PULTEGROUP INC/MI/ 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PULTEGROUP, INC. CONSOLIDATED BALANCE SHEETS December 31, 2025 and 2024 ($000’s omitted, except per share data) 2025 2024 ASSETS Cash and equivalents $ 1,980,869 $ 1,613,327 Restricted cash 27,907 40,353 Total cash, cash equivalents, and restricted cash 2,008,776 1,653,680 House and land inventory 12,925,413 12,692,820 Residential mortgage loans available-for-sale 613,665 629,582 Investments in unconsolidated entities 167,342 215,416 Other assets 2,217,483 2,001,991 Goodwill 40,377 68,930 Other intangible assets 26,210 46,303 Deferred tax assets 49,157 55,041 $ 18,048,423 $ 17,363,763 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Accounts payable, including book overdrafts of $ 78,613 and $ 112,639 at December 31, 2025 and 2024, respectively $ 724,885 $ 727,995 Customer deposits 387,837 512,580 Deferred tax liabilities 448,493 443,566 Accrued and other liabilities 1,338,330 1,412,166 Financial Services debt 532,338 526,906 Notes payable 1,631,098 1,618,586 Total liabilities 5,062,981 5,241,799 Shareholders’ equity: Common shares, $ 0.01 par value; 500,000,000 shares authorized, 192,724,978 and 202,912,881 shares issued and outstanding at December 31, 2025 and 2024, respectively 1,927 2,029 Additional paid-in capital 3,488,924 3,425,384 Retained earnings 9,494,591 8,694,551 Total shareholders’ equity 12,985,442 12,121,964 $ 18,048,423 $ 17,363,763 See Notes to Consolidated Financial Statements. 41 PULTEGROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 31, 2025, 2024, and 2023 (000’s omitted, except per share data) 2025 2024 2023 Revenues: Homebuilding Home sale revenues $ 16,743,522 $ 17,318,521 $ 15,598,707 Land sale and other revenues 179,764 195,435 142,116 16,923,286 17,513,956 15,740,823 Financial Services 388,667 432,994 320,755 Total revenues 17,311,953 17,946,950 16,061,578 Homebuilding Cost of Revenues: Home sale cost of revenues ( 12,341,421 ) ( 12,311,766 ) ( 11,030,206 ) Land sale and other cost of revenues ( 166,041 ) ( 189,893 ) ( 124,607 ) ( 12,507,462 ) ( 12,501,659 ) ( 11,154,813 ) Financial Services expenses ( 231,887 ) ( 224,086 ) ( 187,280 ) Selling, general, and administrative expenses ( 1,573,928 ) ( 1,321,276 ) ( 1,312,642 ) Equity income from unconsolidated entities, net 4,147 44,201 4,561 Other income (expense), net ( 91,502 ) 61,749 37,863 Income before income taxes 2,911,321 4,005,879 3,449,267 Income tax expense ( 692,591 ) ( 922,617 ) ( 846,895 ) Net income $ 2,218,730 $ 3,083,262 $ 2,602,372 Net income per share: Basic $ 11.21 $ 14.82 $ 11.79 Diluted $ 11.12 $ 14.69 $ 11.72 Cash dividends declared $ 0.92 $ 0.82 $ 0.68 Number of shares used in calculation: Basic 197,966 208,107 219,958 Effect of dilutive securities 1,571 1,722 1,205 Diluted 199,537 209,829 221,163 See Notes to Consolidated Financial Statements. 42 PULTEGROUP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY For the years ended December 31, 2025, 2024, and 2023 (000’s omitted) Common Shares Additional Paid-in Capital Retained Earnings Total Shares $ Shareholders' equity, December 31, 2022 225,840 $ 2,258 $ 3,330,138 $ 5,581,702 $ 8,914,098 Share issuances 511 6 4,835 — 4,841 Dividends declared — — — ( 149,806 ) ( 149,806 ) Share repurchases ( 13,793 ) ( 138 ) — ( 999,862 ) ( 1,000,000 ) Excise tax on share repurchases — — — ( 9,691 ) ( 9,691 ) Cash paid for shares withheld for taxes — — — ( 11,991 ) ( 11,991 ) Share-based compensation — — 33,434 — 33,434 Net income — — — 2,602,372 2,602,372 Shareholders' equity, December 31, 2023 212,558 $ 2,126 $ 3,368,407 $ 7,012,724 $ 10,383,257 Share issuances 422 4 9,288 — 9,292 Dividends declared — — — ( 171,390 ) ( 171,390 ) Share repurchases ( 10,067 ) ( 101 ) — ( 1,199,898 ) ( 1,199,999 ) Excise tax on share repurchases — — — ( 11,550 ) ( 11,550 ) Cash paid for shares withheld for taxes — — — ( 18,597 ) ( 18,597 ) Share-based compensation — — 47,689 — 47,689 Net income — — — 3,083,262 3,083,262 Shareholders' equity, December 31, 2024 202,913 $ 2,029 $ 3,425,384 $ 8,694,551 $ 12,121,964 Share issuances 454 4 8,558 — 8,562 Dividends declared — — — ( 182,979 ) ( 182,979 ) Share repurchases ( 10,642 ) ( 106 ) — ( 1,199,890 ) ( 1,199,996 ) Excise tax on share repurchases — — — ( 11,482 ) ( 11,482 ) Cash paid for shares withheld for taxes — — — ( 24,339 ) ( 24,339 ) Share-based compensation — — 54,982 — 54,982 Net income — — — 2,218,730 2,218,730 Shareholders' equity, December 31, 2025 192,725 $ 1,927 $ 3,488,924 $ 9,494,591 $ 12,985,442 See Notes to Consolidated Financial Statements. 43 PULTEGROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2025, 2024, and 2023 ($000’s omitted) 2025 2024 2023 Cash flows from operating activities: Net income $ 2,218,730 $ 3,083,262 $ 2,602,372 Adjustments to reconcile net income to net cash from operating activities: Deferred income tax expense 10,779 151,097 104,266 Land-related charges 126,914 34,572 43,115 Goodwill impairment 28,553 — — Property and equipment impairments 49,629 — — Depreciation and amortization 112,507 89,162 80,824 Equity income from unconsolidated entities ( 4,147 ) ( 44,201 ) ( 4,561 ) Distributions of earnings from unconsolidated entities 4,222 2,557 4,564 Share-based compensation expense 54,823 54,690 48,200 Other, net 311 ( 13,460 ) ( 1,421 ) Increase (decrease) in cash due to: Inventories ( 213,372 ) ( 787,475 ) ( 354,016 ) Residential mortgage loans available-for-sale 15,917 ( 113,327 ) 160,934 Other assets ( 293,904 ) ( 489,623 ) ( 290,631 ) Accounts payable, accrued and other liabilities ( 239,713 ) ( 286,460 ) ( 196,884 ) Net cash provided by operating activities 1,871,249 1,680,794 2,196,762 Cash flows from investing activities: Capital expenditures ( 122,716 ) ( 118,545 ) ( 92,201 ) Investments in unconsolidated entities ( 15,744 ) ( 16,037 ) ( 23,403 ) Distributions of capital from unconsolidated entities 63,743 9,179 3,265 Other investing activities, net ( 5,707 ) 30,927 ( 16,756 ) Net cash used in investing activities ( 80,424 ) ( 94,476 ) ( 129,095 ) Cash flows from financing activities: Repayments of notes payable ( 24,508 ) ( 355,826 ) ( 123,290 ) Financial Services borrowings (repayments), net 5,432 27,279 ( 87,084 ) Debt issuance costs ( 1,446 ) ( 1,534 ) ( 1,572 ) Proceeds from liabilities related to consolidated inventory not owned 44,095 50,047 129,656 Payments related to consolidated inventory not owned ( 46,733 ) ( 105,787 ) ( 76,303 ) Share repurchases ( 1,199,996 ) ( 1,199,999 ) ( 1,000,000 ) Excise tax on share repurchases ( 11,550 ) ( 9,691 ) — Cash paid for shares withheld for taxes ( 24,339 ) ( 18,597 ) ( 11,991 ) Dividends paid ( 176,684 ) ( 167,707 ) ( 142,459 ) Net cash used in financing activities ( 1,435,729 ) ( 1,781,815 ) ( 1,313,043 ) Net increase (decrease) 355,096 ( 195,497 ) 754,624 Cash, cash equivalents, and restricted cash at beginning of period 1,653,680 1,849,177 1,094,553 Cash, cash equivalents, and restricted cash at end of period $ 2,008,776 $ 1,653,680 $ 1,849,177 Supplemental Cash Flow Information: Interest paid (capitalized), net $ 17,248 $ 26,052 $ 10,786 Income taxes paid, net $ 698,756 $ 739,680 $ 784,453 See Notes to Consolidated Financial Statements. 44 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of significant accounting policies Basis of presentation PulteGroup, Inc. is one of the largest homebuilders in the 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 have mortgage banking operations, conducted principally through Pulte Mortgage LLC (“Pulte Mortgage”), and title and insurance agency operations. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of PulteGroup, Inc. and all of its direct and indirect subsidiaries and variable interest entities in which PulteGroup, Inc. is deemed to be the primary beneficiary. All significant intercompany accounts, transactions, and balances have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 ("SEC"). Cash and equivalents Cash and equivalents include institutional money market investments and time deposits with an original maturity of three months or less. Cash and equivalents at December 31, 2025 and 2024 also included $ 15.4 million and $ 21.3 million, respectively, of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit. Restricted cash We maintain certain cash balances that are restricted as to their use, including customer deposits on home sales that are temporarily restricted by regulatory requirements in certain states until title transfers to the homebuyer. Investments in unconsolidated entities We have investments in a number of unconsolidated entities, including joint ventures, with independent third parties. The equity method of accounting is used for unconsolidated entities over which we have significant influence; generally this represents ownership interests of at least 20% and not more than 50%. Under the equity method of accounting, we recognize our proportionate share of the earnings and losses of these entities. Certain of these entities sell land to us. We defer the recognition of profits from such activities until the time we ultimately sell the related land. We evaluate our investments in unconsolidated entities for recoverability in accordance with ASC 323, “Investments – Equity Method and Joint Ventures”. If we determine that a loss in the value of the investment is other than temporary, we write down the investment to its estimated fair value. Any such losses are recorded to equity in (earnings) loss of unconsolidated entities, which is reflected in other income (expense), net. Due to uncertainties in the estimation process and the significant volatility in demand for new housing, actual results could differ significantly from such estimates. See Note 4 . 45 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Goodwill and goodwill impairment Goodwill, which represents the cost of acquired businesses in excess of the fair value of the net assets of such businesses at the acquisition date, totaled $ 40.4 million and $ 68.9 million at December 31, 2025 and 2024, respectively. We assess goodwill for impairment annually in the fourth quarter and if events or changes in circumstances indicate the carrying amount may not be recoverable. In accordance with ASC 350, management evaluates the recoverability of goodwill by comparing the carrying value of the Company’s reporting units to their fair value. Fair value is determined using accepted valuation methods, including the use of discounted cash flows supplemented by market-based assessments of fair value. In conjunction with our annual impairment test in the fourth quarter of 2025, it was determined that $ 28.6 million of goodwill was not recoverable based on the estimated fair value of the related assets. Other intangible assets Other intangible assets consist primarily of tradenames acquired in connection with acquisitions and totaled $ 26.2 million, net of accumulated amortization of $ 128.4 million, at December 31, 2025, and $ 46.3 million, net of accumulated amortization of $ 108.3 million, at December 31, 2024. Such tradenames are generally being amortized over 20-year lives. Amortization expense totaled $ 20.1 million, $ 10.0 million, and $ 10.5 million in 2025, 2024 and 2023, respectively, and is expected to be $ 5.7 million in 2026, 2027, and 2028, $ 3.9 million in 2029, and $ 0.9 million in 2030. The ultimate realization of these assets is dependent upon the future cash flows and benefits that we expect to generate from their use. We assess intangibles for impairment if events or changes in circumstances indicate the carrying amount may not be recoverable. In 2025, we reassessed the recoverability of certain intangible assets, which resulted in impairments totaling $ 10.8 million . Property and equipment Property and equipment are recorded at cost. Maintenance and repair costs are expensed as incurred. Depreciation is computed by the straight-line method based upon estimated useful lives as follows: office furniture and equipment - 3 to 10 years; leasehold improvements - life of the lease; software and hardware - 3 to 5 years; model park improvements and furnishings - 1 to 5 years. Property and equipment are included in other assets and totaled $ 238.6 million, net of accumulated depreciation of $ 343.5 million, at December 31, 2025 and $ 253.1 million, net of accumulated depreciation of $ 286.8 million, at December 31, 2024. Depreciation expense totaled $ 92.4 million, $ 79.1 million, and $ 70.3 million in 2025, 2024, and 2023, respectively. Advertising costs Advertising costs are expensed to selling, general, and administrative expense as incurred and totaled $ 81.6 million, $ 74.6 million, and $ 57.5 million, in 2025, 2024, and 2023, respectively. Employee benefits We maintain a defined contribution retirement plan that covers substantially all of our employees. Company contributions to the plan totaled $ 33.0 million, $ 31.2 million, and $ 27.8 million in 2025, 2024, and 2023, respectively. 46 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Other income (expense), net Other income (expense), net consists of the following ($000’s omitted): 2025 2024 2023 Write-offs of deposits and pre-acquisition costs (Note 2) $ ( 48,442 ) $ ( 18,266 ) $ ( 23,512 ) Amortization of intangible assets (Note 1) ( 20,093 ) ( 10,034 ) ( 10,538 ) Goodwill impairment ( Note 1 ) ( 28,553 ) — — Property and equipment impairments ( 49,629 ) — — Gain (loss) on debt retirement — ( 222 ) 663 Interest income 44,428 59,486 61,533 Interest expense ( 605 ) ( 479 ) ( 469 ) Miscellaneous, net (a) 11,392 31,264 10,186 Total other income (expense), net (b) $ ( 91,502 ) $ 61,749 $ 37,863 (a) Includes a gain of $ 17.5 million in 2024 related to the sale of a non-homebuilding property. (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. Earnings per share Basic earnings per share is computed by dividing income available to common shareholders (the “Numerator”) by the weighted-average number of common shares, adjusted for unvested shares, (the “Denominator”), for the period. 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. Anti-dilutive shares were immaterial in 2025, 2024, and 2023. In accordance with Accounting Standards Codification ("ASC") 260, "Earnings Per Share", the two-class method determines earnings per share for each class of common stock and participating securities according to an earnings allocation formula that adjusts the Numerator for dividends or dividend equivalents and participation rights in undistributed earnings. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method. A decreasing number of our outstanding restricted share units are considered participating securities such that there was no impact for the years ended December 31, 2025 and 2024. The following table presents a reconciliation of the Numerator used in the earnings per share calculation for the year ended December 31, 2023 ($000's omitted): December 31, 2023 Numerator: Net income $ 2,602,372 Less: earnings distributed to participating securities ( 511 ) Less: undistributed earnings allocated to participating securities ( 8,990 ) Numerator for basic earnings per share $ 2,592,871 Add: undistributed earnings allocated to participating securities 8,990 Less: undistributed earnings reallocated to participating securities ( 8,923 ) Numerator for diluted earnings per share $ 2,592,938 47 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Share-based compensation We measure compensation cost for share-based compensation on the grant date. Fair value for restricted share units is determined based on the quoted price of our common shares on the grant date. We recognize compensation expense for restricted share units, the majority of which cliff vest at the end of three years , ratably over the vesting period. For share-based awards containing performance conditions, we recognize compensation expense ratably over the vesting period when it is probable that the stated performance targets will be achieved and record cumulative adjustments in the period in which estimates change. Compensation expense related to our share-based awards is included in selling, general, and administrative expense, except for a small portion recognized in Financial Services expenses. Forfeitures of share-based awards are recognized as a reduction of expense as incurred. See Note 7 . Income taxes The provision for income taxes is calculated using the asset and liability method, under which deferred tax assets and liabilities are recognized by identifying the temporary differences arising from the different treatment of items for tax and accounting purposes. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is primarily dependent upon the generation of future taxable income. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment is required. Differences between estimated and actual results could result in changes in the valuation of our 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 including the valuation and realization of deferred tax assets and liabilities 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 follow the provisions of ASC 740, "Income Taxes", which prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Significant judgment is required to evaluate uncertain tax positions. Our evaluations of tax positions consider a variety of factors, including relevant facts and circumstances, applicable tax law, correspondence with taxing authorities, and effective settlements of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in income tax expense (benefit) in the period in which the change is made. Interest and penalties related to income taxes and unrecognized tax benefits are recognized as a component of income tax expense (benefit). See Note 8 . 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 at the home closing date. 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 deposit liabilities related to sold but undelivered homes, which totaled $ 387.8 million and $ 512.6 million at December 31, 2025 and 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 11 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. 48 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 82.6 million and $ 91.1 million at December 31, 2025 and 2024, respectively. Sales incentives Sales incentives primarily relate to discounts on the selling price of the home, payment of closing costs, including mortgage interest rate buydowns, or free products or services offered to the customer. Sales incentives are recorded as a reduction of home sale revenues at the home closing date. Inventory and cost of revenues Inventory is stated at cost unless the carrying value is determined to not be recoverable, in which case the affected inventory is written down to fair value. Cost includes land acquisition, land development, and home construction costs, including interest, real estate taxes, and certain direct and indirect overhead costs related to development and construction. For those communities for which construction and development activities have been idled, applicable interest and real estate taxes are expensed as incurred. Land acquisition and development costs are allocated to individual lots using an average lot cost determined based on the total expected land acquisition and development costs and the total expected home closings for the community. The specific identification method is used to accumulate home construction costs. We capitalize interest cost into homebuilding inventories. Each layer of capitalized interest is amortized over a period that approximates the average life of communities under development. Interest expense is allocated over the period based on the timing of home closings. Cost of revenues includes the construction cost, average lot cost, and estimated warranty costs applicable to the home. Sales commissions are classified within selling, general, and administrative expenses. The construction cost of the home includes amounts paid through the closing date of the home, plus an accrual for costs incurred but not yet paid. Total community land acquisition and development costs are based on an analysis of budgeted costs compared with actual costs incurred to date and estimates to complete. The development cycles for our communities range from under one year to in excess of ten years for certain master planned communities. Adjustments to estimated total land acquisition and development costs for the community affect the amounts costed for the community’s remaining lots. We test inventory for impairment when events and circumstances indicate that the undiscounted cash flows estimated to be generated by the community may be less than its carrying amount. Such indicators include gross margins or sales paces significantly below expectations, construction costs or land development costs significantly in excess of budgeted amounts, significant delays or changes in the planned development or strategy for the community, and other known qualitative factors. 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 estimate 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. See Note 2 . Land held for sale 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 held for sale is recorded at the lower of cost or fair value less costs to sell. In determining the fair value of land held for sale, we consider recent offers received, prices for land in recent comparable sales transactions, and other factors. We record net realizable value adjustments for land held for sale within Homebuilding land sale cost of revenues. See Note 2 . Warranty liabilities Homebuyers 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 49 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) limited instances exceeding) 10 years. We estimate the costs to be incurred under these warranties and record a liability in the amount of such costs at the time revenue is recognized (see Note 11 ). Self-insured risks We maintain, and require the majority of our subcontractors to maintain, general liability insurance coverage, including coverage for certain construction defects. We also maintain builders' risk, property, errors and omissions, workers compensation, and other business insurance coverage. These insurance policies protect us against a portion of the risk of loss from claims, subject to certain self-insured per occurrence and aggregate retentions, deductibles, and available policy limits. However, we retain a significant portion of the overall risk for such claims. We reserve for these costs 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, which include estimates of claims incurred but not yet reported. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs. Costs associated with our insurance programs are classified within selling, general, and administrative expenses. In certain instances, we have the ability to recover a portion of our costs under various insurance policies or from our subcontractors or other third parties. Estimates of such amounts are recorded when recovery is considered probable. See Note 11 . Residential mortgage loans available-for-sale Substantially all of the loans originated by us and their related servicing rights are sold in secondary markets within a short period of time after origination, generally within 30 days. In accordance with ASC 825, “Financial Instruments”, we use the fair value option to record residential mortgage loans available-for-sale. Election of the fair value option for these loans allows a better offset of the changes in fair values of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions. We do not designate any derivative instruments as hedges or apply the hedge accounting provisions of ASC 815, “Derivatives and Hedging". See Note 11 for discussion of the risks retained related to mortgage loan originations. Expected gains and losses from the sale of residential mortgage loans and their related servicing rights are included in the measurement of IRLCs that are accounted for at fair value through Financial Services revenues at the time of commitment. Subsequent changes in the fair value of these loans are reflected in Financial Services revenues as they occur. At December 31, 2025 and 2024, residential mortgage loans available-for-sale had an aggregate fair value of $ 613.7 million and $ 629.6 million, respectively, and an aggregate outstanding principal balance of $ 621.6 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 during 2025, 2024, and 2023 were $ 227.9 million, $ 235.1 million, and $ 149.8 million, respectively, and have been included in Financial Services revenues . Mortgage servicing rights We sell the servicing rights for the loans we originate through fixed price servicing sales contracts to reduce the risks and costs inherent in servicing loans. This strategy results in owning the servicing rights for only a short period of time. The servicing sales contracts provide for the reimbursement of payments made by the purchaser if loans prepay within specified periods of time, generally within 90 to 120 days after sale. We establish reserves for this exposure at the time the sale is recorded. Such reserves were immaterial at December 31, 2025 and 2024. Interest income on mortgage loans Interest income on mortgage loans is recorded in Financial Services revenues, accrued from the date a mortgage loan is originated until the loan is sold, and totaled $ 27.9 million, $ 26.8 million, and $ 20.4 million in 2025, 2024, and 2023, respectively. Loans are placed on non-accrual status once they become greater than 90 days past due their contractual terms. Subsequent payments received are applied according to the contractual terms of the loan. Mortgage discounts are not amortized as interest income due to the short period the loans are held until sale to third party investors . Derivative instruments and hedging activities We are party to IRLCs with customers resulting from our mortgage origination operations. At December 31, 2025 and 2024, we had aggregate IRLCs of $ 820.2 million and $ 469.4 million, respectively, which were originated at interest rates prevailing at the date of commitment. Since we can terminate a loan commitment if the borrower does not comply with the terms of the 50 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) contract, and some loan commitments may expire without being drawn upon, these commitments do not necessarily represent future cash requirements. We evaluate the creditworthiness of these transactions through our normal credit policies. 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 December 31, 2025 and 2024, we had unexpired forward contracts of $ 1.3 billion and $ 977.0 million, respectively, and whole loan investor commitments of $ 270.6 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 location in the Consolidated Balance Sheets are summarized below ($000’s omitted): December 31, 2025 December 31, 2024 Other Assets Other Liabilities Other Assets Other Liabilities IRLCs $ 1,459 $ 20,829 $ 1,452 $ 14,946 Forward contracts 3,316 3,407 13,233 1,943 Whole loan commitments 24 85 50 80 $ 4,799 $ 24,321 $ 14,735 $ 16,969 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 December 31, 2025 or 2024. New accounting pronouncements In 2025, we adopted ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which requires expanded disclosure of our income rate reconciliation and income taxes paid. We adopted ASU 2023-09 following the prospective method. Accordingly, prior period disclosures have not been modified. See Note 8 . 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. 51 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 2. Inventory Major components of inventory at December 31, 2025 and 2024 were ($000’s omitted): 2025 2024 Homes under construction $ 5,192,711 $ 5,770,355 Land under development 6,955,016 6,243,745 Raw land 637,936 548,848 Consolidated inventory not owned (a) 120,160 102,865 Land held for sale $ 19,590 $ 27,007 $ 12,925,413 $ 12,692,820 (a) Consolidated inventory not owned includes land sold to third parties for which the Company retains a repurchase option. In all periods presented, we capitalized all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels . Activity related to interest capitalized into inventory is as follows ($000’s omitted): Years Ended December 31, 2025 2024 2023 Interest in inventory, beginning of period $ 139,960 $ 139,078 $ 137,262 Interest capitalized 104,479 112,416 126,040 Interest expensed ( 122,112 ) ( 111,534 ) ( 124,224 ) Interest in inventory, end of period $ 122,327 $ 139,960 $ 139,078 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 (expense), net. See Note 1 . 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 December 31, 2025 or 2024 because we determined that we were not the primary beneficiary. Our maximum exposure to loss related to these VIEs is generally limited to our deposits and pre-acquisition costs under the applicable land option agreements. The following provides a summary of our interests in land option agreements ($000’s omitted): 52 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) December 31, 2025 December 31, 2024 Deposits and Pre-acquisition Costs Remaining Purchase Price Deposits and Pre-acquisition Costs Remaining Purchase Price Land options with VIEs $ 436,258 $ 3,307,698 $ 358,066 $ 3,104,196 Other land options 830,642 6,695,156 700,397 6,127,486 $ 1,266,900 $ 10,002,854 $ 1,058,463 $ 9,231,682 Land-related charges We recorded the following land-related charges ($000's omitted): Statement of Operations Classification 2025 2024 2023 Land impairments Home sale cost of revenues 77,357 11,988 19,603 Net realizable value adjustments ("NRV") - land held for sale Land sale and other cost of revenues $ 1,115 $ 4,318 $ — Write-offs of deposits and pre-acquisition costs Other income (expense), net 48,442 18,266 23,512 Total land-related charges $ 126,914 $ 34,572 $ 43,115 Our evaluations for land-related charges are based on our best estimates of the future cash flows for our communities. Due to uncertainties in the estimation process, the significant volatility in demand for new housing, the long life cycles of certain of our communities, and potential changes in our strategy related to certain communities, actual results could differ significantly from such estimates. As land impairments were not significant in 2025, 2024, or 2023, we have not disclosed certain unobservable inputs and ranges used to determine the fair value of associated communities. 