PulteGroup(US:PHM)2021-10-25 16:00PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents PulteGroup's unaudited condensed consolidated financial statements and notes, detailing financial performance and key changes Condensed Consolidated Balance Sheets PulteGroup's total assets increased to $12.57 billion at September 30, 2021, driven by inventory, while cash decreased and notes payable reduced | Metric | September 30, 2021 ($000s) | December 31, 2020 ($000s) | |:---|:---|:---| | Total Assets | 12,571,851 | 12,205,498 | | Cash and equivalents | 1,568,324 | 2,582,205 | | House and land inventory | 8,917,440 | 7,721,798 | | Notes payable | 2,059,923 | 2,752,302 | | Shareholders' equity | 7,141,752 | 6,569,989 | Consolidated Statements of Operations For the three and nine months ended September 30, 2021, PulteGroup reported substantial increases in total revenues, net income, and diluted earnings per share | Metric | Three Months Ended Sep 30, 2021 ($000s) | Three Months Ended Sep 30, 2020 ($000s) | Nine Months Ended Sep 30, 2021 ($000s) | Nine Months Ended Sep 30, 2020 ($000s) | |:---|:---|:---|:---|:---|\ | Total revenues | 3,479,050 | 2,954,957 | 9,568,324 | 7,843,718 | | Net income | 475,549 | 416,398 | 1,283,055 | 968,728 | | Diluted earnings per share | 1.82 | 1.54 | 4.85 | 3.56 | Consolidated Statements of Comprehensive Income Consolidated comprehensive income for both the three and nine months ended September 30, 2021, increased, largely mirroring net income growth with minimal impact from other items | Metric | Three Months Ended Sep 30, 2021 ($000s) | Three Months Ended Sep 30, 2020 ($000s) | Nine Months Ended Sep 30, 2021 ($000s) | Nine Months Ended Sep 30, 2020 ($000s) | |:---|:---|:---|:---|:---|\ | Comprehensive income | 475,574 | 416,423 | 1,283,130 | 968,803 | Consolidated Statements of Shareholders' Equity Shareholders' equity increased to $7.14 billion at September 30, 2021, driven by net income, partially offset by share repurchases and dividends | Metric | September 30, 2021 ($000s) | December 31, 2020 ($000s) | |:---|:---|:---|\ | Shareholders' equity | 7,141,752 | 6,569,989 | - For the nine months ended September 30, 2021, the company repurchased 12.0 million shares for $614.3 million and declared cash dividends totaling $110.3 million22243 Consolidated Statements of Cash Flows Net cash provided by operating activities decreased significantly due to increased inventories, while financing activities used more cash for debt repayments and share repurchases | Cash Flow Activity | Nine Months Ended Sep 30, 2021 ($000s) | Nine Months Ended Sep 30, 2020 ($000s) | |:---|:---|:---|\ | Net cash provided by (used in) operating activities | 548,225 | 1,266,625 | | Net cash provided by (used in) investing activities | (86,468) | (107,179) | | Net cash provided by (used in) financing activities | (1,469,341) | (296,694) | | Inventories impact on operating cash flow | (1,137,351) | 84,253 | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, inventory, segment performance, debt, equity, income taxes, fair value, and commitments, including the ICG acquisition and share repurchases 1. Basis of presentation PulteGroup, a leading U.S. homebuilder, presents interim financial statements under GAAP, highlighting the ICG acquisition, goodwill impairment, and increased customer deposits - Acquired Innovative Construction Group (ICG) in January 2020 for $104.0 million, with payments of $83.3 million in 2020 and $10.4 million in 2021, and a final $10.4 million payment due in 202233254 - Recorded a $20.2 million goodwill impairment for ICG in Q1 2020 due to broad equity market declines34255 - Customer deposits for sold but undelivered homes totaled $823.5 million at September 30, 2021, up from $449.5 million at December 31, 202038259 2. Inventory Total inventory increased to $8.92 billion at September 30, 2021, driven by homes under construction, with $5.3 billion in remaining land option purchase price | Inventory Component | September 30, 2021 ($000s) | December 31, 2020 ($000s) | |:---|:---|:---|\ | Homes under construction | 4,469,295 | 3,086,740 | | Land under development | 3,849,816 | 4,137,318 | | Raw land | 598,329 | 497,740 | | Total Inventory | 8,917,440 | 7,721,798 | - Remaining purchase price under land option agreements totaled $5.3 billion at September 30, 2021, with deposits and pre-acquisition costs of $354.3 million (of which $19.4 million is refundable)282360 Land-Related Charges | Land-Related Charges | Nine Months Ended Sep 30, 2021 ($000s) | Nine Months Ended Sep 30, 2020 ($000s) | |:---|:---|:---|\ | Write-offs of deposits and pre-acquisition costs | 6,801 | 8,335 | | Total land-related charges | 6,820 | 13,930 | 3. Segment information PulteGroup's Homebuilding and Financial Services segments both contributed to increased consolidated revenues and income before income taxes for the nine months ended September 30, 2021 - Homebuilding operations are aggregated into six reportable segments: Northeast, Southeast, Florida, Midwest, Texas, and West285286 Segment Revenues | Segment | Nine Months Ended Sep 30, 2021 Revenues ($000s) | Nine Months Ended Sep 30, 2020 Revenues ($000s) | |:---|:---|:---|\ | Homebuilding Total | 9,279,692 | 7,587,495 | | Financial Services | 288,632 | 256,223 | | Consolidated revenues | 9,568,324 | 7,843,718 | Segment Income Before Taxes | Segment | Nine Months Ended Sep 30, 2021 Income Before Taxes ($000s) | Nine Months Ended Sep 30, 2020 Income Before Taxes ($000s) | |:---|:---|:---|\ | Homebuilding Total | 1,487,486 | 1,060,906 | | Financial Services | 166,442 | 144,038 | | Consolidated income before income taxes | 1,653,928 | 1,204,944 | 4. Debt Total notes payable decreased to $2.06 billion at September 30, 2021, due to accelerated retirements, while the $1.0 billion revolving credit facility remained unused | Debt Type