UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-K


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

For the fiscal year ended December 31, 2025


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

For the Transition period from _____ to _____

Commission file number 1-08951

__________________________________________

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	None	None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☒ No ☐

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 o No x

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 x No o

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 the definitions 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

☐

Emerging Growth Company

☐

Non-Accelerated Filer

☒

Smaller Reporting Company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 726(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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 June 30, 2025, none of the voting stock of the registrant was held by non-affiliates.

As of December 31, 2025, the number of shares outstanding of Registrant's common stock was 100.

DOCUMENTS INCORPORATED BY REFERENCE

None

EXPLANATORY NOTE

The Company is filing this Annual Report on Form 10-K 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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Sekisui House U.S., Inc.

FORM 10-K

For the Year Ended December 31, 2025

Table of Contents


		Page No.
PART I

ITEM 1.	Business	2
	(a) General Development of Business	2
	(c) Description of Business	2
	(e) Available Information	8
ITEM 1A.	Risk Factors	9

ITEM 1B.	Unresolved Staff Comments	15

ITEM 1C.	Cybersecurity	15

ITEM 2.	Properties	16

ITEM 3.	Legal Proceedings	16

ITEM 4.	Mine Safety Disclosures	16

PART II

ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17

ITEM 6.	[Reserved]	17

ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	35

ITEM 8.	Financial Statements and Supplementary Data	F - 1

ITEM 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	43

ITEM 9A.	Controls and Procedures	43

ITEM 9B.	Other Information	43

ITEM 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	88

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	89

ITEM 11.	Executive Compensation	93

ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	101

ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	101

ITEM 14.	Principal Accounting Fees and Services	102

PART IV

ITEM 15.	Exhibits and Financial Statement Schedules	104

ITEM 16.	Form 10-K Summary	107

SIGNATURES		107

(i)

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Sekisui House U.S., Inc.

FORM 10-K

PART I

Forward-Looking Statements

Certain statements in this Annual Report on Form 10-K, 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 operation, 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,” ”confident,” “could,” “intends,” “target,” “might,” “path,” “approximately,” “our planning assumptions,” “forecast,” “outlook” 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 are based largely on information currently available to our management and our management's current expectations and assumptions, and 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 Form 10-K, 10-Q and 8-K should be considered.

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Item 1. Business.

(a) General Development of Business

Sekisui House U.S., Inc. (formerly known as M.D.C. Holdings, Inc.) is a Delaware corporation. We refer to Sekisui House U.S., Inc. as the “Company,” “SHUS,” “we” or “our” in this Annual Report on Form 10-K, and these designations include our subsidiaries unless we state otherwise. We have two primary operations: homebuilding and financial services. Our homebuilding operations consist of wholly-owned subsidiary companies that generally purchase finished lots or develop lots to the extent necessary for the construction and sale primarily of single-family detached homes to all homebuyers, including entry level, move-up, family life and empty nester homebuyers. Our homebuilding operations are comprised of various homebuilding divisions that we consider to be our operating segments. For financial reporting purposes, our homebuilding operations are aggregated into reportable segments as follows: (1) West (includes operations in Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington); (2) Mountain (includes operations in Colorado, Idaho and Utah); and (3) East (includes operations in Florida, Maryland, Tennessee and Virginia).

Our financial services operations consist of (1) HomeAmerican Mortgage Corporation (“HomeAmerican”), which originates mortgage loans primarily for our homebuyers, (2) StarAmerican Insurance Ltd. ("StarAmerican"), which provides insurance coverage to the majority of our homebuilding subsidiaries, which includes certain assumed liabilities of subcontractors under the Company's owner-controlled insurance program ("wrap program'), (3) American Home Insurance Agency, Inc., which offers third-party insurance products to our homebuyers and (4) American Home Title and Escrow Company, which provides title agency services to our homebuilding subsidiaries and our customers in certain states. For financial reporting, we have aggregated our financial services operating segments into reportable segments as follows: (1) Mortgage Operations (represents HomeAmerican only) and (2) other (all remaining operating segments).

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” or "SHRH"), 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” of "SHL"), providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). As a result of the Merger, all of the Company’s equity securities are owned by Parent and the Company no longer has any of its securities listed and registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

On December 1, 2025, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiary Woodside Group, LLC (“Woodside”) (the "Woodside Merger"). Woodside is a homebuilding company with operations in Arizona, California, Idaho, Nevada, and Utah.

On January 1, 2026, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiaries Chesmar Homes, LLC (“Chesmar”) and Holt Group Holdings, LLC ("Holt"). Chesmar and Holt are homebuilding companies with operations in Texas, Oregon, and Washington. See Note 24, Subsequent Events, in the notes to the financial statements for further discussion.

Our business consists of two primary operations: homebuilding and financial services. Our homebuilding subsidiaries build and sell primarily single-family detached homes that are designed and built to meet local customer preferences. Certain homebuilding subsidiaries are the general contractor for its projects and retain subcontractors for land development and home construction. Our homebuilding subsidiaries build a variety of home styles in each of their markets for all homebuyers, including entry level, move up, family life and empty nester homebuyers.

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For 2025, the percentage of our home deliveries and home sale revenues by state were as follows:


	Percentage of Deliveries		Percentage of Home Sale Revenues
Arizona	17	%	15	%
California	20	%	23	%
Nevada	9	%	10	%
New Mexico	1	%	1	%
Oregon	1	%	1	%
Texas	2	%	1	%
Washington	3	%	4	%
West	53	%	55	%
Colorado	15	%	16	%
Idaho	9	%	8	%
Utah	8	%	9	%
Mountain	32	%	33	%

Maryland	1	%	1	%

Tennessee	2	%	2	%
Virginia	3	%	3	%
Florida	9	%	6	%
East	15	%	12	%
Total	100	%	100	%

Our financial services operations include subsidiaries that provide mortgage financing, place title insurance and homeowner insurance for our homebuyers, and provide general liability insurance for our subsidiaries and most of our subcontractors.

Homebuilding Operations

Operating Divisions. The primary functions of our homebuilding segments include land acquisition and development, home construction, sales and marketing, and customer service. Operating decisions are made by our local management teams under the oversight of our Chief Operating Decision Maker (“CODM”), or decision-making group, defined as one key executive - our Chief Executive Officer. Our organizational structure (i.e., the grouping and reporting of divisions) changes based upon the current needs of the Company. We had 21 active homebuilding operating divisions at December 31, 2025, 21 active homebuilding operating divisions at December 31, 2024, and 19 active homebuilding operating divisions at December 31, 2023.

Corporate Management. Our homebuilding business is managed primarily through members of senior management in our Corporate segment and our two Asset Management Committees (“AMCs”), one for reviewing real estate transactions and one for reviewing corporate transactions. The real estate AMC is comprised of the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, two representatives from Sekisui House, Ltd. and at least one of our other corporate officers, with the corporate AMC comprised of our Chief Executive Officer, Chief Financial Officer and Chief Legal Officer. All real estate acquisition transactions are reviewed to confirm that the transaction is projected to achieve the objectives established by our decision-making group and must be approved by the real estate AMC. Generally, the role of our senior management team and/or AMC includes:

•review and approval of division business plans and budgets;

•oversight of land and home inventory levels;

•review of major personnel decisions; and

•review of capital allocation decisions.

Additionally, our corporate executives and corporate departments generally are responsible for establishing and monitoring compliance with our policies and procedures. Among other things, the corporate office has primary responsibility for:

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•asset management and capital allocation;

•treasury;

•insurance and risk management;

•merchandising and marketing;

•national purchasing contracts;

•accounting, tax and internal audit functions;

•legal matters;

•human resources and payroll;

•information technology; and

•training and development.

Housing. Generally, our homebuilding subsidiaries build single-family detached homes in a number of standardized series, designed to provide variety in the size and style of homes for our potential homebuyers. In certain markets, our homebuilding subsidiaries build and sell duplexes and townhomes. Our homebuilding subsidiaries build several different floor plans offering standard and optional features (such as upgraded appliances, cabinetry, flooring, etc.). Differences in sales prices of similar models from market to market depend primarily upon homebuyer demand, home prices offered by other home sellers, market conditions (such as home inventory supply levels), location, cost of land, optional features and design specifications. The series of homes offered at a particular location is based on perceived customer preferences, lot size, area demographics and, in certain cases, the requirements of major land sellers and local municipalities. Our homebuilding subsidiaries have historically focused on selling “build-to-order,” also referred to as “dirt sales,” and have limited the number of homes started without a contract, also known as “spec homes.” However, with the increase in interest rates, we have seen an increased preference for spec homes in recent years that can be closed within 30 - 60 days. As a result, home construction starts have been more heavily focused on spec homes in recent years in response to this demand. We expect to see this mix shift back to more build-to-order sales as we prioritize personalization and homebuyer experience.

Land Acquisition and Development. Our homebuilding subsidiaries acquire lots with the intention of constructing and selling homes on the acquired land. In making land purchases, we consider a number of factors, including projected rates of return, estimated gross margins from home sales, sales prices of the homes to be built, mortgage loan limits within the respective county, population and employment growth patterns, proximity to developed areas, estimated cost and complexity of development including environmental and geological factors, quality of schools, estimated levels of competition and demographic trends.

Our homebuilding subsidiaries generally obtain the right to purchase lots in consideration for an option deposit in the form of cash or letters of credit through an option contract. In the event they elect not to purchase the lots within a specified period of time, they may be required to forfeit the option deposit. Our option contracts do not contain provisions requiring our specific performance.

Our homebuilding subsidiaries may own or have the right under option contracts to acquire undeveloped parcels of real estate that they intend to develop into finished lots. They generally develop land in phases in order to limit our risk in a particular subdivision and to efficiently employ available capital resources. Generally, building permits and utilities are available and zoning is suitable for the current intended use of substantially all of our undeveloped land. When developed, these lots generally will be used in our homebuilding activities. See “Forward-Looking Statements” above.

Labor and Raw Materials. Materials used in our homebuilding operations are mainly standard items carried by major suppliers. We generally contract for our materials and labor at a fixed price for the anticipated construction period of our homes. This allows us to mitigate the risks associated with increases in the cost of building materials and labor between the time construction begins on a home and the time it is closed. Increases in the cost of building materials and subcontracted labor may reduce gross margins from home sales to the extent that market conditions prevent the recovery of increased costs through higher home sales prices. From time to time and to varying degrees, we may experience shortages in the availability of building materials and/or labor in each of our markets. These shortages and delays may result in delays in the delivery of homes under construction, reduced gross margins from home sales, or both. See “Forward-Looking Statements” above. Discussion of shortages in the availability of building materials and labor are described in more detail in our description of Risk Factors under the heading "Supply shortages and other risks related to the demand for skilled labor and building materials could continue to increase costs and delay deliveries."

Warranty. Our homebuilding subsidiaries sell their homes with limited third-party warranties that generally provide for one year of coverage for workmanship and materials, two years of coverage for plumbing, electrical, heating, ventilation and air conditioning systems, and structural coverage for an amount of time depending on the jurisdiction in which the house was

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purchased. Under our agreement with the issuer of the third-party warranties, our homebuilding subsidiaries perform all of the work for the first two years of the warranty coverage and pay for certain work required to be performed subsequent to year two.

Seasonal Nature of Business. The homebuilding industry can experience noticeable seasonality and quarter-to-quarter variability in homebuilding activity levels. The seasonal nature of our business is described in more detail in our description of Risk Factors under the heading “Because of the seasonal nature of our business, our quarterly operating results can fluctuate.”

Backlog. At December 31, 2025 and 2024, homes under contract but not yet delivered (“backlog”) totaled 800 and 1,013, respectively, with an estimated sales value of $541.4 million and $656.4 million, respectively. The decrease in backlog year over year is due to a decrease in homes sales year-over-year. We anticipate that homes in backlog at December 31, 2025 generally will close during 2026 under their existing home order contracts or through the replacement of an existing contract with a new home order contract. The estimated backlog sales value at December 31, 2025 may be impacted by, among other things, subsequent home order cancellations, incentives provided, and/or options and upgrades selected. See “Forward-Looking Statements” above.

Customer Service and Quality Control. Our homebuilding divisions are responsible for pre-closing quality control inspections and responding to customers’ post-closing needs. We have a product service and quality control program, focused on improving and/or maintaining the quality of our customers’ complete home buying and homeownership experiences.

Sales and Marketing. Our sales and marketing programs are designed to attract homebuyers in a cost-effective manner. We have a centralized in-house advertising and marketing department, including digital marketing, that oversees our efforts to communicate the inherent value of our homes to our prospective homebuyers and distinguish our brands from our competitors and other home buying opportunities. The main objective of this team is to generate homebuyer leads, which are actively pursued by our HomeBuyer Resource Center (HBRC) and community sales consultants. Our HBRC team consists of new home specialists local to each market we build in, who are dedicated to supporting our digital and phone leads and set appointments for them to meet at one of our sales centers with a community sales consultants. Our centralized in-house merchandising team furnishes our model homes and sales centers.

Competition. The homebuilding industry is fragmented and highly competitive. The competitive nature of our business is described in more detail in our description of Risk Factors.

Regulation. Our homebuilding operations are subject to compliance with applicable laws and regulations, which are described in more detail in our description of Risk Factors.

Financial Services Operations

Mortgage Lending Operations

General. HomeAmerican is a full-service mortgage lender and the principal originator of mortgage loans for our homebuyers. HomeAmerican has a centralized loan processing center where it originates mortgage loans, primarily for our homebuyers.

HomeAmerican is authorized to originate Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) (together “the government-sponsored enterprises”), Federal Housing Administration-insured (“FHA”), and Department of Veterans Affairs-guaranteed (“VA”) mortgages and is an authorized issuer of Government National Mortgage Association (“Ginnie Mae”) mortgage-backed securities. Furthermore, HomeAmerican also is an authorized loan servicer for Fannie Mae, Freddie Mac and Ginnie Mae and, as such, is subject to the rules and regulations of these entities.

HomeAmerican uses mortgage repurchase facilities, internally generated funds, and temporary financing provided by its parent to finance the origination of mortgage loans until they are sold. HomeAmerican sells originated mortgage loans to third-party purchasers on either a bulk or flow basis. Mortgage loans sold on a bulk basis include the sale of a package of substantially similar originated mortgage loans, while sales of mortgage loans on a flow basis are completed as HomeAmerican originates each loan. Mortgage loans sold to third-party purchasers include HomeAmerican’s representations and warranties with respect to certain borrower payment defaults, credit quality issues and/or misstatements made by HomeAmerican or misrepresentations by our homebuyers. Substantially all of the mortgage loans originated by HomeAmerican are sold to third-party purchasers, generally between 5 to 35 days of origination.

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Pipeline. HomeAmerican’s mortgage loans in process for which a rate and price commitment had been made to a borrower that had not closed (the “locked pipeline”) at December 31, 2025 and 2024 had an aggregate principal balance of approximately $75.8 million and $57.8 million, respectively, and were under interest rate lock commitments at an average interest rate of 4.57% and 5.62%, respectively.

Forward Sales Commitments. HomeAmerican is exposed to market risks related to fluctuations in interest rates. We mitigate our exposure to interest rate market risk relating to mortgage loans held-for-sale and interest rate lock commitments 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 market related risks in our business are described in more detail in our description of Risk Factors.

Competition. HomeAmerican has significant competition with other mortgage bankers to arrange financing for our homebuyers. The competitive nature of our mortgage business is described in more detail in our description of Risk Factors.

Regulation. Our mortgage lending operations are subject to compliance with applicable laws and regulations, which are described in more detail in our description of Risk Factors.

Insurance Operations

General. Allegiant and StarAmerican were formed to provide insurance coverage of homebuilding risks for our homebuilding subsidiaries and most of our homebuilding subcontractors. Prior to its dissolution on December 19, 2025, Allegiant was organized as a risk retention group under the Federal Liability Risk Retention Act of 1981. Allegiant, which began operations in June of 2004, was licensed as a Class 3 Stock Insurance Company by the Division of Insurance of the State of Hawaii and was subject primarily to the regulations of its state of incorporation. StarAmerican is a single parent captive insurance company licensed by the Division of Insurance of the State of Hawaii. Prior to Allegiant's dissolution, StarAmerican had re-insured Allegiant for all claims in excess of $50,000 per occurrence up to $3.0 million per occurrence prior to July 1, 2022, and up to $5.0 million per occurrence subsequent to July 1, 2022, subject to various aggregate limits.

Prior to novating, assigning and transferring to StarAmerican all of its rights, title, interest and obligations regarding insurance policies on September 30, 2025, Allegiant generated premium revenue generally by providing to its customers, comprised of the majority of the Company’s homebuilding subsidiaries and most subcontractors of the Company’s homebuilding subsidiaries, general liability insurance on homes sold by our homebuilding subsidiaries and for work performed in completed subdivisions. Allegiant sought to provide to its customers coverage and insurance rates that were competitive with other insurers. StarAmerican generated premium revenue by providing re-insurance coverage to Allegiant. Subsequent to September 30, 2025, Star American generated premium revenue by providing insurance coverage to the majority of our homebuilding subsidiaries, which includes certain assumed liabilities of subcontractors under the Company's wrap programs. Prior to September 30, 2025, Allegiant and StarAmerican incurred expenses for actual losses and loss adjustment expenses and for reserves established based on actuarial studies including known facts, such as our experience with similar insurance cases and historical trends involving insurance claim payment patterns, pending levels of unpaid insurance claims, claim severity, claim frequency patterns and interpretations of circumstances including changing regulatory and legal environments. Subsequent to September 30, 2025, all such expenses were incurred by StarAmerican.

Regulation. Allegiant was and StarAmerican is licensed in the State of Hawaii and, therefore, were and are subject to regulation by the Hawaii Insurance Division. This regulation includes restrictions and oversight regarding: types of insurance provided; investment options; required capital and surplus; financial and information reporting; use of auditors, actuaries and other service providers; periodic examinations; and other operational items. Additionally, as a risk retention group, Allegiant was also registered in other states where certain SHUS homebuilding subsidiaries did business.

Effective September 30, 2025, Allegiant novated, assigned and transferred to StarAmerican all of its rights, title, interest and obligations regarding insurance policies, including insurance reserves, claims, benefits, premiums, and other amounts payable or receivable. Effective December 19, 2025, Allegiant was dissolved.

Insurance Agency Operations

American Home Insurance is an insurance agency that sells primarily homeowners, personal property and casualty insurance products in the same markets where our homebuilding subsidiaries operate and primarily to our homebuyers.

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Title Operations

American Home Title provides title agency services to the Company and its homebuyers in Colorado, Florida, Maryland, Nevada and Virginia.

Human Capital Resources

The table below summarizes the approximate number of employees for our combined Homebuilding, combined Financial Services and Corporate segments at December 31, 2025 and 2024.


	December 31,
	2025	2024
Homebuilding	1,600	1,808
Financial Services	209	246
Corporate	360	318
Total	2,169	2,372

We believe our employees are one of our greatest assets and our Company is made up of diverse, talented and dedicated employees working together to achieve common and rewarding goals. We value integrity, hard work, dedication, energy and teamwork. Our goal is to promote an environment where employees are encouraged to do their best work with high professional standards, team collaboration and customer excellence.

At SHUS we are committed to fostering a diverse and inclusive workplace. Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. We have implemented and maintained a corporate code of conduct to provide guidance for everyone associated with the Company, including its employees, officers and directors (the "Code"). Annual review of the Code is required and it, in summary, prohibits unlawful or unethical activity, including discrimination, and directs our employees, officers, and directors to avoid actions that, even if not unlawful or unethical, might create an appearance of illegality or impropriety. In addition, the Code includes required annual training on preventing, identifying, reporting and stopping any type of unlawful discrimination.

We recognize that we are in a competitive marketplace when it comes to finding top talent. Our leaders across all levels of the organization consistently review their business metrics to determine appropriate workforce planning goals. We offer a variety of career paths for our employees; which includes consistent training and development through online resources, job shadowing, mentoring, etc. Our employees may participate in a robust benefits program, which includes a focus on health and wellness, and we offer a variety of other employee perks. We believe our compensation packages and benefits are competitive with others in our industry and in the markets where we operate. We are committed to consistently evaluating total compensation across all positions within the Company.

As we look to the future, we will continue to leverage the core principles and practices that contributed to our past achievements, while welcoming new perspectives that allow our organization to evolve with the changing economic landscape. We will maintain our commitment to quality craftsmanship, providing excellent customer service, hiring from within when practicable and fostering an internal culture that supports collaboration and teamwork as well as work-life balance.

(e) Available Information

The Company has ceased to be subject to the reporting requirements of the Exchange Act but continues to voluntarily file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports that are filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 with the Securities and Exchange Commission (“SEC”). 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. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is at http://www.sec.gov. Further, the Company maintains a website at ir.richmondamerican.com.

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Item 1A. Risk Factors.

Changes in general economic, real estate and other business conditions may have an adverse effect on the homebuilding and mortgage industries, which could have a negative impact on our business.

The homebuilding industry is cyclical and is significantly affected by changes in industry conditions, the national political environment and general economic conditions such as:

•employment levels;

•availability of financing for homebuyers;

•interest rates;

•consumer confidence and spending;

•wage growth;

•inflation;

•household formations;

•levels of new and existing homes for sale;

•cost of land, labor and construction materials;

•demographic trends; and

•housing demand.

These conditions may exist on a national level or may affect some of the regions or markets in which we operate more than others. When adverse conditions affect any of our larger markets, they could have a proportionately greater impact on us than on some other homebuilding companies.

Changes to monetary policy or other actions by the Federal Reserve or governmental agencies could have and have had an adverse effect on interest rates (including mortgage interest rates), equity markets and consumer confidence. Adverse effects could cause and have caused us to experience declines in the market value of our inventory and the demand for our homes, resulting in a negative impact to our financial position, results of operations and cash flows.

An oversupply of alternatives to new homes, including foreclosed homes, homes held for sale or rent by investors and speculators, other existing homes, and rental properties, can also reduce our ability to sell new homes, depress new home prices and reduce our margins on the sale of new homes. High levels of foreclosures and short-sales not only contribute to additional inventory available for sale, but also can reduce appraisal valuations for new homes, potentially resulting in lower sales prices.

Terrorist attacks, acts of war, other acts of violence or threats to national security, and any corresponding response by the United States or others, or related domestic or international instability, may adversely affect general economic conditions or cause a slowdown of the economy.

As a result of the foregoing matters, potential customers may be less willing or able to buy our homes. In the future, our pricing strategies may be limited by market conditions. We may be unable to change the mix of our home offerings, reduce the costs of the homes we build or offer more affordable homes to maintain our gross margins or satisfactorily address changing market conditions in other ways. In addition, cancellations of home sales contracts in backlog may increase as homebuyers choose to not honor their contracts.

Additionally, the factors discussed above may increase our counterparty risk, which may include, among others, banks under our credit facilities and mortgage purchasers who may not be willing or able to perform on obligations to us. To the extent a third-party is unable or unwilling to meet its obligations, our financial position, results of operations and cash flows could be negatively impacted.

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Our mortgage operations are closely related to our homebuilding business, as HomeAmerican originates mortgage loans principally to purchasers of the homes we build. Therefore, a decrease in the demand for our homes because of the preceding matters may also adversely affect the financial results of this segment of our business. Furthermore, any adverse changes in the economic conditions discussed previously could increase the default rate on the mortgages we originate, which may adversely affect our ability to sell the mortgages, the pricing we receive upon the sale of mortgages, or our potential exposure to recourse regarding mortgage loan sales.

These challenging conditions are complex and interrelated. We cannot predict their occurrence or severity, nor can we provide assurance that our responses would be successful.

Increased competition levels in the homebuilding and mortgage lending industries could have a negative impact on our homebuilding and mortgage operations.

The homebuilding industry is fragmented and highly competitive. Our homebuilding subsidiaries compete with numerous public and private homebuilders, including a number that are substantially larger than us and may have greater financial resources than we do. Our homebuilding subsidiaries also compete with subdivision developers and land development companies, some of which are themselves homebuilders or affiliates of homebuilders. Homebuilders compete for customers, land, building materials, subcontractor labor and desirable financing. Competition for home orders is based primarily on home sales price, location of property, home style, financing available to prospective homebuyers, quality of homes built, customer service and general reputation in the community, and may vary market-by-market and/or submarket-by-submarket. Additionally, competition within the homebuilding industry can be impacted by an excess supply of new and existing homes available for sale resulting from a number of factors, including, among other things, increases in the number of new home communities, increases in speculative homes available for sale and increases in home foreclosures. Increased competition can result in a decrease in our net new home orders, a decrease in our home sales prices and/or an increase in our home sales incentives in an effort to generate new home sales and maintain homes in backlog until they close. These competitive pressures may negatively impact our financial position, results of operations and cash flows.

Our mortgage lending subsidiary, HomeAmerican, experiences competition from numerous banks and other mortgage bankers and brokers, many of which are larger and may have greater financial resources. As a result, these competitors may be able to offer better pricing and/or mortgage loan terms, more relaxed underwriting criteria and a greater range of products, which could negatively impact the financial position, results of operations and cash flows of our mortgage operations.

If land is not available at reasonable prices or terms, we could be required to scale back our operations in a given market and/or we may operate at lower levels of profitability.

Our operations depend on our homebuilding subsidiaries’ ability to obtain land for the development of our residential communities at reasonable prices and with terms that meet our underwriting criteria. Our ability to obtain land for new residential communities may be adversely affected by changes in the general availability of land, the willingness of land sellers to sell land at reasonable prices, competition for available land, availability of financing to acquire land, zoning, regulations that limit housing density, and other market conditions. If the supply of land appropriate for development of residential communities is limited because of these factors, or for any other reason, the number of homes that our homebuilding subsidiaries build and sell may decline. To the extent that we are unable to purchase land timely or enter into new contracts for the purchase of land at reasonable prices, due to the lag time between the time we acquire land and the time we begin selling homes, we may be required to scale back our operations in a given market and/or we may operate at lower levels of profitability. As a result, our financial position, results of operations and cash flows could be negatively impacted.

Supply shortages and other risks related to the demand for skilled labor and building materials could continue to increase costs and delay deliveries.

The residential construction industry experiences price fluctuations and shortages in labor and materials from time to time. Shortages in labor can be due to: competition for labor, work stoppages, labor disputes, shortages in qualified trades people, lack of availability of adequate utility infrastructure and services, or our need to rely on local subcontractors who may not be adequately capitalized or insured. Labor and material shortages can be more severe during periods of strong demand for housing or during periods in which the markets where we operate experience natural disasters that have a significant impact on existing residential and commercial structures. Additionally, we could experience labor shortages as a result of subcontractors going out of business or leaving the residential construction market due to low levels of housing production and volumes. Pricing for labor and materials can be affected by the factors discussed above, changes in energy prices, and various other national, regional and local economic factors. In addition, environmental and other regulations and import tariffs and trade restrictions have had, and in the future could continue to have, an adverse impact on the cost of certain raw materials such as

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lumber. Recalls of materials driven by manufacturing defects can drive shortages in materials and delay the delivery of homes. Any of these circumstances could give rise to delays in the start or completion of our residential communities, increase the cost of developing one or more of our residential communities and/or increase the construction cost of our homes.

We generally are unable to pass on increases in construction costs on build-to-order homes to customers who have already entered into sales contracts, as those sales contracts fix the price of the homes at the time the contracts are signed, which generally is in advance of the construction of the home. With our increase in the number of spec homes due to spec construction starts, we may see an increase in our ability to pass on increases in construction costs to customers should market conditions permit. To the extent that market conditions prevent the recovery of increased costs, including, among other things, subcontracted labor, finished lots, building materials, and other resources, through higher selling prices, our financial position, cash flows and operating results, including our gross margin from home sales, could be negatively impacted.

If mortgage interest rates rise, if down payment requirements are increased, if loan limits are decreased, or if mortgage financing otherwise becomes less available, it could adversely affect our business.

Mortgage liquidity influenced by governmental entities like the FHA, VA, USDA and Ginnie Mae or government-sponsored enterprises (“GSEs”) like Fannie Mae and Freddie Mac continue to be an important factor in marketing our homes. Financial losses or other factors may limit, restrict or otherwise curtail their ability or willingness to insure mortgage loans, offer insurance at rates and on terms that are not prohibitive, or purchase mortgage loans. Should this occur, it may negatively impact the availability of mortgage financing and our sales of new homes.

We believe that the liquidity provided by Fannie Mae, Freddie Mac and Ginnie Mae to the mortgage industry has been very important to the housing market. Any reduction in the availability of the liquidity provided by these institutions could adversely affect interest rates, mortgage availability and our sales of new homes and mortgage loans.

Loans sold to or insured by the GSEs are subject to various loan limits. Decreases in these loan limits may require homebuyers to make larger down payments or obtain more restrictive non-conforming or “jumbo” mortgages, which could adversely impact on our financial position, results of operations and cash flows.

Even if potential customers do not need financing, changes in the availability of mortgage products may make it harder for them to sell their current homes to potential buyers who need financing.

If interest rates increase, the costs of owning a home may be affected and could result in further reductions in the demand for our homes. During fiscal 2022 and into 2023, the increase in mortgage interest rates had a significant impact on the demand for our homes.

Public health issues such as a pandemic or epidemic could harm business and results of operations of the Company.

Demand for our homes is dependent on a variety of macroeconomic factors, such as employment levels, availability of financing for homebuyers, interest rates, consumer confidence and spending, wage growth and inflation, household formations, levels of new and existing homes for sale, cost of land, labor and construction materials, demographic trends and housing demand. These factors, in particular consumer confidence, can be significantly and adversely affected by a variety of factors beyond our control. Specifically, an epidemic, pandemic, or similar public health issue could significantly disrupt us from operating our business in the ordinary course for an extended period, and thereby, along with associated economic and/or consumer confidence instability, have a material adverse impact on our financial position, results of operations and cash flows.

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Changes to tax laws, incentives or credits currently available to our customers may negatively impact our business.

Many homeowners receive substantial tax benefits in the form of tax deductions against their personal taxable income for mortgage interest and property tax payments and the loss or reduction of these deductions could affect homeowners’ net cost of owning a home. Significant changes to existing tax laws, such as the ability to deduct mortgage interest and real property taxes, may result in an increase in the total cost of home ownership and may make the purchase of a home less attractive to buyers. This could adversely impact demand for and/or sales prices of new homes, which would have a negative impact on our business.

A decline in the market value of our homes or carrying value of our land could continue to have a negative impact on our business.

Our homebuilding subsidiaries acquire land for the replacement of land inventory and/or expansion within our current markets and may, from time to time, purchase land for expansion into new markets. The fair value of our land and land under development inventory and housing completed or under construction inventory depends on market conditions. Factors that can impact our determination of the fair value of our inventory primarily include home sale prices, levels of home sale incentives and home construction and land costs. Our home sale prices and/or levels of home sale incentives can be impacted by, among other things, uncertainty in the homebuilding and mortgage industries or the United States/global economy overall, decreased demand for new homes, decreased home prices offered by our competitors, increased levels of new or existing home inventory, home foreclosure and short-sale levels, decreased ability of our homebuyers to obtain suitable mortgage loan financing and high levels of home order cancellations. Under such circumstances, we may be required to record impairments of our inventory. Any such inventory impairments would have a negative impact on our financial position and results of operations. During fiscal 2025, increased levels of new and existing home inventory in certain markets and mortgage interest rates that have remained elevated in comparison to recent history had a significant impact on the homebuilding industry causing home sale prices to decrease and home sale incentives to increase across the industry. This has resulted in inventory impairments in certain of our communities due to the decline in the market value of our housing completed or under construction and land and land under development inventory.

Natural disasters could cause an increase in home construction costs, as well as delays, and could negatively impact our business.

The climates and geology of many of the markets in which we operate present increased risks of natural disasters. To the extent that hurricanes, severe storms, earthquakes, droughts, floods, heavy or prolonged precipitation, wildfires or other natural disasters or similar events occur, the financial position, results of operations and cash flows of our business may be negatively impacted.

Changes in energy prices or regulations may have an adverse effect on our cost of building homes.

Some of the markets in which we operate are impacted by regulations related to energy, such as setbacks required from oil / gas drilling operations or restrictions on the use of land. To the extent that these regulations are modified, the value of land we already own or the availability of land we are looking to purchase may decline, which may adversely impact the financial position, results of operations and cash flows of our business. Furthermore, pricing offered by our suppliers and subcontractors can be adversely affected by increases in various energy costs resulting in a negative impact to our financial position, results of operations and cash flows of our business.

We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets, and disruptions in these markets could have an adverse impact on the results of our business.

We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets. Our requirements for additional capital, whether to finance operations or to service or refinance our existing indebtedness, fluctuate as market conditions and our financial performance and operations change. We cannot provide assurance that we will maintain cash reserves and generate sufficient cash flow from operations in an amount to enable us to service our debt or to fund other liquidity needs.

The availability of additional capital, whether from private capital sources or the public capital markets, fluctuates as our financial condition and market conditions in general change. There may be times when the private capital markets and the public debt markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, in which case we would not be able to access capital from these sources. Additionally, any reduction in our credit ratings and/or a weakening of our

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financial condition, could adversely affect our ability to obtain necessary funds. Even if financing is available, it could be costly or have other adverse consequences.

In addition, the sources and terms and conditions of our mortgage repurchase facilities are subject to change. These changes may impact, among other things, availability of capital, cost of borrowings, collateral requirements and collateral advance rates.

Our business is subject to numerous federal, state and local laws and regulations concerning land development, construction of homes, sales, mortgage lending, environmental and other aspects of our business. These laws and regulations could give rise to additional liabilities or expenditures, or restrictions on our business.

Our operations are subject to continuing compliance requirements mandated by applicable federal, state and local statutes, ordinances, rules and regulations, including zoning and land use ordinances, building, plumbing and electrical codes, contractors’ licensing laws, state insurance laws, federal and state human resources laws and regulations, and health and safety laws and regulations. Various localities in which we operate have imposed (or may impose in the future) fees on developers to fund schools, road improvements and low and moderate-income housing.

