Item 1. Financial Statements
Item 1. Financial Statements
PULTEGROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000’s omitted)
June 30,
2025 December 31,
2024
(Unaudited)
ASSETS
Cash and equivalents $ 1,234,158 $ 1,613,327
Restricted cash 33,168 40,353
Total cash, cash equivalents, and restricted cash 1,267,326 1,653,680
House and land inventory 13,216,008 12,692,820
Residential mortgage loans available-for-sale 581,597 629,582
Investments in unconsolidated entities 181,803 215,416
Other assets 2,178,780 2,001,991
Goodwill 68,930 68,930
Other intangible assets 41,636 46,303
Deferred tax assets 51,731 55,041
$ 17,587,811 $ 17,363,763
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable $ 712,864 $ 727,995
Customer deposits 520,549 512,580
Deferred tax liabilities 460,070 443,566
Accrued and other liabilities 1,197,964 1,412,166
Financial Services debt 498,357 526,906
Notes payable 1,623,065 1,618,586
5,012,869 5,241,799
Shareholders' equity 12,574,942 12,121,964
$ 17,587,811 $ 17,363,763
See accompanying Notes to Condensed Consolidated Financial Statements.
3
PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(000’s omitted, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Revenues:
Homebuilding
Home sale revenues $ 4,267,975 $ 4,448,168 $ 8,017,244 $ 8,267,754
Land sale and other revenues 34,622 39,825 87,176 77,042
4,302,597 4,487,993 8,104,420 8,344,796
Financial Services 101,158 111,662 191,986 204,019
Total revenues 4,403,755 4,599,655 8,296,406 8,548,815
Homebuilding Cost of Revenues:
Home sale cost of revenues ( 3,115,450 ) ( 3,117,482 ) ( 5,834,564 ) ( 5,806,569 )
Land sale and other cost of revenues ( 30,488 ) ( 38,873 ) ( 81,443 ) ( 75,917 )
( 3,145,938 ) ( 3,156,355 ) ( 5,916,007 ) ( 5,882,486 )
Financial Services expenses ( 59,611 ) ( 49,334 ) ( 114,581 ) ( 100,712 )
Selling, general, and administrative expenses ( 390,453 ) ( 361,145 ) ( 783,790 ) ( 718,739 )
Equity income from unconsolidated entities, net 409 2,167 911 40,069
Other income (expense), net ( 1,006 ) 13,324 5,355 30,008
Income before income taxes 807,156 1,048,312 1,488,294 1,916,955
Income tax expense ( 198,673 ) ( 239,179 ) ( 357,012 ) ( 444,846 )
Net income $ 608,483 $ 809,133 $ 1,131,282 $ 1,472,109
Per share:
Basic earnings $ 3.05 $ 3.86 $ 5.64 $ 6.99
Diluted earnings $ 3.03 $ 3.83 $ 5.60 $ 6.93
Cash dividends declared $ 0.22 $ 0.20 $ 0.44 $ 0.40
Number of shares used in calculation:
Basic 199,243 209,547 200,645 210,692
Effect of dilutive securities 1,438 1,654 1,520 1,682
Diluted 200,681 211,201 202,165 212,374
See accompanying Notes to Condensed Consolidated Financial Statements.
4
PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(000's omitted)
(Unaudited)
Additional
Paid-in
Capital Retained
Earnings Total
Common Stock
Shares $
Shareholder's equity, March 31, 2025 200,565 $ 2,005 $ 3,452,228 $ 8,846,739 $ 12,300,972
Share issuances 18 1 — — 1
Dividends declared — — — ( 44,039 ) ( 44,039 )
Share repurchases ( 2,984 ) ( 30 ) — ( 299,970 ) ( 300,000 )
Excise tax on share repurchases — — — ( 2,982 ) ( 2,982 )
Cash paid for shares withheld for taxes — — — ( 339 ) ( 339 )
Share-based compensation — — 12,846 — 12,846
Net income — — — 608,483 608,483
Shareholders' equity, June 30, 2025 197,599 $ 1,976 $ 3,465,074 $ 9,107,892 $ 12,574,942
Shareholders' equity, December 31, 2024 202,913 $ 2,029 $ 3,425,384 $ 8,694,551 $ 12,121,964
Share issuances 447 5 8,558 — 8,563
Dividends declared — — — ( 88,748 ) ( 88,748 )
Share repurchases ( 5,761 ) ( 58 ) — ( 599,942 ) ( 600,000 )
Excise tax on share repurchases — — — ( 5,490 ) ( 5,490 )
Cash paid for shares withheld for taxes — — — ( 23,761 ) ( 23,761 )
Share-based compensation — — 31,132 — 31,132
Net income — — — 1,131,282 1,131,282
Shareholders' equity, June 30, 2025 197,599 $ 1,976 $ 3,465,074 $ 9,107,892 $ 12,574,942
5
Additional
Paid-in
Capital Retained
Earnings Total
Common Stock
Shares $
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
Share issuances 412 4 9,288 — 9,292
Dividends declared — — — ( 84,682 ) ( 84,682 )
Share repurchases ( 5,065 ) ( 51 ) — ( 559,948 ) ( 559,999 )
Excise tax on share repurchases — — — ( 5,163 ) ( 5,163 )
Cash paid for shares withheld for taxes — — — ( 17,623 ) ( 17,623 )
Share-based compensation — — 25,632 — 25,632
Net income — — — 1,472,109 1,472,109
Shareholders' equity, June 30, 2024 207,905 $ 2,079 $ 3,403,327 $ 7,817,417 $ 11,222,823
See accompanying Notes to Condensed Consolidated Financial Statements.
6
PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000’s omitted)
(Unaudited)
Six Months Ended
June 30,
2025 2024
Cash flows from operating activities:
Net income $ 1,131,282 $ 1,472,109
Adjustments to reconcile net income to net cash from operating activities:
Deferred income tax expense 19,798 89,321
Land-related charges 42,184 7,798
Depreciation and amortization 49,714 42,891
Equity income from unconsolidated entities ( 911 ) ( 40,069 )
Distributions of income from unconsolidated entities 3,060 2,358
Share-based compensation expense 30,973 29,084
Other, net ( 380 ) 120
Increase (decrease) in cash due to:
Inventories ( 533,041 ) ( 473,665 )
Residential mortgage loans available-for-sale 47,986 ( 55,346 )
Other assets ( 175,258 ) ( 294,335 )
Accounts payable, accrued and other liabilities ( 193,674 ) ( 123,002 )
Net cash provided by operating activities 421,733 657,264
Cash flows from investing activities:
Capital expenditures ( 64,138 ) ( 55,317 )
Investments in unconsolidated entities ( 7,954 ) ( 9,096 )
Distributions of capital from unconsolidated entities 39,419 3,474
Other investing activities, net ( 6,509 ) ( 5,262 )
Net cash used in investing activities ( 39,182 ) ( 66,201 )
Cash flows from financing activities:
Repayments of notes payable ( 9,163 ) ( 318,288 )
Financial Services borrowings (repayments), net ( 28,549 ) 24,416
Proceeds from liabilities related to consolidated inventory not owned 16,633 32,721
Payments related to consolidated inventory not owned ( 22,438 ) ( 70,608 )
Share repurchases ( 600,000 ) ( 559,999 )
Excise tax on share repurchases ( 11,550 ) —
Cash paid for shares withheld for taxes ( 23,761 ) ( 17,623 )
Dividends paid ( 90,077 ) ( 84,893 )
Net cash used in financing activities ( 768,905 ) ( 994,274 )
Net increase (decrease) in cash, cash equivalents, and restricted cash ( 386,354 ) ( 403,211 )
Cash, cash equivalents, and restricted cash at beginning of period 1,653,680 1,849,177
Cash, cash equivalents, and restricted cash at end of period $ 1,267,326 $ 1,445,966
Supplemental Cash Flow Information:
Interest paid (capitalized), net $ 8,088 $ 13,215
Income taxes paid (refunded), net $ 392,286 $ 365,061
See accompanying Notes to Condensed Consolidated Financial Statements.
7
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of presentation
PulteGroup, Inc. is one of the largest homebuilders in the United States ("U.S."), and our common shares trade on the New York Stock Exchange under the ticker symbol “PHM”. Unless the context otherwise requires, the terms "PulteGroup," the "Company," "we," "us," and "our" used herein refer to PulteGroup, Inc. 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 agency operations.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Subsequent events
We evaluated subsequent events up until the time the financial statements were filed with the Securities and Exchange Commission (the "SEC").
Other income (expense), net
Other income (expense), net consists of the following ($000’s omitted):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Write-offs of deposits and pre-acquisition costs $ ( 11,344 ) $ ( 3,685 ) $ ( 15,679 ) $ ( 7,675 )
Amortization of intangible assets ( 2,301 ) ( 2,498 ) ( 4,667 ) ( 5,038 )
Interest income 9,581 17,141 19,843 34,520
Interest expense ( 141 ) ( 117 ) ( 268 ) ( 232 )
Miscellaneous, net 3,199 2,483 6,126 8,433
Other income (expense), net $ ( 1,006 ) $ 13,324 $ 5,355 $ 30,008
8
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Revenue recognition
Home sale revenues - Home sale revenues and related profit are generally recognized when title to and possession of the home are transferred to the buyer, and our performance obligation to deliver the agreed-upon home is generally satisfied at the home closing date. 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 $ 520.5 million and $ 512.6 million at June 30, 2025 and December 31, 2024, 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. See Note 8 for information on warranties and related obligations.
Land sale and other revenues - We periodically elect to sell parcels of land to third parties in the event such assets no longer fit into our strategic operating plans or are zoned for commercial or other development. Land sales are generally outright sales of specified land parcels with cash consideration due on the closing date, which is generally when performance obligations are satisfied. Other revenues related to our construction services operations are generally recognized as materials are delivered and installation services are provided.
Financial Services revenues - Loan origination fees, commitment fees, and discount points are recognized upon loan origination. Expected gains and losses from the sale of residential mortgage loans and their related servicing rights are included in the measurement of interest rate lock commitments ("IRLCs") that are accounted for at fair value through Financial Services revenues at the time of commitment. Subsequent changes in the fair value of IRLCs and residential mortgage loans available-for-sale are reflected in Financial Services revenues as they occur. Interest income is accrued from the date a mortgage loan is originated until the loan is sold. Mortgage servicing fees represent fees earned for servicing loans until the loans 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 agency commissions relate to commissions on home 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 $ 90.9 million and $ 91.1 million at June 30, 2025 and December 31, 2024, 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 June 30, 2025 and December 31, 2024, residential mortgage loans available-for-sale had an aggregate fair value of $ 581.6 million and $ 629.6 million, respectively, and an aggregate outstanding principal balance of $ 587.1 million and $ 645.7 million, respectively. These changes in fair value were substantially offset by changes in fair value of the corresponding derivative instruments. Net gains from the sale of mortgages were $ 59.7 million and $ 60.7 million for the three months ended June 30, 2025 and 2024, respectively, and $ 109.5 million and $ 111.3 million for the six months ended June 30, 2025 and 2024, 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 June 30, 2025 and December 31, 2024, we had aggregate IRLCs of $ 739.0 million and $ 469.4 million, respectively. 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.
We hedge our exposure to interest rate market risk relating to residential mortgage loans available-for-sale and IRLCs using forward contracts on mortgage-backed securities, which are commitments to either purchase or sell a specified financial instrument at a specified future date for a specified price, and whole loan investor commitments, which are obligations of an investor to buy loans at a specified price within a specified time period. 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 June 30, 2025 and December 31, 2024, we had unexpired forward contracts of $ 1.1 billion and $ 977.0 million, respectively, and whole loan investor commitments of
9
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
$ 271.0 million and $ 237.1 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. Gains and losses on IRLCs are substantially offset by corresponding gains or losses on forward contracts on mortgage-backed securities and whole loan investor commitments. We are generally not exposed to variability in cash flows of derivative instruments for more than approximately 90 days.
The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted):
June 30, 2025 December 31, 2024
Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities
Interest rate lock commitments $ 4,000 $ 13,310 $ 1,452 $ 14,946
Forward contracts 572 13,767 13,233 1,943
Whole loan commitments 63 122 50 80
$ 4,635 $ 27,199 $ 14,735 $ 16,969
Earnings per share
Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, adjusted for unvested shares for the period (the “Denominator”). Computing diluted earnings per share is similar to computing basic earnings per share, except that the Denominator is increased to include the dilutive effects of unvested restricted share units and other potentially dilutive instruments.
Credit losses
We are exposed to credit losses primarily through our vendors and insurance carriers. We assess and monitor each counterparty’s ability to pay amounts owed by considering contractual terms and conditions, the counterparty’s financial condition, macroeconomic factors, and business strategy. Our assets exposed to credit losses consist primarily of insurance receivables, contract assets related to insurance agency commissions, accounts receivable, and vendor rebate receivables. Counterparties associated with these assets are generally highly rated. Allowances on the aforementioned assets were not material as of June 30, 2025.
New accounting pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): 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. We are currently evaluating the impact ASU 2023-09 will have on our financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” ("ASU 2024-03"), which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for us for annual periods beginning after December 31, 2026. We are currently evaluating the impact ASU 2024-03 will have on our financial statement disclosures.
10
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. House and land inventory
Major components of inventory were as follows ($000’s omitted):
June 30,
2025 December 31,
2024
Homes under construction $ 6,058,209 $ 5,770,355
Land under development 6,495,831 6,243,745
Raw land 561,719 548,848
Consolidated inventory not owned (a)
82,052 102,865
Land held for sale 18,197 27,007
$ 13,216,008 $ 12,692,820
(a) Consolidated inventory not owned includes land sold to third parties for which the Company retains a repurchase option.
We capitalize interest cost into inventory during the active development and construction of our communities. In all periods presented, we capitalized substantially all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels. Information related to interest capitalized into inventory is as follows ($000’s omitted):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Interest in inventory, beginning of period $ 139,541 $ 148,101 $ 139,960 $ 139,078
Interest capitalized 26,129 29,284 52,221 59,903
Interest expensed ( 29,046 ) ( 28,023 ) ( 55,557 ) ( 49,619 )
Interest in inventory, end of period $ 136,624 $ 149,362 $ 136,624 $ 149,362
Land option agreements
We enter into land option agreements in order to procure land for the construction of homes in the future. Pursuant to these land option agreements, we generally provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Such contracts enable us to defer acquiring portions of properties owned by third parties or unconsolidated entities until we have determined whether and when to exercise our option, which may serve to reduce our financial risks associated with long-term land holdings. Option deposits and pre-acquisition costs (such as environmental testing, surveys, engineering, and entitlement costs) are capitalized if the costs are directly identifiable with the land under option, the costs would be capitalized if we owned the land, and acquisition of the property is probable. Such costs are reflected in other assets and are reclassified to inventory upon taking title to the land. 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 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. See Note 1 .
11
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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 June 30, 2025 or December 31, 2024 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 June 30, 2025 and December 31, 2024 ($000’s omitted):
June 30, 2025 December 31, 2024
Deposits and
Pre-acquisition
Costs Remaining Purchase
Price Deposits and
Pre-acquisition
Costs Remaining Purchase
Price
Land options with VIEs $ 392,256 $ 3,540,196 $ 358,066 $ 3,104,196
Other land options 747,471 6,547,406 700,397 6,127,486
$ 1,139,727 $ 10,087,602 $ 1,058,463 $ 9,231,682
Land-related charges
Our evaluations for land-related charges are based on our best estimates of the future cash flows for our communities. Due to uncertainties in the estimation process, the significant volatility in demand for new housing, the long life cycles of certain of our communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from such estimates. See Note 3 for a summary of such charges by reportable segment.
3. Segment information
Our Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the U.S. and the construction of housing on such land. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments:
Northeast: Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia
Southeast: Georgia, North Carolina, South Carolina, Tennessee
Florida: Florida
Midwest: Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio
Texas: Texas
West: 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 agency operations. The Financial Services segment operates generally in the same markets as the Homebuilding segments. Evaluation of segment performance is generally based on income before income taxes. Each reportable segment generally follows the same accounting policies described in Note 1 .
In 2024, we adopted ASU 2023-07, which requires expanded disclosure of significant segment expenses and other segment items on an annual and interim basis. The adoption of ASU 2023-07 impacted the presentation of the performance measures presented in the below tables. Information for previous periods in the below tables conforms with the current year presentation.
12
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Revenues:
Northeast $ 347,437 $ 257,153 $ 597,171 $ 457,557
Southeast 747,017 770,587 1,385,746 1,487,809
Florida 1,037,352 1,294,077 2,017,891 2,438,954
Midwest 691,347 651,580 1,273,789 1,183,288
Texas 465,919 583,303 878,332 1,107,715
West 979,758 890,769 1,868,555 1,594,934
Other homebuilding (a)
33,767 40,524 82,936 74,539
4,302,597 4,487,993 8,104,420 8,344,796
Financial Services 101,158 111,662 191,986 204,019
Consolidated revenues $ 4,403,755 $ 4,599,655 $ 8,296,406 $ 8,548,815
Cost of revenues
Northeast $ ( 231,305 ) $ ( 172,601 ) $ ( 394,337 ) $ ( 310,994 )
Southeast ( 518,721 ) ( 516,273 ) ( 954,221 ) ( 997,577 )
Florida ( 740,196 ) ( 854,656 ) ( 1,413,651 ) ( 1,610,151 )
Midwest ( 492,436 ) ( 470,079 ) ( 906,296 ) ( 853,514 )
Texas ( 348,830 ) ( 409,507 ) ( 651,713 ) ( 779,934 )
West ( 766,190 ) ( 676,674 ) ( 1,472,785 ) ( 1,218,008 )
Other homebuilding (b)
( 48,260 ) ( 56,565 ) ( 123,004 ) ( 112,308 )
$ ( 3,145,938 ) $ ( 3,156,355 ) ( 5,916,007 ) ( 5,882,486 )
Selling, general, and administrative expenses:
Northeast $ ( 26,382 ) $ ( 23,550 ) $ ( 50,288 ) $ ( 44,841 )
Southeast ( 73,057 ) ( 74,027 ) $ ( 141,162 ) $ ( 141,007 )
Florida ( 100,641 ) ( 109,932 ) $ ( 199,094 ) $ ( 209,685 )
Midwest ( 59,260 ) ( 58,717 ) $ ( 120,373 ) $ ( 112,983 )
Texas ( 58,234 ) ( 65,882 ) $ ( 114,002 ) $ ( 126,326 )
West ( 82,682 ) ( 81,266 ) $ ( 167,435 ) $ ( 155,086 )
Other homebuilding (c)
9,803 52,229 8,564 71,189
$ ( 390,453 ) $ ( 361,145 ) $ ( 783,790 ) $ ( 718,739 )
13
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Other segment items (d) :
Northeast $ ( 1,164 ) $ ( 2,209 ) $ ( 2,739 ) $ ( 4,290 )
Southeast ( 7,597 ) ( 4,769 ) $ ( 12,929 ) $ ( 7,793 )
Florida ( 6,299 ) ( 4,728 ) $ ( 12,003 ) $ ( 7,454 )
Midwest ( 1,481 ) ( 2,387 ) $ ( 3,368 ) $ ( 4,040 )
Texas ( 4,783 ) ( 2,776 ) $ ( 7,682 ) $ ( 4,684 )
West ( 9,391 ) ( 7,735 ) $ ( 14,263 ) $ ( 14,201 )
Other homebuilding (e)
28,868 39,045 58,000 111,489
( 1,847 ) 14,441 $ 5,016 $ 69,027
Financial Services ( 58,361 ) ( 48,284 ) ( 113,331 ) ( 99,662 )
$ ( 60,208 ) $ ( 33,843 ) ( 108,315 ) ( 30,635 )
Income before income taxes (f) :
Northeast $ 88,586 $ 58,793 $ 149,807 $ 97,432
Southeast 147,642 175,518 $ 277,434 $ 341,432
Florida 190,216 324,761 $ 393,143 $ 611,664
Midwest 138,170 120,397 $ 243,752 $ 212,751
Texas 54,072 105,138 $ 104,935 $ 196,771
West 121,495 125,094 $ 214,072 $ 207,639
Other homebuilding 24,178 75,233 26,496 144,909
764,359 984,934 $ 1,409,639 $ 1,812,598
Financial Services 42,797 63,378 78,655 104,357
Consolidated income before income taxes $ 807,156 $ 1,048,312 1,488,294 1,916,955
(a) Other homebuilding includes revenues from land sales and construction services.
(b) Other homebuilding includes cost of revenues related to land sales, construction services, and amortization of capitalized interest.
(c) Other homebuilding includes insurance reserve reversals of $ 51.9 million and $ 78.7 million for the three and six months ended June 30, 2024, respectively (see Note 8 ). Other homebuilding also includes eliminations of corporate overhead allocated to the operating segments.
(d) Other Segment Items reflects other sources of income and expense, including internal capital charge allocations that are eliminated within Other homebuilding.
(e) Other homebuilding includes income from unconsolidated entities, interest, the amortization of intangible assets, and other items not allocated to the operating segments. Other homebuilding also includes 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.
(f) Includes certain land-related charges (see the following table and Note 2 ).
14
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Land-related charges (a) :
Northeast $ 47 $ 638 $ 241 $ 1,604
Southeast 3,525 1,566 5,674 2,556
Florida 2,850 576 5,289 917
Midwest 757 287 1,603 647
Texas 3,858 262 4,350 507
West 6,782 356 23,424 1,444
Other homebuilding 593 95 1,603 123
$ 18,412 $ 3,780 $ 42,184 $ 7,798
(a) Land-related charges include land impairments, net realizable value adjustments on land held for sale, and write-offs of deposits and pre-acquisition costs for land option contracts we elected not to pursue. Other homebuilding consists primarily of write-offs of capitalized interest related to such land-related charges.
Operating Data by Segment
($000’s omitted)
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Depreciation and amortization
Northeast $ 788 $ 763 $ 1,719 $ 1,442
Southeast 2,463 1,649 4,667 3,217
Florida 4,840 3,720 9,488 7,366
Midwest 2,249 2,071 4,392 4,046
Texas 2,006 1,735 3,914 3,333
West 4,400 3,928 8,757 7,406
Other homebuilding 5,764 5,820 11,652 11,716
22,510 19,686 44,589 38,526
Financial Services 2,536 2,144 5,125 4,365
$ 25,046 $ 21,830 $ 49,714 $ 42,891
15
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000's omitted)
June 30, 2025 December 31, 2024
Total
Inventory Total
Assets Total
Inventory Total
Assets
Northeast $ 739,159 $ 833,979 $ 716,530 $ 807,922
Southeast 2,228,169 2,595,890 2,006,958 2,298,692
Florida 3,302,285 3,750,799 3,246,588 3,676,910
Midwest 1,404,788 1,547,924 1,401,747 1,529,602
Texas 1,679,754 1,935,583 1,645,213 1,905,394
West 3,761,684 4,272,653 3,684,393 4,212,636
Other homebuilding (a)
100,169 1,805,206 ( 8,609 ) 1,934,728
13,216,008 16,742,034 12,692,820 16,365,884
Financial Services — 845,777 — 997,879
$ 13,216,008 $ 17,587,811 $ 12,692,820 $ 17,363,763
(a) Other homebuilding primarily includes cash and equivalents, capitalized interest, intangibles, deferred tax assets, other corporate items that are not allocated to the operating segments, and eliminations of certain inventory not owned allocated to the operating segments. Other homebuilding also includes goodwill of $ 68.9 million, net of cumulative impairment charges of $ 20.2 million, at both June 30, 2025 and December 31, 2024.
16
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. Debt
Notes payable
Our notes payable are summarized as follows ($000’s omitted):
June 30,
2025 December 31,
2024
5.500 % unsecured senior notes due March 2026 (a)
$ 251,867 $ 251,867
5.000 % unsecured senior notes due January 2027 (a)
337,277 337,277
7.875 % unsecured senior notes due June 2032 (a)
300,000 300,000
6.375 % unsecured senior notes due May 2033 (a)
400,000 400,000
6.000 % unsecured senior notes due February 2035 (a)
300,000 300,000
Net premiums, discounts, and issuance costs (b)
( 5,777 ) ( 6,324 )
Total senior notes $ 1,583,367 $ 1,582,820
Other notes payable 39,698 35,766
Notes payable $ 1,623,065 $ 1,618,586
Estimated fair value $ 1,718,275 $ 1,701,270
(a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries.
(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.
Other notes payable
Other notes payable include non-recourse and limited recourse notes with third parties that totaled $ 39.7 million and $ 35.8 million at June 30, 2025 and December 31, 2024, respectively. These notes have maturities ranging up to five 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 9 %. We recorded $ 13.1 million and $ 5.4 million of inventory through seller financing in the six months ended June 30, 2025 and 2024, respectively.
Revolving credit facility
We maintain a revolving credit facility (the "Revolving Credit Facility") maturing in June 2027 that has a maximum borrowing capacity of $ 1.3 billion and contains an uncommitted accordion feature that could increase the capacity to $ 1.8 billion, subject to certain conditions and availability of additional bank commitments. The Revolving Credit Facility also provides for the issuance of letters of credit that reduce the available borrowing capacity under the Revolving Credit Facility, up to the maximum borrowing capacity. The interest rate on borrowings under the Revolving Credit Facility may be based on either the Secured Overnight Financing Rate or a base rate plus an applicable margin, as defined therein. 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 June 30, 2025. Outstanding balances under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.
At June 30, 2025, we had no borrowings outstanding, $ 341.2 million of letters of credit issued, and $ 908.8 million of remaining capacity under the Revolving Credit Facility. At December 31, 2024, we had no borrowings outstanding, $ 321.1 million of letters of credit issued, and $ 928.9 million of remaining capacity under the Revolving Credit Facility.
17
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Joint venture debt
At June 30, 2025, aggregate outstanding debt of unconsolidated joint ventures was $ 36.5 million.
Financial Services debt
Pulte Mortgage maintains a master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") that matures on August 13, 2025. The maximum aggregate commitment under the Repurchase Agreement was $ 650.0 million at June 30, 2025, 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. Borrowings under the Repurchase Agreement are secured by residential mortgage loans available-for-sale. 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 June 30, 2025, Pulte Mortgage had $ 498.4 million outstanding at a weighted-average interest rate of 6.12 % and $ 151.6 million of remaining capacity under the Repurchase Agreement. At December 31, 2024, Pulte Mortgage had $ 526.9 million outstanding at a weighted-average interest rate of 6.13 % and $ 148.1 million of remaining capacity under the Repurchase Agreement. Pulte Mortgage was in compliance with all covenants and requirements as of such dates.
5. Shareholders’ equity
In the six months ended June 30, 2025, we declared cash dividends totaling $ 88.7 million and repurchased 5.8 million shares under our share repurchase authorization for $ 600.0 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 share repurchase authorization for $ 560.0 million. On January 29, 2025, the Board of Directors increased our share repurchase authorization by $ 1.5 billion. At June 30, 2025, we had remaining authorization to repurchase $ 1.6 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 six months ended June 30, 2025 and 2024, participants surrendered shares valued at $ 23.8 million and $ 17.6 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization.
6. Income taxes
Our effective tax rate was 24.6 % and 24.0 % for the three and six months ended June 30, 2025, respectively, compared with 22.8 % and 23.2 % for the comparable prior year periods in 2024. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and federal tax credits. Our income tax expense for the three and six months ended June 30, 2024 also reflected a reduction in income tax liabilities totaling $ 13.2 million related to the favorable resolution of uncertain state tax positions.
At June 30, 2025 and December 31, 2024, we had net deferred tax liabilities of $ 408.3 million and $ 388.5 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.
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 $ 35.1 million and $ 38.7 million of gross unrecognized tax benefits at June 30, 2025 and December 31, 2024, respectively. Additionally, we had accrued interest and penalties of $ 2.1 million and $ 1.9 million at June 30, 2025 and December 31, 2024, respectively.
18
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
7. Fair value disclosures
Accounting Standards Codification 820, “Fair Value Measurements and Disclosures”, provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows:
Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities.
Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active.
Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.
Our assets and liabilities measured or disclosed at fair value are summarized below ($000’s omitted):
Financial Instrument Fair Value
Hierarchy Fair Value
June 30,
2025 December 31,
2024
Measured at fair value on a recurring basis:
Residential mortgage loans available-for-sale Level 2 $ 581,597 $ 629,582
IRLCs Level 2 ( 9,310 ) ( 13,494 )
Forward contracts Level 2 ( 13,195 ) 11,290
Whole loan commitments Level 2 ( 59 ) ( 30 )
Measured at fair value on a non-recurring basis:
House and land inventory Level 3 $ 17,892 $ 20,016
Disclosed at fair value:
Cash, cash equivalents, and restricted cash Level 1 $ 1,267,326 $ 1,653,680
Financial Services debt Level 2 498,357 526,906
Senior notes payable Level 2 1,678,577 1,665,504
Other notes payable Level 2 39,698 35,766
Fair values for agency residential mortgage loans available-for-sale are determined based on quoted market prices for comparable instruments. Fair values for non-agency residential mortgage loans available-for-sale are determined based on purchase commitments from whole loan investors and other relevant market information available to management. Fair values for IRLCs, including the value of servicing rights, and forward contracts on mortgage-backed securities are valued based on market prices for similar instruments. Fair values for whole loan commitments are based on market prices for similar instruments from the specific whole loan investor.
The carrying amounts of cash and equivalents, Financial Services debt and other notes payable approximate their fair values due to their short-term nature and/or floating interest rate terms. The fair values of senior notes are based on quoted market prices, when available. 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 $ 1.6 billion at both June 30, 2025 and December 31, 2024.
19
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
8. Commitments and contingencies
Letters of credit and surety bonds
In the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. 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 $ 341.2 million and $ 3.1 billion, respectively, at June 30, 2025, and $ 321.1 million and $ 2.9 billion, respectively, at December 31, 2024. 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. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn.
Litigation and regulatory matters
We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment practices, and protection of the environment. As a result, we are subject to periodic examination or inquiry by various governmental agencies that administer these laws and regulations.
We establish liabilities for litigation, legal claims, and regulatory matters when such matters are both probable of occurring and any potential loss is reasonably estimable. We accrue for such matters based on the facts and circumstances specific to each matter and revise these estimates as the matters evolve. In such cases, an exposure to loss in excess of any amounts currently accrued may exist. In view of the inherent difficulty of predicting the outcome of these legal and regulatory matters, we generally cannot predict the ultimate resolution of the pending matters, the related timing, or the eventual loss. While the outcome of such contingencies cannot be predicted with certainty, we do not believe that the resolution of such matters will have a material adverse impact on our results of operations, financial position, or cash flows. However, to the extent the liability arising from the ultimate resolution of any matter exceeds the estimates reflected in the recorded reserves relating to such matter, we could incur additional charges that could be significant.
Warranty liabilities
Home buyers are provided with a limited warranty against certain building defects, including a one-year comprehensive limited warranty and coverage for certain other aspects of the home's construction and operating systems for periods of up to, and, in limited instances, exceeding, 10 years. We estimate the costs to be incurred under these warranties and record liabilities in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost per claim. We periodically assess the adequacy of the warranty liabilities for each geographic market in which we operate and adjust the amounts as necessary. Actual warranty costs in the future could differ from the current estimates. Changes to warranty liabilities were as follows ($000’s omitted):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Warranty liabilities, beginning of period $ 132,287 $ 122,742 $ 130,538 $ 120,393
Reserves provided 26,274 30,618 52,291 57,359
Payments ( 26,011 ) ( 26,799 ) ( 50,343 ) ( 51,633 )
Other adjustments 1,167 974 1,231 1,416
Warranty liabilities, end of period $ 133,717 $ 127,535 $ 133,717 $ 127,535
20
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Self-insured risks
We maintain, and require our subcontractors to maintain, general liability insurance coverage. We also maintain builders' risk, property, errors and omissions, workers compensation, and other business insurance coverages. These insurance policies protect us against a portion of the risk of loss from potential claims. However, we retain a significant portion of the overall risk for such claims either through our own self-insured per occurrence and aggregate retentions, deductibles, policies issued by our captive insurance subsidiaries, and any potential claims in excess of available insurance policy limits.
Our general liability insurance includes coverage for certain construction defects. While construction defect claims may relate to a variety of issues, the majority of our claims relate to alleged problems with siding, windows, roofing, and foundations. The availability of general liability insurance for the homebuilding industry and its subcontractors has become increasingly limited, and the insurance policies available require companies to retain significant per occurrence and aggregate retention levels. In certain instances, we may offer our subcontractors the opportunity to purchase general liability insurance through one of our captive insurance subsidiaries or participate in a project-specific insurance program. Policies issued by our captive insurance subsidiaries represent self-insurance of these risks by us, limited by reinsurance policies that we purchase. General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year. Our insurance coverage requires a per occurrence retention as well as an overall aggregate amount. Amounts paid to resolve insured claims apply to our per occurrence and aggregate retention obligations. Any amounts incurred in excess of the occurrence or aggregate retention levels are covered by insurance up to the purchased coverage levels. Our insurance policies, including the captive insurance subsidiaries' reinsurance policies, are maintained with highly-rated carriers for whom we believe counterparty default risk is not significant.
At any point in time, we are managing numerous individual claims related to general liability, property, errors and omission, workers compensation, and other business insurance coverages. We reserve for costs associated with these claims (including expected claims management expenses) on an undiscounted basis at the time revenue is recognized for each home closing and evaluate the recorded liabilities based on actuarial analyses of our historical claims. The actuarial analyses calculate estimates of the ultimate net cost of all unpaid losses, including estimates for incurred but not reported losses ("IBNR"). IBNR represents losses related to claims incurred but not yet reported plus development on reported claims.
Our recorded reserves for all such claims totaled $ 273.4 million and $ 267.5 million at June 30, 2025 and December 31, 2024, 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 68 % of the total general liability reserves at both June 30, 2025 and December 31, 2024. 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. The actuarial analyses of the reserves also consider historical third party recovery rates and claims management expenses.
Volatility in both national and local housing market conditions may affect the frequency and cost of construction defect claims. Additionally, IBNR estimates comprise the substantial majority of our liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in claims reporting and resolution patterns, third party recoveries, insurance industry practices, the regulatory environment, and legal precedent. State regulations vary, but construction defect claims are typically reported and resolved over an extended time period often exceeding ten years. Changes in the frequency and timing of reported claims and estimates of specific claim values can impact the underlying inputs and trends utilized in the actuarial analyses, which could have a material impact on the recorded reserves. Because of the inherent uncertainty in estimating future losses and the timing of such losses related to these claims, actual costs could differ significantly from estimated costs.
21
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Adjustments to reserves are recorded in the period in which the change in estimate occurs. Our lower ending reserve balance at June 30, 2025 compared with June 30, 2024 results primarily from adjustments made during 2024 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. These changes in actuarial estimates did not involve any 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. Costs associated with our insurance programs are classified within selling, general, and administrative expenses. Changes in these liabilities were as follows ($000's omitted):
Three Months Ended Six Months Ended
June 30, June 30,
2025 2024 2025 2024
Balance, beginning of period $ 276,294 $ 547,621 $ 267,474 $ 563,103
Reserves provided 15,840 22,409 27,853 42,375
Adjustments to previously recorded reserves ( 8,666 ) ( 51,863 ) ( 8,666 ) ( 78,708 )
Payments, net ( 10,020 ) ( 11,644 ) ( 13,213 ) ( 20,247 )
Balance, end of period $ 273,448 $ 506,523 $ 273,448 $ 506,523
Leases
We lease certain office space and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. 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. The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets and leasehold improvements are limited to the expected lease term. Certain of our lease agreements include rental payments based on a pro rata share of the lessor’s operating costs which are variable in nature. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.
ROU assets are classified within other assets on the balance sheet, while lease liabilities are classified within accrued and other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets and lease liabilities were $ 115.5 million and $ 131.6 million at June 30, 2025, respectively, and $ 93.9 million and $ 109.0 million at December 31, 2024, respectively. In the three and six months ended June 30, 2025 we recorded an additional $ 14.5 million and $ 34.1 million, respectively, of lease liabilities under operating leases, and $ 1.9 million and $ 5.5 million, respectively, in the comparable prior year periods. Payments on lease liabilities in the three and six months ended June 30, 2025 totaled $ 5.7 million and $ 11.5 million, respectively, and $ 5.8 million and $ 11.7 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 and six months ended June 30, 2025 our total lease expense was $ 15.2 million and $ 30.9 million, respectively, and $ 15.2 million and $ 30.2 million in the comparable prior year periods. Our total lease expense is inclusive of variable lease costs of $ 2.3 million and $ 5.3 million in the three and six months ended June 30, 2025, respectively, and $ 2.5 million and $ 6.1 million in the comparable prior year periods, as well as short-term lease costs of $ 5.4 million and $ 11.5 million in the three and six months ended June 30, 2025, respectively, and $ 6.0 million and $ 10.8 million in the comparable prior year periods. Sublease income was de minimis.
22
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The future minimum lease payments required under our leases as of June 30, 2025 were as follows ($000's omitted):
Years Ending December 31,
2025 (a)
$ 13,968
2026 27,712
2027 24,631
2028 22,273
2029 19,892
Thereafter 43,495
Total lease payments (b)
151,971
Less: Interest (c)
( 20,356 )
Present value of lease liabilities (d)
$ 131,615
(a) Remaining payments are for the six months ending December 31, 2025.
(b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $ 11.3 million of legally binding minimum lease payments for leases signed but not yet commenced at June 30, 2025.
(c) Our leases do not provide a readily determinable implicit rate. 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 6.0 years and 4.6 %, respectively, at June 30, 2025.
23
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