Century Communities, Inc.

Previous wording

the cyclical nature of the homebuilding industry, which is particularly susceptible to economic changes, either nationally or in the regional and local markets in which we operate, including continued elevated and any future increases in interest rates and the resulting impact on the accessibility and cost of mortgage loans to homebuyers; persistent inflation; decreased employment levels and job insecurity concerns due in part to the rapid adoption of artificial intelligence; cautious consumer sentiment; affordability concerns; and increased recessionary conditions;

Current wording

the cyclical nature of the homebuilding industry, which is particularly susceptible to economic changes, either nationally or in the regional and local markets in which we operate, including continued elevated and recent and any future increases in interest rates and the resulting impact on the accessibility and cost of mortgage loans to homebuyers; persistent inflation; decreased employment levels and job insecurity concerns due in part to the rapid adoption of artificial intelligence; cautious consumer sentiment; affordability concerns; and increased recessionary conditions;

Previous wording

a downturn in the homebuilding industry, including a reduction in demand for our homes, increased cancellation rates, or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial condition, which may include a continued elevated use of sales incentives adversely affecting our margins and possible future impairment or restructuring charges;

Current wording

a downturn in the homebuilding industry, including a reduction in demand for our homes, increased cancellation rates, or a decline in real estate values or market conditions resulting in an adverse impact on our business, operating results and financial condition, which may include a continued elevated use of sales incentives adversely affecting our margins and possible future additional impairment, lot abandonment, or restructuring charges;

Previous wording

our future business operations, operating results and financial condition; future impairment and restructuring charges; and changes in our business, investment and capital allocation strategy;

Current wording

our future business operations, operating results and financial condition; additional future impairment and restructuring charges; and changes in our business, investment and capital allocation strategy;

Previous wording

the effect of and risks associated with any future acquisitions;

Current wording

the effect of and risks associated with recent and any future acquisitions, including the recent HistoryMaker Homes acquisition;

Previous wording

While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital. Of the 4,519 homes delivered during the first six months of 2026, approximately 96% of homes delivered had purchase prices below the Federal Housing Administration-insured mortgage limitsand approximately 98% of homes delivered were built as move-in ready homes.

Current wording

While we offer homes that appeal to a broad range of entry-level, move-up, and lifestyle homebuyers, our offerings are heavily weighted towards providing affordable housing options in each of our homebuyer segments. Additionally, we prefer building move-in-ready homes over built-to-order homes, which we believe allows for a faster construction process, advantageous pricing with subcontractors, and shortened time period from home sale to home delivery, thus allowing our customers greater certainty on their financing and allowing us to more appropriately price the homes and deploy our capital. Of the 6,961 homes delivered during the first nine months of 2026, approximately 96% of homes delivered had purchase prices below the Federal Housing Administration-insured mortgage limitsand approximately 98% of homes delivered were built as move-in ready homes.

Previous wording

Market conditions in the homebuilding industry have continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, cautious homebuyer sentiment, and ongoing affordability pressures for homebuyers. Against this backdrop, there remains an underlying need for affordable new homes, supported by solid demographic trends and an ongoing undersupply of homes. Demand for our homes improved during the three months ended June 30, 2026, as net new home contracts (new home contracts net of cancellations) increased modestly compared to the prior year period. In response to market conditions, we have continued to provide, when necessary, incentive offerings across our communities, including discounts on base home prices, lot premiums, options and upgrades, and financing incentives, including interest rate buydowns and closing cost concessions. Further, during the first six months of 2026, we experienced continued acceptance to adjustable-rate mortgages among our homebuyers, which adjustable-rate mortgages accounted for nearly 35% of the mortgages that we originated by volume of principal during second quarter of 2026, an increase from first quarter 2026 levels of approximately 30% and well above first quarter 2025 levels of less than 5%.

Current wording

Market conditions in the homebuilding industry have continued to be impacted by elevated mortgage rates, which increased further during the third quarter of 2026; macro-economic and geopolitical uncertainty; cautious homebuyer sentiment, especially in light of persistent inflation and rising commodity and oil prices; and ongoing affordability pressures for homebuyers. Against this backdrop, there remains an underlying need for affordable new homes, supported by solid demographic trends and an ongoing undersupply of homes. In response to market conditions, we have continued to provide, when necessary, incentive offerings across our communities, including discounts on base home prices, lot premiums, options and upgrades, and financing incentives, including interest rate buydowns and closing cost concessions. Further, during the first nine months of 2026, we experienced continued acceptance to adjustable-rate mortgages among our homebuyers, which adjustable-rate mortgages accounted for nearly 35% of the mortgages that we originated by volume of principal during third quarter of 2026, consistent with the second quarter of 2026, and an increase from first quarter 2026 levels of approximately 30% and well above first quarter 2025 levels of less than 5%.

Previous wording

We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, and we expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful. We believe future demand for our homes remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation and consumer confidence, both of which have been and may continue to be adversely affected by the conflict in the Middle East, especially if it persists or intensifies; continued elevated interest rates and the impact of potential future increases or decreases to the U.S. Federal funds interest rate by the U.S. Federal Reserve; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long government monetary directives and actions will impact the U.S. economy; the effect of tariffs and/or duties; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; increased energy and fuel prices; the possibility of an economic recession; and other factors, including those described elsewhere in this Form 10-Q. Specifically, changes in mortgage interest rates impact the costs of owning a home and affect the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to mortgage interest rates, consumer confidence, or otherwise, could affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of loans and revenues from our Financial Services segment, and net income.

Current wording

We anticipate the homebuilding markets in each of our operating segments will continue to be tied to both the macro-economic environment and the local economy, and we expect our operating strategy will continue to adapt to market changes, though we cannot provide any assurance that our strategies will remain consistent or continue to be successful. We believe future demand for our homes remains uncertain as future economic, market and geopolitical conditions remain uncertain, in particular with respect to inflation and consumer confidence, both of which have been and may continue to be adversely affected by the conflict in the Middle East, especially if it persists or intensifies; continued elevated interest rates, which rose further during the third quarter of 2026, and the impact of potential future increases or decreases to the U.S. Federal funds interest rate by the U.S. Federal Reserve; availability and cost of mortgage loans to homebuyers; financial, credit and mortgage markets; the extent to which and how long government monetary directives and actions will impact the U.S. economy; the effect of tariffs and/or duties; consumer confidence; wage growth; household formations; levels of new and existing homes for sale; prevailing home and rental prices; availability and cost of land, labor and construction materials; demographic trends; housing demand; increased energy and fuel prices; the possibility of an economic recession; and other factors, including those described elsewhere in this Form 10-Q. Specifically, changes in mortgage interest rates impact the costs of owning a home and affect the purchasing power of our customers and could impact homebuyer confidence. Changes in demand for our homes or cancellations due to mortgage interest rates, consumer confidence, or otherwise, could affect our operating results in future periods, including our net sales, home deliveries, gross margin, origination volume of loans and revenues from our Financial Services segment, and net income.

Previous wording

Disruptions to energy markets related to geopolitical developments in the Middle East have increased fuel and transportation prices, and certain tariffs that became effective in late 2025 relate to various imported products used in the homebuilding industry, including cabinets, lumber, and certain other wood products. As of June 30, 2026, we have not experienced significant cost increases or supply chain disruptions for raw materials and construction cycle times remained approximately three to four months during the first six months of 2026; however, we could experience increases in the costs of materials utilized for the construction of our homes and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Mortgage rates remained elevated during the first six months of 2026 and are influenced by a range of market factors, and we cannot provide any assurance as to the impact of future market or policy developments on mortgage rates or our current or future business. Further, in July 2026, a broad package of federal housing provisions became law, though the timing and magnitude of any impact on the housing market conditions remains uncertain. The potential extent and effect of these and other factors on our business is highly uncertain and outside our control, and our past performance may not be indicative of our future results.

Current wording

Disruptions to energy markets related to geopolitical developments in the Middle East have increased fuel and transportation prices, and certain tariffs that became effective in late 2025 relate to various imported products used in the homebuilding industry, including cabinets, lumber, and certain other wood products. As of September 30, 2026, we have not experienced significant cost increases or supply chain disruptions for raw materials and construction cycle times remained approximately three to four months during the first nine months of 2026; however, we could experience increases in the costs of materials utilized for the construction of our homes and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Mortgage rates remained elevated and increased further during the first nine months of 2026 and are influenced by a range of market factors, and we cannot provide any assurance as to the impact of future market or policy developments on mortgage rates or our current or future business. Further, in July 2026, a broad package of federal housing provisions became law, though the timing and magnitude of any impact on the housing market conditions remains uncertain. The potential extent and effect of these and other factors on our business is highly uncertain and outside our control, and our past performance may not be indicative of our future results.

Previous wording

During the three and six months ended June 30, 2026, we generated $49.1 million and $82.4 million in income before income tax expense, as compared to $47.1 million and $99.6 million in the respective prior year periods. During the three and six months ended June 30, 2026, we generated net income of $36.1 million, or $1.26 per diluted share, and $60.6 million, or $2.09 per diluted share, respectively, as compared to $34.9 million, or $1.14 per diluted share, and $74.2 million, or $2.40 per diluted share in the respective prior year periods.

Current wording

During the three and nine months ended September 30, 2026, we generated $15.8 million and $98.2 million in income before income tax expense, as compared to $47.8 million and $147.4 million in the respective prior year periods. Our results for the three and nine months ended September 30, 2026 included $19.6 million of impairment charges, as compared to $3.2 million and $11.0 million, respectively, in the prior year periods. During the three and nine months ended September 30, 2026, we generated net income of $12.6 million, or $0.44 per diluted share, and $73.2 million, or $2.54 per diluted share, respectively, as compared to $37.4 million, or $1.25 per diluted share, and $111.6 million, or $3.65 per diluted share in the respective prior year periods.

Previous wording

‎During the three and six months ended June 30, 2026, we generated total revenues of $927.2 million and $1.7 billion, respectively, as compared to $1.0 billion and $1.9 billion in the respective prior year periods. During the three and six months ended June 30, 2026, we delivered 2,506 and 4,519 new homes with an average sales price of $358.2 thousand and $361.1 thousand, respectively. Our new home deliveries decreased by 3.1% and 7.2%, respectively, as compared to the respective prior year periods, primarily due to slower absorption rates as a result of lower demand amid challenging homebuilding market conditions, and the average sales price per new home decreased 5.1% and 5.4% as compared to the respective prior year periods, primarily due to an increased use of incentives during the three and six months ended June 30, 2026. For the three months ended June 30, 2026, net new contracts increased 2.7% to 2,615, and for the six months ended June 30, 2026, net new contracts decreased 4.7% to 4,994, in each case compared to the prior year period.

Current wording

‎During the three and nine months ended September 30, 2026, we generated total revenues of $864.5 million and $2.6 billion, respectively, as compared to $980.3 million and $2.9 billion in the respective prior year periods. During the three and nine months ended September 30, 2026, we delivered 2,442 and 6,961 new homes with an average sales price of $345.0 thousand and $355.4 thousand, respectively. Our new home deliveries decreased by 1.8% and 5.4%, respectively, as compared to the respective prior year periods, primarily due to slower absorption rates as a result of lower demand amid challenging homebuilding market conditions, and the average sales price per new home decreased 10.2% and 7.1% as compared to the respective prior year periods, primarily due to an increased use of incentives during the three and nine months ended September 30, 2026. For the three months ended September 30, 2026, net new contracts decreased 4.3% to 2,284, and for the nine months ended September 30, 2026, net new contracts decreased 4.5% to 7,278, in each case compared to the respective prior year period.

Previous wording

We have continued to take a balanced approach to capital allocation, guided by market conditions and our priorities of investing in land and land development to support anticipated future growth and returning capital to our stockholders. We ended the second quarter of 2026 with $92.3 million of cash and cash equivalents and $39.7 million of cash held in escrow. We had $329.6 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 34.2% and a net homebuilding debt to net capital ratio of 31.9%. We have continued to strategically manage our lot pipeline in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts, resulting in 60,128 lots owned and controlled at June 30, 2026. During the three and six months ended June 30, 2026, we repurchased an aggregate of 352.8 thousand and 969.9 thousand shares, respectively, under our stock repurchase program for a total purchase price of approximately $19.6 million and $59.6 million, respectively, and a weighted average per share price of $55.54 and $61.44, respectively. Also, during each of the first two quarters of 2026, we paid a quarterly cash dividend to our stockholders of $0.32 per share, a 10% increase from the $0.29 per share quarterly dividend paid during each of the first two quarters of 2025.

Current wording

We have continued to take a balanced approach to capital allocation, guided by market conditions and our priorities of investing in land and land development to support anticipated future growth and returning capital to our stockholders. We ended the third quarter of 2026 with $86.1 million of cash and cash equivalents and $33.7 million of cash held in escrow. We had $456.0 million outstanding under our revolving line of credit, with a homebuilding debt to capital ratio of 36.8% and a net homebuilding debt to net capital ratio of 34.9%. We have continued to strategically manage our lot pipeline in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts, resulting in 60,969 lots owned and controlled at September 30, 2026. During the three and nine months ended September 30, 2026, we repurchased an aggregate of 169.9 thousand and 1.1 million shares, respectively, under our stock repurchase program for a total purchase price of approximately $11.6 million and $71.2 million, respectively, and a weighted average per share price of $68.16 and $62.45, respectively. Also, during each of the first three quarters of 2026, we paid a quarterly cash dividend to our stockholders of $0.32 per share, a 10% increase from the $0.29 per share quarterly dividend paid during each of the first three quarters of 2025.

Previous wording

For the three and six months ended June 30, 2026, our Financial Services segment generated income before income tax expense of $9.9 million and $17.5 million, respectively, as compared to $6.2 million and $8.6 million in the respective prior year periods. During the three months ended June 30, 2026, the number of mortgages originated increased 0.9%, and during the six months ended June 30, 2026, the number of mortgages originated decreased 2.9%, in each case, as compared to the prior year period. During the three and six months ended June 30, 2026, the number of loans sold to third parties decreased 6.9% and 2.6%, respectively, as compared to the respective prior year periods.

Current wording

For the three and nine months ended September 30, 2026, our Financial Services segment generated income before income tax expense of $6.2 million and $23.7 million, respectively, as compared to $3.0 million and $11.6 million in the respective prior year periods. During the three and nine months ended September 30, 2026, the number of mortgages originated decreased 1.6% and 2.5%, respectively, in each case, as compared to the respective prior year period. During the three and nine months ended September 30, 2026, the number of loans sold to third parties increased 5.9% and 0.2%, respectively, as compared to the respective prior year periods.

Previous wording

The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our results of operations for the three and nine months ended September 30, 2026 and 2025:

Previous wording

(4)Beginning in the fourth quarter of 2025, we added “Stock-based compensation expense” as an adjustment in our non-GAAP adjusted EBITDA calculation. Accordingly, we have recast the corresponding prior year period adjusted EBITDA amount to conform to the current presentation and calculation.

Current wording

(3)Beginning in the fourth quarter of 2025, we added “Stock-based compensation expense” as an adjustment in our non-GAAP adjusted EBITDA (Earnings Before Income tax expense, Interest, Depreciation, and Amortization) calculation. Accordingly, we have recast the corresponding prior year period adjusted EBITDA amount to conform to the current presentation and calculation.

Previous wording

During the three and six months ended June 30, 2026, our West segment generated income before income tax expense of $10.1 million and $20.1 million, respectively, representing decreases of 59.5% and 56.7%, respectively, as compared to the respective prior year periods. These decreases were primarily driven by decreases in revenue and homebuilding gross margin percentage. During the three and six months ended June 30, 2026, revenue decreased $18.6 million and $42.8 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 3.9% and 6.1%, respectively, in the number of homes delivered and decreases of 5.6% and 5.4%, respectively, in the average sales price per home. The decreases in the number of homes delivered were primarily attributable to slower absorption rates and the decreases in average sales price per home resulted from increased use of incentives. During the three and six months ended June 30, 2026, homebuilding gross margin percentage decreased from the respective prior year periods, due primarily to increased use of incentives as compared to the respective prior year periods.

Current wording

During the three and nine months ended September 30, 2026, our Mountain segment generated income before income tax expense of $6.7 million and $28.9 million, respectively, representing decreases of 54.6% and 45.8%, respectively, as compared to the respective prior year periods. These decreases were primarily driven by decreases in revenue and homebuilding gross margin percentage. During the three and nine months ended September 30, 2026, revenue decreased $27.7 million and $100.7 million, respectively, as compared to the respective prior year periods, primarily driven by decreases of 3.7% and 6.5%, respectively, in the number of homes delivered and decreases of 7.7% and 9.1%, respectively, in the average sales price per home. The decreases in the number of homes delivered were primarily attributable to slower absorption rates and the decreases in average sales price per home resulted from increased use of incentives. During the three and nine months ended September 30, 2026, homebuilding gross margin percentage decreased from the respective prior year periods, due primarily to increased use of incentives as compared to the respective prior year periods.

Previous wording

During the three and six months ended June 30, 2026, our Southeast segment generated income before income tax expense of $11.4 million and $30.8 million, respectively. For the three-month comparison, income before income tax expense remained relatively consistent, increasing 2.2% as compared to the respective prior year period. For the six-month comparison, income before income tax expense increased 21.5% as compared to the respective prior year period, primarily driven by a land sale transaction in Georgia during the first quarter of 2026. Revenue decreased $33.7 million and $11.5 million, respectively, during the three and six months ended June 30, 2026 as compared to the respective prior year periods, primarily driven by decreases of 9.7% and 3.8%, respectively, in the number of homes delivered and decreases of 10.9% and 10.9%, respectively, in the average sales price per home. The decrease in revenue for the six-month comparison was partially offset by the first quarter land sale transaction of $32.5 million included in land sales and other revenue. The decreases in the number of homes delivered were primarily driven by a lower average number of selling communities, and the decreases in average sales price per home resulted from increased use of incentives. During the three and six months ended June 30, 2026, homebuilding gross margin percentage increased from the respective prior year periods, driven by lower direct construction costs and the absence of prior period impairment charges of $3.8 million, and was partially offset by the impact of increased use of incentives as compared to the respective prior year periods.

Current wording

During the three and nine months ended September 30, 2026, our Southeast segment generated income before income tax expense of $9.0 million and $39.9 million, respectively, representing a decrease of 31.5% and an increase of 3.4%, respectively, as compared to the respective prior year periods. The decrease in income before income tax expense for the three-month comparison was primarily driven by a decrease in revenue, partially offset by an increase in homebuilding gross margin percentage. The increase in income before income tax expense for the nine-month comparison was primarily driven by a land sale transaction in Georgia during the first quarter of 2026, partially offset by a decrease in home sales revenue. During the three and nine months ended September 30, 2026, revenue decreased $54.3 million and $65.8 million, respectively, as compared to the respective prior year periods. The decrease in revenue for the three-month comparison was primarily driven by a 26.7% decrease in the number of homes delivered and a 5.8% decrease in the average sales price per home. The decrease in revenue for the nine-month comparison was primarily driven by a 12.4% decrease in the number of homes delivered and a 9.1% decrease in the average sales price per home, partially offset by the first quarter land sale transaction of $32.5 million included in land sales and other revenue. The decreases in the number of homes delivered were primarily attributable to a decrease in the average number of selling communities, while the decreases in average sales price per home resulted primarily from increased use of incentives. During the three and nine months ended September 30, 2026, homebuilding gross margin percentage increased from the respective prior year periods, due primarily to inventory impairment charges of $2.4 million and $6.2 million recorded in the prior year periods, respectively, that did not recur in the current year periods, and was partially offset by the impact of increased use of incentives as compared to the respective prior year periods.

Previous wording

Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, the volume of loans originated typically correlates to our number of homes delivered. Fluctuations in financial services income before income tax may occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned. For the three and six months ended June 30, 2026, our Financial Services segment generated income before income tax expense of $9.9 million and $17.5 million, respectively, as compared to $6.2 million and $8.6 million, respectively, in the respective prior year periods. For the three-month comparison, the increase was primarily attributable to favorable fair value adjustments related to our locked loan pipeline and hedge activity, partially offset by the benefit recognized from the sale of our mortgage servicing rights portfolio in the prior year period. For the six-month comparison, the increase was primarily attributable to favorable fair value adjustments related to our locked loan pipeline and hedge activity and mortgage servicing rights portfolio, partially offset by the benefit recognized from the sale of our mortgage servicing rights portfolio in the prior year period. During the three months ended June 30, 2026, the number of mortgages originated increased 0.9%, and during the six months ended June 30, 2026, the number of mortgages originated decreased 2.9%, in each case, as compared to the respective prior year period. During the three and six months ended June 30, 2026, the number of loans sold to third parties decreased 6.9% and 2.6%, respectively, as compared to the respective prior year periods.

Current wording

Our Financial Services segment originates mortgages for primarily our homebuyers, and as such, the volume of loans originated typically correlates to our number of homes delivered. Fluctuations in financial services income before income tax may occur because some components of revenue fluctuate differently than loan volumes, and some expenses are not directly related to mortgage loan volume or to changes in the amount of revenue earned. For the three and nine months ended September 30, 2026, our Financial Services segment generated income before income tax expense of $6.2 million and $23.7 million, respectively, as compared to $3.0 million and $11.6 million, respectively, in the respective prior year periods. For the three-month comparison, the increase was primarily attributable to higher loan margins, driven by favorable fair value adjustments on our hedging activity, and higher servicing fee income, partially offset by lower origination volume. For the nine-month comparison, the increase was primarily attributable to higher loans margins, driven by favorable fair value adjustments on our hedging activity, and favorable fair value adjustments on our mortgage servicing rights portfolio, partially offset by the prior year benefit from the sale of a portion of our mortgage servicing rights portfolio and lower origination volume. During the three and nine months ended September 30, 2026, the number of mortgages originated decreased 1.6% and 2.5%, respectively, in each case, as compared to the respective prior year period. During the three and nine months ended September 30, 2026, the number of loans sold to third parties increased 5.9% and 0.2%, respectively, as compared to the respective prior year periods.

Previous wording

Our Century Living operations are engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado. For the three and six months ended June 30, 2026, our Century Living segment generated losses before income tax expense of $115 thousand and $48 thousand, respectively, as compared to income before income tax expense of $1.5 million and $34 thousand, respectively, in the respective prior year periods. As of June 30, 2026, the Company had three multi-family rental properties in Colorado, of which two were available for leasing. As of June 30, 2026, these three projects represented nearly 870 total multi-family units, including 443 under active construction and 425 completed units, and 417 units were leased. As of June 30, 2025, we had three multi-family rental properties, one of which was completed and two of which were under active construction. We subsequently sold one multi-family rental property during the fourth quarter of 2025.

Current wording

Our Century Living operations are engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado. For the three and nine months ended September 30, 2026, our Century Living segment generated losses before income tax expense of $155 thousand and $203 thousand, respectively, as compared to losses before income tax expense of $298 thousand and $264 thousand, respectively, in the respective prior year periods. As of September 30, 2026, the Company had three multi-family rental properties in Colorado, of which two were available for leasing. As of September 30, 2026, these three projects represented 868 total multi-family units, including 251 under active construction and 617 completed units, and 505 units were leased. As of September 30, 2025, we had three multi-family rental properties, two of which were completed and one of which was under active construction. We subsequently sold one multi-family rental property during the fourth quarter of 2025.

Previous wording

Homebuilding gross margin represents home sales revenues less cost of home sales revenues. Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, increased to 18.1% for the three months ended June 30, 2026 from 17.6% for the prior year period and decreased to 18.0% for the six months ended June 30, 2026 from 18.7% for the period year period. The increase for the three-month comparison was primarily driven by lower direct construction costs and the absence of prior period impairment charges, and was partially offset by increased use of incentives during the three months ended June 30, 2026. The decrease for the six-month comparison was primarily driven by increased use of incentives during the six months ended June 30, 2026 as compared to the same respective prior year period.

Current wording

Homebuilding gross margin represents home sales revenues less cost of home sales revenues. Our homebuilding gross margin percentage, which represents homebuilding gross margin divided by home sales revenues, decreased to 15.0% for the three months ended September 30, 2026 from 17.9% for the prior year period and decreased to 17.0% for the nine months ended September 30, 2026 from 18.4% for the prior year period. The decrease for the three-month comparison was primarily driven by inventory impairment charges of $19.6 million, compared to $3.2 million in the prior year period, as well as increased use of incentives. The decrease for the nine-month comparison was primarily driven by increased use of incentives, as well as higher inventory impairment charges of $19.6 million, compared to $11.0 million in the prior year period.

Previous wording

For the three and six months ended June 30, 2026, our adjusted homebuilding gross margin percentage, excluding inventory impairment, interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory, was 20.0% and 19.8%, respectively, as compared to 20.0% and 20.8%, respectively, for the same respective periods in 2025. We believe the above non-GAAP adjusted homebuilding gross margin information is meaningful as it isolates the impact that inventory impairment, indebtedness, and acquisitions (in each case as applicable) during any period, have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to prior year periods and to homebuilding gross margins of our competitors.

Current wording

For the three and nine months ended September 30, 2026, our adjusted homebuilding gross margin percentage, excluding inventory impairment, interest in cost of home sales revenues, and purchase price accounting for acquired work in process inventory, was 19.3% and 19.7%, respectively, as compared to 20.1% and 20.6%, respectively, for the same respective periods in 2025. We believe the above non-GAAP adjusted homebuilding gross margin information is meaningful as it isolates the impact that inventory impairment, indebtedness, and acquisitions (in each case as applicable) during any period, have on our homebuilding gross margin and allows for comparability of our homebuilding gross margins to prior year periods and to homebuilding gross margins of our competitors.

Previous wording

Our selling, general and administrative expense decreased $1.4 million and $6.1 million, respectively, for the three and six months ended June 30, 2026 as compared to the same respective periods in 2025, primarily driven by decreased commissions expense and other administrative expenses, partially offset by increased advertising costs. As a percentage of home sales revenue, our selling, general and administrative expense increased 100 basis points and 150 basis points during the three and six months ended June 30, 2026, respectively, driven primarily by decreased revenue on a partially fixed cost base.

Current wording

Our selling, general and administrative expense decreased $1.1 million and $7.2 million, respectively, for the three and nine months ended September 30, 2026 as compared to the same respective periods in 2025, primarily driven by decreased commissions expense, decreased charitable contributions and decreased compensation related to adjustments in stock-based compensation expense to reflect a decreased estimate in the number of shares which will ultimately vest and be issued upon settlement of certain performance share unit awards. As a percentage of home sales revenue, our selling, general and administrative expense increased 150 basis points during each of the three and nine months ended September 30, 2026, respectively, driven primarily by decreased revenue on a partially fixed cost base.

Previous wording

At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period. Our 2026 estimated annual effective tax rate, before discrete items, of 26.3%, is driven by our blended federal and state statutory rate of 24.6%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation, partially offset by estimated federal energy home credits for current year home deliveries, which combined resulted in a net increase in our effective tax rate of 1.7%.

Current wording

At the end of each interim period, we are required to estimate our annual effective tax rate for the fiscal year and to use that rate to provide for income taxes for the current year-to-date reporting period. Our 2026 estimated annual effective tax rate, before discrete items, of 26.0%, is driven by our blended federal and state statutory rate of 24.6%, and certain permanent differences between GAAP and tax, including disallowed deductions for executive compensation, partially offset by estimated federal energy home credits for current year home deliveries, which combined resulted in a net increase in our effective tax rate of 1.4%.

Previous wording

For the three months ended June 30, 2026 and 2025, we recorded income tax expense of $12.9 million and $12.2 million, respectively. For the six months ended June 30, 2026 and 2025, we recorded income tax expense of $21.8 million and $25.4 million, respectively.

Current wording

For the three months ended September 30, 2026 and 2025, we recorded income tax expense of $3.2 million and $10.4 million, respectively. For the nine months ended September 30, 2026 and 2025, we recorded income tax expense of $25.1 million and $35.8 million, respectively.

Previous wording

Total assets increased by $231.4 million, or 5.2%, to $4.7 billion at June 30, 2026 as compared to December 31, 2025, primarily due to (1) changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities; (2) changes in our Century Living multi-family rental properties inventory balances related to the timing of disposition, development, and construction activities; and (3) a decrease in our Financial Services assets primarily related to a decrease in mortgage loans held for sale.

Current wording

Total assets increased by $330.1 million, or 7.4%, to $4.8 billion at September 30, 2026 as compared to December 31, 2025, primarily due to (1) changes in our inventory balances within our homebuilding segments related to the timing of home and land development construction activities and (2) changes in our Century Living multi-family rental properties inventory balances related to the timing of disposition, development, and construction activities. These increases were partially offset by a decrease in our Financial Services assets primarily related to a decrease in mortgage loans held for sale.

Previous wording

We have continued to strategically manage our lot pipeline resulting in 60,128 lots owned and controlled at June 30, 2026, compared to 60,916 at December 31, 2025. Of our total lots owned and controlled as of June 30, 2026, 56.0% were owned and 44.0% were controlled, as compared to 57.1% owned and 42.9% controlled as of December 31, 2025.

Current wording

We have continued to strategically manage our lot pipeline resulting in 60,969 lots owned and controlled at September 30, 2026, compared to 60,916 at December 31, 2025. Of our total lots owned and controlled as of September 30, 2026, 54.9% were owned and 45.1% were controlled, as compared to 57.1% owned and 42.9% controlled as of December 31, 2025.

Previous wording

Net new home contracts (new home contracts net of cancellations) for the three months ended June 30, 2026 increased by 69 homes, or 2.7%, to 2,615 as compared to 2,546 for the same period in 2025. Net new home contracts (new home contracts net of cancellations) for the six months ended June 30, 2026 decreased by 244 homes, or 4.7%, to 4,994 as compared to 5,238 for the same period in 2025.

Current wording

Net new home contracts (new home contracts net of cancellations) for the three months ended September 30, 2026 decreased by 102 homes, or 4.3%, to 2,284 as compared to 2,386 for the same period in 2025. Net new home contracts (new home contracts net of cancellations) for the nine months ended September 30, 2026 decreased by 346 homes, or 4.5%, to 7,278 as compared to 7,624 for the same period in 2025.

Previous wording

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three and six months ended June 30, 2026 and 2025 by segment is included in the table below:

Current wording

Our overall average monthly “absorption rate” (calculated as monthly net new home contracts divided by average selling communities) for the three and nine months ended September 30, 2026 and 2025 by segment is included in the table below:

Previous wording

During the three months ended June 30, 2026, our total average monthly absorption rate remained flat at 2.7 per month and during the six months ended June, 30 2026, our total average monthly absorption rate decreased by 7.1% to 2.6 per month, in each case as compared to the prior year period. Market conditions during the three and six months ended June 30, 2026 continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, including volatility in fuel and transportation prices related to the conflict in the Middle East, and broader concerns about affordability by homebuyers.

Current wording

During the three months ended September 30, 2026, our total average monthly absorption rate decreased by 12.0% to 2.2 per month and during the nine months ended September, 30 2026, our total average monthly absorption rate decreased by 7.4% to 2.5 per month, in each case as compared to the prior year period. Market conditions during the three and nine months ended September 30, 2026 continued to be impacted by elevated mortgage rates, macro-economic and geopolitical uncertainty, including volatility in fuel and transportation prices related to the conflict in the Middle East, and broader concerns about affordability by homebuyers.

Previous wording

Our selling communities increased by 3 communities to 330 communities as of June 30, 2026, as compared to 327 communities at June 30, 2025. This 0.9% increase was driven by our West, Mountain, and Texas segments as a result of new community openings in excess of community closeouts during the current year period.

Current wording

Our selling communities increased by 22 communities to 343 communities as of September 30, 2026, as compared to 321 communities at September 30, 2025. This 6.9% increase was driven by new community openings in excess of community closeouts during the current year period.

Previous wording

Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. As of June 30, 2026, we had 1,264 homes in backlog, which represents an increase of 3.9% as compared to 1,217 homes in backlog at June 30, 2025. The total value of our backlog was $469.3 million as of June 30, 2026 as compared to $466.0 million as of June 30, 2025. Backlog dollar value increased 0.7% due to the increase in the number of backlog units, and the average sales price of backlog units decreased 3.0% generally due to increased use of incentives and mix within individual communities, in each case as of June 30, 2026 as compared to June 30, 2025.

Current wording

Backlog reflects the number of homes, net of cancellations, for which we have entered into a sales contract with a customer but for which we have not yet delivered the home. As of September 30, 2026, we had 1,106 homes in backlog, which represents a decrease of 1.0% as compared to 1,117 homes in backlog at September 30, 2025. The total value of our backlog was $414.0 million as of September 30, 2026 as compared to $416.9 million as of September 30, 2025. Backlog dollar value decreased 0.7% due to the decrease in the number of backlog units in our West and Century Complete segments, and the average sales price of backlog units increased 0.3% generally due to mix within individual communities and partially offset by increased use of incentives, in each case as of September 30, 2026 as compared to September 30, 2025.

Previous wording

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on January 29, 2026, in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies.”

Current wording

Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31,

Previous wording

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity under our revolving line of credit, was $802.4 million as of June 30, 2026, compared to $1.1 billion as of December 31, 2025.

Current wording

Our liquidity, consisting of our cash and cash equivalents and cash held in escrow and current capacity under our revolving line of credit, was $863.8 million as of September 30, 2026, compared to $1.1 billion as of December 31, 2025.

Previous wording

Our principal uses of capital for the three and six months ended June 30, 2026 were our land purchases, land development, home construction, construction of multi-family rental properties, stock repurchases, dividends, and the payment of routine liabilities.

Current wording

Our principal uses of capital for the three and nine months ended September 30, 2026 were our land purchases, land development, home construction, construction of multi-family rental properties, stock repurchases, dividends, and the payment of routine liabilities.

Previous wording

We use funds generated by operations, available borrowings under our revolving line of credit, and proceeds from issuances of debt or equity to fund our short-term working capital obligations and our purchases of land, as well as land development, home construction activities, and other cash needs. We had $329.6 million outstanding under our revolving line of credit as of June 30, 2026, as compared to $51.5 million outstanding as of December 31, 2025.

Current wording

We use funds generated by operations, available borrowings under our revolving line of credit, and proceeds from issuances of debt or equity to fund our short-term working capital obligations and our purchases of land, as well as land development, home construction activities, and other cash needs. On September 30, 2026, we entered into an amendment to our credit agreement, which, among other changes, increased the aggregate commitments under our revolving line of credit from $1.0 billion to $1.2 billion. We had $456.0 million outstanding under our revolving line of credit as of September 30, 2026, as compared to $51.5 million outstanding as of December 31, 2025.

Previous wording

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future in addition to our outstanding debt obligations and debt service requirements described below. These obligations impact our short-term and long-term liquidity and capital resource needs. For the three and six months ended June 30, 2026, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 that was filed with the SEC on January 29, 2026, other than an increase in borrowings under our line of credit as of June 30, 2026 to $329.6 million, as compared to $51.5 million as of December 31, 2025, which borrowings are subject to variable interest rates.

Current wording

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future in addition to our outstanding debt obligations and debt service requirements described below. These obligations impact our short-term and long-term liquidity and capital resource needs. For the three and nine months ended September 30, 2026, there were no material changes to the contractual obligations we previously described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 that was filed with the SEC on January 29, 2026, other than: (i) an amendment to our credit agreement, which among other changes, increased our aggregate commitments under our revolving line of credit to $1.2 billion and extended the maturity date for participating extending lenders to November 1, 2030, and (ii) an increase in borrowings under our revolving line of credit as of September 30, 2026 to $456.0 million, as compared to $51.5 million as of December 31, 2025, which borrowings are subject to variable interest rates.

Previous wording

We strive to strategically manage our lot pipeline, while selectively reducing our lot pipeline by terminating certain contracts in markets that do not meet our investment criteria, in light of current market conditions, in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts. We believe this balance provides us flexibility to adjust to market conditions as they develop. As of June 30, 2026, we had outstanding purchase contracts and option contracts for an aggregate of 26,447 lots totaling approximately $2.0 billion and we had an aggregate of $92.2 million of deposits for land contracts, of which $85.1 million were non-refundable cash deposits pertaining to land contracts. For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more or less prevalent in certain geographic regions.

Current wording

We strive to strategically manage our lot pipeline, while selectively reducing our lot pipeline by terminating certain contracts in markets that do not meet our investment criteria, in light of current market conditions, in order to maintain a balance between the number of owned lots as compared to lots we control through option and other contracts. We believe this balance provides us flexibility to adjust to market conditions as they develop. As of September 30, 2026, we had outstanding purchase contracts and option contracts for an aggregate of 27,496 lots totaling approximately $2.0 billion and we had an aggregate of $84.6 million of deposits for land contracts, of which $77.5 million were non-refundable cash deposits pertaining to land contracts. For contracts for which cash deposits were non-refundable, and subject to the terms of the outstanding contracts continuing to meet our investment criteria, we currently anticipate performing on the majority of our purchase and option contracts during the next 24 months. Our performance, including the timing and amount of purchase, if any, under these outstanding purchase and option contracts is subject to change and dependent on future market conditions. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing market conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more or less prevalent in certain geographic regions.

Previous wording

(2)As of June 30, 2026 and December 31, 2025, other financing obligations included certain secured borrowings and insurance premium notes, which bore a weighted average interest rate of 6.0% and 5.8%, respectively.

Current wording

(2)As of September 30, 2026 and December 31, 2025, other financing obligations included certain secured borrowings and insurance premium notes, which bore a weighted average interest rate of 6.3% and 5.8%, respectively.

Previous wording

As of June 30, 2026, we had outstanding $500.0 million in aggregate principal amount of our 3.875% Senior Notes due 2029 (the “2029 Notes”), which principal balance is due in August 2029. Prior to that date, interest only payments are due semi-annually in February and August of each year. These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions, and contains various optional redemption provisions to redeem the 2029 Notes, in whole or in part, at a time before, on, or after, February 15, 2029, and a put provision triggered by certain change of control events. As of June 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $497.6 million.

Current wording

As of September 30, 2026, we had outstanding $500.0 million in aggregate principal amount of our 3.875% Senior Notes due 2029 (the “2029 Notes”), which principal balance is due in August 2029. Prior to that date, interest only payments are due semi-annually in February and August of each year. These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions, and contains various optional redemption provisions to redeem the 2029 Notes, in whole or in part, at a time before, on, or after, February 15, 2029, and a put provision triggered by certain change of control events. As of September 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $497.8 million.

Previous wording

As of June 30, 2026, we had outstanding $500.0 million in aggregate principal amount of our 6.625% Senior Notes due 2033 (the “2033 Notes”), which principal balance is due in September 2033. Prior to that date, interest only payments are due semi-annually in March and September of each year. These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions, and contains various optional redemption provisions to redeem the 2033 Notes, in whole or in part, at a time before, on, or after, September 15, 2028, and a put provision triggered by certain change of control events. As of June 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $493.8 million.

Current wording

As of September 30, 2026, we had outstanding $500.0 million in aggregate principal amount of our 6.625% Senior Notes due 2033 (the “2033 Notes”), which principal balance is due in September 2033. Prior to that date, interest only payments are due semi-annually in March and September of each year. These notes were issued under an indenture which contains certain restrictive covenants on issuing future secured debt and other transactions, and contains various optional redemption provisions to redeem the 2033 Notes, in whole or in part, at a time before, on, or after, September 15, 2028, and a put provision triggered by certain change of control events. As of September 30, 2026, the aggregate obligation, inclusive of unamortized financing costs on these notes, was $494.0 million.

Previous wording

As of June 30, 2026 and December 31, 2025, $119.0 million and $90.3 million was outstanding under the construction loan agreements respectively, with borrowings that bore a weighted average interest rate of 6.0% and 6.1% as of June 30, 2026 and December 31, 2025, respectively, and we were in compliance with all covenants thereunder.

Current wording

As of September 30, 2026 and December 31, 2025, $129.5 million and $90.3 million was outstanding under the construction loan agreements respectively, with borrowings that bore a weighted average interest rate of 6.1% and 6.1% as of September 30, 2026 and December 31, 2025, respectively, and we were in compliance with all covenants thereunder.