Horton D R Inc/DE – ‘424B1’ on 3/11/97

As of:  Tuesday, 3/11/97   ·   Accession #:  950109-97-2099   ·   File #:  333-21183

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Prospectus   —   Rule 424(b)(1)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Final Prospectus                                      31    195K 

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                                              Filed pursuant to Rule 424(b)(1)
                                                        SEC File No. 333-21183
PROSPECTUS                                                                      

3,500,000 SHARES      
D.R. HORTON, INC. 

CUSTOM HOMES  
COMMON STOCK  
------------  

All of the 3,500,000 shares of Common Stock offered hereby (the "Offering") 
are being sold by D.R. Horton, Inc. (the "Company").                            

The Common Stock is listed on the New York Stock Exchange under the symbol  
"DHI." The last reported sale price of the Common Stock on the New York Stock   
Exchange Composite Tape was $11 1/2 per share on March 10, 1997. See "Price     
Range of Common Stock."                                                         

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS  
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK         
OFFERED HEREBY.                                                                 

------------  

THESE  SECURITIES HAVE NOT  BEEN APPROVED OR  DISAPPROVED BY THE  SECURITIES  
AND EXCHANGE  COMMISSION OR ANY STATE SECURITIES COMMISSION NOR  HAS THE  
SECURITIES   AND  EXCHANGE  COMMISSION   OR  ANY  STATE   SECURITIES  
COMMISSION  PASSED  UPON  THE   ACCURACY  OR  ADEQUACY  OF  THIS  
PROSPECTUS. ANY REPRESENTATION                                
TO THE CONTRARY IS A CRIMINAL OFFENSE.  

------------------------------------------------------------------------------- 
------------------------------------------------------------------------------- 

                                                                [Download Table]

                                                       UNDERWRITING             
                                           PRICE TO   DISCOUNTS AND  PROCEEDS TO
                                            PUBLIC    COMMISSIONS(1) COMPANY(2) 
--------------------------------------------------------------------------------
                                                                                
Per Share...............................    $11.00        $0.51        $10.49   
--------------------------------------------------------------------------------
Total(3)................................  $38,500,000   $1,785,000   $36,715,000

------------------------------------------------------------------------------- 
------------------------------------------------------------------------------- 
(1) For information regarding indemnification of the Underwriters, see          
"Underwriting."                                                         

(2) Before deducting estimated expenses of $330,000 payable by the Company.     

(3) The Company has granted to the Underwriters a 30-day option to purchase up  
to 525,000 additional shares of Common Stock on the same terms as set   
forth above solely to cover over-allotments, if any. See "Underwriting."
If such option is exercised in full, the total Price to Public,         
Underwriting Discounts and Commissions and Proceeds to Company will be  
$44,275,000, $2,052,750 and $42,222,250, respectively.                  

------------  

The shares of Common Stock are being offered by the several Underwriters    
named herein, subject to prior sale, when, as and if delivered to and accepted  
by them and subject to certain conditions. It is expected that the shares of    
Common Stock offered hereby will be available for delivery on or about March    
14, 1997, at the office of Smith Barney Inc., 333 West 34th Street, New York,   
New York 10001, or through the facilities of The Depository Trust Company.      

------------  

SMITH BARNEY INC.                                                               
DONALDSON, LUFKIN & JENRETTE                    
SECURITIES CORPORATION        
       MERRILL LYNCH & CO.
                                                          SALOMON BROTHERS INC

March 10, 1997                                                                  

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The pictures below are representative of homes built by the Company.            
Charlotte, North Carolina           Dallas-Fort Worth, Texas                    
Suburban Washington D.C.            Phoenix, Arizona                            

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS   
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,     
INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING            
TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,   
SEE "UNDERWRITING."                                                             

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed     
information and financial statements appearing elsewhere or incorporated by     
reference in this Prospectus. As used in this Prospectus, except as the context 
otherwise requires, references to D.R. Horton, Inc. and its subsidiaries        
(collectively, the "Company"), and the financial and operating data contained   
in this Prospectus reflect the consolidated results of such entities for the    
periods indicated. All share and per share data included or incorporated by     
reference herein have been adjusted to reflect the Company's 9% stock dividend  
of June 1995, seven-for-five stock split of September 1995 and 8% stock         
dividend of May 1996. Unless otherwise indicated, information set forth herein  
assumes no exercise of the Underwriters' over-allotment option.                 

THE COMPANY 

The Company is a national homebuilder constructing and selling single-family
homes in metropolitan areas of the Mid-Atlantic, Midwest, Southeast, Southwest  
and Western regions of the United States. The Company builds homes in 27        
markets and believes that it is one of only three public homebuilders with      
operations in 21 or more states. The Company offers high-quality homes with     
custom features, designed principally for the entry-level and move-up market    
segments. The Company's homes generally range in size from 1,000 to 5,000       
square feet and in price from $80,000 to $600,000, with an average selling      
price of $166,600 for the year ended September 30, 1996, and $168,700 for the   
three months ended December 31, 1996.                                           

In fiscal 1996, the Company recorded its tenth consecutive year of record   
revenues, earnings and sales backlog. The Company's revenues have increased     
from $393.3 million in fiscal 1994 to $547.3 million in fiscal 1996, a compound 
annual growth rate of 18%. Over this same period, net income has increased from 
$17.7 million to $27.4 million, a 25% compound annual growth rate. Homes closed 
by the Company have increased from 2,360 in fiscal 1994 to 3,284 in fiscal      
1996.                                                                           

Revenues increased 19%, to $144.4 million from $121.1 million for the three 
months ended December 31, 1996, compared to the same period in 1995. The sales  
value of net new contracts signed by the Company increased 12%, to $129.8       
million (751 homes) compared to $115.4 million (699 homes) for the comparable   
period in 1995. At December 31, 1996, the Company's backlog of homes under      
contract totaled $223.5 million (1,208 homes), a 35% increase from $165.0       
million (968 homes) at December 31, 1995. Net income for the three months ended 
December 31, 1996, increased 26%, to $6.8 million ($0.21 per share), from $5.4  
million ($0.19 per share), for the same quarter of 1995.                        

OPERATING STRATEGY

The Company attributes its success to its proven operating strategy, which  
focuses on the following elements:                                              

Geographic Diversification. The Company is one of the most geographically   
diversified homebuilders in the United States, with operating divisions in 21   
states and 27 markets, as follows:                                              

                                                        [Enlarge/Download Table]

GEOGRAPHIC REGION                                     MARKETS                             
-----------------                                     -------                             
                                                                                          
Mid-Atlantic............ Charlotte, Greensboro, Greenville, North Central New Jersey,     
                         Raleigh/Durham, Suburban Washington, D.C.                        
Midwest................. Chicago, Cincinnati, Kansas City, Minneapolis/St. Paul, St. Louis
Southeast............... Atlanta, Birmingham, Nashville, Orlando, Pensacola, South Florida
Southwest............... Albuquerque, Austin, Dallas/Fort Worth, Houston, Phoenix         
Western................. Denver, Las Vegas, Los Angeles, Salt Lake City, San Diego        

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The Company believes that its diversification strategy mitigates the effects
of local and regional economic cycles and enhances its growth potential.        

New Markets/Acquisitions. While the Company believes that there are         
significant growth opportunities in its existing markets, it intends to         
continue to evaluate new markets for entry that have significant entry-level    
and move-up segments and satisfy the Company's profitability, investment return 
and other criteria. Since October 1, 1992, the Company has expanded into 15 new 
markets through start-up operations and has completed complementary             
acquisitions that have expanded the Company into four additional markets.       
Additionally, the Company recently completed the acquisition of the Torrey      
Group of Companies ("Torrey"), the largest builder in the rapidly growing       
Atlanta, Georgia market. See "The Torrey Acquisition." The Company believes     
that the expansion of its operations through the selective acquisition of       
existing homebuilding companies can afford it several benefits not found in     
start-up operations.                                                            

Before entering new markets, the Company evaluates their potential on the   
basis of local housing demand, demographic trends and other factors, such as    
local growth initiatives, employment demand and growth, and the availability of 
quality lots and undeveloped real estate at reasonable prices. Typically, the   
Company will not invest significant amounts in real estate, including raw land, 
developed lots, models and speculative homes, or overhead in start-up           
operations in new markets until such markets demonstrate significant growth     
potential and acceptance of the Company and its products.                       

In evaluating potential acquisition candidates, the Company seeks           
homebuilding companies that have an excellent reputation, a track record of     
profitability and a strong management team. Typically, the Company endeavors to 
limit the risks associated with acquiring an existing homebuilding company by   
conducting extensive operational, financial and legal due diligence on each     
acquisition candidate and by only acquiring homebuilding companies that the     
Company believes should have an immediate positive impact on the Company's      
earnings.                                                                       

Market Focus-Custom Features. The Company typically positions itself in its 
markets between large volume homebuilders and local custom builders by offering 
a broader selection of homes with more amenities and greater design flexibility 
than homes offered by volume builders, at prices that are generally more        
affordable than those charged by local custom builders. The Company also is     
able to customize its designs to deliver personalized homes to its customers.   
While most design modifications are significant to the homebuyer, such changes  
improve margins and typically involve relatively minor adjustments that allow   
the Company to maintain the efficiencies of a volume homebuilder. The Company   
believes that its ability to cater to the design tastes of prospective          
homebuyers at competitive prices, even at the entry level, distinguishes it     
from many of its competitors.                                                   

Decentralized Operations. The Company's homebuilding activities are         
decentralized to give maximum flexibility to its local division managers. The   
Company believes that division management is more informed to make decisions    
regarding local operations. Each operating division is responsible for          
preliminary site selection, negotiation of option contracts, and overseeing     
land development activities. Additionally, each operating division plans its    
homebuilding schedule, selects the building plans and architectural scheme for  
its subdivisions, obtains all building approvals, and develops a marketing plan 
for its homes. The Company's corporate office retains oversight and             
responsibility for final approval of all land and lot acquisitions, inventory   
levels, financing arrangements, accounting and management reporting, payment of 
subcontractor invoices, payroll and employee benefits.                          

Cost Management. The Company strives to control its overhead costs by       
centralizing the administrative and accounting functions and by limiting the    
number of field administrative personnel and middle level management positions. 
The Company attempts to control construction costs through the efficient design 
of its homes and obtaining favorable pricing from certain subcontractors based  
on the high volume of work performed                                            

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for the Company. The Company's management information systems also assist in    
controlling construction costs, overhead and capital by allowing management to  
monitor construction expenditures on a home-by-home basis and the composition   
and level of inventory on a subdivision basis.                                  

Limited Real Estate Exposure. The Company attempts to minimize the risks    
associated with land ownership while maximizing its return on invested capital  
by acquiring developed building lots pursuant to lot option contracts,          
generally on a non-recourse basis, after all zoning and other governmental      
entitlements and approvals are obtained. The Company attempts to control a two  
to four year supply of building lots based on current and expected absorption   
rates. The Company also pursues selected land acquisition and development       
opportunities to augment its inventory of option building lots and to maximize  
profit opportunities. These acquisitions are generally limited to smaller       
tracts of entitled land that will yield 50 to 150 lots when developed. By       
limiting its land acquisition and development activities generally to smaller   
parcels of land, the Company reduces the financial and market risks associated  
with owning land during the development period.                                 

THE TORREY ACQUISITION

 On January 29, 1997, the Company entered into a stock purchase agreement (the
"Stock Purchase Agreement") for the acquisition of the entities comprising      
Torrey (the "Torrey Acquisition"). The Company completed the Torrey Acquisition 
on February 27, 1997. Under the terms of the Stock Purchase Agreement, the      
Company paid at closing consideration consisting of $28.5 million in cash and   
844,444 shares of Common Stock, and agreed to a contingent payment estimated at 
$1 million, for all of the outstanding capital stock of the entities comprising 
Torrey. The Company also assumed and refinanced approximately $89 million of    
indebtedness, other obligations and minority interests.                         

Torrey has been the leading builder of single-family homes in the large and 
growing Atlanta, Georgia market for the past three years as reported in Builder 
Magazine. Atlanta has been the largest housing market in the United States for  
the past three years based on single-family building permits issued. Torrey     
targets both entry-level and first time move-up buyers. For the twelve months   
ended September 30, 1996, Torrey delivered 1,442 homes, generating $183.8       
million of revenue. In addition to building homes in the Atlanta market, Torrey 
has homebuilding operations in Charlotte and Raleigh/Durham, North Carolina,    
and Greenville, South Carolina. Despite Torrey's leading market share position  
in the Atlanta market, the Company believes that it can improve Torrey's        
operating results by providing additional and lower cost capital and operating  
synergies.                                                                      

The Company believes that the Torrey Acquisition is consistent with its     
strategy of selectively pursuing acquisitions of homebuilders that have an      
excellent reputation, a track record of profitability and a strong management   
team.                                                                           

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THE OFFERING

Total Common Stock                                                              
offered....................  3,500,000 shares                                 

Common Stock to be                                                              
outstanding after the                                                         
Offering...................                                                   

New York Stock Exchange       36,760,173 shares(1)                              
Symbol.....................  DHI                                              
Use of proceeds.............  The net proceeds to the Company from the Offering 
                            will be used to temporarily repay indebtedness
                       under revolving credit facilities and for
         general corporate purposes.

--------                                                                        
(1) Does not reflect 2,372,756 additional shares of Common Stock subject to     
  outstanding options as of December 31, 1996 pursuant to the Company's 1991
Stock Incentive Plan (the "Stock Option Plan").                         

RISK FACTORS

Investment in the Common Stock involves certain risks discussed under "Risk 
Factors" that should be considered by prospective investors.                    

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SUMMARY FINANCIAL INFORMATION 
(DOLLARS IN THOUSANDS, EXCEPT NET INCOME PER SHARE AMOUNTS) 

                                                        [Enlarge/Download Table]

                                FOR THE FISCAL YEARS ENDED           FOR THE THREE MONTHS ENDED    
                                      SEPTEMBER 30,                         DECEMBER 31,           
                          ----------------------------------------- -------------------------------
                                                         PRO FORMA                       PRO FORMA 
                                                            AS                              AS     
                                                        ADJUSTED(1)                     ADJUSTED(1)
                            1994      1995      1996       1996       1995      1996       1996    
                          --------  --------  --------  ----------- --------  --------  -----------
                                                                                                   
INCOME STATEMENT DATA:                                                                             
 Revenues...............  $393,317  $437,388  $547,336   $780,438   $121,068  $144,381   $214,891  
 Gross profit...........    67,218    77,646    98,282    144,610     21,533    26,345     38,651  
 Income before income                                                                              
  taxes.................    28,591    32,557    44,432     69,407      8,725    11,159     14,663  
 Net income.............  $ 17,663  $ 20,539  $ 27,379   $ 42,614   $  5,415  $  6,807   $  8,945  
 Net income per share...  $   0.63  $   0.74  $   0.87   $   1.19   $   0.19  $   0.21   $   0.24  
 Weighted average number                                                                           
  of common shares (in                                                                             
  thousands)............    27,845    27,849    31,420     35,764     28,250    33,003     37,347  
SELECTED OPERATING DATA:                                                                           
 Gross profit margin....      17.1%     17.8%     18.0%      18.5%      17.8%     18.2%      18.0% 
 Number of homes                                                                                   
  closed................     2,360     2,474     3,284      5,037        731       855      1,333  
 New sales orders, net                                                                             
  (homes)(2)............     2,327     2,553     3,488      5,150        699       751      1,102  
 New sales orders, net                                                                             
  ($ value)(2)..........  $394,587  $449,260  $585,489   $826,214   $115,363  $129,776   $179,954  
 Sales backlog at end of                                                                           
  period (homes)(3).....       773     1,000     1,204      1,712        968     1,208      1,499  
 Sales backlog at end of                                                                           
  period ($ value)(3)...  $140,524  $170,736  $208,888   $297,572   $165,030  $223,474   $267,392  

                                                                [Download Table]

                                                        AS OF DECEMBER 31, 1996  
                                                        -------------------------
                                                                     PRO FORMA   
                                                                         AS      
                                                          ACTUAL     ADJUSTED(4) 
                                                        ----------- -------------
                                                                                 
BALANCE SHEET DATA:                                                              
 Inventories........................................... $   400,453  $   497,037 
 Total assets..........................................     445,854      567,300 
 Total debt............................................     203,200      265,249 
 Stockholders' equity..................................     184,780      228,480 

--------                                                                        

(1) Pro forma to reflect the acquisitions of the assets of Trimark Communities, 
LLC ("Trimark") and SGS Communities, Inc. ("SGS"), which were both      
completed during the first quarter of fiscal 1997, and the Torrey       
 Acquisition, which was completed in the second quarter of fiscal 1997, as
   if such acquisitions had occurred on the first day of each reported period.
 See "Unaudited Pro Forma Financial Data." As adjusted to reflect the sale
 of 3,500,000 shares of Common Stock offered hereby by the Company and the
application of the net proceeds therefrom to temporarily reduce         
indebtedness under the Company's revolving credit facilities.           
(2) Represents homes placed under contract during the period, net of            
cancellations. See "Business--Marketing and Sales."                     
(3) Represents homes under contract but not yet closed at the end of the        
period. See "Business--Marketing and Sales."                            

(4) Pro forma to reflect the Torrey Acquisition and the sale of 3,500,000       
   shares of Common Stock offered hereby by the Company and the application of
the net proceeds therefrom to temporarily reduce indebtedness under the 
Company's revolving credit facilities.                                  

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RISK FACTORS  

In addition to the other information contained or incorporated by reference 
in this Prospectus, prospective investors should carefully consider the         
factors set forth below before purchasing any shares of Common Stock offered    
hereby.                                                                         

General Real Estate, Economic and Other Conditions. The homebuilding        
industry is cyclical and is significantly affected by changes in general and    
local economic conditions, such as employment levels, availability of           
financing for homebuyers, interest rates, consumer confidence and housing       
demand. In addition, homebuilders are subject to various risks, including       
competitive overbuilding, availability and cost of building lots, materials     
and labor, weather conditions, delays in construction schedules, cost           
overruns, changes in governmental regulation and increases in real estate       
taxes and other local government fees. Moreover, homebuilders are subject to    
the risks associated with natural disasters such as hurricanes, earthquakes,    
and fires. The Company and its competitors also are impacted by comprehensive   
local, state and Federal statutes and rules regulating environmental matters,   
zoning, building design and density requirements, as they affect the            
availability and cost of building lots and the timing of homebuilding           
activities.                                                                     

Interest Rates; Mortgage Financing. Virtually all purchasers of the         
Company's homes finance their acquisitions through third-party lenders          
providing mortgage financing. In general, housing demand is adversely affected  
by increases in interest rates, decreasing availability of mortgage financing,  
increasing housing costs and unemployment. If mortgage interest rates increase  
and the ability of prospective buyers to finance home purchases is adversely    
affected, the Company's operating results may be negatively impacted. The       
Company's homebuilding activities also are dependent upon the availability and  
cost of mortgage financing for buyers of homes owned by potential customers so  
those customers can sell their existing homes and purchase a home from the      
Company. In addition, the Company believes that the availability of Federal     
Housing Administration and Veterans Administration mortgage financing is an     
important factor in marketing many of its homes. Any limitations or             
restrictions on the availability of such financing could adversely affect the   
Company's sales. See "Business--Customer Financing."                            

Competition. The homebuilding industry is highly competitive and fragmented.
Homebuilders compete not only for homebuyers, but also for desirable            
properties, financing, raw materials and skilled labor. The Company competes    
with other local, regional and national homebuilders, often within larger       
subdivisions designed, planned and developed by such homebuilders. Some of the  
Company's competitors have longer operating histories and greater financial,    
marketing and sales resources than the Company, including, in some instances,   
affiliated mortgage companies.                                                  

Future Capital Requirements. The Company's operations require significant   
amounts of cash, and the Company will be required to seek additional capital    
for the future growth and development of its business. There can be no          
assurance as to the terms or availability of such additional capital. If the    
Company is not successful in obtaining sufficient capital on favorable terms,   
it could result in a reduction in sales and may adversely affect the Company's  
future growth or results of operations. See "Management's Discussion and        
Analysis of Results of Operations and Financial Condition."                     

Acquisitions. From April 1994, through the present, the Company has acquired
six homebuilding companies, including the Torrey Acquisition completed on       
February 27, 1997. In the future, the Company intends to seek to acquire        
additional homebuilding companies. Subsequent to the acquisitions, the          
previous owners of the acquired companies normally continue to manage their     
operations as subsidiaries of the Company. Although the Company believes that   
it has successfully integrated the companies it has previously acquired into    
its operations without substantial costs, delays or other problems, there is    
no assurance that the Company will be able to successfully integrate the        
operations of Torrey and any future acquisitions of homebuilding companies. In  
addition, while the Company believes that its management has been effective in  
overseeing the combined operations of the Company and its acquisitions, there   
can be no assurance that the Company will be able to implement successfully     
its operating and growth strategies in each of its markets. Finally, there can  
be no                                                                           

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assurance that the pace of the Company's acquisitions will not adversely        
affect the Company's efforts to integrate acquisitions and manage the acquired  
companies profitably.                                                           

Control Relationships. Donald R. Horton and other affiliates of the Company 
will own, directly or indirectly, approximately 39.69% of the Company's         
outstanding Common Stock after giving effect to the Offering (39.14% if the     
Underwriters' over-allotment option is exercised in full). Accordingly, such    
persons may effectively be able to elect the entire board of Directors of the   
Company and control its management, operations and affairs. Donald R. Horton,   
along with his children and certain family trusts of which he and his wife and  
children are the beneficiaries, will own approximately 34.00% of the Company's  
outstanding Common Stock after giving effect to the Offering (33.53% if the     
Underwriters' over-allotment option is exercised in full).                      

USE OF PROCEEDS 

The net proceeds to the Company from the sale of the shares of Common Stock 
in the Offering will be approximately $36.4 million ($41.9 million if the       
Underwriters' over-allotment option is exercised in full). The Company intends  
to use the proceeds from the Offering to temporarily repay indebtedness under   
revolving credit facilities and for general corporate purposes. See             
"Management's Discussion and Analysis of Results of Operations and Financial    
Condition--Financial Condition, Liquidity and Capital Resources." Borrowings    
under the Company's various credit facilities bear interest at effective rates  
ranging from LIBOR plus 1 1/4% to LIBOR plus 2%.                                

PRICE RANGE OF COMMON STOCK 

The Company's Common Stock is listed on the New York Stock Exchange under   
the symbol "DHI." The following table sets forth the high and low sale prices   
for the Common Stock for the periods indicated, as reported on the Nasdaq       
National Market (through December 13, 1995) and the New York Stock Exchange     
(on and after December 14, 1995).                                               

                                                                [Download Table]

                                                               FISCAL YEAR 1997
                             FISCAL YEAR       FISCAL YEAR         (THROUGH    
                                1995               1996        MARCH 10, 1997) 
                          ----------------- ------------------ ----------------
                            HIGH      LOW     HIGH      LOW      HIGH     LOW  
                          --------- ------- --------- -------- -------- -------
                                                                               
Quarter ended December                                                         
 31.....................  $ 8 5/16  $5 3/8  $11       $8 15/16 $ 11 3/8 $8 5/8 
Quarter ended March 31..    6 5/16   5 5/16  11 15/16  8 15/16  13      10 1/8 
Quarter ended June 30...    8 15/16  6 9/16  10 5/8    8 5/8                   
Quarter ended September                                                        
 30.....................   10 1/2    8 1/2   10 3/8    7 1/2                   

As of March 7, 1997, there were 197 holders of record of the Common Stock.  
On March 10, 1997, the last sale price reported on the New York Stock Exchange  
Composite Tape for the Common Stock was $11 1/2.                                

