What changed in this filing

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Item 1A. Risk Factors

2025-11-19 compared with 2024-11-19 · 56 added, 42 removed, 299 unchanged (25% of the section changed)

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Discussion of our business and operations included in this annual report on Form 10-K should be read together with the risk factors set forth below.

They describe various risks and uncertainties we are or may become subject to, many of which are difficult to predict or beyond our control.

They describe various risks and uncertainties we are or may become subject to, many of which are difficult to predict and beyond our control.

Although the risks are organized and described separately, many of the risks are interrelated.

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Currently, D.R.

Horton has the right to designate four out of six members of our Board, subject to a requirement that we and D.R.

Horton has the right to designate four out of seven members of our Board, subject to a requirement that we and D.R.

Horton use reasonable best efforts to cause at least three directors to qualify as "independent directors," as such term is defined in the New York Stock Exchange ("NYSE") listing rules, and applicable law.

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Currently, D.R.

Horton has the right to designate four out of six members of our Board.

Horton has the right to designate four out of seven members of our Board.

Further, the interests of D.R.

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In addition, we have in the past relied on builder referrals as a source for land development opportunities, and there is a risk that builders may refer such opportunities to land developers other than us as a result of our close alignment with D.R.

Risks Related to Our Business Operations

The homebuilding and lot development industries are cyclical and affected by changes in economic, real estate or other conditions that could adversely affect our business and financial results.

Risks Related to Our Business and our Industry

The homebuilding and lot development industries are cyclical and significantly affected by changes in economic, real estate or other conditions that could adversely affect our business and financial results.

The homebuilding and lot development industries are cyclical and are significantly affected by changes in general and local economic and real estate conditions, such as:

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economy and the real estate market, and in turn, could adversely affect the operating results of our business.

In response to increased inflation, the Federal Reserve has raised interest rates significantly in recent years, which, notwithstanding the recent reduction, has resulted in higher mortgage interest rates.

In response to rising inflation, the Federal Reserve raised interest rates significantly in 2022 and 2023, which led to an increase in mortgage interest rates.

While interest rates have since been lowered and may be lowered further, mortgage interest rates have remained elevated since 2022.

The increase in mortgage interest rates has reduced the affordability of homes and thus affected the demand for finished lots, requiring us to use pricing adjustments and incentives to adapt to current market conditions.

Prolonged periods of elevated mortgage interest rates or further increases in mortgage interest rates could have an adverse impact on our business and financial results.

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Inflation can adversely affect us by increasing costs of land, materials, labor and our cost of capital.

In addition, significant inflation is often accompanied by higher interest rates, which have a negative impact on housing affordability.

In an effort to lower the current rate of inflation, the Federal Reserve has raised interest rates significantly, which has resulted in higher mortgage interest rates.

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• significant increases in the cost of materials and other inputs, including petroleum-based products.

During the last few years, we experienced multiple disruptions in our supply chain, which resulted in shortages of certain construction materials and tightness in the labor market.

In the recent past, we experienced multiple disruptions in our supply chain, which resulted in shortages of certain construction materials and tightness in the labor market.

This caused our construction cycle times to lengthen and costs of construction materials to increase.

Although our construction cycle times have decreased more recently, if shortages and cost increases in construction materials and tightness in the labor market increase, our construction cycle time and profit margins could be adversely impacted.

In addition, newly imposed or increased tariffs, duties and/or trade restrictions, such as those imposed or

increased by the current administration, on imported materials and goods that are used in connection with the construction

and delivery of homes, including steel, aluminum and lumber, may raise homebuilders' costs for these items or for the products made with them.

These factors may cause construction delays or increase costs for homebuilders, which could reduce the pace of home construction and demand for finished lots.

Public health issues such as a major epidemic or pandemic could adversely affect our business and financial results.

and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk.

In the event of a widespread, prolonged actual or perceived outbreak of any contagious disease, such as COVID-19, our operations could be negatively impacted.

In the event of a widespread, prolonged actual or perceived outbreak of any contagious disease, our operations could be negatively impacted.

Such events have had, and could in the future have, an effect on our operations, including a reduction in homebuilder traffic, a disruption in our supply chain, tightness in the labor market or other factors, all of which could reduce demand for our lots.

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Additionally, the physical impacts of climate change may cause these occurrences to increase in frequency, severity and duration.

The climates and geology of many of the states in which we operate, including California, Florida, Texas and other coastal areas where we have some of our larger operations, present increased risks of adverse weather or natural disasters, such as wildfires and hurricanes.

Any such events can temporarily delay our development work and lot sales, unfavorably affect the cost or availability of materials or labor, damage residential lots under construction, lead to changing customer preferences and/or negatively impact demand for residential lots in affected areas.

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However, there has been no material impact on our business from these events or material operational challenges resulting from these events, but they could adversely affect our business in the future.

The climates and geology of many of the states in which we operate, including California, Florida, Texas and other coastal areas where we have some of our larger operations and which have experienced recent natural disasters, present increased risks of adverse weather or natural disasters.

A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage.

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If we are unable to obtain surety bonds when required, our results of operations and cash flows could be adversely affected.

Information technology failures, data security breaches, and the failure to satisfy privacy and data protection laws and regulations could harm our business.

We use information technology and other computer resources to carry out important operational and marketing activities and to maintain our business records.

These information technology systems are dependent upon global communications providers, web browsers, third-party software and data storage providers and other aspects of the Internet infrastructure that have experienced security breaches, cyber incidents, ransomware attacks, significant systems failures and service outages in the past.

Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees, customers, vendors or other users of a company’s systems to disclose sensitive information to gain access to its data, have increased significantly in recent years.

Information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data protection laws and regulations could harm our business.

We use information technology and other computer resources, including artificial intelligence, to carry out important operational and marketing activities and to maintain our business records.

These information technology systems are dependent upon global communications providers, web browsers, third-party software and data storage providers and other aspects of the Internet infrastructure that have experienced cyber security incidents, significant systems failures and service outages in the past.

Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees, customers, vendors or other users of a company’s systems to disclose personal information to gain access to its data, have increased significantly in recent years.

With the use of artificial intelligence, these phishing attacks may contain highly convincing language making them difficult to distinguish from legitimate messages.

The use of remote work environments and virtual platforms may increase our risk of cyber incidents or data security breaches.

Further, geopolitical tensions or conflicts may create a heightened risk of cyber incidents or other data security breaches.

The use of remote work environments and virtual platforms may increase our risk of cyber incidents that could compromise our data.

Further, geopolitical tensions or conflicts may create a heightened risk of these incidents.

Our normal business activities involve collecting and storing information specific to our customers, employees, vendors and suppliers and maintaining operational and financial information related to our business, both in an office setting and remote locations as needed.

A material breach in the security of our information technology systems or other data security controls, or those of the third parties we work with, could include the theft or release of this information.

The unintended or unauthorized disclosure of personal identifying and confidential information as a result of a security breach by any means could lead to litigation or other proceedings against us by the affected individuals or business partners, or by regulators.

The unintended or unauthorized disclosure of personal identifying and confidential information as a result of a cybersecurity incident by any means could lead to litigation or other proceedings against us by the affected individuals or business partners, or by regulators.

The outcome of such proceedings, which could include penalties or fines, could have a significant negative impact on our business.

We may also be required to incur significant costs to protect against damages caused by information technology failures, security breaches, and the failure to satisfy privacy and data protection laws and regulations in the future as legal requirements continue to increase.

The European Union and other international regulators, as well as state governments, have enacted or enhanced data privacy regulations, such as the California Privacy Rights Act, and other governments are considering establishing similar or stronger protections.

These regulations impose certain obligations for handling specified personal information in our systems, including notifying individuals regarding information we have collected from them.

We may also be required to incur significant costs to protect against damages caused by information technology failures, cybersecurity incidents, and the failure to satisfy privacy, data protection, and artificial intelligence laws and regulations in the future as legal requirements continue to increase.

The European Union and other international regulators, as well as state governments, have enacted or enhanced privacy, data protection, and artificial intelligence regulations, such as the California Privacy Rights Act and the Colorado Privacy Act, and other governments are considering establishing similar or stronger protections.

Among other things, these regulations impose certain obligations for handling specified personal information in our systems, including notifying individuals regarding information we have collected from them.

We have incurred costs in an effort to comply with these requirements, but our costs may increase significantly if new requirements are enacted and based on how individuals exercise their rights.

Any loss of sensitive information and failure to comply with these requirements or other applicable laws and regulations in this area could result in substantial penalties, reputational damage or litigation.

Any loss of personal information and failure to comply with these requirements or other applicable laws and regulations in this area could result in substantial penalties, reputational damage or litigation.

We routinely utilize information technology security experts to assist us in our evaluations of the effectiveness of the security of our information technology systems, and we regularly enhance our security measures, which include multiple redundant safeguards, to protect our systems and data.

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We may also incur costs to adapt our cybersecurity program to the evolving threat landscape and to investigate and remediate vulnerabilities or other identified risks.

Although past cybersecurity incidents have not had a material effect on our business or operations to date, in the future, a data security breach, a significant and extended disruption in the functioning of our information technology systems or a breach of any of our data security controls could disrupt our business operations, damage our reputation and cause us to lose customers.

Although past cybersecurity incidents have not had a material effect on our business or operations to date, in the future, a significant and extended disruption in the functioning of our information technology systems or a breach of any of our data security controls could disrupt our business operations, damage our reputation and cause us to lose customers.

Additionally, if a cybersecurity incident is determined to be material, we are subject to additional reporting requirements.

We cannot provide assurances that a security breach, cyber incident, data theft or other significant systems or security failures will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position.

We cannot provide assurances that a cyber incident, including data theft or other significant systems or security failures will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position.

We are subject to litigation or other claims, which could materially and adversely affect us.

Lawsuits, claims and proceedings have been and may in the future be instituted or asserted against us.

Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against.

We intend to defend ourselves vigorously in any litigation that has been or may be instituted against us;

however, litigation is inherently uncertain, and we cannot be certain of the ultimate outcomes of any claims that have arisen or may arise.

Resolution of these types of matters against us may materially affect our ability to conduct our business in the manner that we expect or otherwise adversely affect us.

Litigation, claims or proceedings could also generate negative publicity that could be detrimental to our reputation.

Governmental regulations and environmental matters could increase the cost and limit the availability of property suitable for residential lot development and could adversely affect our business and financial results.

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However, given the rapidly changing nature of environmental laws and matters that may arise that are not currently known, we cannot predict our future exposure concerning such matters, and our future costs to achieve compliance or remedy potential violations could be significant.

Additionally, actual or perceived environmental, social, governance ("ESG") and other sustainability matters and our response to these matters could harm our business.

Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor, cybersecurity and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report.

Additionally, actual or perceived sustainability matters and our response to these matters could harm our business.

Increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor, cybersecurity and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report.

In March 2024, the SEC adopted new rules regarding climate-related disclosures.

Though these rules are currently being challenged in legal proceedings and their effectiveness has been stayed by the SEC, these rules, if they become effective, would require public companies to make a wide range of climate-related disclosures.

Similarly, the State of California has recently enacted its own legislation requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.

These rules were subsequently challenged in legal proceedings, and their effectiveness was stayed by the SEC pending judicial review.

In March 2025, the SEC terminated its defense of the rules;

however, if they become effective, they would require public companies to make a wide range of climate-related disclosures.

Similarly, the State of California has enacted its own legislation requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.

Any of the above factors may alter the environment in which we do business and may increase the ongoing costs of compliance and adversely impact our results of operations and cash flows.

If we are unable to adequately address such ESG matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.

If we are unable to adequately address such sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.

The subcontractors we rely on to perform the actual development of our residential lots are also subject to a significant number of local, state and federal laws and regulations, including laws involving matters that are not within our control.

If the subcontractors who develop our residential lots fail to comply with all applicable laws, we can suffer reputational damage and may be exposed to possible liability.

If the subcontractors who develop our residential lots fail to comply with all applicable laws, we can suffer reputational damage and may be exposed to liability.

Changes in income tax and securities laws could adversely affect our business and financial results

We are subject to income taxes at the federal, state and local levels, and any changes in tax legislation could adversely affect our future effective tax rates and the value of our deferred tax assets.

We are also subject to an extensive number of laws and regulations because our common stock is publicly traded in the capital markets.

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We plan to raise additional capital in the future, and such capital may not be available when needed or at all.

We have a $410 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $600 million, subject to certain conditions and availability of additional bank commitments.

As of September 30, 2025, we had a $640 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1 billion, subject to certain conditions and availability of additional bank commitments.

The facility includes bank commitments of $575 million maturing on December 18, 2029 and $65 million maturing on October 28, 2026.

On October 30, 2025, we exercised the accordion feature under our credit facility and increased the total commitments by $25 million, resulting in total commitments of $665 million, of which $600 million matures on December 18, 2029 and $65 million matures on October 28, 2026.

The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments.

The maturity date of the facility is October 28, 2026.

The revolving credit facility is guaranteed by our wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.

We also have outstanding $400 million principal amount of 3.85% senior notes due 2026 and $300 million principal amount of 5.0% senior notes due 2028, both of which may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements.

We also have outstanding $300 million principal amount of 5.0% senior notes due 2028 and $500 million principal amount of 6.5% senior notes due 2033, all of which may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements.

The notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness and are guaranteed by each of our subsidiaries to the extent such subsidiaries guarantee our revolving credit facility.

We regularly assess our projected capital requirements to fund growth in our business, repay debt obligations and support other general corporate and operational needs, and we regularly evaluate our opportunities to raise additional capital.

We had an effective shelf registration statement filed with the SEC in October 2021, registering $750 million of equity securities, of which $300 million was reserved for sales under our at-the-market equity offering program.

In fiscal 2024, we issued 546,174 shares of common stock under our at-the-market equity offering program for proceeds of $19.7 million, net of commissions and other issuance costs totaling $0.4 million.

In September 2024, we filed a new shelf registration statement, which became effective in October 2024, registering $750 million of equity securities.

At the time of filing the new registration statement, $728.1 million of equity securities remained available for issuance under our prior registration statement, which has since expired.

Our at-the-market program expired in October 2024, and we anticipate entering into a new at-the-market equity offering program under our September 2024 shelf registration statement.

We have an effective shelf registration statement, filed with the SEC in September 2024, registering $750 million of equity securities, of which $300 million is reserved for sales under the at-the-market equity offering program that we entered into in November 2024.

In fiscal 2025, we did not issue any shares under its at-the-market equity offering program.

At September 30, 2025, the full $750 million remained available for issuance under our shelf registration statement, with $300 million reserved for sales under the at-the-market equity offering program.

We plan to raise additional capital in the future, in the form of additional debt or equity, to have sufficient capital resources and liquidity to fund our business needs and future growth plans and repay existing indebtedness.

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Change of Control Purchase Option and Change of Control Default .

Upon the occurrence of a change of control triggering event, as defined in the indentures governing our senior notes, we will be required to offer to repurchase such notes at 101% of their principal amount, together with all accrued and unpaid interest, if any.

Upon the occurrence of a change of control triggering event, as defined in the indentures governing the senior notes, we will be required to offer to repurchase such notes at 101% of their principal amount, together with all accrued and unpaid interest, if any.

Moreover, a change of control, as defined in our revolving credit facility, would constitute an event of default under our revolving credit facility that could result in the acceleration of the repayment of any borrowings outstanding under our revolving credit facility, a requirement to cash collateralize all letters of credit outstanding thereunder and the termination of the commitments thereunder.

If the maturity of our revolving credit facility and/or other indebtedness together having an aggregate principal amount outstanding of $40 million or more is accelerated, an event of default would result under the indentures governing the senior notes, entitling the trustee for the notes or holders of at least 25% in aggregate principal amount of the then outstanding notes to declare all such notes to be due and payable immediately.

If any of our or our restricted subsidiaries’ indebtedness together having an aggregate principal amount outstanding of $40 million or more, in the case of the indenture governing our 5.0% senior notes due 2028, or $75 million or more, in the case of our 6.5% senior notes due 2033, were accelerated and such acceleration were not rescinded or such indebtedness were not satisfied, in either case within 30 days, an event of default would result under the indentures governing the senior notes, entitling the trustee for the senior notes or holders of at least 25%, in the case of the 5.0% senior notes due 2028, or 30%, in the case of the 6.5% senior notes due 2033, in aggregate principal amount of the applicable series of the notes to declare all such notes to be due and payable immediately.

If purchase offers were required under the indentures for the senior notes, repayment of the borrowings under our revolving credit facility were required, or if the notes were accelerated, we can give no assurance that we would have sufficient funds to pay the required amounts.

Our debt agreements contain a number of restrictive covenants which will limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest .

The covenants in the indentures governing our senior notes and the credit agreement governing our revolving credit facility impose, and the terms of any future indebtedness may impose, operating and other restrictions on us and our subsidiaries.

The covenants in the indentures governing the senior notes and the credit agreement governing our revolving credit facility impose, and the terms of any future indebtedness may impose, operating and other restrictions on us and our subsidiaries.

Such restrictions affect or will affect, and in many respects limit or prohibit, among other things, our ability and the ability of certain of our subsidiaries to:

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The stock markets in general may experience extreme volatility that may be unrelated to the operating performance of particular companies.

These broad market fluctuations may adversely affect the trading price of our common stock, make it difficult to predict the market price of our common stock in the future and cause the value of our common stock to decline.

These broad market fluctuations may adversely affect the trading price of our common stock, making it difficult to predict the market price of our common stock in the future and causing the value of our common stock to decline.

Our business may suffer if we lose key personnel.

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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 1A. Risk Factors