EXHIBIT 99.1
| | |
| | | |
| FOR IMMEDIATE RELEASE | | Company Contacts |
| | | Investors: Calvin Boyd |
| | | (248) 433-4527 |
| | | email:calvin.boyd@pulte.com |
| | | |
| | | Media: Mark Marymee |
| | | (248) 433-4648 |
| | | email:mark.marymee@pulte.com |
PULTE HOMES REPORTS SECOND QUARTER 2008 FINANCIAL RESULTS
| • | | For the Second Quarter 2008, Generated 5,133 Net New Orders and Closed 5,438 Homes |
| |
| • | | Backlog at June 30, 2008 of 8,254 Homes, Valued at $2.4 Billion |
| |
| • | | Company Ended Q2 2008 With $1 Billion of Cash, After Pay-off of $313 Million of Debt Related to Recent Tender Offer |
| |
| • | | Impairments and Land-Related Charges of $220.1 Million for the Second Quarter 2008 |
| |
| • | | Q2 2008 Net Loss of $0.63 Per Share, Inclusive of Impairments, Land-Related Charges and a Tax Benefit Related to the Company’s Deferred Income Tax Assets |
| |
| • | | Company Provides Third Quarter 2008 Guidance |
| |
| • | | Company Targets Year-End 2008 Cash Position of $1.7 Billion to $1.9 Billion, After $313 Million Debt Reduction in Q2 2008 |
Bloomfield Hills, MI, July 23, 2008— Pulte Homes (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2008. For the quarter, the Company reported a net loss of $158.4 million, or $0.63 per share, compared with a $507.6 million net loss for the prior year second quarter, or $2.01 per share. The second quarter 2008 net loss included $220.1 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $749.4 million. The second quarter 2008 also included a tax benefit of $56.8 million, primarily due to an adjustment in the Company’s deferred income tax assets. Consolidated revenues for the quarter were $1.6 billion, a decline of 20% from prior year revenues of $2 billion.
“The operating environment for homebuilding continued to deteriorate during the second quarter of 2008,” said Richard J. Dugas, Jr., President and CEO of Pulte Homes. “The downward trend in home prices persisted, and the softness in overall buyer demand remained a challenge for the industry, leading to unsold inventory for both new and existing homes still well above historical levels. Buyer confidence remains under pressure, both from the weakness in housing as well as concerns about the overall economy.
1
“In the face of these challenges,” Mr. Dugas continued, “Pulte continued to make progress against its goals of generating cash from operations, reducing its cost structure and lowering its inventory levels. During the second quarter of 2008, Pulte generated significant positive cash flow, and ended the quarter with a $1 billion cash balance. The Company also paid off $313 million of its senior notes due 2009 during a recent tender offer, and had no debt outstanding under its $1.6 billion revolving credit facility at quarter end. We significantly reduced our overhead expense, and lowered both our level of speculative inventory and number of controlled lots. Pulte intends to be in a position to capitalize on opportunities once stability in the housing sector begins to materialize.”
Second Quarter Results
Revenues from homebuilding settlements in the second quarter decreased 18% to $1.6 billion compared with $1.9 billion in last year’s second quarter. The change in revenue for the quarter reflects an 8% decrease in closings to 5,438 homes, and an 11% decrease in average selling price to $286,000.
Second quarter homebuilding pre-tax loss was $221.3 million, compared with an $803.2 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 second quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $118 million, or 40%, compared with the prior year quarter. During the second quarter of 2008, the Company recorded $220.1 million of impairments and land-related charges, including $153.6 million related to land impairments, $20.1 million associated with the write-off of land deposits and pre-acquisition costs, $44.7 million of impairments of land held for sale and $1.7 million related to the Company’s investment in unconsolidated joint ventures. For the prior year quarter, these impairments and land-related charges totaled $749.4 million.
Net new home orders for the second quarter were 5,133 homes, valued at $1.4 billion, which represent declines of 32% and 42%, respectively, from prior year second quarter results. Pulte Homes’ ending backlog as of June 30, 2008 was valued at $2.4 billion (8,254 homes), compared with a value of $5.2 billion (14,928 homes) at the end of last year’s second quarter. At the end of the second quarter 2008, the Company’s debt-to-capitalization ratio was 48%, and on a net debt-to-capitalization basis was 39%.
The Company’s financial services operations reported pre-tax income of $10.8 million for the second quarter 2008, compared with $6.6 million of pre-tax income for the prior year’s quarter. The increase in second quarter 2008 pre-tax income was partially due to a shift in the mix of mortgage loans closed toward more profitable agency-backed products. This was partially offset by a 26% decline in mortgage loans originated during the quarter compared with the prior year quarter. The mortgage capture rate for the quarter was 92%, compared with 93% for the same quarter last year.
The Company recorded an income tax benefit of $56.8 million for the second quarter 2008, primarily due to an adjustment in the Company’s deferred income tax assets. During the quarter, the deferred income tax assets were increased from $106 million to $170 million to reflect the current estimate of the amount realizable from the carryback of the current year’s net operating loss to the 2006 tax year.
2
Six Month Results
For the six months ended June 30, 2008, Pulte Homes’ net loss was $854.6 million, or $3.37 per share, compared with a $593.2 million, or $2.35 per share, net loss for the prior year period. Consolidated revenues for the period were $3.1 billion, down 21% from $3.9 billion for the first six months of last year.
Revenues from homebuilding settlements for the period were $3 billion, down 20% from the prior year. Lower revenues for the period resulted from an 11% decrease in average selling price to $290,000, combined with a 10% decrease in the number of homes closed to 10,171.
Homebuilding pre-tax loss for the period was $926.5 million, compared with a $951.6 million pre-tax loss for the prior year period. The pre-tax loss for the period reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $197.3 million, or 34%, compared with the prior year period. During the first six months of 2008, the Company recorded $883.7 million of impairments and land-related charges, including $752.3 million related to land impairments, $20.4 million associated with the write-off of land deposits and pre-acquisition costs, $109.3 million of impairments of land held for sale, and $1.7 million related to the Company’s investment in unconsolidated joint ventures. For the prior year period, these impairments and land-related charges totaled $881.5 million.
For the first six months of 2008, the pre-tax income for Pulte’s financial services operations was $25.8 million compared with $19.8 million in the prior year. The positive shift in the mix of mortgage loans toward more profitable agency-backed products was a significant reason for this increase in income.
Third Quarter 2008 Guidance
“For the third quarter of 2008 we are providing guidance in the range from a net loss of $0.15 per share to breakeven from continuing operations, exclusive of a tax benefit and any additional impairments or land-related charges,” said Dugas. “As part of its ongoing balance sheet focus, after reducing its outstanding senior debt by $313 million in the current quarter, Pulte targets a cash position by the end of 2008 of $1.7 billion to $1.9 billion.”
A conference call discussing Pulte Homes’ second quarter results will be held Thursday, July 24, 2008 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 atwww.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
3
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 and Annual Report to Shareholders for the year ended December 31, 2007 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., (NYSE: PHM), based in Bloomfield Hills, Mich., is one of America’s largest home building companies with operations in 50 markets and 26 states. During its 58-year history, the company has delivered more than 500,000 new homes. Since 2000, Pulte Homes operations have earned more top-three finishes than any other homebuilder in the annual J.D. Power and Associates® New Home-Builder Customer Satisfaction Studysm. Under its Del Webb brand, Pulte is the nation’s largest builder of active adult communities for people age 55 and older. Its DiVosta Homes brand is renowned in Florida for its Built Solid™ 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:www.pulte.com; www.delwebb.com; www.divosta.com
4
Pulte Homes, Inc.
Condensed Consolidated Results
Of Operations
(000’s omitted, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | | | | | |
| CONSOLIDATED RESULTS: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Revenues: | | | | | | | | | | | | | | | | |
| Homebuilding | | $ | 1,580,468 | | | $ | 1,993,498 | | | $ | 2,978,577 | | | $ | 3,823,406 | |
| Financial Services | | | 38,945 | | | | 27,362 | | | | 82,433 | | | | 66,943 | |
| Other non-operating | | | 6,352 | | | | 386 | | | | 13,574 | | | | 2,330 | |
| | | | | | | | | | | | | |
| Total Revenues | | $ | 1,625,765 | | | $ | 2,021,246 | | | $ | 3,074,584 | | | $ | 3,892,679 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Pre-tax income (loss): | | | | | | | | | | | | | | | | |
| Homebuilding | | $ | (221,321 | ) | | $ | (803,191 | ) | | $ | (926,451 | ) | | $ | (951,577 | ) |
| Financial Services | | | 10,802 | | | | 6,568 | | | | 25,846 | | | | 19,763 | |
| Other non-operating | | | (4,708 | ) | | | (9,986 | ) | | | (7,678 | ) | | | (17,343 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | (215,227 | ) | | | (806,609 | ) | | | (908,283 | ) | | | (949,157 | ) |
| | | | | | | | | | | | | | | | | |
| Income taxes (benefit) | | | (56,810 | ) | | | (299,058 | ) | | | (53,722 | ) | | | (355,934 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (158,417 | ) | | $ | (507,551 | ) | | $ | (854,561 | ) | | $ | (593,223 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE - ASSUMING DILUTION: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (0.63 | ) | | $ | (2.01 | ) | | $ | (3.37 | ) | | $ | (2.35 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Shares used in per share calculations | | | 253,454 | | | | 252,093 | | | | 253,310 | | | | 252,006 | |
| | | | | | | | | | | | | |
5
Pulte Homes, Inc.
Condensed Consolidated Balance Sheets
($000’s omitted)
| | | | | | | | | |
| | | June 30, | | | December 31, | |
| | | 2008 | | | 2007 | |
| | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | |
| ASSETS | | | | | | | | |
| Cash and equivalents | | $ | 988,345 | | | $ | 1,060,311 | |
| Unfunded settlements | | | 31,749 | | | | 38,714 | |
| House and land inventory | | | 5,726,498 | | | | 7,027,511 | |
| Land held for sale | | | 316,360 | | | | 252,563 | |
| Land, not owned, under option agreements | | | 17,560 | | | | 20,838 | |
| Residential mortgage loans available-for-sale | | | 296,736 | | | | 447,089 | |
| Investments in unconsolidated entities | | | 140,983 | | | | 105,479 | |
| Goodwill | | | 5,654 | | | | 5,654 | |
| Intangible assets, net | | | 106,629 | | | | 110,704 | |
| Other assets | | | 779,084 | | | | 1,050,934 | |
| Deferred income tax assets | | | 169,566 | | | | 105,906 | |
| | | | | | | |
| | | | | | | | | |
| | | $ | 8,579,164 | | | $ | 10,225,703 | |
| | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Liabilities: | | | | | | | | |
| Accounts payable, accrued and other liabilities | | $ | 1,569,950 | | | $ | 1,859,911 | |
| Collateralized short-term debt, recourse solely to applicable subsidiary assets | | | 261,505 | | | | 440,611 | |
| Income taxes | | | 112,399 | | | | 126,758 | |
| Senior notes | | | 3,165,691 | | | | 3,478,230 | |
| | | | | | | |
| | | | | | | | | |
| Total Liabilities | | | 5,109,545 | | | | 5,905,510 | |
| | | | | | | | | |
| Shareholders’ Equity | | | 3,469,619 | | | | 4,320,193 | |
| | | | | | | |
| | | | | | | | | |
| | | $ | 8,579,164 | | | $ | 10,225,703 | |
| | | | | | | |
6
Pulte Homes, Inc.
Segment Data
($000’s omitted)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| HOMEBUILDING: | | | | | | | | | | | | | | | | |
| Home sales (settlements) | | $ | 1,555,137 | | | $ | 1,901,825 | | | $ | 2,951,568 | | | $ | 3,691,107 | |
| Land sales | | | 25,331 | | | | 91,673 | | | | 27,009 | | | | 132,299 | |
| | | | | | | | | | | | | |
| Homebuilding Revenues | | $ | 1,580,468 | | | $ | 1,993,498 | | | $ | 2,978,577 | | | $ | 3,823,406 | |
| | | | | | | | | | | | | | | | | |
| Home cost of sales | | | (1,537,269 | ) | | | (2,254,881 | ) | | | (3,382,323 | ) | | | (3,849,352 | ) |
| Land cost of sales | | | (68,121 | ) | | | (118,618 | ) | | | (133,069 | ) | | | (174,980 | ) |
| Selling, general & administrative expense | | | (177,643 | ) | | | (295,213 | ) | | | (379,580 | ) | | | (576,866 | ) |
| Other income (expense), net | | | (18,756 | ) | | | (127,977 | ) | | | (10,056 | ) | | | (173,785 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Pre-tax income (loss) | | $ | (221,321 | ) | | $ | (803,191 | ) | | $ | (926,451 | ) | | $ | (951,577 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| FINANCIAL SERVICES: | | | | | | | | | | | | | | | | |
| Pre-tax income | | $ | 10,802 | | | $ | 6,568 | | | $ | 25,846 | | | $ | 19,763 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| OTHER NON-OPERATING: | | | | | | | | | | | | | | | | |
| Pre-tax loss: | | | | | | | | | | | | | | | | |
| Net interest income (expense) | | $ | 5,644 | | | $ | (552 | ) | | $ | 12,118 | | | $ | 402 | |
| Other expense, net | | | (10,352 | ) | | | (9,434 | ) | | | (19,796 | ) | | | (17,745 | ) |
| | | | | | | | | | | | | |
| Total other non-operating | | $ | (4,708 | ) | | $ | (9,986 | ) | | $ | (7,678 | ) | | $ | (17,343 | ) |
| | | | | | | | | | | | | |
7
Pulte Homes, Inc.
Business Operating Data
($000’s omitted)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Homebuilding settlement revenues | | $ | 1,555,137 | | | $ | 1,901,825 | | | $ | 2,951,568 | | | $ | 3,691,107 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Unit settlements: | | | | | | | | | | | | | | | | |
| Northeast | | | 543 | | | | 533 | | | | 936 | | | | 904 | |
| Southeast | | | 881 | | | | 1,024 | | | | 1,629 | | | | 1,779 | |
| Florida | | | 828 | | | | 859 | | | | 1,569 | | | | 1,886 | |
| Midwest | | | 615 | | | | 762 | | | | 1,238 | | | | 1,405 | |
| Central | | | 602 | | | | 597 | | | | 1,153 | | | | 1,296 | |
| Southwest | | | 1,423 | | | | 1,502 | | | | 2,620 | | | | 2,835 | |
| California | | | 546 | | | | 661 | | | | 1,026 | | | | 1,253 | |
| | | | | | | | | | | | | |
| | | | 5,438 | | | | 5,938 | | | | 10,171 | | | | 11,358 | |
| | | | | | | | | | | | | |
| Average selling price | | $ | 286 | | | $ | 320 | | | $ | 290 | | | $ | 325 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Unit net new orders: | | | | | | | | | | | | | | | | |
| Northeast | | | 533 | | | | 856 | | | | 1,035 | | | | 1,560 | |
| Southeast | | | 746 | | | | 1,018 | | | | 1,570 | | | | 2,024 | |
| Florida | | | 866 | | | | 1,074 | | | | 1,859 | | | | 2,596 | |
| Midwest | | | 700 | | | | 1,138 | | | | 1,279 | | | | 2,158 | |
| Central | | | 412 | | | | 731 | | | | 942 | | | | 1,355 | |
| Southwest | | | 1,420 | | | | 1,940 | | | | 2,887 | | | | 4,407 | |
| California | | | 456 | | | | 775 | | | | 963 | | | | 1,931 | |
| | | | | | | | | | | | | |
| | | | 5,133 | | | | 7,532 | | | | 10,535 | | | | 16,031 | |
| | | | | | | | | | | | | |
| Net new orders — dollars* | | $ | 1,413,000 | | | $ | 2,427,000 | | | $ | 2,874,000 | | | $ | 5,339,000 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Unit backlog: | | | | | | | | | | | | | | | | |
| Northeast | | | | | | | | | | | 890 | | | | 1,573 | |
| Southeast | | | | | | | | | | | 1,222 | | | | 1,953 | |
| Florida | | | | | | | | | | | 1,542 | | | | 1,922 | |
| Midwest | | | | | | | | | | | 869 | | | | 2,150 | |
| Central | | | | | | | | | | | 659 | | | | 1,181 | |
| Southwest | | | | | | | | | | | 2,277 | | | | 4,291 | |
| California | | | | | | | | | | | 795 | | | | 1,858 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | 8,254 | | | | 14,928 | |
| | | | | | | | | | | | | | | |
| Dollars in backlog | | | | | | | | | | $ | 2,432,000 | | | $ | 5,227,000 | |
| | | | | | | | | | | | | | | |
| | |
| * | | Net new order dollars represent a composite of new order dollars combined with other movement of the dollars in backlog related to cancellations and change orders. |
8
Pulte Homes, Inc.
Business Operating Data, continued
($000’s omitted)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| MORTGAGE ORIGINATIONS: | | | | | | | | | | | | | | | | |
| Origination volume | | | 3,931 | | | | 5,300 | | | | 7,445 | | | | 10,458 | |
| | | | | | | | | | | | | |
| Origination principal | | $ | 877,300 | | | $ | 1,176,700 | | | $ | 1,680,700 | | | $ | 2,319,700 | |
| | | | | | | | | | | | | |
| Capture rate percentage | | | 92.3 | % | | | 92.6 | % | | | 91.2 | % | | | 92.8 | % |
| | | | | | | | | | | | | |
Pulte Homes, Inc.
Supplemental Information
($000’s omitted)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Interest expense: | | | | | | | | | | | | | | | | |
| Homebuilding (included in home cost of sales) | | $ | 38,632 | | | $ | 96,422 | | | $ | 97,124 | | | $ | 144,380 | |
| Financial Services | | | 1,555 | | | | 3,616 | | | | 3,425 | | | | 8,234 | |
| Other non-operating | | | 708 | | | | 938 | | | | 1,456 | | | | 1,928 | |
| | | | | | | | | | | | | |
| Total interest expense | | $ | 40,895 | | | $ | 100,976 | | | $ | 102,005 | | | $ | 154,542 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Depreciation & amortization | | $ | 19,113 | | | $ | 21,613 | | | $ | 38,828 | | | $ | 43,273 | |
| | | | | | | | | | | | | |
9
