What changed in this filing

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Item 1. Financial Statements

2024-07-23 compared with 2024-04-23 · 109 added, 75 removed, 505 unchanged (27% of the section changed)

30 unchanged sentences

(000’s omitted, except per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Home sale revenues $ 4,448,168 $ 4,058,930 $ 8,267,754 $ 7,546,567

27 unchanged sentences

Earnings Total

Shareholder's equity, March 31, 2024 210,658 $ 2,107 $ 3,392,199 $ 7,367,647 $ 10,761,953

Share issuances 8 — — — —

Dividends declared — — — ( 42,073 ) ( 42,073 )

Share repurchases ( 2,761 ) ( 28 ) — ( 314,127 ) ( 314,155 )

Excise tax on share repurchases — — — ( 3,132 ) ( 3,132 )

Cash paid for shares withheld for taxes — — — ( 31 ) ( 31 )

Share-based compensation — — 11,128 — 11,128

Net income — — — 809,133 809,133

Shareholders' equity, June 30, 2024 207,905 $ 2,079 $ 3,403,327 $ 7,817,417 $ 11,222,823

Shareholders' equity, December 31, 2023 212,558 $ 2,126 $ 3,368,407 $ 7,012,724 $ 10,383,257

6 unchanged sentences

Net income — — — 1,472,109 1,472,109

Shareholder's equity, March 31, 2024 210,658 $ 2,107 $ 3,392,199 $ 7,367,647 $ 10,761,953

Shareholders' equity, June 30, 2024 207,905 $ 2,079 $ 3,403,327 $ 7,817,417 $ 11,222,823

Capital Retained

Earnings Total

Shareholder's equity, March 31, 2023 223,522 $ 2,235 $ 3,345,005 $ 5,916,569 $ 9,263,809

Share issuances 30 — — — —

Dividends declared — — — ( 35,633 ) ( 35,633 )

Share repurchases ( 3,660 ) ( 36 ) — ( 249,964 ) ( 250,000 )

Excise tax on share repurchases — — — ( 2,480 ) ( 2,480 )

Cash paid for shares withheld for taxes — — — ( 329 ) ( 329 )

Share-based compensation — — 9,313 — 9,313

Net income — — — 720,345 720,345

Shareholders' equity, June 30, 2023 219,892 $ 2,199 $ 3,354,318 $ 6,348,508 $ 9,705,025

Shareholders' equity, December 31, 2022 225,840 $ 2,258 $ 3,330,138 $ 5,581,702 $ 8,914,098

6 unchanged sentences

Net income — — — 1,252,604 1,252,604

Shareholder's equity, March 31, 2023 223,522 $ 2,235 $ 3,345,005 $ 5,916,569 $ 9,263,809

Shareholders' equity, June 30, 2023 219,892 $ 2,199 $ 3,354,318 $ 6,348,508 $ 9,705,025

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

($000’s omitted)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

43 unchanged sentences

and its subsidiaries.

While our subsidiaries engage primarily in the homebuilding business, we also engage in mortgage banking operations, conducted through Pulte Mortgage LLC (“Pulte Mortgage”), and title and insurance brokerage operations.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

13 unchanged sentences

Other income, net consists of the following ($000’s omitted):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Write-offs of deposits and pre-acquisition costs $ ( 3,685 ) $ ( 1,490 ) $ ( 7,675 ) $ ( 7,173 )

10 unchanged sentences

Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit and classified as cash.

Contract liabilities include customer deposits related to sold but undelivered homes, which totaled $ 698.8 million and $ 675.1 million at March 31, 2024 and December 31, 2023, respectively.

Contract liabilities include customer deposits related to sold but undelivered homes, which totaled $ 654.4 million and $ 675.1 million at June 30, 2024 and December 31, 2023, respectively.

Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit.

8 unchanged sentences

Mortgage servicing fees represent fees earned for servicing loans, and are accrued from the date a mortgage loan is originated until the servicing rights are sold.

Servicing fees are based on a contractual percentage of the outstanding principal balance and are credited to income when related mortgage payments are received.

Revenues associated with our title operations are recognized as closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.

Insurance brokerage commissions relate to commissions on homeowner and other insurance policies placed with third-party carriers through various agency channels.

Insurance agency commissions relate to commissions on homeowner and other insurance policies placed with third-party carriers through various agency channels.

Our performance obligations for policy renewal commissions are considered satisfied upon issuance of the initial policy.

The related contract assets for estimated future renewal commissions are included in other assets and totaled $ 77.8 million and $ 74.0 million at March 31, 2024 and December 31, 2023, respectively.

The related contract assets for estimated future renewal commissions are included in other assets and totaled $ 82.9 million and $ 74.0 million at June 30, 2024 and December 31, 2023, respectively.

Residential mortgage loans available-for-sale

Substantially all of the loans originated by us are sold in the secondary mortgage market within a short period of time after origination, generally within 30 days.

At March 31, 2024 and December 31, 2023, residential mortgage loans available-for-sale had an aggregate fair value of $ 570.8 million and $ 516.1 million, respectively, and an aggregate outstanding principal balance of $ 573.7 million and $ 508.5 million, respectively.

Net gains from the sale of mortgages were $ 50.6 million and $ 20.6 million for the three months ended March 31, 2024 and 2023, respectively, and have been included in Financial Services revenues.

At June 30, 2024 and December 31, 2023, residential mortgage loans available-for-sale had an aggregate fair value of $ 569.4 million and $ 516.1 million, respectively, and an aggregate outstanding principal balance of $ 570.2 million and $ 508.5 million, respectively.

Net gains from the sale of mortgages were $ 60.7 million and $ 48.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 111.3 million and $ 69.2 million for the six months ended June 30, 2024 and 2023, respectively, and have been included in Financial Services revenues.

Derivative instruments and hedging activities

We are party to IRLCs with customers resulting from our mortgage origination operations.

At March 31, 2024 and December 31, 2023, we had aggregate IRLCs of $ 706.7 million and $ 404.7 million, respectively, which were originated at interest rates prevailing at the date of commitment.

At June 30, 2024 and December 31, 2023, we had aggregate IRLCs of $ 671.1 million and $ 404.7 million, respectively, which were originated at interest rates prevailing at the date of commitment.

Since we can terminate a loan commitment if the borrower does not comply with the terms of the contract, and some loan commitments may expire without being drawn upon, these commitments do not necessarily represent future cash requirements.

1 unchanged sentence

Forward contracts on mortgage-backed securities are the predominant derivative financial instruments we use to minimize market risk during the period from the time we extend an interest rate lock to a loan applicant until the time the loan is sold to an investor.

At March 31, 2024 and December 31, 2023, we had unexpired forward contracts of $ 990.0 million and $ 745.0 million, respectively, and whole loan investor commitments of $ 315.5 million and $ 207.9 million, respectively.

Changes in the fair value of IRLCs and other derivative financial

At June 30, 2024 and December 31, 2023, we had unexpired forward contracts of $ 947.0 million and $ 745.0 million, respectively, and whole loan investor commitments of

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

instruments are recognized in Financial Services revenues, and the fair values are reflected in other assets or other liabilities, as applicable.

$ 408.3 million and $ 207.9 million, respectively.

Changes in the fair value of IRLCs and other derivative financial instruments are recognized in Financial Services revenues, and the fair values are reflected in other assets or other liabilities, as applicable.

There are no credit-risk-related contingent features within our derivative agreements, and counterparty risk is considered minimal.

2 unchanged sentences

The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities

8 unchanged sentences

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method.

A decreasing number of our outstanding restricted share units are considered participating securities such that there was no impact for the three months ended March 31, 2024.

The following table presents a reconciliation of the Numerator used in the earnings per share calculation for the three months ended March 31, 2023 (000's omitted, except per share data):

A decreasing number of our outstanding restricted share units are considered participating securities such that there was no impact for the three and six months ended June 30, 2024.

The following table presents a reconciliation of the Numerator used in the earnings per share calculation for the three and six months ended June 30, 2023 (000's omitted, except per share data):

Three Months Ended Six Months Ended

June 30, June 30,

Net income $ 720,345 $ 1,252,604

5 unchanged sentences

Numerator for diluted earnings per share $ 717,876 $ 1,247,791

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit losses

3 unchanged sentences

Counterparties associated with these assets are generally highly rated.

Allowances on the aforementioned in-scope assets were not material as of March 31, 2024.

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Allowances on the aforementioned in-scope assets were not material as of June 30, 2024.

New accounting pronouncements

4 unchanged sentences

In December 2023, FASB issued 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.

Improvements to Income Tax Disclosures" ("ASU 2023-09"), which requires expanded disclosure of our income tax rate reconciliation and income taxes paid.

ASU 2023-09 is effective for us for annual periods beginning on or after January 1, 2025.

12 unchanged sentences

Information related to interest capitalized into inventory is as follows ($000’s omitted):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Interest in inventory, beginning of period $ 148,101 $ 141,271 $ 139,078 $ 137,262

2 unchanged sentences

Interest in inventory, end of period $ 149,362 $ 141,994 $ 149,362 $ 141,994

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Land option agreements

5 unchanged sentences

We write off deposits and pre-acquisition costs when it becomes probable that we will not go forward with the project or recover the capitalized costs.

Such decisions take into

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

consideration changes in local market conditions, the timing of required land purchases, the availability and best use of necessary incremental capital, and other factors.

Such decisions take into consideration changes in local market conditions, the timing of required land purchases, the availability and best use of necessary incremental capital, and other factors.

We record any such write-offs of deposits and pre-acquisition costs within other income, net.

If an entity holding the land under option is a variable interest entity ("VIE"), our deposit represents a variable interest in that entity.

No VIEs required consolidation at either March 31, 2024 or December 31, 2023 because we determined that we were not any VIE's primary beneficiary.

No VIEs required consolidation at either June 30, 2024 or December 31, 2023 because we determined that we were not any VIE's primary beneficiary.

Our maximum exposure to loss related to these VIEs is generally limited to our deposits and pre-acquisition costs under the land option agreements.

The following provides a summary of our interests in land option agreements as of March 31, 2024 and December 31, 2023 ($000’s omitted):

March 31, 2024 December 31, 2023

The following provides a summary of our interests in land option agreements as of June 30, 2024 and December 31, 2023 ($000’s omitted):

June 30, 2024 December 31, 2023

Pre-acquisition

17 unchanged sentences

Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, Washington

We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance brokerage operations that operate generally in the same markets as the Homebuilding segments.

We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance agency operations that operate generally in the same markets as the Homebuilding segments.

PULTEGROUP, INC.

2 unchanged sentences

($000’s omitted)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Northeast $ 257,250 $ 229,371 $ 457,701 $ 450,020

20 unchanged sentences

(a) Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the other segments.

Other homebuilding also includes insurance reserve reversals of $ 26.8 million for the three months ended March 31, 2024 (see Note 8 ) and a gain of $ 37.7 million for the three months ended March 31, 2024 related to the sale of our minority interest in a joint venture.

Other homebuilding also includes insurance reserve reversals of $ 51.9 million and $ 78.7 million, respectively, for the three and six months ended June 30, 2024, and $ 64.9 million for the three months ended June 30, 2023, (see Note 8 ), and a gain of $ 37.7 million for the six months ended June 30, 2024 related to the sale of our minority interest in a joint venture.

PULTEGROUP, INC.

2 unchanged sentences

($000’s omitted)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Land-related charges (a) :

11 unchanged sentences

($000's omitted)

March 31, 2024

June 30, 2024

Construction Land Under

56 unchanged sentences

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

In the three months ended March 31, 2024, we completed open market repurchases of $ 10.2 million of our unsecured senior notes scheduled to mature in 2026.

In the three months ended June 30, 2024, we completed repurchases of $ 193.4 million and $ 106.6 million aggregate principal amount of our unsecured senior notes scheduled to mature in 2026 and 2027, respectively, through a cash tender offer, bringing our total repurchases in the six months ended June 30, 2024 to $ 310.2 million.

PULTEGROUP, INC.

1 unchanged sentence

Other notes payable

Other notes payable include non-recourse and limited recourse notes with third parties that totaled $ 75.4 million and $ 71.0 million at March 31, 2024 and December 31, 2023, respectively.

Other notes payable include non-recourse and limited recourse notes with third parties that totaled $ 67.9 million and $ 71.0 million at June 30, 2024 and December 31, 2023, respectively.

These notes have maturities ranging up to six years , are secured by the applicable land positions to which they relate, and generally have no recourse to other assets.

The stated interest rates on these notes range up to 6 %.

We recorded inventory through seller financing of $ 5.4 million and $ 6.7 million in the three months ended March 31, 2024 and 2023, respectively.

We recorded inventory through seller financing of $ 5.4 million and $ 17.7 million in the six months ended June 30, 2024 and 2023, respectively.

Revolving credit facility

3 unchanged sentences

The Revolving Credit Facility contains financial covenants that require us to maintain a minimum Tangible Net Worth and a maximum Debt-to-Capitalization Ratio (as each term is defined in the Revolving Credit Facility).

We were in compliance with all covenants and requirements as of March 31, 2024.

We were in compliance with all covenants and requirements as of June 30, 2024.

Outstanding balances under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.

At March 31, 2024, we had no borrowings outstanding, $ 298.6 million of letters of credit issued, and $ 951.4 million of remaining capacity under the Revolving Credit Facility.

At June 30, 2024, we had no borrowings outstanding, $ 297.4 million of letters of credit issued, and $ 952.6 million of remaining capacity under the Revolving Credit Facility.

At December 31, 2023, we had no borrowings outstanding, $ 312.7 million of letters of credit issued, and $ 937.3 million of remaining capacity under the Revolving Credit Facility.

Joint venture debt

At March 31, 2024, aggregate outstanding debt of unconsolidated joint ventures was $ 58.2 million, of which $ 19.4 million was related to one joint venture in which we have a 50 % interest.

At June 30, 2024, aggregate outstanding debt of unconsolidated joint ventures was $ 39.1 million, of which $ 3.7 million was related to one joint venture in which we have a 50 % interest.

In connection with this loan, we and our joint venture partner provided customary limited recourse guaranties in which our maximum financial loss exposure is limited to our pro rata share of the debt outstanding.

1 unchanged sentence

In August 2023, Pulte Mortgage entered into a master repurchase agreement (the "Repurchase Agreement"), which matures on August 14, 2024.

The maximum aggregate commitment under the Repurchase Agreement was $ 600.0 million at March 31, 2024, and will increase to $ 700.0 million on June 26, 2024, which continues until maturity.

The maximum aggregate commitment under the Repurchase Agreement was $ 700.0 million at June 30, 2024, which continues until maturity.

The Repurchase Agreement also contains an accordion feature that could increase the commitment by $ 50.0 million above its active commitment level.

1 unchanged sentence

The Repurchase Agreement contains various affirmative and negative covenants applicable to Pulte Mortgage, including quantitative thresholds related to net worth, net income, and liquidity.

At March 31, 2024, Pulte Mortgage had $ 534.3 million outstanding at a weighted-average interest rate of 7.13 % and $ 65.7 million of remaining capacity under the Repurchase Agreement.

At June 30, 2024, Pulte Mortgage had $ 524.0 million outstanding at a weighted-average interest rate of 7.14 % and $ 176.0 million of remaining capacity under the Repurchase Agreement.

At December 31, 2023, Pulte Mortgage had $ 499.6 million outstanding at a weighted-average interest rate of 7.15 % and $ 350.4 million of remaining capacity under the Repurchase Agreement.

Pulte Mortgage was in compliance with all covenants and requirements as of March 31, 2024.

Pulte Mortgage was in compliance with all covenants and requirements as of June 30, 2024.

Shareholders’ equity

In the three months ended March 31, 2024, we declared cash dividends totaling $ 42.6 million and repurchased 2.3 million shares under our repurchase authorization for $ 245.8 million.

In the three months ended March 31, 2023, we declared cash dividends totaling $ 36.1 million and repurchased 2.8 million shares under our repurchase authorization for $ 150.0 million.

In the six months ended June 30, 2024, we declared cash dividends totaling $ 84.7 million and repurchased 5.1 million shares under our repurchase authorization for $ 560.0 million.

In the six months ended June 30, 2023, we declared cash dividends totaling $ 71.8 million and repurchased 6.4 million shares under our repurchase authorization for $ 400.0 million.

On January 30, 2024, the Board of Directors increased our share repurchase authorization by $ 1.5 billion.

At March 31, 2024, we had remaining authorization to repurchase $ 1.6 billion of common shares.

At June 30, 2024, we had remaining authorization to repurchase $ 1.3 billion of common shares.

Under our share-based compensation plans, we accept shares as payment under certain conditions related to the vesting of shares, generally related to the payment of minimum tax obligations.

In the three months ended March 31, 2024 and 2023,

In the six months ended June 30, 2024 and 2023,

PULTEGROUP, INC.

2 unchanged sentences

Such share transactions are excluded from the above noted share repurchase authorization.

Our effective tax rate was 23.7 % for the three months ended March 31, 2024, compared with 24.2 % for the three months ended March 31, 2023.

Our effective tax rate was 22.8 % and 23.2 % for the three and six months ended June 30, 2024, respectively, compared with 24.4 % and 24.3 % for the same periods in 2023.

Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense.

At March 31, 2024 and December 31, 2023, we had net deferred tax liabilities of $ 274.8 million and $ 237.4 million, respectively.

Our income tax expense for the three months ended June 30, 2024 also reflects a reduction in income tax liabilities totaling $ 13.2 million related to the favorable resolution of uncertain state tax positions.

At June 30, 2024 and December 31, 2023, we had net deferred tax liabilities of $ 326.7 million and $ 237.4 million, respectively.

The accounting for deferred taxes is based upon estimates of future results.

2 unchanged sentences

Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes.

We had $ 58.2 million of gross unrecognized tax benefits at both March 31, 2024 and December 31, 2023.

Additionally, we had accrued interest and penalties of $ 7.0 million and $ 6.3 million at March 31, 2024 and December 31, 2023, respectively.

We had $ 41.4 million and $ 58.2 million of gross unrecognized tax benefits at June 30, 2024 and December 31, 2023, respectively.

Additionally, we had accrued interest and penalties of $ 1.8 million and $ 6.3 million at June 30, 2024 and December 31, 2023, respectively.

Fair value disclosures

29 unchanged sentences

If quoted market prices are not available, fair values are based on quoted market prices of similar issues.

The carrying value of senior notes was $ 1.9 billion at both March 31, 2024 and December 31, 2023.

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The carrying value of senior notes was $ 1.6 billion and $ 1.9 billion at June 30, 2024 and December 31, 2023, respectively.

Commitments and contingencies

2 unchanged sentences

The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure.

We had outstanding letters of credit and surety bonds totaling $ 298.6 million and $ 2.6 billion, respectively, at March 31, 2024 and $ 312.7 million and $ 2.4 billion, respectively, at December 31, 2023.

We had outstanding letters of credit and surety bonds totaling $ 297.4 million and $ 2.7 billion, respectively, at June 30, 2024 and $ 312.7 million and $ 2.4 billion, respectively, at December 31, 2023.

In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond.

3 unchanged sentences

We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn.

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Litigation and regulatory matters

15 unchanged sentences

Changes to warranty liabilities were as follows ($000’s omitted):

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Warranty liabilities, beginning of period $ 122,742 $ 105,980 $ 120,393 $ 108,348

3 unchanged sentences

Warranty liabilities, end of period $ 127,535 $ 106,136 $ 127,535 $ 106,136

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Self-insured risks

10 unchanged sentences

General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year.

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our insurance coverage requires a per occurrence retention up to an overall aggregate retention level.

6 unchanged sentences

IBNR represents losses related to claims incurred but not yet reported plus development on reported claims.

Our recorded reserves for all such claims totaled $ 547.6 million and $ 563.1 million at March 31, 2024 and December 31, 2023, respectively.

Our recorded reserves for all such claims totaled $ 506.5 million and $ 563.1 million at June 30, 2024 and December 31, 2023, respectively.

The recorded reserves include loss estimates related to both (i) existing claims and related claim expenses and (ii) IBNR and related claim expenses.

Liabilities related to IBNR and related claim expenses represented approximately 77 % of the total general liability reserves at both March 31, 2024 and December 31, 2023.

Liabilities related to IBNR and related claim expenses represented approximately 78 % and 77 % of the total general liability reserves at June 30, 2024 and December 31, 2023, respectively.

The actuarial analyses that determine the IBNR portion of reserves consider a variety of factors, including the frequency and severity of losses, which are based on our historical claims experience supplemented by industry data.

6 unchanged sentences

Adjustments to reserves are recorded in the period in which the change in estimate occurs.

We reduced general liability reserves by $ 26.8 million during the three months ended March 31, 2024 as a result of changes in estimates resulting from actual claim experience being less than anticipated in previous actuarial projections.

We reduced general liability reserves by $ 51.9 million and $ 78.7 million during the three and six months ended June 30, 2024, respectively, and $ 64.9 million during the three months ended June 30, 2023, as a result of changes in estimates resulting from actual claim experience 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.

3 unchanged sentences

Changes in these liabilities were as follows ($000's omitted):

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2024 2023 2024 2023

Balance, beginning of period $ 547,621 $ 652,745 $ 563,103 $ 635,857

6 unchanged sentences

Right-of-use ("ROU") assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year.

Some leases include one or more options to renew.

PULTEGROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

include one or more options to renew.

The exercise of lease renewal options is generally at our discretion.

4 unchanged sentences

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

ROU assets and lease liabilities were $ 76.5 million and $ 90.3 million at March 31, 2024, respectively, and $ 77.4 million and $ 91.6 million at December 31, 2023, respectively.

In the three months ended March 31, 2024 and 2023, we recorded an additional $ 3.7 million and $ 3.9 million of lease liabilities under operating leases, respectively.

Payments on lease liabilities in the three months ended March 31, 2024 and 2023 totaled $ 5.9 million and $ 5.4 million, respectively.

ROU assets and lease liabilities were $ 73.8 million and $ 87.0 million at June 30, 2024, respectively, and $ 77.4 million and $ 91.6 million at December 31, 2023, respectively.

In the three and six months ended June 30, 2024 we recorded an additional $ 1.9 million and $ 5.5 million, respectively, of lease liabilities under operating leases, and $ 4.4 million and $ 8.3 million in the comparable prior year periods.

Payments on lease liabilities in the three and six months ended June 30, 2024 totaled $ 5.8 million and $ 11.7 million, respectively, and $ 6.0 million and $ 11.3 million in the comparable prior year periods.

Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of less than one year.

In the three months ended March 31, 2024 and 2023, our total lease expense was $ 15.0 million and $ 14.2 million, respectively, inclusive of variable lease costs of $ 3.6 million and $ 3.0 million, respectively, as well as short-term lease costs of $ 4.8 million and $ 4.2 million, respectively.

In the three and six months ended June 30, 2024 our total lease expense was $ 15.2 million and $ 30.2 million, respectively, and $ 14.3 million and $ 28.5 million in the comparable prior year periods.

Our total lease expense is inclusive of variable lease costs of $ 2.5 million and $ 6.1 million in the three and six months ended June 30, 2024, respectively, and $ 3.2 million and $ 6.2 million in the comparable prior year periods, as well as short-term lease costs of $ 6.0 million and $ 10.8 million in the three and six months ended June 30, 2024, respectively, and $ 4.5 million and $ 8.7 million in the comparable prior year periods.

Sublease income was de minimis.

The future minimum lease payments required under our leases as of March 31, 2024 were as follows ($000's omitted):

The future minimum lease payments required under our leases as of June 30, 2024 were as follows ($000's omitted):

Years Ending December 31,

2 unchanged sentences

Present value of lease liabilities (d)

(a) Remaining payments are for the nine months ending December 31, 2024.

(b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $ 33.6 million of legally binding minimum lease payments for leases signed but not yet commenced at March 31, 2024.

(a) Remaining payments are for the six months ending December 31, 2024.

(b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $ 34.3 million of legally binding minimum lease payments for leases signed but not yet commenced at June 30, 2024.

As a result, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.

(d) The weighted-average remaining lease term and weighted-average discount rate used in calculating our lease liabilities were 4.0 years and 4.0 %, respectively, at March 31, 2024.

(d) The weighted-average remaining lease term and weighted-average discount rate used in calculating our lease liabilities were 4.8 years and 4.0 %, respectively, at June 30, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements