PulteGroup Reports Fourth Quarter 2023 Financial Results
-
Net Income of
$3.28 Per Share - Net New Orders Increased 57% to 6,214 Homes
-
Closings of 7,615 Homes Drove Home Sale Revenues of
$4.2 Billion - Home Sale Gross Margin of 28.9%
-
Unit Backlog of 12,146 Homes with a Value of
$7.3 Billion -
Repurchased 3.6 Million Common Shares in the Quarter for
$300 Million -
Year End Cash Balance of
$1.8 Billion and a Debt-to-Capital Ratio of 15.9% -
Announces
$1.5 Billion Increase to Share Repurchase Authorization
“PulteGroup’s strong fourth quarter financial results complete a record setting year, while the 57% increase in net new orders provides tremendous momentum heading into 2024,” said
“As the fourth quarter progressed, we experienced a significant increase in buyer activity as interest rates moved lower, resulting in December being the highest sales month of the quarter. With expectations for interest rates to remain lower in 2024, we are optimistic that improved affordability dynamics will continue attracting buyers into the market.
“After multiple years of variable macroeconomic activity, expectations are that 2024 can be a year of increased homebuying demand given a strong job market, lower interest rates and a limited inventory of existing homes. With a ready supply of homes and lots, I believe
Fourth Quarter Results
For the fourth quarter, home sale revenues totaled
The Company’s home sale gross margin for the fourth quarter was 28.9%, compared with 29.4% in the prior year period. Fourth quarter SG&A expense was
Net new orders in the fourth quarter increased 57% over the prior year to 6,214 homes, while the dollar value of these orders increased 56% to
The average community count in the fourth quarter increased 8% from the prior year to 919 communities.
The Company’s Financial Services operations reported fourth quarter pre-tax income of
In the fourth quarter, the Company repurchased 3.6 million of its common shares for
The Company ended the year with
In a separate release, the Company announced that its Board of Directors approved a
“Having repurchased almost 50% of our stock since initiating the program in 2013, this new authorization reflects our Company’s ongoing commitment to returning excess funds to our shareholders,” said Marshall.
A conference call discussing
* The Company's return on equity is calculated as net income for the trailing twelve months divided by average shareholders' equity, where average shareholders' equity is the sum of ending shareholders' equity balances of the trailing five quarters divided by five.
Forward-Looking Statements
This 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,” “plan,” “project,” “may,” “can,” “could,” “might,” “should,” “will” and similar expressions identify forward-looking statements, including statements related to any potential impairment charges and the impacts or effects thereof, 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.
Such risks, uncertainties and other factors include, among other things: interest rate changes and the availability of mortgage financing; the impact of any changes to our strategy in responding to the cyclical nature of the industry or deteriorations in industry changes or downward changes in general economic or other business conditions, including any changes regarding our land positions and the levels of our land spend; economic changes nationally or in our local markets, including inflation, deflation, changes in