In extreme cash preservation mode, Pulte Homes announced Monday Nov.24 there would be no quarterly dividends for stockholders after the new year. Shareholders of stock on Dec. 22 will be paid 4 cents a share.
"The action is in line with the company's objective of conserving cash as it continues to navigate through a very difficult business environment," the company noted.
The announcement came on the heels of the company's announcement on Friday Nov. 21 that it had renegotiated and amended its revolving credit amendment for the third time, including the following provisions:
--Under the amendments, the company's borrowing limit was lowered from $1.6 billion to $1.2 billion.
--Pulte is now required to establish a liquidity reserve account if the company fails its interest coverage test.
--The revolver's uncommitted accordion feature now goes to $1.75 billion versus $2.25 billion.
--Its debt to capitalization limit was raised to a fixed 55%.
--Its tangible net worth requirement was amended to $2 billion plus 50% of its net profits. There is no requirement to deduct net losses and the effect of any decrease from deferred tax valuation allowance is excluded.