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Form 10-Q PULTEGROUP INC/MI/ For: Jun 30

July 26, 2022 4:27 PM EDT

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PULTEGROUP 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number 1-9804
phm-20220630_g1.jpg
PULTEGROUP, INC.
(Exact name of registrant as specified in its charter) 
Michigan38-2766606
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3350 Peachtree Road NE, Suite 1500
Atlanta,Georgia30326
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:404978-6400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, par value $0.01 PHM New York Stock Exchange
Series A Junior Participating Preferred Share Purchase Rights
New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  [X]   No  [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  [X]   No  [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer  Accelerated filer  Non-accelerated filer   Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
YesNo
Number of common shares outstanding as of July 19, 2022: 231,498,300
1


PULTEGROUP, INC.
TABLE OF CONTENTS

Page
No.
PART I 
Item 1
Item 2
 
Item 3
Item 4
PART II
Item 1
Item 1A
Item 2
Item 6
 




2


PART I. FINANCIAL INFORMATION

Item 1.      Financial Statements

PULTEGROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000’s omitted)
 
June 30,
2022
December 31,
2021
(Unaudited)
ASSETS
Cash and equivalents$662,780 $1,779,088 
Restricted cash69,324 54,477 
Total cash, cash equivalents, and restricted cash732,104 1,833,565 
House and land inventory10,729,444 9,047,569 
Land held for sale32,772 29,276 
Residential mortgage loans available-for-sale553,789 947,139 
Investments in unconsolidated entities150,496 98,155 
Other assets1,239,870 1,110,966 
Intangible assets141,337 146,923 
Deferred tax assets120,524 139,038 
$13,700,336 $13,352,631 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable$750,508 $621,168 
Customer deposits1,027,938 844,785 
Deferred tax liabilities167,845 165,519 
Accrued and other liabilities1,535,901 1,576,478 
Financial Services debt442,816 626,123 
Notes payable2,030,112 2,029,043 
5,955,120 5,863,116 
Shareholders' equity7,745,216 7,489,515 
$13,700,336 $13,352,631 




See accompanying Notes to Condensed Consolidated Financial Statements.

3


PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(000’s omitted, except per share data)
(Unaudited)
 
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Revenues:
Homebuilding
Home sale revenues$3,809,601 $3,235,379 $6,879,914 $5,831,889 
Land sale and other revenues33,810 33,076 66,969 60,235 
3,843,411 3,268,455 6,946,883 5,892,124 
Financial Services82,775 91,029 166,918 197,150 
Total revenues3,926,186 3,359,484 7,113,801 6,089,274 
Homebuilding Cost of Revenues:
Home sale cost of revenues(2,631,356)(2,375,495)(4,812,430)(4,311,130)
Land sale and other cost of revenues(31,656)(31,195)(63,657)(55,831)
(2,663,012)(2,406,690)(4,876,087)(4,366,961)
Financial Services expenses(43,847)(40,411)(87,333)(80,086)
Selling, general, and administrative expenses(351,256)(272,286)(680,279)(543,973)
Loss on debt retirement   (61,469)
Other expense, net(3,498)(624)(5,636)(3,259)
Income before income taxes864,573 639,473 1,464,466 1,033,526 
Income tax expense(212,138)(136,074)(357,308)(226,020)
Net income$652,435 $503,399 $1,107,158 $807,506 
Per share:
Basic earnings$2.74 $1.91 $4.56 $3.04 
Diluted earnings$2.73 $1.90 $4.54 $3.03 
Cash dividends declared$0.15 $0.14 $0.30 $0.28 
Number of shares used in calculation:
Basic236,328 262,099 241,036 263,744 
Effect of dilutive securities1,318 648 1,193 627 
Diluted237,646 262,747 242,229 264,371 


See accompanying Notes to Condensed Consolidated Financial Statements.

4


PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($000’s omitted)
(Unaudited)

Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Net income$652,435 $503,399 $1,107,158 $807,506 
Other comprehensive income, net of tax:
Change in value of derivatives20 25 45 50 
Other comprehensive income20 25 45 50 
Comprehensive income$652,455 $503,424 $1,107,203 $807,556 


See accompanying Notes to Condensed Consolidated Financial Statements.

5



PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(000's omitted)
(Unaudited)
 Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
(Loss)
Retained
Earnings
Total
Common Stock
Shares$
Shareholders' equity, March 31, 2022239,622 $2,396 $3,309,912 $(20)$4,100,976 $7,413,264 
Share issuances48 — — — — — 
Dividends declared— — — — (35,514)(35,514)
Share repurchases(7,100)(70)— — (294,157)(294,227)
Cash paid for shares withheld for taxes— — — — —  
Share-based compensation— — 9,238 — — 9,238 
Net income— — — — 652,435 652,435 
Other comprehensive income— — — 20 — 20 
Shareholders' equity, June 30, 2022232,570 $2,326 $3,319,150 $ $4,423,740 $7,745,216 
Shareholders' equity, December 31, 2021249,326 $2,493 $3,290,791 $(45)$4,196,276 $7,489,515 
Share issuances634 6 6,024 — — 6,030 
Dividends declared— — — — (72,026)(72,026)
Share repurchases(17,390)(173)— — (794,054)(794,227)
Cash paid for shares withheld for taxes— — — — (13,614)(13,614)
Share-based compensation— — 22,335 — — 22,335 
Net income— — — — 1,107,158 1,107,158 
Other comprehensive income— — — 45 — 45 
Shareholders' equity, June 30, 2022232,570 $2,326 $3,319,150 $ $4,423,740 $7,745,216 

6


Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
(Loss)
Retained
Earnings
Total
Common Stock
Shares$
Shareholders' equity, March 31, 2021263,637 $2,636 $3,274,154 $(120)$3,408,604 $6,685,274 
Share issuances12 — — — — — 
Dividends declared— — — — (36,814)(36,814)
Share repurchases(3,582)(36)— — (199,964)(200,000)
Cash paid for shares withheld for taxes— — — — (41)(41)
Share-based compensation— — 6,625 — — 6,625 
Net income— — — — 503,399 503,399 
Other comprehensive income— — — 25 — 25 
Shareholders' equity, June 30, 2021260,067 $2,600 $3,280,779 $(95)$3,675,184 $6,958,468 
Shareholders' equity, December 31, 2020266,464 $2,665 $3,261,412 $(145)$3,306,057 $6,569,989 
Stock option exercises1 — 11 — — 11 
Share issuances517 5 4,176 — — 4,181 
Dividends declared— — — — (74,139)(74,139)
Share repurchases(6,915)(70)— — (353,633)(353,703)
Cash paid for shares withheld for taxes— — — — (10,607)(10,607)
Share-based compensation— — 15,180 — — 15,180 
Net income— — — — 807,506 807,506 
Other comprehensive income— — — 50 — 50 
Shareholders' equity, June 30, 2021260,067 $2,600 $3,280,779 $(95)$3,675,184 $6,958,468 

See accompanying Notes to Condensed Consolidated Financial Statements.
7


PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000’s omitted)
(Unaudited)
Six Months Ended
June 30,
20222021
Cash flows from operating activities:
Net income$1,107,158 $807,506 
Adjustments to reconcile net income to net cash from operating activities:
Deferred income tax expense20,823 4,781 
Land-related charges8,013 3,254 
Loss on debt retirement 61,469 
Depreciation and amortization33,393 35,407 
Share-based compensation expense29,640 21,603 
Other, net(58)(2,922)
Increase (decrease) in cash due to:
Inventories(1,683,129)(632,647)
Residential mortgage loans available-for-sale393,350 (16,384)
Other assets(87,569)(85,049)
Accounts payable, accrued and other liabilities280,722 235,050 
Net cash provided by operating activities102,343 432,068 
Cash flows from investing activities:
Capital expenditures(62,557)(31,547)
Investments in unconsolidated entities(50,480)(15,920)
Distributions of capital from unconsolidated entities3,010 10,500 
Business acquisition(10,400)(10,400)
Other investing activities, net(2,713)(17)
Net cash used in investing activities(123,140)(47,384)
Cash flows from financing activities:
Repayments of notes payable(4,152)(797,395)
Borrowings under revolving credit facility110,000  
Repayments under revolving credit facility(110,000) 
Financial Services repayments, net(183,307)(59,193)
Debt issuance costs(11,167) 
Stock option exercises 11 
Share repurchases(794,227)(353,703)
Cash paid for shares withheld for taxes(13,614)(10,607)
Dividends paid(74,197)(74,910)
Net cash used in financing activities(1,080,664)(1,295,797)
Net decrease in cash, cash equivalents, and restricted cash(1,101,461)(911,113)
Cash, cash equivalents, and restricted cash at beginning of period1,833,565 2,632,235 
Cash, cash equivalents, and restricted cash at end of period$732,104 $1,721,122 
Supplemental Cash Flow Information:
Interest paid (capitalized), net$230 $11,606 
Income taxes paid (refunded), net$290,571 $154,658 

See accompanying Notes to Condensed Consolidated Financial Statements.
8


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. Basis of presentation

PulteGroup, Inc. is one of the largest homebuilders in the United States ("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 engage in mortgage banking operations, conducted through Pulte Mortgage LLC (“Pulte Mortgage”), and title and insurance brokerage operations.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with our consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP 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 (the "SEC").

Other expense, net

Other expense, net consists of the following ($000’s omitted): 
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Write-offs of deposits and pre-acquisition costs$(4,503)$(1,866)$(8,013)$(3,235)
Amortization of intangible assets(2,766)(4,968)(5,587)(9,961)
Interest income290 473 678 1,105 
Interest expense(65)(138)(150)(272)
Equity in earnings of unconsolidated entities723 4,190 1,944 5,017 
Miscellaneous, net2,823 1,685 5,492 4,087 
Total other expense, net$(3,498)$(624)$(5,636)$(3,259)

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, and 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 deposits related to sold but undelivered homes, which totaled $1.0 billion and $844.8 million at June 30, 2022 and December 31, 2021, 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 8 for information on warranties and related obligations.

9


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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. 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 certain direct loan origination costs are recognized as incurred. Expected gains and losses from the sale of residential mortgage loans and their related servicing rights are included in the measurement of written loan commitments 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. 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. Servicing fees are based on a contractual percentage of the outstanding principal balance and are credited to income when related mortgage payments are received.

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 brokerage commissions relate to commissions on homeowner 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, and related contract assets for estimated future renewal commissions are included in other assets and totaled $49.5 million and $44.3 million at June 30, 2022 and December 31, 2021, respectively.

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 outstanding, 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.

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. Certain of our outstanding restricted share units and deferred shares are considered participating securities. The following table presents the earnings per common share (000's omitted, except per share data):
10


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Numerator:
Net income$652,435 $503,399 $1,107,158 $807,506 
Less: earnings distributed to participating securities(217)(294)(434)(592)
Less: undistributed earnings allocated to participating securities(3,672)(3,731)(6,721)(5,908)
Numerator for basic earnings per share$648,546 $499,374 $1,100,003 $801,006 
Add back: undistributed earnings allocated to participating securities3,672 3,731 6,721 5,908 
Less: undistributed earnings reallocated to participating securities(3,644)(3,722)(6,677)(5,895)
Numerator for diluted earnings per share$648,574 $499,383 $1,100,047 $801,019 
Denominator:
Basic shares outstanding236,328 262,099 241,036 263,744 
Effect of dilutive securities1,318 648 1,193 627 
Diluted shares outstanding237,646 262,747 242,229 264,371 
Earnings per share:
Basic$2.74 $1.91 $4.56 $3.04 
Diluted$2.73 $1.90 $4.54 $3.03 

Residential mortgage loans available-for-sale

Substantially all of the loans originated by us are sold in the secondary mortgage market within a short period of time after origination, generally within 30 days. At June 30, 2022 and December 31, 2021, residential mortgage loans available-for-sale had an aggregate fair value of $553.8 million and $947.1 million, respectively, and an aggregate outstanding principal balance of $553.9 million and $924.5 million, respectively. Net gains from the sale of mortgages were $45.1 million and $56.7 million for the three months ended June 30, 2022 and 2021, respectively, and $97.5 million and $134.2 million for the six months ended June 30, 2022 and 2021, respectively, and have been included in Financial Services revenues.

Derivative instruments and hedging activities

We are party to interest rate lock commitments ("IRLCs") with customers resulting from our mortgage origination operations. At June 30, 2022 and December 31, 2021, we had aggregate IRLCs of $1.5 billion and $337.9 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 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 June 30, 2022 and December 31, 2021, we had unexpired forward contracts of $1.7 billion and $903.0 million, respectively, and whole loan investor commitments of $316.2 million and $310.0 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.

11


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
There are no credit-risk-related contingent features within our derivative agreements, and counterparty risk is considered minimal. Gains and losses on IRLCs and residential mortgage loans available-for-sale 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 60 days. The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted):

 
 June 30, 2022December 31, 2021
 Other AssetsAccrued and Other LiabilitiesOther AssetsAccrued and Other Liabilities
Interest rate lock commitments$23,024 $3,185 $8,582 $33 
Forward contracts10,418 3,651 757 1,336 
Whole loan commitments997 548 384 4 
$34,439 $7,384 $9,723 $1,373 

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.

At June 30, 2022 and December 31, 2021, we reported $199.9 million and $208.4 million, respectively, of assets in-scope under ASC 326, "Financial Instruments - Credit Losses". These assets consist primarily of insurance receivables, contract assets related to insurance brokerage commissions, and vendor rebate receivables. Counterparties associated with these assets are generally highly rated. Allowances on the aforementioned in-scope assets were not material as of June 30, 2022.

New accounting pronouncements

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, as amended by ASU 2021-01 in January 2021, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the cessation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. We are currently evaluating the effect that such new guidance will have on our consolidated financial statements and related disclosures, but do not expect that the adoption will have a material impact on our consolidated financial statements or related disclosures.

2. Inventory

Major components of inventory were as follows ($000’s omitted): 
June 30,
2022
December 31,
2021
Homes under construction$5,916,047 $4,225,309 
Land under development4,028,971 4,091,015 
Raw land784,426 731,245 
$10,729,444 $9,047,569 

We capitalize interest cost into inventory during the active development and construction of our communities. In all periods presented, we capitalized substantially all Homebuilding interest costs into inventory because the level of our active inventory exceeded our debt levels. Information related to interest capitalized into inventory is as follows ($000’s omitted):
12


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
Interest in inventory, beginning of period$158,670 $193,352 $160,756 $193,409 
Interest capitalized31,338 31,476 62,921 66,103 
Interest expensed(38,454)(39,395)(72,123)(74,079)
Interest in inventory, end of period$151,554 $185,433 $151,554 $185,433 

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 reduces 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 expense, net. We recorded $4.5 million and $1.9 million of such charges during the three months ended June 30, 2022 and 2021, respectively, and $8.0 million and $3.2 million during the six months ended June 30, 2022 and 2021, respectively.

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 June 30, 2022 or December 31, 2021 because we determined that we were not any VIE's primary beneficiary. Our maximum exposure to loss related to these VIEs is generally limited to our deposits and pre-acquisition costs under the land option agreements. The following provides a summary of our interests in land option agreements as of June 30, 2022 and December 31, 2021 ($000’s omitted):

 
 June 30, 2022December 31, 2021
 Deposits and
Pre-acquisition
Costs
Remaining Purchase
Price
Deposits and
Pre-acquisition
Costs
Remaining Purchase
Price
Land options with VIEs$209,767 $2,824,818 $179,604 $2,329,187 
Other land options259,461 3,674,049 225,318 3,128,691 
$469,228 $6,498,867 $404,922 $5,457,878 

Land-related charges

Our evaluations for land impairments, net realizable value adjustments, and write-offs of deposits and pre-acquisition costs are based on our best estimates of the future cash flows of 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.

13


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments:
Northeast:Connecticut, Maryland, Massachusetts, New Jersey, Pennsylvania, 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, Washington

We also have a reportable segment for our Financial Services operations, which consist principally of mortgage banking, title, and insurance brokerage operations that operate generally in the same markets as the Homebuilding segments.

Operating Data by Segment
($000’s omitted)
 Three Months EndedSix Months Ended
June 30,June 30,
 2022202120222021
Revenues:
Northeast$248,454 $285,874 $412,785 $462,342 
Southeast587,743 517,256 1,115,941 954,034 
Florida992,737 791,564 1,760,707 1,416,805 
Midwest553,767 465,590 1,006,441 832,403 
Texas573,763 470,294 1,020,036 844,416 
West886,947 737,877 1,630,973 1,382,124 
3,843,411 3,268,455 6,946,883 5,892,124 
Financial Services82,775 91,029 166,918 197,150 
Consolidated revenues$3,926,186 $3,359,484 $7,113,801 $6,089,274 
Income (loss) before income taxes:
Northeast$59,971 $53,300 $87,370 $79,194 
Southeast152,257 93,444 278,389 164,766 
Florida247,435 147,833 408,129 249,040 
Midwest86,550 70,804 151,251 123,668 
Texas134,133 84,388 217,849 150,037 
West186,561 131,070 319,872 229,902 
Other homebuilding (a)
(42,409)7,180 (79,062)(80,884)
824,498 588,019 1,383,798 915,723 
Financial Services40,075 51,454 80,668 117,803 
Consolidated income before income taxes$864,573 $639,473 $1,464,466 $1,033,526 

(a)Other homebuilding includes the amortization of intangible assets and capitalized interest and other items not allocated to the other segments. Other homebuilding also includes insurance reserve reversals of $49.1 million and $55.2 million for the three and six months ended June 30, 2021, respectively (see Note 8), and a loss on debt retirement of $61.5 million in the six months ended June 30, 2021 (see Note 4).
14


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Land-related charges (a):
Northeast$100 $18 $202 $134 
Southeast1,933 883 3,835 1,339 
Florida641 302 1,612 433 
Midwest944 438 1,102 492 
Texas294 263 534 791 
West591 (19)728 65 
Other homebuilding    
$4,503 $1,885 $8,013 $3,254 

(a)    Land-related charges include land 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.

 Operating Data by Segment
($000's omitted)
June 30, 2022
 Homes Under
Construction
Land Under
Development
Raw LandTotal
Inventory
Total
Assets
Northeast$385,827 $226,922 $49,687