What changed in this filing

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Item 1. Financial Statements

2026-04-23 compared with 2026-01-22 · 231 added, 111 removed, 567 unchanged (38% of the section changed)

14 unchanged sentences

Mortgage loans held for sale 2,680.8 2,566.5

Deferred income taxes, net of valuation allowance of $ 14.6 million

at December 31, 2025 and September 30, 2025

Deferred tax asset, net — 44.5

Property and equipment, net 593.1 578.9

3 unchanged sentences

Accounts payable $ 1,323.5 $ 1,221.9

Deferred tax liability, net 8.4 —

Accrued expenses and other liabilities 3,472.2 3,541.6

4 unchanged sentences

Common stock, $ .01 par value, 1,000,000,000 shares authorized, 404,879,728 shares issued

and 290,498,069 shares outstanding at December 31, 2025 and 404,031,443 shares issued

and 284,940,888 shares outstanding at March 31, 2026 and 404,031,443 shares issued

and 294,475,153 shares outstanding at September 30, 2025

1 unchanged sentence

Retained earnings 32,022.9 31,041.4

Treasury stock, 113,966,599 shares and 109,556,290 shares at December 31, 2025

Treasury stock, 119,938,840 shares and 109,556,290 shares at March 31, 2026

and September 30, 2025, respectively, at cost

8 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(In millions, except per share data)

38 unchanged sentences

$ 4.0 $ 3,587.6 $ 31,504.7 $ ( 11,100.8 ) $ 559.9 $ 24,555.4

Net income — — 647.9 — 10.1 658.0

Stock issued under employee benefit plans ( 415,060 shares)

— 8.6 — — — 8.6

Cash paid for shares withheld for taxes — ( 24.7 ) — — — ( 24.7 )

Stock-based compensation expense — 34.6 — — — 34.6

Cash dividends declared ($ 0.45 per share)

— — ( 129.7 ) — — ( 129.7 )

Repurchases of common stock ( 5,972,241 shares)

— — — ( 903.6 ) — ( 903.6 )

Change of ownership interest in Forestar — ( 2.8 ) — — 3.2 0.4

Balances at March 31, 2026 ( 284,940,888 shares)

$ 4.0 $ 3,603.3 $ 32,022.9 $ ( 12,004.4 ) $ 573.2 $ 24,199.0

See accompanying notes to consolidated financial statements.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (Continued)

Stock Additional

18 unchanged sentences

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

Net income — — 810.4 — 8.7 819.1

Stock issued under employee benefit plans ( 633,434 shares)

— 8.4 — — — 8.4

Cash paid for shares withheld for taxes — ( 35.8 ) — — — ( 35.8 )

Stock-based compensation expense — 32.2 — — — 32.2

Cash dividends declared ($ 0.40 per share)

— — ( 125.5 ) — — ( 125.5 )

Repurchases of common stock ( 9,656,574 shares)

— — — ( 1,303.1 ) — ( 1,303.1 )

Change of ownership in Forestar — ( 3.4 ) — — 3.9 0.5

Balances at March 31, 2025 ( 308,629,060 shares)

$ 4.0 $ 3,509.6 $ 29,352.3 $ ( 8,538.8 ) $ 531.6 $ 24,858.7

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

Six Months Ended March 31,

(In millions)

7 unchanged sentences

Changes in operating assets and liabilities:

Decrease in construction in progress and finished homes 398.8 181.7

Increase in residential land and lots –

(Increase) decrease in construction in progress and finished homes ( 884.3 ) 229.8

Decrease (increase) in residential land and lots –

developed, under development, held for development and held for sale

1 unchanged sentence

Increase in rental properties ( 297.5 ) ( 216.0 )

Decrease in other assets 20.1 65.2

Decrease in mortgage loans held for sale 657.7 683.1

(Decrease) increase in accounts payable, accrued expenses and other liabilities ( 254.1 ) 71.0

Increase in other assets ( 26.2 ) ( 122.9 )

(Increase) decrease in mortgage loans held for sale ( 114.3 ) 22.5

Increase (decrease) in accounts payable, accrued expenses and other liabilities 81.2 ( 48.6 )

Net cash provided by operating activities 441.5 210.5

7 unchanged sentences

Repayment of notes payable ( 891.8 ) ( 1,566.1 )

Repayment on mortgage repurchase facilities, net ( 579.3 ) ( 746.9 )

Borrowings (repayment) on mortgage repurchase facilities, net 69.9 ( 86.4 )

Proceeds from stock associated with certain employee benefit plans 8.9 8.5

Cash paid for shares withheld for taxes ( 54.4 ) ( 63.4 )

9 unchanged sentences

Stock issued under employee incentive plans $ 111.1 $ 143.5

Repurchases of common stock not settled $ 14.5 $ 45.5

See accompanying notes to consolidated financial statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

December 31, 2025

March 31, 2026

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 December 31, 2025, the Company owned a 62 % controlling interest in Forestar Group Inc.

As of March 31, 2026, 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 months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026 or subsequent periods.

therefore, the operating results for the three and six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026 or subsequent periods.

Business Acquisition

12 unchanged sentences

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

December 31, 2025

March 31, 2026

NOTE B – SEGMENT INFORMATION

31 unchanged sentences

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

December 31, 2025

March 31, 2026

The Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer are its Chief Operating Decision Makers (CODMs).

2 unchanged sentences

The tables that follow present financial information pertaining to the Company’s reporting segments.

December 31, 2025

March 31, 2026

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

9 unchanged sentences

Mortgage loans held for sale — — — 2,680.8 — 2,680.8

Deferred income taxes, net 108.6 ( 42.2 ) — — ( 41.4 ) 25.0

Deferred tax asset, net 70.8 ( 42.2 ) — — ( 28.6 ) —

Property and equipment, net 557.1 0.6 7.7 4.2 23.5 593.1

3 unchanged sentences

Accounts payable $ 1,153.4 $ 203.3 $ 73.3 $ 0.4 $ ( 106.9 ) $ 1,323.5

Deferred tax liability, net — — 84.3 — ( 75.9 ) 8.4

Accrued expenses and other liabilities 3,038.7 41.2 401.6 414.2 ( 423.5 ) 3,472.2

5 unchanged sentences

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

December 31, 2025

March 31, 2026

September 30, 2025

10 unchanged sentences

Mortgage loans held for sale — — — 2,566.5 — 2,566.5

Deferred income taxes, net 125.7 ( 42.2 ) — — ( 39.0 ) 44.5

Deferred tax asset, net 125.7 ( 42.2 ) — — ( 39.0 ) 44.5

Property and equipment, net 543.0 0.6 8.1 4.3 22.9 578.9

10 unchanged sentences

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

December 31, 2025

Three Months Ended December 31, 2025

March 31, 2026

Three Months Ended March 31, 2026

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

14 unchanged sentences

Income before income taxes $ 757.9 $ 12.3 $ 43.9 $ 51.7 $ 1.6 $ 867.4

_______________

(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.

(3) Other (income) expense primarily includes interest income but also consists of various other types of ancillary income, gains, expenses and losses not directly associated with sales of homes, land and lots.

AND SUBSIDIARIES

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

March 31, 2026

Six Months Ended March 31, 2026

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

(In millions)

Home sales $ 13,558.2 $ — $ — $ — $ — $ 13,558.2

Land/lot sales and other 33.9 — 647.3 — ( 493.1 ) 188.1

Rental property sales — 321.3 — — — 321.3

Financial services — — — 377.4 — 377.4

13,592.1 321.3 647.3 377.4 ( 493.1 ) 14,445.0

Cost of sales

Home sales (2) 10,810.6 — — — ( 116.1 ) 10,694.5

Land/lot sales and other 26.7 — 505.0 — ( 397.7 ) 134.0

Rental property sales — 275.7 — — ( 0.6 ) 275.1

Inventory and land option charges 35.7 0.4 7.1 — 0.2 43.4

10,873.0 276.1 512.1 — ( 514.2 ) 11,147.0

Selling, general and administrative expense 1,281.4 98.9 74.3 304.8 9.0 1,768.4

Other (income) expense (3) ( 28.3 ) ( 66.2 ) ( 3.9 ) ( 37.1 ) ( 0.3 ) ( 135.8 )

Income before income taxes $ 1,466.0 $ 12.5 $ 64.8 $ 109.7 $ 12.4 $ 1,665.4

Summary Cash Flow Information

8 unchanged sentences

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

December 31, 2025

Three Months Ended December 31, 2024

March 31, 2026

Three Months Ended March 31, 2025

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

14 unchanged sentences

Income before income taxes $ 935.0 $ 22.8 $ 40.7 $ 73.0 $ ( 4.4 ) $ 1,067.1

_______________

(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)

March 31, 2026

Six Months Ended March 31, 2025

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

(In millions)

Home sales $ 14,327.0 $ — $ — $ — $ — $ 14,327.0

Land/lot sales and other 43.2 — 601.3 — ( 474.0 ) 170.5

Rental property sales — 454.3 — — — 454.3

Financial services — — — 395.2 — 395.2

14,370.2 454.3 601.3 395.2 ( 474.0 ) 15,347.0

Cost of sales

Home sales (2) 11,136.7 — — — ( 103.1 ) 11,033.6

Land/lot sales and other 16.7 — 465.2 — ( 387.7 ) 94.2

Rental property sales — 362.2 — — — 362.2

Inventory and land option charges 41.3 3.9 2.0 — ( 0.6 ) 46.6

11,194.7 366.1 467.2 — ( 491.4 ) 11,536.6

Selling, general and administrative expense 1,274.5 104.3 74.3 314.5 9.2 1,776.8

Other (income) expense (3) ( 46.9 ) ( 50.8 ) ( 2.8 ) ( 40.9 ) ( 2.0 ) ( 143.4 )

Income before income taxes $ 1,947.9 $ 34.7 $ 62.6 $ 121.6 $ 10.2 $ 2,177.0

Summary Cash Flow Information

8 unchanged sentences

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

December 31, 2025

March 31, 2026

Revenues, expenses and pre-tax income of the Company’s homebuilding segment are disaggregated into the individual homebuilding reporting segments in the tables below.

3 unchanged sentences

by Reporting Segment

Three Months Ended December 31, 2025

Three Months Ended March 31, 2026

Northwest Southwest South Central Southeast East North Total

11 unchanged sentences

Income before income taxes $ 54.6 $ 114.2 $ 166.3 $ 165.4 $ 134.8 $ 122.6 $ 757.9

Six Months Ended March 31, 2026

Northwest Southwest South Central Southeast East North Total

(In millions)

Home sales $ 1,086.0 $ 1,915.0 $ 2,900.7 $ 3,004.6 $ 2,632.2 $ 2,019.7 $ 13,558.2

Land/lot sales and other 0.4 14.9 0.5 11.9 0.2 6.0 33.9

1,086.4 1,929.9 2,901.2 3,016.5 2,632.4 2,025.7 13,592.1

Cost of sales

Home sales 868.0 1,543.4 2,279.9 2,417.1 2,108.9 1,593.3 10,810.6

Land/lot sales and other 0.1 12.3 — 9.8 — 4.5 26.7

Inventory and land option charges 0.6 4.1 15.8 6.3 6.7 2.2 35.7

868.7 1,559.8 2,295.7 2,433.2 2,115.6 1,600.0 10,873.0

Selling, general and administrative expense 106.1 171.8 270.7 281.3 263.8 187.7 1,281.4

Other (income) expense ( 2.3 ) ( 4.5 ) ( 4.9 ) ( 6.8 ) ( 5.3 ) ( 4.5 ) ( 28.3 )

Income before income taxes $ 113.9 $ 202.8 $ 339.7 $ 308.8 $ 258.3 $ 242.5 $ 1,466.0

AND SUBSIDIARIES

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

March 31, 2026

Homebuilding Results

by Reporting Segment

Three Months Ended December 31, 2024

Three Months Ended March 31, 2025

Northwest Southwest South Central Southeast East North Total

11 unchanged sentences

Income before income taxes $ 93.7 $ 123.3 $ 208.4 $ 211.3 $ 171.8 $ 126.5 $ 935.0

Six Months Ended March 31, 2025

Northwest Southwest South Central Southeast East North Total

(In millions)

Home sales $ 1,193.5 $ 2,203.6 $ 3,016.5 $ 3,332.2 $ 2,668.3 $ 1,912.9 $ 14,327.0

Land/lot sales and other 0.1 0.2 1.1 31.4 6.3 4.1 43.2

1,193.6 2,203.8 3,017.6 3,363.6 2,674.6 1,917.0 14,370.2

Cost of sales

Home sales 915.1 1,729.6 2,332.1 2,627.9 2,049.3 1,482.7 11,136.7

Land/lot sales and other — — 0.4 9.0 4.7 2.6 16.7

Inventory and land option charges 3.1 6.3 5.6 12.9 10.7 2.7 41.3

918.2 1,735.9 2,338.1 2,649.8 2,064.7 1,488.0 11,194.7

Selling, general and administrative expense 109.8 183.2 260.3 289.7 252.1 179.4 1,274.5

Other (income) expense ( 4.3 ) ( 7.0 ) ( 10.5 ) ( 10.0 ) ( 8.4 ) ( 6.7 ) ( 46.9 )

Income before income taxes $ 169.9 $ 291.7 $ 429.7 $ 434.1 $ 366.2 $ 256.3 $ 1,947.9

AND SUBSIDIARIES

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

December 31, 2025

March 31, 2026

The Company’s total inventories are disaggregated into the individual reporting segments in the table below.

