The Company ended the quarter with $961.3 million of homebuilding unrestricted cash and marketable securities and net homebuilding debt to total capital of 18.9%. Net homebuilding debt to total capital consists of homebuilding notes payable net of cash and marketable securities divided by total equity plus homebuilding notes payable net of cash and marketable securities.

The Company expects stronger closings and profitability in the second half of the fiscal year, consistent with traditional seasonal trends. Its current expectation for home sales gross margin is that it will remain in the mid-16% to mid-17% range. Homebuilding SG&A expense is expected to increase in the third and fourth fiscal quarters due to variable components; however, homebuilding SG&A as a percentage of homebuilding revenues should improve as the Company closes more homes and continues to leverage its fixed cost structure. Additionally, if the Company’s current business trends continue, it expects to be out of its three-year cumulative loss position before the end of the fiscal year. The Company may be able to significantly reduce the valuation allowance for its deferred tax asset at some point in the next few quarters if its business, the homebuilding industry and economic conditions remain stable.

The Company has declared a quarterly cash dividend of $0.0375 per share. The dividend is payable on May 22, 2012 to stockholders of record on May 8, 2012.

Donald R. Horton, Chairman of the Board, said, “Our homebuilding and financial services segments delivered strong operating results in our second quarter, and our strong sales pace has continued through the first half of April. Each of our regions reported increases in sales and pre-tax income compared to last year. Our net income in the second quarter increased 46%, and our sales, closings and backlog all increased year-over-year by double-digit percentages. Our homes closed increased 21% from the year ago quarter, while homebuilding SG&A only increased 3% as we leveraged our fixed cost structure. We ended the quarter with almost $1 billion in homebuilding cash and marketable securities, even after increasing our homes in inventory and investing in land and lots. These results reflect that we are using our strong operating position to profitably grow our business in the current housing environment.”

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