News

01.28.15

PulteGroup Reports Financial Results For 2014 Fourth Quarter

ATLANTA, Jan. 29, 2015 /PRNewswire/ --

  • Q4 Pretax Income of $267 Million Increased 15% from Prior Year
  • Q4 Net Income of $217 Million, or $0.58 Per Share, Includes $0.16 Per Share of Tax and Insurance Benefits, Offset by $0.01 Per Share of Lease Exit Costs
  • Home Sale Gross Margin of 23.1%, Down 10 Basis Points from the Prior Year and Up 20 Basis Points Over Q3 2014
  • Home Sale Revenues Increased 10% to $1.8 Billion Driven by a 7% Increase in Closings to 5,316 Homes
  • Q4 Net New Orders Increased 1% to 3,232 Homes; Order Value Increased 2% to $1.1 Billion
  • Q4 Backlog of 5,850 Homes With a Value of $1.9 Billion
  • Quarter End Cash Balance of $1.3 Billion After Repurchasing $98 Million of Stock in the Quarter
  • Debt-to-Capitalization of 27%, Down from 31% at Year-end 2013

PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2014.  For the quarter, PulteGroup reported net income of $217 million, or $0.58 per share.  Net income for the period reflects $50 million, or $0.13 per share, of income tax expense. Prior year net income of $220 million, or $0.57 per share, reflects $12 million, or $0.03 per share, of income tax expense.

"Through continued execution of our Value Creation strategy, PulteGroup delivered outstanding fourth quarter and full-year results with solid top line growth and margin expansion driving a 31% increase in 2014 pretax income to $690 million," said Richard J. Dugas, Jr. , Chairman, President and CEO of PulteGroup.  "Our improved financial performance allowed us to increase investment into the business in 2014 to $1.8 billion, retire $246 million of debt and return $321 million to shareholders through dividends and expanded share repurchases."

"We are optimistic heading into 2015 as buyer sentiment began improving in late November supporting stronger traffic and signup levels throughout December and into January.  We believe the positive factors of an improving economy with declining energy costs, rising employment, lower mortgage rates and related fees, beneficial long-term demographic trends and a generally healthy supply of inventory, will continue to support a slow and sustained housing recovery. Within this environment, we remain focused on driving additional gains in construction and asset efficiency to deliver higher returns on invested capital.  Consistent with our positive market view and long-term business strategy, we expect to use our capital to support future growth, while consistently returning funds to shareholders."

Fourth Quarter Results

Home sale revenues for the fourth quarter totaled $1.8 billion, an increase of 10% over the prior year.  The increase in revenue was driven by a 7% increase in closings to 5,316 combined with a 3% increase in average selling price to $334,000. The higher average selling price in the quarter reflects 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 23.1%, a decrease of 10 basis points from the prior year, but up 20 basis points over the third quarter of 2014.  SG&A expense for the quarter of $146 million, or 8.2% of home sale revenues, included a $15 million, or $0.03 per share, reversal of construction related insurance reserves recorded in the period.  SG&A for the prior year period was $150 million, or 9.3% of home sale revenues.

As part of its corporate relocation, the Company recorded a fourth quarter charge in Other Expense, net of $8.7 million, or $0.01 per share, associated with lease exit costs for its former corporate headquarters in Michigan.

For the quarter, the Company reported 3,232 net new orders, an increase of 1% from prior year orders of 3,214.  The dollar value of net new orders increased 2% over the prior year to $1.1 billion.  The Company ended the year with 598 active communities, which is up 4% from the comparable prior year period.

PulteGroup's backlog at year end totaled 5,850 homes valued at $1.9 billion, compared with prior year backlog of 5,772 homes valued at $1.9 billion.  The average selling price in backlog increased 1% over the prior year to $332,000.

The Company's financial services operations reported pretax income of $13 million for the fourth quarter, an increase of 88% over prior year pretax income of $7 million.  Mortgage capture rate for the quarter was 81% compared with 79% in the comparable prior year quarter. The increase in financial services pretax income for the quarter was primarily the result of higher volumes and favorable market conditions which drove higher gains on mortgage sales.

For the quarter, the Company reported $50 million of income tax expense, representing an effective tax rate of 19%.  The Company's tax rate for the quarter is lower than its statutory provision primarily due to $50 million, or $0.13 per share, of tax benefits associated with the resolution of certain federal and state tax matters and adjustments to its state deferred tax asset valuation allowances.

Through open-market transactions, PulteGroup repurchased 5.2 million of its common shares in the quarter for $98 million, or $18.87 per share.  For the full year, PulteGroup repurchased 12.9 million, or 3.4%, of its common shares outstanding, for $246 million, or $19.11 per share.  The Company ended the year with a cash balance of $1.3 billion and a debt-to-capitalization ratio of 27%.

A conference call discussing PulteGroup's fourth quarter results will be held Thursday, January 29, 2015, 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 presentation 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, 2013, 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 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,


2014


2013


2014


2013

Revenues:












Homebuilding












Home sale revenues

$

1,776,469



$

1,612,923



$

5,662,171



$

5,424,309


Land sale revenues

9,995



12,036



34,554



114,335



1,786,464



1,624,959



5,696,725



5,538,644


Financial Services

36,093



30,380



125,638



140,951


Total revenues

1,822,557



1,655,339



5,822,363



5,679,595














Homebuilding Cost of Revenues:












Home sale cost of revenues

1,366,584



1,238,103



4,343,249



4,310,528


Land sale cost of revenues

8,367



11,765



23,748



104,426



1,374,951



1,249,868



4,366,997



4,414,954














Financial Services expenses

23,179



23,513



71,239



92,379


Selling, general, and administrative expenses

146,024



149,705



667,815



568,500


Other expense, net

13,183



1,588



38,745



80,753


Interest income

(1,200)



(1,075)



(4,632)



(4,395)


Interest expense

224



168



849



712


Equity in earnings of unconsolidated entities

(924)



(848)



(8,408)



(1,130)


Income before income taxes

267,120



232,420



689,758



527,822


Income tax expense (benefit)

50,025



12,367



215,420



(2,092,294)


Net income

$

217,095



$

220,053



$

474,338



$

2,620,116














Net income per share:












Basic

$

0.58



$

0.58



$

1.27



$

6.79


Diluted

$

0.58



$

0.57



$

1.26



$

6.72


Cash dividends declared

$

0.08



$

0.05



$

0.23



$

0.15














Number of shares used in calculation:












Basic

369,533



379,879



370,377



383,077


Effect of dilutive securities

3,734



3,845



3,725



3,789


Diluted

373,267



383,724



374,102



386,866


 

 

PulteGroup, Inc.

Condensed Consolidated Balance Sheets

($000's omitted)

(Unaudited)








December 31,
 2014


December 31,
 2013







ASSETS












Cash and equivalents

$

1,292,862



$

1,580,329


Restricted cash

16,358



72,715


House and land inventory

4,392,100



3,978,561


Land held for sale

101,190



61,735


Land, not owned, under option agreements

30,186



24,024


Residential mortgage loans available-for-sale

339,531



287,933


Investments in unconsolidated entities

40,368



45,323


Other assets

513,032



460,621


Intangible assets

123,115



136,148


Deferred tax assets, net

1,720,668



2,086,754



$

8,569,410



$

8,734,143














LIABILITIES AND SHAREHOLDERS' EQUITY












Liabilities:






Accounts payable

$

270,516



$

202,736


Customer deposits

142,642



134,858


Accrued and other liabilities

1,343,774



1,377,750


Income tax liabilities

48,722



206,015


Financial Services debt

140,241



105,664


Senior notes

1,818,561



2,058,168


Total liabilities

3,764,456



4,085,191








Shareholders' equity

4,804,954



4,648,952









$

8,569,410



$

8,734,143


 

 

 

PulteGroup, Inc.

Consolidated Statements of Cash Flows

($000's omitted)

(Unaudited)


Year Ended


December 31,


2014


2013

Cash flows from operating activities:






Net income

$

474,338



$

2,620,116


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

      operating activities:






Deferred income tax expense

223,769



(2,096,425)


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

11,168



9,672


Depreciation and amortization

39,864



31,587


Stock-based compensation expense

29,292



30,480


Loss on debt retirements

8,584



26,930


Equity in earnings of unconsolidated entities

(8,408)



(1,130)


Distributions of earnings from unconsolidated entities

4,932



2,049


Other non-cash, net

9,567



9,375


Increase (decrease) in cash due to:






Restricted cash

1,368



3,387


Inventories

(346,596)



265,064


Residential mortgage loans available-for-sale

(53,734)



28,448


Other assets

(46,249)



(38,190)


Accounts payable, accrued and other liabilities

(23,671)



(17,377)


Income tax liabilities

(14,975)



7,150


Net cash provided by operating activities

309,249



881,136


Cash flows from investing activities:






Distributions from unconsolidated entities

8,157



1,001


Investments in unconsolidated entities

(9)



(1,677)


Net change in loans held for investment

335



(12,265)


Change in restricted cash related to letters of credit

54,989



(4,152)


Proceeds from the sale of property and equipment

113



15


Capital expenditures

(48,790)



(28,899)


Cash used for business acquisitions

(82,419)




Net cash used in investing activities

(67,624)



(45,977)


Cash flows from financing activities:






Financial Services borrowings (repayments)

34,577



(33,131)


Other borrowings (repayments)

(250,631)



(479,827)


Stock option exercises

15,627



19,411


Stock repurchases

(253,019)



(127,661)


Dividends paid

(75,646)



(38,382)


Net cash used in financing activities

(529,092)



(659,590)


Net increase (decrease) in cash and equivalents

(287,467)



175,569


Cash and equivalents at beginning of period

1,580,329



1,404,760


Cash and equivalents at end of period

$

1,292,862



$

1,580,329








Supplemental Cash Flow Information:






Interest paid (capitalized), net

$

(4,561)



$

(171)


Income taxes paid (refunded), net

$

1,030



$

373


 

 

PulteGroup, Inc.

Segment Data

($000's omitted)

(Unaudited)














Three Months Ended


Year Ended


December 31,


December 31,


2014


2013


2014


2013

HOMEBUILDING:












Home sale revenues

$

1,776,469



$

1,612,923



$

5,662,171



$

5,424,309


Land sale revenues

9,995



12,036



34,554



114,335


Total Homebuilding revenues

1,786,464



1,624,959



5,696,725



5,538,644














Home sale cost of revenues

1,366,584



1,238,103



4,343,249



4,310,528


Land sale cost of revenues

8,367



11,765



23,748



104,426


Selling, general, and administrative expenses

146,024



149,705



667,815



568,500


Equity in earnings of unconsolidated entities

(836)



(806)



(8,226)



(993)


Other expense, net

13,183



1,588



38,745



80,753


Interest income, net

(976)



(907)



(3,783)



(3,683)


Income before income taxes

$

254,118



$

225,511



$

635,177



$

479,113














FINANCIAL SERVICES:












Income before income taxes

$

13,002



$

6,909



$

54,581



$

48,709














CONSOLIDATED:












Income before income taxes

$

267,120



$

232,420



$

689,758



$

527,822


 

 

 

PulteGroup, Inc.

Segment Data, continued

($000's omitted)

(Unaudited)














Three Months Ended


Year Ended


December 31,


December 31,


2014


2013


2014


2013













Home sale revenues

$

1,776,469



$

1,612,923



$

5,662,171



$

5,424,309














Closings - units












Northeast

496



623



1,568



1,835


Southeast

895



813



3,160



3,022


Florida

808



755



2,752



2,747


Texas

1,121



935



3,750



3,768


North

1,278



1,068



3,684



3,401


Southwest

718



770



2,282



2,993



5,316



4,964



17,196



17,766


Average selling price

$

334



$

325



$

329



$

305














Net new orders - units












Northeast

248



315



1,408



1,834


Southeast

615



604



3,075



3,164


Florida

567



501



2,841



2,595


Texas

727



682



3,773



3,563


North

653



682



3,311



3,347


Southwest

422



430



2,244



2,577



3,232



3,214



16,652



17,080


Net new orders - dollars (a)

$

1,105,042



$

1,081,971



$

5,558,937



$

5,394,566





















December 31,








2014


2013

Unit backlog












Northeast







461



621


Southeast







968



1,053


Florida







1,002



913


Texas







1,273



1,250


North







1,462



1,213


Southwest







684



722









5,850



5,772


Dollars in backlog







$

1,943,861



$

1,901,796














(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,


2014


2013


2014


2013

MORTGAGE ORIGINATIONS:












Origination volume

3,323



3,158



10,805



11,818


Origination principal

$

839,856



$

766,812



$

2,656,683



$

2,765,509


Capture rate

81.4

%


79.4

%


80.2

%


80.2

%

















 

 

 

Supplemental Data

($000's omitted)

(Unaudited)














Three Months Ended


Year Ended


December 31,


December 31,


2014


2013


2014


2013













Interest in inventory, beginning of period

$

190,342



$

266,524



$

230,922



$

331,880


Interest capitalized

32,651



35,580



131,444



154,107


Interest expensed

(55,355)



(71,182)



(194,728)



(255,065)


Interest in inventory, end of period

$

167,638



$

230,922



$

167,638



$

230,922


 

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pultegroup-reports-financial-results-for-2014-fourth-quarter-300027335.html

SOURCE PulteGroup, Inc.

Investors: Jim Zeumer, (404) 978-6434, Email: jim.zeumer@pultegroup.com

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