01—Abstract
Summary
Summary of the 10-K filed March 11, 2003. Cited figures are marked; the original filing is the authoritative source.
Pulte Homes, Inc. (PHM) reported record 2002 results, with revenues of $7.47 billiona and net income of $453.6 million, or $7.35 per diluted share, compared with $5.39 billion and $301.4 million in 2001.
Homebuilding pre-tax income rose to $724.1 millionb from $512.3 million, driven by Domestic Homebuilding settlements of 28,903 units (up from 22,915) at an average selling price of $242,000 and a gross margin of 20.1%. Financial Services pre-tax income increased to $66.7 million, while Corporate pre-tax loss widened to $62.0 million on higher interest costs tied to growing debt. The balance sheet expanded substantially: total assets reached $6.89 billion and shareholders' equity rose to $2.76 billion, while senior and subordinated notes totaled $1.91 billion.
At year-end the company held $613.2 millionc in cash, had no borrowings under its $570 million unsecured revolving credit facility, and reported domestic backlog of 10,605 units valued at about $2.9 billion. Net cash provided by operating activities was $162.2 million, after $418.8 million of cash used in 2001, as inventories continued to build.
Looking ahead, the company sold $300 milliond of 6.25% senior notes due 2013 in February 2003, with proceeds to retire debt due or called in 2003, and it expects its 2003 effective tax rate to be about 39.0%. Pulte also disclosed that it is pursuing approximately $80 million in after-tax damages from the U.S. government over a First Heights thrift-related contract claim, the amount of which remains unresolved.
02—Key points
Key Highlights
- Net income rose to $453.6 million ($7.35 diluted EPS) from $301.4 million ($5.99) in 2001.
- Total revenues reached $7.47 billion, up from $5.39 billion in 2001.
- Domestic settlements hit a record 28,903 units, with an average selling price of $242,000 versus $225,000 in 2001.
- Domestic backlog ended 2002 at 10,605 units valued at about $2.9 billion.
- Homebuilding pre-tax income increased to $724.1 million; Financial Services pre-tax income rose to $66.7 million.
- Total senior and subordinated notes were $1.91 billion, against $613.2 million of cash and no revolver borrowings at year-end.
- A $300 million 6.25% senior note offering in February 2003 was used to retire 2003 maturities and calls.
03—Questions
Frequently Asked Questions
How did Pulte Homes perform in 2002 compared with 2001?
Total revenues rose to $7.47 billion from $5.39 billion, and net income increased to $453.6 million from $301.4 million. Diluted earnings per share were $7.35 versus $5.99.
What drove the growth in homebuilding results?
The filing attributes growth to continued strong demand, the addition and expansion of Del Webb operations, and effective management of selling pace and price. Domestic settlements rose to 28,903 units from 22,915, and the average selling price increased to $242,000 from $225,000.
How is the company financed and what is its debt position?
At December 31, 2002, Pulte had $613.2 million of cash, $1.7 billion of unsecured senior notes, $260.7 million of senior subordinated notes, and no borrowings under its $570 million revolving credit facility. Its debt-to-total capitalization was about 41%, or about 32% net of cash.
What are the main legal and financing items that could affect future results?
Pulte is seeking approximately $80 million in after-tax damages from the U.S. government over breach of contract related to First Heights thrift tax benefits, though the amount the court will award is unclear. The company also sold $300 million of 6.25% senior notes in February 2003.
What did the company say about its outlook and capital returns?
The company expects its 2003 effective tax rate to be approximately 39.0%. Its board authorized a stock repurchase plan of up to $100 million in October 2002, and during 2002 it repurchased 100,000 shares for about $4.3 million.
04—Continue