PulteGroup, Inc. announced today financial results for its fourth quarter ended December 31, 2014.  For the quarter, PulteGroup reported net income of $217 million, or $0.58 per share.  Net income for the period reflects $50 million, or $0.13 per share, of income tax expense. Prior year net income of $220 million, or $0.57 per share, reflects $12 million, or $0.03 per share, of income tax expense.

"Through continued execution of our Value Creation strategy, PulteGroup delivered outstanding fourth quarter and full-year results with solid top line growth and margin expansion driving a 31% increase in 2014 pretax income to $690 million," said Richard J. Dugas, Jr., Chairman, President and CEO of PulteGroup.  "Our improved financial performance allowed us to increase investment into the business in 2014 to $1.8 billion, retire $246 million of debt and return $321 million to shareholders through dividends and expanded share repurchases."

"We are optimistic heading into 2015 as buyer sentiment began improving in late November supporting stronger traffic and signup levels throughout December and into January.  We believe the positive factors of an improving economy with declining energy costs, rising employment, lower mortgage rates and related fees, beneficial long-term demographic trends and a generally healthy supply of inventory, will continue to support a slow and sustained housing recovery. Within this environment, we remain focused on driving additional gains in construction and asset efficiency to deliver higher returns on invested capital.  Consistent with our positive market view and long-term business strategy, we expect to use our capital to support future growth, while consistently returning funds to shareholders."

Fourth Quarter Results

Home sale revenues for the fourth quarter totaled $1.8 billion, an increase of 10% over the prior year.  The increase in revenue was driven by a 7% increase in closings to 5,316 combined with a 3% increase in average selling price to $334,000. The higher average selling price in the quarter reflects price increases realized across all three of the Company's national brands: Centex, Pulte Homes and Del Webb.

Home sale gross margin for the period was 23.1%, a decrease of 10 basis points from the prior year, but up 20 basis points over the third quarter of 2014.  SG&A expense for the quarter of $146 million, or 8.2% of home sale revenues, included a $15 million, or $0.03 per share, reversal of construction related insurance reserves recorded in the period.  SG&A for the prior year period was $150 million, or 9.3% of home sale revenues.

As part of its corporate relocation, the Company recorded a fourth quarter charge in Other Expense, net of $8.7 million, or $0.01 per share, associated with lease exit costs for its former corporate headquarters in Michigan.

For the quarter, the Company reported 3,232 net new orders, an increase of 1% from prior year orders of 3,214.  The dollar value of net new orders increased 2% over the prior year to $1.1 billion.  The Company ended the year with 598 active communities, which is up 4% from the comparable prior year period.

PulteGroup's backlog at year end totaled 5,850 homes valued at $1.9 billion, compared with prior year backlog of 5,772 homes valued at $1.9 billion.  The average selling price in backlog increased 1% over the prior year to $332,000.

The Company's financial services operations reported pretax income of $13 million for the fourth quarter, an increase of 88% over prior year pretax income of $7 million.  Mortgage capture rate for the quarter was 81% compared with 79% in the comparable prior year quarter. The increase in financial services pretax income for the quarter was primarily the result of higher volumes and favorable market conditions which drove higher gains on mortgage sales.

For the quarter, the Company reported $50 million of income tax expense, representing an effective tax rate of 19%.  The Company's tax rate for the quarter is lower than its statutory provision primarily due to $50 million, or $0.13 per share, of tax benefits associated with the resolution of certain federal and state tax matters and adjustments to its state deferred tax asset valuation allowances.

Through open-market transactions, PulteGroup repurchased 5.2 million of its common shares in the quarter for $98 million, or $18.87 per share.  For the full year, PulteGroup repurchased 12.9 million, or 3.4%, of its common shares outstanding, for $246 million, or $19.11 per share.  The Company ended the year with a cash balance of $1.3 billion and a debt-to-capitalization ratio of 27%.

A conference call discussing PulteGroup's fourth quarter results will be held Thursday, January 29, 2015, at 8:30 a.m. Eastern Time, and webcast live via www.pultegroupinc.com.  Interested investors can access the call via the Company's home page at www.pultegroupinc.com, and are encouraged to download the available slides that provide additional details on the Company's fourth quarter results.