What changed in this filing

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Item 1. Financial Statements

2025-01-23 compared with 2024-07-23 · 147 added, 261 removed, 507 unchanged (45% of the section changed)

14 unchanged sentences

Mortgage loans held for sale 1,794.4 2,477.5

Deferred income taxes, net of valuation allowance of $ 14.7 million and $ 14.8 million

at June 30, 2024 and September 30, 2023, respectively

Deferred income taxes, net of valuation allowance of $ 14.9 million

at December 31, 2024 and September 30, 2024

Property and equipment, net 524.2 531.0

9 unchanged sentences

Common stock, $ .01 par value, 1,000,000,000 shares authorized, 403,275,949 shares issued

and 327,373,437 shares outstanding at June 30, 2024 and 401,202,253 shares issued

and 317,652,200 shares outstanding at December 31, 2024 and 402,848,342 shares issued

and 324,027,360 shares outstanding at September 30, 2024

1 unchanged sentence

Retained earnings 28,667.4 27,951.0

Treasury stock, 75,398,026 shares and 66,353,688 shares at June 30, 2024

Treasury stock, 85,623,749 shares and 78,820,982 shares at December 31, 2024

and September 30, 2024, respectively, at cost

8 unchanged sentences

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(In millions, except per share data)

27 unchanged sentences

Net income — — 844.9 — 7.0 851.9

Exercise of stock options ( 68,095 shares)

— 1.6 — — — 1.6

Stock issued under employee benefit plans ( 427,607 shares)

9 unchanged sentences

$ 4.0 $ 3,508.2 $ 28,667.4 $ ( 7,235.7 ) $ 519.0 $ 25,462.9

Net income — — 1,172.1 — 11.6 1,183.7

Exercise of stock options ( 151,568 shares)

— 3.6 — — — 3.6

Stock issued under employee benefit plans ( 604,209 shares)

— 6.9 — — — 6.9

Cash paid for shares withheld for taxes — ( 44.1 ) — — — ( 44.1 )

Stock-based compensation expense — 25.0 — — — 25.0

Cash dividends declared ($ 0.30 per share)

— — ( 99.2 ) — — ( 99.2 )

Repurchases of common stock ( 2,749,810 shares)

— — — ( 402.2 ) — ( 402.2 )

Change of ownership interest in Forestar — — — — 19.2 19.2

Balances at March 31, 2024 ( 330,196,301 shares)

$ 4.0 $ 3,431.6 $ 25,510.2 $ ( 5,130.3 ) $ 480.9 $ 24,296.4

Net income — — 1,353.6 — 13.2 1,366.8

Stock issued under employee benefit plans ( 146,514 shares)

— 1.9 — — — 1.9

Cash paid for shares withheld for taxes — ( 1.3 ) — — — ( 1.3 )

Stock-based compensation expense — 26.8 — — — 26.8

Cash dividends declared ($ 0.30 per share)

— — ( 98.5 ) — — ( 98.5 )

Repurchases of common stock ( 2,969,378 shares)

— — — ( 441.4 ) — ( 441.4 )

Change of ownership interest in Forestar — ( 0.1 ) — — 0.1 —

Balances at June 30, 2024 ( 327,373,437 shares)

$ 4.0 $ 3,458.9 $ 26,765.3 $ ( 5,571.7 ) $ 494.2 $ 25,150.7

See accompanying notes to consolidated financial statements.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)

Stock Additional

20 unchanged sentences

$ 4.0 $ 3,440.2 $ 24,437.3 $ ( 4,728.1 ) $ 450.1 $ 23,603.5

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 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

Net income — — 1,335.1 — 16.6 1,351.7

Exercise of stock options ( 240,620 shares)

— 5.7 — — — 5.7

Stock issued under employee benefit plans ( 33,425 shares)

— 2.0 — — — 2.0

Cash paid for shares withheld for taxes — ( 0.1 ) — — — ( 0.1 )

Stock-based compensation expense — 29.3 — — — 29.3

Cash dividends declared ($ 0.25 per share)

— — ( 85.2 ) — — ( 85.2 )

Repurchases of common stock ( 3,121,368 shares)

— — — ( 342.9 ) — ( 342.9 )

Change of ownership interest in Forestar — ( 0.2 ) — — 0.2 —

Balances at June 30, 2023 ( 338,222,953 shares)

$ 4.0 $ 3,394.7 $ 22,164.4 $ ( 3,906.7 ) $ 425.9 $ 22,082.3

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended June 30,

Three Months Ended December 31,

(In millions)

1 unchanged sentence

Net income $ 851.9 $ 955.7

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 24.1 20.0

3 unchanged sentences

Changes in operating assets and liabilities:

(Increase) decrease in construction in progress and finished homes ( 863.0 ) 576.2

Decrease (increase) in construction in progress and finished homes 181.7 ( 466.4 )

Increase in residential land and lots –

2 unchanged sentences

Increase in rental properties ( 86.5 ) ( 256.5 )

(Increase) decrease in other assets ( 154.4 ) 242.1

Increase in mortgage loans held for sale ( 58.9 ) ( 28.4 )

Decrease in accounts payable, accrued expenses and other liabilities ( 34.4 ) ( 338.5 )

Net cash provided by operating activities 228.2 2,261.1

Decrease (increase) in other assets 65.2 ( 130.0 )

Decrease in mortgage loans held for sale 683.1 475.8

Increase in accounts payable, accrued expenses and other liabilities 71.0 127.5

Net cash provided by (used in) operating activities 646.7 ( 153.4 )

INVESTING ACTIVITIES

7 unchanged sentences

Repayment of notes payable ( 755.4 ) ( 170.0 )

Borrowings on mortgage repurchase facilities, net 21.8 67.3

Repayment on mortgage repurchase facilities, net ( 746.9 ) ( 389.9 )

Proceeds from stock associated with certain employee benefit plans — 1.6

3 unchanged sentences

( 1,055.7 ) ( 376.9 )

Net proceeds from issuance of Forestar common stock 19.7 —

Net other financing activities ( 10.5 ) ( 10.2 )

Net cash used in financing activities ( 2,064.6 ) ( 362.8 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 880.1 ) 835.1

Net decrease in cash, cash equivalents and restricted cash ( 1,475.0 ) ( 555.5 )

Cash, cash equivalents and restricted cash at beginning of period 4,544.0 3,900.1

2 unchanged sentences

Notes payable issued for inventory $ — $ 21.9

Reduction of notes payable upon deconsolidation of variable interest entity $ ( 127.8 ) $ —

Stock issued under employee incentive plans $ 71.3 $ 66.5

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

June 30, 2024

December 31, 2024

NOTE A – BASIS OF PRESENTATION

2 unchanged sentences

Noncontrolling interests represent the proportionate equity interests in consolidated entities that are not 100% owned by the Company.

As of June 30, 2024, the Company owned a 62 % controlling interest in Forestar Group Inc.

As of December 31, 2024, the Company owned a 62 % controlling interest in Forestar Group Inc.

(Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 38 % interest the Company does not own is accounted for as noncontrolling interests.

9 unchanged sentences

Historically, the homebuilding industry has experienced seasonal fluctuations;

therefore, the operating results for the three and nine months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024 or subsequent periods.

therefore, the operating results for the three months ended December 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025 or subsequent periods.

Pending Accounting Standards

2 unchanged sentences

It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s profit or loss and assets.

The guidance is effective for the Company beginning October 1, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

The standard is effective for the Company’s annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026 on a retrospective basis to all periods presented.

This standard will impact the Company’s disclosures but will not impact its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes - Improvements to Income Tax Disclosures,” which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures.

The guidance is effective for the Company beginning October 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

The standard is effective for the Company beginning October 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.

The standard is effective for the Company’s annual periods beginning in fiscal 2028 and interim periods beginning in the first quarter of fiscal 2029, with early adoption permitted.

The Company is currently evaluating the impact this standard will have on its disclosures.

AND SUBSIDIARIES

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

June 30, 2024

December 31, 2024

NOTE B – SEGMENT INFORMATION

10 unchanged sentences

Georgia, North Carolina, South Carolina and Tennessee

Delaware, Illinois, Indiana, Iowa, Kentucky, Maryland, Minnesota, Nebraska,

New Jersey, Ohio, Pennsylvania, Virginia and West Virginia

Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska,

New Jersey, Ohio, Pennsylvania, Virginia, West Virginia and Wisconsin

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.

2 unchanged sentences

The Company’s 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 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.

The Forestar segment is a residential lot development company with operations in 62 markets across 24 states.

4 unchanged sentences

The segment generates the substantial majority of its revenues from originating and selling mortgages, collecting premiums and fees for escrow closing services and collecting premiums for title insurance.

The Company sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers.

The Company sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers, typically within 60 days of origination.

In addition to its homebuilding, rental, Forestar and financial services operations, the Company engages in other business activities through its subsidiaries.

3 unchanged sentences

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

June 30, 2024

December 31, 2024

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, 2024.

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

June 30, 2024

December 31, 2024

Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated

22 unchanged sentences

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

June 30, 2024

December 31, 2024

September 30, 2024

23 unchanged sentences

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

June 30, 2024

Three Months Ended June 30, 2024

Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated

(In millions)

Home sales $ 9,231.2 $ — $ — $ — $ — $ 9,231.2

Land/lot sales and other 10.3 — 318.4 — ( 250.2 ) 78.5

Rental property sales — 413.7 — — — 413.7

Financial services — — — 242.3 — 242.3

9,241.5 413.7 318.4 242.3 ( 250.2 ) 9,965.7

Cost of sales

Home sales (2) 7,017.3 — — — ( 72.5 ) 6,944.8

Land/lot sales and other 5.6 — 246.2 — ( 201.1 ) 50.7

Rental property sales — 319.3 — — ( 5.9 ) 313.4

Inventory and land option charges 12.6 1.5 0.7 — — 14.8

7,035.5 320.8 246.9 — ( 279.5 ) 7,323.7

Selling, general and administrative expense 656.5 55.0 29.3 178.0 4.8 923.6

Other (income) expense ( 22.7 ) ( 26.3 ) ( 9.4 ) ( 27.0 ) 4.8 ( 80.6 )

Income before income taxes $ 1,572.2 $ 64.2 $ 51.6 $ 91.3 $ 19.7 $ 1,799.0

______________

(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.

AND SUBSIDIARIES

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

June 30, 2024

Nine Months Ended June 30, 2024

December 31, 2024

Three Months Ended December 31, 2024

Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated

23 unchanged sentences

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

June 30, 2024

Three Months Ended June 30, 2023

Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated

(In millions)

Home sales $ 8,703.1 $ — $ — $ — $ — $ 8,703.1

Land/lot sales and other 30.5 — 368.9 — ( 272.5 ) 126.9

Rental property sales — 667.1 — — — 667.1

Financial services — — — 228.5 — 228.5

8,733.6 667.1 368.9 228.5 ( 272.5 ) 9,725.6

Cost of sales

Home sales (2) 6,675.6 — — — ( 69.6 ) 6,606.0

Land/lot sales and other 26.1 — 283.0 — ( 238.2 ) 70.9

Rental property sales — 458.0 — — ( 3.9 ) 454.1

Inventory and land option charges 9.0 0.9 0.9 — — 10.8

6,710.7 458.9 283.9 — ( 311.7 ) 7,141.8

Selling, general and administrative expense 584.9 80.0 26.4 154.7 6.1 852.1

Other (income) expense ( 26.4 ) ( 33.9 ) ( 3.8 ) ( 20.3 ) 32.2 ( 52.2 )

Income before income taxes $ 1,464.4 $ 162.1 $ 62.4 $ 94.1 $ 0.9 $ 1,783.9

______________

(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.

