PHM 12.31.13 Form 11-K 401k









UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K


[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2013

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


Commission File Number: 1-9804



PULTEGROUP, INC. 401(K) PLAN
(Full title of the plan)


PULTEGROUP, INC.
(Exact name of Issuer as specified in charter)


100 Bloomfield Hills Parkway, Suite 300
Bloomfield Hills, MI 48304
(248) 647-2750
(Address, including zip code, and telephone number and
area code, of Issuer's principal executive offices)








REQUIRED INFORMATION

4.     Financial Statements and Supplemental Schedule for the Plan

The PulteGroup, Inc. 401(k) Plan (the Plan) is subject to the Employee Retirement Income Security Act of 1974 (ERISA). In lieu of the requirements of Items 1-3 of this Form, the Plan is filing financial statements and supplemental schedule prepared in accordance with the financial reporting requirements of ERISA. The Plan financial statements as of December 31, 2013 and 2012 and for the year ended December 31, 2013 and supplemental schedule as of December 31, 2013, have been examined by Ernst & Young LLP, Independent Registered Public Accounting Firm, and their report is included herein.

EXHIBITS

23 Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP





PulteGroup, Inc. 401(k) Plan
Audited Financial Statements and Supplemental Schedule

December 31, 2013 and 2012, and
Year Ended December 31, 2013




Contents
 
Page
No.
 
 
 
 
Audited Financial Statements
 
 
 
 
 
 
 
 
 
Supplemental Schedule
 
 
 






Report of Independent Registered Public Accounting Firm
We have audited the accompanying statements of net assets available for benefits of the PulteGroup, Inc. 401(K) Plan as of December 31, 2013 and 2012, and the related statement of changes in net assets available for benefits for the year ended December 31, 2013. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the PulteGroup, Inc. 401(K) Plan at December 31, 2013 and 2012, and the changes in its net assets available for benefits for the year ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2013 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP


Detroit, Michigan
June 13, 2014




1



PulteGroup, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits

 
 
 
 
 
December 31,
 
2013
 
2012
Investments:
 
 
 
Money market and mutual funds
$
452,151,009

 
$
373,509,638

Common collective trust
32,882,678

 
33,736,225

Unitized employer stock fund
44,219,972

 
43,892,834

Total investments
529,253,659

 
451,138,697

 
 
 
 
Receivables:
 
 
 
Notes receivable from participants
5,837,680

 
5,284,368

 
 
 
 
Net assets reflecting investments at fair value
535,091,339

 
456,423,065

 
 
 
 
Adjustment from fair value to contract value for
    fully-benefit responsive investment contracts
(462,870
)
 
(935,714
)
 
 
 
 
Net assets available for benefits
$
534,628,469

 
$
455,487,351



See accompanying notes to financial statements.

2


PulteGroup, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2013
 
 
 
 
Additions
 
Contributions:
 
Employee
$
22,428,291

Employee rollovers
1,683,051

Employer
10,956,282

 
35,067,624

 
 
Interest income on notes receivable from participants
237,670

 
 
Investment income (loss):
 
Interest and dividends
13,196,827

Net realized and unrealized appreciation (depreciation)
    in fair value of investments
80,418,493

 
93,615,320

 
 
Total additions
128,920,614

 
 
Deductions
 
Benefit payments
(49,680,417
)
Administrative and other expenses
(99,079
)
Total deductions
(49,779,496
)
 
 
Net increase (decrease)
79,141,118

 
 
Net assets available for benefit:
 
Beginning of year
455,487,351

End of year
$
534,628,469



See accompanying notes to financial statements.


3


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements



1.
Description of Plan

General

The PulteGroup, Inc. 401(k) Plan (the Plan) is a defined contribution plan for eligible employees of PulteGroup, Inc. (the Company) and affiliated subsidiaries that have adopted the Plan. The Plan is administered by the 401(k) Committee (the Committee) appointed by the Board of Directors of the Company and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan assets are held and investment transactions are executed by Fidelity Management Trust Company (Fidelity) as trustee and recordkeeper. For more complete information, participants should refer to the summary plan description as well as the Plan document, which is available from the Company.

Eligibility

All non-union, salaried, sales, and hourly employees of the Company and its subsidiaries that have adopted the Plan are eligible to participate on the first day of the month coincident with or immediately following the date in which the employee completes 60 days of service with the Company.

Participant Loans

Generally, participants may borrow up to 50% of their account balance subject to a minimum loan of $1,000 and a maximum loan of $50,000 reduced by the highest outstanding loan balance during the preceding 12 months. The loans are secured by the balances in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Committee. Principal and interest are generally paid through payroll deductions.

Contributions

Contributions can be invested in various investment options provided by the Plan. Participants may change their investment directives and contribution amounts on a daily basis.

