UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From              To             

Commission File Number: 1-14122

D.R. Horton, Inc.

(Exact name of registrant as specified in its charter)

Delaware	75-2386963
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1341 Horton Circle

Arlington, Texas 76011

(Address of principal executive offices) (Zip code)

(817) 390-8200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	DHI	New York Stock Exchange
5.750% Senior Notes due 2023	DHI 23A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ý

As of April 20, 2023, there were 341,071,172 shares of the registrant’s common stock, par value $.01 per share, outstanding.

D.R. HORTON, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

 

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Balance Sheets at March 31, 2023 and September 30, 2022	3
Consolidated Statements of Operations for the three and six months ended March 31, 2023 and 2022	4
Consolidated Statements of Total Equity for the three and six months ended March 31, 2023 and 2022	5
Consolidated Statements of Cash Flows for the three and six months ended March 31, 2023 and 2022	7
Notes to Consolidated Financial Statements	8
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	60
ITEM 4. Controls and Procedures	61
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	62
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	62
ITEM 6. Exhibits	63
SIGNATURES	64

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

D.R. HORTON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31, 2023		September 30, 2022
	(In millions) (Unaudited)
ASSETS
Cash and cash equivalents	$	3,051.1	$	2,540.5
Restricted cash	23.5		32.4
Total cash, cash equivalents and restricted cash	3,074.6		2,572.9
Inventories:
Construction in progress and finished homes	9,290.6		9,798.2
Residential land and lots — developed and under development	9,940.4		9,173.1
Land held for development	88.3		110.8
Land held for sale	20.4		29.4
Rental properties	3,232.0		2,544.2
Total inventory	22,571.7		21,655.7
Mortgage loans held for sale	2,124.0		2,386.0
Deferred income taxes, net of valuation allowance of $17.8 million and $17.9 million at March 31, 2023 and September 30, 2022, respectively	112.3		141.1
Property and equipment, net	509.6		471.6
Other assets	2,615.1		2,960.3
Goodwill	163.5		163.5
Total assets	$	31,170.8	$	30,351.1
LIABILITIES
Accounts payable	$	1,251.3	$	1,360.3
Accrued expenses and other liabilities	2,830.8		3,138.3
Notes payable	5,966.9		6,066.9
Total liabilities	10,049.0		10,565.5
Commitments and contingencies (Note K)
EQUITY
Preferred stock, $.10 par value, 30,000,000 shares authorized, no shares issued	—		—
Common stock, $.01 par value, 1,000,000,000 shares authorized, 400,830,778 shares issued and 341,070,276 shares outstanding at March 31, 2023 and 399,172,937 shares issued and 343,953,023 shares outstanding at September 30, 2022	4.0		4.0
Additional paid-in capital	3,358.0		3,349.5
Retained earnings	20,914.5		19,185.3
Treasury stock, 59,760,502 shares and 55,219,914 shares at March 31, 2023 and September 30, 2022, respectively, at cost	(3,563.8)		(3,142.5)
Stockholders’ equity	20,712.7		19,396.3
Noncontrolling interests	409.1		389.3
Total equity	21,121.8		19,785.6
Total liabilities and equity	$	31,170.8	$	30,351.1
See accompanying notes to consolidated financial statements.

3

D.R. HORTON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
	(In millions, except per share data) (Unaudited)
Revenues	$	7,972.9	$	7,999.0	$	15,230.6	$	15,052.4
Cost of sales	5,996.2		5,429.9		11,287.5		10,335.6
Selling, general and administrative expense	773.6		695.1		1,510.5		1,361.0
Other (income) expense	(42.2)		(9.3)		(79.9)		(24.8)
Income before income taxes	1,245.3		1,883.3		2,512.5		3,380.6
Income tax expense	295.7		441.0		594.6		792.5
Net income	949.6		1,442.3		1,917.9		2,588.1
Net income attributable to noncontrolling interests	7.4		6.0		17.0		10.2
Net income attributable to D.R. Horton, Inc.	$	942.2	$	1,436.3	$	1,900.9	$	2,577.9
Basic net income per common share attributable to D.R. Horton, Inc.	$	2.75	$	4.07	$	5.54	$	7.27
Weighted average number of common shares	342.1		353.1		343.2		354.6
Diluted net income per common share attributable to D.R. Horton, Inc.	$	2.73	$	4.03	$	5.50	$	7.20
Adjusted weighted average number of common shares	344.9		356.3		345.9		358.2
See accompanying notes to consolidated financial statements.

