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Pultegroup Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed February 27, 2004
Period End
December 31, 2003
Security
PHM
In the record · 2016–202610-K1110-Q338-K109

PHM filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 109 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · May ’17May ’17
  2. Leadership change8-K · Mar ’19Mar ’19
  3. Material agreement8-K · Jul ’21Jul ’21
  4. Material agreement8-K · Aug ’25Aug ’25

01—Abstract

Summary

Summary of the 10-K filed February 27, 2004. Cited figures are marked; the original filing is the authoritative source.

Pulte Homes, Inc. reported 2003 consolidated revenues of $9.05 billiona and net income of $624.6 million, or $4.97 per diluted share, compared with $453.6 million ($3.67 per diluted share) in 2002.

Homebuilding drove the results: Domestic Homebuilding settled a record 32,693 homes at an average selling price of $259,000, and pre-tax homebuilding income rose to $1.00 billionb from $724.1 million. Gross profit margin from home sales reached 20.6%, and the year-end domestic backlog grew to 13,952 units valued at approximately $4.1 billion. Financial Services pre-tax income was $68.8 million, with mortgage origination principal volume up 32% and a capture rate of 82.7%.

Balance sheet growth was substantial. House and land inventories rose to $5.53 billionc from $4.29 billion, and senior and subordinated notes totaled $2.15 billion. Operating cash flow was negative $301.8 million, reflecting heavy land investment, while the company issued $300 million of 6.25% senior notes due 2013 and $400 million of 6.375% senior notes due 2033 during 2003, and in January 2004 sold $500 million of 5.25% senior notes due 2014.

The company replaced its revolving credit facility with an $850 milliond facility expiring in 2008, and the quarterly dividend was raised 150% to $.05 per share. A two-for-one stock split took effect January 2, 2004.

The filing also discloses that the company is evaluating long-term strategic alternatives for its International Homebuilding operations in Mexico, Puerto Rico and Argentina. A Court of Federal Claims judgment in September 2003 awarded the Pulte Parties approximately $48.7 million, but the government and the Pulte Parties have appealed, and any gain will be recognized only upon final resolution.

02—Key points

Key Highlights

  1. Record 2003 settlements of 32,693 domestic homes, up from 28,903 in 2002, with average selling price rising to $259,000 from $242,000.
  2. Consolidated net income of $624.6 million ($4.97 diluted EPS) versus $453.6 million ($3.67) in 2002.
  3. Homebuilding pre-tax income of $1.00 billion, versus $724.1 million in 2002; gross margin from home sales of 20.6%.
  4. Domestic backlog of 13,952 homes valued at approximately $4.1 billion at December 31, 2003, up from 10,605 homes a year earlier.
  5. Net cash used in operating activities of $301.8 million, driven by inventory growth to $5.53 billion from $4.29 billion.
  6. Debt raised in 2003 included $300 million of 6.25% notes due 2013 and $400 million of 6.375% notes due 2033; a further $500 million of 5.25% notes due 2014 was sold in January 2004.
  7. International Homebuilding operations are under evaluation for long-term strategic alternatives; the company owns 63.8% of Pulte Mexico S. de R.L. de C.V.

03—Questions

Frequently Asked Questions

  1. How did Pulte Homes perform financially in 2003?

    Total revenues rose to $9.05 billion from $7.47 billion, and net income increased to $624.6 million from $453.6 million. Diluted earnings per share were $4.97, compared with $3.67 in 2002. Homebuilding pre-tax income increased to $1.00 billion, and Financial Services pre-tax income reached $68.8 million.

  2. What is the company's debt position and how is it financing growth?

    Senior and subordinated notes totaled $2.15 billion at year-end 2003, and the company stated its debt-to-total capitalization was 38.4% excluding collateralized debt (33.6% net of cash). During 2003 it issued $300 million of 6.25% notes due 2013 and $400 million of 6.375% notes due 2033, and in January 2004 it sold $500 million of 5.25% notes due 2014. It replaced its revolving credit facility with an $850 million facility expiring October 1, 2008, and had no borrowings under it at year-end.

  3. What risks or uncertainties does the filing identify?

    The filing cites interest rate changes, the availability of mortgage financing, competition, land and labor costs, weather, governmental regulation, changes in consumer confidence, and terrorist acts among its forward-looking risk factors. It also notes that the company is evaluating strategic alternatives for its International operations and that the $48.7 million Court of Federal Claims judgment is under appeal, so any gain will be recognized only upon final resolution.

  4. What is the outlook for the company's land position and backlog?

    At December 31, 2003, the company controlled approximately 257,000 lots, of which 120,000 were owned and 137,000 were under option agreements. Land options approved for purchase had a total purchase price of approximately $2.6 billion, and options pending approval were valued at $2.1 billion. Domestic backlog stood at 13,952 units valued at approximately $4.1 billion.

04—Continue

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