D.R. Horton (DHI) 10-K risk factor changes: FY2023 vs FY2022

Risks Related to our Business [removed: and our Industry][added: Operations]

[removed: The] [added: Our] homebuilding, [removed: lot development and] rental [removed: housing industries] [added: and land development operations] are cyclical and affected by changes in economic, real estate or other conditions that could adversely affect our business [removed: or] [added: and] financial results.

[removed: The] [added: Our] homebuilding, [removed: lot development and] rental [removed: housing industries] [added: and land development operations] are cyclical and are significantly affected by changes in general and local economic and real estate conditions, such as:

[removed: During fiscal 2022, in] [added: In] response to increased inflation, the Federal Reserve [added: has] raised interest rates [removed: significantly and] [added: significantly, which] has [removed: signaled it expects additional future] [added: resulted in higher mortgage] interest [removed: rate increases.][added: rates.]

[removed: Increases] [added: Prolonged periods of elevated mortgage interest rates or further increases] in mortgage interest rates [removed: reduce the affordability of our homes and can] [added: could] have an adverse impact on our business [removed: or] [added: and] financial results.

We may be unable to change the [added: pricing or] mix of our home or rental offerings, reduce the costs of the homes or properties we build, offer more affordable homes or rental properties or satisfactorily address changing market conditions in other ways without adversely affecting our profits and returns.

Repurchased mortgage loans and/or the settlement of claims associated with such loans could adversely affect our business [removed: or] [added: and] financial results.

[removed: Constriction of] [added: Adverse developments affecting] the [removed: credit and public] capital markets [added: and financial institutions] could limit our ability to access [removed: capital and] [added: capital,] increase our [removed: costs] [added: cost] of [removed: capital.][added: capital and impact our liquidity and capital resources.]

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, [added: rental or] financial services [removed: or rental] operations.

[added: Our rental subsidiary,] DRH [removed: Rental] [added: 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 [removed: $1.25] [added: $2.0] billion, subject to certain conditions and availability of additional bank commitments.

The maturity date of the facility is [removed: March 4, 2026.][added: October 10, 2027.]

Our mortgage [removed: subsidiary] [added: subsidiary, DHI Mortgage,] utilizes a [removed: $1.6] [added: $2.0] billion [added: committed] mortgage repurchase facility to finance the majority of the loans it originates.

Adverse changes in market conditions could make the renewal of [removed: these facilities] [added: this facility] more difficult or could result in an increase in the cost of [removed: these facilities] [added: this facility] or a decrease in the committed amounts.

The mortgage repurchase [removed: facility is] [added: facilities are] not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, [removed: Forestar or] rental [added: or Forestar] operations.

At September 30, [removed: 2022,] [added: 2023,] $748.2 million remained available for issuance under Forestar’s shelf registration statement, of which $298.2 million was reserved for sales under its at-the-market equity offering program.

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

Reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates could decrease our buyers’ ability to obtain financing and adversely affect our business [removed: or] [added: and] financial results.

During fiscal [removed: 2022,] [added: 2023,] approximately [removed: 62%] [added: 64%] of our mortgage loans were sold directly to Fannie Mae, Freddie Mac or into securities backed by Ginnie Mae, and [removed: 30%] [added: 34%] were sold to one other major financial entity.

Mortgage interest rates have increased significantly during fiscal [removed: 2022,] [added: 2022] and [added: 2023, and] market conditions and government actions could cause mortgage rates to rise even further in the future.

The risks associated with our land, lot and rental inventory could adversely affect our business [removed: or] [added: and] financial results.

Inventory risks are substantial for our homebuilding, [removed: Forestar and] rental [added: and Forestar] businesses.

We cannot make any assurances that our growth strategies, [removed: acquisitions or] [added: acquisitions,] investments [added: or other strategic initiatives] will be successful or will not expose us to additional risks or other negative consequences.

We [added: have acquired the operations of several companies in recent years, and we] may make strategic acquisitions of or investments in other companies, operations or assets in the future.

These [removed: transactions] [added: transactions, or our other strategic initiatives,] may not advance our business strategy, provide a satisfactory return on our investment or provide other benefits we anticipate.

Inflation can adversely affect us by increasing costs of land, [removed: materials] [added: materials, labor] and [removed: labor.][added: our cost of capital.]

These or other factors related to deflation could have a negative impact on our business [removed: or] [added: and] financial results.

Supply shortages and other risks related to acquiring land, building materials and skilled labor [added: and obtaining regulatory approvals] could increase our costs and delay deliveries.

During [removed: fiscal 2021 and 2022,] [added: the last few years,] we [removed: have] experienced multiple disruptions in our supply chain, which [removed: have] resulted in shortages of certain building materials and tightness in the labor market.

This [removed: has] caused our construction cycle to lengthen and costs of building materials to increase.

Public health issues such as a major epidemic or pandemic could adversely affect our business [removed: or] [added: and] financial results.

Warranty and construction defect matters can also result in negative publicity [removed: in the media and on the internet,] which can damage our reputation and adversely affect our ability to sell homes.

We have responded to increases in insurance costs and coverage limitations by self-insuring our risk [removed: for certain] [added: in recent] years and by increasing our self-insured retentions and claim reserves.

At September 30, [removed: 2022,] [added: 2023,] we had [removed: $2.8] [added: $3.2] billion of outstanding surety bonds.

Increases in the costs of owning a home could prevent potential customers from buying our homes and adversely affect our business [removed: or] [added: and] financial results.

Further, existing and prospective regulatory and societal [removed: responses to climate change] [added: initiatives] intended to reduce potential climate change impacts may increase the upfront costs of purchasing a home, costs to maintain the home and its systems, energy and utility costs and the cost to obtain homeowner and various hazard and flood insurance, or limit homeowners’ ability to obtain these insurance policies altogether.

Governmental regulations and environmental matters could increase the cost and limit the availability of our land development and homebuilding projects and adversely affect our business [removed: or] [added: and] financial results.

In addition, [added: government authorities] in many markets [removed: government authorities] have implemented no growth or growth control initiatives.

[removed: Recently, there has been growing concern from] [added: In recent years,] advocacy groups, government agencies and the general public [removed: over] [added: have expressed growing concerns regarding] the effects of climate change on the environment.

Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, [removed: diligence,] [added: diligence] and disclosure on topics such as climate [removed: change,] [added: change (as currently proposed by the SEC),] human capital, [removed: labor] [added: labor, cybersecurity] and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report.

Governmental regulation of our financial services operations could adversely affect our business [removed: or] [added: and] financial results.

The increase in mortgage interest rates has reduced the affordability of our homes and has required us to use pricing adjustments and incentives to adapt to current market conditions.

Adverse developments affecting the capital markets and financial institutions, or concerns or rumors about such events, may limit our ability to access the public debt markets or obtain bank financing or may increase our cost of capital.

The failure of a bank or other adverse conditions impacting financial institutions where we have cash balances could adversely impact our liquidity and capital resources.

The maturity date of the committed mortgage repurchase facility is February 16, 2024.

DHI Mortgage also utilizes an uncommitted mortgage repurchase facility, which had a capacity of $300 million at September 30, 2023.

During the past two years, the economy has experienced significant inflationary pressures.

In an effort to lower the current rate of inflation, the Federal Reserve has raised interest rates significantly, which has resulted in higher mortgage interest rates.

The increase in mortgage interest rates has reduced the affordability of our homes and has required us to use pricing adjustments and incentives to adapt to current market conditions, which lowered our homebuilding gross margin in fiscal 2023 compared to fiscal 2022.

If inflation and mortgage interest rates remain high or continue to increase, housing affordability may be further impacted, which could reduce our profit margins and have an adverse impact on our business and financial results.

- delays in receiving the necessary approvals from municipalities or other government agencies;

We began to see improvements in our construction cycle time in fiscal 2023 and expect our cycle times to return to normalized levels during fiscal 2024; however, if shortages and cost increases in building materials and tightness in the labor market increase, our construction cycle time and profit margins could be adversely impacted.

In the event of a resurgence of COVID-19 or a widespread, prolonged, actual or perceived outbreak of any contagious disease, our operations could be negatively impacted.

Such events have had, and could in the future have, an effect on our operations, including a reduction in customer traffic, a disruption in our supply chain, tightness in the labor market or other factors, all of which could reduce demand for our homes.

These or other repercussions of a public health crisis that affect the global economy could have an adverse impact on our results of operations and financial condition.

We operate in the residential housing industry, which is highly competitive.

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

There likely will be periods in the future when financial market upheaval will increase our cost of capital or limit our ability to access the public debt markets or obtain bank financing.

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

The capacity of the facility automatically increases during certain higher volume periods and can be further increased through additional commitments.

The total capacity of the facility at September 30, 2022 was $2.2 billion, and its maturity date is February 17, 2023.

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.

In addition, significant inflation is often accompanied by higher interest rates, which have a negative impact on housing affordability.

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

In 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 an inflationary environment, our cost of capital, labor and materials can increase and the purchasing power of our cash resources can decline, which can have an adverse impact on our business or financial results.

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 offset cost increases by increasing the selling price of our homes.

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

The effects of the pandemic contributed to disrupting our supply chain, which has resulted in shortages of certain building materials and tightness in the labor market.

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

If COVID-19 and its variant strains continue to have a negative impact on economic conditions, our results of operations and financial condition could be adversely impacted.

The homebuilding, lot development and rental housing industries are highly competitive.

Competition for the services of these individuals increases as business conditions improve in the homebuilding, lot development, financial services and rental housing industries and in the general economy.

an office setting and remote locations as needed.

We provide employee awareness training about cybersecurity threats.

This section discusses the results of operations for fiscal [removed: 2022] [added: 2023] compared to [removed: 2021.][added: 2022.]

For similar operating and financial data and discussion of our fiscal [removed: 2021] [added: 2022] results compared to our fiscal [removed: 2020] [added: 2021] 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: 2021,] [added: 2022,] which was filed with the SEC on November 18, [removed: 2021.][added: 2022.]

Fiscal [removed: 2022] [added: 2023] Operating Results

In fiscal [removed: 2022,] [added: 2023,] our number of homes closed [removed: and home sales revenues] increased [removed: 1% and 20%, respectively,] [added: slightly] compared to the prior year, and our consolidated revenues increased [removed: 21%] [added: 6%] to [removed: $33.5] [added: $35.5] billion compared to [removed: $27.8] [added: $33.5] billion in the prior year.

Our pre-tax income was [removed: $7.6] [added: $6.3] billion in fiscal [removed: 2022] [added: 2023] compared to [removed: $5.4] [added: $7.6] billion in fiscal [removed: 2021,] [added: 2022,] and our pre-tax operating margin was [removed: 22.8%] [added: 17.8%] compared to [removed: 19.3%.][added: 22.8%.]

Net income was [removed: $5.9] [added: $4.8] billion in fiscal [removed: 2022] [added: 2023] compared to [removed: $4.2] [added: $5.9] billion in fiscal [removed: 2021,] [added: 2022,] and our diluted earnings per share was [removed: $16.51] [added: $13.82] compared to [removed: $11.41.][added: $16.51.]

Consolidated net cash provided by operating activities was [removed: $561.8 million] [added: $4.3 billion] in fiscal [removed: 2022] [added: 2023] and [removed: $534.4] [added: $561.8] million in fiscal [removed: 2021,] [added: 2022,] and cash provided by our homebuilding operations was [removed: $1.9] [added: $3.1] billion in fiscal [removed: 2022] [added: 2023] compared to [removed: $1.2] [added: $1.9] billion in fiscal [removed: 2021.][added: 2022.]

In fiscal [removed: 2022,] [added: 2023,] our return on equity (ROE) was [removed: 34.5%] [added: 22.7%] compared to [removed: 31.6%] [added: 34.5%] in fiscal [removed: 2021,] [added: 2022,] and our homebuilding return on inventory (ROI) was [removed: 42.8%] [added: 29.7%] compared to [removed: 37.9%.][added: 42.8%.]

In [removed: June] [added: late fiscal] 2022, we began to see a moderation in housing demand that persisted [removed: through the end of our] [added: into early] fiscal [removed: year] [added: 2023] as mortgage interest rates increased substantially and inflationary pressures remained elevated.

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

Within our homebuilding land and lot portfolio, our lots controlled through purchase contracts represent [removed: 77%] [added: 75%] of the lots owned and controlled at September 30, [removed: 2022] [added: 2023] compared to [removed: 76%] [added: 77%] at September 30, [removed: 2021.][added: 2022.]

Our operating strategy focuses on [added: consistently] enhancing long-term value to our shareholders by leveraging our financial and competitive position 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 conditions.

Our strategy [removed: remains consistent and] includes the following initiatives:

- Modifying product offerings, sales pace, home prices and [removed: sales] incentives as necessary in each of our markets to meet consumer demand and maintain affordability.

- [removed: Continuing to seek opportunities to expand the] [added: Controlling a significant] portion of our land and finished [removed: lots controlled] [added: lot position] through purchase contracts with Forestar and other land developers.

- Controlling the cost of [added: labor and] goods [removed: purchased from both] [added: provided by] vendors and subcontractors.

Key financial results as of and for our fiscal year ended September 30, [removed: 2022,] [added: 2023,] as compared to fiscal [removed: 2021,] [added: 2022,] were as follows:

- Homebuilding revenues [removed: increased 20%] [added: decreased 1%] to [removed: $31.9] [added: $31.7] billion compared to [removed: $26.6] [added: $31.9] billion.

- Homes closed increased [removed: 1%] [added: slightly] to [removed: 82,744] [added: 82,917] homes, and the average closing price of those homes [removed: increased 19%] [added: decreased 1%] to [removed: $385,100.][added: $381,600.]

- Net sales orders [removed: decreased 6%] [added: increased 3%] to [removed: 76,137] [added: 78,342] homes, while the value of net sales orders [removed: increased 9%] [added: decreased 3%] to [removed: $30.4] [added: $29.5] billion.

- Sales order backlog decreased [removed: 25%] [added: 23%] to [removed: 19,614] [added: 15,197] homes, and the value of sales order backlog decreased [removed: 16%] [added: 26%] to [removed: $8.0] [added: $5.9] billion.

- Home sales gross margin was [removed: 28.7%] [added: 23.5%] compared to [removed: 25.5%.][added: 28.7%.]

- Homebuilding SG&A expense was [removed: 6.8%] [added: 7.1%] of homebuilding revenues compared to [removed: 7.3%.][added: 6.8%.]

- Homebuilding pre-tax income was [removed: $6.9] [added: $5.3] billion compared to [removed: $4.8] [added: $6.9] billion.

- Homebuilding pre-tax income was [removed: 21.7%] [added: 16.6%] of homebuilding revenues compared to [removed: 18.1%.][added: 21.7%.]

- Homebuilding return on inventory was [removed: 42.8%] [added: 29.7%] compared to [removed: 37.9%.][added: 42.8%.]

- Net cash provided by homebuilding operations was [removed: $1.9] [added: $3.1] billion compared to [removed: $1.2] [added: $1.9] billion.

- Homebuilding cash and cash equivalents totaled [removed: $2.0] [added: $2.9] billion compared to [removed: $3.0] [added: $2.0] billion.

- Homebuilding inventories totaled [removed: $17.3] [added: $18.2] billion compared to [removed: $13.9] [added: $17.3] billion.

- Homes in inventory totaled [removed: 46,400] [added: 42,000] compared to [removed: 47,800.][added: 46,400.]

- Owned lots totaled [removed: 131,100] [added: 141,100] compared to [removed: 127,800,] [added: 131,100,] and lots controlled through purchase contracts [removed: increased] [added: totaled 427,300 compared] to [removed: 442,100 from 402,500.][added: 442,100.]

- Homebuilding debt was [removed: $2.9] [added: $2.3] billion compared to [removed: $3.2] [added: $2.9] billion.

- [removed: Homebuilding debt] [added: Debt] to total capital was [removed: 13.2%] [added: 18.3%] compared to [removed: 17.8%,] [added: 23.8%,] and net [removed: homebuilding] debt to total capital was [removed: 4.4%] [added: 5.1%] compared to [removed: 1.7%.][added: 15.4%.]

- Forestar’s revenues [removed: increased 15%] [added: decreased 5%] to [removed: $1.5] [added: $1.4] billion compared to [removed: $1.3] [added: $1.5] billion.

Revenues in both fiscal [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] included $1.2 billion of revenue from land and lot sales to our homebuilding segment.

Lots sold to D.R. Horton totaled [removed: 14,895] [added: 12,249] compared to [removed: 14,839.][added: 14,895.]

- Forestar’s pre-tax income was [removed: $235.8] [added: $221.6] million compared to [removed: $146.6] [added: $235.8] million.

- Forestar’s pre-tax income was [removed: 15.5%] [added: 15.4%] of revenues compared to [removed: 11.1%.][added: 15.5%.]

- Forestar’s cash and cash equivalents totaled [removed: $264.8] [added: $616.0] million compared to [removed: $153.6] [added: $264.8] million.

- Forestar’s inventories totaled [removed: $2.0] [added: $1.8] billion compared to [removed: $1.9] [added: $2.0] billion.

Demand for new homes remained solid during fiscal 2023 as our net sales orders increased 3% compared to fiscal 2022.

Although inflationary pressures and mortgage interest rates remain elevated, demand improved beginning in the second quarter of fiscal 2023 due to typical seasonal factors, coupled with our use of incentives and pricing adjustments to adapt to market conditions.

The disruptions in the supply chain for certain building materials and tightness in the labor market we experienced during the past two years have largely subsided, and our construction cycle times are improving.

Our homebuilding operating margins are lower than last year due to pricing adjustments, incentives and cost inflation, but margins improved in the second half of the year as home prices and incentives stabilized and some reductions in construction costs were realized.

Although higher interest rates and economic uncertainty may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable.

We remain focused on our relationships with Forestar and other land developers across the country and expect to continue to control a substantial majority of our lot pipeline through purchase contracts.

- Forestar’s lots sold decreased 21% to 14,040 compared to 17,691.

| Southeast | | | | | | 21,683 | | | | | | 21,649 | | | | | | — | | % | | | | 7,812.0 | | | | | | 8,193.6 | | | | | | (5) | | % | | | | 360,300 | | | | | | 378,500 | | | | | | (5) | | % |

| East | | | | | | 15,013 | | | | | | 13,479 | | | | | | 11 | | % | | | | 5,361.4 | | | | | | 5,059.7 | | | | | | 6 | | % | | | | 357,100 | | | | | | 375,400 | | | | | | (5) | | % |

| North | | | | | | 7,838 | | | | | | 6,972 | | | | | | 12 | | % | | | | 3,170.4 | | | | | | 2,908.5 | | | | | | 9 | | % | | | | 404,500 | | | | | | 417,200 | | | | | | (3) | | % |

| | | | | | | 78,342 | | | | | | 76,137 | | | | | | 3 | | % | | | | $ | 29,527.9 | | | | | $ | 30,373.6 | | | | | (3) | | % | | | | $ | 376,900 | | | | | $ | 398,900 | | | | | (6) | | % |

| | | | | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | | | | | 2023 | | | | | | 2022 | | |

| | | | | | | 19,793 | | | | | | 20,105 | | | | | | $ | 7,594.9 | | | | | $ | 7,628.8 | | | | | 20 | | % | | | | 21 | | % |

The overall increase in sales order volume was primarily due to increases in the East and North where our Carolina (particularly Myrtle Beach) and Ohio markets, respectively, contributed the most.

Despite the continuation of those conditions, demand improved beginning in the second quarter of fiscal 2023 due to typical seasonal factors, coupled with an increased use of incentives and pricing adjustments to adapt to changing market conditions.

Although higher interest rates and economic uncertainty may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable.

| Northwest | | | | | | 547 | | | | | | 724 | | | | | | (24) | | % | | | | $ | 278.1 | | | | | $ | 427.1 | | | | | (35) | | % | | | | $ | 508,400 | | | | | $ | 589,900 | | | | | (14) | | % |

| Southeast | | | | | | 4,816 | | | | | | 6,983 | | | | | | (31) | | % | | | | 1,873.7 | | | | | | 2,787.3 | | | | | | (33) | | % | | | | 389,100 | | | | | | 399,200 | | | | | | (3) | | % |

| | | | | | | 15,197 | | | | | | 19,614 | | | | | | (23) | | % | | | | $ | 5,923.3 | | | | | $ | 7,975.0 | | | | | (26) | | % | | | | $ | 389,800 | | | | | $ | 406,600 | | | | | (4) | | % |

| | | | | | | 2023 | | | | | | 2022 | | | | | | % Change | | | | | | 2023 | | | | | | 2022 | | | | | | % Change | | | | | | 2023 | | | | | | 2022 | | | | | | % Change | | |

| Northwest | | | | | | 4,799 | | | | | | 4,739 | | | | | | 1 | | % | | | | $ | 2,574.1 | | | | | $ | 2,637.1 | | | | | (2) | | % | | | | $ | 536,400 | | | | | $ | 556,500 | | | | | (4) | | % |

| Southwest | | | | | | 8,823 | | | | | | 9,789 | | | | | | (10) | | % | | | | 4,246.7 | | | | | | 4,826.4 | | | | | | (12) | | % | | | | 481,300 | | | | | | 493,000 | | | | | | (2) | | % |

| Southeast | | | | | | 23,905 | | | | | | 21,985 | | | | | | 9 | | % | | | | 8,756.5 | | | | | | 7,941.0 | | | | | | 10 | | % | | | | 366,300 | | | | | | 361,200 | | | | | | 1 | | % |

| | | | | | | 82,917 | | | | | | 82,744 | | | | | | — | | % | | | | $ | 31,641.0 | | | | | $ | 31,861.7 | | | | | (1) | | % | | | | $ | 381,600 | | | | | $ | 385,100 | | | | | (1) | | % |

The increase in closings volume in the Southeast was due to our Florida markets (particularly Tampa) and in the North was due to our Indianapolis and Maryland markets.

The decrease in closings volume in the Southwest was due to our California markets (particularly Southern California).

| | | | | | | 2023 | | | | | | 2022 | | |

To adjust to changing market conditions and higher mortgage interest rates during fiscal 2023, we increased our use of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers.

Based on current market conditions, we expect to continue offering a higher level of incentives in fiscal 2024.

During fiscal 2023, impairment charges related to our homebuilding segment totaled $7.7 million.

Interest incurred by our homebuilding operations decreased 38% to $68.8 million in fiscal 2023 from $110.7 million in fiscal 2022, primarily due to a 25% decrease in our average homebuilding debt.

Business Acquisitions

In December 2022, we acquired the homebuilding operations of Riggins Custom Homes in Northwest Arkansas for approximately $107 million in cash.

The assets acquired included approximately 170 homes in inventory, 3,000 lots and a sales order backlog of 100 homes.

In June 2023, we acquired the homebuilding operations of Truland Homes for approximately $110 million in cash.

Truland Homes operates in Baldwin County, Alabama and Northwest Florida.

The assets acquired included approximately 155 homes in inventory, 620 lots and a sales order backlog of 55 homes.

We also acquired control of approximately 660 additional lots through land purchase contracts.

| | | | | | | 2023 | | | | | | | | | | | | | | | | | | 2022 | | | | | | | | | | | | | | |

| | | | | | | $ | 31,743.2 | | | | | $ | 5,266.3 | | | | | 16.6 | | % | | | | $ | 31,923.1 | | | | | $ | 6,940.9 | | | | | 21.7 | | % |

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

The supply of homes at affordable price points remains limited across most of our markets, and disruptions in the supply chains for certain building materials and tightness in the labor market have caused our construction cycle to lengthen.

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

- Forestar’s lots sold increased 11% to 17,691 compared to 15,915.

- Debt to total capital was 23.8% compared to 26.7%, and net debt to total capital was 15.4% compared to 12.9%.

| 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 | | |

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

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.

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.

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.

| Northwest | | | | | | 724 | | | | | | 954 | | | | | | (24) | | % | | | | $ | 427.1 | | | | | $ | 497.7 | | | | | (14) | | % | | | | $ | 589,900 | | | | | $ | 521,700 | | | | | 13 | | % |

| Southeast | | | | | | 6,983 | | | | | | 7,319 | | | | | | (5) | | % | | | | 2,787.3 | | | | | | 2,534.7 | | | | | | 10 | | % | | | | 399,200 | | | | | | 346,300 | | | | | | 15 | | % |

| | | | | | | 19,614 | | | | | | 26,221 | | | | | | (25) | | % | | | | $ | 7,975.0 | | | | | $ | 9,463.1 | | | | | (16) | | % | | | | $ | 406,600 | | | | | $ | 360,900 | | | | | 13 | | % |

| Northwest | | | | | | 4,739 | | | | | | 5,120 | | | | | | (7) | | % | | | | $ | 2,637.1 | | | | | $ | 2,515.6 | | | | | 5 | | % | | | | $ | 556,500 | | | | | $ | 491,300 | | | | | 13 | | % |

| Southwest | | | | | | 9,789 | | | | | | 9,760 | | | | | | — | | % | | | | 4,826.4 | | | | | | 4,024.7 | | | | | | 20 | | % | | | | 493,000 | | | | | | 412,400 | | | | | | 20 | | % |

| Southeast | | | | | | 21,985 | | | | | | 23,842 | | | | | | (8) | | % | | | | 7,941.0 | | | | | | 7,066.1 | | | | | | 12 | | % | | | | 361,200 | | | | | | 296,400 | | | | | | 22 | | % |

| | | | | | | 82,744 | | | | | | 81,965 | | | | | | 1 | | % | | | | $ | 31,861.7 | | | | | $ | 26,502.6 | | | | | 20 | | % | | | | $ | 385,100 | | | | | $ | 323,300 | | | | | 19 | | % |

Although our homes closed during the year were negatively impacted by supply chain disruptions, home sales revenues increased in all of our regions due to an increase in average selling price.

The number of homes closed in 2022 increased 1% from 2021.

In regions with an increase in closings volume, the markets contributing most to the increases were: the Dallas market in the South Central and the Chicago and New Jersey markets in the North.

In regions with a decrease in closings volume, the markets contributing most to the decreases were: the Seattle market in the Northwest and the Orlando market in the Southeast.

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

To adjust to market conditions, we increased our use of incentives in the fourth quarter of fiscal 2022, and our home sales gross profit margin declined sequentially by 180 basis points from 30.1% in the third quarter to 28.3% in the fourth quarter.

During fiscal 2023, we expect to continue offering a higher level of incentives and also expect our average sales price to decrease, which will cause our gross profit margins to decline from current levels.

Interest incurred by our homebuilding operations was $110.7 million and $93.6 million in fiscal 2022 and 2021, respectively.

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

| | | | | | | $ | 31,923.1 | | | | | $ | 6,940.9 | | | | | 21.7 | | % | | | | $ | 26,577.6 | | | | | $ | 4,812.8 | | | | | 18.1 | | % |

*North Region* — Homebuilding revenues increased 27% in fiscal 2022 compared to fiscal 2021, due to increases in the average selling price and the number of homes closed in all markets.

| Northwest | | | $ | 609.6 | | | | | $ | 685.4 | | | | | $ | — | | | | | $ | 12.5 | | | | | $ | 1,307.5 | |

| Southwest | | | 1,113.5 | | | | | | 1,315.8 | | | | | | 6.9 | | | | | | 9.4 | | | | | | 2,445.6 | | |

| South Central | | | 1,977.4 | | | | | | 1,501.5 | | | | | | 0.4 | | | | | | — | | | | | | 3,479.3 | | |

| Southeast | | | 2,002.4 | | | | | | 1,160.1 | | | | | | 16.1 | | | | | | — | | | | | | 3,178.6 | | |

The net fair value change, which for the years ended September 30, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] was not significant, is recognized in current earnings.

At September 30, [removed: 2022,] [added: 2023,] 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: $5.4] [added: $4.3] billion.

Uncommitted IRLCs totaled a notional amount of approximately [removed: $4.0] [added: $2.7] billion and uncommitted mortgage loans held for sale totaled a notional amount of approximately [removed: $1.6] [added: $1.7] billion at September 30, [removed: 2022.][added: 2023.]

At September 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] we had MBS totaling [removed: $532.4 million] [added: $1.1 billion] and [removed: $834.6] [added: $532.4] million, respectively, that did not yet have IRLCs or closed loans created or assigned and recorded an asset of [removed: $4.8] [added: $15.7] million and [removed: $1.1] [added: $4.8] 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: 2022.][added: 2023.]

The interest rate for our variable rate debt represents the weighted average interest rate in effect at September 30, [removed: 2022.][added: 2023.]

| | | | | | | Fiscal Year Ending September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value at September 30, [removed: 2022] [added: 2023] | | |

| | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | [removed: 2027] [added: 2028] | | | | | | Thereafter | | | | | | Total | | | | | | | | |

| Average interest rate | | | | | | [removed: 5.2] [added: 4.5] | | % | | | | [removed: 4.0] [added: 2.6] | | % | | | | [removed: 2.7] [added: 3.4] | | % | | | | [removed: 3.4] [added: 1.5] | | % | | | | [removed: 1.5] [added: 3.0] | | % | | | | [removed: 3.0] [added: —] | | % | | | | [removed: 3.3] [added: 2.8] | | % | | | | | | |

| Fixed rate | | | | | | $ | 190.0 | | | | | $ | 522.7 | | | | | $ | 919.8 | | | | | $ | 607.2 | | | | | $ | 800.0 | | | | | $ | — | | | | | $ | 3,039.7 | | | | | $ | 2,772.3 | |

| Variable rate | | | | | | $ | 1,669.6 | | | | | $ | — | | | | | $ | 400.0 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,069.6 | | | | | $ | 2,069.6 | |

| Average interest rate | | | | | | 6.9 | | % | | | | — | | % | | | | 7.7 | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | 7.0 | | % | | | | | | |

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

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

| Average interest rate | | | | | | 4.6 | | % | | | | — | | % | | | | — | | % | | | | 4.8 | | % | | | | — | | % | | | | — | | % | | | | 4.7 | | % | | | | | | |

We have expanded and diversified our homebuilding operations geographically over the years by investing [removed: available] capital [removed: into] [added: and building teams of people in] our existing markets, start-up operations in new markets and acquisitions of other homebuilding companies.

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

For the year ended September 30, [removed: 2022,] [added: 2023,] our homebuilding operations closed [removed: 82,744] [added: 82,917] homes with an average closing price of [removed: $385,100.][added: $381,600.]

Our business operations consist of homebuilding, [added: rental,] a majority-owned residential lot development company, financial [removed: services, rental] [added: services] and other activities.

Our homebuilding operations are our core business, generating [removed: 95%] [added: 90%] of our consolidated revenues of [removed: $33.5] [added: $35.5] billion in fiscal [removed: 2022, 96%] [added: 2023, 95%] of consolidated revenues of [removed: $27.8] [added: $33.5] billion in fiscal [removed: 2021] [added: 2022] and [removed: 97%] [added: 96%] of consolidated revenues of [removed: $20.3] [added: $27.8] billion in fiscal [removed: 2020.][added: 2021.]

Approximately [removed: 91%] [added: 90%] of our home sales revenue in fiscal [removed: 2022] [added: 2023] 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.

[removed: During fiscal 2018,] [added: At September 30, 2023,] we [removed: acquired 75%] [added: owned 63%] of the outstanding shares of Forestar Group Inc. (Forestar), a publicly traded residential lot development company listed on the NYSE under the ticker symbol “FOR.” Forestar [added: operates across many of our homebuilding operating markets and] is a [removed: component] [added: key part] of our homebuilding strategy to [removed: enhance operational and capital efficiency and returns by expanding] [added: maintain] relationships with land developers and [removed: increasing the] [added: to control a large] portion of our land and lot position [removed: controlled] through land purchase contracts.

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

Our rental segment consists of [removed: multi-family and] single-family [added: and multi-family] rental operations.

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

In addition to our homebuilding, [removed: Forestar,] [added: rental, Forestar and] financial services [removed: and rental] operations, we engage in other business activities through our subsidiaries.

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

We make available, as soon as reasonably practicable, on our website, *www.drhorton.com*, all of our reports [removed: required to be] filed with [added: or furnished to] the Securities and Exchange Commission (SEC).

Our homebuilding business operates in [removed: 106] [added: 118] markets across 33 states, which provides us with geographic diversification in our homebuilding inventory investments and our sources of revenues and earnings.

| State | | | | | | Reporting Region/Market | | | | | | State | | | | | | Reporting Region/Market | | | [added: | | | State | | | | | | Reporting Region/Market | | |]

| | | | | | | Northwest Region | | | | | | | | | | | | Southeast [removed: Region (Continued)] [added: Region] | | | [added: | | | | | | | | | North Region | | |]

| | | | | | | Eugene/Springfield | | | | | | | | | | | | [removed: Tallahassee] [added: Tuscaloosa] | | | [added: | | | | | | | | | Indianapolis | | |]

| Utah | | | | | | Salt Lake City | | | | | | | | | | | | [removed: Volusia County] [added: Jacksonville] | | | [added: | | | | | | | | | Iowa City/Cedar Rapids | | |]

| | | | | | | [added: Sacramento] | | | | | | | | | | | | East Region | | | [added: | | | | | | | | | Western Virginia | | |]

| | | | | | | [removed: Bay Area] | | | | | | North Carolina | | | | | | Asheville | | | [added: | | | | | | | | | | | |]

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

| | | | | | | [removed: San Bernardino County] [added: Austin] | | | | | | South Carolina | | | | | | Charleston | | | [added: | | | | | | | | | | | |]

| Hawaii | | | | | | Oahu | | | | | | | | | | | | [removed: Columbia] [added: Augusta] | | | [added: | | | | | | | | | | | |]

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

| | | | | | | [removed: Reno] [added: Corpus Christi] | | | | | | | | | | | | Hilton Head | | | [added: | | | | | | | | | | | |]

| New Mexico | | | | | | Albuquerque | | | | | | | | | | | | [removed: Myrtle Beach] [added: Valdosta] | | | [added: | | | | | | | | | | | |]

| | | | | | | [added: East Texas] | | | | | | Tennessee | | | | | | Chattanooga | | | [added: | | | | | | | | | | | |]

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

| | | | | | | Bryan/College Station | | | | | | | | | | | | [removed: Northern Delaware] [added: Greenville/Spartanburg] | | | [added: | | | | | | | | | | | |]

| [added: Oregon] | | | | | | [removed: Dallas] [added: Bend] | | | | | | [added: | | | | | | Montgomery | | | | | |] Indiana | | | | | | Fort Wayne | | |

| | | | | | | Fort Worth | | | | | | | | | | | | [removed: Indianapolis] [added: Knoxville] | | | [added: | | | | | | | | | | | |]

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

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

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

| | | | | | | San Antonio | | | | | | | | | | | | [removed: Suburban Washington, D.C.] | | | [added: | | | | | | | | | | | |]

| | | | | | | [added: Spokane] | | | | | | | | | | | | [added: Orlando | | | | | | | | | | | |] Western Maryland | | |

| | | | | | | [removed: Southeast Region] [added: Vancouver] | | | | | | [added: | | | | | | Panama City | | | | | |] Minnesota | | | | | | Minneapolis/St. Paul | | |

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

| [added: | | | | | | Medford | | | | | |] Florida | | | | | | Fort Myers/Naples | | | | | | [removed: Pennsylvania] | | | | | | [removed: Central Pennsylvania] [added: Northwest Indiana] | | |

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

We construct and sell homes through our operating divisions in 118 markets across 33 states.

We have closed more than 1,000,000 homes during our 45-year history, and we have been the largest volume homebuilder in the United States each year since 2002.

For the year ended September 30, 2023, our rental operations closed 6,175 single-family rental homes and 2,112 multi-family rental units.

For the year ended September 30, 2023, Forestar sold 14,040 lots to homebuilders, including 12,249 lots sold to D.R. Horton.

For the year ended September 30, 2023, DHI Mortgage originated or brokered 63,135 mortgage loans.

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

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

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

| Colorado | | | | | | Colorado Springs | | | | | | Alabama | | | | | | Birmingham | | | | | | Delaware | | | | | | Southern Delaware | | |

| | | | | | | Denver | | | | | | | | | | | | Huntsville | | | | | | | | | | | | Northern Delaware | | |

| | | | | | | Fort Collins | | | | | | | | | | | | Mobile/Baldwin County | | | | | | Illinois | | | | | | Chicago | | |

| | | | | | | Portland/Salem | | | | | | | | | | | | Gainesville | | | | | | Iowa | | | | | | Des Moines | | |

| | | | | | | St. George | | | | | | | | | | | | Lakeland | | | | | | Kentucky | | | | | | Louisville | | |

| Washington | | | | | | Central Washington | | | | | | | | | | | | Melbourne/Vero Beach | | | | | | Maryland | | | | | | Baltimore | | |

| | | | | | | Seattle/Tacoma/Everett/Olympia | | | | | | | | | | | | Ocala | | | | | | | | | | | | Suburban Washington, D.C. | | |

| | | | | | | Southwest Region | | | | | | | | | | | | Port St. Lucie | | | | | | New Jersey | | | | | | Northern New Jersey | | |

| Arizona | | | | | | Phoenix | | | | | | | | | | | | Tallahassee | | | | | | | | | | | | Southern New Jersey | | |

| | | | | | | Tucson | | | | | | | | | | | | Tampa/Sarasota | | | | | | Ohio | | | | | | Cincinnati | | |

| California | | | | | | Bakersfield | | | | | | | | | | | | Volusia County | | | | | | | | | | | | Columbus | | |

| | | | | | | Bay Area | | | | | | | | | | | | West Palm Beach | | | | | | Pennsylvania | | | | | | Central Pennsylvania | | |

| | | | | | | Fresno/Tulare | | | | | | Louisiana | | | | | | Baton Rouge | | | | | | | | | | | | Philadelphia | | |

| | | | | | | Los Angeles County | | | | | | | | | | | | Lake Charles/Lafayette | | | | | | | | | | | | Pittsburgh | | |

| | | | | | | Modesto/Merced/Stockton | | | | | | Mississippi | | | | | | Gulf Coast | | | | | | Virginia | | | | | | Northern Virginia | | |

| | | | | | | Redding/Chico/Yuba City | | | | | | | | | | | | Jackson | | | | | | | | | | | | Richmond | | |

| | | | | | | San Bernardino County | | | | | | Georgia | | | | | | Atlanta | | | | | | West Virginia | | | | | | Eastern West Virginia | | |

| | | | | | | Reno | | | | | | | | | | | | Savannah | | | | | | | | | | | | | | |

| Arkansas | | | | | | Northwest Arkansas | | | | | | | | | | | | Greensboro/Winston-Salem | | | | | | | | | | | | | | |

| Oklahoma | | | | | | Oklahoma City | | | | | | | | | | | | New Bern/Greenville | | | | | | | | | | | | | | |

| Texas | | | | | | Abilene | | | | | | | | | | | | Wilmington | | | | | | | | | | | | | | |

| | | | | | | Beaumont | | | | | | | | | | | | Columbia | | | | | | | | | | | | | | |

| | | | | | | Dallas | | | | | | | | | | | | Myrtle Beach | | | | | | | | | | | | | | |

| | | | | | | Houston | | | | | | | | | | | | Memphis | | | | | | | | | | | | | | |

| | | | | | | Lubbock | | | | | | | | | | | | Northeast Tennessee | | | | | | | | | | | | | | |

We began to see improvements in our construction cycle time in fiscal 2023 and expect our cycle times to return to normalized levels during fiscal 2024.

We completed the construction of most homes in three to eight months in fiscal 2023.

We offer various floor plans and product types with a primary focus on the first time and first time move-up homebuyer which accounts for the majority of our home closings.

We also offer entry-level homes for buyers focused on affordability, higher-end move-up and luxury homes and homes for active adult buyers seeking a low-maintenance lifestyle.

We host events and challenges, both virtually and in person, to encourage our employees to stay active and healthy.

During fiscal 2023, we published our inaugural ESG report, which included data aligned with the homebuilders industry reporting standards prepared by the Sustainability Accounting Standards Board, now a part of the International Sustainability Standards Board.

- Risk management;

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

Our position as the most geographically diverse and largest volume homebuilder in the United States provides a strong platform for us to compete for new home sales.

At September 30, 2022, we owned 63% of Forestar’s outstanding common stock.

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

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

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

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

| | | | | | | Fort Collins | | | | | | | | | | | | Pensacola/Panama City | | |

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

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

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

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

| | | | | | | Seattle/Tacoma/Everett/Olympia | | | | | | | | | | | | Lake Charles/Lafayette | | |

| | | | | | | Spokane | | | | | | Mississippi | | | | | | Gulf Coast | | |

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

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

| Arizona | | | | | | Phoenix | | | | | | | | | | | | Augusta | | |

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

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

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

| | | | | | | Los Angeles County | | | | | | | | | | | | Greensboro/Winston-Salem | | |

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

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

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

| Oklahoma | | | | | | Oklahoma City | | | | | | | | | | | | Nashville | | |

| | | | | | | Tulsa | | | | | | | | | | | | | | |

| Texas | | | | | | Austin | | | | | | | | | | | | North Region | | |

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

| | | | | | | Corpus Christi | | | | | | Illinois | | | | | | Chicago | | |

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

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

| | | | | | | Huntsville | | | | | | New Jersey | | | | | | Northern New Jersey | | |

| | | | | | | Mobile/Baldwin County | | | | | | | | | | | | Southern New Jersey | | |

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

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

| | | | | | | Gainesville | | | | | | | | | | | | Philadelphia | | |

| | | | | | | Jacksonville | | | | | | Virginia | | | | | | Northern Virginia | | |

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

- Selecting home construction subcontractors and ensuring their work meets our contracted scopes;

Although we purchase and develop land primarily to support our homebuilding activities, we may sell land and lots to other developers and homebuilders where we have excess land and lot positions or for other strategic reasons.

In fiscal 2014, we received Notices of Violation from the United States Environmental Protection Agency (EPA), the Alabama Department of Environmental Management and the State of South Carolina Department of Health and Environmental Control related to stormwater compliance at certain of our sites in the southeastern United States within EPA Region 4.

Since 2014, we have enhanced our practices and procedures related to stormwater compliance, and we are currently in discussions to resolve these matters.

The resolution of these matters is expected to result in a monetary payment, an agreement to complete a supplemental environmental project that is intended to provide a tangible environmental benefit and entry of a consent decree in EPA Region 4 providing for ongoing reporting obligations and stipulated penalties for any future noncompliance with the consent decree.

Collectively, these amounts may exceed $1 million.

However, we do not believe it is reasonably possible that this matter would result in a loss that would have a material effect on our consolidated financial position, results of operations or cash flows.

For the Fiscal Year Ended September 30, [removed: 2022][added: 2023]

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [removed: (§ 232.405] [added: (§232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

As of March 31, [removed: 2022,] [added: 2023,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately [removed: $26.1] [added: $32.9] billion based on the closing price as reported on the New York Stock Exchange.

As of November [removed: 10, 2022,] [added: 13, 2023,] there were [removed: 344,341,227] [added: 333,184,374] shares of the registrant’s common stock outstanding.

Portions of the registrant’s definitive Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders are incorporated herein by reference (to the extent indicated) in Part III.

[removed: 2022] [added: 2023] ANNUAL REPORT ON FORM 10-K

| [ITEM [removed: 1.](#i487a4a0ac4ad49c6998b5471f4719718_16)] [added: 1.](#i2a63eef357a04405ab2ee14cf29fc072_16)] | | | [removed: [Business](#i487a4a0ac4ad49c6998b5471f4719718_16)] [added: [Business](#i2a63eef357a04405ab2ee14cf29fc072_16)] | | | [removed: [1](#i487a4a0ac4ad49c6998b5471f4719718_16)] [added: [1](#i2a63eef357a04405ab2ee14cf29fc072_16)] | | |

| [ITEM [removed: 1A.](#i487a4a0ac4ad49c6998b5471f4719718_19)] [added: 1A.](#i2a63eef357a04405ab2ee14cf29fc072_19)] | | | [Risk [removed: Factors](#i487a4a0ac4ad49c6998b5471f4719718_19)] [added: Factors](#i2a63eef357a04405ab2ee14cf29fc072_19)] | | | [removed: [13](#i487a4a0ac4ad49c6998b5471f4719718_19)] [added: [13](#i2a63eef357a04405ab2ee14cf29fc072_19)] | | |

| [ITEM [removed: 1B.](#i487a4a0ac4ad49c6998b5471f4719718_22)] [added: 1B.](#i2a63eef357a04405ab2ee14cf29fc072_22)] | | | [Unresolved Staff [removed: Comments](#i487a4a0ac4ad49c6998b5471f4719718_22)] [added: Comments](#i2a63eef357a04405ab2ee14cf29fc072_22)] | | | [removed: [26](#i487a4a0ac4ad49c6998b5471f4719718_22)] [added: [26](#i2a63eef357a04405ab2ee14cf29fc072_22)] | | |

| [ITEM [removed: 2.](#i487a4a0ac4ad49c6998b5471f4719718_25)] [added: 2.](#i2a63eef357a04405ab2ee14cf29fc072_25)] | | | [removed: [Properties](#i487a4a0ac4ad49c6998b5471f4719718_25)] [added: [Properties](#i2a63eef357a04405ab2ee14cf29fc072_25)] | | | [removed: [26](#i487a4a0ac4ad49c6998b5471f4719718_25)] [added: [26](#i2a63eef357a04405ab2ee14cf29fc072_25)] | | |

| [ITEM [removed: 3.](#i487a4a0ac4ad49c6998b5471f4719718_28)] [added: 3.](#i2a63eef357a04405ab2ee14cf29fc072_28)] | | | [Legal [removed: Proceedings](#i487a4a0ac4ad49c6998b5471f4719718_28)] [added: Proceedings](#i2a63eef357a04405ab2ee14cf29fc072_28)] | | | [removed: [26](#i487a4a0ac4ad49c6998b5471f4719718_28)] [added: [26](#i2a63eef357a04405ab2ee14cf29fc072_28)] | | |

| [ITEM [removed: 4.](#i487a4a0ac4ad49c6998b5471f4719718_31)] [added: 4.](#i2a63eef357a04405ab2ee14cf29fc072_31)] | | | [Mine Safety [removed: Disclosures](#i487a4a0ac4ad49c6998b5471f4719718_31)] [added: Disclosures](#i2a63eef357a04405ab2ee14cf29fc072_31)] | | | [removed: [26](#i487a4a0ac4ad49c6998b5471f4719718_31)] [added: [26](#i2a63eef357a04405ab2ee14cf29fc072_31)] | | |

| [ITEM [removed: 5.](#i487a4a0ac4ad49c6998b5471f4719718_37)] [added: 5.](#i2a63eef357a04405ab2ee14cf29fc072_37)] | | | [Market for Registrant’s Common Equity, Related Stockholder [removed: Matters](#i487a4a0ac4ad49c6998b5471f4719718_37)] [added: Matters](#i2a63eef357a04405ab2ee14cf29fc072_37)] [and Issuer Purchases of Equity [removed: Securities](#i487a4a0ac4ad49c6998b5471f4719718_37)] [added: Securities](#i2a63eef357a04405ab2ee14cf29fc072_37)] | | | [removed: [27](#i487a4a0ac4ad49c6998b5471f4719718_37)] [added: [27](#i2a63eef357a04405ab2ee14cf29fc072_37)] | | |

| [ITEM [removed: 6.](#i487a4a0ac4ad49c6998b5471f4719718_40)] [added: 6.](#i2a63eef357a04405ab2ee14cf29fc072_40)] | | | [removed: [\[Reserved\]](#i487a4a0ac4ad49c6998b5471f4719718_40)] [added: [\[Reserved\]](#i2a63eef357a04405ab2ee14cf29fc072_40)] | | | [removed: [28](#i487a4a0ac4ad49c6998b5471f4719718_40)] [added: [28](#i2a63eef357a04405ab2ee14cf29fc072_40)] | | |

| [ITEM [removed: 7.](#i487a4a0ac4ad49c6998b5471f4719718_43)] [added: 7.](#i2a63eef357a04405ab2ee14cf29fc072_43)] | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i487a4a0ac4ad49c6998b5471f4719718_43)] [added: Operations](#i2a63eef357a04405ab2ee14cf29fc072_43)] | | | [removed: [29](#i487a4a0ac4ad49c6998b5471f4719718_43)] [added: [29](#i2a63eef357a04405ab2ee14cf29fc072_43)] | | |

| [ITEM [removed: 7A.](#i487a4a0ac4ad49c6998b5471f4719718_94)] [added: 7A.](#i2a63eef357a04405ab2ee14cf29fc072_94)] | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i487a4a0ac4ad49c6998b5471f4719718_94)] [added: Risk](#i2a63eef357a04405ab2ee14cf29fc072_94)] | | | [removed: [59](#i487a4a0ac4ad49c6998b5471f4719718_94)] [added: [60](#i2a63eef357a04405ab2ee14cf29fc072_94)] | | |

| [ITEM [removed: 8.](#i487a4a0ac4ad49c6998b5471f4719718_100)] [added: 8.](#i2a63eef357a04405ab2ee14cf29fc072_97)] | | | [Financial Statements and Supplementary [removed: Data](#i487a4a0ac4ad49c6998b5471f4719718_100)] [added: Data](#i2a63eef357a04405ab2ee14cf29fc072_97)] | | | [removed: [60](#i487a4a0ac4ad49c6998b5471f4719718_100)] [added: [61](#i2a63eef357a04405ab2ee14cf29fc072_97)] | | |

| [ITEM [removed: 9.](#i487a4a0ac4ad49c6998b5471f4719718_160)] [added: 9.](#i2a63eef357a04405ab2ee14cf29fc072_160)] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i487a4a0ac4ad49c6998b5471f4719718_160)] [added: Disclosure](#i2a63eef357a04405ab2ee14cf29fc072_160)] | | | [removed: [106](#i487a4a0ac4ad49c6998b5471f4719718_160)] [added: [106](#i2a63eef357a04405ab2ee14cf29fc072_160)] | | |

| [ITEM [removed: 9A.](#i487a4a0ac4ad49c6998b5471f4719718_163)] [added: 9A.](#i2a63eef357a04405ab2ee14cf29fc072_163)] | | | [Controls and [removed: Procedures](#i487a4a0ac4ad49c6998b5471f4719718_163)] [added: Procedures](#i2a63eef357a04405ab2ee14cf29fc072_163)] | | | [removed: [106](#i487a4a0ac4ad49c6998b5471f4719718_163)] [added: [106](#i2a63eef357a04405ab2ee14cf29fc072_163)] | | |

| [ITEM [removed: 9B.](#i487a4a0ac4ad49c6998b5471f4719718_169)] [added: 9B.](#i2a63eef357a04405ab2ee14cf29fc072_169)] | | | [Other [removed: Information](#i487a4a0ac4ad49c6998b5471f4719718_169)] [added: Information](#i2a63eef357a04405ab2ee14cf29fc072_169)] | | | [removed: [106](#i487a4a0ac4ad49c6998b5471f4719718_169)] [added: [106](#i2a63eef357a04405ab2ee14cf29fc072_169)] | | |

| [ITEM [removed: 9C.](#i487a4a0ac4ad49c6998b5471f4719718_2138)] [added: 9C.](#i2a63eef357a04405ab2ee14cf29fc072_172)] | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i487a4a0ac4ad49c6998b5471f4719718_2138)] [added: Inspections](#i2a63eef357a04405ab2ee14cf29fc072_172)] | | | [removed: [106](#i487a4a0ac4ad49c6998b5471f4719718_2138)] [added: [106](#i2a63eef357a04405ab2ee14cf29fc072_172)] | | |

| [ITEM [removed: 10.](#i487a4a0ac4ad49c6998b5471f4719718_175)] [added: 10.](#i2a63eef357a04405ab2ee14cf29fc072_178)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i487a4a0ac4ad49c6998b5471f4719718_175)] [added: Governance](#i2a63eef357a04405ab2ee14cf29fc072_178)] | | | [removed: [107](#i487a4a0ac4ad49c6998b5471f4719718_175)] [added: [107](#i2a63eef357a04405ab2ee14cf29fc072_178)] | | |

| [ITEM [removed: 11.](#i487a4a0ac4ad49c6998b5471f4719718_178)] [added: 11.](#i2a63eef357a04405ab2ee14cf29fc072_181)] | | | [Executive [removed: Compensation](#i487a4a0ac4ad49c6998b5471f4719718_178)] [added: Compensation](#i2a63eef357a04405ab2ee14cf29fc072_181)] | | | [removed: [107](#i487a4a0ac4ad49c6998b5471f4719718_178)] [added: [107](#i2a63eef357a04405ab2ee14cf29fc072_181)] | | |

| [ITEM [removed: 12.](#i487a4a0ac4ad49c6998b5471f4719718_181)] [added: 12.](#i2a63eef357a04405ab2ee14cf29fc072_184)] | | | [Security Ownership of Certain Beneficial Owners and [removed: Management](#i487a4a0ac4ad49c6998b5471f4719718_181)] [added: Management](#i2a63eef357a04405ab2ee14cf29fc072_184)] [and Related Stockholder [removed: Matters](#i487a4a0ac4ad49c6998b5471f4719718_181)] [added: Matters](#i2a63eef357a04405ab2ee14cf29fc072_184)] | | | [removed: [107](#i487a4a0ac4ad49c6998b5471f4719718_181)] [added: [107](#i2a63eef357a04405ab2ee14cf29fc072_184)] | | |

| [ITEM [removed: 13.](#i487a4a0ac4ad49c6998b5471f4719718_184)] [added: 13.](#i2a63eef357a04405ab2ee14cf29fc072_187)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i487a4a0ac4ad49c6998b5471f4719718_184)] [added: Independence](#i2a63eef357a04405ab2ee14cf29fc072_187)] | | | [removed: [108](#i487a4a0ac4ad49c6998b5471f4719718_184)] [added: [108](#i2a63eef357a04405ab2ee14cf29fc072_187)] | | |

| [ITEM [removed: 14.](#i487a4a0ac4ad49c6998b5471f4719718_187)] [added: 14.](#i2a63eef357a04405ab2ee14cf29fc072_190)] | | | [Principal Accountant Fees and [removed: Services](#i487a4a0ac4ad49c6998b5471f4719718_187)] [added: Services](#i2a63eef357a04405ab2ee14cf29fc072_190)] | | | [removed: [108](#i487a4a0ac4ad49c6998b5471f4719718_187)] [added: [108](#i2a63eef357a04405ab2ee14cf29fc072_190)] | | |

| [ITEM [removed: 15.](#i487a4a0ac4ad49c6998b5471f4719718_193)] [added: 15.](#i2a63eef357a04405ab2ee14cf29fc072_196)] | | | [Exhibits and Financial Statement [removed: Schedules](#i487a4a0ac4ad49c6998b5471f4719718_193)] [added: Schedules](#i2a63eef357a04405ab2ee14cf29fc072_196)] | | | [removed: [109](#i487a4a0ac4ad49c6998b5471f4719718_193)] [added: [109](#i2a63eef357a04405ab2ee14cf29fc072_196)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| | | | [PART I](#i2a63eef357a04405ab2ee14cf29fc072_13) | | | | | |

| | | | [PART II](#i2a63eef357a04405ab2ee14cf29fc072_34) | | | | | |

| | | | | | | | | |

| | | | [PART III](#i2a63eef357a04405ab2ee14cf29fc072_175) | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | [PART IV](#i2a63eef357a04405ab2ee14cf29fc072_193) | | | | | |

| | | | | | | | | |

| [ITEM 16.](#i2a63eef357a04405ab2ee14cf29fc072_199) | | | [10-K Summary](#i2a63eef357a04405ab2ee14cf29fc072_199) | | | [114](#i2a63eef357a04405ab2ee14cf29fc072_199) | | |

| | | | | | | | | |

| [SIGNATURES](#i2a63eef357a04405ab2ee14cf29fc072_202) | | | | | | [115](#i2a63eef357a04405ab2ee14cf29fc072_202) | | |

| 5.750% Senior Notes due 2023 | | | | | | DHI 23A | | | | | | New York Stock Exchange | | |

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

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

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

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

| [ITEM 16.](#i487a4a0ac4ad49c6998b5471f4719718_196) | | | [10-K Summary](#i487a4a0ac4ad49c6998b5471f4719718_196) | | | [115](#i487a4a0ac4ad49c6998b5471f4719718_196) | | |

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

We also own office buildings totaling approximately [removed: 1.6] [added: 1.8] million square feet, and we lease approximately [removed: 730,000] [added: 780,000] square feet of office space under leases expiring through [removed: September 2027.][added: November 2028.]

These properties are located in our various operating markets to house our homebuilding, [removed: Forestar,] [added: rental, Forestar and] financial services [removed: and rental] operating divisions and our regional and corporate offices.

We own ranch land and improvements totaling [removed: 93,600] [added: 93,700] acres, most of which has been owned for over 20 years.

Our common stock is listed on the NYSE under the symbol “DHI.” As of November [removed: 10, 2022,] [added: 13, 2023,] the closing price of our common stock on the NYSE was [removed: $83.92,] [added: $122.32,] and there were approximately [removed: 274] [added: 265] holders of record.

In October [removed: 2022,] [added: 2023,] our Board of Directors approved a quarterly cash dividend of [removed: $0.25] [added: $0.30] per common share, payable on [removed: December 12, 2022,] [added: November 28, 2023,] to stockholders of record on [removed: December 2, 2022.][added: November 21, 2023.]

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 [removed: 20, 2022,] [added: 18, 2023,] and which replaced our prior $1.0 billion common stock repurchase authorization.

[removed: All] [added: The] share repurchases [removed: were made] [added: may be effected through Rule 10b5-1 plans or open market purchases, each] in [removed: accordance] [added: compliance] with [removed: the safe harbor provisions of] Rule 10b-18 under the Securities Exchange Act of 1934, as amended (Exchange Act).

At September 30, [removed: 2022,] [added: 2023,] our remaining stock repurchase authorization was [removed: $438.3] [added: $234.0] million.

The following table sets forth information concerning our common stock repurchases during the three months ended September 30, [removed: 2022.][added: 2023.]

| [added: Period] | | | [added: | | |] Total Number of Shares [removed: Purchased] [added: Purchased (1)] | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs [added: (1)] (In millions) | | |

During fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] 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: 2022,] [added: 2023,] 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: 2017] [added: 2018] and assumes that all dividends were reinvested.

[removed: ][added: ]

| | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | |

During fiscal 2023, we purchased 11.1 million shares of our common stock at a total cost, including commissions and excise taxes, of $1.2 billion.

Shares repurchased in July 2023 included 585,063 shares purchased pursuant to a trading plan under Rule 10b5-1 of the Exchange Act.

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

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

| July 2023 | | | | | | 975,998 | | | | | | $ | 123.21 | | | | | 975,998 | | | | | | $ | 536.9 | |

| August 2023 | | | | | | 2,066,704 | | | | | | 122.12 | | | | | | 2,066,704 | | | | | | 284.5 | | |

| September 2023 | | | | | | 429,116 | | | | | | 117.66 | | | | | | 429,116 | | | | | | 234.0 | | |

| Total | | | | | | 3,471,818 | | | | | | $ | 121.88 | | | | | 3,471,818 | | | | | | $ | 234.0 | |

_________________

(1) In October 2023, our Board of Directors authorized the repurchase of up to $1.5 billion of our common stock, replacing the previous authorization, which at that time had only $32.8 million remaining due to repurchases made subsequent to our fiscal year end.

| D.R. Horton, Inc. | | | $ | 100.00 | | | | | $ | 126.81 | | | | | $ | 184.21 | | | | | $ | 206.46 | | | | | $ | 167.44 | | | | | $ | 269.80 | |

| S&P 500 Index | | | 100.00 | | | | | | 104.25 | | | | | | 120.05 | | | | | | 156.07 | | | | | | 131.92 | | | | | | 160.44 | | |

| S&P 1500 Homebuilding Index | | | 100.00 | | | | | | 134.28 | | | | | | 178.85 | | | | | | 200.85 | | | | | | 159.09 | | | | | | 259.68 | | |

During fiscal 2022, we purchased 14.0 million shares of our common stock for $1.1 billion.

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 | | |

| [Reports of Independent Registered Public Accounting [removed: Firm](#i487a4a0ac4ad49c6998b5471f4719718_97)] [added: Firm](#i2a63eef357a04405ab2ee14cf29fc072_100)] (PCAOB ID: 42) | | | [removed: [61](#i487a4a0ac4ad49c6998b5471f4719718_97)] [added: [62](#i2a63eef357a04405ab2ee14cf29fc072_100)] | | |

| [Consolidated Balance [removed: Sheets](#i487a4a0ac4ad49c6998b5471f4719718_103)] [added: Sheets](#i2a63eef357a04405ab2ee14cf29fc072_103)] | | | [removed: [64](#i487a4a0ac4ad49c6998b5471f4719718_103)] [added: [65](#i2a63eef357a04405ab2ee14cf29fc072_103)] | | |

| [Consolidated Statements of [removed: Operations](#i487a4a0ac4ad49c6998b5471f4719718_106)] [added: Operations](#i2a63eef357a04405ab2ee14cf29fc072_106)] | | | [removed: [65](#i487a4a0ac4ad49c6998b5471f4719718_106)] [added: [66](#i2a63eef357a04405ab2ee14cf29fc072_106)] | | |

| [Consolidated Statements of Total [removed: Equity](#i487a4a0ac4ad49c6998b5471f4719718_109)] [added: Equity](#i2a63eef357a04405ab2ee14cf29fc072_109)] | | | [removed: [66](#i487a4a0ac4ad49c6998b5471f4719718_109)] [added: [67](#i2a63eef357a04405ab2ee14cf29fc072_109)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i487a4a0ac4ad49c6998b5471f4719718_112)] [added: Flows](#i2a63eef357a04405ab2ee14cf29fc072_112)] | | | [removed: [67](#i487a4a0ac4ad49c6998b5471f4719718_112)] [added: [68](#i2a63eef357a04405ab2ee14cf29fc072_112)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i487a4a0ac4ad49c6998b5471f4719718_115)] [added: Statements](#i2a63eef357a04405ab2ee14cf29fc072_115)] | | | [removed: [69](#i487a4a0ac4ad49c6998b5471f4719718_115)] [added: [70](#i2a63eef357a04405ab2ee14cf29fc072_115)] | | |

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

We have audited the accompanying consolidated balance sheets of D.R. Horton, Inc. and subsidiaries (the Company) as of September 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, total equity and cash flows for each of the three years in the period ended September 30, [removed: 2022,] [added: 2023,] 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, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2022,] [added: 2023,] 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, [removed: 2022] [added: 2023,] 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 [removed: 18, 2022] [added: 17, 2023] expressed an unqualified opinion thereon.

| [added: | | |] Estimation of reserves for construction defect matters | | | [removed: | | |]

| *Description of the Matter* | | | At September 30, [removed: 2022,] [added: 2023,] the Company’s reserve for legal claims related to construction defect matters was [removed: $724.8] [added: $832.3] 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. | | |

We have audited D.R. Horton, Inc. and subsidiaries’ internal control over financial reporting as of September 30, [removed: 2022,] [added: 2023,] 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, [removed: 2022,] [added: 2023,] 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, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, total [removed: equity,] [added: equity] and cash flows for each of the three years in the period ended September 30, [removed: 2022,] [added: 2023,] and the related notes and our report dated November [removed: 18, 2022] [added: 17, 2023] expressed an unqualified opinion thereon.

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

| | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | $ | [removed: 2,540.5] [added: 3,873.6] | | | | | $ | [removed: 3,210.4] [added: 2,540.5] | |

| Restricted cash | | | [removed: 32.4] [added: 26.5] | | | | | | [removed: 26.8] [added: 32.4] | | |

| Total cash, cash equivalents and restricted cash | | | [removed: 2,572.9] [added: 3,900.1] | | | | | | [removed: 3,237.2] [added: 2,572.9] | | |

| Construction in progress and finished homes | | | [removed: 9,798.2] [added: 9,001.4] | | | | | | [removed: 7,739.2] [added: 9,798.2] | | |

| Residential land and lots — developed and under development | | | [removed: 9,173.1] [added: 10,621.9] | | | | | | [removed: 7,781.8] [added: 9,173.1] | | |

| Land held for development | | | [removed: 110.8] [added: 50.0] | | | | | | [removed: 110.9] [added: 110.8] | | |

| Land held for sale | | | [removed: 29.4] [added: 8.7] | | | | | | [removed: 25.4] [added: 29.4] | | |

| Rental properties | | | [removed: 2,544.2] [added: 2,691.3] | | | | | | [removed: 821.8] [added: 2,544.2] | | |

| Total inventory | | | [removed: 21,655.7] [added: 22,373.3] | | | | | | [removed: 16,479.1] [added: 21,655.7] | | |

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

| Deferred income taxes, net of valuation allowance of [removed: $17.9] [added: $14.8] million and [removed: $4.2] [added: $17.9] million at September 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | [removed: 141.1] [added: 187.2] | | | | | | [removed: 155.3] [added: 141.1] | | |

| Property and equipment, net | | | [removed: 471.6] [added: 445.4] | | | | | | [removed: 392.9] [added: 471.6] | | |

| Other assets | | | [removed: 2,960.3] [added: 2,993.0] | | | | | | [removed: 1,560.6] [added: 2,960.3] | | |

| Total assets | | | $ | [removed: 30,351.1] [added: 32,582.4] | | | | | $ | [removed: 24,015.9] [added: 30,351.1] | |

| Accounts payable | | | $ | [removed: 1,360.3] [added: 1,246.2] | | | | | $ | [removed: 1,177.0] [added: 1,360.3] | |

| Accrued expenses and other liabilities | | | [removed: 3,138.3] [added: 3,103.8] | | | | | | [removed: 2,210.3] [added: 3,138.3] | | |

| Notes payable | | | [removed: 6,066.9] [added: 5,094.5] | | | | | | [removed: 5,412.4] [added: 6,066.9] | | |

| Total liabilities | | | [removed: 10,565.5] [added: 9,444.5] | | | | | | [removed: 8,799.7] [added: 10,565.5] | | |

| Common stock, $.01 par value, 1,000,000,000 shares authorized, [removed: 399,172,937] [added: 401,202,253] shares issued and [removed: 343,953,023] [added: 334,848,565] shares outstanding at September 30, [removed: 2022] [added: 2023] and [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] | | | 4.0 | | | | | | 4.0 | | |

| Additional paid-in capital | | | [removed: 3,349.5] [added: 3,432.2] | | | | | | [removed: 3,274.8] [added: 3,349.5] | | |

| Retained earnings | | | [removed: 19,185.3] [added: 23,589.8] | | | | | | [removed: 13,644.3] [added: 19,185.3] | | |

| Treasury stock, [removed: 55,219,914] [added: 66,353,688] shares and [removed: 41,174,257] [added: 55,219,914] shares at September 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively, at cost | | | [removed: (3,142.5)] [added: (4,329.8)] | | | | | | [removed: (2,036.6)] [added: (3,142.5)] | | |

| Stockholders’ equity | | | [removed: 19,396.3] [added: 22,696.2] | | | | | | [removed: 14,886.5] [added: 19,396.3] | | |

November 17, 2023

November 17, 2023

| | | | 2023 | | | | | | 2022 | | |

| See accompanying notes to consolidated financial statements. | | | | | | | | | | | | | | | | | |

| Net income | | | — | | | | | | — | | | | | | 4,745.7 | | | | | | — | | | | | | 49.5 | | | | | | 4,795.2 | | |

| Balances at September 30, 2023 (334,848,565 shares) | | | $ | 4.0 | | | | | $ | 3,432.2 | | | | | $ | 23,589.8 | | | | | $ | (4,329.8) | | | | | $ | 441.7 | | | | | $ | 23,137.9 | |

| See accompanying notes to consolidated financial statements. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| See accompanying notes to consolidated financial statements. | | | | | | | | | | | | | | | | | |

In December 2022, the Company acquired the homebuilding operations of Riggins Custom Homes in Northwest Arkansas for approximately $107 million in cash.

The assets acquired included approximately 170 homes in inventory and 3,000 lots.

In June 2023, the Company acquired the homebuilding operations of Truland Homes for approximately $110 million in cash.

Truland Homes operates in Baldwin County, Alabama and Northwest Florida.

The assets acquired included approximately 155 homes in inventory and 620 lots.

The Company also acquired control of approximately 660 additional lots through land purchase contracts.

The purchase price was recorded to inventory, and no goodwill was recorded as a result of this transaction.

| | | | 2023 | | | | | | 2022 | | |

The accounting for

| | | | | | | September 30, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | | | | $ | 2,920.2 | | | | | $ | 136.1 | | | | | $ | 616.0 | | | | | $ | 189.1 | | | | | $ | 12.2 | | | | | $ | 3,873.6 | |

| Restricted cash | | | | | | 6.5 | | | | | | 3.3 | | | | | | — | | | | | | 16.7 | | | | | | — | | | | | | 26.5 | | |

| Rental properties | | | | | | — | | | | | | 2,708.4 | | | | | | — | | | | | | — | | | | | | (17.1) | | | | | | 2,691.3 | | |

| | | | | | | 18,155.8 | | | | | | 2,708.4 | | | | | | 1,790.3 | | | | | | — | | | | | | (281.2) | | | | | | 22,373.3 | | |

| Property and equipment, net | | | | | | 415.0 | | | | | | 2.4 | | | | | | 5.9 | | | | | | 4.1 | | | | | | 18.0 | | | | | | 445.4 | | |

| Other assets | | | | | | 2,838.5 | | | | | | 29.8 | | | | | | 58.5 | | | | | | 250.3 | | | | | | (184.1) | | | | | | 2,993.0 | | |

| | | | | | | $ | 24,700.1 | | | | | $ | 2,860.1 | | | | | $ | 2,470.7 | | | | | $ | 2,980.1 | | | | | $ | (428.6) | | | | | $ | 32,582.4 | |

| Accounts payable | | | | | | $ | 1,033.7 | | | | | $ | 698.6 | | | | | $ | 68.4 | | | | | $ | 0.1 | | | | | $ | (554.6) | | | | | $ | 1,246.2 | |

| Accrued expenses and other liabilities | | | | | | 2,585.5 | | | | | | 43.2 | | | | | | 337.4 | | | | | | 280.4 | | | | | | (142.7) | | | | | | 3,103.8 | | |

| Notes payable | | | | | | 2,329.9 | | | | | | 400.0 | | | | | | 695.0 | | | | | | 1,669.6 | | | | | | — | | | | | | 5,094.5 | | |

| | | | | | | $ | 5,949.1 | | | | | $ | 1,141.8 | | | | | $ | 1,100.8 | | | | | $ | 1,950.1 | | | | | $ | (697.3) | | | | | $ | 9,444.5 | |

| | | | | | | Homebuilding | | | | | | Rental | | | | | | Forestar | | | | | | Financial Services | | | | | | Eliminations and Other (1) | | | | | | Consolidated | | |

| | | | | | | Homebuilding | | | | | | Rental | | | | | | Forestar | | | | | | Financial Services | | | | | | Eliminations and Other (1) | | | | | | Consolidated | | |

| | | | | | | 31,743.2 | | | | | | 2,605.5 | | | | | | 1,436.9 | | | | | | 801.5 | | | | | | (1,126.7) | | | | | | 35,460.4 | | |

| Home sales (2) | | | | | | 24,201.3 | | | | | | — | | | | | | — | | | | | | — | | | | | | (248.5) | | | | | | 23,952.8 | | |

| Land/lot sales and other | | | | | | 53.8 | | | | | | — | | | | | | 1,108.9 | | | | | | — | | | | | | (959.9) | | | | | | 202.8 | | |

| Inventory and land option charges | | | | | | 60.7 | | | | | | 6.7 | | | | | | 24.0 | | | | | | — | | | | | | (11.1) | | | | | | 80.3 | | |

| | | | | | | 24,315.8 | | | | | | 1,893.5 | | | | | | 1,132.9 | | | | | | — | | | | | | (1,232.2) | | | | | | 26,110.0 | | |

| Selling, general and administrative expense | | | | | | 2,239.9 | | | | | | 290.2 | | | | | | 97.7 | | | | | | 594.9 | | | | | | 26.1 | | | | | | 3,248.8 | | |

| Other (income) expense | | | | | | (78.8) | | | | | | (102.4) | | | | | | (15.3) | | | | | | (76.7) | | | | | | 60.1 | | | | | | (213.1) | | |

| Income before income taxes | | | | | | $ | 5,266.3 | | | | | $ | 524.2 | | | | | $ | 221.6 | | | | | $ | 283.3 | | | | | $ | 19.3 | | | | | $ | 6,314.7 | |

| Depreciation and amortization | | | | | | $ | 64.0 | | | | | $ | 2.4 | | | | | $ | 3.0 | | | | | $ | 2.1 | | | | | $ | 20.1 | | | | | $ | 91.6 | |

November 18, 2022

| Balances at September 30, 2019 (368,431,454 shares) | | | $ | 3.9 | | | | | $ | 3,179.1 | | | | | $ | 7,640.1 | | | | | $ | (802.2) | | | | | $ | 274.2 | | | | | $ | 10,295.1 | |

| Net income | | | — | | | | | | — | | | | | | 2,373.7 | | | | | | — | | | | | | 6.8 | | | | | | 2,380.5 | | |

| Distributions to noncontrolling interests | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (0.7) | | | | | | (0.7) | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

There were no variable interest entities consolidated in the Company’s balance sheet at September 30, 2021.

In April 2022, the Company and Vidler Water Resources, Inc. (Vidler) entered into a definitive merger agreement pursuant to which the Company would acquire all of the outstanding shares of Vidler for $15.75 per share in an all-cash transaction.

Under the terms of the merger agreement, in May 2022, the Company completed a tender offer and acquired all of the outstanding shares for a total purchase price of $290.5 million.

The Company’s allocation of the purchase price to the assets, liabilities and noncontrolling interest acquired is as follows (in millions):

| | | | | | | | | |

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

| Deferred income taxes, net of valuation allowance of $15.8 million | | | | | | 14.8 | | |

| Total assets | | | | | | 313.9 | | |

| Other liabilities | | | | | | 5.4 | | |

| Total liabilities | | | | | | 5.4 | | |

| Noncontrolling interest | | | | | | 18.0 | | |

| Net assets acquired | | | | | | $ | 290.5 | |

_____________________________________

If the carrying value

Additionally, the Company may have the ability to recover a portion of its losses from its subcontractors and their insurance carriers when the Company has been named as an additional insured on their insurance policies.

losses and tax credit carryforwards.

Pending Accounting Standards

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued.

The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022.

In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance.

The Company will adopt these standards when LIBOR is discontinued and does not expect them to have a material impact on its consolidated financial statements or related disclosures.

In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606, “Revenue from Contracts with Customers,” to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination.

ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date.

The guidance is effective for the Company beginning October 1, 2023, with early adoption permitted.

The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

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

(1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

| | | | | | | September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | | | | $ | 2,950.1 | | | | | $ | 153.6 | | | | | $ | 79.0 | | | | | $ | 16.8 | | | | | $ | 10.9 | | | | | $ | 3,210.4 | |

| Restricted cash | | | | | | 8.4 | | | | | | — | | | | | | 18.0 | | | | | | 0.4 | | | | | | — | | | | | | 26.8 | | |

| Rental properties | | | | | | — | | | | | | — | | | | | | — | | | | | | 840.9 | | | | | | (19.1) | | | | | | 821.8 | | |

| | | | | | | 13,907.8 | | | | | | 1,905.2 | | | | | | — | | | | | | 840.9 | | | | | | (174.8) | | | | | | 16,479.1 | | |

| Property and equipment, net | | | | | | 303.3 | | | | | | 2.9 | | | | | | 3.5 | | | | | | 0.6 | | | | | | 82.6 | | | | | | 392.9 | | |

| Other assets | | | | | | 1,468.7 | | | | | | 40.0 | | | | | | 107.6 | | | | | | 6.3 | | | | | | (62.0) | | | | | | 1,560.6 | | |

| | | | | | | $ | 18,931.8 | | | | | $ | 2,101.7 | | | | | $ | 2,235.4 | | | | | $ | 865.0 | | | | | $ | (118.0) | | | | | $ | 24,015.9 | |

Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures as of September 30, [removed: 2022] [added: 2023] 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: 2022] [added: 2023] 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: 2022.][added: 2023.]

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: 2022,] [added: 2023,] as stated in their report included herein.

During the three months ended September 30, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

None.

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: 2023] [added: 2024] 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: 2023] [added: 2024] Annual Meeting of Stockholders and incorporated herein by reference.

The following table summarizes our equity compensation plans as of September 30, [removed: 2022.][added: 2023.]

(3)Amount includes [removed: 2,550,543] [added: 2,406,583] shares reserved for issuance under the Company’s Employee Stock Purchase Plan.

Under the Employee Stock Purchase Plan, employees purchased [removed: 164,193] [added: 143,960] shares of common stock in fiscal [removed: 2022.][added: 2023.]

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: 2023] [added: 2024] Annual Meeting of Stockholders and incorporated herein by reference.

| Equity compensation plans approved by stockholders | | | 4,576,588 | | | (1) | | | | | | $ | 23.86 | | (2) | | | | | | 6,983,171 | | | (3) | | |

| Total | | | 4,576,588 | | | | | | | | | $ | 23.86 | | | | | | | | 6,983,171 | | | | | |

| Equity compensation plans approved by stockholders | | | 5,439,580 | | | (1) | | | | | | $ | 23.84 | | (2) | | | | | | 7,990,123 | | | (3) | | |

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

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: 2023] [added: 2024] 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: 2023] [added: 2024] Annual Meeting of Stockholders and incorporated herein by reference.

| 3.2 | | | | | | | | | [Amended and Restated [removed: Bylaws (incorporated] [added: Bylaws](http://www.sec.gov/Archives/edgar/data/882184/000119312517337236/d489193dex31.htm) [of the Company](http://www.sec.gov/Archives/edgar/data/882184/000119312517337236/d489193dex31.htm) [(incorporated] by reference from Exhibit 3.1 to the Company’s Current Report on Form 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 [removed: May 1, 2012, between] [added: October 10, 2019, among the] Company and [removed: American Stock Transfer &] [added: Branch Banking and] Trust Company, [removed: LLC,] as [removed: Trustee (incorporated] [added: trustee](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm) [](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm)[(incorporated] by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on [removed: May 4, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512198160/d343547dex41.htm)] [added: October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm)] | | |

| [removed: 4.3] [added: 4.4] | | | | | | | | | [Second Supplemental Indenture, dated as of [removed: September 14, 2012,] [added: May 5, 2020,] among the Company, the [removed: Guarantors] [added: guarantors] named therein and [removed: American Stock Transfer &] [added: Branch Banking and] Trust Company, [removed: LLC,] as [removed: Trustee,] [added: trustee,] relating to the [removed: 4.375%] [added: 2.600%] Senior Notes [removed: due 2022] [added: Due 2025] issued by the Company (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on [removed: September 17, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512393218/d412364dex41.htm)] [added: May 5, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000119312520133727/d792024dex41.htm)] | | |

| [removed: 4.4] [added: 4.3] | | | | | | | | | [removed: [Fourth] [added: [First] Supplemental Indenture, dated as of [removed: February 5, 2013,] [added: October 10, 2019,] among the Company, the [removed: Guarantors] [added: guarantors] named therein and [removed: American Stock Transfer &] [added: Branch Banking an](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex42.htm)[d] Trust Company, [removed: LLC,] as [removed: Trustee,] [added: trustee,] relating to the [removed: 4.750%] [added: 2.500%] Senior Notes [removed: due 2023] [added: Due 2024] issued by the Company (incorporated by reference from Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on [removed: February 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex42.htm)] [added: October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex42.htm)] | | |

| [removed: 4.5] [added: 4.7] | | | | | | | | | [Fifth Supplemental Indenture, dated as of [removed: February] [added: August] 5, [removed: 2013, among the Company,] [added: 2021, among](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm) [the Company](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm)[,] the [removed: Guarantors] [added: guarantors] named therein and [removed: American Stock Transfer &] [added: Truist Bank (formerly known as Branch Banking and] Trust [removed: Company, LLC,] [added: Company),] as trustee (incorporated by [removed: reference from Exhibit] [added: reference](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm) [from](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm) [Exhibit] 4.3 [removed: to] [added: of] the Company’s Current Report on Form 8-K filed with the SEC on [removed: February 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513046290/d484515dex43.htm)] [added: August 5, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm)] | | |

| 4.6 | | | | | | | | | [removed: [Sixth] [added: [Fourth] Supplemental Indenture, dated as of August 5, [removed: 2013, among the Company,] [added: 2021, among](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex41.htm) [the Company](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex41.htm)[,] the [removed: Guarantors] [added: guarantors] named therein and [removed: American Stock Transfer &] [added: Truist Bank (formerly known as Branch Banking and] Trust [removed: Company, LLC,] [added: Company),] as [removed: Trustee,] [added: trustee,] relating to the [removed: 5.750%] [added: 1.300%] Senior Notes [removed: Due 2023 issued by the Company] [added: due 2026 of D.R. Horton, Inc.] (incorporated by [removed: reference from Exhibit] [added: reference](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex41.htm) [from](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex41.htm) [Exhibit] 4.1 [removed: to] [added: of] the Company’s Current Report on Form 8-K filed with the SEC on August [removed: 8, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000119312513324904/d581912dex41.htm)] [added: 5, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex41.htm)] | | |

| [removed: 4.7] [added: 4.5] | | | | | | | | | [removed: [Tenth] [added: [Third] Supplemental Indenture, dated as of [removed: December 5, 2017,] [added: October 2, 2020,] among the Company, the [removed: Guarantors] [added: guarantors] named therein and [removed: American Stock Transfer &] [added: Truist Bank (formerly known as Branch Banking and] Trust [removed: Company, LLC,] [added: Company),] as [removed: trustee] [added: trustee, relating to the 1.400% Senior Notes Due 2027 issued by the Company] (incorporated by reference from Exhibit [removed: 4.2] [added: 4.1] to the Company’s Current Report on Form 8-K filed with the SEC on [removed: December 5, 2017).](http://www.sec.gov/Archives/edgar/data/882184/000119312517361588/d498980dex42.htm)] [added: October 2, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000119312520262510/d32970dex41.htm)] | | |

| [removed: 4.8] [added: 10.39] | | | | | | | | | [removed: [Eleventh Supplemental Indenture,] [added: [Amendment No. 9 to Credit Agreement,] dated [removed: as of] October [removed: 10, 2019,] [added: 2, 2019 by and] among the Company, [removed: the guarantors named therein, American Stock Transfer & Trust Company, LLC,] [added: Mizuho Bank, Ltd.,] as [removed: original trustee, and Branch Banking] [added: successor Administrative Agent,] and [removed: Trust Company, as series trustee] [added: the Lenders named therein] (incorporated by reference from Exhibit [removed: 4.3] [added: 10.1] to the Company’s Current Report on Form 8-K filed with the SEC on October [removed: 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex43.htm)] [added: 4, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519261783/d808352dex101.htm)] | | |

| 4.9 | | | | | | | | | [removed: [Senior Debt Securities Indenture,] [added: [Indenture,] dated as of [removed: October 10, 2019,] [added: April 21, 2021, by and] among [added: Forestar Group Inc.,] the [removed: Company and Branch Banking] [added: subsidiary guarantors party thereto] and [removed: Trust Company,] [added: U.S. Bank National Association,] as trustee (incorporated by reference from Exhibit 4.1 [removed: to the Company’s] [added: of Forestar’s] Current Report on Form 8-K filed with the SEC on [removed: October 10, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000119312519265816/d817968dex41.htm)] [added: April 21, 2021).](http://www.sec.gov/Archives/edgar/data/1406587/000119312521124943/d147723dex41.htm)] | | |

| [removed: 4.11] [added: 4.8] | | | | | | | | | [removed: [Second Supplemental Indenture,] [added: [Indenture,] dated as of [removed: May 5,] [added: February 25,] 2020, [added: by and] among [removed: the Company,] [added: Forestar Group Inc.,] the [added: subsidiary] guarantors [removed: named therein and Branch Banking] [added: party thereto] and [removed: Trust Company,] [added: U.S. Bank National Association,] as [removed: trustee, relating to the 2.600% Senior Notes Due 2025 issued by the Company] [added: trustee] (incorporated by reference from Exhibit 4.1 [removed: to the Company’s] [added: of Forestar’s] Current Report on Form 8-K filed with the SEC on [removed: May 5, 2020).](http://www.sec.gov/Archives/edgar/data/882184/000119312520133727/d792024dex41.htm)] [added: February 25, 2020).](http://www.sec.gov/Archives/edgar/data/1406587/000119312520047692/d884928dex41.htm)] | | |

| [removed: 4.12] [added: 10.61] | | | | | | | | | [removed: [Indenture,] [added: [Credit Agreement,] dated [removed: as of February 25, 2020, by and] [added: August 16, 2018,] among Forestar Group Inc., the [removed: subsidiary guarantors] [added: lenders] party thereto and [removed: U.S. Bank National Association,] [added: JPMorgan Chase Bank, N.A.,] as [removed: trustee] [added: administrative agent] (incorporated by reference to Exhibit [removed: 4.1] [added: 10.1] of Forestar’s Current Report on Form 8-K filed with the SEC on [removed: February 25, 2020).](http://www.sec.gov/Archives/edgar/data/1406587/000119312520047692/d884928dex41.htm)] [added: August 17, 2018).](http://www.sec.gov/Archives/edgar/data/1406587/000119312518251833/d606124dex101.htm)] | | |

| [removed: 4.14] [added: 4.10] | | | | | | | | | [Description of Securities (incorporated by reference from Exhibit 4.17 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2019, filed with the SEC on November 25, 2019).](http://www.sec.gov/Archives/edgar/data/882184/000088218419000147/a2019930-10kexhibit417.htm) | | |

| [removed: 4.15] [added: 10.63] | | | | | | | | | [removed: [Indenture,] [added: [Amendment No. 2 to Credit Agreement,] dated [removed: as of] April [removed: 21, 2021,] [added: 16, 2021] by and among Forestar Group Inc., [removed: the subsidiary guarantors party thereto and U.S. Bank National Association,] [added: JPMorgan Chase Bank, N.A.,] as [removed: trustee] [added: administrative agent, and the Lenders named therein] (incorporated by reference [removed: to] [added: from] Exhibit [removed: 4.1 of] [added: 10.1 to] Forestar’s Current Report on Form 8-K filed with the SEC on April [removed: 21, 2021).](http://www.sec.gov/Archives/edgar/data/1406587/000119312521124943/d147723dex41.htm)] [added: 20, 2021).](http://www.sec.gov/Archives/edgar/data/1406587/000119312521121860/d172122dex101.htm)] | | |

| [removed: 4.18] [added: 10.33] | | | | | | | | | [removed: [Fifth Supplemental Indenture,] [added: [Amendment No. 2 to Credit Agreement,] dated [removed: as of] August [removed: 5, 2021,] [added: 8, 2013 by and] among [removed: D.R. Horton, Inc.,] the [removed: guarantors named therein and Truist] [added: Company, The Royal] Bank [removed: (formerly known] [added: of Scotland PLC,] as [removed: Branch Banking] [added: Administrative Agent,] and [removed: Trust Company), as trustee] [added: the Lenders named therein] (incorporated by reference [removed: to] [added: from] Exhibit [removed: 4.3 of] [added: 10.1 to] the Company’s Current Report on Form 8-K filed with the SEC on August [removed: 5, 2021).](http://www.sec.gov/Archives/edgar/data/882184/000119312521237701/d201320dex43.htm)] [added: 13, 2013).](http://www.sec.gov/Archives/edgar/data/882184/000088218413000056/exhibit101.htm)] | | |

| 10.1 | | | | | | | | | [Form of Indemnification Agreement between the Company and each of its [removed: directors](#i487a4a0ac4ad49c6998b5471f4719718_1)] [added: directors](#i2a63eef357a04405ab2ee14cf29fc072_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) | | |

| [removed: 10.22] [added: 10.24] | | | † | | | | | | [Summary of Executive Compensation Notification - Chairman, CEO and Co-COOs (fiscal [removed: 2022)] [added: 2023)] (incorporated by reference from Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2021,] [added: 2022,] filed with the SEC on November 18, [removed: 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1023.htm)] [added: 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1023.htm)] | | |

| [removed: 10.23] [added: 10.27] | | | [removed: * †] [added: *†] | | | | | | [Summary of Executive Compensation Notification [removed: - Chairman, CEO] [added: -](https://www.sec.gov/Archives/edgar/data/882184/000088218423000115/a9302023exhibit1027execs.htm) [Executive](https://www.sec.gov/Archives/edgar/data/882184/000088218423000115/a9302023exhibit1027execs.htm) [Vice Chair, CEO, COO] and [removed: Co-COOs] [added: CFO] (fiscal [removed: 2023).](https://www.sec.gov/Archives/edgar/data/882184/000088218422000184/a9302022exhibit1023.htm)] [added: 2024).](https://www.sec.gov/Archives/edgar/data/882184/000088218423000115/a9302023exhibit1027execs.htm)] | | |

| [removed: 10.24] [added: 10.25] | | | † | | | | | | [Summary of Executive Compensation Notification - Other Executive Officer - CFO (fiscal [removed: 2022)] [added: 2023)] (incorporated by reference from Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2021,] [added: 2022,] filed with the SEC on November 18, [removed: 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1025.htm)] [added: 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1025.htm)] | | |

| 10.26 | | | † | | | | | | [Summary of Director, Committee and Chairperson Compensation (fiscal [removed: 2022)] [added: 2023)] (incorporated by reference from Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the year ended September 30, [removed: 2021,] [added: 2022,] filed with the SEC on November 18, [removed: 2021).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)] [added: 2022).](http://www.sec.gov/Archives/edgar/data/882184/000088218421000190/a9302021exhibit1027.htm)] | | |

| [removed: 10.27] [added: 10.28] | | | [removed: * †] [added: *†] | | | | | | [Summary of [removed: Director, Committee and Chairperson] [added: Director] Compensation (fiscal [removed: 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)] [added: 2024)](https://www.sec.gov/Archives/edgar/data/882184/000088218423000115/a9302023ex1028directors.htm).] | | |

| [removed: 10.28] [added: 10.30] | | | | | | | | | [Grantor Trust Agreement, dated June 21, 2002, by and between the Company and Wachovia Bank, National Association, as Trustee (incorporated by reference from Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2002, filed with the SEC on December 13, 2002).](http://www.sec.gov/Archives/edgar/data/882184/000093066102004301/dex1034.txt) | | |

| [removed: 10.29] [added: 10.31] | | | | | | | | | [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 8-K filed with the SEC on September 10, 2012).](http://www.sec.gov/Archives/edgar/data/882184/000119312512386201/d407372dex101.htm) | | |