==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9804
PULTE CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2766606
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
33 Bloomfield Hills Pkwy., Suite 200,
Bloomfield Hills, Michigan 48304
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 647-2750
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
the filing requirements for the past 90 days.
YES __ X __ NO _______
Number of shares of common stock outstanding as of October 31, 1996:
23,264,155
Total pages: 32
Listing of exhibits: 30
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1
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<TABLE>
<CAPTION>
PULTE CORPORATION
INDEX
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited)
Condensed Consolidated Balance Sheets, September 30, 1996 and
December 31, 1995.......................................................... 3
Condensed Consolidated Statements of Income, Three and Nine Months Ended
September 30, 1996 and 1995................................................ 4
Condensed Consolidated Statement of Shareholders' Equity, Nine Months Ended
September 30, 1996......................................................... 5
Condensed Consolidated Statements of Cash Flows, Nine Months Ended
September 30, 1996 and 1995................................................ 6
Notes to Condensed Consolidated Financial Statements........................ 8
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................ 21
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K.................................... 30
SIGNATURES.................................................................. 31
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PULTE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($000's omitted)
September 30, December 31,
1996 1995
------------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Cash and equivalents ...................................... $ 118,899 $ 292,227
Unfunded settlements ...................................... 93,081 80,131
House and land inventories ................................ 1,064,752 859,735
Mortgage-backed and related securities .................... 56,180 254,170
Residential mortgage loans and other securities
available-for-sale ...................................... 133,531 178,302
Deferred income taxes ..................................... 139,964 76,304
Other assets .............................................. 184,097 150,985
Discontinued operations ................................... 158,060 156,617
---------- ----------
$1,948,564 $2,048,471
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities, including book
overdrafts of $72,236 and $60,976 in 1996 and 1995,
respectively ........................................ $ 439,794 $ 381,407
Collateralized short-term debt, recourse
solely to applicable subsidiary assets .............. 115,639 140,578
Mortgage-backed bonds, recourse solely to applicable
subsidiary assets ................................... 54,402 225,272
Income taxes ........................................... 13,819 45,397
Subordinated debentures and senior notes ............... 387,616 363,957
Discontinued operations ................................ 127,980 130,857
---------- ----------
Total liabilities ................................... 1,139,250 1,287,468
Shareholders' equity ...................................... 809,314 761,003
---------- ----------
$1,948,564 $2,048,471
========== ==========
<FN>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
See accompanying notes to condensed financial statements
</TABLE>
3
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<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Homebuilding ............................. $ 614,710 $ 520,937 $1,599,213 $1,294,005
Mortgage banking and financing:
Interest and other ..................... 9,247 15,488 40,476 36,366
Gain on sale of servicing .............. 2,413 17,734
Corporate, principally interest .......... 1,215 4,509 6,358 13,581
---------- ---------- ---------- ----------
Total revenues ................... 625,172 543,347 1,646,047 1,361,686
---------- ---------- ---------- ----------
Expenses:
Homebuilding, principally cost of sales .. 582,683 494,903 1,533,120 1,255,342
Mortgage banking and financing,
interest and other ..................... 7,915 14,067 28,397 41,413
Corporate, net ........................... 7,157 7,084 20,948 22,364
---------- ---------- ---------- ----------
Total expenses ................... 597,755 516,054 1,582,465 1,319,119
---------- ---------- ---------- ----------
Income from continuing operations before
income taxes ............................. 27,417 27,293 63,582 42,567
Income taxes ............................... 10,994 11,027 25,650 17,236
---------- ---------- ---------- ----------
Income from continuing operations .......... 16,423 16,266 37,932 25,331
Income from discontinued thrift operations,
net of income taxes ...................... 111,208 2,531 114,973 7,605
---------- ---------- ---------- ----------
Net income ................................. $ 127,631 $ 18,797 $ 152,905 $ 32,936
========== ========== ========== ==========
Per share data:
Primary and fully-diluted
Income from continuing operations ...... $ .68 $ .60 $ 1.48 $ .93
Income from discontinued operations .... 4.61 .09 4.47 .27
---------- ---------- ---------- ----------
Net income ............................. $ 5.29 $ .69 $ 5.95 $ 1.20
========== ========== ========== ==========
Cash dividends declared .................. $ .12 $ .12 $ .24 $ .24
========== ========== ========== ==========
Weighted-average common shares outstanding
Primary ................................ 24,141 27,213 25,692 27,375
========== ========== ========== ==========
Fully-diluted .......................... 24,141 27,228 25,692 27,394
========== ========== ========== ==========
<FN>
See accompanying notes.
</TABLE>
4
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<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
($000's omitted, except per share data)
(Unaudited)
Additional
Common Paid-in Unrealized Retained
Stock Capital Gains Earnings Total
------ ---------- ---------- --------- -----
<S> <C> <C> <C> <C> <C>
Shareholders' Equity, December 31, 1995 .. $ 270 $ 65,934 $ 8,223 $ 686,576 $ 761,003
Exercise of stock options ................ 237 237
Cash dividends declared .................. (5,963) (5,963)
Stock repurchases ........................ (35) (8,674) (83,854) (92,563)
Change in unrealized gains on securities
available-for-sale, net of income taxes
of $4,203 ............................. (6,305) (6,305)
Net income ............................... 152,905 152,905
--------- --------- --------- --------- ---------
Shareholders' Equity, September 30, 1996 . $ 235 $ 57,497 $ 1,918 $ 749,664 $ 809,314
========= ========= ========= ========= =========
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($000's omitted)
(Unaudited)
Nine Months Ended
September 30,
-----------------
1996 1995
---- ----
<S> <C> <C>
Continuing operations:
Cash flows from operating activities:
Income from continuing operations ........................ $ 37,932 $ 25,331
Adjustments to reconcile income from continuing operations
to net cash flows used in operating activities:
Amortization, depreciation and other ............... 5,481 5,786
Gain on sale of securities ......................... (10,285) (1,119)
Increase (decrease) in cash due to:
Inventories .................................. (205,017) (157,747)
Residential mortgage loans held for sale ..... 44,571 13,449
Other assets ................................. (43,132) (14,879)
Accounts payable and accrued liabilities ..... 58,999 49,388
Income taxes ................................. 19,736 13,804
--------- ---------
Net cash used in operating activities ....................... (91,715) (65,987)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of securities available-for-sale ...... 168,085 10,821
Proceeds from sale of securities held-to-maturity ........ 12,282 --
Principal payments of mortgage-backed securities ......... 17,681 35,498
Decrease (increase) in funds held by trustee ............. 4,261 (10,102)
Other, net ............................................... (12,517) (10,289)
--------- ---------
Net cash provided by investing activities ................... 189,792 25,928
--------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds ...................... (171,695) (39,320)
Proceeds from borrowings ................................. 23,595 17,293
Repayment of borrowings .................................. (25,052) (3,821)
Stock repurchases ........................................ (92,563) (11,707)
Dividends paid ........................................... (5,963) (6,484)
Other, net ............................................... 273 87
--------- ---------
Net cash used in financing activities ....................... (271,405) (43,952)
--------- ---------
Net decrease in cash and equivalents-continuing operations .. $(173,328) $ (84,011)
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
($000's omitted)
(Unaudited)
Nine Months Ended
September 30,
-----------------
1996 1995
---- ----
<S> <C> <C>
Discontinued Operations:
Cash flows from operating activities:
Income from discontinued operations .......................... $ 114,973 $ 7,605
Tax benefit of net operating losses .......................... (110,000) --
Other changes, net ........................................... (6,735) 12,981
Cash flows from investing activities:
Purchase of securities available-for-sale .................... (42,209) (44,901)
Principal payments of mortgage-backed securities ............. 36,696 20,701
Net proceeds from sale of investments ........................ 4,100
Decrease in Covered Assets and FSLIC Resolution Fund (FRF)
receivables ................................................ 31,215 31,804
Cash flows from financing activities:
Increase (decrease) in deposit liabilities ................... 5,212 (128,678)
Repayment of borrowings ...................................... (31,560) (31,560)
Increase (decrease) in Federal Home Loan Bank (FHLB) advances (2,200) 19,500
--------- ---------
Net decrease in cash and equivalents-discontinued operations .... (508) (112,548)
--------- ---------
Net decrease in cash and equivalents ............................ (173,836) (196,559)
Cash and equivalents at beginning of period ..................... 295,163 281,490
--------- ---------
Cash and equivalents at end of period ........................... $ 121,327 $ 84,931
========= =========
Cash - continuing operations .................................... $ 118,899 $ 75,581
Cash - discontinued operations .................................. 2,428 9,350
--------- ---------
$ 121,327 $ 84,931
========= =========
Supplemental disclosure of cash flow information-cash paid during
the period for:
Interest, net of amount capitalized
Continuing operations ...................................... $ 20,531 $ 21,814
Discontinued operations .................................... 1,744 9,482
--------- ---------
$ 22,275 $ 31,296
========= =========
Income taxes ................................................. $ 5,757 $ 3,404
========= =========
<FN>
See accompanying notes.
</TABLE>
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($000's omitted)
(Unaudited)
1. Basis of presentation and significant accounting policies
Basis of presentation
The condensed consolidated financial statements include the accounts of
Pulte Corporation (the Company), and all of its significant subsidiaries.
The Company's continuing operations include its homebuilding (Pulte Home
Corporation) and financial services subsidiaries, which include ICM
Mortgage Corporation (ICM) and Pulte Financial Companies, Inc. (PFCI). The
Company's thrift subsidiary, First Heights Bank, fsb (First Heights), has
been classified as discontinued operations (See Note 2). The Company's
direct subsidiaries consist of PFCI and Pulte Diversified Companies, Inc.
(PDCI). PDCI's direct subsidiaries are Pulte Home Corporation (Pulte) and
First Heights. ICM is a direct subsidiary of Pulte.
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1996 are
not necessarily indicative of the results that may be expected for the
year ended December 31, 1996. These financial statements should be read in
conjunction with the Company's consolidated financial statements and
footnotes thereto included in the Registrant Company and Subsidiaries'
annual report on Form 10-K for the year ended December 31, 1995.
Certain 1995 classifications have been changed to conform with the 1996
presentation.
2. Discontinued operations
The following table summarizes selected financial data of the Company's
discontinued thrift operation:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues ............................. $ 3,172 $ 4,547 $ 9,470 $ 16,930
Expenses ............................. (1,964) (2,016) (4,497) (9,325)
--------- --------- --------- ---------
1,208 2,531 4,973 7,605
Tax benefit of net operating losses .. 110,000 -- 110,000 --
--------- --------- --------- ---------
Income from discontinued operations .. $ 111,208 $ 2,531 $ 114,973 $ 7,605
========= ========= ========= =========
</TABLE>
During the three months ended September 30, 1996, the Company recognized,
as part of discontinued thrift operations, after-tax income of
approximately $110,000. Such income relates to tax benefits associated
with net operating losses. Certainty of realization of this amount is not
anticipated in the near term, is dependent upon various factors, and the
actual amount realized might be more or less than the amount recorded.
However, management believes that it is more likely than not that these
benefits will be realized.
8
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
3. Segment Information
<TABLE>
<CAPTION>
Financial Services
----------------------------------------------------------------
Mortgage
Homebuilding Banking
(Pulte) (ICM) Financing Corporate Consolidated
------------ -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Nine Months Ended September 30, 1996:
Continuing Operations:
Revenues:
Unaffiliated customers .............. $1,599,213 $ 22,725 $ 17,751 $ 6,358 $1,646,047
========== ======== ======== ========= ==========
Income (loss) before income taxes ..... $ 66,093 $ 1,465 $ 10,614 $ (14,590) $ 63,582
========== ======== ======== ========= ==========
Three Months Ended September 30, 1996:
Continuing Operations:
Revenues:
Unaffiliated customers .............. $ 614,710 $ 7,667 $ 1,580 $ 1,215 $ 625,172
========== ======== ======== ========= ==========
Income (loss) before income taxes ..... $ 32,027 $ 914 $ 418 $ (5,942) $ 27,417
========== ======== ======== ========= ==========
At September 30, 1996:
Identifiable assets ................... $1,370,488 $148,556 $ 56,439 $ 215,021 $1,790,504
========== ======== ======== =========
Assets of discontinued operations .... 158,060
----------
Total assets .......................... $1,948,564
==========
Nine Months Ended September 30, 1995:
Continuing Operations:
Revenues:
Unaffiliated customers .............. $1,294,005 $ 31,596 $ 22,504 $ 13,581 $1,361,686
========== ======== ======== ========= ==========
Income (loss) before income taxes ..... $ 38,663 $ 10,926 $ 1,761 $ (8,783) $ 42,567
========== ======== ======== ========= ==========
Three Months Ended September 30, 1995:
Continuing Operations:
Revenues:
Unaffiliated customers .............. $ 520,937 $ 9,830 $ 8,071 $ 4,509 $ 543,347
========== ======== ======== ========= ==========
Income (loss) before income taxes ..... $ 26,034 $ 2,451 $ 1,383 $ (2,575) $ 27,293
========== ======== ======== ========= ==========
At September 30, 1995:
Identifiable assets ................... $1,152,705 $141,553 $318,745 $ 139,342 $1,752,345
========== ======== ======== =========
Assets of discontinued operations ..... 153,944
----------
Total assets .......................... $1,906,289
==========
</TABLE>
9
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
4. Income taxes
The following table reconciles the expected federal income tax rate to the
effective income tax rate for continuing operations:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income taxes at federal statutory rate 35.0% 35.0% 35.0% 35.0%
Effect of state and other income taxes 5.1% 5.4% 5.3% 5.5%
---- ---- ---- ----
Effective rate ........................ 40.1% 40.4% 40.3% 40.5%
==== ==== ==== ====
</TABLE>
5. Commitments and contingencies
Federal Deposit Insurance Corporation
On July 7, 1995, a lawsuit was filed in the United States District Court,
Eastern District of Michigan, by the Federal Deposit Insurance Corporation
(FDIC) against the Company and its subsidiary PDCI and PDCI's subsidiary
First Heights.
The lawsuit seeks a declaration of rights under the assistance agreement
entered into between First Heights and the Federal Savings and Loan
Insurance Corporation (FSLIC). The FDIC is the successor to FSLIC. The
FDIC and Pulte disagree about the proper interpretation of provisions in
the assistance agreement which provide for sharing of certain tax benefits
achieved in connection with First Heights' 1988 acquisition and ownership
of five failed Texas thrifts from the FSLIC. The lawsuit also includes
certain other claims relating to the foregoing, including claims resulting
from the Company's and First Heights' amendment of a tax sharing and
allocation agreement between the Company and First Heights. The Company
disputes the FDIC's claims and believes that a proper interpretation of
the assistance agreement limits the FDIC's participation in the tax
benefits to amounts established on First Heights' books.
On September 8, 1995, the Company filed an answer and counter-claim in
this case. The Company intends to vigorously defend itself and pursue its
counter-claims. While it is impossible to verify the precise amount
requested by the FDIC at this time, the Company believes that even if the
FDIC were to prevail in its claims, it would not have a material adverse
effect on the financial condition or results of operations of the Company.
6. Supplemental Guarantor Information
The Company previously filed a universal shelf registration of up to
$250,000 of debt or equity securities of which $125,000 of 7.3% unsecured
Senior Notes were issued in October, 1995. In addition, the Company has
previously issued $100,000 of 7%, and $115,000 of 8.375% unsecured Senior
Notes. Such obligations to pay principal, premium, if any, and interest
are guaranteed jointly and severally on a senior basis by Pulte, all of
Pulte's wholly-owned homebuilding subsidiaries and Builders' Supply &
Lumber Co., Inc. which is a Pulte wholly-owned subsidiary (collectively,
the Guarantors). Such guarantees are full and unconditional. The principal
non-Guarantors include PDCI, the parent company of Pulte, ICM, a
wholly-owned subsidiary of Pulte, First Heights, and PFCI. See Note 1 for
additional information on the Company's Guarantor and non-Guarantor
subsidiaries.
Supplemental consolidating financial information of the Company,
specifically including such information for the Guarantors, is presented
below. Investments in subsidiaries are presented using the equity method
of accounting. Separate financial statements of the Guarantors are not
provided because management has concluded that the segment information
provides sufficient detail to allow investors to determine the nature of
the assets held by and the operations of the combined groups.
10
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING BALANCE SHEET
September 30, 1996
Unconsolidated
--------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and equivalents .................... $ 47,132 $ 70,435 $ 1,332 $ -- $ 118,899
Unfunded settlements .................... -- 93,081 -- -- 93,081
House and land inventories .............. -- 1,064,752 -- -- 1,064,752
Mortgage-backed and related securities .. -- -- 56,180 -- 56,180
Residential mortgage loans and other
securities available-for-sale .......... -- -- 133,531 -- 133,531
Land held for sale and future development -- 37,856 -- -- 37,856
Deferred income taxes ................... 141,242 -- (1,278) -- 139,964
Other assets ............................ 11,726 104,364 30,151 -- 146,241
Discontinued operations ................. -- -- 158,060 -- 158,060
Investment in subsidiaries .............. 767,782 24,944 808,239 (1,600,965) --
Advances receivable - subsidiaries ...... 290,345 745 41,388 (332,478) --
---------- ---------- ----------- ----------- ----------
$1,258,227 $1,396,177 $ 1,227,603 $(1,933,443) $1,948,564
========== ========== =========== =========== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities $ 44,010 $ 358,175 $ 37,609 $ -- $ 439,794
Collateralized short-term debt, recourse
solely to applicable subsidiary assets . -- -- 115,639 -- 115,639
Mortgage-backed bonds, recourse solely to
applicable subsidiary assets .......... -- -- 54,402 -- 54,402
Income taxes ............................ 13,819 -- -- -- 13,819
Subordinated debentures and senior notes 339,344 48,272 -- -- 387,616
Discontinued operations ................. 5,220 -- 122,760 -- 127,980
Advances payable - subsidiaries ......... 46,520 228,756 57,202 (332,478) --
---------- ---------- ----------- ----------- ----------
Total liabilities .................. 448,913 635,203 387,612 (332,478) 1,139,250
Shareholders' equity .................... 809,314 760,974 839,991 (1,600,965) 809,314
---------- ---------- ----------- ----------- ----------
$1,258,227 $1,396,177 $ 1,227,603 $(1,933,443) $1,948,564
========== ========== =========== =========== ==========
</TABLE>
11
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING BALANCE SHEET
December 31, 1995
Unconsolidated
---------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and equivalents .................... $ 220,782 $ 71,012 $ 433 $ -- $ 292,227
Unfunded settlements .................... -- 80,131 -- -- 80,131
House and land inventories .............. -- 859,735 -- -- 859,735
Mortgage-backed and related securities .. -- -- 254,170 -- 254,170
Residential mortgage loans and other
securities available-for-sale .......... -- -- 178,302 -- 178,302
Land held for sale and future development -- 36,980 -- -- 36,980
Deferred income taxes ................... 81,786 -- (5,482) -- 76,304
Other assets ............................ 4,899 76,230 32,876 -- 114,005
Discontinued operations ................. -- -- 156,617 -- 156,617
Investment in subsidiaries .............. 725,689 42,065 752,630 (1,520,384) --
Advances receivable - subsidiaries ...... 171,117 -- 14,942 (186,059) --
---------- ---------- ----------- ----------- ----------
$1,204,273 $1,166,153 $ 1,384,488 $(1,706,443) $2,048,471
========== ========== =========== =========== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities $ 35,369 $ 300,990 $ 45,048 $ -- $ 381,407
Collateralized short-term debt, recourse
solely to applicable subsidiary assets . -- -- 140,578 -- 140,578
Mortgage-backed bonds, recourse solely to
applicable subsidiary assets .......... -- -- 225,272 -- 225,272
Income taxes ............................ 45,397 -- -- -- 45,397
Subordinated debentures and senior notes 339,280 24,677 -- -- 363,957
Discontinued operations ................. 8,875 -- 121,982 -- 130,857
Advances payable - subsidiaries ......... 14,349 120,012 51,698 (186,059) --
---------- ---------- ----------- ----------- ----------
Total liabilities .................. 443,270 445,679 584,578 (186,059) 1,287,468
Shareholders' equity .................... 761,003 720,474 799,910 (1,520,384) 761,003
---------- ---------- ----------- ----------- ----------
$1,204,273 $1,166,153 $ 1,384,488 $(1,706,443) $2,048,471
========== ========== =========== =========== ==========
</TABLE>
12
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF OPERATIONS
For the nine months ended September 30, 1996
Unconsolidated
--------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding ............................. $ -- $1,599,213 $ -- $ -- $1,599,213
Mortgage banking and financing:
Interest and other .................... -- -- 40,476 -- 40,476
Corporate, principally interest .......... 5,458 -- 900 -- 6,358
--------- ---------- -------- -------- ----------
Total revenues ............................. 5,458 1,599,213 41,376 -- 1,646,047
--------- ---------- -------- -------- ----------
Expenses:
Homebuilding:
Cost of sales ......................... -- 1,363,362 -- -- 1,363,362
Selling, general and administrative and
other expense ....................... -- 169,758 -- -- 169,758
Mortgage banking and financing, interest
and other ................................ -- -- 28,397 -- 28,397
Corporate, net ............................ 18,580 -- 2,368 -- 20,948
--------- ---------- -------- -------- ----------
Total expenses ............................. 18,580 1,533,120 30,765 -- 1,582,465
--------- ---------- -------- -------- ----------
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries .......................... (13,122) 66,093 10,611 -- 63,582
Income taxes (benefit) ..................... (5,498) 26,468 4,680 -- 25,650
--------- ---------- -------- -------- ----------
Income (loss) from continuing operations
before equity in income of subsidiaries .. (7,624) 39,625 5,931 -- 37,932
Income from discontinued operations ........ 114,427 -- 546 -- 114,973
--------- ---------- -------- -------- ----------
Income before equity in income of
subsidiaries ............................. 106,803 39,625 6,477 -- 152,905
--------- ---------- -------- -------- ----------
Equity in income of subsidiaries:
Continuing operations .................... 45,556 879 39,625 (86,060) --
Discontinued operations .................. 546 -- -- (546) --
--------- ---------- -------- -------- ----------
46,102 879 39,625 (86,606) --
--------- ---------- -------- -------- ----------
Net income ................................. $ 152,905 $ 40,504 $ 46,102 $(86,606) $ 152,905
========= ========== ======== ======== ==========
</TABLE>
13
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended September 30, 1996
Unconsolidated
--------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding ............................. $ -- $614,710 $ -- $ -- $614,710
Mortgage banking and financing:
Interest and other .................... -- -- 9,247 -- 9,247
Corporate, principally interest .......... 1,007 -- 208 -- 1,215
--------- -------- -------- -------- --------
Total revenues ............................. 1,007 614,710 9,455 -- 625,172
--------- -------- -------- -------- --------
Expenses:
Homebuilding:
Cost of sales ......................... -- 521,773 -- -- 521,773
Selling, general and administrative and
other expense ....................... -- 60,910 -- -- 60,910
Mortgage banking and financing, interest
and other ............................. -- -- 7,915 -- 7,915
Corporate, net ........................... 6,340 -- 817 -- 7,157
--------- -------- -------- -------- --------
Total expenses ............................. 6,340 582,683 8,732 -- 597,755
--------- -------- -------- -------- --------
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries .......................... (5,333) 32,027 723 -- 27,417
Income taxes (benefit) ..................... (2,276) 12,841 429 -- 10,994
--------- -------- -------- -------- --------
Income (loss) from continuing operations
before equity in income of subsidiaries .. (3,057) 19,186 294 -- 16,423
Income (loss) from discontinued operations . 111,780 -- (572) -- 111,208
--------- -------- -------- -------- --------
Income (loss) before equity in income of
subsidiaries ............................. 108,723 19,186 (278) -- 127,631
--------- -------- -------- -------- --------
Equity in income of subsidiaries:
Continuing operations .................... 19,480 549 19,186 (39,215) --
Discontinued operations .................. (572) -- -- 572 --
--------- -------- -------- -------- --------
18,908 549 19,186 (38,643) --
--------- -------- -------- -------- --------
Net income ................................. $ 127,631 $ 19,735 $ 18,908 $(38,643) $127,631
========= ======== ======== ======== ========
</TABLE>
14
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF OPERATIONS
For the nine months ended September 30, 1995
Unconsolidated
--------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding ............................. $ -- $1,294,005 $ -- $ -- $1,294,005
Mortgage banking and financing:
Interest and other .................... -- -- 36,366 -- 36,366
Gain on sale of servicing ............. -- -- 17,734 -- 17,734
Corporate, principally interest .......... 12,319 -- 1,262 -- 13,581
-------- ---------- -------- -------- ----------
Total revenues ............................. 12,319 1,294,005 55,362 -- 1,361,686
-------- ---------- -------- -------- ----------
Expenses:
Homebuilding:
Cost of sales ......................... -- 1,108,904 -- -- 1,108,904
Selling, general and administrative and
other expense ....................... -- 146,438 -- -- 146,438
Mortgage banking and financing, interest
and other ............................. -- -- 41,413 -- 41,413
Corporate, net ........................... 19,484 2,880 -- 22,364
-------- ---------- -------- -------- ----------
Total expenses ............................. 19,484 1,255,342 44,293 -- 1,319,119
-------- ---------- -------- -------- ----------
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries .......................... (7,165) 38,663 11,069 -- 42,567
Income taxes (benefit) ..................... (3,250) 15,465 5,021 -- 17,236
-------- ---------- -------- -------- ----------
Income (loss) from continuing operations
before equity in income of subsidiaries . (3,915) 23,198 6,048 -- 25,331
Income from discontinued operations ........ 3,430 -- 4,175 -- 7,605
-------- ---------- -------- -------- ----------
Income (loss) before equity in income of
subsidiaries ............................. (485) 23,198 10,223 -- 32,936
-------- ---------- -------- -------- ----------
Equity in income of subsidiaries:
Continuing operations .................... 29,246 6,556 23,198 (59,000) --
Discontinued operations .................. 4,175 -- -- (4,175) --
-------- ---------- -------- -------- ----------
33,421 6,556 23,198 (63,175) --
-------- ---------- -------- -------- ----------
Net income ................................. $ 32,936 $ 29,754 $ 33,421 $(63,175) $ 32,936
======== ========== ======== ======== ==========
</TABLE>
15
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended September 30, 1995
Unconsolidated
--------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding .............................. $ -- $520,937 $ -- $ -- $520,937
Mortgage banking and financing:
Interest and other .................... -- -- 15,488 -- 15,488
Gain on sale of servicing ............. -- -- 2,413 -- 2,413
Corporate, principally interest ........... 4,112 -- 397 -- 4,509
------- -------- ------- -------- --------
Total revenues ............................. 4,112 520,937 18,298 -- 543,347
------- -------- ------- -------- --------
Expenses:
Homebuilding:
Cost of sales ......................... -- 445,625 -- -- 445,625
Selling, general and administrative and
other expense ....................... -- 49,278 -- -- 49,278
Mortgage banking and financing, interest
and other ............................. -- -- 14,067 -- 14,067
Corporate, net ............................ 6,482 -- 602 -- 7,084
------- -------- ------- -------- --------
Total expenses ............................. 6,482 494,903 14,669 -- 516,054
------- -------- ------- -------- --------
Income (loss) from continuing operations
before income taxes and equity in income
of subsidiaries ......................... (2,370) 26,034 3,629 -- 27,293
Income taxes (benefit) ..................... (875) 10,414 1,488 -- 11,027
------- -------- ------- -------- --------
Income (loss) from continuing operations
before equity in income of subsidiaries. (1,495) 15,620 2,141 -- 16,266
Income from discontinued operations ........ 1,509 -- 1,022 -- 2,531
------- -------- ------- -------- --------
Income before equity in income of
subsidiaries .............................. 14 15,620 3,163 -- 18,797
------- -------- ------- -------- --------
Equity in income of subsidiaries:
Continuing operations ..................... 17,761 1,471 15,620 (34,852) --
Discontinued operations ................... 1,022 -- -- (1,022) --
------- -------- ------- -------- --------
18,783 1,471 15,620 (35,874) --
------- -------- -------- -------- --------
Net income ................................. $18,797 $ 17,091 $18,783 $(35,874) $ 18,797
======= ======== ======= ======== ========
</TABLE>
16
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 30, 1996
Unconsolidated
----------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Continuing operations:
Cash flows from operating activities:
Income from continuing operations ........... $ 37,932 $ 40,504 $ 45,556 $(86,060) $ 37,932
Adjustments to reconcile income from
continuing operations to net cash flows
provided by (used in) operating activities:
Equity in subsidiaries ................... (45,556) (879) (39,625) 86,060 --
Amortization, depreciation and other ..... 64 4,477 940 -- 5,481
Gain on sale of securities ................ -- -- (10,285) -- (10,285)
Increase (decrease) in cash due to:
Inventories ............................... -- (205,017) -- -- (205,017)
Residential mortgage loans
available-for-sale ....................... -- -- 44,571 -- 44,571
Other assets .............................. (6,827) (36,967) 662 -- (43,132)
Accounts payable and accrued liabilities .. 8,641 57,185 (6,827) -- 58,999
Income taxes ................................. (11,334) 26,468 4,602 -- 19,736
--------- --------- --------- -------- ---------
Net cash provided by (used in) operating
activities .................................. (17,080) (114,229) 39,594 -- (91,715)
--------- --------- --------- -------- ---------
Cash flows from investing activities:
Proceeds from sale of securities
available-for-sale ......................... -- -- 168,085 -- 168,085
Proceeds from sale of securities held-to-
maturity ................................... -- -- 12,282 -- 12,282
Principal payments of
mortgage-backed securities ................. -- -- 17,681 -- 17,681
Decrease in funds held by trustee ........... -- -- 4,261 -- 4,261
Dividends received from subsidiaries ........ -- 18,000 -- (18,000) --
Investment in subsidiaries .................. (2,295) -- -- 2,295 --
Advances to affiliates ...................... (55,909) (749) (675) 57,333 --
Other, net .................................. -- (9,470) (3,047) -- (12,517)
--------- --------- --------- -------- ---------
Net cash provided by (used in) investing
activities .................................. (58,204) 7,781 198,587 41,628 189,792
--------- --------- --------- -------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds ......... -- -- (171,695) -- (171,695)
Proceeds from borrowings .................... -- 23,595 -- -- 23,595
Repayment of borrowings ..................... -- -- (25,052) -- (25,052)
Capital contributions from parent ........... -- -- 2,295 (2,295) --
Advances from affiliates .................... -- 82,276 (24,943) (57,333) --
Stock repurchases ........................... (92,563) -- -- -- (92,563)
