In a November 3, 2010 conference call, Nishu Sood, Financial Analyst for Deutsche Bank AG, asked Richard Dugas, Chairman, President, and Chief Executive Officer of Pulte Group, Inc., the following question:
“I just wanted to follow up on the construction, the warranty charges. I would expect on an ongoing basis in any given quarter you’re going to have a number of claims, this is an ongoing part of the business because of the complexity of the construction process, but a charge of this size kind of implies that there was something systematic, maybe among a product line or in a region or something. I was just wondering if you could be a little more specific in terms of describing the patterns or the (inaudible) of the claims that emerged here. Just on an operating basis, so we can have a better sense of what drove such a large charge in one quarter.”
“...We did not see any specific region of the country that jumped out at us. What was unusual here was the number of claims we received in a particular quarter that was completely unforeseen. Most of them related to water intrusion issues…”
Good question, Mr. Sood! Too bad that you didn’t get a straight answer. Dugas, however, did admit that his company, which touts itself as “Master Builder”, has WIDESPREAD problems with water intrusion (bad stucco) in their houses.
Some “Master Builder”!