Investor Presentation
       November 2008




1
Forward-Looking Statement
    Certain statements in this release constitute “forward-looking statements”
    within the me...
Company Overview

    • Pulte Homes is one of America’s largest home building
      companies with operations in 50 market...
Presentation Agenda

    • Industry Overview
       – Facts and figures
    • Pulte’s Short-Term Tactics & Long-Term Focus...
Industry Update




5
Homebuilding Downturn Persists
    • Overhang of excess unsold new home and existing
      home inventory continues to pla...
Buyer Demand Remains Low
                   New Home Sales
                      (Units 000)
    1,400
                   ...
Inventory of New Homes Declining,
    But Months Supply Still Elevated
                                                   ...
Builders Reduce New Home
    Construction in Response to Downturn

         2,400
                                        ...
10
Source: S&P
               D
                 ec




                                                      -5.0%
      ...
Pulte’s Short-Term
         Tactics and
      Long-Term Focus




11
Short-Term: Land & House Inventory
                                                  Lots Under Control

     • Lots under...
Short-Term: Land & House Inventory

     • Speculative units decreased
       – Spec units under production at Q3 2008
   ...
Short-Term: Generate Positive
     Cash Flow

     • Generated over $900 million of
       positive cash flow in Q4 2007, ...
Short-Term: Lower Cost Structure

     •Adjusting our SG&A levels in response to
      severity of housing downturn
      ...
Long-Term: Consistent Strategy

     • Financial discipline
       –Conservative leverage target

     • Product segmentat...
Long-Term: Maintain Financial
      Discipline
                                       Debt-to-Capitalization
     • Long-s...
Long-Term: Maintain Financial
      Discipline
                                                          Debt Maturity Gra...
Long-Term: Product Segmentation


        2007 Closings By Buyer Profile
      1st Time Buyer           17%
      1st Move...
Unmatched Active Adult Position
                     Through Del Webb Brand
            NORTHERN CALIFORNIA               ...
Long-Term: Ongoing Focus on Quality

     • Pulte continues to           2008 J.D. Power & Associates
       excel in cust...
Long-term
        Business
     Drivers Remain
         Positive




22
Macro Factors Remain Favorable

         U.S. Population Projections
                      (millions)

     450
          ...
Macro Factors Remain Favorable

                                        Immigrants Admitted to the U.S.
     1,400,000


 ...
Macro Factors Remain Favorable
                                                       Household Growth
                   ...
Competitive Advantages of
     Pulte Homes
     • Being a big builder, better able to weather a
       lengthier downturn
...
Summary
     • Industry downturn approximately 3 years in duration

     • Signs to look for when stabilization does occur...
Questions




28
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pulte homes 91DC7C77-0015-45F1-A981-8387FF35D0E1_phm_InvestorPresentation200812

  1. 1. Investor Presentation November 2008 1
  2. 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. 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. 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
  5. 5. Industry Update 5
  6. 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. 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. 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. 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. 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
  11. 11. Pulte’s Short-Term Tactics and Long-Term Focus 11
  12. 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. 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. 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. 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. 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
  17. 17. Long-Term: Maintain Financial Discipline Debt-to-Capitalization • Long-standing strategy 50% of 40% debt-to-cap or 45% lower 40% • Recent spikes largely 35% due to FAS 109 30% deferred tax asset 25% charges and non-cash 20% land impairment 15% charges 10% 5% 0% 8 02 03 04 06 05 07 '0 20 20 20 20 20 20 3 Q Net-Debt-to-Cap Debt-to-Cap 17
  18. 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. 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. 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. 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
  22. 22. Long-term Business Drivers Remain Positive 22
  23. 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. 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. 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. 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. 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
  28. 28. Questions 28

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