ATLANTA, July 23, 2015 /PRNewswire/ -- PulteGroup,
Inc. (NYSE: PHM) announced today financial results for its second
quarter ended June 30, 2015.
For the quarter, the Company reported net income of $103 million, or $0.28 per share, including a pretax benefit of
$27 million, or $0.05 per share, resulting from a legal
settlement in the period. Prior year net income of
$42 million, or $0.11 per share, included pretax charges of
$88 million, or $0.14 per share, for insurance reserves and
office relocation costs.
"We are very pleased with market conditions as solid buyer
demand helped to drive an 11% increase in the value of new orders
to $1.8 billion, our highest
quarterly order value since 2007," said Richard J. Dugas, Jr., Chairman, President and
Chief Executive Officer of PulteGroup. "Within this positive
demand environment, we continue to demonstrate disciplined capital
allocation consistent with our Value Creation strategy by growing
our land and community pipeline, while simultaneously paying down
$238 million of debt and returning
$243 million to shareholders through
share repurchases and dividends.
"Demand trends experienced throughout the first half of 2015
demonstrate that the recovery in U.S. housing remains on track and
continues to be supported by an improving economy, better
employment, rising consumer confidence and a low interest rate
environment. With our strong margins and a backlog of almost
9,000 sold homes to be built, PulteGroup is extremely well
positioned to capitalize on these favorable conditions and continue
delivering outstanding financial results in the coming
quarters."
Second Quarter Results
Home sale revenues for the second quarter totaled $1.2 billion, which is unchanged from the prior
year. Revenues for the period reflect a 1% increase in
average selling price to $332,000,
offset by a 1% decrease in closings to 3,744 homes.
The Company's second quarter home sale gross margin was 23.3%,
an increase of 60 basis points from the first quarter of 2015 and a
decrease of 30 basis points from the comparable prior year
period. Homebuilding SG&A expense for the quarter was
$130 million, or 10.5% of home sale
revenues, compared with $230 million,
or 18.4% last year. Second quarter 2015 SG&A includes a
benefit of $27 million relating to a
legal settlement, whereas prior year SG&A included charges of
$88 million for insurance reserves
and office relocation costs.
The value of net new orders for the second quarter increased 11%
to $1.8 billion. On a unit
basis, net new orders for the period increased 7% to 5,118
homes. The Company operated out of 630 communities in the
quarter, an increase of 7% from the second quarter of 2014.
PulteGroup's quarter-end backlog was 8,998 homes valued at
$3.1 billion, compared with a prior
year backlog of 8,179 homes with a value of $2.8 billion. The average price of homes in
backlog was $343,000 which is up 1%
over last year and up 3% from the average selling price of homes
delivered in the second quarter.
The Company's financial services operations reported second
quarter pretax income of $10 million
compared with $9 million in
2014. Mortgage capture rate for the quarter was 83%, compared
with 80% in the prior year.
During the quarter, PulteGroup repurchased 10.7 million shares
of common stock for $213 million, or
an average price of $19.90 per
share. The Company also used available cash to retire
$238 million of bonds which matured
during the second quarter. The Company ended the period with
$478 million of cash.
A conference call discussing PulteGroup's second quarter 2015
results is scheduled for Thursday, July 23,
2015, at 8:30 a.m. Eastern
Time. Interested investors can access the live webcast
via PulteGroup's corporate website at www.pultegroupinc.com.
Forward-Looking Statements
This press release includes "forward-looking statements."
These statements are subject to a number of risks, uncertainties
and other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words "believe," "expect,"
"intend," "estimate," "anticipate," "project," "may," "can,"
"could," "might," "will" and similar expressions identify
forward-looking statements, including statements related to
expected operating and performing results, planned transactions,
planned objectives of management, future developments or conditions
in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future.
Such risks, uncertainties and other factors include, among other
things: interest rate changes and the availability of mortgage
financing; continued volatility in the debt and equity markets;
competition within the industries in which PulteGroup operates; the
availability and cost of land and other raw materials used by
PulteGroup in its homebuilding operations; the impact of any
changes to our strategy in responding to the cyclical nature of the
industry, including any changes regarding our land positions; the
availability and cost of insurance covering risks associated with
PulteGroup's businesses; shortages and the cost of labor; weather
related slowdowns; slow growth initiatives and/or local building
moratoria; governmental regulation directed at or affecting the
housing market, the homebuilding industry or construction
activities; uncertainty in the mortgage lending industry, including
revisions to underwriting standards and repurchase requirements
associated with the sale of mortgage loans; the interpretation of
or changes to tax, labor and environmental laws; economic changes
nationally or in PulteGroup's local markets, including inflation,
deflation, changes in consumer confidence and preferences and the
state of the market for homes in general; legal or regulatory
proceedings or claims; required accounting changes; terrorist acts
and other acts of war; and other factors of national, regional and
global scale, including those of a political, economic, business
and competitive nature. See PulteGroup's Annual Report on
Form 10-K for the fiscal year ended December
31, 2014, and other public filings with the Securities and
Exchange Commission (the "SEC") for a further discussion of these
and other risks and uncertainties applicable to our
businesses. PulteGroup undertakes no duty to update any
forward-looking statement, whether as a result of new information,
future events or changes in PulteGroup's expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, GA, is one of America's largest
homebuilding companies with operations in approximately 50 markets
throughout the country. Through its brand portfolio that
includes Centex, Pulte Homes, Del
Webb and DiVosta Homes, the Company is one of the industry's
most versatile homebuilders able to meet the needs of multiple
buyer groups and respond to changing consumer demand.
PulteGroup conducts extensive research to provide homebuyers with
innovative solutions and consumer inspired homes and communities to
make lives better.
For more information about PulteGroup, Inc. and PulteGroup
brands, go to www.pultegroupinc.com; www.pulte.com; www.centex.com;
www.delwebb.com and www.divosta.com.
PulteGroup,
Inc.
Consolidated
Results of Operations
($000's omitted,
except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
Homebuilding
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,243,077
|
|
|
$
|
1,246,462
|
|
|
$
|
2,331,235
|
|
|
$
|
2,334,477
|
|
Land sale
revenues
|
6,460
|
|
|
8,527
|
|
|
24,002
|
|
|
14,511
|
|
|
1,249,537
|
|
|
1,254,989
|
|
|
2,355,237
|
|
|
2,348,988
|
|
Financial
Services
|
30,754
|
|
|
31,198
|
|
|
58,352
|
|
|
56,093
|
|
Total
revenues
|
1,280,291
|
|
|
1,286,187
|
|
|
2,413,589
|
|
|
2,405,081
|
|
|
|
|
|
|
|
|
|
Homebuilding Cost
of Revenues:
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
953,280
|
|
|
952,692
|
|
|
1,794,425
|
|
|
1,781,295
|
|
Land sale cost of
revenues
|
5,312
|
|
|
6,832
|
|
|
18,691
|
|
|
11,843
|
|
|
958,592
|
|
|
959,524
|
|
|
1,813,116
|
|
|
1,793,138
|
|
Financial Services
expenses
|
20,767
|
|
|
22,114
|
|
|
43,308
|
|
|
25,436
|
|
Selling, general and
administrative expenses
|
130,119
|
|
|
229,767
|
|
|
291,431
|
|
|
374,655
|
|
Other expense,
net
|
4,998
|
|
|
9,324
|
|
|
6,134
|
|
|
23,155
|
|
Interest
income
|
(856)
|
|
|
(1,115)
|
|
|
(1,955)
|
|
|
(2,226)
|
|
Interest
expense
|
208
|
|
|
203
|
|
|
395
|
|
|
416
|
|
Equity in earnings of
unconsolidated entities
|
(1,164)
|
|
|
(1,311)
|
|
|
(2,271)
|
|
|
(7,202)
|
|
Income before income
taxes
|
167,627
|
|
|
67,681
|
|
|
263,431
|
|
|
197,709
|
|
Income tax
expense
|
64,303
|
|
|
25,801
|
|
|
105,136
|
|
|
81,010
|
|
Net income
|
$
|
103,324
|
|
|
$
|
41,880
|
|
|
$
|
158,295
|
|
|
$
|
116,699
|
|
|
|
|
|
|
|
|
|
Per
share:
|
|
|
|
|
|
|
|
Basic
earnings
|
$
|
0.28
|
|
|
$
|
0.11
|
|
|
$
|
0.43
|
|
|
$
|
0.31
|
|
Diluted
earnings
|
$
|
0.28
|
|
|
$
|
0.11
|
|
|
$
|
0.43
|
|
|
$
|
0.30
|
|
Cash dividends
declared
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.16
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
Number of shares
used in calculation:
|
|
|
|
|
|
|
|
Basic
|
361,009
|
|
|
376,072
|
|
|
363,863
|
|
|
377,410
|
|
Effect of dilutive
securities
|
3,232
|
|
|
3,592
|
|
|
3,297
|
|
|
3,703
|
|
Diluted
|
364,241
|
|
|
379,664
|
|
|
367,160
|
|
|
381,113
|
|
PulteGroup,
Inc.