Availability of and costs related to permit, water/sewer tap, and impact fees can impact our homebuilding operations. From time to time, various municipalities in which our homebuilding subsidiaries operate restrict or place moratoria on the availability of utilities, including water and sewer taps. Additionally, certain jurisdictions in which our homebuilding subsidiaries operate have proposed or enacted “slow growth” or “no growth” initiatives and other measures that may restrict the number of building permits available in any given year. These initiatives or other similar measures could reduce our ability to open new subdivisions and build and sell homes in the affected markets. The availability issues previously discussed and any increases in costs of these fees may negatively impact our financial position, results of operations and cash flows.

Our homebuilding operations also are affected by regulations pertaining to availability of water, municipal sewage treatment capacity, land use, dust controls, oil and gas operations, building materials, population density and preservation of endangered species, natural terrain and vegetation.

We are subject to local, state and federal statutes, ordinances, rules and regulations concerning the protection of public health and the environment. These include regulating the emission or discharge of materials into the environment such as greenhouse gas emissions, storm water runoff, the handling, use, storage and disposal of hazardous substances, and impacts to wetlands and other sensitive environments. These restrictions and requirements could increase our operating costs and require additional capital investment, which could negatively impact our financial position, results of operations and cash flows. Further, we have extensive operations in the western United States, where some of the most extensive environmental laws and building construction standards in the country have been enacted. We believe we are in compliance in all material respects with existing governmental environment restrictions, standards and regulations applicable to our business, and such compliance has not had a material impact on our business. Given the rapid changes to environmental laws and other matters that may arise that are not currently known, we cannot predict our future exposure, and our future costs to achieve compliance or remedy potential violations could be significant.

The particular environmental laws and regulations that apply to any given homebuilding project vary greatly according to a particular site’s location, the site’s environmental conditions and the present and former uses. These environmental laws may result in project delays, cause us to incur substantial compliance and other costs and/or prohibit or severely restrict homebuilding activity in certain environmentally sensitive locations. Environmental laws and regulations may also have a negative impact on the availability and price of certain raw materials, such as lumber.

Our revolving credit facility contains representations regarding anti-corruption and sanctions laws, a violation of which could result in an event of default.

We also are subject to rules and regulations with respect to originating, processing, selling and servicing mortgage loans, which, among other things: prohibit discrimination and establish underwriting guidelines; provide for audits and inspections; require appraisals and/or credit reports on prospective borrowers and disclosure of certain information concerning credit and settlement costs; establish maximum loan amounts; prohibit predatory lending practices; and regulate the referral of business to affiliated entities.

The regulatory environment for mortgage lending is complex and ever changing and has led to an increase in the number of audits and examinations in the industry. These examinations can include consumer lending practices, sales of mortgages to financial institutions and other investors and the practices in the financial services segments of homebuilding

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companies. New rules and regulations or revised interpretations of existing rules and regulations applicable to our mortgage lending operations could result in more stringent compliance standards, which may substantially increase costs of compliance.

In the ordinary course of business, we are required to obtain surety bonds, the unavailability of which could adversely affect our business.

As is customary in the homebuilding industry, we often are required to provide surety bonds to secure our performance under construction contracts, development agreements and other arrangements. Our ability to obtain surety bonds primarily depends upon our credit rating, capitalization, working capital, past performance, management expertise and certain external factors, including the overall capacity of the surety market and the underwriting practices of surety bond issuers. The ability to obtain surety bonds also can be impacted by the willingness of insurance companies to issue surety bonds. If we are unable to obtain surety bonds when required, our financial position, results of operations and cash flows could be adversely impacted.

Product liability litigation and warranty claims that arise in the ordinary course of business may be costly.

As a homebuilder, we are subject to construction defect and home warranty claims, as well as claims associated with the sale and financing of our homes arising in the ordinary course of business. These types of claims can be costly. The costs of insuring against or directly paying for construction defect and product liability claims can be high and the amount of coverage offered by insurance companies may be limited. If we are not able to obtain adequate insurance against these claims, we may incur additional expenses that would have a negative impact on our results of operations in future reporting periods. Additionally, changes in the facts and circumstances of our pending litigation matters could have a material impact on our financial position, results of operations and cash flows.

Repurchase requirements associated with HomeAmerican’s sale of mortgage loans, could negatively impact our business.

We are subject to risks associated with mortgage loans, including conventional mortgage loans, FHA and VA mortgage loans, second mortgage loans, high loan-to-value mortgage loans and jumbo mortgage loans (mortgage loans with principal balances that exceed various thresholds in our markets). These risks may include, among other things, compliance with mortgage loan underwriting criteria and the associated homebuyers’ performance, which could require HomeAmerican to repurchase certain of those mortgage loans or provide indemnification. Repurchased mortgage loans and/or the settlement of claims associated with such loans could have a negative impact on HomeAmerican’s financial position, results of operations and cash flows.

Because of the seasonal nature of our business, our quarterly operating results can fluctuate.

We may experience noticeable seasonality and quarter-to-quarter variability in homebuilding activity levels. In general, the number of homes delivered and the associated home sale revenues increase during the third and fourth quarters compared with the first and second quarters. We believe that this type of seasonality reflects the historical tendency of homebuyers to purchase new homes in the spring and summer with deliveries scheduled in the fall or winter, as well as the scheduling of construction to accommodate the seasonal weather conditions in certain markets.

We are dependent on the services of key employees, and the loss of their services could hurt our business.

Although we believe that we have made provision for adequately staffing current operations, because of competition for experienced homebuilding industry personnel, retaining our skilled people is an important area of focus. Our future success depends, in part, on our ability to attract, train and retain skilled personnel. If we are unable to retain our key employees or attract, train and retain other skilled personnel in the future, it could have an adverse impact on our financial position, results of operations and cash flows.

Information technology failures and cybersecurity breaches could harm our business.

We use information technology and other computer resources to carry out important operational activities and to maintain our business records. These information technology systems are dependent upon electronic systems and other aspects of the internet infrastructure. A material breach in the security of our information technology systems or other data security controls could result in third parties obtaining or corrupting customer, employee or company data. To date, we have not had a material breach of data security, however such occurrences could have a material and adverse effect on our financial position, results of operations and cash flows.

Financial industry turmoil could materially and adversely affect our liquidity and consolidated financial statements.

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The banking industry experienced certain bank failures and other turmoil in 2023. The failure of other banks or financial institutions, if it occurs, could have a material adverse effect on our liquidity or consolidated financial statements if we have placed cash or other deposits at such banks or financial institutions, or if such banks or financial institutions, or any substitute or additional banks or financial institutions, participate in our Revolving Credit Facility. Under our Revolving Credit Facility, non-defaulting lenders are not obligated to cover or acquire a defaulting lender’s respective commitment to fund loans or to issue letters of credit and may be unwilling to issue additional letters of credit if we do not enter into arrangements to address the risk with respect to the defaulting lender (which may include cash collateral). If the non-defaulting lenders are unable or unwilling to cover or acquire a defaulting lender’s respective commitment, we may not be able to access the Revolving Credit Facility’s full borrowing or letter of credit capacity to support our business needs. In addition, if a buyer under our Mortgage Repurchase Facilities, which are used to fund mortgage originations, fails or is unable or unwilling to fulfill its obligations, HomeAmerican may be limited in its ability to provide mortgage loans to our homebuyers, which may prevent them from closing on their homes at the time expected or at all.

Litigation challenging the completion of the Merger Agreement may be costly.

Lawsuits have and may continue to be filed against us, our Board of Directors or other parties to the Merger Agreement, challenging our acquisition by Parent or making other claims in connection therewith. These types of litigation can be costly. Additionally, changes in the facts and circumstances of our pending or future litigation matters or potential instigation of enforcement or other actions could have a material impact on our financial position, results of operations and cash flows.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

The Company understands the importance of preventing, assessing, identifying, and managing material risks associated with cybersecurity threats. Cybersecurity processes to assess, identify and manage risks from cybersecurity threats have been incorporated as a part of the Company’s overall risk assessment process. On a regular basis we implement into our operations these cybersecurity processes, technologies, and controls to assess, identify, and manage material risks. Specifically, we engage a third-party cybersecurity firm to assist with network and endpoint monitoring, cloud system monitoring and assessment of our incident response procedures. Further, we employ periodic penetration testing and tabletop exercises to inform our risk identification and assessment of material cybersecurity threats.

To manage our material risks from cybersecurity threats and to protect against, detect, and prepare to respond to cybersecurity incidents, we undertake the below listed activities:

a.Monitor emerging data protection laws and implement changes to our processes to comply;

b.Conduct periodic customer data handling and use requirement training for our employees;

c.Conduct annual cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data;

d.Conduct regular phishing email simulations for all employees; and

e.Carry cybersecurity risk insurance that provides protection against the potential losses arising from a cybersecurity incident

Our incident response plan coordinates the activities that we and our third-party cybersecurity provider take to prepare to respond and recover from cybersecurity incidents, which include processes to triage, assess severity, investigate, escalate, contain, and remediate an incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

As part of the above processes, we engage with consultants to review our cybersecurity program to help identify areas for continued focus, improvement, and compliance.

Our processes also include assessing cybersecurity threat risks associated with our use of third-party services providers in normal course of business use, including those in our supply chain or who have access to our customer and employee data or our systems. Third-party risks are included within our risk management process discussed above. In addition, we assess cybersecurity considerations in the selection and oversight of our third-party services providers, including due diligence on the third parties that have access to our systems and facilities that house systems and data.

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We describe whether and how risks from identified cybersecurity threats have or that are reasonably likely to affect our financial position, results of operations and cash flows, under the heading “Information technology failures and cybersecurity breaches could harm our business” included as part of our Item 1A. Risk Factors of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.

Our Audit Committee of the Board of Directors is responsible for oversight of our risk assessment, risk management, disaster recovery procedures and cybersecurity risks. Periodically during each year, the Audit Committee receives an overview from our Senior Vice President of IT of our cybersecurity threat risk management and strategy processes, including potential impact on the Company, the efforts of management to manage the risks that are identified and our disaster recovery preparations. Members of the Board of Directors regularly engage in discussions with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.

Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Senior Vice President of IT. Our Senior Vice President of IT has over 20 years of experience in various roles involving managing information security, developing cybersecurity strategy, and implementing cybersecurity programs. The Senior Vice President of IT is informed about and monitors the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of the cybersecurity risk management and strategy processes described above, including our incident response plan.

Item 2. Properties.

Our corporate office is located at 4350 South Monaco Street, Denver, Colorado 80237, where we lease all 144,000 square feet of office space in the building. In many of our markets, our homebuilding divisions and other SHUS subsidiaries lease additional office space. While we are currently satisfied with the suitability and capacity of our office locations to meet our current business needs, we continue to evaluate them in view of market conditions and the size of our operations.

Item 3. Legal Proceedings.

This information required with respect to this item can be found in Part II, Item 8, Notes to Consolidated Financial Statements, "Note 16. Commitments and Contingencies" in this annual report and is incorporated by reference into this Item 3.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Prior to the Merger, shares of our common stock were registered pursuant to Section 12(b) of the Exchange Act and listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol MDC. As a result of the Merger, effective on April 19, 2024, the Company 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 Exchange Act. As a result, the Company’s common stock was no longer listed on the NYSE. The Parent is the sole record holder of the Company's common stock. No other shares remain issued and outstanding as of December 31, 2025 and 2024.

The table below sets forth the cash dividends declared and paid in 2025, 2024 and 2023:


	Date of Declaration	Date of Payment	Dividend per Share		Total Dividends Paid
	(In thousands)
2025
Second Quarter	N/A	06/27/25	N/A		$	86,375
Second Quarter	N/A	06/30/25	N/A		$	22,190
Fourth Quarter	N/A	11/30/25	N/A		$	86,642
			N/A		$	195,207
2024
First Quarter	01/17/24	02/21/24	$	0.55	$	41,276
Second Quarter	N/A	06/27/24	N/A		$	15,813
Third Quarter	N/A	08/27/24	N/A		$	41,300
Fourth Quarter	N/A	12/17/24	N/A		$	41,300
Fourth Quarter	N/A	12/27/24	N/A		$	15,814
			N/A		$	155,503
2023
First Quarter	01/23/23	02/22/23	$	0.50	$	36,543
Second Quarter	04/17/23	05/24/23	0.50		36,565
Third Quarter	07/24/23	08/23/23	0.55		41,064
Fourth Quarter	10/23/23	11/22/23	0.55		41,065
			$	2.10	$	155,237

Item 6. [Reserved]

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Item 7. 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 Consolidated Financial Statements and Notes thereto included elsewhere in this Annual Report on Form 10-K. This item contains forward-looking statements that involve risks and uncertainties. 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.” This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.


	2025			2024			2023
	(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	4,918,354		$	6,279,861		$	4,520,296
Land sale revenues	70,447			50,089			—
Other revenues	110			6,225			—
Total revenues	4,988,911			6,336,175			4,520,296
Home cost of sales	(4,127,156)			(5,138,993)			(3,684,487)
Inventory impairments	(77,653)			(18,250)			(29,700)
Total home cost of sales	(4,204,809)			(5,157,243)			(3,714,187)
Land cost of sales	(48,959)			(35,691)			—
Other cost of sales	(21)			(5,821)			—
Total cost of sales	(4,253,789)			(5,198,755)			(3,714,187)
Gross margin	735,122			1,137,420			806,109
Gross margin %	14.7		%	18.0		%	17.8		%
Selling, general and administrative expenses	(602,303)			(743,639)			(429,894)
Interest and other income	17,017			55,532			73,567
Transaction costs	4,827			(39,361)			—
Other income (expense), net	(18,753)			(7,386)			350
Homebuilding pretax income	135,910			402,566			450,132

Financial Services:
Revenues	109,462			148,686			122,570
Expenses	(69,350)			(74,767)			(62,942)
Other income (expense), net	13,499			19,957			16,345
Financial services pretax income	53,611			93,876			75,973

Income before income taxes	189,521			496,442			526,105
Provision for income taxes	(37,649)			(101,911)			(125,100)
Net income	$	151,872		$	394,531		$	401,005

Cash provided by (used in):
Operating Activities	$	(368,845)		$	183,009		$	561,630
Investing Activities	$	150,217		$	(150,901)		$	469,443
Financing Activities	$	(301,824)		$	(844,909)		$	(105,271)

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EXECUTIVE SUMMARY

Overview

Industry Conditions and Outlook for SHUS*

The homebuilding industry saw softened market conditions and affordability challenges during 2025. The macroeconomic backdrop remains challenging given consumers affordability concerns, continuing uncertainty related to geopolitical issues and mortgage interest rates that have remained elevated in comparison to recent history. As a result, we experienced a decrease in our sales absorption rate and our gross margin from home sales during the year ended December 31, 2025 compared to the same period in the prior year.

As part of the planned reorganization of the Sekisui House, Ltd. U.S. homebuilder business, SHUS completed the acquisition of Woodside on December 1, 2025. This acquisition increased the scale of SHUS homebuilding operations in Arizona, California, Idaho, Nevada and Utah by adding nearly $1.0 billion of homebuilding net assets. In connection with the planned reorganization, SHUS amended its revolving credit facility during the fourth quarter of 2025 to increase the aggregate commitment to $1.40 billion and extend the termination date of the majority of the facility commitments until October 2029. As further discussed in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements, the consolidated financial statements, as well as management's discussion and analysis of financial condition and results of operations, incorporate Woodside financial results and financial information beginning on April 19, 2024.

We believe that we are well equipped to navigate the current market conditions given our strong financial position. We ended the year with total cash and cash equivalents of $330.6 million, total liquidity of $1.73 billion and no senior note maturities until 2030.

Results for the Twelve Months Ended December 31, 2025

For the year ended December 31, 2025, we reported net income of $151.9 million, a 62% decrease compared to net income of $394.5 million for the prior year period. This was driven by a decrease in pretax income of both our homebuilding business and financial services business. Our homebuilding pretax income decreased $266.7 million, or 66% year-over-year. Our financial services business pretax income decreased $40.3 million, or 43%, compared to the same period in the prior year. The decrease in homebuilding pretax income was primarily due to a 22% decrease in home sale revenues, a 340 basis point decrease in gross margins from home sales and a 40 basis point increase in our selling, general and administrative expenses as a percentage of home sale revenues. The decrease in gross margin from home sales was driven largely by $77.7 million in inventory impairments during the year ended December 31, 2025 compared to $18.3 million in the same period in the prior year, an increase in incentive levels year-over-year and to a lesser extent increased land costs. 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 year. This was partially offset by an increase in loans originated as a percentage of total homes closed ("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.

* See “Forward-Looking Statements” above.

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Homebuilding

Pretax Income (Loss)


	Year Ended December 31,
	2025		Change				2024		Change				2023
			Amount		%				Amount		%
	(Dollars in thousands)
West	$	70,977	$	(284,860)	(80)	%	$	355,837	$	136,277	62	%	$	219,560
Mountain	98,510		(64,684)		(40)	%	163,194		19,356		13	%	143,838
East	(27,156)		(72,477)		(160)	%	45,321		(18,901)		(29)	%	64,222
Corporate	(6,422)		155,364		(96)	%	(161,786)		(184,298)		819	%	22,512
Total homebuilding pretax income	$	135,909	$	(266,657)	(66)	%	$	402,566	$	(47,566)	(11)	%	$	450,132

Homebuilding pretax income for 2025 was $135.9 million, a decrease of $266.7 million from $402.6 million for the year ended December 31, 2024. The decrease was due to a 40 basis point increase in our selling, general and administrative expenses as a percentage of home sale revenues, a 340 basis point decrease in gross margins from homes sales driven by a $59.4 million increase in inventory impairments and a 22% decrease in home sale revenues. This was partially offset by a $44.2 million decrease in transaction costs related to the Merger.

Our West segment experienced a $284.6 million year-over-year decrease in pretax income, due to an decrease in gross margin from home sales and a 28% decrease in home sale revenues. Our Mountain segment experienced a $65.0 million decrease in pretax income from the prior year, as a result of a decrease in gross margin from home sales and a 4% decrease in home sale revenues. Our East segment experienced a $72.5 million decrease in pretax income from the prior year, due primarily to a decrease in gross margin from home sales and a 27% decrease in home sale revenues. Our Corporate segment experienced a $155.4 million increase in pretax income from the prior year, due to costs incurred in 2024 in connection with the Merger, including the accelerated vesting of equity awards, key executives' transaction bonuses and transaction costs.

Assets


	December 31,				Change
	2025		2024		Amount		%
	(Dollars in thousands)
West	$	3,714,822	$	3,300,899	$	413,923	13	%
Mountain	1,309,645		1,429,116		(119,471)		(8)	%
East	890,772		593,167		297,605		50	%
Corporate	485,394		1,022,110		(536,716)		(53)	%
Total homebuilding assets	$	6,400,633	$	6,345,292	$	55,341	1	%

Total homebuilding assets increased 1% from December 31, 2024 to December 31, 2025, driven by our Homebuilding segments, partially offset by the Corporate segment. The increase in the homebuilding segments was driven by the West and East segments, due to increased inventory at period end, partially offset by the Mountain segment, which had decreased inventory at period end. The decrease in the Corporate segment was driven by a decrease in cash and cash equivalents as a result of cash used to purchase homebuilding inventory in 2025. This was partially offset by a decrease in the accounts receivable due from Parent.

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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.


	December 31,
	2025					2024					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
West	4,567	$	2,729,618	$	597.7	6,925	$	3,799,471	$	548.7	(34)	%	(28)	%	9	%
Mountain	2,801	1,585,697		566.1		3,027	1,650,330		545.2		(7)	%	(4)	%	4	%
East	1,356	603,039		444.7		1,972	830,060		420.9		(31)	%	(27)	%	6	%
Total	8,724	$	4,918,354	$	563.8	11,924	$	6,279,861	$	549.4	(27)	%	(22)	%	3	%


	December 31,
	2024					2023					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
West	6,925	$	3,799,471	$	548.7	4,821	$	2,624,373	$	544.4	44	%	45	%	1	%
Mountain	3,027	1,650,330		545.2		2,028	1,267,586		625.0		49	%	30	%	(13)	%
East	1,972	830,060		420.9		1,379	628,337		455.6		43	%	32	%	(8)	%
Total	11,924	$	6,279,861	$	549.4	8,228	$	4,520,296	$	549.4	45	%	39	%	—	%

For the year ended December 31, 2025, each of the homebuilding segments 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. This decrease in new home deliveries was partially offset by the increase in new home deliveries driven by the full year of Woodside new home deliveries during the year ended December 31, 2025 compared to new home deliveries post Merger during 2024. The increase in average selling price was due to a shift in mix to more higher priced communities.

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Gross Margin

Our gross margin from home sales for the year ended December 31, 2025 decreased 340 basis points year-over-year from 17.9% to 14.5%. 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.

Inventory Impairments

Inventory impairments recognized by segment for the years ended December 31, 2025, 2024 and 2023 are shown in the table below.


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	29,526	$	5,163	$	3,673
Mountain	2,930		400		1,533
East	9,611		1,922		—
Subtotal	42,067		7,485		5,206
Land and Land Under Development:
West	20,427		7,937		15,677
Mountain	8,495		—		8,817
East	6,664		2,828		—
Subtotal	35,586		10,765		24,494
Total Inventory Impairments	$	77,653	$	18,250	$	29,700

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)
December 31, 2025	7	$	17,400	$	52,862	12	%	—	18%
September 30, 2025	11	$	45,050	$	118,895	12	%	—	18%
June 30, 2025	8	15,203		58,512		12	%	—	15%
Total		$	77,653

September 30, 2024	4	$	7,800	$	34,290			15%
June 30, 2024	4	4,550		27,834		12	%	—	15%
March 31, 2024	3	5,900		17,634		12	%	—	18%
Total		$	18,250

December 31, 2023	3	$	2,200	$	13,273	12	%	—	15%
September 30, 2023	2	6,200		17,116		15	%	—	18%
June 30, 2023	1	13,500		17,886				18%
March 31, 2023	1	7,800		13,016				18%
Total		$	29,700

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Selling, General and Administrative Expenses


	Year Ended December 31,
	2025	Change	2024	Change	2023
	(Dollars in thousands)
General and administrative expenses	$299,120	$(121,902)	$421,022	$217,144	$203,878
General and administrative expenses as a percentage of home sale revenues	6.1%	(60) bps	6.7%	220 bps	4.5%

Marketing expenses	$141,297	$7,491	$133,806	$36,999	$96,807
Marketing expenses as a percentage of home sale revenues	2.9%	80 bps	2.1%	0 bps	2.1%

Commissions expenses	$161,886	$(26,925)	$188,811	$59,602	$129,209
Commissions expenses as a percentage of home sale revenues	3.3%	30 bps	3.0%	10 bps	2.9%
Total selling, general and administrative expenses	$602,303	$(141,336)	$743,639	$313,745	$429,894
Total selling, general and administrative expenses as a percentage of home sale revenues (SG&A Rate)	12.2%	40 bps	11.8%	230 bps	9.5%

For the year ended December 31, 2025, the decrease in our general and administrative expenses was driven by a decrease in salary related expenses, as the year ended December 31, 2024 included the vesting of equity awards and key executives' transaction bonuses in connection with the closing of the Merger. This was partially offset by the increase in general and administrative expenses driven by the full year of Woodside general and administrative expenses during the year ended December 31, 2025 compared to having only recognized general and administrative expenses post Merger during 2024.

For the year ended December 31, 2025, marketing expenses increased compared to the previous year driven by the full year of Woodside marketing expenses during the year ended December 31, 2025 compared to having only recognized marketing expenses post Merger during 2024. To a lesser extent, the increase was due to spend for spec home maintenance and utilities as a result of higher levels of completed unsold homes.

For the year ended December 31, 2025, commissions expenses decreased due to decreases in home sale revenues partially offset by an increase in external broker commissions driven by higher participation.

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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. Commentary for each of our segments on significant changes in these two metrics is provided below.


	December 31,
	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	4,417	$	2,720,474	$	615.9	2.30	5,295	$	3,111,769	$	587.7	2.83	(17)	%	(13)	%	5	%	(19)	%
Mountain	2,738	1,610,955		588.4		3.31	2,556	1,512,991		591.9		3.23	7	%	6	%	(1)	%	2	%
East	1,356	626,008		461.7		2.76	1,782	754,882		423.6		3.71	(24)	%	(17)	%	9	%	(26)	%
Total	8,511	$	4,957,437	$	582.5	2.64	9,633	$	5,379,642	$	558.5	3.06	(12)	%	(8)	%	4	%	(14)	%


	December 31,
	2024						2023						% 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	5,295	$	3,111,769	$	587.7	2.83	4,202	$	2,399,987	$	571.2	2.33	26	%	30	%	3	%	21	%
Mountain	2,556	1,512,991		591.9		3.23	1,657	1,004,360		606.1		2.19	54	%	51	%	(2)	%	47	%
East	1,782	754,882		423.6		3.71	1,285	578,427		450.1		2.55	39	%	31	%	(6)	%	45	%
Total	9,633	$	5,379,642	$	558.5	3.06	7,144	$	3,982,774	$	557.5	2.34	35	%	35	%	—	%	31	%

*Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period


	Active Subdivisions				Average Active Subdivisions
	December 31,				Year Ended December 31,
	2025	2024	% Change		2025	2024	% Change
West	174	150	16	%	160	156	3	%
Mountain	72	68	6	%	69	66	5	%
East	47	40	18	%	41	40	3	%
Total	293	258	14	%	270	262	3	%

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

For the year ended December 31, 2025, the decrease in the number of net new orders was driven by a decrease in the monthly sales absorption rate due to decreased demand as a result of current market conditions, offset partially by an increase in average active subdivisions. The increase in the number of average active subdivisions was the result of the full year of Woodside results for the year ended December 31, 2025 compared to just the post Merger period during 2024. The increase in the average selling price in our West segment was due to a change in mix to higher priced communities.

Mountain Segment Commentary

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For the year ended December 31, 2025, the increase in the number of net new orders was driven an increase in average active subdivisions. The increase in the number of average active subdivisions was the result of the full year of Woodside results for the year ended December 31, 2025 compared to just the post Merger period during 2024.

East Segment Commentary

For the year ended December 31, 2025, the decrease in the number of net new orders was driven by an decrease in the monthly sales absorption rate due to decreased demand as a result of current market conditions. The increase in the average selling price in our East segment was due to change in mix to higher priced communities.

Cancellation Rate:


	Cancellations As a Percentage of Gross Sales
	December 31,
	2025		Change		2024		Change		2023
West	15	%	(1)	%	16	%	(10)	%	26	%
Mountain	13	%	(1)	%	14	%	(11)	%	25	%
East	16	%	(2)	%	18	%	(3)	%	21	%
Total	15	%	(1)	%	16	%	(9)	%	25	%

Our cancellation rate as a percentage of gross sales decreased year-over-year during the year ended December 31, 2025 as a result of a decrease in beginning backlog, offset partially by a decrease in gross sales (before cancellations).

Backlog:


	December 31,
	2025					2024					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
West	417	$	322,758	$	774.0	567	$	411,550	$	725.8	(26)	%	(22)	%	7	%
Mountain	299	176,256		589.5		362	203,741		562.8		(17)	%	(13)	%	5	%
East	84	42,432		505.1		84	41,059		488.8		—	%	3	%	3	%
Total	800	$	541,446	$	676.8	1,013	$	656,350	$	647.9	(21)	%	(18)	%	4	%

At December 31, 2025, we had 800 homes in backlog with a total value of $541.4 million, representing decreases of 21% and 18%, respectively, from December 31, 2024. The decrease in the number of homes in backlog was primarily a result of a decrease in net new orders during the year ended December 31, 2025. 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:


	December 31,
	2025	2024	% Change
Unsold:
Completed	2,766	1,593	74	%
Under construction	953	3,639	(74)	%
Total unsold started homes	3,719	5,232	(29)	%
Sold homes under construction or completed	615	828	(26)	%
Model homes under construction or completed	614	659	(7)	%
Total homes completed or under construction	4,948	6,719	(26)	%

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 year ended December 31, 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):


	December 31, 2025			December 31, 2024
	Lots Owned	Lots Optioned	Total	Lots Owned	Lots Optioned	Total	Total % Change
West	14,787	3,404	18,191	14,773	4,752	19,525	(7)	%
Mountain	8,563	1,429	9,992	10,025	2,006	12,031	(17)	%
East	5,378	1,655	7,033	3,454	3,347	6,801	3	%
Total	28,728	6,488	35,216	28,252	10,105	38,357	(8)	%

Our total owned and optioned lots at December 31, 2025 were 35,216, a decrease of 8% from December 31, 2024. We believe that our total lot supply is sufficient to meet our operating needs, consistent with our philosophy of maintaining a two to three year supply of land. See "Forward-Looking Statements" above.

Financial Services


	Year Ended December 31,
			Change						Change
	2025		Amount		%		2024		Amount		%		2023
	(Dollars in thousands)
Financial services revenues
Mortgage Operations	$	54,831	$	(37,939)	(41)	%	$	92,770	$	16,291	21	%	$	76,479
Other	54,631		(1,285)		(2)	%	55,916		9,825		21	%	46,091
Total financial services revenues	$	109,462	$	(39,224)	(26)	%	$	148,686	$	26,116	21	%	$	122,570

Financial services pretax income
Mortgage Operations	$	14,454	$	(31,854)	(69)	%	$	46,308	$	5,552	14	%	$	40,756
Other	39,157		(8,411)		(18)	%	47,568		12,351		35	%	35,217
Total financial services pretax income	$	53,611	$	(40,265)	(43)	%	$	93,876	$	17,903	24	%	$	75,973

For the year ended December 31, 2025, our financial services pretax income decreased $40.3 million or 43% from the same period in the prior year. The decrease in financial services pretax income was driven by our Mortgage Operations and other financial services segments. The decrease in Mortgage Operations was driven by decreased volume due to our homebuilding operations, partially offset by an increased Capture Rate. The decrease in other financial services was driven by our insurance operations which saw a decrease in revenue due to a decrease in homes closed as well as an unfavorable adjustment to insurance reserves.

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The table below sets forth information for our Mortgage Operations relating to mortgage loans originated and Capture Rate.


	Year Ended December 31,
	2025			% or Percentage Change		2024			% or Percentage Change		2023
	(Dollars in thousands)
Total Originations:
Loans	5,353			(27)	%	7,317			35	%	5,430
Principal	$	2,654,408		(22)	%	$	3,409,356		39	%	$	2,448,426
Capture Rate Data:
Capture rate as % of all homes delivered	80		%	4	%	76		%	10	%	66		%
Capture rate as % of all homes delivered (excludes cash sales)	87		%	4	%	83		%	11	%	72		%
Mortgage Loan Origination Product Mix:
FHA loans	33		%	2	%	31		%	5	%	26		%
Other government loans (VA & USDA)	19		%	2	%	17		%	(2)	%	19		%
Total government loans	52		%	4	%	48		%	3	%	45		%
Conventional loans	48		%	(4)	%	52		%	(3)	%	55		%
	100		%	—	%	100		%	—	%	100		%
Loan Type:
Fixed rate	93		%	(3)	%	96		%	(1)	%	97		%
ARM	7		%	3	%	4		%	1	%	3		%
Credit Quality:
Average FICO Score	740			—	%	743			—	%	741
Other Data:
Average Combined LTV ratio	86		%	2	%	84		%	1	%	83		%
Full documentation loans	100		%	—	%	100		%	—	%	100		%
Loans Sold to Third Parties:
Loans	5,584			(24)	%	7,348			37	%	5,356
Principal	$	2,757,908		(19)	%	$	3,408,798		41	%	$	2,419,558

Income Taxes

We recorded an income tax provision of $37.6 million, $101.9 million and $125.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, and our resulting effective income tax rates were 19.9%, 20.5% and 23.8%, respectively. Our tax provision and effective tax rate are driven by (i) pre-tax book income for the full year, adjusted for items that are deductible/non-deductible for tax purposes only (i.e., permanent items); (ii) benefits from federal energy credits; (iii) taxable income generated in state jurisdictions that varies from consolidated income and (iv) stock based compensation windfalls recorded as discrete items. The difference between our effective tax rate for the year ended December 31, 2025, and the federal statutory rate of 21% was due to a 5.6% decrease in the effective tax rate due to the benefit of federal energy credits, partially offset by a 3.3% increase in the effective tax rate for state taxes.

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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 Facilities (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 December 31, 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 Facilities, 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 December 31, 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 December 31, 2025, we had $32.3 million of required operating lease future minimum payments.

At December 31, 2025, we had deposits of $32.9 million in the form of cash and $16.1 million in the form of letters of credit that secured option contracts to purchase 6,488 lots for a total estimated purchase price of $535.0 million.

At December 31, 2025, we had outstanding surety bonds and letters of credit totaling $677.5 million and $169.1 million, respectively, including $133.6 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $343.5 million and $136.2 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 Facilities. 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 Facilities, we believe that our capital resources are adequate to satisfy our short and long-term capital requirements, including meeting future payments on our senior notes as they become due. See “Forward-Looking Statements” above.

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 Facilities

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.

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Revolving Credit Facility. On November 19, 2024 the Company entered into an amended and restated unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders, which may be used for general corporate purposes. On 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 (the "Commitment") 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 the aggregate amount of the commitments may increase to an amount not to exceed $1.90 billion (the “accordion” feature) 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. The Revolving Credit Facility includes a $185.0 million sublimit for letters of credit.

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 term of the guarantees is through the termination of the Revolving Credit Facility. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. In the case of a default, the guarantors would be required to perform under the agreement. The financial covenants include a consolidated leverage test and interest coverage test, 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 December 31, 2025.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At December 31, 2025 and 2024, there were $25.8 million and $43.6 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. We had $0.0 million and $0.0 million outstanding under the Revolving Credit Facility as of December 31, 2025 and 2024, respectively. As of December 31, 2025, availability under the Revolving Credit Facility was approximately $1.37 billion.

