ATLANTA, Oct. 22, 2015 /PRNewswire/ -- PulteGroup,
Inc. (NYSE: PHM) announced today financial results for its third
quarter ended September 30,
2015. For the quarter, the Company reported net income of
$108 million, or $0.30 per share, inclusive of $9 million, or $0.03 per share, of net charges resulting from
litigation-related reserve adjustments taken in the quarter.
Prior year net income for the quarter was $141 million, or $0.37 per share.
"PulteGroup's third quarter results demonstrate our continued
focus on delivering higher returns on invested capital over the
housing cycle as we realized an improved sales pace while expanding
gross margins," said Richard J. Dugas,
Jr., Chairman, President and Chief Executive Officer of
PulteGroup. "We also continued to allocate capital in
alignment with our stated priorities as we invested $586 million in the business, keeping us on track
to invest approximately $2.3 billion
for the year, while still returning $149
million to shareholders in the quarter through dividends and
share repurchases.
"Demand in the quarter and through the first nine months of 2015
show a U.S. housing industry that continues on a sustained recovery
path benefitting from an improving economy, low interest rates and
a generally balanced inventory of homes available for sale.
At just over 500,000 new home sales annually, however, the industry
is operating well below its 50-year average, so we remain
optimistic that demand can continue to increase in the coming years
and are investing in our business accordingly.
"With a backlog approaching 9,000 homes, more capital being
invested in the business and expectations for a sustained housing
recovery, PulteGroup is in a very strong position to capitalize on
future market opportunities."
Third Quarter Results
Home sale revenues for the third quarter totaled $1.5 billion, compared with prior year revenue of
$1.6 billion. The 6% decrease
in revenue reflects a 6% decline in closings to 4,356 homes,
partially offset by a 1% increase in average selling price to
$336,000.
For the third quarter, pretax income from homebuilding
operations was $165 million, compared
with prior year pretax income of $214
million. The Company's home sale gross margin for the
period was 23.6%, an increase of 70 basis points over the prior
year. On a sequential basis, gross margins increased 30 basis
points from the second quarter of 2015. Homebuilding SG&A
expense for the quarter was $159
million, or 10.9% of home sale revenues. SG&A
expense for the period includes a benefit of $6 million from a reserve adjustment associated
with a recent legal settlement.
In the quarter, the Company recorded a charge of $20 million in Other Expense, net, to increase
reserves following a recent unfavorable jury verdict in a contract
dispute. The Company has already filed post-trial motions
seeking to, among other things, overturn the verdict, but given the
decision the Company believes a reserve adjustment is
appropriate.
Net new orders for the third quarter totaled 4,092 homes, which
is up 8% from prior year orders of 3,779 homes. On a dollar
basis, third quarter signup value was $1.5
billion, which is an increase of 17% from the third quarter
2014 signup value of $1.3
billion. For the quarter, the Company operated from
611 active communities, which is up 2% from the prior
year.
PulteGroup's quarter-end backlog values of $3.1 billion and 8,734 homes, are up 18% and 10%,
respectively, over prior year backlog values of $2.6 billion and 7,934 homes. The Company's
average selling price in backlog is $354,000, which is up 7% over the prior year and
up 5% from the average price of homes closed in the third quarter
of 2015.
The Company's financial services operations reported third
quarter pretax income of $14 million,
which is up from pretax income of $11
million in the comparable prior year quarter. Mortgage
capture rate for the quarter increased to 83%, up from 80% in the
same quarter last year.
In the third quarter, PulteGroup invested $586 million in land acquisition and development,
raising its total land spend through the first nine months to
$1.5 billion, as it remains on track
to invest approximately $2.3 billion
for the full year. The Company also repurchased 5.9 million common
shares for $121 million, or an
average price of $20.29 per
share.
During the quarter, PulteGroup entered into a new $500 million term loan agreement with proceeds
expected to be used for working capital and general corporate
purposes. Inclusive of these funds, the Company ended the
quarter with $760 million of cash and
a debt-to-capital ratio of 31%.
A conference call discussing PulteGroup's third quarter 2015
results is scheduled for Thursday, October
22, 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; our ability to generate sufficient cash flow
in order to successfully implement our capital allocation
priorities; 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
Homebuilding
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,464,131
|
|
|
$
|
1,551,226
|
|
|
$
|
3,795,366
|
|
|
$
|
3,885,703
|
|
Land sale
revenues
|
3,649
|
|
|
10,047
|
|
|
27,651
|
|
|
24,558
|
|
|
1,467,780
|
|
|
1,561,273
|
|
|
3,823,017
|
|
|
3,910,261
|
|
Financial
Services
|
38,967
|
|
|
33,452
|
|
|
97,319
|
|
|
89,544
|
|
Total
revenues
|
1,506,747
|
|
|
1,594,725
|
|
|
3,920,336
|
|
|
3,999,805
|
|
|
|
|
|
|
|
|
|
Homebuilding Cost
of Revenues:
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
1,118,874
|
|
|
1,195,369
|
|
|
2,913,299
|
|
|
2,976,665
|
|
Land sale cost of
revenues
|
3,301
|
|
|
3,539
|
|
|
21,992
|
|
|
15,382
|
|
|
1,122,175
|
|
|
1,198,908
|
|
|
2,935,291
|
|
|
2,992,047
|
|
Financial Services
expenses
|
24,602
|
|
|
22,623
|
|
|
67,909
|
|
|
48,058
|
|
Selling, general and
administrative expenses
|
159,361
|
|
|
147,136
|
|
|
450,793
|
|
|
521,791
|
|
Other expense,
net
|
23,826
|
|
|
2,406
|
|
|
29,962
|
|
|
25,561
|
|
Interest
income
|
(504)
|
|
|
(1,205)
|
|
|
(2,458)
|
|
|
(3,431)
|
|
Interest
expense
|
203
|
|
|
210
|
|
|
598
|
|
|
625
|
|
Equity in earnings of
unconsolidated entities
|
(2,192)
|
|
|
(281)
|
|
|
(4,464)
|
|
|
(7,483)
|
|
Income before income
taxes
|
179,276
|
|
|
224,928
|
|
|
442,705
|
|
|
422,637
|
|
Income tax
expense
|
71,507
|
|
|
84,383
|
|
|
176,643
|
|
|
165,393
|
|
Net income
|
$
|
107,769
|
|
|
$
|
140,545
|
|
|
$
|
266,062
|
|
|
$
|
257,244
|
|
|
|
|
|
|
|
|
|
Per
share:
|
|
|
|
|
|
|
|
Basic
earnings
|
$
|
0.31
|
|
|
$
|
0.37
|
|
|
$
|
0.74
|
|
|
$
|
0.68
|
|
Diluted
earnings
|
$
|
0.30
|
|
|
$
|
0.37
|
|
|
$
|
0.73
|
|
|
$
|
0.67
|
|
Cash dividends
declared
|
$
|
0.08
|
|
|
$
|
0.05
|
|
|
$
|
0.24
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
Number of shares
used in calculation:
|
|
|
|
|
|
|
|
Basic
|
350,147
|
|
|
373,531
|
|
|
359,236
|
|
|
376,097
|
|
Effect of dilutive
securities
|
3,225
|
|
|
3,761
|
|
|
3,273
|
|
|
3,723
|
|
Diluted
|
353,372
|
|
|
377,292
|
|
|
362,509
|
|
|
379,820
|
|
PulteGroup,
Inc.
Condensed
Consolidated Balance Sheets
($000's
omitted)
(Unaudited)
|
|
|
September 30,
2015
|
|
December 31,
2014
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
734,153
|
|
|
$
|
1,292,862
|
|
Restricted
cash
|
25,942
|
|
|
16,358
|
|
House and land
inventory
|
5,240,932
|
|
|
4,392,100
|
|
Land held for
sale
|
85,130
|
|
|
101,190
|
|
Land, not owned,
under option agreements
|
102,548
|
|
|
30,186
|
|
Residential mortgage
loans available-for-sale
|
270,658
|
|
|
339,531
|
|
Investments in
unconsolidated entities
|
41,509
|
|
|
40,368
|
|
Other
assets
|
637,962
|
|
|
513,032
|
|
Intangible
assets
|
113,440
|
|
|
123,115
|
|
Deferred tax assets,
net
|
1,549,304
|
|
|
1,720,668
|
|
|
$
|
8,801,578
|
|
|
$
|
8,569,410
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
372,498
|
|
|
$
|
270,516
|
|
Customer
deposits
|
241,047
|
|
|
142,642
|
|
Accrued and other
liabilities
|
1,373,910
|
|
|
1,343,774
|
|
Income tax
liabilities
|
50,906
|
|
|
48,722
|
|
Financial Services
debt
|
107,508
|
|
|
140,241
|
|
Term loan
|
500,000
|
|
|
—
|
|
Senior
notes
|
1,584,104
|
|
|
1,818,561
|
|
|
4,229,973
|
|
|
3,764,456
|
|
Shareholders'
equity
|
4,571,605
|
|
|
4,804,954
|
|
|
$
|
8,801,578
|
|
|
$
|
8,569,410
|
|
PulteGroup,
Inc.
Consolidated
Statements of Cash Flows
($000's
omitted)
(Unaudited)
|
|
Nine Months
Ended
|
|
September
30,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
266,062
|
|
|
$
|
257,244
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Deferred income tax
expense
|
171,364
|
|
|
164,460
|
|
Depreciation and
amortization
|
33,719
|
|
|
28,864
|
|
Share-based
compensation expense
|
20,139
|
|
|
21,290
|
|
Equity in earnings of
unconsolidated entities
|
(4,464)
|
|
|
(7,483)
|
|
Distributions of
earnings from unconsolidated entities
|
2,594
|
|
|
4,824
|
|
Loss on debt
retirements
|
—
|
|
|
8,584
|
|
Other non-cash,
net
|
13,170
|
|
|
8,211
|
|
Increase (decrease)
in cash due to:
|
|
|
|
Restricted
cash
|
(13,293)
|
|
|
(689)
|
|
Inventories
|
(835,276)
|
|
|
(384,571)
|
|
Residential mortgage
loans available-for-sale
|
68,381
|
|
|
49,600
|
|
Other
assets
|
(132,195)
|
|
|
(12,802)
|
|
Accounts payable,
accrued and other liabilities
|
160,803
|
|
|
74,102
|
|
Income tax
liabilities
|
2,184
|
|
|
(9,799)
|
|
Net cash provided by
(used in) operating activities
|
(246,812)
|
|
|
201,835
|
|
Cash flows from
investing activities:
|
|
|
|
Change in restricted
cash related to letters of credit
|
3,710
|
|
|
48,401
|
|
Capital
expenditures
|
(34,049)
|
|
|
(41,888)
|
|
Cash used for
business acquisition
|
—
|
|
|
(77,469)
|
|
Other investing
activities, net
|
9,959
|
|
|
1,360
|
|
Net cash provided by
(used in) investing activities
|
(20,380)
|
|
|
(69,596)
|
|
Cash flows from
financing activities:
|
|
|
|
Financial Services
borrowings (repayments)
|
(32,733)
|
|
|
(34,070)
|
|
Proceeds from debt
issuance
|
500,000
|
|
|
—
|
|
Repayments of
debt
|
(238,520)
|
|
|
(250,631)
|
|
Borrowings under
revolving credit facility
|
125,000
|
|
|
—
|
|
Repayments under
revolving credit facility
|
(125,000)
|
|
|
—
|
|
Stock option
exercises
|
10,371
|
|
|
6,034
|
|
Share
repurchases
|
(442,738)
|
|
|
(155,140)
|
|
Dividends
paid
|
(87,897)
|
|
|
(56,944)
|
|
Net cash provided by
(used in) financing activities
|
(291,517)
|
|
|
(490,751)
|
|
Net increase
(decrease) in cash and equivalents
|
(558,709)
|
|
|
(358,512)
|
|
Cash and equivalents
at beginning of period
|
1,292,862
|
|
|
1,580,329
|
|
Cash and equivalents
at end of period
|
$
|
734,153
|
|
|
$
|
1,221,817
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
Interest paid
(capitalized), net
|
$
|
(20,304)
|
|
|
$
|
(23,236)
|
|
Income taxes paid
(refunded), net
|
$
|
740
|
|
|
$
|
(1,054)
|
|
PulteGroup,
Inc.
Segment
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
HOMEBUILDING:
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,464,131
|
|
|
$
|
1,551,226
|
|
|
$
|
3,795,366
|
|
|
$
|
3,885,703
|
|
Land sale
revenues
|
3,649
|
|
|
10,047
|
|
|
27,651
|
|
|
24,558
|
|
Total Homebuilding
revenues
|
1,467,780
|
|
|
1,561,273
|
|
|
3,823,017
|
|
|
3,910,261
|
|
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
1,118,874
|
|
|
1,195,369
|
|
|
2,913,299
|
|
|
2,976,665
|
|
Land sale cost of
revenues
|
3,301
|
|
|
3,539
|
|
|
21,992
|
|
|
15,382
|
|
Selling, general and
administrative expenses
|
159,361
|
|
|
147,136
|
|
|
450,793
|
|
|
521,791
|
|
Equity in earnings of
unconsolidated entities
|
(2,192)
|
|
|
(233)
|
|
|
(4,465)
|
|
|
(7,391)
|
|
Other expense,
net
|
23,826
|
|
|
2,406
|
|
|
29,962
|
|
|
25,561
|
|
Interest income,
net
|
(301)
|
|
|
(995)
|
|
|
(1,860)
|
|
|
(2,806)
|
|
Income before income
taxes
|
$
|
164,911
|
|
|
$
|
214,051
|
|
|
$
|
413,296
|
|
|
$
|
381,059
|
|
|
|
|
|
|
|
|
|
FINANCIAL
SERVICES:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
14,365
|
|
|
$
|
10,877
|
|
|
$
|
29,409
|
|
|
$
|
41,578
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
179,276
|
|
|
$
|
224,928
|
|
|
$
|
442,705
|
|
|
$
|
422,637
|
|
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
1,464,131
|
|
|
$
|
1,551,226
|
|
|
$
|
3,795,366
|
|
|
$
|
3,885,703
|
|
|
|
|
|
|
|
|
|
Closings -
units
|
|
|
|
|
|
|
|
Northeast
|
401
|
|
|
383
|
|
|
965
|
|
|
1,072
|
|
Southeast
|
865
|
|
|
833
|
|
|
2,249
|
|
|
2,265
|
|
Florida
|
712
|
|
|
754
|
|
|
1,910
|
|
|
1,944
|
|
Texas
|
821
|
|
|
963
|
|
|
2,321
|
|
|
2,629
|
|
North
|
978
|
|
|
1,098
|
|
|
2,541
|
|
|
2,406
|
|
Southwest
|
579
|
|
|
615
|
|
|
1,479
|
|
|
1,564
|
|
|
4,356
|
|
|
4,646
|
|
|
11,465
|
|
|
11,880
|
|
Average selling
price
|
$
|
336
|
|
|
$
|
334
|
|
|
$
|
331
|
|
|
$
|
327
|
|
|
|
|
|
|
|
|
|
Net new orders -
units
|
|
|
|
|
|
|
|
Northeast
|
346
|
|
|
336
|
|
|
1,226
|
|
|
1,160
|
|
Southeast
|
780
|
|
|
756
|
|
|
2,759
|
|
|
2,460
|
|
Florida
|
755
|
|
|
650
|
|
|
2,471
|
|
|
2,274
|
|
Texas
|
698
|
|
|
735
|
|
|
2,808
|
|
|
3,046
|
|
North
|
871
|
|
|
778
|
|
|
2,951
|
|
|
2,658
|
|
Southwest
|
642
|
|
|
524
|
|
|
2,134
|
|
|
1,822
|
|
|
4,092
|
|
|
3,779
|
|
|
14,349
|
|
|
13,420
|
|
Net new orders -
dollars (a)
|
$
|
1,465,322
|
|
|
$
|
1,251,081
|
|
|
$
|
4,940,560
|
|
|
$
|
4,453,895
|
|
|
|
|
|
|
|
|
|
Unit
backlog
|
|
|
|
|
|
|
|
Northeast
|
|
|
|
|
722
|
|
|
709
|
|
Southeast
|
|
|
|
|
1,478
|
|
|
1,248
|
|
Florida
|
|
|
|
|
1,563
|
|
|
1,243
|
|
Texas
|
|
|
|
|
1,760
|
|
|
1,667
|
|
North
|
|
|
|
|
1,872
|
|
|
2,087
|
|
Southwest
|
|
|
|
|
1,339
|
|
|
980
|
|
|
|
|
|
|
8,734
|
|
|
7,934
|
|
Dollars in
backlog
|
|
|
|
|
$
|
3,089,054
|
|
|
$
|
2,615,288
|
|
|
|
|
|
|
|
|
|
(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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
MORTGAGE
ORIGINATIONS:
|
|
|
|
|
|
|
|
Origination
volume
|
2,992
|
|
|
2,899
|
|
|
7,615
|
|
|
7,482
|
|
Origination
principal
|
$
|
766,450
|
|
|
$
|
724,025
|
|
|
$
|
1,916,391
|
|
|
$
|
1,816,827
|
|
Capture
rate
|
83.5
|
%
|
|
80.3
|
%
|
|
82.9
|
%
|
|
79.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Interest in
inventory, beginning of period
|
$
|
164,384
|
|
|
$
|
210,603
|
|
|
$
|
167,638
|
|
|
$
|
230,922
|
|
Interest
capitalized
|
28,006
|
|
|
32,025
|
|
|
90,105
|
|
|
98,793
|
|
Interest
expensed
|
(36,609)
|
|
|
(52,286)
|
|
|
(101,962)
|
|
|
(139,373)
|
|
Interest in
inventory, end of period
|
$
|
155,781
|
|
|
$
|
190,342
|
|
|
$
|
155,781
|
|
|
$
|
190,342
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pultegroup-reports-third-quarter-2015-financial-results-300164241.html
SOURCE PulteGroup, Inc.