Pulte targeting $1 billion cash on hand at year end

By Jennifer Lanning Drey

Portland, Ore., Nov. 27 - Pulte Homes Inc. has targeted having $1 billion of cash on hand at the end of 2007, Richard J. Dugas, Pulte's chief executive officer, said Tuesday during a presentation at the JPMorgan Homebuilding and Building Products Conference in Las Vegas.

The goal excludes any debt repurchased during the year, which totaled approximately $61 million through the third quarter.

Pulte generated roughly $175 million of net cash in the third quarter.

When asked how long the company expects to be able to sustain cash flow generation, Dugas said, "For the foreseeable future, we could be cash flow positive and generating cash flow, and certainly our goal is that."

He cautioned, however, that the company has not yet provided cash flow guidance for 2008.

"Each of our operators is focused on every community being cash flow positive, and if we can't demonstrate that a community is going to be cash flow positive over the next six to 12 months, we're probably electing to do something different with that community," Dugas said later, during the question-and-answer portion of the presentation.

Like many of its peers in the homebuilding industry, Pulte's strategy for weathering the housing downturn includes limiting new land purchases, decreasing inventory, particularly speculative homes, and renegotiating land deals that are currently under option.

Dugas also said Tuesday that Pulte is on track to achieve its previously announced goal of $200 million in selling, general and administrative savings, a large portion of which has come from headcount reductions.

Pulte is a Bloomfield Hills, Mich.-based homebuilder.

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