Pulte Homes Inc. (PHM, Financial) filed Quarterly Report for the period ended 2010-03-31.
Pulte Homes Inc. has a market cap of $4.81 billion; its shares were traded at around $12.59 with and P/S ratio of 1.2. PHM is in the portfolios of Arnold Schneider of Schneider Capital Management, John Keeley of Keeley Fund Management, Jim Simons of Renaissance Technologies LLC, Charles Brandes of Brandes Investment, Ron Baron of Baron Funds, Jeremy Grantham of GMO LLC.
Homebuilding gross profit margins from home sales improved to 13.0% for the three months ended March 31, 2010 compared with negative 59.0% for the same period in the prior year. We recorded land and community valuation adjustments of $4.5 million during the three months ended March 31, 2010 compared with $358.6 million during the corresponding prior year period. Excluding these land and community valuation adjustments, gross profit margins were significantly higher during the three months ended March 31, 2010 compared with the prior year period. This improvement continues the improvement we have seen in recent quarters and reflects a combination of factors, including shifts in the product and geographic mix of homes closed during the quarter, better alignment of our product offering with current market conditions, an improved pricing position due to a lower unsold inventory count per community, and our various initiatives to reduce the construction cost of our homes.
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 positive margin contributions of $4.0 million during the three months ended March 31, 2010, compared with negative margin contributions of $0.3 million during the three months ended March 31, 2009. These margin contributions included net realizable value adjustments related to land held for sale totaling $0.6 million in each period.
Equity in loss from unconsolidated entities was $0.1 million for the three months ended March 31, 2010, and $50.5 million in the three months ended March 31, 2009. The equity loss experienced during the three months ended March 31, 2010 included impairments related to investments in unconsolidated joint ventures totaling $1.9 million. There were impairments related to investments in unconsolidated joint ventures of $50.4 million for the three months ended March 31, 2009.
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 $0.5 million and $0.6 million for the three months ended March 31, 2010 and 2009, 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. Additionally, other income (expense), net includes certain lease exit costs and asset impairments of $1.4 million and $2.2 million for the three months ended March 31, 2010 and 2009, respectively.
The total purchase price related to approved land under option for use by our Homebuilding operations at future dates totaled $572.6 million at March 31, 2010. These land option agreements, which may be cancelled at our discretion and may extend over several years, are secured by deposits and pre-acquisition costs totaling $88.7 million, of which $2.1 million is refundable. This balance excludes contingent payment obligations which may or may not become actual obligations to us.
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Pulte Homes Inc. has a market cap of $4.81 billion; its shares were traded at around $12.59 with and P/S ratio of 1.2. PHM is in the portfolios of Arnold Schneider of Schneider Capital Management, John Keeley of Keeley Fund Management, Jim Simons of Renaissance Technologies LLC, Charles Brandes of Brandes Investment, Ron Baron of Baron Funds, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Home sale revenues for the three months ended March 31, 2010, which include $473.9 million related to Centex, were higher than those for the prior year period by $412.1 million, or 73%. The increase in home sale revenues for the three months ended March 31, 2010 compared with the prior year period was attributable to a 77% increase in unit settlements offset by a decrease of 2% in the average selling price. The increase in unit settlements was primarily attributable to the increase in active communities resulting from the Centex merger. Average selling prices decreased in each of our Homebuilding segments during the three months ended March 31, 2010 compared with the prior year period. This decrease in average selling price reflects a combination of factors but was primarily attributable to shifts in the product and geographic mix of homes closed during the period, including an increased concentration in the first-time buyer segment resulting from the Centex merger along with adjusting the product offering in certain communities to better align with current market conditions.Homebuilding gross profit margins from home sales improved to 13.0% for the three months ended March 31, 2010 compared with negative 59.0% for the same period in the prior year. We recorded land and community valuation adjustments of $4.5 million during the three months ended March 31, 2010 compared with $358.6 million during the corresponding prior year period. Excluding these land and community valuation adjustments, gross profit margins were significantly higher during the three months ended March 31, 2010 compared with the prior year period. This improvement continues the improvement we have seen in recent quarters and reflects a combination of factors, including shifts in the product and geographic mix of homes closed during the quarter, better alignment of our product offering with current market conditions, an improved pricing position due to a lower unsold inventory count per community, and our various initiatives to reduce the construction cost of our homes.
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 positive margin contributions of $4.0 million during the three months ended March 31, 2010, compared with negative margin contributions of $0.3 million during the three months ended March 31, 2009. These margin contributions included net realizable value adjustments related to land held for sale totaling $0.6 million in each period.
Equity in loss from unconsolidated entities was $0.1 million for the three months ended March 31, 2010, and $50.5 million in the three months ended March 31, 2009. The equity loss experienced during the three months ended March 31, 2010 included impairments related to investments in unconsolidated joint ventures totaling $1.9 million. There were impairments related to investments in unconsolidated joint ventures of $50.4 million for the three months ended March 31, 2009.
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 $0.5 million and $0.6 million for the three months ended March 31, 2010 and 2009, 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. Additionally, other income (expense), net includes certain lease exit costs and asset impairments of $1.4 million and $2.2 million for the three months ended March 31, 2010 and 2009, respectively.
The total purchase price related to approved land under option for use by our Homebuilding operations at future dates totaled $572.6 million at March 31, 2010. These land option agreements, which may be cancelled at our discretion and may extend over several years, are secured by deposits and pre-acquisition costs totaling $88.7 million, of which $2.1 million is refundable. This balance excludes contingent payment obligations which may or may not become actual obligations to us.
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