consumer confidence and preferences and the state of the market for homes in general; labor supply shortages and the cost of labor; the availability and cost of land and other raw materials used by us in our homebuilding operations; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; competition within the industries in which we operate; governmental regulation directed at or affecting the housing market, the homebuilding industry or construction activities, slow growth initiatives and/or local building moratoria; the availability and cost of insurance covering risks associated with our businesses, including warranty and other legal or regulatory proceedings or claims; damage from improper acts of persons over whom we do not have control or attempts to impose liabilities or obligations of third parties on us; weather related slowdowns; the impact of climate change and related governmental regulation; adverse capital and credit market conditions, which may affect our access to and cost of capital; the insufficiency of our income tax provisions and tax reserves, including as a result of changing laws or interpretations; the potential that we do not realize our deferred tax assets; our inability to sell mortgages into the secondary market; uncertainty in the mortgage lending industry, including revisions to underwriting standards and repurchase requirements associated with the sale of mortgage loans, and related claims against us; risks related to information technology failures or data security issues; failure to retain key personnel; the disruptions associated with the COVID-19 pandemic (or another epidemic or pandemic or similar public threat or fear of such an event), and the measures taken to address it; the effect of cybersecurity incidents and threats; and other factors of national, regional and global scale, including those of a political, economic, business and competitive nature. See Item 1A – Risk Factors in our Annual Report on Form 10-K for the fiscal year ended
About
For more information about
|
|||||||||||||||
Consolidated Results of Operations |
|||||||||||||||
( |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Homebuilding |
|
|
|
|
|
|
|
||||||||
Home sale revenues |
$ |
4,165,231 |
|
|
$ |
4,961,040 |
|
|
$ |
15,598,707 |
|
|
$ |
15,548,119 |
|
Land sale and other revenues |
|
34,540 |
|
|
|
45,518 |
|
|
|
142,116 |
|
|
|
143,144 |
|
|
|
4,199,771 |
|
|
|
5,006,558 |
|
|
|
15,740,823 |
|
|
|
15,691,263 |
|
Financial Services |
|
93,881 |
|
|
|
72,089 |
|
|
|
320,755 |
|
|
|
311,716 |
|
Total revenues |
|
4,293,652 |
|
|
|
5,078,647 |
|
|
|
16,061,578 |
|
|
|
16,002,979 |
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding Cost of Revenues: |
|
|
|
|
|
|
|
||||||||
Home sale cost of revenues |
|
(2,961,920 |
) |
|
|
(3,503,137 |
) |
|
|
(11,030,206 |
) |
|
|
(10,867,879 |
) |
Land sale and other cost of revenues |
|
(32,139 |
) |
|
|
(29,936 |
) |
|
|
(124,607 |
) |
|
|
(119,906 |
) |
|
|
(2,994,059 |
) |
|
|
(3,533,073 |
) |
|
|
(11,154,813 |
) |
|
|
(10,987,785 |
) |
|
|
|
|
|
|
|
|
||||||||
Financial Services expenses |
|
(50,036 |
) |
|
|
(48,040 |
) |
|
|
(187,280 |
) |
|
|
(180,696 |
) |
Selling, general, and administrative expenses |
|
(308,319 |
) |
|
|
(350,831 |
) |
|
|
(1,312,642 |
) |
|
|
(1,381,222 |
) |
Equity income from unconsolidated entities, net |
|
213 |
|
|
|
48,291 |
|
|
|
4,561 |
|
|
|
50,680 |
|
Gain on debt retirement |
|
301 |
|
|
|
— |
|
|
|
663 |
|
|
|
— |
|
Other income (expense), net |
|
5,066 |
|
|
|
(31,179 |
) |
|
|
37,200 |
|
|
|
(64,398 |
) |
Income before income taxes |
|
946,818 |
|
|
|
1,163,815 |
|
|
|
3,449,267 |
|
|
|
3,439,558 |
|
Income tax expense |
|
(235,825 |
) |
|
|
(281,584 |
) |
|
|
(846,895 |
) |
|
|
(822,241 |
) |
Net income |
$ |
710,993 |
|
|
$ |
882,231 |
|
|
$ |
2,602,372 |
|
|
$ |
2,617,317 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
3.30 |
|
|
$ |
3.86 |
|
|
$ |
11.79 |
|
|
$ |
11.07 |
|
Diluted |
$ |
3.28 |
|
|
$ |
3.85 |
|
|
$ |
11.72 |
|
|
$ |
11.01 |
|
Cash dividends declared |
$ |
0.20 |
|
|
$ |
0.16 |
|
|
$ |
0.68 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
||||||||
Number of shares used in calculation: |
|
|
|
|
|
|
|
||||||||
Basic |
|
214,399 |
|
|
|
227,200 |
|
|
|
219,958 |
|
|
|
235,010 |
|
Effect of dilutive securities |
|
1,364 |
|
|
|
902 |
|
|
|
1,205 |
|
|
|
1,156 |
|
Diluted |
|
215,763 |
|
|
|
228,102 |
|
|
|
221,163 |
|
|
|
236,166 |
|
|
|||||
Condensed Consolidated Balance Sheets |
|||||
( |
|||||
(Unaudited) |
|||||
|
|
|
|
||
|
|
|
|
||
ASSETS |
|
|
|
||
|
|
|
|
||
Cash and equivalents |
$ |
1,806,583 |
|
$ |
1,053,104 |
Restricted cash |
|
42,594 |
|
|
41,449 |
Total cash, cash equivalents, and restricted cash |
|
1,849,177 |
|
|
1,094,553 |
House and land inventory |
|
11,795,370 |
|
|
11,326,017 |
Land held for sale |
|
23,831 |
|
|
42,254 |
Residential mortgage loans available-for-sale |
|
516,064 |
|
|
677,207 |
Investments in unconsolidated entities |
|
166,913 |
|
|
146,759 |
Other assets |
|
1,545,667 |
|
|
1,291,572 |
|
|
68,930 |
|
|
68,930 |
Intangible assets |
|
56,338 |
|
|
66,875 |
Deferred tax assets |
|
64,760 |
|
|
82,348 |
|
$ |
16,087,050 |
|
$ |
14,796,515 |
|
|
|
|
||
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
|
|
|
|
||
Liabilities: |
|
|
|
||
Accounts payable |
$ |
619,012 |
|
$ |
565,975 |
Customer deposits |
|
675,091 |
|
|
783,556 |
Deferred tax liabilities |
|
302,155 |
|
|
215,446 |
Accrued and other liabilities |
|
1,645,690 |
|
|
1,685,202 |
Financial Services debt |
|
499,627 |
|
|
586,711 |
Notes payable |
|
1,962,218 |
|
|
2,045,527 |
Total liabilities |
|
5,703,793 |
|
|
5,882,417 |
Shareholders' equity |
|
10,383,257 |
|
|
8,914,098 |
|
$ |
16,087,050 |
|
$ |
14,796,515 |
|
|||||||
Consolidated Statements of Cash Flows |
|||||||
( |
|||||||
(Unaudited) |
|||||||
|
|
||||||
|
Year Ended |
||||||
|
|
||||||
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
2,602,372 |
|
|
$ |
2,617,317 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
||||
Deferred income tax expense |
|
104,266 |
|
|
|
106,584 |
|
Land-related charges |
|
43,115 |
|
|
|
66,656 |
|
Gain on debt retirement |
|
(663 |
) |
|
|
— |
|
Depreciation and amortization |
|
80,824 |
|
|
|
70,918 |
|
Equity income from unconsolidated entities |
|
(4,561 |
) |
|
|
(50,680 |
) |
Distributions of earnings from unconsolidated entities |
|
4,564 |
|
|
|
49,151 |
|
Share-based compensation expense |
|
48,200 |
|
|
|
42,989 |
|
Other, net |
|
(758 |
) |
|
|
1,431 |
|
Increase (decrease) in cash due to: |
|
|
|
||||
Inventories |
|
(354,016 |
) |
|
|
(2,256,690 |
) |
Residential mortgage loans available-for-sale |
|
160,934 |
|
|
|
266,310 |
|
Other assets |
|
(290,631 |
) |
|
|
(140,761 |
) |
Accounts payable, accrued and other liabilities |
|
(196,884 |
) |
|
|
(104,759 |
) |
Net cash provided by operating activities |
|
2,196,762 |
|
|
|
668,466 |
|
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
