ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in this quarterly report and with our annual report on Form 10-K for the fiscal year ended September 30, 2025. Some of the information contained in this discussion and analysis constitutes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those described in the “Forward-Looking Statements” section following this discussion.

BUSINESS

D.R. Horton, Inc. is the largest homebuilding company in the United States as measured by number of homes closed. We construct and sell homes through our operating divisions in 126 markets across 36 states. Our common stock is included in the S&P 500 Index and listed on the New York Stock Exchange and NYSE Texas under the ticker symbol “DHI.” Unless the context otherwise requires, the terms “D.R. Horton,” the “Company,” “we” and “our” used herein refer to D.R. Horton, Inc., a Delaware corporation, and its predecessors and subsidiaries.

Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Homebuilding is our core business and primarily includes the construction and sale of single-family homes with sales prices generally ranging from $200,000 to more than $1,000,000, with an average closing price of $362,900 during the nine months ended June 30, 2026. Approximately 85% of our home sales revenue in the nine months ended June 30, 2026 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes and duplexes.

We have closed 1.3 million homes during our 47-year history, and we have been the largest volume homebuilder in the United States every year since 2002. Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

At June 30, 2026, we owned 62% of the outstanding shares of Forestar Group Inc. (Forestar), a publicly traded residential lot development company listed on the New York Stock Exchange and NYSE Texas under the ticker symbol “FOR.” Forestar operates across many of our homebuilding operating markets and is a key part of our homebuilding strategy to maintain relationships with land developers and control a large portion of our land and lot position through land purchase contracts.

Our financial services operations provide mortgage financing and title agency services to homebuyers in many of our homebuilding markets. DHI Mortgage, our wholly owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers after origination. Our wholly owned subsidiary title companies issue title insurance policies and provide examination, underwriting and closing services primarily to our homebuilding customers.

In addition to our homebuilding, rental, Forestar and financial services operations, we engage in other business activities through our subsidiaries. We conduct insurance-related operations, own water rights and other water-related assets and own non-residential real estate including ranch land and improvements. The results of these operations are immaterial for separate reporting and therefore are grouped together and presented as other.

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OVERVIEW

During the nine months ended June 30, 2026, we closed 61,287 homes compared to 61,495 homes in the prior year period. Our home sales revenues decreased 3% and our consolidated revenues decreased 4% to $23.7 billion in the nine months ended June 30, 2026 compared to $24.6 billion in the prior year period. Our pre-tax income was $2.9 billion in the nine months ended June 30, 2026 compared to $3.5 billion in the prior year period, and pre-tax operating margin was 12.2% compared to 14.4%. Net income was $2.2 billion in the nine months ended June 30, 2026 compared to $2.7 billion in the prior year period, and diluted earnings per share were $7.45 compared to $8.53.

In the trailing twelve months ended June 30, 2026, our return on equity (ROE) was 12.8% compared to 16.1% in the prior year period, and return on assets (ROA) was 8.5% compared to 11.1%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.

T1During the third quarter, new home demand continued to be impacted by affordability constraints and cautious consumer sentiment. Our net sales orders and the value of those orders increased slightly compared to the prior year quarter. Home sales revenues increased 1% compared to the prior year quarter. T2Home sales gross margin was 20.7% for the third quarter, compared to 21.8% in the prior year quarter, reflecting the decline in our average sales price and higher sales incentives, including mortgage interest rate buydowns offered to support affordability for our homebuyers. T3We remain well positioned with our affordable product offerings and controlled lot supply, and we continue to manage home pricing, sales incentives and inventory levels based on demand within our local markets.

T4We currently expect sales incentives to remain elevated during the remainder of fiscal 2026 and into fiscal 2027, and we will continue to adjust incentive levels based on changes in market conditions and mortgage interest rates.

We remain focused on our relationships with land developers across the country to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represented 78% of the lots owned and controlled at June 30, 2026 compared to 75% at September 30, 2025 and 76% at June 30, 2025. We continue to prioritize the purchase of finished lots from Forestar and other land developers when possible. During the nine months ended June 30, 2026, 67% of the homes we closed were on lots developed by either Forestar or a third party compared to 65% in the prior year period.

Our strong balance sheet and liquidity provide us with flexibility to operate effectively through changing economic conditions. We plan to continue to generate strong cash flows from our operations and manage our product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on our inventory investments in each of our communities based on local housing market conditions.

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STRATEGY

Our operating strategy focuses on consistently enhancing long-term value to our shareholders by leveraging our financial and competitive positions to maximize the returns on our inventory investments and generate strong profits and cash flows from operations, while managing risk and maintaining financial flexibility to navigate changing economic conditions. Our strategy includes the following initiatives:

•Developing and retaining highly experienced and productive teams of personnel that are aligned and focused on continuous improvement in our operational execution and financial performance.

•Maintaining a significant cash balance and strong overall liquidity position while controlling our level of debt.

•Allocating and actively managing our inventory investments across our operating markets to diversify our geographic risk.

•Offering new home communities that appeal to a broad range of entry-level, move-up, active adult and luxury homebuyers based on consumer demand in each market.

•Executing sales and marketing strategies to drive traffic, generate demand and optimize sales pace across our communities.

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

•Delivering high quality homes and a positive experience to our customers both during and after the sale.

•Managing our inventory of homes under construction relative to demand in each of our markets, including starting construction on unsold homes to capture new home demand and actively controlling the number of unsold completed homes in inventory.

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

•Controlling a significant portion of our land and finished lot position through purchase contracts and prioritizing the purchase of finished lots from Forestar and other land developers when possible.

•Controlling the cost of labor and goods provided by subcontractors and vendors.

•Improving the efficiency of our land development, construction and other key operational activities.

•Controlling our selling, general and administrative (SG&A) expense infrastructure to match production levels.

•Ensuring that our financial services business provides high quality mortgage and title services to homebuyers efficiently and effectively.

•Investing in our rental operations to meet rental demand in high growth suburban markets and selling properties profitably.

•Opportunistically evaluating potential acquisitions to enhance our operating platform.

We believe our operating strategy, which has produced positive results in recent years, will allow us to successfully operate through changing economic conditions and maintain our strong financial performance and competitive position. However, we cannot provide any assurance that the initiatives listed above will continue to be successful, and we may need to adjust parts of our strategy to meet future market conditions.

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KEY RESULTS

Key financial results as of and for the three months ended June 30, 2026, as compared to the same period of 2025 unless otherwise indicated, were as follows:

Consolidated Results:

•Consolidated revenues were essentially unchanged at $9.2 billion.

•Consolidated pre-tax income decreased 10% to $1.2 billion compared to $1.4 billion.

•Consolidated pre-tax income was 13.3% of consolidated revenues compared to 14.7%.

•Income tax expense was $307.5 million compared to $325.0 million, and our effective tax rate was 25.1% compared to 23.9%.

•Net income attributable to D.R. Horton decreased 12% to $904.9 million compared to $1.0 billion.

•Net income per diluted share attributable to D.R. Horton decreased 5% to $3.20 compared to $3.36.

•Stockholders’ equity was $23.8 billion compared to $24.2 billion and $24.1 billion at September 30, 2025 and June 30, 2025, respectively.

•Book value per share increased to $84.85 compared to $82.15 and $80.46 at September 30, 2025 and June 30, 2025, respectively.

•Debt to total capital was 23.0% compared to 19.8% and 23.2% at September 30, 2025 and June 30, 2025, respectively. Net debt to total capital was 17.4% compared to 11.0% and 16.2% at September 30, 2025 and June 30, 2025, respectively.

Homebuilding:

•Homebuilding revenues increased 1% to $8.7 billion compared to $8.6 billion.

•Homes closed increased 4% to 23,983 homes, while the average closing price of those homes decreased 2% to $362,000.

•Net sales orders of 23,084 homes and the value of net sales orders of $8.4 billion both increased slightly from the prior year.

•T5Sales order backlog increased 14% to 15,983 homes, and the value of sales order backlog increased 16% to $6.2 billion.

•Home sales gross margin was 20.7% compared to 21.8%.

•Homebuilding SG&A expense was 8.3% of homebuilding revenues compared to 7.8%.

•Homebuilding pre-tax income decreased 10% to $1.1 billion compared to $1.2 billion.

•Homebuilding pre-tax income was 12.3% of homebuilding revenues compared to 13.8%.

•Homebuilding cash and cash equivalents totaled $1.3 billion compared to $2.2 billion and $2.0 billion at September 30, 2025 and June 30, 2025, respectively.

•Homebuilding inventories totaled $21.3 billion compared to $20.3 billion and $21.1 billion at September 30, 2025 and June 30, 2025, respectively.

•Homes in inventory totaled 38,000 compared to 29,600 and 38,400 at September 30, 2025 and June 30, 2025, respectively.

•Owned lots totaled 126,600 compared to 147,000 and 145,900 at September 30, 2025 and June 30, 2025, respectively. Lots controlled through purchase contracts totaled 441,900 compared to 444,900 and 455,500 at September 30, 2025 and June 30, 2025, respectively.

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•Homebuilding debt was $3.7 billion compared to $3.2 billion and $3.7 billion at September 30, 2025 and June 30, 2025, respectively.

Rental:

•T6Rental revenues were $266.1 million compared to $380.7 million.

•Single-family rental homes closed totaled 601 compared to 1,065.

•Multi-family rental units closed totaled 339 compared to 328.

•Rental pre-tax income was $31.0 million compared to $54.8 million.

•Rental inventory totaled $3.1 billion compared to $2.7 billion and $3.1 billion at September 30, 2025 and June 30, 2025, respectively.

Forestar:

•Forestar’s revenues increased 4% to $407.0 million compared to $390.5 million. Revenues in the current and prior year quarters included $360.5 million and $325.0 million, respectively, of revenue from land and lot sales to our homebuilding segment.

•Forestar’s lots sold increased 1% to 3,659 compared to 3,605. Lots sold to D.R. Horton totaled 3,370 compared to 3,075.

•Forestar’s revenue from tract acres sold was $8.3 million compared to $3.6 million in the prior year quarter.

•Forestar’s pre-tax income increased 12% to $48.7 million compared to $43.6 million.

•Forestar’s pre-tax income was 12.0% of revenues compared to 11.2%.

•Forestar’s cash and cash equivalents totaled $394.9 million compared to $379.2 million and $189.2 million at September 30, 2025 and June 30, 2025, respectively.

•Forestar’s inventories totaled $2.7 billion compared to $2.6 billion and $2.8 billion at September 30, 2025 and June 30, 2025, respectively.

•Forestar’s owned and controlled lots totaled 91,700 compared to 99,800 and 102,300 at September 30, 2025 and June 30, 2025, respectively. Of these lots, 41,000 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 40,400 and 42,700 at September 30, 2025 and June 30, 2025, respectively.

•Forestar’s debt was $793.8 million compared to $802.8 million and $872.8 million at September 30, 2025 and June 30, 2025, respectively.

•Forestar’s debt to total capital was 30.0% compared to 31.2% and 34.2% at September 30, 2025 and June 30, 2025, respectively. Forestar’s net debt to total capital was 17.7% compared to 19.3% and 28.9% at September 30, 2025 and June 30, 2025, respectively.

Financial Services:

•Financial services revenues decreased 3% to $220.7 million compared to $227.8 million.

•Financial services pre-tax income decreased 14% to $70.3 million compared to $81.3 million.

•Financial services pre-tax income was 31.9% of financial services revenues compared to 35.7%.

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Key financial results for the nine months ended June 30, 2026, as compared to the same period of 2025, were as follows:

Consolidated Results:

•Consolidated revenues decreased 4% to $23.7 billion compared to $24.6 billion.

•Consolidated pre-tax income decreased 18% to $2.9 billion compared to $3.5 billion.

•Consolidated pre-tax income was 12.2% of consolidated revenues compared to 14.4%.

•Income tax expense was $713.5 million compared to $831.0 million, and our effective tax rate was 24.7% compared to 23.5%.

•Net income attributable to D.R. Horton decreased 20% to $2.1 billion compared to $2.7 billion.

•Net income per diluted share attributable to D.R. Horton decreased 13% to $7.45 compared to $8.53.

•Net cash provided by operations was $880.8 million compared to $949.1 million.

Homebuilding:

•Homebuilding revenues decreased 3% to $22.3 billion compared to $23.0 billion.

•Homes closed decreased from 61,495 to 61,287 homes, and the average closing price of those homes decreased 2% to $362,900.

•Net sales orders increased 5% to 66,376 homes, and the value of net sales orders increased 4% to $24.3 billion.

•Home sales gross margin was 20.4% compared to 22.1%.

•Homebuilding SG&A expense was 9.0% of homebuilding revenues compared to 8.5%.

•Homebuilding pre-tax income decreased 19% to $2.5 billion compared to $3.1 billion.

•Homebuilding pre-tax income was 11.4% of homebuilding revenues compared to 13.7%.

•Net cash provided by homebuilding operations was $1.3 billion compared to $1.7 billion.

Rental:

•Rental revenues were $587.4 million compared to $835.0 million.

•Single-family rental homes closed totaled 1,564 compared to 1,895.

•Multi-family rental units closed totaled 555 compared to 1,132.

•Rental pre-tax income was $43.5 million compared to $89.4 million.

Forestar:

•Forestar’s revenues increased 6% to $1.1 billion compared to $991.9 million. Revenues in the current and prior year periods included $840.1 million and $811.3 million, respectively, of revenue from land and lot sales to our homebuilding segment.

•Forestar’s lots sold decreased 9% to 8,541 compared to 9,349. Lots sold to D.R. Horton totaled 7,447 compared to 7,688.

•Forestar’s revenue from tract acres sold was $73.2 million compared to $3.6 million in the prior year period.

•Forestar’s pre-tax income increased 7% to $113.4 million compared to $106.2 million.

•Forestar’s pre-tax income was 10.8% of revenues compared to 10.7%.

Financial Services:

•Financial services revenues decreased 4% to $598.2 million compared to $623.0 million.

•Financial services pre-tax income decreased 11% to $180.0 million compared to $203.0 million.

•Financial services pre-tax income was 30.1% of financial services revenues compared to 32.6%.

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RESULTS OF OPERATIONS - HOMEBUILDING

We conduct our homebuilding operations in the geographic regions, states and markets listed below. Our homebuilding operating divisions are aggregated into six reporting segments, also referred to as reporting regions, which comprise the markets below. Our financial statements and the notes thereto contain additional information regarding segment performance.

State

Reporting Region/Market

State

Reporting Region/Market

State

Reporting Region/Market

Northwest Region

Southeast Region

North Region

Colorado

Colorado Springs

Alabama

Baldwin County

Delaware

Northern Delaware

Denver

Birmingham

Southern Delaware

Fort Collins

Huntsville

Illinois

Chicago

Oregon

Bend

Mobile

Indiana

Fort Wayne

Eugene/Springfield

Montgomery

Indianapolis

Medford

Tuscaloosa

Northwest Indiana

Portland/Salem

Florida

Cape Coral/Fort Myers

Iowa

Des Moines

Utah

Salt Lake City/Provo/Ogden

Deltona/Daytona Beach

Iowa City/Cedar Rapids

St. George

Gainesville

Kansas/Missouri

Kansas City

Washington

Bremerton

Jacksonville

Kentucky

Louisville/Lexington

Central Washington

Lakeland

Maryland

Baltimore

Kennewick/Pasco/Richland

Miami/Fort Lauderdale

Eastern Maryland

Seattle/Tacoma/Everett/Olympia

Ocala

Suburban Washington, D.C.

Spokane

Orlando

Western Maryland

Vancouver

Palm Bay/Melbourne

Minnesota

Minneapolis/St. Paul

Panama City

Nebraska

Omaha

Southwest Region

Pensacola

New Jersey

Northern New Jersey

Arizona

Phoenix

Port St. Lucie

Southern New Jersey

Tucson

Tallahassee

Ohio

Cincinnati/Dayton

California

Bakersfield

Tampa/Sarasota/Punta Gorda

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/Yuba City

Hattiesburg

Richmond

Riverside County

Jackson

Virginia Beach/Williamsburg

Sacramento

Western Virginia

San Bernardino County

East Region

West Virginia

Eastern West Virginia

Hawaii

Oahu

Georgia

Atlanta

Northern West Virginia

Nevada

Las Vegas

Augusta

Wisconsin

Southeast Wisconsin

Reno

Central Georgia

New Mexico

Albuquerque

Savannah/Brunswick

Santa Fe

Valdosta

North Carolina

Asheville

South Central Region

Charlotte

Arkansas

Little Rock

Greensboro/Winston-Salem

Northwest Arkansas

New Bern/Greenville

Oklahoma

Oklahoma City

Raleigh/Durham/Fayetteville

Tulsa

Wilmington/Jacksonville

Texas

Abilene

South Carolina

Charleston

Austin

Columbia

Beaumont

Greenville/Spartanburg

Bryan/College Station

Hilton Head

Corpus Christi

Myrtle Beach/Florence

Dallas

Tennessee

Chattanooga

East Texas

Knoxville

Fort Worth

Memphis

Houston

Nashville

Killeen/Temple/Waco

Northeast Tennessee

Lubbock

Midland/Odessa

New Braunfels/San Marcos

San Antonio

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The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three and nine months ended June 30, 2026 and 2025.

Net Sales Orders (1)

Three Months Ended June 30,

Net Homes Sold

Value (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Northwest

1,183

1,294

(9)

617.6

683.6

(10)

522,100

528,300

(1)

Southwest

2,376

2,396

(1)

1,171.4

1,129.3

493,000

471,300

South Central

6,011

6,131

(2)

1,804.7

1,868.0

(3)

300,200

304,700

(1)

Southeast

5,456

5,475

—

1,862.0

1,830.1

341,300

334,300

East

4,857

4,887

(1)

1,653.8

1,696.5

(3)

340,500

347,100

(2)

North

3,201

2,888

1,330.2

1,214.8

415,600

420,600

(1)

23,084

23,071

—

8,439.7

8,422.3

—

365,600

365,100

—

Nine Months Ended June 30,

Net Homes Sold

Value (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Northwest

3,340

3,703

(10)

1,777.1

1,980.1

(10)

532,100

534,700

—

Southwest

7,044

6,941

3,414.1

3,322.4

484,700

478,700

South Central

17,763

16,648

5,322.3

5,152.2

299,600

309,500

(3)

Southeast

15,427

15,077

5,223.9

5,094.2

338,600

337,900

—

East

13,877

13,228

4,778.8

4,579.8

344,400

346,200

(1)

North

8,925

7,748

3,738.9

3,305.8

418,900

426,700

(2)

66,376

63,345

24,255.1

23,434.5

365,400

370,000

(1)

Sales Order Cancellations

Three Months Ended June 30,

Cancelled Sales Orders

Value (In millions)

Cancellation Rate (2)

2026

2025

2026

2025

2026

2025

Northwest

156

220

91.0

127.0

Southwest

533

435

266.6

216.5

South Central

1,558

1,206

478.8

399.0

Southeast

1,286

1,307

448.5

450.7

East

1,271

1,051

444.2

367.4

North

803

618

335.8

259.1

5,607

4,837

2,064.9

1,819.7

Nine Months Ended June 30,

Cancelled Sales Orders

Value (In millions)

Cancellation Rate (2)

2026

2025

2026

2025

2026

2025

Northwest

476

582

276.8

336.2

Southwest

1,507

1,212

749.0

612.0

South Central

3,809

3,227

1,192.9

1,057.4

Southeast

3,423

3,482

1,184.6

1,201.8

East

3,160

2,759

1,116.5

974.4

North

2,096

1,759

866.0

739.7

14,471

13,021

5,385.8

4,921.5

________________________

(1)Net sales orders represent the number and dollar value of new sales contracts executed with customers (gross sales orders), net of cancelled sales orders.

(2)Cancellation rate represents the number of cancelled sales orders divided by gross sales orders.

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Net Sales Orders

The value of net sales orders was $8.4 billion (23,084 homes) and $24.3 billion (66,376 homes) for the three and nine months ended June 30, 2026, respectively, compared to $8.4 billion (23,071 homes) and $23.4 billion (63,345 homes) in the prior year periods. Comparing the three month periods, the number, value and average selling price of homes sold were essentially unchanged.

In the nine month period, the increase in the value of net sales orders was attributable to a 5% increase in sales order volume. The highest percentage increase was in the North region where the Pittsburgh and Ohio markets contributed most to the increase. In the Northwest region where sales order volume decreased, the Seattle and Salt Lake City markets contributed most to the decrease.

During the third quarter, new home demand continued to be impacted by affordability constraints and cautious consumer sentiment. We remain well positioned with our affordable product offerings and controlled lot supply, and we continue to manage home pricing, sales incentives and inventory levels based on demand within our local markets.

Sales Order Backlog

As of June 30,

Homes in Backlog

Value (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Northwest

589

689

(15)

316.9

372.0

(15)

538,000

539,900

—

Southwest

1,581

1,218

813.9

576.3

514,800

473,200

South Central

3,799

3,459

1,207.5

1,091.2

317,800

315,500

Southeast

3,135

2,833

1,124.7

974.1

358,800

343,800

East

3,595

3,465

1,276.0

1,255.7

354,900

362,400

(2)

North

3,284

2,411

1,440.4

1,068.8

438,600

443,300

(1)

15,983

14,075

6,179.4

5,338.1

386,600

379,300

Sales Order Backlog

Sales order backlog represents homes under contract but not yet closed at the end of the period. Many of the contracts in our sales order backlog are subject to contingencies, including mortgage loan approval and buyers selling their existing homes, which can result in cancellations. A portion of the contracts in backlog will not result in closings due to cancellations.

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Homes Closed and Home Sales Revenue

Three Months Ended June 30,

Homes Closed

Value (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Northwest

1,239

1,270

(2)

652.0

698.8

(7)

526,200

550,200

(4)

Southwest

2,438

2,396

1,171.6

1,166.2

—

480,600

486,700

(1)

South Central

6,660

6,239

1,967.1

1,938.2

295,400

310,700

(5)

Southeast

5,652

5,682

(1)

1,916.5

1,923.2

—

339,100

338,500

—

East

5,061

4,835

1,754.5

1,668.3

346,700

345,000

—

North

2,933

2,738

1,220.2

1,166.3

416,000

426,000

(2)

23,983

23,160

8,681.9

8,561.0

362,000

369,600

(2)

Nine Months Ended June 30,

Homes Closed

Value (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Northwest

3,227

3,549

(9)

1,737.9

1,892.3

(8)

538,500

533,200

Southwest

6,498

6,937

(6)

3,086.6

3,369.7

(8)

475,000

485,800

(2)

South Central

16,399

15,943

4,867.9

4,954.7

(2)

296,800

310,800

(5)

Southeast

14,697

15,339

(4)

4,921.1

5,255.5

(6)

334,800

342,600

(2)

East

12,714

12,507

4,386.7

4,336.5

345,000

346,700

—

North

7,752

7,220

3,239.9

3,079.2

417,900

426,500

(2)

61,287

61,495

—

22,240.1

22,887.9

(3)

362,900

372,200

(2)

Home Sales Revenue

Revenues from home sales were $8.7 billion (23,983 homes) and $22.2 billion (61,287 homes) for the three and nine months ended June 30, 2026, respectively, compared to $8.6 billion (23,160 homes) and $22.9 billion (61,495 homes) in the prior year periods.

The number of homes closed increased 4% in the three months ended June 30, 2026 compared to the prior year period. In regions where homes closed increased, the markets contributing most to the increase were the Phoenix market in the Southwest, the Houston market in the South Central, the Atlanta market in the East and the Pittsburgh market in the North. These increases in volume were largely offset by decreases in the average selling price, particularly in the Northwest and South Central regions.

The number of homes closed was essentially unchanged in the nine months ended June 30, 2026 compared to the prior year period due to offsetting fluctuations between the regions. Home sales revenues decreased due to decreases in the average selling price, particularly in the South Central region.

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Homebuilding Operating Margin Analysis

Percentages of Related Revenues

Three Months Ended

June 30,

Nine Months Ended

June 30,

2026

2025

2026

2025

Gross profit – home sales

20.7

21.8

20.4

22.1

Gross profit – land/lot sales and other

30.2

14.1

22.5

46.6

Inventory and land option charges

(0.2)

(0.6)

(0.3)

(0.4)

Gross profit – total homebuilding

20.5

21.2

20.2

21.8

Selling, general and administrative expense

8.3

7.8

9.0

8.5

Other (income) expense

(0.1)

(0.4)

(0.2)

(0.4)

Homebuilding pre-tax income

12.3

13.8

11.4

13.7

Home Sales Gross Profit

Gross profit from home sales decreased to $1.8 billion in the three months ended June 30, 2026 from $1.9 billion in the prior year period and decreased 110 basis points to 20.7% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 110 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 10 basis points due to lower warranty and construction defect costs.

Gross profit from home sales decreased to $4.5 billion in the nine months ended June 30, 2026 from $5.1 billion in the prior year period and decreased 170 basis points to 20.4% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 190 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 30 basis points due to a favorable litigation outcome and lower warranty costs.

We remain focused on managing the pricing, incentives and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and new home demand. To adjust to changes in market conditions during recent years, we have used a higher level of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers. We currently expect sales incentives to remain elevated during the remainder of fiscal 2026 and into fiscal 2027, and we will continue to adjust incentive levels based on changes in market conditions and mortgage interest rates.

Land/Lot Sales and Other Revenues

Land/lot sales and other revenues from our homebuilding operations were $4.3 million and $38.2 million in the three and nine months ended June 30, 2026, respectively, and $19.8 million and $63.1 million in the prior year periods.

We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of June 30, 2026, our homebuilding operations had $31.7 million of land held for sale that we expect to sell in the next twelve months.

Inventory and Land Option Charges

At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were $3.7 million and $6.7 million of impairment charges recorded in our homebuilding segment during the three and nine months ended June 30, 2026, respectively, compared to $15.9 million and $23.3 million in the prior year periods.

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As we manage our inventory investments across our operating markets to optimize returns and cash flows, we may modify our pricing and incentives, construction and development plans or land sale strategies in individual active communities and land held for development, which could result in the affected communities being evaluated for potential impairment. If the housing market or economic conditions are adversely affected for a prolonged period, we may be required to evaluate additional communities for potential impairment. These evaluations could result in impairment charges which could be significant.

During the three and nine months ended June 30, 2026, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $17.3 million and $50.0 million, respectively, compared to $36.0 million and $69.9 million in the prior year periods.

Selling, General and Administrative (SG&A) Expense

Homebuilding SG&A expense was $720.6 million and $2.0 billion in the three and nine months ended June 30, 2026, respectively, compared to $670.0 million and $1.9 billion in the prior year periods. As a percentage of homebuilding revenues, SG&A expense was 8.3% and 9.0% in the three and nine months ended June 30, 2026, respectively, compared to 7.8% and 8.5% in the prior year periods.

Employee compensation and related costs were $560.6 million and $1.5 billion in the three and nine months ended June 30, 2026, respectively, compared to $532.3 million and $1.5 billion in the prior year periods. These costs represented 78% and 76% of SG&A costs in the three and nine months ended June 30, 2026, respectively, compared to 79% and 78% in the prior year periods. Our homebuilding operations employed 9,997 and 10,190 people at June 30, 2026 and 2025, respectively.

We attempt to control our homebuilding SG&A costs while ensuring that our infrastructure adequately supports our operations; however, we cannot make assurances that we will be able to maintain or improve upon the current SG&A expense as a percentage of revenues.

Interest Incurred

We capitalize interest costs incurred to inventory during active development and construction (active inventory). Capitalized interest is charged to cost of sales as the related inventory is delivered to the buyer. T7Interest incurred by our homebuilding operations increased 40% to $43.3 million and 52% to $106.4 million in the three and nine months ended June 30, 2026, respectively, compared to $31.0 million and $69.8 million in the prior year periods. The increases were primarily due to increases in the weighted average interest rate of homebuilding debt outstanding in the three and nine months ended June 30, 2026, as well as an increase of 26% in the average amount of that debt in both periods.

Interest charged to cost of sales was 0.5% of homebuilding cost of sales (excluding inventory and land option charges) in both the three and nine months ended June 30, 2026 compared to 0.4% in both prior year periods.

Other Income

Other income, net of other expenses, included in our homebuilding operations was $9.6 million and $37.9 million in the three and nine months ended June 30, 2026, respectively, compared to $36.0 million and $83.0 million in the prior year periods. Other income consists of interest income and various other types of ancillary income, gains, expenses and losses not directly associated with sales of homes, land and lots. The activities that result in this ancillary income are not significant, either individually or in the aggregate.

Business Acquisition

In October 2025, we acquired the homebuilding operations of SK Builders for approximately $80 million in cash. SK Builders operates in and around Greenville, South Carolina. The assets acquired included approximately 160 homes in inventory, 260 lots and a sales order backlog of 110 homes. Through the acquisition, we also obtained control of approximately 1,320 additional lots through land purchase contracts.

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Homebuilding Results by Reporting Region

Three Months Ended June 30,

2026

2025

Homebuilding

Revenues

Homebuilding

Pre-tax

Income (1)

Pre-tax Income as % of

Revenues

Homebuilding

Revenues

Homebuilding

Pre-tax

Income (1)

Pre-tax Income as % of

Revenues

(In millions)

Northwest

652.3

68.3

10.5

698.9

116.4

16.7

Southwest

1,171.6

136.0

11.6

1,182.4

152.7

12.9

South Central

1,967.5

269.5

13.7

1,940.8

290.2

15.0

Southeast

1,919.4

230.8

12.0

1,923.5

224.6

11.7

East

1,754.9

206.7

11.8

1,668.5

230.4

13.8

North

1,220.5

155.3

12.7

1,166.7

172.0

14.7

8,686.2

1,066.6

12.3

8,580.8

1,186.3

13.8

Nine Months Ended June 30,

2026

2025

Homebuilding

Revenues

Homebuilding

Pre-tax

Income (1)

Pre-tax Income as % of

Revenues

Homebuilding

Revenues

Homebuilding

Pre-tax

Income (1)

Pre-tax Income as % of

Revenues

(In millions)

Northwest

1,738.7

182.3

10.5

1,892.5

286.3

15.1

Southwest

3,101.5

338.8

10.9

3,386.2

444.4

13.1

South Central

4,868.7

609.3

12.5

4,958.4

719.9

14.5

Southeast

4,935.9

539.5

10.9

5,287.1

658.7

12.5

East

4,387.3

464.9

10.6

4,343.1

596.6

13.7

North

3,246.2

397.8

12.3

3,083.7

428.3

13.9

22,278.3

2,532.6

11.4

22,951.0

3,134.2

13.7

____________________

(1)Expenses maintained at the corporate level consist primarily of interest and property taxes, which are capitalized and amortized to cost of sales or expensed directly, and the expenses related to operating our corporate office. The amortization of capitalized interest and property taxes is allocated to each segment based on the segment’s cost of sales, while expenses associated with the corporate office are allocated to each segment based on the segment’s inventory balances.

Northwest Region — Homebuilding revenues decreased 7% and 8% in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to decreases in the number of homes closed, particularly in our Seattle and Salt Lake City markets. The region generated pre-tax income of $68.3 million and $182.3 million in the three and nine months ended June 30, 2026, respectively, compared to $116.4 million and $286.3 million in the prior year periods. Gross profit from home sales as a percentage of home sales revenue (home sales gross profit percentage) decreased by 440 and 370 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the average cost of homes closed increasing by more than the average selling price of those homes.

As a percentage of homebuilding revenues, SG&A expenses increased by 160 and 100 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the decrease in homebuilding revenues.

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Southwest Region — Homebuilding revenues decreased 1% and 8% in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods. The decrease in the nine month period was primarily due to decreases in the number of homes closed in our Las Vegas and Southern California markets. The region generated pre-tax income of $136.0 million and $338.8 million in the three and nine months ended June 30, 2026, respectively, compared to $152.7 million and $444.4 million in the prior year periods. Home sales gross profit percentage decreased by 120 and 180 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes.

As a percentage of homebuilding revenues, SG&A expenses increased by 30 and 50 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods. The increase in the nine month period was primarily due to the decrease in homebuilding revenues, while the increase in the three month period was primarily due to a slight increase in SG&A costs.

South Central Region — Homebuilding revenues increased 1% and decreased 2% in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods. The region generated pre-tax income of $269.5 million and $609.3 million in the three and nine months ended June 30, 2026, respectively, compared to $290.2 million and $719.9 million in the prior year periods. Home sales gross profit percentage decreased by 60 and 100 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes.

As a percentage of homebuilding revenues, SG&A expenses increased by 40 and 60 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to an increase in SG&A costs.

Southeast Region — Homebuilding revenues decreased slightly in the three months ended June 30, 2026 and decreased 7% in the nine months ended June 30, 2026 compared to the prior year periods, primarily due to decreases in the number of homes closed, particularly in our Jacksonville market. The region generated pre-tax income of $230.8 million and $539.5 million in the three and nine months ended June 30, 2026, respectively, compared to $224.6 million and $658.7 million in the prior year periods. Home sales gross profit percentage was flat in the three months ended June 30, 2026 and decreased by 100 basis points in the nine months ended June 30, 2026 compared to the prior year periods, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes in the nine month period.

East Region — Homebuilding revenues increased 5% and 1% in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to increases in the number of homes closed, particularly in our Atlanta, Greenville and Myrtle Beach markets. The region generated pre-tax income of $206.7 million and $464.9 million in the three and nine months ended June 30, 2026, respectively, compared to $230.4 million and $596.6 million in the prior year periods. Home sales gross profit percentage decreased by 120 and 250 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the average cost of homes closed increasing while the average selling price of those homes was essentially unchanged.

As a percentage of homebuilding revenues, SG&A expenses increased by 70 and 60 basis points in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to an increase in SG&A costs.

North Region — Homebuilding revenues increased 5% in both the three and nine months ended June 30, 2026 compared to the prior year periods, primarily due to increases in the number of homes closed, particularly in our Pittsburgh and Southern Virginia markets. The region generated pre-tax income of $155.3 million and $397.8 million in the three and nine months ended June 30, 2026, respectively, compared to $172.0 million and $428.3 million in the prior year periods. Home sales gross profit percentage decreased by 180 and 150 basis points in the three and nine months ended June 30, 2026 compared to the prior year periods, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 10 basis points in the three months and was flat in the nine months ended June 30, 2026 compared to the prior year periods.

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HOMEBUILDING INVENTORIES, LAND AND LOT POSITION AND HOMES IN INVENTORY

We routinely enter into contracts to purchase land or developed residential lots at predetermined prices on a defined schedule commensurate with planned development or anticipated new home demand. At the time of purchase, the undeveloped land is generally vested with the rights to begin development or construction work, and we plan and coordinate the development of our land into residential lots for use in our homebuilding business. We manage our inventory of owned land and lots and homes under construction relative to demand in each of our markets, including starting construction on unsold homes to capture new home demand and actively controlling the number of unsold, completed homes in inventory.

Our homebuilding segment’s inventories at June 30, 2026 and September 30, 2025 are summarized as follows:

June 30, 2026

Construction in Progress and

Finished Homes

Residential Land/Lots

Developed and Under

Development

Land Held

for Development

Land Held

for Sale

Total Inventory

(In millions)

Northwest

743.3

1,129.9

30.3

3.1

1,906.6

Southwest

1,183.4

1,870.1

8.7

22.6

3,084.8

South Central

1,839.9

2,229.6

0.3

0.5

4,070.3

Southeast

1,869.7

2,339.7

12.6

4.4

4,226.4

East

1,986.9

2,839.0

—

4,825.9

North

1,428.2

1,393.5

—

0.7

2,822.4

Corporate and unallocated (1)

166.7

210.6

0.7

0.4

378.4

9,218.1

12,012.4

52.6

31.7

21,314.8

September 30, 2025

Construction in Progress and

Finished Homes

Residential Land/Lots

Developed and Under

Development

Land Held

for Development

Land Held

for Sale

Total Inventory

(In millions)

Northwest

647.4

1,225.3

16.2

2.9

1,891.8

Southwest

1,003.8

2,047.1

8.7

8.9

3,068.5

South Central

1,643.0

2,288.6

0.3

—

3,931.9

Southeast

1,537.8

2,502.3

12.6

9.1

4,061.8

East

1,561.4

2,836.3

—

4,397.7

North

1,222.8

1,414.6

—

0.2

2,637.6

Corporate and unallocated (1)

127.5

198.9

0.5

0.3

327.2

7,743.7

12,513.1

38.3

21.4

20,316.5

__________

(1)Corporate and unallocated inventory consists primarily of capitalized interest and property taxes.

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Our land and lot position and homes in inventory at June 30, 2026 and September 30, 2025 are summarized as follows:

June 30, 2026

Land/Lots

Owned (1)

Lots Controlled

Through

Land and Lot

Purchase

Contracts (2)(3)

Total

Land/Lots

Owned and

Controlled

Homes

Inventory (4)

Northwest

10,700

17,100

27,800

2,000

Southwest

16,800

31,400

48,200

3,800

South Central

29,500

119,300

148,800

9,500

Southeast

27,100

104,100

131,200

8,200

East

27,800

107,900

135,700

8,800

North

14,700

62,100

76,800

5,700

126,600

441,900

568,500

38,000

100

September 30, 2025

Land/Lots

Owned (1)

Lots Controlled

Through

Land and Lot

Purchase

Contracts (2)(3)

Total

Land/Lots

Owned and

Controlled

Homes

Inventory (4)

Northwest

12,200

17,100

29,300

1,700

Southwest

19,600

31,200

50,800

3,200

South Central

35,900

111,900

147,800

7,700

Southeast

31,500

113,600

145,100

6,300

East

31,500

111,100

142,600

6,300

North

16,300

60,000

76,300

4,400

147,000

444,900

591,900

29,600

100

___________________

(1)Land/lots owned included approximately 72,500 and 78,400 owned lots that are fully developed and ready for home construction at June 30, 2026 and September 30, 2025, respectively.

(2)The total remaining purchase price of lots controlled through land and lot purchase contracts at June 30, 2026 and September 30, 2025 was $27.5 billion and $26.0 billion, respectively, secured by earnest money deposits of $2.5 billion and $2.3 billion, respectively. The total remaining purchase price of lots controlled through land and lot purchase contracts at June 30, 2026 and September 30, 2025 included $2.1 billion and $2.0 billion, respectively, related to lot purchase contracts with Forestar, secured by $210.1 million and $200.2 million, respectively, of earnest money.

(3)Lots controlled at June 30, 2026 included approximately 41,000 lots owned by Forestar, 21,800 of which our homebuilding divisions had under contract to purchase and 19,200 of which our homebuilding divisions had a right of first offer to purchase. Of these, approximately 10,700 lots were in our Southeast region, 9,600 lots were in our South Central region, 8,600 lots were in our East region, 6,700 lots were in our North region, 3,700 lots were in our Southwest region and 1,700 lots were in our Northwest region. Lots controlled at September 30, 2025 included approximately 40,400 lots owned by Forestar, 22,800 of which our homebuilding divisions had under contract to purchase and 17,600 of which our homebuilding divisions had a right of first offer to purchase.

(4)Approximately 23,300 and 19,600 of our homes in inventory were unsold at June 30, 2026 and September 30, 2025, respectively. At June 30, 2026, approximately 7,600 of our unsold homes were completed, of which approximately 600 homes had been completed for more than six months. At September 30, 2025, approximately 9,300 of our unsold homes were completed, of which approximately 800 homes had been completed for more than six months. Homes in inventory exclude approximately 2,900 and 2,700 model homes at June 30, 2026 and September 30, 2025, respectively.

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RESULTS OF OPERATIONS - RENTAL

Our rental segment consists of single-family and multi-family rental operations. Single-family rental operations construct homes within single-family rental (build-to-rent) communities and then either sell homes to an investor as they are completed or lease the homes and market the entire community for a bulk sale. Multi-family rental operations develop, construct, lease and sell residential rental properties, with a primary focus on constructing garden style apartment communities in high growth suburban markets. Single-family and multi-family rental property sales are recognized as revenues, and rental income is recognized as other income. The following tables provide further information regarding our rental operations as of and for the three and nine months ended June 30, 2026 and 2025.

Rental Homes/Units Closed and Revenue

Three Months Ended June 30,

Homes/Units Closed

Rental Revenue (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Single-family

601

1,065

(44)

162.9

313.5

(48)

271,000

294,400

(8)

Multi-family

339

328

95.2

66.1

280,800

201,500

940

1,393

(33)

258.1

379.6

(32)

274,600

272,500

Nine Months Ended June 30,

Homes/Units Closed

Rental Revenue (In millions)

Average Selling Price

2026

2025

Change

2026

2025

Change

2026

2025

Change

Single-family

1,564

1,895

(17)

425.7

545.8

(22)

272,200

288,000

(5)

Multi-family

555

1,132

(51)

153.7

280.1

(45)

276,900

247,400

2,119

3,027

(30)

579.4

825.9

(30)

273,400

272,800

—

Three Months Ended

June 30,

Nine Months Ended

June 30,

2026

2025

2026

2025

(In millions)

Revenues

Single-family rental

162.9

313.5

425.7

545.8

Multi-family rental and other

103.2

67.2

161.7

289.2

Total revenues

266.1

380.7

587.4

835.0

Cost of sales

Single-family rental

134.4

245.2

358.3

430.1

Multi-family rental and other

83.6

50.4

135.5

227.7

Inventory and land option charges

0.1

0.4

4.3

Total cost of sales

218.1

296.0

494.2

662.1

Selling, general and administrative expense

55.5

61.4

154.4

165.8

Other (income) expense

(38.5)

(31.5)

(104.7)

(82.3)

Income before income taxes

31.0

54.8

43.5

89.4

Rental Operating Margin Analysis

Percentages of Rental Revenues

Three Months Ended

June 30,

Nine Months Ended

June 30,

2026

2025

2026

2025

Gross profit — rental

18.0

22.2

15.9

20.7

Selling, general and administrative expense

20.9

16.1

26.3

19.9

Other (income) expense

(14.5)

(8.3)

(17.8)

(9.9)

Rental pre-tax income

11.6

14.4

7.4

10.7

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Revenues from our rental operations decreased to $266.1 million and $587.4 million during the three and nine months ended June 30, 2026, respectively, from $380.7 million and $835.0 million in the prior year periods. Pre-tax income was $31.0 million and $43.5 million during the three and nine months ended June 30, 2026, respectively, compared to $54.8 million and $89.4 million in the prior year periods. The decline in pre-tax income for both periods was due to a decrease in single-family revenues due to fewer homes closed, as well as a decrease in the gross profit percentage on both single-family and multi-family closings. A decrease in multi-family units closed also contributed to the decline in pre-tax income in the nine month period.

At June 30, 2026, our rental property inventory of $3.1 billion included $320.5 million of single-family rental inventory and $2.7 billion of multi-family rental inventory. At September 30, 2025, our rental property inventory of $2.7 billion included $378.3 million of single-family rental inventory and $2.3 billion of multi-family rental inventory. Single-family rental homes and lots and multi-family rental units at June 30, 2026 and September 30, 2025 consisted of the following:

Rental Inventory

June 30,

2026

September 30,

2025

Single-family rental homes (1)

1,200

1,420

Single-family rental lots (2)

1,350

1,150

Multi-family rental units (3)

13,830

12,480

__________

(1)Single-family rental homes at June 30, 2026 consist of 640 homes under construction and 560 completed homes compared to 370 homes under construction and 1,050 completed homes at September 30, 2025.

(2)Single-family rental lots at June 30, 2026 consist of 590 undeveloped lots and 760 finished lots compared to 440 undeveloped lots and 710 finished lots at September 30, 2025.

(3)Multi-family rental units at June 30, 2026 consist of 3,580 units under construction and 10,250 units that were substantially complete and in the lease-up phase compared to 4,910 units under construction and 7,570 units that were substantially complete at September 30, 2025.

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RESULTS OF OPERATIONS – FORESTAR

At June 30, 2026, we owned 62% of the outstanding shares of Forestar. Forestar is a publicly traded residential lot development company with operations in 65 markets across 24 states as of June 30, 2026. (See Note B to the accompanying financial statements for additional Forestar segment information.)

Results of operations for the Forestar segment for the three and nine months ended June 30, 2026 and 2025 were as follows:

Three Months Ended

June 30,

Nine Months Ended

June 30,

2026

2025

2026

2025

(In millions)

Total revenues

407.0

390.5

1,054.3

991.9

Cost of land/lot sales and other

322.1

308.9

827.1

774.1

Inventory and land option charges

0.8

1.9

7.9

3.9

Total cost of sales

322.9

310.8

835.0

778.0

Selling, general and administrative expense

38.3

37.4

112.7

111.8

Other (income) expense

(2.9)

(1.3)

(6.8)

(4.1)

Income before income taxes

48.7

43.6

113.4

106.2

Forestar’s revenues are primarily derived from sales of single-family residential lots to local, regional and national homebuilders and land bankers for homebuilders. The following tables provide further information regarding Forestar’s revenues for the three and nine months ended June 30, 2026 and 2025 and lot position as of June 30, 2026 and September 30, 2025:

Three Months Ended June 30,

Lots Sold

Value (In millions)

2026

2025

2026

2025

Residential lots sold

Lots sold to D.R. Horton

3,370

3,075

360.5

323.7

Total lots sold

3,659

3,605

397.4

383.0

Tract acres sold

Tract acres sold to D.R. Horton

—

1.3

Total tract acres sold

184

8.3

3.6

Nine Months Ended June 30,

Lots Sold

Value (In millions)

2026

2025

2026

2025

Residential lots sold

Lots sold to D.R. Horton

7,447

7,688

828.6

810.0

Total lots sold

8,541

9,349

963.9

977.3

Tract acres sold

Tract acres sold to D.R. Horton

11.5

1.3

Total tract acres sold

765

73.2

3.6

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June 30,

2026

September 30,

2025

Residential lots in inventory and under contract

Lots owned

62,200

65,100

Lots controlled through land purchase contracts

29,500

34,700

Total lots owned and controlled

91,700

99,800

Owned lots under contract to sell to D.R. Horton

21,800

22,800

Owned lots under contract to customers other than D.R. Horton

1,700

1,000

Total owned lots under contract

23,500

23,800

Owned lots subject to right of first offer with D.R. Horton

19,200

17,600

Owned lots fully developed

9,600

8,900

At June 30, 2026 and September 30, 2025, Forestar’s inventory, which includes land and lots developed, under development and held for development, totaled $2.7 billion and $2.6 billion, respectively.

Forestar’s inventory and land option charges consisted of $0.8 million and $7.9 million of earnest money and pre-acquisition cost write-offs in the three and nine months ended June 30, 2026, respectively, compared to $1.9 million and $3.9 million in the prior year periods. There were no impairment charges recorded in the current or prior year periods.

