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
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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.
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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
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$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%
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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
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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
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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!
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Average employee tenure: Executive Team and Region Presidents – over 20 years Division Presidents – approximately 15 years City Managers – over 10 years
Management Tenure & Experience
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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
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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
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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
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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
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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
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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
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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
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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-
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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