PulteGroup · 10-Q · Item 2 MD&A

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations are provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.

The following is a summary of our operating results by line of business ($000's omitted, except per share data):

Three Months Ended

Six Months Ended

Income before income taxes:

Homebuilding

$

$

$

$

Financial Services

Income before income taxes

Income tax expense

Net income

$

$

$

$

Diluted earnings per share

$

$

$

$

T1Demand conditions remained challenging through the second quarter of 2026 as the result of elevated mortgage interest rates, higher housing costs, and general economic uncertainty. T2Volatility in geopolitical conditions, in part due to tensions in the Middle East, has also negatively impacted inflation and interest rates, further weakening consumer confidence. We have continued responding to these conditions by adjusting production cadence and sales prices where necessary and T3focusing sales incentives on discounts on spec inventory (houses without customer orders), closing cost incentives, and mortgage interest rate buydowns. T4These 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. Closings decreased 8% in the second quarter of 2026 compared to the prior year period primarily due to a lower order backlog entering 2026 compared to 2025.

We expect that many homebuyers will continue to face affordability challenges. In response, we expect our sales incentives to remain elevated and for our pace of house starts to remain dynamic in response to market conditions. We have successfully lowered our mix of spec home inventory. However, we continue to face pressure in the cost of land acquisition and development. Due to the length of our land development and construction cycle times, there is a lag between when such cost changes occur and when they impact our operating results. T5Our 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.

These decreases since 2025 are primarily due to the aforementioned higher land costs, pricing actions, and elevated sales incentives in response to buyer affordability challenges and reducing our mix of spec inventory.

Although elevated mortgage interest rates and volatile macroeconomic and geopolitical conditions may persist for some time, we believe the demographics supporting housing demand remain favorable over the long term. Inventories of new and existing homes have increased in the majority of our geographies as a result of the weakened demand experienced this year, so T6we are taking a measured approach to our capital allocation strategy as we anticipate continued volatility in demand. Accordingly, we are focused on protecting liquidity and closely managing our cash flows while also continuing to emphasize shareholder returns, including the following actions:

–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 T7we 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, T8including $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;

–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.

We believe our strategic approach with respect to balancing sales price with sales pace, including actions taken related to sales incentives and our production cadence, will enable us to meet consumer demand at the selling prices necessary to turn our inventory, maintain market share, and generate healthy returns. We remain confident in our ability to navigate the future environment and to position the Company to take advantage of opportunities as they arise and support future growth while maintaining profitability and financial strength.

Homebuilding Operations

The following presents selected financial information for our Homebuilding operations ($000’s omitted):

Three Months Ended

Six Months Ended

Home sale revenues

$

%

$

$

%

$

Land sale and other revenues

%

%

Total Homebuilding revenues

%

%

Home sale cost of revenues (a)

(8)

%

(8)

%

Land sale and other cost of revenues

%

%

Selling, general, and administrative

expenses ("SG&A")

(2)

%

(3)

%

Equity income (loss) from unconsolidated

entities, net

(b)

(b)

Other income (expense), net

(b)

(b)

Income before income taxes

$

%

$

$

%

$

Supplemental data:

Gross margin from home sales (a)

%

%

%

%

SG&A as a percentage of home

sale revenues

%

%

%

%

Closings (units)

(8)

%

(8)

%

Average selling price

$

(3)

%

$

$

(4)

%

$

Net new orders:

Units

6

%

5

%

Dollars (c)

$

5

%

$

$

3

%

$

Cancellation rate

%

%

%

%

Average active communities

8

%

8

%

Backlog at June 30:

Units

2

%

Dollars

$

(1)

%

$

(a)Includes the amortization of capitalized interest.

(b)Percentage not meaningful.

(c)Net new order dollars represent a composite of new order dollars combined with other movements of the dollars in backlog related to cancellations and change orders.

Home sale revenues

Home sale revenues in the three and six months ended June 30, 2026 were lower than the prior year periods by $460.9 million and $902.6 million, respectively. In the three months ended June 30, 2026, the 11% decrease resulted primarily from an 8% decrease in closings from the prior year period, combined with a 3% decrease in average selling price. In the six months ended June 30, 2026 the 11% decrease resulted primarily from an 8% decrease in closings, combined with a 4% decrease in average selling price. The decreases in closings were primarily attributable to a weaker order backlog entering the year, partially offset by a higher community count and improved production cycle times.

Average selling price during the three and six months ended June 30, 2026 decreased primarily due to product and geographic mix, combined with efforts to reduce our level of spec inventory during 2026.

Home sale gross margins

Home sale gross margins were 25.0% and 24.7% in the three and six months ended June 30, 2026, respectively, compared with 27.0% and 27.2% in the three and six months ended June 30, 2025, respectively. The decreases in home sale gross margins were primarily attributable to the aforementioned pricing actions, including elevated sales incentives, and increased land acquisition and development costs. We expect these factors to continue to impact our gross margins over the near term. Gross margins for the first six months of 2026 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels.

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 sale and other revenues and their related gains or losses vary between periods, depending on the timing of land sales and our strategic operating decisions. Land sale and other revenues contributed income of $10.8 million and $13.0 million for the three and six months ended June 30, 2026, respectively, compared with income of $4.1 million and $5.7 million for the three and six months ended June 30, 2025, respectively.

SG&A

SG&A as a percentage of home sale revenues was 10.1% and 10.7% in the three and six months ended June 30, 2026, respectively, compared with 9.1% and 9.8% for the three and six months ended June 30, 2025, respectively. The gross dollar amount of our SG&A decreased $7.5 million, or 2%, for the three months ended June 30, 2026 compared with the prior year period, and decreased $20.5 million, or 3%, for the six months ended June 30, 2026 compared with the prior year period. The decrease in gross dollars for the three and six months ended June 30, 2026 was primarily attributable to lower variable costs associated with the decrease in closings along with lower liability insurance costs. We expect to continue managing and balancing our overhead costs consistent with expected changes in the demand environment.

Other income (expense), net

Other income (expense), net includes the following ($000’s omitted):

Three Months Ended

Six Months Ended

Write-offs of deposits and pre-acquisition costs

$

$

$

$

Amortization of intangible assets

Loss on debt retirement

—

—

—

Interest income

Interest expense

Miscellaneous, net

Other income (expense), net

$

$

$

$

Net new orders

Net new orders in units increased 6% while net new orders in dollars increased 5% in the three months ended June 30, 2026, as compared with the prior year period. Net new orders in units increased 5% while net new orders in dollars increased 3% in the six months ended June 30, 2026, as compared with the prior year period. The increased net new order volume and dollars in the three and six months ended June 30, 2026 over the comparable prior year periods was primarily attributable to higher order volumes in our Florida and Midwest segments, partially offset by lower volumes in our West segment. 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. Ending backlog dollars, which represent orders for homes that have not yet closed, decreased 1% at June 30, 2026 compared with June 30, 2025.

Homes in production

The following is a summary of our homes in production:

Sold

Unsold

Under construction

Completed

Models

Total

The number of homes in production at June 30, 2026 was 6% lower than at June 30, 2025. 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.

Controlled lots

The following is a summary of our lots under control at June 30, 2026 and December 31, 2025:

Owned

Optioned

Controlled

Owned

Optioned

Controlled

Northeast

Southeast

Florida

Midwest

Texas

West

Total

%

%

%

%

%

%

Developed (%)

%

%

%

%

%

%

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. 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. The remaining purchase price under our land option agreements totaled $9.7 billion at June 30, 2026.

Homebuilding Segment Operations

As of June 30, 2026, we conducted our operations in 48 markets located throughout 26 states. 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

The following tables present selected financial information for our reportable Homebuilding segments:

Operating Data by Segment ($000's omitted)

Three Months Ended

Six Months Ended

Revenues:

Northeast

$

%

$

$

%

$

Southeast

(7)

%

(5)

%

Florida

1

%

(2)

%

Midwest

(8)

%

(9)

%

Texas

%

%

West

%

%

Other homebuilding (a)

%

$

%

$

$

%

$

$

%

$

Income before income taxes (b):

Northeast

$

%

$

$

%

$

Southeast

%

%

Florida

—

%

%

Midwest

%

%

Texas

%

%

West

%

%

Other homebuilding (c)

—

%

%

$

%

$

$

%

$

(a)Other homebuilding includes revenues from land sales and construction services.

(b)Income before income taxes includes land-related charges as summarized in the table below.

(c) Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the other segments.

Operating Data by Segment ($000's omitted)

Three Months Ended

Six Months Ended

Closings (units):

Northeast

%

%

Southeast

(2)

%

—

%

Florida

—

%

1

%

Midwest

(8)

%

(9)

%

Texas

(8)

%

%

West

%

%

(8)

%

(8)

%

Average selling price:

Northeast

$

(8)

%

$

$

(8)

%

$

Southeast

(5)

%

(5)

%

Florida

1

%

(3)

%

Midwest

—

%

—

%

Texas

(4)

%

(6)

%

West

—

%

(1)

%

$

(3)

%

$

$

(4)

%

$

Net new orders - units:

Northeast

4

%

7

%

Southeast

3

%

4

%

Florida

%

%

Midwest

%

1

%

Texas

1

%

(1)

%

West

(7)

%

(5)

%

6

%

5

%

Net new orders - dollars:

Northeast

$

3

%

$

$

1

%

$

Southeast

(4)

%

(3)

%

Florida

%

%

Midwest

%

3

%

Texas

(2)

%

(3)

%

West

%

(8)

%

$

5

%

$

$

3

%

$

Operating Data by Segment ($000's omitted)

Three Months Ended

Six Months Ended

Cancellation rates:

Northeast

%

9

%

9

%

9

%

Southeast

%

%

%

%

Florida

%

%

%

%

Midwest

%

%

%

9

%

Texas

%

%

%

%

West

%

%

%

%

%

%

%

%

Unit backlog:

Northeast

%

Southeast

(3)

%

Florida

9

%

Midwest

2

%

Texas

9

%

West

%

2

%

Backlog dollars:

Northeast

$

%

$

Southeast

(6)

%

Florida

%

Midwest

4

%

Texas

4

%

West

%

$

(1)

%

$

Operating Data by Segment

Three Months Ended

Six Months Ended

Land-related charges (a):

Northeast

$

$

$

$

Southeast

Florida

Midwest

Texas

West

Other homebuilding

$

$

$

$

(a) Land-related charges include land inventory impairments, net realizable value adjustments on land held for sale, and write-offs of deposits and pre-acquisition costs for land option contracts we elected not to pursue. Other homebuilding consists primarily of write-offs of capitalized interest related to such land-related charges.

Northeast

For the second quarter of 2026, Northeast home sale revenues decreased 33% when compared with the prior year period due to a 27% decrease in closings combined with an 8% decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets. Income before income taxes decreased 50%, primarily due to lower revenues and gross margins across the majority of markets. Net new orders increased across the majority of markets.

For the six months ended June 30, 2026, Northeast home sale revenues decreased 31% when compared with the prior year period due to a 25% decrease in closings combined with an 8% decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets. Income before income taxes decreased 54% primarily due to lower revenues and gross margins across the majority of markets. Net new orders increased across all markets.

Southeast

For the second quarter of 2026, Southeast home sale revenues decreased 7% when compared with the prior year period due to a 2% decrease in closings combined with a 5% decrease in average selling price. The decrease in closings occurred across the majority of markets, while the decrease in average selling price was mixed among markets. Income before income taxes decreased 25%, primarily due to lower revenues across the majority of markets and lower gross margins across all markets. The increase in net new orders was mixed among markets.

For the six months ended June 30, 2026, Southeast home sale revenues decreased 5% when compared with the prior year period due to a 5% decrease in average selling price partially offset by a slight increase in closings. The decrease in average selling price and increase in closings was mixed among markets. Income before income taxes decreased 26% primarily due to lower revenues across the majority of markets and lower gross margins across all. The increase in net new orders was mixed among markets.

Florida

For the second quarter of 2026, Florida home sale revenues increased 1% when compared with the prior year period primarily due to a 1% increase in average selling price partially offset by a slight decrease in closings. The increase in average selling price and decrease in closings occurred across the majority of markets. Income before income taxes was in line with the comparable prior year period. Net new orders increased across all markets.

For the six months ended June 30, 2026, Florida home sale revenues decreased 2% when compared with the prior year period due to a 3% decrease in the average selling price partially offset by a 1% increase in closings. The decrease in average selling price and increase in closings occurred across the majority of markets. Income before income taxes decreased 14% primarily due to lower gross margins across the majority of markets. The increase in net new orders occurred across all markets.

Midwest

For the second quarter of 2026, Midwest home sale revenues decreased 8% when compared with the prior year period due to an 8% decrease in closings combined with a slight decrease in average selling price. The decrease in closings occurred across the majority of markets while the decrease in average selling price was mixed among markets. Income before income taxes decreased 14% primarily due to lower revenues. The increase in net new orders occurred across the majority of markets.

For the six months ended June 30, 2026, Midwest home sale revenues decreased 9% when compared with the prior year period due to a 9% decrease in closings partially offset by a slight increase in average selling price. The decrease in closings and the increase in average selling price occurred across the majority of markets. Income before income taxes decreased 15% primarily due to lower revenues across the majority of markets. The increase in net new orders was mixed among markets.

Texas

For the second quarter of 2026, Texas home sale revenues decreased 12% when compared with the prior year period due to an 8% decrease in closings combined with a 4% decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets. Income before income taxes decreased 21% primarily due to lower revenues across the majority of markets, and lower gross margins, which was mixed among markets. The increase in net new orders was mixed among markets.

For the six months ended June 30, 2026, Texas home sale revenues decreased 17% when compared with the prior year period due to a 12% decrease in closings combined with a 6% decrease in average selling price. The decrease in closings occurred across all markets while the decrease in average selling price occurred across the majority of markets. Income before income taxes decreased 39% primarily due to lower revenues and gross margins across all markets. The decrease in net new orders was mixed among markets.

West

For the second quarter of 2026, West home sale revenues decreased 20% when compared with the prior year period due to a 20% decrease in closings combined with a slight decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets. Income before income taxes decreased 56% primarily due to lower revenues and gross margins across the majority of markets. The decrease in net new orders was primarily attributable to our Las Vegas and Arizona operations.

For the six months ended June 30, 2026, West home sale revenues decreased 19% when compared with the prior year period due to an 18% decrease in closings combined with a 1% decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets. Income before income taxes decreased 53% primarily due to lower revenues and gross margins across the majority of markets. The decrease in net new orders was primarily attributable to our Las Vegas and Arizona operations.

Financial Services Operations

We conduct our Financial Services operations, which include mortgage banking, title, and insurance agency operations, through Pulte Mortgage LLC ("Pulte Mortgage") and other subsidiaries. In originating mortgage loans, we initially use our own funds supplemented by funds available pursuant to a credit agreement with third parties. Substantially all of the loans we originate are sold in the secondary market within a short period of time after origination, generally within 30 days. We also 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 loans and related servicing rights for only a short period of time.

Operating as a captive business model primarily targeted to support our Homebuilding operations, the business levels of our Financial Services operations are highly correlated to Homebuilding, as Homebuilding customers continue to account for substantially all of its business. We believe that our mortgage capture rate, which represents loan originations from our Homebuilding operations as a percentage of total loan opportunities from our Homebuilding operations, excluding cash closings, is an important metric in

evaluating the effectiveness of our captive mortgage business model. The following tables present selected financial information for our Financial Services operations ($000's omitted):

Three Months Ended

Six Months Ended

Mortgage revenues

$

%

$

$

%

$

Title services revenues

(4)

%

(4)

%

Insurance agency commissions

%

%

Total Financial Services revenues

(4)

%

%

Expenses

2

%

5

%

Equity income from unconsolidated entities

%

%

Income before income taxes

$

%

$

$

%

$

Total originations:

Loans

(7)

%

(7)

%

Principal

$

(9)

%

$

$

(9)

%

$

Six Months Ended

Supplemental data:

Capture rate

%

%

Average FICO score

Funded origination breakdown:

Government (FHA, VA, USDA)

%

%

Other agency

%

%

Total agency

%

%

Non-agency

3

%

4

%

Total funded originations

%

%

Revenues

Total Financial Services revenues for the three and six months ended June 30, 2026 decreased 4% and 12%, respectively, compared with the comparable prior year periods, reflective of the lower homebuilding volume. Insurance agency commissions reflect the evolving environment for home insurance as carriers adjust their premiums, geographic markets, and product coverages.

Income before income taxes

Income before income taxes in the three and six months ended June 30, 2026 decreased 13% and 36%, respectively, compared with the comparable prior year periods due to lower revenues combined with higher expenses.

Income Taxes

Our effective tax rate for the three and six months ended June 30, 2026 was 24.2% and 23.6%, respectively, compared with 24.6% and 24.0% for the comparable prior year periods. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and federal tax credits. Our effective tax rate for the six months ended June 30, 2026 and 2025 also includes benefits from stock-based compensation.

Liquidity and Capital Resources

We finance our land acquisition, development, and construction activities and financial services operations using internally-generated funds, supplemented by credit arrangements with third parties and capital market financing. We routinely monitor current and expected operational requirements and financial market conditions to evaluate accessing available financing sources, including revolving bank credit and securities offerings.

At June 30, 2026, we had unrestricted cash and equivalents of $1.3 billion, restricted cash balances of $41.6 million, and $1.4 billion available under our Revolving Credit Facility. Our ratio of debt-to-total capitalization, excluding our Financial Services debt, was 12.3% at June 30, 2026, compared with 11.2% at December 31, 2025. We follow a diversified investment approach for our cash and equivalents by maintaining such funds with a portfolio of banks within our group of relationship banks in high quality, highly liquid, short-term deposits and investments, which helps mitigate banking concentration risk.

For the next 12 months, we expect our principal demand for funds will be for the acquisition and development of land inventory, construction of house inventory, and operating expenses, including our general and administrative expenses. We plan to continue our dividend payments and repurchases of common stock. We need to repay or refinance Pulte Mortgage's master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") prior to or at the time it comes due in August 2026. While we intend to refinance the Repurchase Agreement, there can be no assurances that the Repurchase Agreement can be renewed or replaced on commercially reasonable terms upon its expiration. However, we believe we have adequate liquidity to meet Pulte Mortgage's anticipated financing needs.

Beyond the next 12 months, we will need to repay or refinance our Revolving Credit Facility, which matures in February 2031, and additional unsecured senior notes beginning in March 2031 and beyond (see Note 4). We may from time to time repurchase our unsecured senior notes through open market purchases, privately negotiated transactions, or otherwise.

We believe that our current cash position and other available financing resources, coupled with our ongoing operating activities, will provide sufficient liquidity to fund our business needs over the next 12 months and beyond. To the extent the sources of capital described above are insufficient to meet our needs, we may also conduct additional public offerings of our securities, refinance debt, dispose of certain assets to fund our operating activities, or draw on existing or new debt facilities.

Unsecured senior notes

We had $1.8 billion and $1.6 billion of unsecured senior notes outstanding at June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026, no repayments are due until March 2031.

In February 2026, we issued $800.0 million of unsecured senior notes, consisting of $400.0 million of 4.250% senior notes scheduled to mature on March 1, 2031, and $400.0 million of 4.900% senior notes scheduled to mature on March 1, 2036. The net proceeds from the February 2026 senior notes issuance were used to repay at maturity $251.9 million principal amount of unsecured senior notes which matured on March 1, 2026, and to redeem in full prior to maturity all $337.3 million principal amount of unsecured senior notes which were scheduled to mature in January 2027, and, in each case, to pay any premium and accrued interest in respect thereof, with the remaining net proceeds used for general corporate purposes.

Other notes payable

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $37.4 million and $47.2 million at June 30, 2026 and December 31, 2025, respectively. These notes have maturities ranging up to four years, are secured by the applicable land positions to which they relate, and generally have no recourse to other assets. The stated interest rates on these notes range up to 9%.

Revolving credit facility

We maintain a revolving credit facility with third-party lenders entered into in June 2022 (the "Original Revolving Credit Facility", and, as amended, the "Revolving Credit Facility") scheduled to mature in February 2031. The Original Revolving Credit Facility was amended and restated in February 2026 to (i) extend the maturity from June 2027 to February 2031, (ii) increase the total committed capacity from $1.25 billion to $1.75 billion, and (iii) expand the uncommitted accordion feature from $500.0 million 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 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 June 30, 2026, we were in compliance with all covenants and requirements of the Revolving Credit Facility. Outstanding balances under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.

At June 30, 2026, we had no borrowings outstanding, $343.2 million of letters of credit issued, and $1.4 billion of remaining capacity under the Revolving Credit Facility. 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 Original Revolving Credit Facility.

Joint venture debt

At June 30, 2026, aggregate outstanding debt of unconsolidated joint ventures was $45.1 million.

Financial Services debt

Pulte Mortgage maintains a master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") that matures on August 12, 2026. The maximum aggregate commitment under the Repurchase Agreement was $625.0 million at June 30, 2026, 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 June 30, 2026, Pulte Mortgage had $477.9 million outstanding at a weighted-average interest rate of 5.42% and $147.1 million of remaining capacity under the Repurchase Agreement.

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. Pulte Mortgage was in compliance with all covenants and requirements as of such dates.

Dividends and share repurchase program

In the six months ended June 30, 2026, we declared cash dividends totaling $99.5 million and repurchased 5.5 million shares under our share repurchase authorization for $681.2 million. In the six months ended June 30, 2025, we declared cash dividends totaling $88.7 million and repurchased 5.8 million shares under our share repurchase authorization for $600.0 million. 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. On April 22, 2026, the Board of Directors approved an additional increase to our share repurchase authorization of $1.5 billion, which was publicly announced on April 23, 2026. At June 30, 2026, we had remaining authorization to repurchase $1.8 billion of common shares.

Contractual Obligations

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Condensed Consolidated Balance Sheet as of June 30, 2026, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, purchase obligations related to expected acquisitions and development of land, house construction costs, operating leases, and obligations under our various compensation and benefit plans.

We use letters of credit and surety bonds to guarantee our performance under various contracts, principally in connection with the development of our homebuilding projects and insurance programs. The expiration dates of the letter of credit contracts coincide with the expected completion date of the related homebuilding projects and insurance programs. If the obligations related to a project or program are ongoing, annual extensions of the letters of credit are typically granted on a year-to-year basis. At June 30, 2026, we had outstanding letters of credit totaling $343.2 million. Our surety bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed.

These bonds, which approximated $3.1 billion at June 30, 2026, are typically outstanding over a period of approximately three to five years. Because significant construction and development work has been performed related to projects that have not yet received final acceptance by the respective counterparties, the aggregate amount of surety bonds outstanding is in excess of the projected cost of the remaining work to be performed.

In the ordinary course of business, we enter into land option agreements in order to procure land for the construction of houses in the future. At June 30, 2026, these agreements had an aggregate remaining purchase price of $9.7 billion. 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. At June 30, 2026, outstanding deposits totaled $717.4 million, of which $15.8 million is refundable.

For further information regarding our primary obligations, refer to Note 4 and Note 8 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on 10-Q for amounts outstanding as of June 30, 2026 related to debt and commitments and contingencies, respectively.

Cash flows

Operating activities

Net cash provided by operating activities in the six months ended June 30, 2026 was $176.8 million. Generally, the primary drivers of our cash flow from operations are profitability and changes in the levels of inventory and residential mortgage loans available-for-sale, each of which experience seasonal fluctuations. The cash inflows from our operations for the six months ended June 30, 2026 were primarily due to net income of $819.0 million and a net decrease in residential mortgage loans available-for-sale of $63.9 million, partially offset by a net increase in inventories of $807.3 million, which was primarily attributable to land acquisition, development, and house spend to support ongoing operations.

Net cash provided by operating activities in the six months ended June 30, 2025 was $421.7 million. The cash inflows from our operations for the six months ended June 30, 2025 were primarily due to net income of $1.1 billion, partially offset by a net increase in inventories of $533.0 million, which was primarily attributable to land acquisition, development, and house spend to support expected future growth.

Investing activities

Net cash used in investing activities in the six months ended June 30, 2026 was $87.8 million. These cash outflows primarily resulted from capital expenditures of $55.3 million related to our ongoing investments in new communities, facilities, and information technology applications, along with $40.9 million of investments in unconsolidated entities.

Net cash used in investing activities in the six months ended June 30, 2025 was $39.2 million. These cash outflows primarily resulted from capital expenditures of $64.1 million related to our ongoing investments in new communities, facilities, and information technology applications, partially offset by distributions of capital from unconsolidated entities of $39.4 million.

Financing activities

Net cash used in financing activities in the six months ended June 30, 2026 totaled $720.5 million. These cash outflows resulted primarily from repayments and redemptions of notes payable of $600.7 million, repurchases of 5.5 million common shares for $681.2 million under our share repurchase authorization, payments of $101.8 million in cash dividends, and net repayments of $54.4 million under the Repurchase Agreement, partially offset by $794.8 million of proceeds from debt issuance.

Net cash used in financing activities in the six months ended June 30, 2025 totaled $768.9 million. These cash outflows resulted primarily from repurchases of 5.8 million common shares for $600.0 million under our share repurchase authorization, payments of $90.1 million in cash dividends, payments of $22.4 million related to consolidated inventory not owned, and net repayments of $28.5 million under the Repurchase Agreement.

Seasonality

Although significant changes in market conditions have impacted our seasonal patterns in the past and could do so again, we historically experience variability in our quarterly results from operations due to the seasonal nature of the homebuilding industry. We generally experience increases in revenues and cash flow from operations in the fourth quarter based on the timing of home closings. This seasonal activity increases our working capital requirements in our third and fourth quarters to support our home production and loan origination volumes. As a result of the seasonality of our operations, our quarterly results of operations are not necessarily indicative of the results that may be expected for the full year.

Supplemental Guarantor Financial Information

As of June 30, 2026, PulteGroup, Inc. 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.

All of our unsecured senior notes and the Revolving Credit Facility are fully and unconditionally guaranteed, on a joint and several basis, by certain subsidiaries of PulteGroup, Inc. ("Guarantors" or "Guarantor Subsidiaries"). Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by PulteGroup, Inc. Our subsidiaries associated with our Financial Services operations and certain other subsidiaries do not guarantee the unsecured senior notes or the Revolving Credit Facility (collectively, "Non-Guarantor Subsidiaries"). The guarantees are senior unsecured obligations of each Guarantor and rank equal with all existing and future senior debt of such Guarantor and senior to all subordinated debt of such Guarantor. The guarantees are effectively subordinated to any secured debt of such Guarantor to the extent of the value of the assets securing such debt.

A court could void or subordinate any Guarantor’s guarantee under the fraudulent conveyance laws if existing or future creditors of any such Guarantor were successful in establishing that such Guarantor:

(a) incurred the guarantee with the intent of hindering, delaying or defrauding creditors; or

(b) received less than reasonably equivalent value or fair consideration in return for incurring the guarantee and, in the case of any one of the following being true at the time thereof:

•such Guarantor was insolvent or rendered insolvent by reason of the issuance of the incurrence of the guarantee;

•the incurrence of the guarantee left such Guarantor with an unreasonably small amount of capital or assets to carry on its business;

•such Guarantor intended to, or believed that it would, incur debts beyond its ability to pay as they mature; or

•such Guarantor was a defendant in an action for money damages, or had a judgment for money damages docketed against it, if the judgment is unsatisfied after final judgment.

The measures of insolvency for purposes of determining whether a fraudulent conveyance occurred would vary depending upon the laws of the relevant jurisdiction and upon the valuation assumptions and methodology applied by the court. However, in general, a court would deem a company insolvent if:

•the sum of its debts, including contingent and unliquidated liabilities, was greater than the fair saleable value of all of its assets;

•the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

•it could not pay its debts as they became due.

The guarantees of the senior notes contain a provision to limit each Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. However, under certain case law, this provision may not be effective to protect such guarantee from being voided under fraudulent transfer law or otherwise determined to be unenforceable. If a court were to find that the incurrence of a guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under that guarantee, could subordinate that guarantee to presently existing and future indebtedness of the Guarantor or could require the holders of the senior notes to repay any amounts received with respect to that guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, holders may not receive any repayment on the senior notes.

Finally, as a court of equity, a bankruptcy court may subordinate the claims in respect of the guarantees to other claims against us under the principle of equitable subordination if the court determines that (1) the holder of senior notes engaged in some type of inequitable conduct, (2) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of senior notes and (3) equitable subordination is not inconsistent with the provisions of the bankruptcy code.

On the basis of historical financial information, operating history and other factors, we believe that each of the Guarantors, after giving effect to the issuance of the guarantees when such guarantees were issued, was not insolvent, did not have unreasonably small capital for the business in which it engaged and did not and has not incurred debts beyond its ability to pay such debts as they mature. We cannot, however, provide assurances as to what standard a court would apply in making these determinations or whether a court would agree with our conclusions in this regard.

The following tables present summarized financial information for PulteGroup, Inc. and the Guarantor Subsidiaries on a combined basis after intercompany transactions and balances have been eliminated among PulteGroup, Inc. and the Guarantor Subsidiaries, as well as their investment in and equity in earnings from the Non-Guarantor Subsidiaries ($000’s omitted):

PulteGroup, Inc. and Guarantor Subsidiaries of the Company’s 7.875% unsecured senior notes due 2032, 6.375% unsecured senior notes due 2033, and 6.000% unsecured senior notes due 2035:

Summarized Balance Sheet Data

ASSETS

Cash, cash equivalents, and restricted cash

House and land inventory

Amount due from Non-Guarantor Subsidiaries

Total assets

LIABILITIES

Accounts payable, customer deposits,

accrued and other liabilities

Notes payable

Total liabilities

Six Months Ended

Year Ended

Summarized Statement of Operations Data

Revenues

Cost of revenues

Selling, general, and administrative expenses

Income before income taxes

PulteGroup, Inc. and Guarantor Subsidiaries of the Company’s 4.250% unsecured senior notes due 2031 and 4.900% unsecured senior notes due 2036:

Summarized Balance Sheet Data

ASSETS

Cash, cash equivalents, and restricted cash

House and land inventory

Total assets

LIABILITIES

Accounts payable, customer deposits,

accrued and other liabilities

Notes payable

Amount due to Non-Guarantor Subsidiaries

Total liabilities

Six Months Ended

Year Ended

Summarized Statement of Operations Data

Revenues

Cost of revenues

Selling, general, and administrative expenses

Income before income taxes

Critical Accounting Estimates

There have been no significant changes to our critical accounting estimates in the six months ended June 30, 2026 compared with those contained in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.