D.R. Horton, Inc.

Company Overview

Business Model: D.R. Horton, Inc. is the largest homebuilding company in the United States by volume, constructing and selling homes across 126 markets in 36 states. Its core business, homebuilding, generated 92% of consolidated revenues in fiscal 2025, primarily from the sale of completed single-family detached homes (84% of home sales revenue) and attached homes. The Company offers a broad range of homes for entry-level, move-up, active adult, and luxury buyers, generally ranging from 1,000 to 4,000 square feet and priced from $250,000 to over $1,000,000. Complementary operations include single-family and multi-family rental properties, a majority-owned residential lot development company (Forestar Group Inc.), and financial services (mortgage financing and title agency services primarily for its homebuyers).

Market Position: D.R. Horton, Inc. has been the largest volume homebuilder in the United States every year since 2002, closing over 1.2 million homes in its 47-year history. It is also one of the largest builders in most of its operating markets. The Company leverages its national, regional, and local scale for greater access to and lower cost of capital, volume discounts from suppliers, and enhanced leverage of general and administrative activities. Its geographic diversification across 126 markets in 36 states aims to mitigate local and regional economic cycles and enhance earnings potential.

Recent Strategic Developments:

• Acquisition: In October 2025, D.R. Horton, Inc. acquired the homebuilding operations of SK Builders for approximately $80 million in cash, expanding its presence in and around Greenville, South Carolina. This acquisition included approximately 160 homes in inventory, 260 lots, and a sales order backlog of 110 homes, along with control of approximately 1,320 additional lots through land purchase contracts.
• Capital Allocation: The Board of Directors approved a new $5.0 billion common stock repurchase authorization in April 2025, replacing the prior $4.0 billion authorization.
• Debt Management: Issued $700 million of 5.5% senior notes due October 2035 and $500 million of 4.85% senior notes due October 2030 in fiscal 2025. Repaid $500 million of 2.5% senior notes at maturity in October 2024 and redeemed $500 million of 2.6% senior notes due October 2025 in September 2025.
• Forestar Group Inc. Expansion: Forestar Group Inc. increased its revolving credit facility to $665 million in October 2025 and issued $500 million of 6.5% senior notes due March 2033 in March 2025, primarily to fund a tender offer for its 3.85% senior notes due 2026.

Geographic Footprint: D.R. Horton, Inc. operates in 126 markets across 36 states, organized into six homebuilding reporting regions:

• Northwest: Colorado, Oregon, Utah, Washington
• Southwest: Arizona, California, Hawaii, Nevada, New Mexico
• South Central: Arkansas, Oklahoma, Texas
• Southeast: Alabama, Florida, Louisiana, Mississippi
• East: Georgia, North Carolina, South Carolina, Tennessee
• North: Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Minnesota, Nebraska, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, Wisconsin

Financial Performance

Revenue Analysis

Profitability Metrics (FY2025):

• Gross Margin: 23.8% (Calculated as (Total Revenue - Cost of Sales) / Total Revenue)
• Operating Margin: 13.8% (Calculated as Operating Income / Total Revenue)
• Net Margin: 10.5% (Calculated as Net Income / Total Revenue)

Investment in Growth (FY2025):

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $137.4 million (Purchases of property and equipment)
• Strategic Investments: $53.1 million (Payments related to business acquisitions, net of cash acquired)

Business Segment Analysis

Homebuilding

Financial Performance (FY2025 vs. FY2024):

• Revenue: $31.5 billion (-7% YoY)
• Pre-tax Income: $4.1 billion (-25% YoY)
• Pre-tax Income as % of Revenues: 13.1% (vs. 16.1% in FY2024)
• Homes Closed: 84,863 (-5% YoY)
• Average Closing Price: $370,400 (-2% YoY)
• Net Sales Orders: 83,423 homes (-4% YoY)
• Value of Net Sales Orders: $30.8 billion (-6% YoY)
• Sales Order Backlog: 10,785 homes (-11% YoY)
• Value of Sales Order Backlog: $4.1 billion (-14% YoY)
• Home Sales Gross Margin: 21.5% (vs. 23.5% in FY2024)
• SG&A Expense as % of Homebuilding Revenues: 8.3% (vs. 7.5% in FY2024)
• Inventory and Land Option Charges: $144.2 million (vs. $68.9 million in FY2024)
• Homes in Inventory: 29,600 (vs. 37,400 in FY2024)
• Owned Lots: 147,000 (vs. 152,500 in FY2024)
• Lots Controlled through Purchase Contracts: 444,900 (vs. 480,400 in FY2024)

Key Growth Drivers: The Company focuses on offering affordable product offerings and maintaining a flexible lot supply. It manages home pricing, sales incentives, and inventory based on local market demand. Increased sales incentives, such as mortgage rate buydowns, were used in fiscal 2025 to adapt to affordability constraints and cautious consumer sentiment, leading to lower gross margins. The Company prioritizes purchasing finished lots from Forestar Group Inc. and other land developers, with 65% of homes closed in fiscal 2025 on lots developed by these entities.

Product Portfolio: Broad range of homes for entry-level, move-up, active adult, and luxury buyers, generally 1,000 to 4,000 square feet and priced from $250,000 to over $1,000,000.

Market Dynamics: New home demand in fiscal 2025 was impacted by affordability constraints and cautious consumer sentiment. The Company adjusts product offerings to meet buyer demand and builds speculative homes to compete with existing homes and improve returns.

Regional Breakdown (FY2025 Revenue / Pre-tax Income):

• Northwest: $2.7 billion / $395.7 million (Pre-tax Income as % of Revenues: 14.7%)
• Southwest: $4.6 billion / $517.1 million (Pre-tax Income as % of Revenues: 11.3%)
• South Central: $6.9 billion / $964.6 million (Pre-tax Income as % of Revenues: 14.0%)
• Southeast: $7.0 billion / $839.9 million (Pre-tax Income as % of Revenues: 12.0%)
• East: $6.1 billion / $834.0 million (Pre-tax Income as % of Revenues: 13.6%)
• North: $4.2 billion / $583.6 million (Pre-tax Income as % of Revenues: 13.8%)

Rental

Financial Performance (FY2025 vs. FY2024):

• Revenue: $1.6 billion (-3% YoY)
• Pre-tax Income: $170.0 million (-26% YoY)
• Pre-tax Income as % of Revenues: 10.4% (vs. 13.6% in FY2024)
• Single-family Rental Homes Closed: 3,460 (-13% YoY)
• Multi-family Rental Units Closed: 2,947 (+34% YoY)
• Rental Inventory: $2.7 billion (vs. $2.9 billion in FY2024)

Product Portfolio: Single-family rental homes within communities marketed for bulk sale, and garden-style apartment communities in high-growth suburban markets.

Market Dynamics: Decline in rental revenues and pre-tax income primarily due to a decrease in the number and average selling price of single-family rental homes closed, combined with lower gross margins on single-family home and multi-family unit closings.

Forestar Group Inc.

Financial Performance (FY2025 vs. FY2024):

• Revenue: $1.7 billion (+10% YoY)
• Pre-tax Income: $219.3 million (-19% YoY)
• Pre-tax Income as % of Revenues: 13.2% (vs. 17.9% in FY2024)
• Lots Sold: 14,240 (-5% YoY), of which 83% (11,751 lots) were sold to D.R. Horton, Inc.
• Revenue from Tract Acres Sold: $103.5 million (vs. $27.0 million in FY2024), of which $91.2 million related to acreage sold to D.R. Horton, Inc.
• Inventory: $2.6 billion (vs. $2.3 billion in FY2024)
• Owned and Controlled Lots: 99,800 (vs. 95,100 in FY2024), of which 40,400 were under contract to sell to or subject to a right of first offer with D.R. Horton, Inc.

Key Growth Drivers: Forestar Group Inc. is a key part of D.R. Horton, Inc.'s strategy to control land and lot positions. It continues to invest in land acquisition and development to expand its residential lot development business across a geographically diversified national platform.

Market Dynamics: Decline in pre-tax income primarily due to lower gross margins on lot sales and higher SG&A costs.

Financial Services

Financial Performance (FY2025 vs. FY2024):

• Revenue: $841.2 million (-5% YoY)
• Pre-tax Income: $278.7 million (-10% YoY)
• Pre-tax Income as % of Revenues: 33.1% (vs. 35.3% in FY2024)
• Mortgage Loans Originated or Brokered: 68,982 (-2% YoY)
• Percentage of D.R. Horton, Inc. Homes Financed by DHI Mortgage: 81% (vs. 78% in FY2024)

Product Portfolio: Mortgage financing and title agency services primarily to D.R. Horton, Inc. homebuyers. DHI Mortgage originates loan products eligible for sale to Fannie Mae, Freddie Mac, or Ginnie Mae, selling substantially all loans and servicing rights to third-party purchasers.

Market Dynamics: Total loan origination volume decreased 2%, and revenues from mortgage operations decreased 4%. Title operations revenues decreased 7% due to fewer transactions. The increase in DHI Mortgage's capture rate (81% of D.R. Horton, Inc. homes financed) partially offset the decrease in home closings.

Capital Allocation Strategy

Shareholder Returns (FY2025):

• Share Repurchases: $4.3 billion (30.7 million shares)
• Dividend Payments: $494.8 million ($1.60 per share declared for FY2025, $0.40 per share paid quarterly)
• Dividend Yield: Not explicitly disclosed, but a quarterly dividend of $0.45 per share was approved in October 2025.
• Future Capital Return Commitments: $3.3 billion remaining on the common stock repurchase authorization as of September 30, 2025.

Balance Sheet Position (as of September 30, 2025):

• Cash and Equivalents: $2.99 billion
• Total Debt: $6.0 billion
• Net Cash Position: ($3.01 billion) (Total Debt - Cash and Equivalents)
• Credit Rating: Homebuilding senior unsecured debt is rated investment grade by all three major rating agencies.
• Debt Maturity Profile: $1.6 billion in fiscal 2026, $604.7 million in fiscal 2027, $1.4 billion in fiscal 2028, $17.5 million in fiscal 2029, none in fiscal 2030, and $2.4 billion thereafter.

Cash Flow Generation (FY2025):

• Operating Cash Flow: $3.4 billion
• Free Cash Flow: Not explicitly disclosed or readily calculable from provided data.
• Cash Conversion Metrics: Not explicitly disclosed.

Operational Excellence

Production & Service Model: D.R. Horton, Inc. views homebuilding as a local business, decentralizing most direct activities to 92 operating divisions across its markets. Substantially all land development and home construction work is performed by subcontractors, selected through competitive bidding. The Company employs personnel to monitor construction, coordinate subcontractors, review quality, and manage customer interactions. Home designs are tailored to local buyer expectations for affordability, size, and features. Construction time for most homes was two to four months in fiscal 2025.

Supply Chain Architecture: Key Suppliers & Partners:

• Subcontractors: Perform substantially all land development and home construction work.
• Materials Suppliers: Volume discounts and rebates from national, regional, and local suppliers. Contracts exceeding one year with certain suppliers are cancelable at the Company's option.
• Land Developers: Forestar Group Inc. (62% owned) and other third-party land developers are key partners for acquiring finished lots.

Facility Network:

• Manufacturing: Not directly involved in manufacturing; relies on subcontractors and suppliers.
• Research & Development: Not explicitly detailed as separate facilities, but product offerings are adjusted by local management teams.
• Distribution: Not explicitly detailed as separate facilities; relies on supply chain for materials.
• Office Facilities: Owns approximately 2.1 million square feet and leases approximately 760,000 square feet of office space across its operating markets for homebuilding, rental, Forestar Group Inc., financial services, and corporate offices.

Operational Metrics:

• Construction Cycle Time: Most homes completed in two to four months in fiscal 2025.
• Land/Lot Control: 75% of lots owned and controlled were through purchase contracts at September 30, 2025.
• Finished Lot Sourcing: 65% of homes closed in fiscal 2025 were on lots developed by Forestar Group Inc. or a third party.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Primarily through commissioned sales employees from sales offices located in furnished model homes in each subdivision.
• Channel Partners: Majority of home closings involve an independent real estate broker.
• Digital Platforms: Digital marketing initiatives, email, search engine marketing, social media, company website, and other real estate websites.
• Traditional Media: Billboards, radio, television, and print media used locally as necessary.

Customer Portfolio: Enterprise Customers: Not explicitly named, but DHI Mortgage's primary focus is to originate loans for D.R. Horton, Inc. homebuilding operations. Strategic Partnerships: Forestar Group Inc. is a key partner for land and lot supply. Customer Concentration: DHI Mortgage provided mortgage financing services for 81% of homes closed by D.R. Horton, Inc. homebuilding operations in fiscal 2025. 71% of DHI Mortgage's loans were sold directly to Fannie Mae, Freddie Mac, or into Ginnie Mae-backed securities, and 27% were sold to one other major financial entity.

Geographic Revenue Distribution:

• Northwest: 8% of homebuilding revenues
• Southwest: 15% of homebuilding revenues
• South Central: 22% of homebuilding revenues
• Southeast: 22% of homebuilding revenues
• East: 19% of homebuilding revenues
• North: 13% of homebuilding revenues

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The residential housing (for sale and rental) and lot development markets are highly competitive and cyclical, significantly affected by economic and real estate conditions such as employment levels, consumer confidence, housing demand, financing availability, interest rates, and inflation.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Homebuilding & Rental: Local, regional, and national homebuilding and rental companies, as well as existing home sales and rental properties. Competition is based on price, location, quality, design, and mortgage financing terms.
• Financial Services: Other mortgage lenders and title companies, including national, regional, and local mortgage banks and financial institutions. Some competitors may have fewer governmental regulations, greater access to capital, or offer a broader array of products.

Emerging Competitive Threats: Not explicitly detailed beyond general industry competition.

Competitive Response Strategy: D.R. Horton, Inc. aims to maintain its competitive advantage by leveraging its scale, strong balance sheet, and liquidity. It focuses on developing experienced teams, diversifying geographic risk, offering a broad range of affordable products, and adjusting pricing and incentives to meet demand. The Company also emphasizes efficient land development, construction, and operational activities, and invests in rental operations.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Cyclicality: Homebuilding, rental, and land development operations are cyclical and sensitive to economic conditions (employment, consumer confidence, housing demand, financing availability, interest rates, inflation). Mitigation includes geographic diversification and flexible product offerings.
• Interest Rate Sensitivity: Higher mortgage interest rates reduce affordability, requiring pricing adjustments and incentives, which can lower gross margins. Prolonged high rates could adversely impact business.
• Inflation/Deflation: Inflation increases costs of land, materials, labor, and capital. Deflation could decrease inventory values and increase existing home supply.
• Public Health Issues: Major epidemics/pandemics could reduce customer traffic, disrupt supply chains, and impact labor markets.
• Weather Conditions & Natural Disasters: Can delay development/construction, affect material/labor costs, damage homes, and impact demand, especially in regions like California, Florida, and Texas.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Shortages & Delays: Difficulties in acquiring suitable land, building materials, and skilled labor, or delays in regulatory approvals, can increase costs and delay deliveries. Past disruptions led to lengthened construction cycles and increased material costs.
• Subcontractor Reliance: Substantially all construction is performed by subcontractors, posing risks if they fail to meet quality standards or comply with laws.
• Capacity Constraints: Not explicitly detailed, but implied by reliance on subcontractors and material availability.

Home Warranty & Construction Defect Claims:

• Liability: Significant potential liabilities from warranty and construction defect claims. Reserves are established based on historical experience, but actual costs could differ significantly.
• Insurance: Relies on product liability insurance and subcontractor indemnities, but self-insured retentions are significant, and coverage is limited and costly. After June 1, 2021, the Company is almost exclusively self-insured for construction defect exposures, except for contractual risk transfer.

Information Technology Failures & Cybersecurity Incidents:

• Data Security: Risks of unauthorized access, data theft, viruses, ransomware, and phishing attacks. Use of AI may increase sophistication of attacks.
• Impact: Could disrupt business, damage reputation, lead to litigation, penalties, or significant costs for remediation and compliance.
• Mitigation: Multi-factor authentication, layered email protection, zero-trust security model, continuous monitoring, regular scans, quarterly third-party penetration testing, incident response process, data backups, and mandatory employee training.

Financial & Regulatory Risks

Market & Financial Risks:

• Capital Access: Adverse developments in capital markets or financial institutions could limit access to capital, increase costs, and impact liquidity.
• Mortgage Financing Availability: Reductions in government agency financing (Fannie Mae, Freddie Mac, Ginnie Mae), changes in programs, or inability to sell mortgage loans on attractive terms could decrease buyer financing and adversely affect business.
• Debt Levels: Significant debt ($6.0 billion consolidated) could limit financial flexibility and ability to raise additional capital.
• Covenant Compliance: Debt instruments contain financial covenants (leverage ratio, tangible net worth, liquidity) that, if violated, could accelerate debt repayment.
• Debt Rating Downgrade: Could make accessing capital markets more difficult or expensive.

Regulatory & Compliance Risks:

• Extensive Regulations: Subject to complex federal, state, and local regulations affecting land development, home construction (zoning, density, building codes, environmental), advertising, labor, and real estate sales.
• Environmental Laws: Increasing costs and limitations from environmental laws, including climate-related disclosure legislation (e.g., California), could impact operations.
• Financial Services Regulation: DHI Mortgage is subject to extensive state and federal laws and regulations (CFPB, FHFA, HUD, FHA, VA, USDA, Fannie Mae, Freddie Mac, Ginnie Mae), with regular examinations and potential for more stringent compliance standards.
• Tax Law Changes: Changes in income tax legislation could affect effective tax rates and deferred tax assets.
• Securities Laws: Publicly traded status of D.R. Horton, Inc. and Forestar Group Inc. subjects them to extensive securities laws, with potential for increased compliance costs.

Geopolitical & External Risks

Geopolitical Exposure: Not explicitly detailed beyond general economic slowdowns from "deployments of U.S. military personnel to foreign regions, terrorist attacks, other acts of violence or threats to national security and any corresponding response by the United States or others, domestic or international instability or social or political unrest."

Innovation & Technology Leadership

Research & Development Focus: Not explicitly detailed as a separate R&D function or investment. The Company's innovation is primarily focused on adapting home designs and product offerings to local market demands and affordability.

Core Technology Areas:

• Information Technology Systems: Utilizes IT and AI for operational management, marketing, financial information, and cybersecurity.
• Cybersecurity: Implements a multi-layered, proactive approach based on NIST Cybersecurity Framework, including multi-factor authentication, layered email protection, zero-trust security model, continuous monitoring, regular scans, and quarterly penetration testing.

Intellectual Property Portfolio: Not explicitly detailed.

Technology Partnerships: Not explicitly detailed.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company supports a culture of developing future leaders from its existing workforce, with 18 people placed into new homebuilding market leadership positions in fiscal 2025, all promoted from within. The average tenure of the executive team is 28 years, homebuilding region presidents and vice presidents is 20 years, and homebuilding division presidents and city managers is 15 years. The Board of Directors is actively involved in executive leadership succession planning.

Board Composition: The Board of Directors considers cybersecurity and other information technology risk as part of its risk oversight function, receiving annual reports from the CIO and CSRO.

Human Capital Strategy

Workforce Composition (as of September 30, 2025):

• Total Employees: 14,341
• Geographic Distribution: 9,972 in homebuilding, 2,967 in financial services, 586 at corporate office, 330 in rental operations, 433 at Forestar Group Inc., and 53 in other businesses.
• Skill Mix: Of homebuilding employees, 3,626 are in construction, 2,935 in sales and marketing, and 3,411 in office personnel.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Active recruiting team partners with college campuses and external organizations, including a paid internship program.
• Retention Metrics: Long-term retention is a focus, evidenced by average tenures of executive (28 years), regional (20 years), and divisional (15 years) management teams.
• Employee Value Proposition: Competitive compensation and benefits, including base pay, incentive bonus, stock compensation plans, paid time off, healthcare, life insurance, disability, 401(k) savings plan, employee stock purchase plan, and access to professional resources for mental/physical health, family, and financial planning.

