ATLANTA, Jan. 26, 2017 /PRNewswire/ -- PulteGroup,
Inc. (NYSE: PHM) announced today financial results for its fourth
quarter ended December 31,
2016. For the quarter, PulteGroup reported net income of
$273 million, or $0.83 per share, inclusive of $0.16 per share of insurance and income tax
benefits. Prior year reported net income of $228 million, or $0.64 per share, included $0.07 per share of benefits associated with the
reversal of certain mortgage and insurance reserves.
"With the gains achieved in our fourth quarter results,
PulteGroup completed a year in which it realized significant
growth, including double-digit year-over-year increases in orders,
closings, revenues, net income and backlog," said Ryan Marshall, President and CEO of
PulteGroup. "Consistent with the Company's long-term
objectives, our outstanding 2016 operating results drove strong
returns on invested capital, which we view as an important
component to delivering increased shareholder value over the
housing cycle.
"The gains PulteGroup realized for the quarter and full year
reflect the successful investments we are making into our business,
in combination with the positive demand conditions that continue in
the housing market. We believe that continued favorable
trends in the economy, job growth, demographics and consumer
confidence can more than offset the impact of modestly higher
rates, allowing the housing recovery to continue at a steady
pace."
Fourth Quarter Results
Home sale revenues for the fourth quarter totaled $2.4 billion, an increase of 21% over the prior
year. Higher revenues for the period were driven by a 9%
increase in closings to 6,197 homes, combined with an 11% increase
in average selling price to $391,000.
The Company's average selling price continues to benefit from
a shift in the mix of homes closed, along with price increases
realized by all three of the Company's national brands: Centex,
Pulte Homes and Del Webb.
Beginning with this quarter's reporting, the Company
reclassified internal and external sales commission expense from
home sale cost of revenues to SG&A in order to be more
consistent with a majority of its peers. Based on this
reclassification of commission expense, the Company's reported home
sale gross margin was 24.8% in the fourth quarter. Commission
expense was 3.5% of revenue in the quarter.
SG&A expense in the fourth quarter, including commissions,
was $208 million, or 8.6% of home
sale revenues. Fourth quarter SG&A includes a $55 million benefit relating to a reversal of
construction related insurance reserves in the period.
SG&A expense, including commissions, in the fourth quarter of
2015 was $210 million, or 10.5% of
home sale revenues. Prior year SG&A included a $30 million benefit relating to a reversal of
construction related insurance reserves.
For the quarter, net new orders increased 15% over the prior
year to 4,202 homes. The dollar value of fourth quarter
orders increased 22% over the prior year to $1.7 billion. The Company ended the year
with 726 active communities, which represents an increase of 17%
over the comparable prior year period.
PulteGroup's year-end backlog of 7,422 homes, valued at
$2.9 billion, compares with prior
year backlog of 6,731 homes, valued at $2.5
billion. The average selling price in backlog
increased 9% over the prior year to $396,000, which reflects a continued mix shift
toward higher priced homes and moderate price increases.
The Company's financial services operations reported pretax
income for the quarter of $25
million. Prior year financial services pretax income
of $29 million included a
$12 million benefit relating to a
reversal of mortgage repurchase reserves. Financial services
pretax income primarily benefitted from higher closing volumes in
the Company's homebuilding operations and a fourth quarter capture
rate of 82%.
For the quarter, the Company reported $141 million of income tax expense, representing
an effective tax rate of 34%. The Company's effective tax
rate for the quarter was lower than its previous guidance of 38%,
due to the recognition of energy efficient home credits, as well as
a deferred tax benefit relating to a legal entity
restructuring.
During the fourth quarter, the Company repurchased 13.2 million
common shares for $252 million, or an
average price of $19.07 per
share. The Company ended the year with a cash balance of
$723 million.
A conference call discussing PulteGroup's fourth quarter results
will be held Thursday, January 26,
2017, 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 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," "plan," "project," "may," "can," "could," "might,"
"should," "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; competition within the industries in which we operate;
the availability and cost of land and other raw materials used by
us in our 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 and the levels
of our land spend; the availability and cost of insurance covering
risks associated with our 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 our 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,
2015, 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, DiVosta Homes and John Wieland Homes and Neighborhoods, 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; www.divosta.com and www.jwhomes.com.
PulteGroup,
Inc.
Consolidated
Results of Operations
($000's omitted,
except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
Homebuilding
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
2,423,472
|
|
|
$
|
1,997,309
|
|
|
$
|
7,451,315
|
|
|
$
|
5,792,675
|
|
Land sale
revenues
|
15,431
|
|
|
20,885
|
|
|
36,035
|
|
|
48,536
|
|
|
2,438,903
|
|
|
2,018,194
|
|
|
7,487,350
|
|
|
5,841,211
|
|
Financial
Services
|
54,175
|
|
|
43,434
|
|
|
181,126
|
|
|
140,753
|
|
Total
revenues
|
2,493,078
|
|
|
2,061,628
|
|
|
7,668,476
|
|
|
5,981,964
|
|
|
|
|
|
|
|
|
|
Homebuilding Cost
of Revenues:
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
(1,821,672)
|
|
|
(1,456,186)
|
|
|
(5,587,974)
|
|
|
(4,235,945)
|
|
Land sale cost of
revenues
|
(14,256)
|
|
|
(13,867)
|
|
|
(32,115)
|
|
|
(35,858)
|
|
|
(1,835,928)
|
|
|
(1,470,053)
|
|
|
(5,620,089)
|
|
|
(4,271,803)
|
|
|
|
|
|
|
|
|
|
Financial Services
expenses
|
(29,370)
|
|
|
(14,138)
|
|
|
(108,573)
|
|
|
(82,047)
|
|
Selling, general,
and administrative expenses
|
(207,647)
|
|
|
(210,398)
|
|
|
(957,150)
|
|
|
(794,728)
|
|
Other expense,
net
|
(6,412)
|
|
|
6,276
|
|
|
(48,814)
|
|
|
(17,363)
|
|
Income before
income taxes
|
413,721
|
|
|
373,315
|
|
|
933,850
|
|
|
816,023
|
|
Income tax
expense
|
(140,549)
|
|
|
(145,288)
|
|
|
(331,147)
|
|
|
(321,933)
|
|
Net
income
|
$
|
273,172
|
|
|
$
|
228,027
|
|
|
$
|
602,703
|
|
|
$
|
494,090
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.83
|
|
|
$
|
0.65
|
|
|
$
|
1.76
|
|
|
$
|
1.38
|
|
Diluted
|
$
|
0.83
|
|
|
$
|
0.64
|
|
|
$
|
1.75
|
|
|
$
|
1.36
|
|
Cash dividends
declared
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
Number of shares
used in calculation:
|
|
|
|
|
|
|
|
Basic
|
325,975
|
|
|
348,699
|
|
|
339,747
|
|
|
356,576
|
|
Effect of dilutive
securities
|
1,834
|
|
|
3,047
|
|
|
2,376
|
|
|
3,217
|
|
Diluted
|
327,809
|
|
|
351,746
|
|
|
342,123
|
|
|
359,793
|
|
PulteGroup,
Inc.
Condensed
Consolidated Balance Sheets
($000's
omitted)
(Unaudited)
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
698,882
|
|
|
$
|
754,161
|
|
Restricted
cash
|
24,366
|
|
|
21,274
|
|
Total cash, cash
equivalents, and restricted cash
|
723,248
|
|
|
775,435
|
|
House and land
inventory
|
6,770,655
|
|
|
5,450,058
|
|
Land held for
sale
|
31,728
|
|
|
81,492
|
|
Residential mortgage
loans available-for-sale
|
539,496
|
|
|
442,715
|
|
Investments in
unconsolidated entities
|
51,447
|
|
|
41,267
|
|
Other
assets
|
857,426
|
|
|
893,345
|
|
Intangible
assets
|
154,792
|
|
|
110,215
|
|
Deferred tax assets,
net
|
1,049,408
|
|
|
1,394,879
|
|
|
$
|
10,178,200
|
|
|
$
|
9,189,406
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
405,455
|
|
|
$
|
327,725
|
|
Customer
deposits
|
187,891
|
|
|
186,141
|
|
Accrued and other
liabilities
|
1,448,994
|
|
|
1,516,783
|
|
Income tax
liabilities
|
34,860
|
|
|
57,050
|
|
Financial Services
debt
|
331,621
|
|
|
267,877
|
|
Term loan
|
—
|
|
|
498,423
|
|
Senior
notes
|
3,110,016
|
|
|
1,576,082
|
|
Total
liabilities
|
5,518,837
|
|
|
4,430,081
|
|
Shareholders'
equity
|
4,659,363
|
|
|
4,759,325
|
|
|
$
|
10,178,200
|
|
|
$
|
9,189,406
|
|
PulteGroup,
Inc.
Consolidated
Statements of Cash Flows
($000's
omitted)
(Unaudited)
|
|
Year
Ended
|
|
December
31,
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
602,703
|
|
|
$
|
494,090
|
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
Deferred income tax
expense
|
334,787
|
|
|
311,699
|
|
Write-down of land
and deposits and pre-acquisition costs
|
19,357
|
|
|
11,467
|
|
Depreciation and
amortization
|
54,007
|
|
|
46,222
|
|
Share-based
compensation expense
|
22,228
|
|
|
24,752
|
|
Loss on debt
retirements
|
657
|
|
|
—
|
|
Other, net
|
1,614
|
|
|
(4,865)
|
|
Increase (decrease)
in cash due to:
|
|
|
|
Inventories
|
(897,092)
|
|
|
(917,298)
|
|
Residential mortgage
loans available-for-sale
|
(99,527)
|
|
|
(104,609)
|
|
Other
assets
|
(45,721)
|
|
|
(175,150)
|
|
Accounts payable,
accrued and other liabilities
|
75,257
|
|
|
(23,898)
|
|
Net cash provided by
(used in) operating activities
|
68,270
|
|
|
(337,590)
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(39,295)
|
|
|
(45,440)
|
|
Investment in
unconsolidated subsidiaries
|
(14,539)
|
|
|
(454)
|
|
Cash used for
business acquisition
|
(430,458)
|
|
|
—
|
|
Other investing
activities, net
|
13,100
|
|
|
11,330
|
|
Net cash used in
investing activities
|
(471,192)
|
|
|
(34,564)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from debt
issuance
|
1,995,937
|
|
|
498,087
|
|
Repayments of
debt
|
(986,919)
|
|
|
(239,193)
|
|
Borrowings under
revolving credit facility
|
619,000
|
|
|
125,000
|
|
Repayments under
revolving credit facility
|
(619,000)
|
|
|
(125,000)
|
|
Financial Services
borrowings
|
63,744
|
|
|
127,636
|
|
Stock option
exercises
|
5,845
|
|
|
10,535
|
|
Share
repurchases
|
(603,206)
|
|
|
(442,738)
|
|
Dividends
paid
|
(124,666)
|
|
|
(115,958)
|
|
Net cash provided by
(used in) financing activities
|
350,735
|
|
|
(161,631)
|
|
Net increase
(decrease)
|
(52,187)
|
|
|
(533,785)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
775,435
|
|
|
1,309,220
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
723,248
|
|
|
$
|
775,435
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
Interest paid
(capitalized), net
|
$
|
(26,538)
|
|
|
$
|
(4,193)
|
|
Income taxes paid
(refunded), net
|
$
|
2,743
|
|
|
$
|
(5,654)
|
|
PulteGroup,
Inc.
Segment
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
HOMEBUILDING:
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
2,423,472
|
|
|
$
|
1,997,309
|
|
|
$
|
7,451,315
|
|
|
$
|
5,792,675
|
|
Land sale
revenues
|
15,431
|
|
|
20,885
|
|
|
36,035
|
|
|
48,536
|
|
Total Homebuilding
revenues
|
2,438,903
|
|
|
2,018,194
|
|
|
7,487,350
|
|
|
5,841,211
|
|
|
|
|
|
|
|
|
|
Home sale cost of
revenues
|
(1,821,672)
|
|
|
(1,456,186)
|
|
|
(5,587,974)
|
|
|
(4,235,945)
|
|
Land sale cost of
revenues
|
(14,256)
|
|
|
(13,867)
|
|
|
(32,115)
|
|
|
(35,858)
|
|
Selling, general, and
administrative expenses
|
(207,647)
|
|
|
(210,398)
|
|
|
(957,150)
|
|
|
(794,728)
|
|
Other income
(expense), net
|
(6,604)
|
|
|
6,276
|
|
|
(49,345)
|
|
|
(17,363)
|
|
Income before income
taxes
|
$
|
388,724
|
|
|
$
|
344,019
|
|
|
$
|
860,766
|
|
|
$
|
757,317
|
|
|
|
|
|
|
|
|
|
FINANCIAL
SERVICES:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
24,997
|
|
|
$
|
29,296
|
|
|
$
|
73,084
|
|
|
$
|
58,706
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED:
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
|
413,721
|
|
|
$
|
373,315
|
|
|
$
|
933,850
|
|
|
$
|
816,023
|
|
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Home sale
revenues
|
$
|
2,423,472
|
|
|
$
|
1,997,309
|
|
|
$
|
7,451,315
|
|
|
$
|
5,792,675
|
|
|
|
|
|
|
|
|
|
Closings -
units
|
|
|
|
|
|
|
|
Northeast
|
529
|
|
|
531
|
|
|
1,418
|
|
|
1,496
|
|
Southeast
(a)
|
1,102
|
|
|
1,027
|
|
|
3,901
|
|
|
3,276
|
|
Florida
|
1,093
|
|
|
986
|
|
|
3,441
|
|
|
2,896
|
|
Midwest
|
1,142
|
|
|
977
|
|
|
3,418
|
|
|
2,961
|
|
Texas
|
1,080
|
|
|
1,036
|
|
|
3,726
|
|
|
3,357
|
|
West
|
1,251
|
|
|
1,105
|
|
|
4,047
|
|
|
3,141
|
|
|
6,197
|
|
|
5,662
|
|
|
19,951
|
|
|
17,127
|
|
Average selling
price
|
$
|
391
|
|
|
$
|
353
|
|
|
$
|
373
|
|
|
$
|
338
|
|
|
|
|
|
|
|
|
|
Net new orders -
units
|
|
|
|
|
|
|
|
Northeast
|
306
|
|
|
253
|
|
|
1,361
|
|
|
1,479
|
|
Southeast
(a)
|
804
|
|
|
695
|
|
|
3,810
|
|
|
3,454
|
|
Florida
|
705
|
|
|
697
|
|
|
3,585
|
|
|
3,168
|
|
Midwest
|
766
|
|
|
630
|
|
|
3,636
|
|
|
2,862
|
|
Texas
|
784
|
|
|
621
|
|
|
3,793
|
|
|
3,429
|
|
West
|
837
|
|
|
763
|
|
|
4,141
|
|
|
3,616
|
|
|
4,202
|
|
|
3,659
|
|
|
20,326
|
|
|
18,008
|
|
Net new orders -
dollars (b)
|
$
|
1,666,066
|
|
|
$
|
1,364,821
|
|
|
$
|
7,753,399
|
|
|
$
|
6,305,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2016
|
|
2015
|
Unit
backlog
|
|
|
|
|
|
|
|
Northeast
|
|
|
|
|
387
|
|
|
444
|
|
Southeast
(a)
|
|
|
|
|
1,371
|
|
|
1,146
|
|
Florida
|
|
|
|
|
1,418
|
|
|
1,274
|
|
Midwest
|
|
|
|
|
1,307
|
|
|
1,089
|
|
Texas
|
|
|
|
|
1,412
|
|
|
1,345
|
|
West
|
|
|
|
|
1,527
|
|
|
1,433
|
|
|
|
|
|
|
7,422
|
|
|
6,731
|
|
Dollars in
backlog
|
|
|
|
|
$
|
2,941,512
|
|
|
$
|
2,456,565
|
|
|
|
|
|
|
|
|
|
(a) Southeast
includes the acquisition in January 2016 of substantially all of
the assets of JW Homes ("Wieland").
|
(b) Net new
orders excludes backlog acquired from Wieland in January 2016. 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,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
MORTGAGE
ORIGINATIONS:
|
|
|
|
|
|
|
|
Origination
volume
|
4,250
|
|
|
3,820
|
|
|
13,373
|
|
|
11,435
|
|
Origination
principal
|
$
|
1,225,568
|
|
|
$
|
1,013,140
|
|
|
$
|
3,706,745
|
|
|
$
|
2,929,531
|
|
Capture
rate
|
81.8
|
%
|
|
82.8
|
%
|
|
81.2
|
%
|
|
82.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Interest in
inventory, beginning of period
|
$
|
176,661
|
|
|
$
|
155,781
|
|
|
$
|
149,498
|
|
|
$
|
167,638
|
|
Interest
capitalized
|
44,961
|
|
|
29,896
|
|
|
160,506
|
|
|
120,001
|
|
Interest
expensed
|
(35,525)
|
|
|
(36,179)
|
|
|
(123,907)
|
|
|
(138,141)
|
|
Interest in
inventory, end of period
|
$
|
186,097
|
|
|
$
|
149,498
|
|
|
$
|
186,097
|
|
|
$
|
149,498
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pultegroup-reports-financial-results-for-2016-fourth-quarter-300396850.html
SOURCE PulteGroup, Inc.