|
(92,201 |
) |
|
|
(112,661 |
) |
Investments in unconsolidated entities |
|
(23,403 |
) |
|
|
(64,701 |
) |
Distributions of capital from unconsolidated entities |
|
3,265 |
|
|
|
21,704 |
|
Business acquisition |
|
— |
|
|
|
(10,400 |
) |
Other investing activities, net |
|
(16,756 |
) |
|
|
(5,685 |
) |
Net cash used in investing activities |
|
(129,095 |
) |
|
|
(171,743 |
) |
Cash flows from financing activities: |
|
|
|
||||
Repayments of notes payable |
|
(123,290 |
) |
|
|
(4,856 |
) |
Borrowings under revolving credit facility |
|
— |
|
|
|
2,869,000 |
|
Repayments under revolving credit facility |
|
— |
|
|
|
(2,869,000 |
) |
Financial Services borrowings (repayments), net |
|
(87,084 |
) |
|
|
(39,412 |
) |
Debt issuance costs |
|
(1,572 |
) |
|
|
(11,167 |
) |
Proceeds from liabilities related to consolidated inventory not owned |
|
129,656 |
|
|
|
58,729 |
|
Payments related to consolidated inventory not owned |
|
(76,303 |
) |
|
|
(5,915 |
) |
Share repurchases |
|
(1,000,000 |
) |
|
|
(1,074,673 |
) |
Cash paid for shares withheld for taxes |
|
(11,991 |
) |
|
|
(14,326 |
) |
Dividends paid |
|
(142,459 |
) |
|
|
(144,115 |
) |
Net cash used in financing activities |
|
(1,313,043 |
) |
|
|
(1,235,735 |
) |
Net increase (decrease) |
|
754,624 |
|
|
|
(739,012 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
1,094,553 |
|
|
|
1,833,565 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
1,849,177 |
|
|
$ |
1,094,553 |
|
|
|
|
|
||||
Supplemental Cash Flow Information: |
|
|
|
||||
Interest paid (capitalized), net |
$ |
10,786 |
|
|
$ |
1,797 |
|
Income taxes paid, net |
$ |
784,453 |
|
|
$ |
641,948 |
|
|
|||||||||||||||
Segment Data |
|||||||||||||||
( |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
HOMEBUILDING: |
|
|
|
|
|
|
|
||||||||
Home sale revenues |
$ |
4,165,231 |
|
|
$ |
4,961,040 |
|
|
$ |
15,598,707 |
|
|
$ |
15,548,119 |
|
Land sale and other revenues |
|
34,540 |
|
|
|
45,518 |
|
|
|
142,116 |
|
|
|
143,144 |
|
Total Homebuilding revenues |
|
4,199,771 |
|
|
|
5,006,558 |
|
|
|
15,740,823 |
|
|
|
15,691,263 |
|
|
|
|
|
|
|
|
|
||||||||
Home sale cost of revenues |
|
(2,961,920 |
) |
|
|
(3,503,137 |
) |
|
|
(11,030,206 |
) |
|
|
(10,867,879 |
) |
Land sale cost of revenues |
|
(32,139 |
) |
|
|
(29,936 |
) |
|
|
(124,607 |
) |
|
|
(119,906 |
) |
Selling, general, and administrative expenses |
|
(308,319 |
) |
|
|
(350,831 |
) |
|
|
(1,312,642 |
) |
|
|
(1,381,222 |
) |
Equity income from unconsolidated entities |
|
213 |
|
|
|
48,291 |
|
|
|
3,506 |
|
|
|
49,403 |
|
Gain on debt retirement |
|
301 |
|
|
|
— |
|
|
|
663 |
|
|
|
— |
|
Other income (expense), net |
|
5,066 |
|
|
|
(31,179 |
) |
|
|
38,538 |
|
|
|
(64,331 |
) |
Income before income taxes |
$ |
902,973 |
|
|
$ |
1,139,766 |
|
|
$ |
3,316,075 |
|
|
$ |
3,307,328 |
|
|
|
|
|
|
|
|
|
||||||||
FINANCIAL SERVICES: |
|
|
|
|
|
|
|
||||||||
Income before income taxes |
$ |
43,845 |
|
|
$ |
24,049 |
|
|
$ |
133,192 |
|
|
$ |
132,230 |
|
|
|
|
|
|
|
|
|
||||||||
CONSOLIDATED: |
|
|
|
|
|
|
|
||||||||
Income before income taxes |
$ |
946,818 |
|
|
$ |
1,163,815 |
|
|
$ |
3,449,267 |
|
|
$ |
3,439,558 |
|
|
|||||||||||
Segment Data, continued |
|||||||||||
( |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
|
|
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
|
|
|
|
|
|
||||
Home sale revenues |
$ |
4,165,231 |
|
$ |
4,961,040 |
|
$ |
15,598,707 |
|
$ |
15,548,119 |
|
|
|
|
|
|
|
|
||||
Closings - units |
|
|
|
|
|
|
|
||||
Northeast |
|
421 |
|
|
588 |
|
|
1,417 |
|
|
1,614 |
Southeast |
|
1,337 |
|
|
1,699 |
|
|
5,201 |
|
|
5,105 |
|
|
1,940 |
|
|
2,088 |
|
|
7,742 |
|
|
6,928 |
Midwest |
|
1,262 |
|
|
1,400 |
|
|
3,955 |
|
|
4,579 |
|
|
1,265 |
|
|
1,568 |
|
|
5,295 |
|
|
5,692 |
West |
|
1,390 |
|
|
1,505 |
|
|
4,993 |
|
|
5,193 |
|
|
7,615 |
|
|
8,848 |
|
|
28,603 |
|
|
29,111 |
Average selling price |
$ |
547 |
|
$ |
561 |
|
$ |
545 |
|
$ |
534 |
|
|
|
|
|
|
|
|
||||
Net new orders - units |
|
|
|
|
|
|
|
||||
Northeast |
|
349 |
|
|
254 |
|
|
1,510 |
|
|
1,300 |
Southeast |
|
1,264 |
|
|
819 |
|
|
5,541 |
|
|
4,535 |
|
|
1,507 |
|
|
1,241 |
|
|
6,893 |
|
|
6,139 |
Midwest |
|
871 |
|
|
581 |
|
|
4,297 |
|
|
3,241 |
|
|
1,073 |
|
|
664 |
|
|
5,143 |
|
|
4,382 |
West |
|
1,150 |
|
|
405 |
|
|
5,196 |
|
|
3,680 |
|
|
6,214 |
|
|
3,964 |
|
|
28,580 |
|
|
23,277 |
Net new orders - dollars |
$ |
3,359,733 |
|
$ |
2,146,813 |
|
$ |
15,244,353 |
|
$ |
13,589,392 |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||
|
|
|
|
|
2023 |
|
2022 |
||||
Unit backlog |
|
|
|
|
|
|
|
||||
Northeast |
|
|
|
|
|
567 |
|
|
474 |
||
Southeast |
|
|
|
|
|
2,246 |
|
|
1,906 |
||
|
|
|
|
|
|
3,792 |
|
|
4,641 |
||
Midwest |
|
|
|
|
|
1,692 |
|
|
1,350 |
||
|
|
|
|
|
|
1,637 |
|
|
1,789 |
||
West |
|
|
|
|
|
2,212 |
|
|
2,009 |
||
|
|
|
|
|
|
12,146 |
|
|
12,169 |
||
Dollars in backlog |
|
|
|
|
$ |
7,319,714 |
|
$ |
7,674,068 |
||
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment Data, continued |
|||||||||||||||
( |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
MORTGAGE ORIGINATIONS: |
|
|
|
|
|
|
|
||||||||
Origination volume |
|
4,657 |
|
|
|
5,192 |
|
|
|
17,427 |
|
|
|
18,186 |
|
Origination principal |
$ |
1,871,531 |
|
|
$ |
2,095,529 |
|
|
$ |
6,924,910 |
|
|
$ |
7,105,486 |
|
Capture rate |
|
84.6 |
% |
|
|
74.8 |
% |
|
|
81.6 |
% |
|
|
77.6 |
% |
Supplemental Data |
|||||||||||||||
( |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Interest in inventory, beginning of period |
$ |
140,010 |
|
|
$ |
143,669 |
|
|
$ |
137,262 |
|
|
$ |
160,756 |
|
Interest capitalized |
|
30,652 |
|
|
|
33,894 |
|
|
|
126,040 |
|
|
|
130,051 |
|
Interest expensed |
|
(31,584 |
) |
|
|
(40,301 |
) |
|
|
(124,224 |
) |
|
|
(153,545 |
) |
Interest in inventory, end of period |
$ |
139,078 |
|
|
$ |
137,262 |
|
|
$ |
139,078 |
|
|
$ |
137,262 |
|
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
This report contains information about our debt-to-capital ratios. These measures could be considered non-GAAP financial measures under the
The following table sets forth a reconciliation of the debt-to-capital ratios (
Debt-to-Capital Ratios |
||||||||
|
|
|
||||||
|
|
2023 |
|
2022 |
||||
Notes payable |
|
$ |
1,962,218 |
|
|
$ |
2,045,527 |
|
Shareholders' equity |
|
|
10,383,257 |
|
|
|
8,914,098 |
|
Total capital |
|
$ |
12,345,475 |
|
|
$ |
10,959,625 |
|
Debt-to-capital ratio |
|
|
15.9 |
% |
|
|
18.7 |
% |
|
|
|
|
|
||||
Notes payable |
|
$ |
1,962,218 |
|
|
$ |
2,045,527 |
|
Less: Total cash, cash equivalents, and restricted cash |
|
|
(1,849,177 |
) |
|
|
(1,094,553 |
) |
Total net debt |
|
$ |
113,041 |
|
|
$ |
950,974 |
|
Shareholders' equity |
|
|
10,383,257 |
|
|
|
8,914,098 |
|
Total net capital |
|
$ |
10,496,298 |
|
|
$ |
9,865,072 |
|
Net debt-to-capital ratio |
|
|
1.1 |
% |
|
|
9.6 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130357160/en/
Investors:
(404) 978-6434
jim.zeumer@pultegroup.com
Source: