News

04.22.08

Pulte Homes Reports First Quarter 2008 Financial Results

    - For the First Quarter 2008, Generated 5,402 Net New Orders and Closed
      4,733 Homes

    - Backlog at March 31, 2008 of 8,559 Homes, Valued at $2.6 Billion

    - Company Ended Q1 2008 With $1.1 Billion of Cash

    - Impairments and Land-Related Charges of $663.6 Million for the First
      Quarter 2008

    - Q1 2008 Net Loss of $2.75 Per Share, Inclusive of Impairments, Land
      Related Charges and Deferred Tax Valuation Allowance

    - Company Provides Second Quarter 2008 Guidance

    - Company Continues to Target Year-End 2008 Cash Position of $2 Billion to
      $2.2 Billion

BLOOMFIELD HILLS, Mich., April 23 /PRNewswire-FirstCall/ -- Pulte Homes (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2008. For the quarter, the Company reported a net loss of $696.1 million, or $2.75 per share, compared with an $85.7 million net loss for the prior year first quarter, or $0.34 per share. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23% from prior year revenues of $1.9 billion.

"The difficult housing environment continued to erode during the first quarter of 2008," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak. Despite these market challenges, Pulte continues to make progress on its cash position, selling homes and reducing its cost structure. Our results were better than the guidance previously provided of a loss of $0.15 to $0.30 per share from continuing operations, exclusive of any impairments or land-related charges. This performance was accomplished through a company-wide commitment to sell and close homes during the quarter and continued efforts to control overhead. We also reduced both our level of speculative inventory and number of controlled lots. We ended the quarter with a $1.1 billion cash balance, inclusive of a $212 million tax refund, and no debt outstanding under our $1.6 billion revolving credit facility. Pulte will continue to position the company to capitalize on any market stabilization and eventual recovery."

Revenues from homebuilding settlements in the first quarter decreased 22% to $1.4 billion compared with $1.8 billion last year. The change in revenue for the quarter reflects a 13% decrease in closings to 4,733 homes, and an 11% decrease in average selling price to $295,000.

First quarter homebuilding pre-tax loss was $705.1 million, compared with a $148.4 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 first quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $79.7 million, or 28%, compared with the prior year quarter. During the first quarter of 2008, the Company recorded $663.6 million of impairments and land-related charges, including $598.8 million related to land impairments, $0.3 million associated with the write-off of land deposits and pre-acquisition costs, and $64.5 million of impairments of land held for sale. For the prior year quarter, these impairments and land-related charges totaled $132.1 million.

Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results. Pulte Homes' ending backlog as of March 31, 2008 was valued at $2.6 billion (8,559 homes), compared with a value of $4.7 billion (13,334 homes) at the end of last year's first quarter. At the end of the first quarter 2008, the Company's debt-to-capitalization ratio was 49%, and on a net debt-to-capitalization basis was 40%.

The Company's financial services operations reported pre-tax income of $15 million for the first quarter 2008, compared with $13.2 million of pre-tax income for the prior year's quarter. The increase in first quarter 2008 pre-tax income was partially due to a shift in the mix of mortgage loans closed toward more profitable agency-backed products. This was partially offset by a 32% decline in mortgage loans originated during the quarter compared with the prior year's quarter. The mortgage capture rate for the quarter was 89.9%, compared with 93% for the same quarter last year.

Second Quarter 2008 Guidance

"For the second quarter of 2008 we are projecting a net loss from continuing operations in the range from $0.10 to $0.20 per share, exclusive of a tax benefit and any additional impairments or land-related charges," said Dugas. "Pulte also remains focused on inventory reduction and cash management, and continues to target a cash position by the end of 2008 of $2.0 billion to $2.2 billion."

A conference call discussing Pulte Homes' first quarter results will be held Thursday, April 24, 2008 at 8:30 a.m. Eastern Time, and web cast live via Pulte.com. Interested investors can access the call via the Company's home page at http://www.pulte.com .

Certain statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of insurance covering risks associated with the Company's business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which the Company has little or no control. See the Company's Annual Report on Form 10-K and Annual Report to Shareholders for the year ended December 31, 2007 and other public filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to Pulte's business. Pulte undertakes no duty to update any forward-looking statement whether as a result of new information, future events or changes in Pulte's expectations.

About Pulte Homes

Pulte Homes, Inc., (NYSE: PHM), based in Bloomfield Hills, Mich., is one of America's largest home building companies with operations in 51 markets and 26 states. During its 58-year history, the company has delivered more than 500,000 new homes. Since 2000, Pulte Homes operations have earned more top-three finishes than any other homebuilder in the annual J.D. Power and Associates(R) New Home-Builder Customer Satisfaction Study(sm). Under its Del Webb brand, Pulte is the nation's largest builder of active adult communities for people age 55 and older. Its DiVosta Homes brand is renowned in Florida for its Built Solid(TM) building system and distinctive master-planned communities. Pulte Mortgage LLC is a nationwide lender offering Pulte customers a wide variety of loan products and superior service. Websites: http://www.pulte.com ; http://www.delwebb.com ; http://www.divosta.com .

                              Pulte Homes, Inc.
                        Condensed Consolidated Results
                                Of Operations
                    (000's omitted, except per share data)
                                 (Unaudited)

                                                      Three Months Ended
                                                           March 31,
                                                  --------------------------
                                                      2008          2007
                                                  -----------    ----------
    CONSOLIDATED RESULTS:

    Revenues:
     Homebuilding                                 $1,398,109     $1,829,908
     Financial Services                               43,488         39,581
     Other non-operating                               7,222          1,944
                                                  ----------     ----------
    Total Revenues                                $1,448,819     $1,871,433
                                                  ==========     ==========
    Pre-tax income (loss):
     Homebuilding                                  $(705,130)     $(148,386)
     Financial Services                               15,044         13,195
     Other non-operating                              (2,970)        (7,357)
                                                   ----------     ----------

    Loss before income taxes                        (693,056)      (142,548)

    Income taxes (benefit)*                            3,088        (56,876)
                                                   ----------     ----------
    Net loss                                       $(696,144)      $(85,672)
                                                   ==========     ==========
    EARNINGS PER SHARE -
      ASSUMING DILUTION:

    Net loss                                          $(2.75)        $(0.34)
                                                   ==========     ==========
    Shares used in per share calculations            253,166        251,919
                                                   ==========     ==========

     * Due to the uncertainty of the realization of a $258 million deferred
     tax benefit associated with the $693.1 million pre-tax loss in the first
     quarter 2008, the Company recorded a valuation allowance against that
     deferred tax benefit during the quarter, in accordance with Statement of
     Financial Accounting Standards No. 109 "Accounting for Income Taxes."



                                Pulte Homes, Inc.
                      Condensed Consolidated Balance Sheets
                                ($000's omitted)

                                  March 31,      December 31,
                                    2008            2007
                                 (Unaudited)     (Unaudited)
                                ------------    -------------
    ASSETS
    Cash and equivalents          $1,071,165      $1,060,311
    Unfunded settlements              29,017          38,714
    House and land inventory       6,179,847       7,027,511
    Land held for sale               324,801         252,563
    Land, not owned, under
     option agreements                19,507          20,838
    Residential mortgage
     loans available-for-sale        284,104         447,089
    Investments in
     unconsolidated entities         109,991         105,479
    Other assets                     922,786       1,167,292
    Deferred income tax assets       105,906         105,906
                                  ----------     -----------
                                  $9,047,124     $10,225,703
                                  ==========     ===========
    LIABILITIES AND
     SHAREHOLDERS' EQUITY
    Liabilities:
      Accounts payable,
       accrued and other
       liabilities                $1,578,921      $1,859,911
      Collateralized short-
       term debt, recourse
       solely to applicable
       subsidiary assets             257,139         440,611
      Income taxes                   108,105         126,758
      Senior notes                 3,478,577       3,478,230
                                  ----------     -----------
        Total Liabilities          5,422,742       5,905,510

    Shareholders' Equity           3,624,382       4,320,193
                                  ----------     -----------
                                  $9,047,124     $10,225,703
                                  ==========     ===========


                                Pulte Homes, Inc.
                                  Segment Data
                                ($000's omitted)
                                   (Unaudited)

                                                      Three Months Ended
                                                           March 31,
                                                -----------------------------
                                                    2008               2007
                                                ----------         ----------
    HOMEBUILDING:
      Home sales (settlements)                  $1,396,431         $1,789,282
      Land sales                                     1,678             40,626
                                                ----------         ----------
        Homebuilding Revenue                     1,398,109          1,829,908

      Home cost of sales                        (1,845,054)        (1,594,471)
      Land cost of sales                           (64,948)           (56,362)
      Selling, general
       & administrative expense                   (201,937)          (281,653)
      Other income (expense), net                    8,700            (45,808)
                                                ----------         ----------

      Pre-tax loss                               $(705,130)         $(148,386)
                                                ===========        ===========
    FINANCIAL SERVICES:
      Pre-tax income                               $15,044            $13,195
                                                ===========        ===========
    OTHER NON-OPERATING:
      Pre-tax loss:
      Net interest income                           $6,474               $954
      Other expense, net                            (9,444)            (8,311)
                                                -----------        -----------
        Total Other non-operating                  $(2,970)           $(7,357)
                                                ===========        ===========


                                Pulte Homes, Inc.
                             Business Operating Data
                                ($000's omitted)
                                   (Unaudited)

                                     Three Months Ended
                                          March 31,
                                 -------------------------
                                     2008           2007
                                 ----------     ----------
    Homebuilding settlement
     revenues                    $1,396,431     $1,789,282
                                 ==========     ==========
      Unit settlements:
        Northeast                       393            371
        Southeast                       748            755
        Florida                         741          1,027
        Midwest                         623            643
        Central                         551            699
        Southwest                     1,197          1,333
        California                      480            592
                                 ----------     ----------
                                      4,733          5,420
                                 ==========     ==========
      Average selling price            $295           $330
                                 ==========     ==========
      Unit net new orders:
        Northeast                       502            704
        Southeast                       824          1,006
        Florida                         993          1,522
        Midwest                         579          1,020
        Central                         530            624
        Southwest                     1,467          2,467
        California                      507          1,156
                                 ----------     ----------
                                      5,402          8,499
      Net new orders -           ==========     ==========
       dollars*                  $1,461,000     $2,912,000
                                 ==========     ==========
      Unit backlog:
        Northeast                       900          1,250
        Southeast                     1,357          1,959
        Florida                       1,504          1,707
        Midwest                         784          1,774
        Central                         849          1,047
        Southwest                     2,280          3,853
        California                      885          1,744
                                 ----------     ----------
                                      8,559         13,334
                                 ==========     ==========
      Dollars in backlog         $2,574,000     $4,703,000
                                 ==========     ==========

    * Net new order dollars represent a composite of new order dollars
    combined with other movement of the dollars in backlog related to
    cancellations and change orders.



                              Pulte Homes, Inc.
                      Business Operating Data, continued
                               ($000's omitted)
                                 (Unaudited)

                                  Three Months Ended
                                       March 31,
                               ----------------------
                                   2008        2007
                               ---------  -----------
    MORTGAGE ORIGINATIONS:

      Origination volume          3,514        5,158
                               =========  ===========
      Origination principal    $803,400   $1,143,000
                               =========  ===========
      Capture rate percentage      89.9%        93.0%
                               =========  ===========


                              Pulte Homes, Inc.
                           Supplemental Information
                               ($000's omitted)
                                 (Unaudited)

                                  Three Months Ended
                                      March 31,
                                 ------------------
                                   2008       2007
                                 -------    -------
    Interest expense:
      Homebuilding (included
       in home cost of sales)    $58,492    $47,958
      Financial Services           1,870      4,618
      Other non-operating            748        990
                                 -------    -------
        Total interest expense   $61,110    $53,566
                                 =======    =======
    Depreciation & amortization  $19,715    $21,660
                                 =======    =======

SOURCE Pulte Homes

/CONTACT: Calvin Boyd, Vice President of Pulte Homes, Inc., +1-248-433-4527, mailto:calvin.boyd@pulte.com/
/Web site: http://www.pulte.com http://www.delwebb.com http://www.divosta.com/

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