PHM 10-K & 10-Q changes, risk factors and insider trading

A large majority of our customers finance their home purchases through mortgage loans, many through Pulte Mortgage. Increases in interest rates can adversely affect the market for new homes, as potential homebuyers may be less willing or able to pay the increased monthly costs resulting from higher interest rates or to obtain mortgage financing. Up until 2022, mortgage interest rates in recent years had been at or near historic lows, thereby making new homes more affordable. However, in the second quarter of 2022, in response to the Federal Reserve's increases to the federal funds rate as part of their effort to reduce inflation, mortgage rates increased, reaching their highest levels since 2008. Despite recent interest rate cuts by the Federal Reserve beginning in September 2024, home mortgage interest rates have remained elevated. Ongoing volatility in interest rates may negatively impact our operations and financial results.

For example, beginning in 2006 and continuing through 2011, the U.S. housing market was unfavorably impacted by severe weakness in new home sales attributable to, among other factors, weak consumer confidence, tightened mortgage standards, significant foreclosure activity, a more challenging appraisal environment, higher than normal unemployment levels, and significant uncertainty in the global economy. During this period, we incurred significant losses, including impairments of our land inventory and certain other assets, and some aspects of the housing industry have yet to return to pre-2007 production levels. Beginning in 2020, the COVID-19 pandemic also impacted our business and resulted in a significant slowdown in our business and impacts to our financial results, followed by historically high inflation, increased interest rates and weaker economic conditionsconditions, all of which impacted the affordability of our homes and consumer sentiment. In addition, over the last three years, the U.S. economy experienced significant inflation and mortgage and other interest rate increases, which negatively impacted home affordability and consumer sentiment and created some volatility in demand for new housing.

Inflation can adversely affect us by increasing costs of land, materials, and labor. In addition, significant inflation is often accompanied by higher interest rates, which recently have had a negative impact on demand for our homes.homes in recent years. In an inflationary environment like the one we have experienced in recentyears years,following the COVID-19 pandemic, economic conditions and other market factors may make it difficult for us to raise home prices enough to keep up with the rate of inflation, which could reduce our profit margins or reduce the number of consumers who can afford to purchase one of our homes. Heightened labor and material prices resulting from inflation havecan increasedincrease operational costs inas recent years.well. If theinflation inflationary environment in recent years continuespersists or worsens,increases, we may not be able to adjust the pricing we charge for homes to offset these increased costs in the future,costs, which would adversely impact our results of operations and cash flows. In addition, inflation through the broader economy, especially when combined with higher mortgage interest rates, hascan negatively impactedimpact home affordability and consumer sentiment and created somesignificant volatility in demand for new housing.

Supply shortages and other risks related to the demand for skilled labor and building materials increasedcould increase costs and delayeddelay deliveries and could continue to do so.deliveries.

The homebuilding industry is highly competitive for skilled labor. Labor shortages have continued tocould limit the availability of construction labor. Additionally, the supply of certain building materials, especially lumber, wood-based materials such as roof and floor trusses and oriented strand boards, steel, resin, concrete, copper, and petroleum-based materials, iscould be limited and has been impacted by thefactors combinationsuch ofas strong consumer demand, disruptions in the global supply chain, and major weather events at the point of manufacture of certain products. Supply constraints can also be further exacerbated by government policies that make it more difficult and/or expensive for suppliers to produce materials needed for our business. For instance, changes in laws, government regulations, or enforcement priorities, such as the imposition of tariffs (in particular on materials imported from Canada or Mexico) or other import or export restrictions, penalties or sanctions, including modification or elimination of international agreements covering trade or investment, or changes in immigration laws and/or their enforcement, could result in higher component costs, tighter overall labor conditions and a shortage of skilled tradespeople, which could in turn adversely affect our business. Several of these factors, along with the consolidation of ownership of the source of supply for certain building materials, havecould resultedresult in increases to the prices of some materials. Increased costs and shortages of labor and materials can cause increases in construction costs, and construction delays. We may not be able to pass on increases in construction costs to customers and generally are unable to pass on any such increases to customers who have already entered into sales contracts as those sales contracts generally fix the price of the home at the time the contract is signed, which may be well in advance of the construction of the home. Sustained increases in construction costs may, over time, erode our margins, and pricing competition may restrict our ability to pass on any such additional costs, thereby decreasing our margins.

The homebuilding industry is highly competitive for suitable land. The availability of finished and partially finished lots and undeveloped land for purchase that meet our internal criteria depends on a number of factors outside our control, including land availability in general,availability, competition with other homebuilders and land buyers for desirable property, inflation in land prices, zoning, allowable housing density, and other regulatory requirements. Should suitable lots or land become less available, the number of homes we may be able to build and sell could be reduced, and the cost of land could be increased, perhaps substantially, which could adversely impact our results of operations.

The market value of land can fluctuate significantly as a result of changing market conditions, and the measures we employ to manage inventory risk may not be adequate to insulate our operations from a severe drop in inventory values. We acquire land for expansion into new markets and for replacement of land inventory and expansion within our current markets. If housing demand decreases below what we anticipated when we acquired our inventory, weour mayprofitability notcould be ableadversely to make profits similar to what we have made in the past,affected, we may experience less-than-anticipated profits, and/or we may not be able to recover our costs when we sell and build homes. When market conditions are such that land values are not appreciating, land option or land banking arrangements previously entered into may become less desirable, at which time we may elect to forgo deposits and pre-acquisition costs and terminate the agreements. In the face of adverse market conditions, we may have substantial inventory carrying costs, we may have to write down our inventory to its fair value, and/or we may have to sell land or homes at a loss. At times we have been required to record significant write-downs of the carrying value of our land inventoryinventory, and we have elected not to exercise options to purchase land, even though that required us to forfeit deposits and write-off pre-acquisition costs. If market conditions were to deteriorate in the future, we could elect to not to execute additional options and again be required to record significant write downswrite-downs to our land inventory, which would decrease the asset values reflected on our balance sheet and could materially and adversely affect our earnings and our shareholders' equity.

Our development, integration, and use of artificial intelligence (“AI”) technology in our operations remains in the early phases. We have started to assess the use of AI technology to drive productivity and analyze data. While we aim to develop, integrate, and use AI responsibly, we may ultimately be unsuccessful in identifying or resolving issues, such as accuracy,accuracy limitations, cybersecurity risks, unintended biases, and discriminatory outputs, before they arise. AI is a new and emerging technology in early stages of commercial use and presents a number of risks inherent in its use, including, but not limited to, ethical considerations, public perception, intellectual property protection, regulatory compliance, privacy concerns, and data security, all of which could have a material adverse effect on our business, results of operations, and financial position. AsIn a result,addition, we cannot predict future developments in AI andor relatedtheir impactspotential toimpact on our business and our industry. If we are unable to successfully and accurately develop, integrate, and use AI technology, as well as address the risks and challenges associated with AI, our business, results of operations, and financial position could be negatively impacted. Further, if our competitors are able to develop or leverage AI technologies more effectively than we do, including to better anticipate customer preferences, improve operational efficiency, or enhance products or services, our competitive position could be adversely affected. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, our reputation, business, financial condition, and results of operations may be adversely affected.

Our operations are subject to building, safety, environmental, and other regulations imposed and enforced by various federal, state, and local governing authorities. New housing developments may also be subject to various assessments for schools, parks, streets, and other public improvements. These assessments have increased over recent years as other funding mechanisms have decreased, causing local governing authorities to seek greater contributions from homebuilders. Although recently imposed tariffs have not had a material impact on our construction costs, newly imposed or increased tariffs, duties and/or trade restrictions on imported materials and goods that are used in connection with the construction and delivery of our homes may raise our costs for these items or for the products made with them. All of these factors have caused and could in the future cause an increase in the effective cost of our homes.

We also are subject to a variety of local, state, and federal laws and regulations concerning protection of health, safety, and the environment, including laws and regulations relating togoverning the disclosure of certain information relating to the environmental impact of our operations. The impact of environmental laws on our operations varies depending upon the prior uses of the building site or adjoining properties and may be greater in areas with less supply where undeveloped land or desirable alternatives are less available. These matters may result in delays, may cause us to incur substantial compliance, remediation and other costs, and could prohibit or severely restrict development and homebuilding activity in environmentally sensitive regions or areas. More stringent requirements could be imposed in the future on homebuilders, developers, and financial services companies, thereby increasing the cost of compliance.

As a homebuilder, we are subject to home warranty, construction defect, and other claims arising in the ordinary course of business. We rely on subcontractors to perform the actual construction of our homes and, in some cases, to select and obtainprocure building materials. Despite our detailed specifications and quality control procedures, in limited cases, subcontractors may use improper construction processes or defective materials. In such cases, it can result in the need to perform repairs to homes. We record warranty and other reserves relating to the homes we sell based on historical experience in our markets.

We have, and require our subcontractors to have, general liability, property, errors and omissions, workers compensation, and other business insurance. These insurance policies protect us against a portion of our risk of loss from claims, subject to certain self-insured per occurrence and aggregate retentions, deductibles, and available policy limits. In certain instances, we may offer our subcontractors the opportunity to purchase insurance through one of our captive insurance subsidiaries or participate in a project-specific insurance program sponsored by us.program. Policies issued by our captive insurance subsidiaries represent self-insurance of thesethose risks by us. We reserve for costs to cover our self-insured and deductible amounts under these policies and for any costs of claims and lawsuits based on actuarial analyses of our historical claims, which include estimates of claims incurred but not yet reported. Our insurance coverage, our subcontractor arrangements, and our reserves may not be adequate to address all our warranty and construction defect claims in the future, and there is typically a lag between our payment of claims and reimbursements from applicable insurance carriers.carriers or other third parties. Contractual indemnities can be difficult to enforce, we may be responsible for applicable self-insured retentions, and some types of claims may not be covered by insurance or may exceed applicable coverage limits. Additionally, the coverage offered by and the availability of general liability insurance for construction defects have become more costly and limited. There can be no assurance that coverage will not be further restricted, become more costly, or even become unavailable in the future. Additionally, we are exposed to counterparty default risk related to our subcontractors, our insurance carriers, and our subcontractors’ insurance carriers.

Our Homebuilding operations are located in many areas that are subject to natural disasters and severe weather. The occurrence of natural disasters or severe weather conditions can delay new home deliveries, increase costs by damaging inventories, reduce the availability of materials, and negatively impact the demand for new homes in affected areas. For instance, in recent years, hurricanes have caused significant disruptions in Florida and our Southeastern markets but did not result in a material impact to our results of operations. In addition, the increased prevalence of forest fires in recent years in our western markets has caused disruptions to our sales operations and development delays, and significant weather events have contributed to plant closures and transportation delays that have exacerbated stress on our supply chain. Furthermore, if our insurance does not fully cover losses or business interruptions or losses resulting from these events, our earnings, liquidity, or capital resources could be adversely affected.

The impact of climate change and climate change or other governmental regulation may adversely impact our business.

The capital and credit markets can experience significant volatility. We may need credit-related liquidity for the future development of our business and other capital needs. Without sufficient liquidity, we may not be able to purchase additional land or develop land, which could adversely affect our financial results. At December 31, 2024,2025, we had cash, cash equivalents, and restricted cash of $1.7$2.0 billion as well as $928.9$892.9 million available under our revolving credit facilityfacility, which was amended effective February 4, 2026 to extend its maturity date to February 4, 2031, increase the total committed capacity to $1.75 billion, and expand the uncommitted accordion feature to $750 million, providing for potential capacity of $2.5 billion, subject to certain conditions and the availability of additional bank commitments ("Revolving Credit Facility"). However, our internal sources of liquidity and Revolving Credit Facility may prove to be insufficient, and, in such case, we may not be able to successfully obtain additional financing on terms acceptable to us, or at all.

As of December 31, 2024,2025, we had deferred tax assets of $77.4$70.6 million, against which we provided a valuation allowance of $22.4$21.4 million. The ultimate realization of our deferred tax assets is dependent upon generating future taxable income. While we have recorded valuation allowances against certain of our deferred tax assets, the valuation allowances are subject to change as facts and circumstances change. The value of our deferred tax assets and liabilities are also dependent upon the tax rates expected to be in effect at the time they are realized. A change in enacted corporate tax rates in our major jurisdictions, especially the U.S. federal corporate tax rate, would change the value of our deferred taxes, which could be material.

We are beginningin the process of a multi-year implementation of a new enterprise resource planning systemsystems (“ERP”). The ERP implementation will require the integration of the new ERP systems with multiple new and existing information systems and business processes,processes and will be designed to accurately maintain our books and records and provide information to our management teams important to the operation of the business. Our ERP implementation will continue to require ongoing maintenance and monitoring. Conversion from our old systemsystems to the new ERP systems may cause inefficiencies until the ERP issystems are stabilized and mature. The implementation of our new ERP systems will mandate new procedures and certain modifications to our disclosure controls and procedures and internal control over financial reportingreporting, and it will take time for such procedures and controls to become mature in their operation. If we are unable to adequately implement and maintain procedures and controls relating to our new ERP,ERP systems, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired and impact our assessment of the effectiveness of our internal controls over financial reporting. The ERP implementation is costly and may not ultimately result in the operational benefits to the Company that are currently anticipated.

Our business wascould be materially and adversely disrupted by the outbreak and worldwide spread of contagious diseases, including epidemics, pandemics, or other serious public health threats, such as the COVID-19 andpandemic, couldas bewell materially and adversely disruptedas by another epidemic or pandemic like COVID-19, or similar public threat, orthe fear of such anevents. event,Public andhealth theemergencies may result in measures thattaken by international, federal, statestate, and local governments, agencies, law enforcementenforcement, and/ or health authoritiesauthorities, implementincluding totravel addressrestrictions, it.quarantines, business closures, workforce limitations, and other regulatory or emergency actions. These measures could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period of time.

DespiteIn these2025, consumer demand weakened due to ongoing affordability challenges, resulting from elevated mortgage interest inrates new homes remained at high levels in 2024, aided by a continuing limited supply of existing home inventory in combination with the market slowly adjusting to aand higher interesthousing ratecosts, environment,as whichwell has resulted in increasedas volatility in ourother new order pace over 2023macroeconomic and 2024.geopolitical conditions, including higher job losses and weakened consumer confidence. We have responded to these affordability challengesconditions by adjusting production cadence and sales prices where necessary and focusing sales incentives on discounts on spec inventory (houses without customer orders) and closing cost incentives, especially mortgage interest rate buydowns. TheseDespite strategicthese decisionsefforts, contributed to 2% growth innet new orders fromin 2023units todecreased 2024 but also drove a slight decrease4% in gross2025 margins from 2023 toversus 2024.

Although higher mortgage interest rates may persist for some time, the limited supply of existing homes for sale, continuing low levels of unemployment, and demographics supporting housing demand remain favorable. We expect that many homebuyers will continue to face affordability challenges, so our sales paces may remain volatile on a monthly basisbasis. andIn response, we expect our sales incentives to remain elevated.elevated and for our pace of house starts to remain dynamic. Additionally, we continuedcontinue to face pressures in 2024pressure in the cost of land acquisition and development and the cost and availability of construction labor.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. This is evidenced in our gross margin from home sales, which decreased to 26.3% in 2025 versus 28.9% in 2024. Additionally, gross margin from home sales decreased each quarter in 2025, from 27.5% in the first quarter of 2025 to 24.7% in the fourth quarter of 2025. These decreases are primarily due to the aforementioned elevated sales incentives combined with higher land costs. While we expect to continue to generate healthy gross margins, they may decline somewhat in future periods as a result of these factors.

WeAlthough elevated mortgage interest rates and volatile macroeconomic and geopolitical conditions may persist for some time, we believe the demographics supporting housing demand remain focusedfavorable onover 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 we are taking a measured approach to our capital allocation strategy toas effectivelywe respondanticipate to futurecontinued volatility in demand. Accordingly, we are focused on protecting liquidity and closely managing our cash flows while also continuing to focus onemphasize shareholder returns, including the following actions:

–Producing sufficient levels of spec inventory (houses without customer orders) to service buyers seeking to close within 30 to 90 days;

–Maintaining a focus on shareholder return through share buybacksdividends and dividends,share buybacks, including aan 10%18% increase in our dividends from $0.20$0.22 to $0.22$0.26 per share effective with our January 20252026 dividend payment and approving an additional $1.5 billion share repurchase authorization effective January 2025, bringing our total remaining share repurchase authorization to $1.0 billion as of December 31, 2025, after $1.2 billion of share repurchases in 2025; and –Maintaining a modest leverage profile and ample liquidity.

We believe our strategic approach with respect to balancing sales incentives,price advertising,with sales pace, including actions taken related to sales incentives and our production cadencecadence, will enable us to meet consumer demand at the selling prices necessary to turn our inventory, maintain market share, and generate healthy returns. And weWe 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 and continued profitability and financial strength.

Home sale revenues for 20242025 were higherlower than 20232024 by $1.7$575.0 billion,million, or 11%.3%. The increasedecrease was attributable to a 9%5% increasedecrease in closingsclosings, combinedpartially withoffset by a 2% increase in average selling price. The increasedecrease in closings duringin 20242025 was primarily attributable to lower net new orders in 2025 and a strongweaker backlog,order backlog entering the year, partially offset by a higher community count and improved production cycle times,times. andAverage initiativesselling toprice prioritizeincreased quick move-in spec homes to satisfy customer desire to quickly close on homesprimarily due to the volatile interest rate environmentproduct and togeographic ensuremix, anincluding efficienta productionslightly cadencehigher mix of homes. The increase in average selling price during 2024 reflected the impacts of consumer demand, persistent inflation, and a slight mix shiftclosings toward our Westmove-up buyers and in our Northeast segment, both of which carriescarry a higher average selling price, partially offset by ahigher slightsales increase in the mix of first-time buyer homes, which typically carry a lower average selling price.incentives.

SG&A as a percentage of home sale revenues was 7.6%9.4% and 8.4%7.6% in 20242025 and 2023,2024, respectively. The gross dollar amount of our SG&A increased $8.6$252.7 million, or 1%,19%, in 20242025 compared with 2023.2024. This increase resulted primarily from overhead costs to support increased production volumes coupled with higher compensation costs, partially offset by insurance reserve reversals of $42.3 million in 2025 compared to $333.9 million in 2024,2024. comparedAdditionally, SG&A in 2025 reflects headcount and technology costs to insurancesupport reserveongoing reversalsproduction ofvolumes $130.8and millioninvestments infor 2023.future growth. We expect to continue managing and balancing our overhead costs consistent with the demand environment.

(a) Includes a gain of $17.5 million in 2024 related to the sale of a non-homebuilding property.

Net new orders in units increaseddecreased 2%4% in 20242025 compared with 2023,2024, while net new orders in dollars increaseddecreased by 8%6% compared with 2023.2024. The increaseddecreased net new order volume and dollars in 20242025 waswere primarily due to alower 4%order increasevolume in averageour activeTexas communities. The increase in net new orders in dollars was primarily attributable to the higher unit volume along with geographic mix, including ourand West segment, which carries a higher average selling price.segments. The annual cancellation rate (canceled orders for the period divided by gross new orders for the period) decreased towas 15% in 2024each comparedof to 16% in 2023. Cancellation rates began to increase in 20222025 and have now returned to historical levels.2024. Ending backlog dollars, which represents orders for homes that have not yet closed, decreased 11%19% in 20242025 compared with 2023,2024 primarilydue as a result of decreased demand into the secondaforementioned halflower oforder 2024 as mortgage interest rates increased and improved construction cycle times.volume.

The number of homes in production at December 31, 20242025 was 2%14% lower compared to December 31, 2023.2024. This decrease was primarily due to a decreased number of sold homes due to lower backlogorder volumes and improved production cycle times, which reduces the length of time a home sits in inventory. The number of unsold homesremains under construction increased in 2024, which reflects our strategic decision to increase starts of spec units in response to buyer demand for quick move-in homes. We continue to carefully monitor our production levels heading into the spring 2025 selling season and expect to lower the percentage of our inventory that is unsold by the end of 2025.construction.

(db) Other homebuilding includes income from unconsolidated entities, interest, the amortization of intangible assets,impairment of intangible assets, the amortization of capitalized interest, and other items not allocated to the operating segments, and the elimination of internal capital charges allocated to the operating segments. Also includes insurance reserve reversals of $333.9$42.3 million and $130.8$333.9 million in 20242025 and 2023,2024, respectively (Note 11), goodwill impairment of $28.6 million in 2025 (Note 1), impairment of property and equipment of $49.6 million in 2025 (Note 1), and a gain of $39.5 million in 2024 related to the sale of our minority interest in a joint venture.

* (a)Land-related charges include land impairments, net realizable value adjustments for land held for sale, and write-offs of deposits and pre-acquisition costs. Other homebuilding consists primarily of write-offs of capitalized interest resulting from land-related charges. See Notes 2 and 3 to the Consolidated Financial Statements for additional discussion of these charges.

For 2024,2025, Northeast home sale revenues increased 10%16% compared with 20232024 due to a 7%9% increase in closings combined with a 3%7% increase in average selling price. The increase in closings wasoccurred mixedacross amongthe majority of markets, while the increase in average selling price occurred across the majority ofall markets. Income before income taxes increased 9%,28%, primarily due to increased revenues,revenues whichacross werethe mixedmajority amongof markets, and increasedhigher gross margins across all markets. Net new orders decreased across the majority of markets. Net new orders increased across the majority of markets.

For 2024,2025, Southeast home sale revenues increased 8%3% compared with 20232024 due to a 10%5% increase in closingsaverage selling price partially offset by 1%a 2% decrease in closings. The increase in average selling price.price Thewas increasemixed among markets, while 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 increaseddecreased 5%,11% primarily due to increasedlower revenuesgross margins across the majority of markets and increased gross margins, which were mixed amongall markets. Net new orders decreasedincreased across the majority of markets.

For 2024,2025, Florida home sale revenues increaseddecreased 1%9% compared with 20232024 due to a 2%6% increasedecrease in closings partiallycombined offset bywith a 1%4% decrease in average selling price. The increasedecrease in closings was mixed among markets, while the decrease inand average selling price occurred across the majority of markets. Income before income taxes decreased 6%,27%, primarily due to lower revenue across the majority of markets and lower gross margins across all markets. Net new orders increased across the majority of markets. Net new orders decreased across the majority of markets.

For 2024,2025, Midwest home sale revenues increased 24%5% compared with 20232024 due to a 20%6% increase in closings combinedpartially withoffset by a 3%slight increasedecrease in average selling price. The increase in closings occurredand across all markets while the increasedecrease in average selling price occurred across the majority of markets. Income before income taxes increased 38%,10%, primarily due to increased revenues and gross margins across all markets. Net new orders increased across the majority of markets. The decrease in net new orders was mixed among markets.

For 2024,2025, Texas home sale revenues increaseddecreased 5%22% compared with 20232024 due to a 3%20% increasedecrease in closings combined with a 2% increasedecrease in average selling price. The increasedecrease in closings occurred across the majority ofall markets, while the increasedecrease in average selling price was mixedprimarily amongdue markets.to decreases in Central Texas. Income before income taxes decreased 7%,53%, primarily due to decreased gross margins inacross Centralthe Texas.majority Theof decreasemarkets. in netNet new orders wasdecreased mixedacross amongall markets.

For 2024,2025, West home sale revenues increaseddecreased 24%1% compared with 20232024 primarily due to an 18%7% increasedecrease in closings combinedpartially withoffset by a 5%6% increase in average selling price. The increasedecrease in closings occurred across allthe majority of markets while the increase in average selling price occurred across the majority of markets. Income before income taxes increaseddecreased 45%,31%, primarily due to increased revenues anddecreased gross marginsmargin across allthe markets. Results for 2024 also include a gainmajority of $10.7 million related an individual property sale in Northern California.markets. Net new orders increaseddecreased across allthe majority of markets.

The increasedecrease in income before income taxes for 20242025 as compared with 20232024 was primarily due to thelower increaseinsurance inagency home closings in our Homebuilding operations, as well as higher loan origination volume and revenues per loan in our mortgage operations.commissions.

Our effective income tax rate was 23.0%23.8% and 24.6%23.0% for 20242025 and 2023,2024, respectively. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense.expense and federal tax credits. See Note 8 for additional discussion of our effective income tax rate.

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. Though we experiencedgenerated significant improvementcash flows from operations in 20232024 and 2024,2025, as we increase the elongationnumber of ourhomes under production cycle in recentthe yearsfuture, hasthis requiredwill require a greater investmentuse of cash in our homes under production.cash. Additionally, we plan to continue our dividend payments and repurchases of common stock. In August 2025,2026, we need to repay or refinance Pulte Mortgage's master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement"). 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 twelve months, we will need to repay or refinance our Revolving Credit Facility, which matures in June 2027, and our unsecured senior notes, the next tranche of which becomes due in 2026. We may from time to time repurchase our unsecured senior notes through open market purchases, privately negotiated transactions, or otherwise.

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $35.8$47.2 million at December 31, 2024.2025. These notes have maturities ranging up to five4 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 5%.9%.

WeAs maintainof December 31, 2025, we maintained a revolving credit facility ("Revolving Credit Facility") maturingscheduled to mature in June 2027 that haswith a maximum borrowing capacity of $1.3 billion and contains an uncommitted accordion feature that could increase the capacity to $1.8 billion, subject to certain conditions and availability of additional bank commitments. Effective February 4, 2026, we amended and restated the Revolving Credit Facility to (i) extend the maturity date to February 4, 2031, (ii) increase total committed capacity to $1.75 billion, and (iii) expand the uncommitted accordion feature to $750 million, providing for potential capacity of $2.5 billion, subject to certain customary conditions and additional lender commitments. The Revolving Credit Facility also provides for the issuance of letters of credit that reduce the available borrowing capacity under the Revolving Credit Facility, up to the maximum borrowing capacity. The interest rate on borrowings under the Revolving Credit Facility may be based on either the Secured Overnight Financing Rate or a base rate plus an applicable margin, as defined therein. The Revolving Credit Facility contains financial covenants that require us to maintain a minimum Tangible Net Worth and a maximum Debt-to-Capitalization Ratio (as each term is defined in the Revolving Credit Facility). As of December 31, 2024,2025, we were in compliance with all covenants and requirements. Outstanding balancesamounts and other obligations under the Revolving Credit Facility are guaranteed by certain of our wholly-owned subsidiaries.

Pulte Mortgage maintains a master repurchase agreement with third-party lenders entered into in August 20232025 (the "Repurchase Agreement") that matures on August 13,12, 2025.2026. The maximum aggregate commitment was $675.0$625.0 million at December 31, 2024 and decreased to $650.0 million at January 14, 2025, which continues until maturity. The Repurchase Agreement also contains an accordion feature that could increase the commitment by $50.0 million above its active commitment level. Borrowings under the Repurchase Agreement are secured by residential mortgage loans available-for-sale. The Repurchase Agreement contains various affirmative and negative covenants applicable to Pulte Mortgage, including quantitative thresholds related to net worth, net income, and liquidity. At December 31, 2024,2025, Pulte Mortgage had $526.9$532.3 million outstanding at a weighted average interest rate of 6.13%,5.51%, and $148.1$92.7 million of remaining capacity under the Repurchase Agreement. Pulte Mortgage was in compliance with all of its covenants and requirements as of such dates.

We declared quarterly cash dividends totaling $171.4$183.0 million and $149.8$171.4 million in 20242025 and 2023,2024, respectively, and repurchased 10.110.6 million and 13.810.1 million shares in 20242025 and 2023,2024, respectively, for a total of $1.2 billion and $1.0$1.2 billion in 20242025 and 2023,2024, respectively. On January 29, 2024, the Board of Directors increased our share repurchase authorization by $1.5 billion. At December 31, 2024, we had remaining authorization to repurchase $682.9 million of common shares. On January 29, 2025, the Board of Directors increased our share repurchase authorization by an additional $1.5 billion.billion, which was publicly announced on January 30, 2025. At December 31, 2025, we had remaining authorization to repurchase $982.9 million of common shares.

Net cash used in investing activities totaled $80.4 million in 2025, compared with $94.5 million in 2024, compared with $129.1 million in 2023.2024. The 20242025 cash outflows primarily reflect capital expenditures of $118.5$122.7 million related to our ongoing investment in new communities, construction operations, and information technology applications.applications, partially offset by distributions of capital from unconsolidated entities of $63.7 million.

Net cash used in investing activities in 20232024 primarily reflected $23.4 million of investments in unconsolidated entities primarily in support of our land development activities andreflects capital expenditures of $92.2$118.5 million related to our ongoing investment in new communities, construction operations, and information technology applications.

Net cash used in financing activities for 20232024 resulted primarily from the repurchase of 13.810.1 million common shares for $1.0$1.2 billion under our repurchase authorization andauthorization, cash dividends of $142.5$167.7 million, and repayments of debt of $355.8 million.

Adjustments to reserves are recorded in the period in which the change in estimate occurs. During 20242025 and 2023,2024, we reduced general liability reserves by $333.9$42.3 million and $130.8$333.9 million, respectively, as a result of changes in estimates resulting from actual claim experience observed being less than anticipated in previous actuarial projections. The changes in actuarial estimates were driven by changes in actual claims experience that, in turn, impacted actuarial estimates for potential future claims. These changes in actuarial estimates did not involve any significant changes in actuarial methodology but did impact the development of estimates for future periods, which resulted in adjustments to the IBNR portion of our recorded liabilities. There were no material adjustments to individual claims. Rather, the adjustments reflect an overall lower level of losses related to construction defect claims in recent years as compared with our previous experience. We attribute the favorable experience in more recent years to a variety of factors, including improved construction techniques, rising home values, and increased participation from our subcontractors in resolving claims. The cumulative effect of these factors, as evidenced by the favorable claims experience for an extended period, have resulted in our actuarial estimates placing less weight on older, higher cost policy years and relatively more weight on more recent, lower cost policy years.

Demand conditions to start 2026 remained challenging through the second quarter of 2026 as the result of elevated mortgage interest rates, higher housing costs, and general economic uncertainty. As volatilityVolatility in geopolitical conditions increasedconditions, in March,part itdue 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 focusing sales incentives on discounts on spec inventory (houses without customer orders), closing cost incentives, and mortgage interest rate buydowns. These pricing actions contributed to a 3%6% increase in net new orders in units, but lower average selling prices and gross marginsmargins, during the firstsecond quarter of 2026 compared to 2025.the prior year period. Closings decreased 7%8% in the firstsecond quarter of 2026 compared to 2025the 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 and are increasing our backlog of build-to-order production.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. 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 versusafter 27.5%sequential inquarterly declines since the first quarter of 2025, and gross margin from home sales decreased each quarter in 2025, ending the year at 24.7% in the fourth quarterbeginning 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.

–Updating the underwriting for our land option contracts prior to buying additional land, and we have made decisions to walk away from a limited number of land option agreements;

–Maintaining a focus on shareholder return through share buybacks and dividends, including $308.2$681.2 million of share repurchases in the first threesix 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;

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 andwhile continuedmaintaining profitability and financial strength.

Home sale revenues in the three and six months ended MarchJune 31,30, 2026 were lower than the prior year periodperiods by $441.8$460.9 million.million Theand 12%$902.6 million, respectively. In the three months ended June 30, 2026, the 11% decrease resulted primarily from aan 7%8% decrease in closings from the prior year periodperiod, combined with a 5%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 decreasedecreases in closings waswere primarily attributable to a lowerweaker 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 MarchJune 31,30, 2026 decreased primarily due to increasedproduct incentivesand ingeographic ourmix, combined with efforts to reduce our level of spec inventory.inventory during 2026.

Home sale gross margins were 24.4%25.0% and 24.7% in the three and six months ended MarchJune 31,30, 2026, respectively, compared with 27.5%27.0% and 27.2% in the three and six months ended MarchJune 31,30, 2025.2025, respectively. The lowerdecreases in home sale gross margins were primarily attributable to the aforementioned pricing actionsactions, we took in 2025 and 2026,including elevated sales incentives, and higherincreased land acquisition and development costs. We expect these factors to continue to impact our gross margins over the near term. Gross margins infor the first threesix months of 2026 were also unfavorably impacted by our efforts to reduce completed spec inventory to more appropriate levels.

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 salessale and other revenues contributed income of $2.2$10.8 million and $1.6$13.0 million for the three and six months ended MarchJune 31,30, 20262026, 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 as a percentage of home sale revenues was 11.5%10.1% and 10.7% in the three and six months ended MarchJune 31,30, 2026, respectively, compared with 10.5%9.1% and 9.8% for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The gross dollar amount of our SG&A decreased $13.0$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 threesix months ended MarchJune 31,30, 2026 compared with the prior year period. The decrease in gross dollars for the three and six months ended MarchJune 31,30, 2026 iswas primarily attributable to lower commissionsvariable costs associated with the decrease in closings.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,income (expense), net

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

Net new orders in units increased 3%6% while net new orders in dollars increased 2%5% in the three months ended MarchJune 31,30, 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 MarchJune 31,30, 2026 over the comparable prior year periodperiods 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 12%13% for both the three and six months ended June 30, 2026, and 15% and 14% for the three months ended March 31, 2026, and 13% for the threesix months ended MarchJune 31,30, 2025.2025, respectively. Ending backlog dollars, which represent orders for homes that have not yet closed, decreased 10%1% at MarchJune 31,30, 2026 compared with MarchJune 31,30, 2025.

The number of homes in production at MarchJune 31,30, 2026 was 13%6% lower than at MarchJune 31,30, 2025. This decrease was primarily due to lowerour orderfocus volumes,on areducing focusedthe reductionnumber of spec homes,homes and improved production cycle times, which reduces the length of time a home remains under construction.

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

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 MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we conducted our operations in 48 markets located throughout 26 states. For reporting purposes, our Homebuilding operations are aggregated into six reportable segments:

For the threesecond monthsquarter ended March 31,of 2026, Northeast home sale revenues decreased by 29%33% when compared with the prior year period due to a 23%27% decrease in closings combined with an 8% decrease in average selling price. The decrease in closings was due to the timing of projects in our Northeast Corridor and New England operations, while the decrease in average selling price occurred across allthe majority of markets. Income before income taxes decreased 59%50%, primarily due to lower revenues across all markets and lower gross margins across the majority of markets. Net new orders increased across allthe majority of markets.

For the threesecond monthsquarter ended March 31,of 2026, Southeast home sale revenues decreased 2%7% when compared with the prior year period due to a 2% decrease in closings combined with a 5% decrease in average selling price partially offset by a 3% increase in closings.price. The decrease in average selling price and the increase in closings occurred across the majority of markets, while the decrease in average selling price was mixed among markets. Income before income taxes decreased 28%25%, primarily due to lower gross margins across all markets combined with 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 threesecond monthsquarter ended March 31,of 2026, Florida home sale revenues decreasedincreased 6%1% when compared with the prior year period primarily due to ana 8%1% decreaseincrease in the average selling price partially offset by a 2%slight increasedecrease in closings. The decreaseincrease in average selling price and increasedecrease in closings occurred across the majority of markets. Income before income taxes decreasedwas 27%in primarilyline due to lower revenues acrosswith the majoritycomparable ofprior marketsyear and lower gross margins across all markets.period. Net new orders increased across all markets.

For the threesecond monthsquarter ended March 31,of 2026, Midwest home sale revenues decreased 9%8% when compared with the prior year period due to aan 10%8% decrease in closings partiallycombined offset bywith a 1%slight increasedecrease in average selling price. The decrease in closings andoccurred increaseacross the majority of markets while the decrease in average selling price occurredwas acrossmixed the majority ofamong markets. Income before income taxes decreased 15%14% primarily due to lower revenuesrevenues. The increase in net new orders occurred across the majority of markets. Net new orders decreased across the majority of markets.

For the threesecond monthsquarter ended March 31,of 2026, Texas home sale revenues decreased 23%12% when compared with the prior year period due to aan 17%8% decrease in closings combined with ana 8%4% decrease in average selling price. The decrease in closings and average selling price and the decrease in closings occurred across allthe majority of markets. Income before income taxes decreased 59%21% primarily due to lower revenues and gross margins across all markets. Net new orders decreased 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 threesecond monthsquarter ended March 31,of 2026, West home sale revenues decreased 17%20% when compared with the prior year period due to a 15%20% decrease in closings combined with a 2%slight decrease in average selling price. The decrease in closings and average selling price occurred across the majority of markets while the decrease in average selling price was mixed among markets. Income before income taxes decreased 49%56% primarily due to lower revenues and gross margins across the majority of markets. NetThe decrease in net new orders decreasedwas acrossprimarily theattributable majorityto ofour markets.Las Vegas and Arizona operations.

Total Financial Services revenues for the three and six months ended MarchJune 31,30, 2026 decreased 21%4% and 12%, respectively, compared with the samecomparable periodprior inyear 2025,periods, reflective of the lower homebuilding volumevolume. Insurance agency commissions reflect the evolving environment for home insurance as carriers adjust their premiums, geographic markets, and lowerproduct net gains from the sale of mortgages.coverages.

Income before income taxes in the three and six months ended MarchJune 31,30, 2026 decreased 65%13% and 36%, respectively, compared with the samecomparable periodprior inyear 2025periods asdue a result of theto lower revenues.revenues combined with higher expenses.

Our effective tax rate for the three and six months ended MarchJune 31,30, 2026 was 22.8%24.2% and 23.6%, respectively, compared with 23.2%24.6% and 24.0% for samethe periodcomparable inprior 2025.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 and federal tax credits.compensation.

At MarchJune 31,30, 2026, we had unrestricted cash and equivalents of $1.8$1.3 billion, restricted cash balances of $36.4$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 MarchJune 31,30, 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.

We had $1.8 billion and $1.6 billion of unsecured senior notes outstanding at MarchJune 31,30, 2026 and December 31, 2025, respectively. As of MarchJune 31,30, 20262026, no repayments are due until March 2031.

Other notes payable include non-recourse and limited recourse secured notes with third parties that totaled $38.4$37.4 million and $47.2 million at MarchJune 31,30, 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%.

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 MarchJune 31,30, 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 MarchJune 31,30, 2026, we had no borrowings outstanding, $348.1$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.

At MarchJune 31,30, 2026, aggregate outstanding debt of unconsolidated joint ventures was $44.4$45.1 million.

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 MarchJune 31,30, 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 MarchJune 31,30, 2026, Pulte Mortgage had $455.1$477.9 million outstanding at a weighted-average interest rate of 5.43%5.42% and $169.9$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.

In the threesix months ended MarchJune 31,30, 2026, we declared cash dividends totaling $50.2$99.5 million and repurchased 2.45.5 million shares under our share repurchase authorization for $308.2$681.2 million. In the threesix months ended MarchJune 31,30, 2025, we declared cash dividends totaling $44.7$88.7 million and repurchased 2.85.8 million shares under our share repurchase authorization for $300.0$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. At March 31, 2026, we had remaining authorization to repurchase $674.7 million of common shares. 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.

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 MarchJune 31,30, 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 MarchJune 31,30, 2026, we had outstanding letters of credit totaling $348.1$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 $3.0$3.1 billion at MarchJune 31,30, 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 MarchJune 31,30, 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 MarchJune 31,30, 2026, outstanding deposits totaled $735.2$717.4 million, of which $19.0$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 MarchJune 31,30, 2026 related to debt and commitments and contingencies, respectively.

Net cash provided by operating activities in the threesix months ended MarchJune 31,30, 2026 was $159.8$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 threesix months ended MarchJune 31,30, 2026 were primarily due to net income of $347.0$819.0 million and a net decrease in residential mortgage loans available-for-sale of $104.4$63.9 million, partially offset by a net increase in inventories of $376.4$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 threesix months ended MarchJune 31,30, 2025 was $134.2$421.7 million. The cash inflows from our operations for the threesix months ended MarchJune 31,30, 2025 were primarily due to net income of $522.8$1.1 million,billion, partially offset by a net increase in inventories of $270.6$533.0 million, which was primarily attributable to land acquisition, development, and house spend to support expected future growth.

Net cash used in investing activities in the threesix months ended MarchJune 31,30, 2026 was $24.9$87.8 million. These cash outflows primarily resulted from capital expenditures of $25.4$55.3 million related to our ongoing investments in new communities, facilities, and information technology applications.applications, along with $40.9 million of investments in unconsolidated entities.

Net cash used in investing activities in the threesix months ended MarchJune 31,30, 2025 was $39.7$39.2 million. These cash outflows primarily resulted from capital expenditures of $29.6$64.1 million related to our ongoing investments in new communities, facilities, and information technology applications.applications, partially offset by distributions of capital from unconsolidated entities of $39.4 million.

Net cash used in financing activities in the threesix months ended MarchJune 31,30, 2026 totaled $300.2$720.5 million. These cash outflows resulted primarily from repayments and redemptions of notes payable of $599.7$600.7 million, repurchases of 2.45.5 million common shares for $308.2$681.2 million under our share repurchase authorization, payments of $52.0$101.8 million in cash dividends, and net repayments of $77.3$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 threesix months ended MarchJune 31,30, 2025 totaled $472.3$768.9 million. These cash outflows resulted primarily from the repurchaserepurchases of 2.85.8 million common shares for $300.0$600.0 million under our share repurchase authorization, payments of $45.8$90.1 million in cash dividends, payments of $11.4$22.4 million related to consolidated inventory not owned, and net repayments of $100.1$28.5 million under the Repurchase Agreement.

As of MarchJune 31,30, 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, $348.1$343.2 million of letters of credit issued, and $1.4 billion of remaining capacity under its Revolving Credit Facility.

There have been no significant changes to our critical accounting estimates in the threesix months ended MarchJune 31,30, 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.