Pultegroup, Inc. · NYSE:PHM
Pultegroup — 9th Annual J.P. Morgan Homebuilding & Building Products Conference 2016
23 slides from Pultegroup's conference presentation, May 17, 2016
Slide 1: Investor Presentation May 2016
The Quarry | Naples, FL Investor Presentation May 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements.” These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to s
Slide 3: Presentation Agenda
Presentation Agenda • PulteGroup Company Profile and Strategic Focus • Favorable Operating Conditions • Defined Land Investment Process • Unmatched Capacity to Serve Distinct Buyer Groups 2 2 2
Slide 4: PulteGroup Overview
PulteGroup Overview • Among the nation’s largest homebuilders with operations in approximately 50 major metro markets • Delivered over 655,000 homes since being founded in 1950 • Diversified product offering serving all major buyer groups • Unmatched presence in active adult market through Del Webb
Slide 5: Experienced Homebuilding Team
Experienced Homebuilding Team Richard Dugas Chairman & CEO (22 Years) Ryan Marshall President (15 Years) Bob O’Shaughnessy CFO (6 Years) Harmon Smith COO (26 Years) Tony Barbee Midwest Area (17 Years) John Chadwick West Area (24 Years) Greg Huff Southeast Area (14 Years) Peter Keane Florida Area (22
Slide 6: Operating in 50 of the Country's Top Metro Markets
Operating in 50 of the Country’s Top Metro Markets 27% 41% 32% 55
Slide 7: Diversified Across Primary Consumer Groups
Diversified Across Primary Consumer Groups First Time Move Up Active Adult 32% 37% 31% 2015 Closings by Buyer Group 6 66
Slide 8: Capital Allocation Priorities Aligned with Value Creation Strategy
Capital Allocation Priorities Aligned with Value Creation Strategy Share Repurchase ($ millions) • Priority #1: Invest in core business, including opportunistic M&A, to maintain or grow relative market share • Priority #2: Return funds through an established dividend • Priority #3: Routinely return
Slide 9: Q1 Financials Show Increased Growth in 2016
Q1 Financials Show Increased Growth in 2016 Q1 Backlog Value • Home sale revenues increased 28% ($ billions) to $1.4 billion Q1 closings increased 17% to 3,945 homes Average sales price gained 9% to $353,000, as prices moved higher among all buyer groups • Dollar value of net new orders increase
Slide 10: Favorable Operating Conditions
Favorable Operating Conditions Atwater Ranchers| Naperville, IL 9
Slide 11: Housing Recovery Remains on Track
Housing Recovery Remains on Track NEW HOME SALES (000) • 2015 new home sales of 500,000 up 15% over 2014, but well below historic average • Factors continue to support sustained growth in housing demand Favorable demographics 50 Year Avg and pent-up demand Low inventory of new and existing homes
Slide 12: Unique Housing Opportunities Across Demographic Spectrum
Unique Housing Opportunities Across Demographic Spectrum U.S. 2015 Population by Age 73.6M 75.3M 65.7M 74.9M 28.0M *Census.gov – projected population by single age, 2014 – 2060 (2015 Projection) 11
Slide 13: Supports for Sustained Growth in Demand
Supports for Sustained Growth in Demand Share of Children Ages 18 - 34 U.S. Household Estimates Still Living With Parents (millions) 1212
Slide 14: Defined Land Investment Process
Defined Land Investment Process Wood Creek | Holly Spring, NC 13
Slide 15: Disciplined Land Investment Process
Disciplined Land Investment Process • Project Feasibility Report • Feasibility report completed for Comprehensive review and every project analysis completed for every • Asset Management Committee transaction reviews and approves every 1. Project overview transaction to validate assumptions, 2. Fi
Slide 16: Consistent Assessment of Project Risk
Consistent Assessment of Project Risk IRR Threshold 18% 18% 18% 18% 18% 19% 19% 20% 20% 21% 21% 22% 22% 23% 24% 25% 26% 27% 28% 29% 30% Score 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 • Four major categories to determine risk profile 1. Strategic Marketing Location, marketabil
Slide 17: Land Pipeline Supportive of Volume Growth
Land Pipeline Supportive of Volume Growth • Land investment focused on Lots Under Control shorter, faster turning positions Project size averaging 125 lots Investment continues to be weighed toward communities serving move‐up buyers • First‐time buyers focus on closer‐ in and more urban location
Slide 18: Unmatched Capacity to Serve Distinct Buyer Groups
Unmatched Capacity to Serve Distinct Buyer Groups 17
Slide 19: First-Time Buyer Strategy
First‐Time Buyer Strategy • Investing in first-time buyer projects that generate acceptable returns Focus on closer-in communities; not betting on outlying, albeit lower cost, land positions • Ongoing work to lower overall product costs, but not targeting the lower price points of the segment • Gr
Slide 20: Sustained Strength of the Move-Up Buyer
Sustained Strength of the Move-Up Buyer • Multiyear strength as buyer group realizes better wage growth and credit availability • Majority of Company’s land investment targeted toward move-up buyers Ongoing mix shift toward the move-up buyer continues to raise ASP’s Wieland assets target move-up
Slide 21: Expanding Penetration of Active Adult Market
Expanding Penetration of Active Adult Market • Changing profile of active adult projects; Interest in Age Restricted Lifestyle 500 to 1,500 lots with right-sized amenity Communities Faster turning and less capital intensive communities • Legacy investment in large, highly amenitized New Opportun
Slide 22: In Summary
In Summary • Articulated strategy focused on long‐term success • Unmatched ability to serve all major buyer groups • Value Creation strategy goal to deliver better ROIC over the housing cycle and top quartile TSR over time • Return excess capital to shareholders 21
Slide 23: Corkscrew Shores | Estero, FL
Corkscrew Shores| Estero, FL 22
PulteGroup — 9th Annual J.P. Morgan Homebuilding & Building Products Conference 2016 on 6ix