AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Financing capacity and land options provide current flexibility, but comparative cost superiority is asserted rather than demonstrated. Robust land competition and incentive-dependent demand make the structural advantage fragile.
durability · 1/4 · Long-dated financing and option contracts support continuity, but do not establish persistent economic protection. Realized pricing concessions, land-cost pressure and land-related charges show vulnerabilities already operating.
customer dependency · 1/4 · Orders exhibit some persistence, but cancellations and demand supported by discounts suggest weak customer dependency. This is an indirect assessment from transaction behavior; amenities do not demonstrate switching friction or repeat demand.
erosion resilience · 2/4 · Lower speculative inventory, improving cycle times, available credit and sequential margin improvement demonstrate adaptation. Year-over-year margin erosion and ongoing concessions show only partial protection.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · 2025 average selling-price growth primarily reflected product and geographic mix and was offset by higher incentives. Further 2026 pricing actions increased orders while lowering selling prices, demonstrating weak realized pricing power.
retention · 2/4 · Second-quarter cancellations improved to 13% from 15%, and first-half cancellations improved to 13% from 14%. This supports mixed order persistence, assessed indirectly rather than as repeat-purchase retention; order growth also required concessions.
margin resilience · 2/4 · Gross margin remained positive and improved sequentially to 25.0%, but declined from 27.0% a year earlier following 2025 erosion. Inventory and cycle-time adjustments provide partial resilience against demonstrated pricing and land-cost pressure.
contractual freedom · 2/4 · Implemented price changes, closing-cost incentives and mortgage buydowns demonstrate discretion over new sales terms. Affordability pressure constrains its economic value, while rights to reprice already contracted homes are not disclosed.
Predictability85
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 8.43
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.25
Financial strength—
Missing required inputs: interestCoverageGrade, currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- Debt / FCF (x)
- 0.03
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -5.56
- 3-year average SBC / revenue (%)
- 0.31
- cashConversionGrade
- 68.51
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · 2025 cash generation funded business investment and distributions while preserving cash. Option exits and lower-rate refinancing demonstrate active capital management. However, first-half 2026 operating cash flow fell to $176.8 million, inventory absorbed $807.3 million, and buybacks plus paid dividends substantially exceeded operating cash generation. Seasonality and remaining credit capacity temper that concern; buyback value creation is unproven.
incentive alignment · 3/4 · Disclosed variable compensation, multiyear equity vesting, ownership guidelines, hedging restrictions and clawbacks provide substantial alignment mechanisms. Completed 2023–2025 performance awards had an actual disclosed payout tied to relative TSR, ROIC and operating margin. Ownership compliance and risk-adjusted effectiveness across cycles are not established.
execution · 2/4 · Reduced unsold inventory, improved production cycles and incentive-supported order growth demonstrate operational adaptation. Missed 2025 revenue and profit targets and continuing price and margin pressure limit the assessment. Execution is assessed from operating outcomes rather than management confidence or TSR alone.
governance · 3/4 · Existing disclosures establish independent board leadership and committees, annual director elections, shareholder action rights and a restatement clawback. Management also reported effective disclosure controls. These support strong formal governance, but not exceptional demonstrated oversight or enforcement outcomes.
Evidence
Strategy We believe that national publicly-traded builders have a competitive advantage over local builders through their ability to: access more reliable and lower cost financing through the capital markets; control and entitle large land positions; gain better access to scarce labor resources; and achieve greater geographic and product diversification.
Business / Strategy: management's asserted national-builder advantages · Filed 04/02/2026
had outstanding $1.8 billion principal amount of unsecured senior notes due at dates from March 2031 through March 2036 and no borrowings outstanding, $343.2 million of letters of credit issued, and $1.4 billion of remaining capacity under its Revolving Credit Facility.
Supplemental Guarantor Financial Information: debt maturities and revolving capacity · Filed 22/07/2026
Controlled lots The following is a summary of our lots under control at June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Owned Optioned Controlled Owned Optioned Controlled Northeast 3,650 7,593 11,243 3,671 7,202 10,873 Southeast 18,828 34,930 53,758 18,853 36,519 55,372 Florida 27,125 30,927 58,052 25,849 34,345 60,194 Midwest 11,585 22,274 33,859 10,319 21,660 31,979 Texas 15,214 17,158 32,372 16,220 19,162 35,382 West 25,921 13,036 38,957 26,192 14,640 40,832 Total 102,323 125,918 228,241 101,104 133,528 234,632 45 % 55 % 100 % 43 % 57 % 100 % Developed (%) 50 % 26 % 37 % 50 % 25 % 36 % While competition for well-positioned land is robust, we have continued to pursue land investments that we believe can achieve appropriate risk-adjusted returns on invested capital.
MD&A / Controlled lots: owned and optioned lots and land competition · Filed 22/07/2026
We have also continued to seek to maintain a high percentage of our lots that are controlled via land option agreements as 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 reduces our financial risks associated with long-term land holdings.
MD&A / Controlled lots: contractual land-option flexibility · Filed 22/07/2026
The following provides a summary of our interests in land option agreements as of June 30, 2026 and December 31, 2025 ($000’s omitted): June 30, 2026 December 31, 2025 Deposits and Pre-acquisition Costs Remaining Purchase Price Deposits and Pre-acquisition Costs Remaining Purchase Price Land options with VIEs $ 459,829 $ 3,350,768 $ 436,258 $ 3,307,698 Other land options 830,732 6,336,310 830,642 6,695,156 $ 1,290,561 $ 9,687,078 $ 1,266,900 $ 10,002,854 Land-related charges We recorded the following land-related charges ($000's omitted): Three Months Ended Six Months Ended June 30, June 30, Statement of Operations Classification 2026 2025 2026 2025 Land impairments Home sale cost of revenues $ 10,157 $ 6,703 $ 16,107 $ 25,429 Net realizable value ("NRV") adjustments - land held for sale Land sale and other cost of revenues — 365 — 1,076 Write-offs of deposits and pre-acquisition costs Other expense, net 6,523 11,344 11,454 15,679 $ 16,680 $ 18,412 $ 27,561 $ 42,184 Our evaluations for land impairments, NRV adjustments, and write-offs of deposits and pre-acquisition costs are based on our best estimates of the future cash flows of our communities.
Financial statement notes: land-option exposure and realized land-related charges · Filed 22/07/2026
However, we continue to face pressure in the cost of land acquisition and development.
MD&A / Overview: continuing land acquisition and development cost pressure · Filed 22/07/2026
We have continued responding to these conditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders), closing cost incentives, and mortgage interest rate buydowns.
MD&A / Overview: price adjustments, discounts and financing incentives · Filed 22/07/2026
These pricing actions contributed to a 6% increase in net new orders in units, but lower average selling prices and gross margins, during the second quarter of 2026 compared to the prior year period.
MD&A / Overview: order growth accompanied by lower prices and margins · Filed 22/07/2026
CONSOLIDATED STATEMENTS OF CASH FLOWS ($000’s omitted) (Unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 818,998 $ 1,131,282 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax expense 13,402 19,798 Land-related charges 27,561 42,184 Loss on debt retirement 2,637 — Depreciation and amortization 49,935 49,714 Equity income from unconsolidated entities, net (4,841) (911) Distributions of income from unconsolidated entities 4,758 3,060 Share-based compensation expense 34,207 30,973 Other, net 569 (380) Increase (decrease) in cash due to: Inventories (807,305) (533,041) Residential mortgage loans available-for-sale 63,933 47,986 Other assets (94,825) (175,258) Accounts payable, accrued and other liabilities 67,773 (193,674) Net cash provided by operating activities 176,802 421,733 Cash flows from investing activities: Capital expenditures (55,297) (64,138) Investments in unconsolidated entities (40,875) (7,954) Distributions of capital from unconsolidated entities 5,508 39,419 Other investing activities, net 2,905 (6,509) Net cash used in investing activities (87,759) (39,182) Cash flows from financing activities: Proceeds from debt issuance 794,784 — Repayments of notes payable (600,681) (9,163) Financial Services borrowings (repayments), net (54,434) (28,549) Debt issuance costs (22,759) — Proceeds from liabilities related to consolidated inventory not owned 18,303 16,633 Payments related to consolidated inventory not owned (23,155) (22,438) Share repurchases (681,167) (600,000) Excise tax on share repurchases (11,482) (11,550) Cash paid for shares withheld for taxes (38,062) (23,761) Dividends paid (101,824) (90,077) Net cash used in financing activities (720,477) (768,905) Net increase (decrease) in cash, cash equivalents, and restricted cash (631,434) (386,354) Cash, cash equivalents, and restricted cash at beginning of period 2,008,776 1,653,680 Cash, cash equivalents, and restricted cash at end of period $ 1,377,342 $ 1,267,326 Supplemental Cash Flow Information: Interest paid (capitalized), net $ 5,879 $ 8,088 Income taxes paid (refunded), net $ 270,253 $ 392,286 `` See accompanying Notes to Condensed Consolidated Financial Statements.
Consolidated statements of cash flows: first-half cash generation, investment, financing and distributions · Filed 22/07/2026
Average selling price increased primarily due to product and geographic mix, including a slightly higher mix of closings toward our move-up buyers and in our Northeast segment, both of which carry a higher average selling price, partially offset by higher sales incentives.
MD&A / Home sale revenues: selling-price growth driven primarily by mix · Filed 04/02/2026
The lower home sale gross margins were primarily attributable to the aforementioned pricing actions we took in 2025, including elevated sales incentives, increased land acquisition and development costs, and higher land impairments as the result of the more challenging market conditions.
MD&A / Home sale gross margins: incentives, land costs and impairments · Filed 04/02/2026
Our gross margin from home sales decreased to 25.0% in the second quarter of 2026 versus 27.0% in the second quarter of 2025, but increased from 24.4% in the first quarter of 2026 after sequential quarterly declines since the beginning of 2025.
MD&A / Overview: year-over-year margin decline and sequential improvement · Filed 22/07/2026
Cancellation rates (canceled orders for the period divided by gross new orders for the period) were 13% for both the three and six months ended June 30, 2026, and 15% and 14% for the three and six months ended June 30, 2025, respectively.
MD&A / Orders: cancellation rates · Filed 22/07/2026
FY 2024 2024 Home sale revenues $ 16,743,522 (3) % $ 17,318,521 Land sale and other revenues 179,764 (8) % 195,435 Total Homebuilding revenues 16,923,286 (3) % 17,513,956 Home sale cost of revenues (a) (12,341,421) — % (12,311,766) Land sale and other cost of revenues (166,041) (13) % (189,893) Selling, general, and administrative expenses ("SG&A") (b) (1,573,928) 19 % (1,321,276) Equity income from unconsolidated entities (c) 2,897 (d) 43,151 Other income (expense), net (e) (91,502) (d) 61,752 Income before income taxes $ 2,753,291 (27) % $ 3,795,924 Supplemental data: Gross margin from home sales (a) 26.3 % (260) bps 28.9 % SG&A % of home sale revenues (b) 9.4 % 180 bps 7.6 % Closings (units) 29,572 (5) % 31,219 Average selling price $ 566 2 % $ 555 Net new orders (f): Units 27,914 (4) % 29,226 Dollars $ 15,518,916 (6) % $ 16,493,524 Cancellation rate 15 % 15 % Average active communities 993 5 % 945 Backlog at December 31: Units 8,495 (16) % 10,153 Dollars $ 5,270,112 (19) % $ 6,494,718 (a)Includes the amortization of capitalized interest.
MD&A / Homebuilding Operations: annual orders, cancellations, closings and backlog · Filed 04/02/2026
Homes in production The following is a summary of our homes in production: June 30, 2026 June 30, 2025 Sold 8,342 8,499 Unsold Under construction 5,211 5,741 Completed 1,427 1,865 6,638 7,606 Models 1,763 1,673 Total 16,743 17,778 The number of homes in production at June 30, 2026 was 6% lower than at June 30, 2025.
MD&A / Homes in production: sold and unsold inventory · Filed 22/07/2026
This decrease was primarily due to our focus on reducing the number of spec homes and improved production cycle times, which reduces the length of time a home remains under construction.
MD&A / Homes in production: reduced speculative inventory and improved cycle times · Filed 22/07/2026
Accordingly, we are focused on protecting liquidity and closely managing our cash flows while also continuing to emphasize shareholder returns, including the following actions: –Emphasizing our lot optionality within our land pipeline for increased flexibility; –Updating the underwriting for our land option contracts prior to buying additional land, and we have made decisions to walk away from a number of land option agreements; –Working with our trade partners to update the costs for materials, labor, and services to reflect changes in market conditions; –Adjusting our overhead cost structure as necessary to align with demand; –Rebalancing our mix of spec versus sold home inventory to continue to service buyers seeking to close within 30 to 90 days while increasing our backlog of build-to-order homes; –Maintaining a focus on shareholder return through share buybacks and dividends, including $681.2 million of share repurchases in the first six months of 2026 and an 18% increase in our quarterly dividends from $0.22 to $0.26 per share effective with our January 2026 dividend payment; 24 –Opportunistically extending and expanding our revolving credit facility while also issuing $800.0 million of senior notes at lower interest rates than the $589.1 million of senior notes repaid and redeemed in the first three months of 2026; and –Maintaining ample liquidity.
MD&A / Capital allocation: option exits, operating adjustments, distributions and refinancing · Filed 22/07/2026
•And, ended the year with $2.0 billion of cash, after investing $5.2 billion in the business and returning $1.4 billion to shareholders through share repurchases and dividends.
Proxy / Shareholder letter: 2025 business investment, distributions and ending cash · Filed 13/03/2026
Specifically, we: Delivered a return on equity of 18%*; Continued activity under our share repurchase program, including the repurchase of $1.2 billion of shares in 2025; Increased our quarterly dividend by 18% to $0.26 per share effective for dividends paid beginning in 2026; and Generated $1.9 billion of operating cash flows in 2025.
Proxy / Compensation discussion: 2025 operating cash flow and shareholder returns · Filed 13/03/2026
Despite not achieving our revenue and profit targets for 2025, the execution of these strategies helped us navigate 2025's challenging operating environment and deliver industry-leading TSR within our peer group in 2025.
Proxy / Compensation discussion: missed revenue and profit targets and claimed relative TSR · Filed 13/03/2026
We achieved 194.52% performance with respect to the relative total shareholder return (“TSR”), and 200% performance on each of the return on invested capital (“ROIC”) and operating margin metrics applicable to the 2023-2025 performance-based equity awards, resulting in a payout of 198.17% of target.
Proxy / Compensation discussion: completed 2023–2025 performance-award results and payout · Filed 13/03/2026
WHAT WE DO WHAT WE DO NOT DO Annual say-on-pay vote Shareholder engagement Compensation and Management Development Committee comprised entirely of independent directors Independent outside compensation consultant Pay for performance—CEO pay approximately 94% variable Multi-year vesting schedule for equity awards Meaningful share ownership guidelines Clawback policies for both financial restatements and executive misconduct Market comparison of executive compensation against a relevant peer group Primarily use different metrics for short-term and long-term incentive programs Prohibition on hedging and pledging Company securities No dividends or dividend equivalents paid on unearned performance-based equity awards No automatic single-trigger vesting of equity awards upon a change-in-control No change-in-control tax gross-ups for named executive officers No excessive perquisites No service-based defined benefit pension plan Plan prohibits re-pricing of underwater stock options Plan prohibits granting discounted stock options No fixed term employment agreements Shareholder Feedback In its compensation review process, the Committee considers whether our executive compensation and benefits program serves the interests of our shareholders.
Proxy / Compensation practices: variable pay, vesting, ownership guidelines and safeguards · Filed 13/03/2026
In particular, we believe that the following corporate governance features help us best serve the interests of our shareholders: Shareholder Rights Annual election of all directors Majority vote standard in uncontested director elections Right to call a special meeting for shareholders with 20% or more of outstanding shares Right to take action by written consent for shareholders Active engagement with the Company’s top 20 largest shareholders Independent Oversight Strong Independent Chairman role Audit Committee, Compensation and Management Development Committee and Nominating and Governance Committee each comprised solely of independent directors All directors are independent except the Chief Executive Officer Committees have authority to retain independent advisors Good Governance Frequent cross-committee and Board communications Regular Board, committee and director evaluation processes Code of ethical business conduct and code of ethics Director orientation and continuing education programs Meaningful share ownership guidelines for executive officers and directors Prohibition against hedging and pledging Company securities by all employees and directors Charter of Nominating and Governance Committee expresses strong commitment to inclusion of diverse knowledge, experience and viewpoints in selection of Board nominees iv PULTEGROUP, INC.
Proxy / Governance summary: shareholder rights and independent oversight · Filed 13/03/2026
In addition, the Company maintains an additional compensation recovery, or “clawback,” policy for cash and equity incentive awards paid to executive officers providing for the recovery of applicable incentive-based compensation from current and former executive officers of the Company in the event the Company is required to restate its financial results due to the Company’s material non-compliance with any financial reporting requirement under the federal securities laws as required by the Dodd-Frank Act and corresponding NYSE listing standards.
Proxy / Compensation recovery: existing financial-restatement clawback policy · Filed 13/03/2026
Based upon, and as of the date of that evaluation, our President and Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of June 30, 2026.
Controls and Procedures: management's disclosure-control effectiveness conclusion · Filed 22/07/2026
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.
Business / Active adult communities: amenities and age restrictions · Filed 04/02/2026
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.
Business / Active adult communities: larger community format and amenity affordability · Filed 04/02/2026
