What changed in this filing

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Item 1. Business

2022-11-18 compared with 2021-11-18 · 130 added, 115 removed, 246 unchanged (50% of the section changed)

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We have expanded and diversified our homebuilding operations geographically over the years by investing available capital into our existing markets, start-up operations in new markets and acquisitions of other homebuilding companies.

Our product offerings across our operating markets are broad and diverse.

Our homes range in size from 1,000 to more than 4,000 square feet and in price from $150,000 to more than $1,000,000.

For the year ended September 30, 2021, we closed 81,965 homes with an average closing price of $323,300.

Our position as the most geographically diverse and largest volume homebuilder in the United States provides a strong platform for us to compete for new home sales.

Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

Our homes generally range in size from 1,000 to more than 4,000 square feet and in price from $200,000 to more than $1,000,000.

For the year ended September 30, 2022, our homebuilding operations closed 82,744 homes with an average closing price of $385,100.

Our business operations consist of homebuilding, a majority-owned residential lot development company, financial services, rental and other activities.

Our homebuilding operations are our core business, generating 96% of our consolidated revenues of $27.8 billion in fiscal 2021 and 97% of consolidated revenues of $20.3 billion and $17.6 billion in fiscal 2020 and 2019, respectively.

Our homebuilding operations are our core business, generating 95% of our consolidated revenues of $33.5 billion in fiscal 2022, 96% of consolidated revenues of $27.8 billion in fiscal 2021 and 97% of consolidated revenues of $20.3 billion in fiscal 2020.

Our homebuilding operations generate most of their revenues from the sale of completed homes and to a lesser extent from the sale of land and lots.

Approximately 91% of our home sales revenue in fiscal 2022 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.

Our position as the most geographically diverse and largest volume homebuilder in the United States provides a strong platform for us to compete for new home sales.

Our product offerings include a broad range of homes for entry-level, move-up, active adult and luxury buyers.

Our entry-level homes at affordable price points have experienced very strong demand from homebuyers, as the entry-level segment of the new home market remains under-served, with low inventory levels relative to demand.

During fiscal 2018, we acquired 75% of the outstanding shares of Forestar Group Inc.

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Our financial services operations provide mortgage financing and title agency services to homebuyers in many of our homebuilding markets.

DHI Mortgage, our 100% owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers.

DHI Mortgage originates loans in accordance with purchaser guidelines and sells substantially all of its mortgage production after origination.

Our 100% owned subsidiary title companies serve as title insurance agents by providing title insurance policies, examination and closing services, primarily to our homebuyers.

DHI Mortgage, our wholly-owned subsidiary, provides mortgage financing services primarily to our homebuyers and sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers after origination.

Our wholly-owned subsidiary title companies serve as title insurance agents by providing title insurance policies, examination, underwriting and closing services, primarily to our homebuyers.

Our rental segment consists of multi-family and single-family rental operations.

The multi-family rental operations develop, construct, lease, own and ultimately sell the residential properties.

The single-family rental operations construct single-family rental homes with the intent to later market the community for a bulk sale of homes.

The multi-family rental operations develop, construct, lease and sell residential rental properties.

The single-family rental operations primarily construct and lease single-family homes within a community and then market each community for a bulk sale of rental homes.

In addition to our homebuilding, Forestar, financial services and rental operations, we engage in other business activities through our subsidiaries.

We conduct insurance-related operations, own non-residential real estate including ranch land and improvements and own and operate energy related assets.

We conduct insurance-related operations, own water rights and other water-related assets, own non-residential real estate including ranch land and improvements and own and operate energy-related assets.

The results of these operations are immaterial for separate reporting and therefore are grouped together and presented as other.

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We believe our geographic diversification lowers our operational risks by mitigating the effects of local and regional economic cycles, and it also enhances our earnings potential by providing more diverse opportunities to invest in our business.

We conduct our homebuilding operations in the geographic regions, states and markets listed below, and we conduct our financial services operations in many of these markets.

We conduct our homebuilding operations in the geographic regions, states and markets listed below.

Our homebuilding operating divisions are aggregated into six reporting segments, also referred to as reporting regions, which comprise the markets below.

During the fourth quarter of fiscal 2021, we reassessed our operating segments and reportable segments and realigned the aggregation of our homebuilding operating segments into six new reportable segments to better allocate our homebuilding operating segments across geographic reporting regions.

