<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended: December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission File Number: 1-9195
A. Full title of the plan and the address of the plan, if different from
that of the issuer names below:
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED
401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
KAUFMAN AND BROAD HOME CORPORATION
10990 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90024
<PAGE> 2
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(K) SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 1998
<PAGE> 3
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
-----------------------
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES PAGE
- -------------------------------------------------------- ----
<S> <C>
Report of Independent Auditors 2
Financial Statements:
Statements of Net Assets Available for Plan
Benefits at December 31, 1998 and 1997 3
Statements of Changes in Net Assets Available for
Plan Benefits for the years ended December 31, 1998 and 1997 4
Notes to Financial Statements 5
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes at December 31, 1998 15
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998 16
</TABLE>
<PAGE> 4
Report of Independent Auditors
To the Administrative Committee, as Plan Administrator of the
Kaufman and Broad Home Corporation
Amended and Restated 401(k) Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of Kaufman and Broad Home Corporation Amended and Restated 401(k)
Savings Plan as of December 31, 1998 and 1997, and the related statements of
changes in net assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
June 23, 1999 /s/ ERNST & YOUNG LLP
2
<PAGE> 5
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
-----------------
<TABLE>
<CAPTION>
December 31,
------------------------------
1998 1997
------------ ------------
<S> <C> <C>
ASSETS:
Investments, at fair value (Note 4) $ 41,432,121 $ 32,760,008
Participant loans receivable 1,086,763 891,406
------------ ------------
Total Assets 42,518,884 33,651,414
LIABILITIES
Forfeitures payable (1,026,800) (688,000)
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 41,492,084 $ 32,963,414
============ ============
</TABLE>
See accompanying notes.
3
<PAGE> 6
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
-----------------
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
ADDITIONS TO NET ASSETS AVAILABLE
FOR PLAN BENEFITS ATTRIBUTED TO:
Contributions from:
Plan participants $ 5,441,237 $ 3,562,818
Employer 3,150,487 2,297,751
------------ ------------
8,591,724 5,860,569
Forfeitures (612,800) (699,000)
------------ ------------
Net contributions 7,978,924 5,161,569
------------ ------------
Investment income:
Interest and dividends 2,571,346 2,297,253
Net appreciation in fair value
of investments 4,049,930 3,408,714
------------ ------------
6,621,276 5,705,967
------------ ------------
Total additions 14,600,200 10,867,536
DEDUCTIONS FROM NET ASSETS AVAILABLE FOR
PLAN BENEFITS ATTRIBUTED TO:
Benefits paid to participants (6,071,530) (4,998,272)
------------ ------------
NET INCREASE IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS DURING THE YEAR 8,578,670 5,869,264
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 32,963,414 27,094,150
------------ ------------
End of year $ 41,492,084 $ 32,963,414
============ ============
</TABLE>
See accompanying notes
4
<PAGE> 7
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
-----------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Kaufman and Broad Home Corporation
Amended and Restated 401(k) Savings Plan (the "Plan") are prepared on
an accrual basis. Investment income is recorded as earned.
Distributions of the Plan benefits to withdrawing participants are
recorded when distributed. Expenses incurred in the administration of
the Plan are paid by Kaufman and Broad Home Corporation (the "Company"
and "Plan Sponsor").
The financial statements are based on information provided to the
Company and certified as complete and accurate by Fidelity Trust
Management Company (the "Trustee"). Certain adjustments have been made
to the financial statements provided by the Trustee in order for them
to conform to the accrual basis of accounting. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Included in investments are amounts allocated to accounts of persons
who have requested payment of their account balances due to
termination, retirement, or death. Such amounts are classified as
components of net assets available for plan benefits at December 31,
1998 and 1997 in the amounts of $1,848,300 and $1,237,800,
respectively.
2. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for plan
benefits between the financial statements and the Form 5500:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Net assets available for plan benefits
per financial statements $ 41,492,084 $ 32,963,414
Liability recorded in the Form 5500 for
amounts due to withdrawn participants (1,848,300) (1,237,800)
------------ ------------
Net assets available for plan benefits
per the Form 5500 $ 39,643,784 $ 31,725,614
============ ============
</TABLE>
5
<PAGE> 8
The following is a reconciliation of benefits paid to participants
between the financial statements and Form 5500:
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Benefits paid to participants
per the financial statements $ 6,071,530 $ 4,998,272
Add: Amounts related to withdrawn
participants at year end 1,848,300 1,237,800
Less: Amounts related to withdrawn
participants from previous year (1,237,800) (744,000)
----------- -----------
Benefits paid to participants per the
Form 5500 $ 6,682,030 $ 5,492,072
=========== ===========
</TABLE>
3. GENERAL DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan whereby salaried employees of
the Company are eligible to enroll in the Plan on January 1, April 1,
July 1 or October 1 following the completion of 1,000 hours of service
with the Company computed from the date of employment, or full-time
employment for six months.
Participants electing to participate in the Plan may contribute up to
10% of their annual compensation, on a pretax basis, by means of salary
reduction. Participants may also contribute up to an additional 9% of
their annual compensation, on an after tax basis, also by means of
salary reduction. All contributions must be in whole percentages.
Pretax contributions are eligible for tax deferred treatment up to the
limits provided by the Tax Reform Act of 1986, as adjusted for cost of
living.
Unless otherwise elected by the Board of Directors, the Company will
match the participant's pretax contribution up to 6% of annual base
salary (determined without regard to bonuses and a maximum of $50,000
of regular earnings for commission employees). Company matching
contributions and related investment income vest to participants over
five years.
Plan assets are held by Fidelity Investments. Plan participants may
direct the investment of their funds among one or more of the following
funds:
Strong Growth Fund is a growth mutual fund. It tries to
increase the value of investments over the long term through
capital growth by investing primarily in stocks that the
advisor believes have above average growth prospects,
including common and preferred stocks, both domestic and
abroad. The fund is managed by Strong Capital Management, Inc.
Templeton Developing Markets Trust I is an international
growth fund that invests in emerging or developing markets.
The fund is managed by Templeton Asset Management Ltd. - Hong
Kong Branch and distributed by Franklin Templeton
Distributors, Inc.
6
<PAGE> 9
Kaufman and Broad Common Stock Fund allows participants to
contribute money which Fidelity uses to purchase shares of the
common stock of the Company.
Fidelity Magellan Fund is a growth fund. It seeks long-term
capital appreciation by investing in the stocks of both
well-known and lesser known companies with potentially
above-average growth potential and a correspondingly higher
level of risk. Securities may be of foreign, domestic, and
multinational companies.
Fidelity Contrafund is a growth fund. It seeks long-term
capital appreciation by investing mainly in the securities of
companies believed to be out of favor or undervalued. The fund
invests in domestic and foreign common stocks and stocks and
securities convertible into common stock, but it may purchase
other securities that may produce capital appreciation.
Fidelity Equity-Income Fund is a growth and income fund. It
invests primarily in income-producing equity securities
(common and preferred stocks) but can also invest in bonds and
convertible securities.
Fidelity Intermediate Bond Fund is an income fund. It seeks a
high current income by investing primarily in investment-grade
fixed-income obligations rated Baa or better by Moody's or BBB
or better by Standard & Poor's, including corporate bonds,
mortgage securities, bank obligations and U.S. government and
agency securities. The fund's dollar-weighted average maturity
ranges between three and ten years.
Fidelity Overseas Fund is an international growth fund. It
seeks long-term capital growth primarily through investments
in foreign securities. These investments may include common
stock and securities convertible into common stock as well as
debt instruments. Normally, at least 65% of the fund's total
assets will be invested in securities of issuers from at least
three different countries outside of North America.
Fidelity Asset Manager is an asset allocation fund. It seeks
high total return with reduced risk over the long-term by
allocating its assets among domestic and foreign stocks,
bonds, and short-term and money market instruments. The fund
can allocate its assets within the following investment
parameters: 30-70% in stocks, 20-60% in bonds, and 0-50% in
short-term/money market class.
Fidelity Low-Priced Stock Fund is a growth fund. It seeks
capital appreciation and invests mainly in U.S. and foreign
low-priced stocks that may be undervalued, overlooked or out
of favor. Generally, "low-priced" is considered $35 or less at
time of purchase.
Fidelity Retirement Money Market Portfolio is a money market
fund, which seeks as high a level of current income as is
consistent with the preservation of capital and liquidity. It
invests in high quality, short-term money market securities of
U.S. and foreign issuers. An investment in the fund is not
insured or guaranteed by the U.S. government.
Terminating participants may elect (with spousal consent) to withdraw
their contributions, vested Company contributions and related
investment income as a lump sum payment. In the absence of a valid
election, the participant's vested benefits will be distributed in the
form of a Qualified Joint and
7
<PAGE> 10
Survivor Annuity or a Qualified Preretirement Survivor Annuity, or in a
lump sum if the actuarial equivalent is not more than $5,000.
Nonvested Company contributions are forfeited and used by the Company
to reduce future employer contributions.
The Plan allows participant loans and hardship withdrawals subject to
certain limitations.
In the event of Plan termination, benefits of all affected
participants, if not already so, shall become 100% vested and
nonforfeitable.
4. INVESTMENTS
At December 31, 1998 and 1997 the Plan had $41,432,121 and $32,760,008
respectively, invested in a variety of funds as directed by individual
participants (see Note 3). These investment funds are valued at fair
value, which is determined daily by Fidelity through reference to
published market information using closing prices on the valuation
date. The cost of the investments is determined by Fidelity. The Plan
had loans outstanding to participants of $1,086,763 and $891,406 at
December 31, 1998 and 1997, respectively.
The value of the Plan's invested assets (including investments bought,
sold and held during the year) appreciated by $4,049,930 and $3,408,714
during the years ended December 31, 1998 and 1997, respectively, as
follows:
8
<PAGE> 11
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation) in Fair Value at
Fair Value during December 31,
1998 1998
----------------- -------------
<S> <C> <C>
Investment Fund:
Strong Growth $ 180,236 $ 830,022
Templeton Dev. Mkts. (84,124) 275,873
Kaufman and Broad Stock 67,171 790,393
Fidelity Magellan 2,689,150 13,409,477*
Fidelity Contrafund 957,508 6,499,042*
Fidelity Equity Income 436,757 7,953,691*
Fidelity Intermediate Bond 17,005 2,834,767*
Fidelity Overseas (3,766) 361,350
Fidelity Asset Manager (104,443) 2,772,576*
Fidelity Low-Priced Stock (105,564) 1,426,783
Fidelity Retirement Money Market -- 4,278,147*
Participant Loans -- 1,086,763
----------- -----------
Total $ 4,049,930 $42,518,884
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation) in Fair Value at
Fair Value during December 31,
1997 1997
----------------- -------------
<S> <C> <C>
Investment Fund:
Strong Growth $ (14,055) $ 436,360
Templeton Dev. Mkts. (184,883) 594,942
Kaufman and Broad Stock 237 10,355
Fidelity Magellan 1,392,253 9,423,726*
Fidelity Contrafund 384,744 4,432,788*
Fidelity Equity Income 1,480,905 8,529,691*
Fidelity Intermediate Bond 18,201 2,221,380*
Fidelity Overseas (172) 161,792
Fidelity Asset Manager 270,234 2,593,392*
Fidelity Low-Priced Stock 61,250 706,291
Fidelity Retirement Money Market -- 3,649,291*
Participant Loans -- 891,406
----------- -----------
Total $ 3,408,714 $33,651,414
=========== ===========
</TABLE>
*Fair value of individual investment is 5% or more of the Plan's net assets.
5. CHANGES IN NET ASSETS BY FUND (PARTICIPANT DIRECTED)
The amount of net assets available for plan benefits as of December 31,
1998 and 1997 and the changes in net assets available for plan benefits
during the years then ended for each investment fund including net
asset accruals allocated by fund and participant loans, are as follows:
9
<PAGE> 12
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
FIDELITY MUTUAL FUNDS
----------------------------------------------
KAUFMAN
AND BROAD
STRONG TEMPLETON COMMON
GROWTH DEV. MARKETS STOCK MAGELLAN CONTRAFUND EQUITY INCOME
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Plan participants $ 315,427 $ 137,930 $ 340,521 $ 1,267,218 $ 766,474 $ 933,675
Employer 165,272 79,825 187,020 751,255 435,148 550,485
------------ ------------ ------------ ------------ ------------ ------------
480,699 217,755 527,541 2,018,473 1,201,622 1,484,160
Forfeitures (30,673) (7,828) (32,092) (265,281) (107,346) (69,346)
------------ ------------ ------------ ------------ ------------ ------------
Net contributions 450,026 209,927 495,449 1,753,192 1,094,276 1,414,814
Investment income:
Interest & dividends 15 8,542 3,520 590,527 476,184 469,056
Net appreciation
(depreciation) in fair
value of investments 180,236 (84,124) 67,171 2,689,150 957,508 436,757
Interfund transfers, net (224,810) (450,310) 225,667 776,019 226,382 (1,396,513)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 405,467 (315,965) 791,807 5,808,888 2,754,350 924,114
------------ ------------ ------------ ------------ ------------ ------------
DEDUCTIONS:
Benefits paid to participants (29,567) (8,020) (31,242) (1,870,090) (706,170) (1,454,247)
Loan activity, net (4,940) (825) (4,473) (98,409) (25,441) (59,588)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL DEDUCTIONS (34,507) (8,845) (35,715) (1,968,499) (731,611) (1,513,835)
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS AVAILABLE FOR
PLAN BENEFITS 370,960 (324,810) 756,092 3,840,389 2,022,739 (589,721)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS:
Beginning of year 435,630 594,548 10,355 9,216,569 4,288,663 8,379,894
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 806,590 $ 269,738 $ 766,447 $ 13,056,958 $ 6,311,402 $ 7,790,173
============ ============ ============ ============ ============ ============
</TABLE>
10
<PAGE> 13
YEAR ENDED DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY MUTUAL FUNDS
- ----------------------------------------------------------------------------------------
INTERMEDIATE ASSET RETIREMENT PARTICIPANT
BOND OVERSEAS MANAGER LOW-PRICED MONEY MARKET LOANS TOTAL
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 300,053 $ 119,454 $ 403,247 $ 325,504 $ 531,734 $ -- $ 5,441,237
193,781 74,189 242,183 173,553 297,776 -- 3,150,487
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
493,834 193,643 645,430 499,057 829,510 -- 8,591,724
(47,678) (11,987) (38,348) (34,237) 32,016 -- (612,800)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
446,156 181,656 607,082 464,820 861,526 -- 7,978,924
144,651 11,088 492,247 98,429 193,245 83,842 2,571,346
17,005 (3,766) (104,443) (105,564) -- -- 4,049,930
166,165 20,847 (145,596) 284,688 517,461 -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
773,977 209,825 849,290 742,373 1,572,232 83,842 14,600,200
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(193,666) (20,806) (665,153) (41,726) (939,970) (110,873) (6,071,530)
5,352 2,134 (11,521) (5,179) (19,498) 222,388 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(188,314) (18,672) (676,674) (46,905) (959,468) 111,515 (6,071,530)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
585,663 191,153 172,616 695,468 612,764 195,357 8,528,670
2,190,446 159,667 2,506,538 704,232 3,585,466 891,406 32,963,414
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 2,776,109 $ 350,820 $ 2,679,154 $ 1,399,700 $ 4,198,230 $ 1,086,763 $ 41,492,084
============ ============ ============ ============ ============ ============ ============
</TABLE>
11
<PAGE> 14
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
FIDELITY MUTUAL FUNDS
----------------------------------------------
KAUFMAN
AND BROAD
STRONG TEMPLETON COMMON
GROWTH DEV. MARKETS STOCK MAGELLAN CONTRAFUND EQUITY INCOME
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Plan participants $ 68,480 $ 56,078 $ 375 $ 1,015,945 $ 673,374 $ 690,444
Employer 29,920 24,122 298 661,656 414,398 452,042
----------- ----------- ----------- ----------- ----------- -----------
98,400 80,200 673 1,677,601 1,087,772 1,142,486
Forfeitures (1,156) (624) -- (216,995) (167,679) (174,550)
----------- ----------- ----------- ----------- ----------- -----------
Net contributions 97,244 79,576 673 1,460,606 920,093 967,936
Investment income:
Interest & dividends 62,020 38,438 -- 620,581 419,314 468,449
Net appreciation
(depreciation) in fair
investments (14,055) (184,883) 237 1,392,253 384,744 1,480,905
Interfund transfers, net 293,529 695,175 9,437 (956,034) 271,365 117,773
----------- ----------- ----------- ----------- ----------- -----------
TOTAL ADDITIONS 438,738 628,306 10,347 2,517,406 1,995,516 3,035,063
----------- ----------- ----------- ----------- ----------- -----------
DEDUCTIONS:
Benefits paid to participants (807) (20,861) -- (1,426,353) (774,209) (1,042,803)
Loan activity, net (2,301) (12,897) 8 (32,718) (8,645) (22,161)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL DEDUCTIONS (3,108) (33,758) 8 (1,459,071) (782,854) (1,064,964)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS AVAILABLE FOR
PLAN BENEFITS 435,630 594,548 10,355 1,058,335 1,212,662 1,970,099
NET ASSETS AVAILABLE
FOR PLAN BENEFITS:
Beginning of year -- -- -- 8,158,234 3,076,001 6,409,795
----------- ----------- ----------- ----------- ----------- -----------
End of year $ 435,630 $ 594,548 $ 10,355 $ 9,216,569 $ 4,288,663 $ 8,379,894
=========== =========== =========== =========== =========== ===========
</TABLE>
12
<PAGE> 15
YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY MUTUAL FUNDS
- ----------------------------------------------------------------------------------------
INTERMEDIATE ASSET RETIREMENT PARTICIPANT
BOND OVERSEAS MANAGER LOW-PRICED MONEY MARKET LOANS TOTAL
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 244,691 $ 45,817 $ 318,581 $ 48,622 $ 400,411 -- $ 3,562,818
176,422 19,488 213,146 29,449 276,810 -- 2,297,751
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
421,113 65,305 531,727 78,071 677,221 -- 5,860,569
(20,023) (3,366) (91,718) (3,261) (19,628) -- (699,000)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
401,090 61,939 440,009 74,810 657,593 5,161,569
137,724 7,555 227,542 45,762 205,830 64,038 2,297,253
18,201 (172) 270,234 61,250 -- -- 3,408,714
(330,370) 97,521 (117,838) 566,317 (646,875) -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
226,645 166,843 819,947 748,139 216,548 64,038 10,867,536
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(209,883) (6,519) (452,605) (37,087) (878,565) (148,580) (4,998,272)
(13,624) (657) (38,124) (6,820) 11,101 126,838 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(223,507) (7,176) (490,729) (43,907) (867,464) (21,742) (4,998,272)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
3,138 159,667 329,218 704,232 (650,916) 42,296 5,869,264
2,187,308 -- 2,177,320 -- 4,236,382 849,110 27,094,150
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 2,190,446 $ 159,667 $ 2,506,538 $ 704,232 $ 3,585,466 891,406 $ 32,963,414
============ ============ ============ ============ ============ ============ ============
</TABLE>
13
<PAGE> 16
6. TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue
Service dated May 7, 1991, stating that the Plan is qualified, in form,
under Section 401(a) of the Internal Revenue Code (the "Code") and,
therefore, the related trust is exempt from taxation. Once qualified,
the Plan is required to operate in conformity with the Code to maintain
its qualification. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the Code
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
7. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has determined that it will be necessary to take
certain steps in order to ensure that the Plan's information systems
are prepared to handle year 2000 dates. The steps taken include
addressing internal systems that must be modified or replaced to
function properly. Both internal and external resources are being
utilized to replace or modify existing software applications, and test
the software and equipment for the year 2000 modifications. The Plan
Sponsor anticipates substantially completing this phase of the project
by June 1999. Costs associated with modifying software and equipment
are not estimated to be significant and will be paid by the Plan
Sponsor.
