UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): January 28, 2016


PULTEGROUP, INC.
(Exact name of registrant as specified in its Charter)

Michigan
1-9804
38-2766606
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)


3350 Peachtree Road NE, Suite 150, Atlanta, Georgia 30326
(Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code (404) 978-6400


____________________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

_     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

_    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

_    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

_    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))











ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 28, 2016, PulteGroup, Inc. issued a press release announcing its financial results for its fourth quarter ended December 31, 2015. A copy of this earnings press release is furnished with this Current Report on Form 8-K and is incorporated in Item 2.02 by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1    Fourth Quarter 2015 earnings press release dated January 28, 2016.

The information in Item 2.02 of this Current Report on Form 8-K, including the earnings press release incorporated in such Item 2.02, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.


SIGNATURES

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

                                
 
 
PULTEGROUP, INC.
 
 
 
 
 
 
 
 
 
 
 
 
Date:
January 28, 2016
 
By:
/s/ Steven M. Cook
 
 
 
 
Name:
Steven M. Cook
 
 
 
 
Title:
Senior Vice President,
 
 
 
 
 
General Counsel
 
 
 
 
 
and Secretary
 
 
 
 
 
 










FOR IMMEDIATE RELEASE
Company Contact
 
Investors: Jim Zeumer
 
(404) 978-6434
 
          Email: jim.zeumer@pultegroup.com



PULTEGROUP REPORTS FINANCIAL RESULTS FOR 2015 FOURTH QUARTER

•
Q4 Net Income of $0.64 Per Share Includes $0.07 Per Share of Benefit from Insurance and Mortgage Reserve Reversals; Prior Year Q4 Net Income of $0.58 Per Share Includes $0.16 Per Share of Tax and Insurance Benefits
•
Net New Orders Increased 13% to 3,659 Homes Driven by 9% Gain in Absorption Pace
•
Value of Net New Orders Increased 24% to $1.4 Billion
•
Home Sale Gross Margin of 23.5%, Up 40 Basis Points Over Prior Year
•
Home Sale Revenues Increased 12% to $2.0 Billion
•
Closings Increased 7% to 5,662 Homes; Average Sales Price Up 6% to $353,000
•
Q4 Backlog Value Up 26% Over Prior Year to $2.5 Billion; Unit Backlog Increased 15% to 6,731 Homes
•
PulteGroup Ended the Quarter with $775 Million of Cash and a Debt-to-Capital Ratio of 30%


ATLANTA, Jan. 28, 2016 - PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2015. For the quarter, PulteGroup reported net income of $228 million, or $0.64 per share, inclusive of $0.07 per share of benefit associated with the reversal of certain mortgage and construction related insurance reserves. Prior year net income of $217 million, or $0.58 per share, included $0.16 per share of income tax and insurance benefits.

“PulteGroup’s fourth quarter results reflect improved performance from our homebuilding operations and, more broadly, the favorable demand environment we continue to experience within the housing industry,” said Richard J. Dugas, Jr., Chairman, President and CEO of PulteGroup. “We realized a significant increase in fourth quarter operating performance driven by gains in order rates, closings, pricing and margins, while the 26% increase in our backlog value to $2.5 billion provides excellent momentum for strong earnings growth in 2016.

“While heightened global economic concerns have created greater market volatility, the positive trends in jobs, demographics and household formations, along with low interest rates and limited housing inventory, support expectations that housing demand continues to move higher at a measured pace for a number of years. Given the investments we are making into our business, including our recently completed John Wieland asset purchase, PulteGroup is well positioned to grow its revenues and earnings, while continuing to generate high returns on invested capital and consistently return funds to shareholders.”

Fourth Quarter Results

Home sale revenues for the fourth quarter totaled $2.0 billion, an increase of 12% over the prior year. The increase in revenues was driven by a 7% increase in closings to 5,662 homes combined with a 6% increase in average selling price to $353,000. The higher average selling price in the quarter reflects an ongoing shift in the

1


mix of homes closed toward the Company’s Pulte Homes brand, as well as price increases realized across all three of the Company’s national brands: Centex, Pulte Homes and Del Webb.

Home sale gross margin for the period was 23.5%, an increase of 40 basis points from the prior year. SG&A expense for the quarter of $139 million, or 7.0% of home sale revenues, includes the benefit of a $30 million reversal of construction related insurance reserves recorded in the period. SG&A for the prior year period of $146 million, or 8.2% of home sale revenues, included the benefit of a $15 million reversal of construction related insurance reserves.

For the quarter, the Company reported 3,659 net new orders, an increase of 13% from prior year orders of 3,232 homes. The dollar value of fourth quarter orders increased 24% over the prior year to $1.4 billion. The Company ended the year with 620 active communities, which is up 4% from the comparable prior year period.

PulteGroup’s backlog of 6,731 homes, valued at $2.5 billion, is its highest year-end backlog since 2007, and is up from prior year backlog of 5,850 homes, valued at $1.9 billion. Reflecting the continued mix shift toward the Company’s higher priced Pulte Homes brand, average selling price in backlog increased 10% over the prior year to $365,000.

The Company's financial services operations reported pretax income of $29 million benefitted from the reversal of $12 million in mortgage repurchase reserves in the quarter. Prior year pretax income for financial services totaled $13 million. Mortgage capture rate for the fourth quarter was 83% compared with 81% in the prior year.

The Company ended the year with a cash balance of $775 million and a debt-to-capitalization ratio of 30%. Given trading limitations resulting from work to close its previously disclosed term loan and to acquire certain assets of John Wieland Homes and Neighborhoods, the Company did not repurchase any shares of common stock during the quarter.

A conference call discussing PulteGroup's fourth quarter results will be held Thursday, January 28, 2016, at 8:30 a.m. Eastern Time, and webcast live via www.pultegroupinc.com. Interested investors can access the call via the Company's home page at www.pultegroupinc.com, and are encouraged to download the available slides that provide additional details on the Company's fourth quarter results.

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

2


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, Georgia, 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, DiVosta Homes and John Wieland Homes and Neighborhoods, 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; www.divosta.com and www.jwhomes.com.



# # #



3


PulteGroup, Inc.
Consolidated Results of Operations
($000's omitted, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Homebuilding
 
 
 
 
 
 
 
Home sale revenues
$
1,997,309

 
$
1,776,469

 
$
5,792,675

 
$
5,662,171

Land sale revenues
20,885

 
9,995

 
48,536

 
34,554

 
2,018,194

 
1,786,464

 
5,841,211

 
5,696,725

Financial Services
43,434

 
36,093

 
140,753

 
125,638

Total revenues
2,061,628

 
1,822,557

 
5,981,964

 
5,822,363

 
 
 
 
 
 
 
 
Homebuilding Cost of Revenues:
 
 
 
 
 
 
 
Home sale cost of revenues
1,527,594

 
1,366,584

 
4,440,893

 
4,343,249

Land sale cost of revenues
13,867

 
8,367

 
35,858

 
23,748

 
1,541,461

 
1,374,951

 
4,476,751

 
4,366,997

 
 
 
 
 
 
 
 
Financial Services expenses
14,138

 
23,091

 
82,047

 
71,057

Selling, general, and administrative expenses
138,990

 
146,024

 
589,780

 
667,815

Other expense, net
(6,276
)
 
11,371

 
17,363

 
26,736

Income before income taxes
373,315

 
267,120

 
816,023

 
689,758

Income tax expense
145,288

 
50,025

 
321,933

 
215,420

Net income
$
228,027

 
$
217,095

 
$
494,090

 
$
474,338

 
 
 

 
 
 

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.65

 
$
0.58

 
$
1.38

 
$
1.27

Diluted
$
0.64

 
$
0.58

 
$
1.36

 
$
1.26

Cash dividends declared
$
0.09

 
$
0.08

 
$
0.33

 
$
0.23

 
 
 
 
 
 
 
 
Number of shares used in calculation:
 
 
 
 
 
 
 
Basic
348,699

 
369,533

 
356,576

 
370,377

Effect of dilutive securities
3,047

 
3,734

 
3,217

 
3,725

Diluted
351,746

 
373,267

 
359,793

 
374,102



4



PulteGroup, Inc.
Condensed Consolidated Balance Sheets
($000's omitted)
(Unaudited)
 
 
 
 
 
December 31,
2015
 
December 31,
2014
 
 
 
 
ASSETS
 
 
 
 
 
 
 
Cash and equivalents
$
754,161

 
$
1,292,862

Restricted cash
21,274

 
16,358

House and land inventory
5,450,058

 
4,392,100

Land held for sale
81,492

 
101,190

Residential mortgage loans available-for-sale
442,715

 
339,531

Investments in unconsolidated entities
41,267

 
40,368

Other assets
671,099

 
543,218

Intangible assets
110,215

 
123,115

Deferred tax assets, net
1,394,879

 
1,720,668

 
$
8,967,160

 
$
8,569,410

 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Liabilities:
 
 
 
Accounts payable
$
327,725

 
$
270,516

Customer deposits
186,141

 
142,642

Accrued and other liabilities
1,284,273

 
1,343,774

Income tax liabilities
57,050

 
48,722

Financial Services debt
267,877

 
140,241

Term loan
500,000

 
—

Senior notes
1,584,769

 
1,818,561

Total liabilities
4,207,835

 
3,764,456

 
 
 
 
Shareholders' equity
4,759,325

 
4,804,954

 
 
 
 
 
$
8,967,160

 
$
8,569,410



5


PulteGroup, Inc.
Consolidated Statements of Cash Flows
($000's omitted)
(Unaudited)
 
Year Ended
 
December 31,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
494,090

 
$
474,338

Adjustments to reconcile net income to net cash flows provided by (used in)
      operating activities:
 
 
 
Deferred income tax expense
311,699

 
223,769

Write-down of land and deposits and pre-acquisition costs
11,467

 
11,168

Depreciation and amortization
46,222

 
39,864

Share-based compensation expense
24,752

 
29,292

Loss on debt retirements
—

 
8,584

Other, net
5,605

 
6,091

Increase (decrease) in cash due to:
 
 
 
Restricted cash
(8,626
)
 
1,368

Inventories
(927,768
)
 
(346,596
)
Residential mortgage loans available-for-sale
(104,609
)
 
(53,734
)
Other assets
(177,063
)
 
(46,249
)
Accounts payable, accrued and other liabilities
(23,898
)
 
(38,646
)
Net cash provided by (used in) operating activities
(348,129
)
 
309,249

Cash flows from investing activities:
 
 
 
Net change in loans held for investment
8,664

 
335

Change in restricted cash related to letters of credit
3,710

 
54,989

Capital expenditures
(45,440
)
 
(48,790
)
Cash used for business acquisitions
—

 
(82,419
)
Other investing activities, net
2,212

 
8,261

Net cash used in investing activities
(30,854
)
 
(67,624
)
Cash flows from financing activities:
 
 
 
Financial Services borrowings
127,636

 
34,577

Proceeds from debt issuance
500,000

 
—

Repayments of debt
(239,193
)
 
(250,631
)
Borrowings under revolving credit facility
125,000

 
—

Repayments under revolving credit facility
(125,000
)
 
—

Stock option exercises
10,535

 
15,627

Share repurchases
(442,738
)
 
(253,019
)
Dividends paid
(115,958
)
 
(75,646
)
Net cash used in financing activities
(159,718
)
 
(529,092
)
Net decrease in cash and equivalents
(538,701
)
 
(287,467
)
Cash and equivalents at beginning of period
1,292,862

 
1,580,329

Cash and equivalents at end of period
$
754,161

 
$
1,292,862

 
 
 
 
Supplemental Cash Flow Information:
 
 
 
Interest capitalized, net
$
(4,193
)
 
$
(4,561
)
Income taxes paid (refunded), net
$
(5,654
)
 
$
1,030


6



PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
HOMEBUILDING:
 
 
 
 
 
 
 
Home sale revenues
$
1,997,309

 
$
1,776,469

 
$
5,792,675

 
$
5,662,171

Land sale revenues
20,885

 
9,995

 
48,536

 
34,554

Total Homebuilding revenues
2,018,194

 
1,786,464

 
5,841,211

 
5,696,725

 
 
 
 
 
 
 
 
Home sale cost of revenues
1,527,594

 
1,366,584

 
4,440,893

 
4,343,249

Land sale cost of revenues
13,867

 
8,367

 
35,858

 
23,748

Selling, general, and administrative expenses
138,990

 
146,024

 
589,780

 
667,815

Other expense, net
(6,276
)
 
11,371

 
17,363

 
26,736

Income before income taxes
$
344,019

 
$
254,118

 
$
757,317

 
$
635,177

 

 

 

 

FINANCIAL SERVICES:
 
 
 
 
 
 
 
Income before income taxes
$
29,297

 
$
13,002

 
$
58,706

 
$
54,581

 
 
 
 
 
 
 
 
CONSOLIDATED:
 
 
 
 
 
 
 
Income before income taxes
$
373,315

 
$
267,120

 
$
816,023

 
$
689,758



7


PulteGroup, Inc.
Segment Data, continued
($000's omitted)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
Home sale revenues
$
1,997,309

 
$
1,776,469

 
$
5,792,675

 
$
5,662,171

 
 
 
 
 
 
 
 
Closings - units (a)
 
 
 
 
 
 
 
Northeast
531

 
496

 
1,496

 
1,568

Southeast
1,027

 
895

 
3,276

 
3,160

Florida
986

 
808

 
2,896

 
2,752

Midwest
977

 
908

 
2,961

 
2,581

Texas
1,036

 
1,121

 
3,357

 
3,750

West
1,105

 
1,088

 
3,141

 
3,385

 
5,662

 
5,316

 
17,127

 
17,196

Average selling price
$
353

 
$
334

 
$
338

 
$
329

 
 
 
 
 
 
 
 
Net new orders - units  (a)
 
 
 
 
 
 
 
Northeast
253

 
248

 
1,479

 
1,408

Southeast
695

 
615

 
3,454

 
3,075

Florida
697

 
567

 
3,168

 
2,841

Midwest
630

 
482

 
2,862

 
2,329

Texas
621

 
727

 
3,429

 
3,773

West
763

 
593

 
3,616

 
3,226

 
3,659

 
3,232

 
18,008

 
16,652

Net new orders - dollars (b)
$
1,364,821

 
$
1,105,042

 
$
6,305,380

 
$
5,558,937

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
 
 
 
 
2015
 
2014
Unit backlog (a)
 
 
 
 
 
 
 
Northeast
 
 
 
 
444

 
461

Southeast
 
 
 
 
1,146

 
968

Florida
 
 
 
 
1,274

 
1,002

Midwest
 
 
 
 
1,089

 
1,188

Texas
 
 
 
 
1,345

 
1,273

West
 
 
 
 
1,433

 
958

 
 
 
 
 
6,731

 
5,850

Dollars in backlog
 
 
 
 
$
2,456,565

 
$
1,943,861

 
 
 
 
 
 
 
 
(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.
(b)
For 2015, we realigned our organizational structure and reportable segment presentation. Accordingly, the segment information provided in the table above has been reclassified to conform to the current presentation for all periods presented.


8



PulteGroup, Inc.
Segment Data, continued
($000's omitted)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
MORTGAGE ORIGINATIONS:
 
 
 
 
 
 
 
Origination volume
3,820

 
3,323

 
11,435

 
10,805

Origination principal
$
1,013,140

 
$
839,856

 
$
2,929,531

 
$
2,656,683

Capture rate
82.8
%
 
81.4
%
 
82.9
%
 
80.2
%


Supplemental Data
($000's omitted)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
December 31,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
Interest in inventory, beginning of period
$
155,781

 
$
190,342

 
$
167,638

 
$
230,922

Interest capitalized
29,896

 
32,651

 
120,001

 
131,444

Interest expensed
(36,179
)
 
(55,355
)
 
(138,141
)
 
(194,728
)
Interest in inventory, end of period
$
149,498

 
$
167,638

 
$
149,498

 
$
167,638




9
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