HORTON DR INC /DE/ MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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, 2021. 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 102 markets across 32 states, primarily under the names
of D.R. Horton, America's Builder, Emerald Homes, Express Homes and Freedom
Homes. Our common stock is included in the S&P 500 Index and listed on the New
York Stock Exchange 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, a majority-owned residential
lot development company, financial services, rental and other activities. Our
homebuilding operations are our core business and primarily include the
construction and sale of single-family homes with sales prices generally ranging
from $150,000 to more than $1,000,000, with an average closing price of $361,800
during the three months ended December 31, 2021. Approximately 91% of our home
sales revenue in the three months ended December 31, 2021 was generated from the
sale of single-family detached homes, with the remainder from the sale of
attached homes, such as townhomes, duplexes and triplexes.

Our position as the most geographically diverse and largest volume homebuilder
in the United States provides a strong platform for us to compete for new home
sales. Our product offerings include a broad range of homes for entry-level,
move-up, active adult and luxury buyers. Our entry-level homes at affordable
price points have experienced very strong demand from homebuyers, as this
segment of the new home market remains under-served, with low inventory levels
relative to demand.

At December 31, 2021, we owned 63% of the outstanding shares of Forestar Group
Inc. (Forestar), a publicly traded residential lot development company listed on
the New York Stock Exchange under the ticker symbol "FOR." Forestar is a key
part of our homebuilding strategy to enhance operational and capital efficiency
and returns by expanding relationships with land developers and increasing the
portion of our land and lot position controlled through land purchase contracts.
Forestar has made significant investments in land acquisition and development
over the last few years to expand its business across our homebuilding operating
footprint.

Our financial services operations provide mortgage financing and title agency
services to homebuyers in many of our homebuilding markets. DHI Mortgage, our
100% 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. DHI Mortgage originates
loans in accordance with purchaser guidelines and sells substantially all of its
mortgage production after origination. Our 100% owned subsidiary title companies
serve as title insurance agents by providing title insurance policies,
examination, underwriting and closing services, primarily related to our
homebuilding transactions.

Our rental segment consists of multi-family and single-family rental operations.
The multi-family rental operations develop, construct, lease and sell
residential rental properties. The single-family rental operations primarily
construct and lease single-family homes and then market the community for a bulk
sale of rental homes.

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

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PREVIEW

During the three months ended December 31, 2021, the number and value of our net
sales orders increased 5% and 29%, respectively, compared to the prior year
period. During the three months ended December 31, 2021, our number of homes
closed decreased 2%, while our home sales revenues increased 17% compared to the
prior year. Our consolidated revenues increased 19% to $7.1 billion compared to
$5.9 billion in the prior year period. Our pre-tax income was $1.5 billion in
the three months ended December 31, 2021 compared to $1.0 billion in the prior
year period, and our pre-tax operating margin was 21.2% compared to 17.4%. Net
income was $1.1 billion in the three months ended December 31, 2021 compared to
$795.2 million in the prior year period, and our diluted earnings per share was
$3.17 compared to $2.14.

In the trailing twelve months ended December 31, 2021, our return on equity
(ROE) was 32.4% compared to 24.4% in the prior year period, and our homebuilding
return on inventory (ROI) was 38.5% compared to 27.9%. 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 of the trailing five quarters divided by
five. Homebuilding ROI is calculated as homebuilding pre-tax income for the
trailing twelve months divided by average inventory, where average inventory is
the sum of ending homebuilding inventory balances for the trailing five quarters
divided by five.

During 2020, the impacts of the COVID-19 pandemic significantly disrupted
economic activity across the United States. As economic activity resumed, demand
for our homes improved significantly and has remained strong throughout fiscal
2021 and into fiscal 2022. We believe the increase in demand has been fueled by
historically low interest rates on mortgage loans and the limited supply of
homes at affordable price points across most of our markets. We are
well-positioned for increased demand with our affordable product offerings, lot
supply and housing inventory. However, multiple disruptions in the supply chain,
combined with the strong demand for new homes, have resulted in shortages in
certain building materials, which, together with tightness in the labor market,
has caused our construction cycle to lengthen. We have slowed our home sales
pace to more closely align with our production levels, and we are selling homes
later in the construction cycle when we have more certainty regarding the home
close date for our homebuyers. Based on the current availability of labor and
materials, the stage of completion of our current homes in inventory, production
schedules and capacity, we expect to continue restricting the pace of our sales
orders as necessary in our communities in the near term to match our production
levels.

Within our portfolio of land and building land, our land controlled by purchase contracts represents 76% of the land owned and controlled in both
December 31, 2021 and September 30, 2021 compared to 72% at December 31, 2020. Our relationship with Forestar and our expanded relationships with other real estate developers across the country have allowed us to continue to grow the controlled portion of our lot portfolio.

We believe our strong balance sheet and liquidity position provide us with the
flexibility to operate effectively through changing economic conditions. We plan
to continue to generate strong cash flows from our homebuilding 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 enhancing long-term value to our shareholders
by leveraging our financial and competitive position to maximize the returns on
our inventory investments and generate strong profitability and cash flows,
while managing risk and maintaining financial flexibility to navigate changing
economic conditions. Our strategy remains consistent and includes the following
initiatives:
•Developing and retaining highly experienced and productive teams of personnel
throughout our company 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.
•Modifying product offerings, sales pace, home prices and sales 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 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.
•Continuing to seek opportunities to expand the portion of our land and finished
lots controlled through purchase contracts with Forestar and other land
developers.
•Controlling the cost of goods purchased from both vendors and subcontractors.
•Improving the efficiency of our land development, construction, sales 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.
•Increasing our investments in the construction and leasing of single-family and
multi-family rental properties to meet rental demand in high growth suburban
markets and selling these properties profitably.
•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 to maintain and improve our financial and competitive position.
However, we cannot provide any assurances 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

Main financial results at and for the three months ended December 31, 2021compared to the same period of 2020, were as follows:

Construction of houses:

•Homebuilding revenues increased 17% to $6.7 billion compared to $5.7 billion.
•Homes closed decreased 2% to 18,396 homes, while the average closing price of
those homes increased 19% to $361,800.
•Net sales orders increased 5% to 21,522 homes, and the value of net sales
orders increased 29% to $8.3 billion.
•Sales order backlog increased 3% to 29,347 homes, and the value of sales order
backlog increased 24% to $11.1 billion.
•Home sales gross margin was 27.4% compared to 24.1%.
•Homebuilding SG&A expense was 7.5% of homebuilding revenues compared to 7.9%.
•Homebuilding pre-tax income was $1.3 billion compared to $922.6 million.
•Homebuilding pre-tax income was 20.0% of homebuilding revenues compared to
16.1%.
•Homebuilding cash and cash equivalents totaled $2.1 billion compared to $3.0
billion and $2.1 billion at September 30, 2021 and December 31, 2020,
respectively.
•Homebuilding inventories totaled $15.3 billion compared to $13.9 billion and
$12.1 billion at September 30, 2021 and December 31, 2020, respectively.
•Homes in inventory totaled 54,800 compared to 47,800 and 42,100 at
September 30, 2021 and December 31, 2020, respectively.
•Owned lots totaled 131,900 compared to 127,800 and 122,000 at September 30,
2021 and December 31, 2020, respectively. Lots controlled through purchase
contracts increased to 419,500 from 402,500 and 318,700 at September 30, 2021
and December 31, 2020, respectively.
•Homebuilding debt was $3.3 billion compared to $3.2 billion and $2.6 billion at
September 30, 2021 and December 31, 2020, respectively.
•Homebuilding debt to total capital was 17.3% compared to 17.8% and 17.3% at
September 30, 2021 and December 31, 2020, respectively. Net homebuilding debt to
total capital was 6.9% compared to 1.7% and 3.9% at September 30, 2021 and
December 31, 2020, respectively.

