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PulteGroup, Inc. Message Board

  • bluecheese4u bluecheese4u Jan 31, 2013 9:19 AM Flag

    PulteGroup Reports Financial Results For 2012 Fourth Quarter

    PulteGroup Reports Financial Results For 2012 Fourth Quarter

    - Q4 Earnings of $0.15 Per Share After Net Charges of $0.19 Per Share Resulting from Mortgage and Debt-Repurchase Charges, Partially Offset by Tax Benefits

    - Adjusted Q4 Home Sale Gross Margin of 21.8% Increased 320 Basis Points Over Prior Year and 20 Basis Points Over Prior Quarter

    - SG&A Reduced 40 Basis Points from Prior Year to 9.6% of Home Sale Revenues

    - Net New Orders Increased 27% to 3,926 Generated from 4% Fewer Communities

    - Dollar Value of Net New Orders Increased 41% to $1.2 Billion

    - Backlog Value Increased 82% to $1.9 Billion; Unit Backlog Up 65% to 6,458 Homes

    - Repurchased $496 Million of Senior Notes in Q4; Retired $592 Million of Debt in 2012

    - Cash Balance of $1.5 Billion Up $292 Million from Prior Year End

    BLOOMFIELD HILLS, Mich., Jan. 31, 2013 /PRNewswire/ -- PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2012. For the quarter, PulteGroup reported net income of $59 million, or $0.15 per share. Reported net income includes charges of $49 million, or $0.13 per share, for potential future loan repurchase obligations, and $32 million, or $0.08 per share, relating to the repurchase of $496 million of senior notes in the period. These charges were partially offset by $8 million, or $0.02 per share, of income tax benefits associated with the favorable resolution of certain tax matters.

    In the prior year fourth quarter, PulteGroup reported net income of $14 million, or $0.04 per share, inclusive of net charges totaling $27 million, or $0.07 per share, related to potential future loan repurchase obligations, land-related charges, and debt repurchases, partially offset by land-sale gains and income tax benefits.

    "We are pleased to report another quarter of strong financial results that demonstrate improved fundamental operating performance and higher returns on invested capital," said Richard J. Dugas, Jr., Chairman, President and CEO of PulteGroup. "Improving market conditions, combined with the value creation initiatives we have implemented over the last two years, helped to drive a 320 basis point increase in our adjusted gross margin to 21.8%. In addition, our continued focus on cost controls enabled us to realize a 40 basis point decrease in our SG&A as a percentage of home sales to 9.6%."

    "Fourth quarter results also demonstrated continued strong cash flow generation consistent with our focus on greater capital efficiency. For the full year, we were able to increase our cash position by $292 million after paying down almost $600 million of senior notes."

    "We now look ahead to 2013 with expectations for a continued rebound in U.S. housing driven by record low interest rates, higher rent vs. own costs, rising home prices and sharply lower overall housing inventory. Given this expectation, and consistent with our focus on improving long-term returns, we have authorized an additional $250 million per year of investment in land and related development in 2013 and 2014. This incremental investment, which will raise planned land spend for each year to approximately $1.2 billion, will be made using the same disciplined capital investment process we established 18 months ago. The incremental investment is expected to provide additional land resources for use primarily in 2014 and beyond."

    Fourth Quarter Results

    Home sale revenues in the fourth quarter ended December 31, 2012, totaled $1.5 billion, an increase of 27% over the prior year's fourth quarter. The increase in revenue was driven by a 20% increase in closings to 5,154 homes, combined with a 6% increase in average selling price to $287,000. The higher average selling price reported for the quarter reflects price increases, as well as a continued shift in product mix to include more move-up homes being closed in the period.

    The Company's adjusted home sale gross margin for the fourth quarter was 21.8%, an increase of 320 basis points over the prior year and 20 basis points compared with the third quarter of 2012. Homebuilding SG&A expense for the quarter was $142 million, or 9.6% of home sale revenues. SG&A for the prior year period was $117 million, or 10.0% of home sale revenues.

    For the quarter, the Company reported 3,926 net new orders, an increase of 27% over prior year orders of 3,084. The dollar value of net new orders in the quarter was $1.2 billion, an increase of 41% over the prior year order value of $828 million. The Company operated out of 4% fewer communities in the fourth quarter of 2012 compared with the comparable prior year period. Contract backlog at year end was valued at $1.9 billion and totaled 6,458 homes, which represent increases of 82% and 65%, respectively, over the prior year.

    The Company's financial services operations reported a pretax loss of $24 million in the quarter, inclusive of a $49 million charge associated with potential future loan repurchase obligations. The increase in estimated repurchase obligations primarily reflects the Company's expectation that repurchase requests will now continue through 2014, or a year longer than previously estimated, coupled with a higher volume of repurchase requests experienced in 2012.

    During the quarter, the Company used available cash to repurchase $496 million principal value of its senior notes, resulting in a pretax charge of $32 million. Combined with transactions completed earlier in the year, the Company retired an aggregate $592 million principal value of its senior notes during 2012 which helped to lower the Company's year-end debt and net debt-to-total capitalization to 53% and 32%, respectively.

    A conference call discussing PulteGroup's fourth quarter results will be held Thursday, January 31, 2013, at 8:30 a.m. Eastern Time


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