BLOOMFIELD HILLS, Mich., Jan. 31 /PRNewswire-FirstCall/ -- Pulte Homes announced today financial results for its fourth quarter and year ended December 31, 2006. For the quarter, the Company reported a loss from continuing operations of $8.3 million, or $0.03 per diluted share, compared with $532 million of income from continuing operations for the prior year fourth quarter, or $2.03 per diluted share. Consolidated revenues for the quarter were $4.4 billion, a decline of 14% from prior year revenues of $5.1 billion.
For the full year 2006, Pulte Homes reported consolidated revenues of $14.3 billion, a decrease of 3% from the prior year. Full year earnings from continuing operations were $2.67 per diluted share, compared with $5.47 in the prior year.
"Pulte made meaningful progress during the fourth quarter by improving our house and land inventory positions, adjusting our SG&A levels and positioning ourselves for success in the future," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "In addition, we witnessed some promising signs of stabilization at the conclusion of the quarter, and into the first month of 2007, although it's too early to tell how strong and sustainable this may prove to be in the months ahead. The cancellation rate, which declined to 34.7% in the fourth quarter from 35.8% in the third quarter, continued to improve into January 2007. Going forward, Pulte will maintain its keen focus on balance sheet improvement, while working diligently to build pre-sold inventory as the selling season unfolds."
Fourth Quarter Results
Revenues from homebuilding settlements in the fourth quarter decreased 15% to $4.3 billion, compared with $5.0 billion last year. The change in revenue for the quarter reflects a 6% increase in average selling price to $341,000, offset by a 20% decrease in closings to 12,566 homes. The increase in average selling price primarily reflects geographic changes in the mix of homes closed during the period.
Fourth quarter homebuilding pretax loss was approximately $34 million, compared with prior year pretax income of $820.5 million. Pretax loss for the period reflects a decline in gross margins to 11.0% from 22.3%, combined with an increase in SG&A as a percentage of home sale revenues to 7.2% compared with 6.2%. Homebuilding pretax income for the fourth quarter of 2006 is inclusive of approximately $350 million, or $0.88 per diluted share, of charges resulting from adjustments to land inventory and land held for sale, including the Company's investment in unconsolidated joint ventures, and the write-off of deposits and pre-acquisition costs associated with land transactions the Company no longer plans to pursue.
Net new home orders for the fourth quarter were 6,446 homes, valued at $2.1 billion, which represent declines of 34% and 38%, respectively, from prior year fourth-quarter results. Pulte Homes' backlog as of December 31, 2006, was valued at $3.6 billion (10,255 homes), compared with a value of $6.3 billion (17,817 homes) last year. At the end of the quarter, the Company's debt-to-capitalization ratio was 35.0%, and its net debt-to- capitalization ratio was 31.2%.
The Company's financial services operations reported a 14% increase in fourth quarter pretax income to $29.7 million, as the business benefited from a positive mix of mortgage products and a more favorable interest rate environment. Mortgage capture rate for the quarter was 93.3%, compared with 90.6% for the same quarter last year.
Full Year Results
For the year ended December 31, 2006, Pulte Homes' income from continuing operations was $689.6 million, compared with prior year income from continuing operations of $1.4 billion. Earnings from continuing operations for 2006 were $2.67 per diluted share, a decrease of 51% from prior year earnings of $5.47 per diluted share. Consolidated revenues for 2006 were $14.3 billion, down by 3% from $14.7 billion in 2005.
Revenues from homebuilding settlements for 2006 were $14 billion, a decrease of 3% from the prior year. The decline was primarily attributable to a 9% decrease in the number of homes closed to 41,487, partially offset by a 7% increase in the average selling price to $337,000. The increase in average selling price for the period reflects a combination of changes in product mix and geographic mix of homes closed during the period.
Homebuilding pretax income for 2006 was approximately $1 billion, compared with prior year pretax income of $2.3 billion. Pretax margins as a percentage of home settlement revenues for 2006 decreased 880 basis points to 7.2%, reflecting a 600-basis point decline in gross margins from home sales, and lower profitability on land sales. Homebuilding pretax income for 2006 is inclusive of approximately $505 million, or $1.24 per diluted share, of charges resulting from adjustments to land inventory and land held for sale, including the Company's investment in unconsolidated joint ventures, and the write-off of deposits and pre-acquisition costs associated with land transactions the Company no longer plans to pursue.
For 2006, Pulte's financial services operations reported pretax income of $115.5 million, compared with $70.6 million in the prior year. In addition, 2006 results reflect a first-quarter gain of approximately $31.6 million from the sale by Pulte Mortgage LLC of its investment in a Mexico-based mortgage- banking company.
First Quarter 2007 Guidance
"Our earnings visibility going forward remains limited due to rapidly changing market conditions and uncertainty regarding possible future land- related charges," said Dugas. "For the first quarter of 2007, we are providing earnings guidance in the range from break-even to a loss of $.10 per diluted share, exclusive of any additional land-related charges. Given this fluid environment, we are not in a position at this time to provide full-year guidance for 2007."
A conference call discussing Pulte Homes' fourth quarter and full year 2006 results will be held Thursday, February 1, 2007 at 8:30 a.m. Eastern Time, and web cast live via Pulte.com. Interested investors can access the call via the Company's home page at http://www.pulte.com/.
Certain statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of insurance covering risks associated with the Company's business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which the Company has little or no control. See the Company's Annual Report on Form 10-K/A and Annual Report to Shareholders for the year ended December 31, 2005 and other public filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to Pulte's business. Pulte undertakes no duty to update any forward-looking statement whether as a result of new information, future events or changes in Pulte's expectations.
About Pulte Homes
Pulte Homes, Inc., , based in Bloomfield Hills, Mich., is a FORTUNE 150 company with operations in 52 markets and 27 states. In 2006, it delivered 41,487 homes and generated consolidated revenues of $14.3 billion. During its 57-year history, the company has constructed nearly 500,000 homes. In 2006, Pulte Homes received the most awards in the J.D. Power and Associates(R) New Home-Builder Customer Satisfaction Study(SM), marking the seventh-straight year Pulte achieved this distinction. Under its Del Webb brand, Pulte is the nation's largest builder of active adult communities for people age 55 and better. Its DiVosta brand is renowned in Florida for its Built Solid(TM) building system and distinctive master-planned communities. Pulte Mortgage LLC is a nationwide lender offering Pulte customers a wide variety of loan products and superior service.
Websites: http://www.pulte.com/; http://www.delwebb.com/; http://www.divosta.com/
Pulte Homes, Inc.
Condensed Consolidated Results
Of Operations
(000's omitted, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ------------------------
2006 2005 2006 2005
--------- --------- ---------- ----------
CONSOLIDATED RESULTS:
Revenues:
Homebuilding $4,328,665 $5,077,843 $14,075,248 $14,528,236
Financial Services 59,663 52,497 194,596 161,414
Other non-operating 578 1,260 4,564 4,885
--------- --------- ---------- ----------
Total Revenues $4,388,906 $5,131,600 $14,274,408 $14,694,535
========= ========= ========== ==========
Pretax income (loss):
Homebuilding $(34,094) $820,459 $1,010,368 $2,298,822
Financial Services 29,683 25,933 115,460 70,586
Other non-operating (13,644) (15,799) (43,100) (92,394)
--------- --------- ---------- ----------
Income (loss) from
continuing operations
before income taxes (18,055) 830,593 1,082,728 2,277,014
Income taxes (benefit) (9,754) 298,856 393,082 840,126
--------- --------- ---------- ----------
Income (loss) from
continuing operations (8,301) 531,737 689,646 1,436,888
Income(loss) from
discontinued operations (111) 42,802 (2,175) 55,025
--------- --------- ---------- ----------
Net income (loss) ($8,412) $574,539 $687,471 $1,491,913
========= ========= ========== ==========
EARNINGS PER SHARE -
ASSUMING DILUTION:
Income (loss) from
continuing operations ($.03) $2.03 $2.67 $5.47
Income (loss) from
discontinued operations - .16 (.01) .21
--------- --------- ---------- ----------
Net income (loss) ($.03) $2.19 $2.66 $5.68
========= ========= ========== ==========
Shares used in per
share calculations 257,606 262,443 258,621 262,801
========= ========= ========== ==========
Pulte Homes, Inc.
Condensed Consolidated Balance Sheets
($000's omitted)
December 31, December 31,
2006 2005
(Unaudited)
--------------- --------------
ASSETS
Cash and equivalents $551,292 $1,002,268
Unfunded settlements 72,597 156,663
House and land inventory 9,374,335 8,756,093
Land held for sale 465,823 257,724
Land, not owned, under
option agreements 43,609 76,671
Residential mortgage loans
available-for-sale 871,350 1,038,506
Investments in
unconsolidated entities 150,685 301,613
Goodwill 375,677 307,693
Intangible assets, net 118,954 127,204
Other assets 982,034 1,023,739
Deferred income tax asset 170,518 12,686
--------------- --------------
$13,176,874 $13,060,860
=============== ==============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable, accrued
and other liabilities $2,180,592 $2,584,060
Collateralized short-term
debt, recourse solely to
applicable subsidiary assets 814,707 893,001
Income taxes 66,267 239,930
Senior notes and
subordinated notes 3,537,947 3,386,527
--------------- --------------
Total Liabilities 6,599,513 7,103,518
Shareholders' Equity 6,577,361 5,957,342
--------------- --------------
$13,176,874 $13,060,860
=============== ==============
Pulte Homes, Inc.
