What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-11-17 compared with 2022-11-18 · 124 added, 139 removed, 237 unchanged (53% of the section changed)

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 106 markets across 33 states, primarily under the names of D.R.

Horton, America’s Builder , Emerald Homes, Express Homes and Freedom Homes.

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

Our common stock is included in the S&P 500 Index and listed on the New York Stock Exchange (NYSE) under the ticker symbol “DHI.” Unless the context otherwise requires, the terms “D.R.

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Our homebuilding business began in 1978 in Fort Worth, Texas, and our common stock has been publicly traded since 1992.

We have expanded and diversified our homebuilding operations geographically over the years by investing available capital into our existing markets, start-up operations in new markets and acquisitions of other homebuilding companies.

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

For the year ended September 30, 2022, our homebuilding operations closed 82,744 homes with an average closing price of $385,100.

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

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

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

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

Our homebuilding operations are our core business, generating 90% of our consolidated revenues of $35.5 billion in fiscal 2023, 95% of consolidated revenues of $33.5 billion in fiscal 2022 and 96% of consolidated revenues of $27.8 billion in fiscal 2021.

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Approximately 90% of our home sales revenue in fiscal 2023 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.

During fiscal 2018, we acquired 75% of the outstanding shares of Forestar Group Inc.

(Forestar), a publicly traded residential lot development company listed on the NYSE under the ticker symbol “FOR.” Forestar is a component 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.

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

Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

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

For the year ended September 30, 2023, our homebuilding operations closed 82,917 homes with an average closing price of $381,600.

Our rental segment consists of single-family and multi-family rental operations.

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.

The multi-family rental operations develop, construct, lease and sell residential rental properties, the majority of which are apartment communities.

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

At September 30, 2023, we owned 63% of the outstanding shares of Forestar Group Inc.

(Forestar), a publicly traded residential lot development company listed on the NYSE under the ticker symbol “FOR.” Forestar operates across many of our homebuilding operating markets and is a key part of our homebuilding strategy to maintain relationships with land developers and to control a large portion of our land and lot position through land purchase contracts.

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

Our financial services operations provide mortgage financing and title agency services to homebuyers in many of our homebuilding markets.

DHI Mortgage, our wholly-owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers after origination.

Our wholly-owned subsidiary title companies serve as title insurance agents by providing title insurance policies, examination, underwriting and closing services, primarily to our homebuyers.

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 within a community and then market each 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 water rights and other water-related assets, own non-residential real estate including ranch land and improvements and own and operate energy-related assets.

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

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

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

We conduct insurance-related operations, own water rights and other water-related assets and own non-residential real estate including ranch land and improvements.

The results of these operations are immaterial for separate reporting and therefore are grouped together and presented as other.

Available Information

We make available, as soon as reasonably practicable, on our website, www.drhorton.com , all of our reports required to be filed with the Securities and Exchange Commission (SEC).

We make available, as soon as reasonably practicable, on our website, www.drhorton.com , all of our reports filed with or furnished to the Securities and Exchange Commission (SEC).

These reports can be found on the “Investor Relations” section of our website under “Financial Information” and include our annual and quarterly reports on Form 10-K and 10-Q, current reports on Form 8-K, beneficial ownership reports on Forms 3, 4, and 5, proxy statements and amendments to such reports.

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Our financial statements and the notes thereto contain additional information regarding segment performance.

State Reporting Region/Market State Reporting Region/Market

Northwest Region Southeast Region (Continued)

Colorado Colorado Springs Florida Ocala

Denver Orlando

Fort Collins Pensacola/Panama City

Oregon Bend Port St.

Eugene/Springfield Tallahassee

Portland/Salem Tampa/Sarasota

Utah Salt Lake City Volusia County

George West Palm Beach

Washington Central Washington Louisiana Baton Rouge

Seattle/Tacoma/Everett/Olympia Lake Charles/Lafayette

Spokane Mississippi Gulf Coast

Southwest Region Georgia Atlanta

Arizona Phoenix Augusta

Tucson Central Georgia

California Bakersfield Savannah

Bay Area North Carolina Asheville

Fresno/Tulare Charlotte

Los Angeles County Greensboro/Winston-Salem

Modesto/Merced/Stockton New Bern/Greenville

Riverside County Raleigh/Durham

Sacramento Wilmington

San Bernardino County South Carolina Charleston

Hawaii Oahu Columbia

Nevada Las Vegas Greenville/Spartanburg

Reno Hilton Head

New Mexico Albuquerque Myrtle Beach

Tennessee Chattanooga

South Central Region Knoxville

Arkansas Northwest Arkansas Memphis

Oklahoma Oklahoma City Nashville

Texas Austin North Region

Beaumont Delaware Central Delaware

Bryan/College Station Northern Delaware

Corpus Christi Illinois Chicago

Dallas Indiana Fort Wayne

Fort Worth Indianapolis

Houston Northwest Indiana

Killeen/Temple/Waco Iowa Des Moines

Lubbock Iowa City/Cedar Rapids

Midland/Odessa Kentucky Louisville

New Braunfels/San Marcos Maryland Baltimore

San Antonio Suburban Washington, D.C.

Western Maryland

Southeast Region Minnesota Minneapolis/St.

Alabama Birmingham Nebraska Omaha

Huntsville New Jersey Northern New Jersey

Mobile/Baldwin County Southern New Jersey

Montgomery Ohio Cincinnati

Tuscaloosa Columbus

Florida Fort Myers/Naples Pennsylvania Central Pennsylvania

Gainesville Philadelphia

Jacksonville Virginia Northern Virginia

Lakeland Richmond

Melbourne/Vero Beach Virginia Beach/Williamsburg

Miami/Fort Lauderdale West Virginia Eastern West Virginia

State Reporting Region/Market State Reporting Region/Market State Reporting Region/Market

Northwest Region Southeast Region North Region

Colorado Colorado Springs Alabama Birmingham Delaware Southern Delaware

Denver Huntsville Northern Delaware

Fort Collins Mobile/Baldwin County Illinois Chicago

Oregon Bend Montgomery Indiana Fort Wayne

Eugene/Springfield Tuscaloosa Indianapolis

Medford Florida Fort Myers/Naples Northwest Indiana

Portland/Salem Gainesville Iowa Des Moines

Utah Salt Lake City Jacksonville Iowa City/Cedar Rapids

George Lakeland Kentucky Louisville

Washington Central Washington Melbourne/Vero Beach Maryland Baltimore

Kennewick/Pasco/Richland Miami/Fort Lauderdale Eastern Maryland

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

Spokane Orlando Western Maryland

Vancouver Panama City Minnesota Minneapolis/St.

Pensacola Nebraska Omaha

Southwest Region Port St.

Lucie New Jersey Northern New Jersey

Arizona Phoenix Tallahassee Southern New Jersey

Tucson Tampa/Sarasota Ohio Cincinnati

California Bakersfield Volusia County Columbus

Bay Area West Palm Beach Pennsylvania Central Pennsylvania

Fresno/Tulare Louisiana Baton Rouge Philadelphia

Los Angeles County Lake Charles/Lafayette Pittsburgh

Modesto/Merced/Stockton Mississippi Gulf Coast Virginia Northern Virginia

Redding/Chico/Yuba City Jackson Richmond

Riverside County Virginia Beach/Williamsburg

Sacramento East Region Western Virginia

San Bernardino County Georgia Atlanta West Virginia Eastern West Virginia

Hawaii Oahu Augusta

Nevada Las Vegas Central Georgia

Reno Savannah

New Mexico Albuquerque Valdosta

North Carolina Asheville

South Central Region Charlotte

Arkansas Northwest Arkansas Greensboro/Winston-Salem

Oklahoma Oklahoma City New Bern/Greenville

Tulsa Raleigh/Durham

Texas Abilene Wilmington

Austin South Carolina Charleston

Beaumont Columbia

Bryan/College Station Greenville/Spartanburg

Corpus Christi Hilton Head

Dallas Myrtle Beach

East Texas Tennessee Chattanooga

Fort Worth Knoxville

Houston Memphis

Killeen/Temple/Waco Nashville

Lubbock Northeast Tennessee

Midland/Odessa

New Braunfels/San Marcos

When evaluating new or existing homebuilding markets for purposes of capital allocation, we consider local, market-specific factors, including among others:

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Economies of Scale

We are the largest homebuilding company in the United States in fiscal 2022 as measured by number of homes closed, and we are also one of the largest builders in most of the markets in which we operate.

We are the largest homebuilding company in the United States as measured by number of homes closed in fiscal 2023, and we are also one of the largest builders in most of the markets in which we operate.

We believe that our national, regional and local scale of operations provides us with benefits that may not be available to the same degree to some other smaller homebuilders, such as:

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• Obtaining all necessary land development and home construction approvals;

• Selecting land development subcontractors and ensuring their work meets our contracted scopes;

• Selecting subcontractors and ensuring their work meets our contracted scopes;

• Selecting building and architectural plans;

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

• Planning and managing home construction schedules;

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• Environmental assessments of land and lot acquisitions;

• Technology systems to support management of operations, marketing and financial information;

• Technology systems to support management of operations, marketing and financial information, including preventing, monitoring and reporting of cybersecurity issues;

• Accounting and management reporting;

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• Negotiation of national purchasing contracts;

• Administration, reporting and monitoring of customer satisfaction surveys and resolutions of issues;

• Administration, reporting and monitoring of customer surveys and resolutions of issues;

• Approval of major personnel decisions and management incentive compensation plans.

Land/Lot Acquisition and Inventory Management

We acquire land for use in our homebuilding and rental operations after we have completed due diligence and generally after we have obtained the rights (known as entitlements) to begin development or construction work resulting in an acceptable number of residential lots.

We acquire land for use in our operations after we have completed due diligence and generally after we have obtained the rights (known as entitlements) to begin development or construction work resulting in an acceptable number of residential lots.

Before we acquire lots or tracts of land, we complete a feasibility study, which includes soil tests, independent environmental studies, other engineering work and financial analysis.

We also evaluate the status of necessary zoning and other governmental entitlements required to develop and use the property for home construction.

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

We also enter into land/lot contracts, in which we obtain the right, but generally not the obligation, to buy land or lots at predetermined prices on a defined schedule commensurate with anticipated home closings or planned development.

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This enables us to control land and lot positions with limited capital investment, which substantially reduces the risks associated with land ownership.

We directly acquire almost all of our land and lot positions.

We are a party to a small number of joint ventures.

Joint ventures are consolidated if we have a controlling interest, or accounted for under the equity method of accounting if we have a significant influence, but not control.

We attempt to mitigate our exposure to real estate inventory risks by:

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Subcontractors typically are selected after a competitive bidding process and are retained for a specific subdivision or series of house plans pursuant to a contract that obligates the subcontractor to complete the scope of work at an agreed-upon price.

We employ land development managers and construction superintendents to monitor land development and home construction activities, participate in major building decisions, coordinate the activities of subcontractors and suppliers, review the work of subcontractors for quality and cost controls and monitor compliance with zoning and building codes.

In addition, our construction superintendents interact with our homebuyers during the construction process and instruct buyers on post-closing home maintenance.

We employ land development and construction personnel to monitor construction activities, participate in major building decisions, coordinate the activities of subcontractors and suppliers, review the work of subcontractors for quality and cost controls and monitor compliance with zoning and building codes.

In addition, our construction personnel interact with our homebuyers during the construction process and instruct buyers on post-closing home maintenance.

Our home designs are selected or prepared in each of our markets to appeal to local homebuyers’ expectations for affordability, home size and features, and our local management teams adjust product offerings to meet buyer demand as necessary.

In many communities, we offer optional interior and exterior features to homebuyers for an additional charge.

Construction time for our homes depends on the availability of labor, materials and supplies, the weather, the size of the home and other factors.

We completed the construction of most homes in four to nine months during fiscal 2022, which is longer than prior years, as construction times have been impacted by the labor and materials shortages discussed below.

In some communities, we offer optional interior and exterior features to homebuyers for an additional charge.

We typically do not maintain significant inventories of land development or construction materials, except for work in progress materials for active development projects and homes under construction.

Generally, the construction materials used in our operations have been readily available from numerous sources, and we have contracts exceeding one year with certain suppliers of building materials that are cancelable at our option.

Construction time for our homes depends on the availability of labor, materials and supplies, the weather, the size of the home and other factors.

In fiscal 2021, our construction cycle time lengthened primarily due to the COVID-19 pandemic and its effects on our supply chain, which resulted in shortages of certain building materials and tightness in the construction labor market.

Continuing supply chain delays and disruptions during fiscal 2022 lengthened our construction cycle time further.

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

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

We are subject to governmental regulations that affect our land development and construction operations.

In fiscal 2021 and 2022, we frequently experienced delays in receiving the proper approvals from municipalities or other government agencies, which delayed our anticipated development and construction activities in certain communities.

We frequently experience delays in receiving the necessary approvals from municipalities or other government agencies, which often delays our anticipated development and construction activities.

Cost Controls

We control construction costs by designing our homes efficiently and by obtaining competitive bids for construction materials and labor.

We also competitively bid and negotiate pricing from our subcontractors and suppliers based on the volume of services and products we purchase on a local, regional and national basis.

We control construction costs by designing our homes efficiently, utilizing common house plans as consistently as possible and obtaining competitive bids for construction materials and labor.

We also negotiate pricing from our subcontractors and suppliers based on the volume of services and products we purchase on a local, regional and national basis.

We monitor our land development expenditures and construction costs versus budgets for each house and community, and we review our inventory levels, margins, expenses, profitability and returns for each operating market compared to both its business plan and our performance expectations.

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We primarily use the D.R.

Horton, Emerald Homes, Express Homes and Freedom Homes brand names to market and sell our homes.

Horton branded communities are the core of our business and account for the majority of our home closings, focusing primarily on the first time and first time move-up homebuyer.

Our Emerald branded communities appeal to buyers in search of higher-end move-up and luxury homes.

Our Express branded communities primarily accommodate entry-level buyers who are focused on affordability.

Our Freedom Homes brand offers homes at affordable price points to active adult buyers seeking a low-maintenance lifestyle.

Horton brand name to market and sell our homes.

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

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

We market and sell our homes primarily through commissioned employees, and the majority of our home closings also involve an independent real estate broker.

We typically conduct home sales from sales offices located in furnished model homes in each subdivision, and we generally do not offer our model homes for sale until the completion of a subdivision.

Our sales personnel assist prospective homebuyers by providing floor plans and price information, demonstrating the features and layouts of our homes and assisting with the selection of options, when available.

Our sales personnel assist prospective homebuyers by providing floor plans and pricing information, demonstrating the features and layouts of our homes and assisting with the selection of options, if available.

We train and inform our sales personnel regarding construction schedules and marketing and advertising plans.

As market conditions warrant, we may provide potential homebuyers with incentives, such as discounts or included upgrades, to be competitive in a particular market or to attain our targeted sales pace.

As market conditions warrant, we may provide potential homebuyers with a variety of incentives to be competitive in a particular market or to attain our targeted sales pace.

We market our homes and communities to prospective homebuyers and real estate brokers digitally, through email, search engine marketing, social media and our company website and other real estate websites, in addition to print media and advertisement.

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Our sales contracts require an earnest money deposit which varies in amount across our markets and communities.

Additionally, customers are generally required to pay additional deposits when they select options or upgrade features for their homes.

Additionally, customers are generally required to pay additional deposits if they select options or upgrade features for their homes.

Our sales contracts include a financing contingency which permits customers to cancel and receive a refund of their deposit if they cannot obtain mortgage financing at prevailing or specified interest rates within a defined period.

Our contracts may include other contingencies, such as the sale of an existing home.

Our contracts may include other contingencies, such as the sale of the customer’s existing home.

We either retain or refund customer deposits on cancelled sales contracts, depending upon the applicable provisions of the contract or other circumstances.

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At September 30, 2023, the value of our backlog of sales orders was $5.9 billion (15,197 homes), a decrease of 26% from $8.0 billion (19,614 homes) at September 30, 2022.

The average sales price of homes in backlog was $406,600 at September 30, 2022, up from the $360,900 average at September 30, 2021.

The average sales price of homes in backlog was $389,800 at September 30, 2023, down from the $406,600 average at September 30, 2022.

Many of the contracts in our sales order backlog are subject to contingencies, such as those described above, which can result in cancellations.

As a percentage of gross sales orders, cancellations of sales contracts were 20% in fiscal 2023 compared to 21% in fiscal 2022.

The length of time between the signing of a sales contract for a home and delivery of the home to the buyer (closing) is generally from two to seven months;

The length of time between the signing of a sales contract for a home and delivery of the home to the buyer (closing) is generally from two to six months;

therefore, substantially all of the homes in our sales backlog at September 30, 2023 are scheduled to close in fiscal 2024.

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Rental Properties

Our multi-family rental operations develop, construct, lease and sell residential properties that produce rental income.

We primarily focus on constructing garden style multi-family rental communities, typically accommodating 200 to 400 dwelling units in high growth suburban markets.

We sold 775 multi-family rental units in fiscal 2022 compared to 959 units in fiscal 2021.

Our single-family rental operations construct and lease single-family homes within a community and then market each community for a bulk sale of rental homes.

We sold 6,175 single-family rental homes in fiscal 2023 compared to 774 homes in fiscal 2022.

Our multi-family rental operations develop, construct, lease and sell residential rental properties.

We primarily focus on constructing garden style apartment communities in high growth suburban markets.

We sold 2,112 multi-family rental units in fiscal 2023 compared to 775 units in fiscal 2022.

Forestar Residential Lot Development Operations

During fiscal 2018, we acquired 75% of the outstanding shares of Forestar.

Forestar is a residential lot development company with operations in 53 markets across 21 states as of September 30, 2022.

We owned approximately 63% of Forestar’s outstanding common stock at September 30, 2022.

Forestar is a component of our homebuilding strategy to enhance operational efficiency and returns by expanding relationships with land developers and increasing the portion of our land and lot position controlled through land purchase contracts.

We own approximately 63% of the outstanding shares of Forestar, a publicly traded residential lot development company with operations in 54 markets across 22 states as of September 30, 2023.

Forestar is a key part of our homebuilding strategy to maintain relationships with land developers and to control a large portion of our land and lot position through land purchase contracts.

Forestar is investing in land acquisition and development to expand its residential lot development business across a geographically diversified national platform and consolidate market share in the fragmented U.S.

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DHI Mortgage assists in the sales transaction by coordinating the mortgage application, mortgage commitment and home closing processes to facilitate a timely and efficient experience for our homebuyers.

During the year ended September 30, 2022, DHI Mortgage provided mortgage financing services for approximately 69% of our total homes closed, and approximately 98% of DHI Mortgage’s loan volume related to homes closed by our homebuilding operations.

During the year ended September 30, 2023, DHI Mortgage provided mortgage financing services for 76% of the homes closed by our homebuilding operations, and those loans accounted for 99% of DHI Mortgage’s total loan volume.

Most of our homebuilding divisions also work with additional mortgage lenders that offer a range of mortgage financing programs to our homebuyers.

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Title Services

Through our subsidiary title companies, we serve as a title insurance agent in selected markets by providing title insurance policies, examination, underwriting and closing services primarily to our homebuilding customers.

Through our subsidiary title companies, we serve as a title insurance agent in many of our homebuilding markets by providing title insurance policies, examination, underwriting and closing services primarily to our homebuilding customers.

Human Capital Resources

People and Culture

For the past three fiscal years, despite the COVID-19 pandemic, we increased the number of employees in all of our operating segments and made no reductions to our employee compensation plans or employee benefit plans.

As of September 30, 2023, we employed 13,450 people, of whom 9,190 work in our homebuilding operations, 2,895 in our financial services segment, 551 at our corporate office, 459 in our rental operations, 303 at our Forestar subsidiary and 52 in our other businesses.

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Our people are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

All of our employees must certify to their understanding of and adhere to a code of conduct that sets standards for appropriate behavior and includes required internal training on preventing, identifying, reporting and stopping any type of discrimination.

All of our employees must certify annually to their understanding of and adhere to a code of conduct that sets standards for appropriate behavior and includes required internal training on preventing, identifying, reporting and stopping any type of discrimination.

Recruitment, Development and Retention

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We believe this provides long-term focus and continuity to our operations while also providing opportunities for the growth and advancement of our employees.

During fiscal 2022, we held specialized trainings for employees within key business functions of our homebuilding operations, such as purchasing, construction and sales, and we held our inaugural Leadership Development Program, which provides internal training for up and coming leaders within our homebuilding operations.

Additionally, during the fiscal year, 25 employees were placed into a new homebuilding market leadership position, and of those 100% were promoted from within the organization.

During fiscal 2023, we held specialized trainings for employees within key business functions of our homebuilding operations, such as purchasing, construction, sales and financial management, as well as our Leadership Development Program, which provides internal training for future leaders across all of our operations.

During the fiscal year, 14 employees were placed into a new homebuilding market leadership position, and of those 100% were promoted from within the organization.

The long-term retention of our employees provides us with an experienced, cohesive workforce, which has been vital to achieving our goals.

Our focus on retention is evident in the length of service of our executive, regional and divisional management teams.

The average tenure of our executive team is 29 years, our homebuilding region presidents is 20 years, our homebuilding division presidents is 14 years and our city managers is greater than 10 years.

Our Board of Directors is actively involved in the Company’s executive leadership succession planning and is equally committed to our culture of promoting rising talent from within.

The average tenure of our executive team is 30 years, our homebuilding region presidents and vice presidents is 22 years and our homebuilding division presidents and city managers is 14 years.

Our Board of Directors is actively involved in our company’s executive leadership succession planning and is equally committed to our culture of promoting rising talent from within.

Compensation and Benefits

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In addition to base pay, eligible employees may participate in our incentive bonus and stock compensation plans, which align their compensation to the interests of our shareholders.

A substantial portion of our executive and senior operating leadership’s total compensation is variable, at-risk pay based on the Company’s performance.

A substantial portion of our executive and senior operating leadership’s total compensation is variable, at-risk pay based on our company’s performance.

We also offer our employees a broad range of benefits, including paid vacation, holidays, sick time and parental leave;

medical, dental and vision healthcare insurance and life insurance and disability coverage.

The Company is committed to supporting its employees in their health, wellness and financial planning goals.

Additional benefits offered include a 401(k) savings plan, employee stock purchase plan and access to professional resources to support employees with their mental and physical health, financial planning, identity theft protection and legal needs.

We are committed to supporting our employees in their health, wellness and financial planning goals.

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

Additional information about our compensation and employee benefit plans is included in Note K to the accompanying financial statements.

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Additionally, because substantially all of our land development and home construction work is performed by subcontractors, we require that our subcontractors maintain safety programs as well.

We implemented safety protocols to protect our employees and our homebuyers during the COVID-19 pandemic.

These protocols include complying with health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

Our experienced teams adapted to the changes in our work environment and managed our business successfully during this challenging time.

To support our employees throughout the pandemic, employee access to remote work and virtual meetings was expanded.

Once available, COVID-19 vaccinations were provided at no charge through Company sponsored health insurance plans.

We also have had no workforce or salary reductions related to the pandemic.

Additional information regarding human capital is available in the “ESG” section of our Investor Relations website at investor.drhorton.com, and we anticipate including more details regarding human capital and associated initiatives in our upcoming inaugural ESG report.

Additional information regarding human capital is available in the “ESG” section of our Investor Relations website at investor.drhorton.com.

Environmental, Social & Governance (ESG)

During fiscal 2022, we made significant progress on our ESG initiatives, which included conducting an ESG materiality survey and assessment to understand, confirm and prioritize the topics our stakeholders believe are important to our company.

The key topics that we plan to address in our upcoming inaugural ESG report include, but are not limited to:

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

Our inaugural ESG report also included topics that are of significant importance to our company and our stakeholders, including, but not limited to:

• Risk management;

• Board oversight, ethics, diversity and independence;

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• Responsible land development;

• Water management and efficiency;

• Greenhouse gas emissions.

We plan to publish our inaugural ESG report during the first quarter of fiscal 2023.

We are committed to publishing consistent and relevant ESG information on an annual basis, and we plan to publish our second annual ESG report during the first quarter of fiscal 2024.

Our ESG report is not considered part of or incorporated by reference in this Annual Report.

Business Acquisitions

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These inventory positions and local market knowledge and relationships could take us several years to develop through our own efforts.

We seek to limit the risks associated with acquiring other companies by conducting extensive operational, financial and legal due diligence on each acquisition and by performing financial analysis to determine that each acquisition is expected to have a positive impact on our earnings within an acceptable period of time.

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

We operate as a provider of residential housing in both the for sale and rental markets, which are highly competitive.

We compete not only for homebuyers and renters, but also for desirable properties, raw materials, skilled labor and financing.

We compete with local, regional and national companies in these industries and also with existing home sales, foreclosures and rental properties.

We compete with local, regional and national homebuilding and rental companies and also with existing home sales and rental properties.

We compete on the basis of price, location, quality and design of our homes and on mortgage financing terms.

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Our businesses compete with other companies across all industries to attract and retain highly skilled and experienced employees, managers and executives.

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

Competition for the services of these individuals increases as business conditions improve in the industries in which we operate and in the general economy.

Governmental Regulations and Environmental Matters

The homebuilding, lot development and rental housing industries are subject to extensive and complex regulations.

We operate in industries that are subject to extensive and complex regulations.

We and the subcontractors we use must comply with many federal, state and local laws and regulations.

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Additionally, our compliance with such regulations has not had, nor is expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

However, changes in regulations could increase our costs to comply with such regulations, as discussed in “Item 1A.

However, changes in regulations (such as the extensive climate-related disclosure rules proposed by the SEC) could increase our costs to comply with such regulations, as discussed in “Item 1A.

Risk Factors.”

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As a result, our operations are subject to regular, extensive examinations by the applicable agencies.

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.

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 in our homebuilding operations 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 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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business