The Company is a national homebuilder that is primarily engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in 89 markets across 29 states. The Company’s operating segments are its 52 homebuilding divisions, its majority-owned Forestar residential lot development operations, its financial services operations and its other business activities. The Company’s reporting segments are its homebuilding reporting segments, its Forestar lot development segment and its financial services segment. The homebuilding operating segments are aggregated into the following six reporting segments: East, Midwest, Southeast, South Central, Southwest and West. These reporting segments have homebuilding operations located in the following states:


			East:						Delaware, Georgia (Savannah only), Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and Virginia
			Midwest:						Colorado, Illinois, Indiana, Iowa, Minnesota and Ohio
			Southeast:						Alabama, Florida, Georgia, Mississippi and Tennessee
			South Central:						Louisiana, Oklahoma and Texas
			Southwest:						Arizona and New Mexico
			West:						California, Hawaii, Nevada, Oregon, Utah and Washington

The Company’s homebuilding divisions design, build and sell single-family detached homes on lots they develop and on fully developed lots purchased ready for home construction. To a lesser extent, the homebuilding divisions also build and sell attached homes, such as townhomes, duplexes and triplexes. Most of the revenue generated by the Company’s homebuilding operations is from the sale of completed homes and to a lesser extent from the sale of land and lots.

The Forestar segment is a residential lot development company with operations in 50 markets across 21 states. Forestar has made significant investments in land acquisition and development to expand its business across the United States. The homebuilding divisions acquire finished lots from Forestar in accordance with the master supply agreement between the two companies. Forestar’s segment results are presented on their historical cost basis, consistent with the manner in which management evaluates segment performance.

The Company’s financial services segment provides mortgage financing and title agency services to homebuyers in many of the Company’s homebuilding markets. The segment generates the substantial majority of its revenues from originating and selling mortgages and collecting fees for title insurance agency and closing services. The Company sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers.

In addition to its homebuilding, Forestar and financial services operations, the Company has subsidiaries that engage in other business activities. These subsidiaries conduct insurance-related operations, construct and own income-producing multi-family rental properties, own non-residential real estate including ranch land and improvements and own and operate oil and gas related assets. The operating results of these subsidiaries are immaterial for separate reporting and therefore are grouped together and presented as other. One of these subsidiaries, DHI Communities, constructs multi-family rental properties and has three projects under active construction and one project that was substantially complete at March 31, 2020. In November 2019, DHI Communities sold a multi-family rental property for $61.5 million and recorded a gain on the sale of $31.2 million. In February 2020, DHI Communities sold a multi-family rental property for $67.0 million and recorded a gain on the sale of $28.2 million. At March 31, 2020 and September 30, 2019, the consolidated balance sheets included $202.8 million and $204.0 million, respectively, of assets owned by DHI Communities.

The accounting policies of the reporting segments are described throughout Note A included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2019. Financial information relating to the Company’s reporting segments is as follows:


	March 31, 2020
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	1,012.6	$	438.2	$	45.8	$	26.2	$	—	$	—	$	1,522.8
Restricted cash	7.8		—		6.6		0.1		—		—		14.5
Inventories:
Construction in progress and finished homes	6,003.8		—		—		—		(34.4)		—		5,969.4
Residential land and lots — developed and under development	5,009.6		1,171.0		—		—		(29.9)		1.2		6,151.9
Land held for development	48.9		28.2		—		—		—		—		77.1
Land held for sale	26.1		—		—		—		—		—		26.1
	11,088.4		1,199.2		—		—		(64.3)		1.2		12,224.5
Mortgage loans held for sale	—		—		1,379.4		—		—		—		1,379.4
Deferred income taxes, net	136.7		8.0		—		—		10.8		(6.0)		149.5
Property and equipment, net	327.2		1.0		3.3		259.2		(1.0)		—		589.7
Other assets	891.5		29.2		203.5		47.9		(97.6)		11.6		1,086.1
Goodwill	134.3		—		—		—		—		29.2		163.5
	$	13,598.5	$	1,675.6	$	1,638.6	$	333.4	$	(152.1)	$	36.0	$	17,130.0
Liabilities
Accounts payable	$	670.6	$	23.1	$	0.2	$	13.1	$	—	$	—	$	707.0
Accrued expenses and other liabilities	1,165.7		175.6		146.7		10.5		(105.1)		(11.8)		1,381.6
Notes payable	2,480.0		640.1		1,186.5		—		—		—		4,306.6
	$	4,316.3	$	838.8	$	1,333.4	$	23.6	$	(105.1)	$	(11.8)	$	6,395.2


	September 30, 2019
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	1,043.0	$	382.8	$	43.4	$	25.1	$	—	$	—	$	1,494.3
Restricted cash	8.0		—		11.6		0.1		—		—		19.7
Inventories:
Construction in progress and finished homes	5,249.0		—		—		—		(4.0)		—		5,245.0
Residential land and lots — developed and under development	4,956.1		1,011.8		—		—		(31.4)		2.9		5,939.4
Land held for development	60.7		17.1		—		—		—		—		77.8
Land held for sale	19.8		—		—		—		—		—		19.8
	10,285.6		1,028.9		—		—		(35.4)		2.9		11,282.0
Mortgage loans held for sale	—		—		1,072.0		—		—		—		1,072.0
Deferred income taxes, net	146.4		17.4		—		—		5.1		(5.8)		163.1
Property and equipment, net	272.4		2.4		3.2		221.2		—		—		499.2
Other assets	826.2		24.2		68.3		71.5		(88.5)		11.1		912.8
Goodwill	134.3		—		—		—		—		29.2		163.5
	$	12,715.9	$	1,455.7	$	1,198.5	$	317.9	$	(118.8)	$	37.4	$	15,606.6
Liabilities
Accounts payable	$	598.6	$	16.8	$	7.0	$	11.6	$	—	$	—	$	634.0
Accrued expenses and other liabilities	1,152.5		169.5		53.0		9.3		(93.6)		(12.6)		1,278.1
Notes payable	2,047.6		460.5		888.9		—		—		2.4		3,399.4
	$	3,798.7	$	646.8	$	948.9	$	20.9	$	(93.6)	$	(10.2)	$	5,311.5


	Three Months Ended March 31, 2020
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Revenues
Home sales	$	4,363.3	$	—	$	—	$	—	$	—	$	—	$	4,363.3
Land/lot sales and other	15.5		159.1		—		9.5		(151.9)		—		32.2
Financial services	—		—		104.5		—		—		—		104.5
	4,378.8		159.1		104.5		9.5		(151.9)		—		4,500.0
Cost of sales
Home sales (5)	3,435.5		—		—		—		(11.0)		—		3,424.5
Land/lot sales and other	11.3		136.5		—		—		(130.4)		—		17.4
Inventory and land option charges	8.8		0.1		—		—		—		—		8.9
	3,455.6		136.6		—		—		(141.4)		—		3,450.8
Selling, general and administrative expense	361.8		11.2		85.9		7.8		—		0.1		466.8
Gain on sale of assets	—		(0.3)		—		(28.2)		—		—		(28.5)
Other (income) expense	(4.1)		(2.1)		(6.1)		1.9		—		—		(10.4)
Income before income taxes	$	565.5	$	13.7	$	24.7	$	28.0	$	(10.5)	$	(0.1)	$	621.3

(5)Amount in the Eliminations column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.


	Six Months Ended March 31, 2020
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Revenues:
Home sales	$	8,226.6	$	—	$	—	$	—	$	—	$	—	$	8,226.6
Land/lot sales and other	35.2		406.4		—		18.3		(373.2)		—		86.7
Financial services	—		—		207.4		—		—		—		207.4
	8,261.8		406.4		207.4		18.3		(373.2)		—		8,520.7
Cost of sales:
Home sales (5)	6,487.0		—		—		—		(17.7)		—		6,469.3
Land/lot sales and other	24.7		352.8		—		—		(323.9)		(0.7)		52.9
Inventory and land option charges	12.4		0.4		—		—		—		—		12.8
	6,524.1		353.2		—		—		(341.6)		(0.7)		6,535.0
Selling, general and administrative expense	720.2		21.7		163.8		16.7		—		0.2		922.6
Gain on sale of assets	—		(0.1)		—		(59.4)		—		—		(59.5)
Other (income) expense	(9.6)		(4.2)		(11.6)		3.5		—		—		(21.9)
Income before income taxes	$	1,027.1	$	35.8	$	55.2	$	57.5	$	(31.6)	$	0.5	$	1,144.5
Summary Cash Flow Information:
Depreciation and amortization	$	33.7	$	0.1	$	0.8	$	3.9	$	—	$	0.3	$	38.8
Cash provided by (used in) operating activities	$	52.1	$	(123.8)	$	(312.1)	$	5.5	$	(16.8)	$	—	$	(395.1)


	Three Months Ended March 31, 2019
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Revenues
Home sales	$	3,980.5	$	—	$	—	$	—	$	—	$	—	$	3,980.5
Land/lot sales and other	14.9		65.4		—		6.0		(39.7)		—		46.6
Financial services	—		—		101.6		—		—		—		101.6
	3,995.4		65.4		101.6		6.0		(39.7)		—		4,128.7
Cost of sales
Home sales (5)	3,214.2		—		—		—		(0.7)		—		3,213.5
Land/lot sales and other	9.3		43.7		—		—		(31.8)		8.2		29.4
Inventory and land option charges	13.8		—		—		—		—		—		13.8
	3,237.3		43.7		—		—		(32.5)		8.2		3,256.7
Selling, general and administrative expense	359.3		6.2		71.3		7.3		—		0.1		444.2
Gain on sale of assets	—		—		—		(29.3)		—		—		(29.3)
Other (income) expense	(1.6)		(0.9)		(3.7)		0.5		—		—		(5.7)
Income before income taxes	$	400.4	$	16.4	$	34.0	$	27.5	$	(7.2)	$	(8.3)	$	462.8


	Six Months Ended March 31, 2019
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)		Other Adjustments (4)		Consolidated
	(In millions)
Revenues:
Home sales	$	7,391.2	$	—	$	—	$	—	$	—	$	—	$	7,391.2
Land/lot sales and other	21.7		103.8		—		12.8		(68.7)		—		69.6
Financial services	—		—		186.9		—		—		—		186.9
	7,412.9		103.8		186.9		12.8		(68.7)		—		7,647.7
Cost of sales:
Home sales (5)	5,943.4		—		—		—		(1.7)		—		5,941.7
Land/lot sales and other	14.5		74.3		—		—		(56.3)		11.8		44.3
Inventory and land option charges	21.8		—		—		—		—		—		21.8
	5,979.7		74.3		—		—		(58.0)		11.8		6,007.8
Selling, general and administrative expense	683.9		11.9		137.0		13.9		—		0.3		847.0
Gain on sale of assets	(2.0)		(0.9)		—		(29.3)		—		0.9		(31.3)
Other (income) expense	(3.5)		(2.8)		(7.7)		(0.3)		—		—		(14.3)
Income before income taxes	$	754.8	$	21.3	$	57.6	$	28.5	$	(10.7)	$	(13.0)	$	838.5
Summary Cash Flow Information:
Depreciation and amortization	$	30.1	$	0.1	$	0.7	$	2.9	$	—	$	0.3	$	34.1
Cash (used in) provided by operating activities	$	(215.9)	$	(283.4)	$	48.8	$	(4.1)	$	(2.7)	$	(4.4)	$	(461.7)


Homebuilding Inventories by Reporting Segment (1)	March 31, 2020		September 30, 2019
	(In millions)
East	$	1,329.8	$	1,288.8
Midwest	903.2		836.8
Southeast	2,968.1		2,768.0
South Central	2,845.4		2,533.2
Southwest	633.8		574.4
West	2,174.1		2,056.0
Corporate and unallocated (2)	234.0		228.4
	$	11,088.4	$	10,285.6


Homebuilding Results by Reporting Segment	Three Months Ended March 31,						Six Months Ended March 31,
	2020		2019		2020		2019
	(In millions)
Revenues
East	$	579.7	$	518.2	$	1,100.2	$	965.7
Midwest	308.7		248.1		591.3		497.2
Southeast	1,316.7		1,205.3		2,467.3		2,219.2
South Central	1,066.4		990.2		2,025.1		1,862.7
Southwest	199.7		173.2		410.7		316.9
West	907.6		860.4		1,667.2		1,551.2
	$	4,378.8	$	3,995.4	$	8,261.8	$	7,412.9
Inventory and Land Option Charges
East	$	(0.5)	$	0.3	$	(0.3)	$	1.7
Midwest	1.4		0.2		1.5		0.5
Southeast	2.8		2.2		4.2		3.5
South Central	2.9		1.4		4.4		1.9
Southwest	—		0.1		0.1		0.2
West	2.2		9.6		2.5		14.0
	$	8.8	$	13.8	$	12.4	$	21.8
Income before Income Taxes (1)
East	$	73.3	$	45.9	$	133.2	$	83.9
Midwest	23.6		9.5		42.3		20.2
Southeast	187.8		131.0		333.9		243.2
South Central	156.2		119.3		288.9		225.3
Southwest	30.8		18.6		65.3		36.3
West	93.8		76.1		163.5		145.9
	$	565.5	$	400.4	$	1,027.1	$	754.8

(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 the Company’s corporate office. The amortization of capitalized interest and property taxes is allocated to each homebuilding segment based on the segment’s cost of sales, while expenses associated with the corporate office are allocated to each homebuilding segment based on the segment’s inventory balances.