What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-04 compared with 2025-02-06 · 96 added, 105 removed, 415 unchanged (33% of the section changed)

13 unchanged sentences

Diluted earnings per share $ 11.12 $ 14.69

In 2022, the Federal Reserve began raising its benchmark interest rate in response to persistent inflation that began after the onset of the COVID-19 pandemic.

These actions drove national mortgage and other interest rates significantly higher and negatively impacted home affordability and consumer sentiment.

The Federal Reserve cut their benchmark interest rate by 100 bps from September 2024 to December 2024.

Despite this reduction, national mortgage interest rates increased nearly 100 bps from September 2024 to December 2024 with a cumulative increase of approximately 400 bps since the beginning of 2022.

These higher financing costs, coupled with increases in the cost of land inventory and construction labor, as well as elevated overall inflation in recent years as compared with historical levels, have created affordability challenges for new homebuyers, resulting in decreased demand in the second half of 2024 as mortgage interest rates increased.

Despite these affordability challenges, interest in new homes remained at high levels in 2024, aided by a continuing limited supply of existing home inventory in combination with the market slowly adjusting to a higher interest rate environment, which has resulted in increased volatility in our new order pace over 2023 and 2024.

We have responded to these affordability challenges by adjusting sales prices where necessary and focusing sales incentives on closing cost incentives, especially mortgage interest rate buydowns.

These strategic decisions contributed to 2% growth in new orders from 2023 to 2024 but also drove a slight decrease in gross margins from 2023 to 2024.

We operate our business to generate a cadence of house starts to align with the sales environment, and an appropriate inventory of quick move-in speculative ("spec") homes as we focus on turning our assets and delivering high returns on investment, which has allowed us to achieve an effective balance of price and pace.

The supply chain constraints that arose in connection with the COVID-19 pandemic have largely subsided.

As a result, our production cycle times improved over the course of 2023 and 2024 and have now returned to near historical norms.

This decrease in cycle times, coupled with our strong backlog and focus on spec home production, contributed to a 9% increase in closings in 2024 as compared to 2023.

Within an evolving macroeconomic environment, consumers across all buyer segments and price points have continued demonstrating a strong desire for homeownership despite continued interest rate variability.

During 2023 and 2024, through a combination of our ongoing construction cost reduction initiatives, construction pacing, and sales strategies that capitalized on periods of strong consumer demand, we were able to achieve historically strong financial results, including higher income before income taxes than in any previous year.

Although higher mortgage interest rates may persist for some time, the limited supply of existing homes for sale, continuing low levels of unemployment, and demographics supporting housing demand remain favorable.

We expect that homebuyers will continue to face affordability challenges, so our sales paces may remain volatile on a monthly basis and we expect our sales incentives to remain elevated.

Additionally, we continued to face pressures in 2024 in the cost of land acquisition and development and the cost and availability of construction labor.

In 2025, consumer demand weakened due to ongoing affordability challenges, resulting from elevated mortgage interest rates and higher housing costs, as well as volatility in other macroeconomic and geopolitical conditions, including higher job losses and weakened consumer confidence.

We have responded to these conditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders) and closing cost incentives, especially mortgage interest rate buydowns.

Despite these efforts, net new orders in units decreased 4% in 2025 versus 2024.

We expect that many homebuyers will continue to face affordability challenges, so our sales paces may remain volatile on a monthly basis.

In response, we expect our sales incentives to remain elevated and for our pace of house starts to remain dynamic.

Additionally, we continue to face pressure in the cost of land acquisition and development.

Due to the length of our land development and construction cycle times, there is a lag between when such cost changes occur and when they impact our operating results.

This is evidenced in our gross margin from home sales, which decreased to 26.3% in 2025 versus 28.9% in 2024.

Additionally, gross margin from home sales decreased each quarter in 2025, from 27.5% in the first quarter of 2025 to 24.7% in the fourth quarter of 2025.

These decreases are primarily due to the aforementioned elevated sales incentives combined with higher land costs.

While we expect to continue to generate healthy gross margins, they may decline somewhat in future periods as a result of these factors.

We remain focused on taking a measured approach to our capital allocation strategy to effectively respond to future volatility in demand.

Accordingly, we are focused on protecting liquidity and closely managing our cash flows while also continuing to focus on shareholder returns, including the following actions:

In response to the significant shift in market conditions in 2025, we have slowed the pace of our housing starts, have increased sales incentives, and are taking additional pricing actions in many of our communities, which resulted in $77.4 million of land inventory impairments in 2025.

We continue to update the underwriting for our land option contracts prior to buying additional land and have made decisions to walk away from a number of land option agreements, which resulted in write-offs of deposits and pre-acquisition costs totaling $48.4 million in 2025.

We will continue working with our trade partners to update the costs for materials, labor, and services to reflect changes in market conditions and will continue to adjust our overhead cost structure as necessary to align with demand.

Although elevated mortgage interest rates and volatile macroeconomic and geopolitical conditions may persist for some time, we believe the demographics supporting housing demand remain favorable over the long term.

Inventories of new and existing homes have increased in the majority of our geographies as a result of the weakened demand experienced this year, so we are taking a measured approach to our capital allocation strategy as we anticipate continued volatility in demand.

Accordingly, we

are focused on protecting liquidity and closely managing our cash flows while also continuing to emphasize shareholder returns, including the following actions:

– Increasing our lot optionality within our land pipeline for increased flexibility;

– Producing sufficient levels of spec inventory (houses without customer orders) to service buyers seeking to close within 30 to 90 days;

– Maintaining a focus on shareholder return through share buybacks and dividends, including a 10% increase in our dividends from $0.20 to $0.22 per share effective with our January 2025 dividend payment and an additional $1.5 billion share repurchase authorization effective January 2025;

– Taking an opportunistic approach to repurchasing debt;

– Maintaining ample liquidity.

We believe our strategic approach with respect to sales incentives, advertising, and our production cadence will enable us to meet consumer demand at the selling prices necessary to turn our inventory, maintain market share, and generate healthy returns.

And we remain confident in our ability to navigate the future environment and to position the Company to take advantage of opportunities as they arise and support future growth and continued profitability and financial strength.

– Producing sufficient levels of spec inventory to service buyers seeking to close within 30 to 90 days;

– Maintaining a focus on shareholder return through dividends and share buybacks, including an 18% increase in our dividends from $0.22 to $0.26 per share effective with our January 2026 dividend payment and approving an additional $1.5 billion share repurchase authorization effective January 2025, bringing our total remaining share repurchase authorization to $1.0 billion as of December 31, 2025, after $1.2 billion of share repurchases in 2025;

– Maintaining a modest leverage profile and ample liquidity.

We believe our strategic approach with respect to balancing sales price with sales pace, including actions taken related to sales incentives and our production cadence, will enable us to meet consumer demand at the selling prices necessary to turn our inventory, maintain market share, and generate healthy returns.

We remain confident in our ability to navigate the future environment and to position the Company to take advantage of opportunities as they arise and support future growth and continued profitability and financial strength.

Homebuilding Operations

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Other income (expense), net (e)

61,752 58 % 39,201

(91,502) (d) 61,752

Income before income taxes $ 2,753,291 (27) % $ 3,795,924

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Home sale revenues

Home sale revenues for 2024 were higher than 2023 by $1.7 billion, or 11%.

The increase was attributable to a 9% increase in closings combined with a 2% increase in average selling price.

The increase in closings during 2024 was primarily attributable to a strong backlog, improved production cycle times, and initiatives to prioritize quick move-in spec homes to satisfy customer desire to quickly close on homes due to the volatile interest rate environment and to ensure an efficient production cadence of homes.

The increase in average selling price during 2024 reflected the impacts of consumer demand, persistent inflation, and a slight mix shift toward our West segment, which carries a higher average selling price, partially offset by a slight increase in the mix of first-time buyer homes, which typically carry a lower average selling price.

Home sale revenues for 2025 were lower than 2024 by $575.0 million, or 3%.

The decrease was attributable to a 5% decrease in closings, partially offset by a 2% increase in average selling price.

The decrease in closings in 2025 was primarily attributable to lower net new orders in 2025 and a weaker order backlog entering the year, partially offset by a higher community count and improved production cycle times.

Average selling price increased primarily due to product and geographic mix, including a slightly higher mix of closings toward our move-up buyers and in our Northeast segment, both of which carry a higher average selling price, partially offset by higher sales incentives.

Home sale gross margins

Home sale gross margins were 26.3% in 2025, compared with 28.9% in 2024.

Gross margins remained strong in both 2024 and 2023 relative to historical levels.

Due to the low supply of new and existing homes for sale, we were generally able to maintain net sales pricing to substantially offset increases in house and land costs and higher sales incentives over these periods.

However, we expect sales incentives, especially mortgage interest rate buydowns, to remain elevated to address buyer affordability challenges, along with higher land and house costs, which may continue to impact our gross margins in the near term.

The lower home sale gross margins were primarily attributable to the aforementioned pricing actions we took in 2025, including elevated sales incentives, increased land acquisition and development costs, and higher land impairments as the result of the more challenging market conditions.

We expect these factors to continue to impact our gross margins over the near term.

Gross margins in 2025 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels, which we expect will continue to be an area of focus in 2026.

While we have made significant progress in reducing the level of spec inventory during 2025, the level of completed spec inventory remains elevated for the current demand environment.

Land sale and other revenues

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The gross dollar amount of our SG&A increased $252.7 million, or 19%, in 2025 compared with 2024.

This increase resulted primarily from overhead costs to support increased production volumes coupled with higher compensation costs, partially offset by insurance reserve reversals of $333.9 million in 2024, compared to insurance reserve reversals of $130.8 million in 2023.

This increase resulted primarily from insurance reserve reversals of $42.3 million in 2025 compared to $333.9 million in 2024.

Additionally, SG&A in 2025 reflects headcount and technology costs to support ongoing production volumes and investments for future growth.

We expect to continue managing and balancing our overhead costs consistent with the demand environment.

Other income (expense), net

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(20,093) (10,034)

Goodwill impairment ( Note 1 )

Property and equipment impairments (49,629) —

Gain (loss) on debt retirement — (222)

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11,392 31,267

Total other income (expense), net $ 61,752 $ 39,201

Total other income (expense), net (b)

$ (91,502) $ 61,752

(a) Includes a gain of $17.5 million in 2024 related to the sale of a non-homebuilding property.

Interest income began to increase significantly in 2023 and has remained elevated in 2024 as the result of higher returns on invested cash balances due to the elevated interest rate environment.

(b) Other income (expense), net includes impairments in 2025 resulting from our expected divestiture of certain manufacturing assets.

The net assets and operating results related to such manufacturing assets are immaterial.

Net new orders

Net new orders in units increased 2% in 2024 compared with 2023, while net new orders in dollars increased by 8% compared with 2023.

The increased net new order volume in 2024 was primarily due to a 4% increase in average active communities.

The increase in net new orders in dollars was primarily attributable to the higher unit volume along with geographic mix, including

our West segment, which carries a higher average selling price.

The annual cancellation rate (canceled orders for the period divided by gross new orders for the period) decreased to 15% in 2024 compared to 16% in 2023.

Cancellation rates began to increase in 2022 and have now returned to historical levels.

Ending backlog dollars, which represents orders for homes that have not yet closed, decreased 11% in 2024 compared with 2023, primarily as a result of decreased demand in the second half of 2024 as mortgage interest rates increased and improved construction cycle times.

Net new orders in units decreased 4% in 2025 compared with 2024, while net new orders in dollars decreased by 6% compared with 2024.

The decreased net new order volume and dollars in 2025 were primarily due to lower order volume in our Texas and West segments.

The annual cancellation rate (canceled orders for the period divided by gross new orders for the period) was 15% in each of 2025 and 2024.

Ending backlog dollars, which represents orders for homes that have not yet closed, decreased 19% in 2025 compared with 2024 due to the aforementioned lower order volume.

Homes in production

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The number of homes in production at December 31, 2025 was 14% lower compared to December 31, 2024.

This decrease was primarily due to a decreased number of sold homes due to lower backlog and improved production cycle times, which reduces the length of time a home sits in inventory.

The number of unsold homes under construction increased in 2024, which reflects our strategic decision to increase starts of spec units in response to buyer demand for quick move-in homes.

We continue to carefully monitor our production levels heading into the spring 2025 selling season and expect to lower the percentage of our inventory that is unsold by the end of 2025.

This decrease was primarily due to lower order volumes and improved production cycle times, which reduces the length of time a home remains under construction.

Controlled lots

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For reporting purposes, our Homebuilding operations are aggregated into six reportable segments:

Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia

Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Virginia

Georgia, North Carolina, South Carolina, Tennessee

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Southeast 560,480 (11) % 631,527

1,121,311 (6) % 1,193,481

Florida 821,646 (27) % 1,121,311

Midwest 539,061 10 % 490,185

Texas 162,179 (53) % 345,594

552,839 45 % 379,993

Other homebuilding (d)

424,472 110 % 202,382

West 378,997 (31) % 552,839

Other homebuilding (b)

(2,939) (c) 424,472

$ 2,753,291 (27) % $ 3,795,924

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(a) Includes land-related charges as summarized in the following land-related charges table ( Notes 2 and 3 ).

(b) Includes a gain of $17.5 million in 2024 from the sale of a non-homebuilding property.

(d) Other homebuilding includes income from unconsolidated entities, interest, the amortization of intangible assets, the amortization of capitalized interest, other items not allocated to the operating segments, and the elimination of internal capital charges allocated to the operating segments.

Also includes insurance reserve reversals of $333.9 million and $130.8 million in 2024 and 2023, respectively ( Note 11 ), and a gain of $39.5 million in 2024 related to the sale of our minority interest in a joint venture.

(b) Other homebuilding includes income from unconsolidated entities, interest, the amortization of intangible assets,impairment of intangible assets, the amortization of capitalized interest, and other items not allocated to the operating segments, and the elimination of internal capital charges allocated to the operating segments.

Also includes insurance reserve reversals of $42.3 million and $333.9 million in 2025 and 2024, respectively ( Note 11 ), goodwill impairment of $28.6 million in 2025 ( Note 1 ), impairment of property and equipment of $49.6 million in 2025 ( Note 1 ), and a gain of $39.5 million in 2024 related to the sale of our minority interest in a joint venture.

The following table presents additional selected financial information for our reportable Homebuilding segments:

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Years Ended December 31,

Land-related charges*:

Land-related charges (a) :

Northeast $ 1,779 $ 8,142

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$ 126,914 $ 34,572

* Land-related charges include land impairments, net realizable value adjustments for land held for sale, and write-offs of deposits and pre-acquisition costs.

(a) Land-related charges include land impairments, net realizable value adjustments for land held for sale, and write-offs of deposits and pre-acquisition costs.

Other homebuilding consists primarily of write-offs of capitalized interest resulting from land-related charges.

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For 2025, Northeast home sale revenues increased 16% compared with 2024 due to a 9% increase in closings combined with a 7% increase in average selling price.

The increase in closings was mixed among markets, while the increase in average selling price occurred across the majority of markets.

Income before income taxes increased 9%, primarily due to increased revenues, which were mixed among markets, and increased gross margins across the majority of markets.

Net new orders increased across the majority of markets.

For 2024, Southeast home sale revenues increased 8% compared with 2023 due to a 10% increase in closings partially offset by 1% decrease in average selling price.

The increase in closings occurred across the majority of markets while the decrease in average selling price was mixed among markets.

Income before income taxes increased 5%, primarily due to increased revenues across the majority of markets and increased gross margins, which were mixed among markets.

Net new orders decreased across the majority of markets.

For 2024, Florida home sale revenues increased 1% compared with 2023 due to a 2% increase in closings partially offset by a 1% decrease in average selling price.

The increase in closings was mixed among markets, while the decrease in average selling price occurred across the majority of markets.

Income before income taxes decreased 6%, primarily due to lower gross margins across the majority of markets.

The increase in closings occurred across the majority of markets, while the increase in average selling price occurred across all markets.

Income before income taxes increased 28%, primarily due to increased revenues across the majority of markets, and higher gross margins across all markets.

Net new orders decreased across the majority of markets.

For 2024, Midwest home sale revenues increased 24% compared with 2023 due to a 20% increase in closings combined with a 3% increase in average selling price.

The increase in closings occurred across all markets while the increase in average selling price occurred across the majority of markets.

Income before income taxes increased 38%, primarily due to increased revenues and gross margins across all markets.

For 2025, Southeast home sale revenues increased 3% compared with 2024 due to a 5% increase in average selling price partially offset by a 2% decrease in closings.

The increase in average selling price was mixed among markets, while the decrease in closings occurred across the majority of markets.

Income before income taxes decreased 11% primarily due to lower gross margins across all markets.

Net new orders increased across the majority of markets.

For 2024, Texas home sale revenues increased 5% compared with 2023 due to a 3% increase in closings combined with a 2% increase in average selling price.

The increase in closings occurred across the majority of markets, while the increase in average selling price was mixed among markets.

Income before income taxes decreased 7%, primarily due to decreased gross margins in Central Texas.

For 2025, Florida home sale revenues decreased 9% compared with 2024 due to a 6% decrease in closings combined with a 4% decrease in average selling price.

The decrease in closings and average selling price occurred across the majority of markets.

Income before income taxes decreased 27%, primarily due to lower revenue across the majority of markets and lower gross margins across all markets.

Net new orders increased across the majority of markets.

For 2025, Midwest home sale revenues increased 5% compared with 2024 due to a 6% increase in closings partially offset by a slight decrease in average selling price.

The increase in closings and decrease in average selling price occurred across the majority of markets.

Income before income taxes increased 10%, primarily due to increased revenues and gross margins across the majority of markets.

The decrease in net new orders was mixed among markets.

For 2024, West home sale revenues increased 24% compared with 2023 primarily due to an 18% increase in closings combined with a 5% increase in average selling price.

The increase in closings occurred across all markets while the increase in average selling price occurred across the majority of markets.

Income before income taxes increased 45%, primarily due to increased revenues and gross margins across all markets.

Results for 2024 also include a gain of $10.7 million related an individual property sale in Northern California.

Net new orders increased across all markets.

For 2025, Texas home sale revenues decreased 22% compared with 2024 due to a 20% decrease in closings combined with a 2% decrease in average selling price.

The decrease in closings occurred across all markets, while the decrease in average selling price was primarily due to decreases in Central Texas.

Income before income taxes decreased 53%, primarily due to decreased gross margins across the majority of markets.

Net new orders decreased across all markets.

For 2025, West home sale revenues decreased 1% compared with 2024 primarily due to an 7% decrease in closings partially offset by a 6% increase in average selling price.

The decrease in closings occurred across the majority of markets while the increase in average selling price occurred across the majority of markets.

Income before income taxes decreased 31%, primarily due to decreased gross margin across the majority of markets.

Net new orders decreased across the majority of markets.

Financial Services Operations

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Total funded originations 100 % 100 %

Total Financial Services revenues during 2024 increased 35% compared with 2023 primarily due to an increase in origination volumes resulting from increased closings within Homebuilding and improved capture rates.

Revenues per loan also increased as the result of a more favorable operating environment for our mortgage operations.

The increased use of closing cost incentives in the form of mortgage interest rate buydowns has also contributed favorably to our mortgage operations volumes and revenues per loan.

Total Financial Services revenues during 2025 decreased 10% compared with 2024 reflective of the lower homebuilding volume and lower margins on loan production in a more competitive environment.

Insurance agency commissions reflect lower policy retention and commission rates as a result of the evolving environment for home insurance as carriers adjust their premiums, geographic markets, and product coverages.

Income before income taxes

The increase in income before income taxes for 2024 as compared with 2023 was primarily due to the increase in home closings in our Homebuilding operations, as well as higher loan origination volume and revenues per loan in our mortgage operations.

The decrease in income before income taxes for 2025 as compared with 2024 was primarily due to lower insurance agency commissions.

Our effective income tax rate was 23.8% and 23.0% for 2025 and 2024, respectively.

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

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.

See Note 8 for additional discussion of our effective income tax rate.

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For the next 12 months, we expect our principal demand for funds will be for the acquisition and development of land inventory, construction of house inventory, and operating expenses, including our general and administrative expenses.

Though we experienced significant improvement in 2023 and 2024, the elongation of our production cycle in recent years has required a greater investment of cash in our homes under production.

Though we generated significant cash flows from operations in 2024 and 2025, as we increase the number of homes under production in the future, this will require a greater use of cash.

Additionally, we plan to continue our dividend payments and repurchases of common stock.

In August 2025, we need to repay or refinance Pulte Mortgage's master repurchase agreement

with third-party lenders (as amended, the "Repurchase Agreement").

In August 2026, we need to repay or refinance Pulte Mortgage's master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement").

While we intend to refinance the Repurchase Agreement, there can be no assurances that the Repurchase Agreement can be renewed or replaced on commercially reasonable terms upon its expiration.

However, we believe we have adequate liquidity to meet Pulte Mortgage's anticipated financing needs.

Beyond the next twelve months, we will need to repay or refinance our Revolving Credit Facility, which matures in June 2027, and our unsecured senior notes, the next tranche of which becomes due in 2026.

Beyond the next twelve months, we will need to repay or refinance our Revolving Credit Facility, which matures in 2031, and our unsecured senior notes, the next tranche of which becomes due in March 2026.

We may from time to time repurchase our unsecured senior notes through open market purchases, privately negotiated transactions, or otherwise.

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At December 31, 2025, we had $1.6 billion of unsecured senior notes outstanding with no repayments due until March 2026, when $251.9 million of notes are scheduled to mature.

During the twelve months ended 2024, we completed repurchases of $193.4 million and $106.6 million of our unsecured senior notes scheduled to mature in 2026 and 2027, respectively, through a cash tender offer.

Our total repurchases during the twelve months ended 2024, including open market repurchases, were $310.2 million.

Other notes payable

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $47.2 million at December 31, 2025.

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.

These notes have maturities ranging up to 4 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%.

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Revolving credit facility

We maintain a revolving credit facility ("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.

As of December 31, 2025, we maintained a revolving credit facility ("Revolving Credit Facility") scheduled to mature in June 2027 with a maximum borrowing capacity of $1.3 billion and an uncommitted accordion feature that could increase the capacity to $1.8 billion, subject to certain conditions and availability of additional bank commitments.

Effective February 4, 2026, we amended and restated the Revolving Credit Facility to (i) extend the maturity date to February 4, 2031, (ii) increase total committed capacity to $1.75 billion, and (iii) expand the uncommitted accordion feature to $750 million, providing for potential capacity of $2.5 billion, subject to certain customary conditions and additional lender 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.

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As of December 31, 2025, we were in compliance with all covenants and requirements.

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

Outstanding amounts and other obligations under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.

At December 31, 2025, we had no borrowings outstanding, $357.1 million of letters of credit issued, and $892.9 million of remaining capacity under the Revolving Credit Facility.

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Pulte Mortgage maintains a master repurchase agreement with third-party lenders entered into in August 2025 (the "Repurchase Agreement") that matures on August 12, 2026.

The maximum aggregate commitment was $675.0 million at December 31, 2024 and decreased to $650.0 million at January 14, 2025, which continues until maturity.

The maximum aggregate commitment was $625.0 million at December 31, 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.

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 December 31, 2025, Pulte Mortgage had $532.3 million outstanding at a weighted average interest rate of 5.51%, and $92.7 million of remaining capacity under the Repurchase Agreement.

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We declared quarterly cash dividends totaling $183.0 million and $171.4 million in 2025 and 2024, respectively, and repurchased 10.6 million and 10.1 million shares in 2025 and 2024, respectively, for a total of $1.2 billion and $1.2 billion in 2025 and 2024, respectively.

On January 29, 2024, the Board of Directors increased our share repurchase authorization by $1.5 billion.

On January 29, 2025, the Board of Directors increased our share repurchase authorization by $1.5 billion, which was publicly announced on January 30, 2025.

At December 31, 2025, we had remaining authorization to repurchase $982.9 million of common shares.

On January 29, 2025, the Board of Directors increased our share repurchase authorization by an additional $1.5 billion.

Contractual obligations

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Net cash used in investing activities totaled $80.4 million in 2025, compared with $94.5 million in 2024.

The 2024 cash outflows primarily reflect capital expenditures of $118.5 million related to our ongoing investment in new communities, construction operations, and information technology applications.

Net cash used in investing activities in 2023 primarily reflected $23.4 million of investments in unconsolidated entities primarily in support of our land development activities and capital expenditures of $92.2 million related to our ongoing investment in new communities, construction operations, and information technology applications.

The 2025 cash outflows primarily reflect capital expenditures of $122.7 million related to our ongoing investment in new communities, construction operations, and information technology applications, partially offset by distributions of capital from unconsolidated entities of $63.7 million.

Net cash used in investing activities in 2024 primarily reflects capital expenditures of $118.5 million related to our ongoing investment in new communities, construction operations, and information technology applications.

Financing activities

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The net cash used in financing activities for 2025 resulted primarily from the repurchase of 10.6 million common shares for $1.2 billion under our repurchase authorization, cash dividends of $176.7 million, and repayments of debt of $24.5 million.

Net cash used in financing activities for 2023 resulted primarily from the repurchase of 13.8 million common shares for $1.0 billion under our repurchase authorization and cash dividends of $142.5 million.

Net cash used in financing activities for 2024 resulted primarily from the repurchase of 10.1 million common shares for $1.2 billion under our repurchase authorization, cash dividends of $167.7 million, and repayments of debt of $355.8 million.

Although significant changes in market conditions have impacted our seasonal patterns in the past and could do so again, we have historically experienced variability in our quarterly results from operations due to the seasonal nature of the homebuilding industry.

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Communities that demonstrate potential impairment indicators are tested for impairment by comparing the expected undiscounted cash flows for the community to its carrying value.

For those communities whose carrying values exceed the expected undiscounted cash flows, we determine the fair value of the community and impairment charges are recorded if the fair value of the community’s inventory is less than its carrying value.

For those communities whose carrying values exceed the expected undiscounted cash

flows, we determine the fair value of the community and impairment charges are recorded if the fair value of the community’s inventory is less than its carrying value.

We generally determine the fair value of each community using a combination of discounted cash flow models and market comparable transactions, where available.

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Additionally, we have $1.3 billion of deposits and pre-acquisition costs at December 31, 2025 related to option agreements to acquire additional land.

In the event of an extended economic slowdown, we could elect to

cancel a large portion of such land option agreements, which would generally result in the write-off of the related deposits and pre-acquisition costs.

In the event of an extended economic slowdown, we could elect to cancel a large portion of such land option agreements, which would generally result in the write-off of the related deposits and pre-acquisition costs.

Self-insured risks

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

During 2024 and 2023, we reduced general liability reserves by $333.9 million and $130.8 million, respectively, as a result of changes in estimates resulting from actual claim experience observed being less than anticipated in previous actuarial projections.

During 2025 and 2024, we reduced general liability reserves by $42.3 million and $333.9 million, respectively, 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 significant changes in actuarial methodology but did impact the development of estimates for future periods, which resulted in adjustments to the IBNR portion of our recorded liabilities.

changes in actuarial estimates did not involve any significant changes in actuarial methodology but did impact the development of estimates for future periods, which resulted in adjustments to the IBNR portion of our recorded liabilities.

There were no material adjustments to individual claims.

3 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis