D R Horton : 13th Annual J.P. Morgan Homebuilding and Building Products Conference

13th Annual J.P. Morgan Homebuilding and Building Products Conference

May 19, 2020

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 COVID-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 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.

2

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

$18.5 billion	$2.4 billion	19.1%
Consolidated revenues	Consolidated pre-tax income	Return on Equity*

$10.5 billion	$28.77	19.2%
Stockholders' equity	Book value per common share	Homebuilding leverage*

As of or for the twelve-month period ended March 31, 2020

*See slide 13 for definition of Return on Equity and homebuilding leverage

3

C O V I D - 1 9 ( " C - 1 9 " )

• Economic fundamentals remained solid in the housing market throughout most of Q2 FY20; however, during the latter part of March and into April, the impacts of C-19 and the related widespread reductions in economic activity began to negatively affect the Company's business operations and the demand for its homes across all of its operating markets
• The Company experienced increases in sales cancellations and decreases in sales orders in late March and April as compared to the same period in the prior year
• In almost all municipalities across the U.S. where the Company operates, residential construction and financial services have been designated as essential businesses as part of critical infrastructure, and D.R. Horton has continued its homebuilding, lot development and financial services operations in those markets where allowed while implementing operational protocols to comply with social distancing and other health and safety standards
• The Company's mortgage subsidiary experienced lower pricing and gains on sales of mortgage loans and servicing rights in late March and April due to disruption in the secondary mortgage market, and many purchasers and servicers of mortgages have limited their purchases and tightened their credit standards due to liquidity and operational challenges caused by C-19 and the uncertainty of the impact of the borrower forbearance provisions of the federal CARES Act enacted in late March 2020
• The extent to which C-19 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 it is well positioned to operate in this uncertain environment, with experienced operating teams, low leverage and a strong liquidity position, and the Company intends to maintain its flexible operational and financial position by generating strong cash flows from its homebuilding operations and adjusting 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

F Y 2 0 2 0 H I G H L I G H T S - Q 2 , M A R C H & A P R I L

Q2

• Net income increased 37% to $482.7 million or $1.30 per diluted share
• Pre-taxincome increased 34% to $621.3 million, with a pre-tax profit margin of 13.8%
• Net homes sold and homes closed increased by 20% and 8%, respectively

March

• Homes closed increased 6% to 6,677 homes and 8% in value to $2.0 billion
• Net homes sold increased 6% to 6,491 homes and 5% in value to $1.9 billion
• • Cancellation rate was 24% compared to 18%

April

• Homes closed increased 7% to 4,713 homes and 8% in value to $1.4 billion
• Net homes sold decreased 1% to 5,356 homes and 6% in value to $1.5 billion
• • Cancellation rate was 27% compared to 19%

Comparisons to same periods in the prior year

5

B R O A D G E O G R A P H I C F O O T P R I N T

8 9 M A R K E T S | 2 9 S T A T E S

6

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

67% of homes closed <$300k

$0 - $200k $200k - $250k $250k - $300k $300k - $500k >$500k

8%

33%

26%

28%

5%

Represents homes closed & price points for the twelve months ended 3/31/20

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

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

1,400	59,493 Homes Closed during TTM ended 3/31/2020
1,200
1,000
800	2006 Closings:
53,410
	2011 Closings:
	17,176
600
400
200
	1992 Closings:
	1,231
0

10%

2019 Closings:

58,434 9%

8%

7%

6%

5%

4%

3%

2%

1%

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

DHI Homes Closed as a Percentage of New U.S. Single-Family Home Sales

Source: Company filings, Census

Note: Periods represent full calendar year

9

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

18%

16%

14%

12%

10%

8%

6%

4%

2%

50

40

43

38

3031

20

10 13

0%						0
DFW	Houston	Atlanta Phoenix Austin	#1	Top 5	Top 10	Operate In
DHI Market Share			Next Ranking Competitor Market Share

Source: Builder magazine ‐ 2019 Local Leaders issue, rankings based on homes closed in calendar 2018 and proforma for D.R. Horton's acquisition of Westport Homes, a top 5 builder in Indianapolis, IN and Columbus, OH, which closed in November 2018

10

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

• The Company's strategy remains consistent, while making operational adjustments and limiting capital investments as a result of C-19
• Maximize returns by managing inventories, sales pace and pricing in each community
• 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

11

F O R E S T A R ( " F O R " )

• FOR is a publicly traded residential lot manufacturer with operations in 50 markets and 21 states
• Supporting DHI's strategy of increasing land and lots controlled through purchase contracts
• Delivered 4,373 lots and generated $406.4 million of revenue FYTD
• FOR has raised capital to fund its growth
• • In fiscal 2019, issued $350 million of senior unsecured notes due 2024 and $100.7 million of common stock
  • In February 2020, issued $300 million of senior unsecured notes due 2028
• FOR expects to opportunistically raise additional growth capital in the public debt and equity markets
• Liquidity of $790 million: $440 million of unrestricted cash and $350 million available capacity on revolving credit facility
• Net debt to capitalization of 19.5%; next senior note maturity in fiscal 2024
• DHI's long-term goal is to deconsolidate FOR from DHI's financial statements
• • DHI's ownership of FOR is 65% as compared to 75% one year ago

As of 3/31/2020 unless otherwise noted

12

R E T U R N O N E Q U I T Y ( R O E )

ROE 20%

ROE has improved to the high-teens while leverage has decreased

HB leverage

40%

		19.1%
17.6%	17.6%	17.2%
15%		30%
14.4%
10%		20%

5%

10%

0%						0%
	FY 2017	FY 2018	TTM 3/31/19	FY 2019	TTM 3/31/20

ROE Leverage

ROE is calculated as net income divided by average stockholders' equity. Average stockholders' equity in the ROE calculation is the sum of ending stockholders' equity balances for the trailing five quarters divided by five.

Leverage is calculated as homebuilding (HB) notes payable divided by stockholders' equity plus homebuilding notes payable.

13

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 withstand difficult 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
• • No expected repurchases in Q3 FY 2020
  • Plan to cautiously manage level of share repurchases until there is better visibility to market conditions and the Company's future operating results and investment opportunities

14

H O M E S I N I N V E N T O R Y

Well-positioned to deliver homes both during and after the pandemic

35,000		32,100	33,400
30,000	27,900		27,700
25,000	24,600

20,000

15,000

10,000

5,000

0

9/30/17	9/30/18			3/31/19	9/30/19	3/31/20
			Sold			Specs

Homes in inventory excluding model homes

15

H O M E B U I L D I N G L A N D A N D L O T P O S I T I O N

Controlled lot position increased 8% from a year ago

350,000

36% owned / 64% controlled at 3/31/20

329,300

300,000

250,000

200,000

150,000

100,000

50,000

0

316,400307,300

288,500

249,000

164,200*	195,500*	185,900*	210,600*

124,000

125,000

124,300

120,900

121,400

118,700

9/30/17	9/30/18	3/31/19	9/30/19	3/31/20
	Owned	Controlled

*Includes lots owned or controlled by FOR that DHI has under contract or the right of first offer to purchase of 28,600, 23,400, 21,700 and 13,600 at 3/31/20, 9/30/19, 3/31/19 and 9/30/18, respectively

16

O U T L O O K *

• Due to the uncertainty in the U.S. economy and the Company's business operations resulting from C-19, the Company has withdrawn its previously issued guidance for fiscal 2020
• • The Company expects to provide new annual guidance when it has clearer business visibility
• The extent to which the pandemic 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 it is well positioned to operate in this uncertain environment, with experienced operating teams, low leverage and a strong liquidity position
• The Company intends to maintain its flexible operational and financial position by generating strong cash flows from its homebuilding operations and adjusting 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

*Based on current market conditions as noted on the Company's Q2 FY20 conference call on 4/28/20

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13th Annual J.P. Morgan Homebuilding and Building Products Conference

May 19, 2020