<SUBMISSION>
<ACCESSION-NUMBER>0000950134-02-000357
<TYPE>S-4/A
<PUBLIC-DOCUMENT-COUNT>11
<FILING-DATE>20020116
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HORTON D R INC /DE/
<CIK>0000882184
<ASSIGNED-SIC>1531
<IRS-NUMBER>752386963
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-4/A
<ACT>33
<FILE-NUMBER>333-73888
<FILM-NUMBER>2510575
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>STE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
<PHONE>8178568200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>SUITE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-4/A
<SEQUENCE>1
<FILENAME>d92411a3s-4a.htm
<DESCRIPTION>AMENDMENT NO. 3 TO FORM S-4
<TEXT>
<HTML>
<HEAD>
<TITLE>D.R. Horton, Inc. Amendment No. 3 to Form S-4</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

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<B><FONT size="2">As filed with the Securities and Exchange
Commission on January&nbsp;16, 2002</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right">
<B><FONT size="2">Registration No.&nbsp;333-73888</FONT></B>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

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<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B>Washington D.C. 20549</B>
</DIV>

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<HR size="1" width="26%" align="center" noshade>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B>Amendment No. 3</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B>to</B>
</DIV>

<DIV align="center">
<B><FONT size="5">Form S-4</FONT></B>
</DIV>

<DIV align="center">
<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">D.R. Horton, Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of Registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<B><FONT size="2">Delaware</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">1531</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">75-2386963</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">(State or other jurisdiction of</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<I><FONT size="2">(Primary Standard Industrial</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<I><FONT size="2">(I.R.S. Employer</FONT></I></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">incorporation or organization)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<I><FONT size="2">Classification Code Number)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<I><FONT size="2">Identification No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">1901 Ascension Blvd., Suite&nbsp;100</FONT></B>

<DIV align="center">
<B><FONT size="2">Arlington, Texas 76006</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(817)&nbsp;856-8200</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">including area code, of Registrant&#146;s
principal executive offices)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">Paul W. Buchschacher</FONT></B>

<DIV align="center">
<B><FONT size="2">Vice President&nbsp;&#38; Corporate
Counsel</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">1901 Ascension Blvd., Suite&nbsp;100</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Arlington, Texas 76006</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(817)&nbsp;856-8200</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name and address, including zip code, and
telephone number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">including area code, of agent for
service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">With copies to:</FONT></I></B>

<P align="center">
<B><FONT size="2">Irwin F. Sentilles,&nbsp;III</FONT></B>

<DIV align="center">
<B><FONT size="2">Gibson, Dunn&nbsp;&#38; Crutcher LLP</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">2100 McKinney Avenue,
Suite&nbsp;1100</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Dallas, Texas 75201</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(214)&nbsp;698-3100</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximate date
of commencement of proposed sale to the public:
</FONT></B><FONT size="2">As soon as practicable after this
Registration Statement becomes effective and the effective time
of the merger of Schuler Homes, Inc. with and into the
Registrant as described in the Agreement and Plan of Merger
dated as of October&nbsp;22, 2001, as amended.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the
securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is
compliance with General Instruction G, check the following
box:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is
filed to register additional securities for an offering pursuant
to Rule&nbsp;462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a
post-effective amendment filed pursuant to Rule&nbsp;462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant
hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section&nbsp;8(a) of the Securities
Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
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<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
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<TR><TD colspan="9"><A HREF="#000">D.R. HORTON, INC. -- SCHULER HOMES, INC. JOINT PROXY STATEMENT/PROSPECTUS Merger Proposed: Your Vote Is Important</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">QUESTIONS AND ANSWERS ABOUT THE MERGER</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SUMMARY</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">General</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">The Companies</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">The Merger Consideration (see page 65)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Election Procedure (see page 67)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Recommendation of the Schuler Board of Directors (see page 40)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">Recommendation of the D.R. Horton Board of Directors (see page 42)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">Schuler&#146;s Reasons for the Merger (see page 40)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#011">D.R. Horton&#146;s Reasons for the Merger (see page 42)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#012">Required Vote (see pages 32 and 34)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#013">Opinion of Schuler&#146;s Financial Advisor (see page 45)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014">Opinion of D.R. Horton&#146;s Financial Advisor (see page 49)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">Ownership and Board Composition of D.R. Horton After the Merger (see page 78)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#016">Appraisal Rights (see page 60)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#017">Terms and Conditions of the Merger Agreement (see page 68)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#018">Comparative Rights of Stockholders (see page 91)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#019">United States Federal Income Tax Consequences of the Merger to Schuler Stockholders (see page 96)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">Interests of Certain Persons in the Merger (see page 57)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">Selected Historical Financial Data of D.R. Horton</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#022">Selected Historical Financial Data of Schuler</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#023">Selected Historical Financial Data of Schuler Residential</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#024">Selected Historical Financial Data of Western Pacific</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#025">Summary Selected Unaudited Pro Forma Combined Financial Data (see page 80)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#026">Comparative Per Share Data</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#027">Market Price and Dividend Data</A></TD></TR>
<TR><TD colspan="9"><A HREF="#028">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#029">THE STOCKHOLDER MEETINGS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#030">The Schuler Special Meeting</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#031">The D.R. Horton Annual Meeting</A></TD></TR>
<TR><TD colspan="9"><A HREF="#032">PROXIES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#033">Proxy Cards</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#034">Solicitation of Proxies</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#035">How to Revoke Your Proxy</A></TD></TR>
<TR><TD colspan="9"><A HREF="#036">THE MERGER</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#037">Background to the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#038">Recommendation of the Schuler Board of Directors; Schuler&#146;s Reasons for the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#039">Recommendations of the D.R. Horton Board of Directors; D.R. Horton&#146;s Reasons for the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#040">Opinion of Schuler&#146;s Financial Advisor</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#041">Opinion of D.R. Horton&#146;s Financial Advisor</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#042">Accounting Treatment</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#043">Interests of Certain Persons in the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#044">Appraisal Rights</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#045">New York Stock Exchange and Nasdaq National Market Listing</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#046">Debt Financing</A></TD></TR>
<TR><TD colspan="9"><A HREF="#047">THE MERGER AGREEMENT</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#048">General</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#049">Effective Time</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#050">Corporation Organization and Governance</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#051">Merger Consideration</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#052">Election Procedure</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#053">Schuler Stock Options</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#054">Representations and Warranties</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#055">Actions of Schuler and D.R. Horton Prior to the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#056">Conditions to the Completion of the Merger</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#057">Termination of the Merger Agreement</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#058">Termination Fees and Expenses</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#059">Effect of Termination</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#060">Amendments</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#061">Compensation and Benefits</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#062">Schuler Directors&#146; and Officers&#146; Insurance and Indemnification</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#063">Mutual Release of Obligations; Insurance</A></TD></TR>
<TR><TD colspan="9"><A HREF="#064">DIRECTORS AND MANAGEMENT OF D.R. HORTON FOLLOWING THE MERGER</A></TD></TR>
<TR><TD colspan="9"><A HREF="#065">VOTING AGREEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#066">AFFILIATE AGREEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#067">Restrictions on Resales of D.R. Horton Common Stock by Schuler Affiliates</A></TD></TR>
<TR><TD colspan="9"><A HREF="#068">UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#069">DESCRIPTION OF D.R. HORTON CAPITAL STOCK</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#070">D.R. Horton Preferred Stock</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#071">D.R. Horton Common Stock</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#072">Anti-Takeover Effects of Provisions of D.R. Horton&#146;s Charter and Bylaws</A></TD></TR>
<TR><TD colspan="9"><A HREF="#073">COMPARATIVE RIGHTS OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#074">UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER</A></TD></TR>
<TR><TD colspan="9"><A HREF="#075">ADDITIONAL INFORMATION ABOUT D.R. HORTON</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#076">Directors and Executive Officers</A></TD></TR>
<TR><TD colspan="9"><A HREF="#077">D.R. Horton&#146;s Principal Stockholders</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#078">Management</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#079">Certain Other Beneficial Owners</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#080">Executive Compensation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#081">Director Compensation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#082">Transactions with Management</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#083">Compensation Committee Interlocks and Insider Participation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#084">Committee Report on Executive Compensation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#085">Stock Performance</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#086">Meetings and Committees of the Board</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#087">Audit Committee Report</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#088">Independent Auditors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#089">Audit Fees and Other Fees</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#090">Section 16(a) Beneficial Ownership Reporting Compliance</A></TD></TR>
<TR><TD colspan="9"><A HREF="#091">ADDITIONAL MATTERS FOR CONSIDERATION OF D.R. HORTON STOCKHOLDERS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#092">Election of Directors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#093">Amendment of 1991 Stock Incentive Plan</A></TD></TR>
<TR><TD colspan="9"><A HREF="#094">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#095">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#096">STOCKHOLDER PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#097">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#098">ARTICLE 1 The Merger</A></TD></TR>
<TR><TD colspan="9"><A HREF="#099">ARTICLE 2 Effect of the Merger on the Capital Stock of the Constituent Corporations; Exchange of Certificates</A></TD></TR>
<TR><TD colspan="9"><A HREF="#100">ARTICLE 3 Representations and Warranties of the Company</A></TD></TR>
<TR><TD colspan="9"><A HREF="#101">ARTICLE 4 Representations and Warranties of DHI</A></TD></TR>
<TR><TD colspan="9"><A HREF="#102">ARTICLE 5 Conduct of Business Pending the Merger</A></TD></TR>
<TR><TD colspan="9"><A HREF="#103">ARTICLE 6 Additional Agreements</A></TD></TR>
<TR><TD colspan="9"><A HREF="#104">ARTICLE 7 Termination, Amendment and Waiver</A></TD></TR>
<TR><TD colspan="9"><A HREF="#105">ARTICLE 8 Conditions to Closing</A></TD></TR>
<TR><TD colspan="9"><A HREF="#106">ARTICLE 9 General Provisions</A></TD></TR>
<TR><TD colspan="9"><A HREF="#107">DELAWARE GENERAL CORPORATION LAW SECTION 262 APPRAISAL RIGHTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#108">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="d92411a3ex15-1.txt">EX-15.1 Letter - Unaudited Interim Financial Info</A></TD></TR>
<TR><TD colspan="9"><A HREF="d92411a3ex23-1.txt">EX-23.1 Consent of Ernst & Young LLP-Ft Worth, TX</A></TD></TR>
<TR><TD colspan="9"><A HREF="d92411a3ex23-2.txt">EX-23.2 Consent of Ernst & Young LLP-Los Angeles</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<IMG src="d92411a3schuler.jpg" alt="(SCHULER HOMES LOGO)">
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<FONT size="2">January&nbsp;17, 2002
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">Dear Schuler Homes Stockholder:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You are cordially invited to attend a special
meeting of stockholders of Schuler Homes, Inc. to be held at 400
Continental Boulevard, Suite&nbsp;100, El Segundo, California
90245, on Thursday, February&nbsp;21, 2002, at 9:00&nbsp;a.m.
local time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the special meeting, you will be asked to vote
on the merger of Schuler with and into D.R. Horton, Inc. At the
effective time of the merger, the separate corporate existence
of Schuler will cease, and D.R.&nbsp;Horton will be the
surviving corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors believes that the merger
offers significant potential by combining the strengths and
attributes of two premier companies. It is expected to create
the second largest homebuilder based on units closed. We believe
the merger allows you to participate in a more diversified
company. In addition, we expect the transaction to be beneficial
to you since D.R.&nbsp;Horton enjoys significantly greater
liquidity and superior access to the capital markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if the merger is completed, each share of your Schuler
Class&nbsp;A common stock and Class&nbsp;B common stock
outstanding immediately prior to the effective time of the
merger will be canceled and converted into the right to receive
the merger consideration. The base merger consideration for each
share of Schuler common stock will consist of a combination of
$4.09 in cash and a fraction of a share of D.R. Horton common
stock. Alternatively, you may elect to receive merger
consideration in the form of all cash or all D.R.&nbsp;Horton
common stock in an amount equal to the base merger
consideration. However, because both the total cash portion of
the merger consideration and the total number of shares of
D.R.&nbsp;Horton common stock to be issued as merger
consideration will be fixed, elections to receive all cash or
all D.R. Horton common stock will be subject to proration. You
do not have to make an election to receive the base merger
consideration. If you decide to make an election, however, you
must make the election for all of your shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exact number of shares of D.R.&nbsp;Horton
common stock that will be included in the base merger
consideration will be based on the average closing price of
D.R.&nbsp;Horton common stock as reported for New York Stock
Exchange composite transactions for the 15 trading days ending
on, and including, the third trading day prior to the special
meeting. Subject to the provisions of the merger agreement, and
as more fully described in the enclosed Joint Proxy Statement/
Prospectus, the fraction of a share of D.R. Horton common stock
per share of Schuler common stock included in the base merger
consideration will range from .487, if the average closing price
is $27.51 or higher, to .635, if the average closing price is
$17.50 or lower. However, if the average closing price is less
than $16.00, Schuler may terminate the merger agreement unless
D.R.&nbsp;Horton makes an election to increase the cash portion
of the merger consideration or the stock portion of the merger
consideration, or a combination thereof, so that the base merger
consideration for each share of Schuler common stock equals at
least $14.25, valued at the average closing price.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming the average closing price for the merger
was the closing price of D.R.&nbsp;Horton common stock on
January&nbsp;14, 2002, which was $30.58, the base merger
consideration would consist of $4.09 and .487&nbsp;shares of
D.R.&nbsp;Horton common stock for each outstanding share of
Schuler common stock, for a total merger consideration of
$18.98&nbsp;per share. Promptly after determination of the base
merger consideration, Schuler and D.R.&nbsp;Horton will issue a
press release advising their stockholders of the fraction of a
share of D.R.&nbsp;Horton common stock included in the base
merger consideration.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An additional illustration of the different
amounts of base merger consideration Schuler stockholders would
receive for each share of Schuler common stock, based on various
assumed average closing prices for D.R.&nbsp;Horton common
stock, is set forth on page&nbsp;3 of the enclosed Joint Proxy
Statement/ Prospectus. Since the number of shares of D.R. Horton
common stock you will receive will be calculated based on an
average closing price, the market value of the shares of D.R.
Horton common stock that you receive upon completion of the
merger may be greater or less than the calculated value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors has unanimously
determined that the merger agreement is advisable, fair to and
in the best interests of Schuler and its stockholders and
recommends that you vote <B>FOR</B> approval and adoption of the
merger agreement and the transactions contemplated by the merger
agreement. I strongly support the merger and join with the other
members of the board in enthusiastically recommending the merger
to you.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying Joint Proxy Statement/
Prospectus provides detailed information about the proposed
merger. We encourage you to read carefully the entire document,
including the annexes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whether or not you plan to attend the special
meeting, please take the time to vote by completing and mailing
your proxy card in the enclosed envelope as promptly as possible
so that your shares will be voted at the special meeting. This
will not limit your right to vote in person or to attend the
special meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Please refer to the election form and letter of
transmittal which will be mailed separately for instructions
regarding your stock certificates.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Very truly yours,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="d92411a3d9241199.gif" alt="(JAMES K. SCHULER)"></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">JAMES K. SCHULER
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Co-Chairman, President and Chief Executive
	Officer</FONT></I></TD>
</TR>

</TABLE>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<IMG src="d92411a3d9241166.gif" alt="(LOGO)">
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<FONT size="2">January&nbsp;17, 2002
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">Dear D.R. Horton Stockholder:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You are cordially invited to attend the 2002
annual meeting of the stockholders of D.R. Horton, Inc. to be
held at 1901 Ascension Blvd., Suite&nbsp;100, Arlington, Texas
76006, on Thursday, February&nbsp;21, 2002, at 11:00&nbsp;a.m.
local time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton has entered into a merger agreement
with Schuler Homes, Inc. providing for the merger of Schuler
into D.R. Horton, with D.R. Horton as the surviving corporation.
At the annual meeting, we will ask you to consider and vote on
the approval and adoption of the merger agreement and the
transactions contemplated by the merger agreement, including the
issuance of D.R. Horton common stock in connection with the
merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors believes that the merger
offers significant strategic benefits for D.R. Horton and its
stockholders. We expect to create the nation&#146;s second
largest homebuilder based on units closed. The merger
strengthens D.R. Horton&#146;s current market position while
expanding its geographic presence and product offerings in key
Western markets. On a combined basis, D.R. Horton will become
the largest homebuilder in Southern California and the second
largest in the State of California. In addition, the combined
companies will be ranked first in market share in nine markets,
and will be ranked in the top five in an additional 20 markets,
based on units closed. The merger also reflects our strategy of
pursuing acquisitions of homebuilders that have strong
management teams. We expect the merger to be accretive to
earnings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors has determined that the
merger is advisable and is in the best interests of D.R. Horton
and its stockholders, has unanimously approved the merger and
the issuance of D.R. Horton common stock in connection with the
merger, and recommends that you vote <B>FOR</B> this proposal. I
strongly support the merger and join with the other members of
the board in enthusiastically recommending the merger to you.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to voting on the merger agreement, at
the annual meeting we will ask you to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">elect ten directors;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">consider and vote on an amendment to the D.R.
	Horton 1991 Stock Incentive Plan to increase the total number of
	shares authorized for issuance thereunder by
	1,600,000&nbsp;shares, with the amendment to be effective upon
	effectiveness of the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors recommends that you vote
<B>FOR</B> these proposals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying Joint Proxy Statement/
Prospectus provides detailed information about the proposed
merger and the other matters to be voted on at the annual
meeting. We encourage you to read carefully the entire document,
including the annexes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whether or not you plan to attend the annual
meeting, please take the time to vote by completing and mailing
your proxy card in the enclosed envelope as promptly as possible
so that your shares will be voted at the annual meeting. Doing
so will not limit your right to vote in person or to attend the
annual meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Very truly yours,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="d92411a3d9241104.gif" alt="(-s- DONALD R. HORTON)"></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">DONALD R. HORTON
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chairman of the Board</FONT></I></TD>
</TR>

</TABLE>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">SCHULER HOMES, INC.</FONT></B>

<P align="center">
<B>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</B>

<DIV align="center">
<B>To be held on February&nbsp;21, 2002</B>
</DIV>

<P align="left">
<FONT size="2">To Our Stockholders:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notice is hereby given that Schuler Homes, Inc.
is holding a special meeting of its stockholders at
9:00&nbsp;a.m. local time, on Thursday, February&nbsp;21, 2002,
at 400 Continental Boulevard, Suite&nbsp;100, El&nbsp;Segundo,
California 90245, for the following purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">1.&nbsp;To consider and vote on a proposal to
	approve and adopt the Agreement and Plan of Merger dated as of
	October&nbsp;22, 2001, as amended November&nbsp;8, 2001, between
	D.R. Horton, Inc. and Schuler Homes, Inc., and the transactions
	contemplated by the merger agreement.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">2.&nbsp;To transact any other business that
	properly comes before the meeting or any adjournment or
	postponement of the meeting.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only stockholders of record at the close of
business on January&nbsp;14, 2002, will be entitled to notice of
or to vote at the meeting or any adjournment or postponement of
that meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">By Order of the Board of Directors
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="d92411a3d9241199.gif" alt="(JAMES K. SCHULER)"></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">JAMES K. SCHULER
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Co-Chairman, President and</FONT></I></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">January&nbsp;17, 2002
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Important: To ensure that your stock is
represented at the special meeting, please fill in, date and
sign the enclosed proxy and return it promptly in the enclosed
return envelope, which requires no postage if mailed in the
United States.</FONT></B>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">D.R. HORTON, INC.</FONT></B>

<P align="center">
<B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</B>

<DIV align="center">
<B>To be held on February&nbsp;21, 2002</B>
</DIV>

<P align="left">
<FONT size="2">To Our Stockholders:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notice is hereby given that D.R. Horton, Inc. is
holding its 2002 annual meeting of stockholders at
11:00&nbsp;a.m. local time, on Thursday, February&nbsp;21, 2002,
at 1901&nbsp;Ascension Blvd., Suite&nbsp;100, Arlington, Texas
76006 for the following purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">1.&nbsp;To consider and vote on a proposal to
	approve and adopt the Agreement and Plan of Merger, dated as of
	October&nbsp;22, 2001, as amended November&nbsp;8, 2001, between
	D.R. Horton, Inc. and Schuler Homes, Inc., and the transactions
	contemplated by the merger agreement, including the issuance of
	D.R.&nbsp;Horton common stock in connection with the merger of
	Schuler into D.R. Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">2.&nbsp;To elect ten directors;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">3.&nbsp;To consider and vote on an amendment to
	the D.R. Horton 1991 Stock Incentive Plan to increase the total
	number of shares authorized for issuance thereunder by
	1,600,000&nbsp;shares;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">4.&nbsp;To transact any other business that
	properly comes before the meeting or any adjournment or
	postponement of the meeting.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only stockholders of record at the close of
business on January&nbsp;14, 2002, will be entitled to notice of
or to vote at the meeting or any adjournment or postponement of
the meeting.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">By Order of the Board of Directors
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<IMG src="d92411a3d9241104.gif" alt="(-s- DONALD R. HORTON)"></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">DONALD R. HORTON
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<I><FONT size="2">Chairman of the Board</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">January&nbsp;17, 2002
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Important: To ensure that your shares are
represented at the annual meeting, please fill in, date and sign
the enclosed proxy and return it promptly in the enclosed return
envelope, which requires no postage if mailed in the United
States.</FONT></B>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "D.R. HORTON, INC. -- SCHULER HOMES, INC. JOINT PROXY STATEMENT/PROSPECTUS Merger Proposed: Your Vote Is Important" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="4">D.R.&nbsp;HORTON, INC.&nbsp;&#151; SCHULER
HOMES, INC.</FONT></B>

<P align="center">
<B>JOINT PROXY STATEMENT/ PROSPECTUS</B>

<P align="center">
<B>Merger Proposed: Your Vote Is Important</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The boards of directors of D.R.&nbsp;Horton, Inc.
and Schuler Homes, Inc. have each unanimously approved the
merger of Schuler into D.R.&nbsp;Horton pursuant to the terms of
a merger agreement entered into on October&nbsp;22, 2001, as
amended November&nbsp;8, 2001. As a result, at the effective
time of the merger, the separate corporate existence of Schuler
will cease, and D.R.&nbsp;Horton will be the surviving
corporation in the merger. In order to complete the merger, both
companies must obtain the approval of their stockholders.
Meetings of the stockholders of Schuler and D.R.&nbsp;Horton
will be held on February&nbsp;21, 2002 to vote on the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if the merger is completed, each share of Schuler Class&nbsp;A
common stock and Class&nbsp;B common stock outstanding
immediately prior to the effective time of the merger will be
canceled and converted into the right to receive the merger
consideration. The base merger consideration for each share of
Schuler common stock will consist of a combination of $4.09 in
cash and a fraction of a share of D.R.&nbsp;Horton common stock
determined as set forth in the table below, based on the average
closing price of D.R.&nbsp;Horton common stock as reported for
New York Stock Exchange composite transactions for the 15
trading days ending on, and including, the third trading day
prior to the Schuler stockholder meeting:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Total Amount of Base Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Consideration for Each Share of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Common Stock Consisting of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Average Closing Price</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">$4.09 in Cash and Shares of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">of D.R.&nbsp;Horton</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Issued for Each Schuler Share</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">at the Average Closing Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.51 or higher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.487&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49 or higher
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.51 to $27.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $13.395 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.50 to $23.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.570&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21 to $17.49
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.51 to $19.49
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $11.115 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.00 to $17.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.635&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$14.25 to $15.20
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the average closing price of D.R.&nbsp;Horton
common stock determined as set forth above is less than $16.00,
the total amount of the base merger consideration would be less
than $14.25. However, in that event, Schuler can terminate the
merger agreement, unless D.R.&nbsp;Horton makes an election to
increase the cash portion of the merger consideration or the
stock portion of the merger consideration, or both, so that the
amount of the base merger consideration of cash and
D.R.&nbsp;Horton common stock for each share of Schuler common
stock equals at least&nbsp;$14.25.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alternatively, a Schuler stockholder may elect to
receive the amount of the base merger consideration in the form
of all cash or all D.R.&nbsp;Horton common stock. However,
because both the total cash portion of the merger consideration
and the total number of shares of D.R.&nbsp;Horton common stock
to be issued as merger consideration will be fixed, that
election will be subject to proration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Joint Proxy Statement/ Prospectus provides
Schuler stockholders and D.R.&nbsp;Horton stockholders with
detailed information about the proposed merger. It also
constitutes the prospectus of D.R.&nbsp;Horton with respect to
its common stock to be issued to the stockholders of Schuler in
connection with the merger. In addition, this Joint Proxy
Statement/ Prospectus constitutes the proxy statement for the
2002 annual meeting of D.R.&nbsp;Horton stockholders. We
encourage you to read this entire document carefully.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;22, 2001, the day before the
merger was announced, the closing price of D.R.&nbsp;Horton
common stock, which is traded on the New York Stock Exchange
under the symbol &#147;DHI&#148;, was $21.10. On the same day,
the last sale price of Schuler Class&nbsp;A common stock, which
is traded on the Nasdaq National Market under the symbol
&#147;SHLR&#148;, was $12.00. On January&nbsp;14, 2002, the
closing price of D.R.&nbsp;Horton common stock reported on the
New York Stock Exchange composite tape was $30.58&nbsp;per
share, and the last sale price of Schuler Class&nbsp;A common
stock reported on the Nasdaq National Market was $19.00&nbsp;per
share. Assuming the average closing price for the merger were
the closing price of D.R.&nbsp;Horton common stock on
January&nbsp;14, 2002, the base merger consideration would
consist of $4.09 and .487&nbsp;shares of D.R.&nbsp;Horton common
stock for each outstanding share of Schuler common stock, for a
total consideration of $18.98&nbsp;per share. Promptly after
determination of the base merger consideration, Schuler and
D.R.&nbsp;Horton will issue a press release advising their
stockholders of the fraction of a share of D.R.&nbsp;Horton
common stock included in the base merger consideration.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All information contained in this Joint Proxy
Statement/ Prospectus with respect to D.R.&nbsp;Horton has been
provided by D.R.&nbsp;Horton. All information contained in this
Joint Proxy Statement/ Prospectus with respect to Schuler has
been provided by Schuler.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>For risk factors involved in the transaction that you may
want to consider, including risks involved in an investment in
D.R.&nbsp;Horton common stock, see the section of this Joint
Proxy Statement/ Prospectus captioned &#147;Risk Factors&#148;
beginning on page&nbsp;26.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The D.R.&nbsp;Horton common stock to be issued
pursuant to this Joint Proxy Statement/ Prospectus has 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 Joint
Proxy Statement/ Prospectus. Any representation to the contrary
is a criminal offense.</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<FONT size="2">This Joint Proxy Statement/ Prospectus is dated
January&nbsp;17, 2002, and is first being mailed to holders
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<FONT size="2">of Schuler common stock and D.R.&nbsp;Horton
common stock on or about January&nbsp;18, 2002.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This document incorporates important business and
financial information about D.R. Horton and Schuler that is not
included in or delivered with this document. This information is
available without charge to stockholders upon written or oral
request at the applicable company&#146;s address and telephone
number listed on page&nbsp;6. To obtain timely delivery
stockholders must request the information no later than
February&nbsp;11, 2002.
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>


<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">CAUTIONARY STATEMENT CONCERNING
	FORWARD-LOOKING INFORMATION</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">iv</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">QUESTIONS AND ANSWERS ABOUT THE
	MERGER</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">SUMMARY</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The Companies
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The Merger Consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Election Procedure
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Recommendation of the Schuler Board of Directors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Recommendation of the D.R.&nbsp;Horton Board of
	Directors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler&#146;s Reasons for the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton&#146;s Reasons for the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Required Vote
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Opinion of Schuler&#146;s Financial Advisor
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Opinion of D.R.&nbsp;Horton&#146;s Financial
	Advisor
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ownership and Board Composition of
	D.R.&nbsp;Horton After the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Appraisal Rights
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terms and Conditions of the Merger Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comparative Rights of Stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">United States Federal Income Tax Consequences of
	the Merger to Schuler Stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interests of Certain Persons in the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected Historical Financial Data of
	D.R.&nbsp;Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected Historical Financial Data of Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected Historical Financial Data of Schuler
	Residential
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected Historical Financial Data of Western
	Pacific
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Summary Selected Unaudited Pro Forma Combined
	Financial Data
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comparative Per Share Data
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Market Price and Dividend Data
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">RISK FACTORS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">THE STOCKHOLDERS MEETINGS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The Schuler Special Meeting
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The D.R.&nbsp;Horton Annual Meeting
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">PROXIES</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proxy Cards
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Solicitation of Proxies
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">How to Revoke Your Proxy
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">THE MERGER</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Background to the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Recommendation of the Schuler Board of Directors;
	Schuler&#146;s Reasons for the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Recommendations of the D.R.&nbsp;Horton Board of
	Directors; D.R.&nbsp;Horton&#146;s Reasons for the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exchanged Information
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Opinion of Schuler&#146;s Financial Advisor
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Opinion of D.R.&nbsp;Horton&#146;s Financial
	Advisor
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounting Treatment
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interests of Certain Persons in the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Appraisal Rights
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New York Stock Exchange and NASDAQ National
	Market Listing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Debt Financing
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">THE MERGER AGREEMENT</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">General
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effective Time
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Corporation Organization and Governance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger Consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Election Procedure
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler Stock Options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Representations and Warranties
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Actions of Schuler and D.R.&nbsp;Horton Prior to
	the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Conditions to the Completion of the Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Termination of the Merger Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Termination Fees and Expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effect of Termination
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amendments
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation and Benefits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler Directors&#146; and Officers&#146;
	Insurance and Indemnification
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mutual Release of Obligations; Insurance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">DIRECTORS AND MANAGEMENT OF D.R.&nbsp;HORTON
	FOLLOWING THE MERGER</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">VOTING AGREEMENTS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">AFFILIATE AGREEMENTS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>


<P align="center"><FONT size="2">ii
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">UNAUDITED PRO FORMA COMBINED CONDENSED
	FINANCIAL STATEMENTS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">DESCRIPTION OF D.R.&nbsp;HORTON CAPITAL
	STOCK</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton Preferred Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Anti-Takeover Effects of Provisions of
	D.R.&nbsp;Horton&#146;s Charter and Bylaws
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">COMPARATIVE RIGHTS OF STOCKHOLDERS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
	OF THE MERGER</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">ADDITIONAL INFORMATION ABOUT
	D.R.&nbsp;HORTON</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Directors and Executive Officers
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton&#146;s Principal Stockholders
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Executive Compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">106</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director Compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Transactions with Management
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Compensation Committee Interlocks and Insider
	Participation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Committee Report on Executive Compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">109</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock Performance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">112</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Meetings and Committees of the Board
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Audit Committee Report
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Independent Auditors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Audit Fees and Other Fees
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">114</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Section&nbsp;16(a) Beneficial Ownership Reporting
	Compliance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">ADDITIONAL MATTERS FOR CONSIDERATION OF
	D.R.&nbsp;HORTON STOCKHOLDERS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Election of Directors
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Amendment of 1991 Stock Incentive Plan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">LEGAL MATTERS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">EXPERTS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">STOCKHOLDER PROPOSALS</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">124</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>


<P align="left">
<FONT size="2">List of Annexes:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="78%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Annex I
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement and Plan of Merger (conformed as
	amended)
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Annex&nbsp;II
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of UBS Warburg LLC
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Annex&nbsp;III
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Banc of America Securities LLC
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Annex IV
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Delaware Appraisal Rights Statute
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">iii
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Joint Proxy Statement/ Prospectus contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent expectations or beliefs of D.R. Horton and
Schuler concerning future events, and no assurance can be given
that the results described will be achieved. These
forward-looking statements can generally be identified by the
use of statements that include words or phrases such as
&#147;estimate,&#148; &#147;project,&#148; &#147;believe,&#148;
&#147;expect,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
&#147;plan,&#148; &#147;foresee,&#148; &#147;likely,&#148;
&#147;will,&#148; &#147;goal,&#148; &#147;target&#148; or other
similar words or phrases. All forward-looking statements are
based upon information available to D.R.&nbsp;Horton and Schuler
on the date of this Joint Proxy Statement/ Prospectus. Neither
D.R.&nbsp;Horton nor Schuler undertakes any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are
outside of D.R.&nbsp;Horton&#146;s and Schuler&#146;s control,
that could cause actual results to differ materially from the
results discussed in the forward-looking statements, including,
among other things, the matters discussed in this Joint Proxy
Statement/ Prospectus in the sections captioned:
&#147;Summary&#148;; &#147;Risk Factors&#148;; &#147;The
Merger&nbsp;&#151; Recommendations of the Schuler Board of
Directors; Schuler&#146;s Reasons for the Merger&#148;;
&#147;The Merger&nbsp;&#151; Recommendations of the
D.R.&nbsp;Horton Board of Directors; D.R.&nbsp;Horton&#146;s
Reasons for the Merger&#148;; &#147;The Merger&nbsp;&#151;
Opinion of Schuler&#146;s Financial Advisor;&#148; and &#147;The
Merger&nbsp;&#151; Opinion of D.R.&nbsp;Horton&#146;s Financial
Advisor&#148;. Additional information about issues that could
lead to material changes in performance is contained in
D.R.&nbsp;Horton&#146;s and Schuler&#146;s filings with
the&nbsp;SEC.
</FONT>

<P align="center"><FONT size="2">iv
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "QUESTIONS AND ANSWERS ABOUT THE MERGER" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">QUESTIONS AND ANSWERS ABOUT THE
MERGER</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What will happen in the proposed
	transaction?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Subject to the adjustments, elections and
	limitations described in this Joint Proxy Statement/ Prospectus,
	if the merger is completed, each share of Schuler Class&nbsp;A
	common stock and Class&nbsp;B common stock outstanding
	immediately prior to the effective time of the merger will be
	canceled and converted into the right to receive the merger
	consideration. The base merger consideration for each share of
	Schuler common stock will consist of a combination of $4.09 in
	cash and a fraction of a share of D.R.&nbsp;Horton common stock.
	Alternatively, a Schuler stockholder may elect to receive merger
	consideration in the form of all cash or all D.R.&nbsp;Horton
	common stock, but that election will be subject to proration. As
	a result of the merger, the separate corporate existence of
	Schuler will cease, and D.R.&nbsp;Horton will be the surviving
	corporation after the merger. Outstanding shares of
	D.R.&nbsp;Horton common stock prior to the merger will remain
	shares of D.R.&nbsp;Horton common stock.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Why are Schuler and D.R.&nbsp;Horton merging?
	How will&nbsp;I benefit?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">D.R.&nbsp;Horton believes its stockholders will
	benefit as a result of the combined company&#146;s strengthened
	position in existing homebuilding markets, entry into new
	homebuilding markets, broader product offering and increased
	efficiencies and cost savings. Schuler believes that its
	stockholders will enjoy the same benefits as D.R.&nbsp;Horton
	stockholders from the merger and may also realize other benefits
	by virtue of the merger, as described in this Joint Proxy
	Statement/ Prospectus.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">When do you expect to complete the
	merger?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">We are working to complete the merger as quickly
	as possible. Currently, we expect to complete the merger during
	the first calendar quarter of 2002.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Assuming a Schuler stockholder receives shares
	of D.R.&nbsp;Horton common stock in the merger, will the rights
	of the stockholder as a D.R.&nbsp;Horton stockholder be
	different from what they were as a Schuler
	stockholder?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>


<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Yes. Schuler and D.R.&nbsp;Horton each have
	different charter documents and by-laws. For a summary of
	material differences between the rights of Schuler stockholders
	and the rights of D.R.&nbsp;Horton stockholders, please refer to
	&#147;Comparative Rights of Stockholders&#148; beginning on
	page&nbsp;91.
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What do I do to vote?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>


<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">After reading this Joint Proxy Statement/
	Prospectus, you should fill out and sign your proxy card, and
	then mail it in the enclosed return envelope as soon as possible
	so that your shares will be represented at the meeting. You may
	also return your proxy card by facsimile. Schuler stockholders
	may fax their completed and signed proxy cards to
	(201)&nbsp;296-4142. D.R.&nbsp;Horton stockholders may fax their
	completed and signed proxy cards to (718)259-1144. <B>To vote on
	the merger, Schuler stockholders do not need to complete an
	election form with respect to the merger consideration.</B>
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What happens if I don&#146;t return a proxy
	card or vote at the meeting?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Failure to return your proxy card or vote in
	person at the meeting will have the same effect as voting
	against approval of the merger. For each of Schuler and
	D.R.&nbsp;Horton the affirmative vote of a majority of its
	outstanding common stock is required to approve the merger, and
	in Schuler&#146;s case a majority of outstanding Class&nbsp;A
	common stock and Class&nbsp;B common stock voting as separate
	classes is also required. Therefore, it is important that you
	return your proxy card.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">May&nbsp;I vote in person?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Yes. You may attend the meeting and vote your
	shares in person, whether or not you have sent in a proxy card.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>


<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Can I revoke my proxy after I have mailed or
	faxed my signed proxy card?</FONT></I></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Yes. You can revoke your proxy at any time before
	your proxy is voted at the applicable stockholder meeting. You
	can do that&nbsp;by:
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">&#149;&nbsp;attending the applicable stockholder
	meeting and voting in person;
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">completing, signing and mailing in or
	transmitting by facsimile a new proxy card (in time so that the
	new proxy card is received prior to the applicable stockholder
	meeting);
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">revoking your proxy by facsimile at
	(201)&nbsp;296-4142 for Schuler stockholders and
	(718)&nbsp;259-1144 for D.R.&nbsp;Horton stockholders;&nbsp;or
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sending a written notice to the address specified
	below stating that you are revoking your proxy (in time so that
	the notice is received prior to the applicable stockholder
	meeting):
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">D.R.&nbsp;Horton Stockholders:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<B><FONT size="2">Schuler Stockholders:</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton, Inc.<BR>
	1901 Ascension Blvd.<BR>
	Suite&nbsp;100<BR>
	Arlington, TX 76006<BR>
	Attn:&nbsp;Vice President and Corporate Counsel
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Schuler Homes, Inc.<BR>
	400 Continental Blvd.<BR>
	Suite&nbsp;100<BR>
	El Segundo, CA 90245<BR>
	Attn: Corporate Secretary
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">If my shares are held in &#147;street
	name,&#148; will my broker vote them for&nbsp;me?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Your broker will vote your shares with respect to
	the merger only if you provide instructions on how to vote. For
	both Schuler stockholders and D.R.&nbsp;Horton stockholders, if
	you fail to provide your broker with instructions, your shares
	will not be voted with respect to the merger, and the failure to
	provide instructions will have the same effect as a vote against
	approval of the merger. You cannot vote your shares held in
	&#147;street name&#148; by returning a proxy card to us.
	However, if you are a D.R.&nbsp;Horton stockholder, your broker
	can vote your shares for the amendment to the D.R.&nbsp;Horton
	stock incentive plan and for the election of D.R.&nbsp;Horton
	directors without instructions.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">You should follow the directions provided by your
	broker to vote your shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What does it mean if I get more than one proxy
	card?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">You may own both Schuler and D.R.&nbsp;Horton
	common stock, or your shares may be registered in different
	names or at different addresses or may be in more than one
	account. Sign and return all proxy cards to be sure that all of
	your shares of Schuler and D.R.&nbsp;Horton common stock are
	voted.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What will Schuler stockholders receive in the
	merger?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Subject to the adjustments, elections and
	limitations described in this Joint Proxy Statement/ Prospectus,
	if the merger is completed, each share of Schuler Class&nbsp;A
	common stock and Class&nbsp;B common stock outstanding
	immediately prior to the effective time of the merger will be
	canceled and converted into the right to receive the merger
	consideration. The base merger consideration for each share of
	Schuler common stock will consist of a combination of $4.09 in
	cash and a fraction of a share of D.R.&nbsp;Horton common stock,
	based on the average closing price of D.R.&nbsp;Horton common
	stock as reported for NYSE composite transactions for the 15
	trading days ending on, and including, the third trading day
	prior to the Schuler stockholder meeting. Alternatively, a
	Schuler stockholder may elect to receive merger consideration in
	the form of all cash or all D.R.&nbsp;Horton common stock, but
	that election will be subject to proration. A Schuler
	stockholder cannot make an election for less than all of his or
	her&nbsp;shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Both the total cash portion of the merger
	consideration and the total number of shares of D.R.&nbsp;Horton
	common stock to be issued as merger consideration will be fixed.
	The total amount of cash that D.R.&nbsp;Horton will pay as part
	of the merger consideration is equal to the product of $4.09
	multiplied by the number of shares of Schuler common stock
	outstanding, other than dissenting shares, immediately prior to
	the effective time of the merger, unless D.R.&nbsp;Horton elects
	to increase the cash portion of the merger consideration if the
	average closing price of D.R.&nbsp;Horton common stock were to
	fall below $16.00. The total number of shares of
	D.R.&nbsp;Horton common stock issued as merger consideration
	will be determined in the manner set forth in the table below as
	if each stockholder had elected to receive the base merger
	consideration.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">The following table shows, at various assumed
	average closing prices of D.R. Horton common stock, the fraction
	of a share of D.R.&nbsp;Horton common stock that would be issued
	as part of the base merger consideration, and the total amount
	of the base merger consideration per share of Schuler common
	stock. This table does not include cash to be received in lieu
	of fractional shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<B><FONT size="2">The range of average closing prices presented
	in the following table is for illustrative purposes only. No
	assurance can be given that any illustrative average closing
	price shown in the table will be equivalent to the market value
	of D.R.&nbsp;Horton common stock on the date such stock is
	received by a holder of Schuler common stock or at any other
	time. The market value of D.R.&nbsp;Horton common stock received
	by a holder of Schuler common stock may be greater or less than
	the recent market values of D.R.&nbsp;Horton common stock or the
	average closing price used to calculate the base merger
	consideration.</FONT></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fraction of a Share of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of Base Merger Consideration for</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Each Share of Schuler Stock Consisting of $4.09</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Assumed Average Closing Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock Issued for Each</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">in Cash and Shares of D.R.&nbsp;Horton Common</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">of D.R.&nbsp;Horton Common Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler Share</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock at the Average Closing Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$33.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$33.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$32.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.92</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$32.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.67</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$31.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$30.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$30.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.70</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$29.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$29.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$28.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$28.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.73</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.51
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.496</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$26.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.505</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$26.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.515</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$25.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$25.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.536</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$24.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.547</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$24.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.558</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.51
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$22.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.92</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$22.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$21.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$21.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$20.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$20.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.49</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.585</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$18.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.601</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$18.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.617</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.51
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">If the average closing price of D.R.&nbsp;Horton
	common stock determined as set forth above is less than $16.00,
	the total amount of the merger consideration would be less than
	$14.25. However, in that event, Schuler can terminate the
	merger, unless D.R.&nbsp;Horton makes an election to increase
	either the cash portion of the merger consideration or the stock
	portion of the merger consideration, or both, so that the total
	amount of the base merger consideration for each share of
	Schuler common stock equals at least $14.25, valued at the
	average closing price. Schuler is unable to determine currently
	whether it would exercise its right to terminate the merger
	agreement in that event. Schuler believes that any decision to
	terminate the merger agreement should be based on the facts and
	circumstances existing at the time the decision is required,
	including then current market conditions in the homebuilding
	industry in general, and with respect to D.R. Horton and Schuler
	in particular. If the total amount of the merger consideration
	falls below $14.25, Schuler will announce whether it will
	exercise its right to terminate the merger agreement in the
	press release announcing the determination of the base merger
	consideration. Schuler does not currently intend to resolicit
	proxies if it does not exercise its right to terminate. However,
	because the announcement will be made not later than the opening
	of business on the second trading day prior to the Schuler
	stockholder meeting, Schuler stockholders may then submit or
	revoke their proxies in accordance with the procedures described
	in the section entitled &#147;Proxies,&#148; including
	transmission by facsimile.
	</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Subject to the adjustments, elections and
	limitations described in this Joint Proxy Statement/ Prospectus,
	if a Schuler stockholder makes an election to receive all cash,
	each share of Schuler common stock held by the stockholder will
	be converted into the right to receive cash in an amount equal
	to the base merger consideration. Subject to such adjustments,
	elections and limitations, if a Schuler stockholder makes an
	election to receive all D.R.&nbsp;Horton common stock, each
	share of the stockholder&#146;s Schuler common stock will be
	converted into the right to receive the number of shares of
	D.R.&nbsp;Horton common stock, valued using the average closing
	price described above, equal to the base merger consideration.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Elections to receive all cash or all
	D.R.&nbsp;Horton common stock will be subject to proration,
	since both the total amount of cash and the total number of
	shares of D.R.&nbsp;Horton common stock will be fixed, based on
	the number of shares of Schuler common stock outstanding
	immediately prior to the merger. For example, if a Schuler
	stockholder elects to receive the merger consideration as all
	cash, and either there have not been enough elections by other
	Schuler stockholders for all D.R.&nbsp;Horton common stock, or
	some of the Schuler stockholders have dissented from the merger,
	or both, the Schuler stockholder electing all cash would receive
	a prorated combination of cash and D.R.&nbsp;Horton common
	stock. The cash portion would consist of an amount of cash per
	share equal to the total cash portion of the merger
	consideration less the cash paid to Schuler stockholders
	receiving the base merger consideration and the cash allocated
	to dissenting stockholders, divided by the number of shares of
	Schuler common stock for which an all cash election has been
	made. In that example, the remaining portion of the merger
	consideration would be paid in shares of D.R.&nbsp;Horton common
	stock valued using the average closing price described above, so
	that the total prorated combination of cash and D.R.&nbsp;Horton
	common stock per share of Schuler common stock would equal the
	amount of the base merger consideration. Notwithstanding the
	prorations, the amount of cash that a stockholder electing all
	cash will receive will not be less than $4.09&nbsp;per share of
	Schuler common stock.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">In another example, if a Schuler stockholder
	elects to receive all stock, and not enough Schuler stockholders
	have elected to receive all cash, the stockholder electing to
	receive all stock would receive for each share of Schuler common
	stock cash equal to the total cash portion of the merger
	consideration minus the aggregate amount of cash payable with
	respect to the shares for which an all cash election has been
	made and the shares receiving the base merger consideration and
	the cash allocated to dissenting stockholders, divided by the
	number of shares for which an all stock election has been made.
	The remaining portion of the merger consideration would be paid
	in shares of D.R.&nbsp;Horton common stock valued using the
	average closing price described above so that the total amount
	of cash and prorated stock would equal the amount of the base
	merger consideration.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Since calculation of the number of shares of
	D.R.&nbsp;Horton common stock that a Schuler stockholder will
	receive in the merger is based on an average closing price, the
	market value of the shares of D.R.&nbsp;Horton common stock that
	a Schuler stockholder receives upon completion of the merger may
	be greater or less than the calculated value.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">4
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Does a Schuler stockholder have to make an
	election to receive the base merger consideration?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">No. <B>If a Schuler stockholder wishes to receive
	the base merger consideration, no election is necessary.</B> A
	Schuler stockholder must make an election only to receive merger
	consideration in the form of all cash or all D.R.&nbsp;Horton
	common stock.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">How long do Schuler stockholders have to elect
	to receive the merger consideration as all cash or all
	D.R.&nbsp;Horton common stock?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Until the day before the Schuler special meeting
	of stockholders.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">How does a Schuler stockholder make an
	election to receive the merger consideration as all cash or all
	D.R.&nbsp;Horton common stock?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">If a Schuler stockholder desires to elect the
	form of merger consideration he or she will receive for shares
	of Schuler common stock, the Schuler stockholder must complete,
	date and sign the election form and letter of transmittal and
	send it to the exchange agent, American Stock
	Transfer&nbsp;&#38; Trust Company, at one of the addresses
	provided on the election form, including a letter of
	transmittal. The election form must be returned by
	5:00&nbsp;p.m., New&nbsp;York City Time, on Wednesday,
	February&nbsp;20, 2002. Schuler stockholders who do not return
	the election form will receive the base merger consideration of
	cash and D.R.&nbsp;Horton common stock. For detailed information
	on the procedure for electing to receive cash or shares of
	D.R.&nbsp;Horton common stock in the merger, see
	&#147;Summary-Election Procedure&#148; beginning on
	page&nbsp;10. To make a valid election, Schuler stockholders
	must send in their stock certificates with their election form.
	Stockholders that do not send in an election form will receive
	the base merger consideration, and will receive written
	instructions after the merger is completed for exchanging stock
	certificates for the base merger consideration.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What should Schuler stockholders do if their
	stock certificates are lost, stolen or destroyed?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">If an election is made with respect to shares
	represented by a lost, stolen or destroyed certificate, the
	Schuler stockholder should notify Schuler&#146;s transfer agent,
	Mellon Investor Services at (800) 356-2017 to obtain a
	replacement certificate. If an election is not made with respect
	to shares represented by a lost, stolen or destroyed
	certificate, the Schuler stockholder must notify American Stock
	Transfer&nbsp;&#38; Trust Company and follow the procedures
	outlined in the letter of transmittal.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Should Schuler stockholders send in their
	stock certificates now?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">If they are to receive the base merger
	consideration, Schuler stockholders should submit a letter of
	transmittal after the merger. Otherwise, Schuler stockholders
	should submit their stock certificates to the exchange agent at
	the time they submit the election form. Instructions on how to
	exchange Schuler stock certificates are enclosed with the
	election form.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Will I have appraisal rights?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Schuler stockholders who do not wish to accept
	the merger consideration and who comply with all of the
	requirements of Delaware law will have the right under the
	Delaware corporate statute to be paid the judicially determined
	appraised value of their shares. That appraised value will not
	include any value arising from the prospects of Schuler&#146;s
	merger with D.R.&nbsp;Horton under the merger agreement. The
	appraised value may be more than, less than or equal to the
	amount of cash and the market value of the D.R.&nbsp;Horton
	shares a Schuler stockholder would receive as a result of the
	merger if the stockholder did not exercise appraisal rights.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">D.R.&nbsp;Horton stockholders will not be
	entitled to appraisal rights in connection with the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Exercise of appraisal rights is subject to a
	number of technical and procedural requirements. Generally, in
	order to exercise appraisal rights, a Schuler stockholder must:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">be a stockholder of record and hold the shares of
	Schuler common stock through the time of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">before the vote on the merger, state in writing
	that the stockholder objects to the merger and intends to demand
	payment for the stockholder&#146;s shares;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">not vote in favor of the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<B><FONT size="2">Merely voting against the merger will not
	protect a Schuler stockholder&#146;s right of
	appraisal.</FONT></B><FONT size="2"> Annex&nbsp;IV contains the
	text of the Delaware appraisal rights statute.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">D.R.&nbsp;Horton has the right not to proceed
	with the merger if holders of more than 8% of the Schuler common
	stock exercise appraisal rights.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">As a Schuler stockholder, will I be taxed as a
	result of the merger?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Tax consequences to a particular Schuler
	stockholder will depend upon whether that Schuler stockholder
	receives a combination of D.R.&nbsp;Horton common stock and
	cash, all cash, or all D.R.&nbsp;Horton common stock in the
	merger, and may also depend upon the stockholder&#146;s basis in
	the Schuler stock. Legal counsel to D.R.&nbsp;Horton and Schuler
	have delivered opinions that the merger will qualify as a
	reorganization under the Internal Revenue Code, with the result
	that:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">neither D.R.&nbsp;Horton nor Schuler will
	recognize gain as a result of the merger,&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler stockholders will recognize any gain for
	U.S.&nbsp;federal income tax purposes, but only to the extent
	that they receive cash in the merger.
	</FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Specifically, if a Schuler stockholder receives
	both D.R.&nbsp;Horton common stock and cash in the merger, the
	stockholder will recognize gain equal to the lesser of the
	amount of gain realized and the amount of cash received. If a
	Schuler stockholder receives only cash the stockholder will
	recognize gain or, alternatively, depending upon its particular
	circumstances, the stockholder likely will be permitted to
	recognize loss, equal to the difference between the amount of
	cash received and its basis in its Schuler stock.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
</TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">We describe the material U.S.&nbsp;federal income
	tax consequences of the merger in more detail beginning on
	page&nbsp;96. The tax consequences of the merger to each Schuler
	stockholder will depend upon the facts of each
	stockholder&#146;s particular situation. Schuler stockholders
	should consult their own tax advisor for a full understanding of
	the tax consequences of the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">What will happen to D.R.&nbsp;Horton
	stockholders as a result of the merger?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">For D.R.&nbsp;Horton stockholders, each
	outstanding share of D.R.&nbsp;Horton common stock and each
	option to purchase D.R.&nbsp;Horton common stock will remain
	outstanding and unchanged. D.R.&nbsp;Horton stockholders will
	not need to do anything with their stock certificates.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Will the D.R.&nbsp;Horton board of directors
	change as a result of the merger?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">Yes. D.R.&nbsp;Horton has agreed to use its best
	efforts to appoint James K. Schuler to the D.R.&nbsp;Horton
	board upon completion of the merger. Otherwise, the
	D.R.&nbsp;Horton board of directors will not change as a result
	of the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Who can answer any other questions I may
	have?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">If you have questions about the merger or the
	stockholders meetings you may contact any of the following:
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">For D.R.&nbsp;Horton stockholders:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<B><FONT size="2">For Schuler stockholders:</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton, Inc.<BR>
	1901 Ascension Blvd.<BR>
	Suite&nbsp;100<BR>
	Arlington, TX 76006<BR>
	Attn: Investor Relations<BR>
	Telephone No.: (817)&nbsp;856-8200
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Thomas Connelly, Corporate Secretary<BR>
	Schuler Homes, Inc.<BR>
	400 Continental Blvd.<BR>
	Suite&nbsp;100<BR>
	El Segundo, CA 90245<BR>
	Telephone No.: (310)&nbsp;648-7200
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="2%"></TD>
	<TD width="1%"></TD>
	<TD width="97%"></TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">Q:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<I><FONT size="2">Where can I find more information about
	Schuler and D.R.&nbsp;Horton?</FONT></I></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	<FONT size="2">A:
	</FONT></TD>
	<TD></TD>
	<TD valign="top">
	<FONT size="2">The discussion under the section captioned
	&#147;Where You Can Find More Information&#148; on page&nbsp;124
	explains how you can obtain further information.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">6
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SUMMARY" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">SUMMARY</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following briefly summarizes the key
aspects of the merger and other significant information
contained in this Joint Proxy Statement/Prospectus. It may not
contain all of the information that is important to you. To
understand the transaction more fully, and for a more complete
description of the terms of the transaction, you should read
this entire document and the documents to which we refer you.
See the section captioned &#147;Where You Can Find More
Information&#148; (page&nbsp;124) for sources of additional
information and how to get copies of documents to which we refer
you.</FONT></I>


<DIV>&nbsp;</DIV>

<!-- link2 "General" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="left">
<B><FONT size="2">General</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Joint Proxy Statement/ Prospectus relates to
the proposed acquisition of Schuler by D.R.&nbsp;Horton through
a merger of Schuler into D.R.&nbsp;Horton. As a result, the
separate corporate existence of Schuler will cease, and
D.R.&nbsp;Horton will be the surviving corporation in the
merger. The Schuler common stock will be converted into a
combination of cash and D.R.&nbsp;Horton common stock as
provided in the merger agreement. The base merger consideration
for each share of Schuler common stock consists of a combination
of $4.09 in cash and a fraction of a share of D.R.&nbsp;Horton
common stock. Alternatively, a Schuler stockholder may elect to
receive merger consideration in the form of all cash or all
D.R.&nbsp;Horton common stock, but that election will be subject
to proration. There are no federal or state regulatory
requirements that must be complied with or approvals that must
be obtained in connection with the merger. The full text of the
Agreement and Plan of Merger dated as of October&nbsp;22, 2001,
as amended November&nbsp;8, 2001, between D.R.&nbsp;Horton and
Schuler, is attached to this Joint Proxy Statement/ Prospectus
as Annex I.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "The Companies" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="left">
<B><FONT size="2">The Companies</FONT></B>
</DIV>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D.R.&nbsp;Horton.</FONT></I><FONT size="2">
D.R.&nbsp;Horton is a national homebuilder engaged in
constructing and selling single-family homes in metropolitan
areas of the Mid-Atlantic, Midwest, Southeast, Southwest and
West regions of the United States. D.R.&nbsp;Horton offers high
quality homes, designed principally for first-time and move-up
home buyers. D.R.&nbsp;Horton homes generally range in size from
1,000 to 5,000&nbsp;square feet and range in price from $80,000
to $900,000. For the fiscal year ended September&nbsp;30, 2001,
D.R.&nbsp;Horton closed 21,371 homes with an average sales price
approximating $200,700. For the quarter ended December&nbsp;31,
2001, D.R.&nbsp;Horton generated 5,144&nbsp;net new sales
contracts with an aggregate value of $1,021.4&nbsp;million.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton is one of the largest and most
geographically diversified homebuilders in the United States,
with operating divisions in 20&nbsp;states and 38 markets as of
September&nbsp;30, 2001. The markets D.R.&nbsp;Horton operates
in include: Albuquerque, Atlanta, Austin, Birmingham,
Charleston, Charlotte, Chicago, Columbia, Dallas, Denver,
Fort&nbsp;Myers/ Naples, Fort&nbsp;Worth, Greensboro,
Greenville, Hilton Head, Houston, Jacksonville, Killeen, Las
Vegas, Los Angeles, Louisville, Maryland-D.C., Miami/ West Palm
Beach, Minneapolis/ St. Paul, Myrtle Beach, New Jersey, Orlando,
Phoenix, Portland, Raleigh/ Durham, Richmond, Sacramento, Salt
Lake City, San&nbsp;Antonio, San&nbsp;Diego, Tucson,
Virginia-D.C. and Williamsburg. D.R.&nbsp;Horton builds homes
under the names D.R. Horton, Arappco, Cambridge, Continental,
Dietz-Crane, Dobson, Emerald, Mareli, Milburn, Regency, SGS,
Torrey and Trimark.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton&#146;s financial reporting
segments consist of homebuilding operations and financial
services. D.R.&nbsp;Horton&#146;s homebuilding operations
comprise the most substantial part of its business, with more
than 98% of consolidated revenues in fiscal 2001. The
homebuilding operations segment generates the majority of its
revenues from the sale of completed homes with a lesser amount
from the sale of land and lots. The financial services segment
generates its revenues from originating and selling mortgages
and collecting fees for title insurance and closing services.
Financial information, including revenue, pre-tax income and
identifiable assets of both reporting segments are included in
D.R.&nbsp;Horton&#146;s consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton was incorporated in Delaware on
July&nbsp;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. D.R.&nbsp;Horton&#146;s principal executive
offices are located at 1901 Ascension Blvd., Suite&nbsp;100,
Arlington, Texas 76006, and the telephone number is (817)
856-8200.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Schuler.</FONT></I><FONT size="2"> Schuler is
among the fifteen largest homebuilders in the country based on
number of homes sold, and is among the top five homebuilders in
California, Colorado, Hawaii and Washington. Schuler designs,
builds and markets single-family attached and detached homes to
entry-level and first-time move-up buyers and, to a lesser
extent, second-time move-up buyers in the States of California,
Colorado, Hawaii, Washington, Oregon and Arizona. On a pro forma
basis combining Schuler with Western Pacific, in the twelve
months ended September&nbsp;30, 2001, Schuler closed 5,254 homes
with an average sales price approximating $293,000. For the
quarter ended December&nbsp;31, 2001, Schuler closed 1,495 new
homes with revenues of $426.6&nbsp;million, and generated 1,185
new orders valued at $374.6&nbsp;million. At December&nbsp;31,
2001, Schuler had a backlog of 1,692 sold homes valued at
$524.0&nbsp;million. Through its subsidiaries, Schuler also
provides customer financing to its buyers in Colorado, Northern
California and Washington.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler builds homes under the names Schuler
Homes, Western Pacific Housing, Melody Homes and Stafford Homes.
Schuler maintains a conservative land acquisition policy,
generally using options or land purchase agreements to obtain
control of desired parcels of land.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2"> On April&nbsp;3, 2001, Schuler completed a
business combination that combined the operations of Schuler
Residential, Inc. (formerly Schuler Homes, Inc.) with those of
Western Pacific Housing, a homebuilding company that operated in
the State of California. Schuler&#146;s principal executive
offices are located at 400&nbsp;Continental Blvd.,
Suite&nbsp;100, El Segundo, California 90245, and its telephone
number is (310)&nbsp;648-7200.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "The Merger Consideration (see page 65)" -->
<DIV align="left"><A NAME="006"></A></DIV>


<DIV align="left">
<B><FONT size="2">The Merger Consideration
</FONT></B><FONT size="2">(see page&nbsp;65)
</FONT>
</DIV>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if the merger is completed, each share of Schuler Class&nbsp;A
common stock and Class&nbsp;B common stock outstanding
immediately prior to the effective time of the merger will be
canceled and converted into the right to receive the merger
consideration. The base merger consideration for each share of
Schuler common stock will consist of a combination of $4.09 in
cash and a fraction of a share of D.R.&nbsp;Horton common stock
as set forth in the table below, based on the average closing
price of D.R.&nbsp;Horton common stock as reported for New York
Stock Exchange composite transactions for the 15 trading days
ending on, and including, the third trading day prior to the
Schuler stockholder meeting:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Total Amount of Base Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Consideration for Each Share</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">of Schuler Common Stock</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Consisting of $4.09 in Cash</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Average Closing</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">and Shares of D.R.&nbsp;Horton</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Price of D.R.&nbsp;Horton</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Common Stock at the Average</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Issued for Each Schuler Share</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Closing Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.51 or higher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.487&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49 or higher
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.51 to $27.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $13.395 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.50 to $23.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.570&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21 to $17.49
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.51 to $19.49
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $11.115 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.00 to $17.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.635&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$14.25 to $15.20
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">8
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the average closing price of D.R.&nbsp;Horton
common stock determined as set forth above is less than $16.00,
the total amount of the merger consideration would be less than
$14.25. However, in that event, Schuler can terminate the merger
agreement, unless D.R.&nbsp;Horton makes an election to increase
the cash portion of the merger consideration or the stock
portion of the merger consideration, or both, so that the amount
of the base merger consideration for each share of Schuler
common stock equals at least $14.25, consisting of cash and
shares of D.R.&nbsp;Horton common stock valued at the average
closing price. Schuler is unable to determine currently whether
it would exercise its right to terminate the merger agreement in
that event. Schuler believes that any decision to terminate the
merger agreement should be based on the facts and circumstances
existing at the time the decision is required, including then
current market conditions in the homebuilding industry in
general, and with respect to D.R.&nbsp;Horton and Schuler in
particular. If the total amount of the merger consideration
falls below $14.25, Schuler will announce whether it will
exercise its right to terminate the merger agreement in the
press release announcing the determination of the merger
consideration. Schuler does not currently intend to resolicit
proxies if it does not exercise its right to terminate. However,
because the announcement will be made not later than the opening
of business on the second trading day prior to the Schuler
stockholder meeting, Schuler stockholders may then submit or
revoke their proxies in accordance with the procedures described
in the section entitled &#147;Proxies,&#148; including
transmission by facsimile.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alternatively, a Schuler stockholder may elect to
receive merger consideration in the form of all cash or all
D.R.&nbsp;Horton common stock, but that election will be subject
to proration. A Schuler stockholder cannot make an election for
less than all of his or her shares. Both the total cash portion
of the merger consideration and the total number of shares of
D.R.&nbsp;Horton common stock to be issued as merger
consideration will be fixed. The total amount of cash that
D.R.&nbsp;Horton will pay as part of the merger consideration is
equal to the product of $4.09 multiplied by the number of shares
of Schuler common stock outstanding, other than dissenting
shares, immediately prior to the effective time of the merger,
unless D.R.&nbsp;Horton elects to increase the cash portion of
the merger consideration if the average closing price of
D.R.&nbsp;Horton common stock were to fall below $16.00. The
total number of shares of D.R.&nbsp;Horton common stock issued
as merger consideration will be determined in the manner set
forth above as if each stockholder had elected to receive the
base merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if a Schuler stockholder makes an election to receive all cash,
each share of Schuler common stock held by the stockholder will
be converted into the right to receive cash in an amount equal
to the base merger consideration. Subject to such adjustments,
elections and limitations, if a Schuler stockholder makes an
election to receive all D.R.&nbsp;Horton common stock, each
share of the stockholder&#146;s Schuler common stock will be
converted into the right to receive the number of shares of
D.R.&nbsp;Horton common stock, valued using the average closing
price described above, equal to the base merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Elections to receive all cash or all
D.R.&nbsp;Horton common stock will be subject to proration,
since both the total amount of cash and the total number of
shares of D.R.&nbsp;Horton common stock will be fixed, based on
the number of shares of Schuler common stock outstanding
immediately prior to the merger. For example, if a Schuler
stockholder elects to receive the merger consideration as all
cash, and either there have not been enough elections by other
stockholders for all D.R.&nbsp;Horton common stock, or some of
the Schuler stockholders have dissented from the merger, or
both, the Schuler stockholder will receive a prorated
combination of cash and D.R.&nbsp;Horton common stock. The cash
portion will consist of an amount of cash per share equal to the
total cash portion of the merger consideration less the cash
paid to stockholders receiving the base merger consideration and
the cash allocated to dissenting stockholders, divided by the
number of shares of Schuler common stock for which an all cash
election has been made. In that example, the remaining portion
of the merger consideration would be paid in shares of
D.R.&nbsp;Horton common stock valued using the average closing
price described above, so that the total prorated combination of
cash and D.R.&nbsp;Horton common stock equals the amount of the
base merger consideration. Notwithstanding the proration
procedure, the amount of cash that a Schuler stockholder
electing all cash will receive will not be less than
$4.09&nbsp;per share of Schuler common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In another example, if a Schuler stockholder
elects to receive all stock, and not enough Schuler stockholders
have elected to receive all cash, the stockholder electing to
receive all stock will receive for each share of Schuler common
stock cash equal to the total cash portion of the merger
consideration
</FONT>

<P align="center"><FONT size="2">9
</FONT>
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<DIV align="left">
<FONT size="2">minus the aggregate amount of cash payable with
respect to the shares for which an all cash election has been
made and the shares receiving the base merger consideration and
the cash allocated to dissenting stockholders, divided by the
number of shares for which an all stock election has been made,
and the remaining portion of the merger consideration would be
paid in shares of D.R.&nbsp;Horton common stock valued using the
average closing price described above so that the total amount
of cash and prorated stock would equal the amount of the base
merger consideration.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Schuler stockholder does not make an
election, or does not make an election properly or otherwise
loses the election, that stockholder will receive the base
merger consideration of cash and D.R.&nbsp;Horton common stock.
The base merger consideration is not subject to proration due to
the number of all cash or all stock elections.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Election Procedure (see page 67)" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="left">
<B><FONT size="2">Election Procedure
</FONT></B><FONT size="2">(see page&nbsp;67)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Schuler stockholder may receive merger
consideration as the base merger consideration of a combination
of D.R.&nbsp;Horton common stock and cash, or may elect to
receive the merger consideration as all cash or all
D.R.&nbsp;Horton common stock, subject to proration. <B>If a
Schuler stockholder wants to receive the base merger
consideration, no election is necessary.</B> No Schuler
stockholder may make an election for less than all of his or her
shares. An election form, including a letter of transmittal,
will be sent to each Schuler stockholder in a mailing separate
from this Joint Proxy Statement/ Prospectus. If shares are held
in &#147;street name&#148; through a broker, the broker will
mail the election form to the beneficial owner under separate
cover, together with a letter of instructions for making an
election. Beneficial owners should read the election form
together with this Joint Proxy Statement/ Prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler stockholders who become stockholders
following the record date of the Schuler special meeting may
contact American Stock Transfer &#38; Trust Company by calling
toll-free at (800)&nbsp;937-5449, to receive an election form.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For an election to be effective, the election
form must be properly completed, and the electing Schuler
stockholder must send the form, together with all of the
stockholder&#146;s certificates, duly endorsed in blank or
otherwise in a form which is acceptable for transfer on the
books of Schuler or by appropriate guarantee of delivery as
described in the form of election, to American Stock Transfer
&#38; Trust Company, the exchange agent, at one of the addresses
provided in the election form. The exchange agent must receive
the completed form of election and stock certificates by
5:00&nbsp;p.m., New York City Time, on February&nbsp;20, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler stockholders can revoke their election
prior to 5:00&nbsp;p.m., New York City Time, on
February&nbsp;20, 2002, by sending written notice executed by
the Schuler stockholder to the exchange agent, American Stock
Transfer &#38; Trust Company, in accordance with the
instructions on the election form. If a Schuler stockholder
properly revokes an election, the exchange agent will treat the
subject shares as shares for which no election has been made,
unless the Schuler stockholder thereafter submits another
properly completed election form prior to the deadline for
submission. Stock certificates submitted with an election form
will be automatically returned if the merger agreement is
terminated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">To facilitate the election process, Schuler
stockholders will be able to revoke their elections by facsimile
prior to the deadline set forth above at the following telephone
number: (718)&nbsp;259-1144.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton will determine, or delegate to
the exchange agent to determine, whether election forms have
been properly completed, signed and submitted or revoked and may
disregard immaterial defects in election forms. If
D.R.&nbsp;Horton or the exchange agent determines that an
election was not properly made, the election will have no force
and effect and the exchange agent will treat the subject shares
as shares for which no election has been made. The decision of
D.R.&nbsp;Horton or the exchange agent in all these matters will
be conclusive and binding. Neither D.R.&nbsp;Horton nor the
exchange agent will be under any obligation to notify any
Schuler stockholder of any defect in his or her election form
submitted to the exchange agent. D.R.&nbsp;Horton will also
make, or will delegate to the exchange agent to make, all
computations regarding merger consideration to be received by
holders of shares of Schuler common stock and all of
D.R.&nbsp;Horton&#146;s or the exchange agent&#146;s
computations will be conclusive and binding on the holders of
shares of Schuler common stock.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV>&nbsp;</DIV>

<!-- link2 "Recommendation of the Schuler Board of Directors (see page 40)" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV align="left">
<B><FONT size="2">Recommendation of the Schuler Board of
Directors </FONT></B><FONT size="2">(see page&nbsp;40)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Schuler board of directors has unanimously
determined that the merger agreement is advisable, fair to and
in the best interests of Schuler and its stockholders and
recommends that Schuler stockholders vote <B>FOR</B> approval
and adoption of the merger agreement and the transactions
contemplated by the merger agreement.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Recommendation of the D.R. Horton Board of Directors (see page 42)" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="left">
<B><FONT size="2">Recommendation of the D.R.&nbsp;Horton Board
of Directors </FONT></B><FONT size="2">(see page&nbsp;42)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board has unanimously
approved the merger and the issuance of D.R.&nbsp;Horton common
stock in connection with the merger, has determined that the
merger is advisable and is in the best interests of
D.R.&nbsp;Horton and its stockholders, and recommends that the
holders of D.R.&nbsp;Horton common stock vote <B>FOR</B> the
merger and the share issuance.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Schuler&#146;s Reasons for the Merger (see page 40)" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="left">
<B><FONT size="2">Schuler&#146;s Reasons for the Merger
</FONT></B><FONT size="2">(see page&nbsp;40)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Schuler board of directors considered, with
the assistance of management and its financial and legal
advisors, a number of factors, both positive and negative, in
determining that the merger of Schuler with D.R.&nbsp;Horton is
fair to Schuler stockholders and approving the merger agreement
and the transactions contemplated by the merger agreement.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "D.R. Horton&#146;s Reasons for the Merger (see page 42)" -->
<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="left">
<B><FONT size="2">D.R.&nbsp;Horton&#146;s Reasons for the Merger
</FONT></B><FONT size="2">(see page&nbsp;42)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board of directors
considered, with the assistance of management and its financial
and legal advisors, a number of factors, both positive and
negative, in approving the merger agreement and the transactions
contemplated by the merger agreement.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Required Vote (see pages 32 and 34)" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="left">
<B><FONT size="2">Required Vote </FONT></B><FONT size="2">(see
pages&nbsp;32 and 34)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Schuler. </FONT></I><FONT size="2">The
affirmative vote, in person or by proxy, of the holders as of
the Schuler record date of a majority of the outstanding shares
Schuler common stock, and the affirmative vote, in person or by
proxy, of the holders as of the Schuler record date of a
majority of the outstanding shares of Schuler Class&nbsp;A
common stock and Class&nbsp;B common stock, each voting as a
separate class, is required for the approval and adoption of the
merger agreement and the transactions contemplated by the merger
agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The James and Patricia Schuler Foundation, James
K. Schuler as trustee for two family trusts, and WPH-Schuler LLC
have entered into a voting agreement with D.R.&nbsp;Horton
pursuant to which they have agreed to vote approximately 46.0%
of the voting power of the outstanding shares of Schuler common
stock, representing 23.4% of the Class&nbsp;A common stock and
100% of the Class&nbsp;B common stock, in favor of the approval
and adoption of the merger agreement. The James and Patricia
Schuler Foundation and the two family trusts also own
5,216,914&nbsp;shares of Schuler Class&nbsp;A common stock,
representing 23.3% of Schuler&#146;s Class&nbsp;A common stock,
that are not subject to the voting agreement. Mr.&nbsp;Schuler
has orally informed Schuler and D.R.&nbsp;Horton that the
foundation and the two family trusts currently intend to vote
the shares not subject to the voting agreement in favor of the
approval and adoption of the merger agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the Schuler record date, Schuler&#146;s
directors, executive officers and their affiliates beneficially
owned approximately 10.6&nbsp;million shares of Schuler
Class&nbsp;A common stock. Of those shares, Schuler&#146;s
directors, executive officers and their affiliates were entitled
to vote approximately 10.5&nbsp;million shares of Schuler
Class&nbsp;A common stock, which represented approximately 47.0%
of the voting power of the Schuler Class&nbsp;A common stock,
and 33.1% of the voting power of the Schuler common stock,
outstanding and entitled to vote on that date. There is no
agreement or arrangement regarding voting by Schuler&#146;s
directors or executive officers other than as described with
respect to the voting agreement. Schuler&#146;s directors,
executive officers and their affiliates have orally informed
Schuler and D.R.&nbsp;Horton that they intend to vote in favor
of the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D.R.&nbsp;Horton.</FONT></I><FONT size="2">
The affirmative vote, in person or by proxy, of holders of a
majority of the outstanding shares of D.R.&nbsp;Horton common
stock is required for the approval of the merger and the
issuance of D.R.&nbsp;Horton common stock in connection with the
merger. The affirmative vote, in person or by proxy, of
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">holders of a majority of the outstanding shares
of D.R.&nbsp;Horton common stock present at the meeting is
required for the approval of the amendment to D.R. Horton&#146;s
1991 Stock Incentive Plan. For election of
D.R.&nbsp;Horton&#146;s directors, nominees receiving a
plurality of the votes cast at the meeting will be elected to
serve as directors.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Donald R. Horton and Terrill J. Horton, as
trustee for four trusts for the benefit of family members of
Donald R. Horton, which are collectively the beneficial owners
as of the record date of approximately 16% of the outstanding
shares of D.R.&nbsp;Horton common stock, have entered into a
voting agreement with Schuler, agreeing, among other things, to
vote their shares in favor of the approval and adoption of the
merger agreement and the issuance of D.R.&nbsp;Horton common
stock in connection with the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the D.R.&nbsp;Horton record date,
D.R.&nbsp;Horton&#146;s directors, executive officers and their
affiliates beneficially owned approximately 14.0&nbsp;million
shares of D.R.&nbsp;Horton common stock. Of those shares,
D.R.&nbsp;Horton&#146;s directors, executive officers and their
affiliates were entitled to vote approximately 13.6&nbsp;million
shares of D.R.&nbsp;Horton common stock, which represented
approximately 17.6% of the total amount of D.R.&nbsp;Horton
common stock outstanding and entitled to vote on that date.
There is no agreement or arrangement regarding voting by
D.R.&nbsp;Horton&#146;s directors or executive officers other
than with respect to the voting agreement described above.
D.R.&nbsp;Horton&#146;s directors, executive officers and their
affiliates have orally informed D.R.&nbsp;Horton and Schuler
that they intend to vote in favor of the merger agreement and
the issuance of D.R.&nbsp;Horton common stock in connection with
the merger.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Opinion of Schuler&#146;s Financial Advisor (see page 45)" -->
<DIV align="left"><A NAME="013"></A></DIV>

<DIV align="left">
<B><FONT size="2">Opinion of Schuler&#146;s Financial Advisor
</FONT></B><FONT size="2">(see page&nbsp;45)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the merger, the Schuler board
of directors received an opinion from UBS Warburg LLC,
Schuler&#146;s financial advisor, concerning the fairness of the
merger consideration as of the date of the opinion, as described
in more detail on page&nbsp;45. We encourage you to read the
opinion carefully in its entirety for a description of the
matters covered, procedures followed, assumptions made, matters
considered and limitations on the review undertaken. The full
text of UBS Warburg LLC&#146;s written opinion, dated
October&nbsp;22, 2001, is attached to this Joint Proxy
Statement/ Prospectus as Annex&nbsp;II. <B>UBS Warburg
LLC&#146;s opinion is addressed to the Schuler board of
directors and does not constitute a recommendation to any
stockholder with respect to any matter relating to the
merger.</B>
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Opinion of D.R. Horton&#146;s Financial Advisor (see page 49)" -->
<DIV align="left"><A NAME="014"></A></DIV>

<DIV align="left">
<B><FONT size="2">Opinion of D.R.&nbsp;Horton&#146;s Financial
Advisor </FONT></B><FONT size="2">(see page&nbsp;49)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the merger, the
D.R.&nbsp;Horton board of directors received an opinion from
Banc of America Securities LLC, D.R.&nbsp;Horton&#146;s
financial advisor, concerning the fairness of the merger
consideration as of the date of the opinion, as described in
more detail on page&nbsp;49. We encourage you to read the
opinion carefully in its entirety for a description of the
matters covered, procedures followed, assumptions made, matters
considered and limitations on the review undertaken. The full
text of Banc of America Securities LLC&#146;s written opinion,
dated October&nbsp;22, 2001, is attached to this Joint Proxy
Statement/ Prospectus as Annex&nbsp;III. <B>Banc of America
Securities LLC&#146;s opinion is addressed to the
D.R.&nbsp;Horton board of directors and does not constitute a
recommendation to any stockholder with respect to any matter
relating to the merger.</B>
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Ownership and Board Composition of D.R. Horton After the Merger (see page 78)" -->
<DIV align="left"><A NAME="015"></A></DIV>

<DIV align="left">
<B><FONT size="2">Ownership and Board Composition of
D.R.&nbsp;Horton After the Merger </FONT></B><FONT size="2">(see
page&nbsp;78)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton currently estimates that the
number of shares of D.R.&nbsp;Horton common stock issued to
Schuler stockholders in the merger will constitute between 20%
and 25% of the outstanding common stock of D.R.&nbsp;Horton
after the merger. D.R.&nbsp;Horton has agreed to use its best
efforts to appoint Mr.&nbsp;Schuler to the D.R.&nbsp;Horton
board of directors upon completion of the merger.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Appraisal Rights (see page 60)" -->
<DIV align="left"><A NAME="016"></A></DIV>

<DIV align="left">
<B><FONT size="2">Appraisal Rights
</FONT></B><FONT size="2">(see page&nbsp;60)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of Schuler common stock will be entitled
to appraisal rights in connection with the merger under
Section&nbsp;262 of the Delaware General Corporation Law. The
requirements and procedures for exercising appraisal rights are
described in detail in the section of this Joint Proxy
Statement/ Prospectus captioned &#147;Appraisal Rights&#148;
beginning on page&nbsp;60. A copy of the appraisal rights
provisions of the Delaware statute is attached as Annex IV to
this Joint Proxy Statement/ Prospectus.
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of D.R.&nbsp;Horton common stock are not
entitled to appraisal rights in connection with the merger.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Terms and Conditions of the Merger Agreement (see page 68)" -->
<DIV align="left"><A NAME="017"></A></DIV>

<DIV align="left">
<B><FONT size="2">Terms and Conditions of the Merger Agreement
</FONT></B><FONT size="2">(see page&nbsp;68)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement contains representations,
warranties, covenants and conditions that Schuler and
D.R.&nbsp;Horton believe are customary for transactions of this
type.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Comparative Rights of Stockholders (see page 91)" -->
<DIV align="left"><A NAME="018"></A></DIV>

<DIV align="left">
<B><FONT size="2">Comparative Rights of Stockholders
</FONT></B><FONT size="2">(see page&nbsp;91)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger is completed, the stockholders of
Schuler will become stockholders of D.R.&nbsp;Horton. The
certificate of incorporation and bylaws of D.R.&nbsp;Horton will
govern the rights of all of D.R.&nbsp;Horton&#146;s
stockholders, including the former Schuler stockholders.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "United States Federal Income Tax Consequences of the Merger to Schuler Stockholders (see page 96)" -->
<DIV align="left"><A NAME="019"></A></DIV>

<DIV align="left">
<B><FONT size="2">United States Federal Income Tax Consequences
of the Merger to Schuler Stockholders
</FONT></B><FONT size="2">(see page&nbsp;96)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton and Schuler have received
opinions from Gibson, Dunn &#38; Crutcher LLP that the merger
will constitute a &#147;reorganization&#148; within the meaning
of the Internal Revenue Code, and it is a condition to the
merger that these opinions be given again as of the closing
date. However, as described in the opinions, the
U.S.&nbsp;federal income tax consequences of the merger to
Schuler stockholders will depend upon the form of consideration
received in the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Schuler stockholder receives a combination
of D.R.&nbsp;Horton common stock and cash (other than cash in
lieu of a fractional share) in exchange for Schuler common
stock, the stockholder will generally recognize gain in an
amount equal to the lesser of the total amount of cash received
or the amount of gain realized on the exchange, but will not be
permitted to recognize a loss. Any gain recognized will be
treated either as a capital gain or as a dividend, depending on
the stockholder&#146;s individual circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Schuler stockholder receives solely
D.R.&nbsp;Horton common stock (and possibly cash in lieu of a
fractional share) in exchange for the Schuler common stock, then
the stockholder will not recognize gain or loss, except with
respect to the fractional share. If a Schuler stockholder
receives solely cash, then the stockholder will recognize gain
(or, alternatively, will likely be permitted to recognize loss)
equal to the difference between the amount of cash received and
the stockholder&#146;s basis in the Schuler stock. The tax
treatment of any gain recognized will depend upon each
stockholder&#146;s individual circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The tax treatment described above may not
apply to every Schuler stockholder. Determining the actual tax
consequences of the merger to Schuler stockholders may be
complicated and will depend on the specific situation of each
stockholder and on variables not within our control. Schuler
stockholders should consult their own tax advisors for a full
understanding of the tax consequences of the merger.</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link2 "Interests of Certain Persons in the Merger (see page 57)" -->
<DIV align="left"><A NAME="020"></A></DIV>

<DIV align="left">
<B><FONT size="2">Interests of Certain Persons in the Merger
</FONT></B><FONT size="2">(see page&nbsp;57)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Schuler. </FONT></I><FONT size="2">In
considering the recommendation of the Schuler board of directors
that Schuler stockholders vote in favor of the merger agreement
and the transactions contemplated by the merger agreement,
Schuler stockholders should be aware that some Schuler directors
and executive officers may have interests in the merger that are
in addition to the interests of Schuler stockholders generally.
The Schuler board of directors was aware of, and considered,
these interests in approving the merger agreement and the
transactions contemplated by the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D.R. Horton.</FONT></I><FONT size="2"> In
considering the recommendation of the D.R. Horton board of
directors that D.R.&nbsp;Horton stockholders vote in favor of
the merger agreement and the transactions contemplated by the
merger agreement, D.R. Horton stockholders should be aware that
a D.R. Horton director may have an interest in the merger that
is in addition to the interests of D.R. Horton stockholders
generally. The D.R. Horton board of directors was aware of, and
considered, the interest in approving the merger agreement and
the transactions contemplated by the merger agreement.
</FONT>

<P align="center"><FONT size="2">13
</FONT>
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<!-- link2 "Selected Historical Financial Data of D.R. Horton" -->
<DIV align="left"><A NAME="021"></A></DIV>

<P align="left">
<B><FONT size="2">Selected Historical Financial Data of D.R.
Horton</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected consolidated financial
data of D.R. Horton for the five years ended September&nbsp;30,
2001, are derived from the D.R. Horton audited consolidated
financial statements. These historical results are not
necessarily indicative of the results to be expected in the
future. You should also read the D.R. Horton historical
financial statements and related notes in D.R. Horton&#146;s
annual reports filed with the SEC for the year ended
September&nbsp;30, 2001, as well as the section of the annual
reports entitled &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations,&#148;
incorporated by reference into this Joint Proxy Statement/
Prospectus.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">For the Fiscal Years Ended September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(In millions, except for number of homes and per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Income Statement Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,578.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,176.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,156.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,653.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,455.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">159.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">254.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income per share before cumulative effect of
	change in accounting principle:(2)&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.55</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.95</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.53</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends declared per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.06</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of shares
	outstanding:(2)&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of homes closed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,038</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,944</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,395</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,144</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,371</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net (homes)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,551</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,952</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,911</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,223</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,179</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net ($ value)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,595.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,533.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,266.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,676.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,502.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period (homes)(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,961</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,341</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,309</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,388</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,263</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period ($&nbsp;value)(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">609.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,052.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,356.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,536.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,933.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Other Financial Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expensed&nbsp;&#151; directly and
	amortized to cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">105.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">117.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">152.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest incurred(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">70.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">110.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of earnings to fixed charges(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">As of September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,024.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,358.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,866.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,191.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,804.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,248.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,667.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,361.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,694.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,652.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">650.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">854.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,190.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,344.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,884.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stockholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">427.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">549.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">797.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">969.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,250.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">In fiscal 2001, D.R. Horton recorded the
	cumulative effect of a change in accounting principle, net of
	applicable income taxes, in the amount of $2.1&nbsp;million, to
	reflect the impact of the October&nbsp;1, 2000 adoption of
	Statement of Financial Accounting Standards No.&nbsp;133,
	&#147;Accounting for Derivative Instruments and Hedging
	Activities.&#148;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Income per share amounts and weighted average
	number of shares outstanding have been adjusted as appropriate
	to reflect the effects of the 9% and 11% stock dividends of
	September 2000 and March 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Basic income per share before cumulative effect
	of change in accounting principle is based upon the weighted
	average number of shares of common stock outstanding during each
	year.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Diluted income per share before cumulative effect
	of change in accounting principle is based upon the weighted
	average number of shares of common stock outstanding during each
	year, adjusted for the effects of dilutive securities
	outstanding.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes placed under contract during the
	period, net of cancellations.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes under contract but not yet
	closed at the end of the period.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Interest incurred consists of all interest costs,
	whether expensed or capitalized, including amortization of debt
	issuance costs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">For purposes of computing the ratio of earnings
	to fixed charges, earnings consist of the sum of income before
	cumulative effect of change in accounting principle, income
	taxes, interest amortized to cost of sales, interest expense,
	and the portion of rent expense deemed to represent interest.
	Fixed charges consist of interest incurred, whether expensed or
	capitalized, including the amortization of debt issuance costs,
	and the portion of rent expense deemed to represent interest.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Selected Historical Financial Data of Schuler" -->
<DIV align="left"><A NAME="022"></A></DIV>

<P align="left">
<B><FONT size="2">Selected Historical Financial Data of
Schuler</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected consolidated financial
data of Schuler are presented on a pro forma combined basis for
the six months ended September&nbsp;30, 2000 and on a historical
consolidated basis for the six months ended September&nbsp;30,
2001 and 2000. Schuler was formed in April 2001 as a result of
the combination of Schuler Residential and Western Pacific.
Schuler Residential is the predecessor of Schuler. The pro forma
combined financial data for the six months ended
September&nbsp;30, 2000 were derived from the consolidated
financial statements and other internal financial data of
Schuler Residential and Western Pacific. The historical
financial data for the six months ended September&nbsp;30, 2001
and 2000 were derived from the unaudited consolidated financial
statements and the related notes of Schuler and its predecessor
for the six months ended September&nbsp;30, 2001 and 2000,
respectively. These historical results are not necessarily
indicative of the results to be expected in the future. You
should also read the Schuler consolidated financial statements
and related notes for the six month period ended
September&nbsp;30, 2001 included in the Schuler Form&nbsp;10-Q
for the quarter ended September&nbsp;30, 2001, filed with the
SEC, as well as the section of the Form&nbsp;10-Q entitled
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations,&#148; incorporated into
this Joint Proxy Statement/ Prospectus by reference. You should
also read the Schuler Residential and Western Pacific historical
consolidated and combined financial statements and related notes
in the Schuler annual report for the year ended March&nbsp;31,
2001 filed with the SEC as well as the section of the annual
report entitled &#147;Management&#146;s Discussion and Analysis
</FONT>


<P align="center"><FONT size="2">15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">of Financial Condition and Results of
Operations,&#148; incorporated into this Joint Proxy Statement/
Prospectus by reference.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">For the Six Months Ended September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Predecessor</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Only</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(In millions, except for number of homes and per share amounts)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Income Statement Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">499.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">698.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.86</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends declared per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of shares outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of homes closed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,544</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,115</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,472</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net (homes)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,451</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,585</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,749</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net ($ value)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">350.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">750.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">813.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period (homes)(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">976</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,990</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,002</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period ($ value)(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">604.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">575.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Other Financial Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expensed&nbsp;&#151; directly and
	amortized to cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision (benefit) for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lenders&#146; profit participation(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in income of consolidated joint
	ventures(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory impairment losses(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other non-cash charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest incurred(9)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of earnings to fixed charges(10)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.9</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">994.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,171.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">562.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stockholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">432.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="4%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Results for the six months ended
	September&nbsp;30, 2000 are presented on a pro forma combined
	basis to include the results of both Schuler Residential and
	Western Pacific, including the following pro forma adjustments:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="1%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Net income includes a deduction of
	$3.0&nbsp;million from Western Pacific&#146;s operating results
	for income tax expense, based on an effective tax rate of 40.7%.
	Prior to the Schuler/ Western Pacific combination, Western
	Pacific was operated through a series of partnerships and
	therefore was not subject to taxation at the entity level.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Net income per share and the weighted average
	number of shares outstanding include the pro forma effect of the
	issuance of 20,166,000 Schuler shares of Class&nbsp;B common
	stock in the Schuler/ Western Pacific merger.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="4%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Net income for the six months ended
	September&nbsp;30, 2000 includes a $36.4&nbsp;million non-cash
	charge for impairment of Schuler Residential long-lived assets,
	pursuant to FASB Statement No.&nbsp;121. This non-cash
	impairment charge is a nonrecurring item and is not indicative
	of future operating results.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Basic net income per share is based upon the
	weighted average number of shares of common stock outstanding
	during the period.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Diluted net income per share is based upon the
	weighted average number of shares of common stock outstanding
	during each period, adjusted for the effects of dilutive
	securities outstanding, including Schuler&#146;s convertible
	subordinated debentures, which were redeemed by Schuler in
	August 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes placed under contract during the
	period, net of cancellations. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes under contract but not yet
	closed at the end of the period. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority. In the past, backlog has been a
	reliable indicator of future closings, but there is no assurance
	that homes and lots subject to pending sales contracts will
	close.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents lenders&#146; profit participation in
	connection with participating loans.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Minority interest in income of consolidated joint
	ventures represents the amount of income from consolidated joint
	ventures that is attributable to the ownership interests of the
	minority joint venture partners. Schuler has utilized joint
	ventures to finance specific homebuilding projects, and the
	minority interest in the income of these joint ventures
	represents a financing cost to Schuler.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Interest incurred consists of all interest costs,
	whether expensed or capitalized, including amortization of debt
	issuance costs.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">For purposes of computing the ratio of earnings
	to fixed charges, earnings consist of the sum of income before
	income taxes, interest amortized to cost of sales, interest
	expense, and the portion of rent expense deemed to represent
	interest. Fixed charges consist of interest incurred, whether
	expensed or capitalized, including the amortization of debt
	issuance costs, and the portion of rent expense deemed to
	represent interest. This ratio is not presented for pro forma
	financial results.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Selected Historical Financial Data of Schuler Residential" -->
<DIV align="left"><A NAME="023"></A></DIV>

<P align="left">
<B><FONT size="2">Selected Historical Financial Data of Schuler
Residential</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected consolidated financial
data of Schuler Residential represent results of operations of
Schuler Residential for the five fiscal years ended
March&nbsp;31, 2001. The data do not include data of Western
Pacific because the combination with Western Pacific occurred in
April 2001. The financial data were derived from the
consolidated financial statements and other financial data of
Schuler Residential. These historical results are not
necessarily indicative of the results to be expected in the
future. In December 2000, Schuler Residential changed its
accounting fiscal year from a December&nbsp;31 year-end to a
March&nbsp;31&nbsp;year-end. You should also read Schuler
Residential&#146;s historical consolidated financial statements
and related notes in the Schuler annual report filed with the
SEC as well as the
</FONT>


<P align="center"><FONT size="2">17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">section of the annual report entitled
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations,&#148; incorporated by
reference into this Joint Proxy Statement/ Prospectus.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Three</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Months</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">For the Fiscal Years Ended December&nbsp;31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">March&nbsp;31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">March&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1996</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="23" align="center" nowrap><B><FONT size="1">(In millions, except for number of homes and per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Income Statement Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">229.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">282.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">506.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">160.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">632.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss)(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income (loss) per share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.55</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.48</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.55</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.46</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends declared per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of shares outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of homes closed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">512</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,427</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,827</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,643</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">781</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,799</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net (homes)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">453</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,757</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,100</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,936</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">876</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,851</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net ($&nbsp;value)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">101.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">302.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">392.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">613.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">207.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">689.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period (homes)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">408</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">681</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">974</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,069</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,121</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period<BR>
	($&nbsp;value)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">208.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">248.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">277.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Other Financial Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expensed&nbsp;&#151; directly and
	amortized to cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision (benefit) for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in income of consolidated joint
	ventures(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventory impairment losses(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other non-cash charges
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest incurred(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of earnings (loss) to fixed charges(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">As of December&nbsp;31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">March&nbsp;31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">March&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1996</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">238.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">291.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">325.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">436.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">442.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">519.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">340.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">385.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">490.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">496.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">595.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">102.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">177.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">236.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">224.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">294.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stockholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">157.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">163.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">175.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">201.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">210.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">231.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Net income includes the following non-cash
	charges for impairment of long-lived assets, pursuant to FASB
	Statement No.&nbsp;121: $23.9&nbsp;million during the year ended
	December&nbsp;31, 1996, and $36.4&nbsp;million during the year
	ended March&nbsp;31, 2001. These non-cash impairment charges are
	nonrecurring items and are not indicative of future operating
	results.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Basic net income (loss) per share is based upon
	the weighted average number of shares of common stock
	outstanding during each year.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Diluted net income (loss) per share is based upon
	the weighted average number of shares of common stock
	outstanding during each year, adjusted for the effects of
	dilutive securities outstanding, including Schuler&#146;s
	convertible subordinated debentures, which were redeemed by
	Schuler in August 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes placed under contract during the
	period, net of cancellations. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes under contract but not yet
	closed at the end of the period. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority. In the past, backlog has been a
	reliable indicator of future closings, but there is no assurance
	that homes and lots subject to pending sales contracts will
	close.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Minority interest in income of consolidated joint
	ventures represents the amount of income from consolidated joint
	ventures that is attributable to the ownership interests of the
	minority joint venture partners. Schuler Residential utilized
	joint ventures to finance specific homebuilding projects, and
	the minority interest in the income of these joint ventures
	represented a financing cost to Schuler Residential.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Interest incurred consists of all interest costs,
	whether expensed or capitalized, including amortization of debt
	issuance costs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">For purposes of computing the ratio of earnings
	to fixed charges, earnings consist of the sum of income before
	income taxes, interest amortized to cost of sales, interest
	expense, the portion of rent expense deemed to represent
	interest, and income distributions from unconsolidated joint
	ventures reduced by income from unconsolidated joint ventures.
	Fixed charges consist of interest incurred, whether expensed or
	capitalized, including the amortization of debt issuance costs,
	if applicable, and the portion of rent expense deemed to
	represent interest.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Selected Historical Financial Data of Western Pacific" -->
<DIV align="left"><A NAME="024"></A></DIV>

<P align="left">
<B><FONT size="2">Selected Historical Financial Data of Western
Pacific</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected combined financial data of
Western Pacific represent results of operations of Western
Pacific for the five fiscal years ended March&nbsp;31, 2001. The
data do not include data of Schuler Residential because the
combination with Western Pacific occurred in April 2001. The
financial data were derived from the combined financial
statements and other financial data of Western Pacific. These
historical results are not necessarily indicative of the results
to be expected in the future. You should also read Western
Pacific&#146;s historical financial statements and related notes
in the Schuler annual report filed with the SEC as well as the
section of the annual report entitled &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations,&#148; incorporated by reference into this Joint
Proxy Statement/ Prospectus.
</FONT>


<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">For the Fiscal Years Ended March&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(In millions, except number of homes and per share amounts)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Income Statement Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">192.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">423.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">535.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">709.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income(1)(2)(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">For the Fiscal Years Ended March&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">(In millions, except number of homes and per share amounts)</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Selected Operating Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of homes closed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">460</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">970</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,660</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,693</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,098</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net (homes)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">534</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,184</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,766</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,251</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net ($&nbsp;value)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">230.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">428.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">561.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">767.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period (homes)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">381</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">378</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">451</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">604</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period ($&nbsp;value)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">77.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">140.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">178.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Other Financial Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expensed&nbsp;&#151; directly and
	amortized to cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Lenders&#146; profit participation(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interest in income (loss) of
	consolidated joint ventures(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other non-cash charges(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest incurred(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of earnings to fixed charges(9)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">As of March&nbsp;31,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">143.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">169.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">330.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">339.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">183.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">309.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">394.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">434.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">184.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">212.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total partners&#146; capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">73.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">114.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">138.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Net income for the year ended March&nbsp;31, 2001
	includes a non-cash charge of $4.2&nbsp;million for compensation
	expense recognized in conjunction with equity interests granted
	to Western Pacific executives during the year ended
	March&nbsp;31, 2001. This charge is a nonrecurring item and is
	not indicative of future operating results.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Western Pacific was operated through a number of
	partnerships and limited liability companies prior to its
	combination with Schuler Residential in April 2001. Therefore,
	each partner and member of the entities that comprised Western
	Pacific reflected its share of taxable income on a separate
	return. Accordingly, no provision for income taxes was included
	in the combined financial statements of Western Pacific.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Per share information is not applicable to
	Western Pacific, as it was operated through a series of
	partnerships and limited liability companies prior to its
	combination with Schuler Residential in April&nbsp;2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes placed under contract during the
	period, net of cancellations. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents homes under contract but not yet
	closed at the end of the period. Some of these contracts are
	subject to contingencies, including mortgage loan approval, the
	sale of existing homes by customers and project approvals by the
	applicable government authority. In the past, backlog has been a
	reliable indicator of future closings, but there is no assurance
	that homes and lots subject to pending sales contracts will
	close.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents lenders&#146; profit participation in
	connection with participating loans.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Minority interest in income (loss) of
	consolidated joint ventures represents the amount of income
	(loss) from consolidated joint ventures that is attributable to
	the ownership interests of the minority joint venture partners.
	Western Pacific utilized joint ventures to finance specific
	homebuilding projects, and the minority interest in the income
	of these joint ventures represented a financing cost to Western
	Pacific.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Interest incurred consists of all interest costs,
	whether expensed or capitalized, including amortization of debt
	issuance costs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">For purposes of computing the ratio of earnings
	to fixed charges, earnings represent the sum of income before
	income taxes, interest amortized to cost of sales, interest
	expense, the portion of the rent expense deemed to represent
	interest, and income distributions from unconsolidated joint
	ventures reduced by income from unconsolidated joint ventures.
	Fixed charges consist of interest incurred, whether expensed or
	capitalized, including amortization of debt issuance costs, and
	the portion of rent expense deemed to represent interest.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Summary Selected Unaudited Pro Forma Combined Financial Data (see page 80)" -->
<DIV align="left"><A NAME="025"></A></DIV>


<P align="left">
<B><FONT size="2">Summary Selected Unaudited Pro Forma Combined
Financial Data </FONT></B><FONT size="2">(see page&nbsp;80)
</FONT>



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under accounting principles generally accepted in
the United States, the merger of Schuler into D.R.&nbsp;Horton
will be accounted for under the purchase method of accounting.
Accordingly, the purchase price will be allocated to the Schuler
assets acquired and liabilities assumed based on their
respective fair values, with the excess to be allocated to
goodwill. The results of operations of Schuler will be included
in the D.R.&nbsp;Horton statements of income from the effective
date of the merger. The valuations and other studies required to
determine the fair value of the Schuler assets acquired and
liabilities assumed have not been performed and, accordingly,
the related adjustments reflected in the unaudited pro forma
combined financial information are preliminary and subject to
further revisions and adjustments. The total purchase price is
estimated to be $805.2&nbsp;million as of September&nbsp;30,
2001, which includes the value of the cash and estimated equity
consideration to be paid by D.R.&nbsp;Horton, estimated merger
costs, and costs associated with the issuance of
D.R.&nbsp;Horton stock options in the merger. The estimated
purchase price calculation assumes that the base merger
consideration for each share of Schuler common stock will
include $4.09 in cash and .487&nbsp;shares of D.R.&nbsp;Horton
common stock. This calculation is detailed in Note&nbsp;C(1) of
the Notes to the Unaudited Pro Forma Condensed Financial
Statements, contained in this Joint Proxy Statement/ Prospectus.
The goodwill and other intangibles acquired, based on the excess
of the purchase price over the net assets to be acquired as of
September&nbsp;30, 2001, is currently estimated to be
$438.1&nbsp;million.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited selected consolidated
financial data are presented on a pro forma combined basis to
reflect the merger of D.R.&nbsp;Horton and Schuler, as if the
two companies had been combined on October&nbsp;1, 2000 for
income statement, operating and other financial data, and on
September&nbsp;30, 2001 for balance sheet data. This pro forma
combined information is derived from the historical financial
statements of D.R.&nbsp;Horton and of Schuler and its
predecessor. The companies may have performed differently if
they had actually been combined during the period presented. You
should not rely on the pro forma information as being indicative
of the historical results that D.R.&nbsp;Horton would have
experienced during the period presented or of the results that
D.R.&nbsp;Horton will experience following the merger. You
should also read the audited and unaudited financial statements
and related notes for D.R. Horton and Schuler, as well as the
section of the D.R.&nbsp;Horton and Schuler annual reports
entitled &#147;Management&#146;s
</FONT>

<P align="center"><FONT size="2">21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Discussion and Analysis of Financial Condition
and Results of Operations,&#148; which are incorporated into
this Joint Proxy Statement/ Prospectus by reference.
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">For the Fiscal Year</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Ended September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(In millions, except for number of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">homes and per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined Income Statement
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,996.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">346.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income per share before cumulative effect of
	change in accounting principle:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends declared per common share(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of shares outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">95.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">97.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined Selected Operating
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of homes closed
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,625</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net (homes)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,445</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">New sales orders, net ($&nbsp;value)(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,013.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period (homes)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,265</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Sales backlog at end of period ($&nbsp;value)(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,509.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined Other Financial
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expensed&nbsp;&#151; directly and
	amortized to cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">170.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Provision for income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">213.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Depreciation and amortization
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest incurred(6)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">203.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Supplemental ratio of earnings to fixed charges(7)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined Balance Sheet
	Data:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,799.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,039.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,471.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stockholders&#146; equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,874.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value per common share(8)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined basic income per share before
	cumulative effect of change in accounting principle is based
	upon the weighted average number of shares of D.R.&nbsp;Horton
	common stock outstanding during the year, plus the assumed
	issuance of 19.8&nbsp;million shares of D.R.&nbsp;Horton common
	stock to be issued in the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined diluted net income per share
	before cumulative effect of change in accounting principle is
	based upon the weighted average number of shares of
	D.R.&nbsp;Horton common stock outstanding during the year,
	adjusted for the effects of dilutive securities outstanding,
	plus the assumed issuance of 19.8&nbsp;million shares of
	D.R.&nbsp;Horton common stock to be issued in the merger and the
	assumed dilutive effect of D.R.&nbsp;Horton stock options to be
	issued in connection with the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The pro forma combined cash dividends per share
	are not necessarily indicative of dividends to be paid in future
	periods. Future dividends will be determined by the
	D.R.&nbsp;Horton board of directors based on the earnings and
	financial condition of D.R.&nbsp;Horton and its subsidiaries, as
	well as other factors.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents pro forma combined homes placed under
	contract during the period, net of cancellations.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents pro forma combined homes under
	contract but not yet closed at the end of the period.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined interest incurred consists of
	all interests costs, whether expensed or capitalized, including
	amortization of debt issuance costs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">For purposes of computing the supplemental pro
	forma combined ratio of earnings to fixed charges, earnings
	consist of the sum of income before the cumulative effect of
	change in accounting principle, income taxes, interest amortized
	to cost of sales, interest expense, and the portion of rent
	expense deemed to represent interest. Fixed charges consist of
	interest incurred, whether expensed or capitalized, including
	amortization of debt issuance costs, and the portion of rent
	expense deemed to represent interest.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined book value per share is
	computed by dividing pro forma stockholders&#146; equity by the
	combined number of D.R.&nbsp;Horton common shares outstanding at
	the end of the period, plus the assumed issuance of
	19.8&nbsp;million shares of D.R.&nbsp;Horton common stock to be
	issued in the merger.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Comparative Per Share Data" -->
<DIV align="left"><A NAME="026"></A></DIV>

<P align="left">
<B><FONT size="2">Comparative Per Share Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain historical
per share data of D.R. Horton and Schuler and combined per share
data on an unaudited pro forma basis after giving effect to the
merger as if it had occurred on October&nbsp;1, 2000. The merger
is accounted for as a purchase, assuming that D.R.&nbsp;Horton
paid $4.09 in cash and issued .487&nbsp;shares of
D.R.&nbsp;Horton common stock in exchange for each share of
Schuler common stock outstanding. This data should be read in
conjunction with the selected historical audited and unaudited
financial data and the historical audited and unaudited
financial statements of D.R.&nbsp;Horton and Schuler and the
notes thereto that are incorporated herein by reference. The
selected pro forma combined financial information of
D.R.&nbsp;Horton and Schuler is derived from the unaudited pro
forma combined condensed financial statements and should be read
in conjunction with such unaudited pro forma statements and
notes thereto included elsewhere in this Joint Proxy Statement/
Prospectus. The unaudited pro forma information is presented for
illustrative purposes only and is not necessarily indicative of
the combined financial position or results of operations for
future periods or the results that actually would have been
realized had D.R.&nbsp;Horton and Schuler been a single entity
during the periods presented.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of and for the</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">D.R.&nbsp;Horton</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Historical Per Share:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined&nbsp;&#151; Per Horton
	Share:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">As of and for the</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Schuler</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Per Share(4):</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.64</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Pro Forma Combined&nbsp;&#151; Per Equivalent
	Schuler Share(5):</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.77</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.44</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Historical book value per common share is
	computed by dividing stockholders&#146; equity for
	D.R.&nbsp;Horton and Schuler by the number of shares of common
	stock outstanding at the end of the period for D.R.&nbsp;Horton
	and Schuler, respectively. Pro forma combined book value per
	common share for D.R.&nbsp;Horton is computed by dividing pro
	forma combined stockholders&#146; equity by the number of shares
	of D.R.&nbsp;Horton common stock outstanding at the end of the
	period plus the assumed number of shares of D.R.&nbsp;Horton
	common stock to be issued in the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined basic income per share before
	cumulative effect of change in accounting principle is based
	upon the weighted average number of shares of D.R.&nbsp;Horton
	common stock outstanding during the year, plus the assumed
	number of shares of D.R.&nbsp;Horton common stock to be issued
	in the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined diluted income per share
	before cumulative effect of change in accounting principle per
	share is based upon the weighted average number of shares of
	D.R.&nbsp;Horton common stock outstanding during the year,
	adjusted for the effects of dilutive securities outstanding,
	plus the assumed number of shares of D.R.&nbsp;Horton common
	stock to be issued in the merger and the assumed dilutive effect
	of D.R.&nbsp;Horton stock options to be issued in the merger.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler historical per share information is
	presented on a pro forma combined basis to reflect the combined
	results of operations of Schuler and Western Pacific for the
	year ended September&nbsp;30, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Pro forma combined information per equivalent
	Schuler share is computed by multiplying D.R.&nbsp;Horton&#146;s
	pro forma combined per share information by .487, the assumed
	fraction of a share of D.R.&nbsp;Horton common stock to be
	issued per share of Schuler common stock as part of the base
	merger consideration, based on a $32.133 average closing price
	of D.R.&nbsp;Horton common stock. The book value per equivalent
	Schuler share does not include the $4.09&nbsp;per share cash
	consideration to be paid to the Schuler stockholders.
	</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">24
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2"> The following table presents the pro forma
	combined information per equivalent Schuler share, assuming
	other average D.R. Horton common stock closing prices:
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">As of and for the Fiscal Year Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Assumed D.R. Horton average closing price
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fraction of a D.R. Horton share to be issued per
	share of Schuler common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.635</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.570</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.536</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="3" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pro Forma Combined&nbsp;&#151; Per Equivalent
	Schuler Share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.90</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.88</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.83</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.81</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<!-- link2 "Market Price and Dividend Data" -->
<DIV align="left"><A NAME="027"></A></DIV>

<DIV align="left">
<B><FONT size="2">Market Price and Dividend Data</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton common stock is listed on the
New York Stock Exchange under the symbol DHI, and Schuler
Class&nbsp;A common stock is listed on the Nasdaq National
Market under the symbol SHLR. The following table sets forth for
the periods indicated the high and low sale prices of
D.R.&nbsp;Horton common stock and Schuler Class&nbsp;A common
stock, as reported on the New York Stock Exchange composite tape
and the Nasdaq National Market Quotation System, respectively,
and the cash dividends paid per share by D.R.&nbsp;Horton.
Schuler paid no dividends during the periods indicated.
D.R.&nbsp;Horton common stock market prices have been adjusted
for D.R.&nbsp;Horton&#146;s 9% stock dividend of September 2000
and 11% stock dividend of March 2001. Schuler common stock
market prices include prices for the common stock of Schuler
Residential, Inc. through April&nbsp;3, 2001, at which time
Schuler completed the combination of the operations of Schuler
Residential with those of Western Pacific.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton common stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Schuler Class A Common Stock</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Quarter Ended</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Dividends</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Dividends</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">September&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">$20.61
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">$12.60
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0225</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">$&nbsp;9.25
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">$&nbsp;6.25
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">December&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">19.01
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.78
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0225</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.88
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1999
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">19.01
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">12.24
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0300</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">9.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.88
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">June&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">16.53
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">12.71
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0300</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.88
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.75
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">September&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">14.51
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">10.02
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0300</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">6.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">December&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">12.86
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.26
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0300</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">7.75
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">6.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">11.62
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.99
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0400</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">6.81
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.25
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">June&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">12.09
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">10.07
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0400</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">6.69
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.56
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">September&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">17.36
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">11.36
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0400</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">12.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">5.94
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">December&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">23.42
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">13.74
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0400</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">11.50
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">7.75
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">24.32
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">17.90
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">15.25
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">8.06
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">June&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">25.99
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">19.25
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">18.70
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">10.87
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">September&nbsp;30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">30.00
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">17.50
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">17.10
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">10.06
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">December&nbsp;31
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">33.50
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">19.87
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.0500</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">20.56
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">10.82
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">January&nbsp;1, 2002 through January&nbsp;14, 2002
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">33.20
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">29.75
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">20.30
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top">
	<FONT size="2">18.65
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;22, 2001, the last trading day
prior to public announcement of the merger, the closing price of
D.R.&nbsp;Horton common stock reported on the New York Stock
Exchange composite tape was $21.10&nbsp;per share, and the last
sale price of Schuler Class&nbsp;A common stock reported on the
Nasdaq National Market Quotation System was $12.00&nbsp;per
share.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;14, 2002, the closing price of
D.R.&nbsp;Horton common stock reported on the New&nbsp;York
Stock Exchange composite tape was $30.58&nbsp;per share, and the
last sale price of Schuler Class&nbsp;A common stock reported on
the Nasdaq National Market Quotation System was $19.00&nbsp;per
share.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">25
</FONT>
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<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="028"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Schuler and D.R.&nbsp;Horton stockholders
should consider the following risk factors, together with the
other information included and incorporated by reference in this
Joint Proxy Statement/ Prospectus, in deciding whether to vote
to approve the merger.</FONT></I>

<P align="left">
<B><FONT size="2">Risk Factors Relating to the Merger</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Changes in the market value of
	D.R.&nbsp;Horton common stock could reduce the value received
	for Schuler common stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Approximately three-quarters, in the aggregate,
of what Schuler stockholders will receive in the merger will be
D.R.&nbsp;Horton common stock, depending on the average closing
price of D.R.&nbsp;Horton common stock used to calculate the
merger consideration. Accordingly, the value of the merger
consideration will fluctuate with the market price of
D.R.&nbsp;Horton common stock. In addition, the actual closing
price of D.R.&nbsp;Horton&#146;s common stock on the date of the
merger may be less than the 15&nbsp;day average closing price
used to calculate the common stock portion of the merger
consideration, thereby decreasing the value that Schuler
stockholders receive. Further, regardless of what the price of
D.R.&nbsp;Horton common stock may be at the time of the merger,
the price of D.R.&nbsp;Horton common stock could fall after the
merger, particularly if a substantial number of Schuler
stockholders decide to sell their D.R.&nbsp;Horton common stock
shortly after the merger.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">A Schuler stockholder who elects to receive
	all cash or all D.R.&nbsp;Horton common stock may not receive
	the full amount he or she elects to receive.</FONT></I></B></TD>
</TR>

</TABLE>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although Schuler stockholders will have the right
to elect to receive merger consideration consisting of all
D.R.&nbsp;Horton common stock or all cash, if they elect all
stock or all cash, they may instead receive a prorated
combination of D.R.&nbsp;Horton common stock and cash, because
the aggregate amount of D.R.&nbsp;Horton common stock and cash
that Schuler stockholders can receive in the merger will be
fixed. Consequently, for excess cash to be available to pay
Schuler stockholders who elect all cash, some of the other
Schuler stockholders must elect to receive all stock. In
addition, to the extent some Schuler stockholders elect to
receive all stock, thus making excess cash available, that cash
is subject to reduction if there are stockholders who elect
appraisal rights. For Schuler stockholders that have elected to
receive all stock, excess shares of D.R.&nbsp;Horton common
stock will only be available to the extent that other Schuler
stockholders have elected to receive all cash. Finally, to
retain reorganization treatment of the merger for federal tax
purposes, the merger agreement provides that, if more than 50%
of the total value of the merger consideration would be cash,
the cash portion of the merger consideration would be decreased
so that at least 50% of the total value of the merger
consideration would be in stock. D.R.&nbsp;Horton and Schuler
cannot offer any assurance as to how much excess cash or excess
shares of D.R.&nbsp;Horton common stock will be available to
satisfy fully any all cash or all stock elections. See &#147;The
Merger Agreement&nbsp;&#151; Merger Consideration&#148; for more
information.
</FONT>


<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">If D.R.&nbsp;Horton does not successfully
	integrate the Schuler operations after the merger,
	D.R.&nbsp;Horton may not realize the benefits it expects from
	the merger.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If D.R.&nbsp;Horton is not able to effectively
integrate the operations and personnel of D.R.&nbsp;Horton and
Schuler in a timely and efficient manner, it may not realize the
benefits it expects from the merger. In particular, if the
integration is not successful:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton&#146;s costs may be higher
	relative to its revenues than they were before the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the combined company may lose key personnel;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton may not be able to retain or
	expand Schuler&#146;s market position;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the market price of D.R.&nbsp;Horton common stock
	may decline as a result of the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">26
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Some of Schuler&#146;s directors have other
	interests that could have influenced their decision to recommend
	the merger to Schuler stockholders, which could reduce the value
	to Schuler stockholders.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some directors of Schuler who voted on the merger
could have been more likely to vote to approve the merger
agreement as a result of their personal interests in the merger.
On the record date, directors of Schuler and their affiliates
beneficially owned approximately 47.5% of the voting power of
outstanding Schuler Class&nbsp;A common stock and 100% of the
voting power of outstanding Schuler Class&nbsp;B common stock.
In considering the recommendation of the Schuler board of
directors to approve the merger, Schuler stockholders should
recognize that some of Schuler&#146;s directors participate in
arrangements and all have continuing indemnification against
liabilities that provide them with interests in the merger that
are different from, or are in addition to, the interests of
Schuler stockholders. For example, James K. Schuler,
Co-chairman, President and Chief Executive Officer of Schuler,
has entered into an employment agreement with D.R.&nbsp;Horton
providing that Mr.&nbsp;Schuler will become a senior vice
president of D.R.&nbsp;Horton and president of the Schuler Homes
region of D.R.&nbsp;Horton following the merger, although his
employment agreement with D.R.&nbsp;Horton does contain less
favorable bonus and severance provisions than his current
agreement with Schuler. In addition, Eugene Rosenfeld, a
director of Schuler, is a limited partner of Highridge Pacific
Housing Investors,&nbsp;LP, and Ricardo Koenigsberger and Lee
Neibart, directors of Schuler, are each limited partners of
Apollo Real Estate Advisors, L.P. Highridge Pacific Housing
Investors, Apollo Real Estate Advisors and other entities
affiliated with Apollo have direct and indirect beneficial
ownership interests in the Western Pacific parties to the
agreement by which Schuler acquired the business of Western
Pacific Housing in April 2001. The indemnification obligations
of the parties to the Western Pacific agreement will be
terminated upon consummation of the merger as contemplated by
the merger agreement. Also, stock options to purchase
approximately 41,000&nbsp;shares of Schuler&#146;s Class&nbsp;A
common stock held by Schuler&#146;s non-employee directors will
become fully vested and exercisable immediately prior to the
effective time of the merger.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Risk Factors Relating to
D.R.&nbsp;Horton</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following risk factors will apply to
D.R.&nbsp;Horton and to the combined operations of
D.R.&nbsp;Horton and Schuler after the merger.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Because of the cyclical nature of
	D.R.&nbsp;Horton&#146;s industry, future changes in general
	economic, real estate construction or other business conditions
	could adversely affect the business of the combined
	companies.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cyclical Industry.
</FONT></I><FONT size="2">The homebuilding industry is cyclical
and is significantly affected by changes in general and local
economic conditions, such as:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">employment levels;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">availability of financing for home buyers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">interest rates;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">consumer confidence;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">housing demand.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An oversupply of alternatives to new homes, such
as rental properties and used homes, could depress new home
prices and reduce the margins on the sale of new homes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terrorist attacks at the World Trade Center
and the Pentagon or similar acts of violence in the future, and
any corresponding responses by the United States, may adversely
affect general economic conditions or worsen the current
slowdown of the national economy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Inventory Risks.
</FONT></I><FONT size="2">Inventory risk can be substantial for
homebuilders. D.R.&nbsp;Horton must continuously seek and make
acquisitions of land for expansion into new markets and for
replacement and expansion of land inventory within its current
markets. The risks inherent in purchasing and developing land
increase as consumer demand for housing decreases. Thus,
D.R.&nbsp;Horton may have bought and developed land on
</FONT>

<P align="center"><FONT size="2">27
</FONT>
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<DIV align="left">
<FONT size="2">which it cannot build and sell homes. As a result
of its growth and acquisitions, D.R.&nbsp;Horton is developing
more land than it has in recent years. The market value of
undeveloped land, building lots and housing inventories can
fluctuate significantly as a result of changing market
conditions. D.R.&nbsp;Horton cannot assure you that the measures
employed to manage inventory risks will be successful.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, inventory carrying costs can be
significant and can result in losses in a poorly performing
project or market. In the event of significant changes in
economic or market conditions, D.R.&nbsp;Horton may have to sell
homes at a loss.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Supply Risks. </FONT></I><FONT size="2">The
homebuilding industry has from time to time experienced
significant difficulties, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">shortages of qualified trades people;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reliance on local subcontractors, who may be
	inadequately capitalized;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">shortages of materials;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">volatile increases in the cost of materials,
	particularly increases in the price of lumber, framing and
	cement, which are significant components of home construction
	costs.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Risks from Nature.
</FONT></I><FONT size="2">Weather conditions and natural
disasters, such as hurricanes, tornadoes, earthquakes, floods
and fires, can harm the homebuilding business. The climates and
geology of many of the states in which D.R.&nbsp;Horton will
operate after the merger, including California, Florida,
Georgia, Hawaii, North Carolina, Oregon, South Carolina, Texas
and Washington, present increased risks of natural disaster.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of all of the foregoing, in the
future, potential customers may be less willing or able to buy
homes from D.R.&nbsp;Horton, or D.R.&nbsp;Horton may take longer
or incur more costs to build them. D.R.&nbsp;Horton may not be
able to recapture increased costs by raising prices in many
cases because it fixed its prices up to six months in advance of
delivery by signing home sales contracts. In addition, some home
buyers may cancel or not honor their home sales contracts
altogether.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Future increases in interest rates or
	reductions in mortgage availability could prevent potential
	customers from buying homes and adversely affect the business of
	D.R.&nbsp;Horton.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Virtually all customers finance their
acquisitions through lenders providing mortgage financing.
Increases in interest rates or decreases in availability of
mortgage financing could depress the market for new homes
because of the increased monthly mortgage costs to potential
home buyers. Even if potential customers do not need financing,
changes in interest rates and mortgage availability could make
it harder for them to sell their homes to potential buyers who
need financing. This could adversely affect the results of
operations of D.R.&nbsp;Horton.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, D.R.&nbsp;Horton believes that the
availability of FHA and VA 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 its sales.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Governmental regulations could increase the
	cost and limit the availability of the combined companies&#146;
	development and homebuilding projects and adversely affect their
	business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton is subject to extensive and
complex regulations that affect the development and homebuilding
process, including zoning, density and building standards. These
regulations often provide broad discretion to the governmental
authorities administering the standards. This can delay or
increase the costs of development or homebuilding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton also is subject to a variety of
local, state and federal laws and regulations concerning
protection of the environment. These environmental laws may
result in delays, may cause D.R.&nbsp;Horton to incur
substantial compliance and other costs, and can prohibit or
severely restrict development and homebuilding activity in
environmentally sensitive regions or areas.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">The substantial debt of D.R.&nbsp;Horton
	may adversely affect its financial health and prevent it from
	fulfilling its obligations under its debt
	arrangements.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton and Schuler have a significant
amount of debt. As of September&nbsp;30, 2001, the pro forma
consolidated debt of the two&nbsp;companies would have been
$2.5&nbsp;billion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Possible Consequences.
</FONT></I><FONT size="2">The amount of D.R.&nbsp;Horton&#146;s
debt after the merger could have important consequences to you.
For example, it could:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">limit D.R.&nbsp;Horton&#146;s ability to obtain
	future financing for working capital, capital expenditures,
	acquisitions, debt service requirements or other requirements;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">require it to dedicate a substantial portion of
	its cash flow from operations to the payment on its debt and
	reduce its ability to use cash flow for other purposes;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">limit its flexibility in planning for, or
	reacting to, the changes in its business;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">place it at a competitive disadvantage because it
	has more debt than some of its competitors;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make it more vulnerable in the event of a
	downturn in its business or in general economic conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dependence on Future Performance.
</FONT></I><FONT size="2">The ability of D.R.&nbsp;Horton after
the merger to meet its debt service and other obligations will
depend upon its future performance. D.R.&nbsp;Horton is engaged
in a business that is substantially affected by changes in
economic cycles. Revenues and earnings vary with the level of
general economic activity in the markets they serve. Its
business is also affected by financial, political, business and
other factors, many of which are beyond its control. The factors
that affect its ability to generate cash can also affect its
ability to raise additional funds for these purposes through the
sale of equity securities, the refinancing of debt, or the sale
of assets. Changes in prevailing interest rates may affect its
ability to meet its debt service obligations after the merger,
because borrowings under the D.R.&nbsp;Horton revolving credit
facility bear interest at floating rates. D.R. Horton has
entered into &#147;interest rate swap&#148; agreements for only
a portion of its outstanding borrowings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Required
Refinancings.</FONT></I><FONT size="2"> In connection with the
merger, D.R.&nbsp;Horton will be required to refinance the
indebtedness under Schuler&#146;s revolving credit facility,
under which $47.1&nbsp;million principal amount was outstanding
as of September&nbsp;30, 2001. In addition, the holders of
$500&nbsp;million principal amount of Schuler&#146;s outstanding
senior and senior subordinated notes will have the right to
cause D.R.&nbsp;Horton to repurchase their notes at 101% of the
principal amount thereof. D.R.&nbsp;Horton believes that its
existing cash and the availability under its current revolving
credit facility will be sufficient to refinance the indebtedness
it may be required to refinance or repurchase as a result of the
merger.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton revolving credit facility
matures in April 2002, and D.R.&nbsp;Horton is negotiating with
its banks concerning a new facility. Based on these
negotiations, D.R.&nbsp;Horton believes that the amount of the
new facility will be $810&nbsp;million, including
$125&nbsp;million for letters of credit. D.R.&nbsp;Horton
believes that the initial interest rate for outstanding
borrowings under the new facility will be 1.625% over LIBOR. In
addition, D.R. Horton believes that it can obtain access to
bridge or other financing should it be required to finance the
repurchase of any of the outstanding Schuler debt.
</FONT>



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton&#146;s debt payment obligations
for fiscal 2002 total $234.6&nbsp;million. Had the merger taken
place on September&nbsp;30, 2001, D.R.&nbsp;Horton&#146;s pro
forma combined debt payment obligations for fiscal 2002 would
have totaled $309.9&nbsp;million, exclusive of any required
repurchase of the outstanding Schuler senior and senior
subordinated notes, of which $500&nbsp;million is outstanding as
of September&nbsp;30, 2001. Based on the current level of
operations of D.R.&nbsp;Horton and Schuler, D.R. Horton believes
its cash flow from operations, available cash and existing or
available borrowing capacity, including borrowings under its
existing or new revolving credit facility, will be adequate to
meet its future liquidity needs after the merger.
D.R.&nbsp;Horton cannot assure you, however, that in the future
its business will generate sufficient cash flow from operations
or that borrowings will be available to it in an amount
sufficient to enable it to pay its indebtedness or to fund other
liquidity needs.
</FONT>


<P align="center"><FONT size="2">29
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Indenture and Credit Facility Restrictions.
</FONT></I><FONT size="2">The indentures governing the
outstanding public debt of D.R.&nbsp;Horton and Schuler and the
D.R.&nbsp;Horton revolving credit facility impose restrictions
on operations and activities. The most significant restrictions
relate to debt incurrence, lien incurrence, sales of assets and
cash distributions by D.R.&nbsp;Horton, and require it to comply
with certain financial covenants. If D.R.&nbsp;Horton fails to
comply with any of these restrictions or covenants, the trustees
or the banks, as appropriate, could cause its debt to become due
and payable prior to maturity. D.R.&nbsp;Horton anticipates that
it will remain in compliance with the terms of its outstanding
debt after the merger.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Homebuilding is very competitive, and
	competitive conditions could adversely affect the business of
	D.R.&nbsp;Horton.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The homebuilding industry is highly competitive.
Homebuilders compete not only for home buyers, but also for
desirable properties, financing, raw materials and skilled
labor. D.R.&nbsp;Horton competes with other local, regional and
national homebuilders, including those with a sales presence on
the Internet, often within larger subdivisions designed, planned
and developed by such homebuilders. The competitive conditions
in the homebuilding industry could result in:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulty in acquiring suitable land at
	acceptable prices;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">increased selling incentives;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">lower sales or profit margins;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">delays in construction of homes.
	</FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Future growth requires additional capital,
	which may not be available.</FONT></I></B></TD>
</TR>

</TABLE>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The operations of D.R.&nbsp;Horton require
significant amounts of cash. D.R.&nbsp;Horton will be required
to seek additional capital, whether from sales of equity or debt
or additional bank borrowings, for the future growth and
development of its business. D.R.&nbsp;Horton can give no
assurance as to the terms or availability of such additional
capital. Moreover, the current D.R. Horton credit facility and
the indentures for the outstanding debt of D.R.&nbsp;Horton and
Schuler contain, and the new D.R.&nbsp;Horton credit facility
will contain, provisions that may restrict the debt the combined
companies may incur in the future. If D.R.&nbsp;Horton is not
successful in obtaining sufficient capital, it could reduce
sales and may adversely affect D.R.&nbsp;Horton&#146;s future
growth and results of operations.
</FONT>


<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">D.R.&nbsp;Horton cannot assure you that its
	growth strategies will be successful.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since 1993, D.R.&nbsp;Horton has acquired many
homebuilding companies. In addition to its internal growth,
D.R.&nbsp;Horton is currently focusing on strategic acquisitions
of homebuilding companies. Successful strategic acquisitions
require the integration of operations and management and other
efforts to realize the benefits that may be available. Although
D.R.&nbsp;Horton believes that it has been successful in doing
so in the past, it can give no assurance that it will continue
to be able to identify and integrate future successful strategic
acquisitions in the future. Moreover, D.R.&nbsp;Horton may not
be able to implement successfully its operating and growth
strategies within its existing markets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Anti-takeover defenses in
	D.R.&nbsp;Horton&#146;s charter or bylaws could prevent an
	acquisition of D.R.&nbsp;Horton or limit the price that
	investors might be willing to pay for shares of D.R.&nbsp;Horton
	common stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton currently has the following
provisions in its charter or bylaws which could be considered to
be &#147;anti-takeover&#148; provisions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an article in its charter prohibiting stockholder
	action by written consent;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an article in its charter requiring the
	affirmative vote of the holders of two-thirds of the outstanding
	shares of D.R.&nbsp;Horton common stock to remove a director;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">30
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a bylaw limiting the persons who may call special
	meetings of stockholders to the board of directors or a
	committee thereof so empowered by the D.R.&nbsp;Horton board,
	the D.R.&nbsp;Horton bylaws or by law; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a bylaw providing time limitations for
	nominations for election to the board of directors or for
	proposing matters which can be acted upon at stockholders&#146;
	meetings.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions may have the effect of delaying
stockholder actions with respect to certain business
combinations and the election of new members to the board of
directors. As such, the provisions could have the effect of
discouraging open market purchases of D.R.&nbsp;Horton common
stock because they may be considered disadvantageous by a
stockholder who desires to participate in a business combination
or elect a new director. Additionally, the issuance of
D.R.&nbsp;Horton preferred stock under certain circumstances
could have the effect of delaying or preventing a change of
control or other corporate action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton is a Delaware corporation and is
subject to Section&nbsp;203 of the Delaware General Corporation
Law. In general, Section&nbsp;203 prevents an &#147;interested
stockholder&#148; (defined generally as a person owning 15% or
more of D.R.&nbsp;Horton&#146;s outstanding voting stock) from
engaging in a &#147;business combination&#148; with
D.R.&nbsp;Horton for three years following the date that person
became an interested stockholder unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">before that person became an interested
	stockholder, D.R.&nbsp;Horton&#146;s board approved the
	transaction in which the interested stockholder became an
	interested stockholder or approved the business combination;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">upon completion of the transaction that resulted
	in the interested stockholder becoming an interested
	stockholder, the interested stockholder owned at least 85% of
	the voting stock of D.R.&nbsp;Horton outstanding at the time the
	transaction commenced, excluding stock held by persons who are
	both directors and officers of D.R.&nbsp;Horton or by certain
	employee stock plans;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">on or following the date on which that person
	became an interested stockholder, the business combination is
	approved by D.R.&nbsp;Horton&#146;s board and authorized at a
	meeting of stockholders by the affirmative vote of the holders
	of at least 66&nbsp;2/3% of the outstanding voting stock of
	D.R.&nbsp;Horton, excluding shares held by the interested
	stockholder.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;business combination&#148; includes
mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder.
</FONT>

<!-- link1 "THE STOCKHOLDER MEETINGS" -->
<DIV align="left"><A NAME="029"></A></DIV>

<P align="center">
<B><FONT size="2">THE STOCKHOLDER MEETINGS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are sending you this Joint Proxy Statement/
Prospectus in order to provide you with important information
regarding the merger of Schuler into D.R.&nbsp;Horton, and in
connection with the solicitation of proxies by the respective
boards of directors of Schuler and D.R.&nbsp;Horton for use at
the meetings of stockholders described below. This Joint Proxy
Statement/ Prospectus also constitutes the prospectus of
D.R.&nbsp;Horton with respect to the shares of D.R.&nbsp;Horton
common stock to be issued to the stockholders of Schuler in
connection with the merger. It also constitutes the proxy
statement for D.R.&nbsp;Horton&#146;s 2002 annual meeting.
</FONT>

<!-- link2 "The Schuler Special Meeting" -->
<DIV align="left"><A NAME="030"></A></DIV>

<P align="left">
<B><FONT size="2">The Schuler Special Meeting</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Time, Place and Purpose of the Meeting.
</FONT></I><FONT size="2">The Schuler special meeting of
stockholders is scheduled to be held on Thursday,
February&nbsp;21, 2002, at 9&nbsp;a.m. local time, at
400&nbsp;Continental Boulevard, Suite&nbsp;100, El&nbsp;Segundo,
California 90245. The only matter scheduled to come before the
meeting is the proposal to approve and adopt the merger
agreement and the transactions contemplated by the merger
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler knows of no other matter to be brought
before the Schuler special meeting. If any other business should
properly come before the Schuler special meeting, the persons
named in the proxy card will vote in their discretion on such
matter.
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Board of Directors Recommendation.
</FONT></I><FONT size="2">The board of directors of Schuler has
unanimously determined that the merger is advisable, fair to and
in the best interests of Schuler and its stockholders and
recommends that Schuler stockholders vote<B> FOR</B> approval
and adoption of the merger agreement and the transactions
contemplated by the merger agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Record Date. </FONT></I><FONT size="2">The
Schuler board of directors has fixed the close of business on
January&nbsp;14, 2002, as the record date for determining the
stockholders entitled to vote at the Schuler special meeting.
Only holders of record of shares of Schuler Class&nbsp;A common
stock and Class&nbsp;B common stock on the record date are
entitled to notice of and to vote at the special meeting. On the
record date, 22,352,514&nbsp;shares of Schuler Class&nbsp;A
common stock and 18,754,727&nbsp;shares of Schuler Class&nbsp;B
common stock were outstanding and entitled to vote at the
Schuler special meeting.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Quorum. </FONT></I><FONT size="2">The
presence, in person or by proxy, of the holders of a majority of
the outstanding shares of Schuler common stock entitled to vote
is required to constitute a quorum at the Schuler special
meeting. Shares represented by proxies which indicate the
stockholders want to abstain will be treated as being present
for the purpose of determining the presence of a quorum, but
will not be voted at the stockholder meeting. If a broker
indicates on a proxy that it does not have authority to vote
certain shares, those shares will not be considered as present.
To the extent a proxy does not indicate that a broker does not
have authority to vote the shares to which the proxy relates,
those shares will be considered present even if the broker
states they are not to be voted with regard to the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a quorum is not present, the stockholders of
record, present in person or by proxy, may adjourn the meeting
without notice other than announcement made at the meeting. Any
business may be transacted at an adjourned meeting which might
have been transacted at the Schuler special meeting as
originally called. Proxies to be voted against a specific
proposal may not be used to vote for an adjournment of the
special meeting for the purpose of soliciting additional votes
in favor of that proposal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Vote Required at the Schuler Special Meeting.
</FONT></I><FONT size="2">The affirmative vote, in person or by
proxy, of the holders as of the record date of a majority of the
voting power of the outstanding shares of Schuler common stock,
and the affirmative votes, in person or by proxy, of the holders
as of the record date of a majority of the outstanding shares of
Schuler Class&nbsp;A common stock and Class&nbsp;B common stock,
each voting as a separate class, is required for the approval
and adoption of the merger agreement and the transactions
contemplated by the merger agreement. Abstentions and broker
non-votes will have the same effect as votes against the
proposal to approve and adopt the merger agreement and the
transactions contemplated by the merger agreement. For the vote
of the holders of the Class&nbsp;A common stock and Class&nbsp;B
common stock as a class, the holders of Schuler Class&nbsp;A
common stock will be entitled to one vote for each share they
hold, and the holders of Schuler Class&nbsp;B common stock will
be entitled to one-half vote for each share they hold. For the
separate class votes of Class&nbsp;A common stock and the
Class&nbsp;B common stock, stockholders will be entitled to one
vote for each share they hold.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The James and Patricia Schuler Foundation, James
K. Schuler as trustee for two family trusts, and WPH-Schuler LLC
have entered into a voting agreement with D.R.&nbsp;Horton,
pursuant to which they have agreed to vote approximately 46.0%
of the voting power of the outstanding shares of Schuler common
stock, representing 23.4% of the Class&nbsp;A common stock and
100% of the Class&nbsp;B common stock, in favor of the approval
and adoption of the merger agreement. The James and Patricia
Schuler Foundation and the two family trusts also own
approximately 5,216,914&nbsp;shares of Schuler Class&nbsp;A
common stock that are not subject to the voting agreement. These
shares represent approximately 16.4% of the voting power of the
outstanding shares of Schuler common stock representing 23.3% of
the Class&nbsp;A common stock. Mr.&nbsp;Schuler has orally
informed Schuler and D.R.&nbsp;Horton that the foundation and
the two family trusts currently intend to vote the shares not
subject to the voting agreement in favor of the approval and
adoption of the merger agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stockholdings. </FONT></I><FONT size="2">On
the record date, Schuler&#146;s directors, executive officers
and their affiliates beneficially owned approximately
10.6&nbsp;million&nbsp;shares of Schuler Class&nbsp;A common
stock. Of those shares, Schuler&#146;s directors, executive
officers and their affiliates were entitled to vote
approximately 10.5&nbsp;million shares of Schuler Class&nbsp;A
common stock, representing approximately 33.1% of the voting
power of Schuler
</FONT>

<P align="center"><FONT size="2">32
</FONT>
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<DIV align="left">
<FONT size="2">common stock and 47.0% of the Class&nbsp;A common
stock, outstanding and entitled to vote on that date. There is
no agreement or arrangement regarding voting by Schuler&#146;s
directors or executive officers other than as described with
respect to the voting agreement. Schuler&#146;s directors,
executive officers and their affiliates have orally informed
Schuler and D.R.&nbsp;Horton that they intend to vote in favor
of the merger.
</FONT>
</DIV>

<!-- link2 "The D.R. Horton Annual Meeting" -->
<DIV align="left"><A NAME="031"></A></DIV>

<P align="left">
<B><FONT size="2">The D.R.&nbsp;Horton Annual Meeting</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Time, Place and Purpose of the Meeting.
</FONT></I><FONT size="2">The D.R.&nbsp;Horton 2002 annual
meeting is scheduled to be held on Thursday, February&nbsp;21,
2002, at 11:00&nbsp;a.m. local time, at 1901 Ascension Blvd.,
Suite&nbsp;100, Arlington, Texas 76006. The only matters
scheduled to come before the meeting are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the proposal to approve and adopt the merger
	agreement and the transactions contemplated by the merger
	agreement including the issuance of D.R.&nbsp;Horton common
	stock in connection with the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the proposal to elect ten directors;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the proposal to amend the D.R.&nbsp;Horton 1991
	Stock Incentive Plan to increase the total number of shares
	authorized by 1,600,000&nbsp;shares, with such amendment to
	become effective upon effectiveness of the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton knows of no other matter to be
brought before the D.R.&nbsp;Horton 2002 annual meeting. If any
other business should properly come before the annual meeting,
the persons named in the proxy card will vote in their
discretion on such matter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Board of Directors Recommendations.
</FONT></I><FONT size="2">The D.R.&nbsp;Horton board of
directors has approved the merger and the issuance of
D.R.&nbsp;Horton common stock in connection with the merger, has
determined that the merger is advisable and is in the best
interests of D.R.&nbsp;Horton and its stockholders, and
recommends that the holders of D.R.&nbsp;Horton common stock
vote <B>FOR</B> the approval and adoption of the merger
agreement and the transactions contemplated by the merger
agreement and the share issuance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board of directors
recommends that the holders of the D.R.&nbsp;Horton common stock
vote <B>FOR</B> the election of the ten directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board of directors
recommends that the holders of the D.R.&nbsp;Horton common stock
vote <B>FOR</B> the amendment to the D.R.&nbsp;Horton 1991 Stock
Incentive Plan to increase the number of shares authorized by
1,600,000&nbsp;shares.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Record Date. </FONT></I><FONT size="2">The
board of directors of D.R.&nbsp;Horton has fixed the close of
business on January&nbsp;14, 2002, as the record date for the
determination of stockholders entitled to vote at the annual
meeting or any adjournments or postponements of the annual
meeting. Only holders of record of D.R.&nbsp;Horton common stock
on the record date are entitled to notice of and to vote at the
annual meeting. On the record date, 77,103,841&nbsp;shares of
D.R.&nbsp;Horton common stock were outstanding and entitled to
vote at the annual meeting.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Quorum. </FONT></I><FONT size="2">The
presence, in person or by proxy, of the holders of a majority of
the outstanding shares of D.R.&nbsp;Horton common stock is
required to constitute a quorum at the meeting. Shares
represented by proxies which indicate the stockholders want to
abstain on particular proposals will be treated as being present
for the purpose of determining the presence of a quorum, but
will not be voted with regard to those proposals at the annual
meeting. If a broker indicates on a proxy that it does not have
authority to vote certain shares, those shares will not be
considered as present. To the extent a proxy does not indicate
that a broker does not have authority to vote the shares to
which the proxy relates, those shares will be considered present
even if the broker states they are not to be voted with respect
to a specific proposal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a quorum is not present, the stockholders
present, by vote of a majority of the votes cast by stockholders
who are present, in person or by proxy, may adjourn the meeting,
and any business which might have been transacted at the annual
meeting as originally called may be transacted at the adjourned
meeting. Proxies to be voted against a specific proposal may not
be used to vote for an adjournment of the annual meeting for the
purpose of soliciting additional votes in favor of that proposal.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Vote Required at the D.R.&nbsp;Horton 2002
Annual Meeting.</FONT></I><FONT size="2"> The affirmative vote,
in person or by proxy, of holders of a majority of the
outstanding shares of D.R.&nbsp;Horton common stock is required
for approval and adoption of the merger agreement and the
transactions contemplated by the merger agreement and the
issuance of D.R.&nbsp;Horton common stock in connection with the
merger. The affirmative vote, in person or by proxy, of holders
of a majority of the outstanding shares of D.R.&nbsp;Horton
common stock present at the meeting is required for approval of
the amendment of the D.R.&nbsp;Horton 1991 Stock Incentive Plan.
The nominees for directors receiving a plurality of the votes
cast will be elected to serve until the next annual meeting of
stockholders and their successors have been elected and
qualified. If any nominee is unable to serve, the proxies will
be voted by the proxy holders in their discretion for another
person. The board of directors has no reason to believe that any
nominee named will not be able to serve as a director for his or
her prescribed term.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of D.R.&nbsp;Horton common stock will
be entitled to one vote for each share they hold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Donald R. Horton and Terrill J. Horton, as
trustee for four trusts for the benefit of family members of
Donald R. Horton, who are collectively the beneficial owners as
of the record date of approximately 17% of the outstanding
shares of D.R.&nbsp;Horton common stock, have entered into a
voting agreement with Schuler, agreeing, among other things, to
vote their shares in favor of the approval and adoption of the
merger agreement and the issuance of D.R.&nbsp;Horton common
stock in connection with the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stockholdings. </FONT></I><FONT size="2">On
the record date, D.R.&nbsp;Horton&#146;s directors, executive
officers and their affiliates beneficially owned approximately
14.0&nbsp;million shares of D.R.&nbsp;Horton common stock. Of
those shares, D.R.&nbsp;Horton&#146;s directors, executive
officers and their affiliates were entitled to vote
approximately 13.6&nbsp;million shares of D.R.&nbsp;Horton
common stock, which represented approximately 17.6% of the total
amount of D.R.&nbsp;Horton common stock outstanding and entitled
to vote on that date. There is no agreement or arrangement
regarding voting by D.R.&nbsp;Horton&#146;s directors or
executive officers other than as described in this paragraph.
D.R.&nbsp;Horton&#146;s directors, executive officers and their
affiliates have informed orally D.R.&nbsp;Horton and Schuler
that they intend to vote their shares of D.R.&nbsp;Horton common
stock in favor of the merger and the issuance of
D.R.&nbsp;Horton common stock in connection with the merger.
</FONT>

<!-- link1 "PROXIES" -->
<DIV align="left"><A NAME="032"></A></DIV>

<P align="center">
<B><FONT size="2">PROXIES</FONT></B>

<!-- link2 "Proxy Cards" -->
<DIV align="left"><A NAME="033"></A></DIV>

<P align="left">
<B><FONT size="2">Proxy Cards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Schuler and D.R.&nbsp;Horton boards of
directors are soliciting proxies by which holders of Schuler
common stock and D.R.&nbsp;Horton common stock can vote on the
proposals regarding the merger and the merger agreement and, in
the case of D.R.&nbsp;Horton, its annual meeting proposals. The
shares that a properly completed proxy card represents will be
voted in accordance with the instructions on the proxy card. If
a Schuler or D.R.&nbsp;Horton stockholder does not return a
signed proxy card, that stockholder&#146;s shares will not be
voted, and that will have the same effect as a vote against
approval and adoption of the merger agreement and the
transactions contemplated by the merger agreement. <B>Schuler
stockholders do not have to make an election with respect to the
merger consideration before they return their proxy card.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You are urged to mark the box on the proxy card
to indicate how your shares are to be voted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Schuler stockholder returns a signed proxy
card, but does not indicate how the shares are to be voted, the
shares represented by the proxy card will be voted for approval
and adoption of the merger agreement and the transactions
contemplated by the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a D.R.&nbsp;Horton stockholder returns a
signed proxy card, but does not indicate how the shares are to
be voted, the shares represented by the proxy card will be voted
for:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">approval and adoption of the merger agreement and
	the transactions contemplated by the merger agreement and the
	approval of the issuance of D.R.&nbsp;Horton common stock in
	connection with the merger;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">34
</FONT>
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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">election of ten directors;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">amendment of the 1991 D.R.&nbsp;Horton Stock
	Incentive Plan.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The proxy card also authorizes the persons named
on the proxy card to vote in their discretion with regard to any
other matter that is properly presented for action at the
applicable stockholder meeting. Either company may seek to
adjourn its meeting should it determine that it should do so to
solicit additional votes in favor of the merger. However,
neither company will use any proxies that vote against the
merger to vote for such an adjournment.
</FONT>

<!-- link2 "Solicitation of Proxies" -->
<DIV align="left"><A NAME="034"></A></DIV>

<P align="left">
<B><FONT size="2">Solicitation of Proxies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Directors, officers and employees of Schuler and
D.R.&nbsp;Horton may solicit proxies from their respective
stockholders personally or by letter, telephone or facsimile
transmission. Each company will bear the expenses of any
solicitation on its behalf. Directors, officers and other
employees of Schuler and D.R.&nbsp;Horton will not be
specifically compensated for soliciting proxies. Brokerage
houses and other custodians, nominees and fiduciaries will be
requested to forward soliciting materials to the beneficial
owners of Schuler common stock and D.R.&nbsp;Horton common stock
owned of record by those organizations. Schuler and
D.R.&nbsp;Horton will pay the reasonable expenses of forwarding
such materials.
</FONT>

<!-- link2 "How to Revoke Your Proxy" -->
<DIV align="left"><A NAME="035"></A></DIV>

<P align="left">
<B><FONT size="2">How to Revoke Your Proxy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You can revoke your proxy at any time before your
proxy is voted at the applicable stockholder meeting. You can do
that by:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">attending the applicable stockholder meeting and
	voting in person;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">completing, signing and mailing in or
	transmitting by facsimile a new proxy card (in time so that the
	new proxy card is received before the applicable stockholder
	meeting);
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">revoking your proxy by facsimile at
	(201)&nbsp;296-4142 for Schuler stockholders and
	(718)&nbsp;259-1144 for D.R.&nbsp;Horton stockholders; or
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sending a written notice to the Corporate
	Secretary of Schuler or the Corporate Counsel of
	D.R.&nbsp;Horton, as appropriate, stating that you are revoking
	your proxy (in time so that the notice is received prior to the
	applicable stockholder meeting).
	</FONT></TD>
</TR>

</TABLE>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">To facilitate the voting process for the
stockholder meetings, stockholders of Schuler and
D.R.&nbsp;Horton will be able to submit their proxies and revoke
their proxies by facsimile by the stated time of the respective
stockholders meetings. Schuler stockholders will be able to
submit their proxies and revoke their proxies by facsimile at
the following telephone number: (201)&nbsp;296-4142. D.R. Horton
stockholders will be able to submit and revoke their proxies by
facsimile at the following telephone number:
(718)&nbsp;259-1144.</FONT></B>


<DIV>&nbsp;</DIV>

<!-- link1 "THE MERGER" -->
<DIV align="left"><A NAME="036"></A></DIV>

<DIV align="center">
<B><FONT size="2">THE MERGER</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link2 "Background to the Merger" -->
<DIV align="left"><A NAME="037"></A></DIV>

<DIV align="left">
<B><FONT size="2">Background to the Merger</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March, April and May 1999, Donald R. Horton,
Chairman of the Board of D.R.&nbsp;Horton, and Richard Beckwitt,
a director and then President of D.R.&nbsp;Horton, discussed
with James K. Schuler, Chairman of the Board, President and
Chief Executive Officer of Schuler Homes, the feasibility and
possible terms of a business combination between
D.R.&nbsp;Horton and Schuler Homes. At the time Schuler Homes
had not combined with Western Pacific Housing. In such
connection, Schuler Homes and D.R.&nbsp;Horton executed a
confidentiality and standstill agreement, and D.R.&nbsp;Horton
conducted preliminary diligence. The parties terminated
discussions in May 1999 due to several factors, including then
current effects of the restrictive covenants in the Schuler
senior notes, Hawaiian real estate market conditions, and
changes in the capital markets for homebuilding stocks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 1999, Mr.&nbsp;Beckwitt met with Eugene
S. Rosenfeld, Chief Executive Officer of Western Pacific
Housing, and Craig Manchester, President of Western Pacific
Housing, in California to explore the
</FONT>

<P align="center"><FONT size="2">35
</FONT>
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<DIV align="left">
<FONT size="2">potential acquisition by D.R.&nbsp;Horton of
Western Pacific Housing. The parties discussed the potential
benefits of combining the two companies. After several
conversations, D.R.&nbsp;Horton and Western Pacific Housing
decided not to pursue a combination at that time.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2001, the operations of Schuler Homes
and Western Pacific Housing were combined. At such time
Mr.&nbsp;Schuler became Co-Chairman, President and Chief
Executive Officer of Schuler, Mr.&nbsp;Rosenfeld became
Co-Chairman and Mr.&nbsp;Manchester became Executive Vice
President and Chief Operating Officer. During the months
immediately following, the boards of directors and managements
of Schuler Homes and Western Pacific Housing focused primarily
on integrating the two companies, and there were no discussions
of further business combinations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During a May 2001 homebuilding industry
conference in California, representatives of several companies,
including Mr.&nbsp;Beckwitt, approached Mr.&nbsp;Schuler
inquiring about whether the newly-combined company would be
interested in initiating discussions about further merger
arrangements. Mr.&nbsp;Schuler responded to all such inquiries
that his efforts would be focused on integration of the
operations of Western Pacific Housing, rather than on further
combinations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, representatives of Banc of
America Securities met with Messrs.&nbsp;Horton and Beckwitt in
Arlington, Texas to discuss various strategic acquisition
opportunities. Messrs.&nbsp;Horton and Beckwitt reviewed their
previous discussions with Schuler Homes and determined that
Schuler continued to be a leading candidate for a strategic
business combination. They discussed the feasibility of such a
transaction with Banc of America Securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;15, 2001, Mr.&nbsp;Beckwitt
telephoned Mr.&nbsp;Schuler to reaffirm D.R.&nbsp;Horton&#146;s
interest in pursuing a business combination with Schuler, and
Mr.&nbsp;Schuler agreed to a meeting on August&nbsp;20, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the regularly scheduled annual organizational
board of directors meeting following the Schuler annual meeting
of stockholders on August&nbsp;16, 2001, Messrs.&nbsp;Schuler
and Rosenfeld informed the Schuler board that three large
publicly-held homebuilders, including D.R.&nbsp;Horton, had
expressed an interest in a business combination with Schuler
through direct conversation with Messrs.&nbsp;Schuler and
Rosenfeld and/or through conversations with representatives of
UBS Warburg. The Schuler board authorized Messrs.&nbsp;Schuler
and Rosenfeld to further explore these expressions of interest
so long as the price being offered provided a substantial
premium to Schuler&#146;s then-current stock price. Schuler
engaged UBS Warburg to act as financial advisor to Schuler to
analyze its business and strategic alternatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Beginning on August&nbsp;17, 2001, UBS Warburg,
in consultation with Messrs.&nbsp;Schuler and Rosenfeld, held a
series of preliminary discussions with each of these potential
strategic partners. Craig A. Manchester, Executive Vice
President of Schuler Homes, participated in meetings with one of
the potential strategic partners. Each of these companies was
advised that the Schuler board was seeking non-binding
indications of interest by a deadline of August&nbsp;24, 2001.
This deadline was later extended to August&nbsp;28, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;20, 2001, Messrs.&nbsp;Horton,
Beckwitt, Schuler and Rosenfeld met in Seattle. They discussed
the operating results of D.R.&nbsp;Horton and Schuler and the
potential benefits that could be realized by combining the two
companies. Messrs.&nbsp;Schuler and Rosenfeld stated that the
Schuler board would not consider any transaction that did not
provide stockholders with a significant premium to
Schuler&#146;s market price. Messrs.&nbsp;Horton and Beckwitt
stated that D.R.&nbsp;Horton was interested in a transaction
with a significant stock component. Messrs.&nbsp;Schuler and
Rosenfeld suggested that any proposal should include a mechanism
to protect the Schuler stockholders for movements in
D.R.&nbsp;Horton&#146;s stock price. During the meeting, the
participants also discussed possible board representation and
employment and management issues. Mr.&nbsp;Schuler advised that
Schuler was speaking with other potentially interested parties
and that the Schuler board would like to receive a written
non-binding indication of interest from D.R.&nbsp;Horton by
August&nbsp;24, 2001. D.R.&nbsp;Horton did not make a proposal
for a combination at the meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;21, 2001, D.R.&nbsp;Horton entered
into a confidentiality and standstill agreement with Schuler, in
which the parties agreed to keep confidential any information
exchanged by them. The companies began exchanging financial and
operational information. Between August&nbsp;22 and
August&nbsp;24,
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<DIV align="left">
<FONT size="2">2001, Messrs.&nbsp;Horton, Beckwitt, Donald J.
Tomnitz, Vice Chairman, President and Chief Executive Officer of
D.R.&nbsp;Horton, and others at D.R.&nbsp;Horton worked to
review potential deal structures, valuations, and the strategic
benefits of the combination. They were assisted by
representatives of Banc of America Securities. During this
period, Messrs.&nbsp;Schuler and Rosenfeld, representatives of
UBS Warburg and Mr.&nbsp;Beckwitt discussed various matters,
including structure and diligence matters, that could affect the
indication of interest being prepared by D.R.&nbsp;Horton.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;24, 2001, D.R.&nbsp;Horton
submitted to UBS Warburg a non-binding indication of interest to
acquire Schuler in a merger transaction in which Schuler
stockholders would receive a combination of cash and Horton
common stock valued at between $18.04 and $19.95&nbsp;per share
through a collar mechanism based on the average sales price of
D.R.&nbsp;Horton common stock. The proposal included a cash
component of $7.50&nbsp;per share and an exchange ratio that, at
its midpoint, was .479&nbsp;shares of D.R.&nbsp;Horton common
stock for each outstanding Schuler share. As of August&nbsp;24,
2001, the proposal reflected a valuation of $19.19&nbsp;per
share, representing a 36% premium over the then last sales price
of the Schuler Class&nbsp;A common stock. The indication of
interest provided for a seat on the D.R.&nbsp;Horton board for
Mr.&nbsp;Schuler. It also provided for a break-up fee and
agreements from Schuler&#146;s principal stockholders to vote in
favor of the merger. On that day, Mr.&nbsp;Beckwitt also
reviewed the proposal with Mr.&nbsp;Schuler and representatives
of UBS Warburg in separate conversations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;25, 2001, Mr.&nbsp;Schuler and
Mr.&nbsp;Beckwitt spoke by telephone concerning
D.R.&nbsp;Horton&#146;s indication of interest. Mr.&nbsp;Schuler
advised that Schuler and its financial advisors would have
comments on it. Mr.&nbsp;Schuler informed Mr.&nbsp;Beckwitt that
Schuler intended to hold a board meeting by August&nbsp;28, 2001
to review the expected indications of interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;27, 2001, Mr.&nbsp;Beckwitt spoke
by telephone with representatives of UBS Warburg to clarify the
terms of the D.R.&nbsp;Horton indication of interest. The
participants discussed the pricing collar for the stock portion
of the proposed merger consideration, the treatment of
outstanding options, the proposed break-up fee and the proposed
voting agreements. The UBS Warburg representatives sought
assurances of D.R.&nbsp;Horton&#146;s ability to finance the
transaction, a break-up fee from D.R.&nbsp;Horton and increased
board representation. The UBS Warburg representatives advised
that Schuler was waiting for additional proposals and requested
more time to receive and consider them. Later that day
Messrs.&nbsp;Horton and Beckwitt discussed the UBS Warburg
conversation with representatives of Banc of America Securities.
Mr.&nbsp;Beckwitt then had separate telephone conversations with
Mr.&nbsp;Schuler and representatives of UBS Warburg to inform
them that D.R.&nbsp;Horton was prepared to pursue other
opportunities and would withdraw its proposal if
D.R.&nbsp;Horton did not have a response to its indication of
interest by the extended deadline of August&nbsp;28, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;27, 2001, the board of directors
of Schuler met to review the status of discussions about a
potential business combination with Schuler legal and financial
advisors and to address other unrelated business. Prior to the
meeting, UBS Warburg distributed materials to the board of
directors regarding current valuations of homebuilding companies
and premium values paid in acquisition situations.
Representatives of UBS Warburg informed the board of directors
that one potential suitor had withdrawn from further
discussions, that D.R.&nbsp;Horton had submitted a written
indication of interest and that discussions were still
proceeding with another potentially interested party. The UBS
Warburg representatives then reviewed for the board the basic
terms of the D.R.&nbsp;Horton proposal, and the Schuler board
authorized UBS Warburg to proceed with negotiating several
aspects of the D.R.&nbsp;Horton proposal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;28, 2001, representatives of UBS
Warburg had a telephone conversation with Mr.&nbsp;Beckwitt.
During the conversation, the UBS Warburg representatives advised
that Schuler would be interested in moving forward with a
combination if the price were increased and other adjustments
made to the D.R.&nbsp;Horton proposal. They asked that the stock
component of the merger consideration be increased. They
requested an increase to .485&nbsp;shares from .479&nbsp;shares
at the midpoint of the exchange ratio collar, for
D.R.&nbsp;Horton stock prices of between $22 and $26&nbsp;per
share. They also requested a reduced break-up fee, voting
agreements from the D.R.&nbsp;Horton insiders and a break-up fee
from D.R.&nbsp;Horton.
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Also on August&nbsp;28, 2001, after reviewing the
UBS Warburg requests with Mr.&nbsp;Horton, Mr.&nbsp;Beckwitt
telephoned the UBS Warburg representatives. In response to the
Schuler proposal, Mr.&nbsp;Beckwitt proposed an increase in the
midpoint for the exchange ratio to .481&nbsp;shares of
D.R.&nbsp;Horton common stock. He requested, however, a 30-day
exclusivity period and related break-up fee to allow
D.R.&nbsp;Horton to complete its diligence of Schuler, to permit
the negotiation of a definitive merger agreement and to obtain
the required board approvals. D.R.&nbsp;Horton&#146;s revised
proposal provided for merger consideration in the range of
$18.08 and $20.01&nbsp;per share, payable in cash and shares of
D.R.&nbsp;Horton common stock depending upon the average closing
price of D.R.&nbsp;Horton&#146;s common stock. The proposed
merger consideration consisted of approximately 60% stock and
40% cash. If the requisite average stock price had been the
closing price of D.R.&nbsp;Horton&#146;s common stock on
August&nbsp;28, 2001, the merger consideration would have
reflected a valuation of $19.01 for each share, representing a
38% premium over the last sales price of Schuler Class&nbsp;A
common stock. Inasmuch as the final potential bidder had not
submitted a written proposal by the extended August&nbsp;28,
2001 deadline, the UBS Warburg representatives were authorized
to advise D.R.&nbsp;Horton that the proposed increase and an
exclusivity period were acceptable. On August&nbsp;29, 2001,
with many of the key terms of the D.R.&nbsp;Horton proposal
having been negotiated to the satisfaction of
Messrs.&nbsp;Schuler and Rosenfeld, Schuler executed an
agreement to negotiate exclusively with D.R.&nbsp;Horton through
September&nbsp;24, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;31, 2001, a meeting of the board
of directors of D.R.&nbsp;Horton was held. At the meeting,
Messrs.&nbsp;Horton and Beckwitt reviewed the proposed Schuler
transaction with the board. Mr.&nbsp;Beckwitt also reviewed the
then current state of diligence regarding the Schuler operations
and financial condition. It was the consensus of the board that
diligence and discussion of the terms of the transaction should
continue. D.R.&nbsp;Horton counsel subsequently prepared and
sent to Schuler, its bankers and its counsel an initial draft of
the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;4, 2001, Messrs.&nbsp;Beckwitt,
Schuler and Rosenfeld, together with representatives of Banc of
America Securities and UBS Warburg and counsel for
D.R.&nbsp;Horton and Schuler, met in Los Angeles to discuss the
initial draft of the merger agreement and other terms of
D.R.&nbsp;Horton&#146;s proposal. The Schuler representatives
asked that D.R.&nbsp;Horton consider adding a cash election
feature as part of the merger consideration. The participants
discussed Schuler&#146;s right to terminate in the event of a
significant decline in D.R.&nbsp;Horton&#146;s stock price,
other Schuler termination rights, the treatment of outstanding
stock options, break-up fees, the proposed lock-up periods for
insiders, the proposed voting agreements and a request for the
termination of indemnification obligations under the Schuler/
Western Pacific Housing reorganization agreement. The
participants agreed that Schuler should have a termination right
if the D.R.&nbsp;Horton average stock price used to calculate
the stock portion of the merger consideration declined to
$17.25&nbsp;per share. The participants also discussed treatment
of Schuler employees in the transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the remainder of the week of
September&nbsp;3, 2001, the parties conducted financial,
operational and legal due diligence. On September 7 and&nbsp;8,
2001, Messrs.&nbsp;Horton, Tomnitz and Beckwitt met in
Arlington, Texas with Messrs.&nbsp;Schuler, Rosenfeld and
Manchester and representatives of Banc of America Securities and
UBS Warburg. The participants discussed operating results and
plans, including projected results, corporate structure,
employment arrangements and severance and other matters of
diligence.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;10, 2001, the Schuler board of
directors met to review the status of the ongoing merger
discussions with D.R.&nbsp;Horton. Representatives of UBS
Warburg and legal counsel to Schuler were present at the meeting
to provide an update and to answer questions. Prior to the
meeting, a descriptive analysis of the transaction and the draft
merger agreement had been distributed to the directors. The
board discussed with its advisors various elements of the
proposed transaction, including the consideration, the proposed
cash/ stock election mechanism, the size of the proposed
break-up fee and the cultural fit of the two companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the weeks of September&nbsp;10, 17
and&nbsp;24, 2001, the diligence of the parties continued. On
September&nbsp;12, 2001, legal counsel for Schuler submitted
requested changes to the draft merger agreement. However,
discussions ceased following the terrorist attacks in New York
and Washington,&nbsp;D.C. on September&nbsp;11, 2001 and the
resulting turmoil and market volatility. On September&nbsp;19,
2001, D.R.&nbsp;Horton
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<FONT size="2">and Schuler agreed to the extension of the
exclusivity period from September&nbsp;24 to October&nbsp;9,
2001, to allow each company to assess the effects of the
September&nbsp;11 events on their businesses and the proposed
merger.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;19, 2001, following the
telephonic conversation with Mr.&nbsp;Beckwitt, during which
they agreed to extend D.R.&nbsp;Horton&#146;s exclusivity
period, Messrs.&nbsp;Schuler and Rosenfeld convened a meeting
with Schuler&#146;s legal counsel and representatives of UBS
Warburg to discuss the impact of the terrorist attacks on the
merger proposal as a result of the decline in the stock prices
of homebuilders, including D.R.&nbsp;Horton and Schuler
following the September&nbsp;11 events.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the weeks of September&nbsp;24 and
October&nbsp;1, 2001, Messrs.&nbsp;Horton, Tomnitz and Beckwitt
reviewed the proposed transaction in the light of the events of
September&nbsp;11 and their aftermath. They consulted with
representatives of Banc of America Securities concerning a
revised proposal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;4, 2001, Mr.&nbsp;Beckwitt had
telephone conversations with Mr.&nbsp;Schuler and
representatives of UBS Warburg concerning restructuring the
proposed transaction. He advised them that D.R.&nbsp;Horton
would require the merger consideration to be adjusted in light
of the September&nbsp;11 events. During these conversations the
participants discussed changes in business and market conditions
after September&nbsp;11. Mr.&nbsp;Beckwitt proposed a reduction
in the aggregate merger consideration and an increase in the
stock component of the merger consideration. He proposed a
combination of 25% in cash and 75% in stock valued at between
$14.88 and $17.11&nbsp;per share through a collar mechanism
based on the average price of D.R.&nbsp;Horton common stock. The
cash component was $4.00&nbsp;per share, and the exchange ratio
was .558&nbsp;shares of D.R.&nbsp;Horton common stock at its
midpoint, for D.R.&nbsp;Horton average stock prices of from
$19.50 to $23.50. The proposal included a termination right for
Schuler at a D.R.&nbsp;Horton stock price below $15.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;5, 2001, representatives of UBS
Warburg telephoned Mr.&nbsp;Beckwitt and made a counterproposal.
They proposed an increase in the merger consideration from
D.R.&nbsp;Horton&#146;s revised proposal by increasing the cash
component to $4.70&nbsp;per share. They also proposed an
adjustment to the upper range of the collar to provide more
value to Schuler stockholders in the event of an increase in
D.R.&nbsp;Horton&#146;s average stock price and a termination
right if D.R.&nbsp;Horton&#146;s average stock price were below
$16.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;9, 2001, Messrs.&nbsp;Horton and
Beckwitt spoke by telephone first with a representative of UBS
Warburg, and then with Messrs.&nbsp;Schuler and Rosenfeld, about
the Schuler counterproposal. Messrs.&nbsp;Horton and Beckwitt
proposed a cash component of $4.09 and an exchange ratio, with a
midpoint at .570, and collar as described in &#147;THE MERGER
AGREEMENT&nbsp;&#151; Merger Consideration&#148;. They also
accepted the request for a Schuler termination right at a
D.R.&nbsp;Horton stock price below $16.00. As of that date, the
proposal reflected a valuation of $16.41&nbsp;per share,
representing a 33% premium over the then last sales price of the
Schuler Class&nbsp;A common stock. After discussion,
Messrs.&nbsp;Schuler and Rosenfeld advised that they would be
willing to recommend the revised proposal to the Schuler board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;9, 2001, the exclusivity
agreement between D.R.&nbsp;Horton and Schuler expired. On
October&nbsp;10, 2001, D.R.&nbsp;Horton counsel distributed a
revised draft of the merger agreement. The draft included a cash
election feature for the merger consideration in response to a
request from Schuler representatives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Beginning on October&nbsp;12 through
October&nbsp;22, 2001, representatives of D.R.&nbsp;Horton and
Schuler and their counsel and financial advisors negotiated
various provisions of the merger agreement and related
documentation, including the size of the break-up fee, the
circumstances under which Schuler would be permitted to discuss
superior proposals from third parties and the terms of the
proposed voting agreements. During this period the parties
continued their diligence. On October&nbsp;15, 2001,
Messrs.&nbsp;Tomnitz, Beckwitt, Schuler and Rosenfeld met in Los
Angeles to discuss management structure, Mr.&nbsp;Schuler&#146;s
employment contract, Mr.&nbsp;Rosenfeld&#146;s consulting
agreement, Mr.&nbsp;Manchester&#146;s employment contract, and
severance arrangements. On October&nbsp;16, 2001,
Mr.&nbsp;Beckwitt, representatives of Banc of America Securities
and UBS
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Warburg and others met in Los Angeles to update
diligence reviews. On October&nbsp;17, 2001, Mr.&nbsp;Beckwitt
spoke with Mr.&nbsp;Manchester to discuss his employment
arrangements.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;18, 2001, the board of directors
of D.R.&nbsp;Horton met. At the meeting, Messrs.&nbsp;Horton and
Beckwitt reviewed the state of the due diligence investigation,
the financing required for the transaction and the revised terms
of the transaction. At the meeting, Mr.&nbsp;Tomnitz also
reported on the recent operating results of D.R.&nbsp;Horton and
its financial position. Mr.&nbsp;Horton advised that diligence
was nearing completion and that final approval would require the
report of Banc of America Securities, its fairness opinion and
completion of a definitive merger agreement. The board decided
to meet again on October&nbsp;22, 2001 to consider the
transaction further.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;19, 2001, in a telephone
conversation, Mr.&nbsp;Beckwitt and representatives of UBS
Warburg agreed on a break-up fee and limited expense
reimbursements in connection with specified terminations of the
merger agreement. From October&nbsp;19 through&nbsp;22, 2001,
representatives of and counsel for D.R.&nbsp;Horton and Schuler
negotiated the outstanding issues concerning the merger
agreement and the related documents, including the terms of the
voting agreements, the employment agreements, the
non-competition covenants, and the termination of the Schuler/
Western Pacific Housing reorganization agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;22, 2001, the Schuler board of
directors held a special meeting at which management of Schuler,
together with Schuler&#146;s financial and legal advisors,
reviewed the terms and conditions of the proposed merger.
Representatives of UBS Warburg made a detailed financial
presentation and rendered its oral opinion, subsequently
confirmed in writing, to the effect that, based on and subject
to the matters described in its written opinion, as of the date
of the opinion the merger consideration to be received by the
stockholders of Schuler in the merger transaction with
D.R.&nbsp;Horton is fair from a financial point of view. Legal
counsel to Schuler reviewed with the board the terms and
conditions of the merger agreement and the legal duties and
responsibilities of the Schuler board of directors in connection
with the merger. The board was also advised of the interests of
certain directors and executive officers in the transaction that
were in addition to the interests of other stockholders. The
board of directors, after extended discussion, unanimously
determined that the merger agreement was fair to and in the best
interests of Schuler and its stockholders and recommended that
the stockholders of Schuler vote in favor of approval and
adoption of the merger agreement and the transactions
contemplated by the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;22, 2001, the D.R.&nbsp;Horton
board of directors met to consider the proposed merger.
Messrs.&nbsp;Horton and Beckwitt, together with other senior
management, D.R.&nbsp;Horton&#146;s legal advisors and its
financial advisors made presentations and reviewed the matters
set forth under &#147;Recommendations of the D.R.&nbsp;Horton
Board of Directors; D.R.&nbsp;Horton&#146;s Reasons for the
Merger.&#148; Counsel reviewed the terms of the merger agreement
with the directors. Representatives of Banc of America
Securities made an oral presentation to the D.R.&nbsp;Horton
board of its financial analyses described under &#147;Opinion of
D.R.&nbsp;Horton&#146;s Financial Advisor&#148; and rendered its
oral opinion, confirmed by subsequent written opinion dated
October&nbsp;22, 2001, that, as of such date, the consideration
to be paid by D.R.&nbsp;Horton in the merger was fair from a
financial point of view to D.R.&nbsp;Horton.
D.R.&nbsp;Horton&#146;s advisors and management answered
director questions with regard to the presentations and the
terms of the transaction. After discussion and consideration,
the D.R.&nbsp;Horton board voted unanimously to approve the
merger and the merger agreement and to recommend adoption of the
merger agreement to the D.R.&nbsp;Horton stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the morning of October&nbsp;23, 2001, prior to
the opening of the markets, D.R.&nbsp;Horton and Schuler
completed execution of the merger agreement, the voting
agreements and related documents and publicly announced that
they had entered into a definitive agreement to effect the
merger.
</FONT>

<!-- link2 "Recommendation of the Schuler Board of Directors; Schuler&#146;s Reasons for the Merger" -->
<DIV align="left"><A NAME="038"></A></DIV>

<P align="left">
<B><FONT size="2">Recommendation of the Schuler Board of
Directors; Schuler&#146;s Reasons for the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At its meeting on October&nbsp;22, 2001, the
Schuler board of directors unanimously determined that the terms
of the merger agreement are advisable, fair to and in the best
interests of Schuler and its stockholders and recommended that
the stockholders of Schuler vote for approval and adoption of
the merger agreement. During the course of its deliberations,
the Schuler board of directors considered, with
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<DIV align="left">
<FONT size="2">the assistance of management and its financial
and legal advisors, a number of factors. The following
discussion of the factors considered by the Schuler board of
directors in making its decision includes all material factors
considered by the Schuler board of directors.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Among the factors the Schuler board of directors
considered in deciding to approve the merger are the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">historical information regarding the respective
	businesses, prospects, financial performances and conditions,
	operations, management and competitive positions of
	D.R.&nbsp;Horton and Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">current information with respect to Schuler
	common stock and D.R.&nbsp;Horton common stock, including
	financial market conditions and historical market prices,
	volatility and trading;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s business, operations, financial
	condition and prospects if it were to remain independent, and
	the prospects of gaining additional flexibility to obtain
	capital to facilitate the growth of its business through a
	merger with D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the board&#146;s analysis of the current state of
	the homebuilding industry generally, which has experienced
	increased consolidation and competition;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the merger consideration to be received by
	Schuler stockholders in the merger represented a significant
	premium over the market price of Schuler stock before the merger
	announcement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the terms and conditions of the merger agreement,
	including the parties&#146; representations, warranties and
	covenants, termination provisions and the conditions to their
	respective obligations;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the terms of the merger agreement regarding the
	right of Schuler to consider and negotiate an alternative
	transaction, as well as the possible effects of the provisions
	regarding termination fees;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the structure of the merger, which would permit
	Schuler stockholders to exchange their shares of Schuler common
	stock for D.R.&nbsp;Horton common stock in a transaction that is
	intended to be tax-free for United States federal income tax
	purposes, except to the extent of any cash received;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that the market prices of some of
	Schuler&#146;s peer public homebuilders&#146; stock have greater
	earnings per share multiples, due in part to greater market
	capitalization and trading volume;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that Schuler stockholders will be able
	to participate in any future growth of Schuler through their
	ownership of D.R.&nbsp;Horton common stock, while those Schuler
	stockholders who do not wish to own D.R.&nbsp;Horton common
	stock will have the opportunity to elect to receive cash,
	subject to an aggregate limit on the amount of cash payable to
	Schuler stockholders, or to sell D.R.&nbsp;Horton common stock
	received in the merger in the ensuing months, subject to the
	volume and manner-of-sale restrictions applicable to some
	stockholders under the federal securities laws;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the presentation and oral opinion of UBS Warburg,
	which was later confirmed in writing;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that Schuler can terminate the merger
	agreement without penalty (but subject to
	D.R.&nbsp;Horton&#146;s right to increase the merger
	consideration to not less than $14.25&nbsp;per share of Schuler
	common stock) if the average closing price of D.R.&nbsp;Horton
	common stock for the 15 trading days ending on, and including,
	the third trading day prior to the Schuler stockholder meeting
	is less than $16.00;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that James K. Schuler will be appointed
	to the D.R.&nbsp;Horton board of directors;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the directors&#146; fiduciary duties under
	Delaware law to Schuler&#146;s stockholders;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the directors&#146; assessment of Schuler&#146;s
	other strategic alternatives to enhance stockholder value and
	whether the merger was more attractive than such alternatives;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the percentage of the total outstanding shares of
	D.R.&nbsp;Horton common stock that former Schuler stockholders
	will own following the merger based on the stock component of
	the base merger consideration;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">41
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the combination with D.R.&nbsp;Horton
	presents opportunities to create greater economies of scale, by
	combining management and human resources, market position and
	purchasing power;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the significant product and geographic
	diversification of the combined companies.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Schuler board of directors also considered a
number of potentially negative factors relating to the merger,
including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the risk that the potential benefits sought in
	the merger might not be fully realized;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that Schuler will no longer be an
	independent company;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the risks associated with the fluctuations in the
	price of Schuler common stock and D.R.&nbsp;Horton common stock
	prior to the closing of the merger and the effect that such
	fluctuations might have on the number of shares of
	D.R.&nbsp;Horton common stock that Schuler stockholders will
	receive in the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the challenges of integrating the management
	teams, strategies, cultures and organizations of the two
	companies;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the fact that Eugene S. Rosenfeld and possibly
	other members of senior management would not continue with
	Schuler after consummation of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the impact of the merger on Schuler&#146;s
	employees, customers, communities and suppliers and how such
	impact might affect stockholder value of the combined company;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the possible distraction of management from
	day-to-day operations;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">other applicable risks described in the section
	captioned &#147;Risk Factors.&#148;
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The members of the Schuler board of directors
believed that these risks were outweighed by the potential
benefits of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above discussion is not exhaustive of all
factors considered by the Schuler board of directors. Each
member of the Schuler board of directors may have considered
different factors and may have assigned different relative
weights to the factors considered. In addition, the Schuler
board of directors did not quantify or reach any specific
conclusion with respect to each of the factors considered, or
any aspect of any particular factor. Instead, the Schuler board
of directors conducted an overall analysis of the factors
described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Based on the considerations described above,
the Schuler board of directors has unanimously determined that
the merger agreement is advisable, fair to and in the best
interests of Schuler and its stockholders and recommends that
Schuler stockholders vote FOR approval and adoption of the
merger agreement and the transactions contemplated by the merger
agreement.</FONT></B>

<!-- link2 "Recommendations of the D.R. Horton Board of Directors; D.R. Horton&#146;s Reasons for the Merger" -->
<DIV align="left"><A NAME="039"></A></DIV>

<P align="left">
<B><FONT size="2">Recommendations of the D.R.&nbsp;Horton Board
of Directors; D.R. Horton&#146;s Reasons for the
Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board of directors believes
the merger of Schuler and D.R.&nbsp;Horton on the terms
contained in the merger agreement is advisable and is in the
best interests of D.R.&nbsp;Horton and its stockholders.
Accordingly, at its meeting on October&nbsp;22, 2001,
D.R.&nbsp;Horton&#146;s board of directors unanimously approved
the transaction and recommended that holders of D.R.&nbsp;Horton
common stock vote to approve and adopt the merger agreement and
the transactions contemplated by the merger agreement and the
issuance of D.R.&nbsp;Horton common stock in connection with the
merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton believes the merger will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">strengthen D.R.&nbsp;Horton&#146;s current market
	position while expanding its geographic presence and product
	offerings in key markets in the Western part of the United
	States;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce D.R.&nbsp;Horton&#146;s cost of goods sold
	as a result of increased volume and purchasing power;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">eliminate redundant costs associated with
	maintaining two public companies;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">expand mortgage and title services in new and
	existing markets due to increased home sales volumes;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">expand product offerings to maximize inventory
	turns in common markets;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce borrowing costs associated with
	Schuler&#146;s business, due to D.R.&nbsp;Horton&#146;s lower
	cost of capital.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on a review of public filings made with the
SEC, D.R.&nbsp;Horton believes a combined D.R.&nbsp;Horton and
Schuler would have been the nation&#146;s second largest
homebuilder for the latest 12&nbsp;months ended
September&nbsp;30, 2001 based on the number of homes closed. On
a combined pro forma basis, D.R.&nbsp;Horton and Schuler would
have reported revenues of $6.0&nbsp;billion and delivered 26,625
homes for the year ended September&nbsp;30, 2001, and would have
the largest backlog of homes under contract in the industry.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In deciding to approve the acquisition of
Schuler, the D.R.&nbsp;Horton directors considered the items
described above and a number of other factors, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the size and market position of the combined
	company;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the resulting expansion of
	D.R.&nbsp;Horton&#146;s homebuilding business in current markets
	and into new growth markets, including achieving the leading
	market positions in Southern California, Denver and Portland;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the addition of an experienced management team
	with local market expertise;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the addition of strong land positions in several
	markets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the conservative operating strategy of Schuler
	and its corporate culture that is similar to
	D.R.&nbsp;Horton&#146;s;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s proven record of profitability;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the structure of the transaction, including the
	balance of cash and equity consideration and the expected
	accretive effect on earnings;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the terms and conditions of the merger
	agreement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the presentations and advice of its senior
	management, advisors and legal counsel, as discussed below.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton board also considered
potentially negative factors relating to the merger, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the increased financial leverage of the combined
	company;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the challenges of integrating the management,
	operations and cultures of the companies;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the risk that operational savings from synergies
	may not be achieved;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the uncertainty of current general economic
	conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above discussion is not intended to be
exhaustive of the factors considered by the D.R.&nbsp;Horton
board but includes all material factors considered. Each member
of the D.R.&nbsp;Horton board of directors may have considered
different factors, and the D.R.&nbsp;Horton board of directors
evaluated these factors and did not quantify or otherwise assign
relative weights to factors considered. In addition, the
D.R.&nbsp;Horton board of directors did not reach any specific
conclusion with respect to each of the factors considered or any
aspect of any particular factor. Instead, the D.R.&nbsp;Horton
board of directors conducted an overall analysis of the factors
described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Based on the considerations described above,
the D.R.&nbsp;Horton board of directors has determined that the
merger is advisable and is in the best interests of D.R. Horton
and its stockholders, has unanimously approved the merger and
the issuance of D.R.&nbsp;Horton common stock in connection with
the</FONT></B>

<P align="center"><FONT size="2">43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<B><FONT size="2">merger and recommends that
D.R.&nbsp;Horton&#146;s stockholders vote FOR the approval and
adoption of the merger agreement and the transactions
contemplated by the merger agreement and the share
issuance.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Exchanged Information</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with their diligence of each other
D.R.&nbsp;Horton and Schuler exchanged internal financial
projections of future economic performance that were prepared by
their respective managements. The information was provided by
the companies to their respective financial advisors, and the
information was used by their financial advisors in the
financial analyses they presented to the D.R.&nbsp;Horton and
Schuler boards of directors. Following are summaries of the
D.R.&nbsp;Horton and Schuler internal financial projections that
were shared by D.R. Horton and Schuler and presented to the
D.R.&nbsp;Horton and Schuler boards of directors by their
financial advisors.
</FONT>



<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">D.R. Horton exchanged</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">D.R. Horton exchanged</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">internal projections for</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">internal projections for</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">the fiscal year ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">the year ended</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">September&nbsp;30,</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(In millions, except per</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(In millions)</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,099.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,767.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,549.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,367.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EBITDA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">682.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">769.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">596.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">709.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">311.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">362.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">274.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">328.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted earnings per share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.96</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.60</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton calculated &#147;EBITDA&#148; as the
sum of income before income taxes, interest amortized to cost of
sales, interest expense, depreciation and amortization.
</FONT>


<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Schuler exchanged</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Schuler exchanged</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">internal projections for</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">internal projections for</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">the fiscal year ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">the year ended</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">March&nbsp;31,</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(In millions)</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">(In millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,720.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,958.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,593.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,873.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EBITDA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">248.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">281.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">247.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">270.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">105.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">127.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">120.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted earnings per share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler calculated &#147;EBITDA&#148; as the sum
of income before income taxes, interest amortized to cost of
sales, interest expense, depreciation, amortization,
lenders&#146; profit participation, minority interest in income
of consolidated joint ventures and subsidiary, inventory
impairment losses, and other non-cash charges.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither D.R.&nbsp;Horton nor Schuler as a matter
of course make public any estimates as to their respective
future operating performance or earnings. These financial
projections were provided as a part of the companies&#146;
diligence and their respective ongoing dialogues with their
financial advisors for purposes of their analyses, and they were
not prepared with a view toward public disclosure. The
D.R.&nbsp;Horton and Schuler financial projections depend on
future performance and numerous other factors, including those
set forth under the heading &#147;Risk Factors&#148; and
elsewhere in the periodic reports D.R.&nbsp;Horton and Schuler
file with the SEC, and in this Joint Proxy Statement/Prospectus.
Achievement of these projections is dependent on, among other
things, the strength of new home markets, general economic
conditions, fluctuations in interest rates, changes in costs of
materials, supplies and labor and general competitive
conditions. D.R.&nbsp;Horton and Schuler disclaim any duty to
update these projections and make no representations as to
whether such projections will be achieved or otherwise. Neither
the D.R.&nbsp;Horton nor the Schuler projections addressed the
opportunities or costs of the merger.
</FONT>

<P align="center"><FONT size="2">44
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Opinion of Schuler&#146;s Financial Advisor" -->
<DIV align="left"><A NAME="040"></A></DIV>

<P align="left">
<B><FONT size="2">Opinion of Schuler&#146;s Financial
Advisor</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;22, 2001, at a meeting of
Schuler&#146;s board of directors held to evaluate the terms of
the proposed merger, UBS&nbsp;Warburg LLC delivered to the board
an oral opinion, which was confirmed by delivery of a written
opinion dated the same date, to the effect that, as of that date
and based upon and subject to various assumptions, matters
considered and limitations described in the opinion, the merger
consideration calculated pursuant to the merger agreement,
consisting as of that date of (x)&nbsp;$4.09 in cash and
(y)&nbsp;0.570&nbsp;shares of D.R.&nbsp;Horton common stock per
share of Schuler common stock, to be received by holders of
Schuler&#146;s common stock in the merger is fair, from a
financial point of view. The stock component of the merger
consideration is subject to adjustment pursuant to a formula in
the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The full text of UBS&nbsp;Warburg LLC&#146;s
opinion describes, among other things, the assumptions made,
procedures followed, matters considered and limitations on the
review undertaken by UBS Warburg LLC. This opinion is attached
as Annex II to this Joint Proxy Statement/ Prospectus and is
incorporated into this Joint Proxy Statement/ Prospectus by
reference. Holders of Schuler common stock are encouraged to
read this opinion carefully in its entirety. References to the
UBS Warburg LLC opinion in this Joint Proxy Statement/
Prospectus and the summary of UBS Warburg LLC&#146;s opinion
described below are qualified in their entirety by reference to
the full text of its opinion.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In arriving at its opinion, UBS&nbsp;Warburg LLC
has, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed certain publicly available business and
	historical financial information relating to Schuler and
	D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed certain internal financial information
	and other data relating to the business and financial prospects
	of Schuler, including estimates and financial forecasts prepared
	by the management of Schuler and not publicly available;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed certain internal financial information
	and other data relating to the business and financial prospects
	of D.R.&nbsp;Horton, including estimates and financial forecasts
	prepared by the management of Schuler and D.R.&nbsp;Horton and
	not publicly available;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">conducted discussions with members of the senior
	management of Schuler and D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed publicly available financial and stock
	market data with respect to certain other companies in lines of
	business UBS Warburg LLC believes to be generally comparable to
	those of D.R.&nbsp;Horton and Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">compared the financial terms of the merger with
	the publicly available financial terms of certain other
	transactions which UBS Warburg LLC believes to be generally
	relevant;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">considered certain pro forma effects of the
	merger on D.R.&nbsp;Horton&#146;s financial statements prepared
	by the managements of Schuler and D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed the final draft of the merger
	agreement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">conducted other financial studies, analyses and
	investigations, and considered other information, as UBS Warburg
	LLC deemed necessary or appropriate.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with UBS Warburg LLC&#146;s review,
at the direction of Schuler, UBS Warburg LLC has not assumed any
responsibility for independent verification of any of the
information reviewed by UBS Warburg LLC for the purpose of its
opinion and has, with Schuler&#146;s consent, relied on its
being complete and accurate in all material respects. In
addition, at Schuler&#146;s direction, UBS Warburg LLC has not
made any independent evaluation or appraisal of any of the
assets or liabilities, contingent or otherwise, of Schuler or
D.R.&nbsp;Horton, nor has UBS Warburg LLC been furnished with
any evaluation or appraisal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to the financial forecasts,
estimates, and pro forma effects, UBS Warburg LLC has assumed,
at Schuler&#146;s direction, that they have been reasonably
prepared on a basis reflecting the best currently available
estimates and judgments of the management of each company as to
the future
</FONT>

<P align="center"><FONT size="2">45
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">performance of their respective companies. UBS
Warburg LLC has also assumed, with Schuler&#146;s consent, that
the transaction will qualify as a tax-free reorganization for
U.S.&nbsp;federal income tax purposes. UBS Warburg LLC also has
assumed that all governmental, regulatory or other consents and
approvals necessary for the consummation of the merger will be
obtained without any material adverse effect on Schuler,
D.R.&nbsp;Horton or the merger. The UBS Warburg LLC opinion is
necessarily based on economic, monetary, market and other
conditions as in effect on, and the information made available
to it as of, the date of its opinion.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The UBS Warburg LLC opinion did not address
Schuler&#146;s underlying business decision to effect the merger
and did not constitute a recommendation to any Schuler
stockholder as to how such stockholder should vote with respect
to the merger. UBS Warburg LLC was not asked to, and it did not,
offer any opinion as to the material terms of the merger
agreement or the form of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In rendering its opinion, UBS Warburg LLC
assumed, with Schuler&#146;s consent, that the final executed
form of the merger agreement does not differ in any material
respect from the draft that UBS Warburg LLC examined, and that
Schuler and D.R.&nbsp;Horton will comply with all the material
terms of the merger agreement. UBS Warburg LLC expressed no
opinion as to what the value of D.R.&nbsp;Horton common stock
will be when issued pursuant to the merger or the price at which
D.R.&nbsp;Horton common stock will trade or otherwise be
transferable subsequent to the merger. Except as described
above, Schuler imposed no other instructions or limitations on
UBS Warburg LLC with respect to investigations made or
procedures followed by UBS Warburg LLC in rendering its opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with rendering its opinion to the
Schuler board of directors, UBS Warburg LLC performed a variety
of financial and comparative analyses, which are summarized
below. The following summary is not a complete description of
all of the analyses performed and factors considered by UBS
Warburg LLC in connection with its opinion. The preparation of a
fairness opinion is a complex process involving subjective
judgments and is not necessarily susceptible to partial analysis
or summary description. With respect to the analyses of selected
publicly traded companies and selected transactions summarized
below, no company or transaction used as a comparison is either
identical or directly comparable to Schuler, D.R.&nbsp;Horton or
the merger. These analyses necessarily involve complex merger
considerations and judgments concerning financial and operating
characteristics and other factors that could affect the public
trading or acquisition values of the companies concerned.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">UBS Warburg LLC believes that its analyses and
the summary below must be considered as a whole and that
selecting portions of its analysis and factors or focusing on
information presented in tabular format, without considering all
analyses and factors or the narrative description of the
analyses, could create a misleading or incomplete view of the
processes underlying UBS Warburg LLC&#146;s analyses and
opinion. None of the analyses performed by UBS Warburg LLC was
assigned greater significance by UBS Warburg LLC than any other.
UBS Warburg LLC arrived at its ultimate opinion based on the
results of all analyses undertaken by it and assessed as a
whole. UBS Warburg LLC did not draw, in isolation, conclusions
from or with regard to any one factor or method of analysis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estimates of Schuler&#146;s and
D.R.&nbsp;Horton&#146;s future performance provided by the
managements of Schuler and D.R.&nbsp;Horton in or underlying UBS
Warburg LLC&#146;s analyses are not necessarily indicative of
future results or values, which may be significantly more or
less favorable than those estimates. In performing its analyses,
UBS Warburg LLC considered industry performance, general
business and economic conditions and other matters, many of
which are beyond the control of Schuler and D.R.&nbsp;Horton.
Estimates of the financial value of companies do not necessarily
purport to be appraisals or reflect the prices at which
companies actually may be&nbsp;sold.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger consideration provided for in the
merger was determined through negotiation between Schuler and
D.R.&nbsp;Horton, and the decision by Schuler to enter into the
merger was solely that of the Schuler board of directors. UBS
Warburg LLC&#146;s opinion and financial analyses were only one
of many factors considered by the Schuler board of directors in
its evaluation of the merger and should not be viewed as
determinative of the views of the Schuler board of directors or
management with respect to the merger or the merger
consideration.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a brief summary of the material
financial analyses performed by UBS Warburg LLC and reviewed
with the Schuler board of directors in connection with its
opinion dated October&nbsp;22, 2001. <B>The financial analyses
summarized below include information presented in tabular
format. In order to fully understand UBS Warburg LLC&#146;s
financial analyses, the tables must be read together with the
text of each summary. The tables alone do not constitute a
complete description of the financial analyses. Considering the
data below without considering the full narrative description of
the financial analyses, including the methodologies and
assumptions underlying the analyses, could create a misleading
or incomplete view of UBS Warburg LLC&#146;s financial
analyses.</B>
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Historical Stock Trading
	Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To provide contextual and comparative market
data, UBS Warburg LLC examined the history of the trading prices
for the shares of Schuler common stock in relation to a
homebuilder index consisting of Beazer Homes USA, Inc., Centex
Corporation, Lennar Corporation,&nbsp;M.D.C. Holdings, Inc.,
Pulte Homes, Inc., The Ryland Group, Inc., Standard Pacific
Corporation and Toll Brothers, Inc. The trading performance of
Schuler common stock, on an indexed basis, based on closing
prices, out-performed the index defined above since
January&nbsp;1, 2001. UBS Warburg LLC noted that over the last
twelve months, Schuler common stock had a high of $17.06, a low
of $7.75, and a 120-day average price of $13.73.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Comparable Public Company
	Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Using publicly available information, UBS Warburg
LLC compared selected financial data of Schuler with
corresponding data of selected companies, the securities of
which are publicly traded and which are engaged in businesses
that UBS Warburg LLC believed to be generally comparable in some
respects to those of Schuler. The comparable companies were as
follows: Beazer Homes USA, Inc., Centex Corporation, Crossman
Communities, Inc., D.R.&nbsp;Horton, Hovnanian Enterprises,
Inc., KB&nbsp;Home, Lennar Corporation,&nbsp;M.D.C. Holdings,
Inc., Meritage Corporation, M/I&nbsp;Schottenstein Homes, Inc.,
NVR, Inc., Pulte Homes, Inc. (pro forma for its acquisition of
Del Webb by summing individual company results), The Ryland
Group, Inc., Standard Pacific Corporation and Toll Brothers,
Inc. UBS Warburg LLC determined the total market value of
equity, which is defined as shares outstanding multiplied by the
share price as of October&nbsp;19, 2001, and derived an
enterprise value, which is defined as total market value of
equity plus the book value of debt, preferred stock and minority
interests less cash and cash equivalents, for each of the
comparable companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">UBS Warburg LLC calculated a range of market
values of equity as a multiple of last twelve months ended
June&nbsp;30, 2001&nbsp;net income, projected calendar year
2001&nbsp;net income, projected calendar year 2002&nbsp;net
income and book value as of June&nbsp;30, 2001. In addition, UBS
Warburg LLC calculated a range of enterprise values as a
multiple of last twelve months ended June&nbsp;30, 2001
revenues, earnings before interest, taxes, depreciation and
amortization and earnings before interest and taxes and as a
multiple of net assets as of June&nbsp;30, 2001. The table below
sets forth the median results of the analysis and the results
for Schuler based on the value of the merger consideration as of
October&nbsp;19, 2001.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Implied Equity Value as a Multiple of</FONT></B></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Implied Enterprise Value as a Multiple of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">CY 2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">CY 2002</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Book</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Net</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">EBITDA</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">EBIT</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Assets</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comparable Companies Median
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.1x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.3x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.20x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.6x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.9x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.2x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.11x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.4x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.58x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.2x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.20x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Precedent Transaction
	Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Using publicly available information, UBS Warburg
LLC reviewed the implied transaction multiples paid in eight
merger and acquisition transactions occurring in the past five
years in the homebuilding industry. These transactions were
selected because UBS Warburg&nbsp;LLC believed the target
companies were engaged in businesses that were generally
comparable in some respects to those of Schuler. For the
</FONT>

<P align="center"><FONT size="2">47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">comparable acquired companies, UBS Warburg LLC
reviewed implied multiples for the total merger consideration
offered for equity to the last twelve months net income of such
companies and reviewed implied multiples for the total merger
consideration offered for equity to the book value of such
companies. UBS Warburg LLC also reviewed implied multiples for
the enterprise value of the transactions, meaning the total
merger consideration offered for equity plus the book value of
debt, preferred stock and minority interests less cash and cash
equivalents, to the last twelve months&#146; revenues of such
companies. UBS Warburg LLC reviewed implied multiples for the
enterprise value of the transactions to the last twelve
months&#146; earnings before interest, taxes, depreciation and
amortization of such companies. Further, UBS Warburg LLC
reviewed implied multiples for the enterprise value of the
transactions to the last twelve months&#146; earnings before
interest and taxes of such companies. The table below sets forth
the median results for the comparable transactions and the
results for Schuler based on the value of the merger
consideration as of October&nbsp;19, 2001.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Implied Equity</FONT></B></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Value as a</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Implied Enterprise Value as a</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Multiple&nbsp;of</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Multiple&nbsp;of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM Net</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Book</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTM</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">EBITDA</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">EBIT</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Comparable Transactions Median
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.4x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.3x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.3x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.2x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.4x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Premiums Paid Analysis</FONT></I></B></TD>
</TR>

</TABLE>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">UBS Warburg LLC, using as a sample 165 select all
stock and cash and stock transactions announced since January
2000, analyzed the premiums paid to the price of the target one
day, 30 days and 60&nbsp;days prior to the announcement of the
transactions. Using this information, UBS Warburg LLC determined
the median premiums paid one day prior to announcement to be
28.5% for the all stock transactions and 29.2% for the cash and
stock transactions. The median premiums paid 30&nbsp;days prior
to announcement were determined to be 40.7% for the all stock
transactions and 36.1% for the cash and stock transactions. The
median premiums paid 60&nbsp;days prior to announcement were
determined to be 40.6% for the all stock transactions and 36.9%
for the cash and stock transactions. Further, UBS Warburg LLC
reviewed six selected business combinations occurring in the
past five years in the homebuilding industry. Using this
information, UBS Warburg LLC determined the mean premiums paid
one day prior to the announcement of such transactions to be
29.4%. The mean premiums paid 30&nbsp;days and 60&nbsp;days
prior to the announcement of such transactions were determined
to be 32.3% and 52.3%, respectively. Based on the value of the
merger consideration as of October&nbsp;19, 2001 (equal to
$16.10 using the closing price for D.R.&nbsp;Horton common stock
on that date), the premiums to Schuler&#146;s common stock price
one day, 30&nbsp;days and 60&nbsp;days prior to announcement
were 46.8%, 29.8% and 16.7%, respectively. The 30-day and 60-day
periods used in calculating the premiums to Schuler&#146;s
common stock price coincided with the events of
September&nbsp;11, 2001. The decline in Schuler&#146;s common
stock price following September&nbsp;11, 2001 resulted in a
downward trend in the Schuler premiums analysis that may not
have otherwise occurred.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No company, transaction or business used in the
analyses described under &#147;Precedent Transaction
Analysis,&#148; &#147;Comparable Public Company Analysis&#148;
and &#147;Premiums Paid Analysis&#148; is identical to Schuler
or the transactions contemplated by the merger agreement.
Accordingly, an evaluation of the results of the analyses
necessarily involves complex considerations and judgments
concerning the differences in financial and operating
characteristics and other factors that could affect the
transaction or the public trading price or other values of
Schuler or companies or businesses to which it is being
compared. Mathematical analysis, such as determining the average
or median, is not in itself a meaningful method of using
comparable acquisition or comparable company data.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Discounted Cash Flow Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">UBS Warburg LLC performed a discounted cash flow
analysis of Schuler to estimate the present value of the
unlevered, after-tax free cash flows that Schuler could generate
for fiscal years September&nbsp;30,
</FONT>

<P align="center"><FONT size="2">48
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<DIV align="left">
<FONT size="2">2002 through 2006, based on internal estimates of
Schuler&#146;s management. In performing its discounted cash
flow analysis, UBS Warburg LLC considered various assumptions
and applied valuation parameters that it deemed appropriate. UBS
Warburg LLC calculated a range of estimated terminal values by
applying selected multiples ranging from 4.00x to 5.00x to
Schuler&#146;s projected fiscal year 2006 earnings before
interest, taxes, depreciation and amortization. The present
value of the cash flows and terminal values were then calculated
using selected discount rates ranging from 13.0% to 16.0%. The
various ranges for discount rates and terminal value multiples
were chosen by UBS Warburg LLC based upon theoretical analyses
of cost of capital ranges that could be applicable based on
comparisons to the precedent transactions previously described
and the consideration of the uncertainty and volatility of
economic and stock market conditions existing at the time of the
analyses. The use of alternative ranges for discount rates and
terminal value multiples would alter the results of the
discounted cash flow analysis. Based on the analysis above, UBS
Warburg LLC arrived at an implied equity value per share
valuation range of $13.70 to $22.46&nbsp;per share, as compared
to the value of the merger consideration as of October&nbsp;19,
2001 (equal to $16.10 using the closing price for
D.R.&nbsp;Horton common stock on that date).
</FONT>
</DIV>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the analyses described above, UBS
Warburg LLC performed such other valuation analyses as it deemed
appropriate.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Miscellaneous</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to an engagement letter dated
August&nbsp;29, 2001, Schuler engaged UBS Warburg LLC to act as
its financial advisor in connection with a sale of Schuler or
other similar transaction. Pursuant to this letter, Schuler
agreed to pay UBS Warburg LLC a fee in an amount customary for
similar transactions. In addition, Schuler has agreed to
reimburse UBS Warburg LLC for its reasonable expenses, including
reasonable fees and disbursements of its counsel, and to
indemnify UBS Warburg LLC and related parties against
liabilities, including liabilities under federal securities
laws, relating to, or arising out of, its engagement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler selected UBS Warburg LLC as its exclusive
financial advisor in connection with the merger because UBS
Warburg LLC is an internationally recognized investment banking
firm with substantial experience in similar transactions. UBS
Warburg LLC is continually engaged in the valuation of
businesses and their securities in connection with mergers and
acquisitions, leveraged buyouts, negotiated underwritings,
competitive bids, secondary distributions of listed and unlisted
securities and private placements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, UBS Warburg LLC and its predecessors
have provided investment banking services to Schuler and
D.R.&nbsp;Horton and received customary compensation for the
rendering of such services. In the ordinary course of business,
UBS Warburg LLC, its successors and affiliates may trade
securities of Schuler or D.R.&nbsp;Horton for their own accounts
and, accordingly, may at any time hold a long or short position
in those securities.
</FONT>

<!-- link2 "Opinion of D.R. Horton&#146;s Financial Advisor" -->
<DIV align="left"><A NAME="041"></A></DIV>

<P align="left">
<B><FONT size="2">Opinion of D.R.&nbsp;Horton&#146;s Financial
Advisor</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 2001, the D.R.&nbsp;Horton board of
directors retained Banc of America Securities to act as its
financial advisor in connection with the possible acquisition
of, or a possible business combination involving, Schuler. Banc
of America Securities is an internationally recognized
investment banking firm and regularly engages in the valuation
of businesses and their securities in connection with mergers
and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes.
D.R.&nbsp;Horton selected Banc of America Securities to act as
its financial advisor on the basis of Banc of America
Securities&#146; experience in transactions similar to the
merger and its familiarity with D.R.&nbsp;Horton and Schuler and
their businesses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities has delivered to the
D.R.&nbsp;Horton board of directors its opinion, dated
October&nbsp;22, 2001, to the effect that, as of that date and
based on and subject to the matters described in the opinion,
the consideration to be paid by D.R.&nbsp;Horton in the proposed
merger was fair, from a financial point of view, to
D.R.&nbsp;Horton.
</FONT>

<P align="center"><FONT size="2">49
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">We have attached the full text of Banc of
America Securities&#146; written opinion to the D.R.&nbsp;Horton
board of directors as Annex&nbsp;III, which is incorporated in
its entirety into this Joint Proxy Statement/ Prospectus by
reference. The opinion sets forth the assumptions made,
procedures followed, other matters considered and limits of the
review undertaken. You should read this opinion carefully and in
its entirety in connection with this Joint Proxy Statement/
Prospectus. However, we also have included the following summary
of Banc of America Securities&#146; opinion, which is qualified
in its entirety by reference to the full text of the
opinion.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Banc of America Securities&#146; opinion is
addressed to the D.R.&nbsp;Horton board of directors. It does
not constitute a recommendation to D.R.&nbsp;Horton stockholders
on how to vote with respect to any matters relating to the
proposed merger. The opinion addresses only the financial
fairness to D.R.&nbsp;Horton of the consideration to be paid in
the merger. The opinion does not address the relative merits of
the merger or any alternatives to the merger, the underlying
decision of the D.R.&nbsp;Horton board of directors to proceed
with or effect the merger or any other aspect of the merger. In
furnishing its opinion, Banc of America Securities does not
admit that it is an expert within the meaning of the term
&#147;expert&#148; as used in the Securities Act of 1933, nor
does Banc of America Securities admit that its opinion
constitutes a report or valuation within the meaning of the
Securities Act of 1933. Statements to this effect are included
in Banc of America Securities&#146; opinion.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In arriving at its opinion, Banc of America
Securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed certain publicly available financial
	statements and other business and financial information of
	Schuler and D.R.&nbsp;Horton, respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed certain internal financial statements
	and other financial and operating data concerning Schuler and
	D.R.&nbsp;Horton, respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">analyzed certain financial forecasts prepared by
	the managements of Schuler and D.R.&nbsp;Horton, respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">discussed the past and current operations,
	financial condition and prospects of Schuler with senior
	executives of Schuler and discussed the past and current
	operations, financial condition and prospects of
	D.R.&nbsp;Horton with senior executives of D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed information and discussed with senior
	executives of D.R.&nbsp;Horton and Schuler information relating
	to certain strategic, financial and operational benefits
	anticipated from the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed the pro forma impact of the merger on
	D.R.&nbsp;Horton&#146;s earnings per share, cash flow,
	consolidated capitalization and financial ratios;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed the reported prices and trading activity
	for Schuler common stock and the common stock of
	D.R.&nbsp;Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">compared the financial performance of Schuler and
	the prices and trading activity of Schuler common stock with
	that of certain other publicly traded companies Banc of America
	Securities deemed relevant;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">compared certain financial terms of the merger to
	financial terms, to the extent publicly available, of certain
	other business combination transactions Banc of America
	Securities deemed relevant;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">participated in discussions and negotiations
	among representatives of Schuler and D.R.&nbsp;Horton and their
	financial and legal advisors;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reviewed the merger agreement and certain related
	documents; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">performed such other analyses and considered such
	other factors as Banc of America Securities deemed appropriate.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities did not assume any
responsibility to independently verify the financial and other
information, including the information listed above, that it
reviewed for purposes of its opinion.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<DIV align="left">
<FONT size="2">Instead, with the consent of D.R.&nbsp;Horton,
Banc of America Securities relied on that information as being
accurate and complete in all material respects. Banc of America
Securities also made the following assumptions at the direction,
or with the consent, of D.R.&nbsp;Horton or Schuler, as the case
may be, without independent verification or investigation:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">with respect to the financial forecasts,
	including information relating to certain strategic, financial
	and operational benefits anticipated from the merger, that they
	have been reasonably prepared on bases reflecting the best
	currently available estimates and good faith judgments of the
	future financial performance of D.R.&nbsp;Horton and
	Schuler;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">that the merger will be consummated in accordance
	with the terms set forth in the merger agreement including,
	amongst other things, that it would be treated as a tax-free
	reorganization or exchange or both under the Internal Revenue
	Code.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities did not make or
receive any independent valuation or appraisal of the assets or
liabilities, contingent or otherwise, of D.R.&nbsp;Horton or
Schuler. Moreover, the Banc of America Securities opinion did
not constitute a recommendation to the D.R.&nbsp;Horton board of
directors of the amount of the base consideration to be paid by
D.R.&nbsp;Horton.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton imposed no other instructions or
limitations on Banc of America Securities with respect to the
investigations made or the procedures followed by it in
rendering its opinion. Banc of America Securities&#146; opinion
was based on economic, market and other conditions in effect on,
and the information made available to it as of, the date of the
opinion. Although subsequent developments may affect the opinion
of Banc of America Securities, Banc of America Securities does
not have any obligation to update, revise or reaffirm its
opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities&#146; opinion and
related financial presentation to the D.R.&nbsp;Horton board of
directors was only one of many factors taken into consideration
by the D.R.&nbsp;Horton board of directors in making its
determination to approve, and to recommend that D.R.&nbsp;Horton
stockholders approve, the merger and the merger agreement. Banc
of America Securities did not express any opinion as to whether
any alternative transaction might be more favorable to
D.R.&nbsp;Horton.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description is merely a summary of
the analyses and examinations that Banc of America Securities
considered to be material to its opinion. It is not a
comprehensive description of all analyses and examinations
actually conducted by Banc of America Securities. The
preparation of a fairness opinion is not readily susceptible to
partial analysis or summary description. Banc of America
Securities believes that its analyses and the summary below must
be considered as a whole. Banc of America Securities further
believes that selecting portions of its analyses and factors
considered or focusing on information presented in tabular
format, without considering all analyses and factors or the
narrative description of the analyses, would create an
incomplete view of the process underlying its analyses and
opinion presented to the D.R.&nbsp;Horton board of directors.
Banc of America Securities did not assign any specific weight to
any of the analyses described below. The fact that any specific
analysis has been referred to in the summary below is not meant
to indicate that such analysis was given greater weight than any
other analysis. Accordingly, the ranges of valuations resulting
from any particular analysis described below should not be
interpreted as Banc of America Securities&#146; view of the
actual value of either D.R.&nbsp;Horton or Schuler.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In performing its analyses, Banc of America
Securities considered and made assumptions about industry
performance, general business and economic conditions and other
matters, many of which are beyond the control of
D.R.&nbsp;Horton and Schuler. No company or transaction used in
the analyses as a comparison is identical to D.R.&nbsp;Horton,
Schuler or the merger. Accordingly, an analysis of the following
results is not mathematical. Rather, it involves complex
consideration and judgments concerning differences in financial
and operating characteristics of the companies and other factors
that could affect the public trading value or purchase price of
the companies to which D.R. Horton, Schuler and the merger are
being compared. The analyses performed by Banc of America
Securities are not necessarily indicative of actual values or
actual future results, which may be significantly more or less
favorable than those
</FONT>

<P align="center"><FONT size="2">51
</FONT>

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<DIV align="left">
<FONT size="2">suggested by the analyses. The analyses were
prepared solely as part of Banc of America Securities&#146;
analysis of the financial fairness to D.R.&nbsp;Horton of the
consideration to be paid in the merger and were provided to the
D.R.&nbsp;Horton board of directors in connection with the
delivery of Banc of America Securities&#146; opinion. The
analyses do not purport to be appraisals or to reflect the
prices at which a company might actually be sold or the prices
at which any securities may trade at any time in the future.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the terms of an engagement letter
dated August&nbsp;30, 2001, D.R.&nbsp;Horton has paid to Banc of
America Securities $1&nbsp;million for the fairness opinion
described below. In addition, D.R.&nbsp;Horton has agreed to pay
Banc of America Securities a fee for providing financial
services to D.R.&nbsp;Horton that is customary in transactions
of this nature, a substantial portion of which is contingent
upon the consummation of the merger, against which will be
credited the $1&nbsp;million fairness opinion fee already
described and any out-of-pocket expenses previously reimbursed.
In addition, D.R.&nbsp;Horton has agreed to indemnify Banc of
America Securities and certain related parties against
liabilities, including liabilities under the federal securities
laws, arising out of its engagement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, Banc of America Securities or its
affiliates have provided financial advisory and financing
services for D.R.&nbsp;Horton and Schuler and have received fees
for the rendering of these services. Banc of America Securities
and its affiliates are engaged in a broad range of securities
activities and financial services. Bank of America, N.A. is lead
agent on Schuler&#146;s unsecured revolving credit facility.
Bank of America, N.A. is lead agent on D.R.&nbsp;Horton&#146;s
unsecured revolving credit facility. Bank of America, N.A. may
provide additional credit to D.R.&nbsp;Horton to consummate the
merger. In the ordinary course of their businesses, Banc of
America Securities and its affiliates may actively trade the
debt and equity securities of Schuler and D.R.&nbsp;Horton for
their own account or for the accounts of customers, and,
accordingly, Banc of America Securities and its affiliates may
at any time hold long or short positions in such securities.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Financial Analyses</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the material
financial analyses presented by Banc of America Securities to
the D.R.&nbsp;Horton board of directors in connection with Banc
of America Securities&#146; opinion, dated October&nbsp;22,
2001, addressed to the D.R.&nbsp;Horton board of directors.
<B>The financial analyses summarized below include information
presented in tabular format. In order to understand more fully
Banc of America Securities&#146; financial analyses, the tables
must be read together with the text of each summary. The tables
alone do not constitute a complete description of the financial
analyses. Considering the data in the tables below without
considering the full narrative description of the financial
analyses, including the methodologies and assumptions underlying
the analyses, could create a misleading or incomplete view of
Banc of America Securities&#146; financial analyses.</B>
</FONT>

<P align="center"><FONT size="2">52
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Consideration To Be Paid By
	D.R.&nbsp;Horton</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the consideration
to be offered by D.R.&nbsp;Horton under the terms of the merger
agreement for each share of Schuler Class&nbsp;A and
Class&nbsp;B common stock:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Total Amount of Base Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Consideration for Each Share of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Common Stock Consisting of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Average Closing Price</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">$4.09 in Cash and Shares of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">of D.R.&nbsp;Horton</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock at</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Issued for Each Schuler Share</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">the Average Closing Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.51 or higher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.487&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49 or higher
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.51 to $27.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $13.395 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.50 to $23.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.570&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21 to $17.49
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.51 to $19.49
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $11.115 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.00 to $17.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.635&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$14.25 to $15.20
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less than $16.00
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Schuler termination right subject to
	D.R.&nbsp;Horton option to increase stock and/or cash component
	of the consideration
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$14.25
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the close of trading on October&nbsp;19, 2001,
which is the last trading day prior to Banc of America
Securities&#146; delivery of the opinion, the stock price of
Schuler was $10.97. Based upon D.R.&nbsp;Horton&#146;s stock
price of $21.07 at the close of trading on October&nbsp;19,
2001, and using a 0.570 exchange ratio and $4.09 in cash, the
value per share of the consideration to be paid to shareholders
of Schuler on October&nbsp;19, 2001 was $16.10.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Analysis Of Selected Publicly Traded
	Companies</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Using publicly available information, Banc of
America Securities reviewed the market values and trading
multiples of Schuler and the following nine selected publicly
held companies in the homebuilding industry. Companies within
this industry with an aggregate value of $2.0&nbsp;billion or
less are referred to below as small cap companies, and companies
with an aggregate value of greater than $2.0&nbsp;billion are
referred to below as large cap companies:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Small Cap Companies</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Large Cap Companies</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Beazer Homes USA, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hovnanian Enterprises, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">KB Home
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">M.D.C. Holdings, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Lennar Corporation
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">The Ryland Group, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Pulte Corporation
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Standard Pacific Corp.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To calculate the trading multiples for the
selected companies Banc of America Securities used publicly
available information concerning historical and projected
financial performance, including published earnings estimates
reported by Thomson Financial&#146;s First Call. First Call is a
data service that monitors and publishes compilations of
earnings estimates by selected research analysts regarding
companies of interest to institutional investors. Banc of
America Securities used management estimates and an average of
research analyst estimates to derive earnings estimates for
D.R.&nbsp;Horton, First Call earnings estimates were used for
the small cap companies and earnings estimates from the most
recently published Banc of America Securities research reports
were used for the large cap companies.
</FONT>

<P align="center"><FONT size="2">53
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All multiples were based on closing stock prices
on October&nbsp;19, 2001. Banc of America Securities compared
equity market values as multiples of latest twelve months and
estimated calendar year 2001 and 2002&nbsp;net income and latest
available book value. Banc of America Securities also reviewed
the latest twelve months aggregate value (calculated as equity
value, plus debt, minority interest and preferred stock, less
cash and cash equivalents) as a multiple of earnings before
interest, tax, depreciation and amortization
(&#147;EBITDA&#148;) of the selected publicly traded companies.
Banc of America Securities then applied a range of selected
multiples derived from the selected publicly traded companies to
corresponding financial data, management estimates and an
average of research analyst estimates, of Schuler in order to
derive an implied per share equity reference range:
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Based on Research Projections</FONT></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Multiple</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Equity Value Range</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Range</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Per&nbsp;Share</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Earnings per share (&#147;EPS&#148;)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Last twelve months (&#147;LTM&#148;)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2001 estimate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.70</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002 estimate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LTM EBITDA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value (6/30/01)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler Based on Research Projections
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="7" align="right" valign="bottom">
	<FONT size="2">$10.00 - $15.00
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Based on Internal Projections</FONT></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Multiple</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Equity Value Range</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Range</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EPS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LTM
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2001 estimate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.8x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.75</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2002 estimate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LTM EBITDA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value (6/30/01)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler Based on Internal Projections
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="7" align="right" valign="bottom">
	<FONT size="2">$11.00 - $15.50
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Analysis Of Selected
	Acquisitions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities reviewed the financial
terms, to the extent publicly available, of the following five
completed merger and acquisition transactions since 1997
involving companies in the homebuilding industry:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Announcement Date</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Acquiror</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Target</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">May&nbsp;1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Pulte Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Del Webb Corp.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">September&nbsp;12, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Schuler
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Western Pacific
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">February&nbsp;17, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Lennar Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">U.S.&nbsp;Home Corp.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">October&nbsp;20, 1998
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">KB Home
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Lewis Homes Corp.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">June&nbsp;11, 1997
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Lennar Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Pacific Greystone
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All multiples were based on publicly available
information at the time of the announcement of the relevant
transaction. Banc of America Securities compared the aggregate
values of these selected
</FONT>

<P align="center"><FONT size="2">54
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">acquisitions as multiples of last twelve months
EBITDA, and the equity market values as multiples of last twelve
months net income and latest available book value. Banc of
America Securities then applied a range of selected multiples
derived from the selected acquisitions to corresponding
financial data of Schuler in order to derive an implied per
share equity reference range:
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Multiple</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Equity Value Range</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Range</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LTM EPS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LTM EBITDA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Book value (6/30/01)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.54</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.79</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Analysis Of Selected Acquisition Premiums
	Paid</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities reviewed the purchase
prices and implied premiums payable in 127 selected transactions
from a wide range of industries that occurred since
September&nbsp;1, 1998 with disclosed aggregate values of
between $1.0-$2.0&nbsp;billion. Banc of America Securities also
included in the analysis the following four homebuilding
transactions with disclosed aggregate values over
$300&nbsp;million occurring since January&nbsp;1, 1997:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Announcement Date</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Acquiror</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Target</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">May&nbsp;1, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Pulte Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Del Webb Corp.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">October&nbsp;12, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Technical Olympic, S.A.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Engle Homes, Inc.
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">February&nbsp;17, 2000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Lennar Corporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">U.S.&nbsp;Home Corp.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">December&nbsp;12, 1997
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Continental Homes
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For each of the selected acquisitions, Banc of
America Securities reviewed, among other things, the premium
implied in each acquisition based on the target company&#146;s
average stock price for the one day, one-week and one-month
periods prior to public announcement of the transaction. Banc of
America Securities then applied a range of selected premiums
derived from the selected acquisitions to the average stock
prices of Schuler common stock for corresponding periods prior
to October&nbsp;22, 2001, which is the last trading day prior to
Banc of America Securities&#146; delivery of the opinion. This
analysis indicated the following implied per share equity
reference range for Schuler:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">One Day Prior</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">One Week Prior</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">One Month Prior</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Median</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Median</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Median</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Analysis of selected acquisition premiums
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected homebuilding transactions since 1/1/97
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">31.4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">30.1</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected transactions since 9/01/98
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">44.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied value per Schuler share at current stock
	price
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected homebuilding transactions since 1/1/97
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.61</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.59</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.97</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selected transactions since 9/01/98
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.99</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16.25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Discounted Cash Flow Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities conducted two
discounted cash flow analyses, one based on research and the
other based on internal Schuler projections. The research case
used Banc of America Securities
</FONT>

<P align="center"><FONT size="2">55
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<DIV align="left">
<FONT size="2">research projections for the three months ending
March&nbsp;31, 2002 and fiscal year ending March&nbsp;31, 2003
and estimated cash flows generated in fiscal year 2004 through
fiscal year 2007 using revenue and expense growth assumptions
for Schuler that are generally consistent with the assumptions
used in the research projections. For the internal case, Banc of
America Securities utilized internal cash flow projections
prepared by Schuler through fiscal year 2006 and extrapolated
fiscal year 2007. The extrapolation of fiscal year 2007 was
calculated by applying the 2006 growth rates and margins to the
2006 internal projections. Banc of America Securities discounted
the cash flows from the fourth quarter of fiscal year 2002
through fiscal year 2007 and assumed a sale of Schuler at the
end of fiscal year 2007. To simulate a sale, Banc of America
Securities calculated a terminal value range for Schuler by
applying a range of multiples of 5.0x to 6.0x to estimated
fiscal year 2007 EBITDA. The multiple range was based on
trailing twelve month EBITDA multiples reviewed in the analysis
of selected acquisitions previously described. Banc of America
Securities then calculated the net present value of the terminal
value range and the estimated cash flow for the company from
2002 through 2007, utilizing a discount rate range of 12.0% to
14.0%. The discount rate range was a determined rate based on
Schuler&#146;s implied weighted average cost of capital of 10.8%
(16.6% cost of equity). Banc of America Securities used a
discount rate range that was higher than the weighted average
cost of capital due to, among other factors, the uncertainty of
current and future economic conditions and historically low
interest rates. Banc of America Securities utilized the trading
characteristics of the common stock of the selected publicly
traded companies to derive weighted average cost of capital. To
arrive at the range of implied equity values, net debt (short
term debt and long term debt less cash and cash equivalents) was
subtracted from the implied aggregate value ranges. Although
Banc of America utilized assumptions and variables it deemed to
be most appropriate in conducting its analysis, the utilization
of other variables and assumptions could result in a different
valuation and conclusion. This analysis yielded the following
implied value per share ranges for the research and internal
cases:
</FONT>
</DIV>


<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Based on Research Projections</FONT></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Discount Rate</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">12.0%</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">13.0%</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">14.0%</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terminal EBITDA multiple
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied value per share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.08</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler Based on Research
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Projections
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<I><FONT size="2">Based on Internal Projections</FONT></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Discount Rate</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">12.0%</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">13.0%</FONT></B></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">14.0%</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terminal EBITDA multiple
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.0x</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied value per share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.76</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28.52</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.51</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.78</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22.62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Implied Per Share Equity Reference Range for
	Schuler Based on Internal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Projections
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Pro Forma Merger Analysis</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Banc of America Securities analyzed the potential
pro forma financial effect of the merger on
D.R.&nbsp;Horton&#146;s estimated earnings per share for
calendar years 2001 and 2002 based both on internal estimates of
the managements of D.R.&nbsp;Horton and Schuler and on Banc of
America Securities research, both before and after giving effect
to potential cost savings and other synergies anticipated by the
managements of D.R.&nbsp;Horton and Schuler to result from the
merger. This analysis indicated that the proposed merger would
be accretive to D.R.&nbsp;Horton earnings per share before
giving full effect to potential cost savings and other synergies
anticipated by the management of D.R.&nbsp;Horton and Schuler.
The actual results achieved by D.R.&nbsp;Horton may vary from
projected results and the variations may be material.
</FONT>

<P align="center"><FONT size="2">56
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table is the summary of Banc of
America Securities&#146; base case results, assuming no
synergies from the merger:
</FONT>


<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stock Price/Schuler</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Implied Purchase Price</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$19.00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$21.07</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$24.00</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><I><FONT size="1">$15.21</FONT></I></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><I><FONT size="1">$16.10</FONT></I></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><I><FONT size="1">$17.49</FONT></I></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Schuler Research Projections:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2001 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.14</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2001 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.9%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.5%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.0%</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2002 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.11</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2002 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.0%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.6%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.1%</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Schuler Internal Projections:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2001 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.18</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2001 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.1%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.7%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.2%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2002 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.18</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Calendar Year 2002 Accretion
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.2%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.8%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">.3%</FONT></TD>
</TR>

</TABLE>
</CENTER>


<!-- link2 "Accounting Treatment" -->
<DIV align="left"><A NAME="042"></A></DIV>

<P align="left">
<B><FONT size="2">Accounting Treatment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger will be treated as a purchase for
financial accounting purposes.
</FONT>

<!-- link2 "Interests of Certain Persons in the Merger" -->
<DIV align="left"><A NAME="043"></A></DIV>

<P align="left">
<B><FONT size="2">Interests of Certain Persons in the
Merger</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Schuler</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In considering the recommendation of the Schuler
board of directors that Schuler stockholders vote in favor of
the merger agreement and the transactions contemplated by the
merger agreement, Schuler stockholders should be aware that some
Schuler directors and executive officers may have interests in
the merger that are in addition to the interests of Schuler
stockholders generally. The Schuler board of directors was aware
of, and considered, these interests in approving the merger
agreement and the transactions contemplated by the merger
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Indemnification of Officers and Directors.
</FONT></I><FONT size="2">The merger agreement provides that the
right of indemnification for acts and omissions occurring before
the closing of the merger and existing in favor of the directors
and officers of Schuler as provided in the Schuler Certificate
of Incorporation and By-Laws will survive the closing of the
merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Directors&#146; and Officers&#146; Insurance.
</FONT></I><FONT size="2">The merger agreement requires
D.R.&nbsp;Horton to keep in effect, for at least six years,
directors&#146; and officers&#146; liability insurance policies
(through the continuation or endorsement of Schuler&#146;s
existing policy or the purchase of a &#147;tail-end&#148; rider
permitted by such policy) having the same coverage and
containing terms and conditions no less advantageous to the
persons covered by the policies currently in effect.
D.R.&nbsp;Horton will not, however, be required to pay more than
200% of the annual premium paid relating to the year in which
the merger agreement was executed. If it is not able to maintain
the required insurance for that amount, it is required to
purchase as much coverage as it can obtain for that amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The D.R.&nbsp;Horton Board of
Directors.</FONT></I><FONT size="2"> D.R.&nbsp;Horton has
agreed, effective as of the closing of the merger, to use its
best efforts to appoint James K. Schuler to the D.R.&nbsp;Horton
board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Options.
</FONT></I><FONT size="2">Pursuant to Schuler&#146;s
equity-based compensation plans and the merger agreement, all of
Schuler&#146;s outstanding stock options held by Schuler
employees will be replaced by comparable options to acquire
shares of D.R.&nbsp;Horton common stock, as adjusted to reflect
the merger consideration, with the exception of Craig
Manchester, whose options will become fully vested and
exercisable. The immediate vesting of the stock options was
negotiated by Mr.&nbsp;Manchester in exchange for certain
concessions agreed to by him in connection with the termination
of his existing employment agreement at the effective time of
the merger. Except to the extent otherwise agreed to by
D.R.&nbsp;Horton and Schuler, all restrictions or
</FONT>

<P align="center"><FONT size="2">57
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">limitations on transfer and vesting with respect
to the stock options, to the extent that such restrictions or
limitations shall not have already lapsed, shall remain in full
force and effect with respect to the D.R.&nbsp;Horton stock
options replacing the Schuler stock options. If a former Schuler
employee is involuntarily terminated, other than for cause,
death or disability, by D.R.&nbsp;Horton within six months after
the merger, the replacement options held by the terminated
employee will immediately vest and become fully exercisable.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options held by non-employee directors of Schuler
will accelerate and be fully vested and exercisable immediately
prior to the merger. To the extent the options are not
exercised, they will terminate upon effectiveness of the merger.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Employment Agreements.
</FONT></I><FONT size="2">D.R.&nbsp;Horton has entered into
employment agreements with James K. Schuler and Craig Manchester
that will become effective upon consummation of the merger. In
addition, upon consummation of the merger, the current
employment agreements of Mr.&nbsp;Schuler and
Mr.&nbsp;Manchester will terminate without any further
obligation on the part of D.R.&nbsp;Horton or
Messrs.&nbsp;Schuler or Manchester. Mr.&nbsp;Schuler&#146;s
agreement will have a term ending on March&nbsp;31, 2005.
Mr.&nbsp;Schuler will become a Senior Vice President of
D.R.&nbsp;Horton, and the President of D.R.&nbsp;Horton&#146;s
Schuler Homes region. In addition, D.R.&nbsp;Horton has agreed
to use its best efforts to appoint Mr.&nbsp;Schuler to the
D.R.&nbsp;Horton board. Mr.&nbsp;Schuler&#146;s annual base
salary will be $300,000. For Schuler&#146;s fiscal year ending
on March&nbsp;31, 2002, Mr.&nbsp;Schuler will be entitled to a
bonus of 1% of the earnings before taxes attributable to the
operations of Schuler as historically conducted consistent with
past practice immediately prior to the effectiveness of the
merger. For the periods commencing on April&nbsp;1, 2002 and
ending on March&nbsp;31, 2003, and for each 12-month period
thereafter, provided Mr.&nbsp;Schuler is employed during those
periods, Mr.&nbsp;Schuler would be entitled to a bonus of .75%
of the pre-tax income for each 12-month period attributable to
D.R.&nbsp;Horton&#146;s Schuler Homes region. Mr.&nbsp;Schuler
is also eligible to participate in benefit plans and programs,
other than incentive bonus plans, generally available to
similarly situated officers of D.R.&nbsp;Horton. Either
Mr.&nbsp;Schuler or D.R.&nbsp;Horton may terminate
Mr.&nbsp;Schuler&#146;s employment for any reason after the
first anniversary of the effective date of the merger. In
connection with the merger, Mr.&nbsp;Schuler has agreed not to
compete with D.R.&nbsp;Horton for one&nbsp;year after the
effective date of the merger. Mr.&nbsp;Schuler has also agreed
that, so long as he remains a director of D.R.&nbsp;Horton, he
will continue to hold, individually or through a trust of his
designation, at least 25% of the D.R.&nbsp;Horton common stock
that he and his affiliates receive in connection with the merger.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Schuler&#146;s employment agreement with
D.R.&nbsp;Horton will supersede and replace his current
employment agreement with Schuler. Among other things,
Mr.&nbsp;Schuler&#146;s current employment agreement with
Schuler provides for a base minimum annual salary of $650,000.
If Mr.&nbsp;Schuler&#146;s current employment agreement with
Schuler were terminated without cause or in connection with a
change of control for which he does not vote to approve, under
certain circumstances he may be entitled to a payment of
$5.0&nbsp;million, the portion of his annual bonus he would have
been paid but for the termination and immediate vesting of any
long-term incentive rights, including stock options (in addition
to accrued but unpaid salary). If Mr.&nbsp;Schuler&#146;s
current employment agreement with Schuler were terminated at the
request of the majority vote of Schuler&#146;s board of
directors not in connection with a change of control, or without
cause by Schuler not in connection with a change in control,
under certain circumstances Mr.&nbsp;Schuler may be entitled to
1% of 90% of Schuler&#146;s consolidated annual earnings before
taxes for the year in which he is terminated, 1% of 80% of
Schuler&#146;s consolidated annual earnings before taxes for the
following year, and immediate vesting of any long-term incentive
rights, including stock options (in addition to accrued but
unpaid salary). In addition, if Mr.&nbsp;Schuler&#146;s
employment were terminated at the request of a majority of the
board of directors not in connection with a change of control,
under certain circumstances, he may also be entitled to his base
salary for a period of three years following termination.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton has also entered into an
employment agreement with Craig Manchester.
Mr.&nbsp;Manchester&#146;s agreement with D.R.&nbsp;Horton will
have a term ending on March&nbsp;31, 2003. Mr.&nbsp;Manchester
will become a Vice President of D.R.&nbsp;Horton, and the chief
operating officer of D.R.&nbsp;Horton&#146;s Schuler Homes
Region. Mr.&nbsp;Manchester&#146;s annual base salary will be
$350,000. For Schuler&#146;s fiscal year ending on
March&nbsp;31, 2002, Mr.&nbsp;Manchester shall receive a bonus
of 1.25% of the
</FONT>


<P align="center"><FONT size="2">58
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">earnings before taxes attributable to the
operations of Schuler as historically conducted. For the period
commencing on April&nbsp;1, 2002 and ending on March&nbsp;31,
2003, Mr.&nbsp;Manchester will receive a bonus of $1,150,000,
payable in four equal installments of $287,500 following the
completion of each calendar quarter. In addition, upon the
effectiveness of the merger, all of Mr.&nbsp;Manchester&#146;s
options to purchase D.R.&nbsp;Horton common stock granted in
replacement of options to purchase Schuler common stock shall
vest and become exercisable. The balance of the base annual
salary and bonus that would have been payable through the end of
the term of employment will be payable to Mr.&nbsp;Manchester
within 15&nbsp;days of termination of Mr.&nbsp;Manchester&#146;s
employment for any reason other than cause. Mr.&nbsp;Manchester
is also eligible to participate in benefit plans and programs,
other than incentive bonus plans, generally available to
similarly situated officers of D.R.&nbsp;Horton. In connection
with the merger, Mr.&nbsp;Manchester has agreed not to compete
with D.R.&nbsp;Horton for one year after the effective date of
the merger.
</FONT>
</DIV>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Manchester&#146;s agreement with
D.R.&nbsp;Horton will supersede and replace his current
employment agreement with Schuler. Among other things,
Mr.&nbsp;Manchester&#146;s current employment agreement with
Schuler provides for a minimum annual salary of $350,000 and an
annual bonus equal to 1.25% of Schuler&#146;s consolidated
annual earnings before taxes. If Mr.&nbsp;Manchester&#146;s
current employment agreement with Schuler were terminated under
certain circumstances, including a change in control, he would
be entitled to monthly payment of his base salary for two years
following the date of termination and a portion of his annual
bonus earned in the year in which his employment terminated. In
addition, if his employment agreement with Schuler were
terminated without cause during the initial term or in
connection with a change in control or other specified
circumstances, he would be entitled to payment in a lump sum
equal to 90% of his projected annual bonus for the year in which
the termination occurs and 80% of his projected annual bonus for
the following year, monthly payments of his base salary for a
period of two years and immediate vesting of any long-term
incentive rights including stock options.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Termination and Release of Residual
Liabilities Under the Western Pacific Reorganization
Agreement.</FONT></I><FONT size="2"> In April 2001, Schuler
acquired the businesses comprising Western Pacific Housing under
the terms of a reorganization agreement dated as of
September&nbsp;12, 2000. Under the Western Pacific
reorganization agreement, Schuler and the partners of the
entities comprising Western Pacific agreed, for a period of
time, to indemnify each other with respect to, among other
things, liabilities arising out of or related to inaccuracies of
the representations and warranties made by such parties in the
reorganization agreement. The merger agreement provides that,
prior to and to be effective upon the consummation of the
merger, Schuler and the parties to the Western Pacific
reorganization agreement will enter into an agreement
terminating the Western Pacific reorganization agreement and
releasing the parties and their affiliates from any claims
arising out of or relating to the reorganization agreement or
the related stockholders agreement. Several of the directors of
Schuler are affiliates of the parties to the Western Pacific
reorganization agreement that, upon consummation of the merger,
will be released from any liabilities associated with the
Western Pacific reorganization agreement. Further, in the merger
agreement, D.R.&nbsp;Horton agreed, for a ten year period, to
cause, among others, the directors of Schuler and its
subsidiaries who are currently named as insureds or additional
insureds under existing Schuler insurance policies covering
construction defect litigation claims to be named as insureds or
additional insureds under all D.R.&nbsp;Horton policies covering
construction defect litigation claims. As of the date of this
Joint Proxy Statement/ Prospectus, neither Schuler nor
D.R.&nbsp;Horton have knowledge of any claims arising out of or
relating to the Western Pacific reorganization agreement or the
related stockholders agreement or of any construction defect
litigation claims against any of the directors of Schuler.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">D.R.&nbsp;Horton</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In considering the recommendation of the
D.R.&nbsp;Horton board of directors that D.R.&nbsp;Horton
stockholders vote in favor of the merger agreement and the
transactions contemplated by the merger agreement,
D.R.&nbsp;Horton stockholders should be aware that Richard
Beckwitt, a D.R.&nbsp;Horton director, may have an interest in
the merger that is in addition to the interests of
D.R.&nbsp;Horton stockholders generally. Mr.&nbsp;Beckwitt has
advised D.R.&nbsp;Horton in connection with the merger and,
under advisory arrangements with an affiliate, receives payments
from D.R.&nbsp;Horton for advising and assisting
D.R.&nbsp;Horton in its
</FONT>

<P align="center"><FONT size="2">59
</FONT>

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<DIV align="left">
<FONT size="2">acquisitions. The arrangements and the amounts
D.R.&nbsp;Horton has paid and is paying under these arrangements
are described in more detail below on page&nbsp;108 of this
Joint Proxy Statement/ Prospectus in the section entitled
&#147;Additional Information about D.R.&nbsp;Horton&nbsp;&#151;
Transactions with Management.&#148; The D.R.&nbsp;Horton board
of directors was aware of, and considered,
Mr.&nbsp;Beckwitt&#146;s interest under such arrangements in
approving the merger agreement and the transactions contemplated
by the merger agreement.
</FONT>
</DIV>


<!-- link2 "Appraisal Rights" -->
<DIV align="left"><A NAME="044"></A></DIV>

<P align="left">
<B><FONT size="2">Appraisal Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder of record of Schuler common stock may
elect to exercise appraisal rights under Section&nbsp;262 of the
Delaware General Corporation Law. Under Section&nbsp;262, where
a proposed merger is to be submitted for approval at a meeting
of stockholders, the corporation, not less than 20&nbsp;days
prior to the meeting, must notify each of its stockholders
entitled to appraisal rights that these appraisal rights are
available and include in such notice a copy of Section&nbsp;262.
This Joint Proxy Statement/ Prospectus will constitute this
notice to the holders of Schuler common stock, and the
applicable statutory provisions of the Delaware General
Corporation Law are attached to this Joint Proxy Statement/
Prospectus as Annex&nbsp;IV. Any stockholder who wishes to
exercise such appraisal rights or who wishes to preserve the
right to do so should review carefully the following discussion
and Annex&nbsp;IV to this Joint Proxy Statement/ Prospectus.
<B>Failure to comply with the procedures specified in
Section&nbsp;262 timely and properly will result in the loss of
appraisal rights.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion is not a complete
statement of the law pertaining to appraisal rights under the
Delaware General Corporation Law, and is qualified in its
entirety by the full text of Section&nbsp;262. All references in
Section&nbsp;262 and in this summary to a
&#147;stockholder&#148; are to the record holder of the shares
of common stock as to which appraisal rights are asserted. <B>A
person having a beneficial interest in shares of common stock
held of record in the name of another person, such as a broker
or nominee, must act promptly to cause the record holder to
follow properly the steps summarized below and in a timely
manner to perfect appraisal rights.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To exercise appraisal rights, the Schuler
stockholder must deliver a written demand for appraisal of the
stockholder&#146;s shares to Schuler prior to the vote on the
merger. The written demand must identify the stockholder of
record and state the stockholder&#146;s intention to demand
appraisal of his shares. All demands should be delivered to
Schuler Homes, Inc., Attention: Corporate Secretary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only a person who is the holder of record of
shares of Schuler common stock on the date the person makes a
written demand for appraisal and who continuously holds those
shares through the effective time of the merger may seek
appraisal. The demand for appraisal must be executed by the
holder of record or by an agent acting on the holder&#146;s
behalf. If Schuler common stock is owned of record in a
fiduciary capacity, such as by a trustee, guardian or custodian,
the demand should be made in that capacity, and if Schuler
common stock is owned of record by more than one person, as in a
joint tenancy or tenancy in common, the demand should be made by
or for all owners of record. If a demand for appraisal is
executed by an agent for the holder of record, the agent must
identify the record owner and expressly disclose in the demand
that the agent is acting as agent for the record owner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A record holder such as a broker who holds shares
of Schuler common stock as a nominee for beneficial owners, some
of whom desire to demand appraisal, must exercise appraisal
rights on behalf of those beneficial owners with respect to the
shares held for them. In that case, the written demand for
appraisal should set forth the number of shares of Schuler
common stock to which it relates. Unless a demand for appraisal
specifies a number of shares, the demand will be presumed to
cover all shares of Schuler common stock held in the name of the
record owner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Beneficial owners who are not record owners
and who want to exercise appraisal rights should instruct the
record owner to comply with the statutory requirements for
exercise of appraisal rights before the date of the Schuler
special meeting of stockholders.</FONT></B>

<P align="center"><FONT size="2">60
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 10&nbsp;days after the effective time of
the merger, the surviving corporation is required to send notice
of the effectiveness of the merger to each stockholder who prior
to the effective time of the merger complies with the
requirements of Section&nbsp;262.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 120&nbsp;days after the effective time of
the merger, but not after that date, the surviving corporation
or any stockholder who has complied with the requirements of
Section&nbsp;262 may file a petition in the Delaware Court of
Chancery demanding a determination of the fair value of the
shares of D.R.&nbsp;Horton common stock held by all stockholders
seeking appraisal. A dissenting stockholder must serve a copy of
the petition on the surviving corporation. If no petition is
filed by either the surviving corporation or a dissenting
stockholder within the 120-day period, the dissenting
stockholders&#146; right to appraisal will cease. Stockholders
seeking to exercise appraisal rights should not assume that the
surviving corporation will file a petition with respect to the
appraisal of the fair value of their shares, or that it will
initiate any negotiations with respect to the fair value of
those shares. The surviving corporation is under no obligation,
and has no present intention, to do so. Accordingly, Schuler
stockholders who wish to seek appraisal of their shares should
initiate all necessary action with respect to the perfection of
their appraisal rights within the time periods and in the manner
prescribed in Section&nbsp;262.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 120&nbsp;days after the effective time of
the merger, any stockholder who has complied with subsections
(a)&nbsp;and (d)&nbsp;of Section&nbsp;262 is entitled, upon
written request, to receive from the surviving corporation a
statement setting forth the aggregate number of shares of
Schuler common stock not voted in favor of the merger with
respect to which demands for appraisal have been received by
Schuler and the aggregate number of holders of those shares. The
statement must be mailed within 10&nbsp;days after the written
request has been received by the surviving corporation or within
10&nbsp;days after expiration of the time for delivery of
demands for appraisal under subsection&nbsp;(d)&nbsp;of
Section&nbsp;262, whichever is later.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A stockholder who timely files a petition for
appraisal with the Delaware Court of Chancery must serve a copy
upon the surviving corporation. The surviving corporation must
then within 20&nbsp;days file with the Delaware Register in
Chancery a duly verified list containing the names and addresses
of all stockholders who have demanded appraisal of their shares
and who have not reached agreements as to the value of their
shares. After notice to stockholders as may be ordered by the
Delaware Court of Chancery, the Delaware Court of Chancery is
empowered to conduct a hearing on the petition to determine
which stockholders are entitled to appraisal rights. The
Delaware Court of Chancery may require stockholders who have
demanded an appraisal for their shares and who hold stock
represented by the certificates to submit their certificates to
the Register in Chancery for notation on the certificates of the
pendency of the appraisal proceedings, and if any stockholder
fails to comply with the requirement, the Delaware Court of
Chancery may dismiss the proceedings as to that stockholder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a petition for an appraisal is filed in a
timely manner, at the hearing on the petition, the Delaware
Court of Chancery will determine which stockholders are entitled
to appraisal rights and will appraise the shares of Schuler
common stock owned by those stockholders, determining the fair
value of those shares, exclusive of any element of value arising
from the accomplishment or expectation of the merger, together
with a fair rate of interest, if any, to be paid, upon the
amount determined to be the fair value. In determining fair
value, the court is to take into account all relevant factors.
The Delaware Supreme Court has stated that &#147;proof of value
by any techniques or methods that are generally considered
acceptable in the financial community and otherwise admissible
in court&#148; should be considered in the appraisal
proceedings. The Delaware Supreme Court also held that
&#147;elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the
date of the merger and not the product of speculation, may be
considered.&#148; In addition, Delaware courts have decided that
the statutory appraisal remedy, depending on factual
circumstances, may or may not be a dissenter&#146;s exclusive
remedy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler stockholders considering seeking
appraisal should consider that the fair value of their shares
determined under Section&nbsp;262 could be more than, the same
as, or less than, the value of the consideration provided for in
the merger agreement without the exercise of appraisal rights,
and that investment banking opinions as to fairness from a
financial point of view are not necessarily opinions as to fair
value as determined under Section&nbsp;262. The cost of the
appraisal proceeding may be determined by
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<DIV align="left">
<FONT size="2">the Court of Chancery and assessed against the
parties, as the Court deems equitable in the circumstances. Upon
application of a dissenting stockholder, the court may order
that all or a portion of the expenses incurred by any dissenting
stockholder in connection with the appraisal proceeding
(including, without limitation, reasonable attorneys&#146; fees
and the fees and expenses of experts) be charged proportionately
against the value of all shares of Schuler common stock entitled
to appraisal. In the absence of such a determination or
assessment, each party bears its own expenses.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any Schuler stockholder who has properly demanded
appraisal in compliance with Section&nbsp;262 will not, after
the effective time of the merger, be entitled to receive payment
of dividends or other distributions on the Schuler common stock,
except for dividends or distributions payable to stockholders of
record at a date prior to the effective time of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A stockholder may withdraw a demand for appraisal
and accept the merger consideration at any time within
60&nbsp;days after the effective time of the merger by delivery
to the surviving corporation a written withdrawal of the
stockholder&#146;s demand for appraisal, or thereafter may
withdraw such a demand with the written approval of the
surviving corporation. If an appraisal proceeding is properly
instituted, the proceeding may not be dismissed as to any
stockholder without the approval of the Delaware Court of
Chancery, and any such approval may be conditioned on the Court
of Chancery&#146;s deeming the terms to be just. If, after the
effective time of the merger, a holder of Schuler common stock
who had demanded appraisal for the holder&#146;s shares fails to
perfect or loses his right to appraisal, those shares will be
treated under the merger agreement as if they had been converted
as of the effective time of the merger into the base merger
consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">In view of the complexity of these provisions
of Delaware law, any Schuler stockholder who is considering
exercising appraisal rights should consult a lawyer.</FONT></B>

<!-- link2 "New York Stock Exchange and Nasdaq National Market Listing" -->
<DIV align="left"><A NAME="045"></A></DIV>

<P align="left">
<B><FONT size="2">New York Stock Exchange and Nasdaq National
Market Listing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton common stock is listed on the
New York Stock Exchange and Schuler Class&nbsp;A common stock is
listed on the Nasdaq National Market. As a result of the merger,
Schuler Class&nbsp;A common stock will be delisted from the
Nasdaq National Market and will no longer have an active trading
market. It is expected, and is a condition to the consummation
of the merger, that the D.R. Horton common stock that will be
issued to Schuler stockholders in the merger will be listed on
the New York Stock Exchange.
</FONT>

<!-- link2 "Debt Financing" -->
<DIV align="left"><A NAME="046"></A></DIV>

<P align="left">
<B><FONT size="2">Debt Financing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton believes that the cash portion
of the merger consideration and the Schuler indebtedness that
may need to be refinanced (as described below) can be funded
through existing cash and its existing or available borrowing
capacity. At September&nbsp;30, 2001, D.R. Horton had cash of
$232&nbsp;million and $746.8&nbsp;million of availability under
its revolving line of credit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the merger, D.R.&nbsp;Horton
will be required to refinance the indebtedness under
Schuler&#146;s revolving credit facility, under which
$47.1&nbsp;million principal amount is outstanding as of
September&nbsp;30, 2001. In addition, the holders of
$500&nbsp;million principal amount of Schuler&#146;s outstanding
senior and senior subordinated notes will have the right to
cause D.R.&nbsp;Horton to repurchase their notes at 101% of the
principal amount thereof.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures of the senior and senior
subordinated notes of both D.R. Horton and Schuler contain
covenants which limit cash dividends and other restricted
payments. Pursuant to the most restrictive of the requirements
applicable to it, D.R.&nbsp;Horton had approximately
$392.5&nbsp;million available for the payment of dividends and
other restricted payments at September&nbsp;30, 2001. Had the
merger taken place on September&nbsp;30, 2001, D.R.&nbsp;Horton
would have had $53.0&nbsp;million available for the payment of
dividends and other restricted payments at September&nbsp;30,
2001, pursuant to the most restrictive requirements in the
indentures of the Schuler senior and senior subordinated notes
to be assumed by D.R.&nbsp;Horton in the merger.
</FONT>


<P align="center"><FONT size="2">62
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R.&nbsp;Horton revolving credit facility
matures in April 2002, and D.R.&nbsp;Horton is negotiating with
its banks concerning a new facility. D.R.&nbsp;Horton believes
that the amount of the new facility will be $810&nbsp;million,
including $125&nbsp;million for letters of credit.
D.R.&nbsp;Horton believes that the initial interest rate for
outstanding borrowings under the new facility will be 1.625%
over LIBOR. D.R.&nbsp;Horton believes that it can also obtain
access to bridge or other financing should it be required to
finance the repurchase of any of the outstanding Schuler debt.
</FONT>


<P align="center"><FONT size="2">63
</FONT>
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<!-- link1 "THE MERGER AGREEMENT" -->
<DIV align="left"><A NAME="047"></A></DIV>

<P align="center">
<B><FONT size="2">THE MERGER AGREEMENT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This section is a summary of the material terms
of the merger agreement, a copy of which is attached as
Annex&nbsp;I to this Joint Proxy Statement/ Prospectus and is
incorporated into this Joint Proxy Statement/ Prospectus by
reference. The following description is qualified in its
entirety by reference to the merger agreement.
</FONT>

<!-- link2 "General" -->
<DIV align="left"><A NAME="048"></A></DIV>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides the legal framework
for D.R. Horton&#146;s acquisition of Schuler through the merger
of Schuler into D.R. Horton. It covers, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the effective time and effects of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">what Schuler stockholders will receive;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the treatment of outstanding Schuler options;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">representations and warranties of the parties;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">agreements as to what the parties must do and not
	do prior to the effective time of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">conditions that must be fulfilled before each
	party is obligated to complete the merger;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the circumstances under which the merger
	agreement may be terminated and the effect of termination.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sections briefly summarize each of
the above categories.
</FONT>

<!-- link2 "Effective Time" -->
<DIV align="left"><A NAME="049"></A></DIV>

<P align="left">
<B><FONT size="2">Effective Time</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger will become effective when a
certificate of merger is filed with the Secretary of State of
Delaware. This is expected to occur within two business days
after satisfaction or waiver of the conditions to the
obligations of the parties specified in the merger agreement,
but that day may be changed by mutual agreement of the parties.
It is likely the last substantive condition to be fulfilled will
be obtaining the votes at the stockholder meetings that are the
subject of this Joint Proxy Statement/ Prospectus. Therefore, it
is likely that the latest time at which the merger will be
effective will be within two business days after the day on
which the D.R.&nbsp;Horton and Schuler stockholders meetings are
held. At the effective time of the merger, Schuler will be
merged into D.R.&nbsp;Horton, and the separate corporate
existence of Schuler will cease. D.R.&nbsp;Horton will be the
surviving corporation in the merger.
</FONT>

<!-- link2 "Corporation Organization and Governance" -->
<DIV align="left"><A NAME="050"></A></DIV>

<P align="left">
<B><FONT size="2">Corporation Organization and
Governance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the merger, the certificate of
incorporation of D.R. Horton, as in effect immediately prior to
the effective time of the merger, will become the certificate of
incorporation of the surviving corporation, and the bylaws of
D.R. Horton, as in effect immediately prior to the effective
time of the merger, will become the bylaws of the surviving
corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The directors and officers of D.R. Horton will,
upon completion of the merger, become the directors and officers
of the surviving corporation, in each case until their
respective successors are duly elected or appointed and
qualified. In addition, James K. Schuler will become a Senior
Vice President of D.R.&nbsp;Horton, and President of
D.R.&nbsp;Horton&#146;s Schuler Homes region. Mr.&nbsp;Craig
Manchester will become a Vice President of D.R.&nbsp;Horton and
the Chief Operating Officer of D.R.&nbsp;Horton&#146;s Schuler
Homes region.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement requires D.R.&nbsp;Horton to
use its best efforts to cause the appointment or nomination and
election of Mr.&nbsp;Schuler as a director of D.R.&nbsp;Horton
at the effective time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the merger, each share of Schuler common
stock held in the treasury of Schuler and each share of Schuler
common stock owned by D.R.&nbsp;Horton or any direct or indirect
wholly-owned subsidiary of Schuler or D.R.&nbsp;Horton
immediately prior to the effective time of the merger will cease
to be outstanding,
</FONT>

<P align="center"><FONT size="2">64
</FONT>

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<DIV align="left">
<FONT size="2">and those shares will not be converted to a right
to receive the merger consideration. Each share of
D.R.&nbsp;Horton common stock issued and outstanding immediately
prior to the effective time will continue to be issued and
outstanding common stock of the surviving corporation, and each
certificate representing shares of D.R.&nbsp;Horton common stock
will continue to represent the same number of shares of common
stock of the surviving corporation.
</FONT>
</DIV>

<!-- link2 "Merger Consideration" -->
<DIV align="left"><A NAME="051"></A></DIV>

<P align="left">
<B><FONT size="2">Merger Consideration</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if the merger is completed, each share of Schuler Class&nbsp;A
common stock and Class&nbsp;B common stock outstanding
immediately prior to the effective time of the merger will be
canceled and converted into the right to receive the merger
consideration. The base merger consideration for each share of
Schuler common stock will consist of a combination of $4.09 in
cash and a fraction of a share of D.R.&nbsp;Horton common stock,
determined as set forth below. Alternatively, a Schuler
stockholder may elect to receive the merger consideration in the
form of all cash or all D.R.&nbsp;Horton common stock, but that
election will be subject to proration. A Schuler stockholder
cannot make an election for less than all of his or her shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Both the total cash portion of the merger
consideration and the total number of shares of D.R.&nbsp;Horton
common stock to be issued as merger consideration will be fixed.
The total amount of cash that D.R.&nbsp;Horton will pay as part
of the merger consideration is equal to the product of $4.09
multiplied by the number of shares of Schuler common stock
outstanding, other than dissenting shares, immediately prior to
the effective time of the merger, unless D.R.&nbsp;Horton elects
to increase the cash portion of the merger consideration if the
average closing price for D.R.&nbsp;Horton common stock were to
fall below $16.00. If D.R.&nbsp;Horton elects to increase the
cash portion of the merger consideration, the total amount of
cash that D.R.&nbsp;Horton would pay as part of the merger
consideration would equal the product of $4.09 plus the
increased per share cash amount multiplied by the number of
shares of Schuler common stock outstanding, other than
dissenting shares, immediately prior to the effective time of
the merger. The total number of shares of D.R.&nbsp;Horton
common stock issued as merger consideration will be determined
in the manner set forth below as if each stockholder had elected
to receive the base merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The base merger consideration for each share of
Schuler common stock will consist of $4.09 in cash and the
following number of shares of D.R.&nbsp;Horton common stock,
based on the average closing price of D.R.&nbsp;Horton common
stock as reported for NYSE composite transactions for the 15
trading days ending on, and including, the third trading day
prior to the Schuler stockholder meeting:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Total Amount of Base Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Consideration for Each Share of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Common Stock Consisting of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Average Closing Price</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">$4.09 in Cash and Shares of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">of D.R.&nbsp;Horton</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Common Stock at</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Issued for Each Schuler Share</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">the Average Closing Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$27.51 or higher
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.487&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49 or higher
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$23.51 to $27.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $13.395 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$17.49
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$19.50 to $23.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.570&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21 to $17.49
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$17.51 to $19.49
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fraction of a share equal to the quotient
	obtained by dividing $11.115 by the average closing price of
	D.R.&nbsp;Horton common stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$15.21
	</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.00 to $17.50
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">0.635&nbsp;shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">$14.25 to $15.20
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the average closing price of D.R.&nbsp;Horton
common stock determined as set forth above is less than $16.00,
the total amount of the merger consideration per share of
Schuler common stock would be less than $14.25. However, in that
event, Schuler can terminate the merger agreement, unless
D.R.&nbsp;Horton makes an election to increase the cash portion
of the merger consideration or the stock portion of the
</FONT>

<P align="center"><FONT size="2">65
</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">merger consideration, or both, so that the amount
of the base merger consideration for each share of Schuler
common stock equals at least $14.25, consisting of cash and
shares of D.R.&nbsp;Horton common stock at the average closing
price. Schuler is unable to determine currently whether it would
exercise its right to terminate the merger agreement in that
event. Schuler believes that any decision to terminate the
merger agreement should be based on the facts and circumstances
existing at the time the decision is required, including then
current market conditions in the homebuilding industry in
general, and with respect to D.R. Horton and Schuler in
particular. If the total amount of the merger consideration
falls below $14.25, Schuler will announce whether it will
exercise its right to terminate the merger agreement in the
press release announcing the determination of the merger
consideration. Schuler does not currently intend to resolicit
proxies if it does not exercise its right to terminate. However,
because the announcement will be made not later than the opening
of business on the second trading day prior to the Schuler
stockholder meeting, Schuler stockholders may then submit or
revoke their proxies in accordance with the procedures described
in the section entitled &#147;Proxies,&#148; including
transmission by facsimile.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the adjustments, elections and
limitations described in this Joint Proxy Statement/ Prospectus,
if a Schuler stockholder makes an election to receive all cash,
each share of Schuler common stock held by the stockholder will
be converted into the right to receive cash in an amount equal
to the base merger consideration. Subject to such adjustments,
elections and limitations, if a Schuler stockholder makes an
election to receive all D.R.&nbsp;Horton common stock, each
share of the stockholder&#146;s Schuler common stock will be
converted into the right to receive the number of shares of
D.R.&nbsp;Horton common stock, valued using the average closing
price described above, equal to the base merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Elections to receive all cash or all
D.R.&nbsp;Horton common stock will be subject to proration,
since both the total amount of cash and the total number of
shares of D.R.&nbsp;Horton common stock will be fixed based on
the number of shares of Schuler common stock outstanding
immediately prior to the merger. For example, if a Schuler
stockholder elects to receive the merger consideration as all
cash, and either there have not been enough elections by other
stockholders for all D.R.&nbsp;Horton common stock, or some of
the Schuler stockholders have dissented from the merger, or
both, the Schuler stockholder electing all cash would receive a
prorated combination of cash and D.R.&nbsp;Horton common stock.
The cash portion would consist of an amount of cash per share
equal to the total cash portion of the merger consideration less
the cash paid to stockholders receiving the base merger
consideration and the cash allocated to dissenting stockholders,
divided by the number of shares of Schuler common stock for
which an all cash election has been made. In that example, the
remaining portion of the merger consideration would be paid in
shares of D.R.&nbsp;Horton common stock valued using the average
closing price described above, so that the total prorated
combination of cash and D.R.&nbsp;Horton common stock per share
of Schuler common stock equals the amount of the base merger
consideration. Notwithstanding the proration procedure, the
amount of cash that a Schuler stockholder electing all cash will
receive will not be less than $4.09&nbsp;per share of Schuler
common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In another example, if a Schuler stockholder
elects to receive all stock, and not enough Schuler stockholders
have elected to receive all cash, the stockholder electing to
receive all stock would receive for each share of Schuler common
stock cash equal to the total cash portion of the merger
consideration minus the aggregate amount of cash payable with
respect to the shares for which an all cash election has been
made and the shares receiving the base merger consideration and
the cash allocated to dissenting stockholders, divided by the
number of shares for which an all stock election has been made.
The remaining portion of the merger consideration would be paid
in shares of D.R.&nbsp;Horton common stock valued using the
average closing price described above so that the total amount
of cash and prorated stock would equal the amount of the base
merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, except when
D.R.&nbsp;Horton has made an election to adjust the base merger
consideration up to $14.25 to avoid termination of the merger
agreement, if more than 50% of the total value of the merger
consideration for all the outstanding shares of Schuler common
stock would be cash, the cash which a holder of a share of
Schuler common stock will receive will be reduced on a pro rata
basis with all other such holders to the amount such that 50% of
the total value of the merger consideration will be cash,
treating all stockholders who give Schuler a timely and proper
notice of intention to exercise appraisal rights as receiving
cash merger consideration and treating for this purpose
</FONT>

<P align="center"><FONT size="2">66
</FONT>
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<DIV align="left">
<FONT size="2">the D.R.&nbsp;Horton common stock received as
having a value per share equal to the closing price of
D.R.&nbsp;Horton common stock for NYSE composite transactions on
the closing date. The holders of Schuler common stock will
receive in exchange for such reduction in cash an amount of
additional shares of D.R.&nbsp;Horton common stock obtained by
dividing the amount of such reduction in cash by the closing
price of D.R.&nbsp;Horton common stock on the closing date.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No fractional shares of D.R.&nbsp;Horton common
stock will be issued as merger consideration. Instead, any
fractional share that would be issued will be converted into
cash (without interest) equal to the per share closing price of
D.R.&nbsp;Horton common stock as reported for NYSE composite
transactions on the date of the merger multiplied by the
fraction of a share that would otherwise be issued.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each share of Schuler common stock that is issued
and outstanding immediately prior to the effective time of the
merger and that is held by a holder who has properly perfected
his or her rights to dissent from the merger and demanded to be
paid the &#147;fair value&#148; of his or her shares in
accordance with Delaware law will not be converted into or
exchangeable for cash or shares of D.R.&nbsp;Horton common
stock. Instead, the dissenting holder will be entitled to any
rights granted by Delaware law, and the surviving corporation
will make any payments to the dissenting holders in accordance
with Delaware law. If a holder fails to perfect or otherwise
effectively waives, withdraws or loses the right to dissent and
receive payment under Delaware law, or a court of competent
jurisdiction determines that the holder is not entitled to
relief under Delaware law, then the right of the holder to be
paid the fair value of the dissenting shares will cease to exist
and each share of Schuler common stock held by that holder will
be deemed to have been converted into the same combination of
cash, without interest, and shares of D.R.&nbsp;Horton common
stock as a holder of the same number of shares of Schuler common
stock receiving the base merger consideration.
</FONT>

<DIV>&nbsp;</DIV>

<!-- link2 "Election Procedure" -->
<DIV align="left"><A NAME="052"></A></DIV>

<DIV align="left">
<B><FONT size="2">Election Procedure</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exchange agent, American Stock Transfer &#38;
Trust Company, will mail separately from this Joint Proxy
Statement/ Prospectus an election form, including a letter of
transmittal, to holders of record of Schuler&#146;s common stock
as of the record date for the Schuler special meeting.
<B>Schuler stockholders who want to receive the base merger
consideration of cash and D.R. Horton common stock do not need
to make an election.</B> A Schuler stockholder may not make an
election for less than all of his or her shares. If shares of
Schuler common stock are held in &#147;street name&#148; through
a broker, the broker will mail the election form to the
beneficial owner with this Joint Proxy Statement/ Prospectus,
together with a letter of instructions for making an election.
Beneficial owners should read the election form together with
this Joint Proxy Statement/ Prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler stockholders who become stockholders
following the record date of the Schuler special meeting may
contact American Stock Transfer&nbsp;&#38; Trust Company by
calling toll-free at (800)&nbsp;937-5449, to receive an election
form and letter of transmittal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For an election to be effective, the election
form must be properly completed, and the electing Schuler
stockholder must send the form, together with all of the
stockholder&#146;s certificates, duly endorsed in blank or
otherwise in a form which is acceptable for transfer on the
books of Schuler or by appropriate guarantee of delivery as
described in the election form, to American Stock Transfer &#38;
Trust Company, the exchange agent, at one of the addresses
provided in the election form. The exchange agent must receive
the completed election form and stock certificates by
5:00&nbsp;p.m., New York City Time, on February&nbsp;20, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler stockholders can revoke their election
prior to 5:00&nbsp;p.m., New York City Time, on
February&nbsp;20, 2002 by sending written notice executed by the
Schuler stockholder to the exchange agent in accordance with the
instructions on the election form, or by transmitting an
executed notice of revocation by facsimile prior to the deadline
for revocation to the following telephone
number:&nbsp;(718)&nbsp;259-1144. If an election is properly
revoked, the exchange agent will treat the subject shares as
shares for which no election has been made, unless the Schuler
stockholder subsequently submits another properly completed
election form prior to the deadline for submission. Stock
certificates submitted with a form of election will be
automatically returned if the merger agreement is terminated.
</FONT>

<P align="center"><FONT size="2">67
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton will determine, or delegate to
the exchange agent to determine, whether election forms have
been properly completed, signed and submitted or revoked and may
disregard immaterial defects in election forms. If
D.R.&nbsp;Horton or the exchange agent determines that an
election was not properly made, the election will have no force
and effect and will be deemed to be a non-election. The decision
of D.R.&nbsp;Horton or the exchange agent in all these matters
will be conclusive and binding. Neither D.R.&nbsp;Horton nor the
exchange agent will be under any obligation to notify any
Schuler stockholder of any defect in his or her election form
submitted to the exchange agent. D.R.&nbsp;Horton will also
make, or delegate to the exchange agent to make, all
computations regarding proration of the kind of merger
consideration to be received by holders of shares of Schuler
common stock. D.R.&nbsp;Horton&#146;s or the exchange
agent&#146;s computations of the prorations will be conclusive
and binding on the Schuler stockholders.
</FONT>


<!-- link2 "Schuler Stock Options" -->
<DIV align="left"><A NAME="053"></A></DIV>

<P align="left">
<B><FONT size="2">Schuler Stock Options</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton will replace each outstanding option
to purchase Schuler common stock granted under Schuler&#146;s
Amended and Restated 2000 Stock Incentive Plan or Amended and
Restated 1992 Stock Option Plan, other than options granted to
non-employee directors of Schuler, with a comparable option to
purchase D.R. Horton common stock. The terms and conditions of
the replacement options will be comparable to the Schuler
options they are replacing, except that if the holder of a
replacement D.R. Horton option is involuntarily terminated as an
employee of D.R. Horton or any subsidiary, other than for cause,
death or disability, within six months after the effective time
of the merger, the D.R. Horton option will immediately vest and
become exercisable in full. In addition, one Schuler
executive&#146;s options will become fully vested and
exercisable at the effective time of the merger. Each D.R.
Horton replacement option will be exercisable for a number of
shares of D.R. Horton common stock equal to the number of shares
of Schuler common stock subject to the corresponding Schuler
option, multiplied by an exchange ratio, with an exercise price
per share equal to its exercise price per Schuler share, divided
by the exchange ratio. The exchange ratio in both cases will
equal the value of the base merger consideration per share of
Schuler common stock divided by the average closing price of
D.R. Horton common stock. Options granted to non-employee
directors of Schuler will accelerate and become fully vested and
exercisable, and subsequently terminate, upon consummation of
the merger. If non-employee directors of Schuler exercise their
options, they will receive the base merger consideration for the
shares of Schuler common stock received upon exercise of the
options.
</FONT>

<!-- link2 "Representations and Warranties" -->
<DIV align="left"><A NAME="054"></A></DIV>

<P align="left">
<B><FONT size="2">Representations and Warranties</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement contains, subject to
specified exceptions and qualifications, representations and
warranties by D.R. Horton and Schuler which are customary in
transactions of this type, including representations and
warranties with regard to the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">due organization, good standing and corporate
	power to operate their respective businesses;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">ownership of subsidiaries, due organization and
	good standing of such subsidiaries, necessary entity power to
	operate the respective businesses of such subsidiaries and other
	equity investments in other entities in excess of $100,000;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">capital structure and authorized, reserved and
	issued capital stock, stock options and similar securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">corporate authority to enter into the merger
	agreement and to consummate the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of conflicts or violations of the
	charter, bylaws, other agreements, judgments or applicable laws
	resulting from the merger agreement or the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">required governmental filings and consents;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">compliance with applicable laws or other
	agreements;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">possession of and compliance with all necessary
	government permits;
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">68
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the filing of required documents with the SEC and
	the accuracy of information contained in such documents;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the accuracy of information contained in
	financial statements;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of material changes or events;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of undisclosed liabilities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of material litigation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">employee benefit plan matters and the absence of
	material liabilities under and compliance with employee benefit
	plans and other compensation arrangements;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of material labor disputes;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">real property and real estate matters, including
	title in owned real property and rights to acquire real property;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">tax matters;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">possession of and compliance with all necessary
	environmental permits and the absence of material environmental
	liabilities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">insurance matters;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">opinion of financial advisors;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">use of brokers, finders and investment
	bankers;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">actions affecting the tax treatment of the merger
	as a reorganization within the meaning of Section&nbsp;368(a) of
	the Internal Revenue Code.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Schuler has made representations and
warranties in the merger agreement relating to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">obligations to issue capital stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">material contracts;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of material restrictions on business
	activities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">ownership or rights to use intellectual property;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of interested party transactions that
	would be required to be reported under the federal securities
	laws;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence or inapplicability of restrictions on
	business combinations under Section&nbsp;203 of the Delaware
	General Corporation Law and of state takeover statutes;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the identity of affiliates of Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the required vote of stockholders to adopt the
	merger agreement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the effect of the merger on the tax treatment of
	prior transactions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, D.R. Horton has made representations
and warranties in the merger agreement relating to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">its ability to issue and deliver shares of D.R.
	Horton common stock in the merger;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">its ability to pay the cash component of the
	merger consideration and the debt obligations of Schuler
	resulting from the merger.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Actions of Schuler and D.R. Horton Prior to the Merger" -->
<DIV align="left"><A NAME="055"></A></DIV>

<P align="left">
<B><FONT size="2">Actions of Schuler and D.R. Horton Prior to
the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement contains covenants with
respect to the conduct of the businesses of Schuler and D.R.
Horton between the date of the merger agreement and completion
of the merger.
</FONT>

<P align="center"><FONT size="2">69
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conduct of Business by Schuler Pending the
Merger. </FONT></I><FONT size="2">Schuler has agreed that,
between the date of the merger agreement and the closing of the
merger, it will conduct its business in the ordinary course in a
manner consistent with past practice and use reasonable
commercial efforts to preserve substantially intact its business
organization, to keep available the services of its present
officers, employees and consultants and to preserve its present
relationships with customers, suppliers and other persons with
which it has significant business relations. In addition, the
merger agreement limits Schuler&#146;s ability, without D.R.
Horton&#146;s prior consent, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">amend its certificate of incorporation or bylaws
	or the organizational documents of any subsidiary;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">issue, sell, pledge, dispose of or encumber, or
	authorize the issuance, sale, pledge, disposition or encumbrance
	of, any shares of capital stock, or any options or other rights
	to acquire any shares of capital stock, or any other ownership
	interest in Schuler, except for the issuance of shares of
	Schuler common stock pursuant to any previously granted stock
	option;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sell, pledge, dispose of or encumber any of its
	assets, except:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sales of assets in the ordinary course of
	business in a manner consistent with past practice,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">dispositions of obsolete or worthless assets,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">sales of immaterial assets not to exceed $250,000
	individually,&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">liens on assets to secure purchase money and
	construction financings in the ordinary course of business
	consistent with past practice or arising under its existing
	revolving and warehouse lines of credit and other encumbrances
	entered into in the ordinary course of business consistent with
	past practice;
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">declare, set aside, make or pay any dividend or
	other distribution in respect of any of its capital stock,
	except a wholly owned subsidiary may declare and pay a dividend
	or make advances to its parent or Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">split, combine or reclassify any of its capital
	stock or issue or authorize or propose the issuance of any other
	securities in respect of, in lieu of or in substitution for
	shares of its capital stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">amend the terms or change the period of
	exercisability of, purchase, repurchase, redeem or otherwise
	acquire, or permit any subsidiary to purchase, repurchase,
	redeem or otherwise acquire, any of its securities, including
	shares of Schuler common stock or any option, warrant or right
	to acquire shares of Schuler common stock, or propose to do any
	of the foregoing;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">acquire by merger, consolidation, or acquisition
	of stock or assets any corporation, partnership or other
	business organization or division thereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">incur or guarantee any indebtedness for borrowed
	money or issue any debt securities, except under existing lines
	of credit in the ordinary course of business consistent with
	past practice, or make any loans other than loans to or from its
	subsidiaries or pursuant to existing contracts or contracts for
	the acquisition or development of land entered into in the
	ordinary course of business consistent with past practice;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">enter into or amend any agreement, other than in
	the ordinary course of business consistent with past practice,
	that is or would be a material contract under the merger
	agreement or is otherwise material to Schuler and its
	subsidiaries taken as a whole;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">authorize any capital expenditures or purchase of
	fixed assets which are, in the aggregate, in excess of $100,000
	individually or $1,000,000 in the aggregate, other than the
	purchase of land in the ordinary course of business consistent
	with past practice;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">increase the compensation payable or to become
	payable to its officers or employees, grant any severance or
	termination pay to, or enter into any employment or severance
	agreement with any director, officer or other employee of
	Schuler or any subsidiary except as may be required by law and
	except increases in annual compensation for employees in the
	ordinary course consistent with
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">70
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">past practice to the extent such compensation
	increases do not result in a material increase in compensation
	expense to Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">establish, adopt, enter into or amend any
	collective bargaining, bonus, profit sharing, thrift,
	compensation, stock option, restricted stock, pension,
	retirement, deferred compensation, employment, termination,
	severance or other plan, agreement, trust, fund, policy or
	arrangement for the benefit of any current or former directors,
	officers or employees;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">change accounting policies or procedures,
	including procedures with respect to revenue recognition,
	payments of accounts payable and collection of accounts
	receivable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">except for the filing pursuant to
	Section&nbsp;341(f) of the Internal Revenue Code described in
	&#147;United States Federal Income Tax Consequences of the
	Merger&nbsp;&#151; Consequences to D.R. Horton and
	Schuler,&#148; make any material tax election or settle any
	material tax liability;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">take any action which would make any of its
	representations or warranties incorrect in any material respect
	or prevent Schuler from performing in any material respect its
	covenants.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conduct of Business by D.R. Horton Pending the
Merger.</FONT></I><FONT size="2"> D.R. Horton has agreed that,
between the date of the merger agreement and the closing of the
merger, it will conduct its business in the ordinary course. In
addition, the merger agreement limits D.R. Horton&#146;s
ability, without Schuler&#146;s prior consent, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">amend its certificate of incorporation or bylaws
	other than incident to a stock split or combination;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">declare, set aside, make or pay any dividend or
	other distribution in respect of any of its capital stock,
	except for quarterly cash dividends and stock dividends and
	except that a subsidiary may declare and pay a dividend to its
	parent or D.R. Horton;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reclassify its common stock or issue or authorize
	or propose the issuance of any other securities in respect of,
	in lieu of or in substitution for shares of its common stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">acquire any corporation, partnership or other
	business organization or division thereof if the transaction
	would prevent or materially delay the consummation of the
	transactions contemplated by the merger agreement or if the
	amount of consideration paid exceeds $350&nbsp;million;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">issue any shares of D.R. Horton common stock,
	except pursuant to stock options issued under D.R. Horton stock
	option plans or in any stock dividend, if the shares so issued
	constitute more than 15% of the outstanding shares of D.R.
	Horton common stock after giving effect to the issuance;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">take any action which would make any of its
	representations and warranties incorrect in any material respect
	or prevent D.R. Horton from performing in any material respect
	its covenants.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">No Solicitation.</FONT></I><FONT size="2"> The
merger agreement requires Schuler, its subsidiaries and its
officers, directors, employees, representatives and agents to
cease any discussions with any parties with respect to any third
party acquisition. It also requires that Schuler, its
subsidiaries and its officers, directors, employees,
representatives and agents will not participate in any
discussions or provide any non-public information to any person,
other than to D.R. Horton or any designees of D.R. Horton,
concerning any third party acquisition, except that Schuler may:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">comply with Rules&nbsp;14d-9 and 14e-2 of the
	Exchange Act with regard to any tender offer or exchange
	offer;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make inquiry of and participate in discussions
	with any person or group who has submitted after the date of the
	merger agreement an unsolicited and unencouraged superior
	proposal if, and to the extent, the Schuler board determines in
	its good faith judgment, after consultation with and advice from
	outside legal counsel, that it is necessary to do so to comply
	with its fiduciary duties.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">71
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the merger agreement, a third party
acquisition is defined as the occurrence of any of the following
events:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the acquisition of Schuler by merger or otherwise
	by any third party, which is any person other than D.R. Horton
	or its affiliates;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the acquisition by a third party of all or
	substantially all the assets of Schuler and its subsidiaries
	taken as a whole;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the acquisition by a third party of a significant
	equity interest in Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the adoption by Schuler of a plan of liquidation
	or the declaration or payment of an extraordinary dividend;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the repurchase by Schuler or any of its
	subsidiaries of a significant equity interest in Schuler or any
	of its subsidiaries; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other business combination, acquisition,
	recapitalization, restructuring or other similar transaction
	involving Schuler or its subsidiaries.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the merger agreement, a superior proposal
is defined as any bona fide proposal to acquire directly or
indirectly for consideration consisting of cash or securities
more than 50% of the voting power of shares of Schuler common
stock then outstanding or all or substantially all the assets of
Schuler and otherwise on terms which the Schuler board
determines in its good faith judgment, after consulting with a
financial advisor of nationally recognized reputation,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to be from a third party that is financially
	capable of completing the transaction subject to the
	proposal&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to provide, if completed, greater value and to be
	more favorable to Schuler&#146;s stockholders than the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the merger agreement, the Schuler board may
not withdraw or, in any manner adverse to D.R. Horton, modify
its recommendation of the transactions contemplated by the
merger agreement or approve or recommend, or cause Schuler to
enter into any agreement with respect to, any third party
acquisition unless the Schuler board of directors determines in
its good faith judgment, after consultation with and advice from
outside legal counsel, that it is necessary to do so in order to
comply with its fiduciary duties. In that event, the Schuler
board may withdraw or modify its recommendation of the
transactions contemplated by the merger agreement or approve or
recommend a superior proposal, but in each case only after:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">providing reasonable written notice to D.R.
	Horton advising D.R. Horton that it has received a superior
	proposal, specifying the material terms and conditions of the
	superior proposal and identifying the person making the superior
	proposal,&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R. Horton does not, within three business days
	of receipt of the notice, make an offer which the board
	determines in its good faith judgment, after consultation with a
	financial adviser of nationally recognized reputation, to
	provide as great a value and to be as favorable to Schuler
	stockholders as the superior proposal.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Meetings of
Stockholders.</FONT></I><FONT size="2"> Under the merger
agreement, both Schuler and D.R. Horton have agreed to take all
necessary action to call, give notice of, convene and hold
meetings of stockholders as soon as practicable after the
effectiveness of the registration statement of which this Joint
Proxy Statement/ Prospectus is a part, for the purpose of
approving and adopting the merger agreement, the merger and the
other contemplated transactions. The Schuler board and the D.R.
Horton board have voted to recommend such approval and adoption
and use their respective reasonable good faith efforts to obtain
such approval and to take all lawful action to solicit such
approvals. However, the Schuler board may withdraw or, in a
manner adverse to D.R. Horton, modify its recommendation upon
its approval of a superior proposal in the
</FONT>

<P align="center"><FONT size="2">72
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">manner described in &#147;The Merger
Agreement&nbsp;&#151; Actions of Schuler and D.R. Horton Prior
to the Merger&nbsp;&#151; <I>No Solicitation.&#148;</I>
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Tax-Free Reorganization
Treatment.</FONT></I><FONT size="2"> Under the merger agreement,
both Schuler and D.R. Horton have agreed not to take or cause to
be taken any action which would prevent the merger from
qualifying as a &#147;reorganization&#148; under
Section&nbsp;368(a) of the Internal Revenue Code.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Registration
Statement.</FONT></I><FONT size="2"> The merger agreement
provides that D.R. Horton shall:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">prepare and file with the SEC and any other
	applicable regulatory bodies a registration statement on
	Form&nbsp;S-4 with respect to the shares of the D.R. Horton
	common stock to be issued in the merger, and give Schuler and
	its counsel a reasonable opportunity to review and comment on
	the registration statement prior to its filing with the SEC;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">promptly amend or supplement the registration
	statement to the extent necessary in order to make the
	statements therein not misleading or to correct any statements
	which have become false or misleading;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">use its reasonable best efforts to cause the
	registration statement to be declared effective and to maintain
	such effectiveness as long as is necessary to consummate the
	merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">use its reasonable best efforts to cause the
	shares of D.R. Horton common stock to be registered or qualified
	under all applicable securities or blue sky laws of each of the
	states and territories of the United States, and to take any
	other actions which may be necessary to enable the D.R. Horton
	common stock to be distributed in each such
	jurisdiction;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">file a subsequent listing application with the
	New York Stock Exchange relating to the shares of D.R. Horton
	common stock to be issued in connection with the merger, and use
	reasonable best efforts to cause such shares of D.R. Horton
	common stock to be listed prior to the closing date.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Schuler must furnish all information
that D.R. Horton reasonably requests for inclusion in the
registration statement, the proxy statement and otherwise
cooperate with D.R. Horton in the preparation and filing of such
documents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other Covenants and
Agreements.</FONT></I><FONT size="2"> The merger agreement also
provides that each of D.R. Horton and Schuler must:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">give representatives of the other party access to
	its properties, books, contracts, commitments and records;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">make available to the other the appropriate
	individuals, including attorneys, accountants and other
	professionals, for discussion of the other&#146;s business,
	properties and personnel;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">give prompt notice to the other of any event
	which would be likely to cause any representation or warranty
	contained in the merger agreement to be untrue or inaccurate the
	result of which would be a material adverse effect to Schuler or
	D.R.&nbsp;Horton, as applicable, or any failure to materially
	comply with any covenant, condition or agreement under the
	merger agreement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">consult with each other before issuing any press
	release with respect to the merger.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Conditions to the Completion of the Merger" -->
<DIV align="left"><A NAME="056"></A></DIV>

<P align="left">
<B><FONT size="2">Conditions to the Completion of the
Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Both Parties.</FONT></I><FONT size="2"> The
obligations of D.R.&nbsp;Horton and Schuler to complete the
merger are subject to satisfaction or waiver of the following
conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of any court or governmental order or
	other legal restraint that prohibits the merger and the absence
	of any statute, rule, regulation or order which makes
	consummation of the merger illegal;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the absence of any action, proceeding, judgment,
	decree or order seeking to prohibit or limit D.R.&nbsp;Horton
	from exercising all material rights and privileges pertaining to
	its ownership of the
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">73
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">assets of Schuler and its subsidiaries or the
	ownership or operation by D.R.&nbsp;Horton of the business or
	assets of the surviving corporation, or seeking to compel
	D.R.&nbsp;Horton to dispose of or hold separate any material
	portion of the business or assets of the surviving corporation
	as a result of the merger or the transactions contemplated by
	the merger agreement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">approval of the merger by the holders of a
	majority of the outstanding shares of D.R.&nbsp;Horton common
	stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">approval of the merger by the holders of a
	majority of the outstanding shares of Schuler common stock, and
	the holders of a majority of the Class&nbsp;A common stock and
	Class&nbsp;B common stock, each voting as a separate class;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the listing of D.R.&nbsp;Horton common stock
	issuable in connection with the merger on the NYSE;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the registration statement being declared
	effective under federal and state securities laws and the
	absence of any stop order or any pending proceeding seeking a
	stop order with respect to the registration statement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the parties having obtained or made all consents,
	authorizations, orders and approvals of, and filings and
	registrations with, any governmental authority, the absence of
	which would have a material adverse effect on the surviving
	corporation, D.R.&nbsp;Horton, any D.R.&nbsp;Horton subsidiary
	or any Schuler subsidiary, except for filings in connection with
	the merger and any other documents required to be filed after
	the effective time.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Schuler. </FONT></I><FONT size="2">The
obligations of Schuler to complete the merger are subject to
satisfaction or waiver of the following conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the material accuracy of D.R.&nbsp;Horton&#146;s
	representations and warranties at the time of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the performance by D.R.&nbsp;Horton of its
	obligations under the merger agreement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receipt of a certificate of a D.R.&nbsp;Horton
	officer certifying the fulfillment of the above
	conditions;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receipt of an opinion from Gibson,
	Dunn&nbsp;&#38; Crutcher LLP confirming that the merger will
	constitute a reorganization within the meaning of
	Section&nbsp;368(a) of the Internal Revenue Code.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">D.R.&nbsp;Horton.</FONT></I><FONT size="2">
The obligations of D.R.&nbsp;Horton to complete the merger are
subject to satisfaction or waiver on or before the completion of
the merger of the following conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the material accuracy of Schuler&#146;s
	representations and warranties at the time of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the performance by Schuler of its obligations
	under the merger agreement;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receipt of a certificate of a Schuler officer
	certifying the fulfillment of the above conditions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receipt of an opinion from Gibson,
	Dunn&nbsp;&#38; Crutcher LLP confirming that the merger will
	constitute a reorganization within the meaning of
	Section&nbsp;368(a) of the Internal Revenue Code;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receipt of executed affiliate agreements;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the aggregate number of dissenting shares not
	exceeding 8% of the total number of shares of Schuler common
	stock outstanding at the effective time.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">74
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Termination of the Merger Agreement" -->
<DIV align="left"><A NAME="057"></A></DIV>

<P align="left">
<B><FONT size="2">Termination of the Merger Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement may be terminated:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">by mutual written consent of D.R.&nbsp;Horton and
	Schuler;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">by either D.R.&nbsp;Horton or Schuler:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if, upon a vote at a duly held meeting of
	stockholders or any adjournment thereof, any required approval
	of the holders of the Schuler common stock shall not have been
	obtained;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the merger is not consummated on or before
	April&nbsp;30, 2002, unless the failure to consummate the merger
	is the result of a willful and material breach of the merger
	agreement by the party seeking to terminate the merger
	agreement, or all of the terminating party&#146;s conditions to
	closing have been satisfied and any condition to closing of the
	other party is not capable of being satisfied prior to
	April&nbsp;30, 2002;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if a court of competent jurisdiction or
	governmental, regulatory or administrative agency or commission
	shall have issued a nonappealable final order, decree or ruling
	or taken any other action having the effect of permanently
	restraining, enjoining or otherwise prohibiting the merger,
	provided that the right to terminate the merger agreement under
	this provision is not available to any party who has not
	complied with its obligations to use all reasonable efforts to
	take all actions and other things necessary, proper or advisable
	to consummate as promptly as practicable the merger, to obtain
	in a timely manner all material waivers, consents and approvals
	and to effect all necessary registrations and filings, and
	otherwise to satisfy in all material respects all conditions
	precedent to its obligations under the merger agreement, and
	that noncompliance materially contributed to the issuance of any
	such order, decree or ruling or the taking of such action;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the other party commits a terminating breach,
	which is defined in the merger agreement as when the party
	materially breaches any representation, warranty, covenant or
	other agreement contained in the merger agreement and the
	terminating party is not then in material breach of any
	representation, warranty, covenant or other agreement contained
	in the merger agreement. Notwithstanding the foregoing, in the
	case of a covenant or agreement, if such terminating breach is
	curable by Schuler or D.R.&nbsp;Horton, as the case may be,
	through the exercise of its reasonable efforts and for so long
	as Schuler or D.R.&nbsp;Horton, as the case may be, continues to
	exercise reasonable efforts, neither D.R.&nbsp;Horton nor
	Schuler, respectively, can terminate the merger agreement for
	the reason described in this paragraph;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if, upon a vote at a duly held meeting of
	stockholders or any adjournment thereof, any required approval
	of the holders of the D.R.&nbsp;Horton common stock has not been
	obtained.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">by Schuler:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the Schuler board has received a superior
	proposal and, after the Schuler board determines in its good
	faith judgment, after consultation with and advice from outside
	legal counsel, that it is necessary to do so in order to comply
	with its fiduciary duties, withdraws or, in a manner adverse to
	D.R.&nbsp;Horton, modifies its recommendation of the
	transactions contemplated by the merger agreement or approves or
	recommends the superior proposal, and the Schuler board complies
	with the applicable provisions described in &#147;The Merger
	Agreement&nbsp;&#151; Actions of Schuler and D.R.&nbsp;Horton
	Prior to the Merger&nbsp;&#151; <I>No Solicitation,&#148;</I>
	and, prior to such termination, pays the termination fee and
	otherwise complies with the provisions described in &#147;The
	Merger Agreement&nbsp;&#151; Termination Fee and Expenses.&#148;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the average closing price of D.R.&nbsp;Horton
	common stock, as determined according to the merger agreement,
	is less than $16.00, unless prior to the closing date
	D.R.&nbsp;Horton elects to increase the amount of cash or
	D.R.&nbsp;Horton common stock, or both, constituting the merger
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">75
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">consideration so that the amount of the base
	merger consideration for each share of Schuler common stock
	equals at least $14.25.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">by D.R.&nbsp;Horton:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the Schuler board recommends to the Schuler
	stockholders a superior proposal, or the Schuler board withdraws
	or, in a manner adverse to D.R.&nbsp;Horton, modifies its
	recommendation of the transactions contemplated by the merger
	agreement. Notwithstanding the foregoing, any disclosure that
	the Schuler board is compelled to make of the receipt of a
	proposal for a third party acquisition in order to comply with
	Rule&nbsp;14d-9 or 14e-2 of the Exchange Act will not in and of
	itself constitute the withdrawal or modification of the Schuler
	board&#146;s recommendation if such disclosure states that no
	action will be taken by the Schuler board with respect to the
	withdrawal or modification of its recommendation of the
	transactions contemplated by the merger agreement or the
	approval or recommendation of any third party acquisition except
	as described in the provisions described in &#147;The Merger
	Agreement&nbsp;&#151; Actions of Schuler and D.R.&nbsp;Horton
	Prior to the Merger&nbsp;&#151; <I>No Solicitation.&#148;</I>
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Termination Fees and Expenses" -->
<DIV align="left"><A NAME="058"></A></DIV>

<P align="left">
<B><FONT size="2">Termination Fees and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, D.R.&nbsp;Horton and Schuler will each
pay their own expenses in connection with the merger. However,
the merger agreement provides that Schuler is required to pay to
D.R.&nbsp;Horton a termination fee in the amount of
$34&nbsp;million immediately upon the occurrence of any of the
following events:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton terminates the merger agreement
	because the Schuler board recommended to the Schuler
	stockholders a superior proposal, or the Schuler board has
	withdrawn or, in a manner adverse to D.R.&nbsp;Horton, has
	modified its recommendation of the merger agreement or the
	merger as described in &#147;The Merger Agreement-Termination of
	the Merger Agreement.&#148;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler terminates the merger agreement because
	the Schuler board has received a superior proposal, which the
	Schuler board determines in its good faith judgment, after
	consultation with and advice from outside counsel, that it is
	necessary to do so in order to comply with its fiduciary duties,
	withdraws or, in a manner adverse to D.R.&nbsp;Horton, modifies
	its recommendation of the merger or approves or recommends such
	superior proposal as described in &#147;The Merger
	Agreement&nbsp;&#151; Termination of the Merger Agreement.&#148;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton terminates the merger agreement
	pursuant to a terminating breach by Schuler and within twelve
	months thereafter Schuler enters into an agreement with respect
	to a third party acquisition or a third party acquisition occurs.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Either party terminates the merger agreement
	pursuant to its right to do so because the required approval of
	the holders of Schuler common stock is not obtained, and within
	twelve months thereafter Schuler enters into an agreement with
	respect to a third party acquisition or a third party
	acquisition occurs.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, promptly after any of the events
described above, Schuler must reimburse D.R.&nbsp;Horton up to
$3&nbsp;million of all documented out-of-pocket expenses and
fees, including fees payable to all banks, investment banking
firms and other financial institutions, and their respective
agents and counsel, and all fees of counsel, accountants,
financial printers, experts and consultants to D.R.&nbsp;Horton
in connection with the merger and the consummation of all
transactions contemplated by the merger agreement less any
amounts paid as described in the following paragraph.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event the merger agreement is terminated
by D.R.&nbsp;Horton or Schuler pursuant to its right to do so
because the required approval of the holders of Schuler common
stock has not been obtained, and at the time of termination D.R.
Horton is not in breach of its material obligations, Schuler
must, promptly after the termination of the merger agreement,
reimburse D.R.&nbsp;Horton up to $3&nbsp;million of all
documented out-of-pocket expenses and fees, including fees
payable to all banks, investment banking firms and other
financial institutions, and their respective agents and counsel,
and all fees of counsel, accountants, financial
</FONT>

<P align="center"><FONT size="2">76
</FONT>

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<DIV align="left">
<FONT size="2">printers, experts and consultants to
D.R.&nbsp;Horton in connection with the merger and the
consummation of all transactions contemplated by the merger
agreement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event the merger agreement is terminated
by Schuler pursuant to its right to do so because the required
approval of the holders of D.R.&nbsp;Horton common stock has not
been obtained, and at the time of termination Schuler is not in
breach of its material obligations, D.R.&nbsp;Horton must,
promptly after the termination of the merger agreement,
reimburse Schuler up to $3&nbsp;million of all documented
out-of-pocket expenses and fees, including fees payable to all
banks, investment banking firms and other financial
institutions, and their respective agents and counsel, and all
fees of counsel, accountants, financial printers, experts and
consultants to Schuler in connection with the merger and the
consummation of all transactions contemplated by the merger
agreement.
</FONT>

<!-- link2 "Effect of Termination" -->
<DIV align="left"><A NAME="059"></A></DIV>

<P align="left">
<B><FONT size="2">Effect of Termination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event the merger agreement is terminated
as described above, the merger agreement will become void and
have no effect, without any liability or obligation other than
the provisions described in the section &#147;The Merger
Agreement&nbsp;&#151; Termination Fees and Expenses,&#148;
unless such termination results from the willful and material
breach by a party of any of its representations, warranties,
covenants or other agreements in the merger agreement, in which
event the terminating party will keep its rights and remedies
against such other party in respect of such other party&#146;s
breach.
</FONT>

<!-- link2 "Amendments" -->
<DIV align="left"><A NAME="060"></A></DIV>

<P align="left">
<B><FONT size="2">Amendments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement may be amended by an
agreement in writing signed by both D.R.&nbsp;Horton and Schuler
at any time before or after the merger is approved by the
D.R.&nbsp;Horton and Schuler stockholders. After the merger is
approved, no amendment may be made which, by law or in
accordance with the rules of any relevant stock exchange, would
require further approval by the D.R.&nbsp;Horton and Schuler
stockholders unless D.R.&nbsp;Horton and Schuler obtain that
approval.
</FONT>

<!-- link2 "Compensation and Benefits" -->
<DIV align="left"><A NAME="061"></A></DIV>

<P align="left">
<B><FONT size="2">Compensation and Benefits</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton will allow the persons who are
employees of Schuler and any of its subsidiaries immediately
prior to the effective time of the merger to participate,
immediately after the effective time of the merger, in all of
the benefit plans, programs and policies sponsored by
D.R.&nbsp;Horton for the benefit of its employees generally, to
the extent they would otherwise be eligible under such plans, at
the same benefit levels as are generally applicable to other
similarly situated employees of D.R.&nbsp;Horton.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton will give such employees
day-for-day credit for all of their service prior to the
effective time with Schuler and Schuler subsidiaries under all
employee benefit plans, programs and policies sponsored by
D.R.&nbsp;Horton for the benefit of employees generally, other
than for benefit accrual purposes or early retirement subsidies.
In addition, credit for past service will not apply for vesting
under the D.R.&nbsp;Horton, Inc. Stock Tenure Plan. Except as
provided above, prior service will be credited for both
eligibility and vesting purposes, and for purposes of any
non-pension benefit schedule based on service, e.g. for vacation
pay, sick days and personal days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton will not be required to continue
the employment or position of any specific person, and
D.R.&nbsp;Horton may amend, modify or terminate any employee
benefit plans after the effective time of the merger consistent
with the terms of such plans and applicable law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified by D.R.&nbsp;Horton,
Schuler and its subsidiaries will terminate all tax-qualified
retirement plans immediately prior to the closing date. In
addition, Schuler and its subsidiaries will freeze all employee
benefit plans, other than employee welfare plans, as of the
closing date, although account balances in the Schuler deferred
compensation plan will continue to accrue earnings and
D.R.&nbsp;Horton may continue Schuler&#146;s incentive bonus
plan.
</FONT>

<P align="center"><FONT size="2">77
</FONT>

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<!-- link2 "Schuler Directors&#146; and Officers&#146; Insurance and Indemnification" -->
<DIV align="left"><A NAME="062"></A></DIV>

<P align="left">
<B><FONT size="2">Schuler Directors&#146; and Officers&#146;
Insurance and Indemnification</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement requires D.R.&nbsp;Horton to
keep in effect, for at least six years, directors&#146; and
officers&#146; liability insurance policies (through the
continuation or endorsement of Schuler&#146;s existing policy or
the purchase of a &#147;tail-end&#148; rider permitted by such
policy) having the same coverage and containing terms and
conditions no less advantageous to the persons covered by the
policies currently in effect. D.R.&nbsp;Horton will not,
however, be required to pay more than 200% of the annual premium
paid relating to the year in which the merger agreement was
executed. If D.R.&nbsp;Horton is not able to maintain the
required insurance for that amount, D.R.&nbsp;Horton is required
to purchase as much coverage as it can obtain for that amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the requirement to keep
directors&#146; and officers&#146; insurance in place as
described above, D.R.&nbsp;Horton has agreed that after the
effective time of the merger it will indemnify, to fullest
extent permitted under applicable law and its certificate of
incorporation and bylaws, each present and former director and
officer of Schuler, determined as of the effective time of the
merger, against claims, costs or expenses arising out of or
pertaining to any acts or omissions or alleged acts or omissions
by them in their capacities as officers or directors of Schuler,
as the case may be. For claims against present or former
officers and directors of Schuler, in their capacities as
officers and directors that already exist as of the effective
time of the merger, D.R.&nbsp;Horton&#146;s indemnity obligation
may not exceed the extent of Schuler&#146;s indemnity obligation
to the officers and directors on the date D.R.&nbsp;Horton and
Schuler entered into the merger agreement.
</FONT>

<!-- link2 "Mutual Release of Obligations; Insurance" -->
<DIV align="left"><A NAME="063"></A></DIV>

<P align="left">
<B><FONT size="2">Mutual Release of Obligations;
Insurance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that, prior to and
to be effective upon the consummation of the merger, Schuler and
the parties to the Western Pacific reorganization agreement
described in &#147;The Merger&nbsp;&#151; Interest of Certain
Persons in the Merger&#148; will enter into an agreement
terminating the Western Pacific reorganization agreement and
releasing the parties and their affiliates from any claims
arising out of or relating to the reorganization agreement or
the related stockholders agreement. Following the consummation
of the merger, D.R.&nbsp;Horton, as the surviving corporation,
will be bound by such agreement. Further, to the extent that the
Schuler operations and the Schuler subsidiaries and each of
their respective current and former officers, directors,
stockholders, partners, members and employees are currently
named as insureds or additional insureds under existing Schuler
insurance policies covering construction defect litigation
claims, the merger agreement requires D.R.&nbsp;Horton, for a
ten year period, to name such persons as insureds or additional
insureds under all D.R.&nbsp;Horton policies covering
construction defect litigation claims.
</FONT>

<!-- link1 "DIRECTORS AND MANAGEMENT OF D.R. HORTON FOLLOWING THE MERGER" -->
<DIV align="left"><A NAME="064"></A></DIV>

<P align="center">
<B><FONT size="2">DIRECTORS AND MANAGEMENT OF D.R.&nbsp;HORTON
FOLLOWING THE MERGER</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the merger agreement, D.R.&nbsp;Horton has
agreed, effective as of the closing of the merger, to use its
best efforts to appoint James K. Schuler to the D.R.&nbsp;Horton
board. As with the other directors, once appointed,
Mr.&nbsp;Schuler would serve until the next annual meeting of
D.R.&nbsp;Horton stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Schuler, age&nbsp;63, is currently the
Co-Chairman of the board of directors of Schuler as well as its
President and Chief Executive Officer. Mr.&nbsp;Schuler founded
Schuler Residential,&nbsp;Inc., then known as Schuler
Homes,&nbsp;Inc., and was its Chairman of the Board, President
and Chief Executive Officer since its incorporation in January,
1992 until Schuler Residential merged into Schuler on
June&nbsp;21, 2001. From 1988 to January 1992, Mr.&nbsp;Schuler
served as Chairman of the Board, President and Chief Executive
Officer of JPS&nbsp;Hawaii,&nbsp;Inc., the predecessor of
Schuler. Since 1973, he has also been President of James K.
Schuler&nbsp;&#38; Associates, Inc., a private single-and
multi-family development company that previously constructed
homes in Hawaii, California, Washington and Texas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the record date, Mr.&nbsp;Schuler beneficially
owned 2,438&nbsp;shares of D.R.&nbsp;Horton common stock. As
part of Mr.&nbsp;Schuler&#146;s employment agreement with
D.R.&nbsp;Horton, Mr.&nbsp;Schuler has agreed that so long as he
is serving as a director of D.R.&nbsp;Horton, he will continue
to hold, individually or through a trust of his
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<DIV align="left">
<FONT size="2">designation, at least 25% of the D.R.&nbsp;Horton
common stock that he and his affiliates will receive in the
merger.
</FONT>
</DIV>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The executive officers of D.R.&nbsp;Horton will
not change as a result of the merger. For information regarding
the ages and business backgrounds of the executive officers of
D.R.&nbsp;Horton, please refer to the section entitled
&#147;Additional Information about D.R.&nbsp;Horton&nbsp;&#151;
Directors and Executive Officers&#148; on page&nbsp;101.
</FONT>


<!-- link1 "VOTING AGREEMENTS" -->
<DIV align="left"><A NAME="065"></A></DIV>

<P align="center">
<B><FONT size="2">VOTING AGREEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to induce Schuler to enter into the
merger agreement, Donald R. Horton, individually, and Terrill J.
Horton, as trustee of four trusts for the benefit of family
members of Donald R. Horton, agreed, pursuant to a voting
agreement, to vote all the shares of D.R.&nbsp;Horton common
stock they hold in favor of approval and adoption of the merger
agreement and the issuance of D.R.&nbsp;Horton common stock in
connection with the merger and against any action or agreement
that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of
D.R.&nbsp;Horton under the merger agreement, or any offer,
proposal or transaction which would impede, delay or prevent the
consummation of the merger or any of the other transactions
contemplated by the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Donald R. Horton and the family
trusts generally agreed, subject to specified exceptions, not to
sell or otherwise transfer their D.R.&nbsp;Horton shares, or
take any action that would interfere with their performance
under the voting agreement, until the completion of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the record date, Donald R. Horton and the
trusts owned approximately 16% of the outstanding shares of
D.R.&nbsp;Horton common stock.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to induce D.R.&nbsp;Horton to enter into
the merger agreement, The James and Patricia Schuler Foundation,
the James K. Schuler 1998 Qualified Annuity Trust, the James K.
Schuler Irrevocable Living Trust and WPH-Schuler LLC agreed,
pursuant to a voting agreement, to
vote&nbsp;5,224,895&nbsp;shares of Schuler Class&nbsp;A common
stock and 18,754,727&nbsp;shares of Class&nbsp;B common stock in
favor of approval and adoption of the merger agreement and
against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation
or agreement of Schuler under the merger agreement, or any
offer, proposal or transaction which would impede, delay or
prevent the consummation of the merger or any of the other
transactions contemplated by the merger agreement.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the foundation, the trusts and
WPH-Schuler&nbsp;LLC generally agreed, subject to specified
exceptions, not to sell or otherwise transfer the Schuler shares
subject to the agreement, not to take any action that would
interfere with their performance under the voting agreement,
until the completion of the merger.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the record date, the foundation and the trusts
owned approximately 46.7% of the outstanding shares of Schuler
Class&nbsp;A common stock, of which one-half is subject to the
voting agreement, and WPH-Schuler LLC owned 100% of the
outstanding shares of Schuler Class&nbsp;B common stock. The
shares subject to the voting agreement constitute approximately
46.0% of the voting power of the outstanding shares of Schuler
common stock, representing 23.4% of the Class&nbsp;A common
stock and 100% of the Class&nbsp;B common stock.
</FONT>


<!-- link1 "AFFILIATE AGREEMENTS" -->
<DIV align="left"><A NAME="066"></A></DIV>

<P align="center">
<B><FONT size="2">AFFILIATE AGREEMENTS</FONT></B>

<!-- link2 "Restrictions on Resales of D.R. Horton Common Stock by Schuler Affiliates" -->
<DIV align="left"><A NAME="067"></A></DIV>

<P align="left">
<B><FONT size="2">Restrictions on Resales of D.R.&nbsp;Horton
Common Stock by Schuler Affiliates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Schuler, Mr.&nbsp;Rosenfeld,
WPH-Schuler, LLC, Apollo Real Estate Investment Fund,&nbsp;L.P.,
Highridge Pacific Housing Investors, L.P., Blackacre WPH, LLC
and the directors, executive officers and other affiliates of
Schuler have entered into or indicated that they will enter into
agreements with D.R.&nbsp;Horton which provide that they may not
sell their shares of D.R.&nbsp;Horton common stock acquired in
the merger except as permitted under the Securities Act of 1933.
</FONT>

<P align="center"><FONT size="2">79
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">They have also agreed to waive any rights of
appraisal or rights to dissent from the merger and have
acknowledged that D.R.&nbsp;Horton has no obligation to register
the sale, transfer, pledge or other disposition of the shares of
D.R.&nbsp;Horton common stock or to take any other action to
provide an exemption from registration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Schuler (as chairman of the James and
Patricia Schuler Foundation and as trustee for the James K.
Schuler 1998 Qualified Annuity Trust and the James K. Schuler
Revocable Living Trust) and Mr.&nbsp;Rosenfeld have agreed not
to sell, pledge or otherwise dispose of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any shares of D.R.&nbsp;Horton common stock
	received in the merger for a period of 90&nbsp;days from the
	effective date of the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">two-thirds of the shares for a period of
	120&nbsp;days from the effective date of the merger;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">one-third of the shares for a period of
	180&nbsp;days from the effective date of the merger.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WPH-Schuler, LLC, Apollo Real Estate Investment
Fund, L.P., Highridge Pacific Housing Investors,&nbsp;L.P. and
Blackacre WPH, LLC have agreed not to sell, pledge or otherwise
dispose of any shares of D.R.&nbsp;Horton common stock received
in the merger for a period of 45&nbsp;days from the effective
date of the merger.
</FONT>

<!-- link1 "UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="068"></A></DIV>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited pro forma combined
condensed financial statements give effect to the merger. The
merger will be accounted for as a purchase of Schuler by
D.R.&nbsp;Horton. The unaudited pro forma combined condensed
financial statements reflect the financial position of
D.R.&nbsp;Horton and Schuler as of September&nbsp;30, 2001, and
the operations of D.R.&nbsp;Horton and Schuler for the
12&nbsp;months ended September&nbsp;30, 2001. The unaudited pro
forma combined condensed balance sheet assumes the merger
occurred on the date of the balance sheet. The unaudited pro
forma combined statement of income assumes the merger occurred
on October&nbsp;1, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The historical financial information about
D.R.&nbsp;Horton and Schuler as of and for the year ended
September&nbsp;30, 2001 has been derived from the
D.R.&nbsp;Horton and Schuler (and its predecessor) audited and
unaudited financial statements. The unaudited pro forma combined
condensed financial statements should be read in conjunction
with the accompanying notes and with the historical consolidated
financial statements of D.R.&nbsp;Horton and Schuler, which are
incorporated into this Joint Proxy Statement/ Prospectus by
reference.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma combined condensed
financial statements reflect .487&nbsp;shares of
D.R.&nbsp;Horton common stock issued for each share of Schuler
common stock as part of the base merger consideration, based on
a price of $32.133, which is the average closing price for the
15&nbsp;trading days prior to, and including, January&nbsp;14,
2002. For purchase accounting purposes, the assumed measurement
date of the transaction is December&nbsp;11, 2001, and the
D.R.&nbsp;Horton shares to be issued in the merger are valued at
$30.93&nbsp;per share, which represents the average closing
price for a period of 10 trading days beginning December&nbsp;4,
2001 and ending December&nbsp;17, 2001. The actual number of
shares of D.R.&nbsp;Horton common stock that will be issued for
each share of Schuler common stock as part of the base merger
consideration and the corresponding merger adjustments will be
determined at or after the completion of the transaction, and
they may differ from those reflected in the unaudited pro forma
combined condensed financial statements.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma combined condensed
financial statements have been included for comparative purposes
only. As further discussed in the accompanying notes, the
unaudited pro forma combined condensed financial statements do
not purport to show what the financial position or operating
results would have been if the merger had been consummated as of
the dates indicated and should not be construed as
representative of future financial position or operating results.
</FONT>

<P align="center"><FONT size="2">80
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE
SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">As of September&nbsp;30, 2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">D.R. Horton</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="17" align="center" valign="top">
	<B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Homebuilding:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">232,305</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,913</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(157,305</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,913</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Inventories
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,804,377</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">994,712</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,799,089</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Earnest money deposits and other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">234,755</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100,690</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">335,445</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Excess of cost over net assets acquired (net)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136,223</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65,628</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">372,470</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">574,321</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,407,660</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,171,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,794,768</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Financial Services:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Mortgage loans held for sale
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">222,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other assets
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,737</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">244,530</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">244,530</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,652,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,171,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,039,298</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="17" align="center" valign="top">
	<B><FONT size="2">LIABILITIES</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Homebuilding:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounts payable and other liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">498,576</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">174,409</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">672,985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,701,689</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">562,822</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(47,130</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,288,526</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,145</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,200,265</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">737,231</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,015</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,961,511</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Financial Services:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notes payable
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">182,641</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">182,641</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other liabilities
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,173</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">192,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">192,814</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,393,079</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">737,231</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,015</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,154,325</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Minority interests
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,864</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,980</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,844</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">STOCKHOLDERS&#146; EQUITY</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Preferred stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">769</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">967</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Class&nbsp;A common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(22</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Class&nbsp;B common stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Unearned compensation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,214</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,214</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Additional capital
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">704,842</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">253,004</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(253,004</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,334,740</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">612,340</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,558</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Retained earnings
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">544,636</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">179,687</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(179,687</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">544,636</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,250,247</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">432,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,874,129</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,652,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,171,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,039,298</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">81
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF INCOME</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended September&nbsp;30,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">D.R. Horton</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler(B)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Homebuilding:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,383,552</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,540,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,924,370</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,527,142</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,207,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,075</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,735,382</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">856,410</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,075</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,188,988</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general&nbsp;&#38; administrative expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">432,013</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">159,450</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,295</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">591,543</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,500</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(4)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(715</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,809</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,856</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">251</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;C(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,916</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34,747</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,732</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">380,841</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">153,362</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,406</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">532,797</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Financial Services:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,962</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,962</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general&nbsp;&#38; administrative expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,387</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,387</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,288</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,288</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other (income)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,669</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,669</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,956</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,956</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before income taxes and cumulative effect
	of change in accounting principle
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">407,797</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">153,362</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,406</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">559,753</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">152,924</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,204</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(533</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)C(6)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">213,595</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">254,873</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(873</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">346,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before cumulative effect of change in
	accounting principle per common share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.63</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.57</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of common shares
	outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,677</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,804</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;D</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">95,481</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,953</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,034</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">&nbsp;D</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">96,987</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">82
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note&nbsp;A.&nbsp;Basis of
Presentation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma condensed combined
balance sheet reflects the combined financial position of
D.R.&nbsp;Horton and Schuler as of September&nbsp;30, 2001, on a
pro forma basis assuming that the merger had taken place on
September&nbsp;30, 2001. The unaudited pro forma condensed
combined statement of income reflects the combined results of
operations of D.R.&nbsp;Horton and Schuler presented as
described in Note&nbsp;B below for the year ended
September&nbsp;30, 2001, assuming that the merger had taken
place on October&nbsp;1, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under accounting principles generally accepted in
the United States, the merger of Schuler into D.R.&nbsp;Horton
will be accounted for under the purchase method of accounting.
Accordingly, the purchase price will be allocated to the Schuler
assets acquired and liabilities assumed based on their
respective fair values, with the excess to be allocated to
goodwill. The valuations and other studies required to determine
the fair value of the Schuler assets acquired and liabilities
assumed have not been performed and accordingly, the related
adjustments reflected in the unaudited pro forma combined
financial statements are preliminary and subject to further
revisions and adjustments. These adjustments are described in
Note&nbsp;C.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The adjustment to reflect the preliminary
purchase price allocation, described in Note&nbsp;C(1), uses the
book value of the Schuler assets acquired and liabilities
assumed. This is a preliminary assumption, which will be
adjusted based on the valuation analysis to be performed after
the completion of the merger. Changes to the purchase price
allocation as a result of such analysis will be recorded as
corresponding increases or decreases in goodwill.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;1, 2001, D.R.&nbsp;Horton adopted
Statement of Financial Accounting Standards
(SFAS)&nbsp;No.&nbsp;142, &#147;Goodwill and Other Intangible
Assets.&#148; In accordance with SFAS No.&nbsp;142, goodwill
will no longer be amortized but will be subject to periodic
review for impairment, and as such, no pro forma adjustment for
amortization of the goodwill resulting from the merger is
presented in the unaudited pro forma condensed combined balance
sheet and statement of income. Other identifiable intangibles
are assumed to be insignificant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of Schuler&#146;s senior and
senior subordinated notes, of which $500&nbsp;million principal
amount is outstanding at September&nbsp;30, 2001, the merger
will represent a &#147;change of control&#148; that provides the
holders of such notes the right to require D.R.&nbsp;Horton to
repurchase the Schuler notes at a purchase price in cash equal
to 101% of the principal amount of the notes. D.R.&nbsp;Horton
does not anticipate it will be required to repurchase a
significant amount of the Schuler notes. Accordingly, no
adjustment is included in the unaudited pro forma condensed
combined financial statements to reflect the repurchase of any
of the Schuler notes.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;B.&nbsp;Combined Pro Forma
Schuler</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Schuler was formed in April 2001 when Schuler
Residential combined with Western Pacific. Schuler Residential
is the predecessor of Schuler. Therefore, the Schuler statement
of income for the year ended September&nbsp;30, 2001 is
presented on a pro forma combined basis to include the combined
operations of Schuler, Schuler Residential and Western Pacific
for the year ended September&nbsp;30, 2001, assuming that the
combination had taken place on October&nbsp;1, 2000. Following
are the historical statements of income of
</FONT>

<P align="center"><FONT size="2">83
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Schuler, Schuler Residential and Western Pacific
and the pro forma adjustments which comprise the combined pro
forma Schuler statement of income for the year ended
September&nbsp;30, 2001:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Six Months Ended</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Six Months Ended March&nbsp;31, 2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">September&nbsp;30, 2001</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Western</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Residential</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Pacific</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Schuler</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="23" align="center" nowrap><B><FONT size="1">(In thousands, except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Revenues
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">298,807</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">543,190</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">841,997</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">698,821</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,540,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cost of sales
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">226,305</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">424,088</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">650,393</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">556,772</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,207,165</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Gross profit
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">72,502</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119,102</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191,604</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">142,049</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">333,653</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Selling, general &#38; administrative expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35,417</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,207</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)(a)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80,153</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">79,297</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">159,450</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Interest expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,316</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,316</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,540</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,856</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Other expense
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">704</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,003</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,707</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(722</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,985</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income before income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,065</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,156</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,207</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">93,428</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59,934</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">153,362</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Income taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,785</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24,580</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(b)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,365</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23,839</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">61,204</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,280</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,156</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,373</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56,063</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,095</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92,158</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Net income per common share:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.01</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.89</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.86</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash dividends per common share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average number of common shares
	outstanding:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Basic
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,114</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(c)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,280</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,517</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,399</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Diluted
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,972</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(c)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,138</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,209</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,174</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="4%"></TD>
	<TD width="93%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents the exclusion of a non-cash charge for
	compensation expense recognized in conjunction with equity
	interests granted to Western Pacific executives related to the
	combination with Schuler Residential. This charge is a
	nonrecurring item and is not indicative of future operating
	results.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(b)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents the pro forma effect on the combined
	provision for income taxes resulting from the operations of
	Western Pacific and Schuler Residential for the six months ended
	March&nbsp;31, 2001 and the other pro forma adjustment, based on
	an effective tax rate of 40.7%. Prior to its combination with
	Schuler Residential, Western Pacific was operated through a
	series of partnerships and was not subject to taxation at the
	entity level.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">(c)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents the issuance of
	20,166,000&nbsp;Schuler shares of Class&nbsp;B common stock in
	the Western Pacific/ Schuler Residential combination, assuming
	such shares were outstanding beginning on October&nbsp;1, 2000.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">84
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note&nbsp;C.&nbsp;Pro Forma
Adjustments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following adjustments are included in the
unaudited pro forma condensed combined balance sheet and
statement of income as of and for the year ended
September&nbsp;30, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;Represents the preliminary purchase
allocation, which reflects the cash and equity consideration
paid by D.R.&nbsp;Horton, the elimination of the
September&nbsp;30, 2001 Schuler equity balance, and the
recording of goodwill resulting from the transaction, as
summarized below:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">In</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">thousands,</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">except</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">per share</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">amounts</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash Consideration:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of Schuler shares outstanding at
	September&nbsp;30, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,665</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash paid per share by D.R.&nbsp;Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">x $4.09</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cash consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 166,320</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Equity Consideration:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of Schuler shares outstanding at
	September&nbsp;30, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,665</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fractional shares of D.R.&nbsp;Horton common
	stock issued for each Schuler share
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">x .487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total number of D.R.&nbsp;Horton shares issued
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,804</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Assumed D.R.&nbsp;Horton stock price
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">x $30.93</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total equity consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">612,538</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total cash and equity consideration paid
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">778,858</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Estimated transaction costs related to merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton stock options to be issued in
	connection with the merger (see Note&nbsp;C(2)&nbsp;below)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,344</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total merger costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">805,202</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Less Schuler equity balance at September&nbsp;30,
	2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(432,732</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Increase in excess of purchase price over net
	assets acquired (goodwill)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">372,470</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schuler goodwill balance at September&nbsp;30,
	2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65,628</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total goodwill resulting from the merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 438,098</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Uses and Sources of Cash for Merger Consideration
	and Merger Costs:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash consideration for Schuler equity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 166,320</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Pay off balance of Schuler revolving credit
	facility
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">47,130</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger costs
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total uses of cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 228,450</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">D.R.&nbsp;Horton excess cash balances at
	September&nbsp;30, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 157,305</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Additional draws on D.R.&nbsp;Horton revolving
	credit facility
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">71,145</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total sources of cash
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">$ 228,450</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">85
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;Represents the estimated effect of the
issuance of options to purchase 0.9&nbsp;million shares of
D.R.&nbsp;Horton common stock to Schuler employees to replace
outstanding Schuler stock options. The fair value of the
D.R.&nbsp;Horton stock options to be issued ($17,558,000) was
estimated using the Black-Scholes option pricing model and is
recorded as additional capital, the intrinsic value related to
unvested options to be issued ($6,214,000) is recorded as
unearned compensation and the remainder ($11,344,000) is
recorded as a merger cost, which increases goodwill. The
unearned compensation will be amortized over the remaining
vesting period of the stock options. The estimated compensation
expense related thereto for the first year following the merger
is $2,295,000.
</FONT>

<P align="left">
<FONT size="2">The following assumptions were used in the
Black-Scholes model to determine the fair value of the
D.R.&nbsp;Horton stock options to be issued in the merger:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Risk-free interest rate:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.8</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Expected volatility of D.R.&nbsp;Horton stock:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average expected dividend yield:
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Weighted average expected life (in years):
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;Represents the pro forma annual impact
of additional interest costs assumed to be incurred to finance
the cash portion of the merger consideration and other merger
costs, at a 3% marginal interest rate, which approximates
D.R.&nbsp;Horton&#146;s current floating rate on its revolving
line of credit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(4)&nbsp;Represents the estimated savings in
compensation expense that would have occurred during the first
year following the merger, related to D.R.&nbsp;Horton
employment agreements with two members of Schuler management, as
described in this Joint Proxy Statement/ Prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(5)&nbsp;Represents the elimination of the
goodwill amortization expense included in the Combined Pro Forma
Schuler statement of income for the year ended
September&nbsp;30, 2001, as all of Schuler&#146;s prior goodwill
balances will be eliminated in the merger with D.R. Horton.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(6)&nbsp;Represents the net effect on income tax
expense of the pro forma adjustments, calculated using the pro
forma combined effective income tax rate of 37.9%.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;D.&nbsp;Pro Forma Number of Shares
Outstanding and Net Income Per Share</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The number of D.R.&nbsp;Horton shares of common
stock that will be issued in exchange for the outstanding
Schuler shares is based on an assumed .487&nbsp;shares of
D.R.&nbsp;Horton common stock issued for each share of Schuler
common stock outstanding immediately prior to the effective date
of the merger, based on a price of $32.133, which is the average
closing price of D.R. Horton common stock for the 15 trading
days prior to, and including, January&nbsp;14, 2002. The
following table provides the pro forma number
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">86
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">of shares to be issued in connection with the
merger, and the number of shares of D.R.&nbsp;Horton common
stock to be outstanding after the merger:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares in</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Thousands</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of shares of Schuler common stock
	outstanding as of September&nbsp;30, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,665</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Fractional share of D.R.&nbsp;Horton common stock
	issued for each Schuler share in base merger consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.487</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of D.R.&nbsp;Horton common stock shares to
	be issued in the merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,804</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of shares of D.R.&nbsp;Horton common stock
	outstanding as of September&nbsp;30, 2001
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,902</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Number of shares of D.R.&nbsp;Horton common stock
	outstanding after the merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">96,706</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma combined income per share before
cumulative effect of change in accounting principle for the year
ended September&nbsp;30, 2001 is based on the weighted average
number of shares of D.R.&nbsp;Horton common stock outstanding
for the year ended September&nbsp;30, 2001, assuming the
issuance of 19,804,000&nbsp;shares of D.R.&nbsp;Horton common
stock on October&nbsp;1, 2000. The actual number of shares of
D.R.&nbsp;Horton common stock to be issued in the merger will be
determined prior to the effective date of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma combined diluted income per share
before cumulative effect of change in accounting principle for
the year ended September&nbsp;30, 2001 is based on the weighted
average number of shares of D.R.&nbsp;Horton common stock
outstanding during the year, adjusted for the effects of
dilutive securities outstanding, plus the 19,804,000 assumed
number of shares of D.R.&nbsp;Horton common stock to be issued
in the merger and the assumed dilutive effect of
D.R.&nbsp;Horton stock options to be issued in the merger.
Options to purchase 0.9&nbsp;million shares of D.R.&nbsp;Horton
common stock are assumed to be issued in the merger, which
results in an incremental dilutive effect of 230,000 shares.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma combined financial statements are
based on the assumption that D.R.&nbsp;Horton will pay $4.09 in
cash and will issue .487&nbsp;shares of D.R.&nbsp;Horton common
stock for each Schuler share, based on a $32.133 average closing
price of D.R.&nbsp;Horton common stock. This results in a total
of 19.8&nbsp;million shares of D.R.&nbsp;Horton stock assumed to
be issued in the merger, pro forma combined goodwill of
$574.3&nbsp;million as of September&nbsp;30, 2001 and pro forma
combined diluted income per share of $3.57 for the year ended
September&nbsp;30, 2001. The actual number of D.R.&nbsp;Horton
shares to be issued and the value per share will be determined
as discussed in the section captioned &#147;Summary&nbsp;&#151;
The Merger Consideration&#148; of this Joint Proxy Statement/
Prospectus. The following table reflects the number of
D.R.&nbsp;Horton shares that would be issued in the merger, the
pro forma combined goodwill as of September&nbsp;30, 2001, and
pro forma combined diluted income per share before cumulative
effect of change in accounting principle for the year ended
September&nbsp;30, 2001, assuming other average D.R.&nbsp;Horton
common stock closing prices:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Pro Forma Combined</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Assumed</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Diluted</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Closing</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares To</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Be Issued</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Goodwill</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="13"></TD>
</TR>

<TR>
	<TD colspan="13" align="center" nowrap><B><FONT size="1">(In millions, except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$16.000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">374.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$20.000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">425.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">$25.000
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">506.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">87
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">D.R.&nbsp;HORTON, INC.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">AND UNAUDITED PRO FORMA CONDENSED
COMBINED</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENT OF INCOME&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note&nbsp;E.&nbsp;Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma combined cash dividends per common
share are not necessarily indicative of dividends to be paid to
holders of D.R.&nbsp;Horton common stock in future periods.
Future dividends will be determined by the D.R.&nbsp;Horton
board of directors based on the earnings and financial condition
of D.R.&nbsp;Horton and its subsidiaries, as well as other
factors.
</FONT>

<P align="center"><FONT size="2">88
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DESCRIPTION OF D.R. HORTON CAPITAL STOCK" -->
<DIV align="left"><A NAME="069"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF D.R. HORTON CAPITAL
STOCK</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton&#146;s authorized capital stock is
200,000,000&nbsp;shares of common stock, par value $.01&nbsp;per
share, and 30,000,000&nbsp;shares of preferred stock, par value
$.10&nbsp;per share. At January&nbsp;14, 2002,
77,103,841&nbsp;shares of D.R. Horton common stock and no shares
of preferred stock were outstanding.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<!-- link2 "D.R. Horton Preferred Stock" -->
<DIV align="left"><A NAME="070"></A></DIV>

<P align="left">
<B><FONT size="2">D.R. Horton Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The D.R. Horton board of directors is authorized,
subject to any limitations prescribed by law, to provide for the
issuance of shares of preferred stock in one or more series, and
by filing a certificate pursuant to the applicable law of the
State of Delaware, to establish from time to time the number of
shares to be included in each such series, and to fix the
designations, powers, preferences and rights of the shares of
each such series and any qualifications, limitations or
restrictions thereof. The number of authorized shares of D.R.
Horton preferred stock may be increased or decreased, but not
below the number of shares then outstanding, by the affirmative
vote of the holders of a majority of the shares of D.R. Horton
common stock, without a vote of the holders of the D.R. Horton
preferred stock, or of any series thereof, unless a vote of any
such holders is required pursuant to the certificate or
certificates establishing the series of D.R. Horton preferred
stock.
</FONT>

<!-- link2 "D.R. Horton Common Stock" -->
<DIV align="left"><A NAME="071"></A></DIV>

<P align="left">
<B><FONT size="2">D.R. Horton Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of shares of D.R. Horton common stock are
entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders. There are no
cumulative voting rights with respect to the election of
directors. Accordingly, the holder or holders of a majority of
the outstanding shares of D.R. Horton common stock will be able
to elect the entire board of directors of D.R. Horton. Holders
of D.R. Horton common stock have no preemptive rights and are
entitled to such dividends as may be declared by the board of
directors of D.R. Horton out of funds legally available
therefore. The D.R. Horton common stock is not entitled to any
sinking fund, redemption or conversion provisions. On
liquidation, dissolution or winding up of D.R. Horton, the
holders of D.R. Horton common stock are entitled to share
ratably in the net assets of D.R. Horton remaining after the
payment of all credits and liquidation preferences of D.R.
Horton preferred stock, if any. The outstanding shares of D.R.
Horton common stock are duly authorized, validly issued, fully
paid and nonassessable. The transfer agent and registrar for the
D.R. Horton common stock is American Stock Transfer&nbsp;&#38;
Trust Company, New York, New York.
</FONT>

<!-- link2 "Anti-Takeover Effects of Provisions of D.R. Horton&#146;s Charter and Bylaws" -->
<DIV align="left"><A NAME="072"></A></DIV>

<P align="left">
<B><FONT size="2">Anti-Takeover Effects of Provisions of D.R.
Horton&#146;s Charter and Bylaws</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton currently has the following
provisions in its charter or bylaws which could be considered to
be &#147;anti-takeover&#148; provisions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an article in its charter prohibiting stockholder
	action by written consent;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an article in its charter requiring the
	affirmative vote of the holders of two-thirds of the outstanding
	shares of D.R. Horton common stock to remove a director;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a bylaw limiting the persons who may call special
	meetings of stockholders to the board of directors or a
	committee thereof so empowered by the D.R. Horton board, the
	D.R. Horton bylaws or by law; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a bylaw providing time limitations for
	nominations for election to the board of directors or for
	proposing matters which can be acted upon at stockholders&#146;
	meetings.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These provisions may have the effect of delaying
stockholder actions with respect to certain business
combinations and the election of new members to the board of
directors. As such, the provisions could have the effect of
discouraging open market purchases of D.R. Horton common stock
because they may be considered disadvantageous by a stockholder
who desires to participate in a business combination or elect a
new director. Additionally, the issuance of D.R. Horton
preferred stock under certain circumstances could have the
effect of delaying or preventing a change of control or other
corporate action.
</FONT>

<P align="center"><FONT size="2">89
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton is a Delaware corporation and is
subject to Section&nbsp;203 of the Delaware General Corporation
Law. In general, Section&nbsp;203 prevents an &#147;interested
stockholder&#148;, which is defined generally as a person owning
15% or more of D.R. Horton&#146;s outstanding voting stock from
engaging in a &#147;business combination&#148; with D.R. Horton
for three years following the date that person became an
interested stockholder unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">before that person became an interested
	stockholder, the board of directors of D.R. Horton approved the
	transaction in which the interested stockholder became an
	interested stockholder or approved the business combination;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">upon completion of the transaction that resulted
	in the interested stockholder becoming an interested
	stockholder, the interested stockholder owned at least 85% of
	the voting stock of D.R. Horton outstanding at the time the
	transaction commenced, excluding stock held by persons who are
	both directors and officers of D.R. Horton or by specified
	employee stock plans;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">on or following the date on which that person
	became an interested stockholder, the business combination is
	approved by D.R. Horton&#146;s board and authorized at a meeting
	of stockholders by the affirmative vote of the holders of at
	least 66&nbsp;2/3% of the outstanding voting stock of D.R.
	Horton, excluding shares held by the interested stockholder.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;business combination&#148; includes
mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder.
</FONT>

<P align="center"><FONT size="2">90
</FONT>

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<!-- link1 "COMPARATIVE RIGHTS OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="073"></A></DIV>

<P align="center">
<B><FONT size="2">COMPARATIVE RIGHTS OF STOCKHOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger is completed, most holders of
Schuler common stock will become holders of D.R.&nbsp;Horton
common stock. The certificate of incorporation and bylaws of
D.R.&nbsp;Horton will govern the rights of all of
D.R.&nbsp;Horton&#146;s stockholders, including the former
Schuler stockholders. The current rights of Schuler stockholders
differ in several respects from the rights of D.R.&nbsp;Horton
stockholders. The following is a summary of the material
differences in the rights of stockholders of D.R.&nbsp;Horton
and Schuler. Unless otherwise noted, the rights of
D.R.&nbsp;Horton stockholders are substantially the same as
those of Schuler stockholders.
</FONT>


<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stockholders</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Stockholders</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Capitalization</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton is authorized to issue
	230,000,000&nbsp;shares of capital stock, consisting of
	200,000,000&nbsp;shares of common stock, par value $.01&nbsp;per
	share, of which 1,611,012&nbsp;shares are reserved for future
	issuance upon exercise of outstanding stock options at
	September&nbsp;30, 2001 and 30,000,000&nbsp;shares of preferred
	stock, par value $.10&nbsp;per share.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Schuler is authorized to issue
	171,000,000&nbsp;shares of capital stock, consisting of
	170,000,000&nbsp;shares of common stock, of which 120,000,000
	are shares of Class&nbsp;A common stock, par value
	$.001&nbsp;per share, and 50,000,000 are shares of Class&nbsp;B
	common stock, par value $.001&nbsp;per share, of which
	1,623,184&nbsp;shares of Class&nbsp;A common stock are reserved
	for future issuance upon exercise of outstanding stock options,
	and 1,000,000&nbsp;shares of preferred stock, par value
	$.001&nbsp;per share.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Number, Election, Vacancy and Removal of
	Directors</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton&#146;s bylaws provide that its
	board of directors may consist of one or more persons. Currently
	there are ten members of D.R.&nbsp;Horton&#146;s board of
	directors. The merger agreement provides that D.R.&nbsp;Horton
	will use its best efforts to appoint James K. Schuler to
	D.R.&nbsp;Horton&#146;s board.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">As long as any shares of Class&nbsp;B common
	stock are outstanding, Schuler&#146;s board of directors shall
	consist of not less than five nor more than eleven. The number
	of directors has currently been set by Schuler&#146;s board at
	ten.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Directors are elected by the holders of
	D.R.&nbsp;Horton common stock by written ballot at each annual
	meeting of stockholders.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Holders of the Class&nbsp;A common stock are
	entitled to elect five directors and holders of the Class&nbsp;B
	common stock are entitled to elect four directors.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Vacancies may be filled by a majority of the
	directors then in office, although less than a quorum, or by the
	sole remaining director.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Vacancies of directors elected by holders of
	Class&nbsp;A common stock may only be filled by majority of the
	holders of Class&nbsp;A common stock or a majority of the
	directors elected by the holders of the Class&nbsp;A common
	stock then in office, although less than a quorum. Vacancies of
	directors elected by holders of Class&nbsp;B common stock may
	only be filled by majority of the holders of Class&nbsp;B common
	stock or a majority of the directors elected by the holders of
	the Class&nbsp;B common stock then in office, although less than
	a quorum.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">No director may be removed without the
	affirmative vote of not less than 66&nbsp;2/3% of the total
	voting power of all outstanding shares of voting stock.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">No director elected by the holders of
	Class&nbsp;A common stock may be removed without the affirmative
	vote of at least 66&nbsp;2/3% of the outstanding shares of
	Class&nbsp;A common stock. No director elected by the holders of
	Class&nbsp;B common stock may be removed without the
	</FONT></TD>
</TR>

</TABLE>
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stockholders</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Stockholders</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">affirmative vote of at least 66&nbsp;2/3% of the
	outstanding shares of Class&nbsp;B common stock.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Voting Rights</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Each holder of D.R.&nbsp;Horton common stock is
	entitled to one vote for each share standing in such
	holder&#146;s name.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Except as required by law or its certificate of
	incorporation, holders of Class&nbsp;A common stock and
	Class&nbsp;B common stock vote together as a single class. With
	respect to such matters, holders of Class&nbsp;A common stock
	are entitled to one vote for each share standing in such
	holder&#146;s name and holders of Class&nbsp;B common stock are
	entitled to one-half vote for each share standing in such
	holder&#146;s name.<BR>
	<BR>
	Any of the following business combinations requires the
	affirmative vote of the holders of at least 66&nbsp;2/3% of the
	outstanding shares of Class&nbsp;A common stock and Class&nbsp;B
	common stock, each voting as a separate class, unless such
	transaction has been approved by two-thirds of the whole board
	of directors:<BR>
	&#149;&nbsp;any merger or consolidation of Schuler or any
	subsidiary with or into any interested stockholder, as defined
	in the certificate of incorporation, or any other person which
	is an affiliate of an interested stockholder;<BR>
	<BR>
	&#149;&nbsp;any sale, lease, exchange, mortgage, pledge,
	transfer or other disposition to or with, or proposed by or on
	behalf of, any interested stockholder or any affiliate of an
	interested stockholder, of greater than 5% of the assets of
	Schuler or a subsidiary;<BR>
	<BR>
	&#149;&nbsp;the issuance or transfer by Schuler or any
	subsidiary of any securities of Schuler or any subsidiary to or
	with, or proposed by or on behalf of, any interested stockholder
	or any affiliate of an interested stockholder, in exchange for
	cash, securities or other property with a value greater than 5%
	of the assets of Schuler or a subsidiary;<BR>
	<BR>
	&#149;&nbsp;the adoption of any plan or proposal for the
	liquidation or dissolution of Schuler, or any spin-off or
	split-up of any kind of Schuler or any subsidiary, proposed by
	or on behalf of an interested stockholder or any affiliate of
	any interested stockholder; or<BR>
	<BR>
	&#149;&nbsp;any reclassification of securities or
	recapitalization of Schuler, or any merger or consolidation of
	Schuler with any of its subsidiaries which has the effect of
	increasing the percentage of the outstanding shares of any class
	of equity securities of Schuler or any subsidiary
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stockholders</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Stockholders</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">which are owned by any interested stockholder or
	an affiliate of any interested stockholder.<BR>
	<BR>
	The foregoing provisions do not apply if the transaction is
	approved by at least 66&nbsp;2/3% of Schuler&#146;s board.<BR>
	<BR>
	In the event the foregoing provisions do not apply, whether
	because at least 66&nbsp;2/3% of the Schuler board has approved
	the transaction or otherwise, a merger like the contemplated
	D.R.&nbsp;Horton/ Schuler merger requires the affirmative vote
	of the holders of a majority of the Class&nbsp;A common stock
	and Class&nbsp;B common stock voting together as a class, and
	the affirmative vote of the holders of a majority of each of the
	Class&nbsp;A common stock and Class&nbsp;B common stock voting
	as separate classes.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Indemnification of Directors and
	Officers</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">The certificate of incorporation of
	D.R.&nbsp;Horton provides that D.R.&nbsp;Horton will indemnify
	to the fullest extent permitted by Delaware law each director or
	officer of D.R.&nbsp;Horton or any entity owned or controlled by
	D.R.&nbsp;Horton. However, D.R.&nbsp;Horton will not indemnify
	any person with respect to service as a director, officer,
	employee or agent of Provident Bancorp. of Texas, Inc.
	D.R.&nbsp;Horton may enter into agreements with any person
	providing for indemnification greater or different than that
	provided in the certificate of incorporation. In addition, to
	the full extent permitted by the Delaware General Corporation
	Law, no D.R.&nbsp;Horton director will be personally liable to
	D.R.&nbsp;Horton or its stockholders for or with respect to any
	acts or omissions in the performance of his or her duties as a
	director.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">The certificate of incorporation of Schuler
	provides that a director shall not be liable to Schuler or its
	stockholders for monetary damages for breach of fiduciary duty
	as a director, except for liability (i) for any breach of the
	director&#146;s duty of loyalty to Schuler or its stockholders,
	(ii)&nbsp;for acts or omissions not in good faith or which
	involve intentional misconduct or a knowing violation of law,
	(iii)&nbsp;under Section&nbsp;174 of the Delaware General
	Corporation Law, or (iv)&nbsp;for any transaction from which the
	director derived any improper benefit. If the Delaware General
	Corporation Law is amended to authorize, with approval of the
	stockholders, further reductions in the liability of directors
	for breach of fiduciary duty, then directors of Schuler shall
	not be liable for any such breach to the fullest extent
	permitted by the Delaware General Corporation Law.<BR>
	<BR>
	The bylaws of Schuler also provide that Schuler will indemnify
	its directors and officers against expenses (including
	attorneys&#146; fees), judgments, fines and amounts paid in
	settlement incurred by the directors and officers in that
	capacity in connection with any action, suit or proceeding, if
	the director or officer acted in good faith and in a manner he
	or she reasonably believed to be in or not opposed to the best
	interests of Schuler, and, with respect to any criminal action
	or proceeding, if the director or officer had no reasonable
	cause to believe his or her conduct was unlawful. With respect
	to suits by or on behalf of Schuler, Schuler will not indemnify
	its directors and officers to the extent that a court finds the
	director
	</FONT></TD>
</TR>

</TABLE>
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<P align="center"><FONT size="2">93
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stockholders</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Stockholders</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">or officer liable to Schuler, unless the Delaware
	Court of Chancery or the court in which the action or suit was
	brought finds that under the circumstances the director or
	officer is fairly and reasonably entitled to indemnity.<BR>
	<BR>
	The bylaws of Schuler also provide that the Schuler board has
	the discretion to indemnify any person made a party to any
	action, suit or proceeding because the person is or was an
	employee or other agent of Schuler. The bylaws allow the board
	to advance costs, charges and expenses (including
	attorney&#146;s fees) incurred by the person in defending the
	action, suit, or proceeding.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Amendment of Certificate of
	Incorporation</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Changes to the D.R.&nbsp;Horton certificate of
	incorporation are governed by the Delaware General Corporation
	Law or by applicable law. However, the articles regarding
	election of directors, no action by written consent, amendments
	of bylaws, the number and removal of directors, and special
	meetings may not be amended without the affirmative vote of at
	least 66&nbsp;2/3% of the total voting power of all outstanding
	shares of voting stock.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Changes to the Schuler certificate of
	incorporation are governed by the Delaware General Corporation
	Law or by applicable law; however, the articles regarding voting
	rights, amendments of bylaws and certificate of incorporation,
	no action by written consent, the number and term of directors,
	business combinations, and special meetings may not be amended
	without the affirmative vote of at least 66&nbsp;2/3% of the
	outstanding shares of Class&nbsp;A common stock and the
	66&nbsp;2/3% of the outstanding shares of Class&nbsp;B common
	stock.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Amendment of Bylaws</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">The D.R.&nbsp;Horton bylaws may be altered,
	amended or repealed, or new bylaws may be adopted, by either the
	stockholders or the board of directors. However, the bylaws
	regarding annual meetings, the number and term of office of
	directors, or the election and nomination of directors may not
	be amended without the affirmative vote of at least 66&nbsp;2/3%
	of the total voting power of all outstanding shares of voting
	stock.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">The Schuler bylaws may be altered, amended or
	repealed, or new bylaws may be adopted, by either the
	affirmative vote of a majority of the directors present at a
	meeting at which a quorum is present or by the affirmative vote
	of the holders of at least 66&nbsp;2/3% of the outstanding
	shares of Class&nbsp;A common stock and the holders of at least
	66&nbsp;2/3% of the outstanding shares of Class&nbsp;B common
	stock, each voting as separate classes. However, the bylaw
	regarding the number of directors may not be amended by the
	directors without the affirmative vote of 66&nbsp;2/3% of the
	total number of directors which Schuler would have if there were
	no vacancies.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Special Stockholder Meetings</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Special meetings of the stockholders of
	D.R.&nbsp;Horton may be called by the board of directors, or by
	a committee of the board of directors which has been designated
	by the board and whose powers and authority include the power
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Special meetings of the stockholders of Schuler
	may be called only by the joint action of the Co- Chairman of
	the board of directors and the President or by the Co-Chairman
	or the Secretary at the written request of a majority of the
	total
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">D.R.&nbsp;Horton Stockholders</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Schuler Stockholders</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">to call such meetings.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">number of directors which then constitutes the
	whole board.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Dividends</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R.&nbsp;Horton may declare and pay dividends to
	its stockholders in accordance with the Delaware General
	Corporation Law.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Schuler cannot declare or pay a dividend or
	distribution payable in property or securities of any other
	class or kind on either Class&nbsp;A common stock or
	Class&nbsp;B common stock unless Schuler declares and pays a
	dividend equal in kind and amount on a per share basis and
	payable at the same time on each class.
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<I><FONT size="2">Conversion</FONT></I></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">D.R. Horton does not have more than one class of
	common stock.
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">A holder of Class&nbsp;B common stock may at any
	time convert each share of Class&nbsp;B common stock into one
	share of Class&nbsp;A common stock.
	</FONT></TD>
</TR>

</TABLE>
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<!-- link1 "UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER" -->
<DIV align="left"><A NAME="074"></A></DIV>

<P align="center">
<B><FONT size="2">UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
OF THE MERGER</FONT></B>

<P align="left">
<B><FONT size="2">Generally</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion reflects the opinions of
Gibson, Dunn &#38;&nbsp;Crutcher LLP regarding the material
U.S.&nbsp;federal income tax consequences of the merger
generally applicable to Schuler stockholders who hold their
shares of Schuler common stock as capital assets at the
effective time of the merger. The discussion set forth below
does not address all U.S.&nbsp;federal income tax considerations
that may be relevant to Schuler stockholders in light of their
particular circumstances, and does not apply to Schuler
stockholders that are subject to special treatment under
U.S.&nbsp;federal income tax laws, such as:
</FONT>

<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">foreign persons;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">banks, insurance companies, dealers in
	securities, tax-exempt organizations, and stockholders subject
	to the alternative minimum tax;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">stockholders who hold Schuler common stock as
	part of a hedge, straddle, or other risk reduction arrangement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">stockholders who dissent from the merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">stockholders who acquired their Schuler common
	stock through stock option or stock purchase programs or
	otherwise as compensation;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">stockholders whose functional currency is not the
	U.S.&nbsp;dollar.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In addition, this discussion does not address the
tax consequences of the merger under foreign, state, or local
tax laws.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Schuler stockholders are urged to consult
their own tax advisors regarding the tax consequences to them of
the merger based on their particular circumstances, including
the application and effect of federal, state, local, and foreign
tax laws.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion is based on the Internal
Revenue Code, applicable Treasury Regulations, judicial
decisions, and administrative rulings and practice, all as of
the date of this Joint Proxy Statement/ Prospectus. All of these
are subject to change. Any such change could be applied
retroactively and could affect the accuracy of the statements
and conclusions set forth in this discussion and the tax
consequences of the merger to D.R.&nbsp;Horton, Schuler, and/or
their respective stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither D.R.&nbsp;Horton nor Schuler has
requested or will request a ruling from the Internal Revenue
Service with regard to any of the tax consequences of the
merger. D.R.&nbsp;Horton and Schuler have each received from
Gibson, Dunn &#38; Crutcher LLP an opinion that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the merger will constitute a
	&#147;reorganization&#148; within the meaning of
	Section&nbsp;368(a) of the Internal Revenue Code;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton and Schuler will each be a party
	to the reorganization within the meaning of Section&nbsp;368(b)
	of the Internal Revenue Code.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">It is a condition to the consummation of the
merger that counsel render the same opinions as of the closing
date. The opinions are and will be based upon the assumption
that the merger will take place in the manner described in the
merger agreement, and also assume and will assume the truth and
accuracy of certain factual representations made by
D.R.&nbsp;Horton and Schuler which are customarily given in
transactions of this kind.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Opinions of counsel are not binding on the
Internal Revenue Service or the courts. If the Internal Revenue
Service were to assert successfully that the merger is not a
reorganization within the meaning of Section&nbsp;368(a) of the
Internal Revenue Code, then each Schuler stockholder would be
required to recognize gain or loss equal to the difference
between (i)&nbsp;the fair market value of the D.R.&nbsp;Horton
common stock and the amount of cash received in the exchange and
(ii)&nbsp;the stockholder&#146;s tax basis in the
</FONT>

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<DIV align="left">
<FONT size="2">Schuler stock surrendered therefor. In such
event, a Schuler stockholder&#146;s total initial tax basis in
the D.R.&nbsp;Horton common stock received would be equal to its
fair market value at the effective time of the merger, and the
stockholder&#146;s holding period for the D.R.&nbsp;Horton
common stock would begin on the day after the merger. The gain
or loss recognized would be long-term capital gain or loss if
the Schuler stockholder&#146;s holding period for the Schuler
common stock was more than one year.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The federal income tax consequences to a
particular Schuler stockholder of the treatment of the merger as
a reorganization will vary depending on whether the stockholder
receives D.R.&nbsp;Horton common stock, cash, or a combination
of D.R.&nbsp;Horton common stock and cash in the merger. At the
time that a Schuler stockholder makes an election as to the form
of consideration to be received in the merger and at the time
that the stockholder votes on the merger, the stockholder will
not know if or to what extent the proration procedures will be
applicable. Therefore, at those times, the Schuler stockholder
will not know the extent to which the stockholder&#146;s elected
form of merger consideration will be given effect and thus will
not know the tax consequences of the merger to the stockholder.
</FONT>

<P align="left">
<B><FONT size="2">Consequences to D.R. Horton
Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton stockholders will not recognize
gain or loss as a result of the merger.
</FONT>

<P align="left">
<B><FONT size="2">Consequences to Schuler
Stockholders&nbsp;&#151; Recognition of Gain or Loss</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed below, the U.S.&nbsp;federal income
tax consequences of the merger to a particular Schuler
stockholder will depend upon the form of consideration actually
received by that stockholder. Based on the assumption that the
merger will constitute a reorganization, and subject to the
limitations and qualifications set forth in this discussion, the
following U.S.&nbsp;federal income tax consequences will result
from the merger:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">A Schuler stockholder who exchanges shares of
	Schuler common stock for a combination of D.R.&nbsp;Horton
	common stock and cash (other than cash in lieu of a fractional
	share) will generally recognize gain in an amount equal to the
	lesser of&nbsp;&#151;
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="1%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the difference between (i)&nbsp;the fair market
	value of all property (D.R.&nbsp;Horton common stock and cash)
	received in the exchange and (ii)&nbsp;the stockholder&#146;s
	basis in the Schuler common stock;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the amount of cash received in the exchange.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">A Schuler stockholder who exchanges shares of
	Schuler common stock for a combination of D.R.&nbsp;Horton
	common stock and cash will not be permitted to recognize a loss
	in the exchange.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">A Schuler stockholder who exchanges shares of
	Schuler common stock solely for D.R.&nbsp;Horton common stock
	(and possibly cash in lieu of a fractional share) will not
	recognize gain or loss, except with respect to the fractional
	share, as discussed below.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">A Schuler stockholder who exchanges shares of
	Schuler common stock solely for cash will recognize gain (or,
	alternatively, as discussed below, likely will be permitted to
	recognize loss) equal to the difference between the amount of
	cash received and the stockholder&#146;s basis in the Schuler
	common stock.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The total initial tax basis of any
	D.R.&nbsp;Horton common stock received by a Schuler stockholder
	in the merger will be equal to the total tax basis of the
	Schuler common stock exchanged therefor, decreased by the amount
	of cash (other than cash in lieu of a fractional share) received
	in the exchange (if any), and increased by the amount of gain
	recognized in the exchange (if any).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">A Schuler stockholder who receives cash in lieu
	of a fractional share of D.R.&nbsp;Horton common stock will
	generally recognize gain or loss in an amount equal to the
	difference between (i)&nbsp;the amount
	</FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD></TD>
	<TD align="left">
	<FONT size="2">of cash received in lieu of the fractional share
	and (ii)&nbsp;the stockholder&#146;s basis allocated to the
	fractional share, determined in the manner described in the
	preceding point.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The holding period of the D.R.&nbsp;Horton common
	stock received by a Schuler stockholder in the merger will
	include the period for which the Schuler common stock was held.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Schuler Stockholder Receiving D.R.&nbsp;Horton
Common Stock and Cash&nbsp;&#151; Character of Gain</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The character of the gain recognized by a Schuler
stockholder upon the receipt of cash depends on that
stockholder&#146;s particular situation. Any gain recognized by
a Schuler stockholder receiving a combination of
D.R.&nbsp;Horton common stock and cash in the merger will be
characterized as capital gain unless the receipt of cash is
treated as having the effect of the distribution of a dividend,
in which case the gain will be characterized as ordinary income
to the extent of the stockholder&#146;s allocable share of
Schuler&#146;s accumulated earnings and profits. Any capital
gain will be treated as long-term capital gain if the Schuler
stockholder&#146;s holding period for the Schuler common stock
was more than one year at the effective time of the merger. In
determining whether such gain is capital gain or ordinary
income, the Internal Revenue Service will (i)&nbsp;treat each
Schuler stockholder as having exchanged Schuler common stock
solely for D.R.&nbsp;Horton common stock and then
(ii)&nbsp;treat each recipient of D.R.&nbsp;Horton common stock
as having sold back a portion of that stock to D.R.&nbsp;Horton
in exchange for cash in a hypothetical redemption. The cash
received in the hypothetical redemption will have the effect of
the distribution of a dividend unless such redemption
(i)&nbsp;is &#147;substantially disproportionate&#148; with
respect to the stockholder or (ii)&nbsp;is &#147;not essentially
equivalent to a dividend&#148; with respect to the stockholder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The hypothetical redemption will be
&#147;substantially disproportionate&#148; with respect to a
Schuler stockholder if, immediately after the
redemption&nbsp;&#151;
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the stockholder owns less than 50% of the total
	voting power of the outstanding D.R.&nbsp;Horton stock;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the stockholder owns less than 80% of the
	percentage of voting power of the D.R.&nbsp;Horton common stock
	he or she owned or was treated as owning before the hypothetical
	redemption;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the stockholder owns less than 80% of the
	percentage of D.R.&nbsp;Horton common stock (measured by fair
	market value) he or she owned or was treated as owning before
	the hypothetical redemption.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a stockholder fails any part of this test, the
hypothetical redemption may still qualify as &#147;not
essentially equivalent to a dividend&#148; if it results in a
&#147;meaningful reduction&#148; of the stockholder&#146;s
proportionate interest in D.R.&nbsp;Horton. This is a highly
subjective standard. Accordingly, neither D.R. Horton, Schuler,
nor their counsel can provide any substantial assurance that a
particular hypothetical redemption will qualify as a meaningful
reduction. However, based on a published ruling of the Internal
Revenue Service, a stockholder with a relatively minimal
interest in D.R.&nbsp;Horton and no ability to exercise control
over D.R.&nbsp;Horton&#146;s corporate affairs will be treated
as having experienced a meaningful reduction of his or her
proportionate interest in D.R.&nbsp;Horton as a result of the
hypothetical redemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In applying these redemption tests, the
constructive ownership rules of the Internal Revenue Code must
be taken into account. Under these rules, each Schuler
stockholder is treated as owning, in addition to the
D.R.&nbsp;Horton common stock directly owned by the stockholder
(including the D.R.&nbsp;Horton common stock received in the
merger), any D.R.&nbsp;Horton common stock owned by certain
family members, any D.R.&nbsp;Horton common stock owned by
partnerships, trusts, certain corporations, and other entities
in which the stockholder has an interest (in proportion to the
stockholder&#146;s interest), and any D.R.&nbsp;Horton common
stock that the stockholder has a right or option to acquire. In
addition, each Schuler stockholder that is a corporation (other
than an S corporation) is treated as owning any D.R.&nbsp;Horton
common stock owned by its stockholders who own 50% or more of
the value of the stock of the corporation; and each Schuler
stockholder that is a partnership, trust, or other entity is
treated as owning any D.R.&nbsp;Horton common stock owned by its
partners, beneficiaries, or owners. The redemption tests
described above and the application of the constructive
ownership rules are complex and will depend upon each Schuler
stockholder&#146;s particular facts and circumstances.
Accordingly, each Schuler stockholder that receives a portion of
the
</FONT>

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<DIV align="left">
<FONT size="2">merger consideration in cash is urged to consult
its tax advisor to determine the character of any gain that may
be recognized as a result of the merger.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the hypothetical redemption of
D.R.&nbsp;Horton common stock in exchange for cash fails to
satisfy both the &#147;substantially disproportionate&#148; test
and the &#147;not essentially equivalent to a dividend&#148;
test with respect to a particular Schuler stockholder, then the
gain recognized by that stockholder will be characterized as a
distribution with respect to the stock. Such a distribution will
be treated as a dividend to the extent of the stockholder&#146;s
allocable share of Schuler&#146;s accumulated earnings and
profits. A dividend payment received by a stockholder is
generally treated as ordinary income for federal income tax
purposes. If the amount of the distribution exceeds the
stockholder&#146;s allocable share of Schuler&#146;s accumulated
earnings and profits, then the excess will be treated as capital
gain. A Schuler stockholder that is a corporation and that
receives a dividend may be eligible to claim a
dividends-received deduction, and may be subject to the
&#147;extraordinary dividend&#148; provisions of the Internal
Revenue Code.
</FONT>

<P align="left">
<B><FONT size="2">Schuler Stockholder Receiving Solely
Cash&nbsp;&#151; Character of Gain and Recognition of
Loss</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The character of income, gain, or loss recognized
by a Schuler stockholder receiving solely cash in exchange for
Schuler common stock is determined under an analysis similar to
that described above, except that the Internal Revenue Service
may treat the stockholder&#146;s Schuler common stock as having
been redeemed by Schuler immediately before the merger, rather
than as having been exchanged for D.R.&nbsp;Horton common stock
and then redeemed by D.R.&nbsp;Horton immediately after the
merger. In either case, if the hypothetical redemption satisfies
the &#147;substantially disproportionate&#148; test or the
&#147;not essentially equivalent to a dividend&#148; test with
respect to a particular Schuler stockholder, or if the
hypothetical redemption results in a &#147;complete
termination&#148; of the stockholder&#146;s interest in the
relevant entity (after giving effect to the constructive
ownership rules described above), then any gain recognized by
the stockholder will be treated as capital gain and the
stockholder will be permitted to recognize loss.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the hypothetical redemption fails all three of
these redemption tests with respect to a particular Schuler
stockholder, then the stockholder will not be permitted to
recognize loss, and the cash received by that stockholder could
be characterized as a distribution with respect to stock, and
thus be treated as a dividend to the extent of the
stockholder&#146;s allocable share of Schuler&#146;s current and
accumulated earnings and profits. In such an event, however, the
stockholder might nonetheless assert successfully that the
transaction constitutes a sale of the stockholder&#146;s Schuler
stock, such that the three redemption tests are inapplicable,
and that he or she is entitled to receive capital gain (or
capital loss) treatment. Because of this complexity and
uncertainty, Schuler stockholders receiving solely cash in the
merger are especially urged to consult their own tax advisors
with regard to their individual tax consequences.
</FONT>

<P align="left">
<B><FONT size="2">Backup Withholding</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments made to a Schuler stockholder in
connection with the merger may be subject to &#147;backup
withholding&#148; at a rate of 30% unless the stockholder
(a)&nbsp;provides a correct taxpayer identification number
(which, for an individual stockholder, generally is the
stockholder&#146;s social security number) and any other
required information to the exchange agent or (b)&nbsp;is a
corporation or comes within certain exempt categories and, when
required, demonstrates that fact and otherwise complies with
applicable requirements of the backup withholding rules. Backup
withholding will not apply to a payment made to a Schuler
stockholder who completes and signs the substitute Form&nbsp;W-9
that is included as part of the transmittal letter, or who
otherwise proves to D.R.&nbsp;Horton and its exchange agent that
it is exempt from backup withholding. A Schuler stockholder who
does not provide a correct taxpayer identification number may be
subject to penalties imposed by the Internal Revenue Service.
Backup withholding is not an additional tax and may be claimed
as a credit against a Schuler stockholder&#146;s federal income
tax liability, provided that the required information is
furnished to the Internal Revenue Service.
</FONT>

<P align="center"><FONT size="2">99
</FONT>

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<P align="left">
<B><FONT size="2">Reporting and Recordkeeping</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Schuler stockholder who exchanges Schuler
common stock in the merger for D.R.&nbsp;Horton common stock, or
for a combination of D.R.&nbsp;Horton common stock and cash, is
required to retain records of the transaction, and to attach to
the stockholder&#146;s federal income tax return for the year of
the merger a statement setting forth all relevant facts with
respect to the nonrecognition of gain or loss in the exchange.
At a minimum, the statement must include (i)&nbsp;the
stockholder&#146;s tax basis in the Schuler common stock
surrendered and (ii)&nbsp;the amount of cash (if any) and the
fair market value, as of the effective date of the merger, of
the D.R.&nbsp;Horton common stock received in exchange therefor.
</FONT>

<P align="left">
<B><FONT size="2">Consequences to D.R.&nbsp;Horton and
Schuler</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the treatment of the merger as a
reorganization, neither D.R.&nbsp;Horton nor Schuler will
recognize gain or loss solely as a result of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is expected that Schuler and its subsidiaries
will file a statement with the Internal Revenue Service to make
the election provided by Section&nbsp;341(f) of the Internal
Revenue Code prior to the merger. This election provides that
applicable gain from the sale or exchange of Schuler stock by
stockholders covered by the election shall be treated as capital
gain. However, this election will also restrict Schuler&#146;s
ability to make certain otherwise nontaxable transfers of its
assets without paying income tax on the gains realized upon such
asset transfers. In particular, notwithstanding the treatment of
the merger as a reorganization, if the election is made Schuler
generally, in the absence of the consent by D.R.&nbsp;Horton
described in the following paragraph, would be required to
recognize gain on the transfer of its assets to D.R.&nbsp;Horton
in the merger. Because Schuler will become a part of
D.R.&nbsp;Horton in the merger, if Schuler were to recognize
such gain and thus incur a tax liability, D.R.&nbsp;Horton would
be responsible for that liability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To avoid this recognition of gain,
D.R.&nbsp;Horton will file a statement with the Internal Revenue
Service in which it will consent to the same restrictions on
making nontaxable asset transfers. Thus, following the merger,
D.R.&nbsp;Horton&#146;s ability to defer income taxation on
certain transfers of the assets it receives from Schuler will be
restricted to the same extent as Schuler&#146;s ability to make
such transfers was restricted before the merger. This
circumstance may inhibit D.R.&nbsp;Horton from making transfers
that it would otherwise make or may cause D.R.&nbsp;Horton to
incur tax at the time of transfer. At the request of
D.R.&nbsp;Horton, Schuler has taken or will take prior to the
merger certain steps intended to minimize the potential effect
on D.R.&nbsp;Horton of these restrictions. D.R.&nbsp;Horton does
not believe that the consent will have a material adverse effect
on its financial condition or its results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">The preceding discussion does not purport
to be a complete analysis of all potential tax consequences of
the merger that may be relevant to a particular Schuler
stockholder. Holders of Schuler common stock are urged to
consult their own tax advisors regarding the specific tax
consequences to them of the merger, including the applicability
and effect of foreign, state, local, and other tax
laws.</FONT></I></B>

<P align="center"><FONT size="2">100
</FONT>

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<!-- link1 "ADDITIONAL INFORMATION ABOUT D.R. HORTON" -->
<DIV align="left"><A NAME="075"></A></DIV>

<P align="center">
<B><FONT size="2">ADDITIONAL INFORMATION ABOUT D.R.
HORTON</FONT></B>

<!-- link2 "Directors and Executive Officers" -->
<DIV align="left"><A NAME="076"></A></DIV>

<P align="left">
<B><FONT size="2">Directors and Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R. Horton&#146;s directors and executive
officers are as follows:
</FONT>


<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Director</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Since</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Occupation and Business Experience</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald R. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">51</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1991</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Horton has been Chairman of the Board of D.R.
	Horton since it was formed in July 1991, and he was its
	President from July 1991 until November 1998. He has been
	involved in the real estate and homebuilding industries since
	1972, and he was the sole or principal shareholder, director and
	president of each of D.R. Horton&#146;s predecessor companies
	since their respective organization, which date from 1978 to
	1990. Donald R. Horton is the brother of Terrill J. Horton and
	the nephew of Richard L. Horton.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Bradley S. Anderson
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1998</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Anderson is a Senior Vice President of CB
	Richard Ellis, Inc., an international real estate brokerage
	company, and he has had various positions in Phoenix, Arizona
	with its predecessor, CB Commercial Real Estate Group, Inc.,
	since January 1987. He served as Interim Chairman of the Board
	of Continental Homes Holding Corp. from October 1997 through
	April 1998, when it merged into D.R. Horton, and he became a
	director of D.R. Horton.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>


<P align="center"><FONT size="2">101
</FONT>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Director</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Since</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Occupation and Business Experience</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard Beckwitt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">42</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1993</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Beckwitt is the President of EVP Capital,
	L.P. through which he advises and assists D.R. Horton in its
	acquisition activities. From April 2000 through June 2001, EVP
	Capital was a general partner of Encore Venture Partners&nbsp;II
	(Texas), L.P., a venture capital affiliate through which D.R.
	Horton invested in technology start-up and emerging growth
	companies. Mr.&nbsp;Beckwitt was an Executive Vice President of
	D.R. Horton from March 1993 until November 1998. From July 1996
	until November 1998, Mr. Beckwitt also was President of D.R.
	Horton&#146;s Investments Division. From November 1998 to March
	2000, he was President of D.R. Horton. From 1986 to 1993,
	Mr.&nbsp;Beckwitt worked in the Mergers and Acquisitions and
	Corporate Finance Departments at Lehman Brothers Inc.,
	specializing in the homebuilding and building products
	industries.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Samuel R. Fuller
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Fuller is Executive Vice President, Treasurer
	and Chief Financial Officer of D.R. Horton. He has been an
	employee of D.R. Horton since 1992. He was promoted to
	Controller in 1995, and from Controller to Executive Vice
	President, Treasurer and Chief Financial Officer in 2000. Prior
	to 1992, Mr.&nbsp;Fuller served for twelve years as Senior Vice
	President and General Auditor of Texas American Bancshares,
	Inc., a Fort&nbsp;Worth, Texas based commercial bank holding
	company.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard I. Galland
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">85</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Galland is an attorney. He was formerly the
	Chief Executive Officer and Chairman of the Board of Fina, Inc.,
	a director of First RepublicBank Corporation and Of Counsel to
	the law firm of Jones, Day, Reavis&nbsp;&#38; Pogue.
	Mr.&nbsp;Galland is currently serving as a director of
	Associated Materials, Inc.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard L. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">From May 1985 until September 1997,
	Mr.&nbsp;Horton was Vice President in charge of D.R.
	Horton&#146;s Dallas-Fort&nbsp;Worth East Division. Since
	September 1997, he has been retired. Richard L. Horton is the
	uncle of Donald R. Horton and Terrill J. Horton.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">102
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Director</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Since</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Principal Occupation and Business Experience</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terrill J. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">53</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">From September 1981 until September 1997, Mr.
	Horton was Vice President in charge of one of the two former
	sales divisions that now form D.R. Horton&#146;s
	Dallas-Fort&nbsp;Worth North Division. Since September 1997, he
	has been retired. Terrill J. Horton is the brother of Donald R.
	Horton and the nephew of Richard L. Horton.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Francine I. Neff
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">76</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Since 1979, Ms.&nbsp;Neff has been Vice President
	of NETS, Inc., a privately-owned investment company, and a
	partner in EVEN Resources, a privately-owned consulting service
	and investment company. Ms.&nbsp;Neff was formerly Treasurer of
	the United States and National Director of the U.S.&nbsp;Savings
	Bonds division of the U.S.&nbsp;Department of Treasury.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Scott J. Stone
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1992</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Since July 2001, Mr.&nbsp;Stone has served as a
	Vice President of D.R. Horton and President of its Atlanta
	division. He was a Vice President in charge of various divisions
	of D.R. Horton from 1988 to 1994, and was Vice
	President&nbsp;&#151; Eastern Region of D.R. Horton from August
	1994 to September&nbsp;30, 1996. From October 1996 to July 2001,
	Mr.&nbsp;Stone was active in personal investments, acted as a
	consultant to D.R. Horton and served as an interim Division
	Manager for various divisions from time to time.
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald J. Tomnitz
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">53</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1995</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Mr. Tomnitz is Vice Chairman, President and Chief
	Executive Officer of D.R. Horton. He was a Vice President in
	charge of various divisions of D.R. Horton from 1983 until he
	was elected Vice President&nbsp;&#151; Western Region of D.R.
	Horton in August 1994. From July 1996 until November 1998,
	Mr.&nbsp;Tomnitz was President of D.R. Horton&#146;s
	Homebuilding Division; in January 1998 he was elected an
	Executive Vice President of D.R. Horton; in November 1998 he was
	elected Vice Chairman and Chief Executive Officer of D.R.
	Horton; and in March 2000, he became President as well.
	Mr.&nbsp;Tomnitz previously was a Captain in the U.S.&nbsp;Army,
	a Vice President of RepublicBank of Dallas, N.A., and a Vice
	President of Crow Development Company, a Trammell Crow Company.
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">103
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, D.R.&nbsp;Horton has agreed,
effective as of the closing of the merger, to use its best
efforts to appoint James&nbsp;K. Schuler to the D.R.&nbsp;Horton
board. For more information about Mr.&nbsp;Schuler, please refer
to the section entitled &#147;Directors and Management of
D.R.&nbsp;Horton Following the Merger.&#148;
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;<I>Other Executive
Officers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stacey H. Dwyer, age&nbsp;35, is an Executive
Vice President of D.R.&nbsp;Horton and is in charge of investor
relations for D.R.&nbsp;Horton. She has been an employee of
D.R.&nbsp;Horton since 1991. She was promoted from Assistant
Secretary to Assistant Vice President in 1998, and from
Assistant Vice President to Executive Vice President in 2000.
Prior to 1991, Ms.&nbsp;Dwyer was an auditor for
Ernst&nbsp;&#38; Young.
</FONT>

<!-- link1 "D.R. Horton&#146;s Principal Stockholders" -->
<DIV align="left"><A NAME="077"></A></DIV>

<P align="left">
<B><FONT size="2">D.R. Horton&#146;s Principal
Stockholders</FONT></B>

<!-- link2 "Management" -->
<DIV align="left"><A NAME="078"></A></DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;<I>Management</I></FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the beneficial
ownership of D.R.&nbsp;Horton&#146;s common stock as of
January&nbsp;14, 2002 by (1)&nbsp;all directors and nominees for
director of D.R.&nbsp;Horton, (2)&nbsp;James&nbsp;K. Schuler,
who will become a director as of the closing of the merger,
(3)&nbsp;all executive officers named in the summary
compensation table under &#147;Executive Compensation&#148; and
(4)&nbsp;all directors and executive officers of
D.R.&nbsp;Horton as a group. Unless stated otherwise, the shares
are owned directly and the named beneficial owners possess sole
voting and investment power with respect to the shares set forth
in the table.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Amount and Nature of</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Pro Forma Amount and Nature of</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock Beneficially</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock Beneficially Owned</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Owned Pre-Merger</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Post-Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name of Beneficial Owner</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially Owned(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Class</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially Owned(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Class</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald R. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,956,406</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.6</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,956,406</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Bradley S. Anderson
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,796</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,796</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard Beckwitt
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191,178</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">191,178</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stacey H. Dwyer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">21,150</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Samuel R. Fuller
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,961</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,961</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard I. Galland
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,156</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,156</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard L. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">491,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">491,975</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terrill J. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,106,623</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,106,623</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Francine I. Neff
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,278</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,278</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">James&nbsp;K. Schuler
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,438</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,092,113</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(4)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Scott J. Stone
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,525</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald J. Tomnitz
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220,640</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">220,640</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(5)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All directors and named executive officers as a
	group (12&nbsp;persons)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14,031,126</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(6)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,120,801</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(6)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="2%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">*</FONT></TD>
	<TD align="left">
	<FONT size="2">Less than 1%
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Beneficial ownership includes 448,179 pre-merger
	shares and 452,693 post-merger shares which the following
	executive officers and directors could acquire by exercising
	stock options on, or within 60&nbsp;days after, January&nbsp;14,
	2002: Mr.&nbsp;Anderson&nbsp;&#151; 3,167,
	Mr.&nbsp;Beckwitt&nbsp;&#151; 191,178,
	Ms.&nbsp;Dwyer&nbsp;&#151; 20,543, Mr.&nbsp;Fuller&nbsp;&#151;
	15,473, Mr.&nbsp;Galland&nbsp;&#151; 4,840,
	Ms.&nbsp;Neff&nbsp;&#151; 1,210, Mr.&nbsp;Tomnitz&nbsp;&#151;
	211,768, and Mr.&nbsp;Schuler&nbsp;&#151; 4,514 (post-merger).
	</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares do not include an aggregate of
	579,031&nbsp;shares owned by Mr.&nbsp;Horton&#146;s adult
	children. Mr.&nbsp;Horton disclaims any beneficial interest in
	these shares. Mr.&nbsp;Horton&#146;s address is D.R. Horton,
	Inc., 1901 Ascension Blvd., Suite&nbsp;100, Arlington, Texas
	76006. As reported in Amendment No.&nbsp;2 to Schedule&nbsp;13D
	filed with the SEC on October&nbsp;23, 2001, the
	8,956,406&nbsp;shares are subject to a voting agreement dated
	October&nbsp;22, 2001 among Mr.&nbsp;Horton, Terrill&nbsp;J.
	Horton, as trustee for four trusts for the benefit of family
	members of Donald R. Horton, and Schuler Homes, Inc. pursuant to
	which
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">104
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;Horton has agreed to vote his respective
	shares in favor of the proposed merger. Schuler disclaims
	beneficial ownership of these shares.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares include 791,036&nbsp;shares owned by
	Terrill J. Horton and an aggregate of 3,315,587&nbsp;shares,
	consisting of 499,995&nbsp;shares owned by the Donald Ray Horton
	Trust, 456,002&nbsp;shares owned by the Martha Elizabeth Horton
	Trust, and 1,179,795&nbsp;shares owned by each of the Donald
	Ryan Horton Trust and the Douglas Reagan Horton Trust.
	Terrill&nbsp;J. Horton serves as the sole trustee for each of
	the foregoing trusts. The trusts were established by
	Donald&nbsp;R. Horton and his spouse for the benefit of their
	descendants. Terrill&nbsp;J. Horton&#146;s address is 1309 Eagle
	Bend Drive, Southlake, Texas 76092. As reported in a
	Schedule&nbsp;13D filed with the SEC on October&nbsp;31, 2001,
	the 3,315,587&nbsp;shares are subject to a voting agreement
	dated October&nbsp;22, 2001 among Donald&nbsp;R. Horton,
	Terrill&nbsp;J. Horton, as trustee for four trusts for the
	benefit of family members of Donald R. Horton, and Schuler
	Homes, Inc. pursuant to which Terrill&nbsp;J. Horton has agreed
	to vote these respective shares in favor of the proposed merger.
	Schuler disclaims beneficial ownership of these shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The pro forma shares beneficially owned by
	Mr.&nbsp;Schuler post-merger assume that Mr.&nbsp;Schuler will
	receive the base merger consideration of $4.09 in cash and
	.487&nbsp;shares of D.R.&nbsp;Horton common stock in exchange
	for each share of Schuler common stock owned by Mr.&nbsp;Schuler.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares do not include 6,856&nbsp;shares
	owned by an IRA for the benefit of Mr.&nbsp;Tomnitz&#146;s
	spouse. Mr.&nbsp;Tomnitz disclaims any beneficial interest in
	these shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Excluding the option shares in footnote (1) from
	the calculation, these shares represent 17.6% of the total
	shares outstanding pre-merger, and 19.2% of the total shares
	outstanding post-merger.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Certain Other Beneficial Owners" -->
<DIV align="left"><A NAME="079"></A></DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;<I>Certain Other Beneficial
Owners</I></FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on filings made under the Exchange Act for
Schuler and D.R.&nbsp;Horton as of January&nbsp;14, 2002, the
only other known beneficial owners of more than 5% of D.R.
Horton&#146;s common stock pre-merger and post-merger on a pro
forma basis were as follows:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Pro Forma Shares</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Shares Beneficially</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Beneficially Owned</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Owned Pre-Merger</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Post-Merger</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name and Address of Beneficial Owner</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">FMR Corp.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,232,694</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,232,694</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<FONT size="2">82 Devonshire Street<BR>
	Boston, Massachusetts 02109
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Neuberger Berman, LLC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Neuberger Berman,&nbsp;Inc.&nbsp;</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,110,408</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,110,408</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.2</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">605 Third Avenue<BR>
	New York, New York 10158-3689
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based solely upon information contained in the
	Schedule&nbsp;13G of FMR Corp., filed with the SEC with respect
	to the common stock owned as of May&nbsp;31, 2001.
	Edward&nbsp;C. Johnson 3d, Chairman of FMR&nbsp;Corp., and
	Abigail&nbsp;P. Johnson, a director of FMR&nbsp;Corp., are also
	listed as reporting persons on this Schedule&nbsp;13G. According
	to this Schedule&nbsp;13G, 63,800 of these shares are owned with
	sole power to vote or direct the vote, and all of these shares
	are owned with sole power to dispose of the shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Based solely upon information contained in the
	Schedule&nbsp;13G of Neuberger Berman, LLC, filed with the SEC
	with respect to the common stock owned as of December&nbsp;29,
	2000. According to the Schedule&nbsp;13G, 2,875,482 of these
	shares are owned with sole power to vote or direct the vote, and
	all of these shares are owned with shared power to dispose of
	the shares.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, as reported in a Schedule&nbsp;13D
filed with the SEC on November&nbsp;2, 2001, Schuler has entered
into a voting agreement, dated as of October&nbsp;22, 2001, with
Donald R. Horton, individually, and Terrill&nbsp;J. Horton, as
trustee for four trusts for the benefit of family members of
Donald&nbsp;R. Horton, pursuant to which Donald&nbsp;R. Horton
and Terrill&nbsp;J. Horton have agreed to vote their shares in
favor of the
</FONT>

<P align="center"><FONT size="2">105
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">proposed merger. Schuler does not have any rights
as a stockholder of D.R. Horton, Inc. pursuant to such voting
agreement. Accordingly, Schuler expressly disclaims beneficial
ownership of all shares subject to such voting agreement.
</FONT>
</DIV>

<!-- link2 "Executive Compensation" -->
<DIV align="left"><A NAME="080"></A></DIV>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables show, with respect to the
Chief Executive Officer and the other executive officers of
D.R.&nbsp;Horton, all plan and non-plan compensation awarded,
earned or paid for all services rendered in all capacities to
D.R. Horton during the periods indicated.
</FONT>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="23%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><B><FONT size="1">Long Term Compensation</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Payouts</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal</FONT></B></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options/</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">LTIP</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Salary</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">SARs</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Payouts</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Donald R. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2001</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">400,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,000,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">53,248</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Chairman of Board and
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">320,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">850,367</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,030</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">44,907</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(3)</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1999</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">235,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,611,600</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">35,264</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(4)</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Donald J. Tomnitz
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2001</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">300,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2,000,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">55,500</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">41,391</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Vice Chairman of the
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">250,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">680,292</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,428</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">35,860</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(3)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Board, President, CEO
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1999</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">185,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">1,134,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">28,397</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(4)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">and Director
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Samuel R. Fuller
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2001</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">170,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">200,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">22,200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">24,842</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Executive Vice President,
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">159,583</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">141,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">385</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">24,733</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(3)</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="1">Treasurer, CFO and Director
	</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Stacey H. Dwyer
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2001</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">114,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">50,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">22,200</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">15,870</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(2)</FONT></TD>
</TR>

<TR>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="1">Executive Vice President
	</FONT></DIV>
	</TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">2000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">102,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">10,000</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD><FONT size="1">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="1">3,360</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="1">(3)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Reimbursement of payroll taxes on credits to the
	D.R.&nbsp;Horton, Inc. Supplemental Executive Retirement Plan
	No.&nbsp;2, or SERP&nbsp;2, in prior fiscal years.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These amounts represent (a)&nbsp;credits made by
	D.R.&nbsp;Horton of $40,000, $30,000, $17,000 and $11,400 to the
	respective accounts of Messrs.&nbsp;Horton, Tomnitz, Fuller and
	Ms.&nbsp;Dwyer under SERP&nbsp;2, (b)&nbsp;the above-market
	portion of earnings of $7,241, $5,091 and $1,542 to the
	respective accounts of Messrs.&nbsp;Horton, Tomnitz and Fuller
	under SERP&nbsp;2, (c)&nbsp;matching contributions by
	D.R.&nbsp;Horton of $5,100 to the accounts of each of
	Messrs.&nbsp;Tomnitz and Fuller and $4,807 and $4,470 to the
	respective accounts of Mr.&nbsp;Horton and Ms.&nbsp;Dwyer under
	the D.R.&nbsp;Horton, Inc. Profit Sharing Plus Plan, and
	(d)&nbsp;group health plan premiums of $1,200 paid by
	D.R.&nbsp;Horton for the benefit of each of Messrs.&nbsp;Horton,
	Tomnitz and Fuller.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These amounts represent (a)&nbsp;credits made by
	D.R.&nbsp;Horton of $32,000, $25,000 and $17,000 to the
	respective accounts of Messrs.&nbsp;Horton, Tomnitz and Fuller
	under SERP&nbsp;2, (b)&nbsp;the above-market portion of earnings
	of $6,607, $4,560, and $1,070 to the respective accounts of
	Messrs.&nbsp;Horton, Tomnitz and Fuller under SERP&nbsp;2,
	(c)&nbsp;matching contributions by D.R.&nbsp;Horton of $5,100 to
	the accounts of each of Messrs.&nbsp;Horton and Tomnitz and
	$6,063 and $3,360 to the respective accounts of Mr.&nbsp;Fuller
	and Ms.&nbsp;Dwyer under the Profit Sharing Plus Plan, and
	(d)&nbsp;group health plan premiums of $1,200 paid by
	D.R.&nbsp;Horton for the benefit of each of Messrs.&nbsp;Horton
	and Tomnitz and $600 for Mr.&nbsp;Fuller.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These amounts represent (a)&nbsp;credits made by
	D.R.&nbsp;Horton of $23,500 and $18,500 to the respective
	accounts of Messrs.&nbsp;Horton and Tomnitz under the
	SERP&nbsp;2, (b)&nbsp;the above-market portion of earnings of
	$5,764, and $3,897 to the respective accounts of
	Messrs.&nbsp;Horton and Tomnitz under SERP&nbsp;2,
	(c)&nbsp;matching contributions by D.R.&nbsp;Horton of $4,800 to
	the accounts of each of
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">106
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD align="left">
	<FONT size="2">Messrs.&nbsp;Horton and Tomnitz under the Profit
	Sharing Plus Plan, and (d)&nbsp;group health plan premiums of
	$1,200 paid by D.R.&nbsp;Horton for the benefit of each of
	Messrs.&nbsp;Horton and Tomnitz.
	</FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Option/ SAR Grants in Last Fiscal
Year</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Potential Realizable Value</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">at Assumed Annual Rates</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">of Stock Price Appreciation</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">% of Total</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">for Option Term(1)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options/SARs</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted to</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">5%</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">10%</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Executives</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options/SARs</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Employees in</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise or</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Stock Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">(Stock Price</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Receiving Grants</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Base Price</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$24.48844)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">$38.99375)</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald J. Tomnitz
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">55,500</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.24%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.0338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/02/10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">524,734</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,329,779</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Samuel R. Fuller
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,200</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.10%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.0338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/02/10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">209,894</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">531,911</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stacey H. Dwyer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,200</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">(3)</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.10%</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15.0338</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/02/10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">209,894</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">531,911</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These dollar amounts are not intended to forecast
	future appreciation of the D.R.&nbsp;Horton common stock price.
	Executives will not benefit unless the D.R.&nbsp;Horton common
	stock price increases above the stock option exercise price. Any
	gain to the executives resulting from D.R.&nbsp;Horton common
	stock price appreciation would benefit all holders of
	D.R.&nbsp;Horton common stock. The additional value realized by
	all holders of D.R.&nbsp;Horton common stock as a group based on
	these assumed appreciation levels is as follows:
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><B><FONT size="1">Additional Value</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Appreciation Level</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5%
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.45466</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">708,232,294</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">10%
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">23.95997</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,794,799,687</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares are covered by nonqualified stock
	options granted under the Stock Incentive Plan. The options
	become exercisable with respect to 20% of such shares on each of
	the first five anniversaries of October&nbsp;2, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares are covered by nonqualified stock
	options granted under the Stock Incentive Plan. The options
	become exercisable with respect to 10% of such shares on each of
	the first nine anniversaries of October&nbsp;2, 2000, and with
	respect to the last 10% of these shares on July&nbsp;2, 2010.
	</FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Aggregated Option/ SAR Exercises in Last
Fiscal Year</FONT></B>

<DIV align="center">
<B><FONT size="2">and Fiscal Year-End Option/ SAR
Values</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Underlying Unexercised</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">In-the-Money</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options/SARs at</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Options/SARs</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year-End(1)</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">at Fiscal Year-End(1)</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Acquired on</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable/</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable/</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Realized</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald R. Horton
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald J. Tomnitz
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,661</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,362,613</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">189,125/262,976</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,187,351/2,192,875</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Samuel R. Fuller
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,626</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">129,056</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,556/47,491</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64,882/323,762</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stacey H. Dwyer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,943</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">41,661</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,441/47,490</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167,498/341,463</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">These shares are covered by non-qualified stock
	options granted under the Stock Incentive Plan. The amounts are
	adjusted pursuant to the antidilution provisions of the Stock
	Incentive Plan to reflect the effects of various stock
	dividends. Each of the options vests over a period of time
	(generally 9.75&nbsp;years), but each option becomes fully
	exercisable upon a change of control of D.R.&nbsp;Horton, or
	upon the death or disability of the optionee.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">107
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Director Compensation" -->
<DIV align="left"><A NAME="081"></A></DIV>

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the first half of the past fiscal year,
D.R.&nbsp;Horton paid directors&#146; fees on the basis of
$25,000&nbsp;per annum to any director who was not an employee,
or former employee, of D.R.&nbsp;Horton. Beginning in the second
half of the fiscal year, D.R.&nbsp;Horton changed the policy on
directors&#146; fees to a payment of $6,250&nbsp;per board
meeting attended in person or by telephone, but not to exceed
$25,000&nbsp;per year. Under the new policy, D.R.&nbsp;Horton
paid fees to any director who was not receiving compensation
from D.R.&nbsp;Horton for services other than as a director. As
a result of the foregoing policies, Bradley S. Anderson, Richard
I. Galland and Francine I. Neff each received a total of $25,000
in directors&#146; fees in the past fiscal year. Richard L.
Horton, Terrill J. Horton and Scott J. Stone each received a
total of $12,500 in directors&#146; fees in the past fiscal
year, on the basis of the revised policy for payments to
directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No additional fees were paid for participation on
any committee of the board. Directors coming to meetings from
outside the Dallas-Fort&nbsp;Worth area received reimbursement
for expenses incurred to attend board and committee meetings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No director of D.R.&nbsp;Horton who receives
compensation from D.R.&nbsp;Horton for services other than as a
director received any additional compensation for serving as a
director of D.R.&nbsp;Horton. However, D.R.&nbsp;Horton paid the
participant&#146;s portion of premiums pursuant to
D.R.&nbsp;Horton&#146;s major medical plan for eight directors
of D.R.&nbsp;Horton. The amount of such premiums paid by D.R.
Horton during fiscal year 2001 was a total of $9,600, consisting
of $100&nbsp;per month for each of the directors receiving this
benefit. In addition, Mr.&nbsp;Beckwitt holds options to
purchase 356,068&nbsp;shares of D.R.&nbsp;Horton common stock,
which were issued from 1993 to 1998 and have exercise prices
ranging from $4.96 to $18.23. Of these, options for
146,791&nbsp;shares are currently exercisable.
</FONT>

<!-- link2 "Transactions with Management" -->
<DIV align="left"><A NAME="082"></A></DIV>

<P align="left">
<B><FONT size="2">Transactions with Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton has agreed to indemnify each of
its directors and executive officers to provide them with the
maximum indemnification allowed under its certificate of
incorporation and applicable law with respect to their positions
as officers or directors of D.R.&nbsp;Horton and its
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the effective date of the merger between
D.R.&nbsp;Horton and Continental Homes Holding Corp., Bradley S.
Anderson, a former director of Continental, was elected a
director of D.R.&nbsp;Horton. In connection with the merger,
D.R.&nbsp;Horton agreed to indemnify Mr.&nbsp;Anderson, along
with the other former Continental directors, and continue
directors&#146; and officers&#146; liability insurance in
connection with their prior service as directors or executive
officers of Continental.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2000, Mr.&nbsp;Beckwitt, a director of
the Company, resigned as President of the Company in connection
with the Company&#146;s formation of Encore Venture
Partners&nbsp;II (Texas), L.P. (&#147;Encore&#148;), a Company
affiliate which, together with other Company affiliates,
invested in technology start-up and emerging growth companies.
Mr.&nbsp;Beckwitt beneficially owns EVP Capital, L.P.
(&#147;EVP&#148;), which was a general partner of Encore;
Mr.&nbsp;Beckwitt was also a limited partner of Encore. Under
Encore&#146;s limited partnership agreement, partnership
overhead expenses were borne by a partner beneficially owned by
the Company, EVP was paid an annual management fee and EVP was
entitled to 5% of the net profits of Encore after payment of a
10% preferred return on amounts invested by Company affiliates.
During the term of his interest in Encore, Mr.&nbsp;Beckwitt
also advised and assisted the Company in its homebuilder
acquisitions. In connection with the termination of the
Company&#146;s investment program through Encore, the Company
and Mr.&nbsp;Beckwitt agreed to the termination of fee and
expense payments to EVP and the interests of EVP and
Mr.&nbsp;Beckwitt in Encore as of June&nbsp;30, 2001. Since such
termination, through advisory arrangements with the Company,
Mr.&nbsp;Beckwitt has continued to monitor Encore and affiliate
investments, which had a book value of $10.2&nbsp;million at the
end of the Company&#146;s 2001 fiscal year, and to advise and
assist the Company in its homebuilder acquisitions, which during
the Company&#146;s 2001 fiscal year had an aggregate transaction
value of approximately $213&nbsp;million. Under these advisory
arrangements, Mr.&nbsp;Beckwitt is also active in the process of
integrating the acquired homebuilding operations. For the 2001
fiscal year, the Company paid EVP approximately $1,724,000,
excluding reimbursement of expenses,
</FONT>

<P align="center"><FONT size="2">108
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">under the foregoing agreements and arrangements.
For the first three quarters of the 2002 fiscal year, the
Company has agreed to pay EVP at a quarterly rate of $500,000,
in addition to reimbursement of expenses, in connection with
Mr.&nbsp;Beckwitt&#146;s continued advice and assistance.
Mr.&nbsp;Beckwitt has provided advice and assistance in
connection with the proposed merger with Schuler in both fiscal
years.
</FONT>
</DIV>

<!-- link2 "Compensation Committee Interlocks and Insider Participation" -->
<DIV align="left"><A NAME="083"></A></DIV>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the 2001 fiscal year,
D.R.&nbsp;Horton&#146;s Compensation Committee was composed of
Mr.&nbsp;Richard I. Galland, Ms.&nbsp;Francine I. Neff,
Mr.&nbsp;Bradley S. Anderson, and, for a portion of the year
until he returned to D.R.&nbsp;Horton&#146;s employment, Scott
J. Stone. At the beginning of the 2001 fiscal year, the
Compensation Committee set the base salaries and
performance-based bonus goals of Messrs.&nbsp;Donald Horton and
Tomnitz. The Executive Committee, with Mr.&nbsp;Fuller
abstaining, established bonuses and salary for Mr.&nbsp;Fuller
and Ms.&nbsp;Dwyer.
</FONT>

<!-- link2 "Committee Report on Executive Compensation" -->
<DIV align="left"><A NAME="084"></A></DIV>

<P align="left">
<B><FONT size="2">Committee Report on Executive
Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General.
</FONT></I><FONT size="2">D.R.&nbsp;Horton has undertaken to
formulate a fair and competitive compensation policy for
executive officers that will attract, motivate and retain highly
experienced, qualified and productive personnel, reward superior
performance and provide long-term incentives that are based on
performance. D.R.&nbsp;Horton also has attempted to develop an
executive compensation policy that will serve to align the
interests of D.R.&nbsp;Horton, its executive officers and its
stockholders. The primary components of executive compensation
consist of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Base salaries.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Cash bonus payments.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton, Inc. Supplemental Executive
	Retirement Plan No.&nbsp;1, or SERP&nbsp;1, and SERP&nbsp;2.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Stock options.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Through its current executive compensation
policy, a substantial portion of the compensation an executive
officer has the opportunity to earn consists of bonus and stock
option incentives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Base Salaries. </FONT></I><FONT size="2">Base
salaries for D.R.&nbsp;Horton&#146;s executive officers for the
2001 fiscal year were based on each executive officer&#146;s
experience level, level of responsibility, contributions made
and potential for significant contributions to
D.R.&nbsp;Horton&#146;s success and stockholder value, and
D.R.&nbsp;Horton&#146;s historical levels of base compensation
for executive officers. No quantitative relative weights were
assigned to any of these factors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Bonus Payments. </FONT></I><FONT size="2">The
2001 compensation for executive officers provided each of
D.R.&nbsp;Horton&#146;s executive officers the opportunity to
earn substantial bonuses in addition to his or her 2001 annual
base salary. See &#147;Summary Compensation Table&#148; above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the D.R.&nbsp;Horton, Inc. 2000
Incentive Bonus Plan, Messrs.&nbsp;Donald Horton and Tomnitz
each received incentive bonus payments based upon the
performance goals with regard to quarterly consolidated pre-tax
income of D.R.&nbsp;Horton. These goals were set by the
Compensation Committee and approved by the board of directors at
the beginning of the fiscal year. During the fiscal year,
D.R.&nbsp;Horton&#146;s performance made Messrs.&nbsp;Donald
Horton and Tomnitz each eligible to receive $2,000,000 under the
plan. These 2001 bonus payments were approved by the
Compensation Committee and ratified by the board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Executive Committee, with Mr.&nbsp;Fuller not
participating, awarded discretionary bonuses to Mr.&nbsp;Fuller
and Ms.&nbsp;Dwyer. See the &#147;Summary Compensation
Table&#148; above. In determining the discretionary bonuses
awarded to Mr.&nbsp;Fuller and Ms.&nbsp;Dwyer, the Executive
Committee (with Mr.&nbsp;Fuller
</FONT>

<P align="center"><FONT size="2">109
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">not participating) reviewed, and the Compensation
Committee in approving the bonuses to the other executive
officers also reviewed, the following factors:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The financial and operating performance of
	D.R.&nbsp;Horton as compared to fiscal 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The financial and operating performance of
	D.R.&nbsp;Horton as compared to D.R.&nbsp;Horton&#146;s business
	plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Other actions and activities by each executive
	officer to maximize shareholder value.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">No quantitative relative weights were assigned to
any of the factors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">SERPs. </FONT></I><FONT size="2">The SERPs
were adopted by D.R.&nbsp;Horton in 1994 to permit eligible
participants, which include executive officers, regional vice
presidents, division managers and other selected employees, to
defer income and establish a source of funds payable upon
retirement, death or disability. Executive officers&#146;
individual agreements under the SERPs were adopted and approved
by the Compensation Committee and ratified by the board of
directors. SERP&nbsp;1 permits participants voluntarily to defer
receipt of compensation from D.R.&nbsp;Horton. Amounts deferred
are invested on behalf of the participant in investment vehicles
selected from time to time by the administrators of SERP&nbsp;1.
Pursuant to SERP&nbsp;2, D.R.&nbsp;Horton has established a
liability to each participant equal to 10% of the
participant&#146;s 2001 base salary. Earnings on this liability
accrue at a rate established from time to time by the
administrators of SERP&nbsp;2.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Chief Executive Officer 2001 Compensation.
</FONT></I><FONT size="2">Donald J. Tomnitz&#146;s compensation
for D.R.&nbsp;Horton&#146;s 2001 fiscal year consisted of an
annual base salary, bonuses and participation in the Stock
Incentive Plan and the SERPs. This compensation was set on the
basis of D.R.&nbsp;Horton&#146;s executive compensation policy
and the factors described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Compliance with Internal Revenue Code
Section&nbsp;162(m).
</FONT></I><FONT size="2">Section&nbsp;162(m) of the Internal
Revenue Code generally disallows a tax deduction to publicly
held companies for compensation over $1&nbsp;million paid for
any fiscal year to the corporation&#146;s chief executive
officer and the other executive officers as of the end of any
fiscal year who are disclosed in the Summary Compensation Table
in this Joint Proxy Statement/ Prospectus. However, the statute
exempts qualifying performance-based compensation if certain
requirements are met. Early in fiscal year 2000, the
Compensation Committee adopted, and the stockholders approved
the Incentive Bonus Plan. D.R.&nbsp;Horton intends for awards to
its executive officers under the bonus plan to qualify for the
performance-based compensation exemption under
section&nbsp;162(m).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While D.R.&nbsp;Horton generally structures its
compensation plans to comply with the exemption requirements of
section&nbsp;162(m), corporate objectives may not always be
consistent with the requirements for full deductibility.
Accordingly, the board of directors and the Compensation
Committee reserve the authority to award non-deductible
compensation to D.R.&nbsp;Horton&#146;s executive officers in
the future as they deem appropriate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Option Grants.
</FONT></I><FONT size="2">Grants of stock options under the
Stock Incentive Plan were administered by the Compensation
Committee. D.R.&nbsp;Horton believes that stock options provide
an important long-term incentive to executive officers and align
the interests of D.R.&nbsp;Horton, its executive officers and
its stockholders by creating a direct link between executive
compensation and long-term performance of D.R.&nbsp;Horton. The
stock options granted to executive officers in the 2001 fiscal
year have an exercise price of not less than the fair market
value of D.R.&nbsp;Horton common stock on the date of grant and
a vesting schedule that generally extends over 9.75&nbsp;years,
except that the option grant to Mr.&nbsp;Tomnitz in fiscal year
2001 vests over five years. All other terms of stock option
grants are established by the Compensation Committee, subject to
the limitations of the Stock Incentive Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A total of three stock option grants were made to
executive officers in fiscal year 2001. See &#147;Option/ SAR
Grants in Last Fiscal Year&#148; table above. In determining the
number of shares of D.R.&nbsp;Horton
</FONT>

<P align="center"><FONT size="2">110
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">common stock covered by and the vesting schedule
of each stock option grant to executive officers, the
Compensation Committee made a subjective evaluation of:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Recommendations of the Chairman of the Board.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Contribution the executive officer made and is
	anticipated to make to the success of D.R.&nbsp;Horton.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Level of experience and responsibility of the
	executive officer.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Number of stock options that previously had been
	granted to the executive officer pursuant to the Stock Incentive
	Plan.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Number of stock options granted to other
	participants in the Stock Incentive Plan.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">No quantitative relative weights were assigned to
any of these factors.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">COMPENSATION COMMITTEE:
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Richard I. Galland, Chair
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Francine I. Neff
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Bradley S. Anderson
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">111
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Stock Performance" -->
<DIV align="left"><A NAME="085"></A></DIV>

<P align="left">
<B><FONT size="2">Stock Performance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following graph illustrates the cumulative
total stockholder return on D.R.&nbsp;Horton&#146;s common stock
for the last five fiscal years through September&nbsp;30, 2001,
assuming a hypothetical investment of $100 and a reinvestment of
all dividends paid on such an investment, compared to the
Standard&nbsp;&#38; Poor&#146;s 500 Stock Index and the
Standard&nbsp;&#38; Poor&#146;s Homebuilding-500 Index.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation Committee report above, and the
graph and the related disclosure contained in this section of
this Joint Proxy Statement/ Prospectus, will not be deemed to be
soliciting material or to be filed with or incorporated by
reference into any filing by D.R.&nbsp;Horton under the
Securities Act of 1933 or the Exchange Act, except to the extent
that D.R.&nbsp;Horton specifically incorporates the report or
graph by reference. The graph and related disclosure are
presented in accordance with SEC requirements. Stockholders are
cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily
indicative of future performance. The graph and related
disclosure in no way reflect D.R.&nbsp;Horton&#146;s forecast of
future financial performance.
</FONT>

<P align="center">
<B><FONT size="2">TOTAL STOCKHOLDER RETURNS</FONT></B>

<P align="center">
<IMG src="d92411a3d9241145.gif" alt="(PERFORMANCE GRAPH)">

<P align="center">
<B><FONT size="2">ANNUAL RETURN PERCENTAGE</FONT></B>

<DIV align="center">
<B><FONT size="2">Years Ending</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="21"></TD>
</TR>

<TR>
	<TD colspan="21" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 97</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 98</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 99</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 01</FONT></B></TD>
</TR>

<TR>
	<TD colspan="21"></TD>
</TR>

<TR>
	<TD colspan="21" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;D.R. Horton, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">46.43</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35.90</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;S&#38;P 500 Index
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.05</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27.80</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.62</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;S&#38;P Homebuilding-500(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49.39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.07</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">.03</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25.94</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.83</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">112
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INDEXED RETURNS</FONT></B>

<DIV align="center">
<B><FONT size="2">Years Ending</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="25"></TD>
</TR>

<TR>
	<TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Base</FONT></B></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 96</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 97</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 98</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 99</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 00</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Sept. 01</FONT></B></TD>
</TR>

<TR>
	<TD colspan="25"></TD>
</TR>

<TR>
	<TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;D.R. Horton, Inc.
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">162.35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">165.71</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">134.95</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">197.61</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268.56</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;S&#38;P 500 Index
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">140.45</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">153.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">195.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">221.74</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">162.71</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">&nbsp;S&#38;P Homebuilding-500(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">149.39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167.41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">140.58</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">177.04</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">180.28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The S&#38;P Homebuilding-500 Index includes the
	following: Centex Corporation, KB&nbsp;Home and Pulte
	Corporation.
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Meetings and Committees of the Board" -->
<DIV align="left"><A NAME="086"></A></DIV>

<P align="left">
<B><FONT size="2">Meetings and Committees of the Board</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal year 2001, the board of directors
of D.R.&nbsp;Horton held four meetings and acted three times by
written consent. No director attended fewer than 75&nbsp;percent
of the number of meetings of the board and of the committees on
which he or she served during fiscal year 2001. The board of
directors of D.R.&nbsp;Horton has appointed three standing
committees: an Executive Committee, a Compensation Committee and
an Audit Committee. There is no standing nominating committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Executive Committee, while the board is not
in session, possesses all of the powers and may carry out all of
the duties of the board of directors in the management of the
business of D.R.&nbsp;Horton, which by law may be delegated to
it by the board of directors. The Executive Committee acted
fifty-one times by written consent during fiscal year 2001. The
Executive Committee is composed of Messrs.&nbsp;Donald Horton,
Tomnitz and Fuller.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation Committee is empowered to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Recommend to the board the compensation to be
	paid to the executive officers of D.R.&nbsp;Horton and its
	subsidiaries and other affiliates.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Investigate and recommend to the board employee
	benefit plans deemed appropriate for the employees of
	D.R.&nbsp;Horton and its subsidiaries and other affiliates.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Supervise the administration of employee benefit
	plans adopted by D.R.&nbsp;Horton and its subsidiaries and other
	affiliates (including the Stock Incentive Plan and the Incentive
	Bonus Plan).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Perform such other functions and undertake such
	investigations as the board shall from time to time direct.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The Compensation Committee met once and acted
five times by written consent during fiscal year 2001. The
Compensation Committee is composed of the outside directors,
Ms.&nbsp;Neff and Messrs.&nbsp;Galland and Anderson.
</FONT>

<!-- link2 "Audit Committee Report" -->
<DIV align="left"><A NAME="087"></A></DIV>

<P align="left">
<B><FONT size="2">Audit Committee Report</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee of the board of directors is
currently comprised of three of D.R.&nbsp;Horton&#146;s
directors, Mr.&nbsp;Galland, Ms.&nbsp;Neff and
Mr.&nbsp;Anderson. Each member of the Audit Committee is
&#147;independent&#148; as defined under the New York Stock
Exchange&#146;s listing standards. The Audit Committee operates
pursuant to an Audit Committee Charter, which was approved and
adopted by the board of directors. According to the Audit
Committee Charter, the Audit Committee&#146;s primary duties and
responsibilities are&nbsp;to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Monitor the integrity of D.R.&nbsp;Horton&#146;s
	financial reporting process and systems of internal controls
	regarding finance and accounting.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">113
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Monitor the independence and performance of
	D.R.&nbsp;Horton&#146;s independent auditors.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Provide an avenue of communications among the
	independent auditors, management and the board of directors.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee has reviewed and discussed
with management D.R.&nbsp;Horton&#146;s audited consolidated
financial statements for the fiscal year ended
September&nbsp;30, 2001. Further, the Audit Committee has
discussed, with D.R.&nbsp;Horton&#146;s independent auditor, the
matters required to be discussed by Auditing Standards Board
Statement on Auditing Standards No.&nbsp;61, as amended.
Finally, the Audit Committee has received and reviewed the
written disclosures and the letter from the independent auditor
required by the Independence Standards Board Independence
Standard No.&nbsp;1, as amended, and has discussed the
auditor&#146;s independence with the auditor. The Audit
Committee has considered whether the independent auditors&#146;
provision of non-audit services to D.R.&nbsp;Horton is
compatible with the auditors&#146; independence.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on its review and discussion described
above, the Audit Committee has recommended to the board of
directors that the audited financial statements for fiscal year
2001 be included in D.R.&nbsp;Horton&#146;s Annual Report on
Form&nbsp;10-K for the fiscal year ended September&nbsp;30,
2001. Further, the Audit Committee recommended that the board of
directors engage Ernst&nbsp;&#38; Young LLP as D.R.
Horton&#146;s independent auditor for the fiscal year ending
September&nbsp;30, 2002. The Audit Committee met twice during
fiscal year 2001.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">AUDIT COMMITTEE:
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Richard I. Galland, Chair
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Francine I. Neff
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Bradley S. Anderson
	</FONT></TD>
</TR>

</TABLE>

<!-- link2 "Independent Auditors" -->
<DIV align="left"><A NAME="088"></A></DIV>

<P align="left">
<B><FONT size="2">Independent Auditors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ernst&nbsp;&#38; Young LLP served as
D.R.&nbsp;Horton&#146;s independent auditors for the fiscal year
ended September&nbsp;30, 2001, and has been engaged to continue
to serve through the 2002 fiscal year. A representative of
Ernst&nbsp;&#38; Young LLP is expected to be present at the
annual meeting and will have an opportunity to make a statement
and to respond to appropriate questions from stockholders.
</FONT>

<!-- link2 "Audit Fees and Other Fees" -->
<DIV align="left"><A NAME="089"></A></DIV>

<P align="left">
<B><FONT size="2">Audit Fees and Other Fees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the audit and other
fees paid or accrued by D.R. Horton for the audit and other
services provided by Ernst&nbsp;&#38; Young LLP for fiscal year
2001.
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Audit Fees(1)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">215,224</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">All Other Fees(2)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">279,864</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">495,088</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Audit services of Ernst&nbsp;&#38; Young LLP for
	2001 consisted of the examination of the consolidated financial
	statements of D.R.&nbsp;Horton and quarterly reviews of
	financial statements.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">All Other Fees are primarily for audit-related
	services, including, among other things, statutory and benefit
	plan audits, and services related to filings made with
	the&nbsp;SEC.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Ernst&nbsp;&#38; Young LLP did not render
professional services relating to financial information systems
design and implementation for the fiscal year ended
September&nbsp;30, 2001.
</FONT>

<P align="center"><FONT size="2">114
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Section 16(a) Beneficial Ownership Reporting Compliance" -->
<DIV align="left"><A NAME="090"></A></DIV>

<P align="left">
<B><FONT size="2">Section&nbsp;16(a) Beneficial Ownership
Reporting Compliance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;16(a) of the Exchange Act requires
D.R.&nbsp;Horton&#146;s directors, certain of its officers, and
persons who own more than 10&nbsp;percent of a registered class
of D.R.&nbsp;Horton&#146;s equity securities to file reports of
ownership and changes in ownership with the SEC. Officers,
directors and greater than 10&nbsp;percent stockholders are
required by SEC regulations to furnish D.R.&nbsp;Horton with
copies of all forms they file pursuant to Section&nbsp;16(a).
Based solely on its review of the copies of such forms received
by it, D.R.&nbsp;Horton believes that all filing requirements
applicable to its officers, directors and greater than
10&nbsp;percent beneficial owners were complied with during the
year ended September&nbsp;30, 2001, except that Mr.&nbsp;Fuller
was late in reporting three small acquisitions, and
Mr.&nbsp;Terrill J. Horton reported one late transaction on his
Form&nbsp;5 for fiscal&nbsp;2001.
</FONT>

<!-- link1 "ADDITIONAL MATTERS FOR CONSIDERATION OF D.R. HORTON STOCKHOLDERS" -->
<DIV align="left"><A NAME="091"></A></DIV>

<P align="center">
<B><FONT size="2">ADDITIONAL MATTERS FOR CONSIDERATION OF
D.R.&nbsp;HORTON STOCKHOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to consideration of and voting on the
merger, including the issuance of D.R.&nbsp;Horton common stock
in connection with the merger, the D.R.&nbsp;Horton stockholders
will be asked to vote on the following matters at the 2002
D.R.&nbsp;Horton annual meeting.
</FONT>

<!-- link2 "Election of Directors" -->
<DIV align="left"><A NAME="092"></A></DIV>

<P align="left">
<B><FONT size="2">Election of Directors</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to D.R.&nbsp;Horton&#146;s bylaws, the
board of directors of D.R.&nbsp;Horton has fixed the number of
directors at ten. The board of directors has nominated Donald R.
Horton, Bradley S. Anderson, Richard Beckwitt, Samuel R. Fuller,
Richard I. Galland, Richard L. Horton, Terrill J. Horton,
Francine I. Neff, Scott J. Stone and Donald J. Tomnitz for
election as directors of D.R.&nbsp;Horton. All of the nominees
are currently serving as directors of D.R.&nbsp;Horton.
Information regarding these individuals is set out above under
&#147;Information About
D.R.&nbsp;Horton&nbsp;&#151;&nbsp;Directors and Executive
Officers&#148; on page&nbsp;101.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger with Schuler is consummated,
D.R.&nbsp;Horton&#146;s board will adopt a resolution to
increase the number of directors to eleven. D.R.&nbsp;Horton has
agreed to use its best efforts to appoint James K. Schuler to
the board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">According to the bylaws of D.R.&nbsp;Horton, any
stockholder may make nominations for the election of directors
if notice of such nominations is delivered to, or mailed and
received at, the principal executive office of D.R.&nbsp;Horton
not less than thirty calendar days prior to the date of the
originally scheduled meeting. However, if D.R.&nbsp;Horton gives
less than forty calendar days&#146; notice or prior public
disclosure of the date of the meeting, notice of such nomination
must be received not later than the close of business on the
tenth calendar day following the earlier of the day on which
notice of the meeting was mailed or the day on which the public
disclosure was made. If nominations are not made in that manner,
only the nominations of the board of directors may be voted upon
at the annual meeting.
</FONT>

<!-- link2 "Amendment of 1991 Stock Incentive Plan" -->
<DIV align="left"><A NAME="093"></A></DIV>

<P align="left">
<B><FONT size="2">Amendment of 1991 Stock Incentive
Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;30, 2001,
D.R.&nbsp;Horton&#146;s board of directors adopted and approved,
subject to the approval of D.R.&nbsp;Horton&#146;s stockholders,
an amendment to the D.R.&nbsp;Horton, Inc. 1991 Stock Incentive
Plan that would increase the total number of shares of
D.R.&nbsp;Horton common stock that may be issued or delivered
pursuant to the Stock Incentive Plan by 1,600,000&nbsp;shares
from 8,040,373&nbsp;shares to 9,640,373&nbsp;shares. The
amendment will become effective upon the effectiveness of the
merger. This increase is to cover the options that will be
issued in connection with the merger to replace currently
outstanding options to purchase Schuler Class&nbsp;A common
stock. The number of shares of D.R.&nbsp;Horton common stock
that currently may be issued pursuant to future awards under the
Stock Incentive Plan is 1,611,012 at September&nbsp;30, 2001.
Approval of the Amendment by D.R.&nbsp;Horton&#146;s
stockholders would increase this number to 3,211,012. The
numbers of shares subject to options, as stated in this
description, are adjusted pursuant to the antidilution
provisions of the Stock Incentive Plan to reflect the effects of
various stock dividends.
</FONT>

<P align="center"><FONT size="2">115
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;<I>General</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To date, D.R.&nbsp;Horton has only granted
nonqualified stock options under the Stock Incentive Plan;
however, the Stock Incentive Plan authorizes the granting of the
following types of benefits:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Stock options, which may be either incentive
	stock options qualified under the Internal Revenue Code,
	nonqualified stock options or a combination thereof, and which
	permit an optionee to benefit from increases in the value of the
	D.R.&nbsp;Horton common stock above a predetermined option price.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Stock appreciation rights, which provide an
	alternative means of realizing the benefits arising from stock
	options or from increases in the value of the D.R.&nbsp;Horton
	common stock above the value at the time of grant of the stock
	appreciation rights.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Awards of restricted stock, which enable a
	grantee or purchaser of restricted stock to earn over a
	specified period of time shares of D.R.&nbsp;Horton common stock
	which he or she has acquired at a price below the value of the
	D.R.&nbsp;Horton common stock at the time of acquisition or
	without payment.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Performance units, which enable a grantee to earn
	cash awards by achievement of predetermined management
	objectives described below.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Performance shares, which enable a grantee to
	earn awards of the D.R.&nbsp;Horton common stock or other
	securities of D.R.&nbsp;Horton by achievement of predetermined
	management objectives.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">These benefits are referred to collectively
herein as &#147;awards.&#148; All officers, directors, key
employees, agents and consultants of D.R.&nbsp;Horton are
eligible to receive awards under the Stock Incentive Plan. No
stock option, stock appreciation right, performance unit or
performance share award is transferable by a participant other
than by will or the laws of descent and distribution or pursuant
to a &#147;qualified domestic relations order,&#148; as defined
in the Internal Revenue Code, or the Employee Retirement Income
Security Act of 1974. Stock options and stock appreciation
rights are exercisable during the participant&#146;s lifetime
only by the participant or his or her guardian or legal
representative. The Stock Incentive Plan does not provide for
any limit to the amount of any award or awards to any one
participant or any period during which the awards must be
granted.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any shares of D.R.&nbsp;Horton common stock which
are subject to stock options or stock appreciation rights or are
awarded or sold as restricted stock that are terminated,
unexercised, forfeited or surrendered or which expire for any
reason will again be available for issuance under the Stock
Incentive Plan. The Stock Incentive Plan also provides that
D.R.&nbsp;Horton&#146;s board of directors may make adjustments
in the number of shares, and outstanding awards under the Stock
Incentive Plan, to prevent dilution or enlargement of rights of
participants in the event of stock dividends, stock splits,
combinations of shares, recapitalizations or other changes in
the capital structure of D.R.&nbsp;Horton, mergers,
consolidations, spin-offs, reorganizations, issuances of rights
or warrants and other similar changes. On January&nbsp;14, 2002,
the closing price for the D.R.&nbsp;Horton common stock on the
NYSE was $30.58&nbsp;per share.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Stock Options</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton may grant incentive stock
options, non-qualified stock options or both under the Stock
Incentive Plan. The options entitle the optionee to purchase
shares of D.R.&nbsp;Horton common stock at a price equal to not
less than 50% of the market value per share on the date of
grant, except to the extent options are granted in connection
with acquisitions by D.R.&nbsp;Horton. D.R. Horton has granted
substantially all if not all options granted under the Stock
Incentive Plan at the closing market price on the date of grant.
The option price is payable at the time of exercise in cash or
by check, by the transfer to D.R.&nbsp;Horton of shares of
D.R.&nbsp;Horton common stock having an aggregate market value
per share at the time of exercise equal to the aggregate option
price or by a combination of these methods. A grant of stock
options may provide for deferred payment of the option price
from the proceeds of sale through a broker on the exercise date
of some or all of the shares to which such exercise relates.
Successive grants may be made to the same optionee whether or
not stock options previously granted remain unexercised.
</FONT>

<P align="center"><FONT size="2">116
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No stock option is exercisable more than ten
years from the date of grant. Each grant of stock options must
specify the required period or periods of continuous service by
the optionee with D.R.&nbsp;Horton and/or the management
objectives to be achieved before the stock options will become
exercisable. Stock options may become exercisable at once or in
installments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management objectives may be described either in
terms of company-wide objectives, objectives that are related to
performance of the division, department or function within
D.R.&nbsp;Horton in which the participant is employed, or in
other terms. The objectives must relate to a specified period of
time established by the administrative committee that
administers the Stock Incentive Plan. The administrative
committee may adjust any management objective if, in its sole
judgment, events or transactions have occurred that are
unrelated to the participant&#146;s performance and result in a
distortion of the management objectives.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Stock Appreciation Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stock appreciation rights permit the holder to
receive the difference between the market value of the shares of
D.R.&nbsp;Horton common stock subject to the stock appreciation
rights on the exercise date of the stock appreciation rights and
the grant price of the stock appreciation rights. Stock
appreciation rights may be granted in tandem with stock options
or separate and apart from a grant of stock options.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holder of a stock appreciation right is
entitled to receive from D.R.&nbsp;Horton upon exercise of the
stock appreciation right an amount equal to 100%, or a lesser
percentage as the administrative committee determines, of the
spread between the grant price of the stock appreciation right,
which will be the same as the option price of any stock option
granted in tandem with the stock appreciation right, and the
market value of the shares of the D.R.&nbsp;Horton common stock
subject to the stock appreciation right being exercised. A stock
appreciation right granted in tandem with a stock option may be
exercised only by surrender of the related stock option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each grant of stock appreciation rights under the
Stock Incentive Plan must specify the required period or periods
of continuous service by the holder thereof with
D.R.&nbsp;Horton and/or the management objectives to be achieved
before the stock appreciation rights will become exercisable. No
stock appreciation right granted in tandem with a stock option
may be exercisable except at a time at which that stock option
is exercisable. The administrative committee may authorize the
grant of stock appreciation rights under the Stock Incentive
Plan in accordance with the following additional provisions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Any grant may specify that the amount payable on
	exercise of a stock appreciation right may be paid by
	D.R.&nbsp;Horton in cash, in shares of D.R.&nbsp;Horton common
	stock, in other securities of D.R.&nbsp;Horton or in any
	combination of cash or securities, as determined by the
	administrative committee in its sole discretion at the time of
	payment.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Any grant may specify that the amount payable by
	D.R.&nbsp;Horton upon exercise of a stock appreciation right may
	not exceed a maximum specified by the administrative committee
	at the date of grant.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Stock appreciation rights may include other terms
and provisions, consistent with the Stock Incentive Plan, as
approved by the administrative committee. As of
September&nbsp;30, 2001, D.R.&nbsp;Horton has not granted any
stock appreciation rights.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Restricted Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A grant of restricted stock involves the
immediate transfer by D.R.&nbsp;Horton to a participant of
ownership of a specific number of shares of D.R.&nbsp;Horton
common stock in consideration of the performance of services.
The participant is entitled immediately to voting, dividend and
other ownership rights in the shares. The transfer may be made
without additional consideration or in consideration of a
payment by the participant that is less than the market value
per share of the D.R.&nbsp;Horton common stock at the date of
grant, as approved by the administrative committee.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Restricted stock may be subject, for a period of
time to be determined by the administrative committee at the
date of grant, to a &#147;substantial risk of forfeiture&#148;
within the meaning of Section&nbsp;83 of the Internal Revenue
Code. For example, a provision that the restricted stock would
be forfeited if the participant ceased to serve D.R.&nbsp;Horton
as a director, officer, key employee, agent or consultant during
a specified period would constitute a &#147;substantial risk of
forfeiture&#148;. In order to enforce these forfeiture
provisions, the transferability of restricted stock will be
prohibited or restricted in a manner and to the extent
prescribed by the administrative committee for the period during
which the forfeiture provisions remain in effect. As of the date
of this Joint Proxy Statement/ Prospectus, D.R.&nbsp;Horton has
not granted any restricted stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Performance Units</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Performance units represent the right of a
participant to receive a payment per performance unit upon
achievement of specified management objectives. A minimum
acceptable level of achievement also will be established. If by
the end of the specified performance period the participant has
achieved the specified management objectives, the participant
will have fully earned the performance units. If the participant
has not achieved the management objectives but has attained or
exceeded the minimum achievement level, the participant will
have partly earned the performance units, determined in
accordance with a formula for determining the amount of the
payment if performance is between the minimum achievement level
and the management objectives. To the extent earned, performance
units will be paid to the participant at the time and in the
manner determined by the administrative committee. Payment may
be made in cash, in shares of D.R.&nbsp;Horton common stock, in
other securities of D.R.&nbsp;Horton or in any combination of
cash or D.R.&nbsp;Horton securities, as approved by the
administrative committee in its sole discretion. As of the date
of this Joint Proxy Statement/ Prospectus, D.R.&nbsp;Horton has
not granted any performance units.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Performance Shares</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A participant may be granted any number of
performance shares that will be delivered to the participant
upon achievement of specified management objectives. A minimum
achievement level will also be specified. If by the end of the
performance period the participant has achieved the specified
management objectives, the participant will be deemed to have
fully earned the performance shares. If the participant has not
achieved the management objectives but has attained or exceeded
the minimum achievement level, the participant will be deemed to
have partly earned the performance shares, such part may be
determined in accordance with a formula for determining the
number of performance shares earned if performance is between
the minimum achievement level and the management objectives. To
the extent earned, performance shares will be delivered to the
participant at the time and in the manner determined by the
administrative committee. In lieu of shares of D.R.&nbsp;Horton
common stock, a participant may receive cash, other securities
of D.R.&nbsp;Horton or a combination of cash or D.R.&nbsp;Horton
securities, as approved by the administrative committee in its
sole discretion. As of the date of this Joint Proxy Statement/
Prospectus, D.R.&nbsp;Horton has not granted any performance
shares.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Administration and Amendments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Stock Incentive Plan is administered by the
administrative committee, which at all times consists of not
less than two directors appointed by D.R.&nbsp;Horton&#146;s
board of directors, each of whom will be a &#147;Non-Employee
Director&#148; within the meaning of Rule&nbsp;16b-3 under the
Exchange Act. The duties of the administrative committee are
performed by the Compensation Committee of the board of
directors, which currently consists of Mr.&nbsp;Galland,
Ms.&nbsp;Neff and Mr.&nbsp;Anderson. The administrative
committee is authorized to select eligible participants, grant
awards, and interpret the Stock Incentive Plan and related
agreements, notifications and other documents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Stock Incentive Plan also gives authority to
the Chairman of the Board of D.R.&nbsp;Horton to administer the
plan with respect to matters relating solely to participants who
are not executive officers, but only to the extent that this
authority would not disqualify the plan from reliance on the
exemption provided by Rule&nbsp;16b-3.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Stock Incentive Plan may be amended from time
to time by the board of directors, but may not be amended by the
Board without further approval by the stockholders of
D.R.&nbsp;Horton if such amendment would result in the plan no
longer satisfying the requirements of Rule&nbsp;16b-3.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Accounting Treatment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton has elected to follow Accounting
Principles Board Opinion No.&nbsp;25 in accounting for its stock
options. The exercise price of D.R.&nbsp;Horton&#146;s stock
options has equaled the market price of the underlying stock on
the date of grant, and therefore no compensation expense has
been recognized. Stock appreciation rights and performance units
will require a charge against income of D.R.&nbsp;Horton each
year representing the appreciation in the value of such benefits
which it is anticipated will be exercised or paid. In the case
of stock appreciation rights, the charge is based on the excess
of the current market price of the D.R.&nbsp;Horton common stock
over the grant price of the stock appreciation rights. In the
case of performance units, the charge is based on the dollar
amount expected to be paid at the end of the performance period.
Restricted stock awards will require a charge against income
equal to the fair market value of the shares at the time of
award less the amount, if any, paid by the grantee. The charge
is spread over the earnout period for such restricted stock.
Performance shares will require a charge against income that,
depending on the terms of the award of performance shares, will
be similar to the charge required with respect to restricted
stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement requires D.R.&nbsp;Horton to
replace all outstanding options to purchase Schuler common stock
under its stock plans with comparable options to purchase
D.R.&nbsp;Horton common stock. In accordance with <I>FASB
Interpretation No.&nbsp;44 &#147;Accounting for Certain
Transactions Involving Stock Compensation&nbsp;&#151; An
Interpretation of APB No.&nbsp;25,&#148;</I> D.R.&nbsp;Horton
will determine the fair value of the replacement options using
the Black-Scholes option-pricing model and record the fair value
of the replacement options as merger costs, which will likely
result in an increase of goodwill and additional capital. In
accordance with <I>FASB Interpretation No.&nbsp;44</I>, the
intrinsic value of the unvested options will be recorded as
unearned compensation and a reduction to goodwill. The unearned
compensation will be amortized over the remaining vesting period
of the options.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">United States Federal Income Tax
	Consequences</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion is only a general
summary of certain federal income tax laws as currently in
effect. Federal income tax rules governing awards and related
payments are complex, are subject to frequent change, and depend
on individual circumstances. D.R.&nbsp;Horton suggests that
potential award recipients obtain competent professional advice
regarding the application of federal tax laws to their
particular situation. Moreover, this summary relates only to
U.S.&nbsp;federal income taxation. If an award recipient is
subject to state or local income taxation, or to taxation in
foreign jurisdictions, he or she may have different tax
consequences from those described below. Therefore, potential
award recipients should seek competent professional advice
regarding the applicability of state, local, or foreign tax laws
as well.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Non-Qualified Stock
Options.</FONT></I><FONT size="2"> D.R.&nbsp;Horton&#146;s grant
of a non-qualified stock option is generally not a taxable event
for the recipient. Recipients that exercise a non-qualified
stock option will, upon exercise, generally recognize ordinary
income equal to the excess of the fair market value of the
shares acquired upon exercise, determined as of the date of
exercise, over the exercise price of the non-qualified stock
option. D.R.&nbsp;Horton will be entitled to a tax deduction for
the same amount. The ordinary income recognized upon exercise
may be subject to employment and income withholding taxes or
self-employment taxes in addition to any other taxes that might
apply. Subsequent sales of the shares generally will give rise
to capital gain or loss equal to the difference between the sale
price and the sum of the exercise price paid for the shares plus
the ordinary income recognized with respect to the shares. These
capital gains will be taxable as long-term capital gains if the
shares were held for more than one year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the option price of a nonqualified stock
option is paid by the surrender of shares of D.R.&nbsp;Horton
common stock already owned, no gain or loss will be recognized
on the surrender of the shares to the extent that their fair
market value equals that of the shares received. To that extent,
the shares received
</FONT>

<P align="center"><FONT size="2">119
</FONT>

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<DIV align="left">
<FONT size="2">will have a tax basis equal to the basis of the
shares surrendered, and the holding period of the shares
received will include the holding period of the shares
surrendered. To the extent that the value of the shares received
exceeds the value of the shares surrendered, the excess will be
ordinary income. Further, the shares received that represent the
excess value will have a basis equal to their fair market value.
The holding period for any excess shares will commence on the
day after they are acquired.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Incentive Stock
Options.</FONT></I><FONT size="2"> Award recipients generally
will not pay tax, and D.R.&nbsp;Horton will not receive a
deduction, on the grant or the exercise of an incentive stock
option, if the award recipient exercises the option while he or
she is an employee of D.R.&nbsp;Horton or within three months
following his or her termination of employment, or within one
year, if employment is terminated due to a permanent disability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the shares acquired upon the exercise of an
incentive stock option are sold at any time within one year
after the date D.R.&nbsp;Horton transfers those shares or within
two years after the date D.R.&nbsp;Horton grants the option,
then:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the sales price exceeds the exercise price of
	the incentive stock option, capital gain equal to the excess, if
	any, of the sales price over the fair market value of the shares
	on the date of exercise will be recognized, and ordinary income
	equal to the excess, if any, of (1)&nbsp;the actual sales price
	or the fair market value of the shares on the date of exercise,
	whichever is less, over (2)&nbsp;the exercise price of the
	incentive stock option will be recognized;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the sales price is less than the exercise
	price of the incentive stock option, a recipient will recognize
	a capital loss equal to the excess of the exercise price of the
	incentive stock option over the sales price of the shares.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In this event, D.R.&nbsp;Horton will generally be
able to take a tax deduction equal to the ordinary income
recognized. The ordinary income recognized generally will be
subject to employment and income withholding taxes in addition
to any other taxes that might apply.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a recipient sells the shares the recipient
acquired upon exercise of an incentive stock option at any time
after the recipient has held the shares for at least one year
after the date D.R.&nbsp;Horton transfers the shares pursuant to
the recipient&#146;s exercise of the incentive stock option and
at least two years after the date D.R.&nbsp;Horton grants the
recipient the incentive stock option, then the recipient will
recognize long-term capital gain or loss equal to the difference
between the sales price and the exercise price of the option,
and D.R.&nbsp;Horton will not be entitled to any deduction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the year a recipient exercises an incentive
stock option, the recipient must include the amount by which the
fair market value of shares acquired exceeds the exercise price
on the date of exercise as a positive adjustment in the
calculation of the recipient&#146;s &#147;alternative minimum
taxable income&#148;. A recipient&#146;s &#147;alternative
minimum tax&#148; will generally equal the amount by which 26%
or 28%, depending upon the amount of the recipient&#146;s
alternative minimum taxable income, of the recipient&#146;s
alternative minimum taxable income, reduced by certain exemption
amounts, exceeds the recipient&#146;s regular income tax
liability for the year. Before exercising an incentive stock
option, a recipient should determine whether and to what extent
exercise of that option will result in alternative minimum tax
in the year of exercise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a recipient pays the option price of an
incentive stock option by the surrender of shares of
D.R.&nbsp;Horton common stock, the recipient will not recognize
gain or loss on the surrender of such shares to the extent that
their fair market value equals that of the shares received. To
that extent, the shares received will have a basis equal to the
basis of the shares surrendered, and the recipient&#146;s
holding period of the shares received will include the holding
period of the shares surrendered (although for purposes of
determining whether a disqualifying disposition has occurred,
the holding period of the shares received will commence on the
day after the shares are acquired). To the extent that the value
of the shares received exceeds the value of the shares
surrendered, those shares received that represent such excess
value will have a basis equal to zero and a holding period that
will commence on the day after they are acquired. If a recipient
surrenders shares acquired through the previous exercise of an
incentive stock option before the end of the requisite holding
period applicable to the previous exercise, however, the
recipient will recognize ordinary income on the surrender of
such shares.
</FONT>

<P align="center"><FONT size="2">120
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restricted Stock.</FONT></I><FONT size="2"> A
recipient of restricted stock will not recognize income upon the
receipt of restricted stock. Rather, the recipient generally
will recognize ordinary income equal to the fair market value of
the restricted stock, less any consideration paid for the stock,
at the time the stock becomes transferable or is no longer
subject to forfeiture. D.R.&nbsp;Horton will be able to take a
tax deduction at the same time and for the same amount. The
ordinary income recognized in connection with restricted stock
may be subject to employment and income withholding taxes or
self-employment taxes in addition to any other taxes that might
apply.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the recipient has made a valid election under
Section&nbsp;83(b) of the Internal Revenue Code, the recipient
will generally recognize ordinary income in an amount equal to
the fair market value of the shares on the date the stock is
received less the purchase price, if any, of the restricted
stock. The fair market value will be determined as if the stock
were unrestricted. D.R.&nbsp;Horton will be able to take a tax
deduction for the same amount. Recipient&#146;s of restricted
stock should consult your tax advisor to determine the tax
consequences of making a Section&nbsp;83(b) election. Note that
if an award recipient makes a Section&nbsp;83(b) election and
pays income tax on the fair market value of the stock and
subsequently forfeits the stock, the award recipient will not be
entitled to any deduction in connection with that forfeiture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A subsequent sale of the shares received in
connection with restricted stock generally will give rise to
capital gain or loss equal to the difference between the sale
price and the sum of the purchase price, if any, of the shares
plus the ordinary income recognized with respect to the shares.
The capital gains will be taxable as long-term capital gains if
the shares have been held for more than one year. The holding
period to determine whether an award recipient has long-term or
short-term capital gain or loss on a subsequent sale generally
begins when the stock becomes transferable or is no longer
subject to forfeiture, or on the date of grant if the recipient
made a valid Section&nbsp;83(b) election.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Performance shares and performance
units.</FONT></I><FONT size="2"> A recipient of performance
shares or performance units will not recognize income upon the
award of performance shares or performance units. In general,
the recipient will recognize ordinary income at the time
property is transferred in payment of such performance shares or
performance units in an amount equal to the aggregate amount of
cash and the fair market value of the D.R.&nbsp;Horton common
stock and any other securities the recipient receives. Upon a
subsequent sale of common stock or any other securities received
in payment of performance shares or performance units, any
excess of the net proceeds of sale over the fair market value of
the common stock or securities on the date of receipt will
generally be taxed as capital gain or loss (long- or short-term,
depending on the holding period).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Estate Tax
Considerations.</FONT></I><FONT size="2"> If a recipient of
stock options dies holding unexercised stock options, the value
of the options at the time of death will be included in the
recipient&#146;s estate and subject to estate tax. Following the
recipient&#146;s death, the options may be exercised by the
recipient&#146;s estate or the recipient&#146;s heirs to the
extent permitted by the Stock Incentive Plan and/or the
applicable stock award agreement. The income tax consequences
upon exercise of the options after the recipient&#146;s death
depend on whether the option is an incentive stock option or a
non-qualified option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exercise of an incentive stock option will
not generate taxable income and the shares purchased will have a
tax basis equal to their fair market value at the time of death.
A subsequent sale of the shares will generate either short-term
or long-term capital gain or capital loss depending on the
length of time the shares were owned.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exercise of a non-qualified option will
trigger ordinary income to the holder of the option in an amount
equal to the difference between the fair market value of the
shares at the time of exercise and the option exercise price,
subject to a deduction for any estate tax paid with respect to
the non-qualified option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other Tax Issues.</FONT></I><FONT size="2">
Award recipients generally may not deduct investment-related
interest to the extent that this interest exceeds their net
investment income for any year. Investment-related interest
generally includes interest a recipient pays on indebtedness the
recipient incurs to purchase shares of D.R.&nbsp;Horton common
stock. Award recipients may deduct any interest disallowed under
this rule in later years, subject to the same limitation.
</FONT>

<P align="center"><FONT size="2">121
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton generally must withhold any
required taxes with respect to income recognized in connection
with an exercise or payment of an award, and D.R.&nbsp;Horton
may require a recipient to pay these taxes as a condition to the
recipient&#146;s exercise of an award.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a change in control of
D.R.&nbsp;Horton and depending upon a recipient&#146;s
individual circumstances, a portion of grants under the Stock
Incentive Plan may constitute &#147;excess parachute
payments&#148; under the &#147;golden parachute&#148; provisions
of the Internal Revenue Code. Under these provisions, a
recipient would be subject to a 20% excise tax on any
&#147;excess parachute payments&#148; and D.R.&nbsp;Horton would
not be able to take any tax deduction with respect to these
payments. Award recipients should consult their tax advisors as
to whether any accelerated vesting of an award in connection
with a change of our ownership or control would give rise to an
&#147;excess parachute payment.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Plan Benefits</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To date, D.R.&nbsp;Horton has only awarded
nonqualified stock options under the Stock Incentive Plan. The
following table lists the nonqualified stock options granted,
from adoption of the Stock Incentive Plan in 1991 through
January&nbsp;14, 2002, to the executive officers named in the
Summary Compensation Table, all current executive officers as a
group (4&nbsp;persons), all current directors who are not
executive officers as a group (7&nbsp;persons), each nominee for
election as a director, each associate of any such director,
executive officer or nominee, and all employees, including
current officers who are not executive officers, as a group
(249&nbsp;persons). No other person has received more than five
percent of the options issued under the plan. The number of
shares set forth in the table has been adjusted to reflect the
additional shares received in various stock dividends as to
options which were outstanding and not previously exercised at
the time of the dividends.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Current executive officers:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald R. Horton*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Chairman of the Board
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-0-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Donald J. Tomnitz*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Vice Chairman, President&nbsp;&#38; Chief
	Executive Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">585,387</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Samuel R. Fuller*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Vice President, Treasurer&nbsp;&#38;
	Chief Financial Officer
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,586</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stacey H. Dwyer
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Executive Vice President
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">66,874</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Current executive officers, as a
	group:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">718,847</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Current directors who are not executive
	officers:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Bradley S. Anderson*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-0-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard Beckwitt*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">609,818</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard I. Galland*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,050</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Richard L. Horton*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-0-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terrill J. Horton*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-0-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Francine I. Neff*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,630</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Scott J. Stone*
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">-0-</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Current directors who are not executive
	officers, as a group:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">621,498</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">All employees, including current officers who
	are not executive officers, as a group:</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,060,575</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Nominee for election as a director.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">122
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Copy of Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stockholders entitled to vote at the annual
meeting may obtain a copy of the Stock Incentive Plan upon
request to D.R.&nbsp;Horton, Attention: Assistant to the
Corporate Counsel, 1901&nbsp;Ascension Boulevard,
Suite&nbsp;100, Arlington, Texas 76006, (817)&nbsp;856-8200,
ext.&nbsp;1046.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors has approved the proposal
to amend the company&#146;s Stock Incentive Plan, as amended, to
increase the number of authorized shares of D.R.&nbsp;Horton
common stock issuable thereunder and recommends voting
<B>FOR</B> the adoption of the proposal.
</FONT>

<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="094"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the D.R.&nbsp;Horton common stock
to be issued in connection with the merger will be passed upon
for D.R.&nbsp;Horton by Gibson, Dunn&nbsp;&#38; Crutcher LLP,
Dallas, Texas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tax consequences of the merger described in
&#147;U.S.&nbsp;Federal Income Tax Consequences&#148; have been
passed upon by Gibson, Dunn&nbsp;&#38; Crutcher LLP for
D.R.&nbsp;Horton and Schuler.
</FONT>

<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="095"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of
D.R.&nbsp;Horton, Inc. appearing in D.R.&nbsp;Horton,
Inc.&#146;s Annual Report (Form&nbsp;10-K) for the year ended
September&nbsp;30, 2001, and the balance sheet of Schuler Homes,
Inc., the consolidated financial statements of Schuler
Residential, Inc. and the combined financial statements of
Western Pacific Housing, appearing in Schuler Homes, Inc.&#146;s
Annual Report on Form&nbsp;10-K for the year ended
March&nbsp;31, 2001, have been audited by Ernst&nbsp;&#38; Young
LLP, independent auditors, as set forth in their reports
thereon, included therein and incorporated by reference in this
Joint Proxy Statement, which is referred to and made a part of
this Prospectus and Registration Statement. Such financial
statements are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in
accounting and auditing.
</FONT>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to the unaudited condensed
consolidated interim financial information of Schuler Homes,
Inc. for the three-month periods ended June&nbsp;30, 2001 and
2000 and September&nbsp;30, 2001 and 2000 and the six-month
periods ended September&nbsp;30, 2001 and 2000, incorporated by
reference in this Joint Proxy Statement, Ernst&nbsp;&#38; Young
LLP have reported that they have applied limited procedures in
accordance with professional standards for a review of such
information. However, their separate reports, included in
Schuler Homes, Inc.&#146;s Quarterly Reports on Forms 10-Q for
the quarters ended June&nbsp;30, 2001 and September&nbsp;30,
2001, and incorporated herein by reference, state that they did
not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on
their reports on such information should be restricted
considering the limited nature of the review procedures applied.
The independent auditors are not subject to the liability
provisions of Section&nbsp;11 of the Securities Act of 1933 for
their report on the unaudited interim financial information
because that report is not a &#147;report&#148; or a
&#147;part&#148; of the Registration Statement prepared or
certified by the auditors within the meaning of Sections&nbsp;7
and 11 of the Securities Act of 1933.
</FONT>

<P align="center"><FONT size="2">123
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "STOCKHOLDER PROPOSALS" -->
<DIV align="left"><A NAME="096"></A></DIV>

<P align="center">
<B><FONT size="2">STOCKHOLDER PROPOSALS</FONT></B>


<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger is consummated, the first annual
meeting of the stockholders of D.R.&nbsp;Horton after such
consummation is expected to be held on or about January&nbsp;31,
2003. If the merger is not consummated, the next annual meeting
of stockholders of D.R.&nbsp;Horton is expected to be held on or
about January&nbsp;31, 2003 and the next annual meeting of
stockholders of Schuler is expected to be held on or about
August&nbsp;15, 2002.
</FONT>



<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the foregoing, if any D.R.&nbsp;Horton
stockholder intends to present a proposal at the 2003 annual
meeting of the stockholders of D.R.&nbsp;Horton and wishes to
have such proposal considered for inclusion in the proxy
materials for such meeting, such holder must submit the proposal
to the Secretary of D.R.&nbsp;Horton in writing so as to be
received at the principal executive offices of D.R.&nbsp;Horton
by July&nbsp;31, 2002. Such proposals must also meet the other
requirements of the rules of the SEC relating to
stockholders&#146; proposals. In addition, the Bylaws of
D.R.&nbsp;Horton provide that only stockholder proposals
submitted in a timely manner to the Secretary of
D.R.&nbsp;Horton may be acted upon at an annual meeting of
stockholders. To be timely, a stockholder&#146;s notice must be
delivered to, or mailed and received at, the principal executive
offices of D.R.&nbsp;Horton not less than 30 calendar days prior
to the date of the originally scheduled meeting. However, if
less than 40 calendar days&#146; notice or prior public
disclosure of the date of the scheduled meeting is given or made
by D.R.&nbsp;Horton, notice by the stockholder to be timely must
be received not later than the close of business on the tenth
calendar day following the earlier of the day on which such
notice of the date of the scheduled meeting was mailed or the
day on which such public disclosure was made. If the merger is
not consummated, the only stockholder proposals eligible to be
considered for inclusion in the proxy materials for the 2003
annual meeting of D.R.&nbsp;Horton and 2002 annual meeting of
Schuler, respectively, will be those which have been duly
submitted to the Corporate Counsel of D.R.&nbsp;Horton by
July&nbsp;31, 2002 or the Secretary of Schuler by April&nbsp;2,
2002, as the case may be, as provided in the respective annual
meeting proxy statements of D.R.&nbsp;Horton and Schuler. If the
merger is consummated, Schuler will not hold a 2002 annual
meeting of stockholders.
</FONT>


<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="097"></A></DIV>

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton and Schuler each file reports,
proxy statements and other important business and financial
information with the SEC. The public may read and copy any
materials that either Schuler or D.R.&nbsp;Horton files with the
SEC at the public reference facilities maintained at
450&nbsp;Fifth Street, N.W., Washington,&nbsp;D.C. 20549. The
public may obtain information on the operation of the public
reference room by calling the SEC at 1-800-SEC-0330. The SEC
maintains a web site that contains reports, proxy and
information statements and other information regarding
registrants (including Schuler and D.R.&nbsp;Horton) that file
electronically with the SEC (including Schuler and
D.R.&nbsp;Horton). The SEC&#146;s web site can be accessed at
http://www.sec.gov. D.R.&nbsp;Horton common stock is listed on
the NYSE. Reports, proxy statements and other information we
file can also be inspected at the offices of the NYSE,
20&nbsp;Broad Street, New York, New York 10005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton has filed with the SEC a
Registration Statement on Form&nbsp;S-4 under the Securities Act
of 1933, of which this Joint Proxy Statement/ Prospectus is a
part, with respect to the D.R.&nbsp;Horton common stock to be
issued to Schuler stockholders as a result of the merger. This
Joint Proxy Statement/ Prospectus does not contain all the
information set forth in that registration statement. For
further information, please refer to the registration statement,
which may be inspected and copied, or obtained from, the SEC or
the NYSE in the manner described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following documents previously filed by
D.R.&nbsp;Horton with the SEC under the File Number 1-14122 are
incorporated by reference in this Joint Proxy Statement/
Prospectus:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">D.R.&nbsp;Horton&#146;s Annual Report on
	Form&nbsp;10-K for the fiscal year ended September&nbsp;30,
	2001;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the description of D.R.&nbsp;Horton common stock
	set forth in D.R.&nbsp;Horton&#146;s registration statement on
	Form&nbsp;8-A, filed with the SEC on December&nbsp;7, 1995 and
	amended on April&nbsp;30, 1998.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">124
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following documents previously filed by
Schuler with the SEC under the File Number&nbsp;0-32461 are
incorporated by reference in this Joint Proxy Statement/
Prospectus:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Annual Report on Form&nbsp;10-K
	for the fiscal year ended March&nbsp;31, 2001;
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Quarterly Report on Form&nbsp;10-Q
	for the fiscal quarter ended June&nbsp;30, 2001;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Quarterly Report on Form&nbsp;10-Q
	for the fiscal quarter ended September&nbsp;30, 2001;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Current Report on Form&nbsp;8-K
	dated August&nbsp;9, 2001;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Current Report on Form&nbsp;8-K
	dated October&nbsp;5, 2001;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Current Report on Form&nbsp;8-K
	dated October&nbsp;24, 2001;
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Current Report on Form&nbsp;8-K
	dated November&nbsp;9, 2001;&nbsp;and
	</FONT></TD>
</TR>


<TR>
	<TD>&nbsp;</TD>
</TR>


<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Schuler&#146;s Current Report on Form&nbsp;8-K
	dated January&nbsp;11, 2002.
	</FONT></TD>
</TR>


</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All documents filed by D.R.&nbsp;Horton and
Schuler under Section&nbsp;13(a), 13(c), 14 or 15(d) of the
Exchange Act, after the date of this Joint Proxy Statement/
Prospectus and before the date of their respective stockholder
meetings, are incorporated into this Joint Proxy Statement/
Prospectus by reference and will constitute a part of this Joint
Proxy Statement/ Prospectus from the date they are filed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">D.R.&nbsp;Horton or Schuler will provide each
person to whom a copy of this Joint Proxy Statement/ Prospectus
is delivered a copy of any or all of the information that has
been incorporated by reference in this Joint Proxy Statement/
Prospectus, but not delivered in this Joint Proxy Statement/
Prospectus. We will provide this information by first class mail
at no cost within one business day of written or oral request
thereupon addressed to 1901&nbsp;Ascension Blvd.,
Suite&nbsp;100, Arlington, Texas 76006, Attention: Investor
Relations (telephone: (817)&nbsp;856-8200), in the case of
D.R.&nbsp;Horton and 400&nbsp;Continental Blvd., Suite&nbsp;100,
El&nbsp;Segundo, California 90245, Attention: Corporate
Secretary (telephone: (310)&nbsp;648-7200), in the case of
Schuler. <B>To ensure timely delivery, we suggest you request
the information by February&nbsp;11, 2002.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">No one has been authorized to give any
information or to make any representations other than those
contained in this Joint Proxy Statement/ Prospectus in
connection with the solicitation of proxies or the offering of
securities made by this Joint Proxy Statement/ Prospectus. If
given or made, such information or representations must not be
relied upon as having been authorized by D.R.&nbsp;Horton,
Schuler or any other person on their behalf. This Joint Proxy
Statement/ Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities, or the
solicitation of a proxy, in any jurisdiction to or from any
person to whom it is not lawful to make any such offer or
solicitation in such jurisdiction. Neither the delivery of this
Joint Proxy Statement/ Prospectus nor any distribution of
securities to which it relates will under any circumstances
create an implication that there has been no change in the
affairs of D.R.&nbsp;Horton or Schuler since the date of this
Joint Proxy Statement/ Prospectus or that the information in it
is correct as of any time subsequent to its&nbsp;date.</FONT></B>

<P align="center"><FONT size="2">125
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="right">
<B><FONT size="2">ANNEX I</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">AGREEMENT AND PLAN OF MERGER</FONT></B>

<DIV align="center">
<B><FONT size="2">between</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">D.R. HORTON, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">and</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">SCHULER HOMES, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">dated as of October&nbsp;22, 2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">and</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">amended as of November&nbsp;8, 2001</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 1&nbsp;THE MERGER
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">The Merger
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1.1.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Effective Time
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1.1.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Closing
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Effective Time
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Effect of the Merger
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Certificate of Incorporation, By-Laws
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1.4.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Certificate of Incorporation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">1.4.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">By-Laws
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">1.5
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Directors and Officers
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 2&nbsp;EFFECT OF THE MERGER ON THE
	CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
	CERTIFICATES
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Effect on Capital Stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">No Conversion of DHI Common Stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Cancellation of Certain Shares of Company Common
	Stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.3
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Conversion of the Company Shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.4
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Share Election
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.5
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Company Shares Cancelled
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.6
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Stock Options
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.7
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Stock Purchase Plan
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.8
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Adjustment of Base Exchange Ratio
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.1.9
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Dissenting Shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Exchange of Certificates
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Exchange Agent
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Exchange Procedures
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.3
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Distributions with Respect to Unexchanged Shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.4
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">No Further Ownership Rights in Company Shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.5
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">No Fractional Shares
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.6
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Termination of Exchange Fund
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.7
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">No Liability
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.8
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Investment of Exchange Fund
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.9
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Transfer Taxes
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">2.2.10
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Return of Merger Consideration
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 3&nbsp;REPRESENTATIONS AND WARRANTIES OF
	THE COMPANY
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Organization, Existence and Good Standing of the
	Company
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Organization, Existence and Good Standing of
	Company Subsidiaries
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Capitalization
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">3.3.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Capitalization of Company and Company Subsidiaries
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">3.3.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Obligations to Issue Capital Stock of Company or
	Company Subsidiaries
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Authority Relative to this Agreement;
	Recommendation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.5
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Company Material Contracts
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.6
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">No Conflict
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">ii
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.7
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Required Filings and Consents
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.8
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Compliance
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.9
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Permits
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.10
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">SEC Filings
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.11
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Financial Statements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.12
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Absence of Certain Changes or Events
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.13
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">No Undisclosed Liabilities
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.14
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Absence of Litigation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.15
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Employee Benefit Plans
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">3.15.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Company Employee Plans
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">3.15.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Absence of Certain Events
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.16
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Labor Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.17
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Restrictions on Business Activities
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.18
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Real Property
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.19
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Taxes
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.20
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Intellectual Property
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.21
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Environmental Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.22
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Interested Party Transactions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.23
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Insurance
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.24
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Opinion of Financial Advisors
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.25
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Brokers
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.26
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">State Take-Over Statutes
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.27
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Tax Treatment
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.28
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Affiliates
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.29
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Vote Required
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">3.30
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Tax Treatment of Reorganization
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 4&nbsp;REPRESENTATIONS AND WARRANTIES OF
	DHI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Organization, Existence and Good Standing of DHI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Organization, Existence and Good Standing of the
	DHI Subsidiaries
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Capitalization of DHI and the DHI Subsidiaries
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Authority Relative to this Agreement
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.5
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">No Conflict
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.6
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Required Filings and Consents
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.7
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Compliance
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.8
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Permits
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.9
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">SEC Filings
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.10
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Financial Statements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.11
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Absence of Certain Changes or Events
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.12
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">No Undisclosed Liabilities
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.13
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Absence of Litigation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.14
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Employee Benefit Plans
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">4.14.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">DHI Employee Plans
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">iii
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">4.14.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Absence of Certain Events
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.15
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Labor Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.16
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Real Property
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.17
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Taxes
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.18
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Environmental Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.19
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Insurance
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.20
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Brokers
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.21
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">DHI Common Stock
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.22
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Sufficient Funds
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.23
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Opinion of Financial Advisor
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">4.24
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Tax Treatment
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 5&nbsp;CONDUCT OF BUSINESS PENDING THE
	MERGER
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Conduct of Business by the Company Pending the
	Merger
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">No Solicitation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-27</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Conduct of Business by DHI Pending the Merger
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">5.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Section&nbsp;341(f) Consent
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 6&nbsp;ADDITIONAL AGREEMENTS
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">HSR Act
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Access to Information; Confidentiality
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Registration Statement
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Meetings of Stockholders
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.5
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Tax-Free Reorganization Treatment
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.6
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Affiliate Agreements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.7
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Company Stock Options
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.8
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Board Representation
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.9
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Indemnification and Insurance
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.10
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Notification of Certain Matters
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.11
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Further Action
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.12
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Public Announcements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.13
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Employee Benefits
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-33</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">6.14
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Mutual Release of Obligations
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 7&nbsp;TERMINATION, AMENDMENT AND WAIVER
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">7.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Termination
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">7.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Effect of Termination
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 8&nbsp;CONDITIONS TO CLOSING
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">8.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Mutual Conditions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.1
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">No Injunctions or Restraints; Illegality
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.2
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Governmental Actions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.3
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">HSR Act
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.4
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Company Stockholder Approval
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-36</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.5
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">DHI Stockholder Approval
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.6
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Listing
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.7
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Registration Statement
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">iv
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<TR>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">8.1.8
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="bottom">
	<FONT size="2">Consents
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">8.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Conditions to Obligations of DHI
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">8.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Conditions to Obligations of the Company
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-37</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="6" align="left" valign="top">
	<FONT size="2">ARTICLE 9&nbsp;GENERAL PROVISIONS
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.1
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Expenses and Other Payments
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-38</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.2
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Effectiveness of Representations, Warranties,
	Covenants and Agreements
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.3
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Notices
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.4
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Certain Definitions
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.5
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Amendment
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.6
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Waiver
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.7
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Headings
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.8
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Severability
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.9
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Entire Agreement
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.10
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Assignment
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.11
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Parties in Interest
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.12
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Failure or Indulgence Not Waiver; Remedies
	Cumulative
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.13
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Governing Law
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">9.14
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD colspan="3" align="left" valign="bottom">
	<FONT size="2">Counterparts
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-41</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">EXHIBITS AND SCHEDULES</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="78%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Exhibits</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;A
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Company Voting Agreement
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;B
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">DHI Voting Agreement
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.6(a)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Agreement regarding disposition of shares
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.6(b)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Agreement regarding disposition of shares
	(James K. Schuler and Eugene S. Rosenfeld)
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.6(c)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Non-Compete Agreement
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.6(d)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Agreement regarding disposition of shares
	(WPH-Schuler LLC, Apollo Real Estate Investment Fund,&nbsp;L.P.,
	Highridge Pacific Housing Investors,&nbsp;L.P. and Blackacre
	WPH,&nbsp;LLC)
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.6(e)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Employment Agreements
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exhibit&nbsp;6.14
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Termination Agreement and Release
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Schedules</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<FONT size="2">Company Disclosure Schedule
	</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top">
	<FONT size="2">DHI Disclosure Schedule
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schedule&nbsp;9.4(h)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certain Company Officers
	</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Schedule&nbsp;9.4(i)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Certain DHI Officers
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">v
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DEFINED TERMS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="92%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2000 DHI Balance Sheet
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">2001 Company Balance Sheet
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Adjusted Cash Amount
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Adjusted Exchange Ratio
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">affiliate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Antitrust Division
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Base Consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Base Consideration Value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Base Election
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Base Exchange Ratio
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Beneficially Owned
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-39</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Blue Sky Laws
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">BOA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">business day
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash Consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash Election
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cash Election Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Cause for Termination
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Certificate of Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Certificate(s)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Class&nbsp;A Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Class&nbsp;B Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Closing Date
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Code
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Affiliates
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Board
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Development Properties
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Disclosure Schedule
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Employee Plans
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company ERISA Affiliate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Permits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company SEC Reports
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Stock Option
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Stock Plans
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Stock Purchase Plan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Stockholder Meeting
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Company Voting Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Confidentiality Letter
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">vi
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="92%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">control
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Delaware Law
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Common Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Board
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Development Properties
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Disclosure Schedule
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Employee Plans
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI ERISA Affiliate
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Permits
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Preferred Stock
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI SEC Reports
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Stock Option
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Stockholder Meeting
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-31</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DHI Voting Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Director Options
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Dissenting Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Effective Time
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Election Date
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Environmental Law
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">ERISA
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exchange Act
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exchange Agent
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Exchange Fund
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Final Exercise
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Floor Price
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Form of Election
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">FTC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Governmental Entity
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">GUST
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Hazardous Substance
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">HSR Act
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Indemnified Parties
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-32</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">IRS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">M&#38;P Plan
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-34</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">material adverse effect
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Material Adverse Effect
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Material Contracts
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Merger Consideration
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-Election
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Non-Election Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">vii
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="92%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Notice of Superior Proposal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">NYSE
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PBGC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">person
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Proxy Statement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Registration Statement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-30</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Reorganization Agreement
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Requested Cash Amount
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SEC
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Securities Act
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock Election
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock Election Shares
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock Exchange Ratio
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Stock Value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">subsidiary
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Superior Proposal
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Surviving Corporation
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Tax Returns
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Terminating Breach
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-35</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Third Party
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Third Party Acquisition
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">to DHI&#146;s knowledge
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">to the Company&#146;s knowledge
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">to the knowledge of DHI
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">to the knowledge of the Company
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">trading day
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-40</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Transfer Taxes
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">UBS Warburg
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">I-19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">viii
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">AGREEMENT AND PLAN OF MERGER</FONT></B>

<DIV align="center">
<B><FONT size="2">(Conformed as Amended)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">AGREEMENT AND PLAN OF MERGER, dated as of
October&nbsp;22, 2001 and amended as of November&nbsp;8, 2001
(the <I>&#147;Agreement&#148;</I>), between D.R. HORTON, INC., a
Delaware corporation (<I>&#147;DHI&#148;</I>), and SCHULER
HOMES, INC., a Delaware corporation (the
<I>&#147;Company&#148;</I>).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, the Board of Directors of DHI (the
<I>&#147;DHI Board&#148;</I>) and the Board of Directors of the
Company (the <I>&#147;Company Board&#148;</I>) have approved and
declared advisable this Agreement and the merger of the Company
with and into DHI (the <I>&#147;Merger&#148;</I>) in accordance
with the Delaware General Corporation Law (the <I>&#147;Delaware
Law&#148;</I>), upon the terms and conditions set forth in this
Agreement, whereby each share of Class&nbsp;A common stock, par
value $.001&nbsp;per share (the <I>&#147;Class&nbsp;A Common
Stock&#148;</I>), and Class&nbsp;B common stock, par value
$.001&nbsp;per share (the <I>&#147;Class&nbsp;B Common
Stock&#148;</I>), of the Company (the Class&nbsp;A Common Stock
and the Class&nbsp;B Common Stock, collectively the
<I>&#147;Company Common Stock&#148;</I>), not owned directly or
indirectly by the Company will be converted into the right to
receive the merger consideration provided for herein (the
Company Common Stock may be sometimes hereinafter referred to as
the <I>&#147;Company Shares&#148;</I>);
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, each of DHI and the Company desire to
make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, for federal income Tax purposes, it is
intended that the Merger shall qualify as a reorganization under
the provisions of Section&nbsp;368 of the Internal Revenue Code
of 1986, as amended (the <I>&#147;Code&#148;</I>);
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, as a condition and inducement to DHI to
enter into this Agreement and to incur the obligations set forth
herein, contemporaneously with the execution and delivery of
this Agreement, certain stockholders of the Company are entering
into a Voting Agreement, in the form of <I>Exhibit&nbsp;A</I>
attached hereto (the <I>&#147;Company Voting
Agreement&#148;</I>), with DHI, pursuant to which, among other
things, such stockholders are agreeing to vote their shares of
Company Common Stock in favor of the adoption of this Agreement
and the Merger provided for herein in accordance with and
subject to the terms of the Company Voting Agreement;&nbsp;and
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, as a condition and inducement to the
Company to enter into this Agreement and to incur the
obligations set forth herein, contemporaneously with the
execution and delivery of this Agreement, certain stockholders
of DHI are entering into a Voting Agreement, in the form of
<I>Exhibit&nbsp;B</I> attached hereto (the <I>&#147;DHI Voting
Agreement&#148;</I>), with the Company, pursuant to which, among
other things, such stockholders are agreeing to vote their
shares of DHI Common Stock in favor of the adoption of this
Agreement and the Merger provided for herein in accordance with
and subject to the terms of the DHI Voting Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">NOW, THEREFORE, in consideration of the premises,
and the mutual covenants and agreements contained herein, the
parties hereto do hereby agree as follows:
</FONT>

<!-- link1 "ARTICLE 1 The Merger" -->
<DIV align="left"><A NAME="098"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;1
</FONT>

<P align="center">
<FONT size="2">THE MERGER
</FONT>

<P align="left">
<FONT size="2">1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The
Merger.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effective
Time.</I> At the Effective Time, and subject to and upon the
terms and conditions of this Agreement and the Delaware Law, the
Company shall be merged with and into DHI, the separate
corporate existence of the Company shall cease, and DHI shall
continue as the surviving corporation. DHI as the surviving
corporation after the Merger is hereinafter sometimes referred
to as the <I>&#147;Surviving Corporation.&#148;</I> The name of
the Surviving Corporation shall be D.R. Horton,&nbsp;Inc.
</FONT>

<P align="center"><FONT size="2">I-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Closing.
</I>Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned
pursuant to <I>Section&nbsp;7.1</I> and subject to the
satisfaction or waiver of the conditions set forth in
ARTICLE&nbsp;8, the consummation of the Merger will take place
as promptly as practicable (and in any event within
two&nbsp;business days) after satisfaction or waiver of the
conditions set forth in ARTICLE&nbsp;8, at the offices of
Gibson, Dunn&nbsp;&#38; Crutcher LLP, Dallas, Texas, unless
another date, time or place is agreed to in writing by the
parties hereto (the date of the consummation of the Merger being
the <I>&#147;Closing Date&#148;</I>).
</FONT>

<P align="left">
<FONT size="2">1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effective
Time. </I>As promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the
conditions set forth in ARTICLE&nbsp;8, the parties hereto shall
cause the Merger to be consummated by filing a certificate of
merger as contemplated by the Delaware Law (the
<I>&#147;Certificate of Merger&#148;</I>), together with any
required related certificates, with the Secretary of State of
the State of Delaware, in such form as required by, and executed
in accordance with the relevant provisions of, the Delaware Law
(the time of such filing being the <I>&#147;Effective
Time&#148;</I>).
</FONT>

<P align="left">
<FONT size="2">1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect of the
Merger. </I>At the Effective Time, the effect of the Merger
shall be as provided in this Agreement, the Certificate of
Merger and the applicable provisions of the Delaware Law.
Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and DHI shall
vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and DHI shall become the debts,
liabilities and duties of the Surviving Corporation.
</FONT>

<P align="left">
<FONT size="2">1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certificate
of Incorporation, By-Laws.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certificate
of Incorporation. </I>At the Effective Time the Certificate of
Incorporation of DHI, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by
the Delaware Law and such Certificate of Incorporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>By-Laws.
</I>The Bylaws of DHI, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation
until thereafter amended as provided by the Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and
such Bylaws.
</FONT>

<P align="left">
<FONT size="2">1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Directors and
Officers. </I>The directors of DHI immediately prior to the
Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving
Corporation, subject to <I>Section&nbsp;6.8,</I> and the
officers of DHI shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
</FONT>

<!-- link1 "ARTICLE 2 Effect of the Merger on the Capital Stock of the Constituent Corporations; Exchange of Certificates" -->
<DIV align="left"><A NAME="099"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;2
</FONT>

<P align="center">
<FONT size="2">EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
</FONT>

<DIV align="center">
<FONT size="2">CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
</FONT>
</DIV>

<P align="left">
<FONT size="2">2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect on
Capital Stock. </I>As of the Effective Time, by virtue of the
Merger and without any action on the part of DHI, the Company or
any holder of any of the following securities:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Conversion of DHI Common Stock. </I>Each share of common stock,
par value $.01&nbsp;per share, of DHI <I>(&#147;DHI Common
Stock&#148;</I>) issued and outstanding immediately prior to the
Effective Time shall continue to be issued and outstanding DHI
Common Stock. Any DHI Common Stock held in DHI&#146;s treasury
immediately prior to the Effective Time shall continue to be
held in treasury of the Surviving Corporation at the Effective
Time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cancellation
of Certain Shares of Company Common Stock. </I>Each Company
Share held in the treasury of the Company and each Company Share
owned by DHI or any direct or indirect wholly owned subsidiary
of the Company or DHI immediately prior to the Effective Time
shall cease to be outstanding, be canceled and retired without
payment of any consideration therefor and cease to exist.
</FONT>

<P align="center"><FONT size="2">I-2
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conversion
of the Company Shares. </I>At the Effective Time, subject to the
provisions of this Agreement, each Company Share issued and
outstanding immediately prior to the Effective Time (other than
shares cancelled pursuant to <I>Section&nbsp;2.1.2</I> and
Dissenting Shares) shall be converted into the following (the
<I>&#147;Merger Consideration&#148;</I>):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(a)&nbsp;For each such Company Share other than
	shares as to which a Stock Election or Cash Election has been
	effectively made and not revoked or lost pursuant to
	<I>Section&nbsp;2.1.4,</I> the right to receive cash and DHI
	Common Stock as specified herein below (the <I>&#147;Base
	Consideration&#148;</I>). Subject to
	<I>Section&nbsp;2.1.3(a)(vii),</I> the Base Consideration shall
	be $4.09 in cash plus a fraction of a share of DHI Common Stock
	equal to the Base Exchange Ratio. The term <I>&#147;Base
	Exchange Ratio&#148;</I> means:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;If the Stock Value is greater than or
	equal to $19.50 and less than or equal to $23.50, the Base
	Exchange Ratio shall be 0.570.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;If the Stock Value is less than $19.50
	and greater than $17.50, the Base Exchange Ratio shall equal the
	quotient obtained by dividing $11.115 by the Stock Value
	(rounded to the nearest one&nbsp;thousandth).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;If the Stock Value is greater than
	$23.50 and less than $27.51, the Base Exchange Ratio shall equal
	the quotient obtained by dividing $13.395 by the Stock Value
	(rounded to the nearest one&nbsp;thousandth).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;If the Stock Value is less than or
	equal to $17.50, the Base Exchange Ratio shall be 0.635.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(v)&nbsp;If the Stock Value is greater than or
	equal to $27.51, the Base Exchange Ratio shall be 0.487.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vi)&nbsp;The term <I>&#147;Stock Value&#148;</I>
	means the average of the closing prices of DHI Common Stock as
	reported for NYSE Composite Transactions for the
	15&nbsp;consecutive trading days ending on the date that is
	three trading days prior to the date of the Company Stockholder
	Meeting.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vii)&nbsp;If the Stock Value is less than the
	Floor Price and DHI so elects, as provided in
	<I>Section&nbsp;7.1(f),</I> the Base Consideration shall be the
	Adjusted Cash Amount plus a fraction of a share of DHI Common
	Stock equal to the Adjusted Exchange Ratio; provided that, as
	set forth in <I>Section&nbsp;2.1.3(b)(ii),</I> the Base
	Consideration Value shall equal not less than $14.25.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(viii)&nbsp;The term <I>&#147;Adjusted Cash
	Amount&#148;</I> means $4.09, or more if and to the extent
	elected by DHI as provided in <I>Section&nbsp;7.1(f).</I>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ix)&nbsp;The term <I>&#147;Adjusted Exchange
	Ratio&#148;</I> means 0.635, or more if and to the extent
	elected by DHI pursuant to <I>Section&nbsp;7.1(f).</I>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(x)&nbsp;The term <I>&#147;Floor Price&#148;</I>
	means $16.00.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Company Shares as to which a Base Election has
	been made or as to which a Stock Election or Cash Election has
	not been effectively made or, if made, has been revoked or lost
	pursuant to <I>Section&nbsp;2.1.4</I> (a
	<I>&#147;Non-Election&#148;</I>) are hereinafter sometimes
	referred to as <I>&#147;Non-Election Shares.&#148;</I>
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(b)&nbsp;Subject to <I>Section&nbsp;2.1.3(e),</I>
	for each such Company Share with respect to which an election to
	receive DHI Common Stock has effectively been made and not
	revoked or lost pursuant to <I>Section&nbsp;2.1.4</I> (a
	<I>&#147;Stock Election&#148;</I>), the right to receive a
	fraction of a share of DHI Common Stock equal to the Stock
	Exchange Ratio.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;The term <I>&#147;Stock Exchange
	Ratio&#148;</I> means the quotient of the Base Consideration
	Value divided by the Stock Value.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;The term <I>&#147;Base Consideration
	Value&#148;</I> means (w)&nbsp;$4.09 plus (x)&nbsp;the product
	of the Stock Value times the Base Exchange Ratio; provided, that
	if the Stock Value is less than the
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">I-3
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Floor Price and DHI so elects, as provided in
	<I>Section&nbsp;7.1(f),</I> the Base Consideration Value shall
	be the sum of (y)&nbsp;the Adjusted Cash Amount plus
	(z)&nbsp;the product of the Adjusted Exchange Ratio times the
	Stock Value; provided, further, that the sum of (y)&nbsp;and
	(z)&nbsp;shall not be less than $14.25.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Company Shares for which a Stock Election has
	been made are hereinafter sometimes referred to as the
	<I>&#147;Stock Election Shares.&#148;</I>
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(c)&nbsp;Subject to <I>Section&nbsp;2.1.3(d),</I>
	for each such Company Share with respect to which an election to
	receive cash has been effectively made and not revoked or lost
	pursuant to <I>Section&nbsp;2.1.4</I> (a <I>&#147;Cash
	Election&#148;</I>), the right to receive in cash an amount
	equal to the Base Consideration Value. Company Shares for which
	a Cash Election has been made are hereinafter sometimes referred
	to as the <I>&#147;Cash Election Shares.&#148;</I>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(d)&nbsp;If the Requested Cash Amount exceeds the
	Cash Consideration, the Merger Consideration for each Cash
	Election Share shall be cash and DHI Common Stock as set forth
	below:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;Cash equal to the quotient of
	(y)&nbsp;the Cash Consideration minus the product of
	(A)&nbsp;the Adjusted Cash Amount times (B)&nbsp;the aggregate
	number of Non-Election Shares, divided by (z)&nbsp;the aggregate
	number of Cash Election Shares, but in no event less than the
	Adjusted Cash Amount.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;A fraction of a share of DHI Common
	Stock equal to the quotient of (y)&nbsp;the Base Consideration
	Value minus the cash payable pursuant to
	<I>Section&nbsp;2.1.3(d)(i),</I> divided by (z)&nbsp;the Stock
	Value.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;The term <I>&#147;Requested Cash
	Amount&#148;</I> means the aggregate amount of cash that would
	be payable with respect to Non-Election Shares and Cash Election
	Shares before any adjustments pursuant to
	<I>Section&nbsp;2.1.3(e)</I> or this
	<I>Section&nbsp;2.1.3(d).</I>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;The term <I>&#147;Cash
	Consideration&#148;</I> means the difference between
	(y)&nbsp;the product of the Adjusted Cash Amount times the
	number of Company Shares outstanding immediately prior to the
	Effective Time (other than shares cancelled pursuant to
	<I>Section&nbsp;2.1.2</I>), minus (z)&nbsp;the product of the
	number of Dissenting Shares (immediately prior to the Effective
	Time) times the Base Consideration Value.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(e)&nbsp;If the Requested Cash Amount is less
	than the Cash Consideration, the Merger Consideration for each
	Stock Election Share shall be cash and DHI Common Stock as set
	forth below:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;Cash equal to the quotient of
	(y)&nbsp;the Cash Consideration minus the Requested Cash Amount,
	divided by (z)&nbsp;the number of Stock Election Shares.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;A fraction of a share of DHI Common
	Stock equal to the quotient of (y)&nbsp;the Base Consideration
	Value minus the cash payable pursuant to
	<I>Section&nbsp;2.1.3(e)(i),</I> divided by (z)&nbsp;the Stock
	Value.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(f)&nbsp;Notwithstanding the foregoing, except
	where DHI has made an election in accordance with
	<I>Section&nbsp;7.1(f),</I> if more than 50% of the total value
	of the Merger Consideration for all the outstanding Company
	Shares other than shares to be canceled in accordance with
	<I>Section&nbsp;2.1.2</I> would be cash (treating all
	stockholders who give the Company a timely and proper notice of
	intention to exercise appraisal rights as receiving Merger
	Consideration consisting of cash equal to the value of the
	Merger Consideration to be received in the Merger prior to any
	adjustment under this <I>Section&nbsp;2.1.3(f)</I> (or such
	other amount as the Board of Directors of DHI determines to be
	appropriate at the time, based on the advice from DHI tax
	counsel) for each share as to which the notice relates, and
	treating for this purpose the DHI Common Stock receivable in the
	Merger as having a value per share equal to the closing price of
	DHI Common Stock as reported for NYSE Composite Transactions on
	the Closing Date), the cash which a holder of a share of Company
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">I-4
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Common Stock will receive will be reduced on a
	pro rata basis with all other such holders to the amount such
	that 50% of the total value of the Merger Consideration will be
	cash (treating all stockholders who give the Company a timely
	and proper notice of intention to exercise appraisal rights as
	receiving Merger Consideration consisting of cash equal to the
	value of the Merger Consideration to be received in the Merger
	prior to any adjustment under this provision (or such other
	amount as DHI determines to be appropriate at the time, based on
	the advice from its tax counsel) for each share as to which the
	notice relates, and treating for this purpose the DHI Common
	Stock received as having a value per share equal to the closing
	price of DHI Common Stock for NYSE Composite Transactions on the
	Closing Date) and the holders of Company Common Stock will
	receive in exchange for such reduction in cash an amount of
	additional shares of DHI Common Stock obtained by dividing the
	amount of such reduction in cash by the closing price of DHI
	Common Stock for NYSE Composite Transactions on the Closing Date.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Share
Election.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Each person who, on or prior to the
Election Date, is a record holder of shares of Company Shares
shall have the right to submit a Form of Election specifying one
of the following: (i)&nbsp;that such stockholder desires that
all of his or her Company Shares be converted into the Base
Consideration (such election being hereinafter sometimes
referred to as a <I>&#147;Base Election&#148;</I>),
(ii)&nbsp;that such stockholder desires that all of his or her
Company Shares be converted into cash pursuant to the Cash
Election, or (iii)&nbsp;that such stockholder desires that all
of his or her Company Shares be converted into Stock Election
Shares pursuant to the Stock Election. A stockholder may not
make an election for less than all of his or her Company Shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;DHI shall prepare, subject to the
reasonable approval of the Company, a form of election&nbsp;(the
<I>&#147;Form of Election&#148;</I>) for mailing with the Proxy
Statement. The Form of Election shall be (i)&nbsp;mailed to the
record holders of Company Shares as of the record date for the
Company Stockholder Meeting, and (ii)&nbsp;used by each record
holder of Company Shares to make the Base Election, the Cash
Election or the Stock Election. The Company shall also use its
reasonable best efforts to make the Form of Election and the
Proxy Statement available to all persons who become holders of
Company Shares during the period between such record date and
the Election Date. Any such holder&#146;s Base Election, Cash
Election or Stock Election shall have been properly made only if
the Exchange Agent shall have received at its designated office,
by 5:00&nbsp;p.m., New&nbsp;York City time on the business day
next preceding the date of the Company Stockholder Meeting (the
<I>&#147;Election Date&#148;</I>), a Form of Election properly
completed and signed and accompanied by certificate(s) for the
Company Shares <I>(&#147;Certificate(s)&#148;)</I> to which such
Form of Election relates, duly endorsed in blank or otherwise in
form acceptable for transfer on the books of the Company (or by
an appropriate guarantee for delivery of such Certificate(s) as
set forth in such Form of Election from a firm which is a member
of a registered national securities exchange or a commercial
bank or trust company having an office or correspondent in the
United States, provided that such Certificate(s) are in fact
delivered to the Exchange Agent within three trading days after
the date of execution of such guarantee of delivery).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Any Form of Election may be revoked by a
record holder of Company Common Stock submitting such Form of
Election to the Exchange Agent only by written notice received
by the Exchange Agent prior to 5:00&nbsp;p.m., New&nbsp;York
City time on the Election Date. In addition, all Forms of
Election shall automatically be revoked if the Exchange Agent is
notified in writing by DHI and the Company that the Merger has
been abandoned or if either the Company&#146;s or DHI&#146;s
stockholders fail to approve the Merger. If a Form of Election
is revoked because the Merger has been abandoned or if either
the Company&#146;s or DHI&#146;s stockholders fail to approve
the Merger, the Certificate(s) (or guarantee(s) of delivery, if
applicable) for the share(s) of Company Common Stock, if any, to
which such Form of Election relates shall promptly be returned
to the stockholder submitting the same to the Exchange Agent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;For purposes of this Agreement, a holder
of Common Stock who does not submit a Form of Election which is
received by the Exchange Agent prior to the Election Date or who
submits a Form of Election that is not properly made or who
acquires Company Shares after the date hereof pursuant to the
</FONT>

<P align="center"><FONT size="2">I-5
</FONT>

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<DIV align="left">
<FONT size="2">Company Stock Purchase Plan shall be deemed to
have made a Non-Election. If DHI or the Exchange Agent shall
determine that any purported Base Election, Cash Election or
Stock Election was not properly made, such purported Base
Election, Cash Election or Stock Election shall be deemed to be
of no force and effect and the holder making such purported Base
Election, Cash Election or Stock Election shall, for purposes of
this Agreement, be deemed to have made a Non-Election.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;DHI shall have the sole discretion,
which it may delegate in whole or in part to the Exchange Agent,
to determine whether Forms of Election have been properly
completed, signed and submitted or revoked and to disregard
immaterial defects in Forms of Election. The decision of DHI (or
the Exchange Agent, if applicable) in such matters shall be
conclusive and binding. Neither DHI nor the Exchange Agent shall
be under any obligation to notify any stockholder of any defect
in a Form of Election submitted to the Exchange Agent. The
Exchange Agent shall make all computations contemplated by
<I>Section&nbsp;2.1.3(d)</I> and <I>Section&nbsp;2.1.3(e)</I>
and all such computations shall be conclusive and binding on the
holders of Company Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company
Shares Cancelled. </I>Upon conversion pursuant to
<I>Section&nbsp;2.1.3,</I> all Company Shares shall be cancelled
and cease to exist, and each holder thereof shall cease to have
any rights with respect thereto other than the right to receive
the Merger Consideration and any other amounts in accordance
with the terms provided herein. All shares of DHI Common Stock
issued as Merger Consideration shall be fully paid and
nonassessable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock
Options. </I>At the Effective Time, each outstanding option to
purchase Company Common Stock (a <I>&#147;Company Stock
Option&#148;</I>) granted under the Company&#146;s Amended and
Restated 2000 Stock Incentive Plan or Amended and Restated 1992
Stock Option Plan (collectively, the <I>&#147;Company Stock
Plans&#148;</I>) other than options granted under
Article&nbsp;III of either Company Stock Plan <I>(&#147;Director
Options&#148;)</I>, whether or not then vested or exercisable,
shall be replaced by the Surviving Corporation with a comparable
option to purchase DHI Common Stock (a <I>&#147;DHI Stock
Option&#148;</I>), in accordance with the terms of the Company
Stock Plan pursuant to which it was granted and any stock option
agreement by which it is evidenced, except that if the holder of
such DHI Stock Option is involuntarily terminated as an employee
of the Surviving Corporation or any subsidiary without Cause for
Termination (and not on account of death or disability) within
six months after the Effective Time such Company Stock Option
shall become exercisable and shall vest to the extent not
theretofore exercisable or vested as of the date of termination
of employment. It is intended that the foregoing provisions
shall be undertaken in a manner that will not constitute a
&#147;modification&#148; as defined in Section&nbsp;424 of the
Code as to any stock option which is an &#147;incentive stock
option.&#148; Each DHI Stock Option shall be exercisable for
that number of shares of DHI Common Stock equal to the number of
the Company Shares subject to the corresponding Company Stock
Option multiplied by the Stock Exchange Ratio, and shall have an
exercise price per share equal to its exercise price per Company
Share divided by the Stock Exchange Ratio. DHI and the Company
shall take all such steps as may be required to cause the
transactions contemplated by this <I>Section&nbsp;2.1.6</I> and
any other dispositions of equity securities of the Company or
acquisitions of DHI equity securities in connection with this
Agreement by each individual who (i)&nbsp;is a director or
officer of the Company, or (ii)&nbsp;at the Effective Time, will
become a director or officer of DHI, to be exempt under
Rule&nbsp;16b-3 of the Exchange Act. Director Options shall
accelerate and become exercisable, and subsequently terminate,
upon consummation of the Merger, each as provided in
Article&nbsp;III.A of the Company Stock Plans. Holders of shares
of Company Common Stock received upon exercise of Director
Options shall not have the option to elect any form of Merger
Consideration other than the Base Consideration, and such
Company Common Stock shall be deemed to be a Non-Election Share
and shall be converted into a right to receive the Base
Consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Stock
Purchase Plan. </I>The Company shall take all actions necessary
so that (i)&nbsp;no person may participate in the Company&#146;s
1998 Stock Purchase Plan (the <I>&#147;Company Stock Purchase
Plan&#148;</I>) except for such participants participating in
the Company Stock Purchase Plan on September&nbsp;1, 2001;
(ii)&nbsp;no participant in the Company Stock Purchase Plan may
change any election or withholding amount made on or before
September&nbsp;1, 2001, except to exercise otherwise available
rights to reduce such participant&#146;s rate of payroll
deduction or terminate such employee&#146;s outstanding purchase
rights under the
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Company Stock Purchase Plan; (iii)&nbsp;at least
ten days prior to the Closing Date, all participants in the
Company Stock Purchase Plan shall have received notice of the
Merger and the right to terminate their outstanding purchase
rights at any time prior to the Closing Date; (iv)&nbsp;all
outstanding rights to purchase Company Common Stock pursuant to
the Company Stock Purchase Plan shall have been exercised as of
the close of business on the date immediately prior to the
Closing Date in accordance with the provisions of the Company
Stock Purchase Plan (the <I>&#147;Final Exercise&#148;</I>); and
(v)&nbsp;the Company Stock Purchase Plan shall terminate
immediately prior to the Effective Time. No participant in the
Company Stock Purchase Plan shall have the option to elect any
form of Merger Consideration with respect to shares of Company
Common Stock purchased in the Final Exercise other than the Base
Consideration and, at the Effective Time, each Company Share
issued upon the Final Exercise shall be deemed to be a
Non-Election Share and shall be converted into the right to
receive the Base Consideration. DHI shall be entitled to deduct
from the cash component of the Merger Consideration to be
delivered to the participants of the Company Stock Purchase Plan
all applicable withholding taxes attributable to the exercise of
such purchase rights.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adjustment
of Base Exchange Ratio. </I>If after the date hereof and prior
to the Effective Time there shall have been a change in the DHI
Common Stock, by reason of a stock split (including a reverse
split) of the DHI Common Stock or a dividend payable in the DHI
Common Stock, or any other distribution of securities to holders
of the DHI Common Stock with respect to their DHI Common Stock
(including without limitation such a distribution made in
connection with a recapitalization, reclassification, merger,
consolidation, reorganization or similar transaction) or
otherwise, then the Base Exchange Ratio, the Stock Value and the
dollar amounts set forth in clauses&nbsp;(i)&nbsp;through (v),
(ix)&nbsp;and (x)&nbsp;of <I>Section&nbsp;2.1.3(a)</I> shall be
appropriately adjusted; provided, however, that the aggregate
amount of Merger Consideration shall not be adjusted below the
amount provided for in this Article&nbsp;2.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dissenting
Shares. </I>Notwithstanding <I>Section&nbsp;2.1,</I> shares of
Company Common Stock issued and outstanding immediately prior to
the Effective Time and held by a holder who is entitled to
demand and has properly exercised his or her demand for
appraisal rights under, and complies in all respects with,
Section&nbsp;262 of the Delaware Law (the <I>&#147;Dissenting
Shares&#148;</I>) shall not be converted into the right to
receive Merger Consideration, but the holders of Dissenting
Shares shall be entitled to payment of the fair value of such
shares in accordance with the provisions of Section&nbsp;262 of
the Delaware Law; provided, however, that if any such holder
shall have failed to perfect or otherwise shall effectively
waive, withdraw or lose the right to appraisal and payment under
the Delaware Law or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief
provided by Section&nbsp;262 of the Delaware Law, then the right
of such holder to be paid the fair value of such holder&#146;s
Dissenting Shares under Section&nbsp;262 of the Delaware Law
shall cease to exist and such holder&#146;s shares of Company
Common Stock shall thereupon be deemed to have been converted as
of the Effective Time into the right to receive, without
interest, the Merger Consideration receivable by Non-Election
Shares, and such shares shall be deemed not to be Dissenting
Shares. The Company shall give DHI (i)&nbsp;prompt notice of any
notices or demands for appraisal or payment for shares of
Company Common Stock received by the Company and (ii)&nbsp;the
opportunity to participate and direct all negotiations and
proceedings with respect to such notices or demands. The Company
shall not, without the prior written consent of DHI, make any
payment with respect to, or settle, offer to settle or otherwise
negotiate any demands for appraisal or payment for shares of
Company Common Stock. The parties acknowledge that the amounts
referred to in <I>Sections&nbsp;2.1.3(d)</I> and <I>(f)</I> in
respect of Dissenting Shares are included for tax planning
purposes only and are not intended as a statement as to the
value of the Dissenting Shares for the purposes of
Section&nbsp;262 of the Delaware Law.
</FONT>

<P align="left">
<FONT size="2">2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange of
Certificates.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
Agent.</I> Prior to the mailing of the Proxy Statement, DHI
shall enter into an agreement with a bank or trust company
designated by DHI (the <I>&#147;Exchange Agent&#148;</I>),
providing that DHI shall deposit with the Exchange Agent as of
the Effective Time, for the benefit of the holders of the
Company Shares, for exchange in accordance with
<I>Sections&nbsp;2.1.3</I> and <I>2.1.4</I> and this
<I>Section&nbsp;2.2</I> through the Exchange Agent,
(i)&nbsp;cash in an amount equal to the aggregate amount payable
pursuant to <I>Section&nbsp;2.1,</I> (ii)&nbsp;certificates
representing the shares of DHI Common Stock issuable pursuant to
<I>Section&nbsp;2.1</I> and (iii)&nbsp;cash in an amount equal
to the aggregate amount required to be paid in lieu of
</FONT>

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<DIV align="left">
<FONT size="2">fractional interests of DHI Common Stock pursuant
to <I>Section&nbsp;2.2.5</I> (such cash and shares of DHI Common
Stock, together with any dividends or distributions with respect
thereto with a record date after the Effective Time and the cash
referred to in clause&nbsp;(iii)&nbsp;of this
<I>Section&nbsp;2.2.1</I> being hereinafter referred to as the
<I>&#147;Exchange Fund&#148;</I>) in exchange for outstanding
Company Shares. Until they are distributed, the shares of DHI
Common Stock held by the Exchange Agent shall be deemed to be
outstanding, but the Exchange Agent shall not vote such shares
or exercise any rights of a stockholder with regard to them.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
Procedures.</I> (a)&nbsp;After the Effective Time,
Certificate(s) which immediately prior to the Effective Time
represented outstanding Company Shares delivered by each holder
of record whose shares were converted into the right to receive
the Merger Consideration and who effectively made, or who did
not revoke or lose, a Base Election, Cash Election or Stock
Election, shall be deemed surrendered, and the holder of record
thereof shall be entitled to receive, in exchange for the
Certificate(s) delivered with such election, a certificate
representing that number of whole shares of DHI Common Stock, if
any, and cash, if any, which such Holder has the right to
receive pursuant to the provisions of <I>Sections&nbsp;2.1</I>
and <I>2.2.</I> The Certificate(s) so surrendered shall
forthwith be canceled.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of
record of Certificate(s) whose shares were converted into the
right to receive the Merger Consideration but who did not
effectively make, or who revoked or lost, a Base Election, Cash
Election or Stock Election, (i)&nbsp;a letter of transmittal and
(ii)&nbsp;instructions for use in effecting the surrender of the
Certificate(s) in exchange for the Base Consideration. Upon
surrender of such Certificate(s) for cancellation to the
Exchange Agent, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required
by the Exchange Agent, the holder of such Certificate(s) shall
be entitled to receive in exchange therefor a certificate
representing that number of whole shares of DHI Common Stock and
cash which such holder has the right to receive pursuant to the
provisions of <I>Sections&nbsp;2.1</I> and <I>2.2,</I> and the
Certificate(s) so surrendered shall forthwith be canceled.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;If any cash or any certificate
representing DHI Shares is to be paid to or issued in a name
other than that in which a Certificate surrendered in exchange
therefor is registered, a certificate representing the proper
number of shares of DHI Common Stock may be issued to a person
other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay to the Exchange Agent
any transfer or other Taxes required by reason of the payment of
cash or the issuance of shares of DHI Common Stock to a person
other than the registered holder of such Certificate or
establish to the satisfaction of the Exchange Agent that such
Tax has been paid or is not applicable. Until surrendered as
contemplated by this <I>Section&nbsp;2.2,</I> each Certificate
shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the
cash, the certificate representing shares of DHI Common Stock or
cash in lieu of any fractional shares of DHI Common Stock, as
applicable, as contemplated by this <I>Section&nbsp;2.2.</I> No
interest will be paid or will accrue on any cash so payable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Distributions
with Respect to Unexchanged Shares.</I> No dividends or other
distributions declared or made with respect to DHI Common Stock
with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the DHI
Common Stock represented thereby by reason of the conversion of
shares of Company Common Stock pursuant to
<I>Section&nbsp;2.1.3</I> and no cash shall be paid to any such
holder until such Certificate is surrendered or deemed
surrendered in accordance with this ARTICLE&nbsp;2. Subject to
the effect of applicable laws, following surrender of any such
Certificate, there shall be paid, without interest, to the
person in whose name the shares of DHI Common Stock representing
such securities are registered (i)&nbsp;at the time of such
surrender, the amount of any cash payable to which such holder
is entitled pursuant to this <I>Section&nbsp;2.2</I> and
(ii)&nbsp;at the appropriate payment date or as promptly as
practicable thereafter, the proportionate amount of dividends or
other distributions, with (x)&nbsp;a record date with respect
thereto after the Effective Time, but prior to such surrender,
and (y)&nbsp;a payment date subsequent to such surrender,
payable with respect to such shares of DHI Common Stock. If any
holder of converted Company Shares shall be unable to surrender
such holder&#146;s Certificates because such Certificates shall
have been lost or destroyed, such holder may deliver in lieu
thereof an affidavit and indemnity bond in form and substance
and with surety reasonably satisfactory to DHI.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No Further
Ownership Rights in Company Shares.</I> All shares of DHI Common
Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this ARTICLE&nbsp;2 (including any
cash paid pursuant to <I>Sections&nbsp;2.2.3</I>) shall be
deemed to have been issued and paid in full satisfaction of all
rights pertaining to the Company Shares theretofore represented
by such Certificates. If, after the Effective Time, Certificates
are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided
in this ARTICLE&nbsp;2, except as otherwise provided by law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Fractional Shares.</I> No certificates or scrip representing
fractional shares of DHI Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to
any rights of a stockholder of DHI. Notwithstanding any other
provision of this Agreement, each holder of Company Shares
exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of DHI Common Stock
(after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest)
in an amount equal to such fractional part of a share of DHI
Common Stock multiplied by the per share closing price of DHI
Common Stock as reported for NYSE Composite Transactions on the
Closing Date. The parties acknowledge that payment of the cash
consideration in lieu of issuing fractional shares was not
separately bargained for consideration but merely represents a
mechanical rounding off for purposes of simplifying the
corporate and accounting complexities which would otherwise be
caused by the issuance of fractional shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination
of Exchange Fund.</I> Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to DHI, upon
demand, and any holders of the Certificates who have not
theretofore complied with this ARTICLE&nbsp;2 shall thereafter
look only to DHI for payment of cash and DHI Common Stock, any
cash in lieu of fractional shares of DHI Common Stock and any
dividends or distributions with respect to DHI Common Stock, all
without interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Liability.</I> To the fullest extent permitted by applicable
law, none of DHI, the Company or the Exchange Agent shall be
liable to any person in respect of any shares of DHI Common
Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered
prior to the end of the applicable period after the Effective
Time under escheat laws (or immediately prior to such earlier
date on which any Merger Consideration or any dividends or
distributions with respect to DHI Common Stock in respect of
such Certificates would otherwise escheat to or become the
property of any governmental entity), any such shares, cash,
dividends or distributions in respect of such Certificates
shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Investment
of Exchange Fund.</I> The Exchange Agent shall invest any cash
included in the Exchange Fund on a daily basis as directed by
DHI. Any interest and other income resulting from such
investments shall be paid to DHI.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transfer
Taxes.</I> DHI and the Company shall cooperate in the
preparation, execution and filing of all returns, applications
or other documents regarding any real property transfer, stamp,
recording, documentary or other taxes and any other fees and
similar taxes which become payable in connection with the Merger
other than transfer or stamp taxes payable in respect of
transfers pursuant to <I>Section&nbsp;2.2.2(c)</I>
(collectively, <I>&#147;Transfer Taxes&#148;</I>). From and
after the Effective Time, DHI shall pay or cause to be paid,
without deduction or withholding from any amounts payable to the
holders of Company Shares, all Transfer Taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Return of
Merger Consideration.</I> Any portion of the Merger
Consideration made available to the Exchange Agent to pay for
Dissenting Shares for which appraisal rights have been perfected
shall be returned to DHI promptly on demand.
</FONT>

<P align="center"><FONT size="2">I-9
</FONT>

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<DIV align="left"><A NAME="100"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;3
</FONT>

<P align="center">
<FONT size="2">REPRESENTATIONS AND WARRANTIES OF THE COMPANY
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company hereby represents and warrants to DHI
that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by the Company to DHI
that is arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this ARTICLE&nbsp;3 (the
<I>&#147;Company Disclosure Schedule&#148;</I>):
</FONT>

<P align="left">
<FONT size="2">3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Organization,
Existence and Good Standing of the Company.</I> The Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company
has all necessary corporate power and authority to own its
properties and assets and to carry on its business as presently
conducted. The Company is qualified to do business and is in
good standing in each jurisdiction where the nature or character
of the property owned, leased or operated by it or the nature of
the business transacted by it makes such qualification
necessary, except where the failure to be so qualified or be in
good standing would not have a Company Material Adverse Effect.
The Company has delivered to DHI a complete and correct copy of
its Certificate of Incorporation and Bylaws as amended to the
date hereof. As used in this ARTICLE&nbsp;3, the term
<I>&#147;Company&#148;</I> includes Schuler Residential, Inc.
(formerly known as Schuler Homes, Inc.<B>)</B> as to any period
prior to the merger of such person into the Company on
June&nbsp;21, 2001, including without limitation the period from
April&nbsp;3, 2001 to June&nbsp;21, 2001 during which such
person was a subsidiary of the Company, but does not include
Schuler Residential, Inc. as a separate entity from and after
the effective time of such merger, including without limitation
the date hereof and the Closing Date.
</FONT>

<P align="left">
<FONT size="2">3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Organization,
Existence and Good Standing of Company Subsidiaries.</I> The
Company&#146;s Annual Report on Form&nbsp;10-K for the fiscal
year ended March&nbsp;31, 2001 and <I>Section&nbsp;3.2</I> of
the Company Disclosure Schedule set forth lists of all
subsidiaries of the Company (a <I>&#147;Company
Subsidiary&#148;</I>), the jurisdiction of incorporation or
organization, as applicable, of each Company Subsidiary, the
type of each Company Subsidiary, the percentage of the
Company&#146;s and Company Subsidiaries&#146; ownership of the
outstanding voting stock of each such corporate Company
Subsidiary, the authorized and outstanding capital stock of each
such corporate Company Subsidiary, and the type and percentage
of the Company&#146;s and Company Subsidiaries&#146; ownership
interest in each other Company Subsidiary. Each Company
Subsidiary is a corporation, business trust, general or limited
partnership or limited liability company (as so specified) duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, as
applicable. Each Company Subsidiary has all necessary entity
power and authority to own its properties and assets and to
carry on its business as presently conducted. Each Company
Subsidiary is qualified to do business and is in good standing
in each jurisdiction where the nature or character of the
property owned, leased or operated by it or the nature of the
business transacted by it makes such qualification necessary,
except where the failure to be so qualified or be in good
standing would not have a Company Material Adverse Effect.
Except for the Company Subsidiaries, the Company does not,
directly or indirectly, own any equity interest in any other
corporation, association, partnership, joint venture, business
organization or limited liability company or other entity, with
respect to which interest the Company or any Company Subsidiary
has invested or is required to invest $100,000 or more,
excluding securities in any publicly traded company held for
investment and comprising less than five percent of the
outstanding voting securities of such company.
</FONT>

<P align="left">
<FONT size="2">3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalization.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalization
of Company and Company Subsidiaries.</I> The authorized capital
stock of the Company consists solely of 170,000,000&nbsp;shares
of Company Common Stock, of which 120,000,000&nbsp;shares are
designated Class&nbsp;A Common Stock and 50,000,000&nbsp;shares
are designated Class&nbsp;B Common Stock, and
1,000,000&nbsp;shares of preferred stock, $.001&nbsp;par value
per share. As of the date hereof:
(i)&nbsp;21,910,444&nbsp;shares of Class&nbsp;A Common Stock are
issued and outstanding, 18,754,727&nbsp;shares of Class&nbsp;B
Common Stock are issued and outstanding and
1,299,700&nbsp;shares of Class&nbsp;A Common Stock and no shares
of Class&nbsp;B Common Stock are held in treasury, and no shares
of preferred stock are issued and outstanding;
(ii)&nbsp;1,449,333&nbsp;shares of Class&nbsp;A Common Stock are
reserved for future issuance pursuant to outstanding
</FONT>

<P align="center"><FONT size="2">I-10
</FONT>

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<DIV align="left">
<FONT size="2">Company Stock Options; and (iii)&nbsp;up to
340,559&nbsp;shares of Class&nbsp;A Common Stock have been
reserved for purchase pursuant to the Company Stock Purchase
Plan, in respect of which $105,042.91 in compensation deductions
are outstanding. All of the outstanding shares of Company Common
Stock, and all shares of Company Common Stock which may be
issued prior to the Effective Time upon exercise of any option
or other right will be, validly issued, fully paid and
nonassessable and free of preemptive rights. Except as set forth
above, as of the date hereof there are outstanding no shares of
capital stock or other voting securities of the Company and no
equity equivalent interests in the ownership or earnings of the
Company or the Company Subsidiaries. All of the outstanding
shares of capital stock, or other ownership interest, of each
Company Subsidiary are validly issued, fully paid and
nonassessable, and are owned by the Company or another Company
Subsidiary free and clear of all security interests, liens,
claims, pledges, charges or other encumbrances of any nature
whatsoever.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Obligations
to Issue Capital Stock of Company or Company Subsidiaries.</I>
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I><FONT size="2">Section&nbsp;3.3.2</FONT></I><FONT size="2">
	of the Company Disclosure Schedule sets forth a true and
	complete list of all outstanding rights to purchase Company
	Common Stock, the name of each holder thereof, the number of
	shares purchasable thereunder and the per share exercise or
	purchase price of each right. There are no securities of the
	Company or any Company Subsidiary convertible or exchangeable
	for shares of capital stock or voting securities of the Company
	or any Company Subsidiary; and, except as set forth in
	<I>Section&nbsp;3.3.2</I> of the Company Disclosure Schedule,
	there are no options, warrants or other similar rights,
	agreements, arrangements or commitments of any character
	obligating the Company or any Company Subsidiary to issue or
	sell any shares of capital stock of, or other equity interests
	in, the Company or any Company Subsidiary, other than pursuant
	to Section&nbsp;9.6 of the Reorganization Agreement, which
	rights will be terminated prior to the Effective Time. There are
	no obligations, contingent or otherwise, of the Company or any
	Company Subsidiary to repurchase, redeem or otherwise acquire
	any shares of Company Common Stock or the capital stock or other
	equity interest of any Company Subsidiary or to make any
	investment (in the form of a loan, capital contribution or
	otherwise) in any Company Subsidiary.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Authority
Relative to this Agreement; Recommendation.</I> The Company has
all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated (other than the
adoption and approval of this Agreement by the holders of a
majority of the outstanding shares of the Class&nbsp;A Common
Stock voting as a class, by the holders of a majority of the
outstanding shares of the Class&nbsp;B Common Stock voting as a
class, and by the holders of a majority of the outstanding
shares of the Company Common Stock entitled to vote in
accordance with the Delaware Law and the Company&#146;s
Certificate of Incorporation and Bylaws). This Agreement has
been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by DHI,
constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
The Company Board has, at a meeting duly called and held at
which all directors of the Company were present, duly and
unanimously adopted resolutions (i)&nbsp;approving and declaring
the advisability of this Agreement and the Merger in accordance
with the Delaware Law and the Company&#146;s certificate of
incorporation and by-laws, (ii)&nbsp;determining that this
Agreement and the Merger are fair to and in the best interests
of the stockholders of the Company, (iii)&nbsp;determining that
the consideration to be paid in the Merger is fair to and in the
best interests of the stockholders of the Company and
(iv)&nbsp;recommending that the stockholders of the Company
adopt and approve this Agreement; which resolutions have not
been subsequently rescinded, modified or withdrawn in
any&nbsp;way.
</FONT>

<P align="left">
<FONT size="2">3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company
Material Contracts.</I> The Company&#146;s Annual Report on
Form&nbsp;10-K for the fiscal year ended March&nbsp;31, 2001 and
Quarterly Report on Form&nbsp;10-Q for the period ended
June&nbsp;30, 2001 set forth a list of all agreements to which
the Company or any Company Subsidiary is a party or by which any
of them is bound which, as of the date hereof: (i)&nbsp;are
required to be filed as &#147;material contracts&#148; with the
</FONT>

<P align="center"><FONT size="2">I-11
</FONT>

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<DIV align="left">
<FONT size="2">Securities and Exchange Commission (the
<I>&#147;SEC&#148;</I>) pursuant to the requirements of the
Securities Exchange Act of 1934, as amended (the
<I>&#147;Exchange Act&#148;</I>); (ii)&nbsp;under which the
consequences of a default, nonrenewal or termination would have
a Company Material Adverse Effect; or (iii)&nbsp;pursuant to
which payments might be required or acceleration of benefits may
be required upon a &#147;change of control&#148; of the Company,
or upon execution of this Agreement by the Company or the
performance by the Company of its obligations hereunder
(collectively, the <I>&#147;Material Contracts&#148;</I>).
</FONT>
</DIV>

<P align="left">
<FONT size="2">3.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Conflict.</I> The execution and delivery of this Agreement by
the Company does not, and the performance of this Agreement by
the Company will not, (i)&nbsp;conflict with or violate the
Certificate of Incorporation or Bylaws of the Company,
(ii)&nbsp;conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to the Company or any
Company Subsidiary or by which its or any of their respective
properties is bound or affected, or (iii)&nbsp;result in any
breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or
impair the rights of the Company or any Company Subsidiary or
alter the rights or obligations of any third party under, or
give to others any rights of termination, amendment,
acceleration, purchase or cancellation, or result in the
creation of a lien or encumbrance on any of the properties or
assets of the Company or any Company Subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which the Company or any Company Subsidiary is a party or by
which the Company or any Company Subsidiary or any of their
respective properties is bound or affected, except in any such
case for any such conflicts, violations, breaches, defaults or
other occurrences that would not have a Company Material Adverse
Effect.
</FONT>

<P align="left">
<FONT size="2">3.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Required
Filings and Consents.</I> The execution and delivery of this
Agreement by the Company do not, and the performance of this
Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority,
domestic or foreign, federal, state or local
(<I>&#147;Governmental Entity&#148;</I>), except (i)&nbsp;for
applicable requirements, if any, of the Securities Act of 1933,
as amended (the <I>&#147;Securities Act&#148;</I>), the Exchange
Act, state securities laws <I>(&#147;Blue Sky Laws&#148;</I>),
any pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(<I>&#147;HSR Act&#148;</I>), and the filing and recordation of
appropriate merger or other documents as required by the
Delaware Law, and (ii)&nbsp;where the failure to obtain such
consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay
consummation of the Merger, or otherwise prevent or delay the
Company from performing its obligations under this Agreement, or
would not otherwise have a Company Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance.</I>
Neither the Company nor any Company Subsidiary is in conflict
with, or in default or violation of, (i)&nbsp;any law, rule,
regulation, order, judgment or decree applicable to the Company
or any Company Subsidiary or by which its or any of their
respective properties is bound or affected or (ii)&nbsp;any
note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation,
except for any such conflicts, defaults or violations which
would not individually or in the aggregate have a Company
Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Permits.</I>
The Company and each Company Subsidiary hold all permits,
licenses, easements, variances, exemptions, consents,
certificates, orders and approvals from Governmental Entities
necessary for the operation of the business of the Company and
the Company Subsidiaries as it is now being conducted
(collectively, the <I>&#147;Company Permits&#148;</I>), except
where the failure to hold such Company Permits would not have a
Company Material Adverse Effect. The Company and the Company
Subsidiaries are in compliance with the terms of the Company
Permits, except where the failure to so comply would not have a
Company Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SEC
Filings.</I> The Company has filed all forms, reports and
documents required to be filed by it with the SEC. The Company
has made available to DHI (i)&nbsp;its Annual Reports on
Form&nbsp;10-K for the fiscal years ended December&nbsp;31, 1999
and March&nbsp;31, 2001, (ii)&nbsp;its Quarterly and Transition
Reports on Form&nbsp;10-Q for the periods ended
September&nbsp;30, 2000, December&nbsp;31, 2000 and
June&nbsp;30, 2001, (iii)&nbsp;all proxy statements relating to
the Company&#146;s meetings of stockholders (whether annual or
special) held
</FONT>

<P align="center"><FONT size="2">I-12
</FONT>

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<DIV align="left">
<FONT size="2">since April&nbsp;1, 2000, (iv)&nbsp;all other
reports or registration statements (other than Reports on
Form&nbsp;10-Q not referred to in clause&nbsp;(ii)&nbsp;above)
filed by the Company with the SEC since April&nbsp;1, 2000, and
(v)&nbsp;all amendments and supplements to all such reports and
registration statements filed by the Company with the SEC since
April&nbsp;1, 2000 (collectively, the <I>&#147;Company SEC
Reports&#148;</I>). The Company SEC Reports (i)&nbsp;were
prepared in all material respects in accordance with the
requirements of the Securities Act or the Exchange Act, as the
case may be, and (ii)&nbsp;did not at the time they were filed
(or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company
Subsidiaries is required to file any forms, reports or other
documents with the SEC.
</FONT>
</DIV>

<P align="left">
<FONT size="2">3.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Statements.</I> Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained
in the Company SEC Reports was prepared in accordance with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be
indicated in the notes thereto), and each fairly presents in all
material respects the consolidated financial position of the
Company and its consolidated subsidiaries as at the respective
dates thereof and the consolidated statements of income and cash
flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and
recurring year-end adjustments. The Company is in full
compliance with Section&nbsp;13(b)(2) of the Exchange Act.
</FONT>

<P align="left">
<FONT size="2">3.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Certain Changes or Events.</I> Except as set forth in the
Company SEC Reports, since March&nbsp;31, 2001, there has not
occurred: (i)&nbsp;any Company Material Adverse Effect or any
event, change or effect which could reasonably be expected to
have a Company Material Adverse Effect; (ii)&nbsp;any amendments
or changes in the Certificate of Incorporation or Bylaws of the
Company; (iii)&nbsp;any damage to, destruction or loss of any
asset of the Company or any Company Subsidiary (whether or not
covered by insurance) that would have a Company Material Adverse
Effect; (iv)&nbsp;any material change by the Company in its
accounting methods, principles or practices; (v)&nbsp;any
material revaluation by the Company of any of its assets,
including, without limitation, writing off or writing down notes
or accounts receivable or inventory other than in the ordinary
course of business; or (vi)&nbsp;any action or event that would
have required the consent of DHI pursuant to
<I>Section&nbsp;5.1</I> had such action or event occurred after
the date of this Agreement.
</FONT>

<P align="left">
<FONT size="2">3.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Undisclosed Liabilities.</I> Neither the Company nor any Company
Subsidiary has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a)&nbsp;in the aggregate
adequately provided for in the Company&#146;s unaudited balance
sheet (including any related notes thereto) as of June&nbsp;30,
2001 (the <I>&#147;2001 Company Balance Sheet&#148;</I>),
(b)&nbsp;incurred in the ordinary course of business before the
date of the 2001 Company Balance Sheet and not required under
generally accepted accounting principles to be reflected on the
2001 Company Balance Sheet, (c)&nbsp;disclosed in the Company
SEC Reports, or (d)&nbsp;incurred since June&nbsp;30, 2001 in
the ordinary course of business consistent with past practice or
in connection with this Agreement, that would not, individually
or in the aggregate, have a Company Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Litigation.</I> Except as set forth in the Company SEC Reports,
there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary or any
properties or rights of the Company or any Company Subsidiary
before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, that would be
required to be disclosed in an Annual Report on Form&nbsp;10-K
or that could reasonably be expected to prevent or delay
consummation of the Merger, or otherwise prevent or delay the
Company from performing its obligations under this Agreement.
None of the claims, actions, suits, proceedings and
investigations so set forth could reasonably be expected to have
a Company Material Adverse Effect. There are no pending or
threatened claims asserting any rights to indemnification under
the Agreement and Plan of Reorganization, dated as of
September&nbsp;12, 2000 (the <I>&#147;Reorganization
Agreement&#148;</I>), by and among the Company, Apollo Real
Estate Investment Fund, L.P., Blackacre WPH, LLC, Highridge
Pacific Housing Investors, L.P., AP&nbsp;WP&nbsp;Partners, L.P.,
AP Western GP Corporation,
</FONT>

<P align="center"><FONT size="2">I-13
</FONT>

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<DIV align="left">
<FONT size="2">AP&nbsp;LHI, Inc. and LAMCO Housing, Inc., and,
to the knowledge of the Company, no reasonable basis exists for
any such claim.
</FONT>
</DIV>

<P align="left">
<FONT size="2">3.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Benefit Plans.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company
Employee Plans. Section&nbsp;3.15.1</I> of the Company
Disclosure Schedule lists all employee pension plans (as defined
in Section&nbsp;3(2) of the Employee Retirement Income Security
Act of 1974, as amended <I>(&#147;ERISA&#148;)</I>), all
employee welfare plans (as defined in Section&nbsp;3(1) of
ERISA) and all other bonus, stock option, stock purchase,
performance share, stock appreciation or other equity based
compensation, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee
benefit plans, programs or arrangements, and any employment,
executive compensation, consulting or severance agreements,
performance pay, loan or loan guarantee, plant closing, change
of control or other non-ERISA plans, written or otherwise, for
the benefit of, or relating to, any current or former employee
or director of or consultant to the Company, any trade or
business (whether or not incorporated) which is or was a member
of a controlled group including the Company or which is under
common control with the Company (a <I>&#147;Company ERISA
Affiliate&#148;</I>) within the meaning of Section&nbsp;414 of
the Code, or any Company Subsidiary, that the Company, any
Company Subsidiary or any Company ERISA Affiliate maintains or
pursuant to which has any obligation, as well as each plan with
respect to which the Company, any Company Subsidiary or a
Company ERISA Affiliate could incur liability under
Section&nbsp;4069 (if such plan has been or were terminated) or
Section&nbsp;4212 of ERISA (collectively the <I>&#147;Company
Employee Plans&#148;</I>). There have been made available to DHI
copies of (i)&nbsp;each such written Company Employee Plan
(other than those referred to in Section&nbsp;4(b)(4) of ERISA),
(ii)&nbsp;the most recent annual report on Form&nbsp;5500
series, with accompanying schedules and attachments, filed with
respect to each Company Employee Plan required to make such a
filing, and (iii)&nbsp;the most recent actuarial valuation for
each Company Employee Plan subject to Title&nbsp;IV of ERISA.
The administrator of the Company Stock Plans has made the
determination of comparability pursuant to Article&nbsp;Two,
Section&nbsp;III.A(ii) of each Company Stock Plan necessary to
prevent the acceleration of exercisability and vesting of any
Company Stock Option as a result of the transactions
contemplated by this Agreement, except as provided in
<I>Section&nbsp;2.1.6.</I> The Plan Administrator of the Company
Stock Purchase Plan has made a determination that the
transactions contemplated by this Agreement shall constitute a
Change in Control for the purposes of the Company Stock Purchase
Plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Certain Events. </I>(i)&nbsp;None of the Company Employee Plans
provides retiree medical or other retiree welfare benefits to
any person (other than as required under COBRA), and none of the
Company Employee Plans is a &#147;multiemployer plan&#148; as
such term is defined in Section&nbsp;3(37) of ERISA;
(ii)&nbsp;there has been no non-exempt &#147;prohibited
transaction,&#148; as such term is defined in Section&nbsp;406
of ERISA and Section&nbsp;4975 of the Code, with respect to any
Company Employee Plan, which would result in a Company Material
Adverse Effect; (iii)&nbsp;all Company Employee Plans are in
compliance with the requirements prescribed by any and all
statutes (including ERISA and the Code), orders, or governmental
rules and regulations currently in effect with respect thereto
(including all applicable requirements for notification to
participants or the Department of Labor, the Pension Benefit
Guaranty Corporation (the <I>&#147;PBGC&#148;</I>), Internal
Revenue Service (the <I>&#147;IRS&#148;</I>) or Secretary of the
Treasury) except as would not individually or in the aggregate
result in a Company Material Adverse Effect, and the Company and
each Company Subsidiary have performed all obligations required
to be performed by them under, and are not in default under or
violation of any of the Company Employee Plans except as would
not individually or in the aggregate result in a Company
Material Adverse Effect; (iv)&nbsp;each Company Employee Plan
intended to qualify under Section&nbsp;401(a) of the Code and
each trust intended to qualify under Section&nbsp;501(a) of the
Code is so qualified and is the subject of a favorable
determination letter from the IRS; (v)&nbsp;all contributions
required to be made to any Company Employee Plan pursuant to
Section&nbsp;412 of the Code, or the terms of the Company
Employee Plan or any collective bargaining agreement, have been
made on or before their due dates; (vi)&nbsp;with respect to
each Company Employee Plan subject to Title IV of ERISA, no
&#147;reportable event&#148; within the meaning of
Section&nbsp;4043 of ERISA nor any event described in
Section&nbsp;4062, 4063 or 4041 of ERISA has occurred;
(vii)&nbsp;neither the Company nor any Company ERISA Affiliate
has incurred, nor reasonably expects to incur, any
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">liability under Title IV of ERISA (other than
liability for premium payments to the PBGC arising in the
ordinary course); (viii)&nbsp;except as provided by
Sections&nbsp;204(h), 4041(a)(2) or 104(b)(1) of ERISA, each
Company Employee Plan can be amended or terminated at any time
without approval from any person, without advance notice, and
without any liability other than for benefits accrued prior to
such amendment or termination; (ix)&nbsp;except as set forth in
<I>Section&nbsp;3.15.2</I> of the Company Disclosure Schedule,
all benefits due under each Employee Plan have been timely paid
and there is no material lawsuit or claim, other than routine
uncontested claims for benefits, pending, or to the knowledge of
the Company, any Company ERISA Affiliate or Company Subsidiary,
threatened, against any Company Employee Plan or the fiduciaries
of any such plan or otherwise involving or pertaining to any
such plan, and no basis exists for any such lawsuit or claim;
(x)&nbsp;except as set forth in <I>Section&nbsp;3.15.2</I> of
the Company Disclosure Schedule, no Company Employee Plan
provides for any severance pay, accelerated payments, deemed
satisfaction of goals or conditions, new or increased benefits,
forgiveness or modification of loans, or vesting conditioned in
whole or in part upon a change in control of the Company, any
Company ERISA Affiliate or Company Subsidiary, or any plant
closing; (xi)&nbsp;no agreement, commitment, or obligation
exists to increase any benefits under any Company Employee Plan
or to adopt any new Company Employee Plan; and (xii)&nbsp;no
Company Employee Plan has any unfunded accrued benefits that are
not fully reflected in the Company&#146;s financial statements.
</FONT>
</DIV>

<P align="left">
<FONT size="2">3.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Labor
Matters. </I>(i)&nbsp;There are no controversies pending or, to
the knowledge of the Company, threatened, between the Company or
any Company Subsidiary and any of their respective employees,
which controversies have had or could reasonably be expected to
have a Company Material Adverse Effect; (ii)&nbsp;neither the
Company nor any Company Subsidiary is a party to any material
collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Company
Subsidiary, nor does the Company know of any activities or
proceedings of any labor union to organize any such employees;
and (iii)&nbsp;the Company has no knowledge of any strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or
with respect to any employees of the Company or any Company
Subsidiary which could reasonably be expected to have a Company
Material Adverse Effect. To the knowledge of the Company, as of
the date hereof, no executive or management employee of the
Company or any of the Company Subsidiaries intends to terminate
his employment in connection with the Merger.
</FONT>

<P align="left">
<FONT size="2">3.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restrictions
on Business Activities. </I>Except for this Agreement, there is
no agreement, judgment, injunction, order or decree binding upon
the Company or any Company Subsidiary, or any affiliate thereof,
which has or would have the effect of prohibiting the conduct of
business by the Company or any Company Subsidiary as currently
conducted, except for any prohibitions as would not,
individually or in the aggregate, have a Company Material
Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Real
Property. </I>The Company and the Company Subsidiaries have good
and marketable (or indefeasible, in jurisdictions where the term
&#147;marketable&#148; is not customarily used in such a
context) title in fee simple to the real property purported to
be owned by them, and, upon the exercise of any options to
acquire real property optioned by the Company or any Company
Subsidiary, the Company or such Company Subsidiary will have
good and marketable (or indefeasible, in jurisdictions where the
term &#147;marketable&#148; is not customarily used in such a
context) title in fee simple to such optioned property, in each
case free and clear of all liens, charges and encumbrances,
except liens for Taxes not yet due and payable and such liens or
other encumbrances as do not or will not materially interfere
with the present use or intended use by the Company and the
Company Subsidiaries or materially affect the value of or the
ability to market to customers the property affected thereby and
that do not, individually or in the aggregate, have a Company
Material Adverse Effect. The Company and the Company
Subsidiaries hold valid policies of title insurance issued by
reputable title insurance companies on each parcel of real
property owned by them in amounts equal to the purchase price
paid by the Company or such Company Subsidiary at the time of
its acquisition thereof. Neither the Company nor any Company
Subsidiary has given, nor have they received, any notice or
information indicating that the facts set forth in any surveys
or title insurance policies are untrue or incorrect in any
material respect nor has the Company or the Company Subsidiaries
received any notice that a breach or an event of default exists,
and no condition or
</FONT>

<P align="center"><FONT size="2">I-15
</FONT>

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<DIV align="left">
<FONT size="2">event has occurred that with the giving of
notice, the lapse of time, or both would constitute a breach or
event of default, by the Company or any Company Subsidiary, or
to the knowledge of the Company, any other person with respect
to any material contracts, covenants, conditions and
restrictions, deeds, deeds of trust, rights-of-way, easements,
mortgages and other documents granting to the Company or any
Company Subsidiary title to or an interest in or otherwise
affecting the real property which is material to the operation
of the business of the Company and the Company Subsidiaries, as
presently conducted or intended to be conducted, except for such
breach or event of default that would not, individually or in
the aggregate, have a Company Material Adverse Effect. To the
knowledge of the Company, no condemnation, eminent domain, or
similar proceeding exists, is pending or threatened with respect
to, or that could affect, any real property owned or leased by
the Company or any Company Subsidiary that would reasonably be
expected to have a Company Material Adverse Effect. There is no
judgment, injunction, order, decree, statute, ordinance, rule,
regulation, moratorium, or other action by a Governmental
Entity, or to the knowledge of the Company, pending before or
being considered by a Governmental Entity, which has or would
have the effect of restricting the conduct of business by the
Company or any Company Subsidiary as currently conducted or
intended to be conducted by them, except for any restrictions as
would not, individually or in the aggregate, have a Company
Material Adverse Effect. No developer-related charges or
assessments for off-site improvements payable to any public
authority or any other person for public improvements are unpaid
(other than those reflected on the Company Balance Sheet or
incurred since the date of the Company Balance Sheet in the
ordinary course of the Company&#146;s business consistent with
past practices), except for charges or assessments as would not,
individually or in the aggregate, have a Company Material
Adverse Effect. To the knowledge of the Company, there is no
material impediment to obtaining any permits or governmental
approvals required to develop lots or construct homes on
undeveloped real property held by the Company or a Company
Subsidiary for such purpose (the <I>&#147;Company Development
Properties&#148;</I>), except for such as is not reasonably
likely to result in a Company Material Adverse Effect. The
Company Development Properties have access to public streets,
and are serviced (or will be serviced in accordance with
&#147;will serve letters&#148; issued by the appropriate utility
provider), in all material respects, by water, gas and
electricity and other services that may be necessary to
construct homes on such properties, and to the knowledge of the
Company such utilities and other services are or will be
adequate for the current and intended use of such property. All
material leases pursuant to which the Company or any Company
Subsidiary leases from others real or personal property are
valid and in full force and effect and no default or event of
default by the Company or the Company Subsidiaries has occurred
thereunder, except where the lack of such validity and
effectiveness or the existence of such defaults or event of
defaults would not, individually or in the aggregate, have a
Company Material Adverse Effect.
</FONT>
</DIV>

<P align="left">
<FONT size="2">3.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Taxes.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;For purposes of this Agreement,
<I>&#147;Tax&#148;</I> or <I>&#147;Taxes&#148;</I> shall mean
taxes, fees, levies, duties, tariffs, imposts, and governmental
impositions or charges of any kind, in the nature of taxes,
payable to any federal, state, local or foreign taxing
authority, including, without limitation, (i)&nbsp;income,
franchise, profits, gross receipts, ad valorem, net worth, value
added, sales, use, service, real or personal property, special
assessments, capital stock, license, payroll, withholding,
employment, social security, workers&#146; compensation,
unemployment compensation, utility, severance, production,
excise, stamp, occupation, premiums, windfall profits, transfer
and gains taxes, including interest, penalties, additional taxes
and additions to tax imposed with respect thereto, (ii)&nbsp;any
liability for payment of amounts described in
clause&nbsp;(i)&nbsp;whether as a result of transferee
liability, of being a member of an affiliated, consolidated,
combined or unitary group for any period, or otherwise through
operation of law, and (iii)&nbsp;any liability for the payment
of amounts described in clauses&nbsp;(i) or (ii)&nbsp;as a
result of any tax sharing, tax indemnity or tax allocation
agreement or any other express or implied agreement to indemnify
any other person. For purposes of this Agreement, <I>&#147;Tax
Returns&#148;</I> shall mean returns, reports, and information
statements with respect to Taxes required to be filed with the
IRS or any other taxing authority, domestic or foreign,
including, without limitation, consolidated, combined and
unitary tax returns.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Except as provided in
<I>Section&nbsp;3.19</I> of the Company Disclosure Schedule:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;The Company and the Company Subsidiaries
	have duly and timely (with due regard to valid extensions
	properly secured) filed all Tax Returns related to Federal
	income Taxes and all other material Tax Returns required to be
	filed by them prior to the date of this Agreement. All such Tax
	Returns are true, correct and complete in all material respects
	as filed (or as validly amended thereafter). Each of the Company
	and the Company Subsidiaries has timely (with due regard to
	valid extensions properly secured) paid in full all Taxes it is
	required to have paid, except to the extent of items which have
	been adequately reserved against in accordance with generally
	accepted accounting principles in the 2001 Company Balance Sheet
	included in the Company&#146;s June&nbsp;30, 2001
	Form&nbsp;10-Q. The liabilities and reserves for Taxes reflected
	in the 2001 Company Balance Sheet included in the Company&#146;s
	June&nbsp;30, 2001 Form&nbsp;10-Q cover all Taxes for all
	periods ended at or prior to the date of such balance sheet and
	have been determined in accordance with generally accepted
	accounting principles and all Taxes of the Company accrued
	following the end of the most recent period covered by the
	financial statements included in the Company&#146;s
	June&nbsp;30, 2001 Form&nbsp;10-Q have been accrued in the
	ordinary course of business of the Company and do not materially
	exceed comparable amounts incurred in similar periods in prior
	years (taking into account any changes in the Company&#146;s
	operating results).
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;The Company and the Company
	Subsidiaries have at all times complied in all material respects
	with applicable laws pertaining to Taxes, including, without
	limitation, all applicable laws relating to record retention.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;No Federal income Tax Return, or
	material state, local or foreign Tax Return of the Company or
	any Company Subsidiary is the subject of a pending audit or
	other administrative proceeding or court proceeding. Neither the
	Company nor any of the Company Subsidiaries is aware of any
	claim by any Tax jurisdiction that the Company or any Company
	Subsidiary has been required to file a Tax Return, but has
	failed to do so. Neither the Company nor any of the Company
	Subsidiaries has requested an extension of time to file any Tax
	Return not yet filed, nor has been granted any waiver of any
	statute of limitations with respect to, or any extension of a
	period for the assessment of, any Tax not yet paid. Neither the
	Company nor any Company Subsidiary has granted a power of
	attorney that will be outstanding on the Closing Date with
	respect to any material matter related to Taxes. In the past two
	years neither the Company nor any Company Subsidiary has entered
	into any closing agreement with respect to any Federal income
	Taxes or any other material Taxes that has the effect of
	materially increasing the liability for Taxes for any taxable
	year of the Company for which Tax Returns have not been filed.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;All Taxes that were required to be
	collected or withheld by the Company or any of the Company
	Subsidiaries have been duly collected or withheld, and all such
	Taxes that the Company or any of the Company Subsidiaries were
	required to remit to any taxing authority have been duly
	remitted, except where a failure to collect, withhold or remit
	Taxes does not have a material adverse effect on the Company or
	any of the Company Subsidiaries.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(v)&nbsp;Neither the Company nor any of the
	Company Subsidiaries is required to include in income any
	adjustment pursuant to Section&nbsp;481 or 263A of the Code (or
	similar provisions of other law or regulation) by reason of a
	change in accounting method, nor has the Company or any of the
	Company Subsidiaries received notice that the IRS (or other
	taxing authority) has proposed, or is considering, any such
	change in accounting method. The Company has not taken any
	action that is not in accordance with past practice that could
	defer a liability for Taxes of the Company from any taxable
	period ending on or before the Closing Date to any taxable
	period ending after such date.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vi)&nbsp;The Company has no foreign stockholders
	for whom shares of Company Common Stock are United States real
	property interests as defined in Section&nbsp;897 of the Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vii)&nbsp;Neither the Company nor any of the
	Company Subsidiaries has entered into any compensatory
	agreements with respect to the performance of services under
	which payment would,
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">I-17
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">separately or in the aggregate in connection with
	this Agreement or any change in control, result in a
	nondeductible expense to the Company or any of the Company
	Subsidiaries pursuant to Sections&nbsp;162(m) or 280G of the
	Code or an excise tax to the recipient of such payment pursuant
	to Section&nbsp;4999 of the Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(viii)&nbsp;There are no liens for Taxes (other
	than for current Taxes not yet due and payable or for other
	immaterial Taxes that are being contested in good faith) upon
	the assets of the Company or any Company Subsidiary.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ix)&nbsp;Neither the Company nor any Company
	Subsidiary is a party to or bound by any tax indemnity, tax
	sharing or tax allocation agreement (other than agreements
	solely between the Company and its direct or indirect
	wholly-owned subsidiaries or among direct or indirect
	wholly-owned subsidiaries of the Company). Neither the Company
	nor any Company Subsidiary has any liability for Taxes of any
	person (other than the Company and the Company Subsidiaries)
	under Treasury Regulations Section&nbsp;1.1502-6 (or any
	corresponding provision of state, local or foreign income Tax
	law), as transferee or successor, by contract or otherwise.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(x)&nbsp;Neither the Company nor any Company
	Subsidiary has been a &#147;distributing corporation&#148; or a
	&#147;controlled corporation&#148; in connection with a
	distribution described in Section&nbsp;355 of the Code within
	the past two&nbsp;years.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(xi)&nbsp;Neither the Company nor any Company
	Subsidiary has participated in or cooperated with an
	international boycott as that term is used in Section&nbsp;899
	of the Code.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(xii)&nbsp;The Company does not own directly any
	interests in any entities that are classified as partnerships
	for federal and state income Tax purposes.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">3.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Intellectual
Property. </I>The Company and the Company Subsidiaries own, or
are licensed or otherwise possess legally enforceable rights to
use, all patents, trademarks, trade names, service marks,
copyrights, and any applications therefor, technology, know-how,
computer software programs or applications, and tangible or
intangible proprietary information or material that are used in
the business of the Company and the Company Subsidiaries as
currently conducted, except as would not, individually or in the
aggregate, have a Company Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">3.21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Environmental
Matters. </I>Except for such matters that, individually or in
the aggregate, would not have a Company Material Adverse Effect:
(a)&nbsp;the Company and the Company Subsidiaries have all
environmental permits which are necessary to enable them to
conduct their businesses as they are currently being conducted
without violating any Environmental Law, and the Company and the
Company Subsidiaries have complied with all their environmental
permits and with all applicable Environmental Laws; (b)&nbsp;the
properties currently owned or operated by the Company or any
Company Subsidiary (including soils, groundwater, surface water,
buildings or other structures) do not contain and, to the
Company&#146;s knowledge, have not previously contained any
Hazardous Substances; (c)&nbsp;the properties formerly owned or
operated by the Company or any Company Subsidiary did not
contain any Hazardous Substances at any time during the period
of ownership or operation by the Company or the Company
Subsidiary; (d)&nbsp;neither the Company nor any Company
Subsidiary has disposed of any Hazardous Substance on any third
party property which could reasonably be expected to result in
any liability under Environmental Law; (e)&nbsp;neither the
Company nor any Company Subsidiary has released any Hazardous
Substance from any property owned or operated by any of them
which could reasonably be expected to result in any liability
under Environmental Law; (f)&nbsp;neither the Company nor any
Company Subsidiary has received any written notice, demand,
letter, claim or request for information alleging that the
Company or any Company Subsidiary may be in violation of or
liable under any Environmental Law; (g)&nbsp;neither the Company
nor any Company Subsidiary is a party to any orders, decrees,
injunctions or agreements with any Governmental Entity or is a
party to any indemnity or other agreement with any third party
which is expected to result in liability on the Company or any
Company Subsidiary under any Environmental Law; (h)&nbsp;there
are no circumstances, conditions or activities involving the
Company or any Company Subsidiary that could reasonably be
expected to result in any liability or costs to the Company or
any Company
</FONT>

<P align="center"><FONT size="2">I-18
</FONT>

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<DIV align="left">
<FONT size="2">Subsidiary or any restrictions on the ownership,
use or transfer of any property now owned by the Company or a
Company Subsidiary pursuant to any Environmental Law; and
(i)&nbsp;to the knowledge of the Company, none of the properties
now owned or operated by the Company or any Company Subsidiary
contains any underground storage tanks.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As used herein, <I>&#147;Environmental
Law&#148;</I> means any federal, state, local or foreign law,
regulation, rule, treaty, order, decree, permit, authorization,
or the common law or any requirement of any governmental
authority relating to: (A)&nbsp;the protection, investigation or
restoration of the environment, or natural resources;
(B)&nbsp;the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance; or
(C)&nbsp;noise, odor, wetlands, pollution, contamination or
injury or threat of injury to persons or property; and
<I>&#147;Hazardous Substance&#148;</I> means any substance that
is listed or regulated by any Environmental Law, including any
petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon.
</FONT>

<P align="left">
<FONT size="2">3.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interested
Party Transactions. </I>Except as set forth in
<I>Section&nbsp;3.22</I> of the Company Disclosure Schedule or
in the Company SEC Reports, since the date of the Company&#146;s
proxy statement dated July&nbsp;30, 2001, no event has occurred
that would be required to be reported as a Certain Relationship
or Related Transaction, pursuant to Item&nbsp;404 of
Regulation&nbsp;S-K promulgated by the SEC.
</FONT>

<P align="left">
<FONT size="2">3.23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Insurance.
</I>The Company maintains insurance with financially responsible
insurance companies in amounts customary in its industry to
insure it against risks and losses associated with the operation
of the business and properties of the Company and the Company
Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">3.24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Opinion of
Financial Advisors. </I>The Company Board has received the
opinion of the Company&#146;s financial advisors, UBS Warburg
LLC <I>(&#147;UBS Warburg&#148;</I>), to the effect that, as of
the date of this Agreement, the Merger Consideration is fair
from a financial point of view to the stockholders of the
Company, and the Company will deliver a copy of such written
opinion to DHI promptly after the date hereof.
</FONT>

<P align="left">
<FONT size="2">3.25&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Brokers.
</I>No broker, finder or investment banker (other than UBS
Warburg) is entitled to any brokerage, finder&#146;s or other
fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by
or on behalf of the Company.
</FONT>

<P align="left">
<FONT size="2">3.26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>State
Take-Over Statutes. </I>The action of the Company Board of
Directors in approving the Merger and this Agreement is
sufficient to render inapplicable to the Merger the provisions
of Section&nbsp;203 of the Delaware Law. No other state
take-over statute or similar statute or regulation applies, or
purports to apply, to the transactions contemplated hereby.
</FONT>

<P align="left">
<FONT size="2">3.27&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax
Treatment. </I>Neither the Company nor, to the knowledge of the
Company, any of its affiliates has taken or agreed to take any
action, nor to the knowledge of the Company is there any fact or
circumstance relating to the Company, that would prevent the
Merger from constituting a reorganization within the meaning of
Section&nbsp;368(a) of the Code.
</FONT>

<P align="left">
<FONT size="2">3.28&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Affiliates.
</I>Except for the directors and executive officers of the
Company, each of whom is listed in <I>Section&nbsp;3.28</I> of
the Company Disclosure Schedule and any other person or entity
listed in <I>Section&nbsp;3.28</I> of the Company Disclosure
Schedule, there are no persons or entities that may be deemed to
be affiliates of the Company under Rule&nbsp;145 of the
Securities Act <I>(&#147;Company Affiliates&#148;</I>).
</FONT>

<P align="left">
<FONT size="2">3.29&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Vote
Required. </I>At the Company Stockholder Meeting or any
adjournment or postponement thereof, the affirmative vote of the
holders of a majority of the votes cast by the holders of the
Class&nbsp;A Common Stock voting as a class, the Class&nbsp;B
Common Stock voting as a class, and the Company Common Stock
entitled to vote at the Company Stockholder Meeting are the only
votes of the holders of any class or series of capital stock of
the Company necessary to adopt this Agreement.
</FONT>

<P align="left">
<FONT size="2">3.30&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax
Treatment of Reorganization. </I>The Merger shall not negatively
affect the intended Tax treatment of the transactions effected
pursuant to the Reorganization Agreement or the applicability of
any rulings from any taxing authority with respect thereto.
</FONT>

<P align="center"><FONT size="2">I-19
</FONT>

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<DIV align="left"><A NAME="101"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;4
</FONT>

<P align="center">
<FONT size="2">REPRESENTATIONS AND WARRANTIES OF DHI
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DHI hereby represents and warrants to the Company
that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by DHI to the Company
that is arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this ARTICLE&nbsp;4 (the
<I>&#147;DHI Disclosure Schedule&#148;</I>):
</FONT>

<P align="left">
<FONT size="2">4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Organization,
Existence and Good Standing of DHI. </I>DHI is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. DHI has all necessary corporate
power and authority to own its properties and assets and to
carry on its business as presently conducted. DHI is qualified
to do business and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or
operated by it or the nature of the business transacted by it
makes such qualification necessary, except where the failure to
be so qualified or be in good standing would not have a DHI
Material Adverse Effect. DHI has delivered to the Company a
complete and correct copy of its Amended and Restated
Certificate of Incorporation and Bylaws as most recently
restated and subsequently amended to the date hereof.
</FONT>

<P align="left">
<FONT size="2">4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Organization,
Existence and Good Standing of the DHI Subsidiaries.
</I>DHI&#146;s Annual Report on Form&nbsp;10-K for the fiscal
year ended September&nbsp;30, 2000 and <I>Section&nbsp;4.2</I>
of the DHI Disclosure Schedule set forth as of the date hereof
lists of all subsidiaries of DHI (a <I>&#147;DHI
Subsidiary&#148;</I>), the jurisdiction of incorporation or
organization, as applicable, of each DHI Subsidiary, the type of
each DHI Subsidiary, the percentage of DHI&#146;s and the DHI
Subsidiaries&#146; ownership of the outstanding voting stock of
each such corporate DHI Subsidiary, the authorized and
outstanding capital stock of each such corporate DHI Subsidiary,
and the type and percentage of DHI&#146;s and the DHI
Subsidiaries&#146; ownership interest in each other DHI
Subsidiary. Each scheduled DHI Subsidiary is a corporation,
business trust, general or limited partnership or limited
liability company (as so specified) duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, as applicable. Each
scheduled DHI Subsidiary has all necessary entity power and
authority to own its properties and assets and to carry on its
business as presently conducted. Each scheduled DHI Subsidiary
is qualified to do business and is in good standing in each
jurisdiction where the nature or character of the property
owned, leased or operated by it or the nature of the business
transacted by it makes such qualification necessary, except
where the failure to be so qualified or be in good standing
would not have a DHI Material Adverse Effect. Except for the DHI
Subsidiaries, as of the date hereof DHI does not, directly or
indirectly, own any equity interest in any other corporation,
association, partnership, joint venture, business organization
or limited liability company or other entity, with respect to
which interest DHI or any DHI Subsidiary has invested or is
required to invest $100,000 or more, excluding securities in any
publicly traded company held for investment and comprising less
than five percent of the outstanding voting securities of such
company.
</FONT>

<P align="left">
<FONT size="2">4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalization
of DHI and the DHI Subsidiaries. </I>The authorized capital
stock of DHI consists solely of 200,000,000&nbsp;shares of the
DHI Common Stock and 30,000,000&nbsp;shares of preferred stock,
$.10&nbsp;par value per share <I>(&#147;DHI Preferred
Stock&#148;</I>). As of the date hereof:
(i)&nbsp;76,909,278&nbsp;shares of the DHI Common Stock are
issued and outstanding and no shares of the DHI Common Stock are
held in treasury, (ii)&nbsp;4,332,727&nbsp;shares of the DHI
Common Stock are reserved for future issuance pursuant to
outstanding stock options and (iii)&nbsp;no shares of the DHI
Preferred Stock are issued and outstanding. All of the
outstanding shares of the DHI Common Stock, and all shares of
the DHI Common Stock which may be issued prior to the Effective
Time upon exercise of any option or conversion right will be,
validly issued, fully paid and nonassessable and free of
preemptive rights. Except as set forth above, as of the date
hereof there are outstanding no shares of capital stock or other
voting securities of DHI and no equity equivalent interest in
the ownership or earnings of DHI or the DHI Subsidiaries. All of
the outstanding shares of capital stock, or other ownership
interest, of each DHI Subsidiary is validly issued, fully paid
and nonassessable, and is owned by DHI or another DHI
Subsidiary, free and clear of all security interests, liens,
claims, pledges, charges or other encumbrances of any nature
whatsoever.
</FONT>

<P align="center"><FONT size="2">I-20
</FONT>

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<P align="left">
<FONT size="2">4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Authority
Relative to this Agreement. </I>DHI has all necessary corporate
power and authority to execute and deliver this Agreement and to
perform its respective obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery
of this Agreement by DHI and the consummation by DHI of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other
corporate proceedings on the part of DHI are necessary to
authorize this Agreement or to consummate the transactions so
contemplated (other than the adoption and approval of this
Agreement by the holders of a majority of the outstanding shares
of the DHI Common Stock entitled to vote in accordance with the
Delaware Law and DHI&#146;s Amended and Restated Certificate of
Incorporation and Bylaws). This Agreement has been duly and
validly executed and delivered by DHI and, assuming the due
authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of DHI
enforceable against DHI in accordance with its terms. The Board
of Directors of DHI has, at a meeting duly called and held at
which all directors of the Company were present, duly and
unanimously adopted resolutions (i)&nbsp;approving and declaring
the advisability of this Agreement and the Merger in accordance
with the Delaware Law and the Company&#146;s certificate of
incorporation and by-laws, (ii)&nbsp;determining that this
Agreement and the Merger are in the best interests of the
stockholders of the Company, and (iii)&nbsp;recommending that
the stockholders of DHI adopt and approve this Agreement; which
resolutions have not been subsequently rescinded, modified or
withdrawn in any way.
</FONT>

<P align="left">
<FONT size="2">4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No Conflict.
</I>The execution and delivery of this Agreement by DHI does
not, and the performance of this Agreement by DHI will not,
(i)&nbsp;conflict with or violate the Amended and Restated
Certificate of Incorporation or Bylaws of DHI,
(ii)&nbsp;conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to DHI or any DHI
Subsidiary or by which its or any of their respective properties
is bound or affected, or (iii)&nbsp;result in any breach of or
constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair the rights
of DHI or any DHI Subsidiary or alter the rights or obligations
of any third party under, or give to others any rights of
termination, amendment, acceleration, purchase or cancellation
of, or result in the creation of a lien or encumbrance on any of
the properties or assets of DHI or any DHI Subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument required
to be filed as a &#147;material contract&#148; with the SEC
pursuant to the requirements of the Exchange Act to which DHI or
any DHI Subsidiary is a party or by which DHI or any DHI
Subsidiary or any of their respective properties is bound or
affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that would
not have a DHI Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Required
Filings and Consents. </I>The execution and delivery of this
Agreement by DHI do not, and the performance of this Agreement
by DHI will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except
(i)&nbsp;for applicable requirements, if any, of the Securities
Act, the Exchange Act, Blue Sky Laws, any pre-merger
notification requirements of the HSR Act, and the filing and
recordation of appropriate merger or other documents as required
by the Delaware Law, and (ii)&nbsp;where the failure to obtain
such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not prevent or delay
consummation of the Merger, or otherwise prevent or delay DHI
from performing its obligations under this Agreement, or would
not otherwise have a DHI Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compliance.
</I>Neither DHI nor any DHI Subsidiary is in conflict with, or
in default or violation of, (i)&nbsp;any law, rule, regulation,
order, judgment or decree applicable to DHI or any DHI
Subsidiary or by which its or any of their respective properties
is bound or affected or (ii)&nbsp;any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation, except in each case
for any such conflicts, defaults or violations which would not
individually or in the aggregate have a DHI Material Adverse
Effect.
</FONT>

<P align="left">
<FONT size="2">4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Permits.
</I>DHI and each DHI Subsidiary hold all permits, licenses,
easements, variances, exemptions, consents, certificates, orders
and approvals from Governmental Entities necessary for the
operation of the business of DHI and the DHI Subsidiaries as it
is now being conducted (collectively, the <I>&#147;DHI
Permits&#148;</I>), except where the failure to hold such DHI
Permits would not have a DHI Material Adverse Effect. DHI
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">and the DHI Subsidiaries are in compliance with
the terms of the DHI Permits, except where the failure to so
comply would not have a DHI Material Adverse Effect.
</FONT>
</DIV>

<P align="left">
<FONT size="2">4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>SEC Filings.
</I>DHI has filed all forms, reports and documents required to
be filed with the SEC. DHI has made available to Company
(i)&nbsp;its Annual Reports on Form&nbsp;10-K for the fiscal
years ended September&nbsp;30, 1999 and 2000, (ii)&nbsp;its
Quarterly Report on Form&nbsp;10-Q for the period ended
June&nbsp;30, 2001, (iii)&nbsp;its Proxy Statement, dated
December&nbsp;13, 2000, for its Annual Meeting of Stockholders,
(iv)&nbsp;all other reports or registration statements (other
than Reports on Form&nbsp;10-Q not referred to in
clause&nbsp;(ii) above) filed by DHI with the SEC since
October&nbsp;1, 1999, and (v)&nbsp;all amendments and
supplements to all such reports and registration statements
filed by DHI with the SEC since October&nbsp;1, 2000
(collectively, the <I>&#147;DHI SEC Reports&#148;</I>). The DHI
SEC Reports (i)&nbsp;were prepared in all material respects in
accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii)&nbsp;did not at the
time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such
filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
None of the DHI Subsidiaries is required to file any forms,
reports or other documents with the SEC.
</FONT>

<P align="left">
<FONT size="2">4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Statements.</I> Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained
in the DHI SEC Reports was prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in
the notes thereto), and each fairly presents in all material
respects the consolidated financial position of DHI and its
consolidated subsidiaries as at the respective dates thereof and
the consolidated statements of income and cash flows for the
periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments. DHI is in full compliance with
Section&nbsp;13(b)(2) of the Exchange Act.
</FONT>

<P align="left">
<FONT size="2">4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Certain Changes or Events.</I> Except as set forth in the DHI
SEC Reports, since October&nbsp;1, 2000, there has not occurred:
(i)&nbsp;any DHI Material Adverse Effect or any action, change
or effect which could reasonably be expected to have a DHI
Material Adverse Effect; (ii)&nbsp;any amendments or changes in
the Certificate of Incorporation or Bylaws of DHI (except as
permitted by <I>Section&nbsp;5.3</I>); (iii)&nbsp;any damage to,
destruction or loss of any asset of DHI or any DHI Subsidiary
(whether or not covered by insurance) that would have a DHI
Material Adverse Effect; (iv)&nbsp;any material change by DHI in
its accounting methods, principles or practices; (v)&nbsp;any
material revaluation by DHI of any of its assets, including,
without limitation, writing off or writing down notes or
accounts receivable or inventory other than in the ordinary
course of business; or (vi)&nbsp;any action or event that would
have required the consent of the Company pursuant to
<I>Section&nbsp;5.3</I> had such action or event occurred after
the date of this Agreement.
</FONT>

<P align="left">
<FONT size="2">4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Undisclosed Liabilities.</I> Neither DHI nor any DHI Subsidiary
has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a)&nbsp;in the aggregate
adequately provided for in DHI&#146;s unaudited balance sheet
(including any related notes thereto) as of June&nbsp;30, 2001
(the <I>&#147;2001 DHI Balance Sheet&#148;</I>),
(b)&nbsp;incurred in the ordinary course of business before the
date of the 2001 DHI Balance Sheet and not required under
generally accepted accounting principles to be reflected on the
2001 DHI Balance Sheet, (c)&nbsp;disclosed in the DHI SEC
Reports, or (d)&nbsp;incurred since June&nbsp;30, 2001, that
would not, individually or in the aggregate, have a DHI Material
Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Litigation.</I> Except as set forth in the DHI SEC Reports,
there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of DHI, threatened
against DHI or any DHI Subsidiary or any properties or rights of
DHI or any DHI Subsidiary before any court, arbitrator or
administrative, governmental or regulatory authority or body,
domestic or foreign, that would have a DHI Material Adverse
Effect or that could reasonably be expected to prevent or delay
consummation of the Merger, or otherwise prevent or delay DHI
from performing its obligations under this Agreement.
</FONT>

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</FONT>

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<P align="left">
<FONT size="2">4.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Benefit Plans.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>DHI
Employee Plans. Section&nbsp;4.14.1</I> of the DHI Disclosure
Schedule lists as of the date hereof all employee pension plans
(as defined in Section&nbsp;3(2) of ERISA, all employee welfare
plans (as defined in Section&nbsp;3(1) of ERISA) and all other
bonus, stock option, stock purchase, performance share, stock
appreciation or other equity based compensation, incentive,
deferred compensation, supplemental retirement, severance, loan
or loan guarantee, plant closing, change of control or other
non-ERISA plans and other similar fringe or employee benefit
plans, programs or arrangements for the benefit of employees
generally of DHI, any trade or business (whether or not
incorporated) which as of the date hereof is a member of a
controlled group including DHI or which is under common control
with DHI (a&nbsp;<I>&#147;DHI ERISA Affiliate&#148;</I>) within
the meaning of Section&nbsp;414 of the Code, or any DHI
Subsidiary, as well as each plan as of the date hereof with
respect to which DHI or a DHI ERISA Affiliate could incur
liability under Section&nbsp;4069 (if such plan has been or were
terminated) or Section&nbsp;4212 of ERISA (collectively the
<I>&#147;DHI Employee Plans&#148;</I>). There have been made
available to the Company copies of (i)&nbsp;each such written
DHI Employee Plan (other than those referred to in
Section&nbsp;4(b)(4) of ERISA), (ii)&nbsp;the most recent annual
report on Form 5500 series, with accompanying schedules and
attachments, filed with respect to each DHI Employee Plan
required to make such a filing, and (iii)&nbsp;the most recent
actuarial valuation for each DHI Employee Plan subject to
Title&nbsp;IV of ERISA.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.14.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Absence of
Certain Events.</I> (i)&nbsp;None of the DHI Employee Plans
provides retiree medical or other retiree welfare benefits to
any person (other than as required under COBRA), and none of the
DHI Employee Plans is a &#147;multiemployer plan&#148; as such
term is defined in Section&nbsp;3(37) of ERISA; (ii)&nbsp;there
has been no non-exempt &#147;prohibited transaction,&#148; as
such term is defined in Section&nbsp;406 of ERISA and
Section&nbsp;4975 of the Code, with respect to any DHI Employee
Plan, which would result in a DHI Material Adverse Effect;
(iii)&nbsp;all DHI Employee Plans are in compliance with the
requirements prescribed by any and all statutes (including ERISA
and the Code), orders or governmental rules and regulations
currently in effect with respect thereto (including all
applicable requirements for notification to participants or the
Department of Labor, the PBGC, IRS or Secretary of the Treasury)
except as would not individually or in the aggregate result in a
DHI Material Adverse Effect, and DHI and each DHI Subsidiary
have performed all obligations required to be performed by them
under, and are not in default under or violation of, any of the
DHI Employee Plans except as would not individually or in the
aggregate result in a DHI Material Adverse Effect;
(iv)&nbsp;each DHI Employee Plan intended to qualify under
Section&nbsp;401(a) of the Code and each trust intended to
qualify under Section&nbsp;501(a) of the Code is the subject of
a favorable determination letter from the IRS; (v)&nbsp;all
contributions required to be made to any DHI Employee Plan
pursuant to Section&nbsp;412 of the Code, or the terms of the
DHI Employee Plan or any collective bargaining agreement, have
been made on or before their due dates; (vi)&nbsp;with respect
to each DHI Employee Plan, no &#147;reportable event&#148;
within the meaning of Section&nbsp;4043 of ERISA nor any event
described in Section&nbsp;4062, 4063 or 4041 of ERISA has
occurred; and (vii)&nbsp;neither DHI nor any DHI ERISA Affiliate
has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA (other than liability for premium
payments to the PBGC arising in the ordinary course).
</FONT>

<P align="left">
<FONT size="2">4.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Labor
Matters.</I> Except as set forth in <I>Section&nbsp;4.15</I> of
the DHI Disclosure Schedule: (i)&nbsp;there are no controversies
pending or, to the knowledge of DHI, threatened, between DHI or
any DHI Subsidiary and any of their respective employees, which
controversies have had or could reasonably be expected to have a
DHI Material Adverse Effect; (ii)&nbsp;neither DHI nor any DHI
Subsidiary is a party to any material collective bargaining
agreement or other labor union contract applicable to persons
employed by DHI or any DHI Subsidiary, nor does DHI know of any
activities or proceedings of any labor union to organize any
such employees; and (iii)&nbsp;DHI has no knowledge of any
strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of DHI or any DHI
Subsidiary which could reasonably be expected to have a DHI
Material Adverse Effect.
</FONT>

<P align="left">
<FONT size="2">4.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Real
Property.</I> DHI and the DHI Subsidiaries have good and
marketable (or indefeasible, in jurisdictions where the term
&#147;marketable&#148; is not customarily used in such context)
title in fee simple, to the real property purported to be owned
by them, and, upon the exercise of any options to acquire real
property optioned by DHI or any DHI Subsidiary, DHI or such DHI
Subsidiary will have good and
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">marketable (or indefeasible, in jurisdictions
where the term &#147;marketable&#148; is not customarily used in
such a context) title in fee simple to such optioned property,
in each case free and clear of all liens, charges and
encumbrances, except liens for Taxes not yet due and payable and
such liens or other encumbrances as do not or will not
materially interfere with the present use or intended use by DHI
and the DHI Subsidiaries or materially affect the value of or
the ability to market to customers the property affected thereby
and that do not, individually or in the aggregate, have a DHI
Material Adverse Effect. DHI and the DHI Subsidiaries hold valid
policies of title insurance issued by reputable title insurance
companies on each parcel of real property owned by them in
amounts equal to the purchase price paid by DHI or such DHI
Subsidiary at the time of its acquisition thereof. Neither DHI
nor any DHI Subsidiary has given, nor have they received, any
notice or information indicating that the facts set forth in any
surveys or title insurance policies are untrue or incorrect in
any material respect nor has DHI or the DHI Subsidiaries
received any notice that a breach or an event of default exists,
and no condition or event has occurred that with the giving of
notice, the lapse of time, or both would constitute a breach or
event of default, by DHI or any DHI Subsidiary, or to the
knowledge of DHI, any other person with respect to any material
contracts, covenants, conditions and restrictions, deeds, deeds
of trust, rights-of-way, easements, mortgages and other
documents granting to DHI or any DHI Subsidiary title to or an
interest in or otherwise affecting the real property which is
material to the operation of the business of DHI and the DHI
Subsidiaries, as presently conducted or intended to be
conducted, except for such breach or event of default that would
not, individually or in the aggregate, have a DHI Material
Adverse Effect. To the knowledge of DHI, no condemnation,
eminent domain, or similar proceeding exists, is pending or
threatened with respect to, or that could affect, any real
property owned or leased by DHI or any DHI Subsidiary that would
reasonably be expected to have a DHI Material Adverse Effect.
There is no judgment, injunction, order, decree, statute,
ordinance, rule, regulation, moratorium, or other action by a
Governmental Entity, or to the knowledge of DHI, pending before
or being considered by a Governmental Entity, which has or would
have the effect of restricting the conduct of business by DHI or
any DHI Subsidiary as currently conducted or intended to be
conducted by them, except for any restrictions as would not,
individually or in the aggregate, have a DHI Material Adverse
Effect. No developer-related charges or assessments for off-site
improvements payable to any public authority or any other person
for public improvements are unpaid (other than those reflected
on the DHI Balance Sheet or incurred since the date of the DHI
Balance Sheet in the ordinary course of DHI&#146;s business
consistent with past practices), except for charges or
assessments as would not, individually or in the aggregate, have
a DHI Material Adverse Effect. To the knowledge of DHI, there is
no material impediment to obtaining any permits or governmental
approvals required to construct homes on undeveloped real
property held by DHI or a DHI Subsidiary for such purpose (the
<I>&#147;DHI Development Properties&#148;</I>), except for such
as is not reasonably likely to result in a DHI Material Adverse
Effect. The DHI Development Properties have access to public
streets, a nd are serviced (or will be serviced in accordance
with &#147;will serve letters&#148; issued by the appropriate
utility provider), in all material respects, by water, gas and
electricity and other services which may be necessary to
construct homes on such property, and to the knowledge of DHI
such utilities and other services are or will be adequate for
the current and intended use of such property. All material
leases pursuant to which DHI or any DHI Subsidiary leases from
others real or personal property are valid and in full force and
effect and no default or event of default by DHI or a DHI
Subsidiary has occurred thereunder, except where the lack of
such validity and effectiveness or the existence of such
defaults or event of defaults would not, individually or in the
aggregate, have a DHI Material Adverse Effect.
</FONT>
</DIV>

<P align="left">
<FONT size="2">4.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Taxes.</I>
DHI and the DHI Subsidiaries have duly and timely (with due
regard to valid extensions properly secured) filed all Tax
Returns related to Federal income Taxes and all other material
Tax Returns required to be filed by them prior to the date of
this Agreement. All such Tax Returns are true, correct and
complete in all material respects as filed (or as validly
amended thereafter). Each of DHI and the DHI Subsidiaries has
timely (with due regard to valid extensions properly secured)
paid in full all Taxes it is required to have paid, except to
the extent of items which have been adequately reserved against
in accordance with generally accepted accounting principles in
the balance sheet at June&nbsp;30, 2001, included in DHI&#146;s
June&nbsp;30, 2001 Form&nbsp;10-Q.
</FONT>

<P align="center"><FONT size="2">I-24
</FONT>

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<P align="left">
<FONT size="2">4.18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Environmental
Matters.</I> Except for such matters that, individually or in
the aggregate, would not have a DHI Material Adverse Effect:
(a)&nbsp;DHI and the DHI Subsidiaries have all environmental
permits which are necessary to enable them to conduct their
businesses as they are currently being conducted without
violating any Environmental Law, and DHI and the DHI
Subsidiaries have complied with all their environmental permits
and have complied with all applicable Environmental Laws;
(b)&nbsp;the properties currently owned or operated by DHI or
any DHI Subsidiary (including soils, groundwater, surface water,
buildings or other structures) do not contain and, to DHI&#146;s
knowledge, have not previously contained any Hazardous
Substances; (c)&nbsp;the properties formerly owned or operated
by DHI or any DHI Subsidiary did not contain any Hazardous
Substances at any time during the period of ownership or
operation by DHI or the DHI Subsidiary; (d)&nbsp;neither DHI nor
any DHI Subsidiary has disposed of any Hazardous Substance on
any third party property which could reasonably be expected to
result in any liability under any Environmental Law;
(e)&nbsp;neither DHI nor any DHI Subsidiary has released any
Hazardous Substance from any property owned or operated by any
of them which could reasonably be expected to result in any
liability under any Environmental Law; (f)&nbsp;neither DHI nor
any DHI Subsidiary has received any written notice, demand,
letter, claim or request for information alleging that DHI or
any DHI Subsidiary may be in violation of or liable under any
Environmental Law; (g)&nbsp;neither DHI nor any DHI Subsidiary
is a party to any orders, decrees, injunctions or agreements
with any Governmental Entity or is a party to any indemnity or
other agreement with any third party which is expected to result
in liability on DHI or any DHI Subsidiary under any
Environmental Law; (h)&nbsp;there are no circumstances,
conditions or activities involving DHI or any DHI Subsidiary
that could reasonably be expected to result in any liability or
costs to DHI or any DHI Subsidiary or any restrictions on the
ownership, use or transfer of any property now owned by DHI or a
DHI Subsidiary pursuant to any Environmental Law; and
(i)&nbsp;to the knowledge of DHI, none of the properties now
owned or operated by DHI or any DHI Subsidiary contains any
underground storage tanks.
</FONT>

<P align="left">
<FONT size="2">4.19&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Insurance.</I>
DHI maintains insurance with financially responsible insurance
companies in amounts customary in its industry to insure it
against risks and losses associated with the operation of the
business and properties of DHI and the DHI Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">4.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Brokers.</I>
No broker, finder, investment banker (other than Banc of America
Securities LLC <I>(&#147;BOA&#148;</I>)) is entitled to any
brokerage, finder&#146;s or other fee or commission in
connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of&nbsp;DHI.
</FONT>

<P align="left">
<FONT size="2">4.21&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>DHI Common
Stock.</I> On the Closing Date, DHI will have a sufficient
number of authorized but unissued or treasury shares of the DHI
Common Stock available for issuance to the holders of the
Company Shares and Company Stock Options and participants in the
Company Stock Purchase Plan in accordance with the provisions of
this Agreement. The DHI Common Stock to be issued pursuant to
this Agreement will, when so delivered, be (i)&nbsp;duly and
validly issued, fully paid and nonassessable, and
(ii)&nbsp;listed on the New York Stock Exchange
<I>(&#147;NYSE&#148;</I>), upon official notice of issuance.
</FONT>

<P align="left">
<FONT size="2">4.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sufficient
Funds.</I> At the Effective Time, DHI will have available to it
sufficient funds, whether from working capital or drawing from
its existing credit facilities, to pay the Merger Consideration
with respect to the cash component of the Merger Agreement and
to satisfy all debt obligations of the Company as a result of
the Merger, if any, including without limitation the obligations
of the Company to repurchase the Company&#146;s
(i)&nbsp;9%&nbsp;Senior Notes due 2008,
(ii)&nbsp;9&nbsp;3/8%&nbsp;Senior Notes due 2009 and
(iii)&nbsp;10&nbsp;1/2%&nbsp;Senior Subordinated Notes
due&nbsp;2011.
</FONT>

<P align="left">
<FONT size="2">4.23&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Opinion of
Financial Advisor.</I> The DHI Board has received the opinion of
DHI&#146;s financial advisors, BOA, to the effect that, as of
the date of this Agreement, the Merger Consideration is fair
from a financial point of view to DHI, and DHI will deliver a
copy of such written opinion to the Company promptly after the
date hereof.
</FONT>

<P align="left">
<FONT size="2">4.24&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax
Treatment.</I> Neither DHI nor, to the knowledge of DHI, any of
its affiliates has taken or agreed to take any action, nor to
the knowledge of DHI is there any fact or circumstance relating
to DHI, that would prevent the Merger from constituting a
reorganization within the meaning of Section&nbsp;368(a) of
the&nbsp;Code.
</FONT>

<P align="center"><FONT size="2">I-25
</FONT>

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<P align="center">
<FONT size="2">ARTICLE&nbsp;5
</FONT>

<P align="center">
<FONT size="2">CONDUCT OF BUSINESS PENDING THE MERGER
</FONT>

<P align="left">
<FONT size="2">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conduct of
Business by the Company Pending the Merger.</I> The Company
covenants and agrees that, during the period from the date of
this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, unless DHI
shall otherwise agree in writing, the Company shall conduct its
business and shall cause the businesses of the Company
Subsidiaries to be conducted only in, and the Company and the
Company Subsidiaries shall not take any action except in, the
ordinary course of business in the manner consistent with past
practice. The Company shall use reasonable commercial efforts to
preserve substantially intact the business organization of the
Company and the Company Subsidiaries, to keep available the
services of the present officers, employees and consultants of
the Company and the Company Subsidiaries and to preserve the
present relationships of the Company and the Company
Subsidiaries with customers, suppliers and other persons with
which the Company or any Company Subsidiary has significant
business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, neither the Company
nor any Company Subsidiary shall, during the period from the
date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, directly or
indirectly do any of the following without the prior written
consent of&nbsp;DHI:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;amend or otherwise change the
Certificate of Incorporation or Bylaws of the Company or the
organizational documents of any Company Subsidiary;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;issue, sell, pledge, dispose of or
encumber, or authorize the issuance, sale, pledge, disposition
or encumbrance of, any shares of capital stock of any class, or
any options, warrants, convertible securities or other rights of
any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom
interest) in the Company (except for the issuance of shares of
Company Common Stock pursuant to any previously granted Company
Stock Option or under the Company Stock Purchase Plan);
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;sell, pledge, dispose of or encumber any
assets of the Company or any Company Subsidiary, except for
(i)&nbsp;sales of assets in the ordinary course of business in a
manner consistent with past practice, (ii)&nbsp;disposition of
obsolete or worthless assets, (iii)&nbsp;sales of immaterial
assets not in excess of $250,000 individually, and
(iv)&nbsp;liens on assets to secure purchase money and
construction financings in the ordinary course of business
consistent with past practice or arising under the
Company&#146;s existing revolving and warehouse lines of credit
and other non-monetary encumbrances entered into in the ordinary
course of business consistent with past practice;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;(i)&nbsp;declare, set aside, make or pay
any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of any of its
capital stock, except that a wholly owned Company Subsidiary may
declare and pay a dividend or make advances to its parent or the
Company, (ii)&nbsp;split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or
(iii)&nbsp;amend the terms or change the period of
exercisability of, purchase, repurchase, redeem or otherwise
acquire, or permit any Company Subsidiary to purchase,
repurchase, redeem or otherwise acquire, any of its securities,
including, without limitation, shares of Company Common Stock or
any option, warrant or right, directly or indirectly, to acquire
shares of Company Common Stock, or propose to do any of the
foregoing;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;except as set forth in
<I>Section&nbsp;5.1(e)</I> of the Company Disclosure Schedule,
(i)&nbsp;acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof; (ii)&nbsp;incur any
indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse or otherwise as an accommodation
become responsible for, the obligations of any person, except
under existing lines of credit in the ordinary course of
business consistent with past practice, or make any loans or
advances (other than loans or advances to or from direct or
indirect wholly owned Company Subsidiaries or pursuant to
existing contracts or contracts for the acquisition or
development of land entered into in the ordinary course of
business consistent with past
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">practice), (iii)&nbsp;enter into or amend any
contract or agreement, other than in the ordinary course of
business consistent with past practice, that is or would be a
Material Contract or is otherwise material to the Company and
the Company Subsidiaries taken as a whole; or
(iv)&nbsp;authorize any capital expenditures or purchase of
fixed assets (other than the purchase of land in the ordinary
course of business consistent with past practice) which are, in
the aggregate, in excess of $100,000 individually or $1,000,000
in the aggregate;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;except as may be required by law,
increase the compensation payable or to become payable to its
officers or employees, grant any severance or termination pay
to, or enter into any employment or severance agreement with any
director, officer or other employee of the Company or any
Company Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors,
officers or employees, except increases in annual compensation
for employees in the ordinary course consistent with past
practice to the extent such compensation increases do not result
in a material increase in compensation expense to the Company;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(g)&nbsp;change accounting policies or procedures
(including, without limitation, procedures with respect to
revenue recognition, payments of accounts payable and collection
of accounts receivable);
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(h)&nbsp;except as provided in
<I>Section&nbsp;5.4,</I> make any material Tax election
inconsistent with past practice or settle or compromise any
material federal, state, local or foreign Tax liability or agree
to an extension of a statute of limitations with respect to any
material amount of Tax, except to the extent the amount of any
such settlement or compromise has been reserved for in the
financial statements contained in the Company SEC Reports filed
prior to the date hereof;&nbsp;and
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(i)&nbsp;take, or agree to take, any of the
actions described in <I>Sections&nbsp;5.1(a)</I> through
<I>(h)</I> above, or any action which would make any of the
representations or warranties of the Company contained in this
Agreement untrue or incorrect in any material respect as
contemplated hereby or prevent the Company from performing or
cause the Company not to perform in any material respect its
covenants hereunder.
</FONT>

<P align="left">
<FONT size="2">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Solicitation.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company shall, and shall cause the
Company Subsidiaries and its and their respective officers,
directors, employees, investment bankers, attorneys and other
representatives and agents to, immediately cease any discussions
or negotiations with any parties with respect to any Third Party
Acquisition. The Company shall not, nor shall the Company
authorize or permit any Company Subsidiary or any of its or
their respective officers, directors, employees, investment
bankers, attorneys and other representatives or agents to,
directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with or provide any
information to any person or group (other than DHI or any
designees of DHI) concerning, or take any other action designed
to facilitate any inquiries or the making of any proposal
concerning, any Third Party Acquisition; provided, however, that
(i)&nbsp;nothing herein shall prevent the Company Board from
complying with Rules&nbsp;14d-9 and 14e-2 promulgated under the
Exchange Act with regard to any tender offer or exchange offer;
and (ii)&nbsp;the Company may make inquiry of and participate in
discussions with any person or group who has submitted after the
date hereof an unsolicited and unencouraged Superior Proposal
if, and to the extent, the Company Board determines in its good
faith judgment, after consultation with and advice from outside
legal counsel, that it is necessary to do so in order to comply
with its fiduciary duties and, before making such inquiry or
participating in such discussions, it receives from such person
or group an executed confidentiality agreement with terms no
less favorable to the Company than those contained in the
Confidentiality Letter, which agreement does not provide for any
payments by the Company. The Company shall promptly (but no
later than 24&nbsp;hours after receipt) notify DHI in the event
it receives any proposal or inquiry concerning a Third Party
Acquisition, including the terms and conditions thereof and the
identity of the party submitting such proposal or inquiry (all
in reasonable detail), and shall advise DHI promptly of any
developments concerning the same and the status thereof.
</FONT>

<P align="center"><FONT size="2">I-27
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Except as set forth in this
<I>Section&nbsp;5.2(b),</I> the Company Board shall not withdraw
or, in any manner adverse to DHI, modify its recommendation of
the transactions contemplated hereby or approve or recommend, or
cause the Company to enter into any agreement with respect to,
any Third Party Acquisition. Notwithstanding the foregoing, if
the Company Board determines in its good faith judgment, after
consultation with and advice from outside legal counsel, that it
is necessary to do so in order to comply with its fiduciary
duties, the Company Board may withdraw or modify its
recommendation of the transactions contemplated hereby or
approve or recommend a Superior Proposal, but in each case only
(i)&nbsp;after providing reasonable written notice to DHI (a
<I>&#147;Notice of Superior Proposal&#148;</I>) advising DHI
that the Company Board has received a Superior Proposal,
specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior
Proposal (all in reasonable detail) and (ii)&nbsp;if DHI does
not, within three business days of DHI&#146;s receipt of the
Notice of Superior Proposal, make an offer which the Company
Board determines in its good faith judgment (after consultation
with a financial adviser of nationally recognized reputation) to
provide as great a value and to be as favorable to the
Company&#146;s stockholders as such Superior Proposal; provided,
however, that the Company shall not be entitled to enter into
any agreement with respect to a Superior Proposal unless and
until this Agreement is terminated by its terms pursuant to
<I>Section&nbsp;7.1.</I> Any disclosure that the Company Board
may be compelled to make with respect to the receipt of a
proposal for a Third Party Acquisition in order to comply with
Rule&nbsp;14d-9 or 14e-2 will not constitute a violation of this
<I>Section&nbsp;5.2(b);</I> provided that such disclosure states
that no action will be taken by the Company Board with respect
to the withdrawal or modification of its recommendation of the
transactions contemplated hereby or the approval or
recommendation of any Third Party Acquisition except in
accordance with this <I>Section&nbsp;5.2(b).</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;For the purposes of this Agreement,
<I>&#147;Third Party Acquisition&#148;</I> means the occurrence
of any of the following events: (i)&nbsp;the acquisition of the
Company by merger or otherwise by any person (which includes a
&#147;person&#148; as such term is defined in
Section&nbsp;13(d)(3) of the Exchange Act) other than DHI or any
affiliate thereof (a <I>&#147;Third Party&#148;</I>);
(ii)&nbsp;the acquisition by a Third Party of all or a
substantial portion of the assets of the Company and the Company
Subsidiaries taken as a whole; (iii)&nbsp;the acquisition by a
Third Party of a significant equity interest in the Company or
any Company Subsidiary (whether from the Company or any Company
Subsidiary, by tender offer, exchange offer or otherwise);
(iv)&nbsp;the adoption by the Company of a plan of liquidation
or the declaration or payment of an extraordinary dividend;
(v)&nbsp;the repurchase by the Company or any Company Subsidiary
of a significant equity interest in the Company or any Company
Subsidiary; or (vi)&nbsp;any other business combination,
acquisition, recapitalization, restructuring or other similar
transaction involving the Company or any Company Subsidiary. For
purposes of this Agreement, a <I>&#147;Superior
Proposal&#148;</I> means any bona fide proposal to acquire
directly or indirectly for consideration consisting of cash or
securities more than 50% of the voting power of Company Shares
then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Company Board
determines in its good faith judgment (after consulting with a
financial adviser of nationally recognized reputation)
(1)&nbsp;to be from a Third Party that is financially capable of
completing the transaction subject to the proposal and
(2)&nbsp;to provide (if completed) greater value and to be more
favorable to the Company&#146;s stockholders than the Merger.
</FONT>

<P align="left">
<FONT size="2">5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conduct of
Business by DHI Pending the Merger.</I> DHI covenants and agrees
that, during the period from the date of this Agreement and
continuing until the earlier of the termination of this
Agreement or the Effective Time, unless the Company shall
otherwise agree in writing, which agreement shall not be
unreasonably withheld or delayed, DHI shall conduct its business
and shall cause the businesses of the DHI Subsidiaries to be
conducted in the ordinary course of business except as
contemplated by this Agreement. Except as contemplated by this
Agreement, neither DHI nor any DHI Subsidiary shall, during the
period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective
Time, directly or indirectly do any of the following without the
prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;amend or otherwise change the Amended
and Restated Certificate of Incorporation or Bylaws of DHI other
than incident to a stock split or combination;
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;(i)&nbsp;declare, set aside, make or pay
any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of any of its
capital stock, except for quarterly cash dividends and stock
dividends and except that a DHI Subsidiary may declare and pay a
dividend to its parent or DHI or (ii)&nbsp;reclassify the DHI
Common Stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of or in
substitution for shares of DHI Common Stock;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership or
other business organization or division thereof if such
transaction would prevent or materially delay the consummation
of the transactions contemplated by this Agreement or if the
amount of consideration (whether in cash, DHI Common Stock or
other securities or property) paid exceeds $350,000,000;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;issue any shares of DHI Common Stock
(except pursuant to stock options issued under DHI&#146;s stock
option plans or in any stock dividend) in one transaction or
series of related transactions if the shares so issued
constitute more than 15% of the outstanding shares of DHI Common
Stock (after giving effect to such issuance);&nbsp;and
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;take, or agree to take, any of the
actions described in <I>Sections&nbsp;5.3(a)</I> through
<I>(d)</I> above, or any action which would make any of the
representations or warranties of DHI contained in this Agreement
untrue or incorrect in any material respect as contemplated
hereby or prevent DHI from performing or cause DHI not to
perform in any material respect its covenants hereunder.
</FONT>

<P align="left">
<FONT size="2">5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Section&nbsp;341(f)
Consent.</I> DHI hereby acknowledges that, notwithstanding
anything to the contrary in this Agreement, the Company shall,
immediately prior to the Closing, file a statement of consent
pursuant to Section&nbsp;341(f) of the Code and the Treasury
Regulations promulgated thereunder with respect to the Merger.
DHI covenants and agrees that it will, and will cause the
Surviving Corporation to, take such actions as required pursuant
to Section&nbsp;341(f)(3)(B) of the Code and the Treasury
Regulations promulgated thereunder to agree to have the
provisions of Section&nbsp;341(f)(2) apply to the assets of the
Company as a result of such statement of consent. The Company
shall take such actions prior to the filing of the consent as
DHI may reasonably request to minimize the Tax consequences to
the Surviving Corporation that may result from the filing by the
Company or any of the Company Subsidiaries of such statements of
consent, and the acceptance of such statements of consent by
DHI, in connection with the Merger.
</FONT>

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<DIV align="left"><A NAME="103"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;6
</FONT>

<P align="center">
<FONT size="2">ADDITIONAL AGREEMENTS
</FONT>

<P align="left">
<FONT size="2">6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>HSR Act.</I>
As promptly as practicable after the date of this Agreement, the
Company and DHI shall file any notifications that may be
required under the HSR Act in connection with the Merger and the
transactions contemplated hereby and thereafter use reasonable
efforts to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission (the
<I>&#147;FTC&#148;</I>) and the Antitrust Division of the
Department of Justice (the <I>&#147;Antitrust
Division&#148;</I>) for additional information or documentation
and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other
governmental authority in connection with antitrust matters.
</FONT>

<P align="left">
<FONT size="2">6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Access to
Information; Confidentiality.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Upon reasonable notice and subject to
restrictions contained in confidentiality agreements to which
such party is subject (from which such party shall use
reasonable efforts to be released), the Company shall (and shall
cause each Company Subsidiary to) afford to the officers,
employees, accountants, counsel and other representatives of DHI
reasonable access, during the period to the Effective Time, to
all its properties, books, contracts, commitments and records
and, during such period, the Company shall (and shall cause each
Company Subsidiary to) furnish promptly to DHI all information
concerning its business, properties and personnel as such other
party may reasonably request.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Upon reasonable notice and subject to
restrictions contained in confidentiality agreements to which
such party is subject (from which such party shall use
reasonable efforts to be released), DHI shall
</FONT>

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<DIV align="left">
<FONT size="2">(and shall cause each DHI Subsidiary to) afford
to the officers, employees, accountants, counsel and other
representatives of the Company reasonable access, during the
period to the Effective Time, to all its properties, books,
contracts, commitments and records and, during such period, DHI
shall (and shall cause each DHI Subsidiary to) furnish promptly
to the Company all information concerning its business,
properties and personnel as such other party may reasonably
request.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Each of DHI and the Company shall make
available to the other the appropriate individuals (including
attorneys, accountants and other professionals) for discussion
of the other&#146;s business, properties and personnel as either
DHI or the Company may reasonably request. Each party shall keep
all information obtained under this <I>Section&nbsp;6.2</I>
confidential in accordance with the terms of the confidentiality
letter, dated August&nbsp;20, 2001 (the <I>&#147;Confidentiality
Letter&#148;</I>), between DHI and the Company.
</FONT>

<P align="left">
<FONT size="2">6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Registration
Statement.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;DHI shall prepare and file with the SEC
and any other applicable regulatory bodies, as soon as
reasonably practicable, a Registration Statement on
Form&nbsp;S-4 with respect to the shares of the DHI Common Stock
to be issued in the Merger (together with any amendments or
supplements thereto, the <I>&#147;Registration
Statement&#148;</I>), and will otherwise proceed promptly to
satisfy the requirements of the Securities Act, including
Rule&nbsp;145 thereunder. Such Registration Statement shall
contain a joint proxy statement of DHI and of the Company
prepared by DHI and the Company containing the information
required by the Exchange Act (together with any amendments or
supplements thereto, the <I>&#147;Proxy Statement&#148;</I>).
DHI shall use its reasonable best efforts to cause the
Registration Statement to be declared effective and to maintain
such effectiveness as long as is necessary to consummate the
Merger. DHI shall promptly amend or supplement the Registration
Statement to the extent necessary in order to make the
statements therein not misleading or to correct any statements
which have become false or misleading. The Company and DHI shall
use their reasonable best efforts to have the Proxy Statement
approved by the SEC under the provisions of the Exchange Act.
The Company and its counsel shall be given a reasonable
opportunity to review and comment on the filings made pursuant
to this <I>Section&nbsp;6.3</I> prior to their filing with the
SEC and shall be provided with any comments DHI and its counsel
may receive from the SEC or its staff with respect to such
filings promptly after receipt of such comments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The information specifically designated
as being supplied by the Company for inclusion or incorporation
by reference in the Registration Statement shall not, at the
time the Registration Statement is declared effective or at the
time the Proxy Statement is first mailed to holders of the
Company Common Stock, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The information specifically designated as being
supplied by the Company for inclusion or incorporation by
reference in the Proxy Statement shall not, at the date the
Proxy Statement is first mailed to holders of the Company Common
Stock and the DHI Common Stock, contain any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective
Time, any event or circumstance relating to the Company, or its
officers or directors, should be discovered by the Company which
should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, the Company
shall promptly inform DHI. All documents, if any, that the
Company is responsible for filing with the SEC in connection
with the transactions contemplated hereby will comply as to form
and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations
thereunder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The information specifically designated
as being supplied by DHI for inclusion or incorporation by
reference in the Registration Statement shall not, at the time
the Registration Statement is declared effective or at the time
the Proxy Statement is first mailed to holders of the Company
Common Stock and the DHI Common Stock, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The information specifically
designated as being supplied by DHI for inclusion or
incorporation by reference in
</FONT>

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<DIV align="left">
<FONT size="2">the Proxy Statement shall not, at the date the
Proxy Statement is first mailed to holders of the Company Common
Stock and the DHI Common Stock, contain any untrue statement of
a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstance under which they are made,
not misleading. If at any time prior to the Effective Time any
event or circumstance relating to DHI or its officers or
directors should be discovered by DHI which should be set forth
in an amendment to the Registration Statement or a supplement to
the Proxy Statement, DHI shall promptly inform the Company and
shall promptly file such amendment to the Registration
Statement. All documents that DHI or the Company is responsible
for filing with the SEC in connection with the transactions
contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the
Exchange Act and the rules and regulations thereunder.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;Prior to the Closing Date, DHI shall use
its reasonable best efforts to cause the shares of the DHI
Common Stock to be issued pursuant to the Merger to be
registered or qualified under all applicable Blue Sky Laws of
each of the states and territories of the United States, and to
take any other actions which may be necessary to enable the DHI
Common Stock to be issued pursuant to the Merger to be
distributed in each such jurisdiction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Prior to the Closing Date, DHI shall
file a subsequent listing application with the NYSE relating to
the shares of the DHI Common Stock to be issued in connection
with the Merger, and shall use reasonable best efforts to cause
such shares of the DHI Common Stock to be listed, upon official
notice of issuance, prior to the Closing Date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;The Company shall furnish all
information to DHI with respect to the Company and the Company
Subsidiaries as DHI may reasonably request for inclusion in the
Registration Statement, the Proxy Statement and shall otherwise
cooperate with DHI in the preparation and filing of such
documents.
</FONT>

<P align="left">
<FONT size="2">6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Meetings of
Stockholders.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company will take all steps
necessary in accordance with its Certificate of Incorporation
and Bylaws to call, give notice of, convene and hold a meeting
of its stockholders (the <I>&#147;Company Stockholder
Meeting&#148;</I>) as soon as practicable (and in any event
within 45&nbsp;days) after the effectiveness of the Registration
Statement, for the purpose of approving and adopting this
Agreement and the transactions contemplated hereby and for such
other purposes as may be necessary. Unless this Agreement shall
have been validly terminated as provided herein, the Company
Board (subject to the provisions of <I>Section&nbsp;5.2</I> and
<I>Section&nbsp;7.1(d)</I>) will (i)&nbsp;recommend to its
stockholders the approval and adoption of this Agreement, the
transactions contemplated hereby and any other matters to be
submitted to the stockholders in connection therewith, to the
extent that such approval and adoption is required by applicable
law in order to consummate the Merger, and (ii)&nbsp;use its
reasonable good faith efforts to obtain the approval by its
stockholders of this Agreement and the transactions contemplated
hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;DHI will take all steps necessary in
accordance with its Amended and Restated Certificate of
Incorporation and By-Laws to call, give notice of, convene and
hold a meeting of its stockholders (the <I>&#147;DHI Stockholder
Meeting&#148;</I>) as soon as practicable (and in any event
within 45&nbsp;days) after the effectiveness of the Registration
Statement, for the purpose of approving and adopting this
Agreement and the transactions contemplated hereby, approving
the issuance of the DHI Shares upon consummation of the Merger
and for such other purposes as may be necessary. Unless this
Agreement shall have been validly terminated as provided herein,
DHI&#146;s Board will (i)&nbsp;recommend to its stockholders the
approval and adoption of this Agreement, and (ii)&nbsp;use its
reasonable good faith efforts to obtain the approval by its
stockholders of this Agreement and the transactions contemplated
hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The Company and DHI shall use their
reasonable good faith efforts to hold the Company Stockholder
Meeting and the DHI Stockholder Meeting contemporaneously.
</FONT>

<P align="left">
<FONT size="2">6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Tax-Free
Reorganization Treatment.</I> Neither DHI nor the Company shall
take or cause to be taken any action on or before the Effective
Time which would prevent the Merger from qualifying as a
&#147;reorganization&#148; under Section&nbsp;368(a) of the
Code. DHI shall not take or cause to be taken any action
</FONT>

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<DIV align="left">
<FONT size="2">after the Effective Time that would prevent the
Merger from qualifying as a reorganization under
Section&nbsp;368(a) of the Code except as required by applicable
law.
</FONT>
</DIV>

<P align="left">
<FONT size="2">6.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Affiliate
Agreements.</I> The Company will use its best efforts
(i)&nbsp;to cause each of its directors and executive officers
(other than James K. Schuler and Eugene S. Rosenfeld) and each
of its &#147;affiliates&#148; (within the meaning of
Rule&nbsp;145 under the Securities Act) to execute and deliver
to DHI as soon as practicable an agreement in the form attached
hereto as <I>Exhibit&nbsp;6.6(a)</I> relating to the disposition
of shares of DHI Common Stock issuable pursuant to this
Agreement, (ii)&nbsp;to cause James K. Schuler and Eugene S.
Rosenfeld to execute and deliver immediately following the
execution and delivery of this Agreement an agreement in the
form attached hereto as <I>Exhibit&nbsp;6.6(b)</I> relating to
the disposition of shares of DHI Common Stock Beneficially Owned
by them, (iii)&nbsp;to cause James K Schuler and Eugene S.
Rosenfeld to execute and deliver immediately following the
execution and delivery of this Agreement an agreement in the
form attached hereto as <I>Exhibit&nbsp;6.6(c)</I> relating to
covenants not to compete with the Surviving Corporation,
(iv)&nbsp;to cause WPH-Schuler LLC, Apollo Real Estate
Investment Fund, L.P., Highridge Pacific Housing Investors, L.P.
and Blackacre WPH, LLC to execute and deliver immediately
following the execution and delivery of this Agreement an
agreement in the form attached hereto as
<I>Exhibit&nbsp;6.6(d)</I> relating to the disposition of shares
of DHI Common Stock Beneficially Owned by them, and (v)&nbsp;to
cause James K. Schuler and Craig A. Manchester to execute and
deliver immediately following the execution and delivery of this
Agreement an agreement in the forms attached hereto as
<I>Exhibit 6.6(e)</I> relating to the terms and conditions of
employment with the Surviving Corporation.
</FONT>

<P align="left">
<FONT size="2">6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company Stock
Options.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;As soon as reasonably practicable after
the Effective Time, DHI shall deliver to the holders of the
Company Stock Options, other than Director Options, appropriate
notices setting forth such holders&#146; rights pursuant to a
DHI stock incentive plan, and any stock option agreement
evidencing such DHI Stock Options replacing such holders&#146;
Company Stock Options as provided by <I>Section&nbsp;2.1.6</I>
and this <I>Section&nbsp;6.7.</I> DHI shall use its reasonable
efforts to ensure, to the extent required by, and subject to the
provisions of, such plan or agreements, that the DHI Stock
Options replacing any Company Stock Options which qualified as
incentive stock options prior to the Effective Time shall also
qualify as incentive stock options after the Effective Time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;DHI shall take all corporate action
necessary to reserve for issuance a sufficient number of shares
of the DHI Common Stock for delivery upon exercise of the DHI
Stock Options replacing the Company Stock Options in accordance
with <I>Section&nbsp;2.1.6.</I> DHI shall use its reasonable
efforts to maintain the effectiveness of a registration
statement or registration statements covering such options (and
maintain the current status of the prospectus or prospectuses
contained therein) for so long as such DHI Stock Options remain
outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Except to the extent otherwise agreed to
by the parties, all restrictions or limitations on transfer and
vesting with respect to the Company Stock Options, to the extent
that such restrictions or limitations shall not have already
lapsed, shall remain in full force and effect with respect to
the DHI Stock Options replacing the Company Stock Options as set
forth above.
</FONT>

<P align="left">
<FONT size="2">6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Board
Representation.</I> DHI shall use its best efforts, whether
through increase in the size of its Board of Directors or
otherwise, to cause the appointment or nomination and election
of James K. Schuler as a director of DHI at the Effective Time.
</FONT>

<P align="left">
<FONT size="2">6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
and Insurance.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;From and after the Effective Time, the
Surviving Corporation shall, to the fullest extent permitted
under applicable law and the Surviving Corporation&#146;s
Certificate of Incorporation and Bylaws (including
Section&nbsp;145(h) of the Delaware Law), indemnify and hold
harmless, each present and former director or officer of the
Company, determined as of the Effective Time (collectively, the
<I>&#147;Indemnified Parties&#148;</I>), against any costs or
expenses (including reasonable attorneys&#146; fees), judgments,
fines, losses, claims, damages and liabilities incurred in
connection with, and amounts paid in settlement of, any claim,
action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative and
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">wherever asserted, brought or filed, arising out
of or pertaining to any acts or omissions or alleged acts or
omissions by them in their capacities as such; provided that, as
to claims existing as of the Effective Time, in no event shall
the Surviving Corporation be obligated to provide
indemnification under this <I>Section&nbsp;6.9(a)</I> in excess
of the indemnification that the Company is required to provide
to its directors and officers under its Certificate of
Incorporation or Bylaws as in effect as of the date hereof.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;For a period of six years after the
Effective Time, the Surviving Corporation shall maintain
(through the continuation or endorsement of the Company&#146;s
existing policy or the purchase of a &#147;tail-end&#148; rider
permitted by such policy) in effect, if available, the
directors&#146; and officers&#146; liability insurance covering
those persons who are currently covered by the Company&#146;s
directors&#146; and officers&#146; liability insurance policy on
the terms (including the amounts of coverage and the amounts of
deductibles, if any) now applicable to them; provided that in no
event shall the Surviving Corporation be required to spend in
excess of 200% of the annual premium currently paid by the
Company for such coverage, and provided further that, if the
premium for such coverage exceeds such amount, the Surviving
Corporation shall maintain the greatest coverage available for
such 200% of the annual premium.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;This <I>Section&nbsp;6.9</I> shall
survive the consummation of the Merger at the Effective Time, is
intended to benefit the Company, the Surviving Corporation and
the Indemnified Parties, shall be binding on all successors and
assigns of the Surviving Corporation and shall be enforceable by
the Indemnified Parties. In the event that the Surviving
Corporation or any of its successors or assigns
(i)&nbsp;consolidates or merges into any other person or entity
and shall not be the continuing or surviving corporation or
entity in such consolidation or merger or (ii)&nbsp;transfers
all or substantially all of its properties and assets to any
person or entity, then and in such case, proper provisions shall
be made so that the successors and assigns of the Surviving
Corporation (as the case may be) assume the obligations of the
Surviving Corporation set forth in this <I>Section&nbsp;6.9.</I>
</FONT>

<P align="left">
<FONT size="2">6.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notification
of Certain Matters.</I> The Company shall give prompt notice to
DHI, and DHI shall give prompt notice to the Company, of
(i)&nbsp;the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause
any representation or warranty contained in this Agreement to be
untrue or inaccurate the result of which would be a Material
Adverse Effect to the Company or DHI, as applicable, or
(ii)&nbsp;any failure of the Company or DHI, as the case may be,
materially to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to
this <I>Section&nbsp;6.10</I> shall not limit or otherwise
affect the remedies available hereunder to the party receiving
such notice.
</FONT>

<P align="left">
<FONT size="2">6.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Further
Action.</I> Upon the terms and subject to the conditions hereof,
each of the parties hereto shall use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to
be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, to obtain in a
timely manner all material waivers, consents and approvals and
to effect all necessary registrations and filings, and otherwise
to satisfy or cause to be satisfied in all material respects all
conditions precedent to its obligations under this Agreement.
</FONT>

<P align="left">
<FONT size="2">6.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Public
Announcements. </I>DHI and the Company shall consult with each
other before issuing any press release with respect to the
Merger or this Agreement and shall not issue any such press
release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably
withheld or delayed; provided, however, that a party may,
without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of
counsel be required by law or the rules and regulations of the
NYSE if it has used all reasonable efforts to consult with the
other party.
</FONT>

<P align="left">
<FONT size="2">6.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Benefits. </I>(a)&nbsp;DHI shall cause the persons who are
employees of the Company and any Company Subsidiary immediately
prior to the Effective Time to be eligible to participate,
immediately after the Effective Time, in all of the benefit
plans, programs and policies sponsored by DHI for the benefit of
its employees generally, to the extent they would otherwise be
eligible under such plans, at the same benefit levels as are
generally applicable to other similarly situated employees of
DHI. Such plans, programs and policies are set forth in
DHI&#146;s employee handbooks, copies of which have been made
</FONT>

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<DIV align="left">
<FONT size="2">available to the Company. DHI is a participating
employer for the purposes of the D.R. Horton,&nbsp;Inc. Stock
Purchase Plan of 1999.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;DHI shall cause the employees of the
Company and any Company Subsidiary immediately prior to the
Effective Time to receive day-for-day credit for all of their
service prior to the Effective Time with the Company and the
Company Subsidiaries under all employee benefit plans, programs
and policies sponsored by DHI for the benefit of employees
generally (but not for benefit accrual purposes or early
retirement subsidies, and not for vesting under the D.R.
Horton,&nbsp;Inc. Stock Tenure Plan). Except as otherwise herein
provided, such prior service shall be credited for both
eligibility and vesting purposes (other than as provided above),
and for purposes of any non-pension benefit schedule based on
service (e.g. for vacation pay, sick days and personal days).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Nothing contained in this
<I>Section&nbsp;6.13</I> shall be construed as requiring DHI or
any DHI Subsidiary to continue the employment or position of any
specific person. This <I>Section&nbsp;6.13</I> shall not limit
the Surviving Corporation&#146;s ability to amend, modify or
terminate any employee benefit plans after the Effective Time
consistent with the terms of such plans and applicable law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;With respect to each master and
prototype tax-qualified retirement plan <I>(&#147;M&#38;P
Plan&#148;</I>) sponsored or maintained by the Company and/ or
any Company Subsidiary, the Company and any Company Subsidiary
shall, on or before the end of the 2001 plan year, either adopt
or certify in writing its intent to adopt the required GUST
amendments to each such M&#38;P&nbsp;Plan, and the Company and
each such Company Subsidiary hereby represent and warrant that
an application for a GUST opinion letter for each such M&#38;P
Plan was filed with the IRS by the M&#38;P Plan sponsor on or
before December&nbsp;31, 2000. The Company and each such Company
Subsidiary shall also adopt the GUST-approved M&#38;P&nbsp;Plan
by the deadline specified in IRS Announcement 2001-104. For
purposes hereof, <I>&#147;GUST&#148;</I> means the statutes
referenced in IRS Announcement 2001-104. With respect to any
individually designed tax-qualified retirement plans sponsored
or maintained by the Company or any Company Subsidiary, the
Company and each such Company Subsidiary shall adopt the
required GUST amendments and submit the plan to the IRS on or
before December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Unless otherwise specified by DHI, the
Company and each Company Subsidiary shall terminate all
tax-qualified retirement plans immediately prior to the Closing
Date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;With respect to all Company Employee
Plans (other than employee welfare plans as defined by
Section&nbsp;3(1) of ERISA), the Company and each such Company
Subsidiary shall adopt a board resolution freezing all such
plans as of the Closing Date, such that all future benefit
accruals shall cease, all ongoing participation and coverage
shall cease, no new participants shall be permitted, and no
additional compensation shall be taken into account, all
effective as of the Closing Date, <I>provided</I> that,
(i)&nbsp;in connection with the Schuler Homes,&nbsp;Inc.
Deferred Compensation Plan for Directors and Key Employees, the
amounts accrued through the Closing Date shall continue to be
credited with earnings on account balances and such account
balances and earnings shall be distributed in accordance with
the terms of that plan, and (ii)&nbsp;DHI, at its sole option,
may decide to continue, in whole or in part, the Company&#146;s
2000 Incentive Bonus Plan.
</FONT>

<P align="left">
<FONT size="2">6.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Mutual
Release of Obligations. </I>Notwithstanding the provisions of
<I>Section&nbsp;5.1,</I> on the Closing Date, to be effective as
of the Effective Time and subject to the execution by the other
parties thereto, the Company shall enter into a termination
agreement and mutual release substantially in the form of
<I>Exhibit&nbsp;6.14,</I> pursuant to which the Company, on
behalf of itself, its subsidiaries and its successors, and the
other parties set forth therein shall terminate any remaining
contingent or other obligations under the agreements referred to
therein, including without limitation any rights to receive or
surrender Company Shares, and shall release each other party
with respect to any claims thereunder. DHI hereby consents to
such agreement and release and agrees to be bound thereby as the
Surviving Corporation from and after the Effective Time. In
addition, until the tenth anniversary of the Closing Date, DHI
shall cause the Company operations and each Company Subsidiary,
and each of their respective current and former officers,
directors (or similar position, in the case of limited liability
companies), stockholders, partners (in the case of limited
partnerships), members (in the case of limited liability
companies) and employees who
</FONT>

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<DIV align="left">
<FONT size="2">currently are named as insureds or additional
named insureds under in-force policies of insurance of the
Company and the Company Subsidiaries covering construction
defect litigation claims to be named as insureds or additional
named insureds under all policies of insurance maintained by DHI
or any of its Affiliates as of the Effective Time or purchased
thereafter covering construction defect litigation claims.
</FONT>
</DIV>

<!-- link1 "ARTICLE 7 Termination, Amendment and Waiver" -->
<DIV align="left"><A NAME="104"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;7
</FONT>

<P align="center">
<FONT size="2">TERMINATION, AMENDMENT AND WAIVER
</FONT>

<P align="left">
<FONT size="2">7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination.
</I>This Agreement may be terminated, and the Merger may be
abandoned, at any time prior to the Effective Time, whether
before or after the adoption of this Agreement by the holders of
the Company Common Stock or the DHI Common Stock:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;by mutual written consent of DHI and the
Company;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;by either DHI or the Company:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;if, upon a vote at a duly held meeting
	of stockholders or any adjournment thereof, any required
	approval of the holders of the Company Common Stock (including
	any required approval of any class of the Company Common Stock)
	shall not have been obtained;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;if the Merger shall not have been
	consummated on or before April&nbsp;30, 2002, unless the failure
	to consummate the Merger is the result of a willful and material
	breach of this Agreement by the party seeking to terminate this
	Agreement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;if a court of competent jurisdiction
	or governmental, regulatory or administrative agency or
	commission shall have issued a nonappealable final order, decree
	or ruling or taken any other action having the effect of
	permanently restraining, enjoining or otherwise prohibiting the
	Merger (provided that the right to terminate this Agreement
	under this <I>Section&nbsp;7.1(b)(iii)</I> shall not be
	available to any party who has not complied with its obligations
	under <I>Section&nbsp;6.11</I> and such noncompliance materially
	contributed to the issuance of any such order, decree or ruling
	or the taking of such action);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;in the event of a material breach by
	the other party of any representation, warranty, covenant or
	other agreement contained in this Agreement (a
	<I>&#147;Terminating Breach&#148;</I>) (provided that the
	terminating party is not then in material breach of any
	representation, warranty, covenant or other agreement contained
	in this Agreement); provided that, in the case of a covenant or
	agreement, if such Terminating Breach is curable by the Company
	or DHI, as the case may be, through the exercise of its
	reasonable efforts and for so long as the Company or DHI, as the
	case may be, continues to exercise such reasonable efforts,
	neither DHI nor the Company, respectively, may terminate this
	Agreement under this <I>Section&nbsp;7.1(b)(iv);</I> or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(v)&nbsp;if, upon a vote at a duly held meeting
	of stockholders or any adjournment thereof, any required
	approval of the holders of the DHI Common Stock shall not have
	been obtained;
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;by either DHI or the Company in the
event that (i)&nbsp;all of the conditions to the obligation of
such party to effect the Merger set forth in
<I>Section&nbsp;8.1</I> shall have been satisfied and
(ii)&nbsp;any condition to the obligation of such party to
effect the Merger set forth in <I>Section&nbsp;8.2</I> (in the
case of DHI) or <I>Section&nbsp;8.3</I> (in the case of the
Company) is not capable of being satisfied prior to the end of
the period referred to in <I>Section&nbsp;7.1(b)(ii);</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;by the Company if the Company Board has
received a Superior Proposal, the Company Board determines in
its good faith judgment, after consultation with and advice from
outside legal counsel, that it is necessary to do so in order to
comply with its fiduciary duties, withdraws or, in a manner
adverse to DHI, modifies its recommendation of the transactions
contemplated hereby or approves or recommends such Superior
Proposal, and the Company Board complies with all other
provisions of <I>Section&nbsp;5.2(b)</I> and, prior to such
termination, complies with the provisions of
<I>Section&nbsp;9.1(b);</I>
</FONT>

<P align="center"><FONT size="2">I-35
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;by DHI if the Company Board shall have
recommended to the Company&#146;s stockholders a Superior
Proposal; or the Company Board shall have withdrawn or, in a
manner adverse to DHI, modified its recommendation of this
Agreement or the Merger; provided that any disclosure that the
Company Board is compelled to make of the receipt of a proposal
for a Third Party Acquisition in order to comply with
Rule&nbsp;14d-9 or 14e-2 shall not in and of itself constitute
the withdrawal or modification of the Company Board&#146;s
recommendation, provided that such disclosure states that no
action will be taken by the Company Board with respect to the
withdrawal or modification of its recommendation of the
transactions contemplated hereby or the approval or
recommendation of any Third Party Acquisition except in
accordance with <I>Section&nbsp;5.2(b);</I> or
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;by the Company if the Stock Value is
less than the Floor Price, unless prior to the Closing Date DHI
elects, by notice to the Company, to establish the Adjusted Cash
Amount or the Adjusted Exchange Ratio, or a combination thereof,
so that the amount of cash and DHI Common Stock (valued at the
Stock Value) constituting the Merger Consideration shall equal
not less than $14.25.
</FONT>

<P align="left">
<FONT size="2">7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect of
Termination. </I>In the event of termination of this Agreement
as provided in <I>Section&nbsp;7.1,</I> this Agreement shall
forthwith become void and have no effect, without any liability
or obligation on the part of any party, its affiliates,
directors, officers or stockholders other than the provisions of
<I>Section&nbsp;9.1,</I> unless such termination results from
the willful and material breach by a party of any of its
representations, warranties, covenants or other agreements set
forth in this Agreement, in which event the terminating party
shall retain its rights and remedies against such other party in
respect of such other party&#146;s breach.
</FONT>

<!-- link1 "ARTICLE 8 Conditions to Closing" -->
<DIV align="left"><A NAME="105"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;8
</FONT>

<P align="center">
<FONT size="2">CONDITIONS TO CLOSING
</FONT>

<P align="left">
<FONT size="2">8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Mutual
Conditions. </I>The respective obligations of each party to
effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>No
Injunctions or Restraints; Illegality. </I>No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of
the Merger shall be in effect; and there shall not be any action
taken, or any statute, rule, regulation or order enacted,
entered, enforced or applicable to the Merger which makes the
consummation of the Merger illegal;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Governmental
Actions. </I>There shall not have been instituted or pending any
action or proceeding by any governmental authority or
administrative agency, before any governmental authority,
administrative agency or court of competent jurisdiction, nor
shall there be in effect any judgment, decree or order of any
governmental authority, administrative agency or court of
competent jurisdiction, in either case, seeking to prohibit or
limit DHI from exercising all material rights and privileges
pertaining to its ownership of the assets of the Company
(including the Company Subsidiaries) taken as a whole or the
ownership or operation by DHI or any DHI Subsidiary of all or a
material portion of the business or assets of the Surviving
Corporation and its subsidiaries taken as a whole, or seeking to
compel DHI or any DHI Subsidiary to dispose of or hold separate
all or any material portion of the business or assets of the
Surviving Corporation and its subsidiaries taken as a whole, as
a result of the Merger or the transactions contemplated by this
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>HSR Act.
</I>Any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Company
Stockholder Approval. </I>The holders of shares of the
Class&nbsp;A Common Stock voting as a class, the Class&nbsp;B
Common Stock voting as a class and the Company Common Stock
shall have approved the adoption of this Agreement and any other
matters submitted to them for the purpose of approving the
transactions contemplated hereby.
</FONT>

<P align="center"><FONT size="2">I-36
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>DHI
Stockholder Approval. </I>The holders of shares of the DHI
Common Stock shall have approved the adoption of this Agreement
and any other matters submitted to them for the purpose of
approving the transactions contemplated hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Listing.
</I>The shares of the DHI Common Stock to be issued in
connection with the Merger shall have been listed on the NYSE,
upon official notice of issuance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Registration
Statement. </I>The Registration Statement shall have been
declared effective in accordance with the provisions of the
Securities Act and Blue Sky Laws, if applicable, and no stop
order with respect to the Registration Statement shall be in
effect and no proceeding for that purpose shall have been
instituted by the SEC or any state regulatory authorities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Consents.
</I>All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission,
board or other regulatory body, the absence of which would have
a Material Adverse Effect on the Surviving Corporation, DHI, any
DHI Subsidiary or any Company Subsidiary, shall have been
obtained or made, except for filings in connection with the
Merger and any other documents required to be filed after the
Effective Time.
</FONT>

<P align="left">
<FONT size="2">8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions to
Obligations of DHI. </I>The obligations of DHI to consummate the
Merger and the other transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Closing Date, of
the following additional conditions:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The representations and warranties of
the Company contained herein (without regard to any materiality
exceptions contained therein) shall be true at and as of the
Closing Date with the same effect as if made at and as of the
Closing Date (except to the extent such representation or
warranty specifically related to an earlier date, in which case
such representation or warranty shall be true as of such earlier
date), except for such untruths or inaccuracies that would not,
individually, or in the aggregate, have a Company Material
Adverse Effect, and the Company shall have performed and
complied in all material respects with all agreements and
covenants set forth in this Agreement to be performed or
complied with by it on or prior to the Closing Date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;DHI shall have been furnished with a
certificate, executed by a duly authorized officer of the
Company, dated the Closing Date, certifying as to the
fulfillment of the conditions in paragraph&nbsp;(a).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;DHI shall have received an opinion from
Gibson, Dunn&nbsp;&#38; Crutcher LLP to the effect that the
Merger will constitute a reorganization within the meaning of
Section&nbsp;368(a) of the Code, and that DHI and the Company
will each be a party to a reorganization within the meaning of
Section&nbsp;368(b) of the Code, which opinion may be based upon
reasonable representations of fact provided by officers of DHI
and the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;DHI shall have received the executed
agreements contemplated pursuant to <I>Section&nbsp;6.6,</I>
which agreements and any supplements thereto required thereby
shall be in full force and effect.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;The aggregate number of Dissenting
Shares shall not exceed 8% of the total number of Company Shares
outstanding as of the date hereof.
</FONT>

<P align="left">
<FONT size="2">8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions to
Obligations of the Company.</I> The obligations of the Company
to consummate the Merger and the other transactions contemplated
hereby shall be subject to the satisfaction, at or prior to the
Closing Date, of the following conditions:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The representations and warranties of
DHI contained herein (without regard to any materiality
exceptions contained therein) shall be true at and as of the
Closing Date with the same effect as if made at and as of the
Closing Date (except to the extent such representation or
warranty specifically relates to an earlier date, in which case
such representation or warranty shall be true as of such earlier
date), except for such untruths or inaccuracies that would not,
individually or in the aggregate, have a DHI Material Adverse
Effect, and DHI shall have performed and complied in all
material respects with all agreements and covenants set forth in
this Agreement to be performed or complied with by it on or
prior to the Closing Date.
</FONT>

<P align="center"><FONT size="2">I-37
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The Company shall have been furnished
with a certificate, executed by duly authorized officer of DHI,
dated the Closing Date, certifying as to the fulfillment of the
conditions in paragraph&nbsp;(a).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The Company shall have received an
opinion from Gibson, Dunn&nbsp;&#38; Crutcher LLP to the effect
that the Merger will constitute a reorganization within the
meaning of Section&nbsp;368(a) of the Code and that DHI and the
Company will each be a party to a reorganization within the
meaning of Section&nbsp;368(b) of the Code, which opinion may be
based upon reasonable representations of fact provided by
officers of DHI and the Company.
</FONT>

<!-- link1 "ARTICLE 9 General Provisions" -->
<DIV align="left"><A NAME="106"></A></DIV>

<P align="center">
<FONT size="2">ARTICLE&nbsp;9
</FONT>

<P align="center">
<FONT size="2">GENERAL PROVISIONS
</FONT>

<P align="left">
<FONT size="2">9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Expenses and
Other Payments.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Except as otherwise provided in this
<I>Section&nbsp;9.1,</I> all costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expense,
whether or not the Merger is consummated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;In the event that this Agreement shall
be terminated:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;pursuant to <I>Section&nbsp;7.1(d)</I>
	or <I>Section&nbsp;7.1(e);</I>
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;by DHI pursuant to
	<I>Section&nbsp;7.1(b)(iv)</I> and within twelve months
	thereafter the Company enters into an agreement with respect to
	a Third Party Acquisition or a Third Party Acquisition
	occurs;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;pursuant to
	<I>Section&nbsp;7.1(b)(i)</I> and within twelve months
	thereafter the Company enters into an agreement with respect to
	a Third Party Acquisition or a Third Party Acquisition occurs;
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">the Company shall pay to DHI the amount of
$34,000,000 immediately upon the occurrence of the event
described in this <I>Section&nbsp;9.1(b)</I> and promptly
thereafter reimburse DHI for all documented out-of-pocket
expenses and fees (including, without limitation, fees payable
to all banks, investment banking firms and other financial
institutions, and their respective agents and counsel, and all
fees of counsel, accountants, financial printers, experts and
consultants to DHI), whether incurred prior to, on or after the
date hereof, in connection with the Merger and the consummation
of all transactions contemplated by this Agreement up to an
aggregate amount of $3,000,000 less any amount theretofore paid
pursuant to <I>Section&nbsp;9.1(c).</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;In the event this Agreement shall be
terminated by DHI or the Company pursuant to
<I>Section&nbsp;7.1(b)(i),</I> and at the time of termination
DHI is not in breach of its material obligations hereunder, the
Company shall, promptly after the termination of this Agreement,
reimburse DHI for all documented out-of-pocket expenses and fees
(including, without limitation, fees payable to all banks,
investment banking firms and other financial institutions, and
their respective agents and counsel, and all fees of counsel,
accountants, financial printers, experts and consultants to
DHI), whether incurred prior to, on or after the date hereof, in
connection with the Merger and the consummation of all
transactions contemplated by this Agreement; provided that in no
event shall the Company be required to pay in excess of an
aggregate of $3,000,000 pursuant to this
<I>Section&nbsp;9.1(c).</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;In the event this Agreement shall be
terminated by the Company pursuant to
<I>Section&nbsp;7.1(b)(v),</I> and at the time of termination
the Company is not in breach of its material obligations
hereunder, DHI shall, promptly after the termination of this
Agreement, reimburse the Company for all documented
out-of-pocket expenses and fees (including, without limitation,
fees payable to all banks, investment banking firms and other
financial institutions, and their respective agents and counsel,
and all fees of counsel, accountants, financial printers,
experts and consultants to the Company), whether incurred prior
to, on or after the date hereof, in connection with the Merger
and the consummation of all transactions contemplated by this
Agreement; provided that in no event shall DHI be required to
pay in excess of an aggregate of $3,000,000 pursuant to this
<I>Section&nbsp;9.1(d).</I>
</FONT>

<P align="center"><FONT size="2">I-38
</FONT>

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<P align="left">
<FONT size="2">9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effectiveness
of Representations, Warranties, Covenants and Agreements.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as otherwise provided in this
<I>Section&nbsp;9.2,</I> the representations, warranties,
covenants and agreements of each party hereto shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto,
any person controlling any such party or any of their officers
or directors, whether prior to or after the execution of this
Agreement. The representations, warranties, covenants and
agreements in this Agreement shall terminate at the Effective
Time, except that (i)&nbsp;the agreements set forth in
ARTICLE&nbsp;2, <I>Section&nbsp;6.3</I> and
<I>Section&nbsp;6.7</I> shall survive the Effective Time
indefinitely, and (ii)&nbsp;the agreements in
<I>Section&nbsp;6.9</I> and <I>Section&nbsp;6.13</I> shall
survive in accordance with their respective terms. The
Confidentiality Letter shall survive termination of this
Agreement as provided therein.
</FONT>

<P align="left">
<FONT size="2">9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notices.
</I>All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly
given or made if and when delivered personally or by overnight
courier to the parties at the following addresses or sent by
electronic transmission, with confirmation received, to the
telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like
notice):
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;If to DHI:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">D.R. Horton, Inc.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">1901 Ascension Blvd., Suite&nbsp;100
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Arlington, Texas 76006
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Facsimile: (817)&nbsp;436-6053 and
	(817)&nbsp;856-8252
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Telephone: (817)&nbsp;856-8200
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Attention: Rick Beckwitt and Ted Harbour
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;If to the Company:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Schuler Homes, Inc.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">400 Continental Blvd., Suite&nbsp;100
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">El Segundo, California 90245
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Facsimile: (310)&nbsp;648-7207
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Telephone: (310)&nbsp;648-7200
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Attention: James K. Schuler and Eugene S.
	Rosenfeld
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certain
Definitions. </I>For purposes of this Agreement, the term:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;<I>&#147;affiliate&#148;</I> means a
person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person; including, without
limitation, any partnership, limited liability company or joint
venture in which the first mentioned person (either alone, or
through or together with any other subsidiary) has, directly or
indirectly, an interest of 10% or more;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;<I>&#147;Beneficially Owned&#148;</I>
shall mean any Company Common Stock (a)&nbsp;owned by a person
who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares voting
power which includes the power to vote, or to direct the voting
of, such Company Common Stock, or investment power which
includes the power to dispose, or to direct the disposition of,
such Company Common Stock; (b)&nbsp;held in or subject to a
trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement, or device with the purpose or
effect of divesting another person of beneficial ownership of
Company Common Stock; (c)&nbsp;that a person has the right to
acquire beneficial ownership (as defined in clause&nbsp;(a)
above), including but not limited to any right to acquire
through the exercise of any option, warrant or right, through
the conversion of a security, pursuant to the power to revoke a
trust, discretionary account, or similar arrangement, pursuant
to any distribution from or dissolution of any limited liability
company, partnership or other entity or pursuant to the
automatic termination of a trust, discretionary account or
similar arrangement; and (d)&nbsp;that a person has the right to
</FONT>

<P align="center"><FONT size="2">I-39
</FONT>

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<DIV align="left">
<FONT size="2">transfer, or control the transfer of, the right
to receive income from, or control the disposition of such
income, or the right to receive or control the disposition of
the proceeds of such Company Common Stock;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;<I>&#147;business day&#148;</I> means
any day other than a day on which banks in New York are required
or authorized to be closed;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;<I>&#147;Cause for Termination&#148;</I>
means any reason related to the violation of policies, rules or
directions of any employer or its management, misconduct or
negligence in performing assigned responsibilities, failure to
meet performance goals or objectives or to fulfill customary
duties, conduct damaging to property or other interests, fraud,
misappropriation, dishonesty or abuse of alcohol or any
controlled substance, or similar basis related to performance or
character.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;<I>&#147;control&#148;</I> (including
the terms &#147;controlled by&#148; and &#147;under common
control with&#148;) means the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the
direction of the management or policies of a person, whether
through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;<I>&#147;material adverse
effect&#148;</I> means when used in connection with the Company
or any Company Subsidiary, or DHI or any DHI Subsidiary, as the
case may be, any change, effect or circumstance that is
materially adverse to the business, properties, assets,
operations, financial condition, liabilities or results of
operations of the Company or any Company Subsidiary, or DHI or
any DHI Subsidiary, as the case may be. <I>&#147;Material
Adverse Effect&#148;</I> means any change, effect or
circumstance that is materially adverse to the business,
properties, assets, operations, financial condition, liabilities
or results of operations of the Company and the Company
Subsidiaries, or DHI and the DHI Subsidiaries, as the case may
be, in each case taken as a whole, other than any such changes,
effects or circumstances: (i)&nbsp;set forth or contemplated by
the Company Disclosure Schedule or the DHI Disclosure Schedule,
as the case may be; (ii)&nbsp;set forth or described in the
Company SEC Reports or DHI SEC Reports, as the case may be; or
(iii)&nbsp;affecting the home construction industry generally;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;<I>&#147;person&#148;</I> means an
individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization, other entity or
group (as defined in Section&nbsp;13(d)(3) of the Exchange Act);
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(g)&nbsp;<I>&#147;subsidiary&#148;</I> or
&#147;subsidiaries&#148; of the Company, the Surviving
Corporation, DHI or any other person means any corporation,
partnership, joint venture, limited liability company, business
trust or other legal entity of which the Company, the Surviving
Corporation, DHI or such other person, as the case may be
(either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or
other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(h)&nbsp;<I>&#147;to the knowledge of the
Company&#148;</I> and <I>&#147;to the Company&#146;s
knowledge&#148;</I> means the actual knowledge of the
individuals set forth in <I>Schedule&nbsp;9.4(h)</I>after
inquiry of employees of the Company and the Company Subsidiaries
reasonably expected to have relevant knowledge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(i)&nbsp;<I>&#147;to the knowledge of the
DHI&#148;</I> and <I>&#147;to DHI&#146;s knowledge&#148;</I>
means the actual knowledge of the individuals set forth in
<I>Schedule&nbsp;9.4(i)</I> after inquiry of employees of DHI
and the DHI Subsidiaries reasonably expected to have relevant
knowledge.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(j)&nbsp;<I>&#147;trading day&#148;</I> means any
day on which the NYSE is open for the trading of securities.
</FONT>

<P align="left">
<FONT size="2">9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment.
</I>This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided,
however, that, after approval of the Merger by the stockholders
of the Company and DHI, no amendment may be made which by law
requires further approval by such stockholders without such
further approval. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
</FONT>

<P align="left">
<FONT size="2">9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Waiver.
</I>At any time prior to the Effective Time, any party hereto
may with respect to any other party hereto (a)&nbsp;extend the
time for the performance of any of the obligations or other
acts, (b)&nbsp;waive any
</FONT>

<P align="center"><FONT size="2">I-40
</FONT>

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<DIV align="left">
<FONT size="2">inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto, or waive compliance with any of the agreements
or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed
by the party or parties to be bound thereby.
</FONT>
</DIV>

<P align="left">
<FONT size="2">9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Headings.
</I>The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
</FONT>

<P align="left">
<FONT size="2">9.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Severability.
</I>If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.
</FONT>

<P align="left">
<FONT size="2">9.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Entire
Agreement. </I>This Agreement constitutes the entire agreement
and supersedes all prior agreements and undertakings (other than
the Confidentiality Letter), both written and oral, among the
parties, or any of them, with respect to the subject matter
hereof.
</FONT>

<P align="left">
<FONT size="2">9.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Assignment.
</I>This Agreement shall not be assigned by operation of law or
otherwise.
</FONT>

<P align="left">
<FONT size="2">9.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Parties in
Interest. </I>This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, including,
without limitation, by way of subrogation, other than
<I>Section&nbsp;6.9</I> (which is intended to be for the benefit
of the Indemnified Parties and may be enforced by such
Indemnified Parties).
</FONT>

<P align="left">
<FONT size="2">9.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Failure or
Indulgence Not Waiver; Remedies Cumulative. </I>No failure or
delay on the part of any party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a
waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available, except as otherwise
provided herein.
</FONT>

<P align="left">
<FONT size="2">9.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Governing
Law. </I>This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the
State of Delaware.
</FONT>

<P align="left">
<FONT size="2">9.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Counterparts.
</I>This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the
same agreement.
</FONT>

<P align="center">
<FONT size="2">[The Remainder of This Page Intentionally Left
Blank]
</FONT>

<P align="center"><FONT size="2">I-41
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IN WITNESS WHEREOF, DHI and the Company have
caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly
authorized.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">D.R. HORTON, INC.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="3%"></TD>
	<TD width="57%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">BY:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ DONALD R. HORTON
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Donald
	R. Horton
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chairman
	of the Board
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">SCHULER HOMES, INC.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="3%"></TD>
	<TD width="57%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">BY:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ JAMES K. SCHULER
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;James
	K. Schuler
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Co-Chairman,
	President and
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Chief
	Executive Officer
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">I-42
</FONT>

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<DIV align="right">
<B><FONT size="2">ANNEX II</FONT></B>
</DIV>

<DIV align="center">
<IMG src="d92411a3d9241186.gif" alt="(UBS WARBURG)">
</DIV>

<P align="right">
<FONT size="2">October&nbsp;22, 2001
</FONT>

<P align="left">
<FONT size="2">The Board of Directors
</FONT>

<DIV align="left">
<FONT size="2">Schuler Homes, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">400 Continental Boulevard
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Suite&nbsp;100
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">El Segundo, CA 90245
</FONT>
</DIV>

<P align="left">
<FONT size="2">Dear Members of the Board:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We understand that Schuler Homes, Inc., a
Delaware corporation (the &#147;Company&#148;), is considering a
transaction whereby the Company will merge with and into D.R.
Horton, Inc., a Delaware corporation (&#147;DHI&#148;) (the
&#147;Transaction&#148;) pursuant to the terms of the Agreement
and Plan of Merger, dated as of October&nbsp;22, 2001 (the
&#147;Merger Agreement&#148;). Pursuant to the terms of the
Merger Agreement, all of the issued and outstanding Class&nbsp;A
shares of the common stock of the Company, par value of
$0.001&nbsp;per share and all of the issued and outstanding
Class&nbsp;B shares of the common stock of the Company, par
value of $0.001&nbsp;per share (collectively, the &#147;Company
Common Stock&#148;), will be converted into the right to receive
for each share of Company Common Stock the sum of (x)&nbsp;$4.09
in cash (the &#147;Cash Consideration&#148;) and (y)&nbsp;.570
of a share of DHI common stock, par value $0.01&nbsp;per share
(the &#147;DHI Common Stock&#148;), calculated as of the date
hereof pursuant to the Merger Agreement (the &#147;Stock
Consideration&#148; and, together with the Cash Consideration,
the &#147;Consideration&#148;). Notwithstanding the foregoing,
each holder of Company Common Stock may elect to receive,
subject to the limitations of the Merger Agreement, the
Consideration paid 100% in cash or 100% in shares of DHI Common
Stock. The terms and conditions of the Transaction are more
fully set forth in the Merger Agreement. The Stock Consideration
is subject to adjustment pursuant to a formula set forth in the
Merger Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You have requested our opinion as to the
fairness, from a financial point of view, of the Consideration
to be received by the holders of the Company Common Stock
pursuant to the Transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">UBS Warburg LLC (&#147;UBS Warburg&#148;) has
acted as financial advisor to the Board of Directors of the
Company in connection with the Transaction and will receive a
fee upon the consummation thereof. UBS Warburg will also receive
a fee upon delivery of this opinion. In the past, UBS Warburg
and its predecessors have provided investment banking services
to the Company and DHI and received customary compensation for
the rendering of such services. In the ordinary course of
business, UBS Warburg, its successors and affiliates may trade
securities of the Company or DHI for their own accounts and,
accordingly, may at any time hold a long or short position in
such securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our opinion does not address the Company&#146;s
underlying business decision to effect the Transaction or
constitute a recommendation to any stockholder of the Company as
to how such stockholder should vote with respect to the
Transaction. At your request, we have contacted third parties to
solicit indications of interest in a possible transaction with
the Company and held discussions with certain of these parties
prior to the date hereof. At your direction, we have not been
asked to, nor do we, offer any opinion as to the material terms
of the Merger Agreement or the form of the Transaction. In
rendering this opinion, we have assumed, with your consent, that
the final executed form of the Merger Agreement does not differ
in any material respect from the draft that we have examined,
and that DHI and the Company will comply with all the material
terms of the Merger Agreement. We express no opinion as to what
the value of DHI Common Stock will be when issued pursuant to
the Transaction or the price at which DHI Common Stock will
trade or otherwise be transferable at or subsequent to the
Transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In arriving at our opinion, we have, among other
things: (i)&nbsp;reviewed certain publicly available business
and historical financial information relating to the Company and
DHI, (ii)&nbsp;reviewed certain
</FONT>

<P align="center">

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<DIV align="left">
<FONT size="2">internal financial information and other data
relating to the business and financial prospects of the Company,
including estimates and financial forecasts prepared by
management of the Company, that were provided to us by the
Company and not publicly available, (iii)&nbsp;reviewed certain
internal financial information and other data relating to the
business and financial prospects of DHI, including estimates and
financial forecasts prepared by the management of the Company
and DHI and not publicly available, (iv)&nbsp;conducted
discussions with members of the senior management of the Company
and DHI; (v)&nbsp;reviewed publicly available financial and
stock market data with respect to certain other companies in
lines of business we believe to be generally comparable to those
of DHI and the Company, (vi)&nbsp;compared the financial terms
of the Transaction with the publicly available financial terms
of certain other transactions which we believe to be generally
relevant, (vii)&nbsp;considered certain pro forma effects of the
Transaction on DHI&#146;s financial statements prepared by the
Company and DHI managements, (viii)&nbsp;reviewed drafts of the
Merger Agreement, and (ix)&nbsp;conducted such other financial
studies, analyses, and investigations, and considered such other
information as we deemed necessary or appropriate.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our review, at your direction,
we have not assumed any responsibility for independent
verification for any of the information reviewed by us for the
purpose of this opinion and have, with your consent, relied on
its being complete and accurate in all material respects. In
addition, at your direction, we have not made any independent
evaluation or appraisal of any of the assets or liabilities
(contingent or otherwise) of the Company or DHI, nor have we
been furnished with any such evaluation or appraisal. With
respect to the financial forecasts and estimates, we have
assumed, at your direction, that they have been reasonably
prepared on a basis reflecting the best currently available
estimates and judgments of the management of each company as to
the future performance of their respective companies. We have
also assumed, with your consent, that the Transaction will
qualify as a tax-free reorganization for U.S.&nbsp;federal
income tax purposes. We have also assumed that all governmental,
regulatory or other consents and approvals necessary for the
consummation of the Transaction will be obtained without any
material adverse effect on the Company and/or DHI and the
Transaction. Our opinion is necessarily based on economic,
monetary, market and other conditions as in effect on, and the
information made available to us as of, the date hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based upon and subject to the foregoing, it is
our opinion that, as of the date hereof, the Consideration to be
received by the holders of the Company Common Stock in the
Transaction is fair, from a financial point of view.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">Very truly yours,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">UBS WARBURG LLC
	</FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">/s/ JEFFREY A. RAICH
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">/s/ MATTHEW W. SPAIN
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Jeffrey A. Raich<BR>
	Managing Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Matthew W. Spain<BR>
	Director
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">2
</FONT>

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<DIV align="center">
<IMG src="d92411a3d9241188.gif" alt="(BANK OF AMERICA SECURITIES LOGO)">
</DIV>

<DIV align="right">
<B><FONT size="2">ANNEX&nbsp;III</FONT></B>
</DIV>


<P align="left">
<FONT size="2">Dated as of October&nbsp;22, 2001
</FONT>


<P align="left">
<FONT size="2">Board of Directors
</FONT>

<DIV align="left">
<FONT size="2">D.R. Horton, Inc.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">1901 Ascension Blvd.
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Arlington, TX 26006
</FONT>
</DIV>

<P align="left">
<FONT size="2">Members of the Board of Directors:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You have requested our opinion as to the fairness
from a financial point of view to D.R.&nbsp;Horton,&nbsp;Inc.
(the &#147;Purchaser&#148;) of the consideration proposed to be
paid by the Purchaser provided for in connection with the
proposed merger (the &#147;Merger&#148;) of Schuler Homes, Inc.
(the &#147;Company&#148;) with the Purchaser. Pursuant to the
terms of the Agreement and Plan of Merger, dated as of
October&nbsp;22, 2001, (the &#147;Agreement&#148;), between the
Company and the Purchaser, the Company will be merged into
Purchaser, and stockholders of the Company will receive for each
share of Class&nbsp;A common stock of the Company and
Class&nbsp;B common stock of the Company (together, the
&#147;Company Common Stock&#148;), held by them, other than
shares held in treasury of the Company and any share of the
Company held by the Purchaser or any direct or indirect
subsidiary of the Company or the Purchaser or any share of the
Company held by a holder who has properly exercised his or her
rights under Section&nbsp;262 of the Delaware General
Corporation Law, consideration equal to an amount calculated
pursuant to a formula contained in the Agreement. The terms and
conditions of the Merger are more fully set out in the Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of the opinion set forth herein, we
have:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;reviewed certain publicly available
	financial statements and other business and financial
	information of the Company and the Purchaser, respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;reviewed certain internal financial
	statements and other financial and operating data concerning the
	Company and the Purchaser, respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;analyzed certain financial forecasts
	prepared by the managements of the Company and the Purchaser,
	respectively;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iv)&nbsp;discussed the past and current
	operations, financial condition and prospects of the Company
	with senior executives of the Company and discussed the past and
	current operations, financial condition and prospects of the
	Purchaser with senior executives of the Purchaser;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(v)&nbsp;reviewed information and discussed with
	senior executives of the Purchaser and the Company information
	relating to certain strategic, financial and operational
	benefits anticipated from the Merger;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vi)&nbsp;reviewed the pro forma impact of the
	Merger on the Purchaser&#146;s earnings per share, cash flow,
	consolidated capitalization and financial ratios;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(vii)&nbsp;reviewed the reported prices and
	trading activity for the Company Common Stock and the common
	stock of the Purchaser (the &#147;Purchaser Common Stock&#148;);
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(viii)&nbsp;compared the financial performance of
	the Company and the prices and trading activity of the Company
	Common Stock with that of certain other publicly traded
	companies we deemed relevant;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ix)&nbsp;compared certain financial terms to
	financial terms, to the extent publicly available, of certain
	other business combination transactions we deemed relevant;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(x)&nbsp;participated in discussions and
	negotiations among representatives of the Company and the
	Purchaser and their financial and legal advisors;
	</FONT></TD>
</TR>

</TABLE>

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<DIV align="left">
Board of Directors
</DIV>

<DIV align="left">
D.R. Horton, Inc.
</DIV>


<DIV align="left">
Dated as of October 22, 2001
</DIV>


<DIV align="left">
Page&nbsp;2
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(xi)&nbsp;reviewed the Agreement and certain
	related documents;&nbsp;and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(xii)&nbsp;performed such other analyses and
	considered such other factors as we have deemed appropriate.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have assumed and relied upon, without
independent verification, the accuracy and completeness of the
financial and other information reviewed by us for the purposes
of this opinion. With respect to the financial forecasts,
including information relating to certain strategic, financial
and operational benefits anticipated from the Merger, we have
assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and good faith
judgments of the future financial performance of the Company and
the Purchaser. We have not made any independent valuation or
appraisal of the assets or liabilities of the Company, nor have
we been furnished with any such appraisals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You have informed us, and we have assumed, that
the Merger will be treated as a tax-free reorganization and/or
exchange, each pursuant to the Internal Revenue Code of 1986, as
amended. We express no opinion as to whether any alternative
transaction might be more favorable to the Purchaser.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have acted as financial advisor to the Board
of Directors of the Purchaser in connection with the Merger and
will receive a fee for our services, including fees, which are
contingent upon the consummation of the Merger and rendering
this opinion. In the past, Banc of America Securities LLC or its
affiliates have provided financial advisory and financing
services for the Purchaser and the Company and have received
fees for the rendering of these services. We have advised you
that BAS and its affiliates are engaged in a broad range of
securities activities and financial services. Bank of America,
N.A. is lead agent on the Company&#146;s unsecured revolving
credit facility. Bank of America,&nbsp;N.A. is lead agent on the
Purchaser&#146;s unsecured revolving credit facility. Bank of
America,&nbsp;N.A. may provide additional credit to the
Purchaser to consummate the Merger. In the ordinary course of
our businesses, we and our affiliates may actively trade the
debt and equity securities of the Company and the Purchaser for
our own account or for the accounts of customers, and,
accordingly, we or our affiliates may at any time hold long or
short positions in such securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is understood that this letter is for the
benefit and use of the Board of Directors of the Purchaser in
connection with and for the purposes of its evaluation of the
Merger. This opinion may not be disclosed, referred to, or
communicated (in whole or in part) to any third party for any
purpose whatsoever except with our prior written consent in each
instance. However, this opinion may be included in its entirety
in any filing made by the Purchaser in respect of the Merger
with the Securities and Exchange Commission, so long as this
opinion is reproduced in such filing in full and any description
of or reference to us or summary of this opinion and the related
analysis in such filing is in a form acceptable to us and our
counsel. In furnishing this opinion, we do not admit that we are
experts within the meaning of the term &#147;experts&#148; as
used in the Securities Act of 1933, as amended (the
&#147;Securities Act&#148;) and the rules and regulations
promulgated thereunder, nor do we admit that this opinion
constitutes a report or valuation within the meaning of
Section&nbsp;11 of the Securities Act. Our opinion is
necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the
date hereof. It should be understood that subsequent
developments may affect this opinion and we do not have any
obligation to update, revise or reaffirm this opinion. This
opinion does not in any manner address the prices at which the
Purchaser Common Stock will trade following consummation of the
Merger. In addition, BAS expresses no opinion or recommendation
as to how the stockholders of the Purchaser and the Company
should vote at the stockholders&#146; meetings held in
connection with the Merger.
</FONT>

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<DIV align="left">
Board of Directors
</DIV>

<DIV align="left">
D.R. Horton, Inc.
</DIV>


<DIV align="left">
Dated as of October 22, 2001
</DIV>


<DIV align="left">
Page&nbsp;3
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based upon and subject to the foregoing,
including the various assumptions and limitations set forth
herein, we are of the opinion on the date hereof that the
consideration to be paid by the Purchaser in the proposed Merger
is fair from a financial point of view to the Purchaser.
</FONT>

<P align="left">
<FONT size="2">Very truly yours,
</FONT>

<P align="left">
<FONT size="2">/S/&nbsp;BANC OF AMERICA SECURITIES LLC
</FONT>

<DIV>&nbsp;</DIV>

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<P align="right">
<B><FONT size="2">ANNEX IV</FONT></B>

<!-- link1 "DELAWARE GENERAL CORPORATION LAW SECTION 262 APPRAISAL RIGHTS" -->
<DIV align="left"><A NAME="107"></A></DIV>

<P align="center">
<B><FONT size="2">DELAWARE GENERAL CORPORATION LAW</FONT></B>

<DIV align="center">
<B><FONT size="2">SECTION&nbsp;262 APPRAISAL RIGHTS</FONT></B>
</DIV>

<P align="left">
<FONT size="2">(a)&nbsp;Any stockholder of a corporation of this
State who holds shares of stock on the date of the making of a
demand pursuant to subsection&nbsp;(d)&nbsp;of this section with
respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who
has otherwise complied with subsection&nbsp;(d)&nbsp;of this
section and who has neither voted in favor of the merger or
consolidation nor consented thereto in writing pursuant to
&#167;228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of the stockholder&#146;s
shares of stock under the circumstances described in subsections
(b)&nbsp;and (c)&nbsp;of this section. As used in this section,
the word &#147;stockholder&#148; means a holder of record of
stock in a stock corporation and also a member of record of a
nonstock corporation; the words &#147;stock&#148; and
&#147;share&#148; mean and include what is ordinarily meant by
those words and also membership or membership interest of a
member of a nonstock corporation; and the words &#147;depository
receipt&#148; mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or
fractions thereof, solely of stock of a corporation, which stock
is deposited with the depository.
</FONT>

<P align="left">
<FONT size="2">(b)&nbsp;Appraisal rights shall be available for
the shares of any class or series of stock of a constituent
corporation in a merger or consolidation to be effected pursuant
to &#167;251 (other than a merger effected pursuant to
&#167;251(g) of this title), &#167;252, &#167;254, &#167;257,
&#167;258, &#167;263 or &#167;264 of this title:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;Provided, however, that no appraisal
rights under this section shall be available for the shares of
any class or series of stock, which stock, or depository
receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to
vote at the meeting of stockholders to act upon the agreement of
merger or consolidation, were either (i)&nbsp;listed on a
national securities exchange or designated as a national market
system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or
(ii)&nbsp;held of record by more than 2,000&nbsp;holders; and
further provided that no appraisal rights shall be available for
any shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
subsection&nbsp;(f)&nbsp;of &#167;251 of this title.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;Notwithstanding paragraph (1)&nbsp;of
this subsection, appraisal rights under this section shall be
available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to
&#167;&#167;251, 252, 254, 257, 258, 263 and 264 of this title
to accept for such stock anything except:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">a.&nbsp;Shares of stock of the corporation
	surviving or resulting from such merger or consolidation, or
	depository receipts in respect thereof;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">b.&nbsp;Shares of stock of any other corporation,
	or depository receipts in respect thereof, which shares of stock
	(or depository receipts in respect thereof) or depository
	receipts at the effective date of the merger or consolidation
	will be either listed on a national securities exchange or
	designated as a national market system security on an
	interdealer quotation system by the National Association of
	Securities Dealers, Inc. or held of record by more than
	2,000&nbsp;holders;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">c.&nbsp;Cash in lieu of fractional shares or
	fractional depository receipts described in the foregoing
	subparagraphs a. and b. of this paragraph;&nbsp;or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">d.&nbsp;Any combination of the shares of stock,
	depository receipts and cash in lieu of fractional shares or
	fractional depository receipts described in the foregoing
	subparagraphs&nbsp;a., b. and c. of this paragraph.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;In the event all of the stock of a
subsidiary Delaware corporation party to a merger effected under
&#167;253 of this title is not owned by the parent corporation
immediately prior to the merger, appraisal rights shall be
available for the shares of the subsidiary Delaware corporation.
</FONT>

<P align="center">

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<P align="left">
<FONT size="2">(c)&nbsp;Any corporation may provide in its
certificate of incorporation that appraisal rights under this
section shall be available for the shares of any class or series
of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the
certificate of incorporation contains such a provision, the
procedures of this section, including those set forth in
subsections (d)&nbsp;and (e)&nbsp;of this section, shall apply
as nearly as is practicable.
</FONT>

<P align="left">
<FONT size="2">(d)&nbsp;Appraisal rights shall be perfected as
follows:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;If a proposed merger or consolidation
for which appraisal rights are provided under this section is to
be submitted for approval at a meeting of stockholders, the
corporation, not less than 20&nbsp;days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection&nbsp;(b)&nbsp;or
(c)&nbsp;hereof that appraisal rights are available for any or
all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder&#146;s
shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for
appraisal of such stockholder&#146;s shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholder&#146;s
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10&nbsp;days after the effective date of
such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become
effective;&nbsp;or
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;If the merger or consolidation was
approved pursuant to &#167;228 or &#167;253 of this title, then,
either a constituent corporation before the effective date of
the merger or consolidation, or the surviving or resulting
corporation within ten days thereafter, shall notify each of the
holders of any class or series of stock of such constituent
corporation who are entitled to appraisal rights of the approval
of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock
of such constituent corporation, and shall include in such
notice a copy of this section. Such notice may, and, if given on
or after the effective date of the merger or consolidation,
shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20&nbsp;days after the date of
mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holder&#146;s
shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
holder&#146;s shares. If such notice did not notify stockholders
of the effective date of the merger or consolidation, either
(i)&nbsp;each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of
such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or
(ii)&nbsp;the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10&nbsp;days
after such effective date; provided, however, that if such
second notice is sent more than 20&nbsp;days following the
sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and
who has demanded appraisal of such holder&#146;s shares in
accordance with this subsection. An affidavit of the secretary
or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date
that shall be not more than 10&nbsp;days prior to the date the
notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
</FONT>

<P align="left">
<FONT size="2">(e)&nbsp;Within 120&nbsp;days after the effective
date of the merger or consolidation, the surviving or resulting
corporation or any stockholder who has complied with subsections
(a)&nbsp;and (d)&nbsp;hereof and who is
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<DIV align="left">
<FONT size="2">otherwise entitled to appraisal rights, may file
a petition in the Court of Chancery demanding a determination of
the value of the stock of all such stockholders. Notwithstanding
the foregoing, at any time within 60&nbsp;days after the
effective date of the merger or consolidation, any stockholder
shall have the right to withdraw such stockholder&#146;s demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120&nbsp;days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a)&nbsp;and
(d)&nbsp;hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10&nbsp;days after such stockholder&#146;s
written request for such a statement is received by the
surviving or resulting corporation or within 10&nbsp;days after
expiration of the period for delivery of demands for appraisal
under subsection&nbsp;(d)&nbsp;hereof, whichever is later.
</FONT>
</DIV>

<P align="left">
<FONT size="2">(f)&nbsp;Upon the filing of any such petition by
a stockholder, service of a copy thereof shall be made upon the
surviving or resulting corporation, which shall within
20&nbsp;days after such service file in the office of the
Register in Chancery in which the petition was filed a duly
verified list containing the names and addresses of all
stockholders who have demanded payment for their shares and with
whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the
petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly
verified list. The Register in Chancery, if so ordered by the
Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown
on the list at the addresses therein stated. Such notice shall
also be given by 1 or more publications at least 1&nbsp;week
before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or
such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the
Court, and the costs thereof shall be borne by the surviving or
resulting corporation.
</FONT>

<P align="left">
<FONT size="2">(g)&nbsp;At the hearing on such petition, the
Court shall determine the stockholders who have complied with
this section and who have become entitled to appraisal rights.
The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by
certificates to submit their certificates of stock to the
Register in Chancery for notation thereon of the pendency of the
appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to
such stockholder.
</FONT>

<P align="left">
<FONT size="2">(h)&nbsp;After determining the stockholders
entitled to an appraisal, the Court shall appraise the shares,
determining their fair value exclusive of any element of value
arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account
all relevant factors. In determining the fair rate of interest,
the Court may consider all relevant factors, including the rate
of interest which the surviving or resulting corporation would
have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the
appraisal proceeding, the Court may, in its discretion, permit
discovery or other pretrial proceedings and may proceed to trial
upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting
corporation pursuant to subsection&nbsp;(f) of this section and
who has submitted such stockholder&#146;s certificates of stock
to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
</FONT>

<P align="left">
<FONT size="2">(i)&nbsp;The Court shall direct the payment of
the fair value of the shares, together with interest, if any, by
the surviving or resulting corporation to the stockholders
entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock
forthwith, and the case of holders of shares represented by
certificates upon the surrender to the corporation of the
certificates representing such stock. The Court&#146;s decree
may be
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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<DIV align="left">
<FONT size="2">enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting
corporation be a corporation of this State or of any state.
</FONT>
</DIV>

<P align="left">
<FONT size="2">(j)&nbsp;The costs of the proceeding may be
determined by the Court and taxed upon the parties as the Court
deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable
attorney&#146;s fees and the fees and expenses of experts, to be
charged pro rata against the value of all the shares entitled to
an appraisal.
</FONT>

<P align="left">
<FONT size="2">(k)&nbsp;From and after the effective date of the
merger or consolidation, no stockholder who has demanded
appraisal rights as provided in subsection&nbsp;(d)&nbsp;of this
section shall be entitled to vote such stock for any purpose or
to receive payment of dividends or other distributions on the
stock (except dividends or other distributions payable to
stockholders of record at a date which is prior to the effective
date of the merger or consolidation); provided, however, that if
no petition for an appraisal shall be filed within the time
provided in subsection&nbsp;(e)&nbsp;of this section, or if such
stockholder shall deliver to the surviving or resulting
corporation a written withdrawal of such stockholder&#146;s
demand for an appraisal and an acceptance of the merger or
consolidation, either within 60&nbsp;days after the effective
date of the merger or consolidation as provided in
subsection&nbsp;(e)&nbsp;of this section or thereafter with the
written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the
foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms
as the Court deems just.
</FONT>

<P align="left">
<FONT size="2">(l)&nbsp;The shares of the surviving or resulting
corporation to which the shares of such objecting stockholders
would have been converted had they assented to the merger or
consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of Directors and Officers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The registrant&#146;s certificate of
incorporation provides that the registrant shall, to the full
extent permitted by the Delaware General Corporation Law or
other applicable laws presently or hereafter in effect,
indemnify each person who is or was or had agreed to become a
director or officer of the registrant, or each such person who
is or was serving or who had agreed to serve at the written
request of the board of directors or an officer of the
registrant as an employee or agent of the registrant or as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, in any
such case owned or controlled by the registrant, including the
heirs, executors, administrators or estate of such person, and
eliminates the personal liability of its directors to the full
extent permitted by the Delaware General Corporation Law or
other applicable laws presently or hereafter in effect. The
registrant has entered into an indemnification agreement with
each of its directors and executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;145 of the Delaware General
Corporation Law permits a corporation to indemnify its directors
and officers against expenses (including attorney&#146;s fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit
or proceeding brought by third parties, if such directors or
officers acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right
of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors and
officers in connection with the defense or settlement of an
action or suit, and only with respect to a matter as to which
they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification
shall be made if such person shall have been adjudged liable for
negligence or misconduct in the performance of his respective
duties to the corporation, although the court in which the
action or suit was brought may determine upon application that
the defendant officers or directors are fairly and reasonably
entitled to indemnity for such expenses despite such
adjudication of liability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;102(b)(7) of the Delaware General
Corporation Law provides that a corporation may eliminate or
limit the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provisions shall not
eliminate or limit the liability of a director (1)&nbsp;for any
breach of the director&#146;s duty of loyalty to the corporation
or its stockholders, (2)&nbsp;for acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law, (3)&nbsp;under section&nbsp;174 of the
Delaware General Corporation Law, or (4)&nbsp;for any
transaction from which the director derived an improper personal
benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring before
the date when such provision becomes effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The registrant also has obtained directors and
officers liability insurance that provides insurance coverage
for certain liabilities which may be incurred by the
registrant&#146;s directors and officers in their capacity
as&nbsp;such.
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

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<P align="left">
<B><FONT size="2">Item&nbsp;21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits</I></FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement and Plan of Merger dated as of
	October&nbsp;22, 2001, as amended on November&nbsp;8, 2001, by
	and between the Registrant and Schuler (conformed as amended and
	included as Annex&nbsp;I to the Joint Proxy Statement/
	Prospectus contained in this Registration Statement). The
	Registrant agrees to furnish supplementally a copy of omitted
	schedules to the SEC upon request.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Certificate of
	Incorporation, as amended, of the Registrant(1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Bylaws of the Registrant(2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">See Exhibits&nbsp;3.1 and 3.2
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of June&nbsp;9, 1997, among
	the Registrant, the guarantors named therein and American Stock
	Transfer&nbsp;&#38; Trust Company, as Trustee(3)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	June&nbsp;9, 1997, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(4)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	September&nbsp;30, 1997, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(5)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	April&nbsp;17, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(6)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fourth Supplemental Indenture, dated as of
	April&nbsp;20, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(7)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fifth Supplemental Indenture, dated as of
	August&nbsp;31, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(8)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Sixth Supplemental Indenture, dated as of
	February&nbsp;4, 1999, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(9)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Seventh Supplemental Indenture, dated as of
	August&nbsp;31, 1999, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(10)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Eighth Supplemental Indenture, dated as of
	March&nbsp;21, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(11)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Ninth Supplemental Indenture, dated as of
	March&nbsp;31, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(12)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tenth Supplemental Indenture, dated as of
	June&nbsp;5, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(13)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Eleventh Supplemental Indenture, dated as of
	May&nbsp;11, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(14)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Twelfth Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(15)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Thirteenth Supplemental Indenture, dated as of
	August&nbsp;15, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(16)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of September&nbsp;11, 2000,
	among the Registrant, the guarantors named therein and American
	Stock Transfer&nbsp;&#38; Trust Company, as Trustee(17)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	September&nbsp;11, 2000, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(18)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	March&nbsp;12, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(19)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(20)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of April&nbsp;15, 1996,
	between Continental and First Union National Bank, as Trustee(21)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	April&nbsp;20, 1998, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(22)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	August&nbsp;31, 1998, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(23)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	August&nbsp;31, 1999, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(24)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fourth Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(25)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*5</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Gibson, Dunn&nbsp;&#38; Crutcher LLP
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*8</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tax opinion of Gibson, Dunn&nbsp;&#38; Crutcher
	LLP, Dallas, Texas
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*8</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tax opinion of Gibson, Dunn&nbsp;&#38; Crutcher
	LLP, Los&nbsp;Angeles, California
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Master Loan and
	Inter-Creditor Agreement dated as of July&nbsp;1, 1999, among
	D.R. Horton, Inc., as Borrower; NationsBank, N.A., Fleet
	National Bank, Bank United, Comerica Bank, Credit Lyonnais New
	York Branch, Societe Generale, Southwest Agency, The First
	National Bank of Chicago, PNC Bank, National Association,
	Amsouth Bank, Bank One, Arizona, NA, First American Bank Texas,
	SSB, Harris Trust and Savings Bank, Sanwa Bank California,
	Norwest Bank Arizona, National Association, Wachovia Mortgage
	Company and Summit Bank, as Banks; and NationsBank, N.A., as
	Administrative Agent(26)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Credit Agreement dated as of August&nbsp;13,
	1999, among CH&nbsp;Mortgage Company&nbsp;I, Ltd., as Borrower;
	U.S.&nbsp;Bank National Association, Residential Funding
	Corporation, Hibernia Bank, First Union National Bank, and
	National City Bank of Kentucky, as Lenders and U.S.&nbsp;Bank
	National Association, as Agent](27)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Voting Agreement, dated as of October&nbsp;22,
	2001, between the Registrant and certain record and beneficial
	shareholders of Schuler
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Termination Agreement and Mutual Release, dated
	as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, among Schuler and
	the Class&nbsp;A and Class&nbsp;B Schuler parties(as defined
	therein)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Confidentiality and Noncompetition Agreement,
	dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, between
	James K. Schuler and the Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Confidentiality and Noncompetition Agreement,
	dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, between
	Eugene S. Rosenfeld and the Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement, dated as of
	October&nbsp;22, 2001, between Craig A. Manchester and the
	Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement, dated as of
	October&nbsp;22, 2001, between James K. Schuler and the
	Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*12</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Statement regarding computation of ratio of
	earnings to fixed charges
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**15</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Letter re: Unaudited Interim Financial Information
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Ernst&nbsp;&#38; Young LLP,
	Fort&nbsp;Worth, Texas
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Ernst&nbsp;&#38; Young LLP,
	Los&nbsp;Angeles, California
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Gibson, Dunn&nbsp;&#38; Crutcher LLP,
	Dallas, Texas (included in Exhibits&nbsp;5.1 and 8.1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Gibson, Dunn&nbsp;&#38; Crutcher LLP,
	Los&nbsp;Angeles, California (included in Exhibit&nbsp;8.2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*24</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Powers of Attorney (included in Part&nbsp;II of
	the Registration Statement)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of UBS Warburg LLC
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Banc of America Securities LLC
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of James K. Schuler
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of the Registrant&#146;s Proxy Card
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Schuler Proxy Card
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Election Form and Letter of Transmittal
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Previously filed
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;
<FONT size="2">** Filed herewith
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.2
	to the Registrant&#146;s registration statement
	(No.&nbsp;333-76175) on Form&nbsp;S-3, filed with the SEC on
	April&nbsp;13, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;3.1
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the fiscal quarter ended December&nbsp;31, 1998, filed with the
	SEC on February&nbsp;16, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-3 (No.&nbsp;333-27521), filed with the
	SEC on May&nbsp;21, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Form&nbsp;8-K/ A dated June&nbsp;6,
	1997, filed with the SEC on June&nbsp;9, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.4
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1997, filed with the SEC on
	December&nbsp;8, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.3
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.4
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.7
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	year ended September&nbsp;30, 1998, filed with the SEC on
	December&nbsp;10, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, dated
	February&nbsp;2, 1999, filed with the SEC on February&nbsp;2,
	1999.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.9
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(11)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, filed
	with the SEC on March&nbsp;17, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(12)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 2000, filed with the SEC on
	May&nbsp;12, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(13)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, filed
	with the SEC on June&nbsp;6, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(14)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on May&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(15)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(16)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(17)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on September&nbsp;11, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(18)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(b) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on September&nbsp;11, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(19)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on March&nbsp;8, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(20)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.2
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(21)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Annual Report of Continental Homes Holding Corp. on
	Form&nbsp;10-K for the year ended May&nbsp;31, 1996, filed with
	the SEC on August&nbsp;23, 1996. The SEC file number for
	Continental is 1-10700.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(22)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(23)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.10
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	year ended September&nbsp;30, 1998, filed with the SEC on
	December&nbsp;10, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(24)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.13
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(25)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.7
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(26)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;10.21
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999 filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(27)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;10.22
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Item&nbsp;22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Undertakings</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The undersigned registrant hereby
undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;To file, during any period in which
	offers or sales are being made, a post-effective amendment to
	this Registration Statement:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(i)&nbsp;To include any prospectus required by
	section&nbsp;10(a)(3) of the Securities Act of 1933;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(ii)&nbsp;To reflect in the prospectus any facts
	or events arising after the effective date of the Registration
	Statement (or the most recent post-effective amendment thereof)
	which, individually or in the aggregate, represent a fundamental
	change in the information set forth in the registration
	statement. Notwithstanding the foregoing, any increase or
	decrease in volume of securities offered (if the total dollar
	value of securities offered would not exceed that which was
	registered) and any deviation from the low or high end of the
	estimated maximum offering range may be reflected in the form of
	prospectus filed with the Commission pursuant to
	Rule&nbsp;424(b) if, in the aggregate, the changes in volume and
	price represent no more than a 20% change in the maximum
	aggregate offering price set forth in the &#147;Calculation of
	Registration Fee&#148; table in the effective Registration
	Statement;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(iii)&nbsp;To include any material information
	with respect to the plan of distribution not previously
	disclosed in the Registration Statement or any material change
	to such information in the Registration Statement.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;That, for the purpose of determining any
	liability under the Securities Act of 1933, each such
	post-effective amendment shall be deemed to be a new
	Registration Statement relating to the securities offered
	therein, and the offering of such securities at that time shall
	be deemed to be the initial bona fide offering thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;To remove from registration by means of
	a post-effective amendment any of the securities being
	registered which remain unsold at the termination of the
	offering.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The undersigned registrant hereby
undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;That, for purposes of determining any
	liability under the Securities Act of 1933, each filing of the
	registrant&#146;s annual report pursuant to Section&nbsp;13(a)
	or 15(d) of the Securities Exchange Act of 1934 that is
	incorporated by reference in the registration statement shall be
	deemed to be a new registration statement relating to the
	securities offered therein, and the offering of such securities
	at that time shall be deemed to be the initial bona fide
	offering thereof.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;That prior to any public reoffering of
	the securities registered hereunder through use of a prospectus
	which is a part of this registration statement, by any person or
	party who is deemed to be an underwriter within the meaning of
	Rule&nbsp;145(c), the issuer undertakes that such reoffering
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">prospectus will contain the information called
	for by the applicable registration form with respect to
	reofferings by persons who may be deemed underwriters, in
	addition to the information called for by the other Items of the
	applicable form.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;That every prospectus (i)&nbsp;that is
	filed pursuant to paragraph&nbsp;(2) immediately preceding, or
	(ii)&nbsp;that purports to meet the requirements of
	Section&nbsp;10(a)(3) of the Act and is used in connection with
	an offering of securities subject to Rule&nbsp;415, will be
	filed as a part of an amendment to the registration statement
	and will not be used until such amendment is effective, and
	that, for purposes of determining any liability under the
	Securities Act of 1933, each such post-effective amendment shall
	be deemed to be a new registration statement relating to the
	securities offered therein, and the offering of such securities
	at that time shall be deemed to be the initial bona fide
	offering thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The undersigned registrant hereby
undertakes to respond to requests for information that is
incorporated by reference into the prospectus pursuant to
Items&nbsp;4, 10(b), 11, or 13 of this Form, within one business
day of receipt of such request, and to send the incorporated
documents by first class mail to other equally prompt means.
This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;The undersigned registrant hereby
undertakes to supply by means of a post-effective amendment all
information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Insofar as indemnification for
liabilities under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the provisions discussed in Item&nbsp;20 above, or
otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of
1933 and is, therefor, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="108"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this Amendment
No.&nbsp;3 to its registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Arlington, State of Texas, on January&nbsp;16, 2002.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">D.R. HORTON, INC.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="2%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="center">
	<FONT size="2">/s/ DONALD R. HORTON
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Donald R. Horton
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Chairman of the Board</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this Amendment No.&nbsp;3 to this Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">/s/ DONALD R. HORTON<BR>
	<HR size="1" noshade>Donald R. Horton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chairman of the Board<BR>
	(Principal Executive Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">/s/ DONALD J. TOMNITZ<BR>
	<HR size="1" noshade>Donald J. Tomnitz
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Vice Chairman of the Board,<BR>
	President, Chief Executive Officer<BR>
	and Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">/s/ SAMUEL R. FULLER<BR>
	<HR size="1" noshade>Samuel R. Fuller
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Executive Vice President,<BR>
	Treasurer, Chief Financial Officer<BR>
	and Director<BR>
	(Principal Accounting and Financial Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Bradley S. Anderson
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">/s/ RICHARD BECKWITT<BR>
	<HR size="1" noshade>Richard Beckwitt
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Richard I. Galland
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Richard L. Horton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Terrill J. Horton
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-7
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Francine I. Neff
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">*<BR>
	<HR size="1" noshade>Scott J. Stone
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">January&nbsp;16, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">*By:
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">/s/ DONALD R. HORTON<BR>
	<HR size="1" noshade>Donald R. Horton<BR>
	 <I>Attorney-in-Fact**</I>
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" valign="top">
	<FONT size="2">**By authority of Power of Attorney filed with
	this Registration Statement
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-8
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Agreement and Plan of Merger dated as of
	October&nbsp;22, 2001, as amended on November&nbsp;8, 2001, by
	and between the Registrant and Schuler (conformed as amended and
	included as Annex&nbsp;I to the Joint Proxy Statement/
	Prospectus contained in this Registration Statement). The
	Registrant agrees to furnish supplementally a copy of omitted
	schedules to the SEC upon request.
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Certificate of
	Incorporation, as amended, of the Registrant(1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Bylaws of the Registrant(2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">See Exhibits&nbsp;3.1 and 3.2
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of June&nbsp;9, 1997, among
	the Registrant, the guarantors named therein and American Stock
	Transfer&nbsp;&#38; Trust Company, as Trustee(3)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	June&nbsp;9, 1997, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(4)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	September&nbsp;30, 1997, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(5)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	April&nbsp;17, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(6)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fourth Supplemental Indenture, dated as of
	April&nbsp;20, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(7)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fifth Supplemental Indenture, dated as of
	August&nbsp;31, 1998, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(8)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Sixth Supplemental Indenture, dated as of
	February&nbsp;4, 1999, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(9)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.9</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Seventh Supplemental Indenture, dated as of
	August&nbsp;31, 1999, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(10)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.10</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Eighth Supplemental Indenture, dated as of
	March&nbsp;21, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(11)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.11</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Ninth Supplemental Indenture, dated as of
	March&nbsp;31, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(12)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.12</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tenth Supplemental Indenture, dated as of
	June&nbsp;5, 2000, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(13)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.13</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Eleventh Supplemental Indenture, dated as of
	May&nbsp;11, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(14)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.14</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Twelfth Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(15)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Thirteenth Supplemental Indenture, dated as of
	August&nbsp;15, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(16)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of September&nbsp;11, 2000,
	among the Registrant, the guarantors named therein and American
	Stock Transfer&nbsp;&#38; Trust Company, as Trustee(17)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	September&nbsp;11, 2000, among the Registrant, the guarantors
	named therein and American Stock Transfer&nbsp;&#38; Trust
	Company, as Trustee(18)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	March&nbsp;12, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(19)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and American Stock Transfer&nbsp;&#38; Trust Company, as
	Trustee(20)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Indenture, dated as of April&nbsp;15, 1996,
	between Continental and First Union National Bank, as Trustee(21)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">First Supplemental Indenture, dated as of
	April&nbsp;20, 1998, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(22)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Second Supplemental Indenture, dated as of
	August&nbsp;31, 1998, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(23)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Third Supplemental Indenture, dated as of
	August&nbsp;31, 1999, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(24)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Fourth Supplemental Indenture, dated as of
	May&nbsp;21, 2001, among the Registrant, the guarantors named
	therein and First Union National Bank, as Trustee(25)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*5</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Gibson, Dunn&nbsp;&#38; Crutcher LLP
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*8</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tax opinion of Gibson, Dunn&nbsp;&#38; Crutcher
	LLP, Dallas, Texas
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*8</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Tax opinion of Gibson, Dunn&nbsp;&#38; Crutcher
	LLP, Los&nbsp;Angeles, California
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Amended and Restated Master Loan and
	Inter-Creditor Agreement dated as of July&nbsp;1, 1999, among
	D.R. Horton, Inc., as Borrower; NationsBank, N.A., Fleet
	National Bank, Bank United, Comerica Bank, Credit Lyonnais New
	York Branch, Societe Generale, Southwest Agency, The First
	National Bank of Chicago, PNC Bank, National Association,
	Amsouth Bank, Bank One, Arizona, NA, First American Bank Texas,
	SSB, Harris Trust and Savings Bank, Sanwa Bank California,
	Norwest Bank Arizona, National Association, Wachovia Mortgage
	Company and Summit Bank, as Banks; and NationsBank, N.A., as
	Administrative Agent(26)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Credit Agreement dated as of August&nbsp;13,
	1999, among CH&nbsp;Mortgage Company&nbsp;I, Ltd., as Borrower;
	U.S.&nbsp;Bank National Association, Residential Funding
	Corporation, Hibernia Bank, First Union National Bank, and
	National City Bank of Kentucky, as Lenders and U.S.&nbsp;Bank
	National Association, as Agent](27)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Voting Agreement, dated as of October&nbsp;22,
	2001, between the Registrant and certain record and beneficial
	shareholders of Schuler
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Termination Agreement and Mutual Release, dated
	as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, among Schuler and
	the Class&nbsp;A and Class&nbsp;B Schuler parties(as defined
	therein)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Confidentiality and Noncompetition Agreement,
	dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, between
	James K. Schuler and the Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Confidentiality and Noncompetition Agreement,
	dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2002, between
	Eugene S. Rosenfeld and the Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement, dated as of
	October&nbsp;22, 2001, between Craig A. Manchester and the
	Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*10</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Employment Agreement, dated as of
	October&nbsp;22, 2001, between James K. Schuler and the
	Registrant
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*12</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Statement regarding computation of ratio of
	earnings to fixed charges
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**15</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Letter re: Unaudited Interim Financial Information
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Ernst&nbsp;&#38; Young LLP,
	Fort&nbsp;Worth, Texas
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">**23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Ernst&nbsp;&#38; Young LLP,
	Los&nbsp;Angeles, California
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Gibson, Dunn&nbsp;&#38; Crutcher LLP,
	Dallas, Texas (included in Exhibits&nbsp;5.1 and 8.1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*23</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Gibson, Dunn&nbsp;&#38; Crutcher LLP,
	Los&nbsp;Angeles, California (included in Exhibit&nbsp;8.2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*24</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Powers of Attorney (included in Part&nbsp;II of
	the Registration Statement)
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of UBS Warburg LLC
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Banc of America Securities LLC
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of James K. Schuler
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of the Registrant&#146;s Proxy Card
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Schuler Proxy Card
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">*99</FONT></TD>
	<TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Election Form and Letter of Transmittal
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="2%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Previously filed
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">**&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Filed herewith
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.2
	to the Registrant&#146;s registration statement
	(No.&nbsp;333-76175) on Form&nbsp;S-3, filed with the SEC on
	April&nbsp;13, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;3.1
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the fiscal quarter ended December&nbsp;31, 1998, filed with the
	SEC on February&nbsp;16, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Registration
	Statement on Form&nbsp;S-3 (No.&nbsp;333-27521), filed with the
	SEC on May&nbsp;21, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Form&nbsp;8-K/ A dated June&nbsp;6,
	1997, filed with the SEC on June&nbsp;9, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.4
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1997, filed with the SEC on
	December&nbsp;8, 1997.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.3
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.4
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.7
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	year ended September&nbsp;30, 1998, filed with the SEC on
	December&nbsp;10, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, dated
	February&nbsp;2, 1999, filed with the SEC on February&nbsp;2,
	1999.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.9
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(11)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, filed
	with the SEC on March&nbsp;17, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(12)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 2000, filed with the SEC on
	May&nbsp;12, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(13)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Registrant&#146;s Current Report on Form&nbsp;8-K, filed
	with the SEC on June&nbsp;6, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(14)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on May&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(15)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(16)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(17)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on September&nbsp;11, 2000.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(18)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(b) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on September&nbsp;11, 2000.
	</FONT></TD>
</TR>

</TABLE>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(19)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from
	Exhibit&nbsp;4.1(a) to the Registrant&#146;s Current Report on
	Form&nbsp;8-K, filed with the SEC on March&nbsp;8, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(20)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.2
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(21)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.1
	to the Annual Report of Continental Homes Holding Corp. on
	Form&nbsp;10-K for the year ended May&nbsp;31, 1996, filed with
	the SEC on August&nbsp;23, 1996. The SEC file number for
	Continental is 1-10700.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(22)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.5
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q for
	the quarter ended March&nbsp;31, 1998, filed with the SEC on
	May&nbsp;14, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(23)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.10
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	year ended September&nbsp;30, 1998, filed with the SEC on
	December&nbsp;10, 1998.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(24)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.13
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(25)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;4.7
	to the Registrant&#146;s Quarterly Report on Form&nbsp;10-Q,
	filed with the SEC on August&nbsp;14, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(26)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;10.21
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999 filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(27)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Incorporated by reference from Exhibit&nbsp;10.22
	to the Registrant&#146;s Annual Report on Form&nbsp;10-K for the
	fiscal year ended September&nbsp;30, 1999, filed with the SEC on
	December&nbsp;10, 1999.
	</FONT></TD>
</TR>

</TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15.1
<SEQUENCE>3
<FILENAME>d92411a3ex15-1.txt
<DESCRIPTION>EX-15.1 LETTER - UNAUDITED INTERIM FINANCIAL INFO
<TEXT>
<PAGE>
                                                                    EXHIBIT 15.1


The Board of Directors and Stockholders
Schuler Homes, Inc.

We are aware of the incorporation by reference in the Joint Proxy Statement of
D.R. Horton, Inc. that is made a part of Amendment No. 3 to the Registration
Statement (Form S-4 No. 333-73888) of D.R. Horton, Inc. for the registration of
26,526,835 shares of its common stock of our reports dated July 25, 2001 and
October 24, 2001 relating to the unaudited condensed consolidated interim
financial statements of Schuler Homes, Inc. that are included in its Forms 10-Q
for the quarters ended June 30, 2001 and September 30, 2001.



                                             /s/ ERNST & YOUNG LLP

Los Angeles, California
January 10, 2002



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>d92411a3ex23-1.txt
<DESCRIPTION>EX-23.1 CONSENT OF ERNST & YOUNG LLP-FT WORTH, TX
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1

                         CONSENT OF INDEPENDENT AUDITORS


We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated November 9, 2001, incorporated by reference in the Joint
Proxy Statement of D.R. Horton, Inc. that is made a part of Amendment No. 3 to
the Registration Statement (Form S-4 No. 333-73888) and Prospectus of D.R.
Horton, Inc. for the registration of 26,526,835 shares of its common stock.


                                    /s/ Ernst & Young LLP


Fort Worth, Texas
January 10, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>5
<FILENAME>d92411a3ex23-2.txt
<DESCRIPTION>EX-23.2 CONSENT OF ERNST & YOUNG LLP-LOS ANGELES
<TEXT>
<PAGE>
                                                                   EXHIBIT 23.2


                         CONSENT OF INDEPENDENT AUDITORS



We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated June 27, 2001, for Schuler Homes, Inc., our report dated
May 16, 2001 for Schuler Residential, Inc. and our report dated April 30, 2001
for Western Pacific Housing, incorporated by reference in the Joint Proxy
Statement of D.R. Horton, Inc. that is made a part of Amendment No. 3 to the
Registration Statement (Form S-4 No. 333-73888) and Prospectus of D.R. Horton,
Inc. for the registration of 26,526,835 shares of its common stock.



                                    /s/ Ernst & Young LLP


Los Angeles, California
January 10, 2002


</TEXT>
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`
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`
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