PulteGroup Reports Fourth Quarter 2024 Financial Results

ATLANTA--(BUSINESS WIRE)--PulteGroup, Inc. (NYSE: PHM) announced today financial results for its fourth quarter ended December 31, 2024. For the quarter, the Company reported net income of $913 million, or $4.43 per share. Reported net income includes a pre-tax insurance benefit of $255 million, or $0.93 per share. In the prior year period, the Company reported net income of $711 million, or $3.28 per share, inclusive of a pre-tax insurance benefit of $65 million, or $0.23 per share. “PulteGroup’s strong fourth quarter financial results completed a record-setting year,” said PulteGroup President and CEO, Ryan Marshall. “For the full year, PulteGroup generated nearly $18 billion in revenues and net income of $3.1 billion, while generating a return on equity of 27.5%*. These results allowed us to invest $5.3 billion into our business, return $1.4 billion to our shareholders through stock repurchases and dividends, and retire $310 million of senior notes. “Despite Federal Reserve actions to lower short-term interest rates, mortgage interest rates remained elevated in the fourth quarter, which impacted buyer demand as homebuyers continue to face affordability challenges. The operational changes we have implemented in response to these conditions, including targeted sales incentives coupled with faster construction cycle times, have yielded a sales backlog and inventory in process that have us well-positioned for the upcoming spring selling season.” Fourth Quarter Results Home sale revenues in the fourth quarter increased 13% over the prior year to $4.7 billion. Higher revenues in the fourth quarter were driven by a 6% increase in closings to 8,103 homes. The average selling price of homes closed in the period was $581,000, an increase of 6% compared with $547,000 in the prior year period. The Company’s reported home sale gross margin in the fourth quarter was 27.5%, compared with 28.9% in the prior year period. Homebuilding SG&A expense for the fourth quarter was $196 million, or 4.2% of home sale revenues, compared with $308 million, or 7.4% in the prior year period. Reported SG&A expense reflects insurance benefits of $255 million and $65 million recorded in the fourth quarter of 2024 and 2023, respectively. The Company’s net new orders for the fourth quarter were 6,167 homes, which is consistent with net new orders of 6,214 homes in the prior year period. The value of net new orders in the quarter was $3.5 billion, or an increase of 4% over last year. Average community count for the fourth quarter was 960, which is up 4% from the prior year. The Company's financial services operations generated pre-tax income of $51 million, an increase of 16% over prior year pre-tax income of $44 million. Higher pre-tax income for the period reflects higher volumes and average selling prices in the Company’s homebuilding operations, coupled with a slightly higher mortgage capture rate of 86%, up from 85% last year. Fourth quarter pre-tax income for the Company increased 25% over the prior year period to $1.2 billion. Income tax expense for the fourth quarter was $269 million, or an effective tax rate of 22.8%. PulteGroup repurchased 2.5 million of its common shares in the fourth quarter for $320 million, or an average price of $129.90 per share. During 2024, the Company repurchased 10.1 million common shares, or 4.7% of shares outstanding, for $1.2 billion, or $119.21 per share. The Company ended the quarter with $1.7 billion of cash and a debt-to-capital ratio of 11.8%. In a separate release, the Company announced that its Board of Directors approved a $1.5 billion increase to the Company’s share repurchase authorization, bringing its remaining share repurchase authorization to $2.1 billion. A conference call discussing PulteGroup's fourth quarter 2024 results is scheduled for Thursday, January 30, 2025, at 8:30 a.m. Eastern Time. Interested investors can access the live webcast via PulteGroup's corporate website at www.pultegroupinc.com. * 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; rapidly changing technological developments including, but not limited to, the use of artificial intelligence in the homebuilding industry; 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 associated with the implementation of a new enterprise resource planning system; risks related to information technology failures, data security issues, and the effect of cybersecurity incidents and threats; the impact of negative publicity on sales; failure to retain key personnel; the impairment of our intangible assets; 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 December 31, 2023 for a further discussion of these and other risks and uncertainties applicable to our businesses. We undertake no duty to update any forward-looking statement, whether as a result of new information, future events or changes in our expectations. About PulteGroup PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America’s largest homebuilding companies with operations in more than 45 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes, American West and John Wieland Homes and Neighborhoods, 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’s purpose is building incredible places where people can live their dreams. For more information about PulteGroup, Inc. and PulteGroup brands, go to pultegroup.com; pulte.com; centex.com; delwebb.com; divosta.com; jwhomes.com; and americanwesthomes.com. Follow PulteGroup, Inc. on X: @PulteGroupNews. PulteGroup, Inc. Consolidated Results of Operations ($000's omitted, except per share data) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Revenues: Homebuilding Home sale revenues $ 4,707,540 $ 4,165,231 $ 17,318,521 $ 15,598,707 Land sale and other revenues 99,108 34,540 195,435 142,116 4,806,648 4,199,771 17,513,956 15,740,823 Financial Services 115,146 93,881 432,994 320,755 Total revenues 4,921,794 4,293,652 17,946,950 16,061,578 Homebuilding Cost of Revenues: Home sale cost of revenues (3,413,930 ) (2,961,920 ) (12,311,766 ) (11,030,206 ) Land sale and other cost of revenues (88,690 ) (32,139 ) (189,893 ) (124,607 ) (3,502,620 ) (2,994,059 ) (12,501,659 ) (11,154,813 ) Financial Services expenses (64,471 ) (50,036 ) (224,086 ) (187,280 ) Selling, general, and administrative expenses (195,640 ) (308,319 ) (1,321,276 ) (1,312,642 ) Equity income from unconsolidated entities, net 1,625 213 44,201 4,561 Other income, net 22,040 5,367 61,749 37,863 Income before income taxes 1,182,728 946,818 4,005,879 3,449,267 Income tax expense (269,489 ) (235,825 ) (922,617 ) (846,895 ) Net income $ 913,239 $ 710,993 $ 3,083,262 $ 2,602,372 Net income per share: Basic $ 4.47 $ 3.30 $ 14.82 $ 11.79 Diluted $ 4.43 $ 3.28 $ 14.69 $ 11.72 Cash dividends declared $ 0.22 $ 0.20 $ 0.82 $ 0.68 Number of shares used in calculation: Basic 204,339 214,399 208,107 219,958 Effect of dilutive securities 1,841 1,364 1,722 1,205 Diluted 206,180 215,763 209,829 221,163 PulteGroup, Inc. Condensed Consolidated Balance Sheets ($000's omitted) (Unaudited) December 31, 2024 December 31, 2023 ASSETS Cash and equivalents $ 1,613,327 $ 1,806,583 Restricted cash 40,353 42,594 Total cash, cash equivalents, and restricted cash 1,653,680 1,849,177 House and land inventory 12,665,813 11,795,370 Land held for sale 27,007 23,831 Residential mortgage loans available-for-sale 629,582 516,064 Investments in unconsolidated entities 215,416 166,913 Other assets 2,001,991 1,545,667 Goodwill 68,930 68,930 Intangible assets 46,303 56,338 Deferred tax assets 55,041 64,760 $ 17,363,763 $ 16,087,050 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Accounts payable $ 727,995 $ 619,012 Customer deposits 512,580 675,091 Deferred tax liabilities 443,566 302,155 Accrued and other liabilities 1,412,166 1,645,690 Financial Services debt 526,906 499,627 Notes payable 1,618,586 1,962,218 Total liabilities 5,241,799 5,703,793 Shareholders' equity 12,121,964 10,383,257 $ 17,363,763 $ 16,087,050 PulteGroup, Inc. Consolidated Statements of Cash Flows ($000's omitted) (Unaudited) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net income $ 3,083,262 $ 2,602,372 Adjustments to reconcile net income to net cash from operating activities: Deferred income tax expense 151,097 104,266 Land-related charges 34,572 43,115 Depreciation and amortization 89,162 80,824 Equity income from unconsolidated entities (44,201 ) (4,561 ) Distributions of earnings from unconsolidated entities 2,557 4,564 Share-based compensation expense 54,690 48,200 Other, net (13,460 ) (1,421 ) Increase (decrease) in cash due to: Inventories (787,475 ) (354,016 ) Residential mortgage loans available-for-sale (113,327 ) 160,934 Other assets (489,623 ) (290,631 ) Accounts payable, accrued and other liabilities (286,460 ) (196,884 ) Net cash provided by operating activities 1,680,794 2,196,762 Cash flows from investing activities: Capital expenditures (118,545 ) (92,201 ) Investments in unconsolidated entities (16,037 ) (23,403 ) Distributions of capital from unconsolidated entities 9,179 3,265 Other investing activities, net 30,927 (16,756 ) Net cash used in investing activities (94,476 ) (129,095 ) Cash flows from financing activities: Repayments of notes payable (355,826 ) (123,290 ) Financial Services borrowings (repayments), net 27,279 (87,084 ) Debt issuance costs (1,534 ) (1,572 ) Proceeds from liabilities related to consolidated inventory not owned 50,047 129,656 Payments related to consolidated inventory not owned (105,787 ) (76,303 ) Share repurchases (1,199,999 ) (1,000,000 ) Excise tax on share repurchases (9,691 ) — Cash paid for shares withheld for taxes (18,597 ) (11,991 ) Dividends paid (167,707 ) (142,459 ) Net cash used in financing activities (1,781,815 ) (1,313,043 ) Net increase (decrease) (195,497 ) 754,624 Cash, cash equivalents, and restricted cash at beginning of period 1,849,177 1,094,553 Cash, cash equivalents, and restricted cash at end of period $ 1,653,680 $ 1,849,177 Supplemental Cash Flow Information: Interest paid (capitalized), net $ 26,052 $ 10,786 Income taxes paid, net $ 739,680 $ 784,453 PulteGroup, Inc. Segment Data ($000's omitted) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 HOMEBUILDING: Home sale revenues $ 4,707,540 $ 4,165,231 $ 17,318,521 $ 15,598,707 Land sale and other revenues 99,108 34,540 195,435 142,116 Total Homebuilding revenues 4,806,648 4,199,771 17,513,956 15,740,823 Home sale cost of revenues (3,413,930 ) (2,961,920 ) (12,311,766 ) (11,030,206 ) Land sale cost of revenues (88,690 ) (32,139 ) (189,893 ) (124,607 ) Selling, general, and administrative expenses (195,640 ) (308,319 ) (1,321,276 ) (1,312,642 ) Equity income from unconsolidated entities 1,625 213 43,151 3,506 Other income, net 22,043 5,367 61,752 39,201 Income before income taxes $ 1,132,056 $ 902,973 $ 3,795,924 $ 3,316,075 FINANCIAL SERVICES: Income before income taxes $ 50,672 $ 43,845 $ 209,955 $ 133,192 CONSOLIDATED: Income before income taxes $ 1,182,728 $ 946,818 $ 4,005,879 $ 3,449,267 PulteGroup, Inc. Segment Data, continued ($000's omitted) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Home sale revenues $ 4,707,540 $ 4,165,231 $ 17,318,521 $ 15,598,707 Closings - units Northeast 464 421 1,518 1,417 Southeast 1,413 1,337 5,697 5,201 Florida 1,855 1,940 7,906 7,742 Midwest 1,370 1,262 4,750 3,955 Texas 1,167 1,265 5,452 5,295 West 1,834 1,390 5,896 4,993 8,103 7,615 31,219 28,603 Average selling price $ 581 $ 547 $ 555 $ 545 Net new orders - units Northeast 340 349 1,566 1,510 Southeast 1,233 1,264 5,363 5,541 Florida 1,510 1,507 6,909 6,893 Midwest 1,088 871 4,860 4,297 Texas 900 1,073 4,763 5,143 West 1,096 1,150 5,765 5,196 6,167 6,214 29,226 28,580 Net new orders - dollars $ 3,507,496 $ 3,359,733 $ 16,493,524 $ 15,244,353 December 31, 2024 2023 Unit backlog Northeast 615 567 Southeast 1,912 2,246 Florida 2,795 3,792 Midwest 1,802 1,692 Texas 948 1,637 West 2,081 2,212 10,153 12,146 Dollars in backlog $ 6,494,718 $ 7,319,714 PulteGroup, Inc. Segment Data, continued ($000's omitted) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 MORTGAGE ORIGINATIONS: Origination volume 5,328 4,657 19,770 17,427 Origination principal $ 2,342,489 $ 1,871,531 $ 8,340,836 $ 6,924,910 Capture rate 85.9 % 84.6 % 85.9 % 81.6 % Supplemental Data ($000's omitted) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Interest in inventory, beginning of period $ 146,097 $ 140,010 $ 139,078 $ 137,262 Interest capitalized 26,069 30,652 112,416 126,040 Interest expensed (32,206 ) (31,584 ) (111,534 ) (124,224 ) Interest in inventory, end of period $ 139,960 $ 139,078 $ 139,960 $ 139,078 PulteGroup, Inc. 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 SEC's rules and should be considered in addition to, rather than as a substitute for, comparable GAAP financial measures. We calculate total net debt by subtracting total cash, cash equivalents, and restricted cash from notes payable to present the amount of assets needed to satisfy the debt. We use the debt-to-capital and net debt-to-capital ratios as indicators of our overall leverage and believe they are useful financial measures in understanding the leverage employed in our operations. We believe that these measures provide investors relevant and useful information for evaluating the comparability of financial information presented and comparing our profitability and liquidity 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 these measures and any adjustments thereto before comparing our measures to those of such other companies. The following table sets forth a reconciliation of the debt-to-capital ratios ($000's omitted): Debt-to-Capital Ratios December 31, 2024 2023 Notes payable $ 1,618,586 $ 1,962,218 Shareholders' equity 12,121,964 10,383,257 Total capital $ 13,740,550 $ 12,345,475 Debt-to-capital ratio 11.8 % 15.9 % Notes payable $ 1,618,586 $ 1,962,218 Less: Total cash, cash equivalents, and restricted cash (1,653,680 ) (1,849,177 ) Total net debt $ (35,094 ) $ 113,041 Shareholders' equity 12,121,964 10,383,257 Total net capital $ 12,086,870 $ 10,496,298 Net debt-to-capital ratio (0.3 )% 1.1 %

PulteGroup Reports Fourth Quarter 2024 Financial Results

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