About PulteGroup

PulteGroup, Inc. operates as a homebuilder in the United States (‘U.S.’). While the company’s subsidiaries engage primarily in the homebuilding business, the company also has financial services businesses, which include mortgage banking, title, and insurance agency operations, through Pulte Mortgage LLC (‘Pulte Mortgage’) and other subsidiaries. Homebuilding Operations Homebuilding, the company’s core business, involves the acquisition and development of land primarily for residential purposes within the U.S. and the construction of housing on such land. The company’s Homebuilding operations are geographically diverse within the U.S. During 2023, the company operated out of an average of 906 active communities in 46 markets across 26 states. The company offers a broad product line to meet the needs of homebuyers in its targeted markets. Through the company’s brands, which include Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West, the company offers a wide variety of home designs with varying levels of options and amenities to the company’s major customer groups: first-time, move-up, and active adult. During 2023, the company delivered closings totaling 28,603 homes. The company predominantly sells single-family detached homes, which represented 83% of the company’s home closings in 2023. The remaining units consist of attached homes, such as townhomes, condominiums, and duplexes. Land Acquisition and Development The company acquires land primarily for the construction of homes for sale. The company selects locations for the development of homebuilding communities after completing a feasibility study, which includes, among other things, soil tests, independent environmental studies and other engineering work, an evaluation of necessary zoning and other governmental entitlements, and extensive market research that enables the company to match the location with the company’s product offering to meet the needs of consumers. The company frequently manages a portion of the risk of controlling its land positions through the use of land option agreements, which enable the company to defer acquiring portions of properties owned by land sellers until the company has determined whether and when to exercise the company’s option. The company’s use of land option agreements can serve to enhance the company’s expected returns on its land investments and reduce the financial risk associated with long-term land holdings. The company typically acquires land with the intent to complete sales of housing units within 24 to 36 months from the date of opening a community, except in the case of certain Del Webb active adult developments and other large master-planned projects for which the completion of community build-out requires a longer time period. While the company’s overall supply of controlled land is in excess of the company’s short-term needs in certain of its markets, some of the company’s controlled land consists of long-term positions that will not be converted to home sales in the near term. Accordingly, the company remains active in its pursuit of new land investment. The company also periodically sells select parcels of land to third parties for commercial or other development or if the company determines that such parcels no longer fit into the company’s strategic operating plans. Where the company develops land, it engages directly in many phases of the development process, including: land and site planning; obtaining environmental and other regulatory approvals; and constructing roads, sewers, water and drainage facilities, and community amenities, such as parks, pools, and clubhouses. The company uses its staff and the services of independent engineers and consultants for land development activities. Land development work is performed primarily by independent contractors and, when needed, local government authorities who construct roads and sewer and water systems in some areas. As of December 31, 2023, the company controlled 222,630 lots, of which 104,515 were owned and 118,115 were under land option agreements. Sales and Marketing The company’s homes targeted to first-time homebuyers tend to be smaller with product offerings geared toward higher density and lower average selling prices relative to the local market. Through the company’s Del Webb brand, the company addresses the needs of active adults. Many of these active adult communities are age-restricted to homebuyers aged fifty-five and over and are highly amenitized, offering a variety of features, including athletic facilities, recreational centers, and educational classes, to facilitate the homebuyer maintaining an active lifestyle.In order to make the cost of these highly amenitized communities affordable to the individual homeowner, Del Webb communities tend to be larger than first-time or move-up homebuyer communities. During 2023, 39% of the company’s home closings were to first-time, move-up, and active adult customers, which reflects a small increase toward first-time buyers since 2022 consistent with the company’s continued investment in serving first-time buyers. The company is an innovator in home design. The company views its design capabilities as an integral aspect of its marketing strategy. The company’s in-house architectural services teams, supplemented by outside consultants, follow a disciplined product development process to introduce new features and technologies based on customer-validated data. The company typically offers a variety of house floor plans and elevations in each community, including potential options and upgrades, such as different flooring, countertop, fixture, and appliance choices. The company designs its base house and option packages to meet the needs of its customers as defined through rigorous market research. The company markets its homes to prospective homebuyers through internet listings and link placements, social media, mobile applications, media advertising, illustrated brochures, and other advertising displays. The company has made significant enhancements in its tools and business practices to adapt the company’s selling efforts to tech-enabled customers. This includes the company’s websites (www.pulte.com, www.centex.com, www.delwebb.com, www.divosta.com, www.jwhomes.com, and www.americanwesthomes.com), which provide tools to help users find a home that meets their needs, investigate financing alternatives, maintain a home, learn more about the company, and communicate directly with the company. The company’s sales teams primarily consist of commissioned employees, and