4

D.R. HORTON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF TOTAL EQUITY

	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Non-controlling Interests		Total Equity
	(In millions, except common stock share data) (Unaudited)
Balances at September 30, 2022 (343,953,023 shares)	$	4.0	$	3,349.5	$	19,185.3	$	(3,142.5)	$	389.3	$	19,785.6
Net income	—		—		958.7		—		9.6		968.3
Exercise of stock options (108,457 shares)	—		2.6		—		—		—		2.6
Stock issued under employee benefit plans (601,371 shares)	—		2.9		—		—		—		2.9
Cash paid for shares withheld for taxes	—		(25.7)		—		—		—		(25.7)
Stock-based compensation expense	—		22.9		—		—		—		22.9
Cash dividends declared ($0.25 per share)	—		—		(86.1)		—		—		(86.1)
Repurchases of common stock (1,384,290 shares)	—		—		—		(118.1)		—		(118.1)
Change of ownership interest in Forestar	—		(0.2)		—		—		0.2		—
Balances at December 31, 2022 (343,278,561 shares)	$	4.0	$	3,352.0	$	20,057.9	$	(3,260.6)	$	399.1	$	20,552.4
Net income	—		—		942.2		—		7.4		949.6
Exercise of stock options (234,796 shares)	—		5.6		—		—		—		5.6
Stock issued under employee benefit plans (713,217 shares)	—		4.7		—		—		—		4.7
Cash paid for shares withheld for taxes	—		(30.1)		—		—		—		(30.1)
Stock-based compensation expense	—		28.4		—		—		—		28.4
Cash dividends declared ($0.25 per share)	—		—		(85.6)		—		—		(85.6)
Repurchases of common stock (3,156,298 shares)	—		—		—		(303.2)		—		(303.2)
Change of ownership interest in Forestar	—		(2.6)		—		—		2.6		—
Balances at March 31, 2023 (341,070,276 shares)	$	4.0	$	3,358.0	$	20,914.5	$	(3,563.8)	$	409.1	$	21,121.8
See accompanying notes to consolidated financial statements.

5

D.R. HORTON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Non-controlling Interests		Total Equity
	(In millions, except common stock share data) (Unaudited)
Balances at September 30, 2021 (356,015,843 shares)	$	4.0	$	3,274.8	$	13,644.3	$	(2,036.6)	$	329.7	$	15,216.2
Net income	—		—		1,141.6		—		4.2		1,145.8
Exercise of stock options (244,182 shares)	—		5.8		—		—		—		5.8
Stock issued under employee benefit plans (727,813 shares)	—		11.4		—		—		—		11.4
Cash paid for shares withheld for taxes	—		(33.0)		—		—		—		(33.0)
Stock-based compensation expense	—		23.7		—		—		—		23.7
Cash dividends declared ($0.225 per share)	—		—		(80.1)		—		—		(80.1)
Repurchases of common stock (2,710,237 shares)	—		—		—		(278.2)		—		(278.2)
Change of ownership interest in Forestar	—		—		—		—		1.8		1.8
Balances at December 31, 2021 (354,277,601 shares)	$	4.0	$	3,282.7	$	14,705.8	$	(2,314.8)	$	335.7	$	16,013.4
Net income	—		—		1,436.3		—		6.0		1,442.3
Exercise of stock options (4,533 shares)	—		0.1		—		—		—		0.1
Stock issued under employee benefit plans (773,301 shares)	—		4.9		—		—		—		4.9
Cash paid for shares withheld for taxes	—		(28.7)		—		—		—		(28.7)
Stock-based compensation expense	—		30.9		—		—		—		30.9
Cash dividends declared ($0.225 per share)	—		—		(79.1)		—		—		(79.1)
Repurchases of common stock (3,100,000) shares)	—		—		—		(266.0)		—		(266.0)
Change of ownership in Forestar	—		(1.2)		—		—		1.2		—
Balances at March 31, 2022 (351,955,435 shares)	$	4.0	$	3,288.7	$	16,063.0	$	(2,580.8)	$	342.9	$	17,117.8
See accompanying notes to consolidated financial statements.

6

D.R. HORTON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended March 31,
	2023		2022
	(In millions) (Unaudited)
OPERATING ACTIVITIES
Net income	$	1,917.9	$	2,588.1
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	46.5		39.3
Stock-based compensation expense	51.3		54.6
Deferred income taxes	28.7		23.6
Inventory and land option charges	51.4		20.0
Changes in operating assets and liabilities:
Decrease (increase) in construction in progress and finished homes	537.3		(2,137.4)
Increase in residential land and lots – developed, under development, held for development and held for sale	(668.7)		(528.4)
Increase in rental properties	(689.2)		(655.9)
Decrease (increase) in other assets	339.8		(616.7)
Decrease (increase) in mortgage loans held for sale	262.0		(215.5)
(Decrease) increase in accounts payable, accrued expenses and other liabilities	(403.4)		593.7
Net cash provided by (used in) operating activities	1,473.6		(834.6)
INVESTING ACTIVITIES
Expenditures for property and equipment	(79.2)		(72.5)
Payments related to business acquisitions	(103.5)		—
Other investing activities	2.1		3.8
Net cash used in investing activities	(180.6)		(68.7)
FINANCING ACTIVITIES
Proceeds from notes payable	575.0		750.0
Repayment of notes payable	(650.0)		(750.8)
(Payments) borrowings on mortgage repurchase facility, net	(63.4)		84.3
Proceeds from stock associated with certain employee benefit plans	12.9		22.2
Cash paid for shares withheld for taxes	(55.8)		(61.7)
Cash dividends paid	(171.7)		(159.2)
Repurchases of common stock	(419.8)		(569.8)
Net proceeds from issuance of Forestar common stock	—		1.7
Net other financing activities	(18.5)		38.5
Net cash used in financing activities	(791.3)		(644.8)
Net increase (decrease) in cash, cash equivalents and restricted cash	501.7		(1,548.1)
Cash, cash equivalents and restricted cash at beginning of period	2,572.9		3,237.2
Cash, cash equivalents and restricted cash at end of period	$	3,074.6	$	1,689.1
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:
Notes payable issued for inventory	$	31.2	$	64.3
Stock issued under employee incentive plans	$	107.4	$	124.4
See accompanying notes to consolidated financial statements.

7

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2023

NOTE A – BASIS OF PRESENTATION

The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its wholly-owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company, unless the context otherwise requires. Noncontrolling interests represent the proportionate equity interests in consolidated entities that are not 100% owned by the Company. As of March 31, 2023, the Company owned a 63% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 37% interest the Company does not own is accounted for as noncontrolling interests. All intercompany accounts, transactions and balances have been eliminated in consolidation.

The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2022, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2022.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Seasonality

Historically, the homebuilding industry has experienced seasonal fluctuations; therefore, the operating results for the three and six months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023 or subsequent periods.

Business Acquisition

In December 2022, the Company acquired the homebuilding operations of Riggins Custom Homes in Northwest Arkansas for approximately $107 million in cash. The assets acquired included approximately 170 homes in inventory, 3,000 lots and a sales order backlog of 100 homes. The purchase price was recorded to inventory and no goodwill was recorded as a result of this transaction.

Pending Accounting Standards

In October 2021, the Financial Accounting Standards Board (FASB) issued ASU 2021-08, which requires application of ASC 606, “Revenue from Contracts with Customers,” to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination. ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date. The guidance is effective for the Company beginning October 1, 2023, with early adoption permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

8

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

March 31, 2023

NOTE B – SEGMENT INFORMATION

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 110 markets across 33 states. The Company’s operating segments are its 80 homebuilding divisions, its majority-owned Forestar residential lot development operations, its financial services operations, its rental operations and its other business activities. The Company’s reporting segments are its homebuilding reporting segments, its Forestar lot development segment, its financial services segment and its rental operations segment.

Homebuilding

The homebuilding operating segments are aggregated into six reporting segments. The reporting segments and the states in which the Company has homebuilding operations are as follows:

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

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.

Forestar

The Forestar segment is a residential lot development company with operations in 52 markets across 20 states. The Company’s 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.

Financial Services

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.

Rental

The Company’s 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 within a community and then market each community for a bulk sale of rental homes.

Other

In addition to its homebuilding, Forestar, financial services and rental operations, the Company engages in other business activities through its subsidiaries. The Company conducts insurance-related operations, owns water rights and other water-related assets, owns non-residential real estate including ranch land and improvements and owns and operates energy-related assets. The results of these operations are immaterial for separate reporting and therefore are grouped together and presented in the Eliminations and Other column in the tables that follow.

9

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

March 31, 2023

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, 2022. Financial information relating to the Company’s reporting segments is as follows:

	March 31, 2023
	Homebuilding		Forestar		Financial Services		Rental		Eliminations and Other (1)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	2,364.5	$	286.7	$	285.5	$	89.8	$	24.6	$	3,051.1
Restricted cash	8.5		—		12.6		2.4		—		23.5
Inventories:
Construction in progress and finished homes	9,437.0		—		—		—		(146.4)		9,290.6
Residential land and lots — developed and under development	8,093.0		1,920.4		—		—		(73.0)		9,940.4
Land held for development	20.7		67.6		—		—		—		88.3
Land held for sale	20.4		—		—		—		—		20.4
Rental properties	—		—		—		3,257.2		(25.2)		3,232.0
	17,571.1		1,988.0		—		3,257.2		(244.6)		22,571.7
Mortgage loans held for sale	—		—		2,124.0		—		—		2,124.0
Deferred income taxes, net	117.4		—		—		(7.1)		2.0		112.3
Property and equipment, net	381.0		5.6		4.0		2.5		116.5		509.6
Other assets	2,477.5		56.0		135.1		37.6		(91.1)		2,615.1
Goodwill	134.3		—		—		—		29.2		163.5
	$	23,054.3	$	2,336.3	$	2,561.2	$	3,382.4	$	(163.4)	$	31,170.8
Liabilities
Accounts payable	$	1,030.7	$	67.7	$	—	$	558.7	$	(405.8)	$	1,251.3
Accrued expenses and other liabilities	2,508.7		313.0		123.1		30.2		(144.2)		2,830.8
Notes payable	2,680.2		706.8		1,554.9		1,025.0		—		5,966.9
	$	6,219.6	$	1,087.5	$	1,678.0	$	1,613.9	$	(550.0)	$	10,049.0

______________

(1)Amounts include the balances of the Company’s other businesses, the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments.

10

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

March 31, 2023

	September 30, 2022
	Homebuilding		Forestar		Financial Services		Rental		Eliminations and Other (1)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	2,040.7	$	264.8	$	103.3	$	109.9	$	21.8	$	2,540.5
Restricted cash	11.3		—		19.7		1.4		—		32.4
Inventories:
Construction in progress and finished homes	9,951.5		—		—		—		(153.3)		9,798.2
Residential land and lots — developed and under development	7,322.5		1,932.6		—		—		(82.0)		9,173.1
Land held for development	21.0		89.8		—		—		—		110.8
Land held for sale	29.4		—		—		—		—		29.4
Rental properties	—		—		—		2,572.1		(27.9)		2,544.2
	17,324.4		2,022.4		—		2,572.1		(263.2)		21,655.7
Mortgage loans held for sale	—		—		2,386.0		—		—		2,386.0
Deferred income taxes, net	146.3		—		—		(7.1)		1.9		141.1
Property and equipment, net	361.8		5.7		4.3		2.0		97.8		471.6
Other assets	2,266.5		50.1		492.5		18.4		132.8		2,960.3
Goodwill	134.3		—		—		—		29.2		163.5
	$	22,285.3	$	2,343.0	$	3,005.8	$	2,696.7	$	20.3	$	30,351.1
Liabilities
Accounts payable	$	1,149.1	$	72.2	$	0.2	$	233.6	$	(94.8)	$	1,360.3
Accrued expenses and other liabilities	2,365.7		365.4		596.2		25.0		(214.0)		3,138.3
Notes payable	2,942.6		706.0		1,618.3		800.0		—		6,066.9
	$	6,457.4	$	1,143.6	$	2,214.7	$	1,058.6	$	(308.8)	$	10,565.5

______________

(1)Amounts include the balances of the Company’s other businesses, the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments.

11

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

March 31, 2023

	Three Months Ended March 31, 2023
	Homebuilding		Forestar		Financial Services		Rental		Eliminations and Other (1)		Consolidated
	(In millions)
Revenues
Home sales	$	7,449.7	$	—	$	—	$	—	$	—	$	7,449.7
Land/lot sales and other	19.9		301.5		—		—		(238.7)		82.7
Rental property sales	—		—		—		224.1		—		224.1
Financial services	—		—		216.4		—		—		216.4
	7,469.6		301.5		216.4		224.1		(238.7)		7,972.9
Cost of sales
Home sales (2)	5,843.0		—		—		—		(61.8)		5,781.2
Land/lot sales and other	13.4		225.3		—		—		(204.3)		34.4
Rental property sales	—		—		—		157.6		(0.8)		156.8
Inventory and land option charges	14.2		20.3		—		0.4		(11.1)		23.8
	5,870.6		245.6		—		158.0		(278.0)		5,996.2
Selling, general and administrative expense	545.6		22.0		146.9		53.5		5.6		773.6
Other (income) expense	(14.5)		(2.0)		(16.1)		(22.0)		12.4		(42.2)
Income before income taxes	$	1,067.9	$	35.9	$	85.6	$	34.6	$	21.3	$	1,245.3

______________

(1)Amounts include the results of the Company’s other businesses and the elimination of intercompany transactions.

(2)Amount in the Eliminations and Other column represents the recognition of 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.

12

D.R. HORTON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)

March 31, 2023

	Six Months Ended March 31, 2023
	Homebuilding		Forestar		Financial Services		Rental		Eliminations and Other (1)		Consolidated
	(In millions)
Revenues
Home sales	$	14,158.9	$	—	$	—	$	—	$	—	$	14,158.9
Land/lot sales and other	54.7		518.2		—		—		(