SG&A expense for the three and nine months ended June 30, 2026 included charges of $1.8 million and $5.4 million, respectively, related to the shared services agreement between Forestar and D.R. Horton whereby D.R. Horton provides Forestar with certain administrative, compliance, operational and procurement services. Shared services charges were $1.8 million and $5.4 million, respectively, in the prior year periods.

Other expense in the nine months ended June 30, 2025 includes a loss on extinguishment of debt of $1.1 million due to Forestar’s repurchase of $329.4 million of its $400 million principal amount of 3.85% senior notes due 2026 in March 2025.

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RESULTS OF OPERATIONS – FINANCIAL SERVICES

The following tables and related discussion set forth key operating and financial data for our financial services operations, comprising DHI Mortgage and our subsidiary title companies, for the three and nine months ended June 30, 2026 and 2025.

Three Months Ended June 30,

Nine Months Ended June 30,

2026

2025

% Change

2026

2025

% Change

Number of first-lien loans originated or brokered by DHI Mortgage for D.R. Horton homebuyers

19,729

18,855

49,611

49,488

—

Number of homes closed by D.R. Horton

23,983

23,160

61,287

61,495

—

Percentage of D.R. Horton homes financed by DHI Mortgage

Total number of loans originated or brokered by DHI Mortgage

19,834

18,978

49,869

49,776

—

Loans sold by DHI Mortgage to third parties

18,926

18,107

48,366

48,842

(1)

Three Months Ended June 30,

Nine Months Ended June 30,

2026

2025

% Change

2026

2025

% Change

(In millions)

Loan origination and other fees

25.0

23.7

62.7

—

Gains on sale of mortgage loans and mortgage servicing rights

142.1

152.8

(7)

394.0

423.9

(7)

Servicing income

2.0

0.7

186

5.4

1.5

260

Total mortgage operations revenues

169.1

177.2

(5)

462.1

488.1

(5)

Title policy premiums

51.6

50.6

136.1

134.9

Total revenues

220.7

227.8

(3)

598.2

623.0

(4)

General and administrative expense

172.1

171.0

477.0

485.4

(2)

Other (income) expense

(21.7)

(24.5)

(11)

(58.8)

(65.4)

(10)

Financial services pre-tax income

70.3

81.3

(14)

180.0

203.0

(11)

Financial Services Operating Margin Analysis

Percentages of

Financial Services Revenues

Three Months Ended

June 30,

Nine Months Ended

June 30,

2026

2025

2026

2025

General and administrative expense

78.0

75.1

79.7

77.9

Other (income) expense

(9.8)

(10.8)

(9.8)

(10.5)

Financial services pre-tax income

31.9

35.7

30.1

32.6

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Mortgage Loan Activity

DHI Mortgage’s primary focus is to originate loans for our homebuilding operations, and those loan originations account for substantially all of its total loan volume. In the three months ended June 30, 2026, the volume of first-lien loans originated or brokered by DHI Mortgage for our homebuyers increased 5% primarily due to an increase of 4% in the number of homes closed by our homebuilding operations. In the nine months ended June 30, 2026, the volume of loan originations and homes closed were essentially unchanged from the prior year period. The percentage of homes closed for which DHI Mortgage handled our homebuyers’ financing was 82% and 81% in the three and nine months ended June 30, 2026, respectively, compared to 81% and 80% in the prior year periods.

The number of loans sold increased 5% and decreased 1% in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods. Substantially all mortgage loans held for sale on June 30, 2026 were eligible for sale to the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Government National Mortgage Association (Ginnie Mae). During the nine months ended June 30, 2026, approximately 74% of our mortgage loans were sold directly to Fannie Mae, Freddie Mac or into securities backed by Ginnie Mae, and 18% were sold to one other major financial entity. Changes in market conditions could result in a greater concentration of our mortgage sales in future periods to fewer financial entities and directly to Fannie Mae, Freddie Mac or Ginnie Mae, and we may need to make other adjustments to our mortgage operations.

Financial Services Revenues and Expenses

Total loan origination volume increased 5% and increased slightly in the three and nine months ended June 30, 2026, respectively, compared to the prior year periods. Revenues from our mortgage operations decreased 5% to $169.1 million and $462.1 million, respectively, from $177.2 million and $488.1 million in the prior year periods, primarily due to reduced profit margin on loans sold. Revenues from our title operations were $51.6 million and $136.1 million in the three and nine months ended June 30, 2026, respectively, compared to $50.6 million and $134.9 million in the prior year periods.

General and administrative (G&A) expense related to our financial services operations was $172.1 million and $477.0 million in the three and nine months ended June 30, 2026, respectively, compared to $171.0 million and $485.4 million in the prior year periods. As a percentage of financial services revenues, G&A expense was 78.0% and 79.7%, respectively, compared to 75.1% and 77.9% in the prior year periods. Fluctuations in financial services G&A expense as a percentage of revenues can occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned. Our financial services operations employed 2,862 and 2,989 people at June 30, 2026 and 2025, respectively.

Other income, net of other expense, included in our financial services operations consists primarily of the interest income of our mortgage subsidiary. Other income decreased 11% to $21.7 million and 10% to $58.8 million in the three and nine months ended June 30, 2026, respectively, from $24.5 million and $65.4 million in the prior year periods, primarily due to a decrease in interest income because of lower interest rates on our loan originations.

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RESULTS OF OPERATIONS - OTHER BUSINESSES

In addition to our homebuilding, rental, Forestar and financial services operations, we engage in other business activities through our subsidiaries. We conduct insurance-related operations, own water rights and other water-related assets and own non-residential real estate including ranch land and improvements. The pre-tax income of all of our subsidiaries engaged in other business activities was $9.0 million and $26.7 million in the three and nine months ended June 30, 2026, respectively, compared to $5.9 million and $28.6 million in the prior year periods.

RESULTS OF OPERATIONS - CONSOLIDATED

Income before Income Taxes

Pre-tax income for the three and nine months ended June 30, 2026 was $1.2 billion and $2.9 billion, respectively, compared to $1.4 billion and $3.5 billion in the prior year periods. The decreases were primarily due to a decrease in the pre-tax income of our homebuilding operations.

Income Taxes

Our income tax expense for the three and nine months ended June 30, 2026 was $307.5 million and $713.5 million, respectively, compared to $325.0 million and $831.0 million in the prior year periods. Our effective tax rate was 25.1% and 24.7% for the three and nine months ended June 30, 2026, respectively, compared to 23.9% and 23.5% in the prior year periods. The effective tax rates for all periods include an expense for state income taxes and tax benefits related to stock-based compensation and federal energy efficient home tax credits.

At June 30, 2026, we had deferred tax liabilities, net of deferred tax assets, of $43.4 million, after consideration of a valuation allowance of $14.6 million recorded against certain deferred tax assets. At September 30, 2025, we had deferred tax assets, net of deferred tax liabilities, of $44.5 million, after consideration of a valuation allowance of $14.6 million recorded against certain deferred tax assets. The valuation allowance for both periods relates to deferred tax assets for state net operating loss (NOL) and tax credit carryforwards that are expected to expire before being realized. We will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to our remaining state NOL and tax credit carryforwards. Reversal of any portion of the valuation allowance in future periods would impact our effective tax rate.

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CAPITAL RESOURCES AND LIQUIDITY

We have historically funded our operations with cash flows from operating activities, borrowings under bank credit facilities and the issuance of new debt securities. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions.

We continue to invest in our homebuilding and rental inventories to expand our operations and consolidate market share. We are also returning capital to shareholders through repurchases of our common stock and dividend payments. We are maintaining significant homebuilding cash balances and liquidity to support the scale and level of activity in our business and to provide flexibility to adjust to changing market conditions and opportunities.

At June 30, 2026, we had outstanding notes payable with varying maturities totaling an aggregate principal amount of $7.1 billion. $2.6 billion was payable within 12 months, which includes $1.8 billion outstanding under our mortgage repurchase facilities and $600 million principal amount of 1.3% homebuilding senior notes maturing in October 2026.

At June 30, 2026, our ratio of debt to total capital (notes payable divided by stockholders’ equity plus notes payable) was 23.0% compared to 19.8% at September 30, 2025 and 23.2% at June 30, 2025. Our net debt to total capital (notes payable net of cash divided by stockholders’ equity plus notes payable net of cash) was 17.4% at June 30, 2026 compared to 11.0% at September 30, 2025 and 16.2% at June 30, 2025. Over the long term, we intend to maintain our ratio of debt to total capital around 20%.

At June 30, 2026, we had outstanding letters of credit of $285.4 million and surety bonds of $3.4 billion issued by third parties to secure performance under various contracts. We expect that our performance obligations secured by these letters of credit and bonds will generally be completed in the ordinary course of business and in accordance with the applicable contractual terms. When we complete our performance obligations, the related letters of credit and bonds are generally released shortly thereafter, leaving us with no continuing obligations. We have no material third-party guarantees.

We regularly assess our projected capital requirements to fund growth in our business, repay debt obligations, pay dividends, repurchase our common stock and maintain sufficient cash and liquidity levels to support our other operational needs, and we regularly evaluate our opportunities to raise additional capital. D.R. Horton has an automatically effective universal shelf registration statement filed with the Securities and Exchange Commission (SEC) in July 2024, registering debt and equity securities that may be issued from time to time in amounts to be determined. Forestar also has an effective shelf registration statement filed with the SEC in September 2024, registering $750 million of equity securities, of which $300 million is reserved for sales under its at-the-market equity offering (ATM) program that was entered into in November 2024.

As market conditions permit, we may issue new debt or equity securities through the capital markets or obtain additional bank financing to fund our projected capital requirements or provide additional liquidity. We believe that our existing cash resources, revolving credit facilities, mortgage repurchase facilities and ability to access the capital markets or obtain additional bank financing will provide sufficient liquidity to fund our near-term working capital needs and debt obligations for the next 12 months and for the foreseeable future thereafter.

Capital Resources - Homebuilding

Cash and Cash Equivalents — At June 30, 2026, cash and cash equivalents of our homebuilding segment totaled $1.3 billion.

Bank Credit Facility — We have a senior unsecured homebuilding revolving credit facility that was amended in March 2026 to increase its capacity from $2.3 billion to $3.3 billion. The amendment also extended the maturity dates of the facility. Of the total commitments, $265 million matures on October 28, 2027, $1.0 billion matures on March 27, 2029 and $2.0 billion matures on March 27, 2031. The facility has an uncommitted accordion feature that allows for an increase in its size to $4.0 billion, subject to certain conditions and availability of additional bank commitments. The facility also provides for the issuance of letters of credit with a sublimit equal to 100% of the total revolving credit commitments.

Letters of credit issued under the facility reduce the available borrowing capacity. At June 30, 2026, there were $500 million of borrowings outstanding at a 4.5% annual interest rate and $240.3 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $2.6 billion.

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Our homebuilding revolving credit facility imposes restrictions on our operations and activities, including requiring the maintenance of a maximum allowable leverage ratio and a borrowing base restriction if our leverage ratio exceeds a certain level. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. The credit agreement governing the facility imposes restrictions on the creation of secured debt and liens.

Public Unsecured Debt — At June 30, 2026, we had $3.0 billion principal amount of homebuilding senior notes outstanding that mature from October 2026 through October 2035. The indenture governing our senior notes imposes restrictions on the creation of secured debt and liens.

Compliance and Guarantors — At June 30, 2026, we were in compliance with all of the covenants, limitations and restrictions of our homebuilding revolving credit facility and public debt obligations. Our homebuilding revolving credit facility and homebuilding senior notes are guaranteed by D.R. Horton, Inc.’s significant wholly owned homebuilding subsidiaries.

Debt and Stock Repurchase Authorizations — In July 2024, our Board of Directors authorized the repurchase of up to $500 million of our debt securities. In April 2025, the Board authorized the repurchase of up to $5.0 billion of our common stock, replacing the previous authorization. T8During the nine months ended June 30, 2026, we repurchased 14.6 million shares at a total cost including commissions and excise taxes of $2.2 billion. At June 30, 2026, the full amount of the debt repurchase authorization was remaining, and $1.1 billion of the stock repurchase authorization was remaining. The debt and stock repurchase authorizations have no expiration date.

Capital Resources - Rental

During the past few years, we have made significant investments in our rental operations. The inventory in our rental segment totaled $3.1 billion at June 30, 2026 compared to $2.7 billion at September 30, 2025 and $3.1 billion at June 30, 2025.

Cash and Cash Equivalents — At June 30, 2026, cash and cash equivalents of our rental segment totaled $118.4 million.

Bank Credit Facility — Our rental subsidiary, DRH Rental, has a $1.05 billion senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $2.0 billion, subject to certain conditions and availability of additional bank commitments. Availability under the rental revolving credit facility is subject to a borrowing base calculation based on the book value of DRH Rental’s real estate assets and unrestricted cash. The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments. The facility was amended in March 2026 to extend its maturity date to March 27, 2030. At June 30, 2026, there were $820 million of borrowings outstanding at a 5.4% annual interest rate and no letters of credit issued under the facility, resulting in available capacity of $230 million.

The rental revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants. The financial covenants require DRH Rental to maintain a minimum level of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity.

Compliance and Guarantors — At June 30, 2026, DRH Rental was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility. The rental revolving credit facility is guaranteed by DRH Rental’s wholly owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries. The rental revolving credit facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, Forestar or financial services operations.

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Capital Resources - Forestar

Forestar’s achievement of its long-term growth objectives will depend on its ability to obtain financing and generate sufficient cash flows from operations. As market conditions permit, Forestar may issue new debt or equity securities through the capital markets or obtain additional bank financing to provide capital for future growth and additional liquidity. At June 30, 2026, Forestar’s ratio of debt to total capital (notes payable divided by stockholders’ equity plus notes payable) was 30.0% compared to 31.2% at September 30, 2025 and 34.2% at June 30, 2025. Forestar’s ratio of net debt to total capital (notes payable net of cash divided by stockholders’ equity plus notes payable net of cash) was 17.7% compared to 19.3% at September 30, 2025 and 28.9% at June 30, 2025.

Cash and Cash Equivalents — At June 30, 2026, Forestar had cash and cash equivalents of $394.9 million.

Bank Credit Facility — Forestar has a $715 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1.0 billion, subject to certain conditions and availability of additional bank commitments. The current capacity of the facility reflects additional bank commitments of $25 million and $50 million obtained in October 2025 and March 2026, respectively. Of the total commitments, $65 million matures on October 28, 2026 and $650 million matures on December 18, 2029. The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments.

Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the book value of Forestar’s real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. At June 30, 2026, there were no borrowings outstanding and $45.1 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $669.9 million.

The Forestar revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants. The financial covenants require Forestar to maintain a minimum level of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity.

Unsecured Debt — As of June 30, 2026, Forestar had $800 million principal amount of senior notes issued pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, that mature from March 2028 through March 2033 and represent unsecured obligations of Forestar.

Compliance and Guarantors — At June 30, 2026, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations. Forestar’s revolving credit facility and its senior notes are guaranteed by Forestar’s wholly owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries. They are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, rental or financial services operations.

Debt Repurchase Authorization — In April 2020, Forestar’s Board of Directors authorized the repurchase of up to $30 million of Forestar’s debt securities. All of the $30 million authorization was remaining at June 30, 2026, and the authorization has no expiration date.

Issuance of Common Stock — During the nine months ended June 30, 2026, there were no shares issued under Forestar’s ATM program. At June 30, 2026, $750 million remained available for issuance under Forestar’s shelf registration statement, with $300 million reserved for sales under the ATM program.

Capital Resources - Financial Services

Cash and Cash Equivalents — At June 30, 2026, cash and cash equivalents of our financial services segment totaled $255.5 million.

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Mortgage Repurchase Facilities — Our mortgage subsidiary, DHI Mortgage, has two mortgage repurchase facilities, one of which is committed and the other of which is uncommitted, that provide financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to counterparties upon receipt of funds from the counterparties. DHI Mortgage then has the right and obligation to repurchase the loans upon their sale to third-party purchasers in the secondary market or within specified time frames in accordance with the terms of the mortgage repurchase facilities.

In May 2026, the committed mortgage repurchase facility was amended to increase its capacity to $1.925 billion and extend its maturity date to May 4, 2029. The capacity of the facility can be increased to $2.0 billion subject to the availability of additional commitments. At June 30, 2026, DHI Mortgage had an obligation of $1.5 billion under the committed mortgage repurchase facility at a 5.6% annual interest rate.

At June 30, 2026, the uncommitted mortgage repurchase facility had a borrowing capacity of $500 million, of which DHI Mortgage had an obligation of $301.1 million at a 4.9% annual interest rate.

At June 30, 2026, $2.74 billion of mortgage loans held for sale with a collateral value of $2.69 billion were pledged under the committed mortgage repurchase facility, and $332.6 million of mortgage loans held for sale with a collateral value of $310.0 million were pledged under the uncommitted mortgage repurchase facility.

The mortgage repurchase facilities contain financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable indebtedness to tangible net worth ratio and its minimum required liquidity.

In the past, DHI Mortgage has been able to renew or extend its committed mortgage repurchase facility at a sufficient capacity and on satisfactory terms prior to its maturity and obtain temporary additional commitments through amendments to the facility during periods of higher-than-normal volumes of mortgages held for sale. The liquidity of our financial services business depends upon its continued ability to renew and extend the committed mortgage repurchase facility, utilize the uncommitted mortgage repurchase facility or obtain other additional financing in sufficient capacities.

Compliance and Guarantors — At June 30, 2026, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facilities. The mortgage repurchase facilities are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, rental or Forestar operations.

Operating Cash Flow Activities

In the nine months ended June 30, 2026, net cash provided by operating activities was $880.8 million compared to $949.1 million in the prior year period. Cash provided by operating activities in the current year period primarily consisted of $1.3 billion and $27.6 million of cash provided by our homebuilding and Forestar segments, respectively, partially offset by $324.6 million and $221.7 million of cash used in our rental and financial services segments, respectively.

The most significant source of cash provided by operating activities in both years was net income, partially offset by increases in our inventories which were the most significant use of cash. In the nine months ended June 30, 2026 and 2025, cash used to increase inventories was $1.0 billion and $1.6 billion, respectively, and cash used to increase our rental properties was $342.9 million and $230.8 million in those periods.

Investing Cash Flow Activities

In the nine months ended June 30, 2026, net cash used in investing activities was $213.5 million compared to $123.5 million in the prior year period. In the current year period, uses of cash included purchases of property and equipment totaling $106.6 million and the payment of $87.9 million related to a business acquisition. In the prior year period, uses of cash included purchases of property and equipment totaling $93.6 million and the payment of $53.1 million related to a business acquisition.

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Financing Cash Flow Activities

We expect the short-term financing needs of our operations will be funded with existing cash, cash generated from operations and borrowings under our credit facilities. Long-term financing needs for our operations may be funded with the issuance of senior unsecured debt securities or equity securities through the capital markets.

During the nine months ended June 30, 2026, net cash used in financing activities was $1.6 billion, consisting primarily of cash used to repurchase $2.2 billion of our common stock and payment of cash dividends totaling $388.3 million. These uses of cash were partially offset by net borrowings on our rental and homebuilding revolving credit facilities of $220 million and $500 million, respectively, and net borrowings on our mortgage repurchase facilities of $404.9 million.

During the nine months ended June 30, 2025, net cash used in financing activities was $2.7 billion, consisting primarily of cash used to repurchase $3.6 billion of our common stock, repayment of $500 million principal amount of our 2.5% homebuilding senior notes at maturity, early repurchase of $329.4 million of Forestar’s $400 million principal amount 3.85% senior notes and payment of cash dividends totaling $376.4 million. These uses of cash were partially offset by note proceeds from our issuances of $700 million principal amount of 5.5% homebuilding senior notes and $500 million principal amount of 4.85% homebuilding senior notes, note proceeds from Forestar’s issuance of $500 million principal amount of 6.5% senior notes and net borrowings on our rental revolving credit facility and mortgage repurchase facilities of $275 million and $170.4 million, respectively.

During each of the first three quarters of fiscal 2026, our Board of Directors approved a quarterly cash dividend of $0.45 per share, the most recent of which was paid on May 14, 2026 to stockholders of record on May 7, 2026. Cash dividends declared and paid in the three and nine months ended June 30, 2026 totaled $127.1 million and $388.3 million, respectively. Cash dividends of $0.40 per share were approved and paid in each quarter of fiscal 2025.

In July 2026, our Board of Directors approved a quarterly cash dividend of $0.45 per share, payable on August 13, 2026 to stockholders of record on August 6, 2026. The declaration of future cash dividends is at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, cash flows, capital requirements, financial condition and general business conditions.

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

As of June 30, 2026, D.R. Horton, Inc. had $3.0 billion principal amount of homebuilding senior notes outstanding due through October 2035 and $500 million outstanding on its homebuilding revolving credit facility.

All of the homebuilding senior notes and the homebuilding revolving credit facility are fully and unconditionally guaranteed, on a joint and several basis, by certain subsidiaries of D.R. Horton, Inc. (Guarantors or Guarantor Subsidiaries). Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by D.R. Horton, Inc. Our subsidiaries associated with the single-family and multi-family rental operations, Forestar lot development operations, financial services operations and certain other subsidiaries do not guarantee the homebuilding senior notes or the homebuilding revolving credit facility (collectively, Non-Guarantor Subsidiaries). The guarantees are senior unsecured obligations of each Guarantor and rank equal with all existing and future senior debt of such Guarantor and senior to all subordinated debt of such Guarantor.

The guarantees are effectively subordinated to any secured debt of such Guarantor to the extent of the value of the assets securing such debt. The guarantees will be structurally subordinated to indebtedness and other liabilities of Non-Guarantor Subsidiaries of the Guarantors.

The guarantees by a Guarantor Subsidiary will be automatically and unconditionally released and discharged upon: (1) the sale or other disposition of its common stock whereby it is no longer a subsidiary of ours; (2) the sale or other disposition of all or substantially all of its assets (other than to us or another Guarantor); (3) its merger or consolidation with an entity other than us or another Guarantor; or (4) its ceasing to guarantee any of our publicly traded debt securities and ceasing to guarantee any of our obligations under our homebuilding revolving credit facility.

The enforceability of the obligations of the Guarantor Subsidiaries under their guarantees may be subject to review under applicable federal or state laws relating to fraudulent conveyance or transfer, voidable preference and similar laws affecting the rights of creditors generally. In certain circumstances, a court could void the guarantees, subordinate amounts owing under the guarantees or order other relief detrimental to the holders of our guaranteed obligations. The indenture governing our homebuilding senior notes contains a “savings clause,” which limits the liability of each Guarantor on its guarantee to the maximum amount that such Guarantor can incur without risk that its guarantee will be subject to avoidance as a fraudulent transfer.

This provision may not be effective to protect such guarantees from fraudulent transfer challenges or, if it does, it may reduce such Guarantor’s obligation such that the remaining amount due and collectible under the guarantees would not suffice, if necessary, to pay the notes in full when due.

The following tables present summarized financial information for D.R. Horton, Inc. and the Guarantor Subsidiaries on a combined basis after intercompany transactions and balances have been eliminated among D.R. Horton, Inc. and the Guarantor Subsidiaries, as well as their investment in, and equity in earnings from the Non-Guarantor Subsidiaries.

D.R. Horton, Inc. and Guarantor Subsidiaries

Summarized Balance Sheet Data

June 30, 2026

September 30, 2025

(In millions)

Assets

Cash

1,195.6

2,140.3

Inventories

21,345.4

20,321.9

Amount due from Non-Guarantor Subsidiaries

1,500.5

1,540.0

Total assets

28,258.9

28,108.0

Liabilities & Stockholders’ Equity

Notes payable

3,685.3

3,154.4

Total liabilities

7,953.0

7,196.2

Stockholders’ equity

20,305.9

20,911.8

Summarized Statement of Operations Data

Nine Months Ended

June 30, 2026

Year Ended

September 30, 2025

(In millions)

Revenues

22,087.4

31,271.6

Cost of sales

17,630.3

24,646.7

Selling, general and administrative expense

1,949.5

2,565.9

Income before income taxes

2,520.6

4,130.0

Net income

1,897.9

3,154.8

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

As disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2025, our most critical accounting policies relate to revenue recognition, inventories and cost of sales, and legal claims and insurance. Since September 30, 2025, there have been no significant changes to those critical accounting policies.

As disclosed in our critical accounting policies in our Form 10-K for the fiscal year ended September 30, 2025, our reserves for construction defect claims include the estimated costs of both known claims and anticipated future claims. At June 30, 2026 and September 30, 2025, we had reserves for approximately 895 and 875 pending construction defect claims, respectively, and no individual existing claim was material to our financial statements. During the nine months ended June 30, 2026, we were notified of approximately 225 new construction defect claims and resolved 205 construction defect claims for a total cost of $65.8 million. At June 30, 2025 and September 30, 2024, we had reserves for approximately 940 and 825 pending construction defect claims, respectively, and no individual existing claim was material to our financial statements. During the nine months ended June 30, 2025, we were notified of approximately 380 new construction defect claims and resolved 265 construction defect claims for a total cost of $25.1 million.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note A to our consolidated financial statements included in this report for discussion of recent accounting pronouncements.

SEASONALITY

Although significant changes in market conditions have impacted our seasonal patterns in the past and could do so again in the future, we generally close more homes and generate greater revenues and pre-tax income in the third and fourth quarters of our fiscal year. The seasonal nature of our business can also cause significant variations in the working capital requirements for our homebuilding, rental, lot development and financial services operations. As a result of seasonal activity, our quarterly results of operations and financial position at the end of a particular fiscal quarter are not necessarily representative of the balance of our fiscal year.

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Forward-Looking Statements

Some of the statements contained in this report, as well as in other materials we have filed or will file with the SEC, statements made by us in periodic press releases and oral statements we make to analysts, stockholders and the press in the course of presentations about us, may be construed as “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s beliefs as well as assumptions made by, and information currently available to, management. These forward-looking statements typically include the words “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,” “may,” “outlook,” “plan,” “possible,” “potential,” “predict,” “projection,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other words of similar meaning.

Any or all of the forward-looking statements included in this report and in any other of our reports or public statements may not approximate actual experience, and the expectations derived from them may not be realized, due to risks, uncertainties and other factors. As a result, actual results may differ materially from the expectations or results we discuss in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to:

•the cyclical nature of the homebuilding, rental and lot development industries and changes in economic, real estate or other conditions;

•adverse developments affecting the capital markets and financial institutions, which could limit our ability to access capital, increase our cost of capital and impact our liquidity and capital resources;

•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;

•the risks associated with our land, lot and rental inventory;

•our ability to effect our growth strategies, acquisitions, investments or other strategic initiatives successfully;

•the impact of an inflationary, deflationary or higher interest rate environment;

•risks of acquiring land, building materials and skilled labor and challenges obtaining regulatory approvals;

•the effects of public health issues such as a major epidemic or pandemic on the economy and our businesses;

•the effects of weather conditions and natural disasters on our business and financial results;

•home warranty and construction defect claims;

•the effects of health and safety incidents;

•reductions in the availability of performance bonds;

•increases in the costs of owning a home;

•the effects of information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data protection laws and regulations;

•the effects of governmental regulations and environmental matters on our land development and housing operations;

•the effects of changes in income tax and securities laws;

•the effects of governmental regulations on our financial services operations;

•the effects of competitive conditions within the industries in which we operate;

•our ability to manage and service our debt and comply with related debt covenants, restrictions and limitations;

•the effects of negative publicity;

•the effects of the loss of key personnel; and

•the effects of actions by activist stockholders.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted. Additional information about issues that could lead to material changes in performance and risk factors that have the potential to affect us is contained in our annual report on Form 10-K for the fiscal year ended September 30, 2025, including the section entitled “Risk Factors,” which is filed with the SEC.

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Mentions · how they’re counted

Category	Word counter	Model’s count
AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM	0	0
Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring	—	0
Recession recession, downturn, contraction, slowdown	0	1
Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy	0	0
Buybacks share repurchase, buyback program	—	2

Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.

Source: SEC EDGAR · public domain · Highlights by Palanor