Pulte Homes Reports Second Quarter 2007 Financial Results

Pulte Homes Reports Second Quarter 2007 Financial Results

- Net Loss of $2.01 Per Share, Including $749 Million in Impairments and Land-Related Charges, and $40 Million of Restructuring Charges- Q2 Closings were 5,938 Homes, a Decline of 40%; Average Sales Price Per Home Decreased 4% to $320,000- Contract Backlog Valued at $5.2 Billion, Representing 14,928 Homes- Q2 2007 Debt-to-Capitalization Ratio 37.9%- Company Provides Third Quarter 2007 Guidance

Pulte Homes announced today financial results for its second quarter and six months ended June 30, 2007. For the quarter, the Company reported a loss from continuing operations of $507.6 million, or $2.01 per share, including impairments, land-related charges and restructuring charges. This compared with $243.9 million of income from continuing operations for the prior year second quarter, or $0.94 per diluted share. Consolidated revenues for the quarter were $2.0 billion, a decline of 40% from prior year revenues of $3.4 billion.

“As reported in our preliminary release last week, the homebuilding industry continues to face an extremely difficult environment that includes record existing and new home inventory levels, intense price competition and weak consumer sentiment for housing,” said Richard J. Dugas, Jr., President and CEO of Pulte Homes. “Pulte continues to focus on reducing its land and speculative home portfolio, and properly adjusting overhead spending to put us in the best position to navigate through this continued severe downturn.”

Second Quarter Results

Revenues from homebuilding settlements in the second quarter decreased 42% to $1.9 billion compared with $3.3 billion last year. The change in revenue for the quarter reflects a 40% decrease in closings to 5,938 homes, and a 4% decrease in average selling price to $320,000.

Second quarter homebuilding pre-tax loss was approximately $803.2 million, compared with prior year pre-tax income of $380.8 million. The pre-tax loss for the period reflects a decline in gross margins to -18.6% from 21.1% in the prior year quarter, combined with an increase in SG&A as a percentage of home sale revenues to 15.5% compared with 8.0% for the same period last year.

Homebuilding pre-tax loss for the second quarter of 2007 is inclusive of approximately $749.4 million of pre-tax charges, or $1.87 per share on an after-tax basis, resulting from adjustments to land inventory and land held for sale, including the Company’s investment in unconsolidated joint ventures, and the write-off of deposits and pre-acquisition costs associated with land transactions the Company no longer plans to pursue. Pulte Homes also recorded a pre-tax restructuring charge of approximately $40 million during the quarter, or $0.10 per share on an after-tax basis, related to the restructuring plan announced by the Company on May 29, 2007.

Net new home orders for the second quarter were 7,532 homes, valued at $2.4 billion, which represents declines of 20% and 22%, respectively, from prior year second quarter results. Pulte Homes’ ending backlog as of June 30, 2007 was valued at $5.2 billion (14,928 homes), compared with a value of $6.9 billion (19,516 homes) at the end of last year’s second quarter. At the end of the second quarter 2007, the Company’s debt-to-capitalization ratio was 37.9%.

The Company’s financial services operations reported pre-tax income of $6.6 million for the second quarter 2007 compared with $15.1 million of pre-tax income for the prior year’s quarter. The decrease in second quarter 2007 pre-tax income was primarily due to a 44% decline in mortgage loans originated during the quarter compared with the prior year’s quarter. The mortgage capture rate for the quarter was approximately 93%, compared with 91% for the same quarter last year.