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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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)

33 Bloomfield Hills Parkway, Suite 200
Bloomfield Hills, Michigan 48304
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:(248) 647-2750

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g)of the Act:
NONE
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K .

Aggregate market value of voting stock held by nonaffiliates of the registrant as of February 28, 2001: $1,075,620,546

Number of shares of common stock outstanding as of February 28, 2001: 41,889,620

Documents Incorporated by Reference

Applicable portions of the Proxy Statement for the 2001 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form.

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ITEM 1. BUSINESS

Pulte Corporation

Pulte Corporation (the “Company” or “Pulte”) is a publicly held holding company whose subsidiaries engage in the homebuilding and financial services businesses. Its assets consist principally of the capital stock of its subsidiaries, cash and investments. Its income primarily consists of dividends from its subsidiaries and interest on investments. The Company’s significant subsidiaries include Pulte Diversified Companies, Inc. (PDCI) and other subsidiaries which are engaged in the homebuilding business. PDCI’s operating subsidiaries include Pulte Home Corporation (PHC), Pulte International Corporation (International) and other subsidiaries which are engaged in the homebuilding business. PDCI’s non-operating thrift subsidiary, First Heights Bank, fsb (First Heights), is classified as a discontinued operation (See Note 4 of Notes to Consolidated Financial Statements). The Company also has a mortgage banking company, Pulte Mortgage Corporation (PMC), which is a subsidiary of PHC.

The Company has three reportable business segments: Homebuilding, Financial Services and Corporate. The Company’s Homebuilding segment consists of the following two business units:

The Company’s Financial Services segment consists principally of mortgage banking operations conducted through PMC and its subsidiaries.

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, to develop and implement strategic initiatives centered on new business development and operating efficiencies, and to provide the necessary administrative functions to support the Company as a publicly traded entity.

Financial information, including revenue, pre-tax income and identifiable assets of each of the Company’s business segments is included in Note 2 of Notes to Consolidated Financial Statements.

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Homebuilding Operations

Unit sales (settlements) and net new orders in any year are strongly influenced by local, regional and national market economic conditions.

Domestic Homebuilding

Pulte builds a wide variety of homes, including detached units, townhouses, condominium apartments and duplexes, with varying prices, models, options and lot sizes, all sold for use as principal residences. Since 1990, Pulte has more than tripled its annual unit closings, unit orders and unit backlog levels. Including 2000 sales of nearly 20,000 homes, the Company has closed over 275,000 homes since its inception.

During 1998, the Company acquired two homebuilders: Tennessee-based Radnor Homes and Florida-based DiVosta & Company. From March 25, 1998, through July 1, 1999, the Company conducted a joint venture for the building of active adult-style communities with Blackstone Real Estate Advisors (BRE), an affiliate of the Blackstone Group. Effective July 1, 1999, the Company purchased BRE’s interest in the net assets of the joint venture. In accordance with its operational strategy, the Company will continue to evaluate available strategic acquisition opportunities which coincide with its long-range goals.

As of December 31, 2000, Pulte’s Domestic Homebuilding operations offered homes for sale in 396 communities at sales prices ranging from $70,000 to over $1,200,000. Sales prices of homes currently offered for sale in 75% of Pulte’s communities fall within the range of $100,000 to $300,000 with a 2000 average unit selling price of $206,000. Sales of single-family detached homes, as a percentage of total unit sales, were 82%, 79% and 76% in 2000, 1999 and 1998, respectively. Pulte’s Domestic Homebuilding operations are geographically diverse to better insulate the Company from demand changes in individual markets. As of December 31, 2000, Pulte’s Domestic Homebuilding business operated in 41 markets spanning 25 states.

International Homebuilding

International Homebuilding operations are primarily conducted through subsidiaries of Pulte International Corporation in Puerto Rico and Mexico. During the fourth quarter of 2000, these operations expanded into Argentina; initial closings are expected during 2001. International Homebuilding product offerings focus on the demand of first-time buyers and social interest housing in Mexico and Puerto Rico, and also offer product for middle-to-upper income consumers in Puerto Rico and Argentina.

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Homebuilding Operations (continued)

International Homebuilding (continued)

In Mexico, the Company conducts business through five joint ventures. The largest of these ventures, Condak-Pulte S. de R.L. de C.V., is located in the city of Juarez. This Juarez-based venture is currently developing communities in several northern Mexican cities including Juarez, Chihuahua, Nuevo Laredo, Reynosa, Matamoros, Saltillo and Monterrey, under agreements with Delphi Automotive Systems, Sony Magneticos de Mexico, S.A. de C.V., an affiliate of Sony Electronics, and Centros Comerciales Soriana, S.A. de C. V. It also constructs housing for the general public.

Desarrollos Residenciales Turisticos, S.A. de C.V. another of the Company’s joint ventures in Mexico, is constructing primarily social interest housing in Central Mexico. The Queretaro-based venture is developing housing projects in the Bajio region surrounding Mexico City, including the cities of Puebla, Queretaro, San Jose Iturbide, San Juan del Rio and Zamora.

In Puerto Rico, homebuilding operations are principally conducted in the greater metropolitan San Juan submarkets and certain communities located in Caguas, Gurabo and Ponce. In September 1999, the Company entered into a joint venture agreement with Desarrolladores Urbanos (Canovanas), S. E., an established Puerto Rican special partnership created for the acquisition and development of 121 acres located in the municipality of Canovanas, Puerto Rico.

