Financial Analysis

"Commitments and contingencies Letters of credit and surety bonds In the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $357.1 million and $3.1 billion, respectively, at December 31, 2025, and $321.1 million and $2.9 billion, respectively, at December 31, 2024. In the event any such letter of credit or surety bonds is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn. Our surety bonds generally do not have stated expiration dates; rather, we are released from the surety bonds as the underlying contractual performance is completed. Because significant construction and development work has been performed related to the applicable projects but has not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. Litigation …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt Our notes payable are summarized as follows ($000s omitted): December 31, 2025 2024 5.500% unsecured senior notes due March 2026 (a) $ 251,867 $ 251,867 5.000% unsecured senior notes due January 2027 (a) 337,277 337,277 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 Net premiums, discounts, and issuance costs (b) (5,231) (6,324) Total senior notes $ 1,583,913 $ 1,582,820 Other notes payable 47,185 35,766 Notes payable $ 1,631,098 $ 1,618,586 Estimated fair value $ 1,755,396 $ 1,701,270 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. (b) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes. The indentures governing the senior notes impose certain restrictions on the incurrence of additional debt along with other limitations. At December 31, 2025, we were in compliance with all of the covenants and requirements under the senior notes. We retired outstanding debt totaling $355.8 million and $123.3 million during 2024 and 2023, respectively. The retirements in 2024 included open market repurchases of $193.4 million and $106.6 million of our unsecured senior notes scheduled to mature in 2026 and 2027, respectively. Our total repurchases during the twelv …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Stock compensation plans We maintain a stock award plan for both employees and non-employee directors. The plan provides for the grant of a variety of equity awards, including time-based and performance-based restricted share units (""RSUs"") to key employees for periods not to exceed ten years. Non-employee directors are awarded an annual distribution of common shares. RSUs represent the right to receive an equal number of common shares and are converted into common shares upon distribution. Time-based RSUs generally cliff vest after three years, and RSU holders earn cash or accrued dividends during the vesting period. Performance-based RSUs vest upon attainment of the stated performance targets and minimum service requirements and are converted into common shares upon distribution. As of December 31, 2025, there were 9.9 million shares that remained available for grant under the plan. Our stock compensation expense is presented below ($000's omitted): 2025 2024 2023 RSUs $ 33,388 $ 31,821 $ 28,112 Other long-term incentive plans 21,435 22,869 20,088 $ 54,823 $ 54,690 $ 48,200 RSUs A summary of RSUs is presented below (000s omitted, except per share data): 2025 2024 2023 Shares Weighted- Average Per Share Grant Date Fair Value Shares Weighted- Average Per Share Grant Date Fair Value Shares Weighted- Average Per Share Grant Date Fair Value Outstanding, beginning of year 1,431 $ 67 1,659 $ 54 1,628 $ 48 Granted 317 111 307 107 714 59 Distributed (573) 55 (496) 46 (550) 44 For …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"Fair value disclosures ASC 820, ""Fair Value Measurements and Disclosures,"" provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows: Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities. Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active. Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques Our assets and liabilities measured or disclosed at fair value are summarized below ($000s omitted): Financial Instrument Fair Value Hierarchy Fair Value December 31, 2025 December 31, 2024 Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 613,665 $ 629,582 IRLCs Level 2 (19,370) (13,494) Forward contracts Level 2 (91) 11,290 Whole loan commitments Level 2 (61) (30) Measured at fair value on a non-recurring basis: House and land inventory Level 3 $ 55,119 $ 20,016 Disclosed at fair value: Cash and equivalents (including restricted cash) Level 1 $ 2,008,776 $ 1,653,680 Financial Services debt Level …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income taxes Components of current and deferred income tax expense (benefit) are as follows ($000s omitted): 2025 2024 2023 Current expense Federal $ 560,980 $ 649,308 $ 622,205 State and other 120,832 122,212 120,424 $ 681,812 $ 771,520 $ 742,629 Deferred expense Federal $ 4,677 $ 120,415 $ 72,854 State and other 6,102 30,682 31,412 $ 10,779 $ 151,097 $ 104,266 Income tax expense $ 692,591 $ 922,617 $ 846,895 The following table reconciles the statutory federal income tax rate to the effective income tax rate ($000's omitted, expect percentages): 2025 2024 2023 Amount Percent Percent Percent Income taxes at federal statutory rate $ 611,377 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal tax (a) 101,631 3.5 3.6 3.5 Domestic federal reconciling items Federal tax credits (23,001) (0.8) (1.1) (0.2) Other 2,584 0.1 (0.5) 0.3 Effective rate $ 692,591 23.8 % 23.0 % 24.6 % (a) State taxes in Florida, California, and Illinois comprised the majority (greater than 50 percent) of the tax effect in this category in 2025. The effective tax rates differ from the federal statutory rate primarily due to state income tax expense and benefits associated with various federal energy tax credits. The following table presents our income taxes paid, net of any refunds, by jurisdiction ($000's omitted): 2025 US federal (a) $ 570,413 State and local Florida 46,543 Other 81,800 Total $ 698,756 (a) Includes cash payments of $341.4 million to acquire transferable tax credits, which we …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"In 2025, we adopted ASU 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures"" (""ASU 2023-09""), which requires expanded disclosure of our income rate reconciliation and income taxes paid. We adopted ASU 2023-09 following the prospective method. Accordingly, prior period disclosures have not been modified. See Note 8 . In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (""ASU 2024-03""), which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for us for annual periods beginning after December 31, 2026. We are currently evaluating the impact ASU 2024-03 will have on our financial statement disclosures."

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"Segment information Our Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the U.S. and the construction of housing on such land. Home sale revenues are composed of single-family detached homes, as well as attached homes, such as townhomes, condominiums, and duplexes. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments: Northeast: Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Virginia Southeast: Georgia, North Carolina, South Carolina, Tennessee Florida: Florida Midwest: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio Texas: Texas West: Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, Washington We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance agency operations. The Financial Services segment operates generally in the same markets as the Homebuilding segments. Evaluation of segment performance is generally based on income before income taxes. Each reportable segment generally follows the same accounting policies described in Note 1 . Our Chief Executive Officer (""CEO""), who has been identified as the chief operating decision maker for the purposes of the following reportable segment disclosures, is regularly provided operating results of individual operating segments which comprise our reportable segments. These operating results …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Shareholders equity We declared quarterly cash dividends totaling $183.0 million, $171.4 million, and $149.8 million in 2025, 2024, and 2023, respectively. Under a share repurchase program authorized by our Board of Directors, we repurchased 10.6 million, 10.1 million, and 13.8 million shares in 2025, 2024, and 2023, respectively, for a total of $1.2 billion, $1.2 billion, and $1.0 billion in 2025, 2024, and 2023, respectively. On January 29, 2025, the Board of Directors increased our share repurchase authorization by $1.5 billion, which was publicly announced on January 30, 2025. At December 31, 2025, we had remaining authorization to repurchase $982.9 million of common shares. Under our stock compensation plans, we accept shares as payment under certain conditions related to vesting of restricted shares and share units, generally related to the payment of tax obligations. During 2025, 2024, and 2023, employees surrendered shares valued at $24.3 million, $18.6 million, and $12.0 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"Commitments and contingencies Letters of credit and surety bonds In the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $343.2 million and $3.1 billion, respectively, at June 30, 2026, and $357.1 million and $3.1 billion, respectively, at December 31, 2025. In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn. Litigation and regulatory mat …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt Notes payable Our notes payable are summarized as follows ($000s omitted): June 30, 2026 December 31, 2025 5.500% unsecured senior notes due March 2026 (a) $ $ 251,867 5.000% unsecured senior notes due January 2027 (a) 337,277 4.250% unsecured senior notes due March 2031 (a) 400,000 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 4.900% unsecured senior notes due March 2036 (a) 400,000 Net premiums, discounts, and issuance costs (b) (17,125) (5,231) Total senior notes $ 1,782,875 $ 1,583,913 Other notes payable 37,402 47,185 Notes payable $ 1,820,277 $ 1,631,098 Estimated fair value $ 1,900,952 $ 1,755,396 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. (b) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes. In February 2026, we issued $800.0 million of unsecured senior notes, consisting of $400.0 million of 4.250% senior notes scheduled to mature on March 1, 2031, and $400.0 million of 4.900% senior notes scheduled to mature on March 1, 2036. The net proceeds from the February 2026 senior notes issuance were used to repay at maturity $251.9 million principal amount of unsecured senior notes which matured on March 1, 2026, and to redeem in full pr …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair value disclosures Accounting Standards Codification 820, Fair Value Measurements and Disclosures, provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows: Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities. Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active. Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques. Our assets and liabilities measured or disclosed at fair value are summarized below ($000s omitted): Financial Instrument Fair Value Hierarchy Fair Value June 30, 2026 December 31, 2025 Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 549,713 $ 613,665 IRLCs Level 2 (51,222) (19,370) Forward contracts Level 2 12,637 (91) Whole loan commitments Level 2 (220) (61) Measured at fair value on a non-recurring basis: House and land inventory Level 3 $ 22,584 $ 55,119 Disclosed at fair value: Cash, cash equivalents, and restricted cash Level 1 $ 1,377,342 $ 2,008,776 Financial Se …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income taxes Our effective tax rate was 24.2% and 23.6% for the three and six months ended June 30, 2026, respectively, compared with 24.6% and 24.0% for the comparable prior year periods in 2025. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and federal tax credits. Our effective tax rate for the six months ended June 30, 2026 and 2025 also includes benefits from stock-based compensation. At June 30, 2026 and December 31, 2025, we had net deferred tax liabilities of $412.8 million and $399.3 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time. Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. We had $29.6 million and $29.9 million of gross unrecognized tax benefits at June 30, 2026 and December 31, 2025, respectively. Additionally, we had accrued interest and penalties of $0.1 million and $0.6 million at June 30, 2026 and December 31, 2025, respectively.

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"New accounting pronouncements In November 2024, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (""ASU 2024-03""), which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for us for annual periods beginning after December 31, 2026. We are currently evaluating the impact ASU 2024-03 will have on our financial statement disclosures. In September 2025, the FASB issued ASU 2025-06, ""Intangibles - Goodwill and Other - Internal-use Software (Subtopic 350-40): Targeted Improvement to the Accounting for Internal-use Software"", which amends certain aspects of the accounting and disclosure of developed software costs. ASU 2025-06 is effective for us for annual periods beginning after December 31, 2027. We are currently evaluating the impact of ASU 2025-06 but do not expect that the adoption will have a material impact on our consolidated financial statements or related disclosures."

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Segment information Our Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the U.S. and the construction of housing on such land. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments: Northeast: Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Virginia Southeast: Georgia, North Carolina, South Carolina, Tennessee Florida: Florida Midwest: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio Texas: Texas West: Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, Washington We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance agency operations. The Financial Services segment operates generally in the same markets as the Homebuilding segments. Evaluation of segment performance is generally based on income before income taxes. Each reportable segment generally follows the same accounting policies described in Note 1 . Operating Data by Segment ($000s omitted) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenues: Northeast $ 234,246 $ 347,437 $ 411,488 $ 597,171 Southeast 696,473 747,017 1,320,553 1,385,746 Florida 1,047,821 1,037,352 1,967,751 2,017,891 Midwest 636,186 691,347 1,163,441 1,273,789 Texas 410,576 465,919 727,890 878,332 West 780,086 979,758 1,521,965 1,868,555 Other homebuilding (a) 80,630 33,767 109,754 82,93 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Shareholders equity In the six months ended June 30, 2026, we declared cash dividends totaling $99.5 million and repurchased 5.5 million shares under our share repurchase authorization for $681.2 million. In the six months ended June 30, 2025, we declared cash dividends totaling $88.7 million and repurchased 5.8 million shares under our share repurchase authorization for $600.0 million. On January 29, 2025, the Board of Directors increased our share repurchase authorization by $1.5 billion, which was publicly announced on January 30, 2025. On April 22, 2026, the Board of Directors approved an additional increase to our share repurchase authorization of $1.5 billion, which was publicly announced on April 23, 2026. At June 30, 2026, we had remaining authorization to repurchase $1.8 billion of common shares. Under our share-based compensation plans, we accept shares as payment under certain conditions related to the vesting of shares, generally related to the payment of minimum tax obligations. In the six months ended June 30, 2026 and 2025, participants surrendered shares valued at $38.1 million and $23.8 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing