What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-14 compared with 2024-02-16 · 203 added, 99 removed, 1053 unchanged (22% of the section changed)

8 unchanged sentences

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventory - Refer to Notes 1, 3 and 4 to the financial statements

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This includes, among other things, margins on sales contracts in backlog;

the margins on homes that have been delivered;

the margins on homes that have

been delivered;

expected changes in margins with regard to future home sales over the life of the community and with regard to future land sales;

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( 27,514 ) ( 20,022 ) 2,250

Loss on early extinguishment of debt — — 9,072

Total costs and expenses $ 3,771,062 $ 3,426,225 $ 3,496,186

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Mortgage loan originations ( 2,685,078 ) ( 2,118,884 ) ( 2,069,615 )

Net gain from property disposals — — ( 1,943 )

Proceeds from the sale of mortgage loans 2,571,120 2,191,832 2,103,139

6 unchanged sentences

Amortization of debt issue costs 3,248 2,875 2,568

Loss on early extinguishment of debt — — 2,040

Stock-based compensation expense 14,564 11,370 8,787

1 unchanged sentence

1,863 2,705 ( 7,767 )

Excess tax benefits on equity compensation

( 5,299 ) ( 6,457 ) ( 166 )

Change in assets and liabilities:

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Other liabilities 23,074 ( 28,777 ) 34,508

Net cash provided by (used in) operating activities 552,131 184,071 ( 16,823 )

Net cash provided by operating activities

179,736 552,131 184,071

INVESTING ACTIVITIES:

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Proceeds from sale of mortgage servicing rights 7,615 10,697 200

Proceeds from sale of property — — 8,571

Net cash used in investing activities ( 54,896 ) ( 18,632 ) ( 27,380 )

FINANCING ACTIVITIES:

Repayment of senior notes — — ( 250,000 )

Proceeds from issuance of senior notes — — 300,000

Proceeds from bank borrowings - homebuilding operations — — 362,000

Repayments of bank borrowings - homebuilding operations — — ( 362,000 )

(Net repayments of) net proceeds from bank borrowings - financial services operations

Net proceeds from (Net repayments of) bank borrowings - financial services operations

120,315 ( 79,897 ) ( 20,419 )

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Proceeds from exercise of stock options 21,287 33,795 1,366

Net cash (used in) provided by financing activities ( 112,237 ) ( 81,517 ) 44,103

Net increase (decrease) in cash, cash equivalents and restricted cash 421,262 75,174 ( 24,442 )

Net cash used in financing activities

( 36,074 ) ( 112,237 ) ( 81,517 )

Net increase in cash, cash equivalents and restricted cash

88,766 421,262 75,174

Cash, cash equivalents and restricted cash balance at beginning of period 732,804 311,542 236,368

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Reclassifications.

Certain amounts in our Consolidated Financial Statements for year ended December 31, 2022 were adjusted to conform to our 2023 presentation.

Certain amounts in our Consolidated Financial Statements for years ended December 31, 2022 and 2023 were adjusted to conform to our 2024 presentation.

The Company believes these reclassifications are immaterial.

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Refer to the Revenue Recognition policy described below for additional discussion.

M/I Financial recognizes the fair value of its rights to service a mortgage loan as revenue when the loan is sold.

The fair value of these servicing rights was included in Other Assets on the Consolidated Balance Sheets.

Fair value of the servicing rights is determined based on a third party valuation when the loan is sold.

Inventory includes the costs of land acquisition, land development and home construction, capitalized interest, real estate taxes, direct overhead costs incurred during development and home construction, and common costs that benefit the entire community, less impairments, if any.

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As homes close, we compare the home construction budget to actual recorded costs to date to estimate the additional costs to be incurred from our subcontractors related to the home.

We record a liability and a corresponding charge to cost of sales for the amount we estimate will ultimately be paid related to that home.

We monitor the

accuracy of such estimates by comparing actual costs incurred in subsequent months to the estimate, although actual costs to complete a home in the future could differ from our estimates.

We record a liability and a

corresponding charge to cost of sales for the amount we estimate will ultimately be paid related to that home.

We monitor the accuracy of such estimates by comparing actual costs incurred in subsequent months to the estimate, although actual costs to complete a home in the future could differ from our estimates.

Inventory is recorded at cost, unless events and circumstances indicate that the carrying value of the inventory is impaired, at which point the inventory is written down to fair value as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360”).

The Company assesses inventory for recoverability on a quarterly basis to determine if events or changes in local or national economic conditions indicate that the carrying amount of an asset may not be recoverable.

In conducting our quarterly review for indicators of impairment on a community level, we evaluate, among other things, the margins on sales contracts in backlog, the margins on homes that have been delivered, expected changes in margins with regard to future home sales over the life of the community, expected changes in margins with regard to future land sales, the value of the land itself as well as any results from third party appraisals.

We pay particular attention to communities in which inventory is moving at a slower than anticipated absorption pace, and communities whose average sales price and/or margins are trending downward and are anticipated to continue to trend downward.

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Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business combinations.

As a result of the Company’s acquisition of the homebuilding assets and operations of Pinnacle Homes in Detroit, Michigan on March 1, 2018, the Company recorded goodwill of $ 16.4 million, which is included as Goodwill in our Consolidated Balance Sheets.

As a result of the Company’s acquisition of the homebuilding assets and operations of a builder in Detroit, Michigan on March 1, 2018, the Company recorded goodwill of $ 16.4 million, which is included as Goodwill in our Consolidated Balance Sheets.

This amount was based on the estimated fair values of the acquired assets and assumed liabilities at the date of the acquisition in accordance with ASC 350, Intangibles, Goodwill and Other (“ASC 350”).

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Prepaid acquisition costs 13,744 8,482

Other 43,695 51,519

63,981 43,695

Total other assets $ 169,231 $ 148,369

(a) The increase of Other in 2024 compared to prior year is due to certain receivables not being collected prior to year end.

Warranty Reserves.

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Our warranty reserves for our transferable structural warranty programs are established on a per-unit basis.

While the structural warranty reserve is recorded as each house is delivered, the sufficiency of the structural warranty per unit charge and total reserve is re-evaluated on an annual basis, with the assistance of an actuary, using our own historical data and trends, industry-wide historical data and trends, and other project specific factors.

The reserves are also evaluated quarterly and adjusted if we

encounter activity that is inconsistent with the historical experience used in the annual analysis.

wide historical data and trends, and other project specific factors.

The reserves are also evaluated quarterly and adjusted if we encounter activity that is inconsistent with the historical experience used in the annual analysis.

These reserves are subject to variability due to uncertainties regarding structural defect claims for products we build, the markets in which we build, claim settlement history, insurance and legal interpretations, among other factors.

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The costs of any sales incentives in the form of free or discounted products and services provided to homebuyers are reflected in Land and housing costs in the Consolidated Statements of Income because such incentives are identified in our home purchase contracts with homebuyers as an intrinsic part of our single performance obligation to deliver and transfer title to their home for the transaction price stated in the contracts.

Sales incentives that we may provide in the form of closing cost allowances are recorded as a reduction of housing revenue at the time the home is delivered.

Sales incentives that we may provide in the form of closing cost allowances or mortgage interest rate buydowns are recorded as a reduction of housing revenue at the time the home is delivered.

We record sales commissions within Selling expenses in the Consolidated Statements of Income when incurred (i.e., when the home is delivered) as the amortization period is generally one year or less and therefore capitalization is not required as part of the practical expedient for incremental costs of obtaining a contract.

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All of our home purchase contracts have a single performance obligation as the promise to transfer the home is not separately identifiable from other promises in the contract and, therefore, not distinct.

Our performance obligation, to deliver the agreed-upon home, is generally satisfied in less than one year from the original contract date.

Deferred revenue

resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers is not material.

Our primary performance obligation, to deliver the agreed-upon home, is generally satisfied in less than one year from the original contract date.

Deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers is not material.

Although our third-party land sale contracts may include multiple performance obligations, the revenue we expect to recognize in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material.

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Total revenue $ 4,504,670 $ 4,033,502 $ 4,131,393

(a) Revenues include hedging gains of $ 11.9 million, $ 49.4 million, and $ 1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Hedging gains do not represent revenues recognized from contracts with customers.

(a) Revenues include hedging losses of $ 2.6 million for the year ended December 31, 2024, hedging gains of $ 11.9 million for the year ended December 31, 2023, and hedging gains of $ 49.4 million for the year ended December 31, 2022.

Hedging gains (losses) do not represent revenues recognized from contracts with customers.

Refer to Note 15 for presentation of our revenues disaggregated by geography.

As our homebuilding operations accounted for over 97 % of our total revenues for the years ended December 31, 2023, 2022 and 2021, with most of those revenues generated from home purchase contracts with customers, we believe the disaggregation of revenues as disclosed above and in Note 15 fairly depict how the nature, amount, timing and uncertainty of cash flows are affected by economic factors.

As our homebuilding operations accounted for over 97 %,of our total revenues for the year ended December 31, 2024 and 98 % for both years ended December 31, 2023 and 2022, with most of those revenues generated from home purchase contracts with customers, we believe the disaggregation of revenues as disclosed above and in Note 15 fairly depict how the nature, amount, timing and uncertainty of cash flows are affected by economic factors.

Land and Housing Cost of Sales.

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All other costs are expensed as incurred.

Sales incentives, including pricing discounts and financing costs paid by the Company, are recorded as a reduction of revenue in the Company’s Consolidated Statements of Income.

Sales incentives in the form of options or upgrades are recorded in homebuilding costs.

Income Taxes.

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Diluted earnings per share gives effect to the potential dilution that could occur if securities or contracts to issue our common shares that are dilutive were exercised or converted into common shares or resulted in the issuance of common shares that then shared our earnings.

In periods of net losses, no dilution is computed.

See Note 13 to our Consolidated Financial Statements for more information regarding our earnings per share calculation.

Recently Adopted Accounting Standards.

In October 2023, FASB issued Accounting Standards Update (“ASU”) No.

In October 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-06, Disclosure Improvements:

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The amendments in this update also expand the interim segment disclosure requirements.

ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024.

The Company is currently evaluating the impact the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures, but we do not expect the impact to be significant.

ASU 2023-07 became effective for us for the fiscal year ending December 31, 2024 and we applied the amendments retrospectively to all prior periods presented in our consolidated financial statements.

See Note 15 to our Consolidated Financial Statements for more information regarding our reportable segments.

In December 2023, the FASB issued ASU No.

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The Company is currently evaluating the impact the adoption of ASU 2023-09 may have on our consolidated financial statements and disclosures, but we do not expect the impact to be significant.

In March 2024, the SEC issued Final Rule Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors .

This rule will require registrants to disclose certain climate-related information in registration statements and annual reports.

The rules require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.

The required information about climate-related risks will also include disclosure of a registrant’s greenhouse gas emissions.

In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements.

These requirements are effective for the Company in various fiscal years, starting with the disclosure requirements in the Company's fiscal year beginning January 1, 2025.

Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing.

The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.

The Rule is currently the subject of litigation in the 8th Circuit Court of Appeals.

On April 4, 2024, the SEC voluntarily stayed the implementation of the Rule pending completion of the litigation.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income- Expense Disaggregation Disclosures (Topic 220):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.

ASU 2024-03 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027.

The Company is currently evaluating the impact the adoption of ASU 2024-03 may have on our consolidated financial statements and disclosures.

Stock-Based and Deferred Compensation

We measure and recognize compensation expense associated with our grant of equity-based awards in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718”), which generally requires that companies measure and recognize stock-based compensation expense in an amount equal to the fair value of share-based awards granted under compensation arrangements over the related vesting period.

We have granted share-based awards to certain of our employees and directors in the form of stock options, director stock units, director restricted stock units and performance share units (“PSU’s”).

We have granted share-based awards to certain of our employees and directors in the form of stock options, director stock units, director restricted stock units, employee restricted share units and performance share units (“PSU’s”).

Determining the fair value of share-based awards requires judgment to identify the appropriate valuation model and develop the assumptions.

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1,521,565 $ 48.84 7.53 $ 135,269

Granted 495,500 58.90

Exercised ( 481,665 ) 44.20

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Year Ended December 31,

2023 2022 2021

Risk-free interest rate 4.02 % 1.87 %

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As of December 31, 2024, there was a total of $ 11.7 million of unrecognized compensation expense related to unvested stock option awards that will be recognized as stock-based compensation expense as the awards vest over a weighted average period of 1.7 years for the service awards.

Employee Restricted Share Units

In lieu of issuing stock option awards, on February 15, 2024, the Company awarded certain of its employees 133,149 restricted share units under the 2018 LTIP, at a price of $ 124.66 (the closing price of our common shares on the New York Stock Exchange on such date) that vest ratably over a three-year period (subject to the employee’s continued service on the vesting date (except in certain circumstances)) and will be settled in common shares.

Stock-based compensation expense for our employee restricted share units is recognized over the vesting period applicable to the award (amortized over three years).

The Company recognized compensation expense related to the awards of $ 4.7 million in 2024.

As of December 31, 2024, there was a total of $ 11.5 million of unrecognized compensation expense related to unvested restricted share units that will be recognized as stock-based compensation expense over a weighted average period of 1.5 years.

The following table summarizes employee restricted share units activity for the year ended December 31, 2024, relating to the restricted share units awarded to employees under the 2018 LTIP:

Shares Weighted Average Grant price

Employee RSUs outstanding at December 31, 2023

Granted 133,149 124.66

Forfeited ( 3,208 ) 124.66

Employee RSUs outstanding at December 31, 2024

129,941 $ 124.66

Director Restricted Stock Units

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The grant date fair value for the director restricted stock units is based upon the closing price of our common shares on the date of grant.

Stock-based compensation expense for our director restricted stock units is recognized over the period of the award (amortized over one year).

Stock-based compensation expense for our director restricted stock units is recognized over the vesting period applicable to the award (amortized over one year).

The Company recognized stock-based compensation expense related to the awards of $ 1.4 million in 2024, $ 1.5 million in 2023 and $ 1.4 million in 2022.

As of December 31, 2024, there

was a total of $ 0.5 million of unrecognized compensation expense related to director restricted stock units that will be recognized as stock-based compensation expense in 2025.

The following table summarizes director restricted stock units activity for the year ended December 31, 2024, relating to the restricted stock units awarded to directors under the 2018 LTIP:

Shares Weighted Average Grant price

Director RSUs outstanding at December 31, 2023

68,342 $ 57.79

Granted 11,354 123.23

Forfeited — —

Director RSUs outstanding at December 31, 2024

79,696 $ 67.11

Vested or expected to vest at December 31, 2024

68,342 $ 57.79

Director Stock Units

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For the portion of the PSU’s subject to a Performance Condition, we recognize stock-based compensation expense on a straight-line basis over the Performance Period based on the probable outcome of the related Performance Condition.

If satisfaction of the Performance Condition is not probable, stock-based compensation expense recognition is deferred until probability is attained and a cumulative compensation expense adjustment is recorded and recognized ratably over the

remaining service period.

The Company reassesses the probability of the satisfaction of the Performance Condition on a quarterly basis, and stock-based compensation expense is adjusted based on the portion of the requisite service period that has passed.

If actual results differ significantly from these estimates, stock-based compensation expense could be higher and have a material impact on our consolidated financial statements.

The Company recognized $ 0.2 million and $ 0.9 million of stock-based compensation expense related to the Performance Condition portion of the 2023 and 2022 PSU awards, respectively, during 2023 based on the probability of attaining the Performance Conditions.

The Company has $ 0.4 million of unrecognized stock-based compensation expense related to the Performance Condition portion of each of the 2023 and 2022 PSU awards at December 31, 2023.

The Company has not recognized any stock-based compensation expense related to the Performance Condition portion of the 2024 PSU awards.

If the Company achieves the minimum performance levels for the Performance Condition applicable to the 2024 PSU awards, the Company would record unrecognized stock-based compensation expense of $ 1.0 million as of December 31, 2024, for which $ 0.3 million would be immediately recognized as if attainment had been probable at December 31, 2024.

The Company recognized $ 1.1 million of stock-based compensation expense related to the Performance Condition portion of the 2023 PSU awards during 2024 based on the probability of attaining the Performance Conditions.

The Company has $ 0.6 million of unrecognized stock-based compensation expense related to the Performance Condition portion of the 2023 PSU awards at December 31, 2024.

The Company recognized $ 1.9 million of stock-based compensation expense related to the Performance Condition portion of the 2022 PSU awards as of December 31, 2024 based on the achievement of the maximum performance level.

Based on these results and board approval, 40,343 PSU’s vested during the first quarter of 2025 with respect to the portion of the 2022 PSU awards subject to the Performance Condition.

The following table summarizes PSU activity for the year ended December 31, 2024, relating to the PSU’s awarded under the 2018 LTIP:

Market Conditions

Performance Conditions

Shares Aggregate Intrinsic Value (a)

(In thousands)

Shares Aggregate Intrinsic Value (a)

(In thousands)

PSUs outstanding at December 31, 2023

18,345 $ 1,488 73,392 $ 6,269

Granted 4,171 16,685

Adjustment for performance results achieved (b)

( 9,262 ) ( 37,050 )

Forfeited — —

PSUs outstanding at December 31, 2024

16,342 $ 1,013 65,376 $ 3,913

(a) Intrinsic value is defined as the amount by which the fair value of the underlying common shares exceeds the exercise price of the award.

(b) The adjustment for performance results achieved for the PSU’s granted in 2021 that vested during the first quarter of 2024.

Deferred Compensation Plans

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Common shares are issued from treasury shares upon distribution of equity units from the Plans.

The following table summarizes deferred compensation activity under the Executive Plan for the year ended December 31, 2024:

Shares Weighted Average share price

Deferred Compensation Equity Units outstanding at December 31, 2023

52,552 $ 48.95

Distributions

( 8,747 ) 40.05

Deferred Compensation Equity Units outstanding at December 31, 2024

44,651 $ 52.34

Profit Sharing and Retirement Plan

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These FMBSs, options on FMBSs, and IRLCs covered by FMBSs are considered non-designated derivatives.

These amounts

are either recorded in Other Assets or Other Liabilities on the Consolidated Balance Sheets (depending on the respective balance for that year ended December 31).

These amounts are either recorded in Other Assets or Other Liabilities on the Consolidated Balance Sheets (depending on the respective balance for that year ended December 31).

The Company measures both mortgage loans held for sale and IRLCs at fair value.

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To calculate the effects of interest rate movements, the Company utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount.

The Company applies a fallout rate to IRLCs when measuring the fair value of rate lock commitments.

The Company applies a fallout rate to IRLCs when measuring the fair value of rate lock

Fallout is defined as locked loan commitments for which the Company does not close a mortgage loan and is based on management’s judgment and company experience.

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Typically, the IRLCs will have a term of less than six months;

however, in certain markets, the term could extend to nine months.

however, in certain markets, the term could extend to twelve months.

Some IRLCs are committed to a specific third-party investor through the use of whole loan delivery commitments matching the exact terms of the IRLC loan.

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(2) The carrying values for these assets may have subsequently increased or decreased from the fair value reported due to activities that have occurred since the measurement date.

(3) This amount is inclusive of our investments in joint venture arrangements.

Financial Instruments

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Interest rate lock commitments Level 2 532 532 3,617 3,617

Forward sales of mortgage-backed securities Level 2 2,946 2,946 — —

Notes payable - homebuilding operations Level 2 — — — —

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Notes Payable - Financial Services Operations.

M/I Financial is a party to a $ 300 million mortgage repurchase agreement, dated October 24, 2023 (the “MIF Mortgage Repurchase Facility”).

M/I Financial is a party to a $ 300 million mortgage repurchase agreement, dated October 24, 2023 , as amended most recently in October 2024 (the “MIF Mortgage Repurchase Facility”).

For this credit facility, the interest rate is based on a variable rate index, and thus its carrying value is a reasonable estimate of fair value.

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As of December 31, 2024 and 2023, we had 2,502 homes (with a carrying value of $ 551.3 million) and 2,023 homes (with a carrying value of $ 424.2 million), respectively, included in homes under construction that were not subject to a sales contract.

Homes under construction increased from prior year due to the Company’s inventory management decision to offer more affordable homes that are move-in ready in order for customers to benefit from selective sales incentives.

Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models.

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Capitalized interest, end of period $ 35,953 $ 32,144 $ 29,625

Interest incurred $ 15,823 $ 37,802 $ 38,999

Interest incurred net of interest income

$ 8,348 $ 15,823 $ 37,802

Transactions with Related Parties

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As of December 31, 2024 and 2023, our investment in such joint venture arrangements totaled $ 65.3 million and $ 44.0 million, respectively, and was reported as Investment in Joint Venture Arrangements on our Consolidated Balance Sheets.

The decrease from prior year was driven primarily by lot distributions from our joint venture arrangements during 2023 of $ 31.1 million offset, in part, by our cash contributions to our joint venture arrangements during 2023 of $ 23.6 million.

The increase from prior year was driven primarily by our cash contributions to our joint venture arrangements during 2024 of $ 54.1 million offset, in part, by lot distributions from our joint venture arrangements during 2024 of $ 33.2 million.

The majority of our investment in joint venture arrangements for both 2024 and 2023 consisted of joint ownership and development agreements for which a special purpose entity was not established (“JODAs”).

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Under the equity method, our share of the LLCs’ earnings or loss, if any, is included in our Consolidated Statements of Income.

The Company’s equity in income relating to earnings from its LLCs was less than $0.1 million for both the years ended December 31, 2023 and 2022, and $0.1 million for the year ended December 31, 2021.

There were no losses or income from the Company’s LLCs during the year ended December 31, 2024.

The Company’s equity in income relating to earnings from its LLCs were less than $0.1 million for the years ended December 31, 2023 and 2022.

Our share of the profit relating to lots we purchase from our LLCs is deferred until homes are delivered by us and title passes to a homebuyer.

We believe that the Company’s maximum exposure related to its investment in these joint venture arrangements as of December 31, 2023 was the amount invested of $ 44.0 million, which is reported as Investment in Joint Venture Arrangements

on our Consolidated Balance Sheets.

We believe that the Company’s maximum exposure related to its investment in these joint venture arrangements as of December 31, 2024 was the amount invested of $ 65.3 million, which is reported as Investment in Joint Venture Arrangements on our Consolidated Balance Sheets.

We expect to invest further amounts in these joint venture arrangements as development of the properties progresses.

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(2) the financial condition and near-term prospects of the joint venture arrangement;

and (3) the intent and ability of the Company to retain its investment in the joint venture arrangements for a period of time sufficient to allow for any anticipated recovery in market value.

and (3) the intent and ability of the Company to retain its investment in the joint venture arrangements for a period of time sufficient to allow for any

anticipated recovery in market value.

Due to uncertainties in the estimation process and the significant volatility in demand for new housing, actual results could differ significantly from such estimates.

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Actual future costs associated with these guarantees and indemnities could differ materially from our current estimated amounts.

At December 31, 2023 and 2022, guarantees and indemnities of $ 2.4 million and $ 1.4 million, respectively, were included in Other Liabilities on the Consolidated Balance Sheets.

At both December 31, 2024 and 2023, guarantees and indemnities of $ 2.4 million were included in Other Liabilities on the Consolidated Balance Sheets.

Commitments and Contingencies

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The Company provides standby letters of credit and completion bonds for development work in progress, deposits on land and lot purchase agreements and miscellaneous deposits.

At December 31, 2023, the Company had outstanding approximately $ 391.7 million of completion bonds and standby letters of credit, some of which were issued to various local governmental entities that expire at various times through September 2028.

At December 31, 2024, the Company had outstanding approximately $ 488.4 million of completion bonds and standby letters of credit, some of which were issued to various local governmental entities that expire at various times through August 2029.

Included in this total are:

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At December 31, 2024 and 2023, the corresponding liability of $ 11.8 million and $ 26.9 million, respectively, has been classified as Obligation for Consolidated Inventory Not Owned on the Consolidated Balance Sheets.

The increase in this balance from December 31, 2022 is related primarily to an increase in the number of land purchase agreements that had deposits and prepaid acquisition and development costs that exceeded certain thresholds resulting in the remaining purchase price of the lots to be recorded in inventory not owned, as well as an increase in the aggregate purchase amount of land contracts with specific performance requirements.

The decrease in this balance from December 31, 2023 is related primarily to a decrease in the number of land purchase agreements that had deposits and prepaid acquisition and development costs that exceeded certain thresholds resulting in the remaining purchase price of the lots to be recorded in inventory not owned.

Legal Matters

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During the twelve months ended December 31, 2024, the Company’s operating ROU asset and operating lease liability decreased by $ 2.5 million and $ 2.2 million, respectively, as a result of $ 9.5 million of additional ROU asset amortization and $ 9.2 million of additional periodic lease expense, offset partially by $ 7.0 million in additional leases and modifications to existing leases throughout the period (which is recorded within its Consolidated Statement of Cash Flows in the change in Other Assets and Other Liabilities).

The Company also obtained non-cash lease ROU assets in exchange for lease liabilities of $ 7.0 million and $ 5.2 million during the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company’s ROU asset was $ 53.9 million, and its operating lease liability had a balance of $ 55.4 million on its Consolidated Balance Sheets.

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(In thousands)

2024 $ 10,864

Thereafter 29,775

27 unchanged sentences

6/1/2022 5/1/2053 5.40 % 3,365 3,365

4/1/2024 5/1/2053 5.58 % 2,590 —

Total CDD bond obligations issued and outstanding $ 48,190 $ 45,600

6 unchanged sentences

Interest on amounts borrowed under the Credit Facility is payable at multiple interest rate options including one, three or six month adjusted term SOFR (subject to a floor of 0.25 %) plus a margin of 175 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s leverage ratio).

The Credit Facility also contains certain financial covenants.

At December 31, 2023, the Company was in compliance with all financial covenants of the Credit Facility.

The available amount under the Credit Facility is computed in accordance with a borrowing base, which is calculated by applying various advance rates for different categories of inventory, and totaled $ 2.2 billion of availability for additional senior debt at December 31, 2024.

10 unchanged sentences

Notes Payable - Financial Services

The MIF Mortgage Warehousing Agreement was used to finance eligible residential mortgage loans originated by M/I Financial.

On October 24, 2023 , M/I Financial entered into an amendment to its MIF Mortgage Warehousing Agreement which reduced its borrowing availability to $ 110 million through November 10, 2023.

The borrowing availability under the MIF Mortgage Warehouse Agreement increased to $ 120 million on November 11, 2023.

On December 6, 2023, the Company terminated the MIF Mortgage Warehousing Agreement.

M/I Financial entered into a mortgage repurchase agreement on October 24, 2023 (the “MIF Mortgage Repurchase Facility”), which provides for a maximum borrowing availability of $ 300 million (subject to increases and decreases during certain periods) and expires on October 22, 2024 .

The borrowing availability under the MIF Mortgage Repurchase Facility is $ 300 million from November 11, 2023 through February 9, 2024, will decrease to $ 240 million from February 10, 2024 through September 17, 2024 and will increase to $ 270 million from September 18, 2024 until maturity.

The MIF Mortgage Repurchase Facility provides a maximum borrowing availability of $ 300 million and expires on October 21, 2025 .

The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial.

M/I Financial pays interest on each advance under the MIF Mortgage Repurchase Facility at a per annum rate based on Daily Adjusting One-Month Term SOFR plus a margin as defined in the repurchase agreement.

The MIF Mortgage Repurchase Facility also contains certain financial covenants each of which is defined in the repurchase agreement.

At December 31, 2023 and 2022, M/I Financial’s total combined maximum borrowing availability under its credit facilities was $ 300.0 million and $ 390.0 million, respectively.

At December 31, 2023 and 2022, M/I Financial had $ 165.8 million and $ 245.7 million, respectively, in borrowings outstanding on a combined basis under its then-outstanding credit facilities.

The MIF Mortgage Repurchase Facility also contains certain financial covenants.

At December 31, 2024, M/I Financial was in compliance with all financial covenants of the MIF Mortgage Repurchase Facility.

At December 31, 2024 and 2023, M/I Financial’s total combined maximum borrowing availability under its credit facilities was $ 300.0 million.

At December 31, 2024 and 2023, M/I Financial had $ 286.2 million and $ 165.8 million, respectively, in borrowings outstanding under the MIF Mortgage Repurchase Facility.

As of both December 31, 2024 and 2023, we had $ 300.0 million of our 2030 Senior Notes outstanding.

The 2030 Senior Notes bear interest at a rate of 3.95 % per year, payable semiannually in arrears on February 15 and August 15 of each year, and mature on February 15, 2030 .

The Company may redeem some or all of the 2030 Senior Notes at any time prior to August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” amount set forth in the indenture governing the 2030 Senior Notes.

principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” amount set forth in the indenture governing the 2030 Senior Notes.

In addition, on or after August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), the Company may redeem some or all of the 2030 Senior Notes at a redemption price equal to 100.000 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

2 unchanged sentences

We may redeem all or any portion of the 2028 Senior Notes on or after February 1, 2023 at a stated redemption price, together with accrued and unpaid interest thereon.

The redemption price will initially be 103.713 % of the principal amount outstanding, but will decline to 102.475 % of the principal amount outstanding if redeemed during the 12 month period beginning on February 1, 2024, will further decline to 101.238 % of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2025 and will further decline to 100.000 % of the principal amount outstanding if redeemed on or after February 1, 2026, but prior to maturity.

The redemption price is equal to 101.238 % of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2025 and will decline to 100.000 % of the principal amount outstanding if redeemed on or after February 1, 2026, but prior to maturity.

The 2030 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2030 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things:

22 unchanged sentences

Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business combinations.

In connection with the Company’s acquisition of the homebuilding assets and operations of Pinnacle Homes in Detroit, Michigan in March 2018, the Company recorded goodwill of $ 16.4 million, which is included as Goodwill in our Consolidated Balance Sheets.

In connection with the Company’s acquisition of the homebuilding assets and operations of a builder in Detroit, Michigan in March 2018, the Company recorded goodwill of $ 16.4 million, which is included as Goodwill in our Consolidated Balance Sheets.

This amount was based on the estimated fair values of the acquired assets and liabilities at the date of the acquisition in accordance with ASC 350.

59 unchanged sentences

$ 168,020 $ 139,207 $ 152,312

Year Ended December 31,

(In thousands) 2024 2023 2022

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The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense.

At December 31, 2023, 2022 and 2021, we had no unrecognized tax benefits due to the lapse of the statute of limitations and completion of audits

in prior years.

At December 31, 2024, 2023 and 2022, we had no unrecognized tax benefits due to the lapse of the statute of limitations and completion of audits in prior years.

We believe that our current income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change.

The Company had $ 0.1 million of state NOL carryforwards, net of the federal benefit, at December 31, 2023.

Our state NOLs may be carried forward from one to 15 years, depending on the tax jurisdiction, with $ 0.1 million expiring between 2028 and 2032, absent sufficient state taxable income.

Business Segments

1 unchanged sentence

Operating segments are defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Company’s chief operating decision makers to evaluate performance, make operating decisions and determine how to allocate resources.

The Company’s chief operating decision makers evaluate the Company’s performance in various ways, including:

The Company’s chief operating decision makers consist of the Chief Executive Officer and Chief Financial Officer.

The Company’s chief operating decision makers evaluate the Company’s operating income performance in various ways, including:

(1) the results of our individual homebuilding operating segments and the results of our financial services operations;

1 unchanged sentence

and (3) our consolidated financial results.

The chief operating decision makers use operating income for each segment predominately in the annual budget and forecasting process.

The chief operating decision makers consider budget-to-actual variances for profit measures on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment.

The chief operating decisions maker also use segment operating income to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have identified each homebuilding division as an operating segment because each homebuilding division engages in business activities from which it earns revenue, primarily from the sale and construction of single-family attached and detached homes, acquisition and development of land, and the occasional sale of lots to third parties.

31 unchanged sentences

Total revenue $ 4,504,670 $ 4,033,502 $ 4,131,393

Cost of Sales:

Northern homebuilding $ 1,480,326 $ 1,228,949 $ 1,379,936

Southern homebuilding 1,825,455 1,785,624 1,707,615

Financial services (a)

Total cost of sales $ 3,305,781 $ 3,014,573 $ 3,087,551

General and administrative expense:

Northern homebuilding $ 42,908 $ 36,827 $ 36,659

Southern homebuilding

76,200 65,078 61,775

Financial services (a)

52,826 45,115 41,813

Segment general and administrative expense

$ 171,934 $ 147,020 $ 140,247

Corporate and unallocated general and administrative expense

86,488 75,745 74,564

Total general and administrative expense $ 258,422 $ 222,765 $ 214,811

Selling expense:

Northern homebuilding $ 95,680 $ 81,847 $ 80,142

Southern homebuilding

136,198 124,860 109,698

Financial services (a)

Segment selling expense

$ 231,878 $ 206,707 $ 189,840

Corporate and unallocated selling expense

2,495 2,235 1,740

Total selling expense:

$ 234,373 $ 208,942 $ 191,580

Operating income (loss):

4 unchanged sentences

63,380 48,714 44,382

Segment operating income

$ 795,077 $ 665,202 $ 713,755

Corporate selling, general and administrative expense

( 88,983 ) ( 77,980 ) ( 76,304 )

Total operating income (a)

5 unchanged sentences

13,698 10,360 5,122

Corporate ( 28,493 ) ( 956 ) ( 1,368 )

Segment Interest (income) expense - net

$ 10,916 $ 8,471 $ 3,206

Corporate Interest (income) expense - net

( 38,430 ) ( 28,493 ) ( 956 )

Total interest (income) expense - net

2 unchanged sentences

$ — $ ( 33 ) $ ( 6 )

Loss on early extinguishment of debt (c)

Income before income taxes $ 733,608 $ 607,277 $ 635,207

(a) Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuying customers, with the exception of an immaterial amount of mortgage refinancing.

(b) Other income is comprised of the equity in (income) loss from joint venture arrangements.

The following table shows, by segment, depreciation and amortization expense for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

(In thousands)

2024 2023 2022

Depreciation and amortization:

2 unchanged sentences

Financial services 1,130 810 2,178

Segment depreciation and amortization

$ 8,553 $ 7,448 $ 8,276

Corporate 8,833 8,343 8,898

Total depreciation and amortization $ 17,386 $ 15,791 $ 17,174

(b) Other income is comprised of the gain on the sale of a non-operating asset during the fourth quarter of 2021 as well as equity in income from joint venture arrangements.

(c) Loss on early extinguishment of debt relates to the early redemption of our 5.625% senior notes due 2025 (the “2025 Senior Notes”) during the third quarter of 2021, consisting of a prepayment premium due to early redemption and a write-off of unamortized debt issuance costs .

The following tables show total assets by segment at December 31, 2024 and 2023:

December 31, 2024

(In thousands) Northern Southern Corporate, Financial Services and Unallocated Total

(In thousands) Northern Southern Financial Services

Segment Total Corporate and unallocated Total

Deposits on real estate under option or contract $ 12,209 $ 57,274 $ — $ 69,483 $ — $ 69,483

3 unchanged sentences

Other assets 37,721 132,316 (b)

370,558 540,595

852,005 1,392,600

Total assets $ 1,091,643 $ 2,235,590 $ 370,558 $ 3,697,791 $ 852,005 $ 4,549,796

December 31, 2023

(In thousands) Northern Southern Corporate, Financial Services and Unallocated Total

(In thousands) Northern Southern Financial Services

Segment Total Corporate and unallocated Total

Deposits on real estate under option or contract $ 8,990 $ 42,618 $ — $ 51,608 $ — $ 51,608

13 unchanged sentences

Share Repurchase Program

On July 28, 2021, the Company announced that its Board of Directors approved a new share repurchase program pursuant to which the Company may purchase up to $ 100 million of its outstanding common shares (the “2021 Share Repurchase Program”).

On February 17, 2022, the Company announced that its Board of Directors approved an increase to its 2021 Share Repurchase Program by an additional $ 100 million.

On November 15, 2023, the Company announced that its Board of Directors approved an increase to its 2021 Share Repurchase Program by an additional $ 100 million.

Pursuant to the 2021 Share Repurchase Program, the Company may purchase up to $ 300 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws.

The timing, amount and other terms and conditions of any additional repurchases under the 2021 Share Repurchase Program will be based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements.

The 2021 Share Repurchase Program does not have an expiration date and the Board may modify, discontinue or suspend it at any time.

During the year ended December 31, 2023, the Company repurchased 0.7 million outstanding common shares at an aggregate purchase price of $ 65.3 million under the 2021 Share Repurchase Program.

On May 14, 2024, the Company announced that its Board of Directors approved a new share repurchase program pursuant to which the Company may purchase up to $ 250 million of its outstanding common shares (the “2024 Share Repurchase Program”).

The 2024 Share Repurchase Program replaced the share repurchase program approved by the Board of Directors in 2021 (the “2021 Share Repurchase Program”).

Pursuant to the 2024 Share Repurchase Program, the Company was authorized to purchase up to $ 250 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws.

The timing, amount and other terms and conditions of any additional repurchases under the 2024 Share Repurchase Program was based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements.

During the year ended December 31, 2024, the Company repurchased 1.2 million outstanding common shares at an aggregate purchase price of $ 177.0 million under the 2024 Share Repurchase Program and 2021 Share Repurchase Program.

As of December 31, 2024, $ 106.7 million remained available for repurchases under the 2024 Share Repurchase Program.

On February 11, 2025, the Company announced that its Board of Directors approved a new share repurchase program pursuant to which the Company may purchase up to $ 250 million of its outstanding common shares (the “2025 Share Repurchase Program”).

The 2025 Share Repurchase Program replaces the 2024 Share Repurchase Program.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data