Inventories are the only assets included in the measure of segment assets used by the Company’s chief operating decision makers.

Inventories by Reporting Segment December 31,

Inventories by Reporting Segment March 31,

2026 September 30,

17 unchanged sentences

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 December 31, 2025, the Company determined that no communities were impaired, and no impairment charges were recorded during the three months ended December 31, 2025.

There were $ 3.2 million of impairment charges recorded in the prior year quarter.

During the three months ended December 31, 2025, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 11.2 million compared to $ 13.4 million in the prior year quarter.

As of March 31, 2026, the Company performed detailed impairment evaluations of communities and land inventories and determined that communities with a combined carrying value of $ 33.1 million were impaired on a non-recurring basis using Level 3 inputs.

As a result, impairment charges of $ 3.0 million were recorded during the three and six months ended March 31, 2026 to reduce the carrying value of the related inventories to fair value.

There were $ 5.4 million and $ 8.6 million of impairment charges recorded in the three and six months ended March 31, 2025, respectively.

During the three and six months ended March 31, 2026, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 29.1 million and $ 40.4 million, respectively, compared to $ 24.6 million and $ 38.0 million in the prior year periods.

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)

December 31, 2025

March 31, 2026

NOTE D – NOTES PAYABLE

23 unchanged sentences

_____________

(1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $ 18.1 million and $ 18.9 million at December 31, 2025 and September 30, 2025, respectively.

(2) Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $ 6.8 million and $ 7.2 million at December 31, 2025 and September 30, 2025, respectively.

(3) The fair value of notes payable at December 31, 2025 totaled $ 5.6 billion, of which $ 3.8 billion were measured using Level 2 inputs and $ 1.8 billion were measured using Level 3 inputs.

(1) Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $ 17.2 million and $ 18.9 million at March 31, 2026 and September 30, 2025, respectively.

(2) Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $ 6.5 million and $ 7.2 million at March 31, 2026 and September 30, 2025, respectively.

(3) The fair value of notes payable at March 31, 2026 totaled $ 6.6 billion, of which $ 3.8 billion were measured using Level 2 inputs and $ 2.8 billion were measured using Level 3 inputs.

The fair value of notes payable at September 30, 2025 totaled $ 6.0 billion, of which $ 3.8 billion were measured using Level 2 inputs and $ 2.2 billion were measured using Level 3 inputs.

2 unchanged sentences

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

December 31, 2025

The Company has a $ 2.305 billion senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that allows for an increase in its size to $ 3.0 billion, subject to certain conditions and availability of additional bank commitments.

Of the total commitments, $ 2.04 billion matures on December 18, 2029 , and $ 265 million matures on October 28, 2027 .

March 31, 2026

The Company has a senior unsecured homebuilding revolving credit facility that was amended in March 2026 to increase its capacity from $ 2.305 billion to $ 3.295 billion.

The amendment also extended the maturity dates of the facility.

Of the total commitments, $ 265 million matures on October 28, 2027 , $ 1,012.5 million matures on March 27, 2029 and $ 2,017.5 million matures on March 27, 2031 .

The facility has an uncommitted accordion feature that allows for an increase in its size to $ 4.0 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.

At December 31, 2025, there were no borrowings outstanding and $ 224.4 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 2.08 billion.

At March 31, 2026, there were $ 250 million of borrowings outstanding at a 4.5 % annual interest rate and $ 219.8 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 2.825 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.

2 unchanged sentences

The credit agreement governing the facility imposes restrictions on the creation of secured debt and liens.

At December 31, 2025, the Company had $ 3.0 billion principal amount of homebuilding senior notes outstanding that mature from October 2026 through October 2035.

At March 31, 2026, the Company had $ 3.0 billion principal amount of homebuilding senior notes outstanding that mature from October 2026 through October 2035.

The indenture governing the senior notes imposes restrictions on the creation of secured debt and liens.

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.

At December 31, 2025, the Company was in compliance with all of the covenants, limitations and restrictions of its homebuilding revolving credit facility and public debt obligations.

At March 31, 2026, 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.

2 unchanged sentences

The authorization has no expiration date.

All of the $ 500 million authorization was remaining at December 31, 2025.

All of the $ 500 million authorization was remaining at March 31, 2026.

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.

1 unchanged sentence

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.

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

At December 31, 2025, there were $ 760 million of borrowings outstanding at a 5.5 % annual interest rate and no letters of credit issued under the facility, resulting in available capacity of $ 290 million.

The facility was amended in March 2026 to extend its maturity date to March 27, 2030.

At March 31, 2026, there were $ 865 million of borrowings outstanding at a 5.4 % annual interest rate and no letters of credit issued under the facility, resulting in available capacity of $ 185 million.

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

2 unchanged sentences

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.

At December 31, 2025, DRH Rental was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

At March 31, 2026, DRH Rental was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

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.

3 unchanged sentences

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

December 31, 2025

March 31, 2026

Forestar has a $ 715 million senior unsecured revolving credit facility with an 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 current capacity of the facility reflects additional bank commitments of $ 25 million and $ 50 million obtained in October 2025 and March 2026, respectively.

Of the total commitments, $ 650 million matures on December 18, 2029 , and $ 65 million matures on October 28, 2026 .

2 unchanged sentences

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

At December 31, 2025, there were no borrowings outstanding and $ 57.4 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 607.6 million.

At March 31, 2026, there were no borrowings outstanding and $ 42.9 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 672.1 million.

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

2 unchanged sentences

At December 31, 2025, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations.

At March 31, 2026, 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.

3 unchanged sentences

The authorization has no expiration date.

All of the $ 30 million authorization was remaining at December 31, 2025.

All of the $ 30 million authorization was remaining at March 31, 2026.

Financial Services

3 unchanged sentences

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

At December 31, 2025, DHI Mortgage had an obligation of $ 768.1 million under the committed mortgage repurchase facility at a 5.4 % annual interest rate.

At December 31, 2025, the uncommitted mortgage repurchase facility had a borrowing capacity of $ 500 million, of which DHI Mortgage had an obligation of $ 60.9 million at a 5.0 % annual interest rate.

At December 31, 2025, $ 1.87 billion of mortgage loans held for sale with a collateral value of $ 1.83 billion were pledged under the committed mortgage repurchase facility, and $ 75.6 million of mortgage loans held for sale with a collateral value of $ 73.0 million were pledged under the uncommitted mortgage repurchase facility.

At March 31, 2026, DHI Mortgage had an obligation of $ 1.1 billion under the committed mortgage repurchase facility at a 5.4 % annual interest rate.

At March 31, 2026, the uncommitted mortgage repurchase facility had a borrowing capacity of $ 500 million, of which DHI Mortgage had an obligation of $ 416.1 million at a 4.9 % annual interest rate.

At March 31, 2026, $ 2.31 billion of mortgage loans held for sale with a collateral value of $ 2.26 billion were pledged under the committed mortgage repurchase facility, and $ 464.6 million of mortgage loans held for sale with a collateral value of $ 430.7 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 December 31, 2025, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facilities.

At March 31, 2026, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facilities.

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

2 unchanged sentences

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

December 31, 2025

March 31, 2026

NOTE E – CAPITALIZED INTEREST

2 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 three months of fiscal 2026 and fiscal 2025, 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, 2025 and 2024:

During the first six months of fiscal 2026 and fiscal 2025, 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 six months ended March 31, 2026 and 2025:

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(In millions)

4 unchanged sentences

__________________

(1) Interest incurred in the three months ended December 31, 2025 and 2024 includes (a) interest on the Company’s mortgage repurchase facilities of $ 4.8 million and $ 8.1 million, respectively;

(b) Forestar interest of $ 12.5 million and $ 8.3 million, respectively;

and (c) interest on the rental revolving credit facility of $ 9.2 million and $ 12.4 million, respectively.

(1) Interest incurred includes (a) interest on the Company’s mortgage repurchase facilities of $ 4.2 million and $ 8.9 million in the three and six months ended March 31, 2026, respectively, and $ 7.4 million and $ 15.5 million in the prior year periods;

(b) Forestar interest of $ 12.4 million and $ 25.0 million in the three and six months ended March 31, 2026, respectively, and $ 10.6 million and $ 18.8 million in the prior year periods;

and (c) interest on the rental revolving credit facility of $ 10.3 million and $ 19.4 million in the three and six months ended March 31, 2026, respectively, and $ 16.4 million and $ 28.8 million in the prior year periods.

NOTE F – MORTGAGE LOANS

2 unchanged sentences

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

At December 31, 2025, mortgage loans held for sale of $ 1.9 billion had an aggregate outstanding principal balance of $ 2.0 billion.

At March 31, 2026, mortgage loans held for sale of $ 2.7 billion had an aggregate outstanding principal balance of $ 2.8 billion.

At September 30, 2025, mortgage loans held for sale of $ 2.6 billion had an aggregate outstanding principal balance of $ 2.7 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 three months ended December 31, 2025 and 2024, mortgage loans originated totaled $ 4.87 billion and $ 5.15 billion, respectively, and mortgage loans sold totaled $ 5.53 billion and $ 5.74 billion, respectively.

The Company had gains on sales of loans and servicing rights of $ 124.1 million during the three months ended December 31, 2025 compared to $ 120.1 million in the prior year period.

During the six months ended March 31, 2026 and 2025, mortgage loans originated totaled $ 10.3 billion and $ 10.5 billion, respectively, and mortgage loans sold totaled $ 10.2 billion and $ 10.5 billion, respectively.

The Company had gains on sales of loans and servicing rights of $ 127.8 million and $ 251.8 million during the three and six months ended March 31, 2026, respectively, compared to $ 151.1 million and $ 271.1 million in the prior year periods.

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

During the three months ended December 31, 2025, approximately 68 % 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 22 % were sold to one other major financial entity.

During the six months ended March 31, 2026, approximately 72 % 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 19 % 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 December 31, 2025 and September 30, 2025, the Company had mortgage-backed securities (MBS) totaling $ 793.5 million and $ 677.5 million, respectively, that did not yet have interest rate lock commitments (IRLCs) or closed loans created or assigned.

The Company recorded a liability of $ 0.1 million and an asset of $ 1.9 million at December 31, 2025 and September 30, 2025, 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 both December 31, 2025 and September 30, 2025, the notional amount of IRLCs, which are accounted for as derivative instruments recorded at fair value using Level 3 inputs, totaled $ 2.1 billion.

At March 31, 2026 and September 30, 2025, the Company had mortgage-backed securities (MBS) totaling $ 1.1 billion and $ 677.5 million, respectively, that did not yet have interest rate lock commitments (IRLCs) or closed loans created or assigned.

The Company recorded a liability of $ 0.1 million and an asset of $ 1.9 million at March 31, 2026 and September 30, 2025, respectively, for the fair value of such MBS position, which is measured using Level 2 inputs.

AND SUBSIDIARIES

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

December 31, 2025

March 31, 2026

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 March 31, 2026 and September 30, 2025, the notional amount of IRLCs, which are accounted for as derivative instruments recorded at fair value using Level 3 inputs, totaled $ 3.4 billion and $ 2.1 billion, respectively.

NOTE G – INCOME TAXES

The Company’s income tax expense for the three months ended December 31, 2025 and 2024 was $ 196.7 million and $ 258.0 million, respectively.

The effective tax rate was 24.6 % for the three months ended December 31, 2025 compared to 23.2 % in the prior year period.

The effective tax rates for both periods include an expense for state income taxes and tax benefits related to federal energy efficient home tax credits.

The effective tax rate for the three months ended December 31, 2024 also includes a tax benefit related to stock-based compensation.

The Company’s deferred tax assets, net of deferred tax liabilities, were $ 39.6 million at December 31, 2025 compared to $ 59.1 million at September 30, 2025.

The Company has a valuation allowance of $ 14.6 million at December 31, 2025 and September 30, 2025 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 and six months ended March 31, 2026 was $ 209.4 million and $ 406.0 million, respectively, compared to $ 248.0 million and $ 506.0 million in the prior year periods.

The effective tax rate was 24.1 % and 24.4 % for the three and six months ended March 31, 2026, respectively, compared to 23.2 % in both 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 home tax credits.

At March 31, 2026, the Company had deferred tax liabilities, net of deferred tax assets, of $ 8.4 million, after consideration of a valuation allowance of $ 14.6 million recorded against certain deferred tax assets.

At September 30, 2025, the Company had deferred tax assets, net of deferred tax liabilities, of $ 44.5 million, after consideration of a valuation allowance of $ 14.6 million recorded against certain deferred tax assets.

The valuation allowance for both periods relates 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.

Any reversal of the valuation allowance in future periods will impact the Company’s effective tax rate.

Reversal of any portion of the valuation allowance in future periods would impact the Company’s effective tax rate.

NOTE H – EARNINGS PER SHARE

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(In millions, except per share data)

11 unchanged sentences

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

December 31, 2025

March 31, 2026

NOTE I – STOCKHOLDERS’ EQUITY

2 unchanged sentences

The authorization has no expiration date.

During the three months ended December 31, 2025, the Company repurchased 4.4 million shares of its common stock at a total cost including commissions and excise taxes of $ 669.7 million.

At December 31, 2025, there was $ 2.6 billion remaining on the repurchase authorization.

During the three months ended December 31, 2025, the Board of Directors approved a quarterly cash dividend of $ 0.45 per share totaling $ 131.5 million, which was paid on November 20, 2025 to stockholders of record on November 13, 2025.

In January 2026, the Board of Directors approved a quarterly cash dividend of $ 0.45 per share, payable on February 12, 2026 to stockholders of record on February 5, 2026.

During the six months ended March 31, 2026, the Company repurchased 10.4 million shares of its common stock at a total cost including commissions and excise taxes of $ 1.6 billion.

At March 31, 2026, there was $ 1.7 billion remaining on the repurchase authorization.

During each of the first two quarters of fiscal 2026, the Board of Directors approved a quarterly cash dividend of $ 0.45 per share, the most recent of which was paid on February 12, 2026 to stockholders of record on February 5, 2026.

Cash dividends declared and paid in the three and six months ended March 31, 2026 totaled $ 129.7 million and $ 261.2 million, respectively.

In April 2026, the Board of Directors approved a quarterly cash dividend of $ 0.45 per share, payable on May 14, 2026 to stockholders of record on May 7, 2026.

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, 2025, there were no shares issued under the ATM program.

At December 31, 2025, the full $ 750 million remained available for issuance under Forestar’s shelf registration statement, with $ 300 million reserved for sales under the ATM program.

During the six months ended March 31, 2026, there were no shares issued under the ATM program.

At March 31, 2026, the full $ 750 million remained available for issuance under Forestar’s shelf registration statement, with $ 300 million reserved for sales under the ATM program.

NOTE J – EMPLOYEE BENEFIT PLANS

8 unchanged sentences

The grant date fair value of these equity awards was $ 157.79 per unit.

Compensation expense related to this grant was $ 3.8 million in the three months ended December 31, 2025, 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, 2025, the Company granted approximately 670,000 RSUs to approximately 1,600 recipients, including executive officers, other key employees and non-management directors.

Compensation expense related to this grant was $ 5.1 million and $ 8.9 million in the three and six months ended March 31, 2026, respectively, 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 six months ended March 31, 2026, the Company granted approximately 670,000 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 $ 143.05 per unit, and they vest annually in equal installments over periods of three to five years.

Compensation expense related to these grants was $ 11.8 million in the three months ended December 31, 2025, which included $ 8.1 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 $ 37.6 million during the three months ended December 31, 2025 compared to $ 40.1 million during the three months ended December 31, 2024.

Compensation expense related to these grants was $ 5.0 million and $ 16.8 million in the three and six months ended March 31, 2026, respectively.

Compensation expense in the six month period included $ 8.1 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 $ 31.9 million and $ 69.5 million during the three and six months ended March 31, 2026, respectively, compared to $ 29.8 million and $ 69.8 million during the three and six months ended March 31, 2025.

AND SUBSIDIARIES

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

December 31, 2025

March 31, 2026

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 months ended December 31, 2025 and 2024 were as follows:

Changes in the Company’s warranty liability during the three and six months ended March 31, 2026 and 2025 were as follows:

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(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 $ 1.1 billion at both December 31, 2025 and September 30, 2025 and are included in accrued expenses and other liabilities in the consolidated balance sheets.

Approximately 98 % of these reserves related to construction defect matters at both December 31, 2025 and September 30, 2025.

Expenses related to the Company’s legal contingencies were $ 27.7 million and $ 40.0 million in the three months ended December 31, 2025 and 2024, respectively.

Changes in the Company’s legal claims reserves during the three months ended December 31, 2025 and 2024 were as follows:

The estimated liabilities for these contingencies were $ 1.1 billion at both March 31, 2026 and September 30, 2025 and are included in accrued expenses and other liabilities in the consolidated balance sheets.

Approximately 99 % and 98 % of these reserves related to construction defect matters at March 31, 2026 and September 30, 2025, respectively.

Expenses related to the Company’s legal contingencies were $ 58.0 million and $ 97.3 million in the six months ended March 31, 2026 and 2025, respectively.

Changes in the Company’s legal claims reserves during the three and six months ended March 31, 2026 and 2025 were as follows:

Three Months Ended

March 31, Six Months Ended

2026 2025 2026 2025

(In millions)

5 unchanged sentences

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

December 31, 2025

March 31, 2026

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 $ 159.3 million, $ 167.0 million and $ 120.0 million at December 31, 2025, September 30, 2025 and December 31, 2024, 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 $ 152.3 million, $ 167.0 million and $ 126.7 million at March 31, 2026, September 30, 2025 and March 31, 2025, 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 December 31, 2025, the Company had total deposits of $ 2.4 billion, consisting of cash deposits of $ 2.2 billion and promissory notes and surety bonds of $ 167.4 million, related to contracts to purchase land and lots with a total remaining purchase price of approximately $ 26.7 billion.

At March 31, 2026, the Company had total deposits of $ 2.5 billion, consisting of cash deposits of $ 2.3 billion and promissory notes and surety bonds of $ 180.1 million, related to contracts to purchase land and lots with a total remaining purchase price of approximately $ 26.7 billion.

Of these amounts, $ 211.9 million of the deposits related to contracts with Forestar to purchase land and lots with a remaining purchase price of $ 2.1 billion.

A limited number of the homebuilding land and lot purchase contracts at December 31, 2025, representing $ 79.4 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 March 31, 2026, representing $ 76.8 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 $ 76.8 million remaining purchase price subject to specific performance provisions, $ 26.1 million related to contracts between the homebuilding segment and Forestar.

During the three months ended December 31, 2025 and 2024, Forestar reimbursed the homebuilding segment $ 1.7 million and $ 10.0 million, respectively, for previously paid earnest money and $ 7.8 million and $ 4.2 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 six months ended March 31, 2026, Forestar reimbursed the homebuilding segment $ 1.8 million and $ 3.5 million, respectively, for previously paid earnest money and $ 12.2 million and $ 20.1 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 six months ended March 31, 2025, Forestar reimbursed the homebuilding segment $ 4.6 million and $ 14.6 million, respectively, for previously paid earnest money and $ 4.0 million and $ 8.2 million, respectively, for such pre-acquisition and due diligence costs.

Other Commitments

At December 31, 2025, the Company had outstanding surety bonds of $ 3.3 billion and letters of credit of $ 281.8 million to secure performance under various contracts.

At March 31, 2026, the Company had outstanding surety bonds of $ 3.3 billion and letters of credit of $ 262.7 million to secure performance under various contracts.

Of the total letters of credit, $ 219.8 million were issued under the homebuilding revolving credit facility and $ 42.9 million were issued under Forestar’s revolving credit facility.

1 unchanged sentence

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

December 31, 2025

March 31, 2026

NOTE L – OTHER ASSETS, ACCRUED EXPENSES AND OTHER LIABILITIES

The Company’s other assets at December 31, 2025 and September 30, 2025 were as follows:

The Company’s other assets at March 31, 2026 and September 30, 2025 were as follows:

2026 September 30,

14 unchanged sentences

$ 3,851.5 $ 3,797.2

The Company’s accrued expenses and other liabilities at December 31, 2025 and September 30, 2025 were as follows:

The Company’s accrued expenses and other liabilities at March 31, 2026 and September 30, 2025 were as follows:

2026 September 30,

10 unchanged sentences

Mortgage hedging instruments and commitments — 34.1

Broker deposits related to hedging instruments 2.2 —

Federal and state income tax liabilities 16.2 19.0

Broker deposits related to hedging instruments 48.0 —

Interest rate lock commitments 9.6 —

Other 117.5 141.0

$ 3,472.2 $ 3,541.6

_______________

(1) In certain projects, the Company has entered into agreements to be reimbursed for eligible infrastructure costs from municipal districts as funds are available to the district.

The Company has pledged certain of these future reimbursements as collateral to a third party, and the third party issued bonds against this collateral.

The Company received the cash proceeds from the third-party bond issuance.

The Company has no future performance obligations related to the cash proceeds received, no obligations related to any future interest or principal payments to the third-party bondholders, and the third party has no recourse against the Company for the reimbursement of these funds.

However, under the applicable accounting rules, since the Company pledged only certain reimbursements and not the entire amount, the Company recorded a non-cash transaction to increase assets and a related liability for the amount of the unpaid balance of the third-party bonds.

The asset and liability will be reduced as the third-party bonds are repaid by the municipal district.

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