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 126 markets across 36 states. Our common stock is included in the S&P 500 Index and listed on the New York Stock Exchange and NYSE Texas under the ticker symbol “DHI.” Our listing on NYSE Texas became effective in June 2025. 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 and NYSE Texas 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 $250,000 to more than $1,000,000, with an average closing price of $372,200 during the nine months ended June 30, 2025. Approximately 84% of our home sales revenue in the nine months ended June 30, 2025 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes and duplexes.

Current wording

Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Homebuilding is our core business and primarily includes the construction and sale of single-family homes with sales prices generally ranging from $250,000 to more than $1,000,000, with an average closing price of $365,500 during the three months ended December 31, 2025. Approximately 84% of our home sales revenue in the three months ended December 31, 2025 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes and duplexes.

Previous wording

We have closed more than 1.2 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.

Current wording

We have closed more than 1.2 million homes during our 47-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 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.

Current wording

Our rental segment consists of single-family and multi-family rental operations. Single-family rental operations construct homes within single-family rental (build-to-rent) communities, and then either sell homes to an investor as they are completed or lease the homes and market the entire community for a bulk sale. Multi-family rental operations develop, construct, lease and sell residential rental properties, the substantial majority of which are apartment communities.

Previous wording

At June 30, 2025, we owned 62% of the outstanding shares of Forestar Group Inc. (Forestar), a publicly traded residential lot development company listed on the New York Stock Exchange and NYSE Texas under the ticker symbol “FOR.” Forestar operates across many of our homebuilding operating markets and is a key part of our homebuilding strategy to maintain relationships with land developers and to control a large portion of our land and lot position through land purchase contracts.

Current wording

At December 31, 2025, we owned 62% of the outstanding shares of Forestar Group Inc. (Forestar), a publicly traded residential lot development company listed on the New York Stock Exchange and NYSE Texas under the ticker symbol “FOR.” Forestar operates across many of our homebuilding operating markets and is a key part of our homebuilding strategy to maintain relationships with land developers and control a large portion of our land and lot position through land purchase contracts.

Previous wording

Our financial services operations provide mortgage financing and title agency services to homebuyers in many of our homebuilding markets. DHI Mortgage, our wholly owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers after origination. Our wholly owned subsidiary title companies serve as title insurance agents by providing title insurance policies, examination, underwriting and closing services primarily to our homebuilding customers.

Current wording

Our financial services operations provide mortgage financing and title agency services to homebuyers in many of our homebuilding markets. DHI Mortgage, our wholly owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers after origination. Our wholly owned subsidiary title companies issue title insurance policies and provide examination, underwriting and closing services primarily to our homebuilding customers.

Previous wording

During the nine months ended June 30, 2025, our number of homes closed and our home sales revenues decreased 7% and 8%, respectively, compared to the prior year period, and our consolidated revenues decreased 8% to $24.6 billion compared to $26.8 billion. Our pre-tax income was $3.5 billion in the nine months ended June 30, 2025 compared to $4.6 billion in the prior year period, and our pre-tax operating margin was 14.4% compared to 17.1%. Net income was $2.7 billion in the nine months ended June 30, 2025 compared to $3.5 billion in the prior year period, and our diluted earnings per share were $8.53 compared to $10.43.

Current wording

During the three months ended December 31, 2025, our number of homes closed and our home sales revenues decreased 7% and 9%, respectively, compared to the prior year period, and our consolidated revenues decreased 10% to $6.9 billion compared to $7.6 billion. Our pre-tax income was $798.1 million in the three months ended December 31, 2025 compared to $1.1 billion in the prior year period, and our pre-tax operating margin was 11.6% compared to 14.6%. Net income was $601.4 million in the three months ended December 31, 2025 compared to $851.9 million in the prior year period, and our diluted earnings per share were $2.03 compared to $2.61.

Previous wording

In the trailing twelve months ended June 30, 2025, our return on equity (ROE) was 16.1% compared to 21.5% in the prior year period, and our return on assets (ROA) was 11.1% 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.

Current wording

In the trailing twelve months ended December 31, 2025, our return on equity (ROE) was 13.7% compared to 19.1% in the prior year period, and our return on assets (ROA) was 9.4% compared to 13.4%. 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

During the third quarter, new home demand continued to be impacted by uncertainty among potential homebuyers due to ongoing affordability constraints and cautious consumer sentiment. As a result, the value of our net sales orders and homebuilding revenues in the third quarter decreased 3% and 7%, respectively, from the prior year quarter, and our home sales gross margin decreased to 21.8% as we increased sales incentives such as buydowns of mortgage rates for our homebuyers. We strive to remain well-positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of new home demand in each of our local markets. We expect to maintain an elevated level of incentives to support demand and may increase them further, depending on market conditions and changes in mortgage interest rates.

Current wording

During the first quarter, new home demand continued to be impacted by ongoing affordability constraints and cautious consumer sentiment. Compared to the prior year quarter, our net sales orders were up 3%, the value of net sales orders was essentially flat, and home sales revenues decreased by 9%. Home sales gross margin decreased to 20.4% in the first quarter from the prior year quarter as we increased sales incentives, such as buydowns of mortgage rates for our homebuyers. We strive to remain well positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of demand in each of our local markets. We expect to maintain an elevated level of sales incentives to support demand and may increase them further, depending on market conditions and changes in mortgage interest rates.

Previous 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 represented 76% of the lots owned and controlled at June 30, 2025, September 30, 2024 and June 30, 2024. We continue to prioritize the purchase of finished lots from Forestar and other land developers when possible. During the nine months ended June 30, 2025, 65% 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 to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represented 75% of the lots owned and controlled at both December 31, 2025 and September 30, 2025 and 76% at December 31, 2024. We continue to prioritize the purchase of finished lots from Forestar and other land developers when possible. During the three months ended December 31, 2025, 67% of the homes we closed were on lots developed by either Forestar or a third party compared to 65% in the prior year period.

Previous wording

We believe our strong balance sheet and liquidity provide us with the flexibility to operate effectively through changing economic conditions. We plan to generate strong cash flows from our operations and manage our product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on our inventory investments in each of our communities based on local housing market conditions.

Current wording

We believe our strong balance sheet and liquidity provide us with flexibility to operate effectively through changing economic conditions. We plan to generate strong cash flows from our operations and manage our product offerings, incentives, home pricing, sales pace and inventory levels to optimize the return on our inventory investments in each of our communities based on local housing market conditions.

Previous wording

We believe our operating strategy, which has produced positive results in recent years, will allow us to successfully operate through changing economic conditions and maintain our strong financial performance and competitive position. However, we cannot provide any assurances that the initiatives listed above will continue to be successful, and we may need to adjust parts of our strategy to meet future market conditions.

Current wording

We believe our operating strategy, which has produced positive results in recent years, will allow us to successfully operate through changing economic conditions and maintain our strong financial performance and competitive position. However, we cannot provide any assurance that the initiatives listed above will continue to be successful, and we may need to adjust parts of our strategy to meet future market conditions.

Previous wording

•Consolidated pre-tax income was 14.7% of consolidated revenues compared to 18.1%.

Current wording

•Consolidated pre-tax income was 11.6% of consolidated revenues compared to 14.6%.

Previous wording

•Income tax expense was $325.0 million compared to $432.2 million, and our effective tax rate was 23.9% compared to 24.0%.

Current wording

•Income tax expense was $196.7 million compared to $258.0 million, and our effective tax rate was 24.6% compared to 23.2%.

Previous wording

•Book value per common share increased to $80.46 compared to $78.12 and $75.32 at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Book value per share increased to $82.60 compared to $82.15 and $78.53 at September 30, 2025 and December 31, 2024, respectively.

Previous wording

•Debt to total capital was 23.2% compared to 18.9% and 18.8% at September 30, 2024 and June 30, 2024, respectively. Net debt to total capital was 16.2% compared to 5.2% and 9.9% at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Debt to total capital was 18.8% compared to 19.8% and 17.0% at September 30, 2025 and December 31, 2024, respectively. Net debt to total capital was 11.2% compared to 11.0% and 7.6% at September 30, 2025 and December 31, 2024, respectively.

Previous wording

•Homes closed decreased 4% to 23,160 homes, and the average closing price of those homes decreased 3% to $369,600.

Current wording

•Homes closed decreased 7% to 17,818 homes, and the average closing price of those homes decreased 3% to $365,500.

Previous wording

•Sales order backlog decreased 16% to 14,075 homes, and the value of sales order backlog decreased 19% to $5.3 billion.

Current wording

•Sales order backlog increased 3% to 11,376 homes, and the value of sales order backlog was $4.3 billion in both periods.

Previous wording

•Homebuilding cash and cash equivalents totaled $2.0 billion compared to $3.6 billion and $2.2 billion at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Homebuilding cash and cash equivalents totaled $1.9 billion compared to $2.2 billion and $2.5 billion at September 30, 2025 and December 31, 2024, respectively.

Previous wording

•Owned lots totaled 145,900 compared to 152,500 and 150,900 at September 30, 2024 and June 30, 2024, respectively. Lots controlled through purchase contracts totaled 455,500 compared to 480,400 and 479,300 at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Owned lots totaled 145,500 compared to 147,000 and 154,400 at September 30, 2025 and December 31, 2024, respectively. Lots controlled through purchase contracts totaled 445,000 compared to 444,900 and 485,400 at September 30, 2025 and December 31, 2024, respectively.

Previous wording

•Single-family rental homes closed totaled 1,065 compared to 790.

Current wording

•Single-family rental homes closed totaled 397 compared to 311.

Previous wording

•Forestar’s revenues increased 23% to $390.5 million compared to $318.4 million. Revenues in the current and prior year quarters included $323.7 million and $267.4 million, respectively, of revenue from land and lot sales to our homebuilding segment.

Current wording

•Forestar’s revenues increased 9% to $273.0 million compared to $250.4 million. Revenues in the current and prior year quarters included $183.7 million and $218.6 million, respectively, of revenue from land and lot sales to our homebuilding segment.

Previous wording

•Forestar’s lots sold decreased 4% to 9,349 compared to 9,694. Lots sold to D.R. Horton totaled 7,688 compared to 8,842.

Current wording

•Forestar’s lots sold decreased 17% to 1,944 compared to 2,333. Lots sold to D.R. Horton totaled 1,627 compared to 2,112.

Previous wording

•Forestar’s cash and cash equivalents totaled $189.2 million compared to $481.2 million and $359.2 million at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Forestar’s cash and cash equivalents totaled $211.7 million compared to $379.2 million and $132.0 million at September 30, 2025 and December 31, 2024, respectively.

Previous wording

•Forestar’s owned and controlled lots totaled 102,300 compared to 95,100 and 102,100 at September 30, 2024 and June 30, 2024, respectively. Of these lots, 42,700 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 37,700 and 36,200 at September 30, 2024 and June 30, 2024, respectively.

Current wording

•Forestar’s owned and controlled lots totaled 101,000 compared to 99,800 and 106,000 at September 30, 2025 and December 31, 2024, respectively. Of these lots, 40,700 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 40,400 and 43,800 at September 30, 2025 and December 31, 2024, 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, 2025 and 2024.

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, 2025 and 2024.

Previous wording

In regions where sales order volume decreased, the markets contributing most to the decrease in the nine month period were the Salt Lake City market in the Northwest, the Phoenix and California markets in the Southwest, the Dallas and Fort Worth markets in the South Central and the Florida markets (particularly Tampa and Jacksonville) in the Southeast. In regions where sales order volume increased, the markets contributing most to the increase were the North Carolina markets in the East and the New Jersey and Chicago markets in the North.

Current wording

In regions where sales order volume increased, the markets contributing most to the increase were the Fort Worth and Houston markets in the South Central, the Myrtle Beach market in the East and the Pittsburgh and Richmond markets in the North. In regions where sales order volume decreased, the markets contributing most to the decrease were the Seattle and Salt Lake City markets in the Northwest, the Las Vegas market in the Southwest and the Florida markets (particularly Jacksonville) in the Southeast.

Previous wording

During the third quarter, new home demand continued to be impacted by uncertainty among potential homebuyers due to ongoing affordability constraints and cautious consumer sentiment. We remain well-positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of new home demand in each of our local markets.