Diversity & Development:

• Diversity Metrics: Not explicitly detailed.
• Development Programs: Specialized training for key business functions (purchasing, construction, sales, financial management) and a Leadership Development Program for future leaders.
• Culture & Engagement: Focus on honest, ethical, and respectful conduct; annual code of conduct certification; internal training on discrimination prevention; commitment to a productive, positive, and inclusive workplace.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Not explicitly detailed.
• Carbon Neutrality: Not explicitly detailed.
• Renewable Energy: Not explicitly detailed.

Supply Chain Sustainability: Not explicitly detailed.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed.
• Product Impact: Focus on home affordability.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Generally closes more homes and generates greater revenues and pre-tax income in the third and fourth quarters of its fiscal year.
• Economic Sensitivity: Business is significantly affected by changes in general and local economic and real estate conditions.
• Industry Cycles: Homebuilding, rental, and lot development industries are cyclical.

Planning & Forecasting: The seasonal nature of the business can cause significant variations in working capital requirements, meaning quarterly results are not necessarily representative of the full fiscal year.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Homebuilding: Subject to federal, state, and local laws and regulations including zoning, density, development requirements, building codes, environmental, advertising, labor, and real estate sales rules. New developments may be subject to assessments for public improvements.
• Environmental: Subject to extensive local, state, and federal statutes concerning health, safety, and the environment. Compliance requirements vary by site. Climate-related disclosure legislation (e.g., California) could increase costs.
• Financial Services: DHI Mortgage must comply with extensive state and federal laws and regulations administered by numerous agencies (CFPB, FHFA, HUD, FHA, VA, USDA, Fannie Mae, Freddie Mac, Ginnie Mae), including licensing, consumer disclosures, fair lending, and real estate settlement procedures.

Trade & Export Controls: Not explicitly detailed.

Legal Proceedings:

• Stormwater Compliance: Resolved a matter with the EPA, Alabama Department of Environmental Management, and South Carolina Department of Health and Environmental Control through a consent decree in August 2024, incurring a $400,000 civil penalty and agreeing to a supplemental environmental project.
• Maryland Department of Environment Suit: MDE filed suit in September 2024 against D.R. Horton, Inc. and Forestar Group Inc. regarding alleged stormwater compliance issues in Maryland from 2022-2024, seeking injunctive relief and civil penalties. The Company does not anticipate a material adverse effect.
• Forestar Group Inc. Derivative Complaint: A stockholder filed a derivative complaint in April 2025 against D.R. Horton, Inc., Forestar Group Inc.'s Executive Chairman, and certain Forestar Group Inc. directors, alleging breach of fiduciary duty related to lot sale transactions between Forestar Group Inc. and D.R. Horton, Inc. The Company disputes the allegations and does not anticipate a material adverse effect.

Tax Strategy & Considerations

Tax Profile (FY2025):

• Effective Tax Rate: 23.6% (vs. 23.5% in FY2024)
• Geographic Tax Planning: Subject to federal and state income taxes in multiple jurisdictions.
• Tax Reform Impact: The "One Big Beautiful Bill Act," signed July 4, 2025, terminates the energy efficient home tax credit for homes closing after June 30, 2026, which will result in a reduced tax benefit beginning in fiscal 2026. Tax benefits from this credit were $39.5 million in fiscal 2025.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Generally maintains product liability insurance for home warranty and construction defect claims, but coverage is limited and costly, with significant self-insured retentions. After June 1, 2021, the Company is almost exclusively self-insured for construction defect exposures, except for contractual risk transfer.
• Risk Transfer Mechanisms: Seeks indemnities and certificates of insurance from subcontractors. In some states, purchases insurance policies from third-party carriers or its wholly owned captive insurance subsidiary, naming subcontractors as additional insureds.
• Surety Bonds: Had $3.5 billion of outstanding surety bonds at September 30, 2025, to secure performance under various contracts.
• Letters of Credit: Had $282.3 million of outstanding letters of credit at September 30, 2025.