10-Q 1 phm-20220930.htm 10-Q - 3Q 2022 phm-20220930
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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 September 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-20220930_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 October 18, 2022: 227,819,724
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)
 
September 30,
2022
December 31,
2021
(Unaudited)
ASSETS
Cash and equivalents$231,301 $1,779,088 
Restricted cash60,097 54,477 
Total cash, cash equivalents, and restricted cash291,398 1,833,565 
House and land inventory11,773,077 9,047,569 
Land held for sale36,997 29,276 
Residential mortgage loans available-for-sale438,205 947,139 
Investments in unconsolidated entities158,085 98,155 
Other assets1,266,360 1,110,966 
Intangible assets138,571 146,923 
Deferred tax assets109,151 139,038 
$14,211,844 $13,352,631 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable$599,357 $621,168 
Customer deposits979,528 844,785 
Deferred tax liabilities179,141 165,519 
Accrued and other liabilities1,587,458 1,576,478 
Financial Services debt338,190 626,123 
Revolving credit facility319,000  
Notes payable2,045,167 2,029,043 
6,047,841 5,863,116 
Shareholders' equity8,164,003 7,489,515 
$14,211,844 $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 EndedNine Months Ended
September 30,September 30,
2022202120222021
Revenues:
Homebuilding
Home sale revenues$3,840,449 $3,324,483 $10,720,364 $9,156,371 
Land sale and other revenues30,658 63,085 97,626 123,321 
3,871,107 3,387,568 10,817,990 9,279,692 
Financial Services72,709 91,482 239,627 288,632 
Total revenues3,943,816 3,479,050 11,057,617 9,568,324 
Homebuilding Cost of Revenues:
Home sale cost of revenues(2,685,596)(2,443,074)(7,498,027)(6,754,204)
Land sale and other cost of revenues(26,314)(47,483)(89,971)(103,313)
(2,711,910)(2,490,557)(7,587,998)(6,857,517)
Financial Services expenses(45,323)(42,835)(132,655)(122,921)
Selling, general, and administrative expenses(350,112)(320,506)(1,030,391)(864,478)
Loss on debt retirement   (61,469)
Other expense, net(25,194)(4,750)(30,830)(8,011)
Income before income taxes811,277 620,402 2,275,743 1,653,928 
Income tax expense(183,349)(144,853)(540,657)(370,873)
Net income$627,928 $475,549 $1,735,086 $1,283,055 
Per share:
Basic earnings$2.70 $1.83 $7.26 $4.86 
Diluted earnings$2.69 $1.82 $7.22 $4.85 
Cash dividends declared$0.15 $0.14 $0.45 $0.42 
Number of shares used in calculation:
Basic230,967 258,147 237,639 261,854 
Effect of dilutive securities1,333 752 1,240 668 
Diluted232,300 258,899 238,879 262,522 


See accompanying Notes to Condensed Consolidated Financial Statements.

4


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

Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Net income$627,928 $475,549 $1,735,086 $1,283,055 
Other comprehensive income, net of tax:
Change in value of derivatives 25 45 75 
Other comprehensive income 25 45 75 
Comprehensive income$627,928 $475,574 $1,735,131 $1,283,130 


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, June 30, 2022232,570 $2,326 $3,319,150 $ $4,423,740 $7,745,216 
Share issuances41 — — — — — 
Dividends declared— — — — (34,624)(34,624)
Share repurchases(4,379)(44)— — (180,402)(180,446)
Cash paid for shares withheld for taxes— — — — (711)(711)
Share-based compensation— — 6,640 — — 6,640 
Net income— — — — 627,928 627,928 
Shareholders' equity, September 30, 2022228,232 $2,282 $3,325,790 $ $4,835,931 $8,164,003 
Shareholders' equity, December 31, 2021249,326 $2,493 $3,290,791 $(45)$4,196,276 $7,489,515 
Share issuances675 6 6,024 — — 6,030 
Dividends declared— — — — (106,650)(106,650)
Share repurchases(21,769)(217)— — (974,456)(974,673)
Cash paid for shares withheld for taxes— — — — (14,325)(14,325)
Share-based compensation— — 28,975 — — 28,975 
Net income— — — — 1,735,086 1,735,086 
Other comprehensive income— — — 45 — 45 
Shareholders' equity, September 30, 2022228,232 $2,282 $3,325,790 $ $4,835,931 $8,164,003 