Mortgage Repurchase Facilities. HomeAmerican enters into Mortgage Repurchase Facilities with various lenders, which provide liquidity by providing for the sale of eligible mortgage loans with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. HomeAmerican has entered into Mortgage Repurchase Facilities with two lenders, which provide HomeAmerican with committed repurchase facilities of up to an aggregate of $300.0 million as of December 31, 2025 (subject to increase by up to $150.0 million under certain conditions with respect to one of the lenders).

At December 31, 2025 and 2024, HomeAmerican had $106.3 million and $177.6 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facilities. Mortgage loans that HomeAmerican is obligated to repurchase under the mortgage repurchase facilities are accounted for as a debt financing arrangement and are reported as mortgage repurchase facilities in the consolidated balance sheets. Pricing under the mortgage repurchase facilities are based on SOFR.

The Mortgage Repurchase Facilities contain 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 facilities. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the mortgage repurchase facilities as of December 31, 2025.

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Effective April 16, 2025, HomeAmerican entered into a Waiver and Consent agreement with one of the Mortgage Repurchase Facilities lenders, in which the lender 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.

SHUS Common Stock Repurchase Program

Through April 19, 2024, we were authorized to repurchase up to 4,000,000 shares of our common stock. We did not repurchase any shares of our common stock under this repurchase program and the repurchase program ended upon the Merger.

Consolidated Cash Flow

Our operating cash flows are primarily impacted by: (1) land purchases and related development and construction of homes; (2) closing homes and the associated timing of collecting receivables from home closings; (3) the origination and subsequent sale of mortgage loans originated by HomeAmerican; (4) payments on accounts payables and accrued liabilities; and (5) funding for payroll. When we close on the sale of a house, our homebuilding subsidiaries will generally receive the proceeds from the sale of the homes within a few days of the home being closed. Therefore, our home sales receivable balance can increase or decrease from period to period based upon the timing of our home closings. Additionally, the amount of mortgage loans held-for-sale can be impacted period to period based upon the number of mortgage loans that were originated by HomeAmerican that have not been sold to third party purchasers and by the timing of fundings by third party mortgage purchasers. Accordingly, mortgage loans held-for-sale may increase if HomeAmerican originates more homes towards the end of one reporting period when compared with the same period in the previous year. HomeAmerican will generally sell mortgage loans it originates between 5 to 35 days after origination.

Operating Cash Flow Activities

During the year ended December 31, 2025, net cash used in operating activities was $368.8 million compared with cash provided by operating activities of $183.0 million in the prior year period. During the year ended December 31, 2025 and 2024, one of the most significant sources of cash provided by operating activities was net income of $151.9 million and $394.5 million, respectively. During the year ended December 31, 2025, included in net income was $77.7 million of inventory impairments, compared to $18.3 million during the prior year period. The most significant source of cash used by operating activities during the year ended December 31, 2025 was cash used to increase inventory of $747.0 million compared to $324.8 million during the prior year. The increase in 2025 was the result of an increase of finished homes at the end of the period. Cash provided by the decrease in trade and other receivables for the year ended December 31, 2025 was $17.1 million compared to $35.8 million for the year ended December 31, 2024. The decrease during the year ended December 31, 2025 was driven by a decrease of homes closed at the end of the period. Cash provided by the decrease in accounts receivable due from Parent was $23.5 million compared to the cash used in accounts receivable due from Parent of $34.5 million during the year ended December 31, 2024. This variance was driven by payments in connection with the Merger funded by the Company in 2024, which were repaid by Parent in 2025. Cash provided to decrease mortgage loans held-for-sale, net was $94.4 million compared to $21.4 million in the year ended December 31, 2025 and 2024, respectively. The decrease in mortgage loans held-for-sale was a result of a decrease in loan originations during 2025.

Investing Cash Flow Activities

During the year ended December 31, 2025, net cash provided by investing activities was $150.2 million compared to cash used in investing activities of $150.9 million. The primary driver of this increase is due to cash used in the increase in receivable from cash pooling arrangement with Parent of $211.9 million during the year ended December 31, 2024 compared to decrease in receivables from cash pooling arrangement with Parent of $179.6 million during the year ended December 31, 2025. This was partially offset by cash provided by the maturities of marketable securities, net of purchases, of $82.9 million during the year ended December 31, 2024 compared to none in 2025, driven by all outstanding marketable securities maturing during 2024.

Financing Cash Flow Activities

During the year ended December 31, 2025 and 2024, net cash used in financing activities was $301.8 million and $844.9 million respectively. The primary driver of this decrease was $611.4 million of cash used in distributions to Parent during the year ended December 31, 2024 compared to none in 2025. The distribution to Parent during the year ended December 31, 2024 was due to the Company's funding of a portion of the consideration of the Merger. Cash used to fund dividend payments increased during the year ended December 31, 2025 to $195.2 million compared to $155.5 million in the

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year ended December 31, 2024. This increase was primarily due to a one-time dividend declared by Woodside in 2025 prior to and in connection with the Woodside Merger. During the year ended December 31, 2025 and 2024, cash used in the payments on mortgage repurchase facilities, net was $71.4 million and $27.4 million, respectively. During the year ended December 31, 2025 and 2024 there was a higher level of loan sales compared to loan originations at period end. Cash used in issuance of shares under stock-based compensation programs, net was $25.6 million during the year ended December 31, 2024 compared to none during the year ended December 31, 2025. The change was driven by the merger and cancellation of stock during the year ended December 31, 2024. Cash used in the repayment of notes payable was $30.0 million during the year ended December 31, 2025 compared to none in the prior year. This was driven by the maturity and payment on the Company's third party note payable.

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” above.

Listed below are those estimates and policies that we believe are critical and require the use of complex judgment in their application. Our critical accounting estimates and policies are as follows and should be read in conjunction with the Notes to our Consolidated Financial Statements.

Homebuilding Inventory Valuation. Refer to Note 1, Summary of Significant Accounting Policies, in the notes to the financial statements for information on the composition of the inventory balances.

In accordance with Accounting Standards Codification (“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 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. We generally determine the estimated fair value of each subdivision by calculating the present value of the estimated future cash flows using discount rates, which are Level 3 inputs (see Note 6, Fair Value Measurements, in the notes to the financial statements for definitions of fair value 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. These estimates of undiscounted future cash flows are dependent on specific market or sub-market conditions for each subdivision. While we consider available information to determine what we believe to be our best estimates as of the end of a reporting period, these estimates are subject to change in future reporting periods as facts and circumstances change. Local market-specific conditions that may impact these estimates for a subdivision include:

•historical subdivision results, and actual and trending Operating Margin, base selling prices and home sales incentives;

•forecasted Operating Margin for homes in backlog;

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•the intensity of competition within a market or sub-market, including publicly available home sales prices and home sales incentives offered by our competitors;

•increased levels of home foreclosures;

•the current sales pace for active subdivisions;

•subdivision specific attributes, such as location, availability and size of lots in the sub-market, desirability and uniqueness of subdivision location and the size and style of homes currently being offered;

•potential for alternative home styles to respond to local market conditions;

•changes by management in the sales strategy of a given subdivision; and

•current local market economic and demographic conditions and related trends and forecasts.

These and other local market-specific conditions that may be present are considered by personnel in our homebuilding divisions as they prepare or update the forecasted assumptions for each subdivision. Quantitative and qualitative factors other than home sales prices could significantly impact the potential for future impairments. The sales objectives can differ among subdivisions, even within a given sub-market. For example, facts and circumstances in a given subdivision may lead us to price our homes with the objective of yielding a higher sales absorption pace, while facts and circumstances in another subdivision may lead us to price our homes to minimize deterioration in our gross margins from home sales, even though this could result in a slower sales absorption pace. Furthermore, the key assumptions included in our estimated future undiscounted cash flows may be interrelated. For example, a decrease in estimated base sales price or an increase in home sales incentives may result in a corresponding increase in sales absorption pace. Additionally, a decrease in the average sales price of homes to be sold and closed in future reporting periods for one subdivision that has not been generating what management believes to be an adequate sales absorption pace may impact the estimated cash flow assumptions of a nearby subdivision. Changes in our key assumptions, including estimated construction and land development costs, absorption pace and selling strategies could materially impact future cash flow and fair value estimates. Due to the number of possible scenarios that would result from various changes in these factors, we do not believe it is possible to develop a sensitivity analysis with a level of precision that would be meaningful to an investor.

If the undiscounted future cash flows of a subdivision are less than its carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We determine the estimated fair value of each subdivision either: (1) by determining the present value of the estimated future cash flows at discount rates that are commensurate with the risk of the subdivision under evaluation; or (2) assessing the market value of the land in its current condition by considering the estimated price a willing buyer would pay for the land (other than in a forced liquidation), and recent land purchase transactions that we believe are indicators of fair value. The estimated future cash flows are the same for both our recoverability and fair value assessments. Factors we consider when determining the discount rate to be used for each subdivision include, among others:

•the number of lots in a given subdivision;

•the amount of future land development costs to be incurred;

•risks associated with the home construction process, including the stage of completion for the entire subdivision and the number of owned lots under construction; and

•the estimated remaining lifespan of the subdivision.

We allocate the impairments recorded between housing completed or under construction and land and land under development for each impaired subdivision based upon the status of construction of a home on each lot (i.e., if the lot is in housing completed or under construction, the impairment for that lot is recorded against housing completed or under construction). The allocation of impairment is the same with respect to each lot in a given subdivision. Changes in management’s estimates, particularly the timing and amount of the estimated future cash inflows and outflows and forecasted average selling prices of homes to be sold and closed can materially affect any impairment calculation. Because our forecasted cash flows are impacted significantly by changes in market conditions, it is reasonably possible that actual results could differ significantly from those estimates. Please see the “Inventory Impairments” section for a detailed discussion and analysis of our asset impairments.

If land is classified as held for sale, we measure it 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. 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. 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.

Warranty Accrual. Our homes are sold with limited third-party warranties. We record expenses and warranty accruals for general and structural warranty claims, as well as accruals for known, unusual warranty-related expenditures. A warranty

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accrual is recorded for each home closed 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. Actual future warranty costs could differ from currently estimated amounts. A 10% change in the historical warranty rates used to estimate our warranty accrual would not result in a material change in our accrual.

Insurance Reserves. The establishment of reserves for estimated losses associated with insurance policies issued by 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 depending on the business conducted, and changing regulatory and legal environments. Historical trends in claim severity and frequency patterns have been inconsistent and we believe they may continue to fluctuate. 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. A 10% increase in both the claim frequency and the average cost per claim used to estimate the reserves would result in an increase in our insurance reserves and an associated increase in expense of approximately $21.2 million. A 10% decrease in both the claim frequency and the average cost per claim would result in a decrease in our insurance reserves and an associated reduction in expense of $19.2 million.

Litigation Accruals. In the normal course of business, we are a defendant in claims primarily relating to premises liability, product liability and personal injury claims. These claims seek relief from us under various theories, including breach of implied and express warranty, negligence, strict liability, misrepresentation and violation of consumer protection statutes. We have accrued for losses that may be incurred with respect to legal claims based upon information provided by our legal counsel, including counsel’s on-going evaluation of the merits of the claims and defenses and the level of estimated insurance coverage. Due to uncertainties in the estimation process, actual results could vary from those accruals and could have a material impact on our results of operations.

Home Sale Revenue Recognition for Homebuilding Segments. We recognize home sale revenues from home deliveries when we have satisfied the performance obligations within the sales agreement, which is generally when title to and possession of the home are transferred to the buyer at the home closing date. Revenue from a home delivery includes the base sales price and any purchased options and upgrades and is reduced for any sales price incentives.

In certain states where we build, we are not always able to complete certain outdoor features (such as landscaping or pools) prior to closing the home. To the extent these separate deliverables are not complete upon the closing of a home, we defer home sale revenues related to incomplete outdoor features, and recognize that revenue upon completion of the outdoor features.

Land Sale Revenue Recognition for Homebuilding Segments: We recognize land sale revenues when title to the property has been transferred to the buyer, adequate consideration has been received, and the Company has no significant future performance obligations.

Revenue Recognition for HomeAmerican: Revenues recorded by HomeAmerican primarily reflect (1) origination fees and (2) the corresponding sale, or expected future sale, of a loan, which will include the estimated earnings from either the release or retention of a loan’s servicing rights. Origination fees are recognized when a loan is originated. When an interest rate lock commitment is made to a customer, we record the expected gain or loss on sale of the mortgage, plus the estimated earnings from the expected sale of the associated servicing rights, adjusted for a pull-through percentage (which is defined as the likelihood that an interest rate lock commitment will be originated), as revenue. As the interest rate lock commitment gets closer to being originated, the expected gain on the sale of that loan plus its servicing rights is updated to reflect current market value and the increase or decrease in the fair value of that interest rate lock commitment is recorded through revenues. At the same time, the expected pull-through percentage of the interest rate lock commitment to be originated is updated based upon current market conditions and the remaining time until loan origination and, if there has been a change, revenues are adjusted as necessary. After origination, our mortgage loans, which could also include their servicing rights, are sold to third-party purchasers in accordance with sale agreements entered into by us with a third-party purchaser of the loans. We make representations and warranties with respect to the status of loans transferred in the sale agreements. The sale agreements generally include statements acknowledging the transfer of the loans is intended by both parties to constitute a sale. Sale of a mortgage loan has occurred when the following criteria, among others, have been met: (1) fair consideration has been paid for transfer of the loan by a third party in an arms-length transaction, (2) all the usual risks and rewards of ownership that are in substance a sale have been transferred by us to the third party purchaser; and (3) we do not have a substantial continuing involvement with the mortgage loan.

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We carry interest rate lock commitments and mortgage loans held-for-sale at fair value.

Home Cost of Sales. Refer to the Note 1, Summary of Significant Accounting Policies, in the notes to the financial statements for information on the composition of home cost of sales. When a home is closed, we generally have not yet paid or incurred all costs necessary to complete the construction of the home and certain land development costs. At the time of a home closing, we compare the home construction budgets to actual recorded costs to determine the additional estimated costs remaining to be paid on each closed home. For amounts not incurred or paid as of the time of closing a home, we record an estimated accrual associated with certain home construction and land development costs. Generally, these accruals are established based upon contracted work which has yet to be paid, open work orders not paid at the time of home closing, as well as land completion costs more likely than not to be incurred, and represent estimates believed to be adequate to cover the expected remaining home construction and land development costs. We monitor the adequacy of these accruals on a house-by-house basis and in the aggregate on both a market-by-market and consolidated basis.

Goodwill. In accordance with ASC Topic 350, Intangibles–Goodwill and Other (“ASC 350”), we evaluate goodwill for possible impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We use a three-step process to assess the realizability of goodwill. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. For example, we analyze changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there are indicators of a significant decline in the fair value of a particular reporting unit. If the qualitative assessment indicates that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount then no further testing is required.

If a qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed to the second step where we calculate the fair value of a reporting unit based on discounted future probability-weighted cash flows. If this step indicates that the carrying value of a reporting unit is in excess of its fair value, we will proceed to the third step where the fair value of the reporting unit will be allocated to assets and liabilities as they would in a business combination. Impairment occurs when the carrying amount of goodwill exceeds its estimated fair value calculated in the third step.

Based on our analysis, we have concluded that as of December 31, 2025 and 2024, our goodwill was not impaired.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 2, Recently Issued Accounting Standards, in our consolidated financial statements.

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Item 7A. 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 December 31, 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 December 31, 2025 had an aggregate principal balance of $75.8 million, of which $74.7 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 $147.1 million at December 31, 2025, of which $98.4 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 $154.5 million and $189.0 million at December 31, 2025 and December 31, 2024, respectively.

HomeAmerican provides mortgage loans that generally are sold forward and subsequently delivered to a third-party purchaser between 5 and 35 days. Forward commitments are used for non-trading purposes to sell mortgage loans and hedge price risk due to fluctuations in interest rates on rate-locked mortgage loans in process that have not closed. Due to this economic hedging philosophy, the market risk associated with these mortgages is limited. For forward sales commitments, as well as commitments to originate mortgage loans that are still outstanding at the end of a reporting period, we record the fair value of the derivatives in the consolidated statements of operations and comprehensive income with an offset to either derivative assets or liabilities, depending on the nature of the change.

We utilize our Revolving Credit Facility, our Mortgage Repurchase Facilities 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 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 Facilities, changes in interest rates generally do not affect the fair value of the outstanding borrowing on the debt facilities, but does affect our earnings and cash flows. See “Forward-Looking Statements” above.

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At December 31, 2025, we had $106.3 million of mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facilities. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facilities are accounted for as a debt financing arrangement and are reported under Mortgage Repurchase Facilities in the consolidated balance sheets. The following table provides the maturities, average interest rate and estimated fair value of significant financial instruments that are sensitive to changes in interest rates at December 31, 2025.


	Maturities through December 31,																	Estimated Fair Value
	2026			2027		2028		2029		2030		Thereafter			Total
	(Dollars in thousands)
Assets:
Mortgage loans held for sale (1)
Fixed Rate	$	147,111		$	—	$	—	$	—	$	—	$	—		$	147,111		$	142,418
Average interest rate	4.49		%												4.49		%


Liabilities:
Fixed rate debt	$	—		$	—	$	—	$	—	$	—	$	1,500,000		$	1,500,000		$	1,298,940
Average interest rate												4.28		%	4.28		%
Mortgage repurchase facilities	$	106,253		$	—	$	—	$	—	$	—	$	—		$	106,253		$	106,253
Average interest rate	4.52		%												4.52		%
Derivative and Financial Instruments:
Commitments to originate mortgage loans
Notional amount	$	75,792		$	—	$	—	$	—	$	—	$	—		$	75,792		$	(6,398)
Average interest rate	4.57		%												4.57		%
Forward sales of mortgage backed securities
Notional amount	$	154,500		$	—	$	—	$	—	$	—	$	—		$	154,500		$	(3,432)
Average interest rate	4.22		%												4.22		%

__________________________________

(1)All the amounts in this line reflect the expected 2026 disposition of these loans rather than the actual scheduled maturity dates of these mortgages.

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Item 8. Financial Statements and Supplementary Data

Sekisui House U.S., Inc.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


			Page
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB 00042)			F - 2
Consolidated Balance Sheets at December 31, 2025 and December 31, 2024			F - 4
Consolidated Statements of Operations and Comprehensive Income for each of the Three Years in the Period Ended December 31, 2025			F - 5
Consolidated Statements of Stockholders' Equity for each of the Three Years in the Period Ended December 31, 2025			F - 6
Consolidated Statements of Cash Flows for each of the Three Years in the Period Ended December 31, 2025			F - 7
Notes to Consolidated Financial Statements			F - 9

F - 1

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Sekisui House U.S., Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sekisui House U.S., Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.



			Evaluation of Insurance Reserves
Description of the Matter			At December 31, 2025, insurance reserves totaled $100.8 million for the estimated incurred cost of construction defect claims. As more fully described in Note 1 to the consolidated financial statements, the Company establishes the reserves for estimated losses based on actuarial studies that include known facts and interpretations of circumstances.

			Auditing the Company’s estimate of the reserves was especially challenging because the estimate is based on actuarial projections of future claims derived from historical claims data. There is significant uncertainty in the actuarial projections as the potential claim payments will be made over a long period of time, they assume that historical claims are a reasonable proxy of future claims, and the claim amounts can be significantly impacted by changes in product mix, quality of construction, units sold, and geographic location of sold units.

How We Addressed the Matter in Our Audit			We obtained an understanding of the Company’s process to estimate the reserves. For example, we obtained an understanding over management’s review of the actuary’s analysis, including management’s procedures over the underlying data used by the actuary and the consideration by management over whether historical claim information requires adjustment.

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			To test the estimate of reserves, our audit procedures included, among others, utilizing an internal actuarial specialist to evaluate the actuarial study utilized by management and to perform independent calculations to determine a range of reasonable reserves and to compare this range to the recorded insurance reserves. Additionally, we tested the completeness and accuracy of the underlying claims data provided to management's actuarial specialist, evaluated the change in the reserves from the prior year based upon current year trends in claim data, and performed hindsight reviews of past estimates compared to actual claim payments.

			Evaluation of Inventories for Impairment

Description of the Matter			As of and for the year ended December 31, 2025, the Company reported inventories of approximately $5.7 billion and impairment charges of $77.7 million. The Company’s inventories are primarily associated with subdivisions where it intends to construct and sell homes, including models and unsold homes. As more fully described in Note 1 to the consolidated financial statements, management evaluates inventories for impairment at each quarter end on a subdivision level basis.

			Auditing the Company’s evaluation of inventories for impairment involved subjective auditor judgment to evaluate management’s home sales revenue assumption in its future undiscounted and discounted cash flows. The estimated future home sales revenue assumption is highly judgmental as it is a forward-looking assumption that can be significantly affected by sub-market information including competition, customer demand for size and style of homes, and pricing trends in home sale orders. Differences or changes in this significant assumption could have a material impact on the Company’s analysis.

How We Addressed the Matter in Our Audit			We obtained an understanding over the Company’s inventory impairment process. For example, we obtained an understanding over management’s review of the significant assumptions and data inputs utilized in its test for recoverability and, when applicable, its measurement of impairment losses.

			Our testing of the Company’s impairment analysis included, among other procedures, evaluating the significant assumptions and operating data used to estimate the future undiscounted cash flows. To test the home sales revenue assumption included in the estimated future undiscounted cash flows we compared the home sales revenue assumption to historical subdivision operating trends, performed sensitivity analyses over the home sales revenue assumption and evaluated sub-market industry data.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2000.

Denver, Colorado

March 12, 2026

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Sekisui House U.S., Inc.

Consolidated Balance Sheets


	December 31, 2025		December 31, 2024
	(Dollars in thousands, except per share amounts)
ASSETS
Homebuilding:
Cash and cash equivalents	$	258,411	$	617,644
Restricted cash	1		1,222

Trade and other receivables	75,397		92,635
Accounts receivable due from Parent	45,536		248,485



Inventories	5,668,043		4,973,811

Property and equipment, net	87,086		96,226
Deferred tax assets, net	63,400		32,985
Prepaids and other assets	121,506		163,931
Investment in unconsolidated entities	7,794		43,994

Goodwill and intangible assets, net	73,459		74,359
Total homebuilding assets	6,400,633		6,345,292
Financial Services:
Cash and cash equivalents	72,219		232,217

Mortgage loans held-for-sale, net	142,418		236,806
Other assets	23,937		21,828
Total financial services assets	238,574		490,851
Total Assets	$	6,639,207	$	6,836,143
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	125,981	$	188,057
Accrued and other liabilities	439,964		427,278
Related party payables	1,648		2,540


Related party note	—		99,900
Notes payable, net	—		359,914
Senior notes, net	1,485,166		1,484,267
Total homebuilding liabilities	2,052,759		2,561,956
Financial Services:
Accounts payable and accrued liabilities	118,761		121,667
Mortgage repurchase facilities	106,253		177,618
Total financial services liabilities	225,014		299,285
Total Liabilities	2,277,773		2,861,241
Stockholders' Equity
Common stock, $0.01 par value; 150 shares authorized; 100 issued and outstanding at December 31, 2025 and December 31, 2024	—		—
Additional paid-in-capital	2,613,088		2,183,221
Retained earnings	1,748,346		1,791,681

Total Stockholders' Equity	4,361,434		3,974,902
Total Liabilities and Stockholders' Equity	$	6,639,207	$	6,836,143

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

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Sekisui House U.S., Inc.

Consolidated Statements of Operations and Comprehensive Income


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Homebuilding:
Home sale revenues	$	4,918,354	$	6,279,861	$	4,520,296
Land sale revenues	70,447		50,089		—
Other revenues	110		6,225		—
Total revenues	4,988,911		6,336,175		4,520,296
Home cost of sales	(4,127,156)		(5,138,993)		(3,684,487)
Inventory impairments	(77,653)		(18,250)		(29,700)
Total home cost of sales	(4,204,809)		(5,157,243)		(3,714,187)
Land cost of sales	(48,959)		(35,691)		—
Other cost of sales	(21)		(5,821)		—
Total cost of sales	(4,253,789)		(5,198,755)		(3,714,187)
Gross margin	735,122		1,137,420		806,109
Selling, general and administrative expenses	(602,303)		(743,639)		(429,894)
Interest and other income	17,017		55,532		73,567
Transaction costs	4,827		(39,361)		—
Other income (expense), net	(18,753)		(7,386)		350
Homebuilding pretax income	135,910		402,566		450,132

Financial Services:
Revenues	109,462		148,686		122,570
Expenses	(69,350)		(74,767)		(62,942)
Other income, net	13,499		19,957		16,345
Financial services pretax income	53,611		93,876		75,973

Income before income taxes	189,521		496,442		526,105
Provision for income taxes	(37,649)		(101,911)		(125,100)
Net income	$	151,872	$	394,531	$	401,005

Other comprehensive income net of tax:
Unrealized gain (loss) related to available-for-sale debt securities	$	—	$	(51)	$	51
Other comprehensive income	—		(51)		51
Comprehensive income	$	151,872	$	394,480	$	401,056

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

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Sekisui House U.S., Inc.

Consolidated Statements of Stockholders' Equity

(Dollars in thousands, except share amounts)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at December 31, 2022	72,585,596	$	726	$	1,784,173	$	1,306,885	$	—	$	3,091,784
Net income	—	—		—		401,005		—		401,005
Other comprehensive income (loss)	—	—		—		—		51		51
Shares issued under stock-based compensation programs, net	2,079,536	21		20,752		—		—		20,773
Cash dividends declared	—	—		—		(155,237)		—		(155,237)
Stock-based compensation expense	—	—		19,509		—		—		19,509
Forfeiture of restricted stock	(3,653)	—		—		—		—		—
Balance at December 31, 2023	74,661,479	$	747	$	1,824,434	$	1,552,653	$	51	$	3,377,885
Net income	—	—		—		394,531		—		394,531
Other comprehensive income (loss)	—	—		—		—		(51)		(51)
Shares issued under stock-based compensation programs, net	388,176	3		(25,601)		—		—		(25,598)
Cash dividends declared	—	—		—		(155,503)		—		(155,503)
Stock-based compensation expense	—	—		2,805		—		—		2,805
Forfeiture of restricted stock	(301)	—		—		—		—		—

Effect of merger of entities under common control	—	—		985,487		—		—		985,487
Effect of Merger transaction	(75,049,254)	(750)		(603,904)		—		—		(604,654)
Balance at December 31, 2024	100	$	—	$	2,183,221	$	1,791,681	$	—	$	3,974,902
Net income	—	—		—		151,872		—		151,872
Contribution from Parent	—	—		429,867		—		—		429,867
Cash dividends declared	—	—		—		(195,207)		—		(195,207)
Balance at December 31, 2025	100	$	—	$	2,613,088	$	1,748,346	$	—	$	4,361,434

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

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Sekisui House U.S., Inc.

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Operating Activities:
Net income	$	151,872	$	394,531	$	401,005
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	—		1,319		23,468
Depreciation and amortization	38,148		41,074		25,553
Inventory impairments	77,653		18,250		29,700
Project abandonment costs	15,355		7,257		(45)
Amortization of discount of marketable debt securities	—		(4,682)		(29,673)
Impairment of property and equipment	2,657		1,056		—
Loss on abandonment of property and equipment	617		—		—
Income from unconsolidated entities	(910)		—		—
Deferred income tax benefit (expense)	(30,415)		11,432		10,408
Net changes in assets and liabilities:
Trade and other receivables	17,138		35,755		21,986
Accounts receivable due from Parent	23,472		(34,463)		—
Mortgage loans held-for-sale, net	94,388		21,406		(28,699)
Inventories	(747,037)		(324,761)		185,906

Prepaids and other assets	47,250		(16,181)		(3,886)
Accounts payable and accrued liabilities	(59,033)		31,016		(74,093)
Net cash provided by (used in) operating activities	(368,845)		183,009		561,630
Investing Activities:
Purchases of marketable securities	—		(177,133)		(1,166,412)

Maturities of marketable securities	—		260,000		1,679,000

Investment in unconsolidated entities	—		(4,399)		—
Distributions of capital from unconsolidated entities	—		4,779		—
Decrease (increase) in receivable from cash pooling arrangement with Parent	179,577		(211,905)		—
Proceeds from sale / disposal of other assets	11,975		—		—
Purchases of property and equipment	(41,335)		(22,243)		(43,145)
Net cash provided by (used in) investing activities	150,217		(150,901)		469,443
Financing Activities:
Advances (payments) on mortgage repurchase facilities, net	(71,366)		(27,363)		29,229
Payments on homebuilding line of credit, net	—		(20,000)		—


Repayment of notes payable, net	(30,022)		—		—
Dividend payments	(195,207)		(155,503)		(155,237)
Payments of deferred debt issuance costs	(5,229)		(5,076)		(36)
Distribution to Parent	—		(611,369)		—
Issuance of shares under stock-based compensation programs, net	—		(25,598)		20,773
Net cash used in financing activities	(301,824)		(844,909)		(105,271)
Net increase (decrease) in cash, cash equivalents and restricted cash	(520,452)		(812,801)		925,802
Cash, cash equivalents and restricted cash:
Beginning of year	851,083		1,642,897		717,095
Assumed in Woodside Merger	—		20,987		—
End of year	$	330,631	$	851,083	$	1,642,897
Reconciliation of cash, cash equivalents and restricted cash:
Homebuilding:
Cash and cash equivalents	$	258,411	$	617,644	$	1,475,964
Restricted cash	1		1,222		4,094
Financial Services:
Cash and cash equivalents	72,219		232,217		162,839
Total cash, cash equivalents and restricted cash	$	330,631	$	851,083	$	1,642,897

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

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1. Summary of Significant Accounting Policies

Principles of Consolidation. The Consolidated Financial Statements of Sekisui House U.S., Inc. ("SHUS," “the Company," “we,” “us,” or “our” which refers to Sekisui House U.S., Inc. and its subsidiaries) include the accounts of SHUS and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year balances have been reclassified to conform to the current year’s presentation.

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” or "SHRH"), 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” or "SHL"), providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). See further information in Note 22, Merger.

Woodside Merger. On December 1, 2025, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiary Woodside Group, LLC (“Woodside”). Woodside is a homebuilding company with operations in Arizona, California, Idaho, Nevada and Utah.

Immediately prior to the contribution, the sole stockholder of the Company was also the sole stockholder of Woodside. As a result of the common ownership, upon closing of the transaction, the acquisition was considered a common-control transaction and was outside the scope of the business combination guidance in Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805-50"). The entities are deemed to be under common control as of April 19, 2024, which was the date that the sole stockholder acquired control of the Company and, therefore, held control over both companies. The consolidated financial statements incorporate Woodside financial results and financial information beginning on April 19, 2024. See further information in Note 23, Common Control Merger.

Description of Business. We have homebuilding operations in Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Tennessee, Texas, Utah, Virginia and Washington. The primary functions of our homebuilding operations include land acquisition and development, home construction, purchasing, marketing, merchandising, sales and customer service. We build and sell primarily single-family detached homes, which are designed and built to meet local customer preferences. We are the general contractor for all of our projects and retain subcontractors for site development and home construction.

Our financial services operations consist of HomeAmerican Mortgage Corporation (“HomeAmerican”), which originates mortgage loans, primarily for our homebuyers, American Home Insurance Agency, Inc. (“American Home Insurance”), which offers third-party insurance products to our homebuyers, and American Home Title and Escrow Company (“American Home Title”), which provides title agency services to the Company and our homebuyers in Colorado, Florida, Maryland, Nevada and Virginia. The financial services operations also include StarAmerican Insurance Ltd. ("StarAmerican"), which provides insurance coverage to the majority of our homebuilding subsidiaries, which includes certain assumed liabilities of subcontractors under the Company's wrap program.

Presentation. Our balance sheet presentation is unclassified due to the fact that certain assets and liabilities have both short and long-term characteristics.

Use of Accounting Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents. The Company periodically invests funds in highly liquid investments with an original maturity of three months or less, such as U.S. government securities, commercial bank deposits, commercial paper, certificates of deposit, money market funds and time deposits, which are included in cash and cash equivalents in the consolidated balance sheets and consolidated statements of cash flows.

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all changes in fair value initially recorded through other comprehensive income. Debt securities are reviewed on a regular basis for impairment. We had no marketable securities at December 31, 2025 and 2024.

Restricted Cash. We receive cash earnest money deposits from our customers who enter into home sale contracts. In certain states we are restricted from using such deposits for general purposes, unless we take measures to release state imposed restrictions on such deposits received from homebuyers, which may include posting blanket surety bonds. We had $0.0 million and $1.2 million in restricted cash related to homebuyer deposits at December 31, 2025 and 2024, respectively.

Trade and Other Receivables. Trade and other receivables primarily includes home sale receivables, which reflects cash to be received from title companies or outside brokers associated with closed homes. Generally, we will receive cash from title companies and outside brokers within a few days of the home being closed. At December 31, 2025 and 2024, receivables from contracts with customers were $5.3 million and $13.6 million, respectively, and are included in trade and other receivables on the accompanying consolidated balance sheets.

Mortgage Loans Held-for-Sale, net. Mortgage loans held-for-sale are recorded at fair value based on quoted market prices and estimated market prices received from a third-party. Using fair value allows an offset of the changes in fair values of the mortgage loans and the derivative and financial instruments used to hedge them without having to comply with the requirements for hedge accounting.

Inventories. Our inventories are primarily associated with communities where we intend to construct and sell homes, including models and unsold homes. Inventories includes the costs of direct land acquisition, land development and construction, capitalized interest, real estate taxes and indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs.

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:

•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 calculating the present value of the estimated future cash flows using discount rates, which are Level 3 inputs (see Note 6, Fair Value Measurements, in the notes to the financial statements for definitions of fair value 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.

If land is classified as held for sale, in accordance with ASC 360, we measure it 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 3 input (see Note 6, Fair Value Measurements, for definitions of fair value inputs). If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions

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and market analysis studies. 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.

Costs Related to Sales Facilities. Costs related to interior and exterior upgrades to the home that will be sold as part of the home, such as wall treatments and additional upgraded landscaping, are recorded as inventories. Costs to furnish and ready the model home or on-site sales facility that will not be sold as part of the model home, such as furniture, construction of the sales facility parking lot or construction of the sales center, are capitalized as property and equipment, net. Other costs incurred related to the marketing of the community and readying the model home for sale are expensed as incurred.

Property and Equipment, net. Property and equipment is carried at cost less accumulated depreciation. For property and equipment related to on-site sales facilities, depreciation is recorded using the units of production method as homes are delivered. For all other property and equipment, depreciation is recorded using a straight-line method over the estimated useful lives of the related assets, which range from 2 to 16 years. Depreciation and amortization expense for property and equipment was $36.3 million, $38.0 million and $23.9 million for the years ended December 31, 2025, 2024 and 2023, respectively, which is recorded in selling, general and administrative expenses in the homebuilding or expenses in the financial services sections of our consolidated statements of operations and comprehensive income.

The following table sets forth the cost and carrying value of our homebuilding property and equipment by major asset category.


	Cost		Accumulated Depreciation and Amortization		Carrying Value
December 31, 2025:	(Dollars in thousands)
Sales facilities	$	114,042	$	(63,840)	$	50,202
Aircraft	23,346		(1,799)		21,547
Computer software and equipment	38,213		(28,220)		9,993
Leasehold improvements	15,803		(12,417)		3,386
Other	8,557		(6,599)		1,958
Total	$	199,961	$	(112,875)	$	87,086

December 31, 2024:
Sales facilities	$	106,351	$	(64,971)	$	41,380
Aircraft	54,576		(16,405)		38,171
Computer software and equipment	36,608		(26,997)		9,611
Leasehold improvements	15,237		(10,598)		4,639
Other	9,630		(7,205)		2,425
Total	$	222,402	$	(126,176)	$	96,226

Deferred Tax Assets, net. Deferred income taxes reflect the net tax effects of temporary differences between (1) the carrying amounts of the assets and liabilities for financial reporting purposes and (2) the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using current enacted tax rates in effect in the years in which those temporary differences are expected to reverse. A valuation allowance is recorded against a deferred tax asset if, based on the weight of available evidence, it is more-likely-than-not (a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized.

Variable Interest Entities. In accordance with ASC Topic 810, Consolidation (“ASC 810”), we analyze our land option contracts and other contractual arrangements to determine whether the corresponding land sellers are variable interest entities (“VIEs”) and, if so, whether we are the primary beneficiary. Although we do not have legal title to the optioned land, ASC 810 requires a company to consolidate a VIE if the company is determined to be the primary beneficiary. In determining whether we are the primary beneficiary, we consider, among other things, whether we have the power to direct the activities of the VIE that most significantly impact VIE’s economic performance, including, but not limited to, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE. We also consider whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. We have concluded that, as of December 31, 2025 and 2024, we were not the primary beneficiary of any VIEs from which we are purchasing land under land option contracts.

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Investments in Unconsolidated Entities. The equity method of accounting is used for investments in unconsolidated entities over which the Company has significant influence. The Company recognizes its proportionate share of earnings and losses of the unconsolidated entities under the equity method of accounting, which is recorded in interest and other income in the homebuilding section of our consolidated statements of operations and comprehensive income. Investments in unconsolidated entities that do not meet the requirements for equity method accounting are accounted for at cost. All investments in unconsolidated entities are included in investment in unconsolidated entities on the accompanying consolidated balance sheets.

The timing of cash flows related to the unconsolidated entities and any related financing agreements varies by entity. If additional capital contributions are required and approved by the unconsolidated entity, the Company would need to contribute its pro rata portion of those capital needs in order to not dilute the Company's ownership in the unconsolidated entity. While future capital contributions may be required, the Company believes the total amount of such contributions will be limited. The Company's maximum financial exposure related to the unconsolidated entities won't exceed the combined investment and limited recourse guaranty totals.

Investment in unconsolidated entities accounted for under the cost method totaled $3.0 million, as of December 31, 2025 and 2024. The Company has two investments in unconsolidated entities accounted for under the equity method, totaling $4.7 million and $40.9 million as of December 31, 2025 and 2024, respectively. The Company's ownership interest within these entities ranged from 20% to 35%.

Investments in unconsolidated entities are tested for recoverability in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures ("ASC 323"). If the loss in the value of an investment is other than temporary, the investment is written down to fair value. As of December 31, 2025 and 2024, all investments in unconsolidated entities were deemed recoverable.

The Company performs ongoing VIE reassessments under ASC 810 to determine whether the Company is the primary beneficiary of any of its investments in unconsolidated entities. The Company has determined that it is not the primary beneficiary of its investments. Therefore, no unconsolidated entities were required to be consolidated as of December 31, 2025 and 2024.

Based on our analysis, we have concluded that as of December 31, 2025 and 2024, our goodwill was not impaired.

Liability for Unrecognized Tax Benefits. ASC Topic 740, Income Taxes, provides guidance for the recognition and measurement in financial statements of uncertain tax positions taken or expected to be taken in a tax return.

The evaluation of a tax position is a two-step process, the first step being recognition. We determine whether it is more-likely-than-not that a tax position will be sustained upon tax examination, including resolution of any related appeals or litigation, based on the technical merits of the position. The technical merits of a tax position derive from both statutory and judicial authority (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements.

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The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority. Once the gross unrecognized tax benefit is determined, we also accrue for any interest and penalties, as well as any offsets expected from resultant amendments to federal or state tax returns. We record the aggregate effect of these items in income tax expense in the consolidated statements of operations and comprehensive income. To the extent this tax position would be offset against a similar deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed, the liability is treated as a reduction to the related deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. Otherwise, we record the corresponding liability in accrued and other liabilities in our consolidated balance sheets.

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.

Warranty payments are recorded against the warranty accrual. Additional reserves may be established for known, unusual warranty-related expenditures not covered through the independent warranty accrual analysis performed by us. Warranty payments incurred for an individual house may differ from the related reserve established for the home at the time it was closed. The actual disbursements for warranty claims are evaluated in the aggregate to determine if an adjustment to the historical warranty accrual should be recorded.

We assess the reasonableness and adequacy of the reserve and the per-unit reserve amount originally included in home cost of sales, as well as the timing of the reversal of any excess reserve on a quarterly basis, using historical payment data and other relevant information. 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. See Note 11, Warranty Accrual, to the consolidated financial statements.

Self-Insurance Reserves for Construction Defect Claims. 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 either third-party insurance policies or insurance policies with StarAmerican and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies are based on actuarial studies that include known facts similar to those established for our insurance reserves. See Note 12, Insurance and Construction Defect Claim Reserves, to the consolidated financial statements.

Litigation Reserves. We and certain of our subsidiaries have been named as defendants in various cases. We reserve for estimated exposure with respect to these cases based upon currently available information on each case. See Note 16, Commitments and Contingencies, to the consolidated financial statements.

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subject to the underlying mortgage loans being funded and closed. These instruments are the only significant derivative and financial instruments utilized by SHUS to hedge against fluctuations in interest rates. 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. For further discussion of our policies regarding interest rate lock commitments, see our “Revenue Recognition for HomeAmerican” accounting policy section below. There are no credit-risk related contingent features within our derivative agreements, and counterparty risk is considered minimal.

Revenue Recognition for Homebuilding Segments. We recognize home sale revenues from home deliveries when we have satisfied the performance obligations within the sales agreement, which is generally when title to and possession of the home are transferred to the buyer at the home closing date. Revenue from a home delivery includes the base sales price and any purchased options and upgrades and is reduced for any sales price incentives.

Revenue expected to be recognized in any future year related to remaining performance obligations (if any) and contract liabilities expected to be recognized as revenue, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material.

Land and lot revenue for Homebuilding Segments. Revenue and cost of sales from land sales are recognized when title to the property has been transferred to the buyer, adequate consideration has been received, and the Company has no significant future performance obligations. Effective December 1, 2025, after the Woodside Merger, the Company aligned its accounting policy with Woodside, considering land sale revenues as an output of the entity's ordinary activities prospectively under ASC 606, Revenue from Contracts with Customers. Previous to December 1, 2025, land sale revenues and land cost of sales are included in other income (expense) within the consolidated statement of operations and comprehensive income. Total land sale revenues of $11.0 million and $18.2 million and land cost of sales of $11.4 million and $16.5 million were recognized in other income (expense) during the years ended December 31, 2025 and 2023, respectively. There were no land sales in the year ended December 31, 2024.

Other revenue for Homebuilding Segments. Other revenue primarily consists of project management fees earned by the Company for construction management services provided to customers and profit participation agreements contained in some land and lot sale contracts. Revenue from project management arrangements is recognized on either a completion of milestones basis or as costs are incurred by the Company.

Revenue Recognition for HomeAmerican. Revenues recorded by HomeAmerican primarily reflect (1) origination fees and (2) the corresponding sale, or expected future sale, of a loan, which will include the estimated earnings from either the release or retention of a loan’s servicing rights. Origination fees are recognized when a loan is originated. When an interest rate lock commitment is made to a customer, we record the expected gain on sale of the mortgage, plus the estimated earnings from the expected sale of the associated servicing rights, adjusted for a pull-through percentage (which is defined as the likelihood that an interest rate lock commitment will be originated), as revenue. As the interest rate lock commitment gets closer to being originated, the expected gain on the sale of that loan plus its servicing rights is updated to reflect current market value and the increase or decrease in the fair value of that interest rate lock commitment is recorded through revenues. At the same time, the expected pull-through percentage of the interest rate lock commitment to be originated is updated based upon current market conditions and, if there has been a change, revenues are adjusted as necessary. After origination, our mortgage loans, generally including their servicing rights, are sold to third-party purchasers in accordance with sale agreements entered into by us with a third-party purchaser of the loans. We make representations and warranties with respect to the status of loans transferred in the sale agreements. The sale agreements generally include statements acknowledging the transfer of the loans is intended by both parties to constitute a sale. Sale of a mortgage loan has occurred when the following criteria, among others, have been met: (1) fair consideration has been paid for transfer of the loan by a third party in an arms-length transaction, (2) all the usual risks and rewards of ownership that are in substance a sale have been transferred by us to the third party purchaser; and (3) we do not have a substantial continuing involvement with the mortgage loan.

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We measure mortgage loans held-for-sale at fair value with the changes in fair value being reported in earnings at each reporting date. Net gains on the sale of mortgage loans are included as a component of revenues in the financial services section of the consolidated statements of operations and comprehensive income.

Home Cost of Sales. Home cost of sales includes the specific construction costs of each home and all applicable land acquisition, land development and related costs (both incurred and estimated to be incurred), warranty costs and finance and closing costs. We use the specific identification method for the purpose of accumulating home construction costs and allocate costs to each lot within a subdivision associated with land acquisition and land development based upon relative fair value of the lots prior to home construction. Lots within a subdivision typically have comparable fair values, and, as such, we generally allocate costs equally to each lot within a subdivision. We record all home cost of sales when a home is closed and performance obligations have been completed on a house-by-house basis.

When a home is closed, we may not have paid for all costs necessary to complete the construction of the home. This includes (1) construction that has been completed on a house but has not yet been billed or (2) work still to be performed on a home (such as limited punch-list items or certain outdoor features). For each of these items, we create an estimate of the total expected costs to be incurred and, with the exclusion of outdoor features, the estimated total costs for those items, less any amounts paid to date, are included in home cost of sales. Actual results could differ from such estimates. For incomplete outdoor features, we will defer the revenue and any cost of sales on this separate stand-alone deliverable until complete.

Stock-Based Compensation. ASC Topic 718, Compensation—Stock Compensation (“ASC 718”) requires that share-based compensation expense be measured and recognized at an amount equal to the fair value of share-based payments granted under compensation arrangements. Determining the appropriate fair value model and calculating the fair value of stock option awards requires judgment, including estimating stock price volatility, annual forfeiture rates and the expected life of an award. For stock option awards granted with just service and/or performance conditions, we estimate the fair value using a Black-Scholes option pricing model. For any stock option awards granted that contain a market condition, we estimate the fair value using a Monte Carlo simulation model. Both the Black-Scholes option pricing model and Monte Carlo simulation utilize the following inputs to calculate the estimated fair value of stock options: (1) closing price of our common stock on the measurement date (generally the date of grant); (2) exercise price; (3) expected stock option life; (4) expected volatility; (5) risk-free interest rate; and (6) expected dividend yield rate. The expected life of employee stock options represents the period for which the stock options are expected to remain outstanding and is derived primarily from historical exercise patterns. The expected volatility is determined based on our review of the implied volatility that is derived from the price of exchange traded options of the Company. The risk-free interest rate assumption is determined based upon observed interest rates appropriate for the expected term of our employee stock options. The expected dividend yield assumption is based on our historical dividend payouts. We determine the estimated fair value of the stock option awards on the date they are granted. The fair values recorded for previously granted stock option awards are not adjusted as subsequent changes in the foregoing assumptions occur; for example, an increase or decrease in the price of our common stock. However, changes in the foregoing inputs, particularly the price of our common stock, expected stock option life and expected volatility, significantly change the estimated fair value of future grants of stock options.

An annual forfeiture rate is estimated at the time of grant, and revised if necessary, in subsequent periods if the actual forfeiture rate differs from our estimate.

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2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

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 adopted this amendment in the fourth quarter of 2025. 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 13 (Income Taxes) was updated to comply with the new required disclosures.

Recent Accounting Pronouncements Not Yet Adopted

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.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("ASU-2025-05"), which allows entities to use the practical expedient to estimate expected credit losses. ASU 2025-05 will be effective for our fiscal year ending December 31, 2026 and interim reporting periods within this annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-05 may have on our consolidated financial statements and disclosures.

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3. Supplemental Income Statement and Cash Flow Disclosure

The table below details homebuilding interest and other income and financial services other income (expense), net:


	Year Ended December 31,
	2025		2024		2023
Homebuilding	(Dollars in thousands)
Interest and other income
Interest income	$	14,967	$	51,431	$	70,458
Other income	2,050		4,101		3,109
Total	$	17,017	$	55,532	$	73,567
Financial Services
Other income, net
Interest income	$	13,516	$	19,957	$	16,345
Loss on sale of assets	(17)		—		—
Total	$	13,499	$	19,957	$	16,345

The table below sets forth supplemental disclosures of cash flow information and non-cash investing and financing activities.


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Cash paid for:
Interest, net of interest capitalized	$	3,682	$	3,543	$	917
Income taxes	$	39,803	$	79,757	$	161,454
Non-cash activities:
Transfer of notes payable to Parent in exchange for contributions	$	329,967	$	—	$	—
Transfer of related party note to Parent in exchange for contributions	$	99,900	$	—	$	—
Land distribution received from investment in unconsolidated entities	$	39,201	$	—	$	—

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4. 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 CODM's 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 (Florida, Maryland, Tennessee and Virginia)

Our financial services business consists of the following operating segments: (1) HomeAmerican; (2) StarAmerican; (3) American Home Insurance; and (4) American Home Title. 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) 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:

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	Year Ended December 31, 2025
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Home sale revenues	$	2,729,618	$	1,585,697	$	603,039	$	—	$	—	$	—	$	4,918,354
Land sale revenues	$	69,091	$	1,356	$	—	$	—	$	—	$	—	$	70,447
Other revenues	$	110	$	—	$	—	$	—	$	—	$	—	$	110
Revenues	$	—	$	—	$	—	$	—	$	54,831	$	54,631	$	109,462
Home cost of sales	$	(2,284,139)	$	(1,320,409)	$	(522,608)	$	—	$	—	$	—	$	(4,127,156)
Inventory impairments	$	(49,953)	$	(11,425)	$	(16,275)	$	—	$	—	$	—	$	(77,653)
Land cost of sales	$	(47,869)	$	(1,090)	$	—	$	—	$	—	$	—	$	(48,959)
Other cost of sales	$	(21)	$	—	$	—	$	—	$	—	$	—	$	(21)
Selling, general and administrative expenses	$	(341,128)	$	(154,299)	$	(83,441)	$	(23,435)	$	—	$	—	$	(602,303)
Transaction costs	$	—	$	—	$	—	$	4,827	$	—	$	—	$	4,827
Interest and other income (1)	$	1,100	$	302	$	407	$	15,208	$	—	$	—	$	17,017
Expenses (2)	$	—	$	—	$	—	$	—	$	(45,807)	$	(23,543)	$	(69,350)
Other income (expense), net (3)	$	(5,831)	$	(1,622)	$	(8,278)	$	(3,022)	$	5,430	$	8,069	$	(5,254)
Pretax income	$	70,978	$	98,510	$	(27,156)	$	(6,422)	$	14,454	$	39,157	$	189,521


	Year Ended December 31, 2024
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Home sale revenues	$	3,799,471	$	1,650,330	$	830,060	$	—	$	—	$	—	$	6,279,861
Land sale revenues	$	45,672	$	4,417	$	—	$	—	$	—	$	—	$	50,089
Other revenues	$	6,225	$	—	$	—	$	—	$	—	$	—	$	6,225
Revenues	$	—	$	—	$	—	$	—	$	92,770	$	55,916	$	148,686
Home cost of sales	$	(3,102,957)	$	(1,345,306)	$	(690,730)	$	—	$	—	$	—	$	(5,138,993)
Inventory impairments	$	(13,100)	$	(400)	$	(4,750)	$	—	$	—	$	—	$	(18,250)
Land cost of sales	$	(31,415)	$	(4,276)	$	—	$	—	$	—	$	—	$	(35,691)
Other cost of sales	$	(5,821)	$	—	$	—	$	—	$	—	$	—	$	(5,821)
Selling, general and administrative expenses	$	(345,583)	$	(144,602)	$	(88,185)	$	(165,269)	$	—	$	—	$	(743,639)
Transaction costs	$	—	$	—	$	—	$	(39,361)	$	—	$	—	$	(39,361)
Interest and other income (1)	$	(249)	$	652	$	382	$	54,747	$	—	$	—	$	55,532
Expenses (2)	$	—	$	—	$	—	$	—	$	(54,261)	$	(20,506)	$	(74,767)
Other income (expense), net (3)	$	3,594	$	2,379	$	(1,456)	$	(11,903)	$	7,799	$	12,158	$	12,571
Pretax income	$	355,837	$	163,194	$	45,321	$	(161,786)	$	46,308	$	47,568	$	496,442

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	Year Ended December 31, 2023
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Home sale revenues	$	2,624,373	$	1,267,586	$	628,337	$	—	$	—	$	—	$	4,520,296
Revenues	$	—	$	—	$	—	$	—	$	76,479	$	46,091	$	122,570
Home cost of sales	$	(2,169,721)	$	(1,017,088)	$	(497,678)	$	—	$	—	$	—	$	(3,684,487)
Inventory impairments	$	(19,350)	$	(10,350)	$	—	$	—	$	—	$	—	$	(29,700)
Selling, general and administrative expenses	$	(218,706)	$	(96,345)	$	(66,688)	$	(48,155)	$	—	$	—	$	(429,894)
Interest and other income (1)	$	2,371	$	526	$	307	$	70,363	$	—	$	—	$	73,567
Expenses (2)	$	—	$	—	$	—	$	—	$	(41,555)	$	(21,387)	$	(62,942)
Other income (expense), net (3)	$	593	$	(491)	$	(56)	$	304	$	5,832	$	10,513	$	16,695
Pretax income	$	219,560	$	143,838	$	64,222	$	22,512	$	40,756	$	35,217	$	526,105

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

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

(3) Includes abandoned project costs (Homebuilding) and interest income (Financial Services).

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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.


	December 31,
	2025		2024
	(Dollars in thousands)
Homebuilding Assets
West	$	3,714,822	$	3,300,899
Mountain	1,309,645		1,429,116
East	890,772		593,167
Corporate	485,394		1,022,110
Total homebuilding assets	$	6,400,633	$	6,345,292

Financial Services
Mortgage Operations	$	167,802	$	260,899
Other	70,772		229,952
Total financial services assets	$	238,574	$	490,851

Total assets	$	6,639,207	$	6,836,143

5. Earnings Per Share

The following table shows our basic and diluted EPS calculations:


	Year Ended December 31,
	2023

Numerator
Net income	$	401,005
Less: distributed earnings allocated to participating securities	(895)
Less: undistributed earnings allocated to participating securities	(1,353)
Net income attributable to common stockholders (numerator for basic earnings per share)	398,757
Add back: undistributed earnings allocated to participating securities	1,353
Less: undistributed earnings reallocated to participating securities	(1,329)
Numerator for diluted earnings per share under two-class method	$	398,781

Denominator
Weighted-average common shares outstanding	73,505,508
Add: dilutive effect of stock options	1,347,513
Add: dilutive effect of contingently issuable equity awards	504,944
Denominator for diluted earnings per share under two-class method	75,357,965

Basic Earnings Per Common Share	$	5.42
Diluted Earnings Per Common Share	$	5.29

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Diluted EPS for the year ended December 31, 2023 excluded options to purchase approximately 15,000 of common stock because the effect of their inclusion would be anti-dilutive. Upon completion of the Merger, the Company no longer has public traded securities and therefore did not present EPS for the year ended December 31, 2025 and 2024.

6. Fair Value Measurements

ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and requires 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	December 31, 2025		December 31, 2024
		(Dollars in thousands)



Mortgage loans held-for-sale, net	Level 2	$	142,418	$	236,806

Derivative and financial instruments, net
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 December 31, 2025 and 2024.

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 were not under commitments to sell. At December 31, 2025 and 2024, we had $46.6 million and $95.6 million, respectively, in fair value of mortgage loans held-for-sale that were 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 December 31, 2025 and 2024, we had $95.9 million and $141.2 million, respectively, in fair value 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 a third-party, which is a Level 2 fair value input. The unpaid principal balances of all mortgage loans held for sale at December 31, 2025 and 2024 were $147.1 million and $251.9 million, respectively.

Gains (losses) on sales of 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 years ended December 31, 2025, 2024, and 2023, we recorded loss on mortgage loans held-for-sale, net of $109.3 million, $13.6 million, and $0.8 million, respectively.

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 years ended December 31, 2025, 2024 and 2023, we recorded net gains (losses) on these derivative and financial instruments of $(6.4) million, $7.3 million and $1.0 million, respectively, in revenues in the financial services section of our consolidated statements of operations and comprehensive income. The following table sets forth the notional amounts of derivative and financial instruments at December 31, 2025 and 2024:

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	Notional Values
Financial Instrument	December 31, 2025		December 31, 2024
	(Dollars in thousands)
Interest rate lock commitments	$	75,792	$	57,807
Forward sales of mortgage-backed securities	$	154,500	$	189,000
Mandatory delivery forward loan sale commitments	$	45,183	$	101,557
Best-effort delivery forward loan sale commitments	$	4,628	$	1,306

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, accounts receivable due from parent, prepaids and other assets, accounts payable, related party payables, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value.

Mortgage Repurchase Facilities. The debt associated with our Mortgage Repurchase Facilities (see Note 14, Lines of Credit and Total Debt Obligations, 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 which were provided by multiple sources.


	December 31, 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	$	298,758	$	289,370	$	298,478	$	282,124
$350 million 2.500% senior notes due January 2031, net	348,321		311,117		348,010		303,020
$500 million 6.000% senior notes due January 2043, net	491,858		470,270		491,596		499,370
$350 million 3.966% senior notes due August 2061, net	346,229		228,183		346,183		255,605
Total	$	1,485,166	$	1,298,940	$	1,484,267	$	1,340,119

Notes Payable, net. As a part of the execution of the Woodside Merger on December 1, 2025, the term debt agreement ("Woodside Note") was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for Woodside or SHUS. The notes payable had an estimated fair value of $320.3 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

Related Party Note. As a part of the execution of the Woodside Merger on December 1, 2025, Woodside transferred the Related party note to the Parent effective October 28, 2025, with no continuing obligations existing for Woodside or SHUS. The debt associated with our related party note had an estimated fair value of $97.5 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

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7. Inventories

The table below sets forth, by reportable segment, information relating to our homebuilding inventories.


	December 31, 2025		December 31, 2024
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	1,552,054	$	1,579,950
Mountain	507,158		577,512
East	367,629		387,857
Subtotal	2,426,841		2,545,319
Land and Land Under Development:
West	2,180,481		1,716,644
Mountain	506,150		498,104
East	500,941		158,241
Subtotal	3,187,572		2,372,989
Land Held for Sale
West	46,763		49,434
Mountain	6,867		6,069
East	—		—
Subtotal	53,630		55,503
Total Inventories	$	5,668,043	$	4,973,811

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Inventory impairments recognized by segment for the years ended December 31, 2025, 2024 and 2023 are shown in the table below.


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	29,526	$	5,163	$	3,673
Mountain	2,930		400		1,533
East	9,611		1,922		—
Subtotal	42,067		7,485		5,206
Land and Land Under Development:
West	20,427		7,937		15,677
Mountain	8,495		—		8,817
East	6,664		2,828		—
Subtotal	35,586		10,765		24,494
Total Inventory Impairments	$	77,653	$	18,250	$	29,700

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)
December 31, 2025	7	$	17,400	$	52,862	12	%	—	18%
September 30, 2025	11	45,050		118,895		12	%	—	18%
June 30, 2025	8	15,203		58,512		12	%	—	15%
Total		$	77,653

September 30, 2024	4	$	7,800	$	34,290			15%
June 30, 2024	4	4,550		27,834		12	%	—	15%
March 31, 2024	3	5,900		17,634		12	%	—	18%
Total		$	18,250

December 31, 2023	3	$	2,200	$	13,273	12	%	—	15%
September 30, 2023	2	6,200		17,116		15	%	—	18%
June 30, 2023	1	13,500		17,886				18%
March 31, 2023	1	7,800		13,016				18%
Total		$	29,700

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8. 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.


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Homebuilding interest incurred	$	83,252	$	81,834	$	69,901
Less: Interest capitalized	(83,252)		(81,834)		(69,901)
Homebuilding interest expensed	$	—	$	—	$	—

Interest capitalized, beginning of period	$	72,775	$	64,659	$	59,921
Plus: Assumed in Woodside Merger	—		16,620		—
Plus: Interest capitalized during period	83,252		81,834		69,901
Less: Previously capitalized interest included in home and land cost of sales	(72,136)		(90,338)		(65,163)
Interest capitalized, end of period	$	83,891	$	72,775	$	64,659

9. Homebuilding Prepaids and Other Assets

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


	December 31,
	2025		2024
	(Dollars in thousands)
Operating lease right-of-use asset	$	27,195	$	25,280
Land option deposits	32,903		69,604
Prepaids	40,929		53,085

Deferred debt issuance costs on revolving credit facility, net	9,401		5,943
Other	11,078		10,019
Total	$	121,506	$	163,931

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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.


	December 31,
	2025		2024
	(Dollars in thousands)
Accrued compensation and related expenses	$	78,551	$	115,152
Customer and escrow deposits	14,476		14,434
Warranty accrual (Note 11)	58,138		58,426
Lease liability	28,367		27,406
Land development and home construction accruals	41,162		40,194
Accrued interest	31,178		32,102
Income taxes payable	6,129		—
Self insured retention for construction defect claims (Note 12)	24,673		24,389
Retentions payable	31,309		24,446
Other accrued liabilities	125,981		90,729
Total accrued and other liabilities	$	439,964	$	427,278

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


	December 31,
	2025		2024
	(Dollars in thousands)
Insurance reserves (Note 12)	$	100,835	$	96,851
Accounts payable and other accrued liabilities	17,926		24,816
Total accounts payable and accrued liabilities	$	118,761	$	121,667

11. Warranty Accrual

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the years ended December 31, 2025, 2024 and 2023. The warranty accrual increased due to $6.3 million of warranty adjustments during the year ended December 31, 2024. This adjustment was due to higher general warranty related expenditures. From time to time, we change our warranty accrual rates based on payment trends. Any changes made to those rates did not materially affect our warranty expense or gross margin from home sales for the years ended December 31, 2025, 2024 and 2023.


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Balance at beginning of period	$	58,426	$	44,082	$	46,857
Assumed in Woodside Merger	—		7,456		—
Expense provisions	26,750		31,070		24,122
Cash payments	(27,038)		(30,432)		(26,897)
Adjustments	—		6,250		—
Balance at end of period	$	58,138	$	58,426	$	44,082

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12. Insurance and Construction Defect Claim Reserves

The following table summarizes our self-insured retention for construction defect claims for the years ended December 31, 2025, 2024 and 2023. These reserves are included as a component of accrued and other liabilities in the homebuilding section of the consolidated balance sheets.


	December 31,
	2025		2024		2023
	(Dollars in thousands)
Balance at beginning of period	$	24,389	$	11,433	$	10,466
Assumed in Woodside Merger	—		12,693		—
Expense provisions	1,728		2,332		1,461
Cash payments, net of recoveries	(2,135)		(2,069)		(1,384)
Adjustments	691		—		890
Balance at end of period	$	24,673	$	24,389	$	11,433

The following table summarizes our insurance reserves associated with Allegiant and StarAmerican for the years ended December 31, 2025, 2024 and 2023. All insurance reserves associated with Allegiant were transferred to StarAmerican effective September 30, 2025. These reserves are included as a component of accounts payable and accrued liabilities in the financial services section of the consolidated balance sheet.


	December 31,
	2025		2024		2023
	(Dollars in thousands)
Balance at beginning of period	$	96,851	$	89,326	$	84,108
Expense provisions	13,354		18,620		15,370
Cash payments, net of recoveries	(12,775)		(6,196)		(10,152)
Adjustments	3,405		(4,899)		—
Balance at end of period	$	100,835	$	96,851	$	89,326

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising primarily 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 years ended December 31, 2025, 2024 and 2023, are not necessarily indicative of what future cash payments will be for subsequent periods. The adjustment of $3.4 million to the insurance and defect claim reserve during the year ended December 31, 2025 was due to unfavorable emergence in insurance related claim activity during the current year. The adjustment of ($4.9 million) to the insurance and defect claim reserve during the year ended December 31, 2024 was due to favorable trends in insurance related claim activity during the prior year.

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13. Income Taxes

As a result of the Merger described in Footnote 22, and effective April 20, 2024, the Company is included in the Sekisui House US Holdings ("SHUSH") (parent of SHRH) 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 are addressed in a tax sharing arrangement.

The Company has adopted the provisions under ASC 2023-09 to enhance income tax disclosures prospectively beginning in the fourth quarter of 2025.

Our income before income taxes for the year ended December 31, 2025 consisted of the following:


	Year Ended December 31,
	2025
	(Dollars in thousands)
Domestic income	$	189,521
Foreign income	—
Total income	$	189,521

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Our provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consisted of the following:


	Year Ended December 31,
	2025		2024		2023
	(Dollars in thousands)
Current tax provision:
Federal	$	50,888	$	71,017	$	87,445
State	17,176		19,461		27,247
Total current	68,064		90,478		114,692

Deferred tax provision:
Federal	(22,959)		8,194		8,802
State	(7,456)		3,239		1,606
Total deferred	(30,415)		11,433		10,408
Provision for income taxes	$	37,649	$	101,911	$	125,100

The provision for income taxes differs from the amount that would be computed by applying the statutory federal income tax rate of 21% in 2025, 2024 and 2023 to income before income taxes as a result of the following:


	Year Ended December 31,
	2025			%		2024			2023
	(Dollars in thousands)
U.S. Federal tax at statutory rate	$	39,799		21.0	%	$	104,252		$	110,482
State and local income tax, net of federal (national) income tax effect 1	6,213			3.3	%	12,934			19,523
Foreign tax effects	—			—	%	—			—
Limitation on executive compensation	—			—	%	5,374			6,509
Change in unrecognized tax benefits	1,300			0.7	%	24,694			(263)
Effect of cross-border tax laws	—			—	%	—			—
Stock based compensation windfall	—			—	%	(28,510)			(6,701)
Tax credits	(10,522)			(5.6)	%	(19,821)			(8,938)
Merger related benefit payments	—			—	%	(9,342)			—
Effect of changes in tax laws or rates enacted in the current period	(1,231)			(0.6)	%	969			432
Transaction costs	—			—	%	4,755			—
Change in valuation allowance	45			—	%	221			1,524
Nontaxable or nondeductible items:
Adjustment to prior period provision	2,249			1.2	%	—			—
Other	(204)			(0.1)	%	6,385			2,532
Provision for income taxes	$	37,649		19.9	%	$	101,911		$	125,100

Effective tax rate	19.9		%			20.5		%	23.8		%

1 In 2025, no aggregated state taxes made up the majority (greater than 50%) of the tax effect in this category.

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to the net deferred tax asset are as follows:


	December 31,
	2025		2024
	(Dollars in thousands)
Deferred tax assets:
State net operating loss carryforwards	$	4,572	$	3,996

Warranty, litigation and other reserves	24,258		21,102
Accrued compensation	13,391		5,165
Asset impairment charges	19,150		10,763
Inventory, additional net costs capitalized for tax purposes	32,101		17,496
Investment in unconsolidated and consolidated entities	4,063		6,026
Other, net	2,693		2,389
Total deferred tax assets	100,228		66,937
Valuation allowance	(3,987)		(3,996)
Total deferred tax assets, net of valuation allowance	96,241		62,941

Deferred tax liabilities:
Property, equipment and other assets	19,572		18,161
Deferral of profit on home sales	3,264		3,344
State deferral	2,456		3,102
Other, net	7,549		5,349
Total deferred tax liabilities	32,841		29,956
Net deferred tax asset	$	63,400	$	32,985

At December 31, 2025, we had no federal net operating loss or alternative minimum tax carryforwards. However, we had $4.6 million in tax-effected state net operating loss carryforwards. The state operating loss carryforwards, if unused, begin expiring in 2028.

At December 31, 2025, we had a valuation allowance of $4.0 million, no change from the prior year. The valuation allowance is related to various state net operating loss carryforwards where realization is uncertain at this time due to the limited carryforward periods coupled with minimal activity that exists in certain states.

At December 31, 2025, net cash paid (refunds received) for income taxes consisted of the following:


	Year Ended December 31,
	2025
	(Dollars in thousands)
Federal	$	29,271
Aggregated state and local jurisdictions	777
Disaggregated state and local jurisdictions
Arizona	1,439
California	6,332
Colorado	1,166
Florida	930
Utah	691
Virginia	(803)
Net cash paid for income taxes	$	39,803

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At December 31, 2025 and 2024, our total liability for uncertain tax positions was $25.0 million and $25.0 million, respectively. The following table summarizes activity for the gross unrecognized tax benefit component of our total liability for uncertain tax positions for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Gross unrecognized tax benefits at beginning of year	$	25,027	$	405
Increases related to prior year tax positions	91		45
Increases related to current year tax positions	—		24,652

Lapse of applicable statute of limitations	(121)		(75)
Gross unrecognized tax benefits at end of year	$	24,997	$	25,027

During the year ended December 31, 2025, we experienced a decrease of $0.1 million in the uncertain tax positions for tax reserves related to the Merger and state tax filings. At December 31, 2025 and 2024, there was $25.0 million and $25.0 million, respectively, of unrecognized tax benefits that if recognized, would reduce our effective tax rate.

The interest and penalties, net of federal benefit for the years ended December 31, 2025, 2024 and 2023 was $1.3 million, $(0.1) million and $(0.1) million, respectively, and are included in provision for income taxes in the consolidated statements of operations and comprehensive income. We are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are subject to U.S. federal income tax examination for calendar tax years ending 2022 through 2025. Additionally, we are subject to various state income tax examinations for the 2021 through 2025 calendar tax years.

14. Lines of Credit and Total Debt Obligations

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believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of December 31, 2025.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At December 31, 2025 and 2024, there were $35.5 million and $43.6 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. We had $0.0 million and $0.0 million outstanding under the Revolving Credit Facility as of December 31, 2025 and 2024, respectively. As of December 31, 2025, availability under the Revolving Credit Facility was approximately $1.36 billion.

Mortgage Repurchase Facilities. HomeAmerican enters into Mortgage Repurchase Facilities with various lenders, which provide liquidity by providing for the sale of eligible mortgage loans with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. HomeAmerican is party to mortgage repurchase facilities has entered into Mortgage Repurchase Facilities with two lenders, which provide HomeAmerican with committed repurchase facilities of up to an aggregate of $300.0 million as of December 31, 2025 (subject to increase by up to $150.0 million under certain conditions with respect to one of the lenders).

Woodside Revolving Line of Credit and reimbursement Agreement. On April 13, 2018, Woodside entered into an unsecured revolving credit agreement (“Woodside Line of Credit”) with Mizuho Bank, Ltd., which was used for general corporate purposes. The Woodside Line of Credit was amended on June 30, 2023. The commitment within the agreement was up to $250.0 million (the "Commitment"). The Woodside Line of Credit matured on June 30, 2024, and was not renewed by Woodside.

Borrowings under the Woodside Line of Credit bore interest at a floating rate that was based on the lender's calculated bank rates plus a spread, or the Fed Funds rate plus a spread plus a 0.40% margin per annum. The Woodside Line of Credit also provided for customary fees including commitment fees payable of 0.15% per annum.

The Woodside Line of Credit was fully and unconditionally guaranteed by SHL. The facility contained various representations, warranties and covenants that we believe were customary for agreements of this type. The Woodside Line of Credit also contained 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 and breach of any financial covenant. Upon the occurrence and during the continuance of any event of default, the bank had the ability to accelerate the payment of the obligations thereunder and exercise various other customary default remedies.

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, with the termination date of the guarantees being upon the maturity of the senior notes. The guarantors would be required to perform upon instances of default.. We believe that we are in compliance with the representations, warranties and covenants in the senior note indentures.

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Our debt obligations at December 31, 2025 and 2024, net of any unamortized debt issuance costs or discount, were as follows:


	December 31,
	2025		2024
	(Dollars in thousands)
$300 million 3.850% senior notes due January 2030, net	$	298,758	$	298,478
$350 million 2.500% senior notes due January 2031, net	348,321		348,010
$500 million 6.000% senior notes due January 2043, net	491,858		491,596
$350 million 3.966% senior notes due August 2061, net	346,229		346,183
Total	$	1,485,166	$	1,484,267

Notes payable, net. Woodside had a term debt agreement ("Woodside Note") with Sumitomo Mitsui Banking Corporation ("SMBC") for $330.0 million at an interest rate of 2.09%. The Woodside Note was guaranteed by SHL. As of December 31, 2024, the outstanding balance of principal and interest was $330.0 million. The Woodside Note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

The Company had a promissory note with Surland Companies, LLC for $31.0 million with no interest until the maturity date, on December 31, 2025. After the maturity date, the note bears interest an an annual rate of 10%. This promissory note is in connection with a land sale purchase and related deferred purchase price. Effective December 31, 2025 the Company paid the $31.0 million due under the promissory note with Surland Companies, LLC.

Intercompany unsecured revolving credit agreement. Woodside had an unsecured revolving credit agreement with Parent with a commitment of $250.0 million. The agreement was effective November 20, 2024, had a termination date of June 30, 2026. and was automatically extended for one-year periods unless written notice of termination was provided by either party as of the end of the annual period. Woodside had no outstanding balance as of December 31, 2024.

Borrowings bore interest at a floating rate equal to the weighted average of the total interest rate and fees incurred by Parent under the agreements with the Parent's third-party banks, and included any guaranty fee incurred by the Parent under agreements with SHL. The agreement also provided for customary fees including commitment fees of the weighted average of the total commitment fees imposed by Parent's third-party banks per annum.

The agreement contained various representations, warranties and covenants that we believe are customary for agreements of this type. The agreement also contained customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, bankruptcy and insolvency proceedings. Upon the occurrence and during the continuance of any event of default, the Parent had the ability to accelerate the payment of the obligations thereunder and exercise various other customary default remedies. As a part of the execution of the Woodside Merger on December 1, 2025, the intercompany unsecured revolving credit agreement was terminated on November 30, 2025.

Related party note. In June 2023, Woodside borrowed $99.9 million from the Parent under the terms of an unsecured intercompany loan agreement. The unpaid principal amount of the loan bore interest at a rate of 6.21% per annum. Interest payments on the loan were due the last business day of each May and November through loan maturity. Principal payments throughout the term of the loan were allowed but not required. Outstanding principal and interest was due and payable upon maturity on June 7, 2030. As of December 31, 2024, the full $99.9 million related party note payable remained outstanding. The $99.9 million related party note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

15. Related Party Transactions

In June 2023, Woodside borrowed $99.9 million from Sekisui House US Holdings, LLC under the terms of an unsecured intercompany loan agreement. The unpaid principal amount of the loan bore interest at a rate of 6.21% per annum. Interest payments on the loan were due the last business day of each May and November through loan maturity. Principal payments throughout the term of the loan were allowed but not required. Outstanding principal and interest was due and payable upon maturity on June 7, 2030. As of December 31, 2024, the full $99.9 million related party note payable remained outstanding. The $99.9 million related party note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

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SHL was the guarantor of the Woodside Note. SHL charged Woodside a guarantee fee of 0.48% per annum of the aggregate loan outstanding. Woodside accounted for guarantee fees as a component of interest. The Woodside Note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for Woodside or SHUS.

Woodside had an unsecured revolving credit agreement with Parent with a commitment of $250.0 million. The agreement was effective November 20, 2024, had a termination date of June 30, 2026, and was automatically extended for one-year periods unless written notice of termination was provided by either party as of the end of the annual period. Woodside had no outstanding balance as of December 31, 2024.

Borrowings bore interest at a floating rate equal to the weighted average of the total interest rate and fees incurred by Parent under the agreements with the Parent's third-party banks, and including any guaranty fee incurred by the Parent under agreements with SHL. The agreement also provided for customary fees including commitment fees of the weighted average of the total commitment fees imposed by Parent's third-party banks per annum.

The following table summarizes interest incurred, capitalized to inventory, and expensed as a result of the related party note and intercompany unsecured revolving credit agreement and intercompany guarantee fees:


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Capitalized interest, beginning of year	$	6,593	$	—
Assumed in Woodside Merger	—		5,305
Interest incurred	6,912		6,449
Interest within cost of sales	(5,719)		(5,160)
Capitalized interest, end of year	$	7,786	$	6,593

SHRH and affiliates are considered a related party for the period subsequent to the Merger closing on April 19, 2024. As of December 31, 2025, the Company had $45.5 million of accounts receivable due from Parent, which was largely related to Woodside receivables associated with cash sweep accounts. As of December 31, 2024, the Company had accounts receivable due from Parent of $248.5 million, which is largely related to Woodside receivables associated with cash sweep accounts, payments in connection with the Merger funded by the Company, and other various transactions with the Parent that are included within Accounts receivable due from Parent in the consolidated balance sheets. As of December 31, 2025 and 2024, the Company had $1.6 million and $2.5 million, respectively, of related party payables related to interest payable under the related party note, guarantee fees to SHL, and other various payables with Parent and affiliates. During the years ended December 31, 2025 and 2024, Woodside recognized $7.1 million and $1.0 million of interest income in association with the cash pooling arrangement with Parent within interest and other income on the consolidated statement of operations and comprehensive income.

The Company is party to a trademark license agreement with Parent and its affiliates pursuant to which it pays a royalty fee for use of these trademarks. During the years ended December 31, 2025 and 2024, the Company recognized $2.4 million and $0.6 million of royalty fees within selling, general and administrative expenses on the consolidated statement of operations and comprehensive income.

During the years ended December 31, 2025 and 2024, the Company purchased $4.4 million and $1.1 million, respectively, of construction materials, such as framing materials, exterior wall panels and other related materials, from Parent and some of its affiliates for use by the Company's homebuilding subsidiaries. These amounts are recognized within inventories on the consolidated balance sheets when paid and within home cost of sales on the consolidated statement of operations and comprehensive income when the homes close.

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Within Inventories in the consolidated balance sheets is $10.5 million and $30.5 million of land purchased by the Company from affiliates of SHRH as of December 31, 2025 and 2024. The Company sold $8.4 million of land to affiliates of SHRH for no gain or loss during the year ended December 31, 2025. The Company had no land sales to affiliates of SHRH during the year ended December 31, 2024.

Woodside enters into forward commitment agreements with an affiliate of the Parent to lock-in a commitment to facilitate financing offerings for their home closings, amounting to $6.9 million and $0.6 million during the year ended December 31, 2025 and 2024, respectively, of which $6.8 million and $0.6 million was recognized in home sale revenues of the consolidated statement of operations and comprehensive income and $0.1 million and $0.2 million in prepaids and other assets in the consolidated balance sheet as of December 31, 2025 and 2024, respectively.

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16. Commitments and Contingencies

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 December 31, 2025, we had outstanding surety bonds and letters of credit totaling $677.5 million and $169.1 million, respectively, including $133.6 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $343.5 million and $136.2 million, respectively. All letters of credit as of December 31, 2025, excluding those issued by HomeAmerican, were either issued under our unsecured Revolving Credit Facility (see Note 14, Lines of Credit and Total Debt Obligations, for further discussion of the Revolving Credit Facility) or stand alone bi-lateral Letter of Credit Agreement. 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 Reserves. Because of 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. At December 31, 2025 and 2024, we had $37.5 million and $10.4 million, respectively, of legal accruals recorded in accrued and other liabilities in the consolidated balance sheets.

On November 13, 2024, Building Trades Pension Fund of Western Pennsylvania, acting on behalf of itself and a putative class of similarly situated stockholders of M.D.C. Holdings, Inc. (“MDC”), filed a class action complaint in the Court of Chancery of the State of Delaware against Larry A. Mizel (“Mr. Mizel”), David D. Mandarich (“Mr. Mandarich”), and SHRH. The complaint alleges, among other things, that, in connection with the acquisition of MDC by SHRH and its affiliates, Mr. Mizel and Mr. Mandarich breached their fiduciary duty to MDC and that SHRH aided and abetted such breach. Pursuant to indemnification agreements, SHUS has an obligation to indemnify Mr. Mizel and Mr. Mandarich in this matter. SHUS, in connection with such indemnification obligations, plans to vigorously defend against these allegations by the putative class plaintiffs. On or about March 3, 2025, all claims against SHRH were dismissed without prejudice. On or about January 15, 2026, a term sheet was executed by all parties to settle the Building Trades Pension Fund of Western Pennsylvania class action complaint for $25.0 million, which is anticipated to be fully covered by the Company's third-party insurance providers.

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 December 31, 2025, we had letters of credit and cash deposits totaling $15.5 million and $26.8 million, respectively, at risk associated with options to purchase 6,488 lots.

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17. Concentration of Third-Party Mortgage Purchasers

The following table sets forth the percent of mortgage loans sold by HomeAmerican to its primary third party purchasers during 2025, 2024 and 2023. No other third parties purchased greater than 10 percent of our mortgage loans during 2025, 2024 or 2023.


	Year Ended December 31,
	2025		2024		2023
Freddie Mac	8	%	8	%	23	%
PennyMac Loan Services, LLC	25	%	34	%	16	%
PHH Mortgage	19	%	24	%	16	%
Ginnie Mae	5	%	3	%	11	%
Mr. Cooper	21	%	2	%	—	%
Flagstar Bank	—	%	10	%	9	%

18. Employee Benefit Plans

Employee Equity Incentive Plans. On April 27, 2011, our shareholders approved the M.D.C Holdings, Inc. 2011 Equity Incentive Plan (the “2011 Equity Incentive Plan”) which provided for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other equity awards to employees of the Company. Stock options granted under the 2011 Equity Incentive Plan had an exercise price that is at least equal to the fair market value of our common stock on the date the stock option is granted, generally vested in periods up to five years and expired ten years after the date of grant. On April 27, 2021, the 2011 Equity Incentive Plan terminated and awards outstanding at the time the plan terminated remain outstanding in accordance with the terms and conditions of the plan and award agreement. There are no remaining shares of MDC common stock reserved for awards under the 2011 Equity Incentive Plan as of December 31, 2025 and 2024.

On April 26, 2021, our shareholders approved the M.D.C Holdings, Inc. 2021 Equity Incentive Plan (the "2021 Equity Incentive Plan") which provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based and cash awards to employees of the Company. Stock options granted under the 2021 Equity Incentive Plan have an exercise price that is at least equal to the fair market value of our common stock on the date the stock option is granted, generally vest in periods up to five years and expire ten years after the date of grant. On April 17, 2023, our shareholders approved the First Amendment to the M.D.C. Holdings, Inc. 2021 Equity Incentive Plan, which increased the number of shares of common stock available under the plan by an additional 3.0 million shares. As a result of the Merger, the 2021 Equity Incentive Plan terminated. There are no remaining shares of MDC common stock reserved for awards under the 2021 Equity Incentive Plan as of December 31, 2025 and 2024.

As part of the Merger the then outstanding restricted stock awards and performance stock unit awards granted under the 2011 Equity Incentive Plan and the 2021 Equity Incentive Plan were fully vested, cancelled and automatically converted into the right to receive an amount in cash. Similarly, the then outstanding stock options granted under the 2011 Equity Incentive Plan and the 2021 Equity Incentive Plan were fully vested, cancelled and automatically converted into the right to receive an amount in cash.

Director Equity Incentive Plans. Effective April 27, 2011, our shareholders approved the M.D.C. Holdings, Inc. 2011 Stock Option Plan for Non-Employee Directors (the “2011 Director Stock Option Plan”), which provided for the grant of non-qualified stock options to non-employee directors of the Company. Effective March 29, 2016, our shareholders approved an amendment to the 2011 Director Stock Option Plan to provide the non-employee directors with an alternative to elect to receive an award of restricted stock in lieu of a stock option. Pursuant to the 2011 Director Stock Option Plan as amended, on August 1 of each year, each non-employee director was granted either (1) an option to purchase 25,000 shares of MDC common stock or (2) shares of restricted stock having an expense to the Company that is equivalent to the stock option. Effective April 20, 2020, our shareholders approved an amendment and restatement of the 2011 Director Stock Option Plan to (1) rename the 2011 Director Stock Option Plan as the M.D.C. Holdings, Inc. 2020 Equity Plan for Non-Employee Directors (such amended and restated 2011 Director Plan, the "2020 Director Equity Plan"), (2) increase the number of shares covered by the annual grant of each stock option to 33,067 shares (without increasing the total number of shares authorized under the plan) to reflect, on a going forward basis, the stock dividends declared by the Company, (3) provide that the number of shares covered by the annual grant shall be proportionally increased or decreased in the future for any increase or decrease in the number of shares of stock outstanding on account of any recapitalization, split, reverse split, combination, exchange, dividend or other distribution

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payable in shares of stock, and (4) extend the 2020 Director Equity Plan's termination date to April 20, 2030. Each option granted under the 2020 Director Equity Plan vests immediately, becomes exercisable six months after grant, and expires ten years from the date of grant. The option exercise price must be equal to the fair market value (as defined in the plan) of our common stock on the date of grant of the option. Each restricted stock award granted under the 2020 Director Equity Plan vests seven months after the grant date. As a result of the Merger, the 2020 Director Equity Plan terminated. There are no remaining shares of MDC common stock reserved for awards under the 2020 Director Equity Plan as of December 31, 2025 and 2024.

As part of the Merger the shares of restricted stock awarded under the 2020 Director Equity Plan were fully vested, cancelled and automatically converted into the right to receive an amount in cash. Similarly, the then outstanding stock options granted under the 2020 Director Equity Plan were fully vested, cancelled and automatically converted into the right to receive an amount in cash.

Employee Benefit Plan. We have a defined contribution plan pursuant to Section 401(k) of the Internal Revenue Code where each employee may elect to make contributions up to the current tax limits. Effective for 2018 and thereafter, we match employee contributions at a rate of 50% of the first 6% of compensation and, as of December 31, 2025, we had accrued $4.0 million related to the match that is to be contributed in the first quarter of 2026 for 2025 activity. At December 31, 2024, we had accrued $3.5 million related to the match that was contributed in the first quarter of 2025 for 2024 activity. At December 31, 2023, we had accrued $3.0 million related to the match that was contributed during the first quarter of 2024 for 2023 activity.

Employee Benefit Plan Woodside. Woodside has a defined contribution plan pursuant to Section 401(k) of the Internal Revenue Code where each employee may elect to make contributions up to the current tax limits. We match employee contributions at a rate of 50% of the first 6% of compensation and, as of December 31, 2025, we had accrued $0.2 million related to the match that is to be contributed in the first quarter of 2026 for 2025 activity. As of December 31, 2024, we had accrued $0.3 million related to the match that was contributed in the first quarter of 2025 for 2024 activity.

19. Stock Based Compensation

Stock Option Award Activity. Stock option activity under our option plans, restated as applicable for stock dividends, for the years ended December 31, 2025, 2024 and 2023 were as follows.


	Year Ended December 31,
	2025			2024			2023
	Number of Shares	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price
Outstanding Stock Option Activity
Outstanding, beginning of year	—	N/A		3,184,473	$	28.45	4,684,481	$	26.30
Granted	—	N/A		—	—		—	—
Exercised	—	N/A		(1,653)	17.20		(1,500,008)	21.74
Forfeited	—	N/A		—	N/A		—	—
Cancelled	—	N/A		(3,182,820)	28.46		—	—
Outstanding, end of year	—	$	—	—	$	—	3,184,473	$	28.45

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	Year Ended December 31,
	2025			2024			2023
	Number of Shares	Weighted- Average Fair Value		Number of Shares	Weighted- Average Fair Value		Number of Shares	Weighted- Average Fair Value
Unvested Stock Option Activity
Outstanding, beginning of year	—	$	—	—	$	—	144,000	$	8.73
Granted	—	—		—	—		—	—
Vested	—	—		—	—		(144,000)	8.73
Forfeited	—	—		—	—		—	—
Unvested, end of year	—	$	—	—	$	—	—	$	—

As a result of the Merger, all option awards that were 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.

The total intrinsic value of options (difference between price per share as of the exercise date and the exercise price, times the number of options outstanding) exercised during the years ended December 31, 2024 and 2023 was $0.1 million and $33.7 million, respectively. There were no outstanding or exercised options during the year ended December 31, 2025.

Total compensation expense relating to stock options was $0.0 million, $0.0 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our recognized tax benefit from this expense for the years ended December 31, 2025, 2024 and 2023 was $0.0 million for each year.

As of December 31, 2025, there was no unrecognized compensation cost related to stock options that is expected to be recognized as an expense by the Company in the future.

For the years ended December 31, 2025, 2024 and 2023 the Company received cash from the exercise of stock option awards of $0.0 million, $0.0 million and $32.6 million, respectively. Our realized tax benefit from stock options exercised or cancelled and automatically converted into the right to receive an amount in cash in connection with the Merger for the years ended December 31, 2025, 2024 and 2023 was $0.0 million, $24.7 million and $6.7 million, respectively.

Restricted Stock Award Activity. Non-vested restricted stock awards, restated as applicable for stock dividends, at December 31, 2025, 2024 and 2023 and changes during those years were as follows:


	Year Ended December 31,
	2025			2024			2023
	Number of Shares	Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Grant Date Fair Value
Unvested, beginning of year	—	$	—	444,649	$	45.18	363,801	$	46.58
Granted	—	—		—	—		289,694	43.14
Vested	—	—		(444,348)	45.17		(205,193)	44.66
Forfeited	—	—		(301)	55.40		(3,653)	51.96
Unvested, end of year	—	$	—	—	$	—	444,649	$	45.18

As a part of the Merger, all RSA's, 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.

Total compensation expense relating to restricted stock awards was $0.0 million, $4.5 million and $16.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our recognized tax benefit from this expense for the years ended December 31, 2025, 2024 and 2023 was $0.0 million, $2.9 million and $1.2 million, respectively.

The total intrinsic value of restricted stock which vested during each of the years ended December 31, 2025, 2024 and 2023 was $0.0 million, $27.7 million and $7.9 million, respectively.

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Performance Share Unit Awards. The Company has made annual grants of long term performance share unit awards ("PSUs") to each of the Executive Chairman, CEO and the Chief Financial Officer ("CFO"). The PSUs are earned based upon the Company’s performance, over a period of three years (the “Performance Period”), measured by increasing home sale revenues over a “Base Period.” Each award is conditioned upon the Company achieving an average gross margin from home sales (excluding impairments) of at least fifteen percent (15%) over the Performance Period. Target goals will be earned if the Company’s three year average home sale revenues over the Performance Period (“Performance Revenues”) exceed the home sale revenues over the Base Period (“Base Revenues”) by at least 10% but less than 20%. If Performance Revenues exceed the Base Revenues by at least 5% but less than 10%, 50% of the Target Goals will be earned (“Threshold Goals”). If Performance Revenues exceed the Base Revenues by at least 20%, 200% of the Target Goals will be earned (“Maximum Goals”). The number of PSUs earned shall be adjusted to be proportional to the partial performance between the Threshold Goals, Target Goals and Maximum Goals.

In accordance with ASC 718, the PSUs were valued on the date of grant at their fair value. The fair value of these grants was equal to the closing price of MDC stock on the date of grant less the discounted cash flows of expected future dividends over the respective vesting period (as these PSUs do not participate in dividends). ASC 718 does not permit recognition of expense associated with performance-based stock awards until achievement of the performance targets are probable of occurring.

2021 PSU Grants. The 2021 PSU awards vested on February 2, 2024. For the year ended December 31, 2023, the Company recorded the required share-based award expense related to the awards of $7.1 million based on its assessment of the probability for achievement of the performance targets.

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 yet 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.

Our employee equity incentive plans permit us to withhold from the total number of shares that otherwise would be released to a restricted stock or performance share unit award recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due. For the years ended December 31, 2025, 2024, and 2023, 0, 408,477 and 293,366 shares were withheld, respectively, resulting in $0.0 million, $25.6 million and $11.8 million of income tax withholding, respectively, being remitted on behalf of the employees.

20. Stockholders' Equity

Cash Dividends. In each of the years ended December 31, 2024 and 2023, we paid dividends of $0.55 per share (prior to the Merger) and $2.10 per share, respectively. In 2024 subsequent to the Merger, we paid dividends of $114.2 million. In 2025, we paid dividends of $195.2 million.

Common Stock Repurchase Program. Through April 19, 2024, we were authorized to repurchase up to 4,000,000 shares of our common stock. We did not repurchase any shares of our common stock under this repurchase program during the years ended December 31, 2024 or 2023. The repurchase program ended upon the Merger.

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21. Goodwill

Through the common control acquisition of Woodside, the Company reflected the transferred assets and liabilities at the historical cost of the Parent under ASC 805 Business Combinations, which included $65.2 million of goodwill. Goodwill is included in our consolidated balance sheets in goodwill and intangible assets, net. In accordance with ASC 350, we assess the recoverability of goodwill annually, or more frequently, if impairment indicators are present.

A summary of the carrying amount of goodwill follows (in thousands):


	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Balance as of January 1, 2024	$	6,008	$	—	$	—	$	—	$	—	$	—	$	6,008
Additions	56,382		8,857		—		—		—		—		65,239
Balance as of December 31, 2024	62,390		8,857		—		—		—		—		71,247
Additions	—		—		—		—		—		—		—
Balance as of December 31, 2025	$	62,390	$	8,857	$	—	$	—	$	—	$	—	$	71,247

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22. Merger

On April 19, 2024, the Company completed the transactions contemplated by the Merger Agreement, by and among the Company, Parent, Merger Sub, and, solely for the purposes of Section 6.2, Section 6.17 and Section 9.15 of the Merger Agreement, Guarantor, providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation. 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. Included within these amounts is $53.2 million of compensation expense for the year ended December 31, 2024, related to the vesting of equity awards as of the closing of the Merger, which are included within the Selling, general and administrative expenses line item within the consolidated statements of operations and comprehensive income.

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.

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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 $39.4 million of transaction costs during the year ended December 31, 2024 in connection with the Merger. During the year ended December 31, 2025, with the issuance of final regulations in 2025 the $4.8 million of excise tax included within prior year transaction cost was no longer applicable and accordingly was reversed in 2025. Both of these amounts were recorded within the Transaction costs line item within the consolidated statements of operations and comprehensive income There were no transaction related costs during the year end December 31, 2023. Further, the Company incurred $19.4 million of expense during the year ended December 31, 2024, related to key executives' transaction bonuses in connection with the Merger, which are included within the Selling, general and administrative expenses line item within the consolidated statements of operations and comprehensive income.

23. Common Control Merger

Assets acquired and liabilities assumed are reported at the Parent's historical carrying amounts on the date of common control and the net assets are recognized in additional paid-in capital. The following table summarizes the historical balances of the assets acquired and liabilities assumed as of April 19, 2024:

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	(Dollars in thousands)
Assets acquired
Homebuilding:
Cash and cash equivalents	$	20,987

Trade and other receivables	9,386
Accounts receivable due from Parent	2,117
Total inventories	1,372,565
Property and equipment, net	22,889
Deferred tax assets, net	5,574
Prepaid and other assets	67,999
Investment in unconsolidated entities	44,374
Goodwill and intangible assets, net	68,951
Total homebuilding assets acquired	$	1,614,842

Liabilities assumed
Homebuilding:
Accounts payable	$	49,035
Accrued and other liabilities	107,538
Related party payables	3,051
Related party note	99,900
Revolving credit facility	10,000
Notes payable, net	359,831

Total homebuilding liabilities assumed	$	629,355

Net assets	$	985,487

24. Subsequent Events

On or about January 15, 2026, a term sheet was executed by all parties to settle the Building Trades Pension Fund of Western Pennsylvania class action complaint for $25.0 million, which is anticipated to be fully covered by the Company's third-party insurance providers.

On January 1, 2026, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiaries Chesmar and Holt. Chesmar and Holt are homebuilding companies with operations in Texas, Oregon, and Washington.

Immediately prior to the contribution, the sole stockholder of the Company was also the sole stockholder of Chesmar and Holt. As a result of the common ownership upon closing of the transaction, the acquisition was considered a common-control transaction and was outside the scope of the business combination guidance in ASC 805-50. The entities are deemed to be under common control as of April 19, 2024, which was the date that the sole stockholder acquired control of the Company and, therefore, held control over both companies.

The following table summarizes the historical balances of the assets acquired and liabilities that are to be assumed in January 2026, as of April 19, 2024:

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	Holt		Chesmar

Assets acquired
Homebuilding:
Cash and cash equivalents	$	19,952	$	27,056
Trade and other receivables	18,213		6,714
Accounts receivable due from Parent	1,170		—
Total inventories	493,430		665,338
Property and equipment, net	1,426		582
Deferred tax assets, net	5,368		14,321
Prepaid and other assets	21,982		42,498
Investment in unconsolidated entities	—		15,262
Goodwill and intangible assets, net	3,506		168,189
Total homebuilding assets acquired	$	565,047	$	939,959
Financial Services:
Cash and cash equivalents	$	—	$	13,032
Restricted Cash	—		433
Mortgage loans held-for-sale, net	—		20,301
Due from related parties	—		46
Other assets	—		8,369
Total financial services assets acquired	—		42,181
Total Assets	$	565,047	$	982,140

Liabilities assumed
Homebuilding:
Accounts payable	$	16,024	$	33,864
Accrued and other liabilities	44,365		47,156
Related party payables	149		304
Related party note	—		—
Related party line of credit	20,000		—
Revolving credit facility	—		185,000
Notes payable, net	102,689		100,000
Total homebuilding liabilities assumed	$	183,228	$	366,324
Financial Services:
Accounts payable and accrued liabilities	$	—	$	2,029
Mortgage repurchase facilities	—		24,767
Total financial services liabilities assumed	—		26,796
Total Liabilities	$	183,228	$	393,121

Net assets	$	381,819	$	589,019

25. Results of Quarterly Operations (Unaudited)

The below quarterly financial data incorporates Woodside financial results beginning on the date deemed to be under common control of April 19, 2024, as discussed in Note 1, Summary of Significant Accounting Policies.

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	Three Months Ended
	March 31, 2025		June 30, 2025		September 30, 2025		December 31, 2025
	(Dollars in thousands)
Total revenues	$	1,224,106	$	1,394,652	$	1,160,695	$	1,209,459
Homebuilding revenues	$	1,215,506	$	1,393,569	$	1,163,499	$	1,145,781
Inventory impairments	$	—	$	(15,203)	$	(45,050)	$	(17,400)
Gross margin (homebuilding)	$	216,957	$	191,441	$	144,021	$	182,702
Selling, general and administrative expenses (homebuilding)	$	(152,617)	$	(162,274)	$	(149,917)	$	(137,495)
Income before income taxes	$	78,929	$	49,639	$	2,723	$	58,229
Net income	$	65,779	$	38,901	$	2,367	$	44,825


	Three Months Ended
	June 30, 2024		September 30, 2024		December 31, 2024
	(Dollars in thousands)
Total revenues	$	1,635,256	$	1,737,030	$	1,638,688
Homebuilding revenues	$	1,622,371	$	1,714,625	$	1,617,663
Inventory impairments	$	(4,550)	$	(7,800)	$	—
Gross margin (homebuilding)	$	300,963	$	319,973	$	284,498
Selling, general and administrative expenses (homebuilding)	$	(244,504)	$	(170,529)	$	(194,456)
Income before income taxes	$	61,372	$	185,943	$	122,889
Net income	$	43,330	$	158,109	$	97,276

F - 47

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

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 principal executive officer and the principal financial officer. Based on that evaluation, our management, including the principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, management concluded that our internal control over financial reporting was effective at December 31, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

On January 1, 2026, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K (the “Initial 8-K”) to disclose that it had completed the acquisition of Chesmar and Holt. The Commission granted the Company’s request to substitute combined consolidated financial statements of the Company, Chesmar and Holt for the years ended December 31, 2025 and 2024 (which includes Chesmar and Holt beginning on April 19, 2024, the date the Company was acquired by the Parent) (the “Combined Consolidated Financial Statements”) in lieu of the financial statements of Chesmar and Holt and the pro forma combined financial information required by Rule 3-05 of Regulation S-X for the acquisition of Chesmar and Holt. The following represents the Combined Consolidated Financial Statements.

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Sekisui House U.S., Inc.

Combined Consolidated Financial Statements

For the Year Ended December 31, 2025 and 2024

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Sekisui House U.S., Inc.

Opinion on the Financial Statements

We have audited the accompanying combined consolidated balance sheets of Sekisui House U.S., Inc. (the Company) as of December 31, 2025 and 2024, the related combined consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “combined consolidated financial statements”). In our opinion, the combined consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the combined consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.



			Evaluation of Insurance Reserves
Description of the Matter			At December 31, 2025, insurance reserves totaled $100.8 million for the estimated incurred cost of construction defect claims. As more fully described in Note 1 to the combined consolidated financial statements, the Company establishes the reserves for estimated losses based on actuarial studies that include known facts and interpretations of circumstances.

			Auditing the Company’s estimate of the reserves was especially challenging because the estimate is based on actuarial projections of future claims derived from historical claims data. There is significant uncertainty in the actuarial projections as the potential claim payments will be made over a long period of time, they assume that historical claims are a reasonable proxy of future claims, and the claim amounts can be significantly impacted by changes in product mix, quality of construction, units sold, and geographic location of sold units.

How We Addressed the Matter in Our Audit			We obtained an understanding of the Company’s process to estimate the reserves. For example, we obtained an understanding over management’s review of the actuary’s analysis, including management’s procedures over the underlying data used by the actuary and the consideration by management over whether historical claim information requires adjustment.

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			To test the estimate of reserves, our audit procedures included, among others, utilizing an internal actuarial specialist to evaluate the actuarial study utilized by management and to perform independent calculations to determine a range of reasonable reserves and to compare this range to the recorded insurance reserves. Additionally, we tested the completeness and accuracy of the underlying claims data provided to management's actuarial specialist, evaluated the change in the reserves from the prior year based upon current year trends in claim data, and performed hindsight reviews of past estimates compared to actual claim payments.

			Evaluation of Inventories for Impairment

Description of the Matter			As of and for the year ended December 31, 2025, the Company reported inventories of approximately $7.2 billion and impairment charges of $77.7 million. The Company’s inventories are primarily associated with subdivisions where it intends to construct and sell homes, including models and unsold homes. As more fully described in Note 1 to the combined consolidated financial statements, management evaluates inventories for impairment at each quarter end on a subdivision level basis.

			Auditing the Company’s evaluation of inventories for impairment involved subjective auditor judgment to evaluate management’s home sales revenue assumption in its future undiscounted and discounted cash flows. The estimated future home sales revenue assumption is highly judgmental as it is a forward-looking assumption that can be significantly affected by sub-market information including competition, customer demand for size and style of homes, and pricing trends in home sale orders. Differences or changes in this significant assumption could have a material impact on the Company’s analysis.

How We Addressed the Matter in Our Audit			We obtained an understanding over the Company’s inventory impairment process. For example, we obtained an understanding over management’s review of the significant assumptions and data inputs utilized in its test for recoverability and, when applicable, its measurement of impairment losses.

			Our testing of the Company’s impairment analysis included, among other procedures, evaluating the significant assumptions and operating data used to estimate the future undiscounted cash flows. To test the home sales revenue assumption included in the estimated future undiscounted cash flows we compared the home sales revenue assumption to historical subdivision operating trends, performed sensitivity analyses over the home sales revenue assumption and evaluated sub-market industry data.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2000.

Denver, Colorado

March 12, 2026

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Sekisui House U.S., Inc.

Combined Consolidated Balance Sheets


	December 31, 2025		December 31, 2024
	(Dollars in thousands, except per share amounts)
ASSETS
Homebuilding:
Cash and cash equivalents	$	266,486	$	637,226
Restricted cash	1		1,222

Trade and other receivables	78,592		78,496
Accounts receivable due from Parent	47,219		265,556



Inventories	7,179,927		6,170,875

Property and equipment, net	96,089		99,716
Deferred tax assets, net	86,619		55,513
Prepaids and other assets	207,261		229,674
Investment in unconsolidated entities	23,681		60,851

Goodwill and intangible assets, net	236,614		242,614
Total homebuilding assets	8,222,489		7,841,743
Financial Services:
Cash and cash equivalents	93,645		254,594
Restricted cash	546		739
Mortgage loans held-for-sale, net	216,107		319,219
Other assets	29,159		29,631
Total financial services assets	339,457		604,183
Total Assets	$	8,561,946	$	8,445,926
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	176,674	$	233,227
Accrued and other liabilities	562,284		505,052
Related party payables	2,188		3,565
Related party line of credit	487,789		187,000

Related party note	—		99,900
Notes payable, net	2,953		562,667
Senior notes, net	1,485,166		1,484,267
Total homebuilding liabilities	2,717,054		3,075,678
Financial Services:
Accounts payable and accrued liabilities	125,078		127,168
Mortgage repurchase facilities	177,221		256,830
Total financial services liabilities	302,299		383,998
Total Liabilities	3,019,353		3,459,676
Stockholders' Equity
Common stock, $0.01 par value; 150 shares authorized; 100 issued and outstanding at December 31, 2025 and December 31, 2024	—		—
Additional paid-in-capital	3,683,807		3,154,058
Retained earnings	1,858,786		1,832,192

Total Stockholders' Equity	5,542,593		4,986,250
Total Liabilities and Stockholders' Equity	$	8,561,946	$	8,445,926

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

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Sekisui House U.S., Inc.

Combined Consolidated Statements of Operations and Comprehensive Income


	Year Ended December 31,
	2025		2024
	(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	6,384,773	$	7,350,340
Land sale revenues	102,687		66,293
Other revenues	8,422		19,067
Total revenues	6,495,882		7,435,700
Home cost of sales	(5,336,217)		(5,986,426)
Inventory impairments	(77,653)		(18,250)
Total home cost of sales	(5,413,870)		(6,004,676)
Land cost of sales	(69,377)		(54,227)
Other cost of sales	(6,947)		(17,591)
Total cost of sales	(5,490,194)		(6,076,494)
Gross margin	1,005,688		1,359,206
Selling, general and administrative expenses	(772,485)		(861,621)
Interest and other income	25,668		61,719
Transaction costs	4,827		(39,361)
Other expense, net	(21,789)		(8,669)
Homebuilding pretax income	241,909		511,274

Financial Services:
Revenues	179,891		188,754
Expenses	(116,785)		(103,404)
Other income, net	14,381		20,493
Financial services pretax income	77,487		105,843

Income before income taxes	319,396		617,117
Provision for income taxes	(67,581)		(126,690)
Net income	$	251,815	$	490,427

Other comprehensive income net of tax:
Unrealized gain related to available-for-sale debt securities	$	—	$	(51)
Other comprehensive income	—		(51)
Comprehensive income	$	251,815	$	490,376

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

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Sekisui House U.S., Inc.

Combined Consolidated Statements of Stockholders' Equity

(Dollars in thousands, except share amounts)


	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	—	—		—		490,427		—		490,427
Other comprehensive income (loss)	—	—		—		—		(51)		(51)
Shares issued under stock-based compensation programs, net	388,176	3		(25,601)		—		—		(25,598)
Cash dividends declared	—	—		—		(210,888)		—		(210,888)
Stock-based compensation expense	—	—		2,805		—		—		2,805
Forfeiture of restricted stock	(301)	—		—		—		—		—

Effect of merger of entities under common control	—	—		1,956,325		—		—		1,956,325
Effect of Merger transaction	(75,049,254)	(750)		(603,905)		—		—		(604,655)
Balance at December 31, 2024	100	$	—	$	3,154,058	$	1,832,192	$	—	$	4,986,250
Net income	—	—		—		251,815		—		251,815
Contribution from Parent	—	—		529,749		—		—		529,749
Cash dividends declared	—	—		—		(225,221)		—		(225,221)
Balance at December 31, 2025	100	$	—	$	3,683,807	$	1,858,786	$	—	$	5,542,593

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

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Sekisui House U.S., Inc.

Combined Consolidated Statements of Cash Flows


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Operating Activities:
Net income	$	251,815	$	490,427
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	—		1,319
Depreciation and amortization	45,280		43,009
Inventory impairments	77,653		18,250
Project abandonment costs	18,402		8,036
Amortization of discount of marketable debt securities	—		(4,682)
Impairment of property and equipment	2,657		—
Loss on abandonment of property and equipment	880		1,108
Income from unconsolidated entities	(3,739)		(6,328)
Distribution from unconsolidated entities	3,414		1,307
Deferred income tax benefit (expense)	(31,106)		8,593
Net changes in assets and liabilities:
Trade and other receivables	(96)		73,830
Accounts receivable due from Parent	23,974		(35,578)
Mortgage loans held-for-sale, net	103,112		(40,706)
Inventories	(1,064,820)		(363,773)

Prepaids and other assets	46,505		(14,562)
Accounts payable and accrued liabilities	(25,278)		16,219
Net cash provided by (used in) operating activities	(551,347)		196,469
Investing Activities:
Purchases of marketable securities	—		(177,133)
Maturities of marketable securities	—		260,000
Investment in unconsolidated entities	—		(2,400)
Distributions of capital from unconsolidated entities	385		6,206
Decrease (increase) in receivable from cash pooling arrangement with Parent	194,363		(226,691)
Payment received on note receivable	—		991
Proceeds from sale / disposal of assets	11,998		383
Purchases of property and equipment	(49,182)		(24,550)
Net cash provided by (used in) investing activities	157,564		(163,194)
Financing Activities:
Advances (payments) on mortgage repurchase facilities, net	(79,609)		27,082
Payments on homebuilding line of credit, net	—		(205,000)
Advances on related party line of credit from cash pooling arrangement with Parent, net	300,789		167,000


Repayment of notes payable, net	(130,050)		—
Dividend payments	(225,221)		(210,888)
Payments of deferred debt issuance costs	(5,229)		(5,077)
Distribution to Parent	—		(611,369)
Issuance of shares under stock-based compensation programs, net	—		(25,598)
Net cash used in financing activities	(139,320)		(863,850)
Net decrease in cash, cash equivalents and restricted cash	(533,103)		(830,575)
Cash, cash equivalents and restricted cash:
Beginning of year	893,781		1,642,896
Assumed in Common Control Mergers	—		81,460
End of year	$	360,678	$	893,781
Reconciliation of cash, cash equivalents and restricted cash:
Homebuilding:
Cash and cash equivalents	$	266,486	$	637,226
Restricted cash	1		1,222
Financial Services:

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Cash and cash equivalents	93,645		254,594
Restricted cash	546		739
Total cash, cash equivalents and restricted cash	$	360,678	$	893,781

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

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1. Summary of Significant Accounting Policies

Principles of Consolidation. The Combined 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), Chesmar Homes, LLC (“Chesmar”) and Holt Group Holdings, LLC ("Holt") (collectively referred to as "the Group") for the year ended December 31, 2025 and 2024 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") under Rule 3-05 of Regulation S-X. The SEC granted the Company's request to substitute combined consolidated financial statements of the Company, Chesmar and Holt for the year ended December 31, 2025 and 2024 (which includes Chesmar and Holt beginning on April 19, 2024, the date the Company was acquired by the parent) in lieu of the financial statements of Chesmar and Holt and the pro forma combined financial information required by Rule 3-05 of Regulation S-X for the acquisition of Chesmar and Holt. All intercompany balances and transactions have been eliminated in consolidation.

Woodside Merger. On December 1, 2025, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiary Woodside. Woodside is a homebuilding company with operations in Arizona, California, Idaho, Nevada and Utah.

Chesmar and Holt Merger. On January 1, 2026, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiaries Chesmar and Holt. Chesmar and Holt are homebuilding companies with operations in Texas, Oregon, and Washington. The Woodside Merger and Chesmar and Holt Merger are collectively referred to as the Common Control Mergers.

Immediately prior to the contributions, the sole stockholder of the Company was also the sole stockholder of Woodside, Chesmar and Holt. As a result of the common ownership, upon closing of the transactions, the acquisitions were considered common-control transactions and were outside the scope of the business combination guidance in Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805-50"). The entities are deemed to be under common control as of April 19, 2024, which was the date that the sole stockholder acquired control of the Company and, therefore, held control over each of the companies. The consolidated financial statements incorporate Woodside, Chesmar and Holt financial results and financial information beginning on April 19, 2024. See further information in Note 21, Common Control Mergers.

Our financial services operations consist of HomeAmerican Mortgage Corporation (“HomeAmerican”) and CLM Mortgage, Inc. ("CLM"), which originate mortgage loans, primarily for our homebuyers, American Home Insurance Agency, Inc. (“American Home Insurance”) and Entitled Insurance Agency, Inc. ("Entitled Insurance"), which offer third-party insurance products to our homebuyers, American Home Title and Escrow Company (“American Home Title”) and N Title, LLC ("N Title"), which provide title agency services to the Company and our homebuyers in Colorado, Florida, Maryland, Nevada, Texas and Virginia. The financial services operations also include StarAmerican Insurance Ltd. ("StarAmerican"), which provides insurance coverage to the majority of our homebuilding subsidiaries, which includes certain assumed liabilities of subcontractors under the Company's owner-controlled insurance program ("wrap program").

Presentation. Our balance sheet presentation is unclassified due to the fact that certain assets and liabilities have both short and long-term characteristics.

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Cash and Cash Equivalents. The Group periodically invests funds in highly liquid investments with an original maturity of three months or less, such as U.S. government securities, commercial bank deposits, commercial paper, certificates of deposit, money market funds and time deposits, which are included in cash and cash equivalents in the combined consolidated balance sheets and combined consolidated statements of cash flows.

Marketable 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. We had no marketable securities at December 31, 2025 and 2024.

Trade and Other Receivables. Trade and other receivables primarily includes home sale receivables, which reflects cash to be received from title companies or outside brokers associated with closed homes. Generally, we will receive cash from title companies and outside brokers within a few days of the home being closed. At December 31, 2025 and 2024, receivables from contracts with customers were $5.6 million and $13.9 million, respectively, and are included in trade and other receivables on the accompanying combined consolidated balance sheets.

•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.

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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 calculating the present value of the estimated future cash flows using discount rates, which are Level 3 inputs (see Note 5, Fair Value Measurements, in the notes to the financial statements for definitions of fair value 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.

If land is classified as held for sale, in accordance with ASC 360, we measure it 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 3 input (see Note 5, Fair Value Measurements, for definitions of fair value inputs). 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. 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.

Property and Equipment, net. Property and equipment is carried at cost less accumulated depreciation. For property and equipment related to on-site sales facilities, depreciation is recorded using the units of production method as homes are delivered. For all other property and equipment, depreciation is recorded using a straight-line method over the estimated useful lives of the related assets, which range from 2 to 16 years. Depreciation and amortization expense for property and equipment was $38.3 million and $38.7 million for the years ended December 31, 2025 and 2024, respectively, which is recorded in selling, general and administrative expenses in the homebuilding or expenses in the financial services sections of our combined consolidated statements of operations and comprehensive income.

The following table sets forth the cost and carrying value of our homebuilding property and equipment by major asset category.


	Cost		Accumulated Depreciation and Amortization		Carrying Value
December 31, 2025:	(Dollars in thousands)
Sales facilities	$	124,075	$	(65,801)	$	58,274
Aircraft	23,346		(1,799)		21,547
Computer software and equipment	38,436		(28,409)		10,027
Leasehold improvements	16,904		(12,932)		3,972
Other	9,537		(7,268)		2,269
Total	$	212,298	$	(116,209)	$	96,089

December 31, 2024:
Sales facilities	$	109,380	$	(65,418)	$	43,962
Aircraft	54,576		(16,405)		38,171
Computer software and equipment	36,878		(27,180)		9,698
Leasehold improvements	16,144		(10,946)		5,198
Other	10,665		(7,978)		2,687
Total	$	227,643	$	(127,927)	$	99,716

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Investments in Unconsolidated Entities. The equity method of accounting is used for investments in unconsolidated entities over which the Group has significant influence. The Group recognizes its proportionate share of earnings and losses of the unconsolidated entities under the equity method of accounting, which is recorded in interest and other income in the homebuilding section of our combined consolidated statements of operations and comprehensive income. Investments in unconsolidated entities that do not meet the requirements for equity method accounting are accounted for at cost. All investments in unconsolidated entities are included in investment in unconsolidated entities on the accompanying combined consolidated balance sheets.

The timing of cash flows related to the unconsolidated entities and any related financing agreements varies by entity. If additional capital contributions are required and approved by the unconsolidated entity, the Group would need to contribute its pro rata portion of those capital needs in order to not dilute the Group's ownership in the unconsolidated entity. While future capital contributions may be required, the Group believes the total amount of such contributions will be limited. The Group's maximum financial exposure related to the unconsolidated entities won't exceed the combined investment and limited recourse guaranty totals.

Investment in unconsolidated entities accounted for under the cost method totaled $4.2 million and $4.0 million as of December 31, 2025 and 2024, respectively. The Group has eight investments in unconsolidated entities accounted for under the equity method, totaling $19.4 million and $56.8 million as of December 31, 2025 and 2024, respectively. The Group's ownership interest within these entities ranged from 18% to 50%.

The Group performs ongoing VIE reassessments under ASC 810 to determine whether the Group is the primary beneficiary of any of its investments in unconsolidated entities. The Group has determined that it is not the primary beneficiary of its investments. Therefore, no unconsolidated entities were required to be consolidated as of December 31, 2025 and 2024.

Based on our analysis, we have concluded that as of December 31, 2025 and 2024, our goodwill was not impaired.

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The second step is measurement. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate resolution with a taxing authority. Once the gross unrecognized tax benefit is determined, we also accrue for any interest and penalties, as well as any offsets expected from resultant amendments to federal or state tax returns. We record the aggregate effect of these items in income tax expense in the combined consolidated statements of operations and comprehensive income. To the extent this tax position would be offset against a similar deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed, the liability is treated as a reduction to the related deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. Otherwise, we record the corresponding liability in accrued and other liabilities in our combined consolidated balance sheets.

We assess the reasonableness and adequacy of the reserve and the per-unit reserve amount originally included in home cost of sales, as well as the timing of the reversal of any excess reserve on a quarterly basis, using historical payment data and other relevant information. Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our combined 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 combined consolidated statements of operations and comprehensive income. See Note 10, Warranty Accrual to the combined consolidated financial statements.

Self-Insurance Reserves for Construction Defect Claims. 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 either third-party insurance policies or insurance policies with StarAmerican and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies are based on actuarial studies that include known facts similar to those established 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

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our reserves. See Note 11, Insurance and Construction Defect Claim Reserves, to the combined consolidated financial statements.

Litigation Reserves. We and certain of our subsidiaries have been named as defendants in various cases. We reserve for estimated exposure with respect to these cases based upon currently available information on each case. See Note 15, Commitments and Contingencies, to the combined consolidated financial statements.

Derivative and Financial Instruments. 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 and CLM 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. These instruments are the only significant derivative and financial instruments utilized by SHUS to hedge against fluctuations in interest rates. 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 combined 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 combined consolidated balance sheets, depending on the nature of the change. For further discussion of our policies regarding interest rate lock commitments, see our “Revenue Recognition for HomeAmerican and CLM” accounting policy section below. There are no credit risk related contingent features within our derivative agreements and counterparty risk is considered minimal.

Land and lot revenue for Homebuilding Segments: Revenue and cost of sales from land sales are recognized when title to the property has been transferred to the buyer, adequate consideration has been received, and the Group has no significant future performance obligations. Effective December 1, 2025, after the Woodside Merger, the Company aligned its accounting policy with Woodside, considering land sale revenues as an output of the entity's ordinary activities prospectively under ASC 606, Revenue from Contracts with Customers. Previous to December 1, 2025, land sale revenues and land cost of sales are included in other income (expense) within the consolidated statement of operations and comprehensive income. Total land sale revenues of $2.6 million and land cost of sales of $3.0 million were recognized in other income (expense) during the year ended December 31, 2025. There were no land sales in the year ended December 31, 2024.

Other revenue for Homebuilding Segments: Other revenue primarily consists of project management fees earned by the Group for construction management services provided to customers and profit participation agreements contained in some land and lot sale contracts. Revenue from project management arrangements is recognized on either a completion of milestones basis or as costs are incurred by the Group.

Revenue Recognition for HomeAmerican and CLM. Revenues recorded by HomeAmerican and CLM primarily reflect (1) origination fees and (2) the corresponding sale, or expected future sale, of a loan, which will include the estimated earnings from either the release or retention of a loan’s servicing rights. Origination fees are recognized when a loan is originated. When an interest rate lock commitment is made to a customer, we record the expected gain on sale of the mortgage, plus the estimated earnings from the expected sale of the associated servicing rights, adjusted for a pull-through percentage (which is defined as the likelihood that an interest rate lock commitment will be originated), as revenue. As the interest rate lock commitment gets closer to being originated, the expected gain on the sale of that loan plus its servicing rights is updated to reflect current market value and the increase or decrease in the fair value of that interest rate lock commitment is recorded through revenues. At the

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same time, the expected pull-through percentage of the interest rate lock commitment to be originated is updated based upon current market conditions and, if there has been a change, revenues are adjusted as necessary. After origination, our mortgage loans, generally including their servicing rights, are sold to third-party purchasers in accordance with sale agreements entered into by us with a third-party purchaser of the loans. We make representations and warranties with respect to the status of loans transferred in the sale agreements. The sale agreements generally include statements acknowledging the transfer of the loans is intended by both parties to constitute a sale. Sale of a mortgage loan has occurred when the following criteria, among others, have been met: (1) fair consideration has been paid for transfer of the loan by a third party in an arms-length transaction, (2) all the usual risks and rewards of ownership that are in substance a sale have been transferred by us to the third party purchaser; and (3) we do not have a substantial continuing involvement with the mortgage loan.

We measure mortgage loans held-for-sale at fair value with the changes in fair value being reported in earnings at each reporting date. Net gains on the sale of mortgage loans are included as a component of revenues in the financial services section of the combined consolidated statements of operations and comprehensive income.

An annual forfeiture rate is estimated at the time of grant, and revised if necessary, in subsequent periods if the actual forfeiture rate differs from our estimate.

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2. Recently Issued Accounting Standards

Adoption of New Accounting Standards

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, 2025, 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 adopted this amendment in the fourth quarter of 2025. As a result of the adoption, there was no material impact on our combined consolidated balance sheet or combined consolidated statement of operations and comprehensive income. Footnote 12, Income Taxes was updated to comply with the new required disclosures.

Recent Accounting Pronouncements Not Yet Adopted

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 combined 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 combined consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("ASU-2025-05"), which allows entities to use the practical expedient to estimate expected credit losses. ASU 2025-05 will be effective for our fiscal year ending December 31, 2026 and interim reporting periods within this annual reporting period, with early adoption permitted. The Group is currently evaluating the impact that the adoption of ASU 2025-05 may have on our combined consolidated financial statements and disclosures.

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3. Supplemental Income Statement and Cash Flow Disclosure

The table below details homebuilding interest and other income and financial services other income (expense), net:


	Year Ended December 31,
	2025		2024
Homebuilding	(Dollars in thousands)
Interest and other income
Interest income	$	16,177	$	53,569
Other income	9,491		8,150
Total	$	25,668	$	61,719
Financial Services
Other income, net
Interest income	$	14,398	$	20,493
Loss on sale of assets	(17)		—
Total	$	14,381	$	20,493

The table below sets forth supplemental disclosures of cash flow information and non-cash investing and financing activities.


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Cash paid for:
Interest, net of interest capitalized	$	7,214	$	5,563
Income taxes	$	58,515	$	100,990
Non-cash activities:
Transfer of notes payable to Parent in exchange for contributions	$	429,850	$	—
Transfer of related party note to Parent in exchange for contributions	$	99,900	$	—
Land distribution received from investment in unconsolidated entities	$	39,201	$	—

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4. Segment Reporting

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

•Mountain (Colorado, Idaho and Utah)

•East (Florida, Maryland, Tennessee and Virginia)

Our financial services business consists of the following operating segments: (1) HomeAmerican; (2) CLM;(3) StarAmerican; (4) American Home Insurance; (5) Entitled Insurance; (6) American Home Title and (7) N Title. Due to its contributions to consolidated pretax income we consider HomeAmerican and CLM 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) 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 combined consolidated statements of operations and comprehensive income.

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

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	Year Ended December 31, 2025
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Home sale revenues	$	4,196,037	$	1,585,697	$	603,039	$	—	$	—	$	—	$	6,384,773
Land sale revenues	$	101,332	$	1,356	$	—	$	—	$	—	$	—	$	102,687
Other revenues	$	8,422	$	—	$	—	$	—	$	—	$	—	$	8,422
Revenues	$	—	$	—	$	—	$	—	$	114,748	$	65,143	$	179,891
Home cost of sales	$	(3,493,201)	$	(1,320,409)	$	(522,608)	$	—	$	—	$	—	$	(5,336,217)
Inventory impairments	$	(49,953)	$	(11,425)	$	(16,275)	$	—	$	—	$	—	$	(77,653)
Land cost of sales	$	(68,287)	$	(1,090)	$	—	$	—	$	—	$	—	$	(69,377)
Other cost of sales	$	(6,947)	$	—	$	—	$	—	$	—	$	—	$	(6,947)
Selling, general and administrative expenses	$	(511,310)	$	(154,299)	$	(83,441)	$	(23,435)	$	—	$	—	$	(772,485)
Transaction costs	$	—	$	—	$	—	$	4,827	$	—	$	—	$	4,827
Interest and other income (1)	$	9,750	$	302	$	407	$	15,209	$	—	$	—	$	25,668
Expenses (2)	$	—	$	—	$	—	$	—	$	(85,653)	$	(31,132)	$	(116,785)
Other income (expense), net (3)	$	(8,866)	$	(1,622)	$	(8,278)	$	(3,022)	$	6,299	$	8,082	$	(7,408)
Pretax income	$	176,977	$	98,510	$	(27,156)	$	(6,422)	$	35,394	$	42,093	$	319,396


	Year Ended December 31, 2024
	(Dollars in thousands)
	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Home sale revenues	$	4,869,950	$	1,650,330	$	830,060	$	—	$	—	$	—	$	7,350,340
Land sale revenues	$	61,876	$	4,417	$	—	$	—	$	—	$	—	$	66,293
Other revenues	$	19,067	$	—	$	—	$	—	$	—	$	—	$	19,067
Revenues	$	—	$	—	$	—	$	—	$	125,662	$	63,092	$	188,754
Home cost of sales	$	(3,950,390)	$	(1,345,306)	$	(690,730)	$	—	$	—	$	—	$	(5,986,426)
Inventory impairments	$	(13,100)	$	(400)	$	(4,750)	$	—	$	—	$	—	$	(18,250)
Land cost of sales	$	(49,951)	$	(4,276)	$	—	$	—	$	—	$	—	$	(54,227)
Other cost of sales	$	(17,591)	$	—	$	—	$	—	$	—	$	—	$	(17,591)
Selling, general and administrative expenses	$	(463,565)	$	(144,602)	$	(88,185)	$	(165,269)	$	—	$	—	$	(861,621)
Transaction costs	$	—	$	—	$	—	$	(39,361)	$	—	$	—	$	(39,361)
Interest and other income (1)	$	5,938	$	652	$	382	$	54,747	$	—	$	—	$	61,719
Expenses (2)	$	—	$	—	$	—	$	—	$	(77,889)	$	(25,516)	$	(103,404)
Other income (expense), net (3)	$	2,311	$	2,379	$	(1,456)	$	(11,903)	$	8,336	$	12,158	$	11,824
Pretax income	$	464,545	$	163,194	$	45,321	$	(161,786)	$	56,109	$	49,734	$	617,117

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

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

(3) Includes abandoned project costs (Homebuilding) and interest income (Financial Services).


	December 31,
	2025		2024
	(Dollars in thousands)
Homebuilding Assets
West	$	5,540,842	$	4,816,690
Mountain	1,309,645		1,429,116
East	890,772		593,167
Corporate	481,229		1,002,770
Total homebuilding assets	$	8,222,488	$	7,841,743

Financial Services
Mortgage Operations	$	265,655	$	370,839
Other	73,803		233,344
Total financial services assets	$	339,458	$	604,183

Total assets	$	8,561,946	$	8,445,926

5. Fair Value Measurements


		Fair Value
Financial Instrument	Hierarchy	December 31, 2025		December 31, 2024
		(Dollars in thousands)



Mortgage loans held-for-sale, net	Level 2	$	216,107	$	319,219

Derivative and financial instruments, net
Interest rate lock commitments	Level 2	$	(5,931)	$	(426)
Forward sales of mortgage-backed securities	Level 2	$	(3,615)	$	4,510
Mandatory delivery forward loan sale commitments	Level 2	$	(451)	$	164
Best-effort delivery forward loan sale commitments	Level 2	$	(6)	$	3

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

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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 were not under commitments to sell. At December 31, 2025 and 2024, we had $115.4 million and $167.6 million, respectively, in fair value of mortgage loans held-for-sale that were 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 December 31, 2025 and 2024, we had $100.7 million and $151.6 million, respectively, in fair value 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 a third-party, which is a Level 2 fair value input. The unpaid principal balances of all mortgage loans held for sale at December 31, 2025 and 2024 were $220.8 million and $334.7 million, respectively.

Gains (losses) on sales of mortgage loans, net, are included as a component of revenues in the financial services section of our combined consolidated statements of operations and comprehensive income. For the years ended December 31, 2025 and 2024, we recorded loss on mortgage loans held-for-sale, net of $111.6 million and $3.0 million, respectively.

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 years ended December 31, 2025 and 2024, we recorded net gains (losses) on these derivative and financial instruments of $(8.3) million and $7.6 million, respectively, in revenues in the financial services section of our combined consolidated statements of operations and comprehensive income. The following table sets forth the notional amounts of derivative and financial instruments at December 31, 2025 and 2024:


	Notional Values
Financial Instrument	December 31, 2025		December 31, 2024
	(Dollars in thousands)
Interest rate lock commitments	$	144,307	$	117,090
Forward sales of mortgage-backed securities	$	217,500	$	243,000
Mandatory delivery forward loan sale commitments	$	108,673	$	174,066
Best-effort delivery forward loan sale commitments	$	9,955	$	1,306

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

Mortgage Repurchase Facilities. The debt associated with our Mortgage Repurchase Facilities (see Note 13, Lines of Credit and Total Debt Obligations, for further discussion) are 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.

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	December 31, 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	$	298,758	$	289,370	$	298,478	$	282,124
$350 million 2.500% senior notes due January 2031, net	348,321		311,117		348,010		303,020
$500 million 6.000% senior notes due January 2043, net	491,858		470,270		491,596		499,370
$350 million 3.966% senior notes due August 2061, net	346,229		228,183		346,183		255,605
Total	$	1,485,166	$	1,298,940	$	1,484,267	$	1,340,119

Notes Payable. As a part of the execution of the Woodside Merger on December 1, 2025, Woodside transferred the Notes payable to the Parent effective October 28, 2025, with no continuing obligations existing for SHUS. The debt associated with our notes payable had an estimated fair value of $320.3 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

The debt associated with our Chesmar notes payable was paid in full on July 29, 2025. The Chesmar note had an estimated fair value of $99.3 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

The Holt note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Holt or SHUS. The Holt note had an estimated fair value of $94.8 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

Related Party Note. As a part of the execution of the Woodside Merger on December 1, 2025, Woodside transferred the Related party note to the Parent effective October 28, 2025, with no continuing obligations existing for SHUS. The debt associated with our related party note had an estimated fair value of $97.5 million as of December 31, 2024, based on Level 2 inputs, which primarily reflect estimated prices through multiple sources.

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6. Inventories

The table below sets forth, by reportable segment, information relating to our homebuilding inventories.


	December 31, 2025		December 31, 2024
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	2,185,457	$	2,097,242
Mountain	507,158		577,512
East	367,629		387,857
Subtotal	3,060,244		3,062,611
Land and Land Under Development:
West	3,044,957		2,388,100
Mountain	506,150		498,104
East	500,941		158,241
Subtotal	4,052,048		3,044,445
Land Held for Sale
West	60,768		57,750
Mountain	6,867		6,069
East	—		—
Subtotal	67,635		63,819
Total Inventories	$	7,179,927	$	6,170,875

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Inventory impairments recognized by segment for the years ended December 31, 2025 and 2024 are shown in the table below.


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	29,526	$	5,163
Mountain	2,930		400
East	9,611		1,922
Subtotal	42,067		7,485
Land and Land Under Development:
West	20,427		7,937
Mountain	8,495		—
East	6,664		2,828
Subtotal	35,586		10,765
Total Inventory Impairments	$	77,653	$	18,250

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)
December 31, 2025	7	$	17,400	$	52,862	12	%	—	18%
September 30, 2025	11	45,050		118,895		12	%	—	18%
June 30, 2025	8	15,203		58,512		12	%	—	15%
Total		$	77,653

September 30, 2024	4	$	7,800	$	34,290			15%
June 30, 2024	4	4,550		27,834		12	%	—	15%
March 31, 2024	3	5,900		17,634		12	%	—	18%
Total		$	18,250

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7. Capitalization of Interest


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Homebuilding interest incurred	$	106,537	$	97,368
Less: Interest capitalized	(106,537)		(97,368)
Homebuilding interest expensed	$	—	$	—

Interest capitalized, beginning of period	$	84,757	$	64,659
Plus: Assumed in Common Control Mergers	—		25,866
Plus: Interest capitalized during period	106,537		97,368
Less: Previously capitalized interest included in home and land cost of sales	(91,943)		(103,136)
Interest capitalized, end of period	$	99,351	$	84,757

8. Homebuilding Prepaids and Other Assets

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


	December 31,
	2025		2024
	(Dollars in thousands)
Operating lease right-of-use asset	$	46,596	$	38,942
Land option deposits	93,879		112,183
Prepaids	43,864		59,351

Deferred debt issuance costs on revolving credit facility, net	9,401		5,943
Other	13,521		13,255
Total	$	207,261	$	229,674

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9. 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.


	December 31,
	2025		2024
	(Dollars in thousands)
Accrued compensation and related expenses	$	108,728	$	144,014
Customer and escrow deposits	24,575		21,099
Warranty accrual (Note 10)	70,889		71,004
Lease liability	48,650		41,576
Land development and home construction accruals	43,136		45,665
Accrued interest	31,385		34,004
Income taxes payable	39,407		446
Self insured retention for construction defect claims (Note 11)	24,673		24,389
Retentions payable	37,656		27,381
Other accrued liabilities	133,185		95,474
Total accrued and other liabilities	$	562,284	$	505,052

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


	December 31,
	2025		2024
	(Dollars in thousands)
Insurance reserves (Note 11)	$	100,835	$	96,851
Accounts payable and other accrued liabilities	24,243		30,317
Total accounts payable and accrued liabilities	$	125,078	$	127,168

10. Warranty Accrual

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the years ended December 31, 2025 and 2024. The warranty accrual increased due to $6.3 million of warranty adjustments during the year ended December 31, 2024. This adjustment was due to higher general warranty related expenditures. From time to time, we change our warranty accrual rates based on payment trends. Any changes made to those rates did not materially affect our warranty expense or gross margin from home sales for the years ended December 31, 2025 and 2024.


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Balance at beginning of period	$	71,004	$	44,082
Assumed in Common Control Mergers	—		17,519
Expense provisions	33,157		37,273
Cash payments	(33,272)		(34,120)
Adjustments	—		6,250
Balance at end of period	$	70,889	$	71,004

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11. Insurance and Construction Defect Claim Reserves

The following table summarizes our self-insured retention for construction defect claims for the years ended December 31, 2025 and 2024. These reserves are included as a component of accrued and other liabilities in the homebuilding section of the combined consolidated balance sheets.


	December 31,
	2025		2024
	(Dollars in thousands)
Balance at beginning of period	$	24,389	$	11,433
Assumed in Common Control Mergers	—		12,693
Expense provisions	1,728		2,332
Cash payments, net of recoveries	(2,135)		(2,069)
Adjustments	691		—
Balance at end of period	$	24,673	$	24,389

The following table summarizes our insurance reserves associated with Allegiant and StarAmerican for the years ended December 31, 2025 and 2024. All insurance reserves associated with Allegiant were transferred to StarAmerican effective September 30, 2025. These reserves are included as a component of accounts payable and accrued liabilities in the financial services section of the combined consolidated balance sheet.


	December 31,
	2025		2024
	(Dollars in thousands)
Balance at beginning of period	$	96,851	$	89,326
Expense provisions	13,354		18,620
Cash payments, net of recoveries	(12,775)		(6,196)
Adjustments	3,405		(4,899)
Balance at end of period	$	100,835	$	96,851

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising primarily 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 years ended December 31, 2025 and 2024 are not necessarily indicative of what future cash payments will be for subsequent periods. The adjustment of $3.4 million to the insurance and defect claim reserve during the year ended December 31, 2025 was due to unfavorable emergence in insurance related claim activity during the current year. The adjustment of ($4.9 million) to the insurance and defect claim reserve during the year ended December 31, 2024 was due to favorable trends in insurance related claim activity during the prior year.

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12. Income Taxes

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

The Group has adopted the provisions under ASC 2023-09 to enhance income tax disclosures prospectively beginning in the fourth quarter of 2025.

Our income before income taxes for the year ended December 31, 2025 consisted of the following:


	Year Ended December 31,
	2025
	(Dollars in thousands)
Domestic income	$	319,396
Foreign income	—
Total income	$	319,396

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Our provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following:


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Current tax provision:
Federal	$	75,655	$	94,572
State	23,032		25,644
Total current	98,687		120,216

Deferred tax provision:
Federal	(24,081)		5,715
State	(7,025)		759
Total deferred	(31,106)		6,474
Provision for income taxes	$	67,581	$	126,690

The provision for income taxes differs from the amount that would be computed by applying the statutory federal income tax rate of 21% in 2025 and 2024 to income before income taxes as a result of the following:


	Year Ended December 31,
	2025			%		2024
	(Dollars in thousands)
U.S. federal tax at statutory rate	$	67,073		21.0	%	$	129,594
State and local income tax, net of federal (national) income tax effect 1	10,752			3.4	%	17,315
Foreign tax effects	—			—	%	—
Limitation on executive compensation	—			—	%	5,374
Change in unrecognized tax benefits	1,300			0.4	%	24,694
Effect of cross-border tax laws	—			—	%	—
Stock based compensation windfall	—			—	%	(29,038)
Tax credits	(14,021)			(4.4)	%	(22,622)
Merger related benefit payments	—			—	%	(9,342)
Effect of changes in tax laws or rates enacted in the current period	(792)			(0.2)	%	(1,269)
Transaction costs	—			—	%	4,755
Change in valuation allowance	45			—	%	221
Nontaxable or nondeductible items:
Adjustment to prior period provision	3,191			1.0	%	—
Other	33			—	%	7,008
Provision for income taxes	$	67,581		21.2	%	$	126,690

Effective tax rate	21.2		%			20.5		%

1 In 2025, no aggregated state taxes made up the majority (greater than 50%) of the tax effect in this category.

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	December 31,
	2025		2024
	(Dollars in thousands)
Deferred tax assets:
State net operating loss carryforwards	$	4,572	$	3,996

Warranty, litigation and other reserves	27,318		24,503
Accrued compensation	17,433		10,124
Asset impairment charges	19,032		10,954
Inventory, additional net costs capitalized for tax purposes	38,669		19,481
Investment in unconsolidated and consolidated entities	4,148		6,493
Other, net	2,698		2,530
Total deferred tax assets	113,870		78,081
Valuation allowance	(3,987)		(3,996)
Total deferred tax assets, net of valuation allowance	109,883		74,085

Deferred tax liabilities:
Property, equipment and other assets	9,054		4,519
Deferral of profit on home sales	3,244		3,403
State deferral	1,241		2,010
Other, net	9,725		8,640
Total deferred tax liabilities	23,264		18,572
Net deferred tax asset	$	86,619	$	55,513

At December 31, 2025, net cash paid (refunds received) for income taxes consisted of the following:


	Year Ended December 31,
	2025
	(Dollars in thousands)
Federal	$	43,111
Aggregated state and local jurisdictions	1,716
Disaggregated state and local jurisdictions
Arizona	1,439
California	7,662
Colorado	1,166
Florida	930
Texas	3,294
Virginia	(803)
Net cash paid for income taxes	$	58,515

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	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Gross unrecognized tax benefits at beginning of year	$	25,027	$	405
Increases related to prior year tax positions	91		45
Increases related to current year tax positions	—		24,652

Lapse of applicable statute of limitations	(121)		(75)
Gross unrecognized tax benefits at end of year	$	24,997	$	25,027

The interest and penalties, net of federal benefit for the years ended December 31, 2025 and 2024 was $1.3 million and $(0.1) million, respectively, and are included in provision for income taxes in the combined consolidated statements of operations and comprehensive income. We are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

The Group and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are subject to U.S. federal income tax examination for calendar tax years ending 2022 through 2025. Additionally, we are subject to various state income tax examinations for the 2021 through 2025 calendar tax years.

13. Lines of Credit and Total Debt Obligations

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. On 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 (the "Commitment") 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 the aggregate amount of the commitments may increase to an amount not to exceed $1.90 billion (the “accordion” feature) 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. The Revolving Credit Facility includes a $185.0 million sublimit for letters of credit.

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believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of December 31, 2025.

Mortgage Repurchase Facilities. Our Mortgage Operations enter into Mortgage Repurchase Facilities with various lenders, which provide liquidity by providing for the sale of eligible mortgage loans with an agreement by our Mortgage Operations to repurchase the mortgage loans at a future date. HomeAmerican is party to mortgage repurchase facilities with two lenders, which provide HomeAmerican with committed repurchase facilities of up to an aggregate of $300.0 million as of December 31, 2025 (subject to increase by up to $150.0 million under certain conditions with respect to one of the lenders). CLM is party to mortgage repurchase facilities with three lenders, which provide CLM with committed repurchase facilities of up to an aggregate of $165.0 million as of December 31, 2025.

At December 31, 2025 and 2024, our Mortgage Operations had $177.2 million and $256.8 million, respectively, of mortgage loans that they were obligated to repurchase under the Mortgage Repurchase Facilities. Mortgage loans that our Mortgage Operations are obligated to repurchase under the mortgage repurchase facilities are accounted for as a debt financing arrangement and are reported as mortgage repurchase facilities in the combined consolidated balance sheets. Pricing under the mortgage repurchase facilities are based on SOFR.

The Mortgage Repurchase Facilities have varying short term maturity dates through March 3, 2027. The Mortgage Repurchase Facilities contain 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 facilities. We believe our Mortgage Operations were in compliance with the representations, warranties and covenants included in the mortgage repurchase facilities as of December 31, 2025.

Effective April 16, 2025, HomeAmerican entered into a Waiver and Consent agreement with one of the Mortgage Repurchase Facilities lenders, in which the lender waived any events of default under the respective 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.

Woodside Revolving Line of Credit and reimbursement Agreement. On April 13, 2018, Woodside entered into an unsecured revolving credit agreement (“Woodside Line of Credit”) with Mizuho Bank, Ltd., which was used for general corporate purposes. The Woodside Line of Credit was amended on June 30, 2023. The commitment within the agreement was up to $250.0 million. The Woodside Line of Credit matured on June 30, 2024, and was not renewed by Woodside.

The Woodside Line of Credit was fully and unconditionally guaranteed by SHL. The facility contained various representations, warranties and covenants that we believe are customary for agreements of this type. The Woodside Line of Credit also contained 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 and breach of any financial covenant. Upon the occurrence and during the continuance of any event of default, the bank had the ability to accelerate the payment of the obligations thereunder and exercise various other customary default remedies.

Chesmar Revolving Line of Credit and reimbursement Agreement. On July 7, 2023, Chesmar entered into an unsecured revolving credit agreement ("Chesmar Line of Credit") with MUFG Bank, Ltd. which was used for general corporate purposes. The Chesmar Line of Credit was amended on September 28, 2023. The commitment within the agreement was $200.0 million. The Chesmar Line of Credit matured on September 27, 2024 and was not renewed by Chesmar.

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Borrowings under the Chesmar Line of Credit bore interest at a floating rate that was based on the lender's calculated bank rates plus a spread, or the Fed Funds rate plus a spread plus a 0.70% margin per annum. The Chesmar Line of Credit also provided for customary fees including commitment fees payable of 0.25% per annum.

The Chesmar Line of Credit was fully and unconditionally guaranteed by SHL. The facility contained various representations, warranties and covenants that we believe are customary for agreements of this type. The Chesmar Line of Credit also contained 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 and breach of any financial covenant. Upon the occurrence and during the continuance of any event of default, the bank had the ability to accelerate the payment of the obligations thereunder and exercise various other customary default remedies.

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, with the termination date of the guarantees being upon the maturity of the senior notes. The guarantors would be required to perform upon instances of default. We believe that we are in compliance with the representations, warranties and covenants in the senior note indentures.

Our debt obligations at December 31, 2025 and 2024, net of any unamortized debt issuance costs or discount, were as follows:


	December 31,
	2025		2024
	(Dollars in thousands)
$300 million 3.850% senior notes due January 2030, net	$	298,758	$	298,478
$350 million 2.500% senior notes due January 2031, net	348,321		348,010
$500 million 6.000% senior notes due January 2043, net	491,858		491,596
$350 million 3.966% senior notes due August 2061, net	346,229		346,183
Total	$	1,485,166	$	1,484,267

Notes payable, net. Woodside had a term debt agreement ("Woodside Note") with Sumitomo Mitsui Banking Corporation ("SMBC") for $330.0 million at an interest rate of 2.09%. The Woodside Note was guaranteed by SHL. As of December 31, 2024, the outstanding balance of principal and interest was $329.9 million. The Woodside Note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

Chesmar had a term debt agreement ("Chesmar Note") with SMBC for $100 million at an interest rate of 3.47%. The Chesmar Note was guaranteed by SHL. As of December 31, 2024, the outstanding balance of principal and interest was $100.0 million. Outstanding principal and interest of the Chesmar Note was paid in full on July 29, 2025.

Holt had a term debt agreement ("Holt Note") with Mizuho Bank, Ltd. for $100 million at an interest rate of 2.427%. The Holt Note was guaranteed by SHL. As of December 31, 2024, the outstanding balance of principal and interest was $99.8 million. The Holt Note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Holt or SHUS.

The Company had a promissory note with Surland Companies, LLC for $31.0 million with no interest until the maturity date, on December 31, 2025. After the maturity date, the note bears interest at an annual rate of 10%. This promissory note was in connection with a land sale purchase and related deferred purchase price. Effective December 31, 2025 the Company paid the $31.0 million due under the promissory note with Surland Companies, LLC.

Holt has a promissory note with GME Development, LLC for $3.0 million at an interest rate of 2.08%, with outstanding principal and interest due and payable upon maturity on December 31, 2026. This promissory note is in connection with a land purchase and phased takedown. Outstanding principal and interest was $3.0 million as of December 31, 2025 and 2024.

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termination date of June 30, 2026 and were automatically extended for one-year periods unless written notice of termination was provided by either party as of the end of the annual period. As of December 31, 2024, Chesmar had an outstanding balance of $187.0 million. Woodside and Holt had no outstanding balances as of December 31, 2024.

Borrowings bore interest at a floating rate equal to the weighted average of the total interest rate and fees incurred by Parent under the agreements with the Parent's third-party banks, and included any guaranty fee incurred by the Parent under agreements with SHL. The Intercompany Credit Agreement also provided for customary fees including commitment fees of the weighted average of the total commitment fees imposed by Parent's third-party banks per annum.

The Intercompany Credit Agreements contained various representations, warranties and covenants that we believe are customary for agreements of this type. The Intercompany Credit Agreements also contained customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, bankruptcy and insolvency proceedings. Upon the occurrence and during the continuance of any event of default, the Parent had the ability to accelerate the payment of the obligations thereunder and exercise various other customary default remedies. As a part of the execution of the Common Control Mergers, the Intercompany Credit Agreements were terminated on November 30, 2025, with respect to Woodside, and December 31, 2025, with respect to Chesmar and Holt, with all amounts due under the Intercompany Credit Agreements payable within five business days of the termination date. As of December 31, 2025, Chesmar and Holt had outstanding balances of $407.8 million and $80.0 million, respectively.

Related party note. In June 2023, Woodside borrowed $99.9 million from SHUSH under the terms of an unsecured intercompany loan agreement. The unpaid principal amount of the loan bore interest at a rate of 6.21% per annum. Interest payments on the loan were due the last business day of each May and November through loan maturity. Principal payments throughout the term of the loan were allowed but not required. Outstanding principal and interest was due and payable upon maturity on June 7, 2030. As of December 31, 2024, the full $99.9 million related party note payable remained outstanding. The $99.9 million related party note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

14. Related Party Transactions

In June 2023, Woodside borrowed $99.9 million from SHUSH under the terms of an unsecured intercompany loan agreement. The unpaid principal amount of the loan bore interest at a rate of 6.21% per annum. Interest payments on the loan were due the last business day of each May and November through loan maturity. Principal payments throughout the term of the loan were allowed but not required. Outstanding principal and interest was due and payable upon maturity on June 7, 2030. As of December 31, 2024, the full $99.9 million related party note payable remained outstanding. The $99.9 million related party note was transferred to the Parent effective October 28, 2025, with no continuing obligations existing for either Woodside or SHUS.

SHL was the guarantor of the Woodside Note, Chesmar Note and Holt Note. SHL charged Woodside, Chesmar and Holt a guarantee fee of 0.48%, 0.22% and 0.12% per annum, respectively, of the aggregate loan outstanding. Woodside, Chesmar and Holt account for guarantee fees as a component of interest. Outstanding principal and interest of the Chesmar Note was paid in full on July 29, 2025. The Woodside Note and Holt Note were transferred to the Parent effective October 28, 2025, with no continuing obligations existing for Woodside, Holt or SHUS.

Intercompany unsecured revolving credit agreement. Woodside, Chesmar and Holt each had an unsecured revolving credit agreement with Parent with commitments of $250.0 million, $500.0 million and $175.0 million, respectively ("Intercompany Credit Agreements"). The Intercompany Credit Agreements were effective November 20, 2024, had a termination date of June 30, 2026 and were automatically extended for one-year periods unless written notice of termination was provided by either party as of the end of the annual period. As of December 31, 2024, Chesmar had an outstanding balance of $187.0 million. Woodside and Holt had no outstanding balances as of December 31, 2024.

Borrowings bore interest at a floating rate equal to the weighted average of the total interest rate and fees incurred by Parent under the agreements with the Parent's third-party banks, and included any guaranty fee incurred by the Parent under agreements with SHL. The Intercompany Credit Agreement also provided for customary fees including commitment fees of the weighted average of the total commitment fees imposed by Parent's third-party banks per annum.

The Intercompany Credit Agreements contain various representations, warranties and covenants that we believe are customary for agreements of this type. The Intercompany Credit Agreements also contain customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, bankruptcy and insolvency proceedings. Upon the occurrence and during the continuance of any event of default, the Parent had the ability to

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accelerate the payment of the obligations thereunder and exercise various other customary default remedies. As a part of the execution of the Common Control Mergers, the Intercompany Credit Agreements were terminated on November 30, 2025, with respect to Woodside, and December 31, 2025, with respect to Chesmar and Holt.

The following table summarizes interest incurred, capitalized to inventory, and expensed as a result of the related party notes and intercompany unsecured revolving credit agreements and intercompany guarantee fees:


	Year Ended December 31,
	2025		2024
	(Dollars in thousands)
Capitalized interest, beginning of year	$	9,560	$	—
Assumed in Common Control Mergers	—		6,212
Interest incurred	19,825		10,380
Interest within cost of sales	(13,179)		(7,032)
Capitalized interest, end of year	$	16,206	$	9,560

SHRH and affiliates are considered a related party for the period subsequent to the Merger closing on April 19, 2024. As of December 31, 2025 and 2024 the Group had accounts receivable due from Parent of $47.2 million and $265.6 million, respectively. The receivable in 2025 was largely related to Woodside receivables associated with cash sweep accounts. The receivable in 2024 was largely related to Woodside receivables associated with cash sweep accounts, payments in connection with the Merger funded by the Company, and other various transactions with the Parent that are included within Accounts receivable due from Parent in the combined consolidated balance sheets.

As of December 31, 2025 and 2024, the Group had $2.2 million and $3.6 million, respectively, of related party payables related to interest payable under the related party notes, intercompany unsecured revolving credit agreements, guarantee fees to SHL, and other various payables with the Parent and affiliates. During the years ended December 31, 2025 and 2024, the Group recognized $7.1 million and $1.0 million of interest income in association with the cash pooling arrangement with the Parent within interest and other income on the combined consolidated statement of operations and comprehensive income.

The Company is party to a trademark license agreement with Parent and its affiliates pursuant to which it pays a royalty fee for use of these trademarks. During the years ended December 31, 2025 and 2024, the Company recognized $2.4 million and $0.6 million of royalty fees within selling, general and administrative expenses on the combined consolidated statement of operations and comprehensive income.

During the years ended December 31, 2025 and 2024, the Company purchased $4.4 million and $1.1 million, respectively, of construction related materials, such as framing materials, exterior wall panels and other related materials from Parent and some of its affiliates for use by the Company's homebuilding subsidiaries. These amounts are recognized within inventories on the combined consolidated balance sheets when paid and within home cost of sales on the combined consolidated statement of operations and comprehensive income when the homes close.

Within Inventories in the combined consolidated balance sheets is $63.8 million and $63.7 million of land purchased by the Group from affiliates of SHRH as of December 31, 2025 and 2024.

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15. Commitments and Contingencies

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 December 31, 2025, we had outstanding surety bonds and letters of credit totaling $775.9 million and $169.1 million, respectively, including $133.6 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $421.4 million and $136.2 million, respectively. All letters of credit as of December 31, 2025, excluding those issued by HomeAmerican, were issued either under our unsecured Revolving Credit Facility (see Note 13, Lines of Credit and Total Debt Obligations, for further discussion of the Revolving Credit Facility) or stand alone bi-lateral Letter of Credit Agreement. 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 Reserves. Because of 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. At December 31, 2025 and 2024, we had $37.5 million and $10.2 million, respectively, of legal accruals recorded in accrued and other liabilities in the combined consolidated balance sheets.

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 combined 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 December 31, 2025, we had letters of credit and cash deposits totaling $87.7 million and $15.5 million, respectively, at risk associated with options to purchase 10,076 lots.

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16. Concentration of Third-Party Mortgage Purchasers

The following table sets forth the percent of mortgage loans sold by HomeAmerican to its primary third party purchasers during 2025 and 2024. No other third parties purchased greater than 10 percent of our mortgage loans during 2025 or 2024.


	Year Ended December 31,
	2025		2024
PennyMac Loan Services, LLC	24	%	33	%
PHH Mortgage	16	%	19	%
Mr. Cooper	15	%	2	%
Fannie Mae	12	%	6	%

17. Employee Benefit Plans

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years from the date of grant. The option exercise price must be equal to the fair market value (as defined in the plan) of our common stock on the date of grant of the option. Each restricted stock award granted under the 2020 Equity Plan vests seven months after the grant date. As a result of the Merger, the 2020 Director Equity Plan terminated. There are no remaining shares of MDC common stock reserved for awards under the 2020 Director Equity Plan as of December 31, 2025 or 2024.

18. Stock Based Compensation

Stock Option Award Activity. Stock option activity under our option plans, restated as applicable for stock dividends, for the years ended December 31, 2025 and 2024 were as follows.


	Year Ended December 31,
	2025			2024
	Number of Shares	Weighted- Average Exercise Price		Number of Shares	Weighted- Average Exercise Price
Outstanding Stock Option Activity
Outstanding, beginning of year	—	N/A		3,184,473	$	28.45
Granted	—	N/A		—	—
Exercised	—	N/A		(1,653)	17.20
Forfeited	—	N/A		—	N/A
Cancelled	—	N/A		(3,182,820)	28.46
Outstanding, end of year	—	$	—	—	$	—

The total intrinsic value of options (difference between price per share as of the exercise date and the exercise price, times the number of options outstanding) exercised during the year ended December 31, 2024 was $0.1 million. There were no outstanding or exercised options during the year ended December 31, 2025.

Total compensation expense relating to stock options was $0.0 million and $0.0 million for the years ended December 31, 2025 and 2024, respectively. Our recognized tax benefit from this expense for the years ended December 31, 2025 and 2024 was $0.0 million for each year.

As of December 31, 2025, there was no unrecognized compensation cost related to stock options that is expected to be recognized as an expense by the Company in the future.

For the years ended December 31, 2025 and 2024 the Company received cash from the exercise of stock option awards of $0.0 million and $0.0 million, respectively. Our realized tax benefit from stock options exercised or cancelled and automatically converted into the right to receive an amount in cash in connection with the Merger for the years ended December 31, 2025 and 2024 was $0.0 million and $24.7 million, respectively.

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Restricted Stock Award Activity. Non-vested restricted stock awards, restated as applicable for stock dividends, at December 31, 2025 and 2024 and changes during those years were as follows:


	Year Ended December 31,
	2025			2024
	Number of Shares	Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Grant Date Fair Value
Unvested, beginning of year	—	$	—	444,649	$	45.18
Granted	—	—		—	—
Vested	—	—		(444,348)	45.17
Forfeited	—	—		(301)	55.40
Unvested, end of year	—	$	—	—	$	—

Total compensation expense relating to restricted stock awards was $0.0 million and $4.5 million the years ended December 31, 2025 and 2024, respectively. Our recognized tax benefit from this expense for the years ended December 31, 2025 and 2024 was $0.0 million and $2.9 million, respectively.

The total intrinsic value of restricted stock which vested during each of the years ended December 31, 2025 and 2024 was $0.0 million and $27.7 million, respectively.

Our employee equity incentive plans permit us to withhold from the total number of shares that otherwise would be released to a restricted stock or performance share unit award recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due. For the years ended December 31, 2025 and 2024, 0 and 408,477 shares were withheld, respectively, resulting in $0.0 million and $25.6 million of income tax withholding, respectively, being remitted on behalf of the employees.

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19. Stockholders' Equity

Cash Dividends. In the year ended December 31, 2024, we paid dividends of $0.55 per share (prior to the Merger). In 2024 subsequent to the Merger, we paid dividends of $169.6 million. During the year ended December 31, 2025, we paid dividends of $225.2 million.

Common Stock Repurchase Program. Through April 19, 2024, we were authorized to repurchase up to 4,000,000 shares of our common stock. We did not repurchase any shares of our common stock under this repurchase program during the year ended December 31, 2024. The repurchase program ended upon the Merger.

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20. Merger

(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

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

The aggregate consideration of the Merger was approximately $4.9 billion, of which the Company funded $664.6 million. Included within these amounts is $53.2 million of compensation expense for the year ended December 31, 2024, related to the vesting of equity awards as of the closing of the Merger, which are included within the Selling, general and administrative expenses line item within the combined consolidated statements of operations and comprehensive income.

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The Company incurred $39.4 million of transaction costs during the year ended December 31, 2024 in connection with the Merger. During the year ended December 31, 2025, with the issuance of final regulations in 2025 the $4.8 million of excise tax included within prior year transaction cost was no longer applicable and accordingly was reversed in 2025. Both of these amounts were recorded within the Transaction costs line item within the combined consolidated statements of operations and comprehensive income. The Company incurred $19.4 million of expense during the year ended December 31, 2024, related to key executives' transaction bonuses in connection with the Merger, which are included within the Selling, general and administrative expenses line item within the combined consolidated statements of operations and comprehensive income.

21. Common Control Mergers

On December 1, 2025, Parent contributed (for no consideration) to the Company all of Parent's interests in its wholly owned subsidiary Woodside. Woodside is a homebuilding company with operations in Arizona, California, Idaho, Nevada and Utah. On January 1, 2026, Parent contributed (for no consideration) to the Company all of Parent’s interests in its wholly owned subsidiaries Chesmar and Holt. Chesmar and Holt are homebuilding companies with operations in Texas, Oregon, and Washington.

Immediately prior to the contribution, the sole stockholder of the Company was also the sole stockholder of Woodside, Chesmar and Holt. As a result of the common ownership upon closing of the transactions, the acquisitions were considered common-control transactions and were outside the scope of the business combination guidance in ASC 805-50. The entities are deemed to be under common control as of April 19, 2024, which was the date that the sole stockholder acquired control of the Company and, therefore, held control over the Group. The combined consolidated financial statements incorporate Woodside, Chesmar and Holt financial results and financial information for the period beginning April 19, 2024, and the comparative information of the prior period does not include the financial results of Woodside, Chesmar and Holt prior to April 19, 2024.

Assets acquired and liabilities assumed are reported at the Parent's historical carrying amounts and the net assets are recognized in additional paid-in capital. The following table summarizes the historical balances of the assets acquired and liabilities assumed as of April 19, 2024:

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	Woodside		Holt		Chesmar
	(Dollars in thousands)
Assets acquired
Homebuilding:
Cash and cash equivalents	$	20,987	$	19,952	$	27,056
Trade and other receivables	9,386		18,213		6,714
Accounts receivable due from Parent	2,117		1,170		—
Total inventories	1,372,565		493,430		665,338
Property and equipment, net	22,889		1,426		582
Deferred tax assets, net	5,574		5,368		14,321
Prepaid and other assets	67,999		21,982		42,498
Investment in unconsolidated entities	44,374		—		15,262
Goodwill and intangible assets, net	68,951		3,506		168,189
Total homebuilding assets acquired	$	1,614,842	$	565,047	$	939,959
Financial Services:
Cash and cash equivalents	$	—	$	—	$	13,032
Restricted Cash	—		—		433
Mortgage loans held-for-sale, net	—		—		20,301
Due from related parties	—		—		46
Other assets	—		—		8,369
Total financial services assets	—		—		42,181
Total Assets	$	1,614,842	$	565,047	$	982,140

Liabilities assumed
Homebuilding:
Accounts payable	$	49,035	$	16,025	$	33,864
Accrued and other liabilities	107,538		44,365		47,156
Related party payables	3,051		149		304
Related party note	99,900		—		—
Related party line of credit	—		20,000		—
Revolving credit facility	10,000		—		185,000
Notes payable, net	359,831		102,689		100,000
Total homebuilding liabilities assumed	$	629,355	$	183,228	$	366,324
Financial Services:
Accounts payable and accrued liabilities	$	—	$	—	$	2,029
Mortgage repurchase facilities	—		—		24,767
Total financial services liabilities	—		—		26,796
Total Liabilities	$	629,355	$	183,228	$	393,121

Net assets	$	985,487	$	381,819	$	589,019

22. Goodwill

Through the common control acquisition of Woodside, Chesmar and Holt the Company reflected the transferred assets and liabilities at the historical cost of the Parent under ASC 805 Business Combinations, which included $65.2 million and $160.8 million of goodwill related to Woodside and Chesmar, respectively. Homebuilding goodwill is included in our combined consolidated balance sheet in the homebuilding section within goodwill and

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intangible assets, net, and Financial Services goodwill is included in the financial services section within other assets. In accordance with ASC 350, we assess the recoverability of goodwill annually, or more frequently, if impairment indicators are present.

A summary of the carrying amount of goodwill follows (in thousands):


	Homebuilding								Financial Services
	West		Mountain		East		Corporate		Mortgage Operations		Other		Total
Balance as of January 1, 2024	$	6,008	$	—	$	—	$	—	$	—	$	—	$	6,008
Additions	212,536		8,857		—		—		2,545		2,101		226,039
Balance as of December 31, 2024	$	218,544	$	8,857	$	—	$	—	$	2,545	$	2,101	$	232,047
Additions	—		—		—		—		—		—		—
Balance as of December 31, 2025	$	218,544	$	8,857	$	—	$	—	$	2,545	$	2,101	$	232,047

23. Subsequent Events

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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors of the Registrant

The Company's Amended and Restated Bylaws state that the number of directors shall be determined from time to time by resolution of the Company's Board of Directors ("Board"), provided the Board shall consist of at least one member. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires. Directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The following is a brief description of the names, ages, and business experience during at least the past five years of each Director of the Company as of December 31, 2025. Their experience, qualifications, attributes or skills, set forth below, have led to the Board's conclusion that each person should serve as a Director, in light of the Company’s business and structure. None of the Directors holds, or has held during the past five years, any directorship in any company with a class of securities registered pursuant to Section 12 of the Exchange Act, subject to the requirements of Section 15(d) of the Exchange Act or registered as an investment company under the Investment Company Act of 1940. The ages of the directors set forth below are given as of December 31, 2025.

David N. Viger, 50, joined the Company in 2004 and served as Chief Operating Officer for the Company’s subsidiary Richmond American Homes from 2020 to 2024. Effective January 1, 2025, Mr. Viger was appointed as President and Chief Executive Officer of the Company. Mr. Viger graduated from the Naval Academy in Annapolis, MD with a Bachelor of Science and ended his naval career at the rank of Lieutenant. Upon completion of his military obligations, he signed as an unrestricted free agent with the New York Jets and spent 5 years in the NFL.

Robert N. Martin, 47, was appointed Senior Vice President and Chief Financial Officer in May 2015. He also served as the principal accounting officer from May 2015 until August 2020 and resumed that role in June 2021 through January 2023. He previously served as Vice President – Finance and Business Development. In April 2013, he was promoted to the position of Vice President of Finance and Corporate Controller. In his current role, Mr. Martin has direct oversight of the Company's division and corporate accounting, tax, treasury, investor relations, information technology and finance, planning and analysis functions. Additionally, he has served on all of the Company’s Asset Management Committees ("AMCs") and has performed a key role in the Company's capital markets activities. He is an officer, director or both of many of the Company’s subsidiaries. Mr. Martin received a bachelor’s degree in Accounting and Computer Applications from the University of Notre Dame and is both a Certified Public Accountant and a CFA charterholder.

Paris G. Reece III, 71, was formerly the Company’s Chief Financial Officer and Principal Accounting Officer, and retired on August 1, 2008. Since his retirement, Mr. Reece has performed consulting work and served in a volunteer position as the President of Cancer League of Colorado, a leading non-profit organization that was established over fifty years ago to raise money for cancer research and patient care. He joined the Company's Board of Directors in May 2013. As a Certified Public Accountant (Texas, non-practicing), a former Chief Financial Officer and a highly respected person within the homebuilding industry, Mr. Reece is uniquely qualified to provide the Company with strong oversight of accounting and financial matters, as well as the operation of the Company's homebuilding and financial services businesses.

Toru Tsuji, 59, is the Managing Officer of Sekisui House, Chief Executive Officer of SH Residential Holdings, a wholly owned subsidiary of Sekisui House. Before joining Sekisui House as head of Business Strategy Office of the International Business Department in 2019, he worked at Mitsubishi Corporation. He joined Mitsubishi Corporation in 1990 and held various positions in real estate-related business units including as President and Chief Executive Officer of Mitsubishi Corp.-UBS Realty Inc., a former joint venture between Mitsubishi Corporation and UBS AG.

James Richard (Rick) Robideau, 64, is the executive advisor to the Chief Executive Officer of SH Residential Holdings, a wholly owned subsidiary of Sekisui House, and has over 30 years of experience in the U.S. homebuilding business in various positions, including President and Chief Financial Officer of Ford Custom Classic Homes, a home builder in Franklin, Tennessee, from October 2008 to April 2010 and Chief Financial Officer for Woodside Homes, a U.S. subsidiary of Sekisui House group, from April 2010 to April 2022.

Satoshi Yoshimura, 57, is the Senior Vice President, Head Representative of Denver Office of SH Residential Holdings, a wholly owned subsidiary of Sekisui House, and has extensive experience in the investment banking and real estate industries. He joined Sekisui House upon the formation of the International Business Department in 2008. Before joining the International Business Department of Sekisui House, he covered Sekisui House as an industry coverage banker in the real estate group at

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Morgan Stanley. He holds an MBA from the University of California, Berkeley, and a Bachelor of Law from Waseda University in Japan.

Toru Ishii, 59, is the Senior Managing Officer in charge of Development Business including International Business at Sekisui House. He joined Sekisui House in April 1990 and has since experienced sales planning work in the urban development business and engaged in developing new markets such as the hotel development business and the office development business. He has been in charge of the development business since 2012, focusing on human resources development and demonstrating the comprehensive capabilities of the Sekisui House group. He has been steadily promoting enhancement of the business foundation in new markets and the development of the organizational structure of the Sekisui House group. He has been responsible for International Business since 2019.

Keizo Yoshimoto, 61, is the Senior Managing Officer, Head of Corporate Administration Headquarters at Sekisui House. He joined Sekisui House in 1989 and was in charge of planning and sales for effective land utilization and urban development projects. In 1996, he was assigned to the Legal Department of the General Affairs Division, where he was in charge of risk management and organizational restructuring. In 2009, he was appointed to the position of President's Special Assignment in the Secretarial Department in order to respond to various internal and external matters with flexibility and speed, not limited to legal areas. In 2017, he was appointed as General Manager of the Legal Department, where he has promoted the governance reform of the Sekisui House group and is involved in the operation of the Board of Directors, the Personnel Affairs and Remuneration Committee, management meetings and other corporate bodies.

Toru Fujita, 58, is the Managing Officer in charge of Accounting and Finance of Sekisui House and has been the officer in charge of accounting and finance since he joined Sekisui House in June 2022. Prior to that, he spent nearly 31 years with Mitsubishi UFJ Financial Group, including more than ten years of experience in the areas of financial planning and analysis, regulatory and economic capital management and allocation and bond issuance. He was posted in the United States for around ten years, where he worked in New York, New York, at the Head Office for the Americas, San Francisco, California, at Union Bank, and completed a one-year MBA program at the Massachusetts Institute of Technology in Boston, Massachusetts.

Kenichi Kumemoto, 53, has 30 years of experience in the energy business and the real estate business, both in Japan and overseas (and in almost all asset types including residential, office, commercial, hotel, and logistics facilities) at Mitsubishi Corporation, and had experience in mergers and acquisitions as well as post-merger integration matters, as the CEO of a retail facility operating company. He has management experiences in the United States, China and the Philippines. In 2021, he was appointed President and CEO of Ascot, a listed residential developer based in Japan, and launched new businesses, such as logistics development and asset management. He joined Sekisui House in 2022 and is Operating Officer and Head of International Strategy Department.

George C. Yeonas, 71, has 34 years of experience in the real estate and homebuilding industry, including Chief Operating Officer positions at both public and private homebuilders, and has been an advisor to Woodside Homes since 2016, as well as to SH Residential Holdings, a wholly owned subsidiary of Sekisui House, on the acquisition of Chesmar Homes and SHUS Holdings. He has a deep knowledge of real estate/ESG. He also teaches at Georgetown University.

The following table provides the membership of each standing committee of the Board in 2025:

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Name

Audit

Compensation

Toru Fujita

Toru Ishii

Kenichi Kumemoto

David N. Viger

Robert N. Martin

Paris G. Reece

Rick Robideau

Toru Tsuji

George C. Yeonas

Keizo Yoshimoto

Satoshi Yoshimura

C = Chair; M = Member

Executive Officers of the Registrant

Set forth below are the names and offices held by the executive officers of the Company as of December 31, 2025. The Board, after reviewing the functions performed by the Company's officers, has determined that, for purposes of Item 401 of SEC Regulation S-K, only these officers are deemed to be executive officers of the Company. These officers also constitute our Named Executive Officers ("NEOs").

The executive officers of the Company hold office until their successors are duly elected and qualified or until their resignation, retirement, death or removal from office. Biographical information on Messrs. Viger and Martin, who serve as Directors and executive officers of the Company, is set forth under "Directors of the Registrant" above.

Name

Age

Position

David N. Viger

President and Chief Executive Officer

Robert N. Martin

Senior Vice President and Chief Financial Officer

On December 16, 2024, the Board appointed, effective January 1, 2025, David N. Viger and Robert N. Martin to fill vacancies as Directors of the Company and also appointed Mr. Viger as President and Chief Executive Officer of the Company effective January 1, 2025.

Delinquent Section 16(a) Reports

The Company's executive officers and Directors and certain owners of more than ten percent of the Company's common stock are required under Section 16(a) of the Exchange Act to file initial reports of ownership and reports of changes in ownership of common stock of the Company with the SEC. As all common stock of the Company was owned by the SH Residential Holdings, LLC during the year-ended December 31, 2025, no such reports were required to be filed.

Audit Committee

The Audit Committee of the Board of Directors ("Audit Committee"), which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act, consists of Mr. Reece, who serves as Chairman, Mr. Fujita, Mr. Yoshimoto, Mr. Robideau and Mr. Yeonas. Messrs. Reece and Yeonas of the Audit Committee are "independent" and "financially literate" in the judgment of the Board, as defined in the listing standards of the NYSE and the rules of the SEC. Messrs. Fujita, Robideau and Yoshimoto are considered "financially literate" but not "independent" in the judgment of the Board, as defined in the rules of the SEC. The Board has determined that Mr. Reece is an "audit committee financial expert" as defined by applicable SEC regulations. The Board believes that his experience and qualifications described above under "Directors of the Registrant" qualify him to act as the Audit Committee's audit committee financial expert. The Audit Committee met five times during 2025.

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The organization, functions and responsibilities of the Audit Committee are described in the restated charter for the Audit Committee, which is posted on the investor relations section of the Company's website, ir.richmondamerican.com.

Code of Ethics

We will provide to any shareholders or other person without charge, upon request, a copy of our Corporate Code of Conduct, code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (collectively “senior financial officers”) and the charters for our Audit Committee and the Compensation Committee of the Board of Directors ("Compensation Committee"). You may obtain these documents on our website at ir.richmondamerican.com, under our Investor Relations section or by contacting our Investor Relations department at 1-866-424-3395. Our intention is to post on our website any amendments to or waivers from our code of ethics applicable to our senior financial officers if such disclosure is required.

Corporate Governance/Nominating Committee

Following the Merger, certain oversight functions with respect to the business and affairs of the Company were assumed by Parent, including functions previously performed by the Corporate Governance/Nominating Committee of the Company's Board of Directors, which were discontinued. As the Company is a wholly-owned subsidiary of Parent, the Company does not maintain procedures by which security holders may recommend nominees to the Company Board.

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Item 11. Executive Compensation.

Executive Compensation - Compensation Discussion and Analysis

Executive Summary

For fiscal 2025, our named executive officers were:


Named Executive Officers
David N. Viger			President and Chief Executive Officer (“CEO”)
Robert N. Martin			Senior Vice President and Chief Financial Officer (“CFO”)

Components of Executive Compensation

On July 12, 2024, the Company entered into employment agreements with the CEO (then in his role as COO) and CFO ("Employment Agreement(s)") in conjunction with the closing of the Merger which provided for their continued employment.

The base salary for the CEO was set by the Compensation Committee on January 16, 2025, following his appointment to the CEO role on January 1, 2025. The base salary for the CFO was established based on the offer made to him in connection with his Employment Agreement.

The 2025 annual incentive compensation was based on the CEO and CFO's Employment Agreements. The 2025 target award for the CEO's annual incentive compensation was increased to $4,500,000 by the Compensation Committee, following his appointment to the CEO role on January 1, 2025. The CEO and CFO both received their minimum annual guaranteed award under their Employment Agreements of $2,250,000 and $1,700,000, respectively. The Employment Agreements also allow additional incentive amounts to be paid as a discretionary special bonus. For 2025, the Compensation Committee authorized the CEO and CFO to be paid additional amounts as discretionary special bonuses of $1,125,000 and $850,000, respectively, in consideration of their performance amidst difficult market conditions and their extra efforts in the integration of the U.S. homebuilding businesses.

The 2025 long term incentive compensation was in the form of cash-based awards that vest, subject to the executives' continuous service with the Company, on January 1st of the second year following the year of the grant date. The 2025 long term incentive awards granted to the CEO and CFO were $2,250,000 and $1,700,000, respectively, the amounts the Compensation Committee determined appropriate, in light of the rest of the compensation package, to encourage Executive retention through the term of the award vesting. The awards were granted on February 24, 2025 and will vest, subject to the executives' continuous service with the Company, on January 1, 2027.

Other Compensation Considerations

Clawback Policy

On July 24, 2023, our Board adopted a Clawback Recovery Policy. The policy requires the Company to recover the amount of "erroneously awarded" incentive-based compensation received by current or former executive officers in the event that the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirements under the securities laws.

Other Compensation

In 2025, our executive officers also received compensation in the form of 401(k) employer contributions and cell phone allowances.

Executive Compensation Tables

Summary Compensation Table

For the fiscal years ended December 31, 2025, 2024 and 2023, the following table summarizes the compensation of the Company’s named executive officers.

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Name and Principal Position	Year	Salary ($)		Bonus ($) 2		Stock Awards ($) 1		Option Awards ($)	Non-Equity Incentive Plan Comp ($) 2		Change in Pension and Nonqualified Deferred Comp Earnings ($)	All Other Comp ($)		Total ($)
David N. Viger, President and Chief Executive Officer 3	2025	$	900,000	$	1,125,000	$	—	N/A	$	4,500,000	N/A	$	792	$	6,525,792
Robert N. Martin, Senior Vice President and Chief Financial Officer	2025	$	850,000	$	850,000	$	—	N/A	$	3,400,000	N/A	$	11,142	$	5,111,142
	2024	$	850,000	$	236,533	$	—	N/A	$	3,163,467	N/A	$	11,142	$	6,810,620
	2023	$	850,000	$	3,500,000	$	2,738,169	N/A	N/A		N/A	$	9,870	$	7,098,039

1 The amounts shown in the "Stock Awards" column are based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of the following:

2023

–For Mr. Martin, Performance Share Units ("PSUs") were granted on August 23, 2023. These awards are performance based, and, therefore, the amounts in the table above include $738,204 reflecting the aggregate grant date fair value of the awards ($42.18) multiplied by the target number of shares. Assuming achievement of the highest level of performance for these awards, the grant date fair value of the performance-based equity awards total $1,476,409.

–For Mr. Martin, this column includes $1,999,965 in RSAs that were granted February 3, 2023 based on his 2022 performance.

For a description of assumptions used in valuing the awards, please see Note 19 (Stock Based Compensation).

2 The non-equity incentive plan compensation amounts in 2024 and 2025 were paid in cash in accordance with the terms of Messrs. Viger and Martin's Employment Agreements, as compensation for that year's performance. The amounts were paid in the subsequent year. In the year ended 2024, Mr. Martin earned $3,163,467. The Compensation Committee, in their discretion, awarded Mr. Martin a special bonus of $236,533. In the year ended 2025, Messrs. Viger and Martin earned $2,250,000 and $1,700,000, respectively. The Compensation Committee, in their discretion, awarded Messrs. Viger and Martin a special bonus of $1,125,000 and $850,000, respectively. For Messrs. Viger and Martin, the non-equity incentive plan column in 2025 also includes $2,250,000 and $1,700,000, respectively, of cash based long term incentive awards granted on February 24, 2025.

3 Mr. Viger was appointed as President and Chief Executive Officer effective as of January 1, 2025.

All Other Compensation

The table below provides a breakdown of all other compensation for 2025 for the named executive officers:


Name	401(k) Match 1		Other 2		Total
David N. Viger	$	—	$	792	$	792
Robert N. Martin	$	10,350	$	792	$	11,142

1 401(k) match represents amounts paid in 2025 based on 2024 401(k) deferrals.

2 The amounts shown for “Other” represent cell phone allowances.

Grants of Plan-Based Awards in 2025

The following table sets forth certain information with respect to awards made during 2025 to our named executive officers. There were no equity grants during 2025.

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		Estimated possible payouts under non-equity incentive plan awards
Name	Grant Date	Threshold ($)	Target ($)	Maximum ($)
David N. Viger	—	2,250,000	4,500,000	9,000,000	1
David N. Viger	2/24/2025		2,250,000		2
Robert N. Martin	—	1,700,000	3,400,000	6,800,000	1
Robert N. Martin	2/24/2025		1,700,000		2

1 Messrs. Viger and Martin received the "threshold" guaranteed award of $2,250,000 and $1,700,000, respectively. They had the opportunity to earn the respective "target" awards listed above, based on achievement of specified performance criteria and to earn the respective "maximum" awards listed above, based on the Company's outperformance of goals.

2 This represents a cash based long term incentive award that will vest, subject to the executives continuous service with the Company, on January 1, 2027.

Outstanding Equity Awards at December 31, 2025

There were no unexercised options, unvested restricted stock or unvested performance share units awarded to our named executive officers that were outstanding as of December 31, 2025.

Option Exercises and Stock Vested in 2025

There were no options exercised or stock vested by our named executive officers during the year ended December 31, 2025.

EMPLOYMENT AGREEMENTS

Mr. Viger

On July 12, 2024, the Company and Mr. Viger (an “Executive”) entered into an Employment Agreement. The material terms of the Employment Agreements are summarized below.

Employment Term: The initial term is through December 31, 2025. The Employment Agreements automatically extend for one-year terms unless (i) the Company elects to terminate by sixty days written notice, or (ii) the Executive is terminated earlier.

Base Salaries: For the initial term, Mr. Viger's base salary is $650,000 per year. The base salary for the Executive in additional terms may only be reduced below his prior year's base salary with the consent of the Executive and the Company. In connection with the appointment to President and Chief Executive Officer, the Compensation Committee determined that David N. Viger's base salary would increase to $900,000 annually effective as of January 11, 2025.

Incentive Compensation: Mr. Viger is eligible to earn annual incentive compensation based upon achievement of goals to be determined, from time to time, by the Compensation Committee. Mr. Viger is also eligible to participate in the Company's long term incentive plan and receive special bonuses at the Company's discretion.

Group Medical Insurance Benefits: The Company provides group medical, dental and vision insurance benefits to Mr. Viger during employment.

Long-Term Disability Benefits: The Company will provide the Executive with long-term disability benefits. Under the benefits, the annual after-tax amount received by the Executive would equal the after-tax amount of his base salary for the year in which he becomes disabled. This long-term disability benefit would be paid monthly until the earlier of the end of the Executive's disability or prior to his becoming totally disabled.

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Vacation: The Executive is entitled to receive not less than six weeks of vacation each year without carryover from year to year.

Termination for Cause: An Executive may be terminated for “Cause,” as defined in the Employment Agreement. If terminated for Cause, he will only be entitled to his “Accrued Benefits” of base salary through the termination date, annual incentive compensation earned but unpaid with respect to the year prior to the year of termination.

“Cause” is defined in the Employment Agreements as: (1) Executive’s willful refusal to perform the material duties consistent with his position and which are reasonably required or requested of him hereunder (other than as a result of total or partial incapacity due to physical or mental illness) by the Parent Designee for thirty days after having received written notice of such refusal from the Parent Designee and having failed to commence to perform such duties within such period, (2) Executive’s commission of material acts of fraud, dishonesty or misrepresentation in the performance of his duties hereunder, (3) any final, non-appealable conviction of Executive for an act or acts on Executive’s part constituting a felony under the laws of the United States or any state thereof, or (4) any material uncured breach of the provisions of Sections 6(a) and 6(b) hereof which continues for thirty days after Executive has received written notice of such breach from the Company.

Termination by the Company without Cause: The Executive's employment may be terminated by the Company at any time without cause. If so, the Executive, in addition to the Accrued Benefits, is entitled to a lump sum "Termination Payment" of : (1) an amount equal to the aggregate base salary the Executive would have earned had he remained employed through the remainder of the Initial Term (or, if the Termination occurs during an Additional Term, the aggregate Base Salary Executive would have earned had he remained employed through the remainder of such Additional Term); and (2) if the Termination Date occurs in 2024, the Target Award for 2024 and 2025; if the Termination Date occurs in 2025, the Target Award for 2025; and if the Termination Date occurs during any Additional Term, the target Annual Incentive Compensation for the year in which the Termination Date occurs.

Termination due to Retirement, Death, Presumed Death or Disability: If the Executive’s employment hereunder is terminated due to the Executive’s death, presumed death or total disability, the Executive, or the Executive’s beneficiary or estate, as applicable, will receive the Accrued Benefits and the Termination Payment.

Excess Parachute Payments: Certain payments that Mr. Viger may receive could be subject to an excise tax as an “excess parachute payment” under the Internal Revenue Code. This could occur following a Change in Control or through other payments made to the Executives. The Employment Agreement provide for calculations to compare the after-tax effect to the Executive of (a) automatically reducing the amount of the payment sufficient to avoid triggering any excise tax or, in the alternative, (b) paying the full awarded payment, requiring the executive to be fully responsible for payment of the excise tax, whichever alternative results in the greatest after-tax benefit to the executive.

See "Potential Payments Upon Termination or Change in Control" below for additional information.

Mr. Martin

On July 12, 2024, the Company and Mr. Martin (an “Executive”) entered into an Employment Agreement. The material terms of the Employment Agreements are summarized below.

Base Salaries: For the initial term, Mr. Martin's base salary is $850,000 per year. The base salary for the Executive in additional terms may only be reduced below his prior year's base salary with the consent of the Executive and the Company.

Incentive Compensation: Mr. Martin is eligible to earn annual incentive compensation based upon achievement of goals to be determined, from time to time, by the Compensation Committee. Mr. Martin is also eligible to participate in the Company's long term incentive plan and receive special bonuses at the Company's discretion.

Group Medical Insurance Benefits: The Company provides group medical, dental and vision insurance benefits to Mr. Martin during employment.

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Vacation: The Executive is entitled to receive not less than six weeks of vacation each year without carryover from year to year.

Excess Parachute Payments: Certain payments that Mr. Martin may receive could be subject to an excise tax as an “excess parachute payment” under the Internal Revenue Code. This could occur following a Change in Control or through other payments made to the Executives. The Employment Agreement provide for calculations to compare the after-tax effect to the Executive of (a) automatically reducing the amount of the payment sufficient to avoid triggering any excise tax or, in the alternative, (b) paying the full awarded payment, requiring the executive to be fully responsible for payment of the excise tax, whichever alternative results in the greatest after-tax benefit to the executive.

See "Potential Payments Upon Termination or Change in Control" below for additional information.

Certain Other Change in Control Agreements

Mr. Martin entered into a change in control agreement with the Company effective May 23, 2015. Further, Mr. Martin entered into a change in control agreement amendment effective April 19, 2024, subject to and in conjunction with the closing of the Merger.

Upon a termination of Mr. Martin's employment for any reason (other than a termination by the Company (or a successor) for cause) within two years following such change in control (or prior to the change in control if Employee experiences an earlier termination without cause), Mr. Martin shall also be entitled to continue to participate in each of the Company’s employee benefit plans, policies or arrangements which provide insurance and medical benefits on the same basis as was provided to them as of immediately prior to the date of termination of employment for a period of twelve months after the date of termination of employment;

In the agreement, the employee has agreed to be paid those amounts, if any, in annual installments and over the shortest period of time in which they may be paid and not be treated as "excess parachute payments."

See "Potential Payments Upon Termination or Change in Control" below for additional information.

Mr. Viger entered into a change in control agreement effective April 19, 2024, subject to and in conjunction with the closing of the Merger.

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Upon a termination of Mr. Viger's employment for any reason (other than a termination by the Company (or a successor) for cause) within two years following such change in control (or prior to the change in control if Employee experiences an earlier termination without cause), Mr. Viger shall also be entitled to continue to participate in each of the Company’s employee benefit plans, policies or arrangements which provide insurance and medical benefits on the same basis as was provided to them as of immediately prior to the date of termination of employment for a period of twelve months after the date of termination of employment;

See "Potential Payments Upon Termination or Change in Control" below for additional information.

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Potential Payments Upon Termination or Change in Control

The following table shows potential payments to our named executive officers under existing contracts for various scenarios involving a change in control or termination of employment, assuming a triggering event on the last business day of 2025. Please see the narrative above under "Employment Agreements" and "Certain Other Change in Control Agreements" for a description of payments contemplated by these agreements.


Name	Benefit	Termination w/o Cause			Termination w/ Cause			Voluntary Termination			Death			Disability
David N. Viger	Severance Pay	$	900,000	1							$	900,000	1	$	900,000	1
	Ann. Incentive Comp.	$	4,625,000	2				$	—	5	$	4,625,000	2	$	4,625,000	2
	Health Care Benefits	$	51,164	3	$	51,164	3	$	—	3	$	51,164	4	$	51,164	3
Robert N. Martin	Severance Pay	$	850,000	1							$	850,000	1	$	850,000	1
	Bonus Payment	$	3,500,000	2				$	—		$	3,500,000	2	$	3,500,000	2
	Health Care Benefits	$	51,164	3	$	51,164	3	$	—		$	51,164	4	$	51,164	3

1 Under the Executive's Employment Agreement, this is calculated as the aggregate base salary the Executive would have earned had they remained employed through the remainder of the additional term (December 31, 2026).

2 Under the Executive's Employment Agreement, this is calculated as of the Target Award of the annual incentive compensation for 2026.

3 Under the Executive's Employment Agreement, the Executive shall be entitled to receive a lump-sum payment representing an amount equal to twelve times the monthly Company's employee benefit plans, policies or arrangements which provide insurance and medical benefits on the same basis as was provided to the Executive prior to the event. This amount is estimated based on 2025 costs incurred by the Company.

2025 Director Compensation

Compensation Structure

The compensation program for Mr. Reece and Mr. Yeonas, the only Independent, Non-Employee Directors compensated by the Company, is comprised of two elements:

(i) a monthly cash fee consisting of a proportionate payment of an annual retainer and specified fees for attendance at various monthly meetings, and (ii) long term incentive compensation in the form of a cash based award

The remaining Non-Employee Directors are compensated through the Parent, with no retainer or committee fee agreements through the Company.

Our Board reviews Director compensation annually in collaboration with the Compensation Committee with reference to comparable individual and peer group director fees and prevailing market practices.

2025 Compensation

Director compensation for 2025 was paid in accordance with the in-place structure outlined above.

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The following table sets forth information regarding the compensation of the Company's Non-Employee Directors for the fiscal year ended December 31, 2025. The two Directors (Messrs. Viger and Martin) who are executive officers receive no compensation for serving as Directors in addition to the compensation received as executive officers.


Name	Fees Earned or Paid in Cash ($)		All Other Compensation ($) 1		Total ($)
Paris G. Reece III	$	215,000	$	150,000	$	365,000
Toru Fujita	$	—	N/A		$	—
Toru Ishii	$	—	N/A		$	—
Kenichi Kumemoto	$	—	N/A		$	—
Rick Robideau	$	—	N/A		$	—
Toru Tsuji	$	—	N/A		$	—
George C. Yeonas	$	184,500	$	150,000	$	334,500
Keizo Yoshimoto	$	—	N/A		$	—
Satoshi Yoshimura	$	—	N/A		$	—

1 This represents a cash based long term incentive awards granted during 2025 that will vest, subject to the directors continuous service with the Company, on January 1, 2027.

The Non-Employee Directors Mr. Reece and Mr. Yeonas earned a retainer in the amount of $150,000 and $134,500 annually, respectively, paid monthly. Further, they earned $3,000 for each Audit Committee meeting attended and $2,500 for each Compensation Committee meeting attended. In addition, Mr. Reece received a retainer in the amount of $1,250 per month for his service as the chairman of the Audit Committee.

Compensation Committee Interlocks and Insider Participation

The following persons served as members of the Compensation Committee during 2025: Toru Ishii, Rick Robideau, Toru Tsuji and Satoshi Yoshimura. None of the Committee members were, during the last fiscal year, officers or employees of the Company, none were formerly officers of the Company and none had a material interest in a "related person" transaction since the beginning of 2025. During 2025, none of our executive officers served as a member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a member of our Board or Compensation Committee.

Compensation Committee Report

The Compensation Committee met one time during 2025. The Compensation Committee hereby confirms that it has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the 2025 Annual Report on Form 10-K.


			COMPENSATION COMMITTEE Toru Ishii, Chairman Rick Robideau David Barclay Yoshiyuki Kamiya Keizo Yoshimoto Shigeki Enomoto

PEO Pay Ratio Disclosure

Pursuant to SEC rules, to determine our median employee, we used W-2 compensation for our entire employee population, all of whom are located within the United States. As of December 31, 2025, we identified our median employee (excluding our Executive Chairman, who is our principal executive officer, from the calculation). For the fiscal year ended December 31, 2025, we calculated that median employee’s total compensation using the same methodology that we used to calculate the total compensation for our Executive Chairman. The 2025 annual total compensation of the median employee and

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our Executive Chairman, respectively, were $109,209 and $6,525,792. The ratio of the 2025 annual total compensation for our Executive Chairman to that of our median employee was 60 to 1.

Compensation Policies and Practices and Risk Management

The Company believes that its compensation policies and practices for its employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company.

As part of its annual processes, the Compensation Committee reviews the Company’s compensation policies and practices to confirm that the programs are designed in a manner that does not motivate individuals or groups to take risks reasonably likely to have a material adverse effect on the Company. Based on the Compensation Committee’s assessment of risk, the Company believes that its compensation policies and practices for its employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company, and that such policies and practices are designed with strong oversight mechanisms in place.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans

There were no equity compensation plans in place as of December 31, 2025.

Ownership of Directors and Officers

There was no common stock beneficially owned by the Company's named executive officers and the Directors of the Company as of December 31, 2025.

Ownership of Certain Beneficial Owners

The table below sets forth information with respect to those persons known to the Company, as of February 7, 2025, to have owned beneficially 5% or more of the outstanding shares of common stock. The information as to beneficial ownership is based upon statements filed by such persons with the SEC under Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended.


Name and Address of Beneficial Owner	Number of Shares of Outstanding Common Stock Owned Beneficially	Percent of Class 1
SH Residential Holdings, LLC. 460 West 50 North, Suite 200, Salt Lake City, Utah 84101	100	100.00	%

___________________

1 Through the Merger, all common stock is held by SH Residential Holdings, LLC., an affiliate of the Parent.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Review of Transactions With Related Persons

Our policies require that full information be disclosed regarding transactions with related persons, without mandating how such transactions are to be addressed, so that they may be considered on their own merits. Specifically, our Corporate Code of Conduct, in addressing conflicts of interest, notes that personal interests of our employees and Directors and their family members could come into conflict, or create the appearance of a conflict, with the Company's interest. Accordingly, the Code of Conduct requires all employees (including our executive officers) and our Directors to immediately report conflicts of interest or transactions that could create the appearance of a conflict of interest. These reports are to be made immediately to a Company compliance officer (as identified in the Code of Conduct), the Company's Asset Management Committees, or, for members of the Company's Board of Directors, to the Audit Committee, for a determination as to compliance with the Code of Conduct.

In addition, the Audit Committee's charter provides for the Committee to be informed of any proposed related party transactions so that the Committee can review the proposed transaction. In support of this and the Company's SEC reporting

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requirements, the following written procedure has been adopted. Specifically, the executive officers and Directors are to inform the Committee of any potential related party transactions and, each quarter, are to attest to the existence of any related party transactions. The Company's legal department reports on a monthly basis to the Audit Committee any new related party transactions between the Company (or any of its subsidiaries) and any of the executive officers and Directors, including any of their family members. Also, our CFO reports on a quarterly basis to the Audit Committee as to the best of the CFO’s and CEO’s knowledge, whether or not any related party transactions have occurred.

Transactions With Related Persons

Note 15, Related Party Transactions, discusses and quantifies the dollar amounts of various transactions between the Company and Parent and its affiliates. Woodside had previously entered into certain financing arrangements with Parent and its affiliates, which financing arrangements were either terminated or transferred to the Parent prior to the Woodside Merger on December 1, 2025, with no continuing obligations existing for either Woodside or SHUS. In addition, the Company is party to a trademark license agreement with Parent and its affiliates, purchases land and certain construction materials from Parent and its affiliates and Woodside enters into forward commitment agreements with an affiliate of the Parent to facilitate financing offerings for their homes closings.

Director Independence.

Under the NYSE listing standards, no director qualifies as "independent" unless the Board affirmatively determines that the director has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others.

With respect to the determination of Mr. Reece’s independence, the Board considered that, until his retirement on August 1, 2008, he was the Executive Vice President and Chief Financial Officer of the Company. The Board concluded that the amount was not significant and is independent under the NYSE listing standards.

The Board determined that Mr. Yeonas has no material relationship with the Company and is independent under the NYSE listing standards.

Each of Mr. Fujita, Mr. Ishii, Mr. Kumemoto, Mr. Robideau, Mr. Tsuji, Mr. Yoshimoto and Mr. Yoshimura are not considered independent under NYSE listing standards as they are employed by the Parent and affiliates of the Parent.

Item 14. Principal Accounting Fees and Services.

Audit Fees and All Other Fees

A summary of the fees of Ernst & Young LLP Denver, Colorado (PCAOB 00042) for the years ended December 31, 2025 and 2024 are set forth below:


	2025		2024
Audit Fees 1	$	2,640,873	$	1,610,297
Audit-Related Fees	—		—
Tax Fees 2	5,707		6,783
All Other Fees	—		—
Total Fees	$	2,646,580	$	1,617,080

1 Consists of fees and expenses for the audit of consolidated financial statements, PCAOB AS 4105 interim reviews, audit of combined consolidated financial statements required by Rule 3-05 of Regulation S-X and services rendered in connection with statutory and regulatory filings (includes the audit of HomeAmerican Mortgage Corporation).

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101						The following financial statements, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets at December 31, 2025 and December 31, 2025, (ii) Consolidated Statements of Operations and Comprehensive Income for each of the three years in the period ended December 31, 2025, (iii) Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2025, (iv) Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2025; and (iv) Notes to the Consolidated Financial Statements, tagged as blocks of text.

104						Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)

____________________

*Incorporated by reference.

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Item 16. Form 10-K Summary.

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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. (Registrant)

Date: March 12, 2026	By:	/s/ Robert N. Martin
		Robert N. Martin
		Director, Senior Vice President and Chief Financial Officer (principal financial officer and duly authorized officer)


Date: March 12, 2026	By:	/s/ Derek R. Kimmerle
		Derek R. Kimmerle
		Vice President, Controller and Chief Accounting Officer (principal accounting officer and duly authorized officer)

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POWER OF ATTORNEY

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ David N. Viger	Director, President and Chief Executive Officer	March 12, 2026
David N. Viger	(principal executive officer)

/s/ Robert N. Martin	Director, Senior Vice President and Chief Financial Officer	March 12, 2026
Robert N. Martin	(principal financial officer)


/s/ Derek R. Kimmerle	Vice President, Controller and Chief Accounting	March 12, 2026
Derek R. Kimmerle	Officer (principal accounting officer)

/s/ David Barclay	Director	March 12, 2026
David Barclay

/s/ Shigeki Enomoto	Director	March 12, 2026
Shigeki Enomoto

/s/ Toru Fujita	Director	March 12, 2026
Toru Fujita

/s/ Toru Ishii	Director	March 12, 2026
Toru Ishii

/s/ Yoshiyuki Kamiya	Director	March 12, 2026
Yoshiyuki Kamiya

/s/ Paris G. Reece III	Director	March 12, 2026
Paris G. Reece III

/s/ Rick Robideau	Director	March 12, 2026
Rick Robideau

/s/ Jennifer Whip	Director	March 12, 2026
Jennifer Whip

/s/ Masakatsu Yoshida	Director	March 12, 2026
Masakatsu Yoshida

/s/ Fumie Yoshii	Director	March 12, 2026
Fumie Yoshii

/s/ Keizo Yoshimoto	Director	March 12, 2026
Keizo Yoshimoto

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			Page

Sekisui House U.S., Inc. and Subsidiaries
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets at December 31, 2025 and December 31, 2024			F-4
Consolidated Statements of Operations and Comprehensive Income for each of the Three Years in the Period Ended December 31, 2025			F-5
Consolidated Statements of Stockholders' Equity for each of the Three Years in the Period Ended December 31, 2025			F-6
Consolidated Statements of Cash Flows for each of the Three Years in the Period Ended December 31, 2025			F-7
Notes to Consolidated Financial Statements			F-9


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation of M.D.C. Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed April 19, 2024). *

3.2						Amended and Restated Bylaws of M.D.C. Holdings, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed April 19, 2024). *

4.1						Indenture dated as of December 3, 2002, by and among MDC and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 of the Company's Form S-3/A filed September 1, 2004). *

4.2						Supplemental Indenture (6.000% Senior Notes due 2043), dated as of January 10, 2013, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed January 10, 2013). *

4.3						Second Supplemental Indenture (6.000% Senior Notes due 2043), dated as of June 23, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K dated December 31, 2021). *


4.4						Supplemental Indenture (3.850% Senior Notes due 2030), dated as of January 9, 2020, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K filed January 9, 2020). *

4.5						Second Supplemental Indenture (3.850% Senior Notes due 2030), dated as of June 23, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.6 of the Company's Annual Report on Form 10-K dated December 31, 2021). *

4.6						Supplemental Indenture (2.500% Senior Notes due 2031), dated as of January 11, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K filed January 11, 2021). *


4.7						Second Supplemental Indenture (2.500% Senior Notes due 2031), dated as of June 23, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.8 of the Company's Annual Report on Form 10-K dated December 31, 2021). *

4.8						Supplemental Indenture (3.966% Senior Notes due 2061), dated as of August 6, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K filed August 6, 2021). *

10.1						First Amendment to Credit Agreement dated as of October 15, 2025, among the Company, the Lenders party thereto, U.S. Bank National Association, as administrative agent, and U.S. Bank National Association , Mizuho Bank, Ltd, Truist Securities, Inc. Wells Fargo Securities, LLC, BMO Bank N.A. and PNC Capital Markets LLC, as co-syndication Agents, Joint Lead Arrangers and Joint Book Runners (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed November 19, 2024).*

10.2						Second Amended and Restated Master Repurchase Agreement among HomeAmerican Mortgage Corporation, U.S. Bank National Association as Agent and the other Buyers party thereto dated as of September 20, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed September 20, 2024). *

10.3						Form of Indemnification Agreement entered into between the Company and members of its Board of Directors (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed October 26, 2006).*

10.4						Form of Indemnification Agreement entered into between the Company and certain of its officers (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed October 26, 2006).*

10.5						Employment Agreement between David N. Viger and the Company, dated as July 12, 2024 (incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K dated December 31, 2024). *

10.6						Change in Control Agreement between the Company and David N. Viger, dated as of July 12, 2022 (incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K dated December 31, 2024). *

10.7						Amendment to Change in Control Agreement between the Company and David N. Viger, dated as of April 19, 2024 (incorporated by reference to Exhibit 10.7 of the Company's Annual Report on Form 10-K dated December 31, 2024). *

10.8						Employment Agreement between Robert N. Martin and the Company, dated as of July 12, 2024 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended September 30, 2024) *

10.9						Change in Control Agreement between the Company and Robert N. Martin, dated as of May 23, 2015 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed May 19, 2015).*

10.10						Amendment to Change in Control Agreement between the Company and Robert N. Martin, dated as of April 19, 2024 (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q for the quarter ended June 30, 2024) *

10.11						Agreement and Plan of Merger, dated as of January 17, 2024, by and among SH Residential Holdings, LLC, Clear Line, Inc. and M.D.C. Holdings, Inc. (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed January 18, 2024). *

21						Subsidiaries of the Company

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.

97						Clawback Recovery Policy.