What changed in this filing

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Item 1A. Risk Factors

2024-02-14 compared with 2023-02-15 · 81 added, 65 removed, 219 unchanged (40% of the section changed)

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This could lead to an increase in the number of contract cancellations in our reported sales order numbers.

For example, although long-term interest rates remain low compared to historical averages, in 2022 they increased significantly from their previously historically low averages and are anticipated to continue to increase in the near term.

We believe this increase, coupled with other economic factors, caused our increased cancellation rate.

These risks can also indirectly impact us to the extent our customers need to sell their existing homes to purchase a new home from us if the potential buyer of their home is unable to obtain mortgage financing.

It may also impact the desire for existing homeowners to sell their homes as they may potentially be forfeiting a substantially lower interest rate on their existing home for a higher interest rate mortgage on a new home.

For example, in 2022 mortgage rates increased quickly and significantly from their previously historically low averages.

We believe this increase, coupled with other economic factors, caused the elevated cancellation rate in the latter half of 2022.

While interest rates have stabilized, they are still elevated and are not expected to go down in the near future.

We may have the ability to offset the impact of rising interest rates on affordability by purchasing interest rate locks;

however, there is no guarantee that interest rate locks will be available for us to purchase at desirable terms, or if they are available, there is no guarantee that they will be utilized by potential customers.

however, the cost of these rate locks is expensive and there is no guarantee that interest rate locks will be available for us to purchase at desirable terms, or if they are available, there is no guarantee that they will be utilized by potential customers.

A homebuyer's ability to obtain a mortgage loan is largely subject to prevailing interest rates, lenders’ credit standards and appraisals, and the availability of government-supported programs, such as those from the FHA, the VA, Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").

If credit standards or appraisal guidelines are tightened, or mortgage loan programs are curtailed, potential buyers of our homes may not be able to obtain necessary mortgage financing.

Although no material changes are currently anticipated, if credit standards or appraisal guidelines are tightened, or mortgage loan programs are curtailed, potential buyers of our homes may not be able to obtain necessary mortgage financing.

There can be no assurance that these programs will continue to be available or that they will be as accommodating as they currently are.

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A prolonged tightening of the financial markets could also negatively impact our business.

The above risks can also indirectly impact us to the extent our customers need to sell their existing homes to purchase a new home from us if the potential buyer of their home is unable to obtain mortgage financing.

Our future operations may be adversely impacted by high inflation or deflation.

We, like other homebuilders, may be adversely affected during periods of high inflation, mainly from higher land, construction, labor and materials costs.

Also, higher mortgage interest rates may significantly affect the affordability of mortgage financing to prospective buyers.

Inflation could increase our cost of financing, materials and labor and could cause our financial results and profitability to decline.

Traditionally, we have attempted to pass cost increases on to our customers through higher sales prices and inflation has not historically had a material adverse effect on our business, although in recent months we have absorbed higher material and labor costs which negatively impacted our profitability.

Traditionally, we have attempted to pass cost increases on to our customers through higher sales prices and inflation has not historically had a material adverse effect on our business, although in recent years we have had to absorb higher material and labor costs as well as provided more significant financing incentives to our buyers, both of which have negatively impacted our profitability.

Alternatively, a significant period of deflation could cause a decrease in overall spending and borrowing levels.

This could lead to deterioration in economic conditions, including an increase in the rate of unemployment.

Deflation could also cause the value of our inventories to decline or reduce the value of existing homes below the related mortgage loan balance, which could potentially increase the supply of existing homes.

These, or other factors that increase the risk of significant deflation, could have a negative impact on our business or financial results.

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If the prices for our homes in a given community decline, our neighboring competitors reduce their sales prices (or increase their sales incentives), interest rates increase, the availability of mortgage financing tightens or there is a downturn in local, regional or national economies, homebuyers may elect to cancel their home purchase contracts with us.

We experienced significant cancellations in the last half of 2022 as buyers terminated their existing home purchase contracts due to a variety of reasons, including

uncertainty about current economic conditions, increases in interest rates, changes in personal finances and a shift to resale home inventory due to elongation of cycle times for new homes.

Although the higher cancellations did not have a material adverse effect on our financial results in 2022, we expect that cancellations will trend above normal for at least the first part 2023 and could, in 2023 or in the future, have a material adverse effect on our business as a result of lost sales revenue and the accumulation of unsold housing inventory.

Supply shortages and other risks related to the demand for building materials could materially disrupt our operations and increase costs.

Our ability to timely construct our homes may be significantly impacted by circumstances beyond our control, such as work stoppages, shortages of qualified trades people, lack of utility infrastructure and services, our need to rely on local subcontractors, and shortages or delays in availability of building materials.

For example, we experienced significant cancellations in the latter half of 2022 as buyers terminated their existing home purchase contracts due to a variety of reasons,

including uncertainty about current economic conditions, increases in interest rates, changes in personal finances and a shift to resale home inventory due to elongation of cycle times for new homes.

Cancellations have since returned to normalized levels in 2023.

Significant cancellations in the future could have a material adverse effect on our business if we are unable to slow our existing spec construction, which could result in lost sales revenue and the accumulation of unsold housing inventory.

Supply shortages and other risks could materially disrupt our operations and increase costs.

Our ability to timely construct our homes may be significantly impacted by circumstances beyond our control, such as work stoppages, shortages of qualified trades people or municipal employees, lack of utility infrastructure and services, our need to rely on local subcontractors, and shortages or delays in availability of building materials.

Constraints of raw materials and finished goods or in the distribution channels of our construction inputs can delay delivery of our homes to customers and can increase our building costs or lead to sales orders cancellations.

In 2021 and 2022, supply chain and labor constraints related to sustained demand amid the backdrop of a global pandemic caused our construction cycle times to lengthen, and although we are experiencing a loosening in the supply chain, we believe these conditions may continue for at least the first part of 2023.

These delays impact the timing of our expected home closings and may also result in cost increases that we may not be able to pass to our current or future customers.

Sustained increases in construction costs may, over time, erode our margins, and impact our total order and closing volumes.

Over the last several years, supply chain and labor constraints related to sustained demand amid the backdrop of a global pandemic caused our construction cycle times to lengthen, although 2023 saw a loosening in the supply chain.

If home prices decline, potential buyers may not be able to sell their existing homes, which may negatively impact our sales.

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Declines in home prices could have an adverse effect on our homebuilding business volumes and cash flows.

In the latter half of 2022, home prices declined due to the pressures of rising interest rates and we expect this trend to continue into 2023 and potentially beyond.

In the latter half of 2022 and in early 2023, home prices declined due to the pressures of rising interest rates, although it did not have a material adverse effect on our financial results.

Our ability to acquire and develop raw or partially finished lots may be negatively impacted if we are unable to secure performance bonds.

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Although such instruments are currently accessible, in the future additional performance bonds or letters of credit may be difficult to obtain, or may become difficult to obtain on terms that are acceptable to us.

If we are unable to secure such instruments, progress on affected projects may be delayed or halted or we may be required to expend additional cash, which may adversely affect our financial position and ability to grow our operations.

If we are unable to secure such instruments, progress on affected projects may be delayed or halted or we may be required to expend additional cash or other forms of guarantees, which may adversely affect our financial position and ability to grow our operations.

A reduction in our orders absorption levels may force us to incur and absorb additional community-level costs.

We incur certain overhead costs associated with our communities, such as marketing expenses, real estate taxes and HOA assessments and costs associated with the upkeep and maintenance of our model homes and sales complexes.

We incur certain overhead costs associated with our communities, such as marketing expenses, real estate taxes and homeowners' association assessments and costs associated with the upkeep and maintenance of our model homes and sales complexes.

If our orders absorptions pace decreases and the time required to close out our communities is extended, we would likely incur additional overhead costs, which would negatively impact our financial results.

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Such costs include infrastructure, utilities, property taxes and other related expenses.

A reduction in home absorption rates increases the associated holding costs and extends our time and ability to recover such costs.

A sustained reduction in home absorption rates increases the associated holding costs and extends our time and ability to recover such costs.

Legislation related to tariffs could increase the cost to construct our homes.

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During the last significant downturn that began in 2008, and in certain isolated circumstances afterward, we had to impair many of our real-estate assets to fair-value, incurring large impairment charges which negatively impacted our financial results.

During the second half of 2022, the homebuilding market declined amidst higher interest rates and expected future interest rate increases, inflation and deterioration in the general economy.

While we did not record any material impairment charges in 2022, if the market continues to deteriorate further, we may incur significant impairment charges which would negatively impact our financial results.

During the second half of 2022, the homebuilding market declined amidst higher interest rates and expected future interest rate increases, inflation and deterioration in the general economy, although market conditions have since improved in 2023.

If we are unable to successfully compete in the highly competitive housing industry, our financial results and growth may suffer.

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Home warranty and construction defect claims are common in the homebuilding industry and can be costly.

We sometimes encounter construction defect issues that may be alleged to be widespread within a single community or geographic area and we are currently managing two such issues regarding alleged widespread stucco application issues in some of our markets and HVAC condensation issues in our Florida markets.

We sometimes encounter construction defect issues that may be alleged to be widespread within a single community or geographic area.

See Note 1 - “Business and Summary of Significant Accounting Policies” and Note 16 - "Commitments and Contingencies" in Part II, Item 8 of this Form 10-K for additional information regarding warranty reserves and adjustments .

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Due to health and safety regulatory requirements and the number of projects we work on, health and safety performance is important to the success of our development and construction activities.

Any failure in health and safety performance may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety incident is likely to be costly and could expose us to claims resulting from personal injury or death.

Any failure in health and safety performance may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a significant health and safety incident is likely to be costly and could expose us to claims resulting from personal injury or death.

Such a failure could also generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities, and our ability to attract customers and employees, which in turn could have a material adverse effect on our business, financial condition and operating results.

We experience fluctuations and variability in our operating results on a quarterly basis and, as a result, our historical performance may not be a meaningful indicator of future results.

We historically have experienced, and expect to continue to experience, variability in home sales and results of operations on a quarterly basis.

We experience fluctuations and variability in our operating results, as a result, our historical performance may not be a meaningful indicator of future results.

We historically have experienced, and expect to continue to experience, variability in home sales and results of operations.

As a result of such variability, our historical performance may not be a meaningful indicator of future results.

Factors that contribute to this variability include:

• quarterly seasonal variations in our operating results and capital requirements;

• timing of home deliveries and land sales;

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• conditions of the real estate market in areas where we operate and of the general economy;

• governmental imposed restrictions and consumer reactions related to an epidemic or pandemic (such as stay-at-home orders and similar restrictions in 2020 related to the COVID-19 pandemic);

• governmental imposed restrictions, such as stay-at-home orders, and consumer reactions related to an epidemic or pandemic;

• the cyclical nature of the homebuilding industry;

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We will not be able to control many of these factors, such as economic conditions in the markets where we operate and pressure from competitors.

If we do not have sufficient funds, we may be required to refinance all or part of our existing debt, sell assets or borrow additional funds.

If we do not have sufficient funds, we may be required to refinance all or part of our existing debt, sell assets, issue equity or borrow additional funds.

We cannot guarantee that we will be able to do so on terms acceptable to us, if at all.

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We consider the availability of third-party financing to be a key component of our long-term strategy to grow our business either through acquisitions or through internal expansion.

As of December 31, 2022, our credit ratings were BB+, Ba1, and BB+ by Standard and Poor’s Financial Services, Moody’s Investor Services and Fitch Ratings, respectively, the three primary rating agencies.

As of December 31, 2023, our credit ratings were BBB-, Ba1, and BBB- by Standard and Poor’s Financial Services, Moody’s Investor Services and Fitch Ratings, respectively, the three primary rating agencies.

Any downgrades from these ratings may impact our ability to obtain future additional financing, or to obtain such financing on terms that are favorable to us and therefore, may adversely impact our future operations.

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Any of these events could cause a delay in scheduled closings and a decrease in our revenue, cash flows and earnings.

For example, in September 2022, Hurricane Ian caused limited construction and home closing delays in our Florida markets.

Additionally, such disasters may increase the cost of homeowner's insurance, which could negatively impact our sales and profitability if homeowners are unable to obtain cost-effective insurance.

Risks Related to Our Strategy

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Reduced levels of sales may cause us to re-evaluate the viability of existing land option contracts, resulting in a potential termination of these contracts which may lead to impairment charges.

In the prior homebuilding cycle, a significant portion of our lots were controlled under option contracts.

Historically, a significant portion of our lots were controlled under option contracts.

Such options generally require a cash deposit that will be forfeited if we do not exercise the option or proceed with the lot purchase(s).

During the last significant downturn that began in 2008, we forfeited significant amounts of deposits and wrote off significant amounts of related pre-acquisition costs related to projects we no longer deemed feasible, as they were not projected to generate acceptable returns.

At December 31, 2023, we had Deposits on real estate under option or contract of $111.4 million, of which $97.8 million related to committed projects.

Although our participation in such options is more limited at this time, another downturn in the homebuilding market may cause us to re-evaluate the feasibility of our optioned projects which may result in us forfeiting associated deposits, which would reduce our assets and stockholders’ equity.

Our lack of geographic diversification could adversely affect us if the homebuilding industry in our markets decline.

We have homebuilding operations in Texas, Arizona, California, Colorado, Florida, North Carolina, South Carolina, Georgia, and Tennessee.

We have homebuilding operations in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

Although we have, in recent years, expanded our operations to new markets, our geographic diversification is still more limited than some of our competitors and could adversely impact us if the homebuilding business in our current markets should decline, since we may not have a balancing opportunity in other geographic regions.

Our ability to build energy-efficient technologies at a profitable price point may be replicated by other builders in the future, which could reduce our competitive advantage.

We believe we currently have a competitive advantage over many of the other production homebuilders by virtue of our energy efficiency technologies.

Our communities offer a high level of energy-saving features included in the base price of our homes, and most of our single family detached home plans can accommodate the incorporation of optional solar features to further optimize energy savings.

However, as the demand for energy-efficient homes continues to grow along with government imposed building requirements and societal responses to reduce potential climate change impacts, and other builders become more inclined or required by changing regulatory standards to offer more energy efficient technologies and offer them at a similar or lower price point, it could diminish our competitive advantage in the marketplace.

Shortages in the availability of subcontract labor may delay construction schedules and increase our costs.

We conduct our construction operations only as a general contractor.

Virtually all construction and development work is performed by unaffiliated third-party consultants and subcontractors.

As a consequence, we depend on the continued availability of and satisfactory performance by these consultants and subcontractors for the construction of our communities and homes and to provide related materials.

Virtually all construction and development work is performed by unaffiliated third-party subcontractors and consultants.

As a consequence, we depend on the continued availability of and satisfactory performance by these subcontractors and consultants for the construction of our communities and homes and to provide related materials.

The cost of labor may also be adversely affected by shortages of qualified trades people, changes in laws and regulations relating to union activity and changes in immigration laws and trends in labor migration.

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Although we continually strive to be a partner of choice with our trades, we cannot be assured that in the future there will be a sufficient supply of, or satisfactory performance by, these unaffiliated third-party subcontractors and consultants, which could have a material adverse effect on our business.

Our ability to build energy-efficient technologies at a profitable price point may be replicated by other builders in the future, which could reduce our competitive advantage.

We believe we currently have a competitive advantage over many of the other production homebuilders by virtue of our energy efficiency technologies.

However, as the demand for energy-efficient homes continues to grow along with government imposed building requirements and societal responses to reduce the impact of potential climate change, and other builders become more inclined, or are required by changing regulatory standards, to offer more energy efficient technologies and offer them at a similar or lower price point, it could diminish our competitive advantage in the marketplace.

Our commitment and disclosures related to ESG matters expose us to risks that could adversely affect our reputation and performance.

We have established and publicly announced ESG initiatives, including our commitment to advancing DE&I and addressing climate change and biodiversity concerns.

These statements reflect our current intentions and are not guarantees that we will be able to achieve them.

Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community as well as enforcement authorities.

Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control.

Examples of such risks include:

• the availability and cost of low- or non-carbon-based energy sources;

• the evolving regulatory requirements affecting ESG standards or disclosures and the ability to obtain the required data, especially from third-parties;

• the availability of suppliers that can meet our sustainability, diversity and other ESG standards;

• our ability to recruit, develop and retain diverse talent in our labor markets.

We voluntarily published our third annual ESG report in 2023 which followed certain reporting frameworks that we believe are of value to our investors and other stakeholders.

If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively impacted.

Further, our failure or perceived failure to pursue or fulfill our goals and objectives or to satisfy various reporting standards on a timely basis, or at all, could have similar negative impacts or expose us to government enforcement actions and private litigation.

For example, the SEC has recently proposed extensive climate-related disclosure rules and audit requirements, and California recently adopted climate-related reporting requirements.

Many of the proposed and adopted reporting requirements would require us to gather extensive information from our third-party business partners over which we are unable to exert control or significant influence.

If our third-party business partners are unwilling or unable to provide adequate information, we may be unable to comply with future mandatory reporting and audit requirements at the state or federal level.

Operational Risks

Information technology failures and data security breaches could harm our business.

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

Many of these resources are provided to us and/or maintained on our behalf by third-party service providers pursuant to agreements that specify certain security and service level standards.

We and our service providers employ what we believe are appropriate security, disaster recovery and other preventative and corrective systems and processes.

Additionally, we maintain cyber-security insurance and require our employees to complete ongoing information security training;

We use information technology ("IT") and other digital resources to carry out important operational, financial and marketing activities as well as maintain our business records.

Many of these resources are provided to us and/or maintained on

our behalf by third-party service providers pursuant to agreements that specify certain security and service level standards.

We and our service providers employ what we believe are appropriate security, disaster recovery and other preventative and corrective systems, processes and controls.

Additionally, we maintain cybersecurity insurance and require our employees to complete ongoing information security training;

however, our ability to conduct our business may be impaired if these information technology resources are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, intentional penetration or disruption of our information technology resources by a third party, natural disaster, hardware or software corruption or failure or error (including a failure of security controls incorporated into or applied to such hardware or software), telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions (including the failure to follow our security protocols), or lost connectivity to our networked resources.

For example, during the first quarter of 2020, some of our systems were affected by a malware attack that encrypted certain information on some of our systems and resulted in limitations to certain employee access for a short duration to certain of our systems and services, although all core operating activities continued during our remediation process.

We completed this remediation process and our computer systems were restored, and the incident did not have a material adverse effect on our results of operations and/or financial condition and did not result in any exfiltration of data.

While we continuously assess and enhance our cyber-security controls, we cannot be assured that similar or more serious attacks will not occur in the future.

Such events could have a significant and extended disruption to the functioning of our information technology and other computer resources, damage our reputation and cause us to lose customers and sales, result in the unintended disclosure or the misappropriation of proprietary, personal and confidential information (including information about our homebuyers, employees and business partners), and require us to incur significant expense to address and remediate these kinds of issues.

The release of confidential information may also lead to litigation or other proceedings against us by affected individuals and/or business partners and/or by regulators, and the outcome of such proceedings, which could include penalties or fines, could have a material and adverse effect on our consolidated financial statements and reputation.

In addition, the costs of maintaining adequate protection against such threats, depending on their evolution, pervasiveness and frequency and/or government-mandated standards or obligations regarding protective efforts, are high and expected to continue to increase in the future and may be material to our consolidated financial statements.

While we continuously assess and enhance our cybersecurity controls, we cannot assure you that similar or more serious attacks will not occur in the future.

Such events could have a significant and extended disruption to the functioning of our information technology and other digital resources, damage our reputation and cause us to lose customers and sales, result in the unintended disclosure or the misappropriation of proprietary, personal and confidential information (including information about our homebuyers, employees and business partners), and require us to incur significant expense to address and remediate these kinds of issues.

Beyond our service providers, we depend on independent third parties to handle certain processes required to complete land purchases and home closings, including title insurers, escrow/settlement companies, independent mortgage lenders and other firms involved in real property transactions.

In the latter half of 2023, several third-party companies in the real estate industry experienced cybersecurity incidents that substantially impaired their ability to provide their services.

Although these incidents did not materially impact our operations, should these or other companies experience cybersecurity incidents or IT failures that disrupt or prevent their performance of real estate transaction services, our ability to close on land transactions or our customers’ ability to close on their homes, as well as our production schedules and delivery forecasts, may be significantly disrupted which could have a material impact on our results of operations or financial position.

See Item 1C - “Cybersecurity" in Part I of this Form 10-K for additional information regarding our cybersecurity risk management, strategy and governance .

The loss of key personnel may negatively impact us.

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As each audit is conducted, adjustments, if any, are recorded in our consolidated financial statements in the period determined.

Such differences could have a material adverse effect on our income tax provision or benefit, or other tax reserves, in the reporting period in which such determination is made and, consequently, on our results of operations, financial position and/or cash flows for such period.

Such differences could have a material adverse effect on our income tax provision or benefit, or other tax reserves or assets, in the reporting period in which such determination is made and, consequently, on our results of operations, financial position and/or cash flows for such period.

We have no federal or state income tax examinations being conducted at this time.

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With growing concern from government agencies and the general public over the effects of climate change on the environment, we may be subject to additional regulatory responses to reduce greenhouse gas emissions and combat climate change that may increase our costs particularly as they relate to land development and home construction activities.

Most recently, for example, in California, we were subject to the California Energy Commission’s Building Energy Efficiency Standards under Title 24.

Most recently, for example, in California, we are subject to the California Energy Commission’s Building Energy Efficiency Standards under Title 24 of the California Energy Code.

As part of the updated building codes, all homes constructed in California with permits obtained in 2020 and beyond are required to have solar panels, which we offer as standard feature for homes built in the state.

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Similarly, energy-and climate-related initiatives affect a wide variety of companies throughout the United States and the world and because our operations are heavily dependent on significant amounts of raw materials, such as lumber, steel, and concrete, they could have an indirect adverse impact on our operations and profitability to the extent the manufacturers and suppliers of our materials are burdened with expensive cap and trade and similar energy and climate-related regulations.

The increasing attention to ESG matters and our responses to these matters could have an adverse effect on our business and reputation.

For example, the SEC has recently proposed extensive climate-related disclosure rules and audit requirements.

We voluntarily published our second annual ESG report in 2022 which followed certain reporting frameworks that we believe are of value to our investors and other stakeholders.

However, if mandatory reporting and audit requirements are adopted, it would likely impose significant compliance costs on us.

We intend to continue to research, evaluate, and implement applicable disclosures and initiatives related to ESG matters, however, if we are unable to adequately address such ESG matters or fail to comply with future mandatory reporting requirements, it could negatively impact our reputation and our business results.

Our financial services operations are subject to extensive regulations that could cause us to incur significant liabilities or restrict our business activities.

Our wholly-owned title company, Carefree Title, provides title insurance and closing settlement services for our homebuyers.

The title and settlement services provided by Carefree Title are subject to various regulations, including regulation by state banking and insurance regulations.

The title and settlement services provided by Carefree Title are subject to various regulations, including regulation by state banking and insurance authorities.

These laws and regulations include many compliance requirements, including but not limited to licensing, consumer disclosures, fair lending and real estate settlement procedures.

As a result, our operations are subject to regular, extensive examinations by the applicable agencies.

Additional future regulations or changing rule interpretations and examinations by regulatory agencies may result in more stringent compliance standards and could adversely affect the results of our operations.

Our mortgage joint venture is engaged in mortgage broker activities and provides services to our homebuyers.

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The mortgage industry remains under intense scrutiny and continues to face increasing regulation at the federal, state and local level.

Although we do not originate mortgages, we are directly or indirectly subject to certain of these regulations.

Although we do not originate mortgages, we may be directly or indirectly subject to certain of these regulations.

In addition, if we are determined to have violated federal or state regulations, we face the loss of our licenses or other required approvals or we could be subject to fines, penalties, civil actions or we could be required to suspend our activities, each of which could have an adverse effect on our reputation, results and operations.

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Unfavorable media related to our industry, company, brand, personnel, operations, business performance, or prospects may impact our stock price and the performance of our business, regardless of its accuracy or inaccuracy.

The speed at which negative publicity is disseminated has increased dramatically through the use of electronic communication, including social media outlets, websites, "tweets", blogs, and similar platforms.

The speed at which negative publicity is disseminated has increased dramatically through the use of electronic communication, including social media outlets, websites, blogs, and similar platforms.

Our success in maintaining and expanding our brand image depends, in part, on our ability to adapt to this rapidly changing media environment.

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For example, the COVID-19 pandemic and the measures undertaken by governmental authorities to address it, initially disrupted or prevented us from operating parts our business in the ordinary course.

With the exception of a brief pause in March and April of 2020, the COVID-19 pandemic and its effects on the economy have not adversely affected our results of operations to date.

With minimal exception, the COVID-19 pandemic and its effects on the economy did not adversely affect our results of operations.

However, future disruptions and governmental actions combined with any associated economic and/or social instability or distress, may have an adverse impact on our results of operations, financial condition and cash flows.

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our intentions and the expected benefits and advantages of our product and land positioning strategies, including with respect to our focus on the first-time and first move-up buyer and housing demand for affordable homes;

the benefits of our financing incentive programs;

the benefits of and our intentions to use options to acquire land;

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our positions and our expected outcome relating to litigation and regulatory proceedings in general;

the sufficiency of our warranty reserves;

that we may repurchase our debt and equity securities;

that we may repurchase, redeem or retire our debt and equity securities;

our non-use of derivative financial instruments;

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the impact of new accounting standards and changes in accounting estimates;

trends and expectations concerning future demand for homes, sales prices, sales orders, cancellations, construction and materials costs and availability, gross margins, profitability, liquidity, land costs, community counts and profitability and future home supply and inventories;

trends and expectations concerning future demand for homes, sales prices, sales orders, construction cycle times, cancellations, labor, construction and materials costs and availability, gross margins, profitability, liquidity, land costs, community counts and profitability and future home supply and inventories;

our DE&I initiatives and intentions;

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the impact of seasonality;

that we may pay dividends in the future;

that we intend to pay dividends in the future;

and our future compliance with debt covenants.

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In addition, we undertake no obligations to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.

Unresolved Staff Comments

Our corporate office is in a leased building located in Scottsdale, Arizona with approximately 72,000 square feet and a September 30, 2023 lease expiration.

We lease an aggregate of approximately 331,000 square feet of office space in our markets for our operating divisions, corporate and executive offices.

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