In addition, Plan management established formal communications with its
third party service providers to determine that they have developed
plans to address their own year 2000 problems as they relate to the
Plan's operations. If modification of data processing systems of either
the Plan, the Plan Sponsor, or its service providers are not completed
timely, the year 2000 problem could have a material impact on the
operations of the Plan. The Plan Sponsor's year 2000 project calls for
a year 2000-specific contingency plan to be developed. This plan is
expected to be completed by October 1999.
14
<PAGE> 17
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
CURRENT
INVESTMENT DESCRIPTION SHARES COST VALUE
- ---------------------------------------------------------- --------- --------- -----------
<S> <C> <C> <C>
Strong Capital Management - Strong Growth Fund 35,700 $ 702,850 $ 830,022
Franklin Templeton - Templeton Developing Markets Trust I 26,784 303,785 275,873
Kaufman and Broad Home Corporation* Common Stock 26,025 724,365 790,393
Fidelity Mutual Funds*:
Magellan Fund 110,987 10,995,053 13,409,477
Contrafund 114,440 5,664,975 6,499,042
Equity Income Fund 143,181 7,576,893 7,953,691
Intermediate Bond Fund 276,024 2,821,238 2,834,767
Overseas Fund 10,043 370,973 361,350
Asset Manager Fund 159,435 2,915,169 2,772,576
Low-Priced Stock Fund 62,441 1,522,051 1,426,783
Retirement Money Market Fund 4,278,147 4,278,147 4,278,147
Participant Loans* 6% to 10% interest rates -- -- 1,086,763
-----------
$42,518,884
===========
</TABLE>
*Party-in-interest to the Plan
15
<PAGE> 18
KAUFMAN AND BROAD HOME CORPORATION
AMENDED AND RESTATED 401(k) SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
-----------------
Category (iii) - Series of transactions in excess of 5% of plan assets
<TABLE>
<CAPTION>
NUMBER
OF TOTAL TOTAL
INVESTMENTS TRANSACTIONS PURCHASES SALES GAIN
----------------------- ---------- ---------- ----------
Purch Sales
--------- ---------
<S> <C> <C> <C> <C> <C>
Fidelity Mutual Funds*:
Magellan 179 128 $4,191,293 $2,894,693 $ 590,519
Contrafund 155 108 $2,718,255 $1,609,509 $ 210,954
Equity Income 159 125 $2,450,253 $3,463,011 $ 960,634
Intermediate Bond 121 86 $1,247,606 $ 651,224 $ 2,032
Asset Manager 134 106 $1,355,727 $1,072,101 $ 140,519
Retirement Money Market 151 126 $2,598,785 $1,969,929 --
</TABLE>
There were no Category (i), (ii) or (iv) reportable transactions.
*Party-in-interest to the Plan
16
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Kaufman and Broad Home Corporation
Amended and Restated
401(k) Savings Plan
Dated: June 29, 1999 by: /s/ Michael F. Henn
-----------------------------------
Michael F. Henn
Senior Vice President and
Chief Financial Officer
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
- ----------- ----------- -------------
<S> <C> <C>
23.1 Independent Auditor's Consent
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Amended and Restated 401(k) Savings Plan (No.
333-49307), of Kaufman and Broad Home Corporation of our report dated June 23,
1999 with respect to the financial statements and schedules of the Kaufman and
Broad Home Corporation Amended and Restated 401(k) Savings Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1998.
ERNST & YOUNG LLP
Los Angeles, California
June 29, 1999