Land Acquisition and Development

Locations for development of homebuilding communities are selected after completing extensive market research, enabling Pulte to match the location and product offering with its targeted consumer group. Factors considered include proximity to developed areas, population and job growth patterns and, if applicable, estimated development costs. Pulte has historically managed the risk of controlling its land positions through use of option contracts and outright acquisition. Pulte typically controls land with the intent to complete sales of housing units within 24 months from the date of opening a community, except in the case of certain active-adult developments for which the completion of housing unit sales may require as much as 60 months from the date of opening a community. As a result, land is generally controlled after it is properly zoned and developed or is ready for development. In addition, Pulte disposes of owned land not required in its business. Where Pulte develops land, it engages directly in many phases of the development process, including land and site planning, obtaining environmental and other regulatory approvals, as well as constructing roads, sewers, water and drainage facilities, and other amenities. Pulte uses its staff and the services of independent engineers and consultants in its land development activities. Land development work is performed primarily by subcontractors and local government authorities which construct sewer and water systems in some areas. At December 31, 2000, Pulte’s Domestic and Puerto Rican Homebuilding operations owned approximately 40,000 lots in active communities and had approximately 34,100 lots under option.

Sales and Marketing

Pulte is dedicated to improving the quality and value of its Domestic homes through innovative proprietary architectural and community designs and state-of-the-art customer marketing techniques. Analyzing various qualitative and quantitative data obtained through extensive market research, Pulte segments its potential customers into well-defined buyer profiles. Once the demands of potential buyers are understood, Pulte links its home design and community development efforts to the specific lifestyle of each targeted consumer group.

In 2000, J.D. Power and Associates recognized Pulte’s Las Vegas and Chicago markets for ranking the highest in these respective markets in customer satisfaction in the J.D. Power and Associates 2000 New Home Builder Customer Satisfaction Study. The survey of six U.S. markets noted quality of workmanship/materials and the effectiveness of customer service representatives as the two factors that most heavily influenced the customer’s overall level of satisfaction. Building on the quality foundation is the Company’s recently launched brand development program with its “Three I’s on Quality” platform. In creating the homebuilding industry’s first national brand, the campaign supports the Company’s strategic direction and strengthens market visibility. The principles of Quality, Involvement, Integrity and Innovation establish the foundation for all customer contact, provide a focus for the Company’s activities and help create a consistency in all communications. A strong national brand will help Pulte further distinguish itself from the competition. Brand development projects have included a national home sweepstakes and sponsorship of a parade float at Macy’s Thanksgiving Day Parade^™.

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Homebuilding Operations (continued)

Sales and Marketing (continued)

To meet the demands of its various domestic customers, Pulte has established a solid design expertise for a wide array of product lines. Pulte believes that it is an innovator in the design of its homes, and it views its design capacity as an integral aspect of its marketing strategy. Pulte’s in-house architectural services teams and management, supplemented by outside consultants, are successful in creating distinctive design features, both in exterior facades, and interior options and features. One of Pulte’s strategies in certain markets is to offer “the complete house” in which all features shown in the home are included in the sales price. Standard features typically offered include vaulted ceilings, appliances, and a selection of flooring and carpet, which is chosen by the buyer.

The Company’s commitment to quality construction and resource efficiency is evident in all of its everyday business practices. The Company’s Tucson division was recently awarded the Energy Value Award from the National Association of Home Builders Research Center. In Tucson, the homes are “system engineered” to provide guaranteed heating and cooling costs. The homes feature optimum value engineering; R-20 walls; minimized ductwork runs, all kept within conditioned space; drought-resistant landscaping; and special windows to prevent solar heat gain.

Typically, Pulte’s own domestic sales team, together with outside sales brokers, are responsible for managing the customer through the sales process. Pulte has been committed to industry-leading customer service through a variety of quality initiatives, including the customer care program, which ensures that homeowners are comfortable at every stage of the building process. Using a seven-step, interactive process, homeowners are kept informed during their homebuilding and home owning experience. The steps include 1) a pre-construction meeting with the superintendent; 2) pre-dry wall frame walk; 3) quality assurance inspection; 4) first homeowner orientation; 5) 30-day follow-up after the close of the home; 6) three-month follow-up; and 7) an 11-month quality list after the close of the home. Fully furnished and landscaped model homes are used to showcase Pulte’s homes and their distinctive design features. Pulte has great success with the first-time buyer in the low to moderate price range; in such cases, financing under United States Government-insured and guaranteed programs is often used and is facilitated through PMC. Pulte also enjoys strong sales to the move-up buyer and, in certain markets, offers semi-custom homes in higher price ranges.

In addition, Pulte’s Homeowner for Life^™ strategy and philosophy has increased its business from those who have previously owned a Pulte home or been referred by a Pulte homeowner. In 2000, Pulte saw an increase to 31 percent of these repeat/referral buyers. That represents approximately $1 billion in revenues in 2000. Pulte introduces its homes to prospective buyers through a variety of media advertising, illustrated brochures and other advertising displays. Customers are also obtained through referrals from other Pulte customers. In addition, Pulte’s website, www.pulte.com, enables users to search for their home, obtain details regarding the local schools, services and other features, examine mortgage options using an online calculator, learn more about Pulte and communicate directly with the organization. Already, 2.5 million users have visited www.pulte.com in 2000.

