PulteGroup Reports Third Quarter 2013 Financial Results

BLOOMFIELD HILLS, Mich., Oct. 24, 2013 /PRNewswire/ --

Q3 Earnings of $5.87 Per Share, Including $5.42 Per Share from the Reversal of Substantially all of the Company's Deferred Tax Asset Valuation Allowance

Adjusted Q3 Earnings of $0.45 Per Share, Excluding the Deferred Tax Asset Valuation Allowance Reversal, Compared with Prior Year Earnings of $0.30 Per Share

Home Sale Revenues Increased 21% to $1.5 Billion, With Average Selling Price Gaining 11% to $310,000

Adjusted Gross Margin of 25.5% Increased 390 Basis Points from Prior Year and 160 Basis Points from Q2 2013; Reported Q3 Gross Margin of 20.9% Compared with 17.0% in Q3 2012

SG&A Declined 90 Basis Points from Prior Year to 9.3% of Home Sale Revenues

Backlog Value Increased 8% Over the Prior Year to $2.4 Billion Representing 7,522 Homes

Company Repurchased $83 Million of Stock and $27 Million of Debt in the Quarter

Quarter End Cash Balance of $1.4 Billion

Debt-to-Total Capital of 31%, Down from 53% at Year-end 2012

PulteGroup, Inc. (NYSE: PHM) announced today financial results for its third quarter ended September 30, 2013.  For the quarter, the Company reported net income of $2.3 billion, or $5.87 per share, including $2.1 billion, or $5.42 per share, relating to the reversal of substantially all of the Company's deferred tax asset valuation allowance.  Excluding the impact of the deferred tax asset valuation allowance reversal, net income would have been $173 million, or $0.45 per share, compared with prior year net income of $117 million, or $0.30 per share.

"PulteGroup's third quarter financial results demonstrate continued progress in our strategic repositioning of the Company to deliver better earnings and returns on invested capital," said Richard J. Dugas, Jr., Chairman, President and Chief Executive Officer of PulteGroup.  "We are extremely pleased with the gains in profitability and overall returns that our Value Creation initiatives continue to drive within our homebuilding operations, while our stronger balance sheet provides us the flexibility to systematically increase investment into the business while also returning funds to our shareholders.

"We are running our business with a more balanced approach to capital allocation.  Through the first nine months of 2013, we have invested $918 million in land and development, retired $461 million of debt, repurchased $83 million of our common stock, and declared $38 million in dividends.  We believe that by being more balanced in our allocation of capital across investment opportunities, we can deliver better returns over a housing cycle.

"Our disciplined investment strategies should help to keep the Company in a strong position when facing changes in market conditions such as the reduced demand the industry experienced during the third quarter.  While consumers have recently slowed home purchases due to higher home prices, a rapid rise in mortgage rates, and political and economic uncertainty, we believe the slowdown will ultimately prove to be short lived within a sustained, multiyear housing recovery.  Consistent with this view, we have increased our annual land investment authorization to $1.6 billion for 2014, which represents an incremental $200 million of investment from our current forecast for 2013 and almost $700 million from full year 2012 expenditures.  Even after this planned increase, we have significant financial flexibility to take advantage of market opportunities that may develop."

Third Quarter Results

Home sale revenues for the third quarter increased 21% from the prior year to $1.5 billion.  Higher revenues for the period were driven by an 11% increase in average selling price to $310,000, combined with a 9% increase in closings to 4,817 homes.  The higher average selling price realized in the quarter reflects price increases implemented by the Company and a continued shift in the mix of homes closed toward more move-up and active adult homes which typically carry higher selling prices.

For the quarter, pretax income from homebuilding operations more than doubled to $164 million, compared with prior year pretax income of $79 million.  The Company's adjusted home sale gross margin for the third quarter was 25.5%, an increase of 390 basis points over the prior year and 160 basis points over the second quarter of 2013.  Reported gross margin for the period increased 390 basis points over the prior year to 20.9%, and increased 210 basis points over the second quarter of 2013.  Homebuilding SG&A expense for the quarter was $139 million, or 9.3% of home sale revenues, compared with prior year SG&A expense of $125 million, or 10.2% of home sale revenues.

Net new orders for the third quarter totaled 3,781 homes, which is a decrease of 17% from the prior year.  On a dollar basis, signup value was $1.2 billion, which is down 8% from the third quarter of 2012.  The Company ended the quarter with 604 active communities, which is down 15% from the comparable prior year period.  PulteGroup's quarter-end backlog of 7,522 homes was valued at $2.4 billion, compared with prior year backlog of 7,686 homes with a value of $2.2 billion.

The Company's financial services operations reported third quarter pretax income of $11 million, compared with prior year pretax income of $27 million.  Lower pretax income for the period reflects the impact of less favorable market conditions and increased competition resulting from the rapid rise in interest rates, partially offset by higher loan originations.  Mortgage capture rate for the quarter was 80% compared with 83% for the same quarter last year.

Through open-market transactions, PulteGroup repurchased 5.3 million of its common shares, at a cost of $83 million, and $27 million of outstanding senior notes during the quarter.

A conference call discussing PulteGroup's third quarter 2013 results is scheduled for Thursday, October 24, 2013, at 8:30 a.m. Eastern Time.  Interested investors can access the live webcast via PulteGroup's corporate website at

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;;; and



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