9.27.16 db leveraged finance conference - d.r....

Deutsche Bank Leveraged Finance Conference

September 27, 2016

2Deutsche Bank Leveraged Finance Conference I September 2016

This presentation may include “forward-looking statements” as defined by the Private Securities Litigation Reform Act of1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurancethat actual outcomes will not be materially different. Factors that may cause the actual results to be materially different fromthe future results expressed by the forward-looking statements include, but are not limited to: the cyclical nature of thehomebuilding industry and changes in economic, real estate and other conditions; constriction of the credit markets, whichcould limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financingand the liquidity provided by government-sponsored enterprises, the effects of government programs, a decrease in ourability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our landand lot inventory; home warranty and construction defect claims; supply shortages and other risks of acquiring land, buildingmaterials and skilled labor; reductions in the availability of performance bonds; increases in the costs of owning a home; theimpact of an inflationary, deflationary or higher interest rate environment; the effects of governmental regulations andenvironmental matters on our homebuilding operations; the effects of governmental regulations on our financial servicesoperations; 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 oracquisitions successfully; the effects of the loss of key personnel; the effects of negative publicity; and informationtechnology failures and data security breaches. Additional information about issues that could lead to material changes inperformance 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.

Forward-Looking Statements


Traded on NYSE as DHI

#1 builder for 14 consecutive years1

$11.6 billion in annual revenues2

38,638 in annual homes closed2

$1.3 billion in annual pre-tax income2

$11.3 billion of total assets3

$6.5 billion of stockholders’ equity3

Book value per share of $17.503

1By closings volume for fiscal years 2002 to 20152Twelve months ended June 30, 20163As of June 30, 2016

D.R. Horton, Inc.


Geographic DiversificationHB Revenue1

Region States

East Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia

Midwest Colorado, Illinois, Minnesota

Southeast Alabama, Florida, Georgia, Mississippi, Tennessee

South Central Louisiana, Oklahoma, Texas

Southwest Arizona, New Mexico

West California, Hawaii, Nevada, Oregon, Utah, Washington

Inventory2

South Central

26%

Southwest3%

West24%

East12%

Midwest6%

Southeast29%

Midwest5%

South Central

26%

Southeast25%

East11%

West29%

Southwest4%

78 Markets | 26 States

1Twelve months ended June 30, 20162As of June 30, 2016


$200k to $250k

$250k to $300k

$300k to $500k

26%

24% 18%

25%

Represents homes closed for the trailing twelve months ended 6/30/16

Broad Range of Product Offerings

Homes for entry-level, move-up and luxury buyers

< $200k

$500k+

7%


7

23

29

36

13

3035

41

0

5

10

15

20

25

30

35

40

45

50

#1 Top 5 Top 10 Operations In

2009 2015

# of Markets

D.R. Horton Market Share Rankings

Source: Builder magazine - 2016 Local Leaders issueMarket share rankings based on homes closed

Top 50 U.S. Housing Markets


68%

28%

4%

Substantial Growth in New Brands

Brand Growth - TTM

4,027

9,106911

1,401

0

2,000

4,000

6,000

8,000

10,000

12,000

TTM 6/30/15 TTM 6/30/16

Overall Brand Mix – Q3

Represents homes closed

Homes Closed


Introduced in July 2016

Carefree affordable living for active adults

Low-maintenance lifestyle

Age-restricted and age-targeted communities

Available in at least 8 markets by end of FY16 and approximately 1/3 of our 78 markets by end of FY17

Newest Brand - Freedom Homes

Targeted at the active adult buyer

Coming Soon!


Average employee tenure: Executive Team and Region Presidents – over 20 years Division Presidents – approximately 15 years City Managers – over 10 years

Management Tenure & Experience


Current land ownership level is sufficient to support double-digit annual growth in both revenues and profits

Consistently optimize balance of sales absorptions and gross margins to maximize returns in each community

Manage land and home inventory levels efficiently to generate consistent positive cash flow from operations

Underwriting criteria for land and lot purchases and operational expectations for each community: Minimum 20% annual net return on inventory investment (ROI) for all brands Net ROI% = Pre-tax Income divided by Average Inventory

Initial cash investment returned within 24 months or less

Operational Focus


The value of net homes sold, homes closed and homes in backlog increased by 14%, 9% and 17%, respectively

Consolidated pre-tax income increased 13% to $378.6 million

Consolidated pre-tax income margin improved 40 basis points to 11.7%

Net income increased 13% to $249.8 million

Cash flow provided by operations for the nine months ended June 30, 2016 of $88.6 million

LTM homebuilding EBIT / interest incurred of 9.0x and homebuilding notes payable / EBIT of 2.0x

Q3 FY 2016 Highlights


Balance Sheet

$ in millions

6/30/16 9/30/15 6/30/15

HB cash and cash equivalents 862.9$ 1,355.9$ 766.7$ Restricted cash 11.8 9.7 11.7 Inventories 8,504.2 7,807.0 8,111.2 Deferred income taxes, net 505.1 558.1 544.3 Other assets 1,449.2 1,420.3 1,411.3 Total 11,333.2$ 11,151.0$ 10,845.2$

Notes payable - HB 2,797.1$ 3,333.6$ 3,354.8$ Other liabilities 2,023.3 1,922.0 1,859.4 Equity 6,512.8 5,895.4 5,631.0 Total 11,333.2$ 11,151.0$ 10,845.2$

Homebuilding debt to total capital 30.0% 36.1% 37.3%

Book value/share $17.50 $15.99 $15.35


Homes in Inventory

0

5,000

10,000

15,000

20,000

25,000

30,000

9/30/12 9/30/13 9/30/14 6/30/15 9/30/15 6/30/16

Models Sold Specs

17,000

13,000

21,20019,80020,600

25,300


Land and Lot Position

94,600 126,600 124,600 120,100 118,400 112,100

58,100 54,300 58,900 53,500 55,500 89,900

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

9/30/12 9/30/13 9/30/14 6/30/15 9/30/15 6/30/16

Optioned Owned

152,700

180,900 183,500173,600 173,900

202,000

Supports double-digit growth in both revenues and pre-tax profits


Invest in homebuilding business where opportunities to generate acceptable returns exist Business acquisitions to further consolidate market share Pay off debt at maturity Paid $170 million and $373 million of senior notes at maturity in January

and April 2016, respectively $350 million of senior notes due in May 2017

Consistent dividends to shareholders Be opportunistic, while remaining disciplined

Cash Flow Priorities


Acquired the homebuilding operations of Wilson Parker Homes (WPH) in September 2016 for approximately $90 million in cash

WPH operates in Atlanta and Augusta, GA; Raleigh, NC; Columbia, SC and Phoenix, AZ Assets include approximately 490 lots, 390 homes in inventory and 300 homes in

sales order backlog Also acquired control of approximately 1,850 optioned lots

WPH closed 906 homes ($201 million in revenue) for the twelve months ended June 30, 2016 and was ranked the third largest builder in Atlanta by Builder magazine in calendar 2015

WPH’s average home size is approximately 2,700 square feet at an average sales price of $222,000

Wilson Parker Acquisition


Public Debt Maturities by Year

$0

$100

$200

$300

$400

$500

$600

$700

$800

FY 17 FY 18 FY 19 FY 20 FY 22 FY 23

4.750%

$350

$500 $500

$400

4.750% 3.625% 3.750% 4.000% 4.375%

5.750%

$700

$350

$ in millions

DHI debt ratings upgraded by S&P on 8/12/16 to BBB-


Consolidated revenue increase of 10% to 15%

Consolidated pre-tax operating margin of 11.2% to 11.5%

Cash flow from operations in the range of $300 to $500 million

Income tax rate between 35% and 36%

Diluted share count increase of approximately 1.5%

Preliminary FY17 Expectations*

*Based on housing market conditions as noted on the Company’s conference call on 7/21/16

9.27.16 db leveraged finance conference - d.r....

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