Participant Contributions - Contributions to participants' accounts are effected through voluntary withholdings from their compensation (elective deferrals). Participants may elect to contribute a percentage of their compensation to the Plan of not less than 1% and not more than 50%. Annual contributions for each participant are subject to participation and discrimination standards of Internal Revenue Code (the Code) Section 401(k)(3). Rollover contributions transferred from other qualified retirement plans or from conduit individual retirement accounts (IRAs) are accepted as permitted by the Plan.

Employer Matching Contributions - At the Committee's discretion, the Company contributes to the Plan an amount based on elective deferrals of each participant during each payroll period. During 2013, the employer matching contribution was equal to 100% of participant contributions, up to the first 3% of compensation contributed per payroll period, plus 50% of participant contributions up to the next 2% of compensation.

Catch-up Contributions - Participants who have reached an age of at least 50 years old by the end of the Plan year may elect to increase their elective deferrals as permitted under the Code Section 414(v).

Special Contributions - At the discretion of the Board of Directors of the Company, special contributions may be made and invested in the PulteGroup, Inc. Company Stock Fund. However, subsequent to the initial special contribution, participants may, at their discretion, reallocate these funds to other investments within the Plan's portfolio. Highly compensated employees who are covered under a stock plan are not eligible to receive special contributions. There were no special contributions for the year ended December 31, 2013.

4


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements (continued)


Allocations

Contributions to the Plan are allocated to participants' individual accounts as soon as administratively possible. Special contributions made by the Company and its subsidiaries, if any, are allocated as of the last day of the Plan year among the accounts of eligible participants.

PulteGroup, Inc. Company Stock Fund

The Plan invests in common stock of the Company through the PulteGroup, Inc. Company Stock Fund, a unitized employer stock fund. The PulteGroup, Inc. Company Stock Fund also holds cash or other short-term securities, although these are expected to be a small percentage of the fund.

Distributions

Participants or their beneficiaries may receive distributions of their account balances upon the earlier of reaching age 59½, death, or termination of service, as defined in the Plan. Further, the Committee may permit a participant who experiences a qualified financial hardship to receive a distribution of all or a portion of the participant's eligible account balance. Such distributions are generally made in a lump sum.

Vesting

A participant's account balance is fully vested and nonforfeitable as of their first day of eligibility.

Forfeitures

The remaining balance of forfeitures originating from a previous Plan merger totaled $17,552 at January 1, 2013. The Company used the remaining balance of forfeitures to offset fees associated with administering the Plan during the year ended December 31, 2013.

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will remain fully vested.

Administrative Expenses

Certain administrative expenses of the Plan, such as trustee and recordkeeping fees, were paid directly by the Company, while other administrative expenses, such as loan administration and some withdrawal fees, were paid directly by plan participants during 2013.

2.     Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Plan are prepared on the accrual basis of accounting.

Income Recognition

Purchases and sales of investments are recorded on a trade-date basis. Net appreciation (depreciation) in the fair value of investments represents the net amount of realized and unrealized gains and losses on those investments. Interest income is recorded on the accrual basis. Dividends are recorded when declared.

Investment Valuation

See Note 3.


5


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements (continued)


Payment of Benefits

Benefit payments to participants or beneficiaries are recorded upon distribution.

Notes Receivable from Participants

Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are deducted when they are incurred. No allowance for credit losses has been recorded as of December 31, 2013 or 2012. If a participant ceases to make loan repayments and the Company deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.  Because participants make loan repayments via payroll deductions, such a distribution generally only occurs in the event the loan balance remains unpaid following a participant's termination from the Company.

Excess Contributions Payable

Amounts payable to participants for contributions in excess of limits established by the Code, including gains or losses thereon, are recorded as a liability with a corresponding reduction to contributions. There were no excess contributions as of December 31, 2013 or 2012.

Use of Estimates 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and additions and deductions during the reporting period. Actual results could differ from those estimates.    

3.     Fair Value Measurements

Accounting Standards Codification (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 1
 
Fair value determined based on quoted prices in active markets for identical assets or liabilities.
 
 
 
Level 2
  
Fair 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 3
  
Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

    

6


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements (continued)


The Plan's financial instruments measured at fair value on a recurring basis as of December 31, 2013 and 2012 are summarized below:
Financial Instrument
 
Fair Value Hierarchy
 
Fair Value
 
 
2013
 
2012
Money market fund
 
Level 1
 
$
16,471,771

 
$
18,156,421

Common collective trust (stable value)
 
Level 2
 
32,882,678

 
33,736,225

Unitized employer stock fund
 
Level 1
 
44,219,972

 
43,892,834

Mutual funds:
 
 
 
 
 
 
U.S. equities
 
 Level 1
 
225,116,954

 
166,978,241

Lifecycle
 
 Level 1
 
106,814,616

 
92,427,278

Balanced
 
 Level 1
 
39,392,644

 
33,630,342

International equities
 
 Level 1
 
39,344,170

 
33,080,892

Bond
 
 Level 1
 
25,010,854

 
29,236,464


The Plan's investments in money market and mutual funds are stated at fair value based on quoted market prices. Investments in securities traded on a national securities exchange are valued based on published quotations on the last business day of the plan year. Mutual fund investments are valued based on the net asset value of shares held by the Plan as of the last business day of the plan year.
        
As described in ASC 946, “Financial Services - Investment Companies” (ASC 946), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan invests in investment contracts through a common collective trust, Fidelity Managed Income Portfolio II Class 1 Fund (FMIPII). As required by ASC 946, the statements of net assets available for benefits present the fair value of the FMIPII fund and the combined adjustment from fair value to contract value. The fair value of the Plan's interest in the FMIPII fund is equal to the sum of the fair value of each of the fund's investments, including synthetic wraps. The contract value of the FMIPII fund represents contributions plus earnings, less participant withdrawals and administrative expenses.

The fair value of the unitized employer stock fund reflects the combined fair value of the underlying stock and short-term cash position. The market value of the common stock portion of the fund is based on published quotations on the last business day of the plan year. The fair value of the cash position includes accrued dividends, expenses, and/or other liabilities.



7


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements (continued)


4.     Investments

Individual investments that represent 5% or more of the Plan's net assets available for benefits are as follows:
 
 
December 31,
 
 
2013
 
2012
Vanguard Institutional Index Fund Institutional Shares
 
$
81,787,309

 
$
64,406,516

Fidelity Low-Priced Stock Fund
 
49,756,589

 
38,200,735

PulteGroup, Inc. Company Stock Fund
 
44,219,972

 
43,892,834

T. Rowe Price Growth Stock Fund
 
40,799,156

 
29,868,326

Fidelity Balanced Fund
 
39,392,644

 
33,630,342

Fidelity Managed Income Portfolio II Class 1 Fund (at contract value) (a)
 
32,419,808

 
32,800,511

Spartan U.S. Bond Index Fund - Institutional Class
 
(b)
 
29,236,464


(a)
The fair value of the Plan's investment in the Fidelity Managed Income Portfolio II Class 1 Fund at December 31, 2013 and 2012 was $32,882,678 and $33,736,225, respectively.
(b)
Investment is less than 5% of the Plan's net assets available for benefits.

Net appreciation of the Plan's investments (including investments bought, sold, and held during the year) for the year ended December 31, 2013 was as follows:

 
 
2013
PulteGroup, Inc. Company Stock Fund
 
$
5,492,065

All other investments
 
74,926,428

Net appreciation (depreciation)
 
$
80,418,493


5.     Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service (IRS) dated February 11, 2014, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualified status. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.

Accounting principles generally accepted in the United States require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Company has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions, however, there are currently no audits for any tax periods in progress. The Company believes the Plan is no longer subject to income tax examination years prior to 2010.    

6.     Related-Party Transactions

The Plan invests in mutual funds managed by affiliates of the trustee and allows for investments in shares of the Company's common stock. These transactions with the trustee and the Company qualify as exempt party-in-interest transactions.



8


PulteGroup, Inc. 401(k) Plan
Notes to Financial Statements (continued)


7.     Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits.

8.     Reconciliation to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
 
 
December 31,
 
 
2013
 
2012
Net assets available for benefits per the financial statements
 
$
534,628,469

 
$
455,487,351

Adjustments from contract value to fair value for fully benefit-
    responsive investment contracts
 
462,870

 
935,714

Loans in default and deemed distributed
 
(34,716
)
 
(116,898
)
Net assets per the Form 5500
 
$
535,056,623

 
$
456,306,167


The following is a reconciliation of the total deductions per the financial statements to total expenses per the Form 5500:
 
 
Year Ended
 
 
December 31, 2013
Total deductions per the financial statements
 
$
(49,779,496
)
Adjustment for loans in default and deemed distributed
 
82,182

Total expenses per the Form 5500
 
$
(49,697,314
)

The following is a reconciliation of total investment income per the financial statements to the Form 5500:
 
 
Year Ended
 
 
December 31, 2013
Total additions per the financial statements
 
$
128,920,614

Adjustments from contract value to fair value for fully benefit-
    responsive investment contracts
 
(472,844
)
Total income per the Form 5500
 
$
128,447,770



9










Supplemental Schedule






















PulteGroup, Inc. 401(k) Plan
 
 
 
 
 
 
 
 
 
 EIN #38-2766606 Plan #001
 
 
 
 
 
 
 
 
 
Schedule H, Line 4i – Schedule of Assets
(Held at End of Year)
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Identity of Issuer,
Description of Investment Including
 
 
 
 
 
 
 
Borrower, Lessor,
Maturity Date, Rate of Interest,
 
Shares/
 
 
 
Current
 
or Similar Party
Collateral, Par, or Maturity Value
 
Units
 
Cost
 
 Value
 
 
 
 
 
 
 
 
 
 
The Vanguard Group of
   Investment Companies
Vanguard Institutional Index Fund Institutional Shares
 
493,148

 
**
 
$
81,787,309

 
 
Vanguard Total International Stock Index Fund
  Institutional Shares
 
119,087

 
**
 
13,338,989

 
 
Vanguard Prime Money Market Fund Institutional Shares
 
16,471,771

 
**
 
16,471,771

 
 
 
 
 
 
 
 
 
 
Morgan Stanley
Morgan Stanley Institutional Small Company Growth
   Fund Class I
 
1,033,871

 
**
 
21,246,045

 
 
 
 
 
 
 
 
 
 
American Funds
American Funds Washington Mutual Investors Fund
  Class A
 
382,450

 
**
 
15,080,001

 
 
 
 
 
 
 
 
 
 
American Beacon
American Beacon Small Cap Value Fund Institutional Class
 
570,007

 
**
 
15,498,496

 
 
 
 
 
 
 
 
 
 
T. Rowe Price
T. Rowe Price Growth Stock Fund
 
776,092

 
**
 
40,799,156

 
 
 
 
 
 
 
 
 
*
Fidelity Investments
Fidelity Balanced Fund
 
1,731,545

 
**
 
39,392,644

 
 
Fidelity Low-Priced Stock Fund
 
1,005,997

 
**
 
49,756,589

 
 
Fidelity Diversified International Fund
 
704,556

 
**
 
26,005,181

 
 
Fidelity Freedom Index Income W Fund
 
111,783

 
**
 
1,250,855

 
 
Fidelity Freedom Index 2000 Fund - Class W
 
117,665

 
**
 
1,333,144

 
 
Fidelity Freedom Index 2005 Fund - Class W
 
46,818

 
**
 
577,263

 
 
Fidelity Freedom Index 2010 Fund - Class W
 
282,628

 
**
 
3,643,078

 
 
Fidelity Freedom Index 2015 Fund - Class W
 
569,587

 
**
 
7,467,291

 
 
Fidelity Freedom Index 2020 Fund - Class W
 
1,267,140

 
**
 
17,106,385

 
 
Fidelity Freedom Index 2025 Fund - Class W
 
1,291,464

 
**
 
18,235,467

 
 
Fidelity Freedom Index 2030 Fund - Class W
 
1,402,350

 
**
 
20,179,814

 
 
Fidelity Freedom Index 2035 Fund - Class W
 
799,114

 
**
 
11,874,836

 
 
Fidelity Freedom Index 2040 Fund - Class W
 
1,111,706

 
**
 
16,608,883

 
 
Fidelity Freedom Index 2045 Fund - Class W
 
360,435

 
**
 
5,431,754

 
 
Fidelity Freedom Index 2050 Fund - Class W
 
176,444

 
**
 
2,676,656

 
 
Fidelity Freedom Index 2055 Fund - Class W
 
36,127

 
**
 
429,190

 
 
Fidelity Managed Income Portfolio II Class 1 Fund
 
32,419,808

 
**
 
32,882,678

 
 
Spartan U.S. Bond Index Fund - Institutional Class
 
2,201,660

 
**
 
25,010,854

 
 
Spartan External Market Index Advantage
 
17,772

 
**
 
949,358

 
 
 
 
 
 
 
 
 
*
Company Stock
PulteGroup, Inc. Company Stock Fund
 
3,809,541

 
**
 
44,219,972

 
 
 
 
 
 
 
 
 
*
Participant Loans
Individual participant loans with varying maturity
   dates and interest rates ranging from 4.25% to 10.00%
 
 
 
 
 
5,837,680

 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
 
$
535,091,339

 
 
 
 
 
 
 
 
 
 
There were no investment assets reportable as acquired and disposed of during the year.
 
 
 
 
 
 
 
 
 
*
Party in interest.
 
 
 
 
 
 
 
**
Participant-directed investments, cost information is omitted.

11


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
PULTEGROUP, INC. 401(K) PLAN
 
 
By:
PulteGroup, Inc.
 
 
 
Plan Administrator
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ James R. Ellinghausen
 
 
 
 
 
 
 
James R. Ellinghausen
 
 
 
Executive Vice President, Human Resources
 
 
 
 
 
 
 
 
 
Date:
June 13, 2014


12