PULTEGROUP INC/MI/PHM

PULTEGROUP INC/MI/ Fair Value Disclosure

10-KFiled Feb 4, 20262 min read
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 1Fair value determined based on quoted prices in active markets for identical assets or liabilities.
Level 2Fair 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 3Fair 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 InstrumentFair Value
Hierarchy		Fair Value
December 31,
2025		December 31,
2024
Measured at fair value on a recurring basis:
Residential mortgage loans available-for-saleLevel 2$613,665 $629,582 
IRLCsLevel 2(19,370)(13,494)
Forward contractsLevel 2(91)11,290 
Whole loan commitmentsLevel 2(61)(30)
Measured at fair value on a non-recurring basis:
House and land inventoryLevel 3$55,119 $20,016 
Disclosed at fair value:
Cash and equivalents (including restricted cash)Level 1$2,008,776 $1,653,680 
Financial Services debtLevel 2532,338 526,906 
Senior notes payableLevel 21,708,211 1,665,504 
Other notes payableLevel 247,185 35,766 

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. 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. See Note 1 for a more detailed discussion of these derivative instruments.

Certain assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. The non-recurring fair values included in the above table represent only those assets whose carrying values were adjusted to fair value during the quarterly period ended as of the respective balance sheet dates. See Note 1 for a more detailed discussion of the valuation methods used for inventory.

The carrying amounts of cash and equivalents, Financial Services debt, Other notes payable and the Revolving Credit Facility approximate their fair values due to their short-term nature and floating interest rate terms. The fair values of the Senior notes payable 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 the senior notes payable was $1.6 billion at both December 31, 2025 and December 31, 2024.

Historical Timeline

Fiscal YearFiled
2025Feb 4, 2026Showing above
2024Feb 6, 2025
2023Feb 5, 2024
2022Feb 6, 2023
2021Feb 7, 2022
2020Feb 2, 2021
2019Jan 30, 2020
2018Jan 31, 2019
2017Feb 7, 2018
2016Feb 1, 2017
2015Feb 8, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance