3 unchanged sentences
The risk factors set forth below are not the only risks that we may face or that could adversely affect us.
−Removed: If any of the circumstances described in the risk factors discussed in this Form 10-K actually occur, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.
+Added: If any of the circumstances described in the risk factors discussed in this Form 10-K actually occur, our business, prospects, liquidity, financial condition and results of
+Added: operations could be materially and adversely affected.
If this were to occur, the trading price of our securities could decline significantly and stockholders may lose all or part of their investment.
10 unchanged sentences
Our geographic concentration and changes to the population growth rates in our markets could adversely affect our business.
−Removed: The COVID-19 pandemic could adversely impact our business, operating results and financial condition.
Risks Related to the Homebuilding and Real Estate Industries
Our operating results are dependent on our ability to develop our communities successfully and within expected timeframes and to maintain good relations with the residents of our communities.
−Removed: We face risks regarding utility, resource and raw material shortages and prices.
+Added: We face risks regarding utility, resource, raw material, building supply and labor shortages and prices, which have been exacerbated by recent inflation and supply chain disruptions.
We are subject to potential liability for health and safety incidents and product liability and warranty claims, which may exceed our insured limits.
4 unchanged sentences
Our Financial Services segment can be adversely affected by reduced demand for our homes, a slowdown in mortgage refinancings, our inability to sell mortgages into the secondary market or potential liability in connection with such sales.
−Removed: Our Financial Services business is competitive.
+Added: The financial services market is competitive.
Governmental regulation may adversely affect our Financial Services operations.
2 unchanged sentences
The success of our business is dependent upon highly skilled, competent and key personnel, as well as suitable contractors.
+Added: We depend on key personnel, the loss of which could have a material adverse effect on our business
+Added: Risks Related to the COVID-19 Pandemic
+Added: There is significant uncertainty regarding the extent to which and how long the COVID-19 pandemic and its related effects will impact the U.S.
Risks Related to Governmental, Regulatory, Legal and Compliance Matters
7 unchanged sentences
Changes in global or regional climate conditions and governmental actions in response to such changes may adversely affect us by increasing the costs of, or restricting, our planned or future growth activities.
−Removed: Risk Related to Our Prior and Any Future Acquisitions and Joint Venture Investments
−Removed: Our prior acquisitions and any future acquisitions, investments and/or disposals involve risks and may result in unexpected costs and unrealized benefits.
−Removed: A significant portion of our historical growth has been due to our prior acquisitions and we may not be able to continue to grow through acquisitions or effectively manage our expanded operations.
+Added: Risk Related to Acquisitions and Joint Venture Investments
+Added: Acquisitions, investments and/or disposals involve risks and may result in unexpected costs and unrealized benefits.
+Added: A significant portion of our historical growth has been due to our prior acquisitions and we may not be able to continue to grow through acquisitions.
Risks Related to Our Indebtedness and Liquidity
8 unchanged sentences
The ownership of our common stock is risky as it is subordinated to our existing and future indebtedness.
−Removed: We do not currently pay dividends on our common stock;
−Removed: and, consequently, the ability to achieve a return on investment will depend on stock price appreciation and if a trading market for our common stock is not sustained, the market price could decline.
Our actual operating results may differ significantly from our guidance, which could cause the market price of our common stock to decline.
1 unchanged sentence
We are subject to several other risks of which other public companies are subject, including without limitation, the effect of negative publicity;
+Added: increased scrutiny related to our environmental, social and governance practices;
information technology failures or data security breaches;
10 unchanged sentences
At any particular time, we cannot accurately predict whether housing market conditions existing at that time will continue.
−Removed: For example, while rising interest rates and tightening affordability created an industry-wide deceleration in housing growth during the second half of 2018 and into 2019, this deceleration reversed during the remainder of 2019 due in part to reduced mortgage rates.
−Removed: More recently, as a result of the COVID-19 pandemic, beginning in mid-March 2020, we began to experience a decrease in demand for our homes which began to reverse course in May and June of 2020.
−Removed: Despite overall strong demand and sales during 2020, continued demand for our homes is uncertain in light of higher unemployment rates, decreased consumer confidence, decreased availability of credit, and other factors, including those described elsewhere in this report.
+Added: For example, in the beginning of the COVID-19 pandemic, we experienced a decrease in demand for our homes which began to reverse course in May and June of 2020 and remained strong throughout the rest of 2020 and all of 2021.
+Added: Despite overall strong demand and sales during 2021, continued demand for our homes during 2022 and beyond is uncertain in light of rising inflation, decreased consumer confidence, decreased availability of credit, and other factors, including those described elsewhere in this report.
Adverse changes in general economic conditions could reduce the demand for our homes and, as a result, could have a material adverse effect on our business, results of operations and financial condition.
The residential homebuilding industry is cyclical and is highly sensitive to changes in local and general economic conditions that are outside our control, including:
−Removed: consumer confidence, levels of employment, job growth, spending levels, wage and personal income growth, personal indebtedness levels, and household debt-to-income levels of potential homebuyers;
+Added: consumer confidence, employment levels, job growth, spending levels, wage and personal income growth, personal indebtedness levels, and household debt-to-income levels of potential homebuyers;
the availability and cost of financing for homebuyers or restrictive mortgage standards, including private and federal mortgage financing programs and federal, state, and provincial regulation of lending practices;
5 unchanged sentences
In the event these economic and business factors occur, we could experience a decline in the demand and pricing for our homes, an increase in customer cancellations, an increase in selling concessions and downward pressure on the market value of our inventory, which could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations and increase the risk for asset impairments.
−Removed: The current COVID-19 pandemic has led to weakened economic conditions that have resulted in an economic slowdown and recession.
A significant or sustained downturn in the homebuilding market would likely have an adverse effect on our business and results of operations for multiple years.
9 unchanged sentences
We believe that due to anticipated generational shifts, changing demographics and other factors, the demand for more entry-level and affordable homes will increase.
−Removed: This is particularly true in light of future home buyers being motivated to move out of their apartments or confined living areas, often in urban areas, and into more spacious homes, often in nearby suburbs, in anticipation of spending more time at home with the increasing prevalence of remote-working arrangements as a result of the COVID-19 pandemic.
−Removed: Indeed, part of our strategy in acquiring Wade Jurney Homes, which has since been rebranded to Century Complete, was to target first time home buyers with an asset light business model.
−Removed: Our Century Complete brand solely targets entry level price points, sells homes primarily through retail studios and over the internet, and provides no option or upgrade selections.
+Added: This is particularly true in light of future home buyers being motivated to move out of their apartments or confined living areas, often in urban areas, and into more spacious homes, often in nearby suburbs, as they spend more time at home as a result of part- and full-time remote-working arrangements, which has become significantly more prevalent due primarily to the COVID-19 pandemic and which is expected to continue beyond the pandemic.
+Added: Indeed, part of our strategy with our Century Complete brand is to target first time home buyers with an asset light business model.
+Added: Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios and the internet, and generally provides no option or upgrade opportunities.
We have also pivoted our Century Communities brand to target more affordable price points as well.
−Removed: No assurance can be provided that our current business strategy to focus on more affordable homes will be effective or that we will successfully anticipate and react to future changing home buying patterns and trends.
−Removed: In addition, if the level of new home demand continues to increase in future periods as a result of changing home buying patterns or trends or otherwise, the risk of shortages and cost increases in residential lots, labor and materials available to the homebuilding industry will likely increase.
+Added: No assurance can be provided that our current business strategy to focus on more affordable homes will be effective or that we will successfully anticipate and react to future changing home buying patterns and trends, which may include higher levels of single-family rental demand.
+Added: In addition, if the level of new home demand continues to increase in future periods as a result of changing home buying patterns or trends
+Added: or otherwise, the risk of shortages and cost increases in residential lots, labor and materials available to the homebuilding industry will likely increase.
Our long-term growth depends upon our ability to successfully identify and acquire desirable land parcels at reasonable prices for residential build-out.
Our future growth depends upon our ability to successfully identify and acquire attractive land parcels for development of our homes at reasonable prices and with terms that meet our underwriting criteria.
−Removed: Our ability to acquire land parcels for new homes may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning, governmental and municipal restrictions, and other market conditions.
+Added: Our ability to acquire land parcels for new homes may be adversely affected by changes in the general availability of land parcels, the willingness of land sellers to sell land parcels at reasonable prices, competition for available land parcels, availability of financing to acquire land parcels, zoning, governmental and municipal restrictions, including environment restrictions, and other market conditions.
There can be no assurance that an adequate supply of homebuilding lots will continue to be available to us on terms similar to those available in the past.
3 unchanged sentences
Our geographic concentration could materially and adversely affect us if the homebuilding industry in our current markets should decline.
−Removed: Our business strategy is focused on the design, construction and sale of single-family detached and attached homes in 17 states across the West, Mountain, Texas, Southeast and Midwest U.S.
−Removed: While our operations are geographically diverse, a prolonged economic downturn in one or more of the areas in which we operate could have a material adverse effect on our business, prospects,
−Removed: liquidity, financial condition and results of operations, and a disproportionately greater impact on us than other homebuilders with larger scale and more diversified operations and geographic footprint.
