HORTON D R INC DE

Previous wording

D.R. Horton, Inc. is the largest homebuilding company in the United States as measured by number of homes closed. We construct and sell homes through our operating divisions in 121 markets across 33 states. Our common stock is included in the S&P 500 Index and listed on the New York Stock Exchange under the ticker symbol “DHI.” Unless the context otherwise requires, the terms “D.R. Horton,” the “Company,” “we” and “our” used herein refer to D.R. Horton, Inc., a Delaware corporation, and its predecessors and subsidiaries.

Current wording

D.R. Horton, Inc. is the largest homebuilding company in the United States as measured by number of homes closed. We construct and sell homes through our operating divisions in 126 markets across 36 states. Our common stock is included in the S&P 500 Index and listed on the New York Stock Exchange under the ticker symbol “DHI.” Unless the context otherwise requires, the terms “D.R. Horton,” the “Company,” “we” and “our” used herein refer to D.R. Horton, Inc., a Delaware corporation, and its predecessors and subsidiaries.

Previous wording

Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Our homebuilding operations are our core business and primarily include the construction and sale of single-family homes with sales prices generally ranging from $200,000 to more than $1,000,000, with an average closing price of $378,200 during the nine months ended June 30, 2024. Approximately 88% of our home sales revenue in the nine months ended June 30, 2024 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.

Current wording

Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Our homebuilding operations are our core business and primarily include the construction and sale of single-family homes with sales prices generally ranging from $200,000 to more than $1,000,000, with an average closing price of $374,900 during the three months ended December 31, 2024. Approximately 84% of our home sales revenue in the three months ended December 31, 2024 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.

Previous wording

We have closed more than one million homes during our 45-year history, and we have been the largest volume homebuilder in the United States every year since 2002. Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

Current wording

We have closed more than 1.1 million homes during our 46-year history, and we have been the largest volume homebuilder in the United States every year since 2002. Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

Previous wording

Our rental segment consists of single-family and multi-family rental operations. The single-family rental operations primarily construct and lease single-family homes within a community and then market each community for a bulk sale of rental homes. The multi-family rental operations develop, construct, lease and sell residential rental properties, the majority of which are apartment communities.

Current wording

Our rental segment consists of single-family and multi-family rental operations. The single-family rental operations construct and lease single-family homes within a community and then generally market each community for a bulk sale of rental homes. The multi-family rental operations develop, construct, lease and sell residential rental properties, the majority of which are apartment communities.

Previous wording

During the nine months ended June 30, 2024, our number of homes closed increased 10%, and our home sales revenues increased 9% compared to the prior year period. Our consolidated revenues increased 7% to $26.8 billion in the nine months ended June 30, 2024 compared to $25.0 billion in the prior year period. Our pre-tax income was $4.6 billion in the nine months ended June 30, 2024 compared to $4.3 billion in the prior year period, and our pre-tax operating margin was 17.1% compared to 17.2%. Net income was $3.5 billion in the nine months ended June 30, 2024 compared to $3.3 billion in the prior year period, and our diluted earnings per share were $10.43 compared to $9.39.

Current wording

During the three months ended December 31, 2024, our number of homes closed and our home sales revenues decreased 1% and 2%, respectively, compared to the prior year period, and our consolidated revenues decreased 1% to $7.6 billion compared to $7.7 billion. Our pre-tax income was $1.1 billion in the three months ended December 31, 2024 compared to $1.2 billion in the prior year period, and our pre-tax operating margin was 14.6% compared to 16.1%. Net income was $851.9 million in the three months ended December 31, 2024 compared to $955.7 million in the prior year period, and our diluted earnings per share were $2.61 compared to $2.82.

Previous wording

In the trailing twelve months ended June 30, 2024, our return on equity (ROE) was 21.5% compared to 24.3% in the prior year period, and our homebuilding return on inventory (ROI) was 29.5% compared to 31.8%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances of the trailing five quarters divided by five. Homebuilding ROI is calculated as homebuilding pre-tax income for the trailing twelve months divided by average inventory, where average inventory is the sum of ending homebuilding inventory balances for the trailing five quarters divided by five.

Current wording

In the trailing twelve months ended December 31, 2024, our return on equity (ROE) was 19.1% compared to 21.8% in the prior year period, and our return on assets (ROA) was 13.4% compared to 14.8%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.