Pulte’s international sales and marketing efforts focus on the identification of regions throughout Mexico, Puerto Rico and Argentina which are experiencing population and industrial growth. In Mexico and Puerto Rico, the demand for affordable and social interest housing is strong. In Mexico, the Juarez-based joint venture has entered into three separate agreements to construct affordable social interest housing with Delphi Automotive Systems, Sony Magneticos de Mexico, S. A. de C.V., an affiliate of Sony Electronics, Inc., and Centrol Comerciales Soriana, S. A. de C.V. In Puerto Rico, the strongest customer demand is for single-family detached homes, but affordable alternative product offerings include two story attached units (townhomes) and three-story condominium units with exterior stairs (walk-ups). The Argentine market offers a stable, growing economy, the highest per capita GDP in Latin America, low levels of competition and a very large residential market in Buenos Aires with available land and mortgage financing.

Construction

The construction process for Pulte’s domestic homes begins with the in-house design of the homes it sells. The building phase is conducted under the supervision of its on-site construction superintendents. The construction work is usually performed by subcontractors under contracts which, in many instances, cover both labor and materials on a fixed-price basis. Pulte believes that Pulte Preferred Partnerships (P^³), an extension of its quality assurance program, continues to establish new standards for contractor relations. Using a selective process, Pulte has teamed up with what it believes are premier contractors and suppliers to improve all aspects of the land development and house construction processes.

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Homebuilding Operations (continued)

Construction (continued)

Pulte maintains efficient construction operations by using standard materials and components from a variety of sources and, when possible, by building on contiguous lots. To minimize the effects of changes in construction costs, the subcontracting and purchasing of building supplies and materials are generally negotiated at or near the time when related sales contracts are signed. In addition, Pulte utilizes the leverage its size affords by actively negotiating its materials needs on a national or regional basis to minimize component production cost. The Company is also working to establish a more integrated system that can effectively link suppliers, contractors and the production schedule through various strategic business partnerships.

International housing consists primarily of reinforced poured concrete, concrete and ceramic block and/or brick construction with flat roofs and public water, electric and sanitary system connections. Building materials, supplies and components are sourced locally and the construction work is performed by general contractors and/or subcontractors under contracts, which in many cases, include both labor and materials.

Pulte cannot determine the extent to which necessary building materials will be available at reasonable prices in the future and has, on occasion, experienced shortages of skilled labor in certain trades and of building materials in some markets.

Competition and Other Factors

Pulte’s dedication to customer satisfaction is evidenced by its consumer and value-based brand approach to product development, and is something that the Company believes enables it to distinguish itself in the homebuilding industry and contributes to its long-term competitive advantage. The housing industry in the United States, however, is highly competitive. In each of Pulte’s market areas, there are numerous homebuilders with which it competes. Any provider of housing units, for-sale or to rent, including apartment builders, may be considered a competitor of the Company. Conversion of apartments to condominiums further provides certain segments of the population an alternative to traditional housing, as does the emergence and acceptance of manufactured housing. Pulte competes primarily on the basis of price, reputation, design, quality of its homes and location. The housing industry is cyclical and is affected by a number of economic and other factors including: (1) significant national and world events, which impact consumer confidence; (2) changes in interest rates; (3) changes in other costs associated with home ownership, such as property taxes and energy costs; (4) various demographic factors; (5) changes in federal income tax laws; and (6) changes in government mortgage financing programs. In addition to these factors, Pulte’s business and operations could be affected by unanticipated shifts in demand for new homes.

Pulte’s operations are subject to building, environmental and other regulations of various state, local and foreign governing authorities. For its homes to qualify for Federal Housing Administration (FHA) or Veterans Administration (VA) mortgages, Pulte must satisfy valuation standards and site, material and construction requirements of those agencies. Compliance by Pulte with federal, state and local laws relating to protection of the environment has had, to date, no material effect upon capital expenditures, earnings or the competitive position of Pulte. More stringent requirements could be imposed in the future on homebuilders and developers, thereby increasing the cost of compliance.

Financial Services Operations

The Company’s financial services operations are conducted by its mortgage banking and other financial subsidiaries.

Mortgage Banking

PMC is a mortgage bank which arranges financing through the origination of mortgage loans primarily for the benefit of Pulte’s domestic home buyers, but also to the general public. PMC also engages in the sale of such loans and the related servicing rights. PMC is a lender approved by the FHA and VA and is a seller/servicer approved by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and other investors. In its conventional mortgage lending activities, PMC generally follows underwriting guidelines established by FNMA and FHLMC.

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Financial Services Operations (continued)

Mortgage Banking (continued)

PMC’s mortgage underwriting, processing and closing functions are centralized in Denver, Colorado using a mortgage operations center (MOC) concept. PMC also uses a centralized telephone loan officer concept where the loan officers are centrally located at a mortgage application center (MAC) in Denver. Pulte sales representatives, who are the mortgage customers’ main contact, forward the loan applications to a MAC loan officer who calls the customer to complete the loan application and then forwards it to the MOC for processing. PMC believes both the MOC and the MAC improve the speed and efficiency of its mortgage operations, thereby improving profitability and allowing PMC to focus on creating mortgage opportunities with Pulte customers.

