þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
MICHIGAN | 38-2766606 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
100 Bloomfield Hills Parkway, Suite 300 | ||
Bloomfield Hills, Michigan (Address of principal executive offices) |
48304 (Zip Code) |
2
June 30, | December 31, | |||||||
2006 | 2005 | |||||||
(Unaudited) | (Note) | |||||||
ASSETS |
||||||||
Cash and equivalents |
$ | 104,459 | $ | 1,002,268 | ||||
Unfunded settlements |
54,794 | 156,663 | ||||||
House and land inventory |
10,676,352 | 8,756,093 | ||||||
Land held for sale |
397,818 | 257,724 | ||||||
Land, not owned, under option agreements |
61,526 | 76,671 | ||||||
Residential mortgage loans available-for-sale |
521,508 | 1,038,506 | ||||||
Investments in unconsolidated entities |
222,228 | 301,613 | ||||||
Goodwill |
377,040 | 307,693 | ||||||
Intangible assets, net |
123,079 | 127,204 | ||||||
Other assets |
1,084,889 | 1,023,739 | ||||||
Total assets |
$ | 13,623,693 | $ | 13,048,174 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Liabilities: |
||||||||
Accounts payable, including book overdrafts of
$416,346 and $405,411 in 2006 and 2005, respectively |
$ | 938,718 | $ | 789,399 | ||||
Customer deposits |
423,046 | 392,041 | ||||||
Accrued and other liabilities |
1,157,354 | 1,402,620 | ||||||
Unsecured short-term borrowings |
614,500 | | ||||||
Collateralized short-term debt, recourse solely to
applicable non-guarantor subsidiary assets |
477,028 | 893,001 | ||||||
Income taxes |
81,721 | 219,504 | ||||||
Deferred income tax liability |
9,479 | 7,740 | ||||||
Senior notes and unsubordinated notes |
3,537,237 | 3,386,527 | ||||||
Total liabilities |
7,239,083 | 7,090,832 | ||||||
Shareholders equity |
6,384,610 | 5,957,342 | ||||||
$ | 13,623,693 | $ | 13,048,174 | |||||
3
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenues: |
||||||||||||||||
Homebuilding |
$ | 3,318,055 | $ | 3,213,430 | $ | 6,232,807 | $ | 5,699,724 | ||||||||
Financial services |
40,467 | 36,258 | 85,324 | 66,534 | ||||||||||||
Other non-operating |
445 | 1,257 | 3,412 | 2,505 | ||||||||||||
Total revenues |
3,358,967 | 3,250,945 | 6,321,543 | 5,768,763 | ||||||||||||
Expenses: |
||||||||||||||||
Homebuilding, principally cost of sales |
2,935,896 | 2,737,434 | 5,474,281 | 4,877,630 | ||||||||||||
Financial Services |
25,536 | 21,174 | 52,776 | 42,692 | ||||||||||||
Other non-operating, net |
8,598 | 30,363 | 20,948 | 54,367 | ||||||||||||
Total expenses |
2,970,030 | 2,788,971 | 5,548,005 | 4,974,689 | ||||||||||||
Other income: |
||||||||||||||||
Gain on sale of equity investment |
| | 31,635 | 620 | ||||||||||||
Equity income (loss) |
(1,212 | ) | 23,848 | 96 | 38,025 | |||||||||||
Income from continuing operations before income
taxes |
387,725 | 485,822 | 805,269 | 832,719 | ||||||||||||
Income taxes |
143,873 | 180,635 | 298,772 | 309,985 | ||||||||||||
Income from continuing operations |
243,852 | 305,187 | 506,497 | 522,734 | ||||||||||||
Loss from discontinued operations |
(833 | ) | (1,476 | ) | (833 | ) | (781 | ) | ||||||||
Net income |
$ | 243,019 | $ | 303,711 | $ | 505,664 | $ | 521,953 | ||||||||
Per share data: |
||||||||||||||||
Basic: |
||||||||||||||||
Income from continuing operations |
$ | .97 | $ | 1.19 | $ | 2.00 | $ | 2.05 | ||||||||
Loss from discontinued operations |
| (.01 | ) | | | |||||||||||
Net income |
$ | .96 | $ | 1.19 | $ | 2.00 | $ | 2.04 | ||||||||
Assuming dilution: |
||||||||||||||||
Income from continuing operations |
$ | .94 | $ | 1.16 | $ | 1.95 | $ | 1.99 | ||||||||
Loss from discontinued operations |
| (.01 | ) | | | |||||||||||
Net income |
$ | .94 | $ | 1.15 | $ | 1.95 | $ | 1.98 | ||||||||
Cash dividends declared |
$ | .04 | $ | .025 | $ | .08 | $ | .05 | ||||||||
Number of shares used in calculation: |
||||||||||||||||
Basic: |
||||||||||||||||
Weighted-average common shares outstanding |
252,618 | 255,874 | 253,148 | 255,373 | ||||||||||||
Assuming dilution: |
||||||||||||||||
Effect of dilutive securities stock options and
restricted stock grants |
6,329 | 7,803 | 6,704 | 7,880 | ||||||||||||
Adjusted weighted-average common shares
and effect of dilutive securities |
258,947 | 263,677 | 259,852 | 263,253 | ||||||||||||
4
Accumulated | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||
Additional | Comprehensive | |||||||||||||||||||||||
Common | Paid-in | Unearned | Income | Retained | ||||||||||||||||||||
Stock | Capital | Compensation | (Loss) | Earnings | Total | |||||||||||||||||||
Shareholders
Equity,
December 31, 2005
|
$ | 2,570 | $ | 1,209,148 | $ | | $ | (5,496 | ) | $ | 4,751,120 | $ | 5,957,342 | |||||||||||
Stock option exercise, including tax benefit
of $3,333 |
2 | 6,783 | | | | 6,785 | ||||||||||||||||||
Restricted stock award |
7 | (7 | ) | | | | | |||||||||||||||||
Cash dividends declared $.08 per share |
| | | | (20,494 | ) | (20,494 | ) | ||||||||||||||||
Stock repurchases |
(29 | ) | (13,841 | ) | | | (85,744 | ) | (99,614 | ) | ||||||||||||||
Stock-based compensation |
| 33,476 | | | | 33,476 | ||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||
Net income |
| | | | 505,664 | 505,664 | ||||||||||||||||||
Change in fair value of derivatives |
| | | 226 | | 226 | ||||||||||||||||||
Foreign currency translation adjustments |
| | | 1,225 | | 1,225 | ||||||||||||||||||
Total comprehensive income |
507,115 | |||||||||||||||||||||||
Shareholders Equity, June 30, 2006 |
$ | 2,550 | $ | 1,235,559 | $ | | $ | (4,045 | ) | $ | 5,150,546 | $ | 6,384,610 | |||||||||||
Shareholders
Equity,
December 31, 2004
|
$ | 2,558 | $ | 1,114,739 | $ | (44 | ) | $ | (14,380 | ) | $ | 3,419,401 | $ | 4,522,274 | ||||||||||
Stock option exercise, including tax benefit
of $24,143 |
24 | 47,290 | | | 47,314 | |||||||||||||||||||
Restricted stock award |
8 | (8 | ) | | | | | |||||||||||||||||
Cash dividends declared -$.05 per share |
| | | | (12,963 | ) | (12,963 | ) | ||||||||||||||||
Stock repurchases |
(6 | ) | (2,515 | ) | | | (18,598 | ) | (21,119 | ) | ||||||||||||||
Stock-based compensation |
| 23,144 | | | | 23,144 | ||||||||||||||||||
Restricted stock award amortization |
| | 44 | | | 44 | ||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||
Net income |
| | | | 521,953 | 521,953 | ||||||||||||||||||
Change in fair value of derivatives |
| | | (324 | ) | | (324 | ) | ||||||||||||||||
Foreign currency translation adjustments |
| | | 4,163 | | 4,163 | ||||||||||||||||||
Total comprehensive income |
525,792 | |||||||||||||||||||||||
Shareholders Equity, June 30, 2005 |
$ | 2,584 | $ | 1,182,650 | $ | | $ | (10,541 | ) | $ | 3,909,793 | $ | 5,084,486 | |||||||||||
5
For The Six Months Ended | ||||||||
June 30, | ||||||||
2006 | 2005 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 505,664 | $ | 521,953 | ||||
Adjustments
to reconcile net income to net cash flows |
||||||||
Provided by (used in) operating activities: |
||||||||
Write-down of land and deposits and pre-acquisition costs |
67,326 | 6,505 | ||||||
Gain on sale of equity investments |
(31,635 | ) | (620 | ) | ||||
Amortization and depreciation |
37,987 | 28,698 | ||||||
Stock-based compensation expense |
33,476 | 23,188 | ||||||
Deferred income taxes |
(55 | ) | 30,834 | |||||
Distributions in excess of (less than) earnings of affiliates |
5,216 | (2,760 | ) | |||||
Other, net |
1,490 | 1,267 | ||||||
Increase (decrease) in cash due to: |
||||||||
Inventories |
(2,104,010 | ) | (1,308,685 | ) | ||||
Residential mortgage loans available-for-sale |
516,998 | 177,527 | ||||||
Other assets |
112,491 | 1,570 | ||||||
Accounts payable, accrued and other liabilities |
(63,955 | ) | 201,165 | |||||
Income taxes |
(134,451 | ) | (21,577 | ) | ||||
Net cash used in operating activities |
(1,053,458 | ) | (340,935 | ) | ||||
Cash flows from investing activities: |
||||||||
Distributions from unconsolidated entities |
31,336 | 123,180 | ||||||
Investments in unconsolidated entities |
(20,744 | ) | (92,042 | ) | ||||
Investment in subsidiaries, net of cash acquired |
(65,779 | ) | (31,172 | ) | ||||
Proceeds from sale of subsidiaries |
| 3,000 | ||||||
Proceeds from sale of investments |
49,216 | 8,366 | ||||||
Proceeds from sale of fixed assets |
534 | 3,251 | ||||||
Capital expenditures |
(54,393 | ) | (37,666 | ) | ||||
Net cash used in investing activities |
(59,830 | ) | (23,083 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from borrowings |
764,500 | 672,011 | ||||||
Repayment of borrowings |
(433,492 | ) | (161,608 | ) | ||||
Excess tax benefits from share-based awards |
1,794 | | ||||||
Issuance of common stock |
3,452 | 23,171 | ||||||
Stock repurchases |
(99,614 | ) | (21,119 | ) | ||||
Dividends paid |
(20,494 | ) | (12,963 | ) | ||||
Net cash provided by financing activities |
216,146 | 499,492 | ||||||
Effect of exchange rate changes on cash and equivalents |
(667 | ) | 210 | |||||
Net increase (decrease) in cash and equivalents |
(897,809 | ) | 135,684 | |||||
Cash and equivalents at beginning of period |
1,002,268 | 308,118 | ||||||
Cash and equivalents at end of period |
$ | 104,459 | $ | 443,802 | ||||
Supplemental disclosure of cash flow informationcash paid during
the period for: |
||||||||
Interest, net of amounts capitalized |
$ | 6,257 | $ | 18,308 | ||||
Income taxes |
$ | 432,183 | $ | 301,903 | ||||
6
1. | Basis of presentation and significant accounting policies | |
Basis of presentation | ||
The consolidated financial statements include the accounts of Pulte Homes, Inc. and all of its direct and indirect subsidiaries (the Company) and variable interest entities in which the Company is deemed to be the primary beneficiary. The direct subsidiaries of Pulte Homes, Inc. include Pulte Diversified Companies, Inc., Del Webb Corporation (Del Webb) and other subsidiaries that are engaged in the homebuilding business. Pulte Diversified Companies, Inc.s operating subsidiaries include Pulte Home Corporation, Pulte International Corporation (International) and other subsidiaries that are engaged in the homebuilding business. Pulte Diversified Companies, Inc.s former thrift subsidiary, First Heights Holding Corp, LLC (First Heights) is classified as a discontinued operation. The Company also has a mortgage banking company, Pulte Mortgage LLC (Pulte Mortgage), which is a subsidiary of Pulte Home Corporation. | ||
Certain amounts previously reported in the 2005 financial statements and notes thereto were reclassified to conform to the 2006 presentation. The Mexico homebuilding operations, which were sold in December 2005, have been presented as discontinued operations in the Companys Consolidated Statement of Operations. Additionally, all share and per share amounts have been restated to retroactively reflect the Companys two-for-one stock split effected September 1, 2005. | ||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. These financial statements should be read in conjunction with the Companys consolidated financial statements and footnotes thereto included in the Companys annual report on Form 10-K for the year ended December 31, 2005. | ||
Land, not owned, under option agreements | ||
In the ordinary course of business, the Company enters into land option agreements in order to procure land for the construction of homes in the future. Pursuant to these land option agreements, the Company will provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. Under FASB Interpretation No. 46, Consolidation of Variable Interest Entities, as amended by FIN 46-R issued in December 2003 (collectively referred to as FIN 46), if the entity holding the land under option is a variable interest entity, the Companys deposit represents a variable interest in that entity. Creditors of the variable interest entities have no recourse against the Company. | ||
In applying the provisions of FIN 46, the Company evaluated all land option agreements and determined that the Company was subject to a majority of the expected losses or entitled to receive a majority of the expected residual returns under a limited number of these agreements. As the primary beneficiary under these agreements, the Company is required to consolidate variable interest entities at fair value. At June 30, 2006 and December 31, 2005, the Company classified $61.5 million and $76.7 million, respectively, as land, not owned, under option agreements on the balance sheet, representing the fair value of land under contract, including deposits of $10.9 million and $13.4 million, respectively. The corresponding liability has been classified within accounts payable, accrued and other liabilities on the balance sheet. | ||
Land option agreements that did not require consolidation under FIN 46 at June 30, 2006 and December 31, 2005, had a total purchase price of $6.8 billion and $7.5 billion, respectively. In connection with these agreements, the Company had refundable and non-refundable deposits and pre-acquisition costs of $477.4 million and $431.4 million, included in other assets at June 30, 2006 and December 31, 2005, respectively. |
7
1. | Basis of presentation and significant accounting policies (continued) | |
Allowance for warranties | ||
Home purchasers are provided with warranties against certain building defects. The specific terms and conditions of those warranties vary geographically. Most warranties cover different aspects of the homes construction and operating systems for a period of up to ten years. The Company estimates the costs to be incurred under these warranties and records a liability for the amount of such costs at the time product revenue is recognized. Factors that affect the Companys warranty liability include the number of homes sold, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. | ||
Changes to the Companys allowance for warranties are as follows ($000s omitted): |
Six Months Ended | ||||||||
June 30, | ||||||||
2006 | 2005 | |||||||
Allowance for warranties at beginning of period |
$ | 112,297 | $ | 83,397 | ||||
Warranty reserves provided |
73,152 | 59,535 | ||||||
Payments and other adjustments |
(82,440 | ) | (59,309 | ) | ||||
Allowance for warranties at end of period |
$ | 103,009 | $ | 83,623 | ||||
8
1. | Basis of presentation and significant accounting policies (continued) |
Three Months Ended | Six Months Ended | |||||||
June 30, 2005 | June 30, 2005 | |||||||
Net income, as reported |
$ | 303,711 | $ | 521,953 | ||||
Add: Stock-based employee compensation expense
included in reported net income, net of related tax
effects |
2,761 | 8,016 | ||||||
Deduct: Total stock-based employee compensation
expense determined under fair value based method for
all awards, net of related tax effects ($000s omitted) |
(2,930 | ) | (8,313 | ) | ||||
Pro forma net income |
$ | 303,542 | $ | 521,656 | ||||
Earnings per share: |
||||||||
Basic-as reported |
$ | 1.19 | $ | 2.04 | ||||
Basic-pro forma |
$ | 1.19 | $ | 2.04 | ||||
Diluted-as reported |
$ | 1.15 | $ | 1.98 | ||||
Diluted-pro forma |
$ | 1.15 | $ | 1.98 | ||||
Weighted-average assumptions | ||||||||
Six Months Ended June 30, | ||||||||
2006 | 2005 | |||||||
Expected life of options in years |
5.2 | 6.1 - 6.2 | ||||||
Expected stock price volatility |
34 | % | 35.3 - 36.0 | % | ||||
Expected dividend yield |
0.4 | % | 0.23 -0.27 | % | ||||
Risk-free interest rate |
5.1 | % | 3.9% - 4.2 | % | ||||
Fair value per option granted |
$ | 14.47 - $14.85 | $ | 12.89 - $15.95 |
9
1. | Basis of presentation and significant accounting policies (continued) | |
Stock-based compensation (continued) | ||
A summary of the status of the Companys stock options for the six months ended June 30, 2006 is presented below (000s omitted, except per share data): |
Weighted-Average | Weighted-Average | |||||||||||||||
Per Share | Remaining | Aggregate | ||||||||||||||
Shares | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||||
Outstanding at December 31, 2005 |
16,850 | $ | 19 | |||||||||||||
Granted |
33 | 39 | ||||||||||||||
Exercised |
(242 | ) | (14 | ) | ||||||||||||
Forfeited |
(264 | ) | (29 | ) | ||||||||||||
Outstanding at June 30, 2006 |
16,377 | $ | 19 | 6.6 years | $ | 189,989 | ||||||||||
Options exercisable at
June 30, 2006 |
9,700 | $ | 12 | 5.5 years | $ | 162,564 | ||||||||||
Weighted-Average | ||||||||
Per Share | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Nonvested at December 31, 2005 |
3,023 | $ | 31.44 | |||||
Granted |
759 | $ | 39.02 | |||||
Vested |
(215 | ) | $ | 15.60 | ||||
Forfeited |
(119 | ) | $ | 33.32 | ||||
Nonvested at June 30, 2006 |
3,448 | $ | 34.03 | |||||
10
1. | Basis of presentation and significant accounting policies (continued) | |
New accounting pronouncements | ||
In June 2006, the FASB issued FASB Interpretation No. 48, An Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in income taxes recognized in a companys financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 reflects the benefit recognition approach, where a tax benefit is recognized when it is more likely than not to be sustained based on the technical merits of the position. This Interpretation is effective for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of FIN No. 48 on its consolidated financial statements. | ||
In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which provides an approach to simplify efforts to obtain hedge-like (offset) accounting. This new Statement amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. SFAS No. 156 is effective for all separately recognized servicing assets and liabilities as of the beginning of an entitys fiscal year that begins after September 15, 2006, with earlier adoption permitted in certain circumstances. Due to the short period of time the Companys servicing rights are held, generally less than four months, the Company does not expect SFAS No. 156 will have a significant impact on its consolidated financial statements. | ||
The FASB has revised its guidance on SFAS No. 133 Implementation Issues as of March 2006. Several Implementation Issues were revised to reflect the issuance of SFAS No. 155, Accounting for Certain Hybrid Financial Instruments an Amendment of FASB Statements No. 133 and 140, in February 2006. SFAS No. 155 allows any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities to be carried at fair value in its entirety, with changes in fair value recognized in earnings. In addition, SFAS No. 155 requires that beneficial interests in securitized financial assets be analyzed to determine whether they are freestanding derivatives or contain an embedded derivative. SFAS No. 155 also eliminates a prior restriction on the types of passive derivatives that a qualifying special purpose entity is permitted to hold. SFAS No. 155 is applicable to new or modified financial instruments in fiscal years beginning after September 15, 2006, though the provisions related to fair value accounting for hybrid financial instruments can also be applied to existing instruments. The Company does not expect SFAS No. 155 will have a significant impact on its consolidated financial statements. | ||
In December 2004, the FASB issued Staff Position 109-1, Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004 (FSP 109-1). The American Jobs Creation Act, which was signed into law in October 2004, provides a 3% tax deduction on qualified domestic production activities income for 2005 and 2006. When fully phased-in, the deduction will be 9% of the lesser of qualified production activities income or taxable income. Based on the guidance provided by FSP 109-1, this deduction was accounted for as a special deduction under SFAS No. 109 and reduced tax expense. Tax benefits resulting from this deduction have resulted in a reduction in the Companys federal income tax rate. | ||
2. | Segment information | |
The Companys operations are classified into two reportable segments, Homebuilding and Financial Services. | ||
The Companys Homebuilding segment is engaged in the acquisition and development of land primarily for residential purposes within the continental United States and the construction of housing on such land targeted for first-time, first and second move-up, and active adult home buyers. The Companys Homebuilding segment is the aggregation of its related operating segments. | ||
The Companys Financial Services segment consists principally of mortgage banking and title operations conducted through Pulte Mortgage and other Company subsidiaries. |
11
Operating Data by Segment ($000s omitted) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revenues: |
||||||||||||||||
Homebuilding |
$ | 3,318,055 | $ | 3,213,430 | $ | 6,232,807 | $ | 5,699,724 | ||||||||
Financial services |
40,467 | 36,258 | 85,324 | 66,534 | ||||||||||||
Total segment revenues |
3,358,522 | 3,249,688 | 6,318,131 | 5,766,258 | ||||||||||||
Cost of sales (a): |
||||||||||||||||
Homebuilding |
2,640,503 | 2,458,880 | 4,887,612 | 4,336,107 | ||||||||||||
Selling, general and administrative: |
||||||||||||||||
Homebuilding |
265,404 | 267,327 | 550,153 | 521,758 | ||||||||||||
Financial services |
20,690 | 17,905 | 42,629 | 36,622 | ||||||||||||
Total segment selling, general and administrative |
286,094 | 285,232 | 592,782 | 558,380 | ||||||||||||
Interest: |
||||||||||||||||
Financial services |
4,846 | 3,269 | 10,147 | 6,070 | ||||||||||||
Other expense, net: |
||||||||||||||||
Homebuilding |
29,989 | 11,227 | 36,516 | 19,765 | ||||||||||||
Total costs and expenses |
2,961,432 | 2,758,608 | 5,527,057 | 4,920,322 | ||||||||||||
Gain on sale of equity investment: |
||||||||||||||||
Financial services |
| | 31,635 | 620 | ||||||||||||
Equity income (loss): |
||||||||||||||||
Homebuilding |
(1,337 | ) | 23,406 | (121 | ) | 36,877 | ||||||||||
Financial services |
125 | 442 | 217 | 1,148 | ||||||||||||
Total equity income |
(1,212 | ) | 23,848 | 96 | 38,025 | |||||||||||
Income before income taxes: |
||||||||||||||||
Homebuilding |
380,822 | 499,402 | 758,405 | 858,971 | ||||||||||||
Financial services |
15,056 | 15,526 | 64,400 | 25,610 | ||||||||||||
Total segment income before income taxes |
395,878 | 514,928 | 822,805 | 884,581 | ||||||||||||
Other non-operating expenses, net |
(8,153 | ) | (29,106 | ) | (17,536 | ) | (51,862 | ) | ||||||||
Consolidated income before income taxes |
$ | 387,725 | $ | 485,822 | 805,269 | $ | 832,719 | |||||||||
(a) | Homebuilding interest expense, which represents the amortization of capitalized interest, of $55.9 million and $41.1 million for the three months ended June 30, 2006 and 2005 and $97.1 million and $71.6 million for the six months ended June 30, 2006 and 2005, has been included as part of homebuilding cost of sales. |
12
2. | Segment information (continued) |
Financial | ||||||||||||
Homebuilding | Services | Total | ||||||||||
At June 30, 2006: |
||||||||||||
Inventory |
$ | 10,676,352 | $ | | $ | 10,676,352 | ||||||
Assets: |
||||||||||||
Segment |
12,921,377 | 591,893 | 13,513,270 | |||||||||
Other non-operating |
| | 110,423 | |||||||||
Consolidated assets |
$ | 13,623,693 | ||||||||||
At December 31, 2005: |
||||||||||||
Inventory |
$ | 8,756,093 | $ | | $ | 8,756,093 | ||||||
Assets: |
||||||||||||
Segment |
11,757,925 | 1,052,578 | 12,810,503 | |||||||||
Other non-operating |
| | 237,671 | |||||||||
Consolidated assets |
$ | 13,048,174 | ||||||||||
3. | Inventory | |
Major components of the Companys inventory were as follows ($000s omitted): |
June 30, | December 31, | |||||||
2006 | 2005 | |||||||
Homes under construction |
$ | 4,464,413 | 3,136,708 | |||||
Land under development |
5,532,265 | 4,844,913 | ||||||
Land held for future development |
679,674 | 774,472 | ||||||
Total |
$ | 10,676,352 | $ | 8,756,093 | ||||
4. | Investments in unconsolidated entities | |
The Company participates in a number of joint ventures with independent third parties. Many of these joint ventures purchase, develop and/or sell land and homes in the United States and Puerto Rico. If additional capital infusions are required and approved, the Company would need to contribute its pro-rata portion of those capital needs in order not to dilute its ownership in the joint ventures. | ||
At June 30, 2006 and December 31, 2005, aggregate outstanding debt of unconsolidated joint ventures was $908.5 million and $882.2 million, respectively. At June 30, 2006 and December 31, 2005, the Companys proportionate share of its joint venture debt was approximately $307.2 million and $293.8 million, respectively. At June 30, 2006, the Company provided limited recourse guarantees for its proportionate share of joint venture debt of $307.2 million while the Company provided limited recourse debt guarantees of approximately $288.2 million at December 31, 2005. Accordingly, the Company may be liable, on a contingent basis, through limited guarantees with respect to a portion of the secured land acquisition and development debt. However, the Company would not be liable other than in instances of fraud, misrepresentation or other bad faith actions by the Company, unless the joint venture was unable to perform its contractual borrowing obligations. As of June 30, 2006, the Company does not anticipate the Company will incur any significant costs under these guarantees. | ||
For the six months ended June 30, 2006, the Company made additional capital contributions to these joint ventures totaling approximately $20.7 million and received capital and earnings distributions from these entities totaling approximately $36.6 million. At June 30, 2006 and December 31, 2005, the Company had approximately $222.2 million and $301.6 million, respectively, invested in these joint ventures. These investments are included in the assets of the Companys Homebuilding segment and are primarily accounted for under the equity method. |
13
5. | Acquisitions and divestitures | |
In February 2006, Pulte Mortgage sold its investment in Hipotecaria Su Casita (Su Casita), a Mexico-based mortgage banking company. Remaining shareholders of Su Casita, who exercised their right of first refusal to acquire the shares, purchased Pulte Mortgages 16.7% interest for net proceeds of approximately $49.2 million. As a result of this transaction, the Company recognized a pre-tax gain of approximately $31.6 million ($19.9 million after-tax) for the three months ended March 31, 2006. During February 2005, 25% of the Companys investment in the capital stock of Su Casita was redeemed for a pre-tax gain of approximately $620 thousand. | ||
In January 2006, the Company exercised its option and acquired the remaining 50% interest in an entity that supplies and installs basic building components and operating systems. The Companys initial investment was made in January 2004 to secure a dedicated building supply trade base for its construction activities in Arizona and Nevada. The aggregate stepped purchase price exceeded the preliminary estimated fair value of the underlying assets acquired and liabilities assumed by approximately $69 million, which was recorded as goodwill. The Company accounted for its initial 50% investment under the equity method. Since January 2006, the Company has consolidated this wholly-owned subsidiary in its financial statements. | ||
In December 2005, the Company sold substantially all of its Mexico homebuilding operations. For the three and six months ended June 30, 2005, the Mexico operations have been presented as discontinued operations. | ||
In January 2005, the Company sold all of its Argentina operations, as reflected in the Companys consolidated statements of cash flows for the six months ended June 30, 2005. The Argentina operations were presented as discontinued operations in 2004. | ||
6. | Senior notes and unsubordinated notes | |
In May 2006, the Company sold $150 million of 7.375% senior notes, which mature on June 1, 2046, and are guaranteed by Pulte Homes, Inc. and certain of its 100%-owned subsidiaries. These notes are unsecured and rank equally with all of the Companys other unsecured and unsubordinated indebtedness. The notes are redeemable at any time on or after June 1, 2011, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest thereon to the redemption date. Proceeds from the sale were used to repay the indebtedness of the Companys revolving credit facility and for general corporate purposes, including continued investment in the companys business. | ||
7. | Shareholders equity | |
Pursuant to the two $100 million stock repurchase programs authorized by our Board of Directors in October 2002 and 2005, and the $200 million stock repurchase authorization in February 2006 (for a total stock repurchase authorization of $400 million), the Company has repurchased a total of 8,987,600 shares for a total of $277.8 million. At June 30, 2006, the Company had remaining authorization to purchase common stock aggregating $122.2 million. | ||
Accumulated other comprehensive income (loss) | ||
The accumulated balances related to each component of other comprehensive income (loss) are as follows ($000s omitted): |
June 30, | December 31, | |||||||
2006 | 2005 | |||||||
Foreign currency translation adjustments: |
||||||||
Mexico |
$ | (361 | ) | $ | (1,586 | ) | ||
Fair value of derivatives, net of income taxes
of $2,258 in 2006 and $2,397 in 2005 |
(3,684 | ) | (3,910 | ) | ||||
$ | (4,045 | ) | $ | (5,496 | ) | |||
14
8. | Supplemental Guarantor information | |
At June 30, 2006, Pulte Homes, Inc. had the following outstanding senior note obligations: (1) $400 million, 4.875% due 2009, (2) $200 million, 8.125%, due 2011, (3) $499 million, 7.875%, due 2011, (4) $300 million, 6.25%, due 2013, (5) $500 million, 5.25%, due 2014, (6) $350 million, 5.2%, due 2015, (7) $150 million, 7.625%, due 2017, (8) $300 million, 7.875%, due 2032, (9) $400 million, 6.375%, due 2033, (10) $300 million, 6%, due 2035, and (11) $150 million, 7.375%, due 2046. Such obligations to pay principal, premium (if any), and interest are guaranteed jointly and severally on a senior basis by Pulte Homes, Inc.s 100%-owned Homebuilding subsidiaries (collectively, the Guarantors). Such guarantees are full and unconditional. | ||
Supplemental consolidating financial information of the Company, including such information for the Guarantors, is presented below. Investments in subsidiaries are presented using the equity method of accounting. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups. |
15
Unconsolidated | ||||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Consolidated | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Pulte Homes, Inc. | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and equivalents |
$ | | $ | 65,157 | $ | 39,302 | $ | | $ | 104,459 | ||||||||||
Unfunded settlements |
| 51,954 | 2,840 | | 54,794 | |||||||||||||||
House and land inventory |
| 10,664,216 | 12,136 | | 10,676,352 | |||||||||||||||
Land held for sale |
| 397,818 | | | 397,818 | |||||||||||||||
Land, not owned, under option
agreements |
| 61,526 | | | 61,526 | |||||||||||||||
Residential mortgage loans
available-for-sale |
| | 521,508 | | 521,508 | |||||||||||||||
Investments in unconsolidated entities |
1,448 | 202,933 | 17,847 | | 222,228 | |||||||||||||||
Goodwill |
| 376,340 | 700 | | 377,040 | |||||||||||||||
Intangible assets, net |
| 123,079 | | | 123,079 | |||||||||||||||
Other assets |
47,903 | 951,478 | 85,508 | | 1,084,889 | |||||||||||||||
Investment in subsidiaries |
11,991,124 | 77,356 | 3,639,517 | (15,707,997 | ) | | ||||||||||||||
$ | 12,040,475 | $ | 12,971,857 | $ | 4,319,358 | $ | (15,707,997 | $ | 13,623,693 | |||||||||||
LIABILITIES AND
SHAREHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Accounts payable, accrued and other
liabilities |
$ | 192,809 | $ | 2,114,249 | $ | 221,539 | $ | | $ | 2,528,597 | ||||||||||
Unsecured short-term borrowings |
614,500 | | | 614,500 | ||||||||||||||||
Collateralized short-term debt, recourse
solely to applicable non-guarantor
subsidiary assets |
| | 477,028 | | 477,028 | |||||||||||||||
Income taxes |
81,721 | | | | 81,721 | |||||||||||||||
Senior notes and unsubordinated notes |
3,537,237 | | | | 3,537,237 | |||||||||||||||
Advances (receivable)
payable subsidiaries |
1,229,598 | (1,168,116 | ) | (61,482 | ) | | | |||||||||||||
Total liabilities |
5,655,865 | 946,133 | 637,085 | | 7,239,083 | |||||||||||||||
Shareholders equity |
6,384,610 | 12,025,724 | 3,682,273 | (15,707,997 | ) | 6,384,610 | ||||||||||||||
$ | 12,040,475 | $ | 12,971,857 | $ | 4,319,358 | $ | (15,707,997 | ) | $ | 13,623,693 | ||||||||||
16
Unconsolidated | ||||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Consolidated | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Pulte Homes, Inc. | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and equivalents |
$ | $ | 839,764 | $ | 162,504 | $ | | $ | 1,002,268 | |||||||||||
Unfunded settlements |
| 226,417 | (69,754 | ) | | 156,663 | ||||||||||||||
House and land inventory |
| 8,742,573 | 13,520 | | 8,756,093 | |||||||||||||||
Land held for sale |
| 257,724 | | | 257,724 | |||||||||||||||
Land, not owned, under option agreements |
| 76,671 | | | 76,671 | |||||||||||||||
Residential mortgage loans available-for-sale |
| | 1,038,506 | | 1,038,506 | |||||||||||||||
Investments in unconsolidated entities |
1,448 | 264,257 | 35,908 | | 301,613 | |||||||||||||||
Goodwill |
| 306,993 | 700 | | 307,693 | |||||||||||||||
Intangible assets, net |
| 127,204 | | | 127,204 | |||||||||||||||
Other assets |
41,873 | 870,238 | 111,628 | | 1,023,739 | |||||||||||||||
Investment in subsidiaries |
11,154,107 | 88,972 | 3,142,458 | (14,385,537 | ) | | ||||||||||||||
$ | 11,197,428 | $ | 11,800,813 | $ | 4,435,470 | $ | (14,385,537 | ) | $ | 13,048,174 | ||||||||||
LIABILITIES AND
SHAREHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Accounts payable, accrued and other
liabilities |
$ | 190,640 | $ | 2,161,257 | $ | 239,903 | $ | | $ | 2,591,800 | ||||||||||
Collateralized short-term debt, recourse
solely to applicable non-guarantor
subsidiary assets |
| | 893,001 | | 893,001 | |||||||||||||||
Income taxes |
219,504 | | | | 219,504 | |||||||||||||||
Senior notes and unsubordinated notes |
3,386,527 | | | | 3,386,527 | |||||||||||||||
Advances (receivable) payable
- subsidiaries |
1,443,415 | (1,550,745 | ) | 107,330 | | | ||||||||||||||
Total liabilities |
5,240,086 | 610,512 | 1,240,234 | | 7,090,832 | |||||||||||||||
Shareholders equity |
5,957,342 | 11,190,301 | 3,195,236 | (14,385,537 | ) | 5,957,342 | ||||||||||||||
$ | 11,197,428 | $ | 11,800,813 | $ | 4,435,470 | $ | (14,385,537 | ) | $ | 13,048,174 | ||||||||||
17
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Homebuilding |
$ | | $ | 3,318,055 | $ | | $ | | $ | 3,318,055 | ||||||||||
Financial services |
| 6,826 | 33,641 | | 40,467 | |||||||||||||||
Other non-operating |
37 | (42 | ) | 450 | | 445 | ||||||||||||||
Total revenues |
37 | 3,324,839 | 34,091 | | 3,358,967 | |||||||||||||||
Expenses: |
||||||||||||||||||||
Homebuilding: |
||||||||||||||||||||
Cost of sales |
| 2,640,503 | | | 2,640,503 | |||||||||||||||
Selling, general and administrative and
other expense |
8,344 | 287,315 | (266 | ) | | 295,393 | ||||||||||||||
Financial Services, principally interest |
761 | 2,306 | 22,469 | | 25,536 | |||||||||||||||
Other non-operating expenses, net |
20,009 | (8,447 | ) | (2,964 | ) | | 8,598 | |||||||||||||
Intercompany interest |
40,623 | (40,623 | ) | | | | ||||||||||||||
Total expenses |
69,737 | 2,881,054 | 19,239 | | 2,970,030 | |||||||||||||||
Other Income: |
||||||||||||||||||||
Equity income |
| (1,773 | ) | 561 | | (1,212 | ) | |||||||||||||
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries |
(69,700 | ) | 442,012 | 15,413 | | 387,725 | ||||||||||||||
Income taxes (benefit) |
(24,790 | ) | 163,564 | 5,099 | | 143,873 | ||||||||||||||
Income (loss) from continuing operations
before equity in income of subsidiaries |
(44,910 | ) | 278,448 | 10,314 | | 243,852 | ||||||||||||||
Income (loss) from discontinued
operations |
| (833 | ) | | (833 | ) | ||||||||||||||
Income (loss) before equity in income of
subsidiaries |
(44,910 | ) | 278,448 | 9,481 | | 243,019 | ||||||||||||||
Equity in income (loss) of subsidiaries: |
||||||||||||||||||||
Continuing operations |
288,762 | 6,959 | 98,298 | (394,019 | ) | | ||||||||||||||
Discontinued operations |
(833 | ) | | | 833 | | ||||||||||||||
287,929 | 6,959 | 98,298 | (393,186 | ) | | |||||||||||||||
Net income |
$ | 243,019 | $ | 285,407 | $ | 107,779 | $ | (393,186 | ) | $ | 243,019 | |||||||||
18
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Homebuilding |
$ | | $ | 6,232,807 | $ | | $ | | $ | 6,232,807 | ||||||||||
Financial services |
| 12,681 | 72,643 | | 85,324 | |||||||||||||||
Other non-operating |
76 | 1,948 | 1,388 | | 3,412 | |||||||||||||||
Total revenues |
76 | 6,247,436 | 74,031 | | 6,321,543 | |||||||||||||||
Expenses: |
||||||||||||||||||||
Homebuilding: |
||||||||||||||||||||
Cost of sales |
| 4,887,612 | | | 4,887,612 | |||||||||||||||
Selling, general and administrative and
other expense |
16,117 | 572,337 | (1,785 | ) | | 586,669 | ||||||||||||||
Financial Services, principally interest |
1,520 | 4,650 | 46,606 | | 52,776 | |||||||||||||||
Other non-operating expenses, net |
40,465 | (15,262 | ) | (4,255 | ) | | 20,948 | |||||||||||||
Intercompany interest |
80,307 | (80,307 | ) | | | | ||||||||||||||
Total expenses |
138,409 | 5,369,030 | 40,566 | | 5,548,005 | |||||||||||||||
Other Income: |
||||||||||||||||||||
Gain on sale of equity investment |
| | 31,635 | | 31,635 | |||||||||||||||
Equity income |
| (801 | ) | 897 | | 96 | ||||||||||||||
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries |
(138,333 | ) | 877,605 | 65,997 | | 805,269 | ||||||||||||||
Income taxes (benefit) |
(51,315 | ) | 325,627 | 24,460 | | 298,772 | ||||||||||||||
Income (loss) from continuing operations
before equity in income of subsidiaries |
(87,018 | ) | 551,978 | 41,537 | | 506,497 | ||||||||||||||
Income (loss) from discontinued
operations |
| | (833 | ) | | (833 | ) | |||||||||||||
Income (loss) before equity in income of
subsidiaries |
(87,018 | ) | 551,978 | 40,704 | | 505,664 | ||||||||||||||
Equity in income (loss) of subsidiaries: |
||||||||||||||||||||
Continuing operations |
593,515 | 35,827 | 195,136 | (824,478 | ) | | ||||||||||||||
Discontinued operations |
(833 | ) | | | 833 | | ||||||||||||||
592,682 | 35,827 | 195,136 | (823,645 | ) | | |||||||||||||||
Net income |
$ | 505,664 | $ | 587,805 | $ | 235,840 | $ | (823,645 | ) | $ | 505,664 | |||||||||
19
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Homebuilding |
$ | | $ | 3,213,430 | $ | | $ | | $ | 3,213,430 | ||||||||||
Financial services |
| 6,404 | 29,854 | | 36,258 | |||||||||||||||
Other non-operating |
12 | 1,198 | 47 | | 1,257 | |||||||||||||||
Total revenues |
12 | 3,221,032 | 29,901 | | 3,250,945 | |||||||||||||||
Expenses: |
||||||||||||||||||||
Homebuilding: |
||||||||||||||||||||
Cost of sales |
| 2,458,880 | | | 2,458,880 | |||||||||||||||
Selling, general and administrative and
other expense |
4,660 | 275,278 | (1,384 | ) | | 278,554 | ||||||||||||||
Financial Services, principally interest |
(258 | ) | 2,251 | 19,181 | | 21,174 | ||||||||||||||
Other non-operating expenses, net |
35,208 | (2,128 | ) | (2,717 | ) | | 30,363 | |||||||||||||
Intercompany interest |
44,499 | (44,499 | ) | | | | ||||||||||||||
Total expenses |
84,109 | 2,689,782 | 15,080 | | 2,788,971 | |||||||||||||||
Other Income: |
||||||||||||||||||||
Equity income (loss) |
| 21,999 | 1,849 | | 23,848 | |||||||||||||||
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries |
(84,097 | ) | 553,249 | 16,670 | | 485,822 | ||||||||||||||
Income taxes (benefit) |
(31,811 | ) | 207,143 | 5,303 | | 180,635 | ||||||||||||||
Income (loss) from continuing operations
before equity in income of subsidiaries |
(52,286 | ) | 346,106 | 11,367 | | 305,187 | ||||||||||||||
Income (loss) from discontinued
operations |
(42 | ) | | (1,434 | ) | | (1,476 | ) | ||||||||||||
Income (loss) before equity in income
of subsidiaries |
(52,328 | ) | 346,106 | 9,933 | | 303,711 | ||||||||||||||
Equity in income (loss) of subsidiaries: |
||||||||||||||||||||
Continuing operations |
357,473 | 7,244 | 110,609 | (475,326 | ) | | ||||||||||||||
Discontinued operations |
(1,434 | ) | | | 1,434 | | ||||||||||||||
356,039 | 7,244 | 110,609 | (473,892 | ) | | |||||||||||||||
Net income |
$ | 303,711 | $ | 353,350 | $ | 120,542 | $ | (473,892 | ) | $ | 303,711 | |||||||||
20
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Revenues: |
||||||||||||||||||||
Homebuilding |
$ | | $ | 5,699,724 | $ | | $ | | $ | 5,699,724 | ||||||||||
Financial services |
| 12,143 | 54,391 | | 66,534 | |||||||||||||||
Other non-operating |
70 | 2,255 | 180 | | 2,505 | |||||||||||||||
Total revenues |
70 | 5,714,122 | 54,571 | | 5,768,763 | |||||||||||||||
Expenses: |
||||||||||||||||||||
Homebuilding: |
||||||||||||||||||||
Cost of sales |
| 4,336,107 | | | 4,336,107 | |||||||||||||||
Selling, general and administrative and
other expense |
8,843 | 533,258 | (578 | ) | | 541,523 | ||||||||||||||
Financial services |
1,039 | 4,185 | 37,468 | | 42,692 | |||||||||||||||
Other non-operating expenses, net |
66,275 | (7,044 | ) | (4,864 | ) | | 54,367 | |||||||||||||
Intercompany interest |
87,289 | (87,289 | ) | | | | ||||||||||||||
Total expenses |
163,446 | 4,779,217 | 32,026 | | 4,974,689 | |||||||||||||||
Other Income: |
||||||||||||||||||||
Gain on sale of equity investment |
| | 620 | | 620 | |||||||||||||||
Equity income |
| 34,651 | 3,374 | | 38,025 | |||||||||||||||
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries |
(163,376 | ) | 969,556 | 26,539 | | 832,719 | ||||||||||||||
Income taxes (benefit) |
(61,129 | ) | 361,676 | 9,438 | | 309,985 | ||||||||||||||
Income (loss) from continuing operations
before equity in income of subsidiaries |
(102,247 | ) | 607,880 | 17,101 | | 522,734 | ||||||||||||||
Income (loss) from discontinued
operations |
(106 | ) | | (675 | ) | | (781 | ) | ||||||||||||
Income (loss) before equity in income
of subsidiaries |
(102,353 | ) | 607,880 | 16,426 | | 521,953 | ||||||||||||||
Equity in income (loss) of subsidiaries: |
||||||||||||||||||||
Continuing operations |
624,981 | 11,025 | 161,291 | (797,297 | ) | | ||||||||||||||
Discontinued operations |
(675 | ) | | | 675 | | ||||||||||||||
624,306 | 11,025 | 161,291 | (796,622 | ) | | |||||||||||||||
Net income |
$ | 521,953 | $ | 618,905 | $ | 177,717 | $ | (796,622 | ) | $ | 521,953 | |||||||||
21
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net income |
$ | 505,664 | $ | 587,805 | $ | 235,840 | $ | (823,645 | ) | $ | 505,664 | |||||||||
Adjustments to reconcile net income
to net cash flows provided by
(used in) operating activities: |
||||||||||||||||||||
Equity in income of subsidiaries |
(592,682 | ) | (35,827 | ) | (195,136 | ) | 823,645 | | ||||||||||||
Write-down of land and deposits
and pre-acquisition costs |
| 67,326 | | | 67,326 | |||||||||||||||
Gain on sale of equity investments |
| | (31,635 | ) | | (31,635 | ) | |||||||||||||
Amortization and depreciation |
| 33,791 | 4,196 | | 37,987 | |||||||||||||||
Stock-based compensation expense |
33,476 | | | | 33,476 | |||||||||||||||
Deferred income taxes |
3,481 | | (3,536 | ) | | (55 | ) | |||||||||||||
Distributions in excess of
earnings of affiliates |
| 2,382 | 2,834 | | 5,216 | |||||||||||||||
Other, net |
710 | 983 | (203 | ) | | 1,490 | ||||||||||||||
Increase (decrease) in cash due to: |
||||||||||||||||||||
Inventory |
| (2,105,395 | ) | 1,385 | | (2,104,010 | ) | |||||||||||||
Residential mortgage loans
available-for-sale |
| | 516,998 | | 516,998 | |||||||||||||||
Other assets |
(6,029 | ) | 164,736 | (46,216 | ) | | 112,491 | |||||||||||||
Accounts payable, accrued
and other liabilities |
(1,999 | ) | (43,343 | ) | (18,613 | ) | | (63,955 | ) | |||||||||||
Income taxes |
(301,819 | ) | 163,564 | 3,804 | | (134,451 | ) | |||||||||||||
Net cash provided by (used in) operating
activities |
(359,198 | ) | (1,163,978 | ) | 469,718 | | (1,053,458 | ) | ||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Distributions from unconsolidated
entities |
| 31,336 | | | 31,336 | |||||||||||||||
Investments in unconsolidated
entities |
| (20,744 | ) | | | (20,744 | ) | |||||||||||||
Dividends received from subsidiaries |
| 51,000 | 28 | (51,028 | ) | | ||||||||||||||
Investment in subsidiaries |
(247,066 | ) | (68,739 | ) | (224,303 | ) | 474,329 | (65,779 | ) | |||||||||||
Proceeds from sale of investments |
| | 49,216 | | 49,216 | |||||||||||||||
Proceeds from sale of fixed assets |
| 533 | 1 | | 534 | |||||||||||||||
Capital expenditures |
| (50,069 | ) | (4,324 | ) | | (54,393 | ) | ||||||||||||
Net cash provided by (used in) investing
activities |
(247,066 | ) | (56,683 | ) | (179,382 | ) | 423,301 | (59,830 | ) | |||||||||||
22
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds from borrowings |
764,500 | | | | 764,500 | |||||||||||||||
Repayment of borrowings |
| (17,519 | ) | (415,973 | ) | | (433,492 | ) | ||||||||||||
Capital contributions from parent |
| 246,828 | 227,501 | (474,329 | ) | | ||||||||||||||
Advances (to) from affiliates |
(43,374 | ) | 216,745 | (173,371 | ) | | | |||||||||||||
Excess tax benefits from share-based
awards |
1,794 | | | | 1,794 | |||||||||||||||
Issuance of common stock |
3,452 | | | | 3,452 | |||||||||||||||
Stock repurchases |
(99,614 | ) | | | | (99,614 | ) | |||||||||||||
Dividends paid |
(20,494 | ) | | (51,028 | ) | 51,028 | (20,494 | ) | ||||||||||||
Net cash provided by (used in)
financing activities |
606,264 | 446,054 | (412,871 | ) | (423,301 | ) | 216,146 | |||||||||||||
Effect of exchange rate changes on
cash and equivalents |
| | (667 | ) | | (667 | ) | |||||||||||||
Net increase (decrease) in cash and
equivalents |
| (774,607 | ) | (123,202 | ) | | (897,809 | ) | ||||||||||||
Cash and equivalents at beginning of
period |
| 839,764 | 162,504 | | 1,002,268 | |||||||||||||||
Cash and equivalents at end of period |
$ | | $ | 65,157 | $ | 39,302 | $ | | $ | 104,459 | ||||||||||
23
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net income |
$ | 521,953 | $ | 618,905 | $ | 177,717 | $ | (796,622 | ) | $ | 521,953 | |||||||||
Adjustments to reconcile net income
to net cash flows provided by
(used in) operating activities: |
||||||||||||||||||||
Equity in income of subsidiaries |
(624,306 | ) | (11,025 | ) | (161,291 | ) | 796,622 | | ||||||||||||
Write-down of land and deposits of
pre-acquisition costs |
| 6,505 | | | 6,505 | |||||||||||||||
Gain on sale of equity investments |
| | (620 | ) | | (620 | ) | |||||||||||||
Amortization and depreciation |
| 24,469 | 4,229 | | 28,698 | |||||||||||||||
Stock-based compensation expense |
23,188 | | | | 23,188 | |||||||||||||||
Deferred income taxes |
34,028 | (3 | ) | (3,191 | ) | | 30,834 | |||||||||||||
Distributions in excess of (less than)
earnings of affiliates |
| 147 | (2,907 | ) | | (2,760 | ) | |||||||||||||
Other, net |
705 | 240 | 322 | | 1,267 | |||||||||||||||
Increase (decrease) in cash due to: |
||||||||||||||||||||
Inventory |
| (1,310,099 | ) | 1,414 | | (1,308,685 | ) | |||||||||||||
Residential mortgage loans
available-for-sale |
| | 177,527 | | 177,527 | |||||||||||||||
Other assets |
(11,522 | ) | 15,405 | (2,313 | ) | | 1,570 | |||||||||||||
Accounts payable, accrued
and other liabilities |
15,098 | 189,974 | (3,907 | ) | | 201,165 | ||||||||||||||
Income taxes |
(235,578 | ) | 207,279 | 6,722 | | (21,577 | ) | |||||||||||||
Net cash provided by (used in) operating
activities |
(276,434 | ) | (258,203 | ) | 193,702 | | (340,935 | ) | ||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Distributions from unconsolidated
entities |
| 122,480 | 700 | | 123,180 | |||||||||||||||
Investments in unconsolidated entities |
| (92,042 | ) | | | (92,042 | ) | |||||||||||||
Dividends received from subsidiaries |
1,362 | 18,000 | | (19,362 | ) | | ||||||||||||||
Investment in subsidiaries |
(36,217 | ) | (1,106 | ) | (31,172 | ) | 37,323 | (31,172 | ) | |||||||||||
Proceeds from the sale of subsidiaries |
| | 3,000 | | 3,000 | |||||||||||||||
Proceeds from sales of investments |
| | 8,366 | | 8,366 | |||||||||||||||
Proceeds from sales of fixed assets |
| 3,033 | 218 | | 3,251 | |||||||||||||||
Capital expenditures |
| (32,037 | ) | (5,629 | ) | | (37,666 | ) | ||||||||||||
Net cash provided by (used in) investing
activities |
(34,855 | ) | 18,328 | (24,517 | ) | 17,961 | (23,083 | ) | ||||||||||||
24
Unconsolidated | Consolidated | |||||||||||||||||||
Pulte | Guarantor | Non-Guarantor | Eliminating | Pulte | ||||||||||||||||
Homes, Inc. | Subsidiaries | Subsidiaries | Entries | Homes, Inc. | ||||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds from borrowings |
648,557 | 23,454 | | | 672,011 | |||||||||||||||
Repayment of borrowings |
| | (161,608 | ) | | (161,608 | ) | |||||||||||||
Capital contributions from parent |
| 7,943 | 29,380 | (37,323 | ) | | ||||||||||||||
Advances (to) from affiliates |
(326,357 | ) | 441,254 | (114,897 | ) | | | |||||||||||||
Issuance of common stock |
23,171 | | | | 23,171 | |||||||||||||||
Stock repurchases |
(21,119 | ) | | | | (21,119 | ) | |||||||||||||
Dividends paid |
(12,963 | ) | (1,362 | ) | (18,000 | ) | 19,362 | (12,963 | ) | |||||||||||
Net cash provided by (used in)
financing activities |
311,289 | 471,289 | (265,125 | ) | (17,961 | ) | 499,492 | |||||||||||||
Effect of exchange rate changes on
cash and equivalents |
| | 210 | | 210 | |||||||||||||||
Net increase (decrease) in cash and
equivalents |
| 231,414 | (95,730 | ) | | 135,684 | ||||||||||||||
Cash and equivalents at beginning of
period |
| 185,375 | 122,743 | | 308,118 | |||||||||||||||
Cash and equivalents at end of period |
$ | | $ | 416,789 | $ | 27,013 | $ | | $ | 443,802 | ||||||||||
25
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Pre-tax income (loss): |
||||||||||||||||
Homebuilding operations |
$ | 380,822 | $ | 499,402 | $ | 758,405 | $ | 858,971 | ||||||||
Financial services operations |
15,056 | 15,526 | 64,400 | 25,610 | ||||||||||||
Other non-operating |
(8,153 | ) | (29,106 | ) | (17,536 | ) | (51,862 | ) | ||||||||
Income from continuing operations before income taxes |
387,725 | 485,822 | 805,269 | 832,719 | ||||||||||||
Income taxes |
143,873 | 180,635 | 298,772 | 309,985 | ||||||||||||
Income from continuing operations |
243,852 | 305,187 | 506,497 | 522,734 | ||||||||||||
Loss from discontinued operations |
(833 | ) | (1,476 | ) | (833 | ) | (781 | ) | ||||||||
Net income |
$ | 243,019 | $ | 303,711 | $ | 505,664 | $ | 521,953 | ||||||||
Per share data assuming dilution: |
||||||||||||||||
Income from continuing operations |
$ | 0.94 | $ | 1.16 | $ | 1.95 | $ | 1.99 | ||||||||
Loss from discontinued operations |
| (.01 | ) | | | |||||||||||
Net income |
$ | 0.94 | $ | 1.15 | 1.95 | $ | 1.98 | |||||||||
The following is a comparison of pre-tax income for the three and six months ended June 30, 2006 and 2005: | ||
| Homebuilding pre-tax income decreased 24% and 12% for the three and six months ended June 30, 2006, respectively, compared with the same periods in the prior year. Homebuilding settlement revenues increased 5% and 10%, respectively, for the three and six months ended June 30, 2006 compared with the same periods in the prior year. The decrease in pre-tax income is due to lower gross margins from geographic and product mix shifts, increased selling incentives and increased construction, land and land development costs. Pre-tax income also declined due to $62 million of charges resulting from adjustments to land inventory ($9.3 million), land held for sale ($22 million), and the write-off of deposits and pre-acquisition costs associated with land transactions we no longer plan to pursue ($30.8 million). These decreases were offset partially by improvements in selling, general and administrative expenses as a percent of home settlement revenues. | |
| Pre-tax income from our financial services business segment decreased 3% for the three months ended June 30, 2006 compared with the prior year period. Pre-tax income increased $38.8 million for the six months ended June 30, 2006 compared with the prior year period, as we recognized a one-time gain of $31.6 million related to the sale of our investment in Su Casita, a Mexican mortgage banking company, during the first quarter of 2006. The capture rates were 91.0% and 88.0% for the three months ended June 30, 2006 and 2005, respectively, and 90.2% and 88.3% for the six months ended June 30, 2006 and 2005, respectively. | |
| The decrease in non-operating expenses for the three and six months ended June 30, 2006, compared with the same period in the prior year, was due primarily to an increase in the amount of interest capitalized into homebuilding inventory. | |
| Loss from discontinued operations included a provision of $800 thousand, net of taxes, for the three and six months ended June 30, 2006 resulting from a contractual adjustment related to the December 2005 disposition of our Mexico homebuilding operations. Loss from discontinued operations for the three and six months ended June 30, 2005 primarily relates to our Mexico homebuilding operations. |
26
Northeast:
|
Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Virginia |
|
Southeast:
|
Florida, Georgia, North Carolina, South Carolina, Tennessee | |
Midwest:
|
Illinois, Indiana, Kansas, Michigan, Missouri, Minnesota, Ohio | |
Central:
|
Colorado, New Mexico, Texas | |
West:
|
Arizona, California, Nevada |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Unit settlements: |
||||||||||||||||
Northeast |
819 | 868 | 1,535 | 1,406 | ||||||||||||
Southeast |
3,018 | 2,952 | 5,522 | 5,283 | ||||||||||||
Midwest |
1,044 | 1,147 | 1,848 | 2,048 | ||||||||||||
Central |
1,627 | 1,538 | 3,057 | 2,464 | ||||||||||||
West |
3,371 | 3,689 | 6,519 | 7,012 | ||||||||||||
9,879 | 10,194 | 18,481 | 18,213 | |||||||||||||
Net new orders units: |
||||||||||||||||
Northeast |
790 | 1,228 | 1,518 | 2,256 | ||||||||||||
Southeast |
2,635 | 3,717 | 6,010 | 7,434 | ||||||||||||
Midwest |
1,113 | 1,710 | 2,433 | 3,229 | ||||||||||||
Central |
1,754 | 2,291 | 3,482 | 3,911 | ||||||||||||
West |
3,163 | 4,635 | 6,737 | 8,818 | ||||||||||||
9,455 | 13,581 | 20,180 | 25,648 | |||||||||||||
Net new orders dollars ($000s omitted) |
$ | 3,121,000 | $ | 4,406,000 | $ | 6,804,000 | $ | 8,239,000 | ||||||||
Unit backlog: |
||||||||||||||||
Northeast |
1,576 | 2,333 | ||||||||||||||
Southeast |
6,153 | 7,456 | ||||||||||||||
Midwest |
1,972 | 2,458 | ||||||||||||||
Central |
2,642 | 2,524 | ||||||||||||||
West |
7,173 | 8,580 | ||||||||||||||
19,516 | 23,351 | |||||||||||||||
Backlog at June 30 dollars ($000s omitted) |
$ | 6,911,000 | $ | 7,775,000 | ||||||||||||
27
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Unit net new orders: |
||||||||||||||||
Phoenix |
12 | % | * | 11 | % | 11 | % | |||||||||
Unit settlements: |
||||||||||||||||
Phoenix |
* | 14 | % | * | 15 | % | ||||||||||
Las Vegas |
12 | % | * | 12 | % | * | ||||||||||
Settlement revenues: |
||||||||||||||||
Phoenix |
* | 14 | % | * | 14 | % | ||||||||||
Las Vegas |
13 | % | * | 13 | % | * |
* | Represents less than 10%. |
28
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Unit settlements : |
||||||||||||||||
Arizona |
11 | % | 15 | % | 11 | % | 16 | % | ||||||||
California |
11 | % | 13 | % | 12 | % | 14 | % | ||||||||
Florida |
19 | % | 19 | % | 19 | % | 19 | % | ||||||||
Nevada |
12 | % | * | 13 | % | * | ||||||||||
Texas |
12 | % | 11 | % | 12 | % | * | |||||||||
Settlement revenues: |
||||||||||||||||
Arizona |
11 | % | 14 | % | 11 | % | 15 | % | ||||||||
California |
17 | % | 22 | % | 19 | % | 22 | % | ||||||||
Florida |
17 | % | 16 | % | 17 | % | 16 | % | ||||||||
Nevada |
14 | % | * | 14 | % | 10 | % |
* | Represents less than 10%. |
As of | As of | |||||||
June 30, 2006 | December 31, 2005 | |||||||
Controlled Lots: |
||||||||
Northeast |
40,831 | 44,088 | ||||||
Southeast |
91,607 | 102,297 | ||||||
Midwest |
28,786 | 38,674 | ||||||
Central |
30,731 | 37,611 | ||||||
West |
133,581 | 139,945 | ||||||
325,536 | 362,615 | |||||||
29
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Home sale revenue (settlements) |
$ | 3,304,960 | $ | 3,155,898 | $ | 6,193,794 | $ | 5,618,007 | ||||||||
Land sale revenue |
13,095 | 57,532 | 39,013 | 81,717 | ||||||||||||
Home cost of sales (a) |
(2,608,042 | ) | (2,405,353 | ) | (4,834,008 | ) | (4,261,821 | ) | ||||||||
Land cost of sales |
(32,461 | ) | (53,527 | ) | (53,604 | ) | (74,286 | ) | ||||||||
Selling, general and administrative expense |
(265,404 | ) | (267,327 | ) | (550,153 | ) | (521,758 | ) | ||||||||
Equity income (expense) |
(1,337 | ) | 23,406 | (121 | ) | 36,877 | ||||||||||
Other income (expense), net |
(29,989 | ) | (11,227 | ) | (36,516 | ) | (19,765 | ) | ||||||||
Pre-tax income |
$ | 380,822 | $ | 499,402 | $ | 758,405 | $ | 858,971 | ||||||||
Average sales price |
$ | 335 | $ | 310 | $ | 335 | $ | 308 | ||||||||
(a) | Homebuilding interest expense, which represents the amortization of capitalized interest, of $55.9 million and $41.1 million for the three months ended June 30, 2006 and 2005 and $97.1 million and $71.6 million for the six months ended June 30, 2006 and 2005, has been included as part of homebuilding cost of sales. |
30
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Total originations: |
||||||||||||||||
Loans |
9,498 | 9,445 | 17,589 | 17,037 | ||||||||||||
Principal ($000s omitted) |
$ | 2,022,600 | $ | 1,829,200 | $ | 3,766,800 | $ | 3,318,600 | ||||||||
Originations for Pulte customers: |
||||||||||||||||
Loans |
9,442 | 9,235 | 17,502 | 16,450 | ||||||||||||
Principal ($000s omitted) |
$ | 2,008,900 | $ | 1,790,700 | $ | 3,745,400 | $ | 3,218,600 | ||||||||
31
32
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net interest expense (income) |
$ | (1,569 | ) | $ | 14,903 | (2,659 | ) | $ | 28,650 | |||||||
Other expenses, net |
9,722 | 14,203 | 20,195 | 23,212 | ||||||||||||
Loss before income taxes |
$ | 8,153 | $ | 29,106 | $ | 17,536 | $ | 51,862 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Interest in inventory at beginning of period |
$ | 245,253 | $ | 233,711 | $ | 229,798 | $ | 223,591 | ||||||||
Interest capitalized |
65,100 | 43,810 | 121,724 | 84,474 | ||||||||||||
Interest expensed |
(55,899 | ) | (41,103 | ) | (97,068 | ) | (71,647 | ) | ||||||||
Interest in inventory at end of period |
$ | 254,454 | $ | 236,418 | $ | 254,454 | $ | 236,418 | ||||||||
Interest incurred * |
$ | 66,984 | $ | 59,972 | $ | 125,466 | $ | 115,631 | ||||||||
* | Interest incurred includes interest on our senior debt, short-term borrowings, and other financing arrangements and excludes interest incurred by our financial services operations. |
33
34
35
36
As of June 30, 2006 for the | ||||||||||||||||||||||||||||||||
years ended December 31, | ||||||||||||||||||||||||||||||||
There- | Fair | |||||||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | after | Total | Value | |||||||||||||||||||||||||
Rate sensitive liabilities: |
||||||||||||||||||||||||||||||||
Fixed interest rate debt: |
||||||||||||||||||||||||||||||||
Senior notes |
$ | | $ | | $ | | $ | 400,000 | $ | | $ | 3,148,563 | $ | 3,548,563 | $ | 3,377,050 | ||||||||||||||||
Average interest rate |
| | | 4.88 | % | | 6.62 | % | 6.42 | % | ||||||||||||||||||||||
Limited recourse
collateralized financing |
$ | 10,554 | $ | 5,620 | $ | 2,122 | $ | 3,824 | $ | | $ | | $ | 22,120 | $ | 22,120 | ||||||||||||||||
Average interest rate |
.32 | % | 2.38 | % | 1.63 | % | 2.26 | % | | | 1.3 | % |
37
(d) | ||||||||||||||||
Approximate dollar | ||||||||||||||||
(c) | value of shares | |||||||||||||||
Total number of | that may yet be | |||||||||||||||
(a) | (b) | shares purchased | purchased under | |||||||||||||
Total Number | Average | as part of publicly | the plans or | |||||||||||||
of shares | price paid | announced plans | programs | |||||||||||||
purchased | per share | or programs | ($000s omitted) | |||||||||||||
April 1, 2006 through April 30, 2006 |
| | | $ | 172,140 | (1) | ||||||||||
May 1, 2006 through May 31, 2006 |
690,300 | $ | 34.82 | 690,300 | $ | 148,106 | (1) | |||||||||
June 1, 2006 through June 30, 2006 |
925,000 | $ | 27.98 | 925,000 | $ | 122,224 | (1) | |||||||||
Total |
1,615,300 | $ | 30.90 | 1,615,300 | ||||||||||||
(1) | Pursuant to the two $100 million stock repurchase programs authorized and announced by our Board of Directors in October 2002 and 2005 and the $200 million stock repurchase authorized and announced in February 2006 (for a total stock repurchase authorization of $400 million), the Company has repurchased a total of 8,987,600 shares for a total of $277.8 million. There are no expiration dates for the programs. |
Shares | Shares | |||||||
Voted For | Withheld | |||||||
Election of Directors -
Nominees to Serve a Two Year
Term Expiring at the 2008
Annual Meeting: |
||||||||
Brian P. Anderson |
224,878,704 | 10,669,583 | ||||||
Patrick J. OLeary |
224,874,275 | 10,674,012 | ||||||
Election of Directors -
Nominees to Serve a Three Year
Term Expiring at the 2009
Annual Meeting: |
||||||||
Debra J. Kelly-Ennis |
224,624,140 | 10,924,147 | ||||||
Bernard W. Reznicek |
224,864,955 | 10,683,332 | ||||||
Alan E. Schwartz |
217,367,767 | 18,180,520 |
38
2007 | 2008 | |||
William J. Pulte
|
D. Kent Anderson | |||
Richard J. Dugas, Jr.
|
John J. Shea | |||
David N. McCammon
|
William B. Smith | |||
Francis J. Sehn |
Shares | ||||||||||||
Shares | Voted | Shares | ||||||||||
Voted For | Against | Abstaining | ||||||||||
Ratification of the appointment of
the Companys independent
accountants by shareholders |
232,326,664 | 2,138,148 | 1,083,475 |
Shares | ||||||||||||||||
Shares | Voted | Shares | Broker | |||||||||||||
Voted For | Against | Abstaining | Non-Votes | |||||||||||||
Election of Directors by a majority,
rather than plurality, vote |
95,372,989 | 116,250,014 | 1,620,692 | 22,304,592 | ||||||||||||
Declassification of the Board of
Directors |
134,631,115 | 77,404,119 | 1,208,461 | 22,304,592 | ||||||||||||
Cumulative voting in the election of
Directors |
103,820,333 | 107,018,210 | 2,405,152 | 22,304,592 | ||||||||||||
Use of performance-based options |
107,148,205 | 104,850,458 | 1,245,032 | 22,304,592 |
10(a)
|
Fifth Amended and Restated Security and Collateral Agreement by and among Pulte Mortgage LLC, JP Morgan Chase Bank, N.A., as administrative agent, and LaSalle Bank National Association, as collateral agent, dated as of May 16, 2006. | |
10(b)
|
Sixth Amended and Restated Revolving Credit Agreement by and among Pulte Mortgage LLC, JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Securities, Inc., as lead arranger and sole bookrunner, and LaSalle Bank National Association, as collateral agent, dated as of May 16, 2006. | |
31(a)
|
Rule 13a-14(a) Certification by Richard J. Dugas, Jr., President and Chief Executive Officer | |
31(b)
|
Rule 13a-14(a) Certification by Roger A. Cregg, Executive Vice President and Chief Financial Officer | |
32
|
Certification Pursuant to 18 United States Code § 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934 |
39
PULTE HOMES, INC. |
||||
/s/ Roger A. Cregg | ||||
Roger A. Cregg | ||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer and duly authorized officer) Date: August 4, 2006 |
40
Exhibit Number |
Description | |
10(a)
|
Fifth Amended and Restated Security and Collateral Agreement by and among Pulte Mortgage LLC, JP Morgan Chase Bank, N.A., as administrative agent, and LaSalle Bank National Association, as collateral agent, dated as of May 16, 2006. | |
10(b)
|
Sixth Amended and Restated Revolving Credit Agreement by and among Pulte Mortgage LLC, JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Securities, Inc., as lead arranger and sole bookrunner, and LaSalle Bank National Association, as collateral agent, dated as of May 16, 2006. | |
31(a)
|
Rule 13a-14(a) Certification by Richard J. Dugas, Jr., President and Chief Executive Officer | |
31(b)
|
Rule 13a-14(a) Certification by Roger A. Cregg, Executive Vice President and Chief Financial Officer | |
32
|
Certification Pursuant to 18 United States Code § 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934 |