the majority of the company’s home closings also involve independent third party sales brokers. The company’s sales consultants are responsible for guiding the customer through the sales process, including selecting the community, house floor plan, and options that meet the customer's needs. The company is committed to industry-leading customer service through a variety of quality initiatives, including the company’s customer care program, which seeks to ensure that homebuyers are engaged and satisfied at every stage of the process. Fully furnished and landscaped model homes physically located in the company’s communities, which leverage the expertise of the company’s interior designers, are generally used to showcase the company’s homes and their distinctive design features. The company has also introduced virtual reality walkthroughs of its house floor plans in certain communities to provide prospective homebuyers with a means to provide a realistic vision of the company’s homes. Construction The construction of the company’s homes is conducted under the supervision of its on-site construction field managers. Substantially all of the company’s construction work is performed by independent subcontractors under contracts that establish a specific scope of work at an agreed-upon price. Using a selective process, the company has aligned with premier subcontractors and suppliers to deliver quality throughout all aspects of the house construction process. In addition, the company’s construction field managers and customer care associates interact with the company’s homebuyers throughout the construction process and instruct homebuyers on post-closing home maintenance. Continuous improvement in the company’s house construction process is a key area of focus. The company maintains high quality product offerings and production processes through the following programs: Common management of house plans to deliver house designs that customers value the most and that can be built at the highest quality; Value engineering the company’s house plans to optimize house designs in terms of material content and ease of construction while still providing a clear value to the customer; Utilizing the company’s proprietary construction standards and practices, training of the company’s field leadership and construction personnel, communication with the company’s suppliers, and auditing the company’s compliance through the use of both internal and third party construction experts; and Working with the company’s suppliers using a data driven, collaborative method. Seasonality The company generally experiences increases in revenues and cash flow from operations during the fourth quarter (year ended December 2023) based on the timing of home closings. This seasonal activity increases the company’s working capital requirements in its third and fourth quarters to support the company’s home production and loan origination volumes. Financial Services Operations The company conducts its financial services business, which includes mortgage banking, title, and insurance agency operations, through Pulte Mortgage and other subsidiaries. Pulte Mortgage arranges financing through the origination of mortgage loans primarily for the benefit of the company’s homebuyers. The company is a lender approved by the Federal Housing Administration (‘FHA’) and Department of Veterans Affairs (‘VA’); and is a seller/servicer approved by Government National Mortgage Association (‘Ginnie Mae’), Federal National Mortgage Association (‘Fannie Mae’), Federal Home Loan Mortgage Corporation (‘Freddie Mac’), and other investors. In the company’s conventional mortgage lending activities, the company follows underwriting guidelines established by Fannie Mae, Freddie Mac, and private investors. The company’s customers’ use of its in-house mortgage and title operations provides the company with a competitive advantage by enabling more control over the quality of the overall home buying process for the company’s customers, while also helping the company align the timing of the house construction process with the company’s customers’ financing needs. Operating through a captive business model targeted to supporting the company’s Homebuilding operations, the business levels of the company’s Financial Services operations are highly correlated to Homebuilding. The company’s Homebuilding customers continue to account for substantially all of the company’s loan production. The company originated the mortgage loans for 61% of the homes the company closed in 2023. Other home closings are settled via either cash or third party lenders. In originating mortgage loans, the company initially uses its own funds, including funds available pursuant to credit agreements with third parties, and subsequently sells such mortgage loans to third party investors in the secondary market. Substantially all of the loans the company originates are sold in the secondary market within a short period of time after origination, generally within 30 days. The company also sells the servicing rights for the loans the company originates through fixed-price-servicing sales contracts to reduce the risks and costs inherent in servicing loans. This strategy results in owning the loans and related servicing rights for only a short period of time. The company utilizes a centralized fulfillment center for its mortgage operations that performs underwriting, processing, and closing functions. In originating and servicing mortgage loans, the company is subject to the rules and regulations of the government-sponsored investors and other investors that purchase the loans the company originates, as well as to those of other government agencies that have oversight of the government-sponsored investors or consumer lending rules in the U.S. In addition to being affected by changes in these programs, the company’s mortgage banking business is also affected by many of the same factors that impact the company’s homebuilding business. The company’s subsidiary title insurance companies serve as title insurance agents and underwriters in select markets by providing title insurance policies and examination and closing services to buyers of homes the company sells. The company’s insurance agency operations serve as an agency for home, auto, and other personal insurance policies in select markets to buyers of homes the company sells. All such insurance policies are placed with third party insurance carriers. History PulteGroup, Inc., a Michigan corporation, was founded in 1950. The company was incorporated in 2013.