NVR INC

Previous wording

Some of the statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases or other public communications, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should,” "could," or “anticipates” or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, our financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, and projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or performance to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by us and our customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by us in our homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which we have little or no control. We undertake no obligation to update such forward-looking statements except as required by law. For additional information regarding risk factors and uncertainties, see Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Current wording

Some of the statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases or other public communications, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should,” "could," or “anticipates” or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, our financial position and financial results, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or performance to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by us and our customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by us in our homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which we have little or no control. We undertake no obligation to update such forward-looking statements except as required by law. For additional information regarding risk factors and uncertainties, see Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Previous wording

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

During the first quarter of 2026, demand for new homes continued to be negatively impacted by affordability issues, high home inventory levels in certain markets, consumer sentiment and economic volatility. We expect that these issues may continue to weigh on demand and home prices. We also expect further margin pressure from higher land prices and from repositioning of communities as the housing market continues to adjust. Although we are unable to predict the extent to which this will impact our operational and financial performance, we believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.

Current wording

During the second quarter of 2026, demand for new homes continued to be negatively impacted by affordability issues, high home inventory levels in certain markets, weak consumer sentiment and economic volatility. We expect that these issues may continue to weigh on demand and home prices. We also expect further margin pressure from higher land prices and from repositioning of communities as the housing market continues to adjust. Although we are unable to predict the extent to which this will impact our operational and financial performance, we believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.

Previous wording

As of March 31, 2026, we controlled approximately 181,700 lots as described below.

Current wording

As of June 30, 2026, we controlled approximately 184,400 lots as described below.

Previous wording

We controlled approximately 172,100 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $1,004,400 and $5,500, respectively. Included in the number of controlled lots are approximately 18,900 lots for which we have recorded a contract land deposit impairment allowance of approximately $113,500 as of March 31, 2026.

Current wording

We controlled approximately 174,900 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $1,012,300 and $7,200, respectively. Included in the number of controlled lots are approximately 20,950 lots for which we have recorded a contract land deposit impairment allowance of approximately $134,950 as of June 30, 2026.

Previous wording

We had an aggregate investment totaling approximately $68,900 in four JVs, expected to produce approximately 8,150 lots. We had additional JV funding commitments totaling approximately $26,000 as of March 31, 2026.

Current wording

We had an aggregate investment totaling approximately $73,300 in four JVs, expected to produce approximately 8,000 lots. We had additional JV funding commitments totaling approximately $23,400 as of June 30, 2026.

Previous wording

We owned land with a carrying value of approximately $19,400 that we intend to develop into approximately 1,450 finished lots.

Current wording

We owned land with a carrying value of approximately $21,100 that we intend to develop into approximately 1,500 finished lots.

Previous wording

In addition, we have certain properties under contract with land owners that are expected to yield approximately 37,000 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. As of March 31, 2026, these properties are controlled with deposits in cash totaling approximately $48,100, of which approximately $12,900 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Current wording

In addition, we have certain properties under contract with land owners that are expected to yield approximately 38,600 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. As of June 30, 2026, these properties are controlled with deposits in cash totaling approximately $50,000, of which approximately $12,800 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Previous wording

Our consolidated revenues for the first quarter of 2026 totaled $1,881,063, a 22% decrease from the first quarter of 2025. Net income for the first quarter ended March 31, 2026 was $198,359, or $67.76 per diluted share, decreases of 34% and 29% when compared to the first quarter of 2025, respectively. Our homebuilding gross profit margin percentage decreased to 19.6% in the first quarter of 2026 from 21.9% in the first quarter of 2025. New orders, net of cancellations (“New Orders”) increased by 7% in the first quarter of 2026 compared to the first quarter of 2025. The average sales price for New Orders in the first quarter of 2026 was $440.1, a decrease of 2% compared to the first quarter of 2025.

Current wording

Our consolidated revenues for the second quarter of 2026 totaled $2,326,356, a decrease of 10% from the second quarter of 2025. Net income for the second quarter ended June 30, 2026 was $236,458, or $83.96 per diluted share. For the second quarter ended June 30, 2026, net income decreased 29% and diluted earnings per share decreased 23% when compared to net income and diluted earnings per share for the second quarter of 2025, respectively. Our homebuilding gross profit margin percentage decreased to 19.2% in the second quarter of 2026 from 21.5% in the second quarter of 2025. New orders, net of cancellations (“New Orders”) increased by 9% in the second quarter of 2026 compared to the second quarter of 2025. The New Order cancellation rate for the second quarter of 2026 decreased to 14.9% from 16.5% in the same period in 2025. The average sales price for New Orders in the second quarter of 2026 was $437.1, a decrease of 5% compared to the same period in the prior year.

Previous wording

Homebuilding revenues decreased 22% in the first quarter of 2026 compared to the same period in 2025, as a result of a 22% decrease in the number of units settled. The decrease in the number of units settled was attributable to a 15% lower backlog unit balance entering 2026 compared to 2025, coupled with a lower backlog turnover rate quarter over quarter. The gross profit margin percentage in the first quarter of 2026 decreased to 19.6%, compared to 21.9% in the first quarter of 2025. Gross profit margin was negatively impacted by continued pricing pressure and higher lot costs.

Current wording

Homebuilding revenues decreased 11% in the second quarter of 2026 compared to the same period in 2025, as a result of a 8% decrease in units settled, coupled with a 3% decrease in average price of units settled. The decrease in units settled was primarily attributable to a lower backlog turnover rate quarter over quarter. Gross profit margin percentage in the second quarter of 2026 decreased to 19.2% from 21.5% in the second quarter of 2025. Gross profit margin was negatively impacted by higher lot costs, pricing pressure due to continued affordability challenges and weak consumer sentiment. In addition, margins were impacted by contract land deposit impairments totaling approximately $21,700, compared to $13,200 in the second quarter of 2025.

Previous wording

Selling, general and administrative (“SG&A”) expense in the first quarter of 2026 decreased by approximately $8,100 compared to the first quarter of 2025, but increased as a percentage of revenue to 8.6% from 7.0%. The decrease in SG&A expense was primarily attributable to a decrease of approximately $4,700 in equity-based compensation and a decrease of approximately $3,500 in personnel costs due primarily to a decrease in headcount quarter over quarter.

Current wording

SG&A expense in the first six months of 2026 decreased by approximately $6,600 compared to the same period in 2025, but increased as a percentage of revenue to 7.5% in 2026 from 6.4% in 2025. The decrease in SG&A expense was primarily attributable to a decrease of approximately $3,500 in personnel costs due primarily to lower headcount and a decrease of approximately $3,100 in equity based compensation expense year over year.

Previous wording

Our backlog represents homes sold but not yet settled with our customers. As of March 31, 2026, backlog on a unit basis remained flat at 10,171 units and on a dollar basis decreased 3% to $4,698,779 when compared to 10,165 units and $4,837,847, respectively, as of March 31, 2025.

Current wording

Our backlog represents homes sold but not yet settled with our customers. As of June 30, 2026, our backlog increased on a unit basis by 9% to 10,998 units and on a dollar basis by 5% to $4,992,229, when compared to 10,069 units and $4,753,905, respectively, as of June 30, 2025. The increase in the number of backlog units was primarily attributable to an 8% increase in New Orders year over year. Backlog dollars were higher primarily due to the increase in backlog units in 2026, offset partially by a 4% decrease in the average price of backlog units year over year.

Previous wording

Our backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as failure to obtain mortgage financing, inability to sell an existing home, job loss, or a variety of other reasons. In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the opening backlog for the current period. Our first quarter cancellation rate was approximately 14% and 16% for 2026 and 2025, respectively, calculated as the total of all cancellations during the period as a percentage of gross sales during that same period. During the most recent four quarters, approximately 6% of the quarter’s opening backlog cancelled during the fiscal quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur during the remainder of 2026 or future years. Other than those units that are cancelled, we expect to settle substantially all of our March 31, 2026 backlog within the next twelve months.

Current wording

Our backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as failure to obtain mortgage financing, inability to sell an existing home, job loss, or a variety of other reasons. In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the opening backlog for the current period. Our cancellation rate was approximately 14% and 16% in the first six months of 2026 and 2025, respectively, calculated as the total of all cancellations during the period as a percentage of gross sales during the same period. During the most recent four quarters, approximately 6% of a reporting quarter’s opening backlog cancelled during the fiscal quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur during the remainder of 2026 or future years. Other than units that are cancelled, we expect to settle substantially all of our June 30, 2026 backlog within the next twelve months.

Previous wording

We record charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. We evaluate our entire net contract land deposit portfolio for impairment each quarter. For presentation purposes below, the contract land deposit allowance as of March 31, 2026 and December 31, 2025 has been allocated to the respective year’s reportable segments to show contract land deposits on a net basis. The net contract land deposit balances below also include approximately $5,500 and $4,600 as of March 31, 2026 and December 31, 2025, respectively, of letters of credit issued as deposits in lieu of cash.

Current wording

We record charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. We evaluate our entire net contract land deposit portfolio for impairment each quarter. For presentation purposes below, the contract land deposit reserve as of June 30, 2026 and December 31, 2025 has been allocated to the respective year’s reportable segments to show contract land deposits on a net basis. The net contract land deposit balances below also include approximately $7,200 and $4,600 as of June 30, 2026 and December 31, 2025, respectively, of letters of credit issued as deposits in lieu of cash.

Previous wording

The following tables summarize certain homebuilding operating activity by reportable segment for the three months ended March 31, 2026 and 2025.

Current wording

The following tables summarize certain homebuilding operating activity by reportable segment for the three and six months ended June 30, 2026 and 2025.

Previous wording

The Mid Atlantic segment had an approximate $95,500, or 51%, decrease in segment profit in the first quarter of 2026 compared to the first quarter of 2025. The decrease in segment profit was driven by a decrease in segment revenues of approximately $344,200, or 32%, coupled with a decrease in gross profit margin to 22.2% in the first quarter of 2026 from 24.1% in the same period of 2025. Segment revenues decreased due to a 31% decrease in the number of units settled. The decrease in settlements was primarily attributable to a 22% lower backlog unit balance entering 2026 compared to backlog entering 2025, coupled with a lower backlog turnover rate quarter over quarter. Gross profit margins were negatively impacted by higher lot costs and pricing pressure.

Current wording

The Mid Atlantic segment had an approximate $85,800, or 45%, decrease in segment profit in the second quarter of 2026 compared to the second quarter of 2025. The decrease in segment profit was driven by a decrease in segment revenues of approximately $249,300, or 22%, coupled with a decrease in gross profit margin to 20.9% in the second quarter of 2026 from 23.5% in the same period of 2025. Segment revenues decreased due to an 18% decrease in units settled, coupled with a 5% lower average settlement price quarter over quarter. The decrease in settlements was primarily attributable to a 6% lower backlog unit balance entering the second quarter of 2026 compared to backlog entering the second quarter of 2025, coupled with a lower backlog turnover rate. The decrease in the average settlement price was primarily attributable to a 4% lower average price of units in backlog entering the second quarter of 2026 compared to the backlog entering the second quarter of 2025. Gross profit margins were negatively impacted by higher lot costs and by pricing pressure due to affordability challenges.

Previous wording

Segment New Orders increased 8%, while the average sales price of New Orders increased 1% in the first quarter of 2026 compared to the first quarter of 2025. The increase in New Orders was primarily attributable to a 6% increase in the average number of active communities quarter over quarter.

Current wording

Segment New Orders increased 8%, while the average sales price of New Orders decreased 6% in the second quarter of 2026 compared to the second quarter of 2025. The increase in New Orders was primarily attributable to an 11% increase in the average number of active communities quarter over quarter, offset by a 3% lower absorption rate. The average sales price of New Orders was negatively impacted by a shift to lower priced communities in certain markets within the segment.

Previous wording

The number of New Orders increased 7% while the average sales price decreased 2% in the first quarter of 2026 compared to the first quarter of 2025. New Orders were favorably impacted by an 8% increase in the average number of active communities. The decrease in the average sales price of New Orders is primarily attributable to our North East segment, which had a shift to lower priced communities in certain markets year over year.

Current wording

Segment New Orders increased 7% while the average sales price of New Orders decreased 7% in the first six months of 2026 compared to the first six months of 2025. New Orders were higher primarily due to a 19% increase in the average number of active communities, offset by a 10% lower sales absorption rate year over year. The average sales price of New Orders was negatively impacted by a shift to lower priced communities in certain markets within the segment.

Previous wording

The Mid East segment had an approximate $18,900, or 35%, decrease in segment profit in the first quarter of 2026 compared to the first quarter of 2025. The decrease in segment profit was driven by a decrease in segment revenues of approximately $102,000, or 25%. Segment revenues decreased due to a 29% decrease in the number of units settled, offset partially by a 6% higher average settlement price. The decrease in settlements was primarily attributable to a 20% lower backlog unit balance entering 2026 compared to the backlog entering 2025, coupled with a lower backlog turnover rate quarter over quarter. The increase in the average settlement price was attributable to a 5% higher average price of units in backlog entering 2026 compared to backlog entering 2025.

Current wording

The Mid East segment had an approximate $21,800, or 19%, decrease in segment profit in the first six months of 2026 compared to the first six months of 2025. The decrease in segment profit was driven by a decrease in segment revenues of approximately $98,500, or 11%. Segment revenues decreased due to a 15% decrease in units settled, offset partially by a 4% higher average settlement price. The decrease in settlements was primarily attributable to a 20% lower backlog unit balance entering 2026 compared to the backlog entering 2025. The increase in the average settlement price was attributable to a 5% higher average price of units in backlog entering 2026 compared to backlog entering 2025.

Previous wording

Segment New Orders increased 8% while the average sales price of New Orders remained flat in the first quarter of 2026 when compared to the first quarter of 2025. The increase in New Orders was primarily attributable to a 9% increase in the average number of active communities quarter over quarter.

Current wording

Segment New Orders increased 9% while the average sales price of New Orders remained flat in the first six months of 2026 compared to the first six months of 2025. New Orders were favorably impacted by a 6% higher sales absorption rate, coupled with a 3% increase in the number of active communities year over year.

Previous wording

Segment New Orders increased 3%, while the average sales price of New Orders decreased 3% in the first quarter of 2026 compared to the first quarter of 2025. New Orders were higher primarily due to a 4% increase in the average number of active communities.

Current wording

Segment New Orders increased 11% while the average sales price of New Orders decreased 1% in the first six months of 2026 compared to the first six months of 2025. New Orders were favorably impacted by a 7% higher sales absorption rate, attributable to better product positioning in certain markets in the current year, coupled with a 4% increase in the average number of active communities within the segment year over year.

Previous wording

(1)This item represents changes to the contract land deposit impairment allowance, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2 in the accompanying condensed consolidated financial statements.

Current wording

(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2 in the accompanying condensed consolidated financial statements.

Previous wording

We conduct our mortgage banking activity through NVRM Mortgage Finance, Inc. ("NVRM"), a wholly owned subsidiary. NVRM focuses exclusively on serving the homebuilding segment customer base. NVRM sells the loans it originates into the secondary markets primarily on a servicing-released basis, typically within 30 days from the loan closing. The following table summarizes the results of our mortgage banking operations and certain statistical data for the three months ended March 31, 2026 and 2025:

Current wording

We conduct our mortgage banking activity through NVR Mortgage Finance, Inc. (“NVRM”), a wholly owned subsidiary. NVRM focuses exclusively on serving the homebuilding segment's customers. NVRM sells almost all of the mortgage loans it closes to investors in the secondary markets on a servicing-released basis, typically within 30 days from the loan closing. The following table summarizes the results of our mortgage banking operations and certain statistical data for the three and six months ended June 30, 2026 and 2025:

Previous wording

Segment profit for the three months ended March 31, 2026 decreased by approximately $5,800, or 17%, from the same period in 2025. The decrease was primarily attributable to a decrease in mortgage banking fees, partially offset by a decrease in general and administrative expenses. Mortgage banking fees decreased by approximately $6,400, or 12%, primarily due to lower gains on sales of loans. General and administrative expenses decreased by $1,100, or 5%, which was the result of decreased personnel costs.

Current wording

Segment profit for the three months ended June 30, 2026 decreased by approximately $4,400, or 14%, from the same period in 2025. This decrease was primarily attributable to a decrease of approximately $4,000, or 8%, in mortgage banking fees due to a decrease in gains on sales of loans.

Previous wording

We historically have experienced variability in our quarterly results, generally having higher New Order activity in the first half of the year and higher home settlements, revenue and net income in the second half of the year. However, in recent years our typical seasonal trends have been affected by significant changes in market conditions. As a result, our quarterly results of operations are not necessarily indicative of the results that may be expected for the full year.

Current wording

We historically have experienced variability in our quarterly results, generally having higher New Order activity in the first half of the year and higher home settlements, revenue and net income in the second half of the year. As a result, our quarterly results of operations are not necessarily indicative of the results that may be expected for the full year.

Previous wording

Our effective tax rate during the three months ended March 31, 2026 was 21.2% compared to 25.5% for the three months ended March 31, 2025. The decrease in the effective tax rate in the first quarter of 2026 is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $12,600 and $2,700 for the three months ended March 31, 2026 and March 31, 2025, respectively.

Current wording

Our effective tax rate for the three and six month periods ended June 30, 2026 was 25.8% and 23.8%, respectively, compared to 25.4% in each respective period of 2025. The effective tax rate for the respective periods is primarily impacted by the income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $900 and $13,500 for the three and six months ended June 30, 2026, respectively, compared to $3,500 and $6,200 for the three and six months ended June 30, 2025, respectively.

Previous wording

We fund our operations primarily from our current cash holdings and cash flows generated by operating activities. In addition, we have available a short-term unsecured working capital revolving credit facility and revolving mortgage repurchase facility, as further described below. As of March 31, 2026, we had approximately $1,700,000 in cash and cash equivalents, approximately $288,800 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility.

Current wording

We fund our operations primarily from our current cash holdings and cash flows generated by operating activities. In addition, we have available a short-term unsecured working capital revolving credit facility and revolving mortgage repurchase facility, as further described below. As of June 30, 2026, we had approximately $1,100,000 in cash and cash equivalents, approximately $287,200 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility.

Previous wording

(i) Payments due to service our debt and interest on that debt. Our current outstanding Senior Notes total $900,000 and mature in May 2030. Future interest payments on our outstanding Senior Notes total approximately $118,050, with $27,000 due within the next twelve months.

Current wording

(i) Payments due to service our debt and interest on that debt. Our Senior Notes have an outstanding aggregate principal balance of $900,000 and mature in May 2030. Future interest payments on our outstanding Senior Notes total $104,550, with $27,000 due within the next twelve months.

Previous wording

(ii) Payment obligations totaling approximately $698,600 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.

Current wording

(ii) Payment obligations totaling approximately $737,500 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.

Previous wording

(iii) Obligations under operating and finance leases related primarily to office space and our production facilities (see Note 12 of this Form 10-Q for additional discussion of our leases).

Current wording

(iii) Obligations under operating and finance leases related primarily to office space and our production facilities. See Note 13 of this Quarterly Report on Form 10-Q for additional discussion of our leases.

Previous wording

In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions. This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this Form 10-Q for further discussion of repurchase activity during the first quarter of 2026. For the quarter ended March 31, 2026, we repurchased 90,180 shares of our common stock at an aggregate purchase price of $631,956 As of March 31, 2026, we had approximately $667,600 available under a Board approved repurchase authorization.

Current wording

In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions. This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this Quarterly Report on Form 10-Q for further discussion of repurchase activity during the second quarter of 2026. For the six months ended June 30, 2026, we repurchased 144,896 shares of our common stock at an aggregate purchase price of $989,733. As of June 30, 2026, we had approximately $1,059,864 available under Board approved repurchase authorizations.

Previous wording

As of March 31, 2026, we had $900,000 of unsecured 3% senior notes outstanding, which mature in May 2030.

Current wording

As of June 30, 2026, we had Senior Notes with an aggregate principal balance of $900,000, which mature in May 2030.

Previous wording

We have an unsecured revolving credit agreement (the "Credit Agreement") which provides for aggregate revolving loan commitments of $300,000, and a $100,000 sublimit for the issuance of letters of credit, of which there was approximately $11,200 outstanding as of March 31, 2026. There were no borrowings outstanding under the Credit Agreement as of March 31, 2026.

Current wording

We have an unsecured revolving credit agreement (the "Credit Agreement") which provides for aggregate revolving loan commitments of $300,000, and a $100,000 sublimit for the issuance of letters of credit of which there was approximately $12,800 outstanding as of June 30, 2026. There were no borrowings outstanding under the Credit Agreement as of June 30, 2026.

Previous wording

For the three months ended March 31, 2026, cash, restricted cash, and cash equivalents decreased by $227,194. Net cash provided by operating activities was $339,686, due primarily to cash provided by earnings for the three months ended March 31, 2026 and a $276,676 reduction in mortgage loans held for sale. Cash was primarily used to fund the increase in inventory of $214,950, attributable to an increase in units under construction as of March 31, 2026 compared to December 31, 2025.

Current wording

For the six months ended June 30, 2026, cash, restricted cash, and cash equivalents decreased by $759,622. Net cash provided by operating activities was $188,156, due primarily to cash provided by earnings for the six months ended June 30, 2026 and a $176,022 reduction in mortgage loans held for sale. In addition, $49,200 of cash was provided by an increase in accounts payable and accrued expenses attributable to an increase in inventory and $45,488 of cash was provided by an increase in customer deposits. Cash was primarily used to fund the increase in inventory of $511,729, attributable to an increase in units under construction as of June 30, 2026 compared to December 31, 2025, and an increase of $106,509 in contract land deposits.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2026 was $12,465, due primarily to cash provided by the sale of our interest in an unconsolidated joint venture of $21,559. Cash was used primarily for investments in unconsolidated joint ventures totaling $4,388 and purchases of property, plant and equipment of $4,871.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2026 was $3,916, due primarily to cash provided by the sale of our interest in an unconsolidated joint venture of $21,559. Cash was used primarily for investments in unconsolidated joint ventures totaling $6,911 and purchases of property, plant and equipment of $11,023.

Previous wording

Net cash used in financing activities was $579,345 for the three months ended March 31, 2026. Cash was used to repurchase 90,180 shares of our common stock at an aggregate purchase price of $631,956 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $54,087.

Current wording

Net cash used in financing activities was $951,694 for the six months ended June 30, 2026. Cash was used to repurchase 144,896 shares of our common stock at an aggregate purchase price of $989,733 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $56,784.

Previous wording

There have been no material changes to our critical accounting policies and estimates as previously disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

There have been no material changes to our critical accounting estimates as previously disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.