Century Communities, Inc.

tes to the Consolidated Financial Statements

December 31, 2025, 2024 and 2023

1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Century Communities, Inc. (which we refer to as “we,” “CCS,” or the “Company”), together with its subsidiaries, is engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. In many of our projects, in addition to building homes, weentitle anddevelop the underlying land. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brandhas an emphasis on serving the affordable homebuilding market butoffers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the limited ability to personalize their homes through certain option and upgrade selections. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios, centralized locations and the internet, and generally provides no option or upgrade selections.

Our homebuilding operations are organized into the following five reportable segments: West, Mountain, Texas, Southeast, and Century Complete. Our indirect wholly-owned subsidiaries, Inspire Home Loans Inc., Parkway Title, LLC, IHL Home Insurance Agency, LLC, and IHL Escrow Inc., which provide mortgage, title, insurance brokerage, and escrow services, respectively, primarily to our homebuyers, have been identified asour Financial Services segment. Additionally, our Century Living segment is engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, as well as all subsidiaries in which we have a controlling interest, and variable interest entities for which the Company is deemed to be the primary beneficiary. We do not have any variable interest entities in which we are deemed the primary beneficiary.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (which we refer to as “GAAP”) 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation, including the presentation of inventory impairment. Beginning in the fourth quarter of 2025, inventory impairment was reclassified to be included in cost of home sales revenues in our consolidated statements of operations rather than presented as a separate line item.

Cash and Cash Equivalents

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.

Cash Held in Escrow

Cash held in escrow consists of amounts related to the proceeds from home closings held for our benefit in escrow, which are typically held for a few days.

Accounts Receivable

Accounts receivable primarily consists of rebates receivables, receivables due from utility companies, improvement districts, and municipalities, receivables under insurance policies, and income tax receivables.

We periodically review the collectability of our accounts receivable, and, if it is determined that a receivable might not be fully collectible, an allowance is recorded for the amount deemed uncollectible.

Inventories and Cost of Sales

We capitalize pre-acquisition, land, land development, and other allocated costs, including interest, during development, periods of entitlement, and home construction.

Land, land development, and other common costs are allocated to inventory using the relative-sales-value method; however, as lots within a project typically have comparable market values, we generally allocate land, land development, and common costs equally to each lot within the project. Home construction costs are recorded using the specific-identification method. Cost of sales for homes delivered includes the allocation of construction costs of each home and all applicable land acquisition, land development, and related common costs, both incurred and estimated to be incurred. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining homes in the community.

When a home is delivered, the Company generally has not paid all incurred costs necessary to complete the home, and a liability and a charge to cost of home sales revenues are recorded for the amount that is estimated will ultimately be paid related to delivered homes.

We review all of our communities for indicators of impairment quarterly and record an impairment loss when conditions exist where the carrying amount of inventory is not recoverable and exceeds its fair value. Indicators of impairment include, but are not limited to, significant decreases in local housing market values, significant decreases to gross margins, costs significantly in excess of budget, and operating cash flow losses.

When an indicator of impairment is identified, we prepare and analyze cash flows at the lowest level for which there are identifiable cash flows that are independent of the cash flows of other groups of assets, which we have determined as the community level. If the undiscounted cash flows are less than the community’s carrying value, we generally estimate the fair value using the estimated future discounted cash flows of the respective inventories. A community with a fair value less than its carrying value is impaired and is written down to fair value. Such losses, if any, are reported within homebuilding gross margin.

When estimating undiscounted cash flows, we make various assumptions, including the following: the expected home sales revenue to be generated, including consideration of the number of homes available, pricing and incentives offered by us or other builders in comparable communities; the costs incurred to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction, and selling and marketing costs; any alternative product offerings that may be offered that could have an impact on sales, sales prices and/or building costs; and alternative uses for the property.

During the year ended December 31, 2025, we determined that inventory with a carrying value before impairment of $92.2 million, comprised of 11 communities across all of our homebuilding segments, was not recoverable. Accordingly, we recognized inventory impairment charges of$19.6 million related to communities in which we are actively selling homes, and additional inventory impairment charges of $2.2 million related to a small number of individual finished lots. In aggregate, we recognized total impairment charges of$21.8 million in order to record the inventory at fair value. During the year ended December 31, 2024, we recorded impairment charges of $8.8 million for 9 communities and during the year ended December 31, 2023, we recorded impairment charges of $1.9 million for 5 communities. Beginning in the fourth quarter of 2025, inventory impairment was reclassified to be included in cost of home sales revenues in our consolidated statements of operations rather than presented as a separate line item and prior year amounts have been reclassified to conform to this presentation.

Home Sales Revenues and Profit Recognition

As defined in the Accounting Standards Codification (which we refer to as “ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), revenues from home sales and the related profit are recorded when our performance obligations are satisfied, which generally occurs when the respective homes are delivered and title has passed to our homebuyers. We generally satisfy our performance obligations in less than one year from the contract date. In order to promote sales of the homes, we may offer sales incentives to homebuyers. The types of incentives vary on a community-by-community basis and home-by-home basis, and primarily include price discounts on individual homes and financing incentives, all of which are reflected as a reduction of home sales revenues. Proceeds from home closings that are held for our benefit in escrow, are presented as cash held in escrow on our consolidated balance sheets. Cash held for our benefit in escrow is typically held by the escrow agent for a few days. When it is determined that the earnings process is not complete and we have remaining performance obligations that are material in the context of the contract, the related revenue and costs are deferred for recognition in future periods until those performance obligations have been satisfied. Prior to satisfying our performance obligations, we typically receive deposits from customers related to sold but undelivered homes and we collect these deposits at the time a homebuyer’s contract is accepted. These deposits are classified as earnest money deposits and are included in accrued expenses and other liabilities on our consolidated balance sheets. Earnest money deposits totaled $5.1 million and $8.8 million at December 31, 2025 and 2024, respectively.

Performance Deposits

We are occasionally required to make a land, bond, and utility cash deposits as each new development is started. These amounts typically are refundable as homes are delivered, or development obligations are completed. Performance deposits are included in prepaid expenses and other assets on the consolidated balance sheets.

Lot Option and Escrow Deposits

We enter into lot option and purchase agreements with unrelated parties to acquire lots for the construction of homes. Under these agreements, we have paid deposits, which in many cases are non-refundable, in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Lot option and escrow deposits are included in prepaid expenses and other assets on the consolidated balance sheets. We charge to expense non-refundable deposit and capitalized pre-acquisition costs, when it is probable that the lots will not be acquired. During the year ended December 31, 2025, 2024, and 2023 we terminated certain contracts in our markets that no longer met our investment criteria, resulting in a charges of $11.2 million, $6.0 million, and $3.4 million, respectively, which are included in other expense in our consolidated statements of operations.

Model Homes and Sales Facilities

Costs related to our model homes and sales facilities are treated in one of three ways depending on their nature. Costs directly attributable to the home including upgrades that are permanent and sold with the home are capitalized to inventory and included in cost of home sales revenues when the unit is delivered to the homebuyer. Marketing related costs, such as non-permanent signage, brochures and marketing materials as well as the cost to convert the model into a saleable unit are expensed as incurred. Costs to furnish the model home sites, permanent signage, and construction of sales facilities are capitalized to property and equipment and depreciated over the estimated life of the community based on the number of lots in the community which typically range from 1 to 4 years.

Multi-family Rental Properties

Our Century Living segment is engaged in the development, construction, management, and sales of multi-family rental properties, currently all located in Colorado. During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets shortly after lease stabilization. Accordingly, we have determined that these multi-family rental operations have become part of our ordinary activities, and revenue is recognized from the sale of these properties when performance obligations are satisfied, generally when the respective properties are delivered and title has passed to the buyers, as multi-family sales revenues on the consolidated statement of operations. Rental income and expenses from these properties during lease-up is recognized within other income (expense), net on the consolidated statement of operations. We record multi-family rental property inventory within prepaid and other assets on the consolidated balance sheet, and cash flows from development activities and the disposition of properties are recorded as operating activities on the consolidated statement of cash flows.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is charged to expense on the straight-line basis over the estimated useful life of each asset.

The estimated useful lives for each major depreciable classification of property and equipment are as follows:

Financial Services

Mortgage loans held for sale and mortgage servicing rights are carried at fair value, with gains and losses from the changes in fair value reflected in financial services revenue on the consolidated statements of operations. Management believes carrying mortgage loans held for sale at fair value improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them.

Derivative instruments used to economically hedge our market and interest rate risk are carried at fair value. Derivative instruments typically include interest rate lock commitments and forward commitments on mortgage-backed securities. Changes in fair value of these derivatives, as well as any gains or losses upon settlement, are reflected in financial services revenue on the consolidated statements of operations.

Net gains and losses from the sale of mortgage loans held for sale are included in financial services revenue on the consolidated statements of operations, and include(1) net gain on sale of loans, whichare recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale, with sale proceeds reflecting the cash received from investors through the sale of the mortgage loan and servicing release premium, where applicable; (2) the fair value of originated mortgage servicing rights; (3) the change in fair value of mortgage loans held for sale; (4) the change in fair value of derivatives instruments, including interest rate lock commitments and forward commitments on mortgage-backed securities; (5)provision for investor reserves; and (6) fees earned from originating mortgage loans. Fees earned from originating mortgage loans, which are recognized at the time the mortgage loans are funded, include origination fees, credits, commitment fees, and discount points charged to reduce interest rates.

Financial service costs on the consolidated statements of operations primarily consist of general and administrative costs to support ourmortgage, title, insurance brokerage and escrow services.

Stock-Based Compensation

We account for stock-based awards in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires us to estimate the grant date fair value of stock-based compensation awards and to recognize the fair value as compensation costs over the requisite service period, which is generally three years, for all awards that vest. We estimate an annual forfeiture rate at the time of grant based on historical experience, and revise the rate in subsequent periods, if necessary, based on actual forfeiture data.

The fair value of our restricted stock units and awards in the form of unrestricted shares of common stock is equal to the closing price of our common stock as reported by the New York Stock Exchange on the date of grant. The fair value of performance share units is equal to the closing price of our common stock as reported by the New York Stock Exchange on the date of grant, and if subject to mandatory post-vesting holding periods, an illiquidity discount is applied to reflect the impact of those restrictions on fair value. Stock-based compensation expense for performance share units is measured using the grant date fair value and is based on the estimated achievement of the established performance criteria at the end of each reporting period until the performance period ends, recognized on a straight-line basis over the performance period. Stock-based compensation expense for awards subject to performance conditions is only recognized for performance share units that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. For performance share units that also include market conditions, we estimate fair value using a Monte Carlo simulation model. Stock-based compensation expense for awards subject to market conditions is recognized ratably for awards subject to market conditions regardless of whether the market condition is satisfied, provided that the requisite service has been met. The performance share units granted during the fiscal years ended December 31, 2025, 2024 and 2023 have three-year performance-based metrics measured over performance periods ending on December 31 for each three-year period, and the performance share units granted during the year ended December 31, 2025 are also subject to adjustment based on certain market conditions.

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of its assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. When it is more likely than not that a portion or all of a deferred tax asset will not be realized in the future, the Company records a corresponding valuation allowance against the deferred tax asset. As of December 31, 2025 and 2024, we hadno valuation allowance recorded against our deferred tax assets.

In addition, when it is more likely than not that a tax position will be sustained upon examination by a tax authority that has full knowledge of all relevant information, the Company measures the amount of tax benefit from the position and records the largest amount of tax benefit that is more likely than not of being realized after settlement with a tax authority. The Company’s policy is to recognize interest to be paid on an underpayment of income taxes in interest expense and any related statutory penalties in the provision for income taxes on the consolidated statements of operations. As of December 31, 2025 and 2024 we hadno reserves for uncertain tax positions.

Business Combinations

We account for business combinations in accordance with ASC 805, Business Combinations, if the acquired assets assumed and liabilities incurred constitute a business. We consider acquired companies to constitute a business if the acquired net assets and processes have the ability to create outputs in the form of revenue. For acquired companies constituting a business, we recognize the identifiable assets acquired and liabilities assumed at their acquisition-date fair values and recognize any excess of total consideration paid over the fair value of the identifiable net assets as goodwill.

Goodwill

We evaluate goodwill for possible impairment in accordance with ASC 350, Intangibles–Goodwill and Other, on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We perform a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount.

If the qualitative assessment indicates that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, we will proceed to a quantitative assessment where we calculate the fair value of the reporting unit based on discounted future cash flows. If the quantitative assessment indicates that the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

As a result of the annual qualitative assessments performed during fiscal years 2025 and 2024, no goodwill impairment charges were recorded as of December 31, 2025 and 2024.

Variable Interest Entities (“VIEs”)

We review land option contracts where we have a non-refundable deposit to determine whether the corresponding land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, we are required to consolidate a VIE if we are 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 that most significantly impact the economic performance of the VIE. In making this determination, we consider whether we have the power to direct certain activities, including, but not limited to, determining or limiting the scope or purpose of the VIE, the ability to sell or transfer property owned or controlled by the VIE, or arranging financing for the VIE.

As a result of our analysis, we determined that as of December 31, 2025 and 2024, we were not the primary beneficiary of any VIE from which we have acquired rights to land under the land option contract. As of December 31, 2025 and 2024, we had non-refundable cash deposits totaling $74.2 million and $54.7 million, respectively, classified in prepaid expenses and other assets in our consolidated balance sheets for land option contracts. The non-refundable deposit is our maximum exposure to loss for the transactions as of December 31, 2025 and 2024, respectively.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred and totaled $32.3 million, $22.8 million and $14.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Advertising and marketing costs are included in selling, general and administrative expense on the consolidated statements of operations.

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board (which we refer to as “FASB”) issued Accounting Standards Update (which we refer to as “ASU”) No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 will become effective for us for the fiscal year ending December 31, 2027. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. We are currently evaluating the impact of the adoption of ASU 2024-03 on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including(i) the income tax rate reconciliation using both percentages and reporting currency amounts; (ii) specific categories within the income tax rate reconciliation; (iii) additional information for reconciling items that meet a quantitative threshold; (iv) the composition of state and local income taxes by jurisdiction; and (v) the amount of income taxes paid disaggregated by jurisdiction. ASU 2023-09 became effective for our fiscal year ending December 31, 2025 and weapplied the amendments retrospectively to all prior periods presented in our consolidated financial statements. See Note 13 – Income Taxes.

2. Reporting Segments

Our homebuilding operations are engaged in the development, design, construction, marketing and sale of single-family attached and detached homes in 16 states. We build and sell homes under our Century Communities and Century Complete brands. Our Century Communities brand is managed by geographic location, and each of ourfour geographic regions offers a wide range of buyer profiles including: entry-level, first and second time move-up, and lifestyle homebuyers, and provides our homebuyers with the limited ability to personalize their homes through certain option and upgrade selections. Each of ourfour geographic regions is considered a separate operating segment. Our Century Complete brand targets entry-level homebuyers, primarily sells homes through retail studios, centralized locations, and the internet, and generally provides no option or upgrade selections. Our Century Complete brand currently has operations innine states and is managed separately from ourfour geographic regions, and it is considered a separate operating segment.

Accordingly, we have presented our homebuilding operations as the following reportable segments as of December 31, 2025:

West (California and Washington)

Mountain (Arizona, Colorado, Nevada and Utah)

Texas

Southeast (Florida, Georgia, North Carolina, South Carolina and Tennessee)

Century Complete (Alabama, Arizona, Florida, Georgia, Indiana, Kentucky, Michigan, North Carolina, South Carolina)

We have identified our Financial Services operations, which provide mortgage, title, insurance brokerage and escrow services to our homebuyers, and Century Living, which is engaged in the development, construction, management, and sales of multi-family rental properties currently all located in Colorado, as reportable segments.

Our Corporate operations are a non-operating segment, as it serves to support our homebuilding operations, and to a lesser extent our Financial Services operations, through various functions, such as our executive, finance, treasury, human resources, accounting and legal departments.

Beginning in the first quarter of 2025, we have separately reported our Century Living segment as a reportable segment, which was previously included in our Corporate segment, in order to reflect the distinct nature of our multi-family rental operations. Accordingly, we have recast the corresponding segment information as of December 31, 2024 and for the years ended December 31, 2024 and 2023.

During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets shortly after lease stabilization. Accordingly, we have determined that these multi-family rental operations have become part of our ordinary activities, and revenue is recognized from the sale of these properties when performance obligations are satisfied, generally when the respective properties are delivered and title has passed to the buyers, and rental income and expenses from these properties during lease-up is recognized as other income (expense), net on the consolidated statement of operations. We record multi-family rental property inventory within prepaid and other assets on the consolidated balance sheet, and cash flows from development activities and the disposition of properties are recorded as operating activities on the consolidated statement of cash flows.

Our Executive Chairman and our Chief Executive Officer, collectively, have been determined to be our Chief Operating Decision Makers (“CODMs”) to make key operating decisions and assess performance. The management of our four Century Communities geographic regions, Century Complete, our Financial Services segment, and our Century Living segment reports to our CODMs. The CODMs evaluate the segment’s operating performance and allocate resources for all of our reportable segments based on income before income tax expense. For all of the segments, the CODMs use segment income before income tax expense in the annual budget and forecasting process. The CODMs consider budget-to-actual forecast variances for income before tax expense on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment. The measure of segment assets is reported on the consolidated balance sheets as total assets. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

The following table summarizes total revenue, significant expenses, and income (loss) before income tax expense by segment (in thousands):

(1)Includes cost of land sales and other revenues, and other income (expense), net

The following table summarizes total assets by segment (in thousands):

Century Living assets include primarily multi-family rental properties under construction and properties that are in lease-up, which are included in prepaid and other assets on the consolidated balance sheets. Corporate assets include primarily costs associated with certain cash and cash equivalents, certain property and equipment, deferred tax assets, certain receivables, and certain prepaids and other assets, including prepaid insurance.

3. Business Combinations

On January 22, 2024, we closed on the acquisition of substantially all the assets and assumed certain liabilities of Landmark Homes of Tennessee, Inc. (“Landmark”), a homebuilder with operations, includingsix active communities, in Nashville, Tennessee, for approximately $33.4 million in cash, inclusive of customary holdbacks. We concluded that the acquisition represents a business combination. During the year ended December 31, 2024, we incurred $0.1 million in acquisition costs, which are reflected in other expense in our consolidated statements of operations.

On July 31, 2024, we closed on the acquisition of substantially all the assets and operations and assumed certain liabilities of Anglia Homes LP (“Anglia”), a homebuilder with operations, including 26 active communities, in the greater Houston, Texas area, for approximately $127.0 million in cash, inclusive of customary holdbacks. We concluded that the acquisition represents a business combination, as we determined that the fair value of the gross assets acquired was not concentrated in a single identifiable asset or group of similar identifiable assets, and the acquired assets and processes have the ability to create outputs in the form of revenue from the sale of single-family residences. During the year ended December 31, 2024, we incurred $0.5 million in acquisition costs, which are reflected in other expense in our consolidated statements of operations.

4. Inventories

Inventories included the following (in thousands):

5. Financial Services

Our Financial Services are principally comprised of our mortgage lending operations, Inspire. Inspire is a full-service mortgage lender and primarily originates mortgage loans for our homebuyers. Inspire sells substantially all of the loans it originates either as loans with servicing rights released, or with servicing rights retained, in the secondary mortgage market within a short period of time after origination, generally within 30 days. Inspire primarily finances these loans using its mortgage repurchase facilities.

As of December 31, 2025 and 2024, Inspire had mortgage loans held for sale with an aggregate fair value of $299.1 million and $236.9 million, respectively, and an aggregate outstanding principal balance of $304.9 million and $241.6 million, respectively. The change in fair value for mortgage loans held for sale resulted in losses of $1.1 million and $8.8 million during the years ended December 31, 2025 and 2024, respectively, and resulted in a gain of $2.6 million during the year ended December 31, 2023, which areincluded in financial services revenue on the consolidated statements of operations.

During the second quarter of 2025, we sold mortgage servicing rights with an unpaid principal balance of approximately $3.0 billion. The total unpaid principal balance of mortgage loans serviced at December 31, 2025 and December 31, 2024 was $769.4 million and $2.9 billion, respectively. Refer to Note 14 – Fair Value Disclosuresfor further information regarding our mortgage loans held for sale and mortgage servicing rights.

Net gain on the sale of mortgage loans was $55.7 million, $59.7 million, and $54.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in financial services revenue on the consolidated statements of operations.

Mortgage loans in process for which interest rates were locked by borrowers, or interest rate lock commitments, had an aggregate outstanding principal balance of $67.5 million and $76.3 million at December 31, 2025 and 2024, respectively, and carried a weighted average interest rate of approximately 4.7% and 5.5%, respectively. Interest rate risks related to these obligations are typically mitigated through our interest rate hedging program or by the preselling of loans to investors. Refer to Note 14 – Fair Value Disclosuresfor further information regarding our derivative instruments.

6. Property and Equipment

Property and equipment included the following (in thousands):

During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets shortly after lease stabilization and we determined that these operations have become part of our ordinary activities. Accordingly, we reclassified $90.5 million associated with completed multi-family rental property assets within property and equipment, net to multi-family rental properties inventory within prepaid and other assets on the consolidated balance sheet as of the beginning of the period.

7. Prepaid Expenses and Other Assets

Prepaid expenses and other assets included the following (in thousands):

(1)Restricted cash consists of restricted cash related to land development, earnest money deposits for home sale contracts held by third parties as required by various jurisdictions, and certain compensating balances associated with our mortgage repurchase facilities and other financing obligations.

(2)During the first quarter of 2025, our strategy evolved for our Century Living multi-family rental properties to be predominantly focused on the disposition of the assets shortly after lease stabilization and we determined that these operations have become part of our ordinary activities. Accordingly, we reclassified $119.4 million associated with multi-family properties under construction within prepaid and other assets and $90.5 million associated with completed multi-family rental property assets within property and equipment, net to multi-family rental properties inventory within prepaid and other assets on the consolidated balance sheet as of the beginning of the period. Multi-family rental properties inventory includes multi-family rental properties that are under construction and properties that are in lease-up.

(3)During the year ended December 31, 2025, we sold our mortgage loans held for investment.

8. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities included the following (in thousands):

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9. Warranties

Estimated future direct warranty costs are accrued and charged to cost of home sales revenues in the period when the related home sales revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through a model that incorporates historical payment trends and we adjust the amounts recorded, if necessary. Based on warranty payment trends relative to our estimates at the time of home closing, we reduced our warranty reserve by $2.8 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively, which is included as a reduction to cost of home sales revenues on our consolidated statements of operations.

Changes in our warranty accrual for the years ended December 31, 2025 and 2024 are detailed in the table below (in thousands):

10. Self-Insurance Reserve

We maintain general liability insurance coverage, including coverage for certain construction defects after homes have been delivered and premise operations during construction. These insurance policies are designed to protect us against a portion of the risk of loss from claims, subject to certain self-insured per occurrence and aggregate retentions, deductibles, and available policy limits. We reserve for costs associated with such claims on an undiscounted basis at the time revenue is recognized for each home closing. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheets, are based upon third party actuarial analyses that are primarily based on industry data and partially on our historical claims, which include estimates of claims incurred but not yet reported. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs. Our self-insurance liability is presented on a gross basis without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimates of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable. Based on our third-party actuarial analyses, we increased our self-insurance reserve by $1.3 million and we reduced our self-insurance reserve by $0.8 million, respectively, during the years ended December 31, 2025 and 2024. Any adjustments to our self-insurance reserve are included in cost of home sales revenues on our consolidated statements of operations.

Changes in our self-insurance reservefor incurred but not reported construction defect claimsfor the years ended December 31, 2025, and 2024 are detailed in the table below (in thousands):

11. Debt

Our outstanding debt obligations included the following as of December 31, 2025 and 2024 (in thousands):

(1)The carrying value of senior notes reflects the impact of premiums and/or discounts (if applicable), and issuance costs that are amortized to interest cost over the respective terms of the senior notes.

(2)As of December 31, 2025, other financing obligations included $21.5 million related to insurance premium notes and certain secured borrowings, as well as $90.3 million outstanding under construction loan agreements related to Century Living. As of December 31, 2024, other financing obligations included $11.0 million related to insurance premium notes, as well as $102.4 million outstanding under construction loan agreements.

Issuance of 6.625% Senior Notes Due 2033

In September 2025, we entered into an indenture with U.S. Bank Trust Company, National Association, as trustee pursuant to which we issued $500.0 million aggregate principal amount of our 6.625% Senior Notes due 2033 (the “2033 Notes”)in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended (which we refer to as the “Securities Act”).. The 2033 Notes were issued at 100% of their principal amount and we received proceeds of $493.1 million, net of $6.9 million in issuance costs. The indenture contains certain restrictive covenants on issuing future secured debt and other transactions, and contains various optional redemption provisions to redeem the 2033 Notes, in whole or in part, at a time before, or on or after, September 15, 2028, and a put provision triggered by certain change of control events. The aggregate principal balance of the 2033 Notes is due in September 2033. Interest on the 2033 Notes will accrue from September 17, 2025 at a rate of 6.625% per annum, and will be payable semi-annually in cash in March and September of each year, beginning in March 2026. As of December 31, 2025, the aggregate obligation, inclusive of unamortized financing costs on the 2033 Notes, was $493.4 million.

Extinguishment of 6.750% Senior Notes Due 2027

In September 2025, we legally extinguished $500.0 million in outstanding principal of our 6.750% Senior Notes due 2027 at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, totaling $511.4 million. The extinguishment transaction resulted in a loss on debt extinguishment of $1.4 million included in other expense in the consolidated statements of operations.

3.875% Senior Notes Due 2029

In August 2021, we completed a private offering of $500.0 million aggregate principal amount of our 3.875% Senior Notes due 2029 (which we refer to as the “2029 Notes”) in reliance on Rule 144A and Regulation S under the Securities Act. The 2029 Notes were issued under an Indenture, dated as of August 23, 2021, among the Company, our subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee (which we refer to as the “August 2021 Indenture,” as it may be supplemented or amended from time to time). The 2029 Notes were issued at 100% of their principal amount and we received proceeds of $493.8 million, net of $6.2 million in issuance costs. The August 2021 Indenture contains certain restrictive covenants on issuing future secured debt and other transactions. The aggregate principal balance of the 2029 Notes is due August 2029, with interest only payments due semi-annually in February and August of each year. As of December 31, 2025, the aggregate obligation, inclusive of unamortized financing costs on the 2029 Notes, was $497.2 million.

Other Financing Obligations

As of December 31, 2025, other financing obligations included amounts related to insurance premium notes and certain secured borrowings, as well as outstanding borrowings under construction loan agreements.

Insurance Premium Notes and Certain Secured Borrowings

As of December 31, 2025, there were $9.2 million of insurance premium notes and $12.3 million of land development notes were outstanding, compared to $11.0 million insurance premium notes outstanding as of December 31, 2024.

Construction Loan Agreements

Certain wholly owned subsidiaries of Century Living, LLC are parties to secured construction loan agreements with various banks (which we collectively refer to as “the lenders”). These construction loan agreements collectively provide that we may borrow up to an aggregate of $145.1 million from the lenders for purposes of construction of multi-family projects in Colorado, with advances made by the lenders upon the satisfaction of certain conditions. Portions of the obligations under the secured construction loan agreements are guaranteed by us. Borrowings under the construction loan agreements bear interest at various rates, including floating interest rates per annum equal to the Secured Overnight Financing Rate (which we refer to as “SOFR”) plus an applicable margin. The outstanding principal balances and all accrued and unpaid interest is due on varying maturity dates from March 17, 2026 through February 28, 2029, with certain of the construction loan agreements allowing for the option to extend the maturity dates for a period of 12 months if certain conditions are satisfied. The construction loan agreements contain customary affirmative and negative covenants (including covenants related to construction completion, and limitations on the use of loan proceeds, transfers of land, equipment, and improvements), as well as customary events of default. Interest on our construction loan agreements is capitalized to the multi-family properties assets included in prepaid expenses and other assets on the consolidated balance sheets while the related multi-family rental properties are being actively developed.

As of December 31, 2025 and 2024, $90.3 million and $102.4 million were outstanding under the construction loan agreements, respectively, with borrowings that bore a weighted average interest rate of 6.1% and 6.5% as of December 31, 2025 and 2024, respectively, and we were in compliance with all covenants thereunder. During the year ended December 31, 2025, one multi-family rental property was sold and outstanding borrowings under the related construction loan agreement were satisfied.

Revolving Line of Credit

We are party to a credit agreement (the “Credit Agreement”) with U.S. Bank National Association, as Administrative Agent, and the lenders party thereto, which provides us with a senior unsecured revolving credit facility (which we refer to as the “revolving line of credit”) of up to $1.0 billion. The revolving line of credit includes a $250.0 million sublimit for letters of credit. Subject to the terms and conditions of the Credit Agreement, we are entitled to request an increase in the size of the revolving line of credit by an amount not exceeding $400.0 million; and pursuant to those terms, on April 22, 2025, we increased our revolving line of credit from $900.0 million to $1.0 billion, resulting in $300.0 million remaining for possible future increases. The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries. Funds are available under the revolving line of credit for the construction of homes, for the acquisition and development of land, land under development and lots for the eventual construction of homes thereon, and for working capital in the ordinary course of business. Unless terminated earlier, the revolving line of credit will mature on November 1, 2028, and the principal amount thereunder, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on such date. Subject to the terms and conditions of the Credit Agreement, we may request once per year aone-year extension of the maturity date and up tothree times during the term of the revolving line of credit, subject to the approval of the lenders and the Administrative Agent. The Credit Agreement contains customary affirmative and negative covenants (including limitations on our ability to grant liens, incur additional debt, pay dividends, redeem our common stock, make certain investments, issue certain equity securities, engage in transactions with affiliates and engage in certain merger, consolidation or asset sale transactions), as well as customary events of default. Borrowings under the Credit Agreement bear interest at a floating rate equal to Term SOFR or Daily Simple SOFR (in each case as defined in the Credit Agreement), plus an applicable margin between 1.45% and 2.30% per annum, or if selected by us, a base rate plus an applicable margin between 0.45% and 1.30% per annum. The “applicable margins” described above are determined by a schedule based on our leverage ratio, as defined in the Credit Agreement. The Credit Agreement also provides for customary fees including commitment fees payable to each lender ranging from 0.20% to 0.35% per annum based on our leverage ratio of the unused portion of the revolving line of credit and other customary fees.

As of December 31, 2025 and 2024, $51.5 million and $135.5 million of borrowings were outstanding under the revolving line of credit, respectively, with borrowings that bore an interest rate of 5.2% and 5.9%, respectively, and we were in compliance with all covenants under the Credit Agreement.

Mortgage Repurchase Facilities – Financial Services

Inspire is party to mortgage warehouse facilities with J.P. Morgan Chase Bank, N.A. and U.S. Bank National Association, which provide Inspire with uncommitted repurchase facilities, and Truist Bank, which provides Inspire with a committed repurchase facility, collectively providing up to an aggregateof $375.0 million as of December 31, 2025, secured by the mortgage loans financed thereunder. Therepurchase facilities have varying short term maturity dates through November 13, 2026. Borrowings under the mortgage repurchase facilities bear interest at variable interest rates per annum equal to SOFR plus an applicable margin, and borea weighted average interest rate of 5.4% and 6.1% as of December 31, 2025 and 2024, respectively.

Amounts outstanding under the repurchase facilities are not guaranteed by us or any of our subsidiaries, and the agreements contain various affirmative and negative covenants applicable to Inspire that are customary for arrangements of this type. As of December 31, 2025 and 2024, we had $289.3 million and$232.8 million outstanding under the repurchase facilities, respectively, and we were in compliance with all covenants thereunder.

Debt Maturities

Aggregate annual maturities of debt as of December 31, 2025 are as follows (in thousands):

During the years ended December 31, 2025, 2024, and 2023, we paid approximately $81.3 million, $78.9 million, and $58.1 million, respectively, in interest expense payments.

12. Interest on Senior Notes and Revolving Line of Credit

Interest on our senior notes and revolving line of credit, if applicable, is capitalized to homebuilding inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the years ended December 31, 2025, 2024, and 2023, we capitalized all interest costs incurred on these facilities during these periods.

Our interest costs are as follows (in thousands):

13. Income Taxes

Our income tax expense for the years ended December 31, 2025, 2024 and 2023 comprises the following current and deferred amounts (in thousands):

The following presents a reconciliation of the income tax provision based on the U.S. federal statutory tax rate to the total effective tax rate (in thousands):

(1)State taxes in California, Colorado, and Georgia made up the majority (greater than 50%) of the tax effect in this category.

Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences. Temporary differences arise when revenues and expenses for financial reporting are recognized for tax purposes in a different period. ASC 740 requires that a valuation allowance be recorded against deferred tax assets unless it is more likely than not that the deferred tax assets will be utilized. As a result of this analysis, the Company hasnot recorded a valuation allowance against its deferred tax assets. The Company will continue to evaluate the need to record valuation allowances against deferred tax assets and will make adjustments in accordance with the accounting standard.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2025 and 2024 (in thousands):

Net cash paid for income taxes consisted of the following (in thousands):

No jurisdictions exceeded 5 percent of net cash paid for income taxes during the years ended December 31, 2025 and 2024, respectively. Net cash paid for income taxes for the state of California were $11.8 million and exceeded 5 percent of total income taxes paid (net of refunds) during the year ended December 31, 2023.

The uncertainty provisions of ASC 740 also require the Company to recognize the impact of a tax position in its consolidated financial statements only if the technical merits of that position indicate that the position is more likely than not of being sustained upon audit. During the years ended December 31, 2025 and 2024, the Company didnot record a reserve for uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are subject to U.S. federal income tax examinations and various state income tax examinationsfor calendar tax years for which the applicable statute of limitations remains open, ranging from calendar tax years ending 2020 through 2025. As of December 31, 2025, we are not currently under an income tax audit by any federal, state, or local authorities.

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14. Fair Value Disclosures

Fair value measurements are used for the Company’s mortgage loans held for sale, certain mortgage loans held for investment, mortgage servicing rights, interest rate lock commitments and other derivative instruments on a recurring basis. We also utilize fair value measurements on a non-recurring basis for inventories and intangible assets when events and circumstances indicate that the carrying value is not recoverable. The fair value hierarchy and its application to the Company’s assets and liabilities is as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date.

Mortgage loans held for sale – Fair value is based on quoted market prices for committed and uncommitted mortgage loans.

Derivative assets and liabilities – Derivative assets are associated with interest rate lock commitments and investor commitments on loans and may also be associated with forward mortgage-backed securities contracts. Derivative liabilities are associated with forward mortgage-backed securities contracts. Fair value is based on market prices for similar instruments.

Level 3 – Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at the measurement date.

Mortgage servicing rights – The fair value of the mortgage servicing rights is calculated using third-party valuations. The key assumptions, which are generally unobservable inputs, used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and cost to service.

Mortgage loans held for investment at fair value – A portion of our mortgage loans held for investment included in prepaid expenses and other assets, which were those determined to be unsaleable and transferred from mortgage loans held for sale, are recorded at fair value and are calculated based on a Level 3 analysis which incorporates information including the value of underlying collateral, from markets where there is little observable trading activity.

The following outlines the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024, respectively (in thousands):

(1)During the third quarter of 2025, we sold our mortgage loans held for investment. The unobservable inputs used in the valuation of the mortgage loans held for investment at fair value include, among other items, the value of underlying collateral, from markets where there is little observable trading activity.

(2)The unobservable inputs used in the valuation of the mortgage servicing rights include mortgage prepayment rates, discount rates and cost to service, which were a weighted average of 7.8%,10.4%, and $80 per year per loan, respectively, as of December 31, 2025 and 8.5%,10.6%, and $74 per year per loan, respectively, as of December 31, 2024. The high and low end of the range of unobservable inputs used in the valuation did not result in a significant change to the fair value measurement.

The following table represents the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements, with gains and losses from the changes in fair value reflected in financial services revenue on the consolidated statements of operations (in thousands):

During the second quarter of 2025, we sold mortgage servicing rights with an unpaid principal balance of approximately $3.0 billion for approximately $47.3 million.

For the financial assets and liabilities that the Company does not reflect at fair value, the following present both their respective carrying value and fair value at December 31, 2025 and 2024:

Non-financial assets and liabilities include items such as inventory and property and equipment that are measured at fair value when acquired and as a result of impairments, if deemed necessary.

During the year ended December 31, 2025, we determined that inventory with a carrying value before impairment of $92.2 million, comprised of 11 communities across all of our homebuilding segments, was not recoverable. Accordingly, we recognized inventory impairment chargesof $19.6 million related to communities in which we are actively selling homes, driven by our decision to increase incentives in certain communities directed at improving our sales absorptions primarily on move-in ready homes. Additionally, we recognized inventory impairment charges of $2.2 million related to a small number of individual finished lots within our Century Complete segment. In aggregate, we recognized total impairment charges of $21.8 million in order to record the inventory at fair value, primarily consisting of $7.4 million, $7.0 million, and $6.2 million for our Mountain, Century Complete, and Southeast segments, respectively. During the year ended December 31, 2024, we recorded impairment charges of $8.8 million for 9 communities and during the year ended December 31, 2023, we recorded impairment charges of $1.9 million for 5 communities. The estimated fair value of the communities was measured using a discounted cash flow approach with Level 3 inputs, and reflects estimated fair values in the periods the respective impairments were identified. When estimating future discounted cash flows, we have utilized a weighted-average discount rate of approximately 13%,14%, and 12% in our valuations during the years ended December 31, 2025, 2024, and 2023, respectively. Changes in our cash flow projections in future periods related to these communities may change our conclusions on the recoverability of inventory in the future.

15. Post-Retirement Plan

The Company has 401(k) plans available to substantially all employees. The Company generally makes matching contributions of 50% of employees’ salary deferral amounts on the first 6% of employees’ compensation. Contributions to the plans during the years ended December 31, 2025, 2024 and 2023 were $4.4 million, $4.4 million and $3.0 million, respectively.

16. Stock-Based Compensation

During the year ended December 31, 2025, we granted performance share units (which we refer to as “PSUs”) covering up to 0.5 million shares of common stock assuming maximum level of performance with a weighted-average grant date fair value of $67.01 per share that are subject to service, performance, and market vesting conditions. The quantity of shares that will vest and be issued upon settlement of the PSUs ranges from 0% to up to 250% of a targeted number of shares depending upon the participant and will be determined based on achievement ofthree-year cumulative revenue andthree-year cumulative adjusted pre-tax income performance goals. The ultimate share payout may then be adjusted by a relative total shareholder return modifier based on ourthree-year cumulative total stockholder return (which we refer to as “TSR”) relative to the average TSR of all companies in a defined peer group, with the potential to decrease the payout by 10% or increase it up to 20%. During the years ended December 31, 2024 and 2023, we granted PSUs covering up to 0.3 million, and 0.5 million shares of common stock, respectively in each year, assuming maximum level of performance, with grant date fair values of $82.23, and $60.05 per share, respectively, that are subject to both service and performance vesting conditions. The quantity of shares that will ultimately vest and be issued upon settlement of the PSUs ranges from 0% to up to 250% of a targeted number of shares dependent upon the participant and will be determined based on an achievement of athree-year cumulative adjusted pre-tax income performance goal. Approximately 1.1 million shares will be issued upon settlement from 2026 to 2028 if the defined maximum performance targets are met, and, for applicable awards, if the defined maximum TSR conditions are met, and no shares will be issued upon settlement if the defined minimum performance targets are not met.

The following table summarizes the activity of our nonvested PSUs based on target award levels for the year ended December 31, 2025 (shares in thousands):

(1)Represents the target level of PSUs vested for the 2023-2025 performance period. The final number of shares to be issued upon the settlement of the vested PSUs will be determined upon certification of the financial results for the 2023-2025 performance period, anticipated to be in February 2026. During the years ended December 31, 2025, 2024, and 2023 we issued 0.4 million,0.2 million, and 0.3 million shares of common stock, respectively, upon the settlement of PSUs based on final performance level achievement that were granted in previous periods.

(2)Represents nonvested PSUs expected to vest based on estimated levels of performance achievement as of December 31, 2025.

During the years ended December 31, 2025, 2024 and 2023, we granted restricted stock units (which we refer to as “RSUs”) covering 0.2 million,0.2 million and 0.2 million shares of common stock, respectively, with grant date fair values of $73.90, $86.20 and $62.76 per share, respectively, that vest over athree-year period. During the years ended December 31, 2025, 2024, and 2023, we granted 16.0 thousand,11.0 thousand and 12.0 thousand shares of common stock, respectively, on an unrestricted basis (which we refer to as “stock awards”) with grant date fair values of $53.26, $82.84 and $65.30, respectively, to our non-employee directors.

The following table summarizes the activity of our nonvested RSUs and stock awards for the year ended December 31, 2025 (shares in thousands):

A summary of our nonvested awards, including PSUs assuming current estimated levels of performance achievement and RSUs are as follows (in thousands, except years):

The fair value of shares earned as of the vesting date during the years ended December 31, 2025, 2024 and 2023, was $35.1 million, $46.0 million, and $26.5 million, respectively.

During the years ended December 31, 2025, 2024 and 2023, the Company recognized stock-based compensation expense of $20.1 million, $27.9 million and $36.8 million, respectively, which is included in selling, general and administrative expense on theconsolidated statements of operations.

Stock-based compensation expense for PSUs is initially estimated based on target performance achievement and adjusted as appropriate throughout the performance period. Accordingly, future compensation cost associated with outstanding PSUs may increase or decrease based on the probability and extent of achievement with respect to the applicable performance measures. In accordance with ASC 718, Compensation—Stock Compensation, we updated our recognition of stock-based compensation expense associated with previously granted PSU awards to reflect probable financial results as they relate to the performance goals of the awards. For the year ended December 31, 2025, our estimate of the number of shares which will ultimately vest and be issued upon settlement of certain PSU awards decreased approximately 0.1 million shares, and we recorded cumulative net adjustments to reduce stock-based compensation expense of $6.1 million ($4.7 million net of tax) or $0.16 per basic share and $0.15 per diluted share. During the year ended December 31, 2024, our estimate of the number of shares which will ultimately vest and be issued upon settlement of certain PSU awards increased by a total of 0.1 million shares and we recorded a cumulative catch-up adjustment to increase stock-based compensation expense of $2.6 million ($2.0 million net of tax), or $0.06 per share (basic and diluted). For the year ended December 31, 2023, our estimate of the number of shares which will ultimately vest and be issued upon settlement of certain PSU awards increased by a total of 0.5 million shares and we recorded a cumulative catch-up adjustment to increase stock-based compensation expense of $14.5 million ($10.7 million net of tax), or $0.33 per share (basic and diluted).

17. Stockholders’ Equity

The Company’s authorized capital stock consists of 100.0 million shares of common stock, par value $0.01 per share, and 50.0 million shares of preferred stock, par value $0.01 per share. As of December 31, 2025 and 2024, there were 29.1 million and 31.0 million shares of common stock issued and outstanding, respectively, andno shares of preferred stock outstanding.

On May 4, 2022, the stockholders approved the adoption of the Century Communities, Inc. 2022 Omnibus Incentive Plan (which we refer to as the “2022 Incentive Plan”), which replaced the Century Communities, Inc. Amended and Restated 2017 Omnibus Incentive Plan (which we refer to as our “2017 Incentive Plan”). Under the 2022 Incentive Plan,3.1 million shares of common stock are available for issuance to eligible participants, plus 51.2 thousand shares of our common stock that remained available for issuance under the 2017 Incentive Plan and any shares subject to awards outstanding under the 2017 Incentive Plan that are subsequently forfeited, cancelled, expire or otherwise terminate without the issuance of such shares. During the years ended December 31, 2025 and 2024, we issued 0.6 million and 0.3 million shares of common stock, respectively, related to the vesting and settlement of RSUs, PSUs, and stock awards. As of December 31, 2025, approximately 1.5 million shares of common stock remained available for issuance under the 2022 Incentive Plan.

Our stock repurchase program authorizes us to repurchase up to 4.5 million shares of our outstanding common stock, of which 2.4 million shares remained available to be repurchased as of December 31, 2025. During the year ended December 31, 2025, an aggregate of 2.3 million shares were repurchased for a total purchase price of approximately $143.6 million and a weighted average price of $63.32 per share, excluding the excise tax accrued on our net stock repurchases as a result of the Inflation Reduction Act of 2022. During the year ended December 31, 2024, an aggregate of 1.0 million shares were repurchased for a total purchase price of approximately $83.8 million at a weighted average price of $81.55 per share.

During the years ended December 31, 2025 and 2024, shares of common stock at a total cost of $17.3 million and $10.5 million, respectively, were netted and surrendered as payment for minimum statutory withholding obligations in connection with the vesting of outstanding stock-based compensation awards. Shares surrendered by the participants in accordance with the applicable award agreements and plan are deemed repurchased and retired by us but are not part of our publicly announced stock repurchase program.

The following table sets forth cash dividends declared by our Board of Directors to holders of record of our common stock during the years ended December 31, 2025 and 2024, respectively (in thousands, except per share information):

Under the 2022 Incentive Plan and the previous 2017 Incentive Plan, at the discretion of the Compensation Committee of the Board of Directors, RSUs and PSUs granted under the plan have the right to earn dividend equivalents, which entitles the holders of such RSUs and PSUs to additional RSUs and PSUs equal to the same dividend value per share as holders of common stock. Dividend equivalents are subject to the same vesting and other terms and conditions as the underlying RSUs and PSUs.

18. Earnings Per Share

We use the treasury stock method to calculate earnings per share (which we refer to as “EPS”) as our currently issued non-vested RSUs and PSUs do not have participating rights.

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share information):

Stock-based awards are excluded from the calculation of diluted EPS in the event they are subject to unsatisfied performance conditions or are antidilutive. We excluded 0.7 million,0.4 million, and 0.8 million common stock unit equivalents from diluted earnings per share during the years ended December 31, 2025, 2024 and 2023, respectively, related to the PSUs for which performance conditions remained unsatisfied. We excluded 0.2 million common stock unit equivalents from diluted earnings per share during the year ended December 31, 2025 that were antidilutive. No amounts were antidilutive during the years ended December 31, 2024 and 2023, respectively.

19. Commitments and Contingencies

Letters of Credit and Performance Bonds

In the normal course of business, the Company posts letters of credit and performance and other bonds primarily related to our land development performance obligations, with local municipalities. As of December 31, 2025 and December 31, 2024, we had issued and outstanding letters of credit of $65.3 million and $97.5 million, respectively, and we had issued and outstanding performance and other bonds of $445.1 million and $466.0 million, respectively.

Leases

The Company leases office space and equipment under non-cancelable operating leases, which have lease terms that generally range from 1 to 10 years and often include one or more options to renew. Operating lease expense was $6.0 million, $7.3 million, and $8.0 million for the years ended December 31, 2025, 2024, and 2023, respectively, which are presented on the consolidated statements of operations within selling, general, and administrative expense.

Operating lease liabilities are included in other accrued liabilities within accrued expenses and other liabilities and the related right of use assets are included in prepaid expenses and other assets on the consolidated balance sheets. Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):

Legal Proceedings

The Company and our subsidiaries and affiliates are subject to claims, lawsuits and other legal actions from time to time that arise primarily in the ordinary course of business, which consist mostly of construction claims, but also could include warranty, workers’ compensation, tort, breach of contract, employment, personal injury, and other similar claims. It is the opinion of management that if the construction or warranty claims have merit, parties other than the Company would be, at least in part, liable for the claims, and eventual outcome of these claims will not have a material adverse effect upon our consolidated financial condition, results of operations, or cash flows. When we believe that a loss is probable and estimable, we record the estimated amount to other accrued liabilities included in accrued expenses and other liabilities on the consolidated balance sheet. We are also involved in other claims and/or legal proceedings for which a loss is reasonably possible, but for which we are unable to estimate a possible loss or range of loss due to evolving facts and inherent uncertainties.

Under various insurance policies, we have the ability to recoup costs in excess of applicable self-insured retentions. Estimates of such amounts are recorded in accounts receivable on our consolidated balance sheet when recovery is probable.

We do not believe that the ultimate resolution of any claims, lawsuits and other legal actions will have a material adverse effect upon our consolidated financial position, results of operations, or cash flows.