Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 18, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-9804 | |
Entity Registrant Name | PULTEGROUP INC/MI/ | |
Entity Incorporation, State or Country Code | MI | |
Entity Tax Identification Number | 38-2766606 | |
Entity Address, Address Line One | 3350 Peachtree Road NE, Suite 1500 | |
Entity Address, City or Town | Atlanta, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30326 | |
City Area Code | 404 | |
Local Phone Number | 978-6400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 227,819,724 | |
Entity Central Index Key | 0000822416 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of each class | Common Shares, par value $0.01 | |
Trading Symbol | PHM | |
Security Exchange Name | NYSE | |
Series A Junior Participating Preferred Share Purchase Rights | ||
Entity Information [Line Items] | ||
Title of each class | Series A Junior Participating Preferred Share Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and equivalents | $ 231,301 | $ 1,779,088 |
Restricted cash | 60,097 | 54,477 |
Total cash, cash equivalents, and restricted cash | 291,398 | 1,833,565 |
House and land inventory | 11,773,077 | 9,047,569 |
Land held for sale | 36,997 | 29,276 |
Residential mortgage loans available-for-sale | 438,205 | 947,139 |
Investments in unconsolidated entities | 158,085 | 98,155 |
Other assets | 1,266,360 | 1,110,966 |
Intangible assets | 138,571 | 146,923 |
Deferred tax assets | 109,151 | 139,038 |
Total assets | 14,211,844 | 13,352,631 |
Liabilities: | ||
Accounts payable | 599,357 | 621,168 |
Customer deposits | 979,528 | 844,785 |
Deferred tax liabilities | 179,141 | 165,519 |
Accrued and other liabilities | 1,587,458 | 1,576,478 |
Financial Services debt | 338,190 | 626,123 |
Revolving credit facility | 319,000 | |
Notes payable | 2,045,167 | 2,029,043 |
Total liabilities | 6,047,841 | 5,863,116 |
Shareholders' equity | 8,164,003 | 7,489,515 |
Total liabilities and shareholders' equity | $ 14,211,844 | $ 13,352,631 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 3,943,816 | $ 3,479,050 | $ 11,057,617 | $ 9,568,324 |
Homebuilding Cost of Revenues: | ||||
Selling, general, and administrative expenses | (350,112) | (320,506) | (1,030,391) | (864,478) |
Loss on debt retirement | 0 | 0 | 0 | (61,469) |
Other expense, net | (25,194) | (4,750) | (30,830) | (8,011) |
Income before income taxes | 811,277 | 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 (usd per share) | $ 2.70 | $ 1.83 | $ 7.26 | $ 4.86 |
Diluted earnings (usd per share) | 2.69 | 1.82 | 7.22 | 4.85 |
Cash dividends declared (usd per share) | $ 0.15 | $ 0.14 | $ 0.45 | $ 0.42 |
Number of shares used in calculation: | ||||
Basic shares outstanding (shares) | 230,967 | 258,147 | 237,639 | 261,854 |
Effect of dilutive securities (shares) | 1,333 | 752 | 1,240 | 668 |
Diluted shares outstanding (shares) | 232,300 | 258,899 | 238,879 | 262,522 |
Homebuilding | ||||
Homebuilding Cost of Revenues: | ||||
Cost of revenues | $ (2,711,910) | $ (2,490,557) | $ (7,587,998) | $ (6,857,517) |
Financial Services | ||||
Homebuilding Cost of Revenues: | ||||
Financial Services expenses | (45,323) | (42,835) | (132,655) | (122,921) |
Home sale revenues | Homebuilding | ||||
Revenues: | ||||
Revenues | 3,840,449 | 3,324,483 | 10,720,364 | 9,156,371 |
Homebuilding Cost of Revenues: | ||||
Cost of revenues | (2,685,596) | (2,443,074) | (7,498,027) | (6,754,204) |
Land sale and other revenues | Homebuilding | ||||
Revenues: | ||||
Revenues | 30,658 | 63,085 | 97,626 | 123,321 |
Homebuilding Cost of Revenues: | ||||
Cost of revenues | (26,314) | (47,483) | (89,971) | (103,313) |
Financial Services | Financial Services | ||||
Revenues: | ||||
Revenues | 72,709 | 91,482 | 239,627 | 288,632 |
Homebuilding Cost of Revenues: | ||||
Income before income taxes | $ 27,514 | $ 48,639 | $ 108,181 | $ 166,442 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income | $ 627,928 | $ 475,549 | $ 1,735,086 | $ 1,283,055 |
Other comprehensive income, net of tax: | ||||
Change in value of derivatives | 0 | 25 | 45 | 75 |
Other comprehensive income | 0 | 25 | 45 | 75 |
Comprehensive income | $ 627,928 | $ 475,574 | $ 1,735,131 | $ 1,283,130 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning shareholders' equity (shares) at Dec. 31, 2020 | 266,464 | ||||
Beginning shareholders' equity at Dec. 31, 2020 | $ 6,569,989 | $ 2,665 | $ 3,261,412 | $ (145) | $ 3,306,057 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises (shares) | 1 | ||||
Stock option exercises | 11 | 11 | |||
Share issuances (shares) | 518 | ||||
Share issuances | 4,181 | $ 5 | 4,176 | ||
Dividends declared | (110,305) | (110,305) | |||
Share repurchases (shares) | (12,017) | ||||
Share repurchases | (614,303) | $ (120) | (614,183) | ||
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 | |||
Ending shareholders' equity (shares) at Sep. 30, 2021 | 254,966 | ||||
Ending shareholders' equity at Sep. 30, 2021 | 7,141,752 | $ 2,550 | 3,285,290 | (70) | 3,853,982 |
Beginning shareholders' equity (shares) at Jun. 30, 2021 | 260,067 | ||||
Beginning shareholders' equity at Jun. 30, 2021 | 6,958,468 | $ 2,600 | 3,280,779 | (95) | 3,675,184 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises (shares) | 1 | ||||
Dividends declared | (36,166) | (36,166) | |||
Share repurchases (shares) | (5,102) | ||||
Share repurchases | (260,600) | $ (50) | (260,550) | ||
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 | |||
Ending shareholders' equity (shares) at Sep. 30, 2021 | 254,966 | ||||
Ending shareholders' equity at Sep. 30, 2021 | 7,141,752 | $ 2,550 | 3,285,290 | (70) | 3,853,982 |
Beginning shareholders' equity (shares) at Dec. 31, 2021 | 249,326 | ||||
Beginning shareholders' equity at Dec. 31, 2021 | 7,489,515 | $ 2,493 | 3,290,791 | (45) | 4,196,276 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share issuances (shares) | 675 | ||||
Share issuances | 6,030 | $ 6 | 6,024 | ||
Dividends declared | (106,650) | (106,650) | |||
Share repurchases (shares) | (21,769) | ||||
Share repurchases | (974,673) | $ (217) | (974,456) | ||
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 | |||
Ending shareholders' equity (shares) at Sep. 30, 2022 | 228,232 | ||||
Ending shareholders' equity at Sep. 30, 2022 | 8,164,003 | $ 2,282 | 3,325,790 | 0 | 4,835,931 |
Beginning shareholders' equity (shares) at Jun. 30, 2022 | 232,570 | ||||
Beginning shareholders' equity at Jun. 30, 2022 | 7,745,216 | $ 2,326 | 3,319,150 | 0 | 4,423,740 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share issuances (shares) | 41 | ||||
Dividends declared | (34,624) | (34,624) | |||
Share repurchases (shares) | (4,379) | ||||
Share repurchases | (180,446) | $ (44) | (180,402) | ||
Cash paid for shares withheld for taxes | (711) | (711) | |||
Share-based compensation | 6,640 | 6,640 | |||
Net income | 627,928 | 627,928 | |||
Other comprehensive income | 0 | ||||
Ending shareholders' equity (shares) at Sep. 30, 2022 | 228,232 | ||||
Ending shareholders' equity at Sep. 30, 2022 | $ 8,164,003 | $ 2,282 | $ 3,325,790 | $ 0 | $ 4,835,931 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
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 expense | 43,485 | 12,842 |
Land-related charges | 32,475 | 6,820 |
Loss on debt retirement | 0 | 61,469 |
Depreciation and amortization | 51,934 | 53,023 |
Share-based compensation expense | 39,520 | 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-sale | 507,861 | (36,816) |
Other assets | (127,173) | (114,879) |
Accounts payable, accrued and other liabilities | 119,189 | 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 entities | 3,413 | 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 facility | 1,925,000 | 0 |
Repayments under revolving credit facility | (1,606,000) | 0 |
Financial Services borrowings (repayments), net | (287,933) | 64,684 |
Debt issuance costs | (11,167) | 0 |
Stock option exercises | 0 | 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 period | 1,833,565 | 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 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | 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 Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 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 income 370 436 1,048 1,541 Interest expense (65) (115) (216) (387) Equity in earnings of unconsolidated entities 446 604 2,390 5,620 Miscellaneous, net 1,283 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. 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): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 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 securities 3,534 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 outstanding 230,967 258,147 237,639 261,854 Effect of dilutive securities 1,333 752 1,240 668 Diluted shares outstanding 232,300 258,899 238,879 262,522 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. 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, 2022 December 31, 2021 Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities Interest rate lock commitments $ 3,183 $ 23,457 $ 8,582 $ 33 Forward contracts 66,620 163 757 1,336 Whole loan commitments 1,300 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. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Major components of inventory were as follows ($000’s omitted): September 30, December 31, Homes under construction $ 6,435,318 $ 4,225,309 Land under development 4,653,319 4,091,015 Raw land 684,440 731,245 $ 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): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Interest in inventory, beginning of period $ 151,554 $ 185,433 $ 160,756 $ 193,409 Interest capitalized 33,235 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, 2022 December 31, 2021 Deposits and Remaining Purchase Deposits and Remaining Purchase Land options with VIEs $ 194,845 $ 2,361,581 $ 179,604 $ 2,329,187 Other land options 254,613 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment information | 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 Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues: Northeast $ 252,986 $ 273,261 $ 665,771 $ 735,602 Southeast 720,101 587,875 1,836,042 1,541,910 Florida 953,778 740,569 2,714,485 2,157,374 Midwest 562,891 505,012 1,569,332 1,337,416 Texas 588,423 412,568 1,608,459 1,256,983 West 792,928 868,283 2,423,901 2,250,407 3,871,107 3,387,568 10,817,990 9,279,692 Financial Services 72,709 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 Southeast 181,667 109,407 460,056 274,174 Florida 220,850 133,642 628,979 382,682 Midwest 79,168 72,537 230,419 196,205 Texas 133,404 71,062 351,253 221,099 West 149,001 173,137 468,873 403,039 Other homebuilding (a) (33,009) (41,432) (112,070) (122,317) 783,763 571,763 2,167,562 1,487,486 Financial Services 27,514 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). Operating Data by Segment Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Land-related charges (a) : Northeast $ 3,759 $ 223 $ 3,961 $ 357 Southeast 5,889 1,915 9,724 3,253 Florida 4,881 209 6,493 642 Midwest 1,677 477 2,780 969 Texas 2,794 141 3,328 932 West 5,462 602 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 Land Under Raw Land Total Total Northeast $ 419,660 $ 220,715 $ 50,689 $ 691,064 $ 779,447 Southeast 983,353 489,200 88,649 1,561,202 1,772,806 Florida 1,494,755 1,049,632 150,892 2,695,279 3,202,654 Midwest 712,962 592,427 25,570 1,330,959 1,468,414 Texas 832,674 659,635 127,291 1,619,600 1,786,814 West 1,947,389 1,319,823 229,116 3,496,328 3,860,637 Other homebuilding (a) 44,525 321,887 12,233 378,645 668,782 6,435,318 4,653,319 684,440 11,773,077 13,539,554 Financial Services — — — — 672,290 $ 6,435,318 $ 4,653,319 $ 684,440 $ 11,773,077 $ 14,211,844 Operating Data by Segment ($000's omitted) December 31, 2021 Homes Under Land Under Raw Land Total Total Northeast $ 285,975 $ 246,128 $ 17,554 $ 549,657 $ 644,019 Southeast 604,310 537,072 67,815 1,209,197 1,362,852 Florida 943,110 866,266 289,388 2,098,764 2,545,457 Midwest 527,001 460,279 15,869 1,003,149 1,132,081 Texas 581,417 512,925 95,833 1,190,175 1,315,943 West 1,235,457 1,191,834 227,850 2,655,141 2,955,283 Other homebuilding (a) 48,039 276,511 16,936 341,486 2,314,839 4,225,309 4,091,015 731,245 9,047,569 12,270,474 Financial Services — — — — 1,082,157 $ 4,225,309 $ 4,091,015 $ 731,245 $ 9,047,569 $ 13,352,631 (a) Other homebuilding primarily includes cash and equivalents, capitalized interest, intangibles, deferred tax assets, and other corporate items that are not allocated to the operating segments. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Notes payable Our notes payable are summarized as follows ($000’s omitted): September 30, December 31, 5.500% unsecured senior notes due March 2026 (a) $ 500,000 $ 500,000 5.000% unsecured senior notes due January 2027 (a) 500,000 500,000 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 Net premiums, discounts, and issuance costs (b) (10,061) (11,142) Total senior notes $ 1,989,939 $ 1,988,858 Other notes payable 55,228 40,185 Notes payable $ 2,045,167 $ 2,029,043 Estimated fair value $ 2,000,378 $ 2,496,875 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. (b) The carrying value of senior notes reflects the impact of premiums, discounts, and issuance costs that are amortized to interest cost over the respective terms of the senior notes. In the nine months ended September 30, 2021, we retired $426.0 million of senior notes at their scheduled maturity date and also accelerated the retirement of $200.0 million and $100.0 million of our unsecured notes scheduled to mature in 2026 and 2027, respectively, through a cash tender offer. The retirement resulted in a loss of $61.5 million, which includes the write-off of debt issuance costs, unamortized discounts and premiums, and transaction fees. Other notes payable Other notes payable include non-recourse and limited recourse notes with third parties that totaled $55.2 million and $40.2 million at September 30, 2022 and December 31, 2021, respectively. These notes have maturities ranging up to five 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 6%. Such notes payable issued to acquire land inventory totaled $19.9 million and $42.6 million in the nine months ended September 30, 2022 and 2021, respectively. Revolving credit facility In June 2022, we entered into the Third Amended and Restated Credit Agreement (the "Revolving Credit Facility"), which replaced our previous credit agreement. The Revolving Credit Facility contains substantially similar terms to the previous credit agreement, increased our borrowing capacity, and extended the maturity date from June 2023 to June 2027. The Revolving Credit Facility has 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. 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 September 30, 2022, we were in compliance with all covenants. At September 30, 2022, we had $319.0 million borrowings outstanding, $340.7 million of letters of credit issued, and $590.3 million of remaining capacity under the Revolving Credit Facility. At December 31, 2021, we had no borrowings outstanding, $298.8 million of letters of credit issued, and $701.2 million of remaining capacity under the Revolving Credit Facility. Joint venture debt At September 30, 2022, aggregate outstanding debt of unconsolidated joint ventures was $70.7 million, of which $42.0 million was related to one joint venture in which we have a 50% interest. In connection with this loan, we and our joint venture partner provided customary limited recourse guaranties in which our maximum financial loss exposure is limited to our pro rata share of the debt outstanding. Financial Services debt Pulte Mortgage maintains a master repurchase agreement with third-party lenders (as amended, the "Repurchase Agreement") that matures on July 27, 2023. The maximum aggregate commitment was $655.0 million at September 30, 2022, which will increase to $800.0 million during the seasonally high borrowing period from December 27, 2022 to January 12, 2023. Thereafter, the maximum aggregate commitment ranges from $360.0 million to $500.0 million. 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. Pulte Mortgage had $338.2 million and $626.1 million outstanding under the Repurchase Agreement at September 30, 2022 and December 31, 2021, respectively, and was in compliance with all of its covenants and requirements as of such dates. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Shareholders’ equity | Shareholders’ equity In the nine months ended September 30, 2022, we declared cash dividends totaling $106.7 million and repurchased 21.8 million shares under our repurchase authorization for $974.7 million. In the nine months ended September 30, 2021, we declared cash dividends totaling $110.3 million and repurchased 12.0 million shares under our repurchase authorization for $614.3 million. On January 31, 2022, the Board of Directors increased our share repurchase authorization by $1.0 billion. At September 30, 2022, we had remaining authorization to repurchase $482.9 million of common shares. Under our share-based compensation plans, we accept shares as payment under certain conditions related to the vesting of shares, generally related to the payment of minimum tax obligations. In the nine months ended September 30, 2022 and 2021, |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Our effective tax rate in the three and nine months ended September 30, 2022 was 22.6% and 23.8%, respectively, compared to 23.3% and 22.4%, respectively, for the same periods in 2021. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and benefits associated with federal energy efficient home credits. On August 16, 2022, the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") was signed into law. Notably, the Inflation Reduction Act retroactively extended the federal energy efficient home credits to January 1, 2022. Income tax expense for the three and nine months ended September 30, 2022 includes a benefit of $20.7 million associated with the extension of the federal energy efficient home tax credits. The 2021 tax rate also reflects a reduction in valuation allowances relating to projected utilization of certain state net operating loss carryforwards. At September 30, 2022 and December 31, 2021, we had net deferred tax liabilities of $70.0 million and $26.5 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time. Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. We had $23.5 million and $22.5 million of gross unrecognized tax benefits at September 30, 2022 and December 31, 2021, respectively. Additionally, we had accrued interest and penalties of $3.8 million and $2.9 million at September 30, 2022 and December 31, 2021, respectively. |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Fair value disclosures ASC 820, “Fair Value Measurements and Disclosures”, provides a framework for measuring fair value in generally accepted accounting principles and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value hierarchy can be summarized as follows: Level 1 Fair value determined based on quoted prices in active markets for identical assets or liabilities. Level 2 Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active. Level 3 Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques. Our assets and liabilities measured or disclosed at fair value are summarized below ($000’s omitted): Financial Instrument Fair Value Fair Value September 30, December 31, Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 438,205 $ 947,139 IRLCs Level 2 (20,274) 8,549 Forward contracts Level 2 66,457 (579) Whole loan commitments Level 2 1,265 380 Disclosed at fair value: Cash, cash equivalents, and restricted cash Level 1 $ 291,398 $ 1,833,565 Financial Services debt Level 2 338,190 626,123 Revolving credit facility Level 2 319,000 — Senior notes payable Level 2 1,945,150 2,456,690 Other notes payable Level 2 55,228 40,185 Fair values for agency residential mortgage loans available-for-sale are determined based on quoted market prices for comparable instruments. Fair values for non-agency residential mortgage loans available-for-sale are determined based on purchase commitments from whole loan investors and other relevant market information available to management. Fair values for IRLCs, including the value of servicing rights, and forward contracts on mortgage-backed securities are valued based on market prices for similar instruments. Fair values for whole loan commitments are based on market prices for similar instruments from the specific whole loan investor. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Letters of credit and surety bonds In the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $340.7 million and $2.2 billion, respectively, at September 30, 2022 and $298.8 million and $1.8 billion, respectively, at December 31, 2021. In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. 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. We do not believe that a material amount, if any, of the letters of credit or surety bonds will be drawn. Litigation and regulatory matters We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment practices, and protection of the environment. As a result, we are subject to periodic examination or inquiry by various governmental agencies that administer these laws and regulations. We establish liabilities for litigation, legal claims, and regulatory matters when such matters are both probable of occurring and any potential loss is reasonably estimable. We accrue for such matters based on the facts and circumstances specific to each matter and revise these estimates as the matters evolve. In such cases, there may exist an exposure to loss in excess of any amounts currently accrued. In view of the inherent difficulty of predicting the outcome of these legal and regulatory matters, we generally cannot predict the ultimate resolution of the pending matters, the related timing, or the eventual loss. While the outcome of such contingencies cannot be predicted with certainty, we do not believe that the resolution of such matters will have a material adverse impact on our results of operations, financial position, or cash flows. However, to the extent the liability arising from the ultimate resolution of any matter exceeds the estimates reflected in the recorded reserves relating to such matter, we could incur additional charges that could be significant. Product warranty Home purchasers are provided with a limited warranty against certain building defects, including a one-year comprehensive limited warranty and coverage for certain other aspects of the home’s construction and operating systems for periods of up to, and, in limited instances, exceeding, 10 years. We estimate the costs to be incurred under these warranties and record liabilities in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost per claim. We periodically assess the adequacy of the warranty liabilities for each geographic market in which we operate and adjust the amounts as necessary. Actual warranty costs in the future could differ from the current estimates. Changes to warranty liabilities were as follows ($000’s omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Warranty liabilities, beginning of period $ 110,605 $ 87,759 $ 107,117 $ 82,744 Reserves provided 22,840 22,993 66,398 61,801 Payments (23,137) (19,346) (65,466) (53,150) Other adjustments 24 317 2,283 328 Warranty liabilities, end of period $ 110,332 $ 91,723 $ 110,332 $ 91,723 Self-insured risks We maintain, and require our subcontractors to maintain, general liability insurance coverage. We also maintain builders' risk, property, errors and omissions, workers' compensation, and other business insurance coverage. These insurance policies protect us against a portion of the risk of loss from claims. However, we retain a significant portion of the overall risk for such claims either through policies issued by our captive insurance subsidiaries or through our own self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. Our general liability insurance includes coverage for certain construction defects. While construction defect claims can relate to a variety of circumstances, the majority of our claims relate to alleged problems with siding, plumbing, foundations and other concrete work, windows, roofing, and heating, ventilation, and air conditioning systems. The availability of general liability insurance for the homebuilding industry and its subcontractors has become increasingly limited, and the insurance policies available require us to maintain significant per occurrence and aggregate retention levels. 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 provided by us. Policies issued by our captive insurance subsidiaries represent self-insurance of these risks by us. A portion of this self-insured exposure is limited by reinsurance policies that we purchase. General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year. Our insurance coverage requires a per occurrence deductible up to an overall aggregate retention level. Beginning with the first dollar, amounts paid to satisfy insured claims generally apply to our per occurrence and aggregate retention obligations. Any amounts incurred in excess of the occurrence or aggregate retention levels are covered by insurance up to our purchased coverage levels. Our insurance policies, including the captive insurance subsidiaries' reinsurance policies, are maintained with highly-rated underwriters for whom we believe counterparty default risk is not significant. At any point in time, we are managing approximately 1,000 individual claims related to general liability, property, errors and omissions, workers' compensation, and other business insurance coverage. We reserve for costs associated with such claims (including expected claims management expenses) on an undiscounted basis at the time revenue is recognized for each home closing and periodically evaluate the recorded liabilities based on actuarial analyses of our historical claims. The actuarial analyses calculate estimates of the ultimate net cost of all unpaid losses, including estimates for incurred but not reported losses ("IBNR"). IBNR represents losses related to claims incurred but not yet reported plus development on reported claims. Our recorded reserves for all such claims totaled $679.3 million and $627.1 million at September 30, 2022 and December 31, 2021, respectively. The recorded reserves include loss estimates related to both (i) existing claims and related claim expenses and (ii) IBNR and related claim