Item 1. Financial Statements
Item 1. Financial Statements
PULTEGROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000’s omitted)
September 30,
2025 December 31,
2024
(Unaudited)
ASSETS
Cash and equivalents $ 1,451,532 $ 1,613,327
Restricted cash 28,025 40,353
Total cash, cash equivalents, and restricted cash 1,479,557 1,653,680
House and land inventory 13,351,977 12,692,820
Residential mortgage loans available-for-sale 486,066 629,582
Investments in unconsolidated entities 179,192 215,416
Other assets 2,196,179 2,001,991
Goodwill 68,930 68,930
Other intangible assets 39,335 46,303
Deferred tax assets 49,743 55,041
$ 17,850,979 $ 17,363,763
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable $ 731,104 $ 727,995
Customer deposits 470,745 512,580
Deferred tax liabilities 490,213 443,566
Accrued and other liabilities 1,305,319 1,412,166
Financial Services debt 404,223 526,906
Notes payable 1,623,338 1,618,586
5,024,942 5,241,799
Shareholders' equity 12,826,037 12,121,964
$ 17,850,979 $ 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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Revenues:
Homebuilding
Home sale revenues $ 4,248,375 $ 4,343,227 $ 12,265,619 $ 12,610,981
Land sale and other revenues 53,169 19,284 140,345 96,327
4,301,544 4,362,511 12,405,964 12,707,308
Financial Services 103,255 113,831 295,241 317,848
Total revenues 4,404,799 4,476,342 12,701,205 13,025,156
Homebuilding Cost of Revenues:
Home sale cost of revenues ( 3,133,548 ) ( 3,091,267 ) ( 8,968,112 ) ( 8,897,835 )
Land sale and other cost of revenues ( 48,062 ) ( 25,287 ) ( 129,504 ) ( 101,204 )
( 3,181,610 ) ( 3,116,554 ) ( 9,097,616 ) ( 8,999,039 )
Financial Services expenses ( 58,897 ) ( 58,905 ) ( 173,478 ) ( 159,615 )
Selling, general, and administrative expenses ( 400,681 ) ( 406,897 ) ( 1,184,472 ) ( 1,125,637 )
Equity income from unconsolidated entities, net 2,422 2,508 3,333 42,577
Other income, net 1,755 9,702 7,110 39,709
Income before income taxes 767,788 906,196 2,256,082 2,823,151
Income tax expense ( 181,954 ) ( 208,282 ) ( 538,967 ) ( 653,128 )
Net income $ 585,834 $ 697,914 $ 1,717,115 $ 2,170,023
Per share:
Basic earnings $ 2.98 $ 3.38 $ 8.62 $ 10.36
Diluted earnings $ 2.96 $ 3.35 $ 8.55 $ 10.28
Cash dividends declared $ 0.22 $ 0.20 $ 0.66 $ 0.60
Number of shares used in calculation:
Basic 196,536 206,774 199,258 209,374
Effect of dilutive securities 1,605 1,686 1,548 1,683
Diluted 198,141 208,460 200,806 211,057
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 $
Shareholders' equity, June 30, 2025 197,599 $ 1,976 $ 3,465,074 $ 9,107,892 $ 12,574,942
Share issuances 6 1 — — 1
Dividends declared — — — ( 43,451 ) ( 43,451 )
Share repurchases ( 2,435 ) ( 24 ) — ( 299,976 ) ( 300,000 )
Excise tax on share repurchases — — — ( 2,994 ) ( 2,994 )
Cash paid for shares withheld for taxes — — — ( 543 ) ( 543 )
Share-based compensation — — 12,248 — 12,248
Net income — — — 585,834 585,834
Shareholders' equity, September 30, 2025 195,170 $ 1,953 $ 3,477,322 $ 9,346,762 $ 12,826,037
Shareholders' equity, December 31, 2024 202,913 $ 2,029 $ 3,425,384 $ 8,694,551 $ 12,121,964
Share issuances 453 6 8,558 — 8,564
Dividends declared — — — ( 132,199 ) ( 132,199 )
Share repurchases ( 8,196 ) ( 82 ) — ( 899,918 ) ( 900,000 )
Excise tax on share repurchases — — — ( 8,484 ) ( 8,484 )
Cash paid for shares withheld for taxes — — — ( 24,303 ) ( 24,303 )
Share-based compensation — — 43,380 — 43,380
Net income — — — 1,717,115 1,717,115
Shareholders' equity, September 30, 2025 195,170 $ 1,953 $ 3,477,322 $ 9,346,762 $ 12,826,037
5
Additional
Paid-in
Capital Retained
Earnings Total
Common Stock
Shares $
Shareholders' equity, June 30, 2024 207,905 $ 2,079 $ 3,403,327 $ 7,817,417 $ 11,222,823
Share issuances 9 — — — —
Dividends declared — — — ( 41,551 ) ( 41,551 )
Share repurchases ( 2,539 ) ( 25 ) — ( 319,975 ) ( 320,000 )
Excise tax on share repurchases — — — ( 3,189 ) ( 3,189 )
Cash paid for shares withheld for taxes — — — ( 840 ) ( 840 )
Share-based compensation — — 9,056 — 9,056
Net income — — — 697,914 697,914
Shareholders' equity, September 30, 2024 205,375 $ 2,054 $ 3,412,383 $ 8,149,776 $ 11,564,213
Shareholders' equity, December 31, 2023 212,558 $ 2,126 $ 3,368,407 $ 7,012,724 $ 10,383,257
Share issuances 421 4 9,288 — 9,292
Dividends declared — — — ( 126,233 ) ( 126,233 )
Share repurchases ( 7,604 ) ( 76 ) — ( 879,923 ) ( 879,999 )
Excise tax on share repurchases — — — ( 8,352 ) ( 8,352 )
Cash paid for shares withheld for taxes — — — ( 18,463 ) ( 18,463 )
Share-based compensation — — 34,688 — 34,688
Net income — — — 2,170,023 2,170,023
Shareholders' equity, September 30, 2024 205,375 $ 2,054 $ 3,412,383 $ 8,149,776 $ 11,564,213
See accompanying Notes to Condensed Consolidated Financial Statements.
6
PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000’s omitted)
(Unaudited)
Nine Months Ended
September 30,
2025 2024
Cash flows from operating activities:
Net income $ 1,717,115 $ 2,170,023
Adjustments to reconcile net income to net cash from operating activities:
Deferred income tax expense 51,921 116,013
Land-related charges 69,811 19,929
Depreciation and amortization 75,549 64,975
Equity income from unconsolidated entities ( 3,333 ) ( 42,577 )
Distributions of income from unconsolidated entities 3,060 2,557
Share-based compensation expense 43,221 39,247
Other, net ( 739 ) ( 74 )
Increase (decrease) in cash due to:
Inventories ( 635,860 ) ( 805,331 )
Residential mortgage loans available-for-sale 143,516 ( 45,184 )
Other assets ( 203,007 ) ( 366,279 )
Accounts payable, accrued and other liabilities ( 161,132 ) ( 40,115 )
Net cash provided by operating activities 1,100,122 1,113,184
Cash flows from investing activities:
Capital expenditures ( 91,401 ) ( 94,065 )
Investments in unconsolidated entities ( 9,171 ) ( 15,105 )
Distributions of capital from unconsolidated entities 45,669 9,017
Other investing activities, net ( 9,201 ) ( 8,197 )
Net cash used in investing activities ( 64,104 ) ( 108,350 )
Cash flows from financing activities:
Repayments of notes payable ( 9,163 ) ( 350,453 )
Financial Services borrowings (repayments), net ( 122,683 ) 24,465
Debt issuance costs ( 1,446 ) —
Proceeds from liabilities related to consolidated inventory not owned 25,643 46,256
Payments related to consolidated inventory not owned ( 32,981 ) ( 94,121 )
Share repurchases ( 900,000 ) ( 879,999 )
Excise tax on share repurchases ( 11,550 ) —
Cash paid for shares withheld for taxes ( 24,303 ) ( 18,463 )
Dividends paid ( 133,658 ) ( 126,560 )
Net cash used in financing activities ( 1,210,141 ) ( 1,398,875 )
Net increase (decrease) in cash, cash equivalents, and restricted cash ( 174,123 ) ( 394,041 )
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 $ 1,479,557 $ 1,455,136
Supplemental Cash Flow Information:
Interest paid (capitalized), net $ 12,904 $ 20,144
Income taxes paid (refunded), net $ 533,574 $ 546,344
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, net
Other income, net consists of the following ($000’s omitted):
Three Months Ended Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Write-offs of deposits and pre-acquisition costs $ ( 10,836 ) $ ( 4,732 ) $ ( 26,515 ) $ ( 12,406 )
Amortization of intangible assets ( 2,301 ) ( 2,498 ) ( 6,968 ) ( 7,536 )
Interest income 11,804 13,748 31,646 48,268
Interest expense ( 170 ) ( 120 ) ( 438 ) ( 352 )
Miscellaneous, net 3,258 3,304 9,385 11,735
Other income, net $ 1,755 $ 9,702 $ 7,110 $ 39,709
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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 $ 470.7 million and $ 512.6 million at September 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 $ 90.6 million and $ 91.1 million at September 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 September 30, 2025 and December 31, 2024, residential mortgage loans available-for-sale had an aggregate fair value of $ 486.1 million and $ 629.6 million, respectively, and an aggregate outstanding principal balance of $ 488.5 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 $ 59.6 million and $ 62.0 million for the three months ended September 30, 2025 and 2024, respectively, and $ 169.1 million and $ 173.2 million for the nine months ended September 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 September 30, 2025 and December 31, 2024, we had aggregate IRLCs of $ 758.3 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 September 30, 2025 and December 31, 2024, we had unexpired forward contracts of $ 1.2 billion and $ 977.0 million, respectively, and whole loan investor
9
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
commitments of $ 192.6 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):
September 30, 2025 December 31, 2024
Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities
Interest rate lock commitments $ 2,377 $ 15,416 $ 1,452 $ 14,946
Forward contracts 2,562 17,474 13,233 1,943
Whole loan commitments 113 66 50 80
$ 5,052 $ 32,956 $ 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 September 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):
September 30,
2025 December 31,
2024
Homes under construction $ 5,857,201 $ 5,770,355
Land under development 6,772,262 6,243,745
Raw land 584,641 548,848
Consolidated inventory not owned (a)
120,186 102,865
Land held for sale 17,687 27,007
$ 13,351,977 $ 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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Interest in inventory, beginning of period $ 136,624 $ 149,362 $ 139,960 $ 139,078
Interest capitalized 26,139 26,443 78,360 86,346
Interest expensed ( 31,199 ) ( 29,708 ) ( 86,756 ) ( 79,327 )
Interest in inventory, end of period $ 131,564 $ 146,097 $ 131,564 $ 146,097
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 September 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 September 30, 2025 and December 31, 2024 ($000’s omitted):
September 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 $ 399,980 $ 3,477,827 $ 358,066 $ 3,104,196
Other land options 765,801 6,394,924 700,397 6,127,486
$ 1,165,781 $ 9,872,751 $ 1,058,463 $ 9,231,682
Land-related charges
We recorded the following land-related charges ($000's omitted):
Three Months Ended Nine Months Ended
September 30, September 30,
Statement of Operations Classification 2025 2024 2025 2024
Land impairments Home sale cost of revenues $ 16,752 $ 3,081 $ 42,181 $ 3,204
Net realizable value ("NRV") adjustments - land held for sale Land sale and other cost of revenues 39 4,318 1,115 4,319
Write-offs of deposits and pre-acquisition costs Other expense, net 10,836 4,732 26,515 12,406
$ 27,627 $ 12,131 $ 69,811 $ 19,929
Our evaluations for land impairments, NRV adjustments, and write-offs of deposits and pre-acquisition costs are based on our best estimates of the future cash flows of 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, Rhode Island, 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
12
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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.
Operating Data by Segment
($000’s omitted)
Three Months Ended Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Revenues:
Northeast $ 303,181 $ 265,395 $ 900,352 $ 722,952
Southeast 770,295 666,019 2,156,041 2,153,828
Florida 1,098,712 1,167,456 3,116,603 3,606,409
Midwest 719,327 660,096 1,993,116 1,843,384
Texas 409,160 567,871 1,287,491 1,675,586
West 946,662 1,016,977 2,815,217 2,611,911
Other homebuilding (a)
54,207 18,697 137,144 93,238
4,301,544 4,362,511 12,405,964 12,707,308
Financial Services 103,255 113,831 295,241 317,848
Consolidated revenues $ 4,404,799 $ 4,476,342 $ 12,701,205 $ 13,025,156
Cost of revenues
Northeast $ ( 211,608 ) $ ( 179,062 ) $ ( 605,945 ) $ ( 490,057 )
Southeast ( 534,351 ) ( 450,638 ) ( 1,488,573 ) ( 1,448,215 )
Florida ( 775,440 ) ( 785,715 ) ( 2,189,091 ) ( 2,395,866 )
Midwest ( 506,999 ) ( 468,719 ) ( 1,413,295 ) ( 1,322,233 )
Texas ( 311,384 ) ( 406,174 ) ( 963,097 ) ( 1,186,108 )
West ( 759,282 ) ( 780,053 ) ( 2,232,067 ) ( 1,998,061 )
Other homebuilding (b)
( 82,546 ) ( 46,193 ) ( 205,548 ) ( 158,499 )
$ ( 3,181,610 ) $ ( 3,116,554 ) $ ( 9,097,616 ) $ ( 8,999,039 )
Selling, general, and administrative expenses:
Northeast $ ( 24,901 ) $ ( 23,745 ) $ ( 75,189 ) $ ( 68,586 )
Southeast ( 75,418 ) ( 70,912 ) ( 216,580 ) ( 211,919 )
Florida ( 100,587 ) ( 107,010 ) ( 299,681 ) ( 316,696 )
Midwest ( 61,387 ) ( 57,639 ) ( 181,760 ) ( 170,622 )
Texas ( 54,898 ) ( 67,029 ) ( 168,900 ) ( 193,355 )
West ( 85,333 ) ( 84,801 ) ( 252,769 ) ( 239,887 )
Other homebuilding (c)
1,843 4,239 10,407 75,428
$ ( 400,681 ) $ ( 406,897 ) $ ( 1,184,472 ) $ ( 1,125,637 )
13
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months Ended Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Other segment items (d) :
Northeast $ ( 1,141 ) $ ( 7,529 ) $ ( 3,880 ) $ ( 11,818 )
Southeast ( 7,422 ) ( 3,217 ) ( 20,349 ) ( 11,011 )
Florida ( 7,105 ) ( 6,750 ) ( 19,108 ) ( 14,203 )
Midwest ( 3,035 ) ( 2,573 ) ( 6,403 ) ( 6,613 )
Texas ( 4,659 ) ( 3,450 ) ( 12,340 ) ( 8,134 )
West ( 9,329 ) ( 8,571 ) ( 23,592 ) ( 22,772 )
Other homebuilding (e)
36,868 44,300 94,865 155,787
4,177 12,210 9,193 81,236
Financial Services ( 58,897 ) ( 58,905 ) ( 172,228 ) ( 158,565 )
$ ( 54,720 ) $ ( 46,695 ) $ ( 163,035 ) $ ( 77,329 )
Income before income taxes (f) :
Northeast $ 65,531 $ 55,059 $ 215,338 $ 152,491
Southeast 153,104 141,252 430,539 482,683
Florida 215,580 267,981 608,723 879,644
Midwest 147,906 131,165 391,658 343,916
Texas 38,219 91,218 143,154 287,989
West 92,718 143,552 306,789 351,191
Other homebuilding 10,372 21,043 36,868 165,954
723,430 851,270 2,133,069 2,663,868
Financial Services 44,358 54,926 123,013 159,283
Consolidated income before income taxes $ 767,788 $ 906,196 $ 2,256,082 $ 2,823,151
(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 $ 78.7 million for the nine months ended September 30, 2024, (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 nine months ended September 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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Land-related charges (a) :
Northeast $ 160 $ 5,890 $ 401 $ 7,494
Southeast 3,099 188 8,773 2,744
Florida 1,200 1,085 6,489 2,002
Midwest 898 188 2,501 835
Texas 7,840 1,257 12,190 1,764
West 13,710 3,352 37,134 4,796
Other homebuilding 720 171 2,323 294
$ 27,627 $ 12,131 $ 69,811 $ 19,929
(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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Depreciation and amortization
Northeast $ 770 $ 691 $ 2,488 $ 2,133
Southeast 3,059 1,740 7,726 4,957
Florida 4,797 3,882 14,285 11,249
Midwest 2,348 2,077 6,741 6,123
Texas 2,099 1,821 6,013 5,154
West 4,811 3,776 13,568 11,182
Other homebuilding 5,490 5,847 17,143 17,562
23,374 19,834 67,964 58,360
Financial Services 2,460 2,250 7,585 6,615
$ 25,834 $ 22,084 $ 75,549 $ 64,975
15
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000's omitted)
September 30, 2025 December 31, 2024
Total
Inventory Total
Assets Total
Inventory Total
Assets
Northeast $ 707,592 $ 801,006 $ 716,530 $ 807,922
Southeast 2,294,018 2,676,209 2,006,958 2,298,692
Florida 3,283,182 3,735,940 3,246,588 3,676,910
Midwest 1,458,892 1,600,987 1,401,747 1,529,602
Texas 1,651,183 1,905,180 1,645,213 1,905,394
West 3,860,048 4,364,332 3,684,393 4,212,636
Other homebuilding (a)
97,062 1,996,124 ( 8,609 ) 1,934,728
13,351,977 17,079,778 12,692,820 16,365,884
Financial Services — 771,201 — 997,879
$ 13,351,977 $ 17,850,979 $ 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 September 30, 2025 and December 31, 2024.
4. Debt
Notes payable
Our notes payable are summarized as follows ($000’s omitted):
September 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)
( 5,504 ) ( 6,324 )
Total senior notes $ 1,583,640 $ 1,582,820
Other notes payable 39,698 35,766
Notes payable $ 1,623,338 $ 1,618,586
Estimated fair value $ 1,744,352 $ 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 September 30, 2025 and December 31, 2024, respectively. These notes have maturities ranging up to five years , are
16
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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 $ 10.8 million of inventory through seller financing in the nine months ended September 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 September 30, 2025. Outstanding balances under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.
At September 30, 2025, we had no borrowings outstanding, $ 348.0 million of letters of credit issued, and $ 902.0 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.
Joint venture debt
At September 30, 2025, aggregate outstanding debt of unconsolidated joint ventures was $ 37.2 million.
Financial Services debt
Pulte Mortgage maintains a master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") that matures on August 12, 2026. The maximum aggregate commitment under the Repurchase Agreement was $ 625.0 million at September 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 September 30, 2025, Pulte Mortgage had $ 404.2 million outstanding at a weighted-average interest rate of 5.93 % and $ 220.8 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 nine months ended September 30, 2025, we declared cash dividends totaling $ 132.2 million and repurchased 8.2 million shares under our share repurchase authorization for $ 900.0 million. In the nine months ended September 30, 2024, we declared cash dividends totaling $ 126.2 million and repurchased 7.6 million shares under our share repurchase authorization for $ 880.0 million. On January 29, 2025, the Board of Directors increased our share repurchase authorization by $ 1.5 billion. At September 30, 2025, 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 nine months ended September 30, 2025 and 2024, participants surrendered shares valued a t $ 24.3 million and $ 18.5 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization.
17
PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
6. Income taxes
Our effective tax rate was 23.7 % and 23.9 % for the three and nine months ended September 30, 2025, respectively, compared with 23.0 % and 23.1 % 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 nine months ended September 30, 2024 reflected a reduction in income tax liabilities totaling $ 13.2 million related to the favorable resolution of uncertain state tax positions.
At September 30, 2025 and December 31, 2024, we had net deferred tax liabilities of $ 440.5 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 $ 32.9 million and $ 38.7 million of gross unrecognized tax benefits at September 30, 2025 and December 31, 2024, respectively. Additionally, we had accrued interest and penalties of $ 2.2 million and $ 1.9 million at September 30, 2025 and December 31, 2024, respectively.
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted, introducing various changes to U.S. federal tax law. The Company does not expect the Act to have a material impact on its consolidated financial statements.
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
September 30,
2025 December 31,
2024
Measured at fair value on a recurring basis:
Residential mortgage loans available-for-sale Level 2 $ 486,066 $ 629,582
IRLCs Level 2 ( 13,039 ) ( 13,494 )
Forward contracts Level 2 ( 14,912 ) 11,290
Whole loan commitments Level 2 47 ( 30 )
Measured at fair value on a non-recurring basis:
House and land inventory Level 3 $ 30,699 $ 20,016
Disclosed at fair value:
Cash, cash equivalents, and restricted cash Level 1 $ 1,479,557 $ 1,653,680
Financial Services debt Level 2 404,223 526,906
Senior notes payable Level 2 1,704,654 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 September 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 $ 348.0 million and $ 3.1 billion, respectively, at September 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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Warranty liabilities, beginning of period $ 133,717 $ 127,533 $ 130,538 $ 120,393
Reserves provided 21,164 28,009 73,455 85,368
Payments ( 25,420 ) ( 28,319 ) ( 75,763 ) ( 79,953 )
Other adjustments 2,868 2,818 4,099 4,233
Warranty liabilities, end of period $ 132,329 $ 130,041 $ 132,329 $ 130,041
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 $ 282.0 million and $ 267.5 million at September 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 69 % and 68 % of the total general liability reserves at September 30, 2025 and December 31, 2024, 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. 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 September 30, 2025 compared with September 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 Nine Months Ended
September 30, September 30,
2025 2024 2025 2024
Balance, beginning of period $ 273,448 $ 506,523 $ 267,474 $ 563,103
Reserves provided 12,433 20,281 36,363 62,656
Adjustments to previously recorded reserves — — ( 8,666 ) ( 78,708 )
Payments, net ( 3,859 ) ( 9,149 ) ( 13,149 ) ( 29,396 )
Balance, end of period $ 282,022 $ 517,655 $ 282,022 $ 517,655
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 $ 113.2 million and $ 129.6 million at September 30, 2025, respectively, and $ 93.9 million and $ 109.0 million at December 31, 2024, respectively. In the three and nine months ended September 30, 2025 we recorded an additional $ 2.7 million and $ 36.7 million , respectively, of lease liabilities under operating leases, and $ 3.6 million and $ 9.1 million, respectively, in the comparable prior year periods. Payments on lease liabilities in the three and nine months ended September 30, 2025 totaled $ 5.7 million and $ 17.2 million, respectively, and $ 5.9 million and $ 17.6 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 nine months ended September 30, 2025 our total lease expense was $ 14.6 million and $ 45.6 million, respectively, and $ 15.3 million and $ 45.5 million in the comparable prior year periods. Our total lease expense is inclusive of variable lease costs of $ 2.0 million and $ 7.3 million in the three and nine months ended September 30, 2025, respectively, and $ 2.3 million and $ 8.4 million in the comparable prior year periods, as well as short-term lease costs of $ 6.0 million and $ 17.4 million in the three and nine months ended September 30, 2025, respectively, and $ 6.2 million and $ 17.0 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 September 30, 2025 were as follows ($000's omitted):
Years Ending December 31,
2025 (a)
$ 7,985
2026 28,211
2027 25,167
2028 22,827
2029 20,351
Thereafter 44,507
Total lease payments (b)
149,048
Less: Interest (c)
( 19,440 )
Present value of lease liabilities (d)
$ 129,608
(a) Remaining payments are for the three months ending December 31, 2025.
(b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $ 8.2 million of legally binding minimum lease payments for leases signed but not yet commenced at September 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 September 30, 2025.
23
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.