Forward-Looking and Cautionary Statements

Investors are cautioned that certain statements contained in the materials and information posted to this webpage, as well as some statements by us in relation to such materials and information, including at our 2020 Annual Meeting of Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“Act”). Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “hope,” and similar expressions constitute forward-looking statements. In addition, any statements that we may make or provide concerning future financial or operating performance (including without limitation future revenues, community count, homes delivered, net orders, selling prices, sales pace per new community, expenses, expense ratios, housing gross profits, housing gross profit margins, earnings or earnings per share, or growth or growth rates), future market conditions, future interest rates, and other economic conditions, ongoing business strategies or prospects, future dividends and changes in dividend levels, the value of our backlog (including amounts that we expect to realize upon delivery of homes included in our backlog and the timing of those deliveries), the value of our net orders, potential future asset acquisitions and the impact of completed acquisitions, future share issuances or repurchases, future debt issuances, repurchases or redemptions and other possible future actions are also forward-looking statements as defined by the Act.

Forward-looking statements are based on our current (at the time made) expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market factors, and the homebuilding industry, among other things. These statements are not guarantees of future performance, and we have no specific policy or intention to update these statements. In addition, forward-looking and other statements in this report and in other public or oral disclosures that express or contain opinions, views or assumptions about market or economic conditions; the success, performance, effectiveness and/or relative positioning of our strategies, initiatives or operational activities; and other matters, may be based in whole or in part on general observations of our management, limited or anecdotal evidence and/or business or industry experience without in-depth or any particular empirical investigation, inquiry or analysis.

Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, the following:

• general economic, employment and business conditions;
• population growth, household formations and demographic trends;
• conditions in the capital, credit and financial markets;
• our ability to access external financing sources and raise capital through the issuance of common stock, debt or other securities, and/or project financing, on favorable terms;
• the execution of any share repurchases pursuant to our board of directors’ authorization;
• material and trade costs and availability;
• changes in interest rates;
• our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule;
• our compliance with the terms of our unsecured revolving credit facility;
• volatility in the market price of our common stock;
• weak or declining consumer confidence, either generally or specifically with respect to purchasing homes;
• competition from other sellers of new and resale homes;
• weather events, significant natural disasters and other climate and environmental factors;
• any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government’s operations, and financial markets’ and businesses’ reactions to that failure;
• government actions, policies, programs and regulations directed at or affecting the housing market (including the tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities;
• changes in existing tax laws or enacted corporate income tax rates, including those resulting from regulatory guidance and interpretations issued with respect thereto;
• changes in U.S. trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures taken by other countries;
• the adoption of new or amended financial accounting standards, and the guidance and/or interpretations with respect thereto;
• the availability and cost of land in desirable areas and our ability to timely develop acquired land parcels and open new home communities;
• our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred;
• costs and/or charges arising from regulatory compliance requirements or from legal, arbitral or regulatory proceedings, investigations, claims or settlements, including unfavorable outcomes in any such matters resulting in actual or potential monetary damage awards, penalties, fines or other direct or indirect payments, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices that are beyond our current expectations and/or accruals;
• our ability to use/realize the net deferred tax assets we have generated;
• our ability to successfully implement our current and planned strategies and initiatives related to our product, geographic and market positioning, gaining share and scale in our served markets and in entering into new markets;
• our operational and investment concentration in markets in California;
• consumer interest in our new home communities and products, particularly from first-time homebuyers and higher-income consumers;
• our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California;
• our ability to successfully implement our Returns-Focused Growth Plan and other business strategies and achieve any associated financial and operational targets and objectives;
• income tax expense volatility associated with stock-based compensation;
• the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services;
• the performance of mortgage lenders to our homebuyers;
• the performance of KBHS Home Loans, LLC, our mortgage banking joint venture with Stearns Ventures, LLC;
• information technology failures and data security breaches; and
• other events outside of our control.

Please see our periodic reports and other filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our business.