Q3 Earnings of
Adjusted Q3 Earnings of
Home Sale Revenues Increased 21% to
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
Company Repurchased
Quarter End Cash Balance of
"
"We are running our business with a more balanced approach to capital allocation. Through the first nine months of 2013, we have invested
"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
Third Quarter Results
Home sale revenues for the third quarter increased 21% from the prior year to
For the quarter, pretax income from homebuilding operations more than doubled to
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
The Company's financial services operations reported third quarter pretax income of
Through open-market transactions,
A conference call discussing
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
About
For more information about
PulteGroup, Inc. Consolidated Results of Operations ($000's omitted, except per share data) (Unaudited) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||
Revenues: |
|||||||||||
Homebuilding |
|||||||||||
Home sale revenues |
$ |
1,491,959 |
$ |
1,232,704 |
$ |
3,811,386 |
$ |
3,070,895 |
|||
Land sale revenues |
55,783 |
22,623 |
102,299 |
69,770 |
|||||||
1,547,742 |
1,255,327 |
3,913,685 |
3,140,665 |
||||||||
Financial Services |
34,336 |
47,264 |
110,571 |
112,367 |
|||||||
Total revenues |
1,582,078 |
1,302,591 |
4,024,256 |
3,253,032 |
|||||||
Homebuilding Cost of Revenues: |
|||||||||||
Home sale cost of revenues |
1,180,137 |
1,023,704 |
3,072,425 |
2,605,249 |
|||||||
Land sale cost of revenues |
49,933 |
21,061 |
92,661 |
62,069 |
|||||||
1,230,070 |
1,044,765 |
3,165,086 |
2,667,318 |
||||||||
Financial Services expenses |
23,244 |
20,578 |
68,867 |
62,914 |
|||||||
Selling, general and administrative expenses |
138,637 |
125,191 |
418,794 |
372,691 |
|||||||
Other expense (income), net |
17,055 |
7,453 |
79,166 |
24,570 |
|||||||
Interest income |
(1,036) |
(1,219) |
(3,321) |
(3,582) |
|||||||
Interest expense |
171 |
201 |
544 |
616 |
|||||||
Equity in (earnings) loss of unconsolidated entities |
(785) |
(284) |
(282) |
(3,836) |
|||||||
Income before income taxes |
174,722 |
105,906 |
295,402 |
132,341 |
|||||||
Income tax expense (benefit) |
(2,107,162) |
(10,727) |
(2,104,661) |
(15,062) |
|||||||
Net income |
$ |
2,281,884 |
$ |
116,633 |
$ |
2,400,063 |
$ |
147,403 |
|||
Per share: |
|||||||||||
Basic earnings |
$ |
5.92 |
$ |
0.31 |
$ |
6.20 |
$ |
0.39 |
|||
Diluted earnings |
$ |
5.87 |
$ |
0.30 |
$ |
6.14 |
$ |
0.38 |
|||
Cash dividends declared |
$ |
0.10 |
$ |
— |
$ |
0.10 |
$ |
— |
|||
PulteGroup, Inc. Condensed Consolidated Balance Sheets ($000's omitted) (Unaudited) |
|||||
September 30, 2013 |
December 31, 2012 |
||||
ASSETS |
|||||
Cash and equivalents |
$ |
1,349,994 |
$ |
1,404,760 |
|
Restricted cash |
69,421 |
71,950 |
|||
House and land inventory |
4,150,964 |
4,214,046 |
|||
Land held for sale |
65,100 |
91,104 |
|||
Land, not owned, under option agreements |
27,612 |
31,066 |
|||
Residential mortgage loans available-for-sale |
296,922 |
318,931 |
|||
Investments in unconsolidated entities |
45,006 |
45,629 |
|||
Other assets |
440,524 |
407,675 |
|||
Intangible assets |
139,423 |
149,248 |
|||
Deferred tax assets, net |
2,108,756 |
— |
|||
$ |
8,693,722 |
$ |
6,734,409 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Liabilities: |
|||||
Accounts payable |
$ |
214,098 |
$ |
178,274 |
|
Customer deposits |
173,665 |
101,183 |
|||
Accrued and other liabilities |
1,445,649 |
1,418,063 |
|||
Income tax liabilities |
196,870 |
198,865 |
|||
Financial Services debt |
115,098 |
138,795 |
|||
Senior notes |
2,056,657 |
2,509,613 |
|||
4,202,037 |
4,544,793 |
||||
Shareholders' equity |
4,491,685 |
2,189,616 |
|||
$ |
8,693,722 |
$ |
6,734,409 |
||
PulteGroup, Inc. Consolidated Statements of Cash Flows ($000's omitted) (Unaudited) |
|||||
Nine Months Ended |
|||||
September 30, |
|||||
2013 |
2012 |
||||
Cash flows from operating activities: |
|||||
Net income |
$ |
2,400,063 |
$ |
147,403 |
|
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: |
|||||
Deferred income taxes |
(2,108,756) |
— |
|||
Write-down of land inventory and deposits and pre-acquisition costs |
6,371 |
12,623 |
|||
Depreciation and amortization |
23,134 |
22,278 |
|||
Stock-based compensation expense |
21,570 |
14,368 |
|||
Equity in (earnings) loss of unconsolidated entities |
(282) |
(3,836) |
|||
Distributions of earnings from unconsolidated entities |
1,693 |
7,223 |
|||
Loss on debt retirements |
26,930 |
— |
|||
Other non-cash, net |
5,943 |
5,254 |
|||
Increase (decrease) in cash due to: |
|||||
Restricted cash |
1,654 |
(966) |
|||
Inventories |
89,040 |
160,973 |
|||
Residential mortgage loans available-for-sale |
21,967 |
(5,275) |
|||
Other assets |
(29,989) |
(1,612) |
|||
Accounts payable, accrued and other liabilities |
97,607 |
63,832 |
|||
Income tax liabilities |
(1,995) |
(1,033) |
|||
Net cash provided by (used in) operating activities |
554,950 |
421,232 |
|||
Cash flows from investing activities: |
|||||
Distributions from unconsolidated entities |
200 |
2,696 |
|||
Investments in unconsolidated entities |
(1,057) |
(1,266) |
|||
Net change in loans held for investment |
236 |
736 |
|||
Change in restricted cash related to letters of credit |
875 |
26,096 |
|||
Proceeds from the sale of property and equipment |
9 |
4,705 |
|||
Capital expenditures |
(18,354) |
(10,597) |
|||
Net cash provided by (used in) investing activities |
(18,091) |
22,370 |
|||
Cash flows from financing activities: |
|||||
Financial Services borrowings (repayments) |
(23,697) |
103,000 |
|||
Other borrowings (repayments) |
(477,220) |
(92,493) |
|||
Stock option exercises |
18,549 |
27,432 |
|||
Stock repurchases |
(89,940) |
(961) |
|||
Dividends paid |
(19,317) |
— |
|||
Net cash provided by (used in) financing activities |
(591,625) |
36,978 |
|||
Net increase (decrease) in cash and equivalents |
(54,766) |
480,580 |
|||
Cash and equivalents at beginning of period |
1,404,760 |
1,083,071 |
|||
Cash and equivalents at end of period |
$ |
1,349,994 |
$ |
1,563,651 |
|
Supplemental Cash Flow Information: |
|||||
Interest paid (capitalized), net |
$ |
(18,304) |
$ |
(28,072) |
|
Income taxes paid (refunded), net |
$ |
(792) |
$ |
(12,901) |
|
PulteGroup, Inc. Segment Data ($000's omitted) (Unaudited) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||
HOMEBUILDING: |
|||||||||||
Home sale revenues |
$ |
1,491,959 |
$ |
1,232,704 |
$ |
3,811,386 |
$ |
3,070,895 |
|||
Land sale revenues |
55,783 |
22,623 |
102,299 |
69,770 |
|||||||
Total Homebuilding revenues |
1,547,742 |
1,255,327 |
3,913,685 |
3,140,665 |
|||||||
Home sale cost of revenues |
1,180,137 |
1,023,704 |
3,072,425 |
2,605,249 |
|||||||
Land sale cost of revenues |
49,933 |
21,061 |
92,661 |
62,069 |
|||||||
Selling, general and administrative expenses |
138,637 |
125,191 |
418,794 |
372,691 |
|||||||
Equity in (earnings) loss of unconsolidated entities |
(749) |
(243) |
(186) |
(3,714) |
|||||||
Other expense (income), net |
17,055 |
7,453 |
79,166 |
24,570 |
|||||||
Interest income, net |
(865) |
(1,018) |
(2,777) |
(2,966) |
|||||||
Income before income taxes |
$ |
163,594 |
$ |
79,179 |
$ |
253,602 |
$ |
82,766 |
|||
FINANCIAL SERVICES: |
|||||||||||
Income before income taxes |
$ |
11,128 |
$ |
26,727 |
$ |
41,800 |
$ |
49,575 |
|||
CONSOLIDATED: |
|||||||||||
Income before income taxes |
$ |
174,722 |
$ |
105,906 |
$ |
295,402 |
$ |
132,341 |
|||
PulteGroup, Inc. Segment Data, continued ($000's omitted) (Unaudited) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||
Home sale revenues |
$ |
1,491,959 |
$ |
1,232,704 |
$ |
3,811,386 |
$ |
3,070,895 |
|||
Closings - units |
|||||||||||
Northeast |
532 |
456 |
1,212 |
1,224 |
|||||||
Southeast |
823 |
776 |
2,209 |
1,984 |
|||||||
Florida |
760 |
588 |
1,992 |
1,633 |
|||||||
Texas |
976 |
923 |
2,833 |
2,484 |
|||||||
North |
926 |
863 |
2,333 |
2,057 |
|||||||
Southwest |
800 |
812 |
2,223 |
1,969 |
|||||||
4,817 |
4,418 |
12,802 |
11,351 |
||||||||
Average selling price |
$ |
310 |
$ |
279 |
$ |
298 |
$ |
271 |
|||
Net new orders - units |
|||||||||||
Northeast |
405 |
432 |
1,519 |
1,599 |
|||||||
Southeast |
714 |
787 |
2,560 |
2,384 |
|||||||
Florida |
589 |
679 |
2,094 |
2,147 |
|||||||
Texas |
813 |
978 |
2,881 |
3,212 |
|||||||
North |
720 |
939 |
2,665 |
2,872 |
|||||||
Southwest |
540 |
729 |
2,147 |
2,899 |
|||||||
3,781 |
4,544 |
13,866 |
15,113 |
||||||||
Net new orders - dollars (a) |
$ |
1,210,976 |
$ |
1,312,490 |
$ |
4,312,597 |
$ |
4,257,541 |
|||
Unit backlog |
|||||||||||
Northeast |
929 |
800 |
|||||||||
Southeast |
1,262 |
1,002 |
|||||||||
Florida |
1,167 |
1,172 |
|||||||||
Texas |
1,503 |
1,553 |
|||||||||
North |
1,599 |
1,524 |
|||||||||
Southwest |
1,062 |
1,635 |
|||||||||
7,522 |
7,686 |
||||||||||
Dollars in backlog |
$ |
2,432,747 |
$ |
2,246,296 |
|||||||
(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 |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||
MORTGAGE ORIGINATIONS: |
|||||||||||
Origination volume |
3,126 |
3,073 |
8,660 |
7,697 |
|||||||
Origination principal |
$ |
733,433 |
$ |
685,001 |
$ |
1,998,697 |
$ |
1,681,321 |
|||
Capture rate |
79.5% |
82.6% |
80.5% |
81.3% |
|||||||
Supplemental Data ($000's omitted) (Unaudited) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||
Interest in inventory, beginning of period |
$ |
298,575 |
$ |
358,451 |
$ |
331,880 |
$ |
355,068 |
|||
Interest capitalized |
35,962 |
50,730 |
118,527 |
153,369 |
|||||||
Interest expensed |
(68,013) |
(57,155) |
(183,883) |
(156,411) |
|||||||
Interest in inventory, end of period |
$ |
266,524 |
$ |
352,026 |
$ |
266,524 |
$ |
352,026 |
|||
Interest incurred |
$ |
35,962 |
$ |
50,730 |
$ |
118,527 |
$ |
153,369 |
|||
This report contains information about our home sale gross margins and earnings per share reflecting certain adjustments. These measures are considered non-GAAP financial measures under the
The following tables set forth a reconciliation of these non-GAAP financial measures to the GAAP financial measures that management believes to be most directly comparable ($000's omitted):
Adjusted Home Sale Gross Margin |
||||||||||||||
Three Months Ended |
||||||||||||||
September 30, 2013 |
June 30, 2013 |
March 30, 2013 |
December 31, 2012 |
September 30, 2012 |
||||||||||
Home sale revenues |
$ |
1,491,959 |
$ |
1,219,675 |
$ |
1,099,752 |
$ |
1,481,517 |
$ |
1,232,704 |
||||
Home sale cost of revenues |
1,180,137 |
990,818 |
901,470 |
1,228,201 |
1,023,704 |
|||||||||
Home sale gross margin |
311,822 |
228,857 |
198,282 |
253,316 |
209,000 |
|||||||||
Add: |
||||||||||||||
Land and community valuation adjustments (a) |
— |
— |
— |
2,250 |
385 |
|||||||||
Capitalized interest amortization (a) |
68,013 |
62,193 |
53,677 |
67,880 |
57,155 |
|||||||||
Adjusted home sale gross margin |
$ |
379,835 |
$ |
291,050 |
$ |
251,959 |
$ |
323,446 |
$ |
266,540 |
||||
Home sale gross margin as a percentage of home sale revenues |
20.9% |
18.8% |
18.0% |
17.1% |
17.0% |
|||||||||
Adjusted home sale gross margin as a percentage of home sale revenues |
25.5% |
23.9% |
22.9% |
21.8% |
21.6% |
(a) Write-offs of capitalized interest related to impairments are reflected in capitalized interest amortization.
Adjusted Earnings Per Share |
|||||
Dollars |
Earnings Per Share |
||||
Net income |
$ |
2,281,884 |
$ |
5.87 |
|
Less: reversal of deferred tax asset valuation allowance |
(2,108,756) |
(5.46) |
|||
Addback: earnings per share allocated to participating securities (b) |
— |
0.04 |
|||
(2,108,756) |
(5.42) |
||||
Adjusted net income, excluding reversal of deferred tax asset valuation allowance |
$ |
173,128 |
$ |
0.45 |
|
(b) Represents required adjustments under the "two class method" of calculating earnings per share. The effect of the two class method on the Company's earnings per share was exacerbated for the three and nine months ended September 30, 2013, by the impact the deferred tax asset valuation allowance reversal had on the Company's net income. In future periods, the impact of the two class method on the Company's earnings per share is expected to be de minimis.
SOURCE