2. Forward-Looking Statement
Certain statements in this release constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such factors include,
among other things, (1) general economic and business conditions; (2) interest
rate changes and the availability of mortgage financing; (3) continued volatility
and potential further deterioration in the debt and equity markets; (4)
competition; (5) the availability and cost of land and other raw materials used
by the Company in its homebuilding operations; (6) the availability and cost of
insurance covering risks associated with the Company’s business; (7) shortages
and the cost of labor; (8) weather related slowdowns; (9) slow growth
initiatives and/or local building moratoria; (10) governmental regulation,
including the effects from the Emergency Economic Stabilization Act and the
interpretation of tax, labor and environmental laws; (11) changes in consumer
confidence and preferences; (12) required accounting changes; (13) terrorist
acts and other acts of war; and (14) other factors of national, regional and
global scale, including those of a political, economic, business and competitive
nature. See the Company’s Annual Report on Form 10-K and Annual Report to
Shareholders for the year ended December 31, 2007 and other public filings with
the Securities and Exchange Commission for a further discussion of these and
other risks and uncertainties applicable to Pulte’s business. Pulte undertakes no
duty to update any forward-looking statement whether as a result of new
information, future events or changes in Pulte's expectations.
2
3. Company Overview
• Pulte Homes is one of America’s largest home building
companies with operations in 50 markets and 27 states.
• During our 58-year history, the company has delivered
more than 500,000 new homes.
• Pulte Homes ranked highest in the 2008 annual J.D.
Power and Associates® New Home-Builder Customer
Satisfaction Study, and has earned more top-three
finishes than any other homebuilder since 2000.
• Under our Del Webb brand, Pulte is the nation's largest
builder of active adult communities for people age 55 and
older.
3
4. Presentation Agenda
• Industry Overview
– Facts and figures
• Pulte’s Short-Term Tactics & Long-Term Focus
– Generate cash and focus on the balance sheet
– Manage house and land inventory
– Align cost structure with current low demand
environment
– Maintain financial discipline
– Product segmentation and quality focus
• Long-Term Drivers Remain Positive
4
6. Homebuilding Downturn Persists
• Overhang of excess unsold new home and existing
home inventory continues to plague the industry
• Cancellation rates remain above historical levels
• Low mortgage availability dampens buyer demand
• Buyer confidence remains under pressure
• Record level of impairments and land-related
charges due to lower sales prices and absorptions
in many major markets
6
7. Buyer Demand Remains Low
New Home Sales
(Units 000)
1,400
• Sales down over 60%
1,200 from peak 2005 levels
1,000
• Fear of continued
declines in home prices
800
keeps buyers on the
600
sidelines
• Tighter mortgage
400
liquidity impacts buyer
200 ability to obtain
financing
0
8
7
6
5
4
Se 08
Se 07
Se 06
Se 5
'0
'0
'0
'0
'0
0
'
'
'
'
pt
pt
pt
ar
ar
ar
p
p
ar
Se
M
M
M
M
Source: U.S. Census Bureau SAAR Data
7
8. Inventory of New Homes Declining,
But Months Supply Still Elevated
New Homes For Sale
600,000 12
NH For Sale
Months Supply
500,000 10
400,000
Months Supply
Homes for Sale
8
300,000 6
200,000 4
100,000 2
0 0
Jun '05
Jun '06
June '07
Jun '08
Mar '05
Sep '05
Mar '06
Mar '07
Mar '08
Dec '03
Dec '04
Dec '05
Sept '06
Dec '06
Sept '07
Dec '07
Sept '08
Nov '08
Source: U.S. Census Bureau SAAR Data
8
9. Builders Reduce New Home
Construction in Response to Downturn
2,400
Housing Starts
SF Starts
Permits
2,000 Line 4
1,600
1,200
800
400
0
Dec Dec Mar June Sept Dec Mar June Sept Dec Mar June Sept Nov
'04 '05 '06 '06 '06 '06 '07 '07 '07 '07 '08 '08 '08 '08
Source: U.S. Census Bureau SAAR Data
9
10. 10
Source: S&P
D
ec
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
-20.0%
-15.0%
-10.0%
D '0
ec 1
D '0
ec 2
M '0
ar 3
Ju '04
n
Se '0
p 4
Accelerates
D '04
ec
M '0
ar 4
Ju '05
n
Se '0
p 5
D '05
ec
M '0
ar 5
Ju '06
Se n '0
p 6
D t '0
ec 6
M '0
a 6
Ju r ' 0
ne 7
Se '0
p 7
D t '0
ec 7
M '0
a 7
Ju r '
ne 08
Ju '0
ly 8
Au '0
g 8
Se '08
p
Decline in Existing Home Prices
Au '0
g 8
Existing Home Prices
Se '08
S&P Case-Shiller Home Price Index
p
O '08
ct
'0
8
12. Short-Term: Land & House Inventory
Lots Under Control
• Lots under control at 400,000
Owned Optioned Pending
end of Q3 ‘08 reduced 350,000
25% compared with a 300,000
year ago (and 65%
lower vs. 3Q ’05) 250,000
200,000
• Will continue to limit
land acquisition and 150,000
development to current 100,000
projects and takedowns
on finished lots where 50,000
absorption pace and 0
margin are acceptable
5
6
7
8
2
3
4
'0
'0
'0
'0
'0
'0
'0
pt
Se
12
13. Short-Term: Land & House Inventory
• Speculative units decreased
– Spec units under production at Q3 2008
reduced by 7% from prior year third
quarter
– Cancellations usually translate into new
specs, placing more pressure on keeping
spec levels down
– Goal is to start limited number of new
specs and drive down total homes under
production to lowest possible level in each
market
13
14. Short-Term: Generate Positive
Cash Flow
• Generated over $900 million of
positive cash flow in Q4 2007, and
ended with $1.1 billion of cash at end
of 2007
• Paid down $313 million of senior notes
during the 2nd quarter of 2008
• Ended Q3 2008 with approximately
$1.2 billion of cash
14
15. Short-Term: Lower Cost Structure
•Adjusting our SG&A levels in response to
severity of housing downturn
– Homebuilding overhead expense 30% lower in
first nine months of 2008 vs. prior year period
– Continue to focus on managing SG&A spend
given weak demand environment
15
16. Long-Term: Consistent Strategy
• Financial discipline
–Conservative leverage target
• Product segmentation
–Active adult focus
• Quality and customer satisfaction
–Focus on “customer delight” pays off
• Operational Excellence
–Long-term construction efficiency; reduce labor
and material costs; simplify design, specifications
16
18. Long-Term: Maintain Financial
Discipline
Debt Maturity Graph
$1,200
• Average senior note $1,100
maturity is 12+ years
$1,000
$900
• Company retired $313
$800
million of senior notes
maturing in 2009; no $700
$ millions
other maturities until $600
2011 $500
$400
• Revolving credit facility $300
that matures in 2012
$200
$100
$0
15
17
08
09
10
11
13
14
+
32
20
20
20
20
20
20
20
20
20
18
19. Long-Term: Product Segmentation
2007 Closings By Buyer Profile
1st Time Buyer 17%
1st Move Up Buyer 22%
2nd Move Up Buyer 15%
Active Adult 46%
Pulte Homes
Del Webb
DiVosta
19
20. Unmatched Active Adult Position
Through Del Webb Brand
NORTHERN CALIFORNIA ILLINOIS MASSACHUSETTS
Woodbridge Sun City at Great Island
Glenbrooke Huntley INDIANA
The Club at WestPark Shorewood Glen Britton Falls CONNECTICUT
Sierra Canyon Edgewater Village at
Sun City Lincoln Hills Grand Dominion MICHIGAN Oxford Greens
Bridgewater
Grand Reserve VIRGINIA
Celebrate
Potomac Green
SOUTHERN CALIFORNIA
Solera at Apple Valley
MARYLAND
Solera at Kern Canyon
Chesapeake
Sun City Shadow Hills
Rancho Diamante TENNESSEE Carroll Vista
Providence
NORTH CAROLINA
Carolina Preserve
Carolina Ridge
COLORADO
NEVADA Anthem Ranch SOUTH CAROLINA
Sun City Anthem Sun City Hilton Head
Sun City Aliante ARIZONA Sun City Carolina
Sonora Lakes
Solera at Anthem GEORGIA
Solera at Johnson Ranch Cane Bay
Madiera Canyon Sun City Peachtree
Sun City Festival
Solera at Stallion Village at Deaton Creek OHIO
Mountain Fireside at Desert Ridge
Lake Oconee Pioneer Ridge
Sun City Mesquite Fireside at Norterra
TEXAS
Sierra Canyon Anthem Parkside
Sun City Texas FLORIDA NEW JERSEY
Anthem at Merrill Ranch
Frisco Lakes Sweetwater Centennial Mill
Sun City Anthem at Merrill
Ranch Hill Country Retreat Bella Trae Wanaque Reserve
Stone Creek River Pointe
Ave Maria
Riverwood at Nocatee
La Cresta
20
21. Long-Term: Ongoing Focus on Quality
• Pulte continues to 2008 J.D. Power & Associates
excel in customer Customer Satisfaction Study
satisfaction
– Since 2000, Pulte has Customer Satisfaction Rankings
earned more top-three
finishes than any other Pulte Homes operations
builder in annual J.D.
#1 in 11 markets
Power and Associates
study 20 top-three finishes
• History shows that New-Home Design Rankings*
quality pays:
Pulte Homes operations
– Lowers customer
acquisition costs #1 in 6 markets
– Advantage in New-Home Quality Rankings*
working with
local municipalities Pulte Homes operations
to get land entitled
#1 in 7 markets
– Reduces service
expense and
litigation risk
* New areas of study added in 2007
21
23. Macro Factors Remain Favorable
U.S. Population Projections
(millions)
450
• Data from Census
400
Bureau shows U.S.
350 population passed 300
300 million people in 2007
250 • Rate of growth
accelerating, with
200
population expected to
150 be near 400 million by
100 2040
50
0
'00 '05 '10 '20 '30 '40
Source: U.S. Census Bureau
23
24. Macro Factors Remain Favorable
Immigrants Admitted to the U.S.
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Avg
Source: U.S. Census Bureau
24
25. Macro Factors Remain Favorable
Household Growth
(millions)
• According to the Joint 1.5
Center for Housing
Studies: 1.4
– Total household
growth in the next
1.3
decade will range from
nearly 1.3 million to
over 1.4 million homes 1.2
annually.
– Immigration will be a 1.1
key driver of the
increase
1
1995 to 2000- 2010- 2010-
2000 2006 2020* 2020**
*Assumes recent pace of immigration
**Assumes 30% reduction in immigration Source: Joint Center for Housing Studies 2008
25
26. Competitive Advantages of
Pulte Homes
• Being a big builder, better able to weather a
lengthier downturn
• Better economies of scale resulting from efforts to
lower costs, improve efficiency
• Leading builder of active adult communities
through the Del Webb brand
• Focus on quality and customer satisfaction as
evidenced by J.D. Power awards received
• Balance sheet focused
26
27. Summary
• Industry downturn approximately 3 years in duration
• Signs to look for when stabilization does occur:
– Improving buyer sentiment
– Positive traffic and order trends
– Home inventory levels (new and existing) and months’
supply of homes begin to decline
– Cancellation rates retreating toward historical levels
• Pulte continues to focus on its short-term tactics
– Generate cash / balance sheet focused
– Properly manage investment in land and house inventory
– Drive costs lower through matching SG&A costs to current
levels of buyer demand
• Long-term drivers remain supportive of future demand
27