Our financial statements and the notes thereto contain additional information regarding segment performance.

State Reporting Region/Market State Reporting Region/Market

Northwest Region South Central Region

Colorado Colorado Springs Oklahoma Oklahoma City

Fort Collins Texas Austin

Oregon Bend Beaumont

Portland/Salem Bryan/College Station

Utah Salt Lake City Corpus Christi

George Dallas

Washington Seattle/Tacoma/Everett/Olympia Fort Worth

Spokane Houston

Vancouver Killeen/Temple/Waco

Midland/Odessa

Southwest Region New Braunfels/San Marcos

Arizona Phoenix San Antonio

California Bakersfield East Region

Bay Area Georgia Atlanta

Fresno Augusta

Los Angeles County Savannah

Modesto/Merced/Stockton North Carolina Asheville

Riverside County Charlotte

Sacramento Greensboro/Winston-Salem

San Bernardino County Raleigh/Durham

San Diego County Wilmington

Hawaii Oahu South Carolina Charleston

Nevada Las Vegas Columbia

Reno Greenville/Spartanburg

New Mexico Albuquerque Hilton Head

Southeast Region Tennessee Chattanooga

Alabama Birmingham Knoxville

Huntsville Memphis

Mobile/Baldwin County Nashville

Tuscaloosa North Region

Florida Fort Myers/Naples Delaware Central Delaware

Gainesville Northern Delaware

Jacksonville Illinois Chicago

Lakeland Indiana Fort Wayne

Melbourne/Vero Beach Indianapolis

Miami/Fort Lauderdale Northwest Indiana

Ocala Iowa Des Moines

Orlando Kentucky Louisville

Pensacola/Panama City Maryland Baltimore

Lucie Suburban Washington, D.C.

Tallahassee Western Maryland

Tampa/Sarasota Minnesota Minneapolis/St.

Volusia County Nebraska Omaha

West Palm Beach New Jersey Northern New Jersey

Louisiana Baton Rouge Southern New Jersey

Lake Charles/Lafayette Ohio Cincinnati

Mississippi Gulf Coast Columbus

Pennsylvania Central Pennsylvania

Virginia Northern Virginia

Southern Virginia

Northwest Region Southeast Region (Continued)

Colorado Colorado Springs Florida Ocala

Denver Orlando

Fort Collins Pensacola/Panama City

Oregon Bend Port St.

Eugene/Springfield Tallahassee

Portland/Salem Tampa/Sarasota

Utah Salt Lake City Volusia County

George West Palm Beach

Washington Central Washington Louisiana Baton Rouge

Seattle/Tacoma/Everett/Olympia Lake Charles/Lafayette

Spokane Mississippi Gulf Coast

Southwest Region Georgia Atlanta

Arizona Phoenix Augusta

Tucson Central Georgia

California Bakersfield Savannah

Bay Area North Carolina Asheville

Fresno/Tulare Charlotte

Los Angeles County Greensboro/Winston-Salem

Modesto/Merced/Stockton New Bern/Greenville

Riverside County Raleigh/Durham

Sacramento Wilmington

San Bernardino County South Carolina Charleston

Hawaii Oahu Columbia

Nevada Las Vegas Greenville/Spartanburg

Reno Hilton Head

New Mexico Albuquerque Myrtle Beach

Tennessee Chattanooga

South Central Region Knoxville

Arkansas Northwest Arkansas Memphis

Oklahoma Oklahoma City Nashville

Texas Austin North Region

Beaumont Delaware Central Delaware

Bryan/College Station Northern Delaware

Corpus Christi Illinois Chicago

Dallas Indiana Fort Wayne

Fort Worth Indianapolis

Houston Northwest Indiana

Killeen/Temple/Waco Iowa Des Moines

Lubbock Iowa City/Cedar Rapids

Midland/Odessa Kentucky Louisville

New Braunfels/San Marcos Maryland Baltimore

San Antonio Suburban Washington, D.C.

Western Maryland

Southeast Region Minnesota Minneapolis/St.

Alabama Birmingham Nebraska Omaha

Huntsville New Jersey Northern New Jersey

Mobile/Baldwin County Southern New Jersey

Montgomery Ohio Cincinnati

Tuscaloosa Columbus

Florida Fort Myers/Naples Pennsylvania Central Pennsylvania

Gainesville Philadelphia

Jacksonville Virginia Northern Virginia

Lakeland Richmond

Melbourne/Vero Beach Virginia Beach/Williamsburg

Miami/Fort Lauderdale West Virginia Eastern West Virginia

When evaluating new or existing homebuilding markets for purposes of capital allocation, we consider local, market-specific factors, including among others:

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Operating Division Responsibilities

Each operating division is responsible for:

Each homebuilding operating division is responsible for:

• Site selection, which involves

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Land/Lot Acquisition and Inventory Management

We acquire land for use in our operations after we have completed due diligence and generally after we have obtained the rights (known as entitlements) to begin development or construction work resulting in an acceptable number of residential lots.

We acquire land for use in our homebuilding and rental operations after we have completed due diligence and generally after we have obtained the rights (known as entitlements) to begin development or construction work resulting in an acceptable number of residential lots.

Before we acquire lots or tracts of land, we complete a feasibility study, which includes soil tests, independent environmental studies, other engineering work and financial analysis.

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Subcontractors typically are selected after a competitive bidding process and are retained for a specific subdivision or series of house plans pursuant to a contract that obligates the subcontractor to complete the scope of work at an agreed-upon price.

We employ land development managers and construction superintendents to monitor land development and home construction activities, participate in major design and building decisions, coordinate the activities of subcontractors and suppliers, review the work of subcontractors for quality and cost controls and monitor compliance with zoning and building codes.

We employ land development managers and construction superintendents to monitor land development and home construction activities, participate in major building decisions, coordinate the activities of subcontractors and suppliers, review the work of subcontractors for quality and cost controls and monitor compliance with zoning and building codes.

In addition, our construction superintendents interact with our homebuyers during the construction process and instruct buyers on post-closing home maintenance.

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Construction time for our homes depends on the availability of labor, materials and supplies, the weather, the size of the home and other factors.

We completed the construction of most homes within two to seven months in fiscal 2021, which is longer than prior years, as construction times have been impacted by the labor and materials shortages discussed below.

We completed the construction of most homes in four to nine months during fiscal 2022, which is longer than prior years, as construction times have been impacted by the labor and materials shortages discussed below.

We typically do not maintain significant inventories of land development or construction materials, except for work in progress materials for active development projects and homes under construction.

Generally, the construction materials used in our operations have been readily available from numerous sources, and we have contracts exceeding one year with certain suppliers of building materials that are cancelable at our option.

In fiscal 2021, the effects of the COVID-19 pandemic and labor shortages on manufacturing production, combined with the improvement in economic conditions and the strong demand for new homes, caused multiple disruptions in our supply chain and have resulted in shortages in certain building materials and tightness in the construction labor market, which has caused our construction cycle to lengthen.

In fiscal 2021, our construction cycle time lengthened primarily due to the COVID-19 pandemic and its effects on our supply chain, which resulted in shortages of certain building materials and tightness in the construction labor market.

Continuing supply chain delays and disruptions during fiscal 2022 lengthened our construction cycle time further.

We are subject to governmental regulations that affect our land development and construction operations.

At times, we have experienced delays in receiving the proper approvals from municipalities or other government agencies that have delayed our anticipated development and construction activities in certain communities.

In fiscal 2021 and 2022, we frequently experienced delays in receiving the proper approvals from municipalities or other government agencies, which delayed our anticipated development and construction activities in certain communities.

Cost Controls

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Our Emerald branded communities appeal to buyers in search of higher-end move-up and luxury homes.

Our Express branded communities primarily accommodate a segment of entry-level buyers who are focused on affordability.

Our Express branded communities primarily accommodate entry-level buyers who are focused on affordability.

Our Freedom Homes brand offers homes at affordable price points to active adult buyers seeking a low-maintenance lifestyle.

The percentage of home closings and home sales revenue contributed by each brand during fiscal 2021 was as follows:

Percentage of

Home Closings Percentage of

Home Sales Revenue

Horton 65 % 68 %

Emerald 1 % 2 %

Express 31 % 27 %

Freedom 3 % 3 %

Total 100 % 100 %

We also use names of acquired companies for a period of time after the acquisition.

We currently utilize the Pacific Ridge Homes brand in our Seattle, Washington market and the Terramor Homes brand in our Raleigh, North Carolina market.

The product offerings in all of these markets are similar to, and included with, our D.R.

Horton branded communities shown above.

We market and sell our homes primarily through commissioned employees, and the majority of our home closings also involve an independent real estate broker.

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We market our homes and communities to prospective homebuyers and real estate brokers digitally, through email, search engine marketing, social media and our company website and other real estate websites, in addition to print media and advertisement.

We also use billboards, radio, television, magazine and newspaper advertising locally as necessary.

We also use billboards, radio, television and print advertising locally as necessary.

We attempt to position our subdivisions in locations that are desirable to potential homebuyers and convenient to or visible from local traffic patterns, which helps to reduce advertising costs.

Model homes play an important role in our marketing efforts, and we expend significant effort and resources to create an attractive atmosphere in our model homes.

We also build speculative homes in most of our communities, which allow us to compete effectively with existing homes available in the market and improve our profits and returns.

We also build speculative homes in most of our communities, which allow us to compete effectively with existing homes available in the market and improve our returns.

These homes enhance our marketing and sales efforts to prospective homebuyers who are renters or who are relocating to these markets and require a home within a short time frame, as well as to independent brokers who represent these homebuyers.

We determine our speculative homes strategy in each market based on local market factors, such as new job growth, the number of job relocations, housing demand and supply, seasonality, current sales contract cancellation trends and our past experience in the market.

We attempt to maintain a level of speculative home inventory in each community based on our current and planned sales pace, and we monitor and adjust speculative home inventory on an ongoing basis as conditions warrant.

We determine our speculative homes strategy in each market based on local market factors, such as new job growth and relocations, housing demand and supply, seasonality, current sales contract cancellation trends and our past experience in the market.

We attempt to maintain a level of speculative home inventory in each community based on our current and planned sales pace, and we monitor and adjust speculative home inventory on an ongoing basis.

Sales Contracts and Backlog

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Sales order backlog represents homes under contract but not yet closed at the end of the period.

At September 30, 2021, the value of our backlog of sales orders was $9.5 billion (26,221 homes), an increase of 16% from $8.2 billion (26,683 homes) at September 30, 2020.

At September 30, 2022, the value of our backlog of sales orders was $8.0 billion (19,614 homes), a decrease of 16% from $9.5 billion (26,221 homes) at September 30, 2021.

The average sales price of homes in backlog was $406,600 at September 30, 2022, up from the $360,900 average at September 30, 2021.

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As a percentage of gross sales orders, cancellations of sales contracts were 21% in fiscal 2022 compared to 17% in fiscal 2021.

The length of time between the signing of a sales contract for a home and delivery of the home to the buyer (closing) is generally from one to seven months;

The length of time between the signing of a sales contract for a home and delivery of the home to the buyer (closing) is generally from two to seven months;

therefore, substantially all of the homes in our sales backlog at September 30, 2022 are scheduled to close in fiscal 2023.

Customer Service and Quality Control

Our operating divisions are responsible for pre-closing quality control inspections and responding to customers’ post-closing needs.

Our homebuilding operating divisions are responsible for pre-closing quality control inspections and responding to customers’ post-closing needs.

We believe that a prompt and courteous response to homebuyers’ needs during and after construction reduces post-closing repair costs, enhances our reputation for quality and service and ultimately leads to repeat and referral business from the real estate community and homebuyers.

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Rental Properties

Our multi-family rental operations develop, construct, lease, own and ultimately sell multi-family residential properties that produce rental income.

We primarily focus on constructing garden style multi-family rental communities, which typically accommodate 200 to 400 dwelling units, in high growth suburban markets.

We sold three multi-family rental properties in fiscal 2021 and two multi-family rental properties in fiscal 2020.

During fiscal 2020, we began constructing and leasing single-family homes as income-producing rental communities.

Our single-family rental operations construct single-family rental homes with the intent to later market the community for a bulk sale of homes.

We completed three bulk sales of single-family rental properties in fiscal 2021 and no bulk sales of these properties in fiscal 2020.

Our multi-family rental operations develop, construct, lease and sell residential properties that produce rental income.

We primarily focus on constructing garden style multi-family rental communities, typically accommodating 200 to 400 dwelling units in high growth suburban markets.

We sold 775 multi-family rental units in fiscal 2022 compared to 959 units in fiscal 2021.

Our single-family rental operations construct and lease single-family homes within a community and then market each community for a bulk sale of rental homes.

We sold 774 single-family rental homes in fiscal 2022 compared to 257 homes in fiscal 2021.

Forestar Residential Lot Development Operations

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Forestar is a component of our homebuilding strategy to enhance operational efficiency and returns by expanding relationships with land developers and increasing the portion of our land and lot position controlled through land purchase contracts.

Forestar’s strategy is focused on making investments in land acquisition and development to expand its residential lot development business across a geographically diversified national platform and consolidating market share in the fragmented U.S.

Forestar is investing in land acquisition and development to expand its residential lot development business across a geographically diversified national platform and consolidate market share in the fragmented U.S.

lot development industry.

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Customer Mortgage Financing

We provide mortgage financing services principally to purchasers of our homes in the majority of our homebuilding markets through DHI Mortgage, our 100% owned subsidiary.

DHI Mortgage assists in the sales transaction by coordinating the mortgage application, mortgage commitment and home closing processes to facilitate a timely and efficient home-buying experience for our buyers.

We provide mortgage financing services principally to purchasers of our homes in the majority of our homebuilding markets through DHI Mortgage, our wholly-owned subsidiary.

DHI Mortgage assists in the sales transaction by coordinating the mortgage application, mortgage commitment and home closing processes to facilitate a timely and efficient experience for our homebuyers.

During the year ended September 30, 2022, DHI Mortgage provided mortgage financing services for approximately 69% of our total homes closed, and approximately 98% of DHI Mortgage’s loan volume related to homes closed by our homebuilding operations.

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Title Services

Through our subsidiary title companies, we serve as a title insurance agent in selected markets by providing title insurance policies, examination and closing services primarily to our homebuilding customers.

Through our subsidiary title companies, we serve as a title insurance agent in selected markets by providing title insurance policies, examination, underwriting and closing services primarily to our homebuilding customers.

Human Capital Resources

People and Culture

For the past two fiscal years, despite the COVID-19 pandemic, we increased the number of employees in all of our operating segments and made no reductions to our employee compensation plans or employee benefit plans.

As of September 30, 2021, we employed 11,788 people, of whom 7,947 work in our homebuilding operations, 2,891 in our financial services segment, 482 at our corporate office, 250 for our Forestar subsidiary, 175 in our rental operations and 43 in our other businesses.

For the past three fiscal years, despite the COVID-19 pandemic, we increased the number of employees in all of our operating segments and made no reductions to our employee compensation plans or employee benefit plans.

As of September 30, 2022, we employed 13,237 people, of whom 8,967 work in our homebuilding operations, 3,024 in our financial services segment, 532 at our corporate office, 364 in our rental operations, 291 at our Forestar subsidiary and 59 in our other businesses.

Of our homebuilding employees, 3,893 are involved in construction, 2,054 are sales and marketing personnel and 3,020 are office personnel.

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Our people are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

All of our employees must adhere to a code of conduct that sets standards for appropriate behavior and includes required internal training on preventing, identifying, reporting and stopping any type of discrimination.

All of our employees must certify to their understanding of and adhere to a code of conduct that sets standards for appropriate behavior and includes required internal training on preventing, identifying, reporting and stopping any type of discrimination.

Recruitment, Development and Retention

We are committed to hiring, developing and supporting a diverse workforce and maintaining an inclusive workplace.

We are committed to hiring, developing and supporting an energetic, diverse workforce and maintaining a productive, positive and inclusive workplace.

We believe diversity in the workplace produces unique perspectives and fresh ideas and helps us better serve our customers.

We have an active recruiting team that partners with college campuses and external organizations to identify strong new hires and experienced professionals.

Our paid internship program provides college students and recent graduates an opportunity to work alongside some of the most experienced professionals in the homebuilding industry.

Our management team also supports a culture of developing future leaders from our existing workforce, enabling us to promote from within for many leadership positions.

We believe this provides long-term focus and continuity to our operations while also providing opportunities for the growth and advancement of our employees.

Additionally, the long-term retention of our employees provides us with an experienced, cohesive workforce, which has been vital to achieving our goals.

During fiscal 2022, we held specialized trainings for employees within key business functions of our homebuilding operations, such as purchasing, construction and sales, and we held our inaugural Leadership Development Program, which provides internal training for up and coming leaders within our homebuilding operations.

Additionally, during the fiscal year, 25 employees were placed into a new homebuilding market leadership position, and of those 100% were promoted from within the organization.

The long-term retention of our employees provides us with an experienced, cohesive workforce, which has been vital to achieving our goals.

Our focus on retention is evident in the length of service of our executive, regional and divisional management teams.

The average tenure of our executive team and homebuilding region presidents is 28 years, our homebuilding division presidents is 15 years and our city managers is greater than 10 years.

The average tenure of our executive team is 29 years, our homebuilding region presidents is 20 years, our homebuilding division presidents is 14 years and our city managers is greater than 10 years.

Our Board of Directors is actively involved in the Company’s executive leadership succession planning and is equally committed to our culture of promoting rising talent from within.

Compensation and Benefits

We believe our compensation package and benefits are competitive with others in our industry.

In addition to base pay, eligible employees may participate in our short-term incentive bonus program and/or our stock compensation plan.

We also offer our employees a broad range of benefits, including medical, dental and vision healthcare insurance and paid parental leave.

Additional information about our compensation and employee benefit plans, such as our 401(k) savings plan, employee stock purchase plan and our stock compensation plans, is included in Note K to the accompanying financial statements.

In addition to base pay, eligible employees may participate in our incentive bonus and stock compensation plans, which align their compensation to the interests of our shareholders.

A substantial portion of our executive and senior operating leadership’s total compensation is variable, at-risk pay based on the Company’s performance.

We also offer our employees a broad range of benefits, including paid vacation, holidays, sick time and parental leave;

medical, dental and vision healthcare insurance and life insurance and disability coverage.

The Company is committed to supporting its employees in their health, wellness and financial planning goals.

Additional benefits offered include a 401(k) savings plan, employee stock purchase plan and access to professional resources to support employees with their mental and physical health, financial planning, identity theft protection and legal needs.

Additional information about our compensation and employee benefit plans is included in Note K to the accompanying financial statements.

Workplace Safety and Wellness

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We take workplace safety seriously at our construction sites and in our offices.

We provide third-party training for our field personnel to become certified by the Occupational Safety and Health Administration (OSHA), and we communicate with all of our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well being.

We provide third-party training for our field personnel to become certified by the Occupational Safety and Health Administration;

we provide our teams with many safety resources, including safety checklists, policies, procedures and best practices;

and we communicate with all of our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well-being.

Additionally, because substantially all of our land development and home construction work is performed by subcontractors, we require that our subcontractors maintain safety programs as well.

We implemented safety protocols to protect our employees and our homebuyers during the COVID-19 pandemic.

These protocols include complying with health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

Many of our administrative and operational functions during this time required modification, including some of our workforce working remotely.

Our experienced teams of people adapted to the changes in our work environment and have managed our business successfully during this challenging time.

Our experienced teams adapted to the changes in our work environment and managed our business successfully during this challenging time.

To support our employees throughout the pandemic, employee access to remote work and virtual meetings was expanded.

Once available, COVID-19 vaccinations were provided at no charge through Company sponsored health insurance plans.

We also have had no workforce or salary reductions related to the pandemic.

Additional information regarding human capital is available in the “ESG” section of our Investor Relations website at investor.drhorton.com, and we anticipate including more details regarding human capital and associated initiatives in our upcoming inaugural ESG report.

Environmental, Social & Governance (ESG)

During fiscal 2022, we made significant progress on our ESG initiatives, which included conducting an ESG materiality survey and assessment to understand, confirm and prioritize the topics our stakeholders believe are important to our company.

The key topics that we plan to address in our upcoming inaugural ESG report include, but are not limited to:

• Board oversight, ethics, diversity and independence

• Home affordability and community impact

• Home energy efficiency, quality and safety

• Workplace health and safety

• Talent retention and employee well-being

• Diversity, equity and inclusion

• Responsible land development

• Greenhouse gas emissions

We plan to publish our inaugural ESG report during the first quarter of fiscal 2023.

Business Acquisitions

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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.

What changed 10-K

Item 1. Business