PulteGroup 2Q16 Earnings Call Notes

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PulteGroup (PHM) Q2 2016 Results

Richard J. Dugas, Jr. – Chairman, President & Chief Executive Officer, PulteGroup, Inc.

Land actions are consistent with shortening of positions

Yeah. Megan, this is Richard. I think I can help with that. We view everything we’re announcing today as a continuation and perhaps an enhancement of what we’ve already been doing, which is shortening the overall length of positions that we’re taking on the land side. We gave some good disclosure before that the last several years we’ve been buying much shorter positions. So that continues.”

Robert T. O’Shaughnessy – Chief Financial Officer & Executive Vice President

Decreasing our land acquisition as housing cycle is maturing

“Consistent with Richard’s comments and after several years of significant growth, we expect the rate of growth of our land acquisition spend to slow as we head into 2017. Recognizing that the current housing cycle is maturing, we are decreasing our land investment as a percentage of revenues, and could ultimately reduce the absolute dollars we spend depending upon our assessment of economic condition and their potential impact on the housing industry here in the U.S.”

Ryan R. Marshall – President

Recovery probably still has a few years left

“Government data as of May showing new home sales of 550,000 puts U.S. housing on track to deliver another year of roughly 10% growth. The trend is certainly positive. But after five years of recovery, we still remain well below the 50-year average, which is why we believe the recovery has a few years left. And while there is a lot of noise in the surrounding environment, there are certainly positives to be seen in the underlying economy, the job market, consumer confidence and the low mortgage rate conditions that are important drivers of ongoing demand.”

Demand conditions are stable

“The demand conditions we realized in Q2 are consistent with those suggested by some of the broader housing stats which point to a sustained recovery, but with pockets of stronger and weaker demand, depending on geography and buyer segment.”

Houston still showing great resilience

“Houston is still showing great resilience as demand continues to exceed expectations. Excessive rains earlier in the year have us behind on land development for Houston and Austin, but our teams are working hard to catch up on some of the delays. ”

First weeks of July have shown typical seasonal patterns

“Eric, this is Ryan. What I would tell you is that the first few weeks of July have continued to show typical seasonal selling patterns, and we continue to see local economies drive pockets of strength and/or weakness as we move across the country.”