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%

Jan 28, 2016, 06:30 ET from PulteGroup, Inc.

ATLANTA, Jan. 28, 2016 /PRNewswire/ -- 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 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 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.

 

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

 

 

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

 

 

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

 

 

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

 

 

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.

 

 

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

 

 

 

SOURCE PulteGroup, Inc.



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