added: 730,000] square feet of office space under leases expiring through [removed: November 2026.][added: September 2027.]

Our common stock is listed on the NYSE under the symbol “DHI.” As of November [removed: 11, 2021,] [added: 10, 2022,] the closing price of our common stock on the NYSE was [removed: $96.36,] [added: $83.92,] and there were approximately [removed: 284] [added: 274] holders of record.

In October [removed: 2021,] [added: 2022,] our Board of Directors approved a quarterly cash dividend of [removed: $0.225] [added: $0.25] per common share, payable on December [removed: 15, 2021,] [added: 12, 2022,] to stockholders of record on December [removed: 6, 2021.][added: 2, 2022.]

We may repurchase shares of our common stock from time to time pursuant to our $1.0 billion common stock repurchase authorization, which was approved by our Board of Directors effective April 20, [removed: 2021,] [added: 2022,] and which replaced our prior $1.0 billion common stock repurchase authorization.

During fiscal [removed: 2021,] [added: 2022,] we purchased [removed: 10.4] [added: 14.0] million shares of our common stock for [removed: $874.0 million.][added: $1.1 billion.]

At September 30, [removed: 2021,] [added: 2022,] our remaining stock repurchase authorization was [removed: $546.2] [added: $438.3] million.

The following table sets forth information concerning our common stock repurchases during the three months ended September 30, [removed: 2021.][added: 2022.]

During fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended (Securities Act).

The following graph illustrates the cumulative total stockholder return on D.R. Horton common stock for the last five fiscal years through September 30, [removed: 2021,] [added: 2022,] compared to the S&P 500 Index and the S&P 1500 Homebuilding Index.

The comparison assumes a hypothetical investment in D.R. Horton common stock and in each of the foregoing indices of $100 at September 30, [removed: 2016] [added: 2017] and assumes that all dividends were reinvested.

[removed: ][added: ]

| | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

We intend to use a trading plan under Rule 10b5-1 under the Exchange Act at any time we seek to repurchase shares during a self-imposed trading blackout period.

| July 1, 2022 - July 31, 2022 | | | 19,400 | | | | | | $ | 74.76 | | | | | 19,400 | | | | | | $ | 688.5 | |

| August 1, 2022 - August 31, 2022 | | | 513,500 | | | | | | 72.81 | | | | | | 513,500 | | | | | | 651.1 | | |

| September 1, 2022 - September 30, 2022 | | | 3,023,347 | | | | | | 70.39 | | | | | | 3,023,347 | | | | | | 438.3 | | |

| Total | | | 3,556,247 | | | | | | $ | 70.76 | | | | | 3,556,247 | | | | | | $ | 438.3 | |

| D.R. Horton, Inc. | | | $ | 100.00 | | | | | $ | 106.80 | | | | | $ | 135.44 | | | | | $ | 196.74 | | | | | $ | 220.50 | | | | | $ | 178.82 | |

| S&P 500 Index | | | 100.00 | | | | | | 117.91 | | | | | | 122.93 | | | | | | 141.55 | | | | | | 184.02 | | | | | | 155.55 | | |

| S&P 1500 Homebuilding Index | | | 100.00 | | | | | | 94.58 | | | | | | 127.00 | | | | | | 169.16 | | | | | | 189.97 | | | | | | 150.47 | | |

| July 1, 2021 - July 31, 2021 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 758.8 | |

| August 1, 2021 - August 31, 2021 | | | 760,204 | | | | | | 93.68 | | | | | | 760,204 | | | | | | 687.6 | | |

| September 1, 2021 - September 30, 2021 | | | 1,579,296 | | | | | | 89.53 | | | | | | 1,579,296 | | | | | | 546.2 | | |

| Total | | | 2,339,500 | | | | | | $ | 90.88 | | | | | 2,339,500 | | | | | | $ | 546.2 | |

| D.R. Horton, Inc. | | | $ | 100.00 | | | | | $ | 133.91 | | | | | $ | 143.01 | | | | | $ | 181.36 | | | | | $ | 263.45 | | | | | $ | 295.26 | |

| S&P 500 Index | | | 100.00 | | | | | | 118.61 | | | | | | 139.85 | | | | | | 145.80 | | | | | | 167.89 | | | | | | 218.26 | | |

| S&P 1500 Homebuilding Index | | | 100.00 | | | | | | 138.42 | | | | | | 130.92 | | | | | | 175.80 | | | | | | 234.15 | | | | | | 262.95 | | |

[removed: D.R. HORTON, INC. AND SUBSIDIARIES][added: To the Board of Directors and Stockholders of D.R. Horton, Inc.]

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 3,210.4] [added: 2,540.5] | | | | | $ | [removed: 3,018.5] [added: 3,210.4] | |

| Restricted cash | | | [removed: 26.8] [added: 32.4] | | | | | | [removed: 21.6] [added: 26.8] | | |

| Total cash, cash equivalents and restricted cash | | | [removed: 3,237.2] [added: 2,572.9] | | | | | | [removed: 3,040.1] [added: 3,237.2] | | |

| Construction in progress and finished homes | | | [removed: 7,739.2] [added: 9,798.2] | | | | | | [removed: 5,984.1] [added: 7,739.2] | | |

| Residential land and lots — developed and under development | | | [removed: 7,781.8] [added: 9,173.1] | | | | | | [removed: 6,171.8] [added: 7,781.8] | | |

| Land held for development | | | [removed: 110.9] [added: 110.8] | | | | | | [removed: 53.2] [added: 110.9] | | |

| Land held for sale | | | [removed: 25.4] [added: 29.4] | | | | | | [removed: 28.3] [added: 25.4] | | |

| Rental properties | | | [removed: 821.8] [added: 2,544.2] | | | | | | [removed: —] [added: 821.8] | | |

| Total inventory | | | [removed: 16,479.1] [added: 21,655.7] | | | | | | [removed: 12,237.4] [added: 16,479.1] | | |

| Mortgage loans held for sale | | | [removed: 2,027.3] [added: 2,386.0] | | | | | | [removed: 1,529.0] [added: 2,027.3] | | |

| Deferred income taxes, net of valuation allowance of [removed: $4.2] [added: $17.9] million and [removed: $7.5] [added: $4.2] million at September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively | | | [removed: 155.3] [added: 141.1] | | | | | | [removed: 144.9] [added: 155.3] | | |

| Property and equipment, net | | | [removed: 392.9] [added: 471.6] | | | | | | [removed: 683.7] [added: 392.9] | | |

| Other assets | | | [removed: 1,560.6] [added: 2,960.3] | | | | | | [removed: 1,113.7] [added: 1,560.6] | | |

| Total assets | | | $ | [removed: 24,015.9] [added: 30,351.1] | | | | | $ | [removed: 18,912.3] [added: 24,015.9] | |

| Accounts payable | | | $ | [removed: 1,177.0] [added: 1,360.3] | | | | | $ | [removed: 900.5] [added: 1,177.0] | |

| Accrued expenses and other liabilities | | | [removed: 2,210.3] [added: 3,138.3] | | | | | | [removed: 1,607.0] [added: 2,210.3] | | |

| Notes payable | | | [removed: 5,412.4] [added: 6,066.9] | | | | | | [removed: 4,283.3] [added: 5,412.4] | | |

| Total liabilities | | | [removed: 8,799.7] [added: 10,565.5] | | | | | | [removed: 6,790.8] [added: 8,799.7] | | |

| Common stock, $.01 par value, 1,000,000,000 shares authorized, [removed: 397,190,100] [added: 399,172,937] shares issued and [removed: 356,015,843] [added: 343,953,023] shares outstanding at September 30, [removed: 2021] [added: 2022] and [removed: 394,741,349] [added: 397,190,100] shares issued and [removed: 363,999,982] [added: 356,015,843] shares outstanding at September 30, [removed: 2020] [added: 2021] | | | 4.0 | | | | | | [removed: 3.9] [added: 4.0] | | |

| Additional paid-in capital | | | [removed: 3,274.8] [added: 3,349.5] | | | | | | [removed: 3,240.9] [added: 3,274.8] | | |

| Retained earnings | | | [removed: 13,644.3] [added: 19,185.3] | | | | | | [removed: 9,757.8] [added: 13,644.3] | | |

| Treasury stock, [removed: 41,174,257] [added: 55,219,914] shares and [removed: 30,741,367] [added: 41,174,257] shares at September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, at cost | | | [removed: (2,036.6)] [added: (3,142.5)] | | | | | | [removed: (1,162.6)] [added: (2,036.6)] | | |

| Stockholders’ equity | | | [removed: 14,886.5] [added: 19,396.3] | | | | | | [removed: 11,840.0] [added: 14,886.5] | | |

| Noncontrolling interests | | | [removed: 329.7] [added: 389.3] | | | | | | [removed: 281.5] [added: 329.7] | | |

| Total equity | | | [removed: 15,216.2] [added: 19,785.6] | | | | | | [removed: 12,121.5] [added: 15,216.2] | | |

| Total liabilities and equity | | | $ | [removed: 24,015.9] [added: 30,351.1] | | | | | $ | [removed: 18,912.3] [added: 24,015.9] | |

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenues | | | $ | [removed: 27,774.2] [added: 33,480.0] | | | | | $ | [removed: 20,311.1] [added: 27,774.2] | | | | | $ | [removed: 17,592.9] [added: 20,311.1] | |

| Cost of sales | | | [removed: 19,899.2] [added: 22,975.9] | | | | | | [removed: 15,373.2] [added: 19,899.2] | | | | | | [removed: 13,720.9] [added: 15,373.2] | | |

| Selling, general and administrative expense | | | [removed: 2,556.2] [added: 2,933.7] | | | | | | [removed: 2,047.8] [added: 2,556.2] | | | | | | [removed: 1,832.5] [added: 2,047.8] | | |

| Gain on sale of assets | | | [removed: (14.0)] [added: —] | | | | | | [removed: (59.5)] [added: (14.0)] | | | | | | [removed: (53.9)] [added: (59.5)] | | |

| Loss on extinguishment of debt | | | [removed: 18.1] [added: —] | | | | | | [removed: —] [added: 18.1] | | | | | | — | | |

| Other (income) expense | | | [removed: (41.6)] [added: (59.3)] | | | | | | [removed: (33.4)] [added: (41.6)] | | | | | | [removed: (31.9)] [added: (33.4)] | | |

| Income before income taxes | | | [removed: 5,356.3] [added: 7,629.7] | | | | | | [removed: 2,983.0] [added: 5,356.3] | | | | | | [removed: 2,125.3] [added: 2,983.0] | | |

| Income tax expense | | | [removed: 1,165.1] [added: 1,734.1] | | | | | | [removed: 602.5] [added: 1,165.1] | | | | | | [removed: 506.7] [added: 602.5] | | |

| Net income | | | [removed: 4,191.2] [added: 5,895.6] | | | | | | [removed: 2,380.5] [added: 4,191.2] | | | | | | [removed: 1,618.6] [added: 2,380.5] | | |

| Net income attributable to noncontrolling interests | | | [removed: 15.4] [added: 38.1] | | | | | | [removed: 6.8] [added: 15.4] | | | | | | [removed: 0.1] [added: 6.8] | | |

| Net income attributable to D.R. Horton, Inc. | | | $ | [removed: 4,175.8] [added: 5,857.5] | | | | | $ | [removed: 2,373.7] [added: 4,175.8] | | | | | $ | [removed: 1,618.5] [added: 2,373.7] | |

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

| | | | Page | | |

| [Reports of Independent Registered Public Accounting Firm](#i487a4a0ac4ad49c6998b5471f4719718_97) (PCAOB ID: 42) | | | [61](#i487a4a0ac4ad49c6998b5471f4719718_97) | | |

| [Consolidated Balance Sheets](#i487a4a0ac4ad49c6998b5471f4719718_103) | | | [64](#i487a4a0ac4ad49c6998b5471f4719718_103) | | |

| [Consolidated Statements of Operations](#i487a4a0ac4ad49c6998b5471f4719718_106) | | | [65](#i487a4a0ac4ad49c6998b5471f4719718_106) | | |

| [Consolidated Statements of Total Equity](#i487a4a0ac4ad49c6998b5471f4719718_109) | | | [66](#i487a4a0ac4ad49c6998b5471f4719718_109) | | |

| [Consolidated Statements of Cash Flows](#i487a4a0ac4ad49c6998b5471f4719718_112) | | | [67](#i487a4a0ac4ad49c6998b5471f4719718_112) | | |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of D.R. Horton, Inc. and subsidiaries (the Company) as of September 30, 2022 and 2021, the related consolidated statements of operations, total equity and cash flows for each of the three years in the period ended September 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2022 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 18, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Estimation of reserves for construction defect matters | | | | | |

| | | | | | |

| *Description of the Matter* | | | At September 30, 2022, the Company’s reserve for legal claims related to construction defect matters was $724.8 million. As explained in Note L to the consolidated financial statements, the Company has established reserves for construction defect matters based on the estimated costs of pending legal claims and the estimated costs of anticipated future legal claims related to previously closed homes, and this liability is included within the accrued expenses and other liabilities account in the consolidated balance sheet. This reserve estimate is subject to a high degree of variability and ongoing revision as the circumstances of individual pending claims and historical data and trends change. Management applies judgment in determining the key assumptions used in calculating the reserve for construction defect matters. Auditing the reserve for construction defect matters is complex and especially challenging due to the judgmental nature of the key assumptions related to projections of the frequency of future claims and the costs to resolve claims in consideration of historical claims information. These assumptions are developed by management, are subjective in nature and have a significant effect on the determined amount of the reserve for construction defect matters. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for estimating the reserve for construction defect matters. We tested the Company’s controls that address the risk of material misstatement related to the measurement and valuation of the reserve for construction defect matters, including the key assumptions related to the projections of the frequency and costs of future claims, and the completeness and accuracy of data used in the model developed by management. To test the reserve for construction defect matters, our audit procedures included, among others, evaluating the methodology used, the key assumptions and the underlying data used by the Company in developing the reserve estimate. As management utilizes historical trends of frequency of claims incurred and the average cost to resolve claims relative to the types of products and markets where the Company operates in measuring the reserve estimate, we evaluated management’s methodology for determining the frequency and cost of future claims assumptions by comparing these key assumptions to trends observed in historical Company claims data and other available information. In addition, we involved an actuarial specialist to assist with our procedures. Our specialist developed a range of values for the reserve estimate based on independently selected assumptions, which we compared to management’s recorded amount to evaluate management’s estimate. We also performed sensitivity analyses to determine the effect of changes in assumptions, where appropriate. We also tested completeness and accuracy of underlying claims data used in management’s estimation calculations and performed recalculations to evaluate the accuracy of the model used by management to determine the estimate. | | |

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2018.

Dallas, Texas

November 18, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of D.R. Horton, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited D.R. Horton, Inc. and subsidiaries’ internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, D.R. Horton, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2022, based on the COSO criteria.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balances at September 30, 2018 (376,261,635 shares) | | | $ | 3.9 | | | | | $ | 3,085.0 | | | | | $ | 6,217.9 | | | | | $ | (322.4) | | | | | $ | 174.5 | | | | | $ | 9,158.9 | |

| Cumulative effect of adoption of ASC 606 | | | — | | | | | | — | | | | | | 27.1 | | | | | | — | | | | | | — | | | | | | 27.1 | | |

| Net income | | | — | | | | | | — | | | | | | 1,618.5 | | | | | | — | | | | | | 0.1 | | | | | | 1,618.6 | | |

| Distributions to noncontrolling interests | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3.9) | | | | | | (3.9) | | |

| Depreciation and amortization | | | 73.9 | | | | | | 80.4 | | | | | | 72.0 | | |

| Amortization of discounts and fees | | | 8.2 | | | | | | 10.2 | | | | | | 10.9 | | |

| Equity in earnings of unconsolidated entities | | | (1.0) | | | | | | (0.7) | | | | | | — | | |

| Increase in other assets | | | (439.7) | | | | | | (150.7) | | | | | | (161.6) | | |

| Distributions to noncontrolling interests, net | | | (0.1) | | | | | | (0.7) | | | | | | (3.9) | | |

| Other financing activities | | | (2.3) | | | | | | (4.4) | | | | | | — | | |

| Accrual for holdback payment related to acquisition | | | $ | 1.1 | | | | | $ | 0.7 | | | | | $ | 10.1 | |

Reclassifications

During the third quarter of fiscal 2021, the Company changed the presentation of its single and multi-family rental operations in its consolidated financial statements.

Bulk sales of rental properties are now presented as revenues and cost of sales, rental assets previously recorded as property and equipment have been reclassified to inventory, and related cash flows for the single and multi-family rental operations are now included in operating activities.

Prior to the third quarter of fiscal 2021, bulk sales of rental properties were presented on a net basis as a gain on sale of assets, and the majority of the cash flow activities were included in investing activities.

This change in presentation was implemented as a result of the Company’s change in strategic focus during the third quarter of fiscal 2021, which included increased levels of rental property activity during that quarter and plans for future investment in the Company’s single and multi-family rental operations.

This presentation was effected on a prospective basis in the Company’s consolidated financial statements beginning in the third quarter of fiscal 2021.

Additionally, during the fourth quarter of fiscal 2021, the Company changed its internal organization and reporting of its operating segments and reportable segments to combine its single-family rental operations and its multi-family rental operations into a new reporting segment to reflect the method by which the chief operating decision makers manage the business, evaluate internal results and allocate financial resources.

The Company’s single-family rental operations had previously been reported in its homebuilding segment and its multi-family operations had previously been reported in its other segment.

Additionally, the Company realigned the aggregation of its homebuilding operating segments into six new reportable segments to better allocate its homebuilding operating segments across geographic reporting regions.

In the Company’s segment information in Note B and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, the prior presentation has been conformed to the current presentation for all periods presented to be consistent with how management evaluates segment performance.

If so, impairment charges are recorded to cost of sales if the fair value of such assets is less than their carrying amounts.

Land Purchase Contract Deposits and Pre-Acquisition Costs

In October 2020, the Company acquired the homebuilding operations of Braselton Homes in Corpus Christi, Texas for approximately $23.0 million in cash.

The assets acquired included approximately 90 homes in inventory, 95 lots and control of approximately 840 additional lots through purchase contracts.

In December 2019, the FASB issued ASU 2019-12 related to simplifying the accounting for income taxes.

The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.

During the fourth quarter of fiscal 2021, the Company changed its internal organization and reporting of its operating segments and reportable segments to combine its single-family rental operations and its multi-family rental operations into a new reporting segment to reflect the method by which the chief operating decision makers manage the business, evaluate internal results and allocate financial resources.

The Company’s single-family rental operations had previously been reported in its homebuilding segment and its multi-family rental operations had previously been reported in its other segment.

Segment information reported in prior year periods has been reclassified to conform to the 2021 presentation.

Forestar has made significant investments in land acquisition and development to expand its business across the United States.

_____________

| | | | | | | September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | | | | $ | 2,551.0 | | | | | $ | 394.3 | | | | | $ | 55.6 | | | | | $ | 12.7 | | | | | $ | 4.9 | | | | | $ | 3,018.5 | |

| Restricted cash | | | | | | 9.4 | | | | | | — | | | | | | 11.9 | | | | | | 0.3 | | | | | | — | | | | | | 21.6 | | |

| Rental properties | | | | | | — | | | | | | — | | | | | | — | | | | | | 316.0 | | | | | | (316.0) | | | | | | — | | |

| | | | | | | 11,015.0 | | | | | | 1,309.7 | | | | | | — | | | | | | 316.0 | | | | | | (403.3) | | | | | | 12,237.4 | | |

| Property and equipment, net | | | | | | 286.7 | | | | | | 1.1 | | | | | | 3.9 | | | | | | — | | | | | | 392.0 | | | | | | 683.7 | | |

Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures as of September 30, [removed: 2021] [added: 2022] were effective in providing reasonable assurance that information required to be disclosed in the reports the Company files, furnishes, submits or otherwise provides the Securities and Exchange Commission (SEC) under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed in reports filed by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including the CEO and CFO, in such a manner as to allow timely decisions regarding the required disclosure.

There have been no changes in the Company’s internal controls over financial reporting during the quarter ended September 30, [removed: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2021.][added: 2022.]

Ernst & Young LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] as stated in their report included herein.

PART III

Not applicable.

PART III

The information required by this item is set forth under the captions *“Proposal One — Election of Directors,” “Corporate Governance and Board Matters”* and *“Delinquent Section 16(a) Reports,”* if applicable, in the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders and incorporated herein by reference.

The information required by this item is set forth under the captions *“Executive Compensation”* and *“CEO Pay Ratio”* in the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders and incorporated herein by reference.

The following table summarizes our equity compensation plans as of September 30, [removed: 2021.][added: 2022.]

| Equity compensation plans approved by stockholders | | | [removed: 6,013,041] [added: 5,439,580] | | | (1) | | | | | | $ | 23.84 | | (2) | | | | | | [removed: 8,727,777] [added: 7,990,123] | | | (3) | | |

(3)Amount includes [removed: 2,714,736] [added: 2,550,543] shares reserved for issuance under the Company’s Employee Stock Purchase Plan.

Under the Employee Stock Purchase Plan, employees purchased [removed: 112,995] [added: 164,193] shares of common stock in fiscal [removed: 2021.][added: 2022.]

The remaining information required by this item is set forth under the caption *“Beneficial Ownership of Common Stock”* in the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders and incorporated herein by reference.

| Total | | | 5,439,580 | | | | | | | | | $ | 23.84 | | | | | | | | 7,990,123 | | | | | |

| Total | | | 6,013,041 | | | | | | | | | $ | 23.84 | | | | | | | | 8,727,777 | | | | | |

The information required by this item is set forth under the captions *“Certain Relationships and Related Person Transactions”* and *“Corporate Governance and Board Matters”* in the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders and incorporated herein by reference.

The information required by this item is set forth under the caption *“Independent Registered Public Accountants”* in the registrant’s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders and incorporated herein by reference.

[removed: (b)Exhibits][added: (b)Exhibits]

| 2.1 | | | | | | | | | [Agreement and Plan of Merger dated June 29, 2017 by and among the Company, Force Merger Sub, Inc. and Forestar Group Inc. (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312517217553/d371231dex21.htm) [](http://www.sec.gov/Archives/edgar/data/882184/000119312517217553/d371231dex21.htm)[filed] [added: 8-K filed] with the SEC on June 29, 2017).](http://www.sec.gov/Archives/edgar/data/882184/000119312517217553/d371231dex21.htm) | | |

| 3.2 | | | | | | | | | [Amended and Restated Bylaws (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312517337236/d489193dex31.htm) [filed] [added: 8-K filed] with the SEC on November 8, 2017).](http://www.sec.gov/Archives/edgar/data/882184/000119312517337236/d489193dex31.htm) | | |

| 4.2 | | | | | | | | | [Senior Debt Securities Indenture, dated as of May 1, 2012, between Company and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312512198160/d343547dex41.htm) [filed] [added: 8-K filed] with the SEC on May 4, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512198160/d343547dex41.htm) | | |

| 4.3 | | | | | | | | | [Second Supplemental Indenture, dated as of September 14, 2012, among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, LLC, as Trustee, relating to the 4.375% Senior Notes due 2022 issued by the Company (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312512393218/d412364dex41.htm) [filed] [added: 8-K filed] with the SEC on September 17, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512393218/d412364dex41.htm) | | |

| 4.4 | | | | | | | | | [Fourth Supplemental Indenture, dated as of February 5, 2013, among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, LLC, as Trustee, relating to the 4.750% Senior Notes due 2023 issued by the Company (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex42.htm) [filed] [added: 8-K filed] with the SEC on February 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex42.htm) | | |

| 4.5 | | | | | | | | | [Fifth Supplemental Indenture, dated as of February 5, 2013, among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, LLC, as trustee (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex43.htm) [filed] [added: 8-K filed] with the SEC on February 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex43.htm) | | |

| 4.6 | | | | | | | | | [Sixth Supplemental Indenture, dated as of August 5, 2013, among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, LLC, as Trustee, relating to the 5.750% Senior Notes Due 2023 issued by the Company (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312513324904/d581912dex41.htm) [filed] [added: 8-K filed] with the SEC on August 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513324904/d581912dex41.htm) | | |

| 4.7 | | | | | | | | | [Tenth Supplemental Indenture, dated as of December 5, 2017, among the Company, the Guarantors named therein and American Stock Transfer & Trust Company, LLC, as trustee (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312517361588/d498980dex42.htm) [filed] [added: 8-K filed] with the SEC on December 5, 2017).](http://www.sec.gov/Archives/edgar/data/882184/000119312517361588/d498980dex42.htm) | | |

| 4.8 | | | | | | | | | [Eleventh Supplemental Indenture, dated as of October 10, 2019, among the Company, the guarantors named therein, American Stock Transfer & Trust Company, LLC, as original trustee, and Branch Banking and Trust Company, as series trustee (incorporated by reference from Exhibit 4.3 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex43.htm) [filed] [added: 8-K filed] with the SEC on October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex43.htm) | | |

| 4.9 | | | | | | | | | [Senior Debt Securities Indenture, dated as of October 10, 2019, among the Company and Branch Banking and Trust Company, as trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm) [filed] [added: 8-K filed] with the SEC on October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm) | | |

| 4.10 | | | | | | | | | [First Supplemental Indenture, dated as of October 10, 2019, among the Company, the guarantors named therein and Branch Banking and Trust Company, as trustee, relating to the 2.500% Senior Notes Due 2024 issued by the Company (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex42.htm) [filed] [added: 8-K filed] with the SEC on October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex42.htm) | | |

| 4.11 | | | | | | | | | [Second Supplemental Indenture, dated as of May 5, 2020, among the Company, the guarantors named therein and Branch Banking and Trust Company, as trustee, relating to the 2.600% Senior Notes Due 2025 issued by the Company (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312520133727/d792024dex41.htm) [filed] [added: 8-K filed] with the SEC on May 5, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000119312520133727/d792024dex41.htm) | | |

| 4.13 | | | | | | | | | [Third Supplemental Indenture, dated as of October 2, 2020, among the Company, the guarantors named therein and Truist Bank (formerly known as Branch Banking and Trust Company), as trustee, relating to the 1.400% Senior Notes Due 2027 issued by the Company (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312520262510/d32970dex41.htm) [filed] [added: 8-K filed] with the SEC on October 2, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000119312520262510/d32970dex41.htm) | | |

| 10.1 | | | | | | | | | [Form of Indemnification Agreement between the Company and each of its [removed: directors](#i8300e37934874469bb7650f2efbd8dd1_1)] [added: directors](#i487a4a0ac4ad49c6998b5471f4719718_1)] [and executive officers and schedules of substantially identical documents (incorporated by reference from Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 1995, filed with the SEC on November 22, 1995 (file number 1-14122); Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, filed with the SEC on August 6, 1998; and Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed with the SEC on May 15, 2001).](http://www.sec.gov/Archives/edgar/data/882184/000095013401501950/d87419ex10-4.txt) | | |

| 10.6 | | | † | | | | | | [D.R. Horton, Inc. 2006 Stock Incentive Plan, as amended and restated (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000095012311005585/d79260exv10w1.htm) [filed] [added: 8-K filed] with the SEC on January 26, 2011).](http://www.sec.gov/Archives/edgar/data/882184/000095012311005585/d79260exv10w1.htm) | | |

| 10.7 | | | † | | | | | | [D.R. Horton, Inc. 2006 Stock Incentive Plan, as amended and restated, effective as of December 11, 2014 (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312515019980/d857731dex101.htm) [filed] [added: 8-K filed] with the SEC on January 26, 2015).](http://www.sec.gov/Archives/edgar/data/882184/000119312515019980/d857731dex101.htm) | | |

| 10.10 | | | † | | | | | | [Form of Non-Qualified Stock Option Agreement (Employee-Term Vesting 2008 Form) pursuant to the Company’s 2006 Stock Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312508032689/dex102.htm) [filed] [added: 8-K filed] with the SEC on February 15, 2008).](http://www.sec.gov/Archives/edgar/data/882184/000119312508032689/dex102.htm) | | |

| 10.11 | | | † | | | | | | [Form of Non-Qualified Stock Option Agreement (Outside Director-Term Vesting 2008 Form) pursuant to the Company’s 2006 Stock Incentive Plan (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312508032689/dex103.htm) [filed] [added: 8-K filed] with the SEC on February 15, 2008).](http://www.sec.gov/Archives/edgar/data/882184/000119312508032689/dex103.htm) | | |

| 10.12 | | | † | | | | | | [Form of Restricted Stock Unit Agreement pursuant to the Company’s 2006 Stock Incentive Plan (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000095012310091822/d76661exv10w1.htm) [filed] [added: 8-K filed] with the SEC on October 6, 2010).](http://www.sec.gov/Archives/edgar/data/882184/000095012310091822/d76661exv10w1.htm) | | |

| 10.13 | | | † | | | | | | [Form of Restricted Stock Unit Agreement pursuant to the Company’s 2006 Stock Incentive Plan, as amended and restated (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312511314518/d256830dex102.htm) [filed] [added: 8-K filed] with the SEC on November 16, 2011).](http://www.sec.gov/Archives/edgar/data/882184/000119312511314518/d256830dex102.htm) | | |

| 10.15 | | | † | | | | | | [Form of Restricted Stock Unit Agreement (Employees) pursuant to the Company’s 2006 Stock Incentive Plan, as amended and restated (incorporated by reference from Exhibit 10.4 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312514409217/d820272dex104.htm) [filed] [added: 8-K filed] with the SEC on November 12, 2014).](http://www.sec.gov/Archives/edgar/data/882184/000119312514409217/d820272dex104.htm) | | |

| 10.17 | | | † | | | | | | [Form of Stock Award Agreement pursuant to the Company’s 2006 Stock Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000095012310091822/d76661exv10w2.htm) [filed] [added: 8-K filed] with the SEC on October 6, 2010).](http://www.sec.gov/Archives/edgar/data/882184/000095012310091822/d76661exv10w2.htm) | | |

| 10.19 | | | † | | | | | | [D.R. Horton, Inc. Amended and Restated Deferred Compensation Plan (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000136231008008261/c78340exv10w1.htm) [filed] [added: 8-K filed] with the SEC on December 16, 2008).](http://www.sec.gov/Archives/edgar/data/882184/000136231008008261/c78340exv10w1.htm) | | |

| 10.20 | | | † | | | | | | [D.R. Horton, Inc. Amended and Restated Supplemental Executive Retirement Plan No. 2 (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000136231008008261/c78340exv10w2.htm) [filed] [added: 8-K filed] with the SEC on December 16, 2008).](http://www.sec.gov/Archives/edgar/data/882184/000136231008008261/c78340exv10w2.htm) | | |

| 10.21 | | | † | | | | | | [D.R. Horton, Inc. 2018 Incentive Bonus Plan, dated November 6, 2018 (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218418000112/exhibit1012018incentivebon.htm) [filed] [added: 8-K filed] with the SEC on November 9, 2018).](http://www.sec.gov/Archives/edgar/data/882184/000088218418000112/exhibit1012018incentivebon.htm) | | |

| 10.22 | | | † | | | | | | [Summary of Executive Compensation Notification - Chairman, CEO and [removed: COO] [added: Co-COOs] (fiscal [removed: 2021)] [added: 2022)] (incorporated by reference from Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2020,] [added: 2021,] filed with the SEC on November [removed: 20, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000088218420000143/a9302020exhibit1023.htm)] [added: 18, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1023.htm)] | | |

| 10.23 | | | * † | | | | | | [Summary of Executive Compensation Notification - Chairman, CEO and [removed: COO] [added: Co-COOs] (fiscal [removed: 2022).](https://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1023.htm)] [added: 2023).](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1023.htm)] | | |

| 10.24 | | | † | | | | | | [Summary of Executive Compensation Notification - Other Executive Officer - CFO (fiscal [removed: 2021)] [added: 2022)] (incorporated by reference from Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2020,] [added: 2021,] filed with the SEC on November [removed: 20, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000088218420000143/a9302020exhibit1025.htm)] [added: 18, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1025.htm)] | | |

| 10.25 | | | * † | | | | | | [Summary of Executive Compensation Notification - Other Executive Officer - CFO (fiscal [removed: 2022).](https://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1025.htm)] [added: 202](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1025.htm)[3](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1025.htm)[).](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1025.htm)] | | |

| 10.26 | | | † | | | | | | [Summary of Director, Committee and Chairperson Compensation (fiscal [removed: 2021)] [added: 2022)] (incorporated by reference from Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2020,] [added: 2021,] filed with the SEC on November [removed: 20, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000088218420000143/a9302020exhibit1027.htm)] [added: 18, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)] | | |

| 10.27 | | | * † | | | | | | [Summary of Director, Committee and Chairperson Compensation (fiscal [removed: 202](https://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)[2](https://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)[).](https://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)] [added: 202](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1027.htm)[3](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1027.htm)[).](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1027.htm)] | | |

| 10.29 | | | | | | | | | [Credit Agreement, dated September 7, 2012, among the Company, the Lenders named therein and The Royal Bank of Scotland PLC, as Administrative Agent (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312512386201/d407372dex101.htm) [filed] [added: 8-K filed] with the SEC on September 10, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512386201/d407372dex101.htm) | | |

| 10.30 | | | | | | | | | [Amendment No.1 to Credit Agreement, dated November 1, 2012, among the Company, The Royal Bank of Scotland PLC, as Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312512451766/d433316dex101.htm) [filed] [added: 8-K filed] with the SEC on November 5, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512451766/d433316dex101.htm) | | |

| 10.31 | | | | | | | | | [Amendment No. 2 to Credit Agreement, dated August 8, 2013 by and among the Company, The Royal Bank of Scotland PLC, as Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218413000056/exhibit101.htm) [filed] [added: 8-K filed] with the SEC on August 13, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000088218413000056/exhibit101.htm) | | |

| 10.32 | | | | | | | | | [Amendment No. 3 to Credit Agreement, dated August 22, 2014 by and among Company, The Royal Bank of Scotland PLC, as Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218414000073/a3rdamend-exh101.htm) [filed] [added: 8-K filed] with the SEC on August 25, 2014).](http://www.sec.gov/Archives/edgar/data/882184/000088218414000073/a3rdamend-exh101.htm) | | |

| 10.33 | | | | | | | | | [Amendment No. 5 to Credit Agreement, dated August 26, 2015 by and among Company, Mizuho Bank, Ltd., as successor Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218415000069/a5thamend-exh101.htm) [filed] [added: 8-K filed] with the SEC on August 27, 2015).](http://www.sec.gov/Archives/edgar/data/882184/000088218415000069/a5thamend-exh101.htm) | | |

| 10.34 | | | | | | | | | [Amendment No. 6 to Credit Agreement, dated September 25, 2017 by and among the Company, Mizuho Bank, Ltd., as successor Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218417000095/a6thamend-exh101.htm) [filed] [added: 8-K filed] with the SEC on September 28, 2017).](http://www.sec.gov/Archives/edgar/data/882184/000088218417000095/a6thamend-exh101.htm) | | |

| 10.35 | | | | | | | | | [Amendment No. 7 to Credit Agreement, dated September 25, 2018 by and among the Company, Mizuho Bank, Ltd., as successor Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000088218418000086/a7thamend-exh101.htm) [filed] [added: 8-K filed] with the SEC on September 26, 2018).](http://www.sec.gov/Archives/edgar/data/882184/000088218418000086/a7thamend-exh101.htm) | | |

| 10.37 | | | | | | | | | [Amendment No. 9 to Credit Agreement, dated October 2, 2019 by and among the Company, Mizuho Bank, Ltd., as successor Administrative Agent, and the Lenders named therein (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form [removed: 8-K](http://www.sec.gov/Archives/edgar/data/882184/000119312519261783/d808352dex101.htm) [filed] [added: 8-K filed] with the SEC on October 4, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519261783/d808352dex101.htm) | | |

| 10.57 | | | † | | | | | | [Summary Compensation Term Sheet - Paul J. Romanowski (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 1, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000119312521289682/d211320dex101.htm) | | |

| 10.58 | | | | | | | | | [Fourth Amended and Restated Master Repurchase Agreement, dated February 18, 2022, among DHI Mortgage Company, Ltd., U.S. Bank National Association, as Administrative Agent, Sole Book Runner, Lead Arranger, and a Buyer, and all other Buyers (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 18, 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218422000046/mortrepurchexh101-feb2022.htm) | | |

| 10.59 | | | | | | | | | [Credit Agreement, dated March 4, 2022, among DRH Rental, Inc., the lenders party thereto and Mizuho Bank, Ltd., as administrative agent (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 7, 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218422000051/drhrentalcreditfacilityexh.htm) | | |

| 10.60 | | | † | | | | | | [Executive Compensation Notice and Summary – Chairman, CEO, and Co-C](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex101.htm)[OO](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex101.htm)[s (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 2](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex101.htm)[9](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex101.htm)[, 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex101.htm) | | |

| 10.61 | | | † | | | | | | [Form of Performance Restricted Stock Unit Agreement – Named Executive Officers (incorporated by reference from Exhibit 10.](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex102.htm)[2](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex102.htm) [to the Company’s current Report on Form 8-K filed with the SEC on March 2](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex102.htm)[9](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex102.htm)[, 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218422000091/execcompplanamend-ex102.htm) | | |

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| Exhibit Number | | | | | | | | | Exhibit | | |

| | | | | | | | | | | | |

| Date: | | | November 18, [removed: 2021] [added: 2022] | | | | | | By: | | | /s/ Bill W. Wheat | | |

| /s/ David V. Auld | | | | | | | | | | | | President and Chief Executive Officer (Principal Executive Officer) | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Bill W. Wheat | | | | | | | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Aron M. Odom | | | | | | | | | | | | Vice President and Controller (Principal Accounting Officer) | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Donald R. Horton | | | | | | | | | | | | Chairman of the Board and Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Barbara K. Allen | | | | | | | | | | | | Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Brad S. Anderson | | | | | | | | | | | | Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Michael R. Buchanan | | | | | | | | | | | | Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Benjamin S. Carson, Sr. | | | | | | | | | | | | Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| /s/ Maribess L. Miller | | | | | | | | | | | | Director | | | | | | November 18, [removed: 2021] [added: 2022] | | |

| | | | | | | | | | | | | | | | | | | | | |

| /s/ Michael W. Hewatt | | | | | | | | | | | | Director | | | | | | November 18, 2021 | | |

| Michael W. Hewatt | | | | | | | | | | | | | | | | | | | | |