Dividends paid .............................. (5,963) -- (18,000) 18,000 (5,963)
Other, net .................................. 160 -- 113 -- 273
--------- --------- --------- -------- ---------
Net cash provided by (used in)
financing activities ........................ (98,366) 105,871 (237,282) (41,628) (271,405)
--------- --------- --------- -------- ---------
Net increase (decrease) in cash and
equivalents - continuing operations ......... $(173,650) $ (577) $ 899 $ -- $(173,328)
--------- --------- --------- -------- ---------
</TABLE>
17
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS (continued)
For the nine months ended September 30, 1996
Unconsolidated
----------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Discontinued operations:
Cash flows from operating activities:
Income from discontinued operations $ 114,973 $ -- $ 546 $(546) $ 114,973
Equity in subsidiaries ............. (546) -- -- 546 --
Tax benefit of net operating losses (110,000) -- -- -- (110,000)
Other changes, net ................. (4,427) -- (2,308) -- (6,735)
Cash flows from investing activities:
Purchase of securities available-
for-sale .......................... -- -- (42,209) -- (42,209)
Principal payments of mortgage-
backed securities ................. -- -- 36,696 -- 36,696
Net proceeds from sale of investment -- -- 4,100 -- 4,100
Decrease in Covered Assets and FRF
receivables ....................... -- -- 31,215 -- 31,215
Cash flows from financing activities:
Increase in deposit liabilities .... -- -- 5,212 -- 5,212
Repayment of borrowings ............ -- -- (31,560) -- (31,560)
Decrease in FHLB advances .......... -- -- (2,200) -- (2,200)
--------- ------- -------- ----- ---------
Net decrease in cash and equivalents-
discontinued operations ............ -- -- (508) -- (508)
--------- ------- -------- ----- ---------
Net increase (decrease) in cash and
equivalents ........................ (173,650) (577) 391 -- (173,836)
Cash and equivalents at beginning of
period ............................. 220,782 71,012 3,369 -- 295,163
--------- ------- -------- ----- ---------
Cash and equivalents at end of period $ 47,132 $70,435 $ 3,760 $ -- $ 121,327
========= ======= ======== ===== =========
</TABLE>
18
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS
For the nine months ended September 30, 1995
Unconsolidated
----------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Continuing operations:
Cash flows from operating activities:
Income from continuing operations ........... $ 25,331 $ 29,754 $ 29,246 $(59,000) $ 25,331
Adjustments to reconcile income from
continuing operations to net cash flows
provided by (used in) operating activities:
Equity in subsidiaries .................. (29,246) (6,556) (23,198) 59,000 --
Amortization, depreciation and other .... 57 3,622 2,107 -- 5,786
Gain on sale of securities .............. -- -- (1,119) -- (1,119)
Increase (decrease) in cash due to:
Inventories ............................. -- (157,747) -- -- (157,747)
Residential mortgage loans
available-for-sale ................... -- -- 13,449 -- 13,449
Other assets ............................... 163 (15,188) 146 -- (14,879)
Accounts payable and accrued liabilities ... 1,832 41,033 6,523 -- 49,388
Income taxes ............................... (6,682) 15,465 5,021 -- 13,804
-------- --------- -------- -------- ---------
Net cash provided by (used in) operating
activities .................................. (8,545) (89,617) 32,175 -- (65,987)
-------- --------- -------- -------- ---------
Cash flows from investing activities:
Proceeds from sale of securities
available-for-sale ........................ -- -- 10,821 -- 10,821
Principal payments of mortgage-backed
securities ................................ -- -- 35,498 -- 35,498
Increase in funds held by trustee ........... -- -- (10,102) -- (10,102)
Dividends received from subsidiaries ........ 3,276 40,000 -- (43,276) --
Investment in subsidiaries .................. (2,286) -- -- 2,286 --
Advances to affiliates ...................... (68,937) (2,173) (2,785) 73,895 --
Other, net .................................. -- (9,365) (924) -- (10,289)
-------- --------- ------- -------- ---------
Net cash provided by (used in) investing
activities .................................. (67,947) 28,462 32,508 32,905 25,928
-------- --------- -------- -------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds ......... -- -- (39,320) -- (39,320)
Proceeds from borrowings .................... -- -- 17,293 -- 17,293
Repayment of borrowings ..................... -- (3,821) -- -- (3,821)
Capital contributions from parent ........... -- -- 2,286 (2,286) --
Advances from affiliates .................... -- 73,541 354 (73,895) --
Stock repurchases ........................... (11,707) -- -- -- (11,707)
Dividends paid .............................. (6,484) (43,276) 43,276 (6,484)
Other, net .................................. 87 -- -- -- 87
-------- --------- -------- -------- ---------
Net cash provided by (used in)
financing activities ........................ (18,104) 69,720 (62,663) (32,905) (43,952)
-------- --------- -------- -------- ---------
Net increase (decrease) in cash and
equivalents - continuing operations ......... $(94,596) $ 8,565 $ 2,020 $ -- $ (84,011)
-------- --------- -------- -------- ---------
</TABLE>
19
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
6. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS (continued)
For the nine months ended September 30, 1995
Unconsolidated
----------------------------------------- Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Discontinued operations:
Cash flows from operating activities:
Income from discontinued operations ..... $ 7,605 $ -- $ 4,175 $(4,175) $ 7,605
Equity in subsidiaries .................. (4,175) -- -- 4,175 --
Other changes, net ...................... (3,430) -- 16,411 -- 12,981
Cash flows from investing activities:
Purchase of securities available-for-sale -- -- (44,901) -- (44,901)
Principal payments of mortgage-
backed securities ...................... -- -- 20,701 -- 20,701
Decrease in Covered Assets and FRF
receivables ............................ -- -- 31,804 -- 31,804
Cash flows from financing activities:
Decrease in deposit liabilities ......... -- -- (128,678) -- (128,678)
Repayment of borrowings ................. -- -- (31,560) -- (31,560)
Increase in FHLB advances ............... -- -- 19,500 -- 19,500
-------- ------- --------- ------- ---------
Net decrease in cash and equivalents-
discontinued operations ................. -- -- (112,548) -- (112,548)
-------- ------- --------- ------- ---------
Net increase (decrease) in cash and
equivalents ............................. (94,596) 8,565 (110,528) -- (196,559)
Cash and equivalents at beginning of
period .................................. 115,546 43,547 122,397 -- 281,490
-------- ------- --------- ------- ---------
Cash and equivalents at end of period .... $ 20,950 $52,112 $ 11,869 $ -- $ 84,931
======== ======= ========= ======= =========
</TABLE>
20
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
($000's omitted, except per share data)
A summary of Pulte Corporation's operating results by business segment for the
three and nine month periods ended September 30, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Pre-tax income (loss):
Homebuilding operations:
Pulte Home Corporation ............. $ 32,027 $26,034 $ 66,093 $38,663
Financial Services operations:
Mortgage banking - ICM ............. 914 2,451 1,465 10,926
Financing activities ............... 418 1,383 10,614 1,761
-------- ------- -------- -------
Total Financial Services ............. 1,332 3,834 12,079 12,687
Corporate ............................ (5,942) (2,575) (14,590) (8,783)
-------- ------- -------- -------
Pre-tax income from continuing operations 27,417 27,293 63,582 42,567
Income taxes ............................ 10,994 11,027 25,650 17,236
-------- ------- -------- -------
Income from continuing operations ....... 16,423 16,266 37,932 25,331
Income from discontinued operations ..... 111,208 2,531 114,973 7,605
-------- ------- -------- -------
Net income .............................. $127,631 $18,797 $152,905 $32,936
======== ======= ======== =======
Net income per share .................... $ 5.29 $ .69 $ 5.95 $ 1.20
======== ======= ======== =======
</TABLE>
For the three and nine month periods ended September 30, 1996, pre-tax income
(loss) changed from the comparable periods of 1995 as follows:
o Pre-tax income of the Company's homebuilding operations increased by
$5,993 and $27,430, respectively, over the comparable periods of 1995.
Such increases are primarily the result of the increased volume of unit
settlements during 1996, coupled with an improved gross profit margin,
partially offset by a leveraged increase in selling, general and
administrative expenses.
o Pre-tax income of the Company's mortgage banking operations decreased
$1,537 and $9,461, respectively, from the comparable periods of 1995. This
is principally related to $10,148 of gains from the sale of core servicing
rights for the nine month period ended September 30, 1995. No core sales
occurred during the three month period ended September 30, 1995 or during
1996. The absence of gains from core sales during 1996 was in part offset
by an increase in marketing gains and the capitalization of mortgage
servicing rights which began on July 1, 1995, with the implementation of
Statement of Financial Accounting Standards (SFAS) No. 122, Accounting for
Mortgage Servicing Rights.
o Pre-tax income from the Company's financing activities (decreased)/
increased by $(965) and $8,853, respectively, over the comparable periods
of 1995 primarily due to timing of gains from the sales of collateral
during 1996 and 1995.
o Pre-tax loss from corporate operations increased $3,367 and $5,807,
respectively, from the comparable periods of 1995. Such increases are
related to higher net interest expense and administrative expenses related
to the Company's strategic operating initiatives.
o The increase in income from discontinued operations is due to recognition
of $110,000 of tax benefits associated with net operating losses.
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Homebuilding Operations:
The following table presents selected financial data for Pulte Home
Corporation (Pulte) for the three and nine month periods ended September 30,
1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Unit settlements:
Pulte Home North ................. 614 632 1,615 1,496
Pulte Home South ................. 1,157 813 2,968 2,134
Pulte Home Central ............... 1,217 1,273 3,390 2,975
Pulte Home West .................. 789 594 2,107 1,711
-------- -------- ---------- ----------
3,777 3,312 10,080 8,316
======== ======== ========== ==========
Net new orders - units:
Pulte Home North ................. 590 619 1,906 1,889
Pulte Home South ................. 1,285 1,102 3,732 2,864
Pulte Home Central ............... 896 1,434 3,420 4,014
Pulte Home West .................. 658 709 2,224 2,012
-------- -------- ---------- ----------
3,429 3,864 11,282 10,779
======== ======== ========== ==========
Net new orders - dollars .......... $538,000 $598,000 $1,804,000 $1,667,000
======== ======== ========== ==========
Backlog at September 30 - units:
Pulte Home North ................. 1,029 838
Pulte Home South ................. 1,715 1,285
Pulte Home Central ............... 1,317 1,786
Pulte Home West .................. 840 841
---------- ----------
4,901 4,750
========== ==========
Backlog at September 30 - dollars.. $ 810,000 $ 760,000
========== ==========
Revenues .......................... $614,710 $ 520,937 $1,599,213 $1,294,005
Cost of sales ..................... 521,773 445,625 1,363,362 1,108,904
Selling, general and
administrative expense ........... 55,367 46,722 156,328 134,969
Interest (A) ...................... 4,762 3,745 12,085 8,595
Other (income) expense, net ....... 781 (1,189) 1,345 2,874
-------- --------- ---------- ----------
Pre-tax income .................... $ 32,027 $ 26,034 $ 66,093 $ 38,663
======== ========= ========== ==========
Average sales price ............... $ 163 $ 157 $ 159 $ 156
======== ========= ========== ==========
<FN>
Note (A): The Company capitalizes interest cost into homebuilding inventories
and charges the interest to homebuilding interest expense when the related
inventories are sold.
</TABLE>
The number of active communities as of the end of each respective period
are as follows:
<TABLE>
<S> <C>
September 30, 1996........... 390
June 30, 1996................ 379
March 31, 1996............... 380
December 31, 1995............ 352
September 30, 1995........... 355
</TABLE>
22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Homebuilding Operations (continued):
Pulte conducts its domestic homebuilding operations through 41 markets in 25
states and Puerto Rico which are organized into four operating companies -
Pulte Home North (PHN), Pulte Home South (PHS), Pulte Home Central (PHC) and
Pulte Home West (PHW). No one individual market within the 41 markets
represented more than 10% of total Pulte net new orders, unit settlements or
revenues during the three and nine month periods ended September 30, 1996.
Net new orders during the third quarter of 1996 decreased approximately 11%
from the record level set during the third quarter of 1995, which was a 48%
increase over the same period in 1994. All operating companies experienced
slowdowns in net new order activity during the quarter, with the exception of
PHS which recorded a 17% increase in units compared with the third quarter of
1995 due to an increase in number of active communities and favorable response
to new product, especially in the Carolinas. The declining trend in net new
order rates has continued to date into the fourth quarter.
Due to the strong order activity experienced in the first four months of 1996,
net new orders during the nine months ended September 30, 1996 did not
decrease as significantly as those during the third quarter of 1996. For the
nine months ended September 30, 1996, net new orders decreased 5% compared
with the comparable period last year. Only PHC recorded net new orders less
than 1995 on a year-to-date basis, due in part to delays in start-up of new
projects. In the other operating companies, both existing and new markets have
contributed to the positive year-over-year net new order comparisons.
Settlements during the three and nine months ended September 30, 1996
increased 14% and 21%, respectively, over the same periods in 1995. The
settlement activity during the third quarter and first nine months of 1996 was
supported by the record backlog at December 31, 1995, as well as the strong
net new order activity during the first four months of 1996. Settlements in
PHN during the third quarter of 1996 were less than the same period of 1995
due to weather conditions which caused production delays during the quarter.
In PHC, the year-to-date decrease in net new orders resulted in third quarter
settlements which were less than the third quarter of 1995.
The average selling price during the third quarter of 1996 was $163, an
increase from the average selling price of $157 in the prior year quarter. The
increase in average selling price was due primarily to product mix, as all
operating companies except PHS had settlements on higher priced product.
Gross profit margins were 15.1% and 14.7% for the three and nine months ended
September 30, 1996, respectively, compared with 14.5% and 14.3%, respectively,
in the comparable prior year periods. During the first nine months of 1995,
the Company's gross profit margins were impacted by competitive market
conditions and excess industry inventory levels. The level of demand for new
housing experienced during the second half of 1995 and the first four months
of 1996, especially in certain PHS and PHC markets, resulted in improved gross
profit margins for units settled during the first nine months of 1996 as
compared to similar periods in 1995. In addition, the improvement in gross
profit margins for the third quarter and first nine months of 1996 is due in
part to the Company's ongoing process improvement initiatives focused on
lowering house costs through improved operational efficiencies. The continued
slowdown in net new order activity, together with competitive conditions in
many of the Company's markets, will challenge the Company's ability to achieve
sequential or year-over-year improvements in gross profit margins during the
fourth quarter of 1996.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Homebuilding Operations (continued):
Selling, general and administrative expenses for the three and nine months
ended September 30, 1996 increased $8,645 and $21,359, respectively, over the
same periods in 1995. The increase in selling, general and administrative
expenses for both the three and nine month periods is partially related to an
increase in the number of selling communities compared to the prior year. In
addition, selling, general and administrative expense for the three months
ended September 30, 1996 includes costs associated with weather delays
throughout several of our East Coast markets combined with expenses related to
two recently completed acquisitions in Jacksonville, Florida and Rhode Island.
As a percent of revenue, selling, general and administrative expense was
approximately 9.0% in the third quarters of 1996 and 1995. For the first nine
months of 1996, selling, general and administrative expense was 9.8% of
revenue, compared with 10.4% in the first nine months of 1995. The better
leverage on a year-to-date basis is a result of increased operating
efficiencies in both new and existing markets and increased unit settlements
in the Company's new markets.
Other expense, net, includes gains on land sales, the pre-tax results of
Builders' Supply & Lumber Co., Inc. (BSL) and other homebuilding-related
expenses. For the three and nine months ended September 30, 1995, the category
includes income from the settlement of certain litigation for amounts in
excess of the amounts previously included in the financial statements of the
Company. For the nine months ended September 30, 1996, other expense, net, was
favorably impacted by improved results for BSL compared to the same period a
year ago.
Effective July 1, 1996, the Company acquired certain assets of North Florida
Classic Homes of Jacksonville, Florida, which consisted of land and homes
under construction in 12 residential communities, as well as the right to use
the "North Florida Classic Homes" name in the Company's homebuilding
operations.
Effective September 1, 1996, the Company acquired certain assets of
LeBlanc Homes, Rhode Island's largest homebuilder. The acquisition includes
land and homes under construction in eight residential communities, seven of
which are located in Rhode Island and one in Plymouth County, Massachusetts.
The agreement also includes the right to use the "LeBlanc Homes" name in the
Company's homebuilding operations.
Information related to interest in inventory is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest in inventory at
beginning of period.................... $13,421 $ 11,867 $ 12,261 $ 8,053
Interest capitalized.................... 4,391 4,362 12,874 13,026
Interest expensed....................... (4,762) (3,745) (12,085) (8,595)
-------- -------- -------- -------
Interest in inventory at end of period.. $13,050 $ 12,484 $ 13,050 $12,484
======= ======== ======== =======
</TABLE>
At September 30, 1996, Pulte owned approximately 29,200 lots in communities in
which homes are being constructed. In addition, Pulte had approximately 16,800
lots under option.
24
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Financial Services Operations:
Mortgage Banking Operations:
The Company's mortgage banking operations are conducted by ICM Mortgage
Corporation (ICM).
The following table presents mortgage origination data for ICM:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Production:
Total originations:
Loans ....................... 2,628 3,039 7,685 8,011
======== ======== ======== ========
Principal ................... $320,800 $347,000 $912,000 $893,000
======== ======== ======== ========
Funded originations:
Loans ....................... 2,431 2,696 7,116 6,895
======== ======== ======== ========
Principal ................... $291,400 $300,700 $829,300 $746,700
======== ======== ======== ========
Originations for Pulte customers:
Loans ....................... 1,953 1,923 5,422 4,642
======== ======== ======== ========
Principal ................... $251,600 $237,000 $680,000 $571,300
======== ======== ======== ========
</TABLE>
Mortgage origination volume for the nine months ended September 30, 1996
increased 2% over the first nine months of 1995, while origination volume for
the third quarter decreased 8% from the prior year quarter. ICM has continued
its emphasis on expanding in Pulte's existing and new markets and, as a
result, the volume of originations for Pulte customers has increased,
comprising 75% of total production for the first nine months of 1996, compared
with 64% of total production for the same period in 1995. Origination volume
for Pulte customers was also higher for the three months ended September 30,
1996, compared with the same period in 1995. For both the three and nine
months ended September 30, 1996, originations for non-Pulte customers have
declined. ICM continues to hedge its mortgage pipeline in the normal course of
its business and there has been no change in ICM's strategy or use of
derivative financial instruments in this regard.
During the three and nine months ended September 30, 1996, pricing and
marketing gains increased by $540 and $10,079, respectively, compared with the
same periods of 1995. The increase was due in part to higher volume of
servicing retained originations during 1996 compared with 1995, and higher
market value of originated servicing rights. In addition, effective July 1,
1995, ICM adopted SFAS No. 122 which requires that the costs associated with
originating mortgage servicing rights be recognized as an asset, shifting the
gains from sale of servicing rights to sale of mortgage loans.
During the nine months ended September 30, 1995, ICM recorded pre-tax gains on
sales of its core mortgage servicing portfolio of $10,148, all of which was
recorded during the first half of 1995. In addition, as part of its normal
operations, during the three and nine month periods ended September 30, 1995,
ICM recorded gains on sale of non-core mortgage servicing rights of $2,413 and
$7,586, respectively. The sale of the core mortgage servicing portfolio and
the ongoing sale of servicing rights on a flow basis are the result of
repositioning ICM to concentrate on its primary business of providing mortgage
financing for Pulte's homebuyers. ICM expects to continue to sell mortgage
servicing rights as part of normal operations on a three to five month lag
from the time of origination.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Financial Services Operations (continued):
Mortgage Banking Operations (continued):
Servicing fee income for the three and nine month periods ended September 30,
1996 decreased from the comparable 1995 periods due to the sale of the core
mortgage servicing portfolio discussed above. Mortgage origination fees also
decreased due to a decrease in the amount of non-funded originations compared
with the prior year.
Net interest income decreased by $626 for the nine months ended September 30,
1996, compared with the first nine months of 1995, primarily due to dividends
paid by ICM to its parent, Pulte, throughout 1996 and during the first quarter
of 1995. The result of the dividends is an increased leverage position,
incurring higher interest expense and reducing net interest income. In the
three month period ended September 30, 1996, net interest income increased by
$146, as the effect of the dividend payments was offset by an increased
interest rate spread compared with the third quarter of 1995.
At September 30, 1996, loan application backlog was $342,000, compared with
$429,000 at September 30, 1995.
Financing Activities:
The Company's secured financing operations are conducted by Pulte Financial
Companies, Inc. (PFCI) through its subsidiary corporations. Prior to 1989, the
PFCI subsidiaries engaged in the acquisition of mortgage loans and
mortgage-backed securities financed principally through the issuance of
long-term bonds secured by such mortgage loans and mortgage-backed securities.
Since 1989, the PFCI subsidiaries have been liquidating their collateral
portfolios and related bonds outstanding. At September 30, 1996, two bond
series with an aggregate principal amount of $54,402 remained outstanding.
PFCI expects to recognize final financial statement impact of these last two
series over the course of the next several quarters. PFCI's pre-tax operating
income was $418 and $10,614, respectively, for the three and nine month
periods ended September 30, 1996, compared with $1,383 and $1,761,
respectively, for the comparable periods in 1995. During the three and nine
month periods ended September 30, 1996, PFCI recorded net gains on sales of
collateral of $292 and $10,285, respectively, compared with $1,119 during the
three and nine months ended September 30, 1995. Net interest income continues
to decrease as a result of lower average outstanding balances on the
collateral and bond portfolios. When PFCI completes the liquidation of its
collateral portfolios and related bonds outstanding, PFCI will cease to
operate.
26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Corporate:
Corporate is a non-operating business segment; it is the Company's internal
source of financing and also includes the following items:
o Income from investments, including the Company's share of Mexican
joint venture operations.
o Interest expense on the Company's long-term debt.
o Administrative expenses.
Corporate assets include equity investments in subsidiaries, and the Company's
working capital funds invested in short term cash investments and affiliate
advances. Its liabilities include senior and subordinated debt and income
taxes.
The following table presents corporate results of operations for the three and
nine month periods ended September 30, 1996 and 1995:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net interest expense......... $2,084 $ 154 $ 4,296 $ 350
Other corporate expenses, net 3,858 2,421 10,294 8,433
------ ------ ------- ------
Loss before income taxes..... $5,942 $2,575 $14,590 $8,783
====== ====== ======= ======
</TABLE>
The increased loss for the three and nine month periods ended September 30,
1996, compared with the same periods in 1995, is due to increased net interest
expense as a result of the issuance of $125,000 of 7.3% unsecured Senior Notes
in the fourth quarter of 1995, and additional administrative expenses related
to the Company's strategic operating initiatives, including Mexico operations.
During the three and nine month periods ended September 30, 1996, the Company
recorded losses of $266 and $892, respectively, compared with $59 and $1,411,
respectively, for the comparable periods in 1995. Included in Mexico's loss
for the three and nine month periods ended September 30, 1995 are the
Company's share of Mexico joint venture foreign currency losses which amounted
to $175 and $1,197, respectively. During the three and nine month periods
ended September 30, 1996, there were no significant foreign currency gains or
losses.
Pulte conducts its Mexico homebuilding operations in the cities of Monterrey,
Juarez and Mexico City through three joint venture investments owned by
foreign subsidiaries. In January 1996, the Company's Monterrey joint venture
partner assigned its interest in the joint venture to the Company. The Company
carries its net investment in the Monterrey venture at approximately $4,900 as
of September 30, 1996. The Company intends to liquidate the Monterrey assets
in the normal course of business. The Company carries its net investment in
the Juarez joint venture at approximately $6,300 as of September 30, 1996. On
October 2, 1996, the Company announced that its Juarez joint venture has
entered into an agreement with Sony Magneticos de Mexico, S.A. de C.V., an
affiliate of Sony Electronics Inc., to construct approximately 500 homes in
Mexico over the next several years for Sony Magnetico's employees. This is the
second such agreement into which the Company has entered. During the second
quarter, the Company's Juarez joint venture entered into an agreement with
Delphi Automotive Systems, a division of General Motors Corporation, to
construct up to 6,000 homes for GM's employees in Mexico over a three-year
period beginning in August 1997. The Company has also entered into a joint
venture to build 20 middle income housing units in Mexico City. The Company's
investment in this joint venture was $300 as of September 30, 1996.
27
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Liquidity and Capital Resources:
Continuing Operations:
The Company believes it has adequate financial resources and sufficient credit
facilities to meet its current working capital needs. Sources of the Company's
working capital include its cash, its $250,000 committed unsecured revolving
credit facility, the remaining outstanding balance of $22,405 of Pulte's
previously issued unsecured Senior Subordinated Debentures, due 1999, the
Company's $100,000, 7% unsecured Senior Notes, due 2003, the Company's
$115,000, 8.375% unsecured Senior Notes, due 2004 and the Company's $125,000,
7.3% unsecured Senior Notes, due 2005. In addition, the Company has other
committed and uncommitted credit lines, which at September 30, 1996 consisted
of $10,000 and $250,000 related to Pulte and ICM operations, respectively.
During 1996, management anticipates that homebuilding and corporate working
capital requirements will be funded with internally generated funds and the
previously mentioned debt.
In addition, the Company has on file with the Securities and Exchange
Commission a universal shelf registration which provides for up to an
additional $125,000 of debt or equity securities.
The Company finances its land acquisitions, development and construction
activities from internally generated funds and existing credit agreements.
There were no borrowings under the Company's $250,000 unsecured revolving
credit facility during the nine month period ended September 30, 1996. The
Company's mortgage banking subsidiary (ICM) provides mortgage financing for
many of its home sales. ICM uses its own funds and borrowings made available
pursuant to various committed and uncommitted credit arrangements which, at
September 30, 1996 amounted to $250,000, an amount deemed adequate to cover
foreseeable needs. There were approximately $87,417 of borrowings outstanding
under the $250,000 (ICM) arrangement at September 30, 1996. Mortgage loans
originated by ICM are subsequently sold, principally to outside investors. The
Company anticipates that there will be adequate mortgage financing available
for purchasers of its homes.
The following table depicts the status of the Company's share repurchase
program as of September 30, 1996:
<TABLE>
<CAPTION>
Share Repurchases
-------------------------------------------------
Authorization Year ended Months ended
-------------------------------- December 31, September 30, 1996
-------------------- ------------------------
Date # of Shares 1994 1995 Three Nine
------------- ---------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
November 1994 1,000,000 123,500 542,068 -- 334,432
March 1996 1,000,000 -- -- -- 1,000,000
April 1996 1,000,000 -- -- 54,100 1,000,000
July 1996 1,000,000 -- -- 1,000,000 1,000,000
August 1996 1,000,000 -- -- 213,000 213,000
--------- -------- --------- ---------- ----------
5,000,000 123,500 542,068 1,267,100 3,547,432
========= ======== ========= ========== ==========
Reacquisition price $ 2,403 $ 11,707 $ 31,717 $ 92,563
======== ========= ========== ==========
</TABLE>
Subsequent to September 30, 1996, the Company has repurchased 226,000 shares
related to the August 20, 1996 repurchase authorization at an aggregate
repurchase price of $6,047.
28
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Liquidity and Capital Resources (continued):
Discontinued Operations:
The Company's income taxes have been significantly impacted by its thrift
operations, principally because payments received from FSLIC Resolution Fund
(FRF) are exempt from federal income taxes.
During the three months ended September 30, 1996, the Company recognized, as
part of discontinued thrift operations, after-tax income of approximately
$110,000. Such income relates to tax benefits associated with net operating
losses. Certainty of realization of this amount is not anticipated in the near
term, is dependent upon various factors, and the actual amount realized might
be more or less than the amount recorded. However, management believes that it
is more likely than not that these benefits will be realized
The Company's thrift assets are subject to regulatory restrictions and are not
available for general corporate purposes. The final liquidation and wind-down
of the Company's thrift operations is dependent on the final resolution of
outstanding matters with the Federal Deposit Insurance Corporation (FDIC),
manager of FRF. The Company is currently negotiating with the FDIC and is
involved in litigation with the FDIC. Although there is no certainty as to the
time of resolution, the Company believes that this matter might be resolved
within the next twelve months. At September 30, 1996, the Company had a
remaining investment in First Heights of approximately $30,000.
29
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibit number and description Page Number
------------------------------ -----------
11 Statement Regarding Computation of
Per Share Earnings 32
27 Financial Data Schedule
All other exhibits are omitted from this report
because they are not applicable.
Reports on Form 8-K
The Company did not file any reports on Form 8-K during
the quarter ended September 30, 1996.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PULTE CORPORATION
/s/ MICHAEL D. HOLLERBACH
--------------------------
Michael D. Hollerbach
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ VINCENT J. FREES
--------------------------
Vincent J. Frees
Vice President and Controller
(Principal Accounting Officer)
Date: November 13, 1996
31
Exhibit 11
<TABLE>
<CAPTION>
PULTE CORPORATION
EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(000's omitted, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary
Net income .............................. $127,631 $ 18,797 $152,905 $ 32,936
======== ======== ======== ========
Weighted average common shares
outstanding .......................... 23,944 27,104 25,467 27,104
Common stock equivalents - stock options 197 109 225 271
-------- -------- -------- --------
Total ................................ 24,141 27,213 25,692 27,375
======== ======== ======== ========
Net income per share .................... $ 5.29 $ .69 $ 5.95 $ 1.20
======== ======== ======== ========
Fully diluted
Net income .............................. $127,631 $ 18,797 $152,905 $ 32,936
======== ======== ======== ========
Weighted average common shares
outstanding .......................... 23,944 27,104 25,467 27,104
Common stock equivalents - stock options 197 124 225 290
-------- -------- -------- --------
Total ............................ 24,141 27,228 25,692 27,394
======== ======== ======== ========
Net income per share .................... $ 5.29 $ .69 $ 5.95 $ 1.20
======== ======== ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1996
AND FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 118,899
<SECURITIES> 0
<RECEIVABLES> 93,081
<ALLOWANCES> 0
<INVENTORY> 1,064,752
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,948,564
<CURRENT-LIABILITIES> 0
<BONDS> 387,616<F1>
<COMMON> 235
0
0
<OTHER-SE> 809,079
<TOTAL-LIABILITY-AND-EQUITY> 1,948,564
<SALES> 1,599,213<F2>
<TOTAL-REVENUES> 1,646,047
<CGS> 1,363,362<F2>
<TOTAL-COSTS> 1,582,465
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,085<F3>
<INCOME-PRETAX> 63,582
<INCOME-TAX> 25,650
<INCOME-CONTINUING> 37,932
<DISCONTINUED> 114,973
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152,905
<EPS-PRIMARY> 5.95
<EPS-DILUTED> 5.95
<FN>
<F1> Bonds are comprised of subordinated debentures and senior notes.
<F2> Relates to homebuilding operations.
<F3> Relates to homebuilding operations. The Company capitalizes
interest cost into homebuilding inventories and charges the
interest to homebuilding interest expense when
the related inventories are sold.
</TABLE>