+Added: Our business strategy is focused on the design, construction and sale of single-family detached and attached homes in 17 states throughout the U.S.
+Added: While our operations are geographically diverse, a prolonged economic downturn in one or more of the areas in which we operate could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations, and a disproportionately greater impact on us than other homebuilders with larger scale and more diversified operations and geographic footprint.
Any increase in unemployment or underemployment may lead to reduced demand for our homes and an increase in the number of loan delinquencies and property repossessions and have an adverse impact on our business and results of operations.
1 unchanged sentence
Bureau of Labor Statistics.
−Removed: As a result of impacts from the COVID-19 pandemic and efforts to contain it, it is uncertain how quickly the unemployment rate will improve or if it will further deteriorate.
−Removed: People who are not employed, are underemployed or are concerned about the loss of their jobs are less likely to purchase new homes, may be forced to try to sell the homes they own and may face difficulties in making required mortgage payments.
+Added: People who are not employed, are underemployed, such as those who have exited the workforce as a result of concerns related to the COVID-19 pandemic, or are concerned about the loss of their jobs are less likely to purchase new homes, may be forced to try to sell the homes they own and may face difficulties in making required mortgage payments.
Therefore, an increase in unemployment or underemployment may lead to an increase in the number of loan delinquencies and property repossessions and have an adverse impact on our business by both reducing the demand for the homes we build and increasing the supply of homes for sale, which would also likely adversely affect our Financial Services business, which is dependent upon the sale of our homes.
8 unchanged sentences
This environment would also likely adversely affect our Financial Services business.
−Removed: During the past, the mortgage lending industry in the United States experienced significant instability, beginning with increased defaults on subprime loans and other nonconforming loans and compounded by expectations of increasing interest payment requirements and further defaults.
+Added: In the past, the mortgage lending industry in the United States experienced significant instability, beginning with increased defaults on subprime loans and other nonconforming loans and compounded by expectations of increasing interest payment requirements and further defaults.
This in turn resulted in a decline in the market value of many mortgage loans and related securities.
1 unchanged sentence
Credit requirements tightened, and investor demand for mortgage loans and mortgage-backed securities declined.
−Removed: The deterioration in credit quality during the economic downturn caused almost all lenders to stop offering subprime mortgages and most other loan products that were not eligible for sale to Fannie Mae or Freddie Mac, or loans that did not conform to Fannie Mae, Freddie Mac, Federal Housing Administration (which we refer to as the “FH A ” ) or Veterans Administration (which we refer to as the “ VA ” ) requirements.
+Added: The deterioration in credit quality during the economic downturn caused almost all lenders to stop offering subprime mortgages and most other loan products that were not eligible for sale to Fannie Mae or Freddie Mac, or loans that did not conform to
+Added: Fannie Mae, Freddie Mac, Federal Housing Administration (which we refer to as the “FH A ” ) or Veterans Administration (which we refer to as the “ VA ” ) requirements.
Fewer loan products and tighter loan qualifications may make it more difficult for certain buyers to finance the purchase of our homes.
8 unchanged sentences
The FHA insures mortgage loans that generally have lower loan payment requirements and qualification standards compared to conventional guidelines, and as a result, continue to be a particularly important source for buyers financing the purchase of our homes.
−Removed: The FHA recently tightened its underwriting standards which affects potential home buyers, including in particular first-time buyers.
+Added: The FHA has in recent years tightened its underwriting standards, which affects potential home buyers, including in particular first-time buyers.
In addition, in recent years, lenders have taken a more conservative view of FHA guidelines causing significant tightening of borrower eligibility for approval.
1 unchanged sentence
In the future, there may be further restrictions on FHA-insured loans, including limitations on seller-paid closing costs and concessions, stricter loan qualification standards, and an increase in minimum down payment requirements.
−Removed: This or any other
−Removed: restriction may negatively affect the availability or affordability of FHA financing, which could adversely affect our potential homebuyers ’ ability to secure adequate financing and, accordingly, our ability to sell homes in the United States.
+Added: This or any other restriction may negatively affect the availability or affordability of FHA financing, which could adversely affect our potential homebuyers ’ ability to secure adequate financing and, accordingly, our ability to sell homes in the United States.
In addition, changes in federal and state regulatory and fiscal policies aimed at aiding the home buying market (including repeal or another limitation of the home mortgage interest tax deduction) may also negatively affect potential homebuyers ’ ability or desire to purchase homes.
6 unchanged sentences
Mortgage interest rates have been near historic lows for the past several years.
−Removed: While interest rates rose during 2018 and the beginning of 2019, they decreased substantially during the remainder of 2019 and remained low throughout 2020.
+Added: While interest rates rose during the beginning of 2019, they decreased substantially during the remainder of 2019 and remained relatively low throughout 2020 and most of 2021.
+Added: However, interest rates have increased recently, and the Federal Reserve has indicated that it may raise interest rates in March 2022.
Increases in interest rates increase the costs of owning a home and could adversely affect the purchasing power of consumers and lower demand for the homes we sell, which could result in a decrease in sales, adversely affecting our results of operations.
8 unchanged sentences
The FHA may continue to impose stricter loan qualification standards, raise minimum down payment requirements, impose higher mortgage insurance premiums and other costs, and/or limit the number of mortgages it insures.
−Removed: Several bills have been introduced in Congress over the past several years concerning the future status of Fannie Mae and Freddie Mac and the mortgage finance system, including bills which provided for the wind-down of Fannie Mae and Freddie Mac or proposed modifications to the financial relationship between Fannie Mae and Freddie Mac and the federal government.
+Added: Several bills have been introduced in Congress over the past several years concerning the future status of Fannie Mae and Freddie Mac and the mortgage finance system, including bills which provided for the wind-down
+Added: of Fannie Mae and Freddie Mac or proposed modifications to the financial relationship between Fannie Mae and Freddie Mac and the federal government.
The liquidity provided by Fannie Mae and Freddie Mac to the mortgage industry has been very important to the housing market.
7 unchanged sentences
Inflation could adversely affect our business and financial results.
−Removed: Inflation has adversely affected us by increasing the costs of land, materials and labor needed to operate our business and could continue to adversely affect us in future periods.
−Removed: In the event of an increase in inflation, we may seek to increase the sales prices of homes in order to maintain satisfactory margins which has to date proven successful.
+Added: Inflation, which increased significantly during 2021, has adversely affected us by increasing the costs of land, materials and labor needed to operate our business and could continue to adversely affect us in future periods.
+Added: In the event inflation continues to increase, we may seek to increase the sales prices of homes in order to maintain satisfactory margins which to date has proven successful.
However, an oversupply of homes relative to demand, home prices being set several months before homes are delivered and affordability concerns may make any such increase difficult or impossible in future periods.
15 unchanged sentences
In the past, we have been required to record significant write-downs of the carrying value of our land inventory, and have elected not to exercise options to purchase land, even though that required us to forfeit deposits and write-off pre-acquisition costs.
−Removed: Although we have taken efforts to reduce our exposure to costs of that type, a certain amount of exposure is inherent in our homebuilding business.
+Added: Although we have taken efforts to reduce our exposure to costs of that type, a certain amount of exposure is inherent
+Added: in our homebuilding business.
If market conditions were to deteriorate in the future, we could again be required to record significant write downs to our land inventory, which would decrease the asset values reflected on our consolidated balance sheet and could adversely affect our results of operations and financial condition and result in write-downs of the carrying values of land we own.
8 unchanged sentences
Before a community generates any revenues, significant time and material expenditures are required to acquire land, obtain development approvals and construct significant portions of project infrastructure, amenities, model homes and sales facilities.
−Removed: A decline in our ability to develop and market our communities successfully, especially in our more recent or new markets where it may be more difficult
−Removed: to do so, and to generate positive cash flow from these operations in a timely manner could have a material adverse effect on our business and results of operations and on our ability to service our debt and to meet our working capital requirements.
+Added: A decline in our ability to develop and market our communities successfully, especially in our more recent or new markets where it may be more difficult to do so, and to generate positive cash flow from these operations in a timely manner could have a material adverse effect on our business and results of operations and on our ability to service our debt and to meet our working capital requirements.
Utility and resource shortages or rate fluctuations could have an adverse effect on our operations.
Several of the markets in which we operate or may operate in the future have historically been subject to utility and resource shortages, including significant changes to the availability of electricity and water and seasonal fluctuation in the ability of certain commodities, particularly lumber.
−Removed: Shortages of natural resources in our markets, particularly of water, may make it more difficult for us to obtain regulatory approval of new developments.
−Removed: We have also experienced material fluctuations in utility and resource costs across our markets, and we may incur additional costs and may not be able to complete construction on a timely basis if such fluctuations arise.
−Removed: In particular, as the housing market has improved and the number of new homes being constructed has increased, we have experienced increased construction costs due to additional competition for labor and materials.
+Added: Shortages of natural resources in our markets may make it more difficult for us to obtain regulatory approval of new developments.
+Added: We have also experienced material fluctuations in utility and resource costs across our markets due, in part, to rising inflation and supply chain disruptions, and we may incur additional costs and may not be able to complete construction on a timely basis if such fluctuations arise.
+Added: In particular, as the housing market has improved and the number of new homes being constructed has increased, we have experienced increased construction costs due to additional competition for labor and materials, the supply of which have recently been constrained by labor shortages and supply chain issues, respectively.
Furthermore, these shortages and rate fluctuations may adversely affect the regional economies in which we operate, which may reduce demand for our homes and negatively affect our business and results of operations.
9 unchanged sentences
Accordingly, these competitors may be able to compete more effectively in one or more of the markets in which we operate.
−Removed: In addition, their increased scale may allow them to endure higher land and labor costs and buy raw materials more cheaply, as well as be less vulnerable to general economic conditions and fluctuations in housing demand.
+Added: addition, their increased scale may allow them to endure higher land and labor costs and buy raw materials more cheaply, as well as be less vulnerable to general economic conditions and fluctuations in housing demand.
Many of these competitors have long-standing relationships with subcontractors and suppliers in the markets in which we operate and therefore better access to qualified labor and lower raw material costs.
5 unchanged sentences
Until 2012, the single-family rental business consisted primarily of private and individual investors in local markets and was managed individually or by small, local property managers.
−Removed: Since then, several large, well-capitalized real estate investment trusts have entered this business resulting in a significant increase in the number of single-family rental homes.
+Added: Since then, numerous large, well-capitalized real estate investment trusts and other vehicles have entered this business, resulting in a significant increase in the number of single-family rental homes.
Increases in and an oversupply of competitively priced resale, foreclosure or rental homes in our markets could adversely affect our ability to sell homes profitably.
−Removed: If we are unable to successfully compete in the homebuilding industry, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.
+Added: One of our strategic initiatives is to evaluate opportunistic strategies for construction of single-family and multi-family rental units.
+Added: This strategy, however, involves risks, especially in light of the numerous large, well-capitalized real estate investment trusts and other vehicles and companies that have entered this business.
+Added: If we decide to pursue this new business, it would require additional capital and we would compete in securing debt financing or potential equity partners.
+Added: We would also compete for tenants with the already existing or newly built rental apartments, as well as with sellers of homes.
+Added: These competitive conditions could negatively impact our ability to enter into or succeed in this business if we decide to pursue it.
+Added: If we are unable to successfully compete in the homebuilding industry, especially in our recent markets and new markets we plan to enter, our business, prospects, liquidity, financial condition and results of operations could be materially and adversely affected.
Raw materials and building supply shortages and price fluctuations could delay or increase the cost of home construction and adversely affect our operating results.
The homebuilding industry has, from time to time, experienced raw material shortages and been adversely affected by volatility in global commodity prices and government imposed tariffs and trade regulations.
−Removed: In particular, shortages and fluctuations in the price of concrete,
−Removed: drywall, steel, lumber or other important raw materials could result in delays in the start or completion of, or increase the cost of, developing one or more of our residential communities.
+Added: In particular, shortages and fluctuations in the price of concrete, drywall, steel, lumber or other important raw materials could result in delays in the start or completion of, or increase the cost of, developing one or more of our residential communities.
These shortages can be more severe during periods of strong demand for housing or during periods following natural disasters that have a significant impact on existing residential and commercial structures.
−Removed: The cost of raw materials may also be materially and adversely affected during periods of shortages or high inflation.
+Added: The cost of raw materials also may be materially and adversely affected during periods of shortages or high inflation.
+Added: In 2021, we experienced lumber and other building material shortages caused in part by supply chain disruptions and price increases resulting from such supply chain disruptions, increased demand and the rising rate of inflation.
+Added: We currently anticipate that these trends will likely continue into 2022.
Shortages or increases in the price of raw materials could cause delays in and increase our costs of home construction.
3 unchanged sentences
Increases in such costs could also result in higher prices for any product utilizing petrochemicals.
−Removed: These cost increases may have an adverse effect on our operating margins and results of operations.
+Added: We experienced such increases during the second half of 2021, though these cost increases did not have a material adverse effect on our operations.
+Added: However, if such cost increases persist or worsen, they may have an adverse effect on our operating margins and results of operations.
Furthermore, any such cost increase may adversely affect the regional economies in which we operate and reduce demand for our homes.
3 unchanged sentences
Construction defects may arise in projects, developments and homes and may arise during a significant period of time after completion.
−Removed: Defects arising on a development or a home attributable to us may lead to significant contractual or other liabilities.
+Added: arising on a development or a home attributable to us may lead to significant contractual or other liabilities.
As a consequence, we maintain products and completed operations excess liability insurance, obtain indemnities and certificates of insurance from subcontractors generally covering claims related to damages resulting from their faulty workmanship and materials, and create warranty and other reserves for the homes we sell based on historical experience in our markets and our judgment of the risks associated with the types of homes built.
17 unchanged sentences
Insurance coverage may be further restricted and become even more costly in our industry.
+Added: Premium amounts on many of our insurance policies are subject to audit during or following the expiration of the policy, which may result in an obligation to pay additional premiums.
Such circumstances could adversely affect our business, financial condition and operating results.
10 unchanged sentences
changes in enforcement of laws, regulations and governmental policies, including, without limitation, health, safety, environmental, zoning, tax and disability rights laws.
−Removed: In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchase of homes or an increased incidence of home order cancellations.
+Added: In addition, periods of economic slowdown or recession, rising interest rates, inflation, or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in the purchase of homes or an increased incidence of home order cancellations.
If we cannot successfully implement our business strategy, our business, prospects, liquidity, financial condition and results of operations will be adversely affected.
2 unchanged sentences
As a result, our ability to promptly sell one or more properties in response to changing economic, financial and investment conditions is limited.
−Removed: We may be forced to sell an asset at significantly lower margins or at a loss, if we are able to sell them at all, or hold non-income producing assets for an extended period of time, which could have a negative impact on our liquidity or results of operations.
+Added: We may be forced to sell assets at significantly lower margins or at a loss, if we are able to sell them at all, or hold non-income producing assets for an extended period of time, which could have a negative impact on our liquidity or results of operations.
Our quarterly operating results may fluctuate because of the seasonal nature of our business and other factors.
14 unchanged sentences
Residents of communities we develop rely on us to resolve issues or disputes that may arise in connection with the operation or development of their communities.
−Removed: Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect sales or our reputation.
+Added: Efforts made by us to resolve these issues or disputes could be deemed unsatisfactory by the affected residents and subsequent actions by these residents could adversely affect our sales or reputation.
In addition, we could be required to make material expenditures related to the settlement of such issues or disputes or to modify our community development plans, which could adversely affect our results of operations.
1 unchanged sentence
We own and purchase a large number of sites each year and are therefore dependent on our ability to process a very large number of transactions (which include, among other things, evaluating the site purchase, designing the layout of the development, sourcing materials and subcontractors and managing contractual commitments) efficiently and accurately.
−Removed: Errors by employees, failure to comply
−Removed: with regulatory requirements and conduct of business rules, failings or inadequacies in internal control processes, inabilities to obtain desired approvals and entitlements, cost overruns, equipment failures, natural disasters or the failure of external systems, including those of our suppliers or counterparties, could result in operational losses that could adversely affect our business, operating results and financial condition and our relationships with our customers.
+Added: Errors by employees, failure to comply with regulatory requirements and conduct of business rules, failings or inadequacies in internal control processes, inabilities to obtain desired approvals and entitlements, cost overruns, equipment failures, natural disasters or the failure of external systems, including those of our suppliers or counterparties, could result in operational losses that could adversely affect our business, operating results and financial condition and our relationships with our customers.
Risk Related to Our Financial Services Business
We are subject to various risks relating to our Financial Services business.
−Removed: We have vertically integrated financial services into our business, which has enabled us to provide mortgage, title and insurance services to our homebuyers.
−Removed: Our home buying customers account for a significant portion of our loan production and substantially all of the loans we originate are sold in the secondary market within a short period of time after origination, generally within 30 days, either as whole loans or pursuant to a securitization.
−Removed: During 2020, we originated and closed 6,918 loans, with an aggregate total principal amount of $2.0 billion.
−Removed: Mortgage loans in process for which interest rates were committed to borrowers totaled approximately $172.3 million at December 31, 2020 and carried a weighted average interest rate of approximately 2.8%.
−Removed: As of December 31, 2020, we had mortgage loans held for sale with an aggregate fair value of $282.6 million and an aggregate outstanding principal balance of $269.6 million.
−Removed: In certain cases, interest rate risks related to these obligations are mitigated by the preselling of loans to investors or through our interest rate hedging program.
−Removed: There are numerous risks involved with engaging in our mortgage lending business, which risks may be exacerbated for us in light of the fact that we do not have a long history in this business.
+Added: There are numerous risks involved with engaging in our mortgage lending business, and these risks may be exacerbated for us in light of the fact that we do not have a long history in this business.
Because we have limited experience in originating and underwriting home loans, our underwriting standards may not be as stringent as a more traditional lender, and accordingly, we may experience a higher rate of default than lenders who have engaged in the mortgage lending industry for a longer period of time.