Current wording

During the first quarter, new home demand continued to be impacted by ongoing affordability constraints and cautious consumer sentiment. We remain well positioned with affordable product offerings and a flexible lot supply and will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of new home demand in each of our local markets.

Previous wording

Revenues from home sales were $8.6 billion (23,160 homes closed) and $22.9 billion (61,495 homes closed) for the three and nine months ended June 30, 2025, respectively, compared to $9.2 billion (24,155 homes closed) and $25.0 billion (66,043 homes closed) in the prior year periods. The decrease in revenues in both periods was primarily attributable to a decrease in the number of homes closed and a decrease in the average selling price.

Current wording

Revenues from home sales were $6.5 billion (17,818 homes closed) for the three months ended December 31, 2025 compared to $7.1 billion (19,059 homes closed) in the prior year period. The decrease in revenues was attributable to a 7% decrease in closings volume, along with a 3% decrease in the average selling price.

Previous wording

Gross profit from home sales decreased to $1.9 billion in the three months ended June 30, 2025 from $2.2 billion in the prior year period and decreased 220 basis points to 21.8% as a percentage of home sales revenues. The 220 basis point decrease was primarily due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes.

Current wording

Gross profit from home sales decreased to $1.3 billion in the three months ended December 31, 2025 from $1.6 billion in the prior year period and decreased 230 basis points to 20.4% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 280 basis points due to the average cost of our homes closed increasing along with a decrease in the average selling price of those homes and 10 basis points due to an increase in the amortization of capitalized interest. These decreases were partially offset by an increase of 60 basis points due to the recovery of prior period warranty costs, as well as a decrease in warranty and construction defect costs incurred.

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 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 stay elevated and increase further, depending on market conditions and 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 stay elevated during fiscal 2026, the extent to which will depend on market conditions and 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, 2025, our homebuilding operations had $29.8 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 $16.2 million and $21.2 million in the three months ended December 31, 2025 and 2024, 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, 2025, our homebuilding operations had $26.4 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 this review, there were $15.9 million and $23.3 million of impairment charges recorded in our homebuilding segment during the three and nine months ended June 30, 2025, respectively. There were no impairment charges recorded in the prior year quarter and $5.6 million of impairment charges recorded in the nine months ended June 30, 2024.

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 no impairments recorded in our homebuilding segment during the three months ended December 31, 2025 compared to $2.0 million in the prior year quarter.

Previous wording

During the three and nine months ended June 30, 2025, 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 $36.0 million and $69.9 million, respectively, compared to $12.6 million and $25.6 million in the prior year periods.

Current wording

During the three months ended December 31, 2025, 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 $10.2 million compared to $9.8 million in the prior year period.

Previous wording

Employee compensation and related costs were $532.3 million and $1.5 billion in the three and nine months ended June 30, 2025, respectively, compared to $538.6 million and $1.5 billion in the prior year periods. Employee compensation and related costs represented 79% and 78% of SG&A costs in the three and nine months ended June 30, 2025, respectively, compared to 82% in the prior year periods. Our homebuilding operations employed 10,190 and 10,099 people at June 30, 2025 and 2024, respectively.

Current wording

Employee compensation and related costs were $474.8 million and $493.1 million in the three months ended December 31, 2025 and 2024, respectively, representing 75% and 77% of SG&A costs in those periods. Our homebuilding operations employed 9,723 and 10,168 people at December 31, 2025 and 2024, respectively.

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 increased 170% to $31.0 million and 104% to $69.8 million in the three and nine months ended June 30, 2025, respectively, compared to $11.5 million and $34.2 million in the prior year periods. The increase was primarily due to increases of 54% and 30% in the average amount of homebuilding debt outstanding in the three and nine months ended June 30, 2025, respectively, as well as increases in the weighted average interest rate 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 the three and nine months ended June 30, 2025 compared to 0.3% and 0.4% in the 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 68% to $30.0 million in the three months ended December 31, 2025 compared to $17.9 million in the prior year period. The increase was primarily due to an increase in the weighted average interest rate of homebuilding debt outstanding as well as a 26% increase in the average amount of that debt. Interest charged to cost of sales was 0.5% of homebuilding cost of sales (excluding inventory and land option charges) in the three months ended December 31, 2025 compared to 0.4% in the prior year period.

Previous wording

Other income, net of other expenses, included in our homebuilding operations was $36.0 million and $83.0 million in the three and nine months ended June 30, 2025, respectively, compared to $22.7 million and $73.2 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 $17.2 million in the three months ended December 31, 2025 compared to $29.9 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 decreased 4% and 7% in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods due to decreases in the number of homes closed, particularly in our Salt Lake City market. The region generated pre-tax income of $116.4 million and $286.3 million in the three and nine months ended June 30, 2025, respectively, compared to $121.2 million and $300.0 million in the prior year periods. Gross profit from home sales as a percentage of home sales revenue (home sales gross profit percentage) decreased by 10 basis points and increased by 160 basis points in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods. The increase in the nine month period was primarily due to the average selling price of homes closed increasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 40 and 110 basis points in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to the decrease in homebuilding revenues.

Current wording

Northwest Region — Homebuilding revenues increased 3% in the three months ended December 31, 2025 compared to the prior year period due to increases in the average selling price of homes closed in our Salt Lake City and Seattle markets. The region generated pre-tax income of $59.3 million in the three months ended December 31, 2025 compared to $76.2 million in the prior year period. Gross profit from home sales as a percentage of home sales revenue (home sales gross profit percentage) decreased by 350 basis points in the three months ended December 31, 2025 compared to the prior year period. The decrease was primarily due to the average cost of homes closed increasing by more than the average selling price of those homes. As a percentage of homebuilding revenues, SG&A expenses decreased by 30 basis points in the three months ended December 31, 2025 compared to the prior year period, primarily due to the increase in homebuilding revenues.

Previous wording

Southwest Region — Homebuilding revenues decreased 10% and 7% in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to decreases in the number of homes closed, particularly in our Phoenix and California markets. The region generated pre-tax income of $152.7 million and $444.4 million in the three and nine months ended June 30, 2025, respectively, compared to $209.4 million and $515.3 million in the prior year periods. Home sales gross profit percentage decreased by 170 basis points and increased by 10 basis points in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods. The decrease in the three month period was primarily due to the average selling price of homes closed decreasing while the average cost of those homes increased slightly. As a percentage of homebuilding revenues, SG&A expenses increased by 90 basis points in both the three and nine months ended June 30, 2025 compared to the prior year periods, primarily due to the decrease in homebuilding revenues.

Current wording

Southwest Region — Homebuilding revenues decreased 22% in the three months ended December 31, 2025 compared to the prior year period, primarily due to a decrease in the number of homes closed, particularly in our Las Vegas and California markets. The region generated pre-tax income of $88.6 million in the three months ended December 31, 2025 compared to $168.4 million in the prior year period. Home sales gross profit percentage decreased by 340 basis points in the three months ended December 31, 2025 compared to the prior year period. The decrease was primarily due to the average selling price of homes closed decreasing while the average cost of those homes increased slightly. As a percentage of homebuilding revenues, SG&A expenses increased by 140 basis points in the three months ended December 31, 2025 compared to the prior year period, primarily due to the decrease in homebuilding revenues.

Previous wording

Southeast Region — Homebuilding revenues decreased 20% in both the three and nine months ended June 30, 2025 compared to the prior year periods, primarily due to decreases in the number of homes closed, particularly in our Florida markets. The region generated pre-tax income of $224.6 million and $658.7 million in the three and nine months ended June 30, 2025, respectively, compared to $404.1 million and $1.1 billion in the prior year periods. Home sales gross profit percentage decreased by 300 and 260 basis points in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 110 and 130 basis points in the three and nine months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to the decrease in homebuilding revenues.

Current wording

Southeast Region — Homebuilding revenues decreased 17% in the three months ended December 31, 2025 compared to the prior year period, primarily due to a decrease in the number of homes closed, particularly in our Jacksonville and Tampa markets. The region generated pre-tax income of $143.4 million in the three months ended December 31, 2025 compared to $222.8 million in the prior year period. Home sales gross profit percentage decreased by 180 basis points in the three months ended December 31, 2025 compared to the prior year period, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 110 basis points in the three months ended December 31, 2025 compared to the prior year period, primarily due to the decrease in homebuilding revenues.