PulteGroup : Quarterly Report

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	FORM 10-Q
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2019
	or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	Commission File Number 1-9804
	PULTEGROUP, INC.
	(Exact name of registrant as specified in its charter)
	Michigan	38-2766606
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
	3350 Peachtree Road NE, Suite 150
	Atlanta, Georgia	30326
	(Address of principal executive offices) (Zip Code)
	Registrant's telephone number, including area code:
	Registrant's telephone number, including area code:	404 978-6400

Securities registered pursuant to Section 12(b) of the Act:

		Name of each exchange on
Title of each class	Trading Symbol(s)	which registered
Common Shares, par value $0.01	PHM	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. Yes [X] NO [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
☒	☐	☐	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ No ☒

Number of common shares outstanding as of October 17, 2019: 270,999,901

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PULTEGROUP, INC.

TABLE OF CONTENTS

		Page
		No.
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements
	Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018	4
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018	5
	Consolidated Statements of Shareholders' Equity for the three and nine months ended September 30, 2019 and 2018	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4	Controls and Procedures	48
PART II	OTHER INFORMATION	49
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6	Exhibits	50
	Signatures	52

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
PULTEGROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000's omitted)
		September 30,			December 31,
		2019			2018
		(Unaudited)
ASSETS
Cash and equivalents	$	736,986		$	1,110,088
Restricted cash		31,658			23,612
Total cash, cash equivalents, and restricted cash		768,644			1,133,700
House and land inventory		7,830,059			7,253,353
Land held for sale		34,495			36,849
Residential mortgage loans available-for-sale		383,893			461,354
Investments in unconsolidated entities		62,182			54,590
Other assets		864,846			830,359
Intangible assets		128,592			127,192
Deferred tax assets, net		191,802			275,579
	$	10,264,513		$	10,172,976
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable	$	389,843	$	352,029
Customer deposits		333,672			254,624
Accrued and other liabilities		1,327,241			1,360,483
Income tax liabilities		38,624			11,580
Financial Services debt		249,360			348,412
Notes payable		2,744,181			3,028,066
		5,082,921			5,355,194
Shareholders' equity		5,181,592			4,817,782
	$	10,264,513		$	10,172,976

See accompanying Notes to Condensed Consolidated Financial Statements.

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PULTEGROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(000's omitted, except per share data)

(Unaudited)

		Three Months Ended			Nine Months Ended
		September 30,			September 30,
		2019			2018			2019			2018
Revenues:
Homebuilding
Home sale revenues	$	2,637,002		$	2,572,236		$	6,990,417		$	6,933,888
Land sale and other revenues		8,548			25,510			40,993			104,971
		2,645,550			2,597,746			7,031,410			7,038,859
Financial Services		64,815			51,620			164,634			150,322
Total revenues		2,710,365			2,649,366			7,196,044			7,189,181
Homebuilding Cost of Revenues:
Home sale cost of revenues		(2,028,622)			(1,954,160)			(5,369,568)			(5,276,232)
Land sale cost of revenues		(7,350)			(22,060)			(35,615)			(71,791)
		(2,035,972)			(1,976,220)			(5,405,183)			(5,348,023)
Financial Services expenses		(32,514)			(32,213)			(94,864)			(96,650)
Selling, general, and administrative expenses		(270,625)			(252,757)			(782,791)			(719,706)
Other expense, net		(5,108)			(3,488)			(9,581)			(6,753)
Income before income taxes		366,146			384,688			903,625			1,018,049
Income tax expense		(93,042)			(95,153)			(222,723)			(233,674)
Net income	$	273,104		$	289,535		$	680,902		$	784,375
Per share:
Basic earnings	$	0.99	$	1.01	$	2.44	$	2.72
Diluted earnings	$	0.99		$	1.01		$	2.44		$	2.71
Cash dividends declared
$	0.11	$	0.09	$	0.33	$	0.27
Number of shares used in calculation:
Basic		272,992			283,489			275,734			285,127
Effect of dilutive securities		640			1,183			858			1,301
Diluted		273,632			284,672			276,592			286,428

See accompanying Notes to Condensed Consolidated Financial Statements.

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PULTEGROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($000's omitted)

(Unaudited)

		Three Months Ended			Nine Months Ended
		September 30,			September 30,
		2019			2018			2019			2018
Net income	$	273,104		$	289,535		$	680,902		$	784,375
Other comprehensive income, net of tax:
Change in value of derivatives		25			25			75			75
Other comprehensive income		25			25			75			75
Comprehensive income	$	273,129		$	289,560		$	680,977		$	784,450

See accompanying Notes to Condensed Consolidated Financial Statements.

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