D.R. Horton, Inc., America's Builder, Reports Fiscal Year 2006 Third Quarter Results

July 20, 2006

FORT WORTH, Texas--(BUSINESS WIRE)--July 20, 2006--D.R. Horton, Inc., America's Builder (NYSE:DHI), the largest homebuilder in the United States, Thursday (July 20, 2006), reported net income for the quarter ended June 30, 2006 of $292.8 million ($0.93 per diluted share), compared to $371.7 million ($1.17 per diluted share) for the same quarter of fiscal year 2005. Earnings for the quarter ended June 30, 2006 reflect a pre-tax charge of $57.2 million ($0.11 per diluted share) to write off earnest money and pre-acquisition costs related to land option contracts. Consolidated revenue for the quarter increased 9% to $3.7 billion, from $3.4 billion in the same quarter of fiscal year 2005. Homes closed in the quarter increased 9% to 13,377 homes from 12,269 homes in the year ago quarter.

For the nine months ended June 30, 2006, net income increased 5% to $955.6 million ($3.02 per diluted share), compared to $906.7 million ($2.85 per diluted share) for the same period of fiscal year 2005. Consolidated revenue for the nine months increased 16% to $10.2 billion, from $8.8 billion for the same period of fiscal year 2005. Homes closed in the nine-month period increased 10% to 35,838 homes from 32,550 homes for the same period of fiscal year 2005.

As previously reported, net sales orders for the quarter ended June 30, 2006 were 14,316 homes ($3.8 billion), compared to 14,980 homes ($4.1 billion) for the same quarter of fiscal year 2005. Net sales orders for the first nine months of fiscal 2006 increased 6% to 41,550 homes ($11.4 billion), compared to 39,282 homes ($10.9 billion) for the same period of fiscal 2005. The Company's backlog of homes under contract at June 30, 2006 increased 4% to 24,956 homes ($7.4 billion), compared to 23,916 homes ($7.0 billion) at June 30, 2005.

Donald R. Horton, Chairman of the Board, said, "Our people have worked very hard to achieve these results during a time when selling conditions are very difficult in the homebuilding industry. We have experienced a changing home sales environment since the beginning of the calendar year, which became more evident during our third quarter. As we indicated when we reported our net sales orders last week, the current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets. Due to these factors, last week we reduced our guidance for fiscal year 2006 to $3.65 per diluted share or greater (based on approximately 317 million diluted shares) on approximately 50,000 homes closed."

The Company will host a conference call Thursday, July 20th at 10:00 a.m. ET. The dial-in number is 800-374-9096. The call will also be webcast from www.DRHORTON.com on the "Investor Relations" page.

D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States, delivering more than 51,000 homes in its fiscal year ended September 30, 2005. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Mid-Atlantic, Midwest, Southeast, Southwest and Western regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.

Portions of this document may constitute "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. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include our expectation of fiscal year 2006 diluted earnings per share of $3.65 or greater (based on approximately 317 million diluted shares) on approximately 50,000 homes closed. 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: changes in general economic, real estate construction and other business conditions; changes in interest rates, the availability of mortgage financing or increases in the costs of owning a home; governmental regulations and environmental matters; the Company's substantial debt; competitive conditions within the industry; the availability of capital to the Company on favorable terms; the Company's ability to successfully effect its growth strategies; and warranty and product liability claims. 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 most recent quarterly reports on Form 10-Q, which are filed with the Securities and Exchange Commission.

WEBSITE ADDRESS: www.DRHORTON.com

                          D.R. HORTON, INC.
                  CONSOLIDATED STATEMENTS OF INCOME
                             (UNAUDITED)

                             Three Months Ended    Nine Months Ended
                                  June 30,              June 30,
                           --------------------- ---------------------
                                2005       2006       2005       2006
                           ---------- ---------- ---------- ----------
                            ($ in millions, except per share amounts)
Homebuilding:
  Revenues:
   Home sales               $3,277.1   $3,581.4   $8,432.9   $9,842.7
   Land/lot sales               32.4       12.2      177.5      119.2
                            ---------  ---------  ---------  ---------

                             3,309.5    3,593.6    8,610.4    9,961.9
                            ---------  ---------  ---------  ---------
  Cost of sales:
   Home sales                2,413.7    2,788.7    6,279.8    7,400.6
   Land/lot sales               17.0        6.7      105.4       46.2
                            ---------  ---------  ---------  ---------

                             2,430.7    2,795.4    6,385.2    7,446.8
                            ---------  ---------  ---------  ---------
  Gross profit:
   Home sales                  863.4      792.7    2,153.1    2,442.1
   Land/lot sales               15.4        5.5       72.1       73.0
                            ---------  ---------  ---------  ---------

                               878.8      798.2    2,225.2    2,515.1
                            ---------  ---------  ---------  ---------

  Selling, general and
   administrative expense      302.0      356.4      826.7    1,046.9
  Interest expense                --         --         --       15.0
  Other (income)                (0.5)      (2.9)     (11.4)     (13.4)
                            ---------  ---------  ---------  ---------

  Operating income from
   Homebuilding                577.3      444.7    1,409.9    1,466.6
                            ---------  ---------  ---------  ---------

Financial Services:
  Revenues                      60.7       74.2      156.5      206.6
  General and
   administrative expense       38.5       50.8      105.1      147.6
  Interest expense               4.1        8.7        9.1       24.7
  Other (income)                (9.0)     (12.8)     (22.0)     (40.4)
                            ---------  ---------  ---------  ---------

  Operating income from
   Financial Services           27.1       27.5       64.3       74.7
                            ---------  ---------  ---------  ---------

Income before income taxes    $604.4     $472.2   $1,474.2   $1,541.3
Provision for income taxes     232.7      179.4      567.5      585.7
                            ---------  ---------  ---------  ---------

Net income                    $371.7     $292.8     $906.7     $955.6
                            =========  =========  =========  =========
Basic:
  Net income per share         $1.19      $0.94      $2.91      $3.06
                            =========  =========  =========  =========
  Weighted average number
   of common shares            312.4      312.8      312.0      312.7
                            =========  =========  =========  =========

Diluted:
  Net income per share         $1.17      $0.93      $2.85      $3.02
                            =========  =========  =========  =========
  Weighted average number
   of common shares            318.3      315.8      317.8      316.7
                            =========  =========  =========  =========

Other Consolidated
 Financial Data:

  Interest amortized to
   home and land/lot cost
   of sales                    $59.7      $60.1     $158.6     $164.5
                            =========  =========  =========  =========
  Depreciation and
   amortization                $12.4      $14.3      $39.2      $40.7
                            =========  =========  =========  =========
  Interest incurred            $73.0      $94.1     $213.9     $275.7
                            =========  =========  =========  =========



                  D.R. HORTON, INC.
             CONSOLIDATED BALANCE SHEET
                     (UNAUDITED)

                                                       As of June 30,
                                                            2006
                                                       ---------------
                                                       (In millions)
                        ASSETS
Homebuilding:
Cash and cash equivalents                                      $100.3
Inventories:
     Construction in progress and finished homes              5,298.6
     Residential land and lots -- developed and under
      development                                             6,462.1
     Land held for development                                  102.3
     Consolidated land inventory not owned                      142.4
                                                        --------------
                                                             12,005.4
Property and equipment (net)                                    130.7
Earnest money deposits and other assets                         760.8
Goodwill                                                        578.9
                                                        --------------

                                                             13,576.1
                                                        --------------
Financial Services:
Cash and cash equivalents                                        59.8
Mortgage loans held for sale                                    846.1
Other assets                                                     77.7
                                                        --------------

                                                                983.6
                                                        --------------
                                                            $14,559.7
                                                        ==============
                      LIABILITIES
Homebuilding:
Accounts payable                                               $957.4
Accrued expenses and other liabilities                        1,004.2
Notes payable                                                 5,489.7
                                                        --------------
                                                              7,451.3
                                                        --------------
Financial Services:
Accounts payable and other liabilities                           24.4
Notes payable                                                   724.3
                                                        --------------
                                                                748.7
                                                        --------------
                                                              8,200.0
                                                        --------------
Minority interests                                              145.6
                                                        --------------
                 STOCKHOLDERS' EQUITY
Common stock                                                      3.2
Additional capital                                            1,650.3
Retained earnings                                             4,656.3
Treasury stock (at cost)                                        (95.7)
                                                        --------------
                                                              6,214.1
                                                        --------------
                                                            $14,559.7
                                                        ==============


                          D.R. HORTON, INC.
                           ($'s in millions)


                                     NET SALES ORDERS

                                  Three Months Ended June 30,
                     -------------------------------------------------
                               2005                     2006
                     ------------------------- -----------------------
                         Homes          $'s        Homes        $'s
                     ------------ ------------ ---------- ------------

Mid-Atlantic               1,453       $381.6      1,355       $330.4
Midwest                      952        254.5        585        171.0
Southeast                  2,346        577.3      2,186        530.4
Southwest                  5,807      1,158.5      6,511      1,340.0
West                       4,422      1,762.9      3,679      1,461.2
                     ------------ ------------ ---------- ------------
                          14,980     $4,134.8     14,316     $3,833.0
                     ============ ============ ========== ============


                                     NET SALES ORDERS

                                  Nine Months Ended June 30,
                     -------------------------------------------------
                                 2005                    2006
                     ------------------------- -----------------------
                         Homes          $'s        Homes        $'s
                     ------------ ------------ ---------- ------------

Mid-Atlantic               3,753     $1,004.7      3,839       $956.9
Midwest                    2,258        603.8      1,736        496.4
Southeast                  6,079      1,485.8      6,455      1,595.8
Southwest                 15,383      3,007.1     17,652      3,635.0
West                      11,809      4,787.8     11,868      4,678.9
                     ------------ ------------ ---------- ------------
                          39,282    $10,889.2     41,550    $11,363.0
                     ============ ============ ========== ============

                                       HOMES CLOSED

                                  Three Months Ended June 30,
                     -------------------------------------------------
                               2005                     2006
                     ------------------------- -----------------------
                         Homes          $'s        Homes        $'s
                     ------------ ------------ ---------- ------------

Mid-Atlantic                 978       $253.1      1,187       $319.4
Midwest                      563        146.7        801        236.0
Southeast                  1,942        447.9      2,212        529.3
Southwest                  4,819        892.8      5,440      1,071.4
West                       3,967      1,536.6      3,737      1,425.3
                     ------------ ------------ ---------- ------------
                          12,269     $3,277.1     13,377     $3,581.4
                     ============ ============ ========== ============


                                  Nine Months Ended June 30,
                     -------------------------------------------------
                            2005                    2006
                     ------------------------- -----------------------
                         Homes          $'s        Homes        $'s
                     ------------ ------------ ---------- ------------

Mid-Atlantic               2,681       $671.6      3,309       $877.9
Midwest                    1,418        371.2      2,068        586.1
Southeast                  5,039      1,137.3      5,907      1,463.3
Southwest                 13,472      2,405.5     13,810      2,728.2
West                       9,940      3,847.3     10,744      4,187.2
                     ------------ ------------ ---------- ------------
                          32,550     $8,432.9     35,838     $9,842.7
                     ============ ============ ========== ============


                                 SALES ORDER BACKLOG

                                    As of June 30,
                          -----------------------------------
                                2005              2006
                          ------- --------- ------- ---------
                           Homes     $'s     Homes     $'s
                          ------- --------- ------- ---------

Mid-Atlantic               2,812    $825.3   3,046    $826.7
Midwest                    1,701     502.3   1,029     312.6
Southeast                  4,027   1,047.0   3,684   1,040.8
Southwest                  8,543   1,796.9  11,115   2,571.8
West                       6,833   2,853.2   6,082   2,603.6
                          ------- --------- ------- ---------
                          23,916  $7,024.7  24,956  $7,355.5
                          ======= ========= ======= =========

CONTACT:
D.R. Horton, Inc., Fort Worth
Stacey Dwyer, 817-390-8200

SOURCE:
D.R. Horton, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding D.R. Horton's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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