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. Home sale revenues are composed of single-family detached homes, as well as attached homes, such as townhomes, condominiums, and duplexes. 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 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 . 53 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Our Chief Executive Officer ("CEO"), who has been identified as the chief operating decision maker for the purposes of the following reportable segment disclosures, is regularly provided operating results of individual operating segments which comprise our reportable segments. These operating results include key operating metrics which inform the CEO's decisions regarding allocation of resources and assessment of our overall operational performance. These operating results are reviewed against actual and forecasted figures, with income before income taxes being the key operating metric used to measure profit or loss. Operating Data by Segment ($000’s omitted) Years Ended December 31, 2025 2024 2023 Revenues: Northeast $ 1,242,515 $ 1,068,199 $ 969,107 Southeast 2,959,063 2,880,882 2,669,065 Florida 4,264,540 4,706,048 4,650,355 Midwest 2,727,733 2,590,309 2,084,807 Texas 1,675,539 2,140,699 2,040,164 West 3,876,804 3,933,430 3,182,947 Other homebuilding (a) 177,092 194,389 144,378 16,923,286 17,513,956 15,740,823 Financial Services 388,667 432,994 320,755 Consolidated revenues $ 17,311,953 $ 17,946,950 $ 16,061,578 Cost of Revenues Northeast $ ( 840,045 ) $ ( 729,284 ) $ ( 665,616 ) Southeast ( 2,069,322 ) ( 1,948,510 ) ( 1,792,371 ) Florida ( 3,010,191 ) ( 3,153,767 ) ( 3,040,705 ) Midwest ( 1,930,473 ) ( 1,854,693 ) ( 1,521,994 ) Texas ( 1,273,133 ) ( 1,526,930 ) ( 1,434,639 ) West ( 3,115,723 ) ( 3,017,970 ) ( 2,476,076 ) Other homebuilding (b) ( 268,575 ) ( 270,505 ) ( 223,412 ) ( 12,507,462 ) ( 12,501,659 ) ( 11,154,813 ) SG&A: Northeast $ ( 102,160 ) $ ( 94,925 ) $ ( 85,666 ) Southeast ( 295,164 ) ( 287,274 ) ( 255,327 ) Florida ( 401,278 ) ( 427,392 ) ( 396,978 ) Midwest ( 246,908 ) ( 236,195 ) ( 196,159 ) Texas ( 221,400 ) ( 257,490 ) ( 224,434 ) West ( 343,738 ) ( 341,613 ) ( 284,392 ) Other homebuilding (c) 36,720 323,613 130,314 ( 1,573,928 ) ( 1,321,276 ) ( 1,312,642 ) 54 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Operating Data by Segment ($000’s omitted) Years Ended December 31, 2025 2024 2023 Other Segment Items (d) : Northeast $ ( 6,443 ) $ ( 13,994 ) $ ( 7,317 ) Southeast ( 34,097 ) ( 13,571 ) ( 17,524 ) Florida ( 31,425 ) ( 3,578 ) ( 19,191 ) Midwest ( 11,291 ) ( 9,236 ) ( 12,688 ) Texas ( 18,827 ) ( 10,685 ) ( 9,189 ) West ( 38,346 ) ( 21,008 ) ( 42,486 ) Other homebuilding (e) 51,824 176,975 151,102 ( 88,605 ) 104,903 42,707 Financial Services ( 230,637 ) ( 223,039 ) ( 187,563 ) $ ( 319,242 ) $ ( 118,136 ) $ ( 144,856 ) Income (loss) before income taxes (e) : Northeast $ 293,867 $ 229,996 $ 210,508 Southeast 560,480 631,527 603,843 Florida 821,646 1,121,311 1,193,481 Midwest 539,061 490,185 353,966 Texas 162,179 345,594 371,902 West 378,997 552,839 379,993 Other homebuilding ( 2,939 ) 424,472 202,382 2,753,291 3,795,924 3,316,075 Financial Services 158,030 209,955 133,192 Consolidated income before income taxes $ 2,911,321 $ 4,005,879 $ 3,449,267 (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 $ 42.3 million, $ 333.9 million, and $ 130.8 million in 2025, 2024 and 2023, respectively (see Note 11 ). 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, impairment of intangible assets, and other items not allocated to the operating segments. Also includes 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. 55 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Operating Data by Segment ($000's omitted) Years Ended December 31, 2025 2024 2023 Land-related charges (a) : Northeast $ 1,779 $ 8,142 $ 497 Southeast 20,216 4,006 7,853 Florida 11,743 2,804 2,683 Midwest 4,905 1,598 7,786 Texas 24,967 9,643 3,661 West 59,259 7,412 19,343 Other homebuilding 4,045 967 1,292 $ 126,914 $ 34,572 $ 43,115 (a) Land-related charges include land impairments, NRV adjustments for land held for sale, and write-offs of deposits and pre-acquisition costs for land option contracts we elected not to pursue. See Note 2 for additional discussion of these charges. Operating Data by Segment ($000's omitted) Years Ended December 31, 2025 2024 2023 Depreciation and amortization: Northeast $ 3,409 $ 2,882 $ 3,365 Southeast 10,809 6,940 6,056 Florida 19,063 15,623 13,471 Midwest 9,150 8,229 8,207 Texas 7,961 6,911 6,214 West 27,025 15,482 12,438 Other homebuilding 24,942 23,997 22,992 102,359 80,064 72,743 Financial Services 10,148 9,098 8,081 $ 112,507 $ 89,162 $ 80,824 56 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Operating Data by Segment ($000's omitted) December 31, 2025 2024 Total Inventory Total Assets Total Inventory Total Assets Northeast $ 735,538 $ 830,114 $ 716,530 $ 807,922 Southeast 2,224,780 2,646,216 2,006,958 2,298,692 Florida 3,204,259 3,664,325 3,246,588 3,676,910 Midwest 1,406,118 1,560,397 1,401,747 1,529,602 Texas 1,545,253 1,829,532 1,645,213 1,905,394 West 3,720,564 4,224,604 3,684,393 4,212,636 Other homebuilding (a) 88,901 2,400,496 ( 8,609 ) 1,934,728 12,925,413 17,155,684 12,692,820 16,365,884 Financial Services — 892,739 — 997,879 $ 12,925,413 $ 18,048,423 $ 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 and land held for sale allocated to the operating segments. Other homebuilding also includes goodwill of $ 40.4 million, net of cumulative impairment charges of $ 48.7 million at December 31, 2025, and goodwill of $ 68.9 million , net of cumulative impairment charges of $ 20.2 million at December 31, 2024. 4. Investments in unconsolidated entities We participate in a number of joint ventures and other investments with independent third parties. These entities generally purchase, develop, and sell land, including selling land to us for use in our Homebuilding operations. Our investments in such entities totaled $ 167.3 million and $ 215.4 million at December 31, 2025 and 2024, respectively. In 2025, 2024, and 2023, we recognized earnings from unconsolidated joint ventures of $ 4.1 million, $ 44.2 million, and $ 4.6 million, respectively. We received distributions of capital from our unconsolidated joint ventures of $ 63.7 million, $ 9.2 million, and $ 3.3 million in 2025, 2024, and 2023, respectively. We made capital contributions to our unconsolidated joint ventures of $ 15.7 million, $ 16.0 million, and $ 23.4 million in 2025, 2024, and 2023, respectively. At December 31, 2025, aggregate outstanding debt of unconsolidated joint ventures was $ 43.9 million. The timing of cash flows related to a joint venture and any related financing agreements varies by agreement. If additional capital contributions are required and approved by the joint venture, we would need to contribute our pro rata portion of those capital needs in order to not dilute our ownership in the joint ventures. While future capital contributions may be required, we believe the total amount of such contributions will be limited. Our maximum financial exposure related to joint ventures is unlikely to exceed the combined investment and limited recourse guaranty totals. 57 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Debt Our notes payable are summarized as follows ($000’s omitted): December 31, 2025 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) ( 5,231 ) ( 6,324 ) Total senior notes $ 1,583,913 $ 1,582,820 Other notes payable 47,185 35,766 Notes payable $ 1,631,098 $ 1,618,586 Estimated fair value $ 1,755,396 $ 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 . The indentures governing the senior notes impose certain restrictions on the incurrence of additional debt along with other limitations. At December 31, 2025, we were in compliance with all of the covenants and requirements under the senior notes. We retired outstanding debt totaling $ 355.8 million and $ 123.3 million during 2024 and 2023, respectively. The retirements in 2024 included open market repurchases of $ 193.4 million and $ 106.6 million of our unsecured senior notes scheduled to mature in 2026 and 2027, respectively. 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 collateralized notes with third parties that totaled $ 47.2 million and $ 35.8 million at December 31, 2025 and 2024, respectively. 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 any other assets. The stated interest rates on these notes range up to 9 %. We recorded inventory through seller financing of $ 70.9 million, $ 54.9 million, and $ 46.7 million in 2025, 2024, and 2023, respectively. Revolving credit facility 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 our Revolving Credit Facility to (i) extend the maturity to February 4, 2031, (ii) increase total committed capacity to $ 1.75 billion, and (iii) expand the uncommitted accordion feature to $ 750.0 million, providing for potential capacity of up to $ 2.5 billion, subject to 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. 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). As of December 31, 2025, we were in compliance with all covenants and requirements. Outstanding amounts and other obligations under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries. 58 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. 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. Financial Services debt Pulte Mortgage maintains a master repurchase agreement with third-party lenders entered into in August 2023 (the "Original Repurchase Agreement", and as amended, the "Repurchase Agreement") that matures on August 12, 2026. 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. 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. 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 Original Repurchase Agreement, as amended, replaced by the Repurchase Agreement. Pulte Mortgage was in compliance with all of its covenants and requirements as of such dates. 6. Shareholders’ equity We declared quarterly cash dividends totaling $ 183.0 million, $ 171.4 million, and $ 149.8 million in 2025, 2024, and 2023, respectively. Under a share repurchase program authorized by our Board of Directors, we repurchased 10.6 million, 10.1 million, and 13.8 million shares in 2025, 2024, and 2023, respectively, for a total of $ 1.2 billion, $ 1.2 billion, and $ 1.0 billion in 2025, 2024, and 2023, respectively. 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. Under our stock compensation plans, we accept shares as payment under certain conditions related to vesting of restricted shares and share units, generally related to the payment of tax obligations. During 2025, 2024, and 2023, employees surrendered shares valued at $ 24.3 million, $ 18.6 million, and $ 12.0 million, respectively, under these plans. Such share transactions are excluded from the above noted share repurchase authorization. 7. Stock compensation plans We maintain a stock award plan for both employees and non-employee directors. The plan provides for the grant of a variety of equity awards, including time-based and performance-based restricted share units ("RSUs") to key employees for periods not to exceed ten years . Non-employee directors are awarded an annual distribution of common shares. RSUs represent the right to receive an equal number of common shares and are converted into common shares upon distribution. Time-based RSUs generally cliff vest after three years , and RSU holders earn cash or accrued dividends during the vesting period. Performance-based RSUs vest upon attainment of the stated performance targets and minimum service requirements and are converted into common shares upon distribution. As of December 31, 2025, there were 9.9 million shares that remained available for grant under the plan. Our stock compensation expense is presented below ($000's omitted): 2025 2024 2023 RSUs $ 33,388 $ 31,821 $ 28,112 Other long-term incentive plans 21,435 22,869 20,088 $ 54,823 $ 54,690 $ 48,200 59 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) RSUs A summary of RSUs is presented below (000’s omitted, except per share data): 2025 2024 2023 Shares Weighted- Average Per Share Grant Date Fair Value Shares Weighted- Average Per Share Grant Date Fair Value Shares Weighted- Average Per Share Grant Date Fair Value Outstanding, beginning of year 1,431 $ 67 1,659 $ 54 1,628 $ 48 Granted 317 111 307 107 714 59 Distributed ( 573 ) 55 ( 496 ) 46 ( 550 ) 44 Forfeited ( 40 ) 90 ( 39 ) 66 ( 133 ) 52 Outstanding, end of year 1,135 $ 85 1,431 $ 67 1,659 $ 54 During 2025, 2024, and 2023, the total fair value of shares vested during the year was $ 66.2 million, $ 52.6 million, and $ 33.8 million, respectively. Unamortized compensation cost related to share awards was $ 29.3 million at December 31, 2025. These costs will be expensed over a weighted-average period of approximately two years . Additionally, there were 0.2 million deferred shares at December 31, 2025, that had vested but had not yet been paid out because the payout date had been deferred by the holders. Other long-term incentive plans We maintain long-term incentive plans for senior management and other employees that provide awards based on the achievement of stated performance targets over three-year periods. Awards are denominated in either restricted stock units or dollars that are settled in common shares based on the stock price at the end of the performance period. We recognize the expense associated with the awards based on the probability of achieving the stated performance targets at each reporting period. 8. Income taxes Components of current and deferred income tax expense (benefit) are as follows ($000’s omitted): 2025 2024 2023 Current expense Federal $ 560,980 $ 649,308 $ 622,205 State and other 120,832 122,212 120,424 $ 681,812 $ 771,520 $ 742,629 Deferred expense Federal $ 4,677 $ 120,415 $ 72,854 State and other 6,102 30,682 31,412 $ 10,779 $ 151,097 $ 104,266 Income tax expense $ 692,591 $ 922,617 $ 846,895 60 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table reconciles the statutory federal income tax rate to the effective income tax rate ($000's omitted, expect percentages): 2025 2024 2023 Amount Percent Percent Percent Income taxes at federal statutory rate $ 611,377 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal tax (a) 101,631 3.5 3.6 3.5 Domestic federal reconciling items Federal tax credits ( 23,001 ) ( 0.8 ) ( 1.1 ) ( 0.2 ) Other 2,584 0.1 ( 0.5 ) 0.3 Effective rate $ 692,591 23.8 % 23.0 % 24.6 % (a) State taxes in Florida, California, and Illinois comprised the majority (greater than 50 percent) of the tax effect in this category in 2025. The effective tax rates differ from the federal statutory rate primarily due to state income tax expense and benefits associated with various federal energy tax credits. The following table presents our income taxes paid, net of any refunds, by jurisdiction ($000's omitted): 2025 US federal (a) $ 570,413 State and local Florida 46,543 Other 81,800 Total $ 698,756 (a) Includes cash payments of $ 341.4 million to acquire transferable tax credits, which were applied to our federal income tax obligations. Deferred