AND SUBSIDIARIES

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

June 30, 2024

Nine Months Ended June 30, 2023

December 31, 2024

Three Months Ended December 31, 2023

Homebuilding Rental Forestar Financial Services Eliminations and Other (1) Consolidated

23 unchanged sentences

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

June 30, 2024

December 31, 2024

Homebuilding Inventories by Reporting Segment (1)

13 unchanged sentences

Homebuilding Results by Reporting Segment Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(In millions)

16 unchanged sentences

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

June 30, 2024

December 31, 2024

NOTE C – INVENTORIES

At the end of each quarter, the Company reviews the performance and outlook for all of its communities and land inventories for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary.

As of June 30, 2024, the Company determined that no communities were impaired, and no impairment charges were recorded during the three months ended June 30, 2024.

During the nine months ended June 30, 2024, impairment charges totaled $ 5.6 million.

There were no impairment charges recorded in the prior year quarter and $ 14.0 million of impairment charges recorded in the nine months ended June 30, 2023.

During the three and nine months ended June 30, 2024, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 14.8 million and $ 28.8 million, respectively, compared to $ 10.8 million and $ 48.2 million in the prior year periods.

As of December 31, 2024, the Company performed detailed impairment evaluations of communities and land inventories and determined that communities with a combined carrying value of $ 40.2 million were impaired on a non-recurring basis using Level 3 inputs.

As a result, impairment charges of $ 3.2 million were recorded during the three months ended December 31, 2024 to reduce the carrying value of the related inventories to fair value.

There were no impairment charges recorded in the prior year quarter.

During the three months ended December 31, 2024, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 13.4 million compared to $ 6.1 million in the prior year quarter.

Inventory impairments and land option charges are included in cost of sales in the consolidated statements of operations.

1 unchanged sentence

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

June 30, 2024

December 31, 2024

NOTE D – NOTES PAYABLE

7 unchanged sentences

1.4 % senior notes due 2027 (1)

Secured notes 164.7 239.8

5.0 % senior notes due 2034 (1)

Other notes 166.6 146.2

2,448.2 2,926.8

Unsecured revolving credit facility 1,030.0 400.0

Secured notes 5.7 —

Revolving credit facility 1,050.0 745.0

Other notes 5.8 5.7

1,055.8 750.7

2 unchanged sentences

5.0 % senior notes due 2028 (2)

Secured notes 9.9 —

Other notes 9.9 9.9

Financial Services

6 unchanged sentences

_____________

(1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $ 5.9 million and $ 8.4 million at June 30, 2024 and September 30, 2023, respectively.

(2) Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $ 3.8 million and $ 5.0 million at June 30, 2024 and September 30, 2023, respectively.

(3) The fair value of notes payable at June 30, 2024 totaled $ 5.5 billion, of which $ 2.6 billion were measured using Level 2 inputs and $ 2.9 billion were measured using Level 3 inputs.

(1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $ 10.9 million and $ 11.7 million at December 31, 2024 and September 30, 2024, respectively.

(2) Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $ 3.1 million and $ 3.5 million at December 31, 2024 and September 30, 2024, respectively.

(3) The fair value of notes payable at December 31, 2024 totaled $ 5.0 billion, of which $ 2.9 billion were measured using Level 2 inputs and $ 2.1 billion were measured using Level 3 inputs.

The fair value of notes payable at September 30, 2024 totaled $ 5.9 billion, of which $ 3.4 billion were measured using Level 2 inputs and $ 2.5 billion were measured using Level 3 inputs.

The Level 2 inputs primarily relate to senior notes, and the Level 3 inputs primarily relate to the revolving credit and mortgage repurchase facilities and approximate carrying value due to their short-term nature and/or floating interest rate terms.

AND SUBSIDIARIES

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

June 30, 2024

The Company has a $ 2.19 billion senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $ 3.0 billion, subject to certain conditions and availability of additional bank commitments.

December 31, 2024

Horton has an automatically effective universal shelf registration statement filed with the Securities and Exchange Commission (SEC) in July 2024, registering debt and equity securities that the Company may issue from time to time in amounts to be determined.

In October 2024, the Company repaid $ 500 million principal amount of its 2.5 % senior notes at maturity.

The Company has a senior unsecured homebuilding revolving credit facility that was amended in December 2024 to increase its capacity from $ 2.19 billion to $ 2.23 billion.

The amendment also extended the maturity date of the facility.

The facility includes bank commitments of $ 1.965 billion maturing on December 18, 2029 and $ 265 million maturing on October 28, 2027 .

The facility has an uncommitted accordion feature that could increase its size to $ 3.0 billion, subject to certain conditions and availability of additional bank commitments.

The facility also provides for the issuance of letters of credit with a sublimit equal to 100 % of the total revolving credit commitments.

Letters of credit issued under the facility reduce the available borrowing capacity.

The maturity date of the facility is October 28, 2027.

At June 30, 2024, there were no borrowings outstanding and $ 217.3 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 1.97 billion.

At December 31, 2024, there were no borrowings outstanding and $ 221.1 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 2.01 billion.

The Company’s homebuilding revolving credit facility imposes restrictions on its operations and activities, including requiring the maintenance of a maximum allowable leverage ratio and a borrowing base restriction if the leverage ratio exceeds a certain level.

1 unchanged sentence

A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity.

The credit agreement governing the facility and the indentures governing the senior notes also impose restrictions on the creation of secured debt and liens.

At June 30, 2024, the Company was in compliance with all of the covenants, limitations and restrictions of its homebuilding revolving credit facility and public debt obligations.

The credit agreement governing the facility and the indenture governing the senior notes also impose restrictions on the creation of secured debt and liens.

At December 31, 2024, the Company was in compliance with all of the covenants, limitations and restrictions of its homebuilding revolving credit facility and public debt obligations.

The Company’s homebuilding revolving credit facility and homebuilding senior notes are guaranteed by D.R.

Horton, Inc.’s significant wholly-owned homebuilding subsidiaries.

Horton has an automatically effective universal shelf registration statement filed with the Securities and Exchange Commission (SEC) in July 2021, registering debt and equity securities that the Company may issue from time to time in amounts to be determined.

In July 2024, the Board of Directors authorized the repurchase of up to $ 500 million of the Company’s debt securities, with no expiration date.

This authorization replaced the previous authorization, under which no debt securities were repurchased.

In July 2024, the Board of Directors authorized the repurchase of up to $ 500 million of the Company’s debt securities.

The authorization has no expiration date.

All of the $ 500 million authorization was remaining at December 31, 2024.

The Company’s rental subsidiary, DRH Rental, has a $ 1.05 billion senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $ 2.0 billion, subject to certain conditions and availability of additional bank commitments.

2 unchanged sentences

The maturity date of the facility is October 10, 2027.

Borrowings and repayments under the facility totaled $ 1.27 billion and $ 640 million, respectively, during the nine months ended June 30, 2024.

At June 30, 2024, there were $ 1.03 billion of borrowings outstanding at a 7.4 % annual interest rate and no letters of credit issued under the facility, resulting in available capacity of $ 20 million.

Borrowings and repayments under the facility totaled $ 560 million and $ 255 million, respectively, during the three months ended December 31, 2024.

At December 31, 2024, there were $ 1.05 billion of borrowings outstanding at a 6.2 % annual interest rate and no letters of credit issued under the facility, resulting in no available capacity.

The rental revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants.

2 unchanged sentences

At June 30, 2024, DRH Rental was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

At December 31, 2024, DRH Rental was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

AND SUBSIDIARIES

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

June 30, 2024

The rental revolving credit facility is guaranteed by DRH Rental’s wholly-owned subsidiaries that are not immaterial subsidiaries or have not been designated as unrestricted subsidiaries.

December 31, 2024

The rental revolving credit facility is guaranteed by DRH Rental’s wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.

The rental revolving credit facility is not guaranteed by D.R.

or any of the subsidiaries that guarantee the debt of the Company’s homebuilding, Forestar or financial services operations.

Forestar has a $ 410 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $ 600 million, subject to certain conditions and availability of additional bank commitments.

Forestar has a senior unsecured revolving credit facility that was amended in December 2024 to increase its capacity from $ 410 million to $ 640 million and to raise the uncommitted accordion feature that could increase the size of the facility to $ 1.0 billion, subject to certain conditions and availability of additional bank commitments.

The amendment also extended the maturity date of the facility.

The facility includes bank commitments of $ 575 million maturing on December 18, 2029 and $ 65 million maturing on October 28, 2026 .

The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $ 100 million and 50 % of the total revolving credit commitments.

1 unchanged sentence

Letters of credit issued under the facility reduce the available borrowing capacity.

The maturity date of the facility is October 28, 2026.

At June 30, 2024, there were no borrowings outstanding and $ 24.8 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 385.2 million.

The Forestar revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants.

At December 31, 2024, there were $ 100 million of borrowings outstanding at a 5.9 % annual interest rate and $ 27.5 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 512.5 million.

Forestar’s revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants.

The financial covenants require Forestar to maintain a minimum level of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio.

1 unchanged sentence

At June 30, 2024, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations.

Forestar’s revolving credit facility and its senior notes are guaranteed by Forestar’s wholly-owned subsidiaries that are not immaterial subsidiaries or have not been designated as unrestricted subsidiaries.

At December 31, 2024, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations.

Forestar’s revolving credit facility and its senior notes are guaranteed by Forestar’s wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.

They are not guaranteed by D.R.

2 unchanged sentences

The authorization has no expiration date.

All of the $ 30 million authorization was remaining at June 30, 2024.

All of the $ 30 million authorization was remaining at December 31, 2024.

Financial Services

1 unchanged sentence

DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames in accordance with the terms of the mortgage repurchase facilities.

In February 2024, the committed mortgage repurchase facility was amended to reduce its capacity to $ 1.6 billion and extend its maturity date to February 13, 2025.

The committed mortgage repurchase facility has a total capacity of $ 1.6 billion and a maturity date of May 9, 2025.

The capacity of the facility can be increased to $ 2.0 billion subject to the availability of additional commitments.

At June 30, 2024, DHI Mortgage had an obligation of $ 1.2 billion under the committed mortgage repurchase facility at a 7.0 % annual interest rate.

At June 30, 2024, the uncommitted mortgage repurchase facility had a borrowing capacity of $ 500 million, of which DHI Mortgage had an obligation of $ 496.9 million at a 6.5 % annual interest rate.

At June 30, 2024, $ 1.95 billion of mortgage loans held for sale with a collateral value of $ 1.91 billion were pledged under the committed mortgage repurchase facility, and $ 532.6 million of mortgage loans held for sale with a collateral value of $ 511.0 million were pledged under the uncommitted mortgage repurchase facility.

At December 31, 2024, DHI Mortgage had an obligation of $ 669.8 million under the committed mortgage repurchase facility at a 6.0 % annual interest rate.

At December 31, 2024, the uncommitted mortgage repurchase facility had a borrowing capacity of $ 500 million, of which DHI Mortgage had an obligation of $ 117.1 million at a 5.7 % annual interest rate.

AND SUBSIDIARIES

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

June 30, 2024

December 31, 2024

At December 31, 2024, $ 1.67 billion of mortgage loans held for sale with a collateral value of $ 1.64 billion were pledged under the committed mortgage repurchase facility, and $ 129.2 million of mortgage loans held for sale with a collateral value of $ 120.4 million were pledged under the uncommitted mortgage repurchase facility.

The facilities contain financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable indebtedness to tangible net worth ratio and its minimum required liquidity.

At June 30, 2024, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facilities.

At December 31, 2024, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facilities.

These mortgage repurchase facilities are not guaranteed by D.R.

4 unchanged sentences

During periods in which the Company’s active inventory is lower than its debt level, a portion of the interest incurred is reflected as interest expense in the period incurred.

During the first nine months of fiscal 2024 and fiscal 2023, the Company’s active inventory exceeded its debt level, and all interest incurred was capitalized to inventory.

The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three and nine months ended June 30, 2024 and 2023:

During the first three months of fiscal 2025 and fiscal 2024, the Company’s active inventory exceeded its debt level, and all interest incurred was capitalized to inventory.

The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three months ended December 31, 2024 and 2023:

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(In millions)

4 unchanged sentences

__________________

(1) Interest incurred includes (a) interest on the Company’s mortgage repurchase facilities of $ 16.0 million and $ 44.3 million in the three and nine months ended June 30, 2024, respectively, and $ 12.7 million and $ 30.5 million in the prior year periods;

(b) Forestar interest of $ 8.2 million and $ 24.5 million in the three and nine months ended June 30, 2024, respectively, and $ 8.2 million and $ 24.6 million in the prior year periods;

and (c) interest on the rental revolving credit facility of $ 18.8 million and $ 44.6 million in the three and nine months ended June 30, 2024, respectively, and $ 19.3 million and $ 42.0 million in the prior year periods.

(1) Interest incurred in the three months ended December 31, 2024 and 2023 includes (a) interest on the Company’s mortgage repurchase facilities of $ 8.1 million and $ 14.9 million, respectively;

(b) Forestar interest of $ 8.3 million and $ 8.1 million, respectively;

and (c) interest on the rental revolving credit facility of $ 12.4 million and $ 8.2 million, respectively.

AND SUBSIDIARIES

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

June 30, 2024

December 31, 2024

NOTE F – MORTGAGE LOANS

2 unchanged sentences

Servicing rights retained are typically sold within six months of loan origination.

At June 30, 2024, mortgage loans held for sale of $ 2.6 billion had an aggregate outstanding principal balance of $ 2.6 billion.

At December 31, 2024, mortgage loans held for sale of $ 1.8 billion had an aggregate outstanding principal balance of $ 1.9 billion.

At September 30, 2024, mortgage loans held for sale of $ 2.5 billion had an aggregate outstanding principal balance of $ 2.5 billion.

Mortgage loans held for sale at both dates were primarily composed of mortgage loans measured at fair value on a recurring basis using Level 2 inputs.

During the nine months ended June 30, 2024 and 2023, mortgage loans originated totaled $ 17.7 billion and $ 15.3 billion, respectively, and mortgage loans sold totaled $ 17.7 billion and $ 15.3 billion, respectively.

The Company had gains on sales of loans and servicing rights of $ 162.6 million and $ 444.0 million during the three and nine months ended June 30, 2024, respectively, compared to $ 157.9 million and $ 391.6 million in the prior year periods.

During the three months ended December 31, 2024 and 2023, mortgage loans originated totaled $ 5.15 billion and $ 5.12 billion, respectively, and mortgage loans sold totaled $ 5.74 billion and $ 5.69 billion, respectively.

The Company had gains on sales of loans and servicing rights of $ 120.1 million during the three months ended December 31, 2024 compared to $ 128.7 million in the prior year period.

Net gains on sales of loans and servicing rights are included in revenues in the consolidated statements of operations.

During the nine months ended June 30, 2024, approximately 73 % of the Company’s mortgage loans were sold directly to the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or into securities backed by the Government National Mortgage Association (Ginnie Mae), and 26 % were sold to one other major financial entity.

During the three months ended December 31, 2024, approximately 69 % of the Company’s mortgage loans were sold directly to Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) or into securities backed by Government National Mortgage Association (Ginnie Mae), and 30 % were sold to one other major financial entity.

The Company also uses hedging instruments as part of a program to offer below market interest rate financing to its homebuyers.

At June 30, 2024 and September 30, 2023, the Company had mortgage-backed securities (MBS) totaling $ 748.4 million and $ 1.1 billion, respectively, that did not yet have interest rate lock commitments (IRLCs) or closed loans created or assigned.

The Company recorded an asset of $ 4.8 million and $ 15.7 million at June 30, 2024 and September 30, 2023, respectively, for the fair value of such MBS position, which is measured using Level 2 inputs.

At December 31, 2024 and September 30, 2024, the Company had mortgage-backed securities (MBS) totaling $ 673.5 million and $ 637.9 million, respectively, that did not yet have interest rate lock commitments (IRLCs) or closed loans created or assigned.

The Company recorded an asset of $ 3.4 million and $ 2.4 million at December 31, 2024 and September 30, 2024, respectively, for the fair value of such MBS position, which is measured using Level 2 inputs.

The Company is party to IRLCs, which are extended to borrowers who have applied for loan funding and meet defined credit and underwriting criteria.

At June 30, 2024 and September 30, 2023, the notional amount of IRLCs, which are accounted for as derivative instruments recorded at fair value using Level 3 inputs, totaled $ 2.9 billion and $ 2.7 billion, respectively.

At December 31, 2024 and September 30, 2024, the notional amount of IRLCs, which are accounted for as derivative instruments recorded at fair value using Level 3 inputs, totaled $ 1.99 billion and $ 2.05 billion, respectively.

NOTE G – INCOME TAXES

The Company’s income tax expense was $ 432.2 million for each of the three month periods ended June 30, 2024 and 2023 and $ 1.1 billion and $ 1.0 billion in the nine months ended June 30, 2024 and 2023, respectively.

The effective tax rate was 24.0 % and 23.4 % for the three and nine months ended June 30, 2024, respectively, compared to 24.2 % and 23.9 % in the prior year periods.

The effective tax rates for all periods include an expense for state income taxes and tax benefits related to stock-based compensation and federal energy efficient homes tax credits.

The Company’s deferred tax assets, net of deferred tax liabilities, were $ 171.3 million at June 30, 2024 compared to $ 202.0 million at September 30, 2023.

The Company had a valuation allowance of $ 14.7 million and $ 14.8 million at June 30, 2024 and September 30, 2023, respectively, related to deferred tax assets for state net operating loss (NOL) and tax credit carryforwards that are expected to expire before being realized.

The Company’s income tax expense for the three months ended December 31, 2024 and 2023 was $ 258.0 million and $ 291.8 million, respectively.

The effective tax rate was 23.2 % for the three months ended December 31, 2024 compared to 23.4 % in the prior year period.

The effective tax rates for both periods include an expense for state income taxes and tax benefits related to stock-based compensation and federal energy efficient homes tax credits.

The Company’s deferred tax assets, net of deferred tax liabilities, were $ 142.3 million at December 31, 2024 compared to $ 182.4 million at September 30, 2024.

The Company has a valuation allowance of $ 14.9 million at December 31, 2024 and September 30, 2024 related to deferred tax assets for state net operating loss (NOL) and tax credit carryforwards that are expected to expire before being realized.

The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance with respect to the remaining state NOL and tax credit carryforwards.

2 unchanged sentences

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

June 30, 2024

December 31, 2024

NOTE H – EARNINGS PER SHARE

1 unchanged sentence

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(In millions)

11 unchanged sentences

Horton has an automatically effective universal shelf registration statement, filed with the SEC in July 2024, registering debt and equity securities that it may issue from time to time in amounts to be determined.

Effective October 31, 2023, the Board of Directors authorized the repurchase of up to $ 1.5 billion of the Company’s common stock, replacing the previous authorization that was effective as of April 18, 2023.

During the nine months ended June 30, 2024, the Company repurchased 9.0 million shares of its common stock at a total cost, including commissions and excise taxes, of $ 1.2 billion, of which $ 201.6 million was repurchased under the previous authorization.

At June 30, 2024, there was $ 459.7 million remaining on the repurchase authorization.

In July 2024, the Board of Directors authorized the repurchase of up to $ 4.0 billion of the Company’s common stock, replacing the previous authorization, which at that time had $ 261.9 million remaining due to repurchases made subsequent to quarter end.

In July 2024, the Board of Directors authorized the repurchase of up to $ 4.0 billion of the Company’s common stock, replacing the previous authorization.

During the three months ended December 31, 2024, the Company repurchased 6.8 million shares of its common stock at a total cost, including commissions and excise taxes, of $ 1.1 billion.

At December 31, 2024, there was $ 2.5 billion remaining on the repurchase authorization.

The authorization has no expiration date.

During each of the first three quarters of fiscal 2024, the Board of Directors approved a quarterly cash dividend of $ 0.30 per common share, the most recent of which was paid on May 9, 2024 to stockholders of record on May 2, 2024.

In July 2024, the Board of Directors approved a quarterly cash dividend of $ 0.30 per common share, payable on August 8, 2024 to stockholders of record on August 1, 2024.

Cash dividends declared and paid in the three and nine months ended June 30, 2024 totaled $ 98.5 million and $ 297.5 million, respectively.

Forestar has an effective shelf registration statement, filed with the SEC in October 2021, registering $ 750 million of equity securities, of which $ 300 million was reserved for sales under its at-the-market equity offering (ATM) program that became effective in November 2021.

During the nine months ended June 30, 2024, Forestar issued 546,174 shares of common stock under its ATM program for proceeds of $ 19.7 million, net of commissions and other issuance costs totaling $ 0.4 million.

At June 30, 2024, $ 728.1 million remained available for issuance under Forestar’s shelf registration statement, of which $ 278.1 million was reserved for sales under its ATM program.

During the three months ended December 31, 2024, the Board of Directors approved a quarterly cash dividend of $ 0.40 per common share totaling $ 128.5 million, which was paid on November 19, 2024 to stockholders of record on November 12, 2024.

In January 2025, the Board of Directors approved a quarterly cash dividend of $ 0.40 per common share, payable on February 14, 2025 to stockholders of record on February 7, 2025.

Forestar has an effective shelf registration statement, filed with the SEC in September 2024, registering $ 750 million of equity securities, of which $ 300 million is reserved for sales under its at-the-market equity offering (ATM) program that was entered into in November 2024.

During the three months ended December 31, 2024, there were no shares issued under the ATM program.

At December 31, 2024, the full $ 750 million remained available for issuance under Forestar’s shelf registration statement, with $ 300 million reserved for sales under the ATM program.

AND SUBSIDIARIES

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

June 30, 2024

December 31, 2024

NOTE J – EMPLOYEE BENEFIT PLANS

Stock-Based Compensation

The Company’s Stock Incentive Plan provides for the granting of stock options and restricted stock units to executive officers, other key employees and non-management directors.

Restricted stock unit (RSU) awards may be based on performance (performance-based) or on service over a requisite time period (time-based).

RSU equity awards represent the contingent right to receive one share of the Company’s common stock per RSU if the vesting conditions and/or performance criteria are satisfied.

The RSUs have no dividend or voting rights until vested.

In October 2023, the Company granted 277,779 performance-based RSUs to its executive officers.

This grant was subsequently modified in December 2023 to change the performance criteria to total shareholder return, return on assets and operating margin.

The number of units that ultimately vest depends on the Company’s relative position as compared to its peers in achieving each of the performance criteria and can range from 0 % to 200 % of the number of units granted.

The Company’s Stock Incentive Plan provides for the granting of equity awards, such as performance stock units (PSUs) and restricted stock units (RSUs), to executive officers, other key employees and non-management directors.

PSUs are earned by achieving key performance goals and RSUs are earned through continued employment with the Company over a requisite time period.

Each stock unit represents the contingent right to receive one share of the Company’s common stock if the performance criteria and/or vesting conditions are satisfied.

The stock units have no dividend or voting rights until vested.

In October 2024, the Company granted 327,717 PSUs to its executive officers and other key employees.

The number of units that ultimately vest depends on the Company’s relative position compared to its peers in achieving each of the performance criteria and can range from 0 % to 300 % of the number of units granted.

These awards vest at the end of a three -year performance period ending September 30, 2027.

The grant date fair value of these equity awards was $ 176.39 per unit.

Compensation expense related to this grant was $ 3.4 million and $ 10.2 million in the three and nine months ended June 30, 2024, respectively, based on an estimate of the Company’s performance against its peer group, the elapsed portion of the performance period and the grant date fair value of the award.

During the nine months ended June 30, 2024, the Company granted approximately 660,000 time-based RSUs to approximately 1,460 recipients, including executive officers, other key employees and non-management directors.

Compensation expense related to this grant was $ 4.8 million in the three months ended December 31, 2024, based on an estimate of the Company’s performance against a market index or its peer group, the elapsed portion of the performance period and the grant date fair value of the award.

During the three months ended December 31, 2024, the Company granted approximately 610,000 RSUs to approximately 1,600 recipients, including executive officers, other key employees and non-management directors.

The weighted average grant date fair value of these equity awards was $ 156.12 per unit, and they vest annually in equal installments over periods of three to five years.

Compensation expense related to these grants was $ 4.7 million and $ 22.0 million in the three and nine months ended June 30, 2024, respectively.

Compensation expense in the nine month period included $ 16.4 million of expense recognized for employees that were retirement eligible on the date of grant.

Total stock-based compensation expense related to the Company’s performance-based and time-based RSUs was $ 25.0 million and $ 84.4 million during the three and nine months ended June 30, 2024, respectively, compared to $ 26.3 million and $ 73.4 million during the three and nine months ended June 30, 2023.

Compensation expense related to these grants was $ 10.8 million in the three months ended December 31, 2024, which included $ 8.3 million of expense recognized for employees that were retirement eligible on the date of grant.

Total stock-based compensation expense related to the Company’s equity awards was $ 40.1 million during the three months ended December 31, 2024 compared to $ 37.3 million during the three months ended December 31, 2023.

AND SUBSIDIARIES

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

June 30, 2024

December 31, 2024

NOTE K – COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

The Company’s warranty liability is based upon historical warranty cost experience in each market in which it operates.

Changes in the Company’s warranty liability during the three and nine months ended June 30, 2024 and 2023 were as follows:

Changes in the Company’s warranty liability during the three months ended December 31, 2024 and 2023 were as follows:

Three Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

(In millions)

8 unchanged sentences

The Company has established reserves for these contingencies based on the estimated costs of pending claims and the estimated costs of anticipated future claims related to previously closed homes.

The estimated liabilities for these contingencies were $ 911.1 million and $ 858.9 million at June 30, 2024 and September 30, 2023, respectively, and are included in accrued expenses and other liabilities in the consolidated balance sheets.

Approximately 97 % of these reserves related to construction defect matters at both June 30, 2024 and September 30, 2023.

Expenses related to the Company’s legal contingencies were $ 107.9 million and $ 92.6 million in the nine months ended June 30, 2024 and 2023, respectively.

Changes in the Company’s legal claims reserves during the nine months ended June 30, 2024 and 2023 were as follows:

Nine Months Ended

The estimated liabilities for these contingencies were $ 939.1 million and $ 949.6 million at December 31, 2024 and September 30, 2024, respectively, and are included in accrued expenses and other liabilities in the consolidated balance sheets.

Approximately 97 % of these reserves related to construction defect matters at both December 31, 2024 and September 30, 2024.

Expenses related to the Company’s legal contingencies were $ 40.0 million and $ 26.4 million in the three months ended December 31, 2024 and 2023, respectively.

Changes in the Company’s legal claims reserves during the three months ended December 31, 2024 and 2023 were as follows:

Three Months Ended

(In millions)

Reserves for legal claims, beginning of period $ 949.6 $ 858.9

Increase in reserves 112.1 101.8

Increase (decrease) in reserves 5.8 ( 4.7 )

Payments ( 16.3 ) ( 39.7 )

2 unchanged sentences

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

June 30, 2024

December 31, 2024

The Company estimates and records receivables under its applicable insurance policies related to its estimated contingencies for known claims and anticipated future construction defect claims on previously closed homes and other legal claims and lawsuits incurred in the ordinary course of business when recovery is probable.

1 unchanged sentence

Since June 1, 2021, except for contractual risk transfer, the Company is almost exclusively self-insured for construction defect exposures.

The Company’s estimated insurance receivables from estimated losses for pending legal claims and anticipated future claims related to previously closed homes totaled $ 158.6 million, $ 165.8 million and $ 139.0 million at June 30, 2024, September 30, 2023 and June 30, 2023, respectively, and are included in other assets in the consolidated balance sheets.

The Company’s estimated insurance receivables from estimated losses for pending legal claims and anticipated future claims related to previously closed homes totaled $ 120.0 million, $ 156.8 million and $ 131.5 million at December 31, 2024, September 30, 2024 and December 31, 2023, respectively, and are included in other assets in the consolidated balance sheets.

The Company also contractually requires major subcontractors in most markets to have general liability insurance, which includes construction defect coverage.

6 unchanged sentences

Land purchase contract deposits and capitalized pre-acquisition costs are expensed to inventory and land option charges when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover these costs through other means.

At June 30, 2024, the Company had total deposits of $ 2.1 billion, consisting of cash deposits of $ 1.9 billion and promissory notes and surety bonds of $ 144.8 million, related to contracts to purchase land and lots with a total remaining purchase price of approximately $ 24.5 billion.

At December 31, 2024, the Company had total deposits of $ 2.2 billion, consisting of cash deposits of $ 2.1 billion and promissory notes and surety bonds of $ 147.4 million, related to contracts to purchase land and lots with a total remaining purchase price of approximately $ 25.8 billion.

Of these amounts, $ 225.1 million of the deposits related to contracts with Forestar to purchase land and lots with a remaining purchase price of $ 2.2 billion.

A limited number of the homebuilding land and lot purchase contracts at June 30, 2024, representing $ 273.5 million of remaining purchase price, were subject to specific performance provisions that may require the Company to purchase the land or lots upon the land sellers meeting their respective contractual obligations.

A limited number of the homebuilding land and lot purchase contracts at December 31, 2024, representing $ 209.0 million of remaining purchase price, were subject to specific performance provisions that may require the Company to purchase the land or lots upon the land sellers meeting their respective contractual obligations.

Of the $ 209.0 million remaining purchase price subject to specific performance provisions, $ 187.5 million related to contracts between the homebuilding segment and Forestar.

During the three and nine months ended June 30, 2024, Forestar reimbursed the homebuilding segment $ 4.0 million and $ 22.7 million, respectively, for previously paid earnest money and $ 4.4 million and $ 15.1 million, respectively, for pre-acquisition and other due diligence costs related to land purchase contracts whereby the homebuilding segment assigned its rights under contract to Forestar.

During the three and nine months ended June 30, 2023, Forestar reimbursed the homebuilding segment $ 6.7 million and $ 17.1 million, respectively, for such pre-acquisition and due diligence costs.

During the three months ended December 31, 2024 and 2023, Forestar reimbursed the homebuilding segment $ 10.0 million and $ 13.3 million, respectively, for previously paid earnest money and $ 4.2 million and $ 4.6 million, respectively, for pre-acquisition and other due diligence costs related to land purchase contracts whereby the homebuilding segment assigned its rights under contract to Forestar.

Other Commitments

At June 30, 2024, the Company had outstanding surety bonds of $ 3.4 billion and letters of credit of $ 242.1 million to secure performance under various contracts.

At December 31, 2024, the Company had outstanding surety bonds of $ 3.4 billion and letters of credit of $ 248.6 million to secure performance under various contracts.

Of the total letters of credit, $ 221.1 million were issued under the homebuilding revolving credit facility and $ 27.5 million were issued under Forestar’s revolving credit facility.

1 unchanged sentence

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

June 30, 2024

December 31, 2024

NOTE L – OTHER ASSETS, ACCRUED EXPENSES AND OTHER LIABILITIES

The Company’s other assets at June 30, 2024 and September 30, 2023 were as follows:

The Company’s other assets at December 31, 2024 and September 30, 2024 were as follows:

2024 September 30,

1 unchanged sentence

Earnest money and refundable deposits $ 2,253.8 $ 2,210.6

Mortgage hedging instruments and commitments 10.1 153.6

Water rights and other water-related assets 320.8 319.1

Margin deposits related to hedging instruments 36.8 —

Other receivables 161.5 167.2

Insurance receivables 120.0 156.8

Other receivables 136.3 147.1

Prepaid assets 121.8 117.9

Contract assets - insurance agency commissions 121.5 117.5

Interest rate lock commitments 39.9 2.3

Margin deposits related to hedging instruments — 71.3

Lease right of use assets 50.1 51.4

Interest rate lock commitments 5.0 44.5

Mortgage servicing rights 10.4 5.9

Mortgage hedging instruments and commitments 55.3 2.8

Other 75.7 72.7

$ 3,270.7 $ 3,317.6

The Company’s accrued expenses and other liabilities at June 30, 2024 and September 30, 2023 were as follows:

The Company’s accrued expenses and other liabilities at December 31, 2024 and September 30, 2024 were as follows:

2024 September 30,

4 unchanged sentences

Inventory related accruals 452.4 451.2

Broker deposits related to hedging instruments — 118.9

Customer deposits 72.5 99.7

Interest rate lock commitments 0.1 33.9

Federal and state income tax liabilities 64.2 233.8

Accrued property taxes 52.2 77.6

Mortgage hedging instruments and commitments 3.4 63.0

Lease liabilities 52.3 53.3

Accrued interest 28.6 34.8

Mortgage hedging instruments and commitments 20.5 15.7

Federal and state income tax liabilities 248.5 27.7

Broker deposits related to hedging instruments 43.2 —

Interest rate lock commitments 10.6 —

Other 118.1 123.2

1 unchanged sentence

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-Q

Item 1. Financial Statements