Forward-Looking Statements

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3 Forward-Looking Statements This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 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: potential deterioration in homebuilding industry conditions or general economic conditions; the cyclical nature of the homebuilding industry and changes in economic, real estate and other conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing and the liquidity provided by government-sponsored enterprises, the effects of government 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; home warranty and construction defect claims; 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 impact of an inflationary, deflationary or higher interest rate environment; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulation on our financial services operations; our substantial debt and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within the homebuilding and financial services industries; our ability to effect our growth strategies or acquisitions successfully; our ability to realize the full amount of our deferred income tax assets; the effects of the loss of key personnel; the effects of negative publicity; 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 our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission. 3

4 D.R. Horton, Inc. Traded on NYSE as DHI #1 builder for 13 consecutive years 1 $8.7 billion in annual revenues 2 30,455 in annual homes closed 2 $10.3 billion of total assets 3 $5.3 billion of stockholders equity 3 1 Based on public builders reported closings as of January 26, Twelve months ended December 31, As of December 31,

5 Geographic Diversification HB Revenue (TTM Ended 12/31/14) West 25% East 13% 79 Markets 27 States Midwest 6% Southwest 3% Southeast 28% Inventory (as of 12/31/14) West 28% East 11% South Central 25% Midwest 7% Region East States Covered Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia Midwest Colorado, Illinois, Indiana, Minnesota Southeast Alabama, Florida, Georgia, Mississippi, Tennessee Southwest 4% Southeast 26% South Central 24% South Central Southwest West Louisiana, Oklahoma, Texas Arizona, New Mexico California, Hawaii, Nevada, Oregon, Utah, Washington 5

6 Broad Range of Product Offerings Homes for entry-level, move-up and luxury buyers Under $150k $500k+ $400k to $500k $151k to $200k $300k to $400k $200k to $250k $250k to $300k 53% of closings < $250,000 in Q1 FY15, down from 58% in Q1 FY14 Revenues from homes > $500,000 increased to 17% of home sales revenues in Q1 FY15 compared to 14% in Q1 FY14 6

7 D.R. Horton The Heart of our Business 79 markets and 27 states In the first quarter, accounted for: 84% of homes sold 87% of homes closed 88% of home sales revenue Q1 Average Closing Price: $283,000 Reported metrics for D.R. Horton include our Breland Homes and Crown Communities operations 7

8 Emerald Homes Higher-end move-up and luxury buyer Introduced in markets and 15 states In the first quarter, accounted for: 3% of homes sold 3% of homes closed 6% of home sales revenue Q1 Average Closing Price: $660,000 Higher margin, slower absorption 8

9 Express Homes Targeted at the true entry-level buyer Introduced in Spring 2014 $151k to $200k 38 markets and 11 states In the first quarter, accounted for: 13% of homes sold 10% of homes closed 6% of home sales revenue Q1 Average Closing Price: $169,000 Higher absorption, lower margin Reported metrics for Express include our Regent Homes operations 9

10 Operational Focus Current land ownership level is sufficient to support double-digit revenue growth Underwriting criteria for land and lot purchases and operational expectations for each community: Minimum 20% annual net return on inventory investment (ROI) for all three brands Net ROI% = Pre-tax Income divided by Average Inventory Consistently optimize balance of sales absorptions and gross margins to maximize returns in each community Manage land and home inventory levels efficiently Improve cash flow generation 10

11 Q1 FY 2015 Highlights The value of net homes sold, homes closed and homes in backlog increased by 40%, 37% and 29%, respectively 7,370 net homes sold and 7,973 homes closed 9,285 homes in backlog at 12/31/14 Consolidated pre-tax income increased 16% to $220.7 million Consolidated pre-tax income margin was 9.6% Net income increased 16% to $142.5 million 11

12 Sales, Closings & Backlog Q1 FY15 Net Sales Orders, Homes Closed and Homes in Backlog increased 35%, 29% and 21%, respectively, in Q1 of FY15 compared to Q1 of FY14 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Sales Closings Backlog 1Q FY13 1Q FY14 1Q FY15 12

13 Income Statement 3 Months Ended Fiscal Year Ended 12/31/ /31/2013 9/30/2014 9/30/2013 Homes closed 7,973 6,188 28,670 24,155 Revenues: Home sales $ 2,240.7 $ 1,630.8 $ 7,804.7 $ 6,024.8 Land/lot sales & other , , , ,085.9 Gross Profit: Home sales , ,253.3 Land/lot sales & other Inventory & land option charges (6.0) (2.6) (85.2) (31.1) , ,232.4 SG&A Interest and other (income) (5.5) (3.3) (13.1) (9.8) Homebuilding pre-tax income Financial Services pre-tax income Pre-tax income Income tax expense Net income $ $ $ $ $ in millions 13

14 Home Sales Gross Margin 25% Homes sales gross margin of around 20% in a stable housing market 20% 21.4% 21.9% 22.3% 22.5% 20.7% 20.5% 19.8% 15% 18.8% 20.4% 10% 5% 16.1% 17.7% 0% FY11 FY12 1Q FY13 2Q FY13 3Q FY13 4Q FY13 Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Shown as a % of home sales revenues Includes interest amortized to cost of sales 14

15 Homebuilding SG&A Long-term annual SG&A goal = 10% of homebuilding revenues Improved 60 basis points year-over-year in Fiscal Year 2014 First Fiscal Quarter 2015 SG&A $ SG&A $ $1,000 $800 $600 $ % $ % $834.2 $250 $200 $150 $ % $ % $238.0 $200 $50 $ $0 Q1 FY14 Q1 FY15 Shown as a % of homebuilding revenues $ in millions 15

16 Homebuilding Pre-tax Income Homebuilding pre-tax income margin in Q was 9.1% Fiscal Year 2014 First Fiscal Quarter 2015 PTI $ PTI $ $ % $ % $ % $200 $400 $592.3 $768.8 $190 $ % $206.1 $200 $170 $181.9 $ $160 Q1 FY14 Q1 FY15 Shown as a % of homebuilding revenues $ in millions 16

17 Balance Sheet 12/31/14 9/30/14 12/31/13 HB cash and cash equivalents $ $ $ Restricted cash Inventories 7, , ,496.1 Deferred income taxes, net Other assets 1, , Total $ 10,338.7 $ 10,202.5 $ 8,927.2 Notes payable - HB $ 3,403.1 $ 3,323.6 $ 3,276.1 Other liabilities 1, , ,451.2 Equity 5, , ,199.9 Total $ 10,338.7 $ 10,202.5 $ 8,927.2 Homebuilding Leverage Gross 39.3% 39.4% 43.8% Net of cash 35.4% 34.5% 37.1% Book Value/Share $14.40 $14.03 $12.97 $ in millions 17

18 Homes in Inventory Growing housing inventory to meet increasing sales pace 22,000 20,000 20,600 21,300 18,000 16,000 17,000 16,800 14,000 12,000 10,000 8,000 6,000 4,000 2,000 10,500 13, /30/11 9/30/12 9/30/13 12/31/13 9/30/14 12/31/14 Models Sold Specs 18

19 Robust Lot Position 71,000 of our total lots are finished at 12/31/14 200, , , , , , , ,700 54,300 49,000 58,900 60, , , ,700 58, ,000 26,900 80,000 60, , , , ,500 40,000 85,800 94,600 20, /30/11 9/30/12 9/30/13 12/31/13 9/30/14 12/31/14 Optioned Owned 19

20 Inactive Land Held for Development $800 Mothballed lot count down 36% from 9/30/ $700 $600 $ ,100 $ , $500 $ $400 $300 21,700 $332.8 $ $200 14,000 13, $ $0 9/30/11 9/30/12 9/30/13 9/30/14 12/31/14 Balance Lots Held Land held for development is shown as separate line item on face of balance sheet $ in millions 0 20

21 Public Debt Maturities by Year $800 As of February 17, 2015 $700 $700 $600 $500 $543 $500 $500 $400 $ % $350 $400 $350 $400 $ % $200 $ % 4.750% 3.625% 3.750% 4.000% 4.375% 4.750% $0 FY 16 FY 17 FY 18 FY 19 FY 20 FY 22 FY 23 Pro-forma balance of public notes o/s of $3.3b (for Feb issuance of $500m 4.0% notes due 2020 and payment of $158m notes at maturity). $ in millions 21

22 FY 2015 Expectations* Fiscal Year: Closings between 34,500 and 37,500 and consolidated revenues between $9.5 billion and $10.5 billion Home sales gross margin of 19.5% to 20.5% with potential quarterly fluctuations outside of this range Homebuilding SG&A expense of 10.0% to 10.3% of homebuilding revenues for full year Financial Services operating margin of 25% to 30% 2015 income tax rate between 35% and 36% Second Quarter: Diluted share count of approximately 370 million shares Backlog conversion rate of between 81% and 85% Home sales gross margin in the range of 19.5% to 20.0% Homebuilding SG&A expense in the range of 10.6% to 10.8% of homebuilding revenues *Based on the relatively stable market conditions noted on the Company s conference call on 1/26/15. 22