tax assets and liabilities reflect temporary differences arising from the different treatment of items for tax and accounting purposes. Components of our net deferred tax liability are as follows ($000’s omitted): At December 31, 2025 2024 Deferred tax assets: Accrued insurance $ 92,004 $ 92,283 Inventory valuation reserves 49,564 51,370 Capitalized inventory expenses 42,325 43,338 State NOL carryforwards 67,511 73,550 Other 78,408 66,055 329,812 326,596 Deferred tax liabilities: Deferred income ( 637,003 ) ( 630,888 ) Fixed assets and intangibles ( 26,089 ) ( 21,882 ) Other ( 44,639 ) ( 39,983 ) ( 707,731 ) ( 692,753 ) Valuation allowance ( 21,417 ) ( 22,368 ) Net deferred tax liability $ ( 399,336 ) $ ( 388,525 ) 61 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) We have state NOLs in various jurisdictions that may generally be carried forward up to 20 years, depending on the jurisdiction. Our state NOL carryforward deferred tax assets will expire if unused at various dates as follows: $ 27.5 million from 2026 to 2030 and $ 40.0 million from 2031 and thereafter. We evaluate our deferred tax assets each period to determine if a valuation allowance is required based on whether it is "more likely than not" that some portion of the deferred tax assets would not be realized. The ultimate realization of these deferred tax assets is dependent upon the generation of sufficient taxable income during future periods. We conduct our evaluation by considering all available positive and negative evidence, including, among other factors, historical operating results, forecasts of future profitability, the duration of statutory carryforward periods, and the outlooks for the U.S. housing industry and broader economy. 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 our 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 $ 29.9 million and $ 38.7 million of gross unrecognized tax benefits at December 31, 2025 and 2024, respectively. If recognized, $ 23.6 million and $ 30.6 million, respectively, of these amounts would impact our effective tax rate. Additionally, we had accrued interest and penalties of $ 0.6 million and $ 1.9 million at December 31, 2025 and 2024, respectively. We do not expect the total amount of gross unrecognized tax benefits to increase or decrease by a material amount within the next twelve months. A reconciliation of the change in the unrecognized tax benefits is as follows ($000’s omitted): 2025 2024 2023 Unrecognized tax benefits, beginning of period $ 38,715 $ 58,228 $ 23,612 Increases related to positions taken during a prior period — 544 34,687 Decreases related to positions taken during a prior period — ( 17,992 ) — Increases related to positions taken during the current period — — — Decreases related to settlements with taxing authorities ( 5,552 ) ( 1,994 ) — Decreases related to lapse of the applicable statute of limitations ( 3,248 ) ( 71 ) ( 71 ) Unrecognized tax benefits, end of period $ 29,915 $ 38,715 $ 58,228 We continue to participate in the Compliance Assurance Process (“CAP”) with the IRS as an alternative to the traditional IRS examination process. Through the CAP program, we work with the IRS to achieve tax compliance by resolving issues prior to filing the tax return. We are also currently under examination by state taxing jurisdictions and anticipate finalizing certain of the examinations within the next twelve months. The outcome of these examinations is not yet determinable, and we are not aware of unrecorded liabilities. The statute of limitations for our major tax jurisdictions generally remains open for examination for tax years 2021 to 2025. We are under contract to purchase federal transferable tax credits that we expect to use to offset future federal income tax obligations totaling $ 354.1 million. The timing of such purchases is intended to approximate the timing of our expected federal income tax obligations. 9. Fair value disclosures ASC 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: 62 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 December 31, 2025 December 31, 2024 Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 613,665 $ 629,582 IRLCs Level 2 ( 19,370 ) ( 13,494 ) Forward contracts Level 2 ( 91 ) 11,290 Whole loan commitments Level 2 ( 61 ) ( 30 ) Measured at fair value on a non-recurring basis: House and land inventory Level 3 $ 55,119 $ 20,016 Disclosed at fair value: Cash and equivalents (including restricted cash) Level 1 $ 2,008,776 $ 1,653,680 Financial Services debt Level 2 532,338 526,906 Senior notes payable Level 2 1,708,211 1,665,504 Other notes payable Level 2 47,185 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. 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. See Note 1 for a more detailed discussion of these derivative instruments. Certain assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. The non-recurring fair values included in the above table represent only those assets whose carrying values were adjusted to fair value during the quarterly period ended as of the respective balance sheet dates. See Note 1 for a more detailed discussion of the valuation methods used for inventory. The carrying amounts of cash and equivalents, Financial Services debt, Other notes payable and the Revolving Credit Facility approximate their fair values due to their short-term nature and floating interest rate terms. The fair values of the Senior notes payable 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 the senior notes payable was $ 1.6 billion at both December 31, 2025 and December 31, 2024. 63 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 10. Other assets and accrued and other liabilities Other assets are presented below ($000’s omitted): December 31, 2025 2024 Accounts and notes receivable 252,308 248,308 Deposits and pre-acquisition costs (Note 1) 1,266,900 1,058,463 Prepaid expenses 287,802 283,815 Property and equipment, net (Note 1) 238,614 253,097 Right-of-use assets ( Note 11 ) 109,704 93,895 Income taxes receivable 13,545 11,733 Other 48,610 52,680 $ 2,217,483 $ 2,001,991 We record receivables from various parties in the normal course of business, including amounts due from insurance companies ( Note 11 ) and municipalities. In certain instances, we may accept consideration for land sales or other transactions in the form of a note receivable. Accrued and other liabilities are presented below ($000’s omitted): December 31, 2025 2024 Self-insurance liabilities (Note 11) $ 259,410 $ 267,474 Compensation-related liabilities 211,886 283,255 Land development and construction liabilities 157,987 158,957 Liabilities related to consolidated inventory not owned ( Note 2 ) 120,160 102,865 Warranty liabilities (Note 11) 128,717 130,538 Lease liabilities ( Note 11 ) 133,243 109,021 Income tax liabilities 60,843 76,002 Dividends payable 53,566 47,442 Accrued interest 26,425 29,095 Other (a) 186,093 207,517 $ 1,338,330 $ 1,412,166 (a) Other liabilities primarily include liabilities associated with property taxes, derivative instruments related to mortgage operations, and other miscellaneous liabilities. 11. 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 $ 357.1 million and $ 3.1 billion, respectively, at December 31, 2025, and $ 321.1 million and $ 2.9 billion, respectively, at December 31, 2024. In the event any such letter of credit or surety bonds is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn. 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 the applicable projects but has not yet received final acceptance by the 64 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed. Litigation and regulatory matters We are involved in 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 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, there may exist an exposure to loss in excess of any amounts currently accrued. 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 Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost of claims. 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 in warranty liabilities were as follows ($000’s omitted): 2025 2024 2023 Warranty liabilities, beginning of period $ 130,538 $ 120,393 $ 108,348 Reserves provided 85,866 110,344 107,522 Payments ( 101,992 ) ( 106,661 ) ( 99,613 ) Other adjustments 14,305 6,462 4,136 Warranty liabilities, end of period $ 128,717 $ 130,538 $ 120,393 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 65 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 $ 259.4 million and $ 267.5 million at December 31, 2025 and 2024, respectively, the vast majority of which relate to general liability claims. 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 74 % and 68 % of the total general liability reserves at December 31, 2025 and 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. Adjustments to reserves are recorded in the period in which the change in estimate occurs. During 2025, 2024, and 2023, we reduced reserves, primarily general liability reserves, by $ 42.3 million, $ 333.9 million, and $ 130.8 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. There were no material adjustments to individual claims. Rather, the adjustments reflect an overall lower level of claims and related losses in recent years as compared with our previous experience. We attribute the favorable experience in more recent years to a variety of factors, including improved construction techniques, higher home values, and increased participation from our subcontractors in resolving claims. The cumulative effect of these factors, as evidenced by the favorable claims experience for an extended period, resulted in our actuarial estimates placing less weight on older, higher cost policy years and relatively more weight on our more recent, lower cost policy years, which is the primary driver of the change in actuarial estimate in 2024. Costs associated with our insurance programs are classified within selling, general, and administrative expenses. Changes in these liabilities were as follows ($000's omitted): 2025 2024 2023 Balance, beginning of period $ 267,474 $ 563,103 $ 635,857 Reserves provided 51,143 83,340 92,399 Adjustments to previously recorded reserves ( 42,298 ) ( 333,853 ) ( 130,841 ) Payments, net (a) ( 16,909 ) ( 45,116 ) ( 34,312 ) Balance, end of period $ 259,410 $ 267,474 $ 563,103 (a) Includes net changes in amounts expected to be recovered from our insurance carriers, which are recorded in other assets (see below). 66 PULTEGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Estimates of anticipated recoveries of our costs under various insurance policies or from subcontractors or other third parties are recorded when recovery is considered probable. Recoveries relate to costs incurred or to be incurred to perform corrective repairs, settle claims, and other costs related to both known and anticipated future construction defect claims that we believe to be insured related to previously closed homes. Given the complexity inherent with resolving construction defect claims in the homebuilding industry, there generally exists a significant lag between our payment of claims and our recoveries from applicable insurance carriers or third parties. 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 $ 109.7 million and $ 133.2 million, respectively, at December 31, 2025, and $ 93.9 million and $ 109.0 million, respectively, at December 31, 2024. We recorded an additional $ 43.2 million and $ 37.2 million of lease liabilities under operating leases during 2025 and 2024, respectively. Payments on lease liabilities during 2025, 2024, and 2023 totaled $ 23.4 million, $ 23.1 million, and $ 23.4 million respectively. 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. Our total lease expense was $ 59.8 million, $ 66.2 million, and $ 56.4 million during 2025, 2024, and 2023, respectively. Our total lease expense in 2025, 2024, and 2023 is inclusive of variable lease costs of $ 9.2 million, $ 12.9 million, and $ 11.8 million respectively, and short-term lease costs of $ 22.7 million, $ 24.1 million, and $ 17.3 million, respectively. Sublease income was de minimis. The future minimum lease payments required under our leases as of December 31, 2025 were as follows ($000's omitted): Years Ending December 31, 2026 $ 26,776 2027 28,440 2028 26,241 2029 22,353 2030 18,086 Thereafter 31,459 Total lease payments (a) 153,355 Less: Interest (b) ( 20,112 ) Present value of lease liabilities (c) $ 133,243 (a) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $ 6.5 million of legally binding minimum lease payments for leases signed but not yet commenced at December 31, 2025. (b) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (c) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 5.8 years and 4.6 %, respectively, at December 31, 2025. 67 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of PulteGroup, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PulteGroup, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 4, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates. 68 Self-insured Risks Description of the Matter The Company’s reserves for self-insured risks totaled $259.4 million at December 31, 2025, of which the majority relates to incurred but not reported (IBNR) losses associated with exposures to construction defects on previously closed homes. As discussed in Notes 1 and 11 of the consolidated financial statements, the Company reserves for costs associated with construction defect claims (including IBNR losses and expected claims management expense) based on actuarial analyses of the Company’s historical claims activity. The actuarial analyses that determine the IBNR reserves consider a variety of factors, which principally include the frequency and severity of losses. Auditing the Company’s IBNR reserve for construction defects is complex due to the significant measurement uncertainty associated with the estimate, the use of various actuarial methods, and management’s application of significant judgment. In addition, the reserve estimate is sensitive to significant assumptions, including the frequency and severity assumptions used in the computation of the IBNR reserve. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls that address the risks of material misstatement relating to the measurement and valuation of the IBNR reserve. For example, we tested controls over management’s review of the significant actuarial assumptions and the data inputs used by management when estimating IBNR losses. To test the IBNR reserve associated with construction defects exposures, our audit procedures included, among others, testing the completeness and accuracy of the underlying claims data used in the actuarial analyses. Furthermore, we involved our actuarial specialists to assist in our assessment of the methodologies used by management to estimate the IBNR reserve. We compared the Company's self-insurance reserve (inclusive of the IBNR estimate) to a range developed by our actuarial specialists based on independently selected assumptions. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1973. Atlanta, Georgia February 4, 2026 69 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE This Item is not applicable.