DIVIDEND POLICY 

Declarations of cash dividends are within the discretion of the Board of    
Directors and are dependent upon various factors, including the earnings, cash  
flow, capital requirements and operating and financial condition of the         
Company. Other than as required to maintain the financial ratios and net worth  
requirements under the Company's revolving credit facilities, there are no      
restrictions on payments of cash dividends by the Company. On January 20,       
1997, the Company declared a cash dividend of $.02 per outstanding share of     
Common Stock, its first cash dividend since its initial public offering. The    
Company intends to pay an annual cash dividend, payable quarterly on            
outstanding shares of Common Stock.                                             

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CAPITALIZATION  

The following table sets forth the capitalization of the Company at December
31, 1996, with pro forma adjustments to reflect the acquisition of Torrey as    
if such acquisition had occurred on December 31, 1996, and as adjusted to       
reflect the Torrey Acquisition and the sale by the Company of the Common Stock  
offered hereby and the application of the net proceeds therefrom. See "Use of   
Proceeds".                                                                      

                                                                [Download Table]

                                                    DECEMBER 31, 1996          
                                          -------------------------------------
                                                                   PRO FORMA   
                                           ACTUAL  PRO FORMA (1) AS ADJUSTED(2)
                                          -------- ------------- --------------
                                                 (DOLLARS IN THOUSANDS)        
                                                                               
Debt:                                                                          
  Notes Payable.......................... $203,200   $301,634       $265,249   
Stockholders' equity(3):                                                       
  Common Stock, par value $.01 per share;                                      
   100,000,000 shares authorized;                                              
   32,415,729 actual shares; 33,260,173                                        
   pro forma shares, and 36,760,173 pro                                        
   forma as adjusted shares, issued and                                        
   outstanding...........................      324        333            368   
  Additional capital.....................  160,049    167,355        203,705   
  Retained earnings......................   24,407     24,407         24,407   
                                          --------   --------       --------   
    Total stockholders' equity........... $184,780   $192,095       $228,480   
                                          ========   ========       ========   
    Total capitalization................. $387,980   $493,729       $493,729   
                                          ========   ========       ========   

--------                                                                        
(1) Pro forma to reflect the Torrey Acquisition as if such acquisition had      
occurred on December 31, 1996. See "Unaudited Pro Forma Consolidated    
Balance Sheets."                                                        

(2) As adjusted to reflect the Torrey Acquisition and the sale of 3,500,000     
shares of Common Stock offered hereby by the Company and the application
  of the net proceeds therefrom to temporarily reduce indebtedness under the
Company's revolving credit facilities.                                  
(3) Does not reflect 2,372,756 additional shares of Common Stock subject to     
 outstanding options as of December 31, 1996, pursuant to the Stock Option
Plan.                                                                   

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UNAUDITED PRO FORMA FINANCIAL DATA  
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)  

The unaudited Pro Forma Consolidated Statements of Operations of the Company
for the three months ended December 31, 1996, and for the fiscal year ended     
September 30, 1996, were prepared to illustrate the estimated effects of: (i)   
the acquisitions of the assets of Trimark and SGS, which were completed during  
the first quarter of fiscal 1997; (ii) the Torrey Acquisition, which was        
completed in the second quarter of fiscal 1997; and (iii) the sale of           
3,500,000 shares of Common Stock offered hereby by the Company and the          
application of the net proceeds therefrom to temporarily reduce indebtedness    
under the Company's revolving credit facilities, as if such acquisitions and    
Common Stock sale had occurred on the first day of each period.                 

The unaudited Pro Forma Consolidated Balance Sheets of the Company as of    
December 31, 1996, were prepared to illustrate the estimated effects of the     
Torrey Acquisition and the sale of the 3,500,000 shares of Common Stock         
offered by the Company.                                                         

The pro forma statements do not purport to represent either the actual      
financial position or results of operations of the Company had the pro forma    
transactions occurred on the dates assumed, or the results expected in the      
future. The pro forma adjustments are based upon available information and      
upon certain assumptions that management believes are reasonable. The notes to  
the unaudited Pro Forma Consolidated Statements of Operations and Balance       
Sheets provide a summary of the adjustments made in determining the pro forma   
amounts. The pro forma financial information should be read in conjunction      
with the historical financial statements of the Company, including the notes    
thereto, and the other financial information pertaining to the Company,         
including information set forth in "Capitalization" and the related notes       
thereto, included elsewhere or incorporated by reference into this Prospectus.  
The pro forma financial information is based upon the purchase method of        
accounting for the acquisitions of Trimark, SGS and Torrey.                     

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS 
THREE MONTHS ENDED DECEMBER 31, 1996  

                                                        [Enlarge/Download Table]

                                                                                                  PRO FORMA 
                           D.R.      TRIMARK             PRO FORMA     PRO FORMA                     AS     
                          HORTON   AND SGS (1) TORREY   ADJUSTMENTS   COMBINED(2) ADJUSTMENTS(3) ADJUSTED(3)
                         --------  ----------- -------  -----------   ----------- -------------- -----------
                                                                                                            
Revenues................ $144,381    $8,136    $62,374    $  --        $214,891       $ --        $214,891  
Cost of sales...........  118,036     6,287     53,079    (1,162)(5)    176,240         --         176,240  
                         --------    ------    -------    ------       --------       -----       --------  
Gross profit............   26,345     1,849      9,295     1,162         38,651         --          38,651  
Selling, general and                                                                                        
 administrative                                                                                             
 expenses...............   15,117       634      7,531       851 (6)     24,133         --          24,133  
                         --------    ------    -------    ------       --------       -----       --------  
Operating income........   11,228     1,215      1,764       311         14,518         --          14,518  
                         --------    ------    -------    ------       --------       -----       --------  
Other:                                                                                                      
 Interest (expense).....     (784)      --        (192)      --            (976)        705           (271) 
 Other                                                                                                      
  income/(expense)......      715      (207)        79      (171)(7)        416         --             416  
                         --------    ------    -------    ------       --------       -----       --------  
                              (69)     (207)      (113)     (171)          (560)        705            145  
                         --------    ------    -------    ------       --------       -----       --------  
Income before income                                                                                        
 taxes..................   11,159     1,008      1,651       140         13,958         705         14,663  
Provision for income                                                                                        
 taxes (4)..............    4,352       392        644        55          5,443         275          5,718  
                         --------    ------    -------    ------       --------       -----       --------  
Net income.............. $  6,807    $  616    $ 1,007    $   85       $  8,515       $ 430          8,945  
                         ========    ======    =======    ======       ========       =====       ========  
Net income per share.... $   0.21                                      $   0.25                   $   0.24  
                         ========                                      ========                   ========  
Weighted average number                                                                                     
 of common shares (in                                                                                       
 thousands).............   33,003                            844(8)      33,847       3,500         37,347  
                         ========                         ======       ========       =====       ========  

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS 
YEAR ENDED SEPTEMBER 30, 1996 

                                                        [Enlarge/Download Table]

                                                                                                  PRO FORMA 
                           D.R.     TRIMARK              PRO FORMA     PRO FORMA                     AS     
                          HORTON    AND SGS    TORREY   ADJUSTMENTS   COMBINED(2) ADJUSTMENTS(3) ADJUSTED(3)
                         ---------  --------  --------  -----------   ----------- -------------- -----------
                                                                                                            
Revenues................ $ 547,336  $ 49,274  $183,828    $   --       $780,438       $  --       $780,438  
Cost of sales...........   449,054    36,854   155,593     (4,725)(5)   636,776         (948)      635,828  
                         ---------  --------  --------    -------      --------       ------      --------  
Gross profit............    98,282    12,420    28,235      4,725       143,662          948       144,610  
Selling, general and                                                                                        
 administrative                                                                                             
 expenses...............    53,860     5,374    16,131      1,484(6)     76,849          --         76,849  
                         ---------  --------  --------    -------      --------       ------      --------  
Operating income........    44,422     7,046    12,104      3,241        66,813          948        67,761  
                         ---------  --------  --------    -------      --------       ------      --------  
Other:                                                                                                      
 Interest (expense).....    (1,474)      --        --         --         (1,474)       1,474           --   
 Other income/                                                                                              
  (expense).............     1,484      (413)     (594)     1,169(7)      1,646          --          1,646  
                         ---------  --------  --------    -------      --------       ------      --------  
                                10      (413)     (594)     1,169           172        1,474         1,646  
                         ---------  --------  --------    -------      --------       ------      --------  
Income before income                                                                                        
 taxes..................    44,432     6,633    11,510      4,410        66,985        2,422        69,407  
Provision for income                                                                                        
 taxes (4)..............    17,053     2,586     4,489      1,720        25,848          945        26,793  
                         ---------  --------  --------    -------      --------       ------      --------  
Net income.............. $  27,379  $  4,047  $  7,021    $ 2,690      $ 41,137       $1,477      $ 42,614  
                         =========  ========  ========    =======      ========       ======      ========  
Net income per share.... $    0.87                                     $   1.28                   $   1.19  
                         =========                                     ========                   ========  
Weighted average number                                                                                     
 of common shares (in                                                                                       
 thousands).............    31,420                            844(8)     32,264        3,500        35,764  
                         =========                        =======      ========       ======      ========  

--------                                                                        
The anticipated cost savings described below are based upon estimates and       
assumptions made by the Company that, although considered reasonable by the 
Company, are subject to business, economic and other uncertainties.         
(1) Reflects the estimated financial results from October 1, 1996, until the    
  dates of acquisition (October 15, 1996, for Trimark, and December 2, 1996,
for SGS). The results for Trimark and SGS subsequent to such dates are  
included in the Company's financial results.                            

(2) To reflect the estimated combined results of the Company, Trimark, SGS and  
Torrey.                                                                 

(3) To reflect the sale of the Common Stock to be issued in conjunction with    
 the Offering. The adjustments reflect reduction of previously capitalized
and expensed interest.                                                  
(4) Prior to their acquisition by the Company, Trimark, SGS and Torrey          
operated as S corporations under applicable provisions of the Internal  
  Revenue Code of 1986, as amended, and taxable income was taxed directly to
their stockholders. For pro forma purposes, income taxes are provided at
the Company's estimated incremental tax rate.                           

                                                                [Download Table]

                                                             THREE              
                                                             MONTHS             
                                                             ENDED    YEAR ENDED
                                                            DECEMBER  SEPTEMBER 
                                                            31, 1996   30, 1996 
                                                            --------  ----------
                                                                                
(5)Adjustments to cost of sales are:                                            
   Net financing costs of incremental debt incurred to                          
    finance acquisitions................................... $   331   $ 1,661   
   Reclassification of capitalized inventory costs to                           
    conform to Company accounting policies.................  (1,317)   (6,153)  
   Reduction in warranty insurance costs paid to third                          
    parties................................................     (76)     (233)  
   Reduction in employee benefit costs.....................    (100)      --    
                                                            -------   -------   
     Total adjustments to cost of sales.................... $(1,162)  $(4,725)  
                                                            =======   =======   
(6)Adjustments to selling, general and administrative                           
 expenses are:                                                                  
   Reductions in salaries and related employee benefits.... $  (583)  $(5,116)  
   Reductions in overhead items such as: insurance, audit,                      
    bank charges, referral fees, autos, telephone, etc.,                        
    consistent with Company policies, net of capitalized                        
    items expensed under Company accounting policies.......    (105)     (483)  
   Amortization of excess of cost over net assets acquired                      
    over 20 years..........................................     222       930   
   Reclassification of capitalized inventory costs to                           
    conform to Company accounting policies.................   1,317     6,153   
                                                            -------   -------   
     Total adjustments to selling, general and                                  
      administrative expenses.............................. $   851   $ 1,484   
                                                            =======   =======   

(7) To eliminate earnings of minority interests purchased in the Torrey         
Acquisition.                                                            
(8) Common Stock issued as consideration in the Torrey Acquisition.             

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UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS 
DECEMBER 31, 1996 

                                                        [Enlarge/Download Table]

                          D.R. HORTON,            PRO FORMA     PRO FORMA                    PRO FORMA   
                              INC.      TORREY  ADJUSTMENTS(1) COMBINED(2) ADJUSTMENTS(3) AS  ADJUSTED(4)
                          ------------ -------- -------------- ----------- -------------- ---------------
                                                                                                         
         ASSETS                                                                                          
Cash....................    $ 15,125   $  4,903    $(4,903)     $ 15,125      $    --        $ 15,125    
Inventories.............     400,453     94,184      2,400       497,037           --         497,037    
Property and equipment                                                                                   
 (net)..................       5,754      4,949        921        11,624           --          11,624    
Earnest money deposits                                                                                   
 and other assets.......      18,940      2,195        --         21,135           --          21,135    
Excess of cost over net                                                                                  
 assets acquired (net)..       5,582        --      16,797        22,379           --          22,379    
                            --------   --------    -------      --------      --------       --------    
                            $445,854   $106,231    $15,215      $567,300      $    --        $567,300    
                            ========   ========    =======      ========      ========       ========    
      LIABILITIES                                                                                        
Accounts payable........    $ 33,434   $ 11,450    $   --       $ 44,884      $    --        $ 44,884    
Accrued expenses and                                                                                     
 customer deposits......      24,440      4,247        --         28,687           --          28,687    
Notes payable...........     203,200     67,847     30,587       301,634       (36,385)       265,249    
                            --------   --------    -------      --------      --------       --------    
                             261,074     83,544     30,587       375,205       (36,385)       338,820    
                            --------   --------    -------      --------      --------       --------    
Minority interests......         --       5,785     (5,785)          --            --             --     
                            --------   --------    -------      --------      --------       --------    
  STOCKHOLDERS' EQUITY                                                                                   
Preferred Stock, $.10                                                                                    
 par value, 30,000,000                                                                                   
 shares authorized, no                                                                                   
 shares issued..........         --         --         --            --            --             --     
Common Stock, $.01 par                                                                                   
 value, 100,000,000                                                                                      
 shares authorized,                                                                                      
 32,415,729 actual                                                                                       
 shares, 33,260,173 pro                                                                                  
 forma shares, and                                                                                       
 36,760,173 pro forma as                                                                                 
 adjusted shares, issued                                                                                 
 and outstanding........         324        --           9           333            35            368    
Additional capital......     160,049        --       7,306       167,355        36,350        203,705    
Retained earnings.......      24,407     16,902    (16,902)       24,407           --          24,407    
                            --------   --------    -------      --------      --------       --------    
                             184,780     16,902     (9,587)      192,095        36,385        228,480    
                            --------   --------    -------      --------      --------       --------    
                            $445,854   $106,231    $15,215      $567,300      $    --        $567,300    
                            ========   ========    =======      ========      ========       ========    

--------                                                                        
(1) To reflect the Torrey Acquisition for $28.5 million in cash, 844,444        
shares of Common Stock, a contingent payment of $1 million, and the     
assumption and refinancing of approximately $89 million in liabilities, 
other obligations and minority interests. Adjustments to balance sheets 
are as follows:                                                         

                                                                [Download Table]
                                                                           
Net increase in inventory to fair market value...................... $2,400
Adjust building to appraised value..................................    921
Increase in notes payable to finance goodwill and net assets........ 30,587

(2) To reflect the combined financial position of the Company and Torrey, as    
if the Torrey Acquisition had occurred on December 31, 1996. A Common   
 Stock price of $11.25 per share, the maximum valuation under the terms of
the Stock Purchase Agreement, was used with a discount to reflect its   
restricted nature.                                                      

(3) To reflect the effects of the sale of 3,500,000 shares of Common Stock      
offered hereby by the Company and the application of the net proceeds   
  therefrom to temporarily reduce indebtedness under the Company's revolving
credit facilities, as if such Common Stock sale had occurred on December
31, 1996.                                                               

(4) To reflect the combined financial position of the Company and Torrey, the   
 effects of the sale of 3,500,000 shares of Common Stock offered hereby by
the Company and the application of the net proceeds therefrom to        
temporarily reduce indebtedness under the Company's revolving credit    
facilities, as if such combination and Common Stock sale had occurred on
December 31, 1996.                                                      

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SELECTED FINANCIAL INFORMATION  
(DOLLARS IN THOUSANDS, EXCEPT NET INCOME PER SHARE AMOUNTS) 

The following selected financial data (except for the selected operating    
data) are derived from the Consolidated Financial Statements of the Company.    
The Company's Consolidated Financial Statements as of and for each of the       
three years ended September 30, 1996, have been audited by Ernst & Young LLP,   
independent auditors. The selected financial information of the Company as of   
December 31, 1995 and 1996, and for each of the three month periods then        
ended, have been derived from unaudited financial statements, which, in the     
opinion of management, include all adjustments (consisting of only normal       
recurring adjustments) necessary for a fair presentation of such information    
for the unaudited interim periods. The selected financial data should be read   
in conjunction with "Management's Discussion and Analysis of Results of         
Operations and Financial Condition" and the Company's Consolidated Financial    
Statements, including the related notes thereto, incorporated by reference in   
this Prospectus.                                                                

                                                                [Download Table]

                                       FOR THE                   FOR THE       
                                     FISCAL YEARS             THREE MONTHS     
                                        ENDED                     ENDED        
                                    SEPTEMBER 30,             DECEMBER 31,     
                              ----------------------------  ------------------ 
                                1994      1995      1996      1995      1996   
                              --------  --------  --------  --------  -------- 
                                                                               
INCOME STATEMENT DATA:                                                         
  Revenues................... $393,317  $437,388  $547,336  $121,068  $144,381 
  Gross profit...............   67,218    77,646    98,282    21,533    26,345 
  Selling, general and                                                         
   administrative expenses...   39,073    44,549    53,860    12,513    15,117 
  Operating income...........   28,145    33,097    44,422     9,020    11,228 
  Interest and other income                                                    
   (expense).................      446      (540)       10      (295)      (69)
                              --------  --------  --------  --------  -------- 
  Income before income                                                         
   taxes.....................   28,591    32,557    44,432     8,725    11,159 
  Provision for income                                                         
   taxes.....................   10,928    12,018    17,053     3,310     4,352 
                              --------  --------  --------  --------  -------- 
  Net income................. $ 17,663  $ 20,539  $ 27,379  $  5,415  $  6,807 
                              ========  ========  ========  ========  ======== 
  Net income per share....... $   0.63  $   0.74  $   0.87  $   0.19  $   0.21 
                              ========  ========  ========  ========  ======== 
  Weighted average number of                                                   
   common shares (in                                                           
   thousands)................   27,845    27,849    31,420    28,250    33,003 
                              ========  ========  ========  ========  ======== 
SELECTED OPERATING DATA:                                                       
  Gross profit margin........     17.1%     17.8%     18.0%     17.8%     18.2%
  Number of homes closed.....    2,360     2,474     3,284       731       855 
  New sales orders, net                                                        
   (homes)(1)................    2,327     2,553     3,488       699       751 
  New sales orders, net ($                                                     
   value)(1)................. $394,587  $449,260  $585,489  $115,363  $129,776 
  Sales backlog at end of                                                      
   period (homes)(2).........      773     1,000     1,204       968     1,208 
  Sales backlog at end of                                                      
   period ($ value)(2)....... $140,524  $170,736  $208,888  $165,030  $223,474 

                                                                [Download Table]

                                              AS OF                  AS OF      
                                          SEPTEMBER 30,          DECEMBER 31,   
                                    -------------------------- -----------------
                                      1994     1995     1996     1995     1996  
                                    -------- -------- -------- -------- --------
                                                                                
BALANCE SHEET DATA:                                                             
  Inventories...................... $204,094 $282,908 $345,283 $294,042 $400,453
  Total assets.....................  230,898  318,787  402,913  337,630  445,854
  Total debt.......................  108,578  169,879  169,873  183,207  203,200
  Stockholders' equity.............   84,553  106,073  177,638  111,514  184,780

--------                                                                        
(1) Represents homes placed under contract during the period, net of            
cancellations. See "Business--Marketing and Sales."                     
(2) Represents homes under contract but not yet closed at the end of the        
period. See "Business--Marketing and Sales."                            

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS                                                           

The following tables set forth certain information regarding the Company's  
operations for the periods indicated.                                           

                                                                [Download Table]

                                            PERCENTAGES OF REVENUE             
                                     ----------------------------------------- 
                                     FISCAL YEAR ENDED    THREE MONTHS ENDED   
                                       SEPTEMBER 30,         DECEMBER 31,      
                                     -------------------  -------------------- 
                                     1994   1995   1996     1995       1996    
                                     -----  -----  -----  ---------  --------- 
                                                                               
Costs and Expenses:                                                            
 Cost of sales.....................   82.9%  82.2%  82.0%      82.2%      81.8%
 Selling, general and                                                          
  administrative expenses..........    9.9   10.2    9.8       10.3       10.5 
 Interest expense..................    --     0.3    0.3        0.6        0.5 
                                     -----  -----  -----  ---------  --------- 
Total costs and expenses...........   92.8   92.7   92.1       93.1       92.8 
Other (income).....................   (0.1)  (0.1)  (0.2)      (0.3)      (0.5)
                                     -----  -----  -----  ---------  --------- 
Income before income taxes.........    7.3    7.4    8.1        7.2        7.7 
Income taxes.......................    2.8    2.7    3.1        2.7        3.0 
                                     -----  -----  -----  ---------  --------- 
Net income.........................    4.5%   4.7%   5.0%       4.5%       4.7%
                                     =====  =====  =====  =========  ========= 

                                                        [Enlarge/Download Table]

                             FISCAL YEAR ENDED SEPTEMBER 30,         THREE MONTHS ENDED DECEMBER 31,     
                          ----------------------------------------  ------------------------------------ 
                              1994          1995          1996            1995               1996        
                          ------------  ------------  ------------  -----------------  ----------------- 
                          HOMES         HOMES         HOMES          HOMES              HOMES            
                          CLOSED   %    CLOSED   %    CLOSED   %     CLOSED     %       CLOSED     %     
                          ------ -----  ------ -----  ------ -----  -----------------  ----------------- 
                                                                                                         
HOMES CLOSED                                                                                             
Mid-Atlantic (Charlotte,                                                                                 
 Greensboro, New Jersey,                                                                                 
 Raleigh/Durham,                                                                                         
 Suburban Washington D.                                                                                  
 C.)....................    442   18.7%   436   17.6%   547   16.7%     137      18.7%     116      13.6%
Midwest (Chicago,                                                                                        
 Cincinnati, Kansas                                                                                      
 City, Minneapolis/St.                                                                                   
 Paul, St. Louis).......    286   12.1    348   14.1    457   13.9       72       9.9      105      12.3 
Southeast (Atlanta,                                                                                      
 Birmingham, Nashville,                                                                                  
 Orlando, Pensacola,                                                                                     
 South Florida).........    398   16.9    303   12.2    519   15.8      140      19.2      130      15.2 
Southwest (Albuquerque,                                                                                  
 Austin, Dallas/Fort                                                                                     
 Worth, Houston,                                                                                         
 Phoenix)...............  1,108   47.0  1,131   45.7  1,239   37.7      308      42.1      333      38.9 
Western (Denver, Las                                                                                     
 Vegas, Los Angeles,                                                                                     
 Salt Lake City, San                                                                                     
 Diego).................    126    5.3    256   10.4    522   15.9       74      10.1      171      20.0 
                          -----  -----  -----  -----  -----  -----   ------  --------   ------  -------- 
                          2,360  100.0% 2,474  100.0% 3,284  100.0%     731     100.0%     855     100.0%
                          =====  =====  =====  =====  =====  =====   ======  ========   ======  ======== 

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                                                        [Enlarge/Download Table]

                                FISCAL YEAR ENDED SEPTEMBER 30,         THREE MONTHS ENDED DECEMBER 31,   
                          -------------------------------------------- -----------------------------------
                               1994           1995           1996            1995              1996       
                          -------------- -------------- -------------- ----------------- -----------------
                          HOMES          HOMES          HOMES          HOMES             HOMES            
                          SOLD     $     SOLD     $     SOLD     $      SOLD      $       SOLD      $     
                          ----- -------- ----- -------- ----- -------- ----------------- -----------------
                                                                                                          
NEW SALES CONTRACTS                                                                                       
 ($ IN THOUSANDS)                                                                                         
Mid-Atlantic (Charlotte,                                                                                  
 Greensboro, New Jersey,                                                                                  
 Raleigh/Durham,                                                                                          
 Suburban Washington D.                                                                                   
 C.)....................    402 $113,434   403 $103,952   495 $106,908    113 $   23,958    108 $   25,010
Midwest (Chicago,                                                                                         
 Cincinnati, Kansas                                                                                       
 City, Minneapolis/St.                                                                                    
 Paul, St. Louis).......    272   51,890   339   68,675   527  100,990    111     21,953     89     17,874
Southeast (Atlanta,                                                                                       
 Birmingham, Nashville,                                                                                   
 Orlando, Pensacola,                                                                                      
 South Florida).........    346   48,073   371   64,654   493   80,104    107     17,517    100     16,158
Southwest (Albuquerque,                                                                                   
 Austin, Dallas/Fort                                                                                      
 Worth, Houston,                                                                                          
 Phoenix)...............  1,138  149,023 1,148  155,202 1,311  190,006    267     36,978    265     40,451
Western (Denver, Las                                                                                      
 Vegas, Los Angeles,                                                                                      
 Salt Lake City, San                                                                                      
 Diego).................    169   32,167   292   56,777   662  107,481    101     14,957    189     30,283
                          ----- -------- ----- -------- ----- --------  ----- ----------  ----- ----------
                          2,327 $394,587 2,553 $449,260 3,488 $585,489    699 $  115,363    751 $  129,776
                          ===== ======== ===== ======== ===== ========  ===== ==========  ===== ==========

                                                        [Enlarge/Download Table]

                                FISCAL YEAR ENDED SEPTEMBER 30,         THREE MONTHS ENDED DECEMBER 31, 
                          -------------------------------------------- ---------------------------------
                               1994           1995           1996            1995             1996      
                          -------------- -------------- -------------- ---------------- ----------------
                          HOMES    $     HOMES    $     HOMES    $     HOMES      $     HOMES      $    
                          ----- -------- ----- -------- ----- -------- ---------------- ----------------
                                                                                                        
END OF PERIOD SALES                                                                                     
 BACKLOG                                                                                                
 ($ IN THOUSANDS)                                                                                       
Mid-Atlantic (Charlotte,                                                                                
 Greensboro, New Jersey,                                                                                
 Raleigh/Durham,                                                                                        
 Suburban Washington D.                                                                                 
 C.)....................   137  $ 42,886   198 $ 43,949   146 $ 34,405   174  $  39,642    214 $  60,842
Midwest (Chicago,                                                                                       
 Cincinnati, Kansas                                                                                     
 City, Minneapolis/St.                                                                                  
 Paul, St. Louis).......   123    23,585   114   22,332   184   34,861   153     29,326    168    30,981
Southeast (Atlanta,                                                                                     
 Birmingham, Nashville,                                                                                 
 Orlando, Pensacola,                                                                                    
 South Florida).........    68    10,216   190   33,557   164   26,479   157     26,886    134    20,474
Southwest (Albuquerque,                                                                                 
 Austin, Dallas/Fort                                                                                    
 Worth, Houston,                                                                                        
 Phoenix)...............   400    56,004   417   58,132   489   74,336   376     53,156    421    65,887
Western (Denver, Las                                                                                    
 Vegas, Los Angeles,                                                                                    
 Salt Lake City, San                                                                                    
 Diego).................    45     7,833    81   12,766   221   38,807   108     16,020    271    45,290
                           ---  -------- ----- -------- ----- --------  ----  --------- ------ ---------
                           773  $140,524 1,000 $170,736 1,204 $208,888   968  $ 165,030  1,208 $ 223,474
                           ===  ======== ===== ======== ===== ========  ====  ========= ====== =========

THREE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO THREE MONTHS ENDED DECEMBER    
31, 1995                                                                        

Revenues for the three months ended December 31, 1996, increased by 19.3%,  
to $144.4 million, from $121.1 million for the comparable period of 1995. The   
number of homes closed by the Company increased by 17.0%, to 855 homes in the   
three months ended December 31, 1996, from 731 homes in the same period of      
1995. Percentage increases in home closings ranging from 8.1% to 131.1% were    
achieved in the Company's Midwest, Southwest and Western market regions, which  
were somewhat offset by modest percentage decreases in home closings in the     
Mid-Atlantic and Southeast market regions. Home sales revenues increased        
partly due to an increase in the average home delivery price (to $168,700 in    
1996, from $165,600 for the comparable period of 1995). The increase in the     
average home delivery price was due primarily to changes in the geographic mix  
of homes closed within the Company.                                             

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New net sales contracts increased 7.4%, to 751 homes for the three months   
ended December 31, 1996, from 699 homes for the three months ended December     
31, 1995. The dollar amount of new net sales contracts increased by 12.5%,      
with percentage increases ranging from 4.4% to 102.5% achieved in the           
Company's Mid-Atlantic, Southwest and Western market regions. Those increases   
were offset by moderate percentage declines in the Midwest and Southeast        
market regions. The Company was operating in 225 subdivisions at December 31,   
1996, compared to 171 subdivisions at December 31, 1995. At December 31, 1996,  
the Company's backlog of sales contracts was 1,208 homes, a 24.8% increase      
over comparable figures at December 31, 1995. The increase in sales backlog     
was partially due to the sales backlog acquired in the purchase of Trimark      
Communities, L.L.C., of Denver, Colorado (Trimark), and SGS Communities, Inc.,  
of New Jersey (SGS) during the quarter. The average sales value of homes in     
backlog increased to $185,000 at December 31, 1996, from $170,500 at December   
31, 1995. The increase was due partially to the high average dollar value of    
the sales backlog acquired with the December, 1996 acquisition of SGS, and to   
changes in the geographic mix of homes sold during the quarter.                 

The increase in revenues caused cost of sales to increase by 18.6%, to      
$118.0 million in the three months ended December 31, 1996, from $99.5 million  
in the comparable period of 1995. As a percentage of revenues, cost of sales    
decreased to 81.8% in 1996 from 82.2% in 1995. The decrease in cost of sales    
as a percentage of revenues is primarily due to efforts to increase sales       
prices and control costs.                                                       

Selling, general and administrative (SG&A) expense increased by 20.8%, to   
$15.1 million in the three months ended December 31, 1996, from $12.5 million   
in the comparable period of 1995. As a percentage of revenues, SG&A expense     
increased to 10.5% in 1996, from 10.3% in 1995. This increase was partially     
due to costs associated with the first quarter acquisitions.                    

Interest expense amounted to $0.8 million in the three months ended December
31, 1996, compared to $0.7 in the comparable period of 1995. The Company        
follows a policy of capitalizing interest only on inventory under construction  
or development. During the three months ended December 31, 1996 and 1995, the   
Company expensed a portion of incurred interest and other financing costs due   
to increased levels of developed lots and finished homes. Capitalized interest  
and other financing costs are included in cost of sales at the time of home     
closings.                                                                       

Other income, which consists mainly of interest income and the pre-tax      
earnings of the DRH Title Companies and DRH Mortgage Company, Ltd., increased   
to $715,000 in the three months ended December 31, 1996, from $374,000 for the  
comparable period of 1995. The increase was primarily due to expanded title     
agency activities and the initiation of mortgage company services which were    
not provided in 1995. Increased interest income from overnight investing of     
cash balances also contributed to the increase in other income.                 

The provision for income taxes was $4.4 million in the three months ended   
December 31, 1996, up $1.1 million from the $3.3 million for the comparable     
quarter of 1995. The increase in income taxes was attributable to the increase  
in income before income taxes and an increase in the estimated effective        
income tax rate anticipated for fiscal 1997.                                    

YEAR ENDED SEPTEMBER 30, 1996 COMPARED TO YEAR ENDED SEPTEMBER 30, 1995         

Revenues increased by 25.1% to $547.3 million in 1996 from $437.4 million in
1995. The number of homes closed by the Company increased by 32.7%, to 3,284    
homes in 1996 from 2,474 homes in 1995. Home closings increased in all of the   
Company's market regions, with percentage increases ranging from 9.5% in the    
Southwest region to 103.9% in the Western region. Of the 32.7% increase in      
1996 home closings, 13.4% was the result of acquisitions made in Greensboro     
and Birmingham in the last quarter of 1995. The 1996 increase in revenues was   
achieved in spite of a 4.1% decrease in the average selling price of homes      
closed, to $166,600 in 1996 from $173,700 in 1995. The decrease was due to      
changes in the geographic mix of homes closed within the Company and different  
price points in certain markets.                                                

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New net sales contracts increased 36.6%, to 3,488 homes in 1996 from 2,553  
in 1995. Percentage increases in new net sales contracts ranging from 126.7%    
to 14.2% were achieved in the Company's market regions. The 1996 average sales  
price was $167,900, compared to $176,000 in 1995.                               

The Company was operating in 184 subdivisions at September 30, 1996,        
compared to 162 at September 30, 1995. At September 30, 1996, the Company's     
backlog of sales contracts was 1,204 homes, a 20.4% increase over the           
comparable figure at September 30, 1995. The average sales price of homes in    
backlog increased to $173,500 at September 30, 1996, from $170,700 at           
September 30, 1995.                                                             

Cost of sales increased by 24.8%, to $449.1 million in 1996 from $359.7     
million in 1995. As a percentage of revenues, cost of sales decreased by 0.2%,  
to 82.0% in 1996 from 82.2% in 1995. This improvement resulted from good        
market conditions during the year, proactive efforts to maintain sales prices   
and control costs, and higher margins on homes closed on internally developed   
lots. The Company does not capitalize pre-opening costs for new subdivisions.   

Selling, general and administrative (SG&A) expense increased by 20.9%, to   
$53.9 million in 1996 from $44.5 million in 1995. The increase in SG&A expense  
was due largely to the increases in sales and construction activity required    
to sustain the higher levels of revenues. SG&A expense as a percentage of       
revenues decreased by 0.4%, to 9.8% in 1996 from 10.2% in 1995, as the Company  
was successful in controlling its variable overhead costs while the revenue     
increase offset more fixed costs.                                               

Interest expense increased to $1.5 million in 1996, from $1.2 million in    
1995, caused by average interest-bearing debt growing at a slightly faster      
pace than the average amount of inventory under construction and development.   
The Company follows a policy of capitalizing interest only on inventory under   
construction or development. During both 1996 and 1995, a portion of incurred   
interest and other financing costs could not be charged to inventory and was    
expensed. Capitalized interest and other financing costs are included in cost   
of sales at the time of home closings.                                          

Other income, which consists mainly of interest income, pretax earnings from
the Company's title operations and, in 1996, pretax earnings from the           
Company's mortgage operations, increased to $1.5 million in 1996, from $0.6     
million in 1995. The increase was due primarily to the fact that 1996           
comprised a full year of operations for DRH Title Company of Texas, Ltd.,       
compared to only six months in 1995. Additionally, DRH Title Company of         
Florida, Inc., and DRH Mortgage Company, Ltd. commenced operations in 1996 and  
provided pretax earnings.                                                       

The provision for income taxes increased 41.9%, to $17.1 million in 1996    
from $12.0 million in 1995, due in part to the corresponding increase in        
income before income taxes. The effective tax rate increased to 38.4% in 1996   
from 36.9% in 1995. As a percentage of revenues, the income tax provision       
increased 0.4% to 3.1% in 1996. The increases in the effective tax rate and in  
the tax provision as a percentage of revenues were due primarily to higher      
expected rates of state and local income taxes.                                 

YEAR ENDED SEPTEMBER 30, 1995 COMPARED TO YEAR ENDED SEPTEMBER 30, 1994         

Revenues increased by 11.2%, to $437.4 million in 1995 from $393.3 million  
in 1994. The number of homes closed by the Company increased by 4.8% to 2,474   
homes in 1995 from 2,360 homes in 1994, led by a 103.2% increase in the         
Company's Western region and a 21.7% increase in the Company's Midwest region.  
The large increase in the Western region resulted from earlier investments      
incurred to enter markets within this region and illustrates a normal           
progression for newer markets. The 1995 increase in revenues also was due in    
part to a 4.3% increase in the average selling price of homes closed, to        
$173,700 in 1995 from $166,600 in 1994. The increase was due primarily to       
changes in the geographic mix of homes closed within the Company, as homes      
closed in the newer markets were at higher prices. Miscellaneous land/lot       
sales in 1995 and the impact of acquisitions also contributed to the increase   
in revenues.                                                                    

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New net sales contracts increased by 9.7%, to 2,553 homes in 1995 from 2,327
in 1994. Percentage increases in new net sales contracts were achieved in all   
of the Company's market regions, led by 72.8% and 24.6% increases in the        
Western and Midwest regions, respectively. The 1995 average selling price was   
$176,000, compared to $169,600 in 1994.                                         

The Company was operating in 162 subdivisions at September 30, 1995,        
compared to 137 at September 30, 1994. At September 30, 1995, the Company's     
backlog of sales contracts was 1,000 homes, a 29.4% increase over the           
comparable figure at September 30, 1994. The average sales price of homes in    
backlog decreased to $170,700 at September 30, 1995, from $181,800 at           
September 30, 1994.                                                             

Cost of sales increased by 10.3%, to $359.7 million in 1995 from $326.1     
million in 1994. As a percentage of revenues, cost of sales decreased by 0.7%,  
to 82.2% in 1995 from 82.9% in 1994. This improvement resulted from proactive   
efforts to maintain sales prices and control costs, higher margins on homes     
closed on internally developed lots, and miscellaneous land/lot sales. The      
Company does not capitalize pre-opening costs for new subdivisions.             

Selling, general and administrative (SG&A) expense increased by 14.0%, to   
$44.5 million in 1995 from $39.1 million in 1993. The increase in SG&A expense  
was due largely to the increases in sales and construction activity required    
to sustain the higher levels of revenues. SG&A expense as a percentage of       
revenues increased by 0.3%, to 10.2% in 1995 from 9.9% in 1994, due partly to   
costs associated with expansion into new markets which had not yet generated    
significant revenues.                                                           

Interest expense totalled $1.2 million in 1995, compared to none in 1994.   
The Company follows a policy of capitalizing interest only on inventory under   
construction or development. During 1995, the Company expensed a portion of     
incurred interest and other financing costs due to increased levels of          
developed lots and finished homes. During the 1994 period, all such costs were  
capitalized in inventory. Capitalized interest and other financing costs are    
included in cost of sales at the time of home closings.                         

Other income, which consisted mainly of interest income and pretax earnings 
of DRH Title Company of Texas, Ltd. in 1995, increased to $621,000 in 1995,     
from $446,000 in 1994.                                                          

The provision for income taxes increased 10.0%, to $12.0 million in 1995    
from $10.9 million in 1994, due primarily to the corresponding increase in      
income before income taxes. The effective tax rate decreased to 36.9% in 1995   
from 38.2% in 1994. As a percentage of revenues, the income tax provision       
decreased by 0.1% to 2.7% in 1995. The decreases in the effective tax rate and  
in the tax provision as a percentage of revenues were due primarily to the      
effects of certain tax planning strategies relating to state income taxes.      

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES                            

At December 31, 1996, the Company had available cash and cash equivalents of
$15.1 million. Inventories (including finished homes and construction in        
progress, developed residential lots and other land) at December 31, 1996,      
increased by $55.2 million from September 30, 1996, due to the acquisitions of  
selected assets (including inventories) of Trimark and SGS. Inventories also    
increased due to a general increase in business activity and the expansion of   
operations in the newer market areas. Because the inventory increase and the    
acquisitions were financed largely by borrowing, the Company's ratio of notes   
payable to total capital increased to 52.4% at December 31, 1996, from 48.9%    
at September 30, 1996. The equity to total assets ratio decreased slightly      
during the three months, to 41.4% at December 31, 1996, from 44.1% at           
September 30, 1996.                                                             

The Company's financing needs depend upon the results of its operations,    
sales volume, inventory levels, inventory turnover, and acquisitions. The       
Company has financed its operations through borrowings from financial           
institutions, through funds from earnings, and, in 1992 and 1996, from the      
sale of Common Stock.                                                           

At December 31, 1996, the Company had outstanding debt of $203.2 million and
additional aggregate unsecured financing available under debt agreements of     
$101.2 million. The Company currently has                                       

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debt capacity of $410 million. However, the covenants contained in its credit   
facilities currently limit such capacity to $356 million.                       

In October, 1996, the Company completed the acquisition of the principal    
assets (approximately $7.6 million, primarily inventories) of Trimark for       
approximately $6.6 million in cash and the assumption of approximately $1.1     
million in trade accounts and notes payable associated with the acquired        
assets. In December, 1996, the Company purchased the principal assets           
(approximately $20.4 million, primarily inventories) of SGS for $11.8 million   
in cash and the assumption of $9.7 million in trade accounts and notes payable  
associated with the acquired assets.                                            

On February 27, 1997, the Company completed the Torrey Acquisition. Under   
the terms of the Stock Purchase Agreement, the Company paid at closing          
consideration consisting of $28.5 million in cash and 844,444 shares of Common  
Stock, and agreed to a contingent payment estimated at $1 million, for all of   
the outstanding capital stock of the entities comprising Torrey. The Company    
also assumed and refinanced approximately $89 million of indebtedness, other    
obligations and minority interests.                                             

The Company's rapid growth requires significant amounts of cash. It is      
anticipated that future home construction, lot and land purchases and           
acquisitions will be funded through internally generated funds and new and      
existing borrowings. The Company continuously evaluates its capital structure   
and in the future may seek to further increase unsecured debt and obtain        
additional equity to fund ongoing operations as well as to pursue additional    
growth opportunities.                                                           

Except for ordinary expenditures for the construction of homes and, to a    
limited extent, the acquisition of land and lots for development and sale of    
homes, at December 31, 1996, the Company had no material commitments for        
capital expenditures.                                                           

INFLATION                                                                       

The Company, as well as the homebuilding industry in general, may be        
adversely affected during periods of high inflation, primarily because of       
higher land and construction costs. Inflation also increases the Company's      
financing, labor and material costs. In addition, higher mortgage interest      
rates significantly affect the affordability of permanent mortgage financing    
to prospective homebuyers. The Company attempts to pass through to its          
customers any increases in its costs through increased sales prices and, to     
date, inflation has not had a material adverse effect on the Company's results  
of operations. However, there is no assurance that inflation will not have a    
material adverse impact on the Company's future results of operations.          

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BUSINESS  

The Company is engaged primarily in the construction and sale of single-    
family homes in metropolitan areas of the Mid-Atlantic, Midwest, Southeast,     
Southwest and Western regions of the United States. The Company offers high-    
quality homes with custom features, designed principally for the entry-level    
and move-up market segments. The Company's homes generally range in size from   
1,000 to 5,000 square feet and range in price from $80,000 to $600,000. For     
the year ended September 30, 1996, the Company closed homes with an average     
sales price approximating $166,600. The average sales price of homes closed in  
the three months ended December 31, 1996, was $168,700.                         

The Company is one of the most geographically diversified homebuilders in   
the United States, with operating divisions in 21 states and 27 markets. These  
markets include Albuquerque, Atlanta, Austin, Birmingham, Charlotte, Chicago,   
Cincinnati, Dallas/Fort Worth, Denver, Greensboro, Greenville, Houston, Kansas  
City, Las Vegas, Los Angeles, Minneapolis/St. Paul, Nashville, North Central    
New Jersey, Orlando, Pensacola, Phoenix, Raleigh/Durham, Salt Lake City, San    
Diego, South Florida, St. Louis and suburban Washington, D.C.                   

The Company was incorporated in Delaware on July 1, 1991, to acquire all of 
the assets and businesses of 25 predecessor companies, which were residential   
home construction and development companies owned or controlled by Donald R.    
Horton.                                                                         

The Company's principal executive offices are located at 1901 Ascension     
Blvd., Suite 100, Arlington, Texas 76006, and its telephone number is (817)     
856-8200.                                                                       

OPERATING STRATEGY                                                              

The Company believes that there are several important elements to its       
operating strategy which have enabled it to achieve consistent growth and       
profitability. The following are important elements of this strategy:           

Geographic Diversification. From 1978 to late 1987, the Company's           
homebuilding activities were conducted exclusively in the Dallas/Fort Worth     
area. The Company then instituted a policy of diversifying geographically,      
entering the following markets in the years indicated:                          

                                                                [Download Table]

YEAR ENTERED                                  MARKETS                      
------------                                  -------                      
                                                                           
1987.................... Phoenix                                           
1988.................... Atlanta, Orlando                                  
1989.................... Charlotte                                         
1990.................... Houston                                           
1991.................... Suburban Washington D.C.                          
1992.................... Chicago, Cincinnati, Raleigh/Durham, South Florida
1993.................... Austin, Los Angeles, Salt Lake City, San Diego    
1994.................... Minneapolis/St. Paul, Kansas City, Las Vegas      
1995.................... Birmingham, Denver, Greensboro, St. Louis         
1996.................... Albuquerque, Pensacola                            
1997.................... Nashville, North Central New Jersey, Greenville   

The Company continually monitors the sales and margins achieved in each of  
the subdivisions in which it operates as part of an overall evaluation of the   
employment of its capital. While the Company believes there are significant     
growth opportunities in its existing markets, it intends to continue its        
policy of geographic diversification by seeking to enter new markets. The       
Company believes that its diversification strategy mitigates the effects of     
local and regional economic cycles and enhances its growth potential.           
Typically, the Company will not invest material amounts in real estate,         
including raw land, developed lots, models and speculative homes, or overhead   
in start-up operations in new markets until such markets demonstrate            
significant growth potential and acceptance of the Company and its products.    

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Acquisitions. As an integral component of the Company's operational strategy
of continued expansion and geographic diversification, the Company continually  
evaluates opportunities for strategic acquisitions. The Company believes that   
the expansion of its operations through the acquisition of existing             
homebuilding companies affords it several benefits not found in start-up        
operations. Such benefits include established land positions and inventories;   
existing relationships with land owners, developers, subcontractors and         
suppliers; brand name recognition; and proven product acceptance by homebuyers  
in the market. In evaluating potential acquisition candidates, the Company      
seeks homebuilding companies that have an excellent reputation, a track record  
of profitability and a strong management team with an entrepreneurial           
orientation. The Company has limited the risks associated with acquiring a      
going concern by conducting extensive operational, financial and legal due      
diligence on each acquisition candidate and by only acquiring homebuilding      
companies that the Company believes should have an immediate positive impact    
on the Company's earnings.                                                      

The Company has acquired six homebuilding companies since 1994:             

                                                                [Download Table]

     DATE                                                                    
   ACQUIRED        ENTITIES ACQUIRED                    MARKETS              
   --------        -----------------                    -------              
                                                                             
    April 1994 Joe Miller Homes, Inc.      Minneapolis/St. Paul              
               and                                                           
               Argus Development, Inc.                                       
     July 1995 Arappco, Inc.               Greensboro                        
September 1995 Regency Development, Inc.   Birmingham                        
  October 1996 Trimark Communities, LLC    Denver                            
 December 1996 SGS Communities, Inc.       North Central New Jersey          
 February 1997 The Torrey Group of         Atlanta, Charlotte, Greenville and
               Companies                   Raleigh/Durham                    

In both existing and new markets, the Company anticipates that it will      
continue to evaluate potential future acquisition opportunities that satisfy    
its acquisition criteria.                                                       

On February 27, 1997, the Company completed the Torrey Acquisition. Under   
the terms of the Stock Purchase Agreement, the Company paid at closing          
consideration consisting of $28.5 million in cash and 844,444 shares of Common  
Stock, and agreed to a contingent payment estimated at $1 million, for all of   
the outstanding capital stock of the entities comprising Torrey. The Company    
also assumed and refinanced approximately $89 million of indebtedness, other    
obligations and minority interests.                                             

Torrey has been the leading builder of single-family homes in the large and 
growing Atlanta, Georgia market for the past three years as reported in         
Builder Magazine. Atlanta has been the largest housing market in the United     
States for the past three years based on single-family building permits         
issued. Torrey targets both entry-level and first time move-up buyers. For the  
twelve months ended September 30, 1996, Torrey delivered 1,442 homes,           
generating $183.8 million of revenue. In addition to building homes in the      
Atlanta market, Torrey has homebuilding operations in Charlotte and             
Raleigh/Durham, North Carolina, and Greenville, South Carolina. Despite         
Torrey's leading market share position in the Atlanta market, the Company       
believes that it can improve Torrey's operating results by providing            
additional and lower cost capital and operating synergies.                      

The Company believes that the Torrey Acquisition is consistent with its     
strategy of selectively pursuing acquisitions of homebuilders that have an      
excellent reputation, a track record of profitability, and a strong management  
team.                                                                           

Market Focus--Custom Features. The Company positions itself between large   
volume homebuilders and local custom homebuilders by offering a broader         
selection of homes that typically have more amenities and greater design        
flexibility than homes offered by volume builders, at prices that are           
generally more affordable than those charged by local custom builders. The      
Company generally offers between five and ten home designs that it believes     
will appeal to local homebuyers at each of its subdivisions, but is prepared    
to offer additional                                                             

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building plans and options that may be more suitable or desirable to            
homebuyers. The Company also is prepared to customize such designs to the       
individual tastes and specifications of its homebuyers. While most design       
modifications are significant to homebuyers, such changes typically involve     
relatively minor adjustments including, among other things, modifying the       
interior or exterior dimensions of the home and changing exterior materials.    
Such changes generally improve the Company's gross margins. Consequently, the   
Company believes that it is able to maintain the efficiencies of a volume       
builder while delivering high-quality, personalized homes to its customers.     
The Company believes that its ability to cater to the design tastes and         
desires of the prospective homebuyer at competitive prices, even at the entry-  
level, distinguishes it from many of its competitors.                           

Decentralized Operations. The Company's homebuilding activities are         
decentralized to give more operating flexibility to its local division          
managers. The Company's homebuilding activities are conducted through 34        
operating divisions, some of which are in the same general market area.         
Generally, each operating division consists of a vice president, an office      
manager and staff, a sales manager, one to eleven sales people and one          
construction manager, who oversees one to nine construction supervisors. The    
Company believes that division managers, who are intimately familiar with       
local conditions, make better decisions regarding local operations than do the  
centralized, corporate management teams who make such decisions for many of     
its competitors. Each operating division is responsible for preliminary site    
selection, negotiation of option or similar contracts, and overseeing land      
development activities. Site selection and lot acquisition typically involve a  
feasibility study by the operating division, including soil and environmental   
reviews, a review of existing zoning and other governmental requirements, and   
a review of the need for and extent of offsite work and additional lot          
preparation required to meet local building codes. Each operating division      
also plans its homebuilding schedule, selects the building plans and            
architectural scheme for its subdivisions, obtains all necessary building       
approvals, and develops a marketing plan for its homes. Division managers       
receive performance bonuses based upon achieving targeted operating levels in   
their operating divisions.                                                      

The Company's corporate office controls key risk elements by retaining      
oversight and responsibility for final approval of all land and lot             
acquisitions, inventory levels, financing arrangements, accounting and          
management reporting, payment of subcontractor invoices, payroll and employee   
benefits.                                                                       

Cost Management. The Company strives to control its overhead costs by       
centralizing its administrative and accounting functions and by limiting the    
number of field administrative personnel and middle level management            
positions. The Company also attempts to minimize advertising costs by           
participating in promotional activities, publications and newsletters           
sponsored by local real estate brokers, mortgage companies, utility companies   
and trade associations, and, in certain instances, by positioning its           
subdivisions in conspicuous locations that permit it to take advantage of       
local traffic patterns.                                                         

The Company attempts to control construction costs through the efficient    
design of its homes and by obtaining favorable pricing from certain             
subcontractors based on the high volume of work they perform for the Company.   
The Company's management information systems, including the purchase order      
system, also assist in controlling construction costs by allowing corporate     
and division management to monitor expenditures on a home-by-home basis. In     
addition, the Company's management information systems allow the Company to     
monitor its inventory composition and levels, thereby controlling capital and   
overhead costs.                                                                 

Limited Real Estate Exposure. The Company generally acquires developed      
building lots pursuant to lot option and similar contracts after all zoning     
and other governmental entitlements and approvals are obtained. By utilizing    
lot option contracts, the Company purchases the right, but not the obligation,  
to buy building lots at predetermined prices on a takedown schedule             
commensurate with anticipated home closings. The lot option contracts are       
generally on a nonrecourse basis, thereby limiting the Company's financial      
exposure to earnest money deposits given to property sellers. This practice     
enables the Company to control significant lot positions with minimal up front  
capital and substantially reduces the risks associated with land ownership and  
development. The Company attempts to control a two to four year supply of       
building lots within each market based on current and expected absorption       
rates. At December 31, 1996, the Company held lot option and similar contracts  
for 10,928 lots with an estimated aggregate purchase price approximating $350   
million. These options are secured by cash deposits approximating $4.4 million  
and promissory notes approximating $1.4 million.                                

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MARKETS                                                                         

The Company's homebuilding activities are conducted in five geographic      
regions, comprised of the following markets:                                    

                                                        [Enlarge/Download Table]

   GEOGRAPHIC REGION                                  MARKETS                             
   -----------------                                  -------                             
                                                                                          
Mid-Atlantic............ Charlotte, Greensboro, Greenville, North Central New Jersey,     
                          Raleigh/Durham, Suburban Washington, D.C.                       
Midwest................. Chicago, Cincinnati, Kansas City, Minneapolis/St. Paul, St. Louis
Southeast............... Atlanta, Birmingham, Nashville, Orlando, Pensacola, South Florida
Southwest............... Albuquerque, Austin, Dallas/Fort Worth, Houston, Phoenix         
Western................. Denver, Las Vegas, Los Angeles, Salt Lake City, San Diego        

The Company's operations in each of its markets differ based on a number of 
market-specific factors. These factors include regional economic conditions     
and job growth, land availability and the local land development process,       
consumer tastes, competition from other builders of new homes and secondary     
home sales activity. The Company considers each of these factors when entering  
new markets or conducting operations in existing markets.                       

Revenues for the Company by geographic region are:                          

                                                                [Download Table]

                                                                THREE MONTHS    
                                   YEAR ENDED SEPTEMBER 30,  ENDED DECEMBER 31, 
                                  -------------------------- -------------------
                                    1994     1995     1996     1995      1996   
                                  -------- -------- -------- --------- ---------
                                                  (IN THOUSANDS)                
                                                                                
Mid-Atlantic..................... $121,829 $113,251 $116,452 $  28,266 $  24,167
Midwest..........................   54,072   69,929   88,461    14,957    21,754
Southeast........................   53,384   49,291   87,181    24,187    22,163
Southwest........................  139,420  153,074  173,802    41,955    48,901
Western..........................   24,612   51,843   81,440    11,703    27,396
                                  -------- -------- -------- --------- ---------
  Total.......................... $393,317 $437,388 $547,336 $ 121,068 $ 144,381
                                  ======== ======== ======== ========= =========

LAND POLICIES                                                                   

While the Company expects to continue to rely predominantly on lot option   
and similar contracts to secure developed lots, it will pursue selected land    
acquisition and development opportunities to augment its inventory of low-      
cost, quality building lots and to maximize profit opportunities.               
Substantially all of the land acquired by the Company is purchased only after   
necessary entitlements have been obtained so that the Company has the right to  
begin development or construction. The Company generally limits its             
acquisitions to smaller tracts of entitled land that will yield under 150 lots  
when developed and, where possible, obtains options to acquire adjacent         
parcels for later development. By limiting its acquisition and development      
activities to smaller parcels of land, the Company reduces the financial and    
market risks associated with holding land during the development period.        
Before it acquires tracts of land, the Company will, among other things,        
complete a feasibility study, which includes soil tests, independent            
environmental studies and other engineering work, and determine that all        
necessary zoning and other governmental entitlements required to develop and    
use the property for home construction have been acquired. At December 31,      
1996, only about 34% of the Company's total lot position of 16,584 lots was     
being or had been developed by the Company. Although the Company purchases      
land and engages in land development activities primarily to support its own    
homebuilding activities, lots and land are occasionally sold to other           
developers and homebuilders.                                                    

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The following table sets forth a summary of the Company's land/lot positions
at December 31, 1996:                                                           

                                                                [Download Table]
                                                                             
Finished lots owned by the Company....................................  1,315
Lots under development owned by the Company...........................  4,341
                                                                       ------
  Total lots owned....................................................  5,656
Lots available under lot option and similar contracts................. 10,928
                                                                       ------
  Total land/lot position............................................. 16,584
                                                                       ======

The Company also seeks to limit its exposure to real estate inventory risks 
by (i) generally commencing construction of homes under contract only after     
receipt of a satisfactory down payment and, where applicable, the buyer's       
receipt of mortgage approval, (ii) limiting the number of speculative homes     
(homes started without an executed sales contract) built in each subdivision;   
and, (iii) closely monitoring local market and demographic trends, housing      
preferences and related economic developments, such as new job opportunities,   
local growth initiatives and personal income trends.                            

CONSTRUCTION                                                                    

The Company's home designs are prepared by architects in each of the        
Company's markets to appeal to the local tastes and preferences of the          
community. Optional interior and exterior features also are offered by the      
Company to enhance the basic home design and to promote the custom aspect of    
the Company's sales efforts.                                                    

Substantially all of the Company's construction work is performed by        
subcontractors. The Company's construction supervisors monitor the              
construction of each home, participate in material design and building          
decisions, coordinate the activities of subcontractors and suppliers, subject   
the work of subcontractors to quality and cost controls and monitor compliance  
with zoning and building codes. Subcontractors typically are retained for a     
specific subdivision pursuant to a contract that obligates the subcontractor    
to complete construction at a fixed price. Agreements with the Company's        
subcontractors and suppliers generally are negotiated for each subdivision.     
The Company competes with other homebuilders for qualified subcontractors, raw  
materials and lots in the markets where it operates.                            

Construction time for the Company's homes depends on the weather,           
availability of labor, materials and supplies, and other factors. The Company   
typically completes the construction of a home within four months.              

The Company does not maintain significant inventories of construction       
materials, except for work in process materials for homes under construction.   
Typically, the construction materials used in the Company's operations are      
readily available from numerous sources. The Company does not have any long-    
term contracts with suppliers of its building materials. In recent years, the   
Company has not experienced any significant delays in construction due to       
shortages of materials or labor.                                                

MARKETING AND SALES                                                             

The Company markets and sells its homes through commissioned employees and  
independent real estate brokers. Home sales are typically conducted from sales  
offices located in furnished model homes used in each subdivision. At December  
31, 1996, the Company owned 249 model homes. These model homes generally are    
not offered for sale until the completion of the respective subdivision. The    
Company's sales personnel assist prospective homebuyers by providing them with  
floor plans, price information, tours of model homes and the selection of       
options and other custom features. Such personnel are trained by the Company    
and kept informed as to the availability of financing, construction schedules   
and marketing and advertising plans.                                            

In addition to using model homes, the Company typically builds a limited    
number of speculative homes in each subdivision to enhance its marketing and    
sales activities. Construction of these speculative homes also is necessary to  
satisfy the requirements of relocated personnel and independent brokers, who    
often represent homebuyers requiring a completed home within 60 days. A         
majority of these speculative homes are sold while under construction or        
immediately following completion. The number of speculative homes is            
influenced by local                                                             

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market factors, such as new employment opportunities, significant job           
relocations, growing housing demand and the length of time the Company has      
built in the market. Depending upon the seasonality of each of its markets,     
the Company seeks to limit its speculative homes to approximately five homes    
per subdivision. At December 31, 1996, the Company was operating in 225         
subdivisions and averaged five speculative homes in each subdivision.           

The Company advertises on a limited basis in newspapers and in real estate  
broker, mortgage company and utility publications, brochures, newsletters and   
billboards. To minimize advertising costs, the Company attempts to operate in   
subdivisions in conspicuous locations that permit it to take advantage of       
local traffic patterns. The Company also believes that model homes play a       
significant role in its marketing efforts. Consequently, the Company expends    
significant efforts in creating an attractive atmosphere in its model homes.    

Sales of the Company's homes generally are made pursuant to a standard sales
contract which requires a down payment of 5% to 10% of the sales price. The     
contract includes a financing contingency which permits the customer to cancel  
in the event mortgage financing at prevailing interest rates is unobtainable    
within a specified period, typically four to six weeks, and may include other   
contingencies, such as the sale of an existing home. The Company includes a     
home sale in its sales backlog upon execution of the sales contract and         
receipt of the initial down payment. The Company does not recognize revenue     
upon the sale of a home until the home is closed and title passes. The Company  
estimates that the average period between the execution of a sales contract     
for a home and closing is approximately three to five months for presold        
homes.                                                                          

CUSTOMER SERVICE AND QUALITY CONTROL                                            

The Company's operating divisions are responsible for pre-closing, quality  
control inspections and responding to customers' post-closing needs. The        
Company believes that prompt and courteous response to homebuyers' needs        
during and after construction reduces post-closing repair costs, enhances the   
Company's reputation for quality and service, and ultimately leads to           
significant repeat and referral business from the real estate community and     
homebuyers. The Company provides its homebuyers with a limited one-year         
warranty on workmanship and building materials. The subcontractors who perform  
most of the actual construction in turn provide warranties of workmanship to    
the Company, and generally are prepared to respond to the Company and           
homeowner promptly upon request. In most cases, the Company supplements its     
one-year warranty by purchasing a ten-year limited warranty from a third        
party. To cover its potential warranty obligations, the Company accrues an      
estimated amount for future warranty costs.                                     