1 unchanged sentence
In addition, because we originate loans to buyers of our homes, there is the risk that we may be more incentivized, compared to more traditional lenders, to lower our underwriting standards in order to close home sales.
−Removed: Should we not be able to establish sufficiently stringent underwriting standards, or if our underwriting standards do not adequately screen quality applicants, the default rate on the loans we originate may be higher, which could have an adverse impact on our results of operations and financial condition, either because the borrowers under loans we own are no longer performing, or because we are required to repurchase or otherwise indemnify purchasers, guarantors or insurers of the loans we sold or securitized.
+Added: Should we not be able to establish sufficiently stringent underwriting standards, or if our underwriting standards do not adequately screen quality applicants, the default rate on the loans we originate may be higher, which could have an adverse
+Added: impact on our results of operations and financial condition, either because the borrowers under loans we own are no longer performing, or because we are required to repurchase or otherwise indemnify purchasers, guarantors or insurers of the loans we sold or securitized.
Further, if we face a high default rate on the mortgages we originate, we may be unable to sell mortgages or the pricing we receive upon the sale of mortgages may not meet our expectations.
13 unchanged sentences
Our Financial Services segment can be adversely affected by reduced demand for our homes or by a slowdown in mortgage refinancings.
−Removed: Approximately 82% of the mortgage loans made by our Financial Services segment in 2020 were made to buyers of homes we built.
+Added: Approximately 84% of the mortgage loans closed by our Financial Services segment in 2021 were made to buyers of homes we built.
Therefore, a decrease in the demand for our homes would adversely affect the revenues of this segment of our business.
−Removed: Despite overall strong demand and sales during 2020, continued demand for our homes is uncertain in light of higher unemployment rates, decreased consumer confidence, decreased availability of credit, and other factors, including those described elsewhere in this report.
+Added: Despite overall strong demand and sales during 2021, continued demand for our homes is uncertain in light of rising inflation, decreased consumer confidence, decreased availability of credit, and other factors, including those described elsewhere in this report.
If our ability to sell mortgages into the secondary market is impaired, that could significantly reduce our ability to sell homes unless we are willing to become a long-term investor in the loans we originate.
−Removed: We typically sell substantially all of the loans we originate and in many cases the related servicing rights in the secondary mortgage market within a short period of time after origination, generally within 30 days, on a servicing released, non-recourse basis.
−Removed: If we are unable or choose not to sell loans into the secondary mortgage market or directly to Fannie Mae and Freddie Mac, we may have to either curtail our origination of residential mortgage loans, which among other things, could significantly reduce our ability to sell homes, or commit our own funds to long term investments in mortgage loans, which, in addition to requiring us to deploy substantial amounts of our own funds, could delay the time when we recognize revenues from home sales on our consolidated statements of operations.
−Removed: Beginning in mid-2020, due to reduced liquidity in the secondary market related to remedies provided in the Coronavirus Aid, Relief, and Economic Security Act (which we refer to as the CARES Act) to borrowers of residential loans, we began retaining mortgage servicing rights on some of our loan sales.
+Added: We sell substantially all of the loans we originate either as loans with servicing rights released, or with servicing rights retained, in the secondary mortgage market within a short period of time after origination, generally within 30 days.
+Added: If we are unable or choose not to sell loans into the secondary mortgage market or directly to Fannie Mae and Freddie Mac, we may have to either curtail our origination of residential mortgage loans, which among other things, could significantly reduce our ability to sell homes, or commit our own funds to long term investments in mortgage loans, which, in addition to requiring us to deploy substantial amounts of our own funds, could delay the time when we recognize revenues from home sales in our consolidated statements of operations.
+Added: Beginning in mid-2020 and continuing through 2021, due to reduced liquidity in the secondary market related to remedies provided in the Coronavirus Aid, Relief, and Economic Security Act (which we refer to as the CARES Act) to borrowers of residential loans, we began retaining mortgage servicing rights on some of our loan sales.
As servicer for these loans, we may have to advance payments to the mortgage-backed securities bondholders to the extent there are insufficient collections to satisfy the required principal and interest remittances of the underlying mortgage-backed securities.
−Removed: We may be liable for certain limited representations and warranties we make in connection with sale of loans.
+Added: We may be liable for certain limited representations and warranties we make in connection with the sale of our loans.
When we sell the loans we originate, we make customary representations and warranties to purchasers, guarantors and insurers about the mortgage loans and the manner in which they were originated, and offer certain indemnities and guaranties to the purchasers, guarantors and insurers of which we are responsible.
In the event of defaults on the loans we originate, we may be required to repurchase or substitute mortgage loans, or indemnify buyers, guarantors or insurers of our loans.
−Removed: If we have significant liabilities with respect to such claims or future, it could have an adverse effect on our results of operations, and possibly our financial condition.
−Removed: Our Financial Services business is competitive and we may not be able to compete effectively in this area.
+Added: If we have significant liabilities with respect to such claims, it could have an adverse effect on our results of operations, and possibly our financial condition.
+Added: The financial services market is competitive and we may not be able to compete effectively in this area.
The competitors to our Financial Services business include other insurance agencies, title companies and mortgage lenders, including national, regional and local mortgage banks and other financial institutions.
1 unchanged sentence
These competitors may offer a broader or more attractive array of financing and other products and services to potential customers than we do.
−Removed: For these reasons, we may not be able to compete effectively in the Financial Services business.
+Added: For these reasons, we may not be able to compete effectively in the financial services market.
Governmental regulation of our Financial Services operations could adversely affect our business or financial results.
28 unchanged sentences
Although we attempt to mitigate interest rate risk with hedging activities, such activities may not be effective and also involve risk.
−Removed: In our Financial Services business, we utilize mortgage-backed securities, forward commitments, and investor commitments to protect the value of rate-locked commitments and loans held for sale from fluctuations in mortgage-related interest rates.
+Added: In our Financial Services business, we utilize forward commitments on mortgage-backed securities, forward commitments, and investor commitments to protect the value of interest rate lock commitments and loans held for sale from fluctuations in mortgage-related interest rates.
To mitigate interest risk associated with loans held for sale, we use derivative financial instruments to hedge our exposure to risk from the time a borrower locks a loan until the time the loan is securitized.
−Removed: We also hedge our interest rate exposure through entering into interest rate swap futures.
We may obtain additional forms of interest rate protection — in the form of swap agreements, interest rate cap contracts or similar agreements — to hedge against the possible negative effects of interest rate fluctuations.
−Removed: However, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder.
+Added: However, we cannot assure that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder.
In addition, we may be subject to risks of default by hedging counterparties.
2 unchanged sentences
Risks Related to Human Capital Management
−Removed: Failure to recruit, retain and develop highly skilled, competent personnel may have a material adverse effect on our standards of service and adversely affect our business.
+Added: Failure to recruit, retain and develop highly skilled, and competent personnel may have a material adverse effect on our standards of service and adversely affect our business.
Key employees, including members of our management team, are fundamental to our ability to obtain, generate and manage business opportunities.
−Removed: Key employees working in the homebuilding and construction industries are highly sought after.
+Added: Key employees working in the homebuilding and construction industries are highly sought after, especially in light of the unprecedented demand for new homes and current labor shortage.
Failure to attract and retain such personnel or to ensure that their experience and knowledge is not lost when they leave the business through retirement, redundancy or otherwise may adversely affect the standards of our service and may have an adverse impact on our business, financial condition and operating results.
4 unchanged sentences
Accordingly, the timing and quality of our construction depend on the availability and skill of our subcontractors.
−Removed: An increase in levels of homebuilding in the markets in which we operate has occasionally led to some difficulty in securing the services of skilled tradesmen who are currently in high demand.
+Added: An increase in levels of homebuilding in the markets in which we operate has occasionally led to some difficulty in securing the services of skilled trades people who are currently in high demand.
+Added: Additionally, labor shortages, such as the labor shortage that began in 2021, may further increase the difficulty in securing the services of skilled trades people.
While we believe that our existing relationships with subcontractors are good, we do not have long-term contractual commitments with any subcontractors, and there can be no assurance that skilled subcontractors will continue to be available at reasonable rates and in the areas in which we conduct our operations.
7 unchanged sentences
We are exposed to various risks as a result of our reliance on these contractors and their respective subcontractors and suppliers, including the possibility of defects in our homes due to improper practices or materials used by contractors or jobsite safety issues, which may require us to comply with our warranty obligations and/or bring a claim under an insurance policy.
−Removed: For example, despite our quality control and jobsite safety efforts, we may discover that our subcontractors were engaging in improper construction or safety practices or installing defective materials in our homes.
+Added: despite our quality control and jobsite safety efforts, we may discover that our subcontractors were engaging in improper construction or safety practices or installing defective materials in our homes.
When we discover these issues, we repair the homes in accordance with our new home warranty and as required by law.
14 unchanged sentences
Any of these circumstances could give rise to delays in the start or completion of, or increase the costs of, developing one or more of our communities and building homes.
−Removed: Labor shortages can be more severe during periods of strong demand for housing and pricing for labor can be affected by the factors discussed above and various other national, regional and local economic and political factors.
+Added: Labor shortages, such as the labor shortage that began in 2021, can be more severe during periods of strong demand for housing and pricing for labor can be affected by the factors discussed above and various other national, regional and local economic and political factors.
We may not be able to recover these increased costs by raising our home prices because the price for each home is typically set months prior to its delivery pursuant to sales contracts with our homebuyers and due to affordability concerns.
13 unchanged sentences
The employment agreements we have entered into with Dale Francescon and Robert Francescon, our Co-Chief Executive Officers, and Dave Messenger, our Chief Financial Officer, each provide that if their employment with us terminates under certain circumstances, we may be required to pay them significant amounts of severance compensation, thereby making it costly to terminate their employment.
−Removed: In addition, under certain circumstances, the termination of employment of one of our Co-Chief Executive Officers could result in the termination of employment of our other Co-Chief Executive Officer which would result in a requirement for us to pay severance compensation to both former executives.
+Added: In addition, under certain circumstances, the termination of employment of one of our Co-Chief Executive Officers could result in the
+Added: termination of employment of our other Co-Chief Executive Officer which would result in a requirement for us to pay severance compensation to both former executives.
Furthermore, these provisions could delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders, which could adversely affect the market price of our common stock.
1 unchanged sentence
There is significant uncertainty regarding the extent to which and how long the COVID-19 pandemic and its related effects will impact the U.S.
−Removed: economy and level of employment, capital markets, secondary mortgage markets, consumer confidence, demand for our homes and availability of mortgage loans to homebuyers, and as a result, our business and future operating results and financial condition.
+Added: economy, capital markets, secondary mortgage markets, consumer confidence, and availability of mortgage loans to homebuyers, and as a result, our business and future operating results and financial condition.
The global COVID-19 pandemic has created significant volatility, disruption and uncertainty.
−Removed: It has resulted in government restrictions, such as “stay-at-home” or “shelter-in-place” directives, quarantines, travel advisories and the implementation of social distancing measures, leading to the closure of businesses and causing weakened economic conditions and an economic slowdown and recession.
−Removed: In response to the pandemic and these government restrictions, we shifted our sales process in 2020 to offer additional virtual online tours and appointments and, where permitted, appointment-only in-person meetings that comply with social distancing and other health and safety requirements and protocols.
−Removed: Although as of the date of this filing, our construction and sale of residential real estate activities continue unimpeded and are generally not subject to these government restrictions, no assurance can be provided that this will continue.
+Added: It has resulted in government restrictions, such as quarantines, travel advisories and the implementation of social distancing measures, leading to the closure of businesses and causing weakened economic conditions.
While these circumstances did not materially adversely affect our 2021 financial results, we recognize that the long term macro-economic effects could ultimately impact the homebuilding industry and our business and future operating results.
There is significant uncertainty regarding the extent to which and how long COVID-19 and its related effects will impact the U.S.
−Removed: economy and level of employment, capital markets, secondary mortgage markets, consumer confidence, demand for our homes and availability of mortgage loans to homebuyers.
−Removed: The extent to which COVID-19 will impact our business and operating results during 2021 will depend on future developments, including the duration and continued spread of COVID-19, the availability and effectiveness of vaccines, and the impact on our customers, trade partners and employees, as well as the U.S.
+Added: economy, capital markets, secondary mortgage markets, consumer confidence, and availability of mortgage loans to homebuyers.
+Added: The extent to which COVID-19 will impact our business and operating results during 2022 will depend on future developments, including the duration and continued spread of COVID-19, including existing and new variants, such as Delta and Omicron, the acceptance and effectiveness of vaccines against COVID-19 and new variants that may arise, and the impact on our customers, trade partners and employees, as well as the U.S.
economy, all of which are highly uncertain and cannot be predicted.
The adverse effect of COVID-19 on the economy could negatively impact demand for new homes, as well as the origination volume of and revenues from our Financial Services segment.
−Removed: Despite strong demand for and sales of our homes during 2020, continued demand is uncertain in light of high unemployment rates, decreased consumer confidence, decreased availability of credit, and other factors.
+Added: Despite strong demand for and sales of our homes during 2021, continued demand is uncertain in light of inflation, decreased consumer confidence, decreased availability of credit, and other factors, including those described in this report.
The COVID-19 pandemic may have other adverse effects on our business, operating results and financial condition, including:
−Removed: availability of employees, their ability to continue to work away remotely and/or under revised work environment protocols, as well as the general willingness of employees to come to and perform work;
+Added: availability of employees, their ability to work remotely and/or under revised work environment protocols, as well as the general willingness of employees to come to and perform work;
an increase in our use of sales incentives and concessions, which could adversely affect our margins;
9 unchanged sentences
We are uncertain of the potential full magnitude or duration of the business and economic impacts from the COVID-19 pandemic.
−Removed: This inherent uncertainty, due in part to rapidly changing governmental directives, public health challenges and progress, including the availability and effectiveness of vaccines, and market reactions thereto, makes it challenging for our management to estimate the future performance of our business and plan accordingly.
+Added: This inherent uncertainty, due in part to governmental directives, which may be imposed or reinstated should there be a significant resurgence of COVID-19 cases and hospitalizations, public health challenges and progress, including the acceptance and effectiveness of vaccines, and market reactions thereto, makes it challenging for our management to estimate the future performance of our business and plan accordingly.
Should the potential adverse impacts described above (or others that are currently unknown) occur, whether individually or collectively, we would expect to experience, among other things, decreases in our homes delivered, average selling prices, net new home contracts, revenues and profitability.
16 unchanged sentences
Finally, because of our need to obtain governmental approvals in connection with our development activities, government shutdowns or slowdowns may have an adverse effect on our business.
−Removed: Changes in U.S.
−Removed: trade policies and retaliatory responses from other countries may significantly increase the costs or limit supplies of building materials and products used in our homes.
−Removed: government has created significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs.
−Removed: The federal government has imposed new or increased tariffs or duties on an array of imported materials and goods that are used in connection with the construction and delivery of our homes, including steel, aluminum, lumber, solar panels and washing machines, raising our costs for these items (or products made with them).
−Removed: Additionally, the federal government has threatened to impose further tariffs, duties and/or trade restrictions on imports.
−Removed: Foreign governments, including China and Canada, and the European Union have responded by imposing or increasing tariffs, duties and/or trade restrictions on U.S.
−Removed: goods, and may consider other measures.
−Removed: These trading conflicts and related escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our construction costs further, cause disruptions or shortages in our supply chains and/or negatively impact the U.S., regional or local economies, and, individually or in the aggregate, materially and adversely affect our business and our operating results.
Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us.
12 unchanged sentences
With respect to certain general liability exposures, including construction defect and product liability claims, interpretation of underlying current and future trends, assessment of claims and the related liability and reserve estimation process require us to exercise significant judgment due to the complex nature of these exposures, with each exposure often exhibiting unique circumstances.
−Removed: Furthermore, once claims are asserted for construction defects, it is difficult to determine the extent to which the assertion of these claims will expand geographically.
+Added: Furthermore, once claims are asserted for construction defects, it is difficult to determine the extent to which the assertion of these claims will expand
+Added: geographically.
As a result, our insurance policies may not be available or adequate to cover any liability for damages, the cost of repairs, and/or the expense of litigation surrounding current claims, and future claims may arise out of events or circumstances not covered by insurance and not subject to effective indemnification agreements with our subcontractors.
2 unchanged sentences
Data protection and privacy laws have been enacted by the U.S.
−Removed: federal and state governments, including the California Consumer Privacy Act, which became effective on January 1, 2020, and the regulatory regime continues to evolve and is increasingly complex and demanding.
+Added: federal and state governments, including the California Consumer Privacy Act, which became effective on January 1, 2020, Virginia’s Consumer Data Protection Act, which will become effective on January 1, 2023, and the Colorado Privacy Act, which will become effective on July 1, 2023, and the regulatory regime continues to evolve and is increasingly complex and demanding.
Many states are considering privacy and security legislation and there are ongoing discussions regarding a national privacy law.
4 unchanged sentences
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to customer or employee data, or otherwise mismanages or misappropriates such data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution.
−Removed: In addition, unauthorized disclosure of sensitive or confidential
−Removed: customer or employee data, whether through system failure, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose customers and related revenue.
+Added: In addition, unauthorized disclosure of sensitive or confidential customer or employee data, whether through system failure, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose customers and related revenue.
Potential liability in the event of a security breach of customer data could be significant.
1 unchanged sentence
Failure by our directors, officers, employees or contractors to comply with applicable laws and regulations and codes of conduct could materially and adversely affect us.
−Removed: We are required to comply with laws and regulations that govern all aspects of our business including land acquisition, development, home construction, labor and employment, mortgage origination, title and escrow operations, sales and warranty.
+Added: We are required to comply with laws and regulations that govern all aspects of our business, including land acquisition, development, home construction, labor and employment, mortgage origination, title and escrow operations, sales of homes and warranties.
It is possible that our employees or entities engaged by us, such as subcontractors, could intentionally or unintentionally violate some of these laws and regulations.
12 unchanged sentences
The particular impact and requirements of environmental laws that apply to any given site vary greatly according to the community, the site’s environmental conditions and the present and former use of the site.
−Removed: From time to time, the United States Environmental Protection Agency and other federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures.
+Added: From time to time, the United States Environmental Protection Agency and other federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to comply with applicable environmental laws or impose additional requirements for future compliance as a result of past
Any such actions taken with respect to us may increase our costs.
5 unchanged sentences
In addition, we are subject to third-party challenges to the permits and other approvals required for our projects and operations, such as by environmental groups, under environmental laws and regulations.
−Removed: There is a growing concern from advocacy groups and the general public that the emissions of greenhouse gases and other human activities have caused, or will cause, significant changes in weather patterns and temperatures and the frequency and severity of natural disasters.
−Removed: Government mandates, standards and regulations enacted in response to these projected climate changes impacts could result in restrictions on land development in certain areas or increased energy, transportation and raw material costs that may adversely affect our financial condition and results of operations.
+Added: There is a growing concern from advocacy groups and the general public that greenhouse gas emissions and other human activities have caused, or will cause, significant changes in weather patterns and temperatures and the frequency and severity of natural disasters.
+Added: Government mandates, standards and regulations enacted in response to these projected climate changes impacts could result in restrictions on land development in certain areas, such as areas prone to drought, or increased energy, transportation and raw material costs that may adversely affect our financial condition and results of operations.
We may be liable for claims for damages as a result of use of hazardous materials.
−Removed: As a homebuilding business with a wide variety of historic homebuilding and construction activities, we could be liable for future claims for damages as a result of our past or present use of hazardous materials, including building materials which in the future become known
−Removed: or are suspected to be hazardous.
+Added: As a homebuilding business with a wide variety of historic homebuilding and construction activities, we could be liable for future claims for damages as a result of our past or present use of hazardous materials, including building materials which in the future become known or are suspected to be hazardous.
Any such claims may adversely affect our business, financial condition and operating results.
23 unchanged sentences
Changes in global or regional climate conditions and governmental actions in response to such changes may adversely affect us by increasing the costs of, or restricting, our planned or future growth activities.
−Removed: Projected climate change, if it occurs, may exacerbate the scarcity or presence of water and other natural resources in affected regions, which could limit, prevent or increase the costs of residential development in certain areas.
+Added: Climate change, if it continues as currently projected, may exacerbate the scarcity or presence of water and other natural resources in affected regions, which could limit, prevent or increase the costs of residential development in certain areas.
In addition, there is a variety of new legislation being enacted, or considered for enactment, at the federal, state and local level relating to energy and climate change, and as climate change concerns continue to grow, legislation and regulations of this nature are expected to continue.
3 unchanged sentences
As a result, climate change impacts, and the laws and land development and home construction standards implemented to address potential climate change concerns, could result in an increase in our costs and have a long-term adverse impact on our business and results of operations.
−Removed: This is a particular concern in the western United States, which
−Removed: have instituted some of the most extensive and stringent environmental laws and residential building construction standards in the country.
−Removed: Risk Related to Our Prior and Any Future Acquisitions and Joint Venture Investments
−Removed: Our acquisition of Wade Jurney Homes and other prior acquisitions may result in unexpected costs and the anticipated benefits may not be realized.
−Removed: As a part of our business strategy, we have made seven acquisitions since 2013 and may continue to make acquisitions, or significant investments in, and/or disposals of businesses.
−Removed: For example, in November 2016, we acquired a 50% ownership of WJH LLC (which we refer to as “WJH”), which is a successor to Wade Jurney Homes, Inc.
−Removed: and Wade Jurney of Florida, Inc., and in June 2018, we acquired the remaining 50% ownership interest in WJH.
−Removed: In October 2017, we acquired Sundquist Homes and in August 2017, we acquired UCP, Inc.
−Removed: While we believe these acquisitions have produced and will continue to produce many benefits, such as in the case of WJH, expanding our investment into a proven and profitable operation, enhancing our geographic and product diversification through additional exposure to new markets and first-time buyers, driving additional growth avenues for ancillary revenue streams, including our mortgage, title and insurance operations, and improving access to capital to accelerate WJH’s expansion efforts into additional markets, these benefits may not come to fruition or materialize to the extent we anticipate and within anticipated time periods.
−Removed: In addition, acquisitions involve integration activities, which can be costly and involve risk.
−Removed: There are many factors beyond our control that could affect the total amount or the timing of the integration expenses.
−Removed: Expenses associated with the integration could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings, and significantly reduce the expected benefits associated with our acquisitions.
−Removed: Integration costs, as well as other unanticipated costs and expenses, could have a material adverse effect on our results of operations and financial condition.
−Removed: Our prior acquisitions and any future acquisitions, investments and/or disposals involve risks.
−Removed: Our prior acquisitions and any future acquisitions, investments and/or disposals we may complete involve risks, such as:
+Added: This is a particular concern in the western U.S., where some of the most extensive and stringent environmental laws and residential building construction standards in the country have been instituted, and where some of our business operations are located.
+Added: Public company stockholders are increasingly sensitive to the climate change impacts and mitigation efforts of companies, are increasingly seeking enhanced disclosure on the risks, challenges, governance implications, and financial impacts of climate change faced by companies and are demanding that companies take a proactive approach to addressing perceived environmental risks, including risks associated with climate change, relating to their operations.
+Added: Adverse publicity related to our handling of climate change mitigation efforts or compliance with governmental actions or climate-related litigation that impacts us could have a negative impact on our business.
+Added: Risk Related Acquisitions and Joint Venture Investments
+Added: Acquisitions, investments and/or disposals involve risks.
+Added: As a part of our business strategy, we have made seven acquisitions since 2013 and we intend to continue to explore future acquisitions, or significant investments in, and/or disposals of businesses.
+Added: Acquisitions, investments and/or disposals involve risks, such as:
difficulties in assimilating the operations and personnel of acquired companies or businesses;
12 unchanged sentences
We cannot guarantee that we will be able to successfully integrate any company or business that we might acquire in the future, and our failure to do so could harm our current business.
−Removed: In addition, we may not realize the anticipated benefits of these transactions at all or within a reasonable time period and there may be other unanticipated or unidentified effects.
+Added: In addition, we may not realize the anticipated benefits of an acquisition or other similar transaction at all or within a reasonable time period and there may be other unanticipated or unidentified effects.
While we would seek protection, for example, through warranties and indemnities in the case of acquisitions, significant liabilities may not be identified in due diligence or come to light after the expiry of warranty or indemnity periods.
−Removed: Additionally, while we would seek to limit our ongoing exposure, for example, through liability caps and period limits on
−Removed: warranties and indemnities in the case of disposals, some warranties and indemnities may give rise to unexpected and significant liabilities.
+Added: Additionally, while we would seek to limit our ongoing exposure, for example, through liability caps and period limits on warranties and indemnities in the case of disposals, some warranties and indemnities may give rise to unexpected and significant liabilities.
Any claims arising in the future may adversely affect our business, financial condition and operating results.
A significant portion of our historical growth has been due to our prior acquisitions and we may not be able to continue to grow through acquisitions.
−Removed: A significant portion of our historical growth has been due in part to our prior acquisitions and we intend to continue to grow through future acquisitions of, or significant investments in, businesses that offer complementary products and services or otherwise support our growth objectives.
+Added: A significant portion of our historical growth has been due in part to our prior acquisitions and we intend to continue to explore future acquisitions of, or significant investments in, businesses that offer complementary products and services or otherwise support our growth objectives.
However, we cannot assure you that we will continue to identify attractive acquisition targets and consummate acquisitions.
−Removed: As a result of our prior acquisitions and the incurrence of debt in connection therewith, the amount of our indebtedness is significantly higher than prior to the consummation of such acquisitions.
+Added: As a result of any future acquisitions and the incurrence of debt in connection therewith, the amount of our indebtedness may be significantly higher than prior to the consummation of such acquisitions.
As a result, we cannot assure you that we will be able to arrange financing for future acquisitions on terms acceptable to us.
1 unchanged sentence
The realization of any of these risks could adversely affect our business.
−Removed: Our future results will suffer if we do not effectively manage our expanded operations.
−Removed: The size of our business has increased significantly during the past several years, in part, due to past acquisitions.
−Removed: Our future success will depend, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
−Removed: There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits from these acquisitions.
We have intangible assets, including goodwill, primarily as a result of our prior acquisitions.
17 unchanged sentences
The homebuilding industry is capital-intensive and requires significant up-front expenditures to acquire land parcels and begin development.
−Removed: If our internally generated funds are not sufficient, we may seek additional capital in the form of equity or debt financing
−Removed: from a variety of potential sources, including additional bank financings and/or securities offerings.
−Removed: The availability of borrowed funds, especially for land acquisition and construction financing, may be greatly reduced nationally, and the lending community may require increased amounts of equity to be invested in a project by borrowers in connection with both new loans and the extension of existing loans.
+Added: If our internally generated funds are not sufficient, we may seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financings and/or securities offerings.
+Added: The availability of borrowed funds, especially for land acquisition and construction financing, may be greatly reduced nationally, and the lending community may require
+Added: increased amounts of equity to be invested in a project by borrowers in connection with both new loans and the extension of existing loans.
The credit and capital markets in the past have experienced significant volatility.
19 unchanged sentences
We may need to refinance all or a portion of our indebtedness, on or before its maturity.
+Added: Our mortgage repurchase facilities have varying short term dates through August 23, 2022.
Our revolving line of credit expires in 2026 and a substantial portion of our senior notes mature in 2027.
64 unchanged sentences
Under our shelf registration statement, which we filed with the SEC in July 2021 and was automatically effective upon filing, we have the ability to access the debt and equity capital markets as needed as part of our ongoing financing strategy and subject to market conditions, including through the use of our at-the-market facility with J.P.
−Removed: Morgan Securities LLC, BofA Securities, Inc., Citigroup Global Markets Inc., and Fifth Third Securities, Inc., as sales agents (which we refer to as our “ATM Facility”).
+Added: Morgan Securities LLC, BofA Securities, Inc., Fifth Third Securities, Inc., and Wells Fargo Securities, LLC, as sales agents (which we refer to as our “ATM Facility”).
If we raise additional funds by issuing equity securities under our ATM Facility or otherwise, our stockholders may experience dilution.
15 unchanged sentences
Prior to the late 2017 enactment of the Tax Cuts and Jobs Act (which we refer to as the “ TCJA ” ), significant expenses of owning a home, including mortgage loan interest and state and local property and income taxes, generally were deductible expenses for an individual’s U.S.
−Removed: federal income taxes and in some cases, state income taxes, subject to various limitations.
−Removed: The TCJA established new limits on the federal tax deductions individual taxpayers may take on mortgage loan interest payments and on state and local taxes, including property taxes.
−Removed: Under the TCJA, through the end of 2023, the mortgage interest deduction cap on a newly purchased home was decreased to $750,000 a year ($375,000 in the case of a separate return filed by a married individual) from the prior $1,000,000 threshold, and the annual deduction for real estate property taxes and state and local income or sales taxes has been limited to a combined amount of $10,000 (or $5,000 in the case of a separate return filed by a married individual).
−Removed: As a result, fewer individuals are expected to itemize their income tax deductions, which would mitigate the income tax advantages associated with homeownership for those individuals.
−Removed: These changes have reduced and may continue to reduce the actual or perceived affordability of homeownership, which have adversely affected and could continue to adversely affect demand for and sales prices of new homes, especially in areas with relatively high housing prices or high state and local income taxes and real estate taxes, including in California, Colorado, Nevada and Washington.
+Added: federal income taxes subject to various limitations.
+Added: The TCJA established new limits on the federal tax deductions individual taxpayers may take on mortgage loan interest payments and on state and local taxes, including property and income taxes.
+Added: Under the TCJA, through the end of 2023, the mortgage interest deduction cap on a newly purchased home was decreased to $750,000 a year ($375,000 in the case of a separate return filed by a married individual) from the prior $1,000,000 threshold, and the annual deduction for real estate and other property taxes, state and local income taxes and sales taxes has been limited to a combined amount of $10,000 (or $5,000 in the case of a separate return filed by a married individual).
+Added: The TCJA also increased the standard deduction for individuals.
+Added: As a result, fewer individuals are expected to itemize their income tax deductions, which would reduce the income tax advantages associated with homeownership for those individuals.
+Added: These changes have reduced and may continue to reduce the actual or perceived affordability of homeownership, which have adversely affected and could continue to adversely affect demand for and sales prices of new homes, especially in areas with relatively high housing prices or high state and local income taxes and real estate taxes.
Any further change in income tax laws by the federal or state government to eliminate or substantially reduce income tax benefits associated with homeownership could adversely affect demand for and sales prices of new homes.
−Removed: In late 2019, the Tax Extender and Disaster Relief Act of 2019 (the “Extender Act”) was enacted.
−Removed: The Extender Act extended the availability of the Internal Revenue Code §45L credit for energy-efficient new homes (the “Federal Energy Credits”), which provides a tax credit of $2,000 per qualifying home to eligible builders, for homes delivered through December 31, 2020.
−Removed: Legislation to extend the Federal Energy Credits until December 31, 2021 was recently enacted in late 2020, but it is uncertain whether an extension or similar tax credit will be adopted in the future.
−Removed: The Federal Energy Credits reduced our income tax expense by $8.5 million and $17.3 million for the year ended December 31, 2020 and 2019, respectively.
−Removed: On December 27, 2020, an extension of the Federal Energy Credits was enacted into law, extending the current provisions through December 31, 2021.
+Added: Our income tax expense is reduced based upon the availability of the Internal Revenue Code Section 45L credit for energy-efficient new homes (the “Federal Energy Credits”), which provided a tax credit of $2,000 per qualifying home to eligible builders, for homes delivered through December 31, 2021.
+Added: Proposed legislation included in the pending “Build Back Better Act” would extend the Federal Energy Credits through December 31, 2031 but would modify the current qualification requirements and provide a $2,500 or $5,000 tiered credit for new single-family homes meeting designated “Energy Star” or “Zero Energy” program requirements, respectively.
+Added: Neither the Build Back Better Act nor any similar legislation has been enacted as of the date of this Form 10-K, and it is uncertain whether an extension or similar tax credit will be adopted or available in the future or the scope of any modified program requirements.
+Added: The Federal Energy Credits reduced our income tax expense by $16.5 million and $8.5 million for the years ended December 31, 2021 and 2020, respectively.
+Added: If similar legislation is not enacted, our income tax expense may increase, which could have an adverse effect on our business.
Increases in property and sales taxes could prevent potential customers from buying our homes and adversely affect our business or financial results.
2 unchanged sentences
In addition, increases in sales taxes could adversely affect our potential customers who may consider those costs in determining whether to make a new home purchase and decide, as a result, not to purchase one of our homes.
−Removed: The Tax Cuts and Jobs Act, other enacted and pending legislation and the policies of a new federal administration could adversely affect our business and financial condition.
+Added: The Tax Cuts and Jobs Act, other enacted and pending legislation and the policies of the administration could adversely affect our business and financial condition.
The TCJA significantly reformed the Internal Revenue Code of 1986, as amended.
1 unchanged sentence
Notwithstanding the reduction in the corporate income tax rate, the overall impact of the TCJA is uncertain and our business and financial condition have been and could continue to be adversely affected by the TCJA.
−Removed: In 2020, in response to the COVID-19 pandemic, the CARES Act and related federal and state programs provided temporary relief from some of the adverse provisions of the TCJA but such programs have a limited term and may not have a positive impact on our business.
−Removed: The change in the federal administration in January 2021 may result in an increase in corporate and individual income tax rates and the repeal of certain taxpayer favorable provisions of the TCJA and other legislation which may adversely affect our business and financial condition.
+Added: The Biden Administration has indicated that it supports increases in corporate and certain individual income tax rates and may in the future propose additional measures to repeal certain taxpayer favorable provisions of the TCJA and other legislation, which may adversely affect our business and financial condition.
holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock, which may cause non-US investors not to invest in our Company.
20 unchanged sentences
holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock.
−Removed: Our income tax provision and tax reserves may be insufficient if a taxing authority is successful in asserting positions that are contrary to our interpretations and related reserves, if any.
+Added: Our income tax provision and tax reserves may be insufficient if a taxing authority is successful in asserting positions that are contrary to our interpretations and related reserves, if any, and we may not realize our deferred tax assets.
Significant judgment is required in determining our provision for income taxes and our reserves for federal, state, and local taxes.
4 unchanged sentences
We are periodically audited by various federal, state, and local authorities regarding tax matters.
−Removed: Our current audits are in various stages of completion;
−Removed: however, no outcome for a particular audit can be determined with certainty prior to the conclusion of the audit, appeal, and, in some cases, litigation process.
As each audit is concluded, adjustments, if any, are recorded in our financial statements in the period determined.
1 unchanged sentence
If these reserves are insufficient upon completion of an audit, there could be an adverse impact on our financial position, cash flows, and results of operations.
+Added: As of December 31, 2021, we are not currently under audit by any federal, state, or local authorities.
+Added: We may be subject to U.S.
+Added: federal income tax and various state income tax examinations for calendar tax years ending 2016 through 2021.
+Added: We are required to recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities.
+Added: Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment.
+Added: When it is more likely than not that a portion or all of a deferred
+Added: tax asset will not be realized in the future, we record a corresponding valuation allowance against the deferred tax asset.
+Added: As of December 31, 2021 and 2020, we had deferred tax assets, net of deferred tax liabilities, of $21.2 million and $12.5 million, respectively, against which we provided no valuation allowance.
+Added: The ultimate realization of our deferred tax assets is dependent upon generating future taxable income.
+Added: While we have not recorded valuation allowances against our deferred tax assets, the valuation allowances are subject to change as facts and circumstances change.
+Added: The value of our deferred tax assets and liabilities are also dependent upon the tax rates expected to be in effect at the time they are realized.
+Added: A change in enacted corporate tax rates in our major jurisdictions, especially the U.S.
+Added: federal corporate tax rate, would change the value of our deferred taxes, which could be material.
Risk Related to Possible Conflicts of Interest
As a result of Dale Francescon’s and Robert Francescon’s relationship with the Company, conflicts of interest may arise with respect to any transactions involving or with Dale Francescon, Robert Francescon, or their affiliates, and their interests may not be aligned with yours.
−Removed: Dale Francescon and Robert Francescon are our Co-Chief Executive Officers, sit on our board of directors, are brothers, and collectively beneficially owned 3,785,164 shares of our common stock, including 179,866 shares issuable upon vesting of RSU awards within 60 days of December 31, 2020, which together represents 11.3% of our common stock outstanding as of December 31, 2020.
+Added: Dale Francescon and Robert Francescon are our Co-Chief Executive Officers, sit on our board of directors, are brothers, and collectively beneficially owned 3,715,231 shares of our common stock, including 261,520 shares issuable upon vesting of performance share unit awards within 60 days of December 31, 2021, which together represents 11.0% of our common stock outstanding as of December 31, 2021.
For so long as Dale Francescon and Robert Francescon control such a significant percentage of our common stock, they will have significant influence over the power to:
46 unchanged sentences
To raise capital resources, we have offered and sold debt and equity securities, including securities that rank senior to our common stock, and may continue to do so in the future.
−Removed: For example, in May 2019, we sold and issued $500.0 million aggregate principal amount of 6.750% senior notes due 2027.
+Added: For example, in August 2021, we sold and issued $500.0 million aggregate principal amount of 3.875% senior notes due 2029.
Upon a bankruptcy or liquidation, holders of our debt securities and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock.
13 unchanged sentences
The existence of our stock repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock.
−Removed: Additionally, repurchases under our stock repurchase program will diminish our cash reserves and could increase our
−Removed: indebtedness.
+Added: Additionally, repurchases under our stock repurchase program will diminish our cash reserves and could increase our indebtedness.
There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased such shares.
14 unchanged sentences
In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on it.
−Removed: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Annual Report on Form 10-K could result in the actual operating results being different than our guidance, and such differences may be adverse and material.
+Added: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this Form 10-K could result in the actual operating results being different than our guidance, and such differences may be adverse and material.
The failure to achieve such guidance could disappoint investors and analysts and cause the market price of our common stock to decline.
−Removed: holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock, which may cause non-US investors not to invest in our Company.
−Removed: Because of our holdings in United States real property interests, we believe we are and will remain a “ United States real property holding corporation ” for United States federal income tax purposes.
−Removed: As a USRPHC, our stock may be treated as a United States real property interest, gains from the sale of which by non-U.S.
−Removed: holders would be subject to U.S.
−Removed: income tax and reporting obligations pursuant to the Foreign Investment in Real Property Tax Act.
−Removed: Our common stock will not be treated as a USRPI if it is regularly traded on an established securities market, except in the case of a non-U.S.
−Removed: holder that actually or constructively holds more than five percent of such class of stock at any time during the shorter of the five-year period preceding the date of disposition or the holder ’ s holding period for such stock.
−Removed: We anticipate that our common stock will continue to be regularly traded on the New York Stock Exchange.
−Removed: However, no assurance can be given that our common stock will remain regularly traded in the future.
−Removed: If our common stock is treated as a USRPI, a non-U.S.
−Removed: holder would be subject to regular United States federal income tax with respect to any gain on such stock in the same manner as a taxable U.S.
−Removed: holder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals).
−Removed: In addition, the purchaser of the common stock would be required to withhold and remit to the I.R.S.
−Removed: 10% of the purchase price unless an exception applies.
−Removed: holder also would be required to file a U.S.
−Removed: federal income tax return for any taxable year in which it realizes a gain from the disposition of our common stock that is subject to U.S.
−Removed: federal income tax.
−Removed: Because of these adverse tax consequences, non-U.S.
−Removed: investors may choose not to invest in our Company.
−Removed: holders should consult their tax advisors concerning the consequences of disposing of shares of our common stock.
+Added: We cannot assure you that we will continue to pay dividends on our common stock at the current rate or at all.
+Added: Since May 2021, we have paid a quarterly cash dividend on our common stock.
+Added: The declaration and payment of future dividends are at the discretion of our Board of Directors and will depend on many factors, including our results of operations and financial condition, our capital requirements, and contractual limitations.
+Added: The agreements governing our indebtedness, including our revolving line of credit and the indentures that govern our senior notes, limit our ability to pay dividends and restrict the amount of dividends we may pay.
+Added: If we do not continue to pay dividends on our common stock at the current rate or at all, the market price of our common stock could be adversely affected.
Certain anti-takeover defenses and applicable law may limit the ability of a third party to acquire control of the Company.
Our charter and bylaws and Delaware law contain provisions that may delay or prevent a transaction or a change in control of the Company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders, which could adversely affect the market price of our common stock.
−Removed: Selected provisions of our charter and bylaws .
Our charter and/or bylaws contain anti-takeover provisions that:
8 unchanged sentences
establish advance notice procedures for stockholders to submit nominations of candidates for election to our board of directors and other proposals to be brought before a stockholders meeting.
−Removed: Selected provisions of Delaware law .
−Removed: We are a Delaware corporation, and we have elected to be subject to Section 203 of the DGCL by provision of our charter.
+Added: Additionally, we are a Delaware corporation, and we have elected to be subject to Section 203 of the DGCL by provision of our charter.
In general, Section 203 of the DGCL prevents an “ interested stockholder ” (as defined in the DGCL) from engaging in a “ business combination ” (as defined in the DGCL) with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:
3 unchanged sentences
The DGCL generally defines “ interested stockholder ” as any person who, together with affiliates and associates, is the owner of 15% or more of our outstanding voting stock or is our affiliate or associate and was the owner of 15% or more of our outstanding voting stock at any time within the three year period immediately before the date of determination.
−Removed: We do not currently pay dividends on our common stock;
−Removed: and, consequently, the ability to achieve a return on investment will depend on appreciation in the price of our common stock.
−Removed: We have not declared or paid dividends on our common stock and no steps have been taken to do so in the near term.
−Removed: We currently intend to invest our future earnings, if any, to fund our growth.
−Removed: Therefore, you are not likely to receive any dividends on your common stock in the near term, and capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
General Risk Factors
5 unchanged sentences
Negative publicity may result in a decrease in our operating results that could lead to a decline in the value of our common stock.
+Added: Increased scrutiny from the public, investors, and others regarding our ESG practices could impact our reputation, and compliance with ESG-related policies may impose additional capital and operational expenditures on our business.
+Added: Recently, more attention is being directed towards environmental, social, and governance (“ESG”) practices of publicly traded companies, like us.
+Added: In 2020 and 2021, we enhanced our focus on sustainability by establishing policies addressing ESG, human rights, training and professional development, labor rights, workplace health and safety, diversity and inclusion and vendor conduct.
+Added: Additionally, in 2021, we published our inaugural ESG sustainability report.
+Added: Our ESG sustainability report includes information related to a variety of topics, including our environmental and social initiatives, occupational health and safety, and our carbon footprint.
+Added: The publication of ESG-related policies and an ESG sustainability report may result in increased investor, media, employee and other stakeholder attention to such initiatives.
+Added: It is possible that stakeholders may not be satisfied with our ESG practices or initiatives or the speed with which we are implementing our initiatives.
+Added: Government, media or activist pressure to decrease our carbon footprint, for example, could negatively impact perceptions of our homebuilding practices, which could have a material adverse effect on our business and ability to compete with homebuilders that may be viewed as more sustainable.
+Added: Additionally, organizations that provide information to investors on corporate governance and other matters have developed rating systems for evaluating companies on their approach to ESG.
+Added: Unfavorable ratings may lead to negative investor sentiment, which could have a negative impact on our stock price.
+Added: Any failure, or perceived failure, to respond to expectations related to ESG concerns could cause harm to our business and reputation and could negatively impact employee retention and the willingness of homebuyers to do business with us.
+Added: In addition to the ESG practices described above, we are subject to laws and government regulations that relate to the environment and occupational health and safety, among other matters.
+Added: These laws and regulations, as well as related initiatives, are under active development, subject to change, and may prove difficult and expensive for us to comply with.
+Added: We may be required to make additional capital and operational expenditures, which may have a material adverse effect on earnings, liquidity, financial condition or competitive position.
Information technology failures or data security breaches could expose us to liability and materially adversely affect our results of operations and financial condition.
7 unchanged sentences
This information is entitled to protection under a number of regulatory regimes.
−Removed: We may share some of this information with vendors who assist us with certain aspects of our business, particularly with respect to our mortgage lending business.
+Added: We may share some of this information with vendors who assist us with certain
+Added: aspects of our business, particularly with respect to our mortgage lending business.
If these vendors or we fail to maintain the security of the data which we are required to protect, including via the penetration of network security and the misappropriation of confidential and personal information, we could face business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, any of which could have a material adverse impact on our financial condition and results of operations.
13 unchanged sentences
The existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies, and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner.
−Removed: The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our
−Removed: reporting obligations, subject us to investigations from regulatory authorities or cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us .
+Added: The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to investigations from regulatory authorities or cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us .
UNRESOLVED STAFF COMMENTS.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.