01—Abstract
Summary
Summary of the 10-K filed February 19, 2010. Cited figures are marked; the original filing is the authoritative source.
Pulte Homes, Inc. reported a 2009 net loss of $1,182,567 thousanda ($1.18 billion, or $3.94 per share) on consolidated revenues of $4.08 billion, compared with a net loss of $1.47 billion in 2008.
The results were driven by homebuilding losses before income taxes of $1.85 billionb, including land and community valuation adjustments of $751.2 million, goodwill impairments of $563.0 million, and transaction and integration costs related to the Centex merger totaling $123.7 million. Home sale revenues fell to $3.87 billion from $5.98 billion, with unit settlements down to 15,013 from 21,022. The company completed its acquisition of Centex on August 18, 2009, which added $1.1 billion of revenues for the post-merger period and brought $1.46 billion of goodwill at the merger date.
The balance sheet strengthened in liquidity terms. At December 31, 2009, cash and equivalents were $1.9 billionc, with no borrowings outstanding under the $750.0 million unsecured revolving credit facility, and senior notes totaled $4.3 billion. The debt-to-tangible-capital ratio was 57.3% against a covenant maximum of 60.0%.
The company was in compliance with its credit facility covenants at year end, though it noted that further market deterioration or additional land-related charges could affect compliance. The company also recorded an income tax receivable of $867.3 milliond from net operating loss carrybacks under the Worker, Homeownership, and Business Assistance Act of 2009, with refunds expected mainly in the first half of 2010. The filing describes a homebuilding industry still under pressure, with the company expecting difficult market conditions to persist for at least the near term.
Management cited foreclosures, high unemployment, the expiration of the homebuyer tax credit in April 2010, and the Federal Reserve's planned exit from mortgage-backed securities purchases as factors that could weigh on results. The company's dividend was discontinued in November 2008, and no dividends were declared in 2009.
02—Key points
Key Highlights
- Net loss of $1,182,567 thousand, or $3.94 per share, in 2009, versus a net loss of $1,473,113 thousand in 2008.
- Consolidated revenues of $4.08 billion in 2009, down from $6.26 billion in 2008; home sale revenues of $3.87 billion versus $5.98 billion.
- Centex merger completed August 18, 2009, with $1.46 billion of goodwill recorded at the merger date and $563.0 million of goodwill impairment recognized in the fourth quarter.
- Land and community valuation adjustments totaled $751.2 million in 2009, compared with $1.2 billion in 2008.
- Cash and equivalents of $1.9 billion and no borrowings under the $750.0 million revolving credit facility at December 31, 2009; senior notes totaled $4.3 billion.
- Income tax benefit of $792.6 million, driven by the Worker, Homeownership, and Business Assistance Act of 2009, with a $867.3 million federal tax receivable expected in the first half of 2010.
- Ending backlog of $1.6 billion (5,931 units) at December 31, 2009, up from $631.0 million (2,174 units) a year earlier, including Centex units.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 19, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $4.08B$6.26B | −34.8% |
| SG&A Expenses | $672.43M$814.51M | −17.4% |
| Interest Expense | $2.26M$2.91M | −22.2% |
| Net Income | -$1.18B-$1.47B | +19.7% |
| EPS (Basic) | $-3.94$-5.81 | +32.2% |
| EPS (Diluted) | $-3.94$-5.81 | +32.2% |
| Shares Outstanding (Basic) | 300.18M253.51M | +18.4% |
| Shares Outstanding (Diluted) | 300.18M253.51M | +18.4% |
05—Questions
Frequently Asked Questions
Why did Pulte report a large net loss in 2009?
The loss reflected lower home settlements and gross margins, with a negative gross profit margin from home sales of 10.5%. The company recorded $751.2 million of land and community valuation adjustments, a $563.0 million goodwill impairment, and $123.7 million of Centex merger transaction and integration costs in homebuilding.
How strong is Pulte's liquidity and debt position?
At December 31, 2009, the company held $1.9 billion of cash and equivalents and had no borrowings under its $750.0 million revolving credit facility, with $249.4 million available after $500.6 million of letters of credit. Senior notes totaled $4.3 billion, and the debt-to-tangible-capital ratio was 57.3% against a 60.0% maximum covenant.
What did the Centex acquisition add to Pulte's operations?
Centex became a wholly-owned subsidiary on August 18, 2009. For the period from August 19 to December 31, 2009, Centex contributed revenues of $1.1 billion and a net loss of $442.9 million, including the goodwill impairment. The filing also states that Centex added 435 active communities and 3,246 backlog units at year end.
When and how much tax cash does Pulte expect to receive?
The company recorded income taxes receivable of $867.3 million related to 2009 federal net operating loss carrybacks under the Worker, Homeownership, and Business Assistance Act of 2009. It expects to receive the majority of these refunds in the first half of 2010, including $193.0 million in January 2010.
Will Pulte pay dividends?
No dividends were declared in 2009. The Board discontinued the regular quarterly dividend on November 24, 2008, effective in the first quarter of 2009. The company had $102.3 million of remaining stock repurchase authorization at December 31, 2009, but no repurchases were made in 2009 under the publicly announced programs.
06—Continue