6


Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
(Loss)
Retained
Earnings
Total
Common Stock
Shares$
Shareholders' equity, June 30, 2021260,067 $2,600 $3,280,779 $(95)$3,675,184 $6,958,468 
Share issuances1 — — — — — 
Dividends declared— — — — (36,166)(36,166)
Share repurchases(5,102)(50)— — (260,550)(260,600)
Cash paid for shares withheld for taxes— — — — (35)(35)
Share-based compensation— — 4,511 — — 4,511 
Net income— — — — 475,549 475,549 
Other comprehensive income— — — 25 — 25 
Shareholders' equity, September 30, 2021254,966 $2,550 $3,285,290 $(70)$3,853,982 $7,141,752 
Shareholders' equity, December 31, 2020266,464 $2,665 $3,261,412 $(145)$3,306,057 $6,569,989 
Stock option exercises1 — 11 — — 11 
Share issuances518 5 4,176 — — 4,181 
Dividends declared— — — — (110,305)(110,305)
Share repurchases(12,017)(120)— — (614,183)(614,303)
Cash paid for shares withheld for taxes— — — — (10,642)(10,642)
Share-based compensation— — 19,691 — — 19,691 
Net income— — — — 1,283,055 1,283,055 
Other comprehensive income— — — 75 — 75 
Shareholders' equity, September 30, 2021254,966 $2,550 $3,285,290 $(70)$3,853,982 $7,141,752 

See accompanying Notes to Condensed Consolidated Financial Statements.
7


PULTEGROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000’s omitted)
(Unaudited)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities:
Net income$1,735,086 $1,283,055 
Adjustments to reconcile net income to net cash from operating activities:
Deferred income tax expense43,485 12,842 
Land-related charges32,475 6,820 
Loss on debt retirement 61,469 
Depreciation and amortization51,934 53,023 
Share-based compensation expense39,520 28,439 
Other, net(160)(3,274)
Increase (decrease) in cash due to:
Inventories(2,706,142)(1,137,351)
Residential mortgage loans available-for-sale507,861 (36,816)
Other assets(127,173)(114,879)
Accounts payable, accrued and other liabilities119,189 394,897 
Net cash provided by (used in) operating activities(303,925)548,225 
Cash flows from investing activities:
Capital expenditures(88,585)(52,134)
Investments in unconsolidated entities(58,154)(35,812)
Distributions of capital from unconsolidated entities3,413 11,500 
Business acquisition(10,400)(10,400)
Other investing activities, net(964)378 
Net cash used in investing activities(154,690)(86,468)
Cash flows from financing activities:
Repayments of notes payable(4,856)(797,395)
Borrowings under revolving credit facility1,925,000  
Repayments under revolving credit facility(1,606,000) 
Financial Services borrowings (repayments), net(287,933)64,684 
Debt issuance costs(11,167) 
Stock option exercises 11 
Share repurchases(974,673)(614,303)
Cash paid for shares withheld for taxes(14,326)(10,642)
Dividends paid(109,597)(111,696)
Net cash used in financing activities(1,083,552)(1,469,341)
Net decrease in cash, cash equivalents, and restricted cash(1,542,167)(1,007,584)
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$291,398 $1,624,651 
Supplemental Cash Flow Information:
Interest paid (capitalized), net$5,642 $16,483 
Income taxes paid (refunded), net$493,559 $335,487 

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 ($000’s omitted): 
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Write-offs of deposits and pre-acquisition costs$(24,462)$(3,567)$(32,475)$(6,801)
Amortization of intangible assets(2,766)(3,612)(8,353)(13,571)
Interest income370 436 1,048 1,541 
Interest expense(65)(115)(216)(387)
Equity in earnings of unconsolidated entities446 604 2,390 5,620 
Miscellaneous, net1,283 1,504 6,776 5,587 
Total other expense, net$(25,194)$(4,750)$(30,830)$(8,011)

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 $979.5 million and $844.8 million at September 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. The related contract assets for estimated future renewal commissions are included in other assets and totaled $51.6 million and $44.3 million at September 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 EndedNine Months Ended
September 30,September 30,
2022202120222021
Numerator:
Net income$627,928 $475,549 $1,735,086 $1,283,055 
Less: earnings distributed to participating securities(202)(296)(635)(887)
Less: undistributed earnings allocated to participating securities(3,534)(3,546)(10,288)(9,559)
Numerator for basic earnings per share$624,192 $471,707 $1,724,163 $1,272,609 
Add back: undistributed earnings allocated to participating securities3,534 3,546 10,288 9,559 
Less: undistributed earnings reallocated to participating securities(3,508)(3,536)(10,218)(9,535)
Numerator for diluted earnings per share$624,218 $471,717 $1,724,233 $1,272,633 
Denominator:
Basic shares outstanding230,967 258,147 237,639 261,854 
Effect of dilutive securities1,333 752 1,240 668 
Diluted shares outstanding232,300 258,899 238,879 262,522 
Earnings per share:
Basic$2.70 $1.83 $7.26 $4.86 
Diluted$2.69 $1.82 $7.22 $4.85 

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 September 30, 2022 and December 31, 2021, residential mortgage loans available-for-sale had an aggregate fair value of $438.2 million and $947.1 million, respectively, and an aggregate outstanding principal balance of $454.7 million and $924.5 million, respectively. Net gains from the sale of mortgages were $34.4 million and $58.4 million for the three months ended September 30, 2022 and 2021, respectively, and $131.9 million and $192.6 million for the nine months ended September 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 September 30, 2022 and December 31, 2021, we had aggregate IRLCs of $1.3 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 September 30, 2022 and December 31, 2021, we had unexpired forward contracts of $1.5 billion and $903.0 million, respectively, and whole loan investor commitments of $270.9 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 90 days. The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted):

 
 September 30, 2022December 31, 2021
 Other AssetsAccrued and Other LiabilitiesOther AssetsAccrued and Other Liabilities
Interest rate lock commitments$3,183 $23,457 $8,582 $33 
Forward contracts66,620 163 757 1,336 
Whole loan commitments1,300 35 384 4 
$71,103 $23,655 $9,723 $1,373 

Mortgage interest rates in the United States increased significantly during the nine months ended September 30, 2022. Due to the time between entering contracts and the subsequent closing of the underlying homes and related mortgage loans with customers, the increase in rates has resulted in a significant decrease in the value of our IRLCs with generally offsetting increases in the value of our forward contracts and whole loan commitments.

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 September 30, 2022 and December 31, 2021, we reported $215.9 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 September 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): 
September 30,
2022
December 31,
2021
Homes under construction$6,435,318 $4,225,309 
Land under development4,653,319 4,091,015 
Raw land684,440 731,245 
$11,773,077 $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 EndedNine Months Ended
 September 30,September 30,
 2022202120222021
Interest in inventory, beginning of period$151,554 $185,433 $160,756 $193,409 
Interest capitalized33,235 31,707 96,156 97,809 
Interest expensed(41,120)(41,897)(113,243)(115,975)
Interest in inventory, end of period$143,669 $175,243 $143,669 $175,243 

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 $24.5 million and $3.6 million of such charges during the three months ended September 30, 2022 and 2021, respectively, and $32.5 million and $6.8 million during the nine months ended September 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 September 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 September 30, 2022 and December 31, 2021 ($000’s omitted):

 
 September 30, 2022December 31, 2021
 Deposits and
Pre-acquisition
Costs
Remaining Purchase
Price
Deposits and
Pre-acquisition
Costs
Remaining Purchase
Price
Land options with VIEs$194,845 $2,361,581 $179,604 $2,329,187 
Other land options254,613 3,654,214 225,318 3,128,691 
$449,458 $6,015,795 $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 EndedNine Months Ended
September 30,September 30,
 2022202120222021
Revenues:
Northeast$252,986 $273,261 $665,771 $735,602 
Southeast720,101 587,875 1,836,042 1,541,910 
Florida953,778 740,569 2,714,485 2,157,374 
Midwest562,891 505,012 1,569,332 1,337,416 
Texas588,423 412,568 1,608,459 1,256,983 
West792,928 868,283 2,423,901 2,250,407 
3,871,107 3,387,568 10,817,990 9,279,692 
Financial Services72,709 91,482 239,627 288,632 
Consolidated revenues$3,943,816 $3,479,050 $11,057,617 $9,568,324 
Income (loss) before income taxes:
Northeast$52,682 $53,410 $140,052 $132,604 
Southeast181,667 109,407 460,056 274,174 
Florida220,850 133,642 628,979 382,682 
Midwest79,168 72,537 230,419 196,205 
Texas133,404 71,062 351,253 221,099 
West149,001 173,137 468,873 403,039 
Other homebuilding (a)
(33,009)(41,432)(112,070)(122,317)
783,763 571,763 2,167,562 1,487,486 
Financial Services27,514 48,639 108,181 166,442 
Consolidated income before income taxes$811,277 $620,402 $2,275,743 $1,653,928 

(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 $56.6 million and a loss on debt retirement of $61.5 million in the nine months ended September 30, 2021 (see Note 8 and Note 4, respectively).
14


PULTEGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Operating Data by Segment
($000’s omitted)
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Land-related charges (a):
Northeast$3,759 $223 $3,961 $357 
Southeast5,889 1,915 9,724 3,253 
Florida4,881 209 6,493 642 
Midwest1,677 477 2,780 969 
Texas2,794 141 3,328 932 
West5,462 602 6,189 667 
Other homebuilding    
$24,462 $3,567 $32,475 $6,820 

(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)
September 30, 2022
 Homes Under
Construction
Land Under
Development
Raw LandTotal
Inventory
Total
Assets
Northeast$419,660 $220,715 $50,689 $691,064 $779,447 
Southeast983,353 489,200 88,649 1,561,202 1,772,806 
Florida1,494,755 1,049,632 150,892 2,695,279 3,202,654 
Midwest712,962 592,427 </