Century Communities (CCS) risk factors, FY2025 10-K

Risks Related to our Homebuilding Business and Industry

1. 01Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition
2. 02Since many of our homebuyers require mortgage financing, the sale of our homes is dependent upon the availability of affordable mortgage financing
3. 03We face risks regarding utility, resource, raw material, and building supply shortages and price fluctuations
4. 04Fluctuations in the demand for our homes may continue to materially affect our business, operating results, and financial condition
5. 05Adverse changes in general economic conditions may continue to reduce the demand for our homes and, as a result, continue to have a material adverse effect on our business, operating results, and financial condition
6. 06real estate taxes and federal and state income tax provisions, including provisions for the deduction of mortgage interest payments
7. 07Since many of our homebuyers require mortgage financing, the sale of our homes is dependent upon the availability of affordable mortgage financing
8. 08Interest rate increases have adversely affected and could continue to adversely affect our revenues and other operating results
9. 09Inflation has adversely affected and could continue to adversely affect our operating results
10. 10Employment rates affect home demand and loan delinquencies potentially adversely affecting our operating results
11. 11Home cancellation rates have adversely affected and could continue to adversely affect our operating results
12. 12Our long-term growth depends upon our ability to successfully identify and acquire desirable land lots at reasonable prices for residential build-out
13. 13We face substantial inherent and other risks with respect to our land and lot inventory, which could adversely affect our operating results, as could our failure to manage our land acquisition, inventories, and development and construction processes
14. 14Our inability to develop our communities successfully and within expected timeframes and budgets could harm our operating results
15. 15Our future success depends upon our ability to adapt our business strategy to changing home buying patterns and trends
16. 16Our geographic concentration exposes us to localized economic, regulatory, and environmental risks
17. 17Utility and resource shortages or rate fluctuations could adversely affect our business and operating results
18. 18Raw material and building supply shortages or price fluctuations could increase construction costs and delay home deliveries, adversely affecting our operating results
19. 19Our homebuilding operations expose us to significant product liability, warranty, personal injury, environmental, and other liability risks, that may not be fully covered by or exceed our insurance or contractual protections, and also could harm our reputation
20. 20Adverse weather and geological conditions could increase costs, delay projects, and reduce housing demand, which could adversely affect our business and operating results
21. 21Poor relations with the residents of our communities or other negative publicity could negatively impact our operating results and stock price
22. 22We face significant competition in the homebuilding industry and may be unable to compete effectively
23. 23Our quarterly operating results may fluctuate because of the seasonal nature of our business and other factors; and, accordingly, our historical performance may not predict our future results
24. 24A significant portion of our historical growth has been due to our prior acquisitions, and we may not be able to continue to grow through acquisitions. In addition, acquisitions, as well as other investments, involve risk
25. 25write-off of significant amounts of goodwill or other assets as a result of deterioration in the performance of an acquired business, adverse market conditions, changes in the competitive landscape, changes in laws or regulations that restrict activities of an acquired business, or other circumstances

Risk Related to Our Multi-Family Rental Business

1. 26Our multi-family rental business, which is relatively new for us, is subject to many of the same risks as with our core homebuilding business, as well as other additional risks, and we may not be successful in this business

Risks Related to Our Financial Services Business

1. 27The impairment of our ability to sell mortgages into the secondary market could significantly reduce our ability to sell homes unless we are willing to become a long-term investor in the loans we originate, which is also risky
2. 28The financial services market is competitive and we may not compete effectively
3. 29We are subject to various additional risks relating to our Financial Services business

Risks Related to Human Capital Management

1. 30Our failure to identify, recruit, retain, and develop highly skilled and competent personnel and contractors may adversely affect our standards of service and business
2. 31Labor shortages, costs, or disruptions could cause project delays and increased costs, which could adversely affect our margins and other operating results and our reliance on subcontractors exposes us to additional risks
3. 32increases in wages and subcontractor and professional services costs

Risks Related to the Governmental, Regulatory, Legal, and Compliance Matters

1. 33Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses, and limit our homebuilding and other activities, which could adversely affect our operating results

Risks Related to Our Indebtedness and Liquidity

1. 34the market price per share of our common stock
2. 35We have substantial indebtedness and expect to continue to use leverage in executing our business strategy, which restricts our operations and could have other important consequences on our business

Risks Related to Tax Policies and Regulation

1. 36Any limitation on, or reduction or elimination of, tax benefits associated with owning a home would have an adverse effect on the demand for our homes, which could be material to our business
2. 37Non-U.S. holders may be subject to United States federal income tax on gain realized on the sale or disposition of shares of our common stock
3. 38Our income tax provision and tax reserves may be insufficient, and we may not realize our deferred tax assets

Risks Related to Ownership of our Common Stock

1. 39Our common stock has been and may continue to be volatile
2. 40legislative or other regulatory developments that adversely affect us or the homebuilding industry
3. 41Our actual results may differ from our guidance or analyst expectations, which could cause our stock price to fall
4. 42We cannot assure you that we will continue to pay dividends on our common stock at the current rate or at all
5. 43Inefficient or ineffective allocation of capital may adversely affect our operating results and stockholder value and stockholders disagree with our allocation of capital
6. 44Provisions in our charter documents, Delaware law and agreements could discourage acquisition proposals or limit the ability of a third party to acquire control of the Company, which may adversely affect our stock price
7. 45Insider ownership and close family relationships amongst our management may raise conflicts of interest

General Risk Factors

1. 46Our Company could be targeted by activist stockholders
2. 47We are subject to several other general risks that could adversely affect our business, operating results and financial condition