I N V E S T O R P R E S E N T A T I O N I N V E S T O R P - PowerPoint PPT Presentation

I N V E S T O R P R E S E N T A T I O N I N V E S T O R P R E S E N T A T I O N Q 3 2 0 2 0 Q 3 2 0 2 0

2

F O R W A R D - L O O K I N G S T A T E M E N T S This presentation may include “forward ‐ looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Factors that may cause the actual results to be materially different from the future results expressed by the forward ‐ looking statements include, but are not limited to: the effects of public health issues such as a major epidemic or pandemic, including the impact of C-19 on the economy and our businesses; the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and other conditions; constriction of the credit and public capital markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land and lot inventory; our ability to effect our growth strategies, acquisitions or investments successfully; the impact of an inflationary, deflationary or higher interest rate environment; home warranty and construction defect claims; the effects of health and safety incidents; the effects of negative publicity; supply shortages and other risks of acquiring land, building materials and skilled labor; reductions in the availability of performance bonds; increases in the costs of owning a home; the effects of governmental regulations and environmental matters on our homebuilding and land development operations; the effects of governmental regulations on our financial services operations; our ability to manage and service our debt and comply with related debt covenants, restrictions and limitations; competitive conditions within the homebuilding, lot development and financial services industries; the effects of the loss of key personnel; and information technology failures and data security breaches. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton’s annual report on Form 10 ‐ K and subsequent quarterly reports on Form 10-Q, all of which are or will be filed with the Securities and Exchange Commission. 3

C O V I D - 1 9 ( “ C - 1 9 ” ) • During the latter part of March 2020, the impacts of the C-19 pandemic and the related widespread reductions in economic activity across the U.S. began to negatively affect the Company’s business; however, residential construction and financial services are designated as essential businesses as part of critical infrastructure in almost all municipalities across the U.S. where the Company operates, and D.R. Horton implemented operational protocols to comply with social distancing and other health and safety standards • During April 2020 when restrictive stay-at-home orders were in place for many markets, the Company experienced increases in sales cancellations and decreases in sales orders, and net sales orders for April were 1% lower than the same month in the prior year; however, as economic activity began to resume and restrictive orders began to be lifted, the Company’s weekly sales pace during May and June increased significantly and cancellation rates returned to normal levels • In both May and June, the Company’s net sales orders increased by more than 50% compared to the prior year periods; however, even with the resurgence of demand in May and June, the Company remains cautious as to the impact C-19 may have on its operations and on the overall economy in the future as there is significant uncertainty regarding the extent to which and how long C-19 and its related effects will impact the U.S. economy and level of employment, capital markets, secondary mortgage markets, consumer confidence, demand for the Company’s homes and availability of mortgage loans to homebuyers. • The extent to which this impacts the Company’s operational and financial performance will depend on future developments, including the duration and spread of C-19 and the impact on D.R. Horton’s customers, trade partners and employees, all of which are highly uncertain and cannot be predicted. • The Company believes its strong balance sheet and liquidity position provides it with the flexibility to operate effectively through these changing economic conditions, and the Company plans to continue to generate strong cash flows from its homebuilding operations and manage its land acquisition and development investments, product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on its inventory investments in each of its communities based on local housing market conditions 4

D . R . H O R T O N , I N C . T R A D E D O N N Y S E A S D H I $18.9 billion $2.6 billion 21.6% & 19.9% Consolidated revenues Consolidated pre-tax income ROI (HB) & ROE, respectively* $11.0 billion $30.38 18.4% Stockholders’ equity Book value per common share Homebuilding leverage* As of or for the twelve-month period ended June 30, 2020 *See slides 15 and 16 for definitions of ROI [Return on Inventory (Homebuilding)], ROE (Return on Equity) and homebuilding leverage 5

D H I G R O W T H , C O N S O L I D A T I O N A N D M A R K E T S H A R E 61,164 Homes Closed during TTM ended 6/30/2020 1,400 10% 2019 Closings: 9% 58,434 1,200 8% 1,000 7% 6% 2006 Closings: 800 53,410 2011 Closings: 5% 17,176 600 4% 3% 400 2% 200 1992 Closings: 1% 1,231 0 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total New U.S. Single-Family Houses Sold ('000s) DHI Homes Closed as a Percentage of U.S. Single-Family New Home Sales Source: Company filings, Census Note: Periods represent full calendar year 6

M A R K E T S H A R E D O M I N A N C E D.R. Horton Share and Rankings in Largest U.S. Housing Markets Top 5 Markets Top 50 Markets 50 18% 16% 44 40 14% 40 36 12% 30 10% 8% 20 6% 4% 10 11 2% 0 0% #1 Top 5 Top 10 Operate In DFW Houston Atlanta Phoenix Austin DHI Market Share Next Ranking Competitor Market Share Source: Builder magazine ‐ 2020 Local Leaders issue, rankings based on homes closed in calendar 2019 7

M A N A G E M E N T T E N U R E A N D E X P E R I E N C E Executive Team & Region Presidents ~27 years Division Presidents ~15 years City Managers >10 years Average employee tenure 8

C A P I T A L A N D C A S H F L O W P R I O R I T I E S • Balanced, disciplined, flexible and opportunistic; focused on enhancing long-term value • Strong balance sheet, ample liquidity and low leverage provide significant financial flexibility to effectively operate through changing economic conditions • Invest in homebuilding business • Invest in DHI Communities, our multi-family rental company • Maintain conservative homebuilding leverage • In early May, issued $500 million of 2.6% senior notes due 2025 • $400 million of senior note maturities in next twelve months • Dividends to shareholders • Repurchases of common stock • Plan to cautiously manage level of share repurchases in the near-term to maintain financial flexibility until there is better visibility to future market conditions and the company’s expected operating results 9

H O M E B U I L D I N G O P E R A T I O N A L F O C U S • Maximize returns by managing inventories, sales pace and pricing in each community, while maintaining affordability for homebuyers • Consolidate market share while generating strong profits and operating cash flow • Maintain sufficient inventories of land, lots and homes to support growth plans • Underwriting expectations for each community: • Minimum 20% annual pre tax return on inventory (ROI) • Initial cash investment returned within 24 months or less • Expanding relationships with land developers to increase lots controlled • Continue to grow Forestar’s lot manufacturing platform • Control SG&A while ensuring infrastructure supports the business 10

G E O G R A P H I C D I V E R S I F I C A T I O N 8 8 M A R K E T S | 2 9 S T A T E S 6% 9% 26% EAST 12% MIDWEST Delaware, Maryland, Colorado, Illinois, Inventory New Jersey, North 20% Indiana, Iowa, and South Carolina, 27% Minnesota, Ohio Pennsylvania, Virginia SOUTH CENTRAL SOUTHEAST Louisiana Alabama, Florida, Oklahoma Georgia, Mississippi, Texas Tennessee 5% 7% WEST 30% SOUTHWEST 13% California, Hawaii, Arizona Homebuilding Nevada, Oregon, New Mexico Utah, Washington Revenue 20% 25% As of or for the twelve-month period ended June 30, 2020 Savannah, Georgia is included in the East Region; Atlanta and Augusta, Georgia are included in the Southeast Region 11

D I V E R S E P R O D U C T O F F E R I N G S A N D P R I C E P O I N T S Homes for entry-level, move-up, active adult and luxury buyers 66% of homes closed <$300k $300k - $500k >$500k $0 - $200k $200k - $250k $250k - $300k 7% 32% 29% 27% 5% Represents homes closed & price points for the twelve months ended 6/30/20 12