CUSTOMER FINANCING                                                              

In 1996, the Company formed D.R. Horton Mortgage Company, Ltd., a joint     
venture with a third party, to provide mortgage financing services,             
principally to purchasers of homes built and sold by the Company. D.R. Horton   
Mortgage presently provides services in Dallas/Fort Worth, Austin, Houston and  
Phoenix.                                                                        

In its other markets, the Company does not provide mortgage financing but   
works with a variety of mortgage lenders that make available to homebuyers a    
range of conventional mortgage financing programs. By making information about  
these programs available to prospective homebuyers and maintaining a            
relationship with such mortgage lenders, the Company is able to coordinate and  
expedite the entire sales transaction by ensuring that mortgage commitments     
are received and that closings take place on a timely and efficient basis.      

TITLE SERVICES                                                                  

Through its wholly owned subsidiaries, DRH Title Company of Texas, Ltd. and 
DRH Title Company of Florida, Inc., the Company serves as a title insurance     
agent by providing title insurance policies and closing services to purchasers  
of homes built and sold by the Company in the Dallas/Fort Worth, Austin and     
Florida markets. The Company assumes no underwriting risk associated with       
these title policies.                                                           

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EMPLOYEES                                                                       

At December 31, 1996, the Company employed 765 persons, of whom 232 were    
sales and marketing personnel, 266 were executive, administrative and clerical  
personnel, 256 were involved in construction, and 11 worked in title            
operations. Fewer than 10 of the Company's employees are covered by collective  
bargaining agreements. Certain of the subcontractors which the Company engages  
are represented by labor unions or are subject to collective bargaining         
agreements. The Company believes that its relations with its employees and      
subcontractors are good.                                                        

UNDERWRITING  

Upon the terms and subject to the conditions stated in the Underwriting     
Agreement dated the date hereof, each Underwriter named below has severally     
agreed to purchase, and the Company has agreed to sell to such Underwriter,     
the number of shares of Common Stock set forth opposite the name of such        
Underwriter.                                                                    

                                                                [Download Table]

                                                                       NUMBER OF
                             UNDERWRITER                                SHARES  
                             -----------                               ---------
                                                                                
Smith Barney Inc......................................................   875,000
Donaldson, Lufkin & Jenrette Securities Corporation...................   875,000
Merrill Lynch, Pierce, Fenner & Smith                                           
     Incorporated.....................................................   875,000
Salomon Brothers Inc..................................................   875,000
                                                                       ---------
  Total............................................................... 3,500,000
                                                                       =========

The Underwriting Agreement provides that the obligations of the several     
Underwriters to pay for and accept delivery of the shares are subject to        
approval of certain legal matters by counsel and to certain other conditions.   
The Underwriters are obligated to take and pay for all shares of Common Stock   
offered hereby (other than those covered by the over-allotment option           
described below) if any such shares are taken.                                  

The Underwriters propose to offer part of the shares directly to the public 
at the public offering price set forth on the cover page of this Prospectus     
and part of the shares to certain dealers at a price which represents a         
concession not in excess of $.31 per share under the public offering price.     
The Underwriters may allow, and such dealers may reallow, a concession not in   
excess of $.10 per share to certain other dealers. After the initial offering   
of the shares to the public, the public offering price and such concessions     
may be changed by the Underwriters.                                             

The Company has granted to the Underwriters an option, exercisable for      
thirty days from the date of this Prospectus, to purchase up to an aggregate    
of 525,000 additional shares of Common Stock at the price to the public set     
forth on the cover page of this Prospectus less underwriting discounts and      
commissions. The Underwriters may exercise such option solely for the purpose   
of covering over-allotments, if any, in connection with the offering of the     
shares offered hereby. To the extent such option is exercised, each             
Underwriter will be obligated, subject to certain conditions, to purchase       
approximately the same percentage of such additional shares as the number of    
shares set forth opposite each Underwriter's name in the preceding table bears  
to the total number of shares listed in such table.                             

The Company and certain of its executive officers and directors have agreed 
that, for a period of 90 days from the date of this Prospectus, they will not,  
without the prior written consent of Smith Barney Inc., offer, sell, contract   
to sell, or otherwise dispose of, any shares of Common Stock of the Company     
(other than up to an aggregate of 150,000 shares by executive officers and      
directors subsequent to the completion of the distribution of the shares        
offered hereby) or any securities convertible into, or exercisable or           
exchangeable for, Common Stock of the Company.                                  

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In connection with the Offering and in compliance with applicable law, the  
Underwriters may overallot or effect transactions which stabilize, maintain or  
otherwise affect the price of the Common Stock at a level above that which      
might otherwise prevail in the open market, including by entering stabilizing   
bids, effecting syndicate covering transactions or imposing penalty bids. A     
stabilizing bid means the placing of any bid, or the effecting of any purchase, 
for the purpose of pegging, fixing or maintaining the price of a security. A    
syndicate covering transaction means the placing of any bid on behalf of the    
underwriting syndicate or the effecting of any purchase to reduce a short       
position created in connection with the Offering. A penalty bid means an        
arrangement that permits Smith Barney Inc., as managing underwriter, to reclaim 
a selling concession from a syndicate member in connection with the Offering    
when shares of Common Stock originally sold by such syndicate member are        
purchased in stabilizing or syndicate covering transactions. Such transactions  
may be effected on the New York Stock Exchange, in the over-the-counter market  
or otherwise. The Underwriters are not required to engage in any of these       
activities. Any such activities, if commenced, may be discontinued at any time. 

The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933.    

LEGAL OPINIONS

Gibson, Dunn & Crutcher LLP, Dallas, Texas has rendered an opinion (filed as
an exhibit to the Registration Statement (as defined)) with respect to the      
validity of the shares of Common Stock being offered hereby. Certain legal      
matters are being passed upon for the Underwriters by Cahill Gordon & Reindel   
(a partnership including a professional corporation), New York, New York.       

EXPERTS 

The consolidated financial statements of D.R. Horton, Inc. appearing in D.R.
Horton, Inc.'s Annual Report (Form 10-K) for the year ended September 30, 1996, 
have been audited by Ernst & Young LLP, independent auditors, as set forth in   
their report thereon included therein and incorporated herein by reference.     
Such consolidated financial statements are incorporated herein by reference in  
reliance upon such report given upon the authority of such firm as experts in   
accounting and auditing.                                                        

AVAILABLE INFORMATION 

The Company is subject to the informational requirements of the Securities  
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance       
therewith, files reports and other information with the Securities and Exchange 
Commission (the "Commission"). Reports, proxy and information statements filed  
by the Company with the Commission pursuant to the informational requirements   
of the Exchange Act may be inspected and copied at the public reference         
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,  
D.C. 20549, and at the following Regional Offices of the Commission: New York   
Regional Office, Seven World Trade Center, 13th Floor, New York, New York       
10048; and Chicago Regional Office, Northwest Atrium Center, 500 West Madison   
Street, Room 3190, Chicago, Illinois 60661. Copies of such material may be      
obtained from the Public Reference Section of the Commission at 450 Fifth       
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material is     
also available for inspection at the offices of The New York Stock Exchange,    
Inc., 20 Broad Street, New York, New York 10005. The Commission also maintains  
a Web site (http://www.sec.gov) that contains reports, proxy and information    
statements and other information regarding registrants such as the Company      
which file electronically with the Commission.                                  

The Company has filed with the Commission a Registration Statement under the
Securities Act with respect to the Common Stock offered hereby. This Prospectus 
does not contain all the information set forth in the Registration Statement    
and the exhibits and schedules thereto, to which reference is hereby made. For  
further                                                                         

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information with respect to the Company and such Common Stock, reference is     
made to the Registration Statement, including the documents and exhibits filed  
or incorporated as a part thereof. Statements made in this Prospectus as to the 
contents of any contract, agreement or other document referred to are not       
necessarily complete. With respect to each such contract, agreement or other    
document filed as an exhibit to the Registration Statement or to a document     
incorporated by reference herein, reference is hereby made to the exhibitor for 
a more complete description of the matter involved and each such statement      
shall be deemed qualified in its entirety by such reference.                    

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 

The Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1996, the Company's Quarterly Report on Form 10-Q for the fiscal quarter    
ended December 31, 1996, the description of the Company's Common Stock          
contained in the Company's Registration Statement on Form 8-A filed on          
December 7, 1995, and pages two through seven ("Election of Directors" through  
"Executive Compensation-Compensation Committee Interlocks and Insider           
Participation") and page ten ("Executive Compensation-Transactions with         
Management") contained in the Company's Proxy Statement dated December 20,      
1996, relating to the 1997 Annual Meeting of Stockholders are incorporated in   
this Prospectus by reference. All documents filed by the Company pursuant to    
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of 
this Prospectus and prior to the termination of the Offering shall be deemed to 
be incorporated by reference into this Prospectus and to be a part hereof from  
the date of filing such documents.                                              

Any statement in a document incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that 
a statement contained herein or in any subsequently filed document which is     
incorporated by reference herein modifies or supersedes such statement. Any     
statement so modified or superseded shall not be deemed, except as modified or  
superseded, to constitute a part of this Prospectus.                            

The Company will provide without charge to each person, including any       
beneficial owner, to whom a Prospectus is delivered, on the written or oral     
request of any such person, a copy of any or all of the documents incorporated  
herein by reference (not including exhibits to such documents unless such       
exhibits are specifically incorporated by reference in the information          
contained in this Prospectus). All such requests should be addressed to: D.R.   
Horton, Inc., 1901 Ascension Blvd., Suite 100, Arlington, Texas 76006.          

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Map depicting the states of the United States of America in which the Company   
conducts its operations and a listing of each of the Company's operating        
divisions, with telephone numbers, arranged by geographic region.               

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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION  
OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,    
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED   
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY  
OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A  
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED  
HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER   
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY CIRCUMSTANCES  
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS   
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE   
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE 
SUBSEQUENT TO THE DATE HEREOF.                                                  

------------  

TABLE OF CONTENTS 

                                                                [Download Table]

                                                                          PAGE
                                                                          ----
                                                                              
Prospectus Summary.......................................................   3 
Risk Factors.............................................................   8 
Use of Proceeds..........................................................   9 
Price Range of Common Stock..............................................   9 
Dividend Policy..........................................................   9 
Capitalization...........................................................  10 
Unaudited Pro Forma Financial Data.......................................  11 
Selected Financial Information...........................................  14 
Management's Discussion and Analysis of Results of Operations and             
 Financial Condition.....................................................  15 
Business.................................................................  21 
Underwriting.............................................................  27 
Legal Opinions...........................................................  28 
Experts..................................................................  28 
Available Information....................................................  28 
Incorporation of Certain Information by Reference........................  29 

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

3,500,000 SHARES      

D.R. HORTON, INC. 
CUSTOM HOMES

COMMON STOCK

--------  

PROSPECTUS

MARCH 10, 1997      

--------  

SMITH BARNEY INC. 
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION                                              
MERRILL LYNCH & CO. 
SALOMON BROTHERS INC

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B1’ Filing		Date		First		Last			Other Filings
		3/14/97		1
Filed on:		3/11/97
		3/10/97		1		31			POS AM,  S-3MEF
		3/7/97		9
		2/27/97		5		22			8-K
		1/29/97		5
		1/20/97		9
		12/31/96		3		29			10-Q
		12/20/96		29					10-K,  DEF 14A
		12/2/96		12
		10/15/96		12
		10/1/96		12
		9/30/96		3		29			10-K,  DEF 14A
		12/31/95		3		17
		12/14/95		9
		12/13/95		9
		12/7/95		29
		9/30/95		17		19
		9/30/94		18		19
		10/1/92		4
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