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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-8951

Sekisui House U.S., Inc.

(Exact name of Registrant as specified in its charter)


Delaware			84-0622967
(State or other jurisdiction of incorporation or organization)			(I.R.S. employer identification no.)


4350 South Monaco Street, Suite 500									80237
Denver, Colorado									(Zip code)
(Address of principal executive offices)

(303) 773-1100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated Filer

☒

Smaller Reporting Company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 30, 2025, outstanding common stock consisted of 100 shares of common stock, $0.01 par value per share, all of which were held by an affiliate of SH Residential Holdings, LLC (“Parent”).

Table of Contents

Sekisui House U.S., Inc.

FORM 10-Q

FOR THE QUARTER ENDED September 30, 2025

INDEX


		Page No.
Part I. Financial Information:

Item 1.	Unaudited Consolidated Financial Statements:

	Consolidated Balance Sheets at September 30, 2025 and December 31, 2024	1

	Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2025 and 2024	2

	Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024	3

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	4

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	45

Part II. Other Information:

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 5.	Other Information	46

Item 6.	Exhibits	46

Signatures		47

EXPLANATORY NOTE

The Company is filing this Quarterly Report on Form 10-Q on a voluntary basis to disclose the events reported herein. The Company no longer has an obligation to file reports with the Securities and Exchange Commission ("SEC") as it no longer has any class of securities registered under Sections 12(b), 12(g) or 15(d) of the Securities Exchange Act of 1934. The Company, in its sole discretion, may stop making filings with the SEC at any time and no assumptions should be made as to continued reporting with the SEC.

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PART I. FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements

Sekisui House U.S., Inc.

Consolidated Balance Sheets


	September 30, 2025		December 31, 2024
	(unaudited)
	(Dollars in thousands, except share and per share amounts)
ASSETS
Homebuilding:
Cash and cash equivalents	$	65,789	$	605,653
Restricted cash	—		1,222

Trade and other receivables	95,279		87,465
Accounts receivable due from Parent	—		22,190
Inventories:
Housing completed or under construction	2,267,226		2,116,229
Land and land under development	2,192,885		1,636,024
Total inventories	4,460,111		3,752,253
Property and equipment, net	65,663		67,855
Deferred tax asset, net	28,241		21,648
Prepaids and other assets	101,083		121,505
Total homebuilding assets	4,816,166		4,679,791
Financial Services:
Cash and cash equivalents	142,945		232,217

Mortgage loans held-for-sale, net	180,681		236,806
Other assets	28,765		21,828
Total financial services assets	352,391		490,851
Total Assets	$	5,168,557	$	5,170,642
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	115,115	$	121,152
Accrued and other liabilities	296,362		316,197
Revolving credit facility	85,000		—
Senior notes, net	1,484,938		1,484,267
Total homebuilding liabilities	1,981,415		1,921,616
Financial Services:
Accounts payable and accrued liabilities	126,128		121,667
Mortgage repurchase facility	143,008		177,618
Total financial services liabilities	269,136		299,285
Total Liabilities	2,250,551		2,220,901
Stockholders' Equity
Common stock, $0.01 par value; 150 shares authorized; 100 issued and outstanding at September 30, 2025 and December 31, 2024	—		—
Additional paid-in-capital	1,197,734		1,197,734
Retained earnings	1,720,272		1,752,007

Total Stockholders' Equity	2,918,006		2,949,741
Total Liabilities and Stockholders' Equity	$	5,168,557	$	5,170,642

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

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Sekisui House U.S., Inc.

Consolidated Statements of Operations and Comprehensive Income


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands, except share and per share amounts)
Homebuilding:
Home sale revenues	$	832,292	$	1,386,655	$	2,911,594	$	4,123,303
Home cost of sales	(707,493)		(1,133,532)		(2,487,150)		(3,372,423)
Inventory impairments	(39,850)		(6,300)		(49,600)		(16,750)
Total cost of sales	(747,343)		(1,139,832)		(2,536,750)		(3,389,173)
Gross profit	84,949		246,823		374,844		734,130
Selling, general and administrative expenses	(109,608)		(129,096)		(348,290)		(479,792)

Interest and other income	1,028		11,115		8,690		45,688
Transaction costs	—		(329)		—		(38,595)
Other income (expense)	(5,427)		(739)		(10,743)		(4,323)
Homebuilding pretax income	(29,058)		127,774		24,501		257,108

Financial Services:
Revenues	23,734		43,357		81,306		112,289
Expenses	(15,176)		(21,010)		(51,440)		(59,733)
Other income, net	3,104		5,559		10,607		15,657
Financial services pretax income	11,662		27,906		40,473		68,213

Income (loss) before income taxes	(17,396)		155,680		64,974		325,321
Benefit (provision) for income taxes	6,760		(22,143)		(9,873)		(70,831)
Net income (loss)	$	(10,636)	$	133,537	$	55,101	$	254,490

Other comprehensive income net of tax:
Unrealized gain (loss) related to available-for-sale debt securities	$	—	$	21	$	—	$	(6)
Other comprehensive income (loss)	—		21		—		(6)
Comprehensive income (loss)	$	(10,636)	$	133,558	$	55,101	$	254,484

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

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Sekisui House U.S., Inc.

Consolidated Statements of Changes in Stockholders’ Equity

(Dollars in thousands, except share amounts)


	Nine Months Ended September 30, 2025
	Common Stock			Additional Paid-in Capital		Retained Earnings		Total
	Shares	Amount
Balance at December 31, 2024	100	$	—	$	1,197,734	$	1,752,007	$	2,949,741
Net income	—	—		—		40,082		40,082


Balance at March 31, 2025	100	$	—	$	1,197,734	$	1,792,089	$	2,989,823
Net income	—	—		—		25,655		25,655
Cash dividends declared	—	—		—		(86,836)		(86,836)
Balance at June 30, 2025	100	$	—	$	1,197,734	$	1,730,908	$	2,928,642
Net income (loss)	—	—		—		(10,636)		(10,636)

Balance at September 30, 2025	100	$	—	$	1,197,734	$	1,720,272	$	2,918,006


	Nine Months Ended September 30, 2024
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at December 31, 2023	74,661,479	$	747	$	1,824,434	$	1,552,653	$	51	$	3,377,885
Net income	—	—		—		95,819		—		95,819
Other comprehensive income (loss)	—	—		—		—		(47)		(47)
Shares issued under stock-based compensation programs, net	386,523	3		(25,629)		—		—		(25,626)
Cash dividends declared	—	—		—		(41,276)		—		(41,276)
Stock-based compensation expense	—	—		2,632		—		—		2,632
Forfeiture of restricted stock	(301)	—		—		—		—		—
Balance at March 31, 2024	75,047,701	$	750	$	1,801,437	$	1,607,196	$	4	$	3,409,387
Net income	—	—		—		25,134		—		25,134
Other comprehensive income (loss)	—	—		—		—		20		20
Shares issued under stock-based compensation programs, net	1,653	—		28		—		—		28
Stock-based compensation expense	—	—		173		—		—		173
Effect of Merger transaction	(75,049,254)	(750)		(603,904)		—		—		(604,654)
Balance at June 30, 2024	100	$	—	$	1,197,734	$	1,632,330	$	24	$	2,830,088
Net income	—	—		—		133,537		—		133,537
Shares issued under stock-based compensation programs, net	—	—		—		—		21		21
Cash dividends declared	—	—		—		(41,300)		—		(41,300)
Balance at September 30, 2024	100	$	—	$	1,197,734	$	1,724,567	$	45	$	2,922,346

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

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Sekisui House U.S., Inc.

Consolidated Statements of Cash Flows


	Nine Months Ended September 30,
	2025		2024

	(Dollars in thousands)
Operating Activities:
Net income	$	55,101	$	254,490
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	—		1,319
Depreciation and amortization	19,148		24,759
Inventory impairments	49,600		16,750
Project abandonment costs	7,848		3,411
Impairment of property and equipment	2,676		—
Amortization of discount of marketable debt securities	—		(4,252)


Deferred income tax benefit (expense)	(6,593)		14,175
Net changes in assets and liabilities:
Trade and other receivables	(9,017)		(28,064)
Accounts receivable due from Parent	22,190		(22,190)
Mortgage loans held-for-sale, net	56,125		27,472
Housing completed or under construction	(176,393)		(158,927)
Land and land under development	(588,242)		52,865
Prepaids and other assets	14,074		(23,476)
Accounts payable and accrued and other liabilities	(21,955)		(19,236)
Net cash provided by (used in) operating activities	(575,438)		139,096

Investing Activities:
Purchases of marketable securities	—		(177,133)
Maturities of marketable securities	—		170,000

Purchases of property and equipment	(18,447)		(11,830)
Net cash used in investing activities	(18,447)		(18,963)

Financing Activities:
Draws (payments) on mortgage repurchase facility, net	(34,610)		(33,760)
Draws (payments) on homebuilding line of credit, net	85,000		(9,000)


Dividend payments	(86,836)		(82,576)
Payments of deferred financing costs	(27)		—
Distribution to Parent	—		(611,369)
Issuance of shares under stock-based compensation programs, net	—		(25,598)
Net cash used in financing activities	(36,473)		(762,303)

Net decrease in cash, cash equivalents and restricted cash	(630,358)		(642,170)
Cash, cash equivalents and restricted cash:
Beginning of period	839,092		1,642,897
End of period	$	208,734	$	1,000,727

Reconciliation of cash, cash equivalents and restricted cash:
Homebuilding:
Cash and cash equivalents	$	65,789	$	807,999
Restricted cash	—		1,522
Financial Services:

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Cash and cash equivalents	142,945		191,206
Total cash, cash equivalents and restricted cash	$	208,734	$	1,000,727

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

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1. Basis of Presentation

The Unaudited Consolidated Financial Statements of Sekisui House U.S., Inc. (formerly known as M.D.C. Holdings, Inc.) ("SHUS," “the Company," “we,” “us,” or “our,” which refer to Sekisui House U.S., Inc. and its subsidiaries) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of SHUS at September 30, 2025 and for all periods presented. These statements should be read in conjunction with SHUS’s Consolidated Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Included in these footnotes are certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this section are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered.

Where necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through additional and more detailed information about a reportable segment's expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We adopted this amendment in the fourth quarter of 2024. As a result of the adoption, there was no material impact on our consolidated balance sheet or consolidated statement of operations and comprehensive income. Footnote 3 (Segment Reporting) was updated to comply with the new required disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures. This amendment modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold, (2) the amount of income taxes paid (net of refunds received) (disaggregated by federal, state, and foreign taxes) as well as individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid net of refunds, (3) the income or loss from continuing operations before income tax expense or benefit (disaggregated between domestic and foreign) and (4) income tax expense or benefit from continuing operations (disaggregated by federal, state and foreign). The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, while retrospective application is permitted. We are currently evaluating ASU 2023-09 and do not expect it to have a material effect on the consolidated financial statements and disclosures.

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In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)" ("ASU 2024-03"). The amendments in this update enhance disclosures about a public business entity’s expenses and provide more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

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3. Segment Reporting

An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. We have identified our CODM as one key executive—the Chief Executive Officer (“CEO”). The CODMs' evaluation of segment performance is based on segment pretax income for all reportable segments. Pretax income is used at the segment level for forecasting and actual results to evaluate performance of each segment and further assist in decision making regarding allocation of capital and other resources between segments.

We have identified each homebuilding division as an operating segment. Our homebuilding operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments conducted ongoing operations in the following states:

•West (Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington)

•Mountain (Colorado, Idaho and Utah)

•East (Alabama, Florida, Maryland, Tennessee and Virginia)

Our financial services business consists of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income, we consider HomeAmerican to be a reportable segment (“mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (a) the combined reported profit of all operating segments that did not report a loss or (b) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets.

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance, treasury, information technology, insurance, risk management, litigation and human resources. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding operations section of our consolidated statements of operations and comprehensive income.

The following tables present operating results relating to our homebuilding and financial services operations:


	Three Months Ended September 30, 2025
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage operations		Other		Total
Revenues	$	408,574	$	294,767	$	128,951	$	—	$	10,390	$	13,344	$	856,026
Home cost of sales	$	(346,229)	$	(250,662)	$	(110,602)	$	—	$	—	$	—	$	(707,493)
Inventory impairments	$	(20,450)	$	(6,775)	$	(12,625)	$	—	$	—	$	—	$	(39,850)
Selling, general and administrative expenses	$	(52,714)	$	(25,878)	$	(20,338)	$	(10,678)	$	—	$	—	$	(109,608)

Interest and other income (1)	$	83	$	70	$	118	$	757	$	—	$	—	$	1,028
Expenses (2)	$	—	$	—	$	—	$	—	$	(10,542)	$	(4,634)	$	(15,176)
Other income (expense), net (3)	$	(1,229)	$	(135)	$	(1,204)	$	(2,859)	$	1,176	$	1,928	$	(2,323)
Pretax income	$	(11,965)	$	11,387	$	(15,700)	$	(12,780)	$	1,025	$	10,638	$	(17,396)

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	Three Months Ended September 30, 2024
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage operations		Other		Total
Revenues	$	804,561	$	340,034	$	242,060	$	—	$	26,391	$	16,966	$	1,430,011
Home cost of sales	$	(652,706)	$	(277,600)	$	(203,226)	$	—	$	—	$	—	$	(1,133,533)
Inventory impairments	$	(4,600)	$	—	$	(1,700)	$	—	$	—	$	—	$	(6,300)
Selling, general and administrative expenses	$	(65,790)	$	(26,251)	$	(24,332)	$	(12,723)	$	—	$	—	$	(129,096)
Transaction costs	$	—	$	—	$	—	$	(329)	$	—	$	—	$	(329)
Interest and other income (1)	$	197	$	70	$	79	$	10,769	$	—	$	—	$	11,116
Expenses (2)	$	—	$	—	$	—	$	—	$	(14,341)	$	(6,669)	$	(21,010)
Other income (expense), net (3)	$	(391)	$	(210)	$	(150)	$	11	$	2,207	$	3,352	$	4,819
Pretax income	$	81,271	$	36,043	$	12,731	$	(2,272)	$	14,257	$	13,649	$	155,680


	Nine Months Ended September 30, 2025
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage operations		Other		Total
Revenues	$	1,483,356	$	947,612	$	480,626	$	—	$	39,168	$	42,138	$	2,992,900
Home cost of sales	$	(1,256,723)	$	(814,240)	$	(416,187)	$	—	$	—	$	—	$	(2,487,150)
Inventory impairments	$	(29,450)	$	(6,775)	$	(13,375)	$	—	$	—	$	—	$	(49,600)
Selling, general and administrative expenses	$	(170,003)	$	(83,091)	$	(65,809)	$	(29,387)	$	—	$	—	$	(348,290)

Interest and other income (1)	$	465	$	195	$	377	$	7,653	$	—	$	—	$	8,690
Expenses (2)	$	—	$	—	$	—	$	—	$	(35,858)	$	(15,582)	$	(51,440)
Other income (expense), net (3)	$	(4,142)	$	(638)	$	(3,103)	$	(2,860)	$	4,318	$	6,289	$	(136)
Pretax income	$	23,503	$	43,063	$	(17,471)	$	(24,594)	$	7,628	$	32,845	$	64,974

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	Nine Months Ended September 30, 2024
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage operations		Other		Total
Revenues	$	2,477,208	$	1,016,284	$	629,811	$	—	$	69,192	$	43,097	$	4,235,592
Home cost of sales	$	(2,017,219)	$	(835,102)	$	(520,102)	$	—	$	—	$	—	$	(3,372,423)
Inventory impairments	$	(11,600)	$	(400)	$	(4,750)	$	—	$	—	$	—	$	(16,750)
Selling, general and administrative expenses	$	(198,494)	$	(79,540)	$	(66,222)	$	(135,536)	$	—	$	—	$	(479,792)
Transaction costs	$	—	$	—	$	—	$	(38,595)	$	—	$	—	$	(38,595)
Interest and other income (1)	$	605	$	286	$	283	$	44,514	$	—	$	—	$	45,688
Expenses (2)	$	—	$	—	$	—	$	—	$	(40,158)	$	(19,575)	$	(59,733)
Other income (expense), net (3)	$	(2,496)	$	(332)	$	(716)	$	(779)	$	6,096	$	9,561	$	11,334
Pretax income	$	248,005	$	101,195	$	38,304	$	(130,396)	$	35,130	$	33,083	$	325,321

(1) Includes interest income and gain (loss) on sale of other assets.

(2) Includes interest expense and general and administrative expense.

(3) Includes abandoned project costs and other non-operating expenses (Homebuilding) and interest income (Financial Services).

The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily includes cash and cash equivalents, trade and other receivables and deferred tax assets. The assets in our financial services operations consist mostly of cash and cash equivalents and mortgage loans held-for-sale.


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
Homebuilding assets
West	$	2,649,059	$	2,261,391
Mountain	1,044,454		1,055,134
East	899,221		593,167
Corporate	223,432		770,099
Total homebuilding assets	$	4,816,166	$	4,679,791
Financial services assets
Mortgage operations	$	213,148	$	260,899
Other	139,243		229,952
Total financial services assets	$	352,391	$	490,851

Total assets	$	5,168,557	$	5,170,642

4. Earnings Per Share

The Earnings Per Share disclosure required by ASC 260, Earnings Per Share, is only required for reporting entities with publicly-traded equity securities, including those that have filed a registration statement to sell equity securities. As discussed in Footnote 21, Merger, the Company cancelled all outstanding equity securities that were not converted into the right to receive merger consideration. As such, there were no outstanding publicly-traded equity securities as of September 30, 2025 or September 30, 2024.

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5. Fair Value Measurements

ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs, other than quoted prices in active markets, that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:


		Fair Value
Financial Instrument	Hierarchy	September 30, 2025		December 31, 2024

		(Dollars in thousands)



Mortgage loans held-for-sale, net	Level 2	$	180,681	$	236,806

Derivative and financial instruments, net (Note 17)
Interest rate lock commitments	Level 2	$	(6,398)	$	(277)
Forward sales of mortgage-backed securities	Level 2	$	(3,432)	$	4,047
Mandatory delivery forward loan sale commitments	Level 2	$	80	$	515
Best-effort delivery forward loan sale commitments	Level 2	$	(7)	$	3

The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of September 30, 2025 and December 31, 2024.

Debt securities. Our debt securities consist of U.S. government treasury securities with original maturities upon acquisition of less than six months and are treated as available-for-sale investments and, as such, are recorded at fair value with all changes in fair value initially recorded through other comprehensive income. Debt securities are reviewed on a regular basis for impairment. There were no impairments recorded during the three and nine months ended September 30, 2024. There were no outstanding debt securities as of December 31, 2024 or anytime during the nine months ended September 30, 2025.

Mortgage loans held-for-sale, net. Our mortgage loans held-for-sale, which are measured at fair value on a recurring basis, include (1) mortgage loans held-for-sale that are under commitments to sell and (2) mortgage loans held-for-sale that are not under commitments to sell. At September 30, 2025 and December 31, 2024, we had $35.4 million and $95.6 million, respectively, of mortgage loans held-for-sale at fair value under commitments to sell. The fair value for those loans was based on quoted market prices for those mortgage loans, which are Level 2 fair value inputs. At September 30, 2025 and December 31, 2024, we had $145.3 million and $141.2 million, respectively, of mortgage loans held-for-sale that were not under commitments to sell. The fair value for those loans was primarily based upon the estimated market price received from an outside party, which is a Level 2 fair value input.

Gains (losses) on mortgage loans, net, are included as a component of revenues in the financial services section of our consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2025, we recorded gains (losses) on mortgage loans held-for-sale, net of $(27.8) million and $(90.8) million, respectively, compared to $10.4 million and $13.7 million for the same period in the prior year.

Derivative and financial instruments, net. Our derivatives and financial instruments, which include (1) interest rate lock commitments, (2) forward sales of mortgage-backed securities, (3) mandatory delivery forward loan sale commitments and (4) best-effort delivery forward loan sale commitments, are measured at fair value on a recurring basis based on market prices for similar instruments.

For the financial assets and liabilities that the Company does not reflect at fair value, the following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and cash equivalents (excluding debt securities with an original maturity of three months or less), restricted cash, trade and other receivables, prepaids and other assets, accounts payable, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value.

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Mortgage Repurchase Facility. The debt associated with our mortgage repurchase facility (see Note 18 for further discussion) is at floating rates that approximate current market rates and have relatively short-term maturities, generally within 30 days. The fair value approximates carrying value and is based on Level 2 inputs.

Senior Notes. The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.


	September 30, 2025				December 31, 2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

	(Dollars in thousands)
$300 million 3.850% Senior Notes due January 2030, net	$	298,687	$	288,880	$	298,478	$	282,124
$350 million 2.500% Senior Notes due January 2031, net	348,242		310,738		348,010		303,020
$500 million 6.000% Senior Notes due January 2043, net	491,791		477,702		491,596		499,370
$350 million 3.966% Senior Notes due August 2061, net	346,218		234,257		346,183		255,605
Total	$	1,484,938	$	1,311,577	$	1,484,267	$	1,340,119

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6. Inventories

The following table sets forth, by reportable segment, information relating to our homebuilding inventories:


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
Housing completed or under construction:
West	$	1,220,302	$	1,112,172
Mountain	613,000		616,200
East	433,924		387,857
Subtotal	2,267,226		2,116,229
Land and land under development:
West	1,350,387		1,069,594
Mountain	403,503		408,189
East	438,995		158,241
Subtotal	2,192,885		1,636,024
Total inventories	$	4,460,111	$	3,752,253

Our inventories are primarily associated with communities where we intend to construct and sell homes, including models and unsold homes. Costs capitalized to land and land under development primarily include: (1) land costs; (2) land development costs; (3) entitlement costs; (4) capitalized interest; (5) engineering fees; and (6) title insurance, real property taxes and closing costs directly related to the purchase of the land parcel. Components of housing completed or under construction primarily include: (1) land costs transferred from land and land under development; (2) direct construction costs associated with a house; (3) real property taxes, engineering fees, permits and other fees; (4) capitalized interest; and (5) indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs. Land costs are transferred from land and land under development to housing completed or under construction at the point in time that construction of a home on an owned lot begins.

In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), homebuilding inventories, excluding those classified as held for sale, are carried at cost unless events and circumstances indicate that the carrying value of the underlying subdivision may not be recoverable. We evaluate inventories for impairment at each quarter end on a subdivision level basis as each such subdivision represents the lowest level of identifiable cash flows. In making this determination, we review, among other things, the following for each subdivision:

•actual and trending “Operating Margin” (which is defined as home sale revenues less home cost of sales and all incremental costs associated directly with the subdivision, including sales commissions, incentives and marketing costs);

•forecasted Operating Margin for homes in backlog;

•actual and trending net home orders;

•homes available for sale;

•market information for each sub-market, including competition levels, home foreclosure levels, the size and style of homes currently being offered for sale and lot size; and

•known or probable events indicating that the carrying value may not be recoverable.

If events or circumstances indicate that the carrying value of our inventory may not be recoverable, assets are reviewed for impairment by comparing the undiscounted estimated future cash flows from an individual subdivision (including capitalized interest) to its carrying value. If the undiscounted future cash flows are less than the subdivision’s carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We generally determine the estimated fair value of each subdivision by determining the present value of the estimated future cash flows at discount rates, which are Level 3 inputs, that are commensurate with the risk of the subdivision under evaluation. The evaluation for the recoverability of the carrying value of the assets for each individual subdivision can be impacted significantly by our estimates of future home sale revenues, home construction costs, and development costs per home, all of which are Level 3 inputs.

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If land is classified as held for sale, we measure it in accordance with ASC 360 at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, we primarily rely upon the most recent negotiated price, which is a Level 2 input. If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies, which are considered Level 3 inputs. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired down to its estimated fair value less costs to sell.

Inventory impairments recognized by segment for the three and nine months ended September 30, 2025 and 2024 are shown in the table below.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Housing Completed or Under Construction:
West	$	11,574	$	2,520	$	17,363	$	4,851
Mountain	1,823		—		1,823		400
East	6,009		1,042		6,759		1,922
Subtotal	19,406		3,562		25,945		7,173
Land and Land Under Development:
West	8,876		2,080		12,087		6,749
Mountain	4,952		—		4,952		—
East	6,616		658		6,616		2,828
Subtotal	20,444		2,738		23,655		9,577
Total Inventory Impairments	$	39,850	$	6,300	$	49,600	$	16,750

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.


	Impairment Data				Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments	Discount Rate
	(Dollars in thousands)
September 30, 2025	9	$	39,850	107,525	12%	—	18%
June 30, 2025	6	9,750		44,309	12%	—	15%
Total		$	49,600

September 30, 2024	3	$	6,300	27,423	15%
June 30, 2024	4	4,550		27,834	12%	—	15%
March 31, 2024	3	5,900		17,634	12%	—	18%
Total		$	16,750

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7. Capitalization of Interest

We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Homebuilding interest incurred	$	18,537	$	17,254	$	52,493	$	51,928
Less: Interest capitalized	(18,537)		(17,254)		(52,493)		(51,928)
Homebuilding interest expensed	$	—	$	—	$	—	$	—

Interest capitalized, beginning of period	$	59,575	$	60,242	$	57,170	$	64,659
Plus: Interest capitalized during period	18,537		17,254		52,493		51,928
Less: Previously capitalized interest included in home cost of sales	(14,106)		(20,171)		(45,657)		(59,262)
Interest capitalized, end of period	$	64,006	$	57,325	$	64,006	$	57,325

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8. Leases

We lease certain property, land and equipment, the majority of which comprise property related leases to provide office space where we operate our business. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Our property related leases typically have terms of between three and five years, with the exception of the lease governing the Company’s headquarters. All of our property related leases are classified as operating leases. These leases do not contain any residual value guarantees or restrictive covenants and do not include variable lease payments, except for the payment of common area maintenance and real estate taxes. Many of our property related leases give us the option to extend the lease term for a period of time, generally consistent with the initial lease term. These options are excluded from our calculation of the right-of-use asset and lease liability until such time as we determine it is reasonably certain that the option will be exercised.

The property related lease for the Company’s headquarters in Denver, Colorado was amended during the first quarter of 2025, extending the lease for two additional years which in total is twelve years in length with an expiration date of October 31, 2028 and contains a ten year option to extend the term of the lease through 2038. This option has been excluded from our calculation of the right-of-use asset and lease liability as it is not currently considered reasonably certain that the option will be exercised.

Operating lease expense is included as a component of selling, general and administrative expenses in the homebuilding section and expenses in the financial services section of our consolidated statements of operations and comprehensive income. Components of operating lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Operating lease cost 1	$	2,019	$	2,130	$	6,029	$	6,418
Less: Sublease income	—		(47)		—		(342)
Net lease cost	$	2,019	$	2,083	$	6,029	$	6,076

1Includes variable lease costs, which are immaterial.

Supplemental cash flow information related to leases was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,120	$	2,334	$	6,357	$	6,620
Leased assets obtained in exchange for new operating lease liabilities	$	—	$	108	$	6,530	$	1,384

Weighted-average remaining lease term and discount rate for operating leases were as follows:


	September 30, 2025		September 30, 2024
Weighted-average remaining lease term (in years)	2.9		2.7
Weighted-average discount rate	5.5	%	5.5	%

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Maturities of operating lease liabilities were as follows:


	Year Ended December 31,
	(Dollars in thousands)
2025 (excluding the nine months ended September 30, 2025)	$	1,378
2026	7,737
2027	5,772
2028	4,291
2029	81
Thereafter	—
Total operating lease payments	$	19,259
Less: Effects of discounting	1,398
Present value of operating lease liabilities 1	$	17,861

_______________________________________________________________

1Homebuilding and financial services operating lease liabilities of $17.9 million and $0.0 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at September 30, 2025.

9. Homebuilding Prepaids and Other Assets

The following table sets forth the components of homebuilding prepaids and other assets:


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
Land option deposits	$	35,309	$	52,038
Operating lease right-of-use asset (Note 8)	17,681		16,146
Prepaids	32,660		37,130
Goodwill	6,008		6,008
Deferred debt issuance costs on revolving credit facility, net	4,805		5,943
Other	4,620		4,240
Total prepaids and other assets	$	101,083	$	121,505

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10. Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities

The following table sets forth information relating to homebuilding accrued and other liabilities:


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
Accrued compensation and related expenses	$	59,468	$	86,925
Customer and escrow deposits	7,418		5,116
Warranty accrual (Note 11)	54,781		50,753
Lease liability (Note 8)	17,861		16,867
Land development and home construction accruals	18,597		19,303
Accrued interest	15,091		30,934

Construction defect claim reserves (Note 12)	10,432		11,209
Retentions payable	24,575		15,621
Other accrued liabilities	88,139		79,469
Total accrued and other liabilities	$	296,362	$	316,197

The following table sets forth information relating to financial services accounts payable and accrued liabilities:


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
Insurance reserves (Note 12)	$	96,694	$	96,851
Accounts payable and other accrued liabilities	29,434		24,816
Total accounts payable and accrued liabilities	$	126,128	$	121,667

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11. Warranty Accrual

Our homes are sold with limited third-party warranties and, under our agreement with the issuer of the third-party warranties, we are responsible for performing all of the work for the first two years of the warranty coverage, and paying for certain work required to be performed subsequent to year two. We record accruals for general and structural warranty claims, as well as accruals for known, unusual warranty-related expenditures. Our warranty accrual is recorded based upon historical payment experience in an amount estimated to be adequate to cover expected costs of materials and outside labor during warranty periods. The determination of the warranty accrual rate for closed homes and the evaluation of our warranty accrual balance at period end are based on an internally developed analysis that includes known facts and interpretations of circumstances, including, among other things, our trends in historical warranty payment levels and warranty payments for claims not considered to be normal and recurring.

Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our consolidated balance sheets and adjustments to our warranty accrual are recorded as an increase or reduction to home cost of sales in the homebuilding section of our consolidated statements of operations and comprehensive income.

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three and nine months ended September 30, 2025 and 2024. The warranty accrual during the three and nine months ended September 30, 2025 increased due to a shift in the mix of closings to divisions with higher warranty accrual rates. The adjustment to increase our warranty accrual during the nine months ended September 30, 2024 of $3.1 million was due to higher general warranty related expenditures.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Balance at beginning of period	$	54,117	$	46,427	$	50,753	$	44,082
Expense provisions	5,019		7,210		18,189		20,933
Cash payments	(4,355)		(6,925)		(14,161)		(21,353)
Adjustments	—		—		—		3,050
Balance at end of period	$	54,781	$	46,712	$	54,781	$	46,712

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12. Insurance and Construction Defect Claim Reserves

The establishment of reserves for estimated losses associated with insurance policies with StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns, and changing regulatory and legal environments. It is possible that changes in the insurance payment experience used in estimating our ultimate insurance losses could have a material impact on our insurance reserves.

Effective September 30, 2025, Allegiant novated, assigned and transferred to StarAmerican all of its rights, title, interest and obligations regarding insurance policies, including all insurance reserves, claims, benefits, premiums, and other amounts payable or receivable.

The establishment of reserves for estimated losses to be incurred by our homebuilding subsidiaries associated with: (1) the self-insured retention (“SIR”) portion of construction defect claims that are expected to be covered under insurance policies with StarAmerican and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies with StarAmerican, are based on third party actuarial studies that include known facts similar to those for our insurance reserves. It is possible that changes in the payment experience used in estimating our ultimate losses for construction defect claims could have a material impact on our reserves.

The table set forth below summarizes our insurance and construction defect claim reserves activity for the three and nine months ended September 30, 2025 and 2024. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Balance at beginning of period	$	108,217	$	108,078	$	108,060	$	100,759
Expense provisions	3,157		5,417		11,323		15,938
Cash payments, net of recoveries	(4,248)		(1,824)		(12,257)		(5,026)
Balance at end of period	$	107,126	$	111,671	$	107,126	$	111,671

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of what future cash payments will be for subsequent periods.

13. Income Taxes

As a result of the Merger described in Footnote 21, and effective April 20, 2024, the Company is included in the Sekisui House US Holdings (parent of SH Residential Holdings, LLC) consolidated tax group for U.S. federal income tax purposes. Although the Company’s post-merger results are included in the Sekisui House consolidated return, our income tax provision is calculated primarily as though we were a separate taxpayer for the full year. However, under certain circumstances, transactions between the Company and Sekisui House are assessed using consolidated tax return rules and any difference in liability between the separate company method is planned to be addressed in a future tax sharing arrangement.

Our overall effective income tax rates were 38.9% and 15.2% for the three and nine months ended September 30, 2025 and 14.2% and 21.8% for the three and nine months ended September 30, 2024, respectively. The rates for the three and nine months ended September 30, 2025 resulted in an income tax benefit (expense) of $6.8 million and $(9.9) million, respectively, compared to $(22.1) million and $(70.8) million for the three and nine months ended September 30, 2024, respectively. The year-over-year increase in the effective tax rate for the three months ended September 30, 2025 is due to the impacts of IRC 45L home energy efficiency credits on income tax benefit for the period. The year-over-year decrease in the effective tax rate for the nine months ended September 30, 2025, is primarily due to an increase in IRC 45L home energy efficiency credits as a percent of pre-tax book income for the period.

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14. Senior Notes

The carrying values of our senior notes as of September 30, 2025 and December 31, 2024, net of any unamortized debt issuance costs or discount, were as follows:


	September 30, 2025		December 31, 2024

	(Dollars in thousands)
3.850% Senior Notes due January 2030, net	$	298,687	$	298,478
2.500% Senior Notes due January 2031, net	348,242		348,010
6.000% Senior Notes due January 2043, net	491,791		491,596
3.966% Senior Notes due August 2061, net	346,218		346,183
Total	$	1,484,938	$	1,484,267

Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries.

15. Stock-Based Compensation

The following table sets forth share-based award expense activity for the three and nine months ended September 30, 2025 and 2024, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:


	Three Months Ended September 30,				Nine months Ended September 30,
	2025		2024		2025		2024

	(Dollars in thousands)
Stock option grants expense	$	—	$	—	$	—	$	—
Restricted stock awards expense	—		—		—		1,319
Performance share units expense	—		—		—		—
Total stock-based compensation	$	—	$	—	$	—	$	1,319

As of September 30, 2025, there are no awards outstanding.

Additional detail on the performance share units ("PSUs") expense is included below:

2023 PSU Grants. For the year to date period through April 19, 2024, the Company concluded that achievement of any of the performance metrics had not met the level of probability required to record compensation expense and as such, no expense related to these awards was recognized. As a part of the Merger, all PSUs, whether vested or unvested, outstanding as of immediately prior to the closing of the Merger were fully vested, cancelled and automatically converted into the right to receive an amount in cash. As such, no share-based compensation expense related to these awards was recognized.

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16. Commitments and Contingencies

Letter of Credit Facility. We maintain an unsecured letter of credit agreement with a financial institution (“LOC Facility”) to obtain performance letters of credit from time to time in the ordinary course of operating our business. Under the LOC Facility, which expires on June 5, 2028, we may issue up to $25.0 million of letters of credit. As of September 30, 2025 and December 31, 2024, we had letters of credit outstanding under the LOC Facility of $7.3 million and $0 million, respectively.

Surety Bonds and Letters of Credit. We are required to obtain surety bonds and letters of credit in support of our obligations for land development and subdivision improvements, homeowner association dues, warranty work, contractor license fees and earnest money deposits. At September 30, 2025, we had outstanding surety bonds and letters of credit totaling $391.6 million and $180.5 million, respectively, including $148.7 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $236.7 million and $148.4 million, respectively. All letters of credit as of September 30, 2025, excluding those issued by HomeAmerican, were issued under our letter of credit facility or our unsecured revolving credit facility (see Note 18 for further discussion). We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit.

We have made no material guarantees with respect to third-party obligations.

Litigation. Due to the nature of the homebuilding business, we have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

With regard to the previously disclosed Building Trades Pension Fund of Western Pennsylvania matter, on or about March 3, 2025, all claims against SHRH were dismissed without prejudice.

Lot Option Contracts. In the ordinary course of business, we enter into lot option purchase contracts (“Option Contracts”), generally through a deposit of cash or a letter of credit, for the right to purchase land or lots at a future point in time with predetermined terms. The use of such land option and other contracts generally allow us to reduce the risks associated with direct land ownership and development, reduces our capital and financial commitments, and minimizes the amount of land inventories on our consolidated balance sheets. In certain cases, these contracts will be settled shortly following the end of the period. Our obligation with respect to Option Contracts is generally limited to forfeiture of the related deposits. At September 30, 2025, we had cash deposits, capitalized costs and letters of credit totaling $28.9 million, $6.3 million and $15.3 million, respectively, at risk associated with options to purchase 5,671 lots.

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17. Derivative and Financial Instruments

In the normal course of business, we enter into interest rate lock commitments ("IRLCs") with borrowers who have applied for loan funding and meet defined credit and underwriting criteria. Since we can terminate IRLCs if the borrower does not comply with the terms of the contract, and some IRLCs may expire without being utilized, these IRLCs do not necessarily represent future cash requirements.

Market risk arises if interest rates move adversely between the time we originate a mortgage loan or we enter into an IRLC and the date the loan is committed or sold to an investor. We mitigate our exposure to interest rate market risk relating to mortgage loans held-for-sale and IRLCs using: (1) forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, (2) mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and (3) best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. The best-effort delivery forward loan sale commitments do not meet the definition of a derivative financial instrument in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). We have elected the fair value option for the best-effort delivery forward loan sale commitments in accordance with ASC Topic 825, Financial Instruments ("ASC 825").

Forward sales of mortgage-backed securities are the predominant derivative and financial instruments we use to minimize market risk during the period from the time we extend an interest rate lock to a loan applicant until the time the loan is committed under a best-effort or mandatory delivery forward loan sale commitment.

The following table sets forth the notional amounts and fair value measurement of our derivative and financial instruments at September 30, 2025 and December 31, 2024:


	September 30, 2025								December 31, 2024

	Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net		Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net
	(Dollars in thousands)								(Dollars in thousands)
Interest rate lock commitments	$	161,713	$	296	$	6,694	$	(6,398)	$	57,807	$	644	$	921	$	(277)
Forward sales of mortgage-backed securities	280,500		99		3,531		(3,432)		189,000		4,047		—		4,047
Mandatory delivery forward loan sale commitments	34,994		182		102		80		101,557		670		155		515
Best-effort delivery forward loan sale commitments	2,136		4		11		(7)		1,306		3		—		3

For the three and nine months ended September 30, 2025 and 2024, we recorded net losses on these derivative and financial instruments measured on a recurring basis of $2.3 million and $9.8 million, respectively, compared to $8.1 million and $3.8 million for the same periods in the prior year, in revenues in the financial services section of our consolidated statements of operations and comprehensive income. There are no credit-risk-related contingent features within our derivative agreements, and counterparty risk is considered minimal.

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18. Lines of Credit

Revolving Credit Facility. On November 19, 2024 the Company entered into an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders, which may be used for general corporate purposes. The Revolving Credit Facility supersedes and replaces the Credit Agreement, dated as of December 13, 2013 and as amended as of December 17, 2014, December 18, 2015, September 29, 2017, November 1, 2018, December 28, 2020, April 11, 2023 and March 20, 2024. The aggregate commitment within the agreement is up to $900.0 million (the "Commitment"), with a $195.0 million sublimit for letters of credit. The aggregate amount of the commitments may increase to an amount not to exceed $1.40 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents. Unless terminated earlier, the Revolving Credit Facility will mature on November 17, 2028.

Borrowings under the Revolving Credit Facility bear interest at a floating rate equal to Term SOFR or Daily Simple SOFR (in each case as defined in the Revolving Credit Facility), plus an applicable margin between 1.125% and 1.625% per annum, or if selected by the Company, a base rate plus an applicable margin between 0.125% and 0.625% per annum. The “applicable margins” described above are determined by a schedule based on the leverage ratio of the Company, as defined in the Revolving Credit Facility. The Revolving Credit Facility also provides for customary fees including commitment fees payable to each lender ranging from 0.15% to 0.30% per annum based on the Company’s leverage ratio.

The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated leverage covenant and interest coverage covenant, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility.

The Revolving Credit Facility also contains customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, breach of any financial covenant and change of control. Upon the occurrence and during the continuance of any event of default, the Administrative Agent, with the consent or at the direction of the required lenders, may accelerate the payment of the obligations thereunder and exercise various other customary default remedies. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of September 30, 2025.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At September 30, 2025 and December 31, 2024, there were $24.5 million and $43.6 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At September 30, 2025 and December 31, 2024, we had $85.0 million and $0.0 million, respectively, outstanding under the Revolving Credit Facility. As of September 30, 2025, availability under the Revolving Credit Facility was approximately $790.5 million.

Mortgage Repurchase Facility. HomeAmerican entered into the Second Amended and Restated Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”) on September 20, 2024. The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $150 million (subject to increase by up to $150 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Amended and Restated Custody Agreement (“Custody Agreement”), dated as of September 20, 2024, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The total capacity of the facility at September 30, 2025 was $150 million. The termination date of the Repurchase Agreement is August 5, 2026.

At September 30, 2025 and December 31, 2024, HomeAmerican had $143.0 million and $177.6 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Pricing under the Mortgage Repurchase Facility is based on SOFR.

Effective April 16, 2025, HomeAmerican entered into a Waiver and Consent agreement with USBNA, in which USBNA as agent waived any events of default under the Mortgage Repurchase Facility arising with respect to an event of default as HomeAmerican was not in compliance by permitting the Adjusted Tangible Net Worth to be less than $21.0 million for the month ending February 28, 2025.

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The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of September 30, 2025.

19. Related Party Transactions

SH Residential Holdings, LLC and affiliates are considered a related party for the period subsequent to the Merger closing on April 19, 2024. As of December 31, 2024, the Company had accounts receivable due from Parent of $22.2 million related to payments in connection with the Merger funded by the Company that are included within Accounts receivable due from Parent in the Consolidated Balance Sheets. There was no amount outstanding as of September 30, 2025.

Further, within Total inventories in the Consolidated Balance Sheet is $92.4 million of land purchased by the Company from affiliates of SH Residential Holdings, LLC as of September 30, 2025. The Company sold lots acquired from affiliates of SH Residential Holdings, LLC resulting in $23.4 million and $51.4 million of home sales revenues as well as gross margin of $2.9 million and $6.6 million during the three and nine months ended September 30, 2025, respectively. The Company sold $8.4 million of land to affiliates of SH Residential Holdings, LLC for no gain or loss during the nine months ended September 30, 2025. There were no land sales during the nine months ended September 30, 2024.

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20. Supplemental Guarantor Information

Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company:

•M.D.C. Land LLC

•RAH of Florida, Inc.

•Richmond American Construction, Inc.

•Richmond American Construction NM, Inc.

•Richmond American Homes of Arizona, Inc.

•Richmond American Homes of Colorado, Inc.

•Richmond American Homes of Florida, LP

•Richmond American Homes of Idaho, Inc.

•Richmond American Homes of Maryland, Inc.

•Richmond American Homes of Nevada, Inc.

•Richmond American Homes of New Mexico, Inc.

•Richmond American Homes of Oregon, Inc.

•Richmond American Homes of Pennsylvania, Inc.

•Richmond American Homes of Tennessee, Inc.

•Richmond American Homes of Texas, Inc.

•Richmond American Homes of Utah, Inc.

•Richmond American Homes of Virginia, Inc.

•Richmond American Homes of Washington, Inc.

The senior note indentures do not provide for a suspension of the guarantees. Other than for the senior notes due 2061, the senior note indentures, provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). The indenture for the senior notes due 2061 provides that, if a Guarantor is released under its guarantees of our credit facilities or other publicly traded debt securities, the Guarantor will also be released under its guarantee of the senior notes due 2061. Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing.

As the combined assets, liabilities and results of operations of Sekisui House U.S., Inc. and the Guarantor Subsidiaries (the “Obligor Group”) are not materially different from those in the homebuilding section of our consolidated balance sheets and consolidated statements of operations and comprehensive income, separate summarized financial information of the Obligor Group has not been included. As of September 30, 2025 amounts due to non-guarantor subsidiaries from the Obligor Group totaled $99.3 million. As of December 31, 2024, amounts due from non-guarantor subsidiaries to the Obligor Group totaled $34.8 million.

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21. Merger

On April 19, 2024, the Company completed the transactions contemplated by the Agreement and Plan of Merger, dated as of January 17, 2024 (the “Merger Agreement”), by and among the Company, SH Residential Holdings, LLC (“Parent”), Clear Line, Inc., a wholly owned subsidiary of Parent (“Merger Sub”), and, solely for the purposes of Section 6.2, Section 6.17 and Section 9.15 of the Merger Agreement, Sekisui House, Ltd. (“Guarantor”), providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). At the effective time of the Merger (the “Effective Time”):

(i) each share of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”) outstanding as of immediately prior to the Effective Time (other than shares of Company Common Stock that are (A)(1) held by the Company as treasury stock; (2) held directly by Parent or Merger Sub; or (3) held by any direct or indirect wholly owned Subsidiary of Parent or Merger Sub, in each case, immediately prior to the Effective Time (collectively, the “Owned Company Shares”), (B) held by any direct or indirect wholly owned Subsidiary of the Company immediately prior to the Effective Time, (C) held by a holder who is entitled to demand, and has properly and validly demanded, appraisal for such shares of Company Common Stock in accordance with, and who complies in all respects with, Section 262 of the DGCL (“Dissenting Shares”), or (D) subject to vesting restrictions and/or forfeiture back to the Company (“Company RSAs”)) was automatically converted into the right to receive $63.00 per share, in cash, without interest thereon (the “Merger Consideration”);

(ii) each Owned Company Share was automatically cancelled and ceased to exist, and no consideration or payment will be delivered in exchange therefor or in respect thereof; and

(iii) each share of Company Common Stock held by any direct or indirect wholly owned Subsidiary of the Company was be converted into such number of shares of common stock of the surviving corporation with an aggregate value immediately after the consummation of the Merger equal to the Merger Consideration.

The Merger Agreement also provides that, at the Effective Time, by virtue of the Merger:

(i) each option to purchase shares of Company Common Stock granted under any Company Equity Plan (each, a “Company Option”) that was outstanding and unexercised, whether vested or unvested, as of immediately prior to the Effective Time was fully vested, cancelled and automatically converted into the right to receive an amount in cash (without interest), if any, equal to the product of (A) the excess (if any) of (1) the Merger Consideration over (2) the exercise price per share of such Company Option, multiplied by (B) the number of shares of Company Common Stock subject to such Company Option, subject to any required withholding of Taxes; provided, however, that any Company Option with respect to which the applicable per share exercise price is greater than the Merger Consideration will be cancelled without consideration;

(ii) each Company RSA, whether vested or unvested, that was outstanding as of immediately prior to the Effective Time was fully vested, cancelled and automatically converted into the right to receive an amount in cash (without interest) equal to the product of (A) the aggregate number of shares of Company Common Stock subject to such Company RSA, multiplied by (B) the Merger Consideration, subject to any required withholding of Taxes; and

(iii) each performance stock unit award relating to shares of Company Common Stock granted under any Company Equity Plan (each, a “Company PSU”), whether vested or unvested, that was outstanding as of immediately prior to the Effective Time was fully vested, cancelled and automatically converted into the right to receive an amount in cash equal to the product of (A) the aggregate number of shares of Company Common Stock subject to such Company PSU based on maximum performance, multiplied by (B) the Merger Consideration, subject to any required withholding of Taxes.

The Merger Agreement further provides that, at the Effective Time, by virtue of the Merger each issued and outstanding share of common stock, par value $0.01 per share, of Merger Sub shall be automatically converted into and become one fully paid and non-assessable share of Surviving Corporation Stock. This resulted in 100 shares of common stock at a $0.01 par value per share issued and outstanding.

The aggregate consideration of the Merger was approximately $4.9 billion, of which the Company funded $664.6 million.

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On April 19, 2024, the New York Stock Exchange (“NYSE”) filed with the SEC a notification of removal from listing and registration on Form 25 to effect the delisting of all shares of the Company’s Common Stock from the NYSE, as well as the deregistration of the Company’s Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, the Company’s Common Stock will no longer be listed on the NYSE.

On April 30, 2024, the Company filed with the SEC a certification on Form 15, requesting the termination of registration of the shares of the Company’s Common Stock under Section 12(g) of the Exchange Act and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act with respect to the shares of the Company’s Common Stock.

On June 13, 2024, the Company filed with the SEC a certification on Form 15, requesting the termination of registration of the shares of the Company’s 6.000% Senior Notes due 2043 under Section 12(g) of the Exchange Act and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act with respect to the all of the Company's senior notes.

Parent has accounted for the Merger under the acquisition method of accounting with the Company deemed to be the acquiree for accounting purposes. The Company and Parent have elected not to push down purchase accounting adjustments to reflect the assets and liabilities acquired at fair value, and therefore amounts reflected in the financial statements hereto have not been adjusted.

The Company incurred $0.3 million and $38.6 million of transaction costs during the three and nine months ended September 30, 2024, respectively, in connection with the Merger, which are disclosed within the Transaction costs line item within the Consolidated Statements of Operations and Comprehensive Income. There were no transaction costs incurred during the three and nine months ended September 30, 2025.

22. Subsequent Events

Effective October 15, 2025, the Company entered into the First Amendment to Credit Agreement (“First Amendment”) to its Revolving Credit Facility. The First Amendment increased the Aggregate Commitment to $1.40 billion and extended the Facility Termination Date of $1.36 billion of the facility commitments to October 15, 2029, with the remaining $40.0 million commitment continuing to terminate on November 17, 2028. The First Amendment also provides that (subject to additional lender commitments) the aggregate amount of the commitments may increase to an amount not to exceed $1.9 billion (the “accordion” feature), and updates other provisions of the Credit Agreement.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Unaudited Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are based upon management’s experiences, observations, and analyses. Actual results may differ materially from those indicated in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024 and this Quarterly Report on Form 10-Q.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

	(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	832,292		$	1,386,655		$	2,911,594		$	4,123,303
Home cost of sales	(707,493)			(1,133,532)			(2,487,150)			(3,372,423)
Inventory impairments	(39,850)			(6,300)			(49,600)			(16,750)
Total cost of sales	(747,343)			(1,139,832)			(2,536,750)			(3,389,173)
Gross profit	84,949			246,823			374,844			734,130
Gross margin	10.2		%	17.8		%	12.9		%	17.8		%
Selling, general and administrative expenses	(109,608)			(129,096)			(348,290)			(479,792)

Interest and other income	1,028			11,115			8,690			45,688
Transaction costs	—			(329)			—			(38,595)
Other income (expense)	(5,427)			(739)			(10,743)			(4,323)
Homebuilding pretax income	(29,058)			127,774			24,501			257,108

Financial Services:
Revenues	23,734			43,357			81,306			112,289
Expenses	(15,176)			(21,010)			(51,440)			(59,733)
Other income, net	3,104			5,559			10,607			15,657
Financial services pretax income	11,662			27,906			40,473			68,213

Income before income taxes	(17,396)			155,680			64,974			325,321
Benefit (provision) for income taxes	6,760			(22,143)			(9,873)			(70,831)
Net income	$	(10,636)		$	133,537		$	55,101		$	254,490

Cash provided by (used in):
Operating Activities	$	(294,093)		$	88,721		$	(575,438)		$	139,096
Investing Activities	$	(6,576)		$	85,390		$	(18,447)		$	(18,963)
Financing Activities	$	102,019		$	(94,161)		$	(36,473)		$	(762,303)

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Overview

Industry Conditions and Outlook for SHUS*

The homebuilding industry continued to see softened market conditions and affordability challenges during the third quarter of 2025. The macroeconomic backdrop remains challenging given consumers affordability concerns, continuing uncertainty related to geopolitical issues, and continued elevated mortgage rates. As a result, we experienced a decrease in our sales absorption rate and our gross margin from home sales during the three months ended September 30, 2025 compared to the same period in the prior year.

We believe that we are well equipped to navigate the current market conditions given our strong financial position. We ended the quarter with total cash and cash equivalents of $208.7 million, total liquidity of $1.01 billion, a debt-to-capital ratio of 35.0% and no senior note maturities until 2030.

Three Months Ended September 30, 2025

For the three months ended September 30, 2025, our net income (loss) was $(10.6) million, a 108% decrease compared to net income of $133.5 million for the same period in the prior year. This was driven by a decrease in pretax income of both our homebuilding business and financial services business. Our homebuilding pretax income decreased $156.8 million, or 123% year-over-year. Our financial services business pretax income decreased $16.2 million, or 58%, compared to the same period in the prior year. The decrease in homebuilding pretax income was primarily due to a 40% decrease in home sale revenues, a 760 basis point decrease in gross margins from home sales and a 390 basis point increase in our selling, general and administrative expenses as a percentage of revenue. The decrease in gross margin from home sales was driven largely by $39.9 million in inventory impairments during the three months ended September 30, 2025 compared to $6.3 million in the same period in the prior year, as well as increased incentive levels. The decrease in financial services pretax income was driven by our mortgage operations. The decrease in pretax income for our mortgage operations was driven by decreased loan origination volume due to the decrease in homes closed as well as special financing programs offered on loans locked during the quarter. This was partially offset by an increase in capture rate. Our financial services and homebuilding businesses each saw a decrease in interest income due to decreases in cash and short-term investments year-over-year.

Nine Months Ended September 30, 2025

For the nine months ended September 30, 2025, our net income was $55.1 million, a 78% decrease compared to net income of $254.5 million for the same period in the prior year. Both our homebuilding business and financial services businesses drove the decrease. Our homebuilding pretax income decreased $232.6 million, or 90% year-over-year. Our financial services business pretax income decreased $27.7 million, or 41% year-over-year. The main drivers of the decrease in homebuilding pretax income and financial services pretax income are consistent with the third quarter commentary discussed above.

* See "Forward-Looking Statements" below.

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Homebuilding

Pretax Income (Loss):


	Three Months Ended								Nine Months Ended
	September 30,				Change				September 30,				Change
	2025		2024		Amount		%		2025		2024		Amount		%

	(Dollars in thousands)
West	$	(11,965)	$	81,270	$	(93,235)	(115)	%	$	23,503	$	248,004	$	(224,501)	(91)	%
Mountain	11,387		36,044		(24,657)		(68)	%	43,063		101,196		(58,133)		(57)	%
East	(15,700)		12,732		(28,432)		(223)	%	-17,471		38,304		(55,775)		(146)	%
Corporate	(12,780)		(2,272)		(10,508)		(463)	%	(24,594)		(130,396)		105,802		81	%
Total Homebuilding pretax income	$	(29,058)	$	127,774	$	(156,832)	(123)	%	$	24,501	$	257,108	$	(232,607)	(90)	%

For the three months ended September 30, 2025, we recorded homebuilding pretax income (loss) of $(29.1) million, a decrease of 123% from $127.8 million for the same period in the prior year. The decrease was due to a 40% decrease in home sale revenues, a 760 basis point decrease in gross margin from home sales and a 390 basis point increase in our selling, general and administrative expenses as a percentage of home sale revenues.

Our West segment experienced a $93.2 million year-over-year decrease in pretax income, due to a decrease in gross margin from home sales, which included an increase in inventory impairments of $15.9 million, a 49% decrease in home sale revenues and an increase in the selling, general and administrative expenses as a percentage of home sale revenues. Our Mountain segment experienced a $24.7 million decrease in pretax income from the prior year, as a result of a 13% decrease in home sale revenues, a decrease in gross margin from home sales, which included an increase of $6.8 million of inventory impairments and an increase in the selling, general and administrative expenses as a percentage of home sale revenues. Our East segment experienced a $28.4 million decrease in pretax income from the prior year, due primarily to a decrease in gross margin from home sales, which included an increase of $10.9 million of inventory impairments, a 47% decrease in home sale revenues, and an increase in the selling, general and administrative expenses as a percentage of home sale revenues. Our Corporate segment experienced a $10.5 million decrease in pretax income driven by a decrease in interest income.

For the nine months ended September 30, 2025, we recorded homebuilding pretax income of $24.5 million, a decrease of 90% from $257.1 million for the same period in the prior year. The decrease was due to a 29% decrease in home sale revenues, a 490 basis point decrease in gross margin from home sales and a decrease in interest income year-over-year. These decreases were partially offset by $38.6 million of transaction costs related to the Merger during the nine months ended September 30, 2024. Commentary on the drivers of the decrease in pretax income in our West, Mountain and East homebuilding segments is consistent with the 2025 third quarter discussion above. The increase in the Corporate segment pretax income was driven by the nine months ended September 30, 2024, which included accelerated vesting of equity awards, key executives' transaction bonuses and transaction costs in connection with the closing of the Merger as well as bonus compensation that was historically paid in the form of equity awards that were instead paid in cash. This was partially offset by a decrease in interest income.

Assets:


	September 30, 2025		December 31, 2024		Change
					Amount		%

	(Dollars in thousands)
West	$	2,649,059	$	2,261,391	$	387,668	17	%
Mountain	1,044,454		1,055,134		(10,680)		(1)	%
East	899,221		593,167		306,054		52	%
Corporate	223,432		770,099		(546,667)		(71)	%
Total homebuilding assets	$	4,816,166	$	4,679,791	$	136,375	3	%

Total homebuilding assets increased 3% from December 31, 2024 to September 30, 2025. The decrease in the Corporate segment was driven by a decrease in cash and cash equivalents due to increased land acquisition and development spend during the nine months ended September 30, 2025. Changes in assets within our homebuilding segments were primarily due to changes in land and land under development and housing completed or under construction. Land and land under development increased within our East, Mountain and West homebuilding segments due to increased land acquisition during the current year. Housing

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completed or under construction increased within our East and West homebuilding segments due to an increase in the number of finished homes at period end. The decrease in homebuilding assets in the Mountain segment was due to a larger decrease in housing completed or under construction.

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New Home Deliveries & Home Sale Revenues:

Changes in home sale revenues are impacted by changes in the number of new homes delivered and the average selling price of those delivered homes. Commentary for each of our segments on significant changes in these two metrics is provided below.


	Three Months Ended September 30,
	2025					2024					% Change
	Homes	Home Sale Revenues		Average Price		Homes	Home Sale Revenues		Average Price		Homes		Home Sale Revenues		Average Price

	(Dollars in thousands)
West	705	$	408,574	$	579.5	1,413	$	804,561	$	569.4	(50)	%	(49)	%	2	%
Mountain	479	294,767		615.4		542	340,034		627.4		(12)	%	(13)	%	(2)	%
East	272	128,951		474.1		584	242,060		414.5		(53)	%	(47)	%	14	%
Total	1,456	$	832,292	$	571.6	2,539	$	1,386,655	$	546.1	(43)	%	(40)	%	5	%


	Nine Months Ended September 30,
	2025					2024					% Change
	Homes	Home Sale Revenues		Average Price		Homes	Home Sale Revenues		Average Price		Homes		Home Sale Revenues		Average Price

	(Dollars in thousands)
West	2,634	$	1,483,356	$	563.2	4,342	$	2,477,208	$	570.5	(39)	%	(40)	%	(1)	%
Mountain	1,586	947,612		597.5		1,628	1,016,284		624.3		(3)	%	(7)	%	(4)	%
East	1,093	480,626		439.7		1,497	629,811		420.7		(27)	%	(24)	%	5	%
Total	5,313	$	2,911,594	$	548.0	7,467	$	4,123,303	$	552.2	(29)	%	(29)	%	(1)	%

West Segment Commentary

For the three and nine months ended September 30, 2025, the decrease in new home deliveries was due to a decrease in beginning backlog at the beginning of the respective periods and a decrease in net home sales during the respective periods.

Mountain Segment Commentary

For the three and nine months ended September 30, 2025, the decrease in new home deliveries was due to a decrease in beginning backlog at the beginning of the respective periods. For the three months ended September 30, 2025, also contributing to the decrease was a decrease in net home sales. The decrease in average selling price of homes delivered was a result of increased incentive levels.

East Segment Commentary

Gross Margin from Home Sales:

Our gross margin from home sales for the three months ended September 30, 2025 decreased 760 basis points year-over-year from 17.8% to 10.2%. Our gross margin from home sales for the nine months ended September 30, 2025 decreased 490 basis points year-over-year from 17.8% to 12.9%. The decrease in gross margin from home sales was primarily due to inventory impairments and increased incentive levels, and to a lesser extent, increased land costs.

Our gross margin from home sales are impacted by our historical land buying strategy, where we have targeted an owned and optioned lot supply of approximately two to three years worth of home closings. As a result, our land associated with homes closed are represented by more recent market values.

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Inventory Impairments:

Inventory impairments recognized by segment for the three and nine months ended September 30, 2025 and 2024 are shown in the table below.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Housing Completed or Under Construction:
West	$	11,574	$	2,520	$	17,363	$	4,851
Mountain	1,823		—		1,823		400
East	6,009		1,042		6,759		1,922
Subtotal	19,406		3,562		25,945		7,173
Land and Land Under Development:
West	8,876		2,080		12,087		6,749
Mountain	4,952		—		4,952		—
East	6,616		658		6,616		2,828
Subtotal	20,444		2,738		23,655		9,577
Total Inventory Impairments	$	39,850	$	6,300	$	49,600	$	16,750

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.


	Impairment Data					Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments		Discount Rate
	(Dollars in thousands)
September 30, 2025	9	$	39,850	$	107,525	12%	—	18%
June 30, 2025	6	$	9,750	$	44,309	12%	—	15%
Total		$	49,600

September 30, 2024	3	$	6,300	$	27,423	15%
June 30, 2024	4	$	4,550	$	27,834	12%	—	15%
March 31, 2024	3	$	5,900	$	17,634	12%	—	18%
Total		$	16,750

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Selling, General and Administrative Expenses:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025			2024			Change		2025			2024			Change

	(Dollars in thousands)
General and administrative expenses	$	56,953		$	57,362		$	(409)	$	167,998		$	268,947		$	(100,949)
General and administrative expenses as a percentage of home sale revenues	6.8		%	4.1		%	270 bps		5.8		%	6.5		%	-70 bps
Marketing expenses	$	25,785		$	28,994		$	(3,209)	$	81,705		$	87,406		$	(5,701)
Marketing expenses as a percentage of home sale revenues	3.1		%	2.1		%	100 bps		2.8		%	2.1		%	70 bps
Commissions expenses	$	26,870		$	42,740		$	(15,869)	$	98,587		$	123,439		$	(24,851)
Commissions expenses as a percentage of home sale revenues	3.2		%	3.1		%	10 bps		3.4		%	3.0		%	40 bps
Total selling, general and administrative expenses	$	109,608		$	129,096		$	(19,488)	$	348,290		$	479,792		$	(131,500)
Total selling, general and administrative expenses as a percentage of home sale revenues	13.2		%	9.3		%	390 bps		12.0		%	11.6		%	40 bps

General and administrative expenses decreased for the three months ended September 30, 2025 due to a decrease in compensation related costs. The decrease for the nine months ended September 30, 2025 as the prior year periods included accelerated vesting of equity awards, key executives' transaction bonuses and transaction costs in connection with the closing of the Merger as well as bonus compensation that was historically paid in the form of equity awards that were instead paid in cash.

Marketing expenses decreased for the three and nine months ended September 30, 2025 compared to the previous periods driven by decreased deferred selling amortization and master marketing expenses due to a decrease in home closings year over year and decreased salary related expenses driven by a decrease in headcount. This was partially offset by an increase maintenance and utility costs as a result of having more spec homes in inventory.

Commissions expenses decreased for the three and nine months ended September 30, 2025 due to decreases in home sale revenues partially offset by increases in co-broker fees and to a lesser extent an increase in sales performance incentive commissions.

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Other Homebuilding Operating Data

Net New Orders and Active Subdivisions:

Changes in the dollar value of net new orders are impacted by changes in the number of net new orders and the average selling price of those homes. The dollar value and average selling prices of net new orders do not include financing incentives, as these forward commitments are entered into prior to the home sales and are not specific to an individual home. Commentary for each of our segments on significant changes in these two metrics is provided below.


	Three Months Ended September 30,
	2025						2024						% Change
	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes		Dollar Value		Average Price		Monthly Absorption Rate

	(Dollars in thousands)
West	765	$	463,673	$	606.1	2.45	963	$	539,761	$	560.5	2.85	(21)	%	(14)	%	8	%	(14)	%
Mountain	470	297,166		632.3		2.49	473	289,908		612.9		2.72	(1)	%	3	%	3	%	(9)	%
East	264	128,271		485.9		2.10	468	194,832		416.3		3.80	(44)	%	(34)	%	17	%	(45)	%
Total	1,499	$	889,110	$	593.1	2.39	1,904	$	1,024,501	$	538.1	3.01	(21)	%	(13)	%	10	%	(21)	%


	Nine Months Ended September 30,
	2025						2024						% Change
	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes		Dollar Value		Average Price		Monthly Absorption Rate

	(Dollars in thousands)
West	2,772	$	1,632,850	$	589.1	3.05	3,667	$	2,070,669	$	564.7	3.29	(24)	%	(21)	%	4	%	(7)	%
Mountain	1,642	1,028,023		626.1		3.04	1,533	950,243		619.9		2.89	7	%	8	%	1	%	5	%
East	1,137	525,690		462.3		3.16	1,442	607,546		421.3		4.01	(21)	%	(13)	%	10	%	(21)	%
Total	5,551	$	3,186,563	$	574.1	3.07	6,642	$	3,628,458	$	546.3	3.31	(16)	%	(12)	%	5	%	(7)	%

*Calculated as total net new orders (gross orders less cancellations) in period ÷ average active communities during period ÷ number of months in period.


					Average Active Subdivisions				Average Active Subdivisions
	Active Subdivisions				Three Months Ended				Nine Months Ended
	September 30,		%		September 30,		%		September 30,		%
	2025	2024	Change		2025	2024	Change		2025	2024	Change
West	110	107	3	%	104	112	(7)	%	101	124	(19)	%
Mountain	66	59	12	%	63	58	9	%	60	59	2	%
East	45	40	13	%	42	41	2	%	40	40	—	%
Total	221	206	7	%	209	211	(1)	%	201	223	(10)	%

During 2025, the Company updated its methodology for determining active subdivisions. Previously, a community would become active after its first five net sales. Now, a community is active after its first sale. Prior period disclosures were updated for both active subdivisions, average active subdivisions, and monthly absorption rate to align with the new methodology.

The dollar value and average selling prices of net new orders do not include financing incentives, as these forward commitments are entered into prior to the home sales and are not specific to an individual home.

West Segment Commentary

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For the three and nine months ended September 30, 2025, the decrease in the number of net new orders was primarily the result of a decrease in average active subdivisions and a decrease in the monthly sales absorption rate. The decrease in monthly sales absorption rate is due to decreased demand as a result of current market conditions. The increase in average selling price for the three and nine months ended September 30, 2025 was due to a change in mix to higher priced communities.

Mountain Segment Commentary

For the three months ended September 30, 2025, the decrease in the number of net new orders was a result of a decrease in monthly absorption rate partially offset by an increase in average active subdivisions. The decrease in monthly sales absorption rate is due to decreased demand during the quarter as a result of current market conditions. For the nine months ended September 30, 2025, the increase in the number of net new orders was primarily the result of an increase in monthly absorption rate. The increase in the monthly sales absorption rate was driven by increased sales incentives to increase sales pace, partially offset by decreased demand as a result of current market conditions.

East Segment Commentary

For the three and nine months ended September 30, 2025, the decrease in the number of net new orders was primarily the result of a decrease in monthly absorption rate. The decrease in monthly sales absorption rate is due to decreased demand as a result of current market conditions. The increase in the average selling price for the three and nine months ended September 30, 2025 is due to a change in mix to higher priced communities.

Cancellation Rate:


	Cancellations as a Percentage of Gross Sales
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
West	14	%	19	%	15	%	17	%
Mountain	14	%	14	%	15	%	15	%
East	19	%	21	%	16	%	18	%
Total	15	%	19	%	15	%	17	%

In light of our pivot to build more spec homes, we believe it is appropriate to view our cancellations as a product of gross sales during the period. Our cancellation rate as a percentage of gross sales decreased year-over-year during the three and nine months ended September 30, 2025 as a result of a decrease in beginning backlog, offset partially by a decrease in gross sales (before cancellations).

Backlog:


	September 30,
	2025					2024					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price

	(Dollars in thousands)
West	349	$	223,311	$	639.9	597	$	365,888	$	612.9	(42)	%	(39)	%	4	%
Mountain	151	105,856		701.0		249	162,675		653.3		(39)	%	(35)	%	7	%
East	128	67,567		527.9		219	99,952		456.4		(42)	%	(32)	%	16	%
Total	628	$	396,734	$	631.7	1,065	$	628,515	$	590.2	(41)	%	(37)	%	7	%

At September 30, 2025, we had 628 homes in backlog with a total value of $396.7 million. This represented a 41% decrease in the number of homes in backlog and a 37% decrease in the dollar value of those homes in backlog from September 30, 2024. The decrease in the number of homes in backlog was primarily a result of a shift in consumer preference to quick move-in homes and our associated pivot to build more spec homes. The increase in average selling price in each of the homebuilding segments is due to a change in mix to higher priced communities. The dollar value and average selling prices of homes in backlog do not include financing incentives, as these forward commitments are entered into prior to the home sales and are not specific to an individual home.

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Homes Completed or Under Construction (WIP lots):


	September 30,		%
	2025	2024	Change
Unsold:
Completed	2,221	824	170	%
Under construction	1,651	3,075	(46)	%
Total unsold started homes	3,872	3,899	(1)	%
Sold homes under construction or completed	599	1,062	(44)	%
Model homes under construction or completed	389	478	(19)	%
Total homes completed or under construction	4,860	5,439	(11)	%

The decrease in sold homes under construction or completed and increase in unsold homes completed is due to our pivot to build more spec homes and the slower sales pace during the three months ended September 30, 2025 due to current market conditions. The decrease in unsold homes under construction is due to a decrease of home starts during the period.

Lots Owned and Optioned (including homes completed or under construction):


	September 30, 2025			September 30, 2024
	Lots Owned	Lots Optioned	Total	Lots Owned	Lots Optioned	Total	Total % Change
West	10,361	1,668	12,029	9,242	2,504	11,746	2	%
Mountain	4,294	1,394	5,688	5,228	1,041	6,269	(9)	%
East	5,067	2,609	7,676	3,405	2,559	5,964	29	%
Total	19,722	5,671	25,393	17,875	6,104	23,979	6	%

Our total owned and optioned lots at September 30, 2025 were 25,393, which represented an 6% increase year-over-year. We believe that our total lot supply is sufficient to meet our operating needs. See "Forward-Looking Statements" below.

Financial Services


	Three Months Ended								Nine Months Ended
	September 30,				Change				September 30,				Change
	2025		2024		Amount		%		2025		2024		Amount		%
	(Dollars in thousands)
Financial services revenues
Mortgage operations	$	10,390	$	26,391	$	(16,002)	(61)	%	$	39,168	$	69,192	$	(30,026)	(43)	%
Other	13,344		16,966		(3,622)		(21)	%	42,138		43,097		(959)		(2)	%
Total financial services revenues	$	23,734	$	43,357	$	(19,623)	(45)	%	$	81,306	$	112,289	$	(30,983)	(28)	%
Financial services pretax income
Mortgage operations	$	1,024	$	14,257	$	(13,233)	(93)	%	$	7,628	$	35,130	$	(27,502)	(78)	%
Other	10,638		13,649		(3,011)		(22)	%	32,845		33,083		$	(238)	(1)	%
Total financial services pretax income	$	11,662	$	27,906	$	(16,244)	(58)	%	$	40,473	$	68,213	$	(27,740)	(41)	%

For the three months ended September 30, 2025, our financial services pretax income was $11.7 million, a 58% decrease compared to pretax income of $27.9 million for the same period in the prior year. The decrease in financial services pretax income was primarily due to our mortgage operations, which was impacted by special financing programs offered on loans locked during the quarter. Financial services pretax income was also impacted by the decrease in homes closed year-over-year as well as a decrease in interest income due to decreases in cash and short-term investments year-over-year.

For the nine months ended September 30, 2025, our financial services pretax income was $40.5 million, a 41% decrease compared to pretax income of $68.2 million for the same period in the prior year. The main drivers of the decrease in financial services pretax income are consistent with the third quarter commentary discussed above. In addition, our insurance operations

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within other financial services benefited from increased premium revenue resulting from higher renewal rates and profit sharing revenue from third party insurance providers.

The following table sets forth information for our mortgage operations segment relating to mortgage loans originated and capture rate.


	Three Months Ended						% or Percentage		Nine Months Ended						% or Percentage Change
	September 30,								September 30,
	2025			2024			Change		2025			2024
	(Dollars in thousands)
Total Originations (including transfer loans):
Loans	1,147			1,949			(41)	%	4,312			5,588			(23)	%
Principal	$	582,602		$	892,798		(35)	%	$	2,134,390		$	2,576,867		(17)	%
Capture Rate Data:
Capture rate as % of all homes delivered	79		%	77		%	2	%	81		%	75		%	6	%
Capture rate as % of all homes delivered (excludes cash sales)	87		%	84		%	3	%	88		%	82		%	6	%
Mortgage Loan Origination Product Mix:
FHA loans	29		%	32		%	(3)	%	33		%	31		%	2	%
Other government loans (VA & USDA)	17		%	17		%	—	%	19		%	17		%	2	%
Total government loans	46		%	49		%	(3)	%	52		%	48		%	4	%
Conventional loans	54		%	51		%	3	%	48		%	52		%	(4)	%
	100		%	100		%	—	%	100		%	100		%	—	%
Loan Type:
Fixed rate	83		%	100		%	(17)	%	95		%	94		%	1	%
ARM	17		%	—		%	17	%	5		%	6		%	(1)	%
Credit Quality:
Average FICO Score	744			742			—	%	740			743			—	%
Other Data:
Average Combined LTV ratio	86		%	83		%	3	%	86		%	84		%	2	%
Full documentation loans	100		%	100		%	—	%	100		%	100		%	—	%
Loans Sold to Third Parties:
Loans	1,140			2,093			(46)	%	4,470			5,652			(21)	%
Principal	$	575,629		$	960,618		(40)	%	$	2,197,122		$	2,596,284		(15)	%

Income Taxes

As a result of the Merger described in Footnote 21, and effective April 20, 2024, the Company is included in the Sekisui House US Holdings ("SHUSH") (parent of SH Residential Holdings, LLC) consolidated tax group for U.S. federal income tax purposes. Although the Company’s post-merger results are included in the SHUSH consolidated return, our income tax provision is calculated primarily as though we were a separate taxpayer for the full year. However, under certain circumstances, transactions between the Company and SHUSH are assessed using consolidated tax return rules and any difference in liability between the separate company method will be addressed in a future tax sharing arrangement.

Our overall effective income tax rates were 38.9% and 15.2% for the three and nine months ended September 30, 2025 and 14.2% and 21.8% for the three and nine months ended September 30, 2024, respectively. The rates for the three and nine months ended September 30, 2025 resulted in an income tax benefit (expense) of $6.8 million and $(9.9) million, respectively, compared to $(22.1) million and $(70.8) million for the three and nine months ended September 30, 2024, respectively. The year-over-year increase in the effective tax rate for the three months ended September 30, 2025 is due to the impacts of IRC 45L home energy efficiency credits on income tax benefit for the period. The year-over-year decrease in the effective tax rate for the nine months ended September 30, 2025, is primarily due to a increase in IRC 45L home energy efficiency credits as a percent of pre-tax book income for the period.

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CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Management evaluates such estimates and judgments on an on-going basis and makes adjustments as deemed necessary. Actual results could differ from these estimates if conditions are significantly different in the future. See "Forward-Looking Statements" below.

Our critical accounting estimates and policies have not changed from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024.

LIQUIDITY AND CAPITAL RESOURCES

We use our liquidity and capital resources to (1) support our operations, including the purchase of land, land development and construction of homes; (2) provide working capital; and (3) provide mortgage loans for our homebuyers. Our liquidity includes our cash and cash equivalents, Revolving Credit Facility (as defined below) and Mortgage Repurchase Facility (as defined below).

Material Cash Requirements

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of September 30, 2025, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, payments due on our Mortgage Repurchase Facility, payments due on our Revolving Credit Facility, purchase obligations related to expected acquisition of land under purchase agreements and land development agreements (many of which are secured by letters of credit or surety bonds) and operating leases. Other material cash requirements include land acquisition and development costs not yet contracted for, home construction costs, operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements and dividend payments.

At September 30, 2025, we had outstanding senior notes with varying maturities totaling an aggregate principal amount of $1.50 billion, with none payable within 12 months. Future interest payments associated with the notes total $1.12 billion, with $64.2 million payable within 12 months. As of September 30, 2025, we had $19.3 million of required operating lease future minimum payments.

At September 30, 2025, we had deposits of $35.3 million in the form of cash and $16.2 million in the form of letters of credit that secured option contracts to purchase 5,671 lots for a total estimated purchase price of $682.5 million.

At September 30, 2025, we had outstanding surety bonds and letters of credit totaling $391.6 million and $180.5 million, respectively, including $148.7 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit was approximately $236.7 million and $148.4 million, respectively. We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit. We have made no material guarantees with respect to third-party obligations.

Capital Resources

Our capital structure is primarily a combination of (1) permanent financing, represented by stockholders’ equity; (2) long-term financing, represented by our 3.850% senior notes due 2030, 2.500% senior notes due 2031, 6.000% senior notes due 2043, and 3.966% senior notes due 2061; (3) our Revolving Credit Facility; and (4) our Mortgage Repurchase Facility. Because of our current balance of cash and cash equivalents, ability to access the capital markets, and available capacity under both our Revolving Credit Facility and Mortgage Repurchase Facility, we believe that our capital resources are adequate to satisfy our

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short and long-term capital requirements, including meeting future payments on our senior notes as they become due. See “Forward-Looking Statements” below.

We may from time to time seek to retire or purchase our outstanding senior notes through cash purchases, whether through open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Senior Notes, Revolving Credit Facility and Mortgage Repurchase Facility

Senior Notes. Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries. We believe that we are in compliance with the representations, warranties and covenants in the senior note indentures.

Revolving Credit Facility. On November 19, 2024 the Company entered into an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders, which may be used for general corporate purposes. The Revolving Credit Facility supersedes and replaces the Credit Agreement, dated as of December 13, 2013 and as amended as of December 17, 2014, December 18, 2015, September 29, 2017, November 1, 2018, December 28, 2020 and, April 11, 2023 and March 20, 2024. The aggregate commitment within the agreement is up to $900.0 million (the "Commitment"), with a $195.0 million sublimit for letters of credit. The aggregate amount of the commitments may increase to an amount not to exceed $1.40 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents. Unless terminated earlier, the Revolving Credit Facility will mature on November 17, 2028.

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Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $150 million (subject to increase by up to $150 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Amended and Restated Custody Agreement (“Custody Agreement”), dated as of September 20, 2024, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The total capacity of the facility at September 30, 2025 was $150 million. The termination date of the Repurchase Agreement is August 5, 2026.

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Consolidated Cash Flow

During the nine months ended September 30, 2025, net cash used in operating activities was $575.4 million compared with net cash provided by operating activities of $139.1 million in the prior year period. During the nine months ended September 30, 2025 and 2024, one of the most significant sources of cash provided by operating activities was net income of $55.1 million and $254.5 million, respectively. During the nine months ended September 30, 2025, included in net income was $49.6 million of inventory impairments, compared to $16.8 million during the prior year period. During the nine months ended September 30, 2025, cash used to increase land and land under development was $588.2 million compared to cash provided by the decrease in land and land under development of $52.9 million. The increase in 2025 was the result of increasing lot acquisitions during the period, compared to starts outnumbering lot acquisitions during 2024. During the nine months ended September 30, 2025, cash used by housing completed or under construction was $176.4 million, compared to $158.9 million during the nine months ended September 30, 2024. Cash used in the nine months ended September 30, 2025 was impacted by an increase in homes completed in inventory while the nine months ended September 30, 2024 was impacted by an increase in the number of homes under construction during the period. Cash used in the increase in trade and other receivables for the nine months ended September 30, 2025 was $9.0 million compared to $28.1 million for the nine months ended September 30, 2024. The increase during the nine months ended September 30, 2025 and 2024 was driven by an decrease of homes closed at the end of the period. The increase during the nine months ended September 30, 2024 was also driven by an increase in taxes receivable as a result of benefits associated with deductible executive compensation. Cash provided by the change in mortgage loans held-for-sale, net for the nine months ended September 30, 2025 was $56.1 compared to $27.5 million for the nine months ended September 30, 2024. The cash provided during the nine months ended September 30, 2025 and 2024 was due to a higher level of loan sales compared to originations. Cash used in accounts receivable due from Parent was $22.2 million during the nine months ended September 30, 2024, driven by payments in connection with the Merger funded by the Company, compared to cash provided by change in accounts receivable due from the Parent of $22.2 million during the nine months ended September 30, 2025 due to repayment from Parent during the period.

During the nine months ended September 30, 2025, net cash used in investing activities was $18.4 million compared to $19.0 million in the same period in the prior year. Our net cash used in investing activities was comprised of purchases of property and equipment during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, net cash of $7.1 million was used to purchase marketable securities as well as $11.8 million of cash used in purchases of property and equipment.

During the nine months ended September 30, 2025 and 2024 net cash used in financing activities was $36.5 million and $762.3 million, respectively. The primary driver of this decrease in net cash used in financing activities was the increase in distribution to Parent of $611.4 million during the nine months ended September 30, 2024 due to the Company's funding of a portion of the consideration of the Merger. Net cash used in dividend payments was $86.8 million during the nine months ended September 30, 2025 compared to $82.6 million during the nine months ended September 30, 2024. Cash used in payments on mortgage repurchase facility, net was $34.6 million compared to $33.8 million during the same period in 2024. The decrease in cash provided by draws on mortgage repurchase facility, net during the nine months ended September 30, 2025 and 2024 was due to decreased mortgage loans held-for-sale at the end of the period. Cash provided by draws on homebuilding line of credit, net was $85.0 million during the nine months ended September 30, 2025 compared to cash used on payments on homebuilding line of credit, net of $9.0 million during the same period in the prior year. This increase during the nine months ended September 30, 2025 was due to increased land acquisition during the period.

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OTHER

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases, oral statements made by our officials in the course of presentations about the Company and conference calls in connection with quarterly earnings releases, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this Report are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered. Additionally, information about issues that could lead to material changes in performance and risk factors that have the potential to affect us are contained under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and Item 1A of Part II of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have a cash and investment policy that enables us to achieve an appropriate investment return while preserving principal and managing risk. Under this policy, cash and cash equivalents may include U.S. government securities, commercial bank deposits, commercial paper, certificates of deposit, money market funds, and time deposits, with maturities of three months or less. Marketable securities under this policy may include holdings in U.S. government securities with a maturity of more than three months, equity securities and corporate debt securities.

As of September 30, 2025, our cash and cash equivalents included commercial bank deposits and money market funds.

We are exposed to market risks related to fluctuations in interest rates on mortgage loans held-for-sale, mortgage interest rate lock commitments, marketable securities and debt. Financial instruments utilized in the normal course of business by HomeAmerican include forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. Such contracts are the only significant financial and derivative instruments utilized by SHUS. HomeAmerican’s mortgage loans in process for which an interest rate lock commitment had been made to a borrower that had not closed at September 30, 2025 had an aggregate principal balance of $161.7 million, of which $161.7 million had not yet been committed to a mortgage purchaser. In addition, HomeAmerican had mortgage loans held-for-sale with an aggregate principal balance of $188.0 million at September 30, 2025, of which $150.9 million had not yet been committed to a mortgage purchaser. In order to hedge the changes in fair value of interest rate lock commitments and mortgage loans held-for-sale that had not yet been committed to a mortgage purchaser, HomeAmerican had forward sales of securities totaling $280.5 million and $189.0 million at September 30, 2025 and December 31, 2024, respectively.

HomeAmerican provides mortgage loans that generally are sold forward on a best-efforts or mandatory commitment basis and subsequently delivered to a third-party purchaser between 5 and 35 days after closing. Forward sale commitments and forward sales of mortgage-backed securities are used for non-trading purposes to sell mortgage loans and economically hedge price risk due to fluctuations in interest rates on rate-locked mortgage loans in process that have not closed and mortgage loans held-for-sale. Due to this economic hedging philosophy, the market risk associated with these mortgages is limited. For forward sales commitments, forward sales of mortgage-backed securities and commitments to originate mortgage loans that are still outstanding at the end of a reporting period, we record the changes in fair value of these financial instruments in revenues in the financial services section of the consolidated statements of operations and comprehensive income with an offset to either other assets or accounts payable and accrued liabilities in the financial services section of our consolidated balance sheets, depending on the nature of the change.

We utilize our Revolving Credit Facility, our Mortgage Repurchase Facility and senior notes in our financing strategy. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but do not affect our earnings or

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cash flows. We do not have an obligation to prepay our senior notes prior to maturity and, as a result, interest rate risk and changes in fair value do not have an impact on our financial position, results of operations or cash flows. For variable rate debt such as our Revolving Credit Facility and Mortgage Repurchase Facility, changes in interest rates generally do not affect the fair value of the outstanding borrowing on the debt facilities, but do affect our earnings and cash flows. See “Forward-Looking Statements” above.

Item 4. Controls and Procedures

(a)Conclusion regarding the effectiveness of disclosure controls and procedures - An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed under the supervision, and with the participation, of our management, including the Chief Executive Officer (principal executive officer) and the Chief Financial Officer (principal financial officer). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)Changes in internal control over financial reporting - There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Sekisui House U.S., Inc.

FORM 10-Q

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Because of the nature of the homebuilding business, we and certain of our subsidiaries and affiliates have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of our homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. Risk Factors in the Company’s 2024 Annual Report on Form 10-K. There are no material changes from the risk factors included within the Company’s 2024 Annual Report on Form 10-K.

Item 5. Other Information

None.

Item 6. Exhibits


22			Subsidiary Guarantors (incorporated by reference to Exhibit 22 to the Company's Form 10-Q for the quarter ended June 30, 2021). *
31.1			Certification of principal executive officer required by 17 CFR 240.13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of principal financial officer required by 17 CFR 240.13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of principal executive officer required by 17 CFR 240.13a-14(b), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of principal financial officer required by 17 CFR 240.13a-14(b), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following financial statements, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (ii) Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2025 and 2024, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024, (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024; and (v) Notes to the Unaudited Consolidated Financial Statements, tagged as blocks of text.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

____________________

*Incorporated by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SEKISUI HOUSE U.S., INC. 10-Q