Welcome!

News Feed Item

PulteGroup Reports Financial Results For 2013 Fourth Quarter

BLOOMFIELD HILLS, Mich., Jan. 30, 2014 /PRNewswire/ -- 

  • Q4 2013 Earnings of $220 Million, or $0.57 Per Share, Compared with $59 Million, or $0.15 Per Share, in the Prior Year
  • Q4 Home Sale Gross Margin of 23.2% Increased 610 Basis Points Over Prior Year and 230 Basis Points Over Prior Quarter; Adjusted Gross Margin of 27.7% is Up 590 Basis Points Over Q4 2012
  • SG&A Reduced 30 Basis Points from Prior Year to 9.3% of Home Sale Revenues
  • Home Sale Revenues Increased 9% to $1.6 Billion Driven by a 13% Increase in Average Selling Price
  • Year-end Backlog of 5,772 Homes With a Value of $1.9 Billion
  • Repurchased $35 Million of Stock in the Quarter
  • Debt-to-Capitalization of 31%, Down from 53% at Year-end 2012
  • Company has Increased Authorized Land Spend in 2014 to $2.0 Billion, Compared with $1.3 Billion Invested in 2013

PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2013.  For the quarter, PulteGroup reported net income of $220 million, or $0.57 per share, compared with prior year net income of $59 million, or $0.15 per share.  Reported prior year earnings include net charges of $73 million, or $0.19 per share, resulting from mortgage and debt-repurchase charges, partially offset by tax benefits.      

"Our fourth quarter results complete an outstanding year during which we realized dramatic operating and financial improvement as we continue to benefit from our Value Creation initiatives and from the ongoing recovery in U.S. housing," said Richard J. Dugas, Jr., Chairman, President and CEO of PulteGroup.  "Our 23.2% gross margin, which represents a 610 basis point improvement over last year, is the highest margin we have achieved since 2005."

"The material improvement in our key operating and financial metrics has allowed us to reduce our leverage and build a cash balance of $1.7 billion.  Given the operating and financial disciplines we have established within the organization, we are confidently increasing our investment in land related spend, while still retaining the flexibility to allocate capital to reduce debt, pay dividends and/or repurchase stock, as we deem appropriate."

"We expect the rebound in housing to continue in 2014, supported by many of the factors that first launched the recovery, including: low interest rates; a limited supply of new and existing homes; and an ongoing, albeit modest, recovery in the broader economy.  Based on this view, we have authorized an increase in land related spend to $2.0 billion in 2014. As we seek to build on the momentum of the past two years, PulteGroup enters 2014 with financial flexibility and a clear focus on advancing our Value Creation initiatives and delivering higher returns on invested capital over the housing cycle."

Fourth Quarter Results

Home sale revenues for the quarter ended December 31, 2013, totaled $1.6 billion, an increase of 9% over the prior year.  The increase in revenue was driven by a 13% increase in average selling price to $325,000, partially offset by a 4% decrease in closings to 4,964 homes.  The higher average selling price reflects price increases, as well as a continued shift in product mix. 

Reported home sale gross margin for the period was 23.2%, an increase of 610 basis points over the prior year and 230 basis points over the third quarter of 2013.  Homebuilding SG&A expense for the quarter was $150 million, or 9.3% of home sale revenues.  SG&A for the prior year period was $142 million, or 9.6% of home sale revenues.  

For the quarter, the Company reported 3,214 net new orders, a decrease of 18% from prior year orders of 3,926.  The dollar value of net new orders was $1.1 billion, compared with the prior year order value of $1.2 billion.  The Company ended the year with 577 active communities, which is down 14% from the comparable prior year period.  As announced previously, the Company expects to operate from an approximate range of 560 to 580 communities during all four quarters of 2014. 

PulteGroup's backlog at year end totaled 5,772 homes valued at $1.9 billion, compared with prior year backlog of 6,458 homes valued at $1.9 billion.  The average selling price in our current backlog increased 10% over the prior year to $330,000.  

The Company's financial services operations reported pretax income of $7 million for the fourth quarter.   In the comparable prior year period, financial services reported a pretax loss of $24 million, inclusive of a $49 million charge associated with potential future loan repurchase obligations.  Mortgage capture rate for the quarter was 79% compared with 83% for the comparable prior year quarter. Pretax income for the fourth quarter of 2013 reflects the more competitive mortgage landscape compared with last year.  

For the quarter, the Company reported $12.4 million of income tax expense.  This is different from the Company's statutory provision primarily as the result of the finalization of the reversal of the majority of its deferred tax asset valuation allowance, the balance of which was accounted for in the third quarter of 2013.

Through open-market transactions, PulteGroup repurchased 2.0 million of its common shares for $35 million.  For the full year, PulteGroup repurchased 7.2 million of its common shares for $118 million and retired $461 million of debt.  The Company ended the year with a cash balance of $1.7 billion and a debt-to-capitalization ratio of 31%, down from 53% at the end of last year. 

A conference call discussing PulteGroup's fourth quarter results will be held Thursday, January 30, 2014, 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; 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, 2012, 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 Bloomfield Hills, Mich., 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


Year Ended


December 31,


December 31,


2013


2012


2013


2012

Revenues:








Homebuilding








Home sale revenues

$

1,612,923



$

1,481,517



$

5,424,309



$

4,552,412


Land sale revenues

12,036



36,928



114,335



106,698



1,624,959



1,518,445



5,538,644



4,659,110


Financial Services

30,380



48,521



140,951



160,888


Total revenues

1,655,339



1,566,966



5,679,595



4,819,998










Homebuilding Cost of Revenues:








Home sale cost of revenues

1,238,103



1,228,201



4,310,528



3,833,451


Land sale cost of revenues

11,765



32,811



104,426



94,880



1,249,868



1,261,012



4,414,954



3,928,331










Financial Services expenses

23,513



72,597



92,379



135,511


Selling, general, and administrative expenses

149,705



141,766



568,500



514,457


Other expense, net

1,588



41,728



80,753



66,298


Interest income

(1,075)



(1,331)



(4,395)



(4,913)


Interest expense

168



204



712



819


Equity in earnings of unconsolidated entities

(848)



(223)



(1,130)



(4,059)


Income before income taxes

232,420



51,213



527,822



183,554


Income tax expense (benefit)

12,367



(7,529)



(2,092,294)



(22,591)


Net income

$

220,053



$

58,742



$

2,620,116



$

206,145










Net income per share:








Basic

$

0.58



$

0.15



$

6.79



$

0.54


Diluted

$

0.57



$

0.15



$

6.72



$

0.54


Cash dividends declared

$

0.05



$



$

0.15



$










Number of shares used in calculation:








Basic

379,879



383,404



383,077



381,562


Effect of dilutive securities

3,845



5,900



3,789



3,002


Diluted

383,724



389,304



386,866



384,564


 

PulteGroup, Inc.

Condensed Consolidated Balance Sheets

($000's omitted)

(Unaudited)






December 31,
2013


December 31,
2012





ASSETS








Cash and equivalents

$

1,580,329



$

1,404,760


Restricted cash

72,715



71,950


House and land inventory

3,978,561



4,214,046


Land held for sale

61,735



91,104


Land, not owned, under option agreements

24,024



31,066


Residential mortgage loans available-for-sale

287,933



318,931


Investments in unconsolidated entities

45,323



45,629


Other assets

460,621



407,675


Intangible assets

136,148



149,248


Deferred tax assets, net

2,086,754





$

8,734,143



$

6,734,409










LIABILITIES AND SHAREHOLDERS' EQUITY








Liabilities:




Accounts payable

$

202,736



$

178,274


Customer deposits

134,858



101,183


Accrued and other liabilities

1,377,750



1,418,063


Income tax liabilities

206,015



198,865


Financial Services debt

105,664



138,795


Senior notes

2,058,168



2,509,613


Total liabilities

4,085,191



4,544,793






Shareholders' equity

4,648,952



2,189,616







$

8,734,143



$

6,734,409


 


PulteGroup, Inc.

Consolidating Statements of Cash Flows

($000's omitted)

(Unaudited)


Year Ended


December 31,


2013


2012

Cash flows from operating activities:




Net income

$

2,620,116



$

206,145


Adjustments to reconcile net income to net cash flows provided by (used in)

      operating activities:




Deferred income taxes

(2,096,425)




Write-down of land and deposits and pre-acquisition costs

9,672



17,195


Amortization and depreciation

31,587



30,027


Stock-based compensation expense

30,480



22,897


Loss on debt repurchases

26,930



32,071


Equity in earnings of unconsolidated entities

(1,130)



(4,059)


Distributions of earnings from unconsolidated entities

2,049



7,488


Other non-cash, net

9,375



10,356


Increase (decrease) in cash due to:




Restricted cash

3,387



1,257


Inventories

265,064



455,223


Residential mortgage loans available-for-sale

28,448



(60,828)


Other assets

(38,190)



26,014


Accounts payable, accrued and other liabilities

(17,377)



20,802


Income tax liabilities

7,150



(4,448)


Net cash provided by (used in) operating activities

881,136



760,140


Cash flows from investing activities:




Distributions from unconsolidated entities

1,001



3,029


Investments in unconsolidated entities

(1,677)



(16,456)


Net change in loans held for investment

(12,265)



836


Change in restricted cash related to letters of credit

(4,152)



28,653


Proceeds from the sale of property and equipment

15



7,586


Capital expenditures

(28,899)



(13,942)


Net cash provided by (used in) investing activities

(45,977)



9,706


Cash flows from financing activities:




Financial Services borrowings (repayments)

(33,131)



138,795


Other borrowings (repayments)

(479,827)



(618,800)


Stock option exercises

19,411



32,809


Stock repurchases

(127,661)



(961)


Dividends paid

(38,382)




Net cash provided by (used in) financing activities

(659,590)



(448,157)


Net increase (decrease) in cash and equivalents

175,569



321,689


Cash and equivalents at beginning of period

1,404,760



1,083,071


Cash and equivalents at end of period

$

1,580,329



$

1,404,760






Supplemental Cash Flow Information:




Interest paid (capitalized), net

$

(171)



$

(1,470)


Income taxes paid (refunded), net

$

373



$

(13,322)


 

PulteGroup, Inc.

Segment Data

($000's omitted)

(Unaudited)










Three Months Ended


Year Ended


December 31,


December 31,


2013


2012


2013


2012

HOMEBUILDING:








Home sale revenues

$

1,612,923



$

1,481,517



$

5,424,309



$

4,552,412


Land sale revenues

12,036



36,928



114,335



106,698


Total Homebuilding revenues

1,624,959



1,518,445



5,538,644



4,659,110










Home sale cost of revenues

1,238,103



1,228,201



4,310,528



3,833,451


Land sale cost of revenues

11,765



32,811



104,426



94,880


Selling, general, and administrative expenses

149,705



141,766



568,500



514,457


Equity in earnings of unconsolidated entities

(806)



(159)



(993)



(3,873)


Other expense, net

1,588



41,728



80,753



66,298


Interest income, net

(907)



(1,127)



(3,683)



(4,094)


Income before income taxes

$

225,511



$

75,225



$

479,113



$

157,991










FINANCIAL SERVICES:








Income (loss) before income taxes

$

6,909



$

(24,012)



$

48,709



$

25,563










CONSOLIDATED:








Income before income taxes

$

232,420



$

51,213



$

527,822



$

183,554


 


PulteGroup, Inc.

Segment data, continued

($000's omitted)

(Unaudited)










Three Months Ended


Year Ended


December 31,


December 31,


2013


2012


2013


2012









Home sale revenues

$

1,612,923



$

1,481,517



$

5,424,309



$

4,552,412










Closings - units








Northeast

623



576



1,835



1,800


Southeast

813



773



3,022



2,757


Florida

755



707



2,747



2,340


Texas

935



1,003



3,768



3,487


North

1,068



1,046



3,401



3,103


Southwest

770



1,049



2,993



3,018



4,964



5,154



17,766



16,505


Average selling price

$

325



$

287



$

305



$

276










Net new orders - units








Northeast

315



398



1,834



1,997


Southeast

604



682



3,164



3,066


Florida

501



600



2,595



2,747


Texas

682



905



3,563



4,117


North

682



789



3,347



3,661


Southwest

430



552



2,577



3,451



3,214



3,926



17,080



19,039


Net new orders - dollars (a)

$

1,081,971



$

1,166,760



$

5,394,566



$

5,424,300















December 31,






2013


2012

Unit backlog








Northeast





621



622


Southeast





1,053



911


Florida





913



1,065


Texas





1,250



1,455


North





1,213



1,267


Southwest





722



1,138







5,772



6,458


Dollars in backlog





$

1,901,796



$

1,931,538










(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


Year Ended


December 31,


December 31,


2013


2012


2013


2012

MORTGAGE ORIGINATIONS:








Origination volume

3,158



3,625



11,818



11,322


Origination principal

$

766,812



$

828,607



$

2,765,509



$

2,509,928


Capture rate

79.4

%


83.0

%


80.2

%


81.9

%

















 

Supplemental Data

($000's omitted)

(Unaudited)










Three Months Ended


Year Ended


December 31,


December 31,


2013


2012


2013


2012









Interest in inventory, beginning of period

$

266,524



$

352,026



$

331,880



$

355,068


Interest capitalized

35,580



47,734



154,107



201,103


Interest expensed

(71,182)



(67,880)



(255,065)



(224,291)


Interest in inventory, end of period

$

230,922



$

331,880



$

230,922



$

331,880


Interest incurred

$

35,748



$

47,734



$

154,819



$

201,103


 

PulteGroup, Inc.
Reconciliation of Non-GAAP Financial Measures

This report contains information about our home sale gross margins reflecting certain adjustments.  This measure is considered a non-GAAP financial measure under the SEC's rules and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measure as a measure of our operating performance.  Management and our local divisions use this measure in evaluating the operating performance of each community and in making strategic decisions regarding sales pricing, construction and development pace, product mix, and other daily operating decisions.  We believe it is a relevant and useful measure to investors for evaluating our performance through gross profit generated on homes delivered during a given period and for comparing our operating performance to other companies in the homebuilding industry.  Although other companies in the homebuilding industry report similar information, the methods used may differ.  We urge investors to understand the methods used by other companies in the homebuilding industry to calculate gross margins and any adjustments thereto before comparing our measure to that of such other companies.

The following table sets forth a reconciliation of this non-GAAP financial measure to the GAAP financial measure that management believes to be most directly comparable ($000's omitted):

Home Sale Gross Margin









Three Months Ended


Year Ended


December 31,


December 31,


2013


2012


2013


2012









Home sale revenues

$

1,612,923



$

1,481,517



$

5,424,309



$

4,552,412


Home sale cost of revenues

1,238,103



1,228,201



4,310,528



3,833,451


Home sale gross margin

374,820



253,316



1,113,781



718,961


Add:








Impairments (a)



2,250





6,969


Capitalized interest amortization (a)

71,182



67,880



255,065



224,291


Adjusted home sale gross margin

$

446,002



$

323,446



$

1,368,846



$

950,221










Home sale gross margin as a

   percentage of home sale revenues

23.2

%


17.1

%


20.5

%


15.8

%









Adjusted home sale gross margin as a

   percentage of home sale revenues

27.7

%


21.8

%


25.2

%


20.9

%



(a) Write-offs of capitalized interest related to impairments are reflected in capitalized interest amortization.


SOURCE PulteGroup, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Enterprises are universally struggling to understand where the new tools and methodologies of DevOps fit into their organizations, and are universally making the same mistakes. These mistakes are not unavoidable, and in fact, avoiding them gifts an organization with sustained competitive advantage, just like it did for Japanese Manufacturing Post WWII.
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes how...
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
DevOps with IBMz? You heard right. Maybe you're wondering what a developer can do to speed up the entire development cycle--coding, testing, source code management, and deployment-? In this session you will learn about how to integrate z application assets into a DevOps pipeline using familiar tools like Jenkins and UrbanCode Deploy, plus z/OSMF workflows, all of which can increase deployment speeds while simultaneously improving reliability. You will also learn how to provision mainframe syste...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and sh...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Cell networks have the advantage of long-range communications, reaching an estimated 90% of the world. But cell networks such as 2G, 3G and LTE consume lots of power and were designed for connecting people. They are not optimized for low- or battery-powered devices or for IoT applications with infrequently transmitted data. Cell IoT modules that support narrow-band IoT and 4G cell networks will enable cell connectivity, device management, and app enablement for low-power wide-area network IoT. B...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
"DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at @DevOpsSUMMIT and CloudEXPO tell the world how they can leverage this emerging disruptive trend."
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
Transformation Abstract Encryption and privacy in the cloud is a daunting yet essential task for both security practitioners and application developers, especially as applications continue moving to the cloud at an exponential rate. What are some best practices and processes for enterprises to follow that balance both security and ease of use requirements? What technologies are available to empower enterprises with code, data and key protection from cloud providers, system administrators, inside...