Pulte Homes Inc. (PHM) filed Quarterly Report for the period ended 2009-09-30.
Pulte Corporation is a publicly held holding company whose subsidiaries engage in the homebuilding and financial services businesses. The company's significant subsidiaries include Pulte Financial Companies Inc. Pulte Diversified Companies Inc. and other subsidiaries which are engaged in the homebuilding business. Pulte Homes Inc. has a market cap of $2.5 billion; its shares were traded at around $9.66 with and P/S ratio of 0.4.
Highlight of Business Operations:
Home sale revenues for the three and nine months ended September 30, 2009, which include $331.0 million related to Centex, were lower than those for the prior year by $455.0 million and $2.2 billion, or 30.2% and 49.1%, respectively. The decreases in home sale revenues for the three and nine months ended September 30, 2009 compared with the prior year periods were primarily attributable to 22.5% and 43.3% decreases, respectively, in unit settlements, combined with decreases in the average selling price of 9.9% and 10.1%, respectively. The decrease in average selling price in the three and nine months ended September 30, 2009, compared with the prior year periods, reflects a combination of factors, including changes in the product and geographic mix of homes closed during the periods as well as lower market selling prices and elevated sales incentives. Home sale revenues, unit settlements, and average selling prices decreased in each of our Homebuilding segments during the three and nine months ended September 30, 2009 compared with the prior year periods.
Homebuilding gross profit margins from home sales improved to negative 2.5% for the three months ended September 30, 2009 compared with negative 6.0% for the same period in the prior year. For the nine months ended September 30, 2009, Homebuilding gross profit margins were negative 19.0% compared with negative 11.7% for the same period in 2008. We recorded land and community valuation adjustments of $132.6 million and $600.4 million during the three and nine months ended September 30, 2009, respectively, compared with $249.9 million and $1.0 billion, respectively, during the corresponding prior year periods. Excluding these land and community valuation adjustments, gross profit margins were lower during the three and nine months ended September 30, 2009, compared with the prior year periods primarily as the result of lower average selling prices.
We continue to evaluate our existing land positions to ensure the most effective use of capital. Land sale revenues and their related gains or losses may vary significantly between periods, depending on the timing of land sales. Land sales had negative margin contributions of $9.5 million and $17.0 million during the three and nine months ended September 30, 2009, respectively, compared with negative margin contributions of $14.9 million and $121.0 million during the three and nine months ended September 30, 2008, respectively. These negative margin contributions included net realizable value adjustments related to land held for sale totaling $8.3 million and $16.2 million for the three and nine months ended September, 30, 2009, respectively, compared with $15.9 million and $125.1 million in the prior year periods.
Equity loss was $4.2 million and $57.2 million for the three and nine months ended September 30, 2009, respectively, and $2.7 million and $0.8 million in the three and nine months ended September 30, 2008, respectively. The equity loss experienced during the three and nine months ended September 30, 2009 included impairments related to investments in unconsolidated joint ventures totaling $5.8 million and $58.6 million, respectively. There were impairments related to investments in unconsolidated joint ventures of $1.4 million and $3.1 million for the three and nine months ended September 30, 2008, respectively.
Other income (expense), net includes the write-off (recovery) of deposits and pre-acquisition costs resulting from decisions not to pursue certain land acquisitions, which totaled $17.2 million and ($0.9) million for the three months ended September 30, 2009 and 2008, respectively, and $18.2 million and $19.4 million for the nine months ended September 30, 2009 and 2008, respectively. These write-offs vary in amount from period to period as we continue to evaluate potential land acquisitions for the most effective use of capital. For the nine months ended September 30, 2009, other income (expense), net also includes approximately $14.9 million related to the favorable resolution of certain matters arising from two prior land sale transactions. Additionally, other income (expense), net includes certain integration costs directly related to the Centex merger totaling $15.4 million for the three and nine months ended September 30, 2009, which consisted primarily of lease exit and related asset impairment costs.
The dollar value of net new orders increased $296.2 million and decreased $928.5 million for the three and nine months ended September 30, 2009, respectively, compared with the same periods in 2008. At September 30, 2009 we had 957 active communities, an increase of 52.6% from September 30, 2008. Centex contributed 488 active communities at September 30, 2009. Ending backlog, which represents orders for homes that have not yet closed, was 8,383 units at September 30, 2009 with a dollar value of $2.2 billion, increases of 42.4% and 28.6%, respectively, compared with September 30, 2008. Ending backlog for the period included 4,316 Centex units with a dollar value of $1.1 billion.
PHM is in the portfolios of Bill Miller of Legg Mason Value Trust, Charles Brandes of Brandes Investment, Ron Baron of Baron Funds.
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