What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-12-19 compared with 2024-12-20 · 34 added, 33 removed, 253 unchanged (21% of the section changed)

Risks Related to Our Business and Industry

We are subject to demand fluctuations in the housing industry.

Any reduction in demand would adversely affect our business, results of operations, and financial condition.

Demand for our homes and rental apartments is subject to fluctuations and difficult to predict, often due to factors outside of our control, such as employment levels, consumer confidence and spending, housing demand, availability of financing for homebuyers, interest rates, availability, quality and prices of new homes compared to existing inventory, and demographic trends.

In a housing market downturn, our sales and results of operations will be adversely affected;

Housing market demand fluctuations have adversely affected, and may continue to adversely affect our business, results of operations, and financial condition.

Demand for our homes is subject to fluctuations and difficult to predict, often due to factors outside of our control, such as employment levels, consumer confidence and spending, overall housing demand, availability of financing for homebuyers, interest rates, availability, quality and prices of new homes compared to existing inventory, and demographic trends.

In a housing market downturn, our sales and results of operations are adversely affected;

we may have significant inventory impairments and other write-offs;

our gross margins may decline significantly from historical levels;

and we may incur substantial losses from operations.

our gross margins are likely to decline significantly from historical levels;

and we may incur

substantial losses from operations.

At any particular time, we cannot accurately predict whether housing market conditions will improve, deteriorate or continue as they exist at that time.

26 unchanged sentences

At October 31, 2025, we had approximately 76,100 home sites that we owned or controlled through options.

In the future, changes in the availability of land, competition for available land, availability of financing to acquire land, zoning regulations that limit housing density, and other market conditions may hurt our ability to obtain land for new residential communities at acceptable prices.

In the future, changes in the availability of land, competition for available land, availability of financing to acquire land (whether directly for us or indirectly through land banks or other land financing vehicles), zoning regulations that limit housing density, and other market conditions may hurt our ability to obtain land for new residential communities at acceptable prices.

If the supply of land appropriate for the development of our residential communities becomes more limited because of these factors or for any other reason, the cost of land could increase and/or the number of homes that we are able to sell and build could be reduced.

Our ability to execute on our business strategies is uncertain, and we may be unable to achieve our goals.

We cannot guarantee that (i) our strategies, which include expanding our presence in existing markets and potential expansion into new markets, offering a wide variety of products and price points, becoming a more capital and operationally efficient home builder, and maintaining an appropriate balance of spec homes for sale relative to our build-to-order homes, and any related initiatives or actions (including home builder acquisitions), will be successful or that they will generate growth, earnings or returns at any particular level or within any particular time frame;

(ii) in the future we will achieve positive operational or financial results or results in any particular metric or measure equal to or better than those attained in the past;

We cannot guarantee that (i) our strategies, which include expanding our presence in existing markets and potential expansion into new markets, offering a wide variety of products and price points, becoming a more capital and operationally efficient home builder, and maintaining an appropriate balance of spec homes for sale relative to our build-to-order homes, and any related initiatives or actions (including home builder acquisitions or dispositions, like our previously disclosed planned exit from the multifamily development business), will be successful or that they will generate growth, earnings or returns at any particular level or within any particular time frame;

(ii) in the future we will achieve positive operational or financial results or

results in any particular metric or measure equal to or better than those attained in the past;

or (iii) we will perform in any period as well as other home builders.

We also cannot provide any assurance that we will be able to maintain our strategies, and any related initiatives or actions, in the future and, due to unexpectedly favorable or unfavorable market conditions or other factors, we may determine that we need to adjust, refine or abandon all or portions of our strategies, and any

related initiatives or actions, though we cannot guarantee that any such adjustments will be successful.

The failure of any one or more of our present strategies, or any related initiatives or actions, or the failure of any adjustments that we may pursue or implement, would likely have an adverse effect on our ability to increase the value and profitability of our business;

22 unchanged sentences

lack of affordability;

a lack of foreign buyer demand;

lack of suitable land for development at reasonable prices;

lack of foreign buyer demand;

severe weather including drought;

natural disasters such as earthquakes and wild fires;

natural disasters such as earthquakes and wildfires;

the risk of local governments imposing building moratoriums and of state or local governments imposing regulations that increase building costs;

14 unchanged sentences

Our condominium and rental multi-unit buildings are subject to fluctuations in delivery volume due to their extended construction time, levels of pre-sales and lease-up, and quick delivery of units once buildings are complete.

Our quarterly operating results will fluctuate depending on the timing of completion of construction of our multi-unit condominium buildings, levels of pre-sales, and the relatively short delivery time of the pre-sold units once the building is

Our quarterly operating results could fluctuate depending on the timing of completion of construction of our multi-unit condominium buildings, levels of pre-sales, and the relatively short delivery time of the pre-sold units once the building is completed.

These sales can result in significant gains or losses that we recognize on our Consolidated Statements of Operations and Comprehensive Income as income from unconsolidated entities.

The timing of these gains or losses cannot be predicted with certainty and, as a result, can cause our net income to fluctuate from quarter to quarter.

In addition to our residential for-sale business, we also develop, operate and/or, in certain situations, sell for-rent apartments, which we accomplish mainly through joint ventures.

In addition to our residential for-sale business, we also develop, operate and/or sell for-rent apartments, which we accomplish mainly through joint ventures.

As noted above, we have agreed to sell a substantial portion of our interests in our for-rent joint ventures and intend to entirely exit the business over time.

Often, the joint venture through which we develop and lease-up a rental property sells the property to a third party or to the joint venture partner upon stabilization.

28 unchanged sentences

We also can suffer damage to our reputation, and may be exposed to possible liability, if subcontractors fail to comply with applicable laws, including laws involving matters that are not within our control.

We have implemented policies that are designed to inform subcontractors of observations of hazardous conditions that could jeopardize the safety of individuals or result in penalties or other legal consequences, and ultimately to reduce or eliminate unsafe acts and conditions.

We have implemented policies that are designed to inform subcontractors of observations of hazardous conditions that could jeopardize the safety of individuals or

result in penalties or other legal consequences, and ultimately to reduce or eliminate unsafe acts and conditions.

However, attempts at mitigation may not be successful and we could be subject to claims relating to actions of, or matters relating to, our subcontractors.

1 unchanged sentence

We have investments in and commitments to certain unconsolidated joint ventures with unrelated parties generally involved in land development, home building and apartment rental development activities.

At October 31, 2024, we had investments of $1.01 billion in unconsolidated entities and were committed to invest or advance up to an additional $312.8 million to these unconsolidated entities if they require additional funding.

These joint ventures generally borrow money to help finance their activities.

22 unchanged sentences

These claims are common in the home building industry and can be costly.

In addition, insuring against construction defect and product liability claims has become increasingly difficult due to limited coverage options, high costs, lack of reinsurance options and the exit of insurers from the market.There can be no assurance that any form of insurance coverage will be available in the future or, if it is offered, that it will be available on reasonable terms.

There can be no assurance that any form of insurance coverage will be available in the future or, if it is offered, that it will be available on reasonable terms.

If the limits or coverages of our current and former insurance programs prove inadequate, or we are not able to obtain adequate, or reasonably priced, insurance against these types of claims in the future, or the amounts currently provided for future warranty or insurance claims are inadequate, we may experience losses that could negatively impact our financial results.

1 unchanged sentence

These estimated costs are based on an analysis of our historical claims and industry data, and include an estimate of claims incurred but not yet reported.

The projection of losses related to these liabilities requires actuarial assumptions that are subject to variability due to uncertainties regarding construction defect claims relative to our markets and the types of products we build, insurance industry practices, and legal or regulatory actions and/or interpretations, among other

the types of products we build, insurance industry practices, and legal or regulatory actions and/or interpretations, among other factors.

Key assumptions used in these estimates include claim frequencies, severities, and settlement patterns, which can occur over an extended period of time.

3 unchanged sentences

Our quarterly operating results fluctuate with the seasons;

normally, a significant portion of our agreements of sale are entered into with customers in the winter and spring months.

normally, a significant portion of our agreements of sale are entered in the winter and spring months.

Construction of our build-to-order homes typically proceeds after signing the agreement of sale with our customer and typically require nine to 12 months to complete, although construction times may extend beyond 12 months due to a variety of reasons, including high demand, labor shortages, supply chain disruption and municipal related delays.

22 unchanged sentences

In recent years, an increasing number of state and Federal laws and regulations have been enacted or proposed that deal with the effect of climate change on the environment.

These laws and regulations, which are generally intended to directly or indirectly reduce greenhouse gas emissions, conserve water or limit other potential climate change impacts, may impose restrictions or

additional requirements on land development and home construction in certain areas.

These laws and regulations, which are generally intended to directly or indirectly

reduce greenhouse gas emissions, conserve water or limit other potential climate change impacts, may impose restrictions or additional requirements on land development and home construction in certain areas.

Such restrictions and requirements could increase our operating and compliance costs or require additional technology and capital investment, which could adversely affect our results of operations.

19 unchanged sentences

If that happens, our operating results could be harmed.

In the recent past, strong demand for homes combined with supply chain disruptions, labor shortages and municipal related delays caused our construction cycles to lengthen and the costs of building materials to increase.

In the past, strong demand for homes combined with supply chain disruptions, labor shortages and municipal related delays caused our construction cycles to lengthen and the costs of building materials to increase.

Longer construction cycles can lead to increased cancellation rates, lower customer satisfaction and brand diminishment.

1 unchanged sentence

Changes in laws, government regulations, or enforcement priorities, such as the imposition of tariffs (in particular on materials imported from Canada or Mexico) or changes in immigration laws and/or their enforcement, could result in higher component costs, tighter overall labor conditions and a shortage of skilled tradespeople, which could in turn adversely affect our business.

We are subject to one collective bargaining agreement that covers approximately 1% of our employees.

We have not experienced any work stoppages due to strikes by unionized workers, but we cannot make assurances that there will not be any work stoppages due to strikes or other job actions in the future.

We engage independent contractors that employ non-unionized workers to construct our homes.

3 unchanged sentences

Our business and results of operations depend substantially on our ability to obtain financing and lines of credit, whether from bank borrowings or from financing in the public debt mark ets.

Our Revolving Credit Facility, which provides for $1.955 billion

in committed borrowing capacity and letters of credit, and substantial portions of our $650.0 million term loan mature in February 2028, with smaller portions maturing in Novemb er 2025 and November 2026.

In addition, $1.60 billion of our senior notes become due and payable at various times from November 2025 through November 2029.

Our Revolving Credit Facility, which provides for $2.35 billion in committed borrowing capacity and letters of credit, and our $650.0 million term loan mature in February 2030.

$1.75 billion of our senior notes become due and payable at various times from March 2027 through June 2035.

We cannot be certain that we will be able to replace existing financing and credit lines or find additional sources of financing in the future on favorable terms or at all.

6 unchanged sentences

Increases in interest rates can make it more difficult and/or expensive for us to obtain the funds and credit we need to operate our business.

The amount of interest we incur on our revolving bank credit facility and term loan (exclusive of the amount we have hedged with interest rate swap transactions through October 2025 as further described in Note 6 – “Loans Payable, Senior Notes, and Mortgage Company Loan Facility” in Item 15(a)1 of this Form 10-K) fluctuates based on changes in short-term interest rates and the amount of borrowings we incur and letters of credit that are issued.

Following the expiration of certain interest rate swaps in October 2025, the entire amount of interest we incur on our revolving bank credit facility and term loan fluctuates based on changes in short-term interest rates and the amount of borrowings we incur and letters of credit that are issued.

Increases in interest rates generally and/or any downgrade in the ratings that national rating agencies assign to our outstanding debt securities could increase the interest rates we must pay on any subsequent issuances of debt securities, and any such ratings downgrade could also make it more difficult for us to sell such debt securities.

If home buyers are not able to obtain suitable financing, our results of operations may decline.

Our results of operations also depend on the ability of our potential home buyers to obtain mortgages for the purchase of our homes.

Our results of operations also depend on the ability of a substantial portion of our potential home buyers to obtain mortgages for the purchase of our homes.

Mortgage rates have increased significantly since January 2022, which has negatively impacted the overall housing market.

18 unchanged sentences

During the pandemic, overall economic conditions, as well as demand for our homes and our ability to conduct normal business operations became highly unpredictable.

Outbreaks of contagious diseases similar to the pandemic may occur in the future, which could have a significant negative impact on the economy, our ability to conduct normal business operations and our results of operations and financial condition.

Outbreaks of contagious diseases may occur in the future, which could have a significant negative impact on the economy, our ability to conduct normal business operations and our results of operations and financial condition.

Adverse weather conditions, natural disasters, and other conditions could disrupt the development of our communities, which could harm our sales and results of operations.

10 unchanged sentences

We could be adversely impacted by the loss of key management personnel or if we fail to attract qualified personnel.

Our future success depends, to a significant degree, on the efforts of our senior management and our ability to attract qualified personnel.

Our future success depends, to a significant degree, on the efforts of our senior management and our ability to attract and retain qualified personnel.

Competition for qualified personnel in all of our operating markets, as well as within our corporate operations, is intense.

1 unchanged sentence

if we cannot attract qualified personnel to manage our business;

or if we are unable to successfully manage transition matters when our senior executives, several of whom are retirement eligible under our various compensation plans.

or if we are unable to successfully manage transition matters as our senior executives retire, several of whom are retirement eligible under our various compensation plans.

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

13 unchanged sentences

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