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Forestar:
•Forestar's revenues increased 33% to $407.6 million compared to $307.1 million.
Revenues in the current and prior year quarters included $330.1 million and
$294.2 million, respectively, of revenue from land and lot sales to our
homebuilding segment.
•Forestar's lots sold increased 27% to 4,516 compared to 3,567. Lots sold to
D.R. Horton totaled 4,014 compared to 3,389.
•Forestar's pre-tax income was $53.5 million compared to $29.2 million.
•Forestar's pre-tax income was 13.1% of revenues compared to 9.5%.
•Forestar's cash and cash equivalents totaled $162.5 million compared to $153.6
million and $237.4 million at September 30, 2021 and December 31, 2020,
respectively.
•Forestar's inventories totaled $2.0 billion compared to $1.9 billion and $1.5
billion at September 30, 2021 and December 31, 2020, respectively.
•Forestar's owned and controlled lots totaled 103,300 compared to 97,000 and
77,500 at September 30, 2021 and December 31, 2020, respectively. Of these lots,
38,300 were under contract to sell to or subject to a right of first offer with
D.R. Horton compared to 39,200 and 34,900 at September 30, 2021 and December 31,
2020, respectively.
•Forestar's debt was $704.9 million compared to $704.5 million and $654.1
million at September 30, 2021 and December 31, 2020, respectively.
•Forestar's debt to total capital was 40.0% compared to 41.0% and 42.3% at
September 30, 2021 and December 31, 2020, respectively. Forestar's net debt to
total capital was 33.9% compared to 35.2% and 31.8% at September 30, 2021 and
December 31, 2020, respectively.

Financial Services:
•Financial services revenues decreased 2% to $184.3 million compared to $187.2
million.
•Financial services pre-tax income decreased 20% to $67.1 million compared to
$84.1 million.
•Financial services pre-tax income was 36.4% of financial services revenues
compared to 44.9%.

Consolidated Results:
•Consolidated revenues increased 19% to $7.1 billion compared to $5.9 billion.
•Consolidated pre-tax income increased 45% to $1.5 billion compared to $1.0
billion.
•Consolidated pre-tax income was 21.2% of consolidated revenues compared to
17.4%.
•Income tax expense was $351.5 million compared to $239.1 million, and our
effective tax rate was 23.5% compared to 23.1%.
•Net income attributable to D.R. Horton increased 44% to $1.1 billion compared
to $791.8 million.
•Diluted net income per common share attributable to D.R. Horton increased 48%
to $3.17 compared to $2.14.
•Stockholders' equity was $15.7 billion compared to $14.9 billion and $12.5
billion at September 30, 2021 and December 31, 2020, respectively.
•Book value per common share increased to $44.25 compared to $41.81 and $34.33
at September 30, 2021 and December 31, 2020, respectively.
•Debt to total capital was 25.1% compared to 26.7% and 25.3% at September 30,
2021 and December 31, 2020, respectively. Net debt to total capital was 15.2%
compared to 12.9% and 12.4% at September 30, 2021 and December 31, 2020,
respectively.

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RESULTS OF OPERATIONS - HOMEBUILDING
We conduct our homebuilding operations in the geographic regions, states and
markets listed below, and we conduct our financial services operations in most
of these markets. 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.


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State                     Reporting Region/Market                                State                      Reporting Region/Market

                          Northwest Region                                                                  South Central Region
Colorado                  Colorado Springs                                       Oklahoma                   Oklahoma City
                          Denver                                                                            Tulsa
                          Fort Collins                                           Texas                      Austin
Oregon                    Bend                                                                              Beaumont
                          Eugene/Springfield                                                                Bryan/College Station
                          Portland/Salem                                                                    Corpus Christi
Utah                      Salt Lake City                                                                    Dallas
                          St. George                                                                        Fort Worth
Washington                Seattle/Tacoma/Everett/Olympia                                                    Houston
                          Spokane                                                                           Killeen/Temple/Waco
                          Vancouver                                                                         Lubbock
                                                                                                            Midland/Odessa
                          Southwest Region                                                                  New Braunfels/San Marcos
Arizona                   Phoenix                                                                           San Antonio
                          Tucson
California                Bakersfield                                                                       East Region
                          Bay Area                                               Georgia                    Atlanta
                          Fresno/Tulare                                                                     Augusta
                          Los Angeles County                                                                Savannah
                          Modesto/Merced/Stockton                                North Carolina             Asheville
                          Riverside County                                                                  Charlotte
                          Sacramento                                                                        Greensboro/Winston-Salem
                          San Bernardino County                                                             Raleigh/Durham
                          San Diego County                                                                  Wilmington
Hawaii                    Oahu                                                   South Carolina             Charleston
Nevada                    Las Vegas                                                                         Columbia
                          Reno                                                                              Greenville/Spartanburg
New Mexico                Albuquerque                                                                       Hilton Head
                                                                                                            Myrtle Beach
                          Southeast Region                                       Tennessee                  Chattanooga
Alabama                   Birmingham                                                                        Knoxville
                          Huntsville                                                                        Memphis
                          Mobile/Baldwin County                                                             Nashville
                          Montgomery
                          Tuscaloosa                                                                        North Region
Florida                   Fort Myers/Naples                                      Delaware                   Central Delaware
                          Gainesville                                                                       Northern Delaware
                          Jacksonville                                           Illinois                   Chicago
                          Lakeland                                               Indiana                    Fort Wayne
                          Melbourne/Vero Beach                                                              Indianapolis
                          Miami/Fort Lauderdale                                                             Northwest Indiana
                          Ocala                                                  Iowa                       Des Moines
                          Orlando                                                                           Iowa City/Cedar Rapids
                          Pensacola/Panama City                                  Kentucky                   Louisville
                          Port St. Lucie                                         Maryland                   Baltimore
                          Tallahassee                                                                       Suburban Washington, D.C.
                          Tampa/Sarasota                                                                    Western Maryland
                          Volusia County                                         Minnesota                  Minneapolis/St. Paul
                          West Palm Beach                                        Nebraska                   Omaha
Louisiana                 Baton Rouge                                            New Jersey                 Northern New Jersey
                          Lake Charles/Lafayette                                                            Southern New Jersey
Mississippi               Gulf Coast                                             Ohio                       Cincinnati
                                                                                                            Columbus
                                                                                 Pennsylvania               Central Pennsylvania
                                                                                                            Philadelphia
                                                                                 Virginia                   Northern Virginia
                                                                                                            Southern Virginia
                                                                                 West Virginia              Eastern West Virginia



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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 months ended December 31, 2021 and 2020. During the fourth quarter
of fiscal 2021, we reassessed our operating segments and reportable segments and
realigned the aggregation of our homebuilding operating segments into six new
reportable segments to better allocate our homebuilding operating segments
across geographic reporting regions. Segment information for the three months
ended December 31, 2020 has been reclassified to conform to the current
presentation.

                                                                                                        Net Sales Orders (1)
                                                                                                  Three Months Ended December 31,
                                                 Net Homes Sold                                        Value (In millions)                                      Average Selling Price
                                                                          %                                                        %                                                          %
                                   2021               2020              Change              2021               2020              Change               2021                2020              Change
Northwest                              1,228               997              23  %       $   657.1          $   470.8                 40  %       $   535,100          $ 472,200                 13  %
Southwest                              2,301             2,228               3  %         1,183.8              906.7                 31  %           514,500            407,000                 26  %
South Central                          5,862             6,172              (5) %         1,946.2            1,675.8                 16  %           332,000            271,500                 22  %
Southeast                              6,394             5,930               8  %         2,284.8            1,727.4                 32  %           357,300            291,300                 23  %
East                                   3,980             3,678               8  %         1,454.9            1,118.8                 30  %           365,600            304,200                 20  %
North                                  1,757             1,413              24  %           729.6              516.5                 41  %           415,300            365,500                 14  %
                                      21,522            20,418               5  %       $ 8,256.4          $ 6,416.0                 29  %       $   383,600          $ 314,200                 22  %


                                                                                             Sales Order Cancellations
                                                                                          Three Months Ended December 31,
                                           Cancelled Sales Orders                             Value (In millions)                                Cancellation Rate (2)
                                        2021                         2020                   2021                2020                            2021                       2020
Northwest                                        148                      167           $     77.2          $    77.3                                      11  %              14  %
Southwest                                        443                      399                205.3              146.8                                      16  %              15  %
South Central                                  1,339                    1,305                433.7              342.6                                      19  %              17  %
Southeast                                      1,083                    1,431                361.0              401.5                                      14  %              19  %
East                                             661                      863                225.2              246.7                                      14  %              19  %
North                                            246                      243                 97.7               82.7                                      12  %              15  %
                                               3,920                    4,408           $  1,400.1          $ 1,297.6                                      15  %              18  %


 ________
(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.

Net Sales Orders

The number of net sales orders increased 5% in the three months ended
December 31, 2021 compared to the prior year period. The value of net sales
orders increased 29% to $8.3 billion (21,522 homes) compared to $6.4 billion
(20,418 homes) in the prior year period, primarily due to the increase in our
average selling price. The average selling price of net sales orders during the
three months ended December 31, 2021 was $383,600, up 22% from the prior year
period.

During fiscal 2021 and in the first quarter of fiscal 2022, demand for homes
remained strong. However, multiple disruptions in the supply chain, combined
with the strong demand for new homes, have resulted in shortages in certain
building materials, which, together with tightness in the labor market, has
caused our construction cycle to lengthen. As a result, we have slowed our home
sales pace to more closely align with our production levels, and we are selling
homes later in the construction cycle when we have more certainty regarding the
home close date for our homebuyers. Based on the stage of completion of our
current homes in inventory, production schedules and capacity, we expect to
continue restricting the pace of our sales orders as necessary in our
communities in the near term to match our production levels. Although these
challenges may persist to some degree for some time, we currently expect to
close more homes in fiscal 2022 than we closed in fiscal 2021.

The markets contributing most to the increase in sales volume in the Northwest
were Salt Lake City and Portland, and those contributing most to the increase in
the North were Indianapolis and Suburban Washington, D.C.

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Our customer order cancellation rate (cancelled customer orders divided by gross customer orders for the period) was 15% in the three months December 31, 2021
against 18% the previous year.

                                                                                                        Sales Order Backlog
                                                                                                        As of December 31,
                                               Homes in Backlog                                        Value (In millions)                                      Average Selling Price
                                                                         %                                                         %                                                          %
                                  2021               2020              Change              2021                2020              Change               2021                2020              Change
Northwest                             1,157             1,334             (13) %       $    605.9          $   616.7                 (2) %       $   523,700          $ 462,300                 13  %
Southwest                             3,795             3,828              (1) %          1,768.2            1,419.0                 25  %           465,900            370,700                 26  %
South Central                         9,158             8,289              10  %          3,079.2            2,250.0                 37  %           336,200            271,400                 24  %
Southeast                             8,389             7,594              10  %          3,009.2            2,231.8                 35  %           358,700            293,900                 22  %
East                                  5,069             5,038               1  %          1,849.6            1,542.2                 20  %           364,900            306,100                 19  %
North                                 1,779             2,404             (26) %            751.0              875.1                (14) %           422,100            364,000                 16  %
                                     29,347            28,487               3  %       $ 11,063.1          $ 8,934.8                 24  %       $   377,000          $ 313,600                 20  %



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.

                                                                                                   Homes Closed and Home Sales Revenue
                                                                                                     Three Months Ended December 31,
                                                    Homes Closed                                            Value (In millions)                                      Average Selling Price
                                                                               %                                                        %                                                          %
                                      2021                 2020              Change              2021               2020              Change               2021                2020              Change
Northwest                                   1,025             1,207             (15) %       $   548.9          $   547.1                  -  %       $   535,500          $ 453,300                 18  %
Southwest                                   1,944             2,142              (9) %           911.5              829.0                 10  %           468,900            387,000                 21  %
South Central                               5,437             5,221               4  %         1,692.3            1,362.5                 24  %           311,300            261,000                 19  %
Southeast                                   5,324             5,258               1  %         1,810.3            1,464.3                 24  %           340,000            278,500                 22  %
East                                        3,128             3,497             (11) %         1,074.7            1,003.1                  7  %           343,600            286,800                 20  %
North                                       1,538             1,414               9  %           618.7              492.7                 26  %           402,300            348,400                 15  %
                                           18,396            18,739              (2) %       $ 6,656.4          $ 5,698.7                 17  %       $   361,800          $ 304,100                 19  %



Home Sales Revenue

Revenues from home sales increased 17% to $6.7 billion (18,396 homes closed) for
the three months ended December 31, 2021 from $5.7 billion (18,739 homes closed)
in the prior year period. Home sales revenues increased in all of our regions,
primarily due to an increase in average selling price.

The number of homes closed decreased 2% in the three months ended December 31,
2021 compared to the prior year period, reflecting the effect of supply chain
disruptions in recent quarters. In regions with a decrease in closings volume,
the markets contributing most to the decreases were as follows: the Seattle and
Portland markets in the Northwest; the Las Vegas market in the Southwest; and
the Atlanta market in the East.


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                           Homebuilding Operating Margin Analysis
                                                       Percentages of Related Revenues
                                                              Three Months Ended
                                                                 December 31,
                                                               2021                    2020
Gross profit - home sales                                                 27.4  %     24.1  %
Gross profit - land/lot sales and other                                   25.7  %     23.5  %
Inventory and land option charges                                         (0.1) %     (0.1) %
Gross profit - total homebuilding                                         27.3  %     24.0  %
Selling, general and administrative expense                                7.5  %      7.9  %
Other (income) expense                                                    (0.1) %        -  %
Homebuilding pre-tax income                                               20.0  %     16.1  %



Home Sales Gross Profit

Gross profit from home sales increased to $1.8 billion in the three months ended
December 31, 2021 from $1.4 billion in the prior year period and increased 330
basis points to 27.4% as a percentage of home sales revenues. The percentage
increase resulted from improvements of 310 basis points due to the average
selling price of our homes closed increasing by more than the average cost of
those homes, 10 basis points due to a decrease in the amortization of
capitalized interest and 10 basis points due to a decrease in warranty and
construction defect 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. These actions could cause our
gross profit margins to fluctuate in future periods. If new home demand declines
from current levels, we would expect our gross profit margins to also decline.

Sales of land/lots and other income

Land/lot sales and other revenues from our homebuilding operations were $23.0
million and $17.9 million in the three months ended December 31, 2021 and 2020,
respectively.

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 December 31, 2021, our homebuilding
operations had $24.8 million of land held for sale that we expect to sell in the
next twelve months.

Inventory and land option costs

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 of
December 31, 2021, we determined that no communities were impaired, and no
impairment charges were recorded during the three months ended December 31, 2021
compared to $5.6 million of impairment charges recorded in the prior year
period.

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 additional impairment charges which could be significant.



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During the three months ended December 31, 2021, earnest money and
pre-acquisition cost write-offs related to land purchase contracts that we have
terminated or expect to terminate were $3.9 million compared to $2.3 million in
the same period of fiscal 2020.

Selling, general and administrative (SG&A) expenses

SG&A expense from homebuilding activities increased 11% to $497.7 million in the
three months ended December 31, 2021 from $449.4 million in the prior year
period. SG&A expense as a percentage of homebuilding revenues was 7.5% and 7.9%
in the three months ended December 31, 2021 and 2020, respectively.

Employee compensation and related costs were $409.6 million and $356.0 million
in the three months ended December 31, 2021 and 2020, respectively, representing
82% and 79% of SG&A costs in those periods. These costs increased 15% in the
three months ended December 31, 2021 from the prior year period. Our
homebuilding operations employed 8,699 and 7,583 people at December 31, 2021 and
2020, respectively.

We try to control our SG&A costs while ensuring that our infrastructure adequately supports our operations; however, we cannot guarantee that we will be able to maintain or improve on current SG&A expenses as a percentage of revenue.

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. Interest incurred by
our homebuilding operations was $24.8 million and $24.4 million in the three
months ended December 31, 2021 and 2020, respectively. Interest charged to cost
of sales was 0.7% and 0.8% of total cost of sales (excluding inventory and land
option charges), respectively, in those periods.

Other income

Other income, net of other expenses, included in our homebuilding operations was
$6.2 million and $2.1 million in the three months ended December 31, 2021 and
2020, respectively. 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.

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Results of residential construction by Reporting region

                                                                                           Three Months Ended December 31,
                                                                   2021                                                                       2020
                                                            Homebuilding          Pre-tax Income as a                                  Homebuilding          Pre-tax Income as a
                                     Homebuilding             Pre-tax                Percentage of              Homebuilding             Pre-tax                Percentage of
                                       Revenues              Income (1)          Homebuilding Revenues            Revenues              Income (1)          Homebuilding Revenues
                                                                                                    (In millions)
Northwest                          $       569.0          $       111.8                         19.6  %       $       548.0          $        86.8                         15.8  %
Southwest                                  911.6                  159.3                         17.5  %               838.6                  115.2                         13.7  %
South Central                            1,694.3                  354.3                         20.9  %             1,363.5                  240.0                         17.6  %
Southeast                                1,810.9                  415.4                         22.9  %             1,465.0                  247.2                         16.9  %
East                                     1,074.9                  202.3                         18.8  %             1,007.7                  170.7                         16.9  %
North                                      618.7                   89.9                         14.5  %               493.8                   62.7                         12.7  %
                                   $     6,679.4          $     1,333.0                         20.0  %       $     5,716.6          $       922.6                         16.1  %


 ______________
(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 increased 4% in the three months ended
December 31, 2021 compared to the prior year period, due to increases in the
average selling price of homes closed in all markets, while the number of homes
closed decreased, particularly in the Seattle and Portland markets. The region
generated pre-tax income of $111.8 million in the three months ended
December 31, 2021 compared to $86.8 million in the prior year period. Gross
profit from home sales as a percentage of home sales revenue (home sales gross
profit percentage) increased by 480 basis points in the three months ended
December 31, 2021 compared to the prior year period, primarily due to the
average selling price of homes closed increasing by more than the average cost
of those homes. As a percentage of homebuilding revenues, SG&A expenses
increased by 40 basis points in the three months ended December 31, 2021
compared to the prior year period due to increases in employee compensation and
related costs.

Southwest Region - Homebuilding revenues increased 9% in the three months ended
December 31, 2021 compared to the prior year period, primarily due to increases
in the average selling price of homes closed in most markets, while the number
of homes closed decreased, particularly in the Las Vegas market. The region
generated pre-tax income of $159.3 million in the three months ended
December 31, 2021 compared to $115.2 million in the prior year period. Home
sales gross profit percentage increased by 350 basis points in the three months
ended December 31, 2021 compared to the prior year period, primarily due to the
average selling price of homes closed increasing by more than the average cost
of those homes. As a percentage of homebuilding revenues, SG&A expenses
decreased by 20 basis points in the three months ended December 31, 2021
compared to the prior year period.

South Central Region - Homebuilding revenues increased 24% in the three months
ended December 31, 2021 compared to the prior year period, primarily due to
increases in the average selling price of homes closed in all markets, as well
as a slight increase in the number of homes closed. The region generated pre-tax
income of $354.3 million in the three months ended December 31, 2021 compared to
$240.0 million in the prior year period. Home sales gross profit percentage
increased by 250 basis points in the three months ended December 31, 2021
compared to the prior year period, primarily due to the average selling price of
homes closed increasing by more than the average cost of those homes. As a
percentage of homebuilding revenues, SG&A expenses decreased by 80 basis points
in the three months ended December 31, 2021 compared to the prior year period,
primarily due to the increase in homebuilding revenues.



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Southeast Region - Homebuilding revenues increased 24% in the three months ended
December 31, 2021 compared to the prior year period, primarily due to increases
in the average selling price of homes closed in all markets, as well as a slight
increase in the number of homes closed. The region generated pre-tax income of
$415.4 million in the three months ended December 31, 2021 compared to $247.2
million in the prior year period. Home sales gross profit percentage increased
by 460 basis points in the three months ended December 31, 2021 compared to the
prior year period, primarily due to the average selling price of homes closed
increasing by more than the average cost of those homes. As a percentage of
homebuilding revenues, SG&A expenses decreased by 90 basis points in the three
months ended December 31, 2021 compared to the prior year period, primarily due
to the increase in homebuilding revenues.

East Region - Homebuilding revenues increased 7% in the three months ended
December 31, 2021 compared to the prior year period, due to increases in the
average selling price of homes closed in all markets, while the number of homes
closed decreased, particularly in the Atlanta market. The region generated
pre-tax income of $202.3 million in the three months ended December 31, 2021
compared to $170.7 million in the prior year period. Home sales gross profit
percentage increased by 170 basis points in the three months ended December 31,
2021 compared to the prior year period, primarily due to the average selling
price of homes closed increasing 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 ended December 31, 2021 compared to the prior year
period.

North Region - Homebuilding revenues increased 25% in the three months ended
December 31, 2021 compared to the prior year period, primarily due to increases
in the average selling price of homes closed in all markets, as well as
increases in the number of homes closed in several markets. The region generated
pre-tax income of $89.9 million in the three months ended December 31, 2021
compared to $62.7 million in the prior year period. Home sales gross profit
percentage increased by 200 basis points in the three months ended December 31,
2021 compared to the prior year period, primarily due to the average selling
price of homes closed increasing by more than the average cost of those homes.
As a percentage of homebuilding revenues, SG&A expenses were unchanged in the
three months ended December 31, 2021 compared to the prior year period as
employee compensation and related costs increased at a similar rate as revenues.

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BUILDING INVENTORIES, LAND AND LAND POSITIONS AND HOUSES 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.

Inventories in our residential construction segment at December 31, 2021 and September 30, 2021 are summarized as follows:

                                                                                 As of December 31, 2021
                                                               Residential
                                                                Land/Lots
                                     Construction in          Developed and
                                       Progress and               Under                  Land Held              Land Held
                                      Finished Homes           Development            for Development           for Sale            Total Inventory
                                                                                      (In millions)
Northwest                           $         667.3          $       781.5          $              -          $      2.0          $        1,450.8
Southwest                                   1,330.1                1,387.0                       7.0                19.2                   2,743.3
South Central                               2,208.1                1,563.7                       0.3                 0.1                   3,772.2
Southeast                                   2,222.0                1,209.9                      13.0                   -                   3,444.9
East                                        1,296.4                  820.5                         -                 1.4                   2,118.3
North                                       1,032.1                  519.2                       5.3                 1.8                   1,558.4
Corporate and unallocated (1)                 123.5                   84.9                       0.3                 0.3                     209.0
                                    $       8,879.5          $     6,366.7          $           25.9          $     24.8          $       15,296.9



                                                                               As of September 30, 2021
                                                              Residential
                                                               Land/Lots
                                    Construction in          Developed and
                                      Progress and               Under                  Land Held              Land Held
                                     Finished Homes           Development            for Development           for Sale            Total Inventory
                                                                                     (In millions)
Northwest                          $         609.6          $       685.4          $              -          $     12.5          $        1,307.5
Southwest                                  1,113.5                1,315.8                       6.9                 9.4                   2,445.6
South Central                              1,977.4                1,501.5                       0.4                   -                   3,479.3
Southeast                                  2,002.4                1,160.1                      16.1                   -                   3,178.6
East                                       1,124.6                  792.3                       1.3                 1.4                   1,919.6
North                                        901.4                  460.4                       5.3                 1.8                   1,368.9
Corporate and unallocated (1)                119.1                   88.5                       0.4                 0.3                     208.3
                                   $       7,848.0          $     6,004.0          $           30.4          $     25.4          $       13,907.8


__________

(1) Social and unallocated inventories mainly consist of capitalized interest and property taxes.

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Table of contents Position of our land and lots and houses in inventory at December 31, 2021 and
September 30, 2021 are summarized as follows:

                                             As of December 31, 2021
                                            Lots Controlled
                                                Through             Total
                                              Land and Lot        Land/Lots            Homes
                       Land/Lots                Purchase          Owned and             in
                       Owned (1)            Contracts (2)(3)      Controlled       Inventory (4)
Northwest                        10,500                32,300          42,800                3,000
Southwest                        23,500                35,200          58,700                6,500
South Central                    44,000                67,600         111,600               15,900
Southeast                        26,400               129,900         156,300               15,500
East                             18,100                98,200         116,300                8,400
North                             9,400                56,300          65,700                5,500
                                131,900               419,500         551,400               54,800
                                  24  %                 76  %          100  %



                                             As of September 30, 2021
                                             Lots Controlled
                                                 Through             Total
                                               Land and Lot        Land/Lots            Homes
                       Land/Lots                 Purchase          Owned and             in
                       Owned (1)             Contracts (2)(3)      Controlled       Inventory (4)
Northwest                          9,000                31,400          40,400                2,600
Southwest                         22,800                34,300          57,100                5,500
South Central                     42,800                79,000         121,800               14,000
Southeast                         26,700               125,500         152,200               13,600
East                              17,300                83,100         100,400                7,300
North                              9,200                49,200          58,400                4,800
                                 127,800               402,500         530,300               47,800
                                   24  %                 76  %          100  %


___________________

(1)Land/lots owned included approximately 30,100 and 30,800 owned lots that are
fully developed and ready for home construction at December 31, 2021 and
September 30, 2021, respectively. Land/lots owned also included land held for
development representing 600 and 1,300 lots at December 31, 2021 and
September 30, 2021, respectively.
(2)The total remaining purchase price of lots controlled through land and lot
purchase contracts at December 31, 2021 and September 30, 2021 was $17.1 billion
and $15.5 billion, respectively, secured by earnest money deposits of $1.3
billion and $1.1 billion, respectively. The total remaining purchase price of
lots controlled through land and lot purchase contracts at December 31, 2021 and
September 30, 2021 included $1.5 billion and $1.6 billion, respectively, related
to lot purchase contracts with Forestar, secured by $141.5 million and $151.0
million, respectively, of earnest money.
(3)Lots controlled at December 31, 2021 included approximately 38,300 lots owned
or controlled by Forestar, 20,000 of which our homebuilding divisions have under
contract to purchase and 18,300 of which our homebuilding divisions have a right
of first offer to purchase. Of these, approximately 16,700 lots were in our
Southeast region, 6,900 lots were in our East region, 5,700 lots were in our
Southwest, 4,300 lots were in our South Central region, 3,400 lots were in our
North region and 1,300 lots were in our Northwest region. Lots controlled at
September 30, 2021 included approximately 39,200 lots owned or controlled by
Forestar, 21,000 of which our homebuilding divisions had under contract to
purchase and 18,200 of which our homebuilding divisions had a right of first
offer to purchase.
(4)Approximately 25,600 and 21,700 of our homes in inventory were unsold at
December 31, 2021 and September 30, 2021, respectively. At December 31, 2021,
approximately 1,000 of our unsold homes were completed, of which approximately
100 homes had been completed for more than six months. At September 30, 2021,
approximately 900 of our unsold homes were completed, of which approximately 100
homes had been completed for more than six months. Homes in inventory exclude
approximately 1,800 model homes at both December 31, 2021 and September 30,
2021.

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RESULTS OF OPERATIONS - FORESTAR

In fiscal 2018, we acquired 75% of the outstanding shares of Forestar and at
December 31, 2021, we owned 63% of its outstanding shares. Forestar is a
publicly traded residential lot development company with operations in 55
markets across 23 states as of December 31, 2021. Forestar's segment results are
presented on their historical cost basis, consistent with the manner in which
management evaluates segment performance. (See Note B to the accompanying
financial statements for additional Forestar segment information.)

Forestar segment operating results for the three months ended
December 31, 2021 and 2020 were as follows:

                                                     Three Months Ended
                                                        December 31,
                                                      2021            2020
                                                        (In millions)
Residential lot sales                           $    404.1          $ 307.0
Tract sales and other                                  3.5              0.1
Total revenues                                  $    407.6          $ 307.1
Cost of sales                                        334.2            262.9
Selling, general and administrative expense           21.5             15.5
Other (income) expense                                (1.6)            (0.5)
Income before income taxes                      $     53.5          $  29.2



Residential land and lot sales primarily consist of the sale of single-family
lots to local, regional and national homebuilders. During the three months ended
December 31, 2021 and 2020, Forestar's lot sales, including the portion sold to
D.R. Horton and the revenues generated from those sales, were as follows:
                                                                 Three Months Ended
                                                                    December 31,
                                                                  2021            2020
                                                                   ($ in millions)
Total residential single-family lots sold                        4,516      

3,567

Residential single-family lots sold to D.R. Horton               4,014      

3,389

Revenue from sales of residential lots from sales at DR Horton $330.1

$294.2



SG&A expense for the three months ended December 31, 2021 and 2020 included
charges of $1.0 million and $1.1 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.

At December 31, 2021, Forestar owned directly or controlled through land and lot
purchase contracts approximately 103,300 residential lots, of which 4,900 are
fully developed. Approximately 38,300 of these lots are under contract to sell
to D.R. Horton or subject to a right of first offer under the master supply
agreement with D.R. Horton, and 1,000 of these lots are under contract to sell
to other builders.

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OPERATING RESULTS – 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 months ended December 31, 2021
and 2020.
                                                                            

Three months completed the 31st of December,

                                                                      2021                    2020                  % Change

Number of senior loans initiated or negotiated by DHI Mortgage for DR Horton home buyers

                                     12,089                  12,722                      (5) %
Number of homes closed by D.R. Horton                                   18,396                  18,739                      (2) %
Percentage of D.R. Horton homes financed by DHI Mortgage                    66  %                   68  %

Total number of loans issued or negotiated by DHI Mortgage for DR Horton home buyers

                                     12,111                  12,738                      (5) %

Total number of loans issued or negotiated by DHI Mortgage

                                                                12,414                  13,073                      (5) %
Captive business percentage                                                 98  %                   97  %
Loans sold by DHI Mortgage to third parties                             13,071                  13,458                      (3) %



                                                                                  Three Months Ended December 31,
                                                                           2021                 2020               % Change
                                                                                           (In millions)
Loan origination and other fees                                     $           9.5          $   11.1                     (14) %
Gains on sale of mortgage loans and mortgage servicing rights                 134.1             138.9                      (3) %
Servicing income                                                                0.5               2.4                     (79) %
Total mortgage operations revenues                                            144.1             152.4                      (5) %
Title policy premiums                                                          40.2              34.8                      16  %
Total revenues                                                                184.3             187.2                      (2) %
General and administrative expense                                            125.3             109.5                      14  %
Other (income) expense                                                         (8.1)             (6.4)                     27  %
Financial services pre-tax income                                   $          67.1          $   84.1                     (20) %




                  Financial Services Operating Margin Analysis
                                                           Percentages of
                                                     Financial Services Revenues
                                                          Three Months Ended
                                                             December 31,
                                                           2021                  2020
       General and administrative expense                           68.0  %     58.5  %
       Other (income) expense                                       (4.4) %     (3.4) %
       Financial services pre-tax income                            36.4  %     44.9  %




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Mortgage activity

The volume of loans originated by our mortgage operations is directly related to
the number of homes closed by our homebuilding operations. In the three months
ended December 31, 2021, the volume of first-lien loans originated or brokered
by DHI Mortgage for our homebuyers decreased 5% from the prior year period due
to a decrease in the number of homes closed by our homebuilding operations and
in the percentage of homes closed for which DHI Mortgage handled our homebuyers'
financing.

Homes closed by our homebuilding operations constituted 98% and 97% of DHI
Mortgage loan originations in the three months ended December 31, 2021 and 2020,
respectively. These percentages reflect DHI Mortgage's consistent focus on the
captive business provided by our homebuilding operations.

The number of loans sold decreased 3% in the three months ended December 31,
2021 compared to the prior year period. Virtually all of the mortgage loans held
for sale on December 31, 2021 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 three months ended December 31, 2021, approximately 61% of our
mortgage loans were sold directly to Fannie Mae, Freddie Mac or into securities
backed by Ginnie Mae, and 30% 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 income and expenditure

Revenues from our mortgage operations decreased 5% to $144.1 million in the
three months ended December 31, 2021 from $152.4 million in the prior year
period, primarily due to the decrease in mortgage loan originations. Revenues
from our title operations increased 16% to $40.2 million in the three months
ended December 31, 2021 from $34.8 million in the prior year period, primarily
due to an increase in the average premium collected on closing transactions.

General and administrative (G&A) expense related to our financial services
operations increased 14% to $125.3 million in the three months ended
December 31, 2021 from $109.5 million in the prior year period. As a percentage
of financial services revenues, G&A expense was 68.0% in the three months ended
December 31, 2021 compared to 58.5% in the prior year period. The increase was
primarily due to an increase in the number of employees to support increased
volume in the fourth quarter of fiscal 2021 and expected increased volume for
the remainder of fiscal 2022. Additionally, 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 2,942 and 2,403 people at
December 31, 2021 and 2020, respectively.

Other income, net of other expenses, included in our financial services activities consists mainly of interest income from our mortgage subsidiary.

As a result of the revenue decrease from a lower volume of mortgage originations
and an increase in employee related G&A expenses, pre-tax income from our
financial services operations decreased 20% to $67.1 million in the three months
ended December 31, 2021 from $84.1 million in the prior year period.

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OPERATING RESULTS – RENTAL

Our rental segment consists of multi-family and single-family rental operations.
The multi-family rental operations develop, construct, lease and sell
residential rental properties. We primarily focus on constructing garden style
multi-family rental communities, which typically accommodate 200 to 400 dwelling
units, in high growth suburban markets. The single-family rental operations
primarily construct and lease single-family homes and then market the community
for a bulk sale of rental homes. Multi-family and single-family rental property
sales are recognized as revenues, and rental income is recognized as other
income. Results of operations for the rental segment for the three months ended
December 31, 2021 and 2020 were as follows:

                                                      Three Months Ended
                                                         December 31,
                                                       2021             2020
                                                        (In millions)
Revenues
Single-family rental                            $     80.3            $ 31.8
Multi-family rental                                   76.2                 -
Total revenues                                       156.5              31.8
Cost of sales
Single-family rental                                  36.4              17.8
Multi-family rental                                   36.4                 -
Total cost of sales                                   72.8              17.8
Selling, general and administrative expense           18.5               9.3
Other (income) expense                                (4.9)             (3.9)
Income before income taxes                      $     70.1            $  8.6



During the three months ended December 31, 2021, we sold one multi-family rental
property for $76.2 million (350 total units). There were no sales of
multi-family rental properties during the prior year quarter. During the three
months ended December 31, 2021, we sold two single-family rental properties (225
total homes) for $80.3 million compared to one property sold (124 total homes)
for $31.8 million in the prior year quarter.

At December 31, 2021, our rental property inventory of $1.2 billion included
$519.2 million of inventory related to our multi-family rental operations and
$641.9 million of inventory related to our single-family rental operations. At
December 31, 2021, we had 16 multi-family rental properties, consisting of 4,870
units, under active construction and one community, consisting of 130 units,
that was substantially complete and in the lease-up phase. At December 31, 2021,
our single-family rental properties (74 total communities) included 4,800 homes
and finished lots, of which 1,100 homes were completed, and 3,400 expected lots
that were unimproved or under development.

At September 30, 2021, our rental property inventory of $840.9 million included
$425.1 million of assets related to our multi-family rental operations and
$415.8 million of assets related to our single-family rental operations. At
September 30, 2021, we had 15 multi-family rental properties, consisting of
4,340 units, under active construction and one community, consisting of 350
units, that was substantially complete and in the lease-up phase. At
September 30, 2021, our single-family rental properties (55 total communities)
included 2,650 homes and finished lots, of which 865 homes were completed, and
3,200 expected lots that were unimproved or under development.

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RESULTS OF OPERATIONS - OTHER BUSINESSES

In addition to our homebuilding, Forestar, financial services and rental
operations, we engage in other business activities through our subsidiaries. We
conduct insurance-related operations, own non-residential real estate including
ranch land and improvements and own and operate energy-related assets. The
pre-tax income of all of our subsidiaries engaged in other business activities
was $10.7 million in the three months ended December 31, 2021 compared to $6.2
million in the prior year period.



OPERATING RESULTS – CONSOLIDATED

income before taxes

Pre-tax income for the three months ended December 31, 2021 was $1.5 billion
compared to $1.0 billion in the prior year period. The increase was primarily
due to an increase in pre-tax income generated by our homebuilding operations as
a result of higher revenues from increased average selling prices and an
increase in home sales gross margin.

Income taxes

Our income tax expense for the three months ended December 31, 2021 and 2020 was
$351.5 million and $239.1 million, respectively. Our effective tax rate was
23.5% for the three months ended December 31, 2021 compared to 23.1% in the
prior year period. The effective tax rates for both periods include an expense
for state income taxes and tax benefits related to stock-based compensation and
the federal energy efficient homes tax credit. The federal energy efficient
homes tax credit expires for homes closed after December 31, 2021.

Our deferred tax assets, net of deferred tax liabilities, were $141.7 million at
December 31, 2021 compared to $159.5 million at September 30, 2021. We have a
valuation allowance of $4.1 million and $4.2 million at December 31, 2021 and
September 30, 2021, respectively, related to state deferred tax assets for net
operating loss (NOL) carryforwards that are more likely than not 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 carryforwards. Any reversal of the valuation
allowance in future periods will impact our effective tax rate.

The accounting for deferred taxes is based upon estimates of future results.
Differences between the anticipated and actual outcomes of these future results
could have a material impact on our consolidated results of operations or
financial position. Also, changes in existing federal and state tax laws and tax
rates could affect future tax results and the valuation of our deferred tax
assets.

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CAPITAL AND LIQUIDITY RESOURCES

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 have continued to increase our investments in homebuilding inventories and
single-family and multi-family rental properties to expand our operations and
grow our revenues and profitability. We are also returning capital to our
shareholders through dividend payments and repurchases of our common stock. We
are maintaining significant homebuilding cash balances to support the increased
scale and level of activity in our business and to provide flexibility to adjust
to changing conditions and opportunities.

As of December 31, 2021, we had outstanding notes payable with varying
maturities totaling an aggregate principal amount of $5.3 billion, with $1.8
billion payable within 12 months, including $1.3 billion outstanding under the
mortgage repurchase facility. At December 31, 2021, our ratio of debt to total
capital (notes payable divided by stockholders' equity plus notes payable) was
25.1% compared to 26.7% at September 30, 2021 and 25.3% at December 31, 2020.
Our net debt to total capital (notes payable net of cash divided by
stockholders' equity plus notes payable net of cash) was 15.2% at December 31,
2021 compared to 12.9% at September 30, 2021 and 12.4% and December 31, 2020.

At December 31, 2021, our ratio of homebuilding debt to total capital
(homebuilding notes payable divided by stockholders' equity plus homebuilding
notes payable) was 17.3% compared to 17.8% at September 30, 2021 and 17.3% at
December 31, 2020. Our net homebuilding debt to total capital (homebuilding
notes payable net of cash divided by stockholders' equity plus homebuilding
notes payable net of cash) was 6.9% at December 31, 2021 compared to 1.7% at
September 30, 2021 and 3.9% at December 31, 2020. Over the long term, we intend
to maintain our ratio of homebuilding debt to total capital below 30%, and we
expect it to remain significantly lower than 30% throughout fiscal 2022. We
believe that the ratio of homebuilding debt to total capital is useful in
understanding the leverage employed in our homebuilding operations and comparing
our capital structure with other homebuilders. We exclude the debt of Forestar
and our financial services business because they are separately capitalized and
not guaranteed by our parent company or any of our homebuilding entities.

At December 31, 2021, we had outstanding letters of credit of $253.5 million and
surety bonds of $2.4 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 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 2021, 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 October 2021, registering $750 million of equity securities, of
which $300 million was reserved for sales under its at-the-market equity
offering program that became effective in November 2021. At December 31, 2021,
$748.2 million remained available for issuance under Forestar's shelf
registration statement, of which $298.2 million was reserved for sales under its
at-the-market equity offering program. 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 facility 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.


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Capital Resources - Homebuilding

Cash and cash equivalents – Au December 31, 2021cash and cash equivalents from our residential construction segment totaled $2.1 billion.

Bank Credit Facility - We have a $2.19 billion senior unsecured homebuilding
revolving credit facility with an uncommitted accordion feature that could
increase the size of the facility to $3.0 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 revolving
credit commitment. Letters of credit issued under the facility reduce the
available borrowing capacity. The interest rate on borrowings under the
revolving credit facility may be based on either the Prime Rate or London
Interbank Offered Rate (LIBOR) plus an applicable margin, as defined in the
credit agreement governing the facility. The maturity date of the facility is
April 20, 2026. At December 31, 2021, there were no borrowings outstanding and
$187.2 million of letters of credit issued under the revolving credit facility,
resulting in available capacity of $2.0 billion.

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. At December 31, 2021, we were in compliance with all
of the covenants, limitations and restrictions of our homebuilding revolving
credit facility.

Public Unsecured Debt - We have $3.15 billion principal amount of homebuilding
senior notes outstanding as of December 31, 2021 that mature from September 2022
through October 2027. The indentures governing our senior notes impose
restrictions on the creation of secured debt and liens. At December 31, 2021, we
were in compliance with all of the limitations and restrictions associated with
our public debt obligations.

Debt and Stock Repurchase Authorizations - In July 2019, our Board of Directors
authorized the repurchase of up to $500 million of debt securities. In April
2021, our Board of Directors authorized the repurchase of up to $1.0 billion of
our common stock, replacing the prior authorization. During the three months
ended December 31, 2021, we repurchased 2.7 million shares of our common stock
for $278.2 million. At December 31, 2021, the full amount of the debt repurchase
authorization was remaining, and $268.0 million of the stock repurchase
authorization was remaining. These authorizations have no expiration date.

Capital resources – Forestar

The achievement of Forestar's long-term growth objectives will depend on its
ability to obtain financing in sufficient capacities. 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 December 31, 2021, Forestar's ratio of debt to
total capital (notes payable divided by stockholders' equity plus notes payable)
was 40.0% compared to 41.0% at September 30, 2021 and 42.3% at December 31,
2020. 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 33.9%
compared to 35.2% at September 30, 2021 and 31.8% at December 31, 2020.

Cash and cash equivalents – Au December 31, 2021Forestar had cash and cash equivalents of $162.5 million.

Bank Credit Facility - Forestar has a $410 million senior unsecured revolving
credit facility with an uncommitted accordion feature that could increase the
size of the facility to $600 million, 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 the greater of $100
million and 50% of the revolving credit commitment. Borrowings under the
revolving credit facility are subject to a borrowing base calculation based on
Forestar's book value of its real estate assets and unrestricted cash. Letters
of credit issued under the facility reduce the available borrowing capacity. The
maturity date of the facility is April 16, 2025. At December 31, 2021, there
were no borrowings outstanding and $66.3 million of letters of credit issued
under the revolving credit facility, resulting in available capacity of $343.7
million.

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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 December 31, 2021, Forestar had $700 million principal
amount of senior notes issued pursuant to Rule 144A and Regulation S under the
Securities Act of 1933, as amended, which represent unsecured obligations of
Forestar. These notes include $400 million principal amount of 3.85% senior
notes that mature in May 2026 and $300 million principal amount of 5.0% senior
notes that mature in March 2028.

Forestar's revolving credit facility and its senior notes are not guaranteed by
D.R. Horton, Inc. or any of the subsidiaries that guarantee our homebuilding
debt. At December 31, 2021, Forestar was in compliance with all of the
covenants, limitations and restrictions of its revolving credit facility and
senior note obligations.

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 December 31, 2021, and the
authorization has no expiration date.

Issuance of Common Stock - During the three months ended December 31, 2021,
Forestar issued 84,547 shares of common stock under its at-the-market equity
offering program for proceeds of $1.7 million, net of commissions and other
issuance costs totaling $0.1 million. At December 31, 2021, $748.2 million
remained available for issuance under Forestar's shelf registration statement,
of which $298.2 million was reserved for sales under its at-the-market equity
offering program.

Capital Resources – Financial Services

Cash and cash equivalents – Au December 31, 2021cash and cash equivalents from our financial services operations totaled $88.2 million.

Mortgage Repurchase Facility - Our mortgage subsidiary, DHI Mortgage, has a
mortgage repurchase facility that provides financing and liquidity to DHI
Mortgage by facilitating purchase transactions in which DHI Mortgage transfers
eligible loans to the counterparties upon receipt of funds from the
counterparties. DHI Mortgage then has the right and obligation to repurchase the
purchased loans upon their sale to third-party purchasers in the secondary
market or within specified time frames from 45 to 60 days in accordance with the
terms of the mortgage repurchase facility. The total capacity of the facility is
$1.4 billion; however, the capacity automatically increases during certain
higher volume periods and can be further increased through additional
commitments. The total capacity of the facility at December 31, 2021 was $1.633
billion, and its maturity date is February 18, 2022. DHI Mortgage expects to
renew and extend the maturity date of the facility.

As of December 31, 2021, $1.7 billion of mortgage loans held for sale with a
collateral value of $1.7 billion were pledged under the mortgage repurchase
facility. As a result of advance paydowns totaling $436.5 million, DHI Mortgage
had an obligation of $1.3 billion outstanding under the mortgage repurchase
facility at December 31, 2021 at a 2.1% annual interest rate.

The mortgage repurchase facility is not guaranteed by D.R. Horton, Inc. or any
of the subsidiaries that guarantee our homebuilding debt. The facility contains
financial covenants as to the mortgage subsidiary's minimum required tangible
net worth, its maximum allowable leverage ratio and its minimum required
liquidity. These covenants are measured and reported to the lenders monthly. At
December 31, 2021, DHI Mortgage was in compliance with all of the conditions and
covenants of the mortgage repurchase facility.

In the past, DHI Mortgage has been able to renew or extend its mortgage credit
facility at a sufficient capacity and on satisfactory terms prior to its
maturity and obtain temporary additional commitments through amendments to the
credit agreement 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 mortgage repurchase facility or to
obtain other additional financing in sufficient capacities.

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Capital Resources – Rental

Cash and Cash Equivalents - At December 31, 2021, cash and cash equivalents of
our rental operations segment totaled $44.2 million. During fiscal 2021 and
through the first quarter of fiscal 2022, we substantially increased the
investment in our rental operations. The inventory in our rental segment totaled
$1.2 billion at December 31, 2021 compared to $840.9 million at September 30,
2021 and $385.6 million at December 31, 2020. To date, we have funded our rental
operations with capital from our homebuilding operations. Our rental operations
had no debt outstanding at December 31, 2021; however, we are currently
exploring bank debt financing to fund a portion of the expected future growth.
Over the longer term, as our rental operations continue to grow, we plan to
evaluate additional capital sources to fund future growth opportunities.

Operating cash activities

In the three months ended December 31, 2021, net cash used in operating
activities was $174.1 million compared to $252.1 million in the prior year
period. Cash used in operating activities in the current year period primarily
consisted of $255.9 million and $114.7 million of cash used in our rental and
homebuilding segments, respectively, partially offset by $247.5 million and $5.8
million of cash provided by our financial services and Forestar segments. The
most significant source of cash provided by operating activities in both periods
was net income.

Cash used to increase construction in progress and finished home inventory was
$1.0 billion in the current year period compared to $591.2 million in the prior
year period. In both periods, the expenditures were made to increase our homes
in inventory in response to the strength of homebuyer demand. Cash used to
increase residential land and lots was $340.7 million in the current year period
compared to $716.8 million in the prior year period. Of these amounts, $55.5
million and $218.5 million, respectively, related to Forestar.

During the three months ended December 31, 2021, we increased our single-family
and multi-family rental properties by $319.5 million, which is reflected as cash
used in operating activities. Prior to the change in presentation of rental
operations, as discussed in Note A to the accompanying financial statements,
cash activities related to rental properties were presented as investing
activities. During the three month period ended December 31, 2020, expenditures
related to rental properties were $86.2 million and are reflected as cash used
in investing activities.

Investing Cash Flow Activities

In the three months ended December 31, 2021, net cash used in investing
activities was $26.5 million compared to $91.4 million in the prior year period.
In the current year period, uses of cash included purchases of property and
equipment totaling $30.9 million. In the prior year period, uses of cash
included expenditures related to our rental operations totaling $86.2 million,
the acquisition of the homebuilding operations of Braselton Homes for $23.0
million and purchases of property and equipment totaling $16.3 million,
partially offset by proceeds from the sale of a single-family rental community
for $31.8 million.

Financing of treasury 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 three months ended December 31, 2021, net cash used in financing
activities was $572.0 million, consisting primarily of cash used to repurchase
shares of our common stock of $303.8 million, net payments of $234.6 million on
our mortgage repurchase facility and payment of cash dividends totaling $80.1
million.

During the three months ended December 31, 2020, net cash used in financing
activities was $221.7 million, consisting primarily of repayment of $400 million
principal amount of our 2.55% homebuilding senior notes at maturity, net
payments of $163.5 million on our mortgage repurchase facility, payment of cash
dividends totaling $72.9 million and cash used to repurchase shares of our
common stock of $53.8 million. These uses of cash were partially offset by note
proceeds from our issuance of $500 million principal amount of 1.4% homebuilding
senior notes.

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During the three months ended December 31, 2021, our Board of Directors approved
a quarterly cash dividend of $0.225 per common share, which was paid on
December 15, 2021 to stockholders of record on December 6, 2021. In January
2022, our Board of Directors approved a quarterly cash dividend of $0.225 per
common share, payable on February 25, 2022 to stockholders of record on
February 17, 2022. Cash dividends of $0.20 per common share were approved and
paid in each quarter of fiscal 2021. 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.


ADDITIONAL FINANCIAL INFORMATION OF THE GUARANTOR

As of December 31, 2021, D.R. Horton, Inc. had $3.15 billion principal amount of
homebuilding senior notes outstanding due through October 2027 and no amounts
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 Forestar
lot development operations, financial services operations, multi-family
residential construction 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 indentures governing our homebuilding senior notes contain 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.

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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

                                                                      December 31,          September 30,
Summarized Balance Sheet Data                                             2021                   2021
                                                                                 (In millions)
Assets
Cash                                                                $     2,073.2          $     2,893.3
Inventories                                                              15,683.3               14,203.2
Amount due from Non-Guarantor Subsidiaries                                  704.4                  592.4
Total assets                                                             20,710.2               19,724.9
Liabilities & Stockholders' Equity
Notes payable                                                       $     3,226.7          $     3,214.0
Total liabilities                                                         6,493.5                6,157.4
Stockholders' equity                                                     14,216.7               13,567.5

                                                                      Three Months
                                                                         Ended                Year Ended
                                                                      December 31,          September 30,
Summarized Statement of Operations Data                                   2021                   2021
                                                                                 (In millions)
Revenues                                                            $     6,676.1          $    26,566.8
Cost of sales                                                             4,853.3               19,824.1
Selling, general and administrative expense                                 483.5                1,889.4
Income before income taxes                                                1,337.1                4,825.6
Net income                                                                1,023.8                3,786.5



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CRITICAL ACCOUNTING POLICIES

As disclosed in our Annual Report on Form 10-K for the year ended
September 30, 2021, our most critical accounting policies relate to revenue recognition, inventory and cost of sales, warranty and legal claims, and insurance. Because September 30, 2021no significant changes have been made to these critical accounting policies.

As disclosed in our critical accounting policies in our Form 10-K for the fiscal
year ended September 30, 2021, our reserves for construction defect claims
include the estimated costs of both known claims and anticipated future claims.
At December 31, 2021 and September 30, 2021, we had reserves for approximately
410 and 380 pending construction defect claims, respectively, and no individual
existing claim was material to our financial statements. During the three months
ended December 31, 2021, we established reserves for approximately 70 new
construction defect claims and resolved 40 construction defect claims for a
total cost of $4.3 million. At December 31, 2020 and September 30, 2020, we had
reserves for approximately 270 and 260 pending construction defect claims,
respectively, and no individual existing claim was material to our financial
statements. During the three months ended December 31, 2020, we established
reserves for approximately 30 new construction defect claims and resolved 20
construction defect claims for a total cost of $2.3 million.


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, lot development, financial services and rental 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 Securities and Exchange Commission,
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, lot development and rental housing
industries and changes in economic, real estate or other conditions;
•constriction of the credit and public capital markets, which could limit our
ability to access capital and increase our costs of capital;
•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 or investments
successfully;
•the impact of an inflationary, deflationary or higher interest rate
environment;
•supply shortages and other risks of acquiring land, building materials and
skilled labor;
•the effects of public health issues such as a major epidemic or pandemic,
including the impact of COVID-19 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 governmental regulations and environmental matters on our
homebuilding and land development operations;
•the effects of governmental regulations on our financial services operations;
•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;
•actions by activist stockholders; and
•information technology failures, data security breaches and our ability to
satisfy privacy and data protection laws and regulations.

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, 2021, including the section entitled
"Risk Factors," which is filed with the SEC.

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Contents

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