==============================================================================
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 June 30, 1997
-------------
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 (248) 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 July 31, 1997: 21,148,555
Total pages: 30
Listing of exhibits: 28
1
<PAGE>
PULTE CORPORATION
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets,
June 30, 1997 and December 31, 1996........................ 3
Condensed Consolidated Statements of Income,
Three and Six Months Ended June 30, 1997 and 1996......... 4
Condensed Consolidated Statement of Shareholders'
Equity, Six Months Ended June 30, 1997..................... 5
Condensed Consolidated Statements of Cash Flows,
Six Months Ended June 30, 1997 and 1996.................... 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 4. Submission of Matters to a Vote of Security Holders.... 28
Item 6. Exhibits and Reports on Form 8-K....................... 28
SIGNATURES..................................................... 29
2
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PULTE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($000's omitted)
June 30, December 31,
1997 1996
-------- ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Cash and equivalents ...................................... $ 81,746 $ 189,625
Unfunded settlements ...................................... 56,795 73,896
House and land inventories ................................ 1,151,148 1,017,262
Mortgage-backed and related securities .................... 42,947 47,113
Residential mortgage loans and other securities
available-for-sale ...................................... 126,153 170,443
Other assets .............................................. 375,192 342,726
Discontinued operations ................................... 138,682 144,076
---------- ----------
$1,972,663 $1,985,141
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities, including bank
overdrafts of $69,293 and $85,827 in 1997 and 1996,
respectively .......................................... $ 422,496 $ 439,578
Unsecured short-term borrowings ........................ 107,390 --
Collateralized short-term debt, recourse solely to
applicable subsidiary assets .......................... 117,974 154,136
Mortgage-backed bonds, recourse solely to applicable
subsidiary assets .................................... 41,260 45,304
Income taxes ........................................... 11,148 12,930
Subordinated debentures and senior notes ............... 394,994 391,175
Discontinued operations ................................ 106,442 112,745
---------- ----------
Total liabilities ................................... 1,201,704 1,155,868
Shareholders' equity ...................................... 770,959 829,273
---------- ----------
$1,972,663 $1,985,141
========== ==========
<FN>
The balance sheet at December 31, 1996 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 consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000's omitted, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Homebuilding .............................. $ 567,135 $ 568,672 $ 990,350 $ 980,003
Mortgage banking and financing,
interest and other ....................... 6,925 15,096 13,652 31,229
Corporate ................................. 2,255 4,588 4,013 9,643
---------- ---------- ---------- ----------
Total revenues .................... 576,315 588,356 1,008,015 1,020,875
---------- ---------- ---------- ----------
Expenses:
Homebuilding, principally cost of sales ... 538,883 540,449 953,101 943,212
Mortgage banking and financing, interest
and other ................................ 6,486 9,187 13,049 20,482
Corporate, net ............................ 10,342 11,169 19,254 21,016
---------- ---------- ---------- ----------
Total expenses .................... 555,711 560,805 985,404 984,710
---------- ---------- ---------- ----------
Income from continuing operations before
income taxes .............................. 20,604 27,551 22,611 36,165
Income taxes ................................ 7,932 11,150 8,705 14,656
---------- ---------- ---------- ----------
Income from continuing operations ........... 12,672 16,401 13,906 21,509
Income from discontinued thrift operations,
net of income taxes ....................... 1,201 1,793 2,204 3,765
---------- ---------- ---------- ----------
Net income .................................. $ 13,873 $ 18,194 $ 16,110 $ 25,274
========== ========== ========== ==========
Per share data:
Primary and fully-diluted:
Income from continuing operations ....... $ 0.59 $ 0.64 $ 0.62 $ 0.81
Income from discontinued operations ..... 0.05 0.07 0.10 0.14
---------- ---------- ---------- ----------
Net income .............................. $ 0.64 $ 0.71 $ 0.72 $ 0.95
========== ========== ========== ==========
Cash dividends declared ................... $ 0.06 $ 0.06 $ 0.12 $ 0.12
========== ========== ========== ==========
Weighted-average common shares outstanding:
Primary ................................. 21,517 25,703 22,494 26,477
========== ========== ========== ==========
Fully-diluted ........................... 21,578 25,703 22,511 26,477
========== ========== ========== ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($000's omitted)
(Unaudited)
Additional
Common Paid-in Unrealized Retained
Stock Capital Gains Earnings Total
--------- ---------- ---------- -------- -----
<S> <C> <C> <C> <C> <C>
Shareholders' Equity,
December 31, 1996 ................. $ 233 $ 57,516 $ 1,474 $ 770,050 $ 829,273
Exercise of stock options .......... 1 2,792 -- -- 2,793
Cash dividends declared ............ -- -- -- (2,658) (2,658)
Stock repurchases .................. (24) (6,015) -- (68,556) (74,595)
Change in income taxes on unrealized
gains on securities
available-for-sale ............... -- -- 36 -- 36
Net income ......................... -- -- -- 16,110 16,110
--------- --------- --------- --------- ---------
Shareholders' Equity, June 30, 1997 $ 210 $ 54,293 $ 1,510 $ 714,946 $ 770,959
========= ========= ========= ========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($000's omitted)
(Unaudited)
Six Months Ended
June 30,
----------------
1997 1996
---- ----
<S> <C> <C>
Continuing operations:
Cash flows from operating activities:
Income from continuing operations ........................ $ 13,906 $ 21,509
Adjustments to reconcile income from continuing operations
to net cash flows used in operating activities:
Amortization, depreciation and other ............... 3,553 3,267
Deferred income taxes .............................. 5,136 2,449
Gain on sale of securities ......................... -- (9,993)
Increase (decrease) in cash due to:
Inventories .................................. (127,455) (113,212)
Residential mortgage loans held for sale ..... 44,290 40,145
Other assets ................................. (35,633) (28,859)
Accounts payable and accrued liabilities ..... (9,710) 36,774
Income taxes ................................. (1,053) 8,142
--------- ---------
Net cash used in operating activities ....................... (106,966) (39,778)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of securities available-for-sale ...... -- 168,085
Principal payments of mortgage-backed securities ......... 4,145 14,461
Decrease (increase) in funds held by trustee ............. (72) 4,038
Other, net ............................................... 1 (9,559)
--------- ---------
Net cash provided by investing activities ................... 4,074 177,025
--------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds ...................... (4,638) (168,589)
Proceeds from borrowings ................................. 111,166 --
Repayment of borrowings .................................. (36,221) (24,069)
Stock repurchases ........................................ (74,595) (60,846)
Dividends paid ........................................... (2,658) (3,131)
Other, net ............................................... 1,959 300
--------- ---------
Net cash used in financing activities ....................... (4,987) (256,335)
--------- ---------
Net decrease in cash and equivalents-continuing operations .. $(107,879) $(119,088)
--------- ---------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (continued)
($000's omitted)
(Unaudited)
Six Months Ended
June 30,
----------------
1997 1996
---- ----
<S> <C> <C>
Discontinued Operations:
Cash flows from operating activities:
Income from discontinued operations ......................... $ 2,204 $ 3,765
Change in deferred income taxes ............................. (727) 56
Change in income taxes ...................................... 729 --
Other changes, net .......................................... (1,967) (4,471)
Cash flows from investing activities:
Purchase of securities available-for-sale ................... (12,912) (29,444)
Principal payments of mortgage-backed securities ............ 15,152 27,757
Net proceeds from sale of investments ....................... 3,219 4,100
Decrease in Covered Assets and FSLIC Resolution Fund (FRF)
receivables ............................................... 29,481 31,686
Cash flows from financing activities:
Increase (decrease) in deposit liabilities .................. (7,385) 5,919
Repayment of borrowings ..................................... (31,560) (31,560)
Increase (decrease) in Federal Home Loan Bank (FHLB) advances 3,650 (6,200)
--------- ---------
Net (decrease) increase in cash and equivalents-discontinued
operations .................................................... (116) 1,608
--------- ---------
Net decrease in cash and equivalents ........................... (107,995) (117,480)
Cash and equivalents at beginning of period .................... 192,202 295,163
--------- ---------
Cash and equivalents at end of period .......................... $ 84,207 $ 177,683
========= =========
Cash - continuing operations ................................... $ 81,746 $ 173,139
Cash - discontinued operations ................................. 2,461 4,544
--------- ---------
$ 84,207 $ 177,683
========= =========
Supplemental disclosure of cash flow information-cash paid
during the period for:
Interest, net of amount capitalized
Continuing operations ..................................... $ 9,988 $ 17,562
Discontinued operations ................................... 1,272 794
--------- ---------
$ 11,260 $ 18,356
========= =========
Income taxes ................................................ $ 4,291 $ 4,230
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
7
<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 direct subsidiaries consist of Pulte Financial Companies,
Inc. (PFCI) and Pulte Diversified Companies, Inc. (PDCI). PDCI's direct
subsidiaries are Pulte Home Corporation (Pulte) and First Heights Bank,
fsb (First Heights). Pulte Mortgage Corporation (Pulte Mortgage) is a
direct subsidiary of Pulte. The Company's continuing operations include
its homebuilding (Pulte) and financial services subsidiaries, which
include Pulte Mortgage (mortgage banking) and PFCI (financing). The
Company's thrift subsidiary, First Heights, has been classified as
discontinued operations (See Note 2).
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 six month period ended June 30, 1997,
are not necessarily indicative of the results that may be expected for
the year ended December 31, 1997. These financial statements should be
read in conjunction with the Company's consolidated financial statements
and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1996.
Certain 1996 classifications have been changed to conform with the 1997
presentation.
Significant accounting policies
In February 1997, the Financial Accounting Standards Board (FASB) adopted
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per
Share, which is effective for fiscal years ending after December 15,
1997. This statement replaces Accounting Principles Board (APB) Opinion
No 15, Earnings Per Share, and the presentation of primary earnings per
share (EPS) with a presentation of basic EPS. This statement also
requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic
EPS computation to the numerator and denominator of the diluted EPS
calculation. Basic EPS excludes dilution and is computed by dividing
income available to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS is computed
similarly to fully-diluted EPS pursuant to APB 15. Under SFAS No. 128,
the Company's basic and diluted EPS amounts would have been identical to
the primary and fully-diluted EPS amounts presented in its consolidated
statements of income for the three and six months ended June 30, 1997 and
1996.
2. Discontinued operations
Revenues of the Company's discontinued thrift operations for the three
and six months ended June 30, 1997, were $2,301 and $4,726, respectively.
Revenues for the comparable periods of 1996 were $2,991 and $6,290,
respectively. For the three and six months ended June 30, 1997,
discontinued thrift operations provided after-tax income of $1,201 and
$2,204, respectively. After-tax income for the comparable periods of 1996
were $1,793 and $3,765, respectively. Additional discounts of
approximately $1,600 at June 30, 1997, are being amortized into income
over the life of the related Federal Savings and Loan Insurance
Corporation (FSLIC) Resolution Fund (FRF) note at a rate of approximately
$1,200 per quarter.
8
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
3. Segment Information
Financial Services
----------------------------
Mortgage
Homebuilding Banking Financing Corporate Consolidated
------------ -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Six Months Ended June 30, 1997:
Continuing Operations:
Revenues:
Unaffiliated customers ........ $ 990,350 $ 11,733 $ 1,919 $ 4,013 $ 1,008,015
=========== =========== =========== =========== ===========
Income (loss) before
income taxes .................. $ 37,249 $ 675 $ (72) $ (15,241) $ 22,611
=========== =========== =========== =========== ===========
Three Months Ended June 30, 1997:
Continuing Operations:
Revenues:
Unaffiliated customers ........ $ 567,135 $ 5,987 $ 938 $ 2,255 $ 576,315
=========== =========== =========== =========== ===========
Income (loss) before
income taxes .................. $ 28,252 $ 469 $ (30) $ (8,087) $ 20,604
=========== =========== =========== =========== ===========
At June 30, 1997:
Identifiable assets ............. $ 1,484,360 $ 138,764 $ 43,379 $ 167,478 $ 1,833,981
=========== =========== =========== ===========
Assets of discontinued
operations ..................... 138,682
-----------
Total assets .................... $ 1,972,663
===========
Six Months Ended June 30, 1996:
Continuing Operations:
Revenues:
Unaffiliated customers ........ $ 980,003 $ 15,058 $ 16,171 $ 9,643 $ 1,020,875
=========== =========== =========== =========== ===========
Income (loss) before income
taxes ........................ $ 36,791 $ 551 $ 10,196 $ (11,373) $ 36,165
=========== =========== =========== =========== ===========
Three Months Ended June 30, 1996:
Continuing Operations:
Revenues:
Unaffiliated customers ........ $ 568,672 $ 7,535 $ 7,561 $ 4,588 $ 588,356
=========== =========== =========== =========== ===========
Income (loss) before
income taxes .................. $ 28,223 $ 94 $ 5,815 $ (6,581) $ 27,551
=========== =========== =========== =========== ===========
At June 30, 1996:
Identifiable assets ............. $ 1,261,589 $ 154,732 $ 59,980 $ 219,337 $ 1,695,638
=========== =========== =========== ===========
Assets of discontinued
operations ..................... 155,462
-----------
Total assets .................... $ 1,851,100
===========
</TABLE>
9
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
4. Commitments and contingencies
First Heights related litigation
The Company is a party to two lawsuits relating to First Heights' 1988
acquisition from the FSLIC, and First Heights' ownership of five failed
Texas thrifts. The first lawsuit (the "District Court Case") was filed on
July 7, 1995 in the United States District Court, Eastern District of
Michigan, by the FDIC against the Company, PDCI and First Heights
(collectively, the "Pulte Parties"). The second lawsuit (the "Court of
Federal Claims Case") was filed on December 26, 1996 in the United States
Court of Federal Claims (Washington, D.C.) by the Pulte Parties against
the United States. In the District Court Case, the FDIC seeks a
declaration of rights and other relief related to the assistance
agreement entered into between First Heights and the FSLIC. The FDIC is
the successor to FSLIC. The FDIC and the Pulte Parties 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 the five failed Texas
thrifts. The District Court Case 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 Pulte Parties dispute the
FDIC's claims and believe that a proper interpretation of the assistance
agreement limits the FDIC's participation in the tax benefits. The Pulte
Parties had filed an answer and a counterclaim, seeking, among other
things, a declaration that the FDIC has breached the assistance agreement
in numerous respects. On December 24, 1996, the Pulte Parties voluntarily
dismissed without prejudice certain of their claims in the District Court
Case and on December 26, 1996, initiated the Court of Federal Claims
Case.
The Court of Federal Claims Case contains essentially the same claims as
those that were voluntarily dismissed from the District Court Case. In
their complaint, the Pulte Parties assert breaches of contract on the
part of the United States in connection with the enactment of section
13224 of the Omnibus Budget Reconciliation Act of 1993. That provision
repealed portions of the tax benefits that the Pulte Parties claim they
were entitled to under the contract to acquire the failed Texas thrifts.
The Pulte Parties also assert certain other claims concerning the
contract, including claims that the Government (through the FDIC as
receiver) has improperly attempted to amend the failed thrifts'
pre-acquisition tax returns and that this attempt was made in an effort
to deprive the Pulte Parties of tax benefits they had contracted for, and
that the enactment of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 breached the Government's obligation not to
require contributions of capital greater than those required by the
contract.
Management believes that the First Heights related litigation will not
have a material adverse impact on the results of operations or financial
position of the Company.
5. 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, Pulte
Mortgage, 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 combining 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>
<TABLE>
<CAPTION>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
CONSOLIDATING BALANCE SHEET
June 30, 1997
Unconsolidated
--------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and equivalents ................. $ 872 $ 78,347 $ 2,527 $ -- $ 81,746
Unfunded settlements ................. -- 56,795 -- -- 56,795
House and land inventories ........... -- 1,151,148 -- -- 1,151,148
Mortgage-backed and related securities -- -- 42,947 -- 42,947
Residential mortgage loans and other
securities available-for-sale ....... -- -- 126,153 -- 126,153
Other assets ......................... 141,857 198,070 35,265 -- 375,192
Discontinued operations .............. -- -- 138,682 -- 138,682
Investment in subsidiaries ........... 879,789 13,599 901,314 (1,794,702) --
Advances receivable - subsidiaries ... 273,840 757 18,426 (293,023) --
----------- ----------- ----------- ----------- -----------
$ 1,296,358 $ 1,498,716 $ 1,265,314 $(2,087,725) $ 1,972,663
=========== =========== =========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued
liabilities ......................... $ 47,824 $ 342,311 $ 32,361 $ -- $ 422,496
Unsecured short-term borrowings ...... 107,390 -- -- -- 107,390
Collateralized short-term debt,
recourse solely to applicable
subsidiary assets ................... -- -- 117,974 -- 117,974
Mortgage-backed bonds, recourse
solely to applicable subsidiary
assets .............................. -- -- 41,260 -- 41,260
Income taxes ......................... 11,148 -- -- -- 11,148
Subordinated debentures and
senior notes ........................ 339,408 55,586 -- -- 394,994
Discontinued operations .............. 1,566 -- 104,876 -- 106,442
Advances payable - subsidiaries ...... 18,063 247,248 27,712 (293,023) --
----------- ----------- ----------- ----------- -----------
Total liabilities ............... 525,399 645,145 324,183 (293,023) 1,201,704
Shareholders' equity ................. 770,959 853,571 941,131 (1,794,702) 770,959
----------- ----------- ----------- ----------- -----------
$ 1,296,358 $ 1,498,716 $ 1,265,314 $(2,087,725) $ 1,972,663
=========== =========== =========== =========== ===========
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
CONSOLIDATING BALANCE SHEET
December 31, 1996
Unconsolidated
-----------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and equivalents ................. $ 114,585 $ 71,599 $ 3,441 $ -- $ 189,625
Unfunded settlements ................. -- 73,896 -- -- 73,896
House and land inventories ........... -- 1,017,262 -- -- 1,017,262
Mortgage-backed and related securities -- -- 47,113 -- 47,113
Residential mortgage loans and other
securities available-for-sale ....... -- -- 170,443 -- 170,443
Other assets ......................... 141,528 178,144 23,054 -- 342,726
Discontinued operations .............. -- -- 144,076 -- 144,076
Investment in subsidiaries ........... 859,866 23,425 878,540 (1,761,831) --
Advances receivable - subsidiaries ... 139,351 827 17,246 (157,424) --
------------ ---------- ----------- ----------- -----------
$ 1,255,330 $1,365,153 $ 1,283,913 $(1,919,255) $ 1,985,141
============ ========== =========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued
liabilities ......................... $ 51,731 $ 357,480 $ 30,367 $ -- $ 439,578
Collateralized short-term debt,
recourse solely to applicable
subsidiary assets ................... -- -- 154,136 -- 154,136
Mortgage-backed bonds, recourse
solely to applicable subsidiary
assets .............................. -- -- 45,304 -- 45,304
Income taxes ......................... 12,930 -- -- -- 12,930
Subordinated debentures and senior
notes ............................... 339,365 51,810 -- -- 391,175
Discontinued operations .............. 4,002 -- 108,743 -- 112,745
Advances payable - subsidiaries ...... 18,029 123,451 15,944 (157,424) --
------------ ---------- ----------- ----------- -----------
Total liabilities ............... 426,057 532,741 354,494 (157,424) 1,155,868
Shareholders' equity ................. 829,273 832,412 929,419 (1,761,831) 829,273
------------ ---------- ----------- ----------- -----------
$ 1,255,330 $1,365,153 $ 1,283,913 $(1,919,255) $ 1,985,141
============ ========== =========== =========== ===========
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
CONSOLIDATING STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
Unconsolidated
----------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------ ------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding ...................... $ -- $ 990,350 $ -- $ -- $ 990,350
Mortgage banking and financing,
interest and other ............... -- -- 13,652 -- 13,652
Corporate ......................... 1,172 2,841 -- -- 4,013
---------- ---------- ---------- ---------- ----------
Total revenues ..................... 1,172 993,191 13,652 -- 1,008,015
---------- ---------- ---------- ---------- ----------
Expenses:
Homebuilding:
Cost of sales .................... -- 844,514 -- -- 844,514
Selling, general and
administrative and other
expense ......................... -- 108,587 -- -- 108,587
Mortgage banking and financing,
interest and other ............... -- -- 13,049 -- 13,049
Corporate, net .................... 14,094 5,470 (310) -- 19,254
---------- ---------- ---------- ---------- ----------
Total expenses ..................... 14,094 958,571 12,739 -- 985,404
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before income taxes
and equity in income of
subsidiaries ...................... (12,922) 34,620 913 -- 22,611
Income taxes (benefit) ............. (5,718) 13,866 557 -- 8,705
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before equity in
income (loss) of subsidiaries ..... (7,204) 20,754 356 -- 13,906
Income (loss) from discontinued
operations ........................ 3,427 -- (1,223) -- 2,204
---------- ---------- ---------- ---------- ----------
Income (loss) before equity in
income (loss) of subsidiaries ..... (3,777) 20,754 (867) -- 16,110
---------- ---------- ---------- ---------- ----------
Equity in income (loss) of
subsidiaries:
Continuing operations ............ 21,110 405 20,754 (42,269) --
Discontinued operations .......... (1,223) -- -- 1,223 --
---------- ---------- ---------- ---------- ----------
19,887 405 20,754 (41,046) --
---------- ---------- ---------- ---------- ----------
Net income ......................... $ 16,110 $ 21,159 $ 19,887 $ (41,046) $ 16,110
========== ========== ========== ========== ==========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended June 30, 1997
Unconsolidated
-------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding .......................... $ -- $567,135 $ -- $ -- $567,135
Mortgage banking and financing,
interest and other ................... -- -- 6,925 -- 6,925
Corporate ............................. 382 1,873 -- -- 2,255
-------- -------- -------- -------- --------
Total revenues ......................... 382 569,008 6,925 -- 576,315
-------- -------- -------- -------- --------
Expenses:
Homebuilding:
Cost of sales ........................ -- 484,509 -- -- 484,509
Selling, general and administrative
and other expense ................... -- 54,374 -- -- 54,374
Mortgage banking and financing,
interest and other ................... -- -- 6,486 -- 6,486
Corporate, net ........................ 7,173 2,965 204 -- 10,342
-------- -------- -------- -------- --------
Total expenses ......................... 7,173 541,848 6,690 -- 555,711
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income taxes and
equity in income of subsidiaries ...... (6,791) 27,160 235 -- 20,604
Income taxes (benefit) ................. (3,248) 10,882 298 -- 7,932
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before equity in
income (loss) of subsidiaries ......... (3,543) 16,278 (63) -- 12,672
Income (loss) from discontinued
operations ............................ 1,707 -- (506) -- 1,201
-------- -------- -------- -------- --------
Income (loss) before equity in
income (loss) of subsidiaries ......... (1,836) 16,278 (569) -- 13,873
-------- -------- -------- -------- --------
Equity in income (loss) of
subsidiaries:
Continuing operations ................ 16,215 281 16,278 (32,774) --
Discontinued operations .............. (506) -- -- 506 --
-------- -------- -------- -------- --------
15,709 281 16,278 (32,268) --
-------- -------- -------- -------- --------
Net income ............................. $ 13,873 $ 16,559 $ 15,709 $(32,268) $ 13,873
======== ======== ======== ======== ========
</TABLE>
14
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
CONSOLIDATING STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
<TABLE>
<CAPTION>
Unconsolidated
-------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding .......................... $ -- $ 980,003 $ -- $ -- $ 980,003
Mortgage banking and financing,
interest and other ................... -- -- 31,229 -- 31,229
Corporate ............................. 4,451 4,500 692 -- 9,643
---------- ---------- ---------- ---------- ----------
Total revenues ......................... 4,451 984,503 31,921 -- 1,020,875
---------- ---------- ---------- ---------- ----------
Expenses:
Homebuilding:
Cost of sales ........................ -- 837,129 -- -- 837,129
Selling, general and administrative
and other expense ................... -- 106,083 -- -- 106,083
Mortgage banking and financing,
interest and other ................... -- -- 20,482 -- 20,482
Corporate, net ........................ 12,241 7,225 1,550 -- 21,016
---------- ---------- ---------- ---------- ----------
Total expenses ......................... 12,241 950,437 22,032 -- 984,710
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before income taxes and
equity in income of subsidiaries ...... (7,790) 34,066 9,889 -- 36,165
Income taxes (benefit) ................. (3,222) 13,626 4,252 -- 14,656
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before equity in income
of subsidiaries ....................... (4,568) 20,440 5,637 -- 21,509
Income from discontinued operations .... 2,647 -- 1,118 -- 3,765
---------- ---------- ---------- ---------- ----------
Income (loss) before equity in income
of subsidiaries ...................... (1,921) 20,440 6,755 -- 25,274
---------- ---------- ---------- ---------- ----------
Equity in income of subsidiaries:
Continuing operations ................. 26,077 331 20,440 (46,848) --
Discontinued operations ............... 1,118 -- -- (1,118) --
---------- ---------- ---------- ---------- ----------
27,195 331 20,440 (47,966) --
---------- ---------- ---------- ---------- ----------
Net income ............................. $ 25,274 $ 20,771 $ 27,195 $ (47,966) $ 25,274
========== ========== ========== ========== ==========
</TABLE>
15
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF OPERATIONS
For the three months ended June 30, 1996
Unconsolidated
--------------------------------------
Consolidated
Pulte Guarantor Non-Guarantor Eliminating Pulte
Corporation Subsidiaries Subsidiaries Entries Corporation
----------- ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Homebuilding ....................... $ -- $568,672 $ -- $ -- $568,672
Mortgage banking and financing,
interest and other ................ -- -- 15,096 -- 15,096
Corporate .......................... 1,643 2,611 334 -- 4,588
-------- -------- -------- -------- --------
Total revenues ...................... 1,643 571,283 15,430 -- 588,356
-------- -------- -------- -------- --------
Expenses:
Homebuilding:
Cost of sales ..................... -- 486,349 -- -- 486,349
Selling, general and
administrative and
other expense .................... -- 54,100 -- -- 54,100
Mortgage banking and financing,
interest and other ................ -- -- 9,187 -- 9,187
Corporate, net ..................... 5,986 4,073 1,110 -- 11,169
-------- -------- -------- -------- --------
Total expenses ...................... 5,986 544,522 10,297 -- 560,805
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income taxes and
equity in income of subsidiaries ... (4,343) 26,761 5,133 -- 27,551
Income taxes (benefit) .............. (1,889) 10,704 2,335 -- 11,150
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before equity in income
of subsidiaries .................... (2,454) 16,057 2,798 -- 16,401
Income from discontinued operations . 1,332 -- 461 -- 1,793
-------- -------- -------- -------- --------
Income (loss) before equity in income
of subsidiaries ................... (1,122) 16,057 3,259 -- 18,194
-------- -------- -------- -------- --------
Equity in income of subsidiaries:
Continuing operations .............. 18,855 57 16,057 (34,969) --
Discontinued operations ............ 461 -- -- (461) --
-------- -------- -------- -------- --------
19,316 57 16,057 (35,430) --
-------- -------- -------- -------- --------
Net income .......................... $ 18,194 $ 16,114 $ 19,316 $(35,430) $ 18,194
======== ======== ======== ======== ========
</TABLE>
16
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS
For the six months ended June 30, 1997
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 .. $ 13,906 $ 21,159 $ 21,110 $ (42,269) $ 13,906
Adjustments to reconcile income
from continuing operations to net
cash flows provided by (used in)
operating activities:
Equity in income of subsidiaries.. (21,110) (405) (20,754) 42,269 --
Amortization, depreciation and
other .......................... 43 3,210 300 -- 3,553
Deferred income taxes ............ 5,136 -- -- -- 5,136
Increase (decrease) in cash due to:
Inventories ...................... -- (127,455) -- -- (127,455)
Residential mortgage loans
available-for-sale .............. -- -- 44,290 -- 44,290
Other assets ..................... (4,408) (18,591) (12,634) -- (35,633)
Accounts payable and accrued
liabilities ..................... (3,643) (9,044) 2,977 -- (9,710)
Income taxes ..................... (15,477) 13,866 558 -- (1,053)
--------- --------- --------- --------- ---------
Net cash provided by (used in)
operating activities ............... (25,553) (117,260) 35,847 -- (106,966)
--------- --------- --------- --------- ---------
Cash flows from investing activities:
Principal payments of
mortgage-backed securities ........ -- -- 4,145 -- 4,145
Decrease in funds held by trustee .. -- -- (72) -- (72)
Dividends received from subsidiaries -- 10,500 -- (10,500) --
Investment in subsidiaries ......... -- (270) -- 270 --
Advances to affiliates ............. (120,065) 70 (956) 120,951 --
Other, net ......................... -- 1 -- -- 1
--------- --------- --------- --------- ---------
Net cash provided by (used in)
investing activities ............... (120,065) 10,301 3,117 110,721 4,074
--------- --------- --------- --------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds -- -- (4,638) -- (4,638)
Proceeds from borrowings ........... 107,390 3,776 -- -- 111,166
Repayment of borrowings ............ -- -- (36,221) -- (36,221)
Capital contributions from parent .. -- -- 270 (270) --
Advances from affiliates ........... 34 109,931 10,986 (120,951) --
Stock repurchases .................. (74,595) -- -- -- (74,595)
Dividends paid ..................... (2,658) -- (10,500) 10,500 (2,658)
Other, net ......................... 1,734 -- 225 -- 1,959
--------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities ............... 31,905 113,707 (39,878) (110,721) (4,987)
--------- --------- --------- --------- ---------
Net increase (decrease) in cash
and equivalents - continuing
operations ......................... $(113,713) $ 6,748 $ (914) $ -- $(107,879)
--------- --------- --------- --------- ---------
</TABLE>
17
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS (continued)
For the six months ended June 30, 1997
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 $ 2,204 $ -- $ (1,223) $ 1,223 $ 2,204
Change in deferred income taxes .... (727) -- -- -- (727)
Equity in loss of subsidiaries ..... 1,223 -- -- (1,223) --
Change in income taxes ............. 729 -- -- -- 729
Other changes, net ................. (3,429) -- 1,462 -- (1,967)
Cash flows from investing activities:
Purchase of securities available-
for-sale ....................... -- -- (12,912) -- (12,912)
Principal payments of mortgage-
backed securities .............. -- -- 15,152 -- 15,152
Net proceeds from sale of investment -- -- 3,219 -- 3,219
Decrease in Covered Assets and FRF
receivables .................... -- -- 29,481 -- 29,481
Cash flows from financing activities:
Increase in deposit liabilities .... -- -- (7,385) -- (7,385)
Repayment of borrowings ............ -- -- (31,560) -- (31,560)
Decrease in FHLB advances .......... -- -- 3,650 -- 3,650
--------- --------- --------- --------- ---------
Net decrease in cash and equivalents-
discontinued operations ............ -- -- (116) -- (116)
--------- --------- --------- --------- ---------
Net increase (decrease) in cash and
equivalents ........................ (113,713) 6,748 (1,030) -- (107,995)
Cash and equivalents at beginning of
period ............................. 114,585 71,599 6,018 -- 192,202
--------- --------- --------- --------- ---------
Cash and equivalents at end of
period ............................. $ 872 $ 78,347 $ 4,988 $ -- $ 84,207
========= ========= ========= ========= =========
</TABLE>
18
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS
For the six months ended June 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 ........ $ 21,509 $ 20,771 $ 26,077 $ (46,848) $ 21,509
Adjustments to reconcile income from
continuing operations to net cash
flows provided by (used in) operating
activities:
Equity in income of subsidiaries ....... (26,077) (331) (20,440) 46,848 --
Amortization, depreciation and other ... 43 2,904 320 -- 3,267
Deferred income taxes .................. 2,449 -- -- -- 2,449
Gain on sale of securities ............. -- -- (9,993) -- (9,993)
Increase (decrease) in cash due to:
Inventories ............................ -- (113,212) -- -- (113,212)
Residential mortgage loans
available-for-sale .................... -- -- 40,145 -- 40,145
Other assets ........................... (5,724) (23,623) 488 -- (28,859)
Accounts payable and accrued liabilities 4,954 37,955 (6,135) -- 36,774
Income taxes ........................... (9,689) 13,626 4,205 -- 8,142
--------- --------- --------- --------- ---------
Net cash provided by (used in) operating
activities ............................... (12,535) (61,910) 34,667 -- (39,778)
--------- --------- --------- --------- ---------
Cash flows from investing activities:
Proceeds from sale of securities
available-for-sale ...................... -- -- 168,085 -- 168,085
Principal payments of
mortgage-backed securities .............. -- -- 14,461 -- 14,461
Decrease in funds held by trustee ........ -- -- 4,038 -- 4,038
Dividends received from subsidiaries ..... -- 14,000 -- (14,000) --
Investment in subsidiaries ............... (1,524) -- -- 1,524 --
Advances to affiliates ................... (40,242) (502) 1,976 38,768 --
Other, net ............................... -- (6,397) (3,162) -- (9,559)
--------- --------- --------- --------- ---------
Net cash provided by (used in) investing
activities ............................... (41,766) 7,101 185,398 26,292 177,025
--------- --------- --------- --------- ---------
Cash flows from financing activities:
Payment of long-term debt and bonds ...... -- -- (168,589) -- (168,589)
Repayment of borrowings .................. -- (1,251) (22,818) -- (24,069)
Capital contributions from parent ........ -- -- 1,524 (1,524) --
Advances from affiliates ................. -- 52,872 (14,104) (38,768) --
Stock repurchases ........................ (60,846) -- -- -- (60,846)
Dividends paid ........................... (3,131) -- (14,000) 14,000 (3,131)
Other, net ............................... 163 -- 137 -- 300
--------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities ..................... (63,814) 51,621 (217,850) (26,292) (256,335)
--------- --------- --------- --------- ---------
Net increase (decrease) in cash and
equivalents - continuing operations ...... $(118,115) $ (3,188) $ 2,215 $ -- $(119,088)
--------- --------- --------- --------- ---------
</TABLE>
19
<PAGE>
PULTE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
($000's omitted)
(Unaudited)
5. Supplemental Guarantor Information (continued)
<TABLE>
<CAPTION>
CONSOLIDATING STATEMENT OF CASH FLOWS (continued)
For the six months ended June 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 $ 3,765 $ -- $ 1,118 $ (1,118) $ 3,765
Change in deferred income taxes .... 56 -- -- -- 56
Equity in income of subsidiaries ... (1,118) -- -- 1,118 --
Other changes, net ................. (2,703) -- (1,768) -- (4,471)
Cash flows from investing activities:
Purchase of securities available-
for-sale .......................... -- -- (29,444) -- (29,444)
Principal payments of mortgage-
backed securities ................. -- -- 27,757 -- 27,757
Net proceeds from sale of investment -- -- 4,100 -- 4,100
Decrease in Covered Assets and FRF
receivables ....................... -- -- 31,686 -- 31,686
Cash flows from financing activities:
Increase in deposit liabilities .... -- -- 5,919 -- 5,919
Repayment of borrowings ............ -- -- (31,560) -- (31,560)
Decrease in FHLB advances .......... -- -- (6,200) -- (6,200)
--------- --------- --------- --------- ---------
Net increase in cash and equivalents-
discontinued operations ............ -- -- 1,608 -- 1,608
--------- --------- --------- --------- ---------
Net increase (decrease) in cash
and equivalents .................... (118,115) (3,188) 3,823 -- (117,480)
Cash and equivalents at beginning
of period .......................... 220,782 71,012 3,369 -- 295,163
--------- --------- --------- --------- ---------
Cash and equivalents at end
of period .......................... $ 102,667 $ 67,824 $ 7,192 $ -- $ 177,683
========= ========= ========= ========= =========
</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 six month periods ended June 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Pre-tax income (loss):
Homebuilding operations .............. $ 28,252 $ 28,223 $ 37,249 $ 36,791
-------- -------- -------- --------
Financial Services operations:
Mortgage banking ................... 469 94 675 551
Financing activities ............... (30) 5,815 (72) 10,196
-------- -------- -------- --------
Total Financial Services ............. 439 5,909 603 10,747
-------- -------- -------- --------
Corporate ............................ (8,087) (6,581) (15,241) (11,373)
-------- -------- -------- --------
Pre-tax income from continuing operations 20,604 27,551 22,611 36,165
Income taxes ............................ 7,932 11,150 8,705 14,656
-------- -------- -------- --------
Income from continuing operations ....... 12,672 16,401 13,906 21,509
Income from discontinued operations ..... 1,201 1,793 2,204 3,765
-------- -------- -------- --------
Net income .............................. $ 13,873 $ 18,194 $ 16,110 $ 25,274
======== ======== ======== ========
Net income per share .................... $ .64 $ .71 $ .72 $ .95
======== ======== ======== ========
</TABLE>
A comparison of pre-tax income (loss) for the three and six month periods
ended June 30, 1997 and 1996 is as follows:
o Pre-tax income of the Company's homebuilding operations remained
substantially flat in relation to the similar periods of 1996, increasing
$29 and $458, respectively. The reportable periods were aided by
improvements in gross profit margins and in the operating results of
Builders Supply & Lumber (BSL), as well as proceeds from the settlement
of certain litigation and gains from various land sales. These factors
served to offset an increase in selling, general and administrative
expenses associated with three new market entries and growth in the
number of active selling communities.
o Pre-tax income of the Company's mortgage banking operations increased
$375 and $124, respectively, from the comparable periods of 1996. This is
principally due to a reduction in operating expenses resulting from the
conversion to centralized loan processing during 1996.
o Pre-tax income from the Company's financing activities decreased by
$5,845 and $10,268, respectively, from the comparable periods of 1996
primarily due to gains from the sales of collateral during the 1996
periods; no such sales took place during the first six months of 1997.
o Pre-tax loss from corporate operations increased $1,506 and $3,868,
respectively, from the comparable periods of 1996. These losses increased
primarily as a result of higher net interest expense and expenses
associated with the Company's strategic operating initiatives.
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 six month periods ended June 30, 1997
and 1996.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Unit settlements:
Pulte Home East ........... 1,720 1,626 3,066 2,772
Pulte Home Central ........ 1,015 1,191 1,736 2,173
Pulte Home West ........... 830 731 1,461 1,318
--------- --------- ---------- ----------
3,565 3,548 6,263 6,263
========= ========= ========== ==========
Net new orders - units:
Pulte Home East ........... 2,052 1,814 3,960 3,746
Pulte Home Central ........ 1,177 1,056 2,435 2,524
Pulte Home West ........... 930 719 1,930 1,566
--------- --------- ---------- ----------
4,159 3,589 8,325 7,836
========= ========= ========== ==========
Net new orders - dollars ... $ 680,000 $ 581,000 $1,346,000 $1,263,000
========= ========= ========== ==========
Backlog at June 30 - units:
Pulte Home East ........... 2,667 2,626
Pulte Home Central ........ 1,679 1,638
Pulte Home West ........... 1,164 971
---------- ----------
5,510 5,235
========== ==========
Backlog at June 30 - dollars $ 951,000 $ 886,000
========== ==========
Revenues ................... $ 567,135 $ 568,672 $ 990,350 $ 980,003
Cost of sales .............. (484,509) (486,349) (844,514) (837,129)
Selling, general and
administrative expense .... (55,757) (50,970) (109,662) (100,370)
Interest (A) ............... (4,086) (4,117) (7,438) (7,323)
Other income, net .......... 5,469 987 8,513 1,610
--------- --------- ---------- ----------
Pre-tax income ............. $ 28,252 $ 28,223 $ 37,249 $ 36,791
========= ========= ========== ==========
Average sales price ........ $ 159 $ 160 $ 158 $ 156
========= ========= ========== ==========
</TABLE>
The number of active selling communities as of the end of each respective
period are as follows:
<TABLE>
<S> <C>
June 30, 1997................ 428
March 31, 1997............... 406
December 31, 1996............ 392
September 30, 1996........... 387
June 30, 1996................ 378
<FN>
Note (A): The Company capitalizes interest cost into homebuilding
inventories and charges the interest to homebuilding interest expense when
the related inventories are closed.
</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, organized since January 1, 1997, as three operating
companies: Pulte Home East (PHE), 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 six month periods ended June 30, 1997.
Net new orders during the second quarter of 1997 increased by 570 units, or
approximately 16%, over the second quarter of 1996 to a Company second
quarter record of 4,159 units. Contributing to a majority of this increase
were Pulte's Canterbury Communities (site-built, affordable housing) and
Active Adult (mature buyer) initiatives (36%), new market entries (32%), and
certain lower Midwest markets (15%). For the six months ended June 30, 1997,
net new orders amounted to 8,325 units, which is a 6% increase over the
comparable period of the prior year. For this six-month period, the
Canterbury Communities and Active Adult initiatives and new market entries
contributed net new orders in excess of the consolidated net increase.
However, those increases were offset by a decrease in net new orders in
certain upper Midwest markets principally due to a shortfall of available
communities resulting from communities selling out faster than expected
during 1996 and a general decline in market demand. The year-over-year trend
of net new orders began to turn favorable in early April 1997, which the
Company believes is due primarily to the effects of a stable economy and a
supportive interest rate environment.
Unit settlements during the three and six month periods ended June 30, 1997,
remained flat relative to the comparable periods in 1996, which had increased
by 19% and 25%, respectively, over the similar periods of 1995. PHE and PHW
recorded positive comparisons over the prior year, principally as a result of
new market entries and the Canterbury Communities and Active Adult
initiatives. PHC recorded unfavorable comparisons with the comparable periods
of the prior year in certain upper Midwest markets, for similar reasons as
those previously mentioned, and in certain lower Midwest markets that were
affected by excessive rain and flooding.
The average selling price during the three month period ended June 30, 1997
was $159, a decrease from the average selling price of $160 in the comparable
period of the prior year, but an increase from an average selling price of
$157 recorded during the three month period ended March 31, 1997. Changes in
average selling price are due primarily to the mix of product closed during a
period.
Gross profit margins were 14.6% and 14.7% for the three and six month periods
ended June 30, 1997, respectively, compared with 14.5% and 14.6%,
respectively, in the similar periods of the prior year. The improvement in
gross profit margins is due in part to the Company's ongoing process
improvement initiatives, which are focused on lowering house costs through
improved operational efficiencies.
Selling, general and administrative expenses for the three and six month
periods ended June 30, 1997, increased $4,787, or 9%, and $9,292, or 9%,
respectively, over the comparable periods in 1996. These increases are
primarily related to the addition of expenses for three markets that were not
in operation during the first six months of 1996 (Jacksonville, Rhode Island,
and Southern California), as well as an increase in the number of selling
communities compared to the prior year.
Other income, net, includes gains on land sales, the pre-tax results of BSL
and other homebuilding-related expenses. For the three and six month periods
ended June 30, 1997, other income, net, was favorably impacted by
improvements of approximately $1,400 and $3,900, respectively, in the
operating results of BSL compared to the similar periods of a year ago, as
well as approximately $2,900 of proceeds from the settlement of certain
litigation.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Homebuilding Operations (continued):
Information related to interest in inventory is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest in inventory at beginning
of period.................................. $ 13,645 $ 13,050 $ 12,846 $ 12,261
Interest capitalized ....................... 5,953 4,488 10,104 8,483
Interest expensed .......................... (4,086) (4,117) (7,438) (7,323)
-------- -------- -------- --------
Interest in inventory at end of period ..... $ 15,512 $ 13,421 $ 15,512 $ 13,421
======== ======== ======== ========
<FN>
At June 30, 1997, Pulte owned approximately 29,200 lots in communities in
which homes are being constructed. In addition, Pulte had approximately
17,100 lots under option.
</TABLE>
Financial Services Operations:
Mortgage Banking Operations:
The Company's mortgage banking operations are conducted by Pulte Mortgage
Corporation (Pulte Mortgage). The following table presents mortgage
origination data for Pulte Mortgage:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Production:
Total originations:
Loans............................... 2,413 2,726 4,240 5,057
======== ======== ======== ========
Principal........................... $288,100 $326,700 $509,200 $591,200
======== ======== ======== ========
Funded originations:
Loans............................... 2,258 2,525 3,981 4,685
======== ======== ======== ========
Principal........................... $268,600 $296,900 $475,900 $537,900
======== ======== ======== ========
Originations for Pulte customers:
Loans............................... 1,820 1,742 3,192 3,163
======== ======== ======== ========
Principal........................... $225,200 $220,300 $397,600 $387,400
======== ======== ======== ========
</TABLE>
Mortgage origination volume for the three and six month periods ended June
30, 1997, decreased 11% and 15%, respectively, compared to the comparable
1996 periods. Pulte Mortgage has continued its emphasis on expanding in
Pulte's existing and new markets. As a result, the volume of originations for
Pulte customers has increased to 81% and 80% of funded originations,
respectively, for the three and six month periods ended June 30, 1997. This
compares to 69% and 68% of funded originations, respectively, for the similar
periods of 1996. Pulte Mortgage continues to hedge its mortgage pipeline in
the normal course of its business and there has been no change in Pulte
Mortgage's strategy or use of derivative financial instruments in this
regard. Primarily due to the decreases in non-funded mortgage origination
volume during the three and six months ended June 30, 1997, origination fee
revenues decreased $336, or 34%, and $594, or 33%, respectively, from the
comparable periods of the prior year.
During the three and six month periods ended June 30, 1997, marketing gains
from the sales of mortgages decreased by $769, or 18%, and $1,947, or 22%,
respectively, compared with the similar periods of 1996. These decreases are
attributable to a lower volume of servicing retained originations during the
first six months of 1997 as compared to the first six months of 1996.
24
<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):
During the three and six month periods ended June 30, 1997, Pulte Mortgage's
operating expenses decreased from the comparable periods of 1996 by 31% and
25% to $4,318 and $8,942, respectively. These reductions of expenses are the
result of Pulte Mortgage's centralization of its mortgage underwriting,
processing and closing functions in Denver, Colorado, through implementation
of a mortgage operations center (MOC) during 1996.
Net interest income decreased by approximately $300 in both the three and six
month periods ended June 30, 1997, as compared with the similar periods of a
year ago. This decrease resulted from a reduction in the number of funded
originations during 1997, as well as from dividends paid by Pulte Mortgage to
Pulte throughout 1996.
At June 30, 1997, loan application backlog was $367,300 compared with
$439,000 at June 30, 1996, and $246,000 at December 31, 1996.
Financing Activities:
The Company's secured financing operations are conducted by the
limited-purpose subsidiaries of Pulte Financial Companies, Inc. (PFCI). Such
subsidiaries have 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. At June 30, 1997, one bond series with a principal amount of
$41,260 was outstanding. For the three and six months ended June 30, 1997,
PFCI's pre-tax operating losses were $30 and $72, respectively. This compares
to pre-tax income of $5,815 and $10,196, respectively, for the comparable
periods of 1996. During the three and six month periods ended June 30, 1996,
PFCI recorded net gains on sales of collateral of $5,498 and $9,993,
respectively. No such sales took place during the first six months of 1997.
Net interest income continues to decrease as a result of lower average
outstanding balances on the collateral and bond portfolios.
Corporate:
Corporate is a non-operating business segment whose primary purpose is to
support the operations of the Company's subsidiaries as the internal source
of financing and by implementing and maturing strategic initiatives centered
on new business development and improving operating efficiencies. The Company
views this corporate function as a form of research and development, a
prelude to adding these initiatives to existing business segments or
necessitating the creation of new business segments. As a result, the
corporate segment's operating results will vary from quarter to quarter as
these strategic initiatives evolve.
The following table presents corporate results of operations for the three
and six month periods ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net interest expense......... $ 3,053 $ 1,244 $ 5,496 $ 2,212
Other corporate expenses, net 5,034 5,337 9,745 9,161
--------- -------- -------- ---------
Loss before income taxes..... $ (8,087) $ (6,581) $(15,241) $ (11,373)
======== ======== ======== =========
</TABLE>
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Corporate (continued):
The increase in pre-tax loss for the three and six month periods ended June
30, 1997, is due primarily to an increase in net interest expense over the
comparable prior year periods. The utilization of approximately $174,000 to
reacquire nearly 6.2 million shares of the Company's common stock during 1996
and the first six months of 1997 adversely affected net interest expense
comparisons. In addition, for the six months ended June 30, 1997, the Company
incurred $637 of additional strategic initiatives expense in pursuing
manufactured housing opportunities, expanding operations in Mexico and
evaluating additional international opportunities. During the three and six
months ended June 30, 1997, the Company recorded losses of $621 and $482,
respectively, related to its Mexico operations compared with losses of $590
and $626, respectively, in the comparable periods of 1996. For the three and
six months ended June 30, 1997, settlements of the Company's Mexico joint
ventures aggregated 378 units and 935 units, respectively, while settlements
of the comparable periods of 1996 aggregated 22 units and 70 units,
respectively.
Pulte conducts its Mexico homebuilding operations in the cities of Monterrey,
Juarez, Chihuahua, Nuevo Laredo, Reynosa, Matamoros and Mexico City through
three joint venture investments owned by a foreign subsidiary. In January
1996, the Company's Monterrey joint venture partner assigned its interest in
the joint venture to the Company. The Company's net investment in the
Monterrey venture approximated $2,800 as of June 30, 1997. The Company
intends to liquidate the Monterrey assets (2 communities) in the normal
course of business. The Company's Juarez joint venture is currently
developing 15 communities. Additionally, during 1996, the Company announced
that its Juarez joint venture had entered into two separate agreements to
construct homes in Mexico; one with Delphi Automotive Systems, a division of
General Motors Corporation (GM) and one with Sony Magneticos de Mexico, S.A.
de C.V., an affiliate of Sony Electronics, Inc. (Sony). The first unit
settlements under the GM contract are expected to commence in the fourth
quarter of 1997. The Company's net investment in the Juarez joint venture
approximated $11,600 as of June 30, 1997. Also during 1996, the Company
entered into a joint venture to build 20 middle income housing units in
Mexico City which are expected to begin closing in the third quarter of 1997.
The Company's net investment in this joint venture approximated $1,100 as of
June 30, 1997.
Liquidity and Capital Resources:
Continuing Operations:
The Company's net cash used in operating activities increased from $39,778
for the six months ended June 30, 1996 to $106,966 for the six months
ended June 30, 1997. This is principally due to an approximately $14,000
increase in the level of inventory purchases primarily associated with
continued expansion of Active Adult (mature buyer) and Canterbury
Communities (affordable site-built homes) product offerings and
the addition of three new markets, as previously mentioned, and the
use of an approximately $46,000 of cash to reduce accounts payable and
accrued liabilities. Net cash provided by investing activities decreased
from $177,025 for the six months ended June 30, 1996, to $4,074 for the
six months ended June 30, 1997, primarily as a result of an approximately
$168,000 decrease in proceeds from sales of available-for-sale and
mortgage-backed securities of PFCI. The Company's net cash used in
financing activities decreased from $256,335 for the six months ended
June 30, 1996, to $4,987 for the six months ended June 30, 1997. This
resulted primarily from an approximately $168,000 decrease in the amount
of PFCI's mortgage-backed bonds redeemed and an approximately $111,000
of proceeds from short-term borrowings, offset by an approximately
$12,000 increase in repaid borrowings and an approximately $14,000
increase in stock repurchases.
At June 30, 1997, the Company had cash and equivalents of $81,746 and total
indebtedness of $766,636. The Company's total indebtedness includes $339,408
of unsecured senior notes, $22,405 of unsecured senior subordinated
debentures, $107,390 of short-term borrowings under the Company's unsecured
revolving credit facility, other Pulte non-recourse and limited recourse debt
of $33,181 and $16,708, respectively, $88,310 of First Heights' deposits and
advances, $41,260 of mortgage-backed bonds payable for PFCI and $117,974 of
notes and drafts payable for Pulte Mortgage.
26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
($000's omitted)
Liquidity and Capital Resources (continued):
Continuing Operations (continued):
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, the unused portion of its
$250,000 committed unsecured revolving credit facility, and other committed
and uncommitted credit lines, which at June 30, 1997, consisted of $10,000
and $250,000 related to Pulte and Pulte Mortgage operations, respectively.
During the remainder of 1997, management anticipates that homebuilding and
corporate working capital requirements will be funded with internally
generated funds and the previously mentioned credit facilities. Additionally,
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 routinely monitors current
operational requirements and financial market conditions to evaluate the
utilization of available financing sources.
The Company finances its land acquisitions, development and construction
activities from internally generated funds and existing credit agreements.
The Company had a maximum borrowing of $130,000 under its $250,000 unsecured
revolving credit facility during the first six months of 1997, and $107,390
remained outstanding at June 30, 1997. Pulte Mortgage provides mortgage
financing for many of Pulte's home sales and uses its own funds and
borrowings made available pursuant to various committed and uncommitted
credit arrangements which, at June 30, 1997, amounted to $250,000, an amount
deemed adequate to cover foreseeable needs. There were approximately $117,974
of borrowings outstanding under the $250,000 (Pulte Mortgage) arrangement at
June 30, 1997. Mortgage loans originated by Pulte Mortgage are subsequently
sold, principally to outside investors. The Company anticipates that there
will be adequate mortgage financing available for purchasers of its homes.
As previously communicated, on April 16, 1997, the Company repurchased
2,325,000 shares of its common stock for approximately $73,000 from two
corporations controlled by James Grosfeld and his family, and also modified
certain existing agreements with Mr. Grosfeld. Funds for this repurchase were
principally obtained from the Company's unsecured revolving credit facility.
Additonally, during the three months ended June 30, 1997, the Company
repurchased 49,300 shares of its common stock under the August 20, 1996
repurchase authorization at an aggregate repurchase price of $1,414. Since
the fourth quarter of 1994, the Company has utilized $188,067 of available
cash and, to a lesser extent, funds drawn on its unsecured revolving credit
facility to reacquire 6,847,800 shares, or nearly 25% of its then-outstanding
common stock. Approximately 477,200 shares remain available for repurchase
under the most recent authorization.
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. 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 involved in litigation with the FDIC. The Company is
uncertain as to when this matter might be resolved. At June 30, 1997, the
Company had a remaining investment in First Heights of approximately $28,500.
27
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held on May 9, 1997.
The following matters were considered and acted upon, with the
results indicated below:
<TABLE>
<CAPTION>
Shares
Shares Withholding
Shares Voted Shares Authority
Election of Directors Voted For Against Abstaining To Vote
--------------------- --------- ------- ---------- -------
<S> <C> <C> <C> <C>
Michael D. Hollerbach 19,672,414 - 207,244 -
Alan E. Schwartz 19,671,732 - 207,926 -
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
Exhibit number and description Page Number
11 Statement Regarding Computation of
Per Share Earnings 30
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 June 30, 1997.
28
<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: August 13, 1997
29
<TABLE>
<CAPTION>
PULTE CORPORATION
EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(000's omitted, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Primary
<S> <C> <C> <C> <C>
Net income...................... $ 13,873 $ 18,194 $ 16,110 $ 25,274
======== ======== ======== ========
Weighted average common shares
outstanding.................. 21,382 25,491 22,334 26,237
Common stock equivalents - stock options 135 212 160 240
-------- -------- -------- --------
Total........................ 21,517 25,703 22,494 26,477
======== ======== ======== ========
Net income per share............ $ .64 $ .71 $ .72 $ .95
======== ======== ======== ========
Fully diluted
Net income ..................... $ 13,873 $ 18,194 $ 16,110 $ 25,274
======== ======== ======== ========
Weighted average common shares
outstanding.................. 21,382 25,491 22,334 26,237
Common stock equivalents - stock options 196 212 177 240
-------- -------- -------- --------
Total........................ 21,578 25,703 22,511 26,477
======== ======== ======== ========
Net income per share............ $ .64 $ .71 $ .72 $ .95
======== ======== ======== ========
</TABLE>
30
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 1997 AND
FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 81,746
<SECURITIES> 0
<RECEIVABLES> 56,795
<ALLOWANCES> 0
<INVENTORY> 1,151,148
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,972,663
<CURRENT-LIABILITIES> 0
<BONDS> 361,813<F1>
<COMMON> 210
0
0
<OTHER-SE> 770,749
<TOTAL-LIABILITY-AND-EQUITY> 1,972,663
<SALES> 990,350<F2>
<TOTAL-REVENUES> 1,008,015
<CGS> 884,514<F2>
<TOTAL-COSTS> 985,404
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,438<F3>
<INCOME-PRETAX> 22,611
<INCOME-TAX> 8,705
<INCOME-CONTINUING> 13,906
<DISCONTINUED> 2,204
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,110
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.72
<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 closed.
</TABLE>
