D.R. Horton, Inc., America's Builder, Reports Fiscal 2007 Third Quarter Results

July 26, 2007

FORT WORTH, Texas--(BUSINESS WIRE)--July 26, 2007--D.R. Horton, Inc. (NYSE:DHI), America's Builder, Thursday (July 26, 2007), reported a net loss for its third fiscal quarter ended June 30, 2007 of $823.8 million, or $2.62 per diluted share. The quarterly results included pre-tax charges to cost of sales of $835.8 million for inventory impairments and $16.2 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the same quarter of fiscal 2006 was $292.8 million, or $0.93 per diluted share. Homebuilding revenue for the third quarter of fiscal 2007 totaled $2.5 billion, compared to $3.6 billion in the same quarter of fiscal 2006. Homes closed in the current quarter totaled 9,643, compared to 13,377 homes closed in the year ago quarter.

For the nine months ended June 30, 2007, the Company reported a net loss totaling $662.3 million, or $2.11 per diluted share. The nine-month results included pre-tax charges to cost of sales of $943.9 million for inventory impairments and $66.9 million for write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Additionally, the results included a pre-tax goodwill impairment charge of $425.6 million. Net income for the nine months ended June 30, 2006 was $955.6 million, or $3.02 per diluted share. Homebuilding revenue for the nine months ended June 30, 2007 totaled $8.0 billion, compared to $10.0 billion for the same period of fiscal 2006. Homes closed in the nine-month period totaled 29,637, compared to 35,838 homes closed in the same period of fiscal 2006.

The Company's sales backlog of homes under contract at June 30, 2007 was 15,801 homes ($4.4 billion), compared to 24,956 homes ($7.4 billion) at June 30, 2006. As previously reported, net sales orders for the third quarter ended June 30, 2007 totaled 8,559 homes ($2.0 billion), compared to 14,316 homes ($3.8 billion) for the same quarter of fiscal 2006. Net sales orders for the first nine months of fiscal 2007 were 27,313 homes ($6.9 billion), compared to 41,550 homes ($11.4 billion) for the same period of fiscal 2006.

Donald R. Horton, Chairman of the Board, said, "Market conditions in the homebuilding industry continue to be challenging as inventory levels of both new and existing homes remain at historically high levels, both as an absolute number and in terms of months' supply. Increased use of sales incentives continues to put pressure on profit margins. In addition, home price appreciation over the past few years, higher interest rates and tightened credit standards in the mortgage industry are all negatively impacting affordability. Even in the midst of this volatile housing market, we produced an operating profit before impairments this quarter and generated positive cash flow from operations for the fourth consecutive quarter.

"We believe that market conditions will continue to be challenging, and our quarter-end impairment evaluations incorporated our more cautious outlook for the industry. For the remainder of fiscal 2007, we will focus on generating cash, reducing inventory balances and paying down outstanding debt to maintain a strong balance sheet."

The Company will host a conference call on Thursday, July 26, 2007 at 10:00 a.m. Eastern Daylight Time. The dial-in number is 800-374-9096, and 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. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Northeast, Southeast, South Central, Southwest, California and West 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 that market conditions will continue to be challenging and that during the remainder of fiscal 2007 we will focus on generating cash, reducing inventory balances and paying down outstanding debt to maintain a strong balance sheet. 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 operational 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 report 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,
                             -------------------- --------------------
                               2006       2007      2006       2007
                             --------- ---------- --------- ----------
                                     ($'s in millions, except
                                         per share amounts)
Homebuilding:
 Revenues:
  Home sales                 $3,581.4  $ 2,470.5  $9,842.7  $ 7,753.1
  Land/lot sales                 12.2       77.6     119.2      212.7
                              --------  ---------  --------  ---------

                              3,593.6    2,548.1   9,961.9    7,965.8
                              --------  ---------  --------  ---------
 Cost of sales:
  Home sales                  2,727.8    2,058.8   7,328.8    6,380.2
  Land/lot sales                  6.7       65.6      46.2      187.6
  Inventory impairments and
   land option cost write-
   offs                          60.9      852.0      71.8    1,010.8
                              --------  ---------  --------  ---------

                              2,795.4    2,976.4   7,446.8    7,578.6
                              --------  ---------  --------  ---------
 Gross profit (loss):
  Home sales                    853.6      411.7   2,513.9    1,372.9
  Land/lot sales                  5.5       12.0      73.0       25.1
  Inventory impairments and
   land option cost write-
   offs                         (60.9)    (852.0)    (71.8)  (1,010.8)
                              --------  ---------  --------  ---------

                                798.2     (428.3)  2,515.1      387.2
                              --------  ---------  --------  ---------

 Selling, general and
  administrative expense        356.4      267.5   1,046.9      858.9
 Goodwill impairment                -      425.6         -      425.6
 Loss on early retirement of
  debt                              -       12.1      15.0       12.1
 Other (income)                  (2.9)      (3.9)    (13.4)      (5.7)
                              --------  ---------  --------  ---------

 Operating income (loss)
  from Homebuilding             444.7   (1,129.6)  1,466.6     (903.7)
                              --------  ---------  --------  ---------

Financial Services:
 Revenues                        74.2       50.0     206.6      158.3
 General and administrative
  expense                        50.8       36.0     147.6      119.3
 Interest expense                 8.7        4.1      24.7       20.5
 Other (income)                 (12.8)      (8.3)    (40.4)     (34.2)
                              --------  ---------  --------  ---------

 Operating income from
  Financial Services             27.5       18.2      74.7       52.7
                              --------  ---------  --------  ---------

Income (loss) before income
 taxes                          472.2   (1,111.4)  1,541.3     (851.0)
Provision for (benefit from)
 income taxes                   179.4     (287.6)    585.7     (188.7)
                              --------  ---------  --------  ---------

Net income (loss)            $  292.8  $  (823.8) $  955.6  $  (662.3)
                              ========  =========  ========  =========
Basic:
 Net income (loss) per share $   0.94  $   (2.62) $   3.06  $   (2.11)
                              ========  =========  ========  =========
 Weighted average number of
  common shares                 312.8      314.3     312.7      313.9
                              ========  =========  ========  =========

Diluted:
 Net income (loss) per share $   0.93  $   (2.62) $   3.02  $   (2.11)
                              ========  =========  ========  =========
 Weighted average number of
  common shares                 315.8      314.3     316.7      313.9
                              ========  =========  ========  =========

Other Consolidated Financial
 Data:

 Interest amortized to home
  and land/lot cost of sales $   60.1  $    60.8  $  164.5  $   171.5
                              ========  =========  ========  =========
 Depreciation and
  amortization               $   14.3  $    16.4  $   40.7  $    48.3
                              ========  =========  ========  =========
 Interest incurred           $   94.1  $    80.1  $  260.7  $   253.0
                              ========  =========  ========  =========
                           D.R. HORTON, INC.
                      CONSOLIDATED BALANCE SHEET
                              (UNAUDITED)

                                                      As of June 30,
                                                           2007
                                                     -----------------
                                                       (In millions)
                        ASSETS
 Homebuilding:
 Cash and cash equivalents                                $       4.9
 Inventories:
      Construction in progress and finished homes             4,207.5
      Residential land and lots - developed and under
       development                                            5,869.5
      Land held for development                                 359.4
      Land inventory not owned                                  150.9
                                                           -----------
                                                             10,587.3
 Property and equipment, net                                    117.9
 Deferred income taxes                                          735.9
 Earnest money and other assets                                 315.3
 Goodwill                                                       153.3
                                                           -----------

                                                             11,914.6
                                                           -----------
 Financial Services:
 Cash and cash equivalents                                       55.9
 Mortgage loans held for sale                                   469.0
 Other assets                                                    54.5
                                                           -----------

                                                                579.4
                                                           -----------
                                                          $  12,494.0
                                                           ===========
                     LIABILITIES
 Homebuilding:
 Accounts payable                                         $     807.6
 Accrued expenses and other liabilities                         982.0
 Notes payable                                                4,598.0
                                                           -----------

                                                              6,387.6
                                                           -----------
 Financial Services:
 Accounts payable and other liabilities                          24.8
 Notes payable                                                  318.8
                                                           -----------

                                                                343.6
                                                           -----------

                                                              6,731.2
                                                           -----------

 Minority interests                                              85.1
                                                           -----------
                 STOCKHOLDERS' EQUITY
 Common stock                                                     3.2
 Additional capital                                           1,686.7
 Retained earnings                                            4,083.5
 Treasury stock, at cost                                        (95.7)
                                                           -----------
                                                              5,677.7
                                                           -----------

                                                          $  12,494.0
                                                           ===========
                          D.R. HORTON, INC.
                          ($'s in millions)


                           NET SALES ORDERS

                                     Three Months Ended June 30,
                                  ---------------------------------
                                        2006             2007
                                  ----------------  ---------------
                                  Homes    Value    Homes   Value
                                  ------  --------  -----  --------

Northeast                          1,979    $510.3  1,148    $308.3
Southeast                          2,010     497.1  1,500     323.7
South Central                      4,290     744.2  2,541     443.5
Southwest                          3,227     880.5  1,894     409.2
California                         1,708     805.1    804     307.1
West                               1,102     395.8    672     237.0
                                  ------  --------  -----  --------

                                  14,316  $3,833.0  8,559  $2,028.8
                                  ======  ========  =====  ========



                             HOMES CLOSED

                                     Three Months Ended June 30,
                                  ---------------------------------
                                        2006             2007
                                  ----------------  ---------------
                                  Homes    Value    Homes   Value
                                  ------  --------  -----  --------

Northeast                          2,014    $561.4  1,404    $384.8
Southeast                          1,998     494.9  1,575     367.6
South Central                      3,656     623.3  2,746     490.7
Southwest                          2,839     738.7  2,298     548.0
California                         1,818     789.3    913     425.1
West                               1,052     373.8    707     254.3
                                  ------  --------  -----  --------

                                  13,377  $3,581.4  9,643  $2,470.5
                                  ======  ========  =====  ========

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


                           NET SALES ORDERS

                                       Nine Months Ended June 30,
                                  ------------------------------------
                                         2006                     2007
                                  ------------------  ----------------
                                   Homes     Value    Homes    Value
                                  -------  ---------  ------  --------

Northeast                           5,663   $1,478.0   3,867  $1,030.6
Southeast                           5,845    1,489.1   4,301     961.1
South Central                      11,178    1,920.8   7,198   1,282.2
Southwest                           9,477    2,535.1   6,364   1,395.0
California                          6,037    2,754.2   3,247   1,413.2
West                                3,350    1,185.8   2,336     838.9
                                  -------  ---------  ------  --------

                                   41,550  $11,363.0  27,313  $6,921.0
                                  =======  =========  ======  ========



                             HOMES CLOSED

                                       Nine Months Ended June 30,
                                  ------------------------------------
                                         2006               2007
                                  ------------------  ----------------
                                   Homes     Value    Homes    Value
                                  -------  ---------  ------  --------

Northeast                           5,441   $1,477.9   4,238  $1,131.8
Southeast                           5,621    1,416.6   4,497   1,076.3
South Central                       9,192    1,551.6   7,936   1,418.7
Southwest                           7,390    1,955.1   7,181   1,733.6
California                          5,269    2,394.1   3,534   1,597.4
West                                2,925    1,047.4   2,251     795.3
                                  -------  ---------  ------  --------

                                   35,838   $9,842.7  29,637  $7,753.1
                                  =======  =========  ======  ========

                                           SALES ORDER BACKLOG

                                              As of June 30,
                                    ----------------------------------
                                          2006              2007
                                    ----------------  ----------------
                                    Homes    Value    Homes    Value
                                    ------  --------  ------  --------

Northeast                            4,116  $1,149.0   2,531    $695.6
Southeast                            3,343     981.9   1,952     518.6
South Central                        4,961     893.4   3,475     641.3
Southwest                            7,155   1,962.8   4,937   1,211.6
California                           3,690   1,763.9   1,801     857.6
West                                 1,691     604.5   1,105     428.3
                                    ------  --------  ------  --------

                                    24,956  $7,355.5  15,801  $4,353.0
                                    ======  ========  ======  ========

CONTACT:
D.R. Horton, Inc.
Stacey Dwyer, EVP, 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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