Previous wording

Although inflation and mortgage interest rates remain elevated, demand for new homes has remained solid. Our net sales orders increased 1% and 14% in the three and nine months ended June 30, 2024, respectively, from the prior year periods. We are continuing to use incentives and pricing adjustments to adapt to current market conditions. The disruptions in the supply chain for certain building materials and tightness in the labor market we experienced in recent years have largely subsided, and our average construction cycle time has returned to historical norms. Although higher interest rates and economic fluctuations may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply and will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand.

Current wording

Despite elevated mortgage interest rates and inflationary pressures, demand for new homes remained solid. Our net sales orders totaled 17,837 in the three months ended December 31, 2024 compared to 18,069 in the prior year period. Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is still limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply and will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.

Previous wording

We remain focused on our relationships with land developers across the country in order to maximize our returns and capital efficiency. Within our homebuilding land and lot portfolio, our lots controlled through purchase contracts represent 76% of the lots owned and controlled at June 30, 2024 compared to 75% at both September 30, 2023 and June 30, 2023. We are prioritizing the purchase of finished lots from Forestar and other land developers, when possible. During the nine months ended June 30, 2024, 63% of the homes we closed were on lots developed by either Forestar or a third party.

Current wording

We remain focused on our relationships with land developers across the country in order to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represent 76% of the lots owned and controlled at each of December 31, 2024, September 30, 2024 and December 31, 2023. We are prioritizing the purchase of finished lots from Forestar and other land developers when possible. During the three months ended December 31, 2024, 65% of the homes we closed were on lots developed by either Forestar or a third party.

Previous wording

Our operating strategy focuses on consistently enhancing long-term value to our shareholders by leveraging our financial and competitive position to maximize the returns on our inventory investments and generate strong profitability and cash flows, while managing risk and maintaining financial flexibility to navigate changing economic conditions. Our strategy includes the following initiatives:

Current wording

Our operating strategy focuses on consistently enhancing long-term value to our shareholders by leveraging our financial and competitive position to maximize the returns on our inventory investments and generate consistent, sustainable profitability and cash flows, while managing risk and maintaining financial flexibility to navigate changing economic conditions. Our strategy includes the following initiatives:

Previous wording

•Consolidated pre-tax income was 18.1% of consolidated revenues compared to 18.3%.

Current wording

•Consolidated pre-tax income was 14.6% of consolidated revenues compared to 16.1%.

Previous wording

•Diluted net income per common share attributable to D.R. Horton increased 5% to $4.10 compared to $3.90.

Current wording

•Diluted net income per common share attributable to D.R. Horton decreased 7% to $2.61 compared to $2.82.

Previous wording

•Book value per common share increased to $75.32 compared to $67.78 and $64.03 at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Book value per common share increased to $78.53 compared to $78.12 and $69.70 at September 30, 2024 and December 31, 2023, respectively.

Previous wording

•Debt to total capital was 18.8% compared to 18.3% and 22.0% at September 30, 2023 and June 30, 2023, respectively. Net debt to total capital was 9.9% compared to 5.1% and 11.2% at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Debt to total capital was 17.0% compared to 18.9% and 18.6% at September 30, 2024 and December 31, 2023, respectively. Net debt to total capital was 7.6% compared to 5.2% and 7.8% at September 30, 2024 and December 31, 2023, respectively.

Previous wording

•Homes closed increased 5% to 24,155 homes, and the average closing price of those homes increased 1% to $382,200.

Current wording

•Homes closed decreased 1% to 19,059 homes, and the average closing price of those homes decreased slightly to $374,900.

Previous wording

•Sales order backlog decreased 12% to 16,792 homes, and the value of sales order backlog also decreased 12% to $6.6 billion.

Current wording

•Sales order backlog decreased 21% to 11,003 homes, and the value of sales order backlog also decreased 21% to $4.3 billion.

Previous wording

•Home sales gross margin was 23.4% compared to 22.9%.

Current wording

•Home sales gross margin was 22.7% compared to 22.9%.

Previous wording

•Homebuilding cash and cash equivalents totaled $2.2 billion compared to $2.9 billion and $2.6 billion at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Homebuilding cash and cash equivalents totaled $2.5 billion compared to $3.6 billion and $2.5 billion at September 30, 2024 and December 31, 2023, respectively.

Previous wording

•Owned lots totaled 150,900 compared to 141,100 and 137,500 at September 30, 2023 and June 30, 2023, respectively. Lots controlled through purchase contracts totaled 479,300 compared to 427,300 and 417,600 at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Owned lots totaled 154,400 compared to 152,500 and 145,000 at September 30, 2024 and December 31, 2023, respectively. Lots controlled through purchase contracts totaled 485,400 compared to 480,400 and 462,200 at September 30, 2024 and December 31, 2023, respectively.

Previous wording

•Single-family rental homes closed totaled 790 compared to 1,754.

Current wording

•Single-family rental homes closed totaled 311 compared to 379.

Previous wording

•Multi-family rental units closed totaled 610 compared to 230.

Current wording

•Multi-family rental units closed totaled 504 compared to 300.

Previous wording

•Forestar’s revenues decreased 14% to $318.4 million compared to $368.9 million. Revenues in the current and prior year quarters included $267.4 million and $293.8 million, respectively, of revenue from land and lot sales to our homebuilding segment.

Current wording

•Forestar’s revenues decreased 18% to $250.4 million compared to $305.9 million. Revenues in the current and prior year quarters included $218.6 million and $273.5 million, respectively, of revenue from land and lot sales to our homebuilding segment.

Previous wording

•Forestar’s lots sold decreased 15% to 3,255 compared to 3,812. Lots sold to D.R. Horton totaled 2,903 compared to 3,187.

Current wording

•Forestar’s lots sold decreased 26% to 2,333 compared to 3,150. Lots sold to D.R. Horton totaled 2,112 compared to 2,834.

Previous wording

•Forestar’s cash and cash equivalents totaled $359.2 million compared to $616.0 million and $401.0 million at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Forestar’s cash and cash equivalents totaled $132.0 million compared to $481.2 million and $458.9 million at September 30, 2024 and December 31, 2023, respectively.

Previous wording

•Forestar’s owned and controlled lots totaled 102,100 compared to 79,200 and 73,000 at September 30, 2023 and June 30, 2023, respectively. Of these lots, 36,200 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 31,400 and 30,500 at September 30, 2023 and June 30, 2023, respectively.

Current wording

•Forestar’s owned and controlled lots totaled 106,000 compared to 95,100 and 82,400 at September 30, 2024 and December 31, 2023, respectively. Of these lots, 43,800 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 37,700 and 33,700 at September 30, 2024 and December 31, 2023, respectively.

Previous wording

The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three and nine months ended June 30, 2024 and 2023.

Current wording

The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three months ended December 31, 2024 and 2023.

Previous wording

The number of net sales orders increased 1% and 14% in the three and nine months ended June 30, 2024, respectively, compared to the prior year periods. The value of net sales orders was essentially flat at $8.7 billion (23,001 homes and 22,879 homes, respectively) for the three months ended June 30, 2024 and 2023. The value of net sales orders increased 15% to $25.6 billion (67,526 homes) for the nine months ended June 30, 2024 compared to $22.3 billion (59,403 homes) in the prior year period. The average selling price of net sales orders during the three and nine months ended June 30, 2024 was $378,900 and $378,600, respectively, down 1% and up 1% from the prior year periods.

Current wording

The number of net sales orders decreased 1% in the three months ended December 31, 2024 compared to the prior year period, and the value of net sales orders decreased 2% to $6.7 billion (17,837 homes) compared to $6.8 billion (18,069 homes). The average selling price of net sales orders during the three months ended December 31, 2024 was $373,000 down 1% from the prior year period.

Previous wording

During the nine months ended June 30, 2024, the markets contributing most to the increases in sales order volume were the Portland and Salt Lake City markets in the Northwest, the California and Phoenix markets in the Southwest, the Dallas and San Antonio markets in the South Central, the North Carolina markets in the East and the suburban Washington, D.C. market in the North.

Current wording

The markets contributing most to the decrease in sales order volume were the Salt Lake City market in the Northwest, the Dallas and Fort Worth markets in the South Central and the Florida markets in the Southeast. The markets with the largest increases in sales order volume were the North Carolina markets in the East and the suburban Washington, D.C., New Jersey and Chicago markets in the North.

Previous wording

Despite continued inflationary pressures and elevated mortgage interest rates, demand for new homes remained solid during the third quarter. Our net sales orders increased 1% and 14% in the three and nine months ended June 30, 2024, respectively, from the prior year periods. We are continuing to use incentives and pricing adjustments to adapt to current market conditions. Although higher interest rates and economic fluctuations may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply.

Current wording

Despite elevated mortgage interest rates and inflationary pressures, demand for new homes remained solid during the first quarter with only a slight decrease in sales order volume compared to the prior year quarter. Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is still limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply and will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.

Previous wording

Gross profit from home sales increased to $2.2 billion in the three months ended June 30, 2024 from $2.0 billion in the prior year period and increased 70 basis points to 24.0% as a percentage of home sales revenues. The percentage increase resulted from an increase of 70 basis points due to the average cost of our homes closed decreasing while the average selling price of those homes increased slightly, 10 basis points due to a decrease in the amortization of capitalized interest and 10 basis points due to a decrease in warranty and construction defect costs, partially offset by a decrease of 20 basis points due to an increase in the amount of purchase accounting adjustments related to prior year acquisitions.

Current wording

Gross profit from home sales decreased to $1.6 billion in the three months ended December 31, 2024 from $1.7 billion in the prior year period and decreased 20 basis points to 22.7% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 30 basis points due to the average cost of our homes closed increasing along with a slight decrease in the average selling price of those homes, partially offset by an increase of 10 basis points due to a decrease in warranty and construction defect costs.

Previous wording

We remain focused on managing the pricing, incentives and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and new home demand. To adjust to changes in market conditions during fiscal 2023 and the first nine months of fiscal 2024, we have used a higher level of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.

Current wording

We remain focused on managing the pricing, incentives and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and new home demand. To adjust to changes in market conditions during recent years, we have used a higher level of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.

Previous wording

We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of June 30, 2024, our homebuilding operations had $15.8 million of land held for sale that we expect to sell in the next twelve months.

Current wording

Land/lot sales and other revenues from our homebuilding operations were $21.2 million and $20.3 million in the three months ended December 31, 2024 and 2023, respectively. We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of December 31, 2024, our homebuilding operations had $8.7 million of land held for sale that we expect to sell in the next twelve months.

Previous wording

At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of these reviews, there were no impairment charges recorded in our homebuilding segment during the current and prior year quarters and $5.6 million and $5.7 million recorded in the nine month periods ended June 30, 2024 and 2023, respectively.

Current wording

At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were $2.0 million of impairment charges recorded in our homebuilding segment during the three months ended December 31, 2024 compared to none in the prior year quarter.

Previous wording

During the three and nine months ended June 30, 2024, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $12.6 million and $25.6 million, respectively, compared to $9.0 million and $41.7 million in the prior year periods.

Current wording

During the three months ended December 31, 2024, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $9.8 million compared to $5.5 million in the same period of fiscal 2024.

Previous wording

SG&A expense from homebuilding activities increased 12% to $656.5 million and 13% to $1.9 billion in the three and nine months ended June 30, 2024, respectively, from $584.9 million and $1.7 billion in the prior year periods. SG&A expense as a percentage of homebuilding revenues was 7.1% and 7.5% in the three and nine months ended June 30, 2024, respectively, compared to 6.7% and 7.2% in the prior year periods.

Current wording

SG&A expense from homebuilding activities increased 6% to $636.6 million in the three months ended December 31, 2024 from $603.4 million in the prior year period. SG&A expense as a percentage of homebuilding revenues was 8.9% in the three months ended December 31, 2024 compared to 8.3% in the prior year period.

Previous wording

We capitalize interest costs incurred to inventory during active development and construction (active inventory). Capitalized interest is charged to cost of sales as the related inventory is delivered to the buyer. Interest incurred by our homebuilding operations decreased 33% to $11.5 million and 40% to $34.2 million in the three and nine months ended June 30, 2024, respectively, compared to $17.2 million and $57.1 million in the prior year periods, primarily due to decreases of 14% and 19% in our average homebuilding debt. Interest charged to cost of sales was 0.3% and 0.4% of homebuilding cost of sales (excluding inventory and land option charges) in the three and nine months ended June 30, 2024, respectively, compared to 0.4% in both prior year periods.

Current wording

We capitalize interest costs incurred to inventory during active development and construction (active inventory). Capitalized interest is charged to cost of sales as the related inventory is delivered to the buyer. Interest incurred by our homebuilding operations increased 57% to $17.9 million in the three months ended December 31, 2024 compared to $11.4 million in the prior year period. The increase was primarily due to an increase in the weighted average interest rate of the homebuilding debt outstanding during the period, as well as an increase in the average amount of that debt. Interest charged to cost of sales was 0.4% of homebuilding cost of sales (excluding inventory and land option charges) in both periods.

Previous wording

Other income, net of other expenses, included in our homebuilding operations decreased to $22.7 million and increased to $73.2 million in the three and nine months ended June 30, 2024, respectively, from $26.4 million and $54.1 million in the prior year periods. Other income consists of interest income and various other types of ancillary income, gains, expenses and losses not directly associated with sales of homes, land and lots. The activities that result in this ancillary income are not significant, either individually or in the aggregate.

Current wording

Other income, net of other expenses, included in our homebuilding operations was $29.9 million in the three months ended December 31, 2024 compared to $29.5 million in the prior year period. Other income consists of interest income and various other types of ancillary income, gains, expenses and losses not directly associated with sales of homes, land and lots. The activities that result in this ancillary income are not significant, either individually or in the aggregate.

Previous wording

Northwest Region — Homebuilding revenues increased 10% and 9% in the three and nine months ended June 30, 2024, respectively, compared to the prior year periods due to increases in the number of homes closed, particularly in our Portland market. The region generated pre-tax income of $121.2 million and $300.0 million in the three and nine months ended June 30, 2024, respectively, compared to $105.6 million and $260.6 million in the prior year periods. Gross profit from home sales as a percentage of home sales revenue (home sales gross profit percentage) increased by 70 and 60 basis points in the three and nine months ended June 30, 2024, respectively, compared to the prior year periods, primarily due to the average cost of homes closed decreasing by more than the average selling price of those homes. As a percentage of homebuilding revenues, SG&A expenses decreased by 10 basis points and increased by 10 basis points in the three and nine months ended June 30, 2024, respectively, compared to the prior year periods.

Current wording

Northwest Region — Homebuilding revenues decreased 8% in the three months ended December 31, 2024 compared to the prior year period due to a decrease in the number of homes closed, particularly in our Salt Lake City market. The region generated pre-tax income of $76.2 million in the three months ended December 31, 2024 compared to $69.5 million in the prior year period. Gross profit from home sales as a percentage of home sales revenue (home sales gross profit percentage) increased by 370 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the average cost of homes closed decreasing by more than the average selling price of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 150 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the decrease in homebuilding revenues.

Previous wording

North Region — Homebuilding revenues increased 16% in both the three and nine months ended June 30, 2024 compared to the prior year periods, primarily due to increases in the number of homes closed, particularly in our suburban Washington, D.C. market. The region generated pre-tax income of $153.9 million and $354.7 million in the three and nine months ended June 30, 2024, respectively, compared to $98.6 million and $224.7 million in the prior year periods. Home sales gross profit percentage increased by 380 and 390 basis points in the three and nine months ended June 30, 2024, respectively, compared to the prior year periods, primarily due to the average cost of homes closed decreasing while the average selling price of those homes increased. As a percentage of homebuilding revenues, SG&A expenses were essentially flat in the three months ended June 30, 2024 and decreased by 10 basis points in the nine months ended June 30, 2024 compared to the prior year periods.

Current wording

Southwest Region — Homebuilding revenues increased 8% in the three months ended December 31, 2024 compared to the prior year period, primarily due to an increase in the number of homes closed, particularly in our Las Vegas market. The region generated pre-tax income of $168.4 million in the three months ended December 31, 2024 compared to $134.9 million in the prior year period. Home sales gross profit percentage increased by 210 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to an increase in the average selling price of homes closed and a decrease in the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses were essentially flat in the three months ended December 31, 2024 compared to the prior year period.

Previous wording

(1)Land/lots owned included approximately 58,500 and 50,300 owned lots that are fully developed and ready for home construction at June 30, 2024 and September 30, 2023, respectively.

Current wording

(1)Land/lots owned included approximately 70,200 and 64,400 owned lots that are fully developed and ready for home construction at December 31, 2024 and September 30, 2024, respectively.

Previous wording

(2)The total remaining purchase price of lots controlled through land and lot purchase contracts at June 30, 2024 and September 30, 2023 was $24.5 billion and $21.1 billion, respectively, secured by earnest money deposits of $2.1 billion and $1.8 billion, respectively. The total remaining purchase price of lots controlled through land and lot purchase contracts at June 30, 2024 and September 30, 2023 included $1.8 billion and $1.3 billion, respectively, related to land and lot purchase contracts with Forestar, secured by $181.1 million and $139.1 million, respectively, of earnest money.

Current wording

(2)The total remaining purchase price of lots controlled through land and lot purchase contracts at December 31, 2024 and September 30, 2024 was $25.8 billion and $25.2 billion, respectively, secured by earnest money deposits of $2.24 billion and $2.15 billion, respectively. The total remaining purchase price of lots controlled through land and lot purchase contracts at December 31, 2024 and September 30, 2024 included $2.2 billion and $1.9 billion, respectively, related to lot purchase contracts with Forestar, secured by $225.1 million and $193.3 million, respectively, of earnest money.