PulteGroup (PHM) 8-K Pultegroup, Inc. Reports First Quarter 2012 Financial Results

FOR IMMEDIATE RELEASE	Company Contact
	Investors: Jim Zeumer
	(248) 433-4502
	Email: jim.zeumer@pultegroup.com

PULTEGROUP, INC. REPORTS FIRST QUARTER 2012 FINANCIAL RESULTS

• Net Loss of $0.03 Per Share Compared with Prior Year Net Loss of $0.10 Per Share; Company Remains on Track for Full Year Profitability

• Home Sale Revenues Increased 4% to $814 Million Driven by 5% Increase in Average Selling Price

• Adjusted Gross Margin Increased 180 Basis Points to 18.7%

• SG&A Reduced by 13% to $123 Million; Falls 300 Basis Points to 15.2% of Home Sale Revenues

• 15% Increase in Signups to 4,991 Homes Generated from 6% Fewer Communities

• Unit Backlog Up 12% to 5,798 Homes With a Value of $1.6 Billion

• Quarter Ending Cash Balance of $1.3 Billion Up $117 Million From Year End 2011

Bloomfield Hills, Mich., April 26, 2012 - PulteGroup, Inc. (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2012. For the quarter, the Company reported a net loss of $12 million, or $0.03 per share. Reported net loss includes $6 million of land related charges which were offset by $6 million of land-sale gains. In the prior year the Company reported a net loss of $40 million, or $0.10 per share. Land-related charges and land sale gains were immaterial in the prior year period.

“PulteGroup's first quarter financial results demonstrate further success in our efforts to reposition the business and drive better long term financial returns,” said Richard J. Dugas, Jr., PulteGroup Chairman, President and CEO. “For the quarter, improved gross margins and excellent control of overhead costs within our operations, along with better results from our financial services operations, helped to drive a $32 million increase in pretax operating results. Our first quarter results reflect the benefit of initiatives launched in 2011 which are expected to deliver additional gains as we move through the remainder of 2012 and beyond.”

“While overall industry volumes remain well below normal levels, our first quarter sales and traffic patterns suggest a positive shift in buyer sentiment during the period. The 15% increase in our reported signups reflects broad based gains as we experienced improved signups from all of our brands and across the vast majority of our markets. We are only one quarter into the year, but the start has exceeded our internal estimates and has us cautiously optimistic that housing demand may have reached a positive inflection point.”

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Home sale revenues in the first quarter increased 4% to $814 million, compared with $782 million in the prior year. Higher revenue for the quarter reflects a 5%, or $12,000, increase in average selling price to $261,000, partially offset by a 1% decrease in closings to 3,117 homes. The increase in average selling price primarily reflects an ongoing shift in the mix of closings towards move-up homes which carry a higher selling price.

First quarter cost of sales related to home sales was $712 million, compared with prior year costs of $685 million. Cost of sales for the current quarter included $5 million of impairments, compared with none in the prior year. Excluding impairments and capitalized interest expense, adjusted gross margin for the quarter would have been 18.7%, compared with 16.9% in the comparable prior year period. The 180 basis point improvement in adjusted gross margin primarily reflects ongoing shifts in the mix of houses closed to include a greater percentage of move-up homes and an increase in closings from recently opened communities.

The Company's selling, general and administrative (SG&A) expense for the quarter was $123 million, a decrease of 13% from $142 million in the comparable period last year. As a percent of homebuilding revenue, SG&A for the quarter fell 300 basis points to 15.2%.

For the quarter, the Company reported a 15% increase in net signups of 4,991 homes which were generated from 6% fewer communities. Prior year net signups were 4,345 homes. The cancellation rate in the first quarter was 15%, down from 16% in the prior year.

The Company's contract backlog as of March 31, 2012, was 5,798 homes, with a value of $1.6 billion, compared to a prior year contract backlog of 5,188 homes, valued at $1.4 billion.

The Company's financial services operations reported pretax income of $7 million for the quarter, compared with prior year income of $1 million. Loan originations for the first quarter were 2,021 compared with prior year originations of 1,865. Mortgage capture rate for the quarter was 78%, compared with 76% for the same quarter last year.

The Company's quarter-end cash balance of $1.3 billion represents an increase of $117 million over 2011 year end.

A conference call discussing PulteGroup's first quarter results is scheduled for Thursday, April 26, 2012, at 8:30 a.m. Eastern Time. Interested investors can access the live webcast via PulteGroup's corporate website at www.pultegroupinc.com.

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.

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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 continuing adverse conditions in 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, 2011, 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 60 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes and Del Webb, 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 home buyers with innovative solutions and new homes designed for the way people actually live today. As the most awarded homebuilder in customer satisfaction, PulteGroup brands have consistently ranked among top homebuilders in third-party customer satisfaction studies.

For more information about PulteGroup, Inc. and PulteGroup brands, go to: www.pultegroupinc.com; www.pulte.com; www.centex.com; www.delwebb.com

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PulteGroup, Inc. Consolidated Results of Operations ($000's omitted, except per share data) (Unaudited)
	Three Months Ended
	March 31,
	2012			2011
Revenues:
Homebuilding
Home sale revenues	$	813,786		$	782,471
Land sale revenues	38,398			1,296
	852,184			783,767
Financial Services	28,852			21,435
Total revenues	881,036			805,202
Homebuilding Cost of Revenues:
Home sale cost of revenues	712,166			685,030
Land sale cost of revenues	33,397			930
	745,563			685,960
Financial Services expenses	22,009			20,473
Selling, general, and administrative expenses	123,314			142,446
Other expense (income), net	6,619			3,910
Interest income	(1,199		)	(1,437		)
Interest expense	217			351
Equity in (earnings) loss of unconsolidated entities	(1,996		)	(1,109		)
Income (loss) before income taxes	(13,491		)	(45,392		)
Income tax expense (benefit)	(1,825		)	(5,866		)
Net income (loss)	$	(11,666	)	$	(39,526	)
Net income (loss) per share:
Basic	$	(0.03	)	$	(0.10	)
Diluted	$	(0.03	)	$	(0.10	)
Number of shares used in calculation:
Basic	380,502			379,544
Diluted	380,502			379,544

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PulteGroup, Inc. Condensed Consolidated Balance Sheets ($000's omitted) (Unaudited)
	March 31, 2012		December 31, 2011
ASSETS
Cash and equivalents	$	1,211,735	$	1,083,071
Restricted cash	89,869		101,860
House and land inventory	4,584,416		4,636,468
Land held for sale	136,232		135,307
Land, not owned, under option agreements	26,121		24,905
Residential mortgage loans available-for-sale	184,164		258,075
Investments in unconsolidated entities	34,146		35,988
Income taxes receivable	29,673		27,154
Other assets	404,014		420,444
Intangible assets, net	159,073		162,348
	$	6,859,443	$	6,885,620
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable	$	170,609	$	196,447
Customer deposits	71,580		46,960
Accrued and other liabilities	1,382,330		1,411,941
Income tax liabilities	215,150		203,313
Senior notes	3,090,946		3,088,344
Total liabilities	4,930,615		4,947,005
Shareholders' equity	1,928,828		1,938,615
	$	6,859,443	$	6,885,620

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PulteGroup, Inc. Consolidating Statements of Cash Flows ($000's omitted) (Unaudited)
	Three Months Ended
	March 31,
	2012			2011
Cash flows from operating activities:
Net income (loss)	$	(11,666	)	$	(39,526	)
Adjustments to reconcile net income (loss) to net cash flows      provided by (used in) operating activities:
Write-down of land and deposits and pre-acquisition costs	5,896			726
Depreciation and amortization	7,393			8,970
Stock-based compensation expense	3,719			5,510
Equity in (earnings) loss of unconsolidated entities	(1,996		)	(1,109		)
Distributions of earnings from unconsolidated entities	3,518			411
Other, net	103			781
Increase (decrease) in cash due to:
Restricted cash	53			864
Inventories	45,969			(10,315		)
Residential mortgage loans available-for-sale	74,073			32,292
Other assets	10,257			79,383
Accounts payable, accrued and other liabilities	(34,466		)	(122,825		)
Income tax liabilities	11,837			(4,803		)
Net cash provided by (used in) operating activities	114,690			(49,641		)
Cash flows from investing activities:
Distributions from unconsolidated entities	—			1,021
Investments in unconsolidated entities	(49		)	(1,968		)
Net change in loans held for investment	293			255
Change in restricted cash related to letters of credit	11,938			(109,667		)
Proceeds from the sale of fixed assets	4,475			2,441
Capital expenditures	(3,758		)	(6,128		)
Net cash provided by (used in) investing activities	12,899			(114,046		)
Cash flows from financing activities:
Net borrowings (repayments) of other borrowings	1,920			(13,312		)
Stock repurchases	(845		)	(969		)
Net cash provided by (used in) financing activities	1,075			(14,281		)
Net increase (decrease) in cash and equivalents	128,664			(177,968		)
Cash and equivalents at beginning of period	1,083,071			1,483,390
Cash and equivalents at end of period	$	1,211,735		$	1,305,422
Supplemental Cash Flow Information:
Interest paid (capitalized), net	$	(22,808	)	$	(23,833	)
Income taxes paid (refunded), net	$	(11,142	)	$	(2,922	)

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PulteGroup, Inc. Segment Data ($000's omitted) (Unaudited)
	Three Months Ended
	March 31,
	2012			2011
HOMEBUILDING:
Home sale revenues	$	813,786		$	782,471
Land sale revenues	38,398			1,296
Total Homebuilding revenues	852,184			783,767
Home sale cost of revenues	712,166			685,030
Land sale cost of revenues	33,397			930
Selling, general, and administrative expenses	123,314			142,446
Equity in (earnings) loss of unconsolidated entities	(1,978		)	(1,098		)
Other expense (income), net	6,619			3,910
Interest income, net	(982		)	(1,086		)
Income (loss) before income taxes	$	(20,352	)	$	(46,365	)
FINANCIAL SERVICES:
Income (loss) before income taxes	$	6,861		$	973
CONSOLIDATED:
Income (loss) before income taxes	$	(13,491	)	$	(45,392	)

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PulteGroup, Inc. Segment data, continued ($000's omitted) (Unaudited)
	Three Months Ended
	March 31,
	2012		2011
Home sale revenues	$	813,786	$	782,471
Closings - units
Northeast	352		348
Southeast	535		589
Florida	476		492
Texas	699		695
North	531		494
Southwest	524		523
	3,117		3,141
Average selling price	$	261	$	249
Net new orders - units
Northeast	553		482
Southeast	774		748
Florida	768		736
Texas	1,109		1,048
North	869		658
Southwest	918		673
	4,991		4,345
Net new orders - dollars (a)	$	1,339,977	$	1,093,634
	March 31,
	2012		2011
Unit backlog
Northeast	626		690
Southeast	841		890
Florida	950		839
Texas	1,235		1,227
North	1,047		817
Southwest	1,099		725
	5,798		5,188
Dollars in backlog	$	1,585,840	$	1,367,725

(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.

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PulteGroup, Inc. Segment Data, continued ($000's omitted) (Unaudited)
	Three Months Ended
	March 31,
	2012			2011
MORTGAGE ORIGINATIONS:
Origination volume	2,021			1,865
Origination principal	$	429,465		$	377,972
Capture rate	78.3		%	76.5		%

Supplemental Data ($000's omitted) (Unaudited)
	Three Months Ended
	March 31,
	2012			2011
Interest in inventory, beginning of period	$	355,068		$	323,379
Interest capitalized	51,323			56,191
Interest expensed	(47,186		)	(34,816		)
Interest in inventory, end of period	$	359,205		$	344,754
Interest incurred	$	51,323		$	56,191

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PulteGroup, Inc.

Reconciliation of Non-GAAP Financial Measures

This report contains information about our home sale gross margins reflecting certain adjustments. This measure is considered a non-GAAP financial measure under the SEC's rules and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measure as a measure of our operating performance. Management and our local divisions use this measure in evaluating the operating performance of each community and in making strategic decisions regarding sales pricing, construction and development pace, product mix, and other daily operating decisions. We believe it is a relevant and useful measure to investors for evaluating our performance through gross profit generated on homes delivered during a given period and for comparing our operating performance to other companies in the homebuilding industry. Although other companies in the homebuilding industry report similar information, the methods used may differ. We urge investors to understand the methods used by other companies in the homebuilding industry to calculate gross margins and any adjustments thereto before comparing our measure to that of such other companies.

The following table sets forth a reconciliation of this non-GAAP financial measure to the GAAP financial measure that management believes to be most directly comparable ($000's omitted):

Home Sale Gross Margin
	Three Months Ended
	March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011			March 31, 2011
Home sale revenues	$	813,786		$	1,167,141		$	1,101,368		$	899,763		$	782,471
Home sale cost of revenues	712,166			(1,021,873		)	(947,817		)	(789,678		)	(685,030		)
Home sale gross margin	101,620			145,268			153,551			110,085			97,441
Add:
Impairments (a)	3,700			7,885			526			2,046			41
Capitalized interestamortization (a)	47,186			63,979			48,693			41,894			34,816
Adjusted home sale gross margin	$	152,506		$	217,132		$	202,770		$	154,025		$	132,298
Home sale gross margin as a    percentage of home sale revenues	12.5		%	12.4		%	13.9		%	12.2		%	12.5		%
Adjusted home sale gross margin as a    percentage of home sale revenues	18.7		%	18.6		%	18.4		%	17.1		%	16.9		%

(a) Write-offs of capitalized interest related to impairments are reflected in capitalized interest amortization.

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