Segment Data
($000's omitted)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ------------------------
2006 2005 2006 2005
--------- --------- ----------- ----------
HOMEBUILDING:
Home sales
(settlements) $4,283,094 $5,027,123 $13,975,387 $14,370,667
Land sales 45,571 50,720 99,861 157,569
--------- --------- ----------- ----------
Homebuilding
Revenue 4,328,665 5,077,843 14,075,248 14,528,236
Home cost of sales (3,810,916) (3,903,857) (11,544,905) (11,005,591)
Land cost of sales (66,215) (41,387) (138,528) (139,377)
Selling, general &
administrative
expense (306,651) (313,900) (1,136,027) (1,107,816)
Other income
(expense), net (178,977) 1,760 (245,420) 23,370
--------- --------- ----------- ----------
Pretax income (loss) $(34,094) $820,459 $1,010,368 $2,298,822
========= ========= =========== ==========
FINANCIAL SERVICES:
Pretax income $29,683 $25,933 $115,460 $70,586
========= ========= =========== ==========
OTHER NON-OPERATING:
Pretax loss:
Net interest
expense $(1,852) $(2,481) $(531) $(43,344)
Other expense,
net (11,792) (13,318) (42,569) (49,050)
--------- --------- ----------- ----------
Total Other
Non-operating $(13,644) $(15,799) $(43,100) $(92,394)
========= ========= ========== ==========
Pulte Homes, Inc.
Business Operating Data
($000's omitted)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- -------------------------
2006 2005 2006 2005
---------- ---------- ----------- -----------
Homebuilding
Settlement Revenues $4,283,094 $5,027,123 $13,975,387 $14,370,667
========== ========== =========== ===========
Unit settlements:
Northeast 1,054 1,500 3,489 3,909
Southeast 1,476 1,335 4,504 4,127
Florida 1,984 2,866 7,374 8,784
Midwest 1,269 2,304 4,171 5,879
Central 1,591 2,499 6,192 6,424
Southwest 3,561 3,085 10,548 10,237
California 1,631 2,081 5,209 6,270
---------- ---------- ----------- -----------
12,566 15,670 41,487 45,630
========== ========== =========== ===========
Average selling
price $341 $321 $337 $315
========== ========== =========== ===========
Unit net new orders:
Northeast 623 697 2,813 4,019
Southeast 715 976 4,632 4,888
Florida 769 1,577 4,501 8,383
Midwest 749 1,240 4,087 5,928
Central 895 1,801 5,437 7,549
Southwest 1,755 2,447 8,365 10,723
California 940 1,083 4,090 6,041
---------- ---------- ----------- -----------
6,446 9,821 33,925 47,531
========== ========== =========== ===========
Net new orders -
dollars: $2,053,000 $3,285,000 $11,253,000 $15,518,000
========== ========== =========== ===========
Unit backlog:
Northeast 917 1,593
Southeast 1,708 1,580
Florida 1,212 4,085
Midwest 1,199 1,283
Central 1,320 2,075
Southwest 2,719 4,902
California 1,180 2,299
---------- ----------
10,255 17,817
=========== ==========
Dollars in backlog $3,580,000 $6,301,000
=========== ==========
Pulte Homes, Inc.
Business Operating Data, continued
($000's omitted)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ---------------------
2006 2005 2006 2005
---------- ---------- --------- ---------
MORTGAGE ORIGINATIONS:
Origination volume 12,628 14,972 40,269 42,994
======== ======== ========= =========
Origination principal $2,762,100 $3,046,900 $8,683,500 $8,528,600
======== ======== ========= =========
Capture rate
percentage 93.3 % 90.6 % 91.4 % 89.2 %
======== ======== ========= =========
Pulte Homes, Inc.
Supplemental Information
($000's omitted)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ---------------------
2006 2005 2006 2005
---------- ---------- --------- ---------
Interest expense:
Homebuilding (included
in home cost of sales) $93,403 $58,506 $255,688 $179,584
Financial Services 6,923 5,768 23,721 16,004
Other non-operating 2,430 3,741 5,095 48,229
-------- -------- --------- ---------
Total interest expense $102,756 $68,015 $284,504 $243,817
======== ======== ========= =========
Depreciation & amortization $25,166 $16,702 $83,675 $61,512
======== ======== ========= =========
Company Contacts
Investors: Calvin Boyd
(248) 433-4527
email: