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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From              To             
Commission File Number: 1-14122
D.R. Horton, Inc.
(Exact name of registrant as specified in its charter)
Delaware75-2386963
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1341 Horton Circle
Arlington, Texas 76011
(Address of principal executive offices) (Zip code)
(817) 390-8200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $.01 per shareDHINew York Stock Exchange
5.750% Senior Notes due 2023DHI 23ANew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  ý
As of January 20, 2021, there were 363,701,712 shares of the registrant’s common stock, par value $.01 per share, outstanding.





D.R. HORTON, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
 
 Page


2

Table of Contents
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

December 31,
2020
September 30,
2020
(In millions)
(Unaudited)
ASSETS
Cash and cash equivalents$2,454.9 $3,018.5 
Restricted cash20.0 21.6 
Total cash, cash equivalents and restricted cash2,474.9 3,040.1 
Inventories:
Construction in progress and finished homes6,598.8 5,984.1 
Residential land and lots — developed and under development6,856.1 6,171.8 
Land held for development97.8 53.2 
Land held for sale23.8 28.3 
Total inventory13,576.5 12,237.4 
Mortgage loans held for sale1,438.9 1,529.0 
Deferred income taxes, net of valuation allowance of $7.5 million
at December 31, 2020 and September 30, 2020
142.0 144.9 
Property and equipment, net748.4 683.7 
Other assets1,236.2 1,113.7 
Goodwill163.5 163.5 
Total assets$19,780.4 $18,912.3 
LIABILITIES
Accounts payable$845.6 $900.5 
Accrued expenses and other liabilities1,938.9 1,607.0 
Notes payable4,225.6 4,283.3 
Total liabilities7,010.1 6,790.8 
Commitments and contingencies (Note L)
EQUITY
Preferred stock, $.10 par value, 30,000,000 shares authorized, no shares issued
  
Common stock, $.01 par value, 1,000,000,000 shares authorized, 395,389,246 shares issued
and 363,647,879 shares outstanding at December 31, 2020 and 394,741,349 shares issued
and 363,999,982 shares outstanding at September 30, 2020
4.0 3.9 
Additional paid-in capital3,236.9 3,240.9 
Retained earnings10,476.7 9,757.8 
Treasury stock, 31,741,367 shares and 30,741,367 shares at December 31, 2020
and September 30, 2020, respectively, at cost
(1,232.4)(1,162.6)
Stockholders’ equity12,485.2 11,840.0 
Noncontrolling interests285.1 281.5 
Total equity12,770.3 12,121.5 
Total liabilities and equity$19,780.4 $18,912.3 




See accompanying notes to consolidated financial statements.

3

Table of Contents


D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
December 31,
 20202019
(In millions, except per share data)
(Unaudited)
Revenues$5,933.4 $4,020.7 
Cost of sales4,332.5 3,084.2 
Selling, general and administrative expense585.9 455.8 
Gain on sale of assets(14.0)(31.1)
Other (income) expense(5.3)(11.5)
Income before income taxes1,034.3 523.3 
Income tax expense239.1 90.8 
Net income795.2 432.5 
Net income attributable to noncontrolling interests3.4 1.2 
Net income attributable to D.R. Horton, Inc.$791.8 $431.3 
Basic net income per common share attributable to D.R. Horton, Inc.$2.17 $1.17 
Weighted average number of common shares364.4 368.3 
Diluted net income per common share attributable to D.R. Horton, Inc.$2.14 $1.16 
Adjusted weighted average number of common shares370.0 373.4 




























See accompanying notes to consolidated financial statements.

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D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF TOTAL EQUITY

Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Non-controlling
Interests
Total
Equity
 (In millions, except common stock share data)
(Unaudited)
Balances at September 30, 2020 (363,999,982 shares)
$3.9 $3,240.9 $9,757.8 $(1,162.6)$281.5 $12,121.5 
Net income  791.8  3.4 795.2 
Exercise of stock options (42,950 shares)
 0.9 — — — 0.9 
Stock issued under employee benefit plans (604,947 shares)
0.1  — — — 0.1 
Cash paid for shares withheld for taxes (26.3)   (26.3)
Stock-based compensation expense— 21.7 — — — 21.7 
Cash dividends declared ($0.20 per share)
— — (72.9)— — (72.9)
Repurchases of common stock (1,000,000 shares)
— — — (69.8)— (69.8)
Distributions to noncontrolling interests— — — — (0.1)(0.1)
Change of ownership interest in Forestar— (0.3)— — 0.3  
Balances at December 31, 2020 (363,647,879 shares)
$4.0 $3,236.9 $10,476.7 $(1,232.4)$285.1 $12,770.3 

Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Non-controlling
Interests
Total
Equity
 (In millions, except common stock share data)
(Unaudited)
Balances at September 30, 2019 (368,431,454 shares)
$3.9 $3,179.1 $7,640.1 $(802.2)$274.2 $10,295.1 
Net income  431.3  1.2 432.5 
Exercise of stock options (258,800 shares)
 4.1 — — — 4.1 
Stock issued under employee benefit plans (582,936 shares)
—  — — — — 
Cash paid for shares withheld for taxes (17.3)   (17.3)
Stock-based compensation expense— 16.6 — — — 16.6 
Cash dividends declared ($0.175 per share)
— — (64.6)— — (64.6)
Repurchases of common stock (3,000,000 shares)
— — — (163.1)— (163.1)
Distributions to noncontrolling interests— — — — (0.4)(0.4)
Change of ownership interest in Forestar— (0.5)— — 0.5  
Balances at December 31, 2019 (366,273,190 shares)
$3.9 $3,182.0 $8,006.8 $(965.3)$275.5 $10,502.9 












See accompanying notes to consolidated financial statements.

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D.R. HORTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

 Three Months Ended
December 31,
 20202019
(In millions)
(Unaudited)
OPERATING ACTIVITIES
Net income$795.2 $432.5 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization20.4 19.0 
Amortization of discounts and fees2.5 3.1 
Stock-based compensation expense21.7 16.6 
Equity in earnings of unconsolidated entities(0.9)(0.5)
Deferred income taxes2.9 7.2 
Inventory and land option charges8.3 3.8 
Gain on sale of assets(14.0)(31.1)
Changes in operating assets and liabilities:
Increase in construction in progress and finished homes(591.2)(334.8)
Increase in residential land and lots –
developed, under development, held for development and held for sale
(716.8)(373.1)
(Increase) decrease in other assets(124.9)2.0 
Net decrease in mortgage loans held for sale90.1 46.9 
Increase in accounts payable, accrued expenses and other liabilities254.6 94.6 
Net cash used in operating activities(252.1)(113.8)
INVESTING ACTIVITIES
Expenditures for property and equipment(16.3)(21.6)
Proceeds from sale of assets31.8 62.8 
Expenditures related to rental properties(86.2)(59.6)
Return of investment in unconsolidated entities2.1 1.9 
Net principal decrease (increase) of other mortgage loans and real estate owned0.2 (0.6)
Payments related to business acquisitions(23.0)(0.7)
Net cash used in investing activities(91.4)(17.8)
FINANCING ACTIVITIES
Proceeds from notes payable494.1 495.7 
Repayment of notes payable(400.1) 
Payments on mortgage repurchase facility, net(163.5)(38.6)
Proceeds from stock associated with certain employee benefit plans0.9 4.1 
Cash paid for shares withheld for taxes(26.3)(17.3)
Cash dividends paid(72.9)(64.6)
Repurchases of common stock
(53.8)(163.1)
Distributions to noncontrolling interests, net
(0.1)(0.4)
Other financing activities
 (2.3)
Net cash (used in) provided by financing activities(221.7)213.5 
Net (decrease) increase in cash, cash equivalents and restricted cash(565.2)81.9 
Cash, cash equivalents and restricted cash at beginning of period3,040.1 1,514.0 
Cash, cash equivalents and restricted cash at end of period$2,474.9 $1,595.9 
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES:
Notes payable issued for inventory$12.5 $ 
Stock issued under employee incentive plans$44.7 $31.8 
Accrued expenditures for property and equipment$21.8 $7.7 
Accrual for holdback payments related to acquisitions$2.6 $9.5 
Repurchase of common stock not settled$16.0 $ 
See accompanying notes to consolidated financial statements.

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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December 31, 2020

NOTE A – BASIS OF PRESENTATION

The accompanying unaudited, consolidated financial statements include the accounts of D.R. Horton, Inc. and all of its 100% owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company, unless the context otherwise requires. Noncontrolling interests represent the proportionate equity interests in consolidated entities that are not 100% owned by the Company. The Company owns a 65% controlling interest in Forestar Group Inc. (Forestar) and therefore is required to consolidate 100% of Forestar within its consolidated financial statements, and the 35% interest the Company does not own is accounted for as noncontrolling interests. All intercompany accounts, transactions and balances have been eliminated in consolidation.

The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2020, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2020.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Seasonality

Historically, the homebuilding industry has experienced seasonal fluctuations; therefore, the operating results for the three months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2021 or subsequent periods.

Business Acquisition

In October 2020, the Company acquired the homebuilding operations of Braselton Homes for approximately $23.0 million in cash. Braselton Homes operates in Corpus Christi, Texas. The assets acquired included approximately 90 homes in inventory, 95 lots and control of approximately 840 additional lots through purchase contracts. The Company also acquired a sales order backlog of approximately 125 homes.

Pending Accounting Standards

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12 related to simplifying the accounting for income taxes. The guidance is effective for the Company beginning October 1, 2021, although early adoption is permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect them to have a material impact on its consolidated financial statements or related disclosures.

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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2020




NOTE B – SEGMENT INFORMATION

The Company is a national homebuilder that is primarily engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in 90 markets across 29 states. The Company’s operating segments are its 55 homebuilding divisions, its majority-owned Forestar residential lot development operations, its financial services operations and its other business activities. The Company’s reporting segments are its homebuilding reporting segments, its Forestar lot development segment and its financial services segment. The homebuilding operating segments are aggregated into the following six reporting segments: East, Midwest, Southeast, South Central, Southwest and West. These reporting segments have homebuilding operations located in the following states:
East:Delaware, Georgia (Savannah only), Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and Virginia
Midwest:Colorado, Illinois, Indiana, Iowa, Minnesota and Ohio
Southeast:Alabama, Florida, Georgia, Mississippi and Tennessee
South Central:Louisiana, Oklahoma and Texas
Southwest:Arizona and New Mexico
West:California, Hawaii, Nevada, Oregon, Utah and Washington

The Company’s homebuilding divisions design, build and sell single-family detached homes on lots they develop and on fully developed lots purchased ready for home construction. To a lesser extent, the homebuilding divisions also build and sell attached homes, such as townhomes, duplexes and triplexes. Most of the revenue generated by the Company’s homebuilding operations is from the sale of completed homes and to a lesser extent from the sale of land and lots.

During fiscal 2020, the Company began constructing and leasing homes as income-producing single-family rental communities. After a rental community is constructed and achieves a stabilized level of leased occupancy, the Company generally expects to market the community for a bulk sale of homes. These operations are reported in the Company’s homebuilding segment. During the three months ended December 31, 2020, the Company completed its first sale of a single-family rental community representing 124 homes for $31.8 million, resulting in a gain on sale of $14.0 million. At December 31, 2020, the Company’s homebuilding fixed assets included $106.6 million of assets related to its single-family rental platform, representing 13 communities totaling 890 single-family rental homes and finished lots, which included 440 completed homes. At September 30, 2020, the Company’s homebuilding fixed assets included $87.2 million of assets related to its single-family rental platform, representing 10 communities totaling 740 single-family rental homes and finished lots, which included 440 completed homes.

The Forestar segment is a residential lot development company with operations in 51 markets across 21 states. Forestar has made significant investments in land acquisition and development to expand its business across the United States. The homebuilding divisions acquire finished lots from Forestar in accordance with the master supply agreement between the two companies. Forestar’s segment results are presented on their historical cost basis, consistent with the manner in which management evaluates segment performance.

The Company’s financial services segment provides mortgage financing and title agency services to homebuyers in many of the Company’s homebuilding markets. The segment generates the substantial majority of its revenues from originating and selling mortgages and collecting fees for title insurance agency and closing services. The Company sells substantially all of the mortgages it originates and the majority of the related servicing rights to third-party purchasers.



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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2020




In addition to its homebuilding, Forestar and financial services operations, the Company engages in other business activities through its subsidiaries. The Company conducts insurance-related operations, constructs and owns income-producing multi-family rental properties, owns non-residential real estate including ranch land and improvements and owns and operates oil and gas related assets. The results of these operations are immaterial for separate reporting and therefore are grouped together and presented as other. The Company’s multi-family rental operations develop, construct, lease and own multi-family rental properties, which are typically marketed for sale after achieving a stabilized level of leased occupancy. At December 31, 2020, the Company had four multi-family rental projects under active construction and four projects that were substantially complete. These eight projects represent 2,325 multi-family units, including 1,015 units under active construction and 1,310 completed units. At December 31, 2020 and September 30, 2020, the consolidated balance sheets included $294.3 million and $246.2 million, respectively, of multi-family rental assets.

The accounting policies of the reporting segments are described throughout Note A included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2020. Financial information relating to the Company’s reporting segments is as follows:
December 31, 2020
HomebuildingForestar (1)Financial ServicesOtherEliminations and Other Adjustments (2)Consolidated
(In millions)
Assets
Cash and cash equivalents
$2,129.3 $237.4 $65.3 $22.9 $ $2,454.9 
Restricted cash
10.8  9.0 0.2  20.0 
Inventories:
     Construction in progress and finished homes
6,665.1    (66.3)6,598.8 
     Residential land and lots — developed and under development5,407.3 1,484.9   (36.1)6,856.1 
     Land held for development
42.3 55.5    97.8 
     Land held for sale
23.8     23.8 

12,138.5 1,540.4   (102.4)13,576.5 
Mortgage loans held for sale
  1,438.9   1,438.9 
Deferred income taxes, net
142.6    (0.6)142.0 
Property and equipment, net
388.3 1.9 3.7 359.1 (4.6)748.4 
Other assets
1,121.7 29.4 121.5 56.5 (92.9)1,236.2 
Goodwill
134.3    29.2 163.5 
$16,065.5 $1,809.1 $1,638.4 $438.7 $(171.3)$19,780.4 
Liabilities
Accounts payable
$786.4 $42.2 $ $17.0 $ $845.6 
Accrued expenses and other liabilities
1,741.6 218.8 101.0 10.9 (133.4)1,938.9 
Notes payable
2,606.2 654.1 969.1  (3.8)4,225.6 
$5,134.2 $915.1 $1,070.1 $27.9 $(137.2)$7,010.1 
______________
(1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.
(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2020




September 30, 2020
HomebuildingForestar (1)Financial ServicesOtherEliminations and Other Adjustments (2)Consolidated
(In millions)
Assets
Cash and cash equivalents
$2,551.1 $394.3 $55.6 $17.5 $ $3,018.5 
Restricted cash
9.5  11.9 0.2  21.6 
Inventories:
     Construction in progress and finished homes
6,037.5    (53.4)5,984.1 
     Residential land and lots — developed and under development
4,901.4 1,304.3   (33.9)6,171.8 
     Land held for development
47.8 5.4    53.2 
     Land held for sale
28.3     28.3 

11,015.0 1,309.7   (87.3)12,237.4 
Mortgage loans held for sale
  1,529.0   1,529.0 
Deferred income taxes, net
142.3    2.6 144.9 
Property and equipment, net
372.8 1.1 3.9 308.9 (3.0)683.7 
Other assets
996.4 34.8 125.8 52.8 (96.1)1,113.7 
Goodwill
134.3    29.2 163.5 
$15,221.4 $1,739.9 $1,726.2 $379.4 $(154.6)$18,912.3 
Liabilities
Accounts payable
$859.3 $29.2 $ $12.0 $ $900.5 
Accrued expenses and other liabilities
1,438.3 197.8 86.8 12.2 (128.1)1,607.0 
Notes payable
2,514.4 641.1 1,132.6  (4.8)4,283.3 
$4,812.0 $868.1 $1,219.4 $24.2 $(132.9)$6,790.8 
______________
(1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.
(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2020




Three Months Ended December 31, 2020
HomebuildingForestar (1)Financial ServicesOtherEliminations and Other Adjustments (2)Consolidated
(In millions)
Revenues
Home sales
$5,698.7 $ $ $ $ $5,698.7 
Land/lot sales and other
19.9 307.1  14.7 (294.2)47.5 
Financial services
  187.2   187.2 
5,718.6 307.1 187.2 14.7 (294.2)5,933.4 
Cost of sales
Home sales (3)4,325.1    (27.7)4,297.4 
Land/lot sales and other
13.8 262.5   (249.5)26.8 
Inventory and land option charges
7.9 0.4    8.3 
4,346.8 262.9   (277.2)4,332.5 
Selling, general and administrative expense
451.2 15.5 109.5 9.6 0.1 585.9 
Gain on sale of assets(13.1)  (0.9) (14.0)
Other (income) expense(1.5)(0.5)(6.4)3.8 (0.7)(5.3)
Income before income taxes$935.2 $29.2 $84.1 $2.2 $(16.4)$1,034.3 
Summary Cash Flow Information
Depreciation and amortization
$15.4 $0.1 $0.4 $4.4 $0.1 $20.4 
Cash (used in) provided by operating activities
$(269.2)$(158.7)$173.1 $1.2 $1.5 $(252.1)
______________
(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.
(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
(3)Amount in the Eliminations and Other Adjustments column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.



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D.R. HORTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) – (Continued)
December 31, 2020




Three Months Ended December 31, 2019
HomebuildingForestar (1)Financial ServicesOtherEliminations and Other Adjustments (2)Consolidated
(In millions)
Revenues
Home sales
$3,863.3 $ $ $ $ $3,863.3 
Land/lot sales and other
19.7 247.2  8.8 (221.2)54.5 
Financial services
  102.9   102.9 
3,883.0 247.2 102.9 8.8 (221.2)4,020.7 
Cost of sales
Home sales (3)3,051.6    (6.7)3,044.9 
Land/lot sales and other
13.3 216.3   (194.1)35.5 
Inventory and land option charges
3.5 0.3    3.8 
3,068.4 216.6   (200.8)3,084.2 
Selling, general and administrative expense
358.4 10.5 77.9 8.8 0.2 455.8 
Loss (gain) on sale of assets 0.1  (31.2) (31.1)
Other (income) expense(5.4)(2.2)(5.5)1.6  (11.5)
Income before income taxes$461.6 $22.2 $30.5 $29.6 $(20.6)$523.3 
Summary Cash Flow Information
Depreciation and amortization
$16.5 $0.1 $0.4 $1.9 $0.1 $19.0 
Cash (used in) provided by operating activities
$(178.4)$(11.7)$83.5 $3.9 $(11.1)$(113.8)
______________
(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.
(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.
(3)Amount in the Eliminations and Other Adjustments column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.