expenses. Liabilities related to IBNR and related claim expenses represented approximately 70% of the total general liability reserves at both September 30, 2022 and December 31, 2021. The actuarial analyses that determine the IBNR portion of reserves consider a variety of factors, including the frequency and severity of losses, which are based on our historical claims experience supplemented by industry data. The actuarial analyses of the reserves also consider historical third-party recovery rates and claims management expenses. Housing market conditions can be volatile, and we believe such conditions can affect the frequency and cost of construction defect claims. Additionally, IBNR estimates comprise the majority of our liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in claims reporting and resolution patterns, third-party recoveries, insurance industry practices, the regulatory environment, and legal precedent. State regulations vary, but construction defect claims are typically reported and resolved over an extended period, often exceeding ten years. Changes in the frequency and timing of reported claims and estimates of specific claim values can impact the underlying inputs and trends utilized in the actuarial analyses, which could have a material impact on the recorded reserves. Additionally, the amount of insurance coverage available for each policy period also impacts our recorded reserves. Because of the inherent uncertainty in estimating future losses and the timing of such losses related to these claims, actual costs could differ significantly from estimated costs. Adjustments to reserves are recorded in the period in which the change in estimate occurs. We reduced general liability reserves by $56.6 million during the nine months ended September 30, 2021 as a result of changes in estimates resulting from actual claim experience being less than anticipated in previous actuarial projections. These changes in actuarial estimates did not involve any 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. Costs associated with our insurance programs are classified within selling, general, and administrative expenses. Changes in these liabilities were as follows ($000's omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Balance, beginning of period $ 652,686 $ 620,617 $ 627,067 $ 641,779 Reserves provided 31,134 21,569 74,676 64,018 Adjustments to previously recorded reserves (2,169) (1,349) 1,889 (56,567) Payments, net (a) (2,358) (16,175) (24,339) (24,568) Balance, end of period $ 679,293 $ 624,662 $ 679,293 $ 624,662 (a) Includes net changes in amounts expected to be recovered from our insurance carriers, which are recorded in other assets (see below). Estimates of anticipated recoveries of our costs under various insurance policies or from subcontractors or other third parties are recorded when recovery is considered probable. Such receivables are recorded in other assets and totaled $49.2 million and $57.5 million at September 30, 2022 and December 31, 2021, respectively. Those receivables relate to costs incurred to perform corrective repairs, settle claims with customers, and other costs related to the continued progression of construction defect claims that we believe are insured. Given the complexity inherent with resolving construction defect claims in the homebuilding industry described above, there generally exists a significant lag between our payment of claims and our reimbursements from applicable insurance carriers or third parties. In addition, disputes between homebuilders and insurance carriers or third parties over coverage positions relating to construction defect claims are common. Resolution of claims involves the exchange of significant amounts of information and frequently involves legal action. Leases We lease certain office space and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use ("ROU") assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or more options to renew. The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets and leasehold improvements are limited to the expected lease term. Certain of our lease agreements include rental payments based on a pro-rata share of the lessor’s operating costs which are variable in nature. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. ROU assets are classified within other assets on the balance sheet, while lease liabilities are classified within accrued and other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets and lease liabilities were $69.3 million and $85.9 million at September 30, 2022, respectively, and $74.3 million and $92.7 million at December 31, 2021, respectively. In the three and nine months ended September 30, 2022, we recorded an additional $3.3 million and $7.5 million, respectively, of lease liabilities under operating leases, and $2.1 million and $15.2 million, respectively, in the comparable prior year periods. Payments on lease liabilities in the three and nine months ended September 30, 2022 totaled $5.0 million and $16.1 million, respectively, and $5.1 million and $15.6 million, respectively, in the comparable prior year periods. Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of less than one year. In the three and nine months ended September 30, 2022 our total lease expense was $14.3 million and $40.5 million, respectively, and $10.6 million and $31.2 million, respectively, in the comparable prior year periods. Our total lease expense is inclusive of variable lease costs of $3.3 million and $7.7 million in the three and nine months ended September 30, 2022, respectively, and $1.6 million and $5.6 million, respectively, in the comparable prior year periods, as well as short-term lease costs of $5.2 million and $15.8 million in the three and nine months ended September 30, 2022, respectively and $3.7 million and $9.7 million, respectively, in the comparable prior year periods. Sublease income was de minimis. The future minimum lease payments required under our leases as of September 30, 2022 were as follows ($000's omitted): Years Ending December 31, 2022 (a) $ 6,437 2023 24,807 2024 17,922 2025 12,657 2026 9,519 Thereafter 22,000 Total lease payments (b) 93,342 Less: Interest (c) (7,476) Present value of lease liabilities (d) $ 85,866 (a) Remaining payments are for the three months ending December 31, 2022. (b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $2.0 million of legally binding minimum lease payments for leases signed but not yet commenced at September 30, 2022. (c) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 5.2 years and 5.5%, respectively, at September 30, 2022. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Consolidation policy | 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 | 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 | Subsequent events We evaluated subsequent events up until the time the financial statements were filed with the Securities and Exchange Commission (the "SEC"). |
Revenue recognition | 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. 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. |
Earnings per share | 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. |
Residential mortgage loans available-for-sale | 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 | 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. |
Credit losses | 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 | 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. |
Inventory interest capitalization | 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. |
Fair value of financial instruments | Fair values for agency residential mortgage loans available-for-sale are determined based on quoted market prices for comparable instruments. Fair values for non-agency residential mortgage loans available-for-sale are determined based on purchase commitments from whole loan investors and other relevant market information available to management. Fair values for IRLCs, including the value of servicing rights, and forward contracts on mortgage-backed securities are valued based on market prices for similar instruments. Fair values for whole loan commitments are based on market prices for similar instruments from the specific whole loan investor.The carrying amounts of cash and equivalents, Financial Services debt and other notes payable approximate their fair values due to their short-term nature and/or floating interest rate terms. The fair values of senior notes are based on quoted market prices, when available. If quoted market prices are not available, fair values are based on quoted market prices of similar issues. The carrying value of senior notes was $2.0 billion at both September 30, 2022 and December 31, 2021 |
Letters of credit and surety bonds | Letters of credit and surety bondsIn the normal course of business, we post letters of credit and surety bonds pursuant to certain performance-related obligations, as security for certain land option agreements, and under various insurance programs. The majority of these letters of credit and surety bonds are in support of our land development and construction obligations to various municipalities, other government agencies, and utility companies related to the construction of roads, sewers, and other infrastructure. We had outstanding letters of credit and surety bonds totaling $340.7 million and $2.2 billion, respectively, at September 30, 2022 and $298.8 million and $1.8 billion, respectively, at December 31, 2021. In the event any such letter of credit or surety bond is drawn, we would be obligated to reimburse the issuer of the letter of credit or surety bond. Our surety bonds generally do not have stated expiration dates; rather we are released from the surety bonds as the underlying contractual performance is completed. 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. |
Litigation and regulatory matters | Litigation and regulatory matters We are involved in various litigation and legal claims in the normal course of our business operations, including actions brought on behalf of various classes of claimants. We are also subject to a variety of local, state, and federal laws and regulations related to land development activities, house construction standards, sales practices, mortgage lending operations, employment |
Allowance for warranties | Home purchasers are provided with a limited warranty against certain building defects, including a one-year comprehensive limited warranty and coverage for certain other aspects of the home’s construction and operating systems for periods of up to, and, in limited instances, exceeding, 10 years. We estimate the costs to be incurred under these warranties and record liabilities in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liabilities include the number of homes sold, historical and anticipated rates of warranty claims, and the projected cost per claim. We periodically assess the adequacy of the warranty liabilities for each geographic market in which we operate and adjust the amounts as necessary. Actual warranty costs in the future could differ from the current estimates. |
Self insured risks | Self-insured risks We maintain, and require our subcontractors to maintain, general liability insurance coverage. We also maintain builders' risk, property, errors and omissions, workers' compensation, and other business insurance coverage. These insurance policies protect us against a portion of the risk of loss from claims. However, we retain a significant portion of the overall risk for such claims either through policies issued by our captive insurance subsidiaries or through our own self-insured per occurrence and aggregate retentions, deductibles, and claims in excess of available insurance policy limits. Our general liability insurance includes coverage for certain construction defects. While construction defect claims can relate to a variety of circumstances, the majority of our claims relate to alleged problems with siding, plumbing, foundations and other concrete work, windows, roofing, and heating, ventilation, and air conditioning systems. The availability of general liability insurance for the homebuilding industry and its subcontractors has become increasingly limited, and the insurance policies available require us to maintain significant per occurrence and aggregate retention levels. 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 provided by us. Policies issued by our captive insurance subsidiaries represent self-insurance of these risks by us. A portion of this self-insured exposure is limited by reinsurance policies that we purchase. General liability coverage for the homebuilding industry is complex, and our coverage varies from policy year to policy year. Our insurance coverage requires a per occurrence deductible up to an overall aggregate retention level. Beginning with the first dollar, amounts paid to satisfy insured claims generally apply to our per occurrence and aggregate retention obligations. Any amounts incurred in excess of the occurrence or aggregate retention levels are covered by insurance up to our purchased coverage levels. Our insurance policies, including the captive insurance subsidiaries' reinsurance policies, are maintained with highly-rated underwriters for whom we believe counterparty default risk is not significant. At any point in time, we are managing approximately 1,000 individual claims related to general liability, property, errors and omissions, workers' compensation, and other business insurance coverage. We reserve for costs associated with such claims (including expected claims management expenses) on an undiscounted basis at the time revenue is recognized for each home closing and periodically evaluate the recorded liabilities based on actuarial analyses of our historical claims. The actuarial analyses calculate estimates of the ultimate net cost of all unpaid losses, including estimates for incurred but not reported losses ("IBNR"). IBNR represents losses related to claims incurred but not yet reported plus development on reported claims. Our recorded reserves for all such claims totaled $679.3 million and $627.1 million at September 30, 2022 and December 31, 2021, respectively. The recorded reserves include loss estimates related to both (i) existing claims and related claim expenses and (ii) IBNR and related claim expenses. Liabilities related to IBNR and related claim expenses represented approximately 70% of the total general liability reserves at both September 30, 2022 and December 31, 2021. The actuarial analyses that determine the IBNR portion of reserves consider a variety of factors, including the frequency and severity of losses, which are based on our historical claims experience supplemented by industry data. The actuarial analyses of the reserves also consider historical third-party recovery rates and claims management expenses. Housing market conditions can be volatile, and we believe such conditions can affect the frequency and cost of construction defect claims. Additionally, IBNR estimates comprise the majority of our liability and are subject to a high degree of uncertainty due to a variety of factors, including changes in claims reporting and resolution patterns, third-party recoveries, insurance industry practices, the regulatory environment, and legal precedent. State regulations vary, but construction defect claims are typically reported and resolved over an extended period, often exceeding ten years. Changes in the frequency and timing of reported claims and estimates of specific claim values can impact the underlying inputs and trends utilized in the actuarial analyses, which could have a material impact on the recorded reserves. Additionally, the amount of insurance coverage available for each policy period also impacts our recorded reserves. Because of the inherent uncertainty in estimating future losses and the timing of such losses related to these claims, actual costs could differ significantly from estimated costs. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Other Expense (Income), Net | Other expense, net consists of the following ($000’s omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 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 income 370 436 1,048 1,541 Interest expense (65) (115) (216) (387) Equity in earnings of unconsolidated entities 446 604 2,390 5,620 Miscellaneous, net 1,283 1,504 6,776 5,587 Total other expense, net $ (25,194) $ (4,750) $ (30,830) $ (8,011) |
Schedule of Earnings Per Share | The following table presents the earnings per common share (000's omitted, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 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 securities 3,534 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 outstanding 230,967 258,147 237,639 261,854 Effect of dilutive securities 1,333 752 1,240 668 Diluted shares outstanding 232,300 258,899 238,879 262,522 Earnings per share: Basic $ 2.70 $ 1.83 $ 7.26 $ 4.86 Diluted $ 2.69 $ 1.82 $ 7.22 $ 4.85 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair values of derivative instruments and their locations in the Condensed Consolidated Balance Sheets are summarized below ($000’s omitted): September 30, 2022 December 31, 2021 Other Assets Accrued and Other Liabilities Other Assets Accrued and Other Liabilities Interest rate lock commitments $ 3,183 $ 23,457 $ 8,582 $ 33 Forward contracts 66,620 163 757 1,336 Whole loan commitments 1,300 35 384 4 $ 71,103 $ 23,655 $ 9,723 $ 1,373 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Major components of inventory were as follows ($000’s omitted): September 30, December 31, Homes under construction $ 6,435,318 $ 4,225,309 Land under development 4,653,319 4,091,015 Raw land 684,440 731,245 $ 11,773,077 $ 9,047,569 |
Capitalized Interest Rollforward | Information related to interest capitalized into inventory is as follows ($000’s omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Interest in inventory, beginning of period $ 151,554 $ 185,433 $ 160,756 $ 193,409 Interest capitalized 33,235 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 |
Schedule Of Company Interests In 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, 2022 December 31, 2021 Deposits and Remaining Purchase Deposits and Remaining Purchase Land options with VIEs $ 194,845 $ 2,361,581 $ 179,604 $ 2,329,187 Other land options 254,613 3,654,214 225,318 3,128,691 $ 449,458 $ 6,015,795 $ 404,922 $ 5,457,878 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Components of Reportable Segments | 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 |
Operating Data By Reporting Segment | Operating Data by Segment Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues: Northeast $ 252,986 $ 273,261 $ 665,771 $ 735,602 Southeast 720,101 587,875 1,836,042 1,541,910 Florida 953,778 740,569 2,714,485 2,157,374 Midwest 562,891 505,012 1,569,332 1,337,416 Texas 588,423 412,568 1,608,459 1,256,983 West 792,928 868,283 2,423,901 2,250,407 3,871,107 3,387,568 10,817,990 9,279,692 Financial Services 72,709 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 Southeast 181,667 109,407 460,056 274,174 Florida 220,850 133,642 628,979 382,682 Midwest 79,168 72,537 230,419 196,205 Texas 133,404 71,062 351,253 221,099 West 149,001 173,137 468,873 403,039 Other homebuilding (a) (33,009) (41,432) (112,070) (122,317) 783,763 571,763 2,167,562 1,487,486 Financial Services 27,514 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). Operating Data by Segment Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Land-related charges (a) : Northeast $ 3,759 $ 223 $ 3,961 $ 357 Southeast 5,889 1,915 9,724 3,253 Florida 4,881 209 6,493 642 Midwest 1,677 477 2,780 969 Texas 2,794 141 3,328 932 West 5,462 602 6,189 667 Other homebuilding — — — — $ 24,462 $ 3,567 $ 32,475 $ 6,820 |
Total Assets And Inventory By Reporting Segment | Operating Data by Segment ($000's omitted) September 30, 2022 Homes Under Land Under Raw Land Total Total Northeast $ 419,660 $ 220,715 $ 50,689 $ 691,064 $ 779,447 Southeast 983,353 489,200 88,649 1,561,202 1,772,806 Florida 1,494,755 1,049,632 150,892 2,695,279 3,202,654 Midwest 712,962 592,427 25,570 1,330,959 1,468,414 Texas 832,674 659,635 127,291 1,619,600 1,786,814 West 1,947,389 1,319,823 229,116 3,496,328 3,860,637 Other homebuilding (a) 44,525 321,887 12,233 378,645 668,782 6,435,318 4,653,319 684,440 11,773,077 13,539,554 Financial Services — — — — 672,290 $ 6,435,318 $ 4,653,319 $ 684,440 $ 11,773,077 $ 14,211,844 Operating Data by Segment ($000's omitted) December 31, 2021 Homes Under Land Under Raw Land Total Total Northeast $ 285,975 $ 246,128 $ 17,554 $ 549,657 $ 644,019 Southeast 604,310 537,072 67,815 1,209,197 1,362,852 Florida 943,110 866,266 289,388 2,098,764 2,545,457 Midwest 527,001 460,279 15,869 1,003,149 1,132,081 Texas 581,417 512,925 95,833 1,190,175 1,315,943 West 1,235,457 1,191,834 227,850 2,655,141 2,955,283 Other homebuilding (a) 48,039 276,511 16,936 341,486 2,314,839 4,225,309 4,091,015 731,245 9,047,569 12,270,474 Financial Services — — — — 1,082,157 $ 4,225,309 $ 4,091,015 $ 731,245 $ 9,047,569 $ 13,352,631 (a) Other homebuilding primarily includes cash and equivalents, capitalized interest, intangibles, deferred tax assets, and other corporate items that are not allocated to the operating segments. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Notes | Our notes payable are summarized as follows ($000’s omitted): September 30, December 31, 5.500% unsecured senior notes due March 2026 (a) $ 500,000 $ 500,000 5.000% unsecured senior notes due January 2027 (a) 500,000 500,000 7.875% unsecured senior notes due June 2032 (a) 300,000 300,000 6.375% unsecured senior notes due May 2033 (a) 400,000 400,000 6.000% unsecured senior notes due February 2035 (a) 300,000 300,000 Net premiums, discounts, and issuance costs (b) (10,061) (11,142) Total senior notes $ 1,989,939 $ 1,988,858 Other notes payable 55,228 40,185 Notes payable $ 2,045,167 $ 2,029,043 Estimated fair value $ 2,000,378 $ 2,496,875 (a) Redeemable prior to maturity; guaranteed on a senior basis by certain wholly-owned subsidiaries. |
Fair Value Disclosures Fair Val
Fair Value Disclosures Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | Our assets and liabilities measured or disclosed at fair value are summarized below ($000’s omitted): Financial Instrument Fair Value Fair Value September 30, December 31, Measured at fair value on a recurring basis: Residential mortgage loans available-for-sale Level 2 $ 438,205 $ 947,139 IRLCs Level 2 (20,274) 8,549 Forward contracts Level 2 66,457 (579) Whole loan commitments Level 2 1,265 380 Disclosed at fair value: Cash, cash equivalents, and restricted cash Level 1 $ 291,398 $ 1,833,565 Financial Services debt Level 2 338,190 626,123 Revolving credit facility Level 2 319,000 — Senior notes payable Level 2 1,945,150 2,456,690 Other notes payable Level 2 55,228 40,185 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Changes in Warranty Liability | Changes to warranty liabilities were as follows ($000’s omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Warranty liabilities, beginning of period $ 110,605 $ 87,759 $ 107,117 $ 82,744 Reserves provided 22,840 22,993 66,398 61,801 Payments (23,137) (19,346) (65,466) (53,150) Other adjustments 24 317 2,283 328 Warranty liabilities, end of period $ 110,332 $ 91,723 $ 110,332 $ 91,723 |
Summary of Changes in Self-Insurance Liability | Changes in these liabilities were as follows ($000's omitted): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Balance, beginning of period $ 652,686 $ 620,617 $ 627,067 $ 641,779 Reserves provided 31,134 21,569 74,676 64,018 Adjustments to previously recorded reserves (2,169) (1,349) 1,889 (56,567) Payments, net (a) (2,358) (16,175) (24,339) (24,568) Balance, end of period $ 679,293 $ 624,662 $ 679,293 $ 624,662 (a) Includes net changes in amounts expected to be recovered from our insurance carriers, which are recorded in other assets (see below). |
Schedule of Future Minimum Lease Payments Required Under Leases | The future minimum lease payments required under our leases as of September 30, 2022 were as follows ($000's omitted): Years Ending December 31, 2022 (a) $ 6,437 2023 24,807 2024 17,922 2025 12,657 2026 9,519 Thereafter 22,000 Total lease payments (b) 93,342 Less: Interest (c) (7,476) Present value of lease liabilities (d) $ 85,866 (a) Remaining payments are for the three months ending December 31, 2022. (b) Lease payments include options to extend lease terms that are reasonably certain of being exercised and exclude $2.0 million of legally binding minimum lease payments for leases signed but not yet commenced at September 30, 2022. (c) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date. (d) The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 5.2 years and 5.5%, respectively, at September 30, 2022. |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Customer deposits | $ 979,528 | $ 979,528 | $ 844,785 | ||
Contract asset insurance renewals | 51,600 | 51,600 | 44,300 | ||
Residential mortgage loans available-for-sale fair value | 438,205 | 438,205 | 947,139 | ||
Residential mortgage loans available-for-sale aggregate outstanding principal balance | 454,700 | 454,700 | 924,500 | ||
Net gains from the sale of mortgages | 34,400 | $ 58,400 | $ 131,900 | $ 192,600 | |
Variability in future cash flows of derivative instruments in days | 90 days | ||||
Assets In-Scope Under Accounting Standards Codification 326 | 215,900 | $ 215,900 | 208,400 | ||
Interest rate lock commitments | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Derivative, notional amount | 1,300,000 | 1,300,000 | 337,900 | ||
Forward contracts | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Derivative, notional amount | 1,500,000 | 1,500,000 | 903,000 | ||
Whole loan commitments | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Derivative, notional amount | $ 270,900 | $ 270,900 | $ 310,000 |
Basis of Presentation (Other Ex
Basis of Presentation (Other Expense (Income), Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
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 income | 370 | 436 | 1,048 | 1,541 |
Interest expense | (65) | (115) | (216) | (387) |
Equity in earnings of unconsolidated entities | 446 | 604 | 2,390 | 5,620 |
Miscellaneous, net | 1,283 | 1,504 | 6,776 | 5,587 |
Total other expense, net | $ (25,194) | $ (4,750) | $ (30,830) | $ (8,011) |
Basis of Presentation (Earnings
Basis of Presentation (Earnings per share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
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 securities | 3,534 | 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 outstanding (shares) | 230,967 | 258,147 | 237,639 | 261,854 |
Effect of dilutive securities (shares) | 1,333 | 752 | 1,240 | 668 |
Diluted shares outstanding (shares) | 232,300 | 258,899 | 238,879 | 262,522 |
Earnings per share: | ||||
Basic earnings (usd per share) | $ 2.70 | $ 1.83 | $ 7.26 | $ 4.86 |
Diluted earnings (usd per share) | $ 2.69 | $ 1.82 | $ 7.22 | $ 4.85 |
Basis of Presentation (Fair Val
Basis of Presentation (Fair Value Of the Company's Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | $ 71,103 | $ 9,723 |
Accrued and Other Liabilities | 23,655 | 1,373 |
Interest rate lock commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 3,183 | 8,582 |
Accrued and Other Liabilities | 23,457 | 33 |
Forward contracts | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 66,620 | 757 |
Accrued and Other Liabilities | 163 | 1,336 |
Whole loan commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Other Assets | 1,300 | 384 |
Accrued and Other Liabilities | $ 35 | $ 4 |
Inventory (Major Components Of
Inventory (Major Components Of Inventory) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Homes under construction | $ 6,435,318 | $ 4,225,309 |
Land under development | 4,653,319 | 4,091,015 |
Raw land | 684,440 | 731,245 |
Total Inventory | $ 11,773,077 | $ 9,047,569 |
Inventory (Information Related
Inventory (Information Related To Interest Capitalized Into Homebuilding Inventory) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||||
Interest in inventory, beginning of period | $ 151,554 | $ 185,433 | $ 160,756 | $ 193,409 |
Interest capitalized | 33,235 | 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 |
Inventory (Summary of Interests
Inventory (Summary of Interests in Land Option Agreements) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | $ 449,458 | $ 404,922 |
Remaining Purchase Price | 6,015,795 | 5,457,878 |
Land options with VIEs | ||
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | 194,845 | 179,604 |
Remaining Purchase Price | 2,361,581 | 2,329,187 |
Other land options | ||
Variable Interest Entity [Line Items] | ||
Deposits and Pre-acquisition Costs | 254,613 | 225,318 |
Remaining Purchase Price | $ 3,654,214 | $ 3,128,691 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | ||||
Write-offs of deposits and pre-acquisition costs | $ 24,462 | $ 3,567 | $ 32,475 | $ 6,801 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 6 |
Segment Information (Operating
Segment Information (Operating Data By Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 3,943,816 | $ 3,479,050 | $ 11,057,617 | $ 9,568,324 |
Income (loss) before income taxes: | ||||
Income before income taxes | 811,277 | 620,402 | 2,275,743 | 1,653,928 |
Adjustment to self insurance reserves | (56,600) | |||
Loss on debt retirement | 0 | 0 | 0 | 61,469 |
Other homebuilding | ||||
Income (loss) before income taxes: | ||||
Loss on debt retirement | 61,500 | |||
Homebuilding | ||||
Income (loss) before income taxes: | ||||
Income before income taxes | 783,763 | 571,763 | 2,167,562 | 1,487,486 |
Homebuilding | Northeast | ||||
Revenues: | ||||
Revenues | 252,986 | 273,261 | 665,771 | 735,602 |
Income (loss) before income taxes: | ||||
Income before income taxes | 52,682 | 53,410 | 140,052 | 132,604 |
Homebuilding | Southeast | ||||
Revenues: | ||||
Revenues | 720,101 | 587,875 | 1,836,042 | 1,541,910 |
Income (loss) before income taxes: | ||||
Income before income taxes | 181,667 | 109,407 | 460,056 | 274,174 |
Homebuilding | Florida | ||||
Revenues: | ||||
Revenues | 953,778 | 740,569 | 2,714,485 | 2,157,374 |
Income (loss) before income taxes: | ||||
Income before income taxes | 220,850 | 133,642 | 628,979 | 382,682 |
Homebuilding | Midwest | ||||
Revenues: | ||||
Revenues | 562,891 | 505,012 | 1,569,332 | 1,337,416 |
Income (loss) before income taxes: | ||||
Income before income taxes | 79,168 | 72,537 | 230,419 | 196,205 |
Homebuilding | Texas | ||||
Revenues: | ||||
Revenues | 588,423 | 412,568 | 1,608,459 | 1,256,983 |
Income (loss) before income taxes: | ||||
Income before income taxes | 133,404 | 71,062 | 351,253 | 221,099 |
Homebuilding | West | ||||
Revenues: | ||||
Revenues | 792,928 | 868,283 | 2,423,901 | 2,250,407 |
Income (loss) before income taxes: | ||||
Income before income taxes | 149,001 | 173,137 | 468,873 | 403,039 |
Homebuilding | Other homebuilding | ||||
Income (loss) before income taxes: | ||||
Income before income taxes | (33,009) | (41,432) | (112,070) | (122,317) |
Homebuilding | Homebuilding | ||||
Revenues: | ||||
Revenues | 3,871,107 | 3,387,568 | 10,817,990 | 9,279,692 |
Financial Services | Financial Services | ||||
Revenues: | ||||
Revenues | 72,709 | 91,482 | 239,627 | 288,632 |
Income (loss) before income taxes: | ||||
Income before income taxes | $ 27,514 | $ 48,639 | $ 108,181 | $ 166,442 |
Segment Information (Land-Relat
Segment Information (Land-Related Charges by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | $ 24,462 | $ 3,567 | $ 32,475 | $ 6,820 |
Northeast | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 3,759 | 223 | 3,961 | 357 |
Southeast | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 5,889 | 1,915 | 9,724 | 3,253 |
Florida | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 4,881 | 209 | 6,493 | 642 |
Midwest | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 1,677 | 477 | 2,780 | 969 |
Texas | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 2,794 | 141 | 3,328 | 932 |
West | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | 5,462 | 602 | 6,189 | 667 |
Other homebuilding | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Land-related charges | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information (Total Asse
Segment Information (Total Assets And Inventory By Reportable Segment) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information | ||
Homes under construction | $ 6,435,318 | $ 4,225,309 |
Land under development | 4,653,319 | 4,091,015 |
Raw land | 684,440 | 731,245 |
Total Inventory | 11,773,077 | 9,047,569 |
Total Assets | 14,211,844 | 13,352,631 |
Financial Services | ||
Segment Reporting Information | ||
Homes under construction | 0 | 0 |
Land under development | 0 | 0 |
Raw land | 0 | 0 |
Total Inventory | 0 | 0 |
Total Assets | 672,290 | 1,082,157 |
Home sale revenues | ||
Segment Reporting Information | ||
Homes under construction | 6,435,318 | 4,225,309 |
Land under development | 4,653,319 | 4,091,015 |
Raw land | 684,440 | 731,245 |
Total Inventory | 11,773,077 | 9,047,569 |
Total Assets | 13,539,554 | 12,270,474 |
Home sale revenues | Northeast | ||
Segment Reporting Information | ||
Homes under construction | 419,660 | 285,975 |
Land under development | 220,715 | 246,128 |
Raw land | 50,689 | 17,554 |
Total Inventory | 691,064 | 549,657 |
Total Assets | 779,447 | 644,019 |
Home sale revenues | Southeast | ||
Segment Reporting Information | ||
Homes under construction | 983,353 | 604,310 |
Land under development | 489,200 | 537,072 |
Raw land | 88,649 | 67,815 |
Total Inventory | 1,561,202 | 1,209,197 |
Total Assets | 1,772,806 | 1,362,852 |
Home sale revenues | Florida | ||
Segment Reporting Information | ||
Homes under construction | 1,494,755 | 943,110 |
Land under development | 1,049,632 | 866,266 |
Raw land | 150,892 | 289,388 |
Total Inventory | 2,695,279 | 2,098,764 |
Total Assets | 3,202,654 | 2,545,457 |
Home sale revenues | Midwest | ||
Segment Reporting Information | ||
Homes under construction | 712,962 | 527,001 |
Land under development | 592,427 | 460,279 |
Raw land | 25,570 | 15,869 |
Total Inventory | 1,330,959 | 1,003,149 |
Total Assets | 1,468,414 | 1,132,081 |
Home sale revenues | Texas | ||
Segment Reporting Information | ||
Homes under construction | 832,674 | 581,417 |
Land under development | 659,635 | 512,925 |
Raw land | 127,291 | 95,833 |
Total Inventory | 1,619,600 | 1,190,175 |
Total Assets | 1,786,814 | 1,315,943 |
Home sale revenues | West | ||
Segment Reporting Information | ||
Homes under construction | 1,947,389 | 1,235,457 |
Land under development | 1,319,823 | 1,191,834 |
Raw land | 229,116 | 227,850 |
Total Inventory | 3,496,328 | 2,655,141 |
Total Assets | 3,860,637 | 2,955,283 |
Home sale revenues | Other homebuilding | ||
Segment Reporting Information | ||
Homes under construction | 44,525 | 48,039 |
Land under development | 321,887 | 276,511 |
Raw land | 12,233 | 16,936 |
Total Inventory | 378,645 | 341,486 |
Total Assets | $ 668,782 | $ 2,314,839 |
Debt (Summary of Senior Notes)
Debt (Summary of Senior Notes) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Net premiums, discounts, and issuance costs (b) | $ (10,061) | $ (11,142) |
Total senior notes | 1,989,939 | 1,988,858 |
Other notes payable | 55,228 | 40,185 |
Notes payable | 2,045,167 | 2,029,043 |
Estimated fair value | $ 2,000,378 | 2,496,875 |
Senior Notes | 5.500% unsecured senior notes due March 2026 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5.50% | |
Face amount | $ 500,000 | 500,000 |
Senior Notes | 5.000% unsecured senior notes due January 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 5% | |
Face amount | $ 500,000 | 500,000 |
Senior Notes | 7.875% unsecured senior notes due June 2032 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.875% | |
Face amount | $ 300,000 | 300,000 |
Senior Notes | 6.375% unsecured senior notes due May 2033 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.375% | |
Face amount | $ 400,000 | 400,000 |
Senior Notes | 6.000% unsecured senior notes due February 2035 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6% | |
Face amount | $ 300,000 | $ 300,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 27, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||||
Repayments of notes payable | $ 4,856,000 | $ 797,395,000 | ||||
Loss on debt retirement | $ 0 | $ 0 | 0 | 61,469,000 | ||
Other notes payable | 55,228,000 | 55,228,000 | $ 40,185,000 | |||
Current borrowing capacity | 1,300,000,000 | 1,300,000,000 | ||||
Maximum borrowing capacity | 1,800,000,000 | 1,800,000,000 | ||||
Revolving credit facility | 319,000,000 | 319,000,000 | ||||
Letters of credit outstanding | 340,700,000 | 340,700,000 | 298,800,000 | |||
Line of credit facility, remaining borrowing capacity | 590,300,000 | 590,300,000 | 701,200,000 | |||
Financial Services debt | 338,190,000 | 338,190,000 | 626,123,000 | |||
Joint Venture Debt | Joint Venture | ||||||
Debt Instrument [Line Items] | ||||||
Joint venture debt outstanding | $ 70,700,000 | $ 70,700,000 | ||||
Joint Venture Debt | Joint Venture | Joint Venture with 50% Interest | ||||||
Debt Instrument [Line Items] | ||||||
Ownership interest | 50% | 50% | ||||
Joint Venture Debt | Joint Venture | Joint Venture with 50% Interest | ||||||
Debt Instrument [Line Items] | ||||||
Joint venture debt outstanding | $ 42,000,000 | $ 42,000,000 | ||||
Notes Payables | ||||||
Debt Instrument [Line Items] | ||||||
Other notes payable | 55,200,000 | $ 55,200,000 | 40,200,000 | |||
Debt instrument term | 5 years | |||||
Notes payable issued to acquire land inventory | $ 19,900,000 | 42,600,000 | ||||
Notes Payables | Notes Payable Maturing in 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of notes payable | 426,000,000 | |||||
Notes Payables | Notes Payable Maturing in 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of notes payable | 200,000,000 | |||||
Notes Payables | Notes Payable Maturing in 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of notes payable | $ 100,000,000 | |||||
Line of Credit | Financial Services | ||||||
Debt Instrument [Line Items] | ||||||
Financial Services debt | 338,200,000 | 338,200,000 | 626,100,000 | |||
Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 655,000,000 | $ 655,000,000 | ||||
Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | Forecast | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 800,000,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility | $ 0 | |||||
Maximum | Notes Payables | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 6% | 6% | ||||
Maximum | Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | ||||
Minimum | Line of Credit | Amendment Effective September 24, 2018 through and including December 25, 2018 | Financial Services | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 360,000,000 | $ 360,000,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 31, 2022 | |
Class of Stock [Line Items] | |||||
Dividends | $ 34,624,000 | $ 36,166,000 | $ 106,650,000 | $ 110,305,000 | |
Payments for repurchase of common stock | $ 974,673,000 | $ 614,303,000 | |||
Increase in share repurchase authorization | $ 1,000,000,000 | ||||
Share repurchase plan | |||||
Class of Stock [Line Items] | |||||
Share repurchases (shares) | 21.8 | 12 | |||
Payments for repurchase of common stock | $ 974,700,000 | $ 614,300,000 | |||
Remaining value of stock repurchase programs authorization | $ 482,900,000 | 482,900,000 | |||
Shares withheld to pay taxes | |||||
Class of Stock [Line Items] | |||||
Payments for repurchase of common stock | $ 14,300,000 | $ 10,600,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax | 22.60% | 23.30% | 23.80% | 22.40% | |
Effective income tax reconciliation, tax credits, amount, home closed in prior Open tax year | $ 20.7 | $ 20.7 | |||
Deferred tax liabilities | (70) | (70) | $ (26.5) | ||
Gross unrecognized tax benefits | 23.5 | 23.5 | 22.5 | ||
Accrued interest and penalties on unrecognized tax benefits | $ 3.8 | $ 3.8 | $ 2.9 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Disclosed at fair value: | ||
Financial Services debt | $ 338,190 | $ 626,123 |
Revolving credit facility | 319,000 | |
Other notes payable | 55,228 | 40,185 |
Level 2 | ||
Disclosed at fair value: | ||
Financial Services debt | 338,190 | 626,123 |
Revolving credit facility | 319,000 | |
Senior notes payable | 1,945,150 | 2,456,690 |
Level 1 | ||
Disclosed at fair value: | ||
Cash, cash equivalents, and restricted cash | 291,398 | 1,833,565 |
Fair Value, Measurements, Recurring | Residential mortgage loans available-for-sale | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Assets, fair value | 438,205 | 947,139 |
Fair Value, Measurements, Recurring | Interest rate lock commitments | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Liabilities, fair value | (20,274) | 8,549 |
Fair Value, Measurements, Recurring | Forward contracts | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Liabilities, fair value | 66,457 | (579) |
Fair Value, Measurements, Recurring | Whole loan commitments | Level 2 | ||
Measured at fair value on a recurring basis: | ||
Liabilities, fair value | $ 1,265 | $ 380 |
Fair Value Disclosures - Narrat
Fair Value Disclosures - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of senior notes | $ 1,989,939 | $ 1,988,858 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of senior notes | $ 2,000,000 | $ 2,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) claim | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) claim | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Loss Contingencies [Line Items] | ||||||||
Letters of credit outstanding | $ 340,700 | $ 340,700 | $ 298,800 | |||||
Surety bonds outstanding | $ 2,200,000 | $ 2,200,000 | 1,800,000 | |||||
Maximum product warranty in years | 10 years | |||||||
Number of individual claims managed | claim | 1,000 | 1,000 | ||||||
Self-insurance liabilities | $ 679,293 | $ 624,662 | $ 679,293 | $ 624,662 | $ 652,686 | $ 627,067 | $ 620,617 | $ 641,779 |
Incurred but not reported percentage of liability reserves | 70% | 70% | 70% | |||||
Adjustment to self insurance reserves | (56,600) | |||||||
ROU assets | $ 69,300 | $ 69,300 | $ 74,300 | |||||
Operating lease liabilities | 85,866 | 85,866 | 92,700 | |||||
Additional ROU assets under operating leases | 3,300 | 2,100 | 7,500 | 15,200 | ||||
Payments on lease liabilities | 5,000 | 5,100 | 16,100 | 15,600 | ||||
Total lease expense | 14,300 | 10,600 | 40,500 | 31,200 | ||||
Variable lease costs | 3,300 | 1,600 | 7,700 | 5,600 | ||||
Short-term lease costs | 5,200 | $ 3,700 | 15,800 | $ 9,700 | ||||
Other Assets | ||||||||
Loss Contingencies [Line Items] | ||||||||
Recorded insurance receivables | $ 49,200 | $ 49,200 | $ 57,500 |
Commitments and Contingencies_3
Commitments and Contingencies (Changes To Warranty Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Warranty liabilities, beginning of period | $ 110,605 | $ 87,759 | $ 107,117 | $ 82,744 |
Reserves provided | 22,840 | 22,993 | 66,398 | 61,801 |
Payments | (23,137) | (19,346) | (65,466) | (53,150) |
Other adjustments | 24 | 317 | 2,283 | 328 |
Warranty liabilities, end of period | $ 110,332 | $ 91,723 | $ 110,332 | $ 91,723 |
Commitments and Contingencies_4
Commitments and Contingencies (Changes in Self-insurance Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in Self-insurance Liability [Roll Forward] | ||||
Balance, beginning of period | $ 652,686 | $ 620,617 | $ 627,067 | $ 641,779 |
Reserves provided | 31,134 | 21,569 | 74,676 | 64,018 |
Adjustments to previously recorded reserves | (2,169) | (1,349) | 1,889 | (56,567) |
Payments, net | (2,358) | (16,175) | (24,339) | (24,568) |
Balance, end of period | $ 679,293 | $ 624,662 | $ 679,293 | $ 624,662 |
Commitments and Contingencies_5
Commitments and Contingencies (Future Minimum Lease Payments Required Under Leases) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 | $ 6,437 | |
2023 | 24,807 | |
2024 | 17,922 | |
2025 | 12,657 | |
2026000 | 9,519 | |
Thereafter | 22,000 | |
Total lease payments | 93,342 | |
Less: Interest | (7,476) | |
Present value of lease liabilities | 85,866 | $ 92,700 |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 2,000 | |
Weighted average remaining lease term | 5 years 2 months 12 days | |
Weighted average discount rate | 5.50% |