What changed in this filing

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Item 1. Business

2024-11-19 compared with 2023-11-17 · 66 added, 66 removed, 295 unchanged (31% of the section changed)

6 unchanged sentences

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.

We have closed more than 1.1 million homes during our 46-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.

Our homebuilding operations are our core business, generating 92% of consolidated revenues of $36.8 billion in fiscal 2024, 90% of consolidated revenues of $35.5 billion in fiscal 2023 and 95% of consolidated revenues of $33.5 billion in fiscal 2022.

Our homebuilding operations generate most of their revenues from the sale of completed homes and to a lesser extent from the sale of land and lots.

4 unchanged sentences

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 single-family rental operations construct and lease single-family homes within a community and then generally 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.

27 unchanged sentences

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

Colorado Colorado Springs Alabama Baldwin County Delaware Northern Delaware

Denver Birmingham Southern Delaware

Fort Collins Huntsville Illinois Chicago

Oregon Bend Mobile Indiana Fort Wayne

Eugene/Springfield Montgomery Indianapolis

Medford Tuscaloosa Northwest Indiana

Portland/Salem Florida Fort Myers/Naples Iowa Des Moines

Utah Salt Lake City Gainesville Iowa City/Cedar Rapids

George Jacksonville Kansas/Missouri Kansas City

Washington Bremerton Lakeland Kentucky Louisville

Central Washington Melbourne/Vero Beach Maryland Baltimore

Kennewick/Pasco/Richland Miami/Fort Lauderdale Eastern Maryland

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Arizona Phoenix Tallahassee Southern New Jersey

Tucson Tampa/Sarasota Ohio Cincinnati

Tucson Tampa/Sarasota Ohio Cincinnati/Dayton

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

Bay Area Louisiana Baton Rouge Pennsylvania Central Pennsylvania

Fresno/Tulare Lake Charles/Lafayette Philadelphia

Los Angeles County Mississippi Gulf Coast Pittsburgh

Modesto/Merced/Stockton Hattiesburg Virginia Northern Virginia

Redding/Chico/Yuba City Jackson Richmond

2 unchanged sentences

San Bernardino County Georgia Atlanta West Virginia Eastern West Virginia

Hawaii Oahu Augusta

Nevada Las Vegas Central Georgia

Hawaii Oahu Augusta Northern West Virginia

Nevada Las Vegas Central Georgia Wisconsin Southeast Wisconsin

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

Santa Fe North Carolina Asheville

South Central Region Greensboro/Winston-Salem

Arkansas Little Rock New Bern/Greenville

Northwest Arkansas Raleigh/Durham/Fayetteville

Oklahoma Oklahoma City Wilmington

Tulsa South Carolina Charleston

Texas Abilene Columbia

Austin Greenville/Spartanburg

Beaumont Hilton Head

Bryan/College Station Myrtle Beach

Corpus Christi Tennessee Chattanooga

Dallas Knoxville

East Texas Memphis

Fort Worth Nashville

Houston Northeast Tennessee

Killeen/Temple/Waco

Midland/Odessa

100 unchanged sentences

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 completed the construction of most homes in two to five months in fiscal 2024.

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

6 unchanged sentences

We review other general and administrative costs to identify efficiencies and savings opportunities in our operating divisions and our regional and corporate offices.

We also direct many of our promotional activities toward local real estate brokers and digital marketing initiatives, which we believe are efficient uses of our marketing expenditures.

We also direct most of our promotional activities toward digital marketing initiatives and local real estate brokers, which we believe are efficient uses of our marketing expenditures.

Marketing and Sales

1 unchanged sentence

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 offer various floor plans and product types with a primary focus on the first time and first time move-up homebuyer, which account 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.

4 unchanged sentences

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.

We also use billboards, radio, television and print advertising locally as necessary.

We attempt to position our subdivisions in locations that are desirable to potential homebuyers and convenient to or visible from local traffic patterns, which helps to reduce advertising costs.

Model homes play an important role in our marketing efforts, and we expend significant effort and resources to create an attractive atmosphere in our model homes.

We also build speculative homes in most of our communities, which allow us to compete effectively with existing homes available in the market and improve our returns.

We also use billboards, radio, television and print media and advertising locally as necessary.

We attempt to position our subdivisions in locations that are desirable to potential homebuyers and convenient to or visible from local traffic patterns.

Model homes play an important role in our marketing efforts, and we strive to create an attractive atmosphere in our model homes.

We also build speculative homes in essentially all of our communities, which allow us to compete effectively with existing homes available in the market and improve our returns.

These homes enhance our marketing and sales efforts to prospective homebuyers who are renters or who are relocating to these markets and require a home within a short time frame, as well as to independent brokers who represent these homebuyers.

9 unchanged sentences

At September 30, 2024, the value of our backlog of sales orders was $4.8 billion (12,180 homes), a decrease of 19% from $5.9 billion (15,197 homes) at September 30, 2023.

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.

The average sales price of homes in backlog was $391,700 at September 30, 2024, up from the $389,800 average at September 30, 2023.

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 18% in fiscal 2024 compared to 20% in fiscal 2023.

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;

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 one to four months;

therefore, substantially all of the homes in our sales backlog at September 30, 2024 are scheduled to close in fiscal 2025.

6 unchanged sentences

Rental Properties

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.

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

We sold 3,970 single-family rental homes in fiscal 2024 compared to 6,175 homes in fiscal 2023.

11 unchanged sentences

Customer Mortgage Financing

We provide mortgage financing services principally to purchasers of our homes in the majority of our homebuilding markets through DHI Mortgage, our wholly-owned subsidiary.

We provide mortgage financing services primarily to purchasers of our homes in the majority of our homebuilding markets through DHI Mortgage, our wholly-owned subsidiary.

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, 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.

To limit the risks associated with our mortgage operations, DHI Mortgage originates loan products that we believe can be sold to third-party purchasers of mortgage loans, the majority of which are 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 year ended September 30, 2024, DHI Mortgage provided mortgage financing services for 78% of the homes closed by our homebuilding operations, and those loans accounted for virtually all of DHI Mortgage’s total loan volume.

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

To limit the risks associated with our mortgage operations, DHI Mortgage originates loan products that we believe can be sold to third-party purchasers of mortgage loans, the majority of which are eligible for sale to Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) or Government National Mortgage Association (Ginnie Mae).

DHI Mortgage sells substantially all of the loans and the related servicing rights to third-party purchasers after origination with limited recourse provisions.

4 unchanged sentences

People and Culture

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.

As of September 30, 2024, we employed 14,766 people, of whom 10,071 work in our homebuilding operations, 3,149 in our financial services operations, 596 at our corporate office, 505 in our rental operations, 393 at our Forestar subsidiary and 52 in our other businesses.

Of our homebuilding employees, 3,897 are involved in construction, 2,779 are sales and marketing personnel and 3,395 are office personnel.

15 unchanged sentences

The average tenure of our executive team is 27 years, our homebuilding region presidents and vice presidents is 20 years and our homebuilding division presidents and city managers is 13 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.

Our Board of Directors (Board) 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

3 unchanged sentences

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.

medical, dental and vision healthcare insurance;

and life insurance and disability coverage.

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.

6 unchanged sentences

We provide third-party training for our field personnel to become certified by the Occupational Safety and Health Administration.

we provide our teams with many safety resources, including safety checklists, policies, procedures and best practices;

and we communicate with all of our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well-being.

We also provide our teams with many safety resources, including safety checklists, policies, procedures and best practices, and we communicate with all of our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well-being.

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.

1 unchanged sentence

Environmental, Social & Governance (ESG)

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:

We publish consistent and relevant ESG information on an annual basis.

Our most recent ESG report published in January 2024 includes 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 ESG report is not considered part of or incorporated by reference in this Annual Report.

The report also covers topics that are of significant importance to our company and our stakeholders, including, but not limited to:

• Risk management;

8 unchanged sentences

• Greenhouse gas emissions.

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

25 unchanged sentences

We believe that we are in compliance in all material respects with existing environmental regulations applicable to our business.

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 (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.

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

However, changes in regulations, such as the Minimum Energy Standards recently adopted by the U.S.

Department of Housing and Urban Development and the U.S.

Department of Agriculture (USDA), the climate-related disclosure legislation recently enacted by the State of California and the climate-related disclosure rules adopted by the SEC, which are currently under judicial review, could increase our costs to comply with such regulations, as discussed in “Item 1A.

Risk Factors.”

Our mortgage company must comply with extensive state and federal laws and regulations, which are administered by numerous agencies, including the Consumer Financial Protection Bureau, Federal Housing Finance Agency, U.S.

Department of Housing and Urban Development, FHA, VA, United States Department of Agriculture (USDA), Fannie Mae, Freddie Mac and Ginnie Mae.

Department of Housing and Urban Development, FHA, VA, USDA, Fannie Mae, Freddie Mac and Ginnie Mae.

These laws and regulations include many compliance requirements, including licensing, consumer disclosures, fair lending and real estate settlement procedures.

4 unchanged sentences

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