Condensed
Consolidated Balance Sheets
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
460,361
|
|
|
$
|
1,292,862
|
|
Restricted
cash
|
17,174
|
|
|
16,358
|
|
House and land
inventory
|
4,888,560
|
|
|
4,392,100
|
|
Land held for
sale
|
88,513
|
|
|
101,190
|
|
Land, not owned,
under option agreements
|
98,264
|
|
|
30,186
|
|
Residential mortgage
loans available-for-sale
|
269,544
|
|
|
339,531
|
|
Investments in
unconsolidated entities
|
40,232
|
|
|
40,368
|
|
Other
assets
|
561,034
|
|
|
513,032
|
|
Intangible
assets
|
116,665
|
|
|
123,115
|
|
Deferred tax assets,
net
|
1,617,609
|
|
|
1,720,668
|
|
|
$
|
8,157,956
|
|
|
$
|
8,569,410
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
290,436
|
|
|
$
|
270,516
|
|
Customer
deposits
|
217,315
|
|
|
142,642
|
|
Accrued and other
liabilities
|
1,292,321
|
|
|
1,343,774
|
|
Income tax
liabilities
|
48,774
|
|
|
48,722
|
|
Financial Services
debt
|
119,271
|
|
|
140,241
|
|
Senior
notes
|
1,583,580
|
|
|
1,818,561
|
|
|
3,551,697
|
|
|
3,764,456
|
|
|
|
|
|
Shareholders'
equity
|
4,606,259
|
|
|
4,804,954
|
|
|
|
|
|
|
$
|
8,157,956
|
|
|
$
|
8,569,410
|
|
PulteGroup,
Inc.
Consolidated
Statements of Cash Flows
($000's
omitted)
(Unaudited)
|
|
Six Months
Ended
|
|
June
30,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
158,295
|
|
|
$
|
116,699
|
|
Adjustments to
reconcile net income to net cash flows provided by (used
in)
operating
activities:
|
|
|
|
Deferred income tax
expense
|
103,059
|
|
|
85,028
|
|
Depreciation and
amortization
|
21,853
|
|
|
18,904
|
|
Share-based
compensation expense
|
14,654
|
|
|
16,797
|
|
Equity in earnings of
unconsolidated entities
|
(2,271)
|
|
|
(7,202)
|
|
Distributions of
earnings from unconsolidated entities
|
1,500
|
|
|
4,777
|
|
Loss on debt
retirements
|
—
|
|
|
8,584
|
|
Other non-cash,
net
|
10,090
|
|
|
6,649
|
|
Increase (decrease)
in cash due to:
|
|
|
|
Restricted
cash
|
(4,526)
|
|
|
(726)
|
|
Inventories
|
(485,676)
|
|
|
(249,861)
|
|
Residential mortgage
loans available-for-sale
|
70,123
|
|
|
64,672
|
|
Other
assets
|
(57,054)
|
|
|
(15,709)
|
|
Accounts payable,
accrued and other liabilities
|
(21,202)
|
|
|
38,539
|
|
Income tax
liabilities
|
52
|
|
|
(12,869)
|
|
Net cash provided by
(used in) operating activities
|
(191,103)
|
|
|
74,282
|
|
Cash flows from
investing activities:
|
|
|
|
Distributions from
unconsolidated entities
|
906
|
|
|
7,577
|
|
Investments in
unconsolidated entities
|
—
|
|
|
(9)
|
|
Net change in loans
held for investment
|
9,634
|
|
|
(6,791)
|
|
Change in restricted
cash related to letters of credit
|
3,710
|
|
|
(28,166)
|
|
Proceeds from the
sale of property and equipment
|
400
|
|
|
98
|
|
Capital
expenditures
|
(23,115)
|
|
|
(33,021)
|
|
Net cash provided by
(used in) investing activities
|
(8,465)
|
|
|
(60,312)
|
|
Cash flows from
financing activities:
|
|
|
|
Financial Services
borrowings (repayments)
|
(20,970)
|
|
|
(47,158)
|
|
Other borrowings
(repayments)
|
(237,994)
|
|
|
(240,133)
|
|
Stock option
exercises
|
7,222
|
|
|
5,789
|
|
Share
repurchases
|
(322,066)
|
|
|
(103,711)
|
|
Dividends
paid
|
(59,125)
|
|
|
(38,152)
|
|
Net cash provided by
(used in) financing activities
|
(632,933)
|
|
|
(423,365)
|
|
Net increase
(decrease) in cash and equivalents
|
(832,501)
|
|
|
(409,395)
|
|
Cash and equivalents
at beginning of period
|
1,292,862
|
|
|
1,580,329
|
|
Cash and equivalents
at end of period
|
$
|
460,361
|
|
|
$
|
1,170,934
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
Interest paid
(capitalized), net
|
$
|
(1,911)
|
|
|
$
|
(328)
|
|
Income taxes paid
(refunded), net
|
$
|
(1,685)
|
|
|
$
|
(2,487)
|
|
PulteGroup,
Inc.
Segment
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
HOMEBUILDING:
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,243,077
|
|
|
$
|
1,246,462
|
|
|
$
|
2,331,235
|
|
|
$
|
2,334,477
|
|
Land sale
revenues
|
6,460
|
|
|
8,527
|
|
|
24,002
|
|
|
14,511
|
|
Total Homebuilding
revenues
|
1,249,537
|
|
|
1,254,989
|
|
|
2,355,237
|
|
|
2,348,988
|
|
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
953,280
|
|
|
952,692
|
|
|
1,794,425
|
|
|
1,781,295
|
|
Land sale cost of
revenues
|
5,312
|
|
|
6,832
|
|
|
18,691
|
|
|
11,843
|
|
Selling, general and
administrative expenses
|
130,119
|
|
|
229,767
|
|
|
291,431
|
|
|
374,655
|
|
Equity in earnings of
unconsolidated entities
|
(1,164)
|
|
|
(1,287)
|
|
|
(2,271)
|
|
|
(7,157)
|
|
Other expense,
net
|
4,998
|
|
|
9,324
|
|
|
6,134
|
|
|
23,155
|
|
Interest income,
net
|
(648)
|
|
|
(912)
|
|
|
(1,560)
|
|
|
(1,810)
|
|
Income before income
taxes
|
$
|
157,640
|
|
|
$
|
58,573
|
|
|
$
|
248,387
|
|
|
$
|
167,007
|
|
|
|
|
|
|
|
|
|
FINANCIAL
SERVICES:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
9,987
|
|
|
$
|
9,108
|
|
|
$
|
15,044
|
|
|
$
|
30,702
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
167,627
|
|
|
$
|
67,681
|
|
|
$
|
263,431
|
|
|
$
|
197,709
|
|
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,243,077
|
|
|
$
|
1,246,462
|
|
|
$
|
2,331,235
|
|
|
$
|
2,334,477
|
|
|
|
|
|
|
|
|
|
Closings -
units
|
|
|
|
|
|
|
|
Northeast
|
316
|
|
|
346
|
|
|
564
|
|
|
689
|
|
Southeast
|
772
|
|
|
785
|
|
|
1,384
|
|
|
1,432
|
|
Florida
|
597
|
|
|
623
|
|
|
1,198
|
|
|
1,190
|
|
Texas
|
754
|
|
|
885
|
|
|
1,500
|
|
|
1,666
|
|
North
|
828
|
|
|
678
|
|
|
1,563
|
|
|
1,308
|
|
Southwest
|
477
|
|
|
481
|
|
|
900
|
|
|
949
|
|
|
3,744
|
|
|
3,798
|
|
|
7,109
|
|
|
7,234
|
|
Average selling
price
|
$
|
332
|
|
|
$
|
328
|
|
|
$
|
328
|
|
|
$
|
323
|
|
|
|
|
|
|
|
|
|
Net new orders -
units
|
|
|
|
|
|
|
|
Northeast
|
443
|
|
|
380
|
|
|
880
|
|
|
824
|
|
Southeast
|
1,041
|
|
|
880
|
|
|
1,979
|
|
|
1,704
|
|
Florida
|
805
|
|
|
774
|
|
|
1,716
|
|
|
1,624
|
|
Texas
|
993
|
|
|
1,139
|
|
|
2,110
|
|
|
2,311
|
|
North
|
1,084
|
|
|
988
|
|
|
2,080
|
|
|
1,880
|
|
Southwest
|
752
|
|
|
617
|
|
|
1,492
|
|
|
1,298
|
|
|
5,118
|
|
|
4,778
|
|
|
10,257
|
|
|
9,641
|
|
Net new orders -
dollars (a)
|
$
|
1,766,848
|
|
|
$
|
1,594,408
|
|
|
$
|
3,475,238
|
|
|
$
|
3,202,814
|
|
|
|
|
|
|
|
|
|
Unit
backlog
|
|
|
|
|
|
|
|
Northeast
|
|
|
|
|
777
|
|
|
756
|
|
Southeast
|
|
|
|
|
1,563
|
|
|
1,325
|
|
Florida
|
|
|
|
|
1,520
|
|
|
1,347
|
|
Texas
|
|
|
|
|
1,883
|
|
|
1,895
|
|
North
|
|
|
|
|
1,979
|
|
|
1,785
|
|
Southwest
|
|
|
|
|
1,276
|
|
|
1,071
|
|
|
|
|
|
|
8,998
|
|
|
8,179
|
|
Dollars in
backlog
|
|
|
|
|
$
|
3,087,862
|
|
|
$
|
2,770,134
|
|
|
|
|
|
|
|
|
|
(a)
|
Net new order
dollars represent a composite of new order dollars combined with
other movements of the dollars in backlog related to cancellations
and change orders.
|
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
MORTGAGE
ORIGINATIONS:
|
|
|
|
|
|
|
|
Origination
volume
|
2,507
|
|
|
2,469
|
|
|
4,623
|
|
|
4,583
|
|
Origination
principal
|
$
|
635,153
|
|
|
$
|
597,273
|
|
|
$
|
1,149,941
|
|
|
$
|
1,092,802
|
|
Capture
rate
|
83.4
|
%
|
|
80.3
|
%
|
|
82.5
|
%
|
|
79.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Interest in
inventory, beginning of period
|
$
|
166,887
|
|
|
$
|
225,619
|
|
|
$
|
167,638
|
|
|
$
|
230,922
|
|
Interest
capitalized
|
31,296
|
|
|
31,455
|
|
|
62,099
|
|
|
66,768
|
|
Interest
expensed
|
(33,799)
|
|
|
(46,471)
|
|
|
(65,353)
|
|
|
(87,087)
|
|
Interest in
inventory, end of period
|
$
|
164,384
|
|
|
$
|
210,603
|
|
|
$
|
164,384
|
|
|
$
|
210,603
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pultegroup-reports-second-quarter-2015-financial-results-300117419.html
SOURCE PulteGroup, Inc.