In originating mortgage loans, PMC initially uses its own funds and borrowings made available to it pursuant to various credit arrangements. Subsequently, PMC sells such mortgage loans and mortgage-backed securities to outside investors.

During the years ended December 31, 2000, 1999 and 1998, PMC originated mortgage loans for 56%, 55% and 56%, respectively, of the homes sold by Pulte. Such originations represented 83%, 79% and 73%, respectively, of PMC originations.

PMC sells its servicing rights on a flow basis through fixed price servicing sales contracts to reduce the risks inherent in servicing loans. This strategy results in PMC owning the servicing rights for only a short period of time, usually two to three months after the loan is originated, which substantially reduces impairment issues with respect to the fair value of these reported assets.

The mortgage industry in the United States is highly competitive. PMC competes with other mortgage companies and financial institutions to provide attractive mortgage financing to both Pulte customers and the general public. PMC, in originating and servicing mortgage loans, is subject to rules and regulations of the FHA, VA, GNMA, FNMA and FHLMC. The Internet is also becoming an increasingly important resource for homebuyers in obtaining financing as a number of companies now provide online approval for their customers. These Internet-based mortgage companies may also be considered competitors of PMC.

Discontinued Operations

During the first quarter of 1994, the Company adopted a plan of disposal for First Heights and announced its strategy to exit the thrift industry and increase its focus on housing and related mortgage banking. First Heights sold all but one of its 32 bank branches and related deposits to two unrelated purchasers. The sale was substantially completed during the fourth quarter of 1994. Although the Company in 1994, expected to complete the plan of disposal within a reasonable period of time, contractual disputes with the Federal Deposit Insurance Corporation (FDIC) prevented the prepayment of the Federal Savings and Loan Insurance Corporation Resolution Fund (FRF) notes, thereby precluding the Company from completing the disposal in accordance with its original plan. To provide liquidity for the sale, First Heights liquidated its investment portfolios and its single-family residential loan portfolio and, as provided in the Assistance Agreement, entered into a Liquidity Assistance Note (LAN) with the FDIC acting in its capacity as manager of the FRF notes. The LAN is collateralized by the FRF notes and bears interest at a rate indexed to the Texas Cost of Funds plus a spread. The LAN matured in September 1998; however, payment of this liability is temporarily withheld by First Heights pending resolution of all open matters with the FDIC. As discussed in Note 10 of Notes to Consolidated Financial Statements, the Company is involved in litigation with the FDIC and as part of this litigation, the parties have asserted various claims with respect to obligations under promissory notes issued by each of the parties in connection with the thrift acquisition and activities.

Since December 31, 1998, First Heights has no longer held any deposits, nor maintained an investment portfolio. First Heights’ day-to-day activities are principally devoted to supporting residual regulatory compliance matters and the litigation with the FDIC, and are not reflective of the active operations of the former thrift, such as maintaining traditional transaction accounts, (e.g., checking and savings accounts) or making loans. Accordingly, such operations are being presented as discontinued.

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Corporate

Corporate is a non-operating segment that is comprised of the Company and PDCI, both of which are holding companies. The primary purpose of Corporate is to support the operations of the Company’s subsidiaries as the internal source of financing, and to develop and implement strategic initiatives centered around new business development and operating efficiencies. Business development activities include the pursuit of additional domestic and international opportunities as well as the development of innovative building components and processes. Corporate also includes the activities associated with supporting a publicly traded company listed on the New York Stock Exchange.

Corporate assets include equity investments in its subsidiaries, short-term financial instruments and affiliate advances. Liabilities include senior and subordinated debt and income taxes. Corporate revenues consist primarily of investment earnings of excess funds, while its expenses include costs associated with supporting a publicly traded company and its subsidiaries’ operations, and investigating strategic initiatives.

Organization/Employees

All subsidiaries and operating units operate independently with respect to daily operations. Homebuilding real estate purchases and other significant homebuilding, mortgage banking, financing activities and similar operating decisions must be approved by the business unit and/or corporate senior management.

At December 31, 2000, the Company employed approximately 5,200 persons. Employees of the Company and its subsidiaries are not represented by any union. Subcontracted work, however, may be performed by union subcontractors. Homebuilding and mortgage banking management personnel are paid performance bonuses and incentive compensation. Performance bonuses are based on individual performance while incentive compensation is based on the performance of the applicable division or subsidiary. The Company’s corporate management personnel are paid incentive compensation based on overall performance of the Company (see Note 7 of Notes to Consolidated Financial Statements). Each subsidiary is given autonomy regarding employment of personnel, although the Company’s senior corporate management acts in an advisory capacity in the employment of subsidiary officers. The Company considers its employee and subcontractor relations to be satisfactory.

ITEM 2. PROPERTIES

The Company’s homebuilding and corporate headquarters are located at 33 Bloomfield Hills Parkway, Suite 200, Bloomfield Hills, Michigan 48304, where 34,559 square feet of office space is leased. The Company also leases 21,612 square feet of office space at 165 Kirts Boulevard, Troy, Michigan 48084 for certain centralized business support services. PMC’s corporate offices are located at 7475 South Joliet Street, Englewood, Colorado 80112. At this location, 51,000 square feet of office space is leased. Pulte homebuilding markets and PMC branch operations generally lease office space for their day-to-day operations. First Heights’ administrative office is located in 918 square feet of leased space at 2010 North Loop West, Suite 220, Houston, Texas 77018.

Because of the nature of Pulte’s homebuilding operations, significant amounts of property are held as inventory in the ordinary course of its homebuilding business. Such properties are not included in response to this Item.

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ITEM 3. LEGAL PROCEEDINGS

The Company is involved in various litigation incidental to its continuing business operations. Management believes that none of this litigation will have a material adverse impact on the results of operations or the financial position of the Company.

First Heights-related litigation

The Company is a party to three lawsuits relating to First Heights’ 1988 acquisition from the Federal Savings and Loan Insurance Corporation (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 Federal Deposit Insurance Corporation (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. The third lawsuit was filed by First Heights on January 10, 2000, in the United States District Court, Eastern District of Michigan against the FDIC regarding the amounts, including interest, the FDIC is obligated to pay First Heights on two promissory notes which had been executed by the FDIC’s predecessor, the FSLIC. The FDIC filed a motion to dismiss the case and on April 12, 2000, the District Court dismissed First Heights’ complaint. First Heights has appealed the Court’s ruling to the Sixth Circuit Court of Appeals and that appeal remains pending.

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 the 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 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.

On March 5, 1999, the United States District Court (the Court), entered a “Final Judgment” against First Heights and PDCI (the Court had previously ruled that Pulte Corporation was not liable for monetary damages to the FDIC) resolving by summary judgment in favor of the FDIC most of the FDIC’s claims against the Pulte Parties. The Final Judgment requires PDCI and First Heights to pay the FDIC monetary damages totaling approximately $221.3 million, including interest but excluding costs (such as attorneys fees) to be determined in the future by the District Court and post-judgment interest. However, the FDIC acknowledged that it has already paid itself or withheld from assistance its obligation to pay to First Heights approximately $105 million, excluding interest thereon. The Company believes that it is entitled to a credit or actual payment of such amount plus interest. The Final Judgment does not address this issue. The Company disagreed with the District Court’s rulings and appealed the decision to the Sixth Circuit Court of Appeals. The Company had previously disclosed that if the District Court’s final judgment were upheld in its entirety on appeal, the potential after-tax charge against Discontinued Operations, after giving effect to interest owed by the FDIC to First Heights, would approximate $88 million plus post judgment interest.

On October 12, 2000, the Sixth Circuit Court of Appeals rendered its opinion in which it affirmed in part, reversed in part and remanded the case to the District Court for further proceedings. The Sixth Circuit affirmed most of the District Court’s adverse liability rulings, including as to the sharing of certain tax benefits achieved in connection with First Heights’ 1988 acquisition and ownership of the five failed Texas thrifts and regarding the Company’s and First Heights’ amendment of a tax sharing and allocation agreement and rescission of a warrant assumption agreement between PDCI and First Heights. The Sixth Circuit, however, vacated the District Court’s damage calculations as to a number of issues, vacated the District Court’s pre-judgment interest award, and remanded to the District Court for a proper recalculation of all such amounts. The Sixth Circuit denied both the Company’s and the FDIC’s petition for rehearing. Since the Sixth Circuit opinion leaves certain significant issues to be resolved through further Court proceedings the Company is currently unable to precisely calculate the final amount it may owe. Based upon its reading of the Sixth Circuit opinion, however, the Company determined that an after-tax charge of $30 million to Discontinued Operations was appropriate in the third quarter. The final settlement with the FDIC may be more or less than amounts provided because the outcome of the remaining litigation issues is uncertain.

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ITEM 3. LEGAL PROCEEDINGS (continued)

First Heights-related litigation (continued)

The Company does not believe that the claims in the Court of Federal Claims Case are in any way prejudiced by the rulings in the District Court Case. The Company is considering seeking relief in the Court of Federal Claims Case that would, if granted, recoup portions of the damages awarded in the District Court Case should they be upheld.

The Court of Federal Claims Case contains similar 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 United States (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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

This Item is not applicable.

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ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is certain information with respect to all officers (including executive officers) of the Company as of December 31, 2000.

The following is a brief account of the business experience during the past five years through December 31, 2000, of each officer:

Mr. Pulte was appointed Chairman of the Executive Committee of the Board of Directors in December 1998. Previously, Mr. Pulte served as Chairman of the Board since 1991.

Mr. Burgess was appointed Chairman of the Board in December 1998. Previously, Mr. Burgess served as President since October 1985, and was appointed Chief Executive Officer in January 1993.

Mr. Mark O’Brien was appointed President in December 1998. Prior to that date, he served as Executive Vice President and Chief Operating Officer since August 1997 and had served in various capacities with Company subsidiaries, most notably as President of Pulte Home East, an operating unit of Pulte.

Mr. Cregg was appointed Senior Vice President in December 1997 and was named Chief Financial Officer effective January 31, 1998. Before joining the Company, Mr. Cregg was Executive Vice President and Chief Financial Officer of Zenith Electronics Corporation since 1996, and Vice President and Chief Financial Officer of Sweetheart Cup Company from 1990 to 1996.

Mr. Michael O’Brien became Senior Vice President in December 1994.

Mr. Stoller was appointed Senior Vice President in September 1999. Prior to that date, he served as Vice President and General Counsel since October 1990.

Mr. Frees has been Vice President and Controller since May 1995.

Mr. Nelson has been Vice President since August 1993.

Mr. Robinson was appointed Treasurer in July 1998 and was named Vice President and Treasurer effective January 20, 1999. Mr. Robinson has served in various capacities with the Company since 1988, most recently as Director of Research and Analysis.

There is no family relationship between any of the officers. Each officer serves at the pleasure of the Board of Directors.

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The Company’s common stock is listed on the New York Stock Exchange (Symbol: PHM). The table below sets forth, for the quarterly periods indicated, the range of high and low closing prices and cash dividends declared per share.

At December 31, 2000, there were 641 shareholders of record.

ITEM 6. SELECTED FINANCIAL DATA

Set forth below is selected consolidated financial data for each of the past five fiscal years. The selected financial data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s Consolidated Financial Statements and Notes thereto included elsewhere in this report.

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ITEM 6.  SELECTED FINANCIAL DATA (continued)

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Overview:

A summary of the Company’s operating results by business segment for the years ended December 31, 2000, 1999 and 1998 is as follows:

A comparison of pre-tax income (loss), for the years ended December 31, 2000, 1999 and 1998 is as follows:

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Homebuilding Operations:

The Company has organized its homebuilding operations into two distinct business units: Domestic and International.

Certain operating data relating to the Company’s homebuilding operations and joint ventures are as follows:

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Homebuilding Operations (continued):

Domestic Homebuilding:

The Domestic Homebuilding business unit represents the Company’s core business. Operations are conducted in 41 markets, located throughout 25 states, and are organized into five groups as follows:

The Metropolitan Atlanta market accounted for 10% of the total unit settlements in 2000. No other individual market within the 41 markets represented more than 10% of total Domestic Homebuilding net new orders, unit settlements or revenues during the three years ended December 31, 2000.

The following table presents selected unit information for Pulte’s Domestic Homebuilding operations:

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Homebuilding Operations (continued):

Domestic Homebuilding (continued):

Net new orders increased for the twelfth consecutive year to an all-time Company record of 19,844 units in 2000, a 2% increase over 1999 order levels. Contributing to this strong performance were markets in the Central and West groups offset by softer performance in the Northeast and Midwest groups. Order growth in the Northeast, Southeast and Midwest groups, tempered by lower net new orders in the Central and West groups, contributed to a 6% increase in 1999 orders as compared with 1998. 1999 results also reflect an entire year’s results for Radnor Homes and DiVosta & Company, (the “acquired operations”) which were acquired in mid-1998 and contributed net new orders of 1,564 in 1999, compared with 1,182 in 1998.

Unit settlements in 2000 also hit a record-setting high, to 19,799 units. These results reflect strong performance in the Southeast, Central and West groups offset by a decline in the Northeast. Unit settlement activity in 1999 increased 22% over 1998 levels due to increases across all groups. In addition, the acquired operations contributed 1,456 unit settlements in 1999, compared with 683 in 1998. The average home sales price increased from $174 in 1998 to $187 in 1999 and to $206 in the current year. Changes in average selling price reflect a number of factors, including price increases, the mix of product closed during a period and the number of options purchased by customers. Overall, strong demand, supported by favorable economic conditions continued to drive increased order activity and record levels of backlog. These factors contributed to the solid settlement activity during 2000 and 1999.

The Company’s ending backlog was up slightly to 5,477 homes, while the dollar value was up 11% to $1.3 billion. Unit backlog at December 31, 1999, was slightly higher than that noted at the end of 1998 while the dollar value was up 18%.

The following table presents a summary of pre-tax income for Pulte’s Domestic Homebuilding operations:

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Homebuilding Operations (continued):

Domestic Homebuilding (continued):

Gross profit margins in 2000 increased to 18.8%, up 100 basis points over 1999. Gross profit margins in 1999 increased to 17.8%, up 170 basis points over 1998. Factors which continue to contribute to this favorable trend include strong customer demand, positive home pricing, the benefits of leverage-buy purchasing activities and effective production and inventory management.

For the year ended December 31, 2000, selling, general and administrative expenses (SG&A), as a percentage of sales, increased to 9.0% after decreasing 30 basis points to 8.6% in 1999. The increase reflects higher sales and marketing expenses, and startup costs associated with the opening of new communities.

Other income (expense) net, includes net land activity and other homebuilding-related expenses. The increase in other income in 2000 was mainly a result of increased net land activity. Net land activity amounted to $18,000 in 2000 compared to $2,000 in 1999. Net land activity relates to gains/losses on the sale of land, the impact of decisions not to pursue land acquisitions and options, the write-off of related pre-acquisition costs and land inventory valuation reserves on land held for sale. The increase in net land activity represents the Company’s efforts to rationalize certain existing land positions to ensure the most effective use of invested capital. The decrease in other expense for the year ended December 31, 1999 compared to 1998, is due to the wind down of operations and transaction costs related to the sale of Builders Supply and Lumber which are included in 1998.

Pulte’s Domestic Homebuilding operations controlled approximately 76,000 and 70,200 lots, of which approximately 42,600 and 43,000 lots were owned, and approximately 34,100 and 27,200 lots were controlled through option agreements at December 31, 2000 and 1999, respectively. Domestic Homebuilding inventory at December 31, 2000, was approximately $1,828,100 of which $1,293,800 is related to land and land development. At December 31, 1999, inventory was approximately $1,743,400 of which $1,244,200 was related to land and land development. Included in other assets is approximately $88,300 in land held for disposition as of December 31, 2000, as compared to $10,100 in the prior year.

As a component of the Company’s business strategies, the Company acquired all of the outstanding stock of Tennessee-based Radnor Homes and the net assets of an affiliated company on May 27, 1998, for an aggregate purchase price of approximately $58,000. Consideration for this acquisition included approximately $51,000 of cash paid, approximately $3,000 of assumed liabilities and the issuance of 153,570 shares of the Company’s common stock. This transaction was accounted for as a purchase and, as such, the operating results of Radnor Homes since the acquisition date are included in the Company’s results of operations.

On July 1, 1998, the Company acquired the outstanding stock and membership interests in certain closely-held businesses of Florida-based DiVosta & Company for an aggregate purchase price of approximately $155,000. Consideration for this acquisition, which was recorded using the purchase method of accounting, included approximately $109,000 of cash paid, approximately $25,000 of liabilities assumed and $21,000 in the form of a seller-financed note. The purchase price was allocated to the assets acquired and liabilities assumed based on relative fair value estimates. Goodwill of approximately $47,000 represents the excess of the purchase price over these fair value estimates and is amortized using the straight-line method over a seven-year period. The Company has included the operating results of DiVosta & Company since the acquisition date in its consolidated results of operations. Goodwill amortization was $6,600, $6,600 and $3,400 for the years ended December 31, 2000, 1999 and 1998, respectively.

From March 25, 1998, through July 1, 1999, the Company conducted a joint venture for the building of active adult-style communities with Blackstone Real Estate Advisors (BRE), an affiliate of the Blackstone Group. Effective July 1, 1999, the Company purchased BRE’s interest in the net assets of the joint venture for an aggregate cash purchase price of $26 million. The purchase price was allocated to assets acquired and liabilities assumed using the purchase method of accounting. As a result of this purchase, Pulte owns 100% of the operations, and effective July 1, 1999, the operations are fully consolidated with the operating results of Pulte’s other homebuilding operations. Prior to this purchase, and since March 25, 1998, Pulte’s 50% interest in this joint venture was accounted for as an equity investment. The impact of acquiring the additional 50% interest was immaterial to the Company’s 1999 consolidated revenues, pre-tax income from operations, net income and earnings per share (both basic and diluted).

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Homebuilding Operations (continued):

International Homebuilding:

International Homebuilding operations are primarily conducted through subsidiaries of Pulte International Corporation in Mexico, Puerto Rico and Argentina.

The Company’s aggregate net investment in its five homebuilding joint ventures located throughout Mexico approximated $35,600 at December 31, 2000. The largest of these ventures, Condak-Pulte S. de R.L. de C.V., (Condak) is located in the city of Juarez. The Juarez-based venture is currently developing communities in cities including Juarez, Chihuahua, Nuevo Laredo, Monterrey, Reynosa and Matamoros, under agreements with Delphi Automotive Systems, Sony Magneticos de Mexico, S.A. de C.V., an affiliate of Sony Electronics, Inc., and Centro Comerciales Soriana, S.A. de C.V. As of December 31, 2000, the Company’s net investment in Condak approximated $26,900.

Desarrollos Residenciales Turisticos, S.A. de C.V., another of the Company’s joint ventures in Mexico, is constructing primarily social interest housing in Central Mexico. Current development plans for this venture include housing projects in the Bajio region surrounding Mexico City, targeting the cities of Puebla, Queretaro, San Jose du Iturbide, San Juan del Rio and Zamora. At December 31, 2000, the Company’s net investment in this joint venture approximated $7,100.

Desarrolladores Urbanos (Canovanas), S.E., the Company’s Puerto Rican joint venture is developing 121 acres located in Metropolitan San Juan. At December 31, 2000, the Company’s net investment in this joint venture approximated $3,900.

In December 2000, the Company announced its expansion into Argentina through Pulte SRL, its 100%-owned Argentine subsidiary. Its first project is in Pilar, a northern suburb of Buenos Aires. Closings in this new project are not expected to occur until the third quarter of 2001.

The following table presents selected financial data for Pulte’s International Homebuilding operations for the years ended December 31, 2000, 1999 and 1998.

Puerto Rico closed 264 homes in 2000, almost identical to the 262 closings recorded during the prior year. However, average sales prices and average gross margin increased by 23% and 58% respectively, reflecting a change in strategy to convert from a builder of primarily social interest housing to one serving middle-to-upper income consumer groups.

Eliminating the impact of a $2,400 land sale gain recorded in the fourth quarter of 1999, Puerto Rico’s operating results improved in 2000 over the prior year.

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Homebuilding Operations (continued):

International Homebuilding (continued):

The Company’s Mexican joint venture operations recorded 7,718 closings, representing an 19% increase over comparable 1999 results. The Company’s share of pre-tax income of $5,455 for the year for the Mexican joint ventures is slightly lower than the $6,000 recorded in 1999, however, the prior year’s earnings included currency gains of $1,702 versus currency losses of $78 for the current year. Eliminating the impact of the currency gains and losses, operating income for our Mexican operations increased by approximately 29% in 2000.

Financial Services Operations:

The Company conducts its financial services operations principally through Pulte Mortgage Corporation (PMC), the Company’s mortgage banking subsidiary and, during 1999 and prior years, through Pulte Financial Companies, Inc. (PFCI). Pre-tax income (loss) of the Company’s financial services operations is as follows:

Mortgage Banking:

PMC sells its servicing rights on a flow basis through fixed price servicing sales contracts. Due to the short period of time the servicing rights are held, usually two to three months, the Company does not amortize the servicing asset. Since the servicing rights are recorded at the value in the servicing sales contracts, there are no impairment issues related to these assets. PMC also originates mortgage loans using its own funds or borrowings made available to it pursuant to various credit arrangements, and then sells such mortgage loans to outside investors.

Mortgage origination principal volume for the year ended December 31, 2000, increased 3% over 1999, which increased 13% over 1998, due to increases in year-to-date unit sales and higher average selling prices realized in Pulte’s Domestic Homebuilding operations. However, the number of loans for 2000 was down 2% from 1999 levels due to competitive market conditions and rising mortgage interest rates during the last six months of 1999 and first three quarters of 2000. Pulte customers continue to account for the majority of total loan production, representing 83% of total unit production for 2000, compared with 79% in 1999 and 73% in 1998. Refinancings represented less than 2% of total loan production in 2000, compared with 4% in 1999 and almost 10% during 1998. At December 31, 2000, loan application backlog increased 7% to $536,000 as compared to $499,000 and $460,000 at December 31, 1999 and 1998, respectively.

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Financial Services Operations (continued):

Mortgage Banking (continued):

Pre-tax income for the year ended December 31, 2000, was unchanged from 1999, as increases in origination fees and other income were offset by decreases in pricing and marketing gains and net interest income. During 2000, origination fees increased $1,605, or 23%, over the prior year due primarily to an increase in brokered loans. Pricing and marketing gains decreased $3,559, or 13%, from the same period in 1999, primarily due to competitive market conditions for much of 2000. As compared with 1999, net interest income decreased 17% to $1,815 during 2000 as a result of a drop in funded production and a higher cost of funds due to a new warehouse line that became effective March 31, 2000. During 2000, PMC recognized increased equity income from its minority interest in a Mexican mortgage banking company, and also recognized income from mortgage reinsurance operations.

For the year ended December 31, 1999, pre-tax income increased 25% over 1998. Mortgage origination fees increased by $2,029, or 41% due to increases in non-funded loans and higher revenues per loan. Pricing and marketing gains increased $2,289, or 9%, from the same period in 1998, due primarily to an 11% increase in funded mortgage originations. Net interest income in 1999 increased 59% from 1998 to $2,186. This increase was due to higher funded production, a widening of the yield curve and slightly higher average shareholder’s equity. During 1999, PMC recognized increased equity income from its Mexican mortgage banking operations, and also recorded income from the final settlement of a private mortgage insurance bankruptcy. These increases in income were partially offset by general and administrative expenses, which increased $2,946, or 16%, from 1998 due primarily to higher loan production and Year 2000-related expenditures.

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS Nos. 137 and 138, which is required to be adopted for years beginning after June 15, 2000. This Statement requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. To the extent the derivative is effectively hedged, changes in the fair value of the derivative will be recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings. PMC, in the normal course of business, uses derivative financial instruments to meet the financing needs of its customers and reduce its own exposure to fluctuations in interest rates. The Company will adopt this Statement effective January 1, 2001. Based on the Company’s derivative positions as of December 31, 2000, the Company believes that any effects of SFAS No. 133 will not be material to its earnings or financial position.

Financing Activities:

The Company’s secured financing operations, which were conducted by a limited-purpose subsidiary of PFCI, ceased operations during 1999. During the first quarter of 1999, PFCI recognized a net gain of approximately $1,700 in connection with the sale of its remaining mortgage-backed securities portfolio.

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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, to develop and implement strategic initiatives centered on new business development and operating efficiencies, and to provide the administrative support associated with being a publicly traded entity. As a result, the corporate segment’s operating results will vary from year to year as these strategic initiatives evolve.

The following table presents this segment’s results of operations:

The increase in 2000 of the pre-tax loss to $56,296 was primarily a result of an increase in net interest expense. Increases in net interest expense are attributed to higher average use of the Company’s unsecured revolving credit facility in addition to the April 2000 issuance of $175,000 Senior Notes, primarily related to increased working capital requirements of the Homebuilding Operations. Interest incurred for the years ended December 31, 2000, 1999, and 1998, excluding interest incurred by the Company’s financial services operations, was approximately $62,800, $49,500 and $41,400, respectively. The increase in pre-tax loss of $28,258 in 1999, as compared with 1998 resulted from higher net interest expense due to increased short-term borrowings to fund working capital needs; higher costs associated with compensation due to increased profitability, insurance settlements, business development costs; and the write-down of a commercial land position.

Corporate net interest expense is net of amounts capitalized into homebuilding inventories. Amounts capitalized are charged to homebuilding interest expense when the related inventories are closed. Information related to Corporate interest capitalized into inventory is as follows: