(Source: PrimeNewswire)
FORT WORTH, Texas, Aug. 19, 2009 (GLOBE NEWSWIRE) -- D.R. Horton, Inc. (NYSE:DHI), America's Builder, announced today that its Board of Directors (the "Board") has approved the adoption of a tax benefits preservation plan in the form of a Section 382 Rights Agreement designed to preserve the value of certain deferred tax assets primarily associated with net operating loss carryforwards and built-in losses under Section 382 of the Internal Revenue Code. As of June 30, 2009, the Company had approximately $1.23 billion of net deferred tax assets. The Company intends to submit the Section 382 Rights Agreement for stockholder approval at its next annual meeting of stockholders.
D.R. Horton, Inc.'s ability to use its tax benefits would be substantially limited by Section 382 if a 50% "ownership change" occurred. A company experiences a 50% "ownership change" for tax purposes if the percentage of stock owned by its 5% stockholders (as defined for tax purposes) increases by more than 50 percentage points over a rolling three-year period. The Section 382 Rights Agreement is intended to reduce the likelihood of an unintended 50% "ownership change" occurring through the buying and selling of the Company's common stock.
Under the terms of the Section 382 Rights Agreement, D.R. Horton, Inc. will distribute to its stockholders a non-taxable dividend distribution of one preferred stock purchase right for each share of the Company's common stock held as of the close of business on August 31, 2009. The Section 382 Rights Agreement is intended to act as a deterrent to any person acquiring beneficial ownership of 4.9% or more of the Company's outstanding common stock within the meaning of the Internal Revenue Code and the regulations promulgated thereunder (an "Acquiring Person") without the approval of the Board. Stockholders who beneficially owned 4.9% or more of the Company's outstanding common stock as of the close of business on August 19, 2009 will not become an Acquiring Person so long as they do not acquire any additional shares of common stock at a time when they still beneficially own 4.9% or more of the Company's outstanding common stock. A person who becomes an Acquiring Person may be subject to significant dilution in their holdings. The Board may, in its sole discretion, exempt any person from being deemed an Acquiring Person for purposes of the Section 382 Rights Agreement.
The Company will file the Section 382 Rights Agreement in a Form 8-A with the Securities and Exchange Commission.
D.R. Horton, Inc., America's Builder, is one of the largest homebuilding companies in the United States, delivering more than 26,000 homes in its fiscal year ended September 30, 2008.
