Investor Presentation
Constructing a High Returning Homebuilder
March 2024
Forward-Looking Statements
As a cautionary note, except for the historical information contained herein, this presentation contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these statements. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "plan," "project," "may," "can," "could," "might," "should," "will" and similar expressions identify forward-looking statements, including statements related to any potential impairment charges and the impacts or effects thereof, expected operating and performing results, planned transactions, planned objectives of management, future developments or conditions in the industries in which we participate and other trends, developments and uncertainties that may affect our business in the future.
Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; the impact of any changes to our strategy in responding to the cyclical nature of the industry or deteriorations in industry changes or downward changes in general economic or other business conditions, including any changes regarding our land positions and the levels of our land spend; economic changes nationally or in our local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; labor supply shortages and the cost of labor; the availability and cost of land and other raw materials used by us in our homebuilding operations; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; competition within the industries in which we operate; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities, slow growth initiatives and/or local building moratoria; the availability and cost of insurance covering risks associated with our businesses, including warranty and other legal or regulatory proceedings or claims; damage from improper acts of persons over whom we do not have control or attempts to impose liabilities or obligations of third parties on us; weather related slowdowns; the impact of climate change and related governmental regulation; adverse capital and credit market conditions, which may affect our access to and cost of capital; the insufficiency of our income tax provisions and tax reserves, including as a result of changing laws or interpretations; the potential that we do not realize our deferred tax assets; our inability to sell mortgages into the secondary market; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans, and related claims against us; risks related to information technology failures or data security issues; failure to retain key personnel; the disruptions associated with the COVID-19 pandemic (or another epidemic or pandemic or similar public threat or fear of such an event), and the measures taken to address it; the effect of cybersecurity incidents and threats; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a further discussion of these and other risks and uncertainties applicable to our businesses. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations.
©2024 PulteGroup | 2 |
AGENDA
Constructing a High Returning
Homebuilder
Driving Superior Financial
Results
Favorable Long-Term Market
Dynamics
Summary
Constructing a High Returning
Homebuilder
Nation's 3rd Largest Builder
Continuing to Expand Our Market Platform
SEATTLE
PORTLAND
SACRAMENTO | |
SAN FRANCISCO | SALT LAKE |
CITY | |
SAN JOSE | |
LAS VEGAS
LOS ANGELES
PALM SPRINGS
PHOENIX
TUCSON
Recent Market Entry
MINNEAPOLIS
CHICAGO
DENVER
SANTA FE
ALBUQUERQUE
DALLAS
AUSTIN
HOUSTON
SAN ANTONIO
BOSTON
NEW HAVEN
DETROIT | PHILADELPHIA | ||
CLEVELAND | |||
COLUMBUS | |||
INDIANAPOLIS | WASHINGTON D.C. | ||
LOUISVILLE | TRIAD | ||
RALEIGH | |||
NASHVILLE CHARLOTTE WILMINGTON | |||
GREENVILLE | |||
COLUMBIAMYRTLE BEACH | |||
ATLANTA | CHARLESTON | ||
HILTON HEAD | |||
SAVANNAH | |||
JACKSONVILLE | |||
SPACE COAST | |||
LAKELAND | OCALA | ||
ORLANDO | |||
TAMPA | |||
SARASOTA | FORT LAUDERDALE | ||
FORT MYERS |
NAPLES
©2024 PulteGroup | 5 |
Unmatched Ability to Serve All Buyer Groups
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2023 Closings by Buyer Group
First Time Move Up Active Adult
26% | 24% | 25% | 25% | 25% |
46% | 45% | 43% | 39% | 36% |
28% | 31% | 32% | 36% | 39% |
2019 | 2020 | 2021 | 2022 | 2023 |
Offering both spec and build-to-order homes to better meet the needs of U.S. consumers
~60% of closings among higher-marginmove-up and active-adult buyers
©2024 PulteGroup | 6 |
Diversified Across Price Points
2023 Closings by Price Point
13% | 6% | |
Under $300K | 22% |
$300K - $399K | |
$400K - $499K | |
36% | $500K - $749K |
$750K and Above | |
23% |
©2024 PulteGroup | 7 |
Control of Critical Land Resources
Lots Under Control
Actively managing land pipeline
- Multi-yearprogram underway to increase optioned lots to 70% of pipeline
Expect to invest approximately $5.0B in land acquisition and development in 2024
Expect 2024 community count growth of 3% to 5% over prior year
300,000 | |||||
Owned | Optioned | ||||
250,000 | |||||
200,000 | 119,218 | 102,264 | 118,115 | ||
150,000 | 88,989 | ||||
100,000 | |||||
50,000 | 91,363 | 109,078 | 108,848 | 104,515 | |
0 | |||||
2020 | 2021 | 2022 | 2023 | ||
Land Acquisition & Development Spend ($B)
$5.0 | Acquisition | Development | |||||
$4.0 | |||||||
$2.1 | $2.6 | ||||||
$3.0 | $2.5 | ||||||
$2.0 | $1.5 | ||||||
$1.0 | $1.4 | $2.2 | $1.9 | $1.8 | |||
$0.0 | |||||||
2020 | 2021 | 2022 | 2023 | ||||
©2024 PulteGroup | 8 |
Disciplined Land Investment is
Key Driver of Sustained Business Success
Land Underwriting Tied to Return on Invested Capital
IRR | 18% | 18% | 18% | 18% | 18% | 19% | 19% | 20% | 20% | 21% | 21% | 22% | 22% | 23% | 24% | 25% | 26% | 27% | 28% | 29% | 30% |
Threshold | |||||||||||||||||||||
Score | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | 33 |
Land investments sourced by divisions but require corporate approval
Consistent underwriting of all deals against defined risk criteria
• Four categories of risk: Strategic Marketing, Execution, Deal Structure, Operational Metrics
• Underwritten against return, not gross margin
• Review process provides common language for assessing projects across operations
©2024 PulteGroup | 9 |
Operating Model Launched a Decade Ago
Consistent
Land
Underwriting
Efficient Land Pipeline
Goal: increase lot options to 70%
Strategic Capital Allocation
- Invest in the business
- Dividends
- Share Repurchase
- Pay down debt
Improve Homebuilder | Generating Consistent |
Profitability | Cash Flow |
Industry leading gross margins
©2024 PulteGroup | 10 |
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PulteGroup Inc. published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2024 13:21:22 UTC.