EXHIBIT 99.1
[PULTE HOMES LOGO]
FOR IMMEDIATE RELEASE Company Contacts
Investors: James Zeumer
(248) 433-4597
email: jim.zeumer@pulte.com
Media: Valerie Dolenga
(248) 433-4633
email: valerie.dolenga@pulte.com
PULTE HOMES ANNOUNCES RECORD THIRD QUARTER FINANCIAL RESULTS
* THIRD QUARTER EARNINGS FROM CONTINUING OPERATIONS INCREASE 40% TO $2.56
PER SHARE, AS NET INCOME FROM CONTINUING OPERATIONS CLIMBS TO $161
MILLION
* THIRD QUARTER NET NEW ORDERS INCREASE 14% TO 9,100 HOMES
* QUARTER-END BACKLOG JUMPS TO 16,646 HOMES, VALUED AT $4.7 BILLION
* COMPANY RAISES GUIDANCE FOR 2003 EARNINGS FROM CONTINUING OPERATIONS TO
$9.50 TO $9.75 PER DILUTED SHARE
* PULTE EXPECTS 2004 EARNINGS IN THE RANGE OF $11.50 TO $12.00 PER
DILUTED SHARE FROM CONTINUING OPERATIONS
BLOOMFIELD HILLS, MI, OCTOBER 22, 2003 -- Pulte Homes, Inc. (NYSE: PHM)
announced today record financial results for its third quarter and nine months
ended September 30, 2003. For the quarter, net income from continuing operations
increased 42% to a record $161.0 million, as compared to $113.5 million last
year. Third quarter earnings per diluted share increased 40% to $2.56, as
compared to prior year earnings per diluted share of $1.83. Consolidated
revenues for the quarter totaled $2.4 billion, as compared to $1.9 billion last
year.
"Pulte Homes continues to successfully implement its strategy of
expanding market share through customer segmentation," said Richard J. Dugas,
Jr., President and CEO of Pulte Homes. "As the only builder serving the first
time, first and second move up and active adult buyers, we see tremendous
opportunity to sustain the growth of our business."
"Our strong third quarter results, combined with a backlog valued at
$4.7 billion, puts Pulte Homes in position to deliver record results for 2003.
We are again raising earnings guidance for the year to a range of $9.50 to $9.75
per share and we are also establishing our initial earnings goal for 2004 of
$11.50 to $12.00 per share from continuing operations. Higher earnings for 2003
will drive an approximately 200 basis point increase in return on capital, as
the Company continues to focus on improving overall returns."
4
Revenues from domestic homebuilding settlements for the quarter
increased $521.2 million, or 30%, to a third quarter record of $2.3 billion.
Higher revenues for the period resulted from a 19% increase in unit settlements
to 8,637, up from 7,280 settlements last year, combined with a 9% increase in
average selling price to $263,000 per home. The higher average selling price
reflects increases in selling prices realized during the quarter and a favorable
change in the mix of product delivered.
Third quarter domestic homebuilding pretax income increased 46% to
$263.0 million, as compared to prior pretax income of $179.8 million. Pretax
income for the period reflects a 120 basis point increase in gross margins from
home sales, resulting from higher prices, a favorable product mix and an
improvement in overall construction efficiencies. Selling, General &
Administrative expenses as a percent of home settlement revenues were up 10
basis points, primarily as a result of startup costs associated with an
increased number of new community openings.
Land sales during the quarter generated $39.8 million in revenues and
$7.2 million in gross profit, as compared to $28.7 million and $6.7 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 9,100, an increase of
14% over prior year orders of 8,005 homes. Reported net new home orders for the
period are exclusive of 984 homes in backlog acquired as part of the purchase of
assets from Sivage-Thomas Homes. Pulte's backlog as of September 30, 2003, was
valued at $4.7 billion (16,646 homes), as compared to $3.5 billion (13,675
homes) last year.
The Company's financial services operations reported third quarter
pre-tax income of $13.4 million, a decrease of 30% from the prior year. Loan
originations for the quarter increased 33% to 7,634 loans. Higher mortgage
volumes for the period were offset by a less favorable interest rate environment
experienced during the quarter. For the quarter, Pulte Mortgage's capture rate
was 83%, as compared to 78% last year.
For the third quarter, Pulte's International operations reported
pre-tax income of $.8 million, as compared to pre-tax income of $.4 million for
the comparable period last year. Gains for the quarter reflect improved
performance from the Company's operations in Mexico, where a slight increase in
average selling price drove enhanced margins and pre-tax income. The Company
also reported that it is in the process of evaluating various long-term
strategic alternatives with regard to its International operations. "Modest
gains in International reflect actions taken to drive performance, rationalize
land investments and enhance current returns, while various alternative
long-term business strategies are considered," said Mr. Dugas.
During the third quarter of 2003, the Company recorded a non-cash,
after tax gain of $7.9 million related to the favorable resolution of certain
tax matters in connection with its thrift operations, which were discontinued in
1994.
NINE-MONTH RESULTS
For the nine months ended September 30, 2003, Pulte Homes' net income
from continuing operations increased 36% to $369.3 million, as compared to prior
year net income of $272.6 million. Diluted earnings per share for the first nine
months were $5.91 per share, an increase of 34% over prior year earnings per
diluted share of $4.42. Consolidated revenues for the period were $5.9 billion,
up from $4.9 billion for the first nine months of last year.
Nine-month revenues from domestic homebuilding settlements for the
period were $5.6 billion, up 20% over the prior year. Higher revenues for the
period resulted from an 8% increase in average selling price to $258,000,
combined with an 11% increase in the number of homes closed. The increase in
average selling price for the period reflects a combination of price increases
and a favorable change in the mix of product closed during the period.
5
Nine-month domestic homebuilding pretax income increased 36% to $599.1
million, as compared to prior year pre-tax income of $440.3 million. Gross
margins from home sales for the period increased 140 basis points to 21.4%. This
improvement was partially offset by a 10 basis point increase in SG&A expense as
a percent of home settlement revenues. Land sales for the period generated $25.1
million in gross margin, as compared to $25.6 million last year.
For the first nine months, Pulte's financial services operations
reported pre-tax income of $51.4 million, up 8% from prior year pre-tax income
of $47.6 million. The improvement was driven by a 31% increase in loan
originations and a higher capture rate of approximately 82%, as compared to 77%
last year.
Pulte's International operations reported net income for the nine
months of $.2 million, as compared to pre-tax income of $1.8 million last year.
Gains in the Company's Puerto Rico operations were offset by weaker results in
Mexico and Argentina.
A conference call discussing Pulte Homes' third quarter results will be held
Thursday, October 23, 2003 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 44 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 330,000 homes and has been named Builder of
the Year for 2002 by Professional Builder magazine. Pulte Mortgage LLC 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/
###
6
Pulte Homes, Inc.
Condensed Consolidated Results
Of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------- -------------------------------------
2003 2002 2003 2002
------------------------------------- -------------------------------------
(000's omitted, except per share data)
(Unaudited)
CONSOLIDATED RESULTS:
Revenues:
Homebuilding $2,373,364 $1,831,317 $5,822,514 $4,848,592
Financial Services 25,851 27,836 85,221 74,702
Corporate 588 353 2,843 516
----------------- ---------------- ----------------- ----------------
Total Revenues $2,399,803 $1,859,506 $5,910,578 $4,923,810
================= ================ ================= ================
Pre-tax income (loss):
Homebuilding $ 263,885 $ 180,180 $ 599,318 $ 442,036
Financial Services 13,381 19,168 51,355 47,584
Corporate (17,601) (13,254) (55,016) (42,770)
----------------- ---------------- ----------------- ----------------
Income from continuing operations
before income taxes 259,665 186,094 595,657 446,850
Income taxes (98,630) (72,585) (226,321) (174,293)
----------------- ---------------- ----------------- ----------------
Income from continuing operations 161,035 113,509 369,336 272,557
Income from discontinued operations 7,851 9,937 7,404 9,204
----------------- ---------------- ----------------- ----------------
Net income $ 168,886 $ 123,446 $ 376,740 $ 281,761
================= ================ ================= ================
EARNINGS PER SHARE -
ASSUMING DILUTION:
Income from continuing operations $2.56 $1.83 $5.91 $4.42
Income from discontinued operations .13 .16 .12 .15
----------------- ---------------- ----------------- ----------------
Net income $2.69 $1.99 $6.03 $4.57
================= ================ ================= ================
Shares used in per share calculations 62,889 61,950 62,509 61,714
================= ================ ================= ================
</Table>
7
Pulte Homes, Inc.
Condensed Consolidated Balance Sheets
($000's omitted)
(Unaudited)
September 30, December 31, September 30,
2003 2002 2002
--------------------- -------------------- ---------------------
ASSETS
Cash and equivalents $ 312,151 $ 613,168 $ 212,077
Unfunded settlements 62,986 60,641 44,613
House and land inventories 5,473,627 4,293,597 4,439,060
Land, not owned, under option agreements 62,324 - -
Residential mortgage loans
available-for-sale 518,292 600,339 336,122
Goodwill 307,693 307,693 307,693
Intangible Assets 145,767 151,954 153,491
Other assets 991,363 861,063 825,986
--------------------- -------------------- ---------------------
$7,874,203 $6,888,455 $6,319,042
===================== ==================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable, accrued and other
liabilities $1,871,174 $1,565,131 $1,425,107
Collateralized short-term debt, recourse
solely to applicable subsidiary assets 468,068 559,621 301,695
Income taxes 127,646 90,009 80,972
Senior notes and subordinated notes 2,254,055 1,913,268 1,918,364
--------------------- -------------------- ---------------------
Total Liabilities 4,720,943 4,128,029 3,726,138
Shareholders' Equity 3,153,260 2,760,426 2,592,904
--------------------- -------------------- ---------------------
$7,874,203 $6,888,455 $6,319,042
===================== ==================== =====================
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Pulte Homes, Inc.
Segment Data
Three Months Ended
September 30,
----------------------------------------------------
2003 2002
----------------- ----------------
($000's omitted)
HOMEBUILDING:
Pre-tax income:
Domestic $ 263,037 $ 179,827
International 848 353
----------------- ----------------
Total Homebuilding $ 263,885 $ 180,180
================= ================
Domestic Homebuilding:
Home sales (settlements) $ 2,273,234 $ 1,752,045
Land sales 39,763 28,731
----------------- ----------------
Domestic Homebuilding Revenue 2,312,997 1,780,776
Home cost of sales (1,786,982) (1,398,781)
Land cost of sales (32,610) (22,063)
Selling, general & administrative expense (211,805) (161,489)
Other income (expense), net 3,634 (5,362)
----------------- ----------------
EBIT 285,234 193,081
Interest (22,197) (13,254)
----------------- ----------------
Pre-tax income $ 263,037 $ 179,827
================= ================
International Homebuilding:
Home sales (settlements) $ 60,367 $ 50,541
Cost of sales (47,880) (41,512)
Selling, general & administrative expense (10,785) (8,431)
Other income (expense), net (561) (591)
Minority Interest (936) (227)
Equity in income of joint venture operations 643 573
----------------- ----------------
Pre-tax income $ 848 $ 353
================= ================
FINANCIAL SERVICES:
Pre-tax income $ 13,381 $ 19,168
================= ================
MORTGAGE
ORIGINATIONS:
Origination volume 7,634 5,740
================= ================
Origination principal $ 1,340,200 $ 945,100
================= ================
CORPORATE:
Pre-tax loss:
Net interest expense $ (10,231) $ (9,271)
Other Corporate expense, net (7,370) (3,983)
----------------- ----------------
Total Corporate $ (17,601) $ (13,254)
================= ================
9
Pulte Homes, Inc.
Segment Data
Three Months Ended
September 30,
----------------------------------------------------
2003 2002
----------------- ----------------
($000's omitted)
HOMEBUILDING:
Pre-tax income:
Domestic $ 599,116 $ 440,255
International 202 1,781
----------------- ----------------
Total Homebuilding $ 599,318 $ 442,036
================= ================
Domestic Homebuilding:
Home sales (settlements) $ 5,565,893 $ 4,637,918
Land sales 103,988 86,500
----------------- ----------------
Domestic Homebuilding Revenue 5,669,881 4,724,418
Home cost of sales (4,374,806) (3,708,250)
Land cost of sales (78,845) (60,862)
Selling, general & administrative expense (568,766) (467,370)
Other income (expense), net 2,361 (14,537)
----------------- ----------------
EBIT 649,825 473,399
Interest (50,709) (33,144)
----------------- ----------------
Pre-tax income $ 599,116 $ 440,255
================= ================
International Homebuilding:
Home sales (settlements) $ 152,633 $ 124,174
Cost of sales (121,861) (99,420)
Selling, general & administrative expense (31,375) (24,786)
Other income (expense), net (1,654) (1,449)
Minority Interest 45 (623)
Equity in income of joint venture operations 2,414 3,885
----------------- ----------------
Pre-tax income $ 202 $ 1,781
================= ================
FINANCIAL SERVICES:
Pre-tax income $ 51,355 $ 47,584
================= ================
MORTGAGE
ORIGINATIONS:
Origination volume 19,572 14,960
================= ================
Origination principal $ 3,368,400 $ 2,421,300
================= ================
CORPORATE:
Pre-tax loss:
Net interest expense $ (28,711) $ (28,483)
Other Corporate expense, net (26,305) (14,287)
----------------- ----------------
Total Corporate $ (55,016) $ (42,770)
================= ================
10
Pulte Homes, Inc.
Business Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------- --------------------------------------
2003 2002 2003 2002
---------------- ---------------- ---------------- ----------------
SETTLEMENT REVENUES ($000's omitted):
Pulte Homebuilding settlement revenues:
Domestic $2,273,234 $1,752,045 $5,565,893 $4,637,918
International 60,367 50,541 152,633 124,174
---------------- ---------------- ---------------- ----------------
Total Pulte 2,333,601 1,802,586 5,718,526 4,762,092
---------------- ---------------- ---------------- ----------------
Pulte-affiliate international homebuilding
settlement revenues 6,525 4,724 23,062 35,832
---------------- ---------------- ---------------- ----------------
Total Pulte and Pulte-affiliate settlement
revenues $2,340,126 $1,807,310 $5,741,588 $4,797,924
================ ================ ================ ================
SETTLEMENT UNITS:
Pulte Homebuilding settlement units:
Domestic 8,637 7,280 21,534 19,375
International 1,921 1,950 4,580 4,403
---------------- ---------------- ---------------- ----------------
Total Pulte 10,558 9,230 26,114 23,778
---------------- ---------------- ---------------- ----------------
Pulte-affiliate international homebuilding
settlement units 29 28 114 992
---------------- ---------------- ---------------- ----------------
Total Pulte and Pulte-affiliate settlement units 10,587 9,258 26,228 24,770
================ ================ ================ ================
Domestic Homebuilding:
Unit settlements:
Northeast 626 593 1,605 1,513
Southeast 2,105 2,122 5,613 5,686
Midwest 1,422 1,269 3,305 2,947
Central 1,392 1,101 3,259 2,854
West 3,092 2,195 7,752 6,375
---------------- ---------------- ---------------- ----------------
8,637 7,280 21,534 19,375
================ ================ ================ ================
Unit net new orders*:
Northeast 766 680 2,411 2,134
Southeast 2,323 2,305 7,027 6,820
Midwest 1,119 1,151 3,659 3,697
Central 1,392 1,174 3,894 3,766
West 3,500 2,695 9,533 7,955
---------------- ---------------- ---------------- ----------------
9,100 8,005 26,524 24,372
================ ================ ================ ================
Unit backlog:
Northeast 1,935 1,452
Southeast 4,353 3,693
Midwest 1,955 2,125
Central 1,949 1,815
West 6,454 4,590
---------------- ----------------
16,646 13,675
================ ================
* Net new orders for the three and nine months ended September 30, 2003 do not
include 984 and 1,051 units, respectively, of backlog acquired.
11