AddedRisk Factors
homes may raise our costs for these items or for the products made with them. All of these factors have caused and could in the future cause an increase in the effective cost of our homes.
The 10-K against last year's
91 changes: 12 added, 14 removed, 63 reworded, 2 quiet changes
10-K 0000822416-26-000007 (2026-02-04) vs 10-K 0000822416-25-000007 (2025-02-06)
The redline
The paragraph that changed most in each section
Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 141 words changed in this paragraph; it is 52% similar to last year's version.
Adjustments to reserves are recorded in the period in which the change in estimate occurs. During 2024 2025 and 2023, 2024, we reduced general liability reserves by $333.9 $42.3 million and $130.8 $333.9 million, respectively, as a result of changes in estimates resulting from actual claim experience observed being less than anticipated in previous actuarial projections. The changes in actuarial estimates were driven by changes in actual claims experience that, in turn, impacted actuarial estimates for potential future claims. These changes in actuarial estimates did not involve any significant changes in actuarial methodology but did impact the development of estimates for future periods, which resulted in adjustments to the IBNR portion of our recorded liabilities. There were no material adjustments to individual claims. Rather, the adjustments reflect an overall lower level of losses related to construction defect claims in recent years as compared with our previous experience. We attribute the favorable experience in more recent years to a variety of factors, including improved construction techniques, rising home values, and increased participation from our subcontractors in resolving claims. The cumulative effect of these factors, as evidenced by the favorable claims experience for an extended period, have resulted in our actuarial estimates placing less weight on older, higher cost policy years and relatively more weight on more recent, lower cost policy years.
Source: Item 7, 10-K 0000822416-26-000007 vs Item 7, 10-K 0000822416-25-000007
Legal Proceedings 117 words changed in this paragraph; it is 64% similar to last year's version.
Source: Item 3, via Note 11 – Commitments and contingencies, 10-K 0000822416-26-000007 vs Item 3, via Note 11 – Commitments and contingencies, 10-K 0000822416-25-000007
Risk Factors 104 words changed in this paragraph; it is 33% similar to last year's version.
Our business was could be materially and adversely disrupted by the outbreak and worldwide spread of contagious diseases, including epidemics, pandemics, or other serious public health threats, such as the COVID-19 and could be materially and adversely disrupted pandemic, as well as by another epidemic or pandemic like COVID-19, or similar public threat, or the fear of such an event, and the events. Public health emergencies may result in measures that taken by international, federal, state state, and local governments, agencies, law enforcement and/or enforcement, and or health authorities implement to address it. authorities, including travel restrictions, quarantines, business closures, workforce limitations, and other regulatory or emergency actions. These measures could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period of time.
Source: Item 1A, 10-K 0000822416-26-000007 vs Item 1A, 10-K 0000822416-25-000007
Accounting Policies 47 words changed in this paragraph; it is 57% similar to last year's version.
In December 2023, FASB issued 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 is effective for us for annual periods beginning after December 31, 2024. We are currently evaluating following the impact ASU 2023-09 will prospective method. Accordingly, prior period disclosures have on our financial statement disclosures. not been modified. See Note 8.
Source: Item 8, Note 1 – Summary of significant accounting policies, 10-K 0000822416-26-000007 vs Item 8, Note 1 – Summary of significant accounting policies, 10-K 0000822416-25-000007
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of PHM's Risk Factors and MD&A, 10-K 2026-02-04 against 10-K 2025-02-06. Each links to the text at sec.gov.
AddedRisk Factors
Across various regions in which we operate, costs associated with homeowner, hazard, and flood insurance have increased in recent years, driven in part by the increasing frequency and severity of weather‑related losses. In some cases, these conditions have constrained homeowners’ ability to obtain adequate coverage. While these issues have not had a material impact on our business thus far, continued increases in insurance costs, further limitations on coverage availability, or insufficient insurance coverage for business interruptions or losses could adversely affect home affordability, demand, and our operating results in the future.
AddedRisk Factors
Our business could be materially and adversely affected by epidemics, pandemics, or other public health emergencies.
AddedRisk Factors
Any epidemic, pandemic, or similar public health issue, including events like COVID-19, and the related governmental, regulatory, or private sector responses could adversely affect our operations, supply chain, workforce availability, customer demand, and ability to deliver products or services. Such events and responses could also contribute to broader macroeconomic effects, including inflation, labor shortages, changes in consumer behavior, and supply chain disruptions, which could further negatively impact our business, financial condition, and results of operations.
AddedRisk Factors
The extent to which future public health emergencies may affect our business will depend on a number of factors, including the duration and severity of the outbreak, the timing and effectiveness of containment measures, the impact on global and regional economic conditions, and our ability to adapt our operations in response to changing circumstances. Any of these factors, individually or in the aggregate, could have a material adverse impact on our consolidated financial statements.
AddedMD&A
In 2025, consumer demand weakened due to ongoing affordability challenges, resulting from elevated mortgage interest rates and higher housing costs, as well as volatility in other macroeconomic and geopolitical conditions, including higher job losses and weakened consumer confidence. We have responded to these conditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders) and closing cost incentives, especially mortgage interest rate buydowns. Despite these efforts, net new orders in units decreased 4% in 2025 versus 2024.
AddedMD&A
In response to the significant shift in market conditions in 2025, we have slowed the pace of our housing starts, have increased sales incentives, and are taking additional pricing actions in many of our communities, which resulted in $77.4 million of land inventory impairments in 2025. We continue to update the underwriting for our land option contracts prior to buying additional land and have made decisions to walk away from a number of land option agreements, which resulted in write-offs of deposits and pre-acquisition costs totaling $48.4 million in 2025. We will continue working with our trade partners to update the costs for materials, labor, and services to reflect changes in market conditions and will continue to adjust our overhead cost structure as necessary to align with demand.
AddedMD&A
Although elevated mortgage interest rates and volatile macroeconomic and geopolitical conditions may persist for some time, we believe the demographics supporting housing demand remain favorable over the long term. Inventories of new and existing homes have increased in the majority of our geographies as a result of the weakened demand experienced this year, so we are taking a measured approach to our capital allocation strategy as we anticipate continued volatility in demand. Accordingly, we
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AddedMD&A
Home sale gross margins were 26.3% in 2025, compared with 28.9% in 2024. The lower home sale gross margins were primarily attributable to the aforementioned pricing actions we took in 2025, including elevated sales incentives, increased land acquisition and development costs, and higher land impairments as the result of the more challenging market conditions. We expect these factors to continue to impact our gross margins over the near term. Gross margins in 2025 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels, which we expect will continue to be an area of focus in 2026. While we have made significant progress in reducing the level of spec inventory during 2025, the level of completed spec inventory remains elevated for the current demand environment.
AddedMD&A
(b)Other income (expense), net includes impairments in 2025 resulting from our expected divestiture of certain manufacturing assets. The net assets and operating results related to such manufacturing assets are immaterial.
AddedMD&A
Total Financial Services revenues during 2025 decreased 10% compared with 2024 reflective of the lower homebuilding volume and lower margins on loan production in a more competitive environment. Insurance agency commissions reflect lower policy retention and commission rates as a result of the evolving environment for home insurance as carriers adjust their premiums, geographic markets, and product coverages.
AddedMD&A
flows, we determine the fair value of the community and impairment charges are recorded if the fair value of the community’s inventory is less than its carrying value.