EXHIBIT 99.1
[PULTE HOMES LETTERHEAD]
FOR IMMEDIATE RELEASE
PULTE HOMES ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
- - COMPANY RAISES GUIDANCE RANGE FOR 2002 EARNINGS TO $7.05 TO $7.15 PER SHARE
- - COMPANY OFFERS INITIAL EARNINGS GUIDANCE FOR 2003 OF $7.85 TO $8.25 PER
SHARE
- - THIRD QUARTER NET INCOME FROM CONTINUING OPERATIONS INCREASES 37% TO $114
MILLION, OR $1.83 PER SHARE
- - THIRD QUARTER NET NEW HOME ORDERS INCREASE 48% TO 8,005 HOUSES
- - QUARTER-END BACKLOG AT 13,675 HOMES, VALUED AT $3.5 BILLION
- - PULTE BOARD AUTHORIZES $100 MILLION STOCK REPURCHASE PROGRAM
BLOOMFIELD HILLS, MI, OCTOBER 22, 2002 - Pulte Homes, Inc. (NYSE: PHM)
announced today record financial results for its third quarter and nine months
ended September 30, 2002. For the quarter, net income from continuing operations
increased 37% to a record $113.5 million, or $1.83 per share, as compared to
$83.2 million, or $1.53 per share, last year. Shares used in calculating
third-quarter EPS increased 14% over the same period last year reflecting stock
issued as part of the Company's merger with Del Webb that was effective July 31,
2001.
Consolidated revenues for the quarter were $1.9 billion, an increase of
25% over prior year revenues of $1.5 billion. Higher revenues for the period
reflect continued strength in Pulte's overall business and its expanded
operations following last year's merger with Del Webb.
Revenues from domestic homebuilding settlements for the quarter
increased $315.8 million, or 22%, to a third quarter record of $1.8 billion.
Higher revenues for the period resulted from a 16% increase in unit settlements
to 7,280, up from 6,253 settlements last year, and a 5% increase in average
selling price to $241,000 per home.
Third quarter domestic homebuilding gross profit increased 24% to
$353.3 million, as compared to prior year gross profit of $285.7 million.
Domestic homebuilding margins increased 30 basis points in the period to 20.2%.
Land sales during the quarter generated $28.7 million in revenues and
$6.7 million in gross profit, as compared to $20.7 million and $3.9 million,
respectively, last year. Land sales are an important element of the Company's
domestic homebuilding operations, but can fluctuate from quarter-to-quarter
depending upon the timing of individual transactions.
Domestic net new home orders for the quarter were 8,005, an increase of
48% over prior year orders of 5,411 homes (excluding 3,823 Del Webb houses in
backlog acquired at the time of the merger). Pulte's backlog as of September 30,
2002, was valued at $3.5 billion (13,675 homes), as compared to a value of $2.8
billion (11,772 homes) last year.
"Our increased sales reflect a number of positive factors including
strength in consumer demand, new community openings and initiatives to increase
sales pace within several of our larger active adult communities," said O'Brien.
The Company's financial services operations reported third quarter
pre-tax income of $19.2 million, more than double prior year pre-tax income of
$9.3 million. The improvement in third quarter financial results reflects higher
loan originations of 5,740, up 16%, with a principal value of $945.1 million. In
addition, the Company's mortgage operation continued to benefit from a favorable
interest rate environment. For the quarter, Pulte Mortgage's capture rate was
77.6%, as compared to 74.4% last year.
For the third quarter, Pulte's International operations reported
pre-tax income of $.4 million, as compared to a pre-tax loss of $1.8 million for
the comparable period last year. Gains for the quarter primarily reflect
improved performance from the Company's operations in Argentina, while its
operations in Mexico and Puerto Rico remained stable.
Pulte Homes reported net income for the quarter of $123.4 million, or
$1.99 per share. Net income for the quarter is inclusive of $9.9 million, or
$0.16 per share, reported in the Company's discontinued operations, and related
to the recognition of income tax benefits resulting from the favorable
resolution of certain tax matters associated with its thrift operations that
were discontinued in 1994.
"Following last year's merger with Del Webb, Pulte has moved quickly to
integrate the operations, while maintaining a strong financial position," said
Roger A. Cregg, Senior Vice President and CFO. "We ended the quarter with total
shareholder equity of $2.6 billion, book value of $42.36 per share, and a
net-debt-to-total-capitalization of 39.7%. Over this most recent 12 month period
we have generated a return on equity of 17%, while strengthening the Company's
overall market position."
In a separate release, Pulte Homes also announced today that its Board
of Directors has approved a stock repurchase plan of up to $100 million. Shares
will be purchased from time-to-time in the open market, depending upon market
conditions.
NINE-MONTH RESULTS
For the nine months ended September 30, 2002, Pulte Homes reported
record net income from continuing operations of $272.6 million, or $4.42 per
share, up 49% over prior year net income of $182.9 million, or $3.89 per share
last year. Shares used in calculating nine-month EPS increased 31% to 61.7
million, primarily as a result of the Company's merger with Del Webb effective
July 2001. Consolidated revenues for the period were $4.9 billion, up from $3.4
billion for the first nine months of last year.
Pulte Homes' revenues from domestic homebuilding settlements increased
43% over the prior year period to $4.6 billion. Higher revenues for the period
resulted from a 8% increase in average selling price to $239,000, combined with
a 33% increase in the number of homes closed. The increase in average selling
price and unit volumes reflect the inclusion of Del Webb operations and
favorable building conditions during the period. Gross margins for the domestic
homebuilding operations were unchanged at 20.0%, as pre-tax income increased 40%
to $440.3 million.
For the first nine months, Pulte's financial services operations
reported pre-tax income of $47.6 million, up significantly from prior year
pre-tax income of $23.5 million. Benefiting from the Company's higher closing
volumes and an increased capture rate, mortgage originations jumped 23% to
14,960 loans, with a principal value of $2.4 billion. Pulte's mortgage
operations also benefited from a favorable interest rate environment.
Pulte's International operations reported net income for the first nine
months of $1.8 million, as compared to a pre-tax loss of $2.1 million last year.
The improved financial performance was driven by gains in the Company's
operations in Mexico and Argentina, partially offset by reduced performance in
its Puerto Rico communities.
"Given our strong nine-month results and excellent backlog, Pulte Homes
is raising guidance for full-year 2002 earnings to $7.05 to $7.15 per share, up
from previous guidance of $6.75 to $7.00 per share," said Cregg. "We are also
establishing our initial guidance for 2003 earnings of $7.85 to $8.25 per share.
This guidance is based on recent demand trends and our preliminary budget
reviews. Our guidance also assumes that economic conditions remain stable or
improve in 2003, such that housing demand approaches what we are experiencing
currently."
A conference call discussing Pulte Homes' third quarter results will be held
today 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 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 OUR 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.
ABOUT PULTE HOMES
Pulte Homes, Inc. (www.pulte.com), based in Bloomfield Hills, Michigan,
has operations in 43 markets across the United States. Under its Del Webb
(www.delwebb.com) brand, the Company is also the nation's leading builder of
active adult communities for people age 55 and older. Over its history, the
Company has constructed more than 300,000 homes and has been named Builder of
the Year for 2002 by Professional Builder magazine. Pulte Mortgage Corporation
is a nationwide lender committed to meeting the financing needs of Pulte Homes'
customers by offering a wide variety of loan products and superior customer
service.
/Web site: http://www.pulte.com
Pulte Homes, Inc.
Condensed Consolidated Results
Of Operations
------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
------------------------------------- -------------------------------------
(000's omitted, except per share data)
(Unaudited)
CONSOLIDATED RESULTS:
Revenues:
Homebuilding $1,831,317 $1,463,427 $4,848,592 $3,329,159
Financial Services 27,836 20,898 74,702 52,741
Corporate 353 494 516 2,116
----------------- ---------------- ----------------- ----------------
Total Revenues $1,859,506 $1,484,819 $4,923,810 $3,384,016
================= ================ ================= ================
Pre-tax income (loss):
Homebuilding $ 180,180 $ 142,228 $ 442,036 $ 313,195
Financial Services 19,168 9,291 47,584 23,458
Corporate (13,254) (16,296) (42,770) (39,255)
----------------- ---------------- ----------------- ----------------
Income from continuing operations
before income taxes 186,094 135,223 446,850 297,398
Income taxes (72,585) (52,072) (174,293) (114,509)
----------------- ---------------- ----------------- ----------------
Income from continuing operations 113,509 83,151 272,557 182,889
Income(loss) from discontinued
operations 9,937 (364) 9,204 (937)
----------------- ---------------- ----------------- ----------------
Net income $ 123,446 $ 82,787 $ 281,761 $ 181,952
================= ================ ================= ================
EARNINGS PER SHARE -
ASSUMING DILUTION:
Income from continuing operations $ 1.83 $ 1.53 $ 4.42 $ 3.89
Income(loss) from discontinued
operations .16 (.01) .15 (.02)
----------------- ---------------- ----------------- ----------------
Net income $ 1.99 $ 1.52 4.57 $ 3.87
================= ================ ================= ================
Shares used in per share calculations 61,950 54,518 61,714 46,965
================= ================ ================= ================
Certain 2001 classifications have been changed to conform with the 2002
presentation.
Pulte Homes, Inc.
Condensed Consolidated Balance Sheets
($000's omitted)
(Unaudited)
----------------------------------------------------------------
September 30, December 31, 2001 September 30,
2002 2001
----------------- -------------------- ------------------
ASSETS
Cash and equivalents $ 212,077 $ 72,144 $ 59,754
Unfunded settlements 44,613 69,631 60,215
House and land inventories 4,439,060 3,833,763 4,002,423
Residential mortgage loans
available-for-sale 329,161 431,735 302,016
Goodwill 307,693 307,693 281,280
Intangible Assets 153,491 159,604 169,575
Other assets 833,062 839,706 846,102
----------------- -------------------- ------------------
$6,319,157 $5,714,276 $5,721,365
================= ==================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities $1,425,222 $1,155,702 $1,264,733
Unsecured short-term
borrowings - 110,000 61,500
Collateralized short-term debt, recourse solely
to applicable subsidiary assets 301,695 413,675 276,295
Income taxes 80,972 35,370 66,179
Subordinated debentures and senior notes 1,918,364 1,722,864 1,882,775
----------------- -------------------- ------------------
Total Liabilities 3,726,253 3,437,611 3,551,482
Shareholders' Equity 2,592,904 2,276,665 2,169,883
----------------- -------------------- ------------------
$6,319,157 $5,714,276 $5,721,365
================= ==================== ==================
Certain 2001 classifications have been changed to conform with the 2002
presentation.
Pulte Homes, Inc.
Segment Data
Three Months Ended
September 30,
----------------------------------------------------
2002 2001
----------------- ----------------
($000's omitted)
HOMEBUILDING:
Pre-tax income (loss):
Domestic $ 179,827 $ 143,983
International 353 (1,755)
----------------- ----------------
Total Homebuilding $ 180,180 $ 142,228
================= ================
Domestic Homebuilding:
Home sales (settlements) $1,752,045 $1,436,264
Land sales 28,731 20,702
----------------- ----------------
Domestic Homebuilding Revenue 1,780,776 1,456,966
Home cost of sales (1,398,781) (1,150,561)
Land cost of sales & administrative (22,063) (16,774)
expense (161,489) (131,475)
Other expense, net (5,362) (5,065)
----------------- ----------------
EBIT 193,081 153,091
Interest (13,254) (9,108)
----------------- ----------------
Pre-tax income $ 179,827 $ 143,983
================= ================
International Homebuilding:
Home sales (settlements) $ 50,541 $ 6,461
Cost of sales (41,512) (5,652)
Selling, general & administrative
expense (8,431) (3,687)
Other income (expense), net (591) 176
Minority Interest (227) -
Equity in income of joint venture
operations 573 947
----------------- ----------------
Pre-tax income (loss) $ 353 $ (1,755)
================= ================
FINANCIAL SERVICES:
Pre-tax income $ 19,168 $ 9,291
================= ================
MORTGAGE
ORIGINATIONS:
Origination volume 5,740 4,938
================= ================
Origination principal $ 945,100 $ 768,500
================= ================
CORPORATE:
Pre-tax loss:
Net interest expense $ (9,271) $ (9,937)
Other Corporate expense, net (3,983) (6,359)
----------------- ----------------
Total Corporate $ (13,254) $ (16,296)
================= ================
Certain 2001 classifications have been changed to conform with the 2002
presentation.
Pulte Homes, Inc.
Segment Data
Nine Months Ended
September 30,
----------------------------------------------------
2002 2001
----------------- ----------------
($000's omitted)
HOMEBUILDING:
Pre-tax income (loss):
Domestic $ 440,255 $ 315,276
International 1,781 (2,081)
----------------- ----------------
Total Homebuilding $ 442,036 $ 313,195
================= ================
Domestic Homebuilding:
Home sales (settlements) $4,637,918 $3,239,772
Land sales 86,500 63,129
----------------- ----------------
Domestic Homebuilding Revenue 4,724,418 3,302,901
Home cost of sales (3,708,250) (2,593,208)
Land cost of sales (60,862) (45,796)
Selling, general & administrative
expense (467,370) (317,273)
Other expense, net (14,537) (8,004)
----------------- ----------------
EBIT 473,399 338,620
Interest (33,144) (23,344)
----------------- ----------------
Pre-tax income $ 440,255 $ 315,276
================= ================
International Homebuilding:
Home sales (settlements) $ 124,174 $ 26,258
Cost of sales (99,420) (22,906)
Selling, general & administrative
expense (24,786) (8,941)
Other income (expense), net (1,449) 536
Minority Interest (623) -
Equity in income of joint venture
operations 3,885 2,972
----------------- ----------------
Pre-tax income (loss) $ 1,781 $ (2,081)
================= ================
FINANCIAL SERVICES:
Pre-tax income $ 47,584 $ 23,458
================= ================
MORTGAGE
ORIGINATIONS:
Origination volume 14,960 12,209
================= ================
Origination principal $2,421,300 $1,871,300
================= ================
CORPORATE:
Pre-tax loss:
Net interest expense $ (28,483) $ (23,620)
Other Corporate expense, net (14,287) (15,635)
----------------- ----------------
Total Corporate $ (42,770) $ (39,255)
================= ================
Certain 2001 classifications have been changed to conform with the 2002
presentation.
Pulte Homes, Inc.
Business Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------- -------------------------------------
2002 2001 2002 2001
---------------- ---------------- ---------------- ----------------
(000's omitted)
HOMEBUILDING UNIT SETTLEMENTS - PULTE
AND AFFILIATES:
Domestic 7,280 6,253 19,375 14,572
International 1,978 1,618 5,395 5,036
---------------- ---------------- ---------------- ----------------
Total Pulte and Pulte-affiliate
settlement units 9,258 7,871 24,770 19,608
================ ================ ================ ================
HOMEBUILDING REVENUES - PULTE AND
AFFILIATES:
Domestic $1,752,045 $1,436,264 $4,637,918 $3,239,772
International 55,265 48,402 160,006 145,909
---------------- ---------------- ---------------- ----------------
Total Pulte and Pulte-affiliate
revenues $1,807,310 $1,484,666 $4,797,924 $3,385,681
================ ================ ================ ================
Domestic Homebuilding
Unit settlements:
Northeast 593 499 1,513 1,343
Southeast 2,122 2,009 5,686 5,369
Midwest 1,269 998 2,947 2,188
Central 1,101 1,008 2,854 2,510
West 2,195 1,739 6,375 3,162
---------------- ---------------- ---------------- ----------------
7,280 6,253 19,375 14,572
================ ================ ================ ================
Unit net new orders:
Northeast 680 470 2,134 1,657
Southeast 2,305 2,331 6,820 6,818
Midwest 1,151 1,030 3,697 3,004
Central 1,174 1,095 3,766 3,363
West 2,695 4,308 7,955 6,025
---------------- ---------------- ---------------- ----------------
8,005 9,234* 24,372 20,867*
================ ================ ================ ================
Unit backlog:
Northeast 1,452 1,124
Southeast 3,693 3,590
Midwest 2,125 1,723
Central 1,815 1,667
West 4,590 3,668
---------------- ----------------
13,675 11,772
================ ================
International Homebuilding:
Unit settlements:
Pulte 1,950 35 4,403 178
Pulte-affiliated entities 28 1,583 992 4,858
---------------- ---------------- ---------------- ----------------
1,978 1,618 5,395 5,036
================ ================ ================ ================
*Includes acquired backlog of 3,823 units from the merger